Document and Entity Information
Document and Entity Information | 9 Months Ended |
Sep. 30, 2015shares | |
Document and Entity Information | |
Entity Registrant Name | OCCIDENTAL PETROLEUM CORP /DE/ |
Entity Central Index Key | 797,468 |
Document Type | 10-Q |
Document Period End Date | Sep. 30, 2015 |
Amendment Flag | false |
Current Fiscal Year End Date | --12-31 |
Entity Well-known Seasoned Issuer | Yes |
Entity Voluntary Filers | No |
Entity Current Reporting Status | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Common Stock, Shares Outstanding | 763,735,871 |
Document Fiscal Year Focus | 2,015 |
Document Fiscal Period Focus | Q3 |
CONSOLIDATED CONDENSED BALANCE
CONSOLIDATED CONDENSED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
CURRENT ASSETS | ||
Cash and cash equivalents | $ 2,547 | $ 3,789 |
Restricted cash | 1,765 | 4,019 |
Trade receivables, net | 3,507 | 4,206 |
Inventories | 1,122 | 1,052 |
Assets held for sale | 709 | |
Other current assets | 890 | 807 |
Total current assets | 10,540 | 13,873 |
Investments | ||
Investments in unconsolidated entities | 1,428 | 1,171 |
Available for sale investment | 186 | 394 |
Total investments | 1,614 | 1,565 |
PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation, depletion and amortization of $36,612 at September 30, 2015 and $34,785 at December 31, 2014 | 36,835 | 39,730 |
LONG-TERM RECEIVABLES AND OTHER ASSETS, NET | 1,100 | 1,091 |
TOTAL ASSETS | 50,089 | 56,259 |
CURRENT LIABILITIES | ||
Current maturities of long-term debt | 1,450 | |
Accounts payable | 3,727 | 5,229 |
Accrued liabilities | 2,202 | 2,601 |
Domestic and foreign income taxes | 25 | 414 |
Liabilities of assets held for sale | 29 | |
Total current liabilities | 7,433 | 8,244 |
LONG-TERM DEBT, NET | 6,882 | 6,838 |
DEFERRED CREDITS AND OTHER LIABILITIES | ||
Deferred domestic and foreign income taxes | 2,579 | 3,015 |
Other | 3,313 | 3,203 |
Total deferred credits and other liabilities | 5,892 | 6,218 |
STOCKHOLDERS' EQUITY | ||
Common stock, at par value (891,312,915 shares at September 30, 2015 and 890,557,537 shares at December 31, 2014) | 178 | 178 |
Treasury stock (127,577,044 shares at September 30, 2015 and 119,951,199 shares at December 31, 2014) | (9,113) | (8,528) |
Additional paid-in capital | 7,664 | 7,599 |
Retained earnings | 31,712 | 36,067 |
Accumulated other comprehensive loss | (559) | (357) |
Total stockholders' equity | 29,882 | 34,959 |
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY | $ 50,089 | $ 56,259 |
CONSOLIDATED CONDENSED BALANCE3
CONSOLIDATED CONDENSED BALANCE SHEETS (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
CONSOLIDATED CONDENSED BALANCE SHEETS | ||
Accumulated Depreciation, Depletion and Amortization, Property, Plant, and Equipment | $ 36,612 | $ 34,785 |
Common stock, outstanding shares | 891,312,915 | 890,557,537 |
Treasury stock, shares | 127,577,044 | 119,951,199 |
CONSOLIDATED CONDENSED STATEMEN
CONSOLIDATED CONDENSED STATEMENTS OF INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
REVENUES AND OTHER INCOME | ||||
Net sales | $ 3,116 | $ 4,904 | $ 9,674 | $ 15,005 |
Interest, dividends and other income | 31 | 31 | 88 | 108 |
Gain (loss) on sale of assets, net | 99 | (5) | 94 | 520 |
TOTAL REVENUES AND OTHER INCOME | 3,246 | 4,930 | 9,856 | 15,633 |
COSTS AND OTHER DEDUCTIONS | ||||
Cost of sales | 1,413 | 1,736 | 4,450 | 5,070 |
Selling, general and administrative and other operating expenses | 292 | 355 | 950 | 1,101 |
Depreciation, depletion and amortization | 1,123 | 1,056 | 3,268 | 3,057 |
Asset impairments and related items | 3,397 | 3,721 | 471 | |
Taxes other than on income | 79 | 135 | 293 | 430 |
Exploration expense | 5 | 28 | 23 | 91 |
Interest and debt expense, net | 48 | 16 | 86 | 58 |
TOTAL COSTS AND OTHER DEDUCTIONS | 6,357 | 3,326 | 12,791 | 10,278 |
Income (loss) before income taxes and other items | (3,111) | 1,604 | (2,935) | 5,355 |
Benefit (provision) for domestic and foreign income taxes | 445 | (699) | 140 | (2,302) |
Income from equity investments | 60 | 93 | 154 | 243 |
Income (loss) from continuing operations | (2,606) | 998 | (2,641) | 3,296 |
Discontinued operations, net | (3) | 213 | (10) | 741 |
Net income (loss) | (2,609) | 1,211 | (2,651) | 4,037 |
Less: Net income attributable to noncontrolling interest | (3) | (8) | ||
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | $ (2,609) | $ 1,208 | $ (2,651) | $ 4,029 |
BASIC EARNINGS PER COMMON SHARE (attributable to common stock) | ||||
Income (loss) from continuing operations (in dollars per share) | $ (3.41) | $ 1.28 | $ (3.45) | $ 4.18 |
Discontinued operations, net (in dollars per share) | (0.01) | 0.27 | (0.01) | 0.95 |
BASIC EARNINGS PER COMMON SHARE (in dollars per share) | (3.42) | 1.55 | (3.46) | 5.13 |
DILUTED EARNINGS PER COMMON SHARE (attributable to common stock) | ||||
Income (loss) from continuing operations (in dollars per share) | (3.41) | 1.28 | (3.45) | 4.18 |
Discontinued operations, net (in dollars per share) | (0.01) | 0.27 | (0.01) | 0.95 |
DILUTED EARNINGS PER COMMON SHARE (in dollars per share) | (3.42) | 1.55 | (3.46) | 5.13 |
DIVIDENDS PER COMMON SHARE (in dollars per share) | $ 0.75 | $ 0.72 | $ 2.22 | $ 2.16 |
CONSOLIDATED CONDENSED STATEME5
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Net income (loss) attributable to common stock | $ (2,609) | $ 1,208 | $ (2,651) | $ 4,029 |
Other comprehensive (loss) income items: | ||||
Foreign currency translation loss | (1) | (1) | (2) | (1) |
Unrealized loss on available for sale investment | (246) | (208) | ||
Unrealized gains (losses) on derivatives | 2 | 2 | (5) | |
Pension and postretirement gain | 1 | 3 | 5 | 12 |
Reclassification to income of realized loss on derivatives | 1 | 1 | 8 | |
Other comprehensive income (loss), net of tax | (243) | 2 | (202) | 14 |
Comprehensive income (loss) | $ (2,852) | $ 1,210 | $ (2,853) | $ 4,043 |
CONSOLIDATED CONDENSED STATEME6
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME (Parenthetical) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
CONSOLIDATED CONDENSED STATEMENTS OF COMPREHENSIVE INCOME | ||||
Unrealized gains (losses) on derivatives, tax | $ (1) | $ 0 | $ (1) | $ 3 |
Pension and postretirement gains, tax | (1) | (2) | (3) | (7) |
Reclassification to income of realized losses on derivatives, tax | 0 | 0 | 0 | (5) |
Other comprehensive income (loss) related to noncontrolling interests | $ 0 | $ 0 | $ 0 | $ 0 |
CONSOLIDATED CONDENSED STATEME7
CONSOLIDATED CONDENSED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
CASH FLOW FROM OPERATING ACTIVITIES | ||
Net income (loss) | $ (2,651) | $ 4,037 |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||
Discontinued operations, net | 10 | (741) |
Depreciation, depletion and amortization of assets | 3,268 | 3,057 |
Deferred income tax (benefit) provision | (417) | 220 |
Other noncash charges to income | 359 | 111 |
Gain on sale of assets, net | (94) | (520) |
Undistributed earnings from affiliates | (3) | 22 |
Asset impairments | 3,364 | 471 |
Dry hole expenses | 4 | 48 |
Changes in operating assets and liabilities, net | (938) | (315) |
Other operating, net | (499) | |
Operating cash flow from continuing operations | 2,403 | 6,390 |
Operating cash flow from discontinued operations | (17) | 1,812 |
Net cash provided by operating activities | 2,386 | 8,202 |
CASH FLOW FROM INVESTING ACTIVITIES | ||
Capital expenditures | (4,192) | (5,959) |
Change in capital accrual | (652) | |
Proceeds from sale of assets and equity investments, net | 151 | 1,387 |
Purchase of businesses and other assets, net | (52) | (352) |
Other, net | (373) | (245) |
Investing cash flow from continuing operations | (5,118) | (5,169) |
Investing cash flow from discontinued operations | (1,661) | |
Net cash used by investing activities | (5,118) | (6,830) |
CASH FLOW FROM FINANCING ACTIVITIES | ||
Change in restricted cash | 2,254 | |
Proceeds from long-term debt | 1,478 | |
Payment of long-term debt | (107) | |
Proceeds from short-term borrowings | 1,599 | |
Proceeds from issuance of common stock | 34 | 20 |
Purchases of treasury stock | (586) | (2,083) |
Cash dividends paid | (1,690) | (1,649) |
Contributions from noncontrolling interest | 351 | |
Other, net | 1 | |
Net cash provided (used) by financing activities | 1,490 | (1,868) |
Decrease in cash and cash equivalents | (1,242) | (496) |
Cash and cash equivalents-beginning of period | 3,789 | 3,393 |
Cash and cash equivalents-end of period | $ 2,547 | $ 2,897 |
General
General | 9 Months Ended |
Sep. 30, 2015 | |
General | |
General | 1. General In these unaudited consolidated condensed financial statements, “Occidental” means Occidental Petroleum Corporation, a Delaware corporation (OPC), or OPC and one or more entities in which it owns a controlling interest (subsidiaries). Occidental has made its disclosures in accordance with United States generally accepted accounting principles (GAAP) as they apply to interim reporting, and condensed or omitted, as permitted by the Securities and Exchange Commission’s rules and regulations, certain information and disclosures normally included in consolidated financial statements and the notes. These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2014. In the opinion of Occidental’s management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present Occidental’s consolidated financial position as of September 30, 2015, and the consolidated statements of operations, comprehensive income and cash flows for the three and nine months ended September 30, 2015 and 2014, as applicable. The income and cash flows for the periods ended September 30, 2015 and 2014 are not necessarily indicative of the income or cash flows to be expected for the full year. As a result of the spin-off of California Resources Corporation (California Resources), the statements of operations and cash flows related to California Resources have been treated as discontinued operations for the three and nine months ended September 30, 2014. The assets and liabilities of California Resources were removed from Occidental’s consolidated balance sheet as of November 30, 2014. See Note 2, Asset Acquisitions, Dispositions and Other, for additional information. |
Asset Acquisitions, Disposition
Asset Acquisitions, Dispositions and Other | 9 Months Ended |
Sep. 30, 2015 | |
Asset Acquisitions, Dispositions and Other | |
Asset Acquisitions, Dispositions and Other | 2. Asset Acquisitions, Dispositions and Other In October 2015, Occidental completed the sale of its Westwood building in Los Angeles, California for net proceeds of $65 million. As of September 30, 2015, the Westwood building has been classified as held for sale. In September 2015, Occidental entered into a sales agreement to sell its Williston operations in North Dakota. Occidental recorded a pre-tax impairment charge for $763 million to write down the value of the Williston operations to the sales price and has classified the Williston assets and liabilities as held for sale. The transaction is expected to be completed in November 2015. In June 2015, Occidental issued $1.5 billion of debt that was comprised of $750 million of 3.50-percent senior unsecured notes due 2025 and $750 million of 4.625-percent senior unsecured notes due 2045. Occidental received net proceeds of approximately $1.48 billion. Interest on the notes will be payable semi-annually in arrears in June and December of each year for both series of notes, beginning on December 15, 2015. On November 30, 2014, the spin-off of Occidental’s California oil and gas operations and related assets was completed through the distribution of 81.3 percent of the outstanding shares of common stock of California Resources to holders of Occidental common stock, creating an independent, publicly traded company. In connection with the spin-off, California Resources distributed to Occidental $4.95 billion in restricted cash and $1.15 billion in unrestricted cash. Occidental retained 71.5 million shares of California Resources. See Note 9, Fair Value Measurements , for additional information. In order to maintain the tax-free nature of the spin-off, the $4.95 billion in restricted cash must be used solely to pay dividends, repurchase common stock, repay debt, or a combination of the foregoing within 18 months following the distribution. The retained California Resources shares must be exchanged for Occidental shares or distributed by June 1, 2016. At September 30, 2015, the remaining balance of the restricted cash distribution was $1.8 billion and was presented as “Restricted cash” on the consolidated balance sheet. Sales and other operating revenues and income from discontinued operations related to California Resources for the three and nine months ended September 30, 2014 were as follows (in millions): Three months ended September 30 Nine months ended September 30 Sales and other operating revenue from discontinued operations $ $ Income from discontinued operations before-tax $ $ Income tax expense ) ) Income from discontinued operations $ $ |
Accounting and Disclosure Chang
Accounting and Disclosure Changes | 9 Months Ended |
Sep. 30, 2015 | |
Accounting and Disclosure Changes | |
Accounting and Disclosure Changes | 3. Accounting and Disclosure Changes In September 2015, the Financial Accounting Standards Board (FASB) issued rules removing the obligation for a business acquirer to retrospectively recognize adjustments to provisional amounts that were identified during the measurement period of a business combination. Under the new rules, the acquirer is required to record in the same period’s financial statements the effect on earnings as a result of the change to the provisional amounts, calculated as if the accounting had been completed at the acquisition date. The rules become effective for interim and annual periods beginning after December 15, 2015. The rules are not expected to have a significant impact on Occidental’s financial statements upon adoption. In August 2015, the FASB issued rules to defer the effective date of the new revenue recognition standard to interim and annual periods beginning after December 15, 2017. Under the new rules, an entity will recognize revenue when it transfers promised goods or services to customers in an amount that reflects what it expects to receive in exchange for the goods and services. The new rules also require more detailed disclosures related to the nature, amount, timing, and uncertainty of revenue and cash flows arising from contracts with customers. The rules are not expected to have a significant impact on Occidental’s financial statements upon adoption. In May 2015, the FASB issued rules modifying how entities measure certain investments at net asset value as well as how they are categorized within the fair value hierarchy. The new rules remove the requirement to categorize within the fair value hierarchy all investments for which fair value is measured using the net asset value per share. The update also removes the requirement for certain disclosures for all investments that are eligible to be measured at fair value using the net asset value per share practice, and instead requires it for only those investments the entity elects to measure as such. The rules become effective for fiscal years, and for interim periods, beginning after December 15, 2015. The rules will not have a significant impact on Occidental’s financial statements. In April 2015, the FASB issued rules simplifying the presentation of debt issuance costs. The new rules require that debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct deduction from the carrying amount of that debt liability, consistent with debt discounts. The rules become effective for fiscal years, and for interim periods, beginning after December 15, 2015. The rules will not have a significant impact on Occidental’s financial statements. In February 2015, the FASB issued rules modifying how an entity should evaluate certain legal entities for consolidation. The modifications change how limited partnerships and similar legal entities are evaluated, eliminate the presumption that a general partner should consolidate limited partnerships, change the consolidation analysis for reporting entities that are involved with variable interest entities, and change the scope exception for certain legal entities, among other things. The rules become effective for fiscal years, and for interim periods, beginning after December 15, 2015. The rules are not expected to have an impact on Occidental’s financial statements upon adoption. In January 2015, the FASB issued rules that eliminate from GAAP the concept of an extraordinary item. The presentation and disclosure guidance for items that are unusual in nature or occur infrequently will be retained and expanded to include items that are both unusual in nature and infrequently occurring. The rules do not impact Occidental’s financial statements upon adoption. |
Supplemental Cash Flow Informat
Supplemental Cash Flow Information | 9 Months Ended |
Sep. 30, 2015 | |
Supplemental Cash Flow Information | |
Supplemental Cash Flow Information | 4. Supplemental Cash Flow Information Occidental paid United States federal, state and foreign income taxes of $0.8 billion and $2.6 billion during the nine months ended September 30, 2015 and 2014, respectively. Interest paid totaled $0.2 billion in each of the nine months ended September 30, 2015 and 2014. |
Inventories
Inventories | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Inventories | 5. Inventories A portion of inventories is valued under the LIFO method. The valuation of LIFO inventory for interim periods is based on Occidental’s estimates of year-end inventory levels and costs. Inventories as of September 30, 2015 and December 31, 2014 consisted of the following (in millions): 2015 2014 Raw materials $ $ Materials and supplies Finished goods Revaluation to LIFO ) ) Total $ $ |
Environmental Liabilities and E
Environmental Liabilities and Expenditures | 9 Months Ended |
Sep. 30, 2015 | |
Environmental Liabilities and Expenditures | |
Environmental Liabilities and Expenditures | 6. Environmental Liabilities and Expenditures Occidental’s operations are subject to stringent federal, state, local and foreign laws and regulations related to improving or maintaining environmental quality. The laws that require or address environmental remediation, including the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA) and similar federal, state, local and foreign laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites. OPC 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 of hazardous substances; or operation and maintenance of remedial systems. Government or private 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. As of September 30, 2015, Occidental participated in or monitored remedial activities or proceedings at 148 sites. The following table presents Occidental’s environmental remediation reserves as of September 30, 2015, the current portion of which is included in accrued liabilities ($79 million) and the remainder in deferred credits and other liabilities — other ($236 million). The reserves are grouped as environmental remediation sites listed or proposed for listing by the United States Environmental Protection Agency on the CERCLA National Priorities List (NPL sites) and three categories of non-NPL sites — third-party sites, Occidental-operated sites and closed or non-operated Occidental sites. Number of Sites Reserve Balance (in millions) NPL sites $ Third-party sites Occidental-operated sites Closed or non-operated Occidental sites Total $ As of September 30, 2015, Occidental’s environmental reserves exceeded $10 million each at 10 of the 148 sites described above, and 104 of the sites each had reserves of $1 million or less. Based on current estimates, Occidental expects to expend funds corresponding to approximately half of the current environmental reserves at the sites described above over the next three to four years and the 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 $395 million. The status of Occidental’s involvement with the sites and related significant assumptions has not changed materially since December 31, 2014. For additional information regarding environmental matters, refer to Note 7, Lawsuits, Claims, Commitments and Contingencies . |
Lawsuits, Claims, Commitments a
Lawsuits, Claims, Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2015 | |
Lawsuits, Claims, Commitments and Contingencies | |
Lawsuits, Claims, Commitments and Contingencies | 7. Lawsuits, Claims, Commitments and Contingencies OPC 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. OPC or certain of its subsidiaries also are involved in proceedings under CERCLA and similar federal, state, local and foreign 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 OPC 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. 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 matters. Reserve balances for other matters as of September 30, 2015 and December 31, 2014 were not material to Occidental’s consolidated balance sheets. Occidental also evaluates the amount of reasonably possible losses that it could incur as a result of the matters mentioned above. Occidental has disclosed its range of reasonably possible additional losses for sites where it is a participant in environmental remediation. Occidental believes that other reasonably possible losses that it could incur in excess of reserves accrued on the balance sheet would not be material to its consolidated financial position or results of operations. During the course of its operations, Occidental is subject to audit by tax authorities for varying periods in various federal, state, local and foreign tax jurisdictions. Although taxable years through 2009 for United States federal income tax purposes have been audited by the IRS pursuant to its Compliance Assurance Program, subsequent taxable years are currently under review. Additionally, in December 2012, Occidental filed United States federal refund claims for tax years 2008 and 2009, which are subject to IRS review. Taxable years from 2000 through the current year remain subject to examination by foreign and state government tax authorities in certain jurisdictions. In certain of these jurisdictions, tax authorities are in various stages of auditing Occidental’s income taxes. 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 financial position or results of operations. OPC, 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, 2015, 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. |
Retirement and Postretirement B
Retirement and Postretirement Benefit Plans | 9 Months Ended |
Sep. 30, 2015 | |
Retirement and Postretirement Benefit Plans | |
Retirement and Postretirement Benefit Plans | 8. Retirement and Post-retirement Benefit Plans The following tables set forth the components of the net periodic benefit costs for Occidental’s defined benefit pension and post-retirement benefit plans for the three and nine months ended September 30, 2015 and 2014 (in millions): Three months ended September 30 2015 2014 Net Periodic Benefit Costs Pension Benefit Post- retirement Benefit Pension Benefit Post- retirement Benefit Service cost $ $ $ $ Interest cost Expected return on plan assets ) — ) — Recognized actuarial loss Total $ $ $ $ Nine months ended September 30 2015 2014 Net Periodic Benefit Costs Pension Benefit Post- retirement Benefit Pension Benefit Post- retirement Benefit Service cost $ $ $ $ Interest cost Expected return on plan assets ) — ) — Recognized actuarial loss Total $ $ $ $ Occidental contributed approximately $2 million and $1 million to its defined benefit pension plans in the three-months ended September 30, 2015 and 2014, respectively. Occidental contributed approximately $7 million and $4 million in the nine months ended September 30, 2015 and 2014, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Fair Value Measurements | 9. Fair Value Measurements Occidental has categorized its assets and liabilities that are measured at fair value in a three-level fair value hierarchy, based on the inputs to the valuation techniques: Level 1 — using quoted prices in active markets for the assets or liabilities; Level 2 — using observable inputs other than quoted prices for the assets or liabilities; and Level 3 — using unobservable inputs. Transfers between levels, if any, are recognized at the end of each reporting period. Fair Values — Recurring Occidental primarily applies the market approach for recurring fair value measurements, maximizes its use of observable inputs and minimizes its use of unobservable inputs. Occidental utilizes the mid-point between bid and ask prices for valuing the majority of its assets and liabilities measured and reported at fair value. In addition to using market data, Occidental makes assumptions in valuing its assets and liabilities, including assumptions about the risks inherent in the inputs to the valuation technique. For assets and liabilities carried at fair value, Occidental measures fair value using the following methods: Ø Occidental values exchange-cleared commodity derivatives using closing prices provided by the exchange as of the balance sheet date. Those derivatives are classified as Level 1. Over-the-Counter (OTC) bilateral financial commodity contracts, foreign exchange contracts, options and physical commodity forward purchase and sale contracts are generally classified as Level 2 and are generally valued using quotations provided by brokers or industry-standard models that consider various inputs, including quoted forward prices for commodities, time value, volatility factors, credit risk and current market and contractual prices for the underlying instruments, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument, and can be derived from observable data or are supported by observable prices at which transactions are executed in the marketplace. Ø Occidental values commodity derivatives based on a market approach that considers various assumptions, including quoted forward commodity prices and market yield curves. The assumptions used include inputs that are generally unobservable in the marketplace, or are observable but have been adjusted based upon various assumptions and the fair value is designated as Level 3 within the valuation hierarchy. Ø Occidental values its available for sale investment in California Resources based on the closing share price of California Resources’ common stock as of the balance sheet date. This investment is classified as Level 1. At September 30, 2015, Occidental had approximately 71.5 million shares of common stock of California Resources, which are recorded as a $186 million available for sale investment. As a result of a declining trading price in the third quarter of 2015, Occidental has recorded unrealized losses of $208 million in accumulated other comprehensive income for this available for sale investment. Occidental considers available evidence including the results of California Resources, the volatility of oil prices, recent unrealized gains and losses resulting from share price fluctuation, and other factors to determine whether the decline in value is other than temporary. Occidental has concluded the investment is not impaired at September 30, 2015. Occidental generally uses an income approach to measure fair value when observable inputs are unavailable. This approach utilizes management’s judgments regarding expectations of projected cash flows, and discounts those cash flows using a risk adjusted discount rate. The following tables provide fair value measurement information for such assets and liabilities that are measured on a recurring basis as of September 30, 2015 and December 31, 2014 (in millions): Fair Value Measurements at September 30, 2015: Description Level 1 Level 2 Level 3 Netting and Collateral Total Fair Value Assets: Commodity derivatives $ $ $ — $ ) $ Available for sale investment $ $ — $ — $ — $ Liabilities: Commodity derivatives $ $ $ — $ ) $ Fair Value Measurements at December 31, 2014: Description Level 1 Level 2 Level 3 Netting and Collateral Total Fair Value Assets: Commodity derivatives $ $ $ — $ ) $ Available for sale investment $ $ — $ — $ — $ Liabilities: Commodity derivatives $ $ $ — $ ) $ Fair Values — Nonrecurring The following table provides fair value measurement for such proved domestic and international oil and gas properties that are measured on a nonrecurring basis as of September 30, 2015. Occidental considers the sales agreement to sell its Williston operations as Level 3 in the fair value hierarchy. The following table also includes those proved properties measured for impairment based on an income approach. The impairment tests, including the fair value estimation, incorporated a number of assumptions involving expectations of future cash flows. These assumptions included estimates of future product prices, which Occidental based on forward price curves and, where applicable, contractual prices, estimates of oil and gas reserves, estimates of future expected operating and development costs and a risk adjusted discount rate. These inputs are categorized as Level 3 in the fair value hierarchy. See Note 11, Industry Segments , for additional information. Fair Value Measurements at September 30, 2015 Using Description Level 1 Level 2 Level 3 Net Book Value (a) Total Pre-tax (Non-cash) Impairment Loss Assets: Impaired proved oil and gas assets - domestic $ — $ — $ $ $ Impaired proved oil and gas assets - international $ — $ — $ $ $ (a) Amount represents net book value at date of assessment. Other Financial Instruments The carrying amounts of cash and cash equivalents and other on-balance-sheet financial instruments, other than long term fixed-rate debt, approximate fair value. The cost, if any, to terminate Occidental’s off-balance-sheet financial instruments is not significant. Occidental estimates the fair value of fixed-rate debt based on the quoted market prices for those instruments or on quoted market yields for similarly rated debt instruments, taking into account such instruments’ maturities. The estimated fair value of Occidental’s debt as of September 30, 2015 and December 31, 2014 was $8.7 billion and $7.0 billion, respectively, and its carrying value net of unamortized discount as of September 30, 2015 and December 31, 2014 was $8.3 billion and $6.8 billion, respectively. The majority of Occidental’s debt is classified as Level 1, with $68 million classified as Level 2. |
Derivatives
Derivatives | 9 Months Ended |
Sep. 30, 2015 | |
Derivatives | |
Derivatives | 10. Derivatives Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty. Occidental applies hedge accounting when transactions meet specified criteria for cash-flow hedge treatment and management elects and documents such treatment. Otherwise, any fair value gains or losses are recognized in earnings in the current period. Occidental uses a variety of derivative instruments, including cash-flow hedges and derivative instruments not designated as hedging instruments, to obtain average prices for the relevant production month and to improve realized prices for oil and gas. Occidental only occasionally hedges its oil and gas production, and, when it does, the volumes are usually insignificant. Cash-Flow Hedges Occidental’s marketing and trading operations, from time to time, store natural gas purchased from third parties at Occidental’s North American leased storage facilities. Derivative instruments are used to fix margins on the future sales of the stored volumes through March 2016. As of September 30, 2015, Occidental had approximately 13 billion cubic feet of natural gas held in storage, and had cash-flow hedges for the forecast sale, to be settled by physical delivery, of approximately 6 billion cubic feet of stored natural gas. As of December 31, 2014, Occidental did not have any cash-flow hedges. Occidental’s after-tax gains and losses recognized in, and reclassified to income from, Accumulated Other Comprehensive Income (AOCI) for derivative instruments classified as cash-flow hedges for the three and nine months ended September 30, 2015 and 2014, and the ending AOCI balances for each period, were not material. The gains and losses reclassified to income were recognized in net sales, and the amount of the ineffective portion of cash-flow hedges was immaterial for the three and nine months ended September 30, 2015 and 2014. Derivatives Not Designated as Hedging Instruments The following table summarizes Occidental’s net volumes of outstanding commodity derivatives contracts not designated as hedging instruments, including both financial and physical derivative contracts as of September 30, 2015 and December 31, 2014: Net Outstanding Position Long / (Short) Commodity 2015 2014 Oil (million barrels) ) Natural gas (billion cubic feet) ) ) Carbon dioxide (billion cubic feet) The volumes in the table above exclude contracts tied to index prices, for which the fair value, if any, is minimal at any point in time. These excluded contracts do not expose Occidental to price risk because the contract prices fluctuate with index prices. Occidental fulfills short positions through its own production or by third-party purchase contracts. Subsequent to September 30, 2015, Occidental entered into purchase contracts for a substantial portion of the short positions outstanding at quarter end and has sufficient production capacity and the ability to enter into additional purchase contracts to satisfy the remaining positions. Approximately $119 million of net losses from derivatives not designated as hedging instruments and $72 million of net losses were recognized in net sales for the three months ended September 30, 2015 and 2014, respectively. Approximately $163 million of net losses from derivatives not designated as hedging instruments and $12 million of net gains were recognized in net sales for the nine months ended September 30, 2015 and 2014, respectively. Fair Value of Derivatives The following table presents the gross and net fair values of Occidental’s outstanding derivatives as of September 30, 2015 and December 31, 2014 (in millions): Asset Derivatives Liability Derivatives September 30, 2015 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash-flow hedges(a) Commodity contracts Other current assets Accrued liabilities — — Derivatives not designated as hedging instruments (a) Other current assets Accrued liabilities Commodity contracts Long-term receivables and other assets, net Deferred credits and other liabilities Total gross fair value Less: counterparty netting and cash collateral (b,d) ) ) Total net fair value of derivatives $ $ Asset Derivatives Liability Derivatives December 31, 2014 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments (a) Other current assets Accrued liabilities Commodity contracts Long-term receivables and other assets, net Deferred credits and other liabilities Total gross fair value Less: counterparty netting and cash collateral (c,d) ) ) Total net fair value of derivatives $ $ (a) Fair values are presented at gross amounts, including when the derivatives are subject to master netting arrangements and presented on a net basis in the consolidated balance sheets. (b) As of September 30, 2015, collateral received of $1 million has been netted against the derivative assets and collateral paid of $17 million has been netted against derivative liabilities. (c) As of December 31, 2014, no collateral was received against the derivative assets and collateral paid of $8 million has been netted against derivative liabilities. (d) Select clearinghouses and brokers require Occidental to post an initial margin deposit. Collateral, mainly for initial margin, of $35 million and $44 million deposited by Occidental has not been reflected in these derivative fair value tables as of September 30, 2015 and December 31, 2014, respectively. This collateral is included in other current assets in the consolidated balance sheets as of September 30, 2015 and December 31, 2014, respectively. See Note 9, Fair Value Measurements, for fair value measurement disclosures on derivatives. Credit Risk A large portion of Occidental’s derivative transaction volume is executed through the over-the-counter (OTC) market. Occidental is subject to counterparty credit risk to the extent the counterparty to the derivatives is unable to meet its settlement commitments. Occidental manages this credit risk by selecting counterparties that it believes to be financially strong, by spreading the credit risk among many such counterparties, by entering into master netting arrangements with the counterparties and by requiring collateral, as appropriate. Occidental actively monitors the creditworthiness of each counterparty and records valuation adjustments to reflect counterparty risk, if necessary. Occidental executes the rest of its derivative transactions in the exchange-traded market, which are subject to minimal credit risk as a significant portion of these transactions is settled on a daily margin basis with select clearinghouses and brokers. Certain of Occidental’s OTC 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 would need to post. As of September 30, 2015 and December 31, 2014, Occidental had a net liability of zero and $4 million, respectively, which is net of collateral posted of zero and $3 million, respectively. Occidental believes that if it had received a one-notch reduction in its credit ratings, it would not have resulted in a material change in its collateral-posting requirements as of September 30, 2015 and December 31, 2014. |
Industry Segments
Industry Segments | 9 Months Ended |
Sep. 30, 2015 | |
Industry Segments | |
Industry Segments | 11. Industry Segments Occidental conducts its operations through three segments: (1) oil and gas; (2) chemical; and (3) midstream and marketing. The oil and gas segment explores for, develops and produces oil and condensate, natural gas liquids (NGLs) and natural gas. The chemical segment mainly manufactures and markets basic chemicals and vinyls. The midstream and marketing segment gathers, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, carbon dioxide (CO 2 ) and power. It also trades around its assets, including transportation and storage capacity, and trades oil, NGLs, gas and power. Additionally, the midstream and marketing segment invests in entities that conduct similar activities. Earnings of industry segments generally exclude income taxes, interest income, interest expense, environmental remediation expenses, unallocated corporate expenses and discontinued operations, but include gains and losses from dispositions of segment and geographic area assets and income from the segments’ equity investments. 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 tables present Occidental’s industry segments (in millions): Oil Midstream Corporate and and and Gas Chemical Marketing Eliminations Total Three months ended September 30, 2015 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ ) (a) $ (b) $ $ ) (c) $ ) Income taxes — — — (d) Discontinued operations, net — — — ) ) Net income (loss) attributable to common stock $ ) $ $ $ $ ) Three months ended September 30, 2014 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ $ $ $ ) (c) $ Income taxes — — — ) (d) ) Discontinued operations, net — — — Net income attributable to noncontrolling interest — — ) — ) Net income (loss) attributable to common stock $ $ $ $ ) $ Oil Midstream Corporate and and and Gas Chemical Marketing Eliminations Total Nine months ended September 30, 2015 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ ) (a) $ (b) $ $ ) (c) $ ) Income taxes — — — (d) Discontinued operations, net — — — ) ) Net income (loss) attributable to common stock $ ) $ $ $ ) $ ) Nine months ended September 30, 2014 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ $ $ $ ) (c) $ Income taxes — — — ) (d) ) Discontinued operations, net — — — Net income attributable to noncontrolling interest — — ) — ) Net income (loss) attributable to common stock $ $ $ $ ) $ (a) The three months ended September 30, 2015 includes pre-tax impairment charges of $3.1 billion. In September 2015, Occidental entered into a sales agreement to sell its Williston operations in North Dakota, and as such an impairment charge of $756 million was recorded to write down the net book value of the assets and liabilities held for sale to the sales price. Due to the significant decline in oil and gas futures prices, Occidental also recorded impairment charges on proved and unproved properties related to Occidental’s domestic gas operations of $924 million, Iraq operations of $760 million and Libya operations of $676 million. The nine months ended September 30, 2015 also reflected first quarter impairment charges of $195 million for Occidental’s South Texas Eagle Ford non-operated properties and $41 million to write-off the remaining investment in Yemen due to the collapse of the country’s government. (b) Includes gain on the sale of an idled chemical site for $98 million. (c) Includes unallocated net interest expense, administration expense, environmental remediation and other pre-tax items. (d) Includes all foreign and domestic income taxes from continuing operations. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share | |
Earnings Per Share | 12. Earnings Per Share Occidental’s instruments containing rights to nonforfeitable dividends granted in stock-based awards are considered participating securities prior to vesting and, therefore, net income allocated to these participating securities has been deducted from earnings in computing basic and diluted EPS under the two-class method. Basic EPS was computed by dividing net income attributable to common stock, net of income allocated to participating securities, by the weighted-average number of common shares outstanding during each period, net of treasury shares and including vested but unissued shares and share units. The computation of diluted EPS reflects the additional dilutive effect of stock options and unvested stock awards. The following table presents the calculation of basic and diluted EPS for the three and nine months ended September 30, 2015 and 2014 (in millions, except per-share amounts): Three months ended September 30 Nine months ended September 30 2015 2014 2015 2014 Basic EPS Income (loss) from continuing operations $ ) $ $ ) $ Less: Income from continuing operations attributable to noncontrolling interest — ) — ) Income (loss) from continuing operations attributable to common stock ) ) Discontinued operations, net ) ) Net income (loss) ) ) Less: Net income allocated to participating securities — ) — ) Net income (loss), net of participating securities ) ) Weighted average number of basic shares Basic EPS $ ) $ $ ) $ Diluted EPS Net income (loss), net of participating securities $ ) $ $ ) $ Weighted average number of basic shares Dilutive effect of potentially dilutive securities — — Total diluted weighted average common shares Diluted EPS $ ) $ $ ) $ |
Asset Acquisitions, Dispositi20
Asset Acquisitions, Dispositions and Other (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Asset Acquisitions, Dispositions and Other | |
Schedule of sales and other operating revenues and income from discontinued operations (in millions) | Three months ended September 30 Nine months ended September 30 Sales and other operating revenue from discontinued operations $ $ Income from discontinued operations before-tax $ $ Income tax expense ) ) Income from discontinued operations $ $ |
Inventories (Tables)
Inventories (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Inventories | |
Inventories (in millions) | 2015 2014 Raw materials $ $ Materials and supplies Finished goods Revaluation to LIFO ) ) Total $ $ |
Environmental Liabilities and22
Environmental Liabilities and Expenditures (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Environmental Liabilities and Expenditures | |
Environmental loss contingencies by categories of sites | Number of Sites Reserve Balance (in millions) NPL sites $ Third-party sites Occidental-operated sites Closed or non-operated Occidental sites Total $ |
Retirement and Postretirement23
Retirement and Postretirement Benefit Plans (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Retirement and Postretirement Benefit Plans | |
Components of the net periodic benefit cost (in millions) | Three months ended September 30 2015 2014 Net Periodic Benefit Costs Pension Benefit Post- retirement Benefit Pension Benefit Post- retirement Benefit Service cost $ $ $ $ Interest cost Expected return on plan assets ) — ) — Recognized actuarial loss Total $ $ $ $ Nine months ended September 30 2015 2014 Net Periodic Benefit Costs Pension Benefit Post- retirement Benefit Pension Benefit Post- retirement Benefit Service cost $ $ $ $ Interest cost Expected return on plan assets ) — ) — Recognized actuarial loss Total $ $ $ $ |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Fair Value Measurements | |
Assets and liabilities measured at fair value on a recurring basis (in millions) | Fair Value Measurements at September 30, 2015: Description Level 1 Level 2 Level 3 Netting and Collateral Total Fair Value Assets: Commodity derivatives $ $ $ — $ ) $ Available for sale investment $ $ — $ — $ — $ Liabilities: Commodity derivatives $ $ $ — $ ) $ Fair Value Measurements at December 31, 2014: Description Level 1 Level 2 Level 3 Netting and Collateral Total Fair Value Assets: Commodity derivatives $ $ $ — $ ) $ Available for sale investment $ $ — $ — $ — $ Liabilities: Commodity derivatives $ $ $ — $ ) $ |
Pre-tax charges related to impairments | Fair Value Measurements at September 30, 2015 Using Description Level 1 Level 2 Level 3 Net Book Value (a) Total Pre-tax (Non-cash) Impairment Loss Assets: Impaired proved oil and gas assets - domestic $ — $ — $ $ $ Impaired proved oil and gas assets - international $ — $ — $ $ $ (a) Amount represents net book value at date of assessment. |
Derivatives (Tables)
Derivatives (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Derivatives - table | |
Gross and net fair values of outstanding derivatives (in millions) | Asset Derivatives Liability Derivatives September 30, 2015 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Cash-flow hedges(a) Commodity contracts Other current assets Accrued liabilities — — Derivatives not designated as hedging instruments (a) Other current assets Accrued liabilities Commodity contracts Long-term receivables and other assets, net Deferred credits and other liabilities Total gross fair value Less: counterparty netting and cash collateral (b,d) ) ) Total net fair value of derivatives $ $ Asset Derivatives Liability Derivatives December 31, 2014 Balance Sheet Location Fair Value Balance Sheet Location Fair Value Derivatives not designated as hedging instruments (a) Other current assets Accrued liabilities Commodity contracts Long-term receivables and other assets, net Deferred credits and other liabilities Total gross fair value Less: counterparty netting and cash collateral (c,d) ) ) Total net fair value of derivatives $ $ (a) Fair values are presented at gross amounts, including when the derivatives are subject to master netting arrangements and presented on a net basis in the consolidated balance sheets. (b) As of September 30, 2015, collateral received of $1 million has been netted against the derivative assets and collateral paid of $17 million has been netted against derivative liabilities. (c) As of December 31, 2014, no collateral was received against the derivative assets and collateral paid of $8 million has been netted against derivative liabilities. (d) Select clearinghouses and brokers require Occidental to post an initial margin deposit. Collateral, mainly for initial margin, of $35 million and $44 million deposited by Occidental has not been reflected in these derivative fair value tables as of September 30, 2015 and December 31, 2014, respectively. This collateral is included in other current assets in the consolidated balance sheets as of September 30, 2015 and December 31, 2014, respectively. |
Not designated as hedging instruments | Commodity Contracts | |
Derivatives - table | |
Net volumes of outstanding commodity derivatives contracts | Net Outstanding Position Long / (Short) Commodity 2015 2014 Oil (million barrels) ) Natural gas (billion cubic feet) ) ) Carbon dioxide (billion cubic feet) |
Industry Segments (Tables)
Industry Segments (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Industry Segments | |
Industry segment and corporate disclosures (in millions) | Oil Midstream Corporate and and and Gas Chemical Marketing Eliminations Total Three months ended September 30, 2015 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ ) (a) $ (b) $ $ ) (c) $ ) Income taxes — — — (d) Discontinued operations, net — — — ) ) Net income (loss) attributable to common stock $ ) $ $ $ $ ) Three months ended September 30, 2014 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ $ $ $ ) (c) $ Income taxes — — — ) (d) ) Discontinued operations, net — — — Net income attributable to noncontrolling interest — — ) — ) Net income (loss) attributable to common stock $ $ $ $ ) $ Oil Midstream Corporate and and and Gas Chemical Marketing Eliminations Total Nine months ended September 30, 2015 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ ) (a) $ (b) $ $ ) (c) $ ) Income taxes — — — (d) Discontinued operations, net — — — ) ) Net income (loss) attributable to common stock $ ) $ $ $ ) $ ) Nine months ended September 30, 2014 Net sales $ $ $ $ ) $ Pre-tax operating profit (loss) $ $ $ $ ) (c) $ Income taxes — — — ) (d) ) Discontinued operations, net — — — Net income attributable to noncontrolling interest — — ) — ) Net income (loss) attributable to common stock $ $ $ $ ) $ (a) The three months ended September 30, 2015 includes pre-tax impairment charges of $3.1 billion. In September 2015, Occidental entered into a sales agreement to sell its Williston operations in North Dakota, and as such an impairment charge of $756 million was recorded to write down the net book value of the assets and liabilities held for sale to the sales price. Due to the significant decline in oil and gas futures prices, Occidental also recorded impairment charges on proved and unproved properties related to Occidental’s domestic gas operations of $924 million, Iraq operations of $760 million and Libya operations of $676 million. The nine months ended September 30, 2015 also reflected first quarter impairment charges of $195 million for Occidental’s South Texas Eagle Ford non-operated properties and $41 million to write-off the remaining investment in Yemen due to the collapse of the country’s government. (b) Includes gain on the sale of an idled chemical site for $98 million. (c) Includes unallocated net interest expense, administration expense, environmental remediation and other pre-tax items. (d) Includes all foreign and domestic income taxes from continuing operations. |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2015 | |
Earnings Per Share | |
Calculation of basic and diluted EPS | Three months ended September 30 Nine months ended September 30 2015 2014 2015 2014 Basic EPS Income (loss) from continuing operations $ ) $ $ ) $ Less: Income from continuing operations attributable to noncontrolling interest — ) — ) Income (loss) from continuing operations attributable to common stock ) ) Discontinued operations, net ) ) Net income (loss) ) ) Less: Net income allocated to participating securities — ) — ) Net income (loss), net of participating securities ) ) Weighted average number of basic shares Basic EPS $ ) $ $ ) $ Diluted EPS Net income (loss), net of participating securities $ ) $ $ ) $ Weighted average number of basic shares Dilutive effect of potentially dilutive securities — — Total diluted weighted average common shares Diluted EPS $ ) $ $ ) $ |
Asset Acquisitions, Dispositi28
Asset Acquisitions, Dispositions and Other (Details) - USD ($) $ in Millions | 1 Months Ended | 9 Months Ended |
Jun. 30, 2015 | Sep. 30, 2015 | |
Debt instrument | ||
Net proceeds from issuance of long-term debt | $ 1,478 | |
Senior unsecured notes | ||
Debt instrument | ||
Debt instrument issued | $ 1,500 | |
Net proceeds from issuance of long-term debt | $ 1,480 | |
3.50% senior unsecured notes due 2025 | ||
Debt instrument | ||
Debt instrument interest rate stated percentage | 3.50% | |
Debt instrument issued | $ 750 | |
4.625% senior unsecured notes due 2045 | ||
Debt instrument | ||
Debt instrument interest rate stated percentage | 4.625% | |
Debt instrument issued | $ 750 |
Asset Acquisitions, Dispositi29
Asset Acquisitions, Dispositions and Other (Detail 1) - Spin-off California Resources Corp - USD ($) shares in Millions, $ in Millions | Nov. 30, 2014 | Sep. 30, 2015 |
Acquisitions, dispositions and other transactions | ||
Percentage of common stock distributed | 81.30% | |
Distribution of restricted cash to pay obligations of spin-off agreements | $ 4,950 | |
Distribution of cash to pay obligations of spin-off agreements | $ 1,150 | |
Shares owned by Occidental | 71.5 | |
Period Following Spin-off within which cash will be distributed to satisfy spin off obligations | P18M | |
Remaining balance of cash distribution included in restricted cash on balance sheet | $ 1,800 |
Asset Acquisitions, Dispositi30
Asset Acquisitions, Dispositions and Other (Detail 2) - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | |||
Oct. 31, 2015 | Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Acquisitions, dispositions and other transactions | ||||||
Impairment charges | $ 3,100 | |||||
Sales and other operating revenues and income from discontinued operations related to California Resources Company | ||||||
Income from discontinued operations | $ (3) | $ 213 | $ (10) | $ 741 | ||
Subsequent event | Westwood Building | ||||||
Acquisitions, dispositions and other transactions | ||||||
Proceeds from sale of building | $ 65 | |||||
Williston Operations | ||||||
Acquisitions, dispositions and other transactions | ||||||
Impairment charges | $ 763 | |||||
California Resources Corporation | Spin-off California Resources Corp | ||||||
Sales and other operating revenues and income from discontinued operations related to California Resources Company | ||||||
Sales and other operating revenue from discontinued operations | 1,092 | 3,353 | ||||
Income from discontinued operations before-tax | 334 | 1,146 | ||||
Income tax expense | (118) | (404) | ||||
Income from discontinued operations | $ 216 | $ 742 |
Supplemental Cash Flow Inform31
Supplemental Cash Flow Information (Details) - USD ($) $ in Billions | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2014 | |
Supplemental Cash Flow Information | ||
United States federal, state and foreign income taxes paid for continuing operations | $ 0.8 | $ 2.6 |
Interest Paid | $ 0.2 | $ 0.2 |
Inventories (Details)
Inventories (Details) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Inventories | ||
Raw materials | $ 69 | $ 71 |
Materials and supplies | 601 | 585 |
Finished goods | 541 | 485 |
Inventories, Gross | 1,211 | 1,141 |
Revaluation to LIFO | (89) | (89) |
Total | $ 1,122 | $ 1,052 |
Environmental Liabilities and33
Environmental Liabilities and Expenditures (Details) $ in Millions | 9 Months Ended |
Sep. 30, 2015USD ($)site | |
Environmental Liabilities and Expenditures | |
Environmental remediation reserves, current, included in accrued liabilities | $ 79 |
Environmental remediation reserves, noncurrent, included in deferred credits and other liabilities - other | $ 236 |
Environmental remediation reserves | |
Number of Sites | site | 148 |
Reserve Balance | $ 315 |
Environmental reserves, exceeding $ ten million, threshold value | $ 10 |
Environmental reserves, range between zero to $ one million site category, number of sites | site | 104 |
Minimum period of expending second half of environmental reserves | 10 years |
Low end of range | |
Environmental remediation reserves | |
Environmental reserves, exceeding $ ten million, number of sites | site | 10 |
Environmental reserves, range between zero to $ one million site category | $ 1 |
Period of expending first half of environmental reserves | 3 years |
High end of range | |
Environmental remediation reserves | |
Period of expending first half of environmental reserves | 4 years |
Environmental remediation additional loss range | $ 395 |
NPL sites | |
Environmental remediation reserves | |
Number of Sites | site | 33 |
Reserve Balance | $ 21 |
Third-party sites | |
Environmental remediation reserves | |
Number of Sites | site | 66 |
Reserve Balance | $ 101 |
Occidental-operated sites | |
Environmental remediation reserves | |
Number of Sites | site | 18 |
Reserve Balance | $ 102 |
Closed or non-operated Occidental sites | |
Environmental remediation reserves | |
Number of Sites | site | 31 |
Reserve Balance | $ 91 |
Retirement and Postretirement34
Retirement and Postretirement Benefit Plans (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Defined benefit pension plans | ||||
Postretirement and Other Benefit Plans Disclosure | ||||
Employer contributions | $ 2 | $ 1 | $ 7 | $ 4 |
Pension Benefit | ||||
Net periodic benefit costs: | ||||
Service cost | 2 | 3 | 6 | 9 |
Interest cost | 5 | 6 | 15 | 18 |
Expected return on plan assets | (7) | (8) | (21) | (25) |
Recognized actuarial loss | 3 | 1 | 7 | 4 |
Net periodic benefit cost | 3 | 2 | 7 | 6 |
Postretirement Benefit | ||||
Net periodic benefit costs: | ||||
Service cost | 7 | 7 | 21 | 19 |
Interest cost | 10 | 10 | 30 | 34 |
Recognized actuarial loss | 6 | 4 | 20 | 16 |
Net periodic benefit cost | $ 23 | $ 21 | $ 71 | $ 69 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Dec. 31, 2014 | |
Fair value of assets and liabilities measured on recurring basis | |||
Unrealized losses recorded in accumulated other comprehensive income | $ 246 | $ 208 | |
Fair Value - Other Financial Instruments | |||
Debt carrying value | 8,300 | 8,300 | |
Carrying value of debt, net of unamortized discount | 8,300 | 8,300 | $ 6,800 |
Impairment of Oil and Gas Properties | 3,100 | ||
Impaired proved oil and gas assets - domestic | |||
Fair Value - Other Financial Instruments | |||
Net book value of impaired assets | 2,654 | 2,654 | |
Impairment of Oil and Gas Properties | 1,583 | ||
Impaired proved oil and gas assets - international | |||
Fair Value - Other Financial Instruments | |||
Net book value of impaired assets | $ 1,767 | 1,767 | |
Impairment of Oil and Gas Properties | $ 1,301 | ||
Level 1 | |||
Fair value of assets and liabilities measured on recurring basis | |||
Investment recorded as available for sale asset, shares owned | 71.5 | 71.5 | |
Assets: | |||
Available for sale investment | $ 186 | $ 186 | 394 |
Level 2 | |||
Fair Value - Other Financial Instruments | |||
Debt estimated fair value | 68 | 68 | |
Level 3 | Impaired proved oil and gas assets - domestic | |||
Fair Value - Other Financial Instruments | |||
Fair value | 1,071 | 1,071 | |
Level 3 | Impaired proved oil and gas assets - international | |||
Fair Value - Other Financial Instruments | |||
Fair value | 466 | 466 | |
Total Fair Value | |||
Assets: | |||
Available for sale investment | 186 | 186 | 394 |
Fair Value - Other Financial Instruments | |||
Debt estimated fair value | 8,700 | 8,700 | 7,000 |
Recurring | Level 1 | |||
Assets: | |||
Commodity derivatives | 235 | 235 | 712 |
Liabilities: | |||
Commodity derivatives | 251 | 251 | 750 |
Recurring | Level 2 | |||
Assets: | |||
Commodity derivatives | 51 | 51 | 127 |
Liabilities: | |||
Commodity derivatives | 293 | 293 | 246 |
Recurring | Netting and Collateral | |||
Assets: | |||
Commodity derivatives | (223) | (223) | (742) |
Liabilities: | |||
Commodity derivatives | (240) | (240) | (756) |
Recurring | Total Fair Value | |||
Assets: | |||
Commodity derivatives | 63 | 63 | 97 |
Liabilities: | |||
Commodity derivatives | $ 304 | $ 304 | $ 240 |
Derivatives (Details)
Derivatives (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2015 | Sep. 30, 2015 | Sep. 30, 2014 | |
After-tax Derivative Activity recorded in AOCI | |||
Unrealized (losses) gains recognized in AOCI | $ 2 | $ 2 | $ (5) |
Losses (gains) reclassified to income | $ 1 | $ 1 | $ 8 |
Derivatives (Details 1)
Derivatives (Details 1) item in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($)item | Sep. 30, 2015USD ($)item | Sep. 30, 2014USD ($)item | |
Net sales | ||||
Outstanding commodity derivatives contracts not designated as hedging instruments | ||||
Net gains from derivatives not designated as hedging instruments recognized in net sales (in dollars) | $ | $ 12 | |||
Net losses from derivatives not designated as hedging instruments recognized in net sales (in dollars) | $ | $ 119 | $ 72 | $ 163 | |
CO2 (in cubic feet) | ||||
Outstanding commodity derivatives contracts not designated as hedging instruments | ||||
Net Outstanding Position Long/(Short) | 607,000 | 621,000 | 607,000 | 621,000 |
Oil (in barrels) | ||||
Outstanding commodity derivatives contracts not designated as hedging instruments | ||||
Net Outstanding Position Long/(Short) | 81 | (9) | 81 | (9) |
Natural Gas (in cubic feet) | ||||
Outstanding commodity derivatives contracts not designated as hedging instruments | ||||
Net Outstanding Position Long/(Short) | (54,000) | (32,000) | (54,000) | (32,000) |
Derivatives (Details 2)
Derivatives (Details 2) - USD ($) $ in Millions | Sep. 30, 2015 | Dec. 31, 2014 |
Gross and net fair values of outstanding derivatives (in millions) | ||
Collateral received netted against derivative assets | $ 1 | $ 0 |
Collateral paid netted against derivative liabilities | 17 | 8 |
Collateral deposited with clearinghouses and brokers | 35 | 44 |
Credit risk contingent features | ||
Net derivative liabilities with credit-risk-contingent features | 0 | 4 |
Amount of collateral posted | 0 | 3 |
Cash-flow hedges | Other current assets | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Total net fair value, asset | 3 | |
Cash-flow hedges | Other assets | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Total net fair value, asset | 3 | |
Not designated as hedging instruments | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative asset, gross | 756 | |
Less: counterparty netting and cash collateral, asset | (223) | (742) |
Less: counterparty netting and cash collateral, liability | (240) | |
Total net fair value, asset | 63 | 97 |
Total net fair value, liability | 304 | 240 |
Not designated as hedging instruments | Other current assets | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative asset, gross | 274 | 828 |
Not designated as hedging instruments | Long-term receivables and other assets, net | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative asset, gross | 9 | 11 |
Not designated as hedging instruments | Accrued liabilities | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative liability, gross | 309 | 886 |
Not designated as hedging instruments | Other Liabilities | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative liability, gross | 996 | |
Not designated as hedging instruments | Deferred credits and other liabilities | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative liability, gross | 235 | 110 |
Not designated as hedging instruments | Other assets | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative asset, gross | 839 | |
Total net fair value, asset | 283 | |
Total net fair value, liability | 544 | |
Not designated as hedging instruments | Commodity Contracts | ||
Gross and net fair values of outstanding derivatives (in millions) | ||
Commodity contract derivative asset, gross | 286 | 839 |
Commodity contract derivative liability, gross | $ 544 | $ 996 |
Derivatives (Details 3)
Derivatives (Details 3) ft³ in Billions | Sep. 30, 2015ft³ |
Derivatives | |
Natural gas held in storage (in cubic feet) | 13 |
Forecast sale of natural gas from storage designated as cash-flow hedges (in cubic feet) | 6 |
Industry Segments (Details)
Industry Segments (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2014USD ($) | Sep. 30, 2015USD ($)segment | Sep. 30, 2014USD ($) | |
Industry Segments | |||||
Number of operating segments | segment | 3 | ||||
Segment Information | |||||
Net sales | $ 3,116 | $ 4,904 | $ 9,674 | $ 15,005 | |
Pretax operating profit (loss) | (3,051) | 1,697 | (2,781) | 5,598 | |
Income taxes | 445 | (699) | 140 | (2,302) | |
Discontinued operations, net | (3) | 213 | (10) | 741 | |
Less: Net income attributable to noncontrolling interest | (3) | (8) | |||
Net income (loss) attributable to common stock | (2,609) | 1,208 | (2,651) | 4,029 | |
Impairment charges | 3,100 | ||||
Williston Operations | |||||
Segment Information | |||||
Impairment charges | $ 763 | ||||
Oil and Gas | |||||
Segment Information | |||||
Net sales | 6,405 | 10,891 | |||
Pretax operating profit (loss) | (3,039) | 5,054 | |||
Net income (loss) attributable to common stock | (3,039) | 5,054 | |||
Oil and Gas | Williston Operations | |||||
Segment Information | |||||
Impairment charges | $ 756 | ||||
Oil and Gas | Domestic gas operations | |||||
Segment Information | |||||
Impairment charges | 924 | ||||
Oil and Gas | Libya operations | |||||
Segment Information | |||||
Impairment charges | 676 | ||||
Oil and Gas | South Texas Eagle Ford non-operated properties | |||||
Segment Information | |||||
Impairment charges | 195 | ||||
Oil and Gas | Yemen | |||||
Segment Information | |||||
Impairment charges | 41 | ||||
Oil and Gas | Iraq Operations | |||||
Segment Information | |||||
Impairment charges | 760 | ||||
Chemical | |||||
Segment Information | |||||
Net sales | 3,038 | 3,694 | |||
Pretax operating profit (loss) | 547 | 409 | |||
Net income (loss) attributable to common stock | 547 | 409 | |||
Gain on sale of idled site | 98 | ||||
Midstream and Marketing | |||||
Segment Information | |||||
Net sales | 722 | 1,041 | |||
Pretax operating profit (loss) | 96 | 483 | |||
Less: Net income attributable to noncontrolling interest | (8) | ||||
Net income (loss) attributable to common stock | 96 | 475 | |||
Operating segments | Oil and Gas | |||||
Segment Information | |||||
Net sales | 2,054 | 3,586 | |||
Pretax operating profit (loss) | (3,128) | 1,568 | |||
Net income (loss) attributable to common stock | (3,128) | 1,568 | |||
Operating segments | Chemical | |||||
Segment Information | |||||
Net sales | 1,008 | 1,232 | |||
Pretax operating profit (loss) | 272 | 140 | |||
Net income (loss) attributable to common stock | 272 | 140 | |||
Operating segments | Midstream and Marketing | |||||
Segment Information | |||||
Net sales | 231 | 261 | |||
Pretax operating profit (loss) | 24 | 108 | |||
Less: Net income attributable to noncontrolling interest | (3) | ||||
Net income (loss) attributable to common stock | 24 | 105 | |||
Corporate and Eliminations | |||||
Segment Information | |||||
Net sales | (177) | (175) | (491) | (621) | |
Pretax operating profit (loss) | (219) | (119) | (385) | (348) | |
Income taxes | 445 | (699) | 140 | (2,302) | |
Discontinued operations, net | (3) | 213 | (10) | 741 | |
Net income (loss) attributable to common stock | $ 223 | $ (605) | $ (255) | $ (1,909) |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2015 | Sep. 30, 2014 | Sep. 30, 2015 | Sep. 30, 2014 | |
Basic EPS | ||||
Income (loss) from continuing operations | $ (2,606) | $ 998 | $ (2,641) | $ 3,296 |
Less: Income from continuing operations attributable to noncontrolling interest | (3) | (8) | ||
Income from continuing operations attributable to common stock | (2,606) | 995 | (2,641) | 3,288 |
Discontinued operations, net | (3) | 213 | (10) | 741 |
NET INCOME (LOSS) ATTRIBUTABLE TO COMMON STOCK | (2,609) | 1,208 | (2,651) | 4,029 |
Less: Net income allocated to participating securities | (3) | (8) | ||
Net income attributable to common stock, net of participating securities | $ (2,609) | $ 1,205 | $ (2,651) | $ 4,021 |
Weighted average number of basic shares | 763.3 | 777.4 | 766.4 | 783.7 |
Basic EPS (in dollars per share) | $ (3.42) | $ 1.55 | $ (3.46) | $ 5.13 |
Diluted EPS | ||||
Net income attributable to common stock, net of participating securities | $ (2,609) | $ 1,205 | $ (2,651) | $ 4,021 |
Weighted average number of basic shares | 763.3 | 777.4 | 766.4 | 783.7 |
Dilutive effect of potentially dilutive securities (in shares) | 0.3 | 0.4 | ||
Total diluted weighted average common shares | 763.3 | 777.7 | 766.4 | 784.1 |
Diluted EPS (in dollars per share) | $ (3.42) | $ 1.55 | $ (3.46) | $ 5.13 |