EXHIBIT 99.1
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[OXY LOGO] NEWS RELEASE OCCIDENTAL PETROLEUM CORPORATION
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10889 Wilshire Boulevard, Los Angeles, California 90024 (310) 208-8800
For Immediate Release: January 22, 2004
OCCIDENTAL PETROLEUM ANNOUNCES FOURTH QUARTER 2003 RESULTS
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LOS ANGELES -- Occidental Petroleum Corporation (NYSE:OXY) announced net
income for the fourth quarter 2003 of $382 million ($0.99 per share), compared
with $322 million ($0.85 per share) for the fourth quarter 2002.
In announcing the results, Dr. Ray R. Irani, chairman and chief executive
officer, said, "Continued strong oil and gas prices combined with record oil and
gas production of 547,000 barrels of oil equivalent per day for the year
contributed to Occidental's second best year ever, with annual net income of
$1.527 billion. Our core earnings for the year of $1.635 billion were the
highest in the Company's history. We ended the year with our debt to
capitalization ratio at 37 percent, the lowest level in more than two decades."
OIL AND GAS
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Oil and gas segment earnings were $640 million for the fourth quarter 2003,
compared with $490 million for the fourth quarter 2002. The improvement in the
fourth quarter 2003 earnings reflected higher worldwide crude oil and natural
gas prices, increased crude oil sales volumes, lower exploration expense and a
$38 million refund of property taxes, partially offset by higher DD&A rates and
operating costs. The increased crude oil production results largely from higher
Ecuador and Horn Mountain production.
CHEMICALS
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Chemical segment earnings were $71 million for the fourth quarter 2003,
compared with $58 million for the fourth quarter 2002. The improvement in the
fourth quarter 2003 core earnings
reflected higher sales prices in all major products (PVC, EDC, chlorine and
caustic); partially offset by higher energy and ethylene costs.
TWELVE-MONTH RESULTS
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For the twelve months of 2003, net income was $1.527 billion ($3.98 per
share), compared with $989 million ($2.63 per share) for the twelve months of
2002.
Core earnings were $1.635 billion for 2003 compared with $999 million for
2002. See the attached schedule for a reconciliation of net income to core
earnings for the fourth quarter and twelve months.
For details of items affecting the comparability of core earnings between
periods in 2003 and 2002, see the attached schedule.
Contacts: Lawrence P. Meriage (media)
310-443-6562
Kenneth J. Huffman (investors)
212-603-8183
For further analysis of Occidental's quarterly
performance, please visit the website: WWW.OXY.COM
Statements in this presentation that contain words such as "will" or "expect",
or otherwise relate to the future, are forward-looking and involve risks and
uncertainties that could significantly affect expected results. Factors that
could cause results to differ materially include, but are not limited to: global
commodity pricing fluctuations, and supply/demand consideration for oil, gas and
chemicals; higher-than-expected costs; and not successfully completing (or any
material delay in) any expansion, capital expenditure, acquisition, or
disposition. Occidental disclaims any obligation to update any forward-looking
statements.
2
SUMMARY OF SEGMENT NET SALES AND EARNINGS
Fourth Quarter Twelve Months
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($ millions) 2003 2002 2003 2002
================================= ======= ======= ======= =======
SEGMENT NET SALES
Oil and gas $ 1,530 $ 1,287 $ 6,003 $ 4,634
Chemical 810 698 3,178 2,704
Other 30 -- 145 --
------- ------- ------- -------
Net sales $ 2,370 $ 1,985 $ 9,326 $ 7,338
================================= ======= ======= ======= =======
SEGMENT EARNINGS
Oil and gas $ 640 $ 490 $ 2,664 $ 1,707
Chemical 71 58 210 275
------- ------- ------- -------
711 548 2,874 1,982
UNALLOCATED CORPORATE ITEMS
Interest expense, net (a)
Debt, net (53) (58) (289) (253)
Trust preferred distributions
& other (10) (12) (44) (47)
Income taxes (b) (157) (114) (662) (364)
Other (c) (109) (41) (284) (155)
------- ------- ------- -------
INCOME FROM CONTINUING OPERATIONS 382 323 1,595 1,163
Discontinued operations, net -- (1) -- (79)
Cumulative effect of changes in
accounting principles, net (d) -- -- (68) (95)
------- ------- ------- -------
NET INCOME $ 382 $ 322 $ 1,527 $ 989
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BASIC EARNINGS PER COMMON SHARE
Income from
continuing operations $ 0.99 $ 0.85 $ 4.16 $ 3.09
Discontinued operations, net -- -- -- (0.21)
Cumulative effect of changes in
accounting principles, net -- -- (0.18) (0.25)
------- ------- ------- -------
$ 0.99 $ 0.85 $ 3.98 $ 2.63
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DILUTED EARNINGS PER COMMON SHARE
Income from
continuing operations $ 0.97 $ 0.84 $ 4.11 $ 3.07
Discontinued operations, net -- -- -- (0.21)
Cumulative effect of changes in
accounting principles, net -- -- (0.18) (0.25)
------- ------- ------- -------
$ 0.97 $ 0.84 $ 3.93 $ 2.61
======= ======= ======= =======
AVERAGE BASIC COMMON SHARES
OUTSTANDING 387.7 377.6 383.9 376.2
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See footnotes on following page.
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(a) The twelve-months 2003 includes a $61 million interest charge to repay a
$450-million 6.4-percent senior-notes issue that had ten years of remaining
life, but was subject to remarketing on April 1, 2003. The twelve months
2002 includes $22 million of interest income on notes receivable from
Altura partners. The partnership exercised an option in May 2002 to redeem
the sellers' remaining partnership interests in exchange for the
outstanding balance on the notes.
(b) Excludes U.S. federal income tax charges and credits allocated to the
segments and foreign taxes. Oil and gas segment earnings for the
twelve-months 2003 and 2002 include charges of $6 million and $1 million,
respectively. Chemical segment earnings include credits of $403 million for
the twelve months 2002.
(c) The twelve-months 2002 includes $20 million of preferred distributions to
the Occidental Permian partners. This is essentially offset by the interest
income discussed in (a) above. The partnership exercised an option in May
2002 to redeem the sellers' remaining partnership interests in exchange for
the outstanding balance on the notes. The twelve-months 2003 includes $58
million of equity losses from investments in unconsolidated subsidiaries,
compared with a $25 million loss for the same period in 2002. The
twelve-months 2003 also includes a $63 million environmental remediation
expense, compared with a $23 million expense for the twelve-months 2002.
(d) Effective January 1, 2003, Occidental implemented SFAS No. 143 -
"Accounting For Asset Retirement Obligations." Adoption of this new
accounting standard resulted in a cumulative after-tax reduction in net
income of $50 million. Also effective January 1, 2003, Occidental
implemented the rescission of EITF 98-10, which precludes mark-to-market
accounting for all energy-trading contracts that are not derivatives and
fair value accounting for inventories purchased from third parties.
Adoption of this accounting change resulted in a cumulative after-tax
reduction in net income of $18 million. Effective January 1, 2002,
Occidental implemented SFAS No. 142 - "Goodwill and Other Intangible
Assets." Adoption of this new accounting standard resulted in a cumulative
after-tax reduction in net income of $95 million.
4
SUMMARY OF OPERATING STATISTICS
Fourth Quarter Twelve Months
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2003 2002 2003 2002
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NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and liquids (MBBL)
California 82 84 81 86
Permian 152 142 150 142
Horn Mountain 25 2 21 1
Hugoton 4 4 4 3
------- ------- ------- -------
Total 263 232 256 232
Natural Gas (MMCF)
California 246 266 252 286
Hugoton 130 139 138 148
Permian 133 133 129 130
Horn Mountain 16 -- 13 --
------- ------- ------- -------
Total 525 538 532 564
Latin America
Crude oil (MBBL)
Colombia 44 47 37 40
Ecuador 39 13 25 13
------- ------- ------- -------
Total 83 60 62 53
Middle East
Crude oil (MBBL)
Oman 12 13 12 13
Qatar 40 37 45 42
Yemen 33 37 35 37
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Total 85 87 92 92
Other Eastern Hemisphere
Crude oil (MBBL)
Pakistan 9 12 9 10
Natural Gas (MMCF)
Pakistan 72 76 74 63
BARRELS OF OIL EQUIVALENT (MBOE)
Subtotal consolidated subsidiaries 540 493 520 492
Other Interests
Colombia-minority interest (7) (6) (5) (5)
Russia-Occidental net interest 30 29 30 27
Yemen-Occidental net interest 2 2 2 1
------- ------- ------- -------
TOTAL WORLDWIDE PRODUCTION 565 518 547 515
======= ======= ======= =======
CAPITAL EXPENDITURES (millions) $ 450 $ 396 $ 1,601 $ 1,236
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DEPRECIATION, DEPLETION
AND AMORTIZATION
OF ASSETS (millions) $ 311 $ 253 $ 1,177 $ 1,012
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SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS
Occidental's results of operations often include the effects of significant
transactions and events affecting earnings that vary widely and unpredictably in
nature, timing, and amount. Therefore, management uses a measure called "core
earnings", which excludes those items. This non-GAAP measure is not meant to
disassociate those items from management's performance, but rather is meant to
provide useful information to investors interested in comparing Occidental's
earnings performance between periods. Reported earnings are considered
representative of management's performance over the long term. Core earnings is
not considered to be an alternative to operating income in accordance with
generally accepted accounting principles.
The following table sets forth the core earnings and significant items affecting
earnings for each operating segment and corporate:
Fourth Quarter
($ millions, except --------------------------------------------
per-share amounts) 2003 EPS 2002 EPS
================================ ======== ======== ======== ========
TOTAL REPORTED EARNINGS $ 382 $ 0.99 $ 322 $ 0.85
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OIL AND GAS
Segment Earnings $ 640 $ 490
No significant items
affecting earnings -- --
-------- --------
Segment Core Earnings 640 490
-------- --------
CHEMICALS
Segment Earnings 71 58
No significant items
affecting earnings -- --
-------- --------
Segment Core Earnings 71 58
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CORPORATE
Results (329) (226)
Less:
Discontinued operations, net* -- (1)
-------- --------
TOTAL CORE EARNINGS $ 382 $ 0.99 $ 323 $ 0.86
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* These amounts are shown after tax.
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SIGNIFICANT TRANSACTIONS AND EVENTS AFFECTING EARNINGS (continued)
Twelve Months
($ millions, except --------------------------------------------
per-share amounts) 2003 EPS 2002 EPS
================================ ======== ======== ======== ========
TOTAL REPORTED EARNINGS $ 1,527 $ 3.98 $ 989 $ 2.63
======== ======== ======== ========
OIL AND GAS
Segment Earnings $ 2,664 $ 1,707
No significant items
affecting earnings -- --
-------- --------
Segment Core Earnings 2,664 1,707
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CHEMICALS
Segment Earnings 210 275
Less:
Sale of Equistar investment* -- 164
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Segment Core Earnings 210 111
-------- --------
CORPORATE
Results (1,347) (993)
Less:
Debt repayment charge (61) --
Tax effect of pre-tax adjustment 21 --
Discontinued operations, net* -- (79)
Changes in accounting
principles, net* (68) (95)
-------- --------
TOTAL CORE EARNINGS $ 1,635 $ 4.26 $ 999 $ 2.66
================================ ======== ======== ======== ========
* These amounts are shown after tax.
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ITEMS AFFECTING COMPARABILITY OF CORE EARNINGS BETWEEN PERIODS
Fourth Quarter Twelve Months
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($ millions) 2003 2002 2003 2002
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PRE-TAX
INCOME / (EXPENSE)
OIL AND GAS
Gain on sale of GOM assets (a) $ -- $ -- $ 14 $ 7
Property tax refund 38 -- 38 --
CHEMICALS
Asset idling and impairments -- -- (9) (37)
State tax reserves adjustment -- 7 -- 7
Equistar equity results -- -- -- (33)
Self insurance and litigation
adjustments -- 15 -- 15
Reorganizations/severance -- -- (15) (14)
CORPORATE
Gain on sale of stock investment -- 32 -- 32
Environmental remediation (50) (15) (63) (23)
Equity earnings (16) (22) (58) (25)
(a) Net of tax.
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