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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 26, 1998
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 1-9210 95-4035997
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10889 Wilshire Boulevard, Los Angeles, California 90024
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code:
(310) 208-8800
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Item 5. Other Events
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Occidental Petroleum Corporation reported on
January 26, 1998 a net loss of $884 million ($2.65 per
share) for the fourth quarter of 1997, compared with net
income of $159 million ($.41 per share) for the fourth
quarter of 1996. Fourth quarter 1997 earnings before special
items were $143 million. In December 1997, Occidental
announced that it had signed a definitive agreement to sell
its MidCon natural gas transmission and marketing subsidiary
to K N Energy, Inc. As a result of this transaction,
Occidental classified MidCon as a discontinued operation and
recorded a net charge of $750 million in the fourth quarter.
Additional special items which Occidental recorded were net
charges of $277 million for the write-down of various
non-strategic and impaired assets, including assets expected
to be sold and related costs, and additional environmental
and other reserves. Sales from continuing operations were
$1.9 billion for the fourth quarter of 1997, compared with
$2.0 billion for the fourth quarter of 1996.
Oil and gas divisional earnings before special items
were $160 million for the fourth quarter of 1997, compared
with $155 million for the fourth quarter of 1996. Results
for the fourth quarter of 1997 were a loss of $96 million
after including $256 million in pretax charges for the
write-down of various non-strategic and impaired assets,
including assets expected to be sold and related costs,
and additional environmental and other reserves.
Chemical divisional earnings before special items were
$119 million for the fourth quarter of 1997, compared with
$110 million for the fourth quarter of 1996. The 1997
fourth quarter results were a loss of $28 million, after
$147 million in pretax charges for additional environmental
matters and the write-down of various idled and impaired
assets. The improvement in 1997 earnings before special
items resulted primarily from improved margins in
petrochemicals and chlorine, partially offset by lower
margins in caustic soda.
Unallocated other charges were $53 million for the
fourth quarter of 1997, compared with $30 million for the
fourth quarter of 1996. The net increase in charges
resulted mainly from lower equity earnings from
unconsolidated subsidiaries, including currency devaluations
related to a Thailand chemical joint venture and the write-
down related to a joint venture plant operation in Brazil.
Included in 1996 were costs incurred for the establishment
of the MidCon ESOP.
For the total year 1997, Occidental's net loss totaled
$390 million ($1.43 per share), compared with net income of
$668 million ($1.77 per share) for 1996. Total year 1997
income before special items was $691 million, compared with
1996 income before special items of $643 million. Sales
from continuing operations were $8.0 billion for both 1997
and 1996.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
Fourth Quarter Twelve Months
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Periods Ended December 31 1997 1996(a) 1997 1996(a)
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DIVISIONAL NET SALES
Oil and gas $ 887 $ 899 $ 3,667 $ 3,680
Chemical 1,047 1,097 4,349 4,307
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$ 1,934 $ 1,996 $ 8,016 $ 7,987
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DIVISIONAL EARNINGS
Oil and gas $ (96) $ 155 $ 401 $ 480
Chemical (28) 110 471 668
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(124) 265 872 1,148
Unallocated corporate items
Interest expense, net (105) (102) (407) (454)
Income taxes (b) 104 (18) (60) (109)
Other (53) (30) (188) (71)
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Income from continuing operations (178) 115 217 514
Discontinued operations, net (706) 44 (607) 184
Extraordinary gain(loss), net - - - (30)
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NET INCOME(LOSS) (884) 159 (390) 668
Preferred dividends (21) (24) (88) (93)
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Earnings(loss) applicable to common
stock $ (905) $ 135 $ (478) $ 575
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BASIC EARNINGS PER COMMON SHARE
Income from continuing operations $ (.58) $ .28 $ .39 $ 1.30
Discontinued operations, net (2.07) .13 (1.82) .56
Extraordinary gain(loss), net - - - (.09)
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Basic earnings(loss) per common
share $ (2.65) $ .41 $ (1.43) $ 1.77
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DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations $ (.58) $ .28 $ .39 $ 1.29
Discontinued operations, net (2.07) .13 (1.82) .52
Extraordinary gain(loss), net - - - (.08)
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Diluted earnings(loss) per
common share $ (2.65) $ .41 $ (1.43) $ 1.73
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Average common shares outstanding 341.9 329.1 334.3 323.8
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(a) The 1996 results have been restated to reflect MidCon as a discontinued
operation.
(b) The twelve months of 1996 include a $100 million credit for reduction in
federal income tax liabilities no longer required. Includes an offset
for charges and credits in lieu of U.S. federal income taxes allocated to
the divisions. Divisional earnings in the fourth quarter of 1997 have
benefited from credits allocated by $3 million and $6 million at oil and
gas and chemical, respectively. Divisional earnings in the fourth quarter
of 1996 have benefited from credits allocated by $4 million and $6 million
at oil and gas and chemical, respectively.
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SUMMARY OF OPERATING STATISTICS
Fourth Quarter Twelve Months
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Periods Ended December 31 1997 1996 1997 1996
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NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and condensate
(thousands of barrels) 55 60 57 57
Natural gas liquids
(thousands of barrels) 12 14 10 13
Natural gas
(millions of cubic feet) 574 589 596 601
Other Western Hemisphere
Crude oil and condensate
(thousands of barrels) 104 123 113 128
Eastern Hemisphere
Crude oil and condensate
(thousands of barrels) 114 99 106 101
Natural gas
(millions of cubic feet) 107 112 110 115
NATURAL GAS TRANSMISSION DELIVERIES
Sales (billions of cubic feet) 261 204 836 699
Transportation
(billions of cubic feet) 380 418 1,397 1,555
CAPITAL EXPENDITURES (millions) $ 541 $ 360 $1,549 $1,038
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DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 224 $ 194 $ 822 $ 761
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act
of 1934, the Registrant has duly caused this report to be
signed on its behalf by the undersigned hereunto duly
authorized.
OCCIDENTAL PETROLEUM CORPORATION
(Registrant)
DATE: January 27, 1998 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice
President and Controller
(Chief Accounting and Duly
Authorized Officer)
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