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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM 8-K
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CURRENT REPORT
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PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) APRIL 20, 1998
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OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
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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
Occidental Petroleum Corporation reported on April 20, 1998 net income of
$177 million ($.50 per share) for the first quarter of 1998, compared with net
income of $179 million ($.48 per share) for the first quarter of 1997. The first
quarter of 1998 included an after-tax benefit of $38 million ($.11 per share),
reported as discontinued operations, reflecting the closing of the sale of the
natural gas transmission and marketing subsidiary, MidCon. Earnings before
special items were $89 million for the first quarter of 1998, compared with $127
million for the same period in 1997.
The first quarter 1998 reported earnings of $177 million included pretax
net gains of $105 million resulting from the sale of certain nonstrategic oil
and gas properties included in the previously announced $4.7 billion asset
redeployment program. Sales were $1.7 billion for the first quarter of 1998,
compared with $1.9 billion for the same period in 1997.
Oil and gas divisional earnings before special items were $127 million for
the first quarter of 1998, compared with $247 million for the first quarter of
1997. Results for the first quarter of 1998 were $232 million after including
pretax gains of $105 million related to the sale of nonstrategic assets located
in Venezuela and the United States. The decrease in earnings before special
items reflects primarily the negative impact of lower worldwide crude oil and
natural gas prices, partially offset by increased crude oil production in the
United States and Eastern Hemisphere.
Chemical divisional earnings for the first quarter of 1998 were $158
million, compared with $92 million for 1997. The improvement in 1998 earnings
resulted primarily from lower feedstock prices and higher caustic soda margins,
partially offset by lower ethylene, propylene and commodity resin prices.
Interest expense in the first quarter of 1998 was $112 million, compared
with $101 million for the first quarter of 1997. The increase in interest
expense during the first quarter is primarily attributable to temporarily higher
debt levels to fund a portion of the Elk Hills acquisition in early February
1998.
In June 1997, the Financial Accounting Standards Board issued SFAS No.
131 -- "Disclosures about Segments of an Enterprise and Related Information."
Occidental has elected to adopt this statement early and will now report equity
earnings or losses from unconsolidated subsidiaries in the respective business
segment rather than, as previously reported, as a Corporate item. Accordingly,
1997 results have been restated.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
First Quarter
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Periods Ended March 31 1998 1997(b)
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DIVISIONAL NET SALES
Oil and gas $ 740 $ 842
Chemical 960 1,075
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$ 1,700 $ 1,917
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DIVISIONAL EARNINGS
Oil and gas $ 232 $ 247
Chemical 158 92
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390 339
UNALLOCATED CORPORATE ITEMS
Interest expense, net (112) (101)
Income taxes(a) (126) (85)
Other (13) (26)
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INCOME FROM CONTINUING OPERATIONS 139 127
Discontinued operations, net 38 52
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NET INCOME 177 179
Preferred dividends (4)(c) (23)
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EARNINGS APPLICABLE TO COMMON STOCK $ 173 $ 156
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BASIC EARNINGS PER COMMON SHARE
Income from continuing operations $ .39 $ .32
Discontinued operations, net .11 .16
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BASIC EARNINGS(LOSS) PER COMMON SHARE $ .50(c) $ .48
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DILUTED EARNINGS PER COMMON SHARE
Income from continuing operations $ .38 $ .31
Discontinued operations, net .11 .15
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DILUTED EARNINGS(LOSS) PER COMMON SHARE $ .49(c) $ .46
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AVERAGE COMMON SHARES OUTSTANDING 344.5(c) 329.7
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(a) Includes an adjustment to corporate taxes, as quarterly consolidated taxes
are computed in accordance with APB Opinion No. 28 and hence are based on
projections of total-year income and taxes. Also, includes an offset for
credits in lieu of U.S. federal income taxes allocated to the divisions.
Divisional earnings have benefited from credits allocated by $3 million and
$7 million at oil and gas and chemical, respectively, in the first quarter
of 1998 and by $4 million and $6 million at oil and gas and chemical,
respectively, in the first quarter of 1997.
(b) 1997 results have been restated to reflect the adoption of SFAS 131,
"Disclosures about Segments of an Enterprise and Related Information" and to
reflect MidCon as a discontinued operation.
(c) The earnings per share calculation includes the effect of 16.6 million
shares of preferred stock being converted into 37.2 million shares of common
stock in the first quarter.
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SUMMARY OF OPERATING STATISTICS
First Quarter
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Periods Ended March 31 1998 1997
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NET OIL, GAS AND LIQUIDS PRODUCTION PER DAY
United States
Crude oil and condensate (thousands of barrels) 81 58
Natural gas liquids (thousands of barrels) 6 12
Natural gas (millions of cubic feet) 628 593
Other Western Hemisphere
Crude oil and condensate (thousands of barrels) 93 122
Eastern Hemisphere
Crude oil and condensate (thousands of barrels) 131 94
Natural gas (millions of cubic feet) 138 126
CAPITAL EXPENDITURES (millions) $ 280 $ 262
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DEPRECIATION, DEPLETION AND AMORTIZATION OF
ASSETS (millions) $ 230 $ 204
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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: April 21, 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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