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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) OCTOBER 17, 1996
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
October 17, 1996, net income of $194 million ($.53 per
share) for the third quarter of 1996, compared with net
income of $139 million ($.36 per share) for the third
quarter of 1995. Included in the third quarter 1996 is a
$100 million benefit from a reduction in federal income tax
liabilities no longer required and a $105 million charge
for the write-down in Occidental's investment in an oil and
gas project in Russia. Sales were $2.8 billion for the
third quarter of 1996, compared with $2.6 billion for the
third quarter of 1995.
Oil and gas divisional earnings before special items
were $125 million for the third quarter of 1996, compared
with earnings of $46 million for the third quarter of 1995.
Earnings for the third quarter of 1996 were $20 million
after including the $105 million write-down in Occidental's
investment in an oil and gas project in Russia. The
increase in 1996 earnings resulted primarily from higher
prices for worldwide crude oil and domestic natural gas,
partially offset by higher exploration expense.
Natural gas transmission divisional earnings for the
third quarter of 1996 were $49 million, compared with $54
million for the third quarter of 1995. The decline in 1996
earnings resulted primarily from lower transport margins,
partially offset by cost savings related to the
reorganization announced late in 1995.
Chemical divisional earnings before special items for
the third quarter of 1996 were $190 million, compared with
earnings of $252 million for the third quarter of 1995. The
1996 third quarter results were $228 million, after
including a benefit of $40 million related to a favorable
litigation settlement and the related state tax effects.
The decline in 1996 earnings resulted primarily from
decreased profit margins in petrochemicals, PVC resins and
caustic soda, partially offset by improvements in profits
from specialty chemicals.
Interest expense in the third quarter of 1996 was $107
million, compared with $133 million for the third quarter of
1995. The decline in interest expense is primarily
attributable to lower average interest rates and lower
average debt levels resulting primarily from redemptions of
high-coupon debt.
For the first nine months of 1996, Occidental's net
income totaled $509 million or $1.37 per share, compared
with net income of $504 million or $1.37 per share for the
first nine months of 1995. The 1996 results included an
after-tax extraordinary loss of $30 million ($.09 per share)
for the early retirement of high-coupon debt. Sales were
$7.8 billion for the first nine months of 1996, compared
with $8.0 billion for the same period in 1995.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
Third Quarter Nine Months
---------------- ----------------
Periods Ended September 30 1996 1995 1996 1995
================================== ======= ======= ======= =======
DIVISIONAL NET SALES
Oil and gas $ 1,148 $ 779 $ 2,780 $ 2,240
Natural gas transmission 554 454 1,777 1,460
Chemical 1,084 1,325 3,210 4,253
Other - (1) (2) (3)
_______ _______ _______ _______
$ 2,786 $ 2,557 $ 7,765 $ 7,950
================================== ======= ======= ======= =======
DIVISIONAL EARNINGS
Oil and gas $ 20 $ 46 $ 325 $ 76
Natural gas transmission 49 54 221 191
Chemical 228 252 558 913
_______ _______ _______ _______
297 352 1,104 1,180
UNALLOCATED CORPORATE ITEMS
Interest expense, net (107) (133) (349) (410)
Income taxes (a) 7 (83) (204) (281)
Other (3) 3 (12) 15
_______ _______ _______ _______
INCOME BEFORE EXTRAORDINARY
GAIN(LOSS), NET 194 139 539 504
Extraordinary gain(loss), net - - (30) -
_______ _______ _______ _______
NET INCOME 194 139 509 504
Preferred dividends (23) (24) (69) (70)
_______ _______ _______ _______
EARNINGS(LOSS) APPLICABLE TO
COMMON STOCK $ 171 $ 115 $ 440 $ 434
======= ======= ======= =======
PRIMARY EARNINGS PER COMMON SHARE
Income before extraordinary
gain(loss), net $ .53 $ .36 $ 1.46 $ 1.37
Extraordinary gain(loss), net - - (.09) -
_______ _______ _______ _______
PRIMARY EARNINGS PER SHARE $ .53 $ .36 $ 1.37 $ 1.37
======= ======= ======= =======
FULLY DILUTED EARNINGS PER COMMON SHARE
Income before extraordinary
gain(loss), net $ .50 $ .36 $ 1.41 $ 1.33
Extraordinary gain(loss), net - - (.08) -
_______ _______ _______ _______
FULLY DILUTED EARNINGS PER SHARE $ .50 $ .36 $ 1.33 $ 1.33
======= ======= ======= =======
AVERAGE COMMON SHARES OUTSTANDING 325.3 318.6 322.4 318.0
================================== ======= ======= ======= =======
(a) 1996 includes a $100 million credit for reduction in federal income tax
liabilities no longer required. All periods include an adjustment to
corporate taxes, as quarterly consolidated taxes are computed in
accordance with Interpretation No. 18 of APB Opinion No. 28 and hence
are based on projections of total-year income and taxes. The third
quarter periods include an offset for charges and credits in lieu of
U.S. federal income taxes allocated to the divisions. Divisional
earnings in the third quarter of 1996 have benefited from credits
allocated by $3 million, $12 million and $7 million at oil and gas,
natural gas transmission and chemical, respectively. Divisional
earnings in the third quarter of 1995 have benefited from credits
allocated by $4 million, $12 million and $6 million at oil and gas,
natural gas transmission and chemical, respectively.
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SUMMARY OF OPERATING STATISTICS
Third Quarter Nine Months
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Periods Ended September 30 1996 1995 1996 1995
===================================== ====== ====== ====== ======
NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and condensate
(thousands of barrels) 57 62 56 65
Natural gas liquids
(thousands of barrels) 14 11 12 11
Natural gas
(millions of cubic feet) 588 588 605 621
Other Western Hemisphere
Crude oil and condensate
(thousands of barrels) 130 129 129 127
Eastern Hemisphere
Crude oil and condensate
(thousands of barrels) 99 95 102 89
Natural gas
(millions of cubic feet) 98 96 116 107
NATURAL GAS TRANSMISSION DELIVERIES
Sales (billions of cubic feet) 152 137 495 445
Transportation
(billions of cubic feet) 292 344 1,137 1,112
CAPITAL EXPENDITURES (millions) $ 272 $ 226 $ 780 $ 606
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DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 236 $ 235 $ 687 $ 708
===================================== ====== ====== ====== ======
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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: October 18, 1996 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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