SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 11-K
(Mark One)
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the fiscal year ended December 31, 2003
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from ____________ to ____________
Commission file number: 1-9210
A. Full title of the plan and the address of the plan, if different from
that of the issuer named below:
Occidental Petroleum Corporation Savings Plan
B. Name of issuer of the securities held pursuant to the plan and the
address of its principal executive office:
Occidental Petroleum Corporation
10889 Wilshire Boulevard
Los Angeles, California 90024
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Financial Statements and Supplemental Schedule
December 31, 2003 and 2002
(With Report of Independent Registered Public Accounting Firm Thereon)
WLA11036
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULE
PAGE
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits - December 31, 2003 and 2002 2
Statements of Changes in Net Assets Available for Benefits - Years ended December 31, 2003
and 2002 3
Notes to Financial Statements 4
SCHEDULE
Schedule H, Line 4i - Schedule of Assets (Held at End of Year) - December 31, 2003 15
Note: Supplemental schedules have been omitted because they are not
applicable or are not required by 29 CFR 2520.103-10 of the Department
of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, as amended.
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Occidental Petroleum Corporation
Pension and Retirement Plan Administrative Committee:
We have audited the accompanying statements of net assets available for benefits
of the Occidental Petroleum Corporation Savings Plan (the Plan) as of December
31, 2003 and 2002 and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with the standards of the Public Company
Accounting Oversight Board (United States). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan as of
December 31, 2003 and 2002 and the changes in net assets available for benefits
for the years then ended in conformity with accounting principles generally
accepted in the United States of America.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedule, schedule H,
line 4i - schedule of assets (held at end of year), is presented for purposes of
additional analysis and is not a required part of the basic financial statements
but is supplementary information required by the Department of Labor's Rules and
Regulations for Reporting and Disclosure under the Employee Retirement Income
Security Act of 1974. This supplemental schedule is the responsibility of the
Plan's management. The supplemental schedule has been subjected to the auditing
procedures applied in the audits of the basic financial statements and, in our
opinion, is fairly stated, in all material respects, in relation to the basic
financial statements taken as a whole.
s:/KPMG/
Los Angeles, California
May 21, 2004
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2003 and 2002
(Dollar amounts in thousands)
ASSETS 2003 2002
---------------- ----------------
Investments:
At fair value:
Cash and cash equivalents $ 10,900 6,544
Common stocks 508,632 362,026
Mutual funds 353,930 268,113
Participant loans 16,735 17,492
Plan interest in Master Trust 3,323 1,659
At contract value:
Guaranteed Investment Contract 167,755 185,199
---------------- ----------------
Total investments 1,061,275 841,033
---------------- ----------------
Receivables:
Interest and dividends 2,886 3,013
Participant contributions 1,561 1,153
Employer contributions 911 730
Due from broker for securities sold 195 --
---------------- ----------------
Total receivables 5,553 4,896
---------------- ----------------
Total assets 1,066,828 845,929
---------------- ----------------
LIABILITIES
Accrued expenses 57 56
Due to broker for securities purchased 113 --
---------------- ----------------
Total liabilities 170 56
---------------- ----------------
Net assets available for benefits $ 1,066,658 845,873
================ ================
See accompanying notes to financial statements.
2
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Statements of Changes in Net Assets Available for Benefits
Years ended December 31, 2003 and 2002
(Dollar amounts in thousands)
2003 2002
---------------- ----------------
Additions:
Additions to net assets attributable to:
Investment income (loss):
Interest and dividend income $ 15,694 14,551
Net appreciation (depreciation) in fair value of investments 243,835 (48,343)
Other income 43 --
---------------- ----------------
Total investment income (loss) 259,572 (33,792)
---------------- ----------------
Contributions:
Participant 38,549 35,639
Employer 22,479 22,072
Participant rollover 1,928 15,303
---------------- ----------------
Total contributions 62,956 73,014
---------------- ----------------
Transfers from other plans 1,553 105,172
---------------- ----------------
Total additions 324,081 144,394
---------------- ----------------
Deductions:
Deductions from net assets attributable to:
Benefits paid to participants 102,148 93,909
Plan expenses 1,148 849
---------------- ----------------
Total deductions 103,296 94,758
---------------- ----------------
Net increase 220,785 49,636
Net assets available for benefits:
Beginning of year 845,873 796,237
---------------- ----------------
End of year $ 1,066,658 845,873
================ ================
See accompanying notes to financial statements.
3
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(1) DESCRIPTION OF THE PLAN
The following description of the Occidental Petroleum Corporation Savings
Plan (the Plan) provides only general information. Participants should
refer to the Plan document for a more complete description of the Plan's
provisions.
(a) GENERAL
The Plan is a defined contribution plan generally available to certain
employees of Occidental Petroleum Corporation (OPC, Oxy, or the
Employer), a Delaware corporation, and participating subsidiaries
(collectively, the Company). The Plan is subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended
(ERISA).
(b) PLAN ADMINISTRATION
The Plan is administered by the OPC Pension and Retirement Trust and
Investment Committee (PARTAIC) as to investment decisions and by the
OPC Pension and Retirement Plan Administrative Committee (PARPAC) as
to all matters except investment decisions (these two committees are
herein referred to collectively as the Committees). Members of the
Committees are selected by the board of directors of OPC. The
Committees have been given all powers necessary to carry out their
respective duties, including, but not limited to, the power to
administer and interpret the Plan and to answer all questions
affecting eligibility of participants. The Northern Trust Company (the
Trustee) is the trustee and custodian of a trust fund, which holds all
of the assets of the Plan.
(c) CONTRIBUTIONS
Participant Contributions - Participants may contribute up to 15% of
compensation (as defined) to the Plan on a before- or after-tax basis,
or in any combination thereof, subject to certain Internal Revenue
Code (IRC) limitations. Effective July 1, 2002, this deferral
percentage limit was increased to 34% of compensation (as defined) for
a non Highly Compensated Employee (HCE) and up to 14% for HCEs.
Effective January 1, 2003, the deferral percentage limit for non-HCEs
changed to 31%, and remained at 14% for HCEs. Effective January 1,
2003 and June 1, 2002, participants age 50 or older by December 31 at
the end of the Plan year were permitted to contribute before-tax
catch-up contributions to the Plan up to $2,000 and $1,000 for each
Plan year, respectively.
Employer Contributions - For noncollective bargaining employees, the
Company contributed 100% of a participant's contribution up to the
first 6% of compensation. For collective bargaining employees, the
Company contributed 50%, 75%, or 100% as negotiated by their
respective unions, of the first 6% of eligible compensation that a
participant contributed to the Plan. All Employer contributions are
invested in the Occidental Petroleum Corporation Common Stock Fund
(the Oxy Stock Fund).
4 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(d) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's
contribution and allocations of the Company's contribution and Plan
earnings, and charged with an allocation of administrative expenses
and investment losses. Allocations are based on participant earnings
or account balances, as defined. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's
vested account.
(e) VESTING
Participants are vested immediately in their contributions plus actual
earnings thereon. Effective June 1, 2002, participants became 100%
vested in dividends credited to their balance in the Company Matching
Contribution Account under the Oxy Stock Fund on or after June 1,
2002. Vesting in the Company's contribution portion of their accounts
is based on years of continuous service. Generally, a participant is
20% vested for each year of service and is 100% vested after five
years of credited service.
(f) PARTICIPANT LOANS
Participants may borrow from their fund accounts a minimum of $1,000
up to a maximum equal to the lesser of: (i) $50,000 reduced by the
highest outstanding loan balance during the preceding 12 months, (ii)
50% of their account balance, or (iii) a loan amount which would
require payroll deductions for repayment equal to 25% of the
participant's base compensation. Loan terms range from one to five
years for general-purpose loans and six to ten years for primary
residence loans. The loans are secured by the balance in the
participant's account and bear interest at a fixed rate equal to the
Western Federal Credit Union's loan rate for a loan secured by a
member's deposit account at the time the loan is approved. Interest
rates ranged from 3.0% to 7.0% on loans outstanding as of December 31,
2003. Principal and interest is paid ratably through monthly payroll
deductions.
(g) DISTRIBUTIONS
Generally, on termination of service for any reason other than death,
participants with an account balance greater than $5,000 may elect to
receive the vested portion of their account under one of the following
distribution options: (i) one lump-sum payment, (ii) straight-life
annuity, (iii) ten-year term certain annuity, (iv) joint and survivor
annuity, (v) partial cash distribution, or (vi) deferral of payment
with certain restrictions. Upon termination of service due to death,
the beneficiary may elect to receive the vested interest in the form
of (i), (ii), (iii), or (vi) only. A participant whose vested account
balance is $5,000 or less may receive distributions only under options
(i), (v), or (vi). Participants may elect to receive distributions
from their account balance in the Oxy Stock Fund in cash or in shares
of OPC common stock.
(h) FORFEITED ACCOUNTS
Forfeited nonvested accounts are used to reduce Employer
contributions. During 2003 and 2002, Employer contributions were
reduced by approximately $186,000 and $286,000 from forfeited
nonvested accounts, respectively. Unallocated forfeitures at December
31, 2003 and 2002 were not significant to the financial statements.
5 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(i) INVESTMENT OPTIONS
The Plan offers various investment options which are managed by
several outside investment managers. Upon enrollment in the Plan,
participants may direct their contributions, in 1% increments, in any
of the investment options offered at the time. Participants may change
their investment options daily. Participants should refer to the Plan
fund description pamphlet for a complete description of the investment
options and for the detailed composition of each investment fund.
(j) PLAN AMENDMENTS
Effective June 1, 2002, the Plan was amended to designate the Matching
Account held under the Plan as an employee stock ownership plan and to
allow participants the option to have dividends reinvested in the Oxy
Stock Fund or distributed in the form of cash.
(k) PLAN MERGERS
Effective September 12, 2003, all accounts that would not be
distributed from the Oxy Permian Savings Plan, which was terminated
effective March 31, 2002, were merged into the Plan. Approximately
$1,553,000 was transferred into the Plan in September 2003.
Effective February 28, 2002, the Oxy Vinyls, LP Savings Plan was
merged into the Plan. As a result of the merger, the Plan became a
multiple-employer plan. In March 2003, Oxy Vinyls LP employees
transferred to Oxy Vinyls Services, Inc. As a result, the Plan is no
longer a multiple-employer plan.
(2) SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF ACCOUNTING
The financial statements of the Plan are prepared under the accrual
method of accounting. Certain reclassifications have been made to the
2002 financial statements to be consistent with the current year
presentation.
(b) USE OF ESTIMATES
The preparation of financial statements in conformity with accounting
principles generally accepted in the United States requires management
to make estimates and assumptions that affect the reported amounts of
assets and liabilities and changes therein, and disclosure of
contingent assets and liabilities. Actual results could differ from
those estimates.
(c) INVESTMENT VALUATION AND INCOME RECOGNITION
The Plan's investments are stated at fair value except for the
investments in guaranteed investment contracts (fully
benefit-responsive investment contracts) which are valued at contract
value (notes 3 and 5). Quoted market prices are used to value
investments. Shares of mutual funds are valued at the net asset value
of shares held by the Plan at year-end. Participant loans are valued
at cost, which approximates fair value.
Purchases and sales of securities are recorded on a trade-date basis.
Interest income is recorded on an accrual basis. Dividends are
recorded on the ex-dividend date.
6 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
Realized gains and losses on investments are based on the market value
of the asset at the beginning of the year or at the time of purchase
for assets purchased during the year, and the related fair value on
the day the investments are sold during the year. Unrealized gains and
losses of investments are based on the market value of the assets at
the beginning of the year or at the time of purchase for assets
purchased during the year, and the related fair value at the end of
the year. Net realized and unrealized appreciation (depreciation) in
fair value of investments is reflected in the accompanying statement
of changes in net assets available for benefits as "net appreciation
(depreciation) in fair value of investments."
(d) PAYMENT OF BENEFITS
Benefits are recorded when paid.
(e) RISKS AND UNCERTAINTIES
The Plan invests in various types of investment securities, including
mutual funds, actively managed funds, and the Oxy Stock Fund.
Investment securities are exposed to various risks, such as interest
rate, market, and credit risks. Due to the level of risk associated
with certain investment securities, it is at least reasonably possible
that changes in the values of investment securities will occur in the
near term and that such changes could materially affect the amounts
reported in the statements of net assets available for benefits.
Additionally, many mutual funds invest in the securities of foreign
companies, which involves special risks and considerations not
typically associated with investing in U.S. companies. These risks
include devaluation of currencies, less reliable information about
issuers, different securities transaction clearance and settlement
practices, and possible adverse political and economic developments.
Moreover, securities of many foreign companies and their markets may
be less liquid and their prices more volatile than similar types of
securities of comparable U.S. companies.
Derivative financial instruments are used by the Plan's equity and
fixed-income investment managers to remain fully invested in the asset
class and to hedge currency risk. Leveraging of the Plan assets and
speculation are prohibited.
As of December 31, 2003 and 2002, approximately 43% and 39% of total
Plan investments, respectively, were invested in the Oxy Stock Fund.
7 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(3) INVESTMENTS
The following presents investments that represent 5% or more of the Plan's
net assets (dollar amounts in thousands):
DECEMBER 31
---------------------------------------
2003 2002
---------------- ----------------
Oxy Stock Fund* $ 457,576 330,778
Invesco Fixed Income Fund 167,755 185,199
Vanguard S&P 500 Index Fund 169,976 132,416
Dodge & Cox US Balanced Fund 60,447 45,560
Fidelity Magellan Large Cap I Fund 51,251 ** 44,594
All other investments less than 5% 154,270 102,486
---------------- ----------------
Total investments $ 1,061,275 841,033
================ ================
* Participant- and nonparticipant-directed.
** This amount represents less than 5% of the Plan's net assets at December
31, 2003.
During 2003 and 2002, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
(depreciated) in value by approximately $243,835,000, and $(48,343,000),
respectively, as follows (dollar amounts in thousands):
2003 2002
---------------- ----------------
Common stocks $ 164,188 11,281
Mutual funds 79,080 (59,417)
Interest in master trust 567 (207)
---------------- ----------------
$ 243,835 (48,343)
================ ================
8 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(4) OXY STOCK FUND
Information regarding the net assets and the significant components of the
changes in net assets relating to the Oxy Stock Fund, which includes both
participant- and nonparticipant-directed investments is as follows (dollar
amounts in thousands):
DECEMBER 31
---------------------------------------
2003 2002
---------------- ----------------
Net assets:
Oxy Stock Fund $ 457,576 330,778
YEAR ENDED DECEMBER 31
---------------------------------------
2003 2002
---------------- ----------------
Changes in net assets:
Contributions $ 24,724 26,890
Investment income 11,415 11,486
Net appreciation in fair value of investments 149,051 20,674
Transfers between funds (13,557) (9,799)
Benefits paid to participants (44,745) (36,601)
Administrative expenses (90) (82)
Transfer from other plan -- 44,517
---------------- ----------------
$ 126,798 57,085
================ ================
(5) GUARANTEED INVESTMENT CONTRACTS
The Invesco Fixed-Income Fund (the Fund) includes investments in guaranteed
investment contracts (GICs) and synthetic GICs. Both the Plan and the OPC
Retirement Plan are invested in the Fund, managed by Invesco. The Plan's
investment in the Fund is 41.45% and 40.64% at December 31, 2003 and 2002,
respectively. The Plan's investments in GICs are included in the statements
of net assets available for benefits at contract value (which represents
contributions made under the contract plus earnings, less withdrawals and
administrative expenses) because they are fully benefit responsive. For
example, participants may ordinarily direct the withdrawal or transfer of
all or a portion of their investment at contract value.
Withdrawals resulting from events initiated by the Company, such as Plan
termination, are not typically considered participant-initiated
transactions. With such an event, some of the contracts contain
contingencies that could lead to withdrawal penalties. However, since no
such events are being contemplated at this time or the withdrawals
resulting from such an event will be funded outside the contracts'
provisions, these "potential" limitations do not jeopardize the contract
value reporting for these investments.
9 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
Contract value for the synthetic GICs is determined based on the fair value
of the assets underlying the synthetic GICs. The difference between the
fair value of the assets underlying the synthetic GICs and the contract
value of the GICs is the value of the "wrapper" contract issued by a third
party. The fair value for GICs varies based on the type of contract held
(e.g., security-backed investments and general account investments). Fair
value of the general account investment type GICs is derived by comparing
the contract value, on a duration basis, to the yield curve. Fair value of
the nonparticipating synthetic GICs is determined by comparing each
contract, on a duration basis, to a Treasury yield curve at year-end, plus
40 basis points. Fair value for security-backed investment contracts was
derived from outside sources, based on the type of investment held.
GICs provide a fixed crediting interest rate, and a financially responsible
entity guarantees liquidity at contract value prior to maturity for any and
all participant-initiated benefit withdrawals, loans, or transfers arising
under the terms of the Plan, which allows access for all participants.
Synthetic GICs operate similarly to a separate account guaranteed
investment contract, except that the assets are placed in a trust with
ownership by the Plan rather than a separate account of the issuer and a
financially responsible third party issues a wrapper contract that provides
that participants can, and must, execute Plan transactions at contract
value.
Inasmuch as trust assets are owned by the Plan, the wrapper contract and
the assets in trust are separately valued and disclosed. The wrapper
contract is valued at the difference between the fair value of the trust
assets and the contract value attributable by the wrapper to such assets.
When considered together, the trust assets and the wrapper contract are
reported at the wrapper contract value because participants are guaranteed
return of principal and accrued interest.
During 2003 and 2002, the average yield earned on amounts invested in the
GICs was 4.69% and 5.52%, respectively. As of December 31, 2003 and 2002,
the average crediting interest rate on such contracts was 4.73% and 4.97%,
respectively. There were no valuation reserves recorded to adjust contract
amounts during the Plan years. Crediting rate resets are applied to
specific investment contracts, as determined at the time of purchase. The
reset values for security-backed investment rates are a function of
contract value,
10 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
market value, yield, and duration. General account investment rates are
based on a predetermined index rate of return, plus a fixed-basis point
spread. The following is a reconciliation between the contract value and
the fair value of the GICs at December 31, 2003 (dollar amounts in
thousands):
CREDITING
INTEREST
DURATION RATE CONTRACT FAIR
(YEARS) PERCENTAGE VALUE VALUE
------------ ------------ ------------ ------------
Security-backed investments:
INVESCO Group Trust:
Bank of America NT & SA 1.93 5.28% $ 9,708 10,188
ING Life Ins & Ann Co. 2.46 4.22 11,965 12,388
JP Morgan Chase 3.65 4.48 28,539 29,612
Metropolitan Life 2.46 5.53 20,158 21,353
Monumental Life Ins. Co. #00285 0.08 1.53 499 507
Monumental Life Ins. Co. #00595 4.49 5.83 26,245 27,368
State Street Bank 3.65 4.51 28,534 29,613
UBS AG 1.93 4.98 11,797 12,275
------------ -----------
Total INVESCO Group Trust 137,445 143,304
------------ -----------
Separate account:
John Hancock Life Insurance 1.93 5.80 745 794
------------ -----------
Total separate accounts 745 794
------------ -----------
Total nonsynthetic security-backed
investments 138,190 144,098
------------ -----------
Synthetics:
ING Life Insurance & Annuity Co. 1.90 2.99 5,886 6,013
------------ -----------
Total synthetics 5,886 6,013
------------ -----------
General account investments:
Monumental Life Insurance Co. 2.43 5.05 2,240 2,365
SunAmerica Life Insurance Co. 0.01 7.97 738 738
IRT Stable Value Fund 2.98 3.74 18,753 18,753
------------ -----------
Total general account investments 21,731 21,856
------------ -----------
Short-term investment fund:
Northern Trust Company 1,948 1,948
------------ -----------
Total guaranteed investment contracts 167,755 173,915
------------ -----------
Less synthetic wrappers -- (127)
Less difference between the fair value and contract -- (6,091) 1
values on the nonsynthetic GICs
Add difference between the fair value and contract
values on the IRT Stable Value Fund -- 58
------------ -----------
Total contract value of guaranteed
investment contracts $ 167,755 167,755
============ ===========
1 The difference of $6,091,000 between the fair value and the contract
value of the guaranteed investment contracts is due to the
security-backed investments and general account investments that do
not have synthetic wrappers associated with them.
11 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
The following is a reconciliation between the contract value and the fair
value of the GICs at December 31, 2002 (dollar amounts in thousands):
CREDITING
INTEREST
DURATION RATE CONTRACT FAIR
(YEARS) PERCENTAGE VALUE VALUE
------------ ------------ ------------ ------------
Security-backed investments:
INVESCO Group Trust:
Monumental Life Insurance Co. 0.25 1.60% $ 2,503 2,510
Allstate Life Insurance Co. 3.53 5.66 28,228 29,730
Monumental Life Insurance Co. 4.00 5.36 2,034 2,188
Bank of America NT & SA 2.15 3.86 32,997 33,666
ING Life Insurance & Annuities Co. 2.20 2.49 5,706 5,750
------------ ------------
Total INVESCO Group Trust 71,468 73,844
------------ ------------
Separate account:
John Hancock Life Insurance 3.50 5.64 1,070 1,144
------------ ------------
Total separate account 1,070 1,144
------------ ------------
Total nonsynthetic security-backed
investments 72,538 74,988
------------ ------------
Synthetics:
JP Morgan Chase Bank 2.14 6.07 22,438 24,086
Metropolitan Life Insurance Co. 2.64 5.74 18,739 20,026
Monumental Life Insurance Co. 1.75 5.80 12,576 15,773
State Street Bank & Trust 1.84 4.61 20,368 21,382
UBS AG 2.98 6.43 13,137 14,631
------------ ------------
Total synthetics 87,258 95,898
------------ ------------
General account investments:
John Hancock Life Insurance 2,091 2,244
SunAmerica Life Insurance Co. 671 715
IRT Stable Value Fund 17,659 18,203
------------ ------------
Total general account investments 20,421 21,162
------------ ------------
Short-term investment fund:
Northern Trust Company 4,982 4,982
------------ ------------
Total guaranteed investment
contracts 185,199 197,030
------------ ------------
Less synthetic wrappers -- (8,668)
Less difference between the fair value and
contract values on the nonsynthetic GICs -- (3,228) 2
Add difference between the fair value and
contract values on the IRT Stable Value Fund -- 65
------------ ------------
Total contract value of guaranteed
investment contracts $ 185,199 185,199
============ ============
2 The difference of $3,228,000 between the fair value and the contract
value of the guaranteed investment contracts is due to the
security-backed investments and general account investments that do
not have synthetic wrappers associated with them.
12 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(6) INVESTMENT IN MASTER TRUST
The Plan's investment assets include a convertible bond fund in which other
plans also invest. This convertible bond fund is managed by Advent Capital
Management and is one of the master trust investment accounts (Advent MTIA)
in the OPC Master Retirement Trust. At December 31, 2003 and 2002, the
Plan's investment in the assets of Advent MTIA represented an individual
interest of approximately 15% and 10%, respectively.
The following table presents the aggregate fair value of investments held
by, and investment income earned by, the Advent MTIA, in which the Plan
owns an undivided interest, as stated above (dollar amounts in thousands):
DECEMBER 31
---------------------------------------
2003 2002
---------------- ----------------
Investments at fair value as determined by quoted market price:
Common/collective trust $ -- 156
Preferred stock 6,974 5,766
Corporate bonds 15,713 11,031
---------------- ----------------
$ 22,687 16,953
================ ================
YEAR ENDED DECEMBER 31
---------------------------------------
2003 2002
---------------- ----------------
Investment income (loss):
Net appreciation (depreciation) in fair value of investments:
Common stock $ -- (161)
Preferred stock 1,209 (1,482)
Corporate bonds 2,827 (1,001)
---------------- ----------------
4,036 (2,644)
Income from common/collective trust -- 2
Interest and dividends 710 689
Less investment expenses (171) (203)
---------------- ----------------
$ 4,575 (2,156)
================ ================
(7) RELATED PARTY TRANSACTIONS
The Trustee and OPC are parties in interest as defined by ERISA. The
Trustee invests certain plan assets in its Collective Short-Term Investment
Fund and the OXY Stock Fund. Such transactions qualify as party-in-interest
transactions permitted by the Department of Labor regulations. Expenses
paid by the Plan to the Trustee for the years ended December 31, 2003 and
2002 were insignificant.
13 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2003 and 2002
(8) PLAN TERMINATION
Although it has not expressed any intent to do so, the Company has the
right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination, participants would become 100% vested in their Employer
contributions.
(9) TAX STATUS
The Internal Revenue Service has determined and informed the Company by a
letter dated February 24, 2003, that the Plan and related trust are
designed in accordance with applicable sections of the IRC. However, the
Committees, using their judgment and the advice of their advisors, believe
that the Plan is currently designed and operating in a manner that
preserves its tax-qualified status.
(10) RECONCILIATION OF THE FINANCIAL STATEMENTS TO THE FORM 5500
The following is a reconciliation of net assets available for benefits per
the financial statements to the Form 5500 (dollar amounts in thousands):
2003 2002
---------------- ----------------
Net assets available for benefits per the financial statements $ 1,066,658 845,873
Amounts allocated to withdrawing participants (762) (4,205)
---------------- ----------------
Net assets available for benefits per the Form 5500 $ 1,065,896 841,668
================ ================
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the years ended December 31, 2003
and 2002 (dollar amounts in thousands):
2003 2002
---------------- ----------------
Benefits paid to participants per the financial statements $ 102,148 93,909
Amounts allocated to withdrawing participants
at December 31, 2003 762 --
Amounts allocated to withdrawing participants
at December 31, 2002 (4,205) 4,205
Amounts allocated to withdrawing participants
at December 31, 2001 -- (5,841)
---------------- ----------------
Benefits paid to participants per the Form 5500 $ 98,705 92,273
================ ================
Amounts allocated to withdrawing participants are recorded on the Form 5500
for benefit payments that have been processed and approved for payment
prior to December 31, but are not yet paid as of that date.
14 (Continued)
SCHEDULE 1
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
(Dollar amounts in thousands)
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
RELATED IDENTITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, PAR, MATURITY CURRENT
PARTY LESSOR, OR SIMILAR PARTY VALUE, OR DURATION COST* VALUE
- --------- ------------------------------------------- ----------------------------------------- ------------- -------------
Cash and cash equivalents $ 10,900
-------------
Common Stock:
ABM Industries Inc. Common Stock, 21,800 shares 244
Adaptec Inc. Common Stock, 45,700 shares 404
ADC Telecommunications Inc. Common Stock, 126,000 shares 374
ADR Aventis SA Sponsored ADR Common Stock, 1,500 shares 99
Alexander & Baldwin Inc. Common Stock, 5,400 shares 182
Altria Group Inc. (fka Phillip Morris) Common Stock, 4,500 shares 245
Amer Elec Pwr Co.Inc. Common Stock, 15,310 shares 467
Amer Natl Ins Co. Common Stock, 3,800 shares 321
American Axle & Mfg Holdings Inc. Common Stock, 15,900 shares 643
Andrew Corp. Common Stock, 45,500 shares 524
Arkansas Best Corp. Common Stock, 15,100 shares 474
Arrow Electr Inc. Common Stock, 6,300 shares 146
Arvinmeritor Inc. Common Stock 24,800 shares 598
Aspen Ins Holding Ltd Common Stock 2,500 shares 62
Astoria Financial Corp. Common Stock 13,500 shares 502
Avnet Inc. Common Stock, 20,126 shares 436
Aztar Corp. Common Stock, 23,975 shares 539
BK Amer Corp. Common Stock, 8,500 shares 684
Black Box Corp. Common Stock, 13,200 shares 608
Borg Warner Inc. Common Stock, 5,500 shares 468
Bowie & Co.Inc. Common Stock, 36,400 shares 494
Bristol Meyers Squib Co Common Stock, 6,400 shares 183
Brunswick Corp. Common Stock, 7,150 shares 228
Burl Northn Santa Fe Corp. Common Stock, 14,500 shares 469
C&D Technologies Inc. Common Stock, 21,000 shares 403
ChevronTexaco Corp. Common Stock, 1,000 shares 86
Caesars Entertainment Inc. Common Stock, 21,800 shares 236
Chubb Corp. Common Stock, 7,000 shares 477
Citigroup Inc. Common Stock, 8,200 shares 398
Community BK System Inc. Common Stock, 3,600 shares 176
Comcast Corp. Common Stock, 12,100 shares 378
Coml Fed Corp. Common Stock, 24,000 shares 641
Coml Metals Co. Common Stock, 30,000 shares 912
Conmed Corp. Common Stock, 18,600 shares 443
Conocophillips Common Stock, 12,659 shares 830
Cooper Ind Inc. Common Stock, 4,800 shares 278
Cooper Tire & Rubber Co. Common Stock, 12,300 shares 263
Corn Prods Intl Inc. Common Stock, 12,900 shares 444
Crompton Corp. Common Stock, 95,400 shares 684
CSX Corp. Common Stock, 10,800 shares 388
CTS Corp. Common Stock, 42,600 shares 490
Deluxe Corp. Common Stock, 14,800 shares 612
Dollar Thrifty Automotive Group Inc. Common Stock, 17,000 shares 441
Du Pont E I De Nemours & Co. Common Stock, 1,409 shares 65
Duane Reade Inc. Common Stock, 4,900 shares 83
Esterline Technologies Corp. Common Stock, 24,200 shares 645
Fed Dept Stores Inc. Del Common Stock, 4,600 shares 217
Felcor Lodging Tr Inc. Com Common Stock, 22,000 shares 244
FHLMC Common Stock, 3,400 shares 198
Fleetboston Finl Corp. Common Stock, 6,100 shares 266
Flextronics Intl Ltd Common Stock, 18,400 shares 273
15 (Continued)
SCHEDULE 1-2
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
(Dollar amounts in thousands)
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
RELATED IDENTITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, PAR, MATURITY CURRENT
PARTY LESSOR, OR SIMILAR PARTY VALUE, OR DURATION COST* VALUE
- --------- ------------------------------------------- ----------------------------------------- ------------- -------------
Flowserve Corp. Common Stock, 13,800 shares $ 288
FMC Corp. Common Stock, 19,100 shares 652
FNMA Common Stock, 3,525 shares 265
Foot Locker Inc. Common Stock, 21,200 shares 497
Frontier Oil Corp. Common Stock, 3,500 shares 60
Gardner Denver Inc. Common Stock, 22,900 shares 547
General Electric Co. Common Stock, 8,700 shares 270
Genlyte Group Inc. Common Stock, 4,800 shares 280
Genuine Parts Co. Common Stock, 9,350 shares 310
Glaxo Smithkline Spons Adr Common Stock, 10,500 shares 490
Golden W. Fncl Corp. Common Stock, 1,700 shares 175
Graftech Intl Ltd Common Stock, 41,300 shares 558
Group 1 Automotive Inc. Common Stock, 15,500 shares 561
Harleysville Group Inc. Common Stock, 10,250 shares 204
HarsCo.Corp. Common Stock, 7,100 shares 311
Hewlett Packard Co. Common Stock, 36,300 shares 834
Hexcel Corp. Common Stock, 15,100 shares 112
Hughes Sup Inc. Common Stock, 13,900 shares 690
Ingram Micro Inc. Common Stock, 11,575 shares 184
JLG Inds Inc. Common Stock, 27,100 shares 413
Kellwood Co. Common Stock, 12,000 shares 492
Kemet Corp. Common Stock, 12,200 shares 167
Koger Equity Inc. Common Stock, 25,100 shares 525
Kroger Co. Common Stock, 5,200 shares 96
Lear Corp. Common Stock, 6,200 shares 380
Lehman Bros Hldgs Inc. Common Stock, 7,175 shares 554
Lincoln Elec Hldgs Inc. Common Stock, 12,700 shares 314
Lubrizol Corp. Common Stock, 6,000 shares 195
Magna Intl Inc. Common Stock, 1,700 shares 136
May Dept Stores Co. Common Stock, 7,250 shares 211
MeadwestvaCo.Corp. Common Stock, 11,464 shares 341
Metlife Inc. Common Stock, 11,200 shares 377
Modine Mfg Co. Common Stock, 21,100 shares 569
Moog Inc. Common Stock, 7,800 shares 385
Natl Cy Corp. Common Stock, 8,900 shares 302
New Century Financial Corp. Common Stock, 15,800 shares 627
Norfolk Southn Corp. Common Stock, 26,300 shares 622
Nortel Networks Corp. Common Stock, 90,900 shares 385
Northeast Utilities Common Stock, 23,500 shares 474
Nu Skin Enterprises Inc. Common Stock, 33,400 shares 571
** ***Occidental Petroleum Corp. Common Stock, 10,595,054 shares 247,532 447,535
Office Depot Inc. Common Stock, 11,000 shares 184
Orbital Sciences Corp. Common Stock, 50,500 shares 607
Pacificare Health System Inc. Common Stock, 7,600 shares 514
Partnerre Hldg Ltd Common Stock, 1,500 shares 174
Peabody Energy Corp. Common Stock, 17,300 shares 722
Penn Engr & Mfg Corp. Common Stock, 36,100 shares 687
Pepsico Inc. Common Stock, 5,900 shares 275
PFF BanCorp. Inc. Common Stock, 6,700 shares 243
Pfizer Inc. Common Stock, 20,130 shares 711
Phillips Van Heusen Corp. Common Stock, 24,300 shares 431
Pnm Res Inc. Common Stock, 20,500 shares 576
Post Pptys Inc. Reit Common Stock 19,000 shares 530
PPL Corp. Common Stock, 10,500 shares 459
16 (Continued)
SCHEDULE 1-3
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
(Dollar amounts in thousands)
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
RELATED IDENTITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, PAR, MATURITY CURRENT
PARTY LESSOR, OR SIMILAR PARTY VALUE, OR DURATION COST* VALUE
- --------- ------------------------------------------- ----------------------------------------- ------------- -------------
Prime Hospitality Corp. Common Stock, 53,300 shares $ 544
Pulte Homes Inc. Common Stock, 4,700 shares 440
Quanex Corp. Common Stock, 14,300 shares 659
Qwest Communications Intl Inc. Common Stock, 70,100 shares 303
Readers Digest Assn Inc. Common Stock, 30,300 shares 444
Regal Beloit Corp. Common Stock, 25,000 shares 550
Reliance Stl & Alum Co. Common Stock, 17,000 shares 565
Renaissance Real Estate Holding Ltd Common Stock, 4,000 shares 196
Rock-Tenn Co. Common Stock, 37,000 shares 639
RTI Intl Metals Inc. Common Stock, 44,000 shares 742
Russ Berrie & Co. Inc. Common Stock, 3,300 shares 112
Safeway Inc. Common Stock, 17,900 shares 392
Sanmina-Sci Corp. Common Stock, 14,300 shares 180
SBS Technologies Inc. Common Stock, 18,400 shares 271
Schweitzer-Mauduit Intl Inc. Common Stock, 14,100 shares 420
Seacor Hldgs Inc. Common Stock, 15,700 shares 659
Sears Roebuck & Co. Common Stock, 3,900 shares 177
Smurfit-Stone Container Corp. Common Stock, 14,800 shares 275
Solectron Corp. Common Stock, 26,725 shares 158
Sonic Automotive Inc. Common Stock, 30,000 shares 688
Sprint Corp. (Fon Group) Common Stock, 13,900 shares 228
Sprint Corp. PCS Common Stock, 30,000 shares 169
Summit Ppty Inc. Common Stock, 23,000 shares 552
Tech Data Corp. Common Stock, 4,900 shares 194
Tellabs Inc. Common Stock, 33,500 shares 282
Terex Corp. Common Stock, 33,500 shares 954
Tesoro Pete Corp. Common Stock, 15,700 shares 229
Textron Inc. Common Stock, 10,100 shares 576
Thomas & Betts Corp. Common Stock, 2,000 shares 46
Torchmark Corp. Common Stock, 5,300 shares 241
Travelers Ppty Cas Corp. Common Stock, 22,300 shares 374
Tx Inds Inc. Common Stock, 18,500 shares 685
Unisource Energy Corp. Common Stock, 22,300 shares 550
Universal Corp. VA Common Stock, 10,800 shares 477
Universal Health Services Inc. Common Stock, 7,700 shares 414
URS Corp. New Common Stock, 13,300 shares 333
USF Corp. Common Stock, 16,900 shares 578
V F Corp. Common Stock, 1,400 shares 61
Valero Energy Corp. Common Stock, 13,400 shares 621
Vishay Intertechnology Inc. Common Stock, 31,200 shares 714
Wa Mut Inc. Common Stock, 8,700 shares 349
Wachovia Corp. Common Stock, 10,000 shares 466
Wash Fed Inc. Common Stock, 14,300 shares 406
Westin Digital Corp. Common Stock, 44,800 shares 528
Whirlpool Corp. Common Stock, 2,250 shares 163
Wolverine Tube Inc. Common Stock, 17,000 shares 107
WPS Res Corp. Common Stock, 4,200 shares 194
Wyeth Com Common Stock, 4,600 shares 195
Zale Corp. Common Stock, 9,300 shares 495
-------------
Total Common Stock 508,632
-------------
17 (Continued)
SCHEDULE 1-4
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
(Dollar amounts in thousands)
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
RELATED IDENTITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, PAR, MATURITY CURRENT
PARTY LESSOR, OR SIMILAR PARTY VALUE, OR DURATION COST* VALUE
- --------- ------------------------------------------- ----------------------------------------- ------------- -------------
Participant Loans:
** 1,664 participant loans, various
maturities, interest rates range
from 3.0% - 7.0%, balances
collateralized by participant account $ 16,735
-------------
Guaranteed Investment Contracts:
Invesco Fixed-Income Fund:
Collective Short-Term Investment Fund Maturity 1/1/04, Yield 0.99% 1,948
John Hancock Life Insurance #9698, Yield 5.80% 745
IRT Stable Value Fund #20949-087, Yield 3.74% 18,753
Monumental Life Ins Co. Contract #SV-04253Q, Yield 5.05% 2,240
SunAmerica Maturity 1/2/04, Yield 7.97% 738
Bank of America #01-204, Yield 5.28% 9,708
ING Life Ins & Ann Co. Contract #60032, Yield 4.22% 11,965
JP Morgan Chase #429939-MIA, Yield 4.48% 28,539
Metropolitan Life Ins Co. #28821, Yield 5.53% 20,158
Monumental Life Ins Co. #00285TR, Yield 1.53% 499
Monumental Life Ins Co. #00595TR, Yield 5.83% 26,245
State Street Bank #103093, Yield 4.51% 28,534
UBS AG #5152, Yield 4.98% 11,797
ING Life Ins & Ann Co. Contract
Cash -- 1,241
AB Retail Credit Card Maturity 10/15/09, Yield 6.70% 1,821
US Treasury Maturity 11/15/07, Yield 3.00% 210
US Treasury Maturity 11/15/05, Yield 5.75% 224
US Treasury Maturity 11/15/06, Yield 2.63% 2,517
-------------
Underlying Assets 6,013
ING Life Insurance & Annuity Co.
Wrapper Synthetic Wrapper Agreement (127)
-------------
Total Contract Value of ING Life
Insurance & Annuity Co. 5,886
-------------
Total Guaranteed Investment
Contracts 167,755
-------------
18 (Continued)
SCHEDULE 1-5
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2003
(Dollar amounts in thousands)
(a) (b) (c) (d) (e)
DESCRIPTION OF INVESTMENT,
INCLUDING MATURITY DATE, RATE OF
RELATED IDENTITY OF ISSUER, BORROWER, INTEREST, COLLATERAL, PAR, MATURITY CURRENT
PARTY LESSOR, OR SIMILAR PARTY VALUE, OR DURATION COST* VALUE
- --------- ------------------------------------------- ----------------------------------------- ------------- -------------
Mutual Funds:
MFO Cmg Hi Yield Fd 374,846 shares $ 3,055
MFO Dodge & Cox Balanced Fd 827,592 shares 60,447
MFO Fidelity Magellan Fd Inc Open
End Fd 524,363 shares 51,251
MFO Hbr Fd Cap Appreciation Fd 552,963 shares 14,554
MFO Pimco Fds Pac Invt Mgmt Ser 1,062,597 shares 11,380
MFO Putnam Intl Growth Fd 740,350 shares 15,296
MFO Vanguard Emp Benefit
Index Fd 1,786,771 shares 169,976
MFO Vanguard Index Tr Mid-Cap
Index Fd 257,069 shares 15,309
MFO Vanguard Specialized Portfolios 195,526 shares 12,662
--------------
Total Mutual Fund 353,930
--------------
Plan Interest in Master Trust:
Advent Unit Master Trust 3,323
--------------
Total $ 1,061,275
==============
* Cost information omitted for participant directed investment.
** Party-in-interest investment.
*** Includes nonparticipant-directed investments. No investment transactions
exceeded 5% of the Plan's net assets.
See accompanying report of independent public accounting firm.
19
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
trustees (or other persons who administer the Plan) have duly caused this annual
report to be signed on its behalf by the undersigned hereunto duly authorized.
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
By s:/Samuel P. Dominick, Jr./
----------------------------------------------------
Samuel P. Dominick, Jr. - Member of the
Occidental Petroleum Corporation
Pension and Retirement Plan Administrative Committee
Dated: June 23, 2004
EXHIBIT INDEX
Exhibit
No. Exhibit
- --------------------------------------------------------------------------------
23.1 Consent of Independent Registered Public Accounting Firm
Exhibit 23.1
CONSENT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors
Occidental Petroleum Corporation:
We consent to the incorporation by reference in the registration statement (No.
333-83124) on Form S-8 of Occidental Petroleum Corporation and the Occidental
Petroleum Corporation Savings Plan of our report dated May 21, 2004, with
respect to the statements of net assets available for benefits as of December
31, 2003 and 2002, and the related statements of changes in net assets available
for benefits for the years then ended and supplemental schedule H, line 4i -
schedule of assets (held at end of year) as of December 31, 2003, which report
appears in the December 31, 2003 annual report on Form 11-K of the Occidental
Petroleum Corporation Savings Plan.
By s:/KPMG LLP/
----------------------------------------
Los Angeles, California
June 23, 2004
28