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UNITED STATES
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) APRIL 6, 2005
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
================================================================================
Check the appropriate box below if the Form 8-K is intended to simultaneously
satisfy the filing obligation of the Registrant under any of the following
provisions (see General Instruction A.2. below):
[ ] Written communications pursuant to Rule 425 under the Securities Act (17
CFR 230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17
CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the
Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the
Exchange Act (17 CFR 240.13e-4(c))
SECTION 7 - REGULATION FD
Item 7.01. Regulation FD Disclosure
- ---------- ------------------------
Attached as Exhibit 99.1 is the presentation made on April 6, 2005 by
Stephen I. Chazen, Occidental's Senior Executive Vice President and Chief
Financial Officer, at the Howard Weil 33rd Annual Energy Conference.
SECTION 8 - OTHER EVENTS
Item 8.01. Other Events
- ---------- ------------
Filed as Exhibit 10.39 to this Current Report on Form 8-K is the Summary of
Material Terms and Conditions of Supplemental Retirement Allocations (effective
as of January 1, 2005), which was listed as Exhibit 10.39 to the Company's
Annual Report on Form 10-K for the year ended December 31, 2004, but was
inadvertently omitted from the filing.
1
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 6, 2005 S. P. Dominick, Jr.
--------------------------------------------------
S. P. Dominick, Jr., Vice President and Controller
(Chief Accounting and Duly Authorized Officer)
EXHIBIT INDEX
10.39 Summary of Material Terms and Conditions of Supplemental
Retirement Allocations (effective as of January 1, 2005)
99.1 Presentation made by Stephen I. Chazen
EXHIBIT 10.39
Summary of Material Terms and Conditions
of
Supplemental Retirement Allocations
(Effective as of January 1, 2005)
Background - As of December 31, 2004, in response to the American Jobs Creation
Act of 2004 (the "Jobs Creation Act"), no further contribution allocations may
be made to the Occidental Petroleum Corporation Supplemental Retirement Plan
(the "Old SRP"). Until supplemental guidance is issued by the Internal Revenue
Service and a new plan that conforms to such guidance is adopted by the Board of
Directors, Occidental Petroleum Corporation will make contingent allocations in
a manner that will generally mirror the provisions of the Old SRP, except for
necessary or advisable revisions to conform to the new Internal Revenue Code
("Code") Section 409A.
The following is a summary of the material terms and conditions that will govern
such allocations:
Eligibility - The supplemental retirement allocations will be available to
certain higher paid employees of Occidental Petroleum Corporation and its
subsidiaries in order to compensate them for maximums imposed by law upon
contributions to qualified plans. Any employee who was a participant in the Old
SRP and whose account in that plan was not fully vested on December 31, 2004
shall have a supplemental retirement allocations account established on January
1, 2005. The nonvested account of such a participant shall be transferred to the
supplemental retirement allocations account maintained for the participant as of
January 1, 2005.
Allocations - Allocations related to the Occidental Petroleum Corporation
Retirement Plan (PRA) will be based on the Social Security wage base, and an
eligible employee's age and pay. A contingent credit will be made to
supplemental retirement allocations and will be adjusted based on an eligible
employee's pay and the annual additions and elective deferral limits imposed by
Code Sections 415 and 402(g). For this purpose, it is assumed that the employee
has made the maximum elective deferrals and/or after-tax contributions permitted
to the Occidental Petroleum Corporation Savings Plan (PSA). Allocations related
to the PSA are based on the compensation limits imposed by Code Section
401(a)(17) and an eligible employee's pay. Allocations relating to the
Occidental Petroleum Corporation 2005 Deferred Compensation Plan will be based
on an eligible employee's age and bonus. An eligible employee's account also
reflects interest credits.
Vesting - All benefits under supplemental retirement allocations are contingent
and forfeitable and no participant shall have a vested interest in any benefit
unless, while he is still employed, a participant becomes fully vested in his
benefit under the PRA.
Distributions - A participant's vested supplemental retirement allocations
account may not be distributed earlier than a participant's separation from
service or death. If a participant is a key employee, a distribution made on
account of separation from service
may not be made before a date that is at least six months after the
participant's separation from service. If a participant fails to make a valid
and timely election, any vested account maintained for the participant shall be
paid as a single sum as soon as administratively practicable. In addition,
notwithstanding any election made by the participant, if the balance of any
vested account maintained for the participant is less than $50,000 when the
amount first becomes payable, the balance shall be paid in a single sum as soon
as administratively practicable. Annual installment payments over 5, 10, 15, or
20 years are available.
No change in distribution election shall be permitted which accelerates the time
of any payment. Any change in election resulting in a delay or change in the
form of payment shall not take effect until the one-year anniversary of the date
the changed election is properly made. In the case of a payment on account of
the participant's separation from service, the first payment under the changed
election must result in a deferral for a period of at least 5 years from the
date the first payment would have been made under the initial election.
EXHIBIT 99.1
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OCCIDENTAL PETROLEUM CORPORATION
[OXY LOGO]
STEVE CHAZEN
Senior Executive Vice President &
Chief Financial Officer
33RD ANNUAL HOWARD WEIL ENERGY
CONFERENCE
April 6, 2005
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1
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OCCIDENTAL PETROLEUM CORPORATION [OXY LOGO]
o Equity Market Capitalization $27 billion as of 3/29/05
- 4th largest U.S. oil & gas company
o Proven Reserves of 2.5 billion barrels oil equivalent
o 2004 Results
- Net income $2.6 billion
- Cash From Operations $3.9 billion
- Return on Equity 27.8%
- Return on Capital Employed 20.2%
- Total Shareholder Return 41.1%
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2
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WHAT'S BEEN OXY STRATEGY: [OXY LOGO]
o Focused Operations
o Focused Value Creation
- Disciplined Financial Philosophy
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3
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WORLDWIDE OPERATIONS [OXY LOGO]
[map of world]
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4
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WORLDWIDE PRODUCTION [OXY LOGO]
Thousand BOE/Day
[the following is a tabular representation of graphical materials]
1997 1998 1999 2000 2001 2002 2003 2004
---- ---- ---- ---- ---- ---- ---- ----
U.S. 156 183 183 282 315 326 345 338
Middle East 73 117 105 90 88 93 94 100
Latin America 113 89 96 49 31 48 57 79
Other 52 49 41 40 42 48 51 49
---- ---- ---- ---- ---- ---- ---- ----
Total 395 438 425 461 476 515 547 586
5.3% CAGR
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5
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WORLDWIDE PROVEN RESERVES [OXY LOGO]
Million BOE
[the following is a tabular
representation of graphical
materials]
2001 2002 2003 2004 - Horn Mountain -
------ ------ ------ ------
US 1,698 1,755 1,805 1,844 [photo]
International 543 556 666 688
------ ------ ------ ------
Total 2,241 2,311 2,471 2,532
2004 PUD = 22% of Total Reserves
See Appendix for GAAP reconciliation.
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6
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2004 PROVEN RESERVES BY COUNTRY [OXY LOGO]
Million BOE
[the following is a tabular representation of graphical materials]
COUNTRY RESERVES
- ------- --------
US 1,844
Qatar 348
Ecuador 104
Oman 63
Colombia 58
Russia 49
Yemen 42
Pakistan 24
See Appendix for GAAP reconciliation.
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7
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WORLDWIDE PRODUCTION AND [OXY LOGO]
PROVED RESERVES ADDITIONS
Million BOE
[the following is a tabular representation of graphical materials]
WORLDWIDE WORLDWIDE
YEAR PRODUCTION ADDITIONS
- ---- ---------- ---------
2000 168 1,170
2001 173 244
2002 188 263
2003 200 368
2004 207 268
See Appendix for GAAP reconciliation.
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8
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SOURCES OF WORLDWIDE RESERVE ADDITIONS [OXY LOGO]
Million BOE
[the following is a tabular representation of graphical materials]
SOURCE 2000 2001 2002 2003 2004
- ------ ------ ------ ------ ------ ------
Revisions 100 21 3 12 48
Improved Recovery 46 143 142 102 121
Extensions and Discoveries 55 76 50 147 63
Purchases 969 4 68 107 36
------ ------ ------ ------ ------
Total 1,170 244 263 368 268
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9
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FOCUSED VALUE CREATION STRATEGY [OXY LOGO]
o Maintain Strong Balance Sheet
o Disciplined Capital Expenditure Program
o Selective Acquisitions
o Moderate Predictable Reserve/Production Growth
o Chemicals Provides Excess Cash Flow
o Review Non-Core Investments
o Review Dividend Policy Annually
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10
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BALANCE SHEET [OXY LOGO]
Total Debt - $ Millions Total Equity - $ Millions
[the following is a tabular [the following is a tabular
representation of graphical representation of graphical
materials] materials]
DEBT/CAP -
YEAR DEBT PERCENTAGE YEAR EQUITY
------ ------ -------------- ------ --------
2000 6,354 57% 2000 4,774
2001 4,890 46% 2001 5,634
2002 4,759 43% 2002 6,318
2003 4,570 37% 2003 7,929
2004 3,905 27% 2004 10,550
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11
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2005 CAPITAL EXPENDITURES ($MM) [OXY LOGO]
Oil & Gas US $ 650
Middle East 550
Latin America 80
Other International 10
Exploration 120
Chemicals 150
--------
1,560
Dolphin 540
--------
$ 2,100 *
* Excludes acquisitions
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SELECTIVE ACQUISITIONS [OXY LOGO]
o Natural Consolidator
- Permian Basin
- California
o Vulcan Chlor-Alkali Plants
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13
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CHEMICALS PROVIDES EXCESS CASH FLOW [OXY LOGO]
o Role of Chemicals Business
- Generate Cash Flow in Excess of Capex Through the
Business Cycle
- 2004 Cash Flow in Excess of Capex $500 Million
o Goal
- Generate at least $300 Million of Cash Flow Per Year
in Excess of Capex
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14
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NON-CORE INVESTMENTS [OXY LOGO]
$ Millions
3/29/05
----------
[LYONDELL LOGO] 41.3 million shares (17%) $ 1,140
[PREMCOR LOGO] 9.0 million shares (10%) $ 515
----------
$ 1,655
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DIVIDENDS [OXY LOGO]
o Continuous Payment of Cash Dividends Since 1975
- Annual Payouts Per Common Share
o 2002 = $1.00
o 2003 = $1.04
3-yr CAGR = 7.4%
o 2004 = $1.10
o 2005 = $1.24
o Dividend Policy Evaluated Annually
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16
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DIVIDENDS & INTEREST * (AFTER TAX) [OXY LOGO]
$ Millions
[the following is a tabular representation of graphical materials]
2000 2001 2002 2003 2004 2005E
------ ------ ------ ------ ------ ------
Dividends 369 373 375 392 424 472
After-tax Interest 360 275 208 177 149 133
------ ------ ------ ------ ------ ------
Total 729 648 583 569 573 605
* Excludes interest on major debt repurchases
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17
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FOCUSED VALUE CREATION STRATEGY: [OXY LOGO]
MEASUREMENTS
o Financial Results/Returns
o Operating Performance - Top Quartile
- Finding & Development Costs
- Reserve Replacement
- Profit/BOE
- Cash Flow/BOE
o Return on Capital Employed
o Return on Equity
o Total Return to Stockholders
- Stock Price Change Plus Dividend
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18
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FINANCIAL RESULTS/RETURNS [OXY LOGO]
2003 2004
-------- --------
Net Income ($Billions) $ 1.5 $ 2.6
EPS ($Share) $ 3.98 $ 6.49
Cash From Operations ($Billions) $ 3.1 $ 4.2 *
ROCE (%) 14.6 20.2
ROE (%) 21.4 27.8
* Excluding the reduction of $360 Million of accounts receivable sales
See Appendix for GAAP reconciliation.
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19
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2002-2004 PROFITABILITY * [OXY LOGO]
$/BOE
OXY: 2004 $13.69/BOE
[the following is a tabular representation of graphical materials]
STOCK
SYMBOL PROFITABILITY
---------- -----------------
OXY 10.59
APA 8.69
APC 8.37
BR 7.98
XOM 7.69
CVX 7.52
COP 7.12
DVN 7.05
ECA 6.90
MRO 6.72
BP 6.18
UCL 5.62
KMG 3.48
AHC 2.44
* Exploration & production income after taxes and before interest -
divided by BOE sales. See Appendix for GAAP reconciliation.
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20
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2002-2004 CASH FLOW * [OXY LOGO]
$/BOE
OXY: 2004 $12.04/BOE
[the following is a tabular representation of graphical materials]
STOCK
SYMBOL CASH FLOW
---------- -------------
OXY 9.81
BR 7.76
CVX 6.03
XOM 5.77
KMG 5.73
MRO 5.65
APA 5.47
COP 5.42
DVN 5.41
BP 4.92
AHC 3.81
UCL 3.59
APC 2.53
ECA (1.01)
* Exploration & production income after taxes and before interest,
plus DD&A and exploration expense, less capital (excluding
acquisitions and ARO costs) - divided by BOE sales. See Appendix
for GAAP reconciliation.
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21
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RETURN ON CAPITAL EMPLOYED * [OXY LOGO]
2002-2004 Average
(Percentage)
OXY: 2004 20.2%
[the following is a tabular representation of graphical materials]
STOCK RETURN ON
SYMBOL CAPITAL EMPLOYED
---------- --------------------
XOM 20.8
ECA 17.0
OXY 15.4
CVX 14.7
APA 14.2
BP 13.9
BR 13.8
UCL 11.6
MRO 11.3
APC 11.2
DVN 10.4
COP 10.1
AHC 6.6
KMG 2.9
* Average 2002-2004 income before interest expense divided by average
capital employed (average debt plus equity); interest is added back
after-tax (using 35% statutory rate, not effective rate). See
Appendix for GAAP reconciliation.
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22
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RETURN ON EQUITY * [OXY LOGO]
2002-2004 Average
(Percentage)
OXY: 2004 27.8%
[the following is a tabular representation of graphical materials]
STOCK RETURN
SYMBOL ON EQUITY
---------- ----------
ECA 24.3
XOM 22.9
OXY 22.3
BR 21.3
CVX 19.7
APA 18.9
UCL 18.6
BP 17.3
MRO 17.1
DVN 16.4
APC 16.1
COP 13.9
AHC 9.3
KMG 1.3
* Average income applicable to common shares in 2002-2004 divided by
average equity during the period.
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23
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COMPARATIVE TOTAL RETURNS [OXY LOGO]
10 Years (12/31/94 - 12/31/04)*
(Percent)
[the following is a tabular representation of graphical materials]
STOCK TOTAL
SYMBOL RETURNS
---------- ----------
APA 403.5
OXY 345.9
XOM 342.9
DVN 337.3
BP 306.9
APC 257.9
DJIA 242.7
CVX 228.2
MRO 216.6
S&P 500 212.4
BR 182.6
COP 182.2
AHC 107.3
UCL 101.7
KMG 73.1
*Data Source: Bloomberg
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24
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WHAT'S AHEAD? [OXY LOGO]
o Success Riding on Two Factors
- Add New Projects in Core Areas to Provide Growth
- Maintain Strong Asset Base to Generate Cash to
Support Growth
o Stay Focused on the Fundamentals
- Maintain Financial Discipline and Focus
- Execute Our Strategy
o Create Long-Term Value
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25
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PRODUCTION GROWTH PROJECTS [OXY LOGO]
o Qatar
- ISND/ISSD
- Dolphin
o Libya
o Other Middle East Projects
o Permian Basin / California
o Exploration
- Current Plans to Drill 30-40 Wells in 2005
- Recently Awarded 9 Exploration Blocks in Libya
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26
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DOLPHIN PROJECT [OXY LOGO]
Projected Start - 2006
o Invest $1 billion in
this $4 billion
project (2004-2006)
o Peak net production
- 275 million cubic
[map of Dolphin Project] feet/day
- 20,000 barrels
liquids/day
- Equals 65,000
BOE/day
o 25-year cumulative net
production
- 1.3 trillion cubic
feet
- 85 million barrels
liquids
- Totals 300 million
BOE
Dolphin
Oxy's Interest.........................................24.5%
Oxy's Cumulative Net Production (25 years)........300 MM BOE
Oxy Net Production Estimate...................65,000 BOE/Day
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EXPLORATION PROPERTIES WITH SAT IMAGE & FIELDS [OXY LOGO]
[map of Libya]
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28
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OCCIDENTAL PETROLEUM CORPORATION [OXY LOGO]
Statements in this presentation that contain words such as "will",
"expect" or "estimate", 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:
exploration risks such as drilling of unsuccessful wells, global
commodity pricing fluctuations and supply/demand considerations for
oil, gas and chemicals; higher-than-expected costs; political risk;
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. The United States Securities and Exchange Commission (SEC)
permits oil and natural gas companies, in their filings with the SEC,
to disclose only proved reserves demonstrated by actual production or
conclusive formation tests to be economically producible under
existing economic and operating conditions. We use certain terms in
this presentation, such as probable, possible and recoverable
reserves, that the SEC's guidelines strictly prohibit us from using in
filings with the SEC. Additionally, the SEC requires oil and natural
gas companies, in their filings, to disclose non-financial statistical
information about their consolidated entities separately from such
information about their equity holdings and not to show combined
totals. Certain information in this presentation is shown on a
combined basis; however, the information is disclosed separately in
the Appendix. U.S. investors are urged to consider carefully the
disclosure in our Form 10-K, available through the following toll-free
telephone number, 1-888-OXYPETE (1-888-699-7383) or on the Internet at
http://www.oxy.com. You also can obtain a copy from the SEC by calling
1-800-SEC-0330.
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[OXY LOGO]
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30
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APPENDIX [OXY LOGO]
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31
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WORLDWIDE PROVEN RESERVES [OXY LOGO]
GAAP RECONCILIATION
(Million BOE) -------------------
US International Worldwide
--------------------- --------------------- ---------------------
2004 OIL GAS BOE OIL GAS BOE OIL GAS BOE
- ----- ----- ----- ----- ----- ----- ----- ----- ----- -----
Consolidated Subsidiaries 1,494 2,101 1,844 499 874 645 1,993 2,975 2,489
Other Interests -- -- -- 43 -- 43 43 -- 43
Worldwide 1,494 2,101 1,844 542 874 688 2,036 2,975 2,532
2003
- ----
Consolidated Subsidiaries 1,500 1,826 1,804 490 759 617 1,990 2,585 2,421
Other Interests -- -- -- 48 9 50 48 9 50
Worldwide 1,500 1,826 1,804 538 768 667 2,038 2,594 2,471
2002
- ----
Consolidated Subsidiaries 1,452 1,821 1,755 476 228 514 1,928 2,049 2,269
Other Interests -- -- -- 42 -- 42 42 -- 42
Worldwide 1,452 1,821 1,755 518 228 556 1,970 2,049 2,311
2001
- ----
Consolidated Subsidiaries 1,371 1,962 1,698 482 106 499 1,853 2,068 2,197
Other Interests -- -- -- 44 -- 44 44 -- 44
Worldwide 1,371 1,962 1,698 526 106 543 1,897 2,068 2,241
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32
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2004 PROVEN RESERVES BY COUNTRY [OXY LOGO]
GAAP RECONCILIATION
(Million BOE) -------------------
Consolidated Subsidiaries Other Interests Worldwide
--------------------------- --------------------------- ---------------------------
OIL GAS BOE OIL GAS BOE OIL GAS BOE
------- ------- ------- ------- ------- ------- ------- ------- -------
United States 1,494 2,101 1,844 -- -- -- 1,494 2,101 1,844
Qatar 237 668 348 -- -- -- 237 668 348
Ecuador 104 -- 104 -- -- -- 104 -- 104
Oman 46 100 63 -- -- -- 46 100 63
Colombia 67 -- 67 (9) -- (9) 58 -- 58
Russia -- -- -- 49 -- 49 49 -- 49
Yemen 39 -- 39 3 -- 3 42 -- 42
Pakistan 6 106 24 -- -- -- 6 106 24
------- ------- ------- ------- ------- ------- ------- ------- -------
1,993 2,975 2,489 43 -- 43 2,036 2,975 2,532
======= ======= ======= ======= ======= ======= ======= ======= =======
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33
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WORLDWIDE PRODUCTION AND PROVED [OXY LOGO]
RESERVE ADDITIONS GAAP RECONCILIATION
-------------------
(Million BOE) Consolidated Subsidiaries Other Interests Worldwide
--------------------------- --------------------------- ---------------------------
OIL GAS BOE OIL GAS BOE OIL GAS BOE
------- ------- ------- ------- ------- ------- ------- ------- -------
PRODUCTION
2000 117 259 160 8 -- 8 125 259 168
2001 124 241 164 9 -- 9 133 241 173
2002 142 229 180 8 -- 8 150 229 188
2003 153 221 190 10 -- 10 163 221 200
2004 159 233 198 9 -- 9 168 233 207
Proved Reserve Additions
2000 1,041 777 1,170 -- -- -- 1,041 777 1,170
2001 219 100 236 8 -- 8 227 100 244
2002 221 216 257 6 -- 6 227 216 263
2003 223 766 351 16 9 18 23 775 368
2004 162 624 266 4 (9) 2 166 615 268
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34
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SOURCES OF WORLDWIDE PROVED [OXY LOGO]
RESERVE ADDITIONS GAAP RECONCILIATION
-------------------
(Million BOE) Consolidated Subsidiaries Other Interests Worldwide
--------------------------- --------------------------- ---------------------------
OIL GAS BOE OIL GAS BOE OIL GAS BOE
------- ------- ------- ------- ------- ------- ------- ------- -------
2004
- ----
Revisions 5 241 45 5 (9) 3 10 232 48
Improved Recovery 88 185 120 1 -- 1 89 185 121
Extensions and Discoveries 30 191 61 2 -- 2 32 191 63
Purchases 39 7 40 (4) -- (4) 35 7 36
------- ------- ------- ------- ------- ------- ------- ------- -------
162 624 266 4 (9) 2 166 615 268
======= ======= ======= ======= ======= ======= ======= ======= =======
2003
- ----
Revisions (1) 44 6 6 -- 6 5 44 12
Improved Recovery 85 70 97 4 9 6 89 79 102
Extensions and Discoveries 41 597 141 6 -- 6 47 597 147
Purchases 98 55 107 -- -- -- 98 55 107
------- ------- ------- ------- ------- ------- ------- ------- -------
223 766 351 16 9 18 239 775 368
======= ======= ======= ======= ======= ======= ======= ======= =======
2002
- ----
Revisions 13 (54) 4 (1) -- (1) 12 (54) 3
Improved Recovery 112 151 137 5 -- 5 117 151 142
Extensions and Discoveries 40 50 -- -- -- -- 40 60 50
Purchases 56 59 66 2 -- 2 58 9 68
------- ------- ------- ------- ------- ------- ------- ------- -------
221 216 257 6 -- 6 227 216 263
======= ======= ======= ======= ======= ======= ======= ======= =======
2001
- ----
Revisions 21 (49) 13 8 -- 8 29 (49) 21
Improved Recovery 139 23 143 -- -- -- 139 23 143
Extensions and Discoveries 56 122 76 -- -- -- 56 122 76
Purchases 3 4 4 -- -- -- 3 4 4
------- ------- ------- ------- ------- ------- ------- ------- -------
219 100 236 8 -- 8 227 100 244
======= ======= ======= ======= ======= ======= ======= ======= =======
2000
- ----
Revisions 62 223 99 1 -- 1 63 223 100
Improved Recovery 42 25 46 -- -- -- 42 25 46
Extensions and Discoveries 37 112 56 (1) -- (1) 36 112 55
Purchases 900 417 969 -- -- -- 900 417 969
------- ------- ------- ------- ------- ------- ------- ------- -------
1,041 777 1,170 -- -- -- 1,041 777 1,170
======= ======= ======= ======= ======= ======= ======= ======= =======
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35
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OIL & GAS: PROFITABILITY [OXY LOGO]
GAAP RECONCILIATION
($ Millions, except $/BOE) -------------------
Consolidated Other
Subsidiaries Interests Worldwide
-------------- -------------- --------------
Revenues $ 7,300 $ 200 $ 7,500
Production costs 1,375 122 1,497
Exploration expenses 214 1 215
Other operating expenses 392 6 398
DD&A 1,040 12 1,052
---------- ---------- ----------
Pre-tax income 4,279 59 4,338
Income tax expense 1,498 9 1,507
---------- ---------- ----------
Results of operations $ 2,781 $ 50 $ 2,831
========== ========== ==========
BOE Sales 206.83
Revenues $ 36.26
Production costs 7.24
Exploration expenses 1.04
Other operating expenses 1.92
DD&A 5.08
----------
Pre-tax income 20.98
Income tax expense 7.29
----------
Results of operations $ 13.69
==========
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36
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OIL & GAS: PROFITABILITY [OXY LOGO]
GAAP RECONCILIATION
($ Millions, except $/BOE) -------------------
Annual Average 2002 - 2004
----------------------------------------------------
Consolidated Other
Subsidiaries Interests Worldwide
-------------- -------------- --------------
Revenues $ 5,797 $ 148 $ 5,945
Production costs 1,171 91 1,262
Exploration expenses 176 0 176
Other operating expenses 314 8 322
DD&A 933 14 947
---------- ---------- ----------
Pre-tax income 3,203 35 3,238
Income tax expense 1,109 9 1,118
---------- ---------- ----------
Results of operations $ 2,095 $ 26 $ 2,120
========== ========== ==========
BOE Sales 200.15
Revenues $ 29.71
Production costs 6.31
Exploration expenses 0.88
Other operating expenses 1.61
DD&A 4.73
----------
Pre-tax income 16.18
Income tax expense 5.59
----------
Results of operations $ 10.59
==========
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37
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OIL & GAS: CASH FLOW [OXY LOGO]
GAAP RECONCILIATION
($ Millions, except $/BOE) -------------------
2004
--------------
Occidental Petroleum Consolidated Statement of Cash Flows
Cash flow from operating activities $ 3,878
Cash flow from investing activities (2,288)
Cash flow from financing activities (824)
----------
Change in cash $ 766
==========
2004
----------------------------------------------------
Consolidated Other
Subsidiaries Interests Worldwide
-------------- -------------- --------------
FAS 69 GAAP Oil & Gas results of operations $ 2,781 $ 50 $ 2,831
Depreciation, depletion & amortization 1,040 12 1,052
Exploration expense 214 1 215
Capital expenditures (excluding acquisitions) (1,596) (11) (1,607)
---------- ---------- ----------
Cash flow from operations $ 2,439 $ 52 $ 2,491
Sales volumes (million BOE) 206.83
Cash flow per BOE $ 12.04
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38
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OIL & GAS: CASH FLOW [OXY LOGO]
GAAP RECONCILIATION
($ Millions, except $/BOE) -------------------
Annual Average
2002 - 2004
--------------
Occidental Petroleum Consolidated Statement of Cash Flows
Cash flow from operating activities $ 3,017
Cash flow from investing activities (2,002)
Cash flow from financing activities (599)
----------
Change in cash $ 416
==========
Annual Average 2002 - 2004
----------------------------------------------------
Consolidated Other
Subsidiaries Interests Worldwide
-------------- -------------- --------------
FAS 69 GAAP Oil & Gas results of operations $ 2,095 $ 26 $ 2,121
Depreciation, depletion & amortization 933 14 947
Exploration expense 176 0 176
Capital expenditures (excluding acquisitions) (1,272) (9) (1,281)
---------- ---------- ----------
Cash flow from operations $ 1,932 $ 31 $ 1,963
Sales volumes (million BOE) 200.15
Cash flow per BOE $ 9.81
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RETURN ON CAPITAL EMPLOYED (ROCE) [OXY LOGO]
GAAP RECONCILIATION
($ Millions) -------------------
2003 2004
---------- ----------
GAAP measure - earnings applicable $ 1,527 $ 2,568
to common shareholders
Interest expense 295 239
Tax effect of interest expense (103) (84)
---------- ----------
Earnings before tax-effected interest expense $ 1,719 $ 2,723
========== ==========
GAAP stockholders' equity $ 7,929 $ 10,550
Debt
GAAP debt
Debt, including current maturities $ 4,016 $ 3,804
Non-GAAP debt
Capital lease obligation 26 26
Subsidiary preferred stock 75 75
Trust preferred securities 453 --
---------- ----------
Total debt $ 4,570 $ 3,905
Total capital employed $ 12,499 $ 14,455
RETURN ON CAPITAL EMPLOYED (ROCE) (%) 14.6 20.2
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RETURN ON CAPITAL EMPLOYED (ROCE) [OXY LOGO]
GAAP RECONCILIATION
($ Millions) -------------------
Annual Average
2002 - 2004
--------------
GAAP measure - earnings applicable $ 1,695
to common shareholders
Interest expense 272
Tax effect of interest expense (95)
----------
Earnings before tax-effected interest expense $ 1,872
GAAP average stockholders' equity $ 7,608
Average Debt
GAAP debt
Notes payable $ 14
Debt, including current maturities 4,022
Non-GAAP debt
Capital lease obligation 26
Subsidiary preferred stock 56
Gas sales agreements 71
Trust preferred securities 343
----------
Average total debt $ 4,532
Total average capital employed $ 12,140
RETURN ON CAPITAL EMPLOYED (ROCE) (%) 15.4
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