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, 2004
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
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:/Jim A. Leonard/
----------------------------------------------------
James A. Leonard - Member of the
Occidental Petroleum Corporation
Pension and Retirement Plan Administrative Committee
Dated: June 28, 2005
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Financial Statements and Supplemental Schedules
December 31, 2004 and 2003
(With Report of Independent Registered Public Accounting Firm Thereon)
WLA11572AC PCAOB
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
INDEX TO FINANCIAL STATEMENTS AND SUPPLEMENTAL SCHEDULES
PAGE
Report of Independent Registered Public Accounting Firm 1
Statements of Net Assets Available for Benefits - December 31,
2004 and 2003 2
Statements of Changes in Net Assets Available for Benefits - Years
ended December 31, 2004 and 2003 3
Notes to Financial Statements 4
SCHEDULES
1 Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
- December 31, 2004 16
2 Schedule H, Line 4j - Schedule of Reportable Transactions - Year
ended December 31, 2004 19
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, 2004 and 2003 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, 2004 and 2003 and the changes in net assets available for benefits
for the years then ended in conformity with U.S. generally accepted accounting
principles.
Our audits were performed for the purpose of forming an opinion on the basic
financial statements taken as a whole. The supplemental schedules are presented
for purposes of additional analysis and are not a required part of the basic
financial statements but are 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. These supplemental
schedules are the responsibility of the Plan's management. The supplemental
schedules have been subjected to the auditing procedures applied in the audits
of the basic financial statements and, in our opinion, are fairly stated, in all
material respects, in relation to the basic financial statements taken as a
whole.
/s/ KPMG LLP
Los Angeles, California
June 24, 2005
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Statements of Net Assets Available for Benefits
December 31, 2004 and 2003
(Dollar amounts in thousands)
2004 2003
------------ ------------
Assets:
Investments:
At fair value:
Cash and cash equivalents $ 21,162 10,900
Common stock 552,201 508,632
Mutual funds 391,134 353,930
Participant loans 17,942 16,735
Plan interest in Master Trusts 60,963 3,323
At contract value:
Guaranteed investment contracts 197,625 167,755
------------ ------------
Total investments 1,241,027 1,061,275
------------ ------------
Receivables:
Interest and dividends 2,564 2,886
Participant contributions -- 1,561
Employer contributions -- 911
Due from broker for securities sold 5,850 195
------------ ------------
Total receivables 8,414 5,553
------------ ------------
Total assets 1,249,441 1,066,828
------------ ------------
Liabilities:
Accrued expenses 51 57
Due to broker for securities purchased 6,591 113
------------ ------------
Total liabilities 6,642 170
------------ ------------
Net assets available for benefits $ 1,242,799 1,066,658
============ ============
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, 2004 and 2003
(Dollar amounts in thousands)
2004 2003
------------ ------------
Additions:
Additions to net assets attributable to:
Investment income:
Interest and dividend income $ 17,320 15,694
Net appreciation in fair value of investments 214,295 243,835
Other income 196 43
------------ ------------
Total investment income 231,811 259,572
------------ ------------
Contributions:
Participant 40,625 38,549
Employer 22,174 22,479
Participant rollovers 1,556 1,928
------------ ------------
Total contributions 64,355 62,956
------------ ------------
Transfers from other plans -- 1,553
------------ ------------
Total additions 296,166 324,081
------------ ------------
Deductions:
Deductions from net assets attributable to:
Benefits paid to participants 119,306 102,148
Plan expenses 719 1,148
------------ ------------
Total deductions 120,025 103,296
------------ ------------
Net increase 176,141 220,785
Net assets available for benefits:
Beginning of year 1,066,658 845,873
------------ ------------
End of year $ 1,242,799 1,066,658
============ ============
See accompanying notes to financial statements.
3
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
(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. Effective April 1, 2004, the
Bank of New York (the Trustee) is the trustee and custodian of the
trust fund, which holds all of the assets of the Plan. Prior to April
1, 2004, The Northern Trust Company was the trustee of the Plan.
(c) CONTRIBUTIONS
Participant Contributions - Participants may contribute up to the
maximum contribution percentage 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. For 2004,
the deferral percentage limits were 32% for non-Highly Compensated
Employees (non-HCEs) and 14% for Highly Compensated Employee (HCEs).
For 2003, the deferral percentage limits for a non-HCE were 31% and
14% for HCEs. Participants age 50 or older by the end of the Plan year
were permitted to contribute before-tax catch-up contributions to the
Plan up to $3,000 and $2,000 for the 2004 and 2003 Plan years,
respectively.
Employer Matching Contributions - For noncollectively bargained
employees, the Company contributed 100% of a participant's
contribution up to the first 6% of eligible compensation. For
collectively bargained 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, 2004 and 2003
(d) PARTICIPANT ACCOUNTS
Each participant's account is credited with the participant's elected
contribution, the Employer's respective matching contribution, and
allocations of Plan earnings, and charged with an allocation of Plan
investment losses and trustee fees. 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 full year of service and is 100% vested after five
years of vesting 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 principal loan balance during the preceding 12
months, (ii) 50% of their account balance, or (iii) a loan amount
which would require monthly payroll deductions for repayment not
greater than 25% of the participant's monthly 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 2.75% to 7.00% on loans
outstanding as of December 31, 2004. 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.
5 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
(h) FORFEITED ACCOUNTS
Forfeited nonvested accounts are used to reduce Employer
contributions. During 2004 and 2003, Employer contributions were
reduced by approximately $298,000 and $186,000 from forfeited
nonvested accounts, respectively. Unallocated forfeitures at December
31, 2004 and 2003 were not significant to the financial statements.
Effective August 2, 2004, Plan forfeitures are used to pay Plan
expenses before reducing Employer contributions.
(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, among
any of the investment options offered at the time. Participants may
change their investment options daily. Participants are provided a
Plan fund description pamphlet for a complete description of the
investment options and for the detailed composition of each investment
fund. If a participant does not make an investment election, his or
her elected contributions automatically are invested in the Plan's
Stable Value Fund.
(j) PLAN AMENDMENTS
Effective August 2, 2004, the Plan was amended to allow forfeitures to
be used to pay the reasonable costs of administering the Plan and any
remaining forfeitures to be used to reduce Employer matching
contributions. In addition, participants who met age and vesting
service requirements may elect to diversify Oxy stock held in the
Company matching account into other investment funds. The changes were
to be implemented in three phases based on the participant's age and
vesting service under the Plan.
(k) PLAN MERGERS
Effective September 12, 2003, all accounts not 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.
(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
2003 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 of America 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.
6 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
(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.
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
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, some 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, 2004 and 2003, approximately 44% and 43% 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, 2004 and 2003
(3) INVESTMENTS
The following presents investments that represent 5% or more of the Plan's
net assets (dollar amounts in thousands):
DECEMBER 31
-----------------------------
2004 2003
------------ ------------
Oxy Stock* $ 525,498 447,535
Invesco Fund 197,625 167,755
Vanguard Employee Benefit Index Fund 170,812 169,976
Dodge & Cox Balanced Fund 69,181 60,447
All other investments less than 5% 277,911 215,562
------------ ------------
Total investments $ 1,241,027 1,061,275
============ ============
* Participant- and nonparticipant-directed.
During 2004 and 2003, the Plan's investments (including gains and losses on
investments bought and sold, as well as held during the year) appreciated
in value by approximately $214,295,000 and $243,835,000, respectively, as
follows (dollar amounts in thousands):
2004 2003
------------ ------------
Common stock $ 160,924 164,188
Mutual funds 46,591 79,080
Interest in Master Trusts 6,780 567
------------ ------------
$ 214,295 243,835
============ ============
8 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
(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
-----------------------------
2004 2003
------------ ------------
Net assets:
Oxy Stock Fund $ 546,964 457,576
YEAR ENDED DECEMBER 31
-----------------------------
2004 2003
------------ ------------
Changes in net assets:
Contributions $ 26,524 24,724
Investment income 10,914 11,415
Net appreciation in fair value of investments 158,115 149,051
Transfers between funds (40,319) (13,557)
Benefits paid to participants (65,737) (44,745)
Administrative expenses (109) (90)
------------ ------------
$ 89,388 126,798
============ ============
(5) GUARANTEED INVESTMENT CONTRACTS
The Invesco 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 45.89% and 41.45% at December 31, 2004 and 2003, 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.
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
9 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
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 2004 and 2003, the average yield earned on amounts invested in the
GICs was 4.62% and 4.69%, respectively. As of December 31, 2004 and 2003,
the average crediting interest rate on such contracts was 4.59% and 4.73%,
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, market value, yield, and duration. General account
investment rates are based on a predetermined index rate of return, plus a
fixed-basis point spread.
10 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
The following is a reconciliation between the contract value and the fair
value of the GICs at December 31, 2004 (dollar amounts in thousands):
CREDITING
DURATION INTEREST RATE CONTRACT FAIR
(YEARS) PERCENTAGE VALUE VALUE
------------- ------------- ------------- -------------
Security-backed investments:
Synthetics:
Bank of America NT & SA 1.71 4.32 $ 15,223 15,432
ING Life Ins & Ann Co (#60032) 2.39 3.81 23,633 23,702
ING Life Ins & Ann Co (#60072) 2.31 3.11 3,874 3,917
JP Morgan Chase 3.54 5.07 22,287 23,148
Metropolitan Life 2.39 5.09 23,034 23,731
Monumental Life Ins. Co. #00595 4.14 5.71 30,748 31,573
State Street Bank 3.54 4.56 34,443 35,172
UBS AG 1.71 4.19 14,573 14,784
John Hancock Life Insurance 1.71 6.31 550 577
------------- -------------
Total synthetics 168,365 172,036
------------- -------------
General account investments:
Monumental Life Insurance Co. 1.43 5.05 2,605 2,667
IRT Stable Value Fund 2.98 3.74 21,603 21,603
------------- -------------
Total general account investments 24,208 24,270
------------- -------------
Short-term investment fund:
Bank of New York 5,052 5,052
------------- -------------
Total guaranteed investment
contracts 197,625 201,358
Less synthetic wrappers -- (3,671)
Less difference between the fair value and
contract values on the nonsynthetic GICs -- (62) 1
------------- -------------
Total contract value of guaranteed
investment contracts $ 197,625 197,625
============= =============
1 The difference of $62,000 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, 2004 and 2003
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
DURATION INTEREST RATE CONTRACT FAIR
(YEARS) PERCENTAGE VALUE VALUE
------------- ------------- ------------- -------------
Security-backed investments:
Synthetics:
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
ING Life Ins & Ann Co. 1.90 2.99 5,886 6,013
John Hancock Life Insurance 1.93 5.80 745 794
------------- -------------
Total Synthetics 144,076 150,111
------------- -------------
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 -- (6,035)
Less difference between the fair value and
contract values on the nonsynthetic GICs -- (125) 2
------------- -------------
Total contract value of guaranteed
investment contracts $ 167,755 167,755
============= =============
2 The difference of $125,000 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.
(6) INVESTMENT IN MASTER TRUSTS
The Plan invests in two Master Trust Investment Accounts (MTIA), a
convertible bond fund managed by Advent Capital Management (Advent MTIA),
and a small cap equity fund managed by Alliance Bernstein Institutional
Investment Management (Bernstein MTIA). The Plan and the OPC Master
Retirement Trust (MRT) each owns an undivided interest in these MTIAs.
12 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
At December 31, 2004 and 2003, the Plan's investment in the assets of
Advent MTIA represented an individual interest of approximately 12% and
15%, 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
-----------------------------
2004 2003
------------ ------------
Investments at fair value as determined by quoted market price:
Short-term investments $ 464 --
Common stock 727 --
Preferred stock 9,393 6,974
Corporate bonds 16,365 15,713
------------ ------------
$ 26,949 22,687
============ ============
YEAR ENDED DECEMBER 31
-----------------------------
2004 2003
------------ ------------
Investment income (loss):
Net appreciation in fair value of investments:
Common stock $ 54 --
Preferred stock 91 1,209
Corporate bonds 379 2,827
------------ ------------
524 4,036
Interest and dividends 848 710
Less investment expenses (186) (171)
------------ ------------
$ 1,186 4,575
============ ============
13 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
Effective July 1, 2004, the Plan and the MRT combined their respective
Alliance Bernstein investment accounts into the Bernstein MTIA. At December
31, 2004, the Plan's investment in the assets of the Bernstein MTIA
represented an individual interest of approximately 49%. The following
table presents the aggregate fair value of investments held by, and
investment income earned by, the Bernstein MTIA, in which the Plan owns an
undivided interest, as stated above (dollar amounts in thousands):
DECEMBER 31
2004
------------
Investments at fair value as determined by quoted market price:
Short-term investments $ 9,462
Common stock 108,785
------------
$ 118,247
============
YEAR ENDED
DECEMBER 31
2004
------------
Investment income (loss):
Net appreciation in fair value of investments:
Common stock $ 29,218
Interest and dividends 568
Less investment expenses (370)
------------
$ 29,416
============
(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, 2004 and
2003 were insignificant.
(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 June 14, 2004, that the Plan and related trust are designed in
accordance with applicable sections of the IRC. 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.
14 (Continued)
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Notes to Financial Statements
December 31, 2004 and 2003
(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):
2004 2003
------------ ------------
Net assets available for benefits per the financial statements $ 1,242,799 1,066,658
Amounts allocated to withdrawing participants (1,534) (762)
------------ ------------
Net assets available for benefits per the Form 5500 $ 1,241,265 1,065,896
============ ============
The following is a reconciliation of benefits paid to participants per the
financial statements to the Form 5500 for the years ended December 31, 2004
and 2003 (dollar amounts in thousands):
2004 2003
------------ ------------
Benefits paid to participants per the financial statements $ 119,306 102,148
Amounts allocated to withdrawing participants
at December 31, 2004 1,534 --
Amounts allocated to withdrawing participants
at December 31, 2003 (762) 762
Amounts allocated to withdrawing participants
at December 31, 2002 -- (4,205)
------------ ------------
Benefits paid to participants per the Form 5500 $ 120,078 98,705
============ ============
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.
15
SCHEDULE 1
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2004
(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 $ 21,162
------------
Common stock:
ADC Telecommunications Inc. Common stock, 38,600 shares 103
Allstate Corp. Co. Common stock, 5,500 shares 285
Altria Group Inc. (fka Phillip Morris) Common stock, 4,500 shares 275
American Electric Pwr Co. Inc. Common stock, 9,100 shares 313
American International Group Inc. Common stock, 3,500 shares 230
Arrow Electr Inc. Common stock, 6,300 shares 153
Avnet Inc. Common stock, 7,000 shares 128
Bank America Corp. Common stock, 19,974 shares 939
Boeing Company Common stock, 7,400 shares 383
Borg Warner Inc. Common stock, 6,000 shares 325
BP PLC Spons ADR Common stock, 13,100 shares 765
Burl Northn Santa Fe Corp. Common stock, 4,500 shares 213
ChevronTexaco Corp. Common stock, 10,000 shares 525
Chubb Corp. Common stock, 7,000 shares 538
Citigroup Inc. Common stock, 23,700 shares 1,142
Comcast Corp. New Common stock, 12,100 shares 397
Conocophillips Common stock, 9,100 shares 790
Cooper Industries Inc. Common stock, 4,800 shares 326
CSX Corp. Common stock, 10,800 shares 433
Federal Home Loan Mtg. Corp. Common stock, 5,700 shares 420
Federal Natl Mtg. Assn. Common stock, 7,225 shares 515
Federated Dept. Stores Inc. Common stock, 4,600 shares 266
Flextronics Intl Ltd Common stock, 18,400 shares 254
General Electric Co. Common stock, 31,900 shares 1,164
Glaxo Smithkline PLC Common stock, 10,500 shares 498
Goldman Sachs Group Inc. Common stock, 2,300 shares 239
Hartford Financial Services Group Inc. Common stock, 2,700 shares 187
HCA Inc. Common stock, 10,200 shares 408
Hewlett Packard Co. Common stock, 36,300 shares 761
Ingram Micro Inc. Common stock, 11,575 shares 241
Interpublic Group of Companies Inc. Common stock, 12,300 shares 285
Jones Apparel Group Inc. Common stock, 6,800 shares 249
JPMorgan Chase & Co. Common stock, 19,400 shares 757
Kroger Co. Common stock, 13,300 shares 233
Lear Corp. Common stock, 6,200 shares 378
Lehman Bros Hldgs Inc. Common stock, 7,175 shares 628
Magna Intl Inc. Common stock, 3,300 shares 272
McDonald's Corp. Common stock, 12,800 shares 410
Meadwestva Co. Corp. Common stock, 11,464 shares 389
Medco Health Solutions Inc. Common stock, 11,900 shares 495
Metlife Inc. Common stock, 11,200 shares 454
Microsoft Corp. Common stock, 19,900 shares 532
National City Corp. Common stock, 15,700 shares 590
Norfolk Southern Corp. Common stock, 19,300 shares 698
Nortel Networks Corp. Common stock, 33,200 shares 116
** ***Occidental Petroleum Corp. Common stock, 9,004,424 shares 380,017 525,498
Office Depot Inc. Common stock, 22,500 shares 391
Pepsico Inc. Common stock, 9,700 shares 506
Pfizer Inc. Common stock, 13,340 shares 359
Procter & Gamble Co. Common stock, 4,800 shares 264
Safeway Inc. Common stock, 17,900 shares 353
Sanmina-Sci Corp. Common stock, 14,300 shares 121
Smurfit-Stone Container Corp. Common stock, 14,800 shares 276
Solectron Corp. Common stock, 46,425 shares 247
Sprint Corp. (Fon Group) Common stock, 14,000 shares 348
St. Paul Travelers Companies Inc. Common stock, 9,664 shares 358
16 (Continued)
SCHEDULE 1
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2004
(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
- ------- -------------------------------------------------- ------------------------------------------ ------------ ------------
Suntrust Banks Inc. Common stock, 5,200 shares $ 384
Target Corp. Common stock, 7,700 shares 400
Tech Data Corp. Common stock, 4,900 shares 222
Tellabs Inc. Common stock, 33,500 shares 288
Textron Inc. Common stock, 10,100 shares 745
Time Warner Inc. Common stock, 30,100 shares 585
Torchmark Corp. Common stock, 5,300 shares 303
Unilever NV NY Share F Common stock, 3,700 shares 247
V F Corp. Common stock, 1,400 shares 78
Wachovia Corp. Common stock, 10,000 shares 526
------------
Total common stock 552,201
------------
Participant loans:
** 1,647 participant loans, various
maturities, interest rates range
from 2.0% - 7.0%, balances
collateralized by participant account 17,942
------------
Guaranteed investment contracts:
Stable Value Fund:
Nonsynthetic guaranteed investment
contracts:
IRT Stable Value Fund #20949-087, Yield 4.05% 21,603
Short-term investment fund #894000 Maturity 1/1/05, Yield 2.05% 5,052
Monumental Life Ins Co. #SV-04253Q Maturity 6/5/06, Yield 5.05% 2,667
------------
Underlying assets 29,322
Less difference between the fair value
and contract values on the
nonsynthetic GICs (62)
------------
Total nonsynthetic guaranteed
investment contracts 29,260
------------
Synthetic guaranteed investment contracts:
John Hancock Life Insurance #9698, Yield 6.31% 577
Wrapper Synthetic Wrapper Agreement (27)
------------
Total Contract Value of John
Hancock Life Insurance 550
------------
Bank of America #01-204, Yield 4.32% 15,432
Wrapper Synthetic Wrapper Agreement (209)
------------
Total Contract Value of Bank
of America 15,223
------------
ING Life Ins & Ann Co. Contract #60032, Yield 3.81% 23,702
Wrapper Synthetic Wrapper Agreement (69)
------------
Total Contract Value of ING Life
Ins & Ann Co. Contract 23,633
------------
JP Morgan Chase #429939-MIA, Yield 5.07% 23,148
Wrapper Synthetic Wrapper Agreement (861)
------------
Total Contract Value of JP
Morgan Chase 22,287
------------
Metropolitan Life Insurance Co. #28821, Yield 5.09% 23,731
Wrapper Synthetic Wrapper Agreement (697)
------------
Total Contract Value of Metropolitan
Life Insurance Co. 23,034
------------
17 (Continued)
SCHEDULE 1
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4i - Schedule of Assets (Held at End of Year)
December 31, 2004
(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
- ------- -------------------------------------------------- ------------------------------------------ ------------ ------------
Monumental Life Ins Co. #00595TR, Yield 5.71% $ 31,573
Wrapper Synthetic Wrapper Agreement (825)
------------
Total Contract Value of Monumental
Life Ins Co. 30,748
------------
State Street Bank #103093, Yield 4.56% 35,172
Wrapper Synthetic Wrapper Agreement (729)
------------
Total Contract Value of State
Street Bank 34,443
------------
UBS AG #5152, Yield 4.19% 14,784
Wrapper Synthetic Wrapper Agreement (211)
------------
Total Contract Value of UBS AG 14,573
------------
ING Life Ins & Ann Co. Contract
Cash -- 23
US Treasury Maturity 8/15/07, Yield 2.75% 2,751
US Treasury Maturity 11/15/07, Yield 2.63% 1,143
US Treasury Maturity 11/15/04, Yield 5.88% --
------------
Underlying Assets 3,917
ING Life Ins & Ann Co.
Wrapper Synthetic Wrapper Agreement (43)
------------
Total Contract Value of ING Life
Ins & Ann Co. Contract 3,874
------------
Total guaranteed investment contracts 197,625
------------
Mutual funds:
MFO Causeway Cap Mgmt. Intl
Value Inst'l 1,430,817 shares 23,222
MFO Cmg Hi Yield Fd 439,210 shares 3,610
MFO Dodge & Cox Balanced Fd 871,848 shares 69,181
MFO Fidelity Magellan Fd Inc Open
End Fd 461,607 shares 47,910
MFO Hbr Fd Cap Appreciation Fd 449,583 shares 12,890
MFO Pimco Fds Pac Invt Mgmt Ser 1,136,601 shares 12,128
MFO Vanguard Emp Benefit
Index Fd 1,618,458 shares 170,812
MFO Vanguard Mid-Cap Index Inst'l
Fd 1,726,537 shares 27,055
MFO Vanguard Reit Index Inst'l Fund 1,961,741 shares 24,326
------------
Total mutual funds 391,134
------------
Plan Interest in Master Trusts:
Advent Unit Master Trust 299,952 shares 3,223
MFO Alliance Bernstein Small Cap 5,061,834 shares 57,740
------------
Total Plan Interest in Master Trusts 60,963
------------
Total $ 1,241,027
============
* 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 registered public accounting firm.
18
SCHEDULE 2
OCCIDENTAL PETROLEUM CORPORATION
SAVINGS PLAN
Schedule H, Line 4j - Schedule of Reportable Transactions
Year ended December 31, 2004
(Dollar amounts in thousands)
CURRENT
VALUE OF
EXPENSE ASSET
INCURRED ON
DESCRIPTION OF ASSET (INCLUDE WITH TRANS- NET GAIN
INTEREST RATE AND MATURITY IN PURCHASE SELLING LEASE TRANS- COST OF ACTION OR
IDENTITY OF PARTY INVOLVED CASE OF LOAN) PRICE PRICE RENTAL ACTION ASSET DATE (LOSS)
- ------------------------------ ------------------------------ -------- -------- -------- -------- -------- -------- --------
Series of transactions:
Invesco Oxy Invesco Units:
114 Acquisitions $ 60,267 -- -- -- 60,267 60,267 --
86 Dispositions -- 34,439 -- -- 30,759 34,439 3,680
Alliance Bernstein Inst Inv Alliance Bernstein Small Cap
Units:
Management 80 Acquisitions 57,233 -- -- -- 57,233 57,233 --
56 Dispositions -- 6,140 -- -- 6,139 6,140 1
* The Bank of New York Collective Short-Term
Investment Fund:
593 Acquisitions 105,117 -- -- -- 105,117 105,117 --
352 Dispositions -- 83,948 -- -- 83,948 83,948 --
* Represents a party-in-interest as defined by ERISA.
See accompanying report of independent registered public accounting firm.
19
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 June 24, 2005, with
respect to the statements of net assets available for benefits as of December
31, 2004 and 2003, the related statements of changes in net assets available for
benefits for the years then ended, and supplemental schedules, which report
appears in the December 31, 2004 annual report on Form 11-K of the Occidental
Petroleum Corporation Savings Plan.
/s/ KPMG LLP
Los Angeles, California
June 28, 2005