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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED) JULY 17, 1997
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-9210 95-4035997
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
10889 WILSHIRE BOULEVARD, LOS ANGELES, CALIFORNIA 90024
(Address of principal executive offices) (ZIP code)
Registrant's telephone number, including area code:
(310) 208-8800
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Item 5. Other Events
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Occidental Petroleum Corporation reported on July 17, 1997 net income of
$158 million ($.41 per share) for the second quarter of 1997, compared with net
income of $181 million ($.49 per share) for the second quarter of 1996. The
second quarter of 1996 results included a $130 million favorable litigation
settlement, partially offset by charges of $75 million for additional
environmental reserves and related tax effects. Earnings before special items
were $153 million for the second quarter of 1996. Sales were $2.7 billion for
the second quarter of 1997, compared with $2.5 billion for the second quarter of
1996.
Oil and gas divisional earnings were $133 million for the second quarter of
1997, compared with $144 million for the second quarter of 1996. The decrease in
1997 earnings resulted primarily from lower domestic natural gas and worldwide
crude oil prices, partially offset by increased gas production and lower
exploration expense.
Natural gas transmission divisional earnings for the second quarter of 1997
were $39 million, compared with $51 million for the second quarter of 1996. The
decline in 1997 earnings resulted primarily from lower gas sales margins.
Chemical divisional earnings for the second quarter of 1997 were $184
million, compared with earnings before special items of $160 million for the
second quarter of 1996. The 1996 second quarter results were $212 million,
after inclusion of a favorable litigation settlement, partially offset by
charges for additional environmental reserves and the related state tax effects.
The improvement in 1997 earnings before special items resulted primarily from
improved profit margins in the chloro-vinyls and petrochemicals business areas
and higher profits from specialty chemicals, partially offset by decreased
caustic soda profit margins.
Interest expense in the second quarter of 1997 was $101 million, compared
with $112 million for the second quarter of 1996. The decline in interest
expense was primarily attributable to lower average debt levels as a result of
early debt retirements in 1996 and lower rates. Unallocated other expenses were
$13 million for the second quarter of 1997, compared with $2 million for the
same period in 1996. The higher expense in 1997 was due primarily to lower
equity earnings from unconsolidated oil and gas investments.
For the first six months of 1997, Occidental's net income totaled $337
million ($.88 per share), compared with net income of $315 million ($.84 per
share) for the first six months of 1996. Sales were $5.5 billion for the first
six months of 1997, compared with $5.0 billion for the same period in 1996.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
Second Quarter Six Months
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Periods Ended June 30 1997 1996 1997 1996
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DIVISIONAL NET SALES
Oil and gas $ 1,055 $ 878 $ 1,897 $ 1,632
Natural gas transmission 565 521 1,419 1,223
Chemical 1,103 1,058 2,178 2,126
Other (6) - (16) (2)
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$ 2,717 $ 2,457 $ 5,478 $ 4,979
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DIVISIONAL EARNINGS
Oil and gas $ 133 $ 144 $ 361 $ 305
Natural gas transmission 39 51 130 172
Chemical 184 212 276 330
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356 407 767 807
UNALLOCATED CORPORATE ITEMS
Interest expense, net (101) (112) (202) (242)
Income taxes (a) (84) (112) (209) (211)
Other (13) (2) (19) (9)
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INCOME BEFORE EXTRAORDINARY ITEMS 158 181 337 345
Extraordinary gain(loss), net - - - (30)
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NET INCOME 158 181 337 315
Preferred dividends (23) (23) (46) (46)
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EARNINGS APPLICABLE TO COMMON STOCK $ 135 $ 158 $ 291 $ 269
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PRIMARY EARNINGS PER COMMON SHARE
Income before extraordinary items $ .41 $ .49 $ .88 $ .93
Extraordinary gain(loss), net - - - (.09)
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PRIMARY EARNINGS(LOSS) PER COMMON
SHARE $ .41 $ .49 $ .88 $ .84
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FULLY DILUTED EARNINGS PER COMMON SHARE
Income before extraordinary items $ .39 $ .47 $ .84 $ .91
Extraordinary gain(loss), net - - - (.09)
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FULLY DILUTED EARNINGS(LOSS) PER
COMMON SHARE $ .39 $ .47 $ .84 $ .82
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AVERAGE COMMON SHARES OUTSTANDING 330.6 322.4 330.3 320.9
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(a) Includes an adjustment to corporate taxes, as quarterly consolidated taxes
are computed in accordance with Interpretation No. 18 of APB Opinion No. 28
and hence are based on projections of total-year income and taxes. Also,
includes an offset for charges and credits in lieu of U.S. federal income
taxes allocated to the divisions. Divisional earnings in the second quarter
of 1997 have benefited from credits allocated by $3 million, $12 million
and $7 million at oil and gas, natural gas transmission and chemical,
respectively. Divisional earnings in the second quarter of 1996 have
benefited from credits allocated by $4 million, $12 million and $7 million
at oil and gas, natural gas transmission and chemical, respectively.
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SUMMARY OF OPERATING STATISTICS
Second Quarter Six Months
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Periods Ended June 30 1997 1996 1997 1996
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NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and condensate
(thousands of barrels) 58 54 58 56
Natural gas liquids
(thousands of barrels) 10 11 11 11
Natural gas
(millions of cubic feet) 630 611 612 613
Other Western Hemisphere
Crude oil and condensate
(thousands of barrels) 119 130 121 129
Eastern Hemisphere
Crude oil and condensate
(thousands of barrels) 107 105 101 104
Natural gas
(millions of cubic feet) 112 120 119 128
NATURAL GAS TRANSMISSION DELIVERIES
Sales (billions of cubic feet) 181 150 391 343
Transportation
(billions of cubic feet) 299 326 741 845
CAPITAL EXPENDITURES (millions) $ 407 $ 275 $ 683 $ 508
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DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 246 $ 227 $ 488 $ 451
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
OCCIDENTAL PETROLEUM CORPORATION
(Registrant)
DATE: July 18, 1997 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice
President and Controller
(Chief Accounting and Duly
Authorized Officer)
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