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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 20, 1998
OCCIDENTAL PETROLEUM CORPORATION
(Exact name of registrant as specified in its charter)
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<S> <C> <C>
DELAWARE 1-9210 95-4035997
(State or other jurisdiction (Commission (I.R.S. Employer
of incorporation) File Number) Identification No.)
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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 20, 1998, net income
of $186 million ($.51 per share) for the second quarter of 1998, compared with
net income of $158 million ($.41 per share) for the second quarter of 1997.
Earnings before special items were $47 million for the second quarter of 1998,
compared with $138 million for the same period in 1997. Sales were $1.5 billion
for the second quarter of 1998, compared with $2.2 billion for the same period
in 1997.
Oil and gas divisional earnings before special items were $90 million
for the second quarter of 1998, compared with $139 million for the second
quarter of 1997. Results for the second quarter of 1998 were $380 million after
including pretax gains of $290 million related to the sale of nonstrategic U.S.
oil and gas assets. The decrease in earnings before special items primarily
reflects the negative impact of lower worldwide crude oil prices, partially
offset by higher natural gas prices and increased crude oil production in the
eastern hemisphere and United States.
Chemical divisional earnings before special items for the second quarter
of 1998 were $90 million, compared with $189 million for the same period of
1997. Results for the second quarter of 1998 were $60 million after including
$30 million pretax reorganization and other charges. These charges reflect the
downsizing due to the petrochemicals partnership with Equistar. The decline in
1998 earnings before special items resulted primarily from lower prices for
chlorine, EDC and petrochemical products, partially offset by higher caustic
soda prices.
Interest expense in the second quarter of 1998 was $118 million,
compared with $101 million for the second quarter of 1997. The increase in
interest expense is primarily attributable to temporarily higher debt levels
used to fund a portion of the Elk Hills acquisition.
For the first six months of 1998, Occidental's net income totaled $363
million ($1.01 per share), compared with net income of $337 million ($.88 per
share) for the first six months of 1997. The six months earnings before special
items were $136 million for 1998, compared with $265 million for 1997. Sales
were $3.2 billion for the six months of 1998, compared with $4.1 billion for the
same period of 1997.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
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<CAPTION>
Second Quarter Six Months
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Periods Ended June 30 1998 1997(b) 1998 1997(b)
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<S> <C> <C> <C> <C>
DIVISIONAL NET SALES
Oil and gas $ 739 $ 1,055 $ 1,479 $ 1,897
Chemical 804 1,103 1,764 2,178
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$ 1,543 $ 2,158 $ 3,243 $ 4,075
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DIVISIONAL EARNINGS
Oil and gas $ 380 $ 139 $ 612 $ 386
Chemical 60 189 218 281
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440 328 830 667
UNALLOCATED CORPORATE ITEMS
Interest expense, net (118) (101) (230) (202)
Income taxes (a) (116) (62) (242) (147)
Other (20) (27) (33) (53)
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INCOME FROM CONTINUING OPERATIONS 186 138 325 265
Discontinued operations, net -- 20 38 72
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NET INCOME 186 158 363 337
Preferred dividends (5) (23) (9) (46)
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EARNINGS APPLICABLE TO COMMON STOCK $ 181 $ 135 $ 354 $ 291
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BASIC EARNINGS PER COMMON SHARE (c)
Income from continuing operations $ .51 $ .35 $ .90 $ .66
Discontinued operations, net -- .06 .11 .22
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BASIC EARNINGS(LOSS) PER COMMON SHARE $ .51 $ .41 $ 1.01 $ .88
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DILUTED EARNINGS PER COMMON SHARE (c)
Income from continuing operations $ .49 $ .34 $ .88 $ .64
Discontinued operations, net -- .05 .10 .20
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DILUTED EARNINGS(LOSS) PER COMMON SHARE $ .49 $ .39 $ .98 $ .84
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AVERAGE COMMON SHARES OUTSTANDING (c) 359.1 330.6 351.8 330.3
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(a) Includes an adjustment to corporate taxes, as quarterly consolidated
taxes are computed in accordance with APB Opinion No. 28 and hence are
based on projections of total-year income and taxes. Also, includes an
offset for credits in lieu of U.S. federal income taxes allocated to the
divisions. Divisional earnings have benefited from credits allocated by
$3 million and $6 million at oil and gas and chemical, respectively, in
the second quarter of 1998 and by $3 million and $7 million at oil and
gas and chemical, respectively, in the second quarter of 1997.
(b) 1997 results have been restated to reflect the adoption of SFAS 131,
"Disclosures about Segments of an Enterprise and Related Information"
and to reflect MidCon as a discontinued operation.
(c) The 1998 earnings per share calculation includes the effect of 16.6
million shares of preferred stock being converted into 37.3 million
shares of common stock, primarily in the first quarter of 1998.
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SUMMARY OF OPERATING STATISTICS
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<CAPTION>
Second Quarter Six Months
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Periods Ended June 30 1998 1997 1998 1997
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<S> <C> <C> <C> <C>
NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and condensate
(thousands of barrels) 75 58 78 58
Natural gas liquids
(thousands of barrels) 9 10 7 11
Natural gas
(millions of cubic feet) 578 630 603 612
Other Western Hemisphere
Crude oil and condensate
(thousands of barrels) 79 119 86 121
Eastern Hemisphere
Crude oil and condensate
(thousands of barrels) 143 107 137 101
Natural gas
(millions of cubic feet) 124 112 131 119
CAPITAL EXPENDITURES (millions) $ 306 $ 393 $ 586 $ 655
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DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 221 $ 207 $ 451 $ 411
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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 21, 1998 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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