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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) OCTOBER 21, 1998
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 October 21, 1998, net income
of $38 million ($.10 per share) for the third quarter of 1998, compared with net
income of $157 million ($.40 per share) for the third quarter of 1997. Earnings
before special items were $3 million for the third quarter of 1998, compared
with $184 million for the same period in 1997. Sales were $1.7 billion for the
third quarter of 1998, compared with $2.0 billion for the third quarter of 1997.
Oil and gas divisional earnings before special items were $61 million for
the third quarter of 1998, compared with $144 million for the third quarter of
1997. Results for the third quarter of 1998 were $156 million after including
gains of $137 million primarily related to the sale of the stock of Occidental
Netherlands, Inc., a $30 million charge for the write-off of its investment in
certain exploration projects and a $12 million charge for the recently announced
reorganization. The decrease in earnings before special items primarily reflects
the negative impact of lower worldwide crude oil prices, partially offset by
increased crude oil production in the eastern hemisphere and United States.
Additionally, the swap of Occidental's Malaysia and Philippines assets for Royal
Dutch/Shell Group's Yemen and Colombia assets, completed in the third quarter,
should result in an increase in oil production in the fourth quarter.
Chemical divisional earnings for the third quarter of 1998 were $62
million, compared with $209 million for the third quarter of 1997. The decline
in 1998 earnings resulted primarily from lower prices for chlorine, EDC, PVC and
petrochemical products, partially offset by higher caustic soda prices and lower
energy and raw material prices.
For the first nine months of 1998, Occidental's net income totaled $401
million ($1.11 per share), compared with net income of $494 million ($1.29 per
share) for the first nine months of 1997. The nine months earnings before
special items were $139 million for 1998, compared with $449 million for 1997.
Sales were $4.9 billion for the nine months of 1998, compared with $6.1 billion
for the same period of 1997.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
<TABLE>
<CAPTION>
Third Quarter Nine Months
------------------------ ------------------------
Periods Ended September 30 1998 1997(b) 1998 1997(b)
================================= ========= ========= ========= =========
<S> <C> <C> <C> <C>
DIVISIONAL NET SALES
Oil and gas $ 1,030 $ 883 $ 2,509 $ 2,780
Chemical 631 1,124 2,395 3,302
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$ 1,661 $ 2,007 $ 4,904 $ 6,082
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DIVISIONAL EARNINGS
Oil and gas $ 156 $ 144 $ 768 $ 530
Chemical 62 209 280 490
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218 353 1,048 1,020
UNALLOCATED CORPORATE ITEMS
Interest expense, net (106) (100) (336) (302)
Income taxes (a) (49) (17) (291) (164)
Other (25) (106) (58) (159)
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INCOME FROM CONTINUING OPERATIONS 38 130 363 395
Discontinued operations, net - 27 38 99
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NET INCOME 38 157 401 494
Preferred dividends (4) (21) (13) (67)
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EARNINGS APPLICABLE TO COMMON STOCK $ 34 $ 136 $ 388 $ 427
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BASIC EARNINGS PER COMMON SHARE (c)
Income from continuing operations $ .10 $ .32 $ 1.00 $ .99
Discontinued operations, net - .08 .11 .30
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BASIC EARNINGS PER COMMON SHARE $ .10 $ .40 $ 1.11 $ 1.29
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DILUTED EARNINGS PER COMMON SHARE (c)
Income from continuing operations $ .10 $ .31 $ .99 $ .96
Discontinued operations, net - .07 .10 .27
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DILUTED EARNINGS PER COMMON SHARE $ .10 $ .38 $ 1.09 $ 1.23
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AVERAGE COMMON SHARES OUTSTANDING (c) 350.0 335.6 351.2 331.8
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</TABLE>
(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 are shown before U.S. tax effect,
but have benefited from credits allocated by $2 million and $7 million
at oil and gas and chemical, respectively, in the third quarter of 1998
and by $3 million and $7 million at oil and gas and chemical,
respectively, in the third 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 calculations include the effect of 17.1
million shares of preferred stock being converted into 38.6 million
shares of common stock, primarily in the first quarter of 1998.
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SUMMARY OF OPERATING STATISTICS
<TABLE>
<CAPTION>
Third Quarter Nine Months
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Periods Ended September 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) 69 57 75 58
Natural gas liquids
(thousands of barrels) 9 7 8 10
Natural gas
(millions of cubic feet) 603 587 603 603
Other Western Hemisphere
Crude oil and condensate
(thousands of barrels) 79 107 84 116
Eastern Hemisphere
Crude oil and condensate
(thousands of barrels) 164 108 146 103
Natural gas
(millions of cubic feet) 54 96 105 111
CAPITAL EXPENDITURES (millions) $ 254 $ 353 $ 840 $ 1,008
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DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 202 $ 187 $ 653 $ 598
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</TABLE>
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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: October 22, 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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