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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) JANUARY 25, 2000
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
- ------ ------------
Occidental Petroleum Corporation announced net income of $383 million
($1.04 per share) for the fourth quarter of 1999, compared with a net loss of
$38 million ($.12 per share) for the fourth quarter of 1998. The 1999 results
included the effects of a number of special items discussed below in their
respective business segments.
Earnings before special items were $192 million for the fourth quarter of
1999 compared with a loss before special items of $35 million for the fourth
quarter of 1998. Sales were $2.5 billion for the fourth quarter of 1999,
compared with $1.7 billion for the same period in 1998.
Oil and Gas
-----------
Oil and gas divisional earnings before special items were $329 million for
the fourth quarter of 1999, compared with $36 million for the fourth quarter of
1998, primarily as a result of higher energy prices and lower exploration,
production and overhead costs, partially offset by lower crude oil production
volumes.
Oil and gas results after special items for the fourth quarter of 1999 were
$754 million. The 1999 results include the $488 million benefit, net of tax,
from the Chevron settlement; a $29 million loss, net of tax, related to the
previously announced sale of our Peru producing assets; a $25 million pre-tax
charge for claims and settlements and a $9 million pre-tax charge for the write
down of an office building investment to market value.
Chemicals
---------
Chemical divisional earnings before special items were $66 million for the
fourth quarter of 1999, compared with a loss of $14 million for the fourth
quarter of 1998, primarily due to higher prices for chlorine, EDC and PVC resins
which were partially offset by lower caustic soda prices and higher raw material
costs.
Chemical results after special items for the fourth quarter of 1999 were a
loss of $130 million. The 1999 results include a $159 million pre-tax charge to
write down various domestic and foreign impaired assets, a $28 million pre-tax
charge for Occidental's share of asset writedowns in Equistar, Occidental's
petrochemicals joint venture investment, and a $9 million pre-tax charge for
claims and settlements.
Other
-----
Substantially all of the proceeds from the Chevron settlement were used to
extinguish high cost outstanding debt through calls and tenders. These
previously announced debt extinguishments resulted in an after-tax extraordinary
loss of $104 million ($.29 per share) in the fourth quarter of 1999.
For the total year 1999, Occidental's net income was $448 million ($1.24
per share), compared with net income of $363 million ($.99 per share) for the
total year 1998. The twelve months results before special items were net income
of $253 million, compared with earnings before special items of $104 million in
1998. Sales were $7.6 billion for the total year of 1999, compared with sales of
$6.6 billion for the same period of 1998.
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
<TABLE>
<CAPTION>
Fourth Quarter Twelve Months
--------------------- ---------------------
Periods Ended December 31 1999 1998 1999 1998
==================================== ========= ========= ========= =========
<S> <C> <C> <C> <C>
DIVISIONAL NET SALES
Oil and Gas $ 1,617 $ 1,112 $ 4,572 $ 3,621
Chemical 889 580 3,038 2,975
--------- --------- --------- ---------
$ 2,506 $ 1,692 $ 7,610 $ 6,596
==================================== ========= ========= ========= =========
DIVISIONAL EARNINGS
Oil and Gas $ 754 $ 36 $ 1,261 $ 804
Chemical (130) (14) (52) 266
--------- --------- --------- ---------
624 22 1,209 1,070
UNALLOCATED CORPORATE ITEMS
Interest expense, net (111) (115) (468) (451)
Income taxes (a) (3) 63 (68) (228)
Trust preferred distributions (11) -- (41) --
Other (12) (8) (64) (66)
--------- --------- --------- ---------
INCOME (LOSS) FROM CONTINUING
OPERATIONS 487 (38) 568 325
Discontinued operations, net -- -- -- 38
Extraordinary loss, net (b) (104) -- (107) --
Cumulative effect of changes in
accounting principles, net (c) -- -- (13) --
--------- --------- --------- ---------
NET INCOME (LOSS) 383 (38) 448 363
Effect of repurchase of Trust
Preferred Securities (d) 1 -- 1 --
Preferred dividends -- (4) (7) (17)
--------- --------- --------- ---------
EARNINGS (LOSS) APPLICABLE TO
COMMON STOCK $ 384 $ (42) $ 442 $ 346
========= ========= ========= =========
EARNINGS PER COMMON SHARE
BASIC
Income (loss) from continuing
operations $ 1.33 $ (.12) $ 1.58 $ .88
Discontinued operations, net -- -- -- .11
Extraordinary loss, net (b) (.29) -- (.30) --
Cumulative effect of changes in
accounting principles, net (c) -- -- (.04) --
--------- --------- --------- ---------
BASIC EARNINGS (LOSS) PER
COMMON SHARE $ 1.04 $ (.12) $ 1.24 $ .99
========= ========= ========= =========
DILUTED
Income (loss) from continuing
operations $ 1.33 $ (.12) $ 1.58 $ .88
Discontinued operations, net -- -- -- .11
Extraordinary loss, net (b) (.29) -- (.30) --
Cumulative effect of changes in
accounting principles, net (c) -- -- (.04) --
--------- --------- --------- ---------
DILUTED EARNINGS (LOSS) PER
COMMON SHARE $ 1.04 $ (.12) $ 1.24 $ .99
========= ========= ========= =========
AVERAGE COMMON SHARES OUTSTANDING 367.7 347.1 355.4 350.2
==================================== ========= ========= ========= =========
</TABLE>
See footnotes on following page.
2
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SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
<TABLE>
<CAPTION>
Fourth Quarter Twelve Months
--------------------- ---------------------
Periods Ended December 31 1999 1998 1999 1998
==================================== ========= ========= ========= =========
<S> <C> <C> <C> <C>
NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and condensate
(thousands of barrels) 64 67 64 73
Natural gas liquids
(thousands of barrels) 9 9 9 8
Natural gas
(millions of cubic feet) 655 645 662 614
Other Western Hemisphere
Crude oil and condensate
(thousands of barrels) 78 107 96 90
Eastern Hemisphere
Crude oil and condensate
(thousands of barrels) 126 163 137 151
Natural gas
(millions of cubic feet) 52 41 52 89
CAPITAL EXPENDITURES (millions) $ 218 $ 234 $ 601 $ 1,074
========= ========= ========= =========
DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 207 $ 182 $ 805 $ 835
==================================== ========= ========= ========= =========
</TABLE>
(a) Includes an offset for charges and credits in lieu of U.S. federal income
taxes allocated to the divisions. Divisional earnings have been impacted
from allocations of a $260 million charge and a $4 million credit at Oil
and Gas and Chemical, respectively, in the fourth quarter of 1999 and by
credits of $4 million and $6 million at Oil and Gas and Chemical,
respectively, in the fourth quarter of 1998. The Oil and Gas fourth quarter
of 1999 amount included a charge related to the Chevron litigation
settlement and a credit for the loss on Peru producing assets.
(b) The fourth quarter of 1999 includes the early extinguishment of $274
million principal of 7 percent debentures due 2011, $240 million principal
of 10-1/8 percent senior notes due November 15, 2001 and $138 million
principal of 11-1/8 percent senior notes due August 1, 2010. The impact of
these extinguishments is a $104 million charge, which is net of a $60
million income tax benefit. The twelve months of 1999 also includes the 2nd
quarter early extinguishment of $69 million principal of 11-1/8 percent
senior debentures. The impact of this extinguishment was a $3 million
charge, which is net of a $1 million income tax benefit.
(c) The twelve months of 1999 reflects the adoption of SOP 98-5 "Reporting on
the Costs of Start-Up Activities", which requires expensing of start-up
costs as incurred and those costs that are currently capitalized at date of
adoption. The impact of SOP 98-5 is a $15 million charge which is net of an
$8 million income tax benefit. Also reflects the adoption of EITF 98-10
"Accounting for Contracts Involved in Energy Trading and Risk Management
Activities", which requires energy trading contracts to be marked to
market. The impact of EITF 98-10 is a $2 million credit which is net of a
$1 million income tax charge.
(d) The fourth quarter of 1999 includes a $1 million gain, net of tax, related
to the repurchase of 937,436 shares of 8.16 percent Trust Preferred
Securities.
3
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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: January 26, 2000 S. P. Dominick, Jr.
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S. P. Dominick, Jr., Vice President and Controller
(Chief Accounting and Duly Authorized Officer)
