LOS ANGELES, Jan. 24, 2001 (PRIMEZONE) -- Occidental Petroleum Corporation (NYSE:OXY) announced earnings before special items for the fourth quarter 2000 of $349 million ($0.94 per share), an increase of greater than 80 percent, compared with $192 million ($0.52 per share) for the fourth quarter of 1999.
Net income for the fourth quarter of 2000 was $333 million ($0.90 per share) compared with $383 million ($1.04 per share) for the corresponding period of 1999. The fourth quarter 2000 results included several special items which are discussed below in the respective operating sector's results. Sales for the fourth quarter of 2000 were $3.9 billion, a 50 percent increase from sales of $2.6 billion for the same period in 1999.
Occidental's total net income for 2000 was $1.6 billion ($4.26 per share), compared with $448 million ($1.24 per share) for 1999. Earnings before special items were $1.3 billion ($3.60 per share) for 2000, compared with $253 million ($0.69 per share) for 1999. Sales increased to $13.6 billion for 2000 from $7.8 billion for 1999.
Total Debt Reduced by $2.8 Billion
In announcing the results, Dr. Ray R. Irani, chairman and chief executive officer, said, "Earnings before special items for the entire year were $1.3 billion, the highest annual earnings in the company's history. The resulting free cash flow generated, along with proceeds from asset sales, enabled Occidental to significantly reduce total debt. Total debt at year-end was $6.4 billion, a reduction of $700 million from the end of the third quarter and $2.8 billion from the $9.2 billion pro forma level following the Altura acquisition."
Dr. Irani also said, "Our year-end debt to capitalization ratio of 57 percent is the lowest in nearly a decade and we expect to drive that number lower in 2001."
Oil and Gas
The oil and gas sector earned $763 million before special items, compared with $331 million for the fourth quarter of 1999. The improvement is primarily the result of higher worldwide crude oil and natural gas prices combined with increased domestic oil production volumes. Worldwide oil and gas production on a barrel of oil equivalent (BOE) basis was up more than 22 percent for the fourth quarter and over 8 percent for the year, compared with the same periods in 1999. The net increase in domestic production volumes, resulting from the acquisitions of Altura and THUMS in the second quarter of 2000, more than offsets lower international production mainly due to asset sales.
Oil and gas earnings after special items were $770 million for the fourth quarter of 2000, compared with $756 million for the fourth quarter of 1999. The 2000 results included a $7 million tax benefit related to the sale of an office building. The 1999 results included: a $488 million benefit, net of tax, from the Chevron settlement; a $29 million loss, net of tax, related to the sale of producing assets in Peru; $25 million pre-tax charges for claims and settlements; and a $9 million charge for the write-down of a real estate investment to market value. Oil and gas earnings for the total year were $2.4 billion, the highest in Occidental's history.
Chemicals
The chemical sector results before special items were a loss of $51 million for the fourth quarter of 2000, compared with earnings before special items of $70 million for the fourth quarter of 1999. The decline in earnings reflects higher energy and feedstock costs, lower sales volumes, and lower earnings from equity investments.
Chemical results after special items for the fourth quarter of 2000 were a loss of $55 million, compared with a loss of $126 million for the fourth quarter of 1999. The 2000 results include the following special items: a $13 million after-tax gain, related to the sale of the Durez business; and other net charges of $17 million mainly related to the write-down or disposition of various assets. The 1999 results included pre-tax charges of $196 million to write-down impaired assets and provide for claims and settlements. Chemical earnings before special items for 2000 were $293 million compared with $147 million for 1999.
Other
Corporate unallocated other expenses were $92 million for the fourth quarter of 2000 compared with $12 million for the same period of 1999. The 2000 period included a $39 million preferred distribution to the Occidental Permian partners which is essentially offset by $38 million of interest income included in interest expense, net, and a $17 million litigation settlement.
The fourth quarter of 1999 net income of $383 million was after an extraordinary loss of $104 million from retirement of debt.
Forward-looking statements and estimates regarding exploration and production activities, oil, gas and commodity chemical prices, operating costs and their related earnings effects in this release are based on assumptions concerning market, competitive, regulatory, environmental, operational and other conditions. Actual results could differ materially as a result of factors discussed in Occidental's Annual Report on Form 10-K.
SUMMARY OF DIVISIONAL NET SALES AND EARNINGS
(Millions, except per-share amounts)
Fourth Quarter Twelve Months
Periods ended December 31 2000 1999 2000 1999
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DIVISIONAL NET SALES (a)
Oil and gas $ 3,145 $ 1,626 $ 9,779 $ 4,599
Chemical 797 942 3,795 3,221
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Net sales $ 3,942 $ 2,568 $13,574 $ 7,820
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DIVISIONAL EARNINGS (LOSS)
Oil and gas $ 770 $ 756 $ 2,417 $ 1,267
Chemical (55) (126) 169 (37)
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715 630 2,586 1,230
Unallocated Corporate Items
Interest expense, net (b) (80) (111) (380) (468)
Income taxes (c) (193) (3) (861) (68)
Trust preferred distributions
& other (17) (17) (67) (62)
Other (d) (92) (12) 291 (64)
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Income Before Extraordinary
Items and Effect of Changes
in Accounting Principles 333 487 1,569 568
Extraordinary gain/(loss), net - (104) 1 (107)
Cumulative effect of changes
in accounting principles,
net - - - (13)
------- ------- ------- -------
Net Income 333 383 1,570 448
Effect of repurchase of Trust
Preferred Securities - 1 1 1
Preferred dividends - - - (7)
------- ------- ------- -------
EARNINGS APPLICABLE TO COMMON
STOCK $ 333 $ 384 $ 1,571 $ 442
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BASIC AND DILUTED EARNINGS
PER COMMON SHARE
Income before extraordinary
items and effect of changes
in accounting principles $ 0.90 $ 1.33 $ 4.26 $ 1.58
Extraordinary gain/(loss), net - (.29) - (.30)
Cumulative effect of changes
in accounting principles,
net - - - (.04)
------- ------- ------- -------
$ 0.90 $ 1.04 $ 4.26 $ 1.24
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AVERAGE BASIC COMMON SHARES
OUTSTANDING 369.8 367.7 369.0 355.4
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Footnotes:
(a) Occidental has implemented EITF Issue No. 00-10, "Shipping and
Handling Fees and Costs" effective with the fourth quarter of 2000. As
a result of this adoption, Occidental has added to both revenues and
costs of sales amounts related to transportation costs that previously
had been accounted for as deductions from revenues. There is no effect
on income. Revenues have been increased as follows:
Fourth Quarter Twelve Months
2000 1999 2000 1999
==== ==== ==== ====
Oil and gas 9 9 29 27
Chemical 45 53 216 183
---- ---- ---- ----
Total 54 62 245 210
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(b) The fourth quarter and twelve months year-to-date 2000 include $38
million and $106 million, respectively, interest income on notes
receivable from Altura partners.
(c) Includes an offset for charges and credits in lieu of U.S. federal
income taxes allocated to the divisions. Oil and gas divisional
earnings have been impacted by a credit of $7 million in the fourth
quarter of 2000 and a charge of $260 million in the fourth quarter of
1999. The oil and gas fourth quarter of 2000 amount included a $7
million credit for the sale of an office building. 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
properties. Chemical divisional earnings have been impacted by a
charge of $5 million in the fourth quarter of 2000 and a credit of $4
million in the fourth quarter of 1999, respectively. The Chemical
fourth quarter of 2000 amount included a $21 million charge related to
the sale of the Durez business and a $12 million credit for the
shutdown and liquidation of a chemical operation in Thailand.
(d) The fourth quarter and twelve months year-to-date 2000 include
preferred distributions to the Occidental Permian partners of $39
million and $107 million, respectively. This is essentially offset by
the interest income discussed in (b) above.
SUMMARY OF OPERATING STATISTICS
Fourth Quarter Twelve Months
Periods ended December 31 2000 1999 2000 1999
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NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Liquids (MBBL)
California 75 52 70 52
Permian 136 13 101 13
US Other - 8 1 8
------- ------- ------- -------
Total 211 73 172 73
Natural Gas (MMCF)
California 316 303 306 287
Hugoton 166 161 168 172
Permian 162 53 119 55
US Other - 138 66 148
------- ------- ------- -------
Total 644 655 659 662
Latin America
Crude oil (MBBL)
Colombia 27 38 32 43
Ecuador 12 14 17 15
Peru - 26 - 38
------- ------- ------- -------
Total 39 78 49 96
Eastern Hemisphere
Crude oil (MBBL)
Oman 9 13 9 15
Pakistan 5 5 6 5
Qatar 48 49 49 58
Russia 27 26 26 27
Yemen 31 33 32 32
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Total 120 126 122 137
Natural Gas (MMCF)
Bangladesh - - - 8
Pakistan 49 52 49 44
------- ------- ------- -------
Total 49 52 49 52
Barrels of Oil Equivalent (MBOE) 485 395 461 425
CAPITAL EXPENDITURES (millions) $ 344 $ 218 $ 952 $ 601
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DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 214 $ 207 $ 901 $ 805
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*T*T
CONTACT: Howard Collins (media)
310-443-6523
Kenneth J. Huffman (investors)
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