LOS ANGELES, Feb. 4, 2002 (PRIMEZONE) -- Occidental Petroleum Corporation (NYSE:OXY) announced earnings before special items for the fourth quarter 2001 were $35 million ($0.09 per share), compared with $349 million ($0.94 per share) for the same period a year ago. Results for the fourth quarter of 2001 were a loss of $247 million ($0.66 per share), compared with income of $333 million ($0.90 per share) for the same period of 2000. Sales for the fourth quarter of 2001 were $2.4 billion, compared with $3.9 billion for the same period in 2000.
For the year 2001, earnings before special items were $1.328 billion ($3.57 per share), compared with $1.326 billion ($3.60 per share) for 2000. Occidental's net income for 2001 was $1.2 billion ($3.10 per share), compared with $1.6 billion ($4.26 per share) for 2000. Sales increased to $14.0 billion for 2001 from $13.6 billion for 2000.
In announcing the results, Dr. Ray R. Irani, chairman and chief executive officer, said, "Net income for 2001 was the second highest in Occidental's history, with earnings per share before special items nearly matching our record setting 2000 performance. Oil and gas operating earnings were the highest in our history. We replaced 138-percent of our worldwide oil and gas production at a cost of $4.54 per barrel of oil equivalent. We also appreciably strengthened our balance sheet by reducing our total debt to its lowest level in 15 years, increasing our equity by 18-percent and thereby bringing our debt-to-capitalization ratio down to 46-percent."
The fourth quarter 2001 included a $240 million after-tax charge, reflecting the effect of the agreement in principle to sell Occidental's interest in Equistar, a $60 million pre-tax charge for environmental remediation expenses, an $11 million pre-tax charge to idle a chemical facility in Texas, and a $5 million extraordinary loss resulting from early debt extinguishments. Also included in the fourth quarter 2001 was a $14 million benefit resulting from lower effective state tax rates. The fourth quarter 2000 included net after-tax charges of $16 million.
Oil and Gas
Oil and gas segment earnings before special items were $166 million for the fourth quarter 2001, compared with $763 million for the same period in 2000. Lower prices for worldwide crude oil and domestic natural gas accounted for approximately $500 million of the decline in earnings.
Oil and gas segment earnings for the fourth quarter of 2001 were also $166 million, compared with $770 million for 2000.
Chemicals
Chemical segment results before special items were a loss of $4 million for the fourth quarter 2001, compared with a loss of $51 million for the fourth quarter 2000. The improvement in results reflects lower feedstock and energy costs, partially offset by lower sales prices for chlorine, EDC and PVC.
Chemical segment results for the fourth quarter 2001 were a loss of $413 million and included a $412 million pre-tax charge reflecting the effect of the agreement in principle to sell Occidental's interest in Equistar and an $11 million charge to idle a chlor-alkali chemical facility in Deer Park, Texas, partially offset by a $14 million benefit resulting from lower effective state tax rates. Fourth quarter 2000 chemical results were a loss of $55 million and included net charges of $17 million mainly related to the write-down or disposition of various assets, partially offset by a $13 million after-tax gain related to the sale of a business.
Forward-looking statements and estimates regarding exploration and production activities, oil, gas and commodity chemical prices and their related earnings effects, and cost reductions, as well as pro-forma estimates 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 SEGMENT NET SALES AND EARNINGS
(Millions, except per-share amounts)
Fourth Quarter Twelve Months
Periods Ended December 31 2001 2000 2001 2000
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SEGMENT NET SALES
Oil and gas $ 1,796 $ 3,145 $10,893 $ 9,779
Chemical 584 797 3,092 3,795
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Net sales $ 2,380 $ 3,942 $13,985 $13,574
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SEGMENT EARNINGS (LOSS)
Oil and gas $ 166 $ 770 $ 2,845 $ 2,417
Chemical (413) (55) (394) 169
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(247) 715 2,451 2,586
Unallocated Corporate Items
Interest expense, net (a) (56) (80) (263) (380)
Income taxes (b) 187 (193) (366) (861)
Trust preferred distributions
& other (13) (17) (56) (67)
Other (c) (113) (92) (580) 291
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Income before extraordinary
items and effect of changes in
accounting principles (242) 333 1,186 1,569
Extraordinary items, net (5) - (8) 1
Cumulative effect of changes
in accounting principles,
net - - (24) -
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Net income (loss) (247) 333 1,154 1,570
Effect of repurchase of Trust
Preferred Securities - - - 1
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EARNINGS APPLICABLE TO COMMON
STOCK $ (247) $ 333 $ 1,154 $ 1,571
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BASIC EARNINGS PER
COMMON SHARE
Income (loss) before
extraordinary items and
effect of changes in
accounting principles $ (0.65) $ 0.90 $ 3.18 $ 4.26
Extraordinary loss, net (0.01) - (0.02) -
Cumulative effect of changes
in accounting principles,
net - - (0.06) -
------- ------- ------- -------
$ (0.66) $ 0.90 $ 3.10 $ 4.26
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DILUTED EARNINGS PER
COMMON SHARE
Income (loss) before
extraordinary items and
effect of changes in
accounting principles $ (0.65) $ 0.90 $ 3.17 $ 4.26
Extraordinary loss, net (0.01) - (0.02) -
Cumulative effect of
changes in accounting
principles, net - - (0.06) -
------- ------- ------- -------
$ (0.66) $ 0.90 $ 3.09 $ 4.26
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AVERAGE BASIC COMMON SHARES
OUTSTANDING 373.8 369.8 372.4 369.0
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(a) The fourth quarter and twelve months year-to-date 2001 includes
$17 million and $102 million, respectively, interest income on
notes receivable from Altura partners. The fourth quarter and
twelve months year-to-date 2000 includes $38 million and $106
million, respectively.
(b) The fourth quarter 2001 includes a $172 million tax credit
reflecting the effect of the agreement in principle to sell
Occidental's interest in Equistar. 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 credits of $1 million and $7 million in the
fourth quarter of 2001 and 2000, respectively. The oil and gas
fourth quarter of 2000 amount included a $7 million credit for
the sale of an office building. Chemical divisional earnings
have been impacted by a credit of $4 million in the fourth
quarter of 2001 and a charge of $5 million in the fourth quarter
of 2000. 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.
(c) The fourth quarter and twelve months year-to-date 2001 includes
environmental remediation charges of $60 million and $109
million, respectively. The twelve months 2001 includes a $272
million net-of-tax loss related to the sale of Occidental's
residual interest in Occidental Texas Pipeline Company. The
fourth quarter and twelve months year-to-date 2001 includes
preferred distributions to the Occidental Permian partners of
$17 million and $104 million, respectively. The fourth quarter
and twelve months year-to-date 2000 includes $39 million and
$107 million, respectively. This is essentially offset by the
interest income discussed in (a) above. The fourth quarter 2000
includes a $17 million litigation settlement.
SUMMARY OF OPERATING STATISTICS
Fourth Quarter Twelve Months
Periods Ended December 31 2001 2000 2001 2000
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NET OIL, GAS AND LIQUIDS
PRODUCTION PER DAY
United States
Crude oil and liquids (MBBL)
California 82 75 76 70
Permian 137 136 137 101
US Other - - - 1
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Total 219 211 213 172
Natural Gas (MMCF)
California 297 316 303 306
Hugoton 153 166 159 168
Permian 150 162 148 119
US Other - - - 66
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Total 600 644 610 659
Latin America
Crude oil & condensate (MBBL)
Colombia 17 27 18 32
Ecuador 13 12 13 17
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Total 30 39 31 49
Eastern Hemisphere
Crude oil and condensate (MBBL)
Oman 14 9 12 9
Pakistan 7 5 7 6
Qatar 43 48 43 49
Russia 28 27 27 26
Yemen 32 31 33 32
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Total 124 120 122 122
Natural Gas (MMCF)
Pakistan 51 49 50 49
Barrels of Oil Equivalent (MBOE) 482 485 476 461
CAPITAL EXPENDITURES (millions) $ 436 $ 344 $ 1,401 $ 952
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DEPRECIATION, DEPLETION AND
AMORTIZATION OF ASSETS (millions) $ 245 $ 214 $ 971 $ 901
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