Industry Segments

6 Months Ended

Jun. 30, 2012

Industry Segments

Industry Segments

11.          Industry Segments

Occidental conducts its operations through three segments: (1) oil and gas; (2) chemical; and (3) midstream, marketing and other (midstream and marketing).  The oil and gas segment explores for, develops and produces oil and condensate, NGLs and natural gas.  The chemical segment mainly manufactures and markets basic chemicals and vinyls.  The midstream and marketing segment gathers, treats, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, carbon dioxide (CO2) and power.  It also trades around its assets, including pipelines and storage capacity, and trades oil, NGLs, gas and other commodities.

Earnings of industry segments generally exclude income taxes, interest income, interest expense, environmental remediation expenses, unallocated corporate expenses and discontinued operations, but include gains and losses from dispositions of segment assets and income from the segment's equity investments.

The following tables present Occidental’s industry segment and corporate disclosures (in millions):

	Oil and Gas		Chemical		Midstream, Marketing and Other		Corporate and Eliminations			Total
Three months ended June 30, 2012
Net sales	$	4,495	$	1,172	$	262	$	(161	)(a)	$	5,768
Pretax operating profit (loss)	$	2,043	$	194	$	77	$	(107	)(b)	$	2,207
Income taxes	—		—		—		(875		)(c)	(875		)
Discontinued operations, net	—		—		—		(4		)	(4		)
Net income (loss)	$	2,043	$	194	$	77	$	(986	)	$	1,328
Three months ended June 30, 2011
Net sales	$	4,591	$	1,325	$	441	$	(184	)(a)	$	6,173
Pretax operating profit (loss)	$	2,624	$	253	$	187	$	(134	)(b)	$	2,930
Income taxes	—		—		—		(1,111		)(c)	(1,111		)
Discontinued operations, net	—		—		—		(2		)	(2		)
Net income (loss)	$	2,624	$	253	$	187	$	(1,247	)	$	1,817

	Oil and Gas		Chemical		Midstream, Marketing and Other		Corporate and Eliminations			Total
Six months ended June 30, 2012
Net sales	$	9,397	$	2,320	$	655	$	(336	)(a)	$	12,036
Pretax operating profit (loss)	$	4,547	$	378	$	208	$	(227	)(b)	$	4,906
Income taxes	—		—		—		(2,014		)(c)	(2,014		)
Discontinued operations, net	—		—		—		(5		)	(5		)
Net income (loss)	$	4,547	$	378	$	208	$	(2,246	)	$	2,887
Six months ended June 30, 2011
Net sales	$	8,958	$	2,490	$	853	$	(402	)(a)	$	11,899
Pretax operating profit (loss)	$	5,092	$	472	$	301	$	(476	)(b)	$	5,389
Income taxes	—		—		—		(2,165		)(c)	(2,165		)
Discontinued operations, net	—		—		—		142		(d)	142
Net income (loss)	$	5,092	$	472	$	301	$	(2,499	)	$	3,366

(a)Intersegment sales eliminate upon consolidation and are generally made at prices approximately equal to those that the selling entity would be able to obtain in third-party transactions.

(b)Includes unallocated net interest expense (including the early debt extinguishment costs of $163 million for the six months ended June 30, 2011), administration expense, environmental remediation and other pre-tax items.

(c)Includes all foreign and domestic income taxes from continuing operations.

(d)Reflects an after-tax gain from the sale of the Argentine operations.