Industry Segments

6 Months Ended

Jun. 30, 2014

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, natural gas liquids (NGLs) and natural gas.  The chemical segment mainly manufactures and markets basic chemicals and vinyls.  The midstream and marketing segment gathers, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, carbon dioxide (CO2) and power.  It also trades around its assets, including transportation and storage capacity, and trades oil, NGLs, gas and other commodities.  Additionally, the midstream and marketing segment invests in entities that conduct similar activities.

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 segments’ equity investments.  Intersegment sales eliminate upon consolidation and are generally made at prices approximating those that the selling entity would be able to obtain in third-party transactions.

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

							Midstream			Corporate
							and			and
	Oil and Gas			Chemical			Marketing			Eliminations			Total
Three months ended June 30, 2014
Net sales	$	4,807		$	1,242		$	530		$	(304	)	$	6,275
Pre-tax operating profit (loss)	$	2,182	(a)	$	133		$	222		$	(145	)(b)	$	2,392
Income taxes	—			—			—			(957		)(c)	(957		)
Discontinued operations, net	—			—			—			(1		)	(1		)
Net income attributable to noncontrolling interest	—			—			(3		)	—			(3		)
Net income (loss) attributable to common stock	$	2,182		$	133		$	219		$	(1,103	)	$	1,431
Three months ended June 30, 2013
Net sales	$	4,721		$	1,187		$	269		$	(215	)	$	5,962
Pre-tax operating profit (loss)	$	2,100		$	275	(d)	$	48		$	(195	)(b)	$	2,228
Income taxes	—			—			—			(901		)(c)	(901		)
Discontinued operations, net	—			—			—			(5		)	(5		)
Net income (loss) attributable to common stock	$	2,100		$	275		$	48		$	(1,101	)	$	1,322

							Midstream			Corporate
							and			and
	Oil and Gas			Chemical			Marketing			Eliminations			Total
Six months ended June 30, 2014
Net sales	$	9,483		$	2,462		$	965		$	(547	)	$	12,363
Pre-tax operating profit (loss)	$	4,286	(a)	$	269		$	394		$	(236	)(b)	$	4,713
Income taxes	—			—			—			(1,889		)(c)	(1,889		)
Discontinued operations, net	—			—			—			2			2
Net income attributable to noncontrolling interest	—			—			(5		)	—			(5		)
Net income (loss) attributable to common stock	$	4,286		$	269		$	389		$	(2,123	)	$	2,821
Six months ended June 30, 2013
Net sales	$	9,161		$	2,362		$	722		$	(411	)	$	11,834
Pre-tax operating profit (loss)	$	4,020		$	434	(d)	$	263		$	(286	)(b)	$	4,431
Income taxes	—			—			—			(1,745		)(c)	(1,745		)
Discontinued operations, net	—			—			—			(9		)	(9		)
Net income (loss) attributable to common stock	$	4,020		$	434		$	263		$	(2,040	)	$	2,677

(a) Includes second quarter pre-tax gain of $535 million for the Hugoton sale. In addition, in June 2014, management determined it would not pursue the exploration and development of certain of its non-producing domestic oil and gas acreage, and Occidental recorded a pre-tax impairment charge of approximately $471 million.

(b) Includes unallocated net interest expense, administration expense, environmental remediation and other pre-tax items. The three and six month periods ended June 30, 2013 include a $55 million pre-tax charge for the estimated costs related to employment and post-employment benefits for Occidental’s former Executive Chairman and termination of certain other employees and consulting arrangements.

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

(d) Includes a $131 million pre-tax gain for the sale of an investment in Carbocloro, a Brazilian chemical facility.