Industry Segments

12 Months Ended

Dec. 31, 2014

Industry Segments

Industry Segments

NOTE 16INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS

Occidental conducts its continuing operations through three segments: (1) oil and gas; (2) chemical; and (3) 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, processes, transports, stores, purchases and markets oil, condensate, NGLs, natural gas, CO2 and power.  It also trades around its assets, including transportation and storage capacity, and trades oil, NGLs, gas and power.  Additionally, the midstream and marketing segment invests in entities that conduct similar activities.

Earnings of industry segments and geographic areas 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 and geographic area 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.

Identifiable assets are those assets used in the operations of the segments.  Corporate assets consist of cash and restricted cash, certain corporate receivables and PP&E, and an investment in the Joslyn, Canada oil sands project.

Industry Segments
(in millions)							Midstream			Corporate
							and			and
	Oil and Gas			Chemical			Marketing			Eliminations			Total
YEAR ENDED DECEMBER 31, 2014
Net sales	$	13,887	(a)	$	4,817	(b)	$	1,373	(c)	$	(765)		$	19,312
Pretax operating profit (loss)	$	428	(d)	$	420	(e)	$	2,578	(f)	$	(1,871)	(g)	$	1,555
Net income attributable to noncontrolling interest	—			—			(14)			—			(14)
Income taxes	—			—			—			(1,685)		(g)	(1,685)
Discontinued operations, net	—			—			—			760		(i)	760
Net income (loss) attributable to common stock	$	428		$	420		$	2,564		$	(2,796)		$	616
Investments in unconsolidated entities	$	11		$	202		$	948		$	10		$	1,171
Property, plant and equipment additions, net (k)	$	6,589		$	325		$	2,093		$	103		$	9,110
Depreciation, depletion and amortization	$	3,701		$	367		$	160		$	33		$	4,261
Total assets	$	31,072		$	3,917		$	12,283		$	8,987		$	56,259
YEAR ENDED DECEMBER 31, 2013
Net sales	$	15,008	(a)	$	4,673	(b)	$	1,174	(c)	$	(685)		$	20,170
Pretax operating profit (loss)	$	6,411	(d)	$	743	(e)	$	1,523	(f)	$	(531)	(g)	$	8,146
Income taxes	—			—			—			(3,214)		(h)	(3,214)
Discontinued operations, net	—			—			—			971		(i)	971
Net income (loss) attributable to common stock	$	6,411		$	743		$	1,523		$	(2,774)		$	5,903
Investments in unconsolidated entities	$	108		$	34		$	1,307		$	10		$	1,459
Property, plant and equipment additions, net (k)	$	5,456		$	435		$	1,437		$	166		$	7,494
Depreciation, depletion and amortization	$	3,676		$	346		$	149		$	32		$	4,203
Total assets	$	46,213		$	3,947		$	14,374		$	4,909		$	69,443
YEAR ENDED DECEMBER 31, 2012
Net sales	$	14,953	(a)	$	4,580	(b)	$	1,164	(c)	$	(597)		$	20,100
Pretax operating profit (loss)	$	5,840	(d)	$	720		$	440	(f)	$	(512)	(g)	$	6,488
Income taxes	—			—			—			(2,659)		(h)	(2,659)
Discontinued operations, net	—			—			—			769		(i)	769
Net income (loss) attributable to common stock	$	5,840	(d)	$	720		$	440		$	(2,402)		$	4,598
Investments in unconsolidated entities	$	113		$	108		$	1,662		$	11		$	1,894
Property, plant and equipment additions, net (k)	$	6,067		$	365		$	1,451		$	91		$	7,974
Depreciation, depletion and amortization	$	3,065		$	345		$	148		$	27		$	3,585
Total assets	$	44,004		$	3,854		$	12,762		$	3,590		$	64,210

(See footnotes on next page)

Footnotes:

(a) Oil sales represented approximately 90 percent, 91 percent and 91 percent of the oil and gas segment net sales for the years ended December 31, 2014, 2013 and 2012, respectively.

(b) Net sales for the chemical segment comprised the following products:

	Basic Chemicals	Vinyls	Other Chemicals
Year ended December 31, 2014	54%	43%	3%
Year ended December 31, 2013	55%	42%	3%
Year ended December 31, 2012	57%	40%	3%

(c) Net sales for the midstream and marketing segment comprised the following:

	Gas Processing	Power	Marketing, Trading, Transportation and other
Year ended December 31, 2014	49%	31%	20%
Year ended December 31, 2013	54%	30%	16%
Year ended December 31, 2012	60%	24%	16%

(d) The 2014 amount includes pre-tax charges of $4.7 billion for the impairment of domestic oil and gas assets, pre-tax charges of $1.1 billion for the impairment of foreign oil and gas assets, and pre-tax gain of $531 million for the sale of the Hugoton field. The 2013 amount includes pre-tax charges of $607 million for the impairment of domestic non-producing acreage.  The 2012 amount includes pre-tax charges of $1.7 billion for the impairment of domestic gas assets and related items.

(e) The 2014 amount includes the pre-tax charge of $149 million. The 2013 amount includes a pre-tax gain of $131 million for the sale of an investment in Carbocloro.

(f) The 2014 amount includes pre-tax gains of $633 million and $1,351 million for the sales of BridgeTex Pipeline and a portion of an investment in Plains Pipeline, respectively, and other charges of $31 million. The 2013 amount includes a pre-tax gain of $1,044 million for the sale of a portion of an investment in Plains Pipeline and other items of $58 million.

(g) Includes unallocated net interest expense, administration expense, environmental remediation and other pre-tax items noted in footnote (j) below.

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

(i) Relates to discontinued operations from Ecuador and the spin-off of California Resources.

(j) Includes the following significant items affecting earnings for the years ended December 31:

Benefit (Charge) (in millions)	2014		2013		2012
CORPORATE
Pre-tax operating profit (loss)
California Resources other than temporary loss	$	(553)	$	—	$	—
Joslyn Impairment	(805)		—		—
Spin-off and other costs	(61)		—		—
Litigation reserves	—		—		(20)
Charge for former executives and consultants	—		(55)		—
	$	(1,419)	$	(55)	$	(20)
Income taxes
Tax effect of pre-tax and other adjustments *	$	927	$	(167)	$	612

*  Amounts represent the tax effect of the pre-tax adjustments listed in this note, as well as those in footnotes (d), (e) and (f).

(k) Includes capital expenditures and capitalized interest, but excludes acquisition and disposition of assets.

GEOGRAPHIC AREAS

(in millions)	Net sales (a)						Property, plant and equipment, net
For the years ended December 31,	2014		2013		2012		2014		2013		2012
United States	$	11,943	$	11,724	$	11,287	$	26,673	$	42,956	$	40,786
Foreign
Qatar	2,803		2,995		3,356		2,605		2,605		2,676
Oman	2,524		2,567		2,578		2,876		2,509		2,353
Colombia	938		1,022		1,027		1,396		1,259		1,041
United Arab Emirates	—		—		—		4,312		3,131		2,104
Other Foreign	1,104		1,862		1,852		1,868		3,361		3,104
Total Foreign	7,369		8,446		8,813		13,057		12,865		11,278
Total	$	19,312	$	20,170	$	20,100	$	39,730	$	55,821	$	52,064

(a) Sales are shown by individual country based on the location of the entity making the sale.