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Fair Value Measurements
3 Months Ended
Mar. 31, 2017
Fair Value Measurements  
Fair Value Measurements

9. Fair Value Measurements

 

Occidental has categorized its assets and liabilities that are measured at fair value in a three-level fair value hierarchy, based on the inputs to the valuation techniques: Level 1 — using quoted prices in active markets for the assets or liabilities; Level 2 — using observable inputs other than quoted prices for the assets or liabilities; and Level 3 — using unobservable inputs.  Transfers between levels, if any, are recognized at the end of each reporting period.

 

The following tables provide fair value measurement information for such assets and liabilities that are measured on a recurring basis as of March 31, 2017, and December 31, 2016 (in millions):

 

Fair Value Measurements at March 31, 2017:

 

 

 

 

 

 

 

 

 

 

 

Embedded derivatives

 

Level 1

 

Level 2

 

Level 3

 

Netting and
Collateral

 

Total
Fair
Value

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accrued liabilities

 

$

 

$

53

 

$

 

$

 

$

53

 

Deferred credits and liabilities

 

$

 

$

204

 

$

 

$

 

$

204

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value Measurements at December 31, 2016:

 

 

 

 

 

 

 

 

 

 

 

Embedded derivatives

 

Level 1

 

Level 2

 

Level 3

 

Netting and
Collateral

 

Total
Fair
Value

 

Liabilities:

 

 

 

 

 

 

 

 

 

 

 

Accrued liabilities

 

$

 

$

43

 

$

 

$

 

$

43

 

Deferred credits and liabilities

 

$

 

$

178

 

$

 

$

 

$

178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Values — Nonrecurring

 

During the three months ended March 31, 2017, Occidental did not have any assets or liabilities measured at fair value on a nonrecurring basis. During the year ended December 31, 2016, Occidental recognized pre-tax impairment charges of $15 million related to proved oil and gas properties.

 

Other Financial Instruments

 

The carrying amounts of cash and cash equivalents and other on-balance-sheet financial instruments, other than long-term, fixed-rate debt, approximate fair value. The cost, if any, to terminate Occidental’s off-balance-sheet financial instruments is not significant. Occidental estimates the fair value of fixed-rate debt based on the quoted market prices for those instruments or on quoted market yields for similarly rated debt instruments, taking into account such instruments’ maturities. The estimated fair value of Occidental’s debt as of March 31, 2017, and December 31, 2016, was $10.1 billion and $10.2 billion, respectively, and its carrying value net of unamortized discount and debt issuance costs as of March 31, 2017, and December 31, 2016, was $9.8 billion for both periods. The majority of Occidental’s debt is classified as Level 1, with $68 million classified as Level 2.