12. Industry Segments

Occidental conducts its 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, NGL 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, NGL, natural gas, CO₂ and power. It also trades around its assets, including transportation and storage capacity. Additionally, the midstream and marketing segment invests in entities that conduct similar activities.

Results 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 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.

The following tables present Occidental’s industry segments (in millions):


	Oil					Midstream			Corporate
	and					and			and
	Gas			Chemical		Marketing			Eliminations			Total
Three months ended June 30, 2018
Net sales	$	2,531		$	1,176	$	603		$	(227)		$	4,083
Pre-tax operating profit (loss)	$	780		$	317	$	250		$	(197)	(a)	$	1,150
Income taxes		—			—		—			(302)	(b)		(302)
Net income (loss)	$	780		$	317	$	250		$	(499)		$	848

Three months ended June 30, 2017
Net sales	$	1,848		$	1,156	$	270		$	(214)		$	3,060
Pre-tax operating profit (loss)	$	627	(c)	$	230	$	119	(d)	$	(184)	(a)	$	792
Income taxes		—			—		—			(285)	(b)		(285)
Net income (loss)	$	627		$	230	$	119		$	(469)		$	507


		Oil					Midstream			Corporate
		and					and			and
		Gas			Chemical		Marketing			Eliminations			Total
Six months ended June 30, 2018
Net sales	$	4,985		$	2,330	$	992		$	(461)		$	7,846
Pre-tax operating profit (loss)	$	1,530		$	615	$	429		$	(377)	(a)	$	2,197
Income taxes		—			—		—			(641)	(b)		(641)
Net income (loss)	$	1,530		$	615	$	429		$	(1,018)		$	1,556

Six months ended June 30, 2017
Net sales	$	3,742		$	2,224	$	481		$	(430)		$	6,017
Pre-tax operating profit (loss)	$	847	(c)	$	400	$	72	(d)	$	(332)	(a)	$	987
Income taxes		—			—		—			(363)	(b)		(363)
Net income (loss)	$	847		$	400	$	72		$	(695)		$	624

(a)

Includes unallocated net interest expense, administration expense, environmental remediation and other pre-tax items.

(b)

Includes all foreign and domestic income taxes from continuing operations.

(c)

Includes gain on sale of domestic oil and gas assets, including South Texas, of $510 million.

(d)

Includes a non-cash fair value gain of $94 million on the Plains equity investment.