|
|
|
|
|
|
|
|
Consolidated Condensed Statements of Cash Flows
|
Occidental Petroleum Corporation and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
|
millions
|
2020
|
|
2019
|
|
|
CASH FLOW FROM OPERATING ACTIVITIES
|
|
|
|
|
|
Net income (loss)
|
$
|
(2,013)
|
|
|
$
|
631
|
|
|
|
Adjustments to reconcile net income (loss) to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation, depletion and amortization of assets
|
2,242
|
|
|
973
|
|
|
|
Deferred income tax (benefit) provision
|
(218)
|
|
|
10
|
|
|
|
Other noncash (gains) charges to income
|
(550)
|
|
|
239
|
|
|
|
Asset impairments and other items
|
1,768
|
|
|
—
|
|
|
|
Gain on sales of equity investments and other assets, net
|
(7)
|
|
|
(7)
|
|
|
|
Undistributed losses (income) from affiliates
|
174
|
|
|
(24)
|
|
|
|
Dry hole expenses
|
18
|
|
|
10
|
|
|
|
Changes in operating assets and liabilities:
|
|
|
|
|
|
|
|
(Increase) decrease in receivables
|
3,909
|
|
|
(417)
|
|
|
|
Increase in inventories
|
(70)
|
|
|
(221)
|
|
|
|
Decrease (increase) in other current assets
|
324
|
|
|
(199)
|
|
|
|
Decrease in accounts payable and accrued liabilities
|
(4,401)
|
|
|
(40)
|
|
|
|
Increase (decrease) in current domestic and foreign income taxes
|
48
|
|
|
(7)
|
|
|
|
|
|
|
|
|
|
Operating cash flow from continuing operations
|
1,224
|
|
|
|
948
|
|
|
|
Operating cash flow from discontinued operations, net of taxes
|
115
|
|
|
—
|
|
|
|
Net cash provided by operating activities
|
1,339
|
|
|
|
948
|
|
|
|
CASH FLOW FROM INVESTING ACTIVITIES
|
|
|
|
|
|
Capital expenditures
|
(1,293)
|
|
|
(1,259)
|
|
|
|
Change in capital accrual
|
(435)
|
|
|
(51)
|
|
|
|
Purchase of businesses and assets, net
|
(35)
|
|
|
(69)
|
|
|
|
Proceeds from sale of assets and equity investments, net
|
112
|
|
|
16
|
|
|
|
Equity investments and other, net
|
142
|
|
|
(52)
|
|
|
|
Investing cash flow from continuing operations
|
(1,509)
|
|
|
|
(1,415)
|
|
|
|
Investing cash flow from discontinued operations, net of taxes
|
(21)
|
|
|
—
|
|
|
|
Net cash used by investing activities
|
(1,530)
|
|
|
|
(1,415)
|
|
|
|
CASH FLOW FROM FINANCING ACTIVITIES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Proceeds from issuance of common stock
|
90
|
|
|
16
|
|
|
|
Purchases of treasury stock
|
—
|
|
|
(237)
|
|
|
|
Cash dividends paid
|
(913)
|
|
|
(591)
|
|
|
|
Other financing, net
|
(196)
|
|
|
(2)
|
|
|
|
Net cash used by financing activities
|
(1,019)
|
|
|
|
(814)
|
|
|
|
Decrease in cash, cash equivalents, restricted cash and restricted cash equivalents
|
(1,210)
|
|
|
|
(1,281)
|
|
|
|
Cash, cash equivalents, restricted cash and restricted cash equivalents — beginning of period
|
3,574
|
|
|
3,033
|
|
|
|
Cash, cash equivalents, restricted cash and restricted cash equivalents — end of period
|
$
|
2,364
|
|
|
|
$
|
1,752
|
|
|
|
The accompanying notes are an integral part of these Consolidated Condensed Financial Statements.
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Condensed Statements of Equity
|
Occidental Petroleum Corporation and Subsidiaries
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributable to Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions, except per share amounts
|
|
Common Stock
|
|
Preferred Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Equity
|
|
Balance at December 31, 2019
|
|
$
|
209
|
|
|
$
|
9,762
|
|
|
$
|
(10,653)
|
|
|
$
|
14,955
|
|
|
$
|
20,180
|
|
|
$
|
(221)
|
|
|
$
|
34,232
|
|
|
Net loss
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(2,013)
|
|
|
—
|
|
|
(2,013)
|
|
|
Other comprehensive loss, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(113)
|
|
|
(113)
|
|
|
Dividends on common stock, $0.79 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(719)
|
|
|
—
|
|
|
(719)
|
|
|
Dividends on preferred stock, $2,222 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(219)
|
|
|
—
|
|
|
(219)
|
|
|
Issuance of common stock, net
|
|
1
|
|
|
—
|
|
|
—
|
|
|
126
|
|
|
—
|
|
|
—
|
|
|
127
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance at March 31, 2020
|
|
$
|
210
|
|
|
|
$
|
9,762
|
|
|
|
$
|
(10,653)
|
|
|
|
$
|
15,081
|
|
|
|
$
|
17,229
|
|
|
|
$
|
(334)
|
|
|
|
$
|
31,295
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity Attributable to Common Stock
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions, except per share amounts
|
|
Common Stock
|
|
Preferred Stock
|
|
Treasury Stock
|
|
Additional Paid-in Capital
|
|
Retained Earnings
|
|
Accumulated Other Comprehensive Loss
|
|
Total Equity
|
|
Balance at December 31, 2018
|
|
$
|
179
|
|
|
$
|
—
|
|
|
$
|
(10,473)
|
|
|
$
|
8,046
|
|
|
$
|
23,750
|
|
|
$
|
(172)
|
|
|
$
|
21,330
|
|
|
Net income
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
631
|
|
|
—
|
|
|
631
|
|
|
Other comprehensive income, net of tax
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
4
|
|
|
4
|
|
|
Dividends on common stock, $0.78 per share
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(586)
|
|
|
—
|
|
|
(586)
|
|
|
Issuance of common stock, net
|
|
—
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
—
|
|
|
—
|
|
|
37
|
|
|
Purchases of treasury stock
|
|
—
|
|
|
—
|
|
|
(180)
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(180)
|
|
|
Balance at March 31, 2019
|
|
$
|
179
|
|
|
|
$
|
—
|
|
|
|
$
|
(10,653)
|
|
|
|
$
|
8,083
|
|
|
|
$
|
23,795
|
|
|
|
$
|
(168)
|
|
|
|
$
|
21,236
|
|
The accompanying notes are an integral part of these consolidated condensed financial statements.
|
|
|
|
|
|
|
|
Notes to Consolidated Condensed Financial Statements
|
Occidental Petroleum Corporation and Subsidiaries
|
NATURE OF OPERATIONS
In this report, "Occidental" means Occidental Petroleum Corporation, a Delaware corporation (OPC), or OPC and one or more entities in which it owns a controlling interest (subsidiaries). Occidental conducts its operations through various subsidiaries and affiliates. Occidental has made its disclosures in accordance with United States generally accepted accounting principles (GAAP) as they apply to interim reporting, and condensed or omitted, as permitted by the U.S. Securities and Exchange Commission’s rules and regulations, certain information and disclosures normally included in consolidated financial statements and the notes thereto. These unaudited consolidated condensed financial statements should be read in conjunction with the audited consolidated financial statements and the notes thereto in Occidental’s Annual Report on Form 10-K for the year ended December 31, 2019 (the 2019 Form 10-K).
In the opinion of Occidental’s management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present Occidental’s consolidated financial position as of March 31, 2020, and December 31, 2019, and the consolidated condensed statements of operations, comprehensive income, cash flows and stockholders' equity for the three months ended March 31, 2020, and 2019. Certain data in the financial statements and notes for prior periods have been reclassified to conform to the current presentation. The income and cash flows for the periods ended March 31, 2020, and 2019, are not necessarily indicative of the income or cash flows to be expected for the full year.
THE ACQUISITION
On August 8, 2019, pursuant to the Agreement and Plan of Merger dated May 9, 2020, Occidental acquired all of the outstanding shares of Anadarko Petroleum Corporation (the Acquisition). The Acquisition added to Occidental's oil and gas portfolio, primarily in the Permian Basin, DJ Basin and Gulf of Mexico, and an interest in Western Midstream Partners, L.P. (WES). The Acquisition constituted a business combination, and under the acquisition method of accounting, the acquisition consideration is allocated to tangible and intangible assets acquired and liabilities assumed based on their fair values.
As of March 31, 2020, Occidental has substantially completed the allocation of the consideration; however, Occidental continues to gather information related to the evaluation of certain properties due to ongoing appraisal efforts. Estimates were recorded as of the Acquisition date related to these remaining items and the valuations could change as additional information is received. For the three months ended March 31, 2020 there were no material changes to the allocation presented in the 2019 Form 10-K.
Occidental expensed $148 million in acquisition-related costs for the three months ended March 31, 2020, primarily related to one-time severance costs and the accelerated vesting of certain Anadarko share-based awards for former Anadarko employees based on the terms of the underlying Acquisition agreement and existing change of control provisions within the former Anadarko employment or award agreements.
DISCONTINUED OPERATIONS
In connection with the Acquisition, Occidental entered into a purchase and sale agreement with TOTAL S.A. (Total) to sell all of the assets, liabilities, businesses, and operations of Anadarko's operations in Algeria, Ghana, Mozambique and South Africa (collectively, the Africa Assets) for $8.8 billion, subject to certain purchase price adjustments. Occidental completed the sale of the Mozambique assets in September 2019 and the South Africa assets in January 2020. The closing of the sale of the remaining Africa Assets, in Algeria and Ghana, remained conditioned on the receipt of required regulatory and government approvals, as well as other customary closing conditions. The assets and liabilities for Algeria and Ghana are presented as held for sale at March 31, 2020. The results of operations of the Africa Assets are presented as discontinued operations, see Note 3 - Dispositions and Other Transactions.
In April 2020, subsequent to communications with Algerian government officials, Occidental determined that the sale of the Algeria assets to Total will likely not be consummated. As such, beginning in the second quarter of 2020, Occidental will no longer classify the Algeria operations as a discontinued operation and will reclassify prior periods to reflect the Algerian operations as continuing operations. In addition, the carrying value of the Algeria assets will be remeasured at the lower of its fair value or the carrying amount as if depreciation, depletion and amortization (DD&A) were recorded from the date of the Acquisition. Any adjustment to reflect this remeasurement will be recorded in the second quarter of 2020.
In addition, if the Algeria asset sale is not completed, Total will not be obligated to complete the acquisition of the Ghana assets under the purchase and sale agreement; however, Occidental and Total are continuing to have discussions regarding the potential sale of the Ghana assets.
Unless otherwise indicated, information presented in the Notes to the Consolidated Condensed Financial Statements relates only to Occidental's continuing operations. Information related to discontinued operations is included in Note 3 - Dispositions and Other Transactions, and in some instances, where appropriate, is included as a separate disclosure within the individual Notes to the Consolidated Condensed Financial Statements.
SUPPLEMENTAL CASH FLOW INFORMATION
Occidental paid U.S. federal, domestic state and foreign income taxes for continuing operations of $111 million and $223 million during the three months ended March 31, 2020, and 2019, respectively. Occidental received tax refunds of $26 million and $1 million during the three months ended March 31, 2020, and 2019, respectively, related to continuing operations. Interest paid for continuing operations totaled $572 million and $114 million during the three months ended March 31, 2020, and 2019, respectively.
CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS
Occidental considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents or restricted cash equivalents. The cash equivalents and restricted cash equivalents balance at March 31, 2020, includes investments in government money market funds in which the carrying value approximates fair value.
The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as reported at the end of the period in the Consolidated Condensed Statements of Cash Flows for the three months ended March 31, 2020, to the line items within the Consolidated Condensed Balance Sheet at March 31, 2020. There was no restricted cash or restricted cash equivalents at March 31, 2019.
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
|
|
Cash and cash equivalents
|
$
|
2,021
|
|
|
|
Restricted cash and restricted cash equivalents
|
242
|
|
|
|
Cash and restricted cash included in assets held for sale
|
27
|
|
|
|
Restricted cash and restricted cash equivalents included in long-term receivables and other assets, net
|
74
|
|
|
|
Cash, cash equivalents, restricted cash, and restricted cash equivalents
|
$
|
2,364
|
|
|
Total restricted cash and restricted cash equivalents are primarily associated with a benefits trust for former Anadarko employees that was funded as part of the Acquisition, payments of future hard-minerals royalties conveyed, and a judicially controlled account related to a Brazilian tax dispute.
EQUITY METHOD INVESTMENT-WES
Occidental's loss of control of WES on December 31, 2019 resulted in Occidental recognizing, at fair value, an equity method investment of $5.1 billion based on the closing market price of WES. As of March 31, 2020, the carrying amount of the investment in WES was $4.8 billion. The decline in the equity method investment from December 31, 2019 to March 31, 2020 was primarily attributable to Occidental's interest in WES's approximately $400 million impairment of its goodwill. Occidental has concluded that the short-term loss in value did not meet the other-than-temporary criteria under accounting literature governing equity method investments as of March 31, 2020. However, if WES’s unit price remains significantly below its year-end 2019 unit price for a sustained period of time, Occidental would be required to reduce the carrying amount of its equity method investment in WES. WES owns gathering systems, plants and pipelines and earns revenue from fee-based and service-based contracts with Occidental and third parties which could be impacted by lower demand for oil and gas associated with the ongoing COVID-19 pandemic.
The period ended March 31, 2020, was the first quarter subsequent to the Acquisition where transactions between Occidental and WES were not eliminated upon consolidation. For the three months ended March 31, 2020 Occidental had sales of $113 million to WES and purchased $219 million and $310 million of commodities and services from WES, respectively.
|
|
|
|
|
NOTE 2 - ACCOUNTING AND DISCLOSURE CHANGES
|
In January 2020, Occidental adopted Accounting Standards Update (ASU) 2016-13 Financial Instruments - Credit Losses (Topic 326). The new standard makes significant changes to the accounting for credit losses on financial assets and disclosures regarding credit losses. For trade receivables, loans and held-to-maturity debt securities, entities will be required to estimate lifetime expected credit losses. This will result in the earlier recognition of credit losses than the current incurred loss model. The acceleration of the recognition of losses is more material for entities whose receivables and other held-to-maturity debt investments are (1) long dated and (2) with less credit worthy counterparties.
The vast majority of Occidental's receivables are short dated with maturities of less than 60 days with creditworthy counterparties, including refiners, pipelines and resellers. Given Occidental’s continued effort to maintain a strong credit portfolio, there have been no negative indications regarding the collectability of these receivables as of the date of this filing. Therefore, adoption of this standard has no material impact for the quarter. Occidental will continue to assess the risk to its receivables in the future.
In January 2020, Occidental adopted ASU 2017-4 Intangibles, Goodwill and Other (Topic 350): Simplifying the Test for Goodwill Impairment. The new standard simplifies the accounting for goodwill impairment by requiring a single step impairment test, whereby the impairment equals the difference between the carrying amount and the estimated fair value of the specified units in their entirety, see Note 7 - Fair-Value Measurements for the results of this simplified goodwill impairment test.
|
|
|
|
|
NOTE 3 - DISPOSITIONS AND OTHER TRANSACTIONS
|
AFRICA ASSETS - DISCONTINUED OPERATIONS
In January 2020, Occidental completed the sale of the South Africa assets to Total. The carrying amount of Africa Assets that meet the held for sale criteria will be adjusted in future periods based on changes in fair value. The results of the Africa Assets are presented as discontinued operations in the Consolidated Condensed Statements of Operations and Cash Flows.
The following table presents the amounts reported in discontinued operations, net of income taxes, related to the Africa Assets for the three months ended March 31, 2020:
|
|
|
|
|
|
|
|
|
millions
|
|
|
|
Revenues and other income
|
|
|
|
Net sales
|
$
|
332
|
|
|
|
|
|
|
|
Costs and other deductions
|
|
|
|
Oil and gas lease operating expense
|
$
|
46
|
|
|
|
Transportation expense
|
7
|
|
|
|
Taxes other than on income
|
43
|
|
|
|
Fair value adjustment on assets held for sale
|
139
|
|
|
|
Other
|
16
|
|
|
|
Total costs and other deductions
|
$
|
251
|
|
|
|
|
|
|
|
Income before income taxes
|
$
|
81
|
|
|
|
Income tax expense
|
(81)
|
|
|
|
Discontinued operations, net of tax
|
$
|
—
|
|
|
The following table presents the amounts reported in the Consolidated Condensed Balance Sheets as held for sale related to the Africa Assets as of March 31, 2020 and December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
March 31, 2020
|
|
December 31, 2019
|
|
|
Current assets
|
|
$
|
378
|
|
|
$
|
289
|
|
|
|
Property, plant and equipment, net
|
|
5,235
|
|
|
5,481
|
|
|
|
Long-term receivables and other assets, net
|
|
119
|
|
|
256
|
|
|
|
Assets held for sale (a)
|
$
|
5,732
|
|
|
$
|
6,026
|
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
$
|
399
|
|
|
$
|
452
|
|
|
|
Long-term debt, net - finance leases
|
|
183
|
|
|
185
|
|
|
|
Deferred income taxes
|
|
1,096
|
|
|
1,112
|
|
|
|
Asset retirement obligations
|
|
183
|
|
|
181
|
|
|
|
Other
|
|
30
|
|
|
80
|
|
|
|
Liabilities of assets held for sale (a)
|
$
|
1,891
|
|
|
$
|
2,010
|
|
|
|
Net assets held for sale
|
|
$
|
3,841
|
|
|
$
|
4,016
|
|
|
(a) Assets and liabilities held for sale at December 31, 2019 included South Africa assets which were sold to Total in January 2020.
Revenue from customers is recognized when obligations under the terms of a contract with our customers are satisfied; this generally occurs with the delivery of oil, natural gas liquids (NGL), gas, chemicals or services, such as transportation. As of March 31, 2020, trade receivables, net, of $2.5 billion represent rights to payment, for which Occidental has satisfied its obligations under a contract and its right to payment is conditioned only on the passage of time.
The following table shows a reconciliation of revenue from customers to total net sales:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
millions
|
2020
|
|
2019
|
|
Revenue from customers
|
$
|
5,047
|
|
|
$
|
3,435
|
|
|
All other revenues (a)
|
1,363
|
|
|
569
|
|
|
Net sales
|
$
|
6,410
|
|
|
$
|
4,004
|
|
(a) Includes net marketing derivatives, oil collars and calls, and chemical exchange contracts.
DISAGGREGATION OF REVENUE FROM CONTRACTS WITH CUSTOMERS
The table below presents Occidental's revenue from customers by segment, product and geographical area. The oil and gas segment typically sells its oil, NGL and gas at the lease or concession area. Chemical segment revenues are shown by geographic area based on the location of the sale. Excluding net marketing revenue, midstream and marketing segment revenues are shown by the location of sale.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
United States
|
|
Middle East
|
|
Latin America
|
|
Other International
|
|
Eliminations
|
|
Total
|
|
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
|
$
|
2,755
|
|
|
$
|
447
|
|
|
|
$
|
149
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
3,351
|
|
|
NGL
|
213
|
|
|
55
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
268
|
|
|
Gas
|
183
|
|
|
80
|
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
268
|
|
|
Other
|
11
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
11
|
|
|
Segment total
|
$
|
3,162
|
|
|
|
$
|
582
|
|
|
|
$
|
154
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
3,898
|
|
|
Chemical
|
$
|
910
|
|
|
|
$
|
—
|
|
|
|
$
|
35
|
|
|
$
|
16
|
|
|
$
|
—
|
|
|
$
|
961
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Midstream and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas processing
|
$
|
105
|
|
|
|
$
|
71
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
176
|
|
|
Marketing
|
246
|
|
|
|
—
|
|
|
|
—
|
|
|
(51)
|
|
|
—
|
|
|
195
|
|
|
Power and other
|
16
|
|
|
|
—
|
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
16
|
|
|
Segment total
|
$
|
367
|
|
|
|
$
|
71
|
|
|
|
$
|
—
|
|
|
|
$
|
(51)
|
|
|
|
$
|
—
|
|
|
|
$
|
387
|
|
|
Eliminations
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(199)
|
|
|
$
|
(199)
|
|
|
Consolidated
|
$
|
4,439
|
|
|
|
$
|
653
|
|
|
|
$
|
189
|
|
|
|
$
|
(35)
|
|
|
|
$
|
(199)
|
|
|
|
$
|
5,047
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
United States
|
|
Middle East
|
|
Latin America
|
|
Other International
|
|
Eliminations
|
|
Total
|
|
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil and Gas
|
|
|
|
|
|
|
|
|
|
|
|
|
Oil
|
$
|
1,205
|
|
|
$
|
758
|
|
|
$
|
135
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
2,098
|
|
|
NGL
|
78
|
|
|
65
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
143
|
|
|
Gas
|
47
|
|
|
79
|
|
|
4
|
|
|
—
|
|
|
—
|
|
|
130
|
|
|
Other
|
(21)
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(20)
|
|
|
Segment total
|
$
|
1,309
|
|
|
|
$
|
903
|
|
|
|
$
|
139
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
2,351
|
|
|
Chemical
|
$
|
993
|
|
|
$
|
—
|
|
|
$
|
43
|
|
|
$
|
19
|
|
|
$
|
—
|
|
|
$
|
1,055
|
|
|
Midstream and Marketing
|
|
|
|
|
|
|
|
|
|
|
|
|
Gas processing
|
$
|
105
|
|
|
$
|
102
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
207
|
|
|
Power and other
|
44
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
44
|
|
|
Segment total
|
$
|
149
|
|
|
|
$
|
102
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
—
|
|
|
|
$
|
251
|
|
|
Eliminations
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
(222)
|
|
|
$
|
(222)
|
|
|
Consolidated
|
$
|
2,451
|
|
|
|
$
|
1,005
|
|
|
|
$
|
182
|
|
|
|
$
|
19
|
|
|
|
$
|
(222)
|
|
|
|
$
|
3,435
|
|
TRANSACTION PRICE ALLOCATED TO REMAINING PERFORMANCE OBLIGATIONS
Revenue expected to be recognized from certain performance obligations that are unsatisfied as of March 31, 2020, is reflected in the table below. Occidental applies the optional exemptions in ASU 2014-09 Revenue from Contracts with Customers (Topic 606) and does not disclose consideration for remaining performance obligations with an original expected duration of one year or less or for variable consideration related to unsatisfied performance obligations. As a result, the following table represents a small portion of Occidental's expected future consolidated revenues, as future revenue from the sale of most products and services is dependent on future production or variable customer volume and variable commodity prices for that volume:
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
|
|
Remainder of 2020
|
|
$
|
92
|
|
|
2021
|
|
111
|
|
|
2022
|
|
9
|
|
|
2023
|
|
9
|
|
|
2024
|
|
9
|
|
|
Thereafter
|
|
85
|
|
|
Total
|
|
$
|
315
|
|
Commodity inventory and finished goods primarily represents crude oil, which is carried at the lower of weighted-average cost or net realizable value, and caustic soda and chlorine, which are valued under the last-in, first-out (LIFO) method. Inventories consisted of the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
March 31, 2020
|
|
December 31, 2019
|
|
Raw materials
|
$
|
69
|
|
|
$
|
75
|
|
|
Materials and supplies
|
902
|
|
|
879
|
|
|
Commodity inventory and finished goods
|
505
|
|
|
533
|
|
|
|
1,476
|
|
|
1,487
|
|
|
Revaluation to LIFO
|
(40)
|
|
|
(40)
|
|
|
Total
|
$
|
1,436
|
|
|
$
|
1,447
|
|
Occidental recognized impairments of $79 million for the three months ended March 31, 2020, due to lower than cost or net realizable value adjustments primarily related to crude oil inventories.
Occidental uses a variety of derivative financial instruments and physical contracts to manage its exposure to commodity-price fluctuations, interest rate risks and transportation commitments and to fix margins on the future sale of stored commodity volumes. Occidental also enters into derivative financial instruments for trading purposes.
Occidental may elect normal purchases and normal sales exclusions when physically delivered commodities are purchased or sold to a customer. Occidental occasionally applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecasted sales of its natural gas storage volumes, and at times for other strategies, such as to lock rates on forecasted debt issuances. Derivatives are carried at fair value and on a net basis when a legal right of offset exists with the same counterparty.
DERIVATIVES NOT DESIGNATED AS HEDGING INSTRUMENTS
As of March 31, 2020, Occidental’s derivatives not designated as hedges consist of three-way oil collars and call options, interest rate swaps, marketing derivatives and warrants for 80 million shares of Occidental common stock (the Warrants).
Derivative instruments that are derivatives not designated as hedging instruments are required to be recorded on the balance sheet at fair value. Changes in fair value will impact Occidental’s earnings through mark-to-market adjustments until the physical commodity is delivered or the financial instrument is settled. The fair value does not reflect the realized or cash value of the instrument.
THREE-WAY OIL COLLARS AND CALL OPTIONS
In 2019, Occidental entered into three-way costless collar derivative instruments for 2020 along with additional call options in 2021 to manage its near-term exposure to cash-flow variability from commodity price risks. A three-way collar is a combination of three options: a sold call, a purchased put and a sold put. The sold call establishes the ceiling price that Occidental will receive for the contracted commodity volume for a defined period of time. The purchased put establishes the floor price that Occidental will receive for the contracted volumes unless the market price for the commodity falls below the sold put strike price, at which point the floor price equals the reference price plus the difference between the purchased put strike price and the sold put strike price for a defined period of time. Occidental entered into the 2021 call options to substantially improve the terms for the ceiling price that Occidental will receive for the contracted commodity volumes in 2020. Net gains and losses associated with collars and calls are recognized currently in net sales. In April 2020, Occidental received cash of $108 million associated with these collars.
Occidental had the following collars and calls outstanding at March 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Collars and Calls, not designated as hedges
|
|
|
|
|
2020 Settlement
|
|
|
|
|
Three-way collars (Oil MMBBL)
|
|
|
96.25
|
|
|
|
Average price per barrel (Brent oil pricing)
|
|
|
|
|
|
Ceiling sold price (call)
|
$
|
74.16
|
|
|
|
|
Floor purchased price (put)
|
$
|
55.00
|
|
|
|
|
Floor sold price (put)
|
$
|
45.00
|
|
|
|
|
|
|
|
2021 Settlement
|
|
|
|
|
Call options sold (Oil MMBBL)
|
|
|
127.8
|
|
|
|
Average price per barrel (Brent oil pricing)
|
|
|
|
|
|
Ceiling sold price (call)
|
$
|
74.16
|
|
INTEREST RATE SWAPS
Occidental acquired interest rate swap contracts in the Acquisition. The contracts lock in a fixed interest rate in exchange for a floating interest rate indexed to three-month London Inter-Bank Offered Rate (LIBOR) throughout the reference period. Net gains and losses associated with interest rate derivative instruments not designated as hedging instruments are recognized currently in gains (losses) on interest rate swaps and warrants, net.
Occidental had the following outstanding interest rate swaps at March 31, 2020:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions except percentages
|
|
|
|
|
Mandatory
|
|
Weighted-Average
|
|
Notional Principal Amount
|
|
|
Reference Period
|
|
Termination Date
|
|
Interest Rate
|
|
$
|
400
|
|
|
|
September 2016 - 2046
|
|
September 2021
|
|
6.348
|
%
|
|
$
|
350
|
|
|
|
September 2017 - 2047
|
|
September 2021
|
|
6.662
|
%
|
|
$
|
275
|
|
|
|
September 2016 - 2046
|
|
September 2022
|
|
6.709
|
%
|
|
$
|
450
|
|
|
|
September 2017 - 2047
|
|
September 2023
|
|
6.445
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depending on market conditions, liability management actions or other factors, Occidental may enter into offsetting interest rate swap positions or settle or amend certain or all of the currently outstanding interest rate swaps. In the first quarter of 2020, Occidental extended all 2020 mandatory termination dates to 2021 or thereafter.
Derivative settlements and collateralization are classified as cash flow from operating activities unless the derivatives contain an other-than-insignificant financing element, in which case the settlements and collateralization are classified as cash flows from financing activities. Due to the liability position of the interest rate derivatives at the date of the Acquisition, the interest rate derivatives in Occidental’s portfolio contain an other-than-insignificant financing element, and therefore, any settlements, collateralization or cash payments related to interest rate derivatives are classified as cash flow from financing activities. Net cash payments related to settlements, and collateralization of interest rate swap agreements were $50 million and $99 million in the first quarter of 2020, respectively.
MARKETING DERIVATIVES
Occidental's marketing derivative instruments not designated as hedges are physical and financial forward contracts which typically settle within three months. A substantial majority of Occidental's physically settled derivative contracts are index-based and carry no mark-to-market valuation in earnings. These instruments settled at a weighted average contract price of $41.58 per barrel and $1.25 per thousand cubic feet (Mcf) for crude oil and natural gas, respectively, at March 31, 2020. The weighted-average contract price was $60.60 per barrel and $2.17 per Mcf for crude oil and natural gas, respectively, at December 31, 2019. Net gains and losses associated with marketing derivative instruments not designated as hedging instruments are recognized currently in net sales.
The following table summarizes net long/(short) volumes associated with the outstanding marketing commodity derivatives not designated as hedging instruments.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Crude Oil Commodity Contracts
|
|
|
|
|
|
Volume (MMBBL)
|
|
29
|
|
|
55
|
|
|
Natural Gas Commodity Contracts
|
|
|
|
|
|
Volume (Bcf)
|
|
(122)
|
|
|
(128)
|
|
THE WARRANTS
The Warrants issued with the Preferred Stock in connection with the financing of the Acquisition are exercisable at the holder's option, in whole or in part, until the first anniversary of the date on which no shares of Preferred Stock remain outstanding at which time the Warrants expire. The holders of the Warrants may require net cash settlement if certain shareholder and regulatory approvals to issue shares of Occidental's common stock underlying the Warrants are not obtained on a timely basis. The fair value of the Warrants is remeasured at each reporting date using the Black Scholes option model. The following inputs are used in the Black Scholes option model: the expected life is based on the estimated term of the Warrants, the volatility factor is based on historical volatilities of Occidental common stock, and the call option price for Occidental common stock at $62.50.
DERIVATIVES DESIGNATED AS HEDGING INSTRUMENTS
Net gains and losses attributable to derivative instruments subject to cash flow hedge accounting reside in accumulated other comprehensive loss and are reclassified to earnings as the transactions to which the derivatives relate are recognized in earnings.
CASH FLOW HEDGES
Occidental’s marketing operations store natural gas purchased from third parties at Occidental’s leased storage facilities. Derivative instruments are used to fix margins on the future sales of the stored volumes. As of March 31, 2020 and December 31, 2019, cash flow hedges were immaterial.
FAIR VALUE OF DERIVATIVES
The following tables present the fair values of Occidental’s outstanding derivatives. Fair values are presented at gross amounts below, including when the derivatives are subject to master netting arrangements, and are presented on a net basis in the Consolidated Condensed Balance Sheets.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
Fair-Value Measurements Using
|
|
|
|
|
|
Netting (a)
|
|
Total Fair Value
|
|
Balance Sheet Classifications
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
Oil Collars and Calls
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
$
|
—
|
|
|
$
|
834
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
834
|
|
|
Deferred credits and other liabilities - other
|
—
|
|
|
(58)
|
|
|
—
|
|
|
—
|
|
|
(58)
|
|
|
Marketing Derivatives
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
6,438
|
|
|
392
|
|
|
—
|
|
|
(6,445)
|
|
|
385
|
|
|
Long-term receivables and other assets, net
|
91
|
|
|
19
|
|
|
—
|
|
|
(91)
|
|
|
19
|
|
|
Accrued liabilities
|
(6,170)
|
|
|
(367)
|
|
|
—
|
|
|
6,445
|
|
|
(92)
|
|
|
Deferred credits and other liabilities - other
|
(91)
|
|
|
(1)
|
|
|
—
|
|
|
91
|
|
|
(1)
|
|
|
Interest Rate Swaps
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Long-term receivables and other assets, net
|
—
|
|
|
1
|
|
|
—
|
|
|
—
|
|
|
1
|
|
|
Accrued liabilities
|
—
|
|
|
(90)
|
|
|
—
|
|
|
—
|
|
|
(90)
|
|
|
Deferred credits and other liabilities - other
|
—
|
|
|
(1,954)
|
|
|
—
|
|
|
—
|
|
|
(1,954)
|
|
|
Warrants
|
|
|
|
|
|
|
|
|
|
|
Deferred credits and other liabilities - other
|
—
|
|
|
(23)
|
|
|
—
|
|
|
—
|
|
|
(23)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
Oil Collars and Calls
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
$
|
—
|
|
|
$
|
92
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
92
|
|
|
Deferred credits and other liabilities - other
|
—
|
|
|
(160)
|
|
|
—
|
|
|
—
|
|
|
(160)
|
|
|
Marketing Derivatives
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
945
|
|
|
79
|
|
|
—
|
|
|
(973)
|
|
|
51
|
|
|
Long-term receivables and other assets, net
|
4
|
|
|
12
|
|
|
—
|
|
|
(4)
|
|
|
12
|
|
|
Accrued liabilities
|
(1,008)
|
|
|
(44)
|
|
|
—
|
|
|
973
|
|
|
(79)
|
|
|
Deferred credits and other liabilities - other
|
(4)
|
|
|
(1)
|
|
|
—
|
|
|
4
|
|
|
(1)
|
|
|
Interest Rate Swaps
|
|
|
|
|
|
|
|
|
|
|
Other current assets
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
Long-term receivables and other assets, net
|
—
|
|
|
5
|
|
|
—
|
|
|
—
|
|
|
5
|
|
|
Accrued liabilities
|
—
|
|
|
(657)
|
|
|
—
|
|
|
—
|
|
|
(657)
|
|
|
Deferred credits and other liabilities - other
|
—
|
|
|
(776)
|
|
|
—
|
|
|
—
|
|
|
(776)
|
|
|
Warrants
|
|
|
|
|
|
|
|
|
|
|
Deferred credits and other liabilities - other
|
—
|
|
|
(107)
|
|
|
—
|
|
|
—
|
|
|
(107)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(a)These amounts do not include collateral.
As of March 31, 2020, and December 31, 2019, $204 million and $104 million of collateral had been netted against derivative liabilities related to interest rate swaps, respectively. Subsequent to March 31, 2020, Occidental was required to post an additional $225 million in cash collateral related to the interest rate swaps. As of March 31, 2020, Occidental had received $212 million of collateral from brokers, which is netted with derivative assets. Initial margin of $65 million was deposited with brokers as of December 31, 2019 related to marketing derivatives.
GAINS AND LOSSES ON DERIVATIVES
The following table presents the effect of Occidental's derivative instruments on the Consolidated Condensed Statements of Operations:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
Three months ended March 31,
|
|
|
|
Income Statement Classification
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
Oil Collars and Calls
|
|
|
|
|
|
Net sales
|
|
$
|
952
|
|
|
$
|
—
|
|
|
Marketing Derivatives
|
|
|
|
|
|
Net sales (a)
|
|
410
|
|
|
564
|
|
|
Interest Rate Swaps
|
|
|
|
|
|
Losses on interest rate swaps and warrants, net
|
|
(669)
|
|
|
—
|
|
|
Warrants
|
|
|
|
|
|
Gains on interest rate swaps and warrants, net
|
|
84
|
|
|
—
|
|
(a) Includes derivative and non-derivative marketing activity.
CREDIT RISK
Occidental's counterparty credit risk related to the physical delivery of energy commodities results from its customers' potential inability to meet their settlement commitments. Occidental manages credit risk by selecting counterparties that it believes to be financially strong, by entering into netting arrangements with counterparties and by requiring collateral or other credit risk mitigants, as appropriate. Occidental actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits and monitors credit exposures against those assigned limits. Occidental also enters into future contracts through regulated exchanges with select clearinghouses and brokers, which are subject to minimal credit risk as a significant portion of these transactions settle on a daily margin basis.
Certain of Occidental's over-the-counter derivative instruments contain credit-risk-contingent features, primarily tied to credit ratings for Occidental or its counterparties, which may affect the amount of collateral that each party would need to post. The aggregate fair value of derivative instruments with credit-risk-related contingent features for which a net liability position existed at March 31, 2020, was $244 million (net of $204 million collateral), primarily related to acquired interest-rate swaps, and $787 million (net of $169 million of collateral) at December 31, 2019.
|
|
|
|
|
NOTE 7 - 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.
FAIR-VALUES - RECURRING
In January 2012, Occidental entered into a long-term contract to purchase carbon dioxide (CO2). This contract contains a price adjustment clause that is linked to changes in NYMEX crude oil prices. Occidental determined that the portion of this contract linked to NYMEX oil prices is not clearly and closely related to the host contract, and Occidental therefore bifurcated this embedded pricing feature from its host contract and accounts for it at fair value in the Consolidated Condensed Financial Statements.
The following tables provide fair-value measurement information for embedded derivatives that are measured on a recurring basis:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
Fair-Value Measurements Using
|
|
|
|
|
|
|
|
|
|
Embedded derivatives
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Netting and
Collateral
|
|
Total Fair
Value
|
|
As of March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
105
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
105
|
|
|
Deferred credits and other liabilities - other
|
|
—
|
|
|
67
|
|
|
—
|
|
|
—
|
|
|
67
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accrued liabilities
|
|
$
|
—
|
|
|
$
|
40
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
40
|
|
|
Deferred credits and other liabilities - other
|
|
—
|
|
|
49
|
|
|
—
|
|
|
—
|
|
|
49
|
|
FAIR-VALUES - NONRECURRING - IMPAIRMENTS
Given (1) the abrupt decline in oil commodity prices beginning in March 2020 caused by a collapse in demand for oil and natural gas due to the slowdown in worldwide economic activity attributable to the COVID-19 pandemic and government-imposed travel restrictions and business closures and the institution of quarantining and other restrictions on movement in many communities worldwide and a dispute among the Organization of the Petroleum Exporting Countries and its broader partners (OPEC+) regarding the level of oil production and (2) changes to management's 2020 exploration and development plans resulting therefrom, Occidental's oil and gas segment recognized pre-tax impairment and related charges of $581 million primarily related to both proved and unproved oil and gas properties and a lower of cost or net realizable value adjustment for crude inventory. Occidental identified certain proved oil and gas assets which would be significantly impacted in the near term due to declines in prices and changes in management's 2020 development plans and assessed those assets for impairment. Occidental recorded proved property impairments of $293 million related to certain assets in Oman, Bolivia and the Gulf of Mexico. The fair value of the proved properties was measured based on the income approach, which incorporated assumptions involving expectations of future cash flows. These assumptions included estimates of future product prices, which Occidental based on a combination of market information and published industry resources, estimates of oil and gas reserves, estimates of future expected operating and capital costs and a risk-adjusted discount rate of 10 percent. These inputs are categorized as Level 3 in the fair value hierarchy. Unproved property impairments, of approximately $241 million, primarily relate to domestic onshore undeveloped leases and offshore Gulf of Mexico where Occidental no longer intends to pursue exploration, appraisal or development activities primarily due to the reduction in near-term capital plans.
Since March 31, 2020, the near-term futures price for oil has continued to decrease as inventory and supply imbalances have magnified as a result of the pandemic related drop in demand for oil. If the macro-economic conditions that exist as of the date of this filing continue or worsen, it is likely that most, if not all, of Occidental’s oil and properties will be tested for impairment during the second quarter of 2020, which could result in additional non-cash asset impairments, and such impairments could be material to Occidental’s consolidated financial statements.
GOODWILL
As of December 31, 2019, Occidental had $1.2 billion of goodwill related to its ownership in WES. Significant declines in the market value of WES’s publicly traded units resulted in management’s determination that more likely than not the fair value of the reporting unit was significantly less than its carrying value and the remaining $1.2 billion in goodwill was fully impaired in the first quarter of 2020. The market value of WES's publicly traded units is considered a Level 1 input.
The following table summarizes Occidental's outstanding debt, including finance lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
March 31, 2020
|
|
December 31, 2019
|
|
Total borrowings at face value
|
|
$
|
37,401
|
|
|
$
|
37,401
|
|
|
Adjustments to book value:
|
|
|
|
|
|
|
|
Unamortized premium, net
|
|
892
|
|
|
914
|
|
|
Debt issuance costs
|
|
(117)
|
|
|
(125)
|
|
|
Long-term finance leases
|
|
308
|
|
|
347
|
|
|
Current finance leases
|
|
38
|
|
|
51
|
|
|
Total debt and finance leases
|
|
|
38,522
|
|
|
38,588
|
|
|
Less current maturities of long-term debt
|
|
(2,464)
|
|
|
(51)
|
|
|
Long-term debt, net
|
|
|
$
|
36,058
|
|
|
$
|
38,537
|
|
DEBT ACTIVITY
On March 23, 2020, Occidental amended the sole financial covenant in its revolving credit facility (RCF) and Term Loan by revising the definition of "Total Capitalization" within each agreement to exclude any non-cash write-downs, impairments and related charges occurring after September 30, 2019. The amendments provide Occidental with additional flexibility in the event of any such write-downs, impairments or other changes under the ratio of Total Debt to Total Capitalization covenant.
FAIR VALUE OF DEBT
The estimated fair value of Occidental’s debt as of March 31, 2020, was $21.8 billion. The majority of Occidental's debt is classified as Level 1, with $2.3 billion classified as Level 2. At December 31, 2019, the estimated fair value of Occidental's debt was $38.8 billion. The decline in fair value reflects the market's uncertainty regarding the ongoing impact to Occidental from COVID-19 related reductions in oil and gas demand and the resulting historically low oil price environment.
|
|
|
|
|
NOTE 9 - LEASE COMMITMENTS
|
Occidental’s operating lease agreements include leases for oil and gas exploration and development equipment, including offshore and onshore drilling rigs and storage platforms of $105 million, compressors of $154 million and other field equipment of $341 million, which are recorded gross on the Consolidated Condensed Balance Sheet and in the lease cost disclosures below. Contract expiration terms generally range from two to eight years. Further, actual expenditures are netted against joint-interest recoveries on the income statement through the normal joint-interest billing process. Occidental’s leases also include pipelines, rail cars, storage facilities, easements and real estate of $619 million, which typically are not associated with joint-interest recoveries. Real estate leases have contract expiration terms ranging from one to thirteen years.
Occidental’s finance lease agreements include leases for oil and gas exploration and development equipment, as well as real estate offices, compressors and field equipment of approximately $347 million.
The following table presents lease balances and their location on the Consolidated Condensed Balance Sheet at March 31, 2020 and December 31, 2019:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
Balance sheet location
|
|
2020
|
|
2019
|
|
Assets:
|
|
|
|
|
|
|
|
Operating
|
|
Operating lease assets
|
|
$
|
1,193
|
|
|
$
|
1,385
|
|
|
Finance
|
|
Property, plant and equipment
|
|
343
|
|
|
397
|
|
|
Total lease assets
|
|
|
|
$
|
1,536
|
|
|
$
|
1,782
|
|
|
|
|
|
|
|
|
|
|
Liabilities:
|
|
|
|
|
|
|
|
Current
|
|
|
|
|
|
|
|
Operating
|
|
Current operating lease liabilities
|
|
$
|
453
|
|
|
$
|
569
|
|
|
Finance
|
|
Current maturities of long-term debt
|
|
38
|
|
|
51
|
|
|
Non-current
|
|
|
|
|
|
|
|
Operating
|
|
Deferred credits and other liabilities - Operating lease liabilities
|
|
768
|
|
|
854
|
|
|
Finance
|
|
Long-term debt, net
|
|
308
|
|
|
347
|
|
|
Total lease liabilities
|
|
|
|
$
|
1,567
|
|
|
$
|
1,821
|
|
At March 31, 2020, Occidental's leases expire based on the following schedule:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Operating
|
|
Finance
|
|
|
|
millions
|
|
Leases (a)
|
|
Leases (b)
|
|
Total
|
|
Remainder of 2020
|
|
$
|
382
|
|
|
$
|
31
|
|
|
$
|
413
|
|
|
2021
|
|
386
|
|
|
37
|
|
|
423
|
|
|
2022
|
|
136
|
|
|
34
|
|
|
170
|
|
|
2023
|
|
102
|
|
|
32
|
|
|
134
|
|
|
2024
|
|
81
|
|
|
30
|
|
|
111
|
|
|
Thereafter
|
|
248
|
|
|
261
|
|
|
509
|
|
|
Total lease payments
|
|
1,335
|
|
|
|
425
|
|
|
1,760
|
|
|
Less: Interest
|
|
(114)
|
|
|
(79)
|
|
|
(193)
|
|
|
Total lease liabilities
|
|
$
|
1,221
|
|
|
|
$
|
346
|
|
|
$
|
1,567
|
|
(a) The weighted-average remaining lease term is 4.8 years and the weighted-average discount rate is 2.85%.
(b) The weighted-average remaining lease term is 11.8 years and the weighted-average discount rate is 3.39%.
The following tables present Occidental's total lease cost and classifications, as well as cash paid for amounts included in the measurement of operating and finance lease liabilities:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
|
Three months ended March 31,
|
|
|
|
Lease cost classification (a)
|
|
2020
|
|
2019
|
|
Operating lease costs (b):
|
|
|
|
|
|
Property, plant and equipment, net
|
|
$
|
85
|
|
|
$
|
91
|
|
|
Cost of sales
|
|
143
|
|
|
77
|
|
|
Selling, general and administrative expenses
|
|
21
|
|
|
16
|
|
|
Finance lease cost:
|
|
|
|
|
|
Amortization of ROU assets
|
|
4
|
|
|
—
|
|
|
Interest on lease liabilities
|
|
3
|
|
|
—
|
|
|
Total lease cost
|
|
$
|
256
|
|
|
$
|
184
|
|
(a) Amounts reflected are gross before joint-interest recoveries.
(b) Includes short-term lease cost of $54 million and $86 million for the three months ended March 31, 2020 and 2019,
respectively. Includes variable lease cost of $38 million and $31 million for the three months ended March 31, 2020
and 2019, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31,
|
|
|
|
millions
|
|
2020
|
|
2019
|
|
Operating cash flows
|
|
$
|
145
|
|
|
$
|
48
|
|
|
Investing cash flows
|
|
$
|
36
|
|
|
$
|
19
|
|
|
Financing cash flows
|
|
$
|
9
|
|
|
$
|
—
|
|
|
|
|
|
|
NOTE 10 - LAWSUITS, CLAIMS, COMMITMENTS AND CONTINGENCIES
|
LEGAL MATTERS
Occidental or certain of its subsidiaries are involved, in the normal course of business, in lawsuits, claims and other legal proceedings that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. Occidental or certain of its subsidiaries also are involved in proceedings under the Comprehensive Environmental Response, Compensation and Liability Act (CERCLA) and similar federal, state, local and foreign environmental laws. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties and injunctive relief. Usually Occidental or such subsidiaries are among many companies in these environmental proceedings and have to date been successful in sharing response costs with other financially sound companies. Further, some lawsuits, claims and legal proceedings involve acquired or disposed assets with respect to which a third party or Occidental retains liability or indemnifies the other party for conditions that existed prior to the transaction.
In accordance with applicable accounting guidance, Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Reserve balances for matters, other than for environmental remediation, that satisfy this criteria as of March 31, 2020, and December 31, 2019, were not material to Occidental’s Consolidated Condensed Balance Sheets.
In 2016, Occidental received payments from the Republic of Ecuador of approximately $1.0 billion pursuant to a November 2015 arbitration award for Ecuador’s 2006 expropriation of Occidental's Participation Contract for Block 15. The awarded amount represented a recovery of 60 percent of the value of Block 15. In 2017, Andes Petroleum Ecuador Ltd. (Andes) filed a demand for arbitration, claiming it is entitled to a 40 percent share of the judgment amount obtained by Occidental. Occidental contends that Andes is not entitled to any of the amounts paid under the 2015 arbitration award because Occidental’s recovery was limited to Occidental’s own 60 percent economic interest in the block. The merits hearing is scheduled for May 2020. The hearing date is subject to change due to the COVID-19 pandemic. Occidental intends to vigorously defend against this claim in arbitration.
On May 30, 2019, a complaint was filed in the Court of Chancery of the State of Delaware by purported Occidental stockholders High River Limited Partnership, Icahn Partners Master Fund LP and Icahn Partners LP (the Icahn Complainants), captioned High River Ltd. P’ship v. Occidental Petroleum Corp., C.A. No. 2019-0403-JRS, seeking inspection of Occidental’s books and records pursuant to Section 220 of the Delaware General Corporation Law (the Section 220 Demand). On June 14, 2019, Occidental filed an answer to the complaint in the Court of Chancery of the State of Delaware. A trial was held on September 20, 2019, and the court dismissed the Icahn Complaint. The Icahn Complainants appealed and oral arguments occurred in February 2020. On March 25, 2020, as part of the Director Appointment and Nomination Agreement, the Icahn Complainants agreed to (i) withdraw and not renew its Section 220 Demand and (ii) pursuant to the Rules of the Supreme Court of the State of Delaware, (1) stipulate to the dismissal with prejudice of the appeal filed by the Icahn Complainants in the Supreme Court of the State of Delaware in the case of High River Ltd. P’ship v. Occidental Petroleum Corp. and (2) use reasonable best efforts to obtain Court approval of such stipulation of dismissal.
In August 2019, Sanchez Energy Corporation and certain of its affiliates (Sanchez) filed voluntary petitions for reorganization under Chapter 11 of the United States Bankruptcy Code. Sanchez is a party to agreements with Anadarko as a result of its 2017 purchase of Anadarko's Eagle Ford Shale assets. In a recent filing in the bankruptcy proceeding, Sanchez stated that it intends to reject all agreements related to the purchase of Anadarko’s Eagle Ford Shale assets. If Sanchez is permitted to reject certain of the agreements, then Anadarko may owe deficiency payments to various third parties. The Company intends to defend vigorously any attempt by Sanchez to reject the agreements.
The ultimate outcome and impact of outstanding lawsuits, claims and proceedings on Occidental cannot be predicted. Management believes that the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on Occidental's Consolidated Condensed Balance Sheets. If unfavorable outcomes of these matters were to occur, future results of operations or cash flows for any particular quarterly or annual period could be materially adversely affected. Occidental’s estimates are based on information known about the legal matters and its experience in contesting, litigating and settling similar matters. Occidental reassesses the probability and estimability of contingent losses as new information becomes available.
TAX MATTERS
During the course of its operations, Occidental is subject to audit by tax authorities for varying periods in various federal, state, local and foreign tax jurisdictions. For the legacy Occidental group, taxable years through 2016 for U.S. federal income tax purposes have been audited by the U.S. Internal Revenue Service (IRS) pursuant to its Compliance Assurance Program and subsequent taxable years are currently under review. Taxable years through 2009 have been audited for state income tax purposes. While a single foreign tax jurisdiction is open for 2002, all other significant audit
matters in foreign jurisdictions have been resolved through 2010. During the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law.
For Anadarko, its taxable years through 2016 for U.S. federal and state income tax purposes have been audited by the IRS and respective state taxing authorities. There are outstanding significant audit matters in one foreign jurisdiction. As stated above, during the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law. Other than the matter discussed below, Occidental believes that the resolution of these outstanding tax matters would not have a material adverse effect on its consolidated financial position or results of operations. Anadarko received an $881 million tentative refund in 2016 related to its $5.2 billion Tronox Adversary Proceeding settlement payment in 2015. In September 2018, Anadarko received a statutory notice of deficiency from the IRS disallowing the net operating loss carryback and rejecting Anadarko’s refund claim. As a result, Anadarko filed a petition with the U.S. Tax Court to dispute the disallowances in November 2018. The case is currently in the IRS appeals process. If the matter is not resolved in the IRS appeals process, Occidental expects to continue pursuing resolution in the U.S. Tax Court. While Occidental believes it is entitled to this refund, in accordance with ASC 740’s guidance on the accounting for uncertain tax positions, as of March 31, 2020, Occidental has recorded no tax benefit on the tentative cash tax refund of $881 million. As a result, should Occidental not ultimately prevail on the issue, there would be no additional tax expense recorded for financial statement purposes other than future interest. A liability was recorded in deferred credits and other liabilities - other at December 31, 2019, for the amount to be repaid plus interest in the event Occidental does not prevail.
On March 27, 2020, the President signed into law the Coronavirus Aid, Relief and Economic Security Act (hereafter, CARES Act), an economic stimulus package in response to the COVID-19 pandemic. The CARES Act contains several corporate income tax provisions, including provisions allowing for immediate refund of remaining unutilized AMT credits as well as allowing a 5-year carryback of net operating losses generated in tax years 2018, 2019, and 2020. Occidental anticipates a cash refund of approximately $195 million as a result of the aforementioned AMT credit and NOL carryback provisions enacted as of March 31, 2020. However, Occidental does not currently expect the various provisions of the CARES Act to have a material effect on current income tax expense or the realizability of deferred income tax assets. Occidental will continue to monitor additional guidance issued by the U.S. Treasury Department and the Internal Revenue Service.
INDEMNITIES TO THIRD PARTIES
Occidental, its subsidiaries, or both, have indemnified various parties against specified liabilities those parties might incur in the future in connection with purchases and other transactions that they have entered into with Occidental. These indemnities usually are contingent upon the other party incurring liabilities that reach specified thresholds. As of March 31, 2020, Occidental is not aware of circumstances that it believes would reasonably be expected to lead to indemnity claims that would result in payments materially in excess of reserves.
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NOTE 11 - ENVIRONMENTAL LIABILITIES AND EXPENDITURES
|
Occidental’s operations are subject to stringent federal, state, local and international laws and regulations related to improving or maintaining environmental quality. The laws that require or address environmental remediation, including CERCLA and similar federal, state, local and international laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites. OPC or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at operating, closed and third-party sites. Remedial activities may include one or more of the following: investigation involving sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal; or operation and maintenance of remedial systems. The environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties, injunctive relief and government oversight costs.
ENVIRONMENTAL REMEDIATION
As of March 31, 2020, Occidental participated in or monitored remedial activities or proceedings at 177 sites. The following table presents Occidental’s current and non-current environmental remediation liabilities as of March 31, 2020. The current portion, $160 million, is included in accrued liabilities and the non-current portion, $1.0 billion, in deferred credits and other liabilities - environmental remediation liabilities.
Occidental’s environmental remediation sites are grouped into four categories: sites listed or proposed for listing by the U.S. Environmental Protection Agency (EPA) on the CERCLA National Priorities List (NPL) and three categories of non-NPL sites — third-party sites, Occidental-operated sites and closed or non-operated Occidental sites.
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|
|
|
|
|
|
|
|
|
|
|
|
|
millions, except number of sites
|
Number of Sites
|
|
Remediation Balance
|
|
NPL sites
|
37
|
|
|
$
|
459
|
|
|
Third-party sites
|
73
|
|
|
301
|
|
|
Occidental-operated sites
|
17
|
|
|
152
|
|
|
Closed or non-operated Occidental sites
|
50
|
|
|
265
|
|
|
Total
|
177
|
|
|
$
|
1,177
|
|
As of March 31, 2020, Occidental’s environmental remediation liabilities exceeded $10 million each at 19 of the 177 sites described above, and 101 of the sites had liabilities from zero to $1 million each. Based on current estimates, Occidental expects to expend funds corresponding to approximately 45 percent of the period-end remediation balance at the sites described above over the next three to four years and the remaining balance at these sites over the subsequent 10 or more years. Occidental believes its range of reasonably possible additional losses beyond those liabilities recorded for environmental remediation at these sites could be up to $1.1 billion. The status of Occidental's involvement with the sites and related significant assumptions, including those sites indemnified by Maxus Energy Corporation (Maxus), has not changed materially since December 31, 2019.
MAXUS ENVIRONMENTAL SITES
When Occidental acquired Diamond Shamrock Chemicals Company (DSCC) in 1986, Maxus, a subsidiary of YPF S.A. (YPF), agreed to indemnify Occidental for a number of environmental sites, including the Diamond Alkali Superfund Site (Site) along a portion of the Passaic River. On September 17, 2016, Maxus and several affiliated companies filed for Chapter 11 bankruptcy in Federal District Court in the State of Delaware. Prior to filing for bankruptcy, Maxus defended and indemnified Occidental in connection with clean-up and other costs associated with the sites subject to the indemnity, including the Site.
In March 2016, the EPA issued a Record of Decision (ROD) specifying remedial actions required for the lower 8.3 miles of the Lower Passaic River. The ROD does not address any potential remedial action for the upper nine miles of the Lower Passaic River or Newark Bay. During the third quarter of 2016, and following Maxus’s bankruptcy filing, Occidental and the EPA entered into an Administrative Order on Consent (AOC) to complete the design of the proposed clean-up plan outlined in the ROD at an estimated cost of $165 million. The EPA announced that it will pursue similar agreements with other potentially responsible parties.
Occidental has accrued a reserve relating to its estimated allocable share of the costs to perform the design and remediation called for in the AOC and the ROD, as well as for certain other Maxus-indemnified sites. Occidental's accrued estimated environmental reserve does not consider any recoveries for indemnified costs. Occidental’s ultimate share of this liability may be higher or lower than the reserved amount, and is subject to final design plans and the resolution of Occidental's allocable share with other potentially responsible parties. Occidental continues to evaluate the costs to be incurred to comply with the AOC, the ROD, and to perform remediation at other Maxus-indemnified sites in light of the Maxus bankruptcy and the share of ultimate liability of other potentially responsible parties. In June 2018, Occidental filed a complaint under CERCLA in Federal District Court in the State of New Jersey against numerous potentially responsible parties for reimbursement of amounts incurred or to be incurred to comply with the AOC, the ROD, or to perform other remediation activities at the Site.
In June 2017, the court overseeing the Maxus bankruptcy approved a Plan of Liquidation (Plan) to liquidate Maxus and create a trust to pursue claims against YPF, Repsol, and others to satisfy claims by Occidental and other creditors for past and future cleanup and other costs. In July 2017, the court-approved Plan became final and the trust became effective. Among other responsibilities, the trust will pursue claims against YPF, Repsol and others and distribute assets to Maxus' creditors in accordance with the trust agreement and Plan. In June 2018, the trust filed its complaint against YPF and Repsol in Delaware bankruptcy court asserting claims based upon, among other things, fraudulent transfer and alter ego. On February 15, 2019, the bankruptcy court denied Repsol's and YPF's motions to dismiss the complaint.
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NOTE 12 - RETIREMENT AND POSTRETIREMENT BENEFIT PLANS
|
Occidental has various defined benefit pension plans for certain domestic union, non-union hourly and foreign national employees. In addition, Occidental also provides medical and other benefits for certain active, retired and disabled employees and their eligible dependents.
In conjunction with the Acquisition, Occidental acquired certain Anadarko contributory and non-contributory defined benefit pension plans, which include both qualified and supplemental plans, and plans that provide health care and life insurance benefits for certain retired employees. The Anadarko pension and postretirement obligations were remeasured as of the Acquisition date. The disclosures below exclude the Africa Assets classified as held for sale as of March 31, 2020.
Net periodic benefit costs related to pension benefits included a settlement gain of $9 million, a curtailment gain of $5 million and a $16 million cost of special termination benefits for the three months ended March 31, 2020. The settlement and curtailment gains and the cost of special termination benefits for 2020 primarily relate to the separation program initiated in conjunction with the Acquisition. Excluding these items, net periodic benefit costs related to pension benefits were $11 million and $2 million for the three months ended March 31, 2020 and 2019, respectively.
Net periodic benefit costs related to postretirement benefits were $20 million and $14 million for the three months ended March 31, 2020 and 2019, respectively.
Occidental contributed approximately $91 million and $1 million in the three months ended March 31, 2020 and 2019, respectively, to its defined benefit plans. The increase in contributions is primarily due to distributions from the Anadarko supplemental plans related to the severance program described above.
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NOTE 13 - EARNINGS PER SHARE AND STOCKHOLDERS' EQUITY
|
The following table presents the calculation of basic and diluted net income (loss) attributable to common stockholders per share:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended
March 31,
|
|
|
|
millions except per-share amounts
|
|
2020
|
|
2019
|
|
|
|
|
|
|
|
Net income (loss)
|
|
$
|
(2,013)
|
|
|
$
|
631
|
|
|
Less: Preferred stock dividends
|
|
(219)
|
|
|
—
|
|
|
Net income (loss) attributable to common stock
|
|
(2,232)
|
|
|
631
|
|
|
Less: Net income allocated to participating securities
|
|
—
|
|
|
(3)
|
|
|
Net income (loss) attributable to common stock, net of participating securities
|
|
$
|
(2,232)
|
|
|
$
|
628
|
|
|
|
|
|
|
|
|
Weighted average number of basic shares
|
|
896.7
|
|
|
748.9
|
|
|
|
|
|
|
|
|
Basic earnings (loss) per common share
|
|
$
|
(2.49)
|
|
|
$
|
0.84
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stock, net of participating securities
|
|
$
|
(2,232)
|
|
|
$
|
628
|
|
|
|
|
|
|
|
|
Weighted-average number of basic shares
|
|
896.7
|
|
|
748.9
|
|
|
Dilutive securities
|
|
—
|
|
|
1.6
|
|
|
Total diluted weighted-average common shares
|
|
896.7
|
|
|
750.5
|
|
|
|
|
|
|
|
|
Net income (loss) attributable to common stockholders per share—diluted
|
|
$
|
(2.49)
|
|
|
$
|
0.84
|
|
PREFERRED STOCK
In connection with the Acquisition, Occidental issued 100,000 shares of series A preferred stock (the Preferred Stock), having a face value of $100,000 per share. Dividends on the Preferred Stock will accrue on the face value at a rate per annum of 8 percent, but will be paid only when, as and if declared by Occidental’s Board of Directors. The Board of Directors will assess market conditions and Occidental's financial position on a quarterly basis to determine whether the dividend on the Preferred Stock will be paid in shares of common stock, in cash or a combination of shares of common stock and cash. At any time, when such dividends have not been paid in full, the unpaid amounts will accrue dividends, compounded quarterly, at a rate per annum of 9 percent. Following the payment in full of any accrued but unpaid dividends, the dividend rate will remain at 9 percent per annum. If preferred dividends are not paid in full Occidental is prohibited from paying dividends on common stock.
In March 2020, the Board of Directors elected to declare its quarterly dividend on the Preferred Stock payable in April 2020 in shares of common stock. In accordance with the Certificate of Designations, the number of shares issued was calculated based on 90 percent of the average of the volume weighted average price over each of the ten consecutive trading days following the dividend declaration date. On April 15, 2020, Occidental issued approximately 17 million shares of common stock to the holders of Preferred Stock as of March 31, 2020. The shares of common stock associated with the April stock dividend and the potential shares of common stock associated with the Warrants were excluded from dilutive shares outstanding for the three months ended March 31, 2020, as they would have been anti-dilutive.
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|
|
|
|
NOTE 14 - INDUSTRY SEGMENTS
|
Occidental conducts its operations through three segments: (1) oil and gas; (2) chemical; and (3) midstream and marketing. Income taxes, interest income, interest expense, environmental remediation expenses, Anadarko acquisition-related costs and unallocated corporate expenses are included under Corporate and Eliminations. 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 table presents Occidental’s industry segments:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
millions
|
Oil and
Gas
|
|
Chemical
|
|
Midstream and Marketing
|
|
Corporate
and
Eliminations
|
|
Total
|
|
Three months ended March 31, 2020
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
4,857
|
|
|
$
|
962
|
|
|
$
|
790
|
|
|
$
|
(199)
|
|
|
$
|
6,410
|
|
|
Income (loss) from continuing operations before income taxes
|
$
|
179
|
|
(a)
|
$
|
186
|
|
|
$
|
(1,287)
|
|
(b)
|
$
|
(1,173)
|
|
(c)
|
$
|
(2,095)
|
|
|
Income tax benefit
|
—
|
|
|
—
|
|
|
—
|
|
|
82
|
|
|
82
|
|
|
Income (loss) from continuing operations
|
$
|
179
|
|
|
$
|
186
|
|
|
$
|
(1,287)
|
|
|
$
|
(1,091)
|
|
|
$
|
(2,013)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, 2019
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net sales
|
$
|
2,351
|
|
|
$
|
1,059
|
|
|
$
|
816
|
|
|
$
|
(222)
|
|
|
$
|
4,004
|
|
|
Income (loss) from continuing operations before income taxes
|
$
|
484
|
|
|
$
|
265
|
|
|
$
|
279
|
|
|
$
|
(172)
|
|
|
$
|
856
|
|
|
Income tax expense
|
—
|
|
|
—
|
|
|
—
|
|
|
(225)
|
|
|
(225)
|
|
|
Income (loss) from continuing operations
|
$
|
484
|
|
|
$
|
265
|
|
|
$
|
279
|
|
|
$
|
(397)
|
|
|
$
|
631
|
|
(a) Includes $317 million related to domestic asset impairments and other charges, $952 million gain on the oil collars and calls and $264 million related to foreign asset impairments for the three months ended March 31, 2020.
(b) Includes $1.4 billion impairment related to the write-off of goodwill and a loss from an equity investment related to WES's writeoff of its goodwill for the three months ended March 31, 2020.
(c) Includes $148 million in expenses related to Anadarko acquisition-related costs, $669 million loss on interest rate swaps and $84 million in warrant gains for the three months ended March 31, 2020.