Industry Segments

9 Months Ended

Sep. 30, 2013

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 (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, 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.  The segment also 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 segment 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):

	Oil and Gas		Chemical		Midstream and Marketing		Corporate and Eliminations			Total
Three months ended September 30, 2013
Net sales	$	5,018	$	1,200	$	442	$	(211	)	$	6,449
Pretax operating profit (loss)	$	2,363	$	181	$	212	$	(131	)(a)	$	2,625
Income taxes	—		—		—		(1,037		)(b)	(1,037		)
Discontinued operations, net	—		—		—		(5		)	(5		)
Net income (loss)	$	2,363	$	181	$	212	$	(1,173	)	$	1,583
Three months ended September 30, 2012
Net sales	$	4,635	$	1,119	$	389	$	(178	)	$	5,965
Pretax operating profit (loss)	$	2,026	$	162	$	156	$	(110	)(a)	$	2,234
Income taxes	—		—		—		(855		)(b)	(855		)
Discontinued operations, net	—		—		—		(4		)	(4		)
Net income (loss)	$	2,026	$	162	$	156	$	(969	)	$	1,375

	Oil and Gas		Chemical			Midstream and Marketing		Corporate and Eliminations			Total
Nine months ended September 30, 2013
Net sales	$	14,179	$	3,562		$	1,164	$	(622	)	$	18,283
Pretax operating profit (loss)	$	6,383	$	615	(c)	$	475	$	(417	)(a)	$	7,056
Income taxes	—		—			—		(2,782		)(b)	(2,782		)
Discontinued operations, net	—		—			—		(14		)	(14		)
Net income (loss)	$	6,383	$	615		$	475	$	(3,213	)	$	4,260
Nine months ended September 30, 2012
Net sales	$	14,032	$	3,439		$	1,044	$	(514	)	$	18,001
Pretax operating profit (loss)	$	6,573	$	540		$	364	$	(337	)(a)	$	7,140
Income taxes	—		—			—		(2,869		)(b)	(2,869		)
Discontinued operations, net	—		—			—		(9		)	(9		)
Net income (loss)	$	6,573	$	540		$	364	$	(3,215	)	$	4,262

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

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

(c)   The nine-month period ended September 30, 2013 includes a $131 million pre-tax gain for the sale of an investment in Carbocloro, a Brazilian chemical facility.