Industry Segments

9 Months Ended

Sep. 30, 2015

Industry Segments

Industry Segments

11. 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, natural gas liquids (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, carbon dioxide (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 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 September 30, 2015
Net sales	$	2,054		$	1,008		$	231		$	(177	)	$	3,116
Pre-tax operating profit (loss)	$	(3,128	)(a)	$	272	(b)	$	24		$	(219	)(c)	$	(3,051	)
Income taxes	—			—			—			445		(d)	445
Discontinued operations, net	—			—			—			(3		)	(3		)
Net income (loss) attributable tocommon stock	$	(3,128	)	$	272		$	24		$	223		$	(2,609	)
Three months ended September 30, 2014
Net sales	$	3,586		$	1,232		$	261		$	(175	)	$	4,904
Pre-tax operating profit (loss)	$	1,568		$	140		$	108		$	(119	)(c)	$	1,697
Income taxes	—			—			—			(699		)(d)	(699		)
Discontinued operations, net	—			—			—			213			213
Net income attributable tononcontrolling interest	—			—			(3		)	—			(3		)
Net income (loss) attributable tocommon stock	$	1,568		$	140		$	105		$	(605	)	$	1,208

	Oil			Midstream			Corporate
	and			and			and
	Gas			Chemical			Marketing			Eliminations			Total
Nine months ended September 30, 2015
Net sales	$	6,405		$	3,038		$	722		$	(491	)	$	9,674
Pre-tax operating profit (loss)	$	(3,039	)(a)	$	547	(b)	$	96		$	(385	)(c)	$	(2,781	)
Income taxes	—			—			—			140		(d)	140
Discontinued operations, net	—			—			—			(10		)	(10		)
Net income (loss) attributable tocommon stock	$	(3,039	)	$	547		$	96		$	(255	)	$	(2,651	)
Nine months ended September 30, 2014
Net sales	$	10,891		$	3,694		$	1,041		$	(621	)	$	15,005
Pre-tax operating profit (loss)	$	5,054		$	409		$	483		$	(348	)(c)	$	5,598
Income taxes	—			—			—			(2,302		)(d)	(2,302		)
Discontinued operations, net	—			—			—			741			741
Net income attributable tononcontrolling interest	—			—			(8		)	—			(8		)
Net income (loss) attributable tocommon stock	$	5,054		$	409		$	475		$	(1,909	)	$	4,029

(a) The three months ended September 30, 2015 includes pre-tax impairment charges of $3.1 billion.  In September 2015, Occidental entered into a sales agreement to sell its Williston operations in North Dakota, and as such an impairment charge of $756 million was recorded to write down the net book value of the assets and liabilities held for sale to the sales price.  Due to the significant decline in oil and gas futures prices, Occidental also recorded impairment charges on proved and unproved properties related to Occidental’s domestic gas operations of $924 million, Iraq operations of $760 million and Libya operations of $676 million.  The nine months ended September 30, 2015 also reflected first quarter impairment charges of $195 million for Occidental’s South Texas Eagle Ford non-operated properties and $41 million to write-off the remaining investment in Yemen due to the collapse of the country’s government.

(b) Includes gain on the sale of an idled chemical site for $98 million.

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

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