Industry Segments

9 Months Ended

Sep. 30, 2017

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, 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 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, 2017
Net sales	$	1,865			$	1,071	$		266			$		(203		)		$	2,999
Pre-tax operating profit (loss)	$	220		(a)	$	200	$		4			$		(149		)	(b)	$	275
Income taxes	—				—		—					(85				)	(c)	(85		)
Net income (loss)	$	220			$	200	$		4			$		(234		)		$	190
Three months ended September 30, 2016
Net sales	$	1,660			$	988	$		202			$		(202		)		$	2,648
Pre-tax operating profit (loss)	$	(51	)	(d)	$	117	$		(180		)	$		(154		)	(b)	$	(268	)
Income taxes	—				—		—					30					(c)	30
Discontinued operations, net	—				—		—					(3				)		(3		)
Net income (loss)	$	(51	)		$	117	$		(180		)	$		(127		)		$	(241	)
	Oil						Midstream					Corporate
	and						and					and
	Gas				Chemical		Marketing					Eliminations						Total
Nine months ended September 30, 2017
Net sales	$	5,607			$	3,295	$	747				$	(633		)			$	9,016
Pre-tax operating profit (loss)	$	1,067		(a)	$	600	$	76				$	(481		)		(b)	$	1,262
Income taxes	—				—		—					(448			)			(448		)
Net income (loss)	$	1,067			$	600	$	76				$	(929		)			$	814
Nine months ended September 30, 2016
Net sales	$	4,560			$	2,786	$	476				$	(520		)			$	7,302
Pre-tax operating profit (loss)	$	(653	)	(d)	$	419	$	(333		)		$	(496		)		(b)	$	(1,063	)
Income taxes	—				—		—					329					(f)	329
Discontinued operations, net	—				—		—					432						432
Net income (loss)	$	(653	)		$	419	$	(333		)		$	265					$	(302	)

(a)	The three and nine months ended September 30, 2017, included pre-tax gains on sale of non-strategic acreage in the Midland Basin of $81 million. The nine months ended September 30, 2017, also included pre-tax gains of $510 million on sale of domestic oil and gas assets, including South Texas.
(b)	Included unallocated net interest expense, administration expense, environmental remediation and other pre-tax items.
(c)	Included all foreign and domestic income taxes from continuing operations.
(d)	The three and nine months ended September 30, 2016, included pre-tax impairment charges of $112 million related to Occidental’s former Libya operations and $160 million related to terminated crude oil supply contracts partially offset by pre-tax gains of $59 million on the sale of South Texas Eagle Ford non-operated properties. The nine months ended September 30, 2016, also reflected a $121 million pre-tax gain on the sale of Occidental’s Piceance Basin operations in Colorado.
(e)	Included a pre-tax non-cash fair value gain of $94 million on the Plains equity investment.
(f)	Included a pre-tax gain on sale of $57 million and $31 million related to the Occidental Tower in Dallas, Texas, and a non-core specialty chemicals business, respectively.