Occidental Petroleum 2001 Annual Report Download - page 63

recorded, the leased properties also would be included on the balance sheets as
assets.
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NOTE 9 LAWSUITS, CLAIMS, COMMITMENTS, CONTINGENCIES AND RELATED MATTERS
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Occidental and certain of its subsidiaries have been named as defendants in
a substantial number of lawsuits, claims and proceedings. They have also been
named as potentially responsible parties in governmental proceedings under the
Comprehensive Environmental Response, Compensation and Liability Act and similar
state acts. These governmental proceedings seek funding, remediation and, in
some cases, compensation for alleged property damage, punitive damages and civil
penalties, aggregating substantial amounts. Occidental is usually one of many
companies in these proceedings, and has to date been successful in sharing
response costs with other financially sound companies. Occidental has accrued
reserves at the most likely cost to be incurred in those proceedings where it is
probable that Occidental will incur remediation costs which can be reasonably
estimated.
During the course of its operations, Occidental is subject to audit by
taxing authorities for varying periods in various tax jurisdictions.
At December 31, 2001, commitments for major capital expenditures during
2002 and thereafter were approximately $167 million.
Occidental has entered into agreements providing for future payments to
secure terminal and pipeline capacity, drilling services, electrical power,
steam and certain chemical raw materials. At December 31, 2001, the net present
value of the fixed and determinable portion of the obligations under these
agreements, which were used to collateralize financings of the respective
suppliers, aggregated $81 million, which was payable as follows (in millions):
2002--$15, 2003--$14, 2004--$12, 2005--$11, 2006--$11 and 2007 through
2018--$18. Fixed payments under these agreements, were $19 million in 2001, $42
million in 2000 and $20 million in 1999.
Occidental has certain other commitments under contracts, guarantees and
joint ventures, and certain other contingent liabilities. Many of these
commitments, although not fixed or determinable, involve capital expenditures
and are part of the $1.1 billion capital expenditures estimated for 2002.
It is impossible at this time to determine the ultimate liabilities that
Occidental and its subsidiaries may incur resulting from the foregoing lawsuits,
claims and proceedings, audits, commitments, contingencies and related matters.
Several of these matters may involve substantial amounts, and if these were to
be ultimately resolved unfavorably to the full amount of their maximum potential
exposure, an event not currently anticipated, it is possible that such event
could have a material adverse effect upon Occidental's consolidated financial
position or results of operations. However, in management's opinion, after
taking into account reserves, it is unlikely that any of the foregoing matters
will have a material adverse effect upon Occidental's consolidated financial
position or results of operations.
NOTE 10 DOMESTIC AND FOREIGN INCOME AND OTHER TAXES
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The domestic and foreign components of income(loss) from continuing
operations before domestic and foreign income and other taxes were as follows
(in millions):
For the years ended December 31, Domestic Foreign Total
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2001 $ 293 $ 1,456 $ 1,749
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2000 $ 1,534 $ 1,477 $ 3,011
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1999 $ 473 $ 726 $ 1,199
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The provisions(credits) for domestic and foreign income and other taxes
consisted of the following (in millions):