Occidental Petroleum 2001 Annual Report Download - page 64

U.S. State
For the years ended December 31, Federal and Local Foreign Total
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2001
Current $ 331 $ 17 $ 396 $ 744
Deferred (38) (141) (2) (181)
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$ 293 $ (124) $ 394 $ 563
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2000
Current $ 433 $ 18 $ 578 $ 1,029
Deferred 403 9 1 413
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$ 836 $ 27 $ 579 $ 1,442
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1999
Current $ 76 $ 26 $ 346 $ 448
Deferred 184 7 (8) 183
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$ 260 $ 33 $ 338 $ 631
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The credit for deferred state and local income taxes in 2001 reflects a
benefit of $70 million related to the settlement of a state tax issue, deferred
tax reversing due to the sale of the entity owning pipelines in Texas that are
leased to a former subsidiary and an adjustment to reflect lower effective state
tax rates.
The following is a reconciliation, stated as a percentage of pre-tax
income, of the U.S. statutory federal income tax rate to Occidental's effective
tax rate on income from continuing operations:
For the years ended December 31, 2001 2000 1999
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U.S. federal statutory tax rate 35% 35% 35%
Operations outside the United States(a) 2 11 12
State taxes, net of federal benefit (5) 1 2
Other -- 1 4
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Tax rate provided by Occidental 32% 48% 53%
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(a) Included in these figures is the impact of not providing U.S. taxes on the
unremitted earnings of certain foreign subsidiaries. The effect of this is
to reduce the U.S. federal tax rate by approximately 7 percent in 1999. The
effect on 2001 and 2000 was insignificant due to distributions from these
subsidiaries.
The tax effects of temporary differences resulting in deferred income taxes
at December 31, 2001 and 2000 were as follows (in millions):
2001 2000
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DEFERRED DEFERRED Deferred Deferred
TAX TAX Tax Tax
Items resulting in temporary differences ASSETS LIABILITIES Assets Liabilities
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Property, plant and equipment differences $ 100 $ 967 $ 188 $ 884
Equity investments including partnerships -- 694 -- 1,066
Environmental reserves 178 -- 145 --
Postretirement benefit accruals 180 -- 184 --
State income taxes 54 -- 108 --
All other 264 96 243 58
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Subtotal 776 1,757 868 2,008
Valuation allowance (8) -- (23) --
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Total deferred taxes $ 768 $ 1,757 $ 845 $ 2,008
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Included in total deferred tax assets was a current portion aggregating
$114 million and $117 million as of December 31, 2001 and 2000, respectively,
that was reported in prepaid expenses and other.
A deferred tax liability of approximately $135 million at December 31, 2001
has not been recognized for temporary differences related to Occidental's
investment in certain foreign subsidiaries primarily as a result of unremitted
earnings of consolidated subsidiaries, as it is Occidental's intention,