Occidental Petroleum 2001 Annual Report Download - page 68

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Occidental common stock must be $25 or more per share; or (b) July 2, 2002. As
of December 31, 2001, all of the Performance Stock Options were exercisable.
PRO-FORMA DISCLOSURE
Occidental accounts for these plans under Accounting Principles Board
Opinion No. 25. Had the compensation expense for these plans been determined in
accordance with SFAS No. 123, "Accounting for Stock Based Compensation",
Occidental's pro-forma net income would have been $1.1 billion in 2001, $1.6
billion in 2000 and $439 million in 1999. Basic and diluted earnings per share
would have been $3.05 for 2001, $4.22 for 2000 and $1.22 for 1999. The method of
accounting under SFAS No. 123 has not been applied to options granted prior to
January 1, 1995; therefore, the resulting pro-forma compensation expense may not
be representative of that to be expected in future years. The fair value of each
option grant, for pro-forma calculation purposes, is estimated using the
Black-Scholes option-pricing model with the following weighted-average
assumptions used for grants in 2001, 2000 and 1999, respectively: dividend yield
of 3.74, 4.97 and 4.60 percent; expected volatility of 29.33, 28.37 and 23.57
percent; risk-free rate of return of 4.84, 6.27 and 5.86 percent; and expected
lives of 5 years.
1996 RESTRICTED STOCK PLAN FOR NON-EMPLOYEE DIRECTORS
Under the 1996 Restricted Stock Plan for Non-Employee Directors, each
non-employee Director of the Company will receive awards of restricted common
stock each year as additional compensation for their services as a member of the
Board of Directors. A maximum of 150,000 shares of common stock may be awarded
under the Directors Plan and 21,000, 21,000 and 18,800 shares of common stock
were awarded during 2001, 2000 and 1999, respectively. At December 31, 2001,
81,789 shares of common stock were available for the granting of future awards.
56
EARNINGS PER SHARE AND ANTI-DILUTIVE COMPUTATIONS
Basic earnings per share was computed by dividing net income, less
preferred dividend requirements, plus the effect of repurchase of Trust
Preferred Securities by the weighted average number of common shares outstanding
during each year. The computation of diluted earnings per share further assumes
the dilutive effect of stock options.
The following are the share amounts used to compute the basic and diluted
earnings per share for the years ended December 31 (in millions, except
per-share amounts):
2001 2000 1999
=============================================================================== ======== ======== ========
BASIC EARNINGS PER SHARE
Weighted average common shares outstanding 372.4 369.0 355.4
======== ======== ========
DILUTED EARNINGS PER SHARE
Weighted average common shares outstanding 372.4 369.0 355.4
Dilutive effect of exercise of options outstanding 1.8 .2 .1
-------- -------- --------
Dilutive shares 374.2 369.2 355.5
======== ======== ========
The following items were not included in the computation of diluted
earnings per share because their effect was anti-dilutive for the years ended
December 31:
2001 2000 1999
============================================== =================== =================== ===================
STOCK OPTIONS
Number of shares (in millions) 0.02 5.64 4.63
Price range $ 29.063 - $29.438 $ 21.250 - $29.438 $ 21.250 - $29.625
Expiration range 12/1/07 - 4/29/08 4/28/03 - 11/10/09 1/14/00 - 7/8/08
---------------------------------------------- ------------------- ------------------- -------------------
ACCUMULATED OTHER COMPREHENSIVE INCOME (AOCI)
AOCI consisted of the following (in millions):