Occidental Petroleum 2002 Annual Report Download - page 54

Download and view the complete annual report

Please find page 54 of the 2002 Occidental Petroleum annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 149

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136
  • 137
  • 138
  • 139
  • 140
  • 141
  • 142
  • 143
  • 144
  • 145
  • 146
  • 147
  • 148
  • 149

CASH FLOW FROM FINANCING ACTIVITIES
Proceeds from long-term debt and non-recourse debt 248 861 2,447
Payments of long-term debt, non-recourse debt and capital lease liabilities (199) (2,258) (1,389)
Proceeds from issuance of common stock 22 18 41
Repurchase of Trust Preferred Securities (9) (11) (12)
Purchases for natural gas delivery commitment (95) (121) (115)
Buyout of natural gas commitment, net (179) -- --
Payments of notes payable, net -- (2) (6)
Proceeds from subsidiary preferred stock issuance 72 -- --
Cash dividends paid (375) (372) (369)
Stock options exercised 60 72 2
Other financing, net (1) (1) (1)
---------- ---------- ----------
Financing cash flow from continuing operations (456) (1,814) 598
Financing cash flow from discontinued operations -- -- (19)
---------- ---------- ----------
NET CASH (USED)PROVIDED BY FINANCING ACTIVITIES (456) (1,814) 579
---------- ---------- ----------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS (52) 101 (117)
CASH AND CASH EQUIVALENTS--BEGINNING OF YEAR 198 97 214
---------- ---------- ----------
CASH AND CASH EQUIVALENTS--END OF YEAR $ 146 $ 198 $ 97
================================================================================ ========== ========== ==========
The accompanying notes are an integral part of these financial statements.
39
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Occidental Petroleum Corporation
and Subsidiaries
NOTE 1 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
--------------------------------------------------------------------------------
PRINCIPLES OF CONSOLIDATION
The consolidated financial statements include the accounts of Occidental
Petroleum Corporation, entities where it owns a majority voting interest and its
undivided interests in oil and gas exploration and production ventures. In these
Notes, the term "Occidental" or "the Company" refers to Occidental Petroleum
Corporation and/or one or more entities where it owns a majority voting interest
and ventures. The Company's proportionate share of oil and gas exploration and
production ventures is accounted for using the pro-rata method of consolidation.
Proportionate shares of assets, liabilities, revenues and costs are reported
within the relevant lines of the balance sheets, income statements and cash flow
statements. Occidental's oil and gas ventures accounted for in this manner are
held in joint ventures, partnerships, limited liability companies or comparable
legal forms that are direct working interests. Amounts representing Occidental's
percentage interest in the underlying net assets of other affiliates in which it
does not have a majority voting interest, but as to which it exercises
significant influence, are accounted for under the equity method. Investments in
which Occidental does not exercise significant influence are accounted for under
the cost method. All material intercompany accounts and transactions have been
eliminated (see Note 15).
In addition, certain financial statements, notes and supplementary data for
prior years have been changed to conform to the 2002 presentation.
REVENUE RECOGNITION
For oil and gas, title passes to the customer when product is shipped.
Revenue is recognized after title has passed to the customer. Prices are either
fixed or based on a market index. For marketing and trading activities, revenue
is recognized on settled transactions upon completion of contract terms, and for
physical deliveries, upon title transfer. For unsettled transactions, contracts
that meet specified accounting criteria are marked to market. (See "Accounting
Changes" in Note 4).
Revenue from chemical product sales is recognized after the product is
shipped and title has passed to the customer. Prices are fixed at the time of
shipment. Customer incentive programs provide for payments or credits to be made
to customers based on the volume of product purchased over a defined period.
Total customer incentive payments over a given period are estimated and recorded
as a reduction to revenue ratably over the contract period. Such estimates are
evaluated and revised as warranted.
NATURE OF OPERATIONS