Occidental Petroleum 2002 Annual Report Download - page 70

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51
Occidental intends to repurchase rather than remarket its 6.4 percent
senior notes due 2013. At December 31, 2002, the balance of the notes was $450
million and $300 million was classified as non-current since Occidental intends
to refinance this portion on a long-term basis initially using available lines
of bank credit with maturities extending to 2006. At January 2, 2003, Occidental
had available lines of committed bank credit of approximately $1.8 billion. Bank
fees on these committed lines of credit ranged from 0.125 percent to 0.225
percent.
At December 31, 2002, minimum principal payments on long-term debt
subsequent to December 31, 2003 aggregated $3,899 million, of which $323 million
is due in 2004, $157 million in 2005, $796 million in 2006, $550 million in
2007, $405 million in 2008 and $1,668 million thereafter. These amounts do not
include the mark-to-market adjustments, which netted to $106 million, related to
fair-value hedges on debt of $1.3 billion. Unamortized discount is generally
being amortized to interest expense on the effective interest method over the
lives of the related issuances.
At December 31, 2002, under the most restrictive covenants of certain
financing agreements, the capacity for the payment of cash dividends and other
distributions on, and for acquisitions of, Occidental's capital stock was
approximately $4.1 billion, assuming that such dividends, distributions and
acquisitions were made without incurring additional borrowings.
Occidental estimates the fair value of its long-term debt based on the
quoted market prices for the same or similar issues or on the yields offered to
Occidental for debt of similar rating and similar remaining maturities. The
estimated fair value of Occidental's total debt, including Trust Preferred
Securities, at December 31, 2002 and 2001 was approximately $5.2 billion and
$4.8 billion, respectively, compared with a carrying value of approximately $4.7
billion, and approximately $4.5 billion, respectively.
NOTE 7 LEASE COMMITMENTS
--------------------------------------------------------------------------------
The present value of net minimum capital lease payments, net of the current
portion, totaled $26 million at both December 31, 2002 and 2001. These amounts
are included in other liabilities.
Operating and capital lease agreements, which include leases for
manufacturing facilities, office space, railcars and tanks, frequently include
renewal and/or purchase options and require Occidental to pay for utilities,
taxes, insurance and maintenance expense.
At December 31, 2002, future net minimum lease payments for capital and
operating leases (excluding oil and gas and other mineral leases) were the
following (in millions):
Capital Operating
================================================================================ ========= =========
2003 $ 1 $ 88
2004 1 87
2005 1 80
2006 1 72
2007 1 62
Thereafter 28 958
--------- ---------
TOTAL MINIMUM LEASE PAYMENTS 33 $ 1,347
=========
Less:
Imputed interest (7)
Current portion --
---------
PRESENT VALUE OF MINIMUM CAPITAL LEASE PAYMENTS, NET OF CURRENT PORTION $ 26
================================================================================ =========
Rental expense for operating leases, net of sublease rental income, was $81
million in 2002, $84 million in 2001 and $98 million in 2000. Rental expense was
net of sublease income of $7 million in 2002 and $8 million in 2001 and 2000. At