Occidental Petroleum 2002 Annual Report Download - page 82

Deferrable Interest Notes due 2039 (Trust Subordinated Notes). The Trust
Subordinated Notes represent the sole assets of Oxy Capital Trust I. The Trust
Subordinated Notes mature on January 20, 2039, bear interest at the rate of 8.16
percent payable quarterly and are redeemable in whole, or in part, by Occidental
beginning on January 20, 2004 at 100 percent of the principal amount thereof,
plus any accrued and unpaid interest to the redemption date. The Trust
Subordinated Notes are unsecured obligations of Occidental and are junior in
right of payment to all present and future senior indebtedness of Occidental and
are also effectively subordinate to certain indebtedness of Occidental's
consolidated subsidiaries. Occidental may defer interest payments on the Trust
Subordinated Notes from time to time for a period not exceeding twenty
consecutive quarters. However, any unpaid quarterly interest payments on the
Trust Subordinated Notes will continue to accrue interest at 8.16 percent per
annum.
Holders of the Trust Preferred Securities and Common Securities are
entitled to cumulative cash distributions at an annual rate of 8.16 percent of
the liquidation amount of $25 per security. The Trust Preferred Securities and
Common Securities will be redeemed upon repayment of the Trust Subordinated
Notes. If Occidental defers interest payments on the Trust Subordinated Notes,
Oxy Capital Trust I will defer distributions on the Trust Preferred Securities
and Common Securities during any deferral period. However, any unpaid quarterly
distributions on the Trust Preferred Securities and Common Securities will
continue to accrue with interest at 8.16 percent per annum.
Occidental has guaranteed, on a subordinated basis, distributions and other
payments due on the Trust Preferred Securities (the Guarantee). The Guarantee,
when taken together with Occidental's obligations under the Trust Subordinated
Notes and the indenture pursuant to which the Trust Subordinated Notes were
issued and Occidental's obligations under the Amended and Restated Declaration
of Trust governing Oxy Capital Trust I, provides a full and unconditional
guarantee of amounts due on the Trust Preferred Securities.
The Trust Subordinated Notes and the related Oxy Capital Trust I investment
in the Trust Subordinated Notes have been eliminated in consolidation and the
Trust Preferred Securities are reported as Occidental Obligated Mandatorily
Redeemable Trust Preferred Securities of a Subsidiary Trust Holding Solely
Subordinated Notes of Occidental in the accompanying consolidated financial
statements. Distributions on the Trust Preferred Securities are reported under
the caption minority interest in the statement of operations. Total net proceeds
to Occidental were $508 million. The balance reflected in the accompanying
consolidated financial statements at December 31, 2002 and 2001 is net of
unamortized issue costs and also reflects the repurchase in 2002 and 2001 of
353,150 and 437,100 shares with a liquidation value of $8.8 million and $10.9
million, respectively. At December 31, 2002, 18,716,554 Trust Preferred
Securities and 649,485 Common Securities were outstanding.
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NOTE 13 RETIREMENT PLANS AND POSTRETIREMENT BENEFITS
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Occidental has various defined benefit and defined contribution retirement
plans for its salaried, domestic union and nonunion hourly, and certain foreign
national employees. Participation in the defined benefit plans is limited and
approximately 1,400 domestic and 500 foreign national employees, mainly union
and non-union hourly employees, are currently accruing benefits under these
plans.
All domestic employees and certain foreign national employees are eligible
to participate in one or more of the defined contribution retirement or savings
plans that provide for periodic contributions by Occidental based on
plan-specific criteria, such as base pay, age level, and/or employee
contributions. Certain salaried employees participate in a supplemental
retirement plan that provides restoration of benefits lost due to governmental
limitations on qualified retirement benefits. The accrued liabilities for the
supplemental retirement plan were $49 million, $42 million, and $38 million as
of December 31, 2002, 2001 and 2000. Occidental expensed $57 million in 2002,
$57 million in 2001, and $55 million in 2000 under the provisions of these
defined contribution and supplemental retirement plans.