Occidental Petroleum 2003 Annual Report Download - page 21

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In millions, except as indicated 2003 2002 2001
========================================= ======== ======== ========
SEGMENT SALES $ 3,178 $ 2,704 $ 2,968
SEGMENT EARNINGS (LOSS) $ 210 $ 275 $ (399)
CORE EARNINGS (a) $ 210 $ 111 $ 13
KEY PRODUCT PRICE INDEXES (1987
through 1990 average price = 1.0)
Chlorine 1.72 1.01 0.74
Caustic soda 0.84 0.71 1.33
Ethylene dichloride 1.16 1.01 0.61
PVC commodity resins (b) 0.89 0.73 0.68
KEY PRODUCT VOLUMES
Chlorine (thousands of tons) (c) 2,733 2,807 2,847
Caustic soda (thousands of tons) 2,764 2,717 2,857
Ethylene dichloride (thousands of tons) 546 573 735
PVC commodity resins
(millions of pounds) 3,954 4,132 3,950
CAPITAL EXPENDITURES (d) $ 345 $ 109 $ 112
----------------------------------------- -------- -------- --------
(a) For an explanation of core earnings, see "Significant Items Affecting
Earnings."
(b) Product volumes produced at former PolyOne facilities, now part of
OxyVinyls, are excluded from the product price indexes.
(c) Product volumes include those manufactured and consumed internally.
(d) The 2003 amount includes $180 million for the purchase of a previously
leased facility in LaPorte, Texas and $44 million related to the exercise
of purchase options for certain leased railcars.
Core earnings were $210 million in 2003, compared with $111 million in
2002. The increase in core earnings reflects the impact of higher sales prices
for all major products (PVC, EDC, chlorine and caustic), partially offset by
higher energy and ethylene costs.
SIGNIFICANT ITEMS AFFECTING EARNINGS
Occidental's results of operations often include the effects of significant
transactions and events affecting earnings that vary widely and unpredictably in
nature, timing and amount. Therefore, management uses a measure called "core
earnings", which excludes those items. This non-GAAP measure is not meant to
disassociate those items from management's performance, but rather is meant to
provide useful information to investors interested in comparing Occidental's
earnings performance between periods. Reported earnings are considered
representative of management's performance over the long term. Core earnings is
not considered to be an alternative to operating income in accordance with
generally accepted accounting principles.
SIGNIFICANT ITEMS AFFECTING EARNINGS
Benefit (Charge) (in millions) 2003 2002 2001
========================================= ======== ======== ========
TOTAL REPORTED EARNINGS $ 1,527 $ 989 $ 1,154
========================================= ======== ======== ========
OIL AND GAS
Segment Earnings $ 2,664 $ 1,707 $ 2,845
Less:
Gain on sale of interest in the
Indonesian Tangguh LNG Project (a) -- -- 399
-------- -------- --------
Segment Core Earnings $ 2,664 $ 1,707 $ 2,446
----------------------------------------- -------- -------- --------
CHEMICAL