Occidental Petroleum 2003 Annual Report Download - page 66

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subsequent to December 31, 2004 aggregated $3,913 million, of which $157 million
is due in 2005, $496 million in 2006, $550 million in 2007, $405 million in
2008, $276 million in 2009 and $2,029 million thereafter. These amounts do not
include the unamortized discount of $7 million and fair-value hedge
mark-to-market gains of $87 million. Unamortized discount is generally being
amortized to interest expense on the effective interest method over the lives of
the related issuances.
At December 31, 2003, 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 $5.2 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, 2003 and 2002, was approximately $5.0 billion and
$5.2 billion, respectively, compared with a carrying value of approximately $4.5
billion, and approximately $4.7 billion, respectively.
NOTE 7 LEASE COMMITMENTS
--------------------------------------------------------------------------------
The present value of minimum capital lease payments, net of the current
portion, totaled $26 million at both December 31, 2003 and 2002. 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, 2003, 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
================================================================================ =========== ===========
2004 $ 1 $ 98
2005 1 86
2006 1 75
2007 1 62
2008 1 59
Thereafter 28 865
----------- -----------
TOTAL MINIMUM LEASE PAYMENTS 33 $ 1,245
===========
Less:
Imputed interest (6)
Current portion (1)
-----------
PRESENT VALUE OF MINIMUM CAPITAL LEASE PAYMENTS, NET OF CURRENT PORTION $ 26
================================================================================ ===========
Rental expense for operating leases, net of sublease rental income, was
$118 million in 2003, $81 million in 2002 and $84 million in 2001. Rental
expense was net of sublease income of $8 million in 2003, $7 million in 2002 and
$8 million in 2001. At December 31, 2003, sublease rental amounts included in
the future operating lease payments totaled $87 million, as follows (in
millions): 2004--$8, 2005--$9, 2006--$9, 2007--$8, 2008--$8 and thereafter--$45.
Included in both the 2003 and 2002 property, plant and equipment accounts
were $10 million of property leased under capital leases and $8 million and $7
million, respectively, of related accumulated amortization.
50
NOTE 8 ENVIRONMENTAL LIABILITIES AND EXPENDITURES