Occidental Petroleum 2003 Annual Report Download - page 70

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other transactions that they have entered into with Occidental. These
indemnities usually are contingent upon the other party incurring liabilities
that reach specified thresholds. As of December 31, 2003, Occidental is not
aware of circumstances that would lead to future indemnity claims against it for
material amounts in connection with these transactions.
It is impossible at this time to determine the ultimate liabilities that
OPC and its subsidiaries may incur resulting from any lawsuits, claims and
proceedings, audits, commitments, contingencies and related matters. If these
matters were to be ultimately resolved unfavorably at amounts substantially
exceeding Occidental's reserves, an outcome not currently anticipated, it is
possible that such outcome could have a material adverse effect upon
Occidental's consolidated financial position or results of operations. However,
after taking into account reserves, management does not expect the ultimate
resolution of any of these matters to have a material adverse effect upon
Occidental's consolidated financial position or results of operations.
53
NOTE 10 DOMESTIC AND FOREIGN INCOME AND OTHER TAXES
--------------------------------------------------------------------------------
The domestic and foreign components of income from continuing operations
before domestic and foreign income and other taxes were as follows:
For the years ended December 31, (in millions) Domestic Foreign Total
=========================================================================== ========== ========== ==========
2003 $ 1,506 $ 1,316 $ 2,822
========== ========== ==========
2002 $ 438 $ 1,147 $ 1,585
========== ========== ==========
2001 $ 272 $ 1,463 $ 1,735
=========================================================================== ========== ========== ==========
The provisions(credits) for domestic and foreign income and other taxes
from continuing operations consisted of the following:
U.S. State
For the years ended December 31, (in millions) Federal and Local Foreign Total
================================================================= ========== ========== ========== ==========
2003
Current $ 564 $ 29 $ 573 $ 1,166
Deferred 82 (6) (15) 61
---------- ---------- ---------- ----------
$ 646 $ 23 $ 558 $ 1,227
================================================================= ========== ========== ========== ==========
2002
Current $ 79 $ 9 $ 475 $ 563
Deferred (112) (26) (3) (141)
---------- ---------- ---------- ----------
$ (33) $ (17) $ 472 $ 422
================================================================= ========== ========== ========== ==========
2001
Current $ 326 $ 17 $ 396 $ 739
Deferred (40) (141) (2) (183)
---------- ---------- ---------- ----------
$ 286 $ (124) $ 394 $ 556
================================================================= ========== ========== ========== ==========
The credit for deferred federal and state and local income taxes in 2002
results primarily from the sale of the investment in Equistar.
The credit for deferred state and local income taxes in 2001 reflects a
benefit of $70 million related to the settlement of a state tax issue, deferred
tax reversing due to the sale of the entity owning pipelines in Texas that were
leased to a former subsidiary, a write-down of the investment in Equistar and an
adjustment to reflect lower effective state tax rates.
The following is a reconciliation, stated as a percentage of pre-tax
income, of the U.S. statutory federal income tax rate to Occidental's effective
tax rate on income from continuing operations: