Occidental Petroleum 2003 Annual Report Download - page 71

For the years ended December 31, 2003 2002 2001
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U.S. federal statutory tax rate 35 % 35 % 35 %
Operations outside the United States (a) 8 12 2
Benefit from sale of subsidiary stock -- (21) --
State taxes, net of federal benefit 1 -- (5)
Other (1) 1 --
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Tax rate provided by Occidental 43 % 27 % 32 %
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(a) Included in these figures is the impact of not providing U.S. taxes on the
unremitted earnings of certain foreign subsidiaries. The effect of this is
to reduce the U.S. federal tax rate by approximately 5 percent in 2003 and
7 percent in 2002. The effect on 2001 was insignificant due to
distributions from these subsidiaries.
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The tax effects of temporary differences resulting in deferred income taxes
at December 31, 2003 and 2002 were as follows:
2003 2002
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DEFERRED DEFERRED Deferred Deferred
TAX TAX Tax Tax
Items resulting in temporary differences (in millions) ASSETS LIABILITIES Assets Liabilities
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Property, plant and equipment differences $ 79 $ 1,317 $ 87 $ 1,166
Equity investments including partnerships -- 365 -- 375
Environmental reserves 163 -- 155 --
Postretirement benefit accruals 127 -- 129 --
Deferred compensation and fringe benefits 144 -- 135 --
Asset retirement obligation 58 -- -- --
State income taxes 44 -- 41 --
All other 224 83 186 60
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Total deferred taxes $ 839 $ 1,765 $ 733 $ 1,601
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Included in total deferred tax assets was a current portion aggregating $75
million and $114 million as of December 31, 2003 and 2002, respectively, that
was reported in prepaid expenses and other.
A deferred tax liability of approximately $210 million at December 31, 2003
has not been recognized for temporary differences related to Occidental's
investment in certain foreign subsidiaries primarily as a result of unremitted
earnings of consolidated subsidiaries, as it is Occidental's intention,
generally, to reinvest such earnings permanently.
The discontinued operations include an income tax benefit of $18 million in
2002 and an income tax expense of $3 million in 2001.
The cumulative effect of changes in accounting principles was reduced by an
income tax benefit of $38 million in 2003 and $6 million in 2002.
Additional paid-in capital was credited $30 million in 2003 and $7 million
in 2002 for a tax benefit resulting from the exercise of certain stock options.
NOTE 11 STOCKHOLDERS' EQUITY
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The following is an analysis of common stock:
(shares in thousands) Common Stock
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Balance, December 31, 2000 369,984
Issued 1,064
Options exercised and other, net 3,078