Occidental Petroleum 2003 Annual Report Download - page 78

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Financial Accounting Standards Board Staff Position 106-1 due to open questions
about some of the new Medicare provisions and a lack of authoritative accounting
guidance about certain matters. The final accounting guidance could require
changes to previously reported information.
Occidental expects to contribute $6 million to its domestic defined benefit
pension plans during 2004. All of the contributions are expected to be in the
form of cash.
60
The following table sets forth the funded status and amounts recognized in
Occidental's consolidated balance sheets for the defined benefit pension and
postretirement benefit plans at December 31, 2003 and 2002:
Pension Benefits Postretirement Benefits
---------------- -------------------------------------
Unfunded Plans Funded Plans
---------------- ----------------
For the years ended December 31, (in millions) 2003 2002 2003 2002 2003 2002
============================================================ ====== ====== ====== ====== ====== ======
Unfunded obligation $ (83) $ (106) $ (544) $ (501) $ (18) $ (14)
Unrecognized prior service cost 4 6 8 9 -- --
Unrecognized net loss 64 76 170 125 8 5
------ ------ ------ ------ ------ ------
Net amount recognized $ (15) $ (24) $ (366) $ (367) $ (10) $ (9)
====== ====== ====== ====== ====== ======
Prepaid benefit cost $ 66 $ 49 $ -- $ -- $ -- $ --
Accrued benefit liability (81) (96) (366) (367) (10) (9)
Intangible assets -- 1 -- -- -- --
Accumulated other comprehensive income -- 22 -- -- -- --
------ ------ ------ ------ ------ ------
Net amount recognized $ (15) $ (24) $ (366) $ (367) $ (10) $ (9)
============================================================ ====== ====== ====== ====== ====== ======
NOTE 14 INVESTMENTS AND RELATED-PARTY TRANSACTIONS
--------------------------------------------------------------------------------
EQUITY INVESTMENTS
At December 31, 2003, Occidental's equity investments consisted of a
22-percent interest in Lyondell acquired in August 2002, a 24.5-percent interest
in the entity that will own the pipeline being constructed by Dolphin Energy,
the operator of the Dolphin Project, and other various partnerships and joint
ventures, discussed below. Equity investments paid dividends of $81 million, $22
million and $27 million to Occidental in 2003, 2002 and 2001, respectively.
Cumulative undistributed earnings since acquisition, in the amount of $55
million, of 50-percent-or-less-owned companies have been accounted for by
Occidental under the equity method. At December 31, 2003, Occidental's
investments in unconsolidated entities exceeded the underlying equity in net
assets by $471 million, of which $356 million represents goodwill that will not
be amortized and $115 million represents intangible assets, which will be
amortized over the life of the underlying lease of the assets, when placed into
service.
In October 2003, Occidental purchased an additional 2.7 million shares of
Lyondell common stock for $12.40 a share, totaling approximately $33 million. At
December 31, 2003, Occidental owned 22 percent (39.5 million shares) of Lyondell
stock.
The following table presents Occidental's percentage interest in the
summarized financial information of its equity method investments:
For the years ended December 31, (in millions) 2003 2002 2001
================================================================================ ========== ========== ==========
Revenues $ 1,179 $ 1,782 $ 2,223
Costs and expenses 1,188 2,043 2,315
---------- ---------- ----------
Net loss $ (9) $ (261) $ (92)
================================================================================ ========== ========== ==========