Occidental Petroleum 2003 Annual Report Download - page 80

NOTE 15 INDUSTRY SEGMENTS AND GEOGRAPHIC AREAS
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In compliance with the provisions of SFAS No. 131, "Disclosures about
Segments of an Enterprise and Related Information," Occidental has identified
two reportable segments through which it conducts its continuing operations: oil
and gas and chemical. The factors for determining the reportable segments were
based on the distinct nature of their operations. They are managed as separate
business units because each requires and is responsible for executing a unique
business strategy. The oil and gas segment explores for, develops, produces and
markets crude oil and natural gas domestically and internationally. The chemical
segment manufactures and markets, domestically and internationally, basic
chemicals, vinyls and performance chemicals.
Earnings of industry segments and geographic areas exclude interest income,
interest expense, environmental remediation expenses, unallocated corporate
expenses, discontinued operations and cumulative effect of changes in accounting
principles, but include income from equity investments (except as noted below)
and gains and losses from dispositions of segment and geographic area assets.
Foreign income and other taxes and certain state taxes are included in
segment earnings on the basis of operating results. U.S. federal income taxes
are not allocated to segments except for amounts in lieu thereof that represent
the tax effect of operating charges resulting from purchase accounting
adjustments, which arose from the implementation in 1992 of SFAS No. 109,
"Accounting for Income Taxes," and the tax effects resulting from major,
infrequently occurring transactions such as asset sales and legal settlements
that relate to segment results.
Identifiable assets are those assets used in the operations of the
segments. Corporate and other assets consist of cash, short-term investments,
certain corporate receivables, a 22-percent equity investment in Lyondell, a
12-percent ownership interest in Premcor, Inc. and the leased co-generation
facility in Taft, Louisiana.
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INDUSTRY SEGMENTS
In millions
Corporate
Oil and Gas Chemical and Other Total
============================================================= =========== =========== =========== ===========
YEAR ENDED DECEMBER 31, 2003
Net sales $ 6,003 (a) $ 3,178 (b) $ 145 (i) $ 9,326
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Pretax operating profit(loss) $ 3,229 $ 213 $ (620)(d) $ 2,822
Income taxes (565) (3) (659)(e) (1,227)
Discontinued operations, net -- -- -- --
Cumulative effect of changes in accounting principles, net -- -- (68) (68)
----------- ----------- ----------- -----------
Net income(loss) (c) $ 2,664 $ 210 $ (1,347)(g) $ 1,527
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Unconsolidated equity investments $ 571 $ 61 $ 523 $ 1,155
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Property, plant and equipment additions, net (h) $ 1,237 $ 345 $ 19 $ 1,601
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Depreciation, depletion and amortization $ 957 $ 205 $ 15 $ 1,177
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Total assets $ 13,274 $ 3,512 $ 1,382 $ 18,168
============================================================= =========== =========== =========== ===========
YEAR ENDED DECEMBER 31, 2002
Net sales $ 4,634 (a) $ 2,704 (b) $ -- $ 7,338
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Pretax operating profit(loss) $ 2,181 $ (128) $ (468)(d) $ 1,585
Income taxes (474) 403 (351)(e) (422)
Discontinued operations, net -- -- (79) (79)
Cumulative effect of changes in accounting principles, net -- -- (95) (95)
----------- ----------- ----------- -----------
Net income(loss) (c, f) $ 1,707 $ 275 $ (993)(g) $ 989
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Unconsolidated equity investments $ 475 $ (11) $ 592 $ 1,056
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