Occidental Petroleum 2006 Annual Report Download - page 63
Download and view the complete annual report
Please find page 63 of the 2006 Occidental Petroleum annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.-
1 -
2
-
3
-
4
-
5
-
6
-
7
-
8
-
9
-
10
-
11
-
12
-
13
-
14
-
15
-
16
-
17
-
18
-
19
-
20
-
21
-
22
-
23
-
24
-
25
-
26
-
27
-
28
-
29
-
30
-
31
-
32
-
33
-
34
-
35
-
36
-
37
-
38
-
39
-
40
-
41
-
42
-
43
-
44
-
45
-
46
-
47
-
48
-
49
-
50
-
51
-
52
-
53 -
54 -
55 -
56 -
57 -
58 -
59 -
60 -
61 -
62 -
63 -
64 -
65 -
66 -
67 -
68 -
69 -
70 -
71 -
72 -
73 -
74
-
75
-
76
-
77
-
78
-
79
-
80
-
81
-
82
-
83
-
84
-
85
-
86
-
87
-
88
-
89
-
90
-
91
-
92
-
93
-
94
-
95
-
96
-
97
-
98
-
99
-
100
-
101
-
102
-
103
-
104
-
105
-
106
-
107
-
108
-
109
-
110
-
111
-
112
-
113
-
114
-
115
-
116
-
117
-
118
-
119
-
120
-
121
-
122
-
123
-
124
-
125
-
126
-
127
-
128
-
129
-
130
-
131
-
132
-
133
-
134
-
135
-
136
-
137
-
138
-
139
 |
 |
NOTE 5 LONG-TERM DEBT
Long-term debt consisted of the following:
In September 2006, Occidental amended and restated its $1.5 billion bank credit (Credit Facility) to, among other things, lower the interest
rate and extend the term to September 2011. The Credit Facility provides for the termination of the loan commitments and requires immediate
repayment of any outstanding amounts if certain events of default occur or if Occidental files for bankruptcy. Occidental had not drawn down any
amounts on the Credit Facility at December 31, 2006. None of Occidental's committed bank credits contain material adverse change (MAC)
clauses or debt rating triggers that could restrict Occidental's ability to borrow under these lines. Occidental's credit facilities and debt agreements
do not contain rating triggers that could terminate bank commitments or accelerate debt in the event of a ratings downgrade. Up to $350 million of
the Credit Facility is available in the form of letters of credit. Borrowings under the Credit Facility bear interest at various benchmark rates,
including LIBOR, plus a margin based on Occidental's senior debt ratings. Additionally, Occidental pays an annual facility fee (ranging from 0.06
percent to 0.08 percent in 2006) on the total commitment amount, which is based on Occidental's senior debt ratings.
In 2006, Occidental recorded $35 million of pre-tax charges to redeem all of its outstanding 7.375-percent senior notes due 2008 and all of its
7.875-percent Vintage senior subordinated notes due 2011 and to purchase in the open market and retire various amounts of Occidental and
Vintage senior notes and unsecured subsidiary notes.
In 2005, Occidental recorded $42 million of pre-tax interest charges to redeem all of its outstanding 5.875-percent senior notes, 4.101-percent
medium-term senior notes and 7.65-percent senior notes and to purchase in the open market and retire various amounts of Occidental senior
notes and unsecured subsidiary notes.
At December 31, 2006, minimum principal payments on long-term debt subsequent to December 31, 2006, aggregated $2,774 million, of
which $171 million is due in 2007, $10 million in 2008, $695 million in 2009, $239 million in 2010, $68 million in 2011, $644 million in 2012 and
$947 million thereafter. These amounts do not include the net unamortized premium of $16 million. The unamortized premium is generally being
amortized to interest expense on the effective interest method over the lives of the related issuances.
At December 31, 2006, under the most restrictive covenants of certain financing agreements, Occidental's capacity for additional unsecured
borrowing was approximately $44.8 billion and the capacity for the payment of cash dividends and other distributions on, and for acquisitions of,
Occidental’s capital stock was approximately $17.2 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 values of Occidental’s debt, at December 31, 2006 and
2005, were approximately $3.1 billion and $3.4 billion, respectively, compared with carrying values of approximately $2.8 billion and $2.9 billion,
respectively.
52