Occidental Petroleum 2006 Annual Report Download - page 66
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The following table shows derivative financial instruments included in the consolidated balance sheets:
The following table summarizes net after-tax derivative activity recorded in AOCI:
During the next twelve months, Occidental expects that approximately $11 million of net derivative after-tax losses included in AOCI, based on
their valuation at December 31, 2006, will be reclassified into earnings. Hedge ineffectiveness did not have a material impact on earnings for the
years ended December 31, 2006, 2005 and 2004.
NOTE 8 ENVIRONMENTAL LIABILITIES AND EXPENDITURES
Occidental’s operations are subject to stringent federal, state, local and foreign laws and regulations relating to improving or maintaining
environmental quality. Costs associated with environmental compliance have increased over time and are expected to rise in the future.
Environmental expenditures related to current operations are factored into the overall business planning process and are considered an integral
part of production in manufacturing quality products responsive to market demand.
ENVIRONMENTAL REMEDIATION
The laws that require or address environmental remediation may apply retroactively to past waste disposal practices and releases of substances
to the environment. In many cases, the laws apply regardless of fault, legality of the original activities or current ownership or control of sites. OPC
or certain of its subsidiaries are currently participating in environmental assessments and cleanups under these laws at federal Superfund sites,
comparable state sites and other domestic and foreign remediation sites, including currently owned facilities and previously owned sites. Also,
OPC or certain of its subsidiaries have been involved in a substantial number of governmental and private proceedings involving historical
practices at various sites including, in some instances, having been named in proceedings under CERCLA and similar federal, state and local
environmental laws. These proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property
damage, punitive damages and civil penalties.
Occidental manages its environmental remediation efforts through a wholly owned subsidiary, Glenn Springs Holdings, Inc., which reports its
results directly to Occidental’s corporate management. The following table presents Occidental's environmental remediation reserves, the current
portion of which is included in accrued liabilities ($79 million in 2006, $83 million in 2005 and $76 million in 2004) and the remainder in deferred
credits and other liabilities — other ($333 million in 2006, $335 million in 2005 and $299 million in 2004). The reserves are grouped by three
categories of environmental remediation sites:
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