Occidental Petroleum 2008 Annual Report Download - page 63

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FSP SFAS No. 132(R)-1
In December 2008, the FASB issued FSP SFAS No. 132(R)-1. This FSP requires companies to enhance disclosures related to the
assets held in defined benefit plans and other post-retirement benefits. The Company will be required to provide greater detail as to the
categories of plan assets as well as the level within the fair value hierarchy discussed in SFAS No. 157, in which the plan assets fall. This
FSP is effective for financial statements issued for fiscal years ending after December 15, 2009. Occidental does not expect the effect of this
FSP on its financial statements to be material.
RECENTLY ADOPTED ACCOUNTING CHANGES
SFAS No. 159
In February 2007, the FASB issued SFAS No. 159, which allows companies to measure certain individually selected financial
instruments at fair value. SFAS No. 159 is effective for financial statements issued for periods beginning after November 15, 2007. Since
Occidental did not elect the fair value option on any qualifying financial instruments at any time during 2008, this statement has had no
impact on Occidental’s financial statements.
SFAS No. 157
In September 2006, the FASB issued SFAS No. 157, which establishes a framework for measuring fair value and expands
disclosures about fair value measurements. SFAS No. 157 is effective for financial statements issued for periods beginning after November
15, 2007. In February 2008, the FASB issued FSP FAS 157-2, which defers the effective date of SFAS No. 157 for non-financial assets and
liabilities that are not recorded at fair value on a recurring basis until periods beginning after November 15, 2008. Occidental adopted the non-
deferred portion of SFAS No. 157 on January 1, 2008 on a prospective basis. See Note 11 for further information. In October 2008, the FASB
issued FSP FAS 157-3, which became effective immediately and clarified the application of SFAS No. 157 in a market that is not active. The
adoption of FSP FAS 157-3 has not had a material impact on Occidental’s financial statements.
NOTE 4 INVENTORIES
Net carrying values of inventories valued under the LIFO method were approximately $166 million and $190 million at December 31,
2008 and 2007, respectively. Inventories consisted of the following:
Balance at December 31, (in millions) 2008 2007
Raw materials $123 $92
Materials and supplies 412 349
Finished goods 494 571
1,029 1,012
LIFO reserve (71) (102)
Total $958 $910
NOTE 5 LONG-TERM DEBT
Long-term debt consisted of the following:
Balance at December 31, (in millions) 2008 2007
Occidental Petroleum Corporation
7.0% senior notes due 2013 $1,000 $ —
6.75% senior notes due 2012 368 368
4.25% medium-term senior notes due 2010 227 227
8.45% senior notes due 2029 116 116
9.25% senior debentures due 2019 116 116
10.125% senior debentures due 2009 91 96
7.2% senior debentures due 2028 82 82
8.75% medium-term notes due 2023 22 22
11.125% senior notes due 2010 12 12
8.1% medium-term notes due 2008 — 10
2,034 1,049
Subsidiary Debt
Dolphin Energy loans due 2009 (3.915% as of December 31, 2008 and 5.78% as of December 31,
2007) 600 588
0.81% to 1.2% unsecured notes due 2011 through 2018 115 140
2,749 1,777
Less:
Unamortized discount, net (9) (1)
Current maturities (691) (35)
Total $2,049 $1,741
49
In October 2008, Occidental issued $1 billion of 7-percent senior notes receiving $985 million of net proceeds. Interest on the notes