Occidental Petroleum 2008 Annual Report Download - page 78

Occidental expects to contribute $10 million to its defined benefit pension plans during 2009. All of the contributions are expected to be
in the form of cash.
Estimated future benefit payments, which reflect expected future service, as appropriate, are as follows:
For the years ended December 31, (in millions) Pension Benefits Postretirement Benefits
2009 $42 $53
2010 $44 $53
2011 $46 $52
2012 $48 $52
2013 $50 $51
2014 — 2018 $280 $249
NOTE 14 INVESTMENTS AND RELATED-PARTY TRANSACTIONS
At December 31, 2008 and 2007, investments in unconsolidated entities comprised $1.2 billion and $521 million of equity-method
investments and $58 million and $234 million of advances to equity-method investees, respectively.
EQUITY INVESTMENTS
At December 31, 2008, Occidental’s equity investments consisted mainly of a 24.5-percent interest in the stock of Dolphin Energy
Limited (Dolphin Energy), a minority interest in a North American oil and gas pipeline entity and various other partnerships and joint
ventures, discussed below. Equity investments paid dividends of $111 million, $33 million and $113 million to Occidental in 2008, 2007 and
2006, respectively. At December 31, 2008, cumulative undistributed earnings of equity-method investees since their respective acquisitions
were $219 million. At December 31, 2008, Occidental’s investments in equity investees exceeded the underlying equity in net assets by
$258 million, of which $140 million represents goodwill that will not be amortized and $118 million represents intangible assets, which is
being amortized over the life of the underlying assets.
The following table presents Occidental’s ownership interest in the summarized financial information of its equity-method
investments:
For the years ended December 31, (in millions) 2008 2007 2006
Revenues $860 $463 $1,569
Costs and expenses 647 381 1,386
Net income $213 $82 $183
As of December 31, 2008 2007
Current assets $411 $130
Non-current assets $1,655 $853
Current liabilities $387 $88
Long-term debt $726 $603
Other non-current liabilities $116 $30
Stockholders’ equity $837 $262
Occidental’s investment in the Dolphin Project consists of two separate economic interests through which Occidental owns (i) a 24.5-
percent undivided interest in the assets and liabilities associated with a Development and Production Sharing Agreement, which is
proportionately consolidated in the financial statements; and (ii) a 24.5-percent ownership interest in the stock of Dolphin Energy, which is
accounted for as an equity investment. In July 2005, Dolphin Energy entered into a bridge loan in an amount of $2.45 billion. The new bridge
loan had a term of four years as a revolving credit facility through April 2008 and was converted to a term loan thereafter. In September 2005,
Dolphin Energy entered into an agreement with banks to provide a $1.0 billion facility to fund the construction of a certain portion of the
Dolphin Project. Occidental guarantees 24.5 percent of both of these obligations. At December 31, 2008, Occidental’s portion of the bridge
loan and financing facility was $845 million. Of this amount, Occidental had recorded $600 million as its proportionately consolidated share
on the balance sheet at December 31, 2008. At December 31, 2008, the remaining $245 million of the bridge loan and financing facility
represents a substantial majority of Occidental's guarantees.
In Ecuador, Occidental has a 14-percent interest in the Oleoducto de Crudos Pesados Ltd. (OCP) oil export pipeline, which Occidental
records as an equity investment. The project was funded in part by senior project debt, which is to be repaid with the proceeds of ship-or-pay
tariffs of certain upstream producers in Ecuador. In May 2006, Ecuador
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terminated Occidental's contract for the operation of Block 15, which comprised all of its oil-producing operations in the country, and seized