Summary
Occidental Petroleum Corporation's 2012 10-K report highlights a company with diversified operations across oil and gas, chemicals, and midstream/marketing. Despite a significant year-over-year decrease in net income, driven by a substantial $1.7 billion impairment charge on domestic gas assets, the company maintained robust revenue, largely on the back of higher oil prices. Strategic priorities include growing oil and gas production through development and acquisitions, allocating capital for returns exceeding the cost of capital, consistent dividend growth, and maintaining financial discipline. The company demonstrated resilience by increasing its debt-to-capitalization ratio to a healthy 16%, while also returning value to shareholders through dividends and share repurchases. Key operational areas include the Permian Basin and California for domestic oil and gas, with significant international interests in Oman and the UAE, underpinning its global production strategy.
Financial Highlights
48 data points| Revenue | $20.10B |
| Operating Expenses | $1.37B |
| Operating Income | $3.83B |
| Net Income | $4.60B |
| EPS (Basic) | $5.67 |
| EPS (Diluted) | $5.67 |
| Shares Outstanding (Basic) | 809.30M |
| Shares Outstanding (Diluted) | 810.00M |
Key Highlights
- 1Occidental reported a net income of $4.6 billion for 2012, a decrease from $6.8 billion in 2011, primarily due to a $1.7 billion pre-tax impairment charge on domestic gas assets.
- 2Total net sales were $24.2 billion, slightly up from $23.9 billion in 2011, supported by higher oil prices and increased domestic oil volumes.
- 3The company's oil and gas segment remained the largest revenue generator, though segment earnings decreased significantly due to the aforementioned impairment charges and lower natural gas/NGL prices.
- 4Occidental maintained financial discipline with a total debt-to-capitalization ratio of 16% at year-end 2012, following the issuance of $1.75 billion in senior unsecured notes.
- 5Capital expenditures increased to $10.2 billion in 2012, with a significant portion allocated to oil and gas properties, particularly in the Permian Basin, California, and international projects like Al Hosn gas project in Abu Dhabi.
- 6Shareholder returns were a focus, with dividends paid increasing to $2.1 billion in 2012, and the company repurchased 7.5 million shares.
- 7The chemical segment (OxyChem) experienced lower earnings due to weaker economic conditions in Europe and Asia, impacting demand and pricing for its products.