Summary
Occidental Petroleum Corporation (OXY) filed an 8-K on February 9, 2005, to report a upward revision to its fourth-quarter 2004 earnings. The company announced that its net income for the quarter ended December 31, 2004, was $77 million higher than previously reported, increasing total net income to $742 million, or $1.86 per share. This adjustment stemmed from an increase in the carrying value of Occidental's investment in Lyondell Chemical Company. The upward revision in earnings is a non-cash accounting event, driven by Lyondell's acquisition of Millennium Chemical Company. Lyondell issued new shares to acquire Millennium, which under SEC Staff Accounting Bulletin No. 51, required Occidental to record its proportional share of the increase in Lyondell's net equity. This resulted in a $121 million increase in the carrying value of Occidental's Lyondell investment and a $77 million after-tax increase in Occidental's net income.
Key Highlights
- 1Occidental Petroleum revised its Q4 2004 earnings upward by $77 million ($0.19 per share).
- 2The revised Q4 2004 net income is $742 million, or $1.86 per share.
- 3The earnings adjustment is due to an increase in the carrying value of OXY's investment in Lyondell Chemical Company.
- 4This increase in carrying value is a result of Lyondell's acquisition of Millennium Chemical Company.
- 5The accounting treatment follows SEC Staff Accounting Bulletin No. 51, requiring recognition of increased equity in Lyondell.
- 6The event has no cash impact on Occidental Petroleum.
- 7Occidental's ownership stake in Lyondell decreased from approximately 22% to 17% following Lyondell's share issuance.