OXY(US:OXY)2024-05-07 20:19Part I Financial Statements (unaudited) This section presents Occidental's unaudited consolidated financial statements for Q1 2024, showing decreased net income and operating cash flow, with stable total assets Consolidated Condensed Balance Sheets Occidental's total assets slightly increased to $74.28 billion as of March 31, 2024, with total equity rising to $30.97 billion Balance Sheet Summary (in millions) | Account | March 31, 2024 | December 31, 2023 | | :--- | :--- | :--- | | Total Current Assets | $8,345 | $8,375 | | Net Property, Plant and Equipment | $58,763 | $58,529 | | Total Assets | $74,277 | $74,008 | | Total Current Liabilities | $8,812 | $9,148 | | Long-Term Debt, Net | $18,545 | $18,536 | | Total Liabilities | $43,310 | $43,659 | | Total Equity | $30,967 | $30,349 | Consolidated Condensed Statements of Operations Net sales decreased to $5.98 billion in Q1 2024, resulting in net income of $718 million, including a $182 million gain from discontinued operations Statements of Operations Summary (in millions, except per-share amounts) | Metric | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Sales | $5,975 | $7,225 | | Income Before Income Taxes | $1,010 | $1,734 | | Net Income | $888 | $1,263 | | Net Income Attributable to Common Stockholders | $718 | $983 | | Diluted EPS | $0.75 | $1.00 | Consolidated Condensed Statements of Cash Flows Operating cash flow decreased to $2.01 billion in Q1 2024, while investing activities used $1.81 billion and financing activities used $328 million Cash Flow Summary (in millions) | Cash Flow Category | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Net Cash from Operating Activities | $2,007 | $2,870 | | Net Cash used by Investing Activities | $(1,810) | $(1,598) | | Net Cash used by Financing Activities | $(328) | $(1,080) | | Net (Decrease) / Increase in Cash | $(131) | $192 | Notes to Consolidated Condensed Financial Statements Notes detail the pending $12.0 billion CrownRock acquisition, $19.75 billion total debt, $1.0 billion environmental liabilities, and a $182 million arbitration gain - Occidental entered into an agreement to acquire CrownRock L.P. for approximately $12.0 billion, to be financed through new debt, equity issuance, and assumption of existing debt43 - Total debt and finance leases stood at $19.75 billion as of March 31, 2024, with $1.1 billion in maturities due within the next 12 months3940 - A settlement in the Andes Arbitration case was reached on April 5, 2024, resulting in a $182 million gain, net of taxes, recorded in discontinued operations87 - Total environmental remediation liabilities were $1.0 billion as of March 31, 2024, with a significant portion related to the former Diamond Shamrock Chemicals Company and the Diamond Alkali Superfund Site (DASS)6365 Management's Discussion and Analysis of Financial Condition and Results of Operations Management discusses Q1 2024 performance, noting decreased net income due to lower volumes and prices, while highlighting strong liquidity and 2024 strategic priorities Current Business Outlook Occidental's 2024 priorities focus on maximizing cash flow, maintaining production, reducing leverage, and completing the CrownRock Acquisition, with $2.0 billion operating cash flow in Q1 - Key 2024 priorities include maintaining production, delivering a growing dividend, reducing long-term financial leverage, and completing the CrownRock Acquisition110 - The company's long-term debt is rated investment grade by Moody's (Baa3) and Fitch (BBB-), and BB+ by S&P, with $1.1 billion of debt maturities due in the next 12 months109 - In Q1 2024, Occidental declared common stock dividends of $197 million, or $0.22 per share110 Consolidated Results of Operations and Items Affecting Comparability Net income attributable to common stockholders decreased to $718 million in Q1 2024, impacted by lower volumes, prices, and chemical results, alongside a $182 million gain and $56 million in acquisition costs Net Income by Segment (in millions) | Segment | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Oil and gas | $1,238 | $1,572 | $1,640 | | Chemical | $254 | $250 | $472 | | Midstream and marketing | $(33) | $182 | $2 | | Net Income Attributable to Common Stockholders | $718 | $1,029 | $983 | - Items affecting comparability in Q1 2024 included a $182 million gain from discontinued operations, a $91 million derivative loss in midstream, and $56 million in corporate acquisition-related costs for the CrownRock deal112 Segment Results of Operations Oil and Gas earnings decreased to $1.2 billion, Chemical earnings fell to $254 million, and Midstream and Marketing reported a $33 million loss, driven by lower volumes, prices, and margins Total Sales Volumes (Mboe/d) | Period | Q1 2024 | Q4 2023 | Q1 2023 | | :--- | :--- | :--- | :--- | | Total Sales Volumes | 1,175 | 1,230 | 1,214 | Average Realized Prices | Product | Q1 2024 | Q1 2023 | | :--- | :--- | :--- | | Worldwide Oil ($/Bbl) | $76.04 | $74.22 | | Worldwide NGL ($/Bbl) | $22.14 | $24.41 | | Worldwide Natural Gas ($/Mcf) | $1.68 | $2.76 | - The decrease in oil and gas sales volumes was primarily due to a third-party shut-in of production in the Eastern Gulf of Mexico, which has since resumed128130 - The Chemical segment's earnings decline was driven by lower caustic soda prices, though partially offset by improved demand and lower input costs134 Liquidity and Capital Resources Occidental maintains strong liquidity with $1.3 billion cash and a $4.0 billion credit facility, planning to finance the CrownRock acquisition with new debt and a $4.5-6.0 billion divestiture program - Sources of liquidity include $1.3 billion of cash and cash equivalents and a $4.0 billion undrawn revolving credit facility141 - Financing for the CrownRock Acquisition is secured through a $5.3 billion bridge loan and $4.7 billion in term loans, with plans to repay at least $4.5 billion of debt within 12 months post-closing149 - A divestiture program of $4.5 billion to $6.0 billion is planned in connection with the CrownRock Acquisition150 - Approximately $1.2 billion remains under the company's share repurchase program as of March 31, 2024151 Quantitative and Qualitative Disclosures About Market Risk No material changes in market risk exposures were reported for Q1 2024 compared to the 2023 Form 10-K disclosures - There were no material changes in market risk disclosures during the first quarter of 2024157 Controls and Procedures Occidental's disclosure controls and procedures were effective as of March 31, 2024, with no material changes to internal control over financial reporting - Management concluded that disclosure controls and procedures were effective as of March 31, 2024158 - No changes in internal control over financial reporting occurred during the quarter that materially affected, or are reasonably likely to materially affect, internal controls159 Part II Legal Proceedings Information on legal proceedings, including a $1 million disclosure threshold for environmental cases, is referenced in Note 9 of the financial statements - For information on legal proceedings, the report refers to Note 9 of the Consolidated Condensed Financial Statements160 Risk Factors No material changes were reported for risk factors compared to those disclosed in the 2023 Annual Report on Form 10-K - There have been no material changes from the risk factors disclosed in the 2023 Form 10-K161 Other Information No directors or Section 16 officers adopted or terminated Rule 10b5-1 or non-Rule 10b5-1 trading arrangements during Q1 2024 - No directors or Section 16 officers adopted or terminated any Rule 10b5-1 trading arrangements during Q1 2024162 Exhibits This section lists exhibits filed with the Form 10-Q, including incentive plans, credit agreements, and CEO/CFO certifications