General

9 Months Ended

Sep. 30, 2022


NOTE 1 - GENERAL

NATURE OF OPERATIONS

Occidental conducts its operations through various subsidiaries and affiliates. Occidental has made its disclosures in accordance with United States generally accepted accounting principles as they apply to interim reporting, and condensed or omitted, as permitted by the U.S. Securities and Exchange Commission’s rules and regulations, certain information and disclosures normally included in Consolidated Financial Statements and the notes thereto. These unaudited Consolidated Condensed Financial Statements should be read in conjunction with the audited Consolidated Financial Statements and the notes thereto in Occidental's Annual Report on Form 10-K for the year ended December 31, 2021.

In the opinion of Occidental’s management, the accompanying unaudited Consolidated Condensed Financial Statements in this report reflect all adjustments (consisting of normal recurring adjustments) that are necessary to fairly present Occidental’s results of operations and cash flows for the three and nine months ended September 30, 2022 and 2021 and Occidental’s financial position as of September 30, 2022 and December 31, 2021. Certain data in the Consolidated Condensed Financial Statements and notes for prior periods have been reclassified to conform to the current presentation. The income and cash flows for the periods ended September 30, 2022 and 2021 are not necessarily indicative of the income or cash flows to be expected for the full year.

CASH EQUIVALENTS AND RESTRICTED CASH EQUIVALENTS

Occidental considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents or restricted cash equivalents. The cash equivalents and restricted cash equivalents balances for the periods presented included investments in government money market funds in which the carrying value approximates fair value.

The following table provides a reconciliation of cash, cash equivalents, restricted cash and restricted cash equivalents as reported in the Consolidated Condensed Statements of Cash Flows as of September 30, 2022 and 2021:


millions	2022		2021
Cash and cash equivalents	$	1,233	$	2,059
Restricted cash and restricted cash equivalents included in other current assets	31		220
Restricted cash and restricted cash equivalents included in long-term receivables and other assets, net	15		15
Cash, cash equivalents, restricted cash and restricted cash equivalents	$	1,279	$	2,294

SUPPLEMENTAL CASH FLOW INFORMATION

The following table represents U.S. federal, domestic, state and international income taxes paid, tax refunds received and interest paid related to continuing operations during the nine months ended September 30, 2022 and 2021, respectively:


millions	2022		2021
Income tax payments	$	1,885	$	502
Income tax refunds received	$	89	$	70
Interest paid (a)	$	1,236	$	1,432

(a) Net of capitalized interest of $50 million and $46 million for the nine months ended September 30, 2022 and 2021, respectively.

BERKSHIRE HATHAWAY OWNERSHIP

Berkshire Hathaway is a related party of Occidental due to its ownership of Occidental's common stock. During the third quarter of 2022, Berkshire Hathaway increased its ownership in Occidental to approximately 194 million shares of common stock. Occidental has, from time to time, contracted with Berkshire Hathaway for the provision of electricity, rail and insurance. In addition, certain Berkshire Hathaway subsidiaries purchase various chemicals from our chemical segment. While these types of transactions between Berkshire Hathaway and Occidental have not been significant, Occidental will continue to assess the financial significance of our transactions with Berkshire Hathaway and its subsidiaries.

WES INVESTMENT

In July 2022, Occidental sold 10.0 million limited partner units of WES for proceeds of $253 million, resulting in a gain of $62 million. As of September 30, 2022, Occidental owned all of the 2.3% non-voting general partner interest and 49.4% of the limited partner units in WES. On a combined basis, with its 2% non-voting limited partner interest in WES Operating, Occidental's total effective economic interest in WES and its subsidiaries was 51.5%.

DISCONTINUED OPERATIONS

The nine months ended 2021 included a $412 million after-tax loss contingency in discontinued operations associated with its former operations in Ecuador, which was primarily recorded in the first quarter of 2021. See Note 9 - Lawsuits, Claims, Commitments and Contingencies. In addition, the results of operations for Ghana for the nine months ended September 30, 2021, an after-tax loss of $32 million, are presented as discontinued operations. The Ghana assets were sold in October 2021.