Item 1.
Financial Statements (unaudited)
OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIES
CONSOLIDATED CONDENSED BALANCE SHEETS
MARCH 31, 2018, AND DECEMBER 31, 2017
(Amounts in millions)
| 2018 | 2017 |
| ASSETS |
| CURRENT ASSETS |
| Cash and cash equivalents | $ | 1,606 | $ | 1,672 |
| Trade receivables, net | 5,184 | 4,145 |
| Inventories | 1,057 | 1,246 |
| Assets held for sale | 335 | 474 |
| Other current assets | 712 | 733 |
| Total current assets | 8,894 | 8,270 |
| INVESTMENTS IN UNCONSOLIDATED ENTITIES | 1,509 | 1,515 |
| PROPERTY, PLANT AND EQUIPMENT, net of accumulated depreciation, depletion and amortization of $39,918 at March 31, 2018, and $39,072 at December 31, 2017 | 31,344 | 31,174 |
| LONG-TERM RECEIVABLES AND OTHER ASSETS, NET | 1,061 | 1,067 |
| TOTAL ASSETS | $ | 42,808 | $ | 42,026 |
| The accompanying notes are an integral part of these consolidated condensed financial statements. |

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| 2018 | 2017 |
| LIABILITIES AND STOCKHOLDERS’ EQUITY |
| CURRENT LIABILITIES |
| Current maturities of long-term debt | $ | — | $ | 500 |
| Accounts payable | 5,059 | 4,408 |
| Accrued liabilities | 2,011 | 2,492 |
| Total current liabilities | 7,070 | 7,400 |
| LONG-TERM DEBT, NET | 10,309 | 9,328 |
| DEFERRED CREDITS AND OTHER LIABILITIES |
| Deferred domestic and foreign income taxes | 659 | 581 |
| Asset retirement obligations | 1,248 | 1,241 |
| Pension and postretirement obligations | 1,008 | 1,005 |
| Environmental remediation reserves | 729 | 728 |
| Other | 1,063 | 1,171 |
| 4,707 | 4,726 |
| STOCKHOLDERS' EQUITY |
| Common stock, at par value (894,134,418 shares at March 31, 2018 and 893,468,707 shares at December 31, 2017) | 179 | 179 |
| Treasury stock (128,364,195 shares at March 31, 2018, and December 31, 2017) | (9,168 | ) | (9,168 | ) |
| Additional paid-in capital | 7,916 | 7,884 |
| Retained earnings | 22,107 | 21,935 |
| Accumulated other comprehensive loss | (312 | ) | (258 | ) |
| Total stockholders’ equity | 20,722 | 20,572 |
| TOTAL LIABILITIES AND STOCKHOLDERS’ EQUITY | $ | 42,808 | $ | 42,026 |
| The accompanying notes are an integral part of these consolidated condensed financial statements. |

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| 2018 | 2017 |
| REVENUES AND OTHER INCOME |
| Net sales | $ | 3,763 | $ | 2,957 |
| Interest, dividends and other income | 29 | 21 |
| Gain on sale of assets, net | 33 | — |
| 3,825 | 2,978 |
| COSTS AND OTHER DEDUCTIONS |
| Cost of sales | 1,363 | 1,426 |
| Selling, general and administrative and other operating expenses | 307 | 272 |
| Taxes other than on income | 108 | 68 |
| Depreciation, depletion and amortization | 921 | 942 |
| Asset impairments and related items | 30 | 13 |
| Exploration expense | 15 | 11 |
| Interest and debt expense, net | 97 | 81 |
| 2,841 | 2,813 |
| Income before income taxes and other items | 984 | 165 |
| Provision for domestic and foreign income taxes | (339 | ) | (78 | ) |
| Income from equity investments | 63 | 30 |
| NET INCOME | $ | 708 | $ | 117 |
| BASIC EARNINGS PER COMMON SHARE | $ | 0.92 | $ | 0.15 |
| DILUTED EARNINGS PER COMMON SHARE | $ | 0.92 | $ | 0.15 |
| DIVIDENDS PER COMMON SHARE | $ | 0.77 | $ | 0.76 |
| The accompanying notes are an integral part of these consolidated condensed financial statements. |

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| 2018 | 2017 |
| Net income | $ | 708 | $ | 117 |
| Other comprehensive income (loss) items: |
| Foreign currency translation gains | 1 | 1 |
| Unrealized gains (losses) on derivatives (a) | (3 | ) | 5 |
| Pension and postretirement gains (b) | 4 | 9 |
| Reclassification of realized (gains) losses on derivatives (c) | 2 | (2 | ) |
| Other comprehensive income, net of tax | 4 | 13 |
| Comprehensive income | $ | 712 | $ | 130 |
| (a) | Net of tax of $1 and $(3) for the three months ended March 31, 2018, and 2017, respectively. |
| (b) | Net of tax of $(1) and $(5) for the three months ended March 31, 2018, and 2017, respectively. |
| (c) | Net of tax of $(1) and $1 for the three months ended March 31, 2018, and 2017, respectively. |

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| 2018 | 2017 |
| CASH FLOW FROM OPERATING ACTIVITIES |
| Net income | $ | 708 | $ | 117 |
| Adjustments to reconcile net income to net cash provided byoperating activities: |
| Depreciation, depletion and amortization of assets | 921 | 942 |
| Deferred income tax (benefit) provision | 94 | (108 | ) |
| Other noncash (gains) charges to income | (23 | ) | 84 |
| Asset impairments and related items | 30 | 13 |
| Gain on sale of assets, net | (33 | ) | — |
| Changes in operating assets and liabilities, net | (688 | ) | (535 | ) |
| Other operating, net | — | (8 | ) |
| Net cash provided by operating activities | 1,009 | 505 |
| CASH FLOW FROM INVESTING ACTIVITIES |
| Capital expenditures | (1,032 | ) | (722 | ) |
| Change in capital accrual | (45 | ) | (41 | ) |
| Payments for purchases of assets and businesses | (177 | ) | (19 | ) |
| Sales of assets, net | 275 | — |
| Other investing, net | 8 | 110 |
| Net cash used by investing activities | (971 | ) | (672 | ) |
| CASH FLOW FROM FINANCING ACTIVITIES |
| Proceeds from long-term debt, net | 978 | — |
| Payments of long-term debt | (500 | ) | — |
| Proceeds from issuance of common stock | 10 | 12 |
| Cash dividends paid | (592 | ) | (584 | ) |
| Net cash used by financing activities | (104 | ) | (572 | ) |
| Decrease in cash and cash equivalents | (66 | ) | (739 | ) |
| Cash and cash equivalents — beginning of period | 1,672 | 2,233 |
| Cash and cash equivalents — end of period | $ | 1,606 | $ | 1,494 |
| The accompanying notes are an integral part of these consolidated condensed financial statements. |

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OCCIDENTAL PETROLEUM CORPORATION AND SUBSIDIARIESNOTES TO CONSOLIDATED CONDENSED FINANCIAL STATEMENTSMARCH 31, 2018 1. GeneralIn these unaudited consolidated condensed financial statements, "Occidental" means Occidental Petroleum Corporation, a Delaware corporation (OPC), or OPC and one or more entities in which it owns a controlling interest (subsidiaries). Occidental has made its disclosures in accordance with United States generally accepted accounting principles (GAAP) as they apply to interim reporting, and condensed or omitted, as permitted by the Securities and Exchange Commission’s rules and regulations, certain information and disclosures normally included in consolidated financial statements and the notes. 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, 2017.In the opinion of Occidental’s management, the accompanying unaudited consolidated condensed financial statements contain all adjustments (consisting of normal recurring adjustments) necessary to fairly present Occidental’s consolidated financial position as of March 31, 2018, and the consolidated statements of operations, comprehensive income and cash flows for the three months ended March 31, 2018, and 2017, as applicable. The income and cash flows for the periods ended March 31, 2018, and 2017, are not necessarily indicative of the income or cash flows to be expected for the full year.2. Asset Acquisitions, Dispositions and Other In March 2018, Occidental divested non-core midstream assets for approximately $150 million, resulting in a pre-tax gain of approximately $40 million. In addition, Occidental classified approximately $100 million of non-core proved Permian acreage as assets held for sale at March 31, 2018. In March 2018, Occidental issued $1.0 billion of 4.2-percent senior notes due 2048. Occidental received net proceeds of approximately $985 million. Interest on the notes will be payable semi-annually in arrears in March and September of each year, beginning on September 15, 2018. The proceeds were used to refinance the repayment of the $500 million aggregate principal amount of Occidental's 1.50-percent senior notes due in February 2018, with the remainder to be used for general corporate purposes.In January 2018, Occidental entered into a new five-year, $3.0 billion revolving credit facility (2018 Credit Facility), which replaced the previous credit facility, that was scheduled to expire in August 2019. The 2018 Credit Facility has similar terms to the previous credit facility and does not contain material adverse change clauses or debt ratings triggers that could restrict Occidental's ability to borrow under the facility.3. Accounting and Disclosure ChangesIn February 2018, the Financial Accounting Standards Board (FASB) released standards that allow the reclassification from accumulated other comprehensive income to retained earnings of stranded tax effects resulting from changes to U.S. federal tax law from the 2017 Tax Cuts and Jobs Act enacted in December 2017. Occidental early adopted this standard in the first quarter of 2018, resulting in the reclassification of $58 million in stranded tax effects from accumulated other comprehensive income to retained earnings. In the first quarter of 2018, Occidental adopted the new revenue recognition standard Topic 606 - Revenue from Contracts with Customers and related updates (ASC 606). The new standard requires more detailed disclosures related to the nature, amount, timing and uncertainty of revenue and cash flows arising from contracts with customers. Occidental adopted the standard using the modified retrospective method. The cumulative-effect adjustment to retained earnings upon adoption was not material. See Note 4 Revenue Recognition.In March 2017, FASB issued guidance related to presentation of net periodic pension cost and net periodic postretirement benefit cost. The rules became effective in the first quarter of 2018. These rules did not have a material impact to Occidental's financial statements upon adoption.
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In January 2017, the FASB issued new guidance clarifying the definition of a business under the topic Business Combinations. The rules became effective in the first quarter of 2018, and did not have a material change to Occidental's financial statements upon adoption.In November 2016, FASB issued new guidance related to the cash flow classification and presentation of the changes in restricted cash on the statement of cash flows. The rules became effective in the first quarter of 2018 and must be applied retrospectively. Occidental did not have restricted cash as of March 31, 2018, or December 31, 2017.In August 2016, the FASB issued new guidance related to the classification of certain cash receipts and payments on the statement of cash flows. The rules were adopted for the first quarter of 2018 and resulted in the retrospective reclassification of $147 million of cash receipts from operating cash flows to investing cash flows for the three months ended March 31, 2017, within the Statement of Cash Flows.In February 2016, the FASB issued rules which require Occidental to recognize most leases, including operating leases, on the balance sheet. The new rules require lessees to recognize a right-of-use asset and lease liability for all leases with lease terms of more than 12 months. The lease liability represents the discounted obligation to make future minimum lease payments. The corresponding right-of-use asset includes the discounted obligation in addition to any upfront payment or cost incurred during contract execution of the lease. The guidance retains the current accounting for lessors and does not make significant changes to the recognition, measurement and presentation of expenses and cash flows by a lessee. Recognition, measurement and presentation of expenses and cash flows arising from a lease will depend on classification as a finance or operating lease. Occidental is the lessee under various agreements for real estate, equipment, plants and facilities, aircraft, information technology hardware and vehicles that are currently accounted for as operating leases. As a result, these new rules will increase reported assets and liabilities. Occidental will not be an early adopter of this standard. Occidental will apply the revised lease rules for its interim and annual reporting periods starting January 1, 2019, using a modified retrospective approach, including several optional practical expedients related to leases commenced before the effective date. Occidental is currently evaluating the effect of these rules on its financial statements, training accounting staff, working with third-party consultants and developing an internal interim software solution for the identification, documentation and tracking of leases in order to create an adoption plan based on Occidental's population of leases under the revised definition of leases. The quantitative impacts of the new standard are dependent on the leases in force at the time of adoption. As a result, the evaluation of the effect of the new standard will extend over future periods.4. Revenue RecognitionOn January 1, 2018, Occidental adopted ASC 606 using the modified retrospective method. Results for reporting periods beginning after January 1, 2018, are presented under ASC 606, while prior period amounts have not been adjusted. There was no impact of adopting ASC 606 to the opening balance of retained earnings. There was no impact to the timing or amount of revenue recognized in the first quarter of 2018 as a result of the adoption of ASC 606. Revenue from customers is recognized when obligations under the terms of a contract with our customer are satisfied; which generally occurs with the delivery of oil, gas, natural gas liquids ("NGL"), chemicals or services such as transportation. Revenue from customers is measured as the amount of consideration Occidental expects to receive in exchange for the delivery of goods or services. Contracts may last from one month to one year or more, and may have renewal terms that may extend indefinitely at the option of either party. Price is typically based on market indexes. Volumes fluctuate due to production and, in certain cases, customer demand and transportation availability. Occidental records revenue net of any taxes, such as sales taxes, that are assessed by governmental authorities on Occidental's customers. Occidental has elected a practical expedient under ASC 606 and will not disclose revenue recognizable in future periods for unsatisfied performance obligations because the consideration related to those performance obligations is based on volume or market prices which are variable. Occidental does not incur significant costs to obtain contracts. Incidental items that are immaterial in the context of the contract are recognized as expense. Sales of hydrocarbons and chemicals to customers are invoiced and settled on a monthly basis. Occidental is not usually subject to obligations for warranties, returns or refunds except in the case of customer incentive payments as discussed for the chemical segment below. Occidental does not typically receive payment in advance of satisfying its obligations under the terms of its sales contracts with customers; therefore liabilities related to such payment are immaterial to Occidental. As of March 31, 2018, accounts receivable, net, of
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| For the three months ended March 31, | 2018 |
| Revenue from customers | $ | 3,694 |
| All other revenues (a) | 69 |
| Total net sales | $ | 3,763 |

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| For the three months ended March 31, 2018 |
| Revenue by Product | United States | Middle East | Latin America | Other International | Total |
| Oil and Gas Segment |
| Oil | $ | 1,247 | $ | 773 | $ | 170 | $ | — | $ | 2,190 |
| NGL | 89 | 51 | — | — | 140 |
| Gas | 52 | 65 | 4 | — | 121 |
| Other | 3 | — | — | — | 3 |
| Segment Total | $ | 1,391 | $ | 889 | $ | 174 | $ | — | $ | 2,454 |
| Chemical Segment | $ | 1,049 | $ | — | $ | 52 | $ | 21 | $ | 1,122 |
| Midstream Segment |
| Gas Processing | $ | 137 | $ | 96 | $ | — | $ | — | $ | 233 |
| Pipelines | 94 | — | — | — | 94 |
| Power and Other | 25 | — | — | — | 25 |
| Segment Total | $ | 256 | $ | 96 | $ | — | $ | — | $ | 352 |
| Intersegment Eliminations | $ | (234 | ) | $ | — | $ | — | $ | — | $ | (234 | ) |
| Consolidated | $ | 2,462 | $ | 985 | $ | 226 | $ | 21 | $ | 3,694 |
| 2018 | 2017 |
| Raw materials | $ | 68 | $ | 66 |
| Materials and supplies | 470 | 447 |
| Finished goods | 562 | 776 |
| 1,100 | 1,289 |
| Revaluation to LIFO | (43 | ) | (43 | ) |
| Total | $ | 1,057 | $ | 1,246 |

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| Number of Sites | Reserve Balance(in millions) |
| NPL sites | 34 | $ | 460 |
| Third-party sites | 71 | 159 |
| Occidental-operated sites | 15 | 107 |
| Closed or non-operated Occidental sites | 29 | 139 |
| Total | 149 | $ | 865 |

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trust became effective. Among other responsibilities, the trust will pursue claims against YPF, Repsol and others and distribute assets to Maxus' creditors in accordance with the trust agreement and Plan.8. Lawsuits, Claims, Commitments and Contingencies Legal MattersOccidental or certain of its subsidiaries are involved, in the normal course of business, in lawsuits, claims and other legal proceedings that seek, among other things, compensation for alleged personal injury, breach of contract, property damage or other losses, punitive damages, civil penalties, or injunctive or declaratory relief. Occidental or certain of its subsidiaries also are involved in proceedings under CERCLA and similar federal, state, local and foreign environmental laws. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties and injunctive relief. Usually Occidental or such subsidiaries are among many companies in these environmental proceedings and have to date been successful in sharing response costs with other financially sound companies. Further, some lawsuits, claims and legal proceedings involve acquired or disposed assets with respect to which a third party or Occidental retains liability or indemnifies the other party for conditions that existed prior to the transaction. In accordance with applicable accounting guidance, Occidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. In Note 7, Environmental Liabilities and Expenditures, Occidental has disclosed its reserve balances for environmental remediation matters that satisfy this criteria. Reserve balances for matters, other than environmental remediation, that satisfy this criteria as of March 31, 2018, and December 31, 2017, were not material to Occidental’s consolidated balance sheets. In 2017, Andes Petroleum Ecuador Ltd. filed a demand for arbitration, claiming it is entitled to a 40 percent share of the settlement payments made by the Republic of Ecuador to Occidental for the 2006 expropriation of Occidental’s Participation Contract for Ecuador’s Block 15. Occidental intends to vigorously defend against this claim in arbitration.The ultimate outcome and impact of outstanding lawsuits, claims and proceedings on Occidental cannot be predicted. Management believes that the resolution of these matters will not, individually or in the aggregate, have a material adverse effect on Occidental's consolidated balance sheet, statements of operations or cash flows after consideration of recorded accruals. Occidental’s estimates are based on information known about the legal matters and its experience in contesting, litigating and settling similar matters. Occidental reassesses the probability and estimability of contingent losses as new information becomes available. Tax MattersDuring the course of its operations, Occidental is subject to audit by tax authorities for varying periods in various federal, state, local and foreign tax jurisdictions. Although taxable years through 2012 for United States federal income tax purposes have been audited by the United States Internal Revenue Service (IRS) pursuant to its Compliance Assurance Program, subsequent taxable years are currently under review. Taxable years from 2002 through the current year remain subject to examination by foreign and state government tax authorities in certain jurisdictions. In certain of these jurisdictions, tax authorities are in various stages of auditing Occidental’s income taxes. During the course of tax audits, disputes have arisen and other disputes may arise as to facts and matters of law. Occidental believes that the resolution of outstanding tax matters would not have a material adverse effect on its consolidated financial position or results of operations.Indemnities to Third Parties Occidental, its subsidiaries, or both, have indemnified various parties against specified liabilities those parties might incur in the future in connection with purchases and other transactions that they have entered into with Occidental. These indemnities usually are contingent upon the other party incurring liabilities that reach specified thresholds. As of March 31, 2018, Occidental is not aware of circumstances that it believes would reasonably be expected to lead to indemnity claims that would result in payments materially in excess of reserves.
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| Three months ended March 31 | 2018 | 2017 |
| Net Periodic Benefit Costs | Pension Benefit | Post-retirement Benefit | Pension Benefit | Post-retirement Benefit |
| Service cost | $ | 2 | $ | 6 | $ | 2 | $ | 5 |
| Interest cost | 4 | 9 | 4 | 10 |
| Expected return on plan assets | (6 | ) | — | (6 | ) | — |
| Recognized actuarial loss | 1 | 4 | 2 | 4 |
| Total | $ | 1 | $ | 19 | $ | 2 | $ | 19 |
| Fair Value Measurements at March 31, 2018: |
| Embedded derivatives | Level 1 | Level 2 | Level 3 | Netting andCollateral | Total FairValue |
| Liabilities: |
| Accrued liabilities | $ | — | $ | 31 | $ | — | $ | — | $ | 31 |
| Deferred credits and liabilities | $ | — | $ | 125 | $ | — | $ | — | $ | 125 |
| Fair Value Measurements at December 31, 2017: |
| Embedded derivatives | Level 1 | Level 2 | Level 3 | Netting andCollateral | Total FairValue |
| Liabilities: |
| Accrued liabilities | $ | — | $ | 39 | $ | — | $ | — | $ | 39 |
| Deferred credits and liabilities | $ | — | $ | 147 | $ | — | $ | — | $ | 147 |

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such instruments’ maturities. The estimated fair value of Occidental’s debt as of March 31, 2018, and December 31, 2017, was $10.6 billion and $10.4 billion, respectively. The remaining principal payments less the discount on long-term debt aggregated approximately $10.4 billion and $9.9 billion as of March 31, 2018, and December 31, 2017, respectively. 11. DerivativesOccidental uses a variety of derivative financial instruments and physical contracts, including those designated as cash flow hedges, to manage its exposure to commodity price fluctuations, transportation commitments and to fix margins on the future sale of stored volumes of oil and natural gas. Where Occidental buys product for its own consumption or sells its production to a defined customer, Occidental elects normal purchases and normal sales exclusions. Occidental usually applies cash flow hedge accounting treatment to derivative financial instruments to lock in margins on the forecast sales of its natural gas storage volumes, and at times for other strategies to lock in margins. Occidental also enters into derivative financial instruments for speculative or trading purposes; however, the results of any transactions are immaterial to the marketing portfolio. The financial instruments not designated as hedges will impact Occidental's earnings through mark-to-market until the offsetting future physical commodity is delivered. For GAAP purposes, any physical inventory is carried at lower of cost or market on the balance sheet. A substantial majority of Occidental's physical derivative contracts are index-based and carry no mark-to-market value in earnings. Net gains and losses associated with derivative instruments not designated as hedging instruments are recognized currently in net sales. Net gains and losses attributable to derivative instruments subject to hedge accounting reside in accumulated other comprehensive income (loss) and are reclassified to earnings as the transactions to which the derivatives relate are recognized in earnings.Credit RiskThe majority of Occidental's counterparty credit risk is related to the physical delivery of energy commodities to its customers and their inability to meet their settlement commitments. Occidental manages credit risk by selecting counterparties that it believes to be financially strong, by entering into netting arrangements with counterparties and by requiring collateral or other credit risk mitigants, as appropriate. Occidental actively evaluates the creditworthiness of its counterparties, assigns appropriate credit limits and monitors credit exposures against those assigned limits. Occidental also enters into future contracts through regulated exchanges with select clearinghouses and brokers, which are subject to minimal credit risk as a significant portion of these transactions settle on a daily margin basis.Certain of Occidental's over-the-counter derivative instruments contain credit-risk-contingent features, primarily tied to credit ratings for Occidental or its counterparties, which may affect the amount of collateral that each would need to post. Occidental believes that if it had received a one-notch reduction in its credit ratings, it would not have resulted in a material change in its collateral-posting requirements as of March 31, 2018, and December 31, 2017.Cash-Flow Hedges Occidental’s marketing operations store natural gas purchased from third parties at Occidental’s leased storage facilities. Derivative instruments are used to fix margins on the future sales of the stored volumes. As of March 31, 2018, Occidental did not have any cash-flow hedges. As of December 31, 2017, Occidental had approximately 7 billion cubic feet (Bcf) of natural gas held in storage, and had cash-flow hedges for the forecast sales, to be settled by physical delivery, of approximately 7 Bcf of stored natural gas. The amount of cash-flow hedges, including the ineffective portion, was immaterial for the three months ended March 31, 2018, and the year ended December 31, 2017.
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| (in millions, except Long/(Short) volumes) | 2018 | 2017 |
| Unrealized gain (loss) on derivatives not designated as hedges |
| Oil Commodity Contracts | $ | (18 | ) | $ | (47 | ) |
| Natural Gas Commodity Contracts | $ | (1 | ) | $ | 1 |
| Outstanding net volumes on derivatives not designated as hedges |
| Oil Commodity Contracts |
| Volume (MMBL) | 57 | 61 |
| Price Per Bbl | $ | 58.64 | $ | 57.38 |
| Natural Gas Commodity Contracts |
| Volume (Bcf) | (63 | ) | (47 | ) |
| Price Per MMBTU | $ | 2.35 | $ | 2.73 |
| As of March 31, 2018 | Fair Value Measurements Using | Netting (b) | Total Fair Value |
| (in millions) | Balance Sheet Location | Level 1 | Level 2 | Level 3 |
| Assets: |
| Derivatives not designated as hedging instruments (a) |
| Commodity contracts | Other current assets | 581 | 181 | — | (613 | ) | 149 |
| Long-term receivables and other assets, net | 7 | 2 | — | (7 | ) | 2 |
| Liabilities: |
| Derivatives not designated as hedging instruments (a) |
| Commodity contracts | Accrued liabilities | 613 | 168 | — | (613 | ) | 168 |
| Deferred credits and liabilities | 6 | 3 | — | (7 | ) | 2 |
| As of December 31, 2017 | Fair Value Measurements Using | Netting (b) | Total Fair Value |
| (in millions) | Balance Sheet Location | Level 1 | Level 2 | Level 3 |
| Assets: |
| Cash-flow hedges (a) |
| Commodity contracts | Other current assets | — | 3 | — | — | 3 |
| Derivatives not designated as hedging instruments (a) |
| Commodity contracts | Other current assets | 485 | 227 | — | (517 | ) | 195 |
| Long-term receivables and other assets, net | 1 | 2 | — | (1 | ) | 2 |
| Liabilities: |
| Derivatives not designated as hedging instruments (a) |
| Commodity contracts | Accrued liabilities | 535 | 222 | — | (517 | ) | 240 |
| Deferred credits and liabilities | 1 | 3 | — | (1 | ) | 3 |
| (a) | Fair values are presented at gross amounts, including when the derivatives are subject to master netting arrangements and presented on a net basis in the consolidated condensed balance sheets. |
| (b) | These amounts do not include collateral. As of March 31, 2018, no collateral received has been netted against derivative assets and collateral paid of $32 million has been netted against derivative liabilities. As of December 31, 2017, no collateral received has been netted against derivative assets and collateral paid of $54 million has been netted against derivative liabilities. Select clearinghouse and brokers require Occidental to post an initial margin deposit. Collateral deposited by Occidental, mainly for initial margin, of $71 million and $53 million as of March 31, 2018 and December 31, 2017, respectively, has not been reflected in these derivative fair value tables. This collateral is included in other current assets in the consolidated condensed balance sheets. |

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| Oil | Midstream | Corporate |
| and | and | and |
| Gas | Chemical | Marketing | Eliminations | Total |
| Three months ended March 31, 2018 |
| Net sales | $ | 2,454 | $ | 1,154 | $ | 389 | $ | (234 | ) | $ | 3,763 |
| Pre-tax operating profit (loss) | $ | 750 | $ | 298 | $ | 179 | $ | (180 | ) | (a) | $ | 1,047 |
| Income taxes | — | — | — | (339 | ) | (b) | (339 | ) |
| Net income (loss) | $ | 750 | $ | 298 | $ | 179 | $ | (519 | ) | $ | 708 |
| Three months ended March 31, 2017 |
| Net sales | $ | 1,894 | $ | 1,068 | $ | 211 | $ | (216 | ) | $ | 2,957 |
| Pre-tax operating profit (loss) | $ | 220 | $ | 170 | $ | (47 | ) | $ | (148 | ) | (a) | $ | 195 |
| Income taxes | — | — | — | (78 | ) | (b) | (78 | ) |
| Net income (loss) | $ | 220 | $ | 170 | $ | (47 | ) | $ | (226 | ) | $ | 117 |

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| Three months ended March 31 |
| 2018 | 2017 |
| Basic EPS |
| Net Income | $ | 708 | $ | 117 |
| Less: Net income allocated to participating securities | (3 | ) | — |
| Net Income, net of participating securities | 705 | 117 |
| Weighted average number of basic shares | 765.6 | 764.4 |
| Basic EPS | $ | 0.92 | $ | 0.15 |
| Diluted EPS |
| Net income, net of participating securities | $ | 705 | $ | 117 |
| Weighted average number of basic shares | 765.6 | 764.4 |
| Dilutive effect of potentially dilutive securities | 1.4 | 0.8 |
| Total diluted weighted average common shares | 767.0 | 765.2 |
| Diluted EPS | $ | 0.92 | $ | 0.15 |

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Item 2.
Management’s Discussion and Analysis of Financial Condition and Results of Operations
In this report, “Occidental” means Occidental Petroleum Corporation (OPC), or OPC and one or more entities in which it owns a controlling interest (subsidiaries). Portions of this report contain forward-looking statements and involve risks and uncertainties that could materially affect expected results of operations, liquidity, cash flows and business prospects. Actual results may differ from anticipated results, sometimes materially, and reported results should not be considered an indication of future performance. Factors that could cause results to differ include, but are not limited to: global commodity pricing fluctuations; supply and demand considerations for Occidental’s products; higher-than-expected costs; the regulatory approval environment; not successfully completing, or any material delay of, field developments, expansion projects, capital expenditures, efficiency projects, acquisitions or dispositions; uncertainties about the estimated quantities of oil and natural gas reserves; lower-than-expected production from development projects or acquisitions; exploration risks; general economic slowdowns domestically or internationally; political conditions and events; liability under environmental regulations including remedial actions; litigation; disruption or interruption of production or manufacturing or facility damage due to accidents, chemical releases, labor unrest, weather, natural disasters, cyber attacks or insurgent activity; failure of risk management; changes in law or regulations; reorganization or restructuring of Occidental’s operations; or changes in tax rates. Words such as “estimate,” “project,” “predict,” “will,” “would,” “should,” “could,” “may,” “might,” “anticipate,” “plan,” “intend,” “believe,” “expect,” “aim,” “goal,” “target,” “objective,” “likely” or similar expressions that convey the prospective nature of events or outcomes generally indicate forward-looking statements. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Occidental does not undertake any obligation to update any forward-looking statements, as a result of new information, future events or otherwise. Material risks that may affect Occidental’s results of operations and financial position appear in Part I, Item 1A “Risk Factors” of Occidental's Annual Report on Form 10-K for the year ended December 31, 2017 (the 2017 Form 10-K).
Consolidated Results of Operations
Occidental reported net income of $708 million for the first quarter of 2018 on net sales of $3.8 billion, compared to net income of $117 million on net sales of $3.0 billion for the first quarter of 2017. The increase in net income mainly reflected higher crude oil prices and volumes in the oil and gas segment, significant improvements in realized caustic soda prices in the chemical segment, and higher marketing margins from improved crude oil price spreads and additional incremental margin earned from exporting crude oil from the Ingleside Crude Terminal and higher realized NGL prices from gas processing in the midstream and marketing segment. Diluted earnings per share was $0.92 for the first quarter of 2018 compared to $0.15 for the first quarter of 2017.
Selected Statements of Operations Items
Net sales increased for the three months ended March 31, 2018, compared to the same period in 2017, as a result of higher oil prices and volumes, higher realized caustic soda prices and higher marketing margins from improved crude oil spreads.
Cost of sales decreased for the three months ended March 31, 2018, compared to the same period in 2017, mainly due to changes in the fair value of a long-term contract to purchase CO2. The increase in selling, general and administrative and other operating expenses for the three months ended March 31, 2018, compared to the same period in 2017, reflected higher compensation costs, partially due to the change in timing of stock-based incentive compensation awards and improved stock price. Taxes other than on income increased for the three months ended March 31, 2018, compared to the same period of 2017, mainly due to higher production taxes as a result of higher domestic oil prices. The decrease in DD&A expense for the three months ended March 31, 2018, compared to the same period in 2017, was mainly due to lower DD&A rates in the Permian Resources oil and gas operations.
The increase in the domestic and foreign income tax provision for the three months ended March 31, 2018, compared to the same period in 2017, reflected higher pre-tax operating income in the first quarter of 2018.
Selected Analysis of Financial Position
See “Liquidity and Capital Resources” for a discussion about the changes in cash and cash equivalents.
The increase in trade receivables, net, at March 31, 2018, compared to December 31, 2017, was primarily due to higher prices and volumes exported from the Ingleside crude terminal. The decrease in inventories at March 31,
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| Three months ended March 31 |
| 2018 | 2017 |
| Net Sales (a) |
| Oil and Gas | $ | 2,454 | $ | 1,894 |
| Chemical | 1,154 | 1,068 |
| Midstream and Marketing | 389 | 211 |
| Eliminations | (234 | ) | (216 | ) |
| $ | 3,763 | $ | 2,957 |
| Segment Results |
| Oil and Gas | $ | 750 | $ | 220 |
| Chemical | 298 | 170 |
| Midstream and Marketing | 179 | (47 | ) |
| 1,227 | 343 |
| Unallocated Corporate Items |
| Interest expense, net | (92 | ) | (78 | ) |
| Income tax expense | (339 | ) | (78 | ) |
| Other expense, net | (88 | ) | (70 | ) |
| Net income | $ | 708 | $ | 117 |

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| Three months ended March 31 |
| 2018 | 2017 |
| Oil and Gas | $ | 750 | $ | 220 |
| Chemical | 298 | 170 |
| Midstream and Marketing | 179 | (47 | ) |
| Unallocated Corporate Items | (180 | ) | (148 | ) |
| Pre-tax Income | 1,047 | 195 |
| Income tax expense (benefit) |
| Federal and state | 95 | (113 | ) |
| Foreign | 244 | 191 |
| Total | 339 | 78 |
| Income from continuing operations | $ | 708 | $ | 117 |
| Worldwide effective tax rate | 32 | % | 40 | % |

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| Three months ended March 31 |
| Production Volumes per Day | 2018 | 2017 |
| Oil (MBBL) |
| United States (a) | 228 | 190 |
| Middle East | 139 | 152 |
| Latin America | 32 | 28 |
| NGL (MBBL) |
| United States (a) | 59 | 47 |
| Middle East | 26 | 26 |
| Natural Gas (MMCF) |
| United States (a) | 294 | 244 |
| Middle East | 449 | 444 |
| Latin America | 6 | 8 |
| Total Production Ongoing Operations (MBOE) | 609 | 559 |
| Operations Exited | — | 25 |
| Total Production Volumes (MBOE) (b) | 609 | 584 |
| Three months ended March 31 |
| Sales Volumes per Day | 2018 | 2017 |
| Oil (MBBL) |
| United States (a) | 228 | 190 |
| Middle East | 140 | 152 |
| Latin America | 32 | 27 |
| NGL (MBBL) |
| United States (a) | 59 | 47 |
| Middle East | 26 | 26 |
| Natural Gas (MMCF) |
| United States (a) | 294 | 244 |
| Middle East | 450 | 444 |
| Latin America | 6 | 8 |
| Total Sales Ongoing Operations (MBOE) | 610 | 558 |
| Operations Exited | — | 25 |
| Total Sales Volumes (MBOE) (b) | 610 | 583 |

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| Three months ended March 31 |
| Average Realized Prices | 2018 | 2017 |
| Oil ($/BBL) |
| United States | $ | 61.03 | $ | 48.67 |
| Middle East | $ | 61.45 | $ | 49.63 |
| Latin America | $ | 59.24 | $ | 48.26 |
| Total Worldwide | $ | 61.04 | $ | 49.04 |
| NGL ($/BBL) |
| United States | $ | 26.89 | $ | 23.07 |
| Middle East | $ | 21.89 | $ | 18.64 |
| Total Worldwide | $ | 25.35 | $ | 21.59 |
| Natural Gas ($/MCF) |
| United States | $ | 2.06 | $ | 2.68 |
| Latin America | $ | 5.68 | $ | 4.77 |
| Total Worldwide | $ | 1.82 | $ | 2.07 |
| Three months ended March 31 |
| Average Index Prices | 2018 | 2017 |
| WTI oil ($/BBL) | $ | 62.87 | $ | 51.91 |
| Brent oil ($/BBL) | $ | 67.18 | $ | 54.66 |
| NYMEX gas ($/MCF) | $ | 2.87 | $ | 3.26 |
| Average Realized Prices as Percentage of Average Index Prices | Three months ended March 31 |
| 2018 | 2017 |
| Worldwide oil as a percentage of average WTI | 97 | % | 94 | % |
| Worldwide oil as a percentage of average Brent | 91 | % | 90 | % |
| Worldwide NGL as a percentage of average WTI | 40 | % | 42 | % |
| Domestic natural gas as a percentage of average NYMEX | 72 | % | 82 | % |

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Midstream and Marketing SegmentMidstream and marketing earnings were $179 million for the three months ended March 31, 2018, compared with a loss of $47 million for the same period 2017. The year over year improvement in midstream and marketing results reflected $43 million pre-tax gain on sale of interests in a gas plant and higher marketing margins due to the improved crude oil spreads, additional incremental margin earned from exporting crude oil from the Ingleside crude terminal and improved returns in the gas processing business as a result of higher NGL and sulfur prices.Liquidity and Capital Resources At March 31, 2018, Occidental had $1.6 billion in cash. Income and cash flows are largely dependent on the oil and gas segment's realized prices, sales volumes and operating costs. With a continued focus on capital efficiency and operational efficiency, Occidental expects to fund its liquidity needs, including future dividend payments, through cash on hand, cash generated from operations, monetization of non-core assets or investments, future borrowings, and, if necessary, proceeds from other forms of capital issuance. Net cash provided by operating activities was $1.0 billion for the three months ended March 31, 2018, compared to $0.5 billion for the same period of 2017. Cash flows were positively impacted by higher oil prices in the first three months of 2018 as compared to the same period in 2017. The impact of the chemical and the midstream and marketing segments on overall cash flows is typically less significant than the impact of the oil and gas segment because these segments are smaller. Occidental’s net cash used by investing activities was $1.0 billion for the first three months of 2018, compared to $0.7 billion for the same period of 2017. Capital expenditures for the first three months of 2018 were $1.0 billion of which $0.9 billion was for the oil and gas segment, compared to $0.7 billion for the first three months of 2017 of which $0.6 billion was for the oil and gas segment. The first quarter of 2018 also reflected $0.3 billion of cash received from the sale of assets and $0.2 billion of cash paid for the purchase of assets. Occidental’s net cash used by financing activities was $104 million for the three months of 2018, compared to net cash used by financing activities of $0.6 billion for the same period of 2017. Cash used by financing activities for the first quarter of 2018 included the first quarter dividend payment of $0.6 billion, payment of $0.5 billion of 1.5-percent senior notes that were due February of 2018 and proceeds from the issuance of $1.0 billion of 4.2-percent senior notes due 2048.As of March 31, 2018, Occidental was in compliance with all covenants of its financing agreements and had substantial capacity for additional unsecured borrowings, the payment of cash dividends and other distributions on, or acquisitions of, Occidental stock. Environmental Liabilities and ExpendituresOccidental’s operations are subject to stringent federal, state, local and foreign laws and regulations related to improving or maintaining environmental quality. Occidental’s environmental compliance costs have generally increased over time and are expected to rise in the future. Occidental factors environmental expenditures for its operations into its business planning process as an integral part of producing quality products responsive to market demand.The laws that require or address environmental remediation, including CERCLA and similar federal, state, local and foreign laws, may apply retroactively and regardless of fault, the legality of the original activities or the current ownership or control of sites. OPC or certain of its subsidiaries participate in or actively monitor a range of remedial activities and government or private proceedings under these laws with respect to alleged past practices at operating, closed and third-party sites. Remedial activities may include one or more of the following: investigation involving sampling, modeling, risk assessment or monitoring; cleanup measures including removal, treatment or disposal of hazardous substances; or operation and maintenance of remedial systems. These environmental proceedings seek funding or performance of remediation and, in some cases, compensation for alleged property damage, punitive damages, civil penalties, injunctive relief and government oversight costs.Refer to Note 7, Environmental Liabilities and Expenditures, in the Notes to the Consolidated Condensed Financial Statements in Part I Item 1 of this Form 10-Q and to the Environmental Liabilities and Expenditures section of Management’s Discussion and Analysis of Financial Condition and Results of Operations in the 2017 Form 10-K for
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additional information regarding Occidental’s environmental expenditures.Lawsuits, Claims, Commitments and ContingenciesOccidental accrues reserves for outstanding lawsuits, claims and proceedings when it is probable that a liability has been incurred and the liability can be reasonably estimated. Occidental has disclosed its reserve balances for environmental remediation matters. Reserve balances for other matters as of March 31, 2018, and December 31, 2017, were not material to Occidental's consolidated balance sheets. Occidental also evaluates the amount of reasonably possible losses that it could incur as a result of the matters mentioned above. Occidental has disclosed its range of reasonably possible additional losses for sites where it is a participant in environmental remediation. Occidental believes that other reasonably possible losses which it could incur in excess of reserves accrued on the balance sheet would not be material to its consolidated financial position or results of operations. For further information, see Note 8, Lawsuits, Claims, Commitments and Contingencies, in the Notes to Consolidated Condensed Financial Statements in Part I Item 1 of this Form 10-Q. Recently Adopted Accounting and Disclosure ChangesSee Note 3, Accounting and Disclosure Changes, in the Notes to Consolidated Condensed Financial Statements in Part I Item 1 of this Form 10-Q.
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
For the three months ended March 31, 2018, there were no material changes in the information required to be provided under Item 305 of Regulation S-K included under Item 7A, "Quantitative and Qualitative Disclosures About Market Risk" in the 2017 Form 10-K.
Item 4.
Controls and Procedures
Occidental's President and Chief Executive Officer and its Senior Vice President and Chief Financial Officer supervised and participated in Occidental's evaluation of its disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934) as of the end of the period covered by this report. Based upon that evaluation, Occidental's President and Chief Executive Officer and Senior Vice President and Chief Financial Officer concluded that Occidental's disclosure controls and procedures were effective as of March 31, 2018.
There has been no change in Occidental's internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Securities Exchange Act of 1934) during the first three months of 2018 that has materially affected, or is reasonably likely to materially affect, Occidental's internal control over financial reporting.
PART II OTHER INFORMATION
Item 1.
Legal Proceedings
For information regarding other legal proceedings, see Note 8, Lawsuits, Claims, Commitments and Contingencies in the Notes to Consolidated Condensed Financial Statements, in Part I Item 1 of this Form 10-Q, and Part I Item 3, “Legal Proceedings” in the 2017 Form 10-K.
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Item 6.
Exhibits
| 4.1* | Indenture, dated as of August 18, 2011, between Occidental and The Bank of New York Mellon Trust Company, N.A. (filed as Exhibit 4.1 to the Current Report on Form 8-K of Occidental filed August 19, 2011, File No. 1-9210). |
| 4.2* | Officers’ Certificate of Occidental Petroleum Corporation dated March 2, 2018 establishing the 4.20% Senior Notes due 2048 (filed as Exhibit 4.2 to the Current Report on Form 8-K of Occidental dated February 28, 2018 (date of earliest event reported), filed March 2, 2018, File No. 1-9210). |
| 4.3* | Form of 4.20% Senior Notes due 2048 (included as Exhibit A to Exhibit 4.2) (filed as Exhibit 4.3 to the Current Report on Form 8-K of Occidental dated February 28, 2018 (date of earliest event reported), filed March 2, 2018, File No. 1-9210). |
| 4.4* | Second amendment to the Occidental Petroleum Corporation 2015 Long-Term Incentive Plan (filed as Exhibit 4.5 to the Registration Statement on Form S-8 of Occidental filed May 4, 2018, File No. 333-224691) |
| 10.1 | Form of 2018 Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Total Shareholder Return Incentive Award. |
| 10.2 | Form of 2018 Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Restricted Stock Unit Incentive Award. |
| 10.3 | Form of 2018 Occidental Petroleum Corporation 2015 Long-Term Incentive Plan Cash Return on Capital Employed Incentive Award. |
| 12 | Statement regarding the computation of total enterprise ratios of earnings to fixed charges for the three months ended March 31, 2018, and 2017, and for each of the five years in the period ended December 31, 2017. |
| 31.1 | Certification of CEO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 31.2 | Certification of CFO Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. |
| 32.1 | Certifications of CEO and CFO Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. |
| 101.INS | XBRL Instance Document. |
| 101.SCH | XBRL Taxonomy Extension Schema Document. |
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document. |
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document. |
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document. |
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document. |

____________________________
* Incorporated herein by reference
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| OCCIDENTAL PETROLEUM CORPORATION |

| DATE | May 8, 2018 | /s/ Jennifer M. Kirk |
| Jennifer M. Kirk |
| Vice President, Controller and |
| Principal Accounting Officer |

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Question: What is the interest coverage ratio for the year 2018?

Solution:
def solution():
     #Define variables name and value
    EBIT = 984
    interest_expense = 97

    #Do math calculation to get the answer
    interest_coverage_ratio = EBIT / interest_expense
    return interest_coverage_ratio


Answer: 10.144329896907216