Company: OXY-WT
Filing Date: 2025-05-07
Form Type: 10-Q
Source: 0000797468-25-000076
Chunk: 54

Company: OCCIDENTAL PETROLEUM CORP /DE/
Filing Date: 2025-05-07
Form: 10-Q
Item: Item 8
Chunk 54
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)CREDIT RISKThe majority of Occidental’s credit risk is related to the physical delivery of energy commodities to its counterparties and their potential 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 futures contracts through regulated exchanges with select clearinghouses and brokers, which are subject to minimal credit risk, if any.

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NOTE 7 - INCOME TAXESThe following table summarizes components of income tax benefit (expense):Three months ended March 31, millions20252024Income before income taxes$1,332$1,010CurrentFederal(366)(243)State and Local(19)(12)Foreign(131)(140)Total current tax expense$(516)$(395)DeferredFederal14381State and Local52Foreign(19)8Total deferred tax benefit $129$91Total income tax expense$(387)$(304)Income from continuing operations$945$706Worldwide effective tax rate29 %30%The worldwide effective tax rates for the periods presented in the table above were primarily driven by Occidental's jurisdictional mix of income. U.S. income is taxed at a U.S. federal statutory rate of 21%, while international income is subject to tax at statutory rates as high as 55%.INFLATION REDUCTION ACT AND PILLAR TWOIn August 2022, Congress passed the IRA that contains, among other provisions, certain tax incentives related to climate change and clean energy. Since the enactment of the IRA, the U.S. Department of the Treasury has released a substantial amount of regulatory and sub-regulatory guidance. However, much of this guidance remains unfinalized, and significant questions persist regarding its application. In January 2025, the Trump Administration issued an executive order that pauses the disbursement of funds appropriated under the IRA. The ultimate impact of the IRA on Occidental’s businesses depends on several factors, including statutory interpretations in the final regulatory guidance pending issuance and potential changes to IRA incentives in future tax legislation.

The OECD Pillar Two initiative proposes to apply a 15% global minimum tax on multinational entities, applied on a jurisdiction-by-jurisdiction basis. Several countries, including European Union member states, Canada, and Oman, have enacted or are