OCCIDENTAL PETROLEUM CORP DE

CASH ON HAND

As of December 31, 2023, Occidental had approximately $1.4 billion in cash and cash equivalents. A substantial majority of this cash is held and available for use in the United States.

SOURCES AND USES OF CASH

Occidental currently expects its operational cash flows and cash on hand along with the committed CrownRock Acquisition financing to be sufficient to meet its current debt maturities and other obligations for the next 12 months from the date of this filing. Occidental’s $4.0 billion RCF, receivables securitization facility and access to capital markets are available to meet its ongoing capital needs, purchase obligations, near-term debt maturities and other liabilities and financial obligations, if required.

The RCF maturity date is June 30, 2025. In February 2024, Occidental entered into a Third Amended and Restated Credit Agreement with the same committed borrowing capacity as above, but extended the maturity date to June 30, 2028. No amounts were drawn under the facility as of December 31, 2023.

Occidental’s planned 2024 capital expenditures are between $6.4 billion and $6.6 billion.

As of December 31, 2023, Occidental had $1.1 billion in current maturities of long-term debt which are due in 2024, and an additional $1.2 billion in long-term obligations due in 2025.

As of December 31, 2023, Occidental had $599 million in non-cancelable lease payments due in 2024, and an additional $427 million in non-cancelable lease payments due in 2025.

Dividends paid to common and preferred shareholders were $1.4 billion in 2023.

Occidental is party to various purchase agreements that are not accounted for as leases or otherwise accrued as liabilities as of December 31, 2023. These agreements consist primarily of obligations to secure terminal, pipeline and processing capacity, purchase services used in the normal course of business including transporting and disposing of produced water, purchase goods used in the production of finished goods including certain chemical raw materials and power and agreements relating to equipment maintenance and service. Refer to the line item “Purchase Obligations” in the

MANAGEMENT’S DISCUSSION AND ANALYSIS

table below under Contractual Obligations for the amounts that will be paid for such outstanding off-balance sheet purchase obligations from 2024 and thereafter.

CROWNROCK ACQUISITION FINANCING

In connection with the planned CrownRock Acquisition, Occidental has secured a fully-committed $5.3 billion bridge loan facility, a $2.0 billion 364-day term loan, and a $2.7 billion two-year term loan. Prior to or concurrent with the closing of the acquisition, Occidental plans to issue new debt comprised of a combination of the one and two-year term loans and senior unsecured notes. In addition, Occidental plans to refinance a majority of the $1.2 billion of CrownRock’s existing debt assumed in the acquisition. Occidental intends to repay at least $4.5 billion of debt within 12 months of closing the CrownRock Acquisition with proceeds from the divestiture program and excess cash flows.

DIVESTITURE PROGRAM

In the fourth quarter of 2023, Occidental announced a divestiture program between $4.5 billion and $6.0 billion, which Occidental expects to complete within 18 months of closing the CrownRock Acquisition.

SHARE REPURCHASE PROGRAM

In February 2023, the Board authorized a new share repurchase program of up to $3.0 billion of Occidental’s shares of common stock. During 2023, Occidental purchased a total of 29.1 million shares under the share repurchase program for $1.8 billion and the value remaining as of December 31, 2023 was $1.2 billion.

PREFERRED REDEMPTIONS

In connection with the Anadarko Acquisition, Occidental issued 100,000 shares of series A preferred stock, with a face value of $100,000 per share and a liquidation preference of $105,000 per share plus unpaid accrued dividends. Prior to August 2029, a mandatory redemption provision obligates Occidental to redeem preferred stock at a 10% premium to face value on a dollar-for-dollar basis for every dollar distributed to common shareholders (either via common stock dividends or share repurchases) above $4.00 per share, on a trailing 12-month basis. Preferred redemptions can settle between 30 and 60 days from the date Berkshire Hathaway is notified of the redemption obligation and accrued unpaid dividends are paid up to but not including the redemption date. Occidental cannot voluntarily redeem preferred stock before August 2029. After August 2029, Occidental can voluntarily redeem preferred stock at a 5% premium to face value.

Dividends on the preferred stock accrue on the face value at a rate per annum of 8%, but will be paid only when, as and if declared by Occidental’s Board of Directors. At any time, when such dividends have not been paid in full, the unpaid amounts will accrue dividends, compounded quarterly, at a rate per annum of 9%. Following the payment in full of any accrued but unpaid dividends, the dividend rate will remain at 9% per annum. If preferred dividends are not paid in full, Occidental is prohibited from paying dividends on common stock. Occidental paid $762 million in preferred stock dividends in 2023.

In 2023, Occidental redeemed preferred stock with a face value of $1.5 billion, and incurred $151 million in redemption premiums. To the extent Occidental's trailing 12-month distributions to common shareholders is above $4.00 per share, Occidental is required to match any common shareholder distributions with preferred stock redemptions. As of the date of this filing approximately $8.5 billion face value of the preferred stock remains outstanding.

MANAGEMENT’S DISCUSSION AND ANALYSIS

CONTRACTUAL OBLIGATIONS

The following table summarizes and cross-references Occidental’s contractual obligations and indicates on- and off-balance sheet obligations as of December 31, 2023. Commitments related to held for sale assets are excluded.

(a)Excluded unamortized debt discount and interest.

(b)Occidental is the lessee under various agreements for real estate, equipment, plants and facilities.

(c)Included long-term obligations under postretirement benefits, accrued transportation commitments, ad valorem taxes and other accrued liabilities.

(d)Amounts included payments which will become due under long-term agreements to purchase goods and services used in the normal course of business to secure terminal, pipeline and processing capacity, CO 2, electrical power, non-lease components, steam and certain chemical raw materials including but not limited to capital commitments. Amounts excluded certain product purchase obligations related to marketing activities for which there are no minimum purchase requirements or the amounts are not fixed or determinable. Long-term purchase contracts were discounted at a 5.10% discount rate.

GUARANTEES

Occidental has entered into various guarantees, indemnities and commitments provided by Occidental to third parties, mainly to provide assurance that Occidental or its consolidated subsidiaries or affiliates will meet their various obligations.

As of the date of this filing, Occidental has provided required financial assurance through a combination of cash, letters of credit and surety bonds. Occidental has not issued any letters of credit under the RCF or other committed facilities. For additional information, see Risk Factors in Part I Item 1A of this Form 10-K.

CASH FLOW ANALYSIS

CASH PROVIDED BY OPERATING ACTIVITIES

Cash provided by operating activities decreased in 2023 compared to 2022, primarily due to lower commodity prices in the oil and gas segment, as average WTI and Brent prices decreased by 18% and 17%, respectively, and NYMEX natural gas prices decreased by 54%. Cash provided by operating activities were also impacted by the decrease in realized prices for PVC and caustic soda. The overall decrease in cash provided by operating activities was partially offset by a change in working capital related to a decrease in receivables, due to lower commodity prices.

MANAGEMENT’S DISCUSSION AND ANALYSIS

CASH USED BY INVESTING ACTIVITIES

Cash flows used by investing activities increased by $2.1 billion in 2023 compared to 2022. In 2023, Occidental increased capital spending as a result of increased activity in the Permian, Rockies and Gulf of Mexico as well as increased capital spending on STRATOS in OLCV and on the Battleground chlor-alkali plant in OxyChem. In 2023, Occidental sold certain non-core proved and unproved properties in the Permian Basin for proceeds of $202 million as well as sold WES 5.1 million of its limited partner units owned by Occidental for proceeds of $128 million. Purchase of businesses, assets and equity investments, net primarily included the purchase of Carbon Engineering. Also included in cash flow used by investing activities is Occidental's additional investment in NET Power, for $351 million. See Note 5 - Acquisitions, Divestitures and Other Transactions in the Notes to Consolidated Financial Statements in Part II Item 8 of this Form 10-K for a listing of assets and equity investments acquired and sold in 2023, 2022 and 2021.

CASH USED BY FINANCING ACTIVITIES

Cash used by financing activities decreased by $8.8 billion compared to 2022. In 2023, cash used by financing activities reflected common share repurchases of $1.8 billion and redemptions of preferred stock with a face value of $1.5 billion, with $151 million in redemption premiums and dividend payments of $1.4 billion on preferred and common stock. See Item 5 Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities in Part II of this Form 10-K and Note 14 - Stockholders' Equity in the Notes to Consolidated Financial Statements in Part II Item 8 of this Form 10-K for additional information related to Occidental’s share repurchases.