Analysis of Debt
Total Debt (Carrying Amount)
Occidental Petroleum Corp., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
The total long-term debt carrying amount exhibited a significant V-shaped trajectory between 2020 and 2024. A sustained period of deleveraging reduced total obligations by approximately 45% from 2020 through 2023, followed by a notable increase in borrowing during the 2024 fiscal year.
- Total Long-Term Debt Trend
- A consistent decline in total debt was observed from 2020, when the carrying amount stood at US$ 36,185 million, falling to a low of US$ 19,738 million by December 31, 2023. This downward trend was reversed in 2024, with total debt rising to US$ 26,116 million, representing a year-over-year increase of approximately 32%.
- Long-Term Debt Composition
- The primary driver of the total debt balance is the long-term debt excluding current maturities. This component mirrored the overall corporate trend, decreasing from US$ 35,745 million in 2020 to US$ 18,536 million in 2023, before climbing to US$ 24,978 million in 2024.
- Current Maturities Analysis
- Short-term obligations remained relatively low and stable between 2020 and 2022, fluctuating between US$ 165 million and US$ 440 million. A sharp escalation occurred in 2023, with current maturities rising to US$ 1,202 million and remaining elevated at US$ 1,138 million in 2024, indicating a significant increase in the volume of debt maturing within the one-year horizon compared to the initial analysis period.
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Total Debt (Fair Value)
| Dec 31, 2024 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Total long-term debt, including current maturities (fair value) | 24,000) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.92 |
Based on: 10-K (reporting date: 2024-12-31).
Weighted-average Interest Rate on Debt
Weighted-average interest rate on debt: 5.91%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 5.88% | 536) | 31) | |
| 5.50% | 465) | 26) | |
| 5.55% | 870) | 48) | |
| 3.20% | 182) | 6) | |
| 3.40% | 284) | 10) | |
| 6.25% | 2,700) | 169) | |
| 7.50% | 112) | 8) | |
| 8.50% | 489) | 42) | |
| 3.00% | 216) | 6) | |
| 7.12% | 150) | 11) | |
| 7.00% | 48) | 3) | |
| 5.00% | 600) | 30) | |
| 6.63% | 14) | 1) | |
| 7.15% | 232) | 17) | |
| 7.20% | 82) | 6) | |
| 6.38% | 578) | 37) | |
| 7.20% | 135) | 10) | |
| 7.95% | 116) | 9) | |
| 8.45% | 116) | 10) | |
| 3.50% | 286) | 10) | |
| 5.20% | 1,200) | 62) | |
| 5.71% | 68) | 4) | |
| 8.88% | 1,000) | 89) | |
| 6.63% | 1,449) | 96) | |
| 6.13% | 1,143) | 70) | |
| 7.50% | 900) | 68) | |
| 7.88% | 500) | 39) | |
| 5.38% | 1,000) | 54) | |
| 5.55% | 1,200) | 67) | |
| 6.45% | 1,727) | 111) | |
| 0.00% | 673) | —) | |
| 0.00% | 18) | —) | |
| 4.30% | 247) | 11) | |
| 7.95% | 325) | 26) | |
| 6.20% | 737) | 46) | |
| 4.50% | 191) | 9) | |
| 4.63% | 296) | 14) | |
| 6.60% | 1,117) | 74) | |
| 4.40% | 424) | 19) | |
| 4.10% | 258) | 11) | |
| 4.20% | 304) | 13) | |
| 4.40% | 280) | 12) | |
| 6.05% | 1,000) | 61) | |
| 7.73% | 58) | 4) | |
| 7.50% | 60) | 5) | |
| 7.25% | 5) | —) | |
| 4.80% | 793) | 38) | |
| Total | 25,184) | 1,489) | |
| 5.91% | |||
Based on: 10-K (reporting date: 2024-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 1,489 ÷ 25,184 = 5.91%
Interest Costs Incurred
Occidental Petroleum Corp., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
Analysis of the interest cost structure from 2020 through 2024 reveals a period of significant volatility followed by a recent upward trajectory in total financing obligations. Total interest costs incurred peaked in 2021 before experiencing a substantial contraction through 2023, only to reverse this trend in 2024.
- Total Interest Costs Incurred
- Total interest costs rose from 1,507 million US$ in 2020 to a peak of 1,675 million US$ in 2021. This was followed by a sharp decline to 1,099 million US$ in 2022 and a further slight decrease to 1,043 million US$ in 2023. However, 2024 marks a significant reversal, with costs increasing to 1,364 million US$, representing a 30.8% increase over the previous year.
- Net Interest and Debt Expense
- The expense recognized in the income statement closely mirrors the trend of total costs. After peaking at 1,614 million US$ in 2021, net expenses declined consistently to a low of 945 million US$ in 2023. The 2024 figure of 1,175 million US$ indicates a renewed increase in the direct impact of debt servicing on annual profitability.
- Capitalized Interest Trends
- Capitalized interest remained relatively stable between 2020 and 2022, fluctuating between 61 million US$ and 83 million US$. A distinct upward shift began in 2023 (98 million US$) and accelerated sharply in 2024, reaching 189 million US$. This suggests a significant increase in the allocation of borrowing costs to long-term assets rather than immediate expensing during the final year of the period.
The divergence between total interest costs and net expenses expanded in 2024, driven primarily by the surge in capitalized interest. While overall financing costs are rising again, a larger proportion of these costs is being capitalized compared to the 2020-2023 period.
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Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31).
2024 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest and debt expense, net
= 5,245 ÷ 1,175 = 4.46
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 5,245 ÷ 1,364 = 3.85
The interest coverage metrics exhibit a volatile trajectory characterized by an initial period of severe financial impairment, followed by a rapid recovery and a subsequent moderate decline. The transition from deeply negative values in 2020 to positive ratios in 2021 indicates a fundamental shift in the capacity to service debt obligations from operating earnings.
- Interest coverage ratio (without capitalized interest)
- A sharp reversal is observed between 2020 and 2022, as the ratio moved from -10.03 to a peak of 14.71. This peak represents the highest level of debt service capacity within the analyzed period. However, a downward trend followed, with the ratio decreasing to 7.80 in 2023 and further contracting to 4.46 by December 31, 2024.
- Adjusted interest coverage ratio (with capitalized interest)
- The adjusted ratio mirrors the trend of the non-adjusted metric, moving from -9.48 in 2020 to a peak of 13.78 in 2022. A consistent decline is noted in the subsequent years, with the ratio falling to 7.07 in 2023 and ending at 3.85 in 2024.
The adjusted interest coverage ratio remains consistently lower than the ratio without capitalized interest across all years. This discrepancy confirms that the inclusion of capitalized interest increases the total interest burden, thereby reducing the available coverage margin. While the ratios have remained positive since 2021, the decline from the 2022 peak suggests a reduction in the margin of safety regarding interest payments.
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