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).
- Current Maturities of Long-term Debt
- The current maturities of long-term debt demonstrate a fluctuating pattern over the observed period. Initially, the figure decreases significantly from 440 million US dollars at the end of 2020 to 186 million in 2021, and then slightly further to 165 million in 2022. However, this trend reverses sharply in the subsequent years, with a substantial increase to 1,202 million in 2023, followed by a slight decrease to 1,138 million in 2024. This indicates a marked shift in the company's short-term debt obligations towards the latter years, suggesting potential refinancing or restructuring activities resulting in higher amounts of debt becoming due within a year.
- Long-term Debt, Net, Excluding Current Maturities
- This component exhibits a notable downward trend from 35,745 million in 2020 to 29,431 million in 2021 and continues a steep decline to 19,670 million by the end of 2022. The figure marginally decreases further to 18,536 million in 2023 but then rebounds significantly to 24,978 million in 2024. The initial decreases over the first three years suggest active debt repayment or refinancing strategies aimed at reducing long-term liabilities. The sharp increase in 2024 may reflect new issuances of long-term debt or changes in capital structure to support growth or operational needs.
- Total Long-term Debt, Including Current Maturities
- The total long-term debt, inclusive of current maturities, follows a similar pattern to the underlying components. From 36,185 million at the end of 2020, it declines consistently to 29,617 million in 2021 and drops markedly to 19,835 million in 2022. In 2023, it stabilizes around 19,738 million before rising substantially to 26,116 million in 2024. This trajectory aligns with the observations for current and net long-term debt, indicating overall debt reduction efforts in the earlier years and a resurgence in borrowing or refinancing activities in the most recent year.
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) | |
| 7.13% | 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).
The analysis of annual interest costs incurred reveals several notable trends over the five-year period.
- Interest and debt expense, net
- This line item shows a peak in 2021 at 1,614 million USD, followed by a significant decrease to 1,030 million USD in 2022. The expense further declined slightly in 2023 to 945 million USD but then increased again in 2024 to 1,175 million USD. The overall trend suggests a period of heightened interest expenses in 2021 that was partially reversed in the subsequent two years, with a moderate increase in the most recent year.
- Capitalized interest
- Capitalized interest fluctuated over the period, starting at 83 million USD in 2020 and dipping to 61 million USD in 2021. It then modestly increased to 69 million USD in 2022, rose more significantly to 98 million USD in 2023, and showed a sharp increase to 189 million USD in 2024. The data indicates an increasing trend in capitalized interest particularly in the last two years, which could reflect higher investment activities or changes in accounting capitalization policies.
- Interest costs incurred
- The total interest costs incurred follow a pattern similar to the net interest and debt expense, with a peak in 2021 at 1,675 million USD. This is followed by a decrease in 2022 to 1,099 million USD and a slight decline in 2023 to 1,043 million USD. In 2024, the interest costs incurred rose again to 1,364 million USD. These fluctuations mirror the net interest expense movements, suggesting overall variability in borrowing costs or debt levels across the period.
In summary, the data reveals a general pattern of elevated interest costs in 2021, followed by a reduction in the next two years, with both net interest expense and total interest costs showing an upward trend again in 2024. Capitalized interest has shown a consistent increase in recent years, notably in 2024. These patterns may reflect shifting financing strategies, changes in interest rates, debt restructuring, or increased capital investment activities impacting the interest expense recognition.
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 analysis of the interest coverage ratios over the given periods reveals significant fluctuations and an overall improvement trend followed by a decline in the latest period.
- Interest Coverage Ratio (without capitalized interest)
- The ratio was negative at -10.03 in 2020, indicating an inability to cover interest expenses from operating income during that year. In 2021, the ratio improved markedly to 3.3, suggesting a transition to sufficient earnings to cover interest expenses. This positive momentum continued into 2022, reaching a peak of 14.71, which reflects strong earnings relative to interest costs. However, subsequent periods show a decline to 7.8 in 2023 and a further decrease to 4.46 in 2024, implying a reduction in earnings relative to interest obligations but still remaining above the breakeven threshold.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted ratio follows a similar pattern to the unadjusted ratio but consistently remains slightly lower. It started at -9.48 in 2020, reflecting the negative coverage similarly to the unadjusted ratio. Improvement occurred in 2021 with a value of 3.18, followed by a peak in 2022 at 13.78. In the latter two years, the adjusted ratio declined to 7.07 in 2023 and further to 3.85 in 2024. The downward trend in recent years indicates reduced capacity to cover interest expenses when capitalized interest is included, though coverage remains positive.
Overall, the data reveals a substantial recovery from negative interest coverage in 2020 to significantly positive levels in 2022, indicating improved financial stability and earnings power. Nevertheless, the gradual decline after 2022 suggests emerging pressures on the company's operating earnings relative to its interest obligations, warranting attention to interest expense management and income generation going forward.