Occidental Petroleum Corp. (NYSE:OXY)

Current Tax Expense

The current tax expense exhibited significant variability over the five-year period. Starting at $345 million in 2020, it rose sharply to $869 million in 2021, followed by a substantial increase to $2,457 million in 2022. Subsequently, it decreased to $1,676 million in 2023 and slightly declined further to $1,635 million in 2024. Overall, current tax expense showed a general upward trend with a peak in 2022, indicating fluctuating tax liabilities in the short term.

Deferred Tax Expense (Benefit)

The deferred tax expense showed considerable volatility and frequently reversed between expense and benefit. In 2020, there was a significant deferred tax benefit of $2,517 million. This shifted to a modest deferred tax expense of $46 million in 2021, before returning to a substantial deferred tax benefit amounting to $1,644 million in 2022. In 2023 and 2024, deferred tax expense observed small expense and benefit amounts of $57 million and $461 million respectively, suggesting ongoing adjustments in temporary differences affecting deferred taxes.

Income Tax Expense (Benefit)

The total income tax expense, combining current and deferred components, reflected considerable fluctuations across the years. The company recorded an overall income tax benefit of $2,172 million in 2020, which switched to an expense of $915 million in 2021. This expense slightly decreased to $813 million in 2022, then climbed significantly to $1,733 million in 2023 before moderating to $1,174 million in 2024. These variations indicate the interplay between current tax obligations and deferred tax effects leading to fluctuations in total tax charges over time.

Overall Insights

The data highlights volatile tax outcomes influenced by both current tax liabilities and changes in deferred tax balances. Notably, large deferred tax benefits in 2020 and 2022 contributed to overall income tax benefits, whereas other years showed net tax expenses. The marked increases in current tax expense in 2021 and especially 2022 correspond with periods of reduced deferred tax benefits, likely due to changes in temporary differences or tax rate adjustments. The pattern suggests the company's tax position is sensitive to timing differences and tax regulations, resulting in heterogeneous tax expense profiles year over year.

U.S. federal statutory tax rate

The U.S. federal statutory tax rate remained constant at 21% across all reported years, showing no fluctuation over the period.

Legal entity reorganization

A significant negative impact of -18% was observed in 2022, indicating a one-time tax effect from reorganization activities during that year. This impact was absent in other years.

Enhanced oil recovery credit and other general business credits

There was a -3% tax credit impact in 2021, which was not repeated in subsequent years, suggesting a temporary benefit related to these credits.

Goodwill impairment

A -3% effect was recorded in 2020, reflecting a goodwill impairment charge that reduced the tax rate that year, with no further occurrences reported.

Capital loss

Capital losses led to a -2% tax effect in 2021, absent in other years, indicating a discrete capital loss event impacting that year's taxes.

Tax impact from foreign operations

The tax impact from foreign operations shows notable variability: a -4% in 2020, rising sharply to 8% in 2021, then moderating to 3% in 2022 and 2023, with a slight increase to 5% in 2024. This suggests fluctuating foreign operations' profitability or tax regimes affecting the effective tax rate over time.

State income taxes, net of federal benefit

State income taxes influenced the rates negatively by -2% in 2021 and positively by 1% in 2023, indicating varying state-level tax burdens or benefits in those years.

Uncertain tax positions

Starting in 2023, uncertain tax positions contributed to 2% and 3% increases in 2023 and 2024 respectively, showing growing tax uncertainties or adjustments in these periods.

Executive compensation limitation

A minor 1% increase due to executive compensation limitations was noted in 2021, with no effects in other years.

Other

An additional 2% increase was recorded in 2021 under other categories, indicating miscellaneous tax impacts during that year.

Worldwide effective tax rate

The worldwide effective tax rate exhibited significant variability over the five years: it increased from 14% in 2020 to a high of 25% in 2021, dropped sharply to 6% in 2022, rebounded to 27% in 2023, and slightly rose further to 29% in 2024. This volatility appears influenced by discrete tax events such as legal reorganizations, credits, impairments, and foreign tax effects.

Environmental Reserves

The environmental reserves showed a gradual decline from 257 million USD in 2020 to 223 million USD in 2023, followed by a sharp increase to 416 million USD in 2024. This indicates a recent rise in the amount set aside for environmental liabilities after several years of decrease.

Postretirement Benefit Accruals

Postretirement benefit accruals declined consistently from 398 million USD in 2020 to 229 million USD in 2023, then slightly increased to 249 million USD in 2024, reflecting a modest rebound after a multi-year reduction in obligations.

Deferred Compensation and Benefits

This item shows fluctuations over the years: an increase in 2021 to 286 million USD, a decline to 207 million USD in 2022, followed by a steady rise through 2023 and 2024, reaching 258 million USD. This pattern indicates variability with recent growth.

Asset Retirement Obligations

There is a steady downward trend in asset retirement obligations from 942 million USD in 2020 to 722 million USD in 2023, with a slight recovery to 788 million USD in 2024. The overall decline suggests reduced expected costs related to asset retirement over the period.

Foreign Tax Credit Carryforwards

The foreign tax credit carryforwards declined markedly from 4,465 million USD in 2020 to 1,975 million USD in 2024, indicating a significant utilization or expiration of these credits over time.

Business Credit Carryforwards

Business credit carryforwards rose slightly from 607 million USD in 2020 to 698 million USD in 2021, then sharply dropped to 30 million USD in 2022, followed by gradual increases to 54 million USD in 2024. This sharp decline may reflect large utilizations or changes in tax strategy.

Net Operating Loss Carryforward

Net operating loss carryforwards decreased mostly steadily from 1,797 million USD in 2020 to 1,031 million USD in 2024, implying ongoing use of these losses to offset taxable income.

Interest Expense Carryforward

A rapid decline occurred from 668 million USD in 2020 to 28 million USD in 2021, remaining stable at 11 million USD from 2022 onward. This suggests near exhaustion or elimination of this carryforward category.

All Other

The 'All other' category varied moderately, declining from 720 million USD in 2020 to 539 million USD in 2024, with some fluctuations in between, showing a general downward trajectory.

Gross Long-term Deferred Tax Assets

Gross long-term deferred tax assets decreased consistently from 10,040 million USD in 2020 to 5,321 million USD in 2024, approximately halving over the five-year span, which may reflect asset utilization or adjustments to carrying values.

Valuation Allowance

The valuation allowance, represented as negative values, decreased in absolute terms from -5,695 million USD in 2020 to -2,962 million USD in 2024, indicating a reduction in estimated uncollectible deferred tax assets and possibly an improved outlook on asset realizability.

Net Long-term Deferred Tax Assets

Net deferred tax assets declined from 4,345 million USD in 2020 to 1,965 million USD in 2023, before recovering slightly to 2,359 million USD in 2024. This pattern follows the gross assets and valuation allowance trends, implying fluctuations in expected tax benefits.

Property, Plant and Equipment Differences

These deferred tax liabilities were consistently negative, decreasing in magnitude from -10,744 million USD in 2020 to around -7,100 million USD in 2024, indicating a reduction in temporary differences related to capital assets.

Equity Investments, Partnerships, and International Subsidiaries

The deferred tax liabilities related to these investments experienced some volatility, with amounts moving from -658 million USD in 2020 to as low as -709 million USD in 2023, then slightly improving to -633 million USD in 2024.

Gross Long-term Deferred Tax Liabilities

Gross deferred tax liabilities decreased from -11,402 million USD in 2020 to -7,659 million USD in 2022, then stabilized around -7,700 million USD by 2024, demonstrating a downward adjustment and subsequent stabilization.

Deferred Income Tax Asset (Liability), Net

The net deferred income tax position remained negative throughout, fluctuating slightly from -7,057 million USD in 2020 to -5,374 million USD in 2024, indicating persistent net deferred tax liabilities with some improvement.

Foreign deferred tax asset in long-term receivables and other assets, net

There is a consistent downward trend in the foreign deferred tax asset recorded in long-term receivables and other assets from 2020 through 2024. The value decreased from 56 million USD at the end of 2020 to 20 million USD by the end of 2024. This steady decline suggests either a utilization of these deferred tax assets or changes in the underlying foreign tax positions or asset valuations over the period.

Deferred income tax liability

The deferred income tax liability presents a generally decreasing trend from 7,113 million USD at the end of 2020 to 5,394 million USD at the end of 2024. While there is a notable drop between 2021 and 2022, falling from 7,039 million USD to 5,512 million USD, there is a slight increase in 2023 to 5,764 million USD, before decreasing again in 2024. Overall, the reduction in deferred tax liabilities over the five years may reflect changes in taxable temporary differences, adjustments in tax rates, or tax planning strategies impacting future tax obligations.

The financial data reveals several noteworthy trends over the five-year period ending December 31, 2024.

Total Assets

Both reported and adjusted total assets display a generally declining trend from 2020 through 2022, decreasing from approximately 80 billion US dollars to around 72.6-72.5 billion US dollars. In 2023 and 2024, a reversal occurs with an increase, culminating in a significant rise to about 85.4 billion US dollars by the end of 2024. The adjusted figures closely track the reported values, indicating minimal difference after tax adjustments.

Total Liabilities

Total liabilities, reported and adjusted, exhibit a marked downward trajectory from 2020 to 2022, dropping sharply from around 61.5 billion and 54.4 billion US dollars reported and adjusted respectively, to 42.5 billion and 37 billion US dollars. This decline slows in 2023 before both measures experience an uptick in 2024, reaching near 51 billion and 45.6 billion US dollars, revealing some reaccumulation of liabilities. The adjusted liabilities consistently remain lower than the reported liabilities, suggesting that deferred tax adjustments reduce the liability base significantly.

Stockholders’ Equity

Reported stockholders’ equity steadily increases across the period from approximately 18.6 billion US dollars in 2020 to about 34.2 billion by 2024, indicative of strengthening equity position. Adjusted equity follows the same pattern but at higher values, starting at approximately 25.6 billion and rising to 39.5 billion. The growth in adjusted equity is more pronounced, reflecting the adjustments for deferred income taxes that enhance equity values.

Net Income (Loss) Attributable to Occidental

Net income reported figures demonstrate a significant turnaround from a substantial loss of approximately 14.8 billion US dollars in 2020 to positive earnings starting in 2021, peaking at over 13.3 billion in 2022 before declining in the subsequent years to 3.1 billion in 2024. The adjusted net income exhibits a similar pattern but with somewhat lower income amounts and higher losses in 2020. Importantly, the 2020 loss is more severe in the adjusted figure, while the income reported in later years indicates recovery and profitability stabilization albeit with some fluctuations downward in 2023 and 2024.

Overall, the analysis identifies a phase of asset and liability reduction through 2022 followed by renewed asset growth and liability increase in 2024. Stockholders’ equity has progressively strengthened, supported by recovery in net income after a significant loss in 2020. The differences between reported and adjusted data primarily reflect accounting for deferred income tax effects, which reduce liabilities and augment equity, while slightly modifying net income trends.

Net Profit Margin

The reported net profit margin showed a significant negative value in 2020, indicating a substantial loss, but drastically improved to positive territory by 2021. It peaked in 2022 at 36.32%, followed by a decline in 2023 and 2024 down to 11.43%. The adjusted net profit margin followed a similar pattern, with a more severe negative margin in 2020 (-97.41%) and a peak in 2022 (31.83%), then a decrease over the subsequent years, reaching 9.71% in 2024.

Total Asset Turnover

Both reported and adjusted total asset turnover ratios improved steadily from 0.22 in 2020 to a peak of 0.5 in 2022, indicating increased efficiency in asset utilization during that period. However, this ratio declined in 2023 and further in 2024 to 0.31, suggesting reduced effectiveness in generating revenue from assets in recent years.

Financial Leverage

The reported financial leverage ratio trended downward from 4.31 in 2020 to 2.41 in 2022, indicating a reduction in reliance on debt or other liabilities to finance assets. It stabilized somewhat in 2023 and 2024 around 2.45 to 2.5. The adjusted financial leverage mirrored this trend but consistently showed lower values, decreasing from 3.12 in 2020 to around 2.04 in 2022 and slightly increasing to 2.16 by 2024. This suggests a general deleveraging trend with some slight increase in leverage in the most recent year.

Return on Equity (ROE)

The reported ROE was significantly negative in 2020 (-79.85%), reflecting the large losses experienced that year, but reversed sharply to positive in 2021 and reached a high of 44.22% in 2022. Thereafter, it declined substantially in 2023 and 2024 to single digits. The adjusted ROE displayed a similar trajectory, though slightly less volatile, improving from -67.69% in 2020 to 32.78% in 2022, then decreasing steadily to 6.56% in 2024.

Return on Assets (ROA)

Reported ROA followed the trend of other profitability measures, with a negative figure of -18.52% in 2020 improving to 18.32% in 2022, then falling to 3.58% in 2024. Adjusted ROA values were consistently lower, starting at -21.68% in 2020, peaking at 16.07% in 2022, and declining thereafter to 3.04% in 2024. This pattern reflects a recovery in asset profitability post-2020 followed by a reduction in efficiency in recent years.

The financial data reveals significant fluctuations in both reported and adjusted net income attributable to the entity over the five-year period. Initially, in the year ending December 31, 2020, there was a substantial net loss with reported net income at negative 14,831 million US dollars and adjusted net income slightly lower at negative 17,348 million US dollars. This indicates considerable financial challenges during that year.

From 2021 onwards, a marked recovery is evident. Reported net income turned positive at 2,322 million US dollars in 2021 and further increased substantially to 13,304 million US dollars in 2022, before declining to 4,696 million in 2023 and continuing downwards to 3,056 million in 2024. Adjusted net income follows a consistent pattern albeit at slightly lower absolute values, reaching 2,368 million US dollars in 2021 and peaking at 11,660 million in 2022, then declining to 4,753 million in 2023 and 2,595 million in 2024.

Examining net profit margins, the reported net profit margin shows an initial deep negative margin of -83.28% in 2020, turning positive at 8.95% in 2021 and peaking at 36.32% in 2022. However, a decline is observable after 2022 with margins decreasing to 16.62% in 2023 and further to 11.43% in 2024. Adjusted net profit margins mirror this trend but start even lower at -97.41% in 2020 and reach a peak margin of 31.83% in 2022, before falling to 16.82% in 2023 and then to 9.71% in the latest year.

The data indicates a recovery phase post-2020 with strong profitability in 2022, followed by a tapering off of both income and profitability in subsequent years. The gap between reported and adjusted figures suggests ongoing adjustments impacting net income, though the overall directional trends remain consistent between the two measures. The decline in margins and earnings after the peak year could signal emerging challenges or changing market conditions affecting the company’s profitability.

The financial data reveals a fluctuating trend in the company's asset base and efficiency metrics over the five-year period.

Total Assets

The reported total assets decreased from $80,064 million in 2020 to $72,609 million in 2022, indicating a contraction in asset size during these initial years. Following this decline, there was a moderate recovery to $74,008 million in 2023 and a significant increase to $85,445 million in 2024. This pattern suggests a period of asset reduction possibly due to divestitures or depreciation, followed by asset growth potentially driven by acquisitions or capital investments. The adjusted total assets mirrored the reported figures closely, with negligible differences, confirming consistency in adjustment methodology.

Total Asset Turnover

The total asset turnover ratio exhibited variability that inversely corresponded to the trends in total assets. Starting at 0.22 in 2020, it improved sharply to 0.35 in 2021 and peaked at 0.5 in 2022, indicating increasing efficiency in generating revenue from the asset base while assets were declining. However, in 2023, the ratio decreased to 0.38 and further to 0.31 in 2024, reflecting a reduction in turnover efficiency as total assets expanded. This decline in asset turnover in the latter years could suggest that asset growth outpaced revenue generation or that newer assets were yet to contribute fully to output.

Consistency Between Reported and Adjusted Data

The reported and adjusted total assets, as well as total asset turnover ratios, are virtually identical across all periods, indicating minimal impact of tax-related adjustments on these particular metrics. This consistency enhances the reliability of the trends observed, focusing the analysis primarily on operational and investment activity rather than tax effects.

Overall, the data reflect a cycle of asset contraction followed by expansion, accompanied by a corresponding shift in asset utilization efficiency. This dynamic warrants further examination into the operational changes, investment strategies, and market conditions driving the asset base and turnover ratio fluctuations.

The analysis of the financial data over the five-year period reveals several significant trends related to the company’s assets, equity, and leverage ratios, both in reported and deferred income tax adjusted terms.

Total Assets

The reported total assets show a declining trend from 80,064 million US dollars at the end of 2020 to 72,609 million in 2022, followed by a moderate recovery reaching 85,445 million by the end of 2024. The adjusted total assets follow a very similar pattern, decreasing initially and then rising again, indicating consistency between reported and adjusted figures. This suggests a phase of asset reduction or divestiture during 2021-2022, with eventual expansion or asset accumulation in the subsequent years.

Stockholders’ Equity

Reported stockholders’ equity increases steadily over the period, growing from 18,573 million US dollars in 2020 to 34,159 million in 2024. The adjusted stockholders’ equity figures are consistently higher than the reported values and show the same upward trajectory, moving from 25,630 million in 2020 to 39,533 million in 2024. This continuous increase reflects improving net asset value, which may be influenced by retained earnings and deferred tax adjustments that enhance the perceived shareholder value.

Financial Leverage

The reported financial leverage ratio declines sharply from 4.31 in 2020 to 2.41 in 2022, indicating a substantial reduction in the company’s reliance on debt relative to equity during this period. It then slightly increases to 2.5 by 2024. The adjusted financial leverage ratios exhibit a similar downward trend but at generally lower levels, starting at 3.12 in 2020 and dipping to 2.04 in 2022 before a mild increase to 2.16 in 2024. The lowered leverage ratios, especially in adjusted terms, suggest a strengthening equity base and possibly more conservative capital structure management.

Overall, the company demonstrates a pattern of initial contraction in asset size followed by recovery and growth, alongside significant equity growth and a consistent decrease in leverage ratios. The adjusted data, accounting for deferred tax considerations, consistently show stronger equity positions and lower leverage, highlighting the impact of tax adjustments on financial stability metrics. These trends indicate improving financial health, greater shareholder value, and a reduced financial risk profile over the analyzed period.

The financial data indicates significant fluctuations in both reported and adjusted net income over the five-year period. The reported net income (loss) experienced a substantial negative result in 2020, with a loss of approximately $14.8 billion, followed by a strong recovery to positive figures in subsequent years, peaking at $13.3 billion in 2022. Thereafter, net income decreased to $4.7 billion in 2023 and further to $3.1 billion in 2024. The adjusted net income follows a similar pattern but with slightly lower absolute values, showing a loss of approximately $17.3 billion in 2020, peaking at $11.7 billion in 2022, then declining through 2023 and 2024 to about $2.6 billion.

Stockholders’ equity displays a consistent upward trend in both reported and adjusted values. Reported stockholders’ equity increased steadily from roughly $18.6 billion at the end of 2020 to $34.2 billion by the end of 2024. Adjusted stockholders’ equity also demonstrates growth, rising from about $25.6 billion in 2020 to nearly $39.5 billion in 2024. The difference between reported and adjusted equity values suggests adjustments related to deferred income taxes or other accounting treatments that increase the equity base when considered.

Return on equity (ROE) measurements reflect the trends in net income relative to equity. Reported ROE was significantly negative in 2020 at -79.85%, consistent with the large net loss; it reversed to positive figures in the following years, reaching a peak of 44.22% in 2022, before declining to 8.95% in 2024. Adjusted ROE mirrors this trajectory but at somewhat lower percentages, starting at -67.69% in 2020, peaking at 32.78% in 2022, and falling to 6.56% by 2024.

Overall, the data reveal a pronounced recovery from the severe loss in 2020, with net income and ROE peaking around 2022 followed by a downward trend. Stockholders’ equity shows consistent accumulation throughout the period. The adjusted figures generally show less volatility and more conservative performance metrics compared to reported figures, likely reflecting the impact of deferred income tax adjustments on profitability and equity measurements.

Net Income Trends

Sharp loss in 2020 followed by strong recovery through 2022, then declining profitability in 2023 and 2024.

Stockholders’ Equity Trends

Steady increase in both reported and adjusted values, indicating growth in the company’s equity base over time.

Return on Equity (ROE)

Highly negative in 2020 reflecting losses, with marked improvement to peak levels in 2022, then reducing significantly in the subsequent years.

Adjustment Impacts

Adjusted financial data show less extreme fluctuations and lower profitability ratios, highlighting the influence of deferred income taxes or other adjustments on reported results.

The financial data reveals several notable trends and fluctuations over the five-year period under review. The reported net income (loss) attributable to the company shows substantial volatility, with a significant loss recorded in 2020, followed by a recovery to positive net income in subsequent years. Specifically, the company experienced a large loss of approximately $14.8 billion in 2020, which reversed to a profit of $2.3 billion in 2021 and further increased substantially to $13.3 billion in 2022. However, this was followed by declines in 2023 and 2024, with net incomes of $4.7 billion and $3.1 billion respectively, indicating some challenges in maintaining peak profitability levels attained in 2022.

The adjusted net income attributable to the company follows a similar pattern to the reported figures but consistently shows slightly lower values each year. The adjusted losses in 2020 were deeper at around $17.3 billion, while profits in later years were also somewhat reduced compared to reported figures. This suggests that notable non-recurring or deferred tax items have influenced net income, impacting the adjusted results and providing insight into the underlying earnings quality.

Total assets reported show a general declining trend from 2020 through 2022, decreasing from approximately $80 billion to around $72.6 billion, followed by a modest recovery in 2023 and a more sharp increase in 2024 to over $85 billion. The adjusted total assets mirror this pattern almost identically, which confirms consistency in asset valuation adjustments.

Return on assets (ROA), both reported and adjusted, mirrors the earnings volatility. The company recorded a strongly negative ROA in 2020, at around -18.5% reported and -21.7% adjusted, consistent with the substantial losses incurred that year. ROA improved markedly in 2021 and showed strong performance in 2022, with reported ROA peaking at over 18% and adjusted ROA at 16%. This peak was followed by a reduction in ROA in subsequent years, aligning with declining profitability, tapering it back down to single-digit positive levels in 2023 and low positive levels near 3% in 2024.

Overall, the data indicates a period of significant financial distress in 2020, with steep losses and diminished asset returns, from which the company largely recovered in 2021 and 2022. However, the gains in earnings and asset efficiency were not sustained, as shown by declines in profitability and ROA in the later years. Asset values declined initially but saw a strong increase again by 2024. The adjustments made for deferred income taxes highlight the impact of tax-related accounting on reported profitability but do not materially alter the overall trend analysis.

Net Income Trends

Major loss in 2020, recovery in 2021 and peak profitability in 2022, followed by decline in 2023 and 2024.

Adjusted Net Income

Shows same pattern as reported net income but consistently lower, indicating impact of deferred tax and non-recurring items.

Total Assets

Decline from 2020 to 2022, modest recovery thereafter, significant increase by 2024.

Return on Assets (ROA)

Negative and low in 2020, sharp improvement 2021–2022, then decreasing trend through 2024.

Overall Insight

Company experienced marked financial difficulties in 2020 but improved in 2021 and 2022. Following years show challenges in sustaining high profitability, with asset base strengthening only near the end of the period. Tax adjustments impact earnings but confirm overall financial trends.