10-K/APeriod: FY2007

CHEVRON CORP Annual Report (Amendment), Year Ended Dec 31, 2007

Filed March 27, 2008For Securities:CVX

Summary

Chevron Corporation's 2007 10-K filing highlights a robust operational year for the integrated energy giant. The company demonstrated strong financial performance, with net income reaching $18.7 billion, reflecting favorable industry conditions, particularly in upstream operations where higher crude oil and natural gas prices significantly boosted earnings. Significant capital expenditures, totaling $20 billion, were directed towards growing the upstream business, with a strong international focus, and maintaining downstream infrastructure. The company continued its strategic investments in people and technology to drive performance and growth across its diverse portfolio, which spans exploration and production, refining, marketing, transportation, and chemicals. Chevron's operational footprint is global, with substantial activities in North America, Africa, Asia-Pacific, and other international regions. The report details numerous exploration and development projects, including significant deepwater activities in the Gulf of Mexico and major projects in Angola and Australia. While the company's integrated business model proved resilient, it also highlighted exposure to commodity price volatility and potential disruptions from geopolitical events and natural disasters. Management emphasized a strategy focused on profitable growth, operational excellence, and shareholder returns, including an increased common stock dividend and a substantial share repurchase program.

Financial Highlights

22 data points
Beta

Revenue

$220.90B

Net Income

$18.69B

8.5% Net Margin

EPS (Diluted)

$8.77

Cash & Equivalents

$7.36B

Free Cash Flow

$24.98B

Financial Statements
Beta
Revenue$220.90B
SG&A Expenses$5.93B
Operating Expenses$188.63B
Interest Expense$166.00M
Net Income$18.69B
EPS (Basic)$8.83
EPS (Diluted)$8.77

Key Highlights

  • 1Chevron reported a net income of $18.7 billion for 2007, a significant increase driven by strong upstream performance.
  • 2Total capital and exploratory expenditures reached $20 billion, with 78% ($15.5 billion) allocated to upstream activities, primarily international.
  • 3Worldwide oil-equivalent production averaged 2.62 million barrels per day, with a slight decline attributed to changes in Venezuelan operations.
  • 4The company's downstream segment saw mixed results, impacted by refinery downtime despite generally favorable refined product margins.
  • 5Chevron continued to invest in renewable energy technologies as part of its long-term strategic direction.
  • 6The company's financial health was underscored by a strong interest coverage ratio and a decreasing debt-to-equity ratio.
  • 7Chevron announced a $15 billion stock repurchase program, demonstrating a commitment to returning value to shareholders.

Frequently Asked Questions

Chevron's primary source of income in 2007 was its upstream (exploration and production) segment, which generated $14.8 billion in income. The downstream segment contributed $3.5 billion, while the chemicals segment reported $396 million in income. "All Other" segments collectively incurred net charges of $26 million.

Chevron's total capital and exploratory expenditures for 2007 were $20 billion. Of this amount, $15.5 billion was allocated to upstream activities, with approximately 70% of that directed towards international upstream operations. The downstream segment received $3.4 billion, chemicals $271 million, and "All Other" received $774 million.

Chevron's primary objective is to create value and achieve sustained financial returns. Its strategies include growing profitably in core upstream areas, building new legacy positions, commercializing its natural gas equity resource base, and growing a high-impact global gas business. In the downstream segment, the focus is on improving base-business returns and selective growth with an emphasis on integrated value creation. The company also continues to invest in renewable energy technologies.

Chevron faces several key risks, including exposure to fluctuating commodity prices (especially crude oil), the need to successfully develop resources to replace depleted reserves, operational disruptions from natural or human factors (like weather, civil unrest, or accidents), potential liabilities from its operations, and political instability in countries where it operates which could impact its business through government actions such as increased ownership, taxes, or royalties.