10-KPeriod: FY2008

CHEVRON CORP Annual Report, Year Ended Dec 31, 2008

Filed February 26, 2009For Securities:CVX

Summary

Chevron Corporation's 2008 10-K filing reveals a robust year driven by strong upstream performance, despite some operational headwinds. The company saw increased net income, largely propelled by higher crude oil and natural gas prices, which significantly boosted its exploration and production segment. While the downstream segment experienced margin pressures in the first half of the year due to rising crude oil costs, it saw improvement in the latter half as oil prices declined. The company continued its strategic investments in major projects globally, with a significant portion of capital expenditures directed towards upstream activities, particularly in international markets, reflecting a commitment to long-term growth and resource development. Chevron also highlighted its ongoing efforts in operational excellence and technological advancement, while navigating a complex global economic environment and increasing environmental regulations.

Financial Highlights

44 data points
Beta

Revenue

$273.00B

Net Income

$23.93B

8.8% Net Margin

EPS (Diluted)

$11.67

Total Assets

$161.16B

Cash & Equivalents

$9.35B

Free Cash Flow

$29.63B

Financial Statements
Beta
Revenue$273.00B
R&D Expenses$702.00M
SG&A Expenses$5.76B
Operating Expenses$229.95B
Interest Expense$0
Net Income$23.93B
EPS (Basic)$11.74
EPS (Diluted)$11.67
Shares Outstanding (Basic)2.04B
Shares Outstanding (Diluted)2.05B

Key Highlights

  • 1Chevron's net income increased significantly in 2008, reaching $23.9 billion, up from $18.7 billion in 2007, driven by higher commodity prices.
  • 2Upstream segment income surged to $21.7 billion, primarily due to strong performance in both U.S. and international exploration and production activities.
  • 3Capital and exploratory expenditures totaled $22.8 billion, with approximately three-fourths allocated to upstream activities, emphasizing international exploration and production.
  • 4The company continued its stock repurchase program, acquiring $8.0 billion of common shares in 2008 as part of a $15 billion authorization.
  • 5Chevron increased its quarterly common stock dividend by 12.1% in April 2008, marking its 21st consecutive annual dividend increase.
  • 6The company's proved oil-equivalent reserves for consolidated operations stood at 7.9 billion barrels at the end of 2008.

Frequently Asked Questions

The primary driver of Chevron's strong financial performance in 2008 was the significant increase in crude oil and natural gas prices, which substantially boosted the company's upstream segment earnings. This was further supported by asset sales and improved equity affiliate income.

Chevron continued to prioritize capital allocation towards upstream activities, dedicating approximately three-fourths of its $22.8 billion in capital and exploratory expenditures to exploration and production. A significant portion of this international upstream investment reflects the company's strategy to build new legacy positions and capitalize on global resource opportunities.

Chevron demonstrated a strong commitment to returning capital to shareholders in 2008 by increasing its quarterly common stock dividend by 12.1% and continuing its share repurchase program, acquiring $8.0 billion of common stock. This reflects the company's confidence in its ongoing financial strength and its strategy to enhance shareholder value.

Chevron faced operational challenges including damage to facilities from hurricanes Gustav and Ike in the U.S. Gulf of Mexico, which impacted production levels. Additionally, higher prices on certain production-sharing and variable-royalty agreements outside the U.S. also affected production volumes. The company also noted increased costs for employee and contract labor, materials, and services, although cost pressures began to soften in late 2008.