10-KPeriod: FY2011

CHEVRON CORP Annual Report, Year Ended Dec 31, 2011

Filed February 23, 2012For Securities:CVX

Summary

Chevron Corporation's 2011 10-K filing highlights a robust year for the energy giant, marked by significant capital expenditures, particularly in upstream exploration and production activities. The company demonstrated strong financial performance, driven by higher crude oil and natural gas prices, leading to substantial increases in net income and earnings per share compared to the previous year. Strategic investments in major projects across the globe, including deepwater developments in the U.S. Gulf of Mexico, oil sands in Canada, and LNG facilities in Australia, underscore Chevron's commitment to long-term growth and resource development. Operationally, Chevron managed a complex global portfolio, with production influenced by field declines, maintenance, and new project ramp-ups. The company's downstream segment showed improved margins, reflecting a favorable market environment for refined products. Despite exposure to commodity price volatility and geopolitical risks, Chevron maintained a strong balance sheet and continued to return value to shareholders through increased dividends and share repurchases, signaling confidence in its ongoing operations and future prospects.

Financial Highlights

46 data points
Beta

Revenue

$253.71B

Net Income

$26.89B

10.6% Net Margin

EPS (Diluted)

$13.44

Total Assets

$209.47B

Cash & Equivalents

$15.86B

Free Cash Flow

$41.09B

Financial Statements
Beta
Revenue$253.71B
R&D Expenses$627.00M
SG&A Expenses$4.75B
Operating Expenses$206.07B
Interest Expense$0
Net Income$26.89B
EPS (Basic)$13.54
EPS (Diluted)$13.44
Shares Outstanding (Basic)1.99B
Shares Outstanding (Diluted)2.00B

Key Highlights

  • 1Chevron reported robust financial results in 2011, with net income attributable to Chevron Corporation increasing significantly due to higher crude oil and natural gas prices.
  • 2Capital and exploratory expenditures totaled $29.1 billion, with 89% directed towards upstream activities, emphasizing the company's focus on exploration and production.
  • 3Worldwide oil-equivalent production averaged 2.673 million barrels per day, with key project startups and acquisitions partially offsetting normal field declines.
  • 4The company continued to strategically divest non-core downstream assets, focusing capital on core operations and strategic growth areas.
  • 5Chevron's upstream segment earnings significantly increased, driven by higher commodity prices, particularly for crude oil.
  • 6Downstream operations benefited from improved margins on refined products and chemicals, with ongoing restructuring efforts to enhance efficiency.
  • 7The company maintained a strong financial position, with substantial cash reserves and a significant share repurchase program in place.

Frequently Asked Questions

Chevron's primary strategic objective was to create shareholder value. Key priorities included growing profitably in core upstream areas, building new legacy positions, commercializing its natural gas resources, and growing its global natural gas business. In the downstream segment, the focus was on improving returns and growing earnings across the value chain, while also leveraging technology and investing in renewable energy and energy efficiency solutions.

Higher prices for crude oil and natural gas were a significant driver of Chevron's financial performance in 2011. Increased crude oil realizations directly boosted upstream earnings, while also influencing downstream profitability through refined product margins. The company's upstream earnings were closely aligned with industry price levels for crude oil and natural gas, which are subject to various global economic, supply, and geopolitical factors.

Chevron's capital expenditures were heavily weighted towards upstream activities. Major projects included developments in the U.S. Gulf of Mexico (e.g., Jack and St. Malo, Big Foot, Tahiti 2), oil sands projects in Canada (Athabasca Oil Sands Project), natural gas projects in Thailand (Platong II), and LNG facilities in Australia (Gorgon and Wheatstone Projects). The company also made significant investments in shale resources in the United States, such as the Marcellus and Utica Shales following the acquisition of Atlas Energy.

Chevron continued to focus on concentrating downstream resources and capital on strategic assets. This involved divesting non-core assets, such as the Pembroke Refinery in the UK and marketing businesses in various countries. The company also reported improved margins in refining and chemicals operations, partly due to higher global product demand and tighter refined product supplies. Its chemicals business, primarily through its affiliate Chevron Phillips Chemical Company LLC (CPChem), was also a contributor to earnings.