01—Abstract
Summary
Summary of the 10-K filed February 22, 2018. Cited figures are marked; the original filing is the authoritative source.
Chevron Corporation's 2017 10-K report details a year of significant recovery and strategic repositioning, driven by higher commodity prices and improved operational efficiency.
The company returned to profitability after a challenging 2016, with net income attributable to Chevron Corporation reaching $9.2 billiona, a substantial turnaround from a net loss of $0.5 billion in the prior year. This recovery was bolstered by increased upstream earnings, significantly influenced by higher crude oil and natural gas realizations, and a strong performance in the downstream segment, aided by favorable refining margins and the benefits of U.S. tax reform. Operationally, Chevron focused on optimizing its asset portfolio, with upstream production increasing and major projects like Gorgon and Wheatstone LNG in Australia achieving significant milestones with the start-up of new trains.
The company also maintained its commitment to shareholder returns, increasing its annual dividend for the 30th consecutive year. Looking ahead, Chevron signaled continued disciplined capital investment, with a planned expenditure of $18.3 billionb for 2018, emphasizing growth in advantaged assets like the Permian Basin.
02—Key points
Key Highlights
- Chevron reported a net income of $9.2 billion in 2017, a significant improvement from a net loss of $0.5 billion in 2016, driven by higher oil and gas prices and improved operational performance.
- Upstream segment earnings were $8.15 billion, a strong recovery from a $2.5 billion loss in 2016, primarily due to higher crude oil and natural gas realizations.
- Downstream segment earnings reached $5.2 billion, up from $3.4 billion in 2016, benefiting from higher refining margins and a $1.16 billion positive impact from U.S. tax reform.
- Worldwide oil-equivalent production averaged 2.73 million barrels per day in 2017, an increase of 5% from 2016, supported by major capital projects coming online.
- The company's capital and exploratory expenditures were $18.8 billion in 2017, a decrease from $22.4 billion in 2016, reflecting a focus on capital discipline and asset optimization.
- Chevron increased its annual dividend for the 30th consecutive year, demonstrating a commitment to shareholder returns.
- The company announced a planned capital and exploratory expenditure of $18.3 billion for 2018, with a significant portion allocated to the Permian Basin.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2017filed February 22, 2018Financial Statements
FY2017 against FY2016
| Line item | FY2017FY2016 | Change |
|---|---|---|
| Revenue | $134.67B$110.22B | +22.2% |
| Cost of Revenue | $75.77B$59.32B | +27.7% |
| Gross Profit | $58.91B$50.89B | +15.7% |
| R&D Expenses | $433.00M$476.00M | −9.0% |
| SG&A Expenses | $4.11B$4.30B | −4.5% |
| Operating Expenses | $132.50B$116.63B | +13.6% |
| Interest Expense | $307.00M$201.00M | +52.7% |
| Net Income | $9.20B-$497.00M | +1950.1% |
| EPS (Basic) | $4.88$-0.27 | +1907.4% |
| EPS (Diluted) | $4.85$-0.27 | +1896.3% |
| Shares Outstanding (Basic) | 1.88B1.87B | +0.5% |
| Shares Outstanding (Diluted) | 1.90B1.87B | +1.3% |
05—Questions
Frequently Asked Questions
What was Chevron's financial performance in 2017 compared to 2016?
Chevron experienced a significant turnaround in 2017, reporting a net income of $9.2 billion, a substantial improvement from a net loss of $0.5 billion in 2016. This recovery was driven by higher crude oil and natural gas prices, improved downstream margins, and the benefits from U.S. tax reform.
What were the key operational achievements or developments for Chevron in 2017?
Operationally, Chevron saw increased oil-equivalent production and made progress on major projects. Notably, Australia's Gorgon and Wheatstone LNG projects achieved start-up of new trains. In the U.S. Gulf of Mexico, significant crude oil discoveries were announced at the Whale and Ballymore prospects. The company also continued its strategic asset review, completing sales of refining and marketing assets in Canada.
How did Chevron's upstream and downstream segments perform?
The upstream segment saw a strong recovery, with earnings of $8.15 billion compared to a loss of $2.5 billion in 2016, largely due to higher commodity prices. The downstream segment also performed well, with earnings of $5.2 billion compared to $3.4 billion in 2016, benefiting from higher refining margins and tax reform impacts.
What is Chevron's outlook for capital expenditures in 2018?
Chevron plans to invest approximately $18.3 billion in capital and exploratory expenditures for 2018. This budget reflects a continued focus on capital discipline, with a significant portion directed towards advantaged assets, including the Permian Basin, and major capital projects underway.
06—Continue