01—Abstract
Summary
Summary of the 10-K filed February 22, 2019. Cited figures are marked; the original filing is the authoritative source.
Chevron Corporation's 2018 10-K filing reveals a strong financial performance, driven by higher crude oil and natural gas prices which significantly boosted upstream earnings.
Total revenues increased substantially, reflecting improved commodity pricing and increased production volumes. The company managed its operations effectively across its global portfolio, demonstrating resilience in a volatile energy market.
Key strategic initiatives continue to focus on capital discipline and shareholder returns, including dividends and share repurchases. The company is well-positioned with a robust reserve base and ongoing development projects, aiming to deliver superior shareholder value while navigating the evolving energy landscape.
02—Key points
Key Highlights
- Chevron reported a net income of $14.82 billion in 2018, a significant increase from $9.20 billion in 2017, primarily due to higher crude oil and natural gas realizations.
- Worldwide oil-equivalent production increased by 7% to 2.93 million barrels per day in 2018.
- Upstream earnings were particularly strong, reaching $13.32 billion, driven by robust performance in both U.S. and international operations.
- Downstream earnings contributed $3.80 billion, though slightly lower than the previous year, still reflecting solid operational performance.
- Capital and exploratory expenditures totaled $20.1 billion, with a significant portion allocated to upstream activities and major projects like the Tengizchevroil Future Growth Project in Kazakhstan.
- The company maintained a strong balance sheet with total debt decreasing to $34.5 billion and an interest coverage ratio of 23.4.
- Chevron continued its commitment to shareholder returns by increasing its annual dividend for the 31st consecutive year and repurchasing $1.75 billion of its common stock in 2018.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2018filed February 22, 2019Financial Statements
FY2018 against FY2017
| Line item | FY2018FY2017 | Change |
|---|---|---|
| Revenue | $158.90B$134.67B | +18.0% |
| Cost of Revenue | $94.58B$75.77B | +24.8% |
| Gross Profit | $64.32B$58.91B | +9.2% |
| R&D Expenses | $453.00M$433.00M | +4.6% |
| SG&A Expenses | $3.84B$4.11B | −6.6% |
| Operating Expenses | $145.76B$132.50B | +10.0% |
| Interest Expense | $748.00M$307.00M | +143.6% |
| Net Income | $14.82B$9.20B | +61.2% |
| EPS (Basic) | $7.81$4.88 | +60.0% |
| EPS (Diluted) | $7.74$4.85 | +59.6% |
| Shares Outstanding (Basic) | 1.90B1.88B | +0.8% |
| Shares Outstanding (Diluted) | 1.91B1.90B | +0.8% |
05—Questions
Frequently Asked Questions
What were the main drivers of Chevron's financial performance in 2018?
The primary drivers were higher crude oil and natural gas prices, which significantly boosted upstream earnings. Increased production volumes also contributed to the improved financial results.
How did Chevron's production volumes change in 2018?
Chevron's worldwide oil-equivalent production increased by 7% to an average of 2.93 million barrels per day in 2018, driven by contributions from major capital projects, shale and tight properties, and base business operations.
What is Chevron's outlook for production in 2019?
Chevron estimated its average worldwide oil-equivalent production in 2019 would grow by 4% to 7% compared to 2018, assuming a Brent crude oil price of $60 per barrel and excluding anticipated asset sales.
How did the company manage its capital expenditures?
Chevron invested $20.1 billion in capital and exploratory expenditures in 2018, with approximately 88% allocated to upstream activities. The company highlighted its Permian Basin position and the Tengizchevroil project in Kazakhstan as key investment areas.
06—Continue