01—Abstract
Summary
Summary of the 10-K filed February 24, 2022. Cited figures are marked; the original filing is the authoritative source.
Chevron Corporation's 2021 10-K filing indicates a significant turnaround from a net loss in 2020 to a substantial net income of $15.6 billiona in 2021.
This recovery was primarily driven by a sharp increase in crude oil and natural gas prices, which significantly boosted earnings in the Upstream segment, particularly in the U.S. The Downstream segment also showed improved performance, benefiting from higher refined product margins and the performance of its chemical joint ventures. The company demonstrated a strong commitment to shareholder returns, increasing its annual dividend for the 34th consecutive year and continuing its share repurchase program. Chevron is also strategically investing in lower-carbon businesses, allocating approximately $8 billionb through 2028 for initiatives in renewable fuels, hydrogen, and carbon capture, while also planning to spend $2 billion to reduce the carbon intensity of its traditional operations.
Despite the strong financial rebound, the report highlights ongoing risks, including commodity price volatility, the impact of evolving climate change regulations, and operational risks. The company is navigating these challenges by focusing on efficiency, leveraging its integrated business model, and advancing its lower-carbon strategy.
02—Key points
Key Highlights
- Chevron reported a net income of $15.6 billion in 2021, a significant improvement from a net loss of $5.5 billion in 2020, driven by higher commodity prices and improved downstream margins.
- Upstream segment earnings surged to $15.8 billion in 2021, a substantial recovery from a $2.4 billion loss in 2020, primarily due to higher realizations for crude oil and natural gas.
- Downstream segment earnings increased to $2.9 billion in 2021 from $0.05 billion in 2020, aided by better refining margins and strong performance from chemical joint ventures.
- The company announced a planned lower-carbon capital spend of approximately $10 billion through 2028, with $8 billion allocated to growing renewable fuels, hydrogen, and carbon capture businesses, and $2 billion for reducing carbon intensity in traditional operations.
- Chevron increased its quarterly dividend by approximately six percent in January 2022, marking its 34th consecutive annual dividend increase.
- Worldwide net oil-equivalent production reached a record 3.099 million barrels per day in 2021, with a reserve replacement ratio of 112%.
- The company completed the acquisition of Noble Energy, Inc. in October 2020, which is noted as contributing to increased production and reserves in 2021.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2021filed February 24, 2022Financial Statements
FY2021 against FY2020
| Line item | FY2021FY2020 | Change |
|---|---|---|
| Revenue | $155.61B$94.47B | +64.7% |
| Cost of Revenue | $92.25B$52.15B | +76.9% |
| Gross Profit | $63.36B$42.32B | +49.7% |
| R&D Expenses | $268.00M$435.00M | −38.4% |
| SG&A Expenses | $4.01B$4.21B | −4.7% |
| Operating Expenses | $140.83B$102.14B | +37.9% |
| Interest Expense | $712.00M$697.00M | +2.2% |
| Net Income | $15.60B-$5.54B | +381.4% |
| EPS (Basic) | $8.15$-2.96 | +375.3% |
| EPS (Diluted) | $8.14$-2.96 | +375.0% |
| Shares Outstanding (Basic) | 1.92B1.87B | +2.5% |
| Shares Outstanding (Diluted) | 1.92B1.87B | +2.7% |
05—Questions
Frequently Asked Questions
What was Chevron's financial performance in 2021 compared to 2020?
Chevron experienced a significant financial turnaround in 2021. Net income was $15.6 billion, a substantial increase from a net loss of $5.5 billion in 2020. This improvement was driven by higher crude oil and natural gas prices, which boosted Upstream segment earnings, and better margins in the Downstream segment.
What are Chevron's key strategic priorities for lower-carbon energy?
Chevron is focused on delivering lower carbon energy and aims to grow its traditional oil and gas business while simultaneously reducing the carbon intensity of its operations. It plans to invest approximately $8 billion through 2028 in lower carbon businesses, including renewable fuels, hydrogen, and carbon capture, and an additional $2 billion to lower the carbon intensity of its traditional oil and gas operations.
How did commodity prices impact Chevron's 2021 results?
Higher commodity prices were the primary driver of Chevron's improved financial performance in 2021. The average Brent crude oil price increased to $71 per barrel in 2021 from $42 in 2020, and U.S. Henry Hub natural gas prices more than doubled. These higher prices significantly increased realizations in the Upstream segment.
What is Chevron's approach to shareholder returns?
Chevron continues to prioritize shareholder returns. In January 2022, the Board of Directors increased the quarterly dividend by approximately six percent, marking the 34th consecutive annual increase. The company also resumed its stock repurchase program in Q3 2021, repurchasing $1.4 billion of its common stock during the year.
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