Summary
ChevronTexaco Corporation reported a substantial increase in net income for the six months ended June 30, 2003, reaching $3.52 billion ($3.31 diluted EPS), a significant improvement from $1.13 billion ($1.07 diluted EPS) in the same period of 2002. This surge was driven by a robust performance in the Exploration and Production segment, benefiting from higher crude oil and natural gas prices, and a strong recovery in the Refining, Marketing, and Transportation segment due to improved product margins. The company also saw increased income from equity affiliates, largely due to better results from its Dynegy investment and Tengizchevroil. Despite the overall positive financial results, the company reported a net charge of $196 million for the cumulative effect of changes in accounting principles, primarily related to the adoption of FAS 143 for asset retirement obligations. Additionally, the company continued to manage significant ongoing operational developments, including progress on major projects in the Gulf of Mexico, Australia, Nigeria, Angola, and Kazakhstan, and announced restructuring plans for its global refining and marketing organization. The company's liquidity remains strong, with a significant increase in cash provided by operating activities, enabling debt reduction and continued dividend payments.
Key Highlights
- 1Net income more than tripled year-over-year for the six months ended June 30, 2003, reaching $3.52 billion compared to $1.13 billion in 2002, driven by higher commodity prices and improved refining margins.
- 2Earnings per diluted share increased to $3.31 for the six months ended June 30, 2003, from $1.07 in the prior year period.
- 3Exploration and Production segment income significantly benefited from higher crude oil and natural gas prices, although production volumes saw a slight decrease.
- 4Refining, Marketing, and Transportation segment income recovered strongly, shifting from a loss in the first half of 2002 to a profit in the first half of 2003, primarily due to improved refined product margins.
- 5The company adopted new accounting standard FAS 143 ('Accounting for Asset Retirement Obligations'), resulting in a cumulative effect net charge of $196 million in the first half of 2003.
- 6ChevronTexaco completed an exchange of its Dynegy Series B Preferred Stock for cash, notes, and convertible preferred stock, marking a step in managing its investment in the energy merchant.
- 7Capital expenditures decreased to $3.45 billion for the first half of 2003 from $4.32 billion in the same period of 2002, with a continued emphasis on international E&P projects.