10-QPeriod: Q3 FY2010

CHEVRON CORP Quarterly Report for Q3 Ended Sep 30, 2010

Filed November 5, 2010For Securities:CVX

Summary

Chevron Corporation reported robust financial performance for the nine months ended September 30, 2010, with net income attributable to Chevron Corporation significantly increasing to $13.73 billion, a substantial rise from $7.41 billion in the same period of 2009. This growth was driven by higher crude oil and natural gas prices, as well as increased production volumes, particularly in the upstream segment. The company also saw improved performance in its downstream operations, benefiting from better refining margins and chemical operations. Liquidity remained strong, with cash and cash equivalents, time deposits, and marketable securities totaling $14.5 billion at the end of the third quarter, an increase from the previous year-end. The company maintained a healthy current ratio of 1.7 and a low debt-to-equity ratio of 9.4%. Despite ongoing legal proceedings, notably the substantial environmental lawsuit in Ecuador, Chevron's core operations demonstrated resilience and profitability, positioning the company favorably in the energy market during this period.

Financial Highlights

45 data points
Beta

Revenue

$49.72B

Net Income

$3.77B

7.6% Net Margin

EPS (Diluted)

$1.87

Total Assets

$177.20B

Cash & Equivalents

$10.99B

Free Cash Flow

$7.98B

Financial Statements
Beta
Revenue$49.72B
SG&A Expenses$1.18B
Operating Expenses$42.84B
Interest Expense$9.00M
Net Income$3.77B
EPS (Basic)$1.89
EPS (Diluted)$1.87
Shares Outstanding (Basic)2.00B
Shares Outstanding (Diluted)2.01B

Key Highlights

  • 1Net income attributable to Chevron Corporation for the nine months ended September 30, 2010, surged to $13.73 billion, nearly double the $7.41 billion reported in the same period of 2009.
  • 2Total revenues and other income for the nine months increased to $150.9 billion, up from $123.0 billion in the prior year.
  • 3Upstream segment earnings were strong, reaching $12.83 billion for the first nine months of 2010, a significant increase from $6.77 billion in the prior year, driven by higher commodity prices and production.
  • 4Downstream segment earnings also improved, with $1.74 billion for the nine months of 2010 compared to $1.15 billion in 2009, attributed to better refining margins and chemical operations.
  • 5Cash provided by operating activities for the first nine months of 2010 was $23.1 billion, a substantial increase from $12.4 billion in 2009, indicating strong cash generation.
  • 6Chevron's liquidity position strengthened, with cash, cash equivalents, time deposits, and marketable securities totaling $14.5 billion at September 30, 2010, up from $8.7 billion at December 31, 2009.
  • 7The company declared a quarterly dividend of $0.72 per common share, an increase from $0.68 per share in the prior year's comparable quarter.

Frequently Asked Questions

The substantial increase in earnings was primarily driven by higher crude oil and natural gas prices, coupled with an increase in net oil-equivalent production, particularly in the upstream segment. Improved refining margins and stronger performance from chemical operations also contributed to the overall earnings growth.

Chevron's liquidity has strengthened, as evidenced by the significant increase in cash, cash equivalents, time deposits, and marketable securities to $14.5 billion at September 30, 2010, up from $8.7 billion at the end of 2009. This increase was supported by strong cash flow from operating activities, which nearly doubled year-over-year.

Chevron continues to vigorously defend itself in the Ecuador lawsuit, believing it lacks legal or factual merit and is barred by prior releases and statutes of limitations. While the company cannot predict the timing or outcome, it asserts that it has no substantial assets in Ecuador and would contest any enforcement actions in other jurisdictions. Management believes it is not possible to estimate a reasonably possible loss at this time due to the case's highly uncertain legal environment.

For the first nine months of 2010, Chevron's capital and exploratory expenditures were $15.5 billion. The company generated sufficient cash flow from operations to fund these expenditures and also paid $4.2 billion in dividends to common shareholders. Chevron also has an ongoing share repurchase program, with expected repurchases between $500 million and $1 billion per quarter, demonstrating a commitment to returning value to shareholders.