10-QPeriod: Q3 FY2013

CHEVRON CORP Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 8, 2013For Securities:CVX

Summary

Chevron Corporation (CVX) reported its financial results for the third quarter and first nine months of 2013. For the third quarter, the company posted net income attributable to Chevron Corporation of $4.95 billion, or $2.57 per diluted share, a slight decrease from $5.25 billion, or $2.69 per diluted share, in the same period of 2012. For the nine-month period, net income was $16.49 billion, or $8.52 per diluted share, down from $18.93 billion, or $9.62 per diluted share, in the first nine months of 2012. The decrease in earnings year-over-year was primarily driven by lower contributions from the Downstream segment, impacted by reduced refining margins and higher operating expenses. The Upstream segment showed mixed results, with higher crude oil realizations and volumes offset by the absence of a significant gain from an equity sale in the prior year and increased operating expenses. Capital expenditures saw a notable increase due to investments in major projects, particularly LNG projects in Australia and deepwater Gulf of Mexico developments.

Financial Highlights

44 data points
Beta

Revenue

$58.50B

Net Income

$4.95B

8.5% Net Margin

EPS (Diluted)

$2.57

Total Assets

$247.84B

Cash & Equivalents

$17.01B

Free Cash Flow

$10.32B

Financial Statements
Beta
Revenue$58.50B
SG&A Expenses$1.20B
Operating Expenses$49.67B
Net Income$4.95B
EPS (Basic)$2.58
EPS (Diluted)$2.57
Shares Outstanding (Basic)1.91B
Shares Outstanding (Diluted)1.93B

Key Highlights

  • 1Net income for Q3 2013 was $4.95 billion, down from $5.25 billion in Q3 2012.
  • 2Diluted EPS for Q3 2013 was $2.57, down from $2.69 in Q3 2012.
  • 3Nine-month net income for 2013 was $16.49 billion, a decrease from $18.93 billion in the same period of 2012.
  • 4Downstream segment earnings significantly decreased due to lower refining margins and higher operating expenses.
  • 5Upstream segment earnings remained relatively stable, impacted by a prior-year gain on asset sale and higher operating expenses, partially offset by improved crude oil realizations and volumes.
  • 6Capital expenditures increased significantly to $28.9 billion for the nine-month period, driven by investments in major projects, notably Australian LNG and deepwater Gulf of Mexico developments.
  • 7The company returned $5.6 billion to shareholders through dividends in the first nine months of 2013.

Frequently Asked Questions

The primary driver for the decrease in net income for the first nine months of 2013 was a significant decline in earnings from the Downstream segment, largely due to lower margins on refined product sales and increased operating expenses at refineries. The absence of a substantial gain from an equity sale in the prior year also contributed to the year-over-year decrease.

The Upstream segment's earnings were relatively stable in the third quarter, but showed a decrease for the nine-month period. Higher crude oil realizations and increased production volumes were somewhat offset by the absence of a large gain on an equity sale recorded in the prior year, as well as higher operating and depreciation expenses. International upstream operations experienced a lower effective tax rate due to a shift in earnings to lower tax jurisdictions.

Chevron significantly increased its capital and exploratory expenditures to $28.9 billion for the first nine months of 2013, up from $22.7 billion in the prior year. The majority of this spending (92%) was directed towards upstream projects. Key areas of investment include major LNG projects in Australia, deepwater projects in the Gulf of Mexico, and acquisitions of new resource opportunities in Australia, the Permian Basin, and Iraq.

Chevron is involved in significant litigation, most notably the ongoing case in Ecuador related to alleged environmental damages. The company believes this lawsuit lacks merit and is vigorously defending itself. Additionally, the company faces other environmental and regulatory matters, including those related to MTBE and past incidents at its refineries, the ultimate outcomes of which are uncertain and could potentially be material. The company's disclosures in Note 10 and Note 11 detail these matters.