Fourth quarter earnings include gains on asset
sales of $570 million net of impairments and other charges
Chevron Corporation (NYSE:CVX) today reported earnings of $3.5
billion ($1.85 per share – diluted) for fourth quarter 2014,
compared with $4.9 billion ($2.57 per share – diluted) in the 2013
fourth quarter. Foreign currency effects increased earnings in the
2014 quarter by $432 million, compared with an increase of $202
million a year earlier.
Full-year 2014 earnings were $19.2 billion ($10.14 per share –
diluted) compared with $21.4 billion ($11.09 per share – diluted)
in 2013.
Sales and other operating revenues in fourth quarter 2014 were
$42 billion, compared to $54 billion in the year-ago period.
Earnings Summary
Fourth Quarter Year Millions of
dollars
2014 2013 2014
2013 Earnings by Business Segment
Upstream $2,673 $4,852 $16,893 $20,809 Downstream 1,518 390
4,336 2,237 All Other (720 ) (312 ) (1,988 )
(1,623 )
Total (1)(2) $3,471
$4,930 $19,241
$21,423 (1) Includes foreign currency effects
$432 $202 $487 $474 (2) Net income attributable to Chevron
Corporation (See Attachment 1)
“Our 2014 earnings were down from the previous year, largely due
to the sharp decline in crude oil prices,” said Chairman and CEO
John Watson. “Improved downstream results and higher gains on asset
sales related to our divestment program partially offset the effect
of lower crude prices.”
“In 2014, we continued to fund investments in key major capital
projects under construction and raised the dividend payout on our
common shares for the 27th consecutive year,” Watson added. “We
enter 2015 with the financial strength to meet the challenges of a
volatile crude price environment and with significant efforts
underway to manage to a lower cost structure and capital spend
rate.”
“We had a number of operational successes in 2014,” Watson
continued. “We had first production from the Jack/St. Malo and
Tubular Bells deepwater developments in the Gulf of Mexico and the
Bibiyana gas expansion project in Bangladesh. In Australia, our
Gorgon and Wheatstone LNG projects continue to reach important
construction milestones. We also continue to make progress on our
shale and tight resource developments in the Permian Basin,
Argentina and Canada. At the same time, we had one of our best
exploration years, with important discoveries in the deepwater Gulf
of Mexico, Australia, West Africa and the Permian Basin, which add
to our development queue for the future.”
Watson commented that the company added approximately 840
million barrels of net oil-equivalent proved reserves in 2014.
These additions, which are subject to final reviews, equate to
approximately 89 percent of net oil-equivalent production for the
year. The largest additions were for the Permian Basin in the
United States and the Gorgon Project in Australia. The company will
provide additional details relating to 2014 reserve additions in
its Annual Report on Form 10-K scheduled for filing with the SEC on
February 20, 2015.
“In the downstream, we completed important reliability
investments at our U.S. refineries, which contributed to improved
financial and operational performance,” Watson added. “We also made
significant progress on important growth investments.” In 2014, the
company started commercial production at its new premium lubricants
base oil facility in Pascagoula, Mississippi, and completed the
expansion of its additives plants in Singapore and Gonfreville,
France. Chevron Phillips Chemical Company LLC, the company’s 50
percent-owned affiliate, achieved start-up of the world’s largest
on-purpose 1-hexene plant and progressed construction of its new
ethane cracker and polyethylene units in Texas.
The company purchased $1.25 billion of its common stock in
fourth quarter 2014 under its share repurchase program. Repurchases
for the full year totaled $5 billion. At year-end, balances of
cash, cash equivalents, time deposits and marketable securities
totaled $13.2 billion, a decrease of $3.3 billion from the end of
2013. Total debt at December 31, 2014 stood at $27.8 billion, an
increase of $7.4 billion from a year earlier.
UPSTREAM
Worldwide net oil-equivalent production was 2.58 million barrels
per day in fourth quarter 2014, unchanged from the 2013 fourth
quarter. Production increases from project ramp-ups in the United
States, Argentina, Brazil, Nigeria and Bangladesh were offset by
normal field declines, and the effect of asset sales.
U.S. Upstream
Fourth Quarter Year Millions of Dollars
2014 2013 2014
2013 Earnings $432 $803 $3,327
$4,044
U.S. upstream earnings of $432 million in fourth quarter 2014
were down $371 million from a year earlier, as higher gains on
asset sales and higher crude oil production were more than offset
by sharply lower crude oil realizations and higher depreciation
expense.
The company’s average sales price per barrel of crude oil and
natural gas liquids was $66 in fourth quarter 2014, down from $90 a
year ago. The average sales price of natural gas was $3.34 per
thousand cubic feet, essentially unchanged from last year’s fourth
quarter.
Net oil-equivalent production of 673,000 barrels per day in
fourth quarter 2014 was up 23,000 barrels per day, or 4 percent,
from a year earlier. Production increases from project ramp-ups in
the Permian Basin in Texas and New Mexico, the Marcellus Shale in
western Pennsylvania, and the Gulf of Mexico were partially offset
by normal field declines. The net liquids component of
oil-equivalent production increased 5 percent in the 2014 fourth
quarter to 462,000 barrels per day, while net natural gas
production increased slightly to 1.27 billion cubic feet per
day.
International Upstream
Fourth Quarter Year Millions of Dollars
2014 2013 2014
2013 Earnings* $2,241 $4,049 $13,566
$16,765 *Includes foreign currency effects $453 $300
$597 $559
International upstream earnings of $2.24 billion decreased $1.81
billion from fourth quarter 2013. Higher gains on asset sales and
lower exploration expenses were more than offset by lower crude oil
realizations. Higher depreciation and operating expenses, mainly
related to impairments and other asset write-offs, and higher tax
items, also contributed to the decrease. Foreign currency effects
increased earnings by $453 million in the 2014 quarter, compared
with an increase of $300 million a year earlier.
The average sales price for crude oil and natural gas liquids in
fourth quarter 2014 was $68 per barrel, down from $101 a year
earlier. The average price of natural gas was $5.38 per thousand
cubic feet, compared with $5.75 in last year’s fourth quarter.
Net oil-equivalent production of 1.91 million barrels per day in
fourth quarter 2014 was down 17,000 barrels per day, or 1 percent,
from a year ago. Production increases from project ramp-ups in
Argentina, Brazil, Nigeria and Bangladesh were more than offset by
normal field declines and the effect of asset sales. The net
liquids component of oil-equivalent production decreased 1 percent
to 1.27 million barrels per day in the 2014 fourth quarter, while
net natural gas production of 3.83 billion cubic feet per day
remained essentially flat.
DOWNSTREAM
U.S. Downstream
Fourth Quarter Year Millions of Dollars
2014 2013 2014
2013 Earnings $889 $265 $2,637
$787
U.S. downstream operations earned $889 million in fourth quarter
2014 compared with earnings of $265 million a year earlier. The
increase was mainly due to higher gains on asset sales in fourth
quarter 2014 compared to the year-ago period. Higher margins on
refined product sales also contributed to the increase.
Refinery crude oil input of 927,000 barrels per day in fourth
quarter 2014 increased 56,000 barrels per day from the year-ago
period. The increase was primarily due to lower 2014 downtime at
refineries in Pascagoula, Mississippi and Richmond, California.
Refined product sales of 1.23 million barrels per day were up
9,000 barrels per day from fourth quarter 2013, mainly reflecting
higher gasoline sales. Branded gasoline sales of 509,000 barrels
per day were down 1 percent from the 2013 period.
International Downstream
Fourth Quarter Year Millions of Dollars
2014 2013 2014
2013 Earnings* $629 $125
$1,699 $1,450 *Includes foreign currency
effects $(21 ) $(96 ) $(112 ) $(76 )
International downstream operations earned $629 million in
fourth quarter 2014 compared with $125 million a year earlier. The
increase was mainly due to a favorable change in effects on
derivative instruments and higher margins on refined product sales.
This increase was partially offset by certain one-time employee
benefits expenses in the current period. Foreign currency effects
decreased earnings by $21 million in the 2014 quarter, compared
with a decrease of $96 million a year earlier.
Refinery crude oil input of 822,000 barrels per day in fourth
quarter 2014 decreased 56,000 barrels per day from the year-ago
period primarily due to the conversion of an affiliate refinery
into an import terminal in Kurnell, Australia.
Total refined product sales of 1.55 million barrels per day in
the 2014 fourth quarter were down 9,000 barrels per day from the
year-ago period, mainly due to lower residual fuel oil sales.
ALL OTHER
Fourth Quarter
Year
Millions of Dollars
2014 2013
2014 2013 Net Charges* $(720 )
$(312 ) $(1,988 ) $(1,623 )
*Includes foreign currency effects
$0
$(2 ) $2 $(9 )
All Other consists of mining activities, power and energy
services, worldwide cash management and debt financing activities,
corporate administrative functions, insurance operations, real
estate activities and technology companies.
Net charges in fourth quarter 2014 were $720 million, compared
with $312 million in the year-ago period. The change between
periods was mainly due to higher corporate charges, higher
corporate tax items and additional asset retirement obligations and
environmental reserves for mining assets.
CASH FLOW FROM OPERATIONS
Cash flow from operations in fourth quarter 2014 was $6.5
billion, compared with $10.5 billion in the corresponding 2013
period. Cash flow from operations in 2014 was $31.5 billion,
compared with $35.0 billion in 2013. Excluding working capital
effects, cash flow from operations in 2014 was $32.0 billion,
compared with $36.3 billion in 2013.
CAPITAL AND EXPLORATORY EXPENDITURES
Capital and exploratory expenditures in 2014 were $40.3 billion,
compared with $41.9 billion in the corresponding 2013 period. The
amounts included $3.5 billion in 2014 and $2.7 billion in 2013 for
the company’s share of expenditures by affiliates, which did not
require cash outlays by the company. Expenditures for upstream
represented 92 percent of the companywide total in 2014.
NOTICE
Chevron’s discussion of fourth quarter 2014 earnings with
security analysts will take place on Friday, January 30, 2015, at
8:00 a.m. PST. A webcast of the meeting will be available in a
listen-only mode to individual investors, media, and other
interested parties on Chevron’s Web site at www.chevron.com under the “Investors”
section. Additional financial and operating information will be
contained in the Earnings Supplement that will be available under
“Events and Presentations” in the “Investors” section on the Web
site.
CAUTIONARY STATEMENTS RELEVANT TO
FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR”
PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF
1995
This press release contains forward-looking statements relating
to Chevron’s operations that are based on management’s current
expectations, estimates and projections about the petroleum,
chemicals and other energy-related industries. Words such as
“anticipates,” “expects,” “intends,” “plans,” “targets,”
“forecasts,” “projects,” “believes,” “seeks,” “schedules,”
“estimates,” “may,” “could,” “budgets,” “outlook” and similar
expressions are intended to identify such forward-looking
statements. These statements are not guarantees of future
performance and are subject to certain risks, uncertainties and
other factors, many of which are beyond the company’s control and
are difficult to predict. Therefore, actual outcomes and results
may differ materially from what is expressed or forecasted in such
forward-looking statements. The reader should not place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. Unless legally required, Chevron
undertakes no obligation to update publicly any forward-looking
statements, whether as a result of new information, future events
or otherwise.
Among the important factors that could cause actual results to
differ materially from those in the forward-looking statements are:
changing crude oil and natural gas prices; changing refining,
marketing and chemicals margins; actions of competitors or
regulators; timing of exploration expenses; timing of crude oil
liftings; the competitiveness of alternate-energy sources or
product substitutes; technological developments; the results of
operations and financial condition of equity affiliates; the
inability or failure of the company’s joint-venture partners to
fund their share of operations and development activities; the
potential failure to achieve expected net production from existing
and future crude oil and natural gas development projects;
potential delays in the development, construction or start-up of
planned projects; the potential disruption or interruption of the
company’s production or manufacturing facilities or
delivery/transportation networks due to war, accidents, political
events, civil unrest, severe weather, other natural or human
factors, or crude oil production quotas that might be imposed by
the Organization of Petroleum Exporting Countries; the potential
liability for remedial actions or assessments under existing or
future environmental regulations and litigation; significant
investment or product changes required by existing or future
environmental statutes, regulations and litigation; the potential
liability resulting from other pending or future litigation; the
company’s future acquisition or disposition of assets and gains and
losses from asset dispositions or impairments; government-mandated
sales, divestitures, recapitalizations, industry-specific taxes,
changes in fiscal terms or restrictions on scope of company
operations; foreign currency movements compared with the U.S.
dollar; the effects of changed accounting rules under generally
accepted accounting principles promulgated by rule-setting bodies;
and the factors set forth under the heading “Risk Factors” on pages
27 through 29 of the company’s 2013 Annual Report on Form 10-K. In
addition, such results could be affected by general domestic and
international economic and political conditions. Other
unpredictable or unknown factors not discussed in this press
release could also have material adverse effects on forward-looking
statements.
Attachment 1
CHEVRON CORPORATION - FINANCIAL REVIEW (Millions of
Dollars, Except Per-Share Amounts)
CONSOLIDATED
STATEMENT OF INCOME
(unaudited)
Three Months Year Ended
Ended December 31 December 31 REVENUES AND
OTHER INCOME 2014 2013 2014
2013 Sales and other operating revenues *
$
42,111 $ 53,950
$ 200,494 $ 220,156 Income
from equity affiliates
1,555 1,824
7,098 7,527 Other
income
2,422 384
4,378 1,165
Total Revenues and
Other Income 46,088 56,158
211,970 228,848
COSTS AND OTHER DEDUCTIONS Purchased crude oil and products
24,263 32,691
119,671 134,696 Operating, selling,
general and administrative expenses
7,940 7,697
29,779 29,137 Exploration expenses
510 726
1,985 1,861 Depreciation, depletion and amortization
4,873 3,635
16,793 14,186 Taxes other than on income
*
3,118 3,211
12,540 13,063
Total Costs and Other
Deductions 40,704 47,960
180,768 192,943
Income Before Income Tax Expense 5,384 8,198
31,202 35,905 Income tax expense
1,912 3,240
11,892 14,308
Net Income
3,472 4,958
19,310 21,597 Less: Net income
attributable to noncontrolling interests
1 28
69 174
NET INCOME ATTRIBUTABLE
TOCHEVRON CORPORATION
$ 3,471 $ 4,930
$ 19,241 $ 21,423
PER-SHARE OF COMMON STOCK Net Income Attributable
to Chevron Corporation - Basic $ 1.86 $
2.60
$ 10.21 $ 11.18
- Diluted $
1.85 $ 2.57
$ 10.14 $ 11.09
Dividends
$ 1.07 $ 1.00
$ 4.21 $ 3.90
Weighted Average Number of Shares Outstanding (000's) -
Basic 1,871,332 1,903,930
1,883,633 1,917,018
- Diluted 1,883,650 1,919,324
1,897,897
1,932,393 * Includes excise, value-added and similar taxes.
$ 2,004 $ 2,128
$ 8,186 $ 8,492
Attachment 2
CHEVRON CORPORATION - FINANCIAL REVIEW (Millions of
Dollars) (unaudited)
EARNINGS BY MAJOR
OPERATING AREA
Three Months Year Ended Ended
December 31 December 31 2014 2013
2014 2013 Upstream United States
$
432 $ 803
$ 3,327 $ 4,044 International
2,241 4,049
13,566 16,765
Total Upstream
2,673 4,852
16,893
20,809 Downstream United States
889 265
2,637 787 International
629 125
1,699 1,450 Total Downstream
1,518
390
4,336 2,237 All Other (1)
(720 ) (312 )
(1,988 ) (1,623 )
Total (2) $ 3,471 $ 4,930
$ 19,241 $ 21,423
SELECTED BALANCE
SHEET ACCOUNT DATA
Dec. 31, 2014
Dec. 31, 2013
Cash and Cash Equivalents
$ 12,785 $ 16,245 Time
Deposits
$ 8 $ 8 Marketable Securities
$
422 $ 263 Total Assets
$ 266,026 $ 253,753
Total Debt
$ 27,818 $ 20,431 Total Chevron
Corporation Stockholders' Equity
$ 155,028 $ 149,113
Three Months Year Ended Ended December
31 December 31
CASH FLOW FROM
OPERATIONS
2014 2013 2014 2013 Net Cash Provided
by Operating Activities
$ 6,497 $ 10,452
$
31,475 $ 35,002 Net (Increase)/Decrease in Operating Working
Capital
$ (164 ) $ 757
$ (540
) $ (1,331 ) Net Cash Provided by Operating Activities
Excluding Working Capital
$ 6,661 $ 9,695
$
32,015 $ 36,333
Three Months Year Ended
Ended December 31 December 31
CAPITAL AND
EXPLORATORY EXPENDITURES (3)
2014 2013 2014 2013 United
States Upstream
$ 2,582 $ 2,567
$
8,799 $ 8,480 Downstream
505 699
1,649 1,986
Other
206 375
584 821
Total United States 3,293 3,641
11,032 11,287
International Upstream
7,672 8,812
28,316 29,378 Downstream
318 499
941 1,189
Other
7 6
27 23
Total
International 7,997 9,317
29,284
30,590
Worldwide
$ 11,290 $ 12,958
$
40,316 $ 41,877
(1) Includes mining activities, power and
energy services, worldwide cash management and debt financing
activities, corporate administrative functions, insurance
operations, real estate activities and technology companies.
(2) Net Income Attributable to Chevron
Corporation (See Attachment 1)
(3) Includes interest in affiliates: United States
$
323 $ 275
$ 1,021 $ 725 International
722 669
2,446 1,973 Total
$ 1,045 $ 944
$ 3,467
$ 2,698
Attachment 3
CHEVRON CORPORATION - FINANCIAL REVIEW
Three Months Year Ended
OPERATING
STATISTICS (1)
Ended December 31 December 31 NET LIQUIDS
PRODUCTION (MB/D): (2) 2014 2013
2014 2013 United States
462 440
456 449 International
1,270 1,286
1,253 1,282
Worldwide 1,732 1,726
1,709 1,731
NET NATURAL GAS PRODUCTION (MMCF/D): (3) United
States
1,266 1,261
1,250 1,246 International
3,834 3,836
3,917 3,946
Worldwide 5,100
5,097
5,167 5,192
TOTAL NET OIL-EQUIVALENT
PRODUCTION (MB/D): (4) United States
673 650
664 657 International
1,909 1,926
1,907 1,940
Worldwide 2,582 2,576
2,571 2,597
SALES OF NATURAL GAS (MMCF/D): United States
3,689
4,559
3,995 5,483 International (5)
4,230 4,168
4,304 4,251
Worldwide 7,919 8,727
8,299
9,734
SALES OF NATURAL GAS LIQUIDS (MB/D): United
States
155 154
141 142 International
92 89
86 88
Worldwide 247 243
227 230
SALES OF REFINED PRODUCTS (MB/D): United States
1,230
1,221
1,210 1,182 International (6)
1,548 1,557
1,501 1,529
Worldwide 2,778 2,778
2,711
2,711
REFINERY INPUT (MB/D): United States
927
871
871 774 International
822 878
819 864
Worldwide 1,749 1,749
1,690 1,638 (1)
Includes interest in affiliates. (2) Includes: Canada - Synthetic
Oil
44 45
43 43 Venezuela Affiliate - Synthetic Oil
29 32
31 25 (3) Includes natural gas consumed in
operations (MMCF/D): United States
68 68
71 72
International (7)
441 463
452 458
(4) Oil-equivalent production is the sum
of net liquids production, net natural gas production and synthetic
production. The oil-equivalent gas conversion ratio is 6,000 cubic
feet of natural gas = 1 barrel of crude oil.
(5) Includes share of affiliate sales (6) Includes share of
affiliate sales (MB/D):
487 469
475 471 (7) 2013
conforms to 2014 presentation.
Chevron CorporationKurt Glaubitz, +1-925-790-6928
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