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Earnings Details
3rd Quarter September 2017
Friday, October 27, 2017 8:30:00 AM
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Summary

Chevron Misses

Chevron (CVX) reported 3rd Quarter September 2017 earnings of $1.03 per share on revenue of $36.2 billion. The consensus earnings estimate was $0.99 per share on revenue of $33.4 billion. The Earnings Whisper number was $1.05 per share. Revenue grew 20.1% on a year-over-year basis.

Chevron Corp provides administrative, financial, management and technology support to U.S. & international subsidiaries that engage in fully integrated petroleum operations, chemicals operations, mining operations, and power and energy services.

Results
Reported Earnings
$1.03
Earnings Whisper
$1.05
Consensus Estimate
$0.99
Reported Revenue
$36.21 Bil
Revenue Estimate
$33.41 Bil
Growth
Earnings Growth
Revenue Growth
Power Rating
Grade
Earnings Release

Chevron Reports Third Quarter Net Income of $2.0 Billion

Chevron Corporation (CVX) today reported earnings of $2.0 billion ($1.03 per share - diluted) for third quarter 2017, compared with $1.3 billion ($0.68 per share - diluted) in the third quarter of 2016. Included in the quarter was a gain on an asset sale of $675 million and an asset write-off of $220 million. Foreign currency effects decreased earnings in the 2017 third quarter by $112 million, compared with an increase of $72 million a year earlier.

Sales and other operating revenues in third quarter 2017 were $34 billion, compared to $29 billion in the year-ago period.

Earnings Summary
Three Months
Nine Months
Ended Sept. 30
Ended Sept. 30
Millions of dollars
2017
2016
2017
2016
Earnings by Business Segment
Upstream
$489
$454
$2,859
$(3,467 )
Downstream
1,814
1,065
3,935
3,078
All Other
(351 )
(236 )
(710 )
(523 )
Total (1)(2)
$1,952
$1,283
$6,084
$(912 )
(1) Includes foreign currency effects
$(112 )
$72
$(351 )
$32
(2) Net income (loss) attributable to Chevron Corporation (See
Attachment 1)

"We continue to see improvement in the underlying pattern of earnings and cash flow," said Chairman and CEO John Watson.

"Cash flow is at a positive inflection point, with oil and gas production increasing and capital spending falling," Watson added. "We’re completing projects that have been under construction and ramping up production, notably at our Gorgon LNG Project in Australia. And our shale and tight rock drilling activity in the Permian Basin is exceeding expectations."

"We expect this pattern to continue," Watson commented. "Earlier this month, we announced first LNG production from our Wheatstone LNG development in Australia."

UPSTREAM

Worldwide net oil-equivalent production was 2.72 million barrels per day in third quarter 2017, compared with 2.51 million barrels per day from a year ago.

U.S. Upstream
Three Months
Nine Months
Ended Sept. 30
Ended Sept. 30
Millions of dollars
2017
2016
2017
2016
Earnings
$(26 )
$(212 )
$(48 )
$(2,175 )

U.S. upstream operations incurred a loss of $26 million in third quarter 2017, compared with a loss of $212 million from a year earlier. The improvement reflected higher crude oil realizations.

The company’s average sales price per barrel of crude oil and natural gas liquids was $42 in third quarter 2017, up from $37 a year earlier. The average sales price of natural gas was $1.80 per thousand cubic feet in third quarter 2017, compared with $1.89 in last year’s third quarter.

Net oil-equivalent production of 681,000 barrels per day in third quarter 2017 was down 17,000 barrels per day from a year earlier. Production increases from shale and tight properties in the Permian Basin in Texas and New Mexico, and base business in the Gulf of Mexico, were more than offset by the impact of asset sales of 67,000 barrels per day, and normal field declines. The net liquids component of oil-equivalent production in third quarter 2017 increased 1 percent to 525,000 barrels per day, while net natural gas production decreased 13 percent to 932 million cubic feet per day primarily as a result of asset sales.

International Upstream
Three Months
Nine Months
Ended Sept. 30
Ended Sept. 30
Millions of dollars
2017
2016
2017
2016
Earnings*
$515
$666
$2,907
$(1,292 )
*Includes foreign currency effects
$(164 )
$85
$(441 )
$116

International upstream operations earned $515 million in third quarter 2017, compared with $666 million a year ago. The decrease in earnings was mainly due to higher depreciation expense including the effect of catch-up depreciation for our Bangladesh operations that we no longer intend to sell and an asset write-off. Also contributing were higher tax expenses and the absence of an Ecuador arbitration award. More than offsetting these items were higher crude oil and natural gas realizations, higher natural gas and crude oil sales volumes, and higher equity income from the absence of a TCO royalty expense. Foreign currency effects had an unfavorable impact on earnings of $249 million between periods.

The average sales price for crude oil and natural gas liquids in third quarter 2017 was $48 per barrel, up from $41 a year earlier. The average price of natural gas was $4.76 per thousand cubic feet in the quarter, compared with $4.18 in last year’s third quarter.

Net oil-equivalent production of 2.04 million barrels per day in third quarter 2017 was up 221,000 barrels per day from a year earlier. Production increases from major capital projects, primarily Gorgon and Angola LNG, and lower planned turnaround effects at Tengizchevroil, were partially offset by production entitlement effects in several locations and normal field declines. The net liquids component of oil-equivalent production increased 5 percent to 1.19 million barrels per day in the 2017 third quarter, while net natural gas production increased 25 percent to 5.05 billion cubic feet per day.

DOWNSTREAM

U.S. Downstream
Three Months
Nine Months
Ended Sept. 30
Ended Sept. 30
Millions of dollars
2017
2016
2017
2016
Earnings
$640
$523
$1,743
$1,307

U.S. downstream operations earned $640 million in third quarter 2017, compared with earnings of $523 million a year earlier. The increase in earnings was primarily due to higher margins on refined product sales.

Refinery crude oil input in third quarter 2017 decreased 4 percent from the year-ago period to 931,000 barrels per day. Refined product sales of 1.23 million barrels per day decreased 2 percent from third quarter 2016. Branded gasoline sales of 540,000 barrels per day decreased 2 percent from the 2016 period. Both refinery crude oil input and refined product sales were lower due to divestment of the Hawaii refining and marketing assets in fourth quarter 2016.

International Downstream
Three Months
Nine Months
Ended Sept. 30
Ended Sept. 30
Millions of dollars
2017
2016
2017
2016
Earnings*
$1,174
$542
$2,192
$1,771
*Includes foreign currency effects
$15
$(4 )
$(27 )
$(78 )

International downstream operations earned $1.17 billion in third quarter 2017 , compared with $542 million a year earlier. The increase in earnings was largely due to higher gains on asset sales, primarily from the sale of the company’s Canadian refining and marketing assets. Higher operating expenses and lower margins on refined product sales were partially offsetting. Foreign currency effects had a favorable impact on earnings of $19 million between periods.

Refinery crude oil input of 801,000 barrels per day in third quarter 2017 increased 11,000 barrels per day from the year-ago period mainly due to crude unit optimization and lower maintenance at the company’s affiliate, Singapore Refining Company.

Total refined product sales of 1.55 million barrels per day in third quarter 2017 were up 6 percent from the year-ago period, primarily due to higher diesel and jet fuel sales.

ALL OTHER

Three Months
Nine Months
Ended Sept. 30
Ended Sept. 30
Millions of dollars
2017
2016
2017
2016
Net Charges*
$(351 )
$(236 )
$(710 )
$(523 )
*Includes foreign currency effects
$37
$(9 )
$117
$(6 )

All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.

Net charges in third quarter 2017 were $351 million, compared with $236 million a year earlier. The change between periods was mainly due to higher tax items and higher corporate charges. Partially offsetting was lower interest expense. Foreign currency effects decreased net charges by $46 million between periods.

CASH FLOW FROM OPERATIONS

Cash flow from operations in the first nine months of 2017 was $14.3 billion, compared with $9.0 billion in the corresponding 2016 period. Excluding working capital effects, cash flow from operations in 2017 was $15.0 billion, compared with $10.2 billion in the corresponding 2016 period.

CAPITAL AND EXPLORATORY EXPENDITURES

Capital and exploratory expenditures in the first nine months of 2017 were $13.4 billion, compared with $17.2 billion in the corresponding 2016 period. The amounts included $3.3 billion in 2017 and $2.7 billion in 2016 for the company’s share of expenditures by affiliates, which did not require cash outlays by the company. Expenditures for upstream represented 89 percent of the companywide total in the first nine months of 2017.

NOTICE

Chevron’s discussion of third quarter 2017 earnings with security analysts will take place on Friday, October 27, 2017, at 8:00 a.m. PDT. 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.

As used in this press release, the term "Chevron" and such terms as "the company," "the corporation," "our," "we" and "us" may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or to all of them taken as a whole. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.

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 or phrases such as "anticipates," "expects," "intends," "plans," "targets," "forecasts," "projects," "believes," "seeks," "schedules," "estimates," "positions," "pursues," "may," "could," "should," "budgets," "outlook," "trends," "guidance," "focus," "on schedule," "on track," "goals," "objectives," "strategies," "opportunities," 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; the company’s ability to realize anticipated cost savings and expenditure reductions; 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 the company’s suppliers, vendors, partners and equity affiliates, particularly during extended periods of low prices for crude oil and natural gas; 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 operations due to war, accidents, political events, civil unrest, severe weather, cyber threats and terrorist acts, crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries, or other natural or human causes beyond its control; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from other pending or future litigation; the company’s future acquisition or disposition of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for 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; material reductions in corporate liquidity and access to debt markets; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading "Risk Factors" on pages 20 through 22 of the company’s 2016 Annual Report on Form 10-K. 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
Nine Months
Ended September 30
Ended September 30
REVENUES AND OTHER INCOME
2017
2016
2017
2016
Sales and other operating revenues *
$
33,892
$
29,159
$
98,293
$
80,073
Income from equity affiliates
1,036
555
3,502
1,883
Other income
1,277
426
2,311
1,019
36,205
30,140
104,106
82,975
Total Revenues and Other Income
COSTS AND OTHER DEDUCTIONS
Purchased crude oil and products
18,776
15,842
54,607
42,345
Operating, selling, general and administrative expenses
6,175
5,775
17,354
18,264
Exploration expenses
239
258
508
842
Depreciation, depletion and amortization
5,109
4,130
14,614
15,254
Taxes other than on income *
3,213
2,962
9,149
8,799
Interest and debt expense
35
64
134
143
Total Costs and Other Deductions
33,547
29,031
96,366
85,647
Income (Loss) Before Income Tax Expense
2,658
1,109
7,740
(2,672 )
Income tax expense (benefit)
672
(192 )
1,589
(1,803 )
Net Income (Loss)
1,986
1,301
6,151
(869 )
Less: Net income attributable to noncontrolling interests
34
18
67
43
NET INCOME (LOSS) ATTRIBUTABLE TO CHEVRON CORPORATION
$
1,952
$
1,283
$
6,084
$
(912 )
PER-SHARE OF COMMON STOCK
Net Income (Loss) Attributable to Chevron Corporation
- Basic
$
1.03
$
0.68
$
3.23
$
(0.49 )
- Diluted
$
1.03
$
0.68
$
3.21
$
(0.49 )
Dividends
$
1.08
$
1.07
$
3.24
$
3.21
Weighted Average Number of Shares Outstanding (000’s)
- Basic
1,882,650
1,873,649
1,881,026
1,871,813
- Diluted
1,895,879
1,883,342
1,894,764
1,871,813
* Includes excise, value-added and similar taxes.
$
1,867
$
1,772
$
5,315
$
5,208
Attachment 2
CHEVRON CORPORATION - FINANCIAL REVIEW
(Millions of Dollars)
(unaudited)
EARNINGS BY MAJOR OPERATING AREA
Three Months
Nine Months
Ended September 30
Ended September 30
2017
2016
2017
2016
Upstream
United States
$
(26 )
$
(212 )
$
(48 )
$
(2,175 )
International
515
666
2,907
(1,292 )
Total Upstream
489
454
2,859
(3,467 )
Downstream
United States
640
523
1,743
1,307
International
1,174
542
2,192
1,771
Total Downstream
1,814
1,065
3,935
3,078
All Other (1)
(351 )
(236 )
(710 )
(523 )
Total (2)
$ 1,952
$ 1,283
$
6,084
$
(912 )
SELECTED BALANCE SHEET ACCOUNT DATA
Sep 30, 2017
Dec 31, 2016
Cash and Cash Equivalents
$
6,641
$
6,988
Marketable Securities
$
13
$
13
Total Assets
$ 255,160
$
260,078
Total Debt
$
41,972
$
46,126
Total Chevron Corporation Stockholders’ Equity
$ 146,713
$
145,556
Nine Months
Ended September 30
CASH FLOW FROM OPERATIONS
2017
2016
Net Cash Provided by Operating Activities
$
14,285
$
8,983
Net Increase in Operating Working Capital
$
(695 )
$
(1,266 )
Net Cash Provided by Operating Activities Excluding Working Capital
$
14,980
$
10,249
Three Months
Nine Months
Ended September 30
Ended September 30
CAPITAL AND EXPLORATORY EXPENDITURES
2017
2016
2017
2016
(3)
United States
Upstream
$ 1,201
$
990
$
3,406
$
3,470
Downstream
367
357
1,049
1,110
Other
63
62
132
137
1,631
1,409
4,587
4,717
Total United States
International
Upstream
2,715
3,649
8,501
12,157
Downstream
110
115
297
290
Other
-
2
1
3
Total International
2,825
3,766
8,799
12,450
Worldwide
$ 4,456
$ 5,175
$
13,386
$
17,167
(1) Includes worldwide cash management and debt financing
activities, corporate administrative functions, insurance
operations, real estate activities, and technology companies.
(2) Net Income (Loss) Attributable to Chevron Corporation (See
Attachment 1)
(3) Includes interest in affiliates:
United States
$
130
$
237
$
476
$
805
International
984
753
2,776
1,888
Total
$ 1,114
$
990
$
3,252
$
2,693
Attachment 3
CHEVRON CORPORATION - FINANCIAL REVIEW
Three Months
Nine Months
OPERATING STATISTICS (1)
Ended September 30
Ended September 30
NET LIQUIDS PRODUCTION (MB/D): (2)
2017
2016
2017
2016
United States
525
519
520
503
International
1,194
1,142
1,206
1,207
Worldwide
1,719
1,661
1,726
1,710
NET NATURAL GAS PRODUCTION (MMCF/D): (3)
United States
932
1,077
988
1,144
International
5,053
4,036
5,001
4,009
Worldwide
5,985
5,113
5,989
5,153
TOTAL NET OIL-EQUIVALENT PRODUCTION (MB/D): (4)
United States
681
698
684
694
International
2,036
1,815
2,040
1,875
Worldwide
2,717
2,513
2,724
2,569
SALES OF NATURAL GAS (MMCF/D):
United States
3,455
3,263
3,288
3,408
International
4,978
4,306
5,018
4,455
Worldwide
8,433
7,569
8,306
7,863
SALES OF NATURAL GAS LIQUIDS (MB/D):
United States
137
164
142
145
International
90
67
94
82
Worldwide
227
231
236
227
SALES OF REFINED PRODUCTS (MB/D):
United States
1,225
1,244
1,206
1,239
International (5)
1,556
1,469
1,484
1,451
Worldwide
2,781
2,713
2,690
2,690
REFINERY INPUT (MB/D):
United States
931
970
924
960
International
801
790
760
784
Worldwide
1,732
1,760
1,684
1,744
(1) Includes interest in affiliates.
(2) Includes net production of synthetic oil:
Canada
56
58
52
50
Venezuela Affiliate
29
29
29
28
(3) Includes natural gas consumed in operations (MMCF/D):
United States
34
46
37
61
International
545
435
523
431
(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 (MB/D):
369
391
360
374

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SOURCE: Chevron Corporation

Chevron Corporation
Melissa Ritchie
mritchie@chevron.com