| Notes to the Consolidated Financial Statements | |
| 12 Months Ended
Dec. 31, 2008
USD / shares
|
| Financials Notes | |
| Summary of Significant Accounting Policies |
Note 1
Summary of Significant Accounting Policies
GeneralExploration and production (upstream)operations consist of exploring for, developing and producing crude oil and natural gas and marketing natural gas. Refining, marketing and transportation (downstream)operations relate to refining crude oil into finished petroleum products; marketing crude oil and the many products derived from petroleum; and transporting crude oil, natural gas and petroleum products by pipeline, marine vessel, motor equipment and rail car. Chemical operations include the manufacture and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant oil additives.
The companys Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America. These require the use of estimates and assumptions that affect the assets, liabilities, revenues and expenses reported in the financial statements, as well as amounts included in the notes thereto, including discussion and disclosure of contingent liabilities. Although the company uses its best estimates and judgments, actual results could differ from these estimates as future confirming events occur.
The nature of the companys operations and the many countries in which it operates subject the company to changing economic, regulatory and political conditions. The company does not believe it is vulnerable to the risk of near-term severe impact as a result of any concentration of its activities.
Subsidiary and Affiliated Companies The Consolidated Financial Statements include the accounts of controlled subsidiary companies more than 50percent-owned and variable-interest entities in which the company is the primary beneficiary. Undivided interests in oil and gas joint ventures and certain other assets are consolidated on a proportionate basis. Investments in and advances to affiliates in which the company has a substantial ownership interest of approximately 20percent to 50percent or for which the company exercises significant influence but not control over policy decisions are accounted for by the equity method. As part of that accounting, the company recognizes gains and losses that arise from the issuance of stock by an affiliate that results in changes in the companys proportionate share of the dollar amount of the affiliates equity currently in income.
Investments are assessed for possible impairment when events indicate that the fair value of the investment may be below the companys carrying value. When such a condition is deemed to be other than temporary, the carrying value of the investment is written down to its fair value, and the amount of the write-down is included in net income. In making the determination as to whether a decline is other than temporary, the company considers such factors as the duration and extent of the decline, the investees financial performance, and the companys ability and intention to retain its investment for a period that will be sufficient to allow for any anticipated recovery in the investments market value. The new cost basis of investments in these equity investees is not |
Information Relating to the Consolidated Statement of Cash
Flows |
Note 2
Information Relating to the Consolidated Statement of Cash Flows
Year ended December 31
2008 2007 2006
Net (increase)decrease in operating working capital was composed of the following:
Decrease (increase)in accounts and notes receivable $ 6,030 $ (3,867 ) $ 17
Increase in inventories (1,545 ) (749 ) (536 )
Increase in prepaid expenses and other current assets (621 ) (370 ) (31 )
(Decrease) increase in accounts payable and accrued liabilities (4,628 ) 4,930 1,246
(Decrease) increase in income and other taxes payable (909 ) 741 348
Net (increase)decrease in operating working capital $ (1,673 ) $ 685 $ 1,044
Net cash provided by operating activities includes the following cash payments for interest and income taxes:
Interest paid on debt (net of capitalized interest) $ $ 203 $ 470
Income taxes $ 19,130 $ 12,340 $ 13,806
Net sales of marketable securities consisted of the following gross amounts:
Marketable securities sold $ 3,719 $ 2,160 $ 1,413
Marketable securities purchased (3,236 ) (1,975 ) (1,271 )
Net sales of marketable securities $ 483 $ 185 $ 142
In accordance with the cash-flow classification requirements of FAS 123R, Share-Based Payment, the Net decrease in operating working capital includes reductions of $106, $96 and $94 for excess income tax benefits associated with stock options exercised during 2008, 2007 and 2006, respectively. These amounts are offset by Net purchases of treasury shares.
In 2008, Net purchases of other short-term investments consist of $367 in restricted cash associated with capital-investment projects at the companys Pascagoula, Mississippi refinery and the Angola liquefied natural gas project that was invested in short-term marketable securities and reclassified from Cash and cash equivalents to Deferred charges and other assets in the Consolidated Balance Sheet. In 2007, the company issued a $650 tax exempt Mississippi Gulf Opportunity Zone Bond as a source of funds for the Pascagoula Refinery project.
The Net purchases of treasury shares represents the cost of common shares less the cost of shares issued for share-based compensation plans. Purchases totaled $8,011, $7,036 and $5,033 in 2008, 2007 and 2006, respectively.
The Consolidated Statement of Cash Flows for 2008 excludes changes to the Consolidated Balance Sheet that did not affect cash. Net purchases of treasury shares excludes $680 of treasury shares acquired in exchange for a U.S. upstream property and $280 in cash. The carrying value of this property in Properties, plant and equipment on the Consolidated Balance Sheet was not significant. The Increase in accounts payable and accrued liabilities excludes a $2,450 increase in Accrued liabilities that was offset to Properties, plant and equipment on the Consolidated Balance Sheet. This amount related to accruals assoc |
| Stockholders' Equity |
Note 3
Stockholders Equity
Retained earnings at December31, 2008 and 2007, included approximately $7,951 and $7,284, respectively, for the companys share of undistributed earnings of equity affiliates.
At December31, 2008, about 109million shares of Chevrons common stock remained available for issuance from the 160million shares that were reserved for issuance under the Chevron Corporation Long-Term Incentive Plan (LTIP). In addition, approximately 409,000 shares remain available for issuance from the 800,000 shares of the companys common stock that were reserved for awards under the Chevron Corporation Non-Employee Directors Equity Compensation and Deferral Plan (Non-Employee Directors Plan). |
| Summarized Financial Data - Chevron U.S.A. Inc |
Note 4
Summarized Financial Data Chevron U.S.A. Inc.
Chevron U.S.A. Inc. (CUSA)is a major subsidiary of Chevron Corporation. CUSA and its subsidiaries manage and operate most of Chevrons U.S. businesses. Assets include those related to the exploration and production of crude oil, natural gas and natural gas liquids and those associated with the refining, marketing, supply and distribution of products derived from petroleum, excluding most of the regulated pipeline operations of Chevron. CUSA also holds the companys investment in the Chevron Phillips Chemical Company LLC joint venture, which is accounted for using the equity method.
During 2008, Chevron implemented legal reorganizations in which certain Chevron subsidiaries transferred assets to or under CUSA. The summarized financial information for CUSA and its consolidated subsidiaries presented in the table below gives retroactive effect to the reorganizations as if they had occurred on January1, 2006. However, the financial information in the following table may not reflect the financial position and operating results in the periods presented if the reorganization actually had occurred on that date.
Year ended December 31
2008 2007 2006
Sales and other operating revenues $ 195,593 $ 153,574 $ 145,774
Total costs and other deductions 185,788 147,510 137,765
Net income 7,237 5,203 5,668
At December 31
2008 2007
Current assets $ 32,760 $ 32,801
Other assets 31,806 27,400
Current liabilities 14,322 20,050
Other liabilities 14,805 11,447
Net equity 35,439 28,704
Memo: Total debt $ 6,813 $ 4,433 |
Summarized Financial Data - Chevron Transport Corporation
Ltd. |
Note 5
Summarized Financial Data Chevron Transport Corporation Ltd.
Chevron Transport Corporation Ltd. (CTC), incorporated in Bermuda, is an indirect, wholly owned subsidiary of Chevron Corporation. CTC is the principal operator of Chevrons international tanker fleet and is engaged in the marine transportation of crude oil and refined petroleum products. Most of CTCs shipping revenue is derived from providing transportation services to other Chevron companies. Chevron Corporation has fully and unconditionally guaranteed this subsidiarys obligations in connection with certain debt securities issued by a third party. Summarized financial information for CTC and its consolidated subsidiaries is presented in the following table:
Year ended December 31
2008 2007 2006
Sales and other operating revenues $ 1,022 $ 667 $ 692
Total costs and other deductions 947 713 602
Net income 120 (39 ) 119
At December 31
2008 2007
Current assets $ 482 $ 335
Other assets 172 337
Current liabilities 98 107
Other liabilities 88 188
Net equity 468 377
There were no restrictions on CTCs ability to pay dividends or make loans or advances at December 31, 2008. |
| Summarized Financial Data - Tengizchevroil LLP |
Note 6
Summarized Financial Data Tengizchevroil LLP.
Chevron has a 50percent equity ownership interest in Tengizchevroil LLP (TCO). Refer to Note 12 on page FS-41 for a discussion of TCO operations.
Summarized financial information for 100 percent of TCO is presented in the table below:
Year ended December 31
2008 2007 2006
Sales and other operating revenues $ 14,329 $ 8,919 $ 7,654
Costs and other deductions 5,621 3,387 2,967
Net income 6,134 3,952 3,315
At December 31
2008 2007
Current assets $ 2,740 $ 2,784
Other assets 12,240 11,446
Current liabilities 1,867 1,534
Other liabilities 4,759 4,927
Net equity 8,354 7,769
|
| Financial and Derivative Instruments |
Note 7
Financial and Derivative Instruments
Derivative Commodity Instruments Chevron is exposed to market risks related to price volatility of crude oil, refined products, natural gas, natural gas liquids, liquefied natural gas and refinery feedstocks.
The company uses derivative commodity instruments to manage these exposures on a portion of its activity, including firm commitments and anticipated transactions for the purchase, sale and storage of crude oil, refined products, natural gas, natural gas liquids and feedstock for company refineries. From time to time, the company also uses derivative commodity instruments for limited trading purposes.
The company uses International Swaps and Derivatives Association agreements to govern derivative contracts with certain counterparties to mitigate credit risk. Depending on the nature of the derivative transactions, bilateral collateral arrangements may also be required. When the company is engaged in more than one outstanding derivative transaction with the same counterparty and also has a legally enforceable netting agreement with that counterparty, the net mark-to-market exposure represents the netting of the positive and negative exposures with that counterparty and is a reasonable measure of the companys credit risk exposure. The company also uses other netting agreements with certain counterparties with which it conducts significant transactions to mitigate credit risk.
The fair values of the outstanding contracts are reported on the Consolidated Balance Sheet as Accounts and notes receivable, Accounts payable, Long-term receivables net and Deferred credits and other noncurrent obligations. Gains and losses on the companys risk management activities are reported as either Sales and other operating revenues or Purchased crude oil and products, whereas trading gains and losses are reported as Other income.
Foreign CurrencyThe company enters into forward exchange contracts, generally with terms of 180days or less, to manage some of its foreign currency exposures. These exposures include revenue and anticipated purchase transactions, including foreign currency capital expenditures and lease commitments, forecasted to occur within 180days. The forward exchange contracts are recorded at fair value on the balance sheet with resulting gains and losses reflected in income.
The fair values of the outstanding contracts are reported on the Consolidated Balance Sheet as Accounts and notes receivable or Accounts payable, with gains and losses reported as Other income.
Interest RatesThe company enters into interest rate swaps from time to time as part of its overall strategy to manage the interest rate risk on its debt. Under the terms of the swaps, net cash settlements are based on the difference between fixed-rate and floating-rate interest amounts calculated by reference to agreed notional principal amounts. Interest rate swaps related to a portion of the companys fixed-rate debt are accounted for as fair value hedges.
Fair values of the interest rate swaps are reported on the Consolidated Balance Sheet as Accounts and notes receivable or Accounts payable. Interest rate swaps |
Fair
Value Measurements |
Note 8
Fair Value Measurements
The company implemented FASB Statement No.157, Fair Value Measurements (FAS 157), as of January1, 2008. FAS 157 was amended in February2008 by FASB Staff Position (FSP)FAS No.157-1, Application of FASB Statement No.157 to FASB Statement No.13 and Its Related Interpretive Accounting Pronouncements That Address Leasing Transactions, and by FSP FAS 157-2, Effective Date of FASB Statement No.157, which delayed the companys application of FAS 157 for nonrecurring nonfinancial assets and liabilities until January1, 2009. FAS 157 was further amended in October2008 by FSP FAS 157-3, Determining the Fair Value of a Financial Asset When the Market for That Asset Is Not Active, which clarifies the application of FAS 157 to assets participating in inactive markets.
Implementation of FAS 157 did not have a material effect on the companys results of operations or consolidated financial position and had no effect on the companys existing fair-value measurement practices. However, FAS 157 requires disclosure of a fair-value hierarchy of inputs the company uses to value an asset or a liability. The three levels of the fair-value hierarchy are described as follows:
Level 1: Quoted prices (unadjusted)in active markets for identical assets and liabilities. For the company, Level 1 inputs include exchange-traded futures contracts for which the parties are willing to transact at the exchange-quoted price and marketable securities that are actively traded.
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly. For the company, Level 2 inputs include quoted prices for similar assets or liabilities, prices obtained through third-party broker quotes, and prices that can be corroborated with other observable inputs for substantially the complete term of a contract.
Level 3: Unobservable inputs. The company does not use Level 3 inputs for any of its recurring fair-value measurements. Beginning January1, 2009, Level 3 inputs may be required for the determination of fair value associated with certain nonrecurring measurements of nonfinancial assets and liabilities.
The fair-value hierarchy for assets and liabilities measured at fair value at December31, 2008, is as follows:
Assets and Liabilities Measured at
Fair Value on a Recurring Basis
Prices in Active
Markets for Other
Identical Observable Unobservable
At December 31 Assets/Liabilities Inputs Inputs
2008 (Level 1) (Level 2) (Level 3)
Marketable Securities $ 213 $ 213 $ $
Derivatives 805 529 276
Total Assets at Fair Value $ 1,018 $ 742 $ 276 $
Derivatives $ 516 $ 98 $ 418 $
Total Liabilities at Fair Value $ 516 $ 98 $ 418 $
Marketable securitiesThe company calculates fair value for its marketable securities based on quoted market prices for identical assets and liabilities.
DerivativesThe company records its derivative instruments other than any commodity derivative contracts that are designated as no |
| Operating Segments and Geographic Data |
Note 9
Operating Segments and Geographic Data
Although each subsidiary of Chevron is responsible for its own affairs, Chevron Corporation manages its investments in these subsidiaries and their affiliates. For this purpose, the investments are grouped as follows: upstream exploration and production; downstream refining, marketing and transportation; chemicals; and all other. The first three of these groupings represent the companys reportable segments and operating segments as defined in Financial Accounting Standards Board (FASB) Statement No.131, Disclosures About Segments of an Enterprise and Related Information (FAS 131).
The segments are separately managed for investment purposes under a structure that includes segment managers who report to the companys chief operating decision maker (CODM) (terms as defined in FAS 131). The CODM is the companys Executive Committee, a committee of senior officers that includes the Chief Executive Officer and that, in turn, reports to the Board of Directors of Chevron Corporation.
The operating segments represent components of the company as described in FAS 131 terms that engage in activities (a)from which revenues are earned and expenses are incurred; (b)whose operating results are regularly reviewed by the CODM, which makes decisions about resources to be allocated to the segments and to assess their performance; and (c)for which discrete financial information is available.
Segment managers for the reportable segments are accountable directly to and maintain regular contact with the companys CODM to discuss the segments operating activities and financial performance. The CODM approves annual capital and exploratory budgets at the reportable segment level, as well as reviews capital and exploratory funding for major projects and approves major changes to the annual capital and exploratory budgets. However, business-unit managers within the operating segments are directly responsible for decisions relating to project implementation and all other matters connected with daily operations. Company officers who are members of the Executive Committee also have individual management responsibilities and participate in other committees for purposes other than acting as the CODM.
All Other activities include the companys interest in Dynegy (through May2007, when Chevron sold its interest), mining operations, power generation businesses, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, alternative fuels, and technology companies.
The companys primary country of operation is the United States of America, its country of domicile. Other components of the companys operations are reported as International (outside the United States).
Segment EarningsThe company evaluates the performance of its operating segments on an after-tax basis, without considering the effects of debt financing interest expense or investment interest income, both of which are managed by the company on a worldwide basis. Corporate administrative costs and assets are not allocated to the operating segments. However, operating segmen |
| Lease Commitments |
Note 10
Lease Commitments
Certain noncancelable leases are classified as capital leases, and the leased assets are included as part of Properties, plant and equipment, at cost. Such leasing arrangements involve tanker charters, crude oil production and processing equipment, service stations, office buildings, and other facilities. Other leases are classified as operating leases and are not capitalized. The payments on such leases are recorded as expense. Details of the capitalized leased assets are as follows:
At December 31
2008 2007
Upstream $ 491 $ 482
Downstream $ 399 $ 551
Chemical and all other 171 171
Total 1,061 1,204
Less: Accumulated amortization 522 628
Net capitalized leased assets $ 539 $ 576
Rental expenses incurred for operating leases during 2008, 2007 and 2006 were as follows:
Year ended December 31
2008 2007 2006
Minimum rentals $ 2,984 $ 2,419 $ 2,326
Contingent rentals 6 6 6
Total 2,990 2,425 2,332
Less: Sublease rental income 41 30 33
Net rental expense $ 2,949 $ 2,395 $ 2,299
Contingent rentals are based on factors other than the passage of time, principally sales volumes at leased service stations. Certain leases include escalation clauses for adjusting rentals to reflect changes in price indices, renewal options ranging up to 25years, and options to purchase the leased property during or at the end of the initial or renewal lease period for the fair market value or other specified amount at that time.
At December31, 2008, the estimated future minimum lease payments (net of noncancelable sublease rentals) under operating and capital leases, which at inception had a non-cancelable term of more than one year, were as follows:
At December 31
Operating Capital
Leases Leases
Year: 2009 $ 503 $ 97
2010 463 77
2011 372 77
2012 315 84
2013 288 59
Thereafter 947 154
Total $ 2,888 $ 548
Less: Amounts representing interest and executory costs (110 )
Net present values 438
Less: Capital lease obligations included in short-term debt (97 )
Long-term capital lease obligations $ 341
|
| Restructuring and Reorganization Costs |
Note 11
Restructuring and Reorganization Costs
In 2007, the company implemented a restructuring and reorganization program in its downstream operations. Approximately 900 employees were eligible for severance payments. As of December31, 2008, approximately 700 employees have been terminated under the program. Most of the associated positions are located outside the United States. The program is expected to be completed by the end of 2009.
Shown in the table below is the activity for the companys liability related to the downstream reorganization. The associated charges against income were categorized as Operating expenses or Selling, general and administrative expenses on the Consolidated Statement of Income.
Amounts before tax 2008 2007
Balance at January 1 $ 85 $
Accruals/adjustments (11 ) 85
Payments (52 )
Balance at December 31 $ 22 $ 85
|
Investments
and Advances |
Note 12
Investments and Advances
Equity in earnings, together with investments in and advances to companies accounted for using the equity method and other investments accounted for at or below cost, is shown in the table below. For certain equity affiliates, Chevron pays its share of some income taxes directly. For such affiliates, the equity in earnings does not include these taxes, which are reported on the Consolidated Statement of Income as Income tax expense.
Investments and Advances Equity in Earnings
At December 31 Year ended December 31
2008 2007 2008 2007 2006
Upstream
Tengizchevroil $ 6,290 $ 6,321 $ 3,220 $ 2,135 $ 1,817
Petropiar/Hamaca 1,130 1,168 317 327 319
Petroboscan 816 762 244 185 31
Angola LNG Limited 1,191 574 (8 ) 21
Other 725 765 206 204 123
Total Upstream 10,152 9,590 3,979 2,872 2,290
Downstream
GS Caltex Corporation 2,601 2,276 444 217 316
Caspian Pipeline Consortium 749 951 103 102 117
Star Petroleum Refining Company Ltd. 877 944 22 157 116
Escravos Gas-to-Liquids 628 86 103 146
Caltex Australia Ltd. 723 580 250 129 186
Colonial Pipeline Company 536 546 32 39 34
Other 1,664 1,501 268 215 212
Total Downstream 7,150 7,426 1,205 962 1,127
Chemicals
Chevron Phillips Chemical Company LLC 2,037 2,024 158 380 697
Other 25 24 4 6 5
Total Chemicals 2,062 2,048 162 386 702
All Other
Other 567 449 20 (76 ) 136
Total equity method $ 19,931 $ 19,513 $ 5,366 $ 4,144 $ 4,255
Other at or below cost 989 964
Total investments and advances $ 20,920 $ 20,477
Total United States $ 4,002 $ 3,889 $ 307 $ 478 $ 955
Total International $ 16,918 $ 16,588 $ 5,059 $ 3,666 $ 3,300
Descriptions of major affiliates, including significant differences between the companys carrying value of its investments and its underlying equity in the net assets of the affiliates, are as follows:
TengizchevroilChevron has a 50percent equity ownership interest in Tengizchevroil (TCO), a joint venture formed in 1993 to develop the Tengiz and Korolev crude oil fields in Kazakhstan over a 40-year period. At December31, 2008, the companys carrying value of its investment in TCO was about $210 higher than the amount of underlying equity in TCO net assets. This difference results from Chevron acqu |
| Properties, Plant and Equipment |
Note 13
Properties, Plant and Equipment
At December 31 Year ended December 31
Gross Investment at Cost Net Investment Additions at Cost1 Depreciation Expense2
2008 2007 2006 2008 2007 2006 2008 2007 2006 2008 2007 2006
Upstream
United States $ 54,156 $ 50,991 $ 46,191 $ 22,294 $ 19,850 $ 16,706 $ 5,374 $ 5,725 $ 3,739 $ 2,683 $ 2,700 $ 2,374
International 84,282 71,408 61,281 51,140 43,431 37,730 13,177 10,512 7,290 5,441 4,605 3,888
Total Upstream 138,438 122,399 107,472 73,434 63,281 54,436 18,551 16,237 11,029 8,124 7,305 6,262
Downstream
United States 17,394 15,807 14,553 8,977 7,685 6,741 2,032 1,514 1,109 629 509 474
International 11,587 10,471 11,036 6,001 4,690 5,233 2,285 519 532 469 633 551
Total Downstream 28,981 26,278 25,589 14,978 12,375 11,974 4,317 2,033 1,641 1,098 1,142 1,025
Chemicals
United States 725 678 645 338 308 289 50 40 25 19 19 19
International 828 815 771 496 453 431 72 53 54 33 26 24
Total Chemicals 1,553 1,493 1,416 834 761 720 122 93 79 52 45 43
All Other3
United States 4,310 3,873 3,243 2,523 2,179 1,709 598 680 270 250 215 171
International 17 41 27 11 14 19 5 5 8 4 1 5
Total All Other 4,327 3,914 3,270 2,534 2,193 1,728 603 685 278 254 216 176
Total United States 76,585 71,349 64,632 34,132 30,022 25,445 8,054 7,959 5,143 3,581 3,443 3,038
Total International 96,714 82,735 73,115 57,648 48,588 43,413 15,539 11,089 7,884 5,947 5,265 4,468
Total $ 173,299 $ 154,084 $ 137,747 $ 91,780 $ 78,610 $ 68,858 $ 23,593 $ 19,048 $ 13,027 $ 9,528 $ 8,708 $ 7,506
1 Net of dry |
| Accounting for Buy/Sell Contracts |
Note 14
Accounting for Buy/Sell Contracts
The company adopted the accounting prescribed by Emerging Issues Task Force (EITF)Issue No.04-13, Accounting for Purchases and Sales of Inventory with the Same Counterparty (Issue 04-13), on a prospective basis from April1, 2006. Issue 04-13 requires that two or more legally separate exchange transactions with the same counterparty, including buy/sell transactions, be combined and considered as a single arrangement for purposes of applying the provisions of Accounting Principles Board Opinion No.29, Accounting for Nonmonetary Transactions, when the transactions are entered into in contemplation of one another. In prior periods, the company accounted for buy/sell transactions in the Consolidated Statement of Income as a monetary transaction purchases were reported as Purchased crude oil and products sales were reported as Sales and other operating revenues.
With the companys adoption of Issue 04-13, buy/sell transactions beginning in the second quarter 2006 are netted against each other on the Consolidated Statement of Income, with no effect on net income. The amount associated with buy/sell transactions in the first quarter 2006 is shown as a footnote to the Consolidated Statement of Income on page FS-27. |
| Litigation |
Note 15
Litigation
MTBEChevron and many other companies in the petroleum industry have used methyl tertiary butyl ether (MTBE) as a gasoline additive. In October2008, 59 cases were settled in which the company was a party and which related to the use of MTBE in certain oxygenated gasolines and the alleged seepage of MTBE into groundwater. The terms of this agreement are confidential and not material to the companys results of operations, liquidity or financial position.
Chevron is a party to 37 other pending lawsuits and claims, the majority of which involve numerous other petroleum marketers and refiners. Resolution of these lawsuits and claims may ultimately require the company to correct or ameliorate the alleged effects on the environment of prior release of MTBE by the company or other parties. Additional lawsuits and claims related to the use of MTBE, including personal-injury claims, may be filed in the future. The settlement of the 59 lawsuits did not set any precedents related to standards of liability to be used to judge the merits of the claims, corrective measures required or monetary damages to be assessed for the remaining lawsuits and claims or future lawsuits and claims. As a result, the companys ultimate exposure related to pending lawsuits and claims is not currently determinable, but could be material to net income in any one period. The company no longer uses MTBE in the manufacture of gasoline in the United States.
RFG PatentFourteen purported class actions were brought by consumers who purchased reformulated gasoline (RFG)from January1995 through August2005, alleging that Unocal misled the California Air Resources Board into adopting standards for composition of RFG that overlapped with Unocals undisclosed and pending patents. The parties agreed to a settlement that calls for, among other things, Unocal to pay $48 and for the establishment of a cy pres fund to administer payout of the award. The court approved the final settlement in November2008.
EcuadorChevron is a defendant in a civil lawsuit before the Superior Court of Nueva Loja in Lago Agrio, Ecuador, brought in May2003 by plaintiffs who claim to be representatives of certain residents of an area where an oil production consortium formerly had operations. The lawsuit alleges damage to the environment from the oil exploration and production operations, and seeks unspecified damages to fund environmental remediation and restoration of the alleged environmental harm, plus a health monitoring program. Until 1992, Texaco Petroleum Company (Texpet), a subsidiary of Texaco Inc., was a minority member of this consortium with Petroecuador, the Ecuadorian state-owned oil company, as the majority partner; since 1990, the operations have been conducted solely by Petroecuador. At the conclusion of the consortium and following an independent third-party environmental audit of the concession area, Texpet entered into a formal agreement with the Republic of Ecuador and Petroecuador for Texpet to remediate specific sites assigned by the government in proportion to Texpets ownership share of the consortium. Pursuant to that agreement, Texpet conducted a three-year r |
| Taxes |
Note 16
Taxes
Income Taxes
Year ended December 31
2008 2007 2006
Taxes on income
U.S. Federal
Current $ 2,879 $ 1,446 $ 2,828
Deferred 274 225 200
State and local 669 338 581
Total United States 3,822 2,009 3,609
International
Current 15,021 11,416 11,030
Deferred 183 54 199
Total International 15,204 11,470 11,229
Total taxes on income $ 19,026 $ 13,479 $ 14,838
In 2008, before-tax income for U.S. operations, including related corporate and other charges, was $10,682, compared with before-tax income of $7,794 and $9,131 in 2007 and 2006, respectively. For international operations, before-tax income was $32,275, $24,373 and $22,845 in 2008, 2007 and 2006, respectively. U.S. federal income tax expense was reduced by $198, $132 and $116 in 2008, 2007 and 2006, respectively, for business tax credits.
The reconciliation between the U.S. statutory federal income tax rate and the companys effective income tax rate is explained in the table below:
Year ended December 31
2008 2007 2006
U.S. statutory federal income tax rate 35.0 % 35.0 % 35.0 %
Effect of income taxes from international operations at rates different from the U.S. statutory rate 10.2 8.3 10.3
State and local taxes on income, net of U.S. federal income tax benefit 1.0 0.8 1.0
Prior-year tax adjustments (0.1 ) 0.3 0.9
Tax credits (0.5 ) (0.4 ) (0.4 )
Effects of enacted changes in tax laws (0.6 ) (0.3 ) 0.3
Other (0.7 ) (1.8 ) (0.7 )
Effective tax rate 44.3 % 41.9 % 46.4 %
The companys effective tax rate increased from 41.9percent in 2007 to 44.3percent in 2008. The increase in the Effect of income taxes from international operations at rates different from the U.S. statutory rate from 8.3percent in 2007 to 10.2 percent in 2008 was mainly due to a greater proportion of income being earned in 2008 in tax jurisdictions with higher tax rates. In addition, the 2007 period included a relatively low tax rate on the sale of downstream assets in Europe. The change in Other from a negative 1.8percent to a negative 0.7percent primarily related to a lower effective tax rate on the sale of the companys investment in Dynegy common stock in 2007.
The company records its deferred taxes on a tax-jurisdiction basis and classifies those net amounts as current or noncurrent based on the balance sheet classification of the related assets or liabilities. The reported deferred tax balances are composed of the following:
At December 31
2008 2007
Deferred tax liabilities
Properties, plant and equipment $ 18,271 $ 17,310
Investments and other 2,225 1,837
Total deferred tax liabilities 20,4 |
Short-Term
Debt |
Note 17
Short-Term Debt
At December 31
2008 2007
Commercial paper* $ 5,742 $ 3,030
Notes payable to banks and others with originating terms of one year or less 149 219
Current maturities of long-term debt 429 850
Current maturities of long-term capital leases 78 73
Redeemable long-term obligations
Long-term debt 1,351 1,351
Capital leases 19 21
Subtotal 7,768 5,544
Reclassified to long-term debt (4,950 ) (4,382 )
Total short-term debt $ 2,818 $ 1,162
* Weighted-average interest rates at December31, 2008 and 2007, were 0.67percent and 4.35percent, respectively.
Redeemable long-term obligations consist primarily of tax-exempt variable-rate put bonds that are included as current liabilities because they become redeemable at the option of the bondholders within one year following the balance sheet date.
The company periodically enters into interest rate swaps on a portion of its short-term debt. See Note 7, beginning on page FS-36, for information concerning the companys debt-related derivative activities.
At December31, 2008, the company had $4,950 of committed credit facilities with banks worldwide, which permit the company to refinance short-term obligations on a long-term basis. The facilities support the companys commercial paper borrowings. Interest on borrowings under the terms of specific agreements may be based on the London Interbank Offered Rate or bank prime rate. No amounts were outstanding under these credit agreements during 2008 or at year-end.
At December31, 2008 and 2007, the company classified $4,950 and $4,382, respectively, of short-term debt as long-term. Settlement of these obligations is not expected to require the use of working capital in 2009, as the company has both the intent and the ability to refinance this debt on a long-term basis. |
Long-Term
Debt |
Note 18
Long-Term Debt
Total long-term debt, excluding capital leases, at December31, 2008, was $5,742. The companys long-term debt outstanding at year-end 2008 and 2007 was as follows:
At December 31
2008 2007
3.375% notes due 2008 $ $ 749
5.5% notes due 2009 400 405
7.327% amortizing notes due 20141 194 213
8.625% debentures due 2032 147 161
8.625% debentures due 2031 108 108
7.5% debentures due 2043 85 85
8% debentures due 2032 74 81
9.75% debentures due 2020 56 57
8.875% debentures due 2021 40 46
8.625% debentures due 2010 30 30
3.85% notes due 2008 30
Medium-term notes, maturing from 2021 to 2038 (6.2%)2 38 64
Fixed interest rate notes, maturing 2011 (9.378%)2 21 27
Other foreign currency obligations (0.5%)2 13 17
Other long-term debt (9.1%)2 15 59
Total including debt due within one year 1,221 2,132
Debt due within one year (429 ) (850 )
Reclassified from short-term debt 4,950 4,382
Total long-term debt $ 5,742 $ 5,664
1 Guarantee of ESOP debt.
2 Weighted-average interest rate at December31, 2008.
Long-term debt of $1,221 matures as follows: 2009 $429; 2010 $64; 2011 $47; 2012 $33; 2013 $41; and after 2013 $607.
In 2008, debt totaling $822 matured, including $749 of Chevron Canada Funding Company notes. In 2007, $2,000 of Chevron Canada Funding Company bonds matured. The company also redeemed early $874 of Texaco Capital Inc. bonds, at an after-tax loss of approximately $175. |
| New Accounting Standards |
Note 19
New Accounting Standards
FASB Statement No.141 (revised 2007), Business Combinations (FAS 141-R) In December2007, the FASB issued FAS 141-R, which became effective for business combination transactions having an acquisition date on or after January1, 2009. This standard requires the acquiring entity in a business combination to recognize the assets acquired, the liabilities assumed, and any noncontrolling interest in the acquiree at the acquisition date to be measured at their respective fair values. It also requires acquisition-related costs, as well as restructuring costs the acquirer expects to incur for which it is not obligated at acquisition date, to be recorded against income rather than included in purchase-price determination. Finally, the standard requires recognition of contingent arrangements at their acquisition-date fair values, with subsequent changes in fair value generally reflected in income.
FASB Staff Position FAS 141(R)-a Accounting for Assets Acquired and Liabilities Assumed in a Business Combination (FSP FAS 141(R)-a) In February 2009, the FASB approved for issuance FSP FAS 141(R)-a, which became effective for business combinations having an acquisition date on or after January1, 2009. This standard requires an asset or liability arising from a contingency in a business combination to be recognized at fair value if fair value can be reasonably determined. If it cannot be reasonably determined then the asset or liability will need to be recognized in accordance with FASB Statement No. 5, Accounting for Contingencies, and FASB Interpretation No. 14, Reasonable Estimation of the Amount of the Loss.
FASB Statement No.160, Noncontrolling Interests in Consolidated Financial Statements, an amendment of ARB No.51 (FAS 160) The FASB issued FAS 160 in December 2007, which became effective for the company January1, 2009, with retroactive adoption of the Standards presentation and disclosure requirements for existing minority interests. This standard requires ownership interests in subsidiaries held by parties other than the parent to be presented within the equity section of the Consolidated Balance Sheet but separate from the parents equity. It also requires the amount of consolidated net income attributable to the parent and the noncontrolling interest to be clearly identified and presented on the face of the Consolidated Statement of Income. Certain changes in a parents ownership interest are to be accounted for as equity transactions and when a subsidiary is deconsolidated, any noncontrolling equity investment in the former subsidiary is to be initially measured at fair value. Implementation of FAS 160 will not significantly change the presentation of the companys Consolidated Statement of Income or Consolidated Balance Sheet.
FASB Statement No.161, Disclosures about Derivative Instruments and Hedging Activities (FAS 161) In March 2008, the FASB issued FAS 161, which became effective for the company on January1, 2009. This standard amends and expands the disclosure requirements of FASB Statement No.133, Accounting for Derivative Instruments and Hedging Activities. FAS 161 requires disclosures related to |
| Accounting for Suspended Exploratory Wells |
Note 20
Accounting for Suspended Exploratory Wells
The company accounts for the cost of exploratory wells in accordance with FASB Statement No.19, Financial and Reporting by Oil and Gas Producing Companies (FAS 19), as amended by FASB Staff Position (FSP)FAS 19-1, Accounting for Suspended Well Costs, which provides that exploratory well costs continue to be capitalized after the completion of drilling when (a)the well has found a sufficient quantity of reserves to justify completion as a producing well and (b)the enterprise is making sufficient progress assessing the reserves and the economic and operating viability of the project. If either condition is not met or if an enterprise obtains information that raises substantial doubt about the economic or operational viability of the project, the exploratory well would be assumed to be impaired, and its costs, net of any salvage value, would be charged to expense. FAS 19 provides a number of indicators that can assist an entity to demonstrate sufficient progress is being made in assessing the reserves and economic viability of the project.
The following table indicates the changes to the companys suspended exploratory well costs for the three years ended December31, 2008:
2008 2007 2006
Beginning balance at January 1 $ 1,660 $ 1,239 $ 1,109
Additions to capitalized exploratory well costs pending the determination of proved reserves 643 486 446
Reclassifications to wells, facilities and equipment based on the determination of proved reserves (49 ) (23 ) (171 )
Capitalized exploratory well costs charged to expense (136 ) (42 ) (121 )
Other reductions* (24 )
Ending balance at December 31 $ 2,118 $ 1,660 $ 1,239
* Represent property sales and exchanges.
The following table provides an aging of capitalized well costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year since the completion of drilling.
At December 31
2008 2007 2006
Exploratory well costs capitalized for a period of one year or less $ 559 $ 449 $ 332
Exploratory well costs capitalized for a period greater than one year 1,559 1,211 907
Balance at December 31 $ 2,118 $ 1,660 $ 1,239
Number of projects with exploratory well costs that have been capitalized for a period greater than one year* 50 54 44
* Certain projects have multiple wells or fields or both.
Of the $1,559 of exploratory well costs capitalized for more than one year at December31, 2008, $874 (27 projects) is related to projects that had drilling activities under way or firmly planned for the near future. An additional $279 (four projects) is related to projects that had drilling activity during 2008. The $406 balance is related to 19 projects in areas requiring a major capital expenditure before production could begin and for which additional drilling efforts were no |
| Stock Options and Other Share-Based Compensation |
Note 21
Stock Options and Other Share-Based Compensation
Compensation expense for stock options for 2008, 2007 and 2006 was $168 ($109 after tax), $146 ($95 after tax) and $125 ($81 after tax), respectively. In addition, compensation expense for stock appreciation rights, performance units and restricted stock units was $132 ($86 after tax), $205 ($133 after tax) and $113 ($73 after tax) for 2008, 2007 and 2006, respectively. No significant stock-based compensation cost was capitalized at December31, 2008 and 2007.
Cash received in payment for option exercises under all share-based payment arrangements for 2008, 2007 and 2006 was $404, $445 and $444, respectively. Actual tax benefits realized for the tax deductions from option exercises were $103, $94 and $91 for 2008, 2007 and 2006, respectively.
Cash paid to settle performance units and stock appreciation rights was $136, $88 and $68 for 2008, 2007 and 2006, respectively.
Chevron Long-TermIncentive Plan (LTIP) Awards under the LTIP may take the form of, but are not limited to, stock options, restricted stock, restricted stock units, stock appreciation rights, performance units and nonstock grants. From April2004 through January2014, no more than 160 million shares may be issued under the LTIP, and no more than 64million of those shares may be in a form other than a stock option, stock appreciation right or award requiring full payment for shares by the award recipient.
Texaco Stock Incentive Plan (Texaco SIP)On the closing of the acquisition of Texaco in October 2001, outstanding options granted under the Texaco SIP were converted to Chevron options. These options, which have 10-year contractual lives extending into 2011, retained a provision for being restored. This provision enables a participant who exercises a stock option to receive new options equal to the number of shares exchanged or who has shares withheld to satisfy tax withholding obligations to receive new options equal to the number of shares exchanged or withheld. The restored options are fully exercisable six months after the date of grant, and the exercise price is the market value of the common stock on the day the restored option is granted. Beginning in 2007, restored options were granted under the LTIP. No further awards may be granted under the former Texaco plans.
Unocal Share-Based Plans (Unocal Plans)When Chevron acquired Unocal in August2005, outstanding stock options and stock appreciation rights granted under various Unocal Plans were exchanged for fully vested Chevron options and appreciation rights. These awards retained the same provisions as the original Unocal Plans. If not exercised, these awards will expire between early 2009 and early 2015.
The fair market values of stock options and stock appreciation rights granted in 2008, 2007 and 2006 were measured on the date of grant using the Black-Scholes option-pricing model, with the following weighted-average assumptions:
Year ended December 31
2008 2007 2006
Stock Options
Expected term in years1 6.1 6.3 6.4
Volatility2 22.0 % 22.0 % |
| Employee Benefit Plans |
Note 22
Employee Benefit Plans
The company has defined-benefit pension plans for many employees. The company typically prefunds defined-benefit plans as required by local regulations or in certain situations where prefunding provides economic advantages. In the United States, all qualified plans are subject to the Employee Retirement Income Security Act (ERISA)minimum funding standard. The company does not typically fund U.S. nonqualified pension plans that are not subject to funding requirements under laws and regulations because contributions to these pension plans may be less economic and investment returns may be less attractive than the companys other investment alternatives.
The company also sponsors other postretirement (OPEB)plans that provide medical and dental benefits, as well as life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and retirees share the costs. Medical coverage for Medicare-eligible retirees in the companys main U.S. medical plan is secondary to Medicare (including PartD), and the increase to the company contribution for retiree medical coverage is limited to no more than 4 percent per year. Certain life insurance benefits are paid by the company.
Effective December31, 2006, the company implemented the recognition and measurement provisions of Financial Accounting Standards Board (FASB)Statement No.158, Employers Accounting for Defined Benefit Pension and Other Postretirement Plans, an amendment of FASB Statements No.87, 88, 106 and 132(R), which requires the recognition of the overfunded or underfunded status of each of its defined benefit pension and OPEB as an asset or liability, with the offset to Accumulated other comprehensive loss.
The funded status of the companys pension and other postretirement benefit plans for 2008 and 2007 is on the following page:
Pension Benefits
2008 2007 Other Benefits
U.S. Intl. U.S. Intl. 2008 2007
Change in Benefit Obligation
Benefit obligation at January 1 $ 8,395 $ 4,633 $ 8,792 $ 4,207 $ 2,939 $ 3,257
Service cost 250 132 260 125 44 49
Interest cost 499 292 483 255 178 184
Plan participants contributions 9 7 152 122
Plan amendments 32 (301 ) 97
Curtailments (12 )
Actuarial gain (62 ) (104 ) (131 ) (40 ) (14 ) (413 )
Foreign currency exchange rate changes (858 ) 219 (28 ) 12
Benefits paid (955 ) (246 ) (708 ) (225 ) (340 ) (272 )
Special termination benefits 1
Benefit obligation at December 31 8,127 3,891 8,395 4,633 2,931 2,939
Change in Plan Assets
Fair value of plan assets |
| Other Contingencies and Commitments |
Note 23
Other Contingencies and Commitments
Income TaxesThe company calculates its income tax expense and liabilities quarterly. These liabilities generally are subject to audit and are not finalized with the individual taxing authorities until several years after the end of the annual period for which income taxes have been calculated. Refer to Note 16 beginning on page FS-45 for a discussion of the periods for which tax returns have been audited for the companys major tax jurisdictions and a discussion for all tax jurisdictions of the differences between the amount of tax benefits recognized in the financial statements and the amount taken or expected to be taken in a tax return. The company does not expect settlement of income tax liabilities associated with uncertain tax positions will have a material effect on its results of operations, consolidated financial position or liquidity.
GuaranteesThe company has issued a guarantee of approximately $600 associated with certain payments under a terminal use agreement entered into by a company affiliate. The terminal is expected to be operational by 2012. Over the approximate 16-year term of the guarantee, the maximum guarantee amount will reduce over time as certain fees are paid by the affiliate. There are numerous cross-indemnity agreements with the affiliate and the other partners to permit recovery of any amounts paid under the guarantee. Chevron carries no liability for its obligation under this guarantee.
IndemnificationsThe company provided certain indemnities of contingent liabilities of Equilon and Motiva to Shell and Saudi Refining, Inc., in connection with the February2002 sale of the companys interests in those investments. The company would be required to perform if the indemnified liabilities become actual losses. Were that to occur, the company could be required to make future payments up to $300. Through the end of 2008, the company paid $48 under these indemnities and continues to be obligated for possible additional indemnification payments in the future.
The company has also provided indemnities relating to contingent environmental liabilities related to assets originally contributed by Texaco to the Equilon and Motiva joint ventures and environmental conditions that existed prior to the formation of Equilon and Motiva or that occurred during the period of Texacos ownership interest in the joint ventures. In general, the environmental conditions or events that are subject to these indemnities must have arisen prior to December 2001. Claims must be asserted no later than February2009 for Equilon indemnities and no later than February2012 for Motiva indemnities. Under the terms of these indemnities, there is no maximum limit on the amount of potential future payments. In February 2009, Shell delivered a letter to the company purporting to preserve unmatured claims for certain Equilon indemnities. The letter itself provides no estimate of the ultimate claim amount, and management does not believe the letter provides a basis to estimate the amount, if any, of a range of loss or potential range of loss with respect to the Equilon or the Motiva indemnities. The compan |
| Asset Retirement Obligations |
Note 24
Asset Retirement Obligations
The company accounts for asset retirement obligations (ARO)in accordance with Financial Accounting Standards Board (FASB)Statement No.143, Accounting for Asset Retirement Obligations (FAS 143) and FASB Interpretation No.47, Accounting for Conditional Asset Retirement Obligations An Interpretation of FASB Statement No.143 (FIN 47). FAS 143 applies to the fair value of a liability for an ARO that is recorded when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. Obligations associated with the retirement of these assets require recognition in certain circumstances: (1)the present value of a liability and offsetting asset for an ARO, (2)the subsequent accretion of that liability and depreciation of the asset, and (3)the periodic review of the ARO liability estimates and discount rates. FIN 47 clarifies that the phrase conditional asset retirement obligation, as used in FAS 143, refers to a legal obligation to perform asset retirement activity for which the timing and/or method of settlement are conditional on a future event that may or may not be within the control of the company. The obligation to perform the asset retirement activity is unconditional even though uncertainty exists about the timing and/or method of settlement. Uncertainty about the timing and/or method of settlement of a conditional ARO should be factored into the measurement of the liability when sufficient information exists. FAS 143 acknowledges that in some cases, sufficient information may not be available to reasonably estimate the fair value of an ARO. FIN 47 also clarifies when an entity would have sufficient information to reasonably estimate the fair value of an ARO.
FAS 143 and FIN 47 primarily affect the companys accounting for crude oil and natural gas producing assets. No significant AROs associated with any legal obligations to retire refining, marketing and transportation (downstream)and chemical long-lived assets have been recognized, as indeterminate settlement dates for the asset retirements prevent estimation of the fair value of the associated ARO. The company performs periodic reviews of its downstream and chemical long-lived assets for any changes in facts and circumstances that might require recognition of a retirement obligation.
The following table indicates the changes to the companys before-tax asset retirement obligations in 2008, 2007 and 2006:
2008 2007 2006
Balance at January 1 $ 8,253 $ 5,773 $ 4,304
Liabilities incurred 308 178 153
Liabilities settled (973 ) (818 ) (387 )
Accretion expense 430 399 * 275
Revisions in estimated cash flows 1,377 2,721 1,428
Balance at December 31 $ 9,395 $ 8,253 $ 5,773
*Includes $175 for revision to the ARO liability retained on properties that had been sold.
In the table above, the amounts associated with Revisions in estimated cash flows reflect increasing |
Other
Financial Information |
Note 25
Other Financial Information
Net income in 2008 included gains of approximately $1,200 relating to the sale of nonstrategic properties. Of this amount, approximately $1,000 related to upstream assets. Net income in 2007 included gains of approximately $2,000 relating to the sale of nonstrategic properties. Of this amount, approximately $1,100 related to downstream assets and $680 related to the sale of the companys investment in Dynegy Inc.
Other financial information is as follows:
Year ended December 31
2008 2007 2006
Total financing interest and debt costs $ 256 $ 468 $ 608
Less: Capitalized interest 256 302 157
Interest and debt expense $ $ 166 $ 451
Research and development expenses $ 835 $ 562 $ 468
Foreign currency effects* $ 862 $ (352 ) $ (219 )
* Includes $420, $18 and $15 in 2008, 2007 and 2006, respectively, for the companys share of equity affiliates foreign currency effects.
The excess of replacement cost over the carrying value of inventories for which the Last-In, First-Out (LIFO)method is used was $9,368 and $6,958 at December31, 2008 and 2007, respectively. Replacement cost is generally based on average acquisition costs for the year. LIFO profits of $210, $113 and $82 were included in net income for the years 2008, 2007 and 2006, respectively. |
| Assets Held for Sale |
Note 26
Assets Held for Sale
At December31, 2008, the company classified $252 of net properties, plant and equipment as Assets held for sale on the Consolidated Balance Sheet. Assets in this category related to groups of service stations, aviation facilities, lubricants blending plants, and commercial and industrial fuels business. These assets are anticipated to be sold in 2009. |
Earnings
Per Share |
Note 27
Earnings Per Share
Basic earnings per share (EPS)is based upon net income less preferred stock dividend requirements and includes the effects of deferrals of salary and other compensation awards that are invested in Chevron stock units by certain officers and employees of the company and the companys share of stock transactions of affiliates, which, under the applicable accounting rules, may be recorded directly to the companys retained earnings instead of net income. Diluted EPS includes the effects of these items as well as the dilutive effects of outstanding stock options awarded under the companys stock option programs (refer to Note 21, Stock Options and Other Share-Based Compensation beginning on page FS-49). The table below sets forth the computation of basic and diluted EPS:
Year ended December 31
2008 2007 2006
Basic EPS Calculation
Income from operations $ 23,931 $ 18,688 $ 17,138
Add: Dividend equivalents paid on stock units 1
Net income available to common stockholders Basic $ 23,931 $ 18,688 $ 17,139
Weighted-average number of common shares outstanding 2,037 2,117 2,185
Add: Deferred awards held as stock units 1 1 1
Total weighted-average number of common shares outstanding 2,038 2,118 2,186
Per share of common stock
Net income Basic $ 11.74 $ 8.83 $ 7.84
Diluted EPS Calculation
Income from operations $ 23,931 $ 18,688 $ 17,138
Add: Dividend equivalents paid on stock units 1
Add: Dilutive effects of employee stock-based awards
Net income available to common stockholders Diluted $ 23,931 $ 18,688 $ 17,139
Weighted-average number of common shares outstanding 2,037 2,117 2,185
Add: Deferred awards held as stock units 1 1 1
Add: Dilutive effect of employee stock-based awards 12 14 11
Total weighted-average number of common shares outstanding 2,050 2,132 2,197
Per share of common stock
Net income Diluted $ 11.67 $ 8.77 $ 7.80
|
