Document and Company Informatio
Document and Company Information (USD $) | ||
9 Months Ended
Sep. 30, 2009 | Jun. 30, 2008
| |
Document and Company Information [Abstract] | ||
Entity Registrant Name | CHEVRON CORP | |
Entity Central Index Key | 0000093410 | |
Document Type | 10-Q | |
Document Period End Date | 2009-09-30 | |
Amendment Flag | false | |
Current Fiscal Year End Date | --12-31 | |
Entity Well-known Seasoned Issuer | Yes | |
Entity Voluntary Filers | No | |
Entity Current Reporting Status | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Public Float | $203,659,751,369 | |
Entity Common Stock, Shares Outstanding | 2,006,267,842 |
Consolidated Statement of Incom
Consolidated Statement of Income (Unaudited) (USD $) | ||||
In Millions, except Share data in Thousands | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Revenues and Other Income | ||||
Sales and other operating revenues * | $45,180 | $76,192 | $119,814 | $221,813 |
Income from equity affiliates | 1,072 | 1,673 | 2,418 | 4,480 |
Other income | 373 | 1,002 | 728 | 1,509 |
Total Revenues and Other Income | 46,625 | 78,867 | 122,960 | 227,802 |
Costs and Other Deductions | ||||
Purchased crude oil and products | 26,969 | 49,238 | 71,047 | 147,822 |
Operating expenses | 4,403 | 5,676 | 12,958 | 15,379 |
Selling, general and administrative expenses | 1,177 | 1,278 | 3,197 | 4,264 |
Exploration expenses | 242 | 271 | 1,061 | 831 |
Depreciation, depletion and amortization | 2,988 | 2,449 | 8,954 | 6,939 |
Taxes other than on income * | 4,644 | 5,614 | 13,008 | 16,756 |
Interest and debt expense | 14 | 0 | 28 | 0 |
Total Costs and Other Deductions | 40,437 | 64,526 | 110,253 | 191,991 |
Income Before Income Tax Expense | 6,188 | 14,341 | 12,707 | 35,811 |
Income Tax Expense | 2,342 | 6,416 | 5,246 | 16,681 |
Net Income | 3,846 | 7,925 | 7,461 | 19,130 |
Less: Net income attributable to noncontrolling interests | 15 | 32 | 48 | 94 |
Net Income Attributable to Chevron Corporation | 3,831 | 7,893 | 7,413 | 19,036 |
Per Share of Common Stock: | ||||
Net Income Attributable to Chevron Corporation - Basic | 1.92 | 3.88 | 3.72 | 9.29 |
Net Income Attributable to Chevron Corporation - Diluted | 1.92 | 3.85 | 3.71 | 9.23 |
Dividends | 0.68 | 0.65 | 1.98 | 1.88 |
Weighted Average Number of Shares Outstanding (000s) | ||||
Basic | 1,992,452 | 2,032,433 | 1,991,733 | 2,049,812 |
Diluted | 2,000,586 | 2,044,616 | 1,999,925 | 2,063,149 |
* Includes excise, value-added and similar taxes: | $2,079 | $2,577 | $6,023 | $7,766 |
Consolidated Statement of Compr
Consolidated Statement of Comprehensive Income (Unaudited) (USD $) | ||||
In Millions | 3 Months Ended
Sep. 30, 2009 | 3 Months Ended
Sep. 30, 2008 | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Net Income | $3,846 | $7,925 | $7,461 | $19,130 |
Currency translation adjustment | 31 | (67) | 44 | (84) |
Unrealized holding gain (loss) on securities: | ||||
Net gain (loss) arising during period | 8 | (13) | 3 | (5) |
Derivatives: | ||||
Net derivatives gain (loss) on hedge transactions | 7 | 126 | (65) | 74 |
Reclassification to net income of net realized (gain) loss | (9) | 4 | (25) | 15 |
Income taxes on derivatives transactions | 1 | (44) | 31 | (32) |
Total | (1) | 86 | (59) | 57 |
Actuarial loss: | ||||
Amortization to net income of net actuarial loss | 136 | 62 | 451 | 187 |
Prior service cost: | ||||
Amortization to net income of net prior service credits | (15) | (16) | (49) | (47) |
Defined benefit plans sponsored by equity affiliates | 5 | 7 | 10 | 22 |
Income taxes on defined benefit plans | (45) | (17) | (152) | (65) |
Total | 81 | 36 | 260 | 97 |
Other Comprehensive Gain, Net of Tax | 119 | 42 | 248 | 65 |
Comprehensive Income | 3,965 | 7,967 | 7,709 | 19,195 |
Comprehensive income attributable to noncontrolling interests | (15) | (32) | (48) | (94) |
Comprehensive Income Attributable to Chevron Corporation | $3,950 | $7,935 | $7,661 | $19,101 |
Consolidated Balance Sheet (Una
Consolidated Balance Sheet (Unaudited) (USD $) | ||
In Millions | Sep. 30, 2009
| Dec. 31, 2008
|
ASSETS | ||
Cash and cash equivalents | $7,568 | $9,347 |
Marketable securities | 121 | 213 |
Accounts and notes receivable, net | 17,070 | 15,856 |
Inventories: | ||
Crude oil and petroleum products | 4,652 | 5,175 |
Chemicals | 333 | 459 |
Materials, supplies and other | 1,338 | 1,220 |
Total inventories | 6,323 | 6,854 |
Prepaid expenses and other current assets | 4,459 | 4,200 |
Total Current Assets | 35,541 | 36,470 |
Long-term receivables, net | 2,394 | 2,413 |
Investments and advances | 21,564 | 20,920 |
Properties, plant and equipment, at cost | 183,547 | 173,299 |
Less: Accumulated depreciation, depletion and amortization | 89,290 | 81,519 |
Properties, plant and equipment, net | 94,257 | 91,780 |
Deferred charges and other assets | 3,870 | 4,711 |
Goodwill | 4,619 | 4,619 |
Assets held for sale | 316 | 252 |
Total Assets | 162,561 | 161,165 |
LIABILITIES AND EQUITY | ||
Short-term debt | 240 | 2,818 |
Accounts payable | 15,715 | 16,580 |
Accrued liabilities | 5,501 | 8,077 |
Federal and other taxes on income | 2,562 | 3,079 |
Other taxes payable | 1,375 | 1,469 |
Total Current Liabilities | 25,393 | 32,023 |
Long-term debt | 9,973 | 5,742 |
Capital lease obligations | 329 | 341 |
Deferred credits and other noncurrent obligations | 17,497 | 17,678 |
Noncurrent deferred income taxes | 11,738 | 11,539 |
Reserves for employee benefit plans | 6,409 | 6,725 |
Total Liabilities | 71,339 | 74,048 |
Preferred stock (authorized 100,000,000 shares, $1.00 par value, none issued) | 0 | 0 |
Common stock (authorized 6,000,000,000 shares, $.75 par value, 2,442,676,580 shares issued at September 30, 2009, and December 31, 2008) | 1,832 | 1,832 |
Capital in excess of par value | 14,584 | 14,448 |
Retained earnings | 104,575 | 101,102 |
Accumulated other comprehensive loss | (3,676) | (3,924) |
Deferred compensation and benefit plan trust | (414) | (434) |
Treasury stock, at cost (436,408,738 and 438,444,795 shares at September 30, 2009, and December 31, 2008, respectively) | (26,255) | (26,376) |
Total Chevron Corporation Stockholders' Equity | 90,646 | 86,648 |
Noncontrolling interests | 576 | 469 |
Total Equity | 91,222 | 87,117 |
Total Liabilities and Equity | $162,561 | $161,165 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) (Unaudited) (USD $) | ||
Sep. 30, 2009
| Dec. 31, 2008
| |
LIABILITIES AND EQUITY | ||
Preferred stock, shares authorized | 100,000,000 | 100,000,000 |
Preferred stock, par value | $1 | $1 |
Preferred stock, shares issued | 0 | 0 |
Common stock, shares authorized | 6,000,000,000 | 6,000,000,000 |
Common stock, par value | 0.75 | 0.75 |
Common stock, shares issued | 2,442,676,580 | 2,442,676,580 |
Treasury stock, shares | 436,408,738 | 438,444,795 |
Consolidated Statement of Cash
Consolidated Statement of Cash Flows (Unaudited) (USD $) | ||
In Millions | 9 Months Ended
Sep. 30, 2009 | 9 Months Ended
Sep. 30, 2008 |
Operating Activities | ||
Net Income Attributable to Chevron Corporation | $7,413 | $19,036 |
Adjustments | ||
Depreciation, depletion and amortization | 8,954 | 6,939 |
Dry hole expense | 481 | 287 |
Distributions less than income from equity affiliates | (510) | (278) |
Net before-tax gains on asset retirements and sales | (1,083) | (757) |
Net foreign currency effects | 481 | (74) |
Deferred income tax provision | 335 | 37 |
Net increase in operating working capital | (2,993) | (713) |
Net income attributable to noncontrolling interests | 48 | 94 |
Increase in long-term receivables | (288) | (221) |
Decrease (increase) in other deferred charges | 131 | (70) |
Cash contributions to employee pension plans | (860) | (169) |
Other | 244 | 313 |
Net Cash Provided by Operating Activities | 12,353 | 24,424 |
Investing Activities | ||
Capital expenditures | (14,488) | (13,632) |
Proceeds and deposits related to asset sales | 2,132 | 1,384 |
Net sales of marketable securities | 113 | 351 |
Repayment of loans by equity affiliates | 167 | 169 |
Net sales of other short-term investments | 153 | 359 |
Net Cash Used for Investing Activities | (11,923) | (11,369) |
Financing Activities | ||
Net (payments) borrowings of short-term obligations | (3,258) | 661 |
Proceeds from issuance of long-term debt | 5,339 | 0 |
Repayments of long-term debt and other financing obligations | (461) | (926) |
Cash dividends | (3,945) | (3,861) |
Distributions to noncontrolling interests | (37) | (88) |
Net sales (purchases) of treasury shares | 86 | (5,530) |
Net Cash Used for Financing Activities | (2,276) | (9,744) |
Effect of Exchange Rate Changes on Cash and Cash Equivalents | 67 | (37) |
Net Change in Cash and Cash Equivalents | (1,779) | 3,274 |
Cash and Cash Equivalents at January 1 | 9,347 | 7,362 |
Cash and Cash Equivalents at September 30 | $7,568 | $10,636 |
Interim Financial Statements
Interim Financial Statements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Interim Financial Statements [Abstract] | |
Interim Financial Statements | Note1. Interim Financial Statements The accompanying consolidated financial statements of Chevron Corporation and its subsidiaries (the company) have not been audited by an independent registered public accounting firm. In the opinion of the companys management, the interim data include all adjustments necessary for a fair statement of the results for the interim periods. These adjustments were of a normal recurring nature. The results for the three- and nine-month periods ended September30, 2009, are not necessarily indicative of future financial results. The term earnings is defined as net income attributable to Chevron Corporation. Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form10-Q. Therefore, these financial statements should be read in conjunction with the companys 2008 Annual Report on Form10-K. Effective with the quarter ending September30, 2009, the company implemented the Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) system. The ASC supersedes literature of the FASB, Emerging Issues Task Force and other sources. The ASC did not change U.S.generally accepted accounting principles. Refer also to Note15 beginning on page21 for discussion of ASC. Events subsequent to September30, 2009, were evaluated until the time of the Form10-Q filing with the Securities and Exchange Commission on November5, 2009. Earnings for the third quarter 2009 included $400million of after-tax gains from asset sales and tax items related to an upstream project in Australia. Earnings for the first nine months of 2009 also included $540million of after-tax gains reported in the first half of the year on sales of marketing businesses outside the United States. Earnings for the third quarter and nine months of 2008 included approximately $400million of expenses associated with damage to upstream facilities in the U.S.Gulf of Mexico caused by hurricanes. Largely offsetting the impact of these expenses were gains of about $350million on U.S.upstream asset sales. |
Noncontrolling Interests
Noncontrolling Interests | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Noncontrolling Interests [Abstract] | |
Noncontrolling Interests | Note2. Noncontrolling Interests The company adopted the accounting standard for noncontrolling interests in consolidated financial statements effective January1, 2009, and retroactive to the earliest period presented. Ownership interests in the companys subsidiaries held by parties other than the parent are presented separately from the parents equity on the Consolidated Balance Sheet. The amount of consolidated net income attributable to the parent and the noncontrolling interests are both presented on the face of the Consolidated Statement of Income. Activity for the equity attributable to noncontrolling interests for the first nine months of 2009 and 2008 is as follows: 2009 2008 Chevron Corporation Noncontrolling Total Chevron Corporation Noncontrolling Total Stockholders Equity Interest Equity Stockholders Equity Interest Equity (Millions of dollars) Balance at January 1 $86,648 $469 $87,117 $77,088 $204 $77,292 Net income 7,413 48 7,461 19,036 94 19,130 Dividends (3,945 ) (3,945 ) (3,861 ) (3,861 ) Distributions to noncontrolling interests (37 ) (37 ) (88 ) (88 ) Treasury shares, net 121 121 (5,523 ) (5,523 ) Other changes, net* 409 96 505 214 1 215 Balance at September30 $90,646 $576 $91,222 $86,954 $211 $87,165 * Includes components of comprehensive income, which are disclosed separately in the Consolidated Statement of Comprehensive Income. |
Information Relating to the Con
Information Relating to the Consolidated Statement of Cash Flows | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Information Relating to Consolidated Statement of Cash Flows [Abstract] | |
Information Relating to the Consolidated Statement of Cash Flows | Note3. Information Relating to the Consolidated Statement of Cash Flows The Net increase in operating working capital was composed of the following operating changes: Nine Months Ended September30 2009 2008 (Millions of dollars) Increase in accounts and notes receivable $ (877 ) $ (2,559 ) Decrease (increase) in inventories 356 (979 ) Increase in prepaid expenses and other current assets (216 ) (461 ) (Decrease) increase in accounts payable and accrued liabilities (1,597 ) 1,507 (Decrease) increase in income and other taxes payable (659 ) 1,779 Net increase in operating working capital $ (2,993 ) $ (713 ) The Net increase in operating working capital includes reductions of $11million and $102million for excess income tax benefits associated with stock options exercised during the nine months ended September30, 2009, and 2008, respectively. These amounts are offset by an equal amount in Net sales (purchases) of treasury shares. Net Cash Provided by Operating Activities included the following cash payments for interest on debt and for income taxes: Nine Months Ended September30 2009 2008 (Millions of dollars) Interest on debt (net of capitalized interest) $ 11 $ Income taxes 4,825 14,298 The Net sales of marketable securities consisted of the following gross amounts: Nine Months Ended September30 2009 2008 (Millions of dollars) Marketable securities purchased $ (24 ) $ (3,232 ) Marketable securities sold 137 3,583 Net sales of marketable securities $ 113 $ 351 The Net sales (purchases) of treasury shares represents the cost of common shares acquired less the cost of shares issued for share-based compensation plans. Net sales totaled $86million in the first nine months of 2009 and net purchases totaled $5.5billion in the 2008 period. Purchases in the 2008 period were under the companys stock repurchase program initiated in September 2007. No purchases were made under the program in the 2009 period. The major components of Capital expenditures and the reconciliation of this amount to the capital and exploratory expenditures, including equity affiliates, are as follows: Nine Months Ended September30 2009 2008 (Millions of dollars) Additions to properties, plant and equipment $ 13,542 $ 12,812 Additions to investments 793 715 Current-year dry-hole expenditures 399 239 Payments for other liabilities and assets, net (246 ) (134 ) Capital expenditures 14,488 |
Operating Segments and Geograph
Operating Segments and Geographic Data | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Operating Segments and Geographic Data [Abstract] | |
Operating Segments and Geographic Data | Note4. 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 the accounting standards. 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 the accounting standards). 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 the accounting standards 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 directly accountable 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 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 Earnings The 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 segments are billed for the direct use of corporate services. Nonbillable costs remain at the corporate level in All Other. Earnings by major operating a |
Summarized Financial Data Chevr
Summarized Financial Data Chevron U.S.A. Inc. | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Summarized Financial Data Of Subsidiary One [Abstract] | |
Summarized Financial Data - Chevron U.S.A. Inc. | Note5. 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 refining, marketing, and 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, 2008. However, the financial information below may not reflect the financial position and operating results in the future or the historical results in the period presented if the reorganization actually had occurred on that date. The summarized financial information for CUSA and its consolidated subsidiaries is as follows: Nine Months Ended September30 2009 2008 (Millions of dollars) Sales and other operating revenues $ 86,522 $ 166,627 Costs and other deductions 85,461 159,855 Net income attributable to Chevron U.S.A. Inc. 852 4,636 At September30 At December31 2009 2008 (Millions of dollars) Current assets $32,975 $32,760 Other assets 32,358 31,806 Current liabilities 13,806 14,322 Other liabilities 14,482 14,049 Total Chevron U.S.A. Inc. net equity $37,045 $36,195 Memo: Total debt $6,985 $6,813 The amount for the nine months ended September30, 2008, for Net income attributable to Chevron U.S.A. Inc and the balances at December31, 2008, for Other liabilities and Total Chevron U.S.A. Inc. net equity have been adjusted by immaterial amounts associated with the allocation of income-tax liabilities among Chevron Corporation subsidiaries. |
1_Summarized Financial Data Che
Summarized Financial Data Chevron Transport Corporation | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Summarized Financial Data Of Subsidairy Two [Abstract] | |
Summarized Financial Data - Chevron Transport Corporation | Note6. Summarized Financial Data Chevron Transport Corporation Chevron Transport Corporation Limited (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 by 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 as follows: Three Months Ended Nine Months Ended September30 September30 2009 2008 2009 2008 (Millions of dollars) (Millions of dollars) Sales and other operating revenues $ 153 $ 294 $ 492 $ 795 Costs and other deductions 186 269 565 722 Net (loss) income attributable to Chevron Transport Corporation (34 ) 25 (73 ) 115 At September30 At December31 2009 2008 (Millions of dollars) Current assets $420 $482 Other assets 169 172 Current liabilities 104 98 Other liabilities 89 88 Total Chevron Transport Corporation net equity $396 $468 There were no restrictions on CTCs ability to pay dividends or make loans or advances at September30, 2009. |
Income Taxes
Income Taxes | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Income Taxes [Abstract] | |
Income Taxes | Note7. Income Taxes Taxes on income for the third quarter and first nine months of 2009 were $2.3billion and $5.2billion, respectively, compared with $6.4billion and $16.7billion for the corresponding periods in 2008. The associated effective tax rates (calculated as the amount of Income Tax Expense divided by Income Before Income Tax Expense) for the third quarters of 2009 and 2008 were 38percent and 45percent, respectively. For the comparative nine-month periods, the effective tax rates were 41percent and 47percent, respectively. The decline in the effective tax rates between the quarterly and nine-month periods was generally associated with the same factors. These factors included the effect in 2009 of relatively low tax rates on asset sales and deferred-tax benefits, both related to an international upstream project. In addition, a greater proportion of before-tax income was earned in 2009 by equity affiliates than in 2008. (Equity-affiliate income is reported as a single amount on an after-tax basis on the Consolidated Statement of Income.) |
Employee Benefits
Employee Benefits | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Employee Benefits [Abstract] | |
Employee Benefits | Note8. Employee Benefits Chevron 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 pre-funding provides economic advantages. In the United States, this includes all qualified plans subject to the Employee Retirement Income Security Act of 1974 (ERISA) minimum funding standard. The company does not typically fundU.S.nonqualified pension plans that are not subject to funding requirements under applicable 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 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 the 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 4percent each year. Certain life insurance benefits are paid by the company. The components of net periodic benefit costs for 2009 and 2008 are as follows: Three Months Ended Nine Months Ended September30 September30 2009 2008 2009 2008 (Millions of dollars) (Millions of dollars) Pension Benefits United States Service cost $ 66 $ 63 $ 199 $ 188 Interest cost 121 125 361 374 Expected return on plan assets (99 ) (149 ) (296 ) (445 ) Amortization of prior-service credits (1 ) (1 ) (5 ) (5 ) Amortization of actuarial losses 74 14 223 44 Settlement losses 25 19 126 58 Total United States 186 71 608 214 International Service cost 31 34 90 102 Interest cost 76 81 215 224 Expected return on plan assets (52 ) (76 ) (148 ) (209 ) Amortization of prior-service costs 6 6 17 19 Amortization of actuarial losses 30 19 81 56 Termination costs 1 Total International 91 64 255 193 Net Periodic Pension Benefit Costs $ 277 $ 135 |
Accounting for Suspended Explor
Accounting for Suspended Exploratory Wells | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Accounting for Suspended Exploratory Wells [Abstract] | |
Accounting for Suspended Exploratory Wells | Note9. Accounting for Suspended Exploratory Wells Accounting standards for the cost of exploratory wells provide that an exploratory well continues 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 the company 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. The companys capitalized cost of suspended wells at September30, 2009, was $2.3billion, an increase of $173million from year-end 2008. For the category of exploratory well costs at year-end 2008 that were suspended more than one year, a total of $76million was expensed in the first nine months of 2009. |
Litigation
Litigation | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Litigation [Abstract] | |
Litigation | Note10. Litigation MTBE Chevron and many other companies in the petroleum industry have used methyl tertiary butyl ether (MTBE) as a gasoline additive. Chevron is a party to 50 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 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. Ecuador Chevron is a defendant in a civil lawsuit before the Superior Court of Nueva Loja in Lago Agrio, Ecuador, brought in May 2003 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 remediation program at a cost of $40million. After certifying that the sites were properly remediated, the government granted Texpet and all related corporate entities a full release from any and all environmental liability arising from the consortium operations. Based on the history described above, Chevron believes that this lawsuit lacks legal or factual merit. As to matters of law, the company believes first, that the court lacks jurisdiction over Chevron; second, that the law under which plaintiffs bring the action, enacted in 1999, cannot be applied retroactively to Chevron; third, that the claims are barred by the statute of limitations in Ecuador; and, fourth, that the lawsuit is also barred by the releases from liability previously given to Texpet by the Republic of Ecuador and Petroecuador. With regard to the facts, the company believes that the evidence confirms that Texpets remediation was properly conducted and that the remaining environmental damage reflects Petroecuadors failure to timely fulfill its legal obligations and Petroecuadors further conduct since assuming full control over the operations. In April 2 |
Other Contingencies and Commitm
Other Contingencies and Commitments | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Other Contingencies and Commitments [Abstract] | |
Other Contingencies and Commitments | Note11. Other Contingencies and Commitments Guarantees The company and its subsidiaries have certain other contingent liabilities with respect to guarantees, direct or indirect, of debt of affiliated companies or third parties. Under the terms of the guarantee arrangements, generally the company would be required to perform should the affiliated company or third party fail to fulfill its obligations under the arrangements. In some cases, the guarantee arrangements may have recourse provisions that would enable the company to recover any payments made under the terms of the guarantees from assets provided as collateral. Off-Balance-Sheet Obligations The company and its subsidiaries have certain other contractual obligations relating to long-term unconditional purchase obligations and commitments, including throughput and take-or-pay agreements, some of which relate to suppliers financing arrangements. The agreements typically provide goods and services, such as pipeline, storage and regasification capacity, drilling rigs, utilities and petroleum products, to be used or sold in the ordinary course of the companys business. Indemnifications The company provided certain indemnities of contingent liabilities of Equilon and Motiva to Shell and Saudi Refining, Inc., in connection with the February 2002 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 $300million. Through the end of September 2009, the company paid $48million 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 had to be asserted by February 2009 for Equilon indemnities and must be asserted no later than February 2012 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 or any other information 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 company posts no assets as collateral and has made no payments under the indemnities. The amounts payable for the indemnities described on page17 are to be net of amounts recovered from insurance carriers and others and net of liabilities recorded by Equilon or Moti |
Fair Value Measurements
Fair Value Measurements | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Fair Value Measurements [Abstract] | |
Fair Value Measurements | Note12. Fair Value Measurements Accounting standards on fair-value measurement establish a framework for measuring fair value and stipulate disclosures about fair-value measurements. The standards apply to recurring and nonrecurring financial and nonfinancial assets and liabilities that require or permit fair-value measurements. A new accounting standard became effective for Chevron on January1, 2008, for all financial assets and liabilities and recurring nonfinancial assets and liabilities. On January1, 2009, the standard became effective for nonrecurring nonfinancial assets and liabilities. Among the required disclosures is the 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: Level1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. For the company, Level1 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. Level2: Inputs other than Level1 that are observable, either directly or indirectly. For the company, Level2 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. Level3: Unobservable inputs. The company does not use Level3 inputs for any of its recurring fair-value measurements. Level3 inputs may be required for the determination of fair value associated with certain nonrecurring measurements of nonfinancial assets and liabilities. In the third quarter the company used Level3 inputs to determine the fair value of nonrecurring nonfinancial assets. The fair value hierarchy for recurring assets and liabilities measured at fair value at September30, 2009, is as follows: Assets and Liabilities Measured at Fair Value on a Recurring Basis Prices in Active Other Markets for Observable Unobservable At September30 Identical Assets Inputs Inputs 2009 (Level 1) (Level 2) (Level 3) (Millions of dollars) Marketable Securities $121 $121 $ $ Derivatives 103 10 93 Total Recurring Assets at Fair Value $224 $131 $93 $ Derivatives $131 $54 $77 $ Total Recurring Liabilities at Fair Value $131 $54 $77 $ Marketable Securities The company calculates fair value for its marketable securities based on quoted market prices for identical assets and liabilities. The fair values reflect the cash that would have been received if the instruments were sold at September30, 2009. Marketable secur |
Derivative Instruments and Hedg
Derivative Instruments and Hedging Activities | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Derivative Instruments and Hedging Activities [Abstract] | |
Derivative Instruments and Hedging Activities | Note13. Derivative Instruments and Hedging Activities Accounting standards for the disclosure of derivative instruments and hedging activities require a discussion of how and why the company uses derivative instruments, how derivative instruments and related hedged items are accounted for, and how derivative instruments affect the companys financial position, financial performance and cash flows. The companys derivative instruments principally include crude-oil, natural-gas and refined-product futures, swaps, options and forward contracts. None of the companys derivative instruments is designated as a hedging instrument, although certain of the companys affiliates make such designation. The companys derivatives are not material to the companys financial position, financial performance or cash flows. The company believes it has no material market or credit risks to its operations, financial position or liquidity as a result of its commodities and other derivatives activities. Derivative instruments measured at fair value at September30, 2009, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are presented in the following tables: Consolidated Balance Sheet: Fair Value of Derivatives not Designated as Hedging Instruments Asset Derivatives Liability Derivatives Fair Value Fair Value (Millions of Dollars) Type of Balance Sheet At September30 At December31 Balance Sheet At September30 At December31 Derivative Contract Classification 2009 2008 Classification 2009 2008 Foreign Exchange Accounts and notes receivable, net $ $5 Accrued liabilities $ $89 Commodity Accounts and notes receivable, net 94 764 Accounts payable 115 344 Commodity Long-term receivables, net 9 30 Deferred credits and other noncurrent obligations 16 83 $103 $799 $131 $516 Consolidated Statement of Income: The Effect of Derivatives not Designated as Hedging Instruments Gain/(Loss) Gain/(Loss) Three Months Ended Nine Months Ended September30 September30 2009 2008 2009 2008 Type of Derivative Contract Statement of Income Classification (Millions of dollars) (Millions of dollars) Foreign Exchange Other income $ $ (89 ) $ 85 $ (91 ) Commodity Sales and other operating revenues 31 568 (63 ) 131 Commodity Purchased crude oil and products (18 ) 555 (295 ) (182 ) Commodity |
Assets Held For Sale
Assets Held For Sale | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
Assets Held For Sale [Abstract] | |
Assets Held For Sale | Note14. Assets Held For Sale At September30, 2009, the company classified $316million of net properties, plant and equipment as Assets held for sale on the Consolidated Balance Sheet. These assets are associated with upstream, downstream and mining businesses and are expected to be sold before the end of 2009. |
New Accounting Standards
New Accounting Standards | |
9 Months Ended
Sep. 30, 2009 USD / shares | |
New Accounting Standards [Abstract] | |
New Accounting Standards | Note15. New Accounting Standards In June 2009, the FASB issued an accounting standard for transfers of financial assets, which will become effective for the company on January1, 2010. The standard changes how companies account for transfers of financial assets and eliminates the concept of qualifying special-purpose entities. Adoption of the guidance is not expected to have an impact on the companys results of operations, financial position or liquidity. In June 2009, the FASB issued an accounting standard for variable-interest entities (VIEs), which will become effective for the company January1, 2010. The standard requires the enterprise to qualitatively assess if it is the primary beneficiary of the VIE and, if so, the VIE must be consolidated. Adoption of the standard is not expected to have a material impact on the companys results of operations, financial position or liquidity. In June 2009, the FASB issued its Accounting Standards Codification (ASC) system, which became effective for the company in the quarter ending September30, 2009. This standard established the ASC as the single authoritative source of U.S.generally accepted accounting principles (GAAP) and superseded existing literature of the FASB, Emerging Issues Task Force, American Institute of CPAs and other sources. The ASC did not change GAAP but organized the literature into about 90 accounting Topics. Adoption of the ASC did not affect the companys accounting. |