CHEVRON CORP [CVX] Filings

10-Q 1 cvx-20220930.htm 10-Q cvx-20220930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-00368

Chevron Corporation

(Exact name of registrant as specified in its charter)

6001 Bollinger Canyon Road

Delaware

94-0890210

San Ramon,

California

94583-2324

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (925) 842-1000

NONE

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, par value $.75 per share

CVX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were 1,933,638,546 shares of the company’s common stock outstanding on September 30, 2022.

Table of Contents

TABLE OF CONTENTS


		Page No.
	Cautionary Statements Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995	2
PART I FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements —
	Consolidated Statement of Income for the Three and Nine Months Ended September 30, 2022 and 2021	3
	Consolidated Statement of Comprehensive Income for the Three and Nine Months Ended September 30, 2022 and 2021	4
	Consolidated Balance Sheet at September 30, 2022, and December 31, 2021	5
	Consolidated Statement of Cash Flows for the Nine Months Ended September 30, 2022 and 2021	6
	Consolidated Statement of Equity for the Three and Nine Months Ended September 30, 2022 and 2021	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	40
Item 4.	Controls and Procedures	40
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	40
Item 1A.	Risk Factors	40
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	41
Item 5.	Other Information	41
Item 6.	Exhibits	42
Signature		43

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CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION

FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This quarterly report on Form 10-Q of Chevron Corporation contains forward-looking statements relating to Chevron’s operations and energy transition plans that are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to government policies in the countries in which the company operates; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions; disruptions in the company’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic, market and political conditions, including the military conflict between Russia and Ukraine and the global response to such conflict; changing refining, marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates, particularly during the COVID-19 pandemic; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from pending or future litigation; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporate liquidity and access to debt markets; the receipt of required Board authorizations to implement capital allocation strategies, including future stock repurchase programs and dividend payments; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 20 through 25 of the company’s 2021 Annual Report on Form 10-K and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.

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PART I.

FINANCIAL INFORMATION

Item 1.Consolidated Financial Statements

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)


	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
	(Millions of dollars, except per-share amounts)
Revenues and Other Income
Sales and other operating revenues	$	63,508	$	42,552	$	181,194	$	109,745
Income (loss) from equity affiliates	2,410		1,647		6,962		4,000
Other income (loss)	726		511		1,623		591
Total Revenues and Other Income	66,644		44,710		189,779		114,336
Costs and Other Deductions
Purchased crude oil and products	38,090		23,834		110,742		62,031
Operating expenses	6,357		5,353		18,313		15,219
Selling, general and administrative expenses	1,028		657		2,858		2,743
Exploration expenses	116		158		521		357
Depreciation, depletion and amortization	4,201		4,304		11,555		13,112
Taxes other than on income	1,707		2,075		5,272		5,061
Interest and debt expense	128		174		393		557
Other components of net periodic benefit costs	208		100		259		602
Total Costs and Other Deductions	51,835		36,655		149,913		99,682
Income (Loss) Before Income Tax Expense	14,809		8,055		39,866		14,654
Income Tax Expense (Benefit)	3,571		1,940		10,636		4,047
Net Income (Loss)	11,238		6,115		29,230		10,607
Less: Net income (loss) attributable to noncontrolling interests	7		4		118		37
Net Income (Loss) Attributable to Chevron Corporation	$	11,231	$	6,111	$	29,112	$	10,570
Per Share of Common Stock
Net Income (Loss) Attributable to Chevron Corporation
- Basic	$	5.81	$	3.19	$	15.02	$	5.52
- Diluted	$	5.78	$	3.19	$	14.95	$	5.51
Weighted Average Number of Shares Outstanding (000s)
- Basic	1,932,238		1,918,006		1,938,524		1,916,174
- Diluted	1,940,002		1,921,095		1,947,201		1,919,666

See accompanying notes to consolidated financial statements.

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CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)


	Three Months Ended September 30				Nine Months Ended September 30
	2022		2021		2022		2021
	(Millions of dollars)
Net Income (Loss)	$	11,238	$	6,115	$	29,230	$	10,607
Currency translation adjustment	(49)		(15)		(97)		(31)
Unrealized holding gain (loss) on securities
Net gain (loss) arising during period	(3)		(3)		(3)		(1)
Derivatives
Net derivatives gain (loss) on hedge transactions	49		(4)		80		(6)
Reclassification to net income	(29)		2		(31)		2
Income taxes on derivatives transactions	(4)		1		(11)		1
Total	16		(1)		38		(3)
Defined benefit plans
Actuarial gain (loss)
Amortization to net income of net actuarial loss and settlements	296		189		533		866
Actuarial gain (loss) arising during period	159		(336)		442		681
Prior service credits (cost)
Amortization to net income of net prior service costs and curtailments	(5)		(5)		(14)		(13)
Prior service (costs) credits arising during period	—		—		—		3
Defined benefit plans sponsored by equity affiliates - benefit (cost)	7		7		25		47
Income (taxes) benefit on defined benefit plans	(103)		41		(208)		(355)
Total	354		(104)		778		1,229
Other Comprehensive Gain (Loss), Net of Tax	318		(123)		716		1,194
Comprehensive Income (Loss)	11,556		5,992		29,946		11,801
Comprehensive loss (income) attributable to noncontrolling interests	(7)		(4)		(118)		(37)
Comprehensive Income (Loss) Attributable to Chevron Corporation	$	11,549	$	5,988	$	29,828	$	11,764

See accompanying notes to consolidated financial statements.

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CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)


	At September 30, 2022		At December 31, 2021
	(Millions of dollars)
Assets
Cash and cash equivalents	$	15,164	$	5,640

Marketable securities	267		35
Accounts and notes receivable (less allowance: 2022 - $390; 2021 - $303)	22,466		18,419
Inventories:
Crude oil and products	6,917		4,248
Chemicals	668		565
Materials, supplies and other	1,417		1,492
Total inventories	9,002		6,305
Prepaid expenses and other current assets	4,604		3,339
Total Current Assets	51,503		33,738
Long-term receivables (less allowance: 2022 - $494; 2021 - $442)	1,099		603
Investments and advances	45,154		40,696
Properties, plant and equipment, at cost	325,102		336,045
Less: Accumulated depreciation, depletion and amortization	180,958		189,084
Properties, plant and equipment, net	144,144		146,961
Deferred charges and other assets	12,748		12,384
Goodwill	4,663		4,385
Assets held for sale	424		768
Total Assets	$	259,735	$	239,535
Liabilities and Equity
Short-term debt	$	2,221	$	256
Accounts payable	21,699		16,454
Accrued liabilities	7,181		6,972
Federal and other taxes on income	4,020		1,700
Other taxes payable	1,762		1,409
Total Current Liabilities	36,883		26,791
Long-term debt	21,420		31,113

Deferred credits and other noncurrent obligations	20,005		20,778
Noncurrent deferred income taxes	16,616		14,665
Noncurrent employee benefit plans	5,184		6,248
Total Liabilities*	$	100,108	$	99,595
Preferred stock (authorized 100,000,000 shares; $1.00 par value; none issued)	—		—
Common stock (authorized 6,000,000,000 shares, $0.75 par value; 2,442,676,580 shares issued at September 30, 2022 and December 31, 2021)	1,832		1,832
Capital in excess of par value	18,587		17,282
Retained earnings	186,394		165,546
Accumulated other comprehensive losses	(3,173)		(3,889)
Deferred compensation and benefit plan trust	(240)		(240)
Treasury stock, at cost (509,038,034 and 512,870,523 shares at September 30, 2022 and December 31, 2021, respectively)	(44,720)		(41,464)
Total Chevron Corporation Stockholders’ Equity	158,680		139,067
Noncontrolling interests (includes redeemable noncontrolling interest of $142 and $135 at September 30, 2022 and December 31, 2021)	947		873
Total Equity	159,627		139,940
Total Liabilities and Equity	$	259,735	$	239,535

* Refer to Note 12 Other Contingencies and Commitments.

See accompanying notes to consolidated financial statements.

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CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


	Nine Months Ended September 30
	2022		2021
	(Millions of dollars)
Operating Activities
Net Income (Loss)	$	29,230	$	10,607
Adjustments
Depreciation, depletion and amortization	11,555		13,112
Dry hole expense	255		55
Distributions more (less) than income from equity affiliates	(4,768)		(2,162)
Net before-tax losses (gains) on asset retirements and sales	(463)		(401)
Net foreign currency effects	(653)		(25)
Deferred income tax provision	1,710		472
Net decrease (increase) in operating working capital	1,172		(1,459)
Decrease (increase) in long-term receivables	121		(33)
Net decrease (increase) in other deferred charges	(101)		(167)
Cash contributions to employee pension plans	(1,087)		(1,403)
Other	133		1,133
Net Cash Provided by Operating Activities	37,104		19,729
Investing Activities

Acquisition of businesses, net of cash received	(2,862)		—
Capital expenditures	(8,139)		(5,450)
Proceeds and deposits related to asset sales and returns of investment	2,485		586

Net sales (purchases) of marketable securities	82		(1)
Net repayment (borrowing) of loans by equity affiliates	38		389
Net Cash Used for Investing Activities	(8,396)		(4,476)
Financing Activities
Net borrowings (repayments) of short-term obligations	278		(3,627)

Repayments of long-term debt and other financing obligations	(8,449)		(3,305)
Cash dividends - common stock	(8,255)		(7,612)
Net contributions from (distributions to) noncontrolling interests	(103)		(34)
Net sales (purchases) of treasury shares	(2,000)		(245)
Net Cash Provided by (Used for) Financing Activities	(18,529)		(14,823)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(277)		(142)
Net Change in Cash, Cash Equivalents and Restricted Cash	9,902		288
Cash, Cash Equivalents and Restricted Cash at January 1	6,795		6,737
Cash, Cash Equivalents and Restricted Cash at September 30	$	16,697	$	7,025

See accompanying notes to consolidated financial statements.

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CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)


(Millions of dollars)					Accumulated		Treasury		Chevron Corp.		Non-
	Common		Retained		Other Comp.		Stock		Stockholders’		Controlling		Total
Three Months Ended September 30	Stock(1)		Earnings		Income (Loss)		(at cost)		Equity		Interests		Equity
Balance at June 30, 2021	$	18,636	$	159,640	$	(4,295)	$	(40,799)	$	133,182	$	729	$	133,911
Treasury stock transactions	18		—		—		—		18		—		18
NBLX Acquisition	—		—		—		—		—		—		—
Net income (loss)	—		6,111		—		—		6,111		4		6,115
Cash dividends ($1.34 per share)	—		(2,571)		—		—		(2,571)		(25)		(2,596)
Stock dividends	—		(1)		—		—		(1)		—		(1)
Other comprehensive income	—		—		(123)		—		(123)		—		(123)
Purchases of treasury shares	—		—		—		(625)		(625)		—		(625)
Issuances of treasury shares	—		—		—		6		6		—		6
Other changes, net	—		(135)		—		—		(135)		152		17
Balance at September 30, 2021	$	18,654	$	163,044	$	(4,418)	$	(41,418)	$	135,862	$	860	$	136,722

Balance at June 30, 2022	$	20,151	$	177,909	$	(3,491)	$	(41,015)	$	153,554	$	1,008	$	154,562
Treasury stock transactions	19		—		—		—		19		—		19

Net income (loss)	—		11,231		—		—		11,231		7		11,238
Cash dividends ($1.42 per share)	—		(2,743)		—		—		(2,743)		(71)		(2,814)
Stock dividends	—		(2)		—		—		(2)		—		(2)
Other comprehensive income	—		—		318		—		318		—		318
Purchases of treasury shares	—		—		—		(3,750)		(3,750)		—		(3,750)
Issuances of treasury shares	9		—		—		45		54		—		54
Other changes, net	—		(1)		—		—		(1)		3		2
Balance at September 30, 2022	$	20,179	$	186,394	$	(3,173)	$	(44,720)	$	158,680	$	947	$	159,627

Nine Months Ended September 30
Balance at December 31, 2020	$	18,421	$	160,377	$	(5,612)	$	(41,498)	$	131,688	$	1,038	$	132,726
Treasury stock transactions	95		—		—		—		95		—		95
NBLX acquisition	138		(148)		—		377		367		(321)		46
Net income (loss)	—		10,570		—		—		10,570		37		10,607
Cash dividends ($3.97 per share)	—		(7,612)		—		—		(7,612)		(51)		(7,663)
Stock dividends	—		(2)		—		—		(2)		—		(2)
Other comprehensive income	—		—		1,194		—		1,194		—		1,194
Purchases of treasury shares	—		—		—		(633)		(633)		—		(633)
Issuances of treasury shares	—		—		—		336		336		—		336
Other changes, net	—		(141)		—		—		(141)		157		16
Balance at September 30, 2021	$	18,654	$	163,044	$	(4,418)	$	(41,418)	$	135,862	$	860	$	136,722

Balance at December 31, 2021	$	18,874	$	165,546	$	(3,889)	$	(41,464)	$	139,067	$	873	$	139,940
Treasury stock transactions	49		—		—		—		49		—		49

Net income (loss)	—		29,112		—		—		29,112		118		29,230
Cash dividends ($4.26 per share)	—		(8,255)		—		—		(8,255)		(107)		(8,362)
Stock dividends	—		(3)		—		—		(3)		—		(3)
Other comprehensive income	—		—		716		—		716		—		716
Purchases of treasury shares	—		—		—		(7,505)		(7,505)		—		(7,505)
Issuances of treasury shares	1,256		—		—		4,249		5,505		—		5,505
Other changes, net	—		(6)		—		—		(6)		63		57
Balance at September 30, 2022	$	20,179	$	186,394	$	(3,173)	$	(44,720)	$	158,680	$	947	$	159,627

(Number of Shares)	Common Stock - 2022								Common Stock - 2021
Three Months Ended September 30	Issued(2)		Treasury		Outstanding				Issued(2)		Treasury		Outstanding
Balance at June 30	2,442,676,580		(485,241,766)		1,957,434,814				2,442,676,580		(508,764,636)		1,933,911,944
Purchases	—		(24,324,584)		(24,324,584)				—		(6,321,791)		(6,321,791)
Issuances	—		528,316		528,316				—		95,766		95,766
Balance at September 30	2,442,676,580		(509,038,034)		1,933,638,546				2,442,676,580		(514,990,661)		1,927,685,919

Nine Months Ended September 30
Balance at December 31	2,442,676,580		(512,870,523)		1,929,806,057				2,442,676,580		(517,490,263)		1,925,186,317
Purchases	—		(48,390,222)		(48,390,222)				—		(6,395,387)		(6,395,387)
Issuances	—		52,222,711		52,222,711				—		8,894,989		8,894,989
Balance at September 30	2,442,676,580		(509,038,034)		1,933,638,546				2,442,676,580		(514,990,661)		1,927,685,919

(1)Beginning and ending balances for all periods include capital in excess of par, common stock issued at par for $1,832, and $(240) associated with Chevron’s Benefit Plan Trust. Changes reflect capital in excess of par.

(2)Beginning and ending total issued share balances include 14,168,000 shares associated with Chevron’s Benefit Plan Trust for all periods.

See accompanying notes to consolidated financial statements.

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. General

Basis of Presentation The accompanying consolidated financial statements of Chevron Corporation and its subsidiaries (together, Chevron or the company) have not been audited by an independent registered public accounting firm. In the opinion of the company’s management, the interim data includes 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 September 30, 2022, are not necessarily indicative of future financial results. The term “earnings” is defined as net income attributable to Chevron.

Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the company’s 2021 Annual Report on Form 10-K.

Note 2. Changes in Accumulated Other Comprehensive Losses

The change in Accumulated Other Comprehensive Losses (AOCL) presented on the Consolidated Balance Sheet and the impact of significant amounts reclassified from AOCL on information presented in the Consolidated Statement of Income for the nine months ended September 30, 2022 and 2021 are reflected in the table below.

Changes in Accumulated Other Comprehensive Income (Loss) by Component(1)

(Millions of dollars)



	Currency Translation Adjustment		Unrealized Holding Gains (Losses) on Securities		Derivatives		Defined Benefit Plans		Total
Balance at December 31, 2020	$	(107)	$	(10)	$	—	$	(5,495)	$	(5,612)
Components of Other Comprehensive Income (Loss):
Before Reclassifications	(31)		(1)		(5)		563		526
Reclassifications(2) (3)	—		—		2		666		668
Net Other Comprehensive Income (Loss)	(31)		(1)		(3)		1,229		1,194
Balance at September 30, 2021	$	(138)	$	(11)	$	(3)	$	(4,266)	$	(4,418)

Balance at December 31, 2021	$	(