filings.toolsItem 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations
Third Quarter 2024 Compared with Third Quarter 2023
Key Financial Results
| Earnings by Business Segment | |||||||||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | (Millions of dollars) | ||||||||||||||||||||||
| Upstream | |||||||||||||||||||||||
| United States | $ | 1,946 | $ | 2,074 | $ | 6,182 | $ | 5,495 | |||||||||||||||
| International | 2,643 | 3,681 | 8,116 | 10,357 | |||||||||||||||||||
| Total Upstream | 4,589 | 5,755 | 14,298 | 15,852 | |||||||||||||||||||
| Downstream | |||||||||||||||||||||||
| United States | 146 | 1,376 | 879 | 3,434 | |||||||||||||||||||
| International | 449 | 307 | 1,096 | 1,556 | |||||||||||||||||||
| Total Downstream | 595 | 1,683 | 1,975 | 4,990 | |||||||||||||||||||
| Total Segment Earnings | 5,184 | 7,438 | 16,273 | 20,842 | |||||||||||||||||||
| All Other | (697) | (912) | (1,851) | (1,732) | |||||||||||||||||||
| Net Income (Loss) Attributable to Chevron Corporation (1) (2) | $ | 4,487 | $ | 6,526 | $ | 14,422 | $ | 19,110 | |||||||||||||||
| (1) Includes foreign currency effects. | $ | (44) | $ | 285 | $ | (202) | $ | 255 | |||||||||||||||
| (2) Income (loss) net of tax; also referred to as “earnings” in the discussions that follow. |
Net income attributable to Chevron Corporation for third quarter 2024 was $4.5 billion ($2.48 per share — diluted), compared with $6.5 billion ($3.48 per share — diluted) in third quarter 2023. The net income attributable to Chevron Corporation for the first nine months of 2024 was $14.4 billion ($7.88 per share —diluted), compared with $19.1 billion ($10.14 per share — diluted) in the first nine months of 2023.
Upstream earnings in third quarter 2024 were $4.6 billion compared with $5.8 billion in the corresponding 2023 period. The decrease was mainly due to the absence of prior year favorable foreign currency effects, absence of prior year favorable tax effects, and lower realizations, partially offset by higher sales volumes. Earnings for the first nine months of 2024 were $14.3 billion compared with $15.9 billion a year earlier. The decrease was mainly due to higher depreciation, depletion and amortization, an unfavorable swing in tax effects, negative foreign currency effects, and lower realizations, partially offset by higher sales volumes.
Downstream earnings in third quarter 2024 were $595 million compared with $1.7 billion in the corresponding 2023 period. The decrease was mainly due to lower margins on refined product sales. Earnings for the first nine months of 2024 were $2.0 billion compared with $5.0 billion a year earlier. The decrease was mainly due to lower margins on refined product sales and higher operating expenses.
Refer to “Results of Operations” for additional discussion of results by business segment and “All Other” activities for the third quarter and first nine months of 2024 versus the same periods in 2023.
Business Environment and Outlook
Chevron Corporation3 is a global energy company with direct and indirect subsidiaries and affiliates that conduct substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Equatorial Guinea, Israel, Kazakhstan, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, the Republic of Congo, Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.
The company’s objective is to safely deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company’s control. In the company’s downstream business, crude oil is the largest cost component of refined products. Periods of sustained lower commodity prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital expenditures, along with other measures intended to improve financial performance.
Governments, companies, communities, and other stakeholders are increasingly supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce GHG emissions are in various stages of design, adoption, and implementation. These policies and programs, some of which support the global net zero emissions ambitions of the Paris Agreement, can change the amount of energy consumed, the rate of energy-demand growth, the energy mix, and the relative economics of one fuel versus another. Implementation of jurisdiction-specific policies and programs can be dependent on, and can affect the pace of, technological advancements, the granting of necessary permits by governing authorities, the availability and acceptability of cost-effective, verifiable carbon credits, the availability of suppliers that can meet our sustainability-related standards, evolving regulatory or other requirements affecting ESG standards or other disclosures, and evolving standards for tracking, reporting, marketing and advertising relating to emissions and emission reductions and removals.
Significant uncertainty remains as to the pace and extent to which the transition to a lower carbon future will progress, which is dependent, in part, on further advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulations and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company’s activities, and market conditions. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come.
Chevron supports the Paris Agreement’s global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emission reductions. Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviews, and risk management tools and processes, where it believes they are applicable. They are also factored into the company’s long-range supply, demand, and energy price forecasts. These forecasts reflect estimates of long-range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standards, and demand response to oil and natural gas prices.
3 Incorporated in Delaware in 1926 as Standard Oil Company of California, the company adopted the name Chevron Corporation in 1984 and ChevronTexaco Corporation in 2001. In 2005, ChevronTexaco Corporation changed its name to Chevron Corporation. As used in this report, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole, but unless stated otherwise they do not include “affiliates” of Chevron — i.e., those companies generally owned 50 percent or less. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.
The company will continue to develop oil and gas resources to meet customers’ and consumers’ demand for energy. At the same time, Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology, and customer and consumer preferences. Chevron aims to grow its oil and gas business, lower the carbon intensity of its operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. To grow its lower carbon businesses, Chevron plans to target sectors of the economy where emissions are harder to abate or that cannot be easily electrified, while leveraging the company’s capabilities, assets, partnerships, and customer relationships. The company’s oil and gas business may increase or decrease depending upon regulatory or market forces, among other factors.
Chevron’s previously disclosed 2050 net zero upstream aspiration, carbon intensity targets and planned lower-carbon capital spend through 2028 can be found on pages 35 through 36 of the company’s 2023 Annual Report on Form 10-K.
Chevron’s goals, targets and aspirations reflect Chevron’s current plans, and Chevron regularly evaluates its goals, targets and aspirations and may eliminate, increase or decrease them for various reasons, including market conditions; changes in its portfolio; and financial, operational, regulatory, reputational, legal and other factors. The company’s ability to achieve any aspiration, target or objective is subject to numerous risks, many of which are outside of our control. Examples of such risks include: (1) sufficient and substantial advances in technology, including the continuing progress of commercially viable technologies and low- or non-carbon-based energy sources; (2) laws, governmental regulation, policies, and other enabling actions, including those regarding subsidies, tax and other incentives as well as the granting of necessary permits by governing authorities; (3) the availability and acceptability of cost-effective, verifiable carbon credits; (4) the availability of suppliers that can meet our sustainability-related standards; (5) evolving regulatory requirements, including changes to IPCC’s Global Warming Potentials and the U.S. EPA Greenhouse Gas Reporting Program, affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emissions reductions and removals; (7) customer and consumer preferences and use of the company’s products or substitute products; (8) actions taken by the company’s competitors in response to legislation and regulations; and (9) successful negotiations for carbon capture and storage and nature-based solutions. Please refer to the risk factors regarding our aspirations, targets, and disclosures related to environmental, social, and governance matters included on pages 25 through 26 of the company’s 2023 Annual Report on Form 10-K.
Income Taxes The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Additional information related to the company’s effective income tax rate is included in Note 10 Income Taxes to the Consolidated Financial Statements.
In December 2021, the Organization for Economic Co-operation and Development (OECD) issued model rules for a new 15 percent global minimum tax (Pillar Two), and various jurisdictions in which the company operates enacted or are in the process of enacting Pillar Two legislation. Certain aspects of the tax under the Pillar Two framework are effective in 2024 in some jurisdictions and in 2025 (or later) in others. Although we do not currently expect that Pillar Two will have a material impact on our results of operations, we are continuing to evaluate the impact of legislative adoption by individual countries.
Supply Chain and Inflation Impacts The company is actively managing its contracting, procurement, and supply chain activities to effectively manage costs and facilitate supply chain resiliency and continuity in support of the company’s operational goals. Third party costs for capital and operating expenses can be subject to external factors beyond the company’s control including, but not limited to: severe weather or civil unrest, delays in construction, global and local supply chain distribution issues, inflation, tariffs or other taxes imposed on goods or services, and market-based prices charged by the industry’s material and service providers. Chevron utilizes contracts with various pricing mechanisms, which may result in a lag before the company’s costs reflect changes in market trends.
While macroeconomic inflation has slowed, trends in the cost of goods and services vary by spend category. The labor market remains tight, and suppliers are passing along wage rate increases for labor intensive operations. Chevron has applied inflation mitigation strategies to temper these cost increases, including fixed price and index-based contracts. Lead times for key capital equipment remain long and availability of offshore and specialized equipment is under pressure, with some experiencing upward pricing movements. Chevron has addressed equipment cost increases and long lead times by partnering with suppliers on demand planning, volume commitments, standardization, and scope optimization. Cost pressures for materials and onshore drilling and completion equipment in the United States continue to ease.
Acquisition and Disposition of Assets The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value and to acquire assets or operations complementary to its asset base to help augment the company’s financial performance and value growth. The company is targeting $10-15 billion of asset sales over the 5 year period ending in 2028. Asset dispositions and restructurings may result in significant gains or losses in future periods. In addition, some assets are sold along with their related liabilities, such as abandonment and decommissioning obligations. In certain instances, such transferred obligations have reverted, and may in the future revert, to the company and result in losses that could be significant. For example, in fourth quarter 2023, the company recognized an after-tax loss of $1.9 billion related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico, because the companies that purchased these assets have filed for protection under the U.S. bankruptcy courts. The company is not currently aware of any additional potential material exposure that is reasonably possible.
In October 2024, the company announced that Chevron Canada Limited, an indirect subsidiary, and its related entity entered into a definitive agreement to sell their 20 percent non-operated interest in the Athabasca Oil Sands Project and 70 percent operated interest in the Duvernay shale in Alberta, Canada, to Canadian Natural Resources Limited for $6.5 billion before taxes. The sale is expected to close in fourth quarter 2024, and upon close of the sale, the buyer will assume the asset retirement obligations. In 2023, these assets produced 84 thousand barrels of oil-equivalent per day and generated over $2.3 billion of sales and approximately $700 million of net income. As part of the sale, the company expects to recognize a reduction of approximately 700 million barrels of oil-equivalent proved reserves.
In October 2023, the company announced that it had entered into a definitive merger agreement with Hess Corporation. Refer to Note 17 Agreement to Acquire Hess Corporation for additional information.
Other Impacts The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the company of movements in commodity prices and downstream margins. Management takes these developments into account in the conduct of daily operations and for business planning.
The company recently announced plans to achieve $2-3 billion in structural cost reductions by the end of 2026. These cost savings will largely come from optimizing the portfolio, leveraging technology to enhance productivity, and changing how and where work is performed, including expanded use of global capability centers. In relation to these efforts, the Company expects to recognize restructuring and reorganization charges in future periods, which could be significant.
Comments related to earnings trends for the company’s major business areas are as follows:
Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil and natural gas. Crude oil and natural gas prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by OPEC+ countries, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company’s control, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of these factors could also inhibit the company’s production capacity in an affected region. The company closely monitors developments in the countries in which it operates and holds investments and seeks to manage risks in operating its facilities and businesses.
The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company’s ability to find or acquire and efficiently produce crude oil and natural gas, changes in fiscal terms of contracts, the pace and extent of the energy transition, and changes in tax, environmental and other applicable laws and regulations.
In April 2024, Tengizchevroil LLP (TCO) achieved start-up of the Wellhead Pressure Management Project (WPMP) and as of September 2024, all four pressure boost facility compressors are online and 14 metering stations have been converted to low pressure. Additional metering station conversions will continue for the remainder of the year. TCO continues to make progress on the Future Growth Project with start-up expected in the first-half of 2025.
Chevron has interests in Venezuelan assets operated by independent affiliates. Chevron has been conducting limited activities in Venezuela consistent with the authorization provided pursuant to general licenses issued by the United States government. In fourth quarter 2022, Chevron received General License 41 from the United States government, enabling the company to resume activity in Venezuela subject to certain limitations, and the company continues such activities under this General License. The financial results for Chevron’s business in Venezuela are being recorded as non-equity investments since 2020, where income is only recognized when cash is received and production and reserves are not included in the company’s results. Crude oil liftings in Venezuela started in first quarter 2023, which has positively impacted the company’s results. The company’s independent affiliates have continued to maintain safe and reliable operations; however, future impact on results of operations and financial condition remain uncertain.
Governments have imposed and may impose additional sanctions and other trade laws, restrictions and regulations that could lead to disruption in our ability to produce, transport and/or export crude in the region around Russia. The financial impacts of such risks, including presently imposed sanctions, are not currently material for the company; however, it remains uncertain how long these conditions may last or how severe they may become.
Chevron holds a 39.7 percent interest in the Leviathan field and a 25 percent interest in the Tamar field in Israel. Despite the ongoing conflict between Israel and various regional adversaries, the company continues to maintain safe and reliable operations while meeting its contractual commitments. The project to install a third gathering pipeline at Leviathan is expected to be delayed; however, completion is currently still expected in 2025. The company continues to monitor the ongoing conflict in the region, and any future impacts on the company’s results of operations and financial condition remain uncertain.
Chevron operates and holds interests in the Bibiyana, Jalalabad and Moulavi Bazar fields in Bangladesh. Recent political unrest in the country has not impacted the company's operations to date; however, the future impacts, if any, on the company’s results of operations and financial condition remain uncertain.
The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil, and U.S. Henry Hub natural gas. The Brent price averaged $83 per barrel for the first nine months of 2024, compared with $82 per barrel during the first nine months of 2023, and ended October at about $73 per barrel. The WTI price averaged $78 per barrel for the first nine months of 2024 compared to $77 per barrel in the first nine months of 2023, and ended October at about $69 per barrel. The majority of the company’s equity crude production is priced based on the Brent and WTI benchmarks. Crude prices decreased during third quarter 2024 due to concerns over lower global demand, despite increased geopolitical risk, declining inventory levels, and an interest rate cut by the U.S. Federal Reserve. (See page 38 for the company’s average U.S. and international crude oil sales prices.)
Price changes for natural gas are also impacted by seasonal supply, demand and infrastructure conditions in regional and local markets. In the U.S., prices at Henry Hub averaged $2.20 per thousand cubic feet (MCF) for the first nine months of 2024, compared with $2.49 per MCF during the first nine months of 2023. Prices in third quarter 2024 averaged $2.12 per MCF. Lower third quarter 2024 prices have started to incentivize production cuts, but storage levels remain above their five-year average. At the end of October 2024, the Henry Hub spot price was $1.94 per MCF.
Outside the U.S., price changes for natural gas also depend on a wide range of supply, demand and regulatory circumstances. The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG assets is committed under binding long-term contracts, with some sold in the spot LNG market. The temporary pause on approving LNG export authorizations by the U.S. Department of Energy has not had a significant impact on current LNG prices. International natural gas realizations averaged $7.20 per MCF during the first nine months of 2024, compared with $7.81 per MCF in the same period last year. (See page 38 for the company’s average natural gas sales prices for the U.S. and international regions.)
Production The company’s worldwide net oil-equivalent production in the first nine months of 2024 averaged 3.33 million barrels per day, an increase of 10 percent from the first nine months of 2023 primarily due to the acquisition of PDC Energy, Inc. (PDC) and production growth in the Permian and Denver-Julesburg (DJ) Basin in the U.S., partly offset by planned downtime in Nigeria and exit from Myanmar. About 24 percent of the company’s net oil-equivalent production in the first nine months of 2024 occurred in the OPEC+ member countries of Angola, Equatorial Guinea, Kazakhstan, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait and the Republic of Congo.
Refer to the “Results of Operations” section on page 32 for additional discussion of the company’s upstream business.
Downstream Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and marketing of products that include gasoline, diesel, jet fuel, lubricants, fuel oil, fuel and lubricant additives, petrochemicals and renewable fuels. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-demand balance for refined products, petrochemicals and renewable fuels, and by changes in the price of crude oil, other refinery and petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events.
Other factors affecting profitability for downstream operations include the reliability and efficiency of the company’s refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the volatility of tanker-charter rates for the company’s shipping operations, which are driven by the industry’s demand for crude oil and product tankers. Other factors beyond the company’s control include the general level of inflation and energy costs to operate the company’s refining, marketing and petrochemical assets, and changes in tax, environmental, and other applicable laws and regulations.
Chevron owns and operates a refinery in Richmond, California. A previous tax settlement between the City of Richmond and the company was replaced with a new agreement that is effective July 1, 2025. The company will pay $550 million to the City of Richmond over ten years as part of an agreement that also provides protections against future new tax liabilities during the ten-year agreement.
California Assembly Bill ABX2-1, signed into law on October 14, 2024, authorizes the California Energy Commission (CEC) to develop and impose requirements to maintain minimum inventory levels of refined transportation fuels with respect to certain of the company’s downstream activities in California. The law further expands on CEC’s existing authority to impose requirements governing the timing of turnarounds and maintenance. It is uncertain whether, or when, the CEC will establish any such requirements. The company will evaluate the impact that ABX2-1 and any forthcoming CEC regulations may have on its operations in California and results of operations when the regulations have been promulgated.
The company’s most significant marketing areas are the West Coast and Gulf Coast of the United States and Asia Pacific. Chevron operates or has significant ownership interests in refineries in each of these areas.
Refer to the “Results of Operations” section beginning on page 33 for additional discussion of the company’s downstream operations.
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.
Refer to “Cautionary Statements Relevant to Forward-Looking Information” on page 2 and to “Risk Factors” on pages 20 through 26 of the company’s 2023 Annual Report on Form 10-K for a discussion of some of the inherent risks that could materially impact the company’s results of operations or financial condition.
Noteworthy Developments
Certain noteworthy developments in recent months included the following:
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Australia - Completed major turnaround at Gorgon’s Train 2 plant ahead of schedule.
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Australia - Received an offshore greenhouse gas assessment permit, covering an area of approximately 8,467 km2, to assess future CO2 storage.
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Canada - Announced a $6.5 billion sale of the company’s interest in the Athabasca Oil Sands Project and Duvernay shale assets that is expected to close in fourth quarter 2024.
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India - Announced the establishment of an engineering and innovation center in India to provide technical and digital solutions for the enterprise.
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Kazakhstan - Completed major turnaround at TCO’s Complex Technology Line (KTL-1) ahead of schedule.
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Nigeria - Successfully extended the offshore Meji field with a near-field discovery.
*•*United States - Cleared Federal Trade Commission antitrust review of the company’s pending merger with Hess Corporation, satisfying a key closing condition for the transaction.
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United States - Started production at the Anchor project in the Gulf of Mexico, marking successful delivery of an industry-first high-pressure deepwater technology.
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United States - Began water injection operations to boost production from company operated Jack/St. Malo and Tahiti fields in the Gulf of Mexico.
Results of Operations
Business Segments The following section presents the results of operations and variances on an after-tax basis for the company’s business segments — Upstream and Downstream — as well as for “All Other.” (Refer to Note 7 Operating Segments and Geographic Data for a discussion of the company’s “reportable segments,” as defined under the accounting standards for segment reporting.)
Upstream
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
| Unit (1) | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| U.S. Upstream | ||||||||||||||||||||||||||
| Earnings | $MM | $ | 1,946 | $ | 2,074 | $ | 6,182 | $ | 5,495 | |||||||||||||||||
| Net Oil-Equivalent Production | MBOED | 1,605 | 1,407 | 1,584 | 1,265 | |||||||||||||||||||||
| Liquids Production | MBD | 1,156 | 1,028 | 1,139 | 941 | |||||||||||||||||||||
| Natural Gas Production | MMCFD | 2,694 | 2,275 | 2,665 | 1,947 | |||||||||||||||||||||
| Liquids Realization | $/BBL | $ | 54.86 | $ | 62.42 | $ | 57.33 | $ | 59.40 | |||||||||||||||||
| Natural Gas Realization | $/MCF | $ | 0.55 | $ | 1.39 | $ | 0.85 | $ | 1.69 | |||||||||||||||||
| (1) MBD — thousands of barrels per day; MMCFD — millions of cubic feet per day; BBL — Barrel; MCF — thousands of cubic feet; MBOED — thousands of barrels of oil-equivalent per day. |
Three Month Periods Ended September 30, 2024 and 2023
U.S. upstream earnings decreased by $128 million primarily due to lower realizations of $530 million, higher depreciation, depletion and amortization of $220 million, mainly from higher production, partly offset by higher sales volumes of $420 million and lower operating expenses of $110 million.
Net oil-equivalent production was up 198,000 barrels per day, or 14 percent, and set a new quarterly record. The increase was primarily due to record high production in the Permian Basin and the acquisition of PDC, partly offset by hurricane impacts in the U.S. Gulf of Mexico that reduced production by 17,000 barrels per day.
Nine Month Periods Ended September 30, 2024 and 2023
U.S. upstream earnings increased by $687 million primarily due to higher sales volumes of $2.2 billion, including from legacy PDC assets, partially offset by higher depreciation, depletion and amortization of $1.1 billion and lower realizations of $290 million.
Net oil-equivalent production was up 319,000 barrels per day, or 25 percent. The increase was primarily due to the acquisition of PDC and growth in the Permian and DJ Basins.
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
| Unit (2) | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| International Upstream | ||||||||||||||||||||||||||
| Earnings (1) | $MM | $ | 2,643 | $ | 3,681 | $ | 8,116 | $ | 10,357 | |||||||||||||||||
| Net Oil-Equivalent Production | MBOED | 1,759 | 1,739 | 1,750 | 1,763 | |||||||||||||||||||||
| Liquids Production | MBD | 834 | 803 | 832 | 826 | |||||||||||||||||||||
| Natural Gas Production | MMCFD | 5,550 | 5,616 | 5,513 | 5,621 | |||||||||||||||||||||
| Liquids Realization | $/BBL | $ | 70.59 | $ | 75.64 | $ | 72.70 | $ | 70.78 | |||||||||||||||||
| Natural Gas Realization | $/MCF | $ | 7.46 | $ | 6.96 | $ | 7.20 | $ | 7.81 | |||||||||||||||||
| (1) Includes foreign currency effects | $MM | $ | 13 | $ | 584 | $ | (202) | $ | 538 | |||||||||||||||||
| (2) MBD — thousands of barrels per day; MMCFD — millions of cubic feet per day; BBL — Barrel; MCF — thousands of cubic feet; MBOED — thousands of barrels of oil-equivalent per day. |
Three Month Periods Ended September 30, 2024 and 2023
International upstream earnings decreased by $1.0 billion primarily due to the absence of prior year one-time favorable tax benefit in Nigeria of $560 million. Foreign currency effects had an unfavorable impact on earnings of $571 million between periods.
Net oil-equivalent production was up 20,000 barrels per day, or 1 percent. The increase was primarily due to entitlement effects.
Nine Month Periods Ended September 30, 2024 and 2023
International upstream earnings decreased by $2.2 billion primarily due to an unfavorable swing in tax effects of $800 million, lower sales volumes of $560 million and lower realizations of $270 million. Foreign currency effects had an unfavorable impact on earnings of $740 million between periods.
Net oil-equivalent production was down 13,000 barrels per day, or 1 percent. The decrease was primarily due to downtime in Nigeria and Australia, and exit from Myanmar, partly offset by entitlement effects.
Downstream
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
| Unit ***** | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| U.S. Downstream | ||||||||||||||||||||||||||
| Earnings | $MM | $ | 146 | $ | 1,376 | $ | 879 | $ | 3,434 | |||||||||||||||||
| Refinery Crude Unit Inputs | MBD | 995 | 980 | 925 | 965 | |||||||||||||||||||||
| Refined Product Sales | MBD | 1,312 | 1,303 | 1,296 | 1,283 | |||||||||||||||||||||
| * MBD — thousands of barrels per day. |
Three Month Periods Ended September 30, 2024 and 2023
U.S. downstream earnings decreased by $1.2 billion primarily due to lower margins on refined product sales of $1.3 billion, partly offset by $180 million of higher earnings from the 50 percent-owned affiliate, CPChem.
Refinery crude unit inputs, including crude oil and other inputs, were up 15,000 barrels per day, or 2 percent, primarily due to absence of planned turnaround at the Richmond, California refinery, partly offset by hurricane impacts at the Pasadena, Texas refinery.
Refined product sales were up 9,000 barrels per day, or 1 percent.
Nine Month Periods Ended September 30, 2024 and 2023
U.S. downstream earnings decreased by $2.6 billion primarily due to lower margins on refined product sales of $2.3 billion and higher operating expenses of $490 million, partly offset by $200 million of higher earnings from CPChem.
Refinery crude unit inputs, including crude oil and other inputs, were down 40,000 barrels per day, or 4 percent, primarily due to downtime at the El Segundo, California and Pascagoula, Mississippi refineries, and hurricane impacts at the Pasadena, Texas refinery.
Refined product sales were up 13,000 barrels per day, or 1 percent.
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
| Unit (2) | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| International Downstream | ||||||||||||||||||||||||||
| Earnings (1) | $MM | $ | 449 | $ | 307 | $ | 1,096 | $ | 1,556 | |||||||||||||||||
| Refinery Crude Unit Inputs | MBD | 628 | 637 | 643 | 637 | |||||||||||||||||||||
| Refined Product Sales | MBD | 1,507 | 1,431 | 1,473 | 1,448 | |||||||||||||||||||||
| (1) Includes foreign currency effects | $MM | $ | (55) | $ | 24 | $ | — | $ | 46 | |||||||||||||||||
| (2) MBD — thousands of barrels per day. |
Three Month Periods Ended September 30, 2024 and 2023
International downstream earnings increased by $142 million primarily due to higher margins on refined product sales of $310 million, partly offset by higher operating expenses of $90 million. Foreign currency effects had an unfavorable impact on earnings of $79 million between periods.
Refinery crude unit inputs, including crude oil and other inputs, were down 9,000 barrels per day, or 1 percent, primarily due to higher planned turnarounds.
Refined product sales were up 76,000 barrels per day, or 5 percent, compared to the year-ago period primarily due to higher demand for gasoline and jet fuel.
Nine Month Periods Ended September 30, 2024 and 2023
International downstream earnings decreased by $460 million primarily due to lower margins on refined product sales of $300 million and higher operating expenses of $60 million. Foreign currency effects had an unfavorable impact on earnings of $46 million between periods.
Refinery crude unit inputs, including crude oil and other inputs, were up 6,000 barrels per day, or 1 percent.
Refined product sales were up 25,000 barrels per day, or 2 percent.
All Other
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
| Unit | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| All Other | ||||||||||||||||||||||||||
| Earnings/(Charges)* | $MM | $ | (697) | $ | (912) | $ | (1,851) | $ | (1,732) | |||||||||||||||||
| * Includes foreign currency effects | $ | (2) | $ | (323) | $ | — | $ | (329) |
Three Month Periods Ended September 30, 2024 and 2023
Net charges decreased by $215 million primarily due to the absence of prior year unfavorable foreign currency effects, partly offset by higher interest expense and lower interest income.
Nine Month Periods Ended September 30, 2024 and 2023
Net charges increased by $119 million primarily due to lower interest income and unfavorable tax items, partly offset by the absence of prior year unfavorable foreign currency effects.
Consolidated Statement of Income
Explanations of variations between periods for selected income statement categories are provided below:
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Sales and other operating revenues | $ | 48,926 | $ | 51,922 | $ | 145,080 | $ | 147,980 |
Sales and other operating revenues for third quarter 2024 decreased mainly due to lower refined product and crude oil prices, partially offset by higher crude oil and refined product sales volumes. Sales and other operating revenues for the nine-month period 2024 also decreased as lower refined product and natural gas prices were partially offset by higher U.S. crude oil, natural gas and refined product sales volumes.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Income from equity affiliates | $ | 1,261 | $ | 1,313 | $ | 3,908 | $ | 4,141 |
Income from equity affiliates in third quarter 2024 decreased mainly due to lower downstream-related earnings from GS Caltex in South Korea and upstream-related earnings from TCO, partially offset by higher downstream-related earnings from CPChem. Income from equity affiliates in the nine-month period 2024 decreased mainly due to lower downstream-related earnings from GS Caltex in South Korea and upstream-related earnings from Angola LNG, partially offset by higher downstream-related earnings from CPChem.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Other income (loss) | $ | 482 | $ | 845 | $ | 1,578 | $ | 1,648 |
Other income for third quarter 2024 decreased primarily due to an unfavorable swing in foreign currency effects, partially offset by higher income from Venezuela non-equity investments. Other income for the nine-month period 2024 decreased mainly due to lower interest income and an unfavorable swing in foreign currency effects, partially offset by higher income from Venezuela non-equity investments.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Purchased crude oil and products | $ | 30,450 | $ | 32,328 | $ | 89,058 | $ | 90,719 |
Purchased crude oil and products decreased for third quarter 2024 primarily due to lower refined product and crude oil prices. Purchased crude oil and products decreased for the nine-month period 2024 as lower refined product prices and lower crude oil purchase volume were partially offset by higher refined product purchases.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Operating, selling, general and administrative expenses | $ | 7,886 | $ | 7,462 | $ | 23,091 | $ | 21,549 |
Operating, selling, general and administrative expenses in third quarter 2024 increased mainly due to higher environmental reserve and transportation costs. The increase in Operating, selling, general and administrative expenses for the nine-month period 2024 primarily resulted from higher employee expenses, higher transportation costs and higher material and supply expenses.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Exploration expenses | $ | 154 | $ | 301 | $ | 546 | $ | 660 |
Exploration expenses for the third quarter and nine-month period 2024 decreased primarily due to lower charges for well write-offs.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Depreciation, depletion and amortization | $ | 4,214 | $ | 4,025 | $ | 12,309 | $ | 11,072 |
Depreciation, depletion and amortization expenses for the third quarter and nine-month period 2024 increased primarily due to higher production volumes and higher rates.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Taxes other than on income | $ | 1,263 | $ | 1,021 | $ | 3,575 | $ | 3,158 |
Taxes other than on income for the third quarter and nine-month period 2024 increased primarily due to higher property and excise taxes.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Interest and debt expense | $ | 164 | $ | 114 | $ | 395 | $ | 349 |
Interest and debt expenses for the third quarter and nine-month period 2024 increased mainly due to higher debt balance compared to last year.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Other components of net periodic benefit costs | $ | 49 | $ | 91 | $ | 145 | $ | 168 |
Other components of net periodic benefit costs for the third quarter and nine-month period 2024 were lower mainly due to the absence of third quarter 2023 pension settlement charges.
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Income tax expense/(benefit) | $ | 1,993 | $ | 2,183 | $ | 6,957 | $ | 6,926 |
The company’s decrease in income tax expense for third quarter 2024 of $190 million was primarily due to the decrease in total income before tax of $2.2 billion, partially offset by the absence of prior period favorable tax items.
U.S. income before tax decreased from $3.5 billion in third quarter 2023 to $1.8 billion in third quarter 2024. This $1.6 billion decrease in income was primarily driven by lower downstream margins, lower upstream realizations, partially offset by higher upstream sales volumes. The decrease in income had a direct impact on the company’s U.S. income tax, resulting in a decrease in income tax expense of $498 million between year-over-year periods, from $1.0 billion in 2023 to $460 million in 2024.
International income before tax decreased from $5.3 billion in third quarter 2023 to $4.7 billion in third quarter 2024. This $616 million decrease in income was primarily driven by unfavorable foreign currency effects and higher operating expenses, partially offset by higher downstream margins. The company’s international income tax expense increased $308 million between year-over-year periods, from $1.2 billion in 2023 to $1.5 billion in 2024, primarily due to the absence of prior period favorable tax items.
The company’s income tax expense increased in the first nine months of 2024 by $31 million while total income before income tax decreased $4.6 billion, primarily due to the absence of prior period favorable tax items and current period unfavorable tax items.
U.S. income before income tax decreased between the nine-month periods, from $9.4 billion in 2023 to $6.9 billion in 2024. This $2.5 billion decrease in income was primarily driven by lower downstream margins, higher depreciation, depletion and amortization, and higher operating expenses, partially offset by higher upstream sales volumes. The decrease in income had a direct impact on the company’s U.S. income tax, resulting in a decrease in income tax expense of $575 million between the nine-month periods, from $2.3 billion in 2023 to $1.8 billion in 2024.
International income before income tax decreased for the nine-month period, from $16.7 billion in 2023 to $14.5 billion in 2024. This $2.1 billion decrease in income was primarily due to lower upstream sales volumes, unfavorable foreign currency effects, higher operating expenses, lower downstream margins and lower upstream realizations. International income tax expense increased $606 million between year-over-year periods, from $4.6 billion in 2023 to to $5.2 billion in 2024, primarily due to the absence of prior period favorable tax items and current period unfavorable tax items.
Additional information related to the company’s effective income tax rate is included in Note 10 Income Taxes to the Consolidated Financial Statements.
Selected Operating Data
The following table presents a comparison of selected operating data:
| Selected Operating Data (1) (2) | ||||||||||||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | |||||||||||||||||||||||||
| Unit | 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||||
| U.S. Upstream | ||||||||||||||||||||||||||
| Net crude oil and natural gas liquids production | MBD | 1,156 | 1,028 | 1,139 | 941 | |||||||||||||||||||||
| Net natural gas production(3) | MMCFD | 2,694 | 2,275 | 2,665 | 1,947 | |||||||||||||||||||||
| Net oil-equivalent production | MBOED | 1,605 | 1,407 | 1,584 | 1,265 | |||||||||||||||||||||
| Sales of natural gas | MMCFD | 5,378 | 4,942 | 5,253 | 4,526 | |||||||||||||||||||||
| Sales of natural gas liquids | MBD | 481 | 380 | 460 | 326 | |||||||||||||||||||||
| Revenue from net production | ||||||||||||||||||||||||||
| Crude | $/BBL | $ | 73.04 | $ | 80.40 | $ | 75.30 | $ | 74.56 | |||||||||||||||||
| NGLs | $/BBL | $ | 18.34 | $ | 20.15 | $ | 19.33 | $ | 20.63 | |||||||||||||||||
| Liquids (weighted average of Crude and NGLs) | $/BBL | $ | 54.86 | $ | 62.42 | $ | 57.33 | $ | 59.40 | |||||||||||||||||
| Natural gas | $/MCF | $ | 0.55 | $ | 1.39 | $ | 0.85 | $ | 1.69 | |||||||||||||||||
| International Upstream | ||||||||||||||||||||||||||
| Net crude oil and natural gas liquids production(4) | MBD | 834 | 803 | 832 | 826 | |||||||||||||||||||||
| Net natural gas production(3) | MMCFD | 5,550 | 5,616 | 5,513 | 5,621 | |||||||||||||||||||||
| Net oil-equivalent production(4) | MBOED | 1,759 | 1,739 | 1,750 | 1,763 | |||||||||||||||||||||
| Sales of natural gas | MMCFD | 5,576 | 5,600 | 5,579 | 5,686 | |||||||||||||||||||||
| Sales of natural gas liquids | MBD | 147 | 88 | 132 | 87 | |||||||||||||||||||||
| Revenue from liftings | ||||||||||||||||||||||||||
| Crude | $/BBL | $ | 72.82 | $ | 78.67 | $ | 75.09 | $ | 73.18 | |||||||||||||||||
| NGLs | $/BBL | $ | 27.44 | $ | 20.68 | $ | 23.95 | $ | 23.59 | |||||||||||||||||
| Liquids (weighted average of Crude and NGLs) | $/BBL | $ | 70.59 | $ | 75.64 | $ | 72.70 | $ | 70.78 | |||||||||||||||||
| Natural gas | $/MCF | $ | 7.46 | $ | 6.96 | $ | 7.20 | $ | 7.81 | |||||||||||||||||
| U.S. and International Upstream | ||||||||||||||||||||||||||
| Total net oil-equivalent production(4) | MBOED | 3,364 | 3,146 | 3,334 | 3,028 | |||||||||||||||||||||
| U.S. Downstream | ||||||||||||||||||||||||||
| Gasoline sales(5) | MBD | 684 | 652 | 666 | 644 | |||||||||||||||||||||
| Other refined product sales | MBD | 628 | 651 | 630 | 639 | |||||||||||||||||||||
| Total refined product sales | MBD | 1,312 | 1,303 | 1,296 | 1,283 | |||||||||||||||||||||
| Sales of natural gas | MMCFD | 37 | 32 | 31 | 32 | |||||||||||||||||||||
| Sales of natural gas liquids | MBD | 21 | 23 | 22 | 21 | |||||||||||||||||||||
| Refinery crude unit inputs | MBD | 995 | 980 | 925 | 965 | |||||||||||||||||||||
| International Downstream | ||||||||||||||||||||||||||
| Gasoline sales(5) | MBD | 335 | 275 | 335 | 298 | |||||||||||||||||||||
| Other refined product sales | MBD | 782 | 756 | 747 | 767 | |||||||||||||||||||||
| Share of affiliate sales | MBD | 390 | 400 | 391 | 383 | |||||||||||||||||||||
| Total refined product sales | MBD | 1,507 | 1,431 | 1,473 | 1,448 | |||||||||||||||||||||
| Sales of natural gas | MMCFD | — | — | — | 1 | |||||||||||||||||||||
| Sales of natural gas liquids | MBD | 152 | 174 | 136 | 163 | |||||||||||||||||||||
| Refinery crude unit inputs | MBD | 628 | 637 | 643 | 637 | |||||||||||||||||||||
| (1) Includes company share of equity affiliates. | ||||||||||||||||||||||||||
| (2) MBD — thousands of barrels per day; MMCFD — millions of cubic feet per day; BBL — Barrel; MCF — thousands of cubic feet; oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil; MBOED — thousands of barrels of oil-equivalent per day. | ||||||||||||||||||||||||||
| (3) Includes natural gas consumed in operations (MMCFD); 3Q23 recast to include additional own use volumes from PDC acquisition: | ||||||||||||||||||||||||||
| United States | 66 | 70 | 61 | 57 | ||||||||||||||||||||||
| International | 551 | 529 | 542 | 530 | ||||||||||||||||||||||
| (4) Includes net production of synthetic oil: | ||||||||||||||||||||||||||
| Canada | 48 | 52 | 49 | 50 | ||||||||||||||||||||||
| (5) Includes branded and unbranded gasoline. |
Liquidity and Capital Resources
Cash, cash equivalents and marketable securities totaled $4.7 billion at September 30, 2024, and $8.2 billion at year-end 2023. The company holds its cash with a diverse group of major financial institutions and has processes and safeguards in place to manage its cash balances and mitigate the risk of loss. Cash provided by operating activities in the first nine months of 2024 was $22.8 billion, compared with $23.2 billion in the year-ago period. Capital expenditures totaled $12.1 billion in the first nine months of 2024, up $642 million from the year-ago period largely due to higher investments in upstream, including post-acquisition spend on legacy PDC assets. Proceeds and deposits related to asset sales and returns of investment totaled $620 million in the first nine months of 2024, compared to $410 million in the year-ago period. Cash provided by financing activities includes proceeds from shares issued for stock option exercises of $194 million in the first nine months of 2024, compared with $237 million in the year-ago period.
Dividends The company paid dividends of $8.9 billion to common stockholders during the first nine months of 2024. In October 2024, the company declared a quarterly dividend of $1.63 per common share, payable in December 2024.
Debt and Finance Lease Liabilities Chevron’s total debt and finance lease liabilities were $25.8 billion at September 30, 2024, up from $20.8 billion at December 31, 2023, as the company issued commercial paper and tax-exempt bonds, and retired a bond that matured during the period.
The company’s primary source for working capital needs is its commercial paper program. The outstanding balance for the company’s commercial paper program at September 30, 2024, was $6.0 billion, and there was no commercial paper outstanding at December 31, 2023. The company’s debt and finance lease liabilities due within one year, consisting primarily of commercial paper, the current portion of long-term debt and redeemable long-term obligations, totaled $13.2 billion at September 30, 2024, and $5.1 billion at December 31, 2023. Of these amounts, $8.1 billion was reclassified to long-term at September 30, 2024, and $4.5 billion was reclassified to long-term at December 31, 2023. At September 30, 2024, settlement of these obligations was not expected to require the use of working capital within one year, as the company had the intent and the ability, as evidenced by committed credit facilities, to continually refinance them.
At September 30, 2024, the company had $8.1 billion in 364-day committed credit facilities with various major banks that enable the refinancing of short-term obligations. The credit facilities allow the company the option to convert outstanding short-term obligations into a term loan for a period of up to one year from the facilities termination date. This supports commercial paper borrowing and can also be used for general corporate purposes. The company’s practice has been to replace expiring commitments with new commitments on substantially the same terms, maintaining levels management believes appropriate. Any borrowings under the facilities would be unsecured indebtedness at interest rates based on the Secured Overnight Financing Rate (SOFR), or an average of base lending rates published by specified banks and on terms reflecting the company’s strong credit rating. No borrowings were outstanding under these facilities at September 30, 2024.
The major debt rating agencies routinely evaluate the company’s debt, and the company’s cost of borrowing can increase or decrease depending on these debt ratings. The company has outstanding bonds issued by Chevron Corporation, CUSA, Texaco Capital Inc. and Noble Energy, Inc. Most of these securities are the obligations of, or guaranteed by, Chevron Corporation and are rated AA- by Standard and Poor’s Corporation (S&P) and Aa2 by Moody’s Investors Service (Moody’s). The company’s U.S. commercial paper is rated A-1+ by S&P and P-1 by Moody’s. All of these ratings denote high-quality, investment-grade securities.
The company’s future debt level is dependent primarily on results of operations, cash that may be generated from asset dispositions, the capital program, lending commitments to affiliates, and shareholder distributions. Based on its high-quality debt ratings, the company believes that it has substantial borrowing capacity to meet unanticipated cash requirements. During extended periods of low prices for crude oil and natural gas and narrow margins for refined products and commodity chemicals, the company has the flexibility to modify capital spending plans, discontinue or curtail the stock repurchase program, sell assets, and increase borrowings to continue paying the common stock dividend. The company remains committed to retaining high-quality debt ratings.
Summarized Financial Information for Guarantee of Securities of Subsidiaries CUSA issued bonds that are fully and unconditionally guaranteed on an unsecured basis by Chevron Corporation (together, the “Obligor Group”). The tables below contain summary financial information for Chevron Corporation, as Guarantor, excluding its consolidated subsidiaries, and CUSA, as the issuer, excluding its consolidated subsidiaries. The summary financial information of the Obligor Group is presented on a combined basis, and transactions between the combined entities have been eliminated. Financial information for non-guarantor entities has been excluded. In the nine months ended September 30, 2024, the Obligor Group recognized an increase in “Net income (loss)” and reduction in “Current liability- related party” and “Total net equity (deficit)” following the resolution of outstanding balances with subsidiaries outside of the Obligor Group.
| Nine Months Ended September 30, 2024 | Year Ended December 31, 2023 | ||||||||||
| (Millions of dollars) (unaudited) | |||||||||||
| Sales and other operating revenues | $ | 72,362 | $ | 100,405 | |||||||
| Sales and other operating revenues - related party | 32,438 | 44,553 | |||||||||
| Total costs and other deductions | 74,815 | 102,773 | |||||||||
| Total costs and other deductions - related party | 26,610 | 35,781 | |||||||||
| Net income (loss) | $ | 45,620 | $ | 12,190 | |||||||
| At September 30, 2024 | At December 31, 2023 | ||||||||||
| (Millions of dollars) (unaudited) | |||||||||||
| Current assets | $ | 16,467 | $ | 19,006 | |||||||
| Current assets - related party | 1,735 | 18,375 | |||||||||
| Other assets | 57,991 | 54,558 | |||||||||
| Current liabilities | 29,269 | 20,512 | |||||||||
| Current liabilities - related party | 40,997 | 132,474 | |||||||||
| Other liabilities | 24,512 | 28,849 | |||||||||
| Total net equity (deficit) | $ | (18,585) | $ | (89,896) | |||||||
Common Stock Repurchase Program On January 25, 2023, the Board of Directors authorized the repurchase of the company’s shares of common stock in an aggregate amount of $75 billion (the “2023 Program”). The 2023 Program took effect on April 1, 2023, and does not have a fixed expiration date. In the aggregate, the company has repurchased 141.4 million shares for $21.9 billion under the 2023 Program, including 32.2 million shares repurchased for $4.7 billion in third quarter 2024. Chevron expects share repurchases in the fourth quarter 2024 to be between $4.0-$4.75 billion.
Repurchases may be made from time to time in the open market, by block purchases, in privately negotiated transactions or in such other manner as determined by the company. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the company’s shares, general market and economic conditions, and other factors. The stock repurchase program and any forward guidance as to expected repurchases do not obligate the company to acquire any particular amount of common stock, and the program may be discontinued or resumed at any time.
Noncontrolling Interests The company had noncontrolling interests of $828 million at September 30, 2024, and $972 million at December 31, 2023. Included within noncontrolling interests is $166 million at December 31, 2023, of redeemable noncontrolling interest.
Financial Ratios and Metrics
| At September 30, 2024 | At December 31, 2023 | |||||||||||||||||||
| Current Ratio (1) | 1.1 | 1.3 | ||||||||||||||||||
| Debt Ratio | 14.2 | % | 11.5 | % | ||||||||||||||||
| Net Debt Ratio (2) | 11.9 | % | 7.3 | % |
(1) At September 30, 2024, the book value of inventory was lower than replacement cost.
(2) Net Debt Ratio for September 30, 2024 is calculated as short-term debt of $5.1 billion plus long-term debt of $20.7 billion (together, “total debt”) less cash and cash equivalents, time deposits and marketable securities of $4.7 billion as a percentage of total debt less cash and cash equivalents, time deposits and marketable securities, plus Chevron Corporation Stockholders’ Equity of $156.2 billion. For the December 31, 2023 calculation, please refer to page 51 of Chevron’s 2023 Annual Report on Form 10-K.
| Nine Months Ended September 30 | |||||||||||||||||||||||
| 2024 | 2023 | ||||||||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||||||
| Net cash provided by operating activities | $ | 22,797 | $ | 23,175 | |||||||||||||||||||
| Less: Capital expenditures | (12,110) | (11,468) | |||||||||||||||||||||
| Free Cash Flow | $ | 10,687 | $ | 11,707 |
Pension Obligations Information related to pension plan contributions is included in Note 8 Employee Benefits to the Consolidated Financial Statements.
Capital Expenditures The company’s capital expenditures (capex) primarily includes additions to fixed assets or investments for the company’s consolidated subsidiaries and is disclosed in the Consolidated Statement of Cash Flows. Third quarter 2024 capex was $618 million lower than third quarter 2023 largely due to the absence of the acquisition of a majority stake in ACES Delta, LLC and year-to-date 2024 capex was $642 million higher than the year-ago period due to higher investments in upstream, including post-acquisition spend on legacy PDC assets.
Affiliate Capital Expenditures The company’s affiliate capital expenditures (affiliate capex) primarily includes additions to fixed assets or investments in the equity affiliate’s financial statements and does not require cash outlays by the company. Third quarter 2024 affiliate capex was $274 million lower than third quarter 2023 and year-to-date 2024 affiliate capex was $870 million lower than the year-ago period.
| Capex and Affiliate Capex by Business Segment | |||||||||||||||||||||||
| Three Months Ended September 30 | Nine Months Ended September 30 | ||||||||||||||||||||||
| 2024 | 2023 | 2024 | 2023 | ||||||||||||||||||||
| Capex | (Millions of dollars) | ||||||||||||||||||||||
| United States | |||||||||||||||||||||||
| Upstream | $ | 2,349 | $ | 3,020 | $ | 7,126 | $ | 7,234 | |||||||||||||||
| Downstream | 349 | 408 | 1,116 | 1,118 | |||||||||||||||||||
| All Other | 93 | 97 | 274 | 218 | |||||||||||||||||||
| Total United States | 2,791 | 3,525 | 8,516 | 8,570 | |||||||||||||||||||
| International | |||||||||||||||||||||||
| Upstream | 1,212 | 1,080 | 3,462 | 2,742 | |||||||||||||||||||
| Downstream | 47 | 66 | 124 | 144 | |||||||||||||||||||
| All Other | 5 | 2 | 8 | 12 | |||||||||||||||||||
| Total International | 1,264 | 1,148 | 3,594 | 2,898 | |||||||||||||||||||
| Capex | $ | 4,055 | $ | 4,673 | $ | 12,110 | $ | 11,468 | |||||||||||||||
| Affiliate Capex | |||||||||||||||||||||||
| Upstream | $ | 329 | $ | 539 | $ | 1,110 | $ | 1,793 | |||||||||||||||
| Downstream | 236 | 300 | 704 | 891 | |||||||||||||||||||
| Affiliate Capex | $ | 565 | $ | 839 | $ | 1,814 | $ | 2,684 |
Contingencies and Significant Litigation
Climate Change Information related to climate change-related matters is included in Note 11 Litigation under the heading “Climate Change.”
Louisiana Information related to Louisiana coastal matters is included in Note 11 Litigation under the heading “Louisiana.”
Income Taxes Information related to income tax contingencies is included in Note 10 Income Taxes and in Note 12 Other Contingencies and Commitments under the heading “Income Taxes.”
Guarantees Information related to the company’s guarantees is included in Note 12 Other Contingencies and Commitments under the heading “Guarantees.”
Indemnifications Information related to indemnifications is included in Note 12 Other Contingencies and Commitments under the heading “Indemnifications.”
Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements Information related to the company’s long-term unconditional purchase obligations and commitments is included in Note 12 Other Contingencies and Commitments under the heading “Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements.”
Environmental Information related to environmental matters is included in Note 12 Other Contingencies and Commitments under the heading “Environmental.”
Acquisition and Disposition of Assets Information related to the company’s acquisition and disposition of assets is included in Note 12 Other Contingencies and Commitments under the heading “Acquisition and Disposition of Assets.”
Other Contingencies Information related to the company’s other contingencies is included in Note 12 Other Contingencies and Commitments under the heading “Other Contingencies.”
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