Chevron(CVX) - 2024 Q2 - Quarterly Results

Q2 2024 Earnings Overview Financial and Operational Summary The company reported Q2 2024 earnings of $4.4 billion, with record Permian production driving an 11% increase in worldwide output Q2 2024 Key Financial Metrics | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Reported Earnings | $4.4B | $6.0B | -26.7% | | Adjusted Earnings | $4.7B | $5.8B | -19.0% | | Reported EPS (Diluted) | $2.43 | $3.20 | -24.1% | | Adjusted EPS (Diluted) | $2.55 | $3.08 | -17.2% | | Cash Returned to Shareholders | $6.0B | N/A | N/A | - Worldwide net oil-equivalent production increased by 11% year-over-year to 3,292 MBOED, driven by the successful integration of PDC Energy and strong performance in the Permian and DJ Basins[3][4] - The company returned $6.0 billion in cash to shareholders during the quarter, comprising $3.0 billion in dividends and $3.0 billion in share repurchases, marking over $50 billion returned in the last two years[1][5] Financial Highlights Lower refined product margins and the absence of prior-year tax benefits drove a year-over-year earnings decline - Key drivers for the earnings decline compared to Q2 2023 were lower refined product margins, the absence of prior year favorable tax items, and negative foreign currency effects[5] - Capital expenditure (Capex) increased in Q2 2024 compared to the prior year, mainly due to higher upstream investments, including spending on legacy PDC assets[5] - The company declared a quarterly dividend of $1.63 per share, payable on September 10, 2024[5] Business Highlights and Milestones The company expanded its global exploration portfolio and advanced key operational projects at its Tengizchevroil affiliate - Expanded global exploration acreage with new agreements in several key offshore basins including Namibia, Angola, Equatorial Guinea, and Brazil[6] - Progressed the Wellhead Pressure Management Project at the Tengizchevroil affiliate, bringing three pressure boost facility compressors online[6] Segment Performance Upstream Upstream earnings declined as strong U.S. performance was more than offset by lower international results U.S. Upstream U.S. upstream earnings rose significantly, driven by a 29% production increase from the PDC acquisition and record Permian output U.S. Upstream Performance (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Earnings | $2,161 MM | $1,640 MM | +31.8% | | Net Oil-Equivalent Production | 1,572 MBOED | 1,219 MBOED | +29.0% | | Liquids Realization (/BBL) | $59.85 | $56.29 | +6.3% | | Natural Gas Realization (/MCF) | $0.76 | $1.23 | -38.2% | - The increase in U.S. net oil-equivalent production by 353,000 barrels per day from the previous year was mainly attributed to the successful integration of PDC and record-high production in the Permian Basin[8] International Upstream International upstream earnings decreased due to the absence of prior-year tax benefits and lower sales volumes International Upstream Performance (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Earnings | $2,309 MM | $3,296 MM | -30.0% | | Net Oil-Equivalent Production | 1,720 MBOED | 1,740 MBOED | -1.1% | | Liquids Realization (/BBL) | $74.92 | $68.06 | +10.1% | | Natural Gas Realization (/MCF) | $6.86 | $7.50 | -8.5% | - Net oil-equivalent production decreased by 20,000 barrels per day year-over-year, mainly due to downtime in Australia and the company's exit from Myanmar[10] Downstream Downstream earnings fell sharply across both U.S. and international segments, primarily due to reduced refined product margins U.S. Downstream U.S. downstream earnings dropped significantly due to lower margins, higher operating expenses, and reduced refinery inputs U.S. Downstream Performance (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Earnings | $280 MM | $1,081 MM | -74.1% | | Refinery Crude Unit Inputs | 900 MBD | 985 MBD | -8.6% | | Refined Product Sales | 1,327 MBD | 1,295 MBD | +2.5% | International Downstream International downstream earnings decreased due to lower refined product margins, though refinery inputs saw a slight increase International Downstream Performance (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Earnings | $317 MM | $426 MM | -25.6% | | Refinery Crude Unit Inputs | 650 MBD | 634 MBD | +2.5% | | Refined Product Sales | 1,485 MBD | 1,453 MBD | +2.2% | All Other The 'All Other' segment reported a higher net charge compared to the prior year, driven by unfavorable tax items - The 'All Other' segment consists of worldwide cash management, debt financing, corporate administrative functions, insurance operations, real estate, and technology companies[14] All Other Net Charges (Q2 2024 vs. Q2 2023) | Metric | Q2 2024 | Q2 2023 | Change | | :--- | :--- | :--- | :--- | | Net Charges | $(633) MM | $(433) MM | +46.2% | Financial Statements and Reconciliations Consolidated Statement of Income Higher total revenues were offset by increased costs, resulting in a year-over-year decline in net income Q2 2024 Income Statement Highlights (in Millions) | Line Item | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Total Revenues and Other Income | $51,181 | $48,896 | | Total Costs and Other Deductions | $44,145 | $41,059 | | Income Before Income Tax | $7,036 | $7,837 | | Net Income Attributable to Chevron | $4,434 | $6,010 | Selected Balance Sheet Data Total assets remained stable while total debt increased, leading to higher debt and net debt ratios as of June 30, 2024 Balance Sheet and Ratio Comparison | Metric | June 30, 2024 | Dec 31, 2023 | | :--- | :--- | :--- | | Total Assets | $260,644 MM | $261,632 MM | | Total Debt | $23,184 MM | $20,836 MM | | Debt Ratio | 12.7% | 11.5% | | Net Debt Ratio | 10.7% | 7.3% | Summarized Statement of Cash Flows Operating cash flow remained flat year-over-year, with free cash flow of $2.3 billion after capital expenditures Q2 2024 Cash Flow Highlights (in Billions) | Metric | Q2 2024 | Q2 2023 | | :--- | :--- | :--- | | Net Cash Provided by Operating Activities | $6.3 | $6.3 | | Capital Expenditures | $(4.0) | $(3.8) | | Free Cash Flow | $2.3 | $2.5 | | Net Cash Used for Financing Activities | $(4.6) | $(8.7) | Reconciliation of Non-GAAP Measures Adjusted earnings for Q2 2024 were $4.7 billion after excluding a $243 million negative impact from foreign currency effects Q2 2024 Earnings Reconciliation (in Millions) | Item | Amount | | :--- | :--- | | Reported Net Income | $4,434 | | Special Items | $0 | | Foreign Currency Effects | $243 | | Adjusted Earnings | $4,677 | Supplementary Information Notice and Forward-Looking Statements This section provides earnings call details and cautions that forward-looking statements are subject to significant risks and uncertainties - An analyst call to discuss Q2 2024 earnings is scheduled for Friday, August 2, 2024, at 8:00 a.m. PT, with a webcast available on the company's investor relations website[17] - The report contains forward-looking statements that are not guarantees of future performance and are subject to risks, including changing oil and gas prices, geopolitical conflicts, and potential delays or failure to consummate the Hess Corporation transaction[22] - The company provides definitions for non-GAAP financial measures used in the report, such as adjusted earnings, free cash flow, and net debt ratio, and directs investors to reconciliations in the attachments[18]