Chevron 2007 Annual Report Download - page 87

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equipment and facilities, including $1,128 in 2006 for the
estimated costs to dismantle and abandon wells and facilities
damaged by 2005 hurricanes in the U.S. Gulf of Mexico. The
long-term portion of the $8,253 balance at the end of 2007
was $7,555.
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Net income in 2007 included gains of approximately $2,000
relating to the sale of nonstrategic properties. Of this amount,
approximately $1,100 related to downstream assets and $680
related to the sale of the company’s investment in Dynegy Inc.
Other financial information is as follows:
Year ended December 31
2007 2006 2005
Total financing interest and debt costs $ 468 $ 608 $ 542
Less: Capitalized interest 302 157 60
Interest and debt expense $ 166 $ 451 $ 482
Research and development expenses $ 562 $ 468 $ 316
Foreign currency effects* $ (352) $ (219) $ (61)
* Includes $18, $15 and $(2) in 2007, 2006 and 2005, respectively, for the company’s
share of equity affiliates’ foreign currency effects.
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Year ended December 31
2007 2006 2005
Basic EPS Calculation
Income from operations $ 18,688 $ 17,138 $ 14,099
Add: Dividend equivalents paid on stock units – 1 2
Net income available to common stockholders – Basic $ 18,688 $ 17,139 $ 14,101
Weighted-average number of common shares outstanding 2,117 2,185 2,143
Add: Deferred awards held as stock units 1 1 1
Total weighted-average number of common shares outstanding 2,118 2,186 2,144
Per share of common stock
Net income – Basic $ 8.83 $ 7.84 $ 6.58
Diluted EPS Calculation
Income from operations $ 18,688 $ 17,138 $ 14,099
Add: Dividend equivalents paid on stock units – 1 2
Add: Dilutive effects of employee stock-based awards – – 2
Net income available to common stockholders – Diluted $ 18,688 $ 17,139 $ 14,103
Weighted-average number of common shares outstanding 2,117 2,185 2,143
Add: Deferred awards held as stock units 1 1 1
Add: Dilutive effect of employee stock-based awards 14 11 11
Total weighted-average number of common shares outstanding 2,132 2,197 2,155
Per share of common stock
Net income – Diluted $ 8.77 $ 7.80 $ 6.54
The excess of replacement cost over the carrying value of
inventories for which the Last-In, First-Out (LIFO) method
is used was $6,958 and $6,010 at December 31, 2007 and
2006, respectively. Replacement cost is generally based on
average acquisition costs for the year. LIFO profits of $113,
$82 and $34 were included in net income for the years 2007,
2006 and 2005, respectively.
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Basic earnings per share (EPS) is based upon net income
less preferred stock dividend requirements and includes
the effects of deferrals of salary and other compensation
awards that are invested in Chevron stock units by certain
officers and employees of the company and the company’s
share of stock transactions of affiliates, which, under the
applicable accounting rules, may be recorded directly to the
company’s retained earnings instead of net income. Diluted
EPS includes the effects of these items as well as the dilutive
effects of outstanding stock options awarded under the
company’s stock option programs (refer to Note 21, “Stock
Options and Other Share-Based Compensation” beginning
on page 80). The table below sets forth the computation of
basic and diluted EPS: