Chevron 2008 Annual Report Download - page 68

66 Chevron Corporation 2008 Annual Report
The major components of “Capital expenditures” and
the reconciliation of this amount to the reported capital and
exploratory expenditures, including equity affiliates, are
presented in the following table:
Year ended December 31
2008 2007 2006
Additions to properties, plant
and equipment* $ 18,495 $ 16,127 $ 12,800
Additions to investments 1,051 881 880
Current-year dry hole expenditures 320 418 400
Payments for other liabilities
and assets, net (200) (748) (267)
Capital expenditures 19,666 16,678 13,813
Expensed exploration expenditures 794 816 844
Assets acquired through capital
lease obligations and other
financing obligations 9 196 35
Capital and exploratory expenditures,
excluding equity affiliates 20,469 17,690 14,692
Equity in affiliates’ expenditures 2,306 2,336 1,919
Capital and exploratory expenditures,
including equity affiliates $ 22,775 $ 20,026 $ 16,611
* Net of noncash additions of $5,153 in 2008, $3,560 in 2007 and $440 in 2006.
Note 3
Stockholders’ Equity
Retained earnings at December 31, 2008 and 2007, included
approximately $7,951 and $7,284, respectively, for the com-
pany’s share of undistributed earnings of equity affiliates.
At December 31, 2008, about 109 million shares of
Chevron’s common stock remained available for issuance from
the 160 million shares that were reserved for issuance under
the Chevron Corporation Long-Term Incentive Plan (LTIP).
In addition, approximately 409,000 shares remain available
for issuance from the 800,000 shares of the company’s com-
mon stock that were reserved for awards under the Chevron
Corporation Non-Employee Directors’ Equity Compensation
and Deferral Plan (Non-Employee Directors’ Plan).
Note 4
Summarized Financial Data Chevron U.S.A. Inc.
Chevron U.S.A. Inc. (CUSA) is a major subsidiary of
Chevron Corporation. CUSA and its subsidiaries manage
and operate most of Chevron’s U.S. businesses. Assets include
those related to the exploration and production of crude oil,
natural gas and natural gas liquids and those associated with
the refining, marketing, supply and distribution of products
derived from petroleum, excluding most of the regulated
pipeline operations of Chevron. CUSA also holds the com-
pany’s investment in the Chevron Phillips Chemical
Company LLC joint venture, which is accounted for using
the equity method.
In accordance with the cash-flow classification requirements
of FAS 123R, Share-Based Payment, the “Net decrease in
operating working capital” includes reductions of $106, $96
and $94 for excess income tax benefits associated with stock
options exercised during 2008, 2007 and 2006, respectively.
These amounts are offset by “Net purchases of treasury
shares.”
In 2008, “Net purchases of other short-term investments”
consist of $367 in restricted cash associated with capital-invest-
ment projects at the company’s Pascagoula, Mississippi, refinery
and the Angola liquefied natural gas project that was invested
in short-term marketable securities and reclassified from “Cash
and cash equivalents” to “Deferred charges and other assets” in
the Consolidated Balance Sheet. In 2007, the company issued
a $650 tax exempt Mississippi Gulf Opportunity Zone Bond
as a source of funds for the Pascagoula Refinery project.
The “Net purchases of treasury shares” represents the cost
of common shares less the cost of shares issued for share-based
compensation plans. Purchases totaled $8,011, $7,036 and
$5,033 in 2008, 2007 and 2006, respectively.
The Consolidated Statement of Cash Flows for 2008
excludes changes to the Consolidated Balance Sheet that did
not affect cash. “Net purchases of treasury shares” excludes
$680 of treasury shares acquired in exchange for a U.S.
upstream property and $280 in cash. The carrying value of
this property in “Properties, plant and equipment” on the
Consolidated Balance Sheet was not significant. The “Increase
in accounts payable and accrued liabilities” excludes a $2,450
increase in “Accrued liabilities” that was offset to “Properties,
plant and equipment” on the Consolidated Balance Sheet.
This amount related to accruals associated with upstream
operating agreements outside the United States. “Capital
expenditures” excludes a $1,400 increase in “Properties, plant
and equipment” (PPE) related to the acquisition of an addi-
tional interest in an equity affiliate that required a change to
the consolidated method of accounting for the investment
during 2008. This addition to PPE was offset primarily by
reductions in “Investments and advances” and working capital
and an increase in “Noncurrent deferred income tax” liabilities.
Refer also to Note 24 beginning on page 89 for a discus-
sion of revisions to the company’s AROs that also did not
involve cash receipts or payments for the three years ending
December 31, 2008.
Note 2 Information Relating to the Consolidated Statement of
Cash Flows – Continued
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts