Chevron 2011 Annual Report Download - page 11

Financial Table of Contents
Management’s Discussion and Analysis of
Financial Condition and Results of Operations
Key Financial Results 10
Earnings by Major Operating Area 10
Business Environment and Outlook 10
Operating Developments 13
Results of Operations 14
Consolidated Statement of Income 16
Selected Operating Data 18
Liquidity and Capital Resources 18
Financial Ratios 20
Guarantees, Off-Balance-Sheet Arrangements and Contractual
Obligations, and Other Contingencies 20
Financial and Derivative Instruments 21
Transactions With Related Parties 22
Litigation and Other Contingencies 22
Environmental Matters 23
Critical Accounting Estimates and Assumptions 24
New Accounting Standards 27
Quarterly Results and Stock Market Data 28
Notes to the Consolidated Financial Statements
Note 1 Summary of Significant Accounting Policies 36
Note 2 Acquisition of Atlas Energy, Inc. 38
Note 3 Noncontrolling Interests 39
Note 4 Information Relating to the Consolidated
Statement of Cash Flows 39
Note 5 Summarized Financial Data – Chevron U.S.A. Inc. 40
Note 6 Summarized Financial Data –
Chevron Transport Corporation Ltd. 41
Note 7 Summarized Financial Data – Tengizchevroil LLP 41
Note 8 Lease Commitments 41
Note 9 Fair Value Measurements 42
Note 10 Financial and Derivative Instruments 44
Note 11 Operating Segments and Geographic Data 45
Note 12 Investments and Advances 47
Note 13 Properties, Plant and Equipment 49
Note 14 Litigation 49
Note 15 Taxes 51
Note 16 Short-Term Debt 54
Note 17 Long-Term Debt 54
Note 18 New Accounting Standards 55
Note 19 Accounting for Suspended Exploratory Wells 55
Note 20 Stock Options and Other Share-Based Compensation 56
Note 21 Employee Benefit Plans 57
Note 22 Equity 63
Note 23 Restructuring and Reorganization 63
Note 24 Other Contingencies and Commitments 64
Note 25 Asset Retirement Obligations 66
Note 26 Other Financial Information 66
Note 27 Earnings Per Share 67
Five-Year Financial Summary 68
Five-Year Operating Summary 69
Supplemental Information on Oil and Gas Producing Activities 70
Consolidated Financial Statements
Report of Management 29
Report of Independent Registered Public Accounting Firm 30
Consolidated Statement of Income 31
Consolidated Statement of Comprehensive Income 32
Consolidated Balance Sheet 33
Consolidated Statement of Cash Flows 34
Consolidated Statement of Equity 35
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This Annual Report of Chevron Corporation contains forward-looking state-
ments relating to Chevron’s operations that are based on management’s
current expectations, estimates and projections about the petroleum,
chemicals and other energy-related industries. Words such as “anticipates,”
“expects,” “intends,” “plans,” “targets,” “projects,” “believes,” “seeks,”
“schedules,” “estimates,” “budgets” 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, some 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 under-
takes 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; changing refining, marketing and chemical margins;
actions of competitors or regulators; timing of exploration expenses; timing of
crude oil liftings; the competitiveness of alternate-energy sources or product
substitutes; technological developments; the results of operations and financial
condition of equity affiliates; 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 net production or manufacturing
facilities or delivery/transportation networks due to war, accidents, political
events, civil unrest, severe weather or crude oil production quotas that might
be imposed by the Organization of Petroleum Exporting Countries; the
potential liability for remedial actions or assessments under existing or future
environmental regulations and litigation; significant investment or product
changes under existing or future environmental statutes, regulations and
litigation; the potential liability resulting from other pending or future
litigation; the company’s future acquisition or disposition of assets and gains
and losses from asset dispositions or impairments; government-mandated
sales, divestitures, recapitalizations, industry-specific taxes, changes in fiscal
terms or restrictions on scope of company operations; foreign currency
movements compared with the U.S. dollar; the effects of changed accounting
rules under generally accepted accounting principles promulgated by rule-
setting bodies. In addition, such results could be affected by general domestic
and international economic and political conditions. Other unpredictable or
unknown factors not discussed in this report could also have material adverse
effects on forward-looking statements.
Cautionary Statement Relevant to Forward-Looking Information
for the Purpose of “Safe Harbor” Provisions of the Private Securities
Litigation Reform Act of 1995
Chevron Corporation 2011 Annual Report 9