Chevron 2013 Annual Report Download - page 42

40 Chevron Corporation 2013 Annual Report
Contingent rentals are based on factors other than the pas-
sage of time, principally sales volumes at leased service stations.
Certain leases include escalation clauses for adjusting rentals to
reect changes in price indices, renewal options ranging up to
25 years, and options to purchase the leased property during or
at the end of the initial or renewal lease period for the fair mar-
ket value or other specied amount at that time.
At December 31, 2013, the estimated future minimum
lease payments (net of noncancelable sublease rentals) under
operating and capital leases, which at inception had a non-
cancelable term of more than one year, were as follows:
At December 31
Operating Capital
Leases Leases
Year: 2014 $ 798 $ 45
2015 733 32
2016 594 20
2017 472 17
2018 306 17
ereafter 806 46
Total $ 3,709 $ 177
Less: Amounts representing interest
and executory costs $ (37)
Net present values 140
Less: Capital lease obligations
included in short-term debt (43)
Long-term capital lease obligations $ 97
Note 9
Fair Value Measurements
e three levels of the fair value hierarchy of inputs the com-
pany uses to measure the fair value of an asset or liability are
described as follows:
Level 1: Quoted prices (unadjusted) in active markets
for identical assets and liabilities. For the company,
Level 1 inputs include exchange-traded futures con-
tracts for which the parties are willing to transact at the
exchange-quoted price and marketable securities that
are actively traded.
Level 2: Inputs other than Level 1 that are observable,
either directly or indirectly. For the company, Level 2
inputs include quoted prices for similar assets or liabili-
ties, prices obtained through third-party broker quotes
and prices that can be corroborated with other observ-
able inputs for substantially the complete term of a
contract.
Level 3: Unobservable inputs. e company does not
use Level 3 inputs for any of its recurring fair value
measurements. Level 3 inputs may be required for
the determination of fair value associated with cer-
tain nonrecurring measurements of nonnancial assets
and liabilities.
Note 7 Summarized Financial Data – Tengizchevroil LLP
Note 7
Summarized Financial Data — Tengizchevroil LLP
Chevron has a 50 percent equity ownership interest in
Tengizchevroil LLP (TCO). Refer to Note 12, on page 45,
foradiscussion of TCO operations.
Summarized nancial information for 100 percent of
TCO is presented in the following table:
Year ended December 31
2013 2012 2011
Sales and other operating revenues $ 25,239 $ 23,089 $ 25,278
Costs and other deductions 11,173 10,064 10,941
Net income attributable to TCO 9,855 9,119 10,039
At December 31
2013 2012
Current assets $ 3,598 $ 3,251
Other assets 12,964 12,020
Current liabilities 3,016 2,597
Other liabilities 2,761 3,390
Total TCO net equity $ 10,785 $ 9,284
Note 8
Lease Commitments
Certain noncancelable leases are classied as capital leases,
and the leased assets are included as part of “Properties,
plant and equipment, at cost” on the Consolidated Balance
Sheet. Such leasing arrangements involve crude oil produc-
tion and processing equipment, service stations, bareboat
charters, oce buildings, and other facilities. Other leases
are classied as operating leases and are not capitalized.
e payments on operating leases are recorded as expense.
Details of the capitalized leased assets are as follows:
At December 31
2013 2012
Upstream $ 445 $ 433
Downstream 316 316
All Other – –
Tota l 761 749
Less: Accumulated amortization 523 479
Net capitalized leased assets $ 238 $ 270
Rental expenses incurred for operating leases during
2013, 2012 and 2011 were as follows:
Year ended December 31
2013 2012 2011
Minimum rentals $ 1,049 $ 973 $ 892
Contingent rentals 1 7 11
Tota l 1,050 980 903
Less: Sublease rental income 25 32 39
Net rental expense $ 1,025 $ 948 $ 864
Notes to the Consolidated Financial Statements
Millions of dollars, except per-share amounts