UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Form 10-Q
x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
For the quarterly period ended September 30, 2002
OR
o TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
Commission File Number 1-368-2
ChevronTexaco Corporation
|
Delaware (State or other jurisdiction of incorporation or organization) |
94-0890210 (I.R.S. Employer Identification Number) |
575 Market Street, San Francisco, California
94105 --------------------------------------------------- (Address of principal executive offices) (Zip Code) |
Registrant’s telephone number, including area code (415) 894-7700
NONE
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate the number of shares of each of the issuer’s classes of common stock, as of the latest practicable date:
|
Class
|
Outstanding as of September 30, 2002 | |
|
Common stock, $.75 par value
|
1,068,156,809 |
INDEX
| Page No. | ||||||||
| Cautionary Statements Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 | 1 | |||||||
| PART I. | FINANCIAL INFORMATION | |||||||
| Item 1. | Financial Statements | |||||||
| Consolidated Statement of Income for the three months and nine months ended September 30, 2002 and 2001 | 2 | |||||||
| Consolidated Statement of Comprehensive Income for the three months and nine months ended September 30, 2002 and 2001 | 3 | |||||||
| Consolidated Balance Sheet at September 30, 2002, and December 31, 2001 | 4 | |||||||
| Consolidated Statement of Cash Flows for the nine months ended September 30, 2002 and 2001 | 5 | |||||||
| Notes to Consolidated Financial Statements | 6-18 | |||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | 19-36 | ||||||
| Item 4. | Controls and Procedures | 36 | ||||||
| PART II. | OTHER INFORMATION | |||||||
| Item 1. | Legal Proceedings | 37 | ||||||
| Item 4. | Submission of Matters to a Vote of Security Holders | 37 | ||||||
| Item 6. | Listing of Exhibits and Reports on Form 8-K | 37 | ||||||
| Signature | 37 | |||||||
| Certifications | 38-39 | |||||||
| Exhibit | Computation of Ratio of Earnings to Fixed Charges | 41 | ||||||
CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
This quarterly report on Form 10-Q of ChevronTexaco Corporation contains forward-looking statements relating to ChevronTexaco’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,” “estimates” 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 our 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. You should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, ChevronTexaco undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the factors that could cause actual results to differ materially are crude oil and natural gas prices; refining margins and marketing margins; chemicals prices and competitive conditions affecting supply and demand for aromatics, olefins and additives products; actions of competitors; the competitiveness of alternate energy sources or product substitutes; technological developments; the results of operations and financial condition of equity affiliates; future developments in the energy-trading business sector and their effects on the operations of the company and its Dynegy affiliate; Dynegy’s ability to successfully execute its recapitalization and restructuring plans and the results of Dynegy’s re-audit of its 1999-2001 financial statements; inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; potential failure to achieve expected production from existing and future oil and gas development projects; potential delays in the development, construction or start-up of planned projects; potential disruption or interruption of the company’s production or manufacturing facilities due to accidents, political events or severe weather; potential liability for remedial actions under existing or future environmental regulations and litigation; significant investment or product changes under existing or future environmental regulations (including, particularly, regulations and litigation dealing with gasoline composition and characteristics); and potential liability resulting from pending or future litigation. In addition, such statements could be affected by general domestic and international economic and political conditions. Unpredictable or unknown factors not discussed herein also could have material adverse effects on forward-looking statements.
–1–
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
CHEVRONTEXACO CORPORATION AND SUBSIDIARIES
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||
| Millions of Dollars, Except Per-Share Amounts | 2002 | 2001 | 2002 | 2001 | |||||||||||||||
| Revenues and Other Income | |||||||||||||||||||
| Sales and other operating revenues1 | $ | 25,681 | $ | 25,430 | $ | 71,748 | $ | 83,170 | |||||||||||
| (Loss) income from equity affiliates | (193 | ) | 320 | — | 1,182 | ||||||||||||||
| Other income | 15 | 217 | 243 | 433 | |||||||||||||||
| Total Revenues and Other Income | 25,503 | 25,967 | 71,991 | 84,785 | |||||||||||||||
| Costs and Other Deductions | |||||||||||||||||||
| Purchased crude oil and products | 14,871 | 14,431 | 41,378 | 48,599 | |||||||||||||||
| Operating expenses | 2,118 | 1,939 | 5,569 | 5,661 | |||||||||||||||
| Selling, general and administrative expenses | 1,032 | 964 | 3,048 | 2,749 | |||||||||||||||
| Exploration expenses | 166 | 168 | 386 | 579 | |||||||||||||||
| Depreciation, depletion and amortization | 1,514 | 1,172 | 3,960 | 3,497 | |||||||||||||||
| Write-down of investments in equity affiliates | 1,230 | — | 1,932 | — | |||||||||||||||
| Merger-related expenses | 111 | 83 | 413 | 156 | |||||||||||||||
| Taxes other than on income1 | 4,369 | 4,023 | 12,286 | 11,600 | |||||||||||||||
| Interest and debt expense | 117 | 186 | 424 | 662 | |||||||||||||||
| Minority interest | 13 | 18 | 35 | 90 | |||||||||||||||
| Total Costs and Other Deductions | 25,541 | 22,984 | 69,431 | 73,593 | |||||||||||||||
| (Loss) Income Before Income Tax Expense | (38 | ) | 2,983 | 2,560 | 11,192 | ||||||||||||||
| Income Tax Expense | 866 | 1,218 | 2,332 | 4,886 | |||||||||||||||
| Net (Loss) Income Before Extraordinary Item | (904 | ) | 1,765 | 228 | 6,306 | ||||||||||||||
| Extraordinary loss, net of income tax | — | (496 | ) | — | (496 | ) | |||||||||||||
| Net (Loss) Income | $ | (904 | ) | $ | 1,269 | $ | 228 | $ | 5,810 | ||||||||||
| Per Share of Common Stock: | |||||||||||||||||||
| Net (Loss) Income Before | |||||||||||||||||||
|
Extraordinary Item
|
– Basic | $ | (0.85 | ) | $ | 1.66 | $ | 0.22 | $ | 5.95 | |||||||||
| – Diluted | $ | (0.85 | ) | $ | 1.66 | $ | 0.22 | $ | 5.94 | ||||||||||
|
Net (Loss) Income
|
– Basic | $ | (0.85 | ) | $ | 1.19 | $ | 0.22 | $ | 5.48 | |||||||||
| – Diluted | $ | (0.85 | ) | $ | 1.19 | $ | 0.22 | $ | 5.47 | ||||||||||
| Dividends | $ | .70 | $ | .65 | 2 | $ | 2.10 | $ | 1.95 | 2 | |||||||||
| Weighted Average Number of | |||||||||||||||||||
| Shares Outstanding (000s) – Basic | 1,061,633 | 1,060,955 | 1,060,721 | 1,059,879 | |||||||||||||||
| – Diluted | 1,063,662 | 1,062,080 | 1,062,660 | 1,062,876 | |||||||||||||||
| 1 Includes consumer excise taxes: | $ | 1,782 | $ | 1,680 | $ | 5,221 | $ | 4,913 | |||||||||||
| 2 Chevron Corporation pre-merger dividend rate | |||||||||||||||||||
See accompanying notes to consolidated financial statements.
–2–
CHEVRONTEXACO CORPORATION AND SUBSIDIARIES
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30 | September 30 | ||||||||||||||||||
| Millions of Dollars | 2002 | 2001 | 2002 | 2001 | |||||||||||||||
|
Net (Loss) Income
|
$ | (904 | ) | $ | 1,269 | $ | 228 | $ | 5,810 | ||||||||||
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Other Comprehensive Income
|
|||||||||||||||||||
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Currency translation adjustment
|
(1 | ) | 14 | 9 | 1 | ||||||||||||||
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Unrealized holding gains on securities:
|
|||||||||||||||||||
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Net gain (loss) arising during period
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|||||||||||||||||||
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Before income taxes
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10 | 22 | (190 | ) | 31 | ||||||||||||||
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Income taxes
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— | — | 70 | — | |||||||||||||||
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Reclassification to net income of net recognized
loss
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|||||||||||||||||||
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Before income taxes
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— | — | 217 | — | |||||||||||||||
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Income taxes
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— | — | (76 | ) | — | ||||||||||||||
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Total
|
10 | 22 | 21 | 31 | |||||||||||||||
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Net derivatives (loss) gain on hedge
transactions: transactions:
|
|||||||||||||||||||
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Before income taxes
|
(3 | ) | (7 | ) | 60 | 1 | |||||||||||||
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Income taxes
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— | 3 | (22 | ) | — | ||||||||||||||
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Total
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(3 | ) | (4 | ) | 38 | 1 | |||||||||||||
|
Minimum pension liability adjustment:
|
|||||||||||||||||||
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Before income taxes
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— | — | (85 | ) | 14 | ||||||||||||||
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Income taxes
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— | — | 31 | (5 | ) | ||||||||||||||
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Total
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— | — | (54 | ) | 9 | ||||||||||||||
|
Other Comprehensive Income
|
6 | 32 | 14 | 42 | |||||||||||||||
|
Comprehensive (Loss) Income
|
$ | (898 | ) | $ | 1,301 | $ | 242 | $ | 5,852 | ||||||||||
See accompanying notes to consolidated financial statements.
–3–
CHEVRONTEXACO CORPORATION AND SUBSIDIARIES
| At September 30 | At December 31 | |||||||||
| Millions of Dollars | 2002 | 2001 | ||||||||
| (Unaudited) | ||||||||||
|
ASSETS
|
||||||||||
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Cash and cash equivalents
|
$ | 2,767 | $ | 2,117 | ||||||
|
Marketable securities
|
811 | 1,033 | ||||||||
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Accounts and notes receivable
|
9,000 | 8,279 | ||||||||
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Inventories:
|
||||||||||
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Crude oil and petroleum products
|
2,285 | 2,207 | ||||||||
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Chemicals
|
201 | 209 | ||||||||
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Materials, supplies and other
|
531 | 532 | ||||||||
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Total inventories
|
3,017 | 2,948 | ||||||||
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Prepaid expenses and other current assets
|
2,180 | 1,769 | ||||||||
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Assets held for sale – merger related
|
— | 2,181 | ||||||||
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Total Current Assets
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17,775 | 18,327 | ||||||||
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Long-term receivables
|
1,340 | 1,225 | ||||||||
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Investments and advances
|
10,974 | 12,252 | ||||||||
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Properties, plant and equipment, at cost
|
103,791 | 99,943 | ||||||||
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Less: accumulated depreciation, depletion and
amortization
|
59,929 | 56,710 | ||||||||
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Properties, plant and equipment, net
|
43,862 | 43,233 | ||||||||
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Deferred charges and other assets
|
2,496 | 2,535 | ||||||||
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Total Assets
|
$ | 76,447 | $ | 77,572 | ||||||
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LIABILITIES AND STOCKHOLDERS’
EQUITY
|
||||||||||
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Short-term debt
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$ | 5,180 | $ | 8,429 | ||||||
|
Accounts payable
|
7,527 | 6,427 | ||||||||
|
Accrued liabilities
|
2,934 | 3,399 | ||||||||
|
Federal and other taxes on income
|
1,920 | 1,398 | ||||||||
|
Other taxes payable
|
1,123 | 1,001 | ||||||||
|
Total Current Liabilities
|
18,684 | 20,654 | ||||||||
|
Long-term debt
|
11,077 | 8,704 | ||||||||
|
Capital lease obligations
|
260 | 285 | ||||||||
|
Deferred credits and other noncurrent obligations
|
4,700 | 4,394 | ||||||||
|
Noncurrent deferred income taxes
|
5,980 | 6,132 | ||||||||
|
Reserves for employee benefit plans
|
3,327 | 3,162 | ||||||||
|
Minority interests
|
298 | 283 | ||||||||
|
Total Liabilities
|
44,326 | 43,614 | ||||||||
|
Preferred stock (authorized 100,000,000 shares,
$1.00 par value, none issued)
|
— | — | ||||||||
|
Common stock (authorized 4,000,000,000 shares,
$.75 par value, 1,137,021,057 shares issued)
|
853 | 853 | ||||||||
|
Capital in excess of par value
|
4,830 | 4,811< | ||||||||