UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Form 10-Q
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QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
| For the quarterly period ended September 30, 2003 | ||
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |
Commission File Number 1-368-2
ChevronTexaco Corporation
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Delaware
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94-0890210 | |
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(State or other jurisdiction of incorporation or organization) |
(I.R.S. Employer Identification Number) |
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6001 Bollinger Canyon Road,
San Ramon, California |
94583 |
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(Address of principal executive
offices)
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(Zip Code) |
Registrant’s telephone number, including area code (925) 842-1000
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 þ No o
Indicate by check mark whether the registrant is an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ 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, 2003 | |||
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Common stock, $.75 par value
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1,068,958,980 | |||
INDEX
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| Cautionary Statements Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995 | 2 | |||||
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PART I FINANCIAL INFORMATION |
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Item 1.
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Consolidated Financial Statements Consolidated Statement of Income for the three months and nine months ended September 30, 2003 and 2002 | 3 | ||||
| Consolidated Statement of Comprehensive Income for the three months and nine months ended September 30, 2003 and 2002 | 4 | |||||
| Consolidated Balance Sheet at September 30, 2003, and December 31, 2002 | 5 | |||||
| Consolidated Statement of Cash Flows for the nine months ended September 30, 2003 and 2002 | 6 | |||||
| Notes to Consolidated Financial Statements | 7-21 | |||||
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Item 2.
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Management’s Discussion and Analysis of Financial Condition and Results of Operations | 22-38 | ||||
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Item 3.
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Quantitative and Qualitative Disclosures About Market Risk | 39 | ||||
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Item 4.
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Controls and Procedures | 39 | ||||
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PART II OTHER INFORMATION |
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Item 1.
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Legal Proceedings | 40 | ||||
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Item 6.
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Listing of Exhibits and Reports on Form 8-K | 40 | ||||
| Signature | 41 | |||||
| Exhibits: Computation of Ratio of Earnings to Fixed Charges | 43 | |||||
| Rule 13a-14(a)/15d-14(a) Certifications | 44-45 | |||||
| Section 1350 Certifications | 46-47 | |||||
1
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; Dynegy’s ability to successfully complete its recapitalization and restructuring plans; 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 war, 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); potential liability resulting from pending or future litigation; the company’s ability to successfully implement the restructuring of its worldwide downstream organization and other business units; the company’s ability to sell or dispose of assets or operations as expected; and the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies. 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.
2
FINANCIAL INFORMATION
| Item 1. | Consolidated Financial Statements |
CHEVRONTEXACO CORPORATION AND SUBSIDIARIES
| Three Months Ended | Nine Months Ended | ||||||||||||||||
| September 30, | September 30, | ||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||
| (Millions of dollars, except per-share amounts) | |||||||||||||||||
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Revenues and Other Income
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Sales and other operating revenues(1)
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$ | 30,163 | $ | 25,681 | $ | 89,900 | $ | 71,748 | |||||||||
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Income (loss) from equity affiliates
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287 | (329 | ) | 767 | (136 | ) | |||||||||||
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Gain from exchange of Dynegy securities
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365 | — | 365 | — | |||||||||||||
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Other income
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155 | 15 | 264 | 243 | |||||||||||||
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Total Revenues and Other Income
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30,970 | 25,367 | 91,296 | 71,855 | |||||||||||||
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Costs and Other Deductions
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Purchased crude oil and products
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18,007 | 14,871 | 53,619 | 41,378 | |||||||||||||
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Operating expenses
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2,321 | 2,118 | 6,041 | 5,569 | |||||||||||||
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Selling, general and administrative expenses
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1,197 | 1,032 | 3,267 | 3,048 | |||||||||||||
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Exploration expenses
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130 | 166 | 432 | 386 | |||||||||||||
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Depreciation, depletion and amortization
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1,409 | 1,514 | 4,062 | 3,960 | |||||||||||||
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Write-down of investment in Dynegy Inc.
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— | 1,094 | — | 1,796 | |||||||||||||
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Merger-related expenses
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— | 111 | — | 413 | |||||||||||||
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Taxes other than on income(1)
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4,418 | 4,369 | 13,261 | 12,286 | |||||||||||||
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Interest and debt expense
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115 | 117 | 363 | 424 | |||||||||||||
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Minority interest
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24 | 13 | 66 | 35 | |||||||||||||
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Total Costs and Other Deductions
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27,621 | 25,405 | 81,111 | 69,295 | |||||||||||||
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Income (Loss) Before Income Tax
Expense
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3,349 | (38 | ) | 10,185 | 2,560 | ||||||||||||
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Income Tax Expense
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1,374 | 866 | 4,494 | 2,332 | |||||||||||||
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Income (Loss) Before Cumulative Effect of
Changes in Accounting Principles
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1,975 | (904 | ) | 5,691 | 228 | ||||||||||||
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Cumulative effect of changes in accounting
principles, net of tax
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— | — | (196 | ) | — | ||||||||||||
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Net Income (Loss)
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$ | 1,975 | $ | (904 | ) | $ | 5,495 | $ | 228 | ||||||||
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Per Share of Common Stock:
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Income (Loss) Before Cumulative Effect of
Changes in Accounting Principles(2)
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— Basic
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$ | 2.02 | $ | (0.85 | ) | $ | 5.52 | $ | 0.22 | |||||||||
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— Diluted
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$ | 2.02 | $ | (0.85 | ) | $ | 5.51 | $ | 0.22 | |||||||||
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Net Income (Loss)(2)
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— Basic
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$ | 2.02 | $ | (0.85 | ) | $ | 5.34 | $ | 0.22 | |||||||||
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— Diluted
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$ | 2.02 | $ | (0.85 | ) | $ | 5.33 | $ | 0.22 | |||||||||
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Dividends
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$ | 0.73 | $ | 0.70 | $ | 2.13 | $ | 2.10 | ||||||||||
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Weighted Average Number of Shares Outstanding
(000s)
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— Basic
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1,062,718 | 1,061,633 | 1,062,333 | 1,060,721 | ||||||||||||||
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— Diluted
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1,064,090 | 1,063,662 | 1,063,801 | 1,062,660 | ||||||||||||||
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(1) Includes consumer excise taxes:
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$ | 1,814 | $ | 1,782 | $ | 5,270 | $ | 5,221 | ||||||||
| (2) The amounts in 2003 include a benefit of $0.16 for the company’s share of a capital stock transaction of its Dynegy Inc. affiliate, which under the applicable accounting rules was recorded directly to the company’s retained earnings and not included in net income for the period. | ||||||||||||||||
See accompanying notes to consolidated financial statements.
3
CHEVRONTEXACO CORPORATION AND SUBSIDIARIES
| Three Months Ended | Nine Months Ended | ||||||||||||||||||
| September 30, | September 30, | ||||||||||||||||||
| 2003 | 2002 | 2003 | 2002 | ||||||||||||||||
| (Millions of dollars) | |||||||||||||||||||
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Net Income (Loss)
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$ | 1,975 | $ | (904 | ) | $ | 5,495 | $ | 228 | ||||||||||
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Other Comprehensive Income
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Currency translation adjustment
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20 | (1 | ) | 31 | 9 | ||||||||||||||
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Unrealized holding gains on
securities:
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Net gain (loss) arising during period
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Before income taxes
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99 | 10 | 392 | (190 | ) | ||||||||||||||
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Income taxes
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— | — | — | 70 | |||||||||||||||
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Reclassification to net income of net recognized
(gain) loss
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Before income taxes
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(365 | ) | — | (365 | ) | 217 | |||||||||||||
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Income taxes
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— | — | — | (76 | ) | ||||||||||||||
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Total
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(266 | ) | 10 | 27 | 21 | ||||||||||||||
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Net derivatives gain (loss) on hedge
transactions:
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Before income taxes
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4 | (3 | ) | 113 | 60 | ||||||||||||||
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Income taxes
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— | — | (40 | ) | (22 | ) | |||||||||||||
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Total
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4 | (3 | ) | 73 | 38 | ||||||||||||||
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Minimum pension liability
adjustment:
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Before income taxes
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— | — | (17 | ) | (85 | ) | |||||||||||||
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Income taxes
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— | — | — | 31 | |||||||||||||||
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Total
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— | — | (17 | ) | (54 | ) | |||||||||||||
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Other Comprehensive (Loss) Income
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(242 | ) | 6 | 114 | 14 | ||||||||||||||
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Comprehensive Income (Loss)
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$ | 1,733 | $ | (898 | ) | $ | 5,609 | $ | 242 | ||||||||||
See accompanying notes to consolidated financial statements.
4
CHEVRONTEXACO CORPORATION AND SUBSIDIARIES
| At September 30, | At December 31, | ||||||||||
| 2003 | 2002 | ||||||||||
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| (Millions of dollars) | |||||||||||
| ASSETS | |||||||||||
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Cash and cash equivalents
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$ | 4,383 | $ | 2,957 | |||||||
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Marketable securities
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844 | 824 | |||||||||
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Accounts and notes receivable
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9,623 | 9,385 | |||||||||
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Inventories:
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Crude oil and petroleum products
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2,070 | 2,019 | |||||||||
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Chemicals
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158 | 193 | |||||||||
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Materials, supplies and other
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486 | 551 | |||||||||
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Total inventories
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2,714 | 2,763 | |||||||||
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Prepaid expenses and other current assets
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1,589 | 1,847 | |||||||||
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Total Current Assets
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19,153 | 17,776 | |||||||||
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Long-term receivables
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1,412 | 1,338 | |||||||||
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Investments and advances
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12,431 | 11,097 | |||||||||
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Properties, plant and equipment, at cost
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107,590 | 105,231 | |||||||||
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Less: accumulated depreciation, depletion and
amortization
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61,674 | 61,076 | |||||||||
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Properties, plant and equipment, net
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45,916 | 44,155 | |||||||||
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Deferred charges and other assets
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2,399 | 2,993 | |||||||||
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Total Assets
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$ | 81,311 | $ | 77,359 | |||||||
| LIABILITIES AND STOCKHOLDERS’ EQUITY | |||||||||||
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Short-term debt
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$ | 1,853 | $ | 5,358 | |||||||
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Accounts payable
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8,067 | 8,455 | |||||||||
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Accrued liabilities
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2,891 | 3,364 | |||||||||
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Federal and other taxes on income
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2,270 | 1,626 | |||||||||
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Other taxes payable
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1,180 | 1,073 | |||||||||
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Total Current Liabilities
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16,261 | 19,876 | |||||||||
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Long-term debt
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11,168 | 10,666 | |||||||||
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Capital lease obligations
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243 | 245 | |||||||||
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Deferred credits and other noncurrent obligations
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7,745 | 4,474 | |||||||||
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Noncurrent deferred income taxes
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5,693 | 5,619 | |||||||||
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Reserves for employee benefit plans
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4,690 | 4,572 | |||||||||
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Minority interests
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267 | 303 | |||||||||