Chevron 2004 Annual Report Download - page 35
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Please find page 35 of the 2004 Chevron annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.CHEVRONTEXACO CORPORATION 2004 ANNUAL REPORT 33
2004werethehighestinrecentyears.Earningsin2004alsoincluded
abenefitof$40millionrelatedtochangesinincometaxlaws.
Totalinternationalrefinedproductssalesvolumeswere2.4
millionbarrelsperdayin2004,morethan4percenthigherthan
2.3millionin2003andabout10percenthigherthan2.2million
in2002.Weakeconomicconditionsdampenedindustrydemand
in2002.Refertothe“SelectedOperatingData”tableonpage34
forthethree-yearcomparativerefined-productsalesvolumesin
theinternationalareas.
Specialchargesof$189millionin2003includedthewrite-
downoftheBatangasRefineryinthePhilippinesinadvanceofits
conversiontoaproductterminalfacility,employeeseverancecosts
associatedwiththeglobaldownstreamrestructuringandreorga-
nization,theimpairmentofcertainassetsinanticipationoftheir
sale,andthecompany’sshareoflossesfromanassetsaleandasset
impairmentbyanequityaffiliate.Thespecialchargein2002was
forawrite-downofthecompany’sinvestmentinitspubliclytraded
CaltexAustraliaLimitedaffiliatetoitsestimatedfairvalue.
Chemicals
Millionsofdollars 2003 2002
$ 69 $ 86
*Includes Foreign Currency Effects: $ 13 $ 3
Thechemicalssegment
includesthecompany’sOronite
divisionandthecompany’s
50percentshareofitsequity
investmentinChevron
PhillipsChemicalCompany
LLC(CPChem).In2004,results
forthecompany’sOronitesub-
sidiaryimprovedonhighersales
volumes.Earningsin2004for
CPChemincreasedastheresult
ofincreasedchemicalcommodity
marginsandsalesvolumesand
higherequityaffiliateincome.
Protractedweakdemandforcom-
moditychemicalsandindustry
oversupplyconditionssuppressed
earningsforthissegmentin2003
and2002.
AllOther
Millionsofdollars 2003 2002
Charges Before Cumulative Effect of
Changes in Accounting Principles $ (213) $ (3,143)
Cumulative Effect of Accounting
Changes 9 –
$ (204) $ (3,143)
1 Includes Foreign Currency Effects: $ 43 $ 40
2 Includes Special-Item Gains (Charges):
Dynegy-Related $ 325 $ (2,306)
Asset Impairments/Write-offs (84) –
Restructuring and Reorganizations (16) –
Tax Adjustments – 97
Environmental Remediation Provisions – (37)
Merger-Related Expenses – (386)
Total $ 225 $ (2,632)
AllOtherconsistsofthecompany’sinterestinDynegy,coal
miningoperations,powergenerationbusinesses,worldwidecash
managementanddebtfinancingactivities,corporateadministra-
tivefunctions,insuranceoperations,realestateactivities,and
technologycompanies.
Theimprovementbetween2003and2004wasprimarily
associatedwiththecompany’sinvestmentinDynegy,including
gainsfromtheredemptionofcertainDynegysecurities,higher
interestincome,lowerinterestexpense,andfavorablecorporate-
leveltaxadjustments.Thenetchangebetween2002and2003was
largelyattributabletothedifferencesintheeffectofnetspecial
charges.The2003periodalsoincludedlowerinterestexpense
andothercorporatechargescomparedwith2002.
Netspecialgainsin2003includedabenefitof$365mil-
lionfromtheexchangeofthecompany’sinvestmentinDynegy
preferredstockforcashandotherDynegysecurities.Thisbenefit
waspartiallyoffsetbychargesforassetwrite-downsof$84mil-
lion,primarilyinthegasificationbusiness,whichwaslatersold;
$40millionforthecompany’sshareofanassetimpairmentby
Dynegy;andemployeeseverancecostsof$16million.
Specialchargesin2002included$2.3billionrelatedto
Dynegy,composedof$1.6billionforthewrite-downofthecom-
pany’sinvestmentinDynegycommonandpreferredstocktoits
estimatedfairvalueand$680millionforthecompany’sshareof
Dynegy’sownspecialitemsforassetwrite-downsandrevaluations,
andalossonanassetsale.Referalsotopage35for“Information
RelatingtotheCompany’sInvestmentinDynegy.”
Comparativeamountsforcertainincomestatementcategories
areshowninthefollowingtable.Foreachcategory,theamounts
associatedwithspecialitemsinthecomparativeperiodsarealso
indicatedtoassistintheexplanationoftheperiod-to-period
changes.Besidestheinformationinthissection,separately
disclosedonthefaceoftheConsolidatedStatementofIncome
areagainfromtheexchangeofDynegysecurities,merger-
relatedexpenses,write-downofinvestmentsinDynegyandthe
cumulativeeffectofchangesinaccountingprinciples.These
mattersarediscussedelsewhereinMD&AandinNote14tothe
ConsolidatedFinancialStatementsonpage63.
Millionsofdollars 2003 2002
$ 1,029 $ (25)
Memo: Special gains (charges),
before tax 179 (829)
$ 308 $ 222
Memo: Special gains, before tax 217 –
$ 8,500 $ 7,795
Memo: Special charges, before tax 329 259
$ 4,440 $ 4,155
Memo: Special charges, before tax 146 180
$ 5,326 $ 5,169
Memo: Special charges, before tax 286 298
$ 474 $ 565
Memo: Special charges, before tax – –
$ 17,901 $ 16,682
Memo: Special charges, before tax – –
$ 5,294 $ 2,998
Memo: Special charges (benefits) (312) (604)
-150
350
100
50
-50
0
-100
200
150
250
300
0100 02 03
Millions of dollars
Chemicalsearningsimproved
significantlyonhigher
marginsforcommodity
chemicalsandhigheraffiliate
income.
�Includesequityinaffiliates