http://www.morningstar.com/earnings/51408271-chevron-corp-cvx-q1-2013.aspx

Chevron Corp CVX
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/26/2013

Operator: Good morning. My name is Sean and I will be your conference facilitator today. Welcome to Chevron's First Quarter 2013 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session and instructions will be given at that time. As a reminder, this conference call is being recorded.

I will now turn the conference call over to the Vice President and Chief Financial Officer of Chevron Corporation, Ms. Patty Yarrington. Please go ahead.

Patricia E. Yarrington - VP and CFO: Okay. Good morning, everyone, and thank you Sean. Welcome to Chevron's first quarter earnings conference call and webcast. On the call with me today is Jeff Gustavson, General Manager, Investor Relations. We'll refer to the slides that are available on Chevron's website.

Before we get started, please be reminded that this presentation contains estimates, projections, and other forward-looking statements. We ask that you review the cautionary statement shown on Slide 2.

Slide 3 provides an overview of our financial performance. The Company's first quarter earnings were $6.2 billion or $3.18 per diluted share. Return on capital employed for the trailing 12 months was 18%. Our debt ratio at the end of March was approximately 9%. In the first quarter we repurchased $1.25 billion of our shares. In the second quarter we expect to repurchase the same amount.

Turning to Slide 4, this week Chevron's Board of Directors declared a $1 per share quarterly common stock dividend payable in mid-June. This is an 11% increase and reflects the performance and strength of our current portfolio and our confidence in our compelling growth prospects. Since 2004 our dividend has grown at a compound annual rate of 11%, a growth rate that is well in excess of the S&P 500 and better than our peers. You can see this on the left chart. This pattern demonstrates the priority we place on rewarding our investors through increasing distributions.

The chart on the right provides updated information on five-year rolling total return to shareholders through the end of the first quarter. Our strong financial and operational performance and superior growth prospects for both production and value are being recognized by the market. We have led on this rolling total shareholder return for an extended period of time now, and we are off to a strong start in 2013.

Turning to Slide 5. Cash generated from operations was $5.7 billion during the first quarter, a lower level than it has been in some time. This was primarily the result of working capital impact. Overall, working capital requirements for the Company increased by $3.4 billion in the quarter. This working capital consumption of cash was principally in our Downstream operations. This is not an atypical pattern for us for the first quarter of the year, so this quarter’s increase in working capital requirements is larger than we have usually seen. The increase reflects the timing and pricing of commodity purchases and sales between quarters, as well as the operational downtime we had at several refineries this quarter.

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