ТИТУЛЬНЫЙ ЛИСТ
Preface
Chevron Corporation was founded in 1879 and is headquartered in San
Ramon, California. The company was formerly known as ChevronTexaco
Corporation and changed its name to Chevron Corporation in 2005.
Chevron Corporation is an integrated energy company with operations in
countries located around the world: Argentina, Australia, Azerbaijan, Bangladesh,
Brazil, Canada, China, Indonesia, Kazakhstan, Mexico, Singapore, South Korea,
Thailand, the United Kingdom, the United States, and others. The Company
produces and transports crude oil and natural gas. Chevron also refines, markets, and
distributes fuels, as well as is involved in chemical and mining operations, power
generation, and energy services.
The company operates in two segments, Upstream and Downstream. The
Upstream segment is involved in the exploration, development, and production of
crude oil and natural gas; processing, liquefaction, transportation, and regasification
associated with liquefied natural gas; transportation of crude oil through pipelines;
and transportation, storage, and marketing of natural gas, as well as operates a gasto-liquids plant. The Downstream segment engages in refining crude oil into
petroleum products; marketing crude oil and refined products; transporting crude oil
and refined products through pipeline, marine vessel, motor equipment, and rail car;
and manufacturing and marketing commodity petrochemicals, and fuel and lubricant
additives, as well as plastics for industrial uses.
Earnings of the company depend mostly on the profitability of its upstream
business segment. The most significant factor affecting the results of operations for
the upstream segment is the price of crude oil, which is determined in global markets
outside of the company’s control. In the company’s downstream business, crude oil
is the largest cost component of refined products. It is the company’s objective to
deliver competitive results and stockholder value in any business environment.
The company’s most significant marketing areas are the West Coast and Gulf
Coast of the United States and Asia. Chevron operates or has significant ownership
interests in refineries in each of these areas.
I.
General financial position and financial results of the company
At the end of 2019, the book value of the company's assets was about $ 254
billion, with a significant part it (88%) being the non-current assets, while the current
assets account for only 12% of all assets. The structure of assets is rather "heavy";
most of the invested funds are accumulated in low-turnover assets, which, however,
is justified for an industrial enterprise. Moreover, the proportion of current assets is
decreasing, while the specific growth of long-term assets is increasing. The high
proportion of non-current assets implies significant depreciation and overhead costs,
which indicates that profit is sensitive to revenue.
The dynamics of assets shows that the company's assets have been declining
since 2017, which is not a very good sign, since may indicate a reduction in
economic turnover.
300 000
250 000
200 000
150 000
225 246
219 842
28 560
34 021
28 329
2017
2018
2019
209 099
100 000
50 000
0
Current Assets
Long-Term Assets
Company liquidity. Current assets divided by current liabilities, which
indicates the company’s ability to repay its short-term liabilities with short-term
assets. The current ratio in all periods was adversely affected by the fact that
Chevron’s inventories are valued on a last-in, first-out basis. At year-end 2019, the
book value of inventory was lower than replacement costs, based on average
acquisition costs during the year, by approximately $4.5 billion.
The company cannot boast of excellent liquidity, and the value of the current
liquidity ratio is below the recommended value, which indicates possible difficulties
associated with the repayment of current liabilities. Nevertheless, in our opinion, the
liquidity indicators do not indicate any serious problems with the current solvency,
but are due to the specifics of the business. Generally, for Oil and Gas companies,
this is a reasonable ratio since there’s sufficient cash cushion without leaving too
much capital idle or in low-earning investments.
40 000
1,40
1,25
35 000
30 000
1,20
1,03
1,07
25 000
0,80
20 000
15 000
1,00
0,60
34 021
28 56027 737
27 171
28 32926 530
10 000
0,40
5 000
0,20
0
0,00
2017
Current Assets
2018
Current Liabilities
2019
Current Ratio
The Quick and Cash Ratios also show negative dynamics in 2018 -2019,
caused by a decrease in business activity. Using its most liquid assets, the company
can only pay off 17% of its current liabilities. If all debtors of the company pay off
their current accounts, the funds received will also not be enough to pay off all
current liabilities, because the Quick Ratio is 0.73 at the end of 2019.
Capital structure. Equity capital prevails in the company's sources of
financing. The company is 59% financed from its own funds, and the share of equity
in the total capital is constantly increasing. Accordingly, the company's financial
leverage is decreasing, which indicates a decrease in financial risk and an increase
in financial stability.
Financial Leverage is defined as Total Assets / Common Equity. The higher
the ratio, the more debt the company has in its capital structure and is more
susceptible to defaulting on debt payments under poor operating conditions. The
financial leverage ratio and its decline in dynamics indicate that the company's
balance sheet is moderately leveraged, and there is no a high risk of default.
1,70
180 000
1,80
1,64
1,63
160 000
1,60
140 000
1,40
120 000
1,20
100 000
1,00
0,70
80 000
0,80
0,64
0,63
60 000
0,60
40 000
0,40
20 000
0
0,20
104 487
149 319
155 642
98 221
145 208
92 220
0,00
2017
Total Equity
2018
2019
Total Liabilities
D/E
Fin leverage
Assets management efficiency. The Turnover ratios can be one of the
measures for assets management efficiency. The turnover ratios show a positive
trend, which suggests that for every dollar invested in fixed and current assets, the
company began to receive more income revenue. It can be concluded that the
company is effectively managing the assets as their return increases.
6,00
4,96
5,00
5,17
4,89
4,00
3,00
2,00
1,00
0,80
0,98
0,97
0,00
2017
Fixed Assets Turnover Ratio
2018
2019
Current Assets Turnover Ratio
The main purpose of the company in assets management is the strengthening
its base business, keeping the new assets on line and growing production. The
Chevron Corporation invested billions of dollars to develop a large queue of assets
ranging from vast new natural gas projects to reinvigorated century-old oil fields. So
by today Chevron has diversified, high-quality assets around the world that underpin
its financial strength and present opportunities for future development.
Profitability. Gross profit margin indicates the percentage of revenue
available to cover operating and other expenditures. In 2019, this ratio increased
compared to 2018, which means that the rate of revenue growth exceeded the growth
rate of cost of goods sold, and is estimated positively. The dynamics of other
indicators of profitability is negative, which indicates a decrease in the efficiency of
activities. Operating profit margin is a profitability ratio calculated as operating
income divided by revenue. Operating profit margin decreased from 12.82% in 2018
to 4.32% in 2019, i.e., for every dollar of revenue, there are 8.5 cents less operating
profit, which is a negative trend. Net profit margin is an indicator of profitability,
calculated as net income divided by revenue. It also goes down.
The return on assets and equity is also declining. The return on assets and
equity is also declining: the return on assets decreased from 5.85% in 2018 to 1.20%
in 2019, the return on equity decreased from 9.55% in 2018 to 1.96% in Dec 2019
50,00%
46,54%
45,32%
43,14%
45,00%
40,00%
35,00%
30,00%
25,00%
20,00%
12,82%
15,00%
10,00%
6,54% 6,72%
5,00%
8,93%
4,32%
1,94%
1,20%
3,65%
0,00%
2017
Gross Margin
2018
Net Profit Margin
Operating Margin
2019
ROA
ROE
This is how the company itself explains the reasons for the decline in
efficiency in 2019. Price levels for capital, exploratory costs, and operating expenses
associated with the production of crude oil and natural gas can be subject to external
factors beyond the company’s control including, but not limited to: the general level
of inflation, tariffs or other taxes imposed on goods or services, and commoditized
prices charged by the industry’s material and service providers. The spot markets for
many services and materials fell as overall industry drilling activity in North
America declined in 2019, particularly onshore. The international and offshore rig
markets are also showing some signs of weaknesses as activity has pulled back;
however, pricing for some products and services remains resilient as many suppliers
have reset expectations of higher industry spend and instead are looking to higher
pricing and margins on a more limited scope of work. Capital and exploratory
expenditures and operating expenses could also be affected by damage to production
facilities caused by severe weather or civil unrest, delays in construction, or other
factors.
It can be concluded that external factors are the main reasons for the decline
in profitability indicators. 2019 proved to be a tough year for the oil and gas industry,
and many small companies were unprofitable. Therefore, the fact that the scale of
Chevron allowed the company to make a net profit can already be assessed
positively.
Do Pont . The ROE according to Du Pont approach will be calculated as follows1
𝑅𝑂𝐸 =
𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑎𝑓𝑡𝑒𝑟 𝑡𝑎𝑥𝑒𝑠
𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠
∗
∗
𝑁𝑒𝑡 𝑠𝑎𝑙𝑒𝑠
𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡𝑠 𝑆ℎ𝑎𝑟𝑒ℎ𝑜𝑙𝑑𝑒𝑟𝑠 ′ 𝑒𝑞𝑢𝑖𝑡𝑦
𝑅𝑂𝐸 = 𝑁𝑒𝑡 𝑝𝑟𝑜𝑓𝑖𝑡 𝑚𝑎𝑟𝑔𝑖𝑛 ∗ 𝑇𝑜𝑡𝑎𝑙 𝑎𝑠𝑠𝑒𝑡 𝑡𝑢𝑟𝑛𝑜𝑣𝑒𝑟 ∗ 𝐸𝑞𝑢𝑖𝑡𝑦 𝑚𝑢𝑙𝑡𝑖𝑝𝑙𝑖𝑒𝑟
All calculations are made on the basis of data from the company's statements and
are presented in the table below.
Net profit margin
Total asset turnover
Leverage
ROE
2019
1,94%
0,62
1,64
1,96%
2018
8,93%
0,66
1,63
9,55%
2017
6,54%
0,56
1,70
6,21%
As can be seen from the table, the decrease in return on equity in 2019 was
primarily due to a 6.99% decrease of net profit margin and to 0,04% decrease of
asset turnover and despite of 0.01% increase in leverage.
1
Van Horne, Vavovich, Fundamentals of financial management. 2016, p. 151
Profit indicators directly affect the efficiency of operations and profitability,
as well as the growth in the average annual value of all assets and liabilities of the
company.
With this breakdown, it is clear that if a company grows its Net Profit Margin,
its Asset Turnover, or its Equity multiplier (Leverage), it can grow its return on
equity. Moreover, the main task can be designated as an increase in the net profit
margin.
II.
Financial forecasting and modeling.
According to the Sustainable Development scenario put forward by the
International Energy Agency (IEA), oil and gas are set to continue playing a vital
role in meeting the world's energy needs, accounting for nearly half of the primary
energy mix in 2040.
But 2020 will be a year of challenges for the oil and gas industry. Political and
economic risks are growing, among which are:
- Weakening economic growth not only in the United States, but also in
Europe and China;
- Persistent, possibly escalating trade tensions that can create uncertainty, slow
growth and lead to changes in long-established supply chains;
- Many political risks, including the US electoral cycle, the outcome of the
Brexit process in Europe, and tensions in the Middle East between several states and
non-state actors with different goals.
The outbreak of the new coronavirus (COVID-19) has added a major layer of
uncertainty to the oil market outlook at the start of the forecast period 2020-2023. In
2020, global oil demand is expected to contract for the first time since the global
recession of 2009. The situation remains very fluid, however, making it extremely
difficult to assess the full impact of the virus. Ultimately, the outlook for the oil
market will depend on how quickly governments move to contain the coronavirus
outbreak, how successful their efforts are, and what lingering impact the global
health crisis has on economic activity.
Following a contraction in 2020 and an expected sharp rebound in 2021,
global oil demand growth is set to weaken as consumption of transport fuels
increases more slowly.
Given the above circumstances, we assume that the company's revenue
growth in 2020 will not exceed 5%, and in the future, in 2021-2022, an annual
revenue growth of about 10-12% is expected.
Using the percentage of sales method, we have prepared a forecast of the
company's future income, net income and assets.
250 000
3 582
3 296
200 000
3 218
4 000
3 500
2 924
3 000
2 500
150 000
2 000
100 000
1 500
1 000
50 000
500
0
0
2019
2020
Revenue
2021
Assets
2022
Net Income
We do not expect the company to grow rapidly, and this is not the fault of the
management. After all, the oil and gas industry is becoming less in demand. Energy
efficiency technologies (to a greater extent) and alternative energy sources (to a
lesser extent) will lead to a significant decrease in the volume of energy
consumption. At the same time, extracting and manufacturing oil products is a
terribly competitive business.
The cost per barrel of oil, at which production is profitable, is much lower for
Chevron than for many of its competitors. This makes the company quite
competitive amid persistently low oil prices. Therefore, we expect the company to
maintain low but fairly stable margins.
III.
Financial policy.
Investment policy. The company pursues an active investment policy,
primarily purchases long-term assets. For the oil giant, this is a prerequisite for
maintaining and growing its business. The investment cash outflow is constantly
increasing. The company also owns stakes in a number of subsidiaries. The 2020
capital and exploratory program supports investments in Permian Basin position,
Tengizchevroil in Kazakhstan and deepwater opportunities in the Gulf of Mexico.
The company allocates a significant portion of its operating cash flow to
capital expenditures.
35000
30000
25000
20000
15000
10000
5000
0
2017
2018
Operating cash flaw
2019
Capital expenditures
Market value ratios.
Stock price
Number of shares (millions)
EPS
P/E at the year end
Price/Sales
2017
125,19
1882
4,93
25,42
1,66
2018
108,79
1897
7,83
13,89
1,24
2019
120,51
1882
1,51
79,72
1,55
In 2019, the EPS ratio decreased, while the P/E indicator increased, which
indicates a decrease in the efficiency of investments in the company caused by the
downturn in business activity. Most analysts believe that the company's shares are
overvalued, and in 2020 we should expect a decline in the company's shares.
Cost of Equity and WACC. Beta is a measure of risk commonly used to
compare the volatility of stocks, mutual funds, or ETFs to that of the overall market.
The S&P 500 Index is the base for calculating beta with a value of 1.0. Securities
with betas below 1 have historically been less volatile than the market. While
securities with betas above 1, have historically been more volatile than the market.
The beta is calculated using data over a 5-year period.
Chevron’s beta for the end of 2019 is calculated as 0,97. With the risk-free
rate 1,44%2 and the expected return of market portfolio of 12,47%3, Chevron’s
Equity cost = 12,13%.
Equity (market value)
Debt
Debt and Equity
Weight Of Equity
Weight Of Debt
Cost of Debt
Cost of Equity
Tax Rate
WACC
2019
226 800
26 973
253 773
89,37%
10,63%
2,72%
12,13%
94,59%
10,86%
2018
206 375
34 459
240 834
85,69%
14,31%
2,75%
12,13%
38,46%
10,64%
Dividend policy. Chevron has a long history of paying quarterly dividends to
their stockholders. Chevron's Board of Directors reviews the dividend level
regularly. There is no formal dividend policy, and payment of a dividend is solely at
the Board's discretion. The Board is guided by a series of factors in making its
decision regarding the timing and amount of dividend payments. The factors
considered include balancing cash flow, investment needs and the future financial
strength of the corporation. In addition, the desires of stockholders for larger
dividends and Chevron's goal to provide superior returns are considered.
The company has grown its dividend for the last 33 consecutive years and is
increasing its dividend by an average of 3.53% each year.
2
Unweighted average of bid yields on all outstanding fixed-coupon U.S. Treasury bonds neither due or
callable in less than 10 years (risk-free rate of return proxy)
3
https://www.stock-analysis-on.net/NYSE/Market-Risk-Premium
Dividends, mln $
Dividend per share, $
2017
8132
4,32
2018
8502
4,48
2019
8959
4,76
The company is clearly interested in maintaining a positive assessment of its
shareholders, since the significant amounts allocated to dividend payments cannot
always be explained from an economic point of view. So, for example, in 2019 the
company allocated about 300% of its net profit to dividend payments, so its shares
can be considered as a good tool for obtaining dividend yield.
Recomendations.
The company is now focused on developing the largest shale field in Texas.
The shale boom in the United States has triggered a drop in world oil prices, which
OPEC + is fighting against by reducing oil production. Chevron's ambitious plans to
increase shale oil production mean that the US market could continue to put pressure
on world prices in the 2020s. Therefore, in our opinion, the company should shift its
focus.
The recommendations that we would like to give to the company are of
ecological and social nature. In our opinion, the future lies in the development of
solutions aimed at preserving the environment and supporting society. Among them,
special attention should be paid to: respecting biodiversity, preserving freshwater,
conserving energy, improving energy efficiency, reduce emissions, and reduce
flaring. These tasks are capital intensive. Significant investments are required to
develop new programs that minimize environmental risks. But in the end, these costs
will be justified and will lead to an increase in the company's efficiency. New
technologies provide for a significant reduction in the volume of hazardous gases
generated during the production process, the installation of leak detection systems.
Conclusion
There are only three energy companies that are larger than Chevron. They
include Exxon, Royal Dutch Shell, and BP. Chevron is one of the largest and most
reliable companies in the world.
The analysis made it possible to identify the strengths and weaknesses of
Chevron. The strengths of the company are its high financial stability, since the
company is financed mainly by equity capital, positive cash flow, stable dividend
policy, income growth, relatively good liquidity indicators, given the specifics of the
industry. However, in recent years, the company has faced certain difficulties, such
as a slowdown in growth, a decrease in efficiency, which is primarily due to a
slowdown in industry growth and other external factors. The solution to these issues,
in our opinion, lies in the development of technologies aimed at the development of
more environmentally friendly solutions.
Sources of information
1. Van Horne, Vavovich, Fundamentals of financial management. 2016
2. https://www.stock-analysis-on.net/NYSE/Market-Risk-Premium
3. https://www.chevron.com/-/media/chevron/annualreport/2019/documents/2019-Annual-Report.pdf?l=1#page=44
4. http://finance.yahoo.com
5. http://www.msn.com
6. http://www.bondsonline.com
7. http://www.bloomberg.com
Appendices
Consolidated Balance Sheet
Millions of dollars, except per-share amounts
Period Ending:
ASSETS
Current Assets
Cash and Cash Equivalents
Short-Term Investments
Marketable securities
Accounts and notes receivable
Inventories
Prepaid expenses and other current assets
Total Current Assets
Long-Term Assets
Long-term receivables, net
Investments and advances
Properties, plant and equipment, net
Deferred charges and other assets
Goodwill
Assets held for sale
Total Long-term Assets
2 019
5 686
At December 31
2 018
2 017
63
13 325
5 848
3 407
28 329
9 342
950
53
15 050
5 704
2 922
34 021
4 813
9
15 353
5 585
2 800
28 560
1 511
38 688
150 494
10 532
4 463
3 411
209 099
1 942
35 546
169 207
6 766
4 518
1 863
219 842
2 849
32 497
177 712
7 017
4 531
640
225 246
Total Assets
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt
Accounts payable
Accrued liabilities
Federal and other taxes on income
237 428
253 863
253 806
3 282
14 103
6 589
1 554
5 726
13 953
4 927
1 628
5 192
14 565
5 267
1 600
Other taxes payable
Total Current Liabilities
Long-Term Liabilities
Long-Term Debt
Deferred credits and other noncurrent obligations
Noncurrent deferred income taxes
Noncurrent employee benefit plans
Total LT Liabilities
Total Liabilities
Equity
Common Stock
Capital in excess of par value
Retained earnings
Accumulated other comprehensive losses
Deferred compensation and benefit plan trust
1 002
26 530
937
27 171
1 113
27 737
23 691
20 445
13 688
7 866
65 690
92 220
28 733
19 742
15 921
6 654
71 050
98 221
33 571
21 106
14 652
7 421
76 750
104 487
1 832
17 265
174 945
-4 990
-240
1 832
17 112
180 987
-3 544
-240
1 832
16 848
174 106
-3 589
-240
Treasury stock, at cost
Equity Attributable to Shareowners
Noncontrolling interests
Total Equity
Total Liabilities & Equity
-44 599
144 213
995
145 208
237 428
Consolidated Statement of Income
Millions of dollars, except per-share amounts
Period Ending:
Revenues and Other Income
Cost of goods sold
Gross profit
Operating expenses
Selling, general and administrative expenses
Exploration expenses
Depreciation, depletion and amortization
Operating income (EBIT)
Interest and debt expense
Income (Loss) Before Income Tax Expense
Income Tax Expense (Benefit)
Net Income (Loss)
Net income (loss) attributable to noncontrolling interests
Net Income (Loss) Attributable to Chevron Corporation
Consolidated Statement of Cash Flows
Millions of dollars
Period Ending:
2 019
Operating Activities
Net Income
2 845
Depreciation
29 218
Net decrease (increase) in operating
working capital
Other
Net Cash Provided by Operating
Activities
Capital expenditures
-40 833
148 124
1 195
149 319
253 806
At December 31
2 019
2 018
2 017
146 516 166 339 141 722
80 113
94 578
75 765
66 403
71 761
65 957
25 938
25 971
32 106
4 143
3 838
4 110
770
1 210
864
29 218
19 419
19 349
6 334
21 323
9 528
798
748
307
5 536
20 575
9 221
2 691
5 715
-48
2 845
14 860
9 269
-79
36
74
2 924
14 824
9 195
At December 31
2 018
2 017
14 860
19 419
9 269
19 349
-718
-2943
520
-8800
30618
20338
-13792
-13404
2951
2392
5096
950
-950
2
-51
1 494
-6243
27314
Investing Activities
-14116
Proceeds and deposits related to asset
sales and returns of investment
Net maturities of (investments in) time
deposits
Net sales (purchases) of marketable
securities
-41 593
154 554
1 088
155 642
253 863
4
Net repayment (borrowing) of loans by
equity affiliates
-1245
Net Cash Used for Investing Activities
-11458
Financing Activities
Net borrowings (repayments) of shortterm obligations
-2821
Proceeds from issuances of long-term
debt
Repayments of long-term debt and other
financing obligations
Cash dividends - common stock
Distributions to noncontrolling interests
Net sales (purchases) of treasury shares
Net Cash Flow-Financing
Effect of Exchange Rate
Net Cash Flow
-5025
-8959
-18
-2935
-19758
332
-3570
111
-12290
-16
-8320
2021
-5142
218
3991
-6741
-8502
-91
-604
-13699
-91
4538
-6310
-8132
-78
1117
-14554
65
-2471
2019 vs 2018
2018 vs 2017
-39,1%
-100,0%
18,9%
-11,5%
2,5%
16,6%
-16,7%
94,1%
488,9%
-2,0%
2,1%
4,4%
19,1%
-22,2%
8,8%
-11,1%
55,7%
-1,2%
83,1%
-4,9%
-31,8%
9,4%
-4,8%
-3,6%
-0,3%
191,1%
-2,4%
-6,5%
0,02%
-42,7%
1,1%
33,7%
-4,5%
10,3%
-4,2%
-6,5%
1,8%
Horisontal Analysis of Balance Sheet
ASSETS
Current Assets
Cash and Cash Equivalents
Short-Term Investments
Marketable securities
Accounts and notes receivable
Inventories
Prepaid expenses and other current assets
Total Current Assets
Long-Term Assets
Long-term receivables, net
Investments and advances
Properties, plant and equipment, net
Deferred charges and other assets
Goodwill
Assets held for sale
Total Long-term Assets
Total Assets
LIABILITIES AND EQUITY
Current Liabilities
Short-term debt
Accounts payable
Accrued liabilities
Federal and other taxes on income
Other taxes payable
Total Current Liabilities
Long-Term Liabilities
Long-Term Debt
Deferred credits and other noncurrent obligations
Noncurrent deferred income taxes
Noncurrent employee benefit plans
Total LT Liabilities
Total Liabilities
Equity
Common Stock
Capital in excess of par value
Retained earnings
Accumulated other comprehensive losses
Deferred compensation and benefit plan trust
Treasury stock, at cost
Equity Attributable to Shareowners
Noncontrolling interests
Total Equity
Total Liabilities & Equity
6,9%
-2,4%
-15,8%
-2,0%
-17,5%
3,6%
-14,0%
18,2%
-7,5%
-6,1%
-14,4%
-6,5%
8,7%
-10,3%
-7,4%
-6,0%
0,0%
0,9%
-3,3%
40,8%
0,0%
7,2%
-6,7%
-8,5%
-6,7%
-6,5%
0,0%
1,6%
4,0%
-1,3%
0,0%
1,9%
4,3%
-9,0%
4,2%
0,02%
Vertical Analysis of Balance Sheet
Period Ending:
ASSETS
Current Assets
Cash and Cash Equivalents
Short-Term Investments
Marketable securities
Accounts and notes receivable
Inventories
Prepaid expenses and other current assets
Total Current Assets
Long-Term Assets
Long-term receivables, net
Investments and advances
Properties, plant and equipment, net
Deferred charges and other assets
Goodwill
Assets held for sale
Total Long-term Assets
Total Assets
LIABILITIES AND EQUITY
2 019
At December 31
2 018
2 017
2,4%
0,0%
0,0%
5,6%
2,5%
1,4%
11,9%
3,7%
0,4%
0,0%
5,9%
2,2%
1,2%
13,4%
1,9%
0,0%
0,0%
6,0%
2,2%
1,1%
11,3%
0,6%
16,3%
63,4%
4,4%
1,9%
1,4%
88,1%
0,8%
14,0%
66,7%
2,7%
1,8%
0,7%
86,6%
1,1%
12,8%
70,0%
2,8%
1,8%
0,3%
88,7%
100,0%
100,0%
100,0%
Current Liabilities
Short-term debt
Accounts payable
Accrued liabilities
Federal and other taxes on income
Other taxes payable
Total Current Liabilities
Long-Term Liabilities
Long-Term Debt
Deferred credits and other noncurrent obligations
Noncurrent deferred income taxes
Noncurrent employee benefit plans
Total LT Liabilities
Total Liabilities
Equity
Common Stock
Capital in excess of par value
Retained earnings
Accumulated other comprehensive losses
Deferred compensation and benefit plan trust
Treasury stock, at cost
Equity Attributable to Shareowners
Noncontrolling interests
Total Equity
Total Liabilities & Equity
1,4%
5,9%
2,8%
0,7%
2,3%
5,5%
1,9%
0,6%
2,0%
5,7%
2,1%
0,6%
0,4%
11,2%
0,4%
10,7%
0,4%
10,9%
10,0%
8,6%
5,8%
3,3%
27,7%
38,8%
11,3%
7,8%
6,3%
2,6%
28,0%
38,7%
13,2%
8,3%
5,8%
2,9%
30,2%
41,2%
0,8%
7,3%
73,7%
-2,1%
-0,1%
-18,8%
60,7%
0,4%
61,2%
100,0%
0,7%
6,7%
71,3%
-1,4%
-0,1%
-16,4%
60,9%
0,4%
61,3%
100,0%
0,7%
6,6%
68,6%
-1,4%
-0,1%
-16,1%
58,4%
0,5%
58,8%
100,0%
Ratios
Period Ending:
Current Ratio
Quick Ratio (Acid-test)
Cash Ratio
Total Debt to Total Equity
Total Debt to Total Capital
Total Debt to Total Assets
Interest Coverage
Long-Term Debt to Equity
Long-Term Debt to Total Capital
Long-Term Debt to Total Assets
Average collection period
Fixed Assets Turnover Ratio
12/31/2019
Liquidity Ratios
1,07
0,72
0,22
Solvency ratios
0,64
0,16
0,39
7,94
0,16
0,14
0,10
Activity ratios
33,20
0,97
12/31/2018
12/31/2017
1,25
0,93
0,38
1,03
0,73
0,17
0,63
0,18
0,39
28,51
0,18
0,16
0,11
0,70
0,21
0,41
31,04
0,22
0,18
0,13
33,02
0,98
39,54
0,80
Current Assets Turnover Ratio
5,17
Profitability ratios
Gross Margin
45,32%
Net Profit Margin
1,94%
Operating Margin
4,32%
Operating income return on investments
0,03
Equity turnover
1,01
ROA
1,20%
ROE
1,96%
Du Pont breakdown
2019
1,94%
Net profit margin
Total asset turnover
0,62
Leverage
1,64
1,96%
ROE
Cash flow ratios
-0,02
Cash flow to revenue
-0,02
Cash return on assets
-0,02
Cash return on equity
-0,04
Debt covarage
Capital market ratios
1,51
EPS
79,72
P/E at the year end
1,55
Price/Sales
3,15
Dividend payout
4,76
Dividend per share, $
WACC
CAPM (2019)
β
Rrf
Rm
Market Risk Premium
Equity (market value)
Debt
Debt and Equity
12,13%
0,97
1,44%
12,46%
11,02%
2019
226 800
26 973
253 773
2018
206 375
34 459
240 834
Weight Of Equity
Weight Of Debt
Cost of Debt
Cost of Equity
Tax Rate
WACC
89,37%
10,63%
2,72%
12,13%
94,59%
10,86%
85,69%
14,31%
2,75%
12,13%
38,46%
10,64%
4,89
4,96
43,14%
8,93%
12,82%
0,08
1,07
5,85%
9,55%
46,54%
6,54%
6,72%
0,04
0,95
3,65%
6,21%
2018
8,93%
0,66
1,63
9,55%
2017
6,54%
0,56
1,70
6,21%
0,03
0,02
0,03
0,05
-0,02
-0,01
-0,02
-0,02
7,83
13,89
1,24
0,57
4,48
4,93
25,42
1,66
0,88
4,32
US $ in millions
2019
Sales
1. No add. Fixed
Assets
2. Add. Fixed Assets 1. No add. Fixed Assets 2. Add. Fixed Assets
% of Assumptions 2020
Assumptions 2020
Assumptions 2021
Assumptions 2021
sales
146 516 100% grow 5,00% 153 842 grow 5,00% 153 842 grow
Costs of goods sold 80 113 55% var
Gross profit
66 403
84 119 var
84 119 var
69 723
69 723
10,00 169 226 grow
%
92 531 var
10,00 169 226 grow
%
92 531 var
76 695
76 695
Selling, general and 4 143
fixed
administrative
expenses
Exploration
770
fixed
expenses
Operating expenses 25 938 18% var
4 143
fixed 800
4 943
fixed
4 143
fixed
770
fixed
770
fixed
770
fixed
27 235 var
27 235 var
29 958 var
Depreciation,
29 218
depletion
and
amortization
Total
operating 60 069
expenses
6 334
EBIT
const
29 218 FA
500
30/10
y
61 366
29 718 const
8 357
Non-operating
798
expenses
Earnings
before 5 536
taxes
Income
taxes 2 691
(48,61%)
Income after taxes 2 845
const
Consolidated net 2 845
income
Minority interests 79
NET INCOME
2 924
const
103 634
85 899
85 899
770
fixed
770
fixed
770
33 553
var
33 553
29 218 FA
3500 33 218 const
30/10y
29 218
FA
4000
30/10y
37 218
62 666
64 089
69 789
67 684
78 284
7 057
12 606
6 906
18 215
7 615
const 48,61 3 043
%
3 217
3 885
3 217
3 964
var
fixed
const 48,61 3 674
%
3 885
const
12,00% 189 533
4 143
6 259
79
grow
fixed
798
79
3 296
const
798
const
11 808
const
48,61 5 740
%
6 068
79
6 147
29 958 var
798
const
6 108
const
6 068
const
900
12,0 189 533
0%
103 634
5 843
7 559
const
2%
798
1. No add. Fixed Assets 2. Add. Fixed Assets
Assumptions 2022
Assumptions
2022
48,61 2 969
%
3 139
79
3 218
const
17 417
const
3 139
const
798
const
900
6 743
798
6 817
48,6 8 466
1%
8 951
const 48,61% 3 313
8 951
3 503
79
9 030
3 503
const
79
3 582
Dividends
8 959
Change in RE
-6 035
payou 0,60
t
2 378
payou 0,60
t
1 586
2019
1 977
payout 0,60
1 318
2020
foreca
st
3 688
payout 0,60
2 459
2020
foreca
st
2021
foreca
st
1 931
payout 0,60 5 418
1 287
3 612
2021
foreca
st
payout 0,60
2 149
1 433
2022
fore
cast
2022
forecast
Assets
Cash and Cash 5 686 4%
Equivalents
Short-Term
0
Investments
Marketable
63
securities
Accounts and notes 13 325 9%
receivable
Inventories
5 848 4%
Prepaid
expenses 3 407
and other current
assets
5 970
var
4%
5 970
var
4%
0
const
6 567
var
4%
0
const
6 567
var
4%
0
const
7 355
var
0
const
7 355
var
4%
0
const
63
63
63
63
const
var
const
13 991 var
const
13 991 var
const
15 390 var
const
15 390 var
var
6 140
var
6 140
var
6 754
var
6 754
const
3 407
const
3 407
const
3 407
const
3 407
Total current assets 28 329
4%
0
const
63
63
17 237
const
var
17 237
var
7 565
var
7 565
const
3 407
const
3 407
29 572
29 572
32 182
32 182
35 628
326 722
35000 366 722 const
326 722
-234
const
664
92 058
-32
718
35 628
PP&E - gross
326 722
const
326 722
5 000 331 722 const
Less: depreciation
-176
228
150 494
const -29
218
-205
446
121 276
-29
718
const
38 688 const
38 688 const
38 688 const
38 688 const
38 688
const
38 688
const
4 463
4 463
4 463
4 463
4 463
const
4 463
const
15 454 const
15 454 const
15 454 const
15 454 const
15 454
const
15 454
179 881
184 381
150 663
186 663
121 445
201 445
209 453
213 953
182 845
218 845
157 073
237 073
Total fixed assets
Equity and
investments
Goodwill
other 38 688
4 463
Other
long-term 15 454
assets
Total
long-term 209 099
assets
Total assets
237 428
const
-205
const
946
125 776
const
-29
218
const
-238
const
664
128 058
const
40000
406 722
-29 -263 882 const -25 218 -263 882
218
62 840
142 840
Liabilities
and
Equity
Accounts payable 14103
10% var
Accrued liabilities
6589
4%
Short-term debt
3282
14 808 var
16 289 var
16 289 var
18 244
var
18 244
6 918
var
7 610
var
7 610
var
8 524
var
8 524
const
14 808 var
6 918
var
3 282 const
3 282
const
3 282
const
3 282
const
3 282
const
3 282
Income
taxes 1554
payable
Other
current 1002
liabilities
Total
current 26530
liabilities
Long-term debt
23691
const
1 554
const
1 554
const
1 554
const
1 554
const
1 554
const
1 554
const
1 002
const
1 002
const
1 002
const
1 002
const
1 002
const
1 002
Other liabilities
var
27 565
27 565
29 737
29 737
32 605
const
23 691 const
23 691 const
23 691 const
23 691 const
23 691
const
23 691
21554
const
21 554 const
21 554 const
21 554 const
21 554 const
21 554
const
21 554
Deferred
liability 20445
charges
Total
long-term 65690
liabilities
Common stock
1832
const
20 445 const
20 445 const
20 445 const
20 445 const
20 445
const
20 445
65 690
65 690
65 690
65 690
65 690
const
1 832
Capital surplus
17265
const
17 265 const
17 265 const
17 265 const
Retained earnings
169715
171 301
171 033
Treasury stock
-44599
-44 599 const
Equity attributable 144 213
to shareowners
Minority interests 995
Common Equity
145 208
Total debt and 237 428
equity
NET
NEW
FINANCING
const
const
const
1 832
const
1 832
const
1 832
const
32 605
65 690
1 832
const
1 832
17 265 const
17 265
const
17 265
173 759
172 320
177 371
-44 599 const
-44 599 const
-44 599 const
-44 599
145 799
145 531
148 257
146 818
151 869
995,0 const
146 794
995,0 const
146 526
995,0 const
149 252
995,0 const
147 813
995,0
152 864
240 048
239 781
244 680
243 241
251 159
247 541
-30 595
-25 828
-61 835
-24 396
-94 087
-10 469
173 753
const
-44 599
148 251
const
995,0
149 246