Chevron Corporation

Good morning. My name is Jonathan, and I will be your conference facilitator today. Welcome to Chevron's third quarter 2019 earnings conference call. At this time, all participants are in listen-only mode. After the speaker's remarks, there will be a question-and-answer session, and instructions will be given at that time. If anyone should require assistance during the conference call, please press star then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I will now turn the conference call over to the General Manager of Investor Relations of Chevron Corporation, Mr. Wayne Bourdune. Please go ahead.

Thank you, Jonathan. Welcome to Chevron's third quarter earnings call and webcast. On the call with me today are Jay Johnson, EVP of Upstream, and Pierre Brever, CFO. 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. Please review the cautionary statement on slide two. Turning to slide three, and Pierre.

Thanks, Wayne. We had another quarter of strong operational and financial performance. First, an overview of our financial results. Earnings are $2.6 billion, or $1.36 per share. The quarter's results included a $430 million special item tax accrual associated with a cash repatriation in the fourth quarter. Foreign exchange gains for the quarter were $74 million. Excluding special items and FX gains, earnings were $2.9 billion, or $1.55 per share. A reconciliation of non-GAAP measures can be found in the appendix to this presentation. Cash flow from operations was $7.8 billion. We also maintained a strong balance sheet with a low debt ratio. Importantly, our strong cash flow allowed us to continue to deliver significant cash to our shareholders. During the quarter, we paid over $2 billion in dividends and repurchased $1.25 billion of shares. in line with our annual share repurchase run rate guidance of $5 billion. Year-to-date, we've returned approximately $9.5 billion in dividends and share repurchases. Year-to-date organic CapEx was $14.5 billion, slightly below our ratable budget of $15 billion. Total CapEx, which includes inorganic transactions that are unbudgeted, totaled $15 billion. We are maintaining a firm commitment to capital discipline to improve returns on capital. Turning to slide four, third quarter cash flow was strong, down from the prior quarter due to lower Brent prices and the absence of the termination fee received from Anadarko. On a year-to-date basis, cash flow from operations of nearly $22 billion funded all four of our financial priorities. With nearly $12 billion in free cash flow, we currently have an annualized yield of about 7%, highlighting our ability to generate strong free cash flow in a lower oil price environment. Through three quarters, the company's cash flow dividend break-even price, excluding working capital, is in the low 50s Brent. Asset sales proceeds add to our positive cash flow and further lower the break-even while high-grading our portfolio. Since the beginning of 2018, asset sale proceeds have totaled $3 billion, and by year-end, after the expected closing of the sale of our UK North Sea assets, we will be near the low end of our $5 to $10 billion guidance range with one year to go. Turning to slide five, third quarter 2019 earnings of $2.6 billion decreased about $1.5 billion versus prior year. Excluding special items and FX, upstream earnings declined primarily due to lower crude and natural gas prices partially offset by higher liftings. Downstream earnings also were down primarily due to higher turnaround and maintenance costs lower volumes driven by the Southern Africa divestment, and lower chemicals margins. The variance in the other segment primarily reflects lower corporate charges versus last year. Turning to slide six, compared to the second quarter, third quarter earnings decreased by about $1.7 billion. Excluding special items and FX, upstream results were lower, primarily due to a 10% decrease in Brent prices since the second quarter. Downstream earnings, excluding FX, improved due to stronger refining and marketing margins, partly offset by lower chemical margins and the impacts of planned turnarounds. The variance in the other segment primarily reflects lower corporate charges and tax items. I'll now pass it to Jay.