Chevron Corporation

Good morning. My name is Katie and I will be your conference facilitator today. Welcome to Chevron's second quarter 2021 earnings conference call. At this time, all participants are in a listen-only mode. After the speaker's remarks, there will be a question and answer session and instructions given at that time. If anyone should require assistance during the conference call, please press star and then zero on your touchtone telephone. As a reminder, this conference call is being recorded. I will now turn the conference over to the General Manager of Investor Relations of Chevron Corporation, Mr. Roderick Green. Please go ahead.

Thank you, Katie. Welcome to Chevron's second quarter earnings conference call. I'm Roderick Green, GM of Investor Relations, and on the call with me today are Jay Johnson, EVP of Upstream, and Pierre Brever, CFO. We will refer to the slides of prepared remarks 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. Now, I will turn it over to Pierre.

Thanks, Roderick. We delivered strong financial results in the second quarter, with the highest reported earnings in over a year. Adjusted earnings were $3.3 billion, or $1.71 per share. The quarter's results included special items totaling $235 million, including a remediation charge in the Gulf of Mexico and pension settlement costs. Reconciliation of non-GAAP measures can be found in the appendix of this presentation. Adjusted return on capital was near 8%, and we lowered our net debt ratio to 21%. Strong operating cash flow enabled us to meet Chevron's top financial priorities. Our dividend was up 4%. We continue to execute our efficient capital program, and we pay down $2.5 billion of debt. Despite lower year-to-date prices and margins, first half 2021 quarterly average free cash flow is near 2018 levels, primarily due to lower capital and operating costs and contributions from legacy noble assets. We're maintaining strong capital and cost discipline. C&E is down 32% from a year ago, and we're lowering our full-year organic C&E guidance to around $13 billion, primarily due to lower spending at TCO and greater capital efficiency across the portfolio. Operating costs are on track with our March 2021 investor day guidance of a 10% reduction from 2019. Adjusted second quarter earnings were up $6.2 billion versus the same quarter last year. Adjusted upstream earnings increased primarily on higher prices and liftings. Adjusted downstream earnings increased on higher chemicals results, as well as higher refining margins and volumes. All other was roughly unchanged between periods. Compared with last quarter, adjusted second quarter earnings were up about $1.5 billion. Adjusted upstream earnings increased primarily on higher commodity prices and higher production in the U.S. Adjusted downstream earnings increased primarily from strong chemicals results, as well as increased refining margins and volumes. All other charges were roughly flat between quarters and are running ahead of ratable guidance, primarily due to tax charges and valuation of stock-based compensation. The all other segment results can vary between quarters, and our full year guidance is unchanged. I'll now pass it over to Jay.