CHEVRON CORP

Capital Expenditures Capital expenditures (Capex) primarily includes additions to fixed asset or investment accounts for the company’s consolidated subsidiaries and is disclosed in the Consolidated Statement of Cash Flows. Capex by business segment for 2023, 2022 and 2021 is as follows:

Capex for 2023 was $15.8 billion, 32 percent higher than 2022 due to higher investments in the United States, including about $450 million invested in PDC assets post-acquisition and approximately $650 million of inorganic spend, mainly due to the acquisition of a majority stake in ACES Delta, LLC. Capex excludes the acquisition cost of PDC.

The company estimates that 2024 Capex will be approximately $16 billion. In the upstream business, Capex is estimated to be $14 billion, two-thirds of which is expected to be in the U.S., and includes around $5 billion for Permian Basin development and roughly $1.5 billion for other shale & tight assets in the U.S. About 25 percent of U.S upstream Capex is planned for projects in the Gulf of Mexico. Worldwide downstream spending in 2024 is estimated to be $1.5 billion with 80 percent allocated in the U.S. In addition, investments in technology businesses and other corporate operations in 2024 are projected to be about $0.5 billion. Lower carbon Capex included in the upstream and downstream segments totals around $2 billion, including investments to lower the carbon intensity of Chevron’s traditional operations and grow new energy business lines.

Affiliate Capital Expenditures Equity affiliate capital expenditures (Affiliate Capex) primarily includes additions to fixed asset and investment accounts in the equity affiliate companies’ financial statements and does not require cash outlays by the company.

Affiliate Capex by business segment for 2023, 2022 and 2021 is as follows:

Affiliate Capex for 2023 was $3.5 billion, 5 percent higher than 2022 due to higher spend at CPChem’s two major integrated polymer projects.

Affiliate Capex is expected to be $3 billion in 2024. Nearly half of Affiliate Capex is for Tengizchevroil’s FGP/WPMP Project in Kazakhstan and about a third is for CPChem.

The company monitors market conditions and can adjust future capital outlays should conditions change.

Noncontrolling Interests The company had noncontrolling interests of $972 million at December 31, 2023 and $960 million at December 31, 2022. Distributions to noncontrolling interests net of contributions totaled $40 million and $114 million in 2023 and 2022, respectively. Included within noncontrolling interests at December 31, 2023 is $166 million of redeemable noncontrolling interest.

Pension Obligations Information related to pension plan contributions is included in Note 23 Employee Benefit Plans, under the heading “Cash Contributions and Benefit Payments.”

Contractual Obligations Information related to the company’s significant contractual obligations is included in Note 19 Short-Term Debt, in Note 20 Long-Term Debt and in Note 5 Lease Commitments. The aggregate amount of interest due on these obligations, excluding leases, is: 2024 – $554; 2025 – $494; 2026 – $413; 2027 – $358; 2028 – $319; after 2028 – $3,212.

Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements Information related to these off-balance sheet matters is included in Note 24 Other Contingencies and Commitments, under the heading “Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements.”

Direct Guarantees Information related to guarantees is included in Note 24 Other Contingencies and Commitments under the heading “Guarantees.”

Indemnifications Information related to indemnifications is included in Note 24 Other Contingencies and Commitments under the heading “Indemnifications.”

Financial Ratios and Metrics

The following represent several metrics the company believes are useful measures to monitor the financial health of the company and its performance over time:

Current Ratio 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 is adversely affected by the fact that Chevron’s inventories are valued on a last-in, first-out basis. At year-end 2023, the book value of inventory was lower than replacement costs, based on average acquisition costs during the year, by approximately $6.5 billion.

Interest Coverage Ratio Income before income tax expense, plus interest and debt expense and amortization of capitalized interest, less net income attributable to noncontrolling interests, divided by before-tax interest costs. This ratio indicates the company’s ability to pay interest on outstanding debt.

Free Cash Flow The cash provided by operating activities less capital expenditures, which represents the cash available to creditors and investors after investing in the business.

Debt Ratio Total debt as a percentage of total debt plus Chevron Corporation Stockholders’ Equity, which indicates the company’s leverage.

Net Debt Ratio Total debt less cash and cash equivalents and marketable securities as a percentage of total debt less cash and cash equivalents and marketable securities, plus Chevron Corporation Stockholders’ Equity, which indicates the company’s leverage, net of its cash balances.

Capital Employed The sum of Chevron Corporation Stockholders’ Equity, total debt and noncontrolling interests, which represents the net investment in the business.

Return on Average Capital Employed (ROCE) Net income attributable to Chevron (adjusted for after-tax interest expense and noncontrolling interest) divided by average capital employed. Average capital employed is computed by averaging the sum of capital employed at the beginning and end of the year. ROCE is a ratio intended to measure annual earnings as a percentage of historical investments in the business.

Return on Stockholders’ Equity (ROSE) Net income attributable to Chevron divided by average Chevron Corporation Stockholders’ Equity. Average stockholders’ equity is computed by averaging the sum of stockholders’ equity at the beginning and end of the year. ROSE is a ratio intended to measure earnings as a percentage of shareholder investments.