Income Tax Expense (Benefit)

Chevron Corp., income tax expense (benefit), continuing operations

USD $ in millions

 
12 months ended Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
U.S. Federal 15  1,703  1,893  1,501  128 
State and local 120  652  596  376  216 
International 12,296  15,626  16,548  10,483  7,154 
Current 12,431  17,981  19,037  12,360  7,498 
U.S. Federal 1,128  673  877  162  (147)
State and local 74  (145) 41  20  14 
International 675  1,487  671  377  600 
Deferred 1,877  2,015  1,589  559  467 
Taxes on income 14,308  19,996  20,626  12,919  7,965 

Source: Based on data from Chevron Corp. Annual Reports

Item Description The company
Current The component of income tax expense for the period representing amounts of income taxes paid or payable (or refundable) for the period for all income tax obligations as determined by applying the provisions of relevant enacted tax laws to relevant amounts of taxable income (loss) from continuing operations. Chevron Corp.'s current declined from 2011 to 2012 and from 2012 to 2013.
Deferred The component of income tax expense for the period representing the net change in the entity's deferred tax assets and liabilities pertaining to continuing operations. Chevron Corp.'s deferred increased from 2011 to 2012 but then slightly declined from 2012 to 2013.
Taxes on income The sum of the current income tax expense (benefit) and the deferred income tax expense (benefit) pertaining to pretax income (loss) from continuing operations; income tax expense (benefit) may include interest and penalties on tax uncertainties based on the entity's accounting policy. Chevron Corp.'s taxes on income declined from 2011 to 2012 and from 2012 to 2013.

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Effective Income Tax Rate (EITR)

Chevron Corp., effective income tax rate (EITR) reconciliation

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
U.S. statutory federal income tax rate 35.00% 35.00% 35.00% 35.00% 35.00%
Effect of income taxes from international operations at rates different from the U.S. statutory rate 5.10% 7.80% 7.50% 5.20% 10.40%
State and local taxes on income, net of U.S. federal income tax benefit 0.60% 0.60% 0.90% 0.80% 0.90%
Prior-year tax adjustments -0.80% -0.20% -0.10% -0.60% -0.30%
Tax credits -0.50% -0.40% -0.40% -0.50% -1.10%
Effects of changes in tax rates –% 0.30% 0.50% –% 0.10%
Other 0.50% 0.10% -0.10% 0.40% -2.00%
Effective tax rate 39.90% 43.20% 43.30% 40.30% 43.00%

Source: Based on data from Chevron Corp. Annual Reports

Item Description The company
Effective tax rate A ratio calculated by dividing the reported amount of income tax expense attributable to continuing operations for the period by GAAP-basis pretax income from continuing operations. Chevron Corp.'s effective tax rate declined from 2011 to 2012 and from 2012 to 2013.

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Components of Deferred Tax Assets and Liabilities

Chevron Corp., components of deferred tax assets and liabilities

USD $ in millions

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Foreign tax credits 11,572  10,817  8,476  6,669  5,387 
Abandonment/environmental reserves 6,279  5,728  5,387  5,004  4,424 
Employee benefits 3,825  5,100  4,773  3,627  3,499 
Deferred credits 2,768  2,891  1,548  2,176  3,469 
Tax loss carryforwards 1,016  738  828  882  819 
Other accrued liabilities 533  381  531  486  553 
Inventory 358  281  360  483  431 
Miscellaneous 1,439  1,835  1,595  1,676  1,681 
Deferred tax assets, gross 27,790  27,771  23,498  21,003  20,263 
Deferred tax assets valuation allowance (17,171) (15,443) (11,096) (9,185) (7,921)
Deferred tax assets, net 10,619  12,328  12,402  11,818  12,342 
Properties, plant and equipment (25,936) (24,295) (23,597) (19,855) (18,545)
Investments and other (2,272) (2,276) (2,271) (2,401) (2,350)
Deferred tax liabilities (28,208) (26,571) (25,868) (22,256) (20,895)
Deferred taxes, net (17,589) (14,243) (13,466) (10,438) (8,553)

Source: Based on data from Chevron Corp. Annual Reports

Item Description The company
Deferred tax assets, gross The sum of the tax effects as of the balance sheet date of the amounts of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws (before the valuation allowance, if any, to reduce such sum amount to net realizable value). Includes any tax benefit realized in deferred tax assets for significant impacts of tax planning strategies. Chevron Corp.'s deferred tax assets, gross increased from 2011 to 2012 and from 2012 to 2013.
Deferred tax assets, net The aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; net of deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value. Chevron Corp.'s deferred tax assets, net declined from 2011 to 2012 and from 2012 to 2013.
Deferred taxes, net For entities that net deferred tax assets and tax liabilities, represents the unclassified net amount of deferred tax assets and liabilities as of the balance sheet date, which result from applying the applicable enacted tax rate to net temporary differences and carryforwards pertaining to assets or liabilities. A temporary difference is a difference between the tax basis of an asset or liability and its carrying amount in the financial statements prepared in accordance with generally accepted accounting principles that will reverse in ensuing periods. Chevron Corp.'s deferred taxes, net declined from 2011 to 2012 and from 2012 to 2013.

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Deferred Tax Assets and Liabilities, Classification

Chevron Corp., deferred tax assets and liabilities, classification

USD $ in millions

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Current deferred tax assets (included in prepaid expenses and other current assets) 1,341  1,365  1,149  1,624  1,825 
Noncurrent deferred tax assets (included in deferred charges and other assets) 2,954  2,662  1,224  851  1,268 
Current deferred tax liabilities (included in federal and other taxes on income) 583  598  295  216  125 
Noncurrent deferred income taxes 21,301  17,672  15,544  12,697  11,521 

Source: Based on data from Chevron Corp. Annual Reports

Item Description The company
Current deferred tax assets (included in prepaid expenses and other current assets) The current portion of the aggregate tax effects as of the balance sheet date of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; after deducting the allocated valuation allowance, if any, to reduce such amount to net realizable value. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. An unrecognized tax benefit that is directly related to a position taken in a tax year that results in a net operating loss carryforward should be presented as a reduction of the related deferred tax asset. Chevron Corp.'s current deferred tax assets (included in prepaid expenses and other current assets) increased from 2011 to 2012 but then slightly declined from 2012 to 2013.
Noncurrent deferred tax assets (included in deferred charges and other assets) The noncurrent portion as of the balance sheet date of the aggregate carrying amount of all future tax deductions arising from temporary differences between tax basis and generally accepted accounting principles basis recognition of assets, liabilities, revenues and expenses, which can only be deducted for tax purposes when permitted under enacted tax laws; after the valuation allowance, if any, to reduce such amount to net realizable value. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. Chevron Corp.'s noncurrent deferred tax assets (included in deferred charges and other assets) increased from 2011 to 2012 and from 2012 to 2013.
Current deferred tax liabilities (included in federal and other taxes on income) Represents the current portion of deferred tax liabilities, which result from applying the applicable tax rate to net taxable temporary differences pertaining to each jurisdiction to which the entity is obligated to pay income tax. A current taxable temporary difference is a difference between the tax basis and the carrying amount of a current asset or liability in the financial statements prepared in accordance with generally accepted accounting principles. In a classified statement of financial position, an enterprise shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. Chevron Corp.'s current deferred tax liabilities (included in federal and other taxes on income) increased from 2011 to 2012 but then slightly declined from 2012 to 2013.
Noncurrent deferred income taxes Represents the noncurrent portion of deferred tax liabilities, which result from applying the applicable tax rate to net taxable temporary differences pertaining to each jurisdiction to which the entity is obligated to pay income tax. A noncurrent taxable temporary difference is a difference between the tax basis and the carrying amount of a noncurrent asset or liability in the financial statements prepared in accordance with generally accepted accounting principles. In a classified statement of financial position, an enterprise shall separate deferred tax liabilities and assets into a current amount and a noncurrent amount. Deferred tax liabilities and assets shall be classified as current or noncurrent based on the classification of the related asset or liability for financial reporting. A deferred tax liability or asset that is not related to an asset or liability for financial reporting, including deferred tax assets related to carryforwards, shall be classified according to the expected reversal date of the temporary difference. Chevron Corp.'s noncurrent deferred income taxes increased from 2011 to 2012 and from 2012 to 2013.

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Analyst Adjustments: Removal of Deferred Taxes

Chevron Corp., adjustments to financial data

USD $ in millions

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Adjustment to Current Assets
Current assets (as reported) 50,250  55,720  53,234  48,841  37,216 
Less: Current deferred tax assets, net 1,341  1,365  1,149  1,624  1,825 
Current assets (adjusted) 48,909  54,355  52,085  47,217  35,391 
Adjustment to Total Assets
Total assets (as reported) 253,753  232,982  209,474  184,769  164,621 
Less: Current deferred tax assets, net 1,341  1,365  1,149  1,624  1,825 
Less: Noncurrent deferred tax assets, net 2,954  2,662  1,224  851  1,268 
Total assets (adjusted) 249,458  228,955  207,101  182,294  161,528 
Adjustment to Current Liabilities
Current liabilities (as reported) 33,018  34,212  33,600  29,012  26,211 
Less: Current deferred tax liabilities, net 583  598  295  216  125 
Current liabilities (adjusted) 32,435  33,614  33,305  28,796  26,086 
Adjustment to Total Liabilities
Total liabilities (as reported) 103,326  95,150  87,293  78,958  72,060 
Less: Current deferred tax liabilities, net 583  598  295  216  125 
Less: Noncurrent deferred tax liabilities, net 21,301  17,672  15,544  12,697  11,521 
Total liabilities (adjusted) 81,442  76,880  71,454  66,045  60,414 
Adjustment to Total Chevron Corporation Stockholders' Equity
Total Chevron Corporation stockholders' equity (as reported) 149,113  136,524  121,382  105,081  91,914 
Less: Current deferred tax assets, net 1,341  1,365  1,149  1,624  1,825 
Less: Noncurrent deferred tax assets, net 2,954  2,662  1,224  851  1,268 
Add: Current deferred tax liabilities, net 583  598  295  216  125 
Add: Noncurrent deferred tax liabilities, net 21,301  17,672  15,544  12,697  11,521 
Total Chevron Corporation stockholders' equity (adjusted) 166,702  150,767  134,848  115,519  100,467 
Adjustment to Net Income Attributable To Chevron Corporation
Net income attributable to Chevron Corporation (as reported) 21,423  26,179  26,895  19,024  10,483 
Add: Deferred income tax expense (benefit) 1,877  2,015  1,589  559  467 
Net income attributable to Chevron Corporation (adjusted) 23,300  28,194  28,484  19,583  10,950 

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Adjusted Ratios: Removal of Deferred Taxes (Summary)

Chevron Corp., adjusted ratios

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
Current Ratio
Reported current ratio 1.52 1.63 1.58 1.68 1.42
Adjusted current ratio 1.51 1.62 1.56 1.64 1.36
Net Profit Margin
Reported net profit margin 9.73% 11.35% 11.01% 9.60% 6.26%
Adjusted net profit margin 10.58% 12.23% 11.66% 9.88% 6.54%
Total Asset Turnover
Reported total asset turnover 0.87 0.99 1.17 1.07 1.02
Adjusted total asset turnover 0.88 1.01 1.18 1.09 1.04
Financial Leverage
Reported financial leverage 1.70 1.71 1.73 1.76 1.79
Adjusted financial leverage 1.50 1.52 1.54 1.58 1.61
Return on Equity (ROE)
Reported ROE 14.37% 19.18% 22.16% 18.10% 11.41%
Adjusted ROE 13.98% 18.70% 21.12% 16.95% 10.90%
Return on Assets (ROA)
Reported ROA 8.44% 11.24% 12.84% 10.30% 6.37%
Adjusted ROA 9.34% 12.31% 13.75% 10.74% 6.78%
Ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Chevron Corp.'s adjusted current ratio improved from 2011 to 2012 but then deteriorated significantly from 2012 to 2013.
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Chevron Corp.'s adjusted net profit margin improved from 2011 to 2012 but then deteriorated significantly from 2012 to 2013.
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Chevron Corp.'s adjusted total asset turnover deteriorated from 2011 to 2012 and from 2012 to 2013.
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Chevron Corp.'s adjusted financial leverage declined from 2011 to 2012 and from 2012 to 2013.
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. Chevron Corp.'s adjusted ROE deteriorated from 2011 to 2012 and from 2012 to 2013.
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Chevron Corp.'s adjusted ROA deteriorated from 2011 to 2012 and from 2012 to 2013.

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Adjusted Current Ratio

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
As Reported
Current assets (USD $ in millions) 50,250  55,720  53,234  48,841  37,216 
Current liabilities (USD $ in millions) 33,018  34,212  33,600  29,012  26,211 
Current ratio1 1.52 1.63 1.58 1.68 1.42
Adjusted for Deferred Taxes
Adjusted current assets (USD $ in millions) 48,909  54,355  52,085  47,217  35,391 
Adjusted current liabilities (USD $ in millions) 32,435  33,614  33,305  28,796  26,086 
Adjusted current ratio2 1.51 1.62 1.56 1.64 1.36

2013 Calculations

1 Current ratio = Current assets ÷ Current liabilities
= 50,250 ÷ 33,018 = 1.52

2 Adjusted current ratio = Adjusted current assets ÷ Adjusted current liabilities
= 48,909 ÷ 32,435 = 1.51

Ratio Description The company
Adjusted current ratio A liquidity ratio calculated as adjusted current assets divided by adjusted current liabilities. Chevron Corp.'s adjusted current ratio improved from 2011 to 2012 but then deteriorated significantly from 2012 to 2013.

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Adjusted Net Profit Margin

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
As Reported
Net income attributable to Chevron Corporation (USD $ in millions) 21,423  26,179  26,895  19,024  10,483 
Sales and other operating revenues (USD $ in millions) 220,156  230,590  244,371  198,198  167,402 
Net profit margin1 9.73% 11.35% 11.01% 9.60% 6.26%
Adjusted for Deferred Taxes
Adjusted net income attributable to Chevron Corporation (USD $ in millions) 23,300  28,194  28,484  19,583  10,950 
Sales and other operating revenues (USD $ in millions) 220,156  230,590  244,371  198,198  167,402 
Adjusted net profit margin2 10.58% 12.23% 11.66% 9.88% 6.54%

2013 Calculations

1 Net profit margin = 100 × Net income attributable to Chevron Corporation ÷ Sales and other operating revenues
= 100 × 21,423 ÷ 220,156 = 9.73%

2 Adjusted net profit margin = 100 × Adjusted net income attributable to Chevron Corporation ÷ Sales and other operating revenues
= 100 × 23,300 ÷ 220,156 = 10.58%

Ratio Description The company
Adjusted net profit margin An indicator of profitability, calculated as adjusted net income divided by total revenue. Chevron Corp.'s adjusted net profit margin improved from 2011 to 2012 but then deteriorated significantly from 2012 to 2013.

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Adjusted Total Asset Turnover

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
As Reported
Sales and other operating revenues (USD $ in millions) 220,156  230,590  244,371  198,198  167,402 
Total assets (USD $ in millions) 253,753  232,982  209,474  184,769  164,621 
Total asset turnover1 0.87 0.99 1.17 1.07 1.02
Adjusted for Deferred Taxes
Sales and other operating revenues (USD $ in millions) 220,156  230,590  244,371  198,198  167,402 
Adjusted total assets (USD $ in millions) 249,458  228,955  207,101  182,294  161,528 
Adjusted total asset turnover2 0.88 1.01 1.18 1.09 1.04

2013 Calculations

1 Total asset turnover = Sales and other operating revenues ÷ Total assets
= 220,156 ÷ 253,753 = 0.87

2 Adjusted total asset turnover = Sales and other operating revenues ÷ Adjusted total assets
= 220,156 ÷ 249,458 = 0.88

Ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Chevron Corp.'s adjusted total asset turnover deteriorated from 2011 to 2012 and from 2012 to 2013.

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Adjusted Financial Leverage

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
As Reported
Total assets (USD $ in millions) 253,753  232,982  209,474  184,769  164,621 
Total Chevron Corporation stockholders' equity (USD $ in millions) 149,113  136,524  121,382  105,081  91,914 
Financial leverage1 1.70 1.71 1.73 1.76 1.79
Adjusted for Deferred Taxes
Adjusted total assets (USD $ in millions) 249,458  228,955  207,101  182,294  161,528 
Adjusted total Chevron Corporation stockholders' equity (USD $ in millions) 166,702  150,767  134,848  115,519  100,467 
Adjusted financial leverage2 1.50 1.52 1.54 1.58 1.61

2013 Calculations

1 Financial leverage = Total assets ÷ Total Chevron Corporation stockholders' equity
= 253,753 ÷ 149,113 = 1.70

2 Adjusted financial leverage = Adjusted total assets ÷ Adjusted total Chevron Corporation stockholders' equity
= 249,458 ÷ 166,702 = 1.50

Ratio Description The company
Adjusted financial leverage A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity.
Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.
Chevron Corp.'s adjusted financial leverage declined from 2011 to 2012 and from 2012 to 2013.

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Adjusted Return On Equity (ROE)

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
As Reported
Net income attributable to Chevron Corporation (USD $ in millions) 21,423  26,179  26,895  19,024  10,483 
Total Chevron Corporation stockholders' equity (USD $ in millions) 149,113  136,524  121,382  105,081  91,914 
ROE1 14.37% 19.18% 22.16% 18.10% 11.41%
Adjusted for Deferred Taxes
Adjusted net income attributable to Chevron Corporation (USD $ in millions) 23,300  28,194  28,484  19,583  10,950 
Adjusted total Chevron Corporation stockholders' equity (USD $ in millions) 166,702  150,767  134,848  115,519  100,467 
Adjusted ROE2 13.98% 18.70% 21.12% 16.95% 10.90%

2013 Calculations

1 ROE = 100 × Net income attributable to Chevron Corporation ÷ Total Chevron Corporation stockholders' equity
= 100 × 21,423 ÷ 149,113 = 14.37%

2 Adjusted ROE = 100 × Adjusted net income attributable to Chevron Corporation ÷ Adjusted total Chevron Corporation stockholders' equity
= 100 × 23,300 ÷ 166,702 = 13.98%

Ratio Description The company
Adjusted ROE A profitability ratio calculated as adjusted net income divided by adjusted shareholders' equity. Chevron Corp.'s adjusted ROE deteriorated from 2011 to 2012 and from 2012 to 2013.

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Adjusted Return On Assets (ROA)

 
Dec 31, 2013 Dec 31, 2012 Dec 31, 2011 Dec 31, 2010 Dec 31, 2009
As Reported
Net income attributable to Chevron Corporation (USD $ in millions) 21,423  26,179  26,895  19,024  10,483 
Total assets (USD $ in millions) 253,753  232,982  209,474  184,769  164,621 
ROA1 8.44% 11.24% 12.84% 10.30% 6.37%
Adjusted for Deferred Taxes
Adjusted net income attributable to Chevron Corporation (USD $ in millions) 23,300  28,194  28,484  19,583  10,950 
Adjusted total assets (USD $ in millions) 249,458  228,955  207,101  182,294  161,528 
Adjusted ROA2 9.34% 12.31% 13.75% 10.74% 6.78%

2013 Calculations

1 ROA = 100 × Net income attributable to Chevron Corporation ÷ Total assets
= 100 × 21,423 ÷ 253,753 = 8.44%

2 Adjusted ROA = 100 × Adjusted net income attributable to Chevron Corporation ÷ Adjusted total assets
= 100 × 23,300 ÷ 249,458 = 9.34%

Ratio Description The company
Adjusted ROA A profitability ratio calculated as adjusted net income divided by adjusted total assets. Chevron Corp.'s adjusted ROA deteriorated from 2011 to 2012 and from 2012 to 2013.

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