• Financial Highlights
• Management's Discussion and Analysis
  • Key Financial Results
  • Income by Major Operating Area
  • Business Environment and Outlook
  • Operating Developments
  • Results of Operations
  • Consolidated Statement of Income
  • Selected Operating Data
  • Liquidity and Capital Resources
  • Financial Ratios
  • Guarantees, Off-Balance-Sheet Arrangements and Contractual Obligations, and Other Contingencies
  • Financial and Derivative Instruments
  • Transactions with Related Parties
  • Litigation and Other Contingencies
  • Environmental Matters
  • Critical Accounting Estimates and Assumptions
  • New Accounting Standards
• Consolidated Financial Statements
• Notes to the Consolidated Financial Statements
• Five-Year Operating Summary
• Five-Year Financial Summary
• Supplemental Information on Oil and Gas Producing Activities

Guarantees, Off-Balance-Sheet Arrangements and Contractual Obligations, and Other Contingencies

Direct Guarantee

Millions of dollars	Commitment Expiration by Period
	Total	2008	2009-2011	2012	After 2012
Guarantee of nonconsolidated affiliate or joint-venture obligation	$613	$–	$–	$38	$575

The company's guarantee of approximately $600 million is associated with certain payments under a terminal use agreement entered into by a company affiliate. The terminal is expected to be operational by 2012. Over the approximate 16-year term of the guarantee, the maximum guarantee amount will reduce over time as certain fees are paid by the affiliate. There are numerous cross-indemnity agreements with the affiliate and the other partners to permit recovery of any amounts paid under the guarantee. Chevron carries no liability for its obligation under this guarantee.

Indemnifications

The company provided certain indemnities of contingent liabilities of Equilon and Motiva to Shell and Saudi Refining, Inc., in connection with the February 2002 sale of the company's interests in those investments. The company would be required to perform if the indemnified liabilities become actual losses. Were that to occur, the company could be required to make future payments up to $300 million. Through the end of 2007, the company had paid $48 million under these indemnities and continues to be obligated for possible additional indemnification payments in the future.

The company has also provided indemnities relating to contingent environmental liabilities related to assets originally contributed by Texaco to the Equilon and Motiva joint ventures and environmental conditions that existed prior to the formation of Equilon and Motiva or that occurred during the period of Texaco's ownership interest in the joint ventures. In general, the environmental conditions or events that are subject to these indemnities must have arisen prior to December 2001. Claims must be asserted no later than February 2009 for Equilon indemnities and no later than February 2012 for Motiva indemnities. Under the terms of these indemnities, there is no maximum limit on the amount of potential future payments. The company has not recorded any liabilities for possible claims under these indemnities. The company posts no assets as collateral and has made no payments under the indemnities.

The amounts payable for the indemnities described above are to be net of amounts recovered from insurance carriers and others and net of liabilities recorded by Equilon or Motiva prior to September 30, 2001, for any applicable incident.

In the acquisition of Unocal, the company assumed certain indemnities relating to contingent environmental liabilities associated with assets that were sold in 1997. Under the indemnification agreement, the company's liability is unlimited until April 2022, when the indemnification expires. The acquirer shares in certain environmental remediation costs up to a maximum obligation of $200 million, which had not been reached as of December 31, 2007.

Securitization

During 2007, the company completed the sale of its U.S. proprietary consumer credit card business and related receivables. This transaction included terminating the qualifying Special Purpose Entity (SPE) that was used to securitize associated retail accounts receivable.

Through the use of another qualifying SPE, the company had $675 million of securitized trade accounts receivable related to its downstream business as of December 31, 2007. This arrangement has the effect of accelerating Chevron's collection of the securitized amounts. Chevron's total estimated financial exposure under this securitization at December 31, 2007, was $65 million. In the event that the SPE experiences major defaults in the collection of receivables, Chevron believes that it would have no additional loss exposure connected with third-party investments in this securitization.

Minority Interests

The company has commitments of $204 million related to minority interests in subsidiary companies.

Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements

The company and its subsidiaries have certain other contingent liabilities relating to long-term unconditional purchase obligations and commitments, including throughput and take-or-pay agreements, some of which relate to suppliers' financing arrangements. The agreements typically provide goods and services, such as pipeline and storage capacity, drilling rigs, utilities, and petroleum products, to be used or sold in the ordinary course of the company's business. The aggregate approximate amounts of required payments under these various commitments are: 2008 — $4.7 billion; 2009 — $3.3 billion; 2010 — $3.3 billion; 2011 — $1.9 billion; 2012 — $1.3 billion; 2013 and after — $4.9 billion. A portion of these commitments may ultimately be shared with project partners. Total payments under the agreements were approximately $3.7 billion in 2007, $3.0 billion in 2006 and $2.1 billion in 2005.

The following table summarizes the company's significant contractual obligations:

Contractual Obligations

Millions of dollars	Payments Due by Period
	Total	2008	2009-2011	2012	After 2012
1 Does not include amounts related to the company's income tax liabilities associated with uncertain tax positions. The company is unable to make reasonable estimates for the periods in which these liabilities may become due. The company does not expect settlement of such liabilities will have a material effect on its results of operations, consolidated financial position or liquidity in any single period.
2 $4.4. billion of short-term debt that the company expects to refinance is included in long-term debt. The repayment schedule above reflects the projected repayment of the entire amounts in the 2009-2011 period.
3 Does not include obligations to purchase the company's share of natural gas liquids and regasified natural gas associated with operations of the 36.4 percent-owned Angola LNG affiliate. The LNG plant is expected to commence operations in 2012 and is designed to produce 5.2 million metric tons of liquefied natural gas and related natural gas liquids per year. Volumes and prices associated with these purchase obligations are neither fixed nor determinable.
On Balance Sheet:1
Short-Term Debt2	$1,162	$1,162	$–	$–	$–
Long-Term Debt2	5,664	–	4,926	33	705
Noncancelable Capital Lease Obligations	406	–	193	61	152
Interest	3,950	360	899	292	2,399
Off-Balance-Sheet:
Noncancelable Operating Lease Obligations	3,167	513	1,255	293	1,106
Throughput and Take-or-Pay Agreements	13,118	3,699	4,783	618	4,018
Other Unconditional Purchase Obligations3	6,300	988	3,779	653	880