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2008 Annual Meeting Remarks by Peter J. Robertson

Peter J. Robertson

By Peter J. Robertson, Vice Chairman
Chevron Corporation

Opening Remarks and Corporate Overview

San Ramon, California, May 28, 2009

Good morning and welcome.

We're pleased you could join us today to hear about our performance in 2007 — how we are responding to today's energy challenges while building for the future and how we are committed to creating value for you, our stockholders.

Slide: Title Slide

First, let me introduce our nominees for the Board of Directors. Would you please stand as I call your name and remain standing until all have been introduced.

  • Sam Armacost, chairman of SRI International.
  • Linnet Deily, former Deputy U.S. Trade Representative and retired vice chairman of Charles Schwab Corporation.
  • Bob Denham, partner in the law firm of Munger, Tolles and Olson.
  • Bob Eaton, retired chairman of the board of management of DaimlerChrysler.
  • Sam Ginn, retired chairman of Vodafone AirTouch.
  • Frank Jenifer, president emeritus of The University of Texas at Dallas.
  • General James Jones, president and CEO of the Institute for 21st Century Energy.
  • Senator Sam Nunn, co-chairman and CEO of the Nuclear Threat Initiative and former Senator from Georgia.
  • Don Rice, former chairman, president and CEO of Agensys, Inc., now a subsidiary of Astellas Pharma Inc.
  • Kevin Sharer, chairman, CEO and president of Amgen Inc.
  • Dick Shoemate, retired chairman of the board, president and chief executive officer of Bestfoods.
  • Ron Sugar, chairman of the board and chief executive officer of Northrop Grumman Corporation.
  • Carl Ware, retired executive vice president of The Coca-Cola Company.
  • And, finally, Dave O'Reilly, chairman of the board and chief executive officer of Chevron Corporation.

Thanks to all of you for your willingness to serve as directors of our great company.

Chairman O'Reilly will be joining me in today's presentation, along with George Kirkland, executive vice president of Upstream and Gas, and Mike Wirth, executive vice president of Downstream.

We have several corporate officers here today. Would you please stand and be recognized.

Thank you.

Now I'd like to introduce:

  • Alan Page and Chuck Chang, partners from PricewaterhouseCoopers.
  • And Douglas Czarnecki, the Inspector of Election.

Thanks to all of you.

2007 was a very successful year for Chevron. Let's take a look at a short video highlighting some of our major accomplishments.

I think you will agree, as this video illustrates, 2007 was another strong year for Chevron.

Let's take a closer look.

Slide: Delivering Results

We achieved a fourth consecutive year of record earnings with reported net income of $18.7 billion, posting the largest year-over-year percentage improvement of our peer group.

We achieved a strong return on capital employed of about 23 percent.

We ended 2007 with a debt to total debt-plus-equity ratio of 8.6 percent and reduced debt to $7 billion.

And I am very proud to say that in 2007, we continued improving on our safety performance. With an unrelenting focus on safety, we are closing in on our goal to be the industry leader.

Slide: Annual Cash Dividends

Our strong earnings and cash flows are enabling us to fund a robust capital program and, at the same time, return cash to our stockholders.

In 2007, we repurchased $7 billion of our common shares and increased our quarterly dividend by 11.5 percent.

And last month, we announced a 12.1 percent quarterly dividend increase, making 2008 the 21st consecutive year Chevron will have increased its annual dividend.

Slide: Results 2007 - TSR

Total stockholder return is the ultimate measure of our performance, and our goal is to continue to be a top performer over the long term.

Last year our stock was up over $22 per share, which, combined with dividends, resulted in a Total Stockholder Return of over 30 percent - an excellent one-year performance that outperformed the broad market indicator of the S&P 500 by 25 percent.

Five-year TSR performance through last April was 29 percent, outperforming the S&P 500 by nearly 19 percent.

And year-to-date for 2008, we ranked No. 1 versus our peers and outperformed the S&P 500 by 12 percent.

Now let's look at our capital and exploratory expenditures.

Slide: Capital and Exploratory Program

In 2008, we expect to invest approximately $23 billion, roughly 15 percent or nearly $3 billion higher than 2007.

Roughly 75 percent is planned for oil and gas exploration and production projects worldwide. Another 20 percent is dedicated to the company's global refining, marketing and transportation businesses.

Slide: Strategies to Grow Value

Our strategies are unchanged because they are the right strategies to deliver value to our stockholders, and they are the right strategies for addressing the energy challenges of today.

Our overarching aim is to develop leading integrated positions in growth areas. To accomplish this, we have the following four strategies:

  • First: Grow upstream profitably in core areas and build new legacy positions.
  • Second: Commercialize our equity natural gas resource base.
  • Third: Improve downstream returns and selectively grow with a focus on integrated value creation.
  • And fourth: Invest in renewable energy technologies and capture profitable positions.

Now we'll hear about how we are advancing our key strategies across our major business units. At this time, I would like to introduce George Kirkland, who will highlight our upstream and natural gas activities.

Read the Overview of Upstream and Gas by George L. Kirkland

Cautionary Statement

Updated: May 2008