Chevron Corporation (NYSE:CVX) Q4 2018 Earnings Conference Call - Final Transcript
Feb 01, 2019 • 11:00 am ET
Good morning. My name is Jonathan, and I will be your conference facilitator today. Welcome to Chevron's Fourth Quarter 2018 Earnings Conference Call. At this time, all participants are in a listen-only mode. After the speakers' remarks, there will be a question-and-answer session and instructions will be given at that time.
(Operator Instructions). As a reminder, this conference call is being recorded. I will now turn the conference call over to the Chairman and Chief Executive Officer of Chevron Corporation, Mr. Mike Wirth. Please go ahead.
Thank you, Jonathan. Welcome to Chevron's fourth quarter earnings conference call and webcast. On the call with me today are Pat Yarrington, Vice President and Chief Financial Officer and Wayne Borduin, General Manager of Investor Relations. We'll refer to the slides 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.
Back in March, I laid out Chevron's strategy to win in any environment. I outlined our three compelling strengths; an advantaged portfolio, sustainability at lower prices, and a strong balance sheet. I also indicated that the combination of these distinct advantages together with the commitments to action highlighted in blue would deliver growing free cash flow and shareholder returns.
In 2018, we delivered. We grew oil and gas production by more than 7%, achieving our highest ever annual production. We grew cash margins in our operated upstream assets contributing to an improvement in cash returns.
We lowered our unit costs and we sold $2 billion of assets. These outcomes yielded record free cash flow, a dividend increase and the initiation of a share repurchase program. 2018 was a very successful year and we intend to build on this momentum in 2019.
Turning to slide 4, a view of our sources and uses of cash. Excluding working capital, we generated over $31 billion in cash flow from operations and we achieved record free cash flow of nearly $17 billion; the highest level ever achieved by Chevron in any price environment.
This allowed us to deliver on all four of our financial priorities. For the 31st consecutive year, we maintained our commitment to dividend growth and paid out $8.5 billion in cash dividends to our shareholders.
Earlier this week, we announced a $0.07 per share increase in our quarterly dividend to a $1.19 per share representing a 6% increase. Second, we allocated capital across a diverse portfolio and funded our highest return projects. We have confidence these investments position us for sustainable growth and free cash flow. Third, we strengthened our balance sheet and paid down debt by $4.5 billion.
Finally, we began repurchasing shares in the third quarter and increased the rate in the fourth quarter, demonstrating further confidence in our future cash generation.
And with that, I'll turn the call over to Pat who will take you through the financial results. Pat?
Patricia E. Yarrington
Hey, thanks, Mike. Turning to slide 5, an overview of our