subject to regulatory approvals.

Other

Common Stock Dividends The 2018 annual dividend was $4.48 per share, making 2018 the 31st consecutive year that the company increased its annual per share dividend payout. In January 2019, the company's Board of Directors approved a $0.07 per share increase in the quarterly dividend to $1.19 per share, payable in March 2019, representing an increase of 6 percent.

Common Stock Repurchase Program The company purchased $1.75 billion of its common stock in 2018 under its stock repurchase program.

Results of Operations

The following section presents the results of operations and variances on an after-tax basis for the company’s business segments – Upstream and Downstream – as well as for “All Other.” Earnings are also presented for the U.S. and international geographic areas of the Upstream and Downstream business segments. Refer to Note 13, beginning on page 66, for a discussion of the company’s “reportable segments.” This section should also be read in conjunction with the discussion in “Business Environment and Outlook” on pages 28 through 31.

U.S. Upstream

U.S. upstream earnings were $3.28 billion in 2018, compared with $3.64 billion in 2017. The decrease in earnings was primarily due to the absence of the 2017 benefit from U.S. tax reform of $3.33 billion, higher other tax items of $160 million and higher exploration expense of $350 million, partially offset by higher crude oil realizations of $2.45 billion and higher crude oil production of $1.12 billion.

U.S. upstream earnings were $3.64 billion in 2017, compared with a loss of $2.05 billion from 2016. The improvement in earnings reflected a benefit of $3.33 billion from U.S. tax reform, higher crude oil and natural gas realizations of $1.3 billion and lower depreciation expenses of $650 million, primarily reflecting a decrease in impairments and other asset write-offs. Lower operating expenses of $140 million also contributed to the improvement.

The company’s average realization for U.S. crude oil and natural gas liquids in 2018 was $58.17 per barrel, compared with $44.53 in 2017 and $35.00 in 2016. The average natural gas realization was $1.86 per thousand cubic feet in 2018, compared with $2.10 in 2017 and $1.59 in 2016.

Net oil-equivalent production in 2018 averaged 791,000 barrels per day, up 16 percent from 2017 and up 14 percent from 2016. Between 2018 and 2017, production increases from shale and tight properties in the Permian Basin in Texas and New

Mexico and base business in the Gulf of Mexico were partially offset by the effect of asset sales of 35,000 barrels per day. Between 2017 and 2016, production increases from shale and tight properties in the Permian Basin in Texas and New Mexico and base business in the Gulf of Mexico were more than offset by the effect of asset sales of 59,000 barrels per day and normal field declines.

The net liquids component of oil-equivalent production for 2018 averaged 618,000 barrels per day, up 19 percent from 2017 and up 23 percent from 2016. Net natural gas production averaged 1.03 billion cubic feet per day in 2018, up 7 percent from 2017 and down 8 percent from 2016. Refer to the “Selected