in global social investments. We focused these invest- ments in three core areas — health, education and economic development — to improve access to health care, develop skilled workers, and boost local and regional economies. These social invest- ments complement our investments in projects and local goods and services, creating jobs and generating revenues for the communities where we operate. More details are available in the 2015 Corporate Responsibility Report. 

I am proud to note that 2015 marked the 28th consecutive year that we increased the annual per-share dividend payout. Our top financial priority remains maintaining and growing the dividend as the pattern of earnings, cash flow and balance sheet strength permits. Our year-end debt ratio was a comfort- able 20.2 percent. 

Looking ahead, we announced a 2016 capital and exploratory budget of $26.6 billion, which is 22 percent lower than our expenditures for 2015 and 34 percent lower than 2014. This capital budget will enable us to complete and ramp up projects under construction, fund high-return, short-cycle invest- ments, preserve options for viable long-cycle projects, and ensure safe, reliable operations. 

The focus of the enterprise in 2016 will remain on our five key priorities — safely starting up projects under construction and realizing the cash flow from them, lowering capital spending, reducing operating expenses, completing our divestment program for assets that have greater value to others than to us, and doing all this while continuing to operate safely and reliably. 

Our company’s products provide the energy that is critical for economic progress. We are well positioned to meet growing demand in a safe and responsible manner. 

In all we do, we are guided by The Chevron Way. This roadmap underpins the character of our company and establishes the values by which we deliver our results. I am confident that our company and our employees have what it takes to meet the challenges of the current business environment and achieve our vision of being the global energy company most admired for its people, partnership and performance. 

Thank you for your confidence and your investment in Chevron. 



Management's Discussion and Analysis of Financial Condition and Results of Operations

Business Environment and Outlook

Chevron is a global energy company with substantial business activities in the following countries: Angola, Argentina, Australia, Azerbaijan, Bangladesh, Brazil, Canada, China, Colombia, Democratic Republic of the Congo, Denmark, Indonesia, Kazakhstan, Myanmar, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Republic of Congo, Singapore, South Africa, South Korea, Thailand, Trinidad and Tobago, the United Kingdom, the United States, and Venezuela.

Earnings of the company depend mostly on the profitability of its upstream business segment. The biggest factor affecting the results of operations for the upstream segment is the price of crude oil. The price of crude oil has fallen significantly since mid-year 2014, reflecting persistently high global crude oil inventories and production. The downturn in the price of crude oil has