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These excerpts taken from the DVN 10-K filed Feb 27, 2009. Credit
Availability
We have two revolving lines of credit and a commercial paper
program that we intend to access during 2009 to provide
liquidity. Although we are reducing our planned 2009 capital
expenditures, we anticipate our operating cash flow in 2009 will
be approximately $1.0 billion less than our capital
expenditures due to significantly lower commodity prices.
We have a $2.65 billion syndicated, unsecured revolving
line of credit (the “Senior Credit Facility”). The
maturity date for $2.15 billion of the Senior Credit
Facility is April 7, 2013. The maturity date for the
remaining $0.5 billion is April 7, 2012. All amounts
outstanding will be due and payable on the respective maturity
dates unless the maturity is extended. Prior to each April 7
anniversary date, we have the option to extend the maturity of
the Senior Credit Facility for one year, subject to the approval
of the lenders. The Senior Credit Facility includes a revolving
Canadian subfacility in a maximum amount of
U.S. $500 million.
Amounts borrowed under the Senior Credit Facility may, at our
election, bear interest at various fixed rate options for
periods of up to twelve months. Such rates are generally less
than the prime rate. However, we may elect to borrow at the
prime rate. As of January 31, 2009, there were no
borrowings under the Senior Credit Facility.
On November 5, 2008, we established a new $700 million
364-day,
syndicated, unsecured revolving senior credit facility (the
“Short-Term Facility”). The Short-Term Facility
provides us with incremental liquidity for near-term capital
expenditures.
The Short-Term Facility matures on November 3, 2009. On the
maturity date, all amounts outstanding will be due and payable
at that time. Amounts borrowed under the Short-Term Facility
bear interest at various fixed rate options for periods of up to
12 months. Such rates are generally based on LIBOR or the
prime rate. As of January 31, 2009, there were no
borrowings under the Short-Term Facility.
We also have access to short-term credit under our commercial
paper program. Total borrowings under the commercial paper
program may not exceed $2.85 billion. Also, any borrowings
under the commercial paper program reduce available capacity
under the Senior Credit Facility or the Short-Term Facility on a
dollar-for-dollar basis. Commercial paper debt generally has a
maturity of between one and 90 days, although it can have a
maturity of up to 365 days, and bears interest at rates
agreed to at the time of the borrowing. The interest rate is
based on a standard index such as the Federal Funds Rate, LIBOR,
or the money market rate as found on the commercial paper
market. As of January 31, 2009, we had $0.2 billion of
commercial paper debt outstanding at an average rate of 3.33%.
The Senior Credit Facility and Short-Term Facility contain only
one material financial covenant. This covenant requires our
ratio of total funded debt to total capitalization to be less
than 65%. The credit agreement contains definitions of total
funded debt and total capitalization that include adjustments to
the respective amounts reported in the consolidated financial
statements. Also, total capitalization is adjusted to add back
noncash financial writedowns such as full cost ceiling
impairments or goodwill impairments. As of December 31,
2008, we were in compliance with this covenant. Our
debt-to-capitalization ratio at December 31, 2008, as
calculated pursuant to the terms of the agreement, was 18.6%.
Table of Contents
Our access to funds from the Senior Credit Facility and
Short-Term Facility is not restricted under any “material
adverse effect” clauses. It is not uncommon for credit
agreements to include such clauses. These clauses can remove the
obligation of the banks to fund the credit line if any condition
or event would reasonably be expected to have a material and
adverse effect on the borrower’s financial condition,
operations, properties or business considered as a whole, the
borrower’s ability to make timely debt payments, or the
enforceability of material terms of the credit agreement. While
our credit facilities include covenants that require us to
report a condition or event having a material adverse effect,
the obligation of the banks to fund the credit facilities is not
conditioned on the absence of a material adverse effect.
The following schedule summarizes the capacity of our credit
facilities by maturity date, as well as our available capacity
as of January 31, 2009.
Credit
Availability
We have two revolving lines of credit and a commercial paper
program that we intend to access during 2009 to provide
liquidity. Although we are reducing our planned 2009 capital
expenditures, we anticipate our operating cash flow in 2009 will
be approximately $1.0 billion less than our capital
expenditures due to significantly lower commodity prices.
We have a $2.65 billion syndicated, unsecured revolving
line of credit (the “Senior Credit Facility”). The
maturity date for $2.15 billion of the Senior Credit
Facility is April 7, 2013. The maturity date for the
remaining $0.5 billion is April 7, 2012. All amounts
outstanding will be due and payable on the respective maturity
dates unless the maturity is extended. Prior to each April 7
anniversary date, we have the option to extend the maturity of
the Senior Credit Facility for one year, subject to the approval
of the lenders. The Senior Credit Facility includes a revolving
Canadian subfacility in a maximum amount of
U.S. $500 million.
Amounts borrowed under the Senior Credit Facility may, at our
election, bear interest at various fixed rate options for
periods of up to twelve months. Such rates are generally less
than the prime rate. However, we may elect to borrow at the
prime rate. As of January 31, 2009, there were no
borrowings under the Senior Credit Facility.
On November 5, 2008, we established a new $700 million
364-day,
syndicated, unsecured revolving senior credit facility (the
“Short-Term Facility”). The Short-Term Facility
provides us with incremental liquidity for near-term capital
expenditures.
The Short-Term Facility matures on November 3, 2009. On the
maturity date, all amounts outstanding will be due and payable
at that time. Amounts borrowed under the Short-Term Facility
bear interest at various fixed rate options for periods of up to
12 months. Such rates are generally based on LIBOR or the
prime rate. As of January 31, 2009, there were no
borrowings under the Short-Term Facility.
We also have access to short-term credit under our commercial
paper program. Total borrowings under the commercial paper
program may not exceed $2.85 billion. Also, any borrowings
under the commercial paper program reduce available capacity
under the Senior Credit Facility or the Short-Term Facility on a
dollar-for-dollar basis. Commercial paper debt generally has a
maturity of between one and 90 days, although it can have a
maturity of up to 365 days, and bears interest at rates
agreed to at the time of the borrowing. The interest rate is
based on a standard index such as the Federal Funds Rate, LIBOR,
or the money market rate as found on the commercial paper
market. As of January 31, 2009, we had $0.2 billion of
commercial paper debt outstanding at an average rate of 3.33%.
The Senior Credit Facility and Short-Term Facility contain only
one material financial covenant. This covenant requires our
ratio of total funded debt to total capitalization to be less
than 65%. The credit agreement contains definitions of total
funded debt and total capitalization that include adjustments to
the respective amounts reported in the consolidated financial
statements. Also, total capitalization is adjusted to add back
noncash financial writedowns such as full cost ceiling
impairments or goodwill impairments. As of December 31,
2008, we were in compliance with this covenant. Our
debt-to-capitalization ratio at December 31, 2008, as
calculated pursuant to the terms of the agreement, was 18.6%.
Table of Contents
Our access to funds from the Senior Credit Facility and
Short-Term Facility is not restricted under any “material
adverse effect” clauses. It is not uncommon for credit
agreements to include such clauses. These clauses can remove the
obligation of the banks to fund the credit line if any condition
or event would reasonably be expected to have a material and
adverse effect on the borrower’s financial condition,
operations, properties or business considered as a whole, the
borrower’s ability to make timely debt payments, or the
enforceability of material terms of the credit agreement. While
our credit facilities include covenants that require us to
report a condition or event having a material adverse effect,
the obligation of the banks to fund the credit facilities is not
conditioned on the absence of a material adverse effect.
The following schedule summarizes the capacity of our credit
facilities by maturity date, as well as our available capacity
as of January 31, 2009.
Credit Availability We have two revolving lines of credit and a commercial paper program that we intend to access during 2009 to provide liquidity. Although we are reducing our planned 2009 capital expenditures, we anticipate our operating cash flow in 2009 will be approximately $1.0 billion less than our capital expenditures due to significantly lower commodity prices. We have a $2.65 billion syndicated, unsecured revolving line of credit (the “Senior Credit Facility”). The maturity date for $2.15 billion of the Senior Credit Facility is April 7, 2013. The maturity date for the remaining $0.5 billion is April 7, 2012. All amounts outstanding will be due and payable on the respective maturity dates unless the maturity is extended. Prior to each April 7 anniversary date, we have the option to extend the maturity of the Senior Credit Facility for one year, subject to the approval of the lenders. The Senior Credit Facility includes a revolving Canadian subfacility in a maximum amount of U.S. $500 million. Amounts borrowed under the Senior Credit Facility may, at our election, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, we may elect to borrow at the prime rate. As of January 31, 2009, there were no borrowings under the Senior Credit Facility. On November 5, 2008, we established a new $700 million 364-day, syndicated, unsecured revolving senior credit facility (the “Short-Term Facility”). The Short-Term Facility provides us with incremental liquidity for near-term capital expenditures. The Short-Term Facility matures on November 3, 2009. On the maturity date, all amounts outstanding will be due and payable at that time. Amounts borrowed under the Short-Term Facility bear interest at various fixed rate options for periods of up to 12 months. Such rates are generally based on LIBOR or the prime rate. As of January 31, 2009, there were no borrowings under the Short-Term Facility. We also have access to short-term credit under our commercial paper program. Total borrowings under the commercial paper program may not exceed $2.85 billion. Also, any borrowings under the commercial paper program reduce available capacity under the Senior Credit Facility or the Short-Term Facility on a dollar-for-dollar basis. Commercial paper debt generally has a maturity of between one and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. The interest rate is based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found on the commercial paper market. As of January 31, 2009, we had $0.2 billion of commercial paper debt outstanding at an average rate of 3.33%. The Senior Credit Facility and Short-Term Facility contain only one material financial covenant. This covenant requires our ratio of total funded debt to total capitalization to be less than 65%. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the consolidated financial statements. Also, total capitalization is adjusted to add back noncash financial writedowns such as full cost ceiling impairments or goodwill impairments. As of December 31, 2008, we were in compliance with this covenant. Our debt-to-capitalization ratio at December 31, 2008, as calculated pursuant to the terms of the agreement, was 18.6%.
Table of ContentsOur access to funds from the Senior Credit Facility and Short-Term Facility is not restricted under any “material adverse effect” clauses. It is not uncommon for credit agreements to include such clauses. These clauses can remove the obligation of the banks to fund the credit line if any condition or event would reasonably be expected to have a material and adverse effect on the borrower’s financial condition, operations, properties or business considered as a whole, the borrower’s ability to make timely debt payments, or the enforceability of material terms of the credit agreement. While our credit facilities include covenants that require us to report a condition or event having a material adverse effect, the obligation of the banks to fund the credit facilities is not conditioned on the absence of a material adverse effect. The following schedule summarizes the capacity of our credit facilities by maturity date, as well as our available capacity as of January 31, 2009.
Credit Availability We have two revolving lines of credit and a commercial paper program that we intend to access during 2009 to provide liquidity. Although we are reducing our planned 2009 capital expenditures, we anticipate our operating cash flow in 2009 will be approximately $1.0 billion less than our capital expenditures due to significantly lower commodity prices. We have a $2.65 billion syndicated, unsecured revolving line of credit (the “Senior Credit Facility”). The maturity date for $2.15 billion of the Senior Credit Facility is April 7, 2013. The maturity date for the remaining $0.5 billion is April 7, 2012. All amounts outstanding will be due and payable on the respective maturity dates unless the maturity is extended. Prior to each April 7 anniversary date, we have the option to extend the maturity of the Senior Credit Facility for one year, subject to the approval of the lenders. The Senior Credit Facility includes a revolving Canadian subfacility in a maximum amount of U.S. $500 million. Amounts borrowed under the Senior Credit Facility may, at our election, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, we may elect to borrow at the prime rate. As of January 31, 2009, there were no borrowings under the Senior Credit Facility. On November 5, 2008, we established a new $700 million 364-day, syndicated, unsecured revolving senior credit facility (the “Short-Term Facility”). The Short-Term Facility provides us with incremental liquidity for near-term capital expenditures. The Short-Term Facility matures on November 3, 2009. On the maturity date, all amounts outstanding will be due and payable at that time. Amounts borrowed under the Short-Term Facility bear interest at various fixed rate options for periods of up to 12 months. Such rates are generally based on LIBOR or the prime rate. As of January 31, 2009, there were no borrowings under the Short-Term Facility. We also have access to short-term credit under our commercial paper program. Total borrowings under the commercial paper program may not exceed $2.85 billion. Also, any borrowings under the commercial paper program reduce available capacity under the Senior Credit Facility or the Short-Term Facility on a dollar-for-dollar basis. Commercial paper debt generally has a maturity of between one and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. The interest rate is based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found on the commercial paper market. As of January 31, 2009, we had $0.2 billion of commercial paper debt outstanding at an average rate of 3.33%. The Senior Credit Facility and Short-Term Facility contain only one material financial covenant. This covenant requires our ratio of total funded debt to total capitalization to be less than 65%. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in the consolidated financial statements. Also, total capitalization is adjusted to add back noncash financial writedowns such as full cost ceiling impairments or goodwill impairments. As of December 31, 2008, we were in compliance with this covenant. Our debt-to-capitalization ratio at December 31, 2008, as calculated pursuant to the terms of the agreement, was 18.6%.
Table of ContentsOur access to funds from the Senior Credit Facility and Short-Term Facility is not restricted under any “material adverse effect” clauses. It is not uncommon for credit agreements to include such clauses. These clauses can remove the obligation of the banks to fund the credit line if any condition or event would reasonably be expected to have a material and adverse effect on the borrower’s financial condition, operations, properties or business considered as a whole, the borrower’s ability to make timely debt payments, or the enforceability of material terms of the credit agreement. While our credit facilities include covenants that require us to report a condition or event having a material adverse effect, the obligation of the banks to fund the credit facilities is not conditioned on the absence of a material adverse effect. The following schedule summarizes the capacity of our credit facilities by maturity date, as well as our available capacity as of January 31, 2009.
These excerpts taken from the DVN 10-K filed Jun 9, 2008. Credit
Availability
We have two revolving lines of credit and a commercial paper
program, which we can access to provide liquidity. At
December 31, 2007, our total available borrowing capacity
was $1.3 billion.
Our $2.5 billion five-year, syndicated, unsecured revolving
line of credit (the “Senior Credit Facility”) matures
on April 7, 2012, and all amounts outstanding will be due
and payable at that time unless the maturity is extended. Prior
to each April 7 anniversary date, we have the option to extend
the maturity of the Senior Credit Facility for one year, subject
to the approval of the lenders.
The Senior Credit Facility includes a five-year revolving
Canadian subfacility in a maximum amount of
U.S. $500 million. Amounts borrowed under the Senior
Credit Facility may, at our election, bear interest at various
fixed rate options for periods of up to twelve months. Such
rates are generally less than the prime rate. However, we may
elect to borrow at the prime rate. As of December 31, 2007,
there were $1.4 billion of borrowings under the Senior
Credit Facility at an average rate of 5.27%.
On August 7, 2007, we established a new $1.5 billion
364-day,
syndicated, unsecured revolving senior credit facility (the
“Short-Term Facility”). This facility provides us with
provisional interim liquidity until we receive the proceeds from
divestitures of assets in West Africa. The Short-Term Facility
was also used to support an increase in our commercial paper
program from $2 billion to $3.5 billion.
The Short-Term Facility matures on August 5, 2008. At that
time, all amounts outstanding will be due and payable unless the
maturity is extended. Prior to August 5, 2008, we have the
option to convert any outstanding principal amount of loans
under the Short-Term Facility to a term loan, which will be
repayable in a single payment on August 4, 2009.
Amounts borrowed under the Short-Term Facility bear interest at
various fixed rate options for periods of up to 12 months.
Such rates are generally less than the prime rate. We may also
elect to borrow at the prime rate. As of December 31, 2007,
there were no borrowings under the Short-Term Facility.
We also have access to short-term credit under our commercial
paper program. Total borrowings under the commercial paper
program may not exceed $3.5 billion. Also, any borrowings
under the commercial paper program reduce available capacity
under the Senior Credit Facility or the Short-Term Facility on a
dollar-for-dollar basis. Commercial paper debt generally has a
maturity of between one and 90 days, although it can have a
maturity of up to 365 days, and bears interest at rates
agreed to at the time of the borrowing. The interest rate is
based on a standard index such as the Federal Funds Rate, LIBOR,
or the money market rate as found on the commercial paper
market. As of December 31, 2007, we had $1.0 billion
of commercial paper debt outstanding at an average rate of 5.07%.
The Senior Credit Facility and Short-Term Facility contain only
one material financial covenant. This covenant requires our
ratio of total funded debt to total capitalization to be less
than 65%. The credit agreement contains definitions of total
funded debt and total capitalization that include adjustments to
the respective amounts reported in our consolidated financial
statements. As defined in the agreement, total funded debt
excludes the debentures that are exchangeable into shares of
Chevron Corporation common stock. Also, total capitalization is
adjusted to add back noncash financial writedowns such as full
cost ceiling impairments or goodwill impairments. As of
December 31, 2007, we were in compliance with this
covenant. Our debt-to-capitalization ratio at December 31,
2007, as calculated pursuant to the terms of the agreement, was
23.8%.
Our access to funds from the Senior Credit Facility and
Short-Term Facility is not restricted under any “material
adverse effect” clauses. It is not uncommon for credit
agreements to include such clauses. These clauses can remove the
obligation of the banks to fund the credit line if any condition
or event would reasonably be expected to have a material and
adverse effect on the borrower’s financial condition,
operations,
Table of Contents
properties or business considered as a whole, the
borrower’s ability to make timely debt payments, or the
enforceability of material terms of the credit agreement. While
our credit facilities include covenants that require us to
report a condition or event having a material adverse effect,
the obligation of the banks to fund the credit facilities is not
conditioned on the absence of a material adverse effect.
Credit Availability We have two revolving lines of credit and a commercial paper program, which we can access to provide liquidity. At December 31, 2007, our total available borrowing capacity was $1.3 billion. Our $2.5 billion five-year, syndicated, unsecured revolving line of credit (the “Senior Credit Facility”) matures on April 7, 2012, and all amounts outstanding will be due and payable at that time unless the maturity is extended. Prior to each April 7 anniversary date, we have the option to extend the maturity of the Senior Credit Facility for one year, subject to the approval of the lenders. The Senior Credit Facility includes a five-year revolving Canadian subfacility in a maximum amount of U.S. $500 million. Amounts borrowed under the Senior Credit Facility may, at our election, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, we may elect to borrow at the prime rate. As of December 31, 2007, there were $1.4 billion of borrowings under the Senior Credit Facility at an average rate of 5.27%. On August 7, 2007, we established a new $1.5 billion 364-day, syndicated, unsecured revolving senior credit facility (the “Short-Term Facility”). This facility provides us with provisional interim liquidity until we receive the proceeds from divestitures of assets in West Africa. The Short-Term Facility was also used to support an increase in our commercial paper program from $2 billion to $3.5 billion. The Short-Term Facility matures on August 5, 2008. At that time, all amounts outstanding will be due and payable unless the maturity is extended. Prior to August 5, 2008, we have the option to convert any outstanding principal amount of loans under the Short-Term Facility to a term loan, which will be repayable in a single payment on August 4, 2009. Amounts borrowed under the Short-Term Facility bear interest at various fixed rate options for periods of up to 12 months. Such rates are generally less than the prime rate. We may also elect to borrow at the prime rate. As of December 31, 2007, there were no borrowings under the Short-Term Facility. We also have access to short-term credit under our commercial paper program. Total borrowings under the commercial paper program may not exceed $3.5 billion. Also, any borrowings under the commercial paper program reduce available capacity under the Senior Credit Facility or the Short-Term Facility on a dollar-for-dollar basis. Commercial paper debt generally has a maturity of between one and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. The interest rate is based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found on the commercial paper market. As of December 31, 2007, we had $1.0 billion of commercial paper debt outstanding at an average rate of 5.07%. The Senior Credit Facility and Short-Term Facility contain only one material financial covenant. This covenant requires our ratio of total funded debt to total capitalization to be less than 65%. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in our consolidated financial statements. As defined in the agreement, total funded debt excludes the debentures that are exchangeable into shares of Chevron Corporation common stock. Also, total capitalization is adjusted to add back noncash financial writedowns such as full cost ceiling impairments or goodwill impairments. As of December 31, 2007, we were in compliance with this covenant. Our debt-to-capitalization ratio at December 31, 2007, as calculated pursuant to the terms of the agreement, was 23.8%. Our access to funds from the Senior Credit Facility and Short-Term Facility is not restricted under any “material adverse effect” clauses. It is not uncommon for credit agreements to include such clauses. These clauses can remove the obligation of the banks to fund the credit line if any condition or event would reasonably be expected to have a material and adverse effect on the borrower’s financial condition, operations,
Table of Contentsproperties or business considered as a whole, the borrower’s ability to make timely debt payments, or the enforceability of material terms of the credit agreement. While our credit facilities include covenants that require us to report a condition or event having a material adverse effect, the obligation of the banks to fund the credit facilities is not conditioned on the absence of a material adverse effect. These excerpts taken from the DVN 10-K filed Feb 28, 2008. Credit
Availability
We have two revolving lines of credit and a commercial paper
program, which we can access to provide liquidity. At
December 31, 2007, our total available borrowing capacity
was $1.3 billion.
Our $2.5 billion five-year, syndicated, unsecured revolving
line of credit (the “Senior Credit Facility”) matures
on April 7, 2012, and all amounts outstanding will be due
and payable at that time unless the maturity is extended. Prior
to each April 7 anniversary date, we have the option to extend
the maturity of the Senior Credit Facility for one year, subject
to the approval of the lenders.
The Senior Credit Facility includes a five-year revolving
Canadian subfacility in a maximum amount of
U.S. $500 million. Amounts borrowed under the Senior
Credit Facility may, at our election, bear interest at various
fixed rate options for periods of up to twelve months. Such
rates are generally less than the prime rate. However, we may
elect to borrow at the prime rate. As of December 31, 2007,
there were $1.4 billion of borrowings under the Senior
Credit Facility at an average rate of 5.27%.
On August 7, 2007, we established a new $1.5 billion
364-day,
syndicated, unsecured revolving senior credit facility (the
“Short-Term Facility”). This facility provides us with
provisional interim liquidity until we receive the proceeds from
divestitures of assets in West Africa. The Short-Term Facility
was also used to support an increase in our commercial paper
program from $2 billion to $3.5 billion.
The Short-Term Facility matures on August 5, 2008. At that
time, all amounts outstanding will be due and payable unless the
maturity is extended. Prior to August 5, 2008, we have the
option to convert any outstanding principal amount of loans
under the Short-Term Facility to a term loan, which will be
repayable in a single payment on August 4, 2009.
Amounts borrowed under the Short-Term Facility bear interest at
various fixed rate options for periods of up to 12 months.
Such rates are generally less than the prime rate. We may also
elect to borrow at the prime rate. As of December 31, 2007,
there were no borrowings under the Short-Term Facility.
We also have access to short-term credit under our commercial
paper program. Total borrowings under the commercial paper
program may not exceed $3.5 billion. Also, any borrowings
under the commercial paper program reduce available capacity
under the Senior Credit Facility or the Short-Term Facility on a
dollar-for-dollar basis. Commercial paper debt generally has a
maturity of between one and 90 days, although it can have a
maturity of up to 365 days, and bears interest at rates
agreed to at the time of the borrowing. The interest rate is
based on a standard index such as the Federal Funds Rate, LIBOR,
or the money market rate as found on the commercial paper
market. As of December 31, 2007, we had $1.0 billion
of commercial paper debt outstanding at an average rate of 5.07%.
The Senior Credit Facility and Short-Term Facility contain only
one material financial covenant. This covenant requires our
ratio of total funded debt to total capitalization to be less
than 65%. The credit agreement contains definitions of total
funded debt and total capitalization that include adjustments to
the respective amounts reported in our consolidated financial
statements. As defined in the agreement, total funded debt
excludes the debentures that are exchangeable into shares of
Chevron Corporation common stock. Also, total capitalization is
adjusted to add back noncash financial writedowns such as full
cost ceiling impairments or goodwill impairments. As of
December 31, 2007, we were in compliance with this
covenant. Our debt-to-capitalization ratio at December 31,
2007, as calculated pursuant to the terms of the agreement, was
23.8%.
Our access to funds from the Senior Credit Facility and
Short-Term Facility is not restricted under any “material
adverse effect” clauses. It is not uncommon for credit
agreements to include such clauses. These clauses can remove the
obligation of the banks to fund the credit line if any condition
or event would reasonably be expected to have a material and
adverse effect on the borrower’s financial condition,
operations,
Table of Contents
properties or business considered as a whole, the
borrower’s ability to make timely debt payments, or the
enforceability of material terms of the credit agreement. While
our credit facilities include covenants that require us to
report a condition or event having a material adverse effect,
the obligation of the banks to fund the credit facilities is not
conditioned on the absence of a material adverse effect.
Credit Availability We have two revolving lines of credit and a commercial paper program, which we can access to provide liquidity. At December 31, 2007, our total available borrowing capacity was $1.3 billion. Our $2.5 billion five-year, syndicated, unsecured revolving line of credit (the “Senior Credit Facility”) matures on April 7, 2012, and all amounts outstanding will be due and payable at that time unless the maturity is extended. Prior to each April 7 anniversary date, we have the option to extend the maturity of the Senior Credit Facility for one year, subject to the approval of the lenders. The Senior Credit Facility includes a five-year revolving Canadian subfacility in a maximum amount of U.S. $500 million. Amounts borrowed under the Senior Credit Facility may, at our election, bear interest at various fixed rate options for periods of up to twelve months. Such rates are generally less than the prime rate. However, we may elect to borrow at the prime rate. As of December 31, 2007, there were $1.4 billion of borrowings under the Senior Credit Facility at an average rate of 5.27%. On August 7, 2007, we established a new $1.5 billion 364-day, syndicated, unsecured revolving senior credit facility (the “Short-Term Facility”). This facility provides us with provisional interim liquidity until we receive the proceeds from divestitures of assets in West Africa. The Short-Term Facility was also used to support an increase in our commercial paper program from $2 billion to $3.5 billion. The Short-Term Facility matures on August 5, 2008. At that time, all amounts outstanding will be due and payable unless the maturity is extended. Prior to August 5, 2008, we have the option to convert any outstanding principal amount of loans under the Short-Term Facility to a term loan, which will be repayable in a single payment on August 4, 2009. Amounts borrowed under the Short-Term Facility bear interest at various fixed rate options for periods of up to 12 months. Such rates are generally less than the prime rate. We may also elect to borrow at the prime rate. As of December 31, 2007, there were no borrowings under the Short-Term Facility. We also have access to short-term credit under our commercial paper program. Total borrowings under the commercial paper program may not exceed $3.5 billion. Also, any borrowings under the commercial paper program reduce available capacity under the Senior Credit Facility or the Short-Term Facility on a dollar-for-dollar basis. Commercial paper debt generally has a maturity of between one and 90 days, although it can have a maturity of up to 365 days, and bears interest at rates agreed to at the time of the borrowing. The interest rate is based on a standard index such as the Federal Funds Rate, LIBOR, or the money market rate as found on the commercial paper market. As of December 31, 2007, we had $1.0 billion of commercial paper debt outstanding at an average rate of 5.07%. The Senior Credit Facility and Short-Term Facility contain only one material financial covenant. This covenant requires our ratio of total funded debt to total capitalization to be less than 65%. The credit agreement contains definitions of total funded debt and total capitalization that include adjustments to the respective amounts reported in our consolidated financial statements. As defined in the agreement, total funded debt excludes the debentures that are exchangeable into shares of Chevron Corporation common stock. Also, total capitalization is adjusted to add back noncash financial writedowns such as full cost ceiling impairments or goodwill impairments. As of December 31, 2007, we were in compliance with this covenant. Our debt-to-capitalization ratio at December 31, 2007, as calculated pursuant to the terms of the agreement, was 23.8%. Our access to funds from the Senior Credit Facility and Short-Term Facility is not restricted under any “material adverse effect” clauses. It is not uncommon for credit agreements to include such clauses. These clauses can remove the obligation of the banks to fund the credit line if any condition or event would reasonably be expected to have a material and adverse effect on the borrower’s financial condition, operations,
Table of Contentsproperties or business considered as a whole, the borrower’s ability to make timely debt payments, or the enforceability of material terms of the credit agreement. While our credit facilities include covenants that require us to report a condition or event having a material adverse effect, the obligation of the banks to fund the credit facilities is not conditioned on the absence of a material adverse effect. | EXCERPTS ON THIS PAGE:
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