As they reported record third-quarter earnings, major-oil executives emphasized that substantial parts of the unusually high cash flow will be reinvested in the business, including exploration and production. "We're generating a lot of cash under these strong industry conditions. It provides opportunities to invest in incremental improvements in all our operations," Chevron Corp. investor relations director Pierre Breber said. Chevron's operating income last quarter reached a record $1.65 billion, up 134.6% from $702 million in third-quarter 1999. Texaco Inc. reported record third-quarter operating income of $815 million, a 79.9% increase. Conoco Inc.'s after-tax operating income climbed 79.1% to a record $584 million. Exxon Mobil Corp. also finished the quarter in excellent financial shape, with a remarkably low 15.6% debt-to-capital ratio. Its $7.3 billion of capital and exploration expenditures through the first nine months was 25.9% lower than in the same period in 1999, however. "Spending is down for several reasons," said Peter Townsend, vice president, investor relations. "Our major upstream projects take several years and billions of dollars to develop. We completed a very large number of these projects in 1999 and 2000. A similarly large number of such projects in the next round have not yet reached full fruition. We expect to increase spending over time." Texaco investor relations director Elizabeth Smith said of the company's extra cash flow, "Certainly, if it continues to be high, we'll continue to pay down debt." -Nick Snow