Miscellaneous Financial Information	6 Months Ended
Jun. 30, 2020
Miscellaneous Financial Information [Abstract]
Miscellaneous Financial Information	2. Miscellaneous Financial Information During the first quarter of 2020, the balance of supply and demand for petroleum and petrochemical products experienced two significant disruptive effects. On the demand side, the COVID-19 pandemic spread rapidly through most areas of the world resulting in substantial reductions in consumer and business activity and significantly reduced demand for crude oil, natural gas, and petroleum products. This reduction in demand coincided with announcements of increased production in certain key oil producing countries which led to sharp declines in prices for crude oil and other petrochemical products, and considerable volatility in financial markets during the first half of 2020. Crude oil, products and merchandise inventories are carried at the lower of current market value or cost, generally determined under the last-in first-out method (LIFO). The Corporation’s results for the second quarter of 2020 included a before-tax credit of $2,624 million, included in “Crude oil and product purchases” on the Statement of Income, as rising commodity prices reduced the charge against the book value of inventories from $2,777 million in the first quarter to $153 million in the second quarter. This adjustment, together with a similar adjustment for equity companies included in “Income from equity affiliates,” resulted in a $1,922 million after-tax credit to earnings (excluding noncontrolling interests) in the second quarter and will be re-evaluated at the end of each quarter in 2020. The earnings impact may be adjusted upward or downward this year based on prevailing market prices at the time of future evaluations. At year-end, any required adjustment is considered permanent and is incorporated into the LIFO carrying value of the inventory. As a result of sharp declines in prices for crude oil and other petrochemical products in the first half of 2020 and a significant decline in its market capitalization at the end of the first quarter, the Corporation recognized after-tax impairment charges of $836 million in the first half of 2020. These charges included goodwill impairments of $562 million in Upstream, Downstream, and Chemical reporting units and other impairment charges of $274 million, mainly in the Upstream segment. Fair value of the goodwill reporting units primarily reflected market-based estimates of historical EBITDA multiples at the end of the first quarter. Other impairment charges, mainly related to the Corporation’s investment in an Upstream equity company, were written down to estimated fair value based on recent third party price outlooks, internal estimates of future volumes and costs, and estimates of discount rates for similar properties. The charges related to goodwill impairment are included in “Depreciation and depletion” on the Statement of Income while the charges related to other impairments are largely included in “Income from equity affiliates.”

Miscellaneous Financial Information

6 Months Ended

Jun. 30, 2020

Miscellaneous Financial Information [Abstract]

2. Miscellaneous Financial Information

During the first quarter of 2020, the balance of supply and demand for petroleum and petrochemical products experienced two significant disruptive effects. On the demand side, the COVID-19 pandemic spread rapidly through most areas of the world resulting in substantial reductions in consumer and business activity and significantly reduced demand for crude oil, natural gas, and petroleum products. This reduction in demand coincided with announcements of increased production in certain key oil producing countries which led to sharp declines in prices for crude oil and other petrochemical products, and considerable volatility in financial markets during the first half of 2020.

Crude oil, products and merchandise inventories are carried at the lower of current market value or cost, generally determined under the last-in first-out method (LIFO). The Corporation’s results for the second quarter of 2020 included a before-tax credit of $2,624 million, included in “Crude oil and product purchases” on the Statement of Income, as rising commodity prices reduced the charge against the book value of inventories from $2,777 million in the first quarter to $153 million in the second quarter. This adjustment, together with a similar adjustment for equity companies included in “Income from equity affiliates,” resulted in a $1,922 million after-tax credit to earnings (excluding noncontrolling interests) in the second quarter and will be re-evaluated at the end of each quarter in 2020. The earnings impact may be adjusted upward or downward this year based on prevailing market prices at the time of future evaluations. At year-end, any required adjustment is considered permanent and is incorporated into the LIFO carrying value of the inventory.

As a result of sharp declines in prices for crude oil and other petrochemical products in the first half of 2020 and a significant decline in its market capitalization at the end of the first quarter, the Corporation recognized after-tax impairment charges of $836 million in the first half of 2020. These charges included goodwill impairments of $562 million in Upstream, Downstream, and Chemical reporting units and other impairment charges of $274 million, mainly in the Upstream segment. Fair value of the goodwill reporting units primarily reflected market-based estimates of historical EBITDA multiples at the end of the first quarter. Other impairment charges, mainly related to the Corporation’s investment in an Upstream equity company, were written down to estimated fair value based on recent third party price outlooks, internal estimates of future volumes and costs, and estimates of discount rates for similar properties. The charges related to goodwill impairment are included in “Depreciation and depletion” on the Statement of Income while the charges related to other impairments are largely included in “Income from equity affiliates.”