Operating Segments and Geographic Data

9 Months Ended

Sep. 30, 2013

Segment Reporting [Abstract]

Operating Segments and Geographic Data

Operating Segments and Geographic Data

Although each subsidiary of Chevron is responsible for its own affairs, Chevron Corporation manages its investments in these subsidiaries and their affiliates. The investments are grouped into two business segments, Upstream and Downstream, representing the company’s “reportable segments” and “operating segments” as defined in accounting standards for segment reporting (ASC 280). Upstream operations consist primarily of exploring for, developing and producing crude oil and natural gas; liquefaction, transportation and regasification associated with liquefied natural gas (LNG); transporting crude oil by major international oil export pipelines; processing, transporting, storage and marketing of natural gas; and a gas-to-liquids project. Downstream operations consist primarily of refining of crude oil into petroleum products; marketing of crude oil and refined products; transporting of crude oil and refined products by pipeline, marine vessel, motor equipment and rail car; and manufacturing and marketing of commodity petrochemicals, plastics for industrial uses, and fuel and lubricant additives. All Other activities of the company include mining operations, power generation businesses, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, energy services, alternative fuels, and technology companies.

The segments are separately managed for investment purposes under a structure that includes “segment managers” who report to the company’s “chief operating decision maker” (CODM) (terms as defined in ASC 280). The CODM is the company’s Executive Committee (EXCOM), a committee of senior officers that includes the Chief Executive Officer, and EXCOM reports to the Board of Directors of Chevron Corporation.

The operating segments represent components of the company, as described in accounting standards for segment reporting (ASC 280), that engage in activities (a) from which revenues are earned and expenses are incurred; (b) whose operating results are regularly reviewed by the CODM, which makes decisions about resources to be allocated to the segments and assesses their performance; and (c) for which discrete financial information is available.

Segment managers for the reportable segments are directly accountable to, and maintain regular contact with, the company’s CODM to discuss the segment’s operating activities and financial performance. The CODM approves annual capital and exploratory budgets at the reportable segment level, as well as reviews capital and exploratory funding for major projects and approves major changes to the annual capital and exploratory budgets. However, business-unit managers within the operating segments are directly responsible for decisions relating to project implementation and all other matters connected with daily operations. Company officers who are members of the EXCOM also have individual management responsibilities and participate in other committees for purposes other than acting as the CODM.

The company’s primary country of operation is the United States of America, its country of domicile. Other components of the company’s operations are reported as “International” (outside the United States).

Segment Earnings The company evaluates the performance of its operating segments on an after-tax basis, without considering the effects of debt financing interest expense or investment interest income, both of which are managed by the company on a worldwide basis. Corporate administrative costs and assets are not allocated to the operating segments. However, operating segments are billed for the direct use of corporate services. Nonbillable costs remain at the corporate level in “All Other.” Earnings by major operating area for the three- and nine-month periods ended September 30, 2013, and 2012, are presented in the following table:

Segment Earnings	Three Months Ended September 30						Nine Months Ended September 30
	2013			2012			2013			2012
	(Millions of dollars)
Upstream
United States	$	1,026		$	1,122		$	3,241		$	3,969
International	4,066			4,017			12,716			12,961
Total Upstream	5,092			5,139			15,957			16,930
Downstream
United States	249			456			522			1,717
International	131			233			1,325			1,657
Total Downstream	380			689			1,847			3,374
Total Segment Earnings	5,472			5,828			17,804			20,304
All Other
Interest Income	17			22			56			61
Other	(539		)	(597		)	(1,367		)	(1,431		)
Net Income Attributable to Chevron Corporation	$	4,950		$	5,253		$	16,493		$	18,934

Segment Assets Segment assets do not include intercompany investments or intercompany receivables. “All Other” assets consist primarily of worldwide cash, cash equivalents, time deposits and marketable securities; real estate; information systems; mining operations; power generation businesses; energy services; alternative fuels; technology companies; and assets of the corporate administrative functions. Segment assets at September 30, 2013, and December 31, 2012, are as follows:

Segment Assets	At September 30 2013		At December 31 2012
	(Millions of dollars)
Upstream
United States	$	44,116	$	41,891
International	130,407		115,806
Goodwill	4,640		4,640
Total Upstream	179,163		162,337
Downstream
United States	23,653		23,023
International	21,515		20,024
Total Downstream	45,168		43,047
Total Segment Assets	224,331		205,384
All Other
United States	5,805		7,727
International	17,702		19,871
Total All Other	23,507		27,598
Total Assets — United States	73,574		72,641
Total Assets — International	169,624		155,701
Goodwill	4,640		4,640
Total Assets	$	247,838	$	232,982

Segment Sales and Other Operating Revenues Segment sales and other operating revenues, including internal transfers, for the three- and nine-month periods ended September 30, 2013, and 2012, are presented in the following table. Products are transferred between operating segments at internal product values that approximate market prices. Revenues for the upstream segment are derived primarily from the production and sale of crude oil and natural gas, as well as the sale of third-party production of natural gas. Revenues for the downstream segment are derived from the refining and marketing of petroleum products such as gasoline, jet fuel, gas oils, lubricants, residual fuel oils and other products derived from crude oil. This segment also generates revenues from the manufacture and sale of fuel and lubricant additives and the transportation and trading of refined products and crude oil. “All Other” activities include revenues from mining operations, power generation businesses, insurance operations, real estate activities, energy services, alternative fuels, and technology companies.

Sales and Other Operating Revenues	Three Months Ended September 30						Nine Months Ended September 30
	2013			2012			2013			2012
	(Millions of dollars)
Upstream
United States	$	6,396		$	5,579		$	19,076		$	17,512
International	12,999			12,801			37,656			40,501
Subtotal	19,395			18,380			56,732			58,013
Intersegment Elimination — United States	(4,405		)	(3,985		)	(12,816		)	(13,026		)
Intersegment Elimination — International	(8,715		)	(8,386		)	(24,520		)	(25,634		)
Total Upstream	6,275			6,009			19,396			19,353
Downstream
United States	22,425			21,558			64,410			66,899
International	28,015			28,042			82,415			87,890
Subtotal	50,440			49,600			146,825			154,789
Intersegment Elimination — United States	(10		)	(12		)	(32		)	(37		)
Intersegment Elimination — International	(197		)	(28		)	(239		)	(61		)
Total Downstream	50,233			49,560			146,554			154,691
All Other
United States	494			424			1,321			1,186
International	9			11			24			36
Subtotal	503			435			1,345			1,222
Intersegment Elimination — United States	(400		)	(333		)	(1,067		)	(896		)
Intersegment Elimination — International	(8		)	(11		)	(22		)	(34		)
Total All Other	95			91			256			292
Sales and Other Operating Revenues
United States	29,315			27,561			84,807			85,597
International	41,023			40,854			120,095			128,427
Subtotal	70,338			68,415			204,902			214,024
Intersegment Elimination — United States	(4,815		)	(4,330		)	(13,915		)	(13,959		)
Intersegment Elimination — International	(8,920		)	(8,425		)	(24,781		)	(25,729		)
Total Sales and Other Operating Revenues	$	56,603		$	55,660		$	166,206		$	174,336