Operating Segments and Geographic Data

9 Months Ended

Sep. 30, 2014

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.” 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 plant. 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 activities, power and energy services, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, 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). The CODM is the company’s Executive Committee (EXCOM), a committee of senior officers that includes the Chief Executive Officer. EXCOM reports to the Board of Directors of Chevron Corporation.

The operating segments represent components of the company 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, 2014, and 2013, are presented in the following table:

	Three Months Ended September 30						Nine Months Ended September 30
Segment Earnings*	2014			2013			2014			2013
	(Millions of dollars)
Upstream
United States	$	929		$	1,026		$	2,895		$	3,241
International	3,720			4,066			11,325			12,716
Total Upstream	4,649			5,092			14,220			15,957
Downstream
United States	809			249			1,748			522
International	578			131			1,070			1,325
Total Downstream	1,387			380			2,818			1,847
Total Segment Earnings	6,036			5,472			17,038			17,804
All Other
Interest Income	16			17			54			56
Other	(459		)	(539		)	(1,322		)	(1,367		)
Net Income Attributable to Chevron Corporation	$	5,593		$	4,950		$	15,770		$	16,493

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 activities; power and energy services; technology companies; and assets of the corporate administrative functions. Segment assets at September 30, 2014, and December 31, 2013, are as follows:

Segment Assets*	At September 30 2014		At December 31 2013
	(Millions of dollars)
Upstream
United States	$	47,703	$	45,436
International	148,787		137,096
Goodwill	4,621		4,639
Total Upstream	201,111		187,171
Downstream
United States	23,650		23,829
International	20,873		20,268
Total Downstream	44,523		44,097
Total Segment Assets	245,634		231,268
All Other
United States	6,782		7,326
International	13,015		15,159
Total All Other	19,797		22,485
Total Assets — United States	78,135		76,591
Total Assets — International	182,675		172,523
Goodwill	4,621		4,639
Total Assets	$	265,431	$	253,753

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, 2014, and 2013, 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 activities, power and energy services, insurance operations, real estate activities, and technology companies.

	Three Months Ended September 30						Nine Months Ended September 30
Sales and Other Operating Revenues*	2014			2013			2014			2013
	(Millions of dollars)
Upstream
United States	$	5,676		$	6,396		$	18,386		$	19,076
International	12,084			12,999			37,419			37,656
Subtotal	17,760			19,395			55,805			56,732
Intersegment Elimination — United States	(4,127		)	(4,405		)	(12,319		)	(12,816		)
Intersegment Elimination — International	(6,317		)	(8,715		)	(18,676		)	(24,520		)
Total Upstream	7,316			6,275			24,810			19,396
Downstream
United States	20,623			22,425			62,043			64,410
International	26,071			28,015			78,474			82,415
Subtotal	46,694			50,440			140,517			146,825
Intersegment Elimination — United States	(6		)	(10		)	(18		)	(32		)
Intersegment Elimination — International	(2,252		)	(197		)	(7,146		)	(239		)
Total Downstream	44,436			50,233			133,353			146,554
All Other
United States	474			494			1,349			1,321
International	11			9			24			24
Subtotal	485			503			1,373			1,345
Intersegment Elimination — United States	(404		)	(400		)	(1,130		)	(1,067		)
Intersegment Elimination — International	(11		)	(8		)	(23		)	(22		)
Total All Other	70			95			220			256
Sales and Other Operating Revenues
United States	26,773			29,315			81,778			84,807
International	38,166			41,023			115,917			120,095
Subtotal	64,939			70,338			197,695			204,902
Intersegment Elimination — United States	(4,537		)	(4,815		)	(13,467		)	(13,915		)
Intersegment Elimination — International	(8,580		)	(8,920		)	(25,845		)	(24,781		)
Total Sales and Other Operating Revenues	$	51,822		$	56,603		$	158,383		$	166,206

* Effective January 1, 2014, International Upstream prospectively includes selected amounts previously recognized in International Downstream, which are not material to the company’s results of operations or financial position.