Operating Segments and Geographic Data

9 Months Ended

Sep. 30, 2015

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 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, 2015, and 2014, are presented in the following table:

	Three Months Ended September 30						Nine Months Ended September 30
Segment Earnings	2015			2014			2015			2014
	(Millions of dollars)
Upstream
United States	$	(603	)	$	929		$	(2,101	)	$	2,895
International	662			3,720			1,501			11,325
Total Upstream	59			4,649			(600		)	14,220
Downstream
United States	1,249			809			2,686			1,748
International	962			578			3,904			1,070
Total Downstream	2,211			1,387			6,590			2,818
Total Segment Earnings	2,270			6,036			5,990			17,038
All Other
Interest Income	16			16			49			54
Other	(249		)	(459		)	(864		)	(1,322		)
Net Income Attributable to Chevron Corporation	$	2,037		$	5,593		$	5,175		$	15,770

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; technology companies; and assets of the corporate administrative functions. Segment assets at September 30, 2015, and December 31, 2014, are as follows:

Segment Assets	At September 30 2015		At December 31 2014
	(Millions of dollars)
Upstream
United States	$	48,638	$	49,205
International	159,833		152,736
Goodwill	4,588		4,593
Total Upstream	213,059		206,534
Downstream
United States	21,579		23,068
International	16,229		17,723
Total Downstream	37,808		40,791
Total Segment Assets	250,867		247,325
All Other
United States	5,304		6,741
International	12,278		11,960
Total All Other	17,582		18,701
Total Assets — United States	75,521		79,014
Total Assets — International	188,340		182,419
Goodwill	4,588		4,593
Total Assets	$	268,449	$	266,026

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, 2015, and 2014, 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 insurance operations, real estate activities and technology companies.

	Three Months Ended September 30						Nine Months Ended September 30
Sales and Other Operating Revenues	2015			2014			2015			2014
	(Millions of dollars)
Upstream
United States	$	3,207		$	5,676		$	10,089		$	18,386
International	6,540			12,084			21,163			37,419
Subtotal	9,747			17,760			31,252			55,805
Intersegment Elimination — United States	(2,165		)	(4,127		)	(6,829		)	(12,319		)
Intersegment Elimination — International	(2,774		)	(6,317		)	(9,047		)	(18,676		)
Total Upstream	4,808			7,316			15,376			24,810
Downstream
United States	13,795			20,623			41,336			62,043
International	14,484			26,071			46,326			78,474
Subtotal	28,279			46,694			87,662			140,517
Intersegment Elimination — United States	(6		)	(6		)	(20		)	(18		)
Intersegment Elimination — International	(360		)	(2,252		)	(1,222		)	(7,146		)
Total Downstream	27,913			44,436			86,420			133,353
All Other
United States	413			474			1,176			1,349
International	13			11			30			24
Subtotal	426			485			1,206			1,373
Intersegment Elimination — United States	(368		)	(404		)	(1,065		)	(1,130		)
Intersegment Elimination — International	(12		)	(11		)	(26		)	(23		)
Total All Other	46			70			115			220
Sales and Other Operating Revenues
United States	17,415			26,773			52,601			81,778
International	21,037			38,166			67,519			115,917
Subtotal	38,452			64,939			120,120			197,695
Intersegment Elimination — United States	(2,539		)	(4,537		)	(7,914		)	(13,467		)
Intersegment Elimination — International	(3,146		)	(8,580		)	(10,295		)	(25,845		)
Total Sales and Other Operating Revenues	$	32,767		$	51,822		$	101,911		$	158,383