Operating Segments and Geographic Data

6 Months Ended

Jun. 30, 2011

Operating Segments and Geographic Data [Abstract]

Operating Segments and Geographic Data

Note 4.  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, and alternative fuels and technology.

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 six-month periods ended June 30, 2011 and 2010 are presented in the following table:

	Three Months Ended						Six Months Ended
	June 30						June 30
Segment Earnings	2011			2010			2011			2010
	(Millions of dollars)
Upstream
United States	$	1,950		$	1,090		$	3,399		$	2,246
International		4,921			3,452			9,449			7,020
Total Upstream		6,871			4,542			12,848			9,266
Downstream
United States		564			433			1,006			515
International		480			542			660			656
Total Downstream		1,044			975			1,666			1,171
Total Segment Earnings		7,915			5,517			14,514			10,437
All Other
Interest Expense		—			(14	)		—			(30	)
Interest Income		19			23			37			33
Other		(202	)		(117	)		(608	)		(479	)
Net Income Attributable to Chevron Corporation	$	7,732		$	5,409		$	13,943		$	9,961

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; alternative fuels; technology companies; and assets of the corporate administrative functions. Segment assets at June 30, 2011, and December 31, 2010, are as follows:

	At June 30		At December 31
Segment Assets	2011		2010
	(Millions of dollars)
Upstream
United States		$ 35,105		$ 26,319
International		92,732		89,306
Goodwill		4,654		4,617
Total Upstream		132,491		120,242
Downstream
United States		22,228		21,406
International		23,866		20,559
Total Downstream		46,094		41,965
Total Segment Assets		178,585		162,207
All Other
United States		8,790		11,125
International		14,342		11,437
Total All Other		23,132		22,562
Total Assets — United States		66,123		58,850
Total Assets — International		130,940		121,302
Goodwill		4,654		4,617
Total Assets		$201,717		$184,769

Segment Sales and Other Operating Revenues Segment sales and other operating revenues, including internal transfers, for the three- and six-month periods ended June 30, 2011 and 2010, 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 and technology companies.

Sales and Other Operating Revenues

	Three Months Ended						Six Months Ended
	June 30						June 30
	2011			2010			2011			2010
	(Millions of dollars)
Upstream
United States	$	7,357		$	5,722		$	14,023		$	12,315
International		14,538			10,110			27,407			19,658
Subtotal		21,895			15,832			41,430			31,973
Intersegment Elimination — United States		(4,897	)		(3,370	)		(9,162	)		(6,843	)
Intersegment Elimination — International		(9,197	)		(5,813	)		(17,650	)		(11,518	)
Total Upstream		7,801			6,649			14,618			13,612
Downstream
United States		24,612			19,222			46,046			36,940
International		34,180			25,093			64,237			47,060
Subtotal		58,792			44,315			110,283			84,000
Intersegment Elimination — United States		(23	)		(21	)		(43	)		(49	)
Intersegment Elimination — International		(31	)		(26	)		(51	)		(48	)
Total Downstream		58,738			44,268			110,189			83,903
All Other
United States		397			381			762			675
International		12			18			22			33
Subtotal		409			399			784			708
Intersegment Elimination — United States		(266	)		(254	)		(488	)		(413	)
Intersegment Elimination — International		(11	)		(11	)		(20	)		(18	)
Total All Other		132			134			276			277
Sales and Other Operating Revenues
United States		32,366			25,325			60,831			49,930
International		48,730			35,221			91,666			66,751
Subtotal		81,096			60,546			152,497			116,681
Intersegment Elimination — United States		(5,186	)		(3,645	)		(9,693	)		(7,305	)
Intersegment Elimination — International		(9,239	)		(5,850	)		(17,721	)		(11,584	)
Total Sales and Other Operating Revenues	$	66,671		$	51,051		$	125,083		$	97,792