Operating Segments and Geographic Data

12 Months Ended

Dec. 31, 2011

Operating Segments and Geographic Data [Abstract]

Operating Segments and Geographic Data

Note 11

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.

     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 are presented in the following table:

	Year ended December 31
	2011			2010			2009
Segment Earnings
Upstream
United States	$	6,512		$	4,122		$	2,262
International		18,274			13,555			8,670
Total Upstream		24,786			17,677			10,932
Downstream
United States		1,506			1,339			(121	)
International		2,085			1,139			594
Total Downstream		3,591			2,478			473
Total Segment Earnings		28,377			20,155			11,405
All Other
Interest expense		–			(41	)		(22	)
Interest income		78			70			46
Other		(1,560	)		(1,160	)		(946	)
Net Income Attributable to Chevron Corporation	$	26,895		$	19,024		$	10,483

Segment Assets Segment assets do not include intercompany investments or intercompany receivables. Segment assets at year-end 2011 and 2010 are as follows:

	At December 31
	2011		2010
Upstream
United States	$	37,108	$	26,319
International		98,540		89,306
Goodwill		4,642		4,617
Total Upstream		140,290		120,242
Downstream
United States		22,182		21,406
International		20,517		20,559
Total Downstream		42,699		41,965
Total Segment Assets		182,989		162,207
All Other*
United States		8,824		11,125
International		17,661		11,437
Total All Other		26,485		22,562
Total Assets – United States		68,114		58,850
Total Assets – International		136,718		121,302
Goodwill		4,642		4,617
Total Assets	$	209,474	$	184,769

* “All Other” assets consist primarily of worldwide cash, cash equivalents, time deposits and marketable securities, real estate, energy services, information systems, mining operations, power generation businesses, alternative fuels and technology companies, and assets of the corporate administrative functions.

Segment Sales and Other Operating Revenues Operating segment sales and other operating revenues, including internal transfers, for the years 2011, 2010 and 2009, are presented in the table that follows. 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 additives for fuels and lubricant oils and the transportation and trading of refined products, crude oil and natural gas liquids. “All Other” activities include revenues from mining operations, power generation businesses, insurance operations, real estate activities, energy services, alternative fuels and technology companies.

     Other than the United States, no single country accounted for 10 percent or more of the company’s total sales and other operating revenues in 2011, 2010 and 2009.

	Year ended December 31
	2011			2010			2009*
Upstream
United States	$	9,623		$	10,316		$	9,225
Intersegment		18,115			13,839			10,297
Total United States		27,738			24,155			19,522
International		20,086			17,300			13,463
Intersegment		35,012			23,834			18,477
Total International		55,098			41,134			31,940
Total Upstream		82,836			65,289			51,462
Downstream
United States		86,793			70,436			58,056
Excise and similar taxes		4,199			4,484			4,573
Intersegment		86			115			98
Total United States		91,078			75,035			62,727
International		119,254			90,922			77,845
Excise and similar taxes		3,886			4,107			3,536
Intersegment		81			93			87
Total International		123,221			95,122			81,468
Total Downstream		214,299			170,157			144,195
All Other
United States		526			610			665
Intersegment		1,072			947			964
Total United States		1,598			1,557			1,629
International		4			23			39
Intersegment		42			39			33
Total International		46			62			72
Total All Other		1,644			1,619			1,701
Segment Sales and Other Operating Revenues
United States		120,414			100,747			83,878
International		178,365			136,318			113,480
Total Segment Sales and Other Operating Revenues		298,779			237,065			197,358
Elimination of intersegment sales		(54,408	)		(38,867	)		(29,956	)
Total Sales and Other Operating Revenues	$	244,371		$	198,198		$	167,402

* 2009 conformed with 2010 and 2011 presentation.

Segment Income Taxes Segment income tax expense for the years 2011, 2010 and 2009 is as follows:

	Year ended December 31
	2011			2010			2009
Upstream
United States	$	3,701		$	2,285		$	1,251
International		16,743			10,480			7,451
Total Upstream		20,444			12,765			8,702
Downstream
United States		785			680			(83	)
International		416			462			463
Total Downstream		1,201			1,142			380
All Other		(1,019	)		(988	)		(1,117	)
Total Income Tax Expense	$	20,626		$	12,919		$	7,965

Other Segment Information Additional information for the segmentation of major equity affiliates is contained in Note 12, beginning on page FS-39. Information related to properties, plant and equipment by segment is contained in Note 13, on page FS-41.