Operating Segments and Geographic Data

9 Months Ended

Sep. 30, 2012

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, and 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, 2012, and 2011, are presented in the following table:

Segment Earnings	Three Months Ended September 30						Nine Months Ended September 30
	2012			2011			2012			2011
	(Millions of dollars)
Upstream
United States	$	1,122		$	1,508		$	3,969		$	4,907
International	4,017			4,693			12,961			14,142
Total Upstream	5,139			6,201			16,930			19,049
Downstream
United States	456			704			1,717			1,710
International	233			1,282			1,657			1,942
Total Downstream	689			1,986			3,374			3,652
Total Segment Earnings	5,828			8,187			20,304			22,701
All Other
Interest Income	22			19			61			56
Other	(597		)	(377		)	(1,431		)	(985		)
Net Income Attributable to Chevron Corporation	$	5,253		$	7,829		$	18,934		$	21,772

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, 2012, and December 31, 2011, are as follows:

Segment Assets	At September 30 2012		At December 31 2011
	(Millions of dollars)
Upstream
United States	$	38,753	$	37,108
International	110,375		98,540
Goodwill	4,640		4,642
Total Upstream	153,768		140,290
Downstream
United States	23,530		22,182
International	22,257		20,517
Total Downstream	45,787		42,699
Total Segment Assets	199,555		182,989
All Other
United States	6,306		8,824
International	21,003		17,661
Total All Other	27,309		26,485
Total Assets — United States	68,589		68,114
Total Assets — International	153,635		136,718
Goodwill	4,640		4,642
Total Assets	$	226,864	$	209,474

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, 2012, and 2011, 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, and alternative fuels and technology companies.

Sales and Other Operating Revenues	Three Months Ended September 30						Nine Months Ended September 30
	2012			2011			2012			2011
	(Millions of dollars)
Upstream
United States	$	5,579		$	6,891		$	17,512		$	20,914
International	12,801			13,758			40,501			41,165
Subtotal	18,380			20,649			58,013			62,079
Intersegment Elimination — United States	(3,985		)	(4,397		)	(13,026		)	(13,559		)
Intersegment Elimination — International	(8,386		)	(8,608		)	(25,634		)	(26,258		)
Total Upstream	6,009			7,644			19,353			22,262
Downstream
United States	21,558			23,128			66,899			69,174
International	28,042			30,407			87,890			94,644
Subtotal	49,600			53,535			154,789			163,818
Intersegment Elimination — United States	(12		)	(20		)	(37		)	(63		)
Intersegment Elimination — International	(28		)	(22		)	(61		)	(73		)
Total Downstream	49,560			53,493			154,691			163,682
All Other
United States	424			401			1,186			1,163
International	11			12			36			34
Subtotal	435			413			1,222			1,197
Intersegment Elimination — United States	(333		)	(278		)	(896		)	(766		)
Intersegment Elimination — International	(11		)	(11		)	(34		)	(31		)
Total All Other	91			124			292			400
Sales and Other Operating Revenues
United States	27,561			30,420			85,597			91,251
International	40,854			44,177			128,427			135,843
Subtotal	68,415			74,597			214,024			227,094
Intersegment Elimination — United States	(4,330		)	(4,695		)	(13,959		)	(14,388		)
Intersegment Elimination — International	(8,425		)	(8,641		)	(25,729		)	(26,362		)
Total Sales and Other Operating Revenues	$	55,660		$	61,261		$	174,336		$	186,344