UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended ~~September~~June 30, ~~2020~~2021

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)

OF THE SECURITIES EXCHANGE ACT OF 1934

Commission file number 001-00368

Chevron Corporation

(Exact name of registrant as specified in its charter)

6001 Bollinger Canyon Road

Delaware

94-0890210

San Ramon,

California

94583-2324

(State or other jurisdiction of
incorporation or organization)

(I.R.S. Employer
Identification No.)

(Address of principal executive offices)
(Zip Code)

Registrant’s telephone number, including area code: (925) 842-1000

NONE

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol

Name of each exchange on which registered

Common stock, par value $.75 per share

CVX

New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☑ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer

☑

Accelerated filer

☐

Non-accelerated filer

☐

Smaller reporting company

☐

Emerging growth company

☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑

There were ~~1,867,323,448~~1,933,911,944 shares of the Company’s common stock outstanding on ~~September~~June 30, ~~2020.~~2021.

Table of Contents

TABLE OF CONTENTS


		Page No.
	Cautionary Statements Relevant to Forward-Looking Information for the Purpose of “Safe Harbor” Provisions of the Private Securities Litigation Reform Act of 1995	2
PART I FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements —
	Consolidated Statement of Income for the Three and ~~Nine~~Six Months Ended ~~September~~June 30,, 2021 and 2020 , ~~and 2019~~	3
	Consolidated Statement of Comprehensive Income for the Three and ~~Nine~~Six Months Ended S ~~eptember~~June 30,, 2021 and 2020 , ~~and 2019~~	4
	Consolidated Balance Sheet at ~~September~~June 30 ~~, 2020~~30 , 2021, and December 31, ~~2019~~2020	5
	Consolidated Statement of Cash Flows for the ~~Nine~~Six Months Ended ~~September~~June 30,, 2021 and 2020 , ~~and 2019~~	6
	Consolidated Statement of Equity for the Three and ~~Nine~~Six Months Ended June ~~Months Ended~~ ~~September~~30 ~~, 2020~~, 2021 and ~~2019~~2020	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	2423
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	4038
Item 4.	Controls and Procedures	4038
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	4038
Item 1A.	Risk Factors	4139
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	4339
Item 5.5.	Other Information	4339
Item 6.	Exhibits	4440
Signature		4541

Table of Contents

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION

FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE

PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

This quarterly report on Form 10-Q of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on ~~schedule,” “on~~ track,~~” “is slated,~~” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.

Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for our products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries (OPEC) and other producing countries; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions; changing refining, marketing and chemicals margins; the company’s ability to realize anticipated cost savings, expenditure reductions and efficiencies associated with enterprise transformation initiatives; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates, particularly during extended periods of low prices for crude oil and natural gas during the COVID-19 pandemic; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from pending or future litigation; the company’s ability to ~~successfully integrate the operations of Chevron and Noble Energy and~~ achieve the anticipated benefits from the acquisition of Noble ~~Energy;~~Energy, Inc.; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, ~~industry-specific~~ taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; material reductions in corporate liquidity and access to debt markets; the receipt of required Board authorizations to pay future dividends; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 18 through 2123 of the company’s ~~2019~~2020 Annual Report on Form 10-K ~~on pages 41 to 42 of this report~~ and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.

Table of Contents

PART I.

FINANCIAL INFORMATION

Item 1.Consolidated Financial Statements

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
		(Millions of dollars, except per-share amounts)									(Millions of dollars, except per-share amounts)
Revenues and Other Income	Revenues and Other Income									Revenues and Other Income
Sales and other operating revenues	Sales and other operating revenues	$	23,997	$	34,779	$	69,628	$	105,291	Sales and other operating revenues	$	36,117	$	15,926	$	67,193	$	45,631
Income (loss) from equity affiliates	Income (loss) from equity affiliates	510		1,172		(1,040)		3,430		Income (loss) from equity affiliates	1,442		(2,515)		2,353		(1,550)
Other income (loss)	Other income (loss)	(56)		165		858		1,445		Other income (loss)	38		83		80		914
Total Revenues and Other Income	Total Revenues and Other Income	24,451		36,116		69,446		110,166		Total Revenues and Other Income	37,597		13,494		69,626		44,995
Costs and Other Deductions	Costs and Other Deductions									Costs and Other Deductions
Purchased crude oil and products	Purchased crude oil and products	13,448		19,882		37,101		60,420		Purchased crude oil and products	20,629		8,144		38,197		23,653
Operating expenses	Operating expenses	4,604		5,325		15,425		15,398		Operating expenses	4,899		5,530		9,866		10,821
Selling, general and administrative expenses	Selling, general and administrative expenses	832		954		3,084		3,014		Selling, general and administrative expenses	1,096		1,569		2,086		2,252
Exploration expenses	Exploration expenses	117		168		1,170		498		Exploration expenses	113		895		199		1,053
Depreciation, depletion and amortization	Depreciation, depletion and amortization	4,017		4,361		15,022		12,789		Depreciation, depletion and amortization	4,522		6,717		8,808		11,005
Taxes other than on income	Taxes other than on income	1,091		1,059		3,223		3,167		Taxes other than on income	1,566		965		2,986		2,132
Interest and debt expense	Interest and debt expense	164		197		498		620		Interest and debt expense	185		172		383		334
Other components of net periodic benefit costs	Other components of net periodic benefit costs	222		121		419		319		Other components of net periodic benefit costs	165		99		502		197
Total Costs and Other Deductions	Total Costs and Other Deductions	24,495		32,067		75,942		96,225		Total Costs and Other Deductions	33,175		24,091		63,027		51,447
Income (Loss) Before Income Tax Expense	Income (Loss) Before Income Tax Expense	(44)		4,049		(6,496)		13,941		Income (Loss) Before Income Tax Expense	4,422		(10,597)		6,599		(6,452)
Income Tax Expense (Benefit)	Income Tax Expense (Benefit)	165		1,469		(1,591)		4,429		Income Tax Expense (Benefit)	1,328		(2,320)		2,107		(1,756)
Net Income (Loss)	Net Income (Loss)	(209)		2,580		(4,905)		9,512		Net Income (Loss)	3,094		(8,277)		4,492		(4,696)
Less: Net income (loss) attributable to noncontrolling interests	Less: Net income (loss) attributable to noncontrolling interests	(2)		0		(27)		(22)		Less: Net income (loss) attributable to noncontrolling interests	12		(7)		33		(25)
Net Income (Loss) Attributable to Chevron Corporation	Net Income (Loss) Attributable to Chevron Corporation	$	(207)	$	2,580	$	(4,878)	$	9,534	Net Income (Loss) Attributable to Chevron Corporation	$	3,082	$	(8,270)	$	4,459	$	(4,671)
Per Share of Common Stock	Per Share of Common Stock									Per Share of Common Stock
Net Income (Loss) Attributable to Chevron Corporation	Net Income (Loss) Attributable to Chevron Corporation									Net Income (Loss) Attributable to Chevron Corporation
- Basic	- Basic	$	(0.12)	$	1.38	$	(2.63)	$	5.06	- Basic	$	1.61	$	(4.44)	$	2.33	$	(2.51)
- Diluted	- Diluted	$	(0.12)	$	1.36	$	(2.63)	$	5.02	- Diluted	$	1.60	$	(4.44)	$	2.32	$	(2.51)
Weighted Average Number of Shares Outstanding (000s)	Weighted Average Number of Shares Outstanding (000s)									Weighted Average Number of Shares Outstanding (000s)
- Basic	- Basic	1,853,533		1,880,607		1,856,363		1,885,931		- Basic	1,917,536		1,853,313		1,915,243		1,857,793
- Diluted	- Diluted	1,853,533		1,893,928		1,856,363		1,899,193		- Diluted	1,921,958		1,853,313		1,918,940		1,857,793

See accompanying notes to consolidated financial statements.

Table of Contents

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
		(Millions of dollars)									(Millions of dollars)
Net Income (Loss)	Net Income (Loss)	$	(209)	$	2,580	$	(4,905)	$	9,512	Net Income (Loss)	$	3,094	$	(8,277)	$	4,492	$	(4,696)
Currency translation adjustment	Currency translation adjustment	17		(33)		5		(32)		Currency translation adjustment	3		7		(16)		(12)
Unrealized holding gain (loss) on securities	Unrealized holding gain (loss) on securities									Unrealized holding gain (loss) on securities
Net gain (loss) arising during period	Net gain (loss) arising during period	(1)		2		(5)		2		Net gain (loss) arising during period	5		(1)		2		(4)
Derivatives	Derivatives									Derivatives
Net derivatives loss on hedge transactions	Net derivatives loss on hedge transactions	0		0		0		(1)		Net derivatives loss on hedge transactions	(2)		0		(2)		0
Reclassification to net income of net realized gain		0		0		0		0
Income taxes on derivatives transactions		0		3		0		3

Total	Total	0		3		0		2		Total	(2)		0		(2)		0
Defined benefit plans	Defined benefit plans									Defined benefit plans
Actuarial gain (loss)	Actuarial gain (loss)									Actuarial gain (loss)
Amortization to net income of net actuarial loss and settlements	Amortization to net income of net actuarial loss and settlements	293		150		628		400		Amortization to net income of net actuarial loss and settlements	242		169		677		335
Actuarial gain (loss) arising during period	Actuarial gain (loss) arising during period	0		0		0		(4)		Actuarial gain (loss) arising during period	110		0		1,017		0
Prior service credits (cost)	Prior service credits (cost)									Prior service credits (cost)
Amortization to net income of net prior service costs and curtailments	Amortization to net income of net prior service costs and curtailments	(5)		(4)		(13)		(11)		Amortization to net income of net prior service costs and curtailments	(4)		(5)		(8)		(8)
Prior service (costs) credits arising during period	Prior service (costs) credits arising during period	0		0		0		1		Prior service (costs) credits arising during period	3		0		3		0
Defined benefit plans sponsored by equity affiliates - benefit (cost)	Defined benefit plans sponsored by equity affiliates - benefit (cost)	5		3		14		8		Defined benefit plans sponsored by equity affiliates - benefit (cost)	29		7		40		9
Income (taxes) benefit on defined benefit plans	Income (taxes) benefit on defined benefit plans	(66)		(33)		(146)		(91)		Income (taxes) benefit on defined benefit plans	(95)		(43)		(396)		(80)
Total	Total	227		116		483		303		Total	285		128		1,333		256
Other Comprehensive Gain (Loss), Net of Tax	Other Comprehensive Gain (Loss), Net of Tax	243		88		483		275		Other Comprehensive Gain (Loss), Net of Tax	291		134		1,317		240
Comprehensive Income (Loss)	Comprehensive Income (Loss)	34		2,668		(4,422)		9,787		Comprehensive Income (Loss)	3,385		(8,143)		5,809		(4,456)
Comprehensive loss (income) attributable to noncontrolling interests	Comprehensive loss (income) attributable to noncontrolling interests	2		0		27		22		Comprehensive loss (income) attributable to noncontrolling interests	(12)		7		(33)		25
Comprehensive Income (Loss) Attributable to Chevron Corporation	Comprehensive Income (Loss) Attributable to Chevron Corporation	$	36	$	2,668	$	(4,395)	$	9,809	Comprehensive Income (Loss) Attributable to Chevron Corporation	$	3,373	$	(8,136)	$	5,776	$	(4,431)

See accompanying notes to consolidated financial statements.

Table of Contents

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)


		At September 30, 2020		At December 31, 2019			At June 30, 2021		At December 31, 2020
		(Millions of dollars)					(Millions of dollars)
Assets	Assets					Assets
Cash and cash equivalents	Cash and cash equivalents	$	6,866	$	5,686	Cash and cash equivalents	$	7,527	$	5,596

Marketable securities	Marketable securities	28		63		Marketable securities	34		31
Accounts and notes receivable, net		9,722		13,325
Accounts and notes receivable (less allowance: 2021 - $281; 2020 - $284)						Accounts and notes receivable (less allowance: 2021 - $281; 2020 - $284)	15,705		11,471
Inventories:	Inventories:					Inventories:
Crude oil and petroleum products	Crude oil and petroleum products	3,588		3,722		Crude oil and petroleum products	4,093		3,576
Chemicals	Chemicals	409		492		Chemicals	556		457
Materials, supplies and other	Materials, supplies and other	1,684		1,634		Materials, supplies and other	1,590		1,643
Total inventories	Total inventories	5,681		5,848		Total inventories	6,239		5,676
Prepaid expenses and other current assets	Prepaid expenses and other current assets	2,506		3,407		Prepaid expenses and other current assets	3,468		3,304
Total Current Assets	Total Current Assets	24,803		28,329		Total Current Assets	32,973		26,078
Long-term receivables, net		780		1,511
Long-term receivables (less allowance: 2021 - $418; 2020 - $387)						Long-term receivables (less allowance: 2021 - $418; 2020 - $387)	566		589
Investments and advances	Investments and advances	37,655		38,688		Investments and advances	40,551		39,052
Properties, plant and equipment, at cost	Properties, plant and equipment, at cost	325,131		326,722		Properties, plant and equipment, at cost	342,157		345,232
Less: Accumulated depreciation, depletion and amortization	Less: Accumulated depreciation, depletion and amortization	182,748		176,228		Less: Accumulated depreciation, depletion and amortization	190,949		188,614
Properties, plant and equipment, net	Properties, plant and equipment, net	142,383		150,494		Properties, plant and equipment, net	151,208		156,618
Deferred charges and other assets	Deferred charges and other assets	11,227		10,532		Deferred charges and other assets	11,744		11,950
Goodwill	Goodwill	4,416		4,463		Goodwill	4,402		4,402
Assets held for sale	Assets held for sale	1,799		3,411		Assets held for sale	1,362		1,101
Total Assets	Total Assets	$	223,063	$	237,428	Total Assets	$	242,806	$	239,790
Liabilities and Equity	Liabilities and Equity					Liabilities and Equity
Short-term debt	Short-term debt	$	530	$	3,282	Short-term debt	$	3,497	$	1,548
Accounts payable	Accounts payable	9,537		14,103		Accounts payable	14,719		10,950
Accrued liabilities	Accrued liabilities	7,944		6,589		Accrued liabilities	7,680		7,812
Federal and other taxes on income	Federal and other taxes on income	788		1,554		Federal and other taxes on income	1,212		921
Other taxes payable	Other taxes payable	865		1,002		Other taxes payable	1,039		952
Total Current Liabilities	Total Current Liabilities	19,664		26,530		Total Current Liabilities	28,147		22,183
Long-term debt	Long-term debt	34,280		23,691		Long-term debt	39,521		42,767

Deferred credits and other noncurrent obligations	Deferred credits and other noncurrent obligations	19,267		20,445		Deferred credits and other noncurrent obligations	20,437		20,328
Noncurrent deferred income taxes	Noncurrent deferred income taxes	10,625		13,688		Noncurrent deferred income taxes	13,140		12,569
Noncurrent employee benefit plans	Noncurrent employee benefit plans	7,189		7,866		Noncurrent employee benefit plans	7,650		9,217
Total Liabilities*	Total Liabilities*	$	91,025	$	92,220	Total Liabilities*	$	108,895	$	107,064
Preferred stock (authorized 100,000,000 shares; $1.00 par value; NaN issued)	Preferred stock (authorized 100,000,000 shares; $1.00 par value; NaN issued)	0		0		Preferred stock (authorized 100,000,000 shares; $1.00 par value; NaN issued)	0		0
Common stock (authorized 6,000,000,000 shares, $0.75 par value; 2,442,676,580 shares issued at September 30, 2020 and December 31, 2019)		1,832		1,832
Common stock (authorized 6,000,000,000 shares, $0.75 par value; 2,442,676,580 shares issued at June 30, 2021 and December 31, 2020)						Common stock (authorized 6,000,000,000 shares, $0.75 par value; 2,442,676,580 shares issued at June 30, 2021 and December 31, 2020)	1,832		1,832
Capital in excess of par value	Capital in excess of par value	17,318		17,265		Capital in excess of par value	17,044		16,829
Retained earnings	Retained earnings	163,509		174,945		Retained earnings	159,640		160,377
Accumulated other comprehensive losses	Accumulated other comprehensive losses	(4,507)		(4,990)		Accumulated other comprehensive losses	(4,295)		(5,612)
Deferred compensation and benefit plan trust	Deferred compensation and benefit plan trust	(240)		(240)		Deferred compensation and benefit plan trust	(240)		(240)
Treasury stock, at cost (575,353,132 and 560,508,479 shares at September 30, 2020 and December 31, 2019, respectively)		(46,138)		(44,599)
Treasury stock, at cost (508,764,636 and 517,490,263 shares at June 30, 2021 and December 31, 2020, respectively)						Treasury stock, at cost (508,764,636 and 517,490,263 shares at June 30, 2021 and December 31, 2020, respectively)	(40,799)		(41,498)
Total Chevron Corporation Stockholders’ Equity	Total Chevron Corporation Stockholders’ Equity	131,774		144,213		Total Chevron Corporation Stockholders’ Equity	133,182		131,688
Noncontrolling interests		264		995
Noncontrolling interests (includes redeemable noncontrolling interest of $127 and $120 at June 30, 2021 and December 31, 2020, respectively)						Noncontrolling interests (includes redeemable noncontrolling interest of $127 and $120 at June 30, 2021 and December 31, 2020, respectively)	729		1,038
Total Equity	Total Equity	132,038		145,208		Total Equity	133,911		132,726
Total Liabilities and Equity	Total Liabilities and Equity	$	223,063	$	237,428	Total Liabilities and Equity	$	242,806	$	239,790
___________________________
* Refer to Note 13, “Other Contingencies and Commitments” beginning on page 16.

* Refer to Note 12, “Other Contingencies and Commitments” beginning on page 17.						* Refer to Note 12, “Other Contingencies and Commitments” beginning on page 17.

See accompanying notes to consolidated financial statements.

Table of Contents

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)


		Nine Months Ended September 30					Six Months Ended June 30
		2020		2019			2021		2020
		(Millions of dollars)					(Millions of dollars)
Operating Activities	Operating Activities					Operating Activities
Net Income (Loss)	Net Income (Loss)	$	(4,905)	$	9,512	Net Income (Loss)	$	4,492	$	(4,696)
Adjustments	Adjustments					Adjustments
Depreciation, depletion and amortization	Depreciation, depletion and amortization	15,022		12,789		Depreciation, depletion and amortization	8,808		11,005
Dry hole expense	Dry hole expense	848		137		Dry hole expense	19		845
Distributions more (less) than income from equity affiliates	Distributions more (less) than income from equity affiliates	2,249		(1,897)		Distributions more (less) than income from equity affiliates	(1,417)		2,278
Net before-tax losses (gains) on asset retirements and sales	Net before-tax losses (gains) on asset retirements and sales	(625)		(106)		Net before-tax losses (gains) on asset retirements and sales	(87)		(598)
Net foreign currency effects	Net foreign currency effects	190		54		Net foreign currency effects	159		(19)
Deferred income tax provision	Deferred income tax provision	(3,180)		986		Deferred income tax provision	(186)		(2,547)
Net decrease (increase) in operating working capital	Net decrease (increase) in operating working capital	(21)		1,126		Net decrease (increase) in operating working capital	(1,032)		(373)
Decrease (increase) in long-term receivables	Decrease (increase) in long-term receivables	84		426		Decrease (increase) in long-term receivables	22		49
Net decrease (increase) in other deferred charges	Net decrease (increase) in other deferred charges	(145)		(144)		Net decrease (increase) in other deferred charges	(116)		(109)
Cash contributions to employee pension plans	Cash contributions to employee pension plans	(895)		(1,204)		Cash contributions to employee pension plans	(581)		(531)
Other	Other	(283)		(22)		Other	1,069		(502)
Net Cash Provided by Operating Activities	Net Cash Provided by Operating Activities	8,339		21,657		Net Cash Provided by Operating Activities	11,150		4,802
Investing Activities	Investing Activities					Investing Activities

Capital expenditures	Capital expenditures	(6,855)		(9,906)		Capital expenditures	(3,543)		(5,225)
Proceeds and deposits related to asset sales and returns of investment	Proceeds and deposits related to asset sales and returns of investment	1,979		1,088		Proceeds and deposits related to asset sales and returns of investment	369		1,852
Net maturities of (investments in) time deposits		0		950

Net sales (purchases) of marketable securities	Net sales (purchases) of marketable securities	35		2		Net sales (purchases) of marketable securities	0		(1)
Net repayment (borrowing) of loans by equity affiliates	Net repayment (borrowing) of loans by equity affiliates	(1,434)		(970)		Net repayment (borrowing) of loans by equity affiliates	39		(1,074)
Net Cash Used for Investing Activities	Net Cash Used for Investing Activities	(6,275)		(8,836)		Net Cash Used for Investing Activities	(3,135)		(4,448)
Financing Activities	Financing Activities					Financing Activities
Net borrowings (repayments) of short-term obligations	Net borrowings (repayments) of short-term obligations	(606)		1,973		Net borrowings (repayments) of short-term obligations	1,948		2,571
Proceeds from issuances of long-term debt	Proceeds from issuances of long-term debt	12,237		0		Proceeds from issuances of long-term debt	0		8,250
Repayments of long-term debt and other financing obligations	Repayments of long-term debt and other financing obligations	(3,941)		(3,868)		Repayments of long-term debt and other financing obligations	(3,252)		(3,820)
Cash dividends - common stock	Cash dividends - common stock	(7,186)		(6,731)		Cash dividends - common stock	(5,041)		(4,796)
Distributions to noncontrolling interests	Distributions to noncontrolling interests	(10)		(16)		Distributions to noncontrolling interests	(26)		(10)
Net sales (purchases) of treasury shares	Net sales (purchases) of treasury shares	(1,545)		(1,845)		Net sales (purchases) of treasury shares	373		(1,550)
Net Cash Provided by (Used for) Financing Activities	Net Cash Provided by (Used for) Financing Activities	(1,051)		(10,487)		Net Cash Provided by (Used for) Financing Activities	(5,998)		645
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(133)		5		Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash	(66)		(131)
Net Change in Cash, Cash Equivalents and Restricted Cash	Net Change in Cash, Cash Equivalents and Restricted Cash	880		2,339		Net Change in Cash, Cash Equivalents and Restricted Cash	1,951		868
Cash, Cash Equivalents and Restricted Cash at January 1	Cash, Cash Equivalents and Restricted Cash at January 1	6,911		10,481		Cash, Cash Equivalents and Restricted Cash at January 1	6,737		6,911
Cash, Cash Equivalents and Restricted Cash at September 30		$	7,791	$	12,820
Cash, Cash Equivalents and Restricted Cash at June 30						Cash, Cash Equivalents and Restricted Cash at June 30	$	8,688	$	7,779

See accompanying notes to consolidated financial statements.

Table of Contents

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF EQUITY

(Unaudited)


(Millions of dollars)	(Millions of dollars)					Accumulated		Treasury		Chevron Corp.		Non-				(Millions of dollars)					Accumulated		Treasury		Chevron Corp.		Non-
		Common		Retained		Other Comp.		Stock		Stockholders’		Controlling		Total			Common		Retained		Other Comp.		Stock		Stockholders’		Controlling		Total
Three Months Ended September 30		Stock(1)		Earnings		Income (Loss)		(at cost)		Equity		Interests		Equity
Balance at June 30, 2019		$	18,776	$	183,442	$	(3,357)	$	(42,466)	$	156,395	$	1,056	$	157,451
Three Months Ended June 30																Three Months Ended June 30	Stock(1)		Earnings		Income (Loss)		(at cost)		Equity		Interests		Equity
Balance at March 31, 2020																Balance at March 31, 2020	$	18,867	$	176,113	$	(4,884)	$	(46,166)	$	143,930	$	984	$	144,914
Treasury stock transactions	Treasury stock transactions	51		—		—		—		51		—		51		Treasury stock transactions	22		—		—		—		22		—		22
Net income (loss)	Net income (loss)	—		2,580		—		—		2,580		0		2,580		Net income (loss)	—		(8,270)		—		—		(8,270)		(7)		(8,277)
Cash dividends	Cash dividends	—		(2,237)		—		—		(2,237)		(8)		(2,245)		Cash dividends	—		(2,394)		—		—		(2,394)		(5)		(2,399)
Stock dividends	Stock dividends	—		(1)		—		—		(1)		—		(1)		Stock dividends	—		0		—		—		0		—		0
Other comprehensive income	Other comprehensive income	—		—		88		—		88		—		88		Other comprehensive income	—		—		134		—		134		—		134
Purchases of treasury shares	Purchases of treasury shares	—		—		—		(1,250)		(1,250)		—		(1,250)		Purchases of treasury shares	—		—		—		—		0		—		0
Issuances of treasury shares	Issuances of treasury shares	—		—		—		216		216		—		216		Issuances of treasury shares	—		—		—		23		23		—		23
Other changes, net	Other changes, net	—		(1)		—		—		(1)		3		2		Other changes, net	—		673		—		—		673		(704)		(31)
Balance at September 30, 2019		$	18,827	$	183,783	$	(3,269)	$	(43,500)	$	155,841	$	1,051	$	156,892
Balance at June 30, 2020																Balance at June 30, 2020	$	18,889	$	166,122	$	(4,750)	$	(46,143)	$	134,118	$	268	$	134,386

Balance at June 30, 2020		$	18,889	$	166,122	$	(4,750)	$	(46,143)	$	134,118	$	268	$	134,386
Balance at March 31, 2021																Balance at March 31, 2021	$	18,458	$	159,285	$	(4,586)	$	(41,269)	$	131,888	$	1,045	$	132,933
Treasury stock transactions	Treasury stock transactions	21		—		—		—		21		—		21		Treasury stock transactions	40		—		—		—		40		—		40
NBLX Acquisition																NBLX Acquisition	138		(148)		—		377		367		(321)		46
Net income (loss)	Net income (loss)	—		(207)		—		—		(207)		(2)		(209)		Net income (loss)	—		3,082		—		—		3,082		12		3,094
Cash dividends	Cash dividends	—		(2,390)		—		—		(2,390)		0		(2,390)		Cash dividends	—		(2,573)		—		—		(2,573)		(14)		(2,587)
Stock dividends	Stock dividends	—		(1)		—		—		(1)		—		(1)		Stock dividends	—		—		—		—		0		—		0
Other comprehensive income	Other comprehensive income	—		—		243		—		243		—		243		Other comprehensive income	—		—		291		—		291		—		291
Purchases of treasury shares	Purchases of treasury shares	—		—		—		—		0		—		0		Purchases of treasury shares	—		—		—		(2)		(2)		—		(2)
Issuances of treasury shares	Issuances of treasury shares	—		—		—		5		5		—		5		Issuances of treasury shares	—		—		—		95		95		—		95
Other changes, net	Other changes, net	—		(15)		—		—		(15)		(2)		(17)		Other changes, net	—		(6)		—		—		(6)		7		1
Balance at September 30, 2020		$	18,910	$	163,509	$	(4,507)	$	(46,138)	$	131,774	$	264	$	132,038
Balance at June 30, 2021																Balance at June 30, 2021	$	18,636	$	159,640	$	(4,295)	$	(40,799)	$	133,182	$	729	$	133,911

Nine Months Ended September 30
Balance at December 31, 2018		$	18,704	$	180,987	$	(3,544)	$	(41,593)	$	154,554	$	1,088	$	155,642
Treasury stock transactions		123		—		—		—		123		—		123
Net income (loss)		—		9,534		—		—		9,534		(22)		9,512
Cash dividends		—		(6,731)		—		—		(6,731)		(16)		(6,747)
Stock dividends		—		(2)		—		—		(2)		—		(2)
Other comprehensive income		—		—		275		—		275		—		275
Purchases of treasury shares		—		—		—		(2,789)		(2,789)		—		(2,789)
Issuances of treasury shares		—		—		—		882		882		—		882
Other changes, net		—		(5)		—		—		(5)		1		(4)
Balance at September 30, 2019		$	18,827	$	183,783	$	(3,269)	$	(43,500)	$	155,841	$	1,051	$	156,892

Six Months Ended June 30																Six Months Ended June 30
Balance at December 31, 2019	Balance at December 31, 2019	$	18,857	$	174,945	$	(4,990)	$	(44,599)	$	144,213	$	995	$	145,208	Balance at December 31, 2019	$	18,857	$	174,945	$	(4,990)	$	(44,599)	$	144,213	$	995	$	145,208
Treasury stock transactions	Treasury stock transactions	53		—		—		—		53		—		53		Treasury stock transactions	32		—		—		—		32		—		32
Net income (loss)	Net income (loss)	—		(4,878)		—		—		(4,878)		(27)		(4,905)		Net income (loss)	—		(4,671)		—		—		(4,671)		(25)		(4,696)
Cash dividends	Cash dividends	—		(7,186)		—		—		(7,186)		(10)		(7,196)		Cash dividends	—		(4,796)		—		—		(4,796)		(10)		(4,806)
Stock dividends	Stock dividends	—		(2)		—		—		(2)		—		(2)		Stock dividends	—		(1)		—		—		(1)		—		(1)
Other comprehensive income	Other comprehensive income	—		—		483		—		483		—		483		Other comprehensive income	—		—		240		—		240		—		240
Purchases of treasury shares	Purchases of treasury shares	—		—		—		(1,751)		(1,751)		—		(1,751)		Purchases of treasury shares	—		—		—		(1,751)		(1,751)		—		(1,751)
Issuances of treasury shares	Issuances of treasury shares	—		—		—		212		212		—		212		Issuances of treasury shares	—		—		—		207		207		—		207
Other changes, net	Other changes, net	—		630		—		—		630		(694)		(64)		Other changes, net	—		645		—		—		645		(692)		(47)
Balance at September 30, 2020		$	18,910	$	163,509	$	(4,507)	$	(46,138)	$	131,774	$	264	$	132,038
Balance at June 30, 2020																Balance at June 30, 2020	$	18,889	$	166,122	$	(4,750)	$	(46,143)	$	134,118	$	268	$	134,386

Balance at December 31, 2020																Balance at December 31, 2020	$	18,421	$	160,377	$	(5,612)	$	(41,498)	$	131,688	$	1,038	$	132,726
Treasury stock transactions																Treasury stock transactions	77		—		—		—		77		—		77
NBLX Acquisition																NBLX Acquisition	138		(148)		—		377		367		(321)		46
Net income (loss)																Net income (loss)	—		4,459		—		—		4,459		33		4,492
Cash dividends																Cash dividends	—		(5,041)		—		—		(5,041)		(26)		(5,067)
Stock dividends																Stock dividends	—		(1)		—		—		(1)		—		(1)
Other comprehensive income																Other comprehensive income	—		—		1,317		—		1,317		—		1,317
Purchases of treasury shares																Purchases of treasury shares	—		—		—		(8)		(8)		—		(8)
Issuances of treasury shares																Issuances of treasury shares	—		—		—		330		330		—		330
Other changes, net																Other changes, net	—		(6)		—		—		(6)		5		(1)
Balance at June 30, 2021																Balance at June 30, 2021	$	18,636	$	159,640	$	(4,295)	$	(40,799)	$	133,182	$	729	$	133,911

(Number of Shares)	(Number of Shares)	Common Stock - 2020								Common Stock - 2019						(Number of Shares)	Common Stock - 2021								Common Stock - 2020
Three Months Ended September 30		Issued(2)		Treasury		Outstanding				Issued(2)		Treasury		Outstanding
Balance at June 30		2,442,676,580		(575,408,748)		1,867,267,832				2,442,676,580		(544,258,109)		1,898,418,471
Three Months Ended June 30																Three Months Ended June 30	Issued(2)		Treasury		Outstanding				Issued(2)		Treasury		Outstanding
Balance at March 31																Balance at March 31	2,442,676,580		(514,624,401)		1,928,052,179				2,442,676,580		(575,697,930)		1,866,978,650
Purchases	Purchases	—		(2,220)		(2,220)				—		(10,302,969)		(10,302,969)		Purchases	—		(6,593)		(6,593)				—		(224)		(224)
Issuances	Issuances	—		57,836		57,836				—		2,756,686		2,756,686		Issuances	—		5,866,358		5,866,358				—		289,406		289,406
Balance at September 30		2,442,676,580		(575,353,132)		1,867,323,448				2,442,676,580		(551,804,392)		1,890,872,188
Balance at June 30																Balance at June 30	2,442,676,580		(508,764,636)		1,933,911,944				2,442,676,580		(575,408,748)		1,867,267,832

Nine Months Ended September 30
Six Months Ended June 30																Six Months Ended June 30
Balance at December 31	Balance at December 31	2,442,676,580		(560,508,479)		1,882,168,101				2,442,676,580		(539,838,890)		1,902,837,690		Balance at December 31	2,442,676,580		(517,490,263)		1,925,186,317				2,442,676,580		(560,508,479)		1,882,168,101
Purchases	Purchases	—		(17,503,545)		(17,503,545)				—		(23,342,737)		(23,342,737)		Purchases	—		(73,596)		(73,596)				—		(17,501,326)		(17,501,326)
Issuances	Issuances	—		2,658,892		2,658,892				—		11,377,235		11,377,235		Issuances	—		8,799,223		8,799,223				—		2,601,057		2,601,057
Balance at September 30		2,442,676,580		(575,353,132)		1,867,323,448				2,442,676,580		(551,804,392)		1,890,872,188
Balance at June 30																Balance at June 30	2,442,676,580		(508,764,636)		1,933,911,944				2,442,676,580		(575,408,748)		1,867,267,832

(1)Beginning and ending balances for all periods include capital in excess of par, common stock issued at par for $1,832, and $(240) associated with Chevron’s Benefit Plan Trust. Changes reflect capital in excess of par.

(2)Beginning and ending total issued share balances include 14,168,000 shares associated with Chevron’s Benefit Plan Trust for all periods.

See accompanying notes to consolidated financial statements.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. General

Basis of Presentation The accompanying consolidated financial statements of Chevron Corporation and its subsidiaries (together, Chevron or the company) have not been audited by an independent registered public accounting firm. In the opinion of the company’s management, the interim data includes all adjustments necessary for a fair statement of the results for the interim periods. These adjustments were of a normal recurring nature. The results for the three- and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2020,~~2021, are not necessarily indicative of future financial results. The term “earnings” is defined as net income attributable to Chevron.

Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the company’s ~~2019~~2020 Annual Report on Form 10-K.

Impact of the Coronavirus Disease 2019 (COVID-19) Pandemic The outbreak of COVID-19 and decreases in commodity prices resulting from oversupply, government-imposed travel restrictions and other constraints on economic activity ~~have~~ caused a significant ~~decrease~~decline in the demand for our products and ~~has~~ created disruptions and volatility in the global marketplace beginning late in the first quarter 2020, which negatively affected our results of operations and cash ~~flows. These conditions persisted~~flows throughout ~~the third quarter and continue to negatively affect our results of operations and cash flows.~~2020. While demand and commodity prices have ~~shown signs of recovery, they are~~largely recovered, demand is not back to pre-pandemic levels, and financial results ~~are likely to~~could continue to be challenged in future quarters. ~~Due to the changing environment, there~~There continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic ~~will~~may impact our results, which could be material.

~~Note 2. Changes in Accumulated Other Comprehensive Losses~~

The change in Accumulated Other Comprehensive Losses (AOCL) presented on the Consolidated Balance Sheet and the impact of significant amounts reclassified from AOCL on information presented in the Consolidated Statement of Income for the nine months ended September 30, 2020 and 2019 are reflected in the table below.

~~Changes in Accumulated Other Comprehensive Income (Loss) by Component(1)~~

~~(Millions of dollars)~~

Currency Translation Adjustment Unrealized Holding Gains (Losses) on Securities Derivatives Defined Benefit Plans Total
Balance at December 31, 2018 $ (124) $ (10) $ (2) $ (3,408) $ (3,544)
Components of Other Comprehensive Income (Loss):
Before Reclassifications (32) 2 2 1 (27)
Reclassifications 0 0 0 302 302
Net Other Comprehensive Income (Loss) (32) 2 2 303 275
Balance at September 30, 2019 $ (156) $ (8) $ 0 $ (3,105) $ (3,269)
Balance at December 31, 2019 $ (142) $ (8) $ 0 $ (4,840) $ (4,990)
Components of Other Comprehensive Income (Loss):
Before Reclassifications 5 (5) 0 9 9
Reclassifications(2)
0 0 0 474 474
Net Other Comprehensive Income (Loss) 5 (5) 0 483 483
Balance at September 30, 2020 $ (137) $ (13) $ 0 $ (4,357) $ (4,507)

~~(1)All amounts are net of tax.~~

~~(2)~~Refer to Note 9, Employee Benefits for reclassified components totaling $615 million that are included in employee benefit costs for the nine months ended September 30, 2020. Related income taxes for the same period, totaling $141 million, are reflected in “Income Tax Expense” on the Consolidated Statement of Income. All other reclassified amounts were insignificant.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 2. Information Relating to the Consolidated Statement of Cash Flows


	Six Months Ended June 30
	2021		2020
	(Millions of dollars)
Distributions more (less) than income from equity affiliates includes the following:
Distributions from equity affiliates	$	936	$	728
(Income) loss from equity affiliates	(2,353)		1,550
Distributions more (less) than income from equity affiliates	$	(1,417)	$	2,278
Net decrease (increase) in operating working capital was composed of the following:
Decrease (increase) in accounts and notes receivable	$	(4,725)	$	4,769
Decrease (increase) in inventories	(471)		371
Decrease (increase) in prepaid expenses and other current assets	(1)		392
Increase (decrease) in accounts payable and accrued liabilities	3,751		(4,812)
Increase (decrease) in income and other taxes payable	414		(1,093)
Net decrease (increase) in operating working capital	$	(1,032)	$	(373)
Net cash provided by operating activities includes the following cash payments:
Interest on debt (net of capitalized interest)	$	355	$	328
Income taxes	1,939		2,142
Proceeds and deposits related to asset sales and returns of investment consisted of the following gross amounts:
Proceeds and deposits related to asset sales	$	352	$	1,821
Returns of investment from equity affiliates	17		31
Proceeds and deposits related to asset sales and returns of investment	$	369	$	1,852




Net sales (purchases) of marketable securities consisted of the following gross amounts:
Marketable securities purchased	$	(3)	$	(1)
Marketable securities sold	3		0
Net sales (purchases) of marketable securities	$	0	$	(1)
Net repayment (borrowing) of loans by equity affiliates consisted of the following gross amounts:
Borrowing of loans by equity affiliates	$	0	$	(1,100)
Repayment of loans by equity affiliates	39		26
Net repayment (borrowing) of loans by equity affiliates	$	39	$	(1,074)
Net borrowings (repayments) of short-term obligations consisted of the following gross and net amounts:
Proceeds from issuances of short-term obligations	$	4,449	$	7,922
Repayments of short-term obligations	(3,910)		(2,150)
Net borrowings (repayments) of short-term obligations with three months or less maturity	1,409		(3,201)
Net borrowings (repayments) of short-term obligations	$	1,948	$	2,571
Net sales (purchases) of treasury shares consists of the following gross and net amounts:
Shares issued for share-based compensation plans	$	381	$	201
Shares purchased under share repurchase and deferred compensation plans	(8)		(1,751)
Net sales (purchases) of treasury shares	$	373	$	(1,550)

The Consolidated Statement of Cash Flows excludes changes to the Consolidated Balance Sheet that did not affect cash.

The “Other” line in the Operating Activities section includes changes in postretirement benefits obligations and other long-term liabilities.

The company paid dividends of $1.34 per share of common stock in second quarter 2021. This compares to dividends of $1.29 per share paid in the year-ago corresponding period.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The major components of “Capital expenditures” and the reconciliation of this amount to the reported capital and exploratory expenditures, including equity affiliates, are presented in the following table:


	Six Months Ended June 30
	2021		2020
	(Millions of dollars)
Additions to properties, plant and equipment	$	3,354	$	4,991
Additions to investments	168		44
Current-year dry hole expenditures	19		223
Payments for other assets and liabilities, net	2		(33)
Capital expenditures	3,543		5,225
Expensed exploration expenditures	180		208
Assets acquired through finance lease obligations and other financing obligations	42		6
Payments for other assets and liabilities, net	(2)		33
Capital and exploratory expenditures, excluding equity affiliates	3,763		5,472
Company’s share of expenditures by equity affiliates	1,527		2,258
Capital and exploratory expenditures, including equity affiliates	$	5,290	$	7,730

The table below quantifies the beginning and ending balances of restricted cash and restricted cash equivalents in the Consolidated Balance Sheet:


	At June 30				At December 31
	2021		2020		2020		2019
	(Millions of dollars)
Cash and Cash Equivalents	$	7,527	$	6,855	$	5,596	$	5,686
Restricted cash included in “Prepaid expenses and other current assets”	378		161		365		452
Restricted cash included in “Deferred charges and other assets”	783		763		776		773
Total Cash, Cash Equivalents and Restricted Cash	$	8,688	$	7,779	$	6,737	$	6,911

Additional information related to “Restricted Cash” is included on page 19 in Note 13 under the heading “Restricted Cash.”

Note 3. Summarized Financial Data — ~~(Continued)~~Tengizchevroil LLP

Chevron has a 50 percent equity ownership interest in Tengizchevroil LLP (TCO). Summarized financial information for 100 percent of TCO is presented in the following table:


	Six Months Ended June 30
	2021		2020
	(Millions of dollars)
Sales and other operating revenues	$	7,368	$	4,567
Costs and other deductions	3,935		3,166
Net income attributable to TCO	$	2,403	$	984

Note 4. Summarized Financial Data — Chevron Phillips Chemical Company LLC

Chevron has a 50 percent equity ownership interest in Chevron Phillips Chemical Company LLC (CPChem). Summarized financial information for 100 percent of CPChem is presented in the table.


	Six Months Ended June 30
	2021		2020
	(Millions of dollars)
Sales and other operating revenues	$	6,452	$	3,998
Costs and other deductions	5,178		3,500
Net income attributable to CPChem	$	1,544	$	420

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 5. Summarized Financial Data — Chevron U.S.A. Inc.

Chevron U.S.A. Inc. (CUSA) is a major subsidiary of Chevron Corporation. CUSA and its subsidiaries manage and operate most of Chevron’s U.S. businesses. Assets include those related to the exploration and production of crude oil, natural gas and natural gas liquids and those associated with refining, marketing, and supply and distribution of products derived from petroleum, excluding most of the regulated pipeline operations of Chevron. CUSA also holds the company’s investment in the Chevron Phillips Chemical Company LLC joint venture, which is accounted for using the equity method.

The summarized financial information for CUSA and its consolidated subsidiaries is as follows:


	Six Months Ended June 30
	2021		2020
	(Millions of dollars)
Sales and other operating revenues	$	51,752	$	32,779
Costs and other deductions	50,962		35,953
Net income (loss) attributable to CUSA	$	1,290	$	(2,151)


	At June 30, 2021		At December 31, 2020
	(Millions of dollars)
Current assets	$	15,722	$	10,555
Other assets	47,427		48,054
Current liabilities	15,437		12,403
Other liabilities	22,102		14,102
Total CUSA net equity	$	25,610	$	32,104
Memo: Total debt	$	14,972	$	7,133

~~Note 3. Information Relating to the Consolidated Statement of Cash Flows~~

Nine Months Ended
September 30
2020 2019
(Millions of dollars)
Distributions more (less) than income from equity affiliates includes the following:
Distributions from equity affiliates $ 1,209 $ 1,533
(Income) loss from equity affiliates 1,040 (3,430)
Distributions more (less) than income from equity affiliates $ 2,249 $ (1,897)
Net decrease (increase) in operating working capital was composed of the following:
Decrease (increase) in accounts and notes receivable $ 3,601 $ 2,254
Decrease (increase) in inventories 201 (20)
Decrease (increase) in prepaid expenses and other current assets 632 (286)
Increase (decrease) in accounts payable and accrued liabilities (3,609) (981)
Increase (decrease) in income and other taxes payable (846) 159
Net decrease (increase) in operating working capital $ (21) $ 1,126
Net cash provided by operating activities includes the following cash payments:
Interest on debt (net of capitalized interest) $ 384 $ 579
Income taxes 2,527 3,516
Proceeds and deposits related to asset sales and returns of investment consisted of the following gross amounts:
Proceeds and deposits related to asset sales $ 1,912 $ 1,021
Returns of investment from equity affiliates 67 67
Proceeds and deposits related to asset sales and returns of investment $ 1,979 $ 1,088
Net maturities of (investments in) time deposits consisted of the following gross amounts:
Investments in time deposits $ 0 $ 0
Maturities of time deposits 0 950
Net maturities of (investments in) time deposits $ 0 $ 950
Net sales (purchases) of marketable securities consisted of the following gross amounts:
Marketable securities purchased $ (2) $ (1)
Marketable securities sold 37 3
Net sales (purchases) of marketable securities $ 35 $ 2
Net repayment (borrowing) of loans by equity affiliates consisted of the following gross amounts:
Borrowing of loans by equity affiliates $ (3,925) $ (1,050)
Repayment of loans by equity affiliates 2,491 80
Net repayment (borrowing) of loans by equity affiliates $ (1,434) $ (970)
Net borrowings (repayments) of short-term obligations consisted of the following gross and net amounts:
Proceeds from issuances of short-term obligations $ 8,863 $ 1,821
Repayments of short-term obligations (7,479) (570)
Net borrowings (repayments) of short-term obligations with three months or less maturity (1,990) 722
Net borrowings (repayments) of short-term obligations $ (606) $ 1,973
Net sales (purchases) of treasury shares consists of the following gross and net amounts:
Shares issued for share-based compensation plans $ 206 $ 944
Shares purchased under share repurchase and deferred compensation plans (1,751) (2,789)
Net sales (purchases) of treasury shares $ (1,545) $ (1,845)

~~The Consolidated Statement of Cash Flows excludes changes to the Consolidated Balance Sheet that did not affect cash.~~

~~The “Other” line in the Operating Activities section includes changes in postretirement benefits obligations and other long-term liabilities.~~

~~Table of Contents~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

The company paid dividends of $1.29 per share of common stock in third quarter 2020 and $3.87 per share in the first nine months of 2020. This compares to dividends of $1.19 and $3.57 per share paid in the corresponding year-ago periods.

Nine Months Ended
September 30
2020 2019
(Millions of dollars)
Additions to properties, plant and equipment $ 6,576 $ 9,713
Additions to investments 86 69
Current-year dry hole expenditures 226 111
Payments for other assets and liabilities, net (33) 13
Capital expenditures 6,855 9,906
Expensed exploration expenditures 322 361
Assets acquired through finance lease obligations and other financing obligations 49 146
Payments for other assets and liabilities, net 33 (13)
Capital and exploratory expenditures, excluding equity affiliates 7,259 10,400
Company’s share of expenditures by equity affiliates 3,063 4,578
Capital and exploratory expenditures, including equity affiliates $ 10,322 $ 14,978

~~The table below quantifies the beginning and ending balances of restricted cash and restricted cash equivalents in the Consolidated Balance Sheet:~~

At September 30 At December 31
2020 2019 2019 2018
(Millions of dollars)
Cash and Cash Equivalents $ 6,866 $ 11,697 $ 5,686 $ 9,342
Restricted cash included in “Prepaid expenses and other current assets” 169 370 452 341
Restricted cash included in “Deferred charges and other assets” 756 753 773 798
Total Cash, Cash Equivalents and Restricted Cash $ 7,791 $ 12,820 $ 6,911 $ 10,481

~~Additional information related to “Restricted Cash” is included on page 19 in Note 14 under the heading “Restricted Cash.”~~

~~Note 4. New Accounting Standards~~

~~Financial Instruments - Credit Losses (Topic 326)~~ Effective January 1, 2020, Chevron adopted Accounting Standards Update (ASU) 2016-13 and its related amendments. For additional information on the company’s expected credit losses, refer to Note 17 on page 21.

~~Note 5. Summarized Financial Data — Tengizchevroil LLP~~

~~Chevron has a 50 percent equity ownership interest in Tengizchevroil LLP (TCO). Summarized financial information for 100 percent of TCO is presented in the following table:~~

Nine Months Ended
September 30
2020 2019
(Millions of dollars)
Sales and other operating revenues $ 6,757 $ 11,991
Costs and other deductions 4,655 5,971
Net income attributable to TCO $ 1,483 $ 4,230

Note 6. ~~Summarized Financial Data — Chevron Phillips Chemical Company LLC~~

Chevron has a 50 percent equity ownership interest in Chevron Phillips Chemical Company LLC (CPChem). Summarized financial information for 100 percent of CPChem is presented in the table on the next page:

~~Table of Contents~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

Nine Months Ended
September 30
2020 2019
(Millions of dollars)
Sales and other operating revenues $ 6,093 $ 7,209
Costs and other deductions 5,179 5,992
Net income attributable to CPChem $ 877 $ 1,464

~~Note 7. Summarized Financial Data — Chevron U.S.A. Inc.~~

~~The summarized financial information for CUSA and its consolidated subsidiaries is as follows:~~

Nine Months Ended
September 30
2020 2019
(Millions of dollars)
Sales and other operating revenues $ 50,360 $ 82,073
Costs and other deductions 54,221 79,794
Net income (loss) attributable to CUSA $ (2,203) $ 2,149

At September 30,
2020 At December 31,
2019
(Millions of dollars)
Current assets $ 9,523 $ 13,059
Other assets 49,582 50,796
Current liabilities 12,062 18,291
Other liabilities 14,415 12,565
Total CUSA net equity $ 32,628 $ 32,999
Memo: Total debt $ 7,132 $ 3,222

~~Note 8.~~ 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 2 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 the 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 company’s segments are managed by “segment managers” who report to the “chief operating decision maker” (CODM). The 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.

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).

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —- (Continued)

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~~six-month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, are presented in the following table:


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
Segment Earnings	Segment Earnings	(Millions of dollars)				(Millions of dollars)				Segment Earnings	(Millions of dollars)				(Millions of dollars)
Upstream	Upstream									Upstream
United States	United States	$	116	$	727	$	(1,709)	$	2,371	United States	$	1,446	$	(2,066)	$	2,387	$	(1,825)
International	International	119		1,977		(1,225)		6,939		International	1,732		(4,023)		3,141		(1,344)
Total Upstream	Total Upstream	235		2,704		(2,934)		9,310		Total Upstream	3,178		(6,089)		5,528		(3,169)
Downstream	Downstream									Downstream
United States	United States	141		389		(397)		1,071		United States	776		(988)		646		(538)
International	International	151		439		782		738		International	63		(22)		198		631
Total Downstream	Total Downstream	292		828		385		1,809		Total Downstream	839		(1,010)		844		93
Total Segment Earnings	Total Segment Earnings	527		3,532		(2,549)		11,119		Total Segment Earnings	4,017		(7,099)		6,372		(3,076)
All Other	All Other									All Other
Interest expense	Interest expense	(153)		(187)		(471)		(591)		Interest expense	(173)		(164)		(357)		(318)
Interest income	Interest income	7		48		43		142		Interest income	12		13		20		36
Other	Other	(588)		(813)		(1,901)		(1,136)		Other	(774)		(1,020)		(1,576)		(1,313)
Net Income Attributable to Chevron Corporation	Net Income Attributable to Chevron Corporation	$	(207)	$	2,580	$	(4,878)	$	9,534	Net Income Attributable to Chevron Corporation	$	3,082	$	(8,270)	$	4,459	$	(4,671)

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~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, are as follows:


		At September 30, 2020		At December 31, 2019			At June 30, 2021		At December 31, 2020
Segment Assets	Segment Assets	(Millions of dollars)				Segment Assets	(Millions of dollars)
Upstream	Upstream					Upstream
United States	United States	$	33,574	$	35,926	United States	$	41,713	$	42,431
International	International	135,540		145,648		International	142,202		144,476
Goodwill	Goodwill	4,416		4,463		Goodwill	4,402		4,402
Total Upstream	Total Upstream	173,530		186,037		Total Upstream	188,317		191,309
Downstream	Downstream					Downstream
United States	United States	23,335		25,197		United States	25,659		23,490
International	International	16,056		16,955		International	17,735		16,096
Total Downstream	Total Downstream	39,391		42,152		Total Downstream	43,394		39,586
Total Segment Assets	Total Segment Assets	212,921		228,189		Total Segment Assets	231,711		230,895
All Other	All Other					All Other
United States	United States	4,515		3,475		United States	4,836		4,017
International	International	5,627		5,764		International	6,259		4,878
Total All Other	Total All Other	10,142		9,239		Total All Other	11,095		8,895
Total Assets — United States	Total Assets — United States	61,424		64,598		Total Assets — United States	72,208		69,938
Total Assets — International	Total Assets — International	157,223		168,367		Total Assets — International	166,196		165,450
Goodwill	Goodwill	4,416		4,463		Goodwill	4,402		4,402
Total Assets	Total Assets	$	223,063	$	237,428	Total Assets	$	242,806	$	239,790

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —- (Continued)

Segment Sales and Other Operating Revenues Segment sales and other operating revenues, including internal transfers, for the three- and ~~nine-month~~six-month periods ended ~~September~~June 30, ~~2020~~2021 and ~~2019,~~2020, 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					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
Sales and Other Operating Revenues	Sales and Other Operating Revenues	(Millions of dollars)				(Millions of dollars)				Sales and Other Operating Revenues	(Millions of dollars)				(Millions of dollars)
Upstream	Upstream									Upstream
United States	United States	$	3,367	$	5,602	$	10,377	$	17,411	United States	$	6,034	$	2,544	$	11,825	$	7,010
International	International	5,911		8,607		19,478		26,953		International	9,516		4,554		18,306		13,567
Subtotal	Subtotal	9,278		14,209		29,855		44,364		Subtotal	15,550		7,098		30,131		20,577
Intersegment Elimination — United States	Intersegment Elimination — United States	(1,916)		(3,686)		(6,148)		(11,070)		Intersegment Elimination — United States	(3,256)		(1,420)		(6,111)		(4,232)
Intersegment Elimination — International	Intersegment Elimination — International	(1,661)		(3,015)		(5,223)		(9,411)		Intersegment Elimination — International	(2,761)		(1,021)		(5,136)		(3,562)
Total Upstream	Total Upstream	5,701		7,508		18,484		23,883		Total Upstream	9,533		4,657		18,884		12,783
Downstream	Downstream									Downstream
United States	United States	8,147		14,224		24,568		41,467		United States	13,911		5,235		24,765		16,421
International	International	10,649		14,230		29,341		43,438		International	13,605		6,519		25,187		18,692
Subtotal	Subtotal	18,796		28,454		53,909		84,905		Subtotal	27,516		11,754		49,952		35,113
Intersegment Elimination — United States	Intersegment Elimination — United States	(307)		(1,017)		(1,899)		(3,006)		Intersegment Elimination — United States	(500)		(332)		(966)		(1,592)
Intersegment Elimination — International	Intersegment Elimination — International	(230)		(227)		(1,001)		(678)		Intersegment Elimination — International	(457)		(186)		(726)		(771)
Total Downstream	Total Downstream	18,259		27,210		51,009		81,221		Total Downstream	26,559		11,236		48,260		32,750
All Other	All Other									All Other
United States	United States	208		270		645		763		United States	210		227		234		437
International	International	3		5		11		12		International	0		6		0		8
Subtotal	Subtotal	211		275		656		775		Subtotal	210		233		234		445
Intersegment Elimination — United States	Intersegment Elimination — United States	(171)		(209)		(510)		(576)		Intersegment Elimination — United States	(185)		(194)		(185)		(339)
Intersegment Elimination — International	Intersegment Elimination — International	(3)		(5)		(11)		(12)		Intersegment Elimination — International	0		(6)		0		(8)
Total All Other	Total All Other	37		61		135		187		Total All Other	25		33		49		98
Sales and Other Operating Revenues	Sales and Other Operating Revenues									Sales and Other Operating Revenues
United States	United States	11,722		20,096		35,590		59,641		United States	20,155		8,006		36,824		23,868
International	International	16,563		22,842		48,830		70,403		International	23,121		11,079		43,493		32,267
Subtotal	Subtotal	28,285		42,938		84,420		130,044		Subtotal	43,276		19,085		80,317		56,135
Intersegment Elimination — United States	Intersegment Elimination — United States	(2,394)		(4,912)		(8,557)		(14,652)		Intersegment Elimination — United States	(3,941)		(1,946)		(7,262)		(6,163)
Intersegment Elimination — International	Intersegment Elimination — International	(1,894)		(3,247)		(6,235)		(10,101)		Intersegment Elimination — International	(3,218)		(1,213)		(5,862)		(4,341)
Total Sales and Other Operating Revenues	Total Sales and Other Operating Revenues	$	23,997	$	34,779	$	69,628	$	105,291	Total Sales and Other Operating Revenues	$	36,117	$	15,926	$	67,193	$	45,631

Note 7. Employee Benefits

Chevron has defined benefit pension plans for many employees. The company typically prefunds defined benefit plans as required by local regulations or in certain situations where prefunding provides economic advantages. In the United States, all qualified plans are subject to the Employee Retirement Income Security Act minimum funding standard. The company does not typically fund U.S. nonqualified pension plans that are not subject to funding requirements under laws and regulations because contributions to these pension plans may be less economic and investment returns may be less attractive than the company’s other investment alternatives.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The company also sponsors other postretirement employee benefit (OPEB) plans that provide medical and dental benefits, as well as life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and the retirees share the costs. For the company’s main U.S. medical plan, the increase to the pre-Medicare company contribution for retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the company.

The components of net periodic benefit costs for 2021 and 2020 are as follows:


	Three Months Ended June 30					Six Months Ended June 30
	2021		2020			2021		2020
	(Millions of dollars)				(Millions of dollars)
Pension Benefits
United States
Service cost	$	108	$	125		$	225	$	249
Interest cost	64		88			119		176
Expected return on plan assets	(145)		(163)			(294)		(325)
Amortization of prior service costs (credits)	0		0			1		1
Amortization of actuarial losses (gains)	73		96			177		192
Settlement losses	151		60			468		120
Total United States	251		206			696		413
International
Service cost	37		32			71		64
Interest cost	36		44			69		87
Expected return on plan assets	(43)		(51)			(89)		(103)
Amortization of prior service costs (credits)	2		3			4		5
Amortization of actuarial losses (gains)	14		11			24		21
Settlement losses	0		0			0		0
Total International	46		39			79		74
Net Periodic Pension Benefit Costs	$	297	$	245		$	775	$	487
Other Benefits*
Service cost	$	10	$	10		$	21	$	19
Interest cost	13		17			26		35
Amortization of prior service costs (credits)	(6)		(8)			(13)		(14)
Amortization of actuarial losses (gains)	4		2			8		2

Net Periodic Other Benefit Costs	$	21	$	21		$	42	$	42

* Includes costs for U.S. and international OPEB plans. Obligations for plans outside the United States are not significant relative to the company’s total OPEB obligation.

Through June 30, 2021, a total of $581 million was contributed to employee pension plans (including $511 million to the U.S. plans). Total contributions for the full year are currently estimated to be $1.75 billion ($1.55 billion for the U.S. plans and $200 million for the international plans). Contribution amounts are dependent upon plan investment returns, changes in pension obligations, regulatory requirements and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations.

During the first six months of 2021, the company contributed $79 million to its OPEB plans. The company anticipates contributing approximately $75 million during the remainder of 2021.

Note ~~9. Employee Benefits~~

~~Table of Contents~~

~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

unfunded, and the company and the retirees share the costs. For the company’s main U.S. medical plan, the increase to the pre-Medicare company contribution for retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the company.

~~The components of net periodic benefit costs for 2020 and 2019 are as follows:~~

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars) (Millions of dollars)
Pension Benefits
United States
Service cost $ 124 $ 101 $ 373 $ 304
Interest cost 89 100 265 298
Expected return on plan assets (163) (141) (488) (423)
Amortization of prior service costs (credits) 0 0 1 1
Amortization of actuarial losses (gains) 96 60 288 179
Settlement losses 184 87 304 207
Total United States 330 207 743 566
International
Service cost 33 34 97 105
Interest cost 44 49 131 153
Expected return on plan assets (52) (56) (155) (171)
Amortization of prior service costs (credits) 2 3 7 9
Amortization of actuarial losses (gains) 12 4 33 15
Settlement losses 0 0 0 1
Total International 39 34 113 112
Net Periodic Pension Benefit Costs $ 369 $ 241 $ 856 $ 678
Other Benefits*
Service cost $ 9 $ 9 $ 28 $ 27
Interest cost 18 24 53 72
Amortization of prior service costs (credits) (7) (7) (21) (21)
Amortization of actuarial losses (gains) 1 (1) 3 (2)
Net Periodic Other Benefit Costs $ 21 $ 25 $ 63 $ 76

~~_ ___________________________________~~

* Includes costs for U.S. and international OPEB plans. Obligations for plans outside the United States are not significant relative to the company’s total OPEB obligation.

Through September 30, 2020, a total of $895 million was contributed to employee pension plans (including $726 million to the U.S. plans). Contribution amounts are dependent upon plan investment returns, changes in pension obligations, regulatory requirements and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations.

~~During the first nine months of 2020, the company contributed $120 million to its OPEB plans. The company anticipates contributing approximately $54 million during the remainder of 2020.~~

~~Note 10.~~8. Assets Held For Sale

At ~~September~~June 30, ~~2020,~~2021, the company classified ~~$1.80~~$1.36 billion of net properties, plant and equipment as “Assets held for sale” on the Consolidated Balance Sheet. These assets are associated with upstream operations that are anticipated to be sold in the next 12 months. The revenues and earnings contributions of these assets in ~~2019~~2020 and the first ~~nine~~six months of ~~2020~~2021 were not material.

~~Note 11. Income Taxes~~

The income tax expense decreased between quarterly periods from $1.47 billion in 2019 to $165 million in 2020. The company's income before income tax expense decreased $4.09 billion from $4.05 billion in 2019 to a loss of $44 million in 2020, primarily due to the decrease in crude prices and production. The company’s effective tax rate changed between quarterly periods from 36 percent in 2019 to negative 375 percent in 2020.

Table of Contents

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —- (Continued)

Note 9. Changes in Accumulated Other Comprehensive Losses

The change in Accumulated Other Comprehensive Losses (AOCL) presented on the ~~effective tax rate is primarily due to the one-time tax charge in an international location~~Consolidated Balance Sheet and the ~~consequence~~impact of significant amounts reclassified from AOCL on information presented in the ~~mix effect resulting from~~Consolidated Statement of Income for the ~~absolute level~~six months ended June 30, 2021 and 2020 are reflected in the table below.

Changes in Accumulated Other Comprehensive Income (Loss) by Component(1)

(Millions of ~~earnings~~dollars)



	Currency Translation Adjustment		Unrealized Holding Gains (Losses) on Securities		Derivatives		Defined Benefit Plans		Total
Balance at December 31, 2019	$	(142)	$	(8)	$	0	$	(4,840)	$	(4,990)
Components of Other Comprehensive Income (Loss):
Before Reclassifications	(12)		(4)		0		9		(7)
Reclassifications	0		0		0		247		247
Net Other Comprehensive Income (Loss)	(12)		(4)		0		256		240
Balance at June 30, 2020	$	(154)	$	(12)	$	0	$	(4,584)	$	(4,750)

Balance at December 31, 2020	$	(107)	$	(10)	$	0	$	(5,495)	$	(5,612)
Components of Other Comprehensive Income (Loss):
Before Reclassifications	(16)		2		(2)		820		804
Reclassifications(2)	0		0		0		513		513
Net Other Comprehensive Income (Loss)	(16)		2		(2)		1,333		1,317
Balance at June 30, 2021	$	(123)	$	(8)	$	(2)	$	(4,162)	$	(4,295)

(1)All amounts are net of tax.

(2)Refer to Note 7, Employee Benefits for reclassified components, including amortization of actuarial gains or losses, amortization of prior service costs and ~~whether they arose~~settlement losses, totaling $669 million that are included in ~~higher or lower tax rate jurisdictions.~~employee benefit costs for the six months ended June 30, 2021. Related income taxes for the same period, totaling $156 million, are reflected in “Income Tax Expense” on the Consolidated Statement of Income. All other reclassified amounts were insignificant.

Note 10. Income Taxes

The income tax expense ~~decreased~~increased between ~~the nine-month~~quarterly periods from a benefit of $2.32 billion in 2020 to a charge of ~~$4.43~~$1.33 billion in ~~2019 to a benefit of $1.59 billion in 2020. This decrease is a direct result of the company’s~~2021. The company's income before income tax expense ~~decreasing $20.44~~increased $15.02 billion from ~~$13.94 billion in 2019 to~~ a loss of ~~$6.50~~$10.60 billion in ~~2020. The decrease~~2020 to income of $4.42 billion in ~~income is~~2021, primarily due to the ~~reduction in prices and production,~~absence of second quarter 2020 impairments and ~~other corporate charges.~~write-offs, higher crude oil realizations and downstream margins, and an increase in production. The company’s effective tax rate changed between ~~nine-month~~quarterly periods from 3222 percent in ~~2019~~2020 to 2430 percent in ~~2020.~~2021. The ~~reduction~~increase in the effective tax rate is ~~primarily~~mainly due to the consequence of the mix ~~effect~~effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions and lower favorable international tax items.

The income tax expense increased between the six-month periods from a benefit of $1.76 billion in 2020 to a charge of $2.11 billion in 2021. This increase is ~~also~~a direct result of the company’s income before income tax expense increasing $13.05 billion, from a loss of $6.45 billion in 2020 to income of $6.60 billion in 2021. The increase in income is primarily due to the ~~impact~~absence of ~~tax benefits for releasing~~second quarter 2020 impairments and write-offs and higher crude oil realizations, partially offset by the ~~reserve on an uncertain tax position, valuation allowance release and a~~absence of 2020 asset sale gains. The company’s effective tax rate ~~change.~~changed between six-month periods from 27 percent in 2020 to 32 percent in 2021. The change in effective tax rate is primarily a consequence of the mix effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions and lower favorable international tax items.

Tax positions for Chevron and its subsidiaries and affiliates are subject to income tax audits by many tax jurisdictions throughout the world. For the company’s major tax jurisdictions, examinations of tax returns for certain prior tax years had not been completed as of ~~September~~June 30, ~~2020.~~2021. For these jurisdictions, the latest years for which income tax examinations had been finalized were as follows: United States — 2013, Nigeria — 2007, Australia — 2009, ~~and~~ Kazakhstan — ~~2012.~~2012 and Saudi Arabia — 2015.

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The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in the various jurisdictions. Both the outcomes for these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. However, it is reasonably possible that developments regarding tax matters in certain tax jurisdictions may result in significant increases or decreases in the company’s total unrecognized tax benefits within the next 12 months. Given the number of years that still remain subject to examination and the number of matters being examined in the various tax jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.

Note ~~12.~~11. Litigation

MTBE

Chevron and many other companies in the petroleum industry ~~have~~ used methyl tertiary butyl ether (MTBE) as a gasoline additive. Chevron is a party to 6 pending lawsuits and claims, the majority of which involve numerous other petroleum marketers and refiners. Resolution of these lawsuits and claims may ultimately require the company to correct or ameliorate the alleged effects on the environment of prior release of MTBE by the company or other parties. ~~Additional lawsuits and claims related to the use of MTBE, including personal-injury claims, may be filed in the future.~~ The company’s ultimate exposure related to pending lawsuits and claims is not determinable. The company no longer uses MTBE in the manufacture of gasoline in the United States.

Ecuador

Texaco Petroleum Company (Texpet), a subsidiary of Texaco Inc., was a minority member of an oil production consortium ~~in Ecuador~~with Ecuadorian state-owned Petroecuador from 1967 until ~~1992, with state-owned Petroecuador as the majority partner. Upon~~1992. After termination of the consortium and ~~following~~ a third-party environmental audit, Ecuador and the consortium parties entered into a settlement agreement specifying Texpet’s ~~environmental~~ remediation obligations. ~~After Texpet completed~~Following Texpet’s completion of a ~~three-year~~three-year remediation program, Ecuador certified ~~that~~ the remediation ~~was properly conducted~~as proper and released Texpet and its ~~related corporate entities~~affiliates from environmental liability.

In May 2003, plaintiffs alleging environmental harm from the consortium’s activities ~~filed a civil lawsuit against~~sued Chevron in the Superior Court ~~for the province of Nueva Loja~~ in Lago Agrio, Ecuador. Chevron defended itself on multiple grounds, including that the lawsuit was barred by the settlement and releases from Ecuador and that the evidence confirmed Texpet’s remediation was properly conducted and any remaining environmental impacts were due to Petroecuador’s failure to remediate its own majority share of the concession area and to Petroecuador’s conduct as sole owner of expanded operations in the area since 1992. In February 2011, ~~the Ecuadorian provincial~~that court entered a judgment against Chevron for approximately $9.5 billion plus additional punitive damages. ~~In January 2012, an~~An appellate panel affirmed, ~~the judgment~~ and

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~~ordered that Chevron pay an additional 0.10% in attorneys’ fees. In November 2013,~~ Ecuador’s National Court of Justice ratified the judgment but nullified the punitive ~~damage assessment,~~damages, resulting in a judgment of approximately $9.5 billion. Ecuador’s highest Constitutional Court rejected Chevron’s final appeal in July 2018.

In February 2011, Chevron ~~filed a civil lawsuit against~~sued the Lago Agrio plaintiffs and several of their lawyers and supporters in the U.S. District Court for the Southern District of New York ~~asserting~~(SDNY) for violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and state law. ~~After a trial, the New York~~The SDNY court ruled ~~in favor of Chevron, finding~~ that the Ecuadorian judgment had been procured through fraud, bribery, and corruption, and ~~prohibiting~~prohibited the RICO defendants from seeking to enforce the Ecuadorian judgment in the United States or profiting from their illegal acts. The ~~U.S.~~ Court of Appeals for the Second Circuit ~~unanimously~~ affirmed, and the U.S. Supreme Court denied certiorari in June 2017, rendering final the ~~New York~~U.S. judgment in favor of Chevron.

The Lago Agrio ~~plaintiffs’ lawyers~~plaintiffs sought to have the Ecuadorian judgment recognized and enforced in Canada, Brazil, and Argentina. All of those recognition and enforcement actions ~~have been finally~~were dismissed and resolved in Chevron’s favor. In Canada, following dismissal of Chevron Canada Limited from the action, the Ontario Superior Court ordered a final dismissal of the action against Chevron Corporation in July 2019 by consent of the parties. In Brazil and Argentina, after public prosecutors in each country recommended rejection of the plaintiffs’ action on grounds including that the Ecuadorian judgment was procured through fraud and corruption, Brazil’s Superior Court of Justice dismissed and the Supreme Court of Argentina affirmed dismissal by the lower court of the actions on jurisdictional grounds in rulings that became final in June 2018 and July 2020, respectively.

Chevron and Texpet filed an arbitration claim against Ecuador in September 2009 before an arbitral tribunal administered by the Permanent Court of Arbitration in The Hague, under the United States-Ecuador Bilateral Investment Treaty. In September 2013, the Tribunal issued a first partial award holding that, although the settlement and release agreements between Ecuador and Texpet did not preclude individual claims for personal harm, they did release Texpet and Chevron from public environmental claims. In August 2018, the Tribunal issued ~~a second partial~~an award holding that the Ecuadorian judgment was based on ~~public~~environmental claims that Ecuador had settled and released, and that it was procured through fraud, bribery, and corruption. According to the Tribunal, the Ecuadorian judgment “violates international public policy” and “should not be recognized or enforced by the courts of other States.” The Tribunal ordered Ecuador to ~~take immediate steps to~~ remove the status of enforceability from the Ecuadorian judgment and to compensate Chevron for any injuries resulting from the judgment. The third and final phase of the arbitration, to determine the amount of compensation Ecuador owes to Chevron, is ongoing. The District Court of The Hague denied a request by Ecuador to set aside the Arbitration Tribunal’s first partial award, and the Appeals Court and Supreme Court of the Netherlands upheld that denial. OnIn September ~~16,~~ 2020, the District Court of The Hague denied Ecuador’s request to set aside the Tribunal’s ~~second partial~~ award, holding that the award was well reasoned and complied with applicable law and public policy, and properly sought to “remov[e] the consequences of a fraudulent judgment that was rendered by a corrupt judge.” The District Court further recordedstating that it now is “common ground” between Ecuador and Chevron that the Ecuadorian judgment is fraudulent. In December 2020, Ecuador appealed the District Court’s decision to The Hague Court of Appeals. In a separate proceeding, Ecuador also admitted that the Ecuadorian judgment is fraudulent in a public filing with the Office of the United States Trade Representative in July 2020.

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Management’s Assessment The ultimate outcome of the foregoing matters, including any financial effect on Chevron, remains uncertain. Chevron continues to believe that the Ecuadorian judgment is illegitimate and unenforceable and that it does not provide any basis upon which an estimate of a reasonably possible loss or range of loss can be made.

Note ~~13.~~12. Other Contingencies and Commitments

Income Taxes The company calculates its income tax expense and liabilities quarterly. These liabilities generally are subject to audit and are not finalized with the individual taxing authorities until several years after the end of the annual period for which income taxes have been calculated. Refer to Note 1110 beginning on page 1415 for a discussion of the periods for which tax returns have been audited for the company’s major tax jurisdictions.

Settlement of open tax years, as well as other tax issues in countries where the company conducts its businesses, are not expected to have a material effect on the consolidated financial position or liquidity of the

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company and, in the opinion of management, adequate provision has been made for income taxes for all years under examination or subject to future examination.

Guarantees The company and its subsidiaries have certain contingent liabilities with respect to guarantees, direct or indirect, of debt of affiliated companies or third parties. Under the terms of the guarantee arrangements, the company would generally be required to perform should the affiliated company or third party fail to fulfill its obligations under the arrangements. In some cases, the guarantee arrangements may have recourse provisions that would enable the company to recover any payments made under the terms of the guarantees from assets provided as collateral.

Indemnifications In the acquisition of Unocal, the company assumed certain indemnities relating to contingent environmental liabilities associated with assets that were sold in 1997. The acquirer of those assets shared in certain environmental remediation costs up to a maximum obligation of $200 million, which had been reached at December 31, 2009. Under the indemnification agreement, after reaching the $200 million obligation, Chevron is solely responsible until April 2022, when the indemnification expires. The environmental conditions or events that are subject to these indemnities must have arisen prior to the sale of the assets in 1997.

Although the company has provided for known obligations under this indemnity that are probable and reasonably estimable, the amount of additional future costs may be material to results of operations in the period in which they are recognized. The company does not expect these costs will have a material effect on its consolidated financial position or liquidity.

~~Off-Balance-Sheet~~Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements The company and its subsidiaries have certain contingent liabilities with respect to long-term unconditional purchase obligations and commitments, including throughput and take-or-pay agreements, some of which may relate to suppliers’ financing arrangements. The agreements typically provide goods and services, such as pipeline and storage capacity, utilities, and petroleum products, to be used or sold in the ordinary course of the company’s business.

Environmental The company is subject to loss contingencies pursuant to laws, regulations, private claims and legal proceedings related to environmental matters that are subject to legal settlements or that in the future may require the company to take action to correct or ameliorate the effects on the environment of prior release of chemicals or petroleum substances, including MTBE, by the company or other parties. Such contingencies may exist for various sites, including, but not limited to, U.S. federal Superfund sites and analogous sites under state laws, refineries, crude oil fields, service stations, terminals, land development areas, and mining activities, whether operating, closed or divested. These future costs are not fully determinable due to factors such as the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions that may be required, the determination of the company’s liability in proportion to other responsible parties, and the extent to which such costs are recoverable from third parties.

Although the company has provided for known environmental obligations that are probable and reasonably estimable, the amount of additional future costs may be material to results of operations in the period in which

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they are recognized. The company does not expect these costs will have a material effect on its consolidated financial position or liquidity. Also, the company does not believe its obligations to make such expenditures have had, or will have, any significant impact on the company’s competitive position relative to other U.S. or international petroleum or chemical companies.

Other Contingencies Governmental and other entities in ~~California and other~~various jurisdictions across the United States have filed legal proceedings against fossil fuel producing companies, including Chevron, purporting to seek legal and equitable relief to address alleged impacts of climate change. Further such proceedings are likely to be filed by other parties. The unprecedented legal theories set forth in these proceedings entail the possibility of damages liability and injunctions, including without limitation injunctions against the production of all fossil fuels, that, while we believe remote, could have a material adverse effect on the ~~Company’s~~company’s results of operations and financial condition. Management believes that these proceedings are legally and factually meritless and detract from constructive efforts to address the important policy issues presented by climate change, and will vigorously defend against such proceedings.

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Seven coastal parishes and the State of Louisiana have filed 43 separate lawsuits in Louisiana against numerous oil and gas companies seeking damages for coastal erosion in or near oil fields located within Louisiana’s coastal zone under Louisiana’s State and Local Coastal Resources Management Act (SLCRMA). Chevron entities are defendants in 39 of these cases. The lawsuits allege that the defendants’ historical operations were conducted without necessary permits or failed to comply with permits obtained and seek damages and other relief, including the costs of restoring coastal wetlands allegedly impacted by oil field operations. Plaintiffs’ SLCRMA theories are unprecedented; thus, there remains significant uncertainty about the scope of the claims and alleged damages and any potential effects on the company’s results of operations and financial condition. Management believes that the claims lack legal and factual merit and will continue to vigorously defend against such proceedings.

Chevron receives claims from and submits claims to customers; trading partners; joint venture partners; U.S. federal, state and local regulatory bodies; governments; contractors; insurers; suppliers; and individuals. The amounts of these claims, individually and in the aggregate, may be significant and take lengthy periods to resolve, and may result in gains or losses in future periods.

The company and its affiliates also continue to review and analyze their operations and may close, decommission, sell, exchange, acquire or restructure assets to achieve operational or strategic benefits and to improve competitiveness and profitability. These activities, individually or together, may result in significant gains or losses in future periods.

Note ~~14.~~13. Fair Value Measurements

The three levels of the fair value hierarchy of inputs the company uses to measure the fair value of an asset or liability are described as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. For the company, Level 1 inputs include exchange-traded futures contracts for which the parties are willing to transact at the exchange-quoted price and marketable securities that are actively traded.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly. For the company, Level 2 inputs include quoted prices for similar assets or liabilities, prices obtained through third-party broker quotes and prices that can be corroborated with other observable inputs for substantially the complete term of a contract.

Level 3: Unobservable inputs. The company does not use Level 3 inputs for any of its recurring fair value measurements. Level 3 inputs may be required for the determination of fair value associated with certain nonrecurring measurements of nonfinancial assets and liabilities.

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The fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, is as follows:

Assets and Liabilities Measured at Fair Value on a Recurring Basis

(Millions of dollars)


		At September 30, 2020								At December 31, 2019									At June 30, 2021								At December 31, 2020
		Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3			Total		Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3
Marketable Securities	Marketable Securities	$	28	$	28	$	0	$	0	$	63	$	63	$	0	$	0	Marketable Securities	$	34	$	34	$	0	$	0	$	31	$	31	$	0	$	0
Derivatives		104		55		49		0		11		1		10		0
Derivatives - not designated																		Derivatives - not designated	122		104		18		0		74		37		37		0
Total Assets at Fair Value	Total Assets at Fair Value	$	132	$	83	$	49	$	0	$	74	$	64	$	10	$	0	Total Assets at Fair Value	$	156	$	138	$	18	$	0	$	105	$	68	$	37	$	0
Derivatives		8		5		3		0		74		26		48		0
Derivatives - not designated																		Derivatives - not designated	229		57		172		0		173		58		115		0
Derivatives - designated																		Derivatives - designated	2		2		0		0		0		0		0		0
Total Liabilities at Fair Value	Total Liabilities at Fair Value	$	8	$	5	$	3	$	0	$	74	$	26	$	48	$	0	Total Liabilities at Fair Value	$	231	$	59	$	172	$	0	$	173	$	58	$	115	$	0

Marketable Securities The company calculates fair value for its marketable securities based on quoted market prices for identical assets. The fair values reflect the cash that would have been received if the instruments were sold at ~~September~~June 30, ~~2020.~~2021.

Derivatives The company records most of its derivative instruments — other than any commodity derivative contracts that are ~~designated~~accounted for as normal purchase and normal sale — on the Consolidated Balance Sheet at fair value, with the offsetting amount to the Consolidated Statement of Income. The company designates certain derivative instruments as cash flow hedges that, if applicable, are reflected in the table above. Derivatives classified as Level 1 include

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futures, swaps and options contracts traded in active markets such as the New York Mercantile Exchange. Derivatives classified as Level 2 include swaps, options and forward contracts principally with financial institutions and other oil and gas companies, the fair values of which are obtained from third-party broker quotes, industry pricing services and exchanges. The company obtains multiple sources of pricing information for the Level 2 instruments. Since this pricing information is generated from observable market data, it has historically been very consistent. The company does not materially adjust this information.

Assets and liabilities carried at fair value at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, are as follows:

Cash and Cash Equivalents The company holds cash equivalents in U.S. and non-U.S. portfolios. The instruments classified as cash equivalents are primarily bank time deposits with maturities of 90 days or less, and money market funds. “Cash and cash equivalents” had carrying/fair values of ~~$6.9~~$7.5 billion and ~~$5.7~~$5.6 billion at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, respectively. The fair values of cash and cash equivalents are classified as Level 1 and reflect the cash that would have been received if the instruments were settled at ~~September~~June 30, ~~2020.~~2021.

Restricted Cash had a carrying/fair value of ~~$925 million and~~ $1.2 billion and $1.1 billion at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. At ~~September~~June 30, ~~2020,~~2021, restricted cash is classified as Level 1 and includes restricted funds related to certain upstream decommissioning activities and other corporate and tax items, which are reported in “Prepaid expenses and other current assets” and “Deferred charges and other assets” on the Consolidated Balance Sheet.

Long-Term Debt had a net carrying value, excluding amounts reclassified from short-term debt, purchase price fair value adjustments and finance lease obligations, of ~~$24.2~~$27.7 billion and ~~$13.7~~$30.8 billion at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, respectively. The fair value of long-term debt for the company was ~~$25.7~~$30.4 billion and ~~$14.3~~$34.4 billion at ~~September~~June 30, ~~2020~~2021 and December 31, ~~2019,~~2020, respectively. Long-term debt primarily includes corporate issued bonds, classified as Level 1 and are ~~$24.6~~$29.3 billion for the period. The fair value of other long-term debt classified as Level 2 is $1.1 billion.

The carrying values of other short-term financial assets and liabilities on the Consolidated Balance Sheet approximate their fair values. Fair value remeasurements of other financial instruments at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, were not material.

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The fair value hierarchy for assets and liabilities measured at fair value on a nonrecurring basis at ~~September~~June 30, ~~2020,~~2021, is as follows:

Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis

(Millions of dollars)


		At September 30, 2020																		At June 30, 2021
										Before-Tax Loss																			Before - Tax Loss
										Three Months Ended				Nine Months Ended															Three Months Ended				Six Months Ended
		Total		Level 1		Level 2		Level 3								Total				Level 1			Level 2		Level 3
Properties, plant and equipment, net (held and used)	Properties, plant and equipment, net (held and used)	$	0	$	0	$	0	$	0			$	0				$	2,551				Properties, plant and equipment, net (held and used)	$	0	$	0	$	0			$	0			$	0	$	0
Properties, plant and equipment, net (held for sale)	Properties, plant and equipment, net (held for sale)	22		0		22		0		17				183					Properties, plant and equipment, net (held for sale)	0			0		0		0		0				0
Investments and advances	Investments and advances	0		0		0		0		0				2,550					Investments and advances	15			0		0		15		11				21
Total Assets at Fair Value	Total Assets at Fair Value	$	22	$	0	$	22	$	0	$	17			$	5,284				Total Assets at Fair Value	$	15		$	0	$	0	$	15	$	11			$	21

Properties, plant and equipment Through September 2020, the company reported impairments for certain upstream properties primarily due to downward revisions to its oil and gas price outlook. The impact of these impairments is included in “Depreciation, depletion, and amortization” on the Consolidated Statement of Income. The company did not have any ~~individually material~~ impairments of long-lived assets measured at fair value on a nonrecurring basis to ~~report in third quarter 2020.~~report.

Investments and advances Through September 2020, the company fully impaired its investments in the Petropiar and Petroboscan affiliates in Venezuela. The impact of these impairments is included in “Income (loss) from equity affiliates” on the Consolidated Statement of Income. The company did not have any

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material impairments of investments and advances measured at fair value on a nonrecurring basis to report in ~~third~~second quarter ~~2020.~~2021. At June 30, 2021, the company had assets measured at fair value Level 3 using unobservable inputs of $15 million.

Note ~~15.~~14. Financial and Derivative Instruments

The company’s commodity derivative instruments principally include crude oil, natural gas and refined product futures, swaps, options and forward contracts. ~~None~~The company applies cash flow hedge accounting to certain commodity transactions, where appropriate, to manage the market price risk associated with forecasted sales of ~~the company’s derivative instruments are designated as hedging instruments, although certain of the company’s affiliates make such a designation.~~crude oil. The company’s derivatives are not material to the company’s consolidated financial position, results of operations or liquidity. The company believes it has no material market or credit risks to its operations, financial position or liquidity as a result of its commodities and other derivatives activities.

The company uses commodity derivative ~~commodity~~ instruments traded on the New York Mercantile Exchange and on electronic platforms of the Inter-Continental Exchange and Chicago Mercantile Exchange. In addition, the company enters into swap contracts and option contracts principally with major financial institutions and other oil and gas companies in the “over-the-counter” markets, which are governed by International Swaps and Derivatives Association agreements and other master netting arrangements.

Derivative instruments measured at fair value at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows:

Consolidated Balance Sheet: Fair Value of Derivatives Not Designated as Hedging Instruments
(Millions of dollars)
Type of
Contract Balance Sheet Classification At September 30,
2020 At December 31,
2019
Commodity Accounts and notes receivable, net $ 90 $ 11
Commodity Long-term receivables, net 14 0
Total Assets at Fair Value $ 104 $ 11
Commodity Accounts payable $ 3 $ 74
Commodity Deferred credits and other noncurrent obligations 5 0
Total Liabilities at Fair Value $ 8 $ 74


Consolidated Statement of Income: The Effect of Derivatives Not Designated as Hedging Instruments (Millions of dollars)
Type of			Gain / (Loss) Three Months Ended September 30				Gain / (Loss) Nine Months Ended September 30
Contract		Statement of Income Classification	2020		2019		2020		2019
Consolidated Balance Sheet: Fair Value of Derivatives (Millions of dollars)											Consolidated Balance Sheet: Fair Value of Derivatives (Millions of dollars)
Type of Contract											Type of Contract	Balance Sheet Classification	At June 30, 2021		At December 31, 2020
Commodity	Commodity	Sales and other operating revenues	$	38	$	55	$	283	$	(189)	Commodity	Accounts and notes receivable, net	$	103	$	73
Commodity	Commodity	Purchased crude oil and products	(7)		(7)		(31)		(16)		Commodity	Long-term receivables, net	19		1
Total Assets at Fair Value											Total Assets at Fair Value		$	122	$	74
Commodity	Commodity	Other income	6		0		3		(3)		Commodity	Accounts payable	$	221	$	172
			$	37	$	48	$	255	$	(208)
Commodity											Commodity	Deferred credits and other noncurrent obligations	10		1
Total Liabilities at Fair Value											Total Liabilities at Fair Value		$	231	$	173

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS —- (Continued)


Consolidated Statement of Income: The Effect of Derivatives (Millions of dollars)
Type of		Gain / (Loss) Three Months Ended June 30				Gain / (Loss) Six Months Ended June 30
Contract	Statement of Income Classification	2021		2020		2021		2020
Commodity	Sales and other operating revenues	$	(268)	$	(216)	$	(542)	$	245
Commodity	Purchased crude oil and products	(21)		(20)		(24)		(24)
Commodity	Other income	4		(3)		(35)		(3)
		$	(285)	$	(239)	$	(601)	$	218

At June 30, 2021, deferred losses in Accumulated Other Comprehensive Losses related to outstanding crude oil price hedging contracts were $2 million, of which all is expected to be reclassified into earnings during the next 12 months as the hedged crude oil sales are recognized in earnings.

The table below represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated Balance Sheet at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019.~~2020.

Consolidated Balance Sheet: The Effect of Netting Derivative Assets and Liabilities
(Millions of dollars)
Gross Amount Recognized Gross Amounts Offset Net Amounts Presented Gross Amounts Not Offset Net Amount
At September 30, 2020
Derivative Assets $ 1,044 $ 940 $ 104 $ 0 $ 104
Derivative Liabilities $ 948 $ 940 $ 8 $ 0 $ 8
At December 31, 2019
Derivative Assets $ 656 $ 645 $ 11 $ 0 $ 11
Derivative Liabilities $ 719 $ 645 $ 74 $ 0 $ 74


Consolidated Balance Sheet: The Effect of Netting Derivative Assets and Liabilities (Millions of dollars)
	Gross Amount Recognized		Gross Amounts Offset		Net Amounts Presented		Gross Amounts Not Offset		Net Amount
At June 30, 2021
Derivative Assets - not designated	$	1,761	$	1,639	$	122	$	0	$	122
Derivative Liabilities - not designated	$	1,869	$	1,639	$	230	$	1	$	229
Derivative Liabilities - designated	$	2	$	0	$	2	$	0	$	2
At December 31, 2020
Derivative Assets - not designated	$	818	$	744	$	74	$	0	$	74
Derivative Liabilities - not designated	$	917	$	744	$	173	$	0	$	173

Derivative assets and liabilities are classified on the Consolidated Balance Sheet as accounts and notes receivable, long-term receivables, accounts payable, and deferred credits and other noncurrent obligations. Amounts not offset on the Consolidated Balance Sheet represent positions that do not meet all the conditions for “a right of offset.”

Note ~~16.~~15. Revenue

“Sales and other operating revenue” on the Consolidated Statement of Income primarily arise from contracts with customers. Related receivables are included in “Accounts and notes receivable, net” on the Consolidated Balance Sheet, net of the current expected credit losses. The net balance of these receivables was ~~$6.3~~$10.9 billion and ~~$9.2~~$7.6 billion at ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019,~~2020, respectively. Other items included in “Accounts and notes receivable, net” represent amounts due from partners for their share of joint venture operating and project costs and amounts due from others, primarily related to derivatives, leases, buy/sell arrangements and product exchanges, which are accounted for outside the scope of ASC 606.

Note ~~17.~~16. Financial Instruments - Credit Losses

~~Chevron adopted Accounting Standards Update~~ ~~(ASU) 2016-13~~, ~~Financial Instruments - Credit Losses,~~ and its related amendments at the effective date of January 1, 2020. The standard replaces the “incurred loss model” and requires an estimate of expected credit losses, measured over the contractual life of a financial instrument, that considers forecast of future economic conditions in addition to information about past events and current conditions. The cumulative-effect adjustment to the opening retained earnings at January 1, 2020 was a reduction of $25 million, representing a decrease to the net accounts and notes receivable balances shown on the company’s consolidated balance sheet on page 5. Chevron’s expected credit loss allowance balance was ~~$666~~$699 million as of ~~September~~June 30, ~~2020~~2021 and ~~$849~~$671 million as of December 31, ~~2019,~~2020, with a majority of the allowance relating to non-trade receivable balances. A reduction in the allowance for non-trade receivables of $550 million was recorded in the second quarter as an agreement was reached with a government joint venture partner that resulted in the write-off of the associated receivable balances. Additionally, new allowances of $265 million were recorded in the second and third quarters associated with other than trade receivables.

The majority of the company’s receivable balance is concentrated in trade receivables, with a balance of ~~$8.1~~$13.9 billion as of ~~September~~June 30, ~~2020,~~2021, which reflects the company’s diversified sources of revenues and is dispersed across the company’s broad worldwide customer base. As a result, the company believes the concentration of credit risk is limited. The company routinely assesses the financial strength of its customers. When the financial strength of a customer is not considered sufficient, alternative risk mitigation measures may be deployed, including requiring pre-payments, letters of credit or other acceptable forms of collateral. Once credit is extended and a receivable balance exists, the company applies a quantitative calculation to current trade receivable balances that reflects credit risk predictive analysis, including probability of default

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

and loss given default, which takes into consideration current and forward-looking market data as well as the company’s historical loss data. This statistical approach becomes the basis of the company’s expected credit loss allowance for current trade receivables with payment terms that are typically short-term in nature, with

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~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

most due in less than 90 days. The company continues to monitor credit risk in response to the COVID-19 pandemic and the significant reduction in crude prices resulting from decreased demand associated with government-mandated travel restrictions.

Chevron's non-trade receivable balance was $3.1 billion as of ~~September~~June 30, ~~2020,~~2021, which includes receivables from certain governments in their capacity as joint venture partners. Joint venture partner balances that are paid as per contract terms or not yet due are subject to the statistical analysis described above while past due balances are subject to additional qualitative management quarterly review. This management review includes review of reasonable and supportable repayment forecasts. Non-trade receivables also include employee and tax receivables that are deemed immaterial and low risk.

Equity affiliate loans are also considered non-trade and ~~during the second quarter 2020 review, a~~associated allowances of $560 million ~~allowance was recognized~~are included within ~~“Investments~~Investments and ~~advances”~~Advances on the Consolidated Balance Sheet.

~~Note 18. Accounting for Suspended Exploratory Wells~~

The capitalized cost of suspended wells at September 30, 2020, was $2.5 billion, a net decrease of $574 million from year-end 2019. The decrease was primarily due to well write-offs recorded in second quarter 2020. During the nine months ended September 30, 2020, $496 million of exploratory well costs previously capitalized for greater than one year at December 31, 2019, were charged to expense.

~~Note 19. Long-Term Debt~~

The company issued $8 billion and an additional $4 billion in aggregate principal amount of floating and fixed rate notes in May 2020 and August 2020, respectively, as detailed in the table below. In the first nine months of 2020, the company repaid $3.9 billion of bonds at maturity.

~~May 2020 issuance:~~

Principal
(Millions of dollars)

~~Floating rate notes due 2023~~

~~300~~

~~1.141% notes due 2023~~

~~1,200~~

~~1.554% notes due 2025~~

~~2,500~~

~~1.995% notes due 2027~~

~~1,000~~

~~2.236% notes due 2030~~

~~1,500~~

~~2.978% notes due 2040~~

~~500~~

~~3.078% notes due 2050~~

~~1,000~~

~~Total Long-Term Debt Issued in May 2020~~

~~8,000~~

~~August 2020 issuance:~~

Principal
(Millions of dollars)

~~Floating rate notes due 2022~~

~~350~~

~~0.333% notes due 2022~~

~~400~~

~~Floating rate notes due 2023~~

~~500~~

~~0.426% notes due 2023~~

~~500~~

~~0.687% notes due 2025~~

~~750~~

~~1.018% notes due 2027~~

~~750~~

~~2.343% notes due 2050~~

~~750~~

~~Total Long-Term Debt Issued in August 2020~~

~~4,000~~

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~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)~~

Note ~~20.~~17. Restructuring and Reorganization Costs

In third quarter 2020, the company recorded adjustments and additional charges for employee reduction programs related to enterprise-wide restructuring, which are expected to be substantially completed by the end of 2021. The following table summarizes the accrued severance liability, which is classified as current on the Consolidated Balance Sheet.


	Amounts Before Tax
	(Millions of dollars)
Balance at January 1, ~~2020~~2021	$	7470
Accruals/Adjustments	~~1,018~~6
Payments	~~(133)~~(334)
Balance at ~~September~~June 30, ~~2020~~2021	$	~~892~~142

~~Note 21. Acquisition of Noble Energy, Inc.~~

On October 5, 2020, the company acquired Noble Energy, Inc. (Noble), an independent oil and gas exploration and production company. Noble’s principal upstream operations are in North America, the Eastern Mediterranean and West Africa. Noble’s operations also include an integrated midstream business in North America.

The aggregate purchase price of Noble was $4.1 billion, with approximately 58 million shares of Chevron common stock issued as consideration in the transaction. As part of the transaction, the company assumed debt with a book value of $7.7 billion. The shares represented approximately 3 percent of shares of Chevron common stock outstanding immediately after the transaction closed on October 5, 2020.

The acquisition will be accounted for as a business combination under ASC 805, which requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. Provisional fair value measurement will be made in the fourth quarter 2020 for acquired assets and assumed liabilities, and adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date as information necessary to complete the analysis is obtained.

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Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

~~Third~~Second Quarter ~~2020~~2021 Compared with ~~Third~~Second Quarter ~~2019~~2020

And ~~Nine~~Six Months ~~2020~~2021 Compared with ~~Nine~~Six Months ~~2019~~2020

Key Financial Results

																			Earnings by Business Segment
		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
		(Millions of dollars)				(Millions of dollars)					(Millions of dollars)				(Millions of dollars)
Upstream	Upstream									Upstream
United States	United States	$	116	$	727	$	(1,709)	$	2,371	United States	$	1,446	$	(2,066)	$	2,387	$	(1,825)
International	International	119		1,977		(1,225)		6,939		International	1,732		(4,023)		3,141		(1,344)
Total Upstream	Total Upstream	235		2,704		(2,934)		9,310		Total Upstream	3,178		(6,089)		5,528		(3,169)
Downstream	Downstream									Downstream
United States	United States	141		389		(397)		1,071		United States	776		(988)		646		(538)
International	International	151		439		782		738		International	63		(22)		198		631
Total Downstream	Total Downstream	292		828		385		1,809		Total Downstream	839		(1,010)		844		93
Total Segment Earnings	Total Segment Earnings	527		3,532		(2,549)		11,119		Total Segment Earnings	4,017		(7,099)		6,372		(3,076)
All Other	All Other	(734)		(952)		(2,329)		(1,585)		All Other	(935)		(1,171)		(1,913)		(1,595)
Net Income (Loss) Attributable to Chevron Corporation (1) (2)	Net Income (Loss) Attributable to Chevron Corporation (1) (2)	$	(207)	$	2,580	$	(4,878)	$	9,534	Net Income (Loss) Attributable to Chevron Corporation (1) (2)	$	3,082	$	(8,270)	$	4,459	$	(4,671)
__________________________________________

(1) Includes foreign currency effects.	(1) Includes foreign currency effects.	$	(188)	$	74	$	(111)	$	(48)	(1) Includes foreign currency effects.	$	43	$	(437)	$	41	$	77
(2) Income (loss) net of tax; also referred to as “earnings” in the discussions that follow.	(2) Income (loss) net of tax; also referred to as “earnings” in the discussions that follow.									(2) Income (loss) net of tax; also referred to as “earnings” in the discussions that follow.

Net ~~loss~~income attributable to Chevron Corporation for ~~third~~second quarter ~~2020~~2021 was ~~$207 million~~$3.08 billion ($~~(0.12)~~1.60 per share — diluted), compared with ~~earnings~~a loss of ~~$2.58~~$8.27 billion ($~~1.36~~(4.44) per share — diluted) in the corresponding ~~2019~~2020 period. The net ~~loss~~income attributable to Chevron Corporation for the first ~~nine~~six months of ~~2020~~2021 was ~~$4.88~~$4.46 billion ($~~(2.63)~~2.32 per share — diluted), compared with ~~earnings~~a loss of ~~$9.53~~$4.67 billion ($~~5.02~~(2.51) per share — diluted) in the first ~~nine~~six months of ~~2019.~~2020.

Upstream reported earnings of ~~$235 million~~$3.18 billion in ~~third~~second quarter ~~2020~~2021 compared with ~~$2.70~~a loss of $6.09 billion in the corresponding ~~2019~~2020 period. ~~The decrease was driven by lower crude oil and natural gas realizations and lower crude oil and natural gas volumes. Upstream reported~~Earnings for the first six months of 2021 were $5.53 billion compared with a loss of ~~$2.93 billion for the first nine months of 2020 compared with earnings of $9.31~~$3.17 billion a year earlier. The ~~decrease~~increase for both periods was ~~driven by lower~~primarily due to the absence of second quarter 2020 impairments, write-offs, severance accruals and higher current quarter crude oil realizations, partially offset by the absence of 2020 asset sale gains and ~~natural gas realizations, and charges for impairments and write-offs.~~favorable tax items.

Downstream reported earnings of ~~$292~~$839 million in ~~third~~second quarter ~~2020~~2021 compared with ~~$828 million~~a loss of $1.01 billion in the corresponding ~~2019 period. The decrease was~~2020 period primarily due to ~~lower~~higher margins on refined product sales, and lower sales volumes, partially offset by lower operating expenses. Earnings for the first nine months of 2020 were $385 million compared with $1.81 billion in the corresponding 2019 period. The decrease was primarily due to lower sales volumes, lower margins on refined product sales and lowerhigher equity earnings from 50 percent-owned Chevron Phillips Chemical Company LLC (CPChem)., and higher sales volumes. Earnings for the first six months of 2021 were $844 million compared with $93 million in the corresponding 2020 period. The increase was primarily due to higher equity earnings from 50 percent-owned CPChem, higher sales volumes and lower operating expenses, partially offset by lower margins on refined product sales.

Refer to pages 3028 through 3230 for additional discussion of results by business segment and “All Other” activities for ~~third~~the second quarter and first ~~nine~~six months ~~2020~~2021 versus the same periods in ~~2019.~~2020.

Business Environment and Outlook

Chevron Corporation* is a global energy company with substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, ~~Colombia,~~Egypt, Equatorial Guinea, Indonesia, Israel, Kazakhstan, Kurdistan Region of Iraq, Myanmar, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Republic of Congo, Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.

_____________________

* Incorporated in Delaware in 1926 as Standard Oil Company of California, the company adopted the name Chevron Corporation in 1984 and ChevronTexaco Corporation in 2001. In 2005, ChevronTexaco Corporation changed its name to Chevron Corporation. As used in this report, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and "its" may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole, but unless stated otherwise they do not include “affiliates” of Chevron — i.e., those companies generally owned 50 percent or less. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.

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The company’s objective is to deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company’s control. In the company’s downstream business, crude oil is the largest cost component of refined products. ~~It is the company’s objective to deliver competitive results and stockholder value in any business environment.~~ Periods of sustained lower prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital and exploratory expenditures, along with other measures intended to improve financial performance. ~~Similarly, impairments or write-offs have occurred,~~

With ongoing global interest in addressing the risks of climate change, support for policies and ~~may occur~~advancements in lower carbon technologies is expected. In seeking to help advance a lower carbon future, Chevron is focused on lowering its carbon intensity cost efficiently, increasing renewables and offsets in support of its business, and investing in low-carbon technologies to enable commercial solutions. In March 2021, the ~~future,~~company announced its 2028 Upstream production greenhouse gas (GHG) intensity targets and its anticipated spending in advancing its energy transition strategy, as ~~a result of managerial decisions not to progress certain projects~~disclosed in the company’s ~~portfolio.~~Form 10-Q for the quarter ended March 31, 2021.

Response to Market Conditions and COVID-19 The outbreak of COVID-19 caused a significant decrease in demand for our products and created disruptions and volatility in the global marketplace beginning late in the first quarter 2020. Though these conditions have improved in 2021, they continue to negatively affect our results of operations and cash flows. While demand and commodity prices have largely recovered, demand is still not back to pre-pandemic levels, and financial results could continue to be challenged in future quarters.

During the ~~third~~second quarter of ~~2020,~~2021, the availability of vaccines around the world improved and business activity increased. Nevertheless, some countries face a resurgence of the virus and its variants that could impact logistics and materials movement and pose a risk to our business. We continue to take precautionary measures to reduce the risk of exposure to and spread of the COVID-19 virus in our operations through screening, testing and, when appropriate, quarantining personnel upon arrival to our operated facilities.

Despite the challenges posed by the pandemic, progress continues on the Future Growth Project / Wellhead Pressure Management Project (FGP/WPMP) at TCO. Since April 2021, the project construction workforce at FGP/WPMP has continued to remobilize, and approximately 42,000 first vaccine doses have been administered and about 30,000 TCO personnel are fully vaccinated as part of the Republic of Kazakhstan's national vaccination program. Extended rotations, COVID-19 testing and isolation protocols are in place to minimize the spread of the virus.

TCO recently reviewed the schedule and cost estimates for FGP/WPMP. Due to the impact of the pandemic, expected first oil dates are now mid-2023 for WPMP and late 2023 to mid-2024 for FGP. The cost target remains $45.2 billion, as cost reduction efforts as well as favorable exchange rates offset an estimated $1.9 billion of incremental costs associated with COVID-19. The contingency amount for the project spend has increased from $1.3 billion to $1.9 billion to recognize the schedule uncertainty associated with the virus and its variants.

In 2021, Organization of Petroleum Exporting Countries (OPEC) and coordinating countries’ (OPEC+) continued to curtail production. However, such curtailments were not material in the second quarter.

Demand for refined products, primarily jet fuel, has continued to be below pre-COVID-19 levels as a result of travel restrictions and other constraints on economic activity ~~continued~~implemented in many ~~locations around the world~~countries to ~~limit~~combat the spread of COVID-19. Chevron continued to take steps to maximize diesel and motor gasoline production, given the ~~COVID-19 virus. Lower commodity prices negatively impacted~~decline in jet fuel demand, to align with the pace of global recovery. Chevron’s total refined product sales were up approximately 26 percent year-over-year in the second quarter 2021, but were down approximately 4 percent from the same period in 2019, primarily due to jet fuel sales. Refining crude utilization was approximately 85 percent in the second quarter 2021.

Refer to the “Cautionary Statements Relevant to Forward-Looking Information” on page 2 and to “Risk Factors” on pages 18 through 23 of the company’s ~~third quarter~~ 2020 ~~financial and operating results. While demand and commodity prices have shown signs~~Annual Report on Form 10-K for a discussion of recovery, they are not back to pre-pandemic levels, and financial results will likely continue to be challenged in future quarters. Due to the rapidly changing environment, there continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic will impact our results, which could be material.

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~~Chevron entered this crisis well positioned with a strong balance sheet, flexible capital program and low cash flow breakeven price. To protect its long-term health and value,~~

some of the company is responding to these market conditions by adjusting items it can control. The company has lowered planned 2020 capital expenditures by up to 30 percent from its original budget to $14 billion and is on track to lower 2020 operating costs by $1 billion compared to 2019. The company is undertaking an enterprise-wide transformationinherent risks that ~~includes~~could materially impact the ~~capture~~company’s results of cost efficiencies. As part of this restructuring, employee reduction programs were announced. Additionally, the company suspended its share repurchase program in March 2020. Taken together, these actions are consistent with ouroperations or financial priorities: to protect the dividend, to prioritize capital spend that drives long-term value and to maintain a strong balance sheet. The company expects to continue to have sufficient liquidity and access to both commercial paper and debt capital markets due to its strong balance sheet and investment grade credit ratings. Additionally, the company has access to nearly $10 billion in committed credit facilities.condition.

The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both by the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Additional information related to the company’s effective income tax rate is included in Note 1110 to the Consolidated Financial Statements.

Refer to the “Cautionary Statement Relevant to Forward-Looking Information” on page 2 of this report and to “Risk Factors” on pages 18 through 21 of the company’s 2019 Annual Report on Form 10-K and on pages 41 to 42 of this report for a discussion of some of the inherent risks that could materially impact the company’s results of operations or financial condition.

The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value orand to acquire assets or operations complementary to its asset base to help augment the company’s financial performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future periods. ~~The company’s asset sale program for 2018 through 2020 is targeting before-tax proceeds of $5-10 billion. Proceeds related to asset sales were $6.7 billion from January 2018 through September 2020.~~

The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the company of movements in prices for crude oil and natural gas. Management takes these developments into account in the conduct of daily operations and for business planning.

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~~Management’s commentary~~Comments related to earnings trends for the company’s major business areas isare as follows:

Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil and natural gas. Crude oil and natural gas prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by ~~the Organization of Petroleum Exporting Countries (OPEC) or other producers,~~OPEC+ countries, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company’s control such as the COVID-19 pandemic, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of these factors could also inhibit the company’s production capacity in an affected region. The company closely monitors developments in the countries in which it operates and holds investments, and seeks to manage risks in operating its facilities and businesses.

The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company’s ability to find or acquire and efficiently produce crude oil and natural gas, changes in fiscal terms of contracts, and changes in tax, environmental and other applicable laws and regulations.

The company is actively managing its schedule of work, contracting, procurement, and supply chain activities to effectively manage costs and ensure supply chain resiliency and continuity ~~and~~in support of operational goals. Third party costs for capital, exploration, and operating expenses ~~associated with ongoing operations~~ can be subject to external factors beyond the company’s control including, but not limited to: the general level of inflation, tariffs or other taxes imposed on goods or services, and market based prices charged by the industry’s material and service providers. Chevron utilizes contracts with various pricing mechanisms, so there may be a lag before the company’s costs reflect the changes in market trends.

The spot markets for ~~many~~some commodities and raw materials ~~and services~~ have ~~fallen in response~~risen dramatically over the last six to ~~the broader economic impact~~nine months. A significant factor behind this trend may have been expectations ahead of the ~~COVID-19 pandemic. While crude~~actual demand from the economic recovery. Whether these input price increases are transitory or represent a new normal that will impact costs is critical to setting expectations for inflation. To date, the company has been shielded from these inflationary pressures by utilizing price mechanisms that alleviate impacts from some of this type of market volatility. As U.S. and international drilling activity continues to accelerate, continued upward market pressure is expected for oil and ~~natural~~ gas ~~prices have risen from the lows~~industry inputs (such as rigs, well services, etc.) Cost increases are likely to be correlated with rising rig counts by region. The pace of the ~~early pandemic,~~economic recovery and shifting spending ~~in the energy sector is limited. If future commodity prices remain below break-even levels,~~patterns may lead to more ~~highly-leveraged producers may be forced to file~~cross-industry competition for ~~bankruptcy protection (Chapter 11 re-organization or even Chapter 7 insolvency proceedings under the U.S. Bankruptcy Code),~~resources, which could ~~further stress suppliers. The extent to which~~impact the ~~costs~~cost of certain non-oil and gas industry goods and services could go down may be constrained by low supply sector margins, decisions by suppliers to reduce capacity, and actions by banks and other financial institutions. Chevron is actively monitoring and engaging key suppliers to mitigate any potential business impacts.services.

Capital and exploratory expenditures and operating expenses could also be affected by damage to production facilities caused by severe weather or civil unrest, delays in construction, or other factors.

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The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil, and U.S. Henry Hub natural gas. The Brent price averaged ~~$64~~$42 per barrel for the full-year ~~2019.~~2020. During the ~~third~~second quarter ~~2020,~~2021, Brent averaged ~~$43~~$69 per barrel and ended ~~October~~July at about ~~$36.~~$76. The WTI price averaged ~~$57~~$39 per barrel for the full-year ~~2019.~~2020. During the ~~third~~second quarter ~~2020,~~2021, WTI averaged ~~$41~~$66 per barrel

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and ended ~~October~~July at about ~~$36.~~$74. The majority of the company’s equity crude production is priced based on the Brent benchmark. Crude prices have increased in the second quarter of 2021 driven by production curtailment by OPEC+ countries and steadily increasing demand for transportation fuels. (See page 3634 for the company’s average U.S. and international crude oil sales ~~prices.)~~

~~Crude prices sharply declined at~~prices). However, in the ~~end of the first quarter due~~July 2021 meeting, OPEC+ agreed to surplus supply as demand decreased due to government-imposed travel restrictions and other constraints on economic activity. In the second and third quarters the supply/demand balance improved primarily due toan increase in production ~~cuts and demand growth, increasing~~quotas, which may result in lower crude oil prices.

In contrast to price movements in the global market for crude oil, price changes for natural gas are more closely aligned with seasonal ~~supply-and-demand~~supply/demand and infrastructure conditions in local markets. In the United States, prices at Henry Hub averaged ~~$1.82~~$3.16 per thousand cubic feet (MCF) for the first ~~nine~~six months of ~~2020,~~2021, compared with ~~$2.59~~$1.88 during the first ~~nine~~six months of ~~2019.~~2020. At the end of ~~October 2020,~~July 2021, the Henry Hub spot price was ~~$3.00~~$4.03 per MCF.

Outside the United States, price changes for natural gas depend on a wide range of supply, demand and regulatory circumstances. Chevron sells natural gas into the domestic pipeline market in most locations. In some locations, Chevron has invested in long-term projects to produce and liquefy natural gas for transport by tanker to other markets. The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG ~~projects~~assets is committed under binding long-term contracts, with the remainder to be sold in the Asian spot LNG market. ~~The Asian spot market reflects the supply and demand for LNG in the Pacific Basin and is not directly linked to crude oil prices.~~ International natural gas ~~sales~~ realizations averaged ~~$4.71~~$4.82 per MCF during the first ~~nine~~six months of ~~2020,~~2021, compared with ~~$5.87~~$5.11 per MCF in the same period last year. (See page 3634 for the company’s average natural gas sales prices for the U.S. and international regions.)

The company’s worldwide net oil-equivalent production in the first ~~nine~~six months of ~~2020~~2021 averaged ~~3.018~~3.124 million barrels per day, ~~1 percent lower than the year-ago period.~~essentially unchanged from first six months of 2020. About 1427 percent of the company’s net oil-equivalent production in the first ~~nine~~six months of ~~2020~~2021 occurred in ~~the OPEC-member~~OPEC+ member countries of Angola, Equatorial Guinea, Kazakhstan, Nigeria, ~~Republic of Congo and Venezuela.OPEC quotas did not materially reduce the company’s net crude oil production in third quarter 2020. OPEC quotas had no effect on the company’s net crude oil production for third quarter 2019.~~

The company expects 2020 production to be relatively flat compared to 2019. This estimate is subject to many factors and uncertainties, including quotas or other actions that may be imposed by OPEC members and other countries; price effects on entitlement volumes; changes in fiscal terms or restrictions on the scope of company operations; delays in construction; reservoir performance; greater-than-expected declines in production from mature fields; start-up or ramp-up of projects; fluctuations in demand for natural gas in various markets; weather conditions that may shut in production; civil unrest; changing geopolitics; delays in completion of maintenance turnarounds; storage constraints or economic conditions that could lead to shut-in production; or other disruptions to operations. The outlook for future production levels is also affected by the size and number of economic investment opportunities and the time lag between initial exploration and the beginning of production. The company has increased its investment emphasis on short-cycle projects, but these too are under pressure in the current market environment.

In the Partitioned Zone between Saudi Arabia and Kuwait ~~production was shut-in beginning in May 2015. In December 2019, the governments~~and Republic of Saudi Arabia and Kuwait signed a memorandum of understanding to allow production to restart in the Partitioned Zone. In mid-February 2020, pre-startup activities commenced, and production resumed in July 2020. The financial effects from the loss of production in 2019 and first half 2020 were not significant. During the third quarter 2020, oil equivalent production in the Partitioned Zone averaged 29 thousand barrels per day.

Chevron has interests in Venezuelan crude oil production assets, including those operated by independent equity affiliates. While the operating environment in Venezuela has been deteriorating for some time, the equity affiliates have conducted activities consistent with the authorization provided pursuant to general licenses issued by the United States government. During the second quarter 2020, the company completed its evaluation of the carrying value of its Venezuelan investments in line with its accounting policies and concluded that given the current operating environment and overall outlook, which created significant

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uncertainties regarding the recovery of the company’s investment, an other than temporary loss of value had occurred, which resulted in a full impairment of its investment in the country totaling $2.6 billion. As a result, the company also removed approximately 160 million barrels of proved reserves and stopped reporting production in the country effective July 2020. The company remains committed to its people, assets and operations in Venezuela.

~~Response to Market Conditions and COVID-19: Upstream~~In the third quarter 2020, travel restrictions and other constraints on economic activity aimed at combating the spread of COVID-19 continued, which caused demand for oil and gas to remain low. This has resulted in lower price realizations across all commodities. While critical asset integrity and reliability activities continue, deferral of non-essential work and demobilization of non-essential personnel have continued in locations with high infection rates to reduce the COVID-19 exposure risk to our workforce.

Despite the challenges posed by the pandemic, progress continues on the future growth wellhead pressure management project (FGP-WPMP) at Tengiz. To mitigate the risk from the pandemic, in the second quarter the project construction workforce was demobilized to 20 percent of planned levels, which slowed the overall construction pace. Extended rotations, testing and isolation protocols remain in place for personnel arriving and departing from the site to minimize the spread of the virus. Infection levels in Kazakhstan improved in the third quarter, allowing remobilization of the FGP-WPMP construction workforce to commence. Given the uncertainty of timing for safely completing remobilization and sustained activity levels, it is too early to provide meaningful information regarding impacts on project costs and schedule.

Facility maintenance turnarounds are being adjusted and, in certain cases, deferred to later in 2020 or into 2021. In some cases, turnarounds have been extended in duration and/or reduced in scope as a result of the virus. As a result of the reduction in capital expenditures, new production is expected to be significantly lower in future periods as drilling and completion activities are scaled back, most notably in the Permian Basin, Gulf of Mexico, and Argentina. Exploration activities and projects not yet in execution phase have been deferred, which may impact production in future years.

Production levels have been curtailed largely as a result of reductions imposed by OPEC+ nations in Kazakhstan, Nigeria and Angola. Additionally, although minor, reductions have been implemented by operators of assets where the company has non-operated interests or where production has been curtailed due to market conditions, most notably in Thailand. Production curtailments of approximately 154 thousand barrels of oil equivalent per day were recorded in the third quarter. In the fourth quarter, we expect curtailments to be approximately 100 thousand barrels of oil equivalent per day.

Decreased capital expenditures for 2020 will result in reductions to Chevron’s proved reserve quantities and delays in timing of additional proved reserves being recognized. The company currently estimates the lower planned capital spend will result in an approximately 10 percent downward revision to proved reserves quantities, primarily in the Permian Basin and Australia. As low commodity prices have persisted, it is expected that proved reserve quantities will decrease for oil and gas properties where economic limits are negatively impacted. Lower prices will positively impact proved reserves due to entitlement effects in production sharing contracts and variable royalty contracts. The impact of the reduction in capital expenditures, changes in commodity prices, and their combined effect on proved reserves will be assessed at the end of the year in line with Chevron’s annual reserves process.

Regulatory and in-country conditions, particularly as some countries face a resurgence of the virus, could impact logistics and material movement and remain a risk to business continuity. We are taking precautionary measures to reduce the risk of exposure to and spread of the COVID-19 virus through screening, testing and, when appropriate, quarantining workforce and visitors upon arrival to our operated facilities.Congo.

Refer to the “Results of Operations” section on ~~pages 30 and 31~~page 28 for additional discussion of the company’s upstream business.

Downstream Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and marketing of products that include gasoline, diesel, jet fuel, lubricants, fuel oil, fuel and lubricant additives, and petrochemicals. Industry margins are sometimes volatile and can be affected by the global and

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regional supply-and-demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events.

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Other factors affecting profitability for downstream operations include the reliability and efficiency of the company’s refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the volatility of tanker-charter rates for the company’s shipping operations, which are driven by the industry’s demand for crude oil and product tankers. Other factors beyond the company’s control include the general level of inflation and energy costs to operate the company’s refining, marketing and petrochemical assets, and changes in tax, environmental, and other applicable laws and regulations.

The company’s most significant marketing areas are the West Coast and Gulf Coast of the United States and ~~Asia.~~Asia Pacific. Chevron operates or has significant ownership interests in refineries in each of these areas.

~~Response to Market Conditions and COVID-19: Downstream~~ Beginning in March and continuing into the fourth quarter 2020, demand for most of the company’s products (primarily jet fuel and motor gasoline) has been below prior year levels as a result of travel restrictions and other constraints on economic activity implemented in many countries to combat the spread of the COVID-19 virus. Product prices also fell sharply in the second quarter 2020, and although economic activity has somewhat rebounded from lows experienced in April, refining margins were at or near historic lows due to lower demand and pressure from a global oil product surplus for much of the third quarter. Chevron took steps to maximize diesel production, given the decline in jet fuel and motor gasoline demand, to fuel transportation that keeps global supply chains moving. The company is actively monitoring supply and demand dynamics as every region is experiencing different recovery trends. The company is adjusting the schedule for planned maintenance activity across its refining network and idling certain processing units to adjust for lower demand, reducing costs, managing inventories and, most importantly, protecting the safety of employees and contractors. To preserve cash and support balance sheet strength, the 2020 downstream organic capital spending program was reduced by approximately $800 million.

As of late October 2020, Chevron’s refining crude utilization was approximately 75 percent and sales were down year-over-year approximately 55 percent for jet fuel and less than 10 percent for motor gasoline, while diesel sales were relatively flat year-over-year. It is unclear how long these conditions will persist, but the company will continue to take actions necessary to protect the health and well-being of people, the environment and its operations as conditions evolve.

Refer to the “Results of Operations” section beginning on ~~pages 31 and 32~~page 29 for additional discussion of the company’s downstream operations.

All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.

Operating Developments

Noteworthy operating developments in recent months included the following:

•~~United States - Chevron’s joint venture, CalBioGas LLC, successfully achieved first renewable~~Australia – Sanctioned the $4 billion Jansz-Io compression project, which is expected to support an important source of clean-burning natural gas ~~production from dairy farms~~to customers in ~~California~~countries across the Asia-Pacific region.

•Brazil – Completed the sale of the company's 37.5 percent non-operated interest in the Papa-Terra oil field.

•South Korea – Chevron’s 50 percent owned affiliate, GS Caltex, started up an olefins mixed-feed cracker and ~~marketed it as an alternative fuel for heavy-duty trucks~~associated polyethylene unit at its Yeosu refinery ahead of schedule and ~~buses.~~under budget.

•United States ~~- Announced an investment~~– Entered front-end engineering and design (FEED) for the Ballymore project, which is being developed as a subsea tieback to the existing Blind Faith facility, in ~~Zap Energy Inc., a start-up company developing a next-generation modular nuclear reactor.~~the deepwater Gulf of Mexico.

•United States ~~- Completed the acquisition of Noble~~– Invested in several lower-carbon technologies, including Mainspring (lower-carbon generators for electric grids), Raygen (solar-hydro plant with storage), Boomitra (soil carbon offset platform) and Natel Energy ~~Inc. in October 2020.~~(hydro-power based technology).

•United States ~~- Announced~~– Acquired all of the ~~formation~~publicly held common units representing limited partner interests in ~~October 2020 of a joint venture with Brightmark LLC to produce~~Noble Midstream Partners LP not already owned by Chevron and ~~market dairy biomethane.~~its affiliates.

•United States ~~- Signed an agreement in October 2020~~– Began producing renewable diesel at the El Segundo, California refinery by co-processing bio-feedstock.

•United States – Announced establishment of its first branded Compressed Natural Gas (CNG) station, as part of its plan to sell ~~the Appalachia~~renewable natural gas ~~business.~~through more than 30 CNG stations in California by 2025.

•United States – Announced a memorandum of understanding with Cummins Inc., a global power and hydrogen technologies leader, to explore a strategic alliance to develop commercially viable business opportunities in hydrogen and other alternative energy sources.

•United States – Sanctioned the Whale project in the deepwater Gulf of Mexico.

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Results of Operations

Business Segments The following section presents the results of operations and variances on an after-tax basis for the company’s business segments — Upstream and Downstream — as well as for “All Other.” (Refer to Note 8,6, beginning on page 11, for a discussion of the company’s “reportable segments,” as defined under the accounting standards for segment reporting.)

Upstream

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
U.S. Upstream Earnings $ 116 $ 727 $ (1,709) $ 2,371


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
U.S. Upstream Earnings	$	1,446	$	(2,066)	$	2,387	$	(1,825)

U.S. upstream ~~operations~~ reported earnings of ~~$116 million~~$1.45 billion in ~~third~~second quarter ~~2020,~~2021, compared with ~~$727 million from a year earlier. The decrease was primarily due to lower crude oil realizations of $690 million.~~

~~U.S. upstream operations reported~~ a loss of ~~$1.71 billion for the first nine months of 2020, compared with earnings of $2.37~~$2.07 billion from a year earlier. The ~~decrease is~~increase was primarily due to ~~lower~~higher crude oil realizations of ~~$2.76~~$1.75 billion and the absence of second quarter 2020 impairments and write-offs of ~~$1.13 billion.~~$1.19 billion and severance accruals of $120 million. Higher crude oil production of $440 million also contributed to the improvement between periods.

U.S. upstream reported earnings of $2.39 billion for the first six months of 2021, compared with a loss of $1.83 billion from a year earlier. The increase was due to higher crude oil realizations of $2.17 billion, the absence of 2020 impairments and write-offs of $1.19 billion and higher crude oil production of $550 million.

The average realization per barrel for U.S. crude oil and natural gas liquids in ~~third~~second quarter ~~2020~~2021 was ~~$31~~$54, compared with ~~$47~~$19 a year earlier. The average realization per barrel for U.S. crude oil and natural gas liquids in the first ~~nine~~six months of ~~2020~~2021 was ~~$30,~~$51, compared with ~~$49~~$29 a year earlier. The average natural gas realization in ~~third~~second quarter ~~2020~~2021 was ~~$0.89~~$2.16 per thousand cubic feet, compared with ~~$0.95~~$0.81 in the ~~2019~~2020 period. The average natural gas realization in the first ~~nine~~six months of ~~2020~~2021 was ~~$0.77~~$2.16 per thousand cubic feet, compared with ~~$1.09~~$0.70 in the ~~2019~~comparable 2020 period.

Net oil-equivalent production of ~~982,000~~1.14 million barrels per day in ~~third~~second quarter ~~2020~~2021 was up ~~48,000~~145,000 barrels per day, or 515 percent, from a year earlier. ~~Production increases from shale~~The increase was due to an additional 227,000 barrels per day of production following the Noble Energy acquisition and ~~tight properties in the Permian Basin in Texas and New Mexico were~~lower production curtailments, partially offset by a 68,000 barrels per day decrease related to the Appalachian asset sale and lower production due to normal field ~~declines and planned maintenance in the Gulf of Mexico.~~declines. Net oil-equivalent production of ~~1.01~~1.11 million barrels per day in the first ~~nine~~six months of ~~2020~~2021 was up ~~106,000~~79,000 barrels per day, or 128 percent, from a year earlier. ~~Production increases from shale and tight properties in~~The increase was due to an additional 218,000 barrels per day of production following the ~~Permian Basin in Texas and New Mexico were~~Noble Energy acquisition, partially offset by a 68,000 barrels per day decrease related to the Appalachian asset sale and lower production due to normal field ~~declines and the effects of production curtailments due to market conditions.~~declines.

The net liquids component of oil-equivalent production of ~~731,000~~857,000 barrels per day in ~~third~~second quarter ~~2020~~2021 was up 115 percent from the corresponding ~~2019~~2020 period. The net liquids component of oil-equivalent production of ~~760,000~~829,000 barrels per day in the ~~2020 nine-month~~2021 six-month period was up 7 percent from the ~~2019~~2020 period. Net natural gas production ~~was 1.51~~increased 15 percent to 1.68 billion cubic feet per day in ~~third~~second quarter ~~2020, an increase of 21 percent~~2021 from the ~~2019~~2020 comparative period. Net natural gas production was ~~1.51~~1.66 billion cubic feet per day in the first ~~nine~~six months of ~~2020,~~2021, an increase of 2810 percent from the ~~2019~~2020 period.


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
		(Millions of dollars)									(Millions of dollars)
International Upstream Earnings*	International Upstream Earnings*	$	119	$	1,977	$	(1,225)	$	6,939	International Upstream Earnings*	$	1,732	$	(4,023)	$	3,141	$	(1,344)
_____________________________

* Includes foreign currency effects	* Includes foreign currency effects	$	(107)	$	49	$	99	$	(97)	* Includes foreign currency effects	$	78	$	(262)	$	26	$	206

International upstream ~~operations~~ reported earnings of ~~$119 million~~$1.73 billion in ~~third~~second quarter ~~2020,~~2021, compared with ~~earnings~~a loss of ~~$1.98~~$4.02 billion a year ago. The ~~decrease~~increase in earnings was primarily due to ~~lower~~the absence of second quarter 2020 write-offs and impairments of $3.59 billion and severance charges of $290 million, along with higher current quarter crude oil ~~and natural gas~~ realizations of ~~$900 million and $410 million, respectively, lower crude oil and natural gas sales volumes~~$2.05 billion, partially offset by the absence of ~~$400 million and $290 million, respectively, and a~~the second quarter 2020 tax item related to an end-of-contract settlement of $130 million. Partially offsetting these items were lower depreciation and operating expenses of $250 million and $170 million, respectively. Foreign currency effects had an unfavorable impact on earnings of $156 million between periods.

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~~International upstream operations reported a loss~~items of $1.23 billion in the first nine months of 2020 compared with earnings of $6.94 billion a year earlier. The decrease was primarily due to lower crude oil and natural gas realizations of $3.8 billion and $870 million, respectively, charges of $3.6 billion for impairments and write-offs, and lower crude oil and natural gas volumes of $760$380 million and ~~$430 million, respectively. Partially offsetting these items were gains on~~the 2020 Azerbaijan asset sales gain of ~~$550~~$310 million. Foreign currency effects had a favorable impact on earnings of ~~$196~~$340 million between periods.

International upstream reported earnings of $3.14 billion in the first six months of 2021 compared with a loss of $1.34 billion a year earlier. The increase was primarily due to the absence of second quarter 2020 impairments and write-offs of $3.59 billion and severance charges of $290 million, along with higher crude oil realizations of $2.58 billion, partially offset by the absence of 2020 tax impacts of $820 million and asset sales gains of $550 million along with lower current period sales volumes of $430 million. Foreign currency effects had an unfavorable impact on earnings of $180 million between periods.

The average realization per barrel of crude oil and natural gas liquids in ~~third~~second quarter ~~2020~~2021 was ~~$39,~~$62, compared with ~~$56~~$21 a year earlier. The average realization per barrel of crude oil and natural gas liquids in the first ~~nine~~six months of ~~2020~~2021 was ~~$35,~~$59, compared with ~~$59~~$33 a year earlier. The average natural gas realization in ~~third~~second quarter ~~2020~~2021 was ~~$3.89~~$4.92 per thousand cubic feet, compared with ~~$5.62~~$4.48 in the ~~2019~~2020 period. The average natural gas realization in the first ~~nine~~six months of ~~2020~~2021 was ~~$4.71~~$4.82 per thousand cubic feet, compared with ~~$5.87~~$5.11 in the ~~2019~~2020 period.

International net oil-equivalent production of ~~1.85~~1.99 million barrels per day in ~~third~~second quarter ~~2020~~2021 decreased ~~247,000~~7,000 barrels per day ~~or 12 percent,~~ from the corresponding ~~2019~~2020 period. ~~The decrease is due to~~Higher production of an additional 148,000 barrels per day following the Noble Energy acquisition and lower production curtailments ~~associated with OPEC+ restrictions~~were more than offset by unfavorable entitlement effects and ~~market conditions combined with asset sale related decreases of 104,000 barrels per day.~~operational impacts. International net oil-equivalent production of ~~2.01~~2.02 million barrels per day in the first ~~nine~~six months of ~~2020~~2021 was down ~~140,000~~66,000 barrels per day, or 73 percent, from a year earlier. The decrease is due to ~~asset sale related decreases of 100,000~~unfavorable entitlement effects, operational impacts and normal field declines, partially offset by 143,000 barrels per day ~~and production curtailments~~ associated with ~~OPEC+ restrictions and market conditions, partially offset by higher production entitlement effects.~~the Noble Energy acquisition.

The net liquids component of oil-equivalent production of ~~976,000~~990,000 barrels per day in ~~third~~second quarter ~~2020~~2021 decreased 128 percent from the ~~2019~~2020 period. The net liquids component of oil-equivalent production of ~~1.07~~1.01 million barrels per day in the first ~~nine~~six months of ~~2020~~2021 decreased 710 percent from the ~~2019~~2020 period. Net natural gas production of ~~5.26~~5.99 billion cubic feet per day in ~~third~~second quarter ~~2020 decreased 12~~2021 increased 8 percent from the ~~2019~~2020 period. Net natural gas production of ~~5.61~~6.06 billion cubic feet per day in the first ~~nine~~six months of ~~2020 decreased 6~~2021 increased 5 percent from the ~~2019~~2020 period.

Downstream

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
U.S. Downstream Earnings $ 141 $ 389 $ (397) $ 1,071


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
U.S. Downstream Earnings	$	776	$	(988)	$	646	$	(538)

U.S. downstream ~~operations~~ reported earnings of ~~$141~~$776 million in ~~third~~second quarter ~~2020,~~2021, compared with ~~$389~~a loss of $988 million a year earlier. The ~~decrease~~increase was mainly due to ~~lower sales volumes of $260 million and lower~~higher margins on refined product sales of ~~$230~~$800 million, ~~partially offset by~~higher earnings from the 50 percent-owned Chevron Phillips Chemical Company of $480 million, higher sales volumes of $280 million, and lower operating expenses of ~~$230~~$140 million, including the absence of second quarter 2020 severance accruals of $80 million.

U.S. downstream ~~operations~~ reported ~~a loss~~earnings of ~~$397~~$646 million for the first ~~nine~~six months of ~~2020~~2021 compared with ~~earnings~~a loss of ~~$1.07 billion~~$538 million a year earlier. The ~~decrease~~increase was primarily due to ~~lower sales volumes~~higher earnings from 50 percent-owned CPChem of ~~$670~~$490 million, ~~lower~~higher margins on refined product sales of ~~$590~~$250 million, higher sales volumes of $250 million, and lower ~~earnings from 50 percent-owned CPChem~~operating expenses of ~~$260~~$150 million, including the absence of second quarter severance accruals of $80 million.

Refinery crude oil input in ~~third~~second quarter ~~2020 decreased 17~~2021 increased 65 percent to ~~820,000~~956,000 barrels per day and for the first ~~nine~~six months of ~~2020,~~2021, crude oil input ~~decreased 16~~increased 19 percent to ~~789,000~~918,000 barrels per ~~day.~~day from the corresponding 2020 period. The ~~decrease~~increase for both comparative periods was due to the company's ~~cut in~~increased refinery runs in response to ~~lower~~higher demand ~~from the impact of the COVID-19 pandemic~~ and the ~~weak~~improved refining margin environment.

Refined product sales ~~of 1.00~~in second quarter 2021 were up 40 percent to 1.16 million barrels per day ~~were down 22 percent from third quarter 2019, mainly due to lower jet fuel, gasoline~~ and ~~diesel demand associated with~~for the ~~COVID-19 pandemic. Refined~~first six months of 2021, refined product sales ~~of 997,000~~were up 11 percent to 1.11 million barrels per ~~day in the nine-month period were down 21 percent~~days from the ~~corresponding 2019 period, mainly due to lower jet fuel, gasoline and diesel demand associated with the COVID-19 pandemic.~~

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Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
International Downstream Earnings* $ 151 $ 439 $ 782 $ 738
_______________________
* Includes foreign currency effects $ (49) $ 27 $ (12) $ 49
corresponding 2020 period. The increase for both comparative periods was mainly due to higher gasoline and jet fuel demand as travel restrictions associated with the COVID-19 pandemic eased.


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
International Downstream Earnings*	$	63	$	(22)	$	198	$	631

* Includes foreign currency effects	$	1	$	(23)	$	60	$	37

International downstream ~~operations earned $151~~reported earnings of $63 million in ~~third~~second quarter 2021, compared with a loss of $22 million a year earlier. The increase in earnings was largely due to the absence of second quarter 2020 severance accruals of $60 million. Foreign currency effects had a favorable impact on earnings of $24 million between periods.

International downstream reported earnings of $198 million for the first six months of 2021, compared with ~~earnings of $439~~$631 million a year earlier. The decrease in earnings was largely due to lower margins on refined product sales of ~~$270~~$650 million, partially offset by lower operating expenses of ~~$50~~$110 million and favorable tax items of $80 million. Foreign currency effects had ~~an unfavorable~~a favorable impact on earnings of ~~$76 million between periods.~~

Earnings for the first nine months of 2020 were $782 million, compared with $738 million a year earlier. The increase in earnings was largely due to higher margins on refined product sales of $130 million, partially offset by lower asset sale gains of $30 million. Foreign currency effects had an unfavorable impact on earnings of $61$23 million between periods.

Refinery crude oil input of ~~570,000~~580,000 barrels per day in ~~third~~second quarter ~~2020~~2021 decreased 92 percent from the year-ago period. For the first ~~nine~~six months of ~~2020,~~2021, crude oil input was ~~598,000~~559,000 barrels per day, down 59 percent from the year-ago period.

Total refined product sales of 1.28 million barrels per day in ~~third~~second quarter ~~2020~~2021 were ~~down 6~~up 16 percent from the year-ago period, mainly due to ~~lower~~higher gasoline, jet fuel ~~demand associated with the COVID-19 pandemic, partially offset by higher~~and diesel ~~sales resulting from the second quarter 2020 acquisition of~~ ~~Puma Energy (Australia) Holdings Pty Ltd~~demand. Total refined product sales for the first ~~nine~~six months of ~~2020~~2021 of ~~1.22~~1.27 million barrels per day were ~~down 9~~up 7 percent from the year-ago period, mainly due to ~~lower jet fuel~~the end of second quarter 2020 acquisition of Puma Energy (Australia) Holdings Pty Ltd. and higher diesel and gasoline demand, ~~associated with the COVID-19 pandemic.~~partially offset by lower jet fuel.

All Other


		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
		(Millions of dollars)									(Millions of dollars)
Earnings/(Charges)*	Earnings/(Charges)*	$	(734)	$	(952)	$	(2,329)	$	(1,585)	Earnings/(Charges)*	$	(935)	$	(1,171)	$	(1,913)	$	(1,595)
______________________

* Includes foreign currency effects	* Includes foreign currency effects	$	(32)	$	(2)	$	(198)	$	—	* Includes foreign currency effects	$	(36)	$	(152)	$	(45)	$	(166)

All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.

Net charges in ~~third~~second quarter ~~2020~~2021 were ~~$734~~$935 million, compared to ~~$952 million~~$1.17 billion a year earlier. The decrease in net charges between periods was mainly due to the absence of ~~a prior year tax charge. Higher corporate expenses~~second quarter 2020 severance accruals, partially offset ~~the decrease between periods, primarily from a $90 million non-cash provision for remediation of a former mining asset.~~by higher tax items and pension settlement costs. Foreign currency effects ~~increased~~decreased net charges by ~~$30~~$116 million between periods.

Net charges for the first ~~nine~~six months of ~~2020~~2021 were ~~$2.33~~$1.91 billion, compared with ~~$1.59~~$1.60 billion a year earlier. The change between periods was mainly due to ~~the absence of the Anadarko termination fee that was received in second quarter 2019~~higher pension settlement costs, employee benefit costs and ~~second quarter 2020 severance charges,~~higher tax items, partially offset by the absence of ~~a prior year tax charge.~~second quarter 2020 severance charges. Foreign currency effects ~~increased~~decreased net charges by ~~$198~~$122 million between periods.

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Consolidated Statement of Income

Explanations of variations between periods for selected income statement categories are provided below:

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Sales and other operating revenues $ 23,997 $ 34,779 $ 69,628 $ 105,291


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Sales and other operating revenues	$	36,117	$	15,926	$	67,193	$	45,631

Sales and other operating revenues ~~decreased $10.8~~increased $20.2 billion for the ~~quarterly~~second quarter and $21.6 billion for the six-month period mainly due to ~~lower~~higher refined product, ~~and crude oil prices and lower refined product volumes. Sales and other operating revenues for the nine-month period decreased $35.7 billion. The decrease was primarily due to lower~~ crude oil and natural gas prices and higher refined product ~~prices, lower refined product volumes and lower natural gas prices.~~volumes.

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Income from equity affiliates $ 510 $ 1,172 $ (1,040) $ 3,430


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Income from equity affiliates	$	1,442	$	(2,515)	$	2,353	$	(1,550)

Income from equity affiliates in the ~~quarterly period decreased,~~second quarter and six-month periods increased mainly due to ~~lower upstream-related earnings from Tengizchevroil in Kazakhstan and lower downstream-related earnings from GS Caltex in South Korea. Income from equity affiliates in~~ the ~~nine-month period decreased mainly due to the~~absence of full impairment of Petropiar and Petroboscan in Venezuela, ~~and lower~~higher upstream-related earnings from ~~Tengizchevroil~~TCO in ~~Kazakhstan.~~Kazakhstan and higher downstream-related earnings from CPChem.

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Other income (loss) $ (56) $ 165 $ 858 $ 1,445


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Other income (loss)	$	38	$	83	$	80	$	914

Other income for the ~~third~~second quarter decreased due to ~~an unfavorable~~lower gains on asset sales, partially offset by a favorable swing in foreign currency effects. Other income for the ~~nine-month~~six-month period decreased due to ~~the absence of the receipt of the second quarter 2019 Anadarko termination fee~~lower gains on asset sales and an unfavorable swing in foreign currency ~~effects, partially offset by gains on asset sales.~~effects.

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Purchased crude oil and products $ 13,448 $ 19,882 $ 37,101 $ 60,420


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Purchased crude oil and products	$	20,629	$	8,144	$	38,197	$	23,653

Purchased crude oil and products increased $12.5 billion for the ~~third~~second quarter ~~decreased $6.4~~and $14.5 billion for the six-month period primarily due to ~~lower crude oil and refined product prices. Purchased crude oil and products for the nine-month period decreased $23.3 billion, primarily due to lower~~higher crude oil and refined product prices and ~~lower refined product and crude oil~~ volumes.

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Operating, selling, general and administrative expenses $ 5,436 $ 6,279 $ 18,509 $ 18,412


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Operating, selling, general and administrative expenses	$	5,995	$	7,099	$	11,952	$	13,073

Operating, selling, general and administrative expenses in the ~~third~~second quarter and six month periods each decreased ~~$843 million,~~$1.1 billion primarily due to the absence of second quarter 2020 severance accruals.


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Exploration expenses	$	113	$	895	$	199	$	1,053

Exploration expenses in the second quarter and the six-month period decreased primarily due to lower ~~maintenance expenses, lower employee expenses and lower expenses~~charges for non-operated upstream properties. The nine-month period increased $97 million, primarily due to severance accruals partially offset by lower non-severance related employee expenses, lower expenses for non-operated upstream properties and lower maintenance expense.

well write-offs.

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Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Exploration expenses $ 117 $ 168 $ 1,170 $ 498

Exploration expenses in the third quarter decreased primarily due to lower geological and geophysical expenses. The increase in the nine-month period was mostly due to higher charges for well write-offs.

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Depreciation, depletion and amortization $ 4,017 $ 4,361 $ 15,022 $ 12,789


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Depreciation, depletion and amortization	$	4,522	$	6,717	$	8,808	$	11,005

Depreciation, depletion and amortization expenses for the ~~third~~second quarter and six-month periods decreased primarily due to ~~lower production. Depreciation, depletion and amortization expenses for~~ the ~~nine-month period increased mainly due to~~absence of second quarter 2020 impairment charges.

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Taxes other than on income $ 1,091 $ 1,059 $ 3,223 $ 3,167


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Taxes other than on income	$	1,566	$	965	$	2,986	$	2,132

Taxes other than on income increased for the ~~third~~second quarter and six-month periods mainly due to higher regulatory expenses, and property taxes, partially offset by lower taxes on production. Taxes other than on income for the nine-month period increased mainly due to higher regulatory expenses and property taxes, partially offset by lower taxes on production ~~payroll~~ and ~~sales and use tax.~~property taxes.

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Interest and debt expense $ 164 $ 197 $ 498 $ 620


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Interest and debt expense	$	185	$	172	$	383	$	334

Interest and debt expenses for the ~~third~~second quarter and the ~~nine-month~~six-month period ~~decreased~~increased mainly due to ~~lower~~ interest ~~rates.~~expense associated with debt acquired in the Noble Energy acquisition.


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Other components of net periodic benefit costs	$	165	$	99	$	502	$	197

Three Months Ended
September 30 Nine Months Ended
September 30
2020 2019 2020 2019
(Millions of dollars)
Income tax expense/(benefit) $ 165 $ 1,469 $ (1,591) $ 4,429
Other components of net periodic benefit costs for the second quarter and the six-month period increased due to higher pension settlement costs as a large number of lump-sum pension distributions were made following last year's restructuring.


	Three Months Ended June 30				Six Months Ended June 30
	2021		2020		2021		2020
	(Millions of dollars)
Income tax expense/(benefit)	$	1,328	$	(2,320)	$	2,107	$	(1,756)

The ~~decrease~~increase in income tax expense for the ~~third~~second quarter ~~2020~~2021 of ~~$1.30~~$3.65 billion ~~was primarily due to~~is consistent with the ~~reduction~~increase in total income before tax for the company of ~~$4.09~~$15.02 billion. ~~The decrease in income before taxes was primarily due to lower prices and decreased production.~~

U.S. income before tax ~~decreased~~increased from ~~$728 million in third quarter 2019 to~~ a loss of ~~$662 million~~$5.47 billion in ~~2020.~~second quarter 2020 to income of $1.68 billion in 2021. This ~~$1.39~~$7.15 billion ~~decrease~~increase in income was primarily driven by ~~lower prices, partially offset by increased~~higher crude oil realizations, the absence of second quarter 2020 impairments and write-offs, higher downstream margins and an increase in production. The ~~decrease~~increase in income had a direct impact on the company’s U.S. income tax resulting in ~~a decrease~~an increase to tax expense of ~~$344 million~~$1.61 billion between year-over-year periods, from a tax benefit of $1.23 billion in 2020 to a charge of ~~$161~~$381 million in ~~2019 to a benefit of $183 million in 2020.~~2021.

International income before tax ~~decreased~~increased from ~~$3.32~~a loss of $5.13 billion in ~~third~~second quarter ~~2019~~2020 to ~~$618 million~~income of $2.74 billion in ~~2020.~~2021. This ~~$2.70~~$7.87 billion ~~decrease~~increase in income was primarily driven by ~~lower prices~~the absence of 2020 impairments and ~~decreased production.~~write-offs and higher crude oil realizations. The ~~decrease in~~increased income and a lower ~~one-time~~favorable international tax ~~charge resulted in a $960 million decrease~~items drove the $2.04 billion increase in international income tax expense between year-over-year periods, from ~~$1.31~~a tax benefit of $1.09 billion in ~~2019~~2020 to ~~$348~~a charge of $947 million in ~~2020.~~2021.

The company's ~~decrease~~increase in income tax expense for the first ~~nine~~six months of ~~2020~~2021 of ~~$6.02~~$3.87 billion was primarily due to the ~~decrease~~increase in the total before-tax income in ~~2020~~2021 of ~~$20.44~~$13.05 billion.

U.S. income before tax increased between the six-month periods, from a loss of $5.04 billion in 2020 to income of $1.58 billion in 2021. This increase in income was primarily driven by higher crude oil

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U.S. income before tax decreased between the nine-month periods, from $3.08 billion in 2019 to a loss of $5.70 billion in 2020. This decrease in income was primarily driven by lower prices, the effects of impairments and other charges in the U.S., andrealizations, the absence of ~~the Anadarko merger termination fee, partially offset by an~~2020 impairments and write-offs, increase in ~~production.~~production and higher downstream margins. The ~~decrease~~increase in income had a direct impact on the company’s U.S. income tax resulting in ~~a decrease~~an increase in tax expense of ~~$2.06~~$1.49 billion between the ~~nine-month~~six-month periods, from ~~an expense of $801 million in 2019 to~~ a benefit of ~~$1.25~~$1.07 billion in ~~2020.~~2020 to a charge of $415 million in 2021.

International income before tax ~~decreased~~increased for the ~~nine-month~~six-month periods, from ~~$10.86 billion in 2019 to~~ a loss of ~~$799 million~~$1.42 billion in ~~2020.~~2020 to income of $5.02 billion in 2021. This ~~decrease~~increase in income was primarily driven by ~~lower prices and production volumes,~~ the ~~effects~~absence of 2020 impairments and ~~other charges in international locations,~~write-offs and higher crude oil realizations, partially offset by the absence of 2020 asset ~~sales.~~sale gains. The ~~decrease~~increase in income ~~before asset sale gains~~ and absence of various favorable international tax items primarily drove the ~~impact of tax benefits due to releasing the reserve on uncertain tax positions, valuation allowance releases, a rate change, and a lower one-time charge resulted in an overall decrease~~$2.38 billion increase in international income tax expense ~~of $3.97 billion~~ between year-over-year periods, from a benefit of $685 million in 2020 to a charge of ~~$3.63~~$1.69 billion in ~~2019 to a benefit of $337 million in 2020.~~2021.

Additional information related to the company’s effective income tax rate is included in Note 1110 to the Consolidated Financial Statements.

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Selected Operating Data

The following table presents a comparison of selected operating data:


Selected Operating Data (1) (2)	Selected Operating Data (1) (2)									Selected Operating Data (1) (2)
		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
U.S. Upstream	U.S. Upstream									U.S. Upstream
Net crude oil and natural gas liquids production (MBPD)	Net crude oil and natural gas liquids production (MBPD)	731		726		760		709		Net crude oil and natural gas liquids production (MBPD)	857		747		829		775
Net natural gas production (MMCFPD)(3)	Net natural gas production (MMCFPD)(3)	1,507		1,243		1,511		1,178		Net natural gas production (MMCFPD)(3)	1,678		1,462		1,660		1,513
Net oil-equivalent production (MBOEPD)	Net oil-equivalent production (MBOEPD)	982		934		1,012		906		Net oil-equivalent production (MBOEPD)	1,136		991		1,106		1,027
Sales of natural gas (MMCFPD)	Sales of natural gas (MMCFPD)	3,776		3,945		4,000		3,980		Sales of natural gas (MMCFPD)	3,776		3,863		3,843		4,113
Sales of natural gas liquids (MBPD)	Sales of natural gas liquids (MBPD)	205		128		203		118		Sales of natural gas liquids (MBPD)	186		196		178		202
Revenue from net production	Revenue from net production									Revenue from net production
Liquids ($/Bbl)	Liquids ($/Bbl)	$	31.33	$	46.84	$	29.53	$	49.22	Liquids ($/Bbl)	$	54.08	$	19.29	$	51.01	$	28.68
Natural gas ($/MCF)	Natural gas ($/MCF)	$	0.89	$	0.95	$	0.77	$	1.09	Natural gas ($/MCF)	$	2.16	$	0.81	$	2.16	$	0.70
International Upstream	International Upstream									International Upstream
Net crude oil and natural gas liquids production (MBPD)(4)	Net crude oil and natural gas liquids production (MBPD)(4)	976		1,104		1,072		1,147		Net crude oil and natural gas liquids production (MBPD)(4)	990		1,077		1,008		1,120
Net natural gas production (MMCFPD)(3)	Net natural gas production (MMCFPD)(3)	5,257		5,972		5,609		5,995		Net natural gas production (MMCFPD)(3)	5,993		5,524		6,060		5,787
Net oil-equivalent production (MBOEPD)(4)	Net oil-equivalent production (MBOEPD)(4)	1,852		2,099		2,006		2,146		Net oil-equivalent production (MBOEPD)(4)	1,990		1,997		2,018		2,084
Sales of natural gas (MMCFPD)	Sales of natural gas (MMCFPD)	5,513		5,923		5,722		5,922		Sales of natural gas (MMCFPD)	4,756		5,430		5,092		5,828
Sales of natural gas liquids (MBPD)	Sales of natural gas liquids (MBPD)	53		31		47		36		Sales of natural gas liquids (MBPD)	106		31		91		45
Revenue from liftings	Revenue from liftings									Revenue from liftings
Liquids ($/Bbl)	Liquids ($/Bbl)	$	38.96	$	56.07	$	34.70	$	58.67	Liquids ($/Bbl)	$	62.12	$	21.19	$	58.93	$	32.74
Natural gas ($/MCF)	Natural gas ($/MCF)	$	3.89	$	5.62	$	4.71	$	5.87	Natural gas ($/MCF)	$	4.92	$	4.48	$	4.82	$	5.11
U.S. and International Upstream	U.S. and International Upstream									U.S. and International Upstream
Total net oil-equivalent production (MBOEPD)(4)	Total net oil-equivalent production (MBOEPD)(4)	2,834		3,033		3,018		3,052		Total net oil-equivalent production (MBOEPD)(4)	3,126		2,988		3,124		3,111
U.S. Downstream	U.S. Downstream									U.S. Downstream
Gasoline sales (MBPD)(5)	Gasoline sales (MBPD)(5)	603		702		577		670		Gasoline sales (MBPD)(5)	678		502		643		563
Other refined product sales (MBPD)	Other refined product sales (MBPD)	401		592		420		585		Other refined product sales (MBPD)	481		325		462		430
Total refined product sales (MBPD)	Total refined product sales (MBPD)	1,004		1,294		997		1,255		Total refined product sales (MBPD)	1,159		827		1,105		993
Sales of natural gas liquids (MBPD)	Sales of natural gas liquids (MBPD)	25		105		25		95		Sales of natural gas liquids (MBPD)	29		23		29		25
Refinery input (MBPD)	Refinery input (MBPD)	820		992		789		939		Refinery input (MBPD)	956		581		918		773
International Downstream	International Downstream									International Downstream
Gasoline sales (MBPD)(5)	Gasoline sales (MBPD)(5)	242		256		227		264		Gasoline sales (MBPD)(5)	269		197		263		219
Other refined product sales (MBPD)	Other refined product sales (MBPD)	690		701		640		703		Other refined product sales (MBPD)	671		556		670		616
Share of affiliate sales (MBPD)	Share of affiliate sales (MBPD)	350		399		352		377		Share of affiliate sales (MBPD)	342		351		341		353
Total refined product sales (MBPD)	Total refined product sales (MBPD)	1,282		1,356		1,219		1,344		Total refined product sales (MBPD)	1,282		1,104		1,274		1,188
Sales of natural gas liquids (MBPD)	Sales of natural gas liquids (MBPD)	80		71		79		75		Sales of natural gas liquids (MBPD)	74		73		75		77
Refinery input (MBPD)	Refinery input (MBPD)	570		625		598		630		Refinery input (MBPD)	580		589		559		612
________________________________
(1) Includes company share of equity affiliates.	(1) Includes company share of equity affiliates.									(1) Includes company share of equity affiliates.
(2) MBPD — thousands of barrels per day; MMCFPD — millions of cubic feet per day; Bbl — Barrel; MCF — thousands of cubic feet; oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil; MBOEPD — thousands of barrels of oil-equivalent per day.	(2) MBPD — thousands of barrels per day; MMCFPD — millions of cubic feet per day; Bbl — Barrel; MCF — thousands of cubic feet; oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil; MBOEPD — thousands of barrels of oil-equivalent per day.									(2) MBPD — thousands of barrels per day; MMCFPD — millions of cubic feet per day; Bbl — Barrel; MCF — thousands of cubic feet; oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil; MBOEPD — thousands of barrels of oil-equivalent per day.
(3) Includes natural gas consumed in operations (MMCFPD):	(3) Includes natural gas consumed in operations (MMCFPD):									(3) Includes natural gas consumed in operations (MMCFPD):
United States	United States	35		34		34		34		United States	45		49		45		48
International	International	535		611		571		611		International	525		572		541		590
(4) Includes net production of synthetic oil:	(4) Includes net production of synthetic oil:									(4) Includes net production of synthetic oil:
Canada	Canada	35		53		52		51		Canada	54		63		57		60
Venezuela affiliate		—		—		—		4

(5) Includes branded and unbranded gasoline.	(5) Includes branded and unbranded gasoline.									(5) Includes branded and unbranded gasoline.

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Liquidity and Capital Resources

Cash, cash equivalents and marketable securities totaled ~~$6.9~~$7.6 billion at ~~September~~June 30, ~~2020~~2021 and ~~$5.7~~$5.6 billion at year-end ~~2019.~~2020. Cash provided by operating activities in the first ~~nine~~six months of ~~2020~~2021 was ~~$8.3~~$11.2 billion, compared with ~~$21.7~~$4.8 billion in the year-ago period. Cash capital and exploratory expenditures totaled ~~$7.3~~$3.8 billion in the first ~~nine~~six months of ~~2020,~~2021, down ~~$3.1~~$1.7 billion from the year-ago period. Proceeds and deposits related to asset sales and returns of investment totaled ~~$1.9 billion~~$352 million and ~~$67~~$17 million, respectively, in the first ~~nine~~six months of ~~2020,~~2021, compared to ~~$1.0~~$1.8 billion and ~~$67~~$31 million, respectively, in the year-ago period.

Dividends The company paid dividends of ~~$7.2~~$5.0 billion to common stockholders during the first ~~nine~~six months of ~~2020.~~2021. In ~~October 2020,~~July 2021, the company declared a quarterly dividend of ~~$1.29~~$1.34 per common share, payable in ~~December 2020.~~September 2021.

Debt and Finance Lease Liabilities Chevron’s total debt and finance lease liabilities were ~~$34.8~~$43.0 billion at ~~September~~June 30, ~~2020, up~~2021, down from ~~$27.0~~$44.3 billion at December 31, ~~2019, following~~2020, as the ~~company’s issuance of long-term public bonds of $8.0 billion in May 2020 and $4.0 billion in August 2020, partially offset by repayment of~~company repaid long-term notes that matured during the ~~first nine months of 2020. More information on bond issuances is included in Note 19 on page 22.~~second quarter and early retired long-term notes and the credit facility held by Noble Midstream Partners LP, which were partially offset by increased borrowings under its commercial paper program.

The company’s primary financing source for working capital needs is its commercial paper program. The outstanding balance for the company’s commercial paper program at ~~September~~June 30, ~~2020~~2021 was ~~$4.3~~$7.6 billion. The company’s debt and finance lease liabilities due within one year, consisting primarily of commercial paper, redeemable long-term obligations and the current portion of long-term debt, totaled ~~$10.3~~$13.3 billion at ~~September~~June 30, ~~2020,~~2021, and ~~$13.0~~$11.4 billion at December 31, ~~2019.~~2020. Of these amounts, ~~$9.75~~$9.825 billion was reclassified to long-term at both ~~September~~June 30, ~~2020,~~2021, and December 31, ~~2019.~~2020. At ~~September~~June 30, ~~2020,~~2021, settlement of these obligations was not expected to require the use of working capital within one year, as the company had the intent and the ability, as evidenced by committed credit facilities, to refinance them on a long-term basis.

At ~~September~~June 30, ~~2020,~~2021, the company had ~~$9.75~~$9.825 billion in 364-day committed credit facilities with various major banks that enable the refinancing of short-term obligations on a long-term basis. The credit facilities allow the company to convert any amounts outstanding into a term loan for a period of up to one year. These facilities support commercial paper borrowing and can also be used for general corporate purposes. The company’s practice has been to continually replace expiring commitments with new commitments on substantially the same terms, maintaining levels management believes appropriate. Any borrowings under the facilities would be unsecured indebtedness at interest rates based on the London Interbank Offered Rate or an average of base lending rates published by specified banks and on terms reflecting the company’s strong credit rating. No borrowings were outstanding under these facilities at ~~September~~June 30, ~~2020.~~2021. In addition, the company has an automatic shelf registration statement that expires in August 2023 for an unspecified amount of nonconvertible debt securities issued by Chevron Corporation or ~~Chevron U.S.A. Inc. (CUSA).~~CUSA.

The major debt rating agencies routinely evaluate the company’s debt, and the company’s cost of borrowing can increase or decrease depending on these debt ratings. The company has outstanding ~~public~~ bonds issued by Chevron Corporation, CUSA, ~~and~~ Texaco Capital Inc and Noble Energy, Inc. ~~All~~Most of these securities are the obligations of, or guaranteed by, Chevron Corporation and are rated AAAA- by Standard and Poor’s Corporation (S&P) and Aa2 by Moody’s Investors Service (Moody’s). The company’s U.S. commercial paper is rated A-1+ by S&P and P-1 by Moody’s. All of these ratings denote high-quality, investment-grade securities. As a result of deteriorating market conditions for the energy industry, S&P and Moody’s conducted credit reviews and reaffirmed the company’s debt ratings in March and April 2020, respectively. In July 2020, following the announcement by the company of the proposed acquisition of Noble Energy, and in September 2020 upon completion of its annual review, S&P reaffirmed the rating.

The company’s future debt level is dependent primarily on results of operations, cash that may be generated from asset dispositions, the capital program, lending commitments to affiliates, and shareholder distributions. Based on its high-quality debt ratings, the company believes that it has substantial borrowing capacity to meet unanticipated cash requirements. During extended periods of low prices for crude oil and natural gas and narrow margins for refined products and commodity chemicals, the company has the flexibility to modify capital spending plans, discontinue or curtail the stock repurchase program, ~~(which is currently suspended),~~

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sell assets, and increase borrowings to continue paying the common stock dividend. The company remains committed to retaining its high-quality debt ratings.

Summarized Financial Information for Guarantee of Securities of Subsidiaries ~~In August 2020, long-term public~~CUSA issued bonds ~~referred to in Note 19 on page 22 were issued by CUSA and~~that are fully and unconditionally guaranteed on an unsecured basis by Chevron Corporation (together, the “Obligor

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Group”). In March 2020, the U.S. Securities and Exchange Commission (SEC) issued a final rule that amended the disclosure requirements with respect to certain guaranteed securities registered or being registered in Rule 3-10 of Regulation S-X and adopted new Rule 13-01 of Regulation S-X. These amendments are effective January 4, 2021, with early adoption permitted. Chevron Corporation has elected to early adopt the final rule beginning July 1, 2020. Accordingly, as disclosed in theThe tables below contain summary financial information ~~is presented~~ for Chevron Corporation, as Guarantor, excluding its consolidated subsidiaries, and CUSA, as the issuer, excluding its consolidated subsidiaries. The summary financial information of the Obligor Group is presented on a combined basis and transactions between the combined entities have been eliminated. Financial information for non-guarantor entities has been excluded.


		Nine Months Ended September 30, 2020		Year Ended December 31, 2019			Six Months Ended June 30, 2021		Year Ended December 31, 2020
		(Millions of dollars) (unaudited)					(Millions of dollars) (unaudited)
Sales and other operating revenues	Sales and other operating revenues	$	37,201	$	82,206	Sales and other operating revenues	$	37,584	$	49,636
Sales and other operating revenues - related party	Sales and other operating revenues - related party	12,672		24,336		Sales and other operating revenues - related party	12,815		17,044
Total costs and other deductions	Total costs and other deductions	42,694		87,287		Total costs and other deductions	38,703		57,575
Total costs and other deductions - related party	Total costs and other deductions - related party	10,467		22,632		Total costs and other deductions - related party	12,600		14,052
Net income (loss)	Net income (loss)	$	(746)	$	2,173	Net income (loss)	$	25	$	(1,610)

At September 30,
2020 At December 31,
2019
(Millions of dollars) (unaudited)
Current assets $ 8,763 $ 10,180
Current assets - related party 5,016 952
Other assets 49,603 50,595
Current liabilities 19,847 25,187
Current liabilities - related party 53,101 46,237
Other liabilities 33,667 25,622
Total net equity (deficit) $ (43,233) $ (35,319)


	At June 30, 2021		At December 31, 2020
	(Millions of dollars) (unaudited)
Current assets	$	13,483	$	9,196
Current assets - related party	7,893		5,719
Other assets	47,821		48,993
Current liabilities	26,340		20,965
Current liabilities - related party	63,356		55,273
Other liabilities	39,078		34,983
Total net equity (deficit)	$	(59,577)	$	(47,313)

Common Stock Repurchase Program On February 1, 2019, the company announced that the Board of Directors authorized a new stock repurchase program with a maximum dollar limit of $25 billion and no set term limits. As of ~~September~~June 30, ~~2020,~~2021, the company had purchased 48.6 million shares for $5.5 billion, resulting in $19.5 billion remaining under the authorized program. On March 24, 2020, the company announced the suspension of the stock repurchase program in response to market conditions. No shares were purchased under the program in the first half of 2021. On July 30, 2021, the company announced the resumption of purchases under the stock repurchase program in the third quarter ~~2020.~~2021 at an expected rate of $2-3 billion per year.

Repurchases may be made from time to time in the open market, by block purchases, in privately negotiated transactions or in such other manner as determined by the company. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the company’s shares, general market and economic conditions, and other factors. The stock repurchase program does not obligate the company to acquire any particular amount of common stock, and it may be discontinued or resumed at any time.

Noncontrolling Interests The company had noncontrolling interests of ~~$264 million~~$0.7 billion at ~~September~~June 30, ~~2020,~~2021 and $1.0 billion at December 31, ~~2019.~~2020. The decrease was primarily due to the acquisition of all of the publicly held common units representing limited partner interests in ~~second quarter~~Noble Midstream Partners LP not already owned by Chevron and its affiliates. Included within noncontrolling interests is $127 million at June 30, 2021 and $120 million at December 31, 2020 of ~~an equity~~redeemable noncontrolling interest ~~that was previously held by a joint venture partner.~~associated with Noble Midstream. There were distributions of ~~$10~~$26 million to noncontrolling interests during the first ~~nine~~six months of ~~2020~~2021 compared to ~~$16~~$10 million for the same period in ~~2019.~~2020.

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Financial Ratios and Metrics

At September 30,
2020 At December 31,
2019
Current Ratio * 1.3 1.1
Debt Ratio 20.9 % 15.8 %
Net Debt Ratio 17.5 % 12.8 %


	At June 30, 2021		At December 31, 2020
Current Ratio 1	1.2		1.2
Debt Ratio	24.4	%	25.2	%
Net Debt Ratio 2	21.0	%	22.7	%

*1 At ~~September~~June 30, ~~2020,~~2021, the book value of inventory was lower than replacement cost.

Nine Months Ended
September 30
2020 2019
(Millions of dollars)
Net cash provided by operating activities $ 8,339 $ 21,657
Less: Capital expenditures (6,855) (9,906)
Free Cash Flow $ 1,484 $ 11,751
2 Net Debt Ratio for June 30, 2021 is calculated as short-term debt of $3.5 billion plus long-term debt of $39.5 billion (together, “total debt”) less cash and cash equivalents of $7.5 billion and marketable securities of $34 million as a percentage of total debt less cash and cash equivalents and marketable securities, plus Chevron Corporation Stockholders’ Equity of $133.2 billion. For the December 31, 2020 calculation, please refer to page 46 of Chevron’s 2020 Annual Report on Form 10-K.


	Six Months Ended June 30
		2021		2020
	(Millions of dollars)
Net cash provided by operating activities		$	11,150	$	4,802
Less: Capital expenditures		(3,543)		(5,225)
Free Cash Flow		$	7,607	$	(423)

Pension Obligations Information related to pension plan contributions is included on page 1314 in Note 97 to the Consolidated Financial Statements.

Capital and Exploratory Expenditures Total expenditures, including the company’s share of spending by affiliates, were ~~$10.3~~$5.3 billion in the first ~~nine~~six months of ~~2020,~~2021, compared with ~~$15.0~~$7.7 billion in the corresponding ~~2019~~2020 period. The amounts included the company’s share of affiliates’ expenditures of ~~$3.1~~$1.5 billion and ~~$4.6~~$2.3 billion in the ~~2020~~2021 and ~~2019~~2020 periods, respectively, which did not require cash outlays by the company. Expenditures for upstream projects in the first ~~nine~~six months of ~~2020~~2021 were ~~$8.4~~$4.4 billion, representing 8284 percent of the company wide total. ~~Included in~~In July, the ~~2020 period were inorganic capital expenditures of $350 million, primarily associated with the downstream acquisition of Puma Energy (Australia) Holdings Pty Ltd.~~

~~The decrease is consistent with the May 1, 2020 revision to~~ company updated its expectation for 2021 organic capital expenditure ~~guidance for 2020~~spending to ~~be as low as~~around $13 billion, down from the original estimate of $14 billion. ~~The incremental reductions are primarily focused on TCO~~’s major capital project, deferral of short-cycle investments and pacing projects not yet under construction in response to market conditions. The company is focused on completing projects already under construction that will start-up in future years while preserving the capability to increase short-cycle activity in the Permian Basin and other areas when commodity prices recover.

																			Capital and Exploratory Expenditures by Major Operating Area
		Three Months Ended September 30				Nine Months Ended September 30					Three Months Ended June 30				Six Months Ended June 30
		2020		2019		2020		2019			2021		2020		2021		2020
		(Millions of dollars)									(Millions of dollars)
United States	United States									United States
Upstream	Upstream	$	904	$	2,102	$	3,932	$	5,929	Upstream	$	1,074	$	1,011	$	2,123	$	3,028
Downstream	Downstream	296		327		750		1,381		Downstream	264		178		506		454
All Other	All Other	44		102		183		233		All Other	31		45		83		139
Total United States	Total United States	1,244		2,531		4,865		7,543		Total United States	1,369		1,234		2,712		3,621
International	International									International
Upstream	Upstream	1,119		2,137		4,499		6,873		Upstream	1,237		1,496		2,296		3,380
Downstream	Downstream	228		284		949		550		Downstream	174		573		272		721
All Other	All Other	1		4		9		12		All Other	6		3		10		8
Total International	Total International	1,348		2,425		5,457		7,435		Total International	1,417		2,072		2,578		4,109
Worldwide	Worldwide	$	2,592	$	4,956	$	10,322	$	14,978	Worldwide	$	2,786	$	3,306	$	5,290	$	7,730

Contingencies and Significant Litigation

MTBE Information related to methyl tertiary butyl ether (MTBE) matters is included on page 1516 in Note 1211 to the Consolidated Financial Statements under the heading “MTBE.”

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Ecuador Information related to Ecuador matters is included beginning on page 1516 in Note 1211 to the Consolidated Financial Statements under the heading “Ecuador.”

Income Taxes Information related to income tax contingencies is included beginning on page 1415 in Note 1110 and page 1617 in Note 1312 to the Consolidated Financial Statements under the heading “Income Taxes.”

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Guarantees Information related to the company’s guarantees is included on page 17 in Note 1312 to the Consolidated Financial Statements under the heading “Guarantees.”

Indemnifications Information related to indemnifications is included on page 17 in Note 1312 to the Consolidated Financial Statements under the heading “Indemnifications.”

~~Off-Balance-Sheet~~Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements Information related to the company’s ~~off-balance-sheet~~long-term unconditional purchase obligations and commitments is included on page 17 in Note 1312 to the Consolidated Financial Statements under the heading ~~“Off-Balance-Sheet Obligations.~~“Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements.”

Environmental Information related to environmental matters is included on page 17 in Note 1312 to the Consolidated Financial Statements under the heading “Environmental.”

Other Contingencies Information related to the company’s other contingencies is included on ~~pages 17 and~~page 18 in Note 1312 to the Consolidated Financial Statements under the heading “Other Contingencies.”

Item 3.Quantitative and Qualitative Disclosures About Market Risk

Information about market risks for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, does not differ materially from that discussed under Item 7A of Chevron’s ~~2019~~2020 Annual Report on Form 10-K.

Item 4.Controls and Procedures

(a) Evaluation of disclosure controls and procedures

The company’s management has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the company’s disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended) as of the end of the period covered by this report. Based on this evaluation, the Chief Executive Officer and Chief Financial Officer concluded that the company’s disclosure controls and procedures were effective as of ~~September~~June 30, ~~2020.~~2021.

(b) Changes in internal control over financial reporting

During the quarter ended ~~September~~June 30, ~~2020,~~2021, there were no changes in the company’s internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, the company’s internal control over financial reporting.

PART II

OTHER INFORMATION

Item 1.Legal Proceedings

Governmental Proceedings The following is a description of legal proceedings that ~~the company has determined to disclose for this reporting period that~~ involve governmental authorities as a party and ~~certain~~the company reasonably believes would result in $1,000,000 or more of monetary sanctions, exclusive of interest and costs, under federal, state and local laws that have been enacted or adopted regulating the discharge of materials into the environment or primarily for the purpose of protecting the environment. The following proceedings include those matters relating to ~~third~~second quarter ~~2020~~2021 and any material developments with respect to matters previously reported in Chevron’s ~~2019~~2020 Annual Report on Form 10-K.

As previously disclosed, in January 2021, the ~~California~~United States Department of ~~Conservation, Geologic~~Justice and the United States Environmental Protection Agency notified Noble Energy, ~~Management Division (CalGEM) (previously known as~~Inc., Noble Midstream Partners LP and Noble Midstream Services, LLC of potential penalties for alleged Clean Water Act violations at two facilities in Weld County, Colorado relating to a 2014 flood event and requirements for a Spill Prevention and Countermeasures Plan and Facility Response Plan. The parties have negotiated a resolution of these issues with the ~~Division~~agencies, which remains subject to approval by the U.S. District Court, District of ~~Oil, Gas and Geothermal Resources) promulgated revised rules pursuant to~~Colorado. If approved by the ~~Underground Injection Control program that took effect April 1, 2019. Subsequent to that date, CalGEM issued Notices~~court, resolution of ~~Violation (NOVs) and two orders to Chevron related to seeps that occurred~~these alleged violations will result in the ~~Cymric Oil Field in Kern County, California. An October 2, 2019 CalGEM order (Order) seeks~~payment of a civil penalty of ~~approximately $2.7 million. Chevron has filed an appeal of the Order. Chevron is currently in discussions with CalGEM to explore a global settlement to resolve the Order and all past and~~$1,000,000.

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present seeps in the Cymric Field, which would increase the amount of the penalty paid. Other state agencies may become engaged in settlement discussions with Chevron as well relating to this matter. Resolution of this matter may result in the payment of civil penalties of $100,000 or more.

On August 6, 2020, Chevron received a proposal from California’s Bay Area Air Quality Management District seeking to resolve certain NOVs related to alleged violations that occurred at Chevron's Richmond Refinery between 2017 and 2019. Resolution of the alleged violations may result in the payment of a civil penalty of $100,000 or more.

Other Proceedings Information related to legal proceedings, including Ecuador, is included beginning on page 1516 in Note 1211 to the Consolidated Financial Statements.

Item 1A.Risk Factors

Chevron is a global energy company with a diversified business portfolio, a strong balance sheet, and a history of generating sufficient cash to fund capital and exploratory expenditures and to pay dividends. Nevertheless, someSome inherent risks could materially impact the company’s financial results of operations or financial condition. Information about risk factors for the ~~nine~~six months ended ~~September~~June 30, ~~2020,~~2021, does not differ materially from that set forth under the heading “Risk Factors” on pages 18 through 2123 of the company’s ~~2019~~2020 Annual Report on Form ~~10-K, other than as reflected in the risk factors below.~~

Impacts of the coronavirus disease 2019 (COVID-19) pandemic and geopolitical factors have resulted in a significant decrease in demand for Chevron’s products and caused a precipitous drop in commodity prices, which has had and is expected to continue to have an adverse, and potentially material adverse, effect on Chevron’s future financial and operating results.

As of the date of this Quarterly Report on Form 10-Q, the economic, business, and oil and gas industry impacts from the COVID-19 pandemic and the disruption to capital markets have continued to be far reaching. Crude oil prices, the single largest variable that affects the company’s results of operations, have fallen dramatically to historic lows, even briefly going negative, due to a combination of a severely reduced demand for crude oil, gasoline, jet fuel, diesel fuel, and other refined products resulting from government-mandated travel restrictions and the curtailment of economic activity resulting from the COVID-19 pandemic. As a result, a market imbalance has existed and may continue to exist, with oil supplies vastly exceeding current and expected near-term demand. Although OPEC and other countries have agreed to cut global oil supply, the commitments and actions to date have not matched the dramatic decrease in global demand, which has resulted in increased inventory levels in refineries, pipelines and storage facilities in prior periods and which may drive increased inventory levels in future periods.

Extended periods of low prices for crude oil are expected to have a material adverse effect on the company’s results of operations, financial condition and liquidity. Among other things, the company’s earnings, cash flows, and capital and exploratory expenditure programs are expected to be negatively affected, as are its production volumes and proved reserves. As a result, the value of the company’s assets may also become impaired in future periods, as we saw in the second quarter 2020.

The company’s operations and workforce are being impacted by the COVID-19 pandemic, causing certain operations to be curtailed to various degrees, which may become suspended completely if adverse conditions deteriorate further. At 50 percent-owned Tengizchevroil in Kazakhstan, COVID-19 infections have led to the demobilization of a significant portion of the workforce, adversely impacting the construction pace for completion of the FGP-WPMP project. Although infection levels in Kazakhstan improved in the third quarter 2020, allowing remobilization of the FGP-WPMP construction workforce to commence, the ultimate effects of COVID-19 on FGP-WPMP construction remain uncertain and cannot be predicted at this time. In particular, we are currently unable to predict whether COVID-19 will have a material adverse impact on our ability to complete FGP-WPMP on schedule or within the current cost estimate for the project.

As a result of decreased demand for its products, the company has made cuts to its upstream capital and exploratory expenditure program for 2020, which are expected to negatively impact future production, have led to and could lead to further negative revisions of reserves and could also lead to the further impairment of assets. Production curtailments, such as those due to the reductions imposed by OPEC+ nations in

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Kazakhstan, Nigeria and Angola, and other production curtailment actions taken by operators of assets for which the company has non-operated interests or due to market conditions, have exacerbated and are expected to continue to further exacerbate these negative impacts in future periods. Within downstream, the company reduced its capital spending program and is also deferring certain discretionary maintenance activities while maintaining expenditures for asset integrity and reliability. The company has reduced the utilization rates of its refineries in response to reduced demand for its products, particularly greatly reduced demand for jet fuel due to the COVID-19 impact on travel and the aviation industry, for which we are a key supplier, and these actions are expected to negatively impact future earnings and cash flows.

The company’s suppliers are also being impacted by the COVID-19 pandemic and access to materials, supplies, and contract labor has been strained. In certain cases, the company has received notices invoking force majeure provisions in supplier contracts. This strain on the financial health of the company’s suppliers could put further pressure on the company’s financial results and may negatively impact supply assurance and supplier performance. In-country conditions, including potential future waves of the COVID-19 virus in countries that appear to have reduced their infection rates, could impact logistics and material movement and remain a risk to business continuity.

In light of the significant uncertainty around the duration and extent of the impact of the COVID-19 pandemic, management is currently unable to develop with any level of confidence estimates and assumptions that may have a material impact on the company’s consolidated financial statements and financial or operational performance in any given period. In addition, the unprecedented nature of such market conditions could cause current management estimates and assumptions to be challenged in hindsight.

There continues to be uncertainty and unpredictability about the impact of the COVID-19 pandemic on our financial and operating results in future periods. The extent to which the COVID-19 pandemic adversely impacts our future financial and operating results, and for what duration and magnitude, depends on several factors that are continuing to evolve, are difficult to predict and, in many instances, are beyond the company's control. Such factors include the duration and scope of the pandemic, including any resurgences of the pandemic, and the impact on our workforce and operations; the negative impact of the pandemic on the economy and economic activity, including travel restrictions and prolonged low demand for our products; the ability of our affiliates, suppliers and partners to successfully navigate the impacts of the pandemic; the actions taken by governments, businesses and individuals in response to the pandemic; the actions of OPEC and other countries that otherwise impact supply and demand and correspondingly, commodity prices; the extent and duration of recovery of economies and demand for our products after the pandemic subsides; and Chevron’s ability to keep its cost model in line with changing demand for our products.

The impact of the COVID-19 pandemic is rapidly evolving, and the continuation or a resurgence of the pandemic could precipitate or aggravate the other risk factors identified in our 2019 Form 10-K, which in turn could further materially and adversely affect our business, financial condition, liquidity, results of operations and profitability, including in ways not currently known or considered by us to present significant risks.

The Noble Energy acquisition may cause our financial results to differ from our expectations or the expectations of the investment community, we may not achieve the anticipated benefits of the acquisition, and the acquisition may disrupt our current plans or operations.

The success of the Noble Energy acquisition, which closed in October 2020, will depend, in part, on Chevron’s ability to successfully integrate the business of Noble Energy and realize the anticipated benefits, including the anticipated annual run-rate operating and other cost synergies and accretion to return on capital employed, free cash flow and earnings per share. Difficulties in integrating Noble Energy may result in the failure to realize anticipated synergies in the expected timeframe, in operational challenges, and in the diversion of management’s attention from ongoing business concerns as well as in unforeseen expenses associated with the acquisition, which may have an adverse impact on our financial results.

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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds

CHEVRON CORPORATION

ISSUER PURCHASES OF EQUITY SECURITIES

Period
Total Number
of Shares
Purchased (1)(2)
Average
Price Paid
per Share Total Number of
Shares Purchased as
Part of Publicly
Announced Program
Approximate
Dollar Value of Shares
that May Yet Be
Purchased Under
the Program (2)
(Billions of dollars)
July 1 – July 31, 2020 2,220 $ 87.58 — $19.5
August 1 – August 31, 2020 — — — $19.5
September 1 – September 30, 2020 — — — $19.5
Total 2,220 $ 87.58 —


Period	Total Number of Shares Purchased (1)(2)	Average Price Paid per Share	Total Number of Shares Purchased as Part of Publicly Announced Program	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (2) (Billions of dollars)
April 1 – April 30, 2021	2,509	$103.48	—	$19.5
May 1 – May 31, 2021	1,986	$106.19	—	$19.5
June 1 – June 30, 2021	2,098	$107.25	—	$19.5
Total	6,593	$105.50	—

(1)Includes common shares repurchased from participants in the company’s deferred compensation plans for personal income tax withholdings.

(2)Refer to “Liquidity and Capital Resources” on pages 3735 to 3937 for additional information regarding the company’s authorized stock repurchase program. The stock repurchase program was suspended in March ~~2020.~~2020 and will resume in third quarter 2021.

Item 5.Other Information

Rule 10b5-1 Plan Elections

~~Pierre R. Breber,~~James W. Johnson, Executive Vice President, ~~and Chief Financial Officer,~~Upstream, entered into a pre-arranged stock trading plan in ~~August 2020.~~May 2021. Mr. ~~Breber’s~~Johnson’s plan provides for the potential exercise of vested stock options and the associated sale of up to ~~13,000~~78,000 shares of Chevron common stock between ~~November 2020~~August 2021 and January ~~2021.~~2022.

~~Rhonda J. Morris,~~R. Hewitt Pate, Vice President and ~~Chief Human Resources Officer,~~General Counsel, entered into a pre-arranged stock trading plan in May 2021. Mr. Pate’s plan provides for the potential exercise of vested stock options and ~~her~~the associated sale of up to 391,450 shares of Chevron common stock between August 2021 and August 2022.

David A. Inchausti, Vice President and Controller, and his spouse each entered into pre-arranged stock trading plans in ~~August 2020.~~May 2021. The plans for ~~Ms. Morris~~Mr. Inchausti and ~~her~~his spouse provide for the potential exercise of vested stock options and the associated sale of up to ~~7,200~~5,600 and ~~7,500~~3,200 shares of Chevron common stock, respectively, between ~~November 2020~~August 2021 and January ~~2021.~~2022.

These trading plans were entered into during an open insider trading window and are intended to satisfy Rule 10b5-1(c) under the Securities Exchange Act of 1934, as amended, and Chevron’s policies regarding transactions in Chevron securities.

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Item 6.Exhibits


Exhibit Index
Exhibit Number						Description

~~3.1~~						By-Laws of Chevron Corporation, as amended and restated on September 30, 2020, filed as Exhibit 3.1 to Chevron Corporation's Current Report on Form 8-K filed October 2, 2020, and incorporated herein by reference.
~~4.1~~						Indenture, dated as of August 12, 2020, among Chevron U.S.A. Inc., Chevron Corporation, as guarantor, and Deutsche Bank Trust Company Americas, as trustee, filed as Exhibit 4.1 to Chevron Corporation's Current Report on Form 8-K filed August 13, 2020, and incorporated herein by reference.
~~4.2~~						First Supplemental Indenture, dated as of August 12, 2020, among Chevron U.S.A. Inc., Chevron Corporation, as guarantor, and Deutsche Bank Trust Company Americas, as trustee, filed as Exhibit 4.2 to Chevron Corporation's Current Report on Form 8-K filed August 13, 2020, and incorporated herein by reference.
~~4.3~~						Forms of 0.333% Notes Due 2022, Floating Rate Notes Due 2022, 0.426% Notes Due 2023, Floating Rate Notes Due 2023, 0.687% Notes Due 2025, 1.018% Notes Due 2027 and 2.343% Notes Due 2050, contained in Exhibit 4.2 to Chevron Corporation's Current Report on Form 8-K filed August 13, 2020, and incorporated herein by reference.
22.1*						~~Subsidiary Issuer of Guaranteed Securities~~
31.1*						Rule 13a-14(a)/15d-14(a) Certification by the company’s Chief Executive Officer
31.2*						Rule 13a-14(a)/15d-14(a) Certification by the company’s Chief Financial Officer
32.1**						Rule 13a-14(b)/15d-14(b) Certification by the company’s Chief Executive Officer
32.2**						Rule 13a-14(b)/15d-14(b) Certification by the company’s Chief Financial Officer

101.SCH*						iXBRL Schema Document
101.CAL*						iXBRL Calculation Linkbase Document
101.DEF*						iXBRL Definition Linkbase Document
101.LAB*						iXBRL Label Linkbase Document
101.PRE*						iXBRL Presentation Linkbase Document
104*						Cover Page Interactive Data File (contained in Exhibit 101)

Attached as Exhibit 101 to this report are documents formatted in iXBRL (Inline Extensible Business Reporting Language). The financial information contained in the iXBRL-related documents is “unaudited” or “unreviewed.”

*Filed herewith.

** Furnished ~~herewith~~

herewith.

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SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.


			CHEVRON CORPORATION (REGISTRANT)


			/S/ DAVID A. INCHAUSTI
			David A. Inchausti, Vice President and Controller (Principal Accounting Officer and Duly Authorized Officer)

Date: ~~November~~August 5, ~~2020~~2021

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	At September 30				At December 31
	2020		2019		2019		2018
	(Millions of dollars)
Cash and Cash Equivalents	$	6,866	$	11,697	$	5,686	$	9,342
Restricted cash included in “Prepaid expenses and other current assets”	169		370		452		341
Restricted cash included in “Deferred charges and other assets”	756		753		773		798
Total Cash, Cash Equivalents and Restricted Cash	$	7,791	$	12,820	$	6,911	$	10,481


	At September 30, 2020		At December 31, 2019
Current Ratio *	1.3		1.1
Debt Ratio	20.9	%	15.8	%
Net Debt Ratio	17.5	%	12.8	%