CHEVRON CORP

Comparative amounts for certain income statement categories are shown below. A discussion of variances between 2022 and 2021 can be found in the “Consolidated Statement of Income” section on pages 41 and 42 of the company’s 2022 Annual Report on Form 10-K.

Sales and other operating revenues decreased in 2023 mainly due to lower commodity prices, partially offset by higher refined product sales volumes.

Income from equity affiliates decreased in 2023 mainly due to lower upstream-related earnings from Tengizchevroil in Kazakhstan and Angola LNG and lower downstream-related earnings from GS Caltex in Korea and CPChem. Refer to Note 15 Investments and Advances for a discussion of Chevron’s investments in affiliated companies.

Other income decreased in 2023 mainly due to charges related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico, an unfavorable swing in foreign currency effects and lower gains on asset sales, partially offset by income from Venezuela non-equity investments and higher interest income.

Crude oil and product purchases decreased in 2023 primarily due to lower commodity prices.

Operating, selling, general and administrative expenses were relatively unchanged compared to last year. Higher transportation and materials and supplies expenses were offset by lower employee benefit costs and the absence of early contract termination fees at Sabine Pass in 2022.

Exploration expenses in 2023 decreased primarily due to lower charges for well write-offs.

Depreciation, depletion and amortization expenses increased in 2023 primarily due to higher impairment charges and higher production, partially offset by lower rates.

Taxes other than on income increased in 2023 primarily due to higher excise taxes.

Interest and debt expenses decreased in 2023 mainly due to higher capitalized interest and lower debt balances.

Other components of net periodic benefit costs decreased in 2023 primarily due to lower pension settlement costs as fewer lump-sum pension distributions were made in the current year, partially offset by the impact of higher interest rates.

The decrease in income tax expense in 2023 of $5.9 billion is due to the decrease in total income before tax for the company of $20.1 billion. The decrease in income before taxes for the company is primarily the result of lower upstream realizations and downstream margins.

U.S. income before tax decreased from $21.0 billion in 2022 to $8.6 billion in 2023. This $12.4 billion decrease in income was primarily driven by lower upstream realizations and downstream margins, charges related to abandonment and decommissioning obligations, and higher impairment charges, partially offset by higher sales volumes. The decrease in income had a direct impact on the company’s U.S. income tax resulting in a decrease to tax expense of $2.7 billion between year-over-year periods, from $4.5 billion in 2022 to $1.8 billion in 2023.

International income before tax decreased from $28.7 billion in 2022 to $21.0 billion in 2023. This $7.7 billion decrease in income was primarily driven by lower upstream realizations, partly offset by the absence of a 2022 write-off and impairment charges. The decrease in income primarily drove the $3.2 billion decrease in international income tax expense between year-over-year periods, from $9.6 billion in 2022 to $6.4 billion in 2023.

Refer also to the discussion of the effective income tax rate in Note 17 Taxes.