CHEVRON CORP

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 7 Operating Segments and Geographic Data for a discussion of the company’s “reportable segments,” as defined under the accounting standards for segment reporting.)

Upstream

U.S. upstream earnings decreased by $128 million primarily due to lower realizations of $530 million, higher depreciation, depletion and amortization of $220 million, mainly from higher production, partly offset by higher sales volumes of $420 million and lower operating expenses of $110 million.

Net oil-equivalent production was up 198,000 barrels per day, or 14 percent, and set a new quarterly record. The increase was primarily due to record high production in the Permian Basin and the acquisition of PDC, partly offset by hurricane impacts in the U.S. Gulf of Mexico that reduced production by 17,000 barrels per day.

U.S. upstream earnings increased by $687 million primarily due to higher sales volumes of $2.2 billion, including from legacy PDC assets, partially offset by higher depreciation, depletion and amortization of $1.1 billion and lower realizations of $290 million.

Net oil-equivalent production was up 319,000 barrels per day, or 25 percent. The increase was primarily due to the acquisition of PDC and growth in the Permian and DJ Basins.

International upstream earnings decreased by $1.0 billion primarily due to the absence of prior year one-time favorable tax benefit in Nigeria of $560 million. Foreign currency effects had an unfavorable impact on earnings of $571 million between periods.

Net oil-equivalent production was up 20,000 barrels per day, or 1 percent. The increase was primarily due to entitlement effects.

International upstream earnings decreased by $2.2 billion primarily due to an unfavorable swing in tax effects of $800 million, lower sales volumes of $560 million and lower realizations of $270 million. Foreign currency effects had an unfavorable impact on earnings of $740 million between periods.

Net oil-equivalent production was down 13,000 barrels per day, or 1 percent. The decrease was primarily due to downtime in Nigeria and Australia, and exit from Myanmar, partly offset by entitlement effects.

Downstream

U.S. downstream earnings decreased by $1.2 billion primarily due to lower margins on refined product sales of $1.3 billion, partly offset by $180 million of higher earnings from the 50 percent-owned affiliate, CPChem.

Refinery crude unit inputs, including crude oil and other inputs, were up 15,000 barrels per day, or 2 percent, primarily due to absence of planned turnaround at the Richmond, California refinery, partly offset by hurricane impacts at the Pasadena, Texas refinery.

Refined product sales were up 9,000 barrels per day, or 1 percent.

U.S. downstream earnings decreased by $2.6 billion primarily due to lower margins on refined product sales of $2.3 billion and higher operating expenses of $490 million, partly offset by $200 million of higher earnings from CPChem.

Refinery crude unit inputs, including crude oil and other inputs, were down 40,000 barrels per day, or 4 percent, primarily due to downtime at the El Segundo, California and Pascagoula, Mississippi refineries, and hurricane impacts at the Pasadena, Texas refinery.

Refined product sales were up 13,000 barrels per day, or 1 percent.

International downstream earnings increased by $142 million primarily due to higher margins on refined product sales of $310 million, partly offset by higher operating expenses of $90 million. Foreign currency effects had an unfavorable impact on earnings of $79 million between periods.

Refinery crude unit inputs, including crude oil and other inputs, were down 9,000 barrels per day, or 1 percent, primarily due to higher planned turnarounds.

Refined product sales were up 76,000 barrels per day, or 5 percent, compared to the year-ago period primarily due to higher demand for gasoline and jet fuel.

International downstream earnings decreased by $460 million primarily due to lower margins on refined product sales of $300 million and higher operating expenses of $60 million. Foreign currency effects had an unfavorable impact on earnings of $46 million between periods.

Refinery crude unit inputs, including crude oil and other inputs, were up 6,000 barrels per day, or 1 percent.

Refined product sales were up 25,000 barrels per day, or 2 percent.

All Other

Net charges decreased by $215 million primarily due to the absence of prior year unfavorable foreign currency effects, partly offset by higher interest expense and lower interest income.

Net charges increased by $119 million primarily due to lower interest income and unfavorable tax items, partly offset by the absence of prior year unfavorable foreign currency effects.

Consolidated Statement of Income

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

Sales and other operating revenues for third quarter 2024 decreased mainly due to lower refined product and crude oil prices, partially offset by higher crude oil and refined product sales volumes. Sales and other operating revenues for the nine-month period 2024 also decreased as lower refined product and natural gas prices were partially offset by higher U.S. crude oil, natural gas and refined product sales volumes.

Income from equity affiliates in third quarter 2024 decreased mainly due to lower downstream-related earnings from GS Caltex in South Korea and upstream-related earnings from TCO, partially offset by higher downstream-related earnings from CPChem. Income from equity affiliates in the nine-month period 2024 decreased mainly due to lower downstream-related earnings from GS Caltex in South Korea and upstream-related earnings from Angola LNG, partially offset by higher downstream-related earnings from CPChem.

Other income for third quarter 2024 decreased primarily due to an unfavorable swing in foreign currency effects, partially offset by higher income from Venezuela non-equity investments. Other income for the nine-month period 2024 decreased mainly due to lower interest income and an unfavorable swing in foreign currency effects, partially offset by higher income from Venezuela non-equity investments.

Purchased crude oil and products decreased for third quarter 2024 primarily due to lower refined product and crude oil prices. Purchased crude oil and products decreased for the nine-month period 2024 as lower refined product prices and lower crude oil purchase volume were partially offset by higher refined product purchases.

Operating, selling, general and administrative expenses in third quarter 2024 increased mainly due to higher environmental reserve and transportation costs. The increase in Operating, selling, general and administrative expenses for the nine-month period 2024 primarily resulted from higher employee expenses, higher transportation costs and higher material and supply expenses.

Exploration expenses for the third quarter and nine-month period 2024 decreased primarily due to lower charges for well write-offs.

Depreciation, depletion and amortization expenses for the third quarter and nine-month period 2024 increased primarily due to higher production volumes and higher rates.

Taxes other than on income for the third quarter andnine-month period 2024 increased primarily due to higher property and excise taxes.

Interest and debt expenses for thethird quarterand nine-month period 2024 increased mainly due to higher debt balance compared to last year.

Other components of net periodic benefit costs for the third quarter and nine-month period 2024 were lower mainly due to the absence of third quarter 2023 pension settlement charges.

The company’s decrease in income tax expense for third quarter 2024 of $190 million was primarily due to the decrease in total income before tax of $2.2 billion, partially offset by the absence of prior period favorable tax items.

U.S. income before tax decreased from $3.5 billion in third quarter 2023 to $1.8 billion in third quarter 2024. This $1.6 billion decrease in income was primarily driven by lower downstream margins, lower upstream realizations, partially offset by higher upstream sales volumes. The decrease in income had a direct impact on the company’s U.S. income tax, resulting in a decrease in income tax expense of $498 million between year-over-year periods, from $1.0 billion in 2023 to $460 million in 2024.

International income before tax decreased from $5.3 billion in third quarter 2023 to $4.7 billion in third quarter 2024. This $616 million decrease in income was primarily driven by unfavorable foreign currency effects and higher operating expenses, partially offset by higher downstream margins. The company’s international income tax expense increased $308 million between year-over-year periods, from $1.2 billion in 2023 to $1.5 billion in 2024, primarily due to the absence of prior period favorable tax items.

The company’s income tax expense increased in the first nine months of 2024 by $31 million while total income before income tax decreased $4.6 billion, primarily due to the absence of prior period favorable tax items and current period unfavorable tax items.

U.S. income before income tax decreased between the nine-month periods, from $9.4 billion in 2023 to $6.9 billion in 2024. This $2.5 billion decrease in income was primarily driven by lower downstream margins, higher depreciation, depletion and amortization, and higher operating expenses, partially offset by higher upstream sales volumes. The decrease in income had a direct impact on the company’s U.S. income tax, resulting in a decrease in income tax expense of $575 million between the nine-month periods, from $2.3 billion in 2023 to $1.8 billion in 2024.

International income before income tax decreased for the nine-month period, from $16.7 billion in 2023 to $14.5 billion in 2024. This $2.1 billion decrease in income was primarily due to lower upstream sales volumes, unfavorable foreign currency effects, higher operating expenses, lower downstream margins and lower upstream realizations. International income tax expense increased $606 million between year-over-year periods, from $4.6 billion in 2023 to to $5.2 billion in 2024, primarily due to the absence of prior period favorable tax items and current period unfavorable tax items.

Additional information related to the company’s effective income tax rate is included in Note 10 Income Taxes to the Consolidated Financial Statements.

Selected Operating Data

The following table presents a comparison of selected operating data:

Liquidity and Capital Resources

Cash, cash equivalents and marketable securities totaled $4.7 billion at September 30, 2024, and $8.2 billion at year-end 2023. The company holds its cash with a diverse group of major financial institutions and has processes and safeguards in place to manage its cash balances and mitigate the risk of loss. Cash provided by operating activities in the first nine months of 2024 was $22.8 billion, compared with $23.2 billion in the year-ago period. Capital expenditures totaled $12.1 billion in the first nine months of 2024, up $642 million from the year-ago period largely due to higher investments in upstream, including post-acquisition spend on legacy PDC assets. Proceeds and deposits related to asset sales and returns of investment totaled $620 million in the first nine months of 2024, compared to $410 million in the year-ago period. Cash provided by financing activities includes proceeds from shares issued for stock option exercises of $194 million in the first nine months of 2024, compared with $237 million in the year-ago period.

Dividends The company paid dividends of $8.9 billion to common stockholders during the first nine months of 2024. In October 2024, the company declared a quarterly dividend of $1.63 per common share, payable in December 2024.

Debt and Finance Lease Liabilities Chevron’s total debt and finance lease liabilities were $25.8 billion at September 30, 2024, up from $20.8 billion at December 31, 2023, as the company issued commercial paper and tax-exempt bonds, and retired a bond that matured during the period.

The company’s primary source for working capital needs is its commercial paper program. The outstanding balance for the company’s commercial paper program at September 30, 2024, was $6.0 billion, and there was no commercial paper outstanding at December 31, 2023. The company’s debt and finance lease liabilities due within one year, consisting primarily of commercial paper, the current portion of long-term debt and redeemable long-term obligations, totaled $13.2 billion at September 30, 2024, and $5.1 billion at December 31, 2023. Of these amounts, $8.1 billion was reclassified to long-term at September 30, 2024, and $4.5 billion was reclassified to long-term at December 31, 2023. At September 30, 2024, 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 continually refinance them.

At September 30, 2024, the company had $8.1 billion in 364-day committed credit facilities with various major banks that enable the refinancing of short-term obligations. The credit facilities allow the company the option to convert outstanding short-term obligations into a term loan for a period of up to one year from the facilities termination date. This supports commercial paper borrowing and can also be used for general corporate purposes. The company’s practice has been to 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 Secured Overnight Financing Rate (SOFR), 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 30, 2024.

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 bonds issued by Chevron Corporation, CUSA, Texaco Capital Inc. and Noble Energy, Inc. Most of these securities are the obligations of, or guaranteed by, Chevron Corporation and are rated AA- 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.

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

Summarized Financial Information for Guarantee of Securities of Subsidiaries CUSA issued bonds that are fully and unconditionally guaranteed on an unsecured basis by Chevron Corporation (together, the “Obligor Group”). The tables below contain summary financial information 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. In the nine months ended September 30, 2024, the Obligor Group recognized an increase in “Net income (loss)” and reduction in “Current liability- related party” and “Total net equity (deficit)” following the resolution of outstanding balances with subsidiaries outside of the Obligor Group.

Common Stock Repurchase Program On January 25, 2023, the Board of Directors authorized the repurchase of the company’s shares of common stock in an aggregate amount of $75 billion (the “2023 Program”). The 2023 Program took effect on April 1, 2023, and does not have a fixed expiration date. In the aggregate, the company has repurchased 141.4 million shares for $21.9 billion under the 2023 Program, including 32.2 million shares repurchased for $4.7 billion in third quarter 2024. Chevron expects share repurchases in the fourth quarter 2024 to be between $4.0-$4.75 billion.

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 and any forward guidance as to expected repurchases do not obligate the company to acquire any particular amount of common stock, and the program may be discontinued or resumed at any time.

Noncontrolling Interests The company had noncontrolling interests of $828 million at September 30, 2024, and $972 million at December 31, 2023. Included within noncontrolling interests is $166 million at December 31, 2023, of redeemable noncontrolling interest.

Financial Ratios and Metrics

(1) At September 30, 2024, the book value of inventory was lower than replacement cost.

(2) Net Debt Ratio for September 30, 2024 is calculated as short-term debt of $5.1 billion plus long-term debt of $20.7 billion (together, “total debt”) less cash and cash equivalents, time deposits and marketable securities of $4.7 billion as a percentage of total debt less cash and cash equivalents, time deposits and marketable securities, plus Chevron Corporation Stockholders’ Equity of $156.2 billion. For the December 31, 2023 calculation, please refer to page 51 of Chevron’s 2023 Annual Report on Form 10-K.

Pension Obligations Information related to pension plan contributions is included in Note 8 Employee Benefits to the Consolidated Financial Statements.

Capital Expenditures The company’s capital expenditures (capex) primarily includes additions to fixed assets or investments for the company’s consolidated subsidiaries and is disclosed in the Consolidated Statement of Cash Flows. Third quarter 2024 capex was $618 million lower than third quarter 2023 largely due to the absence of the acquisition of a majority stake in ACES Delta, LLC and year-to-date 2024 capex was $642 million higher than the year-ago period due to higher investments in upstream, including post-acquisition spend on legacy PDC assets.

Affiliate Capital Expenditures The company’s affiliate capital expenditures (affiliate capex) primarily includes additions to fixed assets or investments in the equity affiliate’s financial statements and does not require cash outlays by the company. Third quarter 2024 affiliate capex was $274 million lower than third quarter 2023 and year-to-date 2024 affiliate capex was $870 million lower than the year-ago period.

Contingencies and Significant Litigation

Climate Change Information related to climate change-related matters is included in Note 11 Litigation under the heading “Climate Change.”

Louisiana Information related to Louisiana coastal matters is included in Note 11 Litigation under the heading “Louisiana.”

Income Taxes Information related to income tax contingencies is included in Note 10 Income Taxes and in Note 12 Other Contingencies and Commitments under the heading “Income Taxes.”

Guarantees Information related to the company’s guarantees is included in Note 12 Other Contingencies and Commitments under the heading “Guarantees.”

Indemnifications Information related to indemnifications is included in Note 12 Other Contingencies and Commitments under the heading “Indemnifications.”

Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements Information related to the company’s long-term unconditional purchase obligations and commitments is included in Note 12 Other Contingencies and Commitments under the heading “Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements.”

Environmental Information related to environmental matters is included in Note 12 Other Contingencies and Commitments under the heading “Environmental.”

Acquisition and Disposition of Assets Information related to the company’s acquisition and disposition of assets is included in Note 12 Other Contingencies and Commitments under the heading “Acquisition and Disposition of Assets.”

Other Contingencies Information related to the company’s other contingencies is included in Note 12 Other Contingencies and Commitments under the heading “Other Contingencies.”