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 increased by $254 million primarily due to increased sales volumes of $1.2 billion, partly offset by higher depreciation, depletion and amortization of $520 million, higher operating expenses of $260 million, and lower liquids realizations of $160 million.

Net oil-equivalent production was up 388,000 barrels per day, or 24 percent. The increase was primarily due to the acquisition of Hess and higher production in the Gulf of America following project start‑ups, and growth in the Permian Basin.

International upstream earnings decreased by $103 million primarily due to unfavorable timing effects of $1.1 billion, higher depreciation, depletion and amortization of $410 million, and unfavorable foreign currency effects of $97 million that were partly offset by higher sales volumes of $1.4 billion.

Net oil-equivalent production was up 117,000 barrels per day, or 7 percent. The increase was primarily due to the acquisition of Hess, partly offset by lower production at TCO.

Downstream

U.S. downstream earnings increased by $93 million primarily due to higher margins on refined product sales of $330 million, partly offset by a higher litigation reserve of $190 million.

Refinery crude unit inputs were up 36,000 barrels per day, or 4 percent, primarily due to the continued ramp-up of the Light Tight Oil project at the Pasadena, Texas refinery.

Refined product sales were down 28,000 barrels per day, or 2 percent, compared to the year-ago period.

International downstream earnings decreased by $1.2 billion primarily due to lower margins on refined product sales of $1.1 billion, including unfavorable timing effects, and higher operating expenses of $140 million, mainly from higher transportation costs.

Refinery crude unit inputs were flat relative to the year-ago period.

Refined product sales were up 95,000 barrels per day, or 7 percent, from the year-ago period due to higher demand for gasoline.

All Other

Net charges increased by $299 million primarily due to the absence of prior-year favorable fair value adjustment on Hess shares and higher interest expense.

Consolidated Statement of Income

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

Sales and other operating revenues for first quarter 2026 increased mainly due to higher refined product prices, partially offset by the impact of mark-to-market losses on commodity derivative instruments.

Income from equity affiliates in first quarter 2026 decreased mainly due to lower upstream-related earnings from TCO in Kazakhstan and Angola LNG.

Other income for first quarter 2026 decreased primarily due to the absence of a favorable fair value adjustment for the investment in Hess common stock.

Purchased crude oil and products in first quarter 2026 were flat relatively to the year-ago period.

Operating, selling, general and administrative expenses for first quarter 2026 increased primarily due to the acquisition of Hess, higher transportation expense and downstream turnaround and repair expenses, partially offset by lower employee expenses.

Exploration expenses for first quarter 2026 increased primarily due to higher geological and geophysical engineering costs, partially offset by lower dry hole expenses.

Depreciation, depletion and amortization expenses for first quarter 2026 increased primarily due to higher production and higher rates.

Taxes other than on income for first quarter 2026 increased primarily due to higher property and other taxes in upstream, partially offset by lower excise taxes related to downstream activities.

Interest and debt expense for first quarter 2026 increased mainly due to a higher debt balance compared to last year, including the debt assumed from the Hess acquisition.

Other components of net periodic benefit costs for first quarter 2026 were lower mainly due to higher expected return on plan assets, partially offset by higher interest cost.

The company’s decrease in income tax expense for first quarter 2026 of $418 million was primarily due to the decrease in total income before tax of $1.6 billion.

U.S. income before tax remained consistent at $1.9 billion in first quarter 2025 and 2026. This was driven by higher upstream sales volumes and higher downstream margins being offset by higher depreciation, depletion and amortization, lower upstream realizations and higher operating expenses primarily driven by a legal reserve. The company’s U.S. income tax decreased $40 million between year-over-year periods, from $501 million in 2025 to $461 million in 2026.

International income before tax decreased from $3.7 billion in first quarter 2025 to $2.1 billion in first quarter 2026. This $1.7 billion decrease in income was primarily driven by lower upstream realizations and downstream margins including unfavorable timing effects, partially offset by higher upstream sales volumes. The company’s international income tax expense decreased $378 million between year-over-year periods, from $1.6 billion in 2025 to $1.2 billion in 2026, primarily due to the decrease in income partially offset by mix effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions.

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 $5.3 billion at March 31, 2026, and $6.3 billion at year-end 2025. 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 three months of 2026 was $2.5 billion, compared with $5.2 billion in the year-ago period, primarily reflecting higher working capital outflows. Capital expenditures totaled $4.1 billion in the first three months of 2026, in line with the year-ago period. Proceeds and deposits related to asset sales and returns of investment totaled $72 million in the first three months of 2026, compared to $600 million in the year-ago period. Net repayment (borrowing) of loans by equity affiliates included a net inflow of $979 million in the first three months of 2026 mainly due to a loan repayment from TCO, compared with an outflow of $66 million in the year-ago period.

Dividends The company paid dividends of $3.5 billion to common stockholders during the first three months of 2026. In April 2026, the company declared a quarterly dividend of $1.78 per common share, payable in June 2026.

Debt and Finance Lease Liabilities Chevron’s total debt and finance lease liabilities were $45.4 billion at March 31, 2026, up from $40.8 billion at December 31, 2025. The increase was primarily due to higher commercial paper balances partially offset by a finance lease maturity.

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 March 31, 2026, was $10.1 billion, compared with $4.6 billion at December 31, 2025. 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 $17.2 billion at March 31, 2026, and $10.9 billion at December 31, 2025. Of these amounts, $11.4 billion at March 31, 2026, and $9.9 billion at December 31, 2025, were reclassified to long-term debt. At March 31, 2026, 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 March 31, 2026, the company had $11.4 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 March 31, 2026. In addition, the company has an automatic shelf registration statement that expires in November 2027 for an unspecified amount of nonconvertible debt securities issued by Chevron Corporation or 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 bonds issued by Chevron Corporation, CUSA, Texaco Capital Inc., Noble Energy, Inc., and Hess Corporation. The securities that are the obligations of, or guaranteed by, Chevron Corporation carry an AA- rating by Standard and Poor’s Corporation (S&P) and an Aa2 rating 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, loan repayments from 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.

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 264.4 million shares for $41.0 billion under the 2023 Program, including 13.6 million shares repurchased for $2.5 billion in first quarter 2026. Chevron expects share repurchases in second quarter 2026 to be between $2.5-$3.0 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 $5.7 billion at both March 31, 2026, and December 31, 2025, including non-controlling interest in Hess Midstream LP.

Financial Ratios and Metrics

(1) At March 31, 2026, the book value of inventory was lower than replacement cost.

(2) Net Debt Ratio for March 31, 2026, is calculated as short-term debt of $5.8 billion plus long-term debt of $39.6 billion (together, “total debt”) less cash and cash equivalents, time deposits, and marketable securities of $5.3 billion as a percentage of total debt less cash and cash equivalents, time deposits, and marketable securities, plus Chevron Corporation Stockholders’ Equity of $183.7 billion. For the December 31, 2025, calculation, please refer to page 52 of Chevron’s 2025 Annual Report on Form 10-K.

(3) Net debt-to-CFFO for March 31, 2026, is calculated as short-term debt of $5.8 billion plus long-term debt of $39.6 billion (together, “total debt”) less cash and cash equivalents, time deposits, and marketable securities of $5.3 billion as a percentage of net cash provided by operating activities (CFFO) for the trailing 12 months of $31.3 billion. For the December 31, 2025, calculation, please refer to page 52 of Chevron’s 2025 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. Capex was $4.1 billion in the first three months of 2026, slightly higher than the $3.9 billion in the corresponding 2025 period. Legacy Hess asset spend was partially offset by lower spend in the Permian Basin.

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. First quarter 2026 affiliate capex was $202 million lower than first quarter 2025 due to lower spend at TCO and CP Chem.

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.”

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

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 headings “Decommissioning Obligations for Previously Sold Assets” and “Other Contingencies.”

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