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 $2.1 billion primarily due to higher liquids realizations of $2.1 billion and increased sales volumes of $1.1 billion, partly offset by higher depreciation, depletion and amortization of $590 million, lower natural gas realizations of $200 million and the absence of a prior year asset sale gain of $115 million.

Net oil-equivalent production was up 382,000 barrels per day, or 23 percent, achieving a new quarterly production record. The increase was primarily due to the acquisition of Hess and growth in the Permian Basin and Gulf of America.

U.S. upstream earnings increased by $2.4 billion primarily due to increased sales volumes of $2.3 billion and higher liquids realizations of $2.0 billion, partly offset by higher depreciation, depletion and amortization of $1.1 billion, higher operating expenses and other costs of $470 million, lower natural gas realizations of $200 million and the absence of a prior year asset sale gain of $115 million.

Net oil-equivalent production was up 385,000 barrels per day, or 23 percent. The increase was primarily due to the acquisition of Hess, higher production in the Gulf of America following project start‑ups, and growth in the Permian Basin.

International upstream earnings increased by $3.3 billion primarily due to increased sales volumes of $2.0 billion, higher liquids realizations of $1.7 billion, and favorable timing effects of $570 million partly offset by higher depreciation, depletion and amortization of $650 million.

Net oil-equivalent production was up 292,000 barrels per day, or 17 percent. The increase was primarily due to the acquisition of Hess, partly offset by curtailments in the Partitioned Zone between Saudi Arabia and Kuwait due to the Middle East conflict.

International upstream earnings increased by $3.2 billion primarily due to increased sales volumes of $3.4 billion and higher liquids realizations of $1.9 billion, partly offset by higher depreciation, depletion and amortization of $1.3 billion and unfavorable timing effects of $650 million.

Net oil-equivalent production was up 206,000 barrels per day, or 12 percent. The increase was primarily due to the acquisition of Hess, partly offset by lower production at TCO and curtailments in the Partitioned Zone between Saudi Arabia and Kuwait due to the Middle East conflict.

Downstream

U.S. downstream earnings increased by $2.0 billion primarily due to higher margins on refined product sales of $1.7 billion and higher earnings from the 50 percent-owned affiliate, CPChem, of $290 million.

Refinery crude unit inputs were up 19,000 barrels per day, or 2 percent, compared to the year-ago period as refineries operated reliably at record levels near capacity.

Refined product sales were down 61,000 barrels per day, or 4 percent, compared to the year-ago period due to a lower demand for gasoline.

U.S. downstream earnings increased by $2.1 billion primarily due to higher margins on refined product sales of $2.0 billion and higher earnings from the 50 percent-owned affiliate, CPChem, of $290 million, partly offset by a litigation reserve of $190 million.

Refinery crude unit inputs were up 29,000 barrels per day, or 3 percent, compared to the year-ago period as refineries operated reliably at near capacity levels.

Refined product sales were down 44,000 barrels per day, or 3 percent, compared to the year-ago period primarily due to lower demand for gasoline.

International downstream earnings increased by $2.1 billion primarily due to higher margins on refined product sales of $1.7 billion, including favorable timing effects, an asset sale gain of $230 million, and a favorable swing in foreign currency effects of $133 million.

Refinery crude unit inputs were down 63,000 barrels per day, or 10 percent, compared to the year-ago period due to supply disruptions from the Middle East conflict.

Refined product sales were down 186,000 barrels per day, or 13 percent, compared to the year-ago period due to supply disruption from the Middle East conflict and lower demand for gasoline and diesel fuel.

International downstream earnings increased by $889 million primarily due to higher margins on refined product sales of $610 million and an asset sale gain of $230 million.

Refinery crude unit inputs were down 32,000 barrels per day, or 5 percent, compared to the year-ago period primarily due to a turnaround at the Star Petroleum Refining Public Company Limited refinery in Thailand.

Refined product sales were down 47,000 barrels per day, or 3 percent, compared to the year-ago period due to supply disruption from the Middle East conflict.

All Other

Net charges were relatively flat compared to the year-ago period as higher employee benefit costs and higher interest expense were offset by the absence of prior-year unfavorable fair value adjustment for Hess shares.

Net charges increased by $303 million primarily due to 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 increased $22.8 billion for the second quarter mainly due to higher refined product and crude oil prices and higher crude oil sales volumes, partially offset by lower refined product volumes. Sales and other operating revenues for the six-month periods increased $24.3 billion primarily due to higher refined product and crude oil prices and higher crude oil sales volumes.

Income from equity affiliates in second quarter and for the six-month periods increased mainly due to higher upstream-related earnings from TCO in Kazakhstan and higher downstream-related earnings primarily due to higher chemicals margins at CPChem and higher refining margins at GS Caltex in South Korea.

Other income for second quarter and for the six-month periods increased primarily due to the absence of a prior year unfavorable fair value adjustment for Hess shares and foreign currency effects.

Purchased crude oil and products increased $9.7 billion for the second quarter and $9.4 billion for the six-month periods, primarily reflecting the impact of higher crude oil and refined product prices.

Operating, selling, general and administrative expenses for second quarter and for the six-month periods increased primarily due to the acquisition of Hess and higher transportation costs, partially offset by lower employee expenses.

Exploration expenses in the second quarter increased primarily due to higher geological and geophysical engineering costs. Exploration expenses for the six-month periods increased primarily due to higher geological and geophysical engineering costs, partially offset by lower dry hole expenses.

Depreciation, depletion and amortization expenses in second quarter and for thesix-month periods increased primarily due to higher production, including from legacy Hess assets, and higher rates.

Taxes other than on income for second quarter and for thesix-month periods decreased primarily due to lower excise taxes related to downstream activities.

Interest and debt expenses in second quarter and for the six-month periods increased mainly due to higher debt balances compared to last year, including the debt assumed from the Hess acquisition.

Other components of net periodic benefit costs for the second quarter increased mainly due to pension settlement losses, partially offset by higher expected returns on plan assets. Other components of net periodic benefit costs for the six-month periods were lower mainly due to higher expected return on plan assets, partially offset by pension settlement losses.

The company’s increase in income tax expense for second quarter 2026 of $2.8 billion was primarily due to the increase in total income before tax of $12.5 billion.

U.S. income before tax increased from $1.1 billion in second quarter 2025 to $6.4 billion in second quarter 2026. This was driven by higher upstream liquids realizations, higher upstream sales volumes and higher downstream margins on refined product sales partly offset by higher depreciation, depletion and amortization. The company’s U.S. income tax increased $1.1 billion between year-over-year periods, from $300 million in 2025 to $1.4 billion in 2026 primarily due to the increase in income.

International income before tax increased from $3.0 billion in second quarter 2025 to $10.3 billion in second quarter 2026. This $7.3 billion increase in income was primarily driven by increased upstream sales volumes, higher upstream liquids realizations, higher margins on refined product sales and favorable timing effects partly offset by higher depreciation, depletion and amortization. The company’s international income tax expense increased $1.7 billion between year-over-year periods, from $1.3 billion in 2025 to $3.1 billion in 2026, primarily due to the increase 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.

The company’s increase in income tax expense for the first six-months of 2026 of $2.4 billion was primarily due to the increase in the total before-tax income in 2026 of $10.9 billion.

U.S. income before tax increased between the six-month periods, from $3.0 billion in 2025 to $8.2 billion in 2026. This increase in income was primarily driven by increased upstream sales volumes, higher upstream liquids realizations, and higher margins on refined product sales partly offset by higher depreciation, depletion and amortization. The increase in income had a direct impact on the company’s U.S. income tax, resulting in an increase in tax expense of $1.1 billion between the six-month periods, from $801 million in 2025 to $1.9 billion in 2026.

International income before tax increased for the six-month periods from $6.7 billion in 2025 to $12.4 billion in 2026. This increase in income was primarily driven by increased upstream sales volumes, higher upstream liquids realizations, and higher margins on refined product sales, partly offset by higher depreciation, depletion and amortization and unfavorable timing effects. The increase in income partly offset by mix effects, resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions, primarily drove the $1.3 billion increase in international income tax expense between year-over-year periods, from $2.9 billion in 2025 to $4.2 billion in 2026.

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 $8.5 billion at June 30, 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 six months of 2026 was $25.1 billion, compared with $13.8 billion in the year-ago period, primarily reflecting higher commodity prices and increased cash distributions from TCO. Capital expenditures totaled $8.6 billion in the first six months of 2026, compared with $7.6 billion in the year-ago period. Proceeds and deposits related to asset sales and returns of investment totaled $355 million in the first six months of 2026, compared to $990 million in the year-ago period. Net repayment (borrowing) of loans by equity affiliates included a net inflow of $979 million in the first six months of 2026 mainly due to a loan repayment from TCO, compared with an outflow of $176 million in the year-ago period.

Dividends The company paid dividends of $7.0 billion to common stockholders during the first six months of 2026. In July 2026, the company declared a quarterly dividend of $1.78 per common share, payable in September 2026.

Debt and Finance Lease Liabilities Chevron’s total debt and finance lease liabilities were $37.1 billion at June 30, 2026, down from $40.8 billion at December 31, 2025. The decrease was primarily due to maturing long-term notes, a finance lease repayment, and lower commercial paper balances.

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 June 30, 2026, was $4.1 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 $11.3 billion at June 30, 2026, and $10.9 billion at December 31, 2025. Of these amounts, $10.9 billion at June 30, 2026, and $9.9 billion at December 31, 2025, were reclassified to long-term debt. At June 30, 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 June 30, 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 June 30, 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 281 million shares for $44.0 billion under the 2023 Program, including 16.2 million shares repurchased for $3.0 billion in second quarter 2026. Chevron expects share repurchases in third 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 June 30, 2026, and December 31, 2025, including non-controlling interest in Hess Midstream LP.

Financial Ratios and Metrics

(1) At June 30, 2026, the book value of inventory was lower than replacement cost.

(2) Net Debt Ratio for June 30, 2026, is calculated as short-term debt of $0.4 billion plus long-term debt of $36.7 billion (together, “total debt”) less cash and cash equivalents, time deposits, and marketable securities of $8.5 billion as a percentage of total debt less cash and cash equivalents, time deposits, and marketable securities, plus Chevron Corporation Stockholders’ Equity of $189.9 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 June 30, 2026, is calculated as short-term debt of $0.4 billion plus long-term debt of $36.7 billion (together, “total debt”) less cash and cash equivalents, time deposits, and marketable securities of $8.5 billion as a percentage of net cash provided by operating activities (CFFO) for the trailing 12 months of $45.3 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 in the first six months of 2026 was $962 million higher than the prior year primarily due to spend associated with legacy Hess assets, 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. Affiliate capex in the first six months of 2026 was $372 million lower than the prior year primarily due to lower spend at CPChem and TCO.

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.”