Policy

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 two 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 project. Downstream operations consist primarily of 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 mining operations, power and energy services, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, alternative fuels, and technology companies.

The segments are separately managed for investment purposes under a structure that includes “segment managers” who report to the company’s “chief operating decision maker” (CODM). The CODM is the company’s Executive Committee (EXCOM), a committee of senior officers that includes the Chief Executive Officer, and EXCOM reports to the Board of Directors of Chevron Corporation.

The operating 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.

Segment managers for the reportable segments are directly accountable to and maintain regular contact with the company’s CODM to discuss the segment’s operating activities and financial performance. The CODM approves annual capital and exploratory budgets at the reportable segment level, as well as reviews capital and exploratory funding for major projects and approves major changes to the annual capital and

exploratory budgets. However, business-unit managers within the operating segments are directly responsible for decisions relating to project implementation and all other matters connected with daily operations. Company officers who are members of the EXCOM also have individual management responsibilities and participate in other committees for purposes other than acting as the CODM.

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).

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 are presented in the following table:



	Year ended December 31
	2013			2012			2011
Segment Earnings
Upstream
United States	$	4,044		$	5,332		$	6,512
International	16,765			18,456			18,274
Total Upstream	20,809			23,788			24,786
Downstream
United States	787			2,048			1,506
International	1,450			2,251			2,085
Total Downstream	2,237			4,299			3,591
Total Segment Earnings	23,046			28,087			28,377
All Other
Interest income	80			83			78
Other	(1,703		)	(1,991		)	(1,560		)
Net Income Attributable to Chevron Corporation	$	21,423		$	26,179		$	26,895

Segment Assets Segment assets do not include intercompany investments or intercompany receivables. Segment assets at year-end 2013 and 2012 are as follows:



	At December 31
	2013		2012
Upstream
United States	$	45,436	$	41,891
International	137,096		115,806
Goodwill	4,639		4,640
Total Upstream	187,171		162,337
Downstream
United States	23,829		23,023
International	20,268		20,024
Total Downstream	44,097		43,047
Total Segment Assets	231,268		205,384
All Other
United States	7,326		7,727
International	15,159		19,871
Total All Other	22,485		27,598
Total Assets – United States	76,591		72,641
Total Assets – International	172,523		155,701
Goodwill	4,639		4,640
Total Assets	$	253,753	$	232,982

Segment Sales and Other Operating Revenues Operating segment sales and other operating revenues, including internal transfers, for the years 2013, 2012 and 2011, are presented in the table that follows. 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 additives for fuels and lubricant oils and the transportation and trading of refined products, crude oil and natural gas liquids.



	Year ended December 31
	2013			2012			2011
Upstream
United States	$	8,052		$	6,416		$	9,623
Intersegment	16,865			17,229			18,115
Total United States	24,917			23,645			27,738
International	17,607			19,459			20,086
Intersegment	33,034			34,094			35,012
Total International	50,641			53,553			55,098
Total Upstream	75,558			77,198			82,836
Downstream
United States	80,272			83,043			86,793
Excise and similar taxes	4,792			4,665			4,199
Intersegment	39			49			86
Total United States	85,103			87,757			91,078
International	105,373			113,279			119,254
Excise and similar taxes	3,699			3,346			3,886
Intersegment	859			80			81
Total International	109,931			116,705			123,221
Total Downstream	195,034			204,462			214,299
All Other
United States	358			378			526
Intersegment	1,524			1,300			1,072
Total United States	1,882			1,678			1,598
International	3			4			4
Intersegment	31			48			42
Total International	34			52			46
Total All Other	1,916			1,730			1,644
Segment Sales and Other Operating Revenues
United States	111,902			113,080			120,414
International	160,606			170,310			178,365
Total Segment Sales and Other Operating Revenues	272,508			283,390			298,779
Elimination of intersegment sales	(52,352		)	(52,800		)	(54,408		)
Total Sales and Other Operating Revenues	$	220,156		$	230,590		$	244,371

Segment Income Taxes Segment income tax expense for the years 2013, 2012 and 2011 is as follows:



	Year ended December 31
	2013			2012			2011
Upstream
United States	$	2,333		$	2,820		$	3,701
International	12,470			16,554			16,743
Total Upstream	14,803			19,374			20,444
Downstream
United States	364			1,051			785
International	389			587			416
Total Downstream	753			1,638			1,201
All Other	(1,248		)	(1,016		)	(1,019		)
Total Income Tax Expense	$	14,308		$	19,996		$	20,626

Other Segment Information Additional information for the segmentation of major equity affiliates is contained in Note 12. Information related to properties, plant and equipment by segment is contained in Note 13, on page FS-39.

CHEVRON CORP | 2013 | FY |

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