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UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2021
or
    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 001-00368
Chevron Corporation
(Exact name of registrant as specified in its charter)
6001 Bollinger Canyon Road
Delaware 94-0890210 San Ramon, California 94583-2324
(State or other jurisdiction of
incorporation or organization)
(I.R.S. Employer
Identification No.)
(Address of principal executive offices)
(Zip Code)
Registrant’s telephone number, including area code: (925) 842-1000
NONE
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class Trading Symbol Name of each exchange on which registered
Common stock, par value $.75 per share CVX New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes          No  
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).    Yes          No  
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer Accelerated filer
Non-accelerated filer Smaller reporting company
Emerging growth company
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes         No  

There were 1,928,052,179 shares of the Company’s common stock outstanding on March 31, 2021.


TABLE OF CONTENTS
 
  Page No.
2
FINANCIAL INFORMATION
3
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6
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8
OTHER INFORMATION
1

CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION
FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995
This quarterly report on Form 10-Q of Chevron Corporation contains forward-looking statements relating to Chevron’s operations that are based on management's current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential” and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this report. Unless legally required, Chevron undertakes no obligation to update publicly any forward-looking statements, whether as a result of new information, future events or otherwise.
Among the important factors that could cause actual results to differ materially from those in the forward-looking statements are: changing crude oil and natural gas prices and demand for our products, and production curtailments due to market conditions; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries (OPEC) and other producing countries; public health crises, such as pandemics (including coronavirus (COVID-19)) and epidemics, and any related government policies and actions; changing economic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic and political conditions; changing refining, marketing and chemicals margins; the company’s ability to realize anticipated cost savings, expenditure reductions and efficiencies associated with enterprise transformation initiatives; actions of competitors or regulators; timing of exploration expenses; timing of crude oil liftings; the competitiveness of alternate-energy sources or product substitutes; technological developments; the results of operations and financial condition of the company’s suppliers, vendors, partners and equity affiliates, particularly during extended periods of low prices for crude oil and natural gas during the COVID-19 pandemic; the inability or failure of the company’s joint-venture partners to fund their share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gas development projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’s operations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond the company’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significant operational, investment or product changes required by existing or future environmental statutes and regulations, including international agreements and national or regional legislation and regulatory measures to limit or reduce greenhouse gas emissions; the potential liability resulting from pending or future litigation; the company’s ability to achieve the anticipated benefits from the acquisition of Noble Energy, Inc.; the company’s future acquisitions or dispositions of assets or shares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions or impairments; government mandated sales, divestitures, recapitalizations, industry-specific taxes, tariffs, sanctions, changes in fiscal terms or restrictions on scope of company operations; foreign currency movements compared with the U.S. dollar; material reductions in corporate liquidity and access to debt markets; the receipt of required Board authorizations to pay future dividends; the effects of changed accounting rules under generally accepted accounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the global energy industry; and the factors set forth under the heading “Risk Factors” on pages 18 through 23 of the company’s 2020 Annual Report on Form 10-K and in subsequent filings with the U.S. Securities and Exchange Commission. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements.
2

PART I.
FINANCIAL INFORMATION
 
Item 1.Consolidated Financial Statements
CHEVRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME
(Unaudited)
 
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars, except per-share amounts)
Revenues and Other Income
Sales and other operating revenues $ 31,076  $ 29,705 
Income (loss) from equity affiliates 911  965 
Other income (loss) 42  831 
Total Revenues and Other Income 32,029  31,501 
Costs and Other Deductions
Purchased crude oil and products 17,568  15,509 
Operating expenses 4,967  5,291 
Selling, general and administrative expenses 990  683 
Exploration expenses 86  158 
Depreciation, depletion and amortization 4,286  4,288 
Taxes other than on income 1,420  1,167 
Interest and debt expense 198  162 
Other components of net periodic benefit costs 337  98 
Total Costs and Other Deductions 29,852  27,356 
Income (Loss) Before Income Tax Expense 2,177  4,145 
Income Tax Expense (Benefit) 779  564 
Net Income (Loss) 1,398  3,581 
Less: Net income (loss) attributable to noncontrolling interests 21  (18)
Net Income (Loss) Attributable to Chevron Corporation $ 1,377  $ 3,599 
Per Share of Common Stock
Net Income (Loss) Attributable to Chevron Corporation
- Basic $ 0.72  $ 1.93 
- Diluted $ 0.72  $ 1.93 
Weighted Average Number of Shares Outstanding (000s)
- Basic 1,912,925  1,862,273 
- Diluted 1,915,889  1,865,649 
See accompanying notes to consolidated financial statements.

3


CHEVRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)
Three Months Ended
March 31
  2021 2020
(Millions of dollars)
Net Income (Loss) $ 1,398  $ 3,581 
Currency translation adjustment (19) (19)
Unrealized holding gain (loss) on securities
Net gain (loss) arising during period (3) (3)
Defined benefit plans
Actuarial gain (loss)
Amortization to net income of net actuarial loss and settlements 435  166 
Actuarial gain (loss) arising during period 907  — 
Prior service credits (cost)
Amortization to net income of net prior service costs and curtailments (4) (3)
  Prior service (costs) credits arising during period   — 
Defined benefit plans sponsored by equity affiliates - benefit (cost) 11 
   Income (taxes) benefit on defined benefit plans (301) (37)
   Total 1,048  128 
Other Comprehensive Gain (Loss), Net of Tax 1,026  106 
Comprehensive Income (Loss) 2,424  3,687 
Comprehensive loss (income) attributable to noncontrolling interests (21) 18 
Comprehensive Income (Loss) Attributable to Chevron Corporation $ 2,403  $ 3,705 

See accompanying notes to consolidated financial statements.

4


CHEVRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
At March 31,
2021
At December 31,
2020
(Millions of dollars)
Assets
Cash and cash equivalents $ 7,076  $ 5,596 
Marketable securities 32  31 
Accounts and notes receivable (less allowance: 2021 - $297; 2020 - $284)
14,118  11,471 
Inventories:
Crude oil and petroleum products 3,535  3,576 
Chemicals 448  457 
Materials, supplies and other 1,637  1,643 
Total inventories 5,620  5,676 
Prepaid expenses and other current assets 3,587  3,304 
Total Current Assets 30,433  26,078 
Long-term receivables (less allowance: 2021 - $404; 2020 - $387)
571  589 
Investments and advances 39,591  39,052 
Properties, plant and equipment, at cost 346,228  345,232 
Less: Accumulated depreciation, depletion and amortization 192,225  188,614 
Properties, plant and equipment, net 154,003  156,618 
Deferred charges and other assets 11,530  11,950 
Goodwill 4,402  4,402 
Assets held for sale 1,115  1,101 
Total Assets $ 241,645  $ 239,790 
Liabilities and Equity
Short-term debt
$ 4,841  $ 1,548 
Accounts payable 12,858  10,950 
Accrued liabilities 7,557  7,812 
Federal and other taxes on income 1,315  921 
Other taxes payable 909  952 
Total Current Liabilities 27,480  22,183 
Long-term debt 40,599  42,767 
Deferred credits and other noncurrent obligations 20,139  20,328 
Noncurrent deferred income taxes 12,474  12,569 
Noncurrent employee benefit plans 8,020  9,217 
Total Liabilities*
$ 108,712  $ 107,064 
Preferred stock (authorized 100,000,000 shares; $1.00 par value; none issued)
  — 
Common stock (authorized 6,000,000,000 shares, $0.75 par value; 2,442,676,580 shares issued at March 31, 2021 and December 31, 2020)
1,832  1,832 
Capital in excess of par value 16,866  16,829 
Retained earnings 159,285  160,377 
Accumulated other comprehensive losses (4,586) (5,612)
Deferred compensation and benefit plan trust (240) (240)
Treasury stock, at cost (514,624,401 and 517,490,263 shares at March 31, 2021 and December 31, 2020, respectively)
(41,269) (41,498)
Total Chevron Corporation Stockholders’ Equity 131,888  131,688 
Noncontrolling interests (redeemable noncontrolling interest of $123 and $120 at March 31, 2021 and December 31, 2020, respectively)
1,045  1,038 
Total Equity 132,933  132,726 
Total Liabilities and Equity $ 241,645  $ 239,790 
___________________________
* Refer to Note 12, Other Contingencies and Commitments beginning on page 17.

See accompanying notes to consolidated financial statements.

5


CHEVRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(Unaudited)
Three Months Ended
March 31
  2021 2020
(Millions of dollars)
Operating Activities
Net Income (Loss) $ 1,398  $ 3,581 
Adjustments
Depreciation, depletion and amortization 4,286  4,288 
Dry hole expense 4  50 
Distributions more (less) than income from equity affiliates (491) (639)
Net before-tax losses (gains) on asset retirements and sales (56) (226)
Net foreign currency effects 111  (403)
Deferred income tax provision (254) 58 
Net decrease (increase) in operating working capital (902) (1,096)
Decrease (increase) in long-term receivables 15  239 
Net decrease (increase) in other deferred charges (31) (43)
Cash contributions to employee pension plans (331) (213)
Other 447  (874)
Net Cash Provided by Operating Activities 4,196  4,722 
Investing Activities
Capital expenditures (1,746) (3,133)
Proceeds and deposits related to asset sales and returns of investment 158  374 
Net sales (purchases) of marketable securities   — 
Net repayment (borrowing) of loans by equity affiliates 25  (399)
Net Cash Used for Investing Activities (1,563) (3,158)
Financing Activities
Net borrowings (repayments) of short-term obligations 1,237  8,167 
Proceeds from issuances of long-term debt   — 
Repayments of long-term debt and other financing obligations (78) (2,809)
Cash dividends - common stock (2,468) (2,402)
Distributions to noncontrolling interests (11) (5)
Net sales (purchases) of treasury shares 267  (1,573)
Net Cash Provided by (Used for) Financing Activities (1,053) 1,378 
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash (53) (163)
Net Change in Cash, Cash Equivalents and Restricted Cash 1,527  2,779 
Cash, Cash Equivalents and Restricted Cash at January 1 6,737  6,911 
Cash, Cash Equivalents and Restricted Cash at March 31
$ 8,264  $ 9,690 

See accompanying notes to consolidated financial statements.

6


CHEVRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF EQUITY
(Unaudited)
(Millions of dollars) Accumulated Treasury Chevron Corp. Non-
Common Retained Other Comp. Stock Stockholders’ Controlling Total
Three Months Ended March 31
Stock(1)
Earnings Income (Loss) (at cost) Equity Interests Equity
Balance at December 31, 2019 $ 18,857  $ 174,945  $ (4,990) $ (44,599) $ 144,213  $ 995  $ 145,208 
Treasury stock transactions 10  —  —  —  10  —  10 
Net income (loss) —  3,599  —  —  3,599  (18) 3,581 
Cash dividends —  (2,402) —  —  (2,402) (5) (2,407)
Stock dividends —  (1) —  —  (1) —  (1)
Other comprehensive income —  —  106  —  106  —  106 
Purchases of treasury shares —  —  —  (1,751) (1,751) —  (1,751)
Issuances of treasury shares —  —  —  184  184  —  184 
Other changes, net —  (28) —  —  (28) 12  (16)
Balance at March 31, 2020 $ 18,867  $ 176,113  $ (4,884) $ (46,166) $ 143,930  $ 984  $ 144,914 
Balance at December 31, 2020 $ 18,421  $ 160,377  $ (5,612) $ (41,498) $ 131,688  $ 1,038  $ 132,726 
Treasury stock transactions 37  —  —  —  37  —  37 
Net income (loss) —  1,377  —  —  1,377  21  1,398 
Cash dividends —  (2,468) —  —  (2,468) (11) (2,479)
Stock dividends —  (1) —  —  (1) —  (1)
Other comprehensive income —  —  1,026  —  1,026  —  1,026 
Purchases of treasury shares —  —  —  (6) (6) —  (6)
Issuances of treasury shares —  —  —  235  235  —  235 
Other changes, net —  —  —  —  —  (3) (3)
Balance at March 31, 2021 $ 18,458  $ 159,285  $ (4,586) $ (41,269) $ 131,888  $ 1,045  $ 132,933 
(Number of Shares) Common Stock - 2021 Common Stock - 2020
Three Months Ended March 31
Issued(2)
Treasury Outstanding
Issued(2)
Treasury Outstanding
Balance at December 31 2,442,676,580  (517,490,263) 1,925,186,317  2,442,676,580  (560,508,479) 1,882,168,101 
Purchases —  (67,003) (67,003) —  (17,501,102) (17,501,102)
Issuances —  2,932,865  2,932,865  —  2,311,651  2,311,651 
Balance at March 31 2,442,676,580  (514,624,401) 1,928,052,179  2,442,676,580  (575,697,930) 1,866,978,650 
_________________________________________________
(1)Beginning and ending balances for all periods include capital in excess of par, common stock issued at par for $1,832, and $(240) associated with Chevron’s Benefit Plan Trust. Changes reflect capital in excess of par.
(2)Beginning and ending total issued share balances include 14,168,000 shares associated with Chevron’s Benefit Plan Trust for all periods.

See accompanying notes to consolidated financial statements.

7


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Note 1. General
Basis of Presentation The accompanying consolidated financial statements of Chevron Corporation and its subsidiaries (together, Chevron or the company) have not been audited by an independent registered public accounting firm. In the opinion of the company’s management, the interim data includes all adjustments necessary for a fair statement of the results for the interim periods. These adjustments were of a normal recurring nature. The results for the three-month period ended March 31, 2021, are not necessarily indicative of future financial results. The term “earnings” is defined as net income attributable to Chevron.
Certain notes and other information have been condensed or omitted from the interim financial statements presented in this Quarterly Report on Form 10-Q. Therefore, these financial statements should be read in conjunction with the company’s 2020 Annual Report on Form 10-K.
Impact of the Coronavirus Disease 2019 (COVID-19) Pandemic The outbreak of COVID-19 and decreases in commodity prices resulting from oversupply, government-imposed travel restrictions and other constraints on economic activity caused a significant decline in the demand for our products and created disruptions and volatility in the global marketplace beginning late in the first quarter 2020, which negatively affected our results of operations and cash flows throughout 2020. While demand and commodity prices have shown signs of recovery, demand is not back to pre-pandemic levels, and financial results could continue to be challenged in future quarters. There continues to be uncertainty and unpredictability around the extent to which the COVID-19 pandemic will impact our results, which could be material.

See accompanying notes to consolidated financial statements.

8


NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 2. Information Relating to the Consolidated Statement of Cash Flows
Three Months Ended
March 31
2021 2020
(Millions of dollars)
Distributions more (less) than income from equity affiliates includes the following:
Distributions from equity affiliates $ 420  $ 326 
(Income) loss from equity affiliates (911) (965)
Distributions more (less) than income from equity affiliates $ (491) $ (639)
Net decrease (increase) in operating working capital was composed of the following:
Decrease (increase) in accounts and notes receivable $ (2,827) $ 2,986 
Decrease (increase) in inventories 51  (733)
Decrease (increase) in prepaid expenses and other current assets (102) 120 
Increase (decrease) in accounts payable and accrued liabilities 1,599  (3,268)
Increase (decrease) in income and other taxes payable 377  (201)
Net decrease (increase) in operating working capital $ (902) $ (1,096)
Net cash provided by operating activities includes the following cash payments:
Interest on debt (net of capitalized interest) $ 70  $ 106 
Income taxes 629  981 
Proceeds and deposits related to asset sales and returns of investment consisted of the following gross amounts:
Proceeds and deposits related to asset sales $ 147  $ 363 
Returns of investment from equity affiliates 11  11 
Proceeds and deposits related to asset sales and returns of investment $ 158  $ 374 
Net sales (purchases) of marketable securities consisted of the following gross amounts:
Marketable securities purchased $ (1) $ — 
Marketable securities sold 1  — 
Net sales (purchases) of marketable securities $   $ — 
Net repayment (borrowing) of loans by equity affiliates consisted of the following gross amounts:
Borrowing of loans by equity affiliates $   $ (425)
Repayment of loans by equity affiliates 25  26 
Net repayment (borrowing) of loans by equity affiliates $ 25  $ (399)
Net borrowings (repayments) of short-term obligations consisted of the following gross and net amounts:
Proceeds from issuances of short-term obligations $ 2,872  $ 4,952 
Repayments of short-term obligations (1,792) (1,010)
Net borrowings (repayments) of short-term obligations with three months or less maturity 157  4,225 
Net borrowings (repayments) of short-term obligations $ 1,237  $ 8,167 
Net sales (purchases) of treasury shares consists of the following gross and net amounts:
Shares issued for share-based compensation plans $ 273  $ 178 
Shares purchased under share repurchase and deferred compensation plans (6) (1,751)
Net sales (purchases) of treasury shares $ 267  $ (1,573)
The Consolidated Statement of Cash Flows excludes changes to the Consolidated Balance Sheet that did not affect cash.
The “Other” line in the Operating Activities section includes changes in postretirement benefits obligations and other long-term liabilities.
The company paid dividends of $1.29 per share of common stock in first quarter 2021 and 2020.
9

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The major components of “Capital expenditures” and the reconciliation of this amount to the reported capital and exploratory expenditures, including equity affiliates, are presented in the following table:
Three Months Ended
March 31
2021 2020
(Millions of dollars)
Additions to properties, plant and equipment
$ 1,631  $ 3,071 
Additions to investments 109  13 
Current-year dry hole expenditures 4  49 
Payments for other assets and liabilities, net 2  — 
Capital expenditures 1,746  3,133 
Expensed exploration expenditures 82  108 
Assets acquired through finance lease obligations and other financing obligations   — 
Payments for other assets and liabilities, net (2) — 
Capital and exploratory expenditures, excluding equity affiliates 1,826  3,241 
Company’s share of expenditures by equity affiliates 678  1,183 
Capital and exploratory expenditures, including equity affiliates $ 2,504  $ 4,424 
The table below quantifies the beginning and ending balances of restricted cash and restricted cash equivalents in the Consolidated Balance Sheet:
At March 31 At December 31
2021 2020 2020 2019
(Millions of dollars)
Cash and Cash Equivalents $ 7,076  $ 8,492  $ 5,596  $ 5,686 
Restricted cash included in “Prepaid expenses and other current assets” 412  434  365  452 
Restricted cash included in “Deferred charges and other assets” 776  764  776  773 
Total Cash, Cash Equivalents and Restricted Cash $ 8,264  $ 9,690  $ 6,737  $ 6,911 
Additional information related to “Restricted Cash” is included on page 19 in Note 13 under the heading “Restricted Cash.”
Note 3. Summarized Financial Data — Tengizchevroil LLP
Chevron has a 50 percent equity ownership interest in Tengizchevroil LLP (TCO). Summarized financial information for 100 percent of TCO is presented in the following table:
Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Sales and other operating revenues
$ 3,431  $ 3,296 
Costs and other deductions
1,856  1,957 
Net income attributable to TCO
$ 1,012  $ 938 
Note 4. Summarized Financial Data — Chevron Phillips Chemical Company LLC
Chevron has a 50 percent equity ownership interest in Chevron Phillips Chemical Company LLC (CPChem). Summarized financial information for 100 percent of CPChem is presented in the table.
Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Sales and other operating revenues
$ 2,748  $ 2,195 
 Costs and other deductions 2,553  1,812 
Net income attributable to CPChem
$ 304  $ 337 

10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Note 5. Summarized Financial Data — Chevron U.S.A. Inc.
Chevron U.S.A. Inc. (CUSA) is a major subsidiary of Chevron Corporation. CUSA and its subsidiaries manage and operate most of Chevron’s U.S. businesses. Assets include those related to the exploration and production of crude oil, natural gas and natural gas liquids and those associated with refining, marketing, and supply and distribution of products derived from petroleum, excluding most of the regulated pipeline operations of Chevron. CUSA also holds the company’s investment in the Chevron Phillips Chemical Company LLC joint venture, which is accounted for using the equity method.
The summarized financial information for CUSA and its consolidated subsidiaries is as follows:
Three Months Ended
March 31
2021 2020
(Millions of dollars)
Sales and other operating revenues
$ 23,479  $ 22,039 
Costs and other deductions
23,322  21,281 
Net income (loss) attributable to CUSA
$ 257  $ 860 
At March 31,
2021
At December 31,
2020
  (Millions of dollars)
Current assets
$ 17,492  $ 10,555 
Other assets
47,554  48,054 
Current liabilities
18,961  12,403 
Other liabilities
21,538  14,102 
Total CUSA net equity
$ 24,547  $ 32,104 
Memo: Total debt
$ 14,831  $ 7,133 
Note 6. 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 plant. Downstream operations consist primarily of the 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 worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.
The company’s segments are managed by “segment managers” who report to the “chief operating decision maker” (CODM). The 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.
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).
11

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
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 for the three-month periods ended March 31, 2021 and 2020, are presented in the following table:
Three Months Ended
March 31
2021 2020
Segment Earnings (Millions of dollars)
Upstream
United States $ 941  $ 241 
International 1,409  2,679 
Total Upstream 2,350  2,920 
Downstream
United States (130) 450 
International 135  653 
Total Downstream 5  1,103 
Total Segment Earnings 2,355  4,023 
All Other
Interest expense (184) (154)
Interest income 8  23 
Other (802) (293)
Net Income Attributable to Chevron Corporation $ 1,377  $ 3,599 
Segment Assets Segment assets do not include intercompany investments or intercompany receivables. Segment assets at March 31, 2021, and December 31, 2020, are as follows: 
At March 31,
2021
At December 31,
2020
Segment Assets (Millions of dollars)
Upstream
United States $ 42,093  $ 42,431 
International 143,420  144,476 
Goodwill 4,402  4,402 
Total Upstream 189,915  191,309 
Downstream
United States 24,464  23,490 
International 17,018  16,096 
Total Downstream 41,482  39,586 
Total Segment Assets 231,397  230,895 
All Other
United States 3,717  4,017 
International 6,531  4,878 
Total All Other 10,248  8,895 
Total Assets — United States 70,274  69,938 
Total Assets — International 166,969  165,450 
Goodwill 4,402  4,402 
Total Assets $ 241,645  $ 239,790 
12

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Segment Sales and Other Operating Revenues Segment sales and other operating revenues, including internal transfers, for the three-month periods ended March 31, 2021 and 2020, are presented in the following table. 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 fuel and lubricant additives and the transportation and trading of refined products and crude oil. “All Other” activities include revenues from insurance operations, real estate activities and technology companies.
Three Months Ended
March 31
2021 2020
Sales and Other Operating Revenues (Millions of dollars)
Upstream
United States $ 5,791  $ 4,466 
International 8,790  9,013 
Subtotal 14,581  13,479 
Intersegment Elimination — United States (2,855) (2,812)
Intersegment Elimination — International (2,375) (2,541)
Total Upstream 9,351  8,126 
Downstream
United States 10,854  11,186 
International 11,582  12,173 
Subtotal 22,436  23,359 
Intersegment Elimination — United States (466) (1,260)
Intersegment Elimination — International (269) (585)
Total Downstream 21,701  21,514 
All Other
United States 24  210 
International  
Subtotal 24  212 
Intersegment Elimination — United States   (145)
Intersegment Elimination — International   (2)
Total All Other 24  65 
Sales and Other Operating Revenues
United States 16,669  15,862 
International 20,372  21,188 
Subtotal 37,041  37,050 
Intersegment Elimination — United States (3,321) (4,217)
Intersegment Elimination — International (2,644) (3,128)
Total Sales and Other Operating Revenues $ 31,076  $ 29,705 
Note 7. Employee Benefits
Chevron has defined benefit pension plans for many employees. The company typically prefunds defined benefit plans as required by local regulations or in certain situations where prefunding provides economic advantages. In the United States, all qualified plans are subject to the Employee Retirement Income Security Act minimum funding standard. The company does not typically fund U.S. nonqualified pension plans that are not subject to funding requirements under laws and regulations because contributions to these pension plans may be less economic and investment returns may be less attractive than the company’s other investment alternatives.
13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The company also sponsors other postretirement employee benefit (OPEB) plans that provide medical and dental benefits, as well as life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and the retirees share the costs. For the company’s main U.S. medical plan, the increase to the pre-Medicare company contribution for retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the company.
The components of net periodic benefit costs for 2021 and 2020 are as follows:
  Three Months Ended
March 31
  2021 2020
(Millions of dollars)
Pension Benefits
United States
Service cost $ 117  $ 124 
Interest cost 55  88 
Expected return on plan assets (149) (162)
Amortization of prior service costs (credits) 1 
Amortization of actuarial losses (gains) 104  96 
Settlement losses 317  60 
Total United States 445  207 
International
Service cost 34  32 
Interest cost 33  43 
Expected return on plan assets (46) (52)
Amortization of prior service costs (credits) 2 
Amortization of actuarial losses (gains) 10  10 
Settlement losses   — 
Total International 33  35 
Net Periodic Pension Benefit Costs $ 478  $ 242 
Other Benefits*
Service cost $ 11  $
Interest cost 13  18 
Amortization of prior service costs (credits) (7) (6)
Amortization of actuarial losses (gains) 4  — 
Net Periodic Other Benefit Costs $ 21  $ 21 
___________________________________
* Includes costs for U.S. and international OPEB plans. Obligations for plans outside the United States are not significant relative to the company’s total OPEB obligation.
Through March 31, 2021, a total of $331 million was contributed to employee pension plans (including $291 million to the U.S. plans). Total contributions for the full year are currently estimated to be $1.25 billion ($1.05 billion for the U.S. plans and $200 million for the international plans). Contribution amounts are dependent upon plan investment returns, changes in pension obligations, regulatory requirements and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations.
During the first three months of 2021, the company contributed $46 million to its OPEB plans. The company anticipates contributing approximately $107 million during the remainder of 2021.
Note 8. Assets Held For Sale
At March 31, 2021, the company classified $1.12 billion of net properties, plant and equipment as “Assets held for sale” on the Consolidated Balance Sheet. These assets are associated with upstream operations that are anticipated to be sold in the next 12 months. The revenues and earnings contributions of these assets in 2020 and the first three months of 2021 were not material.
14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Note 9. Changes in Accumulated Other Comprehensive Losses
The change in Accumulated Other Comprehensive Losses (AOCL) presented on the Consolidated Balance Sheet and the impact of significant amounts reclassified from AOCL on information presented in the Consolidated Statement of Income for the three months ended March 31, 2021 and 2020 are reflected in the table below.
Changes in Accumulated Other Comprehensive Income (Loss) by Component(1)
(Millions of dollars)
Currency Translation Adjustment Unrealized Holding Gains (Losses) on Securities Defined Benefit Plans Total
Balance at December 31, 2019 $ (142) $ (8) $ (4,840) $ (4,990)
Components of Other Comprehensive Income (Loss):
Before Reclassifications
(19) (3) (20)
Reclassifications
—  —  126  126 
Net Other Comprehensive Income (Loss)
(19) (3) 128  106 
Balance at March 31, 2020 $ (161) $ (11) $ (4,712) $ (4,884)
Balance at December 31, 2020 $ (107) $ (10) $ (5,495) $ (5,612)
Components of Other Comprehensive Income (Loss):
Before Reclassifications
(19) (3) 715  693 
Reclassifications(2)
—  —  333  333 
Net Other Comprehensive Income (Loss)
(19) (3) 1,048  1,026 
Balance at March 31, 2021 $ (126) $ (13) $ (4,447) $ (4,586)
______ ___________________________________________________________________________________

(1)All amounts are net of tax.
(2)Refer to Note 7, Employee Benefits for reclassified components, including amortization of actuarial gains or losses, amortization of prior service costs and settlement losses, totaling $431 million that are included in employee benefit costs for the three months ended March 31, 2021. Related income taxes for the same period, totaling $98 million, are reflected in “Income Tax Expense” on the Consolidated Statement of Income. All other reclassified amounts were insignificant.
Note 10. Income Taxes
The income tax expense increased between quarterly periods from $564 million in 2020 to $779 million in 2021. The company's income before income tax expense decreased $1.97 billion from $4.15 billion in 2020 to $2.18 billion in 2021, primarily due to lower downstream margins, higher employee costs, unfavorable foreign exchange effects, absence of a 2020 gain on the sale of Philippines assets and lower sales volumes, partially offset by higher prices. The company’s effective tax rate changed between quarterly periods from 14 percent in 2020 to 36 percent in 2021. The change in the effective tax rate is primarily due to the absence of a favorable international tax item, foreign exchange gains and asset sale gains that were included in income before tax but did not have significant tax impacts. In addition, the change in the effective tax rate is also impacted by the consequence of the mix effect resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions.
Tax positions for Chevron and its subsidiaries and affiliates are subject to income tax audits by many tax jurisdictions throughout the world. For the company’s major tax jurisdictions, examinations of tax returns for certain prior tax years had not been completed as of March 31, 2021. For these jurisdictions, the latest years for which income tax examinations had been finalized were as follows: United States — 2013, Nigeria — 2007, Australia — 2009, Kazakhstan — 2012 and Saudi Arabia — 2015.
The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in the various jurisdictions. Both the outcomes for these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. However, it is reasonably possible that developments regarding tax matters in certain tax jurisdictions may result in significant increases or decreases in the company’s total unrecognized tax benefits within the next 12 months. Given the number of years that still remain subject to examination and the number of matters being examined in the various tax jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.
15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Note 11. Litigation
MTBE
Chevron and many other companies in the petroleum industry used methyl tertiary butyl ether (MTBE) as a gasoline additive. Chevron is a party to six pending lawsuits and claims, the majority of which involve numerous other petroleum marketers and refiners. Resolution of these lawsuits and claims may ultimately require the company to correct or ameliorate the alleged effects on the environment of prior release of MTBE by the company or other parties. The company’s ultimate exposure related to pending lawsuits and claims is not determinable. The company no longer uses MTBE in the manufacture of gasoline in the United States.
Ecuador
Texaco Petroleum Company (Texpet), a subsidiary of Texaco Inc., was a minority member of an oil production consortium with Ecuadorian state-owned Petroecuador from 1967 until 1992. After termination of the consortium and a third-party environmental audit, Ecuador and the consortium parties entered into a settlement agreement specifying Texpet’s remediation obligations. Following Texpet’s completion of a three-year remediation program, Ecuador certified the remediation as proper and released Texpet and its affiliates from environmental liability. In May 2003, plaintiffs alleging environmental harm from the consortium’s activities sued Chevron in the Superior Court in Lago Agrio, Ecuador. In February 2011, that court entered a judgment against Chevron for approximately $9.5 billion plus additional punitive damages. An appellate panel affirmed, and Ecuador’s National Court of Justice ratified the judgment but nullified the punitive damages, resulting in a judgment of approximately $9.5 billion. Ecuador’s highest Constitutional Court rejected Chevron’s final appeal in July 2018.
In February 2011, Chevron sued the Lago Agrio plaintiffs and several of their lawyers and supporters in the U.S. District Court for the Southern District of New York (SDNY) for violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and state law. The SDNY court ruled that the Ecuadorian judgment had been procured through fraud, bribery, and corruption, and prohibited the RICO defendants from seeking to enforce the Ecuadorian judgment in the United States or profiting from their illegal acts. The Court of Appeals for the Second Circuit affirmed, and the U.S. Supreme Court denied certiorari in June 2017, rendering final the U.S. judgment in favor of Chevron. The Lago Agrio plaintiffs sought to have the Ecuadorian judgment recognized and enforced in Canada, Brazil, and Argentina. All of those recognition and enforcement actions were dismissed and resolved in Chevron’s favor. Chevron and Texpet filed an arbitration claim against Ecuador in September 2009 before an arbitral tribunal administered by the Permanent Court of Arbitration in The Hague, under the United States-Ecuador Bilateral Investment Treaty. In August 2018, the Tribunal issued an award holding that the Ecuadorian judgment was based on environmental claims that Ecuador had settled and released, and that it was procured through fraud, bribery, and corruption. According to the Tribunal, the Ecuadorian judgment “violates international public policy” and “should not be recognized or enforced by the courts of other States.” The Tribunal ordered Ecuador to remove the status of enforceability from the Ecuadorian judgment and to compensate Chevron for any injuries resulting from the judgment. The third and final phase of the arbitration, to determine the amount of compensation Ecuador owes to Chevron, is ongoing. In September 2020, the District Court of The Hague denied Ecuador’s request to set aside the Tribunal’s award, stating that it now is “common ground” between Ecuador and Chevron that the Ecuadorian judgment is fraudulent. In December 2020, Ecuador appealed the District Court’s decision to The Hague Court of Appeals. In a separate proceeding, Ecuador also admitted that the Ecuadorian judgment is fraudulent in a public filing with the Office of the United States Trade Representative in July 2020.
Managements Assessment The ultimate outcome of the foregoing matters, including any financial effect on Chevron, remains uncertain. Chevron continues to believe that the Ecuadorian judgment is illegitimate and unenforceable and that it does not provide any basis upon which an estimate of a reasonably possible loss or range of loss can be made.


16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Note 12. Other Contingencies and Commitments
Income Taxes The company calculates its income tax expense and liabilities quarterly. These liabilities generally are subject to audit and are not finalized with the individual taxing authorities until several years after the end of the annual period for which income taxes have been calculated. Refer to Note 10 beginning on page 15 for a discussion of the periods for which tax returns have been audited for the company’s major tax jurisdictions.
Settlement of open tax years, as well as other tax issues in countries where the company conducts its businesses, are not expected to have a material effect on the consolidated financial position or liquidity of the company and, in the opinion of management, adequate provision has been made for income taxes for all years under examination or subject to future examination.
Guarantees The company and its subsidiaries have certain contingent liabilities with respect to guarantees, direct or indirect, of debt of affiliated companies or third parties. Under the terms of the guarantee arrangements, the company would generally be required to perform should the affiliated company or third party fail to fulfill its obligations under the arrangements. In some cases, the guarantee arrangements may have recourse provisions that would enable the company to recover any payments made under the terms of the guarantees from assets provided as collateral.
Indemnifications In the acquisition of Unocal, the company assumed certain indemnities relating to contingent environmental liabilities associated with assets that were sold in 1997. The acquirer of those assets shared in certain environmental remediation costs up to a maximum obligation of $200 million, which had been reached at December 31, 2009. Under the indemnification agreement, after reaching the $200 million obligation, Chevron is solely responsible until April 2022, when the indemnification expires. The environmental conditions or events that are subject to these indemnities must have arisen prior to the sale of the assets in 1997.
Although the company has provided for known obligations under this indemnity that are probable and reasonably estimable, the amount of additional future costs may be material to results of operations in the period in which they are recognized. The company does not expect these costs will have a material effect on its consolidated financial position or liquidity.
Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements The company and its subsidiaries have certain contingent liabilities with respect to long-term unconditional purchase obligations and commitments, including throughput and take-or-pay agreements, some of which may relate to suppliers’ financing arrangements. The agreements typically provide goods and services, such as pipeline and storage capacity, utilities, and petroleum products, to be used or sold in the ordinary course of the company’s business.
Environmental The company is subject to loss contingencies pursuant to laws, regulations, private claims and legal proceedings related to environmental matters that are subject to legal settlements or that in the future may require the company to take action to correct or ameliorate the effects on the environment of prior release of chemicals or petroleum substances, including MTBE, by the company or other parties. Such contingencies may exist for various sites, including, but not limited to, federal Superfund sites and analogous sites under state laws, refineries, crude oil fields, service stations, terminals, land development areas, and mining activities, whether operating, closed or divested. These future costs are not fully determinable due to factors such as the unknown magnitude of possible contamination, the unknown timing and extent of the corrective actions that may be required, the determination of the company’s liability in proportion to other responsible parties, and the extent to which such costs are recoverable from third parties.
Although the company has provided for known environmental obligations that are probable and reasonably estimable, the amount of additional future costs may be material to results of operations in the period in which they are recognized. The company does not expect these costs will have a material effect on its consolidated financial position or liquidity. Also, the company does not believe its obligations to make such expenditures have had, or will have, any significant impact on the company’s competitive position relative to other U.S. or international petroleum or chemical companies.
17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Other Contingencies Governmental and other entities in various jurisdictions across the United States have filed legal proceedings against fossil fuel producing companies, including Chevron, purporting to seek legal and equitable relief to address alleged impacts of climate change. Further such proceedings are likely to be filed by other parties. The unprecedented legal theories set forth in these proceedings entail the possibility of damages liability and injunctions, including without limitation injunctions against the production of all fossil fuels, that, while we believe remote, could have a material adverse effect on the Company’s results of operations and financial condition. Management believes that these proceedings are legally and factually meritless and detract from constructive efforts to address the important policy issues presented by climate change, and will vigorously defend against such proceedings.
Seven coastal parishes and the State of Louisiana have filed 43 separate lawsuits in Louisiana against numerous oil and gas companies seeking damages for coastal erosion in or near oil fields located within Louisiana’s coastal zone under Louisiana’s State and Local Coastal Resources Management Act (SLCRMA). Chevron entities are defendants in 39 of these cases. The lawsuits allege that the defendants’ historical operations were conducted without necessary permits or failed to comply with permits obtained and seek damages and other relief, including the costs of restoring coastal wetlands allegedly impacted by oil field operations. Plaintiffs’ SLCRMA theories are unprecedented; thus, there remains significant uncertainty about the scope of the claims and alleged damages and any potential effects on the company’s results of operations and financial condition. Management believes that the claims lack legal and factual merit and will continue to vigorously defend against such proceedings.
Chevron receives claims from and submits claims to customers; trading partners; joint venture partners; U.S. federal, state and local regulatory bodies; governments; contractors; insurers; suppliers; and individuals. The amounts of these claims, individually and in the aggregate, may be significant and take lengthy periods to resolve, and may result in gains or losses in future periods.
The company and its affiliates also continue to review and analyze their operations and may close, decommission, sell, exchange, acquire or restructure assets to achieve operational or strategic benefits and to improve competitiveness and profitability. These activities, individually or together, may result in significant gains or losses in future periods.
Note 13. Fair Value Measurements
The three levels of the fair value hierarchy of inputs the company uses to measure the fair value of an asset or liability are described as follows:
Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. For the company, Level 1 inputs include exchange-traded futures contracts for which the parties are willing to transact at the exchange-quoted price and marketable securities that are actively traded.
Level 2: Inputs other than Level 1 that are observable, either directly or indirectly. For the company, Level 2 inputs include quoted prices for similar assets or liabilities, prices obtained through third-party broker quotes and prices that can be corroborated with other observable inputs for substantially the complete term of a contract.
Level 3: Unobservable inputs. The company does not use Level 3 inputs for any of its recurring fair value measurements. Level 3 inputs may be required for the determination of fair value associated with certain nonrecurring measurements of nonfinancial assets and liabilities.
18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at March 31, 2021, and December 31, 2020, is as follows:
Assets and Liabilities Measured at Fair Value on a Recurring Basis
(Millions of dollars)
  At March 31, 2021 At December 31, 2020
  Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3
Marketable Securities $ 32  $ 32  $   $   $ 31  $ 31  $ —  $ — 
Derivatives - not designated 51  18  33    74  37  37  — 
Total Assets at Fair Value
$ 83  $ 50  $ 33  $   $ 105  $ 68  $ 37  $ — 
Derivatives - not designated 133  86  47    173  58  115  — 
Total Liabilities at Fair Value
$ 133  $ 86  $ 47  $   $ 173  $ 58  $ 115  $ — 
Marketable Securities The company calculates fair value for its marketable securities based on quoted market prices for identical assets. The fair values reflect the cash that would have been received if the instruments were sold at March 31, 2021.
Derivatives The company records most of its derivative instruments — other than any commodity derivative contracts that are accounted for as normal purchase and normal sale — on the Consolidated Balance Sheet at fair value, with the offsetting amount to the Consolidated Statement of Income. The company designates certain derivative instruments as cash flow hedges that, if applicable, are reflected in the table above. Derivatives classified as Level 1 include futures, swaps and options contracts traded in active markets such as the New York Mercantile Exchange. Derivatives classified as Level 2 include swaps, options and forward contracts principally with financial institutions and other oil and gas companies, the fair values of which are obtained from third-party broker quotes, industry pricing services and exchanges. The company obtains multiple sources of pricing information for the Level 2 instruments. Since this pricing information is generated from observable market data, it has historically been very consistent. The company does not materially adjust this information.
Assets and liabilities carried at fair value at March 31, 2021, and December 31, 2020, are as follows:
Cash and Cash Equivalents The company holds cash equivalents in U.S. and non-U.S. portfolios. The instruments classified as cash equivalents are primarily bank time deposits with maturities of 90 days or less, and money market funds. “Cash and cash equivalents” had carrying/fair values of $7.1 billion and $5.6 billion at March 31, 2021, and December 31, 2020, respectively. The fair values of cash and cash equivalents are classified as Level 1 and reflect the cash that would have been received if the instruments were settled at March 31, 2021.
Restricted Cash had a carrying/fair value of $1.2 billion and $1.1 billion at March 31, 2021 and December 31, 2020, respectively. At March 31, 2021, restricted cash is classified as Level 1 and includes restricted funds related to certain upstream decommissioning activities, other corporate and tax items, which are reported in “Prepaid expenses and other current assets” and “Deferred charges and other assets” on the Consolidated Balance Sheet.
Long-Term Debt had a net carrying value, excluding amounts reclassified from short-term debt, purchase price fair value adjustments and finance lease obligations, of $28.7 billion and $30.8 billion at March 31, 2021, and December 31, 2020, respectively. The fair value of long-term debt for the company was $31.1 billion and $34.4 billion at March 31, 2021 and December 31, 2020, respectively. Long-term debt primarily includes corporate issued bonds, classified as Level 1 and are $28.9 billion for the period. The fair value of other long-term debt classified as Level 2 is $2.2 billion.
The carrying values of other short-term financial assets and liabilities on the Consolidated Balance Sheet approximate their fair values. Fair value remeasurements of other financial instruments at March 31, 2021, and December 31, 2020, were not material.
19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
The fair value hierarchy for assets and liabilities measured at fair value on a nonrecurring basis at March 31, 2021, is as follows:
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
(Millions of dollars)
  At March 31, 2021
  Before- Tax Loss
Total Level 1 Level 2 Level 3
Properties, plant and equipment, net (held and used) $ —  $ —  $ —  $ —  $ — 
Properties, plant and equipment, net (held for sale) —  —  —  —  — 
Investments and advances 15  —  —  15  10 
Total Assets at Fair Value
$ 15  $   $   $ 15  $ 10 
Properties, plant and equipment The company did not have any impairments of long-lived assets measured at fair value on a nonrecurring basis to report in first quarter 2021.
Investments and advances The company did not have any material impairments of investments and advances measured at fair value on a nonrecurring basis to report in first quarter 2021. At March 31, 2021 the company had assets measured at fair value Level 3 using unobservable inputs of $15 million.
Note 14. Financial and Derivative Instruments
The company’s commodity derivative instruments principally include crude oil, natural gas and refined product futures, swaps, options and forward contracts. The company applies cash flow hedge accounting to certain commodity transactions, where appropriate, to manage the market price risk associated with forecasted sales of crude oil. The company’s derivatives are not material to the company’s consolidated financial position, results of operations or liquidity. The company believes it has no material market or credit risks to its operations, financial position or liquidity as a result of its commodities and other derivatives activities.
The company uses commodity derivative instruments traded on the New York Mercantile Exchange and on electronic platforms of the Inter-Continental Exchange and Chicago Mercantile Exchange. In addition, the company enters into swap contracts and option contracts principally with major financial institutions and other oil and gas companies in the “over-the-counter” markets, which are governed by International Swaps and Derivatives Association agreements and other master netting arrangements.
Derivative instruments measured at fair value at March 31, 2021, and December 31, 2020, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows:
Consolidated Balance Sheet: Fair Value of Derivatives
(Millions of dollars)
Type of
Contract
Balance Sheet Classification At March 31,
2021
At December 31,
2020
Commodity Accounts and notes receivable, net $ 47  $ 73 
Commodity Long-term receivables, net 4 
Total Assets at Fair Value
$ 51  $ 74 
Commodity Accounts payable $ 131  $ 172 
Commodity Deferred credits and other noncurrent obligations 2 
Total Liabilities at Fair Value
$ 133  $ 173 
20

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
Consolidated Statement of Income: The Effect of Derivatives
(Millions of dollars)
Type of   Gain / (Loss)
Three Months Ended
March 31
Contract Statement of Income Classification 2021 2020
Commodity Sales and other operating revenues $ (274) $ 461 
Commodity Purchased crude oil and products (3) (4)
Commodity Other income (39) — 
$ (316) $ 457 
All designated cash flow hedges in the first three months of 2021 were settled by March 31, 2021. The impact on sales and other operating revenues from designated hedges for the reporting period was immaterial.
The table below represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated Balance Sheet at March 31, 2021, and December 31, 2020.
Consolidated Balance Sheet: The Effect of Netting Derivative Assets and Liabilities
(Millions of dollars)
  Gross Amount Recognized Gross Amounts Offset Net Amounts Presented  Gross Amounts Not Offset Net Amount
At March 31, 2021
Derivative Assets - not designated $ 1,186  $ 1,135  $ 51  $   $ 51 
Derivative Liabilities - not designated $ 1,268  $ 1,135  $ 133  $   $ 133 
At December 31, 2020
Derivative Assets - not designated $ 818  $ 744  $ 74  $ —  $ 74 
Derivative Liabilities - not designated $ 917  $ 744  $ 173  $ —  $ 173 
Derivative assets and liabilities are classified on the Consolidated Balance Sheet as accounts and notes receivable, long-term receivables, accounts payable, and deferred credits and other noncurrent obligations. Amounts not offset on the Consolidated Balance Sheet represent positions that do not meet all the conditions for “a right of offset”.
Note 15. Revenue
“Sales and other operating revenue” on the Consolidated Statement of Income primarily arise from contracts with customers. Related receivables are included in “Accounts and notes receivable, net” on the Consolidated Balance Sheet, net of the current expected credit losses. The net balance of these receivables was $10.1 billion and $7.6 billion at March 31, 2021, and December 31, 2020, respectively. Other items included in “Accounts and notes receivable, net” represent amounts due from partners for their share of joint venture operating and project costs and amounts due from others, primarily related to derivatives, leases, buy/sell arrangements and product exchanges, which are accounted for outside the scope of ASC 606.
Note 16. Financial Instruments - Credit Losses
Chevron’s expected credit loss allowance balance was $701 million as of March 31, 2021 and $671 million as of December 31, 2020, with a majority of the allowance relating to non-trade receivable balances.
The majority of the company’s receivable balance is concentrated in trade receivables, with a balance of $12.2 billion as of March 31, 2021, which reflects the company’s diversified sources of revenues and is dispersed across the company’s broad worldwide customer base. As a result, the company believes the concentration of credit risk is limited. The company routinely assesses the financial strength of its customers. When the financial strength of a customer is not considered sufficient, alternative risk mitigation measures may be deployed, including requiring pre-payments, letters of credit or other acceptable forms of collateral. Once credit is extended and a receivable balance exists, the company applies a quantitative calculation to current trade receivable balances that reflects credit risk predictive analysis, including probability of default and loss given default, which takes into consideration current and forward-looking market data as well as the company’s historical loss data. This statistical approach becomes the basis of the company’s expected credit
21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)
loss allowance for current trade receivables with payment terms that are typically short-term in nature, with most due in less than 90 days.
Chevron's non-trade receivable balance was $3.2 billion as of March 31, 2021, which includes receivables from certain governments in their capacity as joint venture partners. Joint venture partner balances that are paid as per contract terms or not yet due are subject to the statistical analysis described above while past due balances are subject to additional qualitative management quarterly review. This management review includes review of reasonable and supportable repayment forecasts. Non-trade receivables also include employee and tax receivables that are deemed immaterial and low risk. Equity affiliate loans are also considered non-trade and associated allowances of $560 million are included within Investments and Advances on the Consolidated Balance Sheet.
Note 17. Long-Term Debt
On January 6, 2021, the company announced that the aggregate principal amount of $5.697 billion of Noble Energy, Inc. (Noble) senior notes were exchanged for new senior notes issued by CUSA, guaranteed by Chevron, and have the same interest rates and maturity dates as the Noble senior notes. The aggregate principal amount of $5.697 billion Noble senior notes were validly tendered and accepted and subsequently terminated. Following such termination, $103 million aggregate principal amount remains outstanding across ten series of senior notes issued by Noble, for which Chevron provided no guarantee, and the indentures were modified to eliminate any financial reporting or credit rating requirements. In February 2021, the indenture governing Noble's 7.25 percent senior debentures due 2097 was modified to provide a guarantee by Chevron and eliminate any financial reporting or credit rating requirements. In the first three months of 2021, the company repaid $14 million of bonds at maturity.
Note 18. Restructuring and Reorganization Costs
The following table summarizes the accrued severance liability, which is classified as current on the Consolidated Balance Sheet.
Amounts Before Tax
(Millions of dollars)
Balance at January 1, 2021 $ 470 
Accruals/Adjustments — 
Payments (272)
Balance at March 31, 2021 $ 198 
22

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations

First Quarter 2021 Compared with First Quarter 2020
Key Financial Results
Earnings by Business Segment
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Upstream
United States $ 941  $ 241 
International 1,409  2,679 
Total Upstream 2,350  2,920 
Downstream
United States (130) 450 
International 135  653 
Total Downstream 5  1,103 
Total Segment Earnings 2,355  4,023 
All Other (978) (424)
Net Income (Loss) Attributable to Chevron Corporation (1) (2)
$ 1,377  $ 3,599 
__________________________________________
(1) Includes foreign currency effects.
$ (2) $ 514 
(2) Income (loss) net of tax; also referred to as “earnings” in the discussions that follow.
Net income attributable to Chevron Corporation for first quarter 2021 was $1.38 billion ($0.72 per share — diluted), compared with $3.60 billion ($1.93 per share — diluted) in the first quarter of 2020.
Upstream earnings in first quarter 2021 were $2.35 billion compared with $2.92 billion in the corresponding 2020 period. The decrease was mainly due to unfavorable foreign currency effects, lower sales volumes, the absence of a 2020 gain on the sale of Philippine assets and lower trading results, partially offset by higher crude oil realizations.
Downstream earnings in first quarter 2021 were $5 million compared with $1.10 billion in the corresponding 2020 period. The decrease was mainly due to lower margins on refined product sales.
Refer to pages 28 through 29 for additional discussion of results by business segment and “All Other” activities for first quarter 2021 versus the same period in 2020.
Business Environment and Outlook
Chevron Corporation* is a global energy company with substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Equatorial Guinea, Indonesia, Israel, Kazakhstan, Kurdistan Region of Iraq, Myanmar, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Republic of Congo, Singapore, South Korea, Thailand, the United Kingdom, the United States, and Venezuela.
The company’s objective is to deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company’s control. In the company’s downstream business, crude oil is the largest cost component of refined products. Periods of sustained lower prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital and exploratory expenditures, along with other measures intended to improve financial performance.
_____________________
* Incorporated in Delaware in 1926 as Standard Oil Company of California, the company adopted the name Chevron Corporation in 1984 and ChevronTexaco Corporation in 2001. In 2005, ChevronTexaco Corporation changed its name to Chevron Corporation. As used in this report, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and "its" may refer to Chevron Corporation, one or more of its consolidated subsidiaries, or all of them taken as a whole, but unless stated otherwise they do not include “affiliates” of Chevron — i.e., those companies generally owned 50 percent or less. All of these terms are used for convenience only and are not intended as a precise description of any of the separate companies, each of which manages its own affairs.
23

With ongoing global interest in addressing the risks of climate change, support for policies and advancements in lower carbon technologies is expected. In seeking to help advance a lower carbon future, Chevron is focused on lowering its carbon intensity cost efficiently, increasing renewables and offsets in support of its business, and investing in low-carbon technologies to enable commercial solutions. In March 2021, the company announced its 2028 Upstream production greenhouse gas (GHG) intensity targets. These metrics include Scope 1, direct emissions, and Scope 2, indirect emissions from imported electricity and steam, and are net of emissions from exported electricity and steam. The targeted 2028 reductions from 2016 on an equity ownership basis include a 40 percent reduction in oil production GHG intensity to 24 kilograms (kg) carbon dioxide equivalent per barrel of oil-equivalent (CO2e/boe), a 26 percent reduction in gas production GHG intensity to 24 kg CO2e/boe, a 53 percent reduction in methane intensity to 2 kg CO2e/boe, and a 66 percent reduction in flaring GHG intensity to 3 kg CO2e/boe. The company also targets no routine flaring by 2030. We have set 2016 as our baseline to align with the year the Paris Agreement came into force, and the company plans to update the metrics every five years in line with the Paris Agreement stocktakes. Through 2028, Chevron plans to spend approximately $3 billion in advancing our energy transition strategy, which includes $2 billion in carbon reduction projects, $750 million in renewables and offsets, and $300 million committed to invest in low-carbon technologies through its Future Energy Fund II.
Response to Market Conditions and COVID-19 The outbreak of COVID-19 and decreases in commodity prices have caused a significant decrease in the demand for our products and created disruptions and volatility in the global marketplace beginning late in the first quarter 2020. These conditions persisted throughout 2020 and continue to negatively affect our results of operations and cash flows. While demand and commodity prices have shown signs of recovery, demand is not back to pre-pandemic levels, and financial results could continue to be challenged in future quarters.
During the first three months of 2021, vaccination programs have commenced around the world and business activity is increasing. We continue to take precautionary measures to reduce the risk of exposure to and spread of the COVID-19 virus in our operations through screening, testing and, when appropriate, quarantining personnel upon arrival to our operated facilities. However, some countries are facing a resurgence of the virus that could impact logistics and material movement and pose a risk to our business.
Despite the challenges posed by the pandemic, progress continues on the Future Growth Project / Wellhead Pressure Management Project (FGP/WPMP) at Tengiz. In the first quarter of 2021, the project construction workforce at FGP-WPMP continued to remobilize. Extended rotations, COVID-19 testing and isolation protocols are in place to minimize the spread of the virus, and vaccinations have commenced as part of the Republic of Kazakhstan's national vaccination program. Given the uncertain timeline for remobilizing all personnel and safely sustaining activity levels, it is still too early to provide meaningful information regarding impacts on project cost and schedule.
In 2021, Organization of Petroleum Exporting Countries (OPEC) and coordinating countries’ (OPEC+) continued to curtail production. The company was directed to curtail production by approximately 30 thousand barrels of oil equivalent per day during the first quarter of 2021, the majority of which was in Kazakhstan.
Demand for refined products, primarily jet fuel, has continued to be below pre-COVID-19 levels as a result of travel restrictions and other constraints on economic activity implemented in many countries to combat the spread of the COVID-19 virus. Chevron continued to take steps to maximize diesel and motor gasoline production, given the decline in jet fuel demand, to fuel transportation that keeps global supply chains moving. Chevron’s total refined product sales were down approximately 5 percent year-over-year in the first quarter, driven primarily by jet fuel, and refining crude utilization was approximately 80 percent in the first quarter.
Refer to the “Cautionary Statements Relevant to Forward-Looking Information” on page 2 and to “Risk Factors” on pages 18 through 23 of the company’s 2020 Annual Report on Form 10-K for a discussion of some of the inherent risks that could materially impact the company’s results of operations or financial condition.
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The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Additional information related to the company’s effective income tax rate is included in Note 10 to the Consolidated Financial Statements.
The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value or to acquire assets or operations complementary to its asset base to help augment the company’s financial performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future periods.
The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the company of movements in prices for crude oil and natural gas. Management takes these developments into account in the conduct of daily operations and for business planning.
Comments related to earnings trends for the company’s major business areas are as follows:
Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil and natural gas. Crude oil and natural gas prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by OPEC or other producers, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company’s control such as the COVID-19 pandemic, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of these factors could also inhibit the company’s production capacity in an affected region. The company closely monitors developments in the countries in which it operates and holds investments, and seeks to manage risks in operating its facilities and businesses.
The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company’s ability to find or acquire and efficiently produce crude oil and natural gas, changes in fiscal terms of contracts, and changes in tax and other applicable laws and regulations.
The company is actively managing its schedule of work, contracting, procurement, and supply chain activities to effectively manage costs and ensure supply chain resiliency and continuity in support of operational goals. Third party costs for capital, exploration, and operating expenses can be subject to external factors beyond the company’s control including, but not limited to: the general level of inflation, tariffs or other taxes imposed on goods or services, and market based prices charged by the industry’s material and service providers. Chevron utilizes contracts with various pricing mechanisms, so there may be a lag before the company’s costs reflect the changes in market trends.
The spot markets and some current cost indexes for materials and services show signs of activity accelerating with cost pressures beginning to appear. Growth in U.S. drilling activity continues to outpace global trends. In addition to demand growth for oil and gas industry inputs, there is a potential secondary source of cost pressure related to broader economic and industrial markets. The shutdown of facilities and curtailment of production during the pandemic have caused inventory drawdowns for some goods resulting in shortages as demand returns. The timing and trajectory of any increase in the cost of materials and services going forward will depend on the pace of growth for the oil and gas industry, as well as the global economic recovery. Chevron is actively monitoring and engaging key suppliers to mitigate any potential business impacts.
25

CVX-20210331_G1.JPG
The chart above shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil, and U.S. Henry Hub natural gas. The Brent price averaged $42 per barrel for the full-year 2020. During the first quarter 2021, Brent averaged $61 per barrel and ended April at about $67. The WTI price averaged $39 per barrel for the full-year 2020. During the first quarter 2021, WTI averaged $58 per barrel and ended April at about $64. The majority of the company’s equity crude production is priced based on the Brent benchmark. Crude prices have increased in the first three months of 2021 driven by demand growth. (See page 32 for the company’s average U.S. and international crude oil sales prices.)
In contrast to price movements in the global market for crude oil, price changes for natural gas are more closely aligned with seasonal supply/demand and infrastructure conditions in local markets. In the United States, prices at Henry Hub averaged $3.47 per thousand cubic feet (MCF) for the first three months of 2021, compared with $1.88 during the first three months of 2020. At the end of April 2021, the Henry Hub spot price was $2.85 per MCF.
Outside the United States, price changes for natural gas depend on a wide range of supply, demand and regulatory circumstances. The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG assets is committed under binding long-term contracts, with the remainder to be sold in the Asian spot LNG market. International natural gas realizations averaged $4.72 per MCF during the first three months of 2021, compared with $5.66 per MCF in the same period last year. (See page 32 for the company’s average natural gas sales prices for the U.S. and international regions.)
The company’s worldwide net oil-equivalent production in the first three months of 2021 averaged 3.121 million barrels per day, 4 percent lower than the year-ago period. About 27 percent of the company’s net oil-equivalent production in the first three months of 2021 occurred in OPEC+ member countries of Angola, Equatorial Guinea, Kazakhstan, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait and Republic of Congo.
The company expects that net oil-equivalent production for the full year 2021 to increase by up to 3 percent compared to 2020, assuming a Brent crude oil price of $50 per barrel and excluding the impact of anticipated asset sales. This estimate is subject to many factors and uncertainties, including quotas or other actions that may be imposed by OPEC and other producing countries; price effects on entitlement volumes; changes in fiscal terms or restrictions on the scope of company operations; delays in construction; reservoir performance; greater-than-expected declines in production from mature fields; start-up or ramp-up of projects; fluctuations in demand for crude-oil and natural gas in various markets; weather conditions that may shut in production; civil unrest; changing geopolitics; delays in completion of maintenance turnarounds; storage constraints or economic conditions that could lead to shut-in production; or other disruptions to operations. The outlook for future production levels is also affected by the size and number of economic investment opportunities and the time lag between initial exploration and the beginning of production. The company has increased its investment emphasis on shorter-cycle projects, to more easily respond to changes in supply/demand balance.
26

Refer to the “Results of Operations” section on page 28 for additional discussion of the company’s upstream business.
Downstream Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and marketing of products that include gasoline, diesel, jet fuel, lubricants, fuel oil, fuel and lubricant additives, and petrochemicals. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events.
Other factors affecting profitability for downstream operations include the reliability and efficiency of the company’s refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the volatility of tanker-charter rates for the company’s shipping operations, which are driven by the industry’s demand for crude oil and product tankers. Other factors beyond the company’s control include the general level of inflation and energy costs to operate the company’s refining, marketing and petrochemical assets, and changes in regulations and tax laws.
The company’s most significant marketing areas are the West Coast and Gulf Coast of the United States and Asia. Chevron operates or has significant ownership interests in refineries in each of these areas.
Refer to the “Results of Operations” section on page 29 for additional discussion of the company’s downstream operations.
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.
Operating Developments
Noteworthy operating developments in recent months included the following:
Equatorial Guinea - Announced the start-up and first LNG cargo from the Alen Gas Monetization Project.
Japan - Announced its wholly-owned subsidiary Chevron U.S.A. Inc. has signed a binding Sale and Purchase Agreement with Hokkaido Gas Co., Ltd. for the delivery of about a half million tons of liquefied natural gas to the Hokkaido area over a period of five years starting in 2022.
Sweden - Announced an investment in Baseload Capital AB, a private investment company focused on development and operation of low-temperature geothermal and heat power assets.
United States - Announced the launch of Chevron's $300 million Future Energy Fund II focused on technologies that have the potential to enable affordable, reliable, and ever-cleaner energy for all.
United States - Announced a definitive agreement to acquire all of the publicly held common units representing limited partner interests in Noble Midstream Partners LP not already owned by Chevron and its affiliates.
United States - Announced plans with partners to develop carbon negative bioenergy in Mendota, California.
United States - Announced an investment in Starfire Energy, which develops modular chemical plants for the production of carbon-free ammonia and carbon-free hydrogen.
United States - Announced an investment in Ocergy Inc. and its floating offshore wind turbine technology.
United States - Announced in April 2021 the commissioning and start-up of the world’s first commercial-scale ISOALKY™ process unit at the Salt Lake City Refinery. This proprietary technology uses ionic liquids to produce a high octane gasoline blending component as a cost-effective alternative to conventional alkylation technologies and offers environmental and process safety advantages.
United States - Announced in April 2021 a memorandum of understanding with Toyota Motor North America, Inc. to explore a strategic alliance to catalyze and lead the development of commercially viable, large-scale businesses in hydrogen.
27

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 6, beginning on page 11, for a discussion of the company’s “reportable segments,” as defined under the accounting standards for segment reporting.)
Upstream
  Three Months Ended
March 31
2021 2020
  (Millions of dollars)
U.S. Upstream Earnings $ 941  $ 241 
U.S. upstream operations reported earnings of $941 million in first quarter 2021, compared with $241 million from a year earlier. The increase was primarily due to higher crude oil and natural gas realizations of $590 million.
The average realization per barrel for U.S. crude oil and natural gas liquids in first quarter 2021 was $48 compared with $37 a year earlier. The average natural gas realization in first quarter 2021 was $2.15 per thousand cubic feet, compared with $0.60 in the 2020 period.
Net oil-equivalent production of 1.08 million barrels per day in first quarter 2021 was up 11,000 barrels per day, or 1 percent, from a year earlier. The increase was due to 210,000 barrels per day of production from the Noble acquisition, partially offset by a 68,000 barrel per day decrease related to the Appalachian asset sale, weather effects from winter storm Uri and normal field declines. The net liquids component of oil-equivalent production of 802,000 barrels per day in first quarter 2021 was essentially unchanged from the corresponding 2020 period. Net natural gas production was 1.64 billion cubic feet per day in first quarter 2021, an increase of 5 percent from the 2020 comparative period.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
International Upstream Earnings* $ 1,409  $ 2,679 
_____________________________
*  Includes foreign currency effects $ (52) $ 468 
International upstream operations reported earnings of $1.41 billion in first quarter 2021, compared with earnings of $2.68 billion a year ago. The decrease in earnings was primarily due to lower sales volumes of $480 million, the absence of a 2020 gain on the sale of Philippine assets of $240 million, lower trading results of $200 million, lower natural gas realizations of $190 million and lower tax items of $140 million. These decreases were partially offset by higher crude oil realizations of $610 million. Foreign currency effects had an unfavorable impact on earnings of $520 million between periods.
The average realization per barrel of crude oil and natural gas liquids in first quarter 2021 was $56, compared with $43 a year earlier. The average natural gas realization in first quarter 2021 was $4.72 per thousand cubic feet, compared with $5.66 in the 2020 period.
International net oil-equivalent production of 2.05 million barrels per day in first quarter 2021 decreased 125,000 barrels per day, or 6 percent, from the corresponding 2020 period. Higher production of 138,000 barrels per day from the Noble acquisition and the resumption of production in the Partitioned Zone between Saudi Arabia and Kuwait was more than offset by asset sale-related decreases of 51,000 barrels per day, unfavorable entitlement effects, absence of volumes in Venezuela where the company no longer reports production, Gorgon maintenance impacts, production curtailments and normal field declines. The net liquids component of oil-equivalent production of 1.02 million barrels per day in first quarter 2021 decreased 12 percent from the 2020 period. Net natural gas production of 6.13 billion cubic feet per day in first quarter 2021 increased 1 percent from the 2020 period.
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Downstream
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
U.S. Downstream Earnings $ (130) $ 450 
U.S. downstream operations reported a loss of $130 million in first quarter 2021, compared with earnings of $450 million a year earlier. The decrease was mainly due to lower margins on refined product sales of $470 million and lower sales volumes of $110 million.
Refinery crude oil input in first quarter 2021 decreased 9 percent to 881,000 barrels per day from the year-ago period, as the company reduced refinery runs in response to lower demand and impacts from winter storm Uri.
Total refined product sales of 1.05 million barrels per day were down 9 percent from first quarter 2020, mainly due to lower jet fuel, gasoline and diesel demand associated with the pandemic.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
International Downstream Earnings* $ 135  $ 653 
_______________________
*  Includes foreign currency effects $ 59  $ 60 
International downstream operations earned $135 million in first quarter 2021, compared with earnings of $653 million a year earlier. The decrease in earnings was largely due to lower margins on refined product sales of $590 million, partially offset by lower operating expenses of $60 million.
Refinery crude oil input of 536,000 barrels per day in first quarter 2021 decreased 16 percent from the year-ago period, primarily due to the demand impacts from the pandemic.
Total refined product sales of 1.27 million barrels per day in first quarter 2021 were essentially unchanged from the year-ago period.
All Other
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Earnings/(Charges)* $ (978) $ (424)
______________________
*  Includes foreign currency effects $ (9) $ (14)
All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies.
Net charges in first quarter 2021 were $978 million, compared with $424 million a year earlier. The change between periods was mainly due to higher employee benefit and pension settlement costs. Foreign currency effects decreased net charges by $5 million between periods.

29

Consolidated Statement of Income
Explanations of variations between periods for selected income statement categories are provided below:
  Three Months Ended
March 31
  2021 2020
 
Sales and other operating revenues $ 31,076  $ 29,705 
Sales and other operating revenues increased $1.37 billion in the first quarter, primarily due to higher crude oil, natural gas and refined product prices, partially offset by lower crude oil and refined product sales volumes.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Income from equity affiliates $ 911  $ 965 
Income from equity affiliates in the quarterly period decreased mainly due to lower upstream-related earnings from Petroboscan and Petropiar in Venezuela and lower downstream-related earnings from CPChem and GS Caltex in South Korea, partially offset by higher upstream-related earnings from Tengizchevroil in Kazakhstan and Angola LNG.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Other income (loss) $ 42  $ 831 
Other income for the first quarter period decreased due to an unfavorable swing in foreign exchange effects and lower gains on asset sales.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Purchased crude oil and products $ 17,568  $ 15,509 
Purchases increased $2.1 billion in the first quarter period, primarily due to higher crude oil, natural gas and refined product prices, partially offset by lower crude oil and refined product volumes.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Operating, selling, general and administrative expenses $ 5,957  $ 5,974 
Operating, selling, general and administrative expenses decreased between quarterly periods primarily due to lower maintenance and transportation expenses, partially offset by higher employee benefit expenses and legal reserves.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Exploration expenses $ 86  $ 158 
The decrease in exploration expenses for the first quarter period was mostly due to lower charges for well write-offs.
30

  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Depreciation, depletion and amortization $ 4,286  $ 4,288 
Depreciation, depletion and amortization expenses were slightly lower in the first quarter mainly due to lower production, partially offset by higher rates.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Taxes other than on income $ 1,420  $ 1,167 
Taxes other than on income were higher mainly due to higher regulatory expenses, taxes on production and payroll tax.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Interest and debt expense $ 198  $ 162 
Interest and debt expenses for the first quarter increased mainly due to interest expense associated with Noble debt.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Other components of net periodic benefit costs
$ 337  $ 98 
Other components of net periodic benefit costs for the first quarter increased due to higher pension settlement costs as a large number of lump-sum pension distributions were made following last year's restructuring.
  Three Months Ended
March 31
  2021 2020
  (Millions of dollars)
Income tax expense $ 779  $ 564 
The increase in income tax expense for the first quarter 2021 of $215 million is primarily the result of the higher international income tax charges for the current quarter.
U.S. income before tax decreased from $430 million in first quarter 2020 to a loss of $103 million in 2021. This decrease in income was primarily driven by lower downstream margins and higher employee costs, partially offset by higher prices. The decrease in income had a direct impact on the company’s U.S. income tax resulting in a decrease to tax expense of $126 million between year-over-year periods, from a tax charge of $160 million in 2020 to $34 million in 2021.
International income before tax decreased from $3.72 billion in first quarter 2020 to $2.28 billion in 2021. This $1.44 billion decrease in income was primarily driven by unfavorable foreign exchange effects and the absence of a 2020 gain on the sale of Philippines assets together with lower sales volumes in 2021. The foreign exchange and absence of asset sale gains did not have significant tax impacts but, combined with the absence of a favorable international tax item, resulted in a $341 million increase in international income tax expense between year-over-year periods, from $404 million in 2020 to $745 million in 2021.
Additional information related to the company’s effective income tax rate is included in Note 10 to the Consolidated Financial Statements.
31

Selected Operating Data
The following table presents a comparison of selected operating data:
Selected Operating Data (1) (2)
Three Months Ended
March 31
2021 2020
U.S. Upstream
Net crude oil and natural gas liquids production (MBPD)
802  803 
Net natural gas production (MMCFPD)(3)
1,643  1,564 
Net oil-equivalent production (MBOEPD)
1,075  1,064 
Sales of natural gas (MMCFPD)
3,911  4,363 
Sales of natural gas liquids (MBPD)
169  208 
Revenue from net production
Liquids ($/Bbl) $ 47.70  $ 37.42 
Natural gas ($/MCF) $ 2.15  $ 0.60 
International Upstream
Net crude oil and natural gas liquids production (MBPD)(4)
1,024  1,163 
Net natural gas production (MMCFPD)(3)
6,127  6,049 
Net oil-equivalent production (MBOEPD)(4)
2,046  2,171 
Sales of natural gas (MMCFPD) 5,430  6,226 
Sales of natural gas liquids (MBPD) 76  59 
Revenue from liftings
Liquids ($/Bbl) $ 55.62  $ 42.64 
Natural gas ($/MCF) $ 4.72  $ 5.66 
U.S. and International Upstream
Total net oil-equivalent production (MBOEPD)(4)
3,121  3,235 
U.S. Downstream
Gasoline sales (MBPD)(5)
608  625 
Other refined product sales (MBPD) 442  534 
Total refined product sales (MBPD) 1,050  1,159 
Sales of natural gas liquids (MBPD) 29  27 
Refinery input (MBPD) 881  965 
International Downstream
Gasoline sales (MBPD)(5)
257  242 
Other refined product sales (MBPD) 670  675 
Share of affiliate sales (MBPD) 340  354 
Total refined product sales (MBPD) 1,267  1,271 
Sales of natural gas liquids (MBPD) 76  81 
Refinery input (MBPD) 536  635 
________________________________
(1)  Includes company share of equity affiliates.
(2)  MBPD — thousands of barrels per day; MMCFPD — millions of cubic feet per day; Bbl — Barrel; MCF — thousands of cubic feet; oil-equivalent gas conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil; MBOEPD — thousands of barrels of oil-equivalent per day.
(3)  Includes natural gas consumed in operations (MMCFPD):
United States 45  47 
International 558  607 
(4)  Includes net production of synthetic oil: