P3Yfalse--12-31Q1202000000934100.750.75600000000060000000002442676580244267658014300000000121.001.001000000001000000000012000000000560508479575697930Refer to Note 13, "Other Contingencies and Commitments" beginning on page 17. 0000093410 2020-01-01 2020-03-31 0000093410 2020-03-31 0000093410 2019-01-01 2019-03-31 0000093410 2019-12-31 0000093410 2019-03-31 0000093410 2018-12-31 0000093410 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-12-31 0000093410 us-gaap:NoncontrollingInterestMember 2018-12-31 0000093410 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-12-31 0000093410 us-gaap:RetainedEarningsMember 2019-03-31 0000093410 us-gaap:ParentMember 2019-12-31 0000093410 us-gaap:TreasuryStockMember 2019-03-31 0000093410 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-03-31 0000093410 us-gaap:NoncontrollingInterestMember 2019-03-31 0000093410 us-gaap:NoncontrollingInterestMember 2020-01-01 2020-03-31 0000093410 us-gaap:ParentMember 2019-01-01 2019-03-31 0000093410 us-gaap:ParentMember 2020-01-01 2020-03-31 0000093410 us-gaap:RetainedEarningsMember 2019-01-01 2019-03-31 0000093410 us-gaap:TreasuryStockMember 2019-01-01 2019-03-31 0000093410 us-gaap:TreasuryStockMember 2019-12-31 0000093410 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-01-01 2020-03-31 0000093410 us-gaap:ParentMember 2020-03-31 0000093410 us-gaap:NoncontrollingInterestMember 2019-12-31 0000093410 us-gaap:NoncontrollingInterestMember 2019-01-01 2019-03-31 0000093410 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-03-31 0000093410 us-gaap:TreasuryStockMember 2020-01-01 2020-03-31 0000093410 us-gaap:RetainedEarningsMember 2020-01-01 2020-03-31 0000093410 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2018-12-31 0000093410 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2020-01-01 2020-03-31 0000093410 us-gaap:RetainedEarningsMember 2020-03-31 0000093410 us-gaap:TreasuryStockMember 2020-03-31 0000093410 us-gaap:TreasuryStockMember 2018-12-31 0000093410 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2019-01-01 2019-03-31 0000093410 us-gaap:RetainedEarningsMember 2018-12-31 0000093410 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2020-03-31 0000093410 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2018-12-31 0000093410 us-gaap:AociIncludingPortionAttributableToNoncontrollingInterestMember 2020-03-31 0000093410 us-gaap:NoncontrollingInterestMember 2020-03-31 0000093410 us-gaap:CommonStockIncludingAdditionalPaidInCapitalMember 2019-01-01 2019-03-31 0000093410 us-gaap:ParentMember 2018-12-31 0000093410 us-gaap:RetainedEarningsMember 2019-12-31 0000093410 us-gaap:ParentMember 2019-03-31 0000093410 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-03-31 0000093410 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2020-01-01 2020-03-31 0000093410 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-01-01 2020-03-31 0000093410 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-01-01 2019-03-31 0000093410 us-gaap:AccumulatedTranslationAdjustmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-12-31 0000093410 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2018-12-31 0000093410 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-03-31 0000093410 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-01-01 2019-03-31 0000093410 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2020-03-31 0000093410 us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2019-03-31 0000093410 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2018-12-31 0000093410 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2019-12-31 0000093410 us-gaap:AccumulatedTranslationAdjustmentMember 2018-12-31 0000093410 us-gaap:AccumulatedNetUnrealizedInvestmentGainLossMember 2018-12-31 0000093410 us-gaap:AccumulatedTranslationAdjustmentMember 2019-12-31 0000093410 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-12-31 0000093410 us-gaap:AccumulatedTranslationAdjustmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2020-03-31 0000093410 us-gaap:AccumulatedTranslationAdjustmentMember 2020-03-31 0000093410 us-gaap:AccumulatedTranslationAdjustmentMember 2019-03-31 0000093410 us-gaap:AccumulatedNetGainLossFromDesignatedOrQualifyingCashFlowHedgesMember 2019-03-31 0000093410 us-gaap:ReclassificationOutOfAccumulatedOtherComprehensiveIncomeMember us-gaap:AccumulatedDefinedBenefitPlansAdjustmentMember 2020-01-01 2020-03-31 0000093410 cvx:TengizchevroilLlpMember 2020-03-31 0000093410 cvx:TengizchevroilLlpMember 2020-03-31 0000093410 cvx:TengizchevroilLlpMember 2020-01-01 2020-03-31 0000093410 cvx:TengizchevroilLlpMember 2019-01-01 2019-03-31 0000093410 cvx:ChevronPhillipsChemicalCompanyLlcMember 2020-01-01 2020-03-31 0000093410 cvx:ChevronPhillipsChemicalCompanyLlcMember us-gaap:OilAndGasMember 2020-01-01 2020-03-31 0000093410 cvx:ChevronPhillipsChemicalCompanyLlcMember 2019-01-01 2019-12-31 0000093410 cvx:ChevronPhillipsChemicalCompanyLlcMember us-gaap:OilAndGasMember 2019-01-01 2019-12-31 0000093410 cvx:ChevronPhillipsChemicalCompanyLlcMember 2020-03-31 0000093410 cvx:ChevronPhillipsChemicalCompanyLlcMember 2020-03-31 0000093410 cvx:ChevronUsaIncMember 2019-01-01 2019-03-31 0000093410 cvx:ChevronUsaIncMember 2020-01-01 2020-03-31 0000093410 cvx:ChevronUsaIncMember 2019-12-31 0000093410 cvx:ChevronUsaIncMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember country:US us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember country:US us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:CorporateNonSegmentMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2019-01-01 2019-03-31 0000093410 us-gaap:OilAndGasMember us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember country:US 2019-01-01 2019-03-31 0000093410 srt:GeographyEliminationsMember us-gaap:OilAndGasMember country:US 2020-01-01 2020-03-31 0000093410 us-gaap:CorporateNonSegmentMember us-gaap:OilAndGasMember 2019-01-01 2019-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OilAndGasMember 2020-01-01 2020-03-31 0000093410 us-gaap:CorporateNonSegmentMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember 2020-01-01 2020-03-31 0000093410 us-gaap:OilAndGasMember 2019-01-01 2019-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember country:US us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OilAndGasMember us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2020-01-01 2020-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember country:US 2020-01-01 2020-03-31 0000093410 srt:GeographyEliminationsMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 cvx:CorporateAndEliminationsMember us-gaap:OilAndGasMember 2019-01-01 2019-03-31 0000093410 us-gaap:CorporateNonSegmentMember us-gaap:OilAndGasMember country:US 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2019-01-01 2019-03-31 0000093410 us-gaap:CorporateNonSegmentMember us-gaap:OilAndGasMember country:US 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember 2019-01-01 2019-03-31 0000093410 cvx:CorporateAndEliminationsMember us-gaap:OilAndGasMember 2020-01-01 2020-03-31 0000093410 us-gaap:OilAndGasMember us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember country:US 2020-01-01 2020-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 srt:GeographyEliminationsMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 srt:GeographyEliminationsMember us-gaap:OilAndGasMember country:US 2019-01-01 2019-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember country:US us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember country:US us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:CorporateNonSegmentMember us-gaap:OilAndGasMember 2020-01-01 2020-03-31 0000093410 us-gaap:OilAndGasMember us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember country:US us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember us-gaap:NonUsMember 2019-01-01 2019-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember country:US us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:IntersegmentEliminationMember us-gaap:OilAndGasMember country:US 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:OilAndGasMember country:US us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:MaterialReconcilingItemsMember 2019-12-31 0000093410 us-gaap:MaterialReconcilingItemsMember country:US 2019-12-31 0000093410 country:US 2019-12-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:DownstreamEquipmentMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:DownstreamEquipmentMember 2019-12-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:UpstreamEquipmentMember 2020-03-31 0000093410 us-gaap:MaterialReconcilingItemsMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:UpstreamEquipmentMember 2019-12-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2019-12-31 0000093410 us-gaap:MaterialReconcilingItemsMember us-gaap:NonUsMember 2019-12-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2019-12-31 0000093410 us-gaap:NonUsMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember 2019-12-31 0000093410 us-gaap:NonUsMember 2019-12-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:DownstreamEquipmentMember 2019-12-31 0000093410 us-gaap:OperatingSegmentsMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:DownstreamEquipmentMember 2020-03-31 0000093410 country:US 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:UpstreamEquipmentMember 2019-12-31 0000093410 us-gaap:MaterialReconcilingItemsMember us-gaap:NonUsMember 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:UpstreamEquipmentMember 2020-03-31 0000093410 us-gaap:MaterialReconcilingItemsMember country:US 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:MaterialReconcilingItemsMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:DownstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:NonUsMember us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:MaterialReconcilingItemsMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:UpstreamEquipmentMember 2019-01-01 2019-03-31 0000093410 us-gaap:OperatingSegmentsMember country:US us-gaap:DownstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 us-gaap:OperatingSegmentsMember us-gaap:UpstreamEquipmentMember 2020-01-01 2020-03-31 0000093410 country:US us-gaap:PensionPlansDefinedBenefitMember 2019-01-01 2019-03-31 0000093410 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2019-01-01 2019-03-31 0000093410 us-gaap:PensionPlansDefinedBenefitMember 2019-01-01 2019-03-31 0000093410 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2020-01-01 2020-03-31 0000093410 us-gaap:PensionPlansDefinedBenefitMember 2020-01-01 2020-03-31 0000093410 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2019-01-01 2019-03-31 0000093410 us-gaap:ForeignPlanMember us-gaap:PensionPlansDefinedBenefitMember 2020-01-01 2020-03-31 0000093410 country:US us-gaap:PensionPlansDefinedBenefitMember 2020-01-01 2020-03-31 0000093410 us-gaap:ForeignPlanMember 2020-03-31 0000093410 country:US 2020-03-31 0000093410 us-gaap:OtherPostretirementBenefitPlansDefinedBenefitMember 2020-03-31 0000093410 us-gaap:DisposalGroupHeldForSaleOrDisposedOfBySaleNotDiscontinuedOperationsMember 2020-03-31 0000093410 cvx:EcuadorLitigationMember us-gaap:PendingLitigationMember 2011-02-01 2011-02-28 0000093410 cvx:MtbeMember us-gaap:PendingLitigationMember 2020-03-31 0000093410 cvx:EcuadorLitigationMember us-gaap:PendingLitigationMember 2011-02-28 0000093410 cvx:EcuadorLitigationMember us-gaap:PendingLitigationMember 2012-01-31 0000093410 cvx:EcuadorLitigationMember us-gaap:PendingLitigationMember 2013-11-13 2013-11-13 0000093410 cvx:EcuadorLitigationMember cvx:DeclaratoryReliefClaimMember 2020-03-31 0000093410 cvx:EcuadorLitigationMember us-gaap:PendingLitigationMember 1991-01-01 1991-12-31 0000093410 2009-12-31 0000093410 stpr:LA 2020-03-31 0000093410 cvx:ChevronUsaIncMember stpr:LA 2020-03-31 0000093410 country:VE 2020-03-31 0000093410 country:VE 2020-01-01 2020-03-31 0000093410 us-gaap:FairValueMeasurementsNonrecurringMember 2020-01-01 2020-03-31 0000093410 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsNonrecurringMember 2020-03-31 0000093410 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsNonrecurringMember 2020-03-31 0000093410 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsNonrecurringMember 2020-03-31 0000093410 us-gaap:FairValueMeasurementsNonrecurringMember 2020-03-31 0000093410 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2019-12-31 0000093410 srt:MaximumMember 2020-01-01 2020-03-31 0000093410 us-gaap:FairValueInputsLevel1Member us-gaap:CorporateBondSecuritiesMember 2020-03-31 0000093410 us-gaap:CarryingReportedAmountFairValueDisclosureMember 2020-03-31 0000093410 us-gaap:FairValueInputsLevel2Member us-gaap:OtherLongTermInvestmentsMember 2020-03-31 0000093410 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2020-03-31 0000093410 us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0000093410 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000093410 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0000093410 us-gaap:FairValueInputsLevel2Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0000093410 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000093410 us-gaap:FairValueInputsLevel1Member us-gaap:FairValueMeasurementsRecurringMember 2019-12-31 0000093410 us-gaap:FairValueInputsLevel3Member us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000093410 us-gaap:FairValueMeasurementsRecurringMember 2020-03-31 0000093410 us-gaap:EstimateOfFairValueFairValueDisclosureMember 2019-12-31 0000093410 us-gaap:AccountsPayableMember us-gaap:CommodityContractMember 2020-03-31 0000093410 cvx:DeferredCreditsAndOtherNoncurrentObligationsMember us-gaap:CommodityContractMember 2020-03-31 0000093410 us-gaap:CommodityContractMember 2019-12-31 0000093410 cvx:AccountsAndNotesReceivableNetMember us-gaap:CommodityContractMember 2020-03-31 0000093410 us-gaap:CommodityContractMember 2020-03-31 0000093410 us-gaap:AccountsPayableMember us-gaap:CommodityContractMember 2019-12-31 0000093410 cvx:DeferredCreditsAndOtherNoncurrentObligationsMember us-gaap:CommodityContractMember 2019-12-31 0000093410 cvx:AccountsAndNotesReceivableNetMember us-gaap:CommodityContractMember 2019-12-31 0000093410 cvx:LongTermReceivablesNetMember us-gaap:CommodityContractMember 2020-03-31 0000093410 cvx:LongTermReceivablesNetMember us-gaap:CommodityContractMember 2019-12-31 0000093410 us-gaap:CommodityContractMember cvx:PurchasedCrudeOilAndProductsMember 2020-01-01 2020-03-31 0000093410 us-gaap:CommodityContractMember us-gaap:SalesMember 2019-01-01 2019-03-31 0000093410 us-gaap:CommodityContractMember us-gaap:OtherIncomeMember 2020-01-01 2020-03-31 0000093410 us-gaap:CommodityContractMember us-gaap:SalesMember 2020-01-01 2020-03-31 0000093410 us-gaap:CommodityContractMember 2020-01-01 2020-03-31 0000093410 us-gaap:CommodityContractMember cvx:PurchasedCrudeOilAndProductsMember 2019-01-01 2019-03-31 0000093410 us-gaap:CommodityContractMember 2019-01-01 2019-03-31 0000093410 us-gaap:CommodityContractMember us-gaap:OtherIncomeMember 2019-01-01 2019-03-31 0000093410 us-gaap:AccountingStandardsUpdate201613Member 2020-01-01 utreg:bbl utreg:D xbrli:pure xbrli:shares iso4217:USD xbrli:shares cvx:LegalMatter iso4217:USD cvx:segment

 
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, 2020
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: (925842-1000
 
 
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 1,866,978,650 shares of the Company's common stock outstanding on March 31, 2020.
 



TABLE OF CONTENTS
 
 
 
Page No.
 
FINANCIAL INFORMATION
 
 
 
 
 
 
 
OTHER INFORMATION
Item 5.

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,” “forecasts,” “projects,” “believes,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “may,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on schedule,” “on track,” “is slated,” “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; crude oil production quotas or other actions that might be imposed by the Organization of Petroleum Exporting Countries 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 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 21 of the company’s 2019 Annual Report on Form 10-K, on pages 37 and 38 of this report 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
 
2020

 
2019

 
(Millions of dollars, except per share amounts)
Revenues and Other Income
 
 
 
Sales and other operating revenues
$
29,705

 
$
34,189

Income from equity affiliates
965

 
1,062

Other income (loss)
831

 
(51
)
Total Revenues and Other Income
31,501

 
35,200

Costs and Other Deductions
 
 
 
Purchased crude oil and products
15,509

 
19,703

Operating expenses
5,291

 
4,886

Selling, general and administrative expenses
683

 
984

Exploration expenses
158

 
189

Depreciation, depletion and amortization
4,288

 
4,094

Taxes other than on income
1,167

 
1,061

Interest and debt expense
162

 
225

Other components of net periodic benefit costs
98

 
101

Total Costs and Other Deductions
27,356

 
31,243

Income Before Income Tax Expense
4,145

 
3,957

Income Tax Expense (Benefit)
564

 
1,315

Net Income (Loss)
3,581

 
2,642

Less: Net income (loss) attributable to noncontrolling interests
(18
)
 
(7
)
Net Income (Loss) Attributable to Chevron Corporation
$
3,599

 
$
2,649

Per Share of Common Stock
 
 
 
Net Income (Loss) Attributable to Chevron Corporation
 
 
 
- Basic
$
1.93

 
$
1.40

- Diluted
$
1.93

 
$
1.39

Weighted Average Number of Shares Outstanding (000s)
 
 
 
- Basic
1,862,273

 
1,888,002

- Diluted
1,865,649

 
1,900,748

 
 
 
 
 
 
 
 
 
 
 


See accompanying notes to consolidated financial statements.

3



CHEVRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(Unaudited)

 
Three Months Ended
March 31
 
2020
 
2019
 
(Millions of dollars)
Net Income (Loss)
$
3,581

 
$
2,642

Currency translation adjustment
(19
)
 
(4
)
Unrealized holding gain (loss) on securities
 
 
 
Net gain (loss) arising during period
(3
)
 
(1
)
Defined benefit plans
 
 
 
Actuarial gain (loss)
 
 
 
Amortization to net income of net actuarial loss and settlements
166

 
125

Actuarial gain (loss) arising during period

 
(3
)
Prior service credits (cost)
 
 
 
Amortization to net income of net prior service costs and curtailments
(3
)
 
(4
)
Prior service (costs) credits arising during period

 

Defined benefit plans sponsored by equity affiliates - benefit (cost)
2

 
2

Income (taxes) benefit on defined benefit plans
(37
)
 
(30
)
Total
128

 
90

Other Comprehensive Gain (Loss), Net of Tax
106

 
85

Comprehensive Income
3,687

 
2,727

Comprehensive loss (income) attributable to noncontrolling interests
18

 
7

Comprehensive Income (Loss) Attributable to Chevron Corporation
$
3,705

 
$
2,734


See accompanying notes to consolidated financial statements.

4



CHEVRON CORPORATION AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(Unaudited)
 
 
At March 31,
2020
 
At December 31,
2019
 
 
(Millions of dollars)
Assets
 
 
 
 
Cash and cash equivalents
 
$
8,492

 
$
5,686

Marketable securities
 
50

 
63

Accounts and notes receivable, net
 
10,167

 
13,325

Inventories:
 
 
 
 
Crude oil and petroleum products
 
4,425

 
3,722

Chemicals
 
494

 
492

Materials, supplies and other
 
1,655

 
1,634

Total inventories
 
6,574

 
5,848

Prepaid expenses and other current assets
 
3,279

 
3,407

Total Current Assets
 
28,562

 
28,329

Long-term receivables, net
 
1,243

 
1,511

Investments and advances
 
39,693

 
38,688

Properties, plant and equipment, at cost
 
326,412

 
326,722

Less: Accumulated depreciation, depletion and amortization
 
177,192

 
176,228

Properties, plant and equipment, net
 
149,220

 
150,494

Deferred charges and other assets
 
10,516

 
10,532

Goodwill
 
4,454

 
4,463

Assets held for sale
 
2,989

 
3,411

Total Assets
 
$
236,677

 
$
237,428

Liabilities and Equity
 
 
 
 
Short-term debt 
 
$
8,688

 
$
3,282

Accounts payable
 
11,006

 
14,103

Accrued liabilities
 
6,263

 
6,589

Federal and other taxes on income
 
1,534

 
1,554

Other taxes payable
 
744

 
1,002

Total Current Liabilities
 
28,235

 
26,530

Long-term debt
 
23,663

 
23,691

Deferred credits and other noncurrent obligations
 
18,677

 
20,445

Noncurrent deferred income taxes
 
13,457

 
13,688

Noncurrent employee benefit plans
 
7,731

 
7,866

Total Liabilities*
 
$
91,763

 
$
92,220

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, 2020 and December 31, 2019)
 
1,832

 
1,832

Capital in excess of par value
 
17,275

 
17,265

Retained earnings
 
176,113

 
174,945

Accumulated other comprehensive losses
 
(4,884
)
 
(4,990
)
Deferred compensation and benefit plan trust
 
(240
)
 
(240
)
Treasury stock, at cost (575,697,930 and 560,508,479 shares at March 31, 2020 and December 31, 2019, respectively)
 
(46,166
)
 
(44,599
)
Total Chevron Corporation Stockholders’ Equity
 
143,930

 
144,213

Noncontrolling interests
 
984

 
995

Total Equity
 
144,914

 
145,208

Total Liabilities and Equity
 
$
236,677

 
$
237,428

___________________________
 
 
 
 
* Refer to Note 13, 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
 
2020
 
2019
 
(Millions of dollars)
Operating Activities
 
 
 
Net Income (Loss)
$
3,581

 
$
2,642

Adjustments
 
 
 
Depreciation, depletion and amortization
4,288

 
4,094

Dry hole expense
50

 
86

Distributions less than income from equity affiliates
(639
)
 
(513
)
Net before-tax losses (gains) on asset retirements and sales
(226
)
 
80

Net foreign currency effects
(403
)
 
141

Deferred income tax provision
58

 
73

Net decrease (increase) in operating working capital
(1,096
)
 
(1,210
)
Decrease (increase) in long-term receivables
239

 
66

Net decrease (increase) in other deferred charges
(43
)
 
(62
)
Cash contributions to employee pension plans
(213
)
 
(326
)
Other
(874
)
 
(14
)
Net Cash Provided by Operating Activities
4,722

 
5,057

Investing Activities
 
 
 
Capital expenditures
(3,133
)
 
(2,953
)
Proceeds and deposits related to asset sales and returns of investment
374

 
294

Net maturities of (investments in) time deposits

 
950

Net sales (purchases) of marketable securities

 
2

Net repayment (borrowing) of loans by equity affiliates
(399
)
 
(321
)
Net Cash Used for Investing Activities
(3,158
)
 
(2,028
)
Financing Activities
 
 
 
Net borrowings (repayments) of short-term obligations
8,167

 
936

Proceeds from issuances of long-term debt

 

Repayments of long-term debt and other financing obligations
(2,809
)
 
(2,506
)
Cash dividends - common stock
(2,402
)
 
(2,244
)
Distributions to noncontrolling interests
(5
)
 
(6
)
Net sales (purchases) of treasury shares
(1,573
)
 
(15
)
Net Cash Provided by (Used for) Financing Activities
1,378

 
(3,835
)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash
(163
)
 
20

Net Change in Cash, Cash Equivalents and Restricted Cash
2,779

 
(786
)
Cash, Cash Equivalents and Restricted Cash at January 1
6,911

 
10,481

Cash, Cash Equivalents and Restricted Cash at March 31
$
9,690

 
$
9,695

 
 
 
 


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, 2018
$
18,704

$
180,987

$
(3,544
)
$
(41,593
)
$
154,554

$
1,088

$
155,642

Treasury stock transactions
34




34


34

Net income (loss)

2,649



2,649

(7
)
2,642

Cash dividends

(2,244
)


(2,244
)
(6
)
(2,250
)
Stock dividends

(1
)


(1
)

(1
)
Other comprehensive income


85


85


85

Purchases of treasury shares



(538
)
(538
)

(538
)
Issuances of treasury shares



510

510


510

Other changes, net

(4
)


(4
)
(2
)
(6
)
Balance at March 31, 2019
$
18,738

$
181,387

$
(3,459
)
$
(41,621
)
$
155,045

$
1,073

$
156,118

 
 
 
 
 
 
 
 
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

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
(Number of Shares)
Common Stock - 2020
 
Common Stock - 2019
Three Months Ended March 31
Issued(2)

Treasury

Outstanding

 
Issued(2)

Treasury

Outstanding

Balance at December 31
2,442,676,580

(560,508,479
)
1,882,168,101

 
2,442,676,580

(539,838,890
)
1,902,837,690

Purchases

(17,501,102
)
(17,501,102
)
 

(4,710,696
)
(4,710,696
)
Issuances

2,311,651

2,311,651

 

6,599,067

6,599,067

Balance at March 31
2,442,676,580

(575,697,930
)
1,866,978,650

 
2,442,676,580

(537,950,519
)
1,904,726,061

_________________________________________________
(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, 2020, 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 2019 Annual Report on Form 10-K.
Impact of the novel coronavirus (COVID-19) pandemic The outbreak of COVID-19 and decreases in commodity prices resulting from oversupply and government-imposed travel restrictions have caused a significant decrease in the demand for our products and has created disruptions and volatility in the global marketplace beginning in the first quarter 2020, which negatively affected our results of operations and cash flows. These conditions have persisted into the second quarter, including a further collapse in commodity prices, and are expected to negatively affect our results of operations and cash flows. There remains a continuing uncertainty regarding the length and impact of the COVID-19 pandemic and associated reductions in demand for our products, on the energy industry and the outlook for our business.
Note 2. 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, 2020 and 2019 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
 
Derivatives
 
Defined Benefit Plans
 
Total
Balance at December 31, 2018
 
$
(124
)
 
$
(10
)
 
$
(2
)
 
$
(3,408
)
 
$
(3,544
)
Components of Other Comprehensive Income (Loss):
 
 
 
 
 
 
 
Before Reclassifications
 
(4
)
 
(1
)
 

 
(4
)
 
(9
)
Reclassifications
 

 

 

 
94

 
94

Net Other Comprehensive Income (Loss)
 
(4
)
 
(1
)
 

 
90

 
85

Balance at March 31, 2019
 
$
(128
)
 
$
(11
)
 
$
(2
)
 
$
(3,318
)
 
$
(3,459
)
 
 
 
 
 
 
 
 
 
 
 
Balance at December 31, 2019
 
$
(142
)
 
$
(8
)
 
$

 
$
(4,840
)
 
$
(4,990
)
Components of Other Comprehensive Income (Loss):
 
 
 
 
 
 
Before Reclassifications
 
(19
)
 
(3
)
 

 
2

 
(20
)
Reclassifications(2)
 

 

 

 
126

 
126

Net Other Comprehensive Income (Loss)
 
(19
)
 
(3
)
 

 
128

 
106

Balance at March 31, 2020
 
$
(161
)
 
$
(11
)
 
$

 
$
(4,712
)
 
$
(4,884
)
_______________________________
(1) 
All amounts are net of tax.
(2) 
Refer to Note 9, Employee Benefits for reclassified components totaling $163 million that are included in employee benefit costs for the three months ended March 31, 2020. Related income taxes for the same period, totaling $37 million, are reflected in “Income Tax Expense” on the Consolidated Statement of Income. All other reclassified amounts were insignificant.
Note 3. New Accounting Standards
Financial Instruments - Credit Losses (Topic 326) Effective January 1, 2020, Chevron adopted Accounting Standards Update (ASU) 2016-13 and its related amendments. For additional information on the company's expected credit losses, refer to Note 17 beginning on page 22.

8

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 4. Information Relating to the Consolidated Statement of Cash Flows
 
Three Months Ended
March 31
 
2020
 
2019
 
(Millions of dollars)
Net decrease (increase) in operating working capital was composed of the following:
Decrease (increase) in accounts and notes receivable
$
2,986

 
$
473

Decrease (increase) in inventories
(733
)
 
(1,098
)
Decrease (increase) in prepaid expenses and other current assets
120

 
(667
)
Increase (decrease) in accounts payable and accrued liabilities
(3,268
)
 
(160
)
Increase (decrease) in income and other taxes payable
(201
)
 
242

Net decrease (increase) in operating working capital
$
(1,096
)
 
$
(1,210
)
Net cash provided by operating activities includes the following cash payments:
Interest on debt (net of capitalized interest)
$
106

 
$
186

  Income taxes
981

 
757

Proceeds and deposits related to asset sales and returns of investment consisted of the following gross amounts:
 
 
 
Proceeds and deposits related to asset sales
$
363

 
$
276

Returns of investment from equity affiliates
11

 
18

Proceeds and deposits related to asset sales and returns of investment
$
374

 
$
294

Net maturities of (investments in) time deposits consisted of the following gross amounts:
Investments in time deposits
$

 
$

Maturities of time deposits

 
950

Net maturities of (investments in) time deposits
$

 
$
950

Net sales (purchases) of marketable securities consisted of the following gross amounts:
Marketable securities purchased
$

 
$
(1
)
Marketable securities sold

 
3

Net sales (purchases) of marketable securities
$

 
$
2

Net repayment (borrowing) of loans by equity affiliates consisted of the following gross amounts:
 
 
 
Borrowing of loans by equity affiliates
$
(425
)
 
$
(350
)
Repayment of loans by equity affiliates
26

 
29

Net repayment (borrowing) of loans by equity affiliates
$
(399
)
 
$
(321
)
Net borrowings (repayments) of short-term obligations consisted of the following gross and net amounts:
 
 
 
Proceeds from issuances of short-term obligations
$
4,952

 
$
359

Repayments of short-term obligations
(1,010
)
 
(134
)
Net borrowings (repayments) of short-term obligations with three months or less maturity
4,225

 
711

Net borrowings (repayments) of short-term obligations
$
8,167

 
$
936

Net sales (purchases) of treasury shares consists of the following gross and net amounts:
 
 
 
Shares issued for share-based compensation plans
$
178

 
$
523

Shares purchased under share repurchase and deferred compensation plans
(1,751
)
 
(538
)
Net sales (purchases) of treasury shares
$
(1,573
)
 
$
(15
)

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 2020. This compares to dividends of $1.19 per share paid in the corresponding year-ago period.

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
 
2020
 
2019
 
(Millions of dollars)
Additions to properties, plant and equipment
$
3,071

 
$
2,865

Additions to investments
13

 
14

Current-year dry hole expenditures
49

 
74

Payments for other assets and liabilities, net

 

Capital expenditures
3,133

 
2,953

Expensed exploration expenditures
108

 
103

Assets acquired through finance lease obligations and other financing obligations

 
146

Payments for other assets and liabilities, net

 

Capital and exploratory expenditures, excluding equity affiliates
3,241

 
3,202

Company's share of expenditures by equity affiliates
1,183

 
1,532

Capital and exploratory expenditures, including equity affiliates
$
4,424

 
$
4,734


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
 
2020
 
2019
 
2019
 
2018
 
(Millions of dollars)
Cash and Cash Equivalents
$
8,492

 
$
8,699

 
$
5,686

 
$
9,342

Restricted cash included in “Prepaid expenses and other current assets”
434

 
195

 
452

 
341

Restricted cash included in “Deferred charges and other assets”
764

 
801

 
773

 
798

Total Cash, Cash Equivalents and Restricted Cash
$
9,690

 
$
9,695

 
$
6,911

 
$
10,481


Additional information related to “Restricted Cash” is included on page 20 in Note 14 under the heading “Restricted Cash.”
Note 5. 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
 
2020
 
2019
 
(Millions of dollars)
Sales and other operating revenues
$
3,296

 
$
4,107

Costs and other deductions
1,957

 
2,002

Net income attributable to TCO
$
938

 
$
1,481


Note 6. 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 below:


Three Months Ended
March 31
 
2020
 
2019
 
(Millions of dollars)
Sales and other operating revenues
$
2,195

 
$
2,377

Costs and other deductions
1,812

 
2,004

Net income attributable to CPChem
$
337

 
$
449



10

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 7. 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

2020
 
2019

(Millions of dollars)
Sales and other operating revenues
$
22,039

 
$
25,942

Costs and other deductions
21,281

 
25,757

Net income attributable to CUSA
$
860

 
$
181

 
 
 
 

 
At March 31,
2020
 
At December 31,
2019
 
(Millions of dollars)
Current assets
$
10,773

 
$
13,059

Other assets
51,449

 
50,796

Current liabilities
16,143

 
18,291

Other liabilities
12,630

 
12,565

Total CUSA net equity
$
33,449

 
$
32,999

Memo: Total debt
$
3,219

 
$
3,222


Note 8. 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 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, 2020 and 2019, are presented in the following table:
 
 
Three Months Ended
March 31
 
 
2020
 
2019
Segment Earnings
 
(Millions of dollars)
Upstream
 
 
 
 
United States
 
$
241

 
$
748

International
 
2,679

 
2,375

Total Upstream
 
2,920

 
3,123

Downstream
 
 
 
 
United States
 
450

 
217

International
 
653

 
35

Total Downstream
 
1,103

 
252

Total Segment Earnings
 
4,023

 
3,375

All Other
 
 
 
 
Interest expense
 
(154
)
 
(214
)
Interest income
 
23

 
50

Other
 
(293
)
 
(562
)
Net Income Attributable to Chevron Corporation
 
$
3,599

 
$
2,649


Segment Assets Segment assets do not include intercompany investments or intercompany receivables. “All Other” assets consist primarily of worldwide cash, cash equivalents, time deposits and marketable securities; real estate; information systems; technology companies; and assets of the corporate administrative functions. Segment assets at March 31, 2020, and December 31, 2019, are as follows: 
 
At March 31,
2020
 
At December 31,
2019
Segment Assets
(Millions of dollars)
Upstream
 
 
 
United States
$
35,974

 
$
35,926

International
143,779

 
145,648

Goodwill
4,454

 
4,463

Total Upstream
184,207

 
186,037

Downstream
 
 
 
United States
24,532

 
25,197

International
15,870

 
16,955

Total Downstream
40,402

 
42,152

Total Segment Assets
224,609

 
228,189

All Other
 
 
 
United States
5,688

 
3,475

International
6,380

 
5,764

Total All Other
12,068

 
9,239

Total Assets — United States
66,194

 
64,598

Total Assets — International
166,029

 
168,367

Goodwill
4,454

 
4,463

Total Assets
$
236,677

 
$
237,428



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, 2020 and 2019, 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

 
2020
 
2019
Sales and Other Operating Revenues
 
(Millions of dollars)
Upstream
 
 
 
 
United States
 
$
4,466

 
$
5,882

International
 
9,013

 
9,369

Subtotal
 
13,479

 
15,251

Intersegment Elimination — United States
 
(2,812
)
 
(3,519
)
Intersegment Elimination — International
 
(2,541
)
 
(3,292
)
Total Upstream
 
8,126

 
8,440

Downstream
 
 
 
 
United States
 
11,186

 
12,388

International
 
12,173

 
14,507

Subtotal
 
23,359

 
26,895

Intersegment Elimination — United States
 
(1,260
)
 
(947
)
Intersegment Elimination — International
 
(585
)
 
(265
)
Total Downstream
 
21,514

 
25,683

All Other
 
 
 
 
United States
 
210

 
222

International
 
2

 
2

Subtotal
 
212

 
224

Intersegment Elimination — United States
 
(145
)
 
(156
)
Intersegment Elimination — International
 
(2
)
 
(2
)
Total All Other
 
65

 
66

Sales and Other Operating Revenues
 
 
 
 
United States
 
15,862

 
18,492

International
 
21,188

 
23,878

Subtotal
 
37,050

 
42,370

Intersegment Elimination — United States
 
(4,217
)
 
(4,622
)
Intersegment Elimination — International
 
(3,128
)
 
(3,559
)
Total Sales and Other Operating Revenues
 
$
29,705

 
$
34,189


Note 9. 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.
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-

13

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


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 2020 and 2019 are as follows:
 
 
Three Months Ended
March 31
 
 
2020
 
2019
 
(Millions of dollars)
Pension Benefits
 
 
 
 
United States
 
 
 
 
Service cost
 
$
124

 
$
101

Interest cost
 
88

 
99

Expected return on plan assets
 
(162
)
 
(141
)
Amortization of prior service costs (credits)
 
1

 

Amortization of actuarial losses (gains)
 
96

 
60

Settlement losses
 
60

 
60

Total United States
 
207

 
179

International
 
 
 
 
Service cost
 
32

 
35

Interest cost
 
43

 
51

Expected return on plan assets
 
(52
)
 
(58
)
Amortization of prior service costs (credits)
 
2

 
3

Amortization of actuarial losses (gains)
 
10

 
5

Settlement losses
 

 
1

Total International
 
35

 
37

Net Periodic Pension Benefit Costs
 
$
242

 
$
216

Other Benefits*
 
 
 
 
Service cost
 
$
9

 
$
9

Interest cost
 
18

 
24

Amortization of prior service costs (credits)
 
(6
)
 
(7
)
Amortization of actuarial losses (gains)
 

 
(1
)
Net Periodic Other Benefit Costs
 
$
21

 
$
25

_ ___________________________________
* 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, 2020, a total of $213 million was contributed to employee pension plans (including $134 million to the U.S. plans). Total contributions for the full year are currently estimated to be $1.0 billion ($750 million for the U.S. plans and $250 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 2020, the company contributed $41 million to its OPEB plans. The company anticipates contributing approximately $133 million during the remainder of 2020.
Note 10. Assets Held For Sale
At March 31, 2020, the company classified $2.99 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 2019 and the first three months of 2020 were not material. In April 2020, the company completed the sale of its interest in the Azeri-Chirag-Gunashli fields and Baku-Tbilisi-Ceyhan pipeline in Azerbaijan, representing approximately half the value of the net properties, plant and equipment held for sale at March 31, 2020.

14

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Note 11. Income Taxes
The income tax expense decreased between quarterly periods from $1.32 billion in 2019 to $564 million in 2020. Income before income tax expense increased $190 million from $3.96 billion in 2019 to $4.15 billion in 2020 primarily due to higher downstream margins, production, foreign exchange and asset sales gains, partially offset by the impact of lower prices. The company’s effective tax rate changed between quarterly periods from 33 percent in 2019 to 14 percent in 2020. The reduction in the effective tax rate is primarily due to the resolution of international uncertain tax positions and foreign exchange and asset sale gains that were included in income before tax but collectively 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, 2020. For these jurisdictions, the latest years for which income tax examinations had been finalized were as follows: United States — 2013, Nigeria — 2007, Australia — 2009 and Kazakhstan — 2012.
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.
Note 12. Litigation
MTBE
Chevron and many other companies in the petroleum industry have 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. Additional lawsuits and claims related to the use of MTBE, including personal-injury claims, may be filed in the future. 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
Background Chevron is a defendant in civil litigation proceedings stemming from a lawsuit filed in the Superior Court for the province of Nueva Loja in Lago Agrio, Ecuador in May 2003 by plaintiffs who claim to be representatives of residents of an area where an oil production consortium formerly operated. The lawsuit alleged harm to the environment from the consortium’s oil production activities and sought monetary damages and other relief. Texaco Petroleum Company (Texpet), a subsidiary of Texaco Inc., was a minority member of the consortium from 1967 until 1992, with state-owned Petroecuador as the majority partner. Since 1992, Petroecuador has been the sole owner and operator in the concession area. After the termination of the consortium and following an independent third-party environmental audit of the concession area, in 1995, Texpet entered into a formal agreement with the Republic of Ecuador and Petroecuador under which Texpet agreed to remediate specific sites assigned by the government in proportion to Texpet’s minority share of the consortium. Pursuant to that agreement, Texpet conducted a three-year remediation program. After certifying that the assigned sites were properly remediated, in 1998, Ecuador granted Texpet and all related corporate entities a full release from any and all environmental liability arising from the consortium operations.
Chevron defended itself in the Lago Agrio lawsuit on the grounds that the claims lacked both legal and factual merit. As to matters of law, Chevron asserted that the court lacked jurisdiction, the plaintiffs sought to improperly

15

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


apply a 1999 law retroactively, the claims were time-barred, and the lawsuit was barred by releases signed by the Republic of Ecuador, Petroecuador, and the pertinent provincial and municipal governments. With regard to the facts, the company asserted that the evidence confirmed Texpet’s remediation was properly conducted and that any remaining environmental impacts reflected Petroecuador’s failure to timely fulfill its own legal obligation to remediate the concession area and Petroecuador’s conduct after it assumed control over operations. In February 2011, the provincial court rendered a judgment against Chevron, awarding approximately $8.6 billion in damages, plus approximately $900 million for the plaintiffs’ representatives, and approximately $8.6 billion in additional punitive damages unless the company issued a public apology within 15 days, which Chevron did not do. In January 2012, an appellate panel affirmed the judgment and ordered that Chevron pay an additional 0.10% in attorneys’ fees. In November 2013, Ecuador’s National Court of Justice ratified the judgment but nullified the $8.6 billion punitive damage assessment, resulting in a judgment of $9.5 billion. In December 2013, Chevron appealed the decision to Ecuador’s highest Constitutional Court, which rejected Chevron’s appeal in July 2018. No further appeals are available in Ecuador.
The Lago Agrio plaintiffs’ lawyers have sought to enforce the judgment in Ecuador and other jurisdictions. In May 2012, they filed a recognition and enforcement action against Chevron Corporation, Chevron Canada Limited and another subsidiary (which was later dismissed as a party) in the Superior Court of Justice in Ontario, Canada. In September 2015, the Supreme Court of Canada ruled that the Ontario Superior Court of Justice had jurisdiction over Chevron Corporation and Chevron Canada Limited for purposes of the action. In January 2017, the Superior Court ruled that Chevron Canada Limited and Chevron Corporation are separate legal entities with separate rights and obligations, and dismissed the action against Chevron Canada Limited. In May 2018, the Court of Appeal for Ontario upheld the dismissal of Chevron Canada Limited. The Supreme Court of Canada denied the plaintiffs’ application for leave to appeal in April 2019, rendering the dismissal of Chevron Canada Limited final. In July 2019, by consent of the parties, the Ontario Superior Court dismissed the recognition and enforcement action against Chevron Corporation with prejudice and with costs in favor of Chevron. In June 2012, the plaintiffs filed a recognition and enforcement action against Chevron Corporation in the Superior Court of Justice in Brasilia, Brazil. In May 2015, the Brazilian public prosecutor issued an opinion recommending that the court reject the plaintiffs’ action on grounds including that the Lago Agrio judgment was procured through fraud and corruption and violated Brazilian and international public order. In November 2017, the Superior Court of Justice dismissed the plaintiffs’ recognition and enforcement action on jurisdictional grounds, and in June 2018 the dismissal became final in Brazil. In October 2012, the provincial court in Ecuador issued an ex parte embargo order purporting to order the seizure of assets belonging to separate Chevron subsidiaries in Ecuador, Argentina and Colombia. In November 2012, at the request of the plaintiffs, a court in Argentina issued a freeze order against Chevron Argentina S.R.L. and another Chevron subsidiary. In January 2013, an appellate court upheld the freeze order, but in June 2013, the Supreme Court of Argentina revoked the freeze order in its entirety. In December 2013, Chevron was served with the plaintiffs’ complaint seeking recognition and enforcement of the judgment in Argentina. In April 2016, the public prosecutor in Argentina issued an opinion recommending rejection of the plaintiffs request to recognize the Ecuadorian judgment in Argentina. In November 2017, the National Court, First Instance, dismissed the complaint on jurisdictional grounds and the Federal Civil Court of Appeals affirmed the dismissal in July 2018. The plaintiffs’ appeal to the Supreme Court of Argentina remains pending. Chevron continues to believe the Ecuadorian judgment is illegitimate and unenforceable because it is the product of fraud and corruption, and contrary to the law and all legitimate scientific evidence. Chevron cannot predict the timing or outcome of any pending or threatened enforcement action, but expects to continue a vigorous defense against any imposition of liability and to contest and defend any and all enforcement actions.
In February 2011, Chevron filed a civil lawsuit in the U.S. District Court for the Southern District of New York against the Lago Agrio plaintiffs and several of their lawyers and supporters, asserting violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and state law. In March 2014, the District Court entered a judgment in favor of Chevron, finding that the Ecuadorian judgment had been procured through fraud, bribery and corruption, and prohibiting the RICO defendants from seeking to enforce the Lago Agrio judgment in the United States or profiting from their illegal acts. In August 2016, the U.S. Court of Appeals for the Second Circuit issued a unanimous decision affirming the New York judgment in full. In June 2017, the U.S. Supreme Court

16

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


denied the RICO defendants petition for a Writ of Certiorari, rendering the New York judgment in favor of Chevron final.
Chevron and Texpet filed an arbitration claim in September 2009 against the Republic of Ecuador before an arbitral tribunal administered by the Permanent Court of Arbitration in The Hague, under the Rules of the United Nations Commission on International Trade Law. The claim alleged violations of Ecuador’s obligations under the United States-Ecuador Bilateral Investment Treaty (BIT) and breaches of the settlement and release agreements between Ecuador and Texpet. In January 2012, the Tribunal issued its First Interim Measures Award requiring Ecuador to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and outside of Ecuador of any judgment against Chevron in the Lago Agrio case pending further order of the Tribunal. In February 2012, the Tribunal issued a Second Interim Award mandating that Ecuador take all measures necessary to suspend or cause to be suspended enforcement and recognition proceedings within and outside of Ecuador. Also in February 2012, the Tribunal issued a Third Interim Award confirming its jurisdiction to hear Chevron and Texpet’s claims. In February 2013, the Tribunal issued its Fourth Interim Award in which it declared that Ecuador had violated the First and Second Interim Awards. The Tribunal divided the merits phase of the arbitration into three phases. In September 2013, after the conclusion of Phase One, the Tribunal issued its First Partial Award, finding that the settlement agreements between Ecuador and Texpet applied to both Texpet and Chevron and released them from public environmental claims arising from the consortium’s operations, but did not preclude individual claims for personal harm. In August 2018, the Tribunal issued its Phase Two award, again in favor of Chevron and Texpet. The Tribunal unanimously held that the Lago Agrio judgment was procured through fraud, bribery and corruption and was based on public claims that Ecuador had settled and released. 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 found that: (i) Ecuador breached its obligations under the settlement agreements releasing Texpet and its affiliates from public environmental claims; (ii) Ecuador committed a denial of justice under international law and violated the U.S.-Ecuador BIT due to the fraud and corruption in the Lago Agrio litigation; and (iii) Texpet satisfied its environmental remediation obligations through the remediation program that Ecuador supervised and approved. The Tribunal ordered Ecuador to: (a) take immediate steps to remove the status of enforceability from the Ecuadorian judgment; (b) take measures to “wipe out all the consequences” of Ecuador’s “internationally wrongful acts in regard to the Ecuadorian judgment;” and (c) compensate Chevron for any injuries resulting from the Ecuadorian judgment. The final Phase Three of the arbitration, at which damages for Chevron’s injuries will be determined, was set for hearing in March 2021. Ecuador filed in the District Court of The Hague a request to set aside the Tribunal’s Interim Awards and its First Partial Award, and in January 2016 that court denied Ecuador’s request. In July 2017, the Appeals Court of the Netherlands denied Ecuador’s appeal, and in April 2019, the Supreme Court of the Netherlands upheld the decision of the Appeals Court and finally rejected Ecuador’s challenges to the Tribunal’s Interim Awards and its First Partial Award. In December 2018, Ecuador filed in the District Court of The Hague a request to set aside the Tribunal’s Phase Two Award.
Managements Assessment The ultimate outcome of the foregoing matters, including any financial effect on Chevron, remains uncertain. Management does not believe an estimate of a reasonably possible loss (or a range of loss) can be made in this case. Due to the defects associated with the Ecuadorian judgment, management does not believe the judgment has any utility in calculating a reasonably possible loss (or a range of loss). Moreover, the highly uncertain legal environment surrounding the case provides no basis for management to estimate a reasonably possible loss (or a range of loss).
Note 13. 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 11 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,

17

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


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.
Off-Balance-Sheet Obligations 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.
Other Contingencies Governmental and other entities in California and other jurisdictions 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 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

18

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


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 has interests in Venezuelan crude oil production assets, including those operated by independent equity affiliates. During the first quarter 2020, net oil equivalent production in Venezuela averaged 41,000 barrels per day, none of which was upgraded to synthetic crude. The operating environment in Venezuela has been deteriorating for some time. In January 2019, the United States government issued sanctions against the Venezuelan national oil company, Petroleos de Venezuela, S.A. (PdVSA), which is the company’s partner in the equity affiliates. The company is conducting its business pursuant to general licenses and guidance issued coincident with the sanctions. In late July 2019, the United States government renewed General License 8A with the issuance of General License 8B, subsequently superseded by General License 8C issued on August 5, 2019. The authorization provided to Chevron under General License 8C was extended by General License 8D on October 21, 2019 and General License 8E issued by the United States government on January 17, 2020. General License 8E was replaced and superseded by General License 8F on April 21, 2020. General License 8F authorizes the company to perform transactions and activities that are necessary for limited maintenance of essential operations, contracts, or other agreements, to ensure safety or the preservation of assets in Venezuela, and is effective until December 1, 2020. The company is evaluating the impacts of the revised authorizations granted by General License 8F on its activities in Venezuela. The company continues to evaluate the carrying value of its Venezuelan investments in line with its accounting policies. Future events related to the company’s activities in Venezuela may result in significant impacts on the company's results of operation in subsequent periods.
At March 31, 2020, the carrying value of the company’s investments was approximately $2.8 billion, and for the three-month period ended March 31, 2020, the company recognized earnings of $114 million for its share of net income from the equity affiliates, and for foreign exchange losses and other costs incurred in support of the company's operations in Venezuela. First quarter earnings were due to the exemption of 2019 Venezuela income tax for oil companies that was announced in late January 2020. Please see Note 13, "Investments and Advances," on page 71 in the company's 2019 Annual Report on Form 10-K for further information on the company’s investments in equity affiliates in Venezuela.
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 14. 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.

19

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


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.
The fair value hierarchy for assets and liabilities measured at fair value on a recurring basis at March 31, 2020, and December 31, 2019, is as follows:
Assets and Liabilities Measured at Fair Value on a Recurring Basis
(Millions of dollars)
 
At March 31, 2020
 
At December 31, 2019
 
Total
 
Level 1
 
Level 2
 
Level 3
 
Total
 
Level 1
 
Level 2
 
Level 3
Marketable Securities
$
50

 
$
50

 
$

 
$

 
$
63

 
$
63

 
$

 
$

Derivatives
502

 
366

 
136

 

 
11

 
1

 
10

 

Total Assets at Fair Value
$
552

 
$
416

 
$
136

 
$

 
$
74

 
$
64

 
$
10

 
$

Derivatives
32

 
12

 
20

 

 
74

 
26

 
48

 

Total Liabilities at Fair Value
$
32

 
$
12

 
$
20

 
$

 
$
74

 
$
26

 
$
48

 
$


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, 2020.
Derivatives The company records its derivative instruments — other than any commodity derivative contracts that are designated as normal purchase and normal sale — on the Consolidated Balance Sheet at fair value, with the offsetting amount to the Consolidated Statement of Income. 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 carried at fair value at March 31, 2020, and December 31, 2019, 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 $8.5 billion and $5.7 billion at March 31, 2020, and December 31, 2019, respectively. The instruments held in “Time deposits” are bank time deposits with maturities greater than 90 days and had carrying/fair values of zero at both March 31, 2020 and December 31, 2019. 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, 2020.
Restricted Cash had a carrying/fair value of $1.2 billion at both March 31, 2020, and December 31, 2019. At March 31, 2020, restricted cash is classified as Level 1 and includes restricted funds related to certain upstream decommissioning activities, tax items and refundable deposits related to pending asset sales, 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 and finance lease obligations, of $13.6 billion and $13.7 billion at March 31, 2020, and December 31, 2019, respectively. The fair value of long-term debt at March 31, 2020, and December 31, 2019 was $14.3 billion for both reporting periods. Long-term debt primarily includes corporate issued bonds, classified as Level 1 and are $13.5 billion for the period. The fair value of other long-term debt classified as Level 2 is $0.8 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, 2020, and December 31, 2019, were not material.

20

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, 2020, is as follows:
Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis
(Millions of dollars)
 
At March 31, 2020
 
 
 
 
 
 
 
 
 
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)
738

 

 
738

 

 
74

Investments and advances

 

 

 

 

Total Assets at Fair Value
$
738

 
$

 
$
738

 
$

 
$
74


Properties, plant and equipment The company did not have any individually material impairments of long-lived assets measured at fair value on a nonrecurring basis to report in first quarter 2020.
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 2020.
Note 15. Financial and Derivative Instruments
The company’s derivative instruments principally include crude oil, natural gas and refined product futures, swaps, options, and forward contracts. None of the company’s derivative instruments are designated as hedging instruments, although certain of the company’s affiliates make such a designation. 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 derivative commodity 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, 2020, and December 31, 2019, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows:
Consolidated Balance Sheet: Fair Value of Derivatives Not Designated as Hedging Instruments
(Millions of dollars)
Type of
Contract
 
Balance Sheet Classification
 
At March 31,
2020
 
At December 31,
2019
Commodity
 
Accounts and notes receivable, net
 
$
491

 
$
11

Commodity
 
Long-term receivables, net
 
11

 

Total Assets at Fair Value
 
$
502

 
$
11

Commodity
 
Accounts payable
 
$
31

 
$
74

Commodity
 
Deferred credits and other noncurrent obligations
 
1

 

Total Liabilities at Fair Value
 
$
32

 
$
74



21

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


Consolidated Statement of Income: The Effect of Derivatives Not Designated as Hedging Instruments
(Millions of dollars)
Type of
 
 
 
Gain / (Loss)
Three Months Ended
March 31
Contract
 
Statement of Income Classification
 
2020
 
2019
Commodity
 
Sales and other operating revenues
 
$
461

 
$
(238
)
Commodity
 
Purchased crude oil and products
 
(4
)
 
(7
)
Commodity
 
Other income
 

 

 
 
 
 
$
457

 
$
(245
)

The table below represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated Balance Sheet at March 31, 2020, and December 31, 2019.
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, 2020
 
 
 
 
 
Derivative Assets
 
$
6,259

 
$
5,757

 
$
502

 
$

 
$
502

Derivative Liabilities
 
$
5,789

 
$
5,757

 
$
32

 
$

 
$
32

 
 
 
 
 
 
 
 
 
 
 
At December 31, 2019
 
 
 
 
 
 
 
 
 
 
Derivative Assets
 
$
656

 
$
645

 
$
11

 
$

 
$
11

Derivative Liabilities
 
$
719

 
$
645

 
$
74

 
$

 
$
74


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 16. 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 $6.6 billion and $9.2 billion at March 31, 2020, and December 31, 2019, 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 17. Financial Instruments - Credit Losses
Chevron adopted Accounting Standards Update (ASU) 2016-13, Financial Instruments - Credit Losses, and its related amendments at the effective date of January 1, 2020. The standard replaces the “incurred loss model” and requires an estimate of expected credit losses, measured over the contractual life of a financial instrument, that considers forecast of future economic conditions in addition to information about past events and current conditions. The cumulative-effect adjustment to the opening retained earnings at January 1, 2020 is a reduction of $25 million, representing a decrease to the net accounts and notes receivable balances shown on the company’s consolidated balance sheet on page 5. As of March 31, 2020, Chevron’s expected credit loss allowance balance was $918 million with a majority of the allowance relating to non-trade receivable balances. While the company has always regularly assessed customers for credit risk and reviewed past due receivable balances for probable loss, the new standard requires recognizing an expected credit loss for all receivable balances which has resulted in the adjustment noted.
The majority of the company’s receivable balance is concentrated in trade receivables, with a balance of $8.6 billion as of March 31, 2020, 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

22

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS — (Continued)


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, loss given default and exposure of 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 loss allowance for current trade receivables with payment terms that are typically short-term in nature, with most due in less than 90 days. A comprehensive review of credit risk was completed in the first quarter of 2020 in response to the COVID-19 pandemic and the significant reduction in crude prices resulting from decreased demand associated with government-mandated travel restrictions. Following the first quarter review, existing allowances were deemed appropriate.
Chevron's non-trade receivable balance was $3.7 billion as of March 31, 2020, 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 balances are reviewed quarterly.


23


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

First Quarter 2020 Compared with First Quarter 2019
Key Financial Results
Earnings by Business Segment
 
 
Three Months Ended
March 31
 
 
2020
 
2019
 
 
(Millions of dollars)
Upstream
 
 
 
 
United States
 
$
241

 
$
748

International
 
2,679

 
2,375

Total Upstream
 
2,920

 
3,123

Downstream
 
 
 
 
United States
 
450

 
217

International
 
653

 
35

Total Downstream
 
1,103

 
252

Total Segment Earnings
 
4,023

 
3,375

All Other
 
(424
)
 
(726
)
Net Income Attributable to Chevron Corporation (1) (2)
 
$
3,599

 
$
2,649

__________________________________________
 
 
 
 
(1) Includes foreign currency effects.
 
$
514

 
$
(137
)
(2) Income net of tax; also referred to as “earnings” in the discussions that follow.
 
 
 
 
Net income attributable to Chevron Corporation for first quarter 2020 was $3.60 billion ($1.93 per share — diluted), compared with $2.65 billion ($1.39 per share — diluted) in the first quarter of 2019.
Upstream earnings in first quarter 2020 were $2.92 billion compared to $3.12 billion in the corresponding 2019 period. The decrease was mainly due to lower crude oil and natural gas prices, partially offset by favorable foreign currency effects, higher crude oil production and natural gas sales volumes, and favorable tax items.
Downstream earnings in first quarter 2020 were $1.10 billion compared with $252 million in the corresponding 2019 period. The increase was mainly due to higher margins on refined product sales, partially offset by higher operating expenses.
Refer to pages 29 through 31 for additional discussion of results by business segment and “All Other” activities for first quarter 2020 versus the same period in 2019.
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, Colombia, Indonesia, Kazakhstan, 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.
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. It is the company’s objective to deliver competitive results and stockholder value in any business environment. 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 and capital and exploratory expenditures, along with other measures intended to improve financial performance. Similarly, impairments or write-offs may occur as a result of managerial decisions not to progress certain projects in the company's portfolio.

_____________________
* 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.
24


Response to Market Conditions and COVID-19 During the first quarter of 2020, travel restrictions and other constraints on economic activity were implemented in many locations around the world to limit the spread of the COVID-19 virus. As a result, demand for our products has fallen steeply and commodity prices, including crude oil and natural gas, have followed suit. The drop in commodity prices is expected to negatively impact the company’s future financial and operating results. Due to the rapidly changing environment, there continues to be uncertainty and unpredictability around the impact of the COVID-19 pandemic on our results, which could be material.
Chevron entered this crisis well positioned with a strong balance sheet, flexible capital program and low cash flow breakeven price. Accordingly, to protect its long-term health and value, the company is responding to these market conditions by adjusting items it can control. The company has lowered planned 2020 capital expenditures by up to 30 percent from its original budget to as low as $14 billion and intends to reduce operating costs by $1 billion compared to 2019. Additionally, the company has suspended its share repurchase program. Together, these actions are consistent with our financial priorities: to protect the dividend, to prioritize capital spend that drives long-term value and to maintain a strong balance sheet. The company expects to continue to have sufficient liquidity and access to both commercial paper and debt capital markets due to its strong balance sheet and investment grade credit ratings, which have been recently reaffirmed. Additionally, the company has access to nearly $10 billion in committed credit facilities.
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 both by 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 tax rate in one period may not be indicative of expected results in future periods. Note 11 provides the company’s effective income tax rate for the