Item 1. Consolidated Financial Statements

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF INCOME

(Unaudited)

									Three Months Ended March 31
															2022						2021
															(Millions of dollars, except per-share amounts)
Revenues and Other Income
Sales and other operating revenues															$	52,314					$	31,076
Income (loss) from equity affiliates															2,085						911
Other income (loss)															(26)						42
Total Revenues and Other Income															54,373						32,029
Costs and Other Deductions
Purchased crude oil and products															32,649						17,568
Operating expenses															5,638						4,967
Selling, general and administrative expenses															967						990
Exploration expenses															209						86
Depreciation, depletion and amortization															3,654						4,286
Taxes other than on income															2,002						1,420
Interest and debt expense															136						198
Other components of net periodic benefit costs															64						337
Total Costs and Other Deductions															45,319						29,852
Income (Loss) Before Income Tax Expense															9,054						2,177
Income Tax Expense (Benefit)															2,777						779
Net Income (Loss)															6,277						1,398
Less: Net income (loss) attributable to noncontrolling interests															18						21
Net Income (Loss) Attributable to Chevron Corporation															$	6,259					$	1,377
Per Share of Common Stock
Net Income (Loss) Attributable to Chevron Corporation
- Basic															$	3.23					$	0.72
- Diluted															$	3.22					$	0.72
Weighted Average Number of Shares Outstanding (000s)
- Basic															1,935,668						1,912,925
- Diluted															1,944,542						1,915,889

See accompanying notes to consolidated financial statements.

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(Unaudited)

									Three Months Ended March 31
															2022						2021
															(Millions of dollars)
Net Income (Loss)															$	6,277					$	1,398
Currency translation adjustment															(11)						(19)
Unrealized holding gain (loss) on securities
Net gain (loss) arising during period															—						(3)
Derivatives
Net derivatives loss on hedge transactions															2						—
Reclassification to net income															—						—
Income taxes on derivatives transactions															—						—
Total															2						—
Defined benefit plans
Actuarial gain (loss)
Amortization to net income of net actuarial loss and settlements															158						435
Actuarial gain (loss) arising during period															139						907
Prior service credits (cost)
Amortization to net income of net prior service costs and curtailments															(4)						(4)
Prior service (costs) credits arising during period															—						—
Defined benefit plans sponsored by equity affiliates - benefit (cost)															6						11
Income (taxes) benefit on defined benefit plans															(53)						(301)
Total															246						1,048
Other Comprehensive Gain (Loss), Net of Tax															237						1,026
Comprehensive Income (Loss)															6,514						2,424
Comprehensive loss (income) attributable to noncontrolling interests															(18)						(21)
Comprehensive Income (Loss) Attributable to Chevron Corporation															$	6,496					$	2,403

See accompanying notes to consolidated financial statements.

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED BALANCE SHEET

(Unaudited)

						At March 31, 2022						At December 31, 2021
						(Millions of dollars)
Assets
Cash and cash equivalents						$	11,671					$	5,640
Marketable securities						33						35
Accounts and notes receivable (less allowance: 2022 - $302; 2021 - $303)						23,255						18,419
Inventories:
Crude oil and petroleum products						4,467						4,248
Chemicals						547						565
Materials, supplies and other						1,511						1,492
Total inventories						6,525						6,305
Prepaid expenses and other current assets						3,225						3,339
Total Current Assets						44,709						33,738
Long-term receivables (less allowance: 2022 - $457; 2021 - $442)						516						603
Investments and advances						41,732						40,696
Properties, plant and equipment, at cost						335,340						336,045
Less: Accumulated depreciation, depletion and amortization						190,896						189,084
Properties, plant and equipment, net						144,444						146,961
Deferred charges and other assets						12,502						12,384
Goodwill						4,374						4,385
Assets held for sale						771						768
Total Assets						$	249,048					$	239,535
Liabilities and Equity
Short-term debt						$	314					$	256
Accounts payable						20,137						16,454
Accrued liabilities						6,974						6,972
Federal and other taxes on income						2,573						1,700
Other taxes payable						1,205						1,409
Total Current Liabilities						31,203						26,791
Long-term debt						29,019						31,113
Deferred credits and other noncurrent obligations						20,273						20,778
Noncurrent deferred income taxes						15,526						14,665
Noncurrent employee benefit plans						5,927						6,248
Total Liabilities*****						$	101,948					$	99,595
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, 2022 and December 31, 2021)						1,832						1,832
Capital in excess of par value						18,378						17,282
Retained earnings						169,059						165,546
Accumulated other comprehensive losses						(3,652)						(3,889)
Deferred compensation and benefit plan trust						(240)						(240)
Treasury stock, at cost (477,863,124 and 512,870,523 shares at March 31, 2022 and December 31, 2021, respectively)						(39,158)						(41,464)
Total Chevron Corporation Stockholders’ Equity						146,219						139,067
Noncontrolling interests (includes redeemable noncontrolling interest of $135 at both March 31, 2022 and December 31, 2021)						881						873
Total Equity						147,100						139,940
Total Liabilities and Equity						$	249,048					$	239,535
* Refer to Note 12 Other Contingencies and Commitments.

See accompanying notes to consolidated financial statements.

CHEVRON CORPORATION AND SUBSIDIARIES

CONSOLIDATED STATEMENT OF CASH FLOWS

(Unaudited)

			Three Months Ended March 31
			2022						2021
			(Millions of dollars)
Operating Activities
Net Income (Loss)			$	6,277					$	1,398
Adjustments
Depreciation, depletion and amortization			3,654						4,286
Dry hole expense			135						4
Distributions more (less) than income from equity affiliates			(1,441)						(491)
Net before-tax losses (gains) on asset retirements and sales			(99)						(56)
Net foreign currency effects			248						111
Deferred income tax provision			626						(254)
Net decrease (increase) in operating working capital			(937)						(902)
Decrease (increase) in long-term receivables			86						15
Net decrease (increase) in other deferred charges			(56)						(31)
Cash contributions to employee pension plans			(463)						(331)
Other			25						447
Net Cash Provided by Operating Activities			8,055						4,196
Investing Activities
Capital expenditures			(1,960)						(1,746)
Proceeds and deposits related to asset sales and returns of investment			1,283						158
Net sales (purchases) of marketable securities			—						—
Net repayment (borrowing) of loans by equity affiliates			12						25
Net Cash Used for Investing Activities			(665)						(1,563)
Financing Activities
Net borrowings (repayments) of short-term obligations			61						1,237
Repayments of long-term debt and other financing obligations			(2,062)						(78)
Cash dividends - common stock			(2,746)						(2,468)
Net contributions from (distributions to) noncontrolling interests			(5)						(11)
Net sales (purchases) of treasury shares			3,386						267
Net Cash Provided by (Used for) Financing Activities			(1,366)						(1,053)
Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash			(13)						(53)
Net Change in Cash, Cash Equivalents and Restricted Cash			6,011						1,527
Cash, Cash Equivalents and Restricted Cash at January 1			6,795						6,737
Cash, Cash Equivalents and Restricted Cash at March 31			$	12,806					$	8,264

See accompanying notes to consolidated financial statements.

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, 2020			$	18,421		$	160,377		$	(5,612)		$	(41,498)		$	131,688		$	1,038		$	132,726
Treasury stock transactions			37			—			—			—			37			—			37
Net income (loss)			—			1,377			—			—			1,377			21			1,398
Cash dividends ($1.29 per share)			—			(2,468)			—			—			(2,468)			(11)			(2,479)
Stock dividends			—			(1)			—			—			(1)			—			(1)
Other comprehensive income			—			—			1,026			—			1,026			—			1,026
Purchases of treasury shares			—			—			—			(6)			(6)			—			(6)
Issuances of treasury shares			—			—			—			235			235			—			235
Other changes, net			—			—			—			—			—			(3)			(3)
Balance at March 31, 2021			$	18,458		$	159,285		$	(4,586)		$	(41,269)		$	131,888		$	1,045		$	132,933
Balance at December 31, 2021			$	18,874		$	165,546		$	(3,889)		$	(41,464)		$	139,067		$	873		$	139,940
Treasury stock transactions			16			—			—			—			16			—			16
Net income (loss)			—			6,259			—			—			6,259			18			6,277
Cash dividends ($1.42 per share)			—			(2,746)			—			—			(2,746)			(5)			(2,751)
Stock dividends			—			—			—			—			—			—			—
Other comprehensive income			—			—			237			—			237			—			237
Purchases of treasury shares			—			—			—			(1,255)			(1,255)			—			(1,255)
Issuances of treasury shares			1,080			—			—			3,561			4,641			—			4,641
Other changes, net			—			—			—			—			—			(5)			(5)
Balance at March 31, 2022			$	19,970		$	169,059		$	(3,652)		$	(39,158)		$	146,219		$	881		$	147,100
(Number of Shares)			Common Stock - 2022												Common Stock - 2021
Three Months Ended March 31			Issued**(2)**			Treasury			Outstanding						Issued**(2)**			Treasury			Outstanding
Balance at December 31			2,442,676,580			(512,870,523)			1,929,806,057						2,442,676,580			(517,490,263)			1,925,186,317
Purchases			—			(8,897,011)			(8,897,011)						—			(67,003)			(67,003)
Issuances			—			43,904,410			43,904,410						—			2,932,865			2,932,865
Balance at March 31			2,442,676,580			(477,863,124)			1,964,813,456						2,442,676,580			(514,624,401)			1,928,052,179

(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.

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, 2022, 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 2021 Annual Report on Form 10-K.

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, 2022 and 2021 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, 2020						$	(107)					$	(10)					$	—					$	(5,495)					$	(5,612)
Components of Other Comprehensive Income (Loss):
Before Reclassifications						(19)						(3)						—						715						693
Reclassifications						—						—						—						333						333
Net Other Comprehensive Income (Loss)						(19)						(3)						—						1,048						1,026
Balance at March 31, 2021						$	(126)					$	(13)					$	—					$	(4,447)					$	(4,586)
Balance at December 31, 2021						$	(162)					$	(11)					$	—					$	(3,716)					$	(3,889)
Components of Other Comprehensive Income (Loss):
Before Reclassifications						(11)						—						2						117						108
Reclassifications(2) (3)						—						—						—						129						129
Net Other Comprehensive Income (Loss)						(11)						—						2						246						237
Balance at March 31, 2022						$	(173)					$	(11)					$	2					$	(3,470)					$	(3,652)

(1)All amounts are net of tax.

(2)Refer to Note 14 Financial and Derivative Instruments for reclassified components of cash flow hedging.

(3)Refer to Note 8 Employee Benefits for reclassified components, including amortization of actuarial gains or losses, amortization of prior service costs and settlement losses, totaling $154 million that are included in employee benefit costs for the three months ended March 31, 2022. Related income taxes for the same period, totaling $25 million, are reflected in “Income Tax Expense” on the Consolidated Statement of Income. All other reclassified amounts were insignificant.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 3. Information Relating to the Consolidated Statement of Cash Flows

			Three Months Ended March 31
			2022						2021
			(Millions of dollars)
Distributions more (less) than income from equity affiliates includes the following:
Distributions from equity affiliates			$	644					$	420
(Income) loss from equity affiliates			(2,085)						(911)
Distributions more (less) than income from equity affiliates			$	(1,441)					$	(491)
Net decrease (increase) in operating working capital was composed of the following:
Decrease (increase) in accounts and notes receivable			$	(5,289)					$	(2,827)
Decrease (increase) in inventories			(222)						51
Decrease (increase) in prepaid expenses and other current assets			137						(102)
Increase (decrease) in accounts payable and accrued liabilities			3,768						1,599
Increase (decrease) in income and other taxes payable			669						377
Net decrease (increase) in operating working capital			$	(937)					$	(902)
Net cash provided by operating activities includes the following cash payments:
Interest on debt (net of capitalized interest)			$	47					$	70
Income taxes			1,071						629
Proceeds and deposits related to asset sales and returns of investment consisted of the following gross amounts:
Proceeds and deposits related to asset sales			$	747					$	147
Returns of investment from equity affiliates			536						11
Proceeds and deposits related to asset sales and returns of investment			$	1,283					$	158
Net sales (purchases) of marketable securities consisted of the following gross amounts:
Marketable securities purchased			$	(2)					$	(1)
Marketable securities sold			2						1
Net sales (purchases) of marketable securities			$	—					$	—
Net repayment (borrowing) of loans by equity affiliates consisted of the following gross amounts:
Borrowing of loans by equity affiliates			$	—					$	—
Repayment of loans by equity affiliates			12						25
Net repayment (borrowing) of loans by equity affiliates			$	12					$	25
Net borrowings (repayments) of short-term obligations consisted of the following gross and net amounts:
Proceeds from issuances of short-term obligations			$	—					$	2,872
Repayments of short-term obligations			—						(1,792)
Net borrowings (repayments) of short-term obligations with three months or less maturity			61						157
Net borrowings (repayments) of short-term obligations			$	61					$	1,237
Net sales (purchases) of treasury shares consists of the following gross and net amounts:
Shares issued for share-based compensation plans			$	4,641					$	273
Shares purchased under share repurchase and deferred compensation plans			(1,255)						(6)
Net sales (purchases) of treasury shares			$	3,386					$	267
Net contributions from (distributions to) noncontrolling interests consisted of the following gross amounts:
Distributions to noncontrolling interests			$	(5)					$	(11)
Contributions from noncontrolling interests			—						—
Net contributions from (distributions to) noncontrolling interests			$	(5)					$	(11)

The Consolidated Statement of Cash Flows excludes changes to the Consolidated Balance Sheet that did not affect cash.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The “Other” line in the Operating Activities section includes changes in postretirement benefits obligations and other long-term liabilities.

The company paid dividends of $1.42 per share of common stock in first quarter 2022. This compares to dividends of $1.29 per share paid in the year-ago corresponding period.

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
			2022						2021
			(Millions of dollars)
Additions to properties, plant and equipment			$	1,732					$	1,631
Additions to investments			158						109
Current-year dry hole expenditures			70						4
Payments for other assets and liabilities, net			—						2
Capital expenditures			1,960						1,746
Expensed exploration expenditures			74						82
Assets acquired through finance lease obligations and other financing obligations			(2)						—
Payments for other assets and liabilities, net			—						(2)
Capital and exploratory expenditures, excluding equity affiliates			2,032						1,826
Company’s share of expenditures by equity affiliates			725						678
Capital and exploratory expenditures, including equity affiliates			$	2,757					$	2,504

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
			2022						2021						2021						2020
			(Millions of dollars)
Cash and cash equivalents			$	11,671					$	7,076					$	5,640					$	5,596
Restricted cash included in “Prepaid expenses and other current assets”			317						412						333						365
Restricted cash included in “Deferred charges and other assets”			818						776						822						776
Total cash, cash equivalents and restricted cash			$	12,806					$	8,264					$	6,795					$	6,737

Additional information related to restricted cash is included in Note 13 Fair Value Measurements under the heading “Restricted Cash.”

Note 4. 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
			2022						2021
			(Millions of dollars)
Sales and other operating revenues			$	6,187					$	3,431
Costs and other deductions			2,978						1,856
Net income attributable to TCO			$	2,233					$	1,012

Note 5. 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 on the following page.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

			Three Months Ended March 31
			2022						2021
			(Millions of dollars)
Sales and other operating revenues			$	3,795					$	2,748
Costs and other deductions			3,106						2,553
Net income attributable to CPChem			$	764					$	304

Note 6. 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 CPChem 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
			2022						2021
			(Millions of dollars)
Sales and other operating revenues			$	41,502					$	23,479
Costs and other deductions			39,636						23,322
Net income (loss) attributable to CUSA			$	1,754					$	257

			At March 31, 2022						At December 31, 2021
			(Millions of dollars)
Current assets			$	25,167					$	20,216
Other assets			47,406						47,355
Current liabilities			20,833						17,824
Other liabilities			18,667						18,438
Total CUSA net equity			$	33,073					$	31,309
Memo: Total debt			$	11,837					$	11,693

Note 7. 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, producing and transporting 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, refined products, and lubricants; manufacturing and marketing of renewable fuels; 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The company’s primary country of operation is the United States of America, its country of domicile. Other components of the company’s operations are reported as “International” (outside the United States).

Segment Earnings The company evaluates the performance of its operating segments on an after-tax basis, without considering the effects of debt financing interest expense or investment interest income, both of which are managed by the company on a worldwide basis. Corporate administrative costs and assets are not allocated to the operating segments. However, operating segments are billed for the direct use of corporate services. Nonbillable costs remain at the corporate level in “All Other.” Earnings by major operating area for the three-month period ended March 31, 2022 and 2021, are presented in the following table:

									Three Months Ended March 31
															2022						2021
Segment Earnings									(Millions of dollars)
Upstream
United States															$	3,238					$	941
International															3,696						1,409
Total Upstream															6,934						2,350
Downstream
United States															486						(130)
International															(155)						135
Total Downstream															331						5
Total Segment Earnings															7,265						2,355
All Other
Interest expense															(126)						(184)
Interest income															10						8
Other															(890)						(802)
Net Income Attributable to Chevron Corporation															$	6,259					$	1,377

Segment Assets Segment assets do not include intercompany investments or intercompany receivables. Segment assets at March 31, 2022, and December 31, 2021, are as follows:

			At March 31, 2022						At December 31, 2021
Segment Assets			(Millions of dollars)
Upstream
United States			$	41,854					$	41,870
International			138,451						138,157
Goodwill			4,374						4,385
Total Upstream			184,679						184,412
Downstream
United States			28,216						26,376
International			21,195						18,848
Total Downstream			49,411						45,224
Total Segment Assets			234,090						229,636
All Other
United States			9,759						5,746
International			5,199						4,153
Total All Other			14,958						9,899
Total Assets — United States			79,829						73,992
Total Assets — International			164,845						161,158
Goodwill			4,374						4,385
Total Assets			$	249,048					$	239,535

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 period ended March 31, 2022 and 2021, 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 primarily 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
															2022						2021
Sales and Other Operating Revenues									(Millions of dollars)
Upstream
United States															$	11,316					$	5,791
International															13,502						8,790
Subtotal															24,818						14,581
Intersegment Elimination — United States															(6,919)						(2,855)
Intersegment Elimination — International															(3,649)						(2,375)
Total Upstream															14,250						9,351
Downstream
United States															19,771						10,854
International															19,607						11,582
Subtotal															39,378						22,436
Intersegment Elimination — United States															(999)						(466)
Intersegment Elimination — International															(331)						(269)
Total Downstream															38,048						21,701
All Other
United States															83						24
International															—						—
Subtotal															83						24
Intersegment Elimination — United States															(67)						—
Intersegment Elimination — International															—						—
Total All Other															16						24
Sales and Other Operating Revenues
United States															31,170						16,669
International															33,109						20,372
Subtotal															64,279						37,041
Intersegment Elimination — United States															(7,985)						(3,321)
Intersegment Elimination — International															(3,980)						(2,644)
Total Sales and Other Operating Revenues															$	52,314					$	31,076

Note 8. 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.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

The company also sponsors other postretirement employee benefit (OPEB) plans that provide medical and dental benefits, as well as life insurance for some active and qualifying retired employees. The plans are unfunded, and the company and the retirees share the costs. For the company’s main U.S. medical plan, the increase to the pre-Medicare company contribution for retiree medical coverage is limited to no more than four percent each year. Certain life insurance benefits are paid by the company.

The components of net periodic benefit costs for 2022 and 2021 are as follows:

									Three Months Ended March 31
															2022						2021
									(Millions of dollars)
Pension Benefits
United States
Service cost															$	118					$	117
Interest cost															66						55
Expected return on plan assets															(161)						(149)
Amortization of prior service costs (credits)															—						1
Amortization of actuarial losses (gains)															65						104
Settlement losses															86						317
Total United States															174						445
International
Service cost															22						34
Interest cost															36						33
Expected return on plan assets															(48)						(46)
Amortization of prior service costs (credits)															2						2
Amortization of actuarial losses (gains)															4						10
Settlement losses															—						—
Total International															16						33
Net Periodic Pension Benefit Costs															$	190					$	478
Other Benefits*
Service cost															$	11					$	11
Interest cost															15						13
Amortization of prior service costs (credits)															(6)						(7)
Amortization of actuarial losses (gains)															3						4
Net Periodic Other Benefit Costs															$	23					$	21

• Includes costs for U.S. and international OPEB plans. Obligations for plans outside the United States are not significant relative to the company’s total OPEB obligation.

Through March 31, 2022, a total of $463 million was contributed to employee pension plans (including $431 million to the U.S. plans). Total contributions for the full year are currently estimated to be $1.3 billion ($1.1 billion for the U.S. plans and $200 million for the international plans). Contribution amounts are dependent upon plan investment returns, changes in pension obligations, regulatory requirements and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations.

During the first three months of 2022, the company contributed $46 million to its OPEB plans. The company anticipates contributing approximately $150 million in 2022.

Note 9. Assets Held For Sale

At March 31, 2022, the company classified $771 million 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 2021 and the first three months of 2022 were not material.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Note 10. Income Taxes

The income tax expense increased between quarterly periods from $779 million in 2021 to $2.78 billion in 2022. The company's income before income tax expense increased $6.88 billion from $2.18 billion in 2021 to $9.05 billion in 2022, primarily due to higher realizations. The company’s effective tax rate changed between quarterly periods from 36 percent in 2021 to 31 percent in 2022. The change in the effective tax rate is mainly due to the consequence of mix effects, 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, 2022. For these jurisdictions, the latest years for which income tax examinations had been finalized were as follows: United States — 2013, Nigeria — 2007, Australia — 2009, Kazakhstan — 2012 and Saudi Arabia — 2015.

The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in the various jurisdictions. Both the outcomes for these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. However, it is reasonably possible that developments regarding tax matters in certain tax jurisdictions may result in significant increases or decreases in the company’s total unrecognized tax benefits within the next 12 months. Given the number of years that still remain subject to examination and the number of matters being examined in the various tax jurisdictions, the company is unable to estimate the range of possible adjustments to the balance of unrecognized tax benefits.

Note 11. Litigation

Ecuador

Texaco Petroleum Company (Texpet), a subsidiary of Texaco Inc., was a minority member of an oil production consortium with Ecuadorian state-owned Petroecuador from 1967 until 1992. After termination of the consortium and a third-party environmental audit, Ecuador and the consortium parties entered into a settlement agreement specifying Texpet’s remediation obligations. Following Texpet’s completion of a three-year remediation program, Ecuador certified the remediation as proper and released Texpet and its affiliates from environmental liability. In May 2003, plaintiffs alleging environmental harm from the consortium’s activities sued Chevron in the Superior Court in Lago Agrio, Ecuador. In February 2011, that court entered a judgment against Chevron for approximately $9.5 billion plus additional punitive damages. An appellate panel affirmed, and Ecuador’s National Court of Justice ratified the judgment but nullified the punitive damages, resulting in a judgment of approximately $9.5 billion. Ecuador’s highest Constitutional Court rejected Chevron’s final appeal in July 2018.

In February 2011, Chevron sued the Lago Agrio plaintiffs and several of their lawyers and supporters in the U.S. District Court for the Southern District of New York (SDNY) for violations of the Racketeer Influenced and Corrupt Organizations (RICO) Act and state law. The SDNY court ruled that the Ecuadorian judgment had been procured through fraud, bribery, and corruption, and prohibited the RICO defendants from seeking to enforce the Ecuadorian judgment in the United States or profiting from their illegal acts. The Court of Appeals for the Second Circuit affirmed, and the U.S. Supreme Court denied certiorari in June 2017, rendering final the U.S. judgment in favor of Chevron. The Lago Agrio plaintiffs sought to have the Ecuadorian judgment recognized and enforced in Canada, Brazil, and Argentina. All of those recognition and enforcement actions were dismissed and resolved in Chevron’s favor. Chevron and Texpet filed an arbitration claim against Ecuador in September 2009 before an arbitral tribunal administered by the Permanent Court of Arbitration in The Hague, under the United States-Ecuador Bilateral Investment Treaty. In August 2018, the Tribunal issued an award holding that the Ecuadorian judgment was based on environmental claims that Ecuador had settled and released, and that it was procured through fraud, bribery, and corruption. According to the Tribunal, the Ecuadorian judgment “violates international public policy” and “should not be recognized or enforced by the courts of other States.” The Tribunal ordered Ecuador to remove the status of enforceability from the Ecuadorian judgment and to compensate Chevron for any injuries resulting from the judgment. The third and final phase of the arbitration, to determine the amount of compensation Ecuador owes to Chevron, is ongoing. In September 2020, the District Court of The Hague denied Ecuador’s request

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

to set aside the Tribunal’s award, stating that it now is “common ground” between Ecuador and Chevron that the Ecuadorian judgment is fraudulent. In December 2020, Ecuador appealed the District Court’s decision to The Hague Court of Appeals. In a separate proceeding, Ecuador also admitted that the Ecuadorian judgment is fraudulent in a public filing with the Office of the United States Trade Representative in July 2020. Management continues to believe that the Ecuadorian judgment is illegitimate and unenforceable and will vigorously defend against any further attempts to have it recognized or enforced.

Climate Change

Governmental and other entities in various jurisdictions across the United States have filed legal proceedings against fossil fuel producing companies, including Chevron entities, purporting to seek legal and equitable relief to address alleged impacts of climate change. Chevron entities are or were among the codefendants in 21 separate lawsuits brought by 17 U.S. cities and counties, two U.S. states, the District of Columbia and a trade group. One of the city lawsuits was dismissed on the merits, and one of the county lawsuits was voluntarily dismissed by the plaintiff. The lawsuits assert various causes of action, including public nuisance, private nuisance, failure to warn, design defect, product defect, trespass, negligence, impairment of public trust, and violations of consumer protection statutes, based upon the company’s production of oil and gas products and alleged misrepresentations or omissions relating to climate change risks associated with those products. The unprecedented legal theories set forth in these proceedings entail the possibility of damages liability (both compensatory and punitive), injunctive and other forms of equitable relief, including without limitation abatement and disgorgement of profits, civil penalties and liability for fees and costs of suits, that, while we believe remote, could have a material adverse effect on the company’s results of operations and financial condition. Further such proceedings are likely to be filed by other parties. 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.

Louisiana

Seven coastal parishes and the State of Louisiana have filed lawsuits in Louisiana against numerous oil and gas companies seeking damages for coastal erosion in or near oil fields located within Louisiana’s coastal zone under Louisiana’s State and Local Coastal Resources Management Act (SLCRMA). Chevron entities are defendants in 39 of these cases. The lawsuits allege that the defendants’ historical operations were conducted without necessary permits or failed to comply with permits obtained and seek damages and other relief, including the costs of restoring coastal wetlands allegedly impacted by oil field operations. Plaintiffs’ SLCRMA theories are unprecedented; thus, there remains significant uncertainty about the scope of the claims and alleged damages and any potential effects on the company’s results of operations and financial condition. Management believes that the claims lack legal and factual merit and will continue to vigorously defend against such proceedings.

Note 12. Other Contingencies and Commitments

Income Taxes The company calculates its income tax expense and liabilities quarterly. These liabilities generally are subject to audit and are not finalized with the individual taxing authorities until several years after the end of the annual period for which income taxes have been calculated. Refer to Note 10 Income Taxes for a discussion of the periods for which tax returns have been audited for the company’s major tax jurisdictions.

Settlement of open tax years, as well as other tax issues in countries where the company conducts its businesses, are not expected to have a material effect on the consolidated financial position or liquidity of the company and, in the opinion of management, adequate provision has been made for income taxes for all years under examination or subject to future examination.

Guarantees The company and its subsidiaries have certain contingent liabilities with respect to guarantees, direct or indirect, of debt of affiliated companies or third parties. Under the terms of the guarantee arrangements, the company would generally be required to perform should the affiliated company or third party fail to fulfill its obligations under the arrangements. In some cases, the guarantee arrangements may

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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 was solely responsible until April 2022, when the indemnification expired.

Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements The company and its subsidiaries have certain contingent liabilities with respect to long-term unconditional purchase obligations and commitments, including throughput and take-or-pay agreements, some of which may relate to suppliers’ financing arrangements. The agreements typically provide goods and services, such as pipeline and storage capacity, utilities, and petroleum products, to be used or sold in the ordinary course of the company’s business.

Environmental The company is subject to loss contingencies pursuant to laws, regulations, private claims and legal proceedings related to environmental matters that are subject to legal settlements or that in the future may require the company to take action to correct or ameliorate the effects on the environment of prior release of chemicals or petroleum substances by the company or other parties. Such contingencies may exist for various operating, closed and divested sites, including, but not limited to, U.S. federal Superfund sites and analogous sites under state laws, refineries, chemical plants, marketing facilities, crude oil fields, and mining sites.

Although the company has provided for known environmental obligations that are probable and reasonably estimable, it is likely that the company will continue to incur additional liabilities. The amount of additional future costs are not fully determinable due to such factors 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. These future costs may be material to results of operations in the period in which they are recognized, but the company does not expect these costs will have a material effect on its consolidated financial position or liquidity.

Other Contingencies 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, retire, sell, exchange, acquire or restructure assets to achieve operational or strategic benefits and to improve competitiveness and profitability. These activities, individually or together, may result in significant gains or losses in future periods.

Note 13. Fair Value Measurements

The three levels of the fair value hierarchy of inputs the company uses to measure the fair value of an asset or liability are described as follows:

Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities. For the company, Level 1 inputs include exchange-traded futures contracts for which the parties are willing to transact at the exchange-quoted price and marketable securities that are actively traded.

Level 2: Inputs other than Level 1 that are observable, either directly or indirectly. For the company, Level 2 inputs include quoted prices for similar assets or liabilities, prices obtained through third-party broker quotes and prices that can be corroborated with other observable inputs for substantially the complete term of a contract.

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, 2022, and December 31, 2021, is as follows:

Assets and Liabilities Measured at Fair Value on a Recurring Basis

(Millions of dollars)

			At March 31, 2022																								At December 31, 2021
			Total						Level 1						Level 2						Level 3						Total						Level 1						Level 2						Level 3
Marketable Securities			$	33					$	33					$	—					$	—					$	35					$	35					$	—					$	—
Derivatives - not designated			70						43						27						—						313						285						28						—
Derivatives - designated			2						2						—						—						—						—						—						—
Total Assets at Fair Value			$	105					$	78					$	27					$	—					$	348					$	320					$	28					$	—
Derivatives - not designated			498						254						244						—						72						24						48						—
Total Liabilities at Fair Value			$	498					$	254					$	244					$	—					$	72					$	24					$	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, 2022.

Derivatives The company records most of its derivative instruments — other than any commodity derivative contracts that are accounted for as normal purchase and normal sale — on the Consolidated Balance Sheet at fair value, with the offsetting amount to the Consolidated Statement of Income. The company designates certain derivative instruments as cash flow hedges that, if applicable, are reflected in the table above. Derivatives classified as Level 1 include futures, swaps and options contracts valued using quoted prices from active markets such as the New York Mercantile Exchange. Derivatives classified as Level 2 include swaps, options and forward contracts, the fair values of which are obtained from third-party broker quotes, industry pricing services and exchanges. The company obtains multiple sources of pricing information for the Level 2 instruments. Since this pricing information is generated from observable market data, it has historically been very consistent. The company does not materially adjust this information.

Assets and liabilities carried at fair value at March 31, 2022, and December 31, 2021, 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 $11.7 billion and $5.6 billion at March 31, 2022, and December 31, 2021, respectively. The fair values of cash and cash equivalents are classified as Level 1 and reflect the cash that would have been received if the instruments were settled at March 31, 2022.

Restricted Cash had a carrying/fair value of $1.1 billion and $1.2 billion at March 31, 2022 and December 31, 2021, respectively. At March 31, 2022, restricted cash is classified as Level 1 and includes restricted funds related to certain upstream decommissioning activities, tax payments and a financing program, which are reported in “Prepaid expenses and other current assets” and “Deferred charges and other assets” on the Consolidated Balance Sheet.

Long-Term Debt had a net carrying value, excluding amounts reclassified from short-term debt, purchase price fair value adjustments and finance lease obligations, of $22.1 billion and $22.2 billion at March 31, 2022, and December 31, 2021, respectively. The fair value of long-term debt for the company was $22.5 billion and $23.7 billion at March 31, 2022 and December 31, 2021, respectively. Long-term debt primarily includes corporate issued bonds, classified as Level 1 and are $21.7 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, 2022, and December 31, 2021, were not material.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

Properties, plant and equipment The company did not have any impairments of long-lived assets measured at fair value on a nonrecurring basis to report.

Investments and advances The company did not have any impairments of investments and advances measured at fair value on a nonrecurring basis to report in first quarter 2022.

Note 14. Financial and Derivative Instruments

The company’s commodity derivative instruments principally include crude oil, natural gas, liquefied natural gas and refined product futures, swaps, options and forward contracts. The company applies cash flow hedge accounting to certain commodity transactions, where appropriate, to manage the market price risk associated with forecasted sales of crude oil. The company’s derivatives are not material to the company’s consolidated financial position, results of operations or liquidity. The company believes it has no material market or credit risks to its operations, financial position or liquidity as a result of its commodities and other derivatives activities.

The company uses commodity derivative instruments traded on the New York Mercantile Exchange and on electronic platforms of the Inter-Continental Exchange and Chicago Mercantile Exchange. In addition, the company enters into swap contracts and option contracts principally with major financial institutions and other oil and gas companies in the “over-the-counter” markets, which are governed by International Swaps and Derivatives Association agreements and other master netting arrangements.

Derivative instruments measured at fair value at March 31, 2022, and December 31, 2021, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows:

Consolidated Balance Sheet: Fair Value of Derivatives (Millions of dollars)
Type of Contract						Balance Sheet Classification						At March 31, 2022						At December 31, 2021
Commodity						Accounts and notes receivable, net						$	51					$	251
Commodity						Long-term receivables, net						21						62
Total Assets at Fair Value												$	72					$	313
Commodity						Accounts payable						$	495					$	71
Commodity						Deferred credits and other noncurrent obligations						3						1
Total Liabilities at Fair Value												$	498					$	72

Consolidated Statement of Income: The Effect of Derivatives (Millions of dollars)
Type of																		Gain / (Loss) Three Months Ended March 31
Contract						Statement of Income Classification																		2022						2021
Commodity						Sales and other operating revenues																		$	(873)					$	(274)
Commodity						Purchased crude oil and products																		(105)						(3)
Commodity						Other income																		1						(39)
																								$	(977)					$	(316)

At March 31, 2022, pre-tax deferred gains in Accumulated Other Comprehensive Losses related to outstanding crude oil price hedging contracts were $2 million, of which all is expected to be reclassified into earnings during the next 12 months as the hedged crude oil sales are recognized in earnings.

The following table represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated Balance Sheet at March 31, 2022, and December 31, 2021.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS - (Continued)

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, 2022
Derivative Assets - not designated						$	4,320					$	4,250					$	70					$	—					$	70
Derivative Assets - designated						$	35					$	33					$	2					$	—					$	2
Derivative Liabilities - not designated						$	4,748					$	4,250					$	498					$	10					$	488
Derivative Liabilities - designated						$	33					$	33					$	—					$	—					$	—
At December 31, 2021
Derivative Assets - not designated						$	1,684					$	1,371					$	313					$	—					$	313
Derivative Liabilities - not designated						$	1,443					$	1,371					$	72					$	—					$	72

Derivative assets and liabilities are classified on the Consolidated Balance Sheet as accounts and notes receivable, long-term receivables, accounts payable, and deferred credits and other noncurrent obligations. Amounts not offset on the Consolidated Balance Sheet represent positions that do not meet all the conditions for “a right of offset.”

Note 15. Revenue

“Sales and other operating revenue” on the Consolidated Statement of Income primarily arise from contracts with customers. Related receivables are included in “Accounts and notes receivable, net” on the Consolidated Balance Sheet, net of the current expected credit losses. The net balance of these receivables was $16.4 billion and $12.9 billion at March 31, 2022, and December 31, 2021, respectively. Other items included in “Accounts and notes receivable, net” represent amounts due from partners for their share of joint venture operating and project costs and amounts due from others, primarily related to derivatives, leases, buy/sell arrangements and product exchanges, which are accounted for outside the scope of ASC 606*.*

Note 16. Financial Instruments - Credit Losses

Chevron’s expected credit loss allowance balance was $759 million as of March 31, 2022 and $745 million as of December 31, 2021, with a majority of the allowance relating to non-trade receivable balances.

The majority of the company’s receivable balance is concentrated in trade receivables, with a balance of $20.3 billion as of March 31, 2022, which reflects the company’s diversified sources of revenues and is dispersed across the company’s broad worldwide customer base. As a result, the company believes the concentration of credit risk is limited. The company routinely assesses the financial strength of its customers. When the financial strength of a customer is not considered sufficient, alternative risk mitigation measures may be deployed, including requiring prepayments, letters of credit or other acceptable forms of collateral. Once credit is extended and a receivable balance exists, the company applies a quantitative calculation to current trade receivable balances that reflects credit risk predictive analysis, including probability of default and loss given default, which takes into consideration current and forward-looking market data as well as the company’s historical loss data. This statistical approach becomes the basis of the company’s expected credit loss allowance for current trade receivables with payment terms that are typically short-term in nature, with most due in less than 90 days.

Chevron's non-trade receivable balance was $4.2 billion as of March 31, 2022, which includes receivables from certain governments in their capacity as joint venture partners. Joint venture partner balances that are paid as per contract terms or not yet due are subject to the statistical analysis described above while past due balances are subject to additional qualitative management quarterly review. This management review includes review of reasonable and supportable repayment forecasts. Non-trade receivables also include employee and tax receivables that are deemed immaterial and low risk. Equity affiliate loans are also considered non-trade and associated allowances of $560 million are included within Investments and Advances on the Consolidated Balance Sheet at both March 31, 2022, and December 31, 2021.