Chevron
Annual Report 2023

Plain-text annual report

2023 annual report purpose powers progressour strategy chevron’s strategy is to leverage our strengths to safely deliver lower carbon energy to a growing world Our objective is to safely deliver higher returns, lower carbon and superior shareholder value in any business environment. We are building on our capabilities, assets and customer relationships as we aim to lead in lower carbon intensity oil, products and natural gas, as well as advance new products and solutions that reduce the carbon emissions of major industries. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. DJ Basin Colorado Shale & tight ~400,000 net barrels per day of oil-equivalent production expected in 2024 delivering value and resilience Our high-quality assets, along with our people and technology that unlock their value and the customers that rely on them, are the foundation of our competitive advantage and our long-term value creation. Our assets are diverse and competitive, spanning from conventional oil fields to deepwater projects, from shale plays to liquefied natural gas plants, refineries and chemical plants. Our operations are not only reliable and profitable, but also resilient – maintained with a focus on operational excellence, capital efficiency and process safety. We also strive to lower our carbon intensity and promote a lower carbon future. We invest in innovation and transformational technology to scale lower carbon solutions, and we lower the carbon intensity of our operations through energy efficiency, methane management, flaring reduction and other means. These assets enable us to balance scale, returns, and risk, and to adapt to the evolving energy landscape. 3.1 million barrels net oil-equivalent daily production 22.4 kilograms CO2e/BOE upstream oil carbon intensity 2.7 million barrels per day of refined product sales 11.9 percent return on capital employed Chevron Corporation 2023 Annual Report I table of contents to our stockholders ............................................................. IV beliefs drive our strategy ................................................ VIII board of directors ................................................................. X director: one-on-one ......................................................... XII corporate officers ............................................................. XIV chevron at a glance ......................................................... XVI chevron stock performance ........................................ XVIII financial and operating highlights ................................ XX process safety, reliability and integrity .................... XXII financials ............................................................................... 33 glossary of energy and financial terms ....................... 116 stockholder and investor information ......................... 118 Albert Lea Biorefinery Minnesota Bio-diesel 35,000 barrels per day effective capacity of combined renewable fuel production across our nine biorefineries purpose powers progress Chevron’s purpose – providing the affordable, reliable, ever-cleaner energy that enables human progress – is at the heart of The Chevron Way. Last year reminded us of the importance of that purpose as we achieved record production levels to meet record global energy demand. At the same time, we continued to reduce carbon intensity in our operations and advance lower carbon solutions. It’s all part of building a resilient energy system that powers human progress. Learn more at: chevron.co/progress to our stockholders In a year of geopolitical turmoil and economic uncertainty, Chevron remained focused on its purpose: providing the affordable, reliable, ever- cleaner energy that enables human progress. We fulfill that purpose by executing our strategy: leveraging our strengths to safely deliver lower carbon energy to a growing world. We believe a resilient energy system must be capable of enabling economic prosperity, energy security and environmental protection. This will be advanced by human ingenuity, innovation, leadership and action. These beliefs inform our strategy and decisions. executing our strategy Leveraging our strengths starts with the right mix of high-quality assets. Value is delivered through the capabilities of our people and technology to meet customer needs now and in the future. Our advantaged portfolio delivered annual production of 3.1 million barrels of oil-equivalent per day in 2023 – the highest in our history. To further strengthen that portfolio, in October, we agreed to acquire Hess Corporation. This is Chevron’s fourth major deal in recent years, following the acquisitions of Noble Energy in 2020, Renewable Energy Group in 2022 and PDC Energy in 2023. These actions support our longstanding financial priorities: • Grow the dividend consistently: In January 2024, we raised the per-share dividend 8% to $1.63 per quarter. And 2023 marked 36 consecutive years of higher annual dividends per share. • Invest capital efficiently: We strengthened our portfolio to grow both traditional and new energy supplies, advanced major capital projects and completed several strategic acquisitions. • Maintain a strong balance sheet: We maintained our financial strength with a net debt ratio of 7.3% and eliminated more than $4 billion of debt, including all debt assumed in the PDC acquisition. • Return excess cash to stockholders: We returned a record $26.3 billion to stockholders in 2023 through dividends of $11.3 billion and share repurchases of $14.9 billion. the energy landscape In 2023, global energy consumption set new records, demonstrating the important role of oil and natural gas in powering the world’s economy. Global oil consumption reached a new high of ~102 million barrels per day; U.S. natural gas demand set new records; and global LNG demand continued to grow. In 2024, oil and gas consumption are projected to surpass 2023 records even as significant growth in new energies is also expected to continue. Global energy investment totaled a record ~$2.8 trillion in 2023, with just over one-third directed to traditional energy, including oil and gas. Annual global energy investment is projected to reach $3 trillion for the balance of this decade to meet expected demand growth. Chevron Corporation 2023 Annual Report IV delivering results Amid this evolving landscape, Chevron continues to play a leading role in supplying the energy the world needs and helping to build the lower carbon energy system of the future. In 2023, our upstream operations produced 3.1 million oil-equivalent barrels per day, with upstream capital expenditures of over $13 billion. We added approximately 980 million barrels of net oil-equivalent proved reserves, which equates to approximately 86% of net oil-equivalent production for the year. The PDC Energy acquisition added 275,000 net acres adjacent to Chevron’s existing Colorado operations in the DJ Basin and an additional 25,000 net acres in the Permian Basin. In the Permian Basin, production averaged an all-time high of 783,000 barrels of oil-equivalent per day, a 10% increase from 2022. We expect to achieve Permian production of 1 million barrels of oil-equivalent per day in 2025. In the Gulf of Mexico, we reached first oil at the Mad Dog 2 project and completed installation of the floating production unit for the Anchor Field, an important milestone toward achieving first production, expected in 2024. chevron new energies continues to advance lower carbon solutions to help customers meet their lower carbon ambitions In Kazakhstan, we achieved mechanical completion on the Future Growth Project, which is designed to further increase total daily production from the Tengiz reservoir and maximize the ultimate recovery of resources. In Australia, we achieved first natural gas production from the Gorgon Stage Two development, and in Israel, we reached final investment decision to construct a third gathering pipeline, expected to increase natural gas production capacity at the Leviathan Field. Throughout the company, we are implementing projects designed to reduce the carbon intensity of our operations. In 2023, we launched a solar power project with a joint venture partner in New Mexico to provide renewable energy for our Permian Basin operations. And we plan to install new technologies on Chevron’s LNG vessels that are expected to reduce the carbon intensity of our fleet. In downstream, we continue to evolve our refining system to produce lower carbon intensity fuels and products. We successfully converted the diesel hydrotreater at our El Segundo Refinery to process either 100% renewable feedstock or traditional feedstocks. We also announced a commercial collaboration with Corteva Inc. and Bunge to purchase next generation renewable feedstocks to meet increasing demand for these products. And the renewable diesel expansion of our Geismar Biorefinery is on track to start up this year. Our Chevron Phillips Chemical Company affiliate reached final investment decision on a joint venture with QatarEnergy to build an integrated polymers facility in Qatar, and continued the construction of a similar facility in Texas. Chevron New Energies continues to advance lower carbon solutions to help customers meet their lower carbon ambitions and to reduce the carbon intensity of our operations. We expanded our Bayou Bend CCS Hub project, positioning it to be one of the largest carbon storage projects in the U.S. We also acquired a majority stake in ACES Delta, a green hydrogen production and storage hub in Utah. And we are exploring development of a hydrogen and ammonia production facility on the U.S. Gulf Coast and the potential use of hydrogen fuel cells in powering locomotives. looking to the future As we navigate a world of uncertainty, we remain grounded in the vision, purpose and values of The Chevron Way. We’ll continue to provide the energy that powers the world today, as we build new businesses capable of becoming a larger part of the energy system that powers tomorrow. That’s human progress. Thank you for your support and the continued trust you place in us. Sincerely, Michael K. Wirth Chairman of the Board and Chief Executive Officer Chevron Corporation 2023 Annual Report VI Richmond Refinery California 1.78 million barrels per day of crude unit distillation capacity combined across our eight consolidated and affiliate refineries Chevron Corporation 2023 Annual Report VII beliefs drive our strategy leveraging our strengths to safely deliver lower carbon energy to a growing world we stay true to our strategy, guided by our fundamental beliefs we have the right mix of high-quality assets Energy is essential to modern life The future is lower carbon Human ingenuity fuels innovation Leadership carries great responsibility Shale & Tight Deepwater LNG Heavy Oil Refining & Marketing Petrochemicals we tap the power of our portfolio through our people and technology we’re building businesses that will play a larger role in our future Engaging the full potential of our people Scaling affordable, innovative technology solutions Renewable Fuels Carbon Capture & Offsets Hydrogen Chevron Corporation 2023 Annual Report VIII Gorgon Australia Liquefied natural gas 159,000 metric tons per day of LNG production across consolidated and affiliate assets in 2023 Chevron Corporation 2023 Annual Report IX board of directors The Board of Directors of Chevron directs the affairs of the corporation and is committed to sound principles of corporate governance. The Directors bring a proven track record of success across a broad range of experiences at the policymaking level. Michael K. (Mike) Wirth, 63 Chairman of the Board and Chief Executive Officer since February 2018. Prior to his current role, Wirth served as Vice Chairman of the Board in 2017 and Executive Vice President of Midstream & Development from 2016 to 2018. In that role, he was responsible for supply and trading, shipping, pipeline and power operating units; corporate strategy; business development; and corporate affairs. Wirth was Executive Vice President of Downstream & Chemicals from 2006 to 2015. He served as President of Global Supply and Trading from 2003 to 2006. Wirth serves on the board of directors of the American Petroleum Institute and Catalyst, and is a member of the National Petroleum Council, the Business Roundtable, the World Economic Forum International Business Council and the American Society of Corporate Executives. Wirth joined Chevron in 1982 as a design engineer. He earned a bachelor’s degree in chemical engineering from the University of Colorado. Wanda M. Austin, 69 Lead Director since 2022 and a Director since 2016. She holds an adjunct Research Professor appointment at the University of Southern California’s Viterbi School’s Department of Industrial and Systems Engineering. She is a retired President and Chief Executive Officer of The Aerospace Corporation, a leading architect for the United States’ national security space programs. She is also a Director of Amgen Inc. and Apple Inc. (2,3) John B. Frank, 67 Director since 2017. He is Vice Chairman of Oaktree Capital Group LLC, a global investment management company with expertise in credit strategies. He is one of four members of Oaktree’s Executive Committee and was previously the firm’s Principal Executive Officer. He is also a Director of Daily Journal Corporation and Oaktree Capital Group LLC and its subsidiary, Oaktree Specialty Lending Corporation. (1) Alice P. Gast, 65 Director since 2012. She was President of Imperial College London, a public research university specializing in science, engineering, medicine and business. Previously, she was President of Lehigh University in Pennsylvania. Prior to that, she was Vice President for Research, Associate Provost and Robert T. Haslam Chair in Chemical Engineering at the Massachusetts Institute of Technology. (2,4) Enrique Hernandez, Jr., 68 Director since 2008. He is Executive Chairman of Inter-Con Security Systems Inc., a global provider of security and facility support services to governments, utilities and industrial customers. He is also Chairman of the Board of McDonald’s Corporation and a Director of The Macerich Company. (3,4) Chevron Corporation 2023 Annual Report X Marillyn A. Hewson, 70 Director since 2021. She was Executive Chairman, Chairman, President and Chief Executive Officer of Lockheed Martin Corporation, a security and aerospace company. She is also a Director of Johnson & Johnson. (1) Jon M. Huntsman Jr., 64 Director since 2020 and from 2014 to 2017 when he resigned to serve as the U.S. Ambassador to Russia. He served as Vice Chair of Policy at Ford Motor Company from May 2021 to January 2023. Previously, he served as U.S. Ambassador to China and was Governor of Utah for two consecutive terms. He is also a Director of Ford Motor Company and Mobileye. (3,4) Charles W. Moorman, 72 Director since 2012. He is a retired Chairman of the Board, Chief Executive Officer and President of Norfolk Southern Corporation, a freight and transportation company. He served as a Senior Advisor to Amtrak from 2018 to 2023, having previously served as Amtrak’s President and Chief Executive Officer. He is also a Director of Oracle Corporation. (2,3) Dambisa F. Moyo, 55 Director since 2016. She is Co-Principal of Versaca Investments, a family office focused on growth investing globally. She sits as a member of the House of Lords in Britain, as Baroness Moyo of Knightsbridge. Previously, she served as Chief Executive Officer of Mildstorm LLC, focusing on the global economy and international affairs. Prior to that, she worked at Goldman Sachs in various roles and at the World Bank in Washington, D.C. (1) Debra Reed-Klages, 67 Director since 2018. She is a retired Chairman, Chief Executive Officer and President of Sempra Energy, an energy services holding company. Previously, she was Executive Vice President of Sempra Energy and President and Chief Executive Officer of San Diego Gas & Electric and Southern California Gas Co. She is also a Director of Caterpillar Inc. and Lockheed Martin Corporation. (1) D. James Umpleby III, 66 Director since 2018. He is Chairman and Chief Executive Officer of Caterpillar Inc., a leading manufacturer of construction and mining equipment, diesel and natural gas engines, industrial gas turbines and diesel- electric locomotives. Previously, he was Group President of Caterpillar’s Energy and Transportation business segment. (2,4) Cynthia J. Warner, 65 Director since 2022. She was President and Chief Executive Officer of Renewable Energy Group, Inc. (REG) and a member of REG’s board of directors. Previously, she was Executive Vice President, Operations for Andeavor. She is also a Director of Sempra Energy and Bloom Energy, as well as a Trustee of the Committee for Economic Development and a member of the National Petroleum Council. (4) committees of the board 1 Audit: Debra Reed-Klages, Chair 2 Board Nominating and Governance: Wanda M. Austin, Chair 3 Management Compensation: Charles W. Moorman, Chair 4 Public Policy and Sustainability: Enrique Hernandez, Jr., Chair Chevron Corporation 2023 Annual Report XI director: one-on-one a conversation with dr. wanda m. austin, lead independent director, on chevron’s achievements, governance and outlook what is the board’s role in representing stockholders and governing the company? First and foremost, we are dedicated to affirming that Chevron maintains a high level of integrity, transparency and accountability and that the company complies with all applicable laws and regulations. The Board oversees Chevron’s strategic direction, performance and risk management. We review and approve the company’s strategic plan and annual budget, and we monitor the progress and results of its operations. The Board also assesses the major risks facing the company and seeks to ensure that there are adequate policies and controls to mitigate them. One of the Board’s key roles is to appoint and evaluate the CEO and other senior executives, and to ensure that they are aligned on the company’s vision, mission and values. We set compensation and incentives for the executive team and hold them accountable for their performance and conduct. what accomplishment in 2023 is most notable for you? Chevron’s acquisition of PDC Energy and the anticipated acquisition of Hess demonstrate strong discipline in identifying both traditional and new energy M&A opportunities that strengthen the company’s portfolio. These acquisitions were evaluated and approved by the Board. The acquisition of PDC Energy closed in 2023 and is expected to create value for Chevron and its stockholders and increase the company’s production, reserves and cash flow. Chevron is well positioned for future growth and leadership in the energy industry. how does chevron address ESG-related matters and advance a lower carbon future? what makes you confident about chevron’s future? I am optimistic about Chevron’s future for three reasons: First, our people: Chevron has the technical and human capacity to help advance a lower carbon future. The company is reducing its carbon emissions intensity, increasing its efficiency, and supporting renewable and low-carbon energy. Chevron is also helping its customers and partners achieve their emission reduction goals. Second, our portfolio: the company has a strong and diversified portfolio of businesses, products and services. Chevron provides solutions that enhance its customers’ performance, safety and quality. It can adapt to changing markets and customer needs and find new opportunities for growth and value. This gives Chevron a competitive edge and a loyal customer base. Third, our financial strength: Chevron has a robust and flexible balance sheet that allows management to invest in growth and innovation and reward stockholders. The company has a disciplined capital strategy and is generating strong cash flow. This allows it to sustain its growth and share its success with its investors. I am confident that Chevron is positioned to create value and deliver results in 2024 and well beyond. I am proud to be part of the Board of Directors, and I look forward to working with the management team, the employees, the customers and the stockholders to achieve our shared goals and purpose. The Board oversees Chevron’s governance and reporting framework, which reflects the company’s focus on stakeholder engagement, transparency and measurable outcomes on environmental, social and governance issues. We believe that these issues are critical for Chevron’s long-term success. To demonstrate transparency, Chevron publishes reports that provide insights into its environmental, social and governance strategy and performance. For example, the Approach to Tax and Transparency Report highlights aspects of Chevron’s governance and control framework, interactions with tax authorities, approach to tax, and risk management. This report was issued in September 2023 and includes important tax information based on our 2022 Form 10-K. Chevron’s latest voluntary report on climate- related risks and opportunities aligns with the recommendations of the Task Force on Climate Related Financial Disclosures framework and details progress on greenhouse gases and other metrics for environmental performance. This Climate Change Resilience Report details Chevron’s approach and the actions the company is taking to help advance a lower carbon future through its governance, risk management, strategy, portfolio, performance and policy, and metrics. The Board reviewed this report, which also describes Chevron’s support for a life-cycle approach to carbon accounting to facilitate informed decision making throughout the value chain. The latest report was issued in October 2023 and covers the period from 2019 to 2022. Chevron has a long history of reporting on sustainability topics, issuing its first such report in 2003 and releasing six climate-related reports since 2017. The company continuously seeks to improve its environmental, social and governance reporting practices and engage with its stakeholders on these matters. Chevron Corporation 2023 Annual Report XIII corporate officers Paul R. Antebi, 52 Vice President and General Tax Counsel since 2021. Responsible for directing Chevron’s worldwide tax activities. Previously, the company’s Deputy General Tax Counsel. Joined the company in 1998. Marissa Badenhorst, 48 Vice President, Health, Safety and Environment (HSE) since 2022. Responsible for leading the company’s HSE management, including audit and assurance and emergency response. Previously, General Manager of Enterprise Process Safety. Prior to that, Technical Manager, Chevron Australia. Joined the company in 2000. Eimear P. Bonner, 50 Vice President and Chief Financial Officer since 2024. Responsible for audit, controller, investor relations, tax and treasury activities worldwide. Previously President Chevron Technical Center and Chief Technology Officer. Joined the company in 1998. Mary A. Francis, 59 Corporate Secretary and Chief Governance Officer since 2015. Responsible for providing advice and counsel to the Board of Directors and senior management on corporate governance matters, managing the company’s corporate governance function, and serving on the Law Function Executive Committee. Previously, Chief Corporate Counsel. Joined the company in 2002. Chevron Corporation 2023 Annual Report XIV Jeff B. Gustavson, 51 Vice President, Lower Carbon Energies since 2021. Responsible for lower carbon solutions that have the potential to scale, including commercialization opportunities in hydrogen, carbon capture, and offsets and support of ongoing growth in biofuels. Previously, Vice President, Mid-Continent Business Unit; and President, Chevron Canada Limited. Joined the company in 1999. A. Nigel Hearne, 56 Executive Vice President, Oil, Products & Gas since 2022. Responsible for the entire value chain, ensuring a more integrated approach to capital allocation, asset class excellence and value chain optimization. Previously, President of Chevron Eurasia- Pacific Exploration and Production Company. Prior to that, Managing Director of Chevron Australia. Joined the company in 1989. Alana K. Knowles, 59 Vice President and Controller since 2023. Responsible for corporatewide accounting, financial reporting and analysis, internal controls, accounting policy, and digital finance. Previously, Vice President, Finance, Downstream & Chemicals and Midstream; and Assistant Treasurer, Operating Company Financing. Joined the company in 1988. Balaji Krishnamurthy, 47 Vice President, Chevron Technical Center since 2024. Responsible for overseeing technical services in support of Chevron’s global operations, the development and scaling of innovative technology solutions to support the current and future energy system, as well as the application of engineering standards across the company. Previously, Vice President, Strategy & Sustainability; and President of Chevron Canada Limited. Joined the company in 2002. Colin E. Parfitt, 60 Vice President, Midstream since 2019. Responsible for shipping, pipeline, power and energy management, and supply and trading operating units. Previously, President, Supply and Trading; and Vice President, Sales and Marketing, Chevron Oronite Company LLC. Joined the company in 1995. R. Hewitt Pate, 61 Vice President and General Counsel since 2009. Responsible for directing the company’s worldwide legal affairs. Previously, Chair, Competition Practice, Hunton & Williams LLP, Washington, D.C., and Assistant Attorney General, Antitrust Division, U.S. Department of Justice. Joined the company in 2009. Albert J. Williams, 55 Vice President, Corporate Affairs since 2021. Responsible for overseeing government affairs, public affairs, social investment and performance, and the company’s worldwide efforts to protect and enhance its reputation. Previously, Managing Director of Chevron Australia and head of the Australasia business unit. Joined the company in 1991. executive committee Michael K. Wirth, Eimear P. Bonner, Jeff B. Gustavson, A. Nigel Hearne, Balaji Krishnamurthy, Rhonda J. Morris, Mark A. Nelson, and R. Hewitt Pate. retiring officers Pierre R. Breber, retired March 2024, Vice President and Chief Financial Officer since 2019. Previously, Executive Vice President of Downstream & Chemicals. Joined the company in 1989. Molly T. Laegeler, 46 Vice President, Strategy & Sustainability since 2023. Responsible for guiding development of the company’s key strategies, including capital allocation and sustainability efforts. Previously, Vice President of Chevron North America Exploration & Production Company’s San Joaquin Valley business unit. Joined the company in 2005. Navin K. Mahajan, 57 Vice President and Treasurer since 2019. Responsible for Chevron’s banking, financing, cash management, insurance, pension investments, and credits and receivables activities. Previously, Vice President of Finance for Downstream & Chemicals, Assistant Treasurer of Operating Company Financing, and Chief Compliance Officer. Joined the company in 1996. Rhonda J. Morris, 58 Vice President since 2016 and Chief Human Resources Officer since 2019. Responsible for human resources, diversity and inclusion, ombuds, and employee assistance/work life services. Previously, Vice President, Human Resources, Downstream & Chemicals. Joined the company in 1991. Frank W. Mount, 54 Vice President, Corporate Business Development since 2023. Responsible for identifying and developing new, large-scale business opportunities worldwide, including mergers and acquisitions. Previously, President of M&A and Origination; and General Manager of Investor Relations. Joined the company in 1993. Mark A. Nelson, 60 Vice Chairman since 2023. Responsible for Chevron Strategy & Sustainability, Corporate Affairs, Corporate Business Development, Information Technology and Procurement/ Supply Chain Management. Previously, Executive Vice President, Downstream & Chemicals. Joined the company in 1985. Chevron Corporation 2023 Annual Report XV Anchor U.S. Gulf of Mexico Deepwater 197,000 net oil-equivalent barrels per day across our deepwater Gulf assets in 2023 Chevron Corporation 2023 Annual Report XVI chevron at a glance Chevron is one of the world’s leading integrated energy companies. We believe affordable, reliable and ever-cleaner energy is essential to enabling human progress. Chevron produces crude oil and natural gas; manufactures transportation fuels, lubricants, petrochemicals and additives; and develops technologies that enhance our business and the industry. We aim to grow our oil and gas business, lower the carbon intensity of our operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. Our success is driven by a dedicated, diverse and highly skilled global workforce united by The Chevron Way – our enduring statement of culture – and our focus on delivering industry- leading results and superior stockholder value. We aim to lead our industry in health, safety and environmental performance. The protection of people, assets, communities and the environment is our highest priority. 11.1 billion barrels net oil-equivalent proved reserves1, 2 $261.6 billion total assets1 63.7 million acres of land leased for oil and gas exploration and production1 $196.9 billion sales and other operating revenues3 1 At December 31, 2023 2 For definition of “reserves,” see glossary of energy and financial terms, page 117 3 Year ended December 31, 2023 Chevron Corporation 2023 Annual Report XVII chevron stock performance Indexed dividend growth Basis 2008 = 100 6.0% CVX compound annual growth rate $250 $200 $150 $100 $50 2008 2023 Chevron S&P 500 Peer group: BP p.l.c. (ADS), ExxonMobil, Shell p.l.c. (ADS), TotalEnergies SE (ADR). Dividends include both cash and scrip share distributions for European peers. Total stockholder returns* (as of 12/31/2023) 3-year 25.8% S&P @ 10% 45% 30% 15% 0% 20% 15% 10% 5% 0% 5-year 10-year S&P @ 15.7% 11.3% S&P @ 12.0% 6.1% 15% 10% 5% 0% Chevron Peer group: BP p.l.c. (ADS), ExxonMobil, Shell p.l.c. (ADS), TotalEnergies SE (ADR) * Annualized total stockholder return (TSR) as of 12/31/2023. Includes stock price appreciation and reinvested dividends when paid. For TSR comparison purposes, ADR/ ADS prices and dividends are used for non-U.S.-based companies. Dividends include both cash and scrip share distributions. Chevron Corporation 2023 Annual Report XVIII 2023 marked the 36th consecutive year chevron increased the annual per-share dividend payout Five-year cumulative total returns (calendar years ended December 31) $250 $225 $200 $175 $150 $125 $100 $75 $50 $207 $171 $163 2018 Chevron 2019 2020 2021 2022 2023 S&P 500 Peer group: BP p.l.c. (ADS), ExxonMobil, Shell p.l.c. (ADS), TotalEnergies SE (ADR) Performance graph The stock performance graph above shows how an initial investment of $100 in Chevron stock would have compared with an equal investment in the S&P 500 Index or the competitor peer group. The comparison covers a five-year period beginning December 31, 2018, and ending December 31, 2023, and the peer group is weighted by market capitalization as of the beginning of each year. It includes the reinvestment of all dividends that an investor would be entitled to receive and is adjusted for stock splits. The interim measurement points show the value of $100 invested on December 31, 2018, as of the end of each year between 2019 and 2023. Chevron Corporation 2023 Annual Report XIX financial and operating highlights financial highlights1 2023 2022 2021 Net income attributable to Chevron Corporation Sales and other operating revenues Cash flow from operating activities Capital expenditures (Capex) Affiliate Capital Expenditures (Affiliate Capex) Total assets at year-end Total debt and finance lease obligations at year-end Chevron Corporation stockholders’ equity at year-end Common shares outstanding at year-end (Thousands)2 Per-share data Net income attributable to Chevron Corporation – diluted Cash dividends Chevron Corporation stockholders’ equity Total debt to total debt-plus equity ratio3 Net debt ratio3 Return on stockholders’ equity3 Return on average capital employed3 $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ 21,369 196,913 35,609 15,829 3,534 261,632 20,836 160,957 1,851,480 11.36 6.04 86.93 11.5% 7.3% 13.3% 11.9% 35,465 235,717 49,602 11,974 3,366 257,709 23,339 159,282 $ $ $ $ $ $ $ $ 15,625 155,606 29,187 8,056 3,167 239,535 31,369 139,067 1,901,048 1,915,638 $ $ $ 18.28 5.68 83.79 12.8% 3.3% 23.8% 20.3% 8.14 5.31 72.60 18.4% 15.6% 11.5% 9.4% 1 Millions of dollars, except per-share amounts 2 Net of Chevron Benefit Plan Trust shares, see page 66 for more information 3 See pages 50–51 for additional information Chevron Corporation 2023 Annual Report XX Cash returned to stockholders (Billions of dollars) Return on average capital employed (Percent) 30 20 10 0 2018 2019 2020 2021 2022 2023 25% 15% 5% -5% 2018 2019 2020 2021 2022 2023 Cash returned to stockholders – Total amount of cash returned to stockholders in the form of dividends and share repurchases. Return on Average Capital Employed – Net income attributable to Chevron (adjusted for after-tax interest expense and noncontrolling interest) divided by average capital employed. operating highlights1 2023 2022 2021 Net production of crude oil, condensate and synthetic oil (Thousands of barrels per day) 1,497 1,440 1,553 Net production of natural gas liquids (Thousands of barrels per day) Net production of natural gas (Millions of cubic feet per day) Net oil-equivalent production (Thousands of oil-equivalent barrels per day) Net proved reserves of crude oil, condensate and synthetic oil2 (Millions of barrels) Net proved reserves of natural gas liquids2 (Millions of barrels) Net proved reserves of natural gas2 (Billions of cubic feet) Net proved oil-equivalent reserves2 (Millions of barrels) Refinery crude oil input (Thousands of barrels per day) Sales of refined products (Thousands of barrels per day) 333 7,744 3,120 4,777 1,229 279 261 7,677 7,709 2,999 3,099 4,997 1,088 5,075 1,038 30,381 30,864 30,908 11,069 11,229 11,264 1,560 2,732 1,504 1,479 2,614 2,454 Number of employees at year-end3 40,212 38,258 37,498 1 Includes equity in affiliates, except number of employees 2 At year-end 3 Excludes service station employees (5,388 in 2023) Chevron Corporation 2023 Annual Report XXI process safety, reliability and integrity Process safety, reliability and integrity involves technical teams from engineering, operations and maintenance working together to detect and reduce risk from the physical and chemical features of the materials we process and the equipment we use. These highly skilled teams strive to design, operate and maintain safe systems that work as intended. The teams’ goal is to manage operating system integrity using design principles and engineering and operating practices to prevent and mitigate incidents. Our Operational Excellence Management System (OEMS) establishes expectations that provide a framework for managing risks and ensuring compliance with legal, regulatory and Operational Excellence (OE) requirements. These expectations help create a strong culture of safety, reliability and integrity in the company. Competency involves establishing and reinforcing measurable expectations for experience, skills and capabilities. Risk management systematically assesses risks and identifies safeguards to prevent or mitigate incidents or impacts. Assurance verifies safeguards are in place and functioning. Leadership is crucial to ensuring that our expectations are applied to process safety, reliability and integrity. Learn more about how we protect people and the environment at: chevron.co/safety 5 steps of stop work authority competency risk management leadership Competency involves ensuring that employees have the necessary skills and knowledge to perform their jobs safely and effectively while complying with all applicable laws, regulations and policies. Competency-building programs provide employees with the training and development opportunities they need to build their skills and knowledge. We use a risk management process to identify, assess, prioritize and mitigate health, environmental and safety risks through standardized procedures for existing operations and new project design, including aspects of construction. Viewed broadly, risk management helps us understand key risks to the business – risks that may or may not be process safety related – in addition to process safety technical risks and associated safeguards. Using the OEMS, our leaders establish a culture with values, competencies and behaviors that seeks a consistent and disciplined application of safety practices, processes and procedures. Leaders are responsible for building and sustaining an OE culture, focusing on preventing high-consequence incidents and impacts by understanding and mitigating risks, and managing and assuring safeguards. Promoting a culture of risk awareness and demonstrating our values and behaviors are important duties for any leader. Chevron Corporation 2023 Annual Report XXII Management’s Discussion and Analysis of Financial Condition and Results of Operations Key Financial Results ................................................................................ 34 Earnings by Major Operating Area ........................................................... 34 Business Environment and Outlook ......................................................... 34 Noteworthy Developments ....................................................................... 40 Results of Operations ............................................................................... 41 Consolidated Statement of Income ........................................................... 43 Selected Operating Data ........................................................................... 45 Liquidity and Capital Resources ............................................................... 46 Financial Ratios and Metrics ..................................................................... 50 Financial and Derivative Instrument Market Risk ..................................... 51 Transactions With Related Parties............................................................ 52 Litigation and Other Contingencies .......................................................... 52 Environmental Matters .............................................................................. 53 Critical Accounting Estimates and Assumptions ...................................... 54 New Accounting Standards ....................................................................... 57 Quarterly Results ...................................................................................... 58 Consolidated Financial Statements Reports of Management ............................................................................ 59 Report of Independent Registered Public Accounting Firm (PCAOB ID: 238) ....................................................................................... 60 Consolidated Statement of Income ........................................................... 62 Consolidated Statement of Comprehensive Income ............................... 63 Consolidated Balance Sheet ..................................................................... 64 Consolidated Statement of Cash Flows .................................................... 65 Consolidated Statement of Equity ............................................................ 66 Supplemental Information on Oil and Gas Producing Activities ........... 102 Note 4 Note 5 Note 6 Note 7 Note 8 Notes to the Consolidated Financial Statements Note 1 Note 2 Note 3 Summary of Significant Accounting Policies........................... 67 Changes in Accumulated Other Comprehensive Losses ....... 70 Information Relating to the Consolidated Statement of Cash Flows ............................................................................... 71 New Accounting Standards ..................................................... 72 Lease Commitments ................................................................ 72 Summarized Financial Data - Chevron U.S.A. Inc .................. 74 Summarized Financial Data - Tengizchevroil LLP .................. 74 Summarized Financial Data - Chevron Phillips Chemical Company LLC ........................................................................... 74 Fair Value Measurements ........................................................ 75 Note 9 Note 10 Financial and Derivative Instruments ...................................... 76 Note 11 Assets Held for Sale ................................................................. 77 Note 12 Equity ........................................................................................ 77 Note 13 Earnings Per Share .................................................................. 77 Note 14 Operating Segments and Geographic Data ............................ 78 Note 15 Investments and Advances ...................................................... 81 Note 16 Litigation ................................................................................... 82 Note 17 Taxes ........................................................................................ 85 Note 18 Properties, Plant and Equipment ............................................. 88 Note 19 Short-Term Debt ....................................................................... 88 Note 20 Long-Term Debt ....................................................................... 89 Note 21 Accounting for Suspended Exploratory Wells ........................ 89 Note 22 Stock Options and Other Share-Based Compensation ......... 90 Note 23 Employee Benefit Plans ........................................................... 92 Note 24 Other Contingencies and Commitments ................................. 97 Note 25 Asset Retirement Obligations .................................................. 98 Note 26 Revenue ................................................................................... 99 Note 27 Other Financial Information ..................................................... 99 Note 28 Financial Instruments - Credit Losses ................................... 100 Note 29 Acquisition of PDC Energy, Inc .............................................. 101 Note 30 Agreement to Acquire Hess Corporation .............................. 101 CAUTIONARY STATEMENTS RELEVANT TO FORWARD-LOOKING INFORMATION FOR THE PURPOSE OF “SAFE HARBOR” PROVISIONS OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995 This Annual Report of Chevron Corporation contains forward-looking statements relating to Chevron’s operations and energy transition plansthat are based on management’s current expectations, estimates and projections about the petroleum, chemicals and other energy-related industries. Words orphrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,”“approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “progress,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,”“guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions, andvariations or negatives of these words, are intended to identify such forward-looking statements, but not all forward-looking statements include such words.These statements are not guarantees of future performance and are subject to numerous risks, uncertainties and other factors, many of which are beyond thecompany’s control and are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in suchforward- 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, futureevents 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 naturalgas prices and demand for the company’s products, and production curtailments due to market conditions; crude oil production quotas or other actions thatmight be imposed by the Organization of Petroleum Exporting Countries and other producing countries; technological advancements; changes to governmentpolicies in the countries in which the company operates; public health crises, such as pandemics and epidemics, and any related government policies andactions; disruptions in the company’s global supply chain, including supply chain constraints and escalation of the cost of goods and services; changingeconomic, regulatory and political environments in the various countries in which the company operates; general domestic and international economic, marketand political conditions, including the military conflict between Russia and Ukraine, the war between Israel and Hamas and the global response to thesehostilities; changing refining, marketing and chemicals margins; actions of competitors or regulators; timing of exploration expenses; timing of crude oilliftings; the competitiveness of alternate-energy sources or product substitutes; development of large carbon capture and offset markets; the results of operationsand financial condition of the company’s suppliers, vendors, partners and equity affiliates; the inability or failure of the company’s joint-venture partners to fundtheir share of operations and development activities; the potential failure to achieve expected net production from existing and future crude oil and natural gasdevelopment projects; potential delays in the development, construction or start-up of planned projects; the potential disruption or interruption of the company’soperations due to war, accidents, political events, civil unrest, severe weather, cyber threats, terrorist acts, or other natural or human causes beyond thecompany’s control; the potential liability for remedial actions or assessments under existing or future environmental regulations and litigation; significantoperational, investment or product changes undertaken or required by existing or future environmental statutes and regulations, including internationalagreements and national or regional legislation and regulatory measures related to greenhouse gas emissions and climate change; the potential liability resultingfrom pending or future litigation; the ability to successfully integrate the operations of the company and PDC Energy, Inc. and achieve the anticipated benefitsfrom the transaction, including the expected incremental annual free cash flow; the risk that Hess Corporation (Hess) stockholders do not approve the potentialtransaction, and the risk that regulatory approvals are not obtained or are obtained subject to conditions that are not anticipated by the company and Hess;uncertainties as to whether the potential transaction will be consummated on the anticipated timing or at all, or if consummated, will achieve its anticipatedeconomic benefits, including as a result of regulatory proceedings and risks associated with third party contracts containing material consent, anti-assignment,transfer or other provisions that may be related to the potential transaction that are not waived or otherwise satisfactorily resolved; the company’s ability tointegrate Hess’ operations in a successful manner and in the expected time period; the possibility that any of the anticipated benefits and projected synergies ofthe potential transaction will not be realized or will not be realized within the expected time period; the company’s future acquisitions or dispositions of assets orshares or the delay or failure of such transactions to close based on required closing conditions; the potential for gains and losses from asset dispositions orimpairments; government mandated sales, divestitures, recapitalizations, taxes and tax audits, tariffs, sanctions, changes in fiscal terms or restrictions on scopeof company operations; foreign currency movements compared with the U.S. dollar; higher inflation and related impacts; material reductions in corporateliquidity and access to debt markets; changes to the company’s capital allocation strategies; the effects of changed accounting rules under generally acceptedaccounting principles promulgated by rule-setting bodies; the company’s ability to identify and mitigate the risks and hazards inherent in operating in the globalenergy industry; and the factors set forth under the heading “Risk Factors” on pages 20 through 26 in the Annual Report on Form 10-K, and as updated in the future. Other unpredictable or unknown factors not discussed in this report could also have material adverse effects on forward-looking statements. Chevron Corporation 2023 Annual Report 33 Management’s Discussion and Analysis of Financial Condition and Results of Operations Key Financial Results Millions of dollars, except per-share amounts Net Income (Loss) Attributable to Chevron Corporation Per Share Amounts: Net Income (Loss) Attributable to Chevron Corporation – Basic – Diluted Dividends Sales and Other Operating Revenues Return on: Capital Employed Stockholders’ Equity Earnings by Major Operating Area Millions of dollars Upstream United States International Total Upstream Downstream United States International Total Downstream All Other Net Income (Loss) Attributable to Chevron Corporation1,2 1 Includes foreign currency effects: 2 Income net of tax, also referred to as “earnings” in the discussions that follow. 2023 21,369 11.41 11.36 6.04 196,913 $ $ $ $ $ 2022 2021 35,465 $ 15,625 18.36 18.28 5.68 235,717 $ $ $ $ 8.15 8.14 5.31 155,606 11.9% 13.3% 20.3% 23.8% 9.4% 11.5% 2023 2022 2021 4,148 13,290 17,438 3,904 2,233 6,137 (2,206) 21,369 (224) $ $ $ $ 12,621 17,663 30,284 5,394 2,761 8,155 (2,974) 35,465 669 $ $ 7,319 8,499 15,818 2,389 525 2,914 (3,107) 15,625 306 $ $ $ $ $ $ $ $ Refer to the Results of Operations section for a discussion of financial results by major operating area for the three years ended December 31, 2023. Throughout the document, certain totals and percentages may not sum to their component parts due to rounding. Business Environment and Outlook Chevron Corporation is a global energy company with direct and indirect subsidiaries and affiliates that conduct substantial business activities in the following countries: Angola, Argentina, Australia, Bangladesh, Brazil, Canada, China, Egypt, Equatorial Guinea, Israel, Kazakhstan, Mexico, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait, the Philippines, Republic of Congo, Singapore, South Korea, Thailand, the United Kingdom, the United States and Venezuela. The company’s objective is to safely deliver higher returns, lower carbon and superior shareholder value in any business environment. Earnings of the company depend mostly on the profitability of its upstream business segment. The most significant factor affecting the results of operations for the upstream segment is the price of crude oil, which is determined in global markets outside of the company’s control. In the company’s downstream business, crude oil is the largest cost component of refined products. Periods of sustained lower commodity prices could result in the impairment or write-off of specific assets in future periods and cause the company to adjust operating expenses, including employee reductions, and capital expenditures, along with other measures intended to improve financial performance. Governments, companies, communities and other stakeholders are increasingly supporting efforts to address climate change. International initiatives and national, regional and state legislation and regulations that aim to directly or indirectly reduce GHG emissions are in various stages of design, adoption and implementation. These policies and programs, some of which support the global net zero emissions ambitions of the Paris Agreement, can change the amount of energy consumed, the rate of energy-demand growth, the energy mix and the relative economics of one fuel versus another. Implementation of jurisdiction-specific policies and programs can be dependent on, and can affect the pace of, technological advancements, the granting of necessary permits by governing authorities, the availability of cost-effective, verifiable carbon credits, the availability of suppliers that can meet sustainability and other standards, evolving regulatory or other requirements affecting ESG standards or other disclosures and evolving standards for tracking, reporting, marketing and advertising relating to emissions and emission reductions and removals. Some of these policies and programs include renewable and low carbon fuel standards, such as the Renewable Fuel Standard including program in the U.S. and California’s Low Carbon Fuel Standard; programs that price GHG emissions, 34 Chevron Corporation 2023 Annual Report 34 Management’s Discussion and Analysis of Financial Condition and Results of Operations California’s Cap-and-Trade Program; performance standards, including methane-specific regulations such as the U.S. EPA’s Standards of Performance for New, Reconstructed, and Modified Sources and Emissions Guidelines for Existing Sources; and measures that provide various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel, such as the U.S. Inflation Reduction Act. Requirements for these and other similar policies and programs are complex, ever changing, program specific and encompass: (1) the blending of renewable fuels into transportation fuels; (2) the purchasing, selling, utilizing and retiring of allowances and carbon credits; and (3) other emissions reduction measures including efficiency improvements and capturing GHG emissions. These compliance policies and programs have had and may continue to have negative impacts on the company now and in the future including, but not limited to, the displacement of hydrocarbon and other products and/or the impairment of assets. These policies have also enabled opportunities for Chevron in its lower carbon businesses. For example, the acquisition of Renewable Energy Group, Inc. (REG) in 2022 grew the company’s renewable fuels production capacity and increased the company’s carbon credit generation activities. Although we expect the company’s costs to comply with these policies and programs to continue to increase, these costs currently do not have a material impact on the company’s financial condition or results of operations. Significant uncertainty remains as to the pace and extent to which the transition to a lower carbon future will progress, which is dependent, in part, on further advancements and changes in policy, technology, and customer and consumer preferences. The level of expenditure required to comply with new or potential climate change-related laws and regulations and the amount of additional investments needed in new or existing technology or facilities, such as carbon capture and storage, is difficult to predict with certainty and is expected to vary depending on the actual laws and regulations enacted, available technology options, customer and consumer preferences, the company’s activities and market conditions. As discussed below, in 2021, the company announced planned capital spend of approximately $10 billion through 2028 in lower carbon investments. Although the future is uncertain, many published outlooks conclude that fossil fuels will remain a significant part of an energy system that increasingly incorporates lower carbon sources of supply for many years to come. Chevron supports the Paris Agreement’s global approach to governments addressing climate change and continues to take actions to help lower the carbon intensity of its operations while continuing to meet the demand for energy. Chevron believes that broad, market-based mechanisms are the most efficient approach to addressing GHG emission reductions. Chevron integrates climate change-related issues and the regulatory and other responses to these issues into its strategy and planning, capital investment reviews and risk management tools and processes, where it believes they are applicable. They are also factored into the company’s long-range supply, demand and energy price forecasts. These forecasts reflect estimates of long- range effects from climate change-related policy actions, such as electric vehicle and renewable fuel penetration, energy efficiency standards and demand response to oil and natural gas prices. The company will continue to develop oil and gas resources to meet customers’ and consumers’ demand for energy. At the same time, Chevron believes that the future of energy is lower carbon. The company will continue to maintain flexibility in its portfolio to be responsive to changes in policy, technology and customer and consumer preferences. Chevron aims to grow its oil and gas business, lower the carbon intensity of its operations and grow lower carbon businesses in renewable fuels, carbon capture and offsets, hydrogen and other emerging technologies. To grow its lower carbon businesses, Chevron plans to target sectors of the economy where emissions are harder to abate or that cannot be easily electrified, while leveraging the company’s capabilities, assets, partnerships and customer relationships. The company’s oil and gas business may increase or decrease depending upon regulatory or market forces, among other factors. In 2021, Chevron announced the following aspirations and targets that are aligned with its lower carbon strategy: 2050 Net Zero Upstream Aspiration Chevron aspires to achieve net zero for upstream production Scope 1 and 2 GHG emissions on an equity basis by 2050. The company believes accomplishing this aspiration depends on, among other things, partnerships with multiple stakeholders including customers, continuing progress on commercially viable technology, government policy, successful negotiations for carbon capture and storage and nature-based projects, availability and acceptability of cost-effective, verifiable offsets in the global market, and granting of necessary permits by governing authorities. 2028 Upstream Production GHG Intensity Targets These metrics include Scope 1, direct emissions, and Scope 2, indirect emissions associated with imported electricity and steam, and are net of emissions from exported electricity and steam. The 2028 GHG emissions intensity targets on an equity ownership basis include: 35 Chevron Corporation 2023 Annual Report 35 Management’s Discussion and Analysis of Financial Condition and Results of Operations • Oil production GHG intensity of 24 kilograms (kg) carbon dioxide equivalent per barrel of oil-equivalent (CO2e/boe), • Gas production GHG intensity of 24 kg CO2e/boe, • Methane intensity of 2 kg CO2e/boe, and • Flaring GHG intensity of 3 kg CO2e/boe. The company also targets no routine flaring by 2030. Chevron uses emissions intensity targets, which enable the company to assess, quantify and transparently communicate its own carbon performance in a standardized way. 2028 Portfolio Carbon Intensity Target The company also introduced a portfolio carbon intensity (PCI) metric, which is a measure of the carbon intensity across the full value chain of Chevron’s entire business. This metric encompasses the company’s upstream and downstream business and includes Scope 1 (direct emissions), Scope 2 (indirect emissions from imported electricity and steam), and certain Scope 3 (primarily emissions from use of sold products) emissions. The company’s PCI target is 71 grams (g) carbon dioxide equivalent (CO2e) per megajoule (MJ) by 2028. Planned Lower-Carbon Capital Spend through 2028 In 2021, the company established planned capital spend of approximately $10 billion through 2028 to advance its lower carbon strategy, which includes approximately $2 billion to lower the carbon intensity of its oil and gas operations, and approximately $8 billion for lower carbon investments in renewable fuels, hydrogen and carbon capture and offsets. We anticipate additional capital spending as the company progresses toward its 2050 upstream production Scope 1 and 2 net zero aspiration and further grows its lower carbon business lines. Since 2021, the company has spent $6.5 billion in lower carbon investments, including $2.9 billion associated with the acquisition of REG in 2022. Chevron’s goals, targets and aspirations reflect Chevron’s current plans, and Chevron may change them for various reasons, including market conditions; changes in its portfolio; and financial, operational, regulatory, reputational, legal and other factors. Refer to “Risk Factors” in Part I, Item 1A, on pages 20 through 26 of the company's Annual Report on Form 10-K for further discussion of GHG regulation and climate change and the associated risks to Chevron’s business, including the risks impacting Chevron’s lower carbon strategy and its aspirations, targets and plans. Income Taxes The effective tax rate for the company can change substantially during periods of significant earnings volatility. This is due to the mix effects that are impacted by both the absolute level of earnings or losses and whether they arise in higher or lower tax rate jurisdictions. As a result, a decline or increase in the effective income tax rate in one period may not be indicative of expected results in future periods. Additional information related to the company’s effective income tax rate is included in Note 17 Taxes to the Consolidated Financial Statements. The Inflation Reduction Act (IRA), enacted in the United States on August 16, 2022, imposes several new taxes that were effective in 2023, including a 15 percent minimum tax on book income and a one percent excise tax on stock repurchases. The IRA also implements various incentives for lower carbon activities, including carbon capture and storage and the production of hydrogen and sustainable aviation fuel, and extends the federal biodiesel mixture excise tax credit through December 31, 2024. The IRA has not had a material impact on our results of operations. In December 2021, the Organization for Economic Co-operation and Development (OECD) issued model rules for a new 15 percent global minimum tax (Pillar Two), and various jurisdictions in which the company operates enacted or are in the process of enacting Pillar Two legislation. Certain aspects of the tax under the Pillar Two framework will be effective beginning in 2024 in some jurisdictions and in 2025 (or later) in others. Although we do not currently expect that Pillar Two will have a material impact on our results of operations, we are continuing to evaluate the impact of legislative adoption by individual countries. Supply Chain and Inflation Impacts The company is actively managing its contracting, procurement and supply chain activities to effectively manage costs and facilitate supply chain resiliency and continuity in support of the company’s operational goals. Third party costs for capital and operating expenses can be subject to external factors beyond the company’s control including, but not limited to: severe weather or civil unrest, delays in construction, global and local supply chain distribution issues, inflation, tariffs or other taxes imposed on goods or services, and market-based prices charged by the industry’s material and service providers. Chevron utilizes contracts with various pricing mechanisms, which may result in a lag before the company’s costs reflect changes in market trends. 36 Chevron Corporation 2023 Annual Report 36 Management’s Discussion and Analysis of Financial Condition and Results of Operations While macroeconomic inflation is easing, trends in the costs of goods and services vary by spend category. The labor market remains tight, and suppliers are passing along wage rate increases for labor intensive operations. Chevron has applied inflation mitigation strategies in an effort to temper these cost increases, including fixed price and index-based contracts. Lead times for key capital equipment remain long. Chevron has addressed lead times by partnering with suppliers on demand planning, volume commitments, standardization and scope optimization. Raw material prices have declined, leading to a lower cost for drilling pipe, chemicals and construction materials. Onshore drilling activity in the United States declined; however, availability of specialized offshore drilling rigs, supply vessels and equipment to perform onshore hydraulic fracturing remains under pressure. Refer to the Cautionary Statement Relevant to Forward-Looking Information on page 33 and to Item 1A. Risk Factors of the company's Annual Report on Form 10-K for a discussion of some of the inherent risks that could materially impact the company’s results of operations or financial condition. Acquisition and Disposition of Assets The company continually evaluates opportunities to dispose of assets that are not expected to provide sufficient long-term value and to acquire assets or operations complementary to its asset base to help augment the company’s financial performance and value growth. Asset dispositions and restructurings may result in significant gains or losses in future periods. In addition, some assets are sold along with their related liabilities, such as abandonment and decommissioning obligations. In certain instances, such transferred obligations have, and may in the future, revert to the company and result in losses that could be significant. In fourth quarter 2023, the company recognized an after-tax loss of $1.9 billion related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico, as companies that purchased these assets have filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and the company believes it is now probable and estimable that a portion of these obligations will revert to the company. The cash outlays for these abandonment and decommissioning obligations are expected to take place over the next decade. Other Impacts The company closely monitors developments in the financial and credit markets, the level of worldwide economic activity, and the implications for the company of movements in prices for crude oil and natural gas. Management takes these developments into account in the conduct of daily operations and for business planning. Earnings trends for the company’s major business areas are described as follows: Upstream Earnings for the upstream segment are closely aligned with industry prices for crude oil and natural gas. Crude oil and natural gas prices are subject to external factors over which the company has no control, including product demand connected with global economic conditions, industry production and inventory levels, technology advancements, production quotas or other actions imposed by OPEC+ countries, actions of regulators, weather-related damage and disruptions, competing fuel prices, natural and human causes beyond the company’s control, and regional supply interruptions or fears thereof that may be caused by military conflicts, civil unrest or political uncertainty. Any of these factors could also inhibit the company’s production capacity in an affected region. The company closely monitors developments in the countries in which it operates and holds investments and seeks to manage risks in operating its facilities and businesses. The longer-term trend in earnings for the upstream segment is also a function of other factors, including the company’s ability to efficiently find, acquire and produce crude oil and natural gas, changes in fiscal terms of contracts, the pace of energy transition, and changes in tax, environmental and other applicable laws and regulations. The company has begun to experience regulatory challenges and delays in obtaining permits to conduct operations in certain jurisdictions. These challenges have, and may continue to, impact the company’s plans for future investments. For example, during fourth quarter 2023, the company impaired a portion of its U.S. upstream assets, primarily in California, due to continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans. The company expects to continue operating the impacted assets for many years to come. Chevron has interests in Venezuelan assets operated by independent affiliates. Chevron has been conducting limited activities in Venezuela consistent with the authorization provided pursuant to general licenses issued by the United States government. In fourth quarter 2022, Chevron received General License 41 from the United States government, enabling the company to resume activity in Venezuela subject to certain limitations, and the company continues such activities under this General License. The financial results for Chevron’s business in Venezuela are being recorded as non-equity investments since 2020, where income is only recognized when cash is received and production and reserves are not included in the company’s results. Crude oil liftings in Venezuela started in first quarter 2023, which have positively impacted the company’s 2023 results, but future results remain uncertain. 37 Chevron Corporation 2023 Annual Report 37 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations Governments (including Russia) have imposed and may impose additional sanctions and other trade laws, restrictions and Governments (including Russia) have imposed and may impose additional sanctions and other trade laws, restrictions and regulations that could lead to disruption in our ability to produce, transport and/or export crude in the region around Russia. regulations that could lead to disruption in our ability to produce, transport and/or export crude in the region around Russia. An adverse effect on the Caspian Pipeline Consortium (CPC) operations could have a negative impact on the Tengiz field in An adverse effect on the Caspian Pipeline Consortium (CPC) operations could have a negative impact on the Tengiz field in Kazakhstan and the company’s results of operations and financial position. The financial impacts of such risks, including Kazakhstan and the company’s results of operations and financial position. The financial impacts of such risks, including presently imposed sanctions, are not currently material for the company; however, it remains uncertain how long these presently imposed sanctions, are not currently material for the company; however, it remains uncertain how long these conditions may last or how severe they may become. conditions may last or how severe they may become. Chevron holds a 39.7 percent interest in the Leviathan field and a 25 percent interest in the Tamar gas field in Israel. In early Chevron holds a 39.7 percent interest in the Leviathan field and a 25 percent interest in the Tamar gas field in Israel. In early October 2023, due to a war between Israel and Hamas, the Government of Israel directed the company to shut down October 2023, due to a war between Israel and Hamas, the Government of Israel directed the company to shut down production at the Tamar gas field. Approximately one month later, the company resumed production, and the Tamar gas field production at the Tamar gas field. Approximately one month later, the company resumed production, and the Tamar gas field is currently operational. The Leviathan gas field was not impacted by the war and is currently operational. The financial is currently operational. The Leviathan gas field was not impacted by the war and is currently operational. The financial impacts of the Tamar shutdown and other operational impacts were not material for the company. However, given the impacts of the Tamar shutdown and other operational impacts were not material for the company. However, given the ongoing conflict, the future impacts on the company’s results of operations and financial condition remain uncertain. ongoing conflict, the future impacts on the company’s results of operations and financial condition remain uncertain. Commodity Prices The following chart shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate Commodity Prices The following chart shows the trend in benchmark prices for Brent crude oil, West Texas Intermediate (WTI) crude oil and U.S. Henry Hub natural gas. The Brent price averaged $83 per barrel for the full-year 2023, compared to (WTI) crude oil and U.S. Henry Hub natural gas. The Brent price averaged $83 per barrel for the full-year 2023, compared to $101 in 2022. As of mid-February 2024, the Brent price was $85 per barrel. The WTI price averaged $78 per barrel for the $101 in 2022. As of mid-February 2024, the Brent price was $85 per barrel. The WTI price averaged $78 per barrel for the full-year 2023, compared to $95 in 2022. As of mid-February 2024, the WTI price was $77 per barrel. The majority of the full-year 2023, compared to $95 in 2022. As of mid-February 2024, the WTI price was $77 per barrel. The majority of the company’s equity crude production is priced based on the Brent benchmark. company’s equity crude production is priced based on the Brent benchmark. WTI Crude Oil, Brent Crude Oil and Henry Hub Natural Gas Spot Prices - Quarterly Average Source: Platts Brent WTI Henry Hub Oil $/bbl 120 90 60 30 0 HH $/mcf 20.00 15.00 10.00 5.00 0.00 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 2021 2022 2023 Crude prices were volatile in 2023 due to tapering of post-pandemic demand resurgence, OPEC+ supply cuts, Federal Crude prices were volatile in 2023 due to tapering of post-pandemic demand resurgence, OPEC+ supply cuts, Federal Reserve interest rate action, and the proliferation of geopolitical conflict. The company’s average realization for U.S. crude Reserve interest rate action, and the proliferation of geopolitical conflict. The company’s average realization for U.S. crude oil and NGLs in 2023 was $59 per barrel, down 23 percent from 2022. The company’s average realization for international oil and NGLs in 2023 was $59 per barrel, down 23 percent from 2022. The company’s average realization for international crude oil and NGLs in 2023 was $72 per barrel, down 21 percent from 2022. crude oil and NGLs in 2023 was $72 per barrel, down 21 percent from 2022. In contrast to price movements in the global market for crude oil, prices for natural gas are also impacted by regional supply In contrast to price movements in the global market for crude oil, prices for natural gas are also impacted by regional supply and demand and infrastructure conditions in local markets. In the United States, prices at Henry Hub averaged $2.56 per and demand and infrastructure conditions in local markets. In the United States, prices at Henry Hub averaged $2.56 per thousand cubic feet (MCF) during 2023, compared with $6.36 per MCF during 2022. High storage levels and strong thousand cubic feet (MCF) during 2023, compared with $6.36 per MCF during 2022. High storage levels and strong production resulted in these lower prices. As of mid-February 2024, the Henry Hub spot price was $1.73 per MCF. (See page production resulted in these lower prices. As of mid-February 2024, the Henry Hub spot price was $1.73 per MCF. (See page 45 for the company’s average natural gas realizations for the U.S.) 45 for the company’s average natural gas realizations for the U.S.) Outside the United States, prices for natural gas also depend on a wide range of supply, demand and regulatory Outside the United States, prices for natural gas also depend on a wide range of supply, demand and regulatory circumstances. The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil circumstances. The company’s long-term contract prices for liquefied natural gas (LNG) are typically linked to crude oil prices. Most of the equity LNG offtake from the operated Australian LNG projects is committed under binding long-term prices. Most of the equity LNG offtake from the operated Australian LNG projects is committed under binding long-term contracts, with some sold in the Asian spot LNG market. International natural gas realizations averaged $7.69 per MCF contracts, with some sold in the Asian spot LNG market. International natural gas realizations averaged $7.69 per MCF during 2023, compared with $9.75 per MCF during 2022, mainly due to lower LNG prices. during 2023, compared with $9.75 per MCF during 2022, mainly due to lower LNG prices. Production The company’s worldwide net oil-equivalent production in 2023 was 3.1 million barrels per day, 4 percent Production The company’s worldwide net oil-equivalent production in 2023 was 3.1 million barrels per day, 4 percent higher than in 2022 primarily due to the acquisition of PDC Energy, Inc. (PDC) and growth in the Permian Basin. About higher than in 2022 primarily due to the acquisition of PDC Energy, Inc. (PDC) and growth in the Permian Basin. About 26 percent of the company’s net oil-equivalent production in 2023 occurred in OPEC+ member countries of Angola, 26 percent of the company’s net oil-equivalent production in 2023 occurred in OPEC+ member countries of Angola, Equatorial Guinea, Kazakhstan, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait and Republic of Congo. Equatorial Guinea, Kazakhstan, Nigeria, the Partitioned Zone between Saudi Arabia and Kuwait and Republic of Congo. 38 38 Chevron Corporation 2023 Annual Report 38 Management’s Discussion and Analysis of Financial Condition and Results of Operations The company estimates its net oil-equivalent production in 2024 to increase four to seven percent over 2023, assuming a Brent crude oil price of $80 per barrel and including expected asset sales. This estimate is subject to many factors and uncertainties, including quotas or other actions that may be imposed by OPEC+; price effects on entitlement volumes; changes in fiscal terms or restrictions on the scope of company operations; delays in construction; reservoir performance; greater-than-expected declines in production from mature fields; start-up or ramp-up of projects; acquisition and divestment of assets; fluctuations in demand for crude oil and natural gas in various markets; weather conditions that may shut in production; civil unrest; changing geopolitics; delays in completion of maintenance turnarounds; storage constraints or economic conditions that could lead to shut-in production; or other disruptions to operations. The outlook for future production levels is also affected by the size and number of economic investment opportunities and the time lag between initial exploration and the beginning of production. The company has increased its investment emphasis on short-cycle projects. Net crude oil production Thousands of barrels per day Net natural gas liquids production Thousands of barrels per day Net natural gas production Millions of cubic feet per day Net proved reserves by geographic area Billions of BOE* Net proved reserves by product Billions of BOE* Europe Australia Asia Africa Other Americas United States Europe Australia Asia Africa Other Americas United States Europe Australia Asia Africa Other Americas United States Natural gas Natural gas liquids Crude oil *BOE (barrels of oil-equivalent) Europe Australia Asia Africa Other Americas United States *BOE (barrels of oil-equivalent) Proved Reserves Net proved reserves for consolidated companies and affiliated companies totaled 11.1 billion barrels of oil-equivalent at year-end 2023, a slight decrease from year-end 2022. The reserve replacement ratio in 2023 was 86 percent. The 5 and 10 year reserve replacement ratios were 82 percent and 99 percent, respectively. Refer to Table V for a tabulation of the company’s proved net oil and gas reserves by geographic area, at the beginning of 2021 and each year-end from 2021 through 2023, and an accompanying discussion of major changes to proved reserves by geographic area for the three-year period ending December 31, 2023. Refer to the “Results of Operations” section on pages 41 and 42 for additional discussion of the company’s upstream business. Downstream Earnings for the downstream segment are closely tied to margins on the refining, manufacturing and marketing of products that include gasoline, diesel, jet fuel, lubricants, fuel oil, fuel and lubricant additives, petrochemicals and renewable fuels. Industry margins are sometimes volatile and can be affected by the global and regional supply-and-demand balance for refined products and petrochemicals, and by changes in the price of crude oil, other refinery and petrochemical feedstocks, and natural gas. Industry margins can also be influenced by inventory levels, geopolitical events, costs of materials and services, refinery or chemical plant capacity utilization, maintenance programs, and disruptions at refineries or chemical plants resulting from unplanned outages due to severe weather, fires or other operational events. Other factors affecting profitability for downstream operations include the reliability and efficiency of the company’s refining, marketing and petrochemical assets, the effectiveness of its crude oil and product supply functions, and the volatility of tanker-charter rates for the company’s shipping operations, which are driven by the industry’s demand for crude oil and product tankers. Other factors beyond the company’s control include the general level of inflation and energy 39 Chevron Corporation 2023 Annual Report 39 Management’s Discussion and Analysis of Financial Condition and Results of Operations costs to operate the company’s refining, marketing and petrochemical assets, and changes in tax, environmental, and other applicable laws and regulations. The company’s most significant marketing areas are the West Coast and Gulf Coast of the United States and Asia Pacific. Chevron operates or has significant ownership interests in refineries in each of these areas. Additionally, the company has a growing presence in renewable fuels in the United States after acquiring REG in 2022. Refer to the “Results of Operations” section on page 42 for additional discussion of the company’s downstream operations. All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities and technology companies. Noteworthy Developments Key noteworthy developments and other events during 2023 and early 2024 included the following: Angola Received approvals to extend Block 0 concession through 2050. Australia Achieved first natural gas production from the Gorgon Stage 2 development, supporting long-term energy supply in the Asia-Pacific region. Israel Reached final investment decision to construct a third gathering pipeline that is expected to increase natural gas production capacity from approximately 1.2 to nearly 1.4 billion cubic feet per day from the Leviathan reservoir. Japan Announced agreements to conduct pilot tests on advanced closed loop geothermal technology. Kazakhstan Achieved mechanical completion on the Future Growth Project at the company’s 50 percent-owned affiliate, Tengizchevroil. United States Announced an agreement to install new technologies on the company’s LNG vessels that are intended to reduce the carbon intensity of its LNG fleet operations. United States Expanded the Bayou Bend carbon capture and sequestration hub on the U.S. Gulf Coast through an acquisition of nearly 100,000 acres, and became the operator of the hub. United States Announced commercial collaboration to purchase next generation renewable feedstocks that are intended to benefit farmers and increase supplies to meet a growing demand for lower carbon renewable fuels. United States Acquired 73 exploration blocks in Gulf of Mexico lease sale 259 and submitted winning bids on an additional 28 exploration blocks in Gulf of Mexico lease sale 261, subject to final government approval. United States Achieved first oil at the Mad Dog 2 project in the Gulf of Mexico. United States Started operations of a solar power project with a joint venture partner in New Mexico to provide lower carbon energy for the Permian Basin. United States Converted the diesel hydrotreater at the El Segundo, California refinery to process either 100 percent renewable or traditional feedstocks. United States Completed the acquisition of PDC, adding 275,000 net acres in the Denver-Julesburg (DJ) Basin and 25,000 net acres in the Permian Basin. United States Completed the acquisition of a majority stake in ACES Delta, LLC, which is developing a green hydrogen production and storage hub in Utah. United States Announced a definitive agreement to acquire Hess Corporation (Hess), which is expected to strengthen Chevron’s long-term performance by adding world-class assets and people. Venezuela Received approval to extend licenses with PetroBoscan, S.A. and PetroIndependiente, S.A. through 2041. Common Stock Dividends The 2023 annual dividend was $6.04 per share, making 2023 the 36th consecutive year that the company increased its annual per share dividend payout. In January 2024, the company’s Board of Directors increased its quarterly dividend by $0.12 per share, approximately eight percent, to $1.63 per share payable in March 2024. Common Stock Repurchase Program The company repurchased $14.9 billion of its common stock in 2023 under its stock repurchase program. For more information on the common stock repurchase program, see Liquidity and Capital Resources. 40 Chevron Corporation 2023 Annual Report 40 Management’s Discussion and Analysis of Financial Condition and Results of Operations Results of Operations The following section presents the results of operations and variances on an after-tax basis for the company’s business segments – Upstream and Downstream – as well as for “All Other.” Earnings are also presented for the U.S. and international geographic areas of the Upstream and Downstream business segments. Refer to Note 14 Operating Segments and Geographic Data for a discussion of the company’s “reportable segments.” This section should also be read in conjunction with the discussion in Business Environment and Outlook. Refer to the Selected Operating Data for a three-year comparison of production volumes, refined product sales volumes and refinery inputs. A discussion of variances between 2022 and 2021 can be found in the “Results of Operations” section on pages 39 through 40 of the company’s 2022 Annual Report on Form 10-K filed with the SEC on February 23, 2023. Worldwide Upstream earnings Billions of dollars Worldwide Downstream earnings Billions of dollars U.S. refined product sales Thousands of barrels per day International refined product sales* Thousands of barrels per day $ $ United States International United States International Other Fuel oil Diesel/Gas oil Jet fuel Gasoline Other Fuel oil Diesel/Gas oil Jet fuel Gasoline U.S. Upstream Earnings Net Oil-Equivalent Production Liquids Production Natural Gas Production Liquids Realization Natural Gas Realization Unit * $MM MBOED MBD MMCFD $/BBL $/MCF $ $ $ 2023 2022 4,148 $ 12,621 $ 1,349 997 2,112 59.19 1.67 $ $ 1,181 888 1,758 76.71 5.55 $ $ 2021 7,319 1,139 858 1,689 56.06 3.11 * MBD — thousands of barrels per day; MMCFD — millions of cubic feet per day; BBL — Barrel; MCF — thousands of cubic feet; MBOED — thousands of barrels of oil-equivalent per day. U.S. upstream earnings decreased by $8.5 billion primarily due to lower realizations of $6.2 billion, $1.9 billion in charges related to abandonment and decommissioning obligations for previously sold oil and gas producing assets in the U.S. Gulf of Mexico, and higher impairment charges of $1.8 billion, mainly from assets in California. Partially offsetting these items are higher sales volumes of $1.9 billion. Higher 2023 operating expenses of $460 million were more than offset by the absence of a 2022 early contract termination at Sabine Pass of $600 million. Net oil-equivalent production was up 168,000 barrels per day, or 14 percent, primarily due to the acquisition of PDC and growth in the Permian Basin. 41 Chevron Corporation 2023 Annual Report 41 Management’s Discussion and Analysis of Financial Condition and Results of Operations International Upstream Earnings (1) Net Oil-Equivalent Production Liquids Production Natural Gas Production Liquids Realization Natural Gas Realization (1) Includes foreign currency effects: Unit (2) $MM MBOED MBD MMCFD $/BBL $/MCF $ $ $ $ 2023 2022 13,290 $ 17,663 $ 1,771 833 5,632 71.70 7.69 376 $ $ $ 1,818 831 5,919 90.71 9.75 816 $ $ $ 2021 8,499 1,960 956 6,020 64.53 5.93 302 (2) MBD — thousands of barrels per day; MMCFD — millions of cubic feet per day; BBL — Barrel; MCF — thousands of cubic feet; MBOED — thousands of barrels of oil-equivalent per day. International upstream earnings decreased by $4.4 billion primarily due to lower realizations of $7.2 billion and lower sales volumes of $280 million, partially offset by lower depreciation expense of $1.4 billion mainly due to absence of write-off and impairment charges in 2022, lower operating expenses of $820 million and a favorable one-time tax benefit in Nigeria of $560 million. Foreign currency effects had an unfavorable impact on earnings of $440 million between periods. Net oil-equivalent production was down 47,000 barrels per day, or 3 percent. The decrease was primarily due to normal field declines, shutdowns and lower production following expiration of the Erawan concession in Thailand. U.S. Downstream Earnings Refinery Crude Oil Inputs Refined Product Sales * MBD — thousands of barrels per day. Unit * $MM MBD MBD 2023 $ 3,904 $ 934 1,287 2022 5,394 866 1,228 $ 2021 2,389 903 1,139 U.S. downstream earnings decreased by $1.5 billion primarily due to lower margins on refined product sales of $660 million, higher operating expenses of $490 million and lower earnings from the 50 percent-owned CPChem of $220 million. Refinery crude oil input was up 68,000 barrels per day, or 8 percent, primarily due to a smaller impact from planned turnaround activity at the Richmond, California refinery and higher crude oil processed in place of other feedstocks at the Pascagoula, Mississippi refinery. These increases were partially offset by planned turnaround impacts at the El Segundo, California refinery in first quarter 2023. Refined product sales were up 59,000 barrels per day, or 5 percent, primarily due to higher jet fuel demand and higher renewable fuel sales following the REG acquisition. International Downstream Earnings (1) Refinery Crude Oil Inputs Refined Product Sales (1) Includes foreign currency effects: (2) MBD — thousands of barrels per day. Unit (2) $MM MBD MBD $ 2023 2,233 626 1,445 (12) $ 2022 2,761 639 1,386 235 $ $ 2021 525 576 1,315 185 $ $ International downstream earnings decreased by $528 million primarily due to higher operating expenses of $360 million and an unfavorable swing in foreign currency effects of $247 million between periods. Refinery crude oil input was down 13,000 barrels per day, or 2 percent, compared to the year-ago period. Refined product sales were up 59,000 barrels per day, or 4 percent, primarily due to higher demand for jet fuel and gasoline. 42 Chevron Corporation 2023 Annual Report 42 Management’s Discussion and Analysis of Financial Condition and Results of Operations All Other Net charges* *Includes foreign currency effects: Unit $MM $ $ 2023 (2,206) (588) $ $ 2022 (2,974) $ (382) $ 2021 (3,107) (181) All Other consists of worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, and technology companies. Net charges decreased by $768 million primarily due to lower employee benefit costs and higher interest income, partially offset by an unfavorable swing of $206 million in foreign currency effects. Consolidated Statement of Income Comparative amounts for certain income statement categories are shown below. A discussion of variances between 2022 and 2021 can be found in the “Consolidated Statement of Income” section on pages 41 and 42 of the company’s 2022 Annual Report on Form 10-K. Millions of dollars Sales and other operating revenues 2023 2022 2021 $ 196,913 $ 235,717 $ 155,606 Sales and other operating revenues decreased in 2023 mainly due to lower commodity prices, partially offset by higher refined product sales volumes. Millions of dollars Income (loss) from equity affiliates 2023 5,131 $ 2022 $ 8,585 $ 2021 5,657 Income from equity affiliates decreased in 2023 mainly due to lower upstream-related earnings from Tengizchevroil in Kazakhstan and Angola LNG and lower downstream-related earnings from GS Caltex in Korea and CPChem. Refer to Note 15 Investments and Advances for a discussion of Chevron’s investments in affiliated companies. Millions of dollars Other income (loss) 2023 2022 $ (1,095) $ 1,950 $ 2021 1,202 Other income decreased in 2023 mainly due to charges related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico, an unfavorable swing in foreign currency effects and lower gains on asset sales, partially offset by income from Venezuela non-equity investments and higher interest income. Millions of dollars Purchased crude oil and products 2023 2022 $ 119,196 $ 145,416 $ Crude oil and product purchases decreased in 2023 primarily due to lower commodity prices. Millions of dollars 2023 2022 Operating, selling, general and administrative expenses $ 29,028 $ 29,026 $ 2021 92,249 2021 24,740 Operating, selling, general and administrative expenses were relatively unchanged compared to last year. Higher transportation and materials and supplies expenses were offset by lower employee benefit costs and the absence of early contract termination fees at Sabine Pass in 2022. Millions of dollars Exploration expense 2023 914 $ 2022 $ 974 $ Exploration expenses in 2023 decreased primarily due to lower charges for well write-offs. Millions of dollars Depreciation, depletion and amortization 2023 2022 $ 17,326 $ 16,319 $ 2021 549 2021 17,925 Depreciation, depletion and amortization expenses increased in 2023 primarily due to higher impairment charges and higher production, partially offset by lower rates. 43 Chevron Corporation 2023 Annual Report 43 Management’s Discussion and Analysis of Financial Condition and Results of Operations Millions of dollars Taxes other than on income $ Taxes other than on income increased in 2023 primarily due to higher excise taxes. Millions of dollars Interest and debt expense $ 2023 4,220 2023 469 $ $ 2022 4,032 $ 2022 516 $ Interest and debt expenses decreased in 2023 mainly due to higher capitalized interest and lower debt balances. Millions of dollars Other components of net periodic benefit costs 2023 212 $ 2022 $ 295 $ 2021 3,963 2021 712 2021 688 Other components of net periodic benefit costs decreased in 2023 primarily due to lower pension settlement costs as fewer lump-sum pension distributions were made in the current year, partially offset by the impact of higher interest rates. Millions of dollars Income tax expense (benefit) 2023 8,173 $ 2022 $ 14,066 $ 2021 5,950 The decrease in income tax expense in 2023 of $5.9 billion is due to the decrease in total income before tax for the company of $20.1 billion. The decrease in income before taxes for the company is primarily the result of lower upstream realizations and downstream margins. U.S. income before tax decreased from $21.0 billion in 2022 to $8.6 billion in 2023. This $12.4 billion decrease in income was primarily driven by lower upstream realizations and downstream margins, charges related to abandonment and decommissioning obligations, and higher impairment charges, partially offset by higher sales volumes. The decrease in income had a direct impact on the company’s U.S. income tax resulting in a decrease to tax expense of $2.7 billion between year-over-year periods, from $4.5 billion in 2022 to $1.8 billion in 2023. International income before tax decreased from $28.7 billion in 2022 to $21.0 billion in 2023. This $7.7 billion decrease in income was primarily driven by lower upstream realizations, partly offset by the absence of a 2022 write-off and impairment charges. The decrease in income primarily drove the $3.2 billion decrease in international income tax expense between year- over-year periods, from $9.6 billion in 2022 to $6.4 billion in 2023. Refer also to the discussion of the effective income tax rate in Note 17 Taxes. 44 Chevron Corporation 2023 Annual Report 44 Management’s Discussion and Analysis of Financial Condition and Results of Operations Selected Operating Data1,2 U.S. Upstream Net Crude Oil and Natural Gas Liquids (NGLs) Production Net Natural Gas Production3 Net Oil-Equivalent Production Sales of Natural Gas4 Sales of NGLs Revenues from Net Production Crude NGLs Liquids (weighted average of Crude and NGLs) Natural Gas International Upstream Net Crude Oil and NGLs Production5 Net Natural Gas Production3 Net Oil-Equivalent Production5 Sales of Natural Gas Sales of NGLs Revenues from Liftings Crude NGLs Liquids (weighted average of Crude and NGLs) Natural Gas Worldwide Upstream Net Oil-Equivalent Production5 United States International Total U.S. Downstream Gasoline Sales6 Other Refined Product Sales Total Refined Product Sales Sales of Natural Gas4 Sales of NGLs Refinery Crude Oil Input International Downstream Gasoline Sales6 Other Refined Product Sales Total Refined Product Sales7 Sales of Natural Gas4 Sales of NGLs Refinery Crude Oil Input $ $ $ $ $ $ $ $ Unit MBD MMCFD MBOED MMCFD MBD $/BBL $/BBL $/BBL $/MCF MBD MMCFD MBOED MMCFD MBD $/BBL $/BBL $/BBL $/MCF MBOED MBOED MBOED MBD MBD MBD MMCFD MBD MBD MBD MBD MBD MMCFD MBD MBD $ $ $ $ $ $ $ $ 2023 997 2,112 1,349 4,637 354 75.04 20.04 59.19 1.67 833 5,632 1,771 6,025 94 74.29 24.01 71.70 7.69 1,349 1,771 3,120 642 645 1,287 32 22 934 353 1,092 1,445 1 153 626 $ $ $ $ $ $ $ $ 2022 888 1,758 1,181 4,354 276 92.41 33.80 76.71 5.55 831 5,919 1,818 5,786 107 93.73 37.56 90.71 9.75 1,181 1,818 2,999 639 589 1,228 24 27 866 336 1,050 1,386 3 127 639 2021 858 1,689 1,139 3,986 201 65.29 28.46 56.06 3.11 956 6,020 1,960 5,178 84 65.77 40.35 64.53 5.93 1,139 1,960 3,099 655 484 1,139 21 29 903 321 994 1,315 — 96 576 1 Includes company share of equity affiliates. 2 MBD – thousands of barrels per day; MMCFD – millions of cubic feet per day; MBOED – thousands of barrels of oil-equivalents per day; Bbl – barrel; MCF – thousands of cubic feet. Oil-equivalent gas (OEG) conversion ratio is 6,000 cubic feet of natural gas = 1 barrel of crude oil; MBOED - thousands of barrels of oil-equivalent per day. 3 Includes natural gas consumed in operations: United States International 4 Downstream sales of Natural Gas separately identified from Upstream. 5 6 7 Includes net production of synthetic oil: Canada Includes branded and unbranded gasoline. Includes sales of affiliates: MMCFD MMCFD MBD MBD 64 532 51 389 53 517 45 389 44 548 55 357 45 Chevron Corporation 2023 Annual Report 45 Management’s Discussion and Analysis of Financial Condition and Results of Operations Liquidity and Capital Resources Sources and Uses of Cash The strength of the company’s balance sheet enables it to fund any timing differences throughout the year between cash inflows and outflows. Cash, Cash Equivalents and Marketable Securities Total balances were $8.2 billion and $17.9 billion at December 31, 2023 and 2022, respectively. The company holds its cash with a diverse group of major financial institutions and has processes and safeguards in place designed to manage its cash balances and mitigate the risk of loss. Cash provided by operating activities in 2023 was $35.6 billion, compared to $49.6 billion in 2022, primarily due to lower upstream realizations and refining margins. Cash provided by operating activities was net of contributions to employee pension plans of approximately $1.1 billion in 2023 and $1.3 billion in 2022. Capital expenditures totaled $15.8 billion in 2023 compared to $12.0 billion in 2022. Proceeds and deposits related to asset sales and return of investments totaled $669 million in 2023 compared to $2.6 billion in 2022. Cash flow from financing activities includes proceeds from shares issued for stock options of $261 million in 2023, compared with a higher than typical $5.8 billion in 2022 when a large number of stock options were exercised. Restricted cash of $1.1 billion and $1.4 billion at December 31, 2023 and 2022, respectively, was held in cash and short-term marketable securities and recorded as “Deferred charges and other assets” and “Prepaid expenses and other current assets” on the Consolidated Balance Sheet. These amounts are generally associated with upstream decommissioning activities, tax payments and funds held in escrow for tax-deferred exchanges. Dividends Dividends paid to common stockholders were $11.3 billion in 2023 and $11.0 billion in 2022. Debt and Finance Lease Liabilities Total debt and finance lease liabilities were $20.8 billion at December 31, 2023, down from $23.3 billion at year-end 2022. The $2.5 billion decrease in total debt and finance lease liabilities during 2023 was primarily due to the repayment of long- term notes that matured during the year. The company’s debt and finance lease liabilities due within one year, consisting primarily of the current portion of long-term debt and redeemable long-term obligations, totaled $5.1 billion at December 31, 2023, compared with $6.0 billion at year-end 2022. Of these amounts, $4.5 billion and $4.1 billion were reclassified to long- term debt at the end of 2023 and 2022, respectively. At year-end 2023, settlement of these obligations was not expected to require the use of working capital in 2024, as the company had the intent and the ability, as evidenced by committed credit facilities, to refinance them on a long-term basis. During third quarter 2023, the company assumed $1.5 billion of debt in conjunction with the PDC acquisition, including balances outstanding under the revolving credit facility, PDC’s 6.125% notes due 2024 (2024 notes) and PDC’s 5.75% notes due 2026 (2026 notes). The outstanding balances under the revolving credit facility and the 2024 notes were repaid during third quarter 2023. The company also irrevocably deposited sufficient U.S. Treasury securities with U.S. Bank Trust Company, N.A., as trustee, to fund the redemption of the 2026 notes, resulting in the indenture being satisfied and discharged. The company has access to a commercial paper program as a financing source for working capital or other short-term needs. The company had no commercial paper outstanding as of December 31, 2023. 46 Chevron Corporation 2023 Annual Report 46 Management’s Discussion and Analysis of Financial Condition and Results of Operations Management’s Discussion and Analysis of Financial Condition and Results of Operations Cash from operating activities compared with capital expenditures and shareholder distributions Billions of dollars Capital expenditures by segment Billions of dollars Affiliate capital expenditures Billions of dollars Debt at year-end Billions of dollars Debt ratios Percent 50.0 40.0 30.0 20.0 10.0 0.0 $42.1 $35.6 18.0 15.0 12.0 9.0 6.0 3.0 0.0 $15.8 18.0 15.0 12.0 9.0 6.0 3.0 0.0 40.0 30.0 20.0 10.0 0.0 $3.5 $20.8 $12.6 21 22 23 21 22 23 21 22 23 21 22 23 Dividends Capital expenditures Stock repurchases Cash from operating activities All Other Downstream Upstream All Other Downstream Upstream Total debt Net debt* * Refer to page 50-51 of the company's 2023 Annual Report on Form 10-K for calculations of total debt and net debt. 20.0 15.0 10.0 5.0 0.0 11.5% 7.3% 21 22 23 Debt ratio Net debt ratio* * Refer to page 50-51 of the company's 2023 Annual Report on Form 10-K for calculations of debt ratio and net debt ratio. The major debt rating agencies routinely evaluate the company’s debt, and the company’s cost of borrowing can increase or The major debt rating agencies routinely evaluate the company’s debt, and the company’s cost of borrowing can increase or decrease depending on these debt ratings. The company has outstanding public bonds issued by Chevron Corporation, decrease depending on these debt ratings. The company has outstanding public bonds issued by Chevron Corporation, Chevron U.S.A. Inc. (CUSA), Noble Energy, Inc. (Noble), and Texaco Capital Inc. Most of these securities are the Chevron U.S.A. Inc. (CUSA), Noble Energy, Inc. (Noble), and Texaco Capital Inc. Most of these securities are the obligations of, or guaranteed by, Chevron Corporation and are rated AA- by Standard and Poor’s Corporation and Aa2 by obligations of, or guaranteed by, Chevron Corporation and are rated AA- by Standard and Poor’s Corporation and Aa2 by Moody’s Investors Service. The company’s U.S. commercial paper is rated A-1+ by Standard and Poor’s and P-1 by Moody’s Investors Service. The company’s U.S. commercial paper is rated A-1+ by Standard and Poor’s and P-1 by Moody’s. All of these ratings denote high-quality, investment-grade securities. Moody’s. All of these ratings denote high-quality, investment-grade securities. The company’s future debt level is dependent primarily on results of operations, cash that may be generated from asset The company’s future debt level is dependent primarily on results of operations, cash that may be generated from asset dispositions, the capital program, lending commitments to affiliates and shareholder distributions. Based on its high-quality dispositions, the capital program, lending commitments to affiliates and shareholder distributions. Based on its high-quality debt ratings, the company believes that it has substantial borrowing capacity to meet unanticipated cash requirements. During debt ratings, the company believes that it has substantial borrowing capacity to meet unanticipated cash requirements. During extended periods of low prices for crude oil and natural gas and narrow margins for refined products and commodity extended periods of low prices for crude oil and natural gas and narrow margins for refined products and commodity chemicals, the company has the ability to modify its capital spending plans and discontinue or curtail the stock repurchase chemicals, the company has the ability to modify its capital spending plans and discontinue or curtail the stock repurchase program. This provides the flexibility to continue paying the common stock dividend and remain committed to retaining the program. This provides the flexibility to continue paying the common stock dividend and remain committed to retaining the company’s high-quality debt ratings. company’s high-quality debt ratings. Committed Credit Facilities Information related to committed credit facilities is included in Note 19 Short-Term Debt. Committed Credit Facilities Information related to committed credit facilities is included in Note 19 Short-Term Debt. Summarized Financial Information for Guarantee of Securities of Subsidiaries CUSA issued bonds that are fully and Summarized Financial Information for Guarantee of Securities of Subsidiaries CUSA issued bonds that are fully and unconditionally guaranteed on an unsecured basis by Chevron Corporation (together, the “Obligor Group”). The tables below unconditionally guaranteed on an unsecured basis by Chevron Corporation (together, the “Obligor Group”). The tables below contain summary financial information for Chevron Corporation, as Guarantor, excluding its consolidated subsidiaries, and contain summary financial information for Chevron Corporation, as Guarantor, excluding its consolidated subsidiaries, and CUSA, as the issuer, excluding its consolidated subsidiaries. The summary financial information of the Obligor Group is CUSA, as the issuer, excluding its consolidated subsidiaries. The summary financial information of the Obligor Group is presented on a combined basis, and transactions between the combined entities have been eliminated. Financial information presented on a combined basis, and transactions between the combined entities have been eliminated. Financial information for non-guarantor entities has been excluded. for non-guarantor entities has been excluded. Sales and other operating revenues Sales and other operating revenues Sales and other operating revenues - related party Sales and other operating revenues - related party Total costs and other deductions Total costs and other deductions Total costs and other deductions - related party Total costs and other deductions - related party Net income (loss) Net income (loss) Year Ended Year Ended December 31, 2023 December 31, 2023 Year Ended Year Ended December 31, 2022 December 31, 2022 (Millions of dollars) (unaudited) (Millions of dollars) (unaudited) $ $ $ $ 100,405 100,405 $ $ 44,553 44,553 102,773 102,773 35,781 35,781 12,190 12,190 $ $ 126,911 126,911 50,082 50,082 121,757 121,757 43,042 43,042 15,043 15,043 47 47 Chevron Corporation 2023 Annual Report 47 Management’s Discussion and Analysis of Financial Condition and Results of Operations Current assets Current assets - related party Other assets Current liabilities Current liabilities - related party Other liabilities Total net equity (deficit) At December 31, 2023 At December 31, 2022 (Millions of dollars) (unaudited) $ $ 19,006 $ 18,375 54,558 20,512 132,474 28,849 (89,896) $ 28,781 12,326 50,505 22,663 118,277 27,353 (76,681) Common Stock Repurchase Program In first quarter 2023, the company purchased a total of 22.4 million shares for $3.7 billion under the February 2019 stock repurchase program. On January 25, 2023, the Board of Directors authorized the repurchase of the company’s shares of common stock in an aggregate amount of $75 billion (the “2023 Program”). The 2023 Program took effect on April 1, 2023, and does not have a fixed expiration date. As of December 31, 2023, the company had purchased a total of 70.4 million shares for $11.2 billion, resulting in $63.8 billion remaining under the 2023 Program. In aggregate, the company purchased 92.8 million shares for $14.9 billion in 2023. In connection with the pending transaction with Hess, share repurchases have been restricted pursuant to SEC regulations since the acquisition announcement and will be restricted until the date of the Hess stockholder vote. Chevron expects share repurchases in the first quarter of 2024 to be around $3 billion plus or minus 20 percent, depending primarily on the timing of the Hess definitive proxy statement mailing. Repurchases of shares of the company’s common stock may be made from time to time in the open market, by block purchases, in privately negotiated transactions or in such other manner as determined by the company. The timing of the repurchases and the actual amount repurchased will depend on a variety of factors, including the market price of the company’s shares, general market and economic conditions, and other factors. The stock repurchase program does not obligate the company to acquire any particular amount of common stock and may be suspended or discontinued at any time. Capital Expenditures Capital expenditures (Capex) primarily includes additions to fixed asset or investment accounts for the company’s consolidated subsidiaries and is disclosed in the Consolidated Statement of Cash Flows. Capex by business segment for 2023, 2022 and 2021 is as follows: Capex Millions of dollars Upstream Downstream All Other Capex $ U.S. 9,842 1,536 351 $ Int’l. 3,836 237 27 $ 2023 Total 13,678 1,773 378 $ U.S. 6,847 1,699 310 $ Int’l. 2,718 375 25 $ Year ended December 31 $ U.S. 4,554 806 221 $ Int’l. 2,221 234 20 $ 2021 Total 6,775 1,040 241 2022 Total 9,565 2,074 335 $ 11,729 $ 4,100 $ 15,829 $ 8,856 $ 3,118 $ 11,974 $ 5,581 $ 2,475 $ 8,056 Capex for 2023 was $15.8 billion, 32 percent higher than 2022 due to higher investments in the United States, including about $450 million invested in PDC assets post-acquisition and approximately $650 million of inorganic spend, mainly due to the acquisition of a majority stake in ACES Delta, LLC. Capex excludes the acquisition cost of PDC. The company estimates that 2024 Capex will be approximately $16 billion. In the upstream business, Capex is estimated to be $14 billion, two-thirds of which is expected to be in the U.S., and includes around $5 billion for Permian Basin development and roughly $1.5 billion for other shale & tight assets in the U.S. About 25 percent of U.S upstream Capex is planned for projects in the Gulf of Mexico. Worldwide downstream spending in 2024 is estimated to be $1.5 billion with 80 percent allocated in the U.S. In addition, investments in technology businesses and other corporate operations in 2024 are projected to be about $0.5 billion. Lower carbon Capex included in the upstream and downstream segments totals around $2 billion, including investments to lower the carbon intensity of Chevron’s traditional operations and grow new energy business lines. Affiliate Capital Expenditures Equity affiliate capital expenditures (Affiliate Capex) primarily includes additions to fixed asset and investment accounts in the equity affiliate companies’ financial statements and does not require cash outlays by the company. Affiliate Capex by business segment for 2023, 2022 and 2021 is as follows: 48 Chevron Corporation 2023 Annual Report 48 Management’s Discussion and Analysis of Financial Condition and Results of Operations Affiliate Capex Millions of dollars Upstream Downstream All Other Affiliate Capex U.S. — $ 983 — Int’l. 2,310 241 — $ 2023 Total 2,310 1,224 — 983 $ 2,551 $ 3,534 $ $ U.S. — $ 768 — Int’l. 2,406 192 — $ 2022 Total 2,406 960 — 768 $ 2,598 $ 3,366 $ $ Year ended December 31 U.S. 2 365 — 367 $ $ $ Int’l. 2,404 396 — 2021 Total $ 2,406 761 — $ 2,800 $ 3,167 Affiliate Capex for 2023 was $3.5 billion, 5 percent higher than 2022 due to higher spend at CPChem’s two major integrated polymer projects. Affiliate Capex is expected to be $3 billion in 2024. Nearly half of Affiliate Capex is for Tengizchevroil’s FGP/WPMP Project in Kazakhstan and about a third is for CPChem. The company monitors market conditions and can adjust future capital outlays should conditions change. Noncontrolling Interests The company had noncontrolling interests of $972 million at December 31, 2023 and $960 million at December 31, 2022. Distributions to noncontrolling interests net of contributions totaled $40 million and $114 million in 2023 and 2022, respectively. Included within noncontrolling interests at December 31, 2023 is $166 million of redeemable noncontrolling interest. Pension Obligations Information related to pension plan contributions is included in Note 23 Employee Benefit Plans, under the heading “Cash Contributions and Benefit Payments.” Contractual Obligations Information related to the company’s significant contractual obligations is included in Note 19 Short-Term Debt, in Note 20 Long-Term Debt and in Note 5 Lease Commitments. The aggregate amount of interest due on these obligations, excluding leases, is: 2024 – $554; 2025 – $494; 2026 – $413; 2027 – $358; 2028 – $319; after 2028 – $3,212. Including Throughput and Take-or-Pay Long-Term Unconditional Purchase Obligations and Commitments, Agreements Information related to these off-balance sheet matters is included in Note 24 Other Contingencies and Commitments, under the heading “Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput and Take-or-Pay Agreements.” Direct Guarantees Information related to guarantees is included in Note 24 Other Contingencies and Commitments under the heading “Guarantees.” Indemnifications Information related to indemnifications is included in Note 24 Other Contingencies and Commitments under the heading “Indemnifications.” 49 Chevron Corporation 2023 Annual Report 49 Management’s Discussion and Analysis of Financial Condition and Results of Operations Financial Ratios and Metrics The following represent several metrics the company believes are useful measures to monitor the financial health of the company and its performance over time: Current Ratio Current assets divided by current liabilities, which indicates the company’s ability to repay its short-term liabilities with short-term assets. The current ratio in all periods is adversely affected by the fact that Chevron’s inventories are valued on a last-in, first-out basis. At year-end 2023, the book value of inventory was lower than replacement costs, based on average acquisition costs during the year, by approximately $6.5 billion. Millions of dollars Current assets Current liabilities Current Ratio $ 2023 41,128 32,258 1.3 At December 31 $ 2022 50,343 34,208 1.5 $ 2021 33,738 26,791 1.3 Interest Coverage Ratio Income before income tax expense, plus interest and debt expense and amortization of capitalized interest, less net income attributable to noncontrolling interests, divided by before-tax interest costs. This ratio indicates the company’s ability to pay interest on outstanding debt. Millions of dollars Income (Loss) Before Income Tax Expense Plus: Interest and debt expense Plus: Before-tax amortization of capitalized interest Less: Net income attributable to noncontrolling interests Subtotal for calculation Total financing interest and debt costs Interest Coverage Ratio $ $ 2023 29,584 469 223 42 30,234 617 49.0 Year ended December 31 $ $ 2022 49,674 516 199 143 50,246 630 79.8 $ $ 2021 21,639 712 215 64 22,502 775 29.0 Free Cash Flow The cash provided by operating activities less capital expenditures, which represents the cash available to creditors and investors after investing in the business. Millions of dollars Net cash provided by operating activities Less: Capital expenditures Free Cash Flow 2023 35,609 15,829 19,780 $ $ Year ended December 31 2022 49,602 11,974 37,628 $ $ 2021 29,187 8,056 21,131 $ $ Debt Ratio Total debt as a percentage of total debt plus Chevron Corporation Stockholders’ Equity, which indicates the company’s leverage. Millions of dollars Short-term debt Long-term debt Total debt $ 2023 529 20,307 20,836 At December 31 $ 2022 1,964 21,375 23,339 $ 2021 256 31,113 31,369 Total Chevron Corporation Stockholders’ Equity 160,957 159,282 139,067 Total debt plus total Chevron Corporation Stockholders’ Equity $ 181,793 $ 182,621 $ 170,436 Debt Ratio 11.5 % 12.8 % 18.4 % 50 Chevron Corporation 2023 Annual Report 50 Management’s Discussion and Analysis of Financial Condition and Results of Operations Net Debt Ratio Total debt less cash and cash equivalents and marketable securities as a percentage of total debt less cash and cash equivalents and marketable securities, plus Chevron Corporation Stockholders’ Equity, which indicates the company’s leverage, net of its cash balances. Millions of dollars Short-term debt Long-term debt Total Debt Less: Cash and cash equivalents Less: Marketable securities Total adjusted debt Total Chevron Corporation Stockholders’ Equity $ 2023 529 20,307 20,836 8,178 45 12,613 160,957 $ 2022 1,964 21,375 23,339 17,678 223 5,438 159,282 At December 31 $ 2021 256 31,113 31,369 5,640 35 25,694 139,067 Total adjusted debt plus total Chevron Corporation Stockholders’ Equity $ 173,570 $ 164,720 $ 164,761 Net Debt Ratio 7.3 % 3.3 % 15.6 % Capital Employed The sum of Chevron Corporation Stockholders’ Equity, total debt and noncontrolling interests, which represents the net investment in the business. Millions of dollars Chevron Corporation Stockholders’ Equity Plus: Short-term debt Plus: Long-term debt Plus: Noncontrolling interest Capital Employed at December 31 2023 2022 2021 At December 31 $ 160,957 $ 159,282 $ 139,067 529 20,307 972 1,964 21,375 960 256 31,113 873 $ 182,765 $ 183,581 $ 171,309 Return on Average Capital Employed (ROCE) Net income attributable to Chevron (adjusted for after-tax interest expense and noncontrolling interest) divided by average capital employed. Average capital employed is computed by averaging the sum of capital employed at the beginning and end of the year. ROCE is a ratio intended to measure annual earnings as a percentage of historical investments in the business. Millions of dollars Net income attributable to Chevron Plus: After-tax interest and debt expense Plus: Noncontrolling interest Net income after adjustments Average capital employed Return on Average Capital Employed Year ended December 31 2023 2022 2021 $ 21,369 $ 35,465 $ 15,625 432 42 476 143 662 64 21,843 36,084 16,351 $ 183,173 $ 177,445 $ 174,175 11.9 % 20.3 % 9.4 % Return on Stockholders’ Equity (ROSE) Net income attributable to Chevron divided by average Chevron Corporation Stockholders’ Equity. Average stockholders’ equity is computed by averaging the sum of stockholders’ equity at the beginning and end of the year. ROSE is a ratio intended to measure earnings as a percentage of shareholder investments. Millions of dollars Net income attributable to Chevron Chevron Corporation Stockholders’ Equity at December 31 Average Chevron Corporation Stockholders’ Equity Year ended December 31 2023 2022 2021 $ 21,369 $ 35,465 $ 15,625 160,957 160,120 159,282 149,175 139,067 135,378 Return on Average Stockholders’ Equity 13.3 % 23.8 % 11.5 % Financial and Derivative Instrument Market Risk The market risk associated with the company’s portfolio of financial and derivative instruments is discussed below. The estimates of financial exposure to market risk do not represent the company’s projection of future market changes. The actual impact of future market changes could differ materially due to factors discussed elsewhere in this report, including those set forth under the heading Item 1A. Risk Factors of the company's Annual Report on Form 10-K. 51 Chevron Corporation 2023 Annual Report 51 Management’s Discussion and Analysis of Financial Condition and Results of Operations Derivative Commodity Instruments Chevron is exposed to market risks related to the price volatility of crude oil, refined products, NGLs, natural gas, liquefied natural gas and refinery feedstocks. The company uses derivative commodity instruments to manage these exposures on a portion of its activity, including firm commitments and anticipated transactions for the purchase, sale and storage of crude oil, refined products, NGLs, natural gas, liquefied natural gas and feedstock for company refineries. The company also uses derivative commodity instruments for limited trading purposes. The results of these activities were not material to the company’s financial position, results of operations or cash flows in 2023. The company’s market exposure positions are monitored on a daily basis by an internal Risk Control group in accordance with the company’s risk management policies. The company’s risk management practices and its compliance with policies are reviewed by the Audit Committee of the company’s Board of Directors. Derivatives beyond those designated as normal purchase and normal sale contracts are recorded at fair value on the Consolidated Balance Sheet with resulting gains and losses reflected in income. Fair values are derived principally from published market quotes and other independent third-party quotes. The change in fair value of Chevron’s derivative commodity instruments in 2023 was not material to the company’s results of operations. The company uses the Monte Carlo simulation method as its Value-at-Risk (VaR) model to estimate the maximum potential loss in fair value, at the 95 percent confidence level with a one-day holding period, from the effect of adverse changes in market conditions on derivative commodity instruments held or issued. Based on these inputs, the VaR for the company’s primary risk exposures in the area of derivative commodity instruments at December 31, 2023 and 2022 was not material to the company’s cash flows or results of operations. Foreign Currency The company may enter into foreign currency derivative contracts to manage some of its foreign currency exposures. These exposures include revenue and anticipated purchase transactions, including foreign currency capital expenditures and lease commitments. The foreign currency derivative contracts, if any, are recorded at fair value on the balance sheet with resulting gains and losses reflected in income. There were no open foreign currency derivative contracts at December 31, 2023. Interest Rates The company may enter into interest rate swaps from time to time as part of its overall strategy to manage the interest rate risk on its debt. Interest rate swaps, if any, are recorded at fair value on the balance sheet with resulting gains and losses reflected in income. At year-end 2023, the company had no interest rate swaps. Transactions With Related Parties Chevron enters into a number of business arrangements with related parties, principally its equity affiliates. These arrangements include long-term supply or offtake agreements and long-term purchase agreements. Refer to “Other Information” in Note 15 Investments and Advances for further discussion. Management believes these agreements have been negotiated on terms consistent with those that would have been negotiated with an unrelated party. Litigation and Other Contingencies Ecuador Information related to Ecuador matters is included in Note 16 Litigation under the heading “Ecuador.” Climate Change Information related to climate change-related matters is included in Note 16 Litigation under the heading “Climate Change.” Louisiana Information related to Louisiana coastal matters is included in Note 16 Litigation under the heading “Louisiana.” Environmental The following table displays the annual changes to the company’s before-tax environmental remediation reserves, including those for U.S. federal Superfund sites and analogous sites under state laws. Millions of dollars Balance at January 1 Net additions Expenditures Balance at December 31 2023 868 327 (259) $ 2022 960 182 (274) $ 936 $ 868 $ $ $ 2021 1,139 114 (293) 960 The company records asset retirement obligations when there is a legal obligation associated with the retirement of long- lived assets and the liability can be reasonably estimated. These asset retirement obligations include costs related to 52 Chevron Corporation 2023 Annual Report 52 Management’s Discussion and Analysis of Financial Condition and Results of Operations environmental issues. The liability balance of approximately $13.8 billion for asset retirement obligations at year-end 2023 is related primarily to upstream properties. For the company’s other ongoing operating assets, such as refineries and chemicals facilities, no provisions are made for exit or cleanup costs that may be required when such assets reach the end of their useful lives unless a decision to sell or otherwise decommission the facility has been made, as the indeterminate settlement dates for the asset retirements prevent estimation of the fair value of the asset retirement obligation. Refer to the discussion below for additional information on environmental matters and their impact on Chevron, and on the company’s 2023 environmental expenditures. Refer to Note 24 Other Contingencies and Commitments for additional discussion of environmental remediation provisions and year-end reserves, and for abandonment and decommissioning obligations for previously sold assets. Refer also to Note 25 Asset Retirement Obligations for additional discussion of the company’s asset retirement obligations. Suspended Wells Information related to suspended wells is included in Note 21 Accounting for Suspended Exploratory Wells. Income Taxes Information related to income tax contingencies is included in Note 17 Taxes and in Note 24 Other Contingencies and Commitments under the heading “Income Taxes.” Other Contingencies Information related to other contingencies is included in Note 24 Other Contingencies and Commitments under the heading “Other Contingencies.” Environmental Matters The company is subject to various international and U.S. federal, state and local environmental, health and safety laws, regulations and market-based programs. These laws, regulations and programs continue to evolve and are expected to increase in both number and complexity over time and govern not only the manner in which the company conducts its operations, but also the products it sells. Consideration of environmental issues and the responses to those issues through international agreements and national, regional or state legislation or regulations are integrated into the company’s strategy and planning, capital investment reviews and risk management tools and processes, where applicable. They are also factored into the company’s long-range supply, demand and energy price forecasts. These forecasts reflect long-range effects from renewable fuel penetration, energy efficiency standards, climate-related policy actions, and demand response to oil and natural gas prices. In addition, legislation and regulations intended to address hydraulic fracturing also continue to evolve in many jurisdictions where we operate. Refer to Item 1A. Risk Factors of the company's Annual Report on Form 10-K for a discussion of some of the inherent risks of increasingly restrictive environmental and other regulation that could materially impact the company’s results of operations or financial condition. Refer to Business Environment and Outlook on pages 34 through 36 for a discussion of legislative and regulatory efforts to address climate change. Most of the costs of complying with existing laws and regulations pertaining to company operations and products are embedded in the normal costs of doing business. However, it is not possible to predict with certainty the amount of additional investments in new or existing technology or facilities or the amounts of increased operating costs to be incurred in the future to prevent, control, reduce or eliminate releases of hazardous materials or other pollutants into the environment; remediate and restore areas damaged by prior releases of hazardous materials; or comply with new environmental laws or regulations. Although these costs may be significant to the results of operations in any single period, the company does not presently expect them to have a material adverse effect on the company’s liquidity or financial position. Accidental leaks and spills requiring cleanup may occur in the ordinary course of business. The company may incur expenses for corrective actions at various owned and previously owned facilities and at third-party-owned waste disposal sites used by the company. An obligation may arise when operations are closed or sold or at non-Chevron sites where company products have been handled or disposed of. Most of the expenditures to fulfill these obligations relate to facilities and sites where past operations followed practices and procedures that were considered acceptable at the time but now require investigative or remedial work or both to meet current standards. Using definitions and guidelines established by the American Petroleum Institute, Chevron estimated its worldwide environmental spending in 2023 at approximately $2.5 billion for its consolidated companies. Included in these expenditures were approximately $0.5 billion of environmental capital expenditures and $2.0 billion of costs associated 53 Chevron Corporation 2023 Annual Report 53 Management’s Discussion and Analysis of Financial Condition and Results of Operations with the prevention, control, abatement or elimination of hazardous substances and pollutants from operating, closed or divested sites, and the decommissioning and restoration of sites. For 2024, total worldwide environmental capital expenditures are estimated at $0.5 billion. These capital costs are in addition to the ongoing costs of complying with environmental regulations and the costs to remediate previously contaminated sites. Critical Accounting Estimates and Assumptions Management makes many estimates and assumptions in the application of accounting principles generally accepted in the United States of America (GAAP) that may have a material impact on the company’s consolidated financial statements and related disclosures and on the comparability of such information over different reporting periods. Such estimates and assumptions affect reported amounts of assets, liabilities, revenues and expenses, as well as disclosures of contingent assets and liabilities. Estimates and assumptions are based on management’s experience and other information available prior to the issuance of the financial statements. Materially different results can occur as circumstances change and additional information becomes known. The discussion in this section of “critical” accounting estimates and assumptions is according to the disclosure guidelines of the SEC, wherein: 1. 2. the nature of the estimates and assumptions is material due to the levels of subjectivity and judgment necessary to account for highly uncertain matters, or the susceptibility of such matters to change; and the impact of the estimates and assumptions on the company’s financial condition or operating performance is material. The development and selection of accounting estimates and assumptions, including those deemed “critical,” and the associated disclosures in this discussion have been discussed with the Audit Committee of the Board of Directors. The areas of accounting and the associated “critical” estimates and assumptions made by the company are as follows: Oil and Gas Reserves Crude oil, NGLs and natural gas reserves are estimates of future production that impact certain asset and expense accounts included in the Consolidated Financial Statements. Proved reserves are the estimated quantities of oil and gas that geoscience and engineering data demonstrate with reasonable certainty to be economically producible in the future under existing economic conditions, operating methods and government regulations. Proved reserves include both developed and undeveloped volumes. Proved developed reserves represent volumes expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves are volumes expected to be recovered from new wells on undrilled proved acreage, or from existing wells where a relatively major expenditure is required for recompletion. Variables impacting Chevron’s estimated volumes of crude oil and natural gas reserves include field performance, available technology, commodity prices, and development, production and carbon costs. The estimates of crude oil, NGLs and natural gas reserves are important to the timing of expense recognition for costs incurred and to the valuation of certain oil and gas producing assets. Impacts of oil and gas reserves on Chevron’s Consolidated Financial Statements, using the successful efforts method of accounting, include the following: 1. Depreciation, Depletion and Amortization (DD&A) - Capitalized exploratory drilling and development costs are depreciated on a unit-of-production (UOP) basis using proved developed reserves. Acquisition costs of proved properties are amortized on a UOP basis using total proved reserves. During 2023, Chevron’s UOP DD&A for oil and gas properties was $10.8 billion, and proved developed reserves at the beginning of 2023 were 6.5 billion barrels for consolidated companies. If the estimates of proved reserves used in the UOP calculations for consolidated operations had been lower by five percent across all oil and gas properties, UOP DD&A in 2023 would have increased by approximately $600 million. 2. Impairment - Oil and gas reserves are used in assessing oil and gas producing properties for impairment. A significant reduction in the estimated reserves of a property would trigger an impairment review. Proved reserves (and, in some cases, a portion of unproved resources) are used to estimate future production volumes in the cash flow model. For a further discussion of estimates and assumptions used in impairment assessments, see Impairment of Properties, Plant and Equipment and Investments in Affiliates below. Refer to Table V, “Proved Reserve Quantity Information,” for the changes in proved reserve estimates for each of the three years ended December 31, 2021, 2022 and 2023, and to Table VII, “Changes in the Standardized Measure of Discounted Future Net Cash Flows From Proved Reserves” for estimates of proved reserve values for each of the three years ended December 31, 2021, 2022 and 2023. 54 Chevron Corporation 2023 Annual Report 54 Management’s Discussion and Analysis of Financial Condition and Results of Operations This Oil and Gas Reserves commentary should be read in conjunction with the Properties, Plant and Equipment section of Note 1 Summary of Significant Accounting Policies, which includes a description of the “successful efforts” method of accounting for oil and gas exploration and production activities. Impairment of Properties, Plant and Equipment and Investments in Affiliates The company assesses its properties, plant and equipment (PP&E) for possible impairment whenever events or changes in circumstances indicate that the carrying value of the assets may not be recoverable. If the carrying value of an asset exceeds the future undiscounted cash flows expected from the asset, an impairment charge is recorded for the excess of the carrying value of the asset over its estimated fair value. Determination as to whether and how much an asset is impaired involves management estimates on highly uncertain matters, such as future commodity prices, operating expenses, carbon costs, production profiles, the pace of the energy transition, and the outlook for global or regional market supply-and-demand conditions for crude oil, NGLs, natural gas, commodity chemicals and refined products. However, the impairment reviews and calculations are based on assumptions that are generally consistent with the company’s business plans and long-term investment decisions. Refer also to the discussion of impairments of properties, plant and equipment in Note 18 Properties, Plant and Equipment and to the section on Properties, Plant and Equipment in Note 1 Summary of Significant Accounting Policies. The company performs impairment assessments when triggering events arise to determine whether any write-down in the carrying value of an asset or asset group is required. For example, when significant downward revisions to crude oil, NGLs and natural gas reserves are made for any single field or concession, an impairment review is performed to determine if the carrying value of the asset remains recoverable. Similarly, a significant downward revision in the company’s crude oil, NGLs or natural gas price outlook would trigger impairment reviews for impacted upstream assets. In addition, impairments could occur due to changes in national, state or local environmental regulations or laws, including those designed to stop or impede the development or production of oil and gas. Also, if the expectation of sale of a particular asset or asset group in any period has been deemed more likely than not, an impairment review is performed, and if the estimated net proceeds exceed the carrying value of the asset or asset group, no impairment charge is required. Such calculations are reviewed each period until the asset or asset group is disposed. Assets that are not impaired on a held-and-used basis could possibly become impaired if a decision is made to sell such assets. That is, the assets would be impaired if they are classified as held-for-sale and the estimated proceeds from the sale, less costs to sell, are less than the assets’ associated carrying values. Investments in common stock of affiliates that are accounted for under the equity method, as well as investments in other securities of these equity investees, are reviewed for impairment when the fair value of the investment falls below the company’s carrying value. When this occurs, a determination must be made as to whether this loss is other-than-temporary, in which case the investment is impaired. Because of the number of differing assumptions potentially affecting whether an investment is impaired in any period or the amount of the impairment, a sensitivity analysis is not practicable. A sensitivity analysis of the impact on earnings for these periods if other assumptions had been used in impairment reviews and impairment calculations is not practicable, given the broad range of the company’s PP&E and the number of assumptions involved in the estimates. That is, favorable changes to some assumptions might have avoided the need to impair any assets in these periods, whereas unfavorable changes might have caused an additional unknown number of other assets to become impaired, or resulted in larger impacts on impaired assets. Asset Retirement Obligations In the determination of fair value for an asset retirement obligation (ARO), the company uses various assumptions and judgments, including such factors as the existence of a legal obligation, estimated amounts and timing of settlements, discount and inflation rates, and the expected impact of advances in technology and process improvements. A sensitivity analysis of the ARO impact on earnings for 2023 is not practicable, given the broad range of the company’s long-lived assets and the number of assumptions involved in the estimates. That is, favorable changes to some assumptions would have reduced estimated future obligations, thereby lowering accretion expense and amortization costs, whereas unfavorable changes would have the opposite effect. Refer to Note 25 Asset Retirement Obligations for additional discussions on asset retirement obligations. Pension and Other Postretirement Benefit Plans Note 23 Employee Benefit Plans includes information on the funded status of the company’s pension and other postretirement benefit (OPEB) plans reflected on the Consolidated Balance Sheet; the components of pension and OPEB expense reflected on the Consolidated Statement of Income; and the related underlying assumptions. 55 Chevron Corporation 2023 Annual Report 55 Management’s Discussion and Analysis of Financial Condition and Results of Operations The determination of pension plan expense and obligations is based on a number of actuarial assumptions. Two critical assumptions are the expected long-term rate of return on plan assets and the discount rate applied to pension plan obligations. Critical assumptions in determining expense and obligations for OPEB plans, which provide for certain health care and life insurance benefits for qualifying retired employees and which are not funded, are the discount rate and the assumed health care cost-trend rates. Information related to the company’s processes to develop these assumptions is included in Note 23 Employee Benefit Plans under the relevant headings. Actual rates may vary significantly from estimates because of unanticipated changes beyond the company’s control. For 2023, the company used an expected long-term rate of return of 7.0 percent and a discount rate for service costs of 5.2 percent and a discount rate for interest cost of 5.0 percent for the primary U.S. pension plan. The actual return for 2023 was 10.9 percent. For the 10 years ended December 31, 2023, actual asset returns averaged 5.3 percent for this plan. Additionally, with the exception of three years within this 10-year period, actual asset returns for this plan equaled or exceeded 7.0 percent during each year. Total pension expense for 2023 was $557 million. An increase in the expected long-term return on plan assets or the discount rate would reduce pension plan expense, and vice versa. As an indication of the sensitivity of pension expense to the long- term rate of return assumption, a one percent increase in this assumption for the company’s primary U.S. pension plan, which accounted for about 55 percent of companywide pension expense, would have reduced total pension plan expense for 2023 by approximately $78 million. A one percent increase in the discount rates for this same plan would have reduced pension expense for 2023 by approximately $105 million. The aggregate funded status recognized at December 31, 2023, was a net liability of approximately $1.5 billion. An increase in the discount rate would decrease the pension obligation, thus changing the funded status of a plan. At December 31, 2023, the company used a discount rate of 5.0 percent to measure the obligations for the primary U.S. pension plan. As an indication of the sensitivity of pension liabilities to the discount rate assumption, a 0.25 percent increase in the discount rate applied to the company’s primary U.S. pension plan, which accounted for about 65 percent of the companywide pension obligation, would have reduced the plan obligation by approximately $279 million, and would have changed the plan’s funded status from a deficit of $80 million to a surplus of $199 million. For the company’s OPEB plans, expense for 2023 was $86 million, and the total liability, all unfunded at the end of 2023, was $2.0 billion. For the primary U.S. OPEB plan, the company used a discount rate for service cost of 5.3 percent and a discount rate for interest cost of 5.1 percent to measure expense in 2023, and a 5.0 percent discount rate to measure the benefit obligations at December 31, 2023. Discount rate changes, similar to those used in the pension sensitivity analysis, resulted in an immaterial impact on 2023 OPEB expense and OPEB liabilities at the end of 2023. Differences between the various assumptions used to determine expense and the funded status of each plan and actual experience are included in actuarial gain/loss. Refer to page 93 in Note 23 Employee Benefit Plans for more information on the $3.7 billion of before-tax actuarial losses recorded by the company as of December 31, 2023. In addition, information related to company contributions is included on page 96 in Note 23 Employee Benefit Plans under the heading “Cash Contributions and Benefit Payments.” Business Combinations — Purchase-Price Allocation Accounting for business combinations requires the allocation of the company’s purchase price to the various assets and liabilities of the acquired business at their respective fair values. The company uses all available information to make these fair value determinations. Determining the fair value of assets acquired generally involves assumptions regarding the amounts and timing of future revenues and expenditures, as well as discount rates. For additional discussion of purchase price allocations, refer to Note 29 Acquisition of PDC Energy, Inc. Contingent Losses Management also makes judgments and estimates in recording liabilities for claims, litigation, tax matters, transferred liabilities from previously sold assets, and environmental remediation. Actual costs can frequently vary from estimates for a variety of reasons. For example, the costs for settlement of claims and litigation can vary from estimates based on differing interpretations of laws, opinions on culpability and assessments on the amount of damages. Similarly, liabilities for environmental remediation are subject to change because of changes in laws, regulations and their interpretation, the determination of additional information on the extent and nature of site contamination, and improvements in technology. Under the accounting rules, a liability is generally recorded for these types of contingencies if management determines the loss to be both probable and estimable. The company generally reports these losses as “Operating expenses,” “Selling, general and administrative expenses” or “Other income (loss)” on the Consolidated Statement of Income. An exception to this handling is for income tax matters, for which benefits are recognized only if management determines the tax position is 56 Chevron Corporation 2023 Annual Report 56 Management’s Discussion and Analysis of Financial Condition and Results of Operations more likely than not (i.e., likelihood greater than 50 percent) to be allowed by the tax jurisdiction. For additional discussion of income tax uncertainties, refer to Note 24 Other Contingencies and Commitments under the heading “Income Taxes.” Refer also to the business segment discussions elsewhere in this section for the effect on earnings from losses associated with certain litigation, environmental remediation and tax matters for the three years ended December 31, 2023. An estimate as to the sensitivity to earnings for these periods if other assumptions had been used in recording these liabilities is not practicable because of the number of contingencies that must be assessed, the number of underlying assumptions and the wide range of reasonably possible outcomes, both in terms of the probability of loss and the estimates of such loss. For further information, refer to “Changes in management’s estimates and assumptions may have a material impact on the company’s consolidated financial statements and financial or operational performance in any given period” in Item 1A. Risk Factors, on page 26 of the company's Annual Report on Form 10-K. New Accounting Standards Refer to Note 4 New Accounting Standards for information regarding new accounting standards. 57 Chevron Corporation 2023 Annual Report 57 Quarterly Results Unaudited Millions of dollars, except per-share amounts 4th Q 3rd Q 2nd Q 2023 1st Q 4th Q 3rd Q 2nd Q 2022 1st Q Revenues and Other Income Sales and other operating revenues Income from equity affiliates Other income (loss) Total Revenues and Other Income Costs and Other Deductions Purchased crude oil and products Operating expenses Selling, general and administrative expenses Exploration expenses Depreciation, depletion and amortization Taxes other than on income Interest and debt expense Other components of net periodic benefit costs $48,933 $51,922 $47,216 $48,842 $54,523 $63,508 $65,372 $52,314 990 (2,743) 1,313 845 1,240 440 1,588 363 1,623 327 2,410 726 2,467 923 2,085 (26) 47,180 54,080 48,896 50,793 56,473 66,644 68,762 54,373 28,477 32,328 28,984 29,407 32,570 38,751 40,684 33,411 6,510 969 254 6,254 1,062 120 44 6,299 1,163 301 4,025 1,021 114 91 6,057 1,128 169 3,521 1,041 120 39 6,021 881 190 3,526 1,096 115 38 6,401 1,454 453 4,764 864 123 36 6,357 1,028 116 4,201 1,046 128 208 6,318 5,638 863 196 3,700 882 129 (13) 967 209 3,654 1,240 136 64 Total Costs and Other Deductions 43,690 45,342 41,059 41,274 46,665 51,835 52,759 45,319 Income (Loss) Before Income Tax Expense Income Tax Expense (Benefit) 3,490 1,247 8,738 2,183 7,837 1,829 9,519 2,914 9,808 3,430 14,809 3,571 16,003 4,288 9,054 2,777 Net Income (Loss) $ 2,243 $ 6,555 $ 6,008 $ 6,605 $ 6,378 $11,238 $11,715 $ 6,277 Less: Net income (loss) attributable to noncontrolling interests (16) 29 (2) 31 25 7 93 18 Net Income (Loss) Attributable to Chevron Corporation $ 2,259 $ 6,526 $ 6,010 $ 6,574 $ 6,353 $11,231 $11,622 $ 6,259 Per Share of Common Stock Net Income (Loss) Attributable to Chevron Corporation – Basic – Diluted Dividends per share $ $ $ 1.23 1.22 1.51 $ $ $ 3.48 3.48 1.51 $ $ $ 3.22 3.20 1.51 $ $ $ 3.48 3.46 1.51 $ $ $ 3.34 3.33 1.42 $ $ $ 5.81 5.78 1.42 $ $ $ 5.98 5.95 1.42 $ $ $ 3.23 3.22 1.42 58 Chevron Corporation 2023 Annual Report 58 Management’s Responsibility for Financial Statements To the Stockholders of Chevron Corporation Management of Chevron Corporation is responsible for preparing the accompanying consolidated financial statements and the related information appearing in this report. The statements were prepared in accordance with accounting principles generally accepted in the United States of America and fairly represent the transactions and financial position of the company. The financial statements include amounts that are based on management’s best estimates and judgments. As stated in its report included herein, the independent registered public accounting firm of PricewaterhouseCoopers LLP has audited the company’s consolidated financial statements in accordance with the standards of the Public Company Accounting Oversight Board (United States). The Board of Directors of Chevron has an Audit Committee composed of directors who are not officers or employees of the company. The Audit Committee meets regularly with members of management, the internal auditors and the independent registered public accounting firm to review accounting, internal control, auditing and financial reporting matters. Both the internal auditors and the independent registered public accounting firm have free and direct access to the Audit Committee without the presence of management. The company’s management has evaluated, with the participation of the Chief Executive Officer and Chief Financial Officer, the effectiveness of the company’s disclosure controls and procedures (as defined in the Exchange Act Rules 13a-15(e) and 15d-15(e)) as of December 31, 2023. Based on that evaluation, management concluded that the company’s disclosure controls are effective in ensuring that information required to be recorded, processed, summarized and reported are done within the time periods specified in the U.S. Securities and Exchange Commission’s rules and forms. Management’s Report on Internal Control Over Financial Reporting The company’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f). The company’s management, including the Chief Executive Officer and Chief Financial Officer, conducted an evaluation of the effectiveness of the company’s internal control over financial reporting based on the Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the results of this evaluation, the company’s management concluded that internal control over financial reporting was effective as of December 31, 2023. The company excluded PDC Energy, Inc. (PDC) from our assessment of internal control over financial reporting as of December 31, 2023 because it was acquired by the company in a business combination during 2023. Total assets and total revenue of PDC, a wholly-owned subsidiary, represent five percent and one percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023. The effectiveness of the company’s internal control over financial reporting as of December 31, 2023, has been audited by PricewaterhouseCoopers LLP, an independent registered public accounting firm, as stated in its report included herein. Michael K. Wirth Chairman of the Board and Chief Executive Officer February 26, 2024 Pierre R. Breber Vice President and Chief Financial Officer Alana K. Knowles Vice President and Controller 59 Chevron Corporation 2023 Annual Report 59 Report of Independent Registered Public Accounting Firm To the Board of Directors and Stockholders of Chevron Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheet of Chevron Corporation and its subsidiaries (the “Company”) as of December 31, 2023 and 2022, and the related consolidated statements of income, of comprehensive income, of equity and of cash flows for each of the three years in the period ended December 31, 2023, including the related notes and financial statement schedule listed in the index appearing under Item 15(a)(2) (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Company’s management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company’s internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. As described in Management’s Report on Internal Control over Financial Reporting, management has excluded PDC Energy, Inc. (PDC) from its assessment of internal control over financial reporting as of December 31, 2023 because it was acquired by the Company in a business combination during 2023. We have also excluded PDC from our audit of internal control over financial reporting. PDC is a wholly-owned subsidiary whose total assets and total revenues excluded from management’s assessment and our audit of internal control over financial reporting represent five percent and one percent, respectively, of the related consolidated financial statement amounts as of and for the year ended December 31, 2023. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the 60 Chevron Corporation 2023 Annual Report 60 transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. The Impact of Proved Developed Crude Oil and Natural Gas Reserves on Upstream Property, Plant, and Equipment, Net As described in Notes 1 and 18 to the consolidated financial statements, the Company’s upstream property, plant and equipment, net balance was $135.0 billion as of December 31, 2023, and depreciation, depletion and amortization expense was $15.8 billion for the year ended December 31, 2023. The Company follows the successful efforts method of accounting for crude oil and natural gas exploration and production activities. Depreciation and depletion of all capitalized costs of proved crude oil and natural gas producing properties, except mineral interests, are expensed using the unit-of-production method, generally by individual field, as the proved developed reserves are produced. Depletion expenses for capitalized costs of proved mineral interests are recognized using the unit-of-production method by individual field as the related proved reserves are produced. As disclosed by management, variables impacting the Company’s estimated volumes of proved crude oil and natural gas reserves include field performance, available technology, commodity prices, and development, production and carbon costs. Reserves are estimated by Company asset teams composed of earth scientists and engineers. As part of the internal control process related to reserves estimation, the Company maintains a Reserves Advisory Committee (RAC) (the Company’s earth scientists, engineers and RAC are collectively referred to as “management’s specialists”). The principal considerations for our determination that performing procedures relating to the impact of proved developed crude oil and natural gas reserves on upstream property, plant, and equipment, net is a critical audit matter are (i) the significant judgment by management, including the use of management’s specialists, when developing the estimates of proved developed crude oil and natural gas reserves, which in turn led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence obtained related to the data, methods and assumptions used by management and its specialists in developing the estimates of proved developed crude oil and natural gas reserves. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s estimates of proved developed crude oil and natural gas reserves. The work of management’s specialists was used in performing the procedures to evaluate the reasonableness of the proved developed crude oil and natural gas reserves. As a basis for using this work, the specialists’ qualifications were understood and the Company’s relationship with the specialists was assessed. The procedures performed also included evaluation of the methods and assumptions used by the specialists, tests of data used by the specialists and an evaluation of the specialists’ findings related to estimated future production volumes by comparing the estimate to relevant historical and current period information, as applicable. San Francisco, California February 26, 2024 We have served as the Company’s auditor since 1935. 61 Chevron Corporation 2023 Annual Report 61 Consolidated Statement of Income Millions of dollars, except per-share amounts Revenues and Other Income Sales and other operating revenues Income (loss) from equity affiliates Other income (loss) Total Revenues and Other Income Costs and Other Deductions Purchased crude oil and products Operating expenses Selling, general and administrative expenses Exploration expenses Depreciation, depletion and amortization Taxes other than on income Interest and debt expense Other components of net periodic benefit costs Total Costs and Other Deductions Income (Loss) Before Income Tax Expense Income Tax Expense (Benefit) Net Income (Loss) Less: Net income (loss) attributable to noncontrolling interests Year ended December 31 2023 2022 2021 $ 196,913 5,131 (1,095) 200,949 $ 235,717 8,585 1,950 246,252 $ 155,606 5,657 1,202 162,465 119,196 24,887 4,141 914 17,326 4,220 469 212 171,365 29,584 8,173 21,411 42 145,416 24,714 4,312 974 16,319 4,032 516 295 196,578 49,674 14,066 35,608 143 92,249 20,726 4,014 549 17,925 3,963 712 688 140,826 21,639 5,950 15,689 64 Net Income (Loss) Attributable to Chevron Corporation $ 21,369 $ 35,465 $ 15,625 Per Share of Common Stock Net Income (Loss) Attributable to Chevron Corporation - Basic - Diluted See accompanying Notes to the Consolidated Financial Statements. $ $ 11.41 11.36 $ $ 18.36 18.28 $ $ 8.15 8.14 62 Chevron Corporation 2023 Annual Report 62 Consolidated Statement of Comprehensive Income Millions of dollars Net Income (Loss) Currency translation adjustment Unrealized net change arising during period Unrealized holding gain (loss) on securities Net gain (loss) arising during period Derivatives Net derivatives gain (loss) on hedge transactions Reclassification to net income Income tax benefit (cost) on derivatives transactions Total Defined benefit plans Actuarial gain (loss) Amortization to net income of net actuarial loss and settlements Actuarial gain (loss) arising during period Prior service credits (cost) Amortization to net income of net prior service costs and curtailments Prior service (costs) credits arising during period Defined benefit plans sponsored by equity affiliates - benefit (cost) Income tax benefit (cost) on defined benefit plans Total Other Comprehensive Gain (Loss), Net of Tax Comprehensive Income (Loss) Year ended December 31 2023 2022 2021 $ 21,411 $ 35,608 $ 15,689 11 1 (11) 33 (5) 17 244 (550) (13) (29) 6 151 (191) (162) (41) (1) 65 (80) 3 (12) 599 1,050 (19) (96) 100 (489) 1,145 1,091 21,249 36,699 (55) (1) (6) 6 — — 1,069 1,244 (14) — 127 (647) 1,779 1,723 17,412 Comprehensive loss (income) attributable to noncontrolling interests (42) (143) (64) Comprehensive Income (Loss) Attributable to Chevron Corporation $ 21,207 $ 36,556 $ 17,348 See accompanying Notes to the Consolidated Financial Statements. 63 Chevron Corporation 2023 Annual Report 63 Consolidated Balance Sheet Millions of dollars, except per-share amounts Assets Cash and cash equivalents Marketable securities Accounts and notes receivable (less allowance: 2023 - $301; 2022 - $457) Inventories: Crude oil and products Chemicals Materials, supplies and other Total inventories Prepaid expenses and other current assets Total Current Assets Long-term receivables, net (less allowances: 2023 - $340; 2022 - $552) Investments and advances Properties, plant and equipment, at cost Less: Accumulated depreciation, depletion and amortization Properties, plant and equipment, net Deferred charges and other assets Goodwill Assets held for sale Total Assets Liabilities and Equity Short-term debt Accounts payable Accrued liabilities Federal and other taxes on income Other taxes payable Total Current Liabilities Long-term debt1 Deferred credits and other noncurrent obligations Noncurrent deferred income taxes Noncurrent employee benefit plans Total Liabilities2 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 December 31, 2023 and 2022) Capital in excess of par value Retained earnings Accumulated other comprehensive losses Deferred compensation and benefit plan trust Treasury stock, at cost (2023 - 577,028,776 shares; 2022 - 527,460,237 shares) Total Chevron Corporation Stockholders’ Equity Noncontrolling interests (includes redeemable noncontrolling interest of $166 and $142 at December 31, 2023 and 2022) Total Equity Total Liabilities and Equity 1 Includes finance lease liabilities of $574 and $403 at December 31, 2023 and 2022, respectively. 2 Refer to Note 24 Other Contingencies and Commitments. See accompanying Notes to the Consolidated Financial Statements. 64 Chevron Corporation 2023 Annual Report 64 At December 31 2023 2022 $ 8,178 45 19,921 $ 17,678 223 20,456 6,059 406 2,147 8,612 4,372 41,128 942 46,812 346,081 192,462 153,619 13,734 4,722 675 261,632 529 20,423 7,655 1,863 1,788 32,258 20,307 24,226 18,830 4,082 $ $ 5,866 515 1,866 8,247 3,739 50,343 1,069 45,238 327,785 184,194 143,591 12,310 4,722 436 257,709 1,964 18,955 7,486 4,381 1,422 34,208 21,375 20,396 17,131 4,357 $ $ $ 99,703 $ 97,467 — — 1,832 21,365 200,025 (2,960) (240) (59,065) 160,957 1,832 18,660 190,024 (2,798) (240) (48,196) 159,282 972 960 161,929 160,242 $ 261,632 $ 257,709 Consolidated Statement of Cash Flows Millions of dollars Operating Activities Net Income (Loss) Adjustments Depreciation, depletion and amortization Dry hole expense Distributions more (less) than income from equity affiliates Net before-tax gains on asset retirements and sales Net foreign currency effects Deferred income tax provision Net decrease (increase) in operating working capital Decrease (increase) in long-term receivables Net decrease (increase) in other deferred charges Cash contributions to employee pension plans Other Net Cash Provided by Operating Activities Investing Activities Acquisition of businesses, net of cash received Capital expenditures Proceeds and deposits related to asset sales and returns of investment Net sales (purchases) of marketable securities Net repayment (borrowing) of loans by equity affiliates Net Cash Used for Investing Activities Financing Activities Net borrowings (repayments) of short-term obligations Proceeds from issuances of long-term debt Repayments of long-term debt and other financing obligations Cash dividends - common stock Net contributions from (distributions to) noncontrolling interests Net sales (purchases) of treasury shares Net Cash Provided by (Used for) Financing Activities Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash Net Change in Cash, Cash Equivalents and Restricted Cash Cash, Cash Equivalents and Restricted Cash at January 1 Year ended December 31 2023 2022 2021 $ 21,411 $ 35,608 $ 15,689 17,326 436 (885) (138) 578 298 (3,185) 150 (300) (1,120) 1,038 35,609 55 (15,829) 669 175 (302) (15,232) 135 150 (4,340) (11,336) (40) (14,678) (30,109) (114) (9,846) 19,121 16,319 486 (4,730) (550) (412) 2,124 2,125 153 (212) (1,322) 13 49,602 (2,862) (11,974) 2,635 117 (24) (12,108) 263 — (8,742) (10,968) (114) (5,417) (24,978) (190) 12,326 6,795 17,925 118 (1,998) (1,021) (7) 700 (1,361) 21 (320) (1,751) 1,192 29,187 — (8,056) 1,791 (1) 401 (5,865) (5,572) — (7,364) (10,179) (36) 38 (23,113) (151) 58 6,737 6,795 Cash, Cash Equivalents and Restricted Cash at December 31 $ 9,275 $ 19,121 $ See accompanying Notes to the Consolidated Financial Statements. 65 Chevron Corporation 2023 Annual Report 65 Consolidated Statement of Equity Amounts in millions of dollars Common Stock1 Retained Earnings Acc. Other Comprehensive Income (Loss) Treasury Stock (at cost) Chevron Corp. Stockholders’ Equity Noncontrolling Interests Total Equity Balance at December 31, 2020 $ 18,421 $ 160,377 $ (5,612) $ (41,498) $ 131,688 $ 1,038 $ 132,726 Treasury stock transactions NBLX acquisition Net income (loss) Cash dividends ($5.31 per share) Stock dividends Other comprehensive income Purchases of treasury shares Issuances of treasury shares Other changes, net 315 138 — — — — — — — — (148) 15,625 (10,179) (3) — — — (126) — — — — — 1,723 — — — — 377 — — — — (1,383) 1,040 — 315 367 15,625 (10,179) (3) 1,723 (1,383) 1,040 (126) — (321) 64 (53) — — — — 145 315 46 15,689 (10,232) (3) 1,723 (1,383) 1,040 19 Balance at December 31, 2021 $ 18,874 $ 165,546 $ (3,889) $ (41,464) $ 139,067 $ 873 $ 139,940 Treasury stock transactions Net income (loss) Cash dividends ($5.68 per share) Stock dividends Other comprehensive income Purchases of treasury shares Issuances of treasury shares Other changes, net 63 — — — — — 1,315 — — 35,465 (10,968) (3) — — — (16) — — — — 1,091 — — — — — — — — (11,255) 4,523 — 63 35,465 (10,968) (3) 1,091 (11,255) 5,838 (16) — 143 (118) — — — — 62 63 35,608 (11,086) (3) 1,091 (11,255) 5,838 46 Balance at December 31, 2022 $ 20,252 $ 190,024 $ (2,798) $ (48,196) $ 159,282 $ 960 $ 160,242 Treasury stock transactions PDC Energy, Inc. acquisition Net income (loss) Cash dividends ($6.04 per share) Stock dividends Other comprehensive income Purchases of treasury shares2 Issuances of treasury shares Other changes, net 174 2,550 — — — — — 17 (36) — — 21,369 (11,336) (9) — — — (23) — — — — — (162) — — — — 3,970 — — — — (15,085) 246 — 174 6,520 21,369 (11,336) (9) (162) (15,085) 263 (59) — — 42 (54) — — — — 24 174 6,520 21,411 (11,390) (9) (162) (15,085) 263 (35) Balance at December 31, 2023 $ 22,957 $ 200,025 $ (2,960) $ (59,065) $ 160,957 $ 972 $ 161,929 Balance at December 31, 2020 Purchases Issuances Issued3 2,442,676,580 — — Balance at December 31, 2021 2,442,676,580 Purchases Issuances — — Balance at December 31, 2022 2,442,676,580 Purchases Issuances — — Balance at December 31, 2023 2,442,676,580 Common Stock Share Activity Treasury (517,490,263) (13,015,737) 17,635,477 (512,870,523) (69,912,961) 55,323,247 (527,460,237) (92,849,905) 43,281,366 (577,028,776) Outstanding 1,925,186,317 (13,015,737) 17,635,477 1,929,806,057 (69,912,961) 55,323,247 1,915,216,343 (92,849,905) 43,281,366 1,865,647,804 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 Includes excise tax on share repurchases. 3 Beginning and ending total issued share balances include 14,168,000 shares associated with Chevron’s Benefit Plan Trust. See accompanying Notes to the Consolidated Financial Statements. 66 Chevron Corporation 2023 Annual Report 66 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Note 1 Summary of Significant Accounting Policies General The company’s Consolidated Financial Statements are prepared in accordance with accounting principles generally accepted in the United States of America. These require the use of estimates and assumptions that affect the assets, liabilities, revenues and expenses reported in the financial statements, as well as amounts included in the notes thereto, including discussion and disclosure of contingent liabilities. Although the company uses its best estimates and judgments, actual results could differ from these estimates as circumstances change and additional information becomes known. Prior years’ data have been reclassified in certain cases to conform to the 2023 presentation basis. Subsidiary and Affiliated Companies The Consolidated Financial Statements include the accounts of controlled subsidiary companies more than 50 percent-owned and any variable interest entities in which the company is the primary beneficiary. Undivided interests in oil and gas joint ventures and certain other assets are consolidated on a proportionate basis. Investments in and advances to affiliates in which the company has a substantial ownership interest of approximately 20 percent to 50 percent, or for which the company exercises significant influence but not control over policy decisions, are accounted for by the equity method. Investments in affiliates are assessed for possible impairment when events indicate that the fair value of the investment may be below the company’s carrying value. When such a condition is deemed to be other than temporary, the carrying value of the investment is written down to its fair value, and the amount of the write-down is included in net income. In making the determination as to whether a decline is other than temporary, the company considers such factors as the duration and extent of the decline, the investee’s financial performance, and the company’s ability and intention to retain its investment for a period that will be sufficient to allow for any anticipated recovery in the investment’s market value. The new cost basis of investments in these equity investees is not changed for subsequent recoveries in fair value. Differences between the company’s carrying value of an equity investment and its underlying equity in the net assets of the affiliate are assigned to the extent practicable to specific assets and liabilities based on the company’s analysis of the various factors giving rise to the difference. When appropriate, the company’s share of the affiliate’s reported earnings is adjusted quarterly to reflect the difference between these allocated values and the affiliate’s historical book values. Noncontrolling Interests Ownership interests in the company’s subsidiaries held by parties other than the parent are presented separately from the parent’s equity on the Consolidated Balance Sheet. The amount of consolidated net income attributable to the parent and the noncontrolling interests are both presented on the face of the Consolidated Statement of Income and Consolidated Statement of Equity. Included within noncontrolling interest is redeemable noncontrolling interest. 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 a liability are as follows. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are inputs other than quoted prices included within Level 1 that are directly or indirectly observable for the asset or liability. Level 3 inputs are inputs that are not observable in the market. Derivatives The majority of the company’s activity in derivative commodity instruments is intended to manage the financial risk posed by physical transactions. For some of this derivative activity, the company may elect to apply fair value or cash flow hedge accounting with changes in fair value recorded as components of accumulated other comprehensive income (loss). For other similar derivative instruments, generally because of the short-term nature of the contracts or their limited use, the company does not apply hedge accounting, and changes in the fair value of those contracts are reflected in current income. For the company’s commodity trading activity, gains and losses from derivative instruments are reported in current income. The company may enter into interest rate swaps from time to time as part of its overall strategy to manage the interest rate risk on its debt. Interest rate swaps related to a portion of the company’s fixed-rate debt, if any, may be accounted for as fair value hedges. Interest rate swaps related to floating-rate debt, if any, are recorded at fair value on the balance sheet with resulting gains and losses reflected in income. Where Chevron is a party to master netting arrangements, fair value receivable and payable amounts recognized for derivative instruments executed with the same counterparty are generally offset on the balance sheet. Inventories Crude oil, products and chemicals inventories are generally stated at cost, using a last-in, first-out method. In the aggregate, these costs are below market. “Materials, supplies and other” inventories are primarily stated at cost or net realizable value. 67 Chevron Corporation 2023 Annual Report 67 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Properties, Plant and Equipment The successful efforts method is used for crude oil and natural gas exploration and production activities. All costs for development wells, related plant and equipment, proved mineral interests in crude oil and natural gas properties, and related asset retirement obligation (ARO) assets are capitalized. Costs of exploratory wells are capitalized pending determination of whether the wells found proved reserves. Costs of wells that are assigned proved reserves remain capitalized. Costs also are capitalized for exploratory wells that have found crude oil and natural gas reserves even if the reserves cannot be classified as proved when the drilling is completed, provided the exploratory well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. All other exploratory wells and costs are expensed. Refer to Note 21 Accounting for Suspended Exploratory Wells for additional discussion of accounting for suspended exploratory well costs. Long-lived assets to be held and used, including proved crude oil and natural gas properties, are assessed for possible impairment by comparing their carrying values with their associated undiscounted, future net cash flows. Events that can trigger assessments for possible impairments include write-downs of proved reserves based on field performance, significant decreases in the market value of an asset (including changes to the commodity price forecast or carbon costs), significant change in the extent or manner of use of or a physical change in an asset, and a more likely than not expectation that a long- lived asset or asset group will be sold or otherwise disposed of significantly sooner than the end of its previously estimated useful life. Impaired assets are written down to their estimated fair values, generally their discounted, future net cash flows. For proved crude oil and natural gas properties, the company performs impairment reviews on a country, concession, PSC, development area or field basis, as appropriate. In downstream, impairment reviews are performed on the basis of a refinery, a plant, a marketing/lubricants area or distribution area, as appropriate. Impairment amounts are recorded as incremental “Depreciation, depletion and amortization” expense. Long-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the asset is considered impaired and adjusted to the lower value. Refer to Note 9 Fair Value Measurements relating to fair value measurements. The fair value of a liability for an ARO is recorded as an asset and a liability when there is a legal obligation associated with the retirement of a long-lived asset and the amount can be reasonably estimated. Refer also to Note 25 Asset Retirement Obligations relating to AROs. Depreciation and depletion of all capitalized costs of proved crude oil and natural gas producing properties, except mineral interests, are expensed using the unit-of-production method, generally by individual field, as the proved developed reserves are produced. Depletion expenses interests are recognized using the for capitalized costs of proved mineral unit-of-production method by individual field as the related proved reserves are produced. Impairments of capitalized costs of unproved mineral interests are expensed. The capitalized costs of all other plant and equipment are depreciated or amortized over their estimated useful lives. In general, the declining-balance method is used to depreciate plant and equipment in the United States; the straight-line method is generally used to depreciate international plant and equipment and to amortize finance lease right-of-use assets. Gains or losses are not recognized for normal retirements of properties, plant and equipment subject to composite group amortization or depreciation. Gains or losses from abnormal retirements are recorded as expenses, and from sales as “Other income.” Expenditures for maintenance (including those for planned major maintenance projects), repairs and minor renewals to maintain facilities in operating condition are generally expensed as incurred. Major replacements and renewals are capitalized. Leases Leases are classified as operating or finance leases. Both operating and finance leases recognize lease liabilities and associated right-of-use assets. The company has elected the short-term lease exception and therefore only recognizes right-of-use assets and lease liabilities for leases with a term greater than one year. The company has elected the practical expedient to not separate non-lease components from lease components for most asset classes except for certain asset classes that have significant non-lease (i.e., service) components. Where leases are used in joint ventures, the company recognizes 100 percent of the right-of-use assets and lease liabilities when the company is the sole signatory for the lease (in most cases, where the company is the operator of a joint venture). Lease costs reflect only the costs associated with the operator’s working interest share. The lease term includes the committed lease term identified in the contract, taking into account renewal and termination options that management is 68 Chevron Corporation 2023 Annual Report 68 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts reasonably certain to exercise. The company uses its incremental borrowing rate as a proxy for the discount rate based on the term of the lease unless the implicit rate is available. Goodwill Goodwill resulting from a business combination is not subject to amortization. The company tests such goodwill at the reporting unit level for impairment annually at December 31, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value of the reporting unit below its carrying amount. Environmental Expenditures Environmental expenditures that relate to ongoing operations or to conditions caused by past operations are expensed. Expenditures that create future benefits or contribute to future revenue generation are capitalized. Liabilities related to future remediation costs are recorded when environmental assessments or cleanups or both are probable and the costs can be reasonably estimated. For crude oil, natural gas and mineral-producing properties, a liability for an ARO is made in accordance with accounting standards for asset retirement and environmental obligations. Refer to Note 25 Asset Retirement Obligations for a discussion of the company’s AROs. For abandonment and decommissioning obligations related to previously sold assets, refer to Note 24 Other Contingencies and Commitments. For U.S. federal Superfund sites and analogous sites under state laws, the company records a liability for its designated share of the probable and estimable costs, and probable amounts for other potentially responsible parties when mandated by the regulatory agencies because the other parties are not able to pay their respective shares. The gross amount of environmental liabilities is based on the company’s best estimate of future costs using currently available technology and applying current regulations and the company’s own internal environmental policies. Future amounts are not discounted. Recoveries or reimbursements are recorded as assets when receipt is reasonably assured. Currency Translation The U.S. dollar is the functional currency for substantially all of the company’s consolidated operations and those of its equity affiliates. For those operations, all gains and losses from currency remeasurement are included in current period income. The cumulative translation effects for those few entities, both consolidated and affiliated, using functional currencies other than the U.S. dollar are included in “Currency translation adjustment” on the Consolidated Statement of Equity. Revenue Recognition The company accounts for each delivery order of crude oil, NGLs, natural gas, petroleum and chemical products as a separate performance obligation. Revenue is recognized when the performance obligation is satisfied, which typically occurs at the point in time when control of the product transfers to the customer. Payment is generally due within 30 days of delivery. The company accounts for delivery transportation as a fulfillment cost, not a separate performance obligation, and recognizes these costs as an operating expense in the period when revenue for the related commodity is recognized. Revenue is measured as the amount the company expects to receive in exchange for transferring commodities to the customer. The company’s commodity sales are typically based on prevailing market-based prices and may include discounts and allowances. Until market prices become known under terms of the company’s contracts, the transaction price included in revenue is based on the company’s estimate of the most likely outcome. Discounts and allowances are estimated using a combination of historical and recent data trends. When deliveries contain multiple products, an observable standalone selling price is generally used to measure revenue for each product. The company includes estimates in the transaction price only to the extent that a significant reversal of revenue is not probable in subsequent periods. Stock Options and Other Share-Based Compensation The company issues stock options and other share-based compensation to certain employees. For equity awards, such as stock options and certain restricted stock units, total compensation cost is based on the grant date fair value, and for liability awards, such as stock appreciation rights, total compensation cost is based on the settlement value. The company recognizes stock-based compensation expense for all awards over the service period required to earn the award, which is the shorter of the vesting period or the time period in which an employee becomes eligible to retain the award at retirement. The company’s Long-Term Incentive Plan (LTIP) awards include stock options and stock appreciation rights, which have graded vesting provisions by which one-third of each award vests on each of the first, second and third anniversaries of the date of grant. In addition, performance shares granted under the company’s LTIP will vest at the end of the three-year performance period. For awards granted under the company’s LTIP beginning in 2017, stock options and stock appreciation rights have graded vesting by which one-third of each award vests annually on each January 31 on or after the first anniversary of the grant date. Special restricted stock unit awards have cliff vesting by which the total award will vest on January 31 on or after the third anniversary of the grant date. Standard restricted stock unit awards have cliff vesting by which the total award will vest on January 31 on or after 69 Chevron Corporation 2023 Annual Report 69 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts the fifth anniversary of the grant date, subject to adjustment upon termination pursuant to the satisfaction of certain criteria. Commencing for grants issued in January 2023 and after, standard restricted stock units vest ratably on an annual basis over a three-year period. The company amortizes these awards on a straight-line basis. 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 year ended December 31, 2023, are reflected in the table below. Balance at December 31, 2020 $ (107) $ (10) $ — $ (5,495) $ (5,612) Currency Translation Adjustments Unrealized Holding Gains (Losses) on Securities Derivatives Defined Benefit Plans Total Components of Other Comprehensive Income (Loss)1: Before Reclassifications Reclassifications2,3 Net Other Comprehensive Income (Loss) Balance at December 31, 2021 Components of Other Comprehensive Income (Loss)1: Before Reclassifications Reclassifications2, 3 Net Other Comprehensive Income (Loss) Balance at December 31, 2022 Components of Other Comprehensive Income (Loss)1: Before Reclassifications Reclassifications2, 3 Net Other Comprehensive Income (Loss) Balance at December 31, 2023 (55) — (55) (1) — (1) (6) 6 — 949 830 1,779 887 836 1,723 $ (162) $ (11) $ — $ (3,716) $ (3,889) (41) — (41) (1) — (1) 68 (80) (12) 703 442 1,145 729 362 1,091 $ (203) $ (12) $ (12) $ (2,571) $ (2,798) 11 — 11 1 — 1 (16) 33 17 (397) 206 (191) (401) 239 (162) $ (192) $ (11) $ 5 $ (2,762) $ (2,960) 1 All amounts are net of tax. 2 Refer to Note 23 Employee Benefit Plans, for reclassified components, including amortization of actuarial gains or losses, amortization of prior service costs and settlement losses, totaling $231 that are included in employee benefit costs for the year ended December 31, 2023. Related income taxes for the same period, totaling $25, are reflected in Income Tax Expense on the Consolidated Statement of Income. All other reclassified amounts were insignificant. 3 Refer to Note 10 Financial and Derivative Instruments for cash flow hedging. 70 Chevron Corporation 2023 Annual Report 70 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Note 3 Information Relating to the Consolidated Statement of Cash Flows Distributions more (less) than income from equity affiliates includes the following: Distributions from equity affiliates (Income) loss from equity affiliates Distributions more (less) than income from equity affiliates Net decrease (increase) in operating working capital was composed of the following: Decrease (increase) in accounts and notes receivable Decrease (increase) in inventories Decrease (increase) in prepaid expenses and other current assets Increase (decrease) in accounts payable and accrued liabilities Increase (decrease) in income and other taxes payable Net decrease (increase) in operating working capital Net cash provided by operating activities includes the following cash payments: Interest on debt (net of capitalized interest) Income taxes Proceeds and deposits related to asset sales and returns of investment consisted of the following gross amounts: Proceeds and deposits related to asset sales Returns of investment from equity affiliates Proceeds and deposits related to asset sales and returns of investment Net sales (purchases) of marketable securities consisted of the following gross amounts: Marketable securities purchased Marketable securities sold Net sales (purchases) of marketable securities Net repayment (borrowing) of loans by equity affiliates: Borrowing of loans by equity affiliates Repayment of loans by equity affiliates Net repayment (borrowing) of loans by equity affiliates Net borrowings (repayments) of short-term obligations consisted of the following gross and net amounts: Repayments of short-term obligations Proceeds from issuances of short-term debt obligations Net borrowings (repayments) of short-term obligations with three months or less maturity Net borrowings (repayments) of short-term obligations Net sales (purchases) of treasury shares consists of the following gross and net amounts: Shares issued for share-based compensation plans Shares purchased under share repurchase and deferred compensation plans Net sales (purchases) of treasury shares Net contributions from (distributions to) noncontrolling interests consisted of the following gross and net amounts: Distributions to noncontrolling interests Contributions from noncontrolling interests Net contributions from (distributions to) noncontrolling interests Year ended December 31 2023 2022 2021 4,246 (5,131) (885) 1,187 (320) (1,202) (49) (2,801) (3,185) 465 10,416 446 223 669 (289) 464 175 (368) 66 (302) $ $ $ $ $ $ $ $ $ $ $ — $ — 135 135 261 (14,939) (14,678) (54) 14 (40) $ $ $ $ $ 3,855 (8,585) $ (4,730) $ (2,317) $ (930) (226) 2,750 2,848 2,125 525 9,148 1,435 1,200 2,635 $ $ $ $ (7) $ 124 117 $ (108) $ 84 (24) $ — $ — 263 263 5,838 (11,255) $ $ 3,659 (5,657) (1,998) (7,548) (530) 19 5,475 1,223 (1,361) 699 4,355 1,352 439 1,791 (4) 3 (1) — 401 401 (6,906) 4,448 (3,114) (5,572) 1,421 (1,383) (5,417) $ 38 (118) $ 4 (114) $ (53) 17 (36) $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ $ The “Other” line in the Operating Activities section includes changes in postretirement benefits obligations and other long- term liabilities. The Consolidated Statement of Cash Flows excludes changes to the Consolidated Balance Sheet that did not affect cash. “Depreciation, depletion and amortization” and “Deferred income tax provision” collectively include approximately $1,765 in non-cash reductions to “Properties, plant and equipment” and “Investments and advances” in 2023 relating to impairments, mainly of upstream assets in California. “Other income (loss)” and “Deferred income tax provision” collectively include a $1,950 charge related to non-cash increases to “Deferred credits and other noncurrent obligations” related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico. The cash outlays for these abandonment and decommissioning obligations are expected to take place over the next decade. 71 Chevron Corporation 2023 Annual Report 71 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Refer also to Note 25 Asset Retirement Obligations for a discussion of revisions to the company’s AROs that also did not involve cash receipts or payments for the three years ending December 31, 2023. The components of “Capital expenditures” are presented in the following table: Additions to properties, plant and equipment * Additions to investments Current-year dry hole expenditures Payments for other assets and liabilities, net Capital expenditures Year ended December 31 $ 2023 14,788 690 326 25 $ 2022 10,349 1,147 309 169 15,829 $ 11,974 $ 2021 7,515 460 83 (2) 8,056 $ $ * Excludes non-cash movements of $1,559 in 2023, $334 in 2022 and $316 in 2021. The table below quantifies the beginning and ending balances of restricted cash and restricted cash equivalents in the Consolidated Balance Sheet: Cash and cash equivalents Restricted cash included in “Prepaid expenses and other current assets” Restricted cash included in “Deferred charges and other assets” Total cash, cash equivalents and restricted cash 2023 8,178 275 822 9,275 $ $ $ $ Year ended December 31 2022 17,678 630 813 $ 19,121 $ 2021 5,640 333 822 6,795 Note 4 New Accounting Standards Segment Reporting (Topic 280) Improvements to Reportable Segment Disclosures In November 2023, the Financial Accounting Standards Board (FASB) issued Accounting Standard Update (ASU) 2023-07, which becomes effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024. The standard requires companies to disclose significant segment expenses. The company does not expect the standard to have a material effect on its consolidated financial statements and has begun evaluating disclosure presentation alternatives. Income Taxes (Topic 740) Improvements to Income Tax Disclosures In December 2023, the FASB issued ASU 2023-09, which becomes effective for fiscal years beginning after December 15, 2024. The standard requires companies to disclose specific categories in the income tax rate reconciliation table and the amount of income taxes paid per major jurisdiction. The company does not expect the standard to have a material effect on its consolidated financial statements and has begun evaluating disclosure presentation alternatives. Note 5 Lease Commitments The company enters into leasing arrangements as a lessee; any lessor arrangements are not significant. Operating lease arrangements mainly involve land, bareboat charters, terminals, drill ships, drilling rigs, time chartered vessels, office buildings and warehouses, and exploration and production equipment. Finance leases primarily include facilities, vessels and office buildings. Details of the right-of-use assets and lease liabilities for operating and finance leases, presentation, are as follows: including the balance sheet 72 Chevron Corporation 2023 Annual Report 72 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Deferred charges and other assets Properties, plant and equipment, net Right-of-use assets* Accrued Liabilities Short-term Debt Current lease liabilities Deferred credits and other noncurrent obligations Long-term Debt Noncurrent lease liabilities Total lease liabilities Weighted-average remaining lease term (in years) Weighted-average discount rate At December 31, 2023 At December 31, 2022 Operating Leases Finance Leases Operating Leases Finance Leases $ $ $ $ 5,422 — 5,422 1,538 — 1,538 3,696 — 3,696 5,234 $ $ $ $ — 583 583 — 60 60 — 574 574 634 $ $ $ $ 4,262 — 4,262 1,111 — 1,111 2,920 — 2,920 4,031 $ $ $ $ — 392 392 — 45 45 — 403 403 448 6.7 3.3 % 12.6 4.5 % 7.0 1.9 % 11.9 4.1 % * Includes non-cash additions of $2,556 and $233 in 2023, and $1,807 and $3 in 2022 for right-of-use assets obtained in exchange for new and modified lease liabilities for operating and finance leases, respectively. Total lease costs consist of both amounts recognized in the Consolidated Statement of Income during the period and amounts capitalized as part of the cost of another asset. Total lease costs incurred for operating and finance leases were as follows: Operating lease costs* Finance lease costs Total lease costs * Includes variable and short-term lease costs. 2023 2,984 52 3,036 $ $ Cash paid for amounts included in the measurement of lease liabilities was as follows: Operating cash flows from operating leases Investing cash flows from operating leases Operating cash flows from finance leases Financing cash flows from finance leases $ 2023 2,271 713 15 42 $ $ $ Year-ended December 31 2022 2,359 57 2,416 $ $ 2021 2,199 66 2,265 Year-ended December 31 $ 2022 1,892 467 18 44 2021 1,670 398 21 193 At December 31, 2023, the estimated future undiscounted cash flows for operating and finance leases were as follows: Year 2024 2025 2026 2027 2028 Thereafter Total Less: Amounts representing interest Total lease liabilities At December 31, 2023 Operating Leases Finance Leases $ $ $ 1,673 1,153 734 544 396 1,364 5,864 630 5,234 $ $ $ 84 79 76 68 66 443 816 182 634 Additionally, the company has $232 in future undiscounted cash flows for operating leases not yet commenced. These leases are primarily for drill ships, drilling rigs and storage tanks. For those leasing arrangements where the underlying asset is not yet constructed, the lessor is primarily involved in the design and construction of the asset. 73 Chevron Corporation 2023 Annual Report 73 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts 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 liquids and natural gas and those associated with the refining, marketing, 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: Sales and other operating revenues Total costs and other deductions Net income (loss) attributable to CUSA Current assets Other assets Current liabilities Other liabilities Total CUSA net equity Memo: Total debt $ 2023 152,347 144,482 4,598 $ $ $ $ Year ended December 31 2022 183,032 166,955 13,315 $ 2021 120,380 114,641 6,904 2023 19,489 54,460 20,624 22,227 31,098 9,740 At December 31 2022 $ $ $ 18,704 50,153 22,452 19,274 27,131 10,800 Note 7 Summarized Financial Data – Tengizchevroil LLP Chevron has a 50 percent equity ownership interest in Tengizchevroil LLP (TCO). Refer to Note 15 Investments and Advances for a discussion of TCO operations. Summarized financial information for 100 percent of TCO is presented in the table below: Sales and other operating revenues Costs and other deductions Net income attributable to TCO Current assets Other assets Current liabilities Other liabilities Total TCO net equity $ 2023 19,578 10,193 6,569 $ Year ended December 31 2022 23,795 11,596 8,566 $ 2021 15,927 8,186 5,418 At December 31 2022 $ 2023 3,919 57,454 2,372 12,782 46,219 $ $ $ 6,522 54,506 3,567 12,312 45,149 Note 8 Summarized Financial Data – Chevron Phillips Chemical Company LLC Chevron has a 50 percent equity ownership interest in Chevron Phillips Chemical Company LLC (CPChem). Refer to Note 15 Investments and Advances for a discussion of CPChem operations. Summarized financial information for 100 percent of CPChem is presented in the table below: Sales and other operating revenues Costs and other deductions Net income attributable to CPChem $ 2023 11,560 10,561 1,173 $ Year ended December 31 2022 14,180 12,870 1,662 $ 2021 14,104 10,862 3,684 74 Chevron Corporation 2023 Annual Report 74 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Current assets Other assets Current liabilities Other liabilities Total CPChem net equity $ $ 2023 3,284 16,425 1,757 3,269 14,683 $ At December 31 2022 $ 3,472 15,184 2,146 2,941 13,569 Note 9 Fair Value Measurements The tables below show the fair value hierarchy for assets and liabilities measured at fair value on a recurring and nonrecurring basis at December 31, 2023 and 2022. 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 December 31, 2023. 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 below. 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. Properties, Plant and Equipment In 2023, the company impaired a portion of its U.S. upstream assets, primarily in California, due to continuing regulatory challenges in the state that have resulted in lower anticipated future investment levels in its business plans. The company did not have any individually material impairments of long-lived assets measured at fair value on a nonrecurring basis to report in 2022. 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 2023 or 2022. Assets and Liabilities Measured at Fair Value on a Recurring Basis Marketable securities Derivatives - not designated Derivatives - designated Total assets at fair value Derivatives - not designated Derivatives - designated Total liabilities at fair value Total Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 At December 31, 2023 At December 31, 2022 $ $ $ 45 $ 152 7 204 $ 262 — 45 $ 24 7 76 $ 160 — — $ 128 — 128 $ 102 — — $ — — — $ — — 223 $ 184 — 407 $ 43 15 223 $ 111 — 334 $ 33 15 — $ 73 — 73 $ 10 — 262 $ 160 $ 102 $ — $ 58 $ 48 $ 10 $ — — — — — — — Assets and Liabilities Measured at Fair Value on a Nonrecurring Basis At December 31 At December 31 Total Level 1 Level 2 Level 3 Before-Tax Loss Year 2023 Total Level 1 Level 2 Level 3 Before-Tax Loss Year 2022 $ 484 $ — $ — $ 484 $ 2,175 $ 54 $ — $ — $ 54 $ 518 Properties, plant and equipment, net (held and used) Properties, plant and equipment, net (held for sale) Investments and advances Total nonrecurring assets at fair value $ 691 $ 5 $ 165 $ 521 $ 2,532 $ 87 $ 2 $ — $ 85 $ — 207 — 5 — 165 — 37 5 352 — 33 — 2 — — — 31 432 9 959 At year-end 2023, the company had assets measured at fair value Level 3 using unobservable inputs of $521. The carrying value of these assets were written down to fair value based on estimates derived from discounted cash flow models. Cash 75 Chevron Corporation 2023 Annual Report 75 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts flows were determined using estimates of future production, an outlook of future price based on published prices and a discount rate believed to be consistent with those used by principal market participants. Assets and Liabilities Not Required to Be Measured at Fair Value 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 $8,178 and $17,678 at December 31, 2023, and December 31, 2022, 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 December 31, 2023. “Cash and cash equivalents” do not include investments with a carrying/fair value of $1,097 and $1,443 at December 31, 2023, and December 31, 2022, respectively. At December 31, 2023, these investments are classified as Level 1 and include restricted funds related to certain upstream decommissioning activities, a financing program and tax payments. Long-term debt, excluding finance lease liabilities, of $14,612 and $16,258 at December 31, 2023, and December 31, 2022, respectively, had estimated fair values of $13,709 and $14,959, respectively. Long-term debt primarily includes corporate issued bonds. The fair value of corporate bonds is $13,321 and classified as Level 1. The fair value of other long-term debt classified as Level 2 is $388. 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 December 31, 2023 and 2022, were not material. Note 10 Financial and Derivative Instruments Derivative Commodity Instruments The company’s derivative commodity 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 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 commodity derivative 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 institutions and other oil and gas companies in the contracts and option contracts principally with major financial “over-the-counter” markets, which are governed by International Swaps and Derivatives Association agreements and other master netting arrangements. Depending on the nature of the derivative transactions, bilateral collateral arrangements may also be required. Derivative instruments measured at fair value at December 31, 2023, 2022 and 2021, and their classification on the Consolidated Balance Sheet and Consolidated Statement of Income are as follows: Consolidated Balance Sheet: Fair Value of Derivatives Type of Contract Balance Sheet Classification Commodity Commodity Accounts and notes receivable Long-term receivables, net Total assets at fair value Commodity Commodity Total liabilities at fair value Accounts payable Deferred credits and other noncurrent obligations Consolidated Statement of Income: The Effect of Derivatives Type of Derivative Contract Commodity Commodity Commodity Statement of Income Classification Sales and other operating revenues Purchased crude oil and products Other income (loss) 2023 151 8 159 216 46 262 $ $ $ $ At December 31 2022 $ $ $ $ 175 9 184 46 12 58 2023 (304) (154) (47) $ (505) $ $ $ Gain/(Loss) Year ended December 31 2022 (651) (226) 10 (867) $ $ 2021 (685) (64) (46) (795) 76 Chevron Corporation 2023 Annual Report 76 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts The amount reclassified from AOCL to “Sales and other operating revenues” from designated hedges was a decrease of $33 in 2023, compared with an increase of $80 in the prior year. At December 31, 2023, before-tax deferred gains in AOCL related to outstanding crude oil price hedging contracts were $7, all of which is expected to be reclassified into earnings during the next 12 months as the hedged crude oil sales are recognized in earnings. The table below represents gross and net derivative assets and liabilities subject to netting agreements on the Consolidated Balance Sheet at December 31, 2023 and 2022. Consolidated Balance Sheet: The Effect of Netting Derivative Assets and Liabilities At December 31, 2023 Derivative Assets - not designated Derivative Assets - designated Derivative Liabilities - not designated Derivative Liabilities - designated At December 31, 2022 Derivative Assets - not designated Derivative Assets - designated Derivative Liabilities - not designated Derivative Liabilities - designated Gross Amounts Recognized Gross Amounts Offset Net Amounts Presented Gross Amounts Not Offset Net Amounts $ $ $ $ $ $ $ $ 2,394 8 2,504 1 2,591 8 2,450 23 $ $ $ $ $ $ $ $ 2,242 1 2,242 1 2,407 8 2,407 8 $ $ $ $ $ $ $ $ 152 7 262 $ $ $ — $ $ 184 — $ $ 43 $ 15 4 $ — $ 15 $ — $ $ 5 — $ — $ — $ 148 7 247 — 179 — 43 15 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.” Concentrations of Credit Risk The company’s financial instruments that are exposed to concentrations of credit risk consist primarily of its cash equivalents, marketable securities, derivative financial instruments and trade receivables. The company’s short-term investments are placed with a wide array of financial institutions with high credit ratings. Company investment policies limit the company’s exposure both to credit risk and to concentrations of credit risk. Similar policies on diversification and creditworthiness are applied to the company’s counterparties in derivative instruments. For a discussion of credit risk on trade receivables, see Note 28 Financial Instruments - Credit Losses. Note 11 Assets Held for Sale At December 31, 2023, the company classified $675 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 2023 were not material. Note 12 Equity Retained earnings at December 31, 2023 and 2022, included $34,359 and $33,570, respectively, for the company’s share of undistributed earnings of equity affiliates. At December 31, 2023, about 101 million shares of Chevron’s common stock remained available for issuance from the 104 million shares that were reserved for issuance under the 2022 Chevron Long-Term Incentive Plan. In addition, 578,044 shares remain available for issuance from the 1,600,000 shares of the company’s common stock that were reserved for awards under the Chevron Corporation Non-Employee Directors’ Equity Compensation and Deferral Plan. Note 13 Earnings Per Share Basic earnings per share (EPS) is based upon “Net Income (Loss) Attributable to Chevron Corporation” (“earnings”) and includes the effects of deferrals of salary and other compensation awards that are invested in Chevron stock units by certain officers and employees of the company. Diluted EPS includes the effects of these items as well as the dilutive effects of outstanding stock options awarded under the company’s stock option programs (refer to Note 22 Stock Options and Other Share-Based Compensation). The table below sets forth the computation of basic and diluted EPS: 77 Chevron Corporation 2023 Annual Report 77 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Basic EPS Calculation Earnings available to common stockholders - Basic* Weighted-average number of common shares outstanding Add: Deferred awards held as stock units Total weighted-average number of common shares outstanding Earnings per share of common stock - Basic Diluted EPS Calculation Earnings available to common stockholders - Diluted* Weighted-average number of common shares outstanding Add: Deferred awards held as stock units Add: Dilutive effect of employee stock-based awards Total weighted-average number of common shares outstanding Earnings per share of common stock - Diluted Year ended December 31 2023 2022 2021 21,369 $ 35,465 $ 15,625 1,873 — 1,873 1,931 — 1,931 11.41 $ 18.36 $ 1,916 — 1,916 8.15 21,369 $ 35,465 $ 15,625 1,873 — 7 1,880 1,931 — 9 1,940 11.36 $ 18.28 $ 1,916 — 4 1,920 8.14 $ $ $ $ * There was no effect of dividend equivalents paid on stock units or dilutive impact of employee stock-based awards on earnings. Note 14 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 transportation and exploring for, developing, producing and transporting crude oil and natural gas; regasification associated with liquefied natural gas (LNG); transporting crude oil by major international oil export pipelines; processing, transporting, storage and marketing of natural gas; carbon capture and storage; 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 activities. liquefaction, 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). 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 are not allocated to the operating segments. However, operating segments are billed for the direct use of corporate services. Non-billable costs remain at the corporate level in “All Other.” Earnings by major operating area are presented in the following table: 78 Chevron Corporation 2023 Annual Report 78 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Upstream United States International Total Upstream Downstream United States International Total Downstream Total Segment Earnings All Other Interest expense Interest income Other Year ended December 31 $ $ 2023 4,148 13,290 17,438 3,904 2,233 6,137 23,575 (432) 491 (2,265) $ 2022 12,621 17,663 30,284 5,394 2,761 8,155 38,439 (476) 261 (2,759) 2021 7,319 8,499 15,818 2,389 525 2,914 18,732 (662) 36 (2,481) 15,625 Net Income (Loss) Attributable to Chevron Corporation $ 21,369 $ 35,465 $ Segment Assets Segment assets do not include intercompany investments or receivables. Assets at year-end 2023 and 2022 are as follows: Upstream United States International Goodwill Total Upstream Downstream United States International Goodwill Total Downstream Total Segment Assets All Other United States International Total All Other Total Assets – United States Total Assets – International Goodwill Total Assets At December 31 2023 2022 $ $ 58,750 131,685 4,370 194,805 33,066 21,070 352 54,488 249,293 10,292 2,047 12,339 102,108 154,802 4,722 $ 261,632 $ 44,246 134,489 4,370 183,105 31,676 21,193 352 53,221 236,326 17,861 3,522 21,383 93,783 159,204 4,722 257,709 Segment Sales and Other Operating Revenues Operating segment sales and other operating revenues, including internal transfers, for the years 2023, 2022 and 2021, are presented in the table on the next page. 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. 79 Chevron Corporation 2023 Annual Report 79 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Upstream United States International Subtotal Intersegment Elimination — United States Intersegment Elimination — International Total Upstream Downstream United States International Subtotal Intersegment Elimination — United States Intersegment Elimination — International Total Downstream All Other United States International Subtotal Intersegment Elimination — United States Intersegment Elimination — International Total All Other Sales and Other Operating Revenues United States International Subtotal Intersegment Elimination — United States Intersegment Elimination — International Total Sales and Other Operating Revenues $ $ 2023 40,115 43,805 83,920 (26,307) (11,871) 45,742 83,567 78,058 161,625 (8,793) (1,794) 151,038 595 2 597 (462) (2) 133 124,277 121,865 246,142 (35,562) (13,667) Year ended December 31* 2022 2021 $ 50,822 56,156 106,978 (29,870) (13,815) 63,293 91,824 87,741 179,565 (5,529) (1,728) 172,308 515 3 518 (400) (2) 116 143,161 143,900 287,061 (35,799) (15,545) 29,219 40,921 70,140 (15,154) (10,994) 43,992 57,209 58,098 115,307 (2,296) (1,521) 111,490 506 2 508 (382) (2) 124 86,934 99,021 185,955 (17,832) (12,517) 155,606 $ 196,913 $ 235,717 $ * Other than the United States, no other country accounted for 10 percent or more of the company’s Sales and Other Operating Revenues. Segment Income Taxes Segment income tax expense for the years 2023, 2022 and 2021 is as follows: Year ended December 31 Upstream United States International Total Upstream Downstream United States International Total Downstream All Other $ $ 2023 1,141 5,733 6,874 1,109 519 1,628 (329) $ 2022 3,678 9,055 12,733 1,515 280 1,795 (462) Total Income Tax Expense (Benefit) $ 8,173 $ 14,066 $ 2021 1,934 4,192 6,126 547 203 750 (926) 5,950 Other Segment Information Additional information for the segmentation of major equity affiliates is contained in Note 15 Investments and Advances. Information related to properties, plant and equipment by segment is contained in Note 18 Properties, Plant and Equipment. 80 Chevron Corporation 2023 Annual Report 80 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Note 15 Investments and Advances Equity in earnings, together with investments in and advances to companies accounted for using the equity method and other investments accounted for at or below cost, is shown in the following table. For certain equity affiliates, Chevron pays its share of some income taxes directly. For such affiliates, the equity in earnings does not include these taxes, which are reported on the Consolidated Statement of Income as “Income tax expense.” Upstream Tengizchevroil Caspian Pipeline Consortium Angola LNG Limited Other Total Upstream Downstream Chevron Phillips Chemical Company LLC GS Caltex Corporation Other Total Downstream All Other Other Total equity method Other non-equity method investments Total investments and advances Total United States Total International Investments and Advances At December 31 Equity in Earnings Year ended December 31 2023 26,954 797 1,762 2,106 31,619 7,765 4,309 2,426 14,500 (6) 46,113 699 46,812 10,985 35,827 $ $ $ $ $ 2022 26,534 761 1,963 1,938 31,196 6,843 4,288 2,288 13,419 (5) 44,610 628 45,238 9,855 35,383 $ $ $ $ 2023 3,375 158 513 (161) 3,885 608 437 210 1,255 (9) 5,131 340 4,791 $ $ $ $ $ 2022 4,386 128 1,857 255 6,626 867 874 224 1,965 (6) 2021 2,831 155 336 187 3,509 1,842 85 220 2,147 1 8,585 $ 5,657 975 7,610 $ $ 1,889 3,768 $ $ $ $ $ Descriptions of major equity affiliates and non-equity investments, including significant differences between the company’s carrying value of its investments and its underlying equity in the net assets of the affiliates, are as follows: Tengizchevroil Chevron has a 50 percent equity ownership interest in Tengizchevroil (TCO), which operates the Tengiz and Korolev crude oil fields in Kazakhstan. At December 31, 2023, the company’s carrying value of its investment in TCO was about $80 higher than the amount of underlying equity in TCO’s net assets. This difference results from Chevron acquiring a portion of its interest in TCO at a value greater than the underlying book value for that portion of TCO’s net assets. Included in the investment is a loan to TCO to fund the development of the FGP/WPMP with a principal balance of $4,500. Caspian Pipeline Consortium Chevron has a 15 percent interest in the Caspian Pipeline Consortium, which provides the critical export route for crude oil from both TCO and Karachaganak. Angola LNG Limited Chevron has a 36.4 percent interest in Angola LNG Limited, which processes and liquefies natural gas produced in Angola for delivery to international markets. Chevron Phillips Chemical Company LLC Chevron owns 50 percent of Chevron Phillips Chemical Company LLC. Included in the investment balance is a loan with a principal balance of $387 to fund a portion of the Golden Triangle Polymers Project in Orange, Texas, in which Chevron Phillips Chemical Company LLC owns 51 percent. GS Caltex Corporation Chevron owns 50 percent of GS Caltex Corporation, a joint venture with GS Energy in South Korea. The joint venture imports, produces and markets petroleum products, petrochemicals and lubricants. Other Information “Sales and other operating revenues” on the Consolidated Statement of Income includes $13,623, $16,286 and $10,796 with affiliated companies for 2023, 2022 and 2021, respectively. “Purchased crude oil and products” includes $7,404, $10,171 and $5,778 with affiliated companies for 2023, 2022 and 2021, respectively. “Accounts and notes receivable” on the Consolidated Balance Sheet includes $1,480 and $907 due from affiliated companies at December 31, 2023 and 2022, respectively. “Accounts payable” includes $591 and $709 due to affiliated companies at December 31, 2023 and 2022, respectively. 81 Chevron Corporation 2023 Annual Report 81 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts The following table provides summarized financial information on a 100 percent basis for all equity affiliates as well as Chevron’s total share, which includes Chevron’s net loans to affiliates of $4,494, $4,278 and $4,704 at December 31, 2023, 2022 and 2021, respectively. Year ended December 31 Total revenues Income before income tax expense* Net income attributable to affiliates At December 31 Current assets Noncurrent assets Current liabilities Noncurrent liabilities $ $ 2023 49,306 15,304 11,618 22,772 105,965 14,085 23,797 $ $ 2022 100,184 23,811 19,077 26,632 101,557 16,319 22,943 $ $ Affiliates 2021 71,241 15,175 12,598 21,871 100,235 17,275 24,219 $ $ $ $ 2023 23,217 7,209 5,485 10,110 48,753 6,698 6,342 Chevron Share $ $ 2022 48,323 10,876 8,595 11,671 46,428 7,708 5,980 2021 34,359 6,984 5,670 9,267 44,360 7,492 5,982 Total affiliates’ net equity $ 90,855 $ 88,927 $ 80,612 $ 45,823 $ 44,411 $ 40,153 * Chevron’s net income attributable to affiliates is recorded in the company’s before-tax consolidated earnings in accordance with U.S. Generally Accepted Accounting Principles. The total income tax expense recorded by the company’s equity affiliates in 2023 was $3,686, with Chevron’s share being $1,724. Note 16 Litigation Ecuador In 2003, Chevron was sued in Ecuador for environmental harm allegedly caused by an oil consortium formerly operated by a Texaco subsidiary. The Ecuadorian trial court entered judgment against Chevron, and Ecuador’s highest Constitutional Court affirmed the judgment for approximately $9.5 billion. In 2017, Chevron obtained a final court ruling in the United States determining that the Ecuadorian judgment had been procured through fraud, bribery, and corruption, and prohibiting the Ecuadorian plaintiffs and their cohorts from seeking to enforce the Ecuadorian judgment in the United States or profiting from their illegal acts. The Ecuadorian plaintiffs sought to have the Ecuadorian judgment recognized and enforced in Canada, Brazil, and Argentina, but all of those actions were dismissed in Chevron’s favor. In 2009, Chevron filed an arbitration claim against Ecuador before an arbitral tribunal administered by the Permanent Court of Arbitration in The Hague, under the United States-Ecuador Bilateral Investment Treaty. In 2018, the tribunal ruled in Chevron’s favor, finding that the Ecuadorian judgment was procured through fraud, bribery, and corruption and was based on environmental claims that Ecuador had already settled and released. The tribunal ruled that the Ecuadorian judgment “violates international public policy” and “should not be recognized or enforced by the courts of other States,” and ordered Ecuador to remove the judgment’s status of enforceability and to compensate Chevron for its injuries in an amount to be established separately by the tribunal. Ecuador’s requests to have a Dutch court set aside the tribunal’s award were denied, and the Dutch Supreme Court affirmed such denial in a final ruling in favor of Chevron in November 2023. 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. 82 Chevron Corporation 2023 Annual Report 82 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Climate Change Governmental and other entities in various jurisdictions across the United States have brought 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 29 separate lawsuits filed by various U.S. cities and counties, four U.S. states, the District of Columbia, two Native American tribes, and a trade group in both federal and state courts.1 One of the city lawsuits was dismissed on the merits and two suits, including one of the county lawsuits and the case brought by the trade association, were voluntarily dismissed by the plaintiffs. The lawsuits have asserted various causes of action, including public nuisance, private nuisance, failure to warn, fraud, conspiracy to commit fraud, design defect, product defect, trespass, negligence, impairment of public trust, equitable relief for pollution, impairment and destruction of natural resources, unjust enrichment, violations of consumer protection statutes, violations of unfair competition statutes, violations of a federal antitrust statute, and violations of federal and state RICO statutes, based upon, among other things, the company’s production of oil and gas products and alleged misrepresentations or omissions relating to climate change risks associated with those products. Further such proceedings are likely to be brought by other parties. While defendants have sought to remove cases filed in state court to federal court, most of those cases have been remanded to state court and the U.S. Supreme Court has denied petitions for writ of certiorari on jurisdictional questions to date. The unprecedented legal theories set forth in these proceedings include claims for damages (both compensatory and punitive), injunctive and other forms of equitable relief, including without limitation abatement, contribution to abatement funds, disgorgement of profits and equitable relief for pollution, impairment and destruction of natural resources, civil penalties and liability for fees and costs of suits. Due to the unprecedented nature of the suits, the company is unable to estimate any range of possible liability, but given the uncertainty of litigation there can be no assurance that the cases will not 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. 1 The cases are: Bayamon v. Exxon Mobil Corp., et al., No. 22-cv-1550 (D.P.R.); City of Annapolis v. BP P.L.C., et al., No. C-02-CV-21-000250 (Md. Cir. Ct.); County of Anne Arundel v. BP P.L.C., et al., No. C-02-CV-21-000565 (Md. Cir. Ct.); Mayor and City Council of Baltimore v. BP P.L.C., et al., No. 24-C-18-004219 (Md. Cir. Ct.); People ex rel. Bonta v. Exxon Mobil Corp., et al., No. CGC-23-609134 (Cal. Super. Ct.); City of Charleston v. Brabham Oil Co., et al., No. 20-CP-10-3975 (S.C. Ct. of Common Pleas); District of Columbia v. Exxon Mobil Corp., et al., No. 2020-CA-002892-B (D.C. Super. Ct.); Delaware ex rel. Jennings v. BP America Inc., et al., No. N20C-09-097 (Del.Super. Ct.); City of Hoboken v. Exxon Mobil Corp., et al., No. HUD-L-003179-20 (N.J. Super. Ct.); City and County of Honolulu, et al. v. Sunoco LP, et al., No. 1CCV-20-0000380 (Haw. Cir. Ct.); City of Imperial Beach v. Chevron Corp., et al., No. C17-01227 (Cal. Super. Ct.); King County v. BP P.L.C., et al., No. 18-2-11859-0 (Wash. Super. Ct.) (voluntarily dismissed); Makah Indian Tribe v. Exxon Mobil Corp., et al., No. 23-25216-1-SEA (Wash. Super. Ct.); County of Marin v. Chevron Corp., et al., No. 17-cv-02586 (Cal. Super. Ct.); County of Maui v. Sunoco LP, et al., No. 2CCV-20-0000283 (Haw. Cir. Ct.); County of Multnomah v. Exxon Mobil Corp., et al., No. 23-cv-25164 (Or. Cir. Ct.); Municipality of San Juan, Puerto Rico v. Exxon Mobil Corp., et al., No. 23-cv-01608 (D.P.R.); City of Oakland v. BP p.l.c., et al., No. RG17875889 (Cal. Super. Ct.); Platkin, et al. v. Exxon Mobil Corp., et al., No. MER-L-001797-22 (N.J. Super. Ct.); City of New York v. Chevron Corp., et al., No. 18-cv-00182 (S.D.N.Y.) (dismissed on the merits); Pacific Coast Federation of Fishermen’s Associations v. Chevron Corp., et al., No. CGC-18-571285 (Cal. Super. Ct.) (voluntarily dismissed); State of Rhode Island v. Chevron Corp., et al., No. PC-2018-4716 (R.I. Super. Ct.); City of Richmond v. Chevron Corp., et al., No. C18-00055 (Cal. Super. Ct.); City of San Francisco v. BP P.L.C., et al., No. CGC-17-561370 (Cal. Super. Ct.); County of San Mateo v. Chevron Corp., et al., No. 17-CIV-03222 (Cal. Super. Ct.); City of Santa Cruz v. Chevron Corp., et al., No. 17-cv-03243 (Cal. Super. Ct.); County of Santa Cruz v. Chevron Corp., et al., No. 17-cv-03242 (Cal. Super. Ct.); Shoalwater Bay Indian Tribe v. Exxon Mobil Corp., et al., No. 23-2-25215-2-SEA (Wash. Super. Ct.); City of Chicago v. BP p.l.c., et al., No. 2024-CH-01024 (Ill. Cir. Ct.). 83 Chevron Corporation 2023 Annual Report 83 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts 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.2 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. Further such proceedings may be filed by other parties. The Supreme Court denied a petition for writ of certiorari on jurisdictional questions impacting certain of these cases, and those cases have been or will be remanded to Louisiana state court. Federal jurisdictional questions are still being decided for the remaining cases in the United States Court of Appeals for the Fifth Circuit. A case has been set for trial in the United States District Court for the Eastern District of Louisiana and is scheduled to begin in October 2024. Due to the unprecedented nature of the suits, the company is unable to estimate any range of possible liability, but given the uncertainty of litigation there can be no assurance that the cases will not have a material adverse effect 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. 2 The cases are: Jefferson Parish v. Atlantic Richfield Company, et al., No. 732-768 (24th Jud. Dist. Ct., Jefferson Par.); Jefferson Parish v. Chevron U.S.A. Holdings, Inc., et al., No. 732-769 (24th Jud. Dist. Ct., Jefferson Par.); Jefferson Parish v. Destin Operating Company, Inc., et al., No. 732-770 (24th Jud. Dist. Ct., Jefferson Par.); Jefferson Parish v. Canlan Oil Company, et al., No. 732-771 (24th Jud. Dist. Ct., Jefferson Par.); Jefferson Parish v. Anadarko E&P Onshore LLC, et al., No. 732-772 (24th Jud. Dist. Ct., Jefferson Par.); Jefferson Parish v. ExxonMobil Corporation, et al., No. 732-774 (24th Jud. Dist. Ct., Jefferson Par.); Jefferson Parish v. Equitable Petroleum Corporation, et al., No. 732-775 (24th Jud. Dist. Ct., Jefferson Par.); Plaquemines Parish v. ConocoPhillips Co., et al., No. 60-982 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. HHE Energy Co., et al., No. 60-983 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Exchange Oil & Gas Corp., et al., No. 60-984 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. LLOG Exploration & Production Co., et al., No. 60-985 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Equitable Petroleum Corporation, et al., No. 60-986 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. June Energy, et al., No. 60-987 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Linder Oil Company, et al., No. 60-988 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Riverwood Production Company, et al., No. 60-989 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Helis Oil & Gas Company, et al., No. 60-990 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Northcoast Oil Company, et al., No. 60-992 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Goodrich Petroleum Company, L.L.C., et al., No. 60-994 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Devon Energy Production Company, L.P., et al., No. 60-995 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Rozel Operating Co., et al., No. 60-996 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Palm Energy Offshore, L.L.C., et al., No. 60-997 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Great Southern Oil & Gas Company, Inc., et al., No. 60-998 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Hilcorp Energy Company, et al., No. 60-999 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Apache Oil Corporation, et al., No. 61-000 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. Campbell Energy Corporation, et al., No. 61-001 (25th Jud. Dist. Ct., Plaquemines Par.); Plaquemines Parish v. TotalPetrochemicals & Refining USA, Inc., et al., No. 61-002 (25th Jud. Dist. Ct., Plaquemines Par.); Cameron Parish v. Alpine Exploration Companies, Inc., et al., No. 10-19580 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. Anadarko E&P Onshore, LLC, et al., No. 10-19578 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. Apache Corporation (of Delaware), et al., No. 10-19579 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. Auster Oil & Gas, Inc., et al., No. 10-19582 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. Ballard Exploration Company, Inc., et al., No. 10-19574 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. Bay Coquille, Inc., et al., No. 10-19581 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. BEPCO, LP, et al., No. 10-19572 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. BP America Production Company, et al., No. 10-19576 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. Brammer Engineering, Inc., et al., No. 10-19573 (38th Jud. Dist. Ct., Cameron Par.); Cameron Parish v. Burlington Resources, et al., No. 10-19575 (38th Jud. Dist. Ct., Cameron Par.); Stutes v. Gulfport Energy Corporation, et al., No. 102,146 (15th Jud. Dist. Ct., Vermilion Par.); St. Bernard Parish v. Atlantic Richfield, et al., No. 16-1228 (34th Jud. Dist. Ct. St., Bernard Par.); City of New Orleans v. Apache Louisiana Mins, LLC, et al., No. 19-cv-08290, (E.D. La.). 84 Chevron Corporation 2023 Annual Report 84 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Note 17 Taxes Income Taxes Income tax expense (benefit) U.S. federal Current Deferred State and local Current Deferred Total United States International Current Deferred Total International Total income tax expense (benefit) 2023 895 666 211 1 1,773 6,745 (345) 6,400 8,173 Year ended December 31 2022 2021 $ $ 1,723 2,240 482 39 4,484 9,738 (156) 9,582 $ 14,066 $ 174 1,004 222 202 1,602 4,854 (506) 4,348 5,950 $ $ The reconciliation between the U.S. statutory federal income tax rate and the company’s effective income tax rate is detailed in the following table: Income (loss) before income taxes United States International Total income (loss) before income taxes Theoretical tax (at U.S. statutory rate of 21%) Equity affiliate accounting effect Effect of income taxes from international operations State and local taxes on income, net of U.S. federal income tax benefit Prior year tax adjustments, claims and settlements 1 Tax credits Other U.S. 1, 2 Total income tax expense (benefit) Effective income tax rate 3 2023 8,565 21,019 29,584 6,213 (1,072) 3,001 252 (32) (20) (169) 8,173 $ $ Year ended December 31 2022 2021 $ $ 21,005 28,669 49,674 10,432 (1,678) 5,041 508 (90) (6) (141) $ 14,066 $ 9,674 11,965 21,639 4,544 (890) 2,692 216 362 (173) (801) 5,950 27.6 % 28.3 % 27.5 % 1 Includes one-time tax costs (benefits) associated with changes in uncertain tax positions. 2 Includes one-time tax costs (benefits) associated with changes in valuation allowances (2023 - $(84); 2022 - $(36); 2021 - $(624)). 3 The company’s effective tax rate is reflective of equity income reported on an after-tax basis as part of the “Total Income (Loss) Before Income Tax Expense,” in accordance with U.S. Generally Accepted Accounting Principles. Chevron’s share of its equity affiliates’ total income tax expense in 2023 was $1,724. The 2023 decrease in income tax expense of $5,893 is a result of the year-over-year decrease in total income before income tax expense, which is primarily due to lower upstream realizations and downstream margins. The company’s effective tax rate changed from 28.3 percent in 2022 to 27.6 percent in 2023. The change in effective tax rate is mainly due to mix effects resulting from the absolute level of earnings or losses and whether they arose in higher or lower tax rate jurisdictions. 85 Chevron Corporation 2023 Annual Report 85 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts The company records its deferred taxes on a tax-jurisdiction basis. The reported deferred tax balances are composed of the following: Deferred tax liabilities Properties, plant and equipment Investments and other Total deferred tax liabilities Deferred tax assets Foreign tax credits Asset retirement obligations/environmental reserves Employee benefits Deferred credits Tax loss carryforwards Other accrued liabilities Inventory Operating leases Miscellaneous Total deferred tax assets Deferred tax assets valuation allowance Total deferred taxes, net $ At December 31 2023 2022 $ 20,303 4,263 24,566 (13,560) (4,543) (1,785) (268) (3,492) (1,416) (126) (1,479) (3,652) (30,321) 20,416 18,295 4,492 22,787 (12,599) (4,518) (2,087) (446) (3,887) (746) (219) (1,134) (4,057) (29,693) 19,532 $ 14,661 $ 12,626 Deferred tax liabilities increased by $1,779 from year-end 2022, driven by an increase to properties, plant and equipment. Deferred tax assets increased by $628 from year-end 2022. This increase was primarily related to increases in foreign tax credits and other accrued liabilities, partially offset by decreases in tax loss carryforwards and employee benefits. The overall valuation allowance relates to deferred tax assets for U.S. foreign tax credit carryforwards, tax loss carryforwards and temporary differences. The valuation allowance reduces the deferred tax assets to amounts that are, in management’s assessment, more likely than not to be realized. At the end of 2023, the company had gross tax loss carryforwards of approximately $9,600 and tax credit carryforwards of approximately $260, primarily related to various international tax jurisdictions. Whereas some of these tax loss carryforwards do not have an expiration date, others expire at various times from 2024 through 2042. U.S. foreign tax credit carryforwards of $13,560 will expire between 2024 and 2033. At December 31, 2023 and 2022, deferred taxes were classified on the Consolidated Balance Sheet as follows: Deferred charges and other assets Noncurrent deferred income taxes Total deferred income taxes, net At December 31 2023 (4,169) 18,830 14,661 $ $ 2022 (4,505) 17,131 12,626 $ $ Income taxes, including U.S. state and foreign withholding taxes, are not accrued for unremitted earnings of international operations that have been or are intended to be reinvested indefinitely, or where no taxable temporary differences exist that are attributable to unremitted earnings from an investment in a foreign entity. The indefinite reinvestment assertion continues to apply for the purpose of determining deferred tax liabilities for U.S. state and foreign withholding tax purposes. It is not practicable to estimate the amount of state and foreign withholding taxes that might be payable on the possible remittance of earnings that are intended to be reinvested indefinitely. The company does not anticipate incurring significant additional taxes on remittances of earnings that are not indefinitely reinvested. Uncertain Income Tax Positions The company recognizes a tax benefit in the financial statements for an uncertain tax position only if management’s assessment is that the position is more likely than not (i.e., a likelihood greater than 50 percent) to be allowed by the tax jurisdiction based solely on the technical merits of the position. The term “tax position” in the accounting standards for income taxes refers to a position in a previously filed tax return or a position expected to be taken in a future tax return that is reflected in measuring current or deferred income tax assets and liabilities for interim or annual periods. The following table indicates the changes to the company’s unrecognized tax benefits for the years ended December 31, 2023, 2022 and 2021. The term “unrecognized tax benefits” in the accounting standards for income taxes refers to the 86 Chevron Corporation 2023 Annual Report 86 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts differences between a tax position taken or expected to be taken in a tax return and the benefit measured and recognized in the financial statements. Interest and penalties are not included. Balance at January 1 Foreign currency effects Additions based on tax positions taken in current year Additions for tax positions taken in prior years Reductions based on tax positions taken in current year Reductions for tax positions taken in prior years Settlements with taxing authorities in current year Reductions as a result of a lapse of the applicable statute of limitations Balance at December 31 2023 5,323 (27) 248 265 (104) (251) (2) — 5,452 $ $ 2022 5,288 (2) 30 234 — (117) (110) — $ 5,323 $ 2021 5,018 (1) 194 218 — (36) (18) (87) 5,288 $ $ Approximately 79 percent of the $5,452 of unrecognized tax benefits at December 31, 2023, would have an impact on the effective tax rate if subsequently recognized. Certain of these unrecognized tax benefits relate to tax carryforwards that may require a full valuation allowance at the time of any such recognition. The company and its subsidiaries are subject to income taxation and audits throughout the world. With certain exceptions, income tax examinations are completed through 2016 for the United States and 2007 for other major jurisdictions. The company engages in ongoing discussions with tax authorities regarding the resolution of tax matters in the various jurisdictions. Both the outcome of these tax matters and the timing of resolution and/or closure of the tax audits are highly uncertain. 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. On the Consolidated Statement of Income, the company reports interest and penalties related to liabilities for uncertain tax positions as “Income Tax Expense (Benefit).” As of December 31, 2023, accrued expense of $229 for anticipated interest and penalties was included on the Consolidated Balance Sheet, compared with accrued benefit of $112 as of year-end 2022. Income tax expense (benefit) associated with interest and penalties was $124, $152 and $19 in 2023, 2022 and 2021, respectively. Taxes Other Than on Income United States Import duties and other levies Property and other miscellaneous taxes Payroll taxes Taxes on production Total United States International Import duties and other levies Property and other miscellaneous taxes Payroll taxes Taxes on production Total International Total taxes other than on income 2023 (9) 818 286 801 1,896 72 2,004 121 127 2,324 4,220 $ $ Year ended December 31 2022 2021 $ $ 10 609 248 989 1,856 63 1,789 122 202 2,176 $ 4,032 $ 7 552 302 628 1,489 49 2,174 113 138 2,474 3,963 87 Chevron Corporation 2023 Annual Report 87 Upstream United States International Total Upstream Downstream United States International All Other United States International Total All Other Total United States Total International Total Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Note 18 Properties, Plant and Equipment1 Gross Investment at Cost At December 31 Net Investment Additions at Cost2 Depreciation Expense3 Year ended December 31 2023 2022 2021 2023 2022 2021 2023 2022 2021 2023 2022 2021 $117,955 $ 96,590 $ 93,393 $ 183,996 188,556 202,757 50,390 $ 37,031 $ 36,027 $20,408 $ 6,461 $ 4,520 $ 7,666 $ 5,012 $ 5,675 10,824 2,599 84,561 94,770 88,549 4,130 2,349 8,109 9,830 301,951 285,146 296,150 134,951 125,580 130,797 24,538 9,060 6,869 15,775 14,842 16,499 Total Downstream 39,593 38,083 35,022 16,643 16,053 14,066 31,192 8,401 29,802 8,281 26,888 8,134 13,521 3,122 12,827 3,226 10,766 3,300 1,623 237 1,860 2,742 246 2,988 4,390 147 4,537 4,402 154 4,556 4,729 144 4,873 1,991 34 2,025 1,931 27 1,958 2,078 20 2,098 311 15 326 230 12 242 153,537 130,794 192,544 196,991 125,010 211,035 65,902 87,717 51,789 91,802 48,871 98,090 22,342 4,382 9,433 2,857 5,206 2,590 8,910 8,416 6,172 10,147 6,798 11,127 $346,081 $327,785 $336,045 $ 153,619 $143,591 $146,961 $26,724 $12,290 $ 7,796 $ 17,326 $ 16,319 $ 17,925 543 234 777 143 7 150 931 301 913 311 833 296 1,232 1,224 1,129 313 6 319 247 6 253 290 7 297 1 Other than the United States and Australia, no other country accounted for 10 percent or more of the company’s net properties, plant and equipment (PP&E) in 2023. Australia had PP&E of $41,409, $44,012 and $46,687 in 2023, 2022 and 2021, respectively. Gross Investment at Cost and Additions at Cost for 2023 each include $10,487 associated with the PDC acquisition. 2 Net of dry hole expense related to prior years’ expenditures of $110, $177 and $35 in 2023, 2022 and 2021, respectively. 3 Depreciation expense includes accretion expense of $593, $560 and $616 in 2023, 2022 and 2021, respectively, and impairments and write-offs of $2,180, $950 and $414 in 2023, 2022 and 2021, respectively. Note 19 Short-Term Debt Commercial paper Notes payable to banks and others with originating terms of one year or less Current maturities of long-term debt* Current maturities of long-term finance leases Redeemable long-term obligations Subtotal Reclassified to long-term debt Total short-term debt $ At December 31 $ 2023 — 469 1,667 60 2,876 5,072 (4,543) 2022 — 328 2,699 45 2,942 6,014 (4,050) $ 529 $ 1,964 * Inclusive of unamortized premiums of $17 at December 31, 2023 and $5 at December 31, 2022. Redeemable long-term obligations consist primarily of tax-exempt variable-rate put bonds that are included as current liabilities because they become redeemable at the option of the bondholders during the year following the balance sheet date. The company may periodically enter into interest rate swaps on a portion of its short-term debt. At December 31, 2023, the company had no interest rate swaps on short-term debt. At December 31, 2023, the company had $8,050 in 364-day committed credit facilities with various major banks that enable the refinancing of short-term obligations on a long-term basis. The credit facilities allow the company to convert any amounts outstanding into a term loan for a period of up to one year. This supports commercial paper borrowing and can also be used for general corporate purposes. The company’s practice has been to continually replace expiring commitments with new commitments on substantially the same terms, maintaining levels management believes appropriate. Any borrowings under the facility would be unsecured indebtedness at interest rates based on the Secured Overnight Financing Rate (SOFR), or an average of base lending rates published by specified banks and on terms reflecting the company’s strong credit rating. No borrowings were outstanding under this facility at December 31, 2023. The company classified $4,543 and $4,050 of short-term debt as long-term at December 31, 2023 and 2022, respectively. Settlement of these obligations is not expected to require the use of working capital within one year, and the company has both the intent and the ability, as evidenced by committed credit facilities, to refinance them on a long-term basis. 88 Chevron Corporation 2023 Annual Report 88 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Note 20 Long-Term Debt Total long-term debt including finance lease liabilities at December 31, 2023, was $20,307. The company’s long-term debt outstanding at year-end 2023 and 2022 was as follows: Weighted Average Interest Rate (%)1 Range of Interest Rates (%)2 At December 31 2023 2022 Principal Principal Notes due 2024 Notes due 2025 Notes due 2026 Notes due 2027 Notes due 2028 Notes due 2029 Notes due 2030 Debentures due 2031 Debentures due 2032 Notes due 2040 Notes due 2041 Notes due 2043 Notes due 2044 Notes due 2047 Notes due 2049 Notes due 2050 Debentures due 2097 Bank loans due 2023 Medium-term notes, maturing from 2023 to 2038 Notes due 2023 Total including debt due within one year Debt due within one year Fair market value adjustment for debt acquired in the Noble acquisition Reclassified from short-term debt Unamortized discounts and debt issuance costs Finance lease liabilities3 Total long-term debt 1 Weighted-average interest rate at December 31, 2023. 2 Range of interest rates at December 31, 2023. 3 For details on finance lease liabilities, see Note 5 Lease Commitments. 3.291 1.724 2.379 8.416 2.763 6.599 $ 2.895 - 3.900 0.687 - 3.326 2.954 1.018 - 8.000 3.850 3.250 2.236 8.625 8.000 - 8.625 2.978 6.000 5.250 5.050 4.950 4.200 2.343 - 3.078 7.250 - 5.331 - 7.840 $ 1,650 4,000 2,250 2,000 600 500 1,500 102 183 293 397 330 222 187 237 1,750 60 — 20 — 16,281 (1,650) 578 4,543 (19) 574 1,650 4,000 2,250 2,000 600 500 1,500 102 183 293 397 330 222 187 237 1,750 60 91 23 2,600 18,975 (2,694) 664 4,050 (23) 403 $ 20,307 $ 21,375 Long-term debt excluding finance lease liabilities with a principal balance of $16,281 matures as follows: 2024 – $1,650; 2025 – $4,000; 2026 – $2,250; 2027 – $2,000; 2028 – $600; and after 2028 – $5,781. During the third quarter of 2023, the company assumed $1.5 billion of debt in conjunction with the PDC acquisition, including balances outstanding under the revolving credit facility, PDC’s 6.125% notes due 2024 (2024 notes) and PDC’s 5.75% notes due 2026 (2026 notes). The outstanding balances under the revolving credit facility and the 2024 notes were repaid during third quarter 2023. The company also irrevocably deposited sufficient U.S. Treasury securities with U.S. Bank Trust Company, N.A., as trustee, to fund the redemption of the 2026 notes, resulting in the indenture being satisfied and discharged. See Note 9 Fair Value Measurements for information concerning the fair value of the company’s long-term debt. Note 21 Accounting for Suspended Exploratory Wells The company continues to capitalize exploratory well costs after the completion of drilling when the well has found a sufficient quantity of reserves to justify completion as a producing well, and the business unit is making sufficient progress assessing the reserves and the economic and operating viability of the project. If either condition is not met or if the company obtains information that raises substantial doubt about the economic or operational viability of the project, the exploratory well would be assumed to be impaired, and its costs, net of any salvage value, would be charged to expense. 89 Chevron Corporation 2023 Annual Report 89 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts The following table indicates the changes to the company’s suspended exploratory well costs for the three years ended December 31, 2023: Beginning balance at January 1 Additions to capitalized exploratory well costs pending the determination of proved reserves Reclassifications to wells, facilities and equipment based on the determination of proved reserves Capitalized exploratory well costs charged to expense Ending balance at December 31 $ 2023 1,627 88 — (67) $ $ 2022 2,109 72 (481) (73) 2021 2,512 56 (425) (34) $ 1,648 $ 1,627 $ 2,109 The following table provides an aging of capitalized well costs and the number of projects for which exploratory well costs have been capitalized for a period greater than one year since the completion of drilling: Exploratory well costs capitalized for a period of one year or less Exploratory well costs capitalized for a period greater than one year Balance at December 31 2023 78 1,570 $ At December 31 2022 73 1,554 $ 2021 65 2,044 $ $ 1,648 $ 1,627 $ 2,109 Number of projects with exploratory well costs that have been capitalized for a period greater than one year* 13 12 15 * Certain projects have multiple wells or fields or both. Of the $1,570 of exploratory well costs capitalized for more than one year at December 31, 2023, $844 is related to seven projects that had drilling activities underway or firmly planned for the near future. The $726 balance is related to six projects in areas requiring a major capital expenditure before production could begin and for which additional drilling efforts were not underway or firmly planned for the near future. Additional drilling was not deemed necessary because the presence of hydrocarbons had already been established, and other activities were in process to enable a future decision on project development. The projects for the $726 referenced above had the following activities associated with assessing the reserves and the projects’ economic viability: (a) $311 (four projects) – undergoing front-end engineering and design with final investment decision expected within four years; (b) $415 (two projects) – development alternatives under review. While progress was being made on all 13 projects, the decision on the recognition of proved reserves under SEC rules in some cases may not occur for several years because of the complexity, scale and negotiations associated with the projects. Approximately three- quarters of these decisions are expected to occur in the next five years. The $1,570 of suspended well costs capitalized for a period greater than one year as of December 31, 2023, represents 71 exploratory wells in 13 projects. The tables below contain the aging of these costs on a well and project basis: Aging based on drilling completion date of individual wells: Amount Number of wells 2000-2009 2010-2014 2015-2022 Total Aging based on drilling completion date of last suspended well in project: 2008-2012 2013-2016 2017-2023 Total $ $ $ $ 263 1,121 186 1,570 14 49 8 71 Amount Number of projects 292 1,082 196 1,570 2 6 5 13 Note 22 Stock Options and Other Share-Based Compensation Compensation expense for stock options for 2023, 2022 and 2021 was $85 ($65 after tax), $60 ($46 after tax) and $60 ($47 after tax), respectively. In addition, compensation expense for stock appreciation rights, restricted stock, performance shares and restricted stock units resulted in a net benefit of $(100) ($(76) after tax) for 2023, primarily as a result of reductions in the fair value of outstanding liability-classified performance shares that are remeasured each reporting period. Compensation expense for stock appreciation rights, restricted stock, performance shares and restricted stock units was $1,013 ($770 after tax) and $701 ($554 after tax) for 2022 and 2021, respectively. No significant stock-based compensation cost was capitalized at December 31, 2023, or December 31, 2022. 90 Chevron Corporation 2023 Annual Report 90 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Cash received in payment for option exercises under all share-based payment arrangements for 2023, 2022 and 2021 was $263, $5,835 and $1,274, respectively. Actual tax benefits realized for the tax deductions from option exercises were $20, $216 and $(15) for 2023, 2022 and 2021, respectively. Cash paid to settle performance shares, restricted stock units and stock appreciation rights was $566, $556 and $163 for 2023, 2022 and 2021, respectively. On May 25, 2022, stockholders approved the Chevron 2022 Long-Term Incentive Plan (2022 LTIP). Awards under the 2022 LTIP may take the form of, but are not limited to, stock options, restricted stock, restricted stock units, stock appreciation rights, performance shares and non-stock grants. From May 2022 through May 2032, no more than 104 million shares may be issued under the 2022 LTIP. For awards issued on or after May 25, 2022, no more than 48 million of those shares may be issued in the form of full value awards such as share-settled restricted stock, share-settled restricted stock units and other share-settled awards that do not require full payment in cash or property for shares underlying such awards by the award recipient. For the major types of awards issued before January 1, 2017, the contractual terms vary between three years for the performance shares and restricted stock units, and 10 years for the stock options and stock appreciation rights. For awards issued after January 1, 2017, contractual terms vary between three years for the performance shares and special restricted stock units, five years for standard restricted stock units and 10 years for the stock options and stock appreciation rights. Commencing for grants issued in January 2023 and after, standard restricted stock units vest ratably on an annual basis over a three-year period. Forfeitures of performance shares, restricted stock units, and stock appreciation rights are recognized as they occur. Forfeitures of stock options are estimated using historical forfeiture data dating back to 1990. Fair Value and Assumptions The fair market values of stock options and stock appreciation rights granted in 2023, 2022 and 2021 were measured on the date of grant using the Black-Scholes option-pricing model with the following weighted- average assumptions: Expected term in years1 Volatility2 Risk-free interest rate based on zero coupon U.S. treasury note Dividend yield Weighted-average fair value per option granted 2023 6.4 32.5 % 3.43 % 3.5 % Year ended December 31 2022 6.9 31.3 % 1.79 % 5.0 % 2021 6.8 31.1 % 0.71 % 6.0 % $ 45.82 $ 23.56 $ 12.22 1 Expected term is based on historical exercise and post-vesting cancellation data. 2 Volatility rate is based on historical stock prices over an appropriate period, generally equal to the expected term. A summary of option activity during 2023 is presented below: Shares (Thousands) Weighted-Average Exercise Price Averaged Remaining Contractual Term (Years) Aggregate Intrinsic Value Outstanding at January 1, 2023 Granted Exercised Forfeited Outstanding at December 31, 2023 Exercisable at December 31, 2023 25,265 2,122 (2,538) (474) 24,375 18,438 $ $ $ $ $ $ 114.61 179.08 104.30 246.61 118.72 113.38 5.14 4.11 $ $ 934 791 The total intrinsic value (i.e., the difference between the exercise price and the market price) of options exercised during 2023, 2022 and 2021 was $167, $2,369 and $152, respectively. During this period, the company continued its practice of issuing treasury shares upon exercise of these awards. As of December 31, 2023, there was $181 of total unrecognized before-tax compensation cost related to nonvested share- based compensation arrangements granted under the plan. That cost is expected to be recognized over a weighted-average period of 1.9 years. At January 1, 2023, the number of LTIP performance shares outstanding was equivalent to 4,753,266 shares. During 2023, 1,291,262 performance shares were granted, 1,521,636 shares vested with cash proceeds distributed to recipients and 103,582 shares were forfeited. At December 31, 2023, there were 4,419,310 performance shares outstanding that are payable in cash. The fair value of the liability recorded for these instruments was $360 and was measured largely using the Monte Carlo simulation method. 91 Chevron Corporation 2023 Annual Report 91 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts At January 1, 2023, the number of restricted stock units outstanding was equivalent to 4,287,826 shares. During 2023, 1,739,120 restricted stock units were granted, 866,494 units vested with cash proceeds distributed to recipients and 100,210 units were forfeited. At December 31, 2023, there were 5,060,242 restricted stock units outstanding, of which 3,905,243 are payable in cash and 1,154,999 are payable in shares. The fair value of the liability recorded for the vested portion of these instruments payable in cash was $457, valued at the stock price as of December 31, 2023. In addition, outstanding stock appreciation rights that were granted under the LTIP totaled 652,493 equivalent shares as of December 31, 2023. The fair value of the liability recorded for the vested portion of these instruments was $32. Note 23 Employee Benefit Plans The company 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 (ERISA) 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 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 retirees share the costs. For the company’s main U.S. medical plan, the increase to the pre-Medicare company contribution for retiree medical coverage is limited to no more than 4 percent each year. Certain life insurance benefits are paid by the company. The company recognizes the overfunded or underfunded status of each of its defined benefit pension and OPEB plans as an asset or liability on the Consolidated Balance Sheet. The funded status of the company’s pension and OPEB plans for 2023 and 2022 follows: Change in Benefit Obligation Benefit obligation at January 1 Service cost Interest cost Plan participants’ contributions Plan amendments Actuarial (gain) loss Foreign currency exchange rate changes Benefits paid Divestitures/Acquisitions Curtailment Special termination costs Benefit obligation at December 31 Change in Plan Assets Fair value of plan assets at January 1 Actual return on plan assets Foreign currency exchange rate changes Employer contributions Plan participants’ contributions Benefits paid Fair value of plan assets at December 31 2023 Int’l. 3,354 58 193 3 28 17 180 (218) (14) 2 2 3,605 3,286 46 181 100 3 (218) 3,398 Pension Benefits $ $ U.S. 12,966 432 318 — 40 (2,753) — (1,290) — — — 9,713 9,919 (1,851) — 1,164 — (1,290) 7,942 2022 Int’l. 5,351 83 137 3 38 (1,559) (423) (276) — — — 3,354 4,950 (1,096) (453) 158 3 (276) 3,286 $ $ U.S. 9,713 342 448 — — 603 — (714) — — — 10,392 7,942 889 — 1,020 — (714) 9,137 $ Other Benefits 2023 2022 1,938 33 97 63 — 103 5 (222) — — — 2,017 — — — 159 63 (222) — $ 2,489 43 60 62 18 (509) (5) (220) — — — 1,938 — — — 158 62 (220) — Funded status at December 31 $ (1,255) $ (207) $ (1,771) $ (68) $ (2,017) $ (1,938) 92 Chevron Corporation 2023 Annual Report 92 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Amounts recognized on the Consolidated Balance Sheet for the company’s pension and OPEB plans at December 31, 2023 and 2022, include: Deferred charges and other assets Accrued liabilities Noncurrent employee benefit plans Net amount recognized at December 31 Pension Benefits U.S. 31 (145) (1,141) $ (1,255) $ $ $ 2023 Int’l. 703 (73) (837) (207) U.S. 26 (210) (1,587) $ (1,771) $ $ $ 2022 Int’l. 759 (62) (765) (68) $ 2023 — (154) (1,863) $ (2,017) Other Benefits 2022 — (152) (1,786) (1,938) $ $ For the year ended December 31, 2023, the increase in benefit obligations was primarily due to actuarial losses caused by lower discount rates used to value the obligations. For the year ended December 31, 2022, the decrease in benefit obligations was primarily due to actuarial gains caused by higher discount rates used to value the obligations and benefit payments paid to retirees in 2022. Amounts recognized on a before-tax basis in “Accumulated other comprehensive loss” for the company’s pension and OPEB plans were $3,792 and $3,446 at the end of 2023 and 2022, respectively. These amounts consisted of: Net actuarial loss Prior service (credit) costs Total recognized at December 31 Pension Benefits U.S. 3,161 37 3,198 $ $ $ $ 2023 Int’l. 823 126 949 U.S. 3,147 40 3,187 $ $ $ $ 2022 Int’l. 659 107 766 Other Benefits 2023 (266) (89) (355) $ $ 2022 (392) (115) (507) $ $ The accumulated benefit obligations for all U.S. and international pension plans were $9,284 and $3,378, respectively, at December 31, 2023, and $8,595 and $3,084, respectively, at December 31, 2022. Information for U.S. and international pension plans with an accumulated benefit obligation in excess of plan assets at December 31, 2023 and 2022, was: Projected benefit obligations Accumulated benefit obligations Fair value of plan assets $ U.S. 1,203 1,108 — $ Pension Benefits 2023 Int’l. 913 773 4 $ U.S. 1,322 1,135 — $ 2022 Int’l. 828 671 3 The components of net periodic benefit cost and amounts recognized in the Consolidated Statement of Comprehensive Income for 2023, 2022 and 2021 are shown in the table below: 93 Chevron Corporation 2023 Annual Report 93 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Net Periodic Benefit Cost Service cost Interest cost Expected return on plan assets Amortization of prior service costs (credits) Recognized actuarial losses Settlement losses Curtailment losses (gains) Special termination benefits Acquisition/Divestiture losses (gains) 2023 Int’l. $ 58 193 (204) 8 8 — 2 2 (2) U.S. $ 342 448 (557) 4 199 56 — — — Total net periodic benefit cost 492 65 Changes Recognized in Comprehensive Income Net actuarial (gain) loss during period Amortization of actuarial loss Prior service (credits) costs during period Amortization of prior service (costs) credits Total changes recognized in other comprehensive income Recognized in Net Periodic Benefit Cost and Other 270 (255) — (4) 172 (8) 28 (8) Pension Benefits $ 2022 Int’l. $ 83 137 (176) 6 15 (6) (5) — — $ U.S. 450 235 (596) 2 309 672 — — — 54 1,072 (257) (5) 38 (6) (725) (981) — (2) 2021 Int’l. 123 137 (171) 8 46 7 (1) — — 149 (408) (73) — (11) $ U.S. 432 318 (624) 2 218 363 — — — 709 (279) (581) 40 (2) Other Benefits 2023 2022 2021 $ 33 97 — (25) (19) — — — — 86 108 19 1 25 153 $ $ 43 60 — (27) 13 — — — — 89 43 53 — (27) 16 — — — — 85 (514) (13) 18 27 (111) (15) — 27 (482) (99) 11 184 (822) (230) (1,708) (492) Comprehensive Income $ 503 $ 249 $ (113) $ (176) $ (636) $ (343) $ 239 $ (393) $ (14) Assumptions The following weighted-average assumptions were used to determine benefit obligations and net periodic benefit costs for years ended December 31: 2023 Int’l. 2022 Int’l. 2021 Int’l. U.S. U.S. U.S. Other Benefits 2023 2022 2021 Pension Benefits Assumptions used to determine benefit obligations: Discount rate Rate of compensation increase 5.0 % 5.5 % 4.5 % 3.9 % 5.2 % 5.8 % 2.8 % 2.8 % 4.5 % 4.2 % 4.5 % 4.1 % 5.1 % N/A 5.3 % N/A 2.9 % N/A Assumptions used to determine net periodic benefit cost: Discount rate for service cost Discount rate for interest cost Expected return on plan assets Rate of compensation increase 5.2 % 5.8 % 5.0 % 5.8 % 7.0 % 6.1 % 4.5 % 4.2 % 3.6 % 2.8 % 3.0 % 2.4 % 2.8 % 2.8 % 1.9 % 2.4 % 6.6 % 3.9 % 6.5 % 3.5 % 4.5 % 4.1 % 4.5 % 4.0 % 5.4 % 5.2 % N/A N/A 3.1 % 2.4 % N/A N/A 3.0 % 2.1 % N/A N/A Expected Return on Plan Assets The company’s estimated long-term rates of return on pension assets are driven primarily by actual historical asset-class returns, an assessment of expected future performance, advice from external actuarial firms and the incorporation of specific asset-class risk factors. Asset allocations are periodically updated using pension plan asset/ liability studies, and the company’s estimated long-term rates of return are consistent with these studies. For 2023, the company used an expected long-term rate of return of 7.0 percent for U.S. pension plan assets, which account for 71 percent of the company’s pension plan assets at the beginning of the year. The market-related value of assets of the main U.S. pension plan used in the determination of pension expense was based on the market values in the three months preceding the year-end measurement date. Management considers the three-month time period long enough to minimize the effects of distortions from day-to-day market volatility and still be contemporaneous to the end of the year. For other plans, market value of assets as of year-end is used in calculating the pension expense. Discount Rate The discount rate assumptions used to determine the U.S. and international pension and OPEB plan obligations and expense reflect the rate at which benefits could be effectively settled, and are equal to the equivalent single rate resulting from yield curve analysis. This analysis considered the projected benefit payments specific to the company’s plans and the yields on high-quality bonds. The projected cash flows were discounted to the valuation date using the yield curve for the main U.S. pension and OPEB plans. The effective discount rates derived from this analysis were 5.0 percent, 5.2 percent, and 2.8 percent for 2023, 2022, and 2021, respectively, for both the main U.S. pension and OPEB plans. 94 Chevron Corporation 2023 Annual Report 94 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Other Benefit Assumptions For the measurement of accumulated postretirement benefit obligation at December 31, 2023, for the main U.S. OPEB plan, the assumed health care cost-trend rates start with 8.4 percent in 2024 and gradually decline to 4.5 percent for 2033 and beyond. For this measurement at December 31, 2022, the assumed health care cost-trend rates started with 6.6 percent in 2023 and gradually declined to 4.5 percent for 2032 and beyond. Plan Assets and Investment Strategy The fair value measurements of the company’s pension plans for 2023 and 2022 are as follows: At December 31, 2022 Equities U.S.1 International Collective Trusts/Mutual Funds2 Fixed Income Government Corporate Bank Loans Mortgage/Asset Backed Collective Trusts/Mutual Funds2 Mixed Funds3 Real Estate4 Alternative Investments Cash and Cash Equivalents Other5 Total Level 1 Level 2 Level 3 $ 1,358 $ 1,358 $ — $ — $ 946 1,695 110 680 45 1 1,616 — 1,184 — 200 107 946 4 — — — — — — — — 25 37 — — 110 680 45 1 — — — — — 15 — — — — — — — — — — — 54 U.S. NAV — — 1,691 — — — — 1,616 — 1,184 — 175 1 Total Level 1 Level 2 Level 3 $ 164 $ 120 87 164 $ — $ — $ — 120 — 6 — — 185 343 — 4 1,750 87 198 — 80 268 127 15 — — — 14 — — 69 — 58 328 — 4 — 73 — — 2 18 — — — — — — 38 — — 85 Int’l. NAV — — 81 — — — — 1,750 — 160 — 9 165 Total at December 31, 2022 $ 7,942 $ 2,370 $ 851 $ 54 $ 4,667 $ 3,286 $ 515 $ 483 $ 123 $ 2,165 At December 31, 2023 Equities U.S.1 International Collective Trusts/Mutual Funds2 Fixed Income Government Corporate Bank Loans Mortgage/Asset Backed Collective Trusts/Mutual Funds2 Mixed Funds3 Real Estate4 Alternative Investments Cash and Cash Equivalents Other5 $ 1,691 $ 1,689 $ 1,128 1,269 82 964 5 1 2,293 — 1,087 — 548 69 1,128 4 — — — — — — — — 12 (2) 1 $ — — 1 $ — — 82 964 5 1 — — — — — 14 — — — — — — — — — 56 — — 1,265 — — — — 2,293 — 1,087 — 536 1 $ 188 $ 124 95 188 $ — $ — $ — 124 — 6 — — 172 431 — 5 1,819 85 147 9 81 242 101 4 — — — 8 — — 74 — 71 427 — 5 — 77 24 9 1 11 — — — — — — — — — 81 — — 89 — — — — 1,819 — 123 — 6 150 Total at December 31, 2023 $ 9,137 $ 2,831 $ 1,067 $ 57 $ 5,182 $ 3,398 $ 505 $ 625 $ 81 $ 2,187 1 There were no investments in the company’s common stock at December 31, 2023 or December 31, 2022. 2 Collective Trusts/Mutual Funds for U.S. plans are entirely index funds; for International plans, they are mostly unit trust and index funds. 3 Mixed funds are composed of funds that invest in both equity and fixed-income instruments in order to diversify and lower risk. 4 The year-end valuations of the U.S. real estate assets are based on third-party appraisals that occur at least once a year for each property in the portfolio. 5 The “Other” asset class includes net payables for securities purchased but not yet settled (Level 1); dividends and interest- and tax-related receivables (Level 2); insurance contracts (Level 3); and investments in private-equity limited partnerships (NAV). 95 Chevron Corporation 2023 Annual Report 95 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts The effects of fair value measurements using significant unobservable inputs on changes in Level 3 plan assets are outlined below: Total at December 31, 2021 Actual Return on Plan Assets: Assets held at the reporting date Assets sold during the period Purchases, Sales and Settlements Transfers in and/or out of Level 3 Total at December 31, 2022 Actual Return on Plan Assets: Assets held at the reporting date Assets sold during the period Purchases, Sales and Settlements Transfers in and/or out of Level 3 Total at December 31, 2023 $ $ $ Equity U.S. International Real Estate Other — $ 1 $ 42 $ 161 $ Total 204 (19) (4) (4) — (18) — (4) — — — — — — $ 1 — — — 1 $ (1) — — — — — — — — — $ $ — (4) — — 38 5 — — (43) $ 139 $ 177 — (2) — — 6 (2) — (43) — $ 137 $ 138 The primary investment objectives of the pension plans are to achieve the highest rate of total return within prudent levels of risk and liquidity, to diversify and mitigate potential downside risk associated with the investments, and to provide adequate liquidity for benefit payments and portfolio management. The company’s U.S. and U.K. pension plans comprise 95 percent of the total pension assets. Both the U.S. and U.K. plans have an Investment Committee that regularly meets during the year to review the asset holdings and their returns. To assess the plans’ investment performance, long-term asset allocation policy benchmarks have been established. For the primary U.S. pension plan, the company’s Investment Committee has established the following approved asset allocation ranges: Equities 35–65 percent, Fixed Income 25–45 percent, Real Estate 5–25 percent, Alternative Investments 0–5 percent and Cash 0–15 percent. For the U.K. pension plan, the U.K. Board of Trustees has established the following asset allocation guidelines: Equities 5–15 percent, Fixed Income 63–93 percent, Real Estate 5–15 percent, and Cash 0– 7 percent. The other significant international pension plans also have established maximum and minimum asset allocation ranges that vary by plan. Actual asset allocation within approved ranges is based on a variety of factors, including market conditions and liquidity constraints. To mitigate concentration and other risks, assets are invested across multiple asset classes with active investment managers and passive index funds. The company does not prefund its OPEB obligations. Cash Contributions and Benefit Payments In 2023, the company contributed $1,020 and $100 to its U.S. and international pension plans, respectively. In 2024, the company expects contributions to be approximately $750 to its U.S. plans and $100 to its international pension plans. Actual contribution amounts are dependent upon investment returns, changes in pension obligations, regulatory environments, tax law changes and other economic factors. Additional funding may ultimately be required if investment returns are insufficient to offset increases in plan obligations. The company anticipates paying OPEB benefits of approximately $150 in 2024; $159 was paid in 2023. The following benefit payments, which include estimated future service, are expected to be paid by the company in the next 10 years: 2024 2025 2026 2027 2028 2029-2033 $ Pension Benefits $ U.S. 886 912 904 901 877 4,248 $ Int’l. 216 210 222 228 240 1,266 Other Benefits 154 151 149 147 146 716 Employee Savings Investment Plan Eligible employees of Chevron and certain of its subsidiaries participate in the Chevron Employee Savings Investment Plan (ESIP). Compensation expense for the ESIP totaled $320, $283 and $252 in 2023, 2022 and 2021, respectively. 96 Chevron Corporation 2023 Annual Report 96 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Benefit Plan Trusts Prior to its acquisition by Chevron, Texaco established a benefit plan trust for funding obligations under some of its benefit plans. At year-end 2023, the trust contained 14.2 million shares of Chevron treasury stock. The trust will sell the shares or use the dividends from the shares to pay benefits only to the extent that the company does not pay such benefits. The company intends to continue to pay its obligations under the benefit plans. The trustee will vote the shares held in the trust as instructed by the trust’s beneficiaries. The shares held in the trust are not considered outstanding for earnings-per-share purposes until distributed or sold by the trust in payment of benefit obligations. Employee Incentive Plans The Chevron Incentive Plan is an annual cash bonus plan for eligible employees that links awards to corporate and individual performance in the prior year. Charges to expense for cash bonuses were $809, $1,169 and $1,165 in 2023, 2022 and 2021, respectively. Chevron also has the LTIP for officers and other regular salaried employees of the company and its subsidiaries who hold positions of significant responsibility. Awards under the LTIP consist of stock options and other share-based compensation that are described in Note 22 Stock Options and Other Share-Based Compensation. Note 24 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 17 Taxes for a discussion of the periods for which tax returns have been audited for the company’s major tax jurisdictions and a discussion for all tax jurisdictions of the differences between the amount of tax benefits recognized in the financial statements and the amount taken or expected to be taken in a tax return. 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 provisions have been made for all years under examination or subject to future examination. Guarantees The company has one guarantee to an equity affiliate totaling $135. This guarantee is associated with certain payments under a terminal use agreement entered into by an equity affiliate. Over the approximate 4-year remaining term of this guarantee, the maximum guarantee amount will be reduced as certain fees are paid by the affiliate. There are numerous cross-indemnity agreements with the affiliate and the other partners to permit recovery of amounts paid under the guarantee. Chevron has recorded no liability for this guarantee. Indemnifications The company often includes standard indemnification provisions in its arrangements with its partners, suppliers and vendors in the ordinary course of business, the terms of which range in duration and sometimes are not limited. The company may be obligated to indemnify such parties for losses or claims suffered or incurred in connection with its service or other claims made against such parties. 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. The aggregate amounts of required payments under throughput and take-or-pay agreements are: 2024 – $909; 2025 – $1,086; 2026 – $1,141; 2027 – $1,193; 2028 – $1,183; after 2028 – $7,553. The aggregate amount of required payments for other unconditional purchase obligations are: 2024 – $589; 2025 – $451; 2026 – $484; 2027 – $604; 2028 – $273; after 2028 – $1,078. A portion of these commitments may ultimately be shared with project partners. Total payments under the agreements were $1,420 in 2023, $1,866 in 2022 and $861 in 2021. 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. 97 Chevron Corporation 2023 Annual Report 97 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts 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. Chevron’s environmental reserve as of December 31, 2023, was $936. Included in this balance was $232 related to remediation activities at sites for which the company had been identified as a potentially responsible party under the provisions of the U.S. federal Superfund law which provide for joint and several liability for all responsible parties. Any future actions by regulatory agencies to require Chevron to assume other potentially responsible parties’ costs at designated hazardous waste sites are not expected to have a material effect on the company’s results of operations, consolidated financial position or liquidity. Of the remaining year-end 2023 environmental reserves balance of $704, $389 is related to the company’s U.S. downstream operations, $55 to its international downstream operations, and $260 to its upstream operations. Liabilities at all sites were primarily associated with the company’s plans and activities to remediate soil or groundwater contamination or both. The company manages environmental liabilities under specific sets of regulatory requirements, which in the United States include the Resource Conservation and Recovery Act and various state and local regulations. No single remediation site at year-end 2023 had a recorded liability that was material to the company’s results of operations, consolidated financial position or liquidity. Refer to Note 25 Asset Retirement Obligations for a discussion of the company’s asset retirement obligations. 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. In addition, some assets are sold along with their related liabilities and in certain instances, such transferred obligations have reverted and may in the future revert to the company and result in losses that could be significant. In fourth quarter 2023, the company recognized an after-tax loss of $1,950 related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico, as companies that purchased these assets have filed for protection under Chapter 11 of the U.S. Bankruptcy Code, and we believe it is now probable and estimable that a portion of these obligations will revert to the company. Note 25 Asset Retirement Obligations The company records the fair value of a liability for an asset retirement obligation (ARO) both as an asset and a liability when there is a legal obligation associated with the retirement of a tangible long-lived asset and the liability can be reasonably estimated. The legal obligation to perform the asset retirement activity is unconditional, even though uncertainty may exist about the timing and/or method of settlement that may be beyond the company’s control. This uncertainty about the timing and/or method of settlement is factored into the measurement of the liability when sufficient information exists to reasonably estimate fair value. Recognition of the ARO includes: (1) the present value of a liability and offsetting asset, (2) the subsequent accretion of that liability and depreciation of the asset, and (3) the periodic review of the ARO liability estimates and discount rates. AROs are primarily recorded for the company’s crude oil and natural gas producing assets. No significant AROs associated with any legal obligations to retire downstream long-lived assets have been recognized, as indeterminate settlement dates for the asset retirements prevent estimation of the fair value of the associated ARO. The company performs periodic 98 Chevron Corporation 2023 Annual Report 98 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts reviews of its downstream long-lived assets for any changes in facts and circumstances that might require recognition of a retirement obligation. The following table indicates the changes to the company’s before-tax asset retirement obligations in 2023, 2022 and 2021: Balance at January 1 Liabilities assumed in the PDC acquisition Liabilities incurred Liabilities settled Accretion expense Revisions in estimated cash flows Balance at December 31 2023 12,701 220 183 (1,565) 593 1,701 13,833 $ $ 2022 12,808 — 9 (1,281) 560 605 $ 12,701 $ 2021 13,616 — 31 (1,887) 616 432 12,808 $ $ In the table above, the amount associated with “Revisions in estimated cash flows” primarily reflects increased cost estimates and scope changes to decommission wells, equipment and facilities. The long-term portion of the $13,833 balance at the end of 2023 was $12,122. Note 26 Revenue Revenue from contracts with customers is presented in “Sales and other operating revenues” along with some activity that is accounted for outside the scope of Accounting Standard Codification (ASC) 606, which is not material to this line, on the Consolidated Statement of Income. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another (including buy/sell arrangements) are combined and recorded on a net basis and reported in “Purchased crude oil and products” on the Consolidated Statement of Income. Refer to Note 14 Operating Segments and Geographic Data for additional information on the company’s segmentation of revenue. Receivables related to revenue from contracts with customers are included in “Accounts and notes receivable” on the Consolidated Balance Sheet, net of the allowance for doubtful accounts. The net balance of these receivables was $13,641 and $14,219 at December 31, 2023 and 2022, respectively. Other items included in “Accounts and notes receivable” 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. Contract assets and related costs are reflected in “Prepaid expenses and other current assets” and contract liabilities are reflected in “Accrued liabilities” and “Deferred credits and other noncurrent obligations” on the Consolidated Balance Sheet. Amounts for these items are not material to the company’s financial position. Note 27 Other Financial Information Earnings in 2023 included after-tax gains of approximately $143 relating to the sale of certain properties. Of this amount, approximately $33 and $110 related to downstream and upstream, respectively. Earnings in 2022 included after-tax gains of approximately $390 relating to the sale of certain properties, of which approximately $90 and $300 related to downstream and upstream assets, respectively. Earnings in 2021 included after-tax gains of approximately $785 relating to the sale of certain properties, of which approximately $30 and $755 related to downstream and upstream assets, respectively. Earnings in 2023 included after-tax charges of approximately $1,950 for abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico and $1,765 for upstream impairments, mainly in California, and several tax items with a net benefit of $655. Earnings in 2022 included after-tax charges of approximately $1,075 for impairments and other asset write-offs related to upstream, $600 for an early contract termination in upstream, and $271 for pension settlement costs. Earnings in 2021 included after-tax charges of approximately $519 for pension settlement costs, $260 for early retirement of debt, $120 relating to upstream remediation and $110 relating to downstream legal reserves. 99 Chevron Corporation 2023 Annual Report 99 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Other financial information is as follows: Total financing interest and debt costs Less: Capitalized interest Interest and debt expense Research and development expenses Excess of replacement cost over the carrying value of inventories (LIFO method) LIFO profits (losses) on inventory drawdowns included in earnings Foreign currency effects* 2023 617 148 469 320 6,455 14 (224) $ $ $ $ $ $ $ $ $ $ $ $ Year ended December 31 2022 630 114 516 268 9,061 122 669 $ $ $ $ $ $ 2021 775 63 712 268 5,588 35 306 * Includes $(11), $253 and $180 in 2023, 2022 and 2021, respectively, for the company’s share of equity affiliates’ foreign currency effects. The company has $4,722 in goodwill on the Consolidated Balance Sheet, of which $4,370 is in the upstream segment primarily related to the 2005 acquisition of Unocal and $352 is in the downstream segment. The company tested this goodwill for impairment during 2023, and no impairment was required. Note 28 Financial Instruments - Credit Losses Chevron’s expected credit loss allowance balance was $641 and $1,009 at December 31, 2023 and December 31, 2022, respectively, 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 $17,640 at December 31, 2023, 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 $3,864 at December 31, 2023, 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. Loans to equity affiliates and non-equity investees are also considered non-trade and associated allowances of $219 and $560 at December 31, 2023 and December 31, 2022, respectively, are included within “Investments and advances” on the Consolidated Balance Sheet. 100 Chevron Corporation 2023 Annual Report 100 Notes to the Consolidated Financial Statements Millions of dollars, except per-share amounts Note 29 Acquisition of PDC Energy, Inc. On August 7, 2023, the company acquired PDC Energy, Inc. (PDC), an independent exploration and production company with operations in the Denver-Julesburg Basin in Colorado and the Delaware Basin in west Texas. The aggregate purchase price of PDC was $6,520, with approximately 41 million shares of Chevron common stock issued as consideration in the transaction. The shares represented approximately two percent of the shares of Chevron common stock outstanding immediately after the transaction closed on August 7, 2023. The acquisition was accounted for as a business combination under ASC 805, which requires assets acquired and liabilities assumed to be measured at their acquisition date fair value. Provisional fair value measurements were made for acquired assets and liabilities, and adjustments to those measurements may be made in subsequent periods, up to one year from the date of acquisition, as information necessary to complete the analysis is obtained. Oil and gas properties were valued using a discounted cash flow approach that incorporated internally generated price assumptions and production profiles together with appropriate operating cost and development cost assumptions. Debt assumed in the acquisition was valued based on observable market prices for PDC’s debt. As a result of measuring the assets acquired and the liabilities assumed at fair value, there was no goodwill or bargain purchase recognized. The following table summarizes the provisional fair values assigned to assets acquired and liabilities assumed: Current assets Properties, plant and equipment Other assets Total assets acquired Current liabilities Long-term debt Deferred income tax Other liabilities Total liabilities assumed Purchase Price At August 7, 2023 630 10,487 118 11,235 1,376 1,473 1,397 469 4,715 6,520 $ $ Pro forma financial information is not disclosed as the acquisition was deemed not to have a material impact on the company’s results of operations. Note 30 Agreement to Acquire Hess Corporation On October 23, 2023, Chevron Corporation announced it had entered into a definitive agreement with Hess Corporation (Hess) to acquire all of its outstanding shares in an all-stock transaction, valued at approximately $53,000, pursuant to which Hess stockholders will receive 1.0250 shares of Chevron common stock for each Hess share. The transaction was unanimously approved by the Boards of Directors of both companies and is anticipated to close around the middle of 2024. The acquisition is subject to Hess stockholder approval. It is also subject to regulatory approvals and other closing conditions. See Item 1A. Risk Factors of the company's Annual Report on Form 10-K for a discussion of risks related to the Hess acquisition. 101 Chevron Corporation 2023 Annual Report 101 Supplemental Information on Oil and Gas Producing Activities - Unaudited In accordance with FASB and SEC disclosure requirements for oil and gas producing activities, this section provides supplemental information on oil and gas exploration and producing activities of the company in seven separate tables. Tables I through IV provide historical cost information pertaining to costs incurred in exploration, property acquisitions and development, capitalized costs and results of operations. Tables V through VII present information on the company’s estimated net proved reserve quantities, standardized measure of estimated discounted future net cash flows related to Table I - Costs Incurred in Exploration, Property Acquisitions and Development1 Consolidated Companies Affiliated Companies Africa Asia Australia Europe Total TCO Other Millions of dollars Year Ended December 31, 2023 Exploration Wells Geological and geophysical Other $ Total exploration Property acquisitions2 Proved - Other Unproved - Other Total property acquisitions Development3 U.S. Other Americas $ 280 84 50 414 10,123 504 10,627 9,645 $ 92 49 104 245 — 1 1 986 Total Costs Incurred4 $ 20,686 $ 1,232 $ $ $ $ Year Ended December 31, 2022 Exploration Wells Geological and geophysical Other Total exploration Property acquisitions2 Proved - Other Unproved - Other Total property acquisitions Development3 Total Costs Incurred4 Year Ended December 31, 2021 Exploration Wells Geological and geophysical Other Total exploration Property acquisitions2 Proved - Other Unproved - Other Total property acquisitions Development3 $ 239 98 53 390 18 104 122 6,221 $ 84 28 72 184 — 78 78 863 $ 184 67 80 331 98 13 111 4,360 31 58 80 169 — 16 16 640 825 $ $ $ $ $ 36 83 57 176 — — — 784 960 78 110 75 263 63 73 136 21 $ 5 40 39 84 15 — 15 $ $ $ $ $ 111 — 15 126 — 3 3 619 748 34 — 30 64 13 — 13 649 726 36 — 14 50 53 — 53 $ $ $ 11 — 32 43 — — — 822 865 4 1 27 32 — — — 719 751 $ 47 — — — 4 — — — 64 68 2 — — — 35 37 1 — — — 44 45 6,733 $ 1,125 $ 420 $ — $ — 4 530 216 262 1,008 10,123 508 10,631 12,920 $ — $ — — — — — — 2,278 $ 24,559 $ 2,278 $ — $ — 2 439 237 259 935 94 255 349 $ — $ — — — — — — 8,508 2,429 $ 9,792 $ 2,429 $ — $ 22 25 — $ — 1 256 187 239 682 166 29 195 $ — $ — — — — — — Total Costs Incurred4 $ 4,802 $ 383 482 $ 545 648 $ 526 573 $ 6,498 2,442 $ 7,375 $ 2,442 $ 1 Includes costs incurred whether capitalized or expensed. Excludes general support equipment expenditures. Includes capitalized amounts related to asset retirement obligations. See Note 25 Asset Retirement Obligations. 2 Includes wells, equipment and facilities associated with proved reserves. Does not include properties acquired in nonmonetary transactions. 3 Includes $208, $186 and $298 of costs incurred on major capital projects prior to assignment of proved reserves for consolidated companies in 2023, 2022, and 2021, respectively. 4 Reconciliation of consolidated companies total cost incurred to Upstream Capex - $ billions: 2023 2022 2021 Total cost incurred by Consolidated Companies PDC Energy, Inc. (PDC) acquisition Expensed exploration costs Non-oil and gas activities ARO reduction/(build) $ 24.6 (10.5) (0.5) 1.4 (1.3) $ 9.8 — (0.5) 0.6 (0.3) $ 7.4 — (0.4) (Geological and geophysical and other exploration costs) 0.2 (Primarily LNG and transportation activities) (0.4) Upstream Capex $ 13.7 $ 9.6 $ 6.8 Reference page 48 Upstream Capex 102 Chevron Corporation 2023 Annual Report 102 — — — — — — — 86 86 — — — — — — — 34 34 — — — — — — — 27 27 Supplemental Information on Oil and Gas Producing Activities - Unaudited proved reserves, and changes in estimated discounted future net cash flows. The amounts for consolidated companies are organized by geographic areas including the United States, Other Americas, Africa, Asia, Australia/Oceania and Europe. Amounts for affiliated companies include Chevron’s equity interests in Tengizchevroil (TCO) in the Republic of Kazakhstan and in other affiliates, principally in Angola. Refer to Note 15 Investments and Advances for a discussion of the company’s major equity affiliates. Table II - Capitalized Costs Related to Oil and Gas Producing Activities Gross Capitalized Costs 116,214 26,531 50,931 Millions of dollars At December 31, 2023 Unproved properties Proved properties and related producing assets Support equipment Deferred exploratory wells Other uncompleted projects Unproved properties valuation Proved producing properties – Depreciation and depletion Support equipment depreciation Accumulated provisions Net Capitalized Costs At December 31, 2022 Unproved properties Proved properties and related producing assets Support equipment Deferred exploratory wells Other uncompleted projects Gross Capitalized Costs Unproved properties valuation Proved producing properties – Depreciation and depletion Support equipment depreciation Accumulated provisions Net Capitalized Costs At December 31, 2021 Unproved properties Proved properties and related producing assets Support equipment Deferred exploratory wells Other uncompleted projects Gross Capitalized Costs Unproved properties valuation Proved producing properties – Depreciation and depletion Support equipment depreciation Accumulated provisions Net Capitalized Costs U.S. Other Americas Africa Asia Australia Europe Total TCO Other Consolidated Companies Affiliated Companies $ 2,541 $ 1,666 $ 265 $ 536 $ 1,882 $ — $ 6,890 $ 108 $ — 100,680 2,121 — 10,872 23,867 191 73 734 47,635 1,555 205 1,271 168 1,214 183 65,055 1,295 66,518 14,009 155 39,921 1,202 15,378 41,306 30,387 688 178 1,121 32,910 533 18,941 529 20,003 23,842 19,118 1,119 1,469 47,430 5 12,082 5,478 17,565 2,228 — 74 52 2,354 — 834 — 834 228,639 23,673 1,649 15,519 276,370 2,103 150,842 8,659 161,604 $ $ $ $ $ $ $ $ 49,696 $ 11,153 $ 9,625 $ 12,907 $ 29,865 $ 1,520 $ 114,766 2,541 $ 2,176 $ 265 $ 970 $ 1,987 $ — $ 7,939 83,525 2,146 43 8,213 96,468 22,867 194 56 610 46,950 1,543 116 1,095 25,903 49,969 178 1,589 146 58,253 1,302 59,733 12,974 155 38,543 1,166 14,718 39,855 31,179 696 40 914 33,799 969 19,051 500 20,520 22,926 19,107 1,119 1,869 47,008 110 10,689 4,644 15,443 2,186 — 74 30 2,290 — 720 — 720 209,633 23,686 1,448 12,731 255,437 2,992 140,230 7,767 150,989 36,735 $ 11,185 $ 10,114 $ 13,279 $ 31,565 $ 1,570 $ 104,448 3,302 $ 2,382 $ 191 $ 982 $ 1,987 $ — $ 8,844 80,821 2,134 328 6,581 93,166 22,031 198 121 431 47,030 1,096 196 1,096 25,163 49,609 289 1,536 131 55,064 1,681 57,034 11,745 155 37,657 778 13,436 38,566 46,379 906 246 903 49,416 855 33,300 623 34,778 22,235 18,918 1,144 1,586 45,870 110 8,920 3,724 12,754 2,156 — 74 24 2,254 — 602 — 602 220,652 23,252 2,109 10,621 265,478 2,921 147,288 6,961 157,170 23,139 673 — 15,438 39,358 77 10,279 478 10,834 28,524 $ 1,609 — — 130 1,739 — 866 — 866 873 108 $ — 15,793 646 — 20,590 37,137 74 9,441 424 9,939 27,198 $ 1,552 — — 54 1,606 — 654 — 654 952 108 $ — 14,635 582 — 19,382 34,707 70 8,461 362 8,893 1,558 — — 31 1,589 — 514 — 514 $ 36,132 $ 11,727 $ 11,043 $ 14,638 $ 33,116 $ 1,652 $ 108,308 $ 25,814 $ 1,075 103 Chevron Corporation 2023 Annual Report 103 Supplemental Information on Oil and Gas Producing Activities - Unaudited Table III - Results of Operations for Oil and Gas Producing Activities1 The company’s results of operations from oil and gas producing activities for the years 2023, 2022 and 2021 are shown in the following table. Net income (loss) from exploration and production activities as reported on page 79 reflects income taxes computed on an effective rate basis. Income taxes in Table III are based on statutory tax rates, reflecting allowable deductions and tax credits. Interest income and expense are excluded from the results reported in Table III and from the upstream net income amounts on page 79. Other Americas U.S. Africa Asia Australia Europe Total TCO Other Consolidated Companies Affiliated Companies Millions of dollars Year Ended December 31, 2023 Revenues from net production Sales Transfers Total Production expenses excluding taxes Taxes other than on income Proved producing properties: Depreciation and depletion Accretion expense2 Exploration expenses Unproved properties valuation Other income (loss)3 Results before income taxes Income tax (expense) benefit $ 6,658 $ 15,948 724 $ 515 $ 3,243 5,979 3,309 $ 2,151 6,780 $ 4,753 368 $ — 22,606 (5,459) (1,222) (7,133) (176) (439) (71) (2,673) 5,433 (1,195) 3,967 (1,000) (69) (1,042) (25) (274) (68) (69) 1,420 (389) 6,494 (1,619) (142) (1,414) (126) (151) (44) 45 3,043 (832) 5,460 (1,103) (27) (1,114) (120) (33) — 89 3,152 (1,576) 11,533 (556) (256) (2,561) (92) (32) — (52) 7,984 (2,776) 368 (64) (4) (115) (8) (5) — 4 176 (196) 18,354 32,074 50,428 (9,801) (1,720) (13,379) (547) (934) (183) (2,656) 21,208 (6,964) $ 6,831 $ — 6,831 (602) (675) (895) (7) — — 32 4,684 (1,408) 891 — 891 (44) — (173) (3) — — (185) 486 24 510 Results of Producing Operations $ 4,238 $ 1,031 $ 2,211 $ 1,576 $ 5,208 $ (20) $ 14,244 $ 3,276 $ Year Ended December 31, 2022 Revenues from net production Sales Transfers Total Production expenses excluding taxes Taxes other than on income Proved producing properties: Depreciation and depletion Accretion expense2 Exploration expenses Unproved properties valuation Other income (loss)3 Results before income taxes Income tax (expense) benefit $ 9,656 $ 18,494 1,172 $ 3,801 2,192 $ 6,829 3,963 $ 2,477 7,302 $ 7,535 564 $ — 28,150 (4,752) (1,286) (4,612) (167) (402) (38) 92 16,985 (3,736) 4,973 (1,071) (85) (1,223) (22) (169) (250) 21 2,174 (670) 9,021 (1,515) (170) (1,943) (147) (243) (15) 300 5,288 (3,114) 6,440 (1,316) (52) (1,765) (87) (92) (124) 180 3,184 (1,742) 14,837 (614) (352) (2,520) (77) (52) — 51 11,273 (3,185) 564 (60) (4) (117) (11) (2) — 105 475 (193) 24,849 39,136 63,985 (9,328) (1,949) (12,180) (511) (960) (427) 749 39,379 (12,640) $ 8,304 $ 2,080 — — 8,304 (485) (933) 2,080 (47) — (964) (6) — — 195 (164) (3) — — (27) 6,111 (1,835) 1,839 12 Results of Producing Operations $ 13,249 $ 1,504 $ 2,174 $ 1,442 $ 8,088 $ 282 $ 26,739 $ 4,276 $ 1,851 1 The value of owned production consumed in operations as fuel has been eliminated from revenues and production expenses, and the related volumes have been deducted from net production in calculating the unit average sales price and production cost. This has no effect on the results of producing operations. 2 Represents accretion of ARO liability. Refer to Note 25 Asset Retirement Obligations. 3 Includes foreign currency gains and losses, gains and losses on property dispositions and other miscellaneous income and expenses. 2023 also includes a loss related to abandonment and decommissioning obligations from previously sold oil and gas production assets in the U.S. Gulf of Mexico. 104 Chevron Corporation 2023 Annual Report 104 Supplemental Information on Oil and Gas Producing Activities - Unaudited Table III - Results of Operations for Oil and Gas Producing Activities1, continued Millions of dollars Year Ended December 31, 2021 Revenues from net production Sales Transfers Total Production expenses excluding taxes Taxes other than on income Proved producing properties: Depreciation and depletion Accretion expense2 Exploration expenses Unproved properties valuation Other income (loss)3 Results before income taxes Income tax (expense) benefit Other Americas U.S. Africa Asia Australia Europe Total TCO Other Consolidated Companies Affiliated Companies $ 6,708 $ 12,653 19,361 (4,325) (928) (5,184) (197) (221) (43) 990 9,453 (2,108) 888 $ 3,029 3,917 (974) (73) (1,470) (22) (132) (95) (33) 1,118 (318) 1,283 $ 5,232 5,127 $ 3,725 $ 3,019 3,858 371 $ — 6,515 (1,414) (88) (1,797) (144) (83) (5) (72) 2,912 (1,239) 8,146 (2,156) (15) (3,324) (113) (20) — (124) 2,394 (1,326) 7,583 (548) (260) (2,409) (75) (47) — 26 4,270 (1,314) 371 (67) (4) (105) (13) (35) — 2 149 (38) 18,102 27,791 45,893 (9,484) (1,368) (14,289) (564) (538) (143) 789 20,296 (6,343) $ 5,564 $ — 5,564 (487) (359) (947) (7) — — 98 3,862 (1,161) 868 — 868 (20) — (215) (3) — — (332) 298 29 327 Results of Producing Operations $ 7,345 $ 800 $ 1,673 $ 1,068 $ 2,956 $ 111 $ 13,953 $ 2,701 $ 1 The value of owned production consumed in operations as fuel has been eliminated from revenues and production expenses, and the related volumes have been deducted from net production in calculating the unit average sales price and production cost. This has no effect on the results of producing operations. 2 Represents accretion of ARO liability. Refer to Note 25 Asset Retirement Obligations. 3 Includes foreign currency gains and losses, gains and losses on property dispositions and other miscellaneous income and expenses. Table IV - Results of Operations for Oil and Gas Producing Activities - Unit Prices and Costs1 Other Americas U.S. Africa Asia Australia Europe Total TCO Other Consolidated Companies Affiliated Companies Year Ended December 31, 2023 Average sales prices Crude, per barrel Natural gas liquids, per barrel Natural gas, per thousand cubic feet Average production costs, per barrel2 Year Ended December 31, 2022 Average sales prices Crude, per barrel Natural gas liquids, per barrel Natural gas, per thousand cubic feet Average production costs, per barrel2 Year Ended December 31, 2021 Average sales prices Crude, per barrel Natural gas liquids, per barrel Natural gas, per thousand cubic feet Average production costs, per barrel2 $ $ $ 74.36 $ 20.01 1.65 11.19 72.85 $ 29.00 2.63 16.13 72.86 $ 27.80 3.95 16.35 70.05 $ 78.93 $ — 4.10 7.82 51.00 11.43 3.41 83.00 $ — 12.00 12.80 91.88 $ 33.76 5.53 11.10 90.04 $ 100.82 $ 34.33 5.15 17.00 35.43 9.00 14.43 85.64 $ 98.00 $ 102.00 $ — 15.34 3.79 — 27.00 12.00 — 4.02 8.49 65.16 $ 28.54 3.02 10.45 62.84 $ 26.33 3.39 13.91 72.38 $ 39.40 2.66 12.40 63.71 $ 71.40 $ — 4.10 10.52 30.00 8.22 3.65 69.20 $ — 12.50 13.40 73.76 20.79 6.01 10.23 92.92 34.31 8.85 10.16 66.14 29.10 5.08 9.90 $ $ $ 66.44 $ 9.43 1.31 4.47 — 45.33 10.34 2.94 85.71 $ 20.83 0.95 3.85 — 65.33 29.44 3.36 58.31 $ 27.13 0.47 4.09 — 66.00 9.71 1.25 1 The value of owned production consumed in operations as fuel has been eliminated from revenues and production expenses, and the related volumes have been deducted from net production in calculating the unit average sales price and production cost. This has no effect on the results of producing operations. 2 Natural gas converted to oil-equivalent gas (OEG) barrels at a rate of 6 MCF = 1 OEG barrel. 105 Chevron Corporation 2023 Annual Report 105 Supplemental Information on Oil and Gas Producing Activities - Unaudited Table V Proved Reserve Quantity Information* Summary of Net Oil and Gas Reserves Liquids in Millions of Barrels Natural Gas in Billions of Cubic Feet Proved Developed Consolidated Companies U.S. Other Americas Africa Asia Australia Europe Total Consolidated Affiliated Companies TCO Other Total Consolidated and Affiliated Companies Proved Undeveloped Consolidated Companies U.S. Other Americas Africa Asia Australia Europe Total Consolidated Affiliated Companies TCO Other Total Consolidated and Affiliated Companies Total Proved Reserves 2023 2022 2021 Crude Oil Condensate Synthetic Oil Natural Gas NGL Crude Oil Condensate Synthetic Oil Natural Gas NGL Crude Oil Condensate Synthetic Oil Natural Gas NGL 1,221 195 367 240 85 25 2,133 478 3 — 598 — — — — 598 — — 4,543 611 298 7 70 1,632 — 6,974 6,951 2 9 — 690 20,407 67 13 1,062 323 1,198 174 392 235 99 26 2,124 515 3 — 574 — — — — 574 — — 3,288 450 305 7 72 1,734 — 6,578 7,898 3 9 — 532 19,812 52 13 895 349 1,177 181 428 270 102 24 2,182 555 3 — 471 — — — — 471 — — 3,136 421 259 7 77 1,884 — 7,007 8,057 3 8 — 508 20,351 52 13 1,059 310 2,614 598 770 21,792 2,642 574 597 21,056 2,740 471 573 21,720 721 129 78 61 22 28 1,039 526 — 1,565 4,179 — — — — — — — — — — 3,139 413 276 8 27 625 — 1,419 — 2,444 8 — 448 7,911 11 233 — 445 459 8,589 598 1,229 30,381 875 121 62 58 22 32 1,170 611 — 1,781 4,423 — — — — — — — — — — 3,543 435 240 10 25 756 — 1,959 — 2,444 11 — 470 8,953 21 368 — 487 491 9,808 574 1,088 30,864 887 107 52 52 32 38 1,168 695 1 1,864 4,604 — — — — — — — — — — 2,749 391 196 8 28 912 — 466 — 3,627 13 — 427 7,963 32 6 642 583 465 9,188 471 1,038 30,908 * Reserve quantities include natural gas projected to be consumed in operations of 2,655, 2,737 and 2,505 billions of cubic feet and equivalent synthetic oil projected to be consumed in operations of 27, 28 and 17 millions of barrels as of December 31, 2023, 2022 and 2021, respectively. Reserves Governance The company has adopted a comprehensive reserves and resources classification system modeled after a system developed and approved by a number of organizations, including the Society of Petroleum Engineers, the World Petroleum Congress and the American Association of Petroleum Geologists. The company classifies discovered recoverable hydrocarbons into six categories based on their status at the time of reporting – three deemed commercial and three potentially recoverable. Within the commercial classification are proved reserves and two categories of unproved reserves: probable and possible. The potentially recoverable categories are also referred to as contingent resources. For reserves estimates to be classified as proved, they must meet all SEC and company standards. Proved oil and gas reserves are the estimated quantities that geoscience and engineering data demonstrate with reasonable certainty to be economically producible in the future from known reservoirs under existing economic conditions, operating methods and government regulations. Net proved reserves exclude royalties and interests owned by others and reflect contractual arrangements and royalty obligations in effect at the time of the estimate. Proved reserves are classified as either developed or undeveloped. Proved developed reserves are the quantities expected to be recovered through existing wells with existing equipment and operating methods, or in which the cost of the required equipment is relatively minor compared to the cost of a new well. Proved undeveloped reserves are the quantities expected to be recovered from new wells on undrilled acreage or from existing wells where a relatively major expenditure is required for recompletion. Due to the inherent uncertainties and the limited nature of reservoir data, estimates of reserves are subject to change as additional information becomes available. 106 Chevron Corporation 2023 Annual Report 106 Supplemental Information on Oil and Gas Producing Activities - Unaudited Proved reserves are estimated by company asset teams composed of earth scientists and engineers. As part of the internal control process related to reserves estimation, the company maintains a Reserves Advisory Committee (RAC) that is chaired by the Manager of Global Reserves, an organization that is separate from the business units that estimate reserves. The Manager of Global Reserves has more than 30 years of experience working in the oil and gas industry and holds both undergraduate and graduate degrees in geoscience. His experience includes various technical and management roles in providing reserve and resource estimates in support of major capital and exploration projects, and more than 10 years of overseeing oil and gas reserves processes. He has been named a Distinguished Lecturer by the American Association of Petroleum Geologists and is an active member of the American Association of Petroleum Geologists, the SEPM Society of Sedimentary Geologists and the Society of Petroleum Engineers. All RAC members are degreed professionals, each with more than 10 years of experience in various aspects of reserves estimation relating to reservoir engineering, petroleum engineering, earth science or finance. The members are knowledgeable in SEC guidelines for proved reserves classification and receive annual training on the preparation of reserves estimates. The RAC has the following primary responsibilities: establish the policies and processes used within the business units to estimate reserves; provide independent reviews and oversight of the business units’ recommended reserves estimates and changes; confirm that proved reserves are recognized in accordance with SEC guidelines; determine that reserve quantities are calculated using consistent and appropriate standards, procedures and technology; and maintain the Chevron Corporation Reserves Manual, which provides standardized procedures used corporatewide for classifying and reporting hydrocarbon reserves. During the year, the RAC is represented in meetings with each of the company’s business units to review and discuss reserve changes recommended by the various asset teams. Major changes are also reviewed with the company’s senior leadership team including the Chief Executive Officer and the Chief Financial Officer. The company’s annual reserves activity is also reviewed with the Board Audit Committee and the Board of Directors. If major changes to reserves were to occur between the annual reviews, those matters would also be discussed with the Board. RAC sub-teams also conduct in-depth reviews during the year of many of the fields that have large proved reserves quantities. These reviews include an examination of the proved reserve records and documentation of their compliance with the Chevron Corporation Reserves Manual. Technologies Used in Establishing Proved Reserves Additions In 2023, additions to Chevron’s proved reserves were based on a wide range of geologic and engineering technologies. Information generated from wells, such as well logs, wire line sampling, production and pressure testing, fluid analysis, and core analysis, was integrated with seismic data, regional geologic studies, and information from analogous reservoirs to provide “reasonably certain” proved reserves estimates. Both proprietary and commercially available analytic tools, including reservoir simulation, geologic modeling and seismic processing, have been used in the interpretation of the subsurface data. These technologies have been utilized extensively by the company in the past, and the company believes that they provide a high degree of confidence in establishing reliable and consistent reserves estimates. Proved Undeveloped Reserves Noteworthy changes in proved undeveloped reserves are shown in the table below and discussed below. Proved Undeveloped Reserves (Millions of BOE) Quantity at January 1 Revisions Improved recovery Extension and discoveries Purchases Sales Transfers to proved developed Quantity at December 31 2023 3,907 (481) — 314 312 — (596) 3,456 In 2023, revisions include a net decrease of 407 million BOE in the United States. Revisions in Midland and Delaware basins yielded a decrease of 275 million BOE mainly due to a decrease of 186 million BOE from portfolio optimization and a reduction of 74 million BOE from reservoir performance. Reduced development activities contributed to a net decrease of 114 million BOE in east Texas and California. In Kazakhstan, primarily at TCO, performance-driven reservoir model changes led to a net decrease of 107 million BOE to proved undeveloped reserves with a largely offsetting increase 107 Chevron Corporation 2023 Annual Report 107 Supplemental Information on Oil and Gas Producing Activities - Unaudited to proved developed reserves in existing wells. These reductions were partially offset by an increase of 49 million BOE in Israel mainly due to the final investment decision on a new gas pipeline project. In 2023, extensions and discoveries of 258 million BOE in the United States were primarily due to planned development of new locations in shale and tight assets in the Midland and Delaware basins of 173 million BOE and the DJ basin of 49 million BOE, and deepwater assets in the Gulf of Mexico of 36 million BOE. In Other Americas, 57 million BOE of extensions and discoveries were mainly from shale and tight assets in Argentina. In 2023, purchases of 301 million BOE in the United States are primarily from the acquisition of PDC. The difference in 2023 extensions and discoveries of 127 million BOE, between the net quantities of proved reserves of 441 million BOE as reflected on pages 110 to 112 and net quantities of proved undeveloped reserves of 314 million BOE, is primarily due to proved extensions and discoveries that were not recognized as proved undeveloped reserves in the prior year and were recognized directly as proved developed reserves in 2023. Transfers to proved developed reserves in 2023 include 395 million BOE in the United States, primarily from 268 million BOE in the Midland and Delaware basins, 83 million BOE in the DJ basin, and 44 million BOE in the Gulf of Mexico. Other significant transfers to proved developed are 114 million BOE in Israel and a combined 87 million BOE in Bangladesh, Argentina, Canada, Kazakhstan, and other international locations. These transfers are the consequence of development expenditures on completing wells and facilities. During 2023, investments totaling approximately $9.1 billion in oil and gas producing activities and about $0.1 billion in non-oil and gas producing activities were expended to advance the development of proved undeveloped reserves. The United States accounted for about $5.0 billion primarily related to various development activities in the Midland and Delaware basins and the Gulf of Mexico. In Asia, expenditures during the year totaled approximately $2.5 billion, primarily related to development projects for TCO in Kazakhstan. An additional $0.3 billion were spent on development activities in Australia. In Africa, about $0.7 billion was expended on various offshore development and natural gas projects in Nigeria, Angola and Republic of Congo. Development activities in other international locations were primarily responsible for about $0.6 billion of expenditures. Reserves that remain proved undeveloped for five or more years are a result of several factors that affect optimal project development and execution. These factors may include the complex nature of the development project in adverse and remote locations, physical limitations of infrastructure or plant capacities that dictate project timing, compression projects that are pending reservoir pressure declines, and contractual limitations that dictate production levels. At year-end 2023, the company held approximately 1 billion BOE of proved undeveloped reserves that have remained undeveloped for five years or more. The majority of these reserves are in locations where the company has a proven track record of developing major projects. In Australia, approximately 235 million BOE remain undeveloped for five years or more related to the Gorgon and Wheatstone Projects. Further field development the remaining proved undeveloped reserves is scheduled to occur in line with operating constraints, reservoir depletion and infrastructure optimization. In Africa, approximately 137 million BOE have remained undeveloped for five years or more, primarily due to facility constraints at various fields and infrastructure associated with the Escravos gas projects in Nigeria. Affiliates account for about 650 million BOE of proved undeveloped reserves with about 575 million BOE that have remained undeveloped for five years or more. Approximately 511 million BOE are related to TCO in Kazakhstan and about 64 million BOE are related to Angola LNG. At TCO and Angola LNG, further field development to convert the remaining proved undeveloped reserves is scheduled to occur in line with reservoir depletion and facility constraints. to convert Annually, the company assesses whether any changes have occurred in facts or circumstances, such as changes to development plans, regulations, or government policies, that would warrant a revision to reserve estimates. In 2023, lower commodity prices negatively impacted the economic limits of oil and gas properties, resulting in a proved reserve decrease of approximately 135 million BOE, and positively impacted proved reserves due to entitlement effects, resulting in a proved reserves increase of approximately 89 million BOE. The year-end reserves quantities have been updated for these circumstances and significant changes have been discussed in the appropriate reserves sections. Over the past three years, the ratio of proved undeveloped reserves to total proved reserves has ranged between 31 percent and 35 percent. Proved Reserve Quantities For the three years ended December 31, 2023, the pattern of net reserve changes shown in the following tables is not necessarily indicative of future trends. Apart from acquisitions, the company’s ability to add proved reserves can be affected by events and circumstances that are outside the company’s control, such as delays in government 108 Chevron Corporation 2023 Annual Report 108 Supplemental Information on Oil and Gas Producing Activities - Unaudited permitting, partner approvals of development plans, changes in oil and gas prices, OPEC constraints, geopolitical uncertainties, civil unrest, events of war or military conflicts. At December 31, 2023, proved reserves for the company were 11 billion BOE. The company’s estimated net proved reserves of liquids, including crude oil, condensate and synthetic oil for the years 2021, 2022 and 2023, are shown in the table on page 110. The company’s estimated net proved reserves of natural gas liquids (NGLs) are shown on page 111, and the company’s estimated net proved reserves of natural gas are shown on page 112. Noteworthy changes in crude oil, condensate and synthetic oil proved reserves for 2021 through 2023 are discussed below and shown in the table on the following page: Revisions In 2021, the 206 million barrels increase in United States was primarily in the Gulf of Mexico and the Midland and Delaware basins. The higher commodity price environment led to the increase of 126 million barrels in the Gulf of Mexico primarily from Anchor and a 68 million barrels increase in the Midland and Delaware basins due to higher planned development activity. In TCO, entitlement effects and technical changes in field operating assumptions, reservoir model, and project schedule were primarily responsible for the 208 million barrels decrease in Kazakhstan. Entitlement effects primarily contributed to a decrease of 106 million barrels of synthetic oil at the Athabasca Oil Sands project in Canada. In the Other Americas, performance revisions and price effects, mainly in Canada and Argentina, were primarily responsible for the 41 million barrels increase. In 2022, entitlement effects primarily contributed to a decrease of 49 million barrels of synthetic oil at the Athabasca Oil Sands project in Canada. In TCO, entitlement effects and changes in operating assumptions were primarily responsible for the 35 million barrels decrease in Kazakhstan. In 2023, the 257 million barrels decrease in United States was primarily in the Midland and Delaware basins and California. Reservoir performance led to the decrease of 101 million barrels, and portfolio optimization led to a decrease of 59 million barrels in the Midland and Delaware basins. A reduction in planned development activities led to a decrease of 58 million barrels in California. In Other Americas, entitlement effects primarily contributed to an increase of 42 million barrels of synthetic oil at the Athabasca Oil Sands project in Canada. In Asia, reservoir performance, mainly in the Partitioned Zone of Saudi Arabia/Kuwait, was responsible for the 48 million barrels increase. Reservoir performance in Nigeria was mainly responsible for the 37 million barrels increase in Africa. Extensions and Discoveries In 2021, extensions and discoveries in the Midland and Delaware basins, and at the Whale Project in the Gulf of Mexico, were primarily responsible for the 349 million barrels increase in the United States. In 2022, extensions and discoveries in the Midland, Delaware and DJ basins, and approval of the Ballymore Project in the Gulf of Mexico, were primarily responsible for the 264 million barrels increase in the United States. In Other Americas, the 32 million barrels of extensions and discoveries were from Argentina and Canada. In 2023, extensions and discoveries of 124 million barrels in the Midland and Delaware basins were primarily responsible for the 170 million barrels increase in the United States. In Other Americas, the 55 million barrels of extensions and discoveries increase was mainly from shale and tight assets in Argentina. Purchases In 2022, the company exercised its option to acquire additional land acreage in the Athabasca Oil Sands project in Canada contributing 168 million barrels in synthetic oil. The extension of deepwater licenses in Nigeria and the Republic of Congo contributed 36 million barrels in Africa. In 2023, the acquisition of PDC in the DJ and Delaware basins was primarily responsible for the 207 million barrels increase in the United States. Sales In 2021, sales of 32 million barrels in the United States were in the Midland and Delaware basins. 109 Chevron Corporation 2023 Annual Report 109 Supplemental Information on Oil and Gas Producing Activities - Unaudited Net Proved Reserves of Crude Oil, Condensate and Synthetic Oil Millions of barrels U.S. Americas1 Africa Asia Australia Europe Oil 2,5 Total TCO Oil Other3 Other Consolidated Companies Synthetic Affiliated Companies Synthetic Reserves at January 1, 2021 Changes attributable to: Revisions Improved recovery Extensions and discoveries Purchases Sales Production 1,750 260 554 403 141 206 — 349 26 (32) (235) 41 9 16 — — (38) 10 (8) — — — — — 2 — (1) (74) (84) 8 — — — — (15) Reserves at December 31, 2021 4, 5 Changes attributable to: 2,064 288 480 322 134 Revisions Improved recovery Extensions and discoveries Purchases Sales Production (26) 2 264 22 (16) (237) (9) 15 32 5 — (36) 8 4 4 5 6 — 36 — (3) — (42) (73) 2 — — — — (15) Reserves at December 31, 2022 4, 5 Changes attributable to: 2,073 295 454 293 121 Revisions Improved recovery Extensions and discoveries Purchases Sales Production (257) 9 170 207 (1) (259) 9 — 55 — — (35) 37 48 2 — — — 24 — — — (40) (72) 1 — — — — (15) Reserves at December 31, 2023 4, 5 1,942 324 445 301 107 61 6 — — — — (5) 62 1 — — — — (5) 58 (1) — — — — (4) 53 597 3,766 1,550 157 (106) — 9 — 365 — 28 — (33) (471) (20) (208) — — — — (92) 471 3,821 1,250 (69) (49) — 26 — 302 231 168 — (19) (424) (16) (35) — 10 — — (99) 574 3,868 1,126 (121) 42 — 11 — 225 — 231 (1) — (443) (18) (20) — — — — (102) 598 3,770 1,004 — — — — — — — — — — — — — — — — — — — — — — 3 2 — — — — (1) 4 — — — — — (1) 3 1 — — — — (1) 3 Total Consolidated and Affiliated Companies 5,319 (49) 9 365 28 (33) (564) 5,075 (104) 26 312 231 (19) (524) 4,997 (140) 11 225 231 (1) (546) 4,777 1 Ending reserve balances in North America were 188, 185 and 183 and in South America were 136, 110 and 105 in 2023, 2022 and 2021, respectively. 2 Reserves associated with Canada. 3 Reserves associated with Africa. 4 Included are year-end reserve quantities related to production-sharing contracts (PSC) (refer to page 116 for the definition of a PSC). PSC-related reserve quantities are 6 percent, 6 percent and 7 percent for consolidated companies for 2023, 2022 and 2021, respectively. 5 Reserve quantities include synthetic oil projected to be consumed in operations of 27, 28 and 17 millions of barrels as of December 31, 2023, 2022 and 2021, respectively. Noteworthy changes in NGLs proved reserves for 2021 through 2023 are discussed below and shown in the table on the following page: Revisions In 2021, higher commodity prices resulting in the increase of planned development activity in the Midland and Delaware basins were primarily responsible for the 107 million barrels increase in the United States. In 2023, the 110 million barrels decrease in the United States was primarily in the Midland and Delaware basins with a decrease of 49 million barrels due to portfolio optimization and a decrease of 29 million barrels due to reservoir performance. Extensions and Discoveries In 2021, extensions and discoveries in the Midland and Delaware basins were primarily responsible for the 190 million barrels increase in the United States. In 2022, extensions and discoveries in the Midland and Delaware basins were primarily responsible for the 163 million barrels increase in the United States. In 2023, extensions and discoveries in the Midland and Delaware basins were primarily responsible for the 92 million barrels increase in the United States. Purchases In 2023, the acquisition of PDC in the DJ and Delaware basins was primarily responsible for the 262 million barrels increase in the United States. Sales In 2022, sales of 35 million barrels in the United States were primarily from the divestment of the Eagle Ford shale assets and some properties in the Midland and Delaware basins. 110 Chevron Corporation 2023 Annual Report 110 Supplemental Information on Oil and Gas Producing Activities - Unaudited Net Proved Reserves of Natural Gas Liquids Millions of barrels U.S. Americas1 Africa Asia Australia Europe Total TCO Other2 Other Consolidated Companies Affiliated Companies Total Consolidated and Affiliated Companies 709 102 Reserves at January 1, 2021 Changes attributable to: Revisions Improved recovery Extensions and discoveries Purchases Sales Production Reserves at December 31, 20213 Changes attributable to: Revisions Improved recovery Extensions and discoveries Purchases Sales Production Reserves at December 31, 20223 Changes attributable to: Revisions Improved recovery Extensions and discoveries Purchases Sales Production Reserves at December 31, 20233 593 107 — 190 8 (8) (78) 812 18 — 163 14 (35) (87) 885 (110) — 92 262 — (105) 1,024 8 104 — 5 — 4 — — (2) 15 — — 2 2 — (2) 17 — — — — — (2) 15 — 8 — — — — — — — — (6) — 106 — (3) — — — — 1 — — — — (7) — 97 — (6) — — — — — — 11 — — (5) — 97 — 4 — — — — — (1) 3 — — — — — — 3 — — — — — (1) 2 — — — — — — — — — — — — — — 120 — 194 8 (8) (87) 936 15 — 166 16 (35) (96) — 1,002 — (116) — — 92 — 273 — — — — (113) — 1,138 17 4 — — — — (3) 18 (3) — — — — (2) 13 2 — — — — (2) 13 828 114 — 194 8 (8) (98) 1,038 7 — 166 16 (35) (104) 1,088 (102) — 92 273 — (122) 1,229 (10) — — — — (8) 84 (5) — — — — (6) 73 12 — — — — (7) 78 1 Reserves associated with North America. 2 Reserves associated with Africa. 3 Year-end reserve quantities related to PSC are not material for 2023, 2022 and 2021, respectively. Noteworthy changes in natural gas proved reserves for 2021 through 2023 are discussed below and shown in the table on the following page: Revisions In 2021, the approval of the Jansz Io Compression project was mainly responsible for the 1.2 trillion cubic feet (TCF) increase in Australia. Higher commodity prices, resulting in the increase of planned development activity in the Midland and Delaware basins, were mainly responsible for the 829 billion cubic feet (BCF) increase in the United States. In TCO, entitlement effects and technical changes in field operating assumptions, reservoir model, and project schedule were primarily responsible for the 179 BCF decrease. In 2022, the performance of the Leviathan and Tamar fields in Israel and the Bibiyana and Jalalabad fields in Bangladesh were mainly responsible for the 1.8 TCF increase in Asia. In Australia, the 377 BCF decrease was mainly due to updated reservoir characterization of the Wheatstone field. In TCO, entitlement effects and changes in operating assumptions were primarily responsible for the 285 BCF decrease. In 2023, portfolio optimization decrease of 276 BCF and a reservoir performance decrease of 186 BCF in the Midland and Delaware basins along with a reduction in planned development activities leading to a decrease of 485 BCF in the Haynesville shale formation of east Texas, were mainly responsible for the 1.2 TCF decrease in the United States. In Asia, final investment decision on a new gas pipeline project in Israel and reservoir performance in Bangladesh were mainly responsible for the 481 BCF increase. Extensions and Discoveries In 2021, extensions and discoveries of 1.4 TCF in the United States were primarily in the Midland and Delaware basins. In 2022, extensions and discoveries of 1.6 TCF in the United States were primarily in the Midland and Delaware basins. 111 Chevron Corporation 2023 Annual Report 111 Supplemental Information on Oil and Gas Producing Activities - Unaudited In 2023, extensions and discoveries of 660 BCF in the United States were primarily in the Midland and Delaware basins. Purchases In 2023, the acquisition of PDC in the DJ basin was primarily responsible for the 2.2 TCF in the United States. Sales In 2022, sales of 243 BCF in the United States were primarily in the Eagle Ford shale and Midland and Delaware basins. Net Proved Reserves of Natural Gas Billions of cubic feet (BCF) U.S. Americas1 Africa Asia Australia Europe Total TCO Other2 Other Consolidated Companies Affiliated Companies Total Consolidated and Affiliated Companies Reserves at January 1, 2021 Changes attributable to: Revisions Improved recovery Extensions and discoveries Purchases Sales Production3 Reserves at December 31, 2021 4, 5 Changes attributable to: Revisions Improved recovery Extensions and discoveries Purchases Sales Production3 Reserves at December 31, 2022 4, 5 Changes attributable to: Revisions Improved recovery Extensions and discoveries Purchases Sales Production3 4,250 329 2,837 8,183 11,385 22 27,006 2,018 898 829 — 1,408 44 (29) (617) 5,885 171 1 1,573 85 (243) (641) 6,831 (1,198) 2 660 2,161 (3) (771) 129 — 63 — — (66) 147 — — — — (188) 119 — — — — (829) 1,181 — 19 — (13) (888) 2,406 1 — — — 1,490 44 — (42) — (2,590) (2) (179) — — — — (138) 82 — — — — (87) 455 2,796 7,473 11,684 21 28,314 1,701 893 62 — 64 25 — (61) (118) 1,765 — — — — (701) — — 30 (11) (207) (377) — — — — (965) 1,505 2 — 1 — 1,637 140 — — (254) (2,578) (3) (285) — — — — (153) 3 — 17 — — (77) 545 2,490 8,537 10,342 20 28,765 1,263 836 (1) — 83 — — (53) (154) — — 97 — (176) 481 — — — — (625) 31 — — — — (978) 1 (840) — 2 743 — — 2,258 — (3) (2,607) (4) 166 — — — — (134) 18 — — — — (86) Reserves at December 31, 2023 4, 5 7,682 574 2,257 8,393 9,395 17 28,318 1,295 768 29,922 2,309 — 1,490 44 (42) (2,815) 30,908 1,223 1 1,654 140 (254) (2,808) 30,864 (656) 2 743 2,258 (3) (2,827) 30,381 1 Ending reserve balances in North America and South America were 363, 407 and 347 and 211, 138 and 108 in 2023, 2022 and 2021, respectively. 2 Reserves associated with Africa. 3 Total “as sold” volumes are 2,609, 2,600 and 2,599 for 2023, 2022 and 2021, respectively. 4 Includes reserve quantities related to PSC. PSC-related reserve quantities are 7 percent, 8 percent and 8 percent for consolidated companies for 2023, 2022 and 2021, respectively. 5 Reserve quantities include natural gas projected to be consumed in operations of 2,655, 2,737 and 2,505 billions of cubic feet as of December 31, 2023, 2022 and 2021, respectively. 112 Chevron Corporation 2023 Annual Report 112 Supplemental Information on Oil and Gas Producing Activities - Unaudited Table VI - Standardized Measure of Discounted Future Net Cash Flows Related to Proved Oil and Gas Reserves The standardized measure of discounted future net cash flows is calculated in accordance with SEC and FASB requirements. This includes using the average of first-day-of-the-month oil and gas prices for the 12-month period prior to the end of the reporting period, estimated future development and production costs assuming the continuation of existing economic conditions, estimated costs for asset retirement obligations (includes costs to retire existing wells and facilities in addition to those future wells and facilities necessary to produce proved undeveloped reserves), and estimated future income taxes based on appropriate statutory tax rates. Discounted future net cash flows are calculated using 10 percent mid-period discount factors. Estimates of proved reserve quantities are imprecise and change over time as new information becomes available. Probable and possible reserves, which may become proved in the future, are excluded from the calculations. The valuation requires assumptions as to the timing and amount of future development and production costs. The calculations are made as of December 31 each year and do not represent management’s estimate of the company’s future cash flows or value of its oil and gas reserves. In the following table, the caption “Standardized Measure Net Cash Flows” refers to the standardized measure of discounted future net cash flows. Millions of dollars Other Americas U.S. Africa Asia Australia Europe Total TCO Other Consolidated Companies Affiliated Companies Total Consolidated and Affiliated Companies At December 31, 2023 Future cash inflows from production $ 181,152 $ 65,265 $ 42,786 $ 62,094 $ 99,003 $ 4,395 $ 454,695 Future production costs (1,194) (113,563) Future development costs (34,037) Future income taxes (96,946) (22,549) (3,538) (10,337) (11,534) (5,804) (24,499) (16,502) (4,474) (12,446) (13,000) (2,845) (27,415) (48,784) (16,938) (21,089) (438) (1,160) $ 74,758 $ 7,324 $ (21,467) (3,617) (14,902) (484) (67) (2,371) 536,777 (135,514) (37,721) (114,219) Undiscounted future net cash flows 10 percent midyear annual discount for timing of estimated cash flows Standardized Measure Net Cash Flows 94,341 28,841 9,364 18,834 57,166 1,603 210,149 34,772 4,402 249,323 (39,553) (16,623) (3,262) (9,343) (22,011) (600) (91,392) (11,283) (1,640) (104,315) $ 54,788 $ 12,218 $ 6,102 $ 9,491 $ 35,155 $ 1,003 $ 118,757 $ 23,489 $ 2,762 $ 145,008 At December 31, 2022 Future cash inflows from production $ 257,478 $ 76,940 $ 55,865 $ 67,188 $ 147,839 $ 5,920 $ 611,230 (1,069) (116,782) Future production costs (35,208) Future development costs (2,827) (151,825) Future income taxes (22,744) (3,233) (13,207) (16,373) (2,657) (26,160) (12,261) (2,879) (30,674) (13,313) (5,030) (38,861) (51,022) (20,907) (40,096) (502) $ 106,114 $ 22,630 $ (28,046) (4,127) (22,182) (574) (8) (7,707) 739,974 (145,402) (39,343) (181,714) Undiscounted future net cash flows 10 percent midyear annual discount for timing of estimated cash flows Standardized Measure Net Cash Flows 145,453 37,756 10,675 21,374 90,635 1,522 307,415 51,759 14,341 373,515 (62,918) (22,165) (3,001) (10,769) (37,519) (571) (136,943) (18,810) (5,824) (161,577) $ 82,535 $ 15,591 $ 7,674 $ 10,605 $ 53,116 $ 951 $ 170,472 $ 32,949 $ 8,517 $ 211,938 At December 31, 2021 Future cash inflows from production $ 174,976 $ 48,328 $ 41,698 $ 52,881 $ 87,676 $ 4,366 $ 409,925 (1,400) (100,414) Future production costs (30,379) Future development costs (91,719) Future income taxes (16,204) (2,707) (7,723) (13,871) (2,774) (21,064) (40,009) (16,709) (24,182) (13,726) (5,283) (20,600) (15,204) (2,245) (17,228) (661) (922) $ 80,297 $ 8,446 $ (23,354) (5,066) (15,563) (285) (18) (2,850) 498,668 (124,053) (35,463) (110,132) Undiscounted future net cash flows 10 percent midyear annual discount for timing of estimated cash flows Standardized Measure Net Cash Flows 94,076 21,694 7,021 15,172 48,067 1,383 187,413 36,314 5,293 229,020 (41,357) (11,370) (1,899) (7,277) (21,141) (485) (83,529) (14,372) (2,244) (100,145) $ 52,719 $ 10,324 $ 5,122 $ 7,895 $ 26,926 $ 898 $ 103,884 $ 21,942 $ 3,049 $ 128,875 113 Chevron Corporation 2023 Annual Report 113 Supplemental Information on Oil and Gas Producing Activities - Unaudited Table VII - Changes in the Standardized Measure of Discounted Future Net Cash Flows From Proved Reserves The changes in present values between years, which can be significant, reflect changes in estimated proved reserve quantities and prices and assumptions used in forecasting production volumes and costs. Changes in the timing of production are included with “Revisions of previous quantity estimates.” Millions of dollars Consolidated Companies Affiliated Companies Total Consolidated and Affiliated Companies Present Value at January 1, 2021 Sales and transfers of oil and gas produced net of production costs Development costs incurred Purchases of reserves Sales of reserves Extensions, discoveries and improved recovery less related costs Revisions of previous quantity estimates Net changes in prices, development and production costs Accretion of discount Net change in income tax Net Change for 2021 Present Value at December 31, 2021 Sales and transfers of oil and gas produced net of production costs Development costs incurred Purchases of reserves Sales of reserves Extensions, discoveries and improved recovery less related costs Revisions of previous quantity estimates Net changes in prices, development and production costs Accretion of discount Net change in income tax Net Change for 2022 Present Value at December 31, 2022 Sales and transfers of oil and gas produced net of production costs Development costs incurred Purchases of reserves Sales of reserves Extensions, discoveries and improved recovery less related costs Revisions of previous quantity estimates Net changes in prices, development and production costs Accretion of discount Net change in income tax Net Change for 2023 Present Value at December 31, 2023 $ $ $ 48,443 (34,668) 5,770 772 (889) 12,091 2,269 89,031 6,657 (25,592) 55,441 103,884 (53,356) 7,962 2,248 (1,807) 16,054 5,281 110,467 14,075 (34,336) 66,588 170,472 (38,638) 11,381 9,628 (51) 7,262 (14,389) (80,284) 23,306 30,070 (51,715) $ $ $ 10,094 (5,760) 2,445 — — — (6,675) 30,076 1,503 (6,692) 14,897 24,991 (9,127) 2,430 — — 823 (1,481) 28,052 3,429 (7,651) 16,475 41,466 (6,350) 2,281 — — — (493) (23,517) 5,722 7,142 (15,215) $ $ $ 58,537 (40,428) 8,215 772 (889) 12,091 (4,406) 119,107 8,160 (32,284) 70,338 128,875 (62,483) 10,392 2,248 (1,807) 16,877 3,800 138,519 17,504 (41,987) 83,063 211,938 (44,988) 13,662 9,628 (51) 7,262 (14,882) (103,801) 29,028 37,212 (66,930) $ 118,757 $ 26,251 $ 145,008 114 Chevron Corporation 2023 Annual Report 114 chevron history 1993 Formed Tengizchevroil, a joint venture with the Republic of Kazakhstan, to develop and produce the giant Tengiz Field, becoming the first major Western oil company to enter newly independent Kazakhstan. 1999 Acquired Rutherford-Moran Oil Corporation. This acquisition provided inroads to Asian natural gas markets. 2001 Merged with Texaco Inc. and changed name to ChevronTexaco Corporation. Became the second-largest U.S.-based energy company. 2002 Relocated corporate headquarters from San Francisco, California, to San Ramon, California. 2005 Acquired Unocal Corporation, an independent crude oil and natural gas exploration and production company. Unocal’s upstream assets bolstered Chevron’s already- strong position in the Asia-Pacific, U.S. Gulf of Mexico and Caspian regions. Changed name to Chevron Corporation to convey a clearer, stronger and more unified presence in the global marketplace. 2020 Acquired Noble Energy, Inc., providing Chevron with low-cost proved reserves and attractive undeveloped resources, cash-generating offshore assets in Israel and acreage in the DJ and Permian basins. 2022 Acquired Renewable Energy Group, Inc., becoming the second largest producer of bio-based diesel in the U.S. 2023 Acquired PDC Energy, Inc., enhancing the company’s presence in the DJ and Permian basins in the U. S. 1879 Incorporated in San Francisco, California, as the Pacific Coast Oil Company. 1900 Acquired by the West Coast operations of John D. Rockefeller’s original Standard Oil Company. 1911 Emerged as an autonomous entity – Standard Oil Company (California) – following U.S. Supreme Court decision to divide the Standard Oil conglomerate into 34 independent companies. 1926 Acquired Pacific Oil Company to become Standard Oil Company of California (Socal). 1936 Formed the Caltex Group of Companies, jointly owned by Socal and The Texas Company (later became Texaco), to combine Socal’s exploration and production interests in the Middle East and Indonesia and provide an outlet for crude oil through The Texas Company’s marketing network in Africa and Asia. 1947 Acquired Signal Oil Company, obtaining the Signal brand name and adding 2,000 retail stations in the western United States. 1961 Acquired Standard Oil Company (Kentucky), a major petroleum products marketer in five southeastern states, to provide outlets for crude oil from southern Louisiana and the U.S. Gulf of Mexico, where the company was a major producer. 1984 Acquired Gulf Corporation – nearly doubling the company’s crude oil and natural gas activities – and gained a significant presence in industrial chemicals, natural gas liquids and coal. Changed name to Chevron Corporation to identify with the name under which most products were marketed. 1988 Purchased Tenneco Inc.’s U.S. Gulf of Mexico crude oil and natural gas properties, becoming one of the largest U.S. natural gas producers. Chevron Corporation 2023 Annual Report 115 glossary of energy and financial terms energy terms Acreage Land leased for oil and gas exploration and production. Additives Specialty chemicals incorporated into fuels and lubricants that enhance the performance of the finished product. Barrels of oil-equivalent (BOE) A unit of measure to quantify crude oil, natural gas liquids and natural gas amounts using the same basis. Natural gas volumes are converted to barrels on the basis of energy content. See oil-equivalent gas and production. Carbon capture, utilization and storage (CCUS) The process of capturing carbon dioxide emissions and either using them as a feedstock (utilization) or permanently storing them in geological formations deep underground (storage). Carbon intensity The amount of carbon dioxide or carbon dioxide-equivalent (CO2e) per unit of measure. Condensate Hydrocarbons that are in a gaseous state at reservoir conditions, but when produced are in liquid state at surface conditions. Development Drilling, construction and related activities following discovery that are necessary to begin production and transportation of crude oil and/or natural gas. Exploration Searching for crude oil and/or natural gas by utilizing geological and topographical studies, geophysical and seismic surveys and drilling of wells. Gas-to-liquids (GTL) A process that converts natural gas into high-quality liquid transportation fuels and other products. Hydrogen Includes lower carbon intensity hydrogen from specified hydrogen production pathways like steam methane reforming with carbon capture and storage and electrolysis with lower carbon power. Liquefied natural gas (LNG) Natural gas that is liquefied under extremely cold temperatures to facilitate storage or transportation in specially designed vessels. Liquefied petroleum gas (LPG) Light gases, such as butane and propane, that can be maintained as liquids while under pressure. Lower carbon A term describing environments, technologies, business sectors, markets, energy sources and mixes of energy sources, among other things, characterized by or enabling the reduction of carbon emissions or carbon intensities. Lower carbon energy Energy sources and mixes of energy sources that, in their production and use, emit less carbon emissions or have lower carbon intensity than other forms. Lower carbon intensity oil, products and natural gas Oil, natural gas and hydrocarbon-based products that are produced and sold to customers with a carbon intensity below that of traditional oil, natural gas and hydrocarbon-based products. Natural gas liquids (NGLs) Separated from natural gas, these include ethane, propane, butane and natural gasoline. Net reserves and resources Chevron’s interest share of oil and gas after removing royalty share and overriding royalties paid to others. Net includes any applicable Chevron-owned overriding royalties. Net zero upstream aspiration (Scope 1 and 2) Chevron aspires to reach net zero upstream emissions (Scope 1 and 2) by 2050. Accomplishing this aspiration depends on (1) sufficient and substantial advances in technology, including the continuing progress of commercially viable technologies and low- or non- carbon-based energy sources; (2) the granting of necessary permits by governing authorities; (3) the availability and acceptability of cost-effective, verifiable carbon credits; (4) the availability of suppliers that can meet our sustainability and other standards; (5) evolving regulatory requirements, including changes to IPCC’s Global Warming Potentials, affecting ESG standards or disclosures; (6) evolving standards for tracking and reporting on emissions and emission reductions and removals; (7) customers’ and consumers’ preferences and use of the company’s products or substitute products; and (8) actions taken by the company’s competitors in response to legislation and regulations. Oil-equivalent gas (OEG) The volume of natural gas needed to generate the equivalent amount of heat as a barrel of crude oil. Approximately 6,000 cubic feet of natural gas is equivalent to one barrel of crude oil. Oil sands Naturally occurring mixture of bitumen (a heavy, viscous form of crude oil), water, sand and clay. Using hydroprocessing technology, bitumen can be refined to yield synthetic oil. Petrochemicals Compounds derived from petroleum. These include: aromatics, which are used to make plastics, adhesives, synthetic fibers and household detergents; and olefins, which are used to make packaging, plastic pipes, tires, batteries, household detergents and synthetic motor oils. Portfolio carbon intensity (PCI) Representation of the estimated energy-weighted average greenhouse gas emissions intensity from a simplified value chain from the production, refinement, distribution and end use of marketed energy products per unit of energy delivered. Production Total production refers to all the crude oil (including synthetic oil), NGLs and natural gas produced from a property. Net production is the company’s share of total production after deducting both royalties paid to landowners and a government’s agreed-upon share of production under a production-sharing contract (PSC). Liquids production refers to crude oil, condensate, natural gas liquids and synthetic oil volumes. Oil-equivalent production is the sum of the barrels of liquids and the oil-equivalent barrels of natural gas produced. See barrels of oil-equivalent, oil-equivalent gas and production-sharing contract. Production-sharing contract (PSC) An agreement between a government and a contractor (generally an oil and gas company) whereby production is shared between the parties in a prearranged manner. The contractor typically incurs all exploration, development and production costs, which are subsequently recoverable out of an agreed-upon share of any Chevron Corporation 2023 Annual Report 116 future PSC production, referred to as cost recovery oil and/or gas. Any remaining production, referred to as profit oil and/or gas, is shared between the parties on an agreed-upon basis as stipulated in the PSC. The government may also retain a share of PSC production as a royalty payment, and the contractor typically owes income tax on its portion of the profit oil and/or gas. The contractor’s share of PSC oil and/or gas production and reserves varies over time, as it is dependent on prices, costs and specific PSC terms. Refinery crude unit distillation utilization Average feedstocks consumed in the crude unit in refineries for the year, expressed as a percentage of the refineries’ average annual crude unit capacity. Reserves Crude oil, natural gas liquids and natural gas contained in underground rock formations called reservoirs and saleable hydrocarbons extracted from oil sands, shale, coalbeds and other nonrenewable natural resources that are intended to be upgraded into synthetic oil or gas. Net proved reserves are the estimated quantities that geoscience and engineering data demonstrate with reasonable certainty to be economically producible in the future from known reservoirs under existing economic conditions, operating methods and government regulations and exclude royalties and interests owned by others. Estimates change as additional information becomes available. Oil-equivalent reserves are the sum of the liquids reserves and the oil-equivalent gas reserves. See barrels of oil-equivalent and oil-equivalent gas. The company discloses only net proved reserves in its filings with the U.S. Securities and Exchange Commission. Investors should refer to proved reserves disclosures in Chevron’s Annual Report on Form 10-K for the year ended December 31, 2023. Resources Estimated quantities of oil and gas resources are recorded under Chevron’s 6P system, which is modeled after the Society of Petroleum Engineers’ Petroleum Resources Management System, and include quantities classified as proved, probable and possible reserves, plus those that remain contingent on commerciality. Unrisked resources, unrisked resource base and similar terms represent the arithmetic sum of the amounts recorded under each of these classifications. Recoverable resources, potentially recoverable volumes and other similar terms represent estimated remaining quantities that are forecast to be ultimately recoverable and produced in the future, adjusted to reflect the relative uncertainty represented by the various classifications. These estimates may change significantly as development work provides additional information. All of these measures are considered by management in making capital investment and operating decisions and may provide some indication to stockholders of the resource potential of oil and gas properties in which the company has an interest. Shale gas Natural gas produced from shale rock formations where the gas was sourced from within the shale itself. Shale is very fine-grained rock, characterized by low porosity and extremely low permeability. Production of shale gas normally requires formation stimulation such as the use of hydraulic fracturing (pumping a fluid-sand mixture into the formation under high pressure) to help produce the gas. Synthetic oil A marketable and transportable hydrocarbon liquid, resembling crude oil, that is produced by upgrading highly viscous or solid hydrocarbons, such as extra-heavy crude oil or oil sands. Tight oil Liquid hydrocarbons produced from shale (also referred to as shale oil) and other rock formations with extremely low permeability. As with shale gas, production from tight oil reservoirs normally requires formation stimulation such as hydraulic fracturing. Unconventional oil and gas resources Hydrocarbons contained in formations over very large areas with extremely low permeability that are not influenced by buoyancy. In contrast, conventional resources are contained within geologic structures/stratigraphy and float buoyantly over water. Unconventional resources include shale gas, coalbed methane, crude oil and natural gas from tight rock formations, tar sands, kerogen from oil shale, and gas hydrates that cannot commercially flow without well stimulation. Wells Oil and gas wells are classified as either exploration or development wells. Exploration wells are wells drilled to find a new field or to find a new reservoir in a field previously found to be productive of oil and gas in another reservoir. Appraisal wells are exploration wells drilled to confirm the results of a discovery well. Delineation wells are exploration wells drilled to determine the boundaries of a productive formation or to delineate the extent of a find. Development wells are wells drilled in an existing reservoir in a proved oil- or gas-producing area. Completed wells are wells for which drilling work has been completed and that are capable of producing. Dry wells are wells completed as dry holes, that is, wells not capable of producing in commercial quantities. financial terms Capital employed The sum of Chevron Corporation stockholders’ equity, total debt and noncontrolling interests. Average capital employed is computed by averaging the sum of capital employed at the beginning and end of the year. Cash flow from operating activities Cash generated from the company’s businesses; an indicator of a company’s ability to fund capital programs and stockholder distributions. Excludes cash flows related to the company’s financing and investing activities. Current ratio Current assets divided by current liabilities. Debt ratio Total debt, including finance lease liabilities, divided by total debt plus Chevron Corporation stockholders’ equity. Earnings Net income attributable to Chevron Corporation as presented on the Consolidated Statement of Income. Free cash flow The cash provided by operating activities less capital expenditures. Goodwill An asset representing the future economic benefits arising from the other assets acquired in a business combination that are not individually identified and separately recognized. Interest coverage ratio Income before income tax expense, plus interest and debt expense and amortization of capitalized interest, less net income attributable to noncontrolling interests, divided by before-tax interest costs. Margin The difference between the cost of purchasing, producing and/or marketing a product and its sales price. Net debt ratio Total debt less the sum of cash and cash equivalents, time deposits and marketable securities, as a percentage of total debt less the sum of cash and cash equivalents, time deposits and marketable securities plus Chevron Corporation’s stockholders’ equity. Return on capital employed (ROCE) This is calculated by dividing earnings (adjusted for after-tax interest expense and noncontrolling interests) by average capital employed. Return on stockholders’ equity (ROSE) This is calculated by dividing earnings by average Chevron Corporation stockholders’ equity. Average Chevron Corporation stockholders’ equity is computed by averaging the sum of the beginning-of-year and end-of-year balances. Return on total assets This is calculated by dividing earnings by average total assets. Average total assets is computed by averaging the sum of the beginning-of-year and end-of-year balances. Total stockholder return The return to stockholders as measured by stock price appreciation and reinvested dividends for a period of time. Chevron Corporation 2023 Annual Report 117 stockholder and investor information stock exchange listing dividend payment dates Chevron common stock is listed on the New York Stock Exchange. The symbol is “CVX.” stockholder information As of February 9, 2024, stockholders of record numbered approximately 100,000. For questions about stock ownership, changes of address and dividend reinvestment programs, please contact Chevron’s stock transfer agent: Computershare P.O. Box 505000 Louisville, KY 40233-5000 800 368 8357 (U.S. and Canada) 201 680 6578 (outside the U.S. and Canada) www.computershare.com/investor Overnight correspondence should be sent to: Computershare 462 South 4th Street Suite 1600 Louisville, KY 40202 The Computershare Investment Plan is a direct stock purchase and dividend reinvestment plan. Quarterly dividends on common stock are paid, generally, following declaration by the Board of Directors, on or about the 10th day of March, June, September and December. Direct deposit of dividends is available to stockholders. For information, contact Computershare. (See “stockholder information” section.) annual meeting The Annual Meeting of Stockholders will be held online via live audio webcast at 8 a.m. PDT, Wednesday, May 29, 2024. www.virtualshareholdermeeting.com/CVX2024 electronic access In an effort to conserve natural resources and reduce the cost of printing and mailing proxy materials, we encourage stockholders to register to receive these documents by email and vote their shares on the internet. Stockholders of record may sign up for electronic access (and beneficial stockholders may be able to request electronic access by contacting their broker or bank or Broadridge Financial Solutions) on this website: www.icsdelivery.com/cvx. Enrollment is revocable until each year’s Annual Meeting record date. Chevron Corporation 2023 Annual Report 118 investor information Securities analysts, portfolio managers and representatives of financial institutions may contact: Investor Relations Chevron Corporation 6001 Bollinger Canyon Road San Ramon, CA 94583-2324 925 842 5690 Email: invest@chevron.com notice As used in this report, the term “Chevron” and such terms as “the company,” “the corporation,” “our,” “we,” “us” and “its” may refer to one or more of Chevron’s consolidated subsidiaries or to all of them taken as a whole. 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. corporate headquarters 6001 Bollinger Canyon Road San Ramon, CA 94583-2324 925 842 1000 Headquarters after June 1, 2024: 5001 Executive Parkway, Suite 200 San Ramon, CA 94583 seeking a diversity of talent to meet future global energy needs We continued our collaboration with the American Petroleum Institute (API) and Opportunity@Work to focus on skills-based hiring to broaden our reach and diversify our talent pipeline. Launched in 2022, the API SkillsReady job readiness program is designed to attract and train entry-level candidates and close industry skills and diversity gaps. Graduates receive an API Certificate endorsing their knowledge of industry operations. Our partnership with Opportunity@Work also helps us identify and source people they refer to as STARs (Skilled Through Alternative Routes). Rather than a bachelor’s degree, STARs obtain training through nontraditional paths such as community colleges, workforce training, certifications, military service or on-the-job learning. Learn more about our approach at chevron.co/talent publications and other news sources The Annual Report, distributed in April, summarizes the company’s financial performance in the preceding year and provides an overview of the company’s major activities. Chevron’s Annual Report on Form 10-K, filed with the U.S. Securities and Exchange Commission, and the Supplement to the Annual Report, containing additional financial and operating data, are available on the company’s website, www.chevron.com, or copies may be requested by contacting: Printed copies may be requested by writing to: Corporate Affairs: Corporate Sustainability Communications Chevron Corporation 6001 Bollinger Canyon Road Building G San Ramon, CA 94583-2324 Details of the company’s political contributions for 2023 are available on the company’s website, www.chevron.com, or by writing to: Investor Relations Chevron Corporation 6001 Bollinger Canyon Road, A3140 San Ramon, CA 94583-2324 925 842 5690 Email: invest@chevron.com The 2023 Sustainability Report will be available in May at www.chevron.com/sustainability, where a guide to Chevron’s sustainability efforts and approach to our environment, social and governance (ESG) priorities can be found. Highlights include: the innovative and responsible actions Chevron is taking to advance environmental performance; our investment in people and partnership; and our commitment to delivering results the right and responsible way, with safety and health as operating priorities. Corporate Affairs Chevron Corporation 6001 Bollinger Canyon Road Building G San Ramon, CA 94583-2324 For additional information about the company and the energy industry, visit Chevron’s website, www.chevron.com. It includes articles, news releases, presentations, quarterly earnings information, the Proxy Statement and the complete text of this Annual Report. connect with us Chevron Corporation 2023 Annual Report 120 pioneering breakthrough technology for a lower carbon future A key barometer of innovation for a company is patent holdings. In 2023, we honored 361 inventors from 37 different facilities around the world for their 241 patent grants or applications. Chevron holds more than 4,400 patents for new technologies, with over 3,200 additional patents pending, making Chevron one of the leading patent holders in the industry. Every day, Chevron’s leading experts, solution developers, energy innovators and problem solvers are searching for the next breakthrough. Human ingenuity and innovation are key to unlocking a lower carbon energy system. Learn more at: chevron.co/technology The statements and images in this Annual Report, including without limitation those relating to the action areas of Chevron’s energy transition strategy, are forward-looking based on management’s current expectations, estimates and projections and, accordingly, involve risks and uncertainties that could cause actual outcomes and results to differ materially from those expressed or forecasted herein. Words or phrases such as “anticipates,” “expects,” “intends,” “plans,” “targets,” “advances,” “commits,” “drives,” “aims,” “forecasts,” “projects,” “believes,” “approaches,” “seeks,” “schedules,” “estimates,” “positions,” “pursues,” “progress,” “may,” “can,” “could,” “should,” “will,” “budgets,” “outlook,” “trends,” “guidance,” “focus,” “on track,” “goals,” “objectives,” “strategies,” “opportunities,” “poised,” “potential,” “ambitions,” “aspires” and similar expressions, and variations or negatives of these words, are intended to identify such forward-looking statements, but not all forward-looking statements include such words. These statements are not guarantees of future performance and are subject to numerous risks, uncertainties and other factors, many of which are beyond the company’s control and are difficult to predict. Please see “Cautionary Statements Relevant to Forward-Looking Information for the Purpose of ‘Safe Harbor’ Provisions of the Private Securities Litigation Reform Act of 1995” on page 33 for a discussion of some of the factors that could cause actual results to differ materially. The world demands energy to advance human progress, and we are proud to focus on providing it – affordably, reliably and in ever-cleaner ways. We believe in the power of human ingenuity to produce and deliver energy more efficiently and to help build a resilient, lower carbon energy system that can continue to meet growing energy demand and advance human progress. Printed on Rolland Enviro® Print 80lb. cover and Rolland Enviro® Satin 80lb. and 50lb. text. This paper contains 100% sustainable recycled fiber and is processed chlorine free. It is FSC® certified and designated Ancient Forest Friendly™. Permian Basin Texas & New Mexico Shale & tight 783,000 net barrels per day of oil-equivalent production in 2023 Chevron Corporation 6001 Bollinger Canyon Road San Ramon, CA 94583-2324 USA www.chevron.com © 2024 Chevron Corporation. All Rights Reserved. 912-0991 

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