CVX Chevron Corporation 10-Q 2026-09-30 section summaries

Chevron Corporation — Q3 and nine months ended September 30, 2026

Consolidated results

Higher upstream realizations and sales volumes, stronger downstream refined-product margins, and increased equity-affiliate income drove the earnings improvement. Equity-affiliate income was $2.097 billion in Q3 (from $981 million) and $4.967 billion for 9M (from $2.337 billion). Purchased crude oil and products, the largest cost line, rose to $36.534 billion from $27.398 billion in Q3 and to $101.406 billion from $82.866 billion for 9M. Higher depreciation, depletion and amortization also partly offset pretax growth. The effective tax rate fell to 26% from 33% in Q3 and to 28% from 36% for 9M, reflecting jurisdictional earnings mix and fewer unfavorable current-period tax items.

Segment results

All Other reconciles segment net income to Chevron’s consolidated net income. Segment revenue growth was especially strong in downstream: U.S. revenue increased 43% and international revenue 41% year over year. For 9M, segment revenue/net income were: Upstream U.S. $17.795B/$8.946B (from $14.090B/$4.558B); Upstream International $31.212B/$8.843B (from $24.564B/$5.229B); Downstream U.S. $64.877B/$6.192B (from $50.211B/$1.145B); Downstream International $66.044B/$2.790B (from $49.707B/$1.054B); and All Other $64M/$(2.565)B (from $73M/$(2.457)B).

Cash flow, balance sheet and shares

Working capital used $2.218 billion of cash, including an $8.098 billion increase in receivables partly offset by a $7.242 billion increase in accounts payable and accrued liabilities. Financing cash outflow was $24.931 billion (from $11.691 billion); Chevron paid $10.512 billion in common dividends and made $6.708 billion of net treasury-share purchases. It issued $99 million of long-term debt and repaid $3.088 billion. Cash, cash equivalents and restricted cash ended September at $13.919 billion, up $6.634 billion during 9M; the quarterly dividend increased to $1.78 per share from $1.71.

Long-term debt’s net carrying value, excluding short-term debt and finance leases, was $22.8 billion, compared with $28.5 billion at year-end; its fair value was $21.7 billion versus $28.6 billion. Q3 diluted weighted-average shares were 1.963 billion versus 1.946 billion; 9M diluted weighted-average shares were 1.975 billion versus 1.808 billion. The prior-year comparison reflects Hess-acquisition share issuance.

Volatility, obligations and material developments

Commodity-price volatility associated with Middle East conflict generated unusually large derivative losses: $1.965 billion in Q3 (versus $38 million) and $4.709 billion for 9M (versus $166 million). Most flowed through sales and other operating revenues: losses of $1.871 billion in Q3 and $4.570 billion for 9M. Chevron said it had sufficient liquidity for generally short-term collateral needs. Its net short derivative position declined to about 20 million barrels of oil-equivalent from 29 million.

Chevron reported $18.7 billion of net customer-contract receivables, versus $12.3 billion at year-end, and a $400 million expected-credit-loss allowance, versus $392 million. The $1.9 billion recorded liability for decommissioning obligations on previously divested assets could increase if current owners default. Chevron also faces 35 climate-related lawsuits and 34 Louisiana coastal-damage cases. In the Plaquemines Parish case, a 2025 jury awarded $744.6 million; Chevron has accrued $131 million, disputes the verdict and intends to appeal. The company cannot estimate potential losses beyond the accrual; adverse outcomes or remediation obligations could materially affect results.

Chevron acquired Hess in July 2025 for approximately $48.0 billion, issuing 301.25 million shares at closing and assuming debt with $8.8 billion of aggregate outstanding principal. The acquisition-date allocation included $79.5 billion of assets and $26.5 billion of liabilities, with no goodwill or bargain purchase. Hess contributed $2.906 billion of revenue and a $129 million net loss attributable to Chevron from acquisition through September 30, 2025.

On October 6, 2026, Chevron agreed to transfer its Hess Midstream interests and contribute DJ Basin crude midstream assets in exchange for amended long-term service arrangements. Closing is expected by year-end, subject to approvals. Chevron expects to derecognize approximately $13.2 billion of assets and $5.4 billion of liabilities, including $3.7 billion of Hess Midstream debt, and record a preliminary after-tax loss of approximately $3–4 billion. The company expects the amended arrangements to reduce midstream costs by approximately 50% and improve flexibility in Bakken operations.

Chevron (CVX) — Q3 and first nine months of 2026

Consolidated results

Revenue growth principally reflected higher crude-oil and refined-product prices. Geopolitical disruptions tightened refined-product supply and supported margins, but Chevron cautioned that the duration of disruptions and elevated margins is uncertain. Higher purchased-product costs, SG&A and DD&A accompanied the increase in activity and prices. Equity-affiliate income benefited from stronger TCO and Petropiar upstream results, GS Caltex refining, and CPChem chemical margins.

Segment earnings

Higher realizations and downstream margins drove earnings growth. U.S. Upstream’s Q3 improvement included $1.5B from higher liquids realizations and $590M of lower operating expenses; 9M gains also reflected higher sales volumes, partly offset by $1.2B of higher DD&A. International Upstream benefited from higher realizations and 9M volume gains, but Q3 was affected by lower entitlements as prices rose, Middle East impacts, and legal and impairment charges. Downstream gains were led by higher refined-product margins; International Downstream also had $260M of 9M asset-sale gains. All Other’s 9M charges increased mainly from employee-benefit costs and interest expense.

Commodity-price timing effects—primarily derivative mark-to-market and LIFO impacts—were unfavorable $2.9B in Q1, favorable $1.5B in Q2 and unfavorable $1.6B in Q3, a net unfavorable $3.0B for 9M. These effects are expected to unwind over time; rising commodity prices generally create unfavorable timing effects.

Operating metrics

9M production increased 10%, mainly due to Hess and Gulf of America and Permian growth, partly offset by lower TCO production. U.S. production rose 14% for 9M; International production fell 5% in Q3 but rose 5% for 9M, reflecting different period effects, including Hess growth and Middle East curtailments. Refinery inputs were up 3% in the U.S. in Q3, with refineries operating reliably near capacity. International product sales fell amid Middle East-related supply disruption; 9M international refinery inputs were also affected by a Thailand turnaround.

Cash flow, investment and shareholder returns

Higher commodity prices, downstream margins and TCO distributions supported 9M operating cash flow. Capital spending rose $529M, mainly from legacy Hess assets, partly offset by lower Permian spending. 9M international upstream capex increased to $5.632B from $3.967B, while U.S. upstream capex decreased to $6.046B from $7.209B. Affiliate capex, which does not require Chevron cash outlays, was $918M versus $1.359B.

Chevron paid $10.5B in common dividends during 9M and declared a $1.78-per-share quarterly dividend in October. Under its $75B repurchase authorization, it repurchased 12.9M shares for $2.5B in Q3; cumulative repurchases were 294M shares for $46.5B. Management expected Q4 repurchases of $2.5B–$3.0B, but buybacks remain discretionary.

Liquidity, leverage and developments

Cash, cash equivalents and marketable securities were $12.8B at September 30, 2026, versus $6.3B at year-end 2025. Debt and finance-lease liabilities declined to $33.5B from $40.8B; commercial paper fell to $808M from $4.6B. Current ratio was 1.3 versus 1.2; debt ratio 14.7% versus 17.9%; net debt ratio 9.6% versus 15.6%; debt-to-CFFO 0.6x versus 1.2x; and net debt-to-CFFO 0.4x versus 1.0x. Chevron had $11.4B of committed 364-day credit facilities with no borrowings outstanding. Its debt ratings were AA- from S&P and Aa2 from Moody’s. Sustained low oil and gas prices or narrow refining and chemical margins could lead it to reduce capex, curtail buybacks, sell assets or borrow to maintain dividends; preserving high-quality ratings is a priority.

Chevron began equity-method accounting for its Venezuelan Petroboscan, Petropiar and Petroindependencia ventures on September 1 under revised terms. It expects no significant change in the amount or timing of earnings recognition, while future earnings and cash flows depend on commodity prices, operations and distributions. Other developments included Angola and Libya exploration activity, the start of production at the Destrehan renewable-feedstock facility, and revised Hess Midstream arrangements targeting roughly 50% lower Bakken midstream costs. Chevron expects $1–2B of annual asset-sale proceeds through 2030; the announced Singapore and regional downstream-assets sale is expected to close in 2027.

Key exposures include commodity prices, OPEC+ actions, geopolitical disruptions, refining and chemical margins, operating outages, service and equipment costs, tanker rates, and evolving climate and environmental regulation. Middle East conflict has affected Partitioned Zone production and CPChem assets in Saudi Arabia and Qatar, while raising shipping and insurance risks; escalation could further disrupt supply and logistics. Chevron also highlighted risks to Tengiz exports through CPC infrastructure, Russia-related sanctions, and physical-security and cyber threats.

Chevron’s Item 3 provides no new quantitative market-risk metrics. It refers readers to its 2025 Form 10-K discussion of market risk from financial and derivative instruments and to Note 14 for information about commodity-price volatility associated with the ongoing Middle East conflict and its impact.

Disclosure Controls and Internal Control over Financial Reporting

As of September 30, 2026, Chevron’s CEO and CFO concluded that its disclosure controls and procedures were effective. During Q3 2026, no changes in internal control over financial reporting materially affected, or were reasonably likely to materially affect, those controls.

Risk Factors

For the nine months ended September 30, 2026, Chevron stated that its risk profile had not changed materially from the risks disclosed in its 2025 Form 10-K, except for a new risk arising from its Hess Midstream transaction.

Under agreements entered into October 6, 2026, Chevron will transfer its Hess Midstream ownership interests and contribute crude midstream assets in the DJ Basin in exchange for restructuring and amending certain long-term commercial arrangements. The transaction is subject to customary closing conditions and regulatory approvals and is expected to close by year-end 2026. If closing is delayed or fails, Chevron could defer or lose anticipated benefits, including an approximately 50% reduction in Bakken unit midstream costs and improved earnings and return on capital employed.

Rule 10b5-1 Trading Plan

Chevron Chairman and CEO Michael K. Wirth entered a Rule 10b5-1 trading plan on August 20, 2026, while the trading window was open. The plan permits potential exercises of vested stock options and associated sales of up to 147,376 Chevron shares from November 19, 2026, through August 31, 2027. These are potential transactions, not completed sales. The plan is intended to comply with Rule 10b5-1(c) and Chevron’s securities-trading policies.