Although each subsidiary of Chevron is responsible for its own affairs, Chevron Corporation manages its investments in these subsidiaries and their affiliates. For this purpose, the investments are grouped as follows: upstream — exploration and production; downstream — refining, marketing and transportation; chemicals; and all other. The first three of these groupings represent the company's "reportable segments" and "operating segments" as defined in Financial Accounting Standards Board (FASB) Statement No. 131, Disclosures About Segments of an Enterprise and Related Information (FAS 131).

The segments are separately managed for investment purposes under a structure that includes "segment managers" who report to the company's "chief operating decision maker" (CODM) (terms as defined in FAS 131). The CODM is the company's Executive Committee, a committee of senior officers that includes the Chief Executive Officer and that, in turn, reports to the Board of Directors of Chevron Corporation.

The operating segments represent components of the company as described in FAS 131 terms 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 to assess their performance; and (c) for which discrete financial information is available.

Segment managers for the reportable segments are accountable directly to and maintain regular contact with the company's CODM to discuss the segment's operating activities and financial performance. The CODM approves annual capital and exploratory budgets at the reportable segment level, as well as reviews capital and exploratory funding for major projects and approves major changes to the annual capital and exploratory budgets. However, business-unit managers within the operating segments are directly responsible for decisions relating to project implementation and all other matters connected with daily operations. Company officers who are members of the Executive Committee also have individual management responsibilities and participate in other committees for purposes other than acting as the CODM.

"All Other" activities include the company's interest in Dynegy (through May 2007, when Chevron sold its interest), mining operations, power generation businesses, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, alternative fuels, and technology companies.

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

Segment Earnings

The company evaluates the performance of its operating segments on an after-tax basis, without considering the effects of debt financing interest expense or investment interest income, both of which are managed by the company on a worldwide basis. Corporate administrative costs and assets are not allocated to the operating segments. However, operating segments are billed for the direct use of corporate services. Nonbillable costs remain at the corporate level in "All Other." After-tax segment income by major operating area is presented in the following table:

Year ended December 31
2008 2007 2006
Income by Major Operating Area
Upstream
United States $7,126 $4,532 $4,270
International 14,584 10,284 8,872
Total Upstream 21,710 14,816 13,142
Downstream
United States 1,369 966 1,938
International 2,060 2,536 2,035
Total Downstream 3,429 3,502 3,973
Chemicals
United States 22 253 430
International 160 143 109
Total Chemicals 182 396 539
Total Segment Income 25,321 18,714 17,654
All Other
Interest expense – (107) (312)
Interest income 192 385 380
Other (1,582) (304) (584)
Net Income $23,931 $18,688 $17,138

Segment Assets

Segment assets do not include intercompany investments or intercompany receivables. Segment assets at year‑end 2008 and 2007 are as follows:

At December 31
2008 2007
*

"All Other" assets consist primarily of worldwide cash, cash equivalents and marketable securities, real estate, information systems, mining operations, power generation businesses, technology companies, and assets of the corporate administrative functions.
Upstream
United States $26,071 $23,535
International 72,530 61,049
Goodwill 4,619 4,637
Total Upstream 103,220 89,221
Downstream
United States 15,869 16,790
International 23,572 26,075
Total Downstream 39,441 42,865
Chemicals
United States 2,535 2,484
International 1,086 870
Total Chemicals 3,621 3,354
Total Segment Assets 146,282 135,440
All Other*
United States 8,984 6,847
International 5,899 6,499
Total All Other 14,883 13,346
Total Assets – United States 53,459 49,656
Total Assets – International 103,087 94,493
Goodwill 4,619 4,637
Total Assets $161,165 $148,786

Segment Sales and Other Operating Revenues

Operating segment sales and other operating revenues, including internal transfers, for the years 2008, 2007 and 2006 are presented in the table on the following 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, kerosene, lubricants, residual fuel oils and other products derived from crude oil. This segment also generates revenues from the transportation and trading of crude oil and refined products. Revenues for the chemicals segment are derived primarily from the manufacture and sale of additives for lubricants and fuel. "All Other" activities include revenues from mining operations of coal and other minerals, power generation businesses, insurance operations, real estate activities, and technology companies.

Other than the United States, no single country accounted for 10 percent or more of the company’s total sales and other operating revenues in 2008.

Year ended December 31
2008 2007 2006
*

Includes buy/sell contracts of $6,725 in 2006. Substantially all of the amounts relate to the downstream segment. Refer to Note 14, for a discussion of the company's accounting for buy/sell contracts.
Upstream
United States $23,503 $18,736 $18,061
Intersegment 15,142 11,625 10,069
Total United States 38,645 30,361 28,130
International 19,469 15,213 14,560
Intersegment 24,204 19,647 17,139
Total International 43,673 34,860 31,699
Total Upstream 82,318 65,221 59,829
Downstream
United States 87,515 70,535 69,367
Excise and similar taxes 4,746 4,990 4,829
Intersegment 447 491 533
Total United States 92,708 76,016 74,729
International 122,064 97,178 91,325
Excise and similar taxes 5,044 5,042 4,657
Intersegment 122 38 37
Total International 127,230 102,258 96,019
Total Downstream 219,938 178,274 170,748
Chemicals
United States 305 351 372
Excise and similar taxes 2 2 2
Intersegment 266 235 243
Total United States 573 588 617
International 1,388 1,143 959
Excise and similar taxes 55 86 63
Intersegment 154 142 160
Total International 1,597 1,371 1,182
Total Chemicals 2,170 1,959 1,799
All Other
United States 815 757 653
Intersegment 917 760 584
Total United States 1,732 1,517 1,237
International 52 58 44
Intersegment 33 31 23
Total International 85 89 67
Total All Other – 1,606 1,304
Segment Sales and Other Operating Revenues
United States 133,658 108,482 104,713
International 172,585 138,578 128,967
Total Segment Sales and Other Operating Revenues 306,243 247,060 233,680
Elimination of intersegment sales (41,285) (32,969) (28,788)
Total Sales and Other Operating Revenues* $264,958 $214,091 $204,892

Segment Income Taxes

Segment income tax expense for the years 2008, 2007 and 2006 are as follows:

Year ended December 31
2008 2007 2006
Upstream
United States $3,693 $2,541 $2,668
International 15,132 11,307 10,987
Total Upstream 18,825 13,848 13,655
Downstream
United States 815 520 1,162
International 813 400 586
Total Downstream 1,628 920 1,748
Chemicals
United States (22) 6 213
International 47 36 30
Total Chemicals 25 42 243
All Other (1,452) (1,331) (808)
Total Income Tax Expense $19,026 $13,479 $14,838

Other Segment Information

Additional information for the segmentation of major equity affiliates is contained in Note 12. Information related to properties, plant and equipment by segment is contained in Note 13.