Operating Data” table, on page FS-11, for the three-year comparative refined-product sales volumes in the United States. Refer also to Note 14, Accounting for Buy/Sell Contracts, on page FS-43 for a discussion of the accounting for purchase and sale contracts with the same counterparty.

International Downstream – Refining, Marketing and Transportation

     International downstream income of $2 billion in 2006 increased about $250 million from 2005 and about $50 million from 2004. The increase in 2006 from 2005 was associated mainly with the benefit of higher-refined product margins in Asia-Pacific and Canada and improved results from crude-oil and refined-product trading activities. The decrease in earnings in 2005 from 2004 was due mainly to lower sales volumes; higher costs for fuel and transportation; expenses associated with a fire at a 40 percent-owned, nonoperated terminal in the United Kingdom; and tax adjustments in various countries. These items more than offset an improvement in average refined-product margins between periods. Foreign currency effects improved income by $98 million and $7 million in 2006 and 2004, respectively, but reduced income by $24 million in 2005.

Refined-product sales volumes were 2.1 million barrels per day in 2006, about 6 percent lower than 2005. Excluding the accounting change for buy/sell contracts, sales were down 1 percent between 2005 and 2006. Refined-product sales volume of 2.3 million barrels per day in 2005 were about 4 percent lower than in 2004, primarily the result of lower gasoline trading activity and lower fuel oil sales. Refer to the “Selected Operating Data” table, on page FS-11, for the three-year comparative refined-product sales volumes in the international areas.

Chemicals

     The chemicals segment includes the company’s Oronite subsidiary and the 50 percent-owned Chevron Phillips Chemical Company LLC (CPChem). In 2006, earnings of $539 million increased about $200 million from both 2005 and 2004. Margins in 2006 for commodity chemicals at CPChem and for fuel and lubricant additives at Oronite were higher than in 2005 and 2004. The earnings decline from 2004 to 2005 was mainly attributable to plant outages and expenses in the Gulf of Mexico region due to hurricanes, which affected both Oronite and CPChem.

All Other

     All Other consists of the company’s interest in Dynegy Inc., mining operations, power generation businesses, worldwide cash management and debt financing activities, corporate administrative functions, insurance operations, real estate activities, and technology companies.

     Net charges of $516 million in 2006 decreased $173 million from $689 million in 2005. Excluding the effects of foreign currency, net charges declined $60 million between periods. Interest income was higher in 2006, and interest expense was lower.

     Between 2004 and 2005, net charges increased $669 million. Excluding the effects of foreign exchange, net charges increased $574 million. Approximately $400 million of the increase was related to larger benefits in 2004 from

corporate-level tax adjustments. Higher charges in 2005 also were associated with environmental remediation of