were associated with environmental remediation of properties that had been sold or idled and ongoing Unocal corporate-level activities. Interest expense also was higher in 2005 due to an increase in interest rates and the debt assumed with the Unocal acquisition.

     The improvement between 2003 and 2004 was primarily associated with the company’s investment in Dynegy, including gains from the redemption of certain Dynegy securities, higher interest income, lower interest expense and the favorable corporate-level tax adjustments.

     Net special-item gains in 2003 included a Dynegy-related net benefit of $325 million, which was composed of a gain of $365 million from the exchange of the company’s investment in Dynegy securities that was partially offset by a $40 million charge for Chevron’s share of an asset impairment by Dynegy. Other special-item charges were for asset write-downs of $84 million, primarily in Chevron’s gasification business, and employee severance costs of $16 million.

CONSOLIDATED STATEMENT OF INCOME

Comparative amounts for certain income statement categories are shown below. Amounts associated with special items in the comparative periods are also indicated to assist in the explanation of the period-to-period changes. Besides the information in this section, separately disclosed on the face of the Consolidated Statement of Income are a gain from the exchange of Dynegy securities and the cumulative effect of changes in accounting principles. These matters are discussed elsewhere in Management’s Discussion and Analysis and in Note 27 to the Consolidated Financial Statements, on page FS-62. Refer to the Results of Operations section, beginning of page FS-7, for additional information relating to special-item gains and charges.

     Sales and other operating revenues in 2005 increased over 2004 and 2003 due primarily to higher prices for crude oil, natural gas and refined products worldwide. The amount in 2005 also included revenues for five months from former Unocal operations.

     Improved results for Tengizchevroil and Hamaca (Venezuela) accounted for nearly three-fourths of the increased income from equity affiliates in 2005. Profits in 2005 also increased at the company’s CPChem and Dynegy affiliates. The improvement in 2004 from 2003 was the result of higher earnings from the company’s downstream affiliates in the Asia-Pacific area, Tengizchevroil, CPChem, Dynegy and the Caspian Pipeline Consortium. Refer to Note 13, beginning on page FS-44, for a discussion of Chevron’s investment in affiliated companies.

 Other income in 2005 included no special-item gains or losses; however, net special-item gains relating to upstream property sales were nearly $1.3 billion in 2004 and more than $200 million in 2003. The increase from 2003 through 2005 was otherwise partly due to higher interest income in each period – $400 million in 2005, $200 million in 2004 and $120 million in 2003 – on higher average interest rates and balances of cash and marketable securities. Foreign currency losses were $60 million in both 2005 and 2004 and about $200 million in 2003.

     Crude oil and product purchases in 2005 increased