
16.	SEGMENT INFORMATION

Effective January 1, 2017, we revised our reportable segments to align with certain changes in how our chief operating decision maker manages and allocates resources to our business. Accordingly, we created a new reportable segment — VLP. The results of the VLP segment, which include the results of our majority-owned master limited partnership referred to by the same name, were transferred from the refining segment. Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

As a result, we have three reportable segments as follows:


•	Refining segment includes our refining operations, the associated marketing activities, and certain logistics assets, which are not owned by VLP, that support our refining operations;


•	Ethanol segment includes our ethanol operations, the associated marketing activities, and logistics assets that support our ethanol operations; and


•	VLP segment includes the results of VLP, which provides transportation and terminaling services to our refining segment.

Operations that are not included in any of the reportable segments are included in the corporate category.

Our reportable segments are strategic business units that offer different products and services. They are managed separately as each business requires unique technologies and marketing strategies. Performance is evaluated based on segment operating income, which includes revenues and expenses that are directly attributable to the management of the respective segment. Intersegment sales are generally derived from transactions made at prevailing market rates.

The following table reflects activity related to our reportable segments (in millions):



	Refining		Ethanol		VLP		Corporate and Eliminations			Total
Year ended December 31, 2017:
Operating revenues:
Operating revenues from external customers	$	90,651	$	3,324	$	—	$	5		$	93,980
Intersegment revenues	6		176		452		(634		)	—
Total operating revenues	90,657		3,500		452		(629		)	93,980
Cost of sales:
Cost of materials and other	80,865		2,804		—		(632		)	83,037
Operating expenses (excluding depreciation and amortization expense reflected below)	3,917		443		104		(2		)	4,462
Depreciation and amortization expense	1,800		81		53		—			1,934
Total cost of sales	86,582		3,328		157		(634		)	89,433
Other operating expenses	58		—		3		—			61
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		835			835
Depreciation and amortization expense	—		—		—		52			52
Operating income by segment	$	4,017	$	172	$	292	$	(882	)	$	3,599
Total expenditures for long-lived assets	$	1,710	$	84	$	110	$	44		$	1,948



Year ended December 31, 2016:
Operating revenues:
Operating revenues from external customers	$	71,968		$	3,691		$	—	$	—		$	75,659
Intersegment revenues	—			210			363		(573		)	—
Total operating revenues	71,968			3,901			363		(573		)	75,659
Cost of sales:
Cost of materials and other	63,405			3,130			—		(573		)	65,962
Operating expenses (excluding depreciation and amortization expense reflected below)	3,696			415			96		—			4,207
Depreciation and amortization expense	1,734			66			46		—			1,846
Lower of cost or market inventory valuation adjustment	(697		)	(50		)	—		—			(747		)
Total cost of sales	68,138			3,561			142		(573		)	71,268
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—			—			—		715			715
Depreciation and amortization expense	—			—			—		48			48
Asset impairment loss	56			—			—		—			56
Operating income by segment	$	3,774		$	340		$	221	$	(763	)	$	3,572
Total expenditures for long-lived assets	$	1,867		$	68		$	23	$	38		$	1,996



	Refining		Ethanol		VLP		Corporate and Eliminations			Total
Year Ended December 31, 2015:
Operating revenues:
Operating revenues from external customers	$	84,521	$	3,283	$	—	$	—		$	87,804
Intersegment revenues	—		151		244		(395		)	—
Total operating revenues	84,521		3,434		244		(395		)	87,804
Cost of sales:
Cost of materials and other	71,512		2,744		—		(395		)	73,861
Operating expenses (excluding depreciation and amortization expense reflected below)	3,689		448		106		—			4,243
Depreciation and amortization expense	1,699		50		46		—			1,795
Lower of cost or market inventory valuation adjustment	740		50		—		—			790
Total cost of sales	77,640		3,292		152		(395		)	80,689
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		710			710
Depreciation and amortization expense	—		—		—		47			47
Operating income by segment	$	6,881	$	142	$	92	$	(757	)	$	6,358
Total expenditures for long-lived assets	$	2,216	$	67	$	38	$	29		$	2,350

Our principal products include conventional and California Air Resources Board gasolines, RBOB (reformulated gasoline blendstock for oxygenate blending), gasoline blendstocks, ultra-low-sulfur diesel, middle distillates, and jet fuel. Other product revenues primarily include petrochemicals, gas oils, No. 6 fuel oil, petroleum coke, sulfur, and asphalt. Operating revenues from external customers by reportable segment for our principal products were as follows (in millions):



	Year Ended December 31,
	2017		2016		2015
Refining:
Gasolines and blendstocks	$	40,362	$	33,450	$	38,983
Distillates	42,074		32,576		38,093
Other product revenues	8,215		5,942		7,445
Total refining revenues	90,651		71,968		84,521
Ethanol:
Ethanol	2,764		3,105		2,628
Distillers grains	560		586		655
Total ethanol revenues	3,324		3,691		3,283
Corporate – other revenues	5		—		—
Total revenues from external customers	$	93,980	$	75,659	$	87,804

Operating revenues by geographic area are shown in the following table (in millions). The geographic area is based on location of customer and no customer accounted for 10 percent or more of our operating revenues.



	Year Ended December 31,
	2017		2016		2015
U.S.	$	66,614	$	51,479	$	60,319
Canada	7,039		6,115		6,841
U.K. and Ireland	11,556		10,797		11,232
Other countries	8,771		7,268		9,412
Total operating revenues	$	93,980	$	75,659	$	87,804

Long-lived assets include property, plant, and equipment and certain long-lived assets included in “deferred charges and other assets, net.” Long-lived assets by geographic area consisted of the following (in millions):



	December 31,
	2017		2016
U.S.	$	26,083	$	25,359
Canada	1,915		1,816
U.K. and Ireland	1,063		967
Total long-lived assets	$	29,061	$	28,142

Total assets by reportable segment were as follows (in millions):



	December 31,
	2017		2016
Refining	$	40,382	$	38,095
Ethanol	1,344		1,316
VLP	1,517		979
Corporate and eliminations	6,915		5,783
Total assets	$	50,158	$	46,173