
17.	REVENUES AND SEGMENT INFORMATION

Revenue from Contracts with Customers

Disaggregation of Revenue

Revenue is presented in the table below under “Segment Information” disaggregated by product because this is the level of disaggregation that management has determined to be beneficial to users of our financial statements.

Receivables from Contracts with Customers

Our receivables from contracts with customers are included in receivables, net as presented in Note 4.

Remaining Performance Obligations

The majority of our contracts with customers are spot contracts and therefore have no remaining performance obligations. Our remaining contracts with customers are primarily term contracts. The transaction price for these term contracts includes an immaterial fixed amount and variable consideration (i.e., a commodity price). The variable consideration is allocated entirely to a wholly unsatisfied promise to transfer a distinct good that forms part of a single performance obligation; therefore, the variable consideration is not included in the remaining performance obligation. As of December 31, 2018, after excluding contracts with an original expected duration of one year or less, the aggregate amount of the transaction price allocated to our remaining performance obligations was not material as the transaction price for these contracts includes only an immaterial fixed amount.

Segment Information

As of December 31, 2018, we had three reportable segments – refining, ethanol, and VLP. Each segment is a strategic business unit that offers different products and services by employing unique technologies and marketing strategies and whose operations and operating performance are managed and evaluated separately. Operating performance is measured based on the operating income generated by the segment, 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 is a description of each segment’s business operations.

•

The refining segment includes the operations of our 15 petroleum refineries, the associated marketing activities, and certain logistics assets that support our refining operations that are not owned by VLP. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks (e.g., conventional gasolines, premium gasolines, and gasoline meeting the specifications of the California Air Resources Board (CARB)), distillates (e.g., diesel, low-sulfur diesel, ultra-low-sulfur diesel, CARB diesel, jet fuel, and other distillates), and other products (e.g., asphalt, petrochemicals, lubricants, and other refined petroleum products).

•

The ethanol segment includes the operations of our 14 ethanol plants, the associated marketing activities, and logistics assets that support our ethanol operations. The principal products manufactured by our ethanol plants are ethanol and distillers grains. We sell some ethanol to our refining segment for blending into gasoline, which is sold to that segment’s customers as a finished gasoline product.


•	The VLP segment includes the results of VLP. VLP generates revenue from transportation and terminaling activities provided to our refining segment. All of VLP’s revenues are intersegment revenues that are generated under commercial agreements with our refining segment. Revenues generated under these agreements are eliminated in consolidation.

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

The following tables reflect information about our operating income and total expenditures for long-lived assets by reportable segment (in millions):



	Refining		Ethanol		VLP		Corporate and Eliminations			Total
Year ended December 31, 2018:
Revenues:
Revenues from external customers	$	113,601	$	3,428	$	—	$	4		$	117,033
Intersegment revenues	14		210		546		(770		)	—
Total revenues	113,615		3,638		546		(766		)	117,033
Cost of sales:
Cost of materials and other	102,489		3,008		—		(765		)	104,732
Operating expenses (excluding depreciation and amortization expense reflected below)	4,099		470		125		(4		)	4,690
Depreciation and amortization expense	1,863		78		76		—			2,017
Total cost of sales	108,451		3,556		201		(769		)	111,439
Other operating expenses	45		—		—		—			45
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		925			925
Depreciation and amortization expense	—		—		—		52			52
Operating income by segment	$	5,119	$	82	$	345	$	(974	)	$	4,572
Total expenditures for long-lived assets (a)	$	2,935	$	373	$	24	$	44		$	3,376

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See note on page 126.



	Refining		Ethanol		VLP		Corporate and Eliminations			Total
Year ended December 31, 2017:
Revenues:
Revenues from external customers	$	90,651	$	3,324	$	—	$	5		$	93,980
Intersegment revenues	6		176		452		(634		)	—
Total 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)	3,959		443		104		(2		)	4,504
Depreciation and amortization expense	1,800		81		53		—			1,934
Total cost of sales	86,624		3,328		157		(634		)	89,475
Other operating expenses	58		—		3		—			61
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		829			829
Depreciation and amortization expense	—		—		—		52			52
Operating income by segment	$	3,975	$	172	$	292	$	(876	)	$	3,563
Total expenditures for long-lived assets (a)	$	1,710	$	84	$	110	$	44		$	1,948



Year Ended December 31, 2016:
Revenues:
Revenues from external customers	$	71,968		$	3,691		$	—	$	—		$	75,659
Intersegment revenues	—			210			363		(573		)	—
Total 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)	3,740			415			96		—			4,251
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	68,182			3,561			142		(573		)	71,312
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—			—			—		709			709
Depreciation and amortization expense	—			—			—		48			48
Asset impairment loss	56			—			—		—			56
Operating income by segment	$	3,730		$	340		$	221	$	(757	)	$	3,534
Total expenditures for long-lived assets (a)	$	1,867		$	68		$	23	$	38		$	1,996

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(a)	Total expenditures for long-lived assets includes amounts related to capital expenditures, deferred turnaround and catalyst costs, and property, plant, and equipment for acquisitions.

The following table provides a disaggregation of revenues by reportable segment (in millions). Refining and ethanol segment revenues are disaggregated for our principal products, and VLP segment revenues are disaggregated by activity type.



	Year Ended December 31,
	2018			2017			2016
Refining:
Gasolines and blendstocks	$	46,606		$	40,366		$	33,450
Distillates	55,546			42,074			32,576
Other product revenues	11,463			8,217			5,942
Total refining revenues	113,615			90,657			71,968
Ethanol:
Ethanol	2,912			2,940			3,315
Distillers grains	726			560			586
Total ethanol revenues	3,638			3,500			3,901
VLP:
Pipeline transportation	124			101			78
Terminaling	415			348			284
Storage and other	7			3			1
Total VLP revenues	546			452			363
Corporate – other revenues	4			5			—
Elimination of intersegment revenues	(770		)	(634		)	(573		)
Revenues	$	117,033		$	93,980		$	75,659

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 revenues.



	Year Ended December 31,
	2018		2017		2016
U.S.	$	82,992	$	66,614	$	51,479
Canada	9,211		7,039		6,115
U.K. and Ireland	15,208		11,556		10,797
Other countries	9,622		8,771		7,268
Revenues	$	117,033	$	93,980	$	75,659

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,
	2018		2017
U.S.	$	27,475	$	26,083
Canada	1,798		1,915
U.K. and Ireland	1,113		1,063
Other countries	266		—
Total long-lived assets	$	30,652	$	29,061

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



	December 31,
	2018		2017
Refining	$	42,673	$	40,382
Ethanol	1,691		1,344
VLP	1,620		1,517
Corporate and eliminations	4,171		6,915
Total assets	$	50,155	$	50,158

As of December 31, 2018 and 2017, our investments in joint ventures accounted for under the equity method were $542 million and $530 million, respectively, all of which related to the refining segment and are reflected in “deferred charges and other assets, net” as presented in Note 7.

Effective January 1, 2019, 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 — renewable diesel — because of the growing importance of renewable fuels in the market and the growth of our investments in renewable fuels production. The renewable diesel segment includes the operations of DGD, our consolidated joint venture as discussed in Note 12. The operations of DGD have been included in the refining segment through December 31, 2018, but were transferred from that segment on January 1, 2019. Also effective January 1, 2019, we no longer have a VLP segment, and we include the operations of VLP in our refining segment. This change was made because of the Merger Transaction with VLP, as described in Note 2, and the resulting change in how we manage VLP’s operations. We no longer manage VLP as a business but as logistics assets that support the operations of our refining segment.