Variable Interest Entities

3 Months Ended

Mar. 31, 2019

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Consolidated VIEs

We consolidate a VIE when we have a variable interest in an entity for which we are the primary beneficiary. As of March 31, 2019, our significant consolidated VIEs included:


•	DGD, a joint venture with a subsidiary of Darling Ingredients Inc., which owns and operates a biodiesel plant that processes animal fats, used cooking oils, and other vegetable oils into renewable green diesel; and


•	Central Mexico Terminals, which is a collective group of three subsidiaries of Infraestructura Energetica Nova, S.A.B. de C.V. (IEnova), a Mexican company and subsidiary of Sempra Energy, a U.S. public company. We have terminaling agreements with Central Mexico Terminals that represent variable interests. We do not have an ownership interest in Central Mexico Terminals.

The VIEs’ assets can only be used to settle their own obligations and the VIEs’ creditors have no recourse to our assets. We do not provide financial guarantees to our VIEs. Although we have provided credit facilities to some of our VIEs in support of their construction or acquisition activities, these transactions are eliminated in consolidation. Our financial position, results of operations, and cash flows are impacted by our consolidated VIEs’ performance, net of intercompany eliminations, to the extent of our ownership interest in each VIE.

The following tables present summarized balance sheet information for the significant assets and liabilities of our VIEs, which are included in our balance sheets (in millions).



	March 31, 2019
	DGD		Central Mexico Terminals		Other		Total
Assets
Cash and cash equivalents	$	85	$	2	$	20	$	107
Other current assets	137		21		68		226
Property, plant, and equipment, net	584		140		111		835
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	35	$	157	$	67	$	259
Debt and finance lease obligations, less current portion	1		—		34		35
Other long-term liabilities	1		38		6		45



	December 31, 2018
	VLP (a)		DGD		Central Mexico Terminals		Other		Total
Assets
Cash and cash equivalents	$	152	$	65	$	—	$	18	$	235
Other current assets	2		112		20		64		198
Property, plant, and equipment, net	1,409		576		156		113		2,254
Liabilities
Current liabilities, including current portion of debt and finance lease obligations	$	27	$	28	$	118	$	9	$	182
Debt and finance lease obligations, less current portion	990		—		—		34		1,024
Other long-term liabilities	1		—		3		1		5

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(a)

Prior to the completion of the Merger Transaction with VLP on January 10, 2019 as discussed in Note 2, VLP was a publicly traded master limited partnership that we had determined was a VIE. VLP was formed by us to own, operate, develop, and acquire crude oil and refined petroleum products pipelines, terminals, and other transportation and logistics assets. As of December 31, 2018, we owned a 66.2 percent limited partner interest and a 2.0 percent general partner interest in VLP, and public unitholders owned a 31.8 percent limited partner interest. Upon completion of the Merger Transaction, VLP became our indirect wholly owned subsidiary and, as a result, was no longer a VIE.

Non-Consolidated VIEs

We hold variable interests in VIEs that have not been consolidated because we are not considered the primary beneficiary. These non-consolidated VIEs are not material to our financial position or results of operations and are primarily accounted for as equity investments. One of our non-consolidated VIEs is MVP, which is described in Note 6. As of March 31, 2019, our maximum exposure to loss was $303 million, which represents our equity investment in MVP. We have not provided any financial support to MVP other than amounts previously required by our membership interest.