Revenues and Segment Information

12 Months Ended

Dec. 31, 2019

Segment Reporting [Abstract]

REVENUES AND SEGMENT INFORMATION

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 3.

Contract Liabilities from Contracts with Customers

Our contract liabilities from contracts with customers are included in accrued expenses as presented in Note 8. Substantially all of the contract liabilities as of December 31, 2018 were recognized into revenue during the year ended December 31, 2019.

Remaining Performance Obligations

We have spot and term contracts with customers, the majority of which are spot contracts with no remaining performance obligations. We do not disclose remaining performance obligations for contracts that have terms of one year or less. The transaction price for our remaining term contracts includes a fixed component and variable consideration (i.e., a commodity price), both of which are allocated entirely to a wholly unsatisfied promise to transfer a distinct good that forms part of a single performance obligation. The fixed component is not material and the variable consideration is highly uncertain. Therefore, as of December 31, 2019, we have not disclosed the aggregate amount of the transaction price allocated to our remaining performance obligations.

Segment Information

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, which were transferred from the refining 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. Our prior period segment information has been retrospectively adjusted to reflect our current segment presentation.

We have three reportable segments — refining, ethanol, and renewable diesel. 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 logistics assets that support our refining operations. The principal products manufactured by our refineries and sold by this segment include gasolines and blendstocks, distillates, and other 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. This segment sells some ethanol to the refining segment for blending into gasoline, which is sold to that segment’s customers as a finished gasoline product.

• The renewable diesel segment includes the operations of DGD, our consolidated joint venture as discussed in Note 12. The principal product manufactured by DGD and sold by this segment is renewable diesel. This segment sells some renewable diesel to the refining segment, which is then sold to that segment’s customers.

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		Renewable Diesel		Corporate and Eliminations			Total
Year ended December 31, 2019
Revenues:
Revenues from external customers	$	103,746	$	3,606	$	970	$	2		$	108,324
Intersegment revenues	18		231		247		(496		)	—
Total revenues	103,764		3,837		1,217		(494		)	108,324
Cost of sales:
Cost of materials and other	93,371		3,239		360		(494		)	96,476
Operating expenses (excluding depreciation and amortization expense reflected below)	4,289		504		75		—			4,868
Depreciation and amortization expense	2,062		90		50		—			2,202
Total cost of sales	99,722		3,833		485		(494		)	103,546
Other operating expenses	20		1		—		—			21
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		868			868
Depreciation and amortization expense	—		—		—		53			53
Operating income by segment	$	4,022	$	3	$	732	$	(921	)	$	3,836
Total expenditures for long-lived assets (a)	$	2,581	$	47	$	160	$	58		$	2,846

^{__________________________} 

(a) See note on page 123.

	Refining		Ethanol		Renewable Diesel		Corporate and Eliminations			Total
Year ended December 31, 2018
Revenues:
Revenues from external customers	$	113,093	$	3,428	$	508	$	4		$	117,033
Intersegment revenues	25		210		170		(405		)	—
Total revenues	113,118		3,638		678		(401		)	117,033
Cost of sales:
Cost of materials and other	101,866		3,008		262		(404		)	104,732
Operating expenses (excluding depreciation and amortization expense reflected below)	4,154		470		66		—			4,690
Depreciation and amortization expense	1,910		78		29		—			2,017
Total cost of sales	107,930		3,556		357		(404		)	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	$	5,143	$	82	$	321	$	(974	)	$	4,572
Total expenditures for long-lived assets (a)	$	2,767	$	373	$	192	$	44		$	3,376

Year ended December 31, 2017
Revenues:
Revenues from external customers	$	90,258	$	3,324	$	393	$	5		$	93,980
Intersegment revenues	8		176		241		(425		)	—
Total revenues	90,266		3,500		634		(420		)	93,980
Cost of sales:
Cost of materials and other	80,160		2,804		498		(425		)	83,037
Operating expenses (excluding depreciation and amortization expense reflected below)	4,014		443		47		—			4,504
Depreciation and amortization expense	1,824		81		29		—			1,934
Total cost of sales	85,998		3,328		574		(425		)	89,475
Other operating expenses	61		—		—		—			61
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		829			829
Depreciation and amortization expense	—		—		—		52			52
Operating income by segment	$	4,207	$	172	$	60	$	(876	)	$	3,563
Total expenditures for long-lived assets (a)	$	1,732	$	84	$	88	$	44		$	1,948

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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 from external customers for our principal products by reportable segment (in millions).

	Year Ended December 31,
	2019		2018		2017
Refining:
Gasolines and blendstocks	$	42,798	$	46,596	$	40,347
Distillates	51,942		55,037		41,680
Other product revenues	9,006		11,460		8,231
Total refining revenues	103,746		113,093		90,258
Ethanol:
Ethanol	2,889		2,713		2,764
Distillers grains	717		715		560
Total ethanol revenues	3,606		3,428		3,324
Renewable diesel:
Renewable diesel	970		508		393
Corporate – other revenues	2		4		5
Revenues	$	108,324	$	117,033	$	93,980

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,
	2019		2018		2017
U.S.	$	77,173	$	82,992	$	66,614
Canada	7,915		9,211		7,039
U.K. and Ireland	13,584		15,208		11,556
Other countries	9,652		9,622		8,771
Revenues	$	108,324	$	117,033	$	93,980

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,
	2019		2018
U.S.	$	27,485	$	27,475
Canada	1,886		1,798
U.K. and Ireland	1,232		1,113
Other countries	497		266
Total long-lived assets	$	31,100	$	30,652

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

	December 31,
	2019		2018
Refining	$	47,067	$	43,488
Ethanol	1,615		1,691
Renewable diesel	1,412		787
Corporate and eliminations	3,770		4,189
Total assets	$	53,864	$	50,155

As of December 31, 2019 and 2018, our investments in unconsolidated joint ventures accounted for under the equity method were $942 million and $542 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.