Revenues and Segment Information

3 Months Ended

Mar. 31, 2020

12.

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.

Contract Balances

Contract balances were as follows (in millions):



	March 31, 2020		December 31, 2019		Decrease
Receivables from contracts with customers, included in receivables, net	$	2,965	$	5,610	$	(2,645	)
Contract liabilities, included in accrued expenses	19		55		(36		)

Receivables from contracts with customers is a component of “receivables, net” as presented on the balance sheet. The decrease in “receivables, net” is described in Note 13.

For the three months ended March 31, 2020, we recognized as revenue $52 million that was included in contract liabilities as of 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 March 31, 2020, we have not disclosed the aggregate amount of the transaction price allocated to our remaining performance obligations.

Segment Information

We have three reportable segments — refining, renewable diesel, and ethanol. 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 renewable diesel segment includes the operations of DGD, our consolidated joint venture as discussed in Note 8. 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.

•

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.

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 (loss) by reportable segment (in millions):



	Refining			Renewable Diesel		Ethanol			Corporate and Eliminations			Total
Three months ended March 31, 2020
Revenues:
Revenues from external customers	$	20,985		$	306	$	811		$	—		$	22,102
Intersegment revenues	2			53		64			(119		)	—
Total revenues	20,987			359		875			(119		)	22,102
Cost of sales:
Cost of materials and other	19,127			130		813			(118		)	19,952
LCM inventory valuation adjustment	2,414			—		128			—			2,542
Operating expenses (excluding depreciation and amortization expense reflected below)	995			20		109			—			1,124
Depreciation and amortization expense	536			11		22			—			569
Total cost of sales	23,072			161		1,072			(118		)	24,187
Other operating expenses	2			—		—			—			2
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—			—		—			177			177
Depreciation and amortization expense	—			—		—			13			13
Operating income (loss) by segment	$	(2,087	)	$	198	$	(197	)	$	(191	)	$	(2,277	)



	Refining		Renewable Diesel		Ethanol		Corporate and Eliminations			Total
Three months ended March 31, 2019
Revenues:
Revenues from external customers	$	23,218	$	252	$	793	$	—		$	24,263
Intersegment revenues	2		51		52		(105		)	—
Total revenues	23,220		303		845		(105		)	24,263
Cost of sales:
Cost of materials and other	21,165		224		694		(105		)	21,978
Operating expenses (excluding depreciation and amortization expense reflected below)	1,071		19		125		—			1,215
Depreciation and amortization expense	503		11		23		—			537
Total cost of sales	22,739		254		842		(105		)	23,730
Other operating expenses	2		—		—		—			2
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		209			209
Depreciation and amortization expense	—		—		—		14			14
Operating income by segment	$	479	$	49	$	3	$	(223	)	$	308

The following table provides a disaggregation of revenues from external customers for our principal products by reportable segment (in millions).



	Three Months Ended March 31,
	2020		2019
Refining:
Gasolines and blendstocks	$	8,244	$	9,374
Distillates	10,663		11,917
Other product revenues	2,078		1,927
Total refining revenues	20,985		23,218
Renewable diesel:
Renewable diesel	306		252
Ethanol:
Ethanol	629		620
Distillers grains	182		173
Total ethanol revenues	811		793
Revenues	$	22,102	$	24,263

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



	March 31, 2020		December 31, 2019
Refining	$	41,465	$	47,067
Renewable diesel	1,632		1,412
Ethanol	1,614		1,615
Corporate and eliminations	3,036		3,770
Total assets	$	47,747	$	53,864