Change in Accounting Principle

12 Months Ended

Dec. 31, 2012

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Change in Accounting Principle

Change in Accounting Principle

In the first quarter of 2012, we changed our policy of reporting certain same-party accounts receivable and payable balances in the consolidated balance sheets to reflect a net amount due under contractual netting agreements. Prior to this change, we reported such balances on a gross basis with a same-party receivable and payable balance presented separately in our balance sheet. GAAP permits a reporting entity to elect a policy of offsetting same-party receivables and payables when such amounts are net settled under legally enforceable contractual setoff provisions. We believe that a net presentation is preferable because it more appropriately presents our economic resources (accounts receivable) and claims against us (accounts payable) and the future cash flows associated with such assets and liabilities. Additionally, we believe a net presentation of such amounts conforms to the predominant practices used by other companies in our industry. We have applied this change in accounting principle on a retrospective basis and have recast our prior period financial statements.

The following table summarizes the line items affected in our consolidated balance sheet at December 31, 2011:

	As Originally Reported		As Adjusted		Effect of Change
	(In thousands)
Accounts receivable: Crude oil resales	$	743,544	$	5,166	$	(738,378	)
Total current assets	4,659,124		3,920,746		(738,378		)
Total assets	$	10,314,621	$	9,576,243	$	(738,378	)
Accounts payable	$	2,243,072	$	1,504,694	$	(738,378	)
Total current liabilities	2,629,061		1,890,683		(738,378		)
Total liabilities and equity	$	10,314,621	$	9,576,243	$	(738,378	)

The following table summarizes the line items affected in our consolidated statements of cash flows for the years ended December 31, 2011 and 2010:

	As Originally Reported			As Adjusted			Effect of Change
	(In thousands)
December 31, 2011
(Increase) decrease in current assets:
Accounts receivable	$	286,737		$	373,591		$	86,854
Increase (decrease) in current liabilities:
Accounts payable	$	(164,574	)	$	(251,428	)	$	(86,854	)
December 31, 2010
(Increase) decrease in current assets:
Accounts receivable	$	(228,466	)	$	43,437		$	271,903
Increase (decrease) in current liabilities:
Accounts payable	$	342,182		$	70,279		$	(271,903	)

At December 31, 2012, our accounts payable balance is presented net of $723.4 million in crude oil receivables subject to contractual setoff provisions. There was no cumulative impact to retained earnings since this change in accounting principle did not affect earnings.