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Revenues and Segment Information | 6 Months Ended
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Jun. 30, 2018
Segment Reporting [Abstract] |
REVENUES AND SEGMENT INFORMATION |
11. | 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 the financial statements. Receivables from Contracts with Customers Our receivables from contracts with customers are included in receivables, net and totaled $5.7 billion as of June 30, 2018 and January 1, 2018. Remaining Performance Obligations The majority of our contracts with customers are spot contracts and therefore have no remaining performance obligations. All of our remaining contracts with customers are primarily term contracts, the majority of which expire by 2020. 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 June 30, 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 immaterial as the transaction price for these contracts includes only an immaterial fixed amount. Segment Information We have 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 11 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 table reflects the components of operating income by reportable segment (in millions):
| Refining |  | Ethanol |  | VLP |  | Corporate and Eliminations |  | Total
Three months ended June 30, 2018: |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 30,130 |  |  | $ | 884 |  |  | $ | — |  |  | $ | 1 |  |  | $ | 31,015 |
Intersegment revenues | 1 |  |  | 42 |  |  | 135 |  |  | (178 | ) |  | — |
Total revenues | 30,131 |  |  | 926 |  |  | 135 |  |  | (177 | ) |  | 31,015 |
Cost of sales: |  |  |  |  |  |  |  |  |
Cost of materials and other | 27,283 |  |  | 754 |  |  | — |  |  | (177 | ) |  | 27,860 |
Operating expenses (excluding depreciation and amortization expense reflected below) | 969 |  |  | 109 |  |  | 33 |  |  | (1 | ) |  | 1,110 |
Depreciation and amortization expense | 471 |  |  | 20 |  |  | 19 |  |  | — |  |  | 510 |
Total cost of sales | 28,723 |  |  | 883 |  |  | 52 |  |  | (178 | ) |  | 29,480 |
Other operating expenses | 21 |  |  | — |  |  | — |  |  | — |  |  | 21 |
General and administrative expenses (excluding depreciation and amortization expense reflected below) | — |  |  | — |  |  | — |  |  | 248 |  |  | 248 |
Depreciation and amortization expense | — |  |  | — |  |  | — |  |  | 13 |  |  | 13 |
Operating income by segment | $ | 1,387 |  |  | $ | 43 |  |  | $ | 83 |  |  | $ | (260 | ) |  | $ | 1,253 |
Three months ended June 30, 2017: |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 21,415 |  |  | $ | 839 |  |  | $ | — |  |  | $ | — |  |  | $ | 22,254 |
Intersegment revenues | — |  |  | 28 |  |  | 110 |  |  | (138 | ) |  | — |
Total revenues | 21,415 |  |  | 867 |  |  | 110 |  |  | (138 | ) |  | 22,254 |
Cost of sales: |  |  |  |  |  |  |  |  |
Cost of materials and other | 19,037 |  |  | 710 |  |  | — |  |  | (138 | ) |  | 19,609 |
Operating expenses (excluding depreciation and amortization expense reflected below) | 979 |  |  | 107 |  |  | 27 |  |  | (2 | ) |  | 1,111 |
Depreciation and amortization expense | 454 |  |  | 19 |  |  | 12 |  |  | — |  |  | 485 |
Total cost of sales | 20,470 |  |  | 836 |  |  | 39 |  |  | (140 | ) |  | 21,205 |
General and administrative expenses (excluding depreciation and amortization expense reflected below) | — |  |  | — |  |  | — |  |  | 175 |  |  | 175 |
Depreciation and amortization expense | — |  |  | — |  |  | — |  |  | 14 |  |  | 14 |
Operating income by segment | $ | 945 |  |  | $ | 31 |  |  | $ | 71 |  |  | $ | (187 | ) |  | $ | 860 |
| Refining |  | Ethanol |  | VLP |  | Corporate and Eliminations |  | Total
Six months ended June 30, 2018: |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 55,691 |  |  | $ | 1,761 |  |  | $ | — |  |  | $ | 2 |  |  | $ | 57,454 |
Intersegment revenues | 5 |  |  | 88 |  |  | 267 |  |  | (360 | ) |  | — |
Total revenues | 55,696 |  |  | 1,849 |  |  | 267 |  |  | (358 | ) |  | 57,454 |
Cost of sales: |  |  |  |  |  |  |  |  |
Cost of materials and other | 50,471 |  |  | 1,503 |  |  | — |  |  | (358 | ) |  | 51,616 |
Operating expenses (excluding depreciation and amortization expense reflected below) | 1,966 |  |  | 220 |  |  | 62 |  |  | (2 | ) |  | 2,246 |
Depreciation and amortization expense | 919 |  |  | 38 |  |  | 38 |  |  | — |  |  | 995 |
Total cost of sales | 53,356 |  |  | 1,761 |  |  | 100 |  |  | (360 | ) |  | 54,857 |
Other operating expenses | 31 |  |  | — |  |  | — |  |  | — |  |  | 31 |
General and administrative expenses (excluding depreciation and amortization expense reflected below) | — |  |  | — |  |  | — |  |  | 486 |  |  | 486 |
Depreciation and amortization expense | — |  |  | — |  |  | — |  |  | 26 |  |  | 26 |
Operating income by segment | $ | 2,309 |  |  | $ | 88 |  |  | $ | 167 |  |  | $ | (510 | ) |  | $ | 2,054 |
Six months ended June 30, 2017: |  |  |  |  |  |  |  |  |
Revenues: |  |  |  |  |  |  |  |  |
Revenues from external customers | $ | 42,302 |  |  | $ | 1,724 |  |  | $ | — |  |  | $ | — |  |  | $ | 44,026 |
Intersegment revenues | — |  |  | 88 |  |  | 216 |  |  | (304 | ) |  | — |
Total revenues | 42,302 |  |  | 1,812 |  |  | 216 |  |  | (304 | ) |  | 44,026 |
Cost of sales: |  |  |  |  |  |  |  |  |
Cost of materials and other | 37,844 |  |  | 1,497 |  |  | — |  |  | (304 | ) |  | 39,037 |
Operating expenses (excluding depreciation and amortization expense reflected below) | 1,970 |  |  | 216 |  |  | 51 |  |  | (2 | ) |  | 2,235 |
Depreciation and amortization expense | 903 |  |  | 46 |  |  | 24 |  |  | — |  |  | 973 |
Total cost of sales | 40,717 |  |  | 1,759 |  |  | 75 |  |  | (306 | ) |  | 42,245 |
General and administrative expenses (excluding depreciation and amortization expense reflected below) | — |  |  | — |  |  | — |  |  | 367 |  |  | 367 |
Depreciation and amortization expense | — |  |  | — |  |  | — |  |  | 26 |  |  | 26 |
Operating income by segment | $ | 1,585 |  |  | $ | 53 |  |  | $ | 141 |  |  | $ | (391 | ) |  | $ | 1,388 |
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.
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
Refining: |  |  |  |  |  |  |
Gasolines and blendstocks | $ | 12,514 |  |  | $ | 9,723 |  |  | $ | 23,143 |  |  | $ | 19,058 |
Distillates | 14,459 |  |  | 9,736 |  |  | 27,117 |  |  | 19,432 |
Other product revenues | 3,157 |  |  | 1,956 |  |  | 5,431 |  |  | 3,812 |
Total refining revenues | 30,130 |  |  | 21,415 |  |  | 55,691 |  |  | 42,302 |
Ethanol: |  |  |  |  |  |  |
Ethanol | 696 |  |  | 712 |  |  | 1,397 |  |  | 1,462 |
Distillers grains | 188 |  |  | 127 |  |  | 364 |  |  | 262 |
Total ethanol revenues | 884 |  |  | 839 |  |  | 1,761 |  |  | 1,724 |
VLP: |  |  |  |  |  |  |
Pipeline transportation | 31 |  |  | 25 |  |  | 62 |  |  | 48 |
Terminaling | 103 |  |  | 84 |  |  | 202 |  |  | 167 |
Storage and other | 1 |  |  | 1 |  |  | 3 |  |  | 1 |
Total VLP revenues | 135 |  |  | 110 |  |  | 267 |  |  | 216 |
Corporate – other revenues | 1 |  |  | — |  |  | 2 |  |  | — |
Elimination of intersegment revenues | (135 | ) |  | (110 | ) |  | (267 | ) |  | (216 | )
Revenues | $ | 31,015 |  |  | $ | 22,254 |  |  | $ | 57,454 |  |  | $ | 44,026 |
Total assets by reportable segment were as follows (in millions):
| June 30, 2018 |  | December 31, 2017
Refining | $ | 42,107 |  |  | $ | 40,382 |
Ethanol | 1,332 |  |  | 1,344 |
VLP | 1,569 |  |  | 1,517 |
Corporate and eliminations | 5,670 |  |  | 6,915 |
Total assets | $ | 50,678 |  |  | $ | 50,158 |

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- Definition The entire disclosure for reporting segments including data and tables. Reportable segments include those that meet any of the following quantitative thresholds a) it's reported revenue, including sales to external customers and intersegment sales or transfers is 10 percent or more of the combined revenue, internal and external, of all operating segments b) the absolute amount of its reported profit or loss is 10 percent or more of the greater, in absolute amount of 1) the combined reported profit of all operating segments that did not report a loss or 2) the combined reported loss of all operating segments that did report a loss c) its assets are 10 percent or more of the combined assets of all operating segments. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 280 -URI http://asc.fasb.org/topic&trid=2134510 + Details
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