
10.	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.” These balances were $5.1 billion and $5.7 billion as of March 31, 2018 and January 1, 2018, respectively.

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 March 31, 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. Some ethanol is sold to our refining segment, which is blended into gasoline and 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 March 31, 2018:
Revenues:
Revenues from external customers	$	25,561	$	877	$	—	$	1		$	26,439
Intersegment revenues	4		46		132		(182		)	—
Total revenues	25,565		923		132		(181		)	26,439
Cost of sales:
Cost of materials and other	23,188		749		—		(181		)	23,756
Operating expenses (excluding depreciation and amortization expense reflected below)	997		111		29		(1		)	1,136
Depreciation and amortization expense	448		18		19		—			485
Total cost of sales	24,633		878		48		(182		)	25,377
Other operating expenses	10		—		—		—			10
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		238			238
Depreciation and amortization expense	—		—		—		13			13
Operating income by segment	$	922	$	45	$	84	$	(250	)	$	801

Three months ended March 31, 2017:
Revenues:
Revenues from external customers	$	20,887	$	885	$	—	$	—		$	21,772
Intersegment revenues	—		60		106		(166		)	—
Total revenues	20,887		945		106		(166		)	21,772
Cost of sales:
Cost of materials and other	18,807		787		—		(166		)	19,428
Operating expenses (excluding depreciation and amortization expense reflected below)	991		109		24		—			1,124
Depreciation and amortization expense	449		27		12		—			488
Total cost of sales	20,247		923		36		(166		)	21,040
General and administrative expenses (excluding depreciation and amortization expense reflected below)	—		—		—		192			192
Depreciation and amortization expense	—		—		—		12			12
Operating income by segment	$	640	$	22	$	70	$	(204	)	$	528

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 March 31,
	2018			2017
Refining:
Gasolines and blendstocks	$	10,629		$	9,335
Distillates	12,658			9,696
Other product revenues	2,274			1,856
Total refining revenues	25,561			20,887
Ethanol:
Ethanol	701			750
Distillers grains	176			135
Total ethanol revenues	877			885
VLP:
Pipeline transportation	31			23
Terminaling	99			83
Storage and other	2			—
Total VLP revenues	132			106
Corporate – other revenues	1			—
Elimination of intersegment revenues	(132		)	(106		)
Revenues	$	26,439		$	21,772

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



	March 31, 2018		December 31, 2017
Refining	$	40,699	$	40,382
Ethanol	1,355		1,344
VLP	1,545		1,517
Corporate and eliminations	5,777		6,915
Total assets	$	49,376	$	50,158