Supplemental Cash Flow Information

12 Months Ended

Dec. 31, 2020

Supplemental Cash Flow Information [Abstract]

19. SUPPLEMENTAL CASH FLOW INFORMATION

In order to determine net cash provided by operating activities, net income (loss) is adjusted by, among other things, changes in current assets and current liabilities as follows (in millions):


	Year Ended December 31,
	2020		2019		2018
Decrease (increase) in current assets:
Receivables, net	$	2,773	$	(1,041)	$	(460)
Inventories	1,007		(385)		(197)

Prepaid expenses and other	101		—		(74)
Increase (decrease) in current liabilities:
Accounts payable	(4,068)		1,534		304
Accrued expenses	48		(27)		(113)
Taxes other than income taxes payable	37		60		(73)
Income taxes payable	(243)		153		(684)
Changes in current assets and current liabilities	$	(345)	$	294	$	(1,297)

Changes in current assets and current liabilities for the year ended December 31, 2020 were as follows:

•the decrease in receivables was due to (i) a decrease of $3.3 billion as a result of a decrease in sales volumes combined with a decrease in commodity prices in December 2020 compared to December 2019, (ii) the collection of $449 million for a blender’s tax credit receivable attributable to volumes blended during 2019 and 2018, and (iii) an increase in income taxes receivable of $1.0 billion primarily due to the recognition of a current income tax benefit;

•the decrease in inventories was primarily due to a reduction of higher-cost inventory volumes in our refining segment in December 2020 compared to December 2019; and

•the decrease in accounts payable was due to a decrease in crude oil and other feedstock volumes purchased combined with a decrease in commodity prices in December 2020 compared to December 2019.

Changes in current assets and current liabilities for the year ended December 31, 2019 were as follows:

•the increase in receivables was due to (i) an increase in commodity prices and sales volumes in December 2019 compared to December 2018, (ii) a receivable of $449 million for the blender’s tax credit attributable to volumes blended during 2019 and 2018, and (iii) an income tax refund of $348 million, including interest, associated with the settlement of the combined audit related to our U.S. federal income tax returns for 2010 and 2011;

•the increase in inventories was due to an increase in commodity prices and higher inventory levels in December 2019 compared to December 2018;

•the increase in accounts payable was due to an increase in commodity prices in December 2019 compared to December 2018 combined with an increase in crude oil and other feedstock volumes purchased and the timing of payments of invoices; and

•the increase in income taxes payable was primarily due to higher pre-tax income in the fourth quarter of 2019.

Changes in current assets and current liabilities for the year ended December 31, 2018 were as follows:

•the increase in receivables was due to an increase in sales volumes, partially offset by a decrease in commodity prices in December 2018 compared to December 2017;

•the increase in inventories was primarily due to higher inventory levels in December 2018 compared to December 2017;

•the increase in accounts payable was due to an increase in crude oil and other feedstock volumes purchased, partially offset by a decrease in commodity prices in December 2018 compared to December 2017;

•the decrease in accrued expenses was mainly due to the timing of payments on our environmental compliance program obligations; and

•the decrease in income taxes payable was primarily due to (i) $527 million of payments in early 2018 related to 2017 tax liabilities and (ii) $181 million of payments in late 2018 that were applied to 2019 tax liabilities.

Cash flows related to interest and income taxes were as follows (in millions):


	Year Ended December 31,
	2020		2019		2018
Interest paid in excess of amount capitalized, including interest on finance leases	$	526	$	452	$	463
Income taxes paid (refunded), net (see Note 16)	203		(116)		1,361

Supplemental cash flow information related to our operating and finance leases was as follows (in millions):


	Year Ended December 31,
	2020				2019
	Operating Leases		Finance Leases		Operating Leases		Finance Leases
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows	$	444	$	97	$	441	$	50
Investing cash flows	1		—		1		—
Financing cash flows	—		80		—		40
Changes in lease balances resulting from new and modified leases (a)	263		950		1,756		239

________________________

(a)Noncash activity for the year ended December 31, 2020 primarily included approximately $800 million for a finance lease ROU asset and related liability recognized in connection with the terminaling agreement with MVP described in Note 6. Noncash activity for the year ended December 31, 2019 included $1.3 billion for operating lease ROU assets and related liabilities recorded on January 1, 2019 upon adoption of Topic 842.

Prior to our adoption of Topic 842 in 2019, we were considered the accounting owner of the MVP Terminal during its construction due to our membership interest in MVP and because we determined that the terminaling agreement was a capital lease. Accordingly, as of December 31, 2018, we had recorded an asset of $539 million in property, plant, and equipment representing 100 percent of the construction costs incurred by MVP, as well as capitalized interest incurred by us, and a long-term liability of $292 million payable to Magellan. The amounts recorded for the portion of the construction costs associated with the payable to Magellan were noncash investing and financing activities, respectively, for the year ended December 31, 2018. Noncash investing and financing activities for the year ended December 31, 2018 also included the recognition of finance lease assets and related obligations primarily for the lease of storage tanks.

On January 1, 2019, as a result of our adoption of Topic 842, we derecognized the asset and liability related to MVP discussed above and recorded our equity investment in MVP of $247 million, which is included in “deferred charges and other assets, net.” These amounts were noncash investing and financing activities for the year ended December 31, 2019.

There were no significant noncash investing and financing activities during the year ended December 31, 2020, except as noted in the table above.