Revenues and Accounts Receivable

6 Months Ended

Jun. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenues and Accounts Receivable

Revenues and Accounts Receivable

Revenue Recognition

We disaggregate our revenues by segment and type of activity. These categories depict how the nature, amount, timing and uncertainty of revenues and cash flows are affected by economic factors. See Note 3 to our Consolidated Financial Statements included in Part IV of our 2021 Annual Report on Form 10-K for additional information regarding our types of revenues and policies for revenue recognition.

Revenues from Contracts with Customers. The following tables present our revenues from contracts with customers disaggregated by segment and type of activity (in millions):

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
Crude Oil segment revenues from contracts with customers
Sales	$	15,576	$	9,623	$	28,433	$	17,349
Transportation	175		113		330		203
Terminalling, Storage and Other	90		116		180		246
Total Crude Oil segment revenues from contracts with customers	$	15,841	$	9,852	$	28,943	$	17,798

	Three Months Ended June 30,				Six Months Ended June 30,
	2022		2021		2022		2021
NGL segment revenues from contracts with customers
Sales	$	499	$	355	$	1,344	$	1,128
Transportation	7		5		16		12
Terminalling, Storage and Other	20		21		45		42
Total NGL segment revenues from contracts with customers	$	526	$	381	$	1,405	$	1,182

Reconciliation to Total Revenues of Reportable Segments. The following disclosures only include information regarding revenues associated with consolidated entities; revenues from entities accounted for by the equity method are not included. The following tables present the reconciliation of our revenues from contracts with customers to total revenues of reportable segments and total revenues as disclosed in our Condensed Consolidated Statements of Operations (in millions):

Three Months Ended June 30, 2022	Crude Oil		NGL		Total
Revenues from contracts with customers	$	15,841	$	526	$	16,367
Other items in revenues	99		44		143
Total revenues of reportable segments	$	15,940	$	570	$	16,510
Intersegment revenue elimination					(151)
Total revenues					$	16,359
Three Months Ended June 30, 2021	Crude Oil		NGL		Total
Revenues from contracts with customers	$	9,852	$	381	$	10,233
Other items in revenues	(73)		(151)		(224)
Total revenues of reportable segments	$	9,779	$	230	$	10,009
Intersegment revenue elimination					(79)
Total revenues					$	9,930
Six Months Ended June 30, 2022	Crude Oil		NGL		Total
Revenues from contracts with customers	$	28,943	$	1,405	$	30,348
Other items in revenues	76		(101)		(25)
Total revenues of reportable segments	$	29,019	$	1,304	$	30,323
Intersegment revenues					(270)
Total revenues					$	30,053
Six Months Ended June 30, 2021	Crude Oil		NGL		Total
Revenues from contracts with customers	$	17,798	$	1,182	$	18,980
Other items in revenues	(166)		(313)		(479)
Total revenues of reportable segments	$	17,632	$	869	$	18,501
Intersegment revenues					(188)
Total revenues					$	18,313

Minimum Volume Commitments. We have certain agreements that require counterparties to transport or throughput a minimum volume over an agreed upon period. The following table presents counterparty deficiencies associated with contracts with customers and buy/sell arrangements that include minimum volume commitments for which we had remaining performance obligations and the customers still had the ability to meet their obligations (in millions):

Counterparty Deficiencies	Financial Statement Classification	June 30, 2022		December 31, 2021
Billed and collected	Liability	$	65	$	63
Unbilled (1)	N/A	10		16
Total		$	75	$	79

(1)Amounts were related to deficiencies for which the counterparties had not met their contractual minimum commitments and are not reflected in our Condensed Consolidated Financial Statements as we had not yet billed or collected such amounts.

Contract Balances. Our contract balances consist of amounts received associated with services or sales for which we have not yet completed the related performance obligation. The following table presents the change in the liability balance associated with contracts with customers (in millions):

	Contract Liabilities
Balance at December 31, 2021	$	141
Amounts recognized as revenue	(22)
Additions	19
Balance at June 30, 2022	$	138

Remaining Performance Obligations. The information below includes the amount of consideration allocated to partially and wholly unsatisfied remaining performance obligations under contracts that exist as of the end of the periods and the timing of revenue recognition of those remaining performance obligations. Certain contracts meet the requirements for the presentation as remaining performance obligations. These arrangements include a fixed minimum level of service, typically a set volume of service, and do not contain any variability other than expected timing within a limited range. The following table presents the amount of consideration associated with remaining performance obligations for the population of contracts with external customers meeting the presentation requirements as of June 30, 2022 (in millions):

	Remainder of 2022		2023		2024		2025		2026		2027 and Thereafter
Pipeline revenues supported by minimum volume commitments and capacity agreements (1)	$	91	$	192	$	171	$	149	$	95	$	411
Terminalling, storage and other agreement revenues	138		238		185		89		63		518
Total	$	229	$	430	$	356	$	238	$	158	$	929

(1)Calculated as volumes committed under contracts multiplied by the current applicable tariff rate.

The presentation above does not include (i) expected revenues from legacy shippers not underpinned by minimum volume commitments, including pipelines where there are no or limited alternative pipeline transportation options, (ii) intersegment revenues and (iii) the amount of consideration associated with certain income generating contracts, which include a fixed minimum level of service, that are either not within the scope of ASC 606 or do not meet the requirements for presentation as remaining performance obligations. The following are examples of contracts that are not included in the table above because they are not within the scope of ASC 606 or do not meet the requirements for presentation:

•Minimum volume commitments on certain of our joint venture pipeline systems;

•Acreage dedications;

•Buy/sell arrangements with future committed volumes;

•Short-term contracts and those with variable consideration, due to the election of practical expedients;

•Contracts within the scope of ASC 842, Leases; and

•Contracts within the scope of ASC 815, Derivatives and Hedging.

Trade Accounts Receivable and Other Receivables, Net

Our accounts receivable are primarily from purchasers and shippers of crude oil and, to a lesser extent, purchasers of NGL. These purchasers include, but are not limited to, refiners, producers, marketing and trading companies and financial institutions. The majority of our accounts receivable relate to our crude oil merchant activities that can generally be described as high volume and low margin activities, in many cases involving exchanges of crude oil volumes.

To mitigate credit risk related to our accounts receivable, we utilize a rigorous credit review process. We closely monitor market conditions and perform credit reviews of each customer to make a determination with respect to the amount, if any, of open credit to be extended to any given customer and the form and amount of financial performance assurances we require. Such financial assurances are commonly provided to us in the form of advance cash payments, standby letters of credit, credit insurance or parental guarantees. Additionally, in an effort to mitigate credit risk, a significant portion of our transactions with counterparties are settled on a net-cash basis. For a majority of these net-cash arrangements, we also enter into netting agreements (contractual agreements that allow us to offset receivables and payables with those counterparties against each other on our balance sheet).

Accounts receivable from the sale of crude oil are generally settled with counterparties on the industry settlement date, which is typically in the month following the month in which the title transfers. Otherwise, we generally invoice customers within 30 days of when the products or services were provided and generally require payment within 30 days of the invoice date. We review all outstanding accounts receivable balances on a monthly basis and record our receivables net of expected credit losses. We do not write-off accounts receivable balances until we have exhausted substantially all collection efforts. At June 30, 2022 and December 31, 2021, substantially all of our trade accounts receivable were less than 30 days past their invoice date. Our expected credit losses are immaterial. Although we consider our credit procedures to be adequate to mitigate any significant credit losses, the actual amount of current and future credit losses could vary significantly from estimated amounts.

The following is a reconciliation of trade accounts receivable from revenues from contracts with customers to total Trade accounts receivable and other receivables, net as presented on our Condensed Consolidated Balance Sheets (in millions):

	June 30, 2022		December 31, 2021
Trade accounts receivable arising from revenues from contracts with customers	$	5,279	$	4,031
Other trade accounts receivables and other receivables (1)	8,107		5,126
Impact due to contractual rights of offset with counterparties	(7,805)		(4,452)
Trade accounts receivable and other receivables, net	$	5,581	$	4,705

(1)The balance is comprised primarily of accounts receivable associated with buy/sell arrangements that are not within the scope of ASC 606.