Operating Segments (Notes)

12 Months Ended

Dec. 31, 2011

Operating Segments [Abstract]

OPERATING SEGMENTS [Text Block]

OPERATING SEGMENTS

The Company's revenues are derived from two operating segments, refining and retail. We own and operate seven petroleum refineries located in California, Washington, Alaska, Hawaii, North Dakota and Utah. These refineries manufacture gasoline and gasoline blendstocks, jet fuel, diesel fuel, residual fuel oil and other refined products. We sell these refined products, together with refined products purchased from third-parties, at wholesale through terminal facilities and other locations. Our refining segment also sells refined products to unbranded marketers and occasionally exports refined products to foreign markets. Our retail segment sells gasoline, diesel fuel and convenience store items through company-operated retail stations and branded jobber/dealers in 18 states. We do not have significant operations in foreign countries. Therefore, revenue in foreign countries and long-lived assets located in foreign countries are not material to our operations.

We evaluate the performance of our segments based primarily on segment operating income. Segment operating income includes those revenues and expenses that are directly attributable to management of the respective segment. Intersegment sales from refining to retail are made at prevailing market rates. Income taxes, other income, foreign currency exchange gain (loss), interest and financing costs, interest income, corporate depreciation and corporate general and administrative expenses are excluded from segment operating income. Identifiable assets are those used by the segments, whereas corporate assets are principally cash and other assets that are not associated with a specific operating segment.

Segment information is as follows:

	2011			2010			2009
Revenues	(In millions)
Refining:
Refined products	$	29,058		$	19,038		$	15,674
Crude oil resales and other	747			1,039			691
Retail:
Fuel (a)	5,095			3,583			3,000
Merchandise and other	224			227			235
Intersegment sales from Refining to Retail	(4,821		)	(3,304		)	(2,728		)
Total Revenues	$	30,303		$	20,583		$	16,872
Segment Operating Income (Loss)
Refining (b)	$	1,179		$	255		$	55
Retail	89			97			83
Total Segment Operating Income	1,268			352			138
Corporate and unallocated costs	(188		)	(212		)	(195		)
Operating Income (Loss) (c)	1,080			140			(57		)
Interest and financing costs	(177		)	(157		)	(130		)
Interest income	2			3			4
Foreign currency exchange gain (loss)	(2		)	2			(5		)
Other income (expense)	2			(13		)	—
Earnings (Loss) Before Income Taxes	$	905		$	(25	)	$	(188	)
Depreciation and Amortization Expense
Refining	$	369		$	365		$	359
Retail	38			39			39
Corporate	10			18			28
Total Depreciation and Amortization Expense	$	417		$	422		$	426
Capital Expenditures
Refining	$	262		$	263		$	356
Retail	41			22			14
Corporate	17			2			31
Total Capital Expenditures	$	320		$	287		$	401

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(a) Federal and state motor fuel taxes on sales by our retail segment are included in both revenues and cost of sales in our statements of consolidated operations. These taxes, excluding credits, totaled $376 million, $330 million and $283 million for the years ended December 31, 2011, 2010 and 2009, respectively.

(b) Includes losses related to the change in scope of a capital project at our Los Angeles refinery of $51 million, $20 million and $12 million for the years ended December 31, 2011, 2010 and 2009, respectively. The loss on asset disposals and impairments is included in refining segment operating income. Includes goodwill write-off related to two separate reporting units for $10 million and $43 million for the years ended December 31, 2010 and 2009, respectively. Also includes $37 million and $67 million in business interruption and property damage recoveries related to the April 2, 2010 incident at our Washington refinery for the year ended December 31, 2011 and 2010, respectively.

(c) Includes a $48 million gain for the year ended December 31, 2010, from the elimination of postretirement life insurance benefits for current and future retirees.

	December 31,
	2011		2010		2009
Identifiable Assets:	(In millions)
Refining	$	8,152	$	7,303	$	6,690
Retail	644		619		656
Corporate	1,096		810		724
Total Assets	$	9,892	$	8,732	$	8,070