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Revenue | 3 Months Ended
--- | ---
Mar. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer [Text Block] | Revenue Effect of ASC 606 Adoption The Partnership adopted ASC 606 on January 1, 2018 for all contracts that were not yet completed as of the date of adoption. The details of significant changes and quantitative impact of the new revenue standard are disclosed below.
• | Third-party reimbursements – Third-party reimbursements, such as electricity costs, are presented gross on the income statement rather than net within cost of revenues. The gross-up for third-party reimbursements (e.g., increase in revenue; increase in cost of revenues) was $78 million for the period ending March 31, 2018.
The Partnership updated the allocation between lease and non-lease components for implicit leases as a result of this ASC 606 gross up. As a result, “Rental income” and “Rental cost of sales” increased by $16 million for the period ending March 31, 2018.
• | Noncash consideration – Under certain processing agreements, the Partnership is entitled to retain NGLs or other liquids from the customer. We obtain control of these NGLs and are able to direct the use of the goods. Service revenues are recorded based on the value of the NGLs received on the date the services are performed. Historically, revenue was not recorded on these arrangements until the product was sold. The impact to this change was an increase of $11 million to “Service revenue - product related” for the period ending March 31, 2018. NGL inventory related to keep-whole volumes was also revalued as a result of this change, with a cumulative adjustment of $1 million. Historically, revenue was not recorded on product received until it was sold and further, the increase in the inventory basis increased “Purchased product costs” by $12 million for the period ending March 31, 2018.
• | Percent-of-proceeds revenues – The Partnership’s percentage of proceeds revenue received was historically recorded in product revenues. Upon adoption of ASC 606, these revenues have been classified in service revenue, as the performance obligation related to these contracts is to provide gathering and processing services. Revenues will continue to be recorded net under these arrangements as the Partnership does not control the product prior to sale. For the period ending March 31, 2018, $33 million has now been recorded in “Service revenue - product related” as opposed to “Product sales.”
• | Imbalances – Historically, all imbalances were recorded net. In certain instances, the Partnership’s arrangements are structured such that imbalances are cashed-out each period end which results in the transfer of control of a commodity and creates a purchase and/or sale of a commodity under ASC 606. Thus, certain imbalances will be grossed up as a result of adoption. The impact of this change was an increase of $12 million to “Product sales” and “Purchased product costs” for the period ending March 31, 2018.
• | Aid in construction – Historically, all aid in construction amounts received were deferred and recognized into revenue. Payments received from non-customers will no longer be deferred as the accounting will not be subject to ASC 606. Such payments will be recorded as a reduction to plant, property and equipment. The cumulative adjustment wrote down $3 million of net plant, property and equipment.
• | Oil Allowances – Historically, oil allowances were recorded when received as consideration for services performed. Under ASC 606, the Partnership does not believe such amounts represent consideration from a customer. Any excess product obtained and sold as a result of these allowances is recorded as product sale. This change decreased “Service revenues” and “Service revenues - related party” by $1 million for the period ending March 31, 2018 and increased Product sales and Product sales related party by $1 million.
The cumulative effect of the changes made to our consolidated January 1, 2018 balance sheet for the adoption of ASC 606 was as follows:
(In millions) | Balance at December 31, 2017 |  | ASC 606 Adjustment |  | Total
Assets |  |  |  |  |
Inventories | $ | 65 |  |  | $ | 1 |  |  | $ | 66 |
Property, plant and equipment, net | 12,187 |  |  | (3 | ) |  | 12,184 |
Liabilities |  |  |  |  |
Long-term deferred revenue | 42 |  |  | (3 | ) |  | 39 |
Equity |  |  |  |  |
Common unitholders - public | $ | 8,379 |  |  | $ | 1 |  |  | $ | 8,380 |
Aside from the adjustments to the opening balances noted above, the impact of adoption on our Consolidated Balance Sheets for the period ended March 31, 2018 was immaterial. The disclosure of the impact of adoption on our Consolidated Statements of Income for the period ended March 31, 2018 was as follows:
| Three Months Ended March 31, 2018
(In millions) | ASC 606 Balance |  | ASC 605 Balance |  | Effect of Change Higher/ (Lower)
Revenues and other income: |  |  |  |  |
Service revenue | $ | 382 |  |  | $ | 305 |  |  | $ | 77 |
Service revenue - related parties | 471 |  |  | 472 |  |  | (1 | )
Service revenue - product related | 44 |  |  | — |  |  | 44 |
Rental income | 79 |  |  | 63 |  |  | 16 |
Product sales(1) | 207 |  |  | 228 |  |  | (21 | )
Product sales - related parties | 4 |  |  | 3 |  |  | 1 |
Costs and expenses: |  |  |  |  |
Cost of revenues(2) | 206 |  |  | 128 |  |  | 78 |
Rental cost of sales | 29 |  |  | 13 |  |  | 16 |
Purchased product costs | 187 |  |  | 163 |  |  | 24 |
Depreciation and amortization | 176 |  |  | 176 |  |  | — |
Net income | $ | 423 |  |  | $ | 425 |  |  | $ | (2 | )
(1) | G&P “Product sales” exclude approximately $1 million of revenue related to derivative gains/losses and mark-to-market adjustments.
(2) | Excludes “Purchased product costs,” “Rental cost of sales,” “Purchases,” “Depreciation and amortization,” “General and administrative expenses,” and “Other taxes.”
Disaggregation of Revenue The following table represents a disaggregation of revenue for each reportable segment for the period ended March 31, 2018:
| Three Months Ended March 31, 2018
(In millions) | L&S |  | G&P |  | Total
Revenues and other income: |  |  |  |  |
Service revenue | $ | 28 |  |  | $ | 354 |  |  | $ | 382 |
Service revenue - related parties | 471 |  |  | — |  |  | 471 |
Service revenue - product related | — |  |  | 44 |  |  | 44 |
Product sales(1) | 1 |  |  | 205 |  |  | 206 |
Product sales - related parties | 1 |  |  | 3 |  |  | 4 |
Total revenues from contracts with customers | $ | 501 |  |  | $ | 606 |  |  | $ | 1,107 |
Non-ASC 606 revenue(2) |  |  |  |  | 313 |
Total revenues and other income |  |  |  |  | 1,420 |
Revenue adjustment for unconsolidated affiliates |  |  |  |  | 137 |
(Income) from equity method investments |  |  |  |  | (61 | )
Other income - related parties |  |  |  |  | (13 | )
Unrealized derivative (gain) related to product sales |  |  |  |  | (1 | )
Total segment revenues and other income |  |  |  |  | $ | 1,482 |
(1) | G&P “Product sales” exclude approximately $1 million of revenue related to derivative gains/losses and mark-to-market adjustments.
(2) | Non-ASC 606 Revenue includes rental income, income from equity method investments, derivative gains/losses, mark-to-market adjustments, and other income.
Contract Balances Contract assets typically relate to aid in construction agreements where the revenue recognized and the Partnership’s rights to consideration for work completed exceeds the amount billed to the customer. Contract assets are generally classified as current and included in “Other current assets” in our Consolidated Balance Sheets. Contract liabilities, which we refer to as “Deferred revenue,” and “Long-term deferred revenue” typically relate to advance payments for aid in construction agreements and deferred customer credits associated with makeup rights and minimum volume commitments. We classify contract liabilities as current or long-term based on the timing of when we expect to recognize revenue. “Receivables, net” primarily relate to our commodity sales. Portions of the “Receivables, net” balance are attributed to the sale of commodity product controlled by the Partnership prior to sale while a significant portion of the balance relates to the sale of commodity product on behalf of our producer customer. The sales and related “Receivables, net” are commingled and excluded from the table below. The Partnership remits the net sales price back to our producer customers upon completion of the sale. Each period end certain amounts within accounts payable relate to our payments to producer customers. Such amounts are not deemed material at period end as a result of when we settle with each producer. The table below reflects the changes in our contract balances for the period ended March 31, 2018:
(In millions) | Balance at January 1, 2018(1) |  | Additions/ (Deletions) |  | Revenue Recognized(2) |  | Balance at March 31, 2018
Contract assets | $ | 4 |  |  | $ | — |  |  | $ | — |  |  | $ | 4 |
Deferred revenue | 5 |  |  | 2 |  |  | (2 | ) |  | 5 |
Deferred revenue - related parties | 42 |  |  | 9 |  |  | (9 | ) |  | 42 |
Long-term deferred revenue | 7 |  |  | 1 |  |  | — |  |  | 8 |
Long-term deferred revenue - related parties | 39 |  |  | 6 |  |  | — |  |  | 45 |
(1) | Balance represents ASC 606 portion of each respective line items.
(2) | No revenue was recognized related to past performance obligations, in the current period. Changes in long-term amounts represent reclassifications to current balances.
Remaining Performance Obligations The table below includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. As of March 31, 2018, the amounts allocated to contract assets and contract liabilities on the Consolidated Balance Sheets are $96 million and are reflected in the amounts below. This will be recognized as revenue as the obligations are satisfied, which is expected to occur over the next 19 years. The Company does not disclose information about remaining performance obligations that have original expected durations of one year or less. Further, the Company does not disclose variable consideration due to volume variability in the table below.
(In millions) | Logistics & Storage Services |  | Gathering & Processing Services(3)
2018 | $ | 704 |  |  | $ | 91 |
2019 | 929 |  |  | 118 |
2020 | 929 |  |  | 114 |
2021 | 929 |  |  | 113 |
2022 and thereafter | 5,577 |  |  | 404 |
Total revenue on remaining performance obligations(1),(2) | $ | 9,068 |  |  | $ | 840 |
(1) | All fixed consideration from contracts with customers is included in the amounts presented above. Variable consideration that is constrained or not required to be estimated as it reflects our efforts to perform is excluded.
(2) | Arrangements deemed implicit leases are included in “Rental income” and are excluded from this table.
(3) | Only minimum volume commitments that are deemed fixed are included in the table above. The Partnership has various minimum volume commitments in processing arrangements that vary based on the actual Btu content of the gas received. These amounts are deemed variable consideration and are excluded from the table above.
Practical Expedients We do not disclose information on the future performance obligations for any contract with an original expected duration of one year or less.

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- References No definition available. + Details
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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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