XML 22 R8.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Revenue | 6 Months Ended
--- | ---
Jun. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue | (3) Revenue The following tables present the Company’s revenue disaggregated by major product. The following tables include a reconciliation of the disaggregated revenue with the Company's reportable segments.
| Three Months Ended June 30, 2018
| Petroleum |  | Nitrogen Fertilizer |  | Other / Eliminations |  | Consolidated
| (in millions)
Major Product |  |  |  |  |  |  |
Gasoline | $ | 896 |  |  | $ | — |  |  | $ | — |  |  | $ | 896 |
Distillates (a) | 832 |  |  | — |  |  | — |  |  | 832 |
Ammonia | — |  |  | 28 |  |  | — |  |  | 28 |
UAN | — |  |  | 51 |  |  | — |  |  | 51 |
Urea products | — |  |  | 5 |  |  | — |  |  | 5 |
Freight revenue | 6 |  |  | 7 |  |  | — |  |  | 13 |
Other (b) | 89 |  |  | 2 |  |  | (3 | ) |  | 88 |
Revenue from product sales | 1,823 |  |  | 93 |  |  | (3 | ) |  | 1,913 |
Other revenue (c) | 1 |  |  | — |  |  | — |  |  | 1 |
Total revenue | $ | 1,824 |  |  | $ | 93 |  |  | $ | (3 | ) |  | $ | 1,914 |
| Six Months Ended June 30, 2018
| Petroleum |  | Nitrogen Fertilizer |  | Other / Eliminations |  | Consolidated
| (in millions)
Major Product |  |  |  |  |  |  |
Gasoline | $ | 1,608 |  |  | $ | — |  |  | $ | — |  |  | $ | 1,608 |
Distillates (a) | 1,484 |  |  | — |  |  | — |  |  | 1,484 |
Ammonia | — |  |  | 40 |  |  | — |  |  | 40 |
UAN | — |  |  | 104 |  |  | — |  |  | 104 |
Urea products | — |  |  | 10 |  |  | — |  |  | 10 |
Freight revenue | 11 |  |  | 15 |  |  | — |  |  | 26 |
Other (b) | 176 |  |  | 4 |  |  | (4 | ) |  | 176 |
Revenue from product sales | 3,279 |  |  | 173 |  |  | (4 | ) |  | 3,448 |
Other revenue (c) | 3 |  |  | — |  |  | — |  |  | 3 |
Total revenue | $ | 3,282 |  |  | $ | 173 |  |  | $ | (4 | ) |  | $ | 3,451 |
(a) | Distillates consist primarily of diesel fuel, kerosene and jet fuel.
(b) | Other product sales primarily include crude oil, feedstocks and asphalt sales attributable to the petroleum segment and nitric acid and carbon dioxide sales attributable to the nitrogen fertilizer segment. Feedstocks are petroleum products, such as crude oil and natural gas liquids, that are processed and blended into refined products, such as gasoline, diesel fuel and jet fuel, during the refining process.
(c) | Other revenue consists primarily of Cushing, OK storage tank lease revenue.
Petroleum The petroleum segment’s revenue from product sales is recorded upon delivery of the products to customers, which is the point at which title is transferred and the customer has assumed the risk of loss. This generally takes place as product passes into the pipeline, as a product transfer order occurs within a pipeline system, or as product enters equipment or locations supplied or designated by the customer. The petroleum segment has elected to apply the sales tax practical expedient, whereby qualifying excise and other taxes collected from customers and remitted to governmental authorities are not included in reported revenues. Many of the petroleum segment’s contracts have index-based pricing which is considered variable consideration that should be estimated in determining the transaction price. The petroleum segment determined that it does not need to estimate the variable consideration because the uncertainty related to the consideration is resolved on the pricing date or the date when the product is delivered. The petroleum segment may incur broker commissions or transportation costs prior to product transfer on some of its sales. The petroleum segment has elected to apply the practical expedient allowing it to expense the broker costs since the contract durations are less than a year in length. Transportation costs are accounted for as fulfillment costs and are expensed as incurred since they do not meet the requirement for capitalization. The petroleum segment’s contracts with its customers state the terms of the sale, including the description, quantity, and price of each product sold. Depending on the product sold, payment from customers is generally due in full within 2 to 32 days of product delivery or invoice date. The petroleum segment’s contracts with customers commonly include a provision which states that the petroleum segment will accept customer returns of off-spec product, refund the customer (or provide on-spec product), and pay for damages to any customer equipment which resulted from the off-spec product. Typically, if the customer is not satisfied with the product, the price is adjusted downward instead of the product being returned or exchanged. The petroleum segment has determined that product returns or refunds are very rare and will account for them as they occur. The petroleum segment generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specification. Freight revenue recognized by the petroleum segment is primarily tariff and line loss charges rebilled to customers to reimburse the petroleum segment for expenses incurred from a pipeline operator. An offsetting expense is included in cost of materials and other. Nitrogen Fertilizer The nitrogen fertilizer segment sells its products on a wholesale basis under a contract or by purchase order. The nitrogen fertilizer segment's contracts with customers, including purchase orders, generally contain fixed pricing and most have terms of less than one year. The nitrogen fertilizer segment recognizes revenue at the point in time at which the customer obtains control of the product, which is generally upon delivery and acceptance by the customer. The customer acceptance point is stated in the contract and may be at one of the nitrogen fertilizer segment’s manufacturing facilities, at one of the nitrogen fertilizer segment’s off-site loading facilities, or at the customer's designated facility. Freight revenue recognized by the nitrogen fertilizer segment represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers. An offsetting expense is included in cost of materials and other. Qualifying taxes collected from customers and remitted to governmental authorities are not included in reported revenues. Depending on the product sold and the type of contract, payments from customers are generally either due prior to delivery or within 15 to 30 days of product delivery. The nitrogen fertilizer segment generally provides no warranty other than the implicit promise that goods delivered are free of liens and encumbrances and meet the agreed upon specifications. Product returns are rare, and as such, the nitrogen fertilizer segment does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation. The nitrogen fertilizer segment has an immaterial amount of variable consideration for contracts with an original duration of less than a year. A small portion of the nitrogen fertilizer partnership's revenue includes contracts extending beyond one year, some of which contain variable pricing in which the majority of the variability is attributed to the market-based pricing. The nitrogen fertilizer segment's contracts do not contain a significant financing component. The nitrogen fertilizer segment has certain fee-based revenue, included in other revenue in the table above, that is recognized based on the net amount of the proceeds received, consistent with prior accounting practice. Transaction price allocated to remaining performance obligations As of June 30, 2018, CVR Partners had approximately $13 million of remaining performance obligations for contracts with an original expected duration of more than one year. CVR Partners expects to recognize approximately 56% of these performance obligations as revenue by the end of 2019, an additional 22% by 2020 and the remaining balance thereafter. CVR Partners has elected to not disclose the amount of transaction price allocated to remaining performance obligations for contracts with an original expected duration of less than one year. CVR Partners has elected to not disclose variable consideration allocated to wholly unsatisfied performance obligations that are based on market prices that have not yet been determined. Contract balances The CVR Partners' deferred revenue is a contract liability that primarily relates to fertilizer sales contracts requiring customer prepayment prior to product delivery to guarantee a price and supply of nitrogen fertilizer. Deferred revenue is recorded at the point in time in which a prepaid contract is legally enforceable and the associated right to consideration is unconditional prior to transferring product to the customer. An associated receivable is recorded for uncollected prepaid contract amounts. Contracts requiring prepayment are generally short-term in nature and, as discussed above, revenue is recognized at the point in time in which the customer obtains control of the product. A summary of CVR Partners' deferred revenue activity during the six months ended June 30, 2018 is presented below:
|  | Six Months Ended June 30,
|  | (in millions)
Balance at January 1, 2018 |  | $ | 34 |
Add: |  |
New prepay contracts entered into during the period |  | 14 |
Less: |  |
Revenue recognized that was included in the contract liability balance at the beginning of the period |  | 32 |
Revenue recognized related to contracts entered into during the period |  | 5 |
Other changes |  | — |
Balance at June 30, 2018 |  | $ | 11 |

X
- References No definition available. + Details
Name: | us-gaap_RevenueFromContractWithCustomerAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration