Revenues

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

We generate revenue by charging fees for gathering, transporting, offloading and storing crude oil; for storing intermediate products and feed stocks; for distributing, transporting and storing refined products; for marketing refined products output of Delek Holdings' Tyler and Big Spring refineries; and for wholesale marketing in the west Texas area. A significant portion of our revenue is derived from long-term commercial agreements with Delek Holdings, which provide for annual fee adjustments for increases or decreases in the CPI, PPI or FERC index (refer to Note 4 for a more detailed description of these agreements). In addition to the services we provide to Delek Holdings, we also generate substantial revenue from crude oil, intermediate and refined products transportation services for, and terminalling and marketing services to, third parties primarily in Texas, New Mexico, Tennessee and Arkansas. Certain of these services are provided pursuant to contractual agreements with third parties. Payment terms require customers to pay shortly after delivery and do not contain significant financing components. Delek Holdings, directly or indirectly, accounted for 36.6%, 28.9% and 32.8% of our total revenues for the years ended December 31, 2018, 2017 and 2016, respectively. Sunoco LP accounted for 15.9%, 9.0% and 10.5% of our total revenues for the years ended December 31, 2018, 2017 and 2016, respectively.

The majority of our commercial agreements with Delek Holdings meet the definition of a lease since: (1) performance of the contracts is dependent on specified property, plant or equipment and (2) it is remote that one or more parties other than Delek Holdings will take more than a minor amount of the output associated with the specified property, plant or equipment. As part of our adoption of ASC 606, we applied the new revenue recognition standard only to the service component of these leases. The bifurcation of the lease and service components was based on an analysis of lease-related and service-related costs for each contract, adjusted for representative profit margins. The lease component continues to be accounted for under the applicable lease accounting guidance.

The following table represents a disaggregation of revenue for each reportable segment for the periods indicated (in thousands):



	Year Ended December 31, 2018
	Pipelines and Transportation		Wholesale Marketing and Terminalling		Consolidated
Service Revenue - Third Party	$	15,149	$	870	$	16,019
Service Revenue - Affiliate ⁽¹⁾	93,300		53,750		147,050
Product Revenue - Third Party	—		400,781		400,781
Product Revenue - Affiliate	—		35,252		35,252
Lease Revenue - Affiliate	45,118		13,389		58,507
Total Revenue	$	153,567	$	504,042	$	657,609

⁽¹⁾ Net of $6.0 million of amortization expense for the year ended, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.

As of December 31, 2018, we expect to recognize approximately $1.1 billion in service and lease revenues related to our unfulfilled performance obligations pertaining to the minimum volume commitments and capacity utilization under the non-cancelable terms of our commercial agreements with Delek Holdings. We do not disclose information about remaining performance obligations that have original expected durations of one year or less.

Our unfulfilled performance obligations as of December 31, 2018 were as follows (in thousands):



2019	168,315
2020	167,965
2021	167,620
2022	166,587
2023 and thereafter	474,200
Total expected revenue on remaining performance obligations	$	1,144,687