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Revenues (Notes)
 6 Months Ended
Jun. 30, 2021
Revenue from Contract with Customer [Abstract]  
Revenues Revenues
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 the FERC index (refer to Note 3 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.
The majority of our commercial agreements with Delek Holdings meet the definition of a lease because: (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 842, Leases ("ASC 842"), we applied the permitted practical expedient to not separate lease and non-lease components under the predominance principle to designated asset classes associated with the provision of logistics services. We have determined that the predominant component of the related agreements currently in effect is the lease component. Therefore, the combined component is accounted for under the applicable lease accounting guidance. Of our $454.8 million net property, plant, and equipment balance as of June 30, 2021, $383.0 million is subject to operating leases under our commercial agreements. These agreements do not include options for the lessee to purchase our leasing equipment, nor do they include any material residual value guarantees or material restrictive covenants.
The following table represents a disaggregation of revenue for each reportable segment for the periods indicated (in thousands):
Three Months Ended June 30, 2021
Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$4,771 $137 $4,908 
Service Revenue - Affiliate3,797 8,554 12,351 
Product Revenue - Third Party— 74,849 74,849 
Product Revenue - Affiliate— 3,741 3,741 
Lease Revenue - Affiliate (1)
61,867 10,762 72,629 
Total Revenue$70,435 $98,043 $168,478 
(1) Net of $1.8 million of amortization expense for the three months ended June 30, 2021, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
Six Months Ended June 30, 2021
Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$6,698 $219 $6,917 
Service Revenue - Affiliate 5,021 16,636 21,657 
Product Revenue - Third Party— 129,559 129,559 
Product Revenue - Affiliate— 20,128 20,128 
Lease Revenue - Affiliate (1)
123,691 19,439 143,130 
Total Revenue$135,410 $185,981 $321,391 
(1) Net of $3.6 million of amortization expense for the six months ended June 30, 2021, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
Three Months Ended June 30, 2020
Pipelines and TransportationWholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$2,032 $204 $2,236 
Service Revenue - Affiliate3,326 7,810 11,136 
Product Revenue - Third Party— 27,772 27,772 
Product Revenue - Affiliate— 6,720 6,720 
Lease Revenue - Affiliate (1)
58,068 11,705 69,773 
Total Revenue$63,426 $54,211 $117,637 
(1) Net of $1.8 million of amortization expense for the three months ended June 30, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
Six Months Ended June 30, 2020
Pipelines and TransportationWholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$11,496 $396 $11,892 
Service Revenue - Affiliate 8,215 15,792 24,007 
Product Revenue - Third Party— 74,818 74,818 
Product Revenue - Affiliate— 58,222 58,222 
Lease Revenue - Affiliate (1)
91,682 20,417 112,099 
Total Revenue$111,393 $169,645 $281,038 
(1) Net of $3.6 million of amortization expense for the six months ended June 30, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
As of June 30, 2021, we expect to recognize $1.4 billion in 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. Most of these agreements have an initial term ranging from five to ten years, which may be extended for various renewal terms. We disclose information about remaining performance obligations that have original expected durations of greater than one year.
Our unfulfilled performance obligations as of June 30, 2021 were as follows (in thousands):
Remainder of 2021136,671 
2022253,482 
2023245,737 
2024169,475 
2025 and thereafter$626,042 
Total expected revenue on remaining performance obligations$1,431,407