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Revenues (Notes)
 9 Months Ended
Sep. 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 $448.2 million net property, plant, and equipment balance as of September 30, 2021, $428.0 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 September 30, 2021
Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$5,323 $139 $5,462 
Service Revenue - Affiliate4,484 9,241 13,725 
Product Revenue - Third Party— 60,645 60,645 
Product Revenue - Affiliate— 34,325 34,325 
Lease Revenue - Affiliate (1)
66,395 9,075 75,470 
Total Revenue$76,202 $113,425 $189,627 
(1) Net of $1.8 million of amortization expense for the three months ended September 30, 2021, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
Nine Months Ended September 30, 2021
Pipelines and Transportation Wholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$12,021 $358 $12,379 
Service Revenue - Affiliate 9,505 25,877 35,382 
Product Revenue - Third Party— 190,204 190,204 
Product Revenue - Affiliate— 54,453 54,453 
Lease Revenue - Affiliate (1)
190,086 28,514 218,600 
Total Revenue$211,612 $299,406 $511,018 
(1) Net of $5.4 million of amortization expense for the nine months ended September 30, 2021, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
Three Months Ended September 30, 2020
Pipelines and TransportationWholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$3,035 $163 $3,198 
Service Revenue - Affiliate5,633 8,708 14,341 
Product Revenue - Third Party— 43,660 43,660 
Product Revenue - Affiliate— 5,844 5,844 
Lease Revenue - Affiliate (1)
62,811 12,414 75,225 
Total Revenue$71,479 $70,789 $142,268 
(1) Net of $1.8 million of amortization expense for the three months ended September 30, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
Nine Months Ended September 30, 2020
Pipelines and TransportationWholesale Marketing and Terminalling Consolidated
Service Revenue - Third Party$14,587 $502 $15,089 
Service Revenue - Affiliate 13,848 24,500 38,348 
Product Revenue - Third Party— 118,478 118,478 
Product Revenue - Affiliate— 64,067 64,067 
Lease Revenue - Affiliate (1)
154,437 32,887 187,324 
Total Revenue$182,872 $240,434 $423,306 
(1) Net of $5.4 million of amortization expense for the nine months ended September 30, 2020, related to a customer contract intangible asset recorded in the wholesale marketing and terminalling segment.
As of September 30, 2021, we expect to recognize $1.5 billion in future lease revenues, for periods up to financial year 2030, 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 September 30, 2021 were as follows (in thousands):
Remainder of 2021$68,285 
2022272,345 
2023266,395 
2024190,134 
2025 and thereafter732,925 
Total expected revenue on remaining performance obligations$1,530,084