v3.20.2
Revenue
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue
(10) Revenue

The following table presents the Partnership’s revenue, disaggregated by major product:
Three Months Ended
June 30,		Six Months Ended
June 30,
(in thousands)2020201920202019
Ammonia$36,765  $49,954  $50,911  $63,306  
UAN 55,294  73,542  102,308  137,606  
Urea products3,535  5,006  7,068  9,677  
Net sales, exclusive of freight and other95,594  128,502  160,287  210,589  
Freight revenue6,954  7,139  14,677  15,157  
Other revenue2,543  2,019  5,208  3,787  
Net sales$105,091  $137,660  $180,172  $229,533  

The Partnership sells its products, on a wholesale basis, under a contract or by purchase order. The Partnership’s contracts with customers generally contain fixed pricing and most have terms of less than one year. The Partnership 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 Partnership’s manufacturing facilities, at one of the Partnership’s off-site loading facilities or at the customer’s designated facility. Freight revenue recognized by the Partnership represents the pass-through finished goods delivery costs incurred prior to customer acceptance and is reimbursed by customers. An offsetting expense for freight 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 Partnership 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 Partnership does not record a specific warranty reserve or consider activities related to such warranty, if any, to be a separate performance obligation.

The Partnership has an immaterial amount of variable consideration for contracts with an original duration of less than a year. A small portion of the 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 Partnership’s contracts do not contain a significant financing component.

The Partnership has an immaterial amount of fee-based revenue, included in other revenue in the table above, that is recognized based on the net amount of the proceeds received.

Transaction Price Allocated to Remaining Performance Obligations

As of June 30, 2020, the Partnership had approximately $7.5 million of remaining performance obligations for contracts with an original expected duration of more than one year. The Partnership expects to recognize approximately $1.4 million of these performance obligations as revenue by the end of 2020, an additional $3.5 million in 2021, and the remaining balance thereafter. The Partnership 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. The Partnership 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 Partnership’s deferred revenue is a contract liability that primarily relates to nitrogen 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 the deferred revenue activity for the six months ended June 30, 2020 is presented below:
(in thousands)
Balance at December 31, 2019$27,841  
Add:
New prepay contracts entered into during the period (1)18,025  
Less:
Revenue recognized that was included in the contract liability balance at the beginning of the period26,949  
Revenue recognized related to contracts entered into during the period15,943  
Other changes308  
Balance at June 30, 2020$2,666  

(1) Includes $16.6 million where payment associated with prepaid contracts was collected as of June 30, 2020.