Note 3. Revenue Recognition

In general, we recognize revenue from our customers when all of the following criteria are met: (i) persuasive evidence of an exchange arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the buyer’s price is fixed or determinable and (iv) collectibility is reasonably assured. Amounts billed in advance of the period in which the service is rendered or product delivered are recorded as deferred revenue. The following information summarizes our revenue recognition policies by business segment. See Note 2 for information regarding recent accounting guidance related to revenue recognition. See Note 10 for general information regarding our business segments.

The following table information regarding our consolidated revenues by business segment for the periods indicated:

	For the Year Ended December 31,
	2017		2016		2015
NGL Pipelines & Services:
Sales of NGLs and related products	$	10,521.3	$	8,380.5	$	8,044.8
Midstream services		1,946.7		1,862.0		1,743.2
Total		12,468.0		10,242.5		9,788.0
Crude Oil Pipelines & Services:
Sales of crude oil		7,365.2		5,802.5		9,732.9
Midstream services		791.6		712.5		573.0
Total		8,156.8		6,515.0		10,305.9
Natural Gas Pipelines & Services:
Sales of natural gas		2,238.5		1,591.9		1,722.6
Midstream services		907.1		951.1		1,020.7
Total		3,145.6		2,543.0		2,743.3
Petrochemical & Refined Products Services:
Sales of petrochemicals and refined products		4,696.3		2,921.9		3,333.5
Midstream services		774.8		799.9		778.4
Total		5,471.1		3,721.8		4,111.9
Offshore Pipelines & Services:
Sales of crude oil		--		--		3.2
Midstream services		--		--		75.6
Total		--		--		78.8
Total consolidated revenues	$	29,241.5	$	23,022.3	$	27,027.9

NGL Pipelines & Services

Sales of NGLs and related products



NGL marketing activities generate revenues from merchant activities such as spot and term sales of NGLs and related products, which we take title to through our natural gas processing activities (i.e., our equity NGL production), and open market and long-term contract purchases. Revenue from these sales contracts is recognized when the NGLs are sold and delivered to customers at market-based prices.

Midstream services



Natural gas processing utilizes contracts that are either fee-based, commodity-based or a combination of the two. Our commodity-based contracts include keepwhole, margin-band, percent-of-liquids, percent-of-proceeds and contracts featuring a combination of commodity and fee-based terms. We recognize revenue when the extracted NGLs are delivered and sold to customers under NGL marketing sales contracts. When a cash fee for natural gas processing services is stipulated by a contract, we record revenue when a producer’s natural gas has been processed and redelivered.



NGL pipeline transportation contracts and tariffs generally generate revenue based upon a fixed fee per gallon of liquids multiplied by the volume transported and delivered (or capacity reserved). Transportation fees charged to shippers are based on either tariffs regulated by governmental agencies or contractual arrangements. Under certain agreements customers are required to ship a minimum volume over an agreed-upon period with a provision that allows the shipper to make-up any volume shortfalls over an agreed-upon period (referred to as shipper “make-up rights”). Revenue pursuant to such agreements is initially deferred and subsequently recognized at the earlier of when the deficiency volume is shipped, when the shipper’s ability to meet the minimum volume commitment has expired, or when the pipeline is otherwise released from its performance obligation.

	NGL fractionation primarily generates revenue under fee-based arrangements. These fees are contractually subject to adjustment for changes in certain fractionation expenses (e.g., natural gas fuel costs) and are recognized in the period services are provided.



NGL and related product storage contracts generate revenue from capacity reservation where we collect a fee for reserving storage capacity for customers in our underground storage wells. Under these agreements, revenue is recognized on a straight-line basis over the specified reservation period. In addition, we generally charge customers throughput fees based on volumes delivered into and subsequently withdrawn from storage, which are recognized as the service is provided.

	NGL import and export terminaling activities generate revenue in the period services are provided. Customers are typically billed a fee per unit of volume loaded or unloaded.

Crude Oil Pipelines & Services

Sales of crude oil

	Crude oil marketing activities generate revenues from the sale and delivery of crude oil purchased either directly from producers or on the open market. Revenue from these sales contracts is recognized when crude oil is sold and delivered to customers at market-based prices.

Midstream services



Crude oil transportation contracts and tariffs generally generate revenue based upon a fixed fee per barrel multiplied by the volume transported and delivered (or capacity reserved). Transportation fees charged to shippers are based on either tariffs regulated by governmental agencies or contractual arrangements. Under certain agreements, customers are required to ship a minimum volume over an agreed-upon period, with make-up rights. Revenue pursuant to such agreements is initially deferred and subsequently recognized at the earlier of when the deficiency volume is shipped, when the shipper’s ability to meet the minimum volume commitment has expired, or when the pipeline is otherwise released from its performance obligation.



Condensate gathering, processing and stabilization services as well as crude oil gathering, treating and pumping services generate revenue based upon the higher of actual volumes handled or minimum volume commitments multiplied by predominantly fixed fees charged for the underlying services. The producer pays a deficiency fee when its volumes do not meet contractually defined minimum volume thresholds (these agreements have no make-up rights).



Crude oil storage and terminaling agreements generate revenue based on capacity reservation where we collect a fee for reserving storage capacity for customers at our terminals. Under these agreements, revenue is recognized on a straight-line basis over the specified reservation period. In addition, customers are typically billed a fee per unit of volume loaded or unloaded at our terminals.

Natural Gas Pipelines & Services

Sales of natural gas



Natural gas marketing activities generate revenue from the sale and delivery of natural gas purchased from producers, regional natural gas processing plants and on the open market. Revenue from these sales contracts is recognized when natural gas is sold and delivered to customers at market-based prices.

Midstream services



Natural gas transportation contracts generate revenues based on a fee per unit of volume transported multiplied by the volume gathered or delivered. Transportation fees charged to shippers are based on either tariffs regulated by governmental agencies or contractual arrangements. Certain of our natural gas pipelines offer firm capacity reservation services whereby the shipper pays a contractual fee based on the level of throughput capacity reserved (whether or not the shipper actually utilizes such capacity). Revenues are recognized when volumes have been delivered to customers or in the period we provide firm capacity reservation services.



Natural gas storage contracts generate revenue typically by two components: (i) monthly demand payments, which are associated with a customer’s storage capacity reservation and paid regardless of actual usage, and (ii) storage fees per unit of volume stored at our facilities. Revenue from demand payments is recognized during the period the customer reserves capacity. Revenue from storage fees is recognized in the period the services are provided.

Petrochemical & Refined Products Services

Sales of petrochemicals and refined products



Our petrochemical marketing activities include the purchase and fractionation of refinery grade propylene obtained on the open market and generate revenues from the sale and delivery of polymer grade propylene to customers at market-based prices. Revenues from our propane dehydrogenation (“PDH”) facility are dependent on the level of minimum volume commitments by customers and the associated contractual fees paid by them for polymer grade propylene during a given period.

	Revenue from the production and sale of octane additives and high purity isobutylene is dependent on the volume of such commodities sold and delivered to customers at market-based prices.

	Revenue from refined products marketing is dependent on the volume of such commodities purchased on the open market and sold and delivered to customers at market-based prices.

Midstream services



Propylene fractionation, butane isomerization and deisobutanizer facilities generate revenue through fee-based toll arrangements with customers, with such arrangements typically including a base-processing fee subject to adjustment for changes in power, fuel and labor costs. Revenue resulting from such agreements is recognized in the period the services are provided.

	Petrochemical and refined products transportation contracts generate revenue based upon a fixed fee per volume multiplied by the volume transported and delivered. Transportation fees charged to shippers are based on either tariffs regulated by governmental agencies or contractual arrangements.

	Refined products storage contracts generate revenue based on capacity reservation where we collect a fee for reserving a defined storage capacity for customers at our facilities. Under these contracts, revenue is recognized on a straight-line basis over the length of the storage period.

	Refined product terminaling contracts generate revenue based on a fee per unit of volume loaded or unloaded and are recognized in the period such services are provided.



Marine transportation contracts generate revenue based on set day rates or a set fee per cargo movement recognized over the transit time of individual tows. Additionally, we record revenue for costs of fuel and other specified operational fees that are directly reimbursed by the customer under most of these contracts.

Offshore Pipelines & Services

In July 2015, we sold our Offshore Business, which comprised our Offshore Pipelines & Services segment. See Note 10 for additional information related to this sale.