REVENUES

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

REVENUES

REVENUES

Disaggregated Revenues

We manage our business in two reportable segments: Terminalling services and Fleet services. Our segments offer different services and are managed accordingly. Our chief operating decision maker, or CODM, regularly reviews financial information about both segments in order to allocate resources and evaluate performance. As such, we have concluded that disaggregating revenue by reporting segments appropriately depicts how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors. Refer to Note 14. Segment Reporting for our disaggregated revenues by segment. Additionally, the below tables summarize the geographic data for our revenues:

	Three Months Ended June 30, 2020
	U.S.		Canada		Total
	(in thousands)
Third party	$	6,653	$	15,771	$	22,424
Related party	$	2,115	$	2,897	$	5,012

	Three Months Ended June 30, 2019
	U.S.		Canada		Total
	(in thousands)
Third party	$	8,722	$	11,357	$	20,079
Related party	$	2,208	$	4,528	$	6,736

	Six Months Ended June 30, 2020
	U.S.		Canada		Total
	(in thousands)
Third party	$	13,702	$	33,629	$	47,331
Related party	$	4,420	$	5,891	$	10,311

	Six Months Ended June 30, 2019
	U.S.		Canada		Total
	(in thousands)
Third party	$	17,442	$	23,095	$	40,537
Related party	$	4,582	$	9,064	$	13,646

Remaining Performance Obligations

The transaction price allocated to the remaining performance obligations associated with our terminalling and fleet services agreements as of June 30, 2020 are as follows for the periods indicated:

	For the six months ending December 31, 2020		2021		2022		2023		Thereafter		Total
	(in thousands)
Terminalling Services (1) (2) (3)	$	50,525	$	95,498	$	71,881	$	36,481	$	146,460	$	400,845
Fleet Services	742		1,016		1,269		38		8		3,073
Total	$	51,267	$	96,514	$	73,150	$	36,519	$	146,468	$	403,918

⁽¹⁾A significant portion of our terminalling services agreements are denominated in Canadian dollars. We have converted the remaining performance obligations associated with these Canadian dollar-denominated contracts using the year-to-date average exchange rate of 0.7335 U.S. dollars per each Canadian dollar at June 30, 2020.

⁽²⁾Includes fixed monthly minimum commitment fees per contracts and excludes constrained estimates of variable consideration for rate-escalations associated with an index, such as the consumer price index, as well as any incremental revenue associated with volume activity above the minimum volumes set forth within the contracts. Also excludes estimated constrained variable consideration included in certain of our terminalling services agreements that is based on crude oil pricing index differentials.

⁽³⁾Assumes USD’s Diluent Recovery Unit project goes into service in the second half of 2021, which will result in certain terminalling services agreements of our Hardisty terminal being automatically extended through mid-2031 and certain agreements at our Stroud terminal having a termination right in June 2022.

We have applied the practical expedient that allows us to exclude disclosure of performance obligations that are part of a contract that has an expected duration of one year or less.

Contract Assets

Our contract assets represent cumulative revenue that has been recognized in advance of billing the customer due to tiered billing provisions. In such arrangements, revenue is recognized using a blended rate based on the billing tiers of the agreement, as the services are consistently provided throughout the duration of the contractual arrangement.

We had the following amounts outstanding associated with our contract assets on our consolidated balance sheets in the financial statement line items presented below in the following table for the indicated periods:

	June 30, 2020		December 31, 2019
	(in thousands)
Other current assets	$	374	$	171
Other current assets — related party	$	—	$	264

Deferred Revenue

Our deferred revenue is a form of a contract liability and consists of amounts collected in advance from customers associated with their terminalling and fleet services agreements and deferred revenues associated with make-up rights, which will be recognized as revenue when earned pursuant to the terms of our contractual arrangements. We currently recognize substantially all of the amounts we receive for minimum volume commitments as revenue when collected, since breakage associated with these make-up rights is currently 100% based on our experience and expectations around usage of these options. Accordingly, we had no deferred revenues at June 30, 2020 for estimated breakage associated with the make-up rights options we granted to our customers. There were $1.1 million deferred revenues associated with make-up rights at December 31, 2019.

We also have deferred revenue that represents cumulative revenue that has been deferred due to tiered billing provisions. In such arrangements, revenue is recognized using a blended rate based on the billing tiers of the agreement, as the services are consistently provided throughout the duration of the contractual arrangement, which we included in “Other non-current liabilities” on our consolidated balance sheets.

We have the following amounts outstanding associated with our deferred revenue on our consolidated balance sheets in the financial statement line items presented below in the following table for the indicated periods:

	June 30, 2020		December 31, 2019
	(in thousands)
Deferred revenue	$	5,531	$	6,104
Deferred revenue — related party (1)	$	—	$	1,072
Other non-current liabilities	$	7,372	$	3,391

⁽¹⁾ Includes deferred revenue associated with customer prepayments from related parties. Refer to Note 12. Transactions with Related Parties for additional discussion of deferred revenues associated with related parties. Excludes deferred revenue from related parties associated with our fleet leases discussed below.

The following table presents the changes associated with the balance of our deferred revenue for the six months ended June 30, 2020:

	December 31, 2019		Cash Additions for Customer Prepayments		Revenue Recognized		June 30, 2020
	(in thousands)
Customer prepayments	$	6,104	$	5,531	$	(6,104)	$	5,531
Customer prepayments — related party (1)	$	1,072	$	—	$	(1,072)	$	—
Other contract liabilities (2)	$	3,391	$	3,981	$	—	$	7,372

⁽¹⁾ Includes deferred revenue associated with customer prepayments from related parties. Refer to Note 12. Transactions with Related Parties for additional discussion of deferred revenues associated with related parties. Excludes deferred revenue from related parties associated with our fleet leases discussed below.

⁽²⁾ Includes cumulative revenue that has been deferred due to tiered billing provisions included in certain of our Canadian dollar-denominated contracts, as discussed above. As such, the change in Other contract liabilities presented has been reduced by approximately $155 thousand due to the impact of the change in the end of period exchange rate between December 31, 2019 and June 30, 2020.

Deferred Revenue — Fleet Leases

Our deferred revenue also includes advance payments from customers of our Fleet services business, which will be recognized as Fleet leases revenue when earned pursuant to the terms of our contractual arrangements. We have included $0.4 million at June 30, 2020 and December 31, 2019, in “Deferred revenue — related party” on our

consolidated balance sheets associated with customer prepayments for our fleet lease agreements. Refer to Note 7. Leases for additional discussion of our lease revenues.