Revenue Recognition

6 Months Ended

Jun. 30, 2020

Note 3 – Revenue Recognition

Revenue by Category

The following table presents our revenue disaggregated by major service line:



	Transco		Northwest Pipeline		Gulf of Mexico Midstream		Northeast Midstream		West Midstream		Other		Eliminations			Total
	(Millions)
Three Months Ended June 30, 2020
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	592	$	110	$	—	$	—	$	—	$	—	$	(1	)	$	701
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		78		308		297		—		(19		)	664
Commodity consideration	—		—		3		1		21		—		—			25
Other	2		—		10		41		17		—		(4		)	66
Total service revenues	594		110		91		350		335		—		(24		)	1,456
Product Sales:
NGL and natural gas	20		—		17		1		303		—		(31		)	310
Total revenues from contracts with customers	614		110		108		351		638		—		(55		)	1,766
Other revenues (1)	2		—		1		5		2		9		(4		)	15
Total revenues	$	616	$	110	$	109	$	356	$	640	$	9	$	(59	)	$	1,781


Three Months Ended June 30, 2019
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	565	$	110	$	—	$	—	$	—	$	—	$	(2	)	$	673
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		121		291		355		—		(17		)	750
Commodity consideration	—		—		13		3		40		—		—			56
Other	1		—		9		34		9		—		(3		)	50
Total service revenues	566		110		143		328		404		—		(22		)	1,529
Product Sales:
NGL and natural gas	23		—		48		37		430		—		(46		)	492
Total revenues from contracts with customers	589		110		191		365		834		—		(68		)	2,021
Other revenues (1)	2		—		—		5		8		8		(3		)	20
Total revenues	$	591	$	110	$	191	$	370	$	842	$	8	$	(71	)	$	2,041



	Transco		Northwest Pipeline		Gulf of Mexico Midstream		Northeast Midstream		West Midstream		Other		Eliminations			Total
	(Millions)
Six Months Ended June 30, 2020
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	1,196	$	225	$	—	$	—	$	—	$	—	$	(3	)	$	1,418
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		177		620		596		—		(41		)	1,352
Commodity consideration	—		—		8		3		42		—		—			53
Other	5		—		16		82		26		—		(9		)	120
Total service revenues	1,201		225		201		705		664		—		(53		)	2,943
Product Sales:
NGL and natural gas	40		—		49		30		662		—		(60		)	721
Total revenues from contracts with customers	1,241		225		250		735		1,326		—		(113		)	3,664
Other revenues (1)	2		—		3		10		5		17		(7		)	30
Total revenues	$	1,243	$	225	$	253	$	745	$	1,331	$	17	$	(120	)	$	3,694


Six Months Ended June 30, 2019
Revenues from contracts with customers:
Service revenues:
Regulated interstate natural gas transportation and storage	$	1,135	$	224	$	—	$	—	$	—	$	—	$	(2	)	$	1,357
Gathering, processing, transportation, fractionation, and storage:
Monetary consideration	—		—		249		530		699		—		(35		)	1,443
Commodity consideration	—		—		26		8		86		—		—			120
Other	1		—		13		66		20		—		(7		)	93
Total service revenues	1,136		224		288		604		805		—		(44		)	3,013
Product Sales:
NGL and natural gas	47		—		106		84		909		—		(104		)	1,042
Total revenues from contracts with customers	1,183		224		394		688		1,714		—		(148		)	4,055
Other revenues (1)	5		—		4		10		12		15		(6		)	40
Total revenues	$	1,188	$	224	$	398	$	698	$	1,726	$	15	$	(154	)	$	4,095

______________________________

(1)

Revenues not within the scope of Accounting Standards Codification Topic 606, “Revenue from Contracts with Customers,” consist of leasing revenues associated with our headquarters building and management fees that we receive for certain services we provide to operated equity-method investments, which are reported in Service revenues in our Consolidated Statement of Operations, and amounts associated with our derivative contracts, which are reported in Product sales in our Consolidated Statement of Operations.

Contract Assets

The following table presents a reconciliation of our contract assets:



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Millions)
Balance at beginning of period	$	18		$	22		$	8		$	4
Revenue recognized in excess of amounts invoiced	46			20			69			39
Minimum volume commitments invoiced	(34		)	(25		)	(47		)	(26		)
Balance at end of period	$	30		$	17		$	30		$	17

Contract Liabilities

The following table presents a reconciliation of our contract liabilities:



	Three Months Ended June 30,						Six Months Ended June 30,
	2020			2019			2020			2019
	(Millions)
Balance at beginning of period	$	1,189		$	1,335		$	1,215		$	1,397
Payments received and deferred	74			93			102			126
Significant financing component	2			3			5			7
Recognized in revenue	(62		)	(100		)	(119		)	(199		)
Balance at end of period	$	1,203		$	1,331		$	1,203		$	1,331

Remaining Performance Obligations

Remaining performance obligations primarily include reservation charges on contracted capacity for our gas pipeline firm transportation contracts with customers, storage capacity contracts, long-term contracts containing minimum volume commitments associated with our midstream businesses, and fixed payments associated with offshore production handling. For our interstate natural gas pipeline businesses, remaining performance obligations reflect the rates for such services in our current FERC tariffs for the life of the related contracts; however, these rates may change based on future tariffs approved by the FERC and the amount and timing of these changes are not currently known.

Our remaining performance obligations exclude variable consideration, including contracts with variable consideration for which we have elected the practical expedient for consideration recognized in revenue as billed. Certain of our contracts contain evergreen and other renewal provisions for periods beyond the initial term of the contract. The remaining performance obligation amounts as of June 30, 2020, do not consider potential future performance obligations for which the renewal has not been exercised and excludes contracts with customers for which the underlying facilities have not received FERC authorization to be placed into service. Consideration received prior to June 30, 2020, that will be recognized in future periods is also excluded from our remaining performance obligations and is instead reflected in contract liabilities.

The following table presents the amount of the contract liabilities balance expected to be recognized as revenue when performance obligations are satisfied and the transaction price allocated to the remaining performance obligations under certain contracts as of June 30, 2020.



	Contract Liabilities		Remaining Performance Obligations
	(Millions)
2020 (remainder)	$	97	$	1,662
2021	81		3,266
2022	62		3,100
2023	56		2,682
2024	56		2,282
Thereafter	851		18,138
Total	$	1,203	$	31,130

Accounts Receivable

The following is a summary of our Trade accounts and other receivables – net:



	June 30, 2020		December 31, 2019
	(Millions)
Accounts receivable related to revenues from contracts with customers	$	749	$	890
Other accounts receivable	158		106
Total reflected in Trade accounts and other receivables – net	$	907	$	996