MWE » Topics » Revenue Recognition

This excerpt taken from the MWE 8-K filed May 18, 2009.

Revenue Recognition

 

The Partnership generates the majority of its revenues from natural gas gathering, transportation and processing; NGL transportation, fractionation, marketing and storage; and crude oil gathering and transportation. It enters into variety of contract types. In many cases, the Partnership provides services under contracts that contain a combination of more than one of the arrangements described below. The Partnership provides services under the following different types of arrangements:

 

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These excerpts taken from the MWE 10-K filed Mar 2, 2009.

Revenue Recognition

        The Partnership generates the majority of its revenues from natural gas gathering, transportation and processing; NGL transportation, fractionation, marketing and storage; and crude oil gathering and transportation. It enters into variety of contract types. In many cases, the Partnership provides services under contracts that contain a combination of more than one of the arrangements described below. The Partnership provides services under the following different types of arrangements:

    Fee-based arrangements—Under fee-based arrangements, the Partnership receives a fee or fees for one or more of the following services: gathering, processing and transmission of natural gas; transportation, fractionation and storage of NGLs; and gathering and transportation of crude oil.

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MARKWEST ENERGY PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

      The revenue the Partnership earns from these arrangements is directly related to the volume of natural gas, NGLs or crude oil that flows through the Partnership's systems and facilities and is not directly dependent on commodity prices.

    Percent-of-proceeds arrangements—Under percent-of-proceeds arrangements, the Partnership gathers and processes natural gas on behalf of producers, sells the resulting residue gas, condensate and NGLs at market prices and remits to producers an agreed-upon percentage of the proceeds. In other cases, instead of remitting cash payments to the producer, the Partnership will deliver an agreed-upon percentage of the residue gas and NGLs to the producer and sell the volumes the Partnership keeps to third parties at market prices.

    Percent-of-index arrangements—Under percent-of-index arrangements, the Partnership will purchase natural gas at either (1) a percentage discount to a specified index price, (2) a specified index price less a fixed amount or (3) a percentage discount to a specified index price less an additional fixed amount. The Partnership will then gather and deliver the natural gas to pipelines where the Partnership will resell the natural gas at the index price, or at a different percentage discount to the index price.

    Keep-whole arrangements—Under keep-whole arrangements, the Partnership gathers natural gas from the producer, processes the natural gas and sells the resulting condensate and NGLs to third parties at market prices. Because the extraction of the condensate and NGLs from the natural gas during processing reduces the Btu content of the natural gas, the Partnership must either purchase natural gas at market prices for return to producers or make cash payment to the producers equal to the energy content of this natural gas.

    Settlement margin—Typically, the Partnership is allowed to retain a fixed percentage of the volume gathered to cover the compression fuel charges and deemed-line losses. To the extent the Partnership's gathering systems are operated more or less efficiently than specified per contract allowance, the Partnership is entitled to retain the benefit or loss for its own account.

        In many cases, the Partnership provides services under contracts that contain a combination of more than one of the arrangements described above. The terms of the Partnership's contracts vary based on gas quality conditions, the competitive environment when the contracts are signed and customer requirements. Under all of the arrangements, revenue is recognized at the time the product is delivered and title is transferred. It is upon delivery and title transfer that the Partnership meets all four revenue recognition criteria, and it is at such time that the Partnership recognizes revenue.

        The Partnership's assessment of each of the four revenue recognition criteria as they relate to its revenue producing activities is as follows:

        Persuasive evidence of an arrangement exists.    The Partnership's customary practice is to enter into a written contract, executed by both the customer and the Partnership.

        Delivery.    Delivery is deemed to have occurred at the time the product is delivered and title is transferred, or in the case of fee-based arrangements, when the services are rendered. To the extent the Partnership retains its equity liquids as inventory, delivery occurs when the inventory is subsequently sold and title is transferred to the third party purchaser.

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MARKWEST ENERGY PARTNERS, L.P.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Summary of Significant Accounting Policies (Continued)

        The fee is fixed or determinable.    The Partnership negotiates the fee for its services at the outset of its fee-based arrangements. In these arrangements, the fees are nonrefundable. The fees are generally due within ten days of delivery or services rendered. For other arrangements, the amount of revenue is determinable when the sale of the applicable product has been completed upon delivery and transfer of title. Proceeds from the sale of products are generally due in ten days.

        Collectibility is reasonably assured.    Collectibility is evaluated on a customer-by-customer basis. New and existing customers are subject to a credit review process, which evaluates the customers' financial position (e.g. cash position and credit rating) and their ability to pay. If collectibility is not considered reasonably assured at the outset of an arrangement in accordance with the Partnership's credit review process, revenue is recognized when the fee is collected.

        The Partnership enters into revenue arrangements where it sells customer's gas and/or NGLs and depending on the nature of the arrangement acts as the principal or agent. Revenue from such sales is recognized gross where the Partnership acts as the Principal, under Emerging Issues Task Force ("EITF") Issue No. 99-19, Reporting Revenue Gross as a Principal versus Net as an Agent, as the Partnership takes title to the gas and/or NGLs, has physical inventory risk and does not earn a fixed amount. Revenue is recognized net when the Partnership earns a fixed amount and does not take ownership of the gas and/or NGLs.

        Gas volumes received may be different from gas volumes delivered, resulting in gas imbalances. The Partnership records a receivable or payable for such imbalances based upon the contractual terms of the purchase agreements. The Partnership had an imbalance payable of $0.2 million and $0.9 million at December 31, 2008 and 2007, recorded in Accrued liabilities in the accompanying Consolidated Balance Sheets. The Partnership had an imbalance receivable of $0.9 million and $1.7 million at December 31, 2008 and 2007, respectively, recorded in Receivables, net in the accompanying Consolidated Balance Sheets. Changes in gas imbalances are recognized in Revenue or Purchased product costs in the accompanying Consolidated Statements of Operations.

Revenue Recognition





        The Partnership generates the majority of its revenues from natural gas gathering, transportation and processing; NGL transportation,
fractionation, marketing and storage; and crude oil gathering and transportation. It enters into variety of contract types. In many cases, the Partnership provides services under contracts that
contain a combination of more than one of the arrangements described below. The Partnership provides services under the following different types of arrangements:





    Fee-based arrangements—Under fee-based
    arrangements, the Partnership receives a fee or fees for one or more of the following services: gathering, processing and transmission of natural gas; transportation, fractionation and storage of
    NGLs; and gathering and transportation of crude oil.


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MARKWEST ENERGY PARTNERS, L.P.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2. Summary of Significant Accounting Policies (Continued)






      The
      revenue the Partnership earns from these arrangements is directly related to the volume of natural gas, NGLs or crude oil that flows through the Partnership's systems and facilities and is not
      directly dependent on commodity prices.





    Percent-of-proceeds arrangements—Under
    percent-of-proceeds arrangements, the Partnership gathers and processes natural gas on behalf of producers, sells the resulting residue gas, condensate and NGLs at market
    prices and remits to producers an agreed-upon percentage of the proceeds. In other cases, instead of remitting cash payments to the producer, the Partnership will deliver an
    agreed-upon percentage of the residue gas and NGLs to the producer and sell the volumes the Partnership keeps to third parties at market prices.



    Percent-of-index arrangements—Under
    percent-of-index arrangements, the Partnership will purchase natural gas at either (1) a percentage discount to a specified index price, (2) a specified index
    price less a fixed amount or (3) a percentage discount to a specified index price less an additional fixed amount. The Partnership will then gather and deliver the natural gas to pipelines
    where the Partnership will resell the natural gas at the index price, or at a different percentage discount to the index price.



    Keep-whole arrangements—Under
    keep-whole arrangements, the Partnership gathers natural gas from the producer, processes the natural gas and sells the resulting condensate and NGLs to third parties at market prices.
    Because the extraction of the condensate and NGLs from the natural gas during processing reduces the Btu content of the natural gas, the Partnership must either purchase natural gas at market prices
    for return to producers or make cash payment to the producers equal to the energy content of this natural gas.



    Settlement margin—Typically, the Partnership is allowed to
    retain a fixed percentage of the volume gathered to cover the compression fuel charges and deemed-line losses. To the extent the Partnership's gathering systems are operated more or less
    efficiently than specified per contract allowance, the Partnership is entitled to retain the benefit or loss for its own account.



        In
many cases, the Partnership provides services under contracts that contain a combination of more than one of the arrangements described above. The terms of the Partnership's contracts
vary based on gas quality conditions, the competitive environment when the contracts are signed and customer requirements. Under all of the arrangements, revenue is recognized at the time the product
is delivered and title is transferred. It is upon delivery and title transfer that the Partnership meets all four revenue recognition criteria, and it is at such time that the Partnership recognizes
revenue.



        The
Partnership's assessment of each of the four revenue recognition criteria as they relate to its revenue producing activities is as follows:




        Persuasive evidence of an arrangement exists.    The Partnership's customary practice is to enter into a written contract, executed by both
the customer
and the Partnership.



        Delivery.    Delivery is deemed to have occurred at the time the product is delivered and title is transferred, or in the case of
fee-based
arrangements, when the services are rendered. To the extent the Partnership retains its equity liquids as inventory, delivery occurs when the inventory is subsequently sold and title is transferred to
the third party purchaser.



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MARKWEST ENERGY PARTNERS, L.P.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2. Summary of Significant Accounting Policies (Continued)




        The fee is fixed or determinable.    The Partnership negotiates the fee for its services at the outset of its fee-based arrangements. In
these arrangements, the fees are nonrefundable. The fees are generally due within ten days of delivery or services rendered. For other arrangements, the amount of revenue is determinable when the sale
of the applicable product has been completed upon delivery and transfer of title. Proceeds from the sale of products are generally due in ten days.



        Collectibility is reasonably assured.    Collectibility is evaluated on a customer-by-customer basis. New and existing customers
are subject to a credit review process, which evaluates the customers' financial position (e.g. cash position and credit rating) and their ability to pay. If collectibility is not considered
reasonably assured at the outset of an arrangement in accordance with the Partnership's credit review process, revenue is recognized when the fee is collected.



        The
Partnership enters into revenue arrangements where it sells customer's gas and/or NGLs and depending on the nature of the arrangement acts as the principal or agent. Revenue from
such sales is recognized gross where the Partnership acts as the Principal, under Emerging Issues Task Force ("EITF") Issue No. 99-19,
Reporting Revenue
Gross as a Principal versus Net as an Agent
, as the Partnership takes title to the gas and/or NGLs, has physical inventory risk and does not earn a
fixed amount. Revenue is recognized net when the Partnership earns a fixed amount and does not take ownership of the gas and/or NGLs.



        Gas
volumes received may be different from gas volumes delivered, resulting in gas imbalances. The Partnership records a receivable or payable for such imbalances based upon the
contractual terms of the purchase agreements. The Partnership had an imbalance payable of $0.2 million and $0.9 million at December 31, 2008 and 2007, recorded in
Accrued liabilities in
the accompanying Consolidated Balance Sheets. The Partnership had an imbalance receivable of $0.9 million and
$1.7 million at December 31, 2008 and 2007, respectively, recorded in
Receivables, net in the accompanying Consolidated Balance Sheets.
Changes in gas imbalances are recognized in
Revenue or Purchased product costs in the accompanying
Consolidated Statements of Operations.





Revenue Recognition





        The Partnership generates the majority of its revenues from natural gas gathering, transportation and processing; NGL transportation,
fractionation, marketing and storage; and crude oil gathering and transportation. It enters into variety of contract types. In many cases, the Partnership provides services under contracts that
contain a combination of more than one of the arrangements described below. The Partnership provides services under the following different types of arrangements:





    Fee-based arrangements—Under fee-based
    arrangements, the Partnership receives a fee or fees for one or more of the following services: gathering, processing and transmission of natural gas; transportation, fractionation and storage of
    NGLs; and gathering and transportation of crude oil.


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MARKWEST ENERGY PARTNERS, L.P.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2. Summary of Significant Accounting Policies (Continued)






      The
      revenue the Partnership earns from these arrangements is directly related to the volume of natural gas, NGLs or crude oil that flows through the Partnership's systems and facilities and is not
      directly dependent on commodity prices.





    Percent-of-proceeds arrangements—Under
    percent-of-proceeds arrangements, the Partnership gathers and processes natural gas on behalf of producers, sells the resulting residue gas, condensate and NGLs at market
    prices and remits to producers an agreed-upon percentage of the proceeds. In other cases, instead of remitting cash payments to the producer, the Partnership will deliver an
    agreed-upon percentage of the residue gas and NGLs to the producer and sell the volumes the Partnership keeps to third parties at market prices.



    Percent-of-index arrangements—Under
    percent-of-index arrangements, the Partnership will purchase natural gas at either (1) a percentage discount to a specified index price, (2) a specified index
    price less a fixed amount or (3) a percentage discount to a specified index price less an additional fixed amount. The Partnership will then gather and deliver the natural gas to pipelines
    where the Partnership will resell the natural gas at the index price, or at a different percentage discount to the index price.



    Keep-whole arrangements—Under
    keep-whole arrangements, the Partnership gathers natural gas from the producer, processes the natural gas and sells the resulting condensate and NGLs to third parties at market prices.
    Because the extraction of the condensate and NGLs from the natural gas during processing reduces the Btu content of the natural gas, the Partnership must either purchase natural gas at market prices
    for return to producers or make cash payment to the producers equal to the energy content of this natural gas.



    Settlement margin—Typically, the Partnership is allowed to
    retain a fixed percentage of the volume gathered to cover the compression fuel charges and deemed-line losses. To the extent the Partnership's gathering systems are operated more or less
    efficiently than specified per contract allowance, the Partnership is entitled to retain the benefit or loss for its own account.



        In
many cases, the Partnership provides services under contracts that contain a combination of more than one of the arrangements described above. The terms of the Partnership's contracts
vary based on gas quality conditions, the competitive environment when the contracts are signed and customer requirements. Under all of the arrangements, revenue is recognized at the time the product
is delivered and title is transferred. It is upon delivery and title transfer that the Partnership meets all four revenue recognition criteria, and it is at such time that the Partnership recognizes
revenue.



        The
Partnership's assessment of each of the four revenue recognition criteria as they relate to its revenue producing activities is as follows:




        Persuasive evidence of an arrangement exists.    The Partnership's customary practice is to enter into a written contract, executed by both
the customer
and the Partnership.



        Delivery.    Delivery is deemed to have occurred at the time the product is delivered and title is transferred, or in the case of
fee-based
arrangements, when the services are rendered. To the extent the Partnership retains its equity liquids as inventory, delivery occurs when the inventory is subsequently sold and title is transferred to
the third party purchaser.



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MARKWEST ENERGY PARTNERS, L.P.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)



2. Summary of Significant Accounting Policies (Continued)




        The fee is fixed or determinable.    The Partnership negotiates the fee for its services at the outset of its fee-based arrangements. In
these arrangements, the fees are nonrefundable. The fees are generally due within ten days of delivery or services rendered. For other arrangements, the amount of revenue is determinable when the sale
of the applicable product has been completed upon delivery and transfer of title. Proceeds from the sale of products are generally due in ten days.



        Collectibility is reasonably assured.    Collectibility is evaluated on a customer-by-customer basis. New and existing customers
are subject to a credit review process, which evaluates the customers' financial position (e.g. cash position and credit rating) and their ability to pay. If collectibility is not considered
reasonably assured at the outset of an arrangement in accordance with the Partnership's credit review process, revenue is recognized when the fee is collected.



        The
Partnership enters into revenue arrangements where it sells customer's gas and/or NGLs and depending on the nature of the arrangement acts as the principal or agent. Revenue from
such sales is recognized gross where the Partnership acts as the Principal, under Emerging Issues Task Force ("EITF") Issue No. 99-19,
Reporting Revenue
Gross as a Principal versus Net as an Agent
, as the Partnership takes title to the gas and/or NGLs, has physical inventory risk and does not earn a
fixed amount. Revenue is recognized net when the Partnership earns a fixed amount and does not take ownership of the gas and/or NGLs.



        Gas
volumes received may be different from gas volumes delivered, resulting in gas imbalances. The Partnership records a receivable or payable for such imbalances based upon the
contractual terms of the purchase agreements. The Partnership had an imbalance payable of $0.2 million and $0.9 million at December 31, 2008 and 2007, recorded in
Accrued liabilities in
the accompanying Consolidated Balance Sheets. The Partnership had an imbalance receivable of $0.9 million and
$1.7 million at December 31, 2008 and 2007, respectively, recorded in
Receivables, net in the accompanying Consolidated Balance Sheets.
Changes in gas imbalances are recognized in
Revenue or Purchased product costs in the accompanying
Consolidated Statements of Operations.





Revenue Recognition

        Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue from dehydration services is recognized at the time the service is performed.

Revenue Recognition





        Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue
from dehydration services is recognized at the time the service is performed.





Revenue Recognition





        Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue
from dehydration services is recognized at the time the service is performed.





This excerpt taken from the MWE 8-K filed Mar 14, 2008.

Revenue Recognition

        Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue from dehydration services is recognized at the time the service is performed.

These excerpts taken from the MWE 10-K filed Feb 29, 2008.

Revenue Recognition

        Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue from dehydration services is recognized at the time the service is performed.

Revenue Recognition





        Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue from dehydration services is
recognized at the time the service is performed.





This excerpt taken from the MWE 10-K filed Nov 5, 2007.

Revenue Recognition

        Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue from dehydration services is recognized at the time the service is performed.

This excerpt taken from the MWE 10-K filed Jul 2, 2007.

Revenue Recognition

Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system.  Revenue from dehydration services is recognized at the time the service is performed.

This excerpt taken from the MWE 10-K filed Mar 21, 2007.

Revenue Recognition

Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system.  Revenue from dehydration services is recognized at the time the service is performed.

This excerpt taken from the MWE 10-K filed Mar 7, 2007.

Revenue Recognition

The Partnership generates the majority of its revenues from natural gas gathering, processing and transmission; NGL transportation, fractionation and storage; and crude oil gathering and transportation. It enters into variety of contract types. In many cases, the Partnership provides services under contracts that contain a combination of more than one of the arrangements described below. We provide services under the following different types of arrangements (all of which constitute midstream energy operations):

·                  Fee-based arrangements - Under fee-based arrangements, the Partnership receives a fee or fees for one or more of the following services: gathering, processing and transmission of natural gas; transportation, fractionation and storage of NGLs; and gathering and transportation of crude oil. The revenue the Partnership earns from these arrangements is directly related to the volume of natural gas, NGLs or crude oil that flows through our systems and facilities and is not directly dependent on commodity prices.

72




·                  Percent-of-proceeds arrangements - Under percent-of-proceeds arrangements, the Partnership gathers and processes natural gas on behalf of producers, sells the resulting residue gas, condensate and NGLs at market prices and remits to producers an agreed-upon percentage of the proceeds based on an index price. In other cases, instead of remitting cash payments to the producer, the Partnership will deliver an agreed-upon percentage of the residue gas and NGLs to the producer and sell the volumes we keep to third parties at market prices.

·                  Percent-of-index arrangements - Under percent-of-index arrangements, the Partnership will purchase natural gas at either (1) a percentage discount to a specified index price, (2) a specified index price less a fixed amount or (3) a percentage discount to a specified index price less an additional fixed amount. The Partnership will then gather and deliver the natural gas to pipelines where we resell the natural gas at the index price, or at a different percentage discount to the index price.

·                  Keep-whole arrangements. Under keep-whole arrangements, the Partnership gathers natural gas from the producer, processes the natural gas and sells the resulting condensate and NGLs to third parties at market prices. Because the extraction of the condensate and NGLs from the natural gas during processing reduces the Btu content of the natural gas, the Partnership must either purchase natural gas at market prices for return to producers or make cash payment to the producers equal to the energy content of this natural gas.

·                  Settlement margin - Typically, the Partnership is allowed to retain a fixed percentage of the volume gathered to cover the compression fuel charges and deemed-line losses. To the extent the Partnership’s gathering systems are operated more efficiently than specified per contract allowance, the Partnership is entitled to retain the difference for its own account.

In many cases, we provide services under contracts that contain a combination of more than one of the arrangements described above. The terms of our contracts vary based on gas quality conditions, the competitive environment when the contracts are signed and customer requirements.  Under all of the arrangements, revenue is recognized at the time the product is delivered and title is transferred. It is upon delivery and title transfer that the Partnership meets all four revenue recognition criteria, and it is at such time that the Partnership recognizes revenue.

The Partnership’s assessment of each of the four revenue recognition criteria as they relate to its revenue producing activities is as follows:

This excerpt taken from the MWE 10-K filed Jun 20, 2006.

Revenue Recognition

 

Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue from dehydration services is recognized at the time service is performed.

 

This excerpt taken from the MWE 10-K filed Mar 31, 2006.

Revenue Recognition

 

Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system. Revenue from dehydration services is recognized at the time service is performed.

 

This excerpt taken from the MWE 10-K filed Mar 16, 2006.

Revenue Recognition

 

The Partnership generates the majority of its revenues from natural gas gathering and processing, NGL fractionation, transportation and storage, and crude oil gathering and transportation. While all of these services constitute midstream energy operations, the Partnership provides its services pursuant to six different types of arrangements.  In many cases, the Partnership provides services under contracts that contain a combination of more than one of the arrangements.  The following is a description of the Partnership’s six arrangements.

 

     

This excerpt taken from the MWE 8-K filed Dec 22, 2005.

Revenue Recognition

The Partnership recognizes revenue for the sale of products in the period of delivery.  Prior to September 1, 2005, under terms of a hydrogen sales contract, as consideration for hydrogen supplied to the customer, the customer was required to deliver natural gas containing 130% of the British Thermal Units contained in the hydrogen supplied to the customer.  Such exchanges of product were treated as non-monetary exchanges in accordance with Accounting Principles Board (APB) Opinion No. 29, Accounting for Nonmonetary Transactions, and accordingly, no sales or purchases of product are reflected in the statements of operations for these transactions.  The values of these exchanges were $16.2 million and $20.4 million for the nine months ended September 30, 2005 and 2004.  Under terms of the new hydrogen sales contract effective September 1, 2005, the customer pays cash for hydrogen supplied based on a market price.  Such sales, which totaled $3.5 million, are reported as product revenue in the period of delivery.

 

This excerpt taken from the MWE 8-K filed Oct 11, 2005.

Revenue Recognition

 

Revenue from pipeline transportation of hydrocarbons is recognized upon receipt of the hydrocarbons into the pipeline system.  Revenue from dehydration services is recognized at the time the service is performed.

 

In the course of providing transportation services to customers, Stingray may receive different quantities of gas from shippers than the quantities delivered on behalf of those shippers.  These transactions result in imbalances (gains and losses), which are settled in-kind through a fuel gas and unaccounted-for gas tracking mechanism, negotiated cash-outs between parties, or are subject to a cash-out procedure included in Stingray’s tariff.  The gas imbalance asset represents the cumulative amount of fuel gas and unaccounted for gas as well as other imbalance gains and losses to be recovered from shippers in future periods under mechanisms provided for by the tariff.  Gas imbalance liability represents natural gas volumes owed to Stingray’s customers, and are valued at an average monthly index price, which was $6.5675 Dth for the month of December 2004.

 

This excerpt taken from the MWE 10-K filed Jun 24, 2005.

Revenue Recognition

 

Gas gathering and processing, NGL fractionation, transportation and storage revenues are recognized as volumes are processed, fractionated, transported and stored in accordance with contractual terms.  Gas volumes received may be different from gas volumes delivered resulting in gas imbalances.  The Partnership records a receivable or payable for such imbalances based upon the contractual terms of the purchase agreements.  The Partnership had an imbalance payable of $0.1 million and $0.7 million and an imbalance receivable of $1.4 million and $1.9 million at December 31, 2004 and 2003, respectively.  Revenues for the transportation of crude are based upon regulated tariff rates and the related transportation volumes and are recognized when delivery of crude is made to the purchaser or other common carrier pipeline.  Revenue for NGL product sales are recognized at the time the product is delivered and title is transferred.

 

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