Revenue from Contracts with Customers

Disaggregation of Revenue

The Company operates in two business segments: High Performance Materials & Components (HPMC) and Flat Rolled Products (FRP). Revenue is disaggregated within these two business segments by diversified global markets, primary geographical markets and diversified products. Comparative information of the Company’s overall revenues (in millions) by global and geographical markets for the first quarters ended March 31, 2019 and 2018 were as follows:



(in millions)	First quarter ended
	March 31, 2019						March 31, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Diversified Global Markets:
Aerospace & Defense	$	465.1	$	60.5	$	525.6	$	426.7	$	35.7	$	462.4
Oil & Gas	16.7		96.1		112.8		15.2		137.5		152.7
Automotive	3.6		73.3		76.9		2.6		76.5		79.1
Construction/Mining	18.5		39.4		57.9		17.6		38.0		55.6
Electrical Energy	27.3		28.4		55.7		30.8		21.4		52.2
Food Equipment & Appliances	0.1		53.1		53.2		0.1		58.8		58.9
Medical	42.7		3.4		46.1		41.2		3.7		44.9
Electronics/Computers/Communications	1.1		33.0		34.1		1.5		31.4		32.9
Other	26.1		16.4		42.5		25.0		15.3		40.3
Total	$	601.2	$	403.6	$	1,004.8	$	560.7	$	418.3	$	979.0



(in millions)	First quarter ended
	March 31, 2019						March 31, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Primary Geographical Market:
United States	$	336.0	$	285.1	$	621.1	$	289.8	$	264.5	$	554.3
Europe	178.3		32.7		211.0		197.0		28.5		225.5
Asia	52.8		70.4		123.2		48.3		102.5		150.8
Canada	19.1		7.3		26.4		16.6		10.6		27.2
South America, Middle East and other	15.0		8.1		23.1		9.0		12.2		21.2
Total	$	601.2	$	403.6	$	1,004.8	$	560.7	$	418.3	$	979.0

Comparative information of the Company’s major high-value and standard products based on their percentages of sales is included in the following table. FRP conversion services are excluded from this presentation.



	First quarter ended
	March 31, 2019						March 31, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Diversified Products and Services:
High-Value Products
Nickel-based alloys and specialty alloys	31	%	29	%	30	%	29	%	31	%	30	%
Precision forgings, castings and components	32	%	—	%	19	%	38	%	—	%	21	%
Titanium and titanium-based alloys	27	%	6	%	19	%	24	%	5	%	16	%
Precision and engineered strip	—	%	33	%	13	%	—	%	31	%	14	%
Zirconium and related alloys	10	%	—	%	6	%	9	%	—	%	5	%
Total High-Value Products	100	%	68	%	87	%	100	%	67	%	86	%
Standard Products
Stainless steel sheet	—	%	17	%	7	%	—	%	20	%	8	%
Specialty stainless sheet	—	%	11	%	4	%	—	%	9	%	4	%
Stainless steel plate and other	—	%	4	%	2	%	—	%	4	%	2	%
Total Standard Products	—	%	32	%	13	%	—	%	33	%	14	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

The Company maintains a backlog of confirmed orders totaling $2.59 billion and $2.05 billion at March 31, 2019 and 2018, respectively. Due to the structure of the Company’s long-term agreements, approximately 80% of this backlog at March 31, 2019 represented booked orders with performance obligations that will be satisfied within the next 12 months. The backlog does not reflect any elements of variable consideration.

Contract balances

As of March 31, 2019 and December 31, 2018, accounts receivable with customers were $570.8 million and $533.8 million, respectively. The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the three months ended March 31, 2019 and 2018:



(in millions)
Accounts Receivable - Reserve for Doubtful Accounts	March 31, 2019			March 31, 2018
Balance as of beginning of fiscal year	$	6.0		$	5.9
Expense to increase the reserve	0.1			0.3
Write-off of uncollectible accounts	(0.4		)	(0.3		)
Balance as of period end	$	5.7		$	5.9



(in millions)
Contract Assets
Short-term	March 31, 2019			March 31, 2018
Balance as of beginning of fiscal year	$	51.2		$	36.5
Recognized in current year	23.9			23.4
Reclassified to accounts receivable	(26.4		)	(22.1		)
Impairment	—			—
Reclassification to/from long-term	—			0.8
Balance as of period end	$	48.7		$	38.6

Long-term	March 31, 2019			March 31, 2018
Balance as of beginning of fiscal year	$	0.1		$	16.9
Recognized in current year	—			—
Reclassified to accounts receivable	—			—
Impairment	—			—
Reclassification to/from short-term	—			(0.8		)
Balance as of period end	$	0.1		$	16.1



(in millions)
Contract Liabilities
Short-term	March 31, 2019			March 31, 2018
Balance as of beginning of fiscal year	$	71.4		$	69.7
Recognized in current year	38.6			8.4
Amounts in beginning balance reclassified to revenue	(29.3		)	(14.1		)
Current year amounts reclassified to revenue	(2.8		)	(0.3		)
Other	—			—
Reclassification to/from long-term	—			2.5
Balance as of period end	$	77.9		$	66.2

Long-term	March 31, 2019			March 31, 2018
Balance as of beginning of fiscal year	$	7.3		$	22.2
Recognized in current year	0.3			0.2
Amounts in beginning balance reclassified to revenue	(0.3		)	(0.2		)
Current year amounts reclassified to revenue	—			—
Other	—			—
Reclassification to/from short-term	—			(2.5		)
Balance as of period end	$	7.3		$	19.7

Contract costs for obtaining and fulfilling a contract were $5.2 million as of both March 31, 2019 and December 31, 2018, and are reported in other long-term assets on the consolidated balance sheet. Amortization expense for both the three months ended March 31, 2019 and 2018 of these contract costs was $0.3 million.