Revenue from Contracts with Customers

6 Months Ended

Jun. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue from Contracts with Customers

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 second quarters and six months ended June 30, 2019 and 2018 were as follows:

(in millions)	Second quarter ended
	June 30, 2019						June 30, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Diversified Global Markets:
Aerospace & Defense	$	512.3	$	59.9	$	572.2	$	438.5	$	43.4	$	481.9
Oil & Gas	18.4		117.6		136.0		18.3		114.4		132.7
Energy	34.1		43.3		77.4		40.2		28.0		68.2
Automotive	3.1		70.5		73.6		2.8		77.6		80.4
Construction/Mining	13.4		39.2		52.6		19.0		36.9		55.9
Food Equipment & Appliances	—		49.6		49.6		—		63.6		63.6
Medical	38.6		3.8		42.4		46.0		4.0		50.0
Electronics/Computers/Communications	1.2		36.9		38.1		2.3		33.2		35.5
Other	21.3		17.2		38.5		24.8		16.5		41.3
Total	$	642.4	$	438.0	$	1,080.4	$	591.9	$	417.6	$	1,009.5

(in millions)	Six months ended
	June 30, 2019						June 30, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Diversified Global Markets:
Aerospace & Defense	$	977.4	$	120.4	$	1,097.8	$	865.2	$	79.2	$	944.4
Oil & Gas	35.1		213.7		248.8		33.5		251.8		285.3
Automotive	6.7		143.8		150.5		5.4		154.1		159.5
Energy	61.4		71.7		133.1		71.0		49.4		120.4
Construction/Mining	31.9		78.6		110.5		36.6		74.9		111.5
Food Equipment & Appliances	0.1		102.7		102.8		0.1		122.4		122.5
Medical	81.3		7.2		88.5		87.2		7.7		94.9
Electronics/Computers/Communications	2.3		69.9		72.2		3.7		64.7		68.4
Other	47.4		33.6		81.0		49.9		31.7		81.6
Total	$	1,243.6	$	841.6	$	2,085.2	$	1,152.6	$	835.9	$	1,988.5

(in millions)	Second quarter ended
	June 30, 2019						June 30, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Primary Geographical Market:
United States	$	357.6	$	282.9	$	640.5	$	292.1	$	283.7	$	575.8
Europe	181.1		26.1		207.2		195.2		35.3		230.5
Asia	60.5		111.4		171.9		71.5		72.2		143.7
Canada	24.5		4.9		29.4		18.4		10.9		29.3
South America, Middle East and other	18.7		12.7		31.4		14.7		15.5		30.2
Total	$	642.4	$	438.0	$	1,080.4	$	591.9	$	417.6	$	1,009.5

(in millions)	Six months ended
	June 30, 2019						June 30, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Primary Geographical Market:
United States	$	693.6	$	568.0	$	1,261.6	$	581.9	$	548.2	$	1,130.1
Europe	359.4		58.8		418.2		392.2		63.8		456.0
Asia	113.3		181.8		295.1		119.8		174.7		294.5
Canada	43.6		12.2		55.8		35.0		21.5		56.5
South America, Middle East and other	33.7		20.8		54.5		23.7		27.7		51.4
Total	$	1,243.6	$	841.6	$	2,085.2	$	1,152.6	$	835.9	$	1,988.5

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.

	Second quarter ended
	June 30, 2019						June 30, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Diversified Products and Services:
High-Value Products
Nickel-based alloys and specialty alloys	31	%	35	%	33	%	32	%	27	%	30	%
Precision forgings, castings and components	32	%	—	%	19	%	35	%	—	%	20	%
Titanium and titanium-based alloys	27	%	4	%	18	%	23	%	5	%	16	%
Precision and engineered strip	—	%	30	%	12	%	—	%	32	%	13	%
Zirconium and related alloys	10	%	—	%	6	%	10	%	—	%	6	%
Total High-Value Products	100	%	69	%	88	%	100	%	64	%	85	%
Standard Products
Standard stainless products	—	%	31	%	12	%	—	%	36	%	15	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

	Six months ended
	June 30, 2019						June 30, 2018
	HPMC		FRP		Total		HPMC		FRP		Total
Diversified Products and Services:
High-Value Products
Nickel-based alloys and specialty alloys	31	%	32	%	31	%	31	%	29	%	30	%
Precision forgings, castings and components	32	%	—	%	19	%	36	%	—	%	21	%
Titanium and titanium-based alloys	27	%	6	%	18	%	24	%	5	%	16	%
Precision and engineered strip	—	%	31	%	13	%	—	%	32	%	13	%
Zirconium and related alloys	10	%	—	%	6	%	9	%	—	%	5	%
Total High-Value Products	100	%	69	%	87	%	100	%	66	%	85	%
Standard Products
Standard stainless products	—	%	31	%	13	%	—	%	34	%	15	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

The Company maintains a backlog of confirmed orders totaling $2.38 billion and $2.19 billion at June 30, 2019 and 2018, respectively. Due to the structure of the Company’s long-term agreements, approximately 80% of this backlog at June 30, 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 June 30, 2019 and December 31, 2018, accounts receivable with customers were $586.4 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 six months ended June 30, 2019 and 2018:

(in millions)
Accounts Receivable - Reserve for Doubtful Accounts	June 30, 2019			June 30, 2018
Balance as of beginning of fiscal year	$	6.0		$	5.9
Expense to increase the reserve	0.2			0.6
Write-off of uncollectible accounts	(1.0		)	(0.4		)
Reclassification to held for sale (see Note 5)	(0.2		)	—
Balance as of period end	$	5.0		$	6.1

(in millions)
Contract Assets
Short-term	June 30, 2019			June 30, 2018
Balance as of beginning of fiscal year	$	51.2		$	36.5
Recognized in current year	45.1			42.2
Reclassified to accounts receivable	(48.0		)	(47.8		)
Impairment	—			—
Reclassification to/from long-term	—			16.8
Reclassification to held for sale (See Note 5)	(7.4		)	—
Balance as of period end	$	40.9		$	47.7
Long-term	June 30, 2019			June 30, 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	—			(16.8		)
Balance as of period end	$	0.1		$	0.1

(in millions)
Contract Liabilities
Short-term	June 30, 2019			June 30, 2018
Balance as of beginning of fiscal year	$	71.4		$	69.7
Recognized in current year	57.1			31.8
Amounts in beginning balance reclassified to revenue	(44.8		)	(31.7		)
Current year amounts reclassified to revenue	(14.4		)	(8.5		)
Other	—			1.7
Reclassification to/from long-term	—			7.4
Balance as of period end	$	69.3		$	70.4
Long-term	June 30, 2019			June 30, 2018
Balance as of beginning of fiscal year	$	7.3		$	22.2
Recognized in current year	0.5			0.3
Amounts in beginning balance reclassified to revenue	(0.5		)	(0.5		)
Current year amounts reclassified to revenue	—			—
Other	—			—
Reclassification to/from short-term	—			(7.4		)
Balance as of period end	$	7.3		$	14.6

Contract costs for obtaining and fulfilling a contract were $5.4 million and $5.2 million as of June 30, 2019 and December 31, 2018, respectively, and are reported in other long-term assets on the consolidated balance sheet. Amortization expense for the the three and six months ended June 30, 2019 of these contract costs was $0.3 million and $0.6 million, respectively. Amortization expense for the three and six months ended June 30, 2018 of these contract cost was $0.3 million and $0.6 million, respectively.