Revenue from Contracts with Customers

9 Months Ended

Sep. 29, 2024

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 Advanced Alloys & Solutions (AA&S). Revenue is disaggregated within these two business segments by diversified global markets, primary geographical markets and diversified products. Comparative information regarding the Company’s overall revenues by global and geographical markets for the quarters and year-to-date periods ended September 29, 2024 and October 1, 2023 is included in the following tables.

(in millions)	Quarter ended
	September 29, 2024						October 1, 2023
	HPMC		AA&S		Total		HPMC		AA&S		Total
Diversified Global Markets:
Aerospace & Defense:
Jet Engines- Commercial	$	341.9	$	24.0	$	365.9	$	312.5	$	16.9	$	329.4
Airframes- Commercial	84.1		96.7		180.8		104.0		99.6		203.6
Defense	48.9		58.2		107.1		39.7		53.1		92.8
Total Aerospace & Defense	474.9		178.9		653.8		456.2		169.6		625.8
Energy:
Conventional Energy	2.4		70.2		72.6		2.5		84.5		87.0
Specialty Energy	26.3		43.6		69.9		20.2		41.7		61.9
Total Energy	28.7		113.8		142.5		22.7		126.2		148.9
Automotive	4.6		59.2		63.8		7.2		40.9		48.1
Medical	28.6		24.5		53.1		28.9		18.6		47.5
Electronics	—		49.1		49.1		0.6		44.2		44.8
Construction/Mining	4.9		36.9		41.8		7.7		32.3		40.0
Food Equipment & Appliances	—		12.9		12.9		—		16.2		16.2
Other	10.7		23.5		34.2		16.2		38.1		54.3
Total	$	552.4	$	498.8	$	1,051.2	$	539.5	$	486.1	$	1,025.6

(in millions)	Year-to-date period ended
	September 29, 2024						October 1, 2023
	HPMC		AA&S		Total		HPMC		AA&S		Total
Diversified Global Markets:
Aerospace & Defense:
Jet Engines- Commercial	$	970.6	$	59.3	$	1,029.9	$	914.2	$	67.0	$	981.2
Airframes- Commercial	263.5		318.2		581.7		242.0		295.7		537.7
Defense	160.9		180.9		341.8		131.6		157.8		289.4
Total Aerospace & Defense	1,395.0		558.4		1,953.4		1,287.8		520.5		1,808.3
Energy:
Conventional Energy	8.3		232.9		241.2		8.6		317.2		325.8
Specialty Energy	67.0		135.6		202.6		75.0		137.8		212.8
Total Energy	75.3		368.5		443.8		83.6		455.0		538.6
Automotive	13.4		177.2		190.6		19.5		140.8		160.3
Medical	97.5		76.4		173.9		70.7		53.7		124.4
Electronics	3.0		139.8		142.8		1.8		113.4		115.2
Construction/Mining	19.9		93.3		113.2		26.9		101.9		128.8
Food Equipment & Appliances	—		41.0		41.0		—		58.6		58.6
Other	40.2		90.5		130.7		47.4		128.1		175.5
Total	$	1,644.3	$	1,545.1	$	3,189.4	$	1,537.7	$	1,572.0	$	3,109.7

(in millions)	Quarter ended
	September 29, 2024						October 1, 2023
	HPMC		AA&S		Total		HPMC		AA&S		Total
Primary Geographical Market:
United States	$	285.8	$	339.8	$	625.6	$	242.6	$	314.2	$	556.8
Europe	201.4		41.6		243.0		217.7		49.7		267.4
Asia	30.3		93.0		123.3		37.8		103.4		141.2
Canada	16.4		15.0		31.4		13.1		10.4		23.5
South America, Middle East and other	18.5		9.4		27.9		28.3		8.4		36.7
Total	$	552.4	$	498.8	$	1,051.2	$	539.5	$	486.1	$	1,025.6

(in millions)	Year-to-date period ended
	September 29, 2024						October 1, 2023
	HPMC		AA&S		Total		HPMC		AA&S		Total
Primary Geographical Market:
United States	$	797.9	$	1,037.8	$	1,835.7	$	661.1	$	1,052.3	$	1,713.4
Europe	636.9		146.5		783.4		619.7		137.7		757.4
Asia	106.5		258.5		365.0		132.8		316.4		449.2
Canada	45.4		39.5		84.9		41.7		34.9		76.6
South America, Middle East and other	57.6		62.8		120.4		82.4		30.7		113.1
Total	$	1,644.3	$	1,545.1	$	3,189.4	$	1,537.7	$	1,572.0	$	3,109.7

Comparative information regarding the Company’s major products based on their percentages of sales is included in the following table. Hot-Rolling and Processing Facility (HRPF) conversion service sales in the AA&S segment are excluded from this presentation.

	Quarter ended
	September 29, 2024						October 1, 2023
	HPMC		AA&S		Total		HPMC		AA&S		Total
Diversified Products and Services:
Nickel-based alloys and specialty alloys	43	%	50	%	46	%	42	%	52	%	47	%
Precision forgings, castings and components	36	%	—	%	20	%	33	%	—	%	18	%
Titanium and titanium-based alloys	21	%	12	%	17	%	24	%	13	%	19	%
Precision rolled strip products	—	%	21	%	9	%	1	%	19	%	9	%
Zirconium and related alloys	—	%	17	%	8	%	—	%	16	%	7	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

	Year-to-date period ended
	September 29, 2024						October 1, 2023
	HPMC		AA&S		Total		HPMC		AA&S		Total
Diversified Products and Services:
Nickel-based alloys and specialty alloys	41	%	50	%	45	%	45	%	56	%	50	%
Precision forgings, castings and components	36	%	—	%	19	%	33	%	—	%	17	%
Titanium and titanium-based alloys	23	%	13	%	18	%	21	%	11	%	16	%
Zirconium and related alloys	—	%	18	%	9	%	—	%	15	%	8	%
Precision rolled strip products	—	%	19	%	9	%	1	%	18	%	9	%
Total	100	%	100	%	100	%	100	%	100	%	100	%

The Company maintained a backlog of confirmed orders totaling $3.9 billion and $3.6 billion at September 29, 2024 and October 1, 2023, respectively. Due to the structure of the Company’s long-term agreements, approximately 65% of this backlog at September 29, 2024 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 September 29, 2024 and December 31, 2023, accounts receivable from customers were $732.8 million and $628.2 million, respectively. The following represents the rollforward of accounts receivable - reserve for doubtful accounts and contract assets and liabilities for the year-to-date periods ended September 29, 2024 and October 1, 2023:

(in millions)
Accounts Receivable - Reserve for Doubtful Accounts	September 29, 2024		October 1, 2023
Balance as of beginning of year	$	3.2	$	7.7
Expense to increase the reserve	—		0.2
Write-off of uncollectible accounts	(0.6)		(4.2)
Balance as of period end	$	2.6	$	3.7

(in millions)
Contract Assets
Short-term	September 29, 2024		October 1, 2023
Balance as of beginning of year	$	59.1	$	64.1
Recognized in current year	68.9		66.6
Reclassified to accounts receivable	(37.5)		(74.1)
Balance as of period end	$	90.5	$	56.6

(in millions)
Contract Liabilities
Short-term	September 29, 2024		October 1, 2023
Balance as of beginning of year	$	163.6	$	149.1
Recognized in current year	75.1		61.4
Amounts in beginning balance reclassified to revenue	(67.7)		(86.7)
Current year amounts reclassified to revenue	(36.9)		(40.9)
Other	—		(0.1)
Reclassification to/from long-term	12.4		27.4
Balance as of period end	$	146.5	$	110.2
Long-term (a)	September 29, 2024		October 1, 2023
Balance as of beginning of year	$	39.4	$	66.8
Recognized in current year	10.8		1.0
Reclassification to/from short-term	(12.4)		(27.4)
Balance as of period end	$	37.8	$	40.4

(a) Long-term contract liabilities are included in other long-term liabilities on the consolidated balance sheets.

Contract costs for obtaining and fulfilling a contract were $9.8 million and $8.1 million as of September 29, 2024 and December 31, 2023, respectively, and are reported in other long-term assets on the consolidated balance sheet. Contract cost amortization expense for the quarter and year-to-date period ended September 29, 2024 was $0.2 million and $0.8 million, respectively. Contract cost amortization expense for the quarter and year-to-date period ended October 1, 2023 was $0.2 million and $0.9 million, respectively.