Revenue Recognition and Contracts with Customers

6 Months Ended

Sep. 30, 2020

Change In Contract With Customer Asset And Liability [Abstract]

Revenue Recognition and Contracts with Customers

4.    REVENUE RECOGNITION AND CONTRACTS WITH CUSTOMERS

Disaggregation of Revenue

The Company disaggregates revenue based on the method of measuring satisfaction of the performance obligation either over time or at a point in time. Additionally, the Company disaggregates revenue based upon the end market where products and services are transferred to the customer. The Company’s principal operating segments and related revenue are discussed in Note 13, Segments.

The following table shows disaggregated net sales satisfied overtime and at a point in time (excluding intercompany sales) for the three and six months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Systems & Support
Satisfied over time	$	102,807	$	139,354	$	206,155	$	268,596
Satisfied at a point in time		147,286		202,431		278,234		377,831
Revenue from contracts with customers		250,093		341,785		484,389		646,427
Amortization of acquired contract liabilities		3,544		9,624		7,263		17,749
Total revenue		253,637		351,409		491,652		664,176
Aerospace Structures
Satisfied over time	$	204,180	$	372,247	$	447,819	$	744,484
Satisfied at a point in time		10,379		35,462		16,534		71,874
Revenue from contracts with customers		214,559		407,709		464,353		816,358
Amortization of acquired contract liabilities		13,619		12,992		20,887		21,807
Total revenue		228,178		420,701		485,240		838,165
	$	481,815	$	772,110	$	976,892	$	1,502,341

The following table shows disaggregated net sales by end market (excluding intercompany sales) for the three and six months ended September 30, 2020 and 2019:

	Three Months Ended September 30,				Six Months Ended September 30,
	2020		2019		2020		2019
Systems & Support
Commercial aerospace	$	95,393	$	194,266	$	187,573	$	369,585
Military		131,120		108,516		251,504		203,874
Business jets		8,708		18,357		19,082		34,503
Regional		7,112		11,751		12,987		22,124
Non-aviation		7,760		8,895		13,243		16,341
Revenue from contracts with customers		250,093		341,785		484,389		646,427
Amortization of acquired contract liabilities		3,544		9,624		7,263		17,749
Total revenue	$	253,637	$	351,409	$	491,652	$	664,176
Aerospace Structures
Commercial aerospace	$	121,550	$	242,888	$	262,521	$	472,529
Military		35,438		28,778		73,694		56,378
Business jets		54,150		110,660		120,102		231,809
Regional		3,414		25,377		8,025		55,632
Non-aviation		7		6		11		10
Revenue from contracts with customers		214,559		407,709		464,353		816,358
Amortization of acquired contract liabilities		13,619		12,992		20,887		21,807
Total revenue		228,178		420,701		485,240		838,165
	$	481,815	$	772,110	$	976,892	$	1,502,341

Contract Assets and Liabilities

Contract assets primarily represent revenues recognized for performance obligations that have been satisfied or partially satisfied but for which amounts have not been billed. This typically occurs when revenue is recognized over time but the Company's contractual right to bill the customer and receive payment is conditional upon the satisfaction of additional performance obligations in the contract, such as final delivery of the product. Contract assets are recognized when the revenue associated with the contract is recognized prior to billing and derecognized when billed in accordance with the terms of the contract. The Company pools contract assets that share underlying risk characteristics and records an allowance for expected credit losses based on a combination of prior experience, current economic conditions and management’s expectations of future economic conditions, and specific collectibility matters when they arise.  Contract assets are presented net of this reserve on the consolidated balance sheets.  For the three and six months ended September 30, 2020 and 2019, credit loss expense and write-offs related to contract assets were immaterial.  

Contract liabilities are recorded when customers remit contractual cash payments in advance of the Company satisfying performance obligations under contractual arrangements, including those with performance obligations to be satisfied over a period of time. Contract liabilities other than those pertaining to forward loss reserves are derecognized when or as revenue is recognized.

Contract modifications can also impact contract asset and liability balances. When contracts are modified to account for changes in contract specifications and requirements, the Company considers whether the modification either creates new or changes the existing enforceable rights and obligations. Contract modifications that are for goods or services that are not distinct from the existing contract, due to the significant integration with the original good or service provided, are accounted for as if they were part of that existing contract. The effect of a contract modification to an existing contract on the transaction price and our measure of progress for the performance obligation to which it relates, is recognized as an adjustment to revenue (either as an increase in or a reduction of revenue) on a cumulative catch-up basis. When the modifications include additional performance obligations that are distinct and at relative stand-alone selling price, they are accounted for as a new contract and performance obligation, which are recognized prospectively.

Contract balances are classified as assets or liabilities on a contract-by-contract basis at the end of each reporting period. The following table summarizes our contract assets and liabilities balances:

	September 30, 2020			March 31, 2020			Change
Contract assets	$	209,424		$	267,079		$	(57,655	)
Contract liabilities		(301,190	)		(386,585	)		85,395
Net contract liability	$	(91,766	)	$	(119,506	)	$	27,740

The Company recognized revenue due to changes in estimates associated with performance obligations satisfied or partially satisfied in previous periods of $3,253. The change in contract assets is the result of the settlement of approximately $60,802 of contract assets associated with the Gulfstream G650 wing supply chain transfer which was partially offset by revenue recognized in excess of amounts billed during the six months ended September 30, 2020.  The change in contract liabilities is the result of revenue recognized in excess of the receipt of additional customer advances during the six months ended September 30, 2020.  Additionally, approximately $38,355 of contract assets and $17,939 of contract liabilities are classified as held for sale on the accompanying condensed consolidated balance sheet as of September 30, 2020.  For the six months ended September 30, 2020, the Company recognized $70,709 of revenue that was included in the contract liability balance at the beginning of the period. Noncurrent contract assets presented in other, net on the accompanying consolidated balance sheets as of September 30, 2020 and March 31, 2020, were $16,368 and $22,662, respectively. Noncurrent contract liabilities presented in other noncurrent liabilities on the accompanying consolidated balance sheets as of September 30, 2020 and March 31, 2020, were $126,031 and $91,265, respectively.

Performance Obligations

Customers generally contract with the Company for requirements in a segment relating to a specific program, and the Company’s performance obligations consist of a wide range of engineering design services and manufactured components, as well as spare parts and repairs for OEMs. A single contract may contain multiple performance obligations consisting of both recurring and nonrecurring elements.

As of September 30, 2020, the Company has the following unsatisfied, or partially unsatisfied, performance obligations that are expected to be recognized in the future as noted in the table below. The Company expects options to be exercised in addition to the amounts presented below.

	Total		Less than 1 year		1-3 years		4-5 years		More than 5 years
Unsatisfied performance obligations	$	2,530,752	$	1,293,579	$	1,159,122	$	77,448	$	603