Revenue Recognition

12 Months Ended

Dec. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Revenue is recognized when performance obligations under the terms of a contract with our customer are satisfied. Generally, this occurs at a point in time when the transfer of risk and title of the product transfers to the customer. Our standard terms of delivery are included in our contracts of sale, order confirmation documents, and invoices. As such, all revenue is considered revenue recognized from contracts with customers and we do not have other sources of revenue. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring goods or providing services. Revenue is recognized net of sales tax, value-added taxes, and other taxes. Shipping and other transportation costs charged to customers are recorded in both revenue and cost of goods sold. We do not have any material significant payment terms as payment is received at or shortly after the point of sale. Certain customers may receive cash-based incentives (including rebates, price supports, and sales commission), which are accounted for as variable consideration. We estimate rebates and price supports based on the expected amount to be provided to customers and reduce revenues recognized once the performance obligation has been met. Sales commissions are recorded as an increase in cost of goods sold once the performance obligation with the associated sale has been met. We do not expect to have significant changes in our estimates for variable considerations.

We have deferred revenue of $147.4 million, of which $26.7 million is in other payables and accruals, related to contractual commitments with customers for which the performance obligation will be satisfied over time, which will range from one to nine years. During the year ended December 31, 2020, we deferred $180.6 million within deferred income and other payables and accruals related to the Isoprene Rubber Supply Agreement (“IRSA”) with DL Chemical associated with the sale of our Cariflex business. The revenue associated with these performance obligations is recognized as the obligation is satisfied, which occurs as a volume based metric over time with the transfer of risk and title of finished products to the customer. See Note 4 Disposition and Exit of Business Activities for further discussion of the IRSA.

Occasionally, we enter into bill-and-hold contracts, where we invoice the customer for products even though we retain possession of the products until a point in time in the future when the products will be shipped to the customer. In these contracts, the primary performance obligation is satisfied at a point in time when the product is segregated from our general inventory, it is ready for shipment to customer, and we do not have the ability to use the product or direct it to another customer. Additionally, we have a secondary performance obligation related to custodial costs, including storage and freight, which is satisfied over time once the product has been delivered to the customer. During the years ended December 31, 2021, 2020, and 2019, we recognized $1.5 million, $4.1 million, and $5.6 million, respectively, of revenue related to these arrangements.

We disaggregate our revenue by segment product lines, which is how we market our products and review results of operations. The following tables disaggregate our segment revenue by major product lines:

	Years Ended December 31,
	2021		2020		2019
Revenue	(In thousands)
Performance Products	$	627,618	$	459,906	$	531,437
Specialty Polymers	409,736		316,206		334,726
Cariflex	—		36,930		186,266
Isoprene Rubber	59,899		42,986		—
Other	1,532		1,530		539
Polymer Product Line Revenue	$	1,098,785	$	857,558	$	1,052,968

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(1)     Cariflex is included in the results of operations through March 6, 2020. See Note 4 Disposition and Exit of Business Activities for further information on the divestiture of our Cariflex business.

	Years Ended December 31,
	2021		2020		2019
Revenue	(In thousands)
Adhesives	$	306,662	$	257,855	$	262,941
Performance Chemicals	503,135		406,152		438,146
Tires	61,547		41,585		50,381
Chemical Product Line Revenue	$	871,344	$	705,592	$	751,468

	December 31, 2021		December 31, 2020
	(In thousands)
Contract receivables(1)	$	229,267	$	179,805
Contract liabilities(2)	$	147,383	$	175,511

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(1)     Contract receivables are recorded within receivables, net of allowances on our Consolidated Balance Sheets.

(2)    Our contract liability consists of $136.4 million of non-cash deferred income related to the IRSA and $9.3 million of non-cash deferred income related to a supply agreement with a significant lubricant additive customer. The impact from currency exchange rates is $1.7 million.