Revenue

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

REVENUE

NOTE L—DEFERRED REVENUE

We enter into certain customer supply agreements which give the customers the right to purchase certain products for a discounted price at certain volumes over an average initial contract term of one to fifteen years. The advance payments represent future purchases and are recorded as deferred revenue, recognized as revenue over the contract term of each supply agreement. During the year ended December 31, 2019 we received advances of $12.2 million. At December 31, 2019 and 2018, the total deferred revenue balance was $50.6 million and $113.3 million, respectively, of which $15.1 million and $31.6 million was classified as current on our Balance Sheets.

The decrease in the current year balance is partially attributable to revenue recognized as variable consideration from shortfall penalties assessed to multiple customers according to contract terms. In some cases, amounts recorded are estimates

which are in negotiation and may increase or decrease. We believe this is the best estimate of revenue to recognize as of December 31, 2019.

NOTE U— REVENUE

We consider sales disaggregated at the product and service level by business segment to depict how the nature, amount, timing and uncertainty of revenues and cash flow are impacted by changes in economic factors. The following table reflects our sales disaggregated by major source for the year ended December 31, 2019 (in thousands):

	Year Ended December 31, 2019						Year Ended December 31, 2018
Category	Oil & Gas Proppants		Industrial & Specialty Products		Total Sales		Oil & Gas Proppants		Industrial & Specialty Products		Total Sales
Product	$	704,516	$	463,956	$	1,168,472	$	888,509	$	394,290	$	1,282,799
Service	306,005		—		306,005		294,482		17		294,499
Total Sales	$	1,010,521	$	463,956	$	1,474,477	$	1,182,991	$	394,307	$	1,577,298

The following tables reflect the changes in our contract assets, which we classify as unbilled receivables and our contract liabilities, which we classify as deferred revenues, for the year ended December 31, 2019 (in thousands):

	Unbilled Receivables
	December 31, 2019			December 31, 2018
Beginning Balance	$	90		$	5,245
Reclassifications to billed receivables	(3,983		)	(11,157		)
Revenues recognized in excess of period billings	4,037			6,002
Ending Balance	$	144		$	90

	Deferred Revenue
	December 31, 2019			December 31, 2018
Beginning Balance	$	113,319		$	118,414
Revenues recognized from balances held at the beginning of the period	(65,225		)	(33,381		)
Revenues deferred from period collections on unfulfilled performance obligations	12,225			31,625
Revenues recognized from period collections	(9,685		)	(3,339		)
Ending Balance	$	50,634		$	113,319

We have elected to use the practical expedients allowed under ASC 606-10-50-14, pursuant to which we have excluded disclosures of transaction prices allocated to remaining performance obligations and when we expect to recognize such revenue. The majority of our remaining performance obligations are primarily comprised of unfulfilled product, transportation service, and labor service orders, all of which hold a remaining duration of less than one year. The long term portion of deferred revenue primarily represents a combination of refundable and nonrefundable customer prepayments for which related current performance obligations do not yet exist, but are expected to arise, before the expiration of the contract. Our residual unfulfilled performance obligations are comprised primarily of long-term equipment rental arrangements in which we recognize revenues equal to what we have a right to invoice. Generally, no variable consideration exists related to our remaining performance obligations and no consideration is excluded from the associated transaction prices. However, the decrease in the current year deferred revenue balance is partially attributable to revenue recognized as variable consideration from shortfall penalties assessed to multiple customers according to contract terms as of December 31, 2019. During 2019, the Company recognized revenue as variable consideration from shortfall penalties according to contract terms in the amount of $70.6 million. In some cases, amounts recorded are estimates which are in negotiation and may increase or decrease.

Foreign Operations

Foreign operations constituted approximately $92.8 million and $66.9 million of our consolidated sales; $27.7 million and $7.3 million of consolidated assets; $7.0 million and $5.9 million of pre-tax income and $5.5 million and $4.7 million of net income as of and for the years ended December 31, 2019 and 2018, respectively. We had no significant foreign operations during the year ended December 31, 2017.