Revenue Recognition

We enter into contracts with customers typically having multiple commitments of goods and services including any combination of designing, developing, manufacturing, modifying, installing and commissioning of flow management equipment and providing services and parts related to the performance of such products. Control transfers over time when the customer is able to direct the use of and obtain substantially all of the benefits of our work as we perform.

Our primary method for recognizing revenue over time is the percentage of completion ("POC") method. Revenue from products and services transferred to customers over time accounted for approximately 17% and 23% of total revenue for the three month periods ended March 31, 2019 and 2018, respectively. If control does not transfer over time, then control transfers at a point in time. We recognize revenue at a point in time at the level of each performance obligation based on the evaluation of certain indicators of control transfer, such as title transfer, risk of loss transfer, customer acceptance and physical possession. Revenue from products and services transferred to customers at a point in time accounted for approximately 83% and 77% of total revenue for the three month periods ended March 31, 2019 and 2018, respectively. Refer to Note 2 to our consolidated financial statements included in our 2018 Annual Report for a more comprehensive discussion of our policies and accounting practices of revenue recognition.

Disaggregated Revenue

We conduct our operations through two business segments based on the type of product and how we manage the business:


•	FPD for custom, highly-engineered pumps, pre-configured industrial pumps, pump systems, mechanical seals, auxiliary systems and replacement parts and related services; and


•	Flow Control Division ("FCD") for engineered and industrial valves, control valves, actuators and controls and related services.

Our revenue sources are derived from our original equipment manufacturing and our aftermarket sales and services. Our original equipment revenues are generally related to originally designed, manufactured, distributed and installed equipment that can range from pre-configured, short-cycle products to more customized, highly-engineered equipment ("Original Equipment"). Our aftermarket sales and services are derived from sales of replacement equipment, as well as maintenance, advanced diagnostic, repair and retrofitting services ("Aftermarket"). Each of our two business segments generate Original Equipment and Aftermarket revenues.

The following table presents our customer revenues disaggregated by revenue source:



	Three Months Ended March 31, 2019
(Amounts in thousands)	FPD		FCD		Total
Original Equipment	$	205,803	$	214,047	$	419,850
Aftermarket	402,956		67,245		470,201
	$	608,759	$	281,292	$	890,051

	Three Months Ended March 31, 2018
(Amounts in thousands)	FPD		FCD		Total
Original Equipment	$	254,083	$	210,534	$	464,617
Aftermarket	389,957		65,380		455,337
	$	644,040	$	275,914	$	919,954

Our customer sales are diversified geographically. The following table presents our revenues disaggregated by geography, based on the shipping addresses of our customers:



	Three Months Ended March 31, 2019
(Amounts in thousands)	FPD		FCD		Total
North America(1)	$	247,769	$	135,177	$	382,946
Latin America(1)	37,601		5,796		43,397
Middle East and Africa	74,366		22,891		97,257
Asia Pacific	113,948		57,192		171,140
Europe	135,075		60,236		195,311
	$	608,759	$	281,292	$	890,051

	Three Months Ended March 31, 2018
(Amounts in thousands)	FPD		FCD		Total
North America(1)	$	258,875	$	124,408	$	383,283
Latin America(1)	41,467		5,669		47,136
Middle East and Africa	86,044		33,049		119,093
Asia Pacific	128,120		56,222		184,342
Europe	129,534		56,566		186,100
	$	644,040	$	275,914	$	919,954

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(1) North America represents United States and Canada; Latin America includes Mexico.

On March 31, 2019, the aggregate transaction price allocated to unsatisfied (or partially unsatisfied) performance obligations was approximately $516 million. We estimate recognition of approximately $366 million of this amount as revenue in the remainder of 2019 and an additional $150 million in 2020 and thereafter.

Revenue recognized for performance obligations satisfied (or partially satisfied) in prior periods for the three months ended March 31, 2019 and 2018 was not material.

Contract Balances

We receive payment from customers based on a contractual billing schedule and specific performance requirements as established in our contracts. We record billings as accounts receivable when an unconditional right to consideration exists. A contract asset represents revenue recognized in advance of our right to receive payment under the terms of a contract. A contract liability represents our right to receive payment in advance of revenue recognized for a contract.

The following table presents opening and closing balances of contract assets and contract liabilities, current and long-term, for the three months ended March 31, 2019:



( Amounts in thousands)	Contract Assets, net (Current)			Long-term Contract Assets, net(1)			Contract Liabilities (Current)			Long-term Contract Liabilities(2)
Beginning balance, January 1, 2019	$	228,579		10,967			$	202,458		$	1,370
Revenue recognized that was included in contract liabilities at the beginning of the period	—			—			(73,417		)	—
Increase due to revenue recognized in the period in excess of billings	155,444			—			—			—
Increase due to billings arising during the period in excess of revenue recognized	—			—			78,078			—
Amounts transferred from contract assets to receivables	(154,817		)	(2,202		)	—			—
Currency effects and other, net	(4,356		)	(19		)	623			(12		)
Ending balance, March 31, 2019	$	224,850		$	8,746		$	207,742		$	1,358

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(1) Included in other assets, net.

(2) Included in retirement obligations and other liabilities.