2. Revenue

Revenue By Category

The following table presents Revenue disaggregated by business segment, geographical region, and timing of transfer of goods or services.



			Three Months Ended						Six Months Ended
(in thousands)			June 30, 2018		June 30, 2017		March 31, 2018		June 30, 2018		June 30, 2017
Business Segment:
	Energy Services and Products
		Remotely Operated Vehicles	$	107,426	$	103,432	$	85,594	$	193,020	$	197,454
		Subsea Products	121,704		174,893		126,688		248,392		325,532
		Subsea Projects	78,036		75,545		56,860		134,896		138,501
		Asset Integrity	67,422		58,192		61,288		128,710		110,850
	Total Energy Services and Products		374,588		412,062		330,430		705,018		772,337
	Advanced Technologies		104,086		102,974		85,983		190,069		188,875
		Total	$	478,674	$	515,036	$	416,413	$	895,087	$	961,212



Geographic Operating Areas:
	Foreign:
		Africa	$	61,966	$	74,759	$	55,087	$	117,053	$	155,271
		United Kingdom	50,999		74,714		45,319		96,318		141,460
		Norway	51,827		44,753		39,042		90,869		74,553
		Asia and Australia	43,448		51,281		38,946		82,394		97,148
		Brazil	13,461		7,253		18,828		32,289		17,945
		Other	14,811		16,744		19,639		34,450		31,348
	Total Foreign		236,512		269,504		216,861		453,373		517,725
	United States		242,162		245,532		199,552		441,714		443,487
Total			$	478,674	$	515,036	$	416,413	$	895,087	$	961,212



		June 30, 2018
Timing of Transfer of Goods or Services:
	Revenue recognized over time	$	811,702
	Revenue recognized at a point in time	83,385
Total		$	895,087

Contract Balances

Our contracts with milestone payments have, in the aggregate, a significant impact on the contract asset and the contract liability balances. Milestones are contractually agreed with customers and relate to significant events across the contract lives. Some milestones are achieved before revenue is recognized, resulting in a contract liability, other milestones are achieved after revenue is recognized resulting in a contract asset.

The following table provides information about contract assets, and contract liabilities from contracts with customers.



(in thousands)	Jun 30, 2018		Jan 1, 2018
Contract assets	$	168,464	$	171,956
Contract liabilities	30,137		37,590

Our payment terms consist of those services billed regularly as provided and those products delivered at a point in time, which are invoiced after the performance obligation is satisfied. Our product and service contracts with milestone payments due at agreed progress points during the contract are invoiced when those milestones are reached, which may differ from the timing of revenue recognition.

During the six months ended June 30, 2018, Contract assets decreased by $3.5 million from its opening balance due to billings of $877 million, which exceeded accrued revenue of $874 million. Contract liabilities decreased $7.5 million from its opening balance, due to revenue recognition of $21.9 million (from the opening balance) less deferrals of milestone payments that totaled $14.4 million. There were no cancellations, impairments or other significant impacts in the period that relate to other categories of explanation.

Performance Obligations

As of June 30, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was $295 million. We expect to recognize revenue for the remaining performance obligations of $247 million over the next twelve months.

The aggregate amount of transaction price allocated to remaining performance obligations that were unsatisfied (or partially unsatisfied) as of June 30, 2018 are noted above. In arriving at this value, we have used two expedients available to us and are not disclosing amounts in relation to performance obligations: (1) that are part of contracts with an original expected duration of one year or less; or (2) on contracts where we recognize revenue in line with the billing.

Due to the nature of our service contracts in our Remotely Operated Vehicle, Subsea Projects, Asset Integrity and Advanced Technologies segments, the majority of our contracts either have initial contract terms of one year or less or have customer option cancellation clauses that lead us to consider the original expected duration of one year or less.

In our Subsea Products and Advanced Technologies segments, we have long-term contracts that extend beyond one year, and these make up the majority of the balance reported. We also have shorter-term product contracts with an expected original duration of one year or less that have been excluded.

Where appropriate, we have made estimates within the transaction price of elements of variable consideration within the contracts and constrained those amounts to a level where we consider that it is probable that a significant reversal in the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. The amount of revenue recognized in the six months ended June 30, 2018, which was associated with performance obligations completed or partially completed in prior periods was not significant.

As of June 30, 2018, there was no outstanding liability balance for refunds or returns due to the nature of our contracts and the goods and services we provide. Our warranties are limited to assurance warranties that are of a standard length and are not considered to be a material right. The majority of our contracts consist of a single performance obligation. When there are multiple obligations, we look for observable evidence of stand-alone selling prices on which to base the allocation. This involves judgment as to the appropriateness of the observable evidence relating to the facts and circumstances of the contract. If we do not have observable evidence, we estimate stand-alone selling prices by taking a cost plus margin approach, using typical margins from the type of product or service, customer and regional geography involved.

Costs to Obtain or Fulfill a Contract

In line with the available expedient, we capitalize costs to obtain a contract when those amounts are significant and the contract is expected at inception to exceed one year in duration; otherwise, the costs are expensed in the period when incurred. Costs to obtain a contract primarily consist of bid and proposal costs, which are incremental to our fixed costs. There was no balance or amortization of Costs to obtain a contract in the current reporting period.

Costs to fulfill a contract primarily consist of certain mobilization costs incurred to provide products or services to our customers. These costs are deferred and amortized over the period of contract performance. The closing balance of Costs to fulfill a contract as of June 30, 2018 was $14.3 million, with $1.2 million and $2.5 million of amortization for the three- and six-month periods ended June 30, 2018, respectively. No impairment costs were recognized.