Revenue

Revenue By Category

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



			Year Ended December 31,
(in thousands)			2018		2017		2016
Business Segment:
	Energy Services and Products
		Remotely Operated Vehicles	$	394,801	$	393,655	$	522,121
		Subsea Products	515,000		625,513		692,030
		Subsea Projects	329,163		291,993		472,979
		Asset Integrity	253,886		236,778		275,397
	Total Energy Services and Products		1,492,850		1,547,939		1,962,527
	Advanced Technologies		416,632		373,568		309,076
		Total	$	1,909,482	$	1,921,507	$	2,271,603



Geographic Operating Areas:
	Foreign:
		Africa	$	239,959	$	256,198	$	486,615
		United Kingdom	203,391		236,177		304,635
		Norway	185,552		178,712		166,180
		Asia and Australia	163,843		193,865		196,679
		Brazil	64,004		42,607		73,280
		Other	103,548		81,364		66,870
	Total Foreign		960,297		988,923		1,294,259
	United States		949,185		932,584		977,344
Total			$	1,909,482	$	1,921,507	$	2,271,603



		Dec 31, 2018
Timing of Transfer of Goods or Services:
	Revenue recognized over time	$	1,762,103
	Revenue recognized at a point in time	147,379
Total		$	1,909,482

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)	Dec 31, 2018		Jan 1, 2018
Contract assets	$	256,201	$	171,956
Contract liabilities	85,172		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 year ended December 31, 2018, Contract assets increased by $84 million from its opening balance due to the revenue recognition of $1.9 billion exceeding amounts billed of $1.8 billion. Contract liabilities increased $48 million from its opening balance, due to deferrals of milestone payments and billings totaling $77 million less revenue recognition of $29 million. There were no cancellations, impairments or other significant impacts in the period that relate to other categories of explanation.

Performance Obligations

As of December 31, 2018, the aggregate amount of the transaction price allocated to remaining performance obligations was $292 million. We expect to recognize revenue of $229 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 December 31, 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 year ended December 31, 2018, which was associated with performance obligations completed or partially completed in prior periods was not significant.

As of December 31, 2018, there was no outstanding liability balance for refunds or returns due to the nature of our contracts and the services and products 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 service or product, 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 services or products 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 December 31, 2018 was $13 million, with $6.5 million of amortization for the year ended December 31, 2018. No impairment costs were recognized.