Revenue

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Revenue

REVENUE

Revenue by Category

We recognized revenue, disaggregated by business segment, geographical region, and timing of transfer of goods or services, as follows:

			Three Months Ended						Nine Months Ended
(in thousands)			Sep 30, 2019		Sep 30, 2018		Jun 30, 2019		Sep 30, 2019		Sep 30, 2018
Business Segment:
	Energy Services and Products
		Remotely Operated Vehicles	$	113,101	$	105,045	$	120,363	$	333,810	$	298,065
		Subsea Products	150,836		137,099		138,910		418,590		385,491
		Subsea Projects	75,996		104,972		75,104		240,828		239,868
		Asset Integrity	59,274		62,346		61,156		181,119		191,056
	Total Energy Services and Products		399,207		409,462		395,533		1,174,347		1,114,480
	Advanced Technologies		98,440		109,838		100,248		312,967		299,907
		Total	$	497,647	$	519,300	$	495,781	$	1,487,314	$	1,414,387

			Three Months Ended						Nine Months Ended
(in thousands)			Sep 30, 2019		Sep 30, 2018		Jun 30, 2019		Sep 30, 2019		Sep 30, 2018
Geographic Operating Areas:
	Foreign:
		Africa	$	73,901	$	51,669	$	61,390	$	222,397	$	168,722
		United Kingdom	61,914		56,769		65,058		180,270		153,087
		Norway	59,875		51,952		60,252		162,593		142,820
		Asia and Australia	42,662		39,764		43,123		127,211		122,158
		Brazil	25,404		14,554		23,658		66,825		46,844
		Other	14,178		45,898		28,334		63,734		80,348
	Total Foreign		277,934		260,606		281,815		823,030		713,979
	United States		219,713		258,694		213,966		664,284		700,408
Total			$	497,647	$	519,300	$	495,781	$	1,487,314	$	1,414,387

Timing of Transfer of Goods or Services:
	Revenue recognized over time	$	460,029	$	485,393	$	455,937	$	1,377,211	$	1,297,095
	Revenue recognized at a point in time	37,618		33,907		39,844		110,103		117,292
Total		$	497,647	$	519,300	$	495,781	$	1,487,314	$	1,414,387

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, while other milestones are achieved after revenue is recognized resulting in a contract asset.

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 nine months ended September 30, 2019, contract assets decreased by $59 million from the balance at December 31, 2018, due to the timing of billings of approximately $1,517 million, which exceeded revenue earned of $1,458 million. Contract liabilities increased $10 million from the balance at December 31, 2018, due to deferrals of milestone payments that totaled $45 million in excess of revenue recognition of $35 million. There were no cancellations, impairments or other significant impacts in the period that relate to other categories of explanation.

Performance Obligations

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 performance obligations balance reported as of September 30, 2019. We also have shorter-term product contracts with an expected original duration of one year or less that have been excluded.

As of September 30, 2019, the aggregate amount of the transaction price allocated to remaining performance obligations was $431 million. 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. Of this amount, we expect to recognize revenue of $339 million over the next 12 months.

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 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 three- and nine-month periods ended September 30, 2019 that was associated with performance obligations completed or partially completed in prior periods was not significant.

As of September 30, 2019, there were no significant outstanding liability balances 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 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 were no balances or amortization of costs to obtain a contract in the current reporting periods.

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 was $14 million and $13 million as of September 30, 2019 and December 31, 2018, respectively. For the three- and nine-month periods ended September 30, 2019, $1.9 million and $6.2 million of amortization expense was recorded, respectively. For the three- and nine-month periods ended September 30,

2018, we recorded amortization expense of $2.6 million and $5.1 million, respectively. No impairment costs were recognized.