Revenue

3 Months Ended

Mar. 31, 2020

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
(in thousands)			Mar 31, 2020		Mar 31, 2019		Dec 31, 2019
Business Segment:
	Energy Services and Products
		Remotely Operated Vehicles	$	111,780	$	100,346	$	116,020
		Subsea Products	194,838		128,844		183,659
		Subsea Projects	61,455		89,728		86,728
		Asset Integrity	59,132		60,689		61,835
	Total Energy Services and Products		427,205		379,607		448,242
	Advanced Technologies		109,463		114,279		112,568
		Total	$	536,668	$	493,886	$	560,810

			Three Months Ended
(in thousands)			Mar 31, 2020		Mar 31, 2019		Dec 31, 2019
Geographic Operating Areas:
	Foreign:
		Africa	$	63,417	$	87,106	$	70,421
		United Kingdom	60,787		53,298		76,078
		Norway	52,184		42,466		55,169
		Asia and Australia	45,680		41,426		47,558
		Brazil	26,489		17,763		26,686
		Other	24,659		21,222		27,857
	Total Foreign		273,216		263,281		303,769
	United States		263,452		230,605		257,041
Total			$	536,668	$	493,886	$	560,810

Timing of Transfer of Goods or Services:
	Revenue recognized over time	$	498,307	$	461,245	$	523,518
	Revenue recognized at a point in time	38,361		32,641		37,292
Total		$	536,668	$	493,886	$	560,810

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.

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

(in thousands)	Mar 31, 2020		Dec 31, 2019
Contract assets	$	237,107	$	221,288
Contract liabilities	61,929		117,342

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 three months ended March 31, 2020, contract assets increased by $16 million from the balance at December 31, 2019, due to revenue earned of $456 million, which exceeded the timing of billings of approximately $440 million. Contract liabilities decreased $55 million from the balance at December 31, 2019, due to revenue recognition of $66 million in excess of deferrals of milestone payments that totaled $11 million. There were no cancellations, impairments or other significant impacts in the period that relate to other categories of explanation.

Performance Obligations

As of March 31, 2020, the aggregate amount of the transaction price allocated to remaining performance obligations was $325 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 $232 million over the next 12 months and substantially all of the remaining balance of $93 million will be recognized within the next 24 months.

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 March 31, 2020. 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 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 months ended March 31, 2020 that was associated with performance obligations completed or partially completed in prior periods was not significant.

As of March 31, 2020, 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 $13 million and $15 million as of March 31, 2020 and December 31, 2019, respectively. For the three-month periods ended March 31, 2020 and 2019, we recorded amortization expense of $1.9 million and $2.6 million, respectively. No impairment costs were recognized.