Revenue Recognition

3 Months Ended

Mar. 31, 2018

Revenue from Contract with Customer [Abstract]

Revenue is recognized when obligations under the terms of a contract with a customer are satisfied; generally this occurs with the transfer of control of the Company’s products or services. Revenue is measured as the amount of total consideration expected to be received in exchange for transferring goods or providing services. Total expected consideration, in certain cases, is estimated at each reporting period, including interim periods, and is subject to change with variability dependent on future events, such as customer behavior related to future purchase volumes, returns, early payment discounts and other customer allowances. Estimates for rights of return, discounts and rebates to customers and other adjustments for variable consideration are provided for at the time of sale as a deduction to revenue, based on an analysis of historical experience and actual sales data. Changes in these estimates are reflected as an adjustment to revenue in the period identified. Sales, value added and other taxes collected concurrently with revenue-producing activities are excluded from revenue.

The Company receives payment at the inception of the contract for separately priced extended service warranties, and revenue is deferred and recognized on a straight-line basis over the life of the contracts. The term of these warranties range from five to 40 years. The weighted average life of the contracts as of March 31, 2018, is approximately 19 years.

Performance Obligations

A performance obligation is a promise in a contract to transfer a distinct good or service to the customer in exchange for payment and is the unit of account. A contract's transaction price is allocated to each distinct performance obligation and recognized as revenue when or as the performance obligation is satisfied. The majority of the Company’s contracts have a single performance obligation to transfer individual goods or services. For contracts with multiple performance obligations, the contracts transaction price is allocated to each performance obligation using the Company’s best estimate of the standalone selling price of each distinct good or service in the contract. The primary method used to estimate standalone selling price is observable prices.

The Company’s performance obligations are satisfied, and control is transferred, either at a point in time or over time as work progresses. For the majority of the Company’s products, control is transferred and revenue is recognized when the product is shipped from the manufacturing facility to the customer.

Revenue is recognized over time primarily for separately priced extended service warranties in the CCM segment and certain highly customized product contracts in the CIT segment. Revenues for separately priced extended service warranties are recognized over the life of the contract. Revenues for highly customized product contracts are recognized based on the proportion of costs incurred to date, relative to total estimated costs to complete the contract and are generally incurred over twelve months or less. Highly customized product contract costs generally include labor, material and overhead.

A summary of the timing of revenue recognition and reconciliation of disaggregated revenue by reportable segment follows:



	Three Months Ended March 31, 2018
(in millions)	CCM		CIT		CFT		CBF		Total
Products transferred at a point in time	$	593.4	$	195.4	$	63.5	$	98.3	$	950.6
Products and services transferred over time	5.2		28.9		—		—		34.1
Total revenues	$	598.6	$	224.3	$	63.5	$	98.3	$	984.7



	Three Months Ended March 31, 2017
(in millions)	CCM		CIT		CFT		CBF		Total
Products transferred at a point in time	$	441.2	$	192.6	$	60.5	$	73.2	$	767.5
Products and services transferred over time	4.9		1.6		—		—		6.5
Total revenues	$	446.1	$	194.2	$	60.5	$	73.2	$	774.0

Remaining performance obligations for extended service warranties represent the transaction price for the remaining stand-ready obligation to perform warranty services. A summary of estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied or partially unsatisfied as of March 31, 2018, follows:



(in millions)	Remainder of 2018		2019		2020		2021		2022		2023		Thereafter
Extended service warranties	$	15.1	$	19.1	$	18.1	$	17.1	$	15.9	$	14.7	$	110.0

The Company has applied the practical expedient to not disclose information about remaining performance obligations that have original expected durations of one year or less. Additionally, the Company has applied the transition practical expedient to not disclose the amount of transaction price allocated to the remaining performance obligations and an expectation of when the Company expects to recognize associated revenues, for the three months ended March 31, 2018.

Contract Balances

Contract liabilities relate to payments received in advance of performance under a contract, primarily related to extended service warranties in the CCM segment and systems contracts in the CFT segment. Contract liabilities are recognized as revenue as (or when) the Company performs under the contract. A summary of the change in contract liabilities for the three months ended March 31, follows:



(in millions)	2018			2017
Balance as of January 1	$	215.8		$	195.2
Revenue recognized	(14.9		)	(13.0		)
Revenue deferred	18.2			20.9
Acquired liabilities	0.1			—
Balance as of March 31	$	219.2		$	203.1

Contract assets relate to the Company's right to payment for performance completed to date under a contract, primarily related to highly customized product contracts with in the CIT segment. Accounts receivable are recorded when the right to payment becomes unconditional. A summary of the change in contract assets for the three months ended March 31, follows:



(in millions)	2018
Balance as of January 1	$	—
Adoption of ASC 606	22.8
Revenue recognized and unbilled	33.8
Revenue billed	(22.8		)
Balance as of March 31	$	33.8

Contract assets were immaterial as of March 31, 2017.

Costs to Obtain a Contract

The Company has applied the practical expedient to recognize costs of obtaining or fulfilling a contract as expense as incurred. These costs generally included sales commissions and are included in selling, general and administrative costs in the Condensed Consolidated Statement of Income.

Revenues by End-Market

A summary of revenues disaggregated by major end-market industries and reconciliation of disaggregated revenue by segment follows:



	Three Months Ended March 31, 2018
(in millions)	CCM		CIT		CFT		CBF		Total
General construction	$	546.3	$	—	$	—	$	—	$	546.3
Aerospace	—		154.8		—		6.3		161.1
Heavy equipment	26.2		—		—		79.2		105.4
Transportation	—		—		33.2		9.8		43.0
Medical	—		34.7		—		—		34.7
General industrial and other	26.1		34.8		30.3		3.0		94.2
Total revenues	$	598.6	$	224.3	$	63.5	$	98.3	$	984.7



	Three Months Ended March 31, 2017
(in millions)	CCM		CIT		CFT		CBF		Total
General construction	$	446.1	$	—	$	—	$	—	$	446.1
Aerospace	—		131.5		—		4.9		136.4
Heavy equipment	—		—		—		55.0		55.0
Transportation	—		—		31.9		9.3		41.2
Medical	—		28.3		—		—		28.3
General industrial and other	—		34.4		28.6		4.0		67.0
Total revenues	$	446.1	$	194.2	$	60.5	$	73.2	$	774.0

Revenues by Geographic Area

A summary of revenues based on the country to which the product was delivered and reconciliation of disaggregated revenue by segment follows:



	Three Months Ended March 31, 2018
(in millions)	CCM		CIT		CFT		CBF		Total
United States	$	529.0	$	155.6	$	25.6	$	41.5	$	751.7
International:
Europe	39.4		22.3		13.3		30.3		105.3
Asia	5.2		22.9		19.8		18.9		66.8
Canada	18.4		1.1		1.6		0.7		21.8
Mexico and Latin America	0.9		12.0		2.1		3.6		18.6
Middle East and Africa	3.1		7.6		0.6		0.2		11.5
Other	2.6		2.8		0.5		3.1		9.0
Total international	$	69.6	$	68.7	$	37.9	$	56.8	$	233.0
Total revenues	$	598.6	$	224.3	$	63.5	$	98.3	$	984.7



	Three Months Ended March 31, 2017
(in millions)	CCM		CIT		CFT		CBF		Total
United States	$	394.6	$	125.7	$	25.1	$	29.5	$	574.9
International:
Europe	36.3		26.5		13.0		22.5		98.3
Asia	1.9		20.0		17.8		13.3		53.0
Canada	10.0		1.4		1.6		1.2		14.2
Mexico and Latin America	0.4		11.6		1.7		2.9		16.6
Middle East and Africa	2.3		7.4		0.4		1.6		11.7
Other	0.6		1.6		0.9		2.2		5.3
Total international	$	51.5	$	68.5	$	35.4	$	43.7	$	199.1
Total revenues	$	446.1	$	194.2	$	60.5	$	73.2	$	774.0