12. REVENUE FROM CONTRACTS WITH CUSTOMERS

In the majority of instances the Company deems a contract with a customer to exist when a purchase order is received from a customer for a specified quantity of product or products and the Company acknowledges receipt of such purchase order. In some instances the Company has entered into manufacturing supply agreements with customers but these agreements typically do not bind a customer to any purchase volume requirements and thus an obligation is not created until the customer submits a purchase order to the Company. The Company’s contracts typically have a single performance obligation that is satisfied at the time product is shipped. For a small portion of the business, performance obligations are deemed satisfied when product is delivered to a customer location. Revenue is recognized when performance obligations under terms of a contract with a customer have been satisfied, which is predominantly at a point in time. With the 2018 adoption of ASU 2014-09, revenue is currently recognized when a customer obtains control of a product as compared to the “risk and rewards” criteria used in prior years. However, the adoption of ASU 2014-09 did not have a material impact on the Company’s financial position or results of operations during the first six months of 2018.

Payment terms on sales of product typically range from 30 to 60 days and ordinarily do not exceed 75 days. As a result, the Company has concluded it does not provide any significant benefits of financing to its customers.

The Company has elected to account for shipping and handling as activities to fulfill a promise to transfer the good. As such, shipping and handling fees billed to customers in a sales transaction are recorded in Net Sales and shipping and handling costs incurred are recorded in Cost of Sales. The Company has elected to exclude from Net Sales any value added, sales and other taxes that it collects concurrently with revenue producing activities. These accounting policy elections are consistent with the manner in which the Company has historically recorded shipping and handling fees and taxes.

In some instances, a customer may qualify for a rebate based on the volume of purchases made over a specified period of time, typically a quarterly or annual period. The Company estimates the expected volume of total purchases using actual volumes, customer projections and historical order patterns and accrues for these rebates based on the best available information at the time. These estimated rebates are treated as a reduction to Net Sales with the offset being recognized within Current Liabilities. This methodology is consistent with the manner in which the Company has historically estimated and recorded volume based rebates. In other instances, discounts for early payments are offered to certain customers. These discounts are principally accrued for based on a customer’s historical use of discounts. These estimated early payment discounts are accounted for similarly to volume rebates. These forms of variable consideration are considered part of the transaction price.

The Company warrants its products from defects. The Company has concluded that these represent assurance-type warranties as opposed to service-type warranties. Product defects are rare in occurrence. As a result, the Company does not maintain any warranty accruals until such time as it is probable a product defect exists.

As of June 30, 2018, the Company did not have any contract assets or contract liabilities. A contract liability would typically arise when an advance or deposit is received from a customer before the Company recognizes revenue. In practice, this is extremely rare as it would require a customer to make a payment prior to a performance obligation being satisfied. If such a situation did arise the Company would maintain a deferred revenue liability until the time a performance obligation has been satisfied. The Company did not recognize any revenue in the current period from any pre-existing contract liability balance.

The tables below provides a geographic disaggregation of net sales for the three and six months ended June 30, 2018 and 2017. The Company’s business segmentation by geographic region most effectively captures the nature and economic characteristics of the Company’s revenue streams impacted by economic factors. This regional data is the predominant information used by senior management to assess the financial performance of operating segments and make resource allocation decisions.

	For the Three Months Ended June 30, 2018
(In thousands)
	Surfactants		Polymers		Specialty Products		Total
Geographic Market
North America	$	218,029	$	86,966	$	18,674	$	323,669
Europe		66,065		45,028		3,441		114,534
Latin America		56,579		633		—		57,212
Asia		16,211		8,240		—		24,451
Total	$	356,884	$	140,867	$	22,115	$	519,866

	For the Three Months Ended June 30, 2017
(In thousands)
	Surfactants		Polymers		Specialty Products		Total
Geographic Market
North America	$	199,016	$	86,925	$	16,203	$	302,144
Europe		65,289		46,854		8,377		120,520
Latin America		48,559		960		—		49,519
Asia		16,470		6,448		—		22,918
Total	$	329,334	$	141,187	$	24,580	$	495,101

	For the Six Months Ended June 30, 2018
(In thousands)
	Surfactants		Polymers		Specialty Products		Total
Geographic Market
North America	$	438,434	$	160,440	$	33,488	$	632,362
Europe		144,436		86,812		7,089		238,337
Latin America		98,267		1,460		—		99,727
Asia		34,687		14,088		—		48,775
Total	$	715,824	$	262,800	$	40,577	$	1,019,201

	For the Six Months Ended June 30, 2017
(In thousands)
	Surfactants		Polymers		Specialty Products		Total
Geographic Market
North America	$	397,259	$	165,289	$	31,138	$	593,686
Europe		128,712		89,257		12,498		230,467
Latin America		92,064		2,258		—		94,322
Asia		33,902		10,993		—		44,895
Total	$	651,937	$	267,797	$	43,636	$	963,370