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Revenue Recognition | 9 Months Ended
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Sep. 30, 2019
Revenue From Contract With Customer [Abstract] |
Revenue Recognition |
2. | Revenue Recognition
Total revenues include sales of products and services to customers, net of any discounts or allowances, and freight revenues. Product revenues are recognized when control of the promised good is transferred to the customer, typically when finished products are shipped. Intersegment and interproduct revenues are eliminated in consolidation. Service revenues are derived from the paving business and recognized using the percentage-of-completion method under the revenue-cost approach. Freight revenues reflect delivery arranged by the Company using a third party on behalf of the customer and are recognized consistently with the timing of the product revenues. Performance Obligations. Performance obligations are contractual promises to transfer or provide a distinct good or service for a stated price. The Company’s product sales agreements are single-performance obligations that are satisfied at a point in time. Performance obligations within paving service agreements are satisfied over time, primarily ranging from one day to 20 months. For product revenues and freight revenues, customer payment terms are generally 30 days from invoice date. Customer payments for the paving operations are based on a contractual billing schedule and are due 30 days from invoice date. Future revenues from unsatisfied performance obligations at September 30, 2019 and 2018 were $133.9 million and $111.7 million, respectively, where the remaining periods to complete these obligations ranged from one month to 15 months and one month to 27 months, respectively. Revenue by Category. The following table presents the Company’s total revenues by category for each reportable segment:
|  | Three Months Ended |
|  | September 30, 2019 |
|  | Products and Services |  | Freight |  | Total |
|  | (Dollars in Thousands) |
Mid-America Group |  | $ | 411,045 |  | $ | 37,713 |  | $ | 448,758 |
Southeast Group |  |  | 129,619 |  |  | 4,519 |  |  | 134,138 |
West Group |  |  | 723,162 |  |  | 49,311 |  |  | 772,473 |
Total Building Materials Business |  |  | 1,263,826 |  |  | 91,543 |  |  | 1,355,369 |
Magnesia Specialties |  |  | 59,334 |  |  | 5,543 |  |  | 64,877 |
Total |  | $ | 1,323,160 |  | $ | 97,086 |  | $ | 1,420,246 |
|  | Three Months Ended |
|  | September 30, 2018 |
|  | Products and Services |  | Freight |  | Total |
|  | (Dollars in Thousands) |
Mid-America Group |  | $ | 348,429 |  | $ | 28,576 |  | $ | 377,005 |
Southeast Group |  |  | 121,661 |  |  | 3,886 |  |  | 125,547 |
West Group |  |  | 603,763 |  |  | 39,802 |  |  | 643,565 |
Total Building Materials Business |  |  | 1,073,853 |  |  | 72,264 |  |  | 1,146,117 |
Magnesia Specialties |  |  | 68,365 |  |  | 5,158 |  |  | 73,523 |
Total |  | $ | 1,142,218 |  | $ | 77,422 |  | $ | 1,219,640 |
Service revenues, which include paving operations located in Colorado, were $110.9 million and $82.2 million for the three months ended September 30, 2019 and 2018, respectively.
|  | Nine Months Ended |
|  | September 30, 2019 |
|  | Products and Services |  | Freight |  | Total |
|  | (Dollars in Thousands) |
Mid-America Group |  | $ | 1,024,069 |  | $ | 88,828 |  | $ | 1,112,897 |
Southeast Group |  |  | 376,967 |  |  | 13,432 |  |  | 390,399 |
West Group |  |  | 1,797,677 |  |  | 122,505 |  |  | 1,920,182 |
Total Building Materials Business |  |  | 3,198,713 |  |  | 224,765 |  |  | 3,423,478 |
Magnesia Specialties |  |  | 198,886 |  |  | 16,304 |  |  | 215,190 |
Total |  | $ | 3,397,599 |  | $ | 241,069 |  | $ | 3,638,668 |
|  | Nine Months Ended |
|  | September 30, 2018 |
|  | Products and Services |  | Freight |  | Total |
|  | (Dollars in Thousands) |
Mid-America Group |  | $ | 841,897 |  | $ | 64,480 |  | $ | 906,377 |
Southeast Group |  |  | 308,306 |  |  | 10,443 |  |  | 318,749 |
West Group |  |  | 1,672,707 |  |  | 110,467 |  |  | 1,783,174 |
Total Building Materials Business |  |  | 2,822,910 |  |  | 185,390 |  |  | 3,008,300 |
Magnesia Specialties |  |  | 201,390 |  |  | 14,357 |  |  | 215,747 |
Total |  | $ | 3,024,300 |  | $ | 199,747 |  | $ | 3,224,047 |
Service revenues for the nine months ended September 30, 2019 and 2018 were $191.8 million and $162.9 million, respectively. Contract Balances. Costs in excess of billings relate to the conditional right to consideration for completed contractual performance and are contract assets on the consolidated balance sheets. Costs in excess of billings are reclassified to accounts receivable when the right to consideration becomes unconditional. Billings in excess of costs relate to customers invoiced in advance of contractual performance and are contract liabilities on the consolidated balance sheets. The following table presents information about the Company’s contract balances:
(Dollars in Thousands) |  | September 30, 2019 |  | December 31, 2018 |
Costs in excess of billings |  | $ | 7,725 |  | $ | 1,975 |
Billings in excess of costs |  | $ | 8,021 |  | $ | 6,743 |
Revenues recognized from the beginning balance of contract liabilities for the three months ended September 30, 2019 and 2018 were $8.0 million and $6.2 million, respectively, and for the nine months ended September 30, 2019 and 2018 were $6.5 million and $6.8 million, respectively. Retainage, which primarily relates to the paving services, represents amounts that have been billed to customers but payment withheld until final acceptance by the customer of the performance obligation. Included in other current assets on the Company’s consolidated balance sheets, retainage was $11.0 million and $7.5 million at September 30, 2019 and December 31, 2018. Warranties. The Company’s construction contracts generally contain warranty provisions typically for a period of nine months to one year after project completion and cover materials, design or workmanship defects. Historically, the Company has not experienced material costs for warranties. The ready mixed concrete product line carries longer warranty periods, for which the Company has accrued an estimate of warranty cost based on experience with the type of work and any known risks relative to the project. In total, warranty costs were not material to the Company’s consolidated results of operations for the three and nine months ended September 30, 2019 and September 30, 2018. Policy Elections. When the Company arranges third-party freight to deliver products to customers, the Company has elected the delivery to be a fulfillment activity rather than a separate performance obligation. Further, the Company acts as a principal in the delivery arrangements and, as required by the accounting standard, the related revenues and costs are presented gross and are included in the consolidated statements of earnings.

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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