XML 24 R11.htm IDEA: XBRL DOCUMENT
v3.10.0.1

Revenue from Contracts with Customers | 12 Months Ended
--- | ---
Dec. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contracts with Customers | Revenue from Contracts with Customers Adoption Method and Impact On January 1, 2018, the Company adopted ASC 606, Revenue from Contracts with Customers. The Company applied ASC 606 to all contracts not completed at January 1, 2018 and adopted the accounting standard using the modified retrospective method, with the cumulative effect of initially applying ASC 606 recognized at the beginning of the 2018 fiscal year. Comparative information has not been adjusted and continues to be reported under the previous accounting guidance. The Company recognized a $15.5 million increase to retained earnings at the beginning of the 2018 fiscal year for the cumulative effect of adoption of this standard, representing the favorable impact to prior results had the over-time revenue recognition requirements under ASC 606 been applied to several customer agreements. Contract assets of $49.7 million were recorded, along with a $34.2 million reduction to work-in-process inventory as a result of the ASC 606 adoption using the modified retrospective method. A portion of the cumulative effect impact of over-time revenue recognition related to inventory that is valued utilizing the last-in, first-out (LIFO) costing methodology. As such, an $11.8 million adjustment to the LIFO inventory valuation balance was required, with an equal and offsetting adjustment to net realizable value (NRV) inventory reserves, resulting in no net cumulative effect retained earnings impact for LIFO using the modified retrospective adoption method. See Note 3 for further information on inventory. In addition, as a result of this over-time recognition of these customer agreements, fiscal year 2018 sales on the consolidated statement of operations were lower by $4.3 million and cost of sales were lower by $5.4 million as compared to what those amounts would have been under the previous revenue recognition guidance. On the consolidated balance sheet, inventories, net, were $5.4 million higher at December 31, 2018 as compared to what this amount would have been under the previous guidance. Also, $45.3 million of contract assets were recognized on the consolidated balance sheet at December 31, 2018 ($45.2 million in short-term contract assets and $0.1 million in other long-term assets) related to this over-time revenue recognition. Also, as of January 1, 2018, amounts related largely to cash in advance from customers and progress billings were reclassified on the consolidated balance sheet to contract assets and liabilities in accordance with the new accounting guidance. Such reclassification resulted in a $3.9 million increase in accounts receivable, $28.8 million increase in inventories, net, $44.8 million decrease in accrued liabilities, and $10.7 million decrease in other-long term liabilities on January 1, 2018, with an offsetting increase in contract assets and liabilities ($3.7 million in short-term contracts assets, $69.7 million in short-term contract liabilities and $22.2 million in other long-term liabilities). There was no impact to cash flow from operating activities on the consolidated statement of cash flows as a result of this accounting standard adoption. As of December 31, 2018, accounts receivable were higher by $3.9 million, inventories were higher by $9.5 million, accrued liabilities were lower by $52.0 million, and other long-term liabilities were lower by $7.3 million due to these reclassifications to contract assets and liabilities ($6.0 million in short-term contract assets, $71.4 million short-term contract liabilities and $7.3 million in long-term contract liabilities). Disaggregation of Revenue The Company operates in two business segments; High Performance Materials & Components (HPMC) and Flat Rolled Products (FRP). Revenue is disaggregated within these two business segments by diversified global markets, primary geographical markets, and diversified products. Comparative information of the Company’s overall revenues (in millions) by global and geographical markets for the fiscal years ended December 31, 2018, 2017 and 2016 were as follows:
(in millions) |  | 2018 |  | 2017 |  | 2016
|  | HPMC | FRP | Total |  | HPMC | FRP | Total |  | HPMC | FRP | Total
Diversified Global Markets: |  |  |  |  |  |  |  |  |  |  |  |
Aerospace & Defense |  | $ | 1,771.3 |  | $ | 194.2 |  | $ | 1,965.5 |  |  | $ | 1,568.9 |  | $ | 149.2 |  | $ | 1,718.1 |  |  | $ | 1,439.2 |  | $ | 151.2 |  | $ | 1,590.4 |
Oil & Gas |  | 74.9 |  | 471.3 |  | 546.2 |  |  | 63.9 |  | 354.3 |  | 418.2 |  |  | 46.5 |  | 234.3 |  | 280.8 |
Automotive |  | 9.5 |  | 313.9 |  | 323.4 |  |  | 8.8 |  | 264.9 |  | 273.7 |  |  | 7.6 |  | 225.2 |  | 232.8 |
Food Equipment & Appliances |  | 0.4 |  | 244.5 |  | 244.9 |  |  | 1.1 |  | 224.9 |  | 226.0 |  |  | 1.8 |  | 170.4 |  | 172.2 |
Electrical Energy |  | 131.4 |  | 103.1 |  | 234.5 |  |  | 113.1 |  | 79.1 |  | 192.2 |  |  | 129.1 |  | 103.5 |  | 232.6 |
Construction/Mining |  | 72.8 |  | 153.2 |  | 226.0 |  |  | 51.1 |  | 141.8 |  | 192.9 |  |  | 36.7 |  | 123.9 |  | 160.6 |
Medical |  | 168.5 |  | 14.6 |  | 183.1 |  |  | 170.4 |  | 12.6 |  | 183.0 |  |  | 185.3 |  | 10.5 |  | 195.8 |
Electronics/Computers/Communications |  | 7.9 |  | 149.0 |  | 156.9 |  |  | 4.4 |  | 147.2 |  | 151.6 |  |  | 3.4 |  | 106.3 |  | 109.7 |
Other |  | 97.5 |  | 68.6 |  | 166.1 |  |  | 85.7 |  | 83.7 |  | 169.4 |  |  | 80.8 |  | 78.9 |  | 159.7 |
Total |  | $ | 2,334.2 |  | $ | 1,712.4 |  | $ | 4,046.6 |  |  | $ | 2,067.4 |  | $ | 1,457.7 |  | $ | 3,525.1 |  |  | $ | 1,930.4 |  | $ | 1,204.2 |  | $ | 3,134.6 |
(in millions) |  | 2018 |  | 2017 |  | 2016
|  | HPMC | FRP | Total |  | HPMC | FRP | Total |  | HPMC | FRP | Total
Primary Geographical Market: |  |  |  |  |  |  |  |  |  |
United States |  | $ | 1,214.1 |  | $ | 1,134.0 |  | $ | 2,348.1 |  |  | $ | 1,096.5 |  | $ | 974.1 |  | $ | 2,070.6 |  |  | $ | 1,057.3 |  | $ | 800.2 |  | $ | 1,857.5 |
China |  | 83.1 |  | 236.9 |  | 320.0 |  |  | 51.1 |  | 214.5 |  | 265.6 |  |  | 57.8 |  | 156.3 |  | 214.1 |
Germany |  | 192.7 |  | 54.5 |  | 247.2 |  |  | 170.5 |  | 46.6 |  | 217.1 |  |  | 137.4 |  | 40.3 |  | 177.7 |
United Kingdom |  | 232.4 |  | 9.7 |  | 242.1 |  |  | 220.9 |  | 10.7 |  | 231.6 |  |  | 171.1 |  | 12.7 |  | 183.8 |
Japan |  | 136.5 |  | 78.4 |  | 214.9 |  |  | 95.2 |  | 36.5 |  | 131.7 |  |  | 113.4 |  | 38.5 |  | 151.9 |
France |  | 172.7 |  | 10.9 |  | 183.6 |  |  | 157.8 |  | 7.8 |  | 165.6 |  |  | 134.9 |  | 7.7 |  | 142.6 |
Rest of World |  | 302.7 |  | 188.0 |  | 490.7 |  |  | 275.4 |  | 167.5 |  | 442.9 |  |  | 258.5 |  | 148.5 |  | 407.0 |
Total |  | $ | 2,334.2 |  | $ | 1,712.4 |  | $ | 4,046.6 |  |  | $ | 2,067.4 |  | $ | 1,457.7 |  | $ | 3,525.1 |  |  | $ | 1,930.4 |  | $ | 1,204.2 |  | $ | 3,134.6 |
Comparative information of the Company’s major high-value and standard products based on their percentages of sales is included in the following table. FRP conversion services are excluded from this presentation.
|  | 2018 |  | 2017 |  | 2016
|  | HPMC | FRP | Total |  | HPMC | FRP | Total |  | HPMC | FRP | Total
Diversified Products: |  |  |  |  |  |  |  |  |  |  |  |
High-Value Products |  |  |  |  |  |  |  |  |  |  |  |
Nickel-based alloys and specialty alloys |  | 31 | % | 28 | % | 30 | % |  | 31 | % | 24 | % | 28 | % |  | 29 | % | 25 | % | 28 | %
Precision forgings, castings and components |  | 34 | % | — | % | 20 | % |  | 32 | % | — | % | 19 | % |  | 29 | % | — | % | 18 | %
Titanium and titanium-based alloys |  | 25 | % | 5 | % | 17 | % |  | 26 | % | 5 | % | 17 | % |  | 29 | % | 4 | % | 20 | %
Precision and engineered strip |  | — | % | 33 | % | 14 | % |  | — | % | 34 | % | 14 | % |  | — | % | 36 | % | 13 | %
Zirconium and related alloys |  | 10 | % | — | % | 5 | % |  | 11 | % | — | % | 6 | % |  | 13 | % | — | % | 8 | %
Total High-Value Products |  | 100 | % | 66 | % | 86 | % |  | 100 | % | 63 | % | 84 | % |  | 100 | % | 65 | % | 87 | %
Standard Products |  |  |  |  |  |  |  |  |  |  |  |
Stainless steel sheet |  | — | % | 20 | % | 8 | % |  | — | % | 21 | % | 9 | % |  | — | % | 19 | % | 7 | %
Specialty stainless sheet |  | — | % | 10 | % | 4 | % |  | — | % | 12 | % | 5 | % |  | — | % | 11 | % | 4 | %
Stainless steel plate and other |  | — | % | 4 | % | 2 | % |  | — | % | 4 | % | 2 | % |  | — | % | 5 | % | 2 | %
Total Standard Products |  | — | % | 34 | % | 14 | % |  | — | % | 37 | % | 16 | % |  | — | % | 35 | % | 13 | %
Total |  | 100 | % | 100 | % | 100 | % |  | 100 | % | 100 | % | 100 | % |  | 100 | % | 100 | % | 100 | %
The Company maintains a backlog of confirmed orders totaling $2.2 billion, $2.1 billion and $1.7 billion at December 31, 2018, 2017 and 2016, respectively. Due to the structure of the Company’s LTAs, 85% of this backlog at December 31, 2018 represented booked orders with performance obligations that will be satisfied within the next twelve months. The backlog does not reflect any elements of variable consideration. Accounts Receivable As of December 31, 2018 and 2017, accounts receivable with customers were $533.8 million and $550.9 million, respectively. The following represents the rollforward of accounts receivable - reserve for doubtful accounts for the fiscal years ended December 31, 2018, 2017 and 2016:
(in millions)
Accounts Receivable - Reserve for Doubtful Accounts
Balance as of December 31, 2015 | $ | 4.5 |
Expense to increase the reserve | 4.8 |
Write-off of uncollectible accounts | (2.0 | )
Balance as of December 31, 2016 | 7.3 |
Expense to increase the reserve | 0.1 |
Write-off of uncollectible accounts | (1.5 | )
Balance as of December 31, 2017 | 5.9 |
Expense to increase the reserve | 1.9 |
Write-off of uncollectible accounts | (1.8 | )
Balance as of December 31, 2018 | $ | 6.0 |
Contract balances The following represents the rollforward of contract assets and liabilities for the fiscal year ended December 31, 2018:
(in millions)
Contract Assets
Short-term
Balance as of January 1, 2018 | $ | 36.5 |
Recognized in current year | 92.9 |
Reclassified to accounts receivable | (95.8 | )
Impairment | — |
Reclassification to/from long-term | 16.8 |
Other | 0.8 |
Balance as of December 31, 2018 | $ | 51.2 |
Long-term
Balance as of January 1, 2018 | $ | 16.9 |
Recognized in current year | — |
Reclassified to accounts receivable | — |
Impairment | — |
Reclassification to/from short-term | (16.8 | )
Balance as of December 31, 2018 | $ | 0.1 |
(in millions)
Contract Liabilities
Short-term
Balance as of January 1, 2018 | $ | 69.7 |
Recognized in current year | 76.7 |
Amounts in beginning balance reclassified to revenue | (49.6 | )
Current year amounts reclassified to revenue | (42.7 | )
Other | 2.7 |
Reclassification to/from long-term | 14.6 |
Balance as of December 31, 2018 | $ | 71.4 |
Long-term
Balance as of January 1, 2018 | $ | 22.2 |
Recognized in current year | 0.7 |
Amounts in beginning balance reclassified to revenue | (1.0 | )
Current year amounts reclassified to revenue | — |
Other | — |
Reclassification to/from short-term | (14.6 | )
Balance as of December 31, 2018 | $ | 7.3 |
Contract costs for obtaining and fulfilling a contract were $5.2 million as of December 31, 2018, which are reported in other long-term assets on the consolidated balance sheet. Amortization expense for the fiscal year ended December 31, 2018 of these contract costs was $1.2 million.

X
- References No definition available. + Details
Name: | us-gaap_RevenueFromContractWithCustomerAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration

X
- 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://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 + Details
Name: | us-gaap_RevenueFromContractWithCustomerTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration