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Revenue | 3 Months Ended
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Mar. 31, 2018
Revenue from Contract with Customer [Abstract] |
Revenue | Revenue Significant changes to our accounting policies as a result of adopting ASC 606 are discussed below. Other significant accounting policies are detailed in “Note 2 — Significant Accounting Policies” of our Annual Report on Form 10-K for the year ended December 31, 2017. Revenue Recognition: Revenue is recognized when (or as) we satisfy performance obligations by transferring a promised good or service, an asset, to a customer. An asset is transferred to a customer when, or as, the customer obtains control over that asset. In most contracts, the transaction price includes both fixed and variable consideration. The variable consideration contained within our contracts with customers includes discounts, rebates, refunds, credits, price concessions, incentives, performance bonuses, penalties and other similar items. When a contract includes variable consideration, we evaluate the estimate of the variable consideration to determine whether the estimate needs to be constrained; therefore, we include the variable consideration in the transaction price only to the extent that it is probable that a significant reversal of the amount of cumulative revenue recognized will not occur when the uncertainty associated with the variable consideration is subsequently resolved. Variable consideration estimates are updated at each reporting date. When a contract includes multiple performance obligations, the contract price is allocated among the performance obligations based upon the stand alone selling prices. When the period between when we transfer a promised good or service to a customer and when the customer pays for that good or service is expected, at contract inception, to be one year or less, we do not adjust for the effects of a significant financing component. For brazed aluminum heat exchangers, air cooled heat exchangers, cold boxes, liquefied natural gas fueling stations, engineered tanks, commercial oxygen generation systems, and repair services, most contracts contain language that transfers control to the customer over time. For these contracts, revenue is recognized as we satisfy the performance obligations by an allocation of the transaction price to the accounting period computed using input methods such as costs incurred. Input methods recognize revenue on the basis of the entity’s efforts or inputs to the satisfaction of a performance obligation relative to the total expected inputs to the satisfaction of that performance obligation. The costs incurred input method measures progress toward the satisfaction of the performance obligation by multiplying the transaction price of the performance obligation by the percentage of incurred costs as of the balance sheet date to the total estimated costs at completion after giving effect to the most current estimates. Timing of amounts billed on contracts varies from contract to contract and could cause significant variation in working capital needs. Revisions to estimated cost to complete that result from inefficiencies in our performance that were not expected in the pricing of the contract are expensed in the period in which these inefficiencies become known. Contract modifications can change a contract’s scope, price, or both. Approved contract modifications are accounted for as either a separate contract or as part of the existing contract depending on the nature of the modification. For standard industrial gas and LNG tanks, respiratory therapy products, and some products identified in the prior paragraph with contract language that does not meet the over time recognition requirements, the contract with the customer contains language that transfers control to the customer at a point in time. For these contracts, revenue is recognized when we satisfy our performance obligation to the customer. Timing of amounts billed on contracts varies from contract to contract. The specific point in time when control transfers depends on the contract with the customer, contract terms that provide for a present obligation to pay, physical possession, legal title, risk and rewards of ownership, acceptance of the asset, and bill-and-hold arrangements may impact the point in time when control transfers to the customer. Incremental contract costs are expensed when incurred when the amortization period of the asset that would have been recognized is one year or less; otherwise, incremental contract costs are recognized as an asset and amortized over time as promised goods and services are transferred to a customer. When losses are expected to be incurred on a contract, we recognize the entire anticipated loss in the accounting period when the loss becomes evident. The loss is recognized when the current estimate of the consideration we expect to receive, modified to include unconstrained variable consideration instead of constrained variable consideration, is less than the current estimate of total costs for the contract. Taxes assessed by a governmental authority that are both imposed on and concurrent with a specific revenue-producing transaction, that are collected by us from a customer, are excluded from revenue. Shipping and handling fee revenues and the related expenses are reported as fulfillment revenues and expenses for all customers because we have adopted the practical expedient contained in ASC 606-10-25-18B. Therefore, all shipping and handling costs associated with outbound freight are accounted for as a fulfillment costs and are in included in cost of sales. Contract Balances Accounts receivable, net of allowances: Accounts receivable includes amounts billed and currently due from customers. The amounts due are stated at their net estimated realizable value. We maintain an allowance for doubtful accounts to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness, historical payment experience, the age of outstanding receivables and collateral to the extent applicable. Past-due trade receivable balances are written off when our internal collection efforts have been unsuccessful. As a practical expedient, we do not adjust the promised amount of consideration for the effects of a significant financing component when we expect, at contract inception, that the period between our transfer of a promised product or service to a customer and when the customer pays for that product or service will be one year or less. We do not typically include extended payment terms in our contracts with customers. Unbilled contract revenue: Unbilled contract revenue represents contract assets resulting from revenue recognized over time in excess of the amount billed to the customer and the amount billed to the customer is not just subject to the passage of time. Billing requirements vary by contract but are generally structured around the completion of certain milestones. These contract assets are generally classified as current. Customer advances and billings in excess of contract revenue: Our contract liabilities consist of advance customer payments, billings in excess of revenue recognized and deferred revenue. Our contract assets and liabilities are reported in a net position on a contract-by-contract basis at the end of each reporting period. We classify advance customer payments and billings in excess of revenue recognized as current. We classify deferred revenue as current or non-current based on the timing of when we expect to recognize revenue. The current portion of deferred revenue is included in customer advances and billings in excess of contract revenue in our unaudited condensed consolidated balance sheets. Long-term deferred revenue is included in other long-term liabilities in our unaudited condensed consolidated balance sheets. The following table represents changes in our contract assets and contract liabilities balances:
| March 31, 2018 |  | January 1, 2018 |  | Year-to-date Change ($) |  | Year-to-date Change (%)
Contract assets |  |  |  |  |  |  |
Accounts receivable, net of allowances | $ | 207.3 |  |  | $ | 222.7 |  |  | (15.4 | ) |  | 6.9 | %
Unbilled contract revenue | 37.7 |  |  | 43.5 |  |  | (5.8 | ) |  | 13.3 | %
Contract liabilities |  |  |  |  |  |  |
Customer advances and billings in excess of contract revenue | $ | 114.7 |  |  | $ | 100.3 |  |  | 14.4 |  |  | (14.4 | )%
Long-term deferred revenue | 2.7 |  |  | 2.6 |  |  | 0.1 |  |  | (3.8 | )%
During the three months ended March 31, 2018 and 2017, we recognized revenue of $38.9 and $25.1, respectively, that was included in the contract liabilities balance at the beginning of the periods. The amount of revenue recognized during the three months ended March 31, 2018 from performance obligations satisfied or partially satisfied in previous periods as a result of changes in the estimates of variable consideration related to long-term contracts, primarily within our Distribution & Storage (“D&S”) and Energy & Chemicals (“E&C”) segments, was not significant. Remaining Performance Obligations Remaining performance obligations represent the transaction price of firm signed purchase orders or other written contractual commitments from customers for which work has not been performed, or is partially completed, and excludes unexercised contract options and potential orders. As of March 31, 2018, the estimated revenue expected to be recognized in the future related to remaining performance obligations was $489.4. We expect to recognize revenue on approximately 87.6% of the remaining performance obligations over the next 12 months and 3.2% of the remaining performance obligations over the next 13 to 24 months, with the remaining balance recognized thereafter. Disaggregation of Revenue The following table represents a disaggregation of revenue by product application along with the reportable segment for each category:
| For the Three Months Ended March 31, 2018
| Energy & Chemicals |  | Distribution & Storage |  | BioMedical |  | Intersegment Eliminations |  | Consolidated
Natural gas processing (including petrochemical) applications | $ | 58.7 |  |  | $ | — |  |  | $ | — |  |  | $ | — |  |  | $ | 58.7 |
Liquefied natural gas (LNG) applications | 9.0 |  |  | 34.2 |  |  | — |  |  | (1.0 | ) |  | 42.2 |
Industrial gas applications | 3.4 |  |  | — |  |  | — |  |  | — |  |  | 3.4 |
HVAC, power and refining applications | 18.8 |  |  | — |  |  | — |  |  | — |  |  | 18.8 |
Bulk industrial gas applications | — |  |  | 53.0 |  |  | — |  |  | — |  |  | 53.0 |
Packaged gas industrial applications | — |  |  | 48.9 |  |  | — |  |  | — |  |  | 48.9 |
Respiratory therapy | — |  |  | — |  |  | 28.9 |  |  | — |  |  | 28.9 |
Cryobiological storage | — |  |  | — |  |  | 19.1 |  |  | — |  |  | 19.1 |
On-site generation systems | — |  |  | — |  |  | 6.7 |  |  | — |  |  | 6.7 |
Total | $ | 89.9 |  |  | $ | 136.1 |  |  | $ | 54.7 |  |  | $ | (1.0 | ) |  | $ | 279.7 |
The following table represents a disaggregation of revenue by timing of revenue along with the reportable segment for each category:
| For the Three Months Ended March 31, 2018
| Energy & Chemicals |  | Distribution & Storage |  | BioMedical |  | Intersegment Eliminations |  | Consolidated
Point in time | $ | 23.9 |  |  | $ | 121.1 |  |  | $ | 53.4 |  |  | $ | — |  |  | $ | 198.4 |
Over time | 66.0 |  |  | 15.0 |  |  | 1.3 |  |  | (1.0 | ) |  | 81.3 |
Total | $ | 89.9 |  |  | $ | 136.1 |  |  | $ | 54.7 |  |  | $ | (1.0 | ) |  | $ | 279.7 |

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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/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 235 -URI http://asc.fasb.org/topic&trid=2122369 Reference 2: http://www.xbrl.org/2003/role/presentationRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 + Details
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