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Revenue and Contracts with Customers | 6 Months Ended
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Jun. 30, 2019
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer | REVENUE AND CONTRACTS WITH CUSTOMERS Disaggregation of Revenue The following table presents revenue from separative work units (“SWU”) and uranium sales disaggregated by geographical region based on the billing addresses of customers (in millions):
| Three Months Ended June 30, |  | Six Months Ended June 30,
| 2019 |  | 2018 |  | 2019 |  | 2018
United States | $ | 2.6 |  |  | $ | 32.9 |  |  | $ | 37.7 |  |  | $ | 54.0 |
Foreign | — |  |  | — |  |  | — |  |  | 0.2 |
Revenue - SWU and uranium | $ | 2.6 |  |  | $ | 32.9 |  |  | $ | 37.7 |  |  | $ | 54.2 |
Refer to Note 13, Segment Information, for disaggregation of revenue by segment. Disaggregation by end-market is provided in Note 13 and the condensed consolidated statements of operations. SWU and uranium sales are made primarily to electric utility customers. Contract services revenue resulted primarily from services provided to government contractors and, in the first quarter of 2018, the settlement with DOE and the U.S. government. SWU and uranium revenue is recognized at point of sale and contract services revenue is generally recognized over time. Contract Balances The following table represents changes in contract assets and contract liabilities balances (in millions):
|  | June 30, 2019 |  | December 31, 2018 |  | Year-To-Date Change
Contract assets |  |  |  |  |  |
Accounts receivable: |  |  |  |  |  |
Billed |  | $ | 20.1 |  |  | $ | 50.4 |  |  | $ | (30.3 | )
Unbilled |  | 5.6 |  |  | — |  |  | 5.6 |
Uranium feed receivable |  | 4.5 |  |  | 9.8 |  |  | (5.3 | )
Accounts receivable |  | $ | 30.2 |  |  | $ | 60.2 |  |  | $ | (30.0 | )
Deferred costs associated with deferred revenue |  | $ | 138.7 |  |  | $ | 134.9 |  |  | $ | 3.8 |
Contract liabilities |  |  |  |  |  |
Accounts payable and accrued liabilities |  | $ | 0.5 |  |  | $ | — |  |  | $ | 0.5 |
Deferred revenue - current |  | $ | 220.5 |  |  | $ | 204.5 |  |  | $ | 16.0 |
Advances from customers - current |  | $ | 46.7 |  |  | $ | — |  |  | $ | 46.7 |
Advances from customers - noncurrent |  | $ | 29.4 |  |  | $ | 15.0 |  |  | $ | 14.4 |
Deferred cost and deferred revenue activity in the six months ended June 30, 2019, follows (in millions):
| Deferred Sales in the Period |  | Previously Deferred Sales Recognized in the Period |  | Year-To-Date Change
Deferred costs associated with deferred revenue | $ | 3.8 |  |  | $ | — |  |  | $ | 3.8 |
Deferred revenue | 16.0 |  |  | — |  |  | 16.0 |
LEU Segment Under the terms of certain contracts with customers in the low-enriched uranium (“LEU”) segment, the Company will accept payment in the form of uranium. Revenue from the sale of SWU under such contracts is recognized at the time LEU is delivered and is based on the fair value of the uranium at contract inception, or as the quantity of uranium is finalized, if variable. In the three months ended June 30, 2019, the Company received uranium from customers valued at $61.1 million as advance payments for the future sales of SWU. The advance payments are included in either Advances from Customers, Current or Advances from Customers, Noncurrent, based on the anticipated SWU sales period. In the three months ended June 30, 2018, the Company received uranium from customers valued at $14.5 million as advance payments for the future sales of SWU. The advance payments are included in Advances from Customers, Noncurrent, based on the anticipated SWU sales period. In the three months ended December 2018, the Company borrowed SWU inventory valued at $7.3 million from a customer under terms that require repayment within 48 months. The Company recorded the SWU and the related liability for the borrowing using an average purchase price over the borrowing period. The liability to the customer is included in Other Liabilities, which is included in noncurrent liabilities. Contract Services Segment Revenue for the contract services segment, representing the Company’s technical, manufacturing, engineering and operations services offered to public and private sector customers, is recognized over the contractual period as services are rendered. On May 31, 2019, the Company entered in a letter agreement with DOE (“the HALEU Letter Agreement”) for the Company to demonstrate the ability to produce high assay, low-enriched uranium (“HALEU”) with existing United States origin enrichment technology and provide DOE with HALEU for near term use in its research and development for the advancement of civilian nuclear energy and security, and other programmatic missions. HALEU is an advanced nuclear reactor fuel that is not commercially available today. The Company commenced work pursuant to the letter agreement on June 1, 2019, and will work with DOE to enter into a definitive contract by October 31, 2019. According to the letter agreement, the definitive contract is anticipated to be an incrementally funded, cost reimbursable contract with DOE reimbursing up to 80% of costs and the Company incurring 20% of costs. Allocable costs include project costs, classified as Cost of Sales, and an allocation of corporate costs classified as Selling, General and Administrative Expenses. It is anticipated that the definitive contract will run through May 31, 2022, and the total amount of DOE’s share will be capped at $115 million. However, the Company has no assurance that a definitive contract will be executed. Based upon the anticipated cost share described above, and the total amount of DOE’s share of $115 million, the Company’s cost share would be approximately $29 million. Any costs incurred above these amounts would be borne by the Company. The HALEU Letter Agreement obligates DOE for costs up to $18.6 million of the $115 million and currently authorizes up to $6.4 million in payments to the Company. Services to be provided over the anticipated three-year contract involve constructing and assembling centrifuge machines and related infrastructure in a cascade formation. When estimates of total project costs to be incurred for such an integrated, construction-type contract exceed estimates of total revenue to be earned, a provision for the entire loss on the contract is recorded to Cost of Sales in the period the loss is determined, and is reflected in Current Liabilities. For the quarter ended June 30, 2019, the Company recorded a loss provision of $0.5 million which represents the anticipated gross loss for the remaining initial phase of contract work performed under the HALEU Letter Agreement as the parties work to enter into a definitive contract. On January 11, 2018, the Company entered into a settlement agreement with DOE and the U.S. government regarding breach of contract claims brought by the Company relating to work performed by the Company under contracts with DOE and subcontracts with DOE contractors. In connection with the settlement, the Company (a) received $4.7 million from the U.S. government, (b) applied approximately $19.3 million of advances from the U.S. government received in prior years against the receivables balance, and (c) recorded additional revenue of $9.5 million. Centrus and DOE have yet to fully settle the Company’s claims for reimbursements for certain pension and postretirement benefits costs related to past contract work performed for DOE. There is the potential for additional revenue to be recognized for this work pending the outcome of legal proceedings related to the Company’s claims for payment and the potential release of previously established valuation allowances on receivables. As a result of the application of fresh start accounting following the Company’s emergence from Chapter 11 bankruptcy on September 30, 2014, the receivables related to the Company’s claims for payment are carried at fair value as of September 30, 2014, which is net of the valuation allowances. Refer to Note 12, Commitments and Contingencies. LEU Segment Order Book The SWU component of LEU is typically bought and sold under long-term contracts with deliveries over several years. The Company’s agreements for natural uranium sales are generally shorter-term, fixed-commitment contracts. The Company’s order book sales under contract in the LEU segment (“order book”) extends to 2030. The order book represents the Company’s remaining performance obligations under these contracts and includes the Deferred Revenue and Advances from Customers amounts in the Contract Balances table above. As of June 30, 2019, the order book was $1.1 billion, compared to $1.0 billion at December 31, 2018, reflecting completed deliveries and new contracts signed in the six months ended June 30, 2019. Most of the Company’s contracts provide for fixed purchases of SWU during a given year. T he Company’s estimate of the aggregate dollar amount of future SWU and uranium sales is partially based on customers’ estimates of the timing and size of their fuel requirements and other assumptions that are subject to change. For example, depending on the terms of specific contracts, the customer may be able to increase or decrease the quantity delivered within an agreed range. T he Company’s order book estimate is also based on the Company’s estimates of selling prices, which are subject to change. For example, depending on the terms of specific contracts, prices may be adjusted based on escalation using a general inflation index, published SWU price indicators prevailing at the time of delivery, and other factors, all of which are variable. T he Company uses external composite forecasts of future market prices and inflation rates in its pricing estimates.

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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://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
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