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Revenue from Contracts with Customers | 9 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer | 3. Revenue from Contracts with Customers: Revenue Recognition Model In determining the appropriate amount of revenue to be recognized as the Company fulfills its obligations under its agreements, the Company performs the following steps: (i) identification of the contract with the customer; (ii) determination of whether the promised goods or services are performance obligations, including whether they are distinct in the context of the contract; (iii) measurement of the transaction price; (iv) allocation of the transaction price to the performance obligations based on estimated selling prices; and (v) recognition of revenue when (or as) the Company satisfies each performance obligation. The Company identifies a contract when an agreement with a customer creates legally enforceable rights and obligations, which occurs when a contract has been approved by both parties, the parties are committed to perform their respective obligations, each party’s rights and payment terms are clearly identified, commercial substance exists and it is probable that the Company will collect the consideration to which it is entitled. Evidence of a contract between the Company and its customers may take the form of a master service agreement (“MSA”), a MSA in combination with an underlying purchase order, a combination of a pricing quote with an underlying purchase order or an individual purchase order received from a customer. The Company and certain of its customers enter into MSAs that establish the terms, including prices, under which orders to purchase goods may be placed. In cases where the MSA contains a distinct order for goods or contains an enforceable minimum quantity to be purchased by the customer, the Company considers the MSA to be evidence of a contract between the Company and its customer as the MSA creates enforceable rights and obligations. In cases where the MSA does not contain a distinct order for goods, the Company’s contract with a customer is the purchase order issued under the MSA. Customers of the Company may also negotiate orders via pricing quotes, which typically detail product pricing, delivery terms and payment information. When a customer procures goods under this method, the Company considers the combination of the pricing quote and the purchase order to create enforceable rights and obligations. Absent either a MSA or pricing quote, the Company considers an individual purchase order to create enforceable rights and obligations. The Company identifies a performance obligation in a contract for each promised good that is separately identifiable from other promises in the contract and for which the customer can benefit from the good. The majority of the Company’s contracts have a single performance obligation, which is the promise to transfer individual goods to the customer. The Company has certain contracts that include multiple performance obligations under which the purchase price for each distinct performance obligation is defined in the contract. These distinct performance obligations may include stand-ready provisions, which are arrangements to provide a customer assurance that they will have access to output from the Company’s manufacturing facilities, or monthly reservations of capacity fees. The Company considers stand-ready provisions and reservation of capacity fees to be performance obligations satisfied over time. Revenues related to stand-ready provisions and reservation of capacity fees are recognized on a ratable basis throughout the contract term and billed to the customer on a monthly basis. As described above, the Company’s MSAs with its customers may outline prices for individual products or contract provisions. MSAs in the Company’s performance chemicals and refining services product groups may contain provisions whereby raw materials costs are passed-through to the customer per the terms of their contract. The Company’s exposure to fluctuations in raw materials prices is limited, as the majority of pass-through contract provisions reset based on fluctuations in the underlying raw material price. MSAs in the Company’s refining services product group also contain take-or-pay arrangements, whereby the customer would incur a penalty in the form of a shortfall volume fee. Currently there is no history in which customers fail to meet the contractual minimum. Revenue from product sales are recorded at the net sales price, which includes estimates of variable consideration for which reserves are established and which result from discounts, returns or other allowances that are offered within contracts between the Company and its customers. The Company recognizes revenues when performance obligations under the terms of a contract with its customer are satisfied, which generally occurs at a point in time by transferring control of a product to the customer. The Company determines the point in time when a customer obtains control of a product and the Company satisfies the performance obligation by considering factors including when the Company has a right to payment for the product, the customer has legal title to the product, the Company has transferred possession of the product, the customer has assumed the risks and rewards of ownership of the product and the customer has accepted the product. Revenue is measured as the amount of consideration the Company expects to receive in exchange for transferring goods. The Company does not have any significant payment terms as payment is received at, or shortly after, the point of sale. Contract Assets and Liabilities A contract asset is a right to consideration in exchange for goods that the Company has transferred to a customer when that right is conditional on something other than the passage of time. A contract liability exists when the Company receives consideration in advance of performance obligations. Other than trade accounts receivable and customer return accruals, the Company has not recorded any additional contract assets or contract liabilities on its condensed consolidated balance sheet as of September 30, 2018. Practical Expedients and Accounting Policy Elections The Company has elected to use certain practical expedients and has made certain accounting policy elections as permitted under the new revenue recognition guidance. Certain of the Company’s contracts with customers are based on an individual purchase order; thus, the duration of these contracts are for one year or less. The Company has made an accounting policy election to omit certain disclosures related to remaining performance obligations for contracts which have an initial term of one year or less. When the Company performs shipping and handling activities after the transfer of control to the customer (e.g. when control transfers prior to delivery), they are considered fulfillment activities as opposed to separate performance obligations, and the Company recognizes revenue upon the transfer of control to the customer. Accordingly, the costs associated with these shipping and handling activities are accrued when the related revenue is recognized under the Company’s policy election. The Company expenses incremental costs of obtaining a contract as incurred if the expected amortization period of the asset that the Company would have recognized is one year or less. Sales, value added and other taxes the Company collects concurrent with revenue producing activities are excluded from revenues. Disaggregated Revenue The Company’s primary means of disaggregating revenues is by product group, which can be found in Note 17 to these condensed consolidated financial statements. The Company’s portfolio of products are integrated into a variety of end uses, which are described in the table below.
Key End Uses | Key Products
Industrial & process chemicals | • Silicate precursors for the tire industry
| • Glass beads, or microspheres, for metal finishing end uses
Fuels & emission control | • Refinery catalysts
| • Emission control catalysts
| • Catalyst recycling services
| • Silicate for catalyst manufacturing
Packaging & engineered plastics | • Catalysts for high-density polyethlene and chemicals syntheses
| • Antiblocks for film packaging
| • Solid and hollow microspheres for composite plastics
| • Sulfur derivatives for nylon production
Highway safety & construction | • Reflective markings for roadways and airports
| • Silica gels for surface coatings
Consumer products | • Silica gels for edible oil and beer clarification
| • Precipitated silicas, silicates and zeolites for the dentifrice and
| dishwasher and laundry detergent applications
Natural resources | • Silicates for drilling muds
| • Hollow glass beads, or microspheres, for oil well cements
| • Silicates and alum for water treatment mining
| • Bleaching aids for paper
The following tables disaggregate the Company’s sales, by segment and end use, for the three and nine months ended September 30, 2018:
|  | Three months ended September 30, 2018
|  | Environmental Catalysts & Services |  | Performance Materials & Chemicals |  | Total
Industrial & process chemicals |  | $ | 21,027 |  |  | $ | 65,070 |  |  | $ | 86,097 |
Fuels & emission control (1) |  | 66,095 |  |  | — |  |  | 66,095 |
Packaging & engineered plastics |  | 32,983 |  |  | 31,848 |  |  | 64,831 |
Highway safety & construction (1) |  | — |  |  | 105,204 |  |  | 105,204 |
Consumer products |  | — |  |  | 67,138 |  |  | 67,138 |
Natural resources |  | 19,611 |  |  | 19,059 |  |  | 38,670 |
Total |  | 139,716 |  |  | 288,319 |  |  | 428,035 |
Inter-segment sales eliminations |  | (832 | ) |  | — |  |  | (832 | )
Total segment sales |  | $ | 138,884 |  |  | $ | 288,319 |  |  | $ | 427,203 |
|  | Nine months ended September 30, 2018
|  | Environmental Catalysts & Services |  | Performance Materials & Chemicals |  | Total
Industrial & process chemicals |  | $ | 55,401 |  |  | $ | 216,152 |  |  | $ | 271,553 |
Fuels & emission control (1) |  | 182,304 |  |  | — |  |  | 182,304 |
Packaging & engineered plastics |  | 95,145 |  |  | 97,622 |  |  | 192,767 |
Highway safety & construction (1) |  | — |  |  | 263,095 |  |  | 263,095 |
Consumer products |  | — |  |  | 209,256 |  |  | 209,256 |
Natural resources |  | 53,471 |  |  | 58,177 |  |  | 111,648 |
Total |  | 386,321 |  |  | 844,302 |  |  | 1,230,623 |
Inter-segment sales eliminations |  | (2,510 | ) |  | — |  |  | (2,510 | )
Total segment sales |  | $ | 383,811 |  |  | $ | 844,302 |  |  | $ | 1,228,113 |
(1) | As described in Note 1, the Company experiences seasonal sales fluctuations to customers in the fuels & emission control and highway safety & construction end uses.

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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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