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Revenue from Contracts with Customers (Notes) | 9 Months Ended
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Sep. 30, 2018
Revenue from Contract with Customer [Abstract] |
Revenue from Contract with Customer [Text Block] | REVENUE FROM CONTRACTS WITH CUSTOMERS Performance Obligations. Revenue is recognized when performance obligations under the terms of a contract with our customer are satisfied. Generally this occurs with the transfer of control of our products or services to our customers. Revenue is measured as the amount of consideration we expect to receive in exchange for transferring products or providing services to our customers. For a general discussion of the nature of the goods and services that we provide, see Note K - "Industry Segments." Product Sales. Product sales revenues are recognized at a point in time when we transfer control of our product offerings to our customers, generally when we ship products from our facility to our customer. The product sales for our Completion Fluid & Products Division consist primarily of CBF, additives, and associated manufactured products. Product sales for our Water & Flowback Services Division are typically attributed to specific performance obligations within certain production testing service arrangements. Parts and equipment sales comprise the product sales for the Compression Division. Services. Service revenues represent revenue recognized over time, as our customer arrangements typically provide agreed upon day-rates (monthly service rates for compression services) and we recognize service revenue based upon the number of days services have been performed. Service revenue recognized over time is associated with a majority of our Water & Flowback Services Division arrangements, compression service and aftermarket service contracts within our Compression Division, and a small portion of Completion Fluids & Products Division revenue that is associated with completion fluid service arrangements. With the exception of the initial terms of the compression services contracts for medium- and high-horsepower compressor packages of our Compression Division, our customer contracts are generally for terms of one year or less. The majority of the service arrangements in the Water & Flowback Services Division are for a period of 90 days or less. Within our Compression Division service revenue, most aftermarket service revenues are recognized at a point in time when we transfer control of our products and complete the delivery of services to our customers. We receive cash equal to the invoice price for most product sales and services and payment terms typically range from 30 to 60 days from the date we invoice our customer. Since the period between when we deliver products or services and when the customer pays for products or services are not expected to exceed one year, we have elected not to calculate or disclose a financing component for our customer contracts. Depending on the terms of the arrangement, we may also defer the recognition of revenue for a portion of the consideration received because we have to satisfy a future performance obligation. For example, consideration received from customers during the fabrication of new compressor packages is typically deferred until control of the compressor package is transferred to our customer. For any arrangements with multiple performance obligations, we use management's estimated selling price to determine the stand-alone selling price for separate performance obligations. For revenue associated with mobilization of service equipment as part of a service contract arrangement, such revenue, if significant, is deferred and amortized over the estimated service period. As of September 30, 2018, we had $16.5 million of remaining performance obligations related to our compression service contracts. As a practical expedient, this amount does not reflect revenue for compression service contracts whose original expected duration is less than 12 months an d does not consider the effects of the time value of money. The remaining performance obligations are expected to be recognized through 2022 as follows (in thousands):
| 2018 |  | 2019 |  | 2020 |  | 2021 |  | 2022 |  | Total
| (In Thousands)
Compression service contracts remaining performance obligations | $ | 2,552 |  |  | $ | 9,451 |  |  | $ | 3,865 |  |  | $ | 552 |  |  | $ | 76 |  |  | $ | 16,496 |
Sales taxes, value added taxes, and other taxes we collect concurrent with revenue-producing activities are excluded from revenue. We have elected to recognize the cost for freight and shipping costs as part of cost of product sales when control over our products (i.e. delivery) has transferred to the customer. Use of Estimates. C ontracts where the amount of revenue that will ultimately be realized is subject to uncertainties not fully known as of the time revenue is recognized are known as variable consideration arrangements. In recognizing revenue for these arrangements, the amount of variable consideration recognized is limited so that it is probable that significant amounts of revenues will not be reversed in future periods when the uncertainty is resolved. For products returned by the customer, we estimate the expected returns based on an analysis of historical experience. For volume discounts earned by the customer, we estimate the discount (if any) based on our estimate of the total expected volume of products sold or services to be provided to the customer during the discount period. In certain contracts for the sale of CBF, we may agree to issue credits for the repurchase of reclaimable used fluids from certain customers at an agreed price that is based on the condition of the fluids. For sales of CBF, we adjust the revenue recognized in the period of shipment by the estimated amount of the credit expected to be issued to the customer, and this estimate is based on historical experience. As of September 30, 2018, the amount of remaining credits expected to be issued for the repurchase of reclaimable used fluids was $1.7 million tha t were recorded in inventory (right of return asset) and accounts payable. T here were no material differences between amounts recognized during the three month period ended September 30, 2018, compared to estimates made in a prior period from these variable consideration arrangements. Contract Assets and Liabilities. Contract assets arise when we transfer products or perform services in fulfillment of a contract obligation but must perform other performance obligations before being entitled to payment. Generally, once we have transferred products or performed services for the customer pursuant to a contract, we recognize revenue and trade accounts receivable, as we are entitled to payment that is unconditional. Any contract assets, along with billed and unbilled accounts receivable, are included in Trade Accounts Receivable in our consolidated balance sheets. Contract liabilities arise when we receive consideration, or consideration is unconditionally due, from a customer prior to transferring products or services to the customer under the terms of a sales contract. We classify contract liabilities as Unearned Income in our consolidated balance sheets. Such deferred revenue typically results from advance payments received on orders for new compressor equipment prior to the time such equipment is completed and transferred to the customer in accordance with the customer contract. As of September 30, 2018 and December 31, 2017, contract assets were immaterial. The following table reflects the changes in our contract liabilities during the nine month period ended September 30, 2018:
| September 30, 2018
| (In Thousands)
Unearned Income, beginning of period | $ | 17,050 |
Additional unearned income | 101,887 |
Revenue recognized | (82,050 | )
Unearned income, end of period | $ | 36,887 |
Bad debt expense on accounts receivables and contract assets was $1.0 million and $1.3 million du ring the three and nine month periods ended September 30, 2018, respectively, and $0.1 million and $1.0 million during the three and nine month periods ended September 30, 2017, respectively. During the three month period ended September 30, 2018, contract liabilities increased due to unearned income for consideration received on new compressor equipment being fabricated. During the nine month period ended September 30, 2018, $82.1 million of unearned income was recognized as product sales revenue, primarily associated w ith deliveries of new compression equipment. Contract Costs. When costs are incurred to obtain contracts, such as professional fees and sales bonuses, such costs are deferred and amortized over the expected period of benefit. Costs of mobilizing service equipment necessary to perform under service contracts, if significant, are deferred and amortized over the estimated service period, which is generally a few weeks. As of September 30, 2018, such contract costs were immaterial. Where applicable, we establish provisions for estimated obligations pursuant to product warranties by accruing for estimated future product warranty cost in the period of the product sale. Such estimates are based on historical warranty loss experience. Major components of fabricated compressor packages have manufacturer warranties that we pass through to the customer. Disaggregation of Revenue. We disaggregate revenue from contracts with customers into Product Sales and Services within each segment, as noted in our three reportable segments in Note K. In addition, we disaggregate revenue from contracts with customers by geography based on the following table below.
| Three months ended September 30, |  | Nine months ended September 30,
| 2018 |  | 2017 |  | 2018 |  | 2017
| (In Thousands)
Completion Fluids & Products |  |  |  |  |  |  |
U.S. | 35,426 |  |  | 42,537 |  |  | 97,446 |  |  | 124,209 |
International | 27,647 |  |  | 28,786 |  |  | 95,287 |  |  | 77,337 |
| 63,073 |  |  | 71,323 |  |  | 192,733 |  |  | 201,546 |
Water & Flowback Services |  |  |  |  |  |  |
U.S. | 71,579 |  |  | 31,802 |  |  | 189,457 |  |  | 80,219 |
International | 6,989 |  |  | 9,246 |  |  | 33,832 |  |  | 30,094 |
| 78,568 |  |  | 41,048 |  |  | 223,289 |  |  | 110,313 |
Compression |  |  |  |  |  |  |
U.S. | 105,655 |  |  | 63,697 |  |  | 273,563 |  |  | 190,553 |
International | 9,606 |  |  | 7,914 |  |  | 27,044 |  |  | 21,929 |
| 115,261 |  |  | 71,611 |  |  | 300,607 |  |  | 212,482 |
Interdivision eliminations |  |  |  |  |  |  |
U.S. | 4 |  |  | (12 | ) |  | 4 |  |  | (13 | )
International | (55 | ) |  | (293 | ) |  | (329 | ) |  | (1,311 | )
| (51 | ) |  | (305 | ) |  | (325 | ) |  | (1,324 | )
Total Revenue |  |  |  |  |  |  |
U.S. | 212,664 |  |  | 138,024 |  |  | 560,470 |  |  | 394,968 |
International | 44,187 |  |  | 45,653 |  |  | 155,834 |  |  | 128,049 |
| 256,851 |  |  | 183,677 |  |  | 716,304 |  |  | 523,017 |

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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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