Revenues

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Revenue Recognition

The Company recognizes revenue upon the transfer of control of goods or services to customers at amounts that reflect the consideration expected to be received. AdvanSix primarily recognizes revenues when title and control of the product transfers from the Company to the customer. Outbound shipping costs incurred by the Company are not included in revenues but are reflected as freight expense in Costs of goods sold in the Consolidated Statements of Operations.

Sales of our products to customers are made under a purchase order, and in certain cases in accordance with the terms of a master services agreement. These agreements typically contain formula-based pass-through pricing tied to key feedstock materials and volume ranges, but often do not specify the goods, including the quantities thereof, to be transferred. Certain master services agreements (including with respect to our largest customer) may contain minimum purchase volumes which can be satisfied by the customer on a periodic basis by choosing from various products offered by the Company. In these cases, a performance obligation is created when a customer submits a purchase order for a specific product at a specified price, typically providing for delivery within the next 60 days. The Company considers the performance obligation with respect to such purchase order satisfied at the point in time when control of the product is transferred to the customer, which is indicated by shipment of the product and transfer of title and risk of loss to the customer. Variable consideration is estimated for future volume rebates and early pay discounts on certain products and product returns. The Company records variable consideration as an adjustment to the sale transaction price. Since variable consideration is generally settled within one year, the time value of money is not significant.

The Company applies the practical expedient in Topic 606 and does not include disclosures regarding remaining performance obligations that have original expected durations of one year or less, or amounts for variable consideration allocated to wholly-unsatisfied performance obligations or wholly-unsatisfied distinct goods that form part of a single performance obligation, if any.

The Company also utilizes the practical expedient in Topic 606 and does not include an adjustment for the effects of a significant financing component given the expected period duration of one year or less.

We serve more than 500 customers annually in more than 40 countries and across a wide variety of industries. For the three months ended September 30, 2018 and 2017, the Company's ten largest customers accounted for approximately 48% and 44% of total sales, respectively. For the nine months ended September 30, 2018 and 2017, the Company’s ten largest customers accounted for approximately 45% and 43% of total sales, respectively.

We typically sell to customers under contracts, with one- to two-year terms on average, or by purchase orders. We have historically experienced low customer turnover.

Each of the Company’s product lines represented the following approximate percentage of total sales for the three and nine months ended September 30, 2018 and 2017:


	Three Months Ended September 30,			Nine Months Ended September 30,
	2018	2017	2018	2017
Nylon	28%	28%	28%	29%
Caprolactam	18%	19%	18%	19%
Ammonium Sulfate Fertilizers	19%	20%	20%	20%
Chemical Intermediates	35%	33%	34%	32%
	100%	100%	100%	100%

The Company's revenues by geographic area for the three and nine months ended September 30, 2018 and 2017 were as follows:


	Three Months Ended September 30,						Nine Months Ended September 30,
	2018		2017		2018		2017
United States	$	306,050	$	289,480	$	946,195	$	889,515
International	62,603		77,180		182,155		215,290
Total	$	368,653	$	366,660	$	1,128,350	$	1,104,805

Deferred Income and Customer Advances

The Company defers revenues when cash payments are received in advance of our performance. Customer advances relate primarily to sales from the ammonium sulfate business. Below is a roll-forward of Deferred Income and Customer Advances for the nine months ended September 30, 2018:



Opening balance January 1, 2018	$	17,194

Additional cash advances	2,883

Less amounts recognized in revenues	(17,782)

Ending balance September 30, 2018	$	2,295

The Company expects to recognize as revenue the September 30, 2018 ending balance of Deferred Income and Customer Advances within one year or less.