Revenue Recognition

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

2. Revenue Recognition

We sell our products through three primary commercial channels: original equipment manufacturers (OEMs), industrial distributors and direct to end users. Each of our segments sells similar products, which are balanced across end-user industries including, without limitation, energy, food processing, general industrial, material handling, mining, transportation, industrial automation, robotics, medical devices, and turf & garden.

As the Company’s standard payment terms are less than one year, the Company has elected the practical expedient under Accounting Standards Codification (“ASC”) 606-10-32-18 to not assess whether a contract has a significant financing component. Revenue is recognized when control of the product is transferred to the customer (i.e., when the Company’s performance obligation is satisfied), which typically occurs at shipment from the Company’s manufacturing site or delivery to the customer’s named location. In determining whether control has transferred, the Company considers if there is a present right to payment and legal title, along with risks and rewards of ownership having transferred to the customer. In certain circumstances, the Company manufactures customized product without alternative use for its customers, which would generally result in the transfer of control over time. The Company has evaluated the amount of revenue subject to recognition over time and concluded that it is immaterial.

The following table disaggregates our revenue for each reportable segment. The Company believes that disaggregating revenue into these categories achieves the disclosure objective to depict how the nature, amount, timing, and uncertainty of revenue and cash flows are affected by economic factors.

	Years Ended December 31,
	2022			2021			2020
Net Sales:
Power Transmission Technologies	$	985.6		$	924.8		$	818.6
Automation & Specialty		965.5			979.0			911.8
Inter-segment eliminations		(5.6	)		(4.0	)		(4.4	)
Net sales	$	1,945.5		$	1,899.8		$	1,726.0

Net sales by geographic region based on point of shipment origin are as follows:

	Net Sales
	Years Ended December 31,
	2022		2021		2020
North America (primarily U.S.)	$	1,124.2	$	1,018.3	$	914.9
Europe excluding Germany		344.8		341.9		289.3
Germany		209.5		200.0		185.8
China		148.0		222.9		222.5
Asia and other (excluding China)		119.0		116.7		113.5
Total	$	1,945.5	$	1,899.8	$	1,726.0

The payment terms and conditions in our customer contracts vary. In some cases, customers will partially prepay for their goods; in other cases, after appropriate credit evaluations, payment will be due in arrears. In addition, there are constraints that cause variability in the ultimate consideration to be recognized. These constraints typically include early payment discounts, volume rebates, rights of return, surcharges, and other customer consolidation.

Payments received from customers are recorded as accounts receivable when an unconditional right to the consideration exists. A contract asset is recognized when the Company satisfies a performance obligation by transferring a promised good to the customer before consideration is due. A contract liability is recognized when consideration is received from a customer prior to the Company satisfying the related performance obligation. Contract assets and contract liabilities are recognized in other current assets and other current liabilities, respectively, in the Company’s consolidated balance sheets.

The Company had inconsequential contract assets for the year to date periods ended December 31, 2022 and December 31, 2021, respectively. The opening and closing balances of the Company’s current contract liabilities as of the year to date periods ended December 31, 2022 and December 31, 2021 are as follows:

	Years Ended December 31,
	2022		2021
Beginning balance	$	13.5	$	10.3
Closing balance		16.9		13.5
Increase	$	3.4	$	3.2

In the twelve-month period ended December 31, 2022 and December 31, 2021, respectively, all outstanding revenue has been recognized related to our contract liabilities at the beginning of the related period.