REVENUE (Notes)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Revenue from Contract with Customer [Text Block]

REVENUE

The Corporation recognizes revenue when control of a promised good and/or service is transferred to a customer in an amount that reflects the consideration that the Corporation expects to be entitled to in exchange for that good and/or service.

Performance Obligations

The Corporation identifies a performance obligation for each promise in a contract to transfer a distinct good or service to the customer. As part of its assessment, the Corporation considers all goods and/or services promised in the contract, regardless of whether they are explicitly stated or implied by customary business practices. The Corporation’s contracts may contain either a single performance obligation, including the promise to transfer individual goods or services that are not separately distinct within the context of the respective contracts, or multiple performance obligations. For contracts with multiple performance obligations, the Corporation allocates the overall transaction price to each performance obligation using standalone selling prices, where available, or utilizes estimates for each distinct good or service in the contract where standalone prices are not available.

The Corporation’s performance obligations are satisfied either at a point-in-time or on an over-time basis. Revenue recognized on an over-time basis for the three and six months ended June 30, 2020 accounted for approximately 54% and 53%, respectively, of total net sales. Revenue recognized on an over-time basis for both the three and six months ended June 30, 2019 accounted for approximately 48% of total net sales. Typically, over-time revenue recognition is based on the utilization of an input measure used to measure progress, such as costs incurred to date relative to total estimated costs. Revenue recognized at a point-in-time for the three and six months ended June 30, 2020 accounted for approximately 46% and 47%, respectively, of total net sales. Revenue recognized at a point-in-time for both the three and six months ended June 30, 2019 accounted for approximately 52% of total net sales. Revenue for these types of arrangements is recognized at the point in time in which control is transferred to the customer, typically based upon the terms of delivery.

Contract backlog represents the remaining performance obligations that have not yet been recognized as revenue. Backlog includes deferred revenue and amounts that will be invoiced and recognized as revenue in future periods. Total backlog was approximately $2.2 billion as of June 30, 2020, of which the Corporation expects to recognize approximately 89% as net sales over the next 12-36 months. The remainder will be recognized thereafter.

Disaggregation of Revenue

The following table presents the Corporation’s total net sales disaggregated by end market and customer type:

Total Net Sales by End Market and Customer Type	Three Months Ended				Six Months Ended
	June 30,				June 30,
(In thousands)	2020		2019		2020		2019
Defense
Aerospace	$	109,305	$	104,426	$	211,133	$	183,213
Ground	20,029		26,394		42,686		47,151
Naval	164,941		149,853		330,633		280,941
Total Defense Customers	$	294,275	$	280,673	$	584,452	$	511,305
Commercial
Aerospace	$	71,084	$	108,000	$	171,765	$	211,222
Power Generation	76,202		93,171		160,550		189,652
General Industrial	108,486		157,152		234,511		305,131
Total Commercial Customers	$	255,772	$	358,323	$	566,826	$	706,005
Total	$	550,047	$	638,996	$	1,151,278	$	1,217,310

Contract Balances

Timing of revenue recognition and cash collection may result in billed receivables, unbilled receivables (contract assets), and deferred revenue (contract liabilities) on the Condensed Consolidated Balance Sheet. The Corporation’s contract assets primarily relate to its rights to consideration for work completed but not billed as of the reporting date. Contract assets are transferred to billed receivables when the rights to consideration become unconditional. This is typical in situations where amounts are billed as work progresses in accordance with agreed-upon contractual terms or upon achievement of contractual milestones. The Corporation’s contract liabilities primarily consist of customer advances received prior to revenue being earned. Revenue recognized during the three and six months ended June 30, 2020 included in the contract liabilities balance as

of January 1, 2020 was approximately $71 million and $160 million, respectively. Revenue recognized during the three and six months ended June 30, 2019 included in the contract liabilities balance as of January 1, 2019 was approximately $54 million and $133 million, respectively. Contract assets and contract liabilities are reported in the "Receivables, net" and "Deferred revenue" lines, respectively, within the Condensed Consolidated Balance Sheet.