Accounts Receivable and Inventories

12 Months Ended

Dec. 31, 2018

Accounts Receivable and Inventories [Abstract]

Accounts receivable consist of the following:



(In thousands)	December 31 2018			December 31 2017
Trade accounts receivable	$	295,847		$	292,765
Less: Allowance for doubtful accounts	(4,634		)	(4,731		)
Trade accounts receivable, net	$	291,213		$	288,034
Other receivables (a) (b)	$	54,182		$	20,224


(a)	Other receivables include insurance claim receivables, employee receivables, tax claim receivables and other miscellaneous receivables not included in Trade accounts receivable, net


(b)	From time to time, based on developments including ongoing negotiations, the Company adjusts insured liabilities with offsetting insurance receivables, with no impact to the Consolidated Statements of Operations.

The provision (benefit) for doubtful accounts related to trade accounts receivable was as follows:



	Years Ended December 31
(In thousands)	2018		2017		2016
Provision (benefit) for doubtful accounts related to trade accounts receivable	$	372	$	5,346	$	(38	)

The increase in the provision for doubtful accounts for the year ended 2017 is due principally to the write-off of certain pre-administration receivable balances for one of the Company's customers in Australia.

Inventories consist of the following:



(In thousands)	December 31 2018		December 31 2017
Finished goods	$	17,223	$	26,415
Work-in-process	21,787		24,367
Contracts-in-process (c)	—		45,599
Raw materials and purchased parts	72,194		58,943
Stores and supplies	21,907		22,969
Total inventories	$	133,111	$	178,293
Valued at lower of cost or market:
LIFO basis	$	80,590	$	80,644
FIFO basis	8,611		52,832
Average cost basis	43,910		44,817
Total inventories	$	133,111	$	178,293

Inventories valued on the LIFO basis at December 31, 2018 and 2017 were approximately $36 million and $33 million, respectively, less than the amounts of such inventories valued at current costs. During 2018, 2017 and 2016 as a result of reducing certain inventory quantities valued on a LIFO basis, net income (loss) was favorably impacted compared to that which would have been recorded under the FIFO basis of valuation by $0.6 million, $0.4 million and $1.3 million, respectively.

Contracts-in-process consist of the following:



(In thousands)	December 31 2017
Contract costs accumulated to date	$	73,740
Estimated forward loss provisions for contracts-in-process (d)	(28,141		)
Contracts-in-process (c)(e)	$	45,599


(c)	The Company has adopted the new revenue recognition standard utilizing the modified retrospective transition method, including use of practical expedients. Amounts previously reported as Contracts-in-progress have been recognized through the related cumulative catch-up adjustment. See Note 2, Recently Adopted and Recently Issued Accounting Standards for additional information.

(d) For periods prior to January 1, 2018, to the extent that the estimated forward loss provision exceeds accumulated contract costs it is included in the caption Other current liabilities on the Consolidated Balance Sheets and amounted to $3.0 million at December 31, 2017.

(e) At December 31, 2017, the Company had $97.9 million of net customer advances related to SBB contracts. These amounts are included in the caption Current portion of advances on contracts on the Consolidated Balance Sheets.

The Company recognized an initial estimated forward loss provision related to the contracts with the federal railway system of Switzerland ("SBB") of $45.1 million for the year ended December 31, 2016. The Company recorded an additional forward loss provision of $1.8 million for the year ended December 31, 2018. At December 31, 2018, the entire remaining estimated forward loss provision of $9.6 million is included in the caption Other current liabilities on the Consolidated Balance Sheets. The estimated forward loss provision represents the Company's best estimate based on currently available information. It is possible that the Company's overall estimate of costs to complete these contracts may increase, which would result in an additional estimated forward loss provision at such time.

The Company recognized $24.2 million of revenues for the contracts with SBB, on an over time basis, utilizing a cost-to-cost method for the year ended December 31, 2018. In addition, for the years ended December 31, 2017 and 2016, the Company recognized $42.5 million and $0.2 million, respectively, of revenue based on the percentage-of-completion (units-of-delivery) method of accounting, whereby revenues and estimated average costs of the units to be produced under the contracts are recognized as deliveries are made or accepted. For 2016, consolidated product revenue gross margins were not significantly impacted by the revenue recognized under the SBB contracts. For 2018 and 2017, product gross margins would have been 100 basis points and 200 basis points higher, respectively, excluding the revenue recognized under the SBB contract. The Company is approximately 99% complete on the first contract and 26% complete on the second contract with SBB as of December 31, 2018.