Our revenue is primarily derived from the sale of inventory under long-term agreements with our customers. We have determined that individual purchase orders (“PO”), whose terms and conditions taken with a master agreement, create the ASC 606 contracts which are generally short-term in nature. For those sales, which are not tied to a long-term agreement, we generate a PO that is subject to our standard terms and conditions. In instances where our customers acquire our goods related to government contracts, the contracts are typically subject to terms similar, or equal to, the Federal Acquisition Regulation Part 52.249-2, which contains a termination for convenience clause (“T for C”).

We recognize revenue over time for those agreements that have T for C, and where the products being produced have no alternative use. Prior to the adoption date, revenue related to these agreements was recognized when the goods were shipped, however, as a result of the adoption of ASC 606 a portion of our revenue may be earned in periods earlier than it would have been in prior years. The cumulative adjustment to retained earnings upon adoption represents those earnings, which would have been recognized in the previous year had ASC 606 been in effect during that time. As our production cycle is typically six months or less, it is expected that goods related to the revenue represented in that adjustment will be shipped and billed within the current year. Less than half of our agreements contain provisions which would require revenue to be recognized over time.

We disaggregate our revenue based on market for analytical purposes. The following table details our revenue by market for the years ended December 31, 2018 and 2017:


(In millions)	2018		2017
Consolidated Net Sales	$	2,189.1	$	1,973.3
Commercial Aerospace		1,525.0		1,409.8
Space & Defense		369.9		343.7
Industrial		294.2		219.8

Revenue recognized over time gives rise to contract assets, which represent revenue recognized but unbilled. Contract assets are included in our Consolidated Balance Sheets as a component of current assets. The activity related to contract assets for the year ended December 31, 2018 is as follows:

	Composite			Engineered
(In millions)	Materials			Products		Total
Opening adjustment - January 1, 2018	$	15.1		$	23.0	$	38.1
Net revenue billed		(2.2	)		14.6		12.4
Balance at December 31, 2018	$	12.9		$	37.6	$	50.5

Upon adoption of ASC 606, the Company recorded $38.1 million of contract assets for revenue that was unbilled at January 1, 2018 and a $33.0 million reduction in inventory representing the value of the inventory associated with the revenue recognized over time, with the offset recorded to the opening balance of retained earnings (less $1.3 million in taxes). Contract assets as of December 31, 2018, will be billed and reclassified to accounts receivable during 2019. Accounts receivable, net includes amounts billed to customers where the right to payment is unconditional.

The financial results were not significantly impacted by the adoption of ASC 606. Under ASC 606 revenue and gross margin for the year ended December 31, 2018 were higher by $12.4 million and $0.3 million, respectively, than they would have been under ASC 605. There was not a material impact on earnings per share for the 2018 year. At December 31, 2018 our inventory was $45.8 million lower as a result of ASC 606.