The defense segment recognizes revenue on its performance obligations that are satisfied over time by measuring progress using the cost-to-cost method of percentage-of-completion because it best depicts the transfer of control to the customer. Under the cost-to-cost method of percentage-of-completion, the defense segment measures progress based on the ratio of costs incurred to date to total estimated costs for the performance obligation. The Company recognizes changes in estimated sales or costs and the resulting profit or loss on a cumulative basis. Cumulative estimate-at-completion adjustments represent the cumulative effect of the changes on prior periods. If a loss is expected on a performance obligation, the complete estimated loss is recorded in the period in which the loss is identified.

There is significant judgment involved in estimating sales and costs within the defense segment. Each contract is evaluated at contract inception to identify risks and estimate revenue and costs. In performing this evaluation, the defense segment considers risks of contract performance such as technical requirements, schedule, duration and key contract dependencies. These considerations are then factored into the Company’s estimated revenue and costs. Preliminary contract estimates are subject to change throughout the duration of the contract as additional information becomes available that impacts risks and estimated revenue and costs. In addition, as contract modifications (e.g., new orders) are received, the additional units are factored into the overall contract estimate of costs and transaction price.

Contract adjustments resulted in increases within the defense segment as follows (in millions, except for per share amounts):

	Three Months Ended March 31,				Six Months Ended March 31,
	2020		2019		2020		2019
Net sales	$	15.6	$	18.0	$	24.8	$	49.6
Operating income		10.6		11.3		14.6		41.6
Net income		7.6		8.7		10.4		31.9
Diluted earnings per share	$	0.11	$	0.13	$	0.15	$	0.45

The table below presents consolidated net sales disaggregated by segment and timing of revenue recognition (in millions):

	Three Months Ended March 31, 2020
	Access equipment		Defense		Fire & emergency		Commercial		Corporate and intersegment eliminations			Total
Point in time	$	670.8	$	0.4	$	242.9	$	118.1	$	(4.3	)	$	1,027.9
Over time		22.2		614.6		12.7		118.6		0.7			768.8
	$	693.0	$	615.0	$	255.6	$	236.7	$	(3.6	)	$	1,796.7

	Three Months Ended March 31, 2019
	Access equipment		Defense		Fire & emergency		Commercial		Corporate and intersegment eliminations			Total
Point in time	$	968.9	$	1.4	$	274.3	$	148.1	$	(5.2	)	$	1,387.5
Over time		18.7		485.3		8.9		89.8		—			602.7
	$	987.6	$	486.7	$	283.2	$	237.9	$	(5.2	)	$	1,990.2

	Six Months Ended March 31, 2020
	Access equipment		Defense		Fire & emergency		Commercial		Corporate and intersegment eliminations			Total
Point in time	$	1,366.1	$	0.9	$	494.9	$	237.5	$	(7.4	)	$	2,092.0
Over time		44.8		1,107.2		23.1		223.4		1.3			1,399.8
	$	1,410.9	$	1,108.1	$	518.0	$	460.9	$	(6.1	)	$	3,491.8

	Six Months Ended March 31, 2019
	Access equipment		Defense		Fire & emergency		Commercial		Corporate and intersegment eliminations			Total
Point in time	$	1,776.7	$	1.7	$	565.2	$	269.3	$	(10.1	)	$	2,602.8
Over time		37.4		949.1		13.5		190.8		—			1,190.8
	$	1,814.1	$	950.8	$	578.7	$	460.1	$	(10.1	)	$	3,793.6

See Note 20 of the Notes to Condensed Consolidated Financial Statements for further disaggregated sales information.

The Company is generally entitled to bill its customers upon satisfaction of its performance obligations, with the exception of its long-term contracts in the defense segment which typically allow for billing upon acceptance of the finished good, advance payments from customers primarily within the fire & emergency segment and extended warranties that are usually billed in advance of the warranty coverage period. Customer payment is usually received shortly after billing and payment terms generally do not exceed one year. With the exception of the fire & emergency segment, the Company’s contracts typically do not contain a significant financing component. In the fire & emergency segment, customers earn interest on customer advances at a rate determined in a separate financing transaction between the fire & emergency segment and the customer at contract inception. Interest due on customer advances of $4.0 million and $7.2 million was recorded in “Interest expense” in the Condensed Consolidated Statements of Income for the three and six months ended March 31, 2020, respectively, and $3.7 million and $7.3 million for the three and six months ended March 31, 2019, respectively.

The timing of billing does not always match the timing of revenue recognition. In instances where a customer pays consideration in advance or when the Company is entitled to bill a customer in advance of recognizing the related revenue, the Company records a contract liability within “Customer advances”, “Other current liabilities” or “Other long-term liabilities” in the Condensed Consolidated Balance Sheet. Total contract liabilities were $701.0 million as of March 31, 2020, of which $593.0 million, $56.7 million and $51.3 million was included in “Customer advances”, “Other current liabilities” and “Other long-term liabilities”, respectively. Total contract liabilities were $512.5 million as of September 30, 2019, of which $382.0 million, $78.2 million and $52.3 million was included in “Customer advances”, “Other current liabilities” and “Other long-term liabilities”, respectively. The Company reduces contract liabilities when revenue is recognized. The Company recognized $117.7 million and $290.6 million of revenue that was recorded as a contract liability as of the beginning of the period during the three and six months ended March 31, 2020. The Company recognized $237.4 million and $473.4 million of revenue that was recorded as a contract liability as of the beginning of the period during the three and six months ended March 31, 2019.

In instances where the Company recognizes revenue prior to having an unconditional right to payment, the Company records a contract asset within “Unbilled receivables, net” in the Condensed Consolidated Balance Sheet. The Company reduces contract assets when the Company has an unconditional right to payment. The Company periodically assesses its contract assets for impairment. Contract assets and liabilities are determined on a net basis for each contract. The Company did not record any impairment losses on contracts from customers during the three and six months ended March 31, 2020 and 2019, respectively. See Note 8 of the Notes to Condensed Consolidated Financial Statements for additional information on the Company’s receivable balances.

The Company offers a variety of service-type warranties, including optionally priced extended warranty programs. Outstanding balances related to service-type warranties are included within contract liabilities disclosed above. Revenue related to service warranties is deferred until after the expiration of the standard warranty period. The revenue is then recognized in income over the term of the extended warranty period in proportion to the costs that are expected to be incurred. Changes in the Company’s service-type warranties were as follows (in millions):

	Six Months Ended March 31,
	2020			2019
Balance at beginning of period	$	68.2		$	30.7
Adoption of ASC 606		—			35.7
Deferred revenue for new service warranties		11.8			12.8
Amortization of deferred revenue		(14.2	)		(12.5	)
Changes in liability for pre-existing warranties, net		—			0.1
Foreign currency translation		0.1			(0.3	)
Balance at end of period	$	65.9		$	66.5

Classification of service-type warranties in the Condensed Consolidated Balance Sheets consisted of the following (in millions):

	March 31,		September 30,
	2020		2019
Other current liabilities	$	26.4	$	27.8
Other long-term liabilities		39.5		40.4
	$	65.9	$	68.2

As of March 31, 2020, the Company had unsatisfied performance obligations for contracts with an original duration greater than one year totaling $4.96 billion, of which $1.87 billion is expected to be satisfied and revenue recognized in the remaining six months of fiscal 2020, $2.71 billion is expected to be satisfied and revenue recognized in fiscal 2021 and $380.1 million is expected to be satisfied and revenue recognized beyond fiscal 2021.