Revenue From Contracts With Customers

9 Months Ended

Sep. 30, 2019

Revenue from Contract with Customer [Abstract]

Note 9 — Revenue from Contracts with Customers

Disaggregation of Revenue

Our revenues are derived primarily from short-term and long-term service contracts with customers. Our service contracts generally contain either provisions for specific time, material and equipment charges that are billed in accordance with the terms of such contracts (dayrate contracts) or lump sum payment provisions (lump sum contracts). We record revenues net of taxes collected from customers and remitted to governmental authorities. The following table provides information about disaggregated revenue by contract duration (in thousands):



	Well Intervention		Robotics		Production Facilities		Intercompany Eliminations ⁽¹⁾			Total Revenue
Three months ended September 30, 2019
Short-term	$	53,018	$	26,809	$	—	$	—		$	79,827
Long-term ⁽²⁾	117,188		25,100		13,777		(23,283		)	132,782
Total	$	170,206	$	51,909	$	13,777	$	(23,283	)	$	212,609

Three months ended September 30, 2018
Short-term	$	39,548	$	29,877	$	—	$	—		$	69,425
Long-term ⁽²⁾	114,893		24,463		15,877		(12,083		)	143,150
Total	$	154,441	$	54,340	$	15,877	$	(12,083	)	$	212,575


Nine months ended September 30, 2019
Short-term	$	145,611	$	80,440	$	—	$	—		$	226,051
Long-term ⁽²⁾	305,900		55,956		44,651		(51,398		)	355,109
Total	$	451,511	$	136,396	$	44,651	$	(51,398	)	$	581,160

Nine months ended September 30, 2018
Short-term	$	143,510	$	74,050	$	—	$	—		$	217,560
Long-term ⁽²⁾	302,259		46,519		48,541		(33,417		)	363,902
Total	$	445,769	$	120,569	$	48,541	$	(33,417	)	$	581,462


(1)	Intercompany revenues among our business segments are under agreements that are considered long-term.


(2)	Contracts are classified as long-term if all or part of the contract is to be performed over a period extending beyond 12 months from the effective date of the contract. Long-term contracts may include multi-year agreements whereby the commitment for services in any one year may be short in duration.

Contract Balances

Accounts receivable are recognized when our right to consideration becomes unconditional. Accounts receivable that have been billed to customers are recorded as trade accounts receivable while accounts receivable that have not been billed to customers are recorded as unbilled accounts receivable.

Contract assets are rights to consideration in exchange for services that we have provided to a customer when those rights are conditioned on our future performance. Contract assets generally consist of (i) demobilization fees recognized ratably over the contract term but invoiced upon completion of the demobilization activities and (ii) revenue recognized in excess of the amount billed to the customer for lump sum contracts when the cost-to-cost method of revenue recognition is utilized. Contract assets are reflected in “Other current assets” on the accompanying condensed consolidated balance sheets (Note 3). Contract assets were $0.6 million at September 30, 2019 and $5.8 million at December 31, 2018. We incurred no impairment losses on our accounts receivable and contract assets for the three- and nine-month periods ended September 30, 2019 and 2018.

Contract liabilities are obligations to provide future services to a customer for which we have already received, or have the unconditional right to receive, the consideration for those services from the customer. Contract liabilities may consist of (i) advance payments received from customers, including upfront mobilization fees allocated to a single performance obligation and recognized ratably over the contract term and/or (ii) amounts billed to the customer in excess of revenue recognized for lump sum contracts when the cost-to-cost method of revenue recognition is utilized. Contract liabilities are reflected as “Deferred revenue,” a component of “Accrued liabilities” and “Other non-current liabilities” on the accompanying condensed consolidated balance sheets (Note 3). Contract liabilities totaled $20.0 million at September 30, 2019 and $25.9 million at December 31, 2018. Revenue recognized for the three- and nine-month periods ended September 30, 2019 included $4.0 million and $7.4 million, respectively, that were included in the contract liability balance at the beginning of each period. Revenue recognized for the three- and nine-month periods ended September 30, 2018 included $7.4 million and $10.8 million, respectively, that were included in the contract liability balance at the beginning of each period.

We report the net contract asset or contract liability position on a contract-by-contract basis at the end of each reporting period.

Performance Obligations

As of September 30, 2019, $833.8 million related to unsatisfied performance obligations was expected to be recognized as revenue in the future, with $114.5 million in 2019, $443.2 million in 2020 and $276.1 million in 2021 and thereafter. These amounts include fixed consideration and estimated variable consideration for both wholly and partially unsatisfied performance obligations, including mobilization and demobilization fees. These amounts are derived from the specific terms of our contracts, and the expected timing for revenue recognition is based on the estimated start date and duration of each contract according to the information known at September 30, 2019.

For the three- and nine-month periods ended September 30, 2019 and 2018, revenues recognized from performance obligations satisfied (or partially satisfied) in previous periods were immaterial.

Contract Fulfillment Costs

Contract fulfillment costs consist of costs incurred in fulfilling a contract with a customer. Our contract fulfillment costs primarily relate to costs incurred for mobilization of personnel and equipment at the beginning of a contract and costs incurred for demobilization at the end of a contract. Mobilization costs are deferred and amortized ratably over the contract term (including anticipated contract extensions) based on the pattern of the provision of services to which the contract fulfillment costs relate. Demobilization costs are recognized when incurred at the end of the contract. Deferred contract costs are reflected as “Deferred costs,” a component of “Other current assets” and “Other assets, net” on the accompanying condensed consolidated balance sheets (Note 3). Our deferred contract costs totaled $47.1 million at September 30, 2019 and $65.9 million at December 31, 2018. For the three- and nine-month periods ended September 30, 2019, we recorded $7.7 million and $23.6 million, respectively, related to amortization of deferred contract costs existing at the beginning of each period. For the three- and nine-month periods ended September 30, 2018, we recorded $8.5 million and $25.6 million, respectively, related to amortization of deferred contract costs existing at the beginning of each period. There were no associated impairment losses for any period presented.

For additional information regarding revenue recognition, see Notes 2 and 10 to our 2018 Form 10-K.