Revenues | Revenues The outstanding contract asset and liability accounts were as follows: 2020 2019 (In thousands) Contract assets—January 1 $ 73,039 $ 58,266 Contract assets – June 30 67,804 82,063 Change in contract assets – (decrease) increase (5,235) 23,797 Contract liabilities – January 1 167,306 146,162 Contract liabilities – June 30 199,967 151,447 Change in contract liabilities – increase (32,661) (5,285) Net change $ (37,896) $ 18,512 The net change for the six months ended June 30, 2020 was primarily driven by the receipt of advance payments from customers exceeding the recognition of revenue as performance obligations were satisfied prior to billing. For the six months ended June 30, 2020 and 2019, the Company recognized revenue of $105.3 million and $110.3 million, respectively, that was previously included in the beginning balance of contract liabilities. Contract assets are reported as a component of Other current assets in the consolidated balance sheet. At June 30, 2020 and December 31, 2019, $19.4 million and $10.6 million of Customer advanced payments (contract liabilities), respectively, were recorded in Other long-term liabilities in the consolidated balance sheets. Applying the practical expedient available under ASC 606, the remaining performance obligations exceeding one year as of June 30, 2020 and December 31, 2019 were $340.0 million and $233.3 million, respectively. Remaining performance obligations represent the transaction price of firm, non-cancelable orders, with expected delivery dates to customers greater than one year from the balance sheet date, for which the performance obligation is unsatisfied or partially unsatisfied. These performance obligations will be substantially satisfied within two Geographic Areas Information about the Company’s operations in different geographic areas for the three and six months ended June 30, 2020 is shown below. Net sales were attributed to geographic areas based on the location of the customer. Three months ended June 30, 2020 Six months ended June 30, 2020 EIG EMG Total EIG EMG Total (In thousands) United States $ 338,757 $ 189,369 $ 528,126 $ 745,302 $ 424,058 $ 1,169,360 International (1) : United Kingdom 13,427 22,752 36,179 28,220 55,890 84,110 European Union countries 79,901 79,327 159,228 185,577 168,093 353,670 Asia 161,190 47,536 208,726 325,935 91,366 417,301 Other foreign countries 54,607 25,056 79,663 137,073 52,626 189,699 Total international 309,125 174,671 483,796 676,805 367,975 1,044,780 Consolidated net sales $ 647,882 $ 364,040 $ 1,011,922 $ 1,422,107 $ 792,033 $ 2,214,140 ________________ (1) Includes U.S. export sales of $563.1 million and $868.4 million for the three and six months ended June 30, 2020, respectively. Information about the Company’s operations in different geographic areas for the three and six months ended June 30, 2019 is shown below. Net sales were attributed to geographic areas based on the location of the customer. Three months ended June 30, 2019 Six months ended June 30, 2019 EIG EMG Total EIG EMG Total (In thousands) United States $ 425,543 $ 250,904 $ 676,447 $ 828,935 $ 511,658 $ 1,340,593 International (1) : United Kingdom 12,920 32,450 45,370 28,347 66,338 94,685 European Union countries 100,835 103,362 204,197 203,620 209,781 413,401 Asia 185,287 48,577 233,864 379,134 95,688 474,822 Other foreign countries 95,662 33,872 129,534 187,122 66,480 253,602 Total international 394,704 218,261 612,965 798,223 438,287 1,236,510 Consolidated net sales $ 820,247 $ 469,165 $ 1,289,412 $ 1,627,158 $ 949,945 $ 2,577,103 ______________ (1) Includes U.S. export sales of $322.1 million and $647.5 million for the three and six months ended June 30, 2019, respectively. Major Products and Services The Company’s major products and services in the reportable segments were as follows: Three months ended June 30, 2020 Six months ended June 30, 2020 EIG EMG Total EIG EMG Total (In thousands) Process and analytical instrumentation $ 483,540 $ — $ 483,540 $ 1,031,980 $ — $ 1,031,980 Aerospace and power 164,342 104,133 268,475 390,127 231,384 621,511 Automation and engineered solutions — 259,907 259,907 — 560,649 560,649 Consolidated net sales $ 647,882 $ 364,040 $ 1,011,922 $ 1,422,107 $ 792,033 $ 2,214,140 Three months ended June 30, 2019 Six months ended June 30, 2019 EIG EMG Total EIG EMG Total (In thousands) Process and analytical instrumentation $ 583,938 $ — $ 583,938 $ 1,161,278 $ — $ 1,161,278 Aerospace and power 236,309 120,392 356,701 465,880 239,270 705,150 Automation and engineered solutions — 348,773 348,773 — 710,675 710,675 Consolidated net sales $ 820,247 $ 469,165 $ 1,289,412 $ 1,627,158 $ 949,945 $ 2,577,103 Timing of Revenue Recognition Three months ended June 30, 2020 Six months ended June 30, 2020 EIG EMG Total EIG EMG Total (In thousands) Products transferred at a point in time $ 525,168 $ 324,502 $ 849,670 $ 1,158,708 $ 703,561 $ 1,862,269 Products and services transferred over time 122,714 39,538 162,252 263,399 88,472 351,871 Consolidated net sales $ 647,882 $ 364,040 $ 1,011,922 $ 1,422,107 $ 792,033 $ 2,214,140 Three months ended June 30, 2019 Six months ended June 30, 2019 EIG EMG Total EIG EMG Total (In thousands) Products transferred at a point in time $ 654,155 $ 434,175 $ 1,088,330 $ 1,331,988 $ 869,780 $ 2,201,768 Products and services transferred over time 166,092 34,990 201,082 295,170 80,165 375,335 Consolidated net sales $ 820,247 $ 469,165 $ 1,289,412 $ 1,627,158 $ 949,945 $ 2,577,103 Product Warranties The Company provides limited warranties in connection with the sale of its products. The warranty periods for products sold vary among the Company’s operations, but the majority do not exceed one year. The Company calculates its warranty expense provision based on its historical warranty experience and adjustments are made periodically to reflect actual warranty expenses. Product warranty obligations are reported as a component of Accrued liabilities and other in the consolidated balance sheet. Changes in the accrued product warranty obligation were as follows: Six Months Ended June 30, 2020 2019 (In thousands) Balance at the beginning of the period $ 27,611 $ 23,482 Accruals for warranties issued during the period 6,874 8,196 Settlements made during the period (7,605) (9,275) Warranty accruals related to acquired businesses and other during the period 326 (89) Balance at the end of the period $ 27,206 $ 22,314 Accounts Receivable The Company maintains allowances for estimated losses resulting from the inability of customers to meet their financial obligations to the Company. The Company recognizes an allowance for doubtful accounts, on all accounts receivable, which considers the length of time receivables are past due, customers’ billing exposure, ability to pay, and contract terms. The Company also considers general and market business conditions, country, and political risk. Balances are written off when determined to be uncollectible. At June 30, 2020, the Company recorded $620.2 million of accounts and notes receivable, net of allowances of $11.7 million. Changes in the allowance were not material for the three and six months ended June 30, 2020. |