Revenue From Contracts with Customers | Note 2. Revenue From Contracts with Customers For a detailed discussion of our revenue recognition policy, refer to the discussion in Note 1, Summary of Operations and Significant Accounting Policies – Revenue Recognition The following tables represents the disaggregation of our net sales revenue by product for each of our reportable segments: Three Months Ended September 30, 2020 U.S. Asia Mexico EMEAI Total (in thousands) Wind blade sales $ 37,272 $ 158,120 $ 153,575 $ 101,168 $ 450,135 Precision molding and assembly systems sales — 4,451 6,090 — 10,541 Transportation sales 6,206 — 801 — 7,007 Other sales 3,321 887 1,097 1,125 6,430 Total net sales $ 46,799 $ 163,458 $ 161,563 $ 102,293 $ 474,113 Three Months Ended September 30, 2019 U.S. Asia Mexico EMEAI Total (in thousands) Wind blade sales $ 25,857 $ 98,406 $ 111,855 $ 116,084 $ 352,202 Precision molding and assembly systems sales 1,479 8,915 4,655 — 15,049 Transportation sales 8,061 — — — 8,061 Other sales 5,246 793 1,180 1,305 8,524 Total net sales $ 40,643 $ 108,114 $ 117,690 $ 117,389 $ 383,836 Nine Months Ended September 30, 2020 U.S. Asia Mexico EMEAI Total (in thousands) Wind blade sales $ 99,514 $ 385,536 $ 346,954 $ 302,531 $ 1,134,535 Precision molding and assembly systems sales — 13,088 11,110 — 24,198 Transportation sales 27,424 — 1,374 — 28,798 Other sales 9,371 1,889 3,795 1,980 17,035 Total net sales $ 136,309 $ 400,513 $ 363,233 $ 304,511 $ 1,204,566 Nine Months Ended September 30, 2019 U.S. Asia Mexico EMEAI Total (in thousands) Wind blade sales $ 84,328 $ 238,947 $ 278,685 $ 328,956 $ 930,916 Precision molding and assembly systems sales 2,845 20,856 15,475 — 39,176 Transportation sales 20,717 — — — 20,717 Other sales 14,239 1,728 3,557 4,054 23,578 Total net sales $ 122,129 $ 261,531 $ 297,717 $ 333,010 $ 1,014,387 Most of our net sales are made directly to our customers, primarily large multi-national wind turbine manufacturers, under our long-term contracts which are typically five years in length. Contract Assets and Liabilities Contract assets consist of the amount of revenue recognized over time for performance obligations in production where control has transferred to the customer but the contract does not yet allow for the customer to be billed. Typically, customers are billed when the product finishes production and meets the technical specifications contained in the contract. The time it takes to produce a single blade is typically between 5 to 7 days. The time it takes to produce a mold is typically between 3 to 6 months. The contract assets are recorded as current assets in the condensed consolidated balance sheets. Contract liabilities consist of advance payments in excess of revenue earned. These amounts were historically recorded as customer deposits which usually relate to progress payments received as precision molding and assembly systems were being manufactured. The contract liabilities are recorded as current liabilities in the condensed consolidated balance sheets and are reduced as we record revenue over time. These contract assets and liabilities are reported on the condensed consolidated balance sheets net on a contract-by-contract basis at the end of each reporting period, as demonstrated in the table below. Contract assets and contract liabilities consisted of the following: September 30, December 31, 2020 2019 $ Change (in thousands) Gross contract assets $ 214,586 $ 170,973 $ 43,613 Less: reclassification from contract liabilities (3,017 ) (4,458 ) 1,441 Contract assets $ 211,569 $ 166,515 $ 45,054 September 30, December 31, 2020 2019 $ Change (in thousands) Gross contract liabilities $ 5,027 $ 7,466 $ (2,439 ) Less: reclassification to contract assets (3,017 ) (4,458 ) 1,441 Contract liabilities $ 2,010 $ 3,008 $ (998 ) Contract assets increased by $45.1 million from December 31, 2019 to September 30, 2020 due to incremental unbilled production, which includes materials acquired under long-term contracts, during the nine months ended September 30, 2020. Contracts liabilities decreased by $1.0 million from December 31, 2019 to September 30, 2020 due to the revenue earned related to precision molding and assembly systems and wind blades being produced exceeding the amounts billed to customers in the nine months ended September 30, 2020. For the three and nine months ended September 30, 2020, we recognized no revenue and $3.0 million of revenue, respectively, related to precision molding and assembly systems and wind blades, which were included in the corresponding contract liability balance at the beginning of the period. Performance Obligations Remaining performance obligations represent the transaction price for which work has not been performed and excludes any unexercised contract options. The transaction price includes estimated variable consideration as determined based on the estimated production output within the range of the contractual guaranteed minimum volume obligations and production capacity. As of September 30, 2020, the aggregate amount of the transaction price allocated to the remaining performance obligations to be satisfied in future periods was approximately $3.8 billion. We estimate that we will recognize these remaining performance obligations as revenue as follows: $ % of Total (in thousands) Year Ending December 31, Remainder of 2020 $ 448,348 11.9 % 2021 1,609,674 42.5 % 2022 1,095,947 29.0 % 2023 554,245 14.6 % 2024 75,954 2.0 % Total remaining performance obligations $ 3,784,168 100.0 % The transaction price allocated to the remaining performance obligations excludes approximately $178.0 million of variable consideration over the contractual guaranteed minimum volume obligations under current contracts with customers which has been constrained primarily due to uncertainty associated with production volume during the remaining term of the agreements. We estimate the constraint will be resolved in subsequent periods when our customers provide additional information relevant to forecasted future production. For the three and nine months ended September 30, 2020, net revenue recognized from our performance obligations satisfied in previous periods increased by $14.8 million and $15.4 million, respectively, as compared to decreases of $3.5 million and $16.0 million, respectively, in the same periods of 2019. The current year increase primarily related to changes in certain of our estimated total contract values and related direct costs to complete the performance obligations. |