Quarterly report pursuant to Section 13 or 15(d)

Revenue

v3.10.0.1
Revenue
9 Months Ended
Sep. 30, 2018
Revenue from Contract with Customer [Abstract]  
Revenue
Revenue
On January 1, 2018, we adopted ASC Topic 606, Revenue from Contracts with Customers, using the full retrospective method. The adoption of ASC Topic 606 impacted the timing of recognition of revenue from unprocessed metal sales to toll customers. See Note 1, “Basis of Presentation and Principles of Consolidation,” for further discussion of the adoption including the impact on our 2017 financial statements.
Revenue is measured based on the consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. Revenue is recognized when performance obligations to our customers are satisfied; generally this occurs with the transfer of control to our customers. We recognize revenue when title and risk of loss are transferred to the customer, which is generally the date the product is shipped. Estimates for rebates, returns and payment discounts are recognized in the period in which the corresponding revenue is recorded based on historical experience. Our terms of shipping are generally FOB shipping point. We elect to account for the shipping costs incurred after transfer of control to the customer as fulfillment costs.
Non-toll customers
We generate revenues primarily by procuring scrap and virgin metal, converting the metal to a finished product, and charging customers a conversion fee and metal replacement fee. Non-toll customers generally assume title and risk of loss for product upon shipment, in accordance with FOB shipping terms.
Toll Customers
We also procure scrap and virgin metal for a small number of customers and sell it to them. Title to the metal and risk of loss transfers to the customer upon sale. We then hold the metal for them on our premises together with our metal. We also sell converted finished products to these customers. We charge the customer and earn a conversion fee when we transfer control of the processed metal to the customer upon shipment, which is generally FOB shipping point. We accept their metal in place of charging a metal replacement fee.
The following table presents our revenues disaggregated by market based on the customer’s primary market or the primary market for the shipped product:
 
Three Months Ended
September 30,
 
Nine Months Ended
September 30,
(in millions)
2018
 
2017
 
2018
 
2017
Building and housing
$
143.8

 
$
115.6

 
$
457.7

 
$
354.5

Automotive and transportation
84.3

 
78.5

 
262.6

 
231.7

Munitions
44.9

 
25.5

 
132.3

 
148.1

Coinage
44.4

 
35.3

 
131.1

 
107.4

Industrial machinery and equipment
35.9

 
35.1

 
113.0

 
105.2

Electronics / electrical components
36.8

 
33.2

 
113.6

 
99.7

Other
39.8

 
36.2

 
150.8

 
107.1

Net sales
$
429.9

 
$
359.4

 
$
1,361.1

 
$
1,153.7


Generally, we bill customers when product is shipped in concurrence with revenue recognition. In some instances, we receive advance payment from customers prior to shipment and revenue recognition, at which time we record a liability for the advance payment. The expected duration from time of advance payment to time of shipment is less than one year. As of September 30, 2018, we had no advance payments in Accrued Liabilities. As of December 31, 2017, we had $0.4 million of advance payments in Accrued Liabilities. There was no revenue recognized during the three months ended September 30, 2018 and 2017 that was included in Accrued Liabilities at the beginning of the quarter. Revenue recognized during the nine months ended September 30, 2018 that was included in Accrued Liabilities at the beginning of the year was $0.4 million. There was no revenue recognized during the nine months ended September 30, 2017 that was included in Accrued Liabilities at the beginning of 2017.