VSE Corporation Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Revenue Recognition

Revenue Recognition

12 Months Ended

Dec. 31, 2019

Revenue from Contract with Customer [Abstract]

Disaggregated Revenue

Our revenues are derived from contract services performed for DoD agencies or federal civilian agencies and from the delivery of products to our clients. Our customers also include various other government agencies and commercial entities.

A summary of revenues for our operating groups by customer for the year ended December 31, 2019 is as follows (in thousands):



Customer	Supply Chain Management		Aviation		Federal Services		Total
DoD	24,246		3,775		276,313		304,334
Other government	168,113		1,885		35,777		205,775
Commercial	22,161		218,886		1,471		242,518
	$	214,520	$	224,546	$	313,561	$	752,627

A summary of revenues for our operating groups by customer for the year ended December 31, 2018 is as follows (in thousands):



Customer	Supply Chain Management		Aviation		Federal Services		Total
DoD	24,280		7,387		302,827		334,494
Other government	176,200		2,172		33,746		212,118
Commercial	14,329		135,864		413		150,606
	$	214,809	$	145,423	$	336,986	$	697,218

A summary of revenues for our operating groups by contract type for the year ended December 31, 2019 is as follows (in thousands):



Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	696	$	144,600	$	145,296
Fixed-price	214,520		104,806		78,163		397,489
Time and materials	—		119,044		90,798		209,842
Total revenues	$	214,520	$	224,546	$	313,561	$	752,627

A summary of revenues for our operating groups by contract type for the year ended December 31, 2018 is as follows (in thousands):



Contract Type	Supply Chain Management		Aviation		Federal Services		Total
Cost-type	$	—	$	4,863	$	188,867	$	193,730
Fixed-price	214,809		84,600		70,669		370,078
Time and materials	—		55,960		77,450		133,410
Total revenues	$	214,809	$	145,423	$	336,986	$	697,218

Contract Balances

Billed receivables, unbilled receivables (contract assets), and contract liabilities are the results of revenue recognition, customer billing, and timing of payment receipts. Billed receivables, net, represent unconditional rights to consideration under the terms of the contract and include amounts billed and currently due from our customers. Unbilled receivables represent our right to consideration in exchange for goods or services that we have transferred to the customer prior to us having the right to payment for such goods or services. Contract liabilities are recorded when customers remit contractual cash payments in advance of us satisfying performance obligations under contractual arrangements, including those with performance obligations to be satisfied over a period of time.

We present our unbilled receivables and contract liabilities on a contract-by-contract basis. If a contract liability exists, it is netted against the unbilled receivables balance for that contract. Unbilled receivables increased from $41.3 million at December 31, 2018 to $46.3 million at December 31, 2019, primarily due to revenue recognized in excess of billings. Contract liabilities, which are included in accrued expenses and other current liabilities in our consolidated balance sheet, were $5.0 million at December 31, 2018 and $5.0 million at December 31, 2019. For the year ended December 31, 2019 and 2018, we recognized revenue of $2.2 million and $7.9 million, respectively, that was previously included in the beginning balance of contract liabilities.

Performance Obligations

Our performance obligations are satisfied over time as work progresses or at a point in time. Revenues from products and services transferred to customers over time accounted for approximately 57% of our revenues for the year ended December 31, 2019 and 2018, primarily related to revenues in our Federal Services Group and for MRO services in our Aviation Group. Revenues from products and services transferred to customers at a point in time accounted for approximately 43% of our revenues for the year ended December 31, 2019 and 2018. The majority of our revenue recognized at a point in time is for the sale of vehicle and aircraft parts in our Supply Chain Management and Aviation groups.

As of December 31, 2019, the aggregate amount of transaction prices allocated to unsatisfied or partially unsatisfied performance obligations was $213 million. Performance obligations expected to be satisfied within one year and greater than one year are 95% and 5%, respectively. We have applied the practical expedient for certain parts sales and MRO services to exclude the amount of remaining performance obligations for (i) contracts with an original expected term of one year or less or (ii) contracts for which we recognize revenue in proportion to the amount we have the right to invoice for services performed.

During the year ended December 31, 2019, revenue recognized from performance obligations satisfied in prior periods was not material.