Quarterly report pursuant to Section 13 or 15(d)

Revenue

v3.20.2
Revenue
 6 Months Ended
Jun. 30, 2020
Revenue from Contract with Customer [Abstract]  
Revenue Revenue

Disaggregated Revenue
Our revenues are derived from contract services performed for the United States Department of Defense ("DoD") agencies or federal civilian agencies and from the delivery of products to our customers. Our customers also include various other government agencies and commercial clients.

A summary of revenues for our operating segments by customer for the three and six months ended June 30, 2020 are as follows (in thousands):
 
 
Three months ended June 30, 2020
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
DoD
 
$
837

 
$
5,095

 
$
58,955

 
$
64,887

Other government
 
214

 
57,602

 
5,850

 
63,666

Commercial
 
31,170

 
8,525

 
467

 
40,162

 
 
$
32,221

 
$
71,222

 
$
65,272

 
$
168,715


 
 
Six months ended June 30, 2020
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
DoD
 
$
837

 
$
9,662

 
$
118,522

 
$
129,021

Other government
 
244

 
97,417

 
11,995

 
109,656

Commercial
 
89,220

 
17,347

 
889

 
107,456

 
 
$
90,301

 
$
124,426

 
$
131,406

 
$
346,133


A summary of revenues for our operating segments by customer for the three and six months ended June 30, 2019 are as follows (in thousands):
 
 
Three months ended June 30, 2019
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
DoD
 
$
260

 
$
6,461

 
$
68,359

 
$
75,080

Other government
 
651

 
42,254

 
11,950

 
54,855

Commercial
 
54,086

 
5,090

 
—

 
59,176

 
 
$
54,997

 
$
53,805

 
$
80,309

 
$
189,111



 
 
Six months ended June 30, 2019
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
DoD
 
$
1,155

 
$
11,303

 
$
125,323

 
$
137,781

Other government
 
651

 
85,136

 
22,727

 
108,514

Commercial
 
102,561

 
9,070

 
1,104

 
112,735

 
 
$
104,367

 
$
105,509

 
$
149,154

 
$
359,030


We changed our disaggregated revenue by type presentation below in the first quarter of 2020 to better align with our operating segments. Revenues from our Aviation and Fleet segment are derived from repair and distribution services primarily through shorter term purchase orders from customers. Our Federal and Defense segment's revenue results from services provided on longer term contracts, including cost plus, fixed price and time and materials contract types. This change provides a clearer picture of the nature
of each segment's contractual arrangements, how revenues derived from those contracts are affected by economic factors, and underlying performance trends impacting each segment. Additionally, the presentation is more in-line with how each segments' results are evaluated by our Chief Executive Officer in deciding how to allocate resources and evaluate performance.

The change in disaggregated revenue presentation did not result in any changes in our reported segments and had no effect on the reported results of operations.

A summary of revenues by type and operating segment for the three and six months ended June 30, 2020 is as follows (in thousands):

 
 
Three months ended June 30, 2020
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
Repair
 
$
16,848

 
$
—

 
$
—

 
$
16,848

Distribution
 
15,373

 
71,222

 
—

 
86,595

Cost Plus Contract
 
—

 
—

 
23,307

 
23,307

Fixed Price Contract
 
—

 
—

 
36,079

 
36,079

T&M Contract
 
—

 
—

 
5,886

 
5,886

     Total
 
$
32,221

 
$
71,222

 
$
65,272

 
$
168,715


 
 
Six months ended June 30, 2020
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
Repair
 
$
49,656

 
$
—

 
$
—

 
$
49,656

Distribution
 
40,645

 
124,426

 
—

 
165,071

Cost Plus Contract
 
—

 
—

 
42,988

 
42,988

Fixed Price Contract
 
—

 
—

 
74,995

 
74,995

T&M Contract
 
—

 
—

 
13,423

 
13,423

     Total
 
$
90,301

 
$
124,426

 
$
131,406

 
$
346,133


A summary of revenues by type and operating segment for the three and six months ended June 30, 2019 is as follows (in thousands):
 
 
Three months ended June 30, 2019
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
Repair
 
$
29,560

 
$
—

 
$
—

 
$
29,560

Distribution
 
25,437

 
53,805

 
—

 
79,242

Cost Plus Contract
 
—

 
—

 
33,496

 
33,496

Fixed Price Contract
 
—

 
—

 
19,153

 
19,153

T&M Contract
 
—

 
—

 
27,660

 
27,660

     Total
 
$
54,997

 
$
53,805

 
$
80,309

 
$
189,111


 
 
Six months ended June 30, 2019
 
 
Aviation
 
Fleet
 
Federal and Defense
 
Total
Repair
 
$
54,994

 
$
—

 
$
—

 
$
54,994

Distribution
 
49,373

 
105,509

 
—

 
154,882

Cost Plus Contract
 
—

 
—

 
61,336

 
61,336

Fixed Price Contract
 
—

 
—

 
39,020

 
39,020

T&M Contract
 
—

 
—

 
48,798

 
48,798

     Total
 
$
104,367

 
$
105,509

 
$
149,154

 
$
359,030


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 related 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 decreased from $46.3 million at December 31, 2019 to $41.9 million at June 30, 2020, primarily due to the billing of our customers in excess of revenue recognized as performance obligations were satisfied. Contract liabilities, which are included in accrued expenses and other current liabilities in our consolidated balance sheet, increased from $5.0 million at December 31, 2019 to $10.9 million at June 30, 2020, primarily due to advance payments received in excess of revenue recognized. For the six months ended June 30, 2020 and June 30, 2019, we recognized revenue that was previously included in the beginning balance of contract liabilities of $1.5 million and $2.0 million, respectively.
 
Performance Obligations

Our performance obligations are satisfied either at a point in time or over time as work progresses. The majority of our revenue recognized at a point in time is for the sale of vehicle and aircraft parts in our Fleet and Aviation segments. Revenues from products and services transferred to customers at a point in time accounted for approximately 50% of our revenues for the three and six months ended June 30, 2020 and 43% of our revenues for the three and six months ended June 30, 2019. Revenues from products and services transferred to customers over time accounted for approximately 50% of our revenues for the three and six months ended June 30, 2020 and 57% of our revenues for the three and six months ended June 30, 2019, primarily related to revenues in our Federal and Defense segment and repair services in our Aviation segment.
As of June 30, 2020, the aggregate amount of transaction prices allocated to unsatisfied or partially unsatisfied performance obligations was $171 million. Performance obligations expected to be satisfied within one year and greater than one year are 97% and 3%, 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 six months ended June 30, 2020 and June 30, 2019, revenue recognized from performance obligations satisfied in prior periods was not material.