Company Quick10K Filing
⚲
Carpenter Technology
Financials
Price46.65 EPS4
Shares48 P/E13
MCap2,253 P/FCF12
Net Debt526 EBIT255
TEV2,779 TEV/EBIT11
TTM 2019-09-30, in MM, except price, ratios
Filings
10-Q 2020-12-31 Filed 2021-01-29
10-Q 2020-09-30 Filed 2020-10-22
10-K 2020-06-30 Filed 2020-09-04
10-Q 2020-03-31 Filed 2020-04-30
10-Q 2019-12-31 Filed 2020-01-30
10-Q 2019-09-30 Filed 2019-10-24
10-K 2019-06-30 Filed 2019-08-29
10-Q 2019-03-31 Filed 2019-04-25
10-Q 2018-12-31 Filed 2019-01-31
10-Q 2018-09-30 Filed 2018-10-24
10-K 2018-06-30 Filed 2018-08-14
10-Q 2018-03-31 Filed 2018-04-26
10-Q 2017-12-31 Filed 2018-02-01
10-Q 2017-09-30 Filed 2017-10-26
10-K 2017-06-30 Filed 2017-08-11
10-Q 2017-03-31 Filed 2017-04-27
10-Q 2016-12-31 Filed 2017-02-02
10-Q 2016-09-30 Filed 2016-10-27
10-K 2016-06-30 Filed 2016-08-18
10-Q 2016-03-31 Filed 2016-05-02
10-Q 2015-12-31 Filed 2016-02-04
10-Q 2015-09-30 Filed 2015-10-30
10-K 2015-06-30 Filed 2015-08-25
10-Q 2015-03-31 Filed 2015-05-07
10-Q 2014-12-31 Filed 2015-02-09
10-Q 2014-09-30 Filed 2014-10-31
10-K 2014-06-30 Filed 2014-08-26
10-Q 2014-03-31 Filed 2014-05-02
10-Q 2013-12-31 Filed 2014-02-07
10-Q 2013-09-30 Filed 2013-11-08
10-K 2013-06-30 Filed 2013-08-23
10-Q 2013-03-31 Filed 2013-05-03
10-Q 2012-12-31 Filed 2013-02-08
10-Q 2012-09-30 Filed 2012-11-02
10-K 2012-06-30 Filed 2012-08-22
10-Q 2012-03-31 Filed 2012-05-04
10-Q 2011-12-31 Filed 2012-02-03
10-Q 2011-09-30 Filed 2011-11-04
10-K 2011-06-30 Filed 2011-08-24
10-Q 2011-03-31 Filed 2011-05-06
10-Q 2010-12-31 Filed 2011-02-04
10-Q 2010-09-30 Filed 2010-11-05
10-K 2010-06-30 Filed 2010-08-20
10-Q 2010-03-31 Filed 2010-05-05
10-Q 2009-12-31 Filed 2010-02-03
Reports
8-K 2021-01-28 Earnings, Exhibits
8-K 2021-01-28 Earnings, Exhibits
8-K 2020-10-22
8-K 2020-10-22
8-K 2020-10-13
8-K 2020-10-13
8-K 2020-07-30
8-K 2020-07-30
8-K 2020-07-24
8-K 2020-07-10
8-K 2020-07-06
8-K 2020-06-04
8-K 2020-04-30
8-K 2020-04-30
8-K 2020-01-30
8-K 2020-01-30
8-K 2019-10-24
8-K 2019-10-24
8-K 2019-10-08
8-K 2019-09-25
8-K 2019-08-01
8-K 2019-08-01
8-K 2019-04-25
8-K 2019-04-25
8-K 2019-04-16
8-K 2019-02-14
8-K 2019-01-31
8-K 2019-01-31
8-K 2018-10-24
8-K 2018-10-24
8-K 2018-10-24
8-K 2018-10-09
8-K 2018-08-06
8-K 2018-08-02
8-K 2018-08-02
8-K 2018-05-10
8-K 2018-04-26
8-K 2018-04-26
8-K 2018-02-26
8-K 2018-02-22
8-K 2018-02-01
8-K 2018-02-01

CRS 10Q Quarterly Report

Content
Part I - Financial Information
Item 1. Financial Statements
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II - Other Information
Item 1. Legal Proceedings
Item 1A. Risk Factors
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Item 6. Exhibits
Exhibits
EX-31.A crs-ex31ax20201231.htm
EX-31.B crs-ex31bx20201231.htm
EX-32 crs-ex32x20201231.htm

Carpenter Technology Earnings 2020-12-31

Balance SheetIncome StatementCash Flow
3.42.72.01.40.70.02012201420172020
Assets, Equity
 0.70.50.40.20.1-0.12012201420172020
Rev, G Profit, Net Income
 0.30.20.10.0-0.1-0.22012201420172020
Ops, Inv, Fin
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C.  20549
 
FORM 10-Q

(Mark One)
 
☒    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended December 31, 2020
 
or
 
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from             to            
 
Commission File Number 1-5828
 
CARPENTER TECHNOLOGY CORPORATION
(Exact name of Registrant as specified in its Charter)

Delaware 23-0458500
(State or other jurisdiction of incorporation or organization) (I.R.S. Employer Identification No.)
1735 Market Street15th Floor 19103
PhiladelphiaPennsylvania
(Address of principal executive offices) (Zip Code)
610-208-2000
(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $5 Par ValueCRS New York Stock Exchange
Title of each classTrading Symbol Name of each exchange on which registered
 
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes ☒  No ☐
 
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files.  Yes ☒  No ☐


 
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer☒ Accelerated filer☐
   
Non-accelerated filer☐(Do not check if a smaller reporting company)Smaller reporting company☐
Emerging growth company☐




If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒
 
The number of shares outstanding of the issuer’s common stock as of January 26, 2021 was 48,025,970.

Table of Contents
CARPENTER TECHNOLOGY CORPORATION
FORM 10-Q
INDEX
 
   Page
 
    
  
    
  
    
  
    
  
    
  
    
  
    
  
    
 
    
 
    
 
    
 
    
 
    
 
    
 
 
    
  

1
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
 
CARPENTER TECHNOLOGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(Unaudited)

($ in millions, except share data)December 31,
2020		June 30,
2020
ASSETS
Current assets:
Cash and cash equivalents$271.4 $193.1 
Accounts receivable, net230.3 292.3 
Inventories565.1 724.3 
Other current assets85.8 56.6 
Total current assets1,152.6 1,266.3 
Property, plant and equipment, net1,326.1 1,351.1 
Goodwill241.4 290.4 
Other intangibles, net45.4 52.1 
Deferred income taxes5.1 4.9 
Other assets273.3 262.4 
Total assets$3,043.9 $3,227.2 
LIABILITIES  
Current liabilities:  
Short-term credit agreement borrowings$— $170.0 
Accounts payable108.4 124.2 
Accrued liabilities157.4 157.9 
Total current liabilities265.8 452.1 
Long-term debt694.0 551.8 
Accrued pension liabilities375.2 399.5 
Accrued postretirement benefits138.0 137.4 
Deferred income taxes127.5 130.2 
Other liabilities110.5 110.5 
Total liabilities1,711.0 1,781.5 
Contingencies and commitments (see Note 12)
STOCKHOLDERS’ EQUITY  
Common stock — authorized 100,000,000 shares; issued 56,012,748 shares at December 31, 2020 and 56,012,748 shares at June 30, 2020; outstanding 48,024,702 shares at December 31, 2020 and 47,850,468 shares at June 30, 2020
280.1 280.1 
Capital in excess of par value317.0 321.4 
Reinvested earnings1,416.5 1,568.0 
Common stock in treasury (7,988,046 shares and 8,162,280 shares at December 31, 2020 and June 30, 2020, respectively), at cost
(317.6)(325.8)
Accumulated other comprehensive loss(363.1)(398.0)
Total stockholders' equity1,332.9 1,445.7 
Total liabilities and stockholders' equity$3,043.9 $3,227.2 

See accompanying notes to consolidated financial statements.
2
Table of Contents
CARPENTER TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 

Three Months Ended
December 31,		Six Months Ended
December 31,
 (in millions, except per share data)2020201920202019
Net sales$348.8 $573.0 $702.1 $1,158.4 
Cost of sales342.8 460.4 692.6 933.1 
Gross profit6.0 112.6 9.5 225.3 
Selling, general and administrative expenses42.2 55.3 84.5 108.2 
Restructuring and asset impairment charges— 2.3 10.0 2.3 
Goodwill impairment52.8 — 52.8 — 
Operating (loss) income(89.0)55.0 (137.8)114.8 
Interest expense, net(7.9)(5.3)(14.6)(10.7)
Debt extinguishment losses, net
— — (8.2)— 
Other income (expense), net1.3 0.8 (1.1)0.5 
(Loss) income before income taxes(95.6)50.5 (161.7)104.6 
Income tax (benefit) expense(10.7)11.7 (29.7)24.6 
Net (loss) income $(84.9)$38.8 $(132.0)$80.0 
(LOSS) EARNINGS PER COMMON SHARE:  
Basic$(1.76)$0.80 $(2.74)$1.65 
Diluted$(1.76)$0.79 $(2.74)$1.64 
WEIGHTED AVERAGE COMMON SHARES OUTSTANDING:  
Basic48.3 48.1 48.3 48.0 
Diluted48.3 48.5 48.3 48.4 
 
See accompanying notes to consolidated financial statements.
3
Table of Contents
CARPENTER TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(Unaudited)

 
Three Months Ended
December 31,		Six Months Ended
December 31,
 ($ in millions)2020201920202019
Net (loss) income $(84.9)$38.8 $(132.0)$80.0 
Other comprehensive (loss) income, net of tax    
Pension and postretirement benefits, net of tax of $(1.1), $(1.0), $(2.2) and $(2.0), respectively
3.6 3.0 7.2 6.0 
Net gain (loss) on derivative instruments, net of tax of $(1.6), $6.1, $(4.3) and $(2.4), respectively
4.9 (19.1)13.2 7.6 
Foreign currency translation gain 8.8 7.4 14.5 1.9 
Other comprehensive income (loss), net of tax17.3 (8.7)34.9 15.5 
Comprehensive (loss) income$(67.6)$30.1 $(97.1)$95.5 
 
See accompanying notes to consolidated financial statements.
4
Table of Contents
CARPENTER TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
 Six Months Ended
December 31,
($ in millions)20202019
OPERATING ACTIVITIES  
Net (loss) income $(132.0)$80.0 
Adjustments to reconcile net (loss) income to net cash provided from operating activities:  
Debt extinguishment losses, net8.2 — 
Depreciation and amortization59.6 61.0 
Non-cash restructuring and asset impairment charges8.7 1.5 
Deferred income taxes(10.1)5.5 
Net pension expense8.1 7.6 
Goodwill impairment charge52.8 — 
Share-based compensation expense5.4 8.5 
Net loss on disposals of property, plant and equipment and assets held for sale0.1 0.1 
Changes in working capital and other:  
Accounts receivable64.2 5.0 
Inventories155.8 (108.2)
Other current assets(26.8)(12.9)
Accounts payable(13.1)(1.0)
Accrued liabilities(3.1)(17.1)
Pension plan contributions(4.7)(3.6)
Other postretirement plan contributions(1.2)(1.6)
Other, net(0.3)(2.2)
Net cash provided from operating activities171.6 22.6 
INVESTING ACTIVITIES  
Purchases of property, plant, equipment and software(59.9)(94.3)
Proceeds from disposals of property, plant and equipment and assets held for sale1.5 0.1 
Proceeds from divestiture of business20.0 — 
Net cash used for investing activities(38.4)(94.2)
FINANCING ACTIVITIES  
Credit agreement borrowings— 114.6 
Credit agreement repayments— (45.7)
Net change in short-term credit agreement borrowings(170.0)30.3 
Payments on long-term debt(250.0)— 
Proceeds from issuance of long-term debt, net of offering costs395.5 — 
Payments for debt extinguishment costs, net(8.2)— 
Payments for debt issue costs(1.1)— 
Dividends paid(19.5)(19.4)
Proceeds from stock options exercised— 4.2 
Withholding tax payments on share-based compensation awards(2.2)(7.7)
Net cash (used for) provided from financing activities(55.5)76.3 
Effect of exchange rate changes on cash and cash equivalents0.6 (1.8)
INCREASE IN CASH AND CASH EQUIVALENTS78.3 2.9 
Cash and cash equivalents at beginning of period193.1 27.0 
Cash and cash equivalents at end of period$271.4 $29.9 
SUPPLEMENTAL CASH FLOW INFORMATION:  
Non-cash investing activities: Purchase of property, plant, equipment and software$8.7 $12.5 
See accompanying notes to consolidated financial statements.
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CARPENTER TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(Unaudited)

 Common StockReinvested EarningsCommon Stock in TreasuryAccumulated Other Comprehensive (Loss) IncomeTotal Equity
($ in millions, except per share data)
Par Value of $5
Capital in Excess of Par Value
Balances at September 30, 2020$280.1 $315.9 $1,511.2 $(319.3)$(380.4)$1,407.5 
Net loss  (84.9)  (84.9)
Pension and postretirement benefits gain, net of tax    3.6 3.6 
Net gain on derivative instruments, net of tax    4.9 4.9 
Foreign currency translation    8.8 8.8 
Cash Dividends:     
     Common @ $0.20 per share
  (9.8)  (9.8)
Share-based compensation plans1.1  1.7  2.8 
Balances at December 31, 2020$280.1 $317.0 $1,416.5 $(317.6)$(363.1)$1,332.9 
 
 Common StockReinvested EarningsCommon Stock in TreasuryAccumulated Other Comprehensive (Loss) IncomeTotal Equity
($ in millions, except per share data)
Par Value of $5
Capital in Excess of Par Value
Balances at September 30, 2019$279.8 $317.5 $1,636.8 $(329.5)$(327.6)$1,577.0 
Net income  38.8   38.8 
Pension and postretirement benefits gain, net of tax    3.0 3.0 
Net loss on derivative instruments, net of tax    (19.1)(19.1)
Foreign currency translation    7.4 7.4 
Cash Dividends:     
     Common @ $0.20 per share
  (9.7)  (9.7)
Share-based compensation plans3.2  1.1  4.3 
Stock options exercised0.3 1.4    1.7 
Balances at December 31, 2019$280.1 $322.1 $1,665.9 $(328.4)$(336.3)$1,603.4 
 
See accompanying notes to consolidated financial statements.















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CARPENTER TECHNOLOGY CORPORATION
CONSOLIDATED STATEMENTS OF CHANGES IN EQUITY
FOR THE THREE AND SIX MONTHS ENDED DECEMBER 31, 2020 AND 2019
(Unaudited)

 Common StockReinvested EarningsCommon Stock in TreasuryAccumulated Other Comprehensive (Loss) IncomeTotal Equity
($ in millions, except per share data)
Par Value of $5
Capital in Excess of Par Value
Balances at June 30, 2020$280.1 $321.4 $1,568.0 $(325.8)$(398.0)$1,445.7 
Net loss  (132.0)  (132.0)
Pension and postretirement benefits gain, net of tax    7.2 7.2 
Net gain on derivative instruments, net of tax    13.2 13.2 
Foreign currency translation    14.5 14.5 
Cash Dividends:     
     Common @ $0.40 per share
  (19.5)  (19.5)
Share-based compensation plans(4.4) 8.2  3.8 
Balances at December 31, 2020$280.1 $317.0 $1,416.5 $(317.6)$(363.1)$1,332.9 


 Common StockReinvested EarningsCommon Stock in TreasuryAccumulated Other Comprehensive (Loss) IncomeTotal Equity
($ in millions, except per share data)
Par Value of $5
Capital in Excess of Par Value
Balances at June 30, 2019$279.0 $320.4 $1,605.3 $(332.8)$(351.8)$1,520.1 
Net income  80.0   80.0 
Pension and postretirement benefits gain, net of tax    6.0 6.0 
Net gain on derivative instruments, net of tax    7.6 7.6 
Foreign currency translation    1.9 1.9 
Cash Dividends:     
     Common @ $0.40 per share
  (19.4)  (19.4)
Share-based compensation plans0.5 (1.9) 4.4  3.0 
Stock options exercised0.6 3.6    4.2 
Balances at December 31, 2019$280.1 $322.1 $1,665.9 $(328.4)$(336.3)$1,603.4 

See accompanying notes to consolidated financial statements.
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CARPENTER TECHNOLOGY CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
 
1.    Basis of Presentation
 
The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America for interim financial information and the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by accounting principles generally accepted in the United States of America for complete financial statements. In the opinion of management, all adjustments, consisting of normal and recurring adjustments, considered necessary for a fair statement of the results are reflected in the interim periods presented. The June 30, 2020 consolidated balance sheet data was derived from audited financial statements, but does not include all of the disclosures required by accounting principles generally accepted in the United States of America. These unaudited consolidated financial statements should be read in conjunction with the consolidated financial statements and footnotes thereto included in Carpenter Technology’s Annual Report on Form 10-K for the fiscal year ended June 30, 2020 (the “2020 Form 10-K”). Operating results for the three and six months ended December 31, 2020 are not necessarily indicative of the operating results for any future period.

Certain amounts in the consolidated statement of operations as presented in Carpenter Technology’s Quarterly Report on Form 10-Q for the quarter ended September 30, 2020 have been reclassified to conform to the current quarter presentation.

As used throughout this report, unless the context requires otherwise, the terms “Carpenter”, “Carpenter Technology”, the “Company”, “Registrant”, “Issuer”, “we” and “our” refer to Carpenter Technology Corporation.
 
2.    Restructuring and Asset Impairment Charges

Restructuring and asset impairment charges for the three and six months ended December 31, 2020 were $0.0 million and $10.0 million, respectively. There were $2.3 million of restructuring and asset impairment charges for the three and six months ended December 31, 2019.

During the first quarter ended September 30, 2020, the Company initiated a restructuring plan to consolidate certain operations within the Additive business in the Performance Engineered Products "PEP" segment. This included $8.7 million of non-cash impairment charges related primarily to certain long-lived assets and certain definite-lived intangible assets. The Company also recognized $1.3 million of charges primarily related to various personnel-related costs for severance payments, medical coverage and related items.

In the fourth quarter of fiscal year 2020, the Company approved actions to reduce overhead costs and position the Company to drive long-term, profitable growth. These actions included implementing a restructuring plan aimed at reducing fixed costs by eliminating 20 percent of global salaried positions across all business segments. The restructuring charge consisted primarily of various personnel-related costs for severance payments, medical coverage and related items. In addition, the Company also recorded non-cash asset impairment charges related to the closure of two domestic powder facilities in the PEP segment, non-cash asset impairment charges related to the decision to exit the Amega West business, and a non-cash write-down of software that will no longer be implemented at a particular business unit. At this time, the Company does not expect any additional charges related to these restructuring actions in the future.

The reserve balances and activity for restructuring charges at December 31, 2020 were as follows:

($ in millions)Reserve Balance
Reserve balance at June 30, 2020$9.5 
Restructuring charges1.3 
Cash payments(8.2)
Reserve balance at December 31, 2020$2.6 
    
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CARPENTER TECHNOLOGY CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
3.    Recent Accounting Pronouncements
 
Recently Issued Accounting Pronouncements - Adopted in current fiscal year
                
At this time there are no issued pronouncements adopted in the current fiscal year that would materially impact the Company.

Recently Issued Accounting Pronouncements - Pending Adoption

In March 2020, the FASB issued ASU 2020-04 Reference Rate Reform (Topic 848). The guidance in ASU 2020-04 provides optional expedients and exceptions for applying GAAP to contracts, hedging relationships, and other transactions affected by reference rate reform, if certain criteria are met. The amendments apply only to contracts and hedging relationships that reference LIBOR or another reference rate expected to be discontinued due to reference rate reform. These amendments are effective immediately and may be applied prospectively to contract modifications made and hedging relationships entered into or evaluated on or before December 31, 2022. The Company is currently evaluating the potential impact of the adoption of ASU 2020-04 on the consolidated financial statements.

4.    Revenue

The Company recognizes revenue in accordance with Topic 606, Revenue from Contracts. The Company applies the five-step model in the FASB’s guidance, which requires the Company to: (i) identify the contract with a customer; (ii) identify the performance obligations in the contract; (iii) determine the transaction price; (iv) allocate the transaction price to the performance obligations in the contract; and (v) recognize revenue when, or as, the Company satisfies a performance obligation.
        
The Company recognizes revenue when performance obligations under the terms of a customer purchase order or contract are satisfied. This occurs when control of the goods and services has transferred to the customer, which is generally determined when title, ownership, and risk of loss pass to the customer, all of which occurs upon shipment or delivery of the product or the service is performed. Consignment transactions are arrangements where the Company transfers product to a customer location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon usage by the customer. Service revenue is recognized as the services are performed.

Each customer purchase order or contract for goods transferred has a single performance obligation for which revenue is recognized at a point in time. The standard terms and conditions of a customer purchase order include general rights of return and product warranty provisions related to nonconforming product. Depending on the circumstances, the product is either replaced or a quality adjustment is issued. Such warranties do not represent a separate performance obligation.

Each customer purchase order or contract sets forth the transaction price for the products and services purchased under that arrangement. Some customer arrangements include variable consideration, such as volume rebates, which generally depend upon the Company’s customers meeting specified performance criteria, such as a purchasing level over a period of time. The Company exercises judgment to estimate the most likely amount of variable consideration at each reporting date.

Revenue is measured as the amount of consideration the Company expects to receive in exchange for its product. The standard payment terms are 30 days. The Company has elected to use the practical expedient that permits a Company to not adjust for the effects of a significant financing component if it expects that at the contract inception, the period between when the Company transfers a promised good or service to a customer and when the customer pays for that good or service will be one year or less.

Amounts billed to customers for shipping and handling activities to fulfill the Company’s promise to transfer the goods are included in revenues and costs incurred by the Company for the delivery of goods and are classified as cost of sales in the consolidated statement of operations. Shipping terms may vary for products shipped outside the United States depending on the mode of transportation, the country where the material is shipped and any agreements made with the customers.

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CARPENTER TECHNOLOGY CORPORATION
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
Contract liabilities are recognized when the Company has received consideration from a customer to transfer goods or services at a future point in time when the Company performs under the purchase order or contract. Contract liabilities were $5.5 million and $12.3 million at December 31, 2020 and June 30, 2020, respectively, and are included in accrued liabilities on the consolidated balance sheets.

The Company has elected to use the practical expedient that permits the omission of disclosure for remaining performance obligations which are expected to be satisfied in one year or less.  
        
Disaggregation of Revenue

The Company operates in two business segments, Specialty Alloys Operations (“SAO”) and Performance Engineered Products ("PEP"). Revenue is disaggregated within these two business segments by diversified end-use markets and by geographical location. Comparative information of the Company’s overall revenues by end-use markets and geography for the three and six months ended December 31, 2020 and 2019 were as follows:
End-Use Market DataThree Months Ended
December 31,		Six Months Ended
December 31,
($ in millions)2020201920202019
Aerospace and Defense$174.5 $348.7 $346.4 $702.0 
Medical32.4 49.0 65.2 98.0 
Transportation31.6 38.4 60.8 78.4 
Energy22.1 31.2 47.2 70.5 
Industrial and Consumer66.0 78.0 139.4 151.3 
Distribution22.2 27.7 43.1 58.2 
Consolidated net sales$348.8 $573.0 $702.1 $1,158.4