5. Revenue
We enter into contracts to sell mainly primary aluminum to our customers. Revenue is recognized when our performance obligations with our customers are satisfied. Our obligations under the contracts are satisfied when we transfer control of our primary aluminum or alumina to our customers which is generally upon shipment or delivery to customer directed locations. The amount of consideration we receive, thus the revenue we recognize, is a function of volume delivered, market price of primary aluminum, which is based on the LME, plus regional premiums and any value-added product premiums or alumina which is based on the alumina pricing index, plus Atlantic differential.
The payment terms and conditions in our contracts vary and are not significant to our revenue. We complete an appropriate credit evaluation for each customer at contract inception. Customer payments are due in arrears and are recognized as Accounts receivable - net and due from affiliates in our Consolidated Balance Sheets.
In connection with our sales agreements with certain customers, including Glencore, we invoice the customer prior to physical shipment of goods for a majority of production generated from each of our U.S. domestic smelters. For those sales, revenue is recognized only when the customer has specifically requested such treatment and has made a commitment to purchase the product. The goods must be complete, ready for shipment and separated from other inventory with control over the goods passing to the customer. We must retain no further performance obligations.
Contract liabilities are recorded when cash payments are received or due in advance of performance. As of December 31, 2025, and 2024, amounts recorded in Due to affiliates were $31.2 million and $41.2 million, respectively.
We disaggregate our revenue by geographical region as follows:
| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, |
| Net Sales | | 2025 | | 2024 | | 2023 |
| United States | | $ | 1,734.7 | | | $ | 1,427.0 | | | $ | 1,358.6 | |
| Iceland | | 793.2 | | | 793.3 | | | 826.8 | |
| | | | | | |
| Total | | $ | 2,527.9 | | | $ | 2,220.3 | | | $ | 2,185.4 | |
The table below shows the amount of net sales to external customers for each of the Company's product categories which accounted for 10% or more of consolidated net sales in either period for the years ended December 31, 2025, 2024 and 2023.
| | | | | | | | | | | | | | | | | | | | |
| | Year ended December 31, |
| Net Sales | | 2025 | | 2024 | | 2023 |
| Aluminum | | $ | 2,244.2 | | | $ | 1,882.1 | | | $ | 1,972.6 | |
| Alumina | | 283.7 | | | 338.2 | | | 212.8 | |
| | | | | | |
| Total | | $ | 2,527.9 | | | $ | 2,220.3 | | | $ | 2,185.4 | |
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.