Contract Assets and Liabilities |
6 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Jun. 30, 2026 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Contract Assets and Liabilities | Note 7: Contract Assets and Liabilities Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billings. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. Total contract assets and contract liabilities were as follows:
Contract assets, net increased $1.9 billion during the six months ended June 30, 2026 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney. The allowance for expected credit losses decreased $0.3 billion in the six months ended June 30, 2026, primarily driven by a write-off related to unrecoverable contract assets reserved in a prior year. Contract liabilities increased $1.1 billion during the six months ended June 30, 2026 primarily due to advances received and billings in excess of sales on certain contracts at Pratt & Whitney and Raytheon. We recognized revenue of $2.4 billion and $6.0 billion during the quarter and six months ended June 30, 2026 related to contract liabilities outstanding as of January 1, 2026 and recognized revenue of $2.0 billion and $5.0 billion during the quarter and six months ended June 30, 2025, related to contract liabilities outstanding as of January 1, 2025. Note 19: Remaining Performance Obligations (RPO) RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. Total RPO was approximately $289 billion as of June 30, 2026. Of the total RPO as of June 30, 2026, we expect approximately 25% will be recognized as revenue over the next 12 months. Approximately 45% of our RPO relates to long-term commercial aerospace maintenance contracts at Pratt & Whitney, which are generally expected to be realized over a span of up to 20 years.
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