v3.26.3
Remaining Performance Obligations (RPO)
 9 Months Ended
Sep. 30, 2026
Revenue from Contract with Customer [Abstract]  
Remaining Performance Obligations (RPO)
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:
(dollars in millions)September 30, 2026December 31, 2025
Contract assets$19,640 $17,768 
Allowance for expected credit losses(939)(676)
Contract assets, net18,701 17,092 
Contract liabilities(21,550)(21,615)
Net contract liabilities$(2,849)$(4,523)
Contract assets, net increased $1.6 billion during the nine months ended September 30, 2026 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney and Raytheon. The allowance for expected credit losses increased $0.3 billion in the nine months ended September 30, 2026, primarily driven by a customer bankruptcy recorded at Pratt & Whitney in the third quarter of 2026, partially offset by a write-off related to unrecoverable contract assets reserved in a prior year. Contract liabilities decreased $0.1 billion during the nine months ended September 30, 2026 primarily due to sales in excess of advances received and billings on certain contracts at Pratt & Whitney and Raytheon. We recognized revenue of $2.3 billion and $8.3 billion during the quarter and nine months ended September 30, 2026 related to contract liabilities outstanding as of January 1,
2026 and recognized revenue of $1.5 billion and $6.5 billion during the quarter and nine months ended September 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 $340 billion as of September 30, 2026. Of the total RPO as of September 30, 2026, we expect approximately 25% will be recognized as revenue over the next 12 months. Approximately 40% 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.