v3.26.3
CONTRACT AND OTHER DEFERRED ASSETS, CONTRACT LIABILITIES AND DEFERRED INCOME & PROGRESS COLLECTIONS
 9 Months Ended
Sep. 30, 2026
Contractors [Abstract]  
CONTRACT AND OTHER DEFERRED ASSETS, CONTRACT LIABILITIES AND DEFERRED INCOME & PROGRESS COLLECTIONS CONTRACT AND OTHER DEFERRED ASSETS, CONTRACT LIABILITIES AND DEFERRED INCOME & PROGRESS COLLECTIONS
Contract assets (liabilities) and other deferred assets (income), on a net basis, decreased the net liability position by $164 million for the nine months ended September 30, 2026, primarily due to a decrease in noncurrent deferred income of $89 million and an increase in customer advances and other in noncurrent assets of $78 million. In aggregate, the net liability for long-term service agreements decreased, primarily due to revenue recognized of $8,437 million, partially offset by billings of $8,291 million and net unfavorable changes in estimated profitability of $60 million driven by quarterly updates to contract margins, including a reversal of $139 million of tariff-related charges taken in the nine months ended September 30, 2025, primarily in CES. Revenue recognized for contracts included in a liability position at the beginning of the year were $7,229 million and $5,884 million for the nine months ended September 30, 2026 and 2025, respectively.

CONTRACT ASSETS, LIABILITIES AND OTHER DEFERRED ASSETS AND INCOMESeptember 30, 2026December 31, 2025
Long-term service agreements$2,836 $2,792 
Equipment and other service agreements691 719 
Current contract assets$3,527 $3,511 
Nonrecurring engineering costs(a)$2,413 $2,423 
Customer advances and other(b)2,575 2,497 
Contract and other deferred assets4,988 4,920 
Total contract and other deferred assets$8,515 $8,431 
Long-term service agreement liabilities$10,000 $10,016 
Current deferred income342 317 
Contract liabilities and current deferred income$10,342 $10,333 
Non-current deferred income976 1,065 
Total contract liabilities and deferred income$11,318 $11,398 
Contract assets (liabilities) and other deferred assets (income)$(2,803)$(2,966)
(a) Includes contract fulfillment costs for engineering and development incurred prior to production for equipment production contracts, primarily within our Defense & Propulsion Technologies (DPT) segment, which are amortized ratably over each unit produced. We assess the recoverability of these costs and if we determine the costs are no longer probable of recovery, the asset is impaired. The most significant program relates to DPT contracts for the Boeing 777X aircraft, which will be amortized once entered into service.
(b) Includes amounts due from customers within our CES segment for the sales of engines, spare parts and services, which we collect through fixed or usage-based billings from the sale of spare parts and servicing of equipment under long-term service agreements.

Progress collections increased $540 million in the nine months ended September 30, 2026, primarily due to collections received in excess of liquidations at CES.