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Contract Asset and Liabilities
 6 Months Ended
Jul. 03, 2020
Revenue from Contract with Customer [Abstract]  
Contract Asset and Liabilities
Note 2–Revenues
Remaining Performance Obligations
Remaining performance obligations represent the expected value of exercised contracts, both funded and unfunded, less revenue recognized to date. Remaining performance obligations do not include unexercised option periods and future potential task orders expected to be awarded under indefinite delivery/indefinite quantity ("IDIQ"), General Services Administration Schedule or other master agreement contract vehicles, with the exception of certain IDIQ contracts where task orders are not competitively awarded and separately priced but instead are used as a funding mechanism, and where there is a basis for estimating future revenues and funding on future task orders is anticipated.
As of July 3, 2020, we had $15.3 billion of remaining performance obligations, which are expected to be recognized as revenues in the amounts of $5.5 billion, $3.7 billion and $6.1 billion for the remainder of fiscal 2020, fiscal 2021 and fiscal 2022 and thereafter, respectively.
Disaggregation of Revenues
We disaggregate revenues by customer-type, contract-type and geographic location for each of our reportable segments. These categories represent how the nature, timing and uncertainty of revenues and cash flows are affected.
Prior year segment results have been recast for the contracts that were reassigned from the Civil reportable segment to the Defense Solutions reportable segment.
Disaggregated revenues by customer-type were as follows:
Three Months Ended July 3, 2020Six Months Ended July 3, 2020
Defense SolutionsCivilHealthTotalDefense SolutionsCivilHealthTotal
(in millions)
DoD and U.S. Intelligence Community
$1,362  $12  $123  $1,497  $2,647  $29  $247  $2,923  
Other government agencies(1)
175  615  247  1,037  383  1,159  622  2,164  
Commercial and non-U.S. customers
219  112  27  358  431  183  55  669  
Total$1,756  $739  $397  $2,892  $3,461  $1,371  $924  $5,756  

Three Months Ended June 28, 2019Six Months Ended June 28, 2019
Defense SolutionsCivilHealthTotalDefense SolutionsCivilHealthTotal
(in millions)
DoD and U.S. Intelligence Community
$1,192  $17  $113  $1,322  $2,327  $34  $237  $2,598  
Other government agencies(1)
154  564  343  1,061  310  1,075  645  2,030  
Commercial and non-U.S. customers
214  80  39  333  413  167  67  647  
Total$1,560  $661  $495  $2,716  $3,050  $1,276  $949  $5,275  
(1) Includes federal government agencies other than the DoD and U.S. Intelligence Community, as well as state and local government agencies.
The majority of our revenues are generated from U.S. government contracts, either as a prime contractor or as a subcontractor. Revenues from the U.S. government can be adversely impacted by spending caps or changes in budgetary priorities of the U.S. government, as well as delays in program start dates or the award of a contract.
Disaggregated revenues by contract-type were as follows:
Three Months Ended July 3, 2020Six Months Ended July 3, 2020
Defense SolutionsCivilHealthTotalDefense SolutionsCivilHealthTotal
(in millions)
Cost-reimbursement and fixed-price-incentive-fee
$1,105  $343  $64  $1,512  $2,199  $689  $129  $3,017  
Firm-fixed-price462  289  237  988  902  462  610  1,974  
Time-and-materials and fixed-price-level-of-effort
189  107  96  392  360  220  185  765  
Total$1,756  $739  $397  $2,892  $3,461  $1,371  $924  $5,756  

Three Months Ended June 28, 2019Six Months Ended June 28, 2019
Defense SolutionsCivilHealthTotalDefense SolutionsCivilHealthTotal
(in millions)
Cost-reimbursement and fixed-price-incentive-fee
$1,001  $401  $47  $1,449  $1,987  $768  $116  $2,871  
Firm-fixed-price411  149  328  888  775  291  597  1,663  
Time-and-materials and fixed-price-level-of-effort
148  111  120  379  288  217  236  741  
Total$1,560  $661  $495  $2,716  $3,050  $1,276  $949  $5,275  
Cost-reimbursement and fixed-price-incentive-fee contracts are generally lower risk and have lower profits. Time-and-materials ("T&M") and fixed-price-level-of-effort contracts are also lower risk but profits may vary depending on actual labor costs compared to negotiated contract billing rates. Firm-fixed-price ("FFP") contracts offer the potential for higher profits while increasing the exposure to risk of cost overruns.
Disaggregated revenues by geographic location were as follows:
Three Months Ended July 3, 2020Six Months Ended July 3, 2020
Defense SolutionsCivilHealthTotalDefense SolutionsCivilHealthTotal
(in millions)
United States
$1,560  $691  $397  $2,648  $3,073  $1,310  $924  $5,307  
International
196  48  —  244  388  61  —  449  
Total$1,756  $739  $397  $2,892  $3,461  $1,371  $924  $5,756  

Three Months Ended June 28, 2019Six Months Ended June 28, 2019
Defense SolutionsCivilHealthTotalDefense SolutionsCivilHealthTotal
(in millions)
United States
$1,360  $647  $495  $2,502  $2,664  $1,246  $949  $4,859  
International
200  14  —  214  386  30  —  416  
Total$1,560  $661  $495  $2,716  $3,050  $1,276  $949  $5,275  
Our international business operations, primarily located in Australia and the U.K., are subject to additional and different risks than our U.S. business. Failure to comply with U.S. government laws and regulations applicable to international business, such as the Foreign Corrupt Practices Act or U.S. export control regulations, could have an adverse impact on our business with the U.S. government.
In some countries, there is an increased chance for economic, legal or political changes that may adversely affect the performance of our services, sales of products or repatriation of profits. International transactions can also involve increased financial and legal risks arising from foreign exchange variability, imposition of tariffs or additional taxes and restrictive trade policies and delays or failure to collect amounts due to differing legal systems.
Revenues by customer-type, contract-type and geographic location exclude lease income of $22 million and $47 million for the three and six months ended July 3, 2020, respectively, and $12 million and $30 million for the three and six months ended June 28, 2019, respectively (see "Note 7–Leases").
Note 3–Contract Assets and Liabilities
Performance obligations are satisfied either over time as work progresses or at a point in time. FFP contracts are typically billed to the customer using milestone payments while cost-reimbursable and T&M contracts are typically billed to the customer on a monthly or bi-weekly basis as indicated by the negotiated billing terms and conditions of the contract. As a result, the timing of revenue recognition, customer billings and cash collections for each contract results in a net contract asset or liability at the end of each reporting period.
Contract assets consist of unbilled receivables, which is the amount of revenue recognized that exceeds the amount billed to the customer, where right to payment is not just subject to the passage of time. Unbilled receivables exclude amounts billable where the right to consideration is unconditional. Contract liabilities consist of deferred revenue.
The components of contract assets and contract liabilities consisted of the following:
Balance sheet line itemJuly 3,
2020		January 3,
2020
(in millions)
Contract assets - current:
Unbilled receivablesReceivables, net$803  $735  
Contract liabilities - current:
Deferred revenue
Accounts payable and accrued liabilities$401  $400  
Contract liabilities - non-current:
Deferred revenueOther long-term liabilities$20  $9  
The increase in unbilled receivables was primarily due to the timing of revenue recognized on certain contracts.
Revenue recognized for the three and six months ended July 3, 2020 of $81 million and $226 million, respectively, was included as a contract liability at January 3, 2020. Revenue recognized for the three and six months ended June 28, 2019 of $136 million and $249 million, respectively, was included as a contract liability at December 28, 2018.