CONTRACT AND OTHER DEFERRED ASSETS & PROGRESS COLLECTIONS AND DEFERRED INCOME

6 Months Ended

Jun. 30, 2023

Contractors [Abstract]

CONTRACT AND OTHER DEFERRED ASSETS & PROGRESS COLLECTIONS AND DEFERRED INCOME

NOTE 9. CONTRACT AND OTHER DEFERRED ASSETS & PROGRESS COLLECTIONS AND DEFERRED INCOME

Contract and other deferred assets decreased $766 million in the six months ended June 30, 2023 primarily due to a decrease in long-term service agreements, partially offset by the timing of revenue recognition ahead of billing milestones on long-term equipment contracts. Our long-term service agreements decreased primarily due to billings of $6,385 million, partially offset by revenues recognized of $5,390 million and a net favorable change in estimated profitability of $99 million at Power.

June 30, 2023	Aerospace		Renewable Energy		Power		Corporate		Total
Revenues in excess of billings	$	2,527	$	—	$	5,522	$	—	$	8,048
Billings in excess of revenues	(7,608)		—		(1,846)		—		(9,454)
Long-term service agreements	$	(5,081)	$	—	$	3,675	$	—	$	(1,406)
Equipment and other service agreements	481		1,154		1,533		275		3,443
Current contract assets	$	(4,600)	$	1,154	$	5,209	$	275	$	2,037
Nonrecurring engineering costs(a)	2,438		20		2		—		2,460
Customer advances and other(b)	2,371		—		609		—		2,980
Non-current contract and other deferred assets	$	4,809	$	20	$	611	$	—	$	5,440
Total contract and other deferred assets	$	208	$	1,174	$	5,820	$	275	$	7,477

December 31, 2022
Revenues in excess of billings	$	2,363	$	—	$	5,403	$	—	$	7,766
Billings in excess of revenues	(6,681)		—		(1,763)		—		(8,443)
Long-term service agreements	$	(4,318)	$	—	$	3,640	$	—	$	(677)
Equipment and other service agreements	433		1,063		1,404		245		3,144
Current contract assets	$	(3,884)	$	1,063	$	5,044	$	245	$	2,467
Nonrecurring engineering costs(a)	2,513		17		4		—		2,534
Customer advances and other(b)	2,519		—		724		—		3,243
Non-current contract and other deferred assets	$	5,032	$	17	$	728	$	—	$	5,776
Total contract and other deferred assets	$	1,148	$	1,079	$	5,772	$	245	$	8,244

(a) Included costs incurred prior to production (such as requisition engineering) for equipment production contracts, primarily within our Aerospace segment, which are amortized ratably over each unit produced.

(b) Included amounts due from customers at Aerospace for the sales of engines, spare parts and services, and at Power, for the sale of services upgrades, which we collect through incremental fixed or usage-based fees from servicing the equipment under long-term service agreements.

Progress collections and deferred income increased $902 million primarily due to new collections received in excess of revenue recognition primarily at Power. Revenues recognized for contracts included in a liability position at the beginning of the year were $8,403 million and $7,232 million for the six months ended June 30, 2023 and 2022, respectively.

June 30, 2023	Aerospace		Renewable Energy		Power		Corporate		Total
Progress collections	$	5,865	$	5,270	$	5,363	$	134	$	16,632
Current deferred income	187		196		14		113		510
Progress collections and deferred income	$	6,052	$	5,466	$	5,377	$	247	$	17,142
Non-current deferred income	1,136		189		46		14		1,384
Total Progress collections and deferred income	$	7,188	$	5,656	$	5,422	$	261	$	18,527

December 31, 2022
Progress collections	$	5,814	$	5,195	$	4,514	$	131	$	15,655
Current deferred income	233		208		13		107		562
Progress collections and deferred income	$	6,047	$	5,404	$	4,527	$	238	$	16,216
Non-current deferred income	1,110		183		104		12		1,409
Total Progress collections and deferred income	$	7,157	$	5,586	$	4,632	$	250	$	17,625