CONTRACT AND OTHER DEFERRED ASSETS & PROGRESS COLLECTIONS AND DEFERRED INCOME

3 Months Ended

Mar. 31, 2024

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 increased $72 million in the three months ended March 31, 2024, primarily due to the timing of revenue recognition ahead of billing milestones on long-term equipment contracts and short-term and other services agreements, partially offset by a decrease in long-term service agreements. Our long-term service agreements decreased primarily due to billings of $3,155 million and net unfavorable changes in estimated profitability of $162 million at Aerospace and $29 million at Power, partially offset by revenues recognized of $3,029 million.

March 31, 2024	Aerospace		Renewable Energy		Power		Corporate		Total
Revenues in excess of billings	$	2,112	$	—	$	5,176	$	—	$	7,288
Billings in excess of revenues	(7,965)		—		(1,794)		—		(9,759)
Long-term service agreements	$	(5,853)	$	—	$	3,382	$	—	$	(2,471)
Equipment and other service agreements	603		1,628		1,506		281		4,018
Current contract assets	$	(5,250)	$	1,628	$	4,888	$	281	$	1,547
Nonrecurring engineering costs(a)	2,444		23		1		—		2,469
Customer advances and other(b)	2,353		—		609		—		2,963
Non-current contract and other deferred assets	$	4,798	$	23	$	611	$	—	$	5,431
Total contract and other deferred assets	$	(452)	$	1,651	$	5,499	$	281	$	6,978

December 31, 2023
Revenues in excess of billings	$	2,377	$	—	$	5,205	$	—	$	7,582
Billings in excess of revenues	(7,902)		—		(1,810)		—		(9,712)
Long-term service agreements	$	(5,525)	$	—	$	3,395	$	—	$	(2,130)
Equipment and other service agreements	494		1,374		1,499		263		3,630
Current contract assets	$	(5,030)	$	1,374	$	4,894	$	263	$	1,500
Nonrecurring engineering costs(a)	2,444		18		1		—		2,463
Customer advances and other(b)	2,342		—		601		—		2,943
Non-current contract and other deferred assets	$	4,785	$	18	$	603	$	—	$	5,406
Total contract and other deferred assets	$	(245)	$	1,392	$	5,497	$	263	$	6,907

(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 $999 million primarily due to collections received in excess of revenue recognition at Renewable Energy, Power and Aerospace. Revenues recognized for contracts included in a liability position at the beginning of the year were $4,628 million and $4,468 million for the three months ended March 31, 2024 and 2023, respectively.

March 31, 2024	Aerospace		Renewable Energy		Power		Corporate		Total
Progress collections	$	6,401	$	7,554	$	6,091	$	134	$	20,180
Current deferred income	179		221		11		127		539
Progress collections and current deferred income	$	6,580	$	7,775	$	6,103	$	261	$	20,718
Non-current deferred income	1,084		149		46		19		1,297
Total Progress collections and deferred income	$	7,664	$	7,924	$	6,148	$	279	$	22,016

December 31, 2023
Progress collections	$	6,198	$	6,886	$	5,898	$	124	$	19,106
Current deferred income	201		239		20		112		571
Progress collections and current deferred income	$	6,399	$	7,125	$	5,918	$	236	$	19,677
Non-current deferred income	1,150		122		48		20		1,339
Total Progress collections and deferred income	$	7,549	$	7,247	$	5,965	$	256	$	21,017