Contract Assets and Liabilities

9 Months Ended

Sep. 30, 2024

Contract with Customer, Contract Asset, Contract Liability, and Receivable [Abstract]

Contract assets include unbilled amounts typically resulting from revenues under contracts when the over time method of revenue recognition is utilized, and revenue recognized exceeds the amount billed to the customer. Contract assets are transferred to Accounts receivable, net when the entitlement to pay becomes unconditional and the customer is invoiced. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract liabilities are included in Accrued liabilities in the Consolidated Balance Sheets.

Contract assets and Contract liabilities are reported on the Consolidated Balance Sheets in a net position on a contract-by-contract basis at the end of each reporting period.

As of September 30, 2024 and December 31, 2023, Contract assets and Contract liabilities consisted of the following:


(in thousands)	September 30, 2024		December 31, 2023
Contract assets	$	196,765	$	183,189
Allowance for expected credit losses	(983)		(908)
Contract assets, net	$	195,782	$	182,281

Contract liabilities	$	7,122	$	7,127

Contract assets, net increased $13.5 million during the nine months ended September 30, 2024. The increase was primarily due to an increase in unbilled revenue, primarily related to commercial and space programs. There were no impairment losses related to our Contract assets during the nine months ended September 30, 2024 and September 30, 2023.

Contract liabilities are essentially flat for the period ended September 30, 2024 compared to December 31, 2023, primarily due to revenue recognized from satisfied performance obligations were essentially offset by customer advance payments for commercial and defense programs. Revenue recognized for the nine months ended September 30, 2024 and 2023 that was included in the Contract liability balance at the beginning of the year was $3.7 million and $14.4 million, respectively.