CONTRACT ASSETS AND LIABILITIES

6 Months Ended

Jun. 25, 2023

Revenue from Contract with Customer [Abstract]

CONTRACT ASSETS AND LIABILITIES

CONTRACT ASSETS AND LIABILITIES

Contract assets include unbilled amounts typically resulting from sales under contracts when the percentage-of-completion cost-to-cost method of revenue recognition is utilized and revenue recognized exceeds the amount billed to the customer. Contract liabilities include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in millions):

	June 25, 2023		December 31, 2022
Contract assets	$	13,008	$	12,318
Contract liabilities	8,184		8,488

Contract assets increased $690 million during the six months ended June 25, 2023, due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the six months ended June 25, 2023 for which we have not yet billed our customers (primarily on the F-35 program at Aeronautics). There were no significant credit or impairment losses related to our contract assets during the quarters and six months ended June 25, 2023 and June 26, 2022.

Contract liabilities decreased $304 million during the six months ended June 25, 2023, primarily due to revenue recognized in excess of payments received on these performance obligations. During the quarter and six months ended June 25, 2023, we recognized $1.1 billion and $3.3 billion of our contract liabilities at December 31, 2022 as revenue. During the quarter and six months ended June 26, 2022, we recognized $1.4 billion and $3.5 billion of our contract liabilities at December 31, 2021 as revenue.