CONTRACT ASSETS AND LIABILITIES

9 Months Ended

Sep. 28, 2025

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):

	September 28, 2025		December 31, 2024
Contract assets	$	13,949	$	12,957
Contract liabilities	10,259		9,795

Contract assets are primarily driven by the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations for which we have not yet billed our customers. During the nine months ended September 28, 2025, contract assets increased $1.0 billion primarily due to the F-35 program at Aeronautics. There were no significant credit or impairment losses related to our contract assets during the quarters and nine months ended September 28, 2025 and September 29, 2024.

Contract liabilities increased $464 million during the nine months ended September 28, 2025, primarily due to payments received in excess of revenue recognized on performance obligations (primarily for international F-35 at Aeronautics and Sikorsky at RMS). During the quarter and nine months ended September 28, 2025, we recognized $1.0 billion and $5.6 billion of our contract liabilities at December 31, 2024 as revenue. During the quarter and nine months ended September 29, 2024, we recognized $866 million and $4.9 billion of our contract liabilities at December 31, 2023 as revenue.