XML 38 R25.htm IDEA: XBRL DOCUMENT v3.25.3
Remaining Performance Obligations (RPO)
 9 Months Ended
Sep. 30, 2025
Revenue from Contract with Customer [Abstract]  
Remaining Performance Obligations (RPO)
Note 7: Contract Assets and Liabilities
Contract assets reflect revenue recognized and performance obligations satisfied in advance of customer billings. Contract liabilities relate to payments received in advance of the satisfaction of performance under the contract. We receive payments from customers based on the terms established in our contracts. Total contract assets and contract liabilities were as follows:
(dollars in millions)September 30, 2025December 31, 2024
Contract assets, net$16,604 $14,570 
Contract liabilities(20,111)(18,616)
Net contract liabilities$(3,507)$(4,046)
Contract assets, net, increased $2.0 billion during the nine months ended September 30, 2025 primarily due to sales in excess of billings on certain contracts at Pratt & Whitney, partially offset by an increase in the allowance for expected credit losses due to a customer bankruptcy recorded at Pratt & Whitney in the second quarter of 2025. Contract liabilities increased $1.5 billion
during the nine months ended September 30, 2025 primarily due to advances received and billings in excess of sales on certain contracts at Pratt & Whitney. We recognized revenue of $1.5 billion and $6.5 billion during the quarter and nine months ended September 30, 2025 related to contract liabilities outstanding as of January 1, 2025 and recognized revenue of $1.3 billion and $5.7 billion during the quarter and nine months ended September 30, 2024, related to contract liabilities outstanding as of January 1, 2024.
Contract assets are net of an allowance for expected credit losses of $0.7 billion and $0.5 billion as of September 30, 2025 and December 31, 2024, respectively. The increase in allowance for expected credit losses as of September 30, 2025 as compared to December 31, 2024 was primarily related to an increase in reserves as a result of a customer bankruptcy recorded at Pratt & Whitney in the second quarter of 2025.
Note 19: Remaining Performance Obligations (RPO)
RPO represents the aggregate amount of total contract transaction price that is unsatisfied or partially unsatisfied. Total RPO was approximately $251 billion as of September 30, 2025. Of the total RPO as of September 30, 2025, we expect approximately 25% will be recognized as revenue over the next 12 months. Approximately 45% of our RPO relates to long-term commercial aerospace maintenance contracts at Pratt & Whitney, which are generally expected to be realized over a span of up to 20 years.