Note 6 — 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 (formerly referred to as customer advances prior to the adoption of ASC 606 include advance payments and billings in excess of revenue recognized. Contract assets and contract liabilities were as follows (in thousands):



	December 31,		October 1,
	2018		2018

Contract assets	$	320,277	$	272,210
Contract liabilities	$	69,713	$	70,128

Contract assets increased $48.1 million during the three months ended December 31, 2018, primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations during the three months ended December 31, 2018 for which we have not yet billed. There were no significant impairment losses related to our contract assets during the three months ended December 31, 2018 and 2017.

Contract liabilities decreased $0.4 million during the three months ended December 31, 2018, primarily due to payments received in excess of revenue recognized on these performance obligations. During the three months ended December 31, 2018, we recognized $20.7 million of our contract liabilities at October 1, 2018 as revenue. We expect our contract liabilities to be recognized as revenue over the next twelve months.