Contract Assets, Contract Costs and Contract Liabilities

3 Months Ended

Apr. 01, 2022

Revenue from Contract with Customer [Abstract]

Contract Assets, Contract Costs and Contract Liabilities

Activity related to contract assets, contract costs and contract liabilities was as follows:

	April 1, 2022		December 31, 2021		$ Change		% Change
In thousands
Contract assets	$	99,360	$	112,354	$	(12,994)	(11.6)	%
Contract costs, current portion	$	841	$	850	$	(9)	(1.1)	%
Contract costs, noncurrent portion	$	10,114	$	10,249	$	(135)	(1.3)	%
Contract liabilities, current portion	$	2,808	$	2,945	$	(137)	(4.7)	%
Contract liabilities, noncurrent portion	$	16,528	$	16,528	$	—	—	%

Contract Assets

The decrease in contract assets was primarily due to higher amounts billed in the current period compared to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations for work performed and not yet billed on the JPF program, the KAflex® program and certain structures programs. There were no significant impairment losses related to the Company's contract assets during the three-month fiscal periods ended April 1, 2022 and April 2, 2021.

Contract assets includes amounts for matters such as contract changes, negotiated settlements and claims for unanticipated contract costs. These amounts were as follows:

	April 1, 2022		December 31, 2021
In thousands
Contract changes, negotiated settlements and claims for unanticipated contract costs	$	695	$	682

Contract Costs

At April 1, 2022 and December 31, 2021, costs to fulfill a contract were $11.0 million and $11.1 million, respectively. These amounts were included in contract costs, current portion and contract costs, noncurrent portion on the Company's Condensed Consolidated Balance Sheets at April 1, 2022 and December 31, 2021. There were no costs to obtain a contract at April 1, 2022 and December 31, 2021.

Contract costs, current portion at April 1, 2022 remained relatively flat compared to the balance at December 31, 2021. This was primarily attributable to the amortization of contract costs, mostly offset by the reclassification of a portion of costs to fulfill certain structures programs from contract costs, noncurrent portion. For the three-month fiscal periods ended April 1, 2022 and April 2, 2021, amortization of contract costs was $0.1 million and $1.9 million, respectively.

The decrease in contract costs, noncurrent portion was attributable to the reclassification of costs on certain structures programs to contract costs, current portion.

Contract Liabilities

The decrease in contract liabilities, current portion was primarily due to revenue recognized on our seals, springs and contacts, partially offset by advances received for the SH-2G program for New Zealand. Revenue recognized related to contract liabilities, current portion was $0.5 million and $9.4 million in the three-month fiscal periods ended April 1, 2022 and April 2, 2021, respectively.

8. CONTRACT ASSETS, CONTRACT COSTS AND CONTRACT LIABILITIES (CONTINUED)

Contract Liabilities - continued

Contract liabilities, noncurrent portion at April 1, 2022 remained flat compared to the balance at December 31, 2021. For the three-month fiscal periods ended April 1, 2022 and April 2, 2021, the Company did not recognize revenue against contract liabilities, noncurrent portion.