Contract Assets, Contract Costs and Contract Liabilities

3 Months Ended

Mar. 31, 2023

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:

	March 31, 2023		December 31, 2022		$ Change		% Change
In thousands
Contract assets	$	116,168	$	113,182	$	2,986	2.6	%
Contract costs, current portion(1)	$	531	$	695	$	(164)	(23.6)	%
Contract costs, noncurrent portion(2)	$	693	$	673	$	20	3.0	%
Contract liabilities, current portion	$	6,044	$	4,081	$	1,963	48.1	%
Contract liabilities, noncurrent portion	$	20,329	$	20,515	$	(186)	(0.9)	%

(1) Contract costs, current portion are included within other current assets on the Company's Condensed Consolidated Balance Sheets.

(2) Contract costs, noncurrent portion are included within other assets on the Company's Condensed Consolidated Balance Sheets.

Contract Assets

The increase in contract assets was primarily due to the recognition of revenue related to the satisfaction or partial satisfaction of performance obligations for work performed and not yet billed on certain programs with Boeing and the AH-1 blade program compared to lower amounts billed in the current period on the JPF program. There were no significant impairment losses related to the Company's contract assets during the three-month fiscal periods ended March 31, 2023 and April 1, 2022.

There were no amounts included in contract assets for matters such as contract changes, negotiated settlements and claims for unanticipated contract costs at March 31, 2023 and December 31, 2022.

Contract Costs

At March 31, 2023 and December 31, 2022, costs to fulfill a contract were $1.2 million and $1.4 million, respectively. These amounts were included in other current assets and other assets on the Company's Condensed Consolidated Balance Sheets at March 31, 2023 and December 31, 2022. There were no costs to obtain a contract at March 31, 2023 and December 31, 2022.

Contract costs, current portion at March 31, 2023 decreased compared to the balance at December 31, 2022. This was primarily attributable to the amortization of contract costs. Amortization of contract costs was $0.1 million for the three-month fiscal periods ended March 31, 2023 and April 1, 2022.

Contract costs, noncurrent portion at March 31, 2023 remained relatively flat when compared to the balance at December 31, 2022.

Contract Liabilities

Contract liabilities, current portion at March 31, 2023 increased compared to the balance at December 31, 2022. This was primarily due to advances received for the SH-2G program with New Zealand and the reclassification of liabilities on the FireburstTM enhanced fuzing capability program from contract liabilities, noncurrent portion, partially offset by revenue recognized on the JASSM® program. Revenue recognized related to contract liabilities, current portion was $0.5 million in the three-month fiscal periods ended March 31, 2023 and April 1, 2022.

Contract liabilities, noncurrent portion at March 31, 2023 decreased compared to the balance at December 31, 2022 due to the reclassification of liabilities on the FireBurstTM enhanced fuzing capability program to contract liabilities, current portion, partially offset by advances received for the JPF program. For the three-month fiscal periods ended March 31, 2023 and April 1, 2022, the Company did not recognize revenue against contract liabilities, noncurrent portion. Refer to Note 12, Commitments and Contingencies, for further information on the Company's offset agreements.