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CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS
 6 Months Ended
Jun. 30, 2018
Contractors [Abstract]  
CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS

NOTE 8—CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS

Our contract assets and liabilities at June 30, 2018 and December 31, 2017 were as follows:

 

 

 

June 30, 2018 (1)

 

 

December 31, 2017

 

 

 

(In millions)

 

Costs incurred in excess of costs recognized (1)

 

$

8

 

 

$

98

 

Revenues recognized less billings to customers (2)

 

 

910

 

 

 

523

 

Contracts in progress

 

$

918

 

 

$

621

 

 

 

 

 

 

 

 

 

 

Costs recognized in excess of costs incurred (1)

 

$

10

 

 

$

(14

)

Billings to customers less revenues recognized (2)

 

 

1,217

 

 

 

46

 

Advance billings on contracts

 

$

1,227

 

 

$

32

 

 

 

(1)

Costs incurred in excess of costs recognized (assets) and costs recognized in excess of costs incurred (liabilities) resulted from the exclusion of certain costs when measuring progress toward completion under the cost-to-cost method, prior to our adoption of ASC Topic 606. These remaining amounts will be recognized in Cost of operations as the underlying projects progress.  

 

(2)

During the six months ended June 30, 2018, the change in the asset and liability balances includes $411 million and $1.2 billion, respectively, resulting from the Combination. Revenues recognized for the three and six-months periods ended June 30, 2018 with respect to amounts included in our contract liability balance as of December 31, 2017 were $7 million and $45 million, respectively.

For the three months ended June 30, 2018, revenues recognized from changes in transaction prices associated with performance obligations satisfied in prior periods were $13 million, primarily in our MENA segment. For the six-months ended June 30, 2018, we recognized $79 million of revenues resulting from the second quarter 2018 impact discussed above and changes in transaction prices during the first quarter 2018 associated with performance obligations satisfied in prior periods, primarily in our APAC segment. The change in transaction prices primarily related to reimbursement of costs incurred in prior periods.