CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS

12 Months Ended

Dec. 31, 2018

CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS

NOTE 8—CONTRACTS IN PROGRESS AND ADVANCE BILLINGS ON CONTRACTS

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

	December 31,
	2018 ⁽¹⁾		2017
	(In millions)
Costs incurred in excess of costs recognized ⁽¹⁾	$	9	$	98
Revenues recognized less billings to customers ⁽²⁾		695		523
Contracts in progress	$	704	$	621

Costs recognized in excess of costs incurred ⁽¹⁾	$	17	$	(14	)
Billings to customers less revenues recognized ⁽²⁾		1,937		46
Advance billings on contracts	$	1,954	$	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⁾	^{Revenues recognized in 2018 with respect to amounts included in our Advance billings on contracts balance as of December 31, 2017 were $45 million, realized during the first half of 2018.}

⁽³⁾	^{Our December 31, 2018 Contracts in progress, net and Advance billings on contracts included $278 million and $1.8 billion, respectively, associated with the Combination.}

For 2018, we recognized $81 million of revenues primarily resulting from changes in transaction prices associated with performance obligations satisfied in prior periods, primarily in our APAC and MENA segments. The change in transaction prices primarily related to reimbursement of costs incurred in prior periods.