Electronics & Electrical Equipment: Contract assets & liabilities

Page
Forward-Looking Statements	3
About GE Aerospace	4
Management’s Discussion and Analysis of Financial Condition and Results of Operations (MD&A)	7
Consolidated Results	8
Segment Operations	9
Corporate & Other	10
Other Consolidated Information	11
Capital Resources and Liquidity	12
Critical Accounting Estimates	14
Other Items	16
Non-GAAP Financial Measures	19
Other Financial Data	22
Cybersecurity	23
Risk Factors	24
Legal Proceedings	31
Management and Auditor's Reports	32
Audited Financial Statements and Notes	36
Statement of Operations	36
Statement of Financial Position	37
Statement of Cash Flow s	38
Statement of Comprehensive Income (Loss)	39
Statement of Changes in Shareholders' Equity	39
Note 1 Basis of Presentation and Summary of Significant Accounting Policies	40
Note 2 Discontinued Operations	46

Page
Forward-Looking Statements	3
Part I	4
Item 1. Business	4
Item 1A. Risk Factors	10
Item 1B. Unresolved Staff Comments	20
Item 1C. Cybersecurity	20
Item 2. Properties	21
Item 3. Legal Proceedings	21
Item 4. Mine Safety Disclosures	21
Part II	22
Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters, and Issuer Purchases of Equity Securities	22
Item 6. [Reserved]	22
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations	23
Item 7A. Quantitative and Qualitative Disclosures About Market Risk	35
Item 8. Financial Statements and Supplementary Data	36
Auditor's Report	36
Consolidated and Combined Statement of Income (Loss)	38
Consolidated and Combined Statement of Financial Position	39
Consolidated and Combined Statement of Cash Flows	40
Consolidated and Combined Statement of Comprehensive Income (Loss)	41
Consolidated and Combined Statement of Changes in Equity	42
Note	1	Organization and Basis of Presentation	43
Note	2	Summary of Significant Accounting Policies	44
Note	3	Assets and Liabilities Held for Sale	48

Payment terms vary but are generally short-term in nature. The Company's long-term contracts, where revenue is generally recognized over time, are typically billed as work progresses in accordance with the contract terms and conditions, either at periodic intervals or upon achievement of certain milestones. The timing of revenue recognition and billings under these contracts results in either unbilled receivables (contract assets) when revenue recognized exceeds billings, or customer advances (contract liabilities) when billings exceed revenue recognized. Unbilled receivables are reclassified to accounts receivable when an unconditional right to consideration exists, typically when a milestone in the contract is achieved. The Company does not evaluate whether the transaction price includes a significant financing component for contracts where the time between cash collection and performance is less than one year.

Certain arrangements with customers include variable consideration, typically in the form of rebates, cash discounts or penalties. In limited circumstances, the Company sells products with a general right of return. In most instances, returns are limited to product quality issues. The Company records a reduction to revenue at the time of sale to reflect the ultimate amount of consideration it expects to receive. The Company's estimates are updated quarterly based on historical experience, trend analysis, and expected market conditions. Variable consideration is typically not constrained at the time revenue is recognized. See Notes 2 and 20 for additional information about the Company's revenues.

Derivatives and Hedging