Company: BKR
Filing Date: 2025-04-23
Form Type: 10-Q
Source: 0001701605-25-000075
Chunk: 26

Company: Baker Hughes Co
Filing Date: 2025-04-23
Form: 10-Q
Item: Part I, Item 1
Chunk 26
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 OTHER DEFERRED ASSETS

Contract assets reflect revenue earned in excess of billings on long-term contracts to construct technically complex equipment, provide long-term product service and maintenance or extended warranty arrangements and other deferred contract related costs. The Company's long-term product service agreements are provided by the Industrial & Energy Technology ("IET") segment. The Company's long-term equipment contracts are provided by both the IET and Oilfield Services & Equipment ("OFSE") segments. Contract assets consist of the following:March 31, 2025December 31, 2024Long-term product service agreements $343 $346 Long-term equipment contracts and certain other service agreements1,204 1,247 Contract assets (total revenue in excess of billings)1,547 1,593 Deferred inventory costs114 124 Other costs to fulfill or obtain a contract19 13 Contract and other deferred assets$1,680 $1,730 

Baker Hughes Company 2025 First Quarter Form 10-Q | 8

Baker Hughes CompanyNotes to Unaudited Condensed Consolidated Financial Statements

Revenue recognized during the three months ended March 31, 2025 and 2024 from performance obligations satisfied (or partially satisfied) in previous periods related to long-term service agreements was $4 million and $(1) million, respectively. This includes revenue recognized from revisions to cost or billing estimates that may affect a contract's total estimated profitability.

NOTE 6. PROGRESS COLLECTIONS AND DEFERRED INCOME

Contract liabilities include progress collections, which reflects billings in excess of revenue, and deferred income on long-term contracts to construct technically complex equipment, long-term product maintenance or extended warranty arrangements. Contract liabilities consist of the following:March 31, 2025December 31, 2024Progress collections$5,456 $5,550 Deferred income133 122 Progress collections and deferred income (contract liabilities)$5,589 $5,672 

Revenue recognized during the three months ended March 31, 2025 and 2024 that was included in the contract liabilities at the beginning of the period was $1,546 million and $1,476 million, respectively.

NOTE 7. LEASES

The Company's leasing activities primarily consist of operating leases for service centers, manufacturing facilities, sales and administrative offices, and certain equipment.Three Months Ended March 31,Operating Lease Expense20252024Long-term fixed lease$69 $74 Long