5. Revenue from Contracts with Customers

The following table disaggregates the company’s net sales based on the timing of transfer of control:

($ in millions)

Point in Time

Over Time

Total

2025

$

2,317

$

10,844

$

13,161

2024

2,454

9,341

11,795

2023

2,352

9,710

12,062

The company did not have any contract assets at December 31, 2025, 2024, or 2023. The opening and closing balances of the company’s current and noncurrent contract liabilities are as follows:

Contract

Contract

Liabilities

Liabilities

($ in millions)

  ​ ​ ​

(Current)

(Noncurrent)

Balance at December 31, 2023

$

114

3

Increase (decrease)

(64)

(1)

Balance at December 31, 2024

$

50

$

2

Increase (decrease)

24

Balance at December 31, 2025

$

74

$

2

During the year ended December 31, 2025, contract liabilities increased by $24 million, which is net of cash received of $91 million and amounts recognized as sales of $67 million, the majority of which related to current contract liabilities. The amount of sales recognized during the year ended December 31, 2025, that was included in the company’s opening contract liabilities balance was $50 million, all of which related to current contract liabilities. The difference between the opening and closing balances of the company’s contract liabilities primarily results from timing differences between the company’s performance and the customer’s payments. Current contract liabilities are classified within other current liabilities on the consolidated balance sheets and noncurrent contract liabilities are classified within other liabilities.

Historical Timeline

Fiscal YearFiled
2025Feb 19, 2026Showing above
2024Feb 20, 2025
2023Feb 20, 2024
2022Feb 21, 2023
2021Feb 16, 2022
2020Feb 17, 2021
2019Feb 19, 2020
2018Feb 22, 2019

About Revenue Disclosures

Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.

Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.