Inventories and Contracts in Progress

3 Months Ended

Mar. 31, 2015



(Dollars in millions)	March 31, 2015			December 31, 2014
Raw materials	$	2,058		$	2,056
Work-in-process	4,006			3,596
Finished goods	3,941			3,776
Contracts in progress	8,210			8,189
	18,215			17,617
Less:
Progress payments, secured by lien, on U.S. Government contracts	(434		)	(300		)
Billings on contracts in progress	(7,445		)	(7,452		)
	$	10,336		$	9,865

Inventory also includes capitalized contract development costs related to certain aerospace programs at UTC Aerospace Systems. As of March 31, 2015 and December 31, 2014, these capitalized costs were $131 million and $141 million, respectively, which will be liquidated as production units are delivered to the customer.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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