Note 7 – Inventories

Inventories at December 31 consisted of the following:


	2011			2010
Long-term contracts in progress	$	13,587		$	14,400
Commercial aircraft programs		35,080			26,550
Commercial spare parts, used aircraft, general stock materials and other		7,832			5,788
Inventory before advances and progress billings		56,499			46,738
Less advances and progress billings		(24,259	)		(22,421	)
Total	$	32,240		$	24,317

Long-Term Contracts in Progress

Long-term contracts in progress included Delta launch program inventory that will be sold at cost to United Launch Alliance (ULA) under an inventory supply agreement that terminates on March 31, 2021. At December 31, 2011 and 2010, the inventory balance was $1,085 and $1,385. As of December 31, 2011, $739 of this inventory relates to yet unsold launches. ULA is continuing to assess the future of the Delta II program. In the event ULA is unable to sell additional Delta II inventory, our earnings could be reduced by up to $58. See Note 13.

Inventory balances included $236 subject to claims or other uncertainties relating to the A-12 program as of December 31, 2011 and 2010. See Note 21.

Capitalized precontract costs of $1,728 and $527 at December 31, 2011 and 2010, are included in long-term contracts in progress inventories.

Commercial Aircraft Programs

As of December 31, 2011 and 2010, commercial aircraft programs inventory included the following amounts related to the 787 program: $16,098 and $9,461 of work in process (including deferred production costs at December 31, 2011 of $10,753), $1,770 and $1,956 of supplier advances, and $1,914 and $1,447 of unamortized tooling and other non-recurring costs. At December 31, 2011, $9,168 of 787 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $3,499 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

Commercial aircraft programs inventory included the following amounts related to the 747 program: $448 of deferred production costs at December 31, 2011, net of previously recorded reach-forward losses, and $852 and $879 of unamortized tooling costs at December 31, 2011 and 2010. During the third quarter of 2011, we reclassified $1,934 of previously recorded reach-forward losses on the 747 program from Accrued liabilities to Inventories, net of advances and progress billings. At December 31, 2011, $903 of 747 deferred production costs, unamortized tooling and other non-recurring costs are expected to be recovered from units included in the program accounting quantity that have firm orders and $397 is expected to be recovered from units included in the program accounting quantity that represent expected future orders.

Commercial aircraft program inventory included amounts credited in cash or other consideration (early issue sales consideration), to airline customers totaling $2,564 and $1,970 at December 31, 2011 and 2010.

As a normal course of our Commercial Airplanes segment production process, our inventory may include a small quantity of airplanes that are completed but unsold. As of December 31, 2011, these aircraft were valued at $509. As of December 31, 2010 the value of completed but unsold aircraft in inventory was insignificant.