Contracts In Process

12 Months Ended

Dec. 31, 2014

Contractors [Abstract]

Contracts In Process

CONTRACTS IN PROCESS

Contracts in process represent recoverable costs and, where applicable, accrued profit related to long-term contracts that have been inventoried until the customer is billed, and consisted of the following:

December 31	2014			2013
Contract costs and estimated profits	$	7,494		$	7,961
Other contract costs	1,064			1,178
	8,558			9,139
Advances and progress payments	(3,967		)	(4,359		)
Total contracts in process	$	4,591		$	4,780

Contract costs consist primarily of labor, material, overhead and G&A expenses. Contract costs also may include estimated contract recoveries for matters such as contract changes and claims for unanticipated contract costs. We record revenue associated with these matters only when the amount of recovery can be estimated reliably and realization is probable. Assumed recoveries for claims included in contracts in process were not material on December 31, 2014 or 2013.

Other contract costs represent amounts that are not currently allocable to government contracts, such as a portion of our estimated workers’ compensation obligations, other insurance-related assessments, pension and other post-retirement benefits and environmental expenses. These costs will become allocable to contracts generally after they are paid. We expect to recover these costs through ongoing business, including existing backlog and probable follow-on contracts. If the backlog in the future does not support the continued deferral of these costs, the profitability of our remaining contracts could be adversely affected.

Excluding our other contract costs, we expect to bill all but approximately 15 percent of our year-end 2014 contracts-in-process balance during 2015. Of the amount not expected to be billed in 2015, approximately $220 relates to a single contract, the Canadian Maritime Helicopter Project (MHP). In 2014, the contract was renegotiated, extending the period of performance. The MHP-related balance declined by $80 during 2014.