Contracts In Process

12 Months Ended

Dec. 31, 2011

Contracts In Process [Abstract]

Contracts In Process

G. 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	2010			2011
Contract costs and estimated profits	$	15,675		$	18,807
Other contract costs		909			959
		16,584			19,766
Advances and progress payments		(11,711	)		(14,598)
Total contracts in process	$	4,873		$	5,168

Contract costs consist primarily of labor, material, overhead and general and administrative (G&A) expenses. Contract costs also include estimated contract recoveries for matters such as contract changes, negotiated settlements 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 these items were not material on December 31, 2010 or 2011.

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. However, our business base includes numerous contracts for which we have been designated the sole source or are one of two suppliers on long-term U.S. defense programs. We expect to bill substantially all of our year-end 2011 contracts-in-process balance during 2012, with the exception of these other contract costs.