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Note 4: Inventories and Contracts in Progress

6 Months Ended

Jun. 30, 2012

Notes to Condensed Consolidated Financial Statements [Abstract]

Note 4: Inventories and Contracts in Progress

(Dollars in millions)	June 30, 2012		December 31, 2011
Raw materials	$	1,139	$	1,321
Work-in-process		3,823		3,175
Finished goods		3,083		3,078
Contracts in progress		7,101		6,899
		15,146		14,473
Less:
Progress payments, secured by lien, on U.S. Government contracts		(281)		(422)
Billings on contracts in progress		(6,363)		(6,254)
	$	8,502	$	7,797

As of June 30, 2012 and December 31, 2011, the above inventory balances include capitalized contract development costs of $826 million and $776 million, respectively, related to certain aerospace programs. These capitalized costs are liquidated as production units are delivered to the customer. The capitalized contract development costs within inventory principally relate to costs capitalized on Sikorsky's CH-148 contract with the Canadian government. The CH-148 is a derivative of the H-92, a military variant of the S-92.

- 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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