COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS

9 Months Ended

Sep. 30, 2019

COSTS AND ESTIMATED PROFITS ON UNCOMPLETED CONTRACTS

Under our customized pump production contracts in our IPS segment, amounts are billed as work progresses in accordance with agreed-upon contractual terms, upon various measures of performance, including achievement of certain milestones, completion of specified units, or completion of a contract. Generally, billing occurs subsequent to revenue recognition, resulting in contract assets. Our contract assets are presented as “cost and estimated profits in excess of billings” on our Condensed Consolidated Balance Sheets. However, we sometimes receive advances or deposits from our customers before revenue is recognized, resulting in contract liabilities that are presented as “Billings in excess of costs and estimated profits” on our Condensed Consolidated Balance Sheets.

Costs and estimated profits on uncompleted contracts and related amounts billed were as follows (in thousands):



	September 30, 2019		December 31, 2018
Costs incurred on uncompleted contracts	$	52,506	$	53,595
Estimated profits, thereon	8,932		6,847
Total	61,438		60,442
Less: billings to date	34,743		38,662
Net	$	26,695	$	21,780

Such amounts were included in the accompanying Condensed Consolidated Balance Sheets for September 30, 2019 and December 31, 2018 under the following captions (in thousands):



	September 30, 2019			December 31, 2018
Costs and estimated profits in excess of billings	$	33,898		$	32,514
Billings in excess of costs and estimated profits	(7,201		)	(10,696		)
Translation adjustment	(2		)	(38		)
Net	$	26,695		$	21,780

During the nine months ended September 30, 2019, $10.5 million of the balances that were previously classified as contract liabilities at the beginning of the period shipped. Contract assets and liability changes were primarily due to normal activity and timing differences between our performance and customer payments.