NOTE 6: COSTS AND ESTIMATED EARNINGS IN EXCESS OF BILLINGS ON UNCOMPLETED CONTRACTS AND DEFERRED REVENUES

9 Months Ended

Sep. 30, 2011

Prerequisites for Billing, Long-term Contracts

NOTE 6: BILLINGS IN EXCESS OF COSTS AND ESTIMATED EARNINGS ON UNCOMPLETED CONTRACTS AND DEFERRED REVENUES

The components of billings in excess of costs and estimated earnings on uncompleted contracts are summarized below:

	September 30, 2011			December 31, 2010
Costs incurred on uncompleted contracts	$	1,624		$	5,356
Estimated earnings on uncompleted contracts		1,146			132
		2,770			5,488
Less: Billings to date on uncompleted contracts		(4,190	)		(5,934	)
	$	(1,420	)	$	(446	)
Included in the accompanying condensed consolidated balance sheets under the following captions:
Costs and estimated earnings in excess of billings on uncompleted contracts	$	158		$	-
Billings in excess of costs and estimated earnings on uncompleted contracts		(1,578	)		(446	)
	$	(1,420	)	$	(446	)

At September 30, 2011, the asset balance of $158 was related to a large umbilical carousel fabrication contract that was completed during the fourth quarter of 2011. The balance in billings in excess of costs and estimated earnings on uncompleted contracts at September 30, 2011 and December 31, 2010 was $1,578 and $446, respectively, and consisted of significant milestone billings.  The December 31, 2010 balance of $446 related to a large drilling riser buoyancy module fabrication project which was completed in the third quarter of 2011. The September 30, 2011 balance of $1,578 related primarily to a large umbilical carousel fabrication project which is scheduled to be completed in the first quarter of 2012.

At September 30, 2011 and December 31, 2010, we reported deferred revenue balances of $280 and $315, respectively. These balances represent prepayments for which work has not yet been performed. We expect to recognize the deferred revenue at September 30, 2011 during the remainder of fiscal year 2011 and during fiscal year 2012.