Inventory

Inventories are summarized as follows:



	March 31, 2016			December 31, 2015
Raw materials	$	259.7		$	253.8
Work-in-process	821.4			854.4
Finished goods	64.6			65.7
Product inventory	1,145.7			1,173.9
Capitalized pre-production	147.9			167.8
Deferred production	1,389.6			1,315.4
Forward loss provision	(875.2		)	(882.7		)
Total inventory, net	$	1,808.0		$	1,774.4

Capitalized pre-production costs include certain contract costs, including applicable overhead, incurred before a product is manufactured on a recurring basis. Significant statement of work changes considered not reimbursable by the customer can also cause pre-production costs to be incurred. These costs are typically amortized over a certain number of shipset deliveries. Capitalized pre-production may be amortized over multiple blocks. See contract block and orders table noted below.

Deferred production includes costs for the excess of production costs over the estimated average cost per shipset, and credit balances for favorable variances on contracts between actual costs incurred and the estimated average cost per shipset for units delivered under the current production blocks. Recovery of excess-over-average deferred production costs is dependent on the number of shipsets ultimately sold and the ultimate selling prices and lower production costs associated with future production under these contract blocks. The Company believes these amounts, net of forward loss provisions, will be fully recovered over the contract block quantities noted in the contract block and orders table below. Should orders not materialize in future periods to fulfill the block, potential forward loss charges may be necessary to the extent the final delivered quantity does not absorb deferred inventory costs. Sales significantly under estimates or costs significantly over estimates could result in losses on these contracts in future periods.

Capitalized pre-production and deferred production inventories are at risk to the extent that the Company does not achieve the orders in the forecasted blocks or if future actual costs exceed current projected estimates, as those categories of inventory are recoverable over future deliveries.

Forward loss provisions on contract blocks are recorded in the period in which they become evident and included in inventory with any remaining amount reflected in accrued contract liabilities.

Non-recurring production costs include design and engineering costs and test articles.

Inventories are summarized by platform and costs below:



	March 31, 2016
	Product Inventory
	Inventory		Non-Recurring		Capitalized Pre- Production		Deferred Production			Forward Loss Provision			Total Inventory, net March 31, 2016
B787	213.8		9.9		26.6		591.8			(606.0		)	236.1
Boeing - All other platforms	484.8		17.0		5.4		(1.9		)	(17.3		)	488.0
A350 XWB	153.3		37.3		92.2		685.2			(113.7		)	854.3
Airbus - All other platforms	89.6		—		—		9.0			—			98.6
Rolls-Royce BR725⁽¹⁾	15.4		—		23.7		99.1			(138.2		)	—
GCS&S	56.1		—		—		—			—			56.1
Other platforms	67.3		1.2		—		6.4			—			74.9
Total	$	1,080.3	$	65.4	$	147.9	$	1,389.6		$	(875.2	)	$	1,808.0



	December 31, 2015
	Product Inventory
	Inventory		Non-Recurring		Capitalized Pre- Production		Deferred Production			Forward Loss Provision			Total Inventory, net December 31, 2015
B787	222.7		9.8		42.1		558.5			(606.0		)	227.1
Boeing - All other platforms	491.9		23.0		5.6		(32.8		)	(28.8		)	458.9
A350 XWB	148.7		35.3		94.2		679.4			(113.8		)	843.8
Airbus - All other platforms	90.8		—		—		9.2			—			100.0
Rolls-Royce BR725⁽¹⁾	12.5		—		25.9		95.7			(134.1		)	—
GCS&S	54.3		—		—		—			—			54.3
Other platforms	80.0		4.9		—		5.4			—			90.3
Total	$	1,100.9	$	73.0	$	167.8	$	1,315.4		$	(882.7	)	$	1,774.4


(1)	Forward loss charges recorded in prior periods on the Rolls-Royce BR725 program exceeded the total inventory balance. The excess of the charge over program inventory is classified as a contract liability and reported in other current liabilities on the Condensed Consolidated Balance Sheet. The total contract liability was $4.6 and $12.2 as of March 31, 2016 and December 31, 2015, respectively.

Significant amortization of capitalized pre-production and deferred production inventory has occurred over the following contract block deliveries and will continue to occur over the following contract blocks:



Model	Current Block Deliveries	Contract Block Quantity	Orders⁽¹⁾
B787	441	500	746
A350 XWB ⁽²⁾	78	400	758
Rolls-Royce BR725	206	350	257


(1)	Order amounts are obtained from the published firm-order backlogs of Airbus and Boeing. For Rolls-Royce BR725, orders represent purchase orders received from OEMs and are not reflective of OEM sales backlog. Orders reported are total block orders, including delivered units.


(2)	Capitalized pre-production amortization over 800 shipsets.