Percentage of Completion Contracts

9 Months Ended

Sep. 30, 2015

Contractors [Abstract]

Percentage of Completion Contracts

Percentage-of-Completion Contracts

In the three and nine months ended September 30, 2015, we recognized estimated project losses of $44 million and $71 million, respectively, related to our long-term early production facility construction contract in Iraq accounted for under the percentage-of-completion method. Total estimated losses on these projects were $450 million at September 30, 2015.

As of September 30, 2015, our percentage-of-completion project estimates include $144 million of claims revenue and $21 million of back charges. Our costs in excess of billings as of September 30, 2015 were $93 million and are included in the “Other Current Assets” line on the Consolidated Balance Sheet. We also have a variety of unapproved contract change orders or claims that are not included in our revenues as of September 30, 2015. The amounts associated with these contract change orders or claims are included in revenue only when they can be estimated reliably and their realization is reasonably assured.

In the three and nine months ended September 30, 2014, we recognized estimated project losses of $10 million and $38 million, respectively. Total estimated losses on these projects were $345 million at September 30, 2014. As of September 30, 2014, our percentage-of-completion project estimates include $27 million of claims revenue. Claims revenue of $6 million was recognized during the three months ended September 30, 2014 and $34 million of claims revenue was recognized during the nine months ended September 30, 2014.