Percentage of Completion Contracts

12 Months Ended

Dec. 31, 2015

Contractors [Abstract]

Percentage of Completion Contracts

Percentage-of-Completion Contracts

During 2015, we recognized an estimated project loss of $153 million related to our long-term early production facility construction contracts in Iraq accounted for under the percentage-of-completion method. The total estimated loss on these projects was $532 million at December 31, 2015.

As of December 31, 2015, our percentage-of-completion project estimate includes $116 million of claims revenue and $28 million of back charges. During 2015, an additional $32 million of claims revenue was included in our project estimates. Our costs in excess of billings as of December 31, 2015 were $6 million and are shown in the “Other Current Assets” line on our Consolidated Balance Sheets. We also have a variety of unapproved contract change orders or claims that are not included in our revenues as of December 31, 2015. The amounts associated with these contract change orders or claims are included in revenue only when they can be reliably estimated and their realization is reasonably assured.

During 2014, we recognized estimated project losses of $72 million related to our long-term early production facility construction contracts in Iraq accounted for under the percentage-of-completion method. Total estimated losses on these projects were $379 million at December 31, 2014. As of December 31, 2014, our percentage-of-completion project estimates include $90 million of claims revenue and $24 million of back charges. Our costs in excess of billings as of December 31, 2014 were $128 million and are shown in the “Other Current Assets” line on the balance sheet. We had a variety of unapproved contract change orders or claims that were not included in our revenues as of December 31, 2014. During 2014, an additional $80 million of claims revenue was included in our project estimates and $26 million of our prior claims were approved.

During 2013, we recognized estimated project losses of $232 million related to our long-term early production facility construction contracts in Iraq accounted for under the percentage-of-completion method. The total estimated losses on these projects were $307 million at December 31, 2013. As of December 31, 2013, our percentage-of-completion project estimates include $36 million of claims revenue and $82 million for liquidated damages that we are contractually obligated to pay as a result of delays in the expected completion of the project. We had a variety of unapproved contract change orders or claims that were not included in our revenues as of December 31, 2013.