Percentage of Completion Contracts

9 Months Ended

Sep. 30, 2017

Contractors [Abstract]

Percentage of Completion Contracts

Percentage-of-Completion Contracts

We account for our long-term early production facility construction contracts in Iraq under the percentage-of-completion method. In the third quarter and the first nine months of 2017, there was no change to our cumulative estimated loss since December 31, 2016. Our net billings in excess of costs as of September 30, 2017 were $47 million and are shown in the “Other Current Liabilities” on the accompanying Condensed Consolidated Balance Sheets.

On May 26, 2016, we entered into an agreement with our customer containing the terms and conditions of the settlement on the Zubair contract which included variation order requests, claims for extension of time, payments of remaining contract milestones and new project completion timelines that resulted in relief from the liquidated damages provisions. The settlement paid to us was a gross amount of $150 million, of which we received $62 million in the second quarter of 2016, $72 million in the third quarter of 2016 and $16 million in the first quarter of 2017.

In the third quarter and the first nine months of 2016, we were break-even for our Zubair contract. As of September 30, 2016, cumulative estimated losses on our Iraq projects were $532 million, project estimates includednoclaims revenue, $25 million in approved change orders and $25 million of back charges.