INVENTORIES

9 Months Ended

Sep. 29, 2019

Inventories consisted of the following (in millions):



	September 29, 2019		December 31, 2018
Materials, spares and supplies	$	460	$	446
Work-in-process	2,696		2,161
Finished goods	318		390
Total inventories	$	3,474	$	2,997

Costs incurred to fulfill a customer contract in advance of the contract being awarded are included in inventories as work-in-process if we determine that those costs relate directly to a customer contract or to an anticipated customer contract that we can specifically identify and contract award is probable, the costs generate or enhance resources that will be used in satisfying performance obligations, and the costs are recoverable (referred to as pre-contract costs). Pre-contract costs that are initially capitalized in inventory are generally recognized as cost of sales consistent with the transfer of products and services to the customer upon the receipt of the anticipated contract. All other pre-contract costs, including start-up costs, are expensed as incurred. As of September 29, 2019 and December 31, 2018, $585 million and $443 million of pre-contract costs were included in inventory.