Lockheed Martin 1999 Annual Report Download - page 45

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)
December 31, 1999
Note 6—Receivables
(In millions) 1999 1998
U.S. Government:
Amounts billed $ 927 $ 987
Unbilled costs and accrued profits 2,300 2,440
Less customer advances and progress
payments (395) (491)
Commercial and foreign governments:
Amounts billed 644 635
Unbilled costs and accrued profits, primarily
related to commercial contracts 963 638
Less customer advances and progress
payments (91) (31)
$4,348 $4,178
Approximately $385 million of the December 31,
1999 unbilled costs and accrued profits are not expected
to be recovered within one year.
Note 7—Inventories
(In millions) 1999 1998
Work in process,
commercial launch vehicles $ 1,514 $ 1,326
Work in process, primarily
related to other long-term
contracts and programs
in progress 3,879 4,872
Less customer advances and
progress payments (1,848) (2,499)
3,545 3,699
Other inventories 506 594
$ 4,051 $ 4,293
Work in process inventories related to commercial
launch vehicles included costs for launch vehicles, both
under contract and not under contract, including unamor-
tized deferred costs related to the commercial Atlas and
the Evolved Expendable Launch Vehicle (Atlas V) programs.
Work in process inventories related to other long-term con-
tracts and programs included approximately $150 million
of unamortized deferred costs at December 31, 1999
for aircraft not under contract related to the Corporation’s
C-130J program.
Included in 1999 and 1998 commercial launch
vehicle inventories were amounts advanced to Russian
manufacturers, Khrunichev State Research and Produc-
tion Space Center and RD AMROSS, a joint venture
between Pratt & Whitney and NPO Energomash, of
approximately $903 million and $840 million, respec-
tively, for the manufacture of launch vehicles and related
launch services.
Approximately $1.5 billion of costs included in 1999
inventories, including approximately $652 million advanced
to the Russian manufacturers, are not expected to be recov-
ered within one year.
Included in 1998 inventories were capitalized costs
related to start-up activities of approximately $560 million
which were included in the cumulative effect adjustment
related to the Corporation’s adoption of SOP No. 98-5
effective January 1, 1999.
An analysis of general and administrative costs, includ-
ing research and development costs, included in work in
process inventories follows:
(In millions) 1999 1998 1997
Beginning of year $ 693 $ 533 $ 460
Incurred during the year 2,354 2,469 2,245
Charged to cost of sales
during the year:
Research and
development (822) (864) (788)
Other general and
administrative (1,732) (1,445) (1,384)
End of year $ 493 $ 693 $ 533
In addition, included in cost of sales in 1999, 1998
and 1997 were general and administrative costs, including
research and development costs, of approximately $509
million, $490 million and $539 million, respectively,
incurred by commercial business units or programs.