Our CIE balances by business segment are as follows:
|
| | | | | | | |
| December 31, |
Millions of dollars | 2013 | | 2012 |
Gas Monetization | $ | 44 |
| | $ | 165 |
|
Hydrocarbons | 146 |
| | 131 |
|
Infrastructure, Government and Power | 131 |
| | 171 |
|
Services | 132 |
| | 117 |
|
Other | 5 |
| | 5 |
|
Total | $ | 458 |
| | $ | 589 |
|
Our BIE balances by business segment are as follows:
|
| | | | | | | |
| December 31, |
Millions of dollars | 2013 | | 2012 |
Gas Monetization | $ | 30 |
| | $ | 121 |
|
Hydrocarbons | 139 |
| | 101 |
|
Infrastructure, Government and Power | 200 |
| | 174 |
|
Services | 23 |
| | 43 |
|
Other | — |
| | — |
|
Total | $ | 392 |
| | $ | 439 |
|
Unapproved change orders and claims
When estimating the amount of total gross profit or loss on a contract, we include unapproved change orders or claims to our clients as adjustments to revenues and claims to vendors, subcontractors and others as adjustments to total estimated costs. Claims against others are recorded up to the extent of the lesser of the amounts management expects to recover or to costs incurred and include no profit until they are finalized and approved.
The amounts of unapproved change orders and claims included in determining the profit or loss on contracts are as follows:
|
| | | | | | | |
| December 31, |
Millions of dollars | 2013 | | 2012 |
Amounts included in project estimates-at-completion at January 1 | $ | 167 |
| | $ | 19 |
|
Changes in estimates-at-completion | 109 |
| | 150 |
|
Approved | (161 | ) | | (2 | ) |
Amounts included in project estimates-at-completion at December 31, for unapproved change orders and claims | $ | 115 |
| | $ | 167 |
|
| | | |
Amounts recorded in revenues on a percentage-of-completion basis at December 31 | $ | 93 |
| | $ | 140 |
|
As of December 31, 2013, claims and unapproved change orders related to several projects. Included in the table above are claims included in project estimates-at-completion associated with the reimbursable portion of an EPC contract to construct an LNG facility for which we have recognized additional contract revenue totaling $46 million. The claims on this project represent incremental subcontractor costs that we are legally entitled to recover from the customer under the terms of the contract. We also have claims associated with one of our APAC projects for which we have recognized contract revenue of $10 million. Also included in the table above are unapproved change orders of $19 million related to a an EPC contract to install air emissions controls systems and $12 million related to a construction project, all for which we are currently negotiating the change orders with the customer.
Excluded from the table above are our share of claims and unapproved change orders related to our unconsolidated subsidiaries of $1 million and $57 million, respectively, as of December 31, 2013 and $3 million and $43 million, respectively, as of December 31, 2012.
Liquidated damages
Some of our engineering and construction contracts have schedule dates and performance obligations that if not met could subject us to penalties for liquidated damages in the event claims are asserted for which we were responsible for the delays. These generally relate to specified activities that must be completed within a project by a set contractual date or achievement of a specified level of output or throughput of a plant we construct. Each contract defines the conditions under which a customer may make a claim for liquidated damages. However, in some instances, liquidated damages are not asserted by the customer, but the potential to do so is used in negotiating or settling claims and closing out the contract. Any accrued liquidated damages are recognized as a reduction in revenues in the consolidated statements of income.
Based upon our evaluation of our performance and other legal analysis, we have not accrued for possible liquidated damages related to several projects totaling $10 million at December 31, 2013 and $2 million at December 31, 2012, (including amounts related to our share of unconsolidated subsidiaries), that we could incur based upon completing the projects as currently forecasted.
Advances
We may receive customer advances in the normal course of business, most of which are applied to invoices usually within one to three months. In addition, we hold advances from customers to assist us in financing project activities, including subcontractor costs. As of December 31, 2013, $50 million of these finance-related advances are included in "BIE" on our consolidated balance sheets. As of December 31, 2012, $82 million of these advances are included in "CIE" on our consolidated balance sheets.
