Inventories

12 Months Ended

Dec. 31, 2024

Inventories consisted of the following (in millions):


	2024		2023
Materials, spares and supplies	$	661	$	606
Work-in-process	2,617		2,338
Finished goods	196		188
Total inventories	$	3,474	$	3,132

Costs incurred to fulfill a 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 contract or to an anticipated contract that we can specifically identify and determine that the 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). These advanced procurement costs are generally incurred in order to enhance our ability to achieve schedule and certain customer milestones. 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 December 31, 2024 and 2023, $1.5 billion and $989 million of pre-contract costs were included in inventories. The increase in pre-contract costs as of December 31, 2024 is primarily driven by the classified contracts at our Aeronautics business segment and Sikorsky helicopter programs at our RMS business segment.