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CONTRACT REVENUE AND PERCENTAGE OF COMPLETION METHOD | 12 Months Ended
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Dec. 31, 2015
Revenue Recognition [Abstract] |
CONTRACT REVENUE AND PERCENTAGE OF COMPLETION METHOD | CONTRACT REVENUE AND PERCENTAGE OF COMPLETION METHOD Information with respect to uncompleted contracts as of December 31, is as follows (in thousands):
| 2015 |  | 2014
Costs incurred on uncompleted contracts | $ | 437,658 |  |  | $ | 742,608 |
Estimated profit earned to date | 7,777 |  |  | 53,551 |
| 445,435 |  |  | 796,159 |
Less billings to date | 439,694 |  |  | 787,936 |
| $ | 5,741 |  |  | $ | 8,223 |
The above amounts are included in the accompanying consolidated balance sheets at December 31 under the following captions (in thousands):
| 2015 |  | 2014
Costs and estimated earnings in excess of billings on uncompleted contracts | $ | 12,822 |  |  | $ | 26,989 |
Billings in excess of costs and estimated earnings on uncompleted contracts | (7,081 | ) |  | (18,766 | )
| $ | 5,741 |  |  | $ | 8,223 |
Provision for estimated losses Provisions for estimated losses on uncompleted contracts are made in the period in which such losses are determined. We recognized contract losses of $33.9 million, $6.6 million, and $30.8 million in the years ended December 31, 2015, 2014, and 2013, respectively. Contract losses for the year ended December 31, 2015 were primarily due to $24.5 million related to a decrease in the contract price due to final weight re-measurements and our inability to recover certain costs on disputed change orders related to a large deepwater project which was recently delivered. In addition we increased accrued contract losses associated with our remaining contracts by approximately $9.4 million during 2015 due to increases in our projected unit labor rates of our fabrication facilities. Our increases in unit labor rates were driven by our inability to absorb fixed costs due to decreases in expected oil and gas fabrication activity. Contract losses for the year ended December 31, 2014 were primarily related to two tank barge projects for a marine transportation company, platform supply vessels for an offshore marine company and a production platform jacket for a deepwater customer. Contract losses in 2013 were primarily due to our inability to recover certain costs and the de-scoping of one of our major deepwater project, whereby remaining completion and integration work was performed at the integration site by a different integration contractor. In addition, we recorded an additional loss provision of $18.2 million in the fourth quarter of 2013 related to this project. Revenues from Major Customers The Company is not dependent on any one customer, and the revenue earned from each customer varies from year to year based on the contracts awarded; however, the Company is highly dependent on a few large customers in each year, particularly customers for our major deepwater projects, as shown below. Revenues from customers comprising 10% or more of the Company’s total revenue for the years ended December 31, 2015, 2014 and 2013, respectively, are summarized as follows (in thousands):
Customer | 2015 |  | 2014 |  | 2013
A | $ | 55,775 |  |  | $ | 160,173 |  |  | * |
B | 36,320 |  |  | * |  |  | * |
C | * |  |  | 98,644 |  |  | * |
D | * |  |  | * |  |  | 216,875 |
E | * |  |  | * |  |  | 148,539 |
* | The customer revenue was less than 10% of the total revenue for the year.
International Revenues The Company’s fabricated structures are used worldwide by U.S. customers operating abroad and by foreign customers. Revenues related to fabricated structures for delivery outside of the United States accounted for 6%, 10%, and 6% of the Company’s revenues for the years ended December 31, 2015, 2014 and 2013, respectively, as follows (in thousands):
| 2015 |  | 2014 |  | 2013
Location: |  |  |  |  |
United States | $ | 287,892 |  |  | $ | 456,839 |  |  | $ | 570,726 |
International | 18,228 |  |  | 49,800 |  |  | 37,600 |
Total | $ | 306,120 |  |  | $ | 506,639 |  |  | $ | 608,326 |
Contract Costs Contract costs include all direct material, labor and subcontract costs and those indirect costs related to contract performance, such as indirect labor, supplies and tools. Also included in contract costs are a portion of those indirect contract costs related to plant capacity, such as depreciation, insurance and repairs and maintenance. These indirect costs are allocated to jobs based on actual direct labor hours incurred. We define pass-through costs as material, freight, equipment rental, and sub-contractor services included in the direct costs of revenue associated with projects. Pass-through costs have no impact in the determination of gross margin recognized for the related project for a particular period. Pass-through costs as a percentage of revenue were 44.4%, 48.2% and 58.5% for the years ended December 31, 2015, 2014 and 2013, respectively. Some of our contracts contain provisions that require us to pay liquidated damages if we are responsible for the failure to meet specified contractual milestone dates and the applicable customer asserts a claim under those provisions. Those contracts define the conditions under which our customers may make claims against us for liquidated damages. In 2014, we had one asserted liquidated damages claim in the amount of $0.3 million that was fully settled, related to the fabrication of an offshore supply vessel. Other than the aforementioned claim, as of March 9, 2016, we were not aware of any asserted or unasserted liquidated damage claims by any of our customers.

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