McDermott International, Inc. is an integrated provider of engineering, construction, and installation solutions to the energy industry. In its 10-K for fiscal year 2018, the company disclosed the following information about its contracts with customers:

We have contracts that extend beyond one year. Most of our long-term contracts have provisions for progress payments Revenues for our contracts that satisfy the criteria for over-time recognition are recognized as the work progresses. We generally recognize our contract revenues and related costs on a percentage-of-completion basis We measure transfer of control utilizing an input method to measure progress of the performance obligation based upon the cost-to-cost measure of progress, as it best depicts the transfer of assets to the customer

The companys consolidated balance sheet is summarized here:

The line item for Contracts in progress most likely represents what?

-The total of accounts receivable less construction in progress on long-term contracts with customers in which accounts receivable is greater than construction in progress.

-The total of billings on construction in progress less construction in progress on long-term contracts with customers in which billings on construction in progress is greater than construction in progress.

-The total of construction in progress less billings on construction in progress on long-term contracts with customers in which construction in progress is greater than billings on construction in progress.

-The total of construction in progress less accounts receivable on long-term contracts with customers in which construction in progress is greater than accounts receivable.

December 31, 2018 2017 (In $ millions) Assets Current assets: Cash and cash equivalents Accounts receivable Contracts in progress Inventory 408 370 621 845 1107 704 101 276 6407 9,440 36 1788 Non-current assets Total assets 3,223 Liabilities and Stockholders' Equity Current liabilities: Accounts payable Advance billings on contracts Other current liabilities Non-current liabilities Total liabilities Total stockholders' equity 595 1,954 1,668 4170 8,387 279 32 396 727 1,434 1,789 823 Total liabilities and stockholders' equity 9,440 3,223