not limited to: labor productivity, the nature and technical complexity of the work to be performed, availability and cost volatility of materials, subcontractor and vendor performance, warranty costs, volume assumptions, anticipated labor agreements, inflationary trends, schedule and performance delays, availability of funding from the customer, and the recoverability of costs incurred outside the original contract included in any estimates to complete. When the Company’s estimate of total costs to be incurred to satisfy a performance obligation exceeds the expected revenue, the Company recognizes the loss immediately. When the Company determines that a change in estimates has an impact on the associated profit of a performance obligation, the Company records the cumulative positive or negative adjustment to the statement of operations. Changes in estimates and assumptions related to the status of certain long-term contracts may have a material effect on the Company’s operating results. The following table summarizes the impact of the changes in significant contract accounting estimates on the Company’s Aerospace and Defense segment operating results:  The 2020 net favorable changes in contract estimates were primarily driven by improved performance and risk retirements on the Terminal High Altitude Area Defense ("THAAD"), RS-68, RL10, and Patriot Advanced Capability-3 ("PAC-3") programs partially offset by cost growth on a portion of the Standard Missile program and the Commercial Crew program. The 2019 net favorable changes in contract estimates on income before income taxes were primarily driven by improved performance and risk retirements on the THAAD and PAC-3 programs. The 2018 net favorable changes in contract estimates on income before income taxes were primarily driven by risk retirements on the THAAD, RS-68, and RL10 programs and favorable overhead rate performance, partially offset by cost growth and performance issues on the Commercial Crew Development program. In the Company’s Aerospace and Defense segment, the timing of revenue recognition, customer invoicing, and collections produces accounts receivable, contract assets, and contract liabilities on the Company’s Consolidated Balance Sheet. The Company invoices in accordance with contract payment terms either based upon a recurring contract payment schedule, or as contract milestones are achieved. Customer invoices, net of reserves, represent an unconditional right of consideration. When revenue is recognized in advance of customer invoicing, a contract asset is recorded. Conversely, when customers are invoiced in advance of revenue recognition, a contract liability is recorded. Unpaid customer invoices are reflected as accounts receivable. Amounts for overhead disallowances or billing decrements are reflected in contract assets and primarily represent estimates of potential overhead costs which may not be successfully negotiated and collected. The following table summarizes contract assets and liabilities: Year Ended December 31, 2020 2019 2018 (In millions, except per share amounts) Net favorable effect of the changes in contract estimates on net sales $ 38.5  $ 38.6  $ 68.2  Favorable effect of the changes in contract estimates on income before income taxes 45.1  38.4  59.1  Favorable effect of the changes in contract estimates on net income 34.5  28.2  43.1  Favorable effect of the changes in contract estimates on basic earnings per share ("EPS") of common stock 0.44  0.36  0.56  Favorable effect of the changes in contract estimates on diluted EPS 0.42  0.34  0.55  As of December 31, 2020 2019 (In millions) Contract assets $ 294.3  $ 243.5  Reserve for overhead rate disallowance (5.7) (19.4) Contract assets, net of reserve 288.6  224.1  Contract liabilities 407.2  262.3  Net contract liabilities, net of reserve $ (118.6) $ (38.2) Net contract liabilities increased by $80.4 million primarily due to an increase in contract advances partially offset by an increase in unbilled receivables. The decrease of $13.7 million in the reserve for overhead rate disallowance was primarily due to adjustments for final incurred costs from prior years which were subject to audit and review for allowability by the U.S. government. During 2020, the Company recognized sales of $223.3 million that were included in the Company’s contract liabilities as of December 31, 2019. During 2019, the Company recognized sales of $240.6 million that were included in the Company’s contract liabilities as of December 31, 2018. Contract assets included unbilled receivables of $286.0 million and $232.4 million as of December 31, 2020 and 2019, respectively. Approximately 19% of unbilled receivables at December 31, 2020, are expected to be collected after one year. As of December 31, 2020, the Company’s total remaining performance obligations, also referred to as backlog, totaled $6.7 billion. The Company expects to recognize approximately 32%, or $2.2 billion, of the remaining performance obligations as sales over the next twelve months, an additional 24% the following twelve months, and 44% thereafter. The Company's contracts are largely categorized as either "fixed-price" (largely used by the U.S. government for production-type contracts) or "cost- reimbursable" (largely used by the U.S. government for development-type contracts). Fixed-price contracts present the risk of unreimbursed cost overruns, potentially resulting in lower than expected contract profits and 50