6.Inventories

Inventories consisted of the following (in millions):

	March 31,		December 31,
	2017		2016
Raw materials	$	140.4	$	132.8
Work-in-process	195.2		181.0
Finished goods	104.7		91.8
Demonstration units	36.1		34.8

Inventories	$	476.4	$	440.4

Finished goods include in-transit systems that have been shipped to the Company’s customers, but not yet installed and accepted by the customer. As of March 31, 2017 and December 31, 2016, inventory-in-transit was $46.0 million and $37.5 million, respectively.

The Company reduces the carrying value of its demonstration inventories for differences between its cost and estimated market value through a charge to cost of product revenue that is based on a number of factors, including the age of the unit, the physical condition of the unit and an assessment of technological obsolescence. Amounts recorded in cost of revenue related to the write-down of demonstration units to net realizable value were $2.8 million and $4.8 million for the three months ended March 31, 2017 and 2016, respectively.

In July 2015, the FASB issued ASU No. 2015-11, Simplifying the Measurement of Inventory. The new guidance eliminates the measurement of inventory at market value, and inventory will now be measured at the lower of cost and net realizable value. The ASU defines net realizable value as the estimated selling prices in the ordinary course of business, less reasonably predictable costs of completion, disposal, and transportation. No other changes were made to the current guidance on inventory measurement. The Company adopted ASU 2015-11 on a prospective basis for the quarter ended March 31, 2017 and the adoption did not have a material impact on the Company’s unaudited condensed consolidated financial statements.