5. INVENTORIES

Inventoried costs contain amounts relating to long-term contracts and programs with long production cycles, a portion of which will not be realized within one year. Long term contract inventory includes an immaterial amount of claims or other similar items subject to uncertainty concerning their determination or realization. Inventories are valued at the lower of cost or market. The composition of inventories as of December 31 is as follows:



(In thousands)	2013			2012
Raw material	$	231,219		$	224,613
Work-in-process	114,372			92,761
Finished goods and component parts	117,444			107,173
Inventoried costs related to U.S. Government and other long-term contracts	58,796			38,000
Gross inventories	521,831			462,547
Less: Inventory reserves	(54,400		)	(50,333		)
Progress payments applied, principally related to long-term contracts	(15,344		)	(14,743		)
Inventories, net	$	452,087		$	397,471

The net inventory balance at December 31, 2013 included $26.4 million related to the Corporation’s 2013 acquisitions.

As of December 31, 2013 and 2012, inventory also includes capitalized contract development costs of $37.1 million and $23.8 million, respectively, related to certain aerospace and defense programs. These capitalized costs will be liquidated as production units are delivered to the customer. As of December 31, 2013 and 2012, $13.8 million and $5.4 million, respectively, are scheduled to be liquidated under existing firm orders.