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)	2014			2013
Raw material	$	201,998		$	231,219
Work-in-process	89,423			114,372
Finished goods	103,831			117,444
Inventoried costs related to U.S. Government and other long-term contracts	59,070			58,796
Gross inventories	454,322			521,831
Less: Inventory reserves	(51,435		)	(54,400		)
Progress payments applied, principally related to long-term contracts	(14,217		)	(15,344		)
Inventories, net	$	388,670		$	452,087

As of December 31, 2014 and 2013, inventory also includes capitalized contract development costs of $33.9 million and $37.1 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, 2014 and 2013, $7.2 million and $13.8 million, respectively, are scheduled to be liquidated under existing firm orders.