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 is as follows:



	(In thousands)
	March 31, 2015			December 31, 2014
Raw materials	$	208,380		$	201,998
Work-in-process	85,119			89,423
Finished goods and component parts	107,670			103,831
Inventoried costs related to long-term contracts	54,707			59,070
Gross inventories	455,876			454,322
Less: Inventory reserves	(51,180		)	(51,435		)
Progress payments applied	(14,508		)	(14,217		)
Inventories, net	$	390,188		$	388,670

Inventoried costs related to long-term contracts include capitalized contract development costs related to certain aerospace and defense programs of $29.4 million and $33.9 million, as of March 31, 2015 and December 31, 2014, respectively. These capitalized costs will be liquidated as production units are delivered to the customer. As of March 31, 2015 and December 31, 2014, $3.4 million and $7.2 million, respectively, are scheduled to be liquidated under existing firm orders.