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)	2015			2014
Raw material	$	196,684		$	201,998
Work-in-process	79,406			89,423
Finished goods	114,931			103,831
Inventoried costs related to U.S. Government and other long-term contracts	51,774			59,070
Gross inventories	442,795			454,322
Less: Inventory reserves	(48,904		)	(51,435		)
Progress payments applied, principally related to long-term contracts	(14,300		)	(14,217		)
Inventories, net	$	379,591		$	388,670

As of December 31, 2015 and 2014, inventory also includes capitalized contract development costs of $29.7 million and $33.9 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, 2015 and 2014, $2.5 million and $7.2 million, respectively, are scheduled to be liquidated under existing firm orders.