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)	September 30, 2016			December 31, 2015
Raw materials	$	205,598		$	196,684
Work-in-process	83,933			79,406
Finished goods and component parts	117,681			114,931
Inventoried costs related to long-term contracts	56,428			51,774
Gross inventories	463,640			442,795
Less: Inventory reserves	(52,531		)	(48,904		)
Progress payments applied	(11,471		)	(14,300		)
Inventories	$	399,638		$	379,591

Inventoried costs related to long-term contracts include capitalized contract development costs related to certain aerospace and defense programs of $29.9 million and $29.7 million, as of September 30, 2016 and December 31, 2015, respectively. These capitalized costs will be liquidated as production units are delivered to the customers. As of September 30, 2016 and December 31, 2015, $1.7 million and $2.5 million, respectively, are scheduled to be liquidated under existing firm orders.