INVENTORIES

Inventories consist of the following:



	At December 31,
	2014		2013
In thousands
Merchandise for resale	$	149,837	$	152,194
Raw materials	19,954		20,609
Contracts in process:
U.S. Government, net of progress payments of $8,590 and $10,492 in 2014 and 2013, respectively	106,036		105,737
Commercial and other government contracts	51,348		71,044
Other work in process (including certain general stock materials)	21,618		28,439
Finished goods	10,948		12,472
Total	$	359,741	$	390,495

The decrease in commercial and other government contracts in 2014 is primarily attributable to the sale of SH-2G(I) inventory.

General and administrative costs incurred by the Aerospace segment operations that charged such costs to inventory during 2014 and 2013 were $39.2 million and $37.4 million, respectively. The estimated amounts of general and administrative costs remaining in contracts in process at December 31, 2014 and 2013, are $10.2 million and $5.4 million, respectively. These estimates are based on the ratio of such costs to total costs of production.

The Company had inventory of $7.4 million and $8.0 million as of December 31, 2014 and 2013, respectively, on consignment at customer locations, the majority of which is located with Distribution segment customers.

Inventories include amounts associated with matters such as contract changes, negotiated settlements and claims for unanticipated contract costs, which totaled $13.3 million and $11.6 million at December 31, 2014 and 2013, respectively.

K-MAX® inventory of $17.2 million and $17.0 million as of December 31, 2014 and 2013, respectively, is included in contracts and other work in process inventory and finished goods. Management believes that a significant portion of this K-MAX® inventory will be sold after December 31, 2015, based upon the anticipation of supporting the fleet for the foreseeable future.

At December 31, 2014 and 2013, $23.5 million and $43.8 million, respectively, of SH-2G(I), formerly SH-2G(A), inventory was included on the Company's balance sheet in contracts and other work in process inventory. On May 8, 2013, the Company announced that it had entered into a $120.6 million contract with the New Zealand MoD for the sale of ten SH-2G(I) Super Seasprite aircraft, spare parts, a full mission flight simulator, and related logistics support. Although a substantial portion of the SH-2G(I) inventory will be used in the performance of this new contract, management believes that $4.1 million of the SH-2G(I) inventory will be sold after December 31, 2015, based upon the time needed to prepare the aircraft for sale and the requirements of our customer.