INVENTORIES

Inventories consist of the following:



	At December 31,
	2015		2014
In thousands
Merchandise for resale	$	161,691	$	149,837
Raw materials	24,721		19,954
Contracts in process:
U.S. Government, net of progress payments of $28,812 and $8,590 in 2015 and 2014, respectively	88,345		106,036
Commercial and other government contracts	61,197		51,348
Other work in process (including certain general stock materials)	26,588		21,618
Finished goods	23,205		10,948
Total	$	385,747	$	359,741

General and administrative costs charged to inventory by Aerospace segment operations during 2015 and 2014 were $15.8 million and $39.2 million, respectively. The estimated amounts of general and administrative costs remaining in contracts in process at December 31, 2015 and 2014, are $13.5 million and $10.2 million, respectively. These estimates are based on the ratio of such costs to total costs of production.

The Company had inventory of $6.5 million and $7.4 million as of December 31, 2015 and 2014, 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 $7.1 million and $13.3 million at December 31, 2015 and 2014, respectively. The reduction in this balance is due to the resolution of the of the AH-1Z claims as discussed further in Note 16, Commitments and Contingencies.

K-MAX® inventory of $14.9 million and $17.2 million as of December 31, 2015 and 2014, 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, 2016, based upon the anticipation of additional aircraft manufacturing and supporting the fleet for the foreseeable future.

At December 31, 2015 and 2014, $9.0 million and $23.5 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. Management believes that approximately $4.8 million of the SH-2G(I) inventory will be sold after December 31, 2016. This balance represents spares requirements and inventory to be used in SH-2G programs.