INVENTORIES

Inventories consist of the following:



	June 29, 2018		December 31, 2017
In thousands
Merchandise for resale	$	151,372	$	151,520
Raw materials	15,313		18,871
Contracts and other work in process (including certain general stock materials)	105,620		171,403
Finished goods	18,753		25,643
Total	$	291,058	$	367,437

The decrease in contracts and other work in process (including certain general stock materials) was primarily attributable to the adoption of ASC 606.

9. INVENTORIES (CONTINUED)

Inventories include amounts associated with matters such as contract changes, negotiated settlements and claims for unanticipated contract costs. These amounts are as follows:



	June 29, 2018		December 31, 2017
In thousands
Contract changes, negotiated settlements and claims for unanticipated contract costs	$	64	$	4,375

As a result of the adoption of ASC 606, $4.3 million of claims in inventory at December 31, 2017 were reclassified to contract assets as part of the cumulative effect adjustment on January 1, 2018.

At June 29, 2018, and December 31, 2017, $42.0 million and $25.5 million, respectively, of K-MAX® inventory, including inventory associated with the new build aircraft, was included in contracts and other work in process inventory and finished goods on the Company's Condensed Consolidated Balance Sheets. Management believes that approximately $13.7 million of the K-MAX® inventory will be sold after June 29, 2019, based upon the anticipation of additional aircraft manufacturing and supporting the fleet for the foreseeable future.

At June 29, 2018, and December 31, 2017, $5.4 million and $6.2 million, respectively, of SH-2G(I) inventory was included in contracts and other work in process inventory on the Company's Condensed Consolidated Balance Sheets. Management believes that approximately $5.1 million of the SH-2G(I) inventory will be sold after June 29, 2019. This balance represents spares requirements and inventory to be used on SH-2G programs.