Inventories

12 Months Ended

Dec. 31, 2022

INVENTORIES

Inventories consist of the following:


	At December 31,
	2022		2021
In thousands
Raw materials	$	25,798	$	19,123
Contracts in process:
US Government	5,835		1,985
Commercial and other government contracts	85,436		61,637
Contracts and other work in process (including certain general stock materials)	19,338		75,115
Finished goods	40,061		35,240
Inventories	$	176,468	$	193,100

Inventories include amounts associated with matters such as contract changes, negotiated settlements and claims for unanticipated contract costs. There were no such matters at December 31, 2022. These items totaled $0.6 million at December 31, 2021.

In December 2022, the Company began a review of all businesses and programs to increase efficiencies, improve working capital management and focus on sustainable and consistent revenue and profit generating activities. As a result of this review, the Company determined that it will discontinue the production of the K-MAX® medium-to-heavy lift helicopters and K-MAX TITAN unmanned aerial system in 2023. The Company will continue to support the existing K-MAX® fleet in operation, including providing operators with repair, spare parts and fleet services, as well as training. As a result of this decision, management wrote off $44.5 million of inventory associated with these programs in the year ended December 31, 2022. This amount was included in program inventory impairment on the Company's Consolidated Statements of Operations. The amount written off was comprised of a lower of cost or net realizable value write down on three unsold aircraft and unusable inventory. Unusable inventory includes long lead parts made specifically for the production of the K-MAX® for which there are no alternative uses and spare parts and blades that were in excess of the amounts needed to support the existing fleet. At December 31, 2022 and 2021, $24.7 million and $69.2 million, respectively, of K-MAX® inventory was included in contracts and other work in process inventory and finished goods on the Company's Consolidated Balance Sheets. Management believes that approximately $22.5 million of the K-MAX® inventory will be sold after December 31, 2023, based upon supporting the fleet for the foreseeable future.

At December 31, 2022 and 2021, $6.2 million and $6.0 million, respectively, of SH-2G(I) inventory was included in contracts and other work in process inventory on the Company's Consolidated Balance Sheets. Management believes that approximately $5.3 million of the SH-2G(I) inventory will be sold after December 31, 2023. This balance represents spares requirements and inventory to be used in SH-2G programs.