Note 4. Inventories

Inventories are stated at the lower of cost or market. Cost is determined using FIFO or the weighted average cost method. Finished goods and work-in-process inventories include material, labor and manufacturing overhead costs. In accordance with industry practice, costs in inventory include amounts relating to long-term contracts with long production cycles and inventory items with long procurement cycles, some of which are not expected to be realized within one year. Work-in-process inventories include costs and estimated earnings in excess of billings on uncompleted contracts of $127.7 and $107.5 and excess over average costs on long-term contracts of $263.0 and $213.4 as of June 30, 2014 and December 31, 2013, respectively. Finished goods inventories primarily consist of aerospace fasteners. Inventory reserves were approximately $70.7 and $64.4 as of June 30, 2014 and December 31, 2013, respectively. Inventories, net of reserves, consist of the following:

	June 30, 2014		December 31, 2013
Purchased materials and component parts	$	304.2	$	243.4
Work-in-process		555.9		484.0
Finished goods		1,273.0		1,216.4
	$	2,133.1	$	1,943.8