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 $115.3 and $107.5 and capitalized development costs on long-term seller furnished equipment contracts of $287.7 and $213.4 as of September 30, 2014 and December 31, 2013, respectively. Finished goods inventories primarily consist of aerospace fasteners. Inventory reserves were approximately $76.6 and $64.4 as of September 30, 2014 and December 31, 2013, respectively. Inventories, net of reserves, consist of the following:


	September 30, 2014		December 31, 2013
Purchased materials and component parts	$	305.3	$	243.4
Work-in-process		572.1		484.0
Finished goods		1,298.0		1,216.4
	$	2,175.4	$	1,943.8