3.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 $127.9 and $107.5 and capitalized development costs on long-term seller furnished equipment contracts of $320.6 and $213.4 as of December 31, 2014 and December 31, 2013, respectively. Inventories consist of the following:


	December 31,		December 31,
	2014		2013
Purchased materials and component parts	$	309.1	$	243.4
Work-in-process		605.9		484.0
Finished goods		61.0		1,280.8
Inventory reserves		(50.8)		(64.4)
	$	925.2	$	1,943.8