Inventories

Inventories at June 30, 2018 and December 31, 2017 were as follows (in millions):



	June 30, 2018			December 31, 2017
Raw materials and supplies	$	187.7		$	162.8
Work-in-process	972.8			955.5
Finished goods	176.9			165.0
Total inventories at current cost	1,337.4			1,283.3
Adjustment from current cost to LIFO cost basis	3.7			43.1
Inventory valuation reserves	(87.0		)	(121.5		)
Progress payments	—			(28.8		)
Total inventories, net	$	1,254.1		$	1,176.1

Inventories are stated at the lower of cost (LIFO, first-in, first-out (FIFO), and average cost methods) or market. Most of the Company’s inventory is valued utilizing the LIFO costing methodology. Inventory of the Company’s non-U.S. operations is valued using average cost or FIFO methods. Due to deflationary impacts primarily related to raw materials, the carrying value of the Company’s inventory as valued on LIFO exceeds current replacement cost, and based on a lower of cost or market value analysis, the Company maintains NRV inventory valuation reserves to adjust carrying value of LIFO inventory to current replacement cost. These NRV reserves were $47.5 million at December 31, 2017 and $8.2 million at June 30, 2018. Impacts to cost of sales for changes in the LIFO costing methodology and associated NRV inventory reserves were as follows (in millions):



	Six months ended June 30,
	2018			2017
LIFO benefit (charge)	$	(27.5	)	$	(18.2	)
NRV benefit (charge)	27.5			18.1
Net cost of sales impact	$	—		$	(0.1	)

As a result of the adoption of ASC 606 on revenue recognition on January 1, 2018, progress payments were reclassified on the consolidated balance sheet from inventories to contract liabilities. In addition, a cumulative effect adjustment for the ASC 606 adoption relating to contracts requiring over-time revenue recognition resulted in a $34.2 million reduction to work-in-process inventory at the January 1 adoption date. A portion of that inventory is valued utilizing the LIFO costing methodology. As such, an $11.8 million reduction to the LIFO valuation balance was required, with an offsetting $11.8 million adjustment to the NRV reserve, resulting in no retained earnings impact. See Note 2 for further explanation of the ASC 606 adoption.