INVENTORIES

Inventories consist of the following:



	December 31,
	2015		2014
Raw materials	$	12,513	$	16,712
Work in progress	22,681		22,960
Manufactured and purchased components	19,224		21,296
Finished goods	28,169		32,403
Product inventory	82,587		93,371
Capitalized contract costs	32,188		20,908
Total inventories	$	114,775	$	114,279

Capitalized contract costs increased $6.0 million in 2015 related to an agreement the Company signed with Spirit Aerostructures ("Spirit") to form a strategically aligned partnership. This agreement extended the performance period of the statements of work for certain contracts with Spirit and gave the Company preferred supplier status on certain future contracts. In accordance with the contract terms, the Company made $6.5 million in cash payments of consideration to Spirit in 2015 which was recorded as an increase to capitalized contract costs in inventory in the Consolidated Balance Sheet. This consideration is being amortized as a reduction to revenue over the life of the related contracts.

The remaining increase in capitalized contract costs in 2015 relates primarily to four early-stage long-term contracts. The Company expects these costs will not be realized within one year but believes these amounts will be fully recovered over the life of the related contracts.

The following table illustrates the market to which capitalized contract cost at December 31, 2015 and December 31, 2014 related:



	December 31,
	2015		2014
Large commercial aircraft	$	11,528	$	4,776
Corporate and regional aircraft	16,721		13,324
Military	3,939		2,808
Total capitalized contract cost	$	32,188	$	20,908

In accordance with ASC 605-35-45-1&2, the provisions for anticipated losses on contracts are accounted for as additional contract cost and recognized as part of cost of sales. Provisions for losses are recorded as a reduction of related contract costs recorded in inventory. At December 31, 2015 and 2014, the Company had no contracts with loss reserves accounted for as a reduction of inventory.