Inventories, Net

Inventories, net are summarized as follows:



(in millions)	December 31, 2017			September 30, 2017
Finished goods	$	271		$	259
Work in process	364			347
Raw materials, parts and supplies	741			677
Less progress payments	(7		)	(7		)
Total	1,369			1,276
Pre-production engineering costs	1,188			1,175
Inventories, net	$	2,557		$	2,451

The Company defers certain pre-production engineering costs during the development phase of a program, in connection with long-term supply arrangements that contain contractual guarantees for reimbursement from customers. Such customer guarantees generally take the form of a minimum order quantity with quantified reimbursement amounts if the minimum order quantity is not taken by the customer. These costs are deferred to the extent of the contractual guarantees and are amortized over their estimated useful lives using a units-of-delivery method, up to 15 years. This amortization expense is included as a component of cost of sales. Amortization is based on the Company's expectation of delivery rates on a program-by-program basis and begins when the Company starts recognizing revenue as the Company delivers equipment for the program. The estimated useful life is limited to the amount of time the Company is virtually assured to earn revenues under long-term supply arrangements with the Company's customers. Pre-production engineering costs incurred pursuant to supply arrangements that do not contain contractual guarantees for reimbursement are expensed as incurred.

Anticipated annual amortization expense for pre-production engineering costs is as follows:



(in millions)	2018		2019		2020		2021		2022		Thereafter
Anticipated amortization expense for pre-production engineering costs	$	90	$	132	$	149	$	147	$	139	$	550

Amortization expense for pre-production engineering costs for the three months ended December 31, 2017 and 2016 was $19 million and $11 million, respectively. As of December 31, 2017, the weighted average amortization period remaining for pre-production engineering costs included in Inventories, net was approximately 10 years.