INVENTORIES

Inventoried costs contain amounts relating to long-term contracts and programs with long production cycles, a portion of which will not be realized within one year. Long-term contract inventory includes an immaterial amount of claims or other similar items subject to uncertainty concerning their determination or realization. Inventories are valued at the lower of cost or market.

The composition of inventories is as follows:



(In thousands)	September 30, 2017			December 31, 2016
Raw materials	$	189,326		$	189,228
Work-in-process	85,636			73,843
Finished goods	127,647			112,478
Inventoried costs related to U.S. Government and other long-term contracts	61,587			57,516
Gross inventories	464,196			433,065
Less: Inventory reserves	(55,240		)	(54,988		)
Progress payments applied, principally related to long-term contracts	(11,686		)	(11,103		)
Inventories, net	$	397,270		$	366,974

Inventoried costs related to long-term contracts include capitalized contract development costs related to certain aerospace and defense programs of $30.4 million and $28.8 million, as of September 30, 2017 and December 31, 2016, respectively. These capitalized costs will be liquidated as production units are delivered to the customers. As of September 30, 2017 and December 31, 2016, $4.1 million and $3.9 million, respectively, are scheduled to be liquidated under existing firm orders.