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INVENTORIES

12 Months Ended

Dec. 31, 2011

4. 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. Inventories are valued at the lower of cost (principally average cost) or market. The composition of inventories is as follows as of December 31:

(In thousands)			2011		2010
Raw material		$	168,619	$	147,950
Work-in-process			97,420		69,302
Finished goods and component parts			81,544		73,419
Inventoried costs related to U.S. Government and other long-term contracts			35,347		41,029
Gross inventories			382,930		331,700
Less: Inventory reserves			(48,547)		(41,596)
	Progress payments applied, principally related to long-term contracts		(13,750)		(9,001)
Inventories, net		$	320,633	$	281,103

The net inventory balance at December 31, 2011 included $19.4 million related to the Corporation's 2011 acquisitions.

As of December 31, 2011 and 2010, inventory also includes capitalized contract development costs of $17.5 million and $24.9 million, respectively, related to certain aerospace and defense programs. These capitalized costs will be liquidated as production units are delivered to the customer. As of December 31, 2011 and 2010, $9.4 million and $0.7 million, respectively, are scheduled to be liquidated under existing firm orders.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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