Inventories

6 Months Ended

Jun. 30, 2017

Inventory Disclosure [Abstract]

Inventories

12. Inventories

Costs included in inventories are raw materials, labor, supplies and allocable depreciation and overhead. Raw material inventories are valued on an average cost basis. Other inventory cost elements are valued at cost, using the first-in, first-out method. The Company writes down the inventories for estimated obsolescence, and to lower of cost or net realizable value based upon assumptions about future demand and market conditions. If actual demand or market conditions are less favorable than those projected by the Company, additional inventory write-downs may be required. Once established, the original cost of the inventory less the related write-down represents the new cost basis of such inventories. The AEC segment has long-term contracts under which we incur engineering and development costs that are allocable to parts that will be delivered over multiple years. These costs are included in Work in process in the table below.

As of June 30, 2017 and December 31, 2016, inventories consisted of the following:

(in thousands)	June 30, 2017	December 31, 2016
Raw materials	$40,474	$37,691
Work in process	75,917	58,715
Finished goods	35,143	37,500
Total inventories	$151,534	$133,906