
3.	INVENTORIES

Inventories consisted of the following (in millions):



	September 30, 2016		December 31, 2015
Refinery feedstocks	$	2,244	$	2,404
Refined products and blendstocks	3,283		3,774
Ethanol feedstocks and products	202		242
Materials and supplies	250		244
Inventories, before lower of cost or market inventory valuation reserve	5,979		6,664
Lower of cost or market inventory valuation reserve	—		(766		)
Inventories	$	5,979	$	5,898

Inventories are valued at the lower of cost or market. As of December 31, 2015, we had a valuation reserve of $766 million in order to state our inventories at market. As of September 30, 2016, we reevaluated our inventories and determined that our cost was lower than market. As a result, for the nine months ended September 30, 2016, we recorded a change in our lower of cost or market inventory valuation reserve that resulted in a net benefit to our results of operations of $747 million. The income statement benefit for the nine months ended September 30, 2016 differs from the change in the balance sheet reserve due to the foreign currency effect of inventories held by our international operations.

As of September 30, 2016, the replacement cost (market value) of last-in, first-out (LIFO) inventories exceeded their LIFO carrying amounts by $1.2 billion. As of September 30, 2016 and December 31, 2015, our non-LIFO inventories accounted for $675 million and $668 million, respectively, of our total inventories.