Inventory

3 Months Ended

Mar. 31, 2023

Inventory Disclosure [Abstract]

Inventory

Inventory

Inventory as of March 31, 2023 and December 31, 2022 consisted of the following (in millions):

	March 31,		December 31,
	2023		2022
Raw materials	$	475	$	575
Work in progress	193		205
Finished goods	64		169
Total inventory	$	732	$	949
Inventory, non-current(1)	$	874	$	910

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(1) Consisted of raw materials with an anticipated consumption beyond one year. Inventory, non-current is included in other non-current assets in the condensed consolidated balance sheets.

Inventory write-downs as a result of excess, obsolescence, scrap or other reasons, and losses on firm purchase commitments are recorded as a component of cost of sales in our condensed consolidated statements of operations. For the three months ended March 31, 2023 and 2022, inventory write-downs were $148 million and $189 million, respectively. For the three months ended March 31, 2023 and 2022, losses on firm purchase commitments were $66 million and $159 million, respectively. Inventory write-downs were mainly related to obsolete inventory due to shelf-life expiration and inventory in excess of expected demand. Losses on firm purchase commitments were primarily related to excess raw material purchase commitments that will expire before the anticipated consumption of those raw materials. These charges in 2023 were primarily driven by a continued shift in product demand to the latest variant-targeted COVID-19 vaccines and a decline in customer demand, primarily from lower-income countries, as the COVID-19 vaccine market continues to shift to an endemic seasonal market in 2023. As of March 31, 2023 and December 31, 2022, the accrued liability for losses on firm future purchase commitments in our condensed consolidated balance sheets was $220 million and $268 million, respectively. As of March 31, 2023, we had inventory on hand of $1.6 billion. Our raw materials and work-in-progress inventory had variable shelf lives and were expected to be consumed over the next three years. The shelf life of our COVID-19 vaccine products is nine months.