Inventory

12 Months Ended

Dec. 31, 2018

Crude oil, work in process, refined products, blendstocks and asphalt inventory for all of our operations, excluding the Tyler refinery and merchandise inventory in our retail segment, are stated at the lower of cost determined using the FIFO basis or net realizable value. Cost of all inventory at the Tyler refinery is determined using the LIFO inventory valuation method and inventory is stated at the lower of LIFO cost or market. Retail merchandise inventory consists of cigarettes, beer, convenience merchandise and food service merchandise and is stated at estimated cost as determined by the retail inventory method.

Carrying value of inventories consisted of the following (in millions):



	December 31, 2018		December 31, 2017
Refinery raw materials and supplies	$	289.0	$	308.0
Refinery work in process	58.9		79.2
Refinery finished goods	304.1		366.4
Retail fuel	8.0		8.3
Retail merchandise	25.4		25.6
Logistics refined products	5.5		20.9
Total inventories	$	690.9	$	808.4

At December 31, 2018, we recorded a pre-tax inventory valuation reserve of $54.0 million, $39.4 million of which related to LIFO inventory due to a market price decline below our average cost of certain inventory products, which is subject to reversal in subsequent periods, not to exceed LIFO cost, should market prices recover. At December 31, 2017, we recorded a pre-tax inventory valuation reserve of $2.4 million, $1.5 million of which related to LIFO inventory, which reversed in the first quarter of 2018. For the years ended December 31, 2018, 2017 and 2016, we recognized net LIFO inventory valuation (losses) gains related to the pre-tax valuation of $(37.9) million, $14.5 million and $33.8 million, respectively, which were recorded as a component of cost of materials and other in the accompanying consolidated statements of income.

At December 31, 2018 and 2017, the excess of replacement cost over the carrying value (LIFO) of the Tyler refinery inventories was $1.5 million and $9.0 million, respectively.

Permanent Liquidations

We incurred a permanent reduction in a LIFO layer resulting in liquidation (loss) gain in our refinery inventory of $(7.5) million, $0.9 million and $(2.2) million during the years ended December 31, 2018, 2017 and 2016, respectively. These liquidation (losses) gains were recognized as a component of cost of materials and other in the accompanying consolidated statements of income.