INVENTORY AND INVENTORY VALUATION

6 Months Ended

Jun. 30, 2023

The following table summarizes the components of “Inventory” on the Condensed Consolidated Balance Sheets (in millions):


	December 31, 2022		June 30, 2023
Raw materials and work in progress	$	949	$	1,465
Finished goods	399		696
Total inventory	$	1,348	$	2,161

Inventory is stated at the lower of cost or net realizable value (“LCNRV”) and consists of raw materials, work in progress, finished goods, and service parts. The balance of the Company’s inventory was written down by $582 million and $379 million from its cost to its net realizable value as of December 31, 2022 and June 30, 2023, respectively. Additionally, the Company has LCNRV losses related to firm purchase commitments which were $338 million and $179 million as of December 31, 2022 and June 30, 2023, respectively, and are reflected in the inventory component of “Accrued liabilities” on the Condensed Consolidated Balance Sheets. Refer to Note 6 "Accrued Liabilities" for more information about Accrued liabilities.

The Company recorded a $301 million and $220 million charge to reflect the LCNRV of inventory and losses on firm purchase commitments as of June 30, 2022 and June 30, 2023, respectively, in “Cost of revenues” in the Company’s Condensed Consolidated Statements of Operations.