Inventories

Inventories are stated at the lower of cost or market value. In the United States, we manufacture certain finished products and parts inventories for drill bits, completion products, bulk materials, and other tools that are recorded using the last-in, first-out method, which totaled $187 million as of March 31, 2015 and $227 million as of December 31, 2014. If the average cost method had been used, total inventories would have been $36 million higher than reported as of March 31, 2015 and $38 million higher than reported as of December 31, 2014. The cost of the remaining inventory was recorded on the average cost method. Inventories consisted of the following:



Millions of dollars	March 31, 2015		December 31, 2014
Finished products and parts	$	2,367	$	2,606
Raw materials and supplies	883		754
Work in process	217		211
Total	$	3,467	$	3,571

During the first quarter of 2015, as a result of the recent downturn in the energy market and its corresponding impact on our business outlook, we determined the cost of some of our inventory exceeded its market value; therefore, we recorded corresponding inventory write-downs. See Note 3 for further information about the impairments and other charges taken in the first quarter of 2015.

Finished products and parts are reported net of obsolescence reserves of $190 million as of March 31, 2015 and $161 million as of December 31, 2014.