Inventories

Inventories are stated at the lower of cost and net realizable 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 $135 million as of March 31, 2017 and $133 million as of December 31, 2016. If the average cost method had been used, total inventories would have been $18 million higher than reported as of March 31, 2017 and $16 million higher as of December 31, 2016. The cost of the remaining inventory was recorded using the average cost method. Inventories consisted of the following:



Millions of dollars	March 31, 2017		December 31, 2016
Finished products and parts	$	1,448	$	1,388
Raw materials and supplies	713		778
Work in process	134		109
Total	$	2,295	$	2,275

All amounts in the table above are reported net of obsolescence reserves of $265 million as of March 31, 2017 and $263 million as of December 31, 2016.