Halliburton 2015 Annual Report Download - page 76

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59
Note 6. Inventories
Inventories are stated at the lower of cost or market. 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 and totaled $120 million at December 31, 2015 and $227 million at December 31, 2014. If the average cost method
had been used, there would have been no difference reported at December 31, 2015 and total inventories would have been $38
million higher than reported at December 31, 2014. The cost of the remaining inventory was recorded on the average cost
method. Inventories consisted of the following:
December 31
Millions of dollars 2015 2014
Finished products and parts $ 1,747 $ 2,606
Raw materials and supplies 548 754
Work in process 122 211
Total $ 2,417 $ 3,571
We reclassified $576 million of our inventory to assets held for sale as of December 31, 2015. See Note 2 for further
information. Additionally, as a result of the downturn in the energy market and its corresponding impact on our business
outlook, we recorded inventory write-downs as the cost of some of our inventory exceeded its market value. See Note 3 for
further information about impairments and other charges.
Finished products and parts are reported net of obsolescence reserves of $218 million at December 31, 2015 and $161
million at December 31, 2014.
Note 7. Property, Plant, and Equipment
Property, plant, and equipment were composed of the following:
December 31
Millions of dollars 2015 2014
Land $ 232 $ 217
Buildings and property improvements 3,359 3,311
Machinery, equipment, and other 17,109 19,954
Total 20,700 23,482
Less accumulated depreciation 9,789 11,007
Net property, plant, and equipment $ 10,911 $ 12,475
Classes of assets, excluding oil and natural gas investments, are depreciated over the following useful lives:
Buildings and Property
Improvements
2015 2014
1 - 10 years 12% 12%
11 - 20 years 41% 42%
21 - 30 years 22% 21%
31 - 40 years 25% 25%
Machinery, Equipment,
and Other
2015 2014
1 - 5 years 23% 23%
6 - 10 years 69% 70%
11 - 20 years 8% 7%