NOTE 3: INVENTORIES

Inventories at December 31 are as follows:



in thousands	2017	2016
Inventories
Finished products 1	$ 327,711	$ 293,619
Raw materials	27,152	22,648
Products in process	1,827	1,480
Operating supplies and other	27,648	27,869
Total	$ 384,338	$ 345,616


1	Includes inventories encumbered by volumetric production payments (see Note 1, caption Deferred Revenue), as follows: December 31, 2017 — $2,808 thousand and December 31, 2016 — $2,841 thousand.

In addition to the inventory balances presented above, as of December 31, 2017 and December 31, 2016, we have $11,810,000 and $15,285,000, respectively, of inventory classified as long-term assets (other noncurrent assets) as we do not expect to sell the inventory within one year of their respective balance sheet dates. Inventories valued under the LIFO method total $252,808,000 at December 31, 2017 and $239,187,000 at December 31, 2016. During 2017, 2016 and 2015, inventory reductions resulted in liquidations of LIFO inventory layers carried at lower costs prevailing in prior years as compared to current-year costs. The effect of the LIFO liquidation on 2017 results was to decrease cost of revenues by $2,714,000 and increase net earnings by $1,662,000. The effect of the LIFO liquidation on 2016 results was to decrease cost of revenues by $3,956,000 and increase net earnings by $2,419,000. The effect of the LIFO liquidation on 2015 results was to decrease cost of revenues by $3,284,000 and increase net earnings by $2,010,000.

Estimated current cost exceeded LIFO cost at December 31, 2017 and 2016 by $168,829,000 and $155,576,000, respectively. We use the LIFO method of valuation for most of our inventories as it results in a better matching of costs with revenues. In periods of increasing costs, LIFO generally results in higher cost of revenues than under FIFO. In periods of decreasing costs, the results are generally the opposite. We provide supplemental income disclosures to facilitate comparisons with companies not on LIFO. The supplemental income calculation is derived by tax-affecting the change in the LIFO reserve for the periods presented. If all inventories valued at LIFO cost had been valued under first-in, first-out (FIFO) method, the approximate effect on net earnings would have been an increase of $8,092,000 in 2017, a decrease of $(8,338,000) in 2016 and a decrease of $(7,614,000) in 2015.