NOTE 8 SUPPLEMENTARY FINANCIAL STATEMENT INFORMATION

TEMPORARY INVESTMENTS

Temporary investments with an original maturity of three months or less are treated as cash equivalents and are stated at cost. Temporary investments totaled $661 million and $757 million at December 31, 2017 and 2016, respectively.

ACCOUNTS AND NOTES RECEIVABLE

Accounts and notes receivable, net of allowances, by classification were:



In millions at December 31	2017		2016
Accounts and notes receivable:
Trade	$	3,017	$	2,612
Other	270		240
Total	$	3,287	$	2,852

INVENTORIES



In millions at December 31	2017		2016
Raw materials	$	274	$	286
Finished pulp, paper and packaging products	1,337		1,231
Operating supplies	615		616
Other	87		100
Inventories	$	2,313	$	2,233

The last-in, first-out inventory method is used to value most of International Paper’s U.S. inventories. Approximately 71% of total raw materials and finished products inventories were valued using this method. The last-in, first-out inventory reserve was $293 million and $290 million at December 31, 2017 and 2016, respectively.

PLANTS, PROPERTIES AND EQUIPMENT



In millions at December 31	2017		2016
Pulp, paper and packaging facilities	$	32,523	$	30,943
Other properties and equipment	1,291		1,308
Gross cost	33,814		32,251
Less: Accumulated depreciation	20,549		19,248
Plants, properties and equipment, net	$	13,265	$	13,003

Annual straight-line depreciable lives generally are, for buildings - 20 to 40 years, and for machinery and equipment - 3 to 20 years. Depreciation expense was $1.2 billion, $1.0 billion and $1.1 billion for the years ended December 31, 2017, 2016 and 2015, respectively. Cost of products sold excludes depreciation and amortization expense.

INTEREST

Interest payments of $782 million, $682 million and $680 million were made during the years ended December 31, 2017, 2016 and 2015, respectively.

Amounts related to interest were as follows:



In millions	2017		2016		2015
Interest expense (a)	$	758	$	695	$	644
Interest income (a)	186		175		89
Capitalized interest costs	25		28		25


(a)	Interest expense and interest income exclude approximately $25 million in 2015 related to investments in and borrowings from variable interest entities for which the Company has a legal right of offset (see Note 12).

ASSET RETIREMENT OBLIGATIONS

At December 31, 2017 and December 31, 2016, we had recorded liabilities of $86 million and $83 million, respectively, related to asset retirement obligations.