3 Inventories

millions of €
  Dec. 31, 2017 Dec. 31, 2016
Raw materials and supplies 54 71
Work in process 13 18
Finished goods and merchandise 1,918 1,540
  1,985 1,629

The carrying amount of inventories increased by EUR 0.4 billion compared to December 31, 2016 to EUR 2.0 billion. This was mainly due to higher inventories of terminal equipment (in particular new higher-priced ­smartphone models) in the United States and Germany operating segments as of the reporting date. Exchange rate effects primarily from the translation from U.S. dollars into euros had an offsetting effect.

Write-downs of EUR 27 million (2016: EUR 46 million; 2015: EUR 121 million) on the net realizable value were recognized in 2017 and are shown in profit or loss.

The carrying amount of inventories expensed during the reporting period was EUR 13,358 million
(2016: EUR 13,295 million; 2015: EUR 12,367 million).

The finished goods and merchandise primarily comprise retail products (e.g., terminal equipment and accessories) not manufactured by Deutsche Telekom and services rendered but not yet invoiced, primarily to business customers.