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Inventories

6 Months Ended

Jun. 30, 2012

Note 2. Inventories

Inventories at June 30, 2012 and December 31, 2011 were as follows (in millions):

	June 30,		December 31,
	2012		2011

Raw materials and supplies	$	274.7	$	205.7
Work-in-process		1,174.0		1,150.0
Finished goods		226.6		199.9
Total inventories at current cost		1,675.3		1,555.6
Less allowances to reduce current cost values to LIFO basis		(146.6)		(153.7)
Progress payments		(16.2)		(17.6)
Total inventories, net	$	1,512.5	$	1,384.3

Inventories are stated at the lower of cost (last-in, first-out (“LIFO”), first-in, first-out (“FIFO”), and average cost methods) or market, less progress payments. Most of the Company's inventory is valued utilizing the LIFO costing methodology. Inventory of the Company's non-U.S. operations is valued using average cost or FIFO methods. The effect of using the LIFO methodology to value inventory, rather than FIFO, decreased cost of sales by $7.1 million for the first six months of 2012 compared to an increase of $9.1 million for the first six months of 2011.

- Definition

The entire disclosure for inventory. This may include, but is not limited to, the basis of stating inventory, the method of determining inventory cost, the major classes of inventory, and the nature of the cost elements included in inventory. If inventory is stated above cost, accrued net losses on firm purchase commitments for inventory and losses resulting from valuing inventory at the lower-of-cost-or-market may also be included. For LIFO inventory, may disclose the amount and basis for determining the excess of replacement or current cost over stated LIFO value and the effects of a LIFO quantities liquidation that impacts net income.

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