NOTE 3: INVENTORIES

Inventories at December 31 are as follows:



in thousands	2013	2012
Inventories
Finished products 1	$ 270,603	$ 262,886
Raw materials	29,996	27,758
Products in process	6,613	5,963
Operating supplies and other	37,394	38,415
Total	$ 344,606	$ 335,022


1	Includes inventories encumbered by the purchaser's percentage of volumetric production payments (see Note 1, Deferred Revenue), as follows: December 31, 2013 — $4,492 thousand and December 31, 2012 — $8,726 thousand.

In addition to the inventory balances presented above, as of December 31, 2013 and December 31, 2012, we have $27,331,000 and $35,477,000, respectively, of inventory classified as long-term assets (Other noncurrent assets) as we do not expect to sell the inventory within one year. Inventories valued under the LIFO method total $268,674,000 at December 31, 2013 and $267,591,000 at December 31, 2012. During 2013, 2012 and 2011, 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 2013 results was to decrease cost of goods sold by $1,310,000 and increase net earnings by $802,000.The effect of the LIFO liquidation on 2012 results was to decrease cost of goods sold by $1,124,000 and increase net earnings by $688,000.The effect of the LIFO liquidation on 2011 results was to decrease cost of goods sold by $1,288,000 and increase net earnings by $776,000.

Estimated current cost exceeded LIFO cost at December 31, 2013 and 2012 by $184,409,000 and $150,654,000, respectively. We use the LIFO method of valuation for most of our inventories as it results in a better matching of costs with revenues. We provide supplemental income disclosures to facilitate comparisons with companies not on LIFO. The supplemental income calculation is derived by tax-effecting the change in the LIFO reserve for the periods presented. If all inventories valued at LIFO cost had been valued under the methods (substantially average cost) used prior to the adoption of the LIFO method, the approximate effect on net earnings would have been an increase of $20,812,000 in 2013, an increase of $5,990,000 in 2012 and an increase of $10,050,000 in 2011.