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Inventories

12 Months Ended

Dec. 31, 2011

Inventories

7. Inventories

Inventories (principally using the LIFO method) are comprised of the following:

		December 31,
(Millions of dollars)		2011			2010			2009
Raw materials		$	3,872		$	2,766		$	1,979
Work-in-process		2,845			1,483			656
Finished goods		7,570			5,098			3,465
Supplies		257			240			260
Total inventories		$	14,544		$	9,587		$	6,360

We had long-term material purchase obligations of approximately $1,628 million at December 31, 2011.

During 2009 inventory quantities were reduced. This reduction resulted in a liquidation of LIFO inventory layers carried at lower costs prevailing in prior years as compared with current costs. In 2009, the effect of this reduction of inventory decreased Cost of goods sold in Statement 1 by approximately $300 million and increased Profit by approximately $240 million or $0.39 per share. There were no significant LIFO liquidations during 2011 or 2010.

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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