Change in Accounting Method

3 Months Ended

Mar. 31, 2012

Change in Accounting Method

Change in Accounting Method

2. Change in Accounting Method

Effective January 1, 2012, the Company elected to change the method of valuing U.S. inventories to the average cost method while in prior years, these inventories were valued using the last-in, first-out (“LIFO”) method.  The Company believes the average cost method is preferable as it conforms the inventory costing methods globally, improves comparability with industry peers and better reflects the current value of inventory on the consolidated balance sheets. All prior periods presented have been adjusted to apply the new method retrospectively.

The effect of the change on the condensed consolidated results of operations for the quarter ended March 31, 2011 is as follows:

	As originally
	reported under			Effect of		As
	LIFO			Change		Adjusted
Manufacturing, shipping and delivery expense	$	(1,386	)	$	10	$	(1,376	)
Amounts attributable to the Company:
Net earnings from continuing operations	73			10		83

The effect of the change on the condensed consolidated balance sheets as of December 31, 2011 and March 31, 2011 is as follows:

	As originally
	reported under		Effect of		As
December 31, 2011	LIFO		Change		Adjusted
Assets:
Inventories	$	1,012	$	49	$	1,061
Share owners' equity:
Retained earnings	2,295		49		2,344
March 31, 2011
Assets:
Inventories	$	1,054	$	49	$	1,103
Share owners' equity:
Retained earnings	2,712		49		2,761

The effect of the change on the consolidated share owners’ equity as of January 1, 2011 is as follows:

	As originally
	reported under		Effect of		As
	LIFO		Change		Adjusted
Retained earnings	$	2,640	$	39	$	2,679

The effect of the change on the condensed consolidated cash flows for the quarter ended March 31, 2011  is as follows:

	As originally
	reported under			Effect of			As
	LIFO			Change			Adjusted
Net earnings	$	76		$	10		$	86
Change in components of working capital	(239		)	(10		)	(249		)

Had the Company not made this change in accounting method, manufacturing, shipping, and delivery expense for the quarter ended March 31, 2012 would have been $6 million lower and net earnings attributable to the Company would have been $6 million higher than reported in the condensed consolidated results of operations.