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Inventories
12 Months Ended
Dec. 31, 2011
Inventories  
Inventories

Note 4. Inventories

        Inventories of the Company have primarily been stated on the last-in, first-out ("LIFO") method, which is not in excess of market. The Company uses the LIFO method of inventory valuation because it results in a better matching of costs and revenues. As of December 31, 2011 and 2010, cost on the first-in, first-out ("FIFO") method exceeded the LIFO value of inventories by $202.9 million and $117.6 million, respectively. Inventories of $237.0 million and $124.2 million as of December 31, 2011 and 2010, respectively, were stated on the FIFO method, which is not in excess of market.

        Cost increases in 2011 and 2010 for the majority of our products were the primary cause of the $85.3 million and $34.8 million increase in the LIFO valuation reserve, respectively, which increased cost of sales. In 2011 and 2010, we generally increased inventory levels due to increased shipment levels. As such, there were insignificant liquidations of LIFO inventory quantities in 2011 and 2010. In 2009, significant cost decreases for the majority of our products were the primary cause of the $305.0 million reduction of the LIFO valuation reserve, which lowered cost of sales. This amount, however, was net of the impact of inventory quantity reductions, which resulted in a liquidation of LIFO inventory quantities carried at higher costs prevailing in prior years as compared with the cost of 2009 purchases, the effect of which increased cost of sales by approximately $26.3 million in 2009.