Note 4. Inventories

Our inventories are primarily stated on the LIFO method, which is not in excess of market. We use the LIFO method of inventory valuation because it results in a better matching of costs and revenues. The cost of inventories stated on the FIFO method is not in excess of realizable value.

Inventories consisted of the following:


	December 31,		December 31,
	2016		2015
	(in millions)
LIFO inventories - cost on the FIFO method	$	1,219.0	$	1,157.5

LIFO inventory valuation reserve adjustment		51.5		43.0
Lower of cost or market adjustment		(42.6)		(69.1)
Cost on FIFO method lower (higher) than LIFO value		8.9		(26.1)

Inventories - stated on LIFO method		1,227.9		1,131.4
Inventories - stated on FIFO method		304.7		304.6
	$	1,532.6	$	1,436.0

The lower of cost or market charges in 2016 and 2015 were due to a significant decline in metals pricing that resulted in our LIFO inventory valuation exceeding current replacement cost. In 2016, we also recorded a lower of cost or market charge of $7.6 million relating to certain inventories of a foreign subsidiary that are remeasured into the U.S. dollar.

The changes in the LIFO valuation reserve and impact of LIFO liquidations were as follows:


	Year Ended December 31,
	2016		2015		2014
	(in millions)
LIFO inventory valuation reserve adjustment (income) charge	$	(8.5)	$	(186.1)	$	54.5
Liquidation of LIFO inventory quantities that increased cost of sales		**	$	38.7		**

** Insignificant liquidations of LIFO inventory quantities.

Cost decreases for the majority of our products were the primary cause of the 2016 and 2015 reductions in the LIFO valuation reserve. Cost increases for the majority of our products were the primary cause of the 2014 increase in the LIFO valuation reserve.