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Inventories

12 Months Ended

Dec. 31, 2014

Inventory Disclosure [Abstract]

Inventories

Inventories

Inventories at December 31, 2014 and 2013 were as follows (in millions):

		2014				2013
Raw materials and supplies		$	249.3			$	277.6
Work-in-process		1,184.1				984.9
Finished goods		172.2				162.1
Total inventories at current cost		1,605.6				1,424.6
Adjustment from current cost to LIFO cost basis		4.8				29.4
Inventory valuation reserves		(68.8		)		(84.3		)
Progress payments		(68.8		)		(47.6		)
Total inventories, net		$	1,472.8			$	1,322.1

Inventories, before progress payments, determined on the LIFO method were $1,102.4 million at December 31, 2014, and $976.1 million at December 31, 2013. The remainder of the inventory was determined using the FIFO and average cost methods, and these inventory values do not differ materially from current cost. The effect of using the LIFO costing methodology to value inventory, rather than FIFO, increased cost of sales by $24.6 million in 2014. Fiscal years 2013 and 2012 included a decrease in cost of sales of $80.9 million and $75.6 million, respectively, from using the LIFO costing methodology. Due to deflationary impacts primarily related to raw materials, the carrying value of the Company’s inventory as valued on the LIFO inventory accounting method exceeded current replacement cost at December 31, 2013, and based on a lower of cost or market value analysis, a $35.0 million net realizable value reserve was recorded in the High Performance Materials & Components segment in 2013. This net realizable value reserve was reduced to $10.0 million at December 31, 2014. In addition, continued sluggish demand for industrial titanium products from global markets has resulted in much lower selling prices for these products. As a result, the Company recorded a lower of cost or market charge for industrial titanium products in the Flat Rolled Products segment of $23.2 million in 2014 and $20.5 million in 2013.

During 2013, and 2012, inventory usage resulted in liquidations of LIFO inventory quantities, increasing cost of sales by $3.8 million and $1.5 million in 2013 and 2012, respectively. These inventories were carried at differing costs prevailing in prior years as compared with the cost of current manufacturing cost and purchases. There were no LIFO liquidations in 2014.

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- Definition

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.

+ References

Reference 1: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section 50

-Paragraph 1

-URI http://asc.fasb.org/extlink&oid=6361739&loc=d3e7789-107766



Reference 2: http://www.xbrl.org/2003/role/presentationRef

-Publisher FASB

-Name Accounting Standards Codification

-Topic 210

-SubTopic 10

-Section S99

-Paragraph 1

-Subparagraph (SX 210.5-02.6)

-URI http://asc.fasb.org/extlink&oid=6877327&loc=d3e13212-122682



Reference 3: http://www.xbrl.org/2003/role/presentationRef

-Publisher SEC

-Name Regulation S-X (SX)

-Number 210

-Section 02

-Paragraph 6

-Subparagraph a, b, c

-Article 5

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