Quarterly report pursuant to Section 13 or 15(d)

INVENTORIES

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INVENTORIES
 3 Months Ended
Mar. 31, 2012
INVENTORIES  
INVENTORIES

4. INVENTORIES

        Inventories are stated at the lower of cost or market, with cost determined using last-in first-out ("LIFO"), first-in first-out, and average costs methods for different components of inventory. Inventories consisted of the following (dollars in millions):

 
   March 31,
2012 		  December 31,
2011 		 

Raw materials and supplies

   $ 395   $ 374  

Work in progress

     103     92  

Finished goods

     1,226     1,162  
           

Total

     1,724     1,628  

LIFO reserves

     (86 )   (89 )
           

Net

   $ 1,638   $ 1,539  
           

        For both March 31, 2012 and December 31, 2011, approximately 12% of inventories were recorded using the LIFO cost method.

        In the normal course of operations we, at times, exchange raw materials and finished goods with other companies for the purpose of reducing transportation costs. The net nonmonetary open exchange positions are valued at cost. The amounts included in inventory under nonmonetary open exchange agreements receivable by us as of both March 31, 2012 and December 31, 2011 were $3 million. Other open exchanges are settled in cash and result in a net deferred profit margin. The amounts payable under these open exchange agreements as of March 31, 2012 and December 31, 2011 were $2 million and nil, respectively.