Quarterly report pursuant to Section 13 or 15(d)

INVENTORIES

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INVENTORIES
 6 Months Ended
Jun. 30, 2013
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):

 
   June 30,
2013		   December 31,
2012		  

Raw materials and supplies

   $ 460   $ 484  

Work in progress

     104     98  

Finished goods

     1,209     1,311  
           

Total

     1,773     1,893  

LIFO reserves

     (75 )   (74 )
           

Net

   $ 1,698   $ 1,819  
           

        For both June 30, 2013 and December 31, 2012, approximately 11% 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 for both June 30, 2013 and December 31, 2012 was $6 million. Other open exchanges are settled in cash and result in a net deferred profit margin. The amounts payable under these open exchange agreements for both June 30, 2013 and December 31, 2012 was nil.