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Inventories

9 Months Ended

Sep. 30, 2012

Inventories [Abstract]

3.	Inventories

Traditional cigarette inventories (including leaf tobacco, manufactured stock and materials and supplies) are valued at the lower of cost, determined on a last-in, first-out (“LIFO”) basis, or market. blu eCigs’ inventories of $29 million included in manufactured stock as of September 30, 2012 are valued at the lower of cost, determined on a first-in, first-out (“FIFO”) basis, or market. Inventories consisted of the following:


		September 30, 2012				December 31, 2011
		(In millions)
Leaf tobacco		$	319			$	230
Manufactured stock			91				43
Material and supplies			6				4

		$	416			$	277

If the average cost method of accounting was used for inventories valued on a LIFO basis, inventories would be greater by approximately $238 and $223 million at September 30, 2012 and December 31, 2011, respectively.

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.

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