Inventories, Net

3 Months Ended

Mar. 31, 2021

Inventories consist of the following (in millions):


	March 31, 2021		December 31, 2020
Inventories at FIFO, net of reserves	$	1,002.4	$	993.9
Less: LIFO reserve	(245.9)		(235.4)
Total inventories, net of reserves	$	756.5	$	758.5

Cost of goods sold reflects the application of the last-in, first-out (“LIFO”) method of valuing inventories in the U.S. based upon estimated annual producer price indexes. Inventories in Canada are valued on a first-in, first-out (“FIFO”) basis, as LIFO is not a permitted inventory valuation method in Canada. During periods of rising prices, the LIFO method of costing inventories generally results in higher current costs being charged against income while lower costs are retained in inventories. Conversely, during periods of decreasing prices, the LIFO method of costing inventories generally results in lower current costs being charged against income and higher stated inventories. If the FIFO method had been used for valuing inventories in the U.S., inventories would have been approximately $245.9 million and $235.4 million higher as of March 31, 2021 and December 31, 2020, respectively. The Company recorded LIFO expense of $10.5 million and $7.8 million for the three months ended March 31, 2021 and 2020, respectively. During the first quarter of 2021, the Company concluded that it qualifies for and intends to file a change to the tax method of determining the LIFO reserve which increased deferred tax liabilities and decreased taxes payable by approximately $16 million.