Accounting Policies

9 Months Ended

Sep. 30, 2021

Inventory Valuation

Inventories are stated at the lower of cost or net realizable value. Effective July 1, 2021, the Company changed its method of accounting for its U.S. inventories currently accounted for under the LIFO method to the FIFO method. Total U.S. inventories that utilized the LIFO cost method represented 41% of the Company's total inventory as of December 31, 2020 prior to this change in method. The Company believes the FIFO method is preferable because it: (i) more accurately matches cost of sales with the related revenues as the FIFO method more accurately resembles the physical flow of inventory and; (ii) conforms all of the Company’s consolidated inventory to a single method of accounting. The Company also notes that the revised policy improves comparability with many of the Company's peers.

The Company applied this change retrospectively to all periods presented. There was an immaterial impact to the Company’s Consolidated Income Statement and Consolidated Statement of Cash Flows for the three and nine

months ended September 30, 2020 and 2021. The following financial statement line items in the Company's Consolidated Balance Sheet as of December 31, 2020 was adjusted as follows:


Consolidated Balance Sheets
(in thousands)	December 31, 2020
	As Originally Reported		Effect of Change		As Adjusted

Inventories, net	$	229,971	$	12,530	$	242,501
Deferred income taxes (liability)	19,642		3,170		22,812
Retained earnings	550,826		9,360		560,186