Supplementary Financial Statement Information (Notes)

9 Months Ended

Sep. 30, 2017

Supplementary Financial Statement Information

Inventory, net

Inventories as of September 30, 2017 and December 31, 2016, are presented below:



	September 30, 2017			December 31, 2016
Finished and semi-finished	$	1,039.2		$	855.0
Raw materials	410.1			415.8
Total cost	1,449.3			1,270.8
Adjustment to state inventories at LIFO value	(265.2		)	(156.9		)
Inventory, net	$	1,184.1		$	1,113.9

Investments in Affiliates

We have investments in several businesses accounted for using the equity method of accounting. Cost of products sold includes $1.0 and $3.2 for the three months ended September 30, 2017 and 2016, and $6.6 and $9.5 for the nine months ended September 30, 2017 and 2016, for our share of income of equity investees.

Summarized financial statement data for all investees is presented below.



	Three Months Ended September 30,				Nine Months Ended September 30,
	2017		2016		2017		2016
Revenue	$	73.2	$	72.4	$	222.5	$	216.4
Gross profit	20.5		24.6		69.6		73.1
Net income	3.4		8.1		18.8		24.6

Facility Idling

In the fourth quarter of 2015, we temporarily idled the Ashland Works blast furnace and steelmaking operations (“Ashland Works Hot End”). We incurred charges during the fourth quarter of 2015 for supplemental unemployment and other employee benefit costs and for equipment idling, asset preservation and other costs. The supplemental unemployment and other employee benefit costs were recorded as accrued liabilities in the condensed consolidated balance sheet, and the activity for the nine months ended September 30, 2017 and 2016 was as follows:



	Nine Months Ended September 30,
	2017			2016
Balance at beginning of period	$	6.1		$	22.1
Payments	(4.2		)	(15.3		)
Balance at end of period	$	1.9		$	6.8

We estimate we will incur on-going costs of approximately $2.0 per month for maintenance of the equipment, utilities and supplier obligations related to the temporarily idled Ashland Works Hot End. These costs were $5.1 and $4.7 for the three months ended September 30, 2017 and 2016, and $15.9 and $17.4 for the nine months ended September 30, 2017 and 2016. We continue to engage in regular reviews of the potential viability of the Ashland Works Hot End, including an assessment of the most significant risks and benefits of a permanent idling of those idled operations. As part of these reviews, we evaluate, among other items, our strategic focus on reducing participation in markets where we believe future returns will likely not meet our investment criteria and whether we anticipate that market conditions will enable production from the Ashland Works Hot End to generate sustainable economic returns through steel market cycles. If we decide to permanently idle the Ashland Works Hot End, we would likely incur substantial non-cash charges for impairment of those assets. Moreover, even in the absence of an operational decision to permanently idle the Ashland Works Hot End, circumstances may arise that could trigger substantial non-cash charges to impair the assets in future periods. The carrying value of the long-lived assets associated with the temporarily idled operations totaled approximately $65.0 as of September 30, 2017. In addition, a permanent idling of the Ashland Works Hot End would cause us to incur certain cash expenses, including those relating to labor benefit obligations, certain take-or-pay supply agreements and potentially accelerated environmental remediation costs.