LIFO Liquidation

LIFO Liquidation

A situation in which a company using LIFO accounting sells its oldest inventory. Under LIFO accounting, inventory purchased last is treated as if it is sold first. Thus, LIFO liquidation occurs when a company appears to sell the inventory it purchased first. This may not be the actual inventory it purchased first but is treated as such for accounting purposes. LIFO liquidation happens when the company's sales outpace its purchases for inventory.
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The Company defines Adjusted EBITDA as net income or loss from continuing operations before the effects of realized and unrealized gains or losses on derivatives, interest expense, taxes, depreciation and amortization, LIFO liquidation gain, and non-cash pension expense or credit, and excludes certain non-recurring and non-cash items.
Further, and very significantly, the LIFO transgression is "buried" in prior layers, provided that a LIFO liquidation does not occur after the method change has been effected.
Included in Table 3 is the LIFO liquidation or reduction for 1993.
Our 2011 operating income was at a record level despite the unfavorable impacts from rapidly declining metal prices experienced in the third quarter and the lack of a LIFO liquidation in 2011 compared to 2010," said Rodney D.
This increase was due to plant operating efficiencies, lower selling and administrative expenses, a LIFO liquidation impact in 2009 and the absence in 2009 of: the LIFO cost of sales impact of rapidly declining copper prices, the impact of the acquired Global Wire inventories on the Company's existing LIFO inventories, and increased scrap losses from declining metals prices.
The Company defines Adjusted EBITDA as net income from continuing operations before the effects of realized and unrealized losses on derivatives, interest expense, taxes, depreciation and amortization, LIFO liquidation gain, and pension expense or credit, and excludes certain non-recurring and non-cash items.
This LIFO liquidation resulted in a decrease in costs of sales of $138 million.
6 million from the liquidation of precious metal inventories valued at LIFO, as compared to a non-cash LIFO liquidation gain of $3.
Significant unusual adjustments that occurred in the nine months ended September 30, 2008 were the LIFO liquidation gain of $2.
LIFO accounting adjustments, which are all recorded in Corporate and Other, reflect LIFO accounting adjustments resulting from the restructuring charges in the second quarter of fiscal 2008 and the significant LIFO liquidation in the fourth quarter of fiscal 2008.
1 million primarily due to a reduced LIFO liquidation impact of $3.
Inventory reductions in the second quarter of 2007 resulted in a LIFO liquidation gain of approximately $32 million, or $40 per ton in the second quarter of 2007, compared to a gain of $18 million, or $22 per ton, in the first quarter of 2007.