Note 5: INVENTORIES

Inventories were as follows at November 30:

Certain steel inventories used by the Water Transmission Group are valued using the LIFO method. Inventories valued using the LIFO method comprised 21.5% and 17.5% of consolidated inventories at November 30, 2008 and 2007, respectively. During 2008, inventory quantities subject to valuation using the LIFO method declined; while steel prices increased significantly. The decrease in cost of goods sold of approximately $8,233,000 associated with the liquidation of LIFO inventory quantities carried at historically lower costs was offset by an increase in cost of goods sold of approximately $6,390,000 due to the increase in steel prices. The impact was a net decrease in LIFO reserve of $1,843,000. If inventories valued using the LIFO method were valued using the FIFO method, total inventories would have increased by $7,906,000 and $9,749,000 at November 30, 2008 and 2007, respectively.