Derivatives

9 Months Ended

Sep. 30, 2011

Derivatives Disclosure [Abstract]

Derivatives

14.       Derivatives

For information regarding the fair value measurement of derivative instruments, see Note 13.

The majority of our 2010 derivatives related to our downstream business. The following table presents the gross fair values of derivative instruments, excluding cash collateral, and where they appear on the consolidated balance sheets as of September 30, 2011 and December 31, 2010.

	September 30, 2011
(In millions)	Asset		Liability		Net Asset		Balance Sheet Location
Fair Value Hedges
Interest rate	$	28	$	0	$	28	Other noncurrent assets
Total Designated Hedges		28		0		28
Not Designated as Hedges
Commodity		1		0		1	Other current assets
Total Not Designated as Hedges		1		0		1
Total	$	29	$	0	$	29

	December 31, 2010
(In millions)	Asset		Liability		Net Asset		Balance Sheet Location
Fair Value Hedges
Interest rate	$	32	$	0	$	32	Other noncurrent assets
Total Designated Hedges		32		0		32
Not Designated as Hedges
Commodity		58		102		(44)	Other current assets
Total Not Designated as Hedges		58		102		(44)
Total	$	90	$	102	$	(12)

	December 31, 2010
(In millions)	Asset		Liability		Net Liability		Balance Sheet Location
Not Designated as Hedges
Commodity	$	1	$	3	$	2	Other current liabilities
Total Not Designated as Hedges		1		3		2
Total	$	1	$	3	$	2

Derivatives Designated as Cash Flow Hedges

As of September 30, 2011, no derivatives were designated as cash flow hedges.

Gains of $10million related to cash flow hedges were reclassified from accumulated other comprehensive income into net income during the first quarter of 2011. This amortization was accelerated because the related debt was retired.

Derivatives Designated as Fair Value Hedges

In connection with the debt retired in February and March 2011 discussed in Note 15, we settled interest rate swaps with a notional amount of $1,450million. We recorded a $29 million gain, which reduced the loss on extinguishment of debt.

As of September 30, 2011, we had multiple interest rate swap agreements with a total notional amount of $500 million at a weighted average, LIBOR-based, floating rate of 3.65 percent.

The following table summarizes the pretax effect of derivative instruments designated as hedges of fair value in our consolidated statements of income:

		Gain (Loss)
		Three Months Ended				Nine Months Ended
		September 30,				September 30,
(In millions)	Income Statement Location	2011		2010		2011		2010
Derivative
Interest rate	Net interest and other financing costs	$	26	$	15	$	25	$	39
Hedged Item
Long-term debt	Net interest and other financing costs	$	(26)	$	(15)	$	(25)	$	(39)

Derivatives not Designated as Hedges

The effect related to continuing operations of all derivative instruments not designated as hedges in our consolidated statements of income appear on the sales and other operating revenues line as gains of $2 million and $7 million in the third quarters of 2011 and 2010. For the first nine months of 2011 and 2010 the gains were $3 million and $130 million.