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MRO » Topics » F-28

This excerpt taken from the MRO 8-K filed Sep 7, 2007.

F-28


19. Fair Value of Financial Instruments

The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. The following table summarizes financial instruments, excluding derivative financial instruments disclosed in Note 18, by individual balance sheet line item. Marathon's financial instruments at December 31, 2006 and 2005 were:

 
    
   2006
   2005
(In millions)

   December 31
   Fair
Value
   Carrying
Amount
   Fair
Value
   Carrying
Amount
Financial assets:                            
  Cash and cash equivalents       $ 2,585   $ 2,585   $ 2,617   $ 2,617
  Receivables         4,177     4,177     3,514     3,514
  Receivables from United States Steel         522     530     540     552
  Investments and long-term receivables(a)         461     348     268     195
       
 
 
 
    Total financial assets       $ 7,745   $ 7,640   $ 6,939   $ 6,878
Financial liabilities:                            
  Accounts payable       $ 5,850   $ 5,850   $ 5,435   $ 5,435
  Consideration payable under Libya re-entry agreement         –       –       732     732
  Payables to United States Steel         20     20     6     6
  Accrued interest         89     89     96     96
  Long-term debt due within one year(b)         450     450     302     302
  Long-term debt(b)         3,279     2,947     4,052     3,573
       
 
 
 
  Total financial liabilities       $ 9,688   $ 9,356   $ 10,623   $ 10,144
(a)
Excludes equity method investments and derivatives.
(b)
Excludes capital leases.

        The fair value of financial instruments classified as current assets or liabilities approximates carrying value due to the short-term maturity of the instruments. The fair value of investments and long-term receivables was based on discounted cash flows or other specific instrument analysis. The fair value of long-term debt instruments was based on market prices where available or current borrowing rates available for financings with similar terms and maturities. The fair value of the receivables from United States Steel was estimated using market prices for United States Steel debt assuming the industrial revenue bonds are redeemed on or before the tenth anniversary of the Separation per the Financial Matters Agreement.


20. Short-Term Debt

Marathon has a commercial paper program that is supported by the unused and available credit on the Marathon five-year revolving credit facility discussed in Note 21. At December 31, 2006, there were no commercial paper borrowings outstanding.

        Additionally, as part of the Acquisition on June 30, 2005 discussed in Note 6, Marathon assumed $1.920 billion in debt which was repaid on July 1, 2005.

This excerpt taken from the MRO 10-K filed Mar 1, 2007.

F-28


19. Fair Value of Financial Instruments

The fair value of the financial instruments disclosed herein is not necessarily representative of the amount that could be realized or settled, nor does the fair value amount consider the tax consequences of realization or settlement. The following table summarizes financial instruments, excluding derivative financial instruments disclosed in Note 18, by individual balance sheet line item. Marathon's financial instruments at December 31, 2006 and 2005 were:

 
    
   2006
   2005
(In millions)

   December 31
   Fair
Value
   Carrying
Amount
   Fair
Value
   Carrying
Amount
Financial assets:                            
  Cash and cash equivalents       $ 2,585   $ 2,585   $ 2,617   $ 2,617
  Receivables         4,177     4,177     3,514     3,514
  Receivables from United States Steel         522     530     540     552
  Investments and long-term receivables(a)         461     348     268     195
       
 
 
 
    Total financial assets       $ 7,745   $ 7,640   $ 6,939   $ 6,878
Financial liabilities:                            
  Accounts payable       $ 5,850   $ 5,850   $ 5,435   $ 5,435
  Consideration payable under Libya re-entry agreement         –       –       732     732
  Payables to United States Steel         20     20     6     6
  Accrued interest         89     89     96     96
  Long-term debt due within one year(b)         450     450     302     302
  Long-term debt(b)         3,279     2,947     4,052     3,573
       
 
 
 
  Total financial liabilities       $ 9,688   $ 9,356   $ 10,623   $ 10,144
(a)
Excludes equity method investments and derivatives.
(b)
Excludes capital leases.

        The fair value of financial instruments classified as current assets or liabilities approximates carrying value due to the short-term maturity of the instruments. The fair value of investments and long-term receivables was based on discounted cash flows or other specific instrument analysis. The fair value of long-term debt instruments was based on market prices where available or current borrowing rates available for financings with similar terms and maturities. The fair value of the receivables from United States Steel was estimated using market prices for United States Steel debt assuming the industrial revenue bonds are redeemed on or before the tenth anniversary of the Separation per the Financial Matters Agreement.


20. Short-Term Debt

Marathon has a commercial paper program that is supported by the unused and available credit on the Marathon five-year revolving credit facility discussed in Note 21. At December 31, 2006, there were no commercial paper borrowings outstanding.

        Additionally, as part of the Acquisition on June 30, 2005 discussed in Note 6, Marathon assumed $1.920 billion in debt which was repaid on July 1, 2005.

EXCERPTS ON THIS PAGE:

8-K
Sep 7, 2007
10-K
Mar 1, 2007

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