We use futures, forwards, swaps and options in various markets to meet our customers' needs, capture market opportunities and manage foreign exchange currency risk.

Commodity derivative instruments are held at fair value on our consolidated balance sheet. Where these balances have the right of setoff, they are presented on a net basis. Related cash flows are recorded as operating activities on our consolidated statement of cash flows. On our consolidated income statement, gains and losses are recognized either on a gross basis if directly related to our physical business or a net basis if held for trading. Gains and losses related to contracts that meet and are designated with the NPNS exception are recognized upon settlement. We generally apply this exception to eligible crude contracts and certain gas contracts. We do not apply hedge accounting for our commodity derivatives.


	Millions of Dollars
	September 30 2024		December 31 2023
Assets
Prepaid expenses and other current assets	$	342	611
Other assets	86		113
Liabilities
Other accruals	308		567
Other liabilities and deferred credits	74		80


	Millions of Dollars
	Three Months Ended September 30			Nine Months Ended September 30
	2024		2023	2024	2023

Sales and other operating revenues	$	49	(11)	135	1
Other income	(2)		(5)	(2)	(6)
Purchased commodities	(46)		7	(125)	(49)

For the three- and nine-month periods ended September 30, 2024, we recognized an unrealized loss of $63 million and $50 million, respectively in other comprehensive income (loss) related to our share of PALNG's interest rate swaps designated as a cash flow hedge. For the three- and nine-month periods ended September 30, 2023, we recognized an unrealized gain of $46 million in other comprehensive income (loss) related to these swaps.

We invest in financial instruments with maturities based on our cash forecasts for the various accounts and currency pools we manage. The types of financial instruments in which we currently invest include:

•Commercial paper: Unsecured promissory notes issued by a corporation, commercial bank or government agency purchased at a discount, reaching par value at maturity.

The following investments are carried on our consolidated balance sheet at cost, plus accrued interest, and the table reflects remaining maturities at September 30, 2024, and December 31, 2023:


	Millions of Dollars
	Carrying Amount
	Cash and Cash Equivalents			Short-Term Investments
	September 30 2024		December 31 2023	September 30 2024	December 31 2023
Cash	$	581	474
Demand Deposits	1,884		1,424
Time Deposits
1 to 90 days	2,512		3,713	1,050	511
91 to 180 days				1	22
Within one year				5	3
U.S. Government Obligations
1 to 90 days	241		24	—	—
	$	5,218	5,635	1,056	536

The following investments in debt securities classified as available for sale are carried at fair value on our consolidated balance sheet at September 30, 2024, and December 31, 2023:


	Millions of Dollars
	Carrying Amount
	Cash and Cash Equivalents			Short-Term Investments		Investments and Long-Term Receivables
	September 30 2024		December 31 2023	September 30 2024	December 31 2023	September 30 2024	December 31 2023
Major Security Type
Corporate Bonds	$	—	—	330	201	599	606
Commercial Paper	3		—	97	131
U.S. Government Obligations	—		—	62	89	195	189
U.S. Government Agency Obligations				—	5	7	7
Foreign Government Obligations				8	7	4	4
Asset-Backed Securities				18	2	204	183
	$	3	—	515	435	1,009	989

Cash and Cash Equivalents and Short-Term Investments have remaining maturities within one year. Investments and Long-Term Receivables have remaining maturities greater than one year through four years.


	Millions of Dollars
	Amortized Cost Basis			Fair Value
	September 30 2024		December 31 2023	September 30 2024	December 31 2023
Major Security Type
Corporate Bonds	$	919	806	929	807
Commercial Paper	100		131	100	131
U.S. Government Obligations	255		278	257	278
U.S. Government Agency Obligations	7		12	7	12
Foreign Government Obligations	12		11	12	11
Asset-Backed Securities	220		184	222	185
	$	1,513	1,422	1,527	1,424

As of September 30, 2024 total unrealized gains for debt securities classified as available for sale with net gains were $14 million. As of December 31, 2023, total unrealized gains for debt securities classified as available for sale with net gains were $5 million. No allowance for credit losses has been recorded on investments in debt securities which are in an unrealized loss position.

For the three- and nine-month periods ended September 30, 2024, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $142 million and $597 million, respectively. For the three- and nine-month periods ended September 30, 2023, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $258 million and $809 million, respectively. Gross realized gains and losses included in earnings from those sales and redemptions were negligible. The cost of securities sold and redeemed is determined using the specific identification method.

Financial instruments potentially exposed to concentrations of credit risk consist primarily of cash equivalents, short-term investments, long-term investments in debt securities, OTC derivative contracts and trade receivables. Our cash equivalents and short-term investments are placed in high-quality commercial paper, government money market funds, U.S. government and government agency obligations, time deposits with major international banks and financial institutions, high-quality corporate bonds, foreign government obligations and asset-backed securities. Our long-term investments in debt securities are placed in high-quality corporate bonds, asset-backed securities, U.S. government and government agency obligations, and foreign government obligations.

The credit risk from our OTC derivative contracts, such as forwards, swaps and options, derives from the counterparty to the transaction. Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance. We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared primarily with an exchange clearinghouse and subject to mandatory margin requirements until settled; however, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements.

Our trade receivables result primarily from our petroleum operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk. The majority of these receivables have payment terms of 30 days or less, and we continually monitor this exposure and the creditworthiness of the counterparties. We may require collateral to limit the exposure to loss including letters of credit, prepayments and surety bonds, as well as master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due to us.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount. We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating. The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if we fall below investment grade. Cash is the primary collateral in all contracts; however, many also permit us to post letters of credit as collateral, such as transactions administered through the New York Mercantile Exchange.

The aggregate fair value of all derivative instruments with such credit risk-related contingent features that were in a liability position at September 30, 2024, and December 31, 2023, was $62 million and $181 million, respectively. For these instruments, no collateral was posted at September 30, 2024 and December 31, 2023. If our credit rating had been downgraded below investment grade at September 30, 2024, we would have been required to post $38 million of additional collateral, either with cash or letters of credit.