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FAIR VALUE MEASUREMENTS
 3 Months Ended
Mar. 31, 2022
Fair Value Disclosures [Abstract]  
FAIR VALUE MEASUREMENTS FAIR VALUE MEASUREMENTS Fair value is measured based on an exit price, representing the amount that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. As such, fair value is a market-based measurement that should be determined based on assumptions market participants would use in pricing an asset or liability. Assets and liabilities measured at fair value are based on a market valuation approach using prices and other relevant information generated by market transactions involving identical or
comparable assets or liabilities. As a basis for considering such assumptions, a three-tiered fair value hierarchy is established, which prioritizes the inputs used in measuring fair value as follows: (Level 1) observable inputs such as quoted prices in active markets; (Level 2) inputs, other than the quoted prices in active markets that are observable, either directly or indirectly; and (Level 3) unobservable inputs in which there is little or no market data, which require the reporting entity to develop its own assumptions.
The following table summarizes the valuation of our assets and liabilities measured at fair value on a recurring basis at March 31, 2022 and December 31, 2021:
Fair Value
Millions of dollarsTotal Cost BasisLevel 1Level 2Total
Measured at fair value on a recurring basis:20222021202220212022202120222021
Short-term investments (1)
$1,339 $1,905 $1,008 $1,697 $331 $208 $1,339 $1,905 
Net derivative contracts— — — — 41 66 41 66 
(1)Short-term investments are primarily comprised of money market funds and highly liquid, low risk investments with initial maturities less than 90 days.
Other Fair Value Measurements
The fair value of long-term debt (including current maturities) was $5.25 billion and $5.76 billion at March 31, 2022 and December 31, 2021, respectively, and was estimated using discounted cash flow analysis based on incremental borrowing rates for similar types of borrowing arrangements (Level 2 input).