The table below summarizes the balances outstanding under margin deposits, natural gas and power prepayments, and exposure under letters of credit and first priority liens for commodity procurement and risk management activities as of December 31, 2011 and 2010 (in millions): | | | | | | | | | | 2011 | | 2010 | Margin deposits(1) | $ | 140 |
| | $ | 162 |
| Natural gas and power prepayments | 42 |
| | 43 |
| Total margin deposits and natural gas and power prepayments with our counterparties(2) | $ | 182 |
| | $ | 205 |
| | | | | Letters of credit issued(3) | $ | 581 |
| | $ | 588 |
| First priority liens under power and natural gas agreements(4) | 1 |
| | — |
| First priority liens under interest rate swap agreements | 318 |
| | 391 |
| Total letters of credit and first priority liens with our counterparties | $ | 900 |
| | $ | 979 |
| | | | | Margin deposits held by us posted by our counterparties(1)(5) | $ | 34 |
| | $ | 6 |
| Letters of credit posted with us by our counterparties | — |
| | 66 |
| Total margin deposits and letters of credit posted with us by our counterparties | $ | 34 |
| | $ | 72 |
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___________ | | (1) | Balances are subject to master netting arrangements and presented on a gross basis on our Consolidated Balance Sheets. We do not offset fair value amounts recognized for derivative instruments executed with the same counterparty under a master netting arrangement for financial statement presentation. |
| | (2) | At December 31, 2011 and 2010, $162 million and $183 million, respectively, were included in margin deposits and other prepaid expense and $20 million and $22 million were included in other assets at December 31, 2011 and 2010, respectively, on our Consolidated Balance Sheets. |
| | (3) | When we entered into our Corporate Revolving Facility on December 10, 2010, the letters of credit issued under our First Lien Credit Facility were either replaced by letters of credit issued under the Corporate Revolving Facility or back-stopped by an irrevocable standby letter of credit issued by a third party. Our letters of credit issued under our Corporate Revolving Facility used for our commodity procurement and risk management activities as of December 31, 2010 include those that were back-stopped of approximately $63 million. The back-stopped letters of credit were returned and extinguished during the first quarter of 2011. |
| | (4) | At December 31, 2010, the fair value of our commodity derivative instruments collateralized by first priority liens was an asset of $193 million; therefore, there was no collateral exposure at December 31, 2010. |
| | (5) | Included in other current liabilities on our Consolidated Balance Sheets. |
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