mro102808-8ka.htm

-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, F2X0NhVTmxo+VPN/nrZ/yv17vF9kj0ATsaMl/jygT+K3ikhMu3g71PG4zVU7nmSI NPYylTnHstIVSJjdVOsYCA== 0000101778-08-000099.txt : 20081028 0000101778-08-000099.hdr.sgml : 20081028 20081028112631 ACCESSION NUMBER: 0000101778-08-000099 CONFORMED SUBMISSION TYPE: 8-K/A PUBLIC DOCUMENT COUNT: 6 CONFORMED PERIOD OF REPORT: 20081028 ITEM INFORMATION: Other Events FILED AS OF DATE: 20081028 DATE AS OF CHANGE: 20081028 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MARATHON OIL CORP CENTRAL INDEX KEY: 0000101778 STANDARD INDUSTRIAL CLASSIFICATION: PETROLEUM REFINING [2911] IRS NUMBER: 250996816 STATE OF INCORPORATION: DE FISCAL YEAR END: 1207 FILING VALUES: FORM TYPE: 8-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-05153 FILM NUMBER: 081143932 BUSINESS ADDRESS: STREET 1: P O BOX 3128 CITY: HOUSTON STATE: TX ZIP: 77253-3128 BUSINESS PHONE: 7136296600 MAIL ADDRESS: STREET 1: 5555 SAN FELIPE ROAD CITY: HOUSTON STATE: TX ZIP: 77056 FORMER COMPANY: FORMER CONFORMED NAME: USX CORP DATE OF NAME CHANGE: 19920703 FORMER COMPANY: FORMER CONFORMED NAME: UNITED STATES STEEL CORP/DE DATE OF NAME CHANGE: 19860714 8-K/A 1 mro102808-8ka.htm OCTOBER 28, 2008 8-K/A: MARATHON OIL CORPORATION VOLUNTARY XBRL FILING OF JUNE 30, 2008 10-Q mro102808-8ka.htm

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 8-K/A

CURRENT REPORT

Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


Date of Report (Date of Earliest Event Reported):		October 28, 2008

Marathon Oil Corporation

(Exact name of registrant as specified in its charter)


Delaware	1-5153		25-0996816
(State or other jurisdiction of incorporation)	(Commission File Number)		(I.R.S. Employer Identification No.)

5555 San Felipe Road, Houston, Texas			77056
(Address of principal executive offices)			(Zip Code)

Registrant’s telephone number, including area code:		(713) 629-6600

Not Applicable

Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Explanatory Note

This amends the Form 8-K previously filed on October 27, 2008, to include the XBRL files which were not properly loaded.

Item 8.01

Other Events.

Attached as Exhibit 100 to this Current Report on Form 8-K are the following materials from the Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008, of Marathon Oil Corporation., filed on August 8, 2008, formatted in XBRL (eXtensible Business Reporting Language):

(i)	the Consolidated Statements of Operations,

(ii)	the Consolidated Balance Sheets,

(iii)

the Consolidated Statements of Cash Flows,

(iv)	certain notes to these financial statements tagged as blocks of text.

These XBRL-formatted documents are not readable in HyperText Markup Language (HTML). Users of this data are advised pursuant to Rule 401 of Regulation S-T that the financial information contained in the XBRL documents is unaudited and these are not the official publicly filed financial statements of Marathon Oil Corporation. The purpose of submitting these XBRL formatted documents is to test the related format and technology and, as a result, investors should continue to rely on the official filed version of the furnished documents and not rely on this information in making investment decisions.

In accordance with Rule 402 of Regulation S-T, the information in this Current Report on Form 8-K, including Exhibit 100, shall not be deemed to be “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), or otherwise subject to the liability of that section, and shall not be incorporated by reference into any registration statement or other document filed under the Securities Act of 1933, as amended, or the Exchange Act, except as shall be expressly set forth by specific reference in such filing.

Item 9.01

Financial Statements and Exhibits

(d)

Exhibits

100

The following materials from Marathon Oil Corporation . Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2008, filed on July 30, 2008, formatted in XBRL (eXtensible Business Reporting Language):

(i) the Consolidated Statements of Operations,

(ii) the Consolidated Balance Sheets,

(iii) the Consolidated Statements of Cash Flows,

(iv) certain notes to these financial statements tagged as blocks of text.

EXHIBIT INDEX

Exhibit Number		Description
Exhibit 100.INS		XBRL Instance Document

Exhibit 100.SCH		XBRL Taxonomy Extension Schema Document

Exhibit 100.CAL		XBRL Taxonomy Extension Calculation Linkbase Document

Exhibit 100.LAB		XBRL Taxonomy Extension Label Linkbase Document

Exhibit 100.PRE		XBRL Taxonomy Extension Presentation Linkbase Document

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.


	Marathon Oil Corporation

October 28, 2008	By:	/ s/ Michael K. Stewart

		Name: Michael K. Stewart
		Title: Vice President, Accounting and Controller

EX-100.INS 2 mro-20080630.xml MARATHON OIL CORPORATION XBRL INSTANCE DOCUMENT: VOLUNTARY XBRL FILING OF JUNE 30, 2008 10-Q Marathon Oil Corporation 2008-04-01 2008-06-30 Marathon Oil Corporation 2007-04-01 2007-06-30 Marathon Oil Corporation 2008-01-01 2008-06-30 Marathon Oil Corporation 2007-01-01 2007-06-30 Marathon Oil Corporation 2008-06-30 Marathon Oil Corporation 2007-12-31 Marathon Oil Corporation 2008-01-01 Marathon Oil Corporation 2007-01-01 Marathon Oil Corporation 2007-06-30 iso4217:USD iso4217:USD xbrli:shares xbrli:shares

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<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>18. Accounting Standards Not Yet Adopted</h3><p> In June 2008, the FASB issued FASB Staff Position on EITF 03-6-1, "Determining Whether Instruments Granted in Share-Based Payment Transactions Are Participating Securities" ("FSP EITF 03-6-1") which provides that unvested share-based payment awards that contain nonforfeitable rights to dividends or dividend equivalents (whether paid or unpaid) are participating securities and, therefore, need to be included in the earnings allocation in computing earnings per share ("EPS") under the two-class method. For Marathon, FSP EITF 03-6-1 is effective January 1, 2009 and all prior-period EPS data (including any amounts related to interim periods, summaries of earnings and selected financial data) will be adjusted retrospectively to conform to its provisions. Early application of FSP EITF 03-6-1 is not permitted. Although restricted stock awards meet this definition of participating securities, Marathon does not expect application of FSP EITF 03-6-1 to have a significant impact on its reported EPS.</p><p> On April 25, 2008, the FASB issued FASB Staff Position on FAS 142-3 (FSP 142-3) which amends the factors that should be considered in developing renewal or extension assumptions used to determine the useful life of a recognized intangible asset under SFAS No. 142, Goodwill and Other Intangible Assets. The intent of this FSP is to improve the consistency between the useful life of a recognized intangible asset and the period of expected cash flows used to measure the fair value of the asset. For Marathon, FSP 142-3 will be effective on January 1, 2009, early adoption is prohibited. The provisions of FSP 142-3 is to be applied prospectively to intangible assets acquired after the effective date, except for the disclosure requirements which must be applied prospectively to all intangible assets recognized as of, and subsequent to, the effective date. Marathon is currently evaluating the provisions of this statement.</p><p> In March 2008, the FASB issued SFAS No. 161, "Disclosures about Derivative Instruments and Hedging Activities - an amendment of FASB Statement No. 133." This statement expands the disclosure requirements for derivative instruments to provide information regarding (i) how and why an entity uses derivative instruments, (ii) how derivative instruments and related hedged items are accounted for under SFAS No. 133 and its related interpretations and (iii) how derivative instruments and related hedged items affect an entity's financial position, financial performance and cash flows. To meet these objectives, the statement requires qualitative disclosures about objectives and strategies for using derivati ves, quantitative disclosures about fair value amounts and gains and losses on derivative instruments and disclosures about credit-risk-related contingent features in derivative agreements. For Marathon, SFAS No. 161 is effective January 1, 2009. The statement encourages but does not require disclosures for earlier periods presented for comparative purposes at initial adoption. Marathon is currently evaluating the provisions of this statement.</p><p> In December 2007, the FASB issued SFAS No. 141 (Revised 2007), "Business Combinations" ("SFAS No. 141 (R)"). This statement significantly changes the accounting for business combinations. Under SFAS No.141(R), an acquiring entity will be required to recognize all the assets acquired, liabilities assumed and any non-controlling interest in the acquiree at their acquisition-date fair value with limited exceptions. The statement expands the definition of a business and is expected to be applicable to more transactions than t he previous business combinations standard. The statement also changes the accounting treatment for changes in control, step acquisitions, transaction costs, acquired contingent liabilities, in-process research and development, restructuring costs, changes in deferred tax asset valuation allowances as a result of a business combination and changes in income tax uncertainties after the acquisition date. Accounting for changes in valuation allowances for acquired deferred tax assets and the resolution of uncertain tax positions for prior business combinations will impact tax expense instead of impacting goodwill. Additional disclosures are also required. For Marathon, SFAS No. 141(R) will be applied prospectively effective January 1, 2009.</p><p> Also in December 2007, the FASB issued SFAS No. 160, "Noncontrolling Interests in Consolidated Financial Statements - An Amendment of ARB No. 51." This statement establishes new accounting and reporting standards for the noncon trolling interest in a subsidiary and for the deconsolidation of a subsidiary. Specifically, this statement clarifies that a noncontrolling interest in a subsidiary (sometimes called a minority interest) is an ownership interest in the consolidated entity that should be reported as equity in the consolidated financial statements, but separate from the parent's equity. It requires that the amount of consolidated net income attributable to the noncontrolling interest be clearly identified and presented on the face of the consolidated income statement. SFAS No. 160 clarifies that changes in a parent's ownership interest in a subsidiary that do not result in deconsolidation are equity transactions if the parent retains its controlling financial interest. In addition, this statement requires that a parent recognize a gain or loss in net income when a subsidiary is deconsolidated, based on the fair value of the noncontrolling equity investment on the deconsolidation date. Additional disclosures are required that c learly identify and distinguish between the interests of the parent and the interests of the noncontrolling owners. For Marathon, SFAS No. 160 will be effective January 1, 2009 and early adoption is prohibited. The statement must be applied prospectively, except for the presentation and disclosure requirements which must be applied retrospectively for all periods presented in consolidated financial statements. Marathon is currently evaluating the provisions of this statement.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>16. Supplemental Cash Flow Information</h3><table style="border-collapse: collapse;"><td width=533 height=17 align=left></td><td width=150 height=13.5 align=center><b>Six Months Ended</b></td></tr><tr><td width=385 height=17 align=left></td><td width=150 height=13.5 align=center><b>June 30,</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=left style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left><b>Net cash provided from operating activities included:</b></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right></td><td width=9 height=17 align=left></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"> Interest paid (net of amounts capitalized)</td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">54</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right s tyle="background-color: #eeeeee;">20</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left> Income taxes paid to taxing authorities</td><td width=12 height=17 align=center></td><td width=65 height=17 align=right>1,498</td><td width=9 height=17 align=left></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right>1,630</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=center style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left><b>Commercial paper and revolving credit arrangements, net:</b></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right></td><td width=9 height=17 align=left></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"> Commercial paper - issuances</td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">28,992</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left> - repayments</td><td width=12 height=17 align=left></td><td width=65 height=17 align=right>(28,013)</td><td width=9 height=17 align=left></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right>-</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"> Credit agreements - borrowings</td> <td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">249</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left> - repayments</td><td width=12 height=17 align=left></td><td width=65 height=17 align=right>(844)</td><td width=9 height=17 align=left></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right>-</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left><b>Noncash investing and financing activities:</b></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right></td><td width=9 height=17 align=left></td><td width=12 height=17 align=left></td& gt;<td width=65 height=17 align=right></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"> Bond obligation assumed for trusteed funds</td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">1,000</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right></td><td width=9 height=17 align=left></td><td width=12 heigh t=17 align=left></td><td width=65 height=17 align=right></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"><b>Noncash effect of deconsolidation of EGHoldings:</b></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left> Decrease in non-cash assets</td><td width=12 height=17 align=left>$</td><td width=65 height=17 align=right>-</td&g t;<td width=9 height=17 align=left></td><td width=12 height=17 align=left>$</td><td width=65 height=17 align=right>1,759</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee;"> Record equity method investment</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">942</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left> Decrease in liabilities</td><td width=12 height=17 alig n=left></td><td width=65 height=17 align=right>-</td><td width=9 height=17 align=left></td><td width=12 height=17 align=left></td><td width=65 height=17 align=right>310</td></tr><tr><td width=25 height=17 align=left></td><td width=487 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"> Elimination of minority interest</td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-c olor: #eeeeee; border-bottom: 1px solid #000000;">544</td></tr></table></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>15. Commitments and Contingencies</h3><p> Marathon is the subject of, or party to, a number of pending or threatened legal actions, contingencies and commitments involving a variety of matters, including laws and regulations relating to the environment. The ultimate resolution of these contingencies could, individually or in the aggregate, be material to Marathon's consolidated financial statements. However, management believes that Marathon will remain a viable and competitive enterprise even though it is possible that these contingencies could be resolved unfavorably. Certain of the Company's commitments are discussed below.</p><p> Marathon are a defendant, along with many other companies with r efinery operations, in 58 cases in 12 states alleging methyl tertiary butyl ether ("MTBE") contamination in groundwater. These cases, after their removal from state to federal court, have been consolidated in a multi-district litigation ("MDL") in the Southern District of New York for pretrial proceedings. On July 22, 2008, the judge issued an opinion holding that the MTBE settlement agreement represented a "good faith" settlement. The settling defendants, which included Marathon, were required to obtain a good faith determination for the California and Illinois cases in order to insure protection from contribution actions. The federal judge in the MDL concluded that both the approximate percentage of estimated liability being paid and the dollar amounts being allocated were reasonable. Similar approvals must also be obtained from state court judges in Illinois and California. The timing of payment under the settlement agreement could be impacted by an appeal of the judges' rulings on fairness. Such settl ement is not expected to significantly impact Marathon's consolidated results of operations, financial position or cash flows.</p><p> <b>Contractual commitments</b> - At June 30, 2008 and December 31, 2007, Marathon's contract commitments to acquire property, plant and equipment totaled $4,130 million and $3,893 million. During the first six months of 2008, the majority of additional contract commitments were related to Gulf of Mexico projects.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>14. Stockholders' Equity</h3><p> <b>Share repurchase</b> - As of June 30, 2008, Marathon had acquired 64 million common shares at a cost of $2,815 million under its $5 billion authorized share repurchase program, including 6 million common shares acquired during the first six months of 2008 at a cost of $295 million.</p><p> <b>Stock split</b> - On April 25, 2007, Marathon's Board of Directors declared a two-for-one split of the Company's common stock which was affected in the form of a stock dividend distributed on June 18, 2007, to stockholders of record at the close of business on May 23, 2007.</p></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>13. Stock-Based Compensation Plans</h3><p> The following table presents a summary of stock option award and restricted stock award activity for the second quarter 2008:</p><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=250 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=50 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Number of Shares Under Option (a)</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Weighted Average Exercise Price</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Restricted Stock Awards</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Weighted Average Grant Date Fair Value</b></td></tr><tr><td width=24 height=17 align=left></td><td width=250 height=17 align=left style="background-color: #eeeeee;">Outstanding at December 31, 2007</td><td width=50 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=110 height=17 align=right style="background-color: #eeeeee;">12,214,853</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=110 height=17 align=right style="background-color: #eeeeee;">34.58</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=110 height=17 align=right style="background-color: #eeeeee;">1,527,831</td><td width=9 height=17 align=left style="background-color: #eeeeee;">& lt;/td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=110 height=17 align=right style="background-color: #eeeeee;">39.87</td></tr><tr><td width=24 height=17 align=left></td><td width=250 height=17 align=left style="background-color: #ffffff;"> Granted</td><td width=50 height=17 align=left style="background-color: #ffffff;">(b)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=110 height=17 align=right style="background-color: #ffffff;">2,463,528</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=110 height=17 align=right style="background-color: #ffffff;">52.01</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=110 height=17 align=right style="background-color: #ffffff;">369,741</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=110 height=17 align=right style="background-color: #ffffff;">49.71</td></tr><tr><td width=24 height=17 align=left></td><td width=250 height=17 align=left style="background-color: #eeeeee;"> Exercised</td><td width=50 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=110 height=17 align=right style="background-color: #eeeeee;">(282,194)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style ="background-color: #eeeeee;"></td><td width=110 height=17 align=right style="background-color: #eeeeee;">24.79</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=110 height=17 align=right style="background-color: #eeeeee;">(535,356)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=110 height=17 align=right style="background-color: #eeeeee;">27.04</td></tr><tr><td width=24 height=17 align=left></td><td width=250 height=17 align=left style="background-color: #ffffff;"> Canceled</td><td width=50 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(185,050)</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=110 height=17 align=right style="background-color: #ffffff;">49.66</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(68,313)</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=110 height=17 align=right style="background-color: #ffffff;" >39.29</td></tr><tr><td width=24 height=17 align=left></td><td width=250 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">Outstanding at June 30, 2008</td><td width=50 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">14,211,137</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=110 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">37.60</td><td width=9 height=17 align=left style=" background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=110 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">1,293,903</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=110 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">48.03</td></tr></table><p> (a) Of the stock option awards outstanding as of June 30, 2008, 5,550,357, 8,171,670 and 502,110 were outstanding under the 2007 Incentive Compensation Plan, the 2003 Incentive Compensation Plan and the 1990 Stock Plan, including 749,2 82 stock options with tandem stock appreciation rights.</p><p> (b) The weighted average grant date fair value of stock option awards granted was $13.09 per share.</p></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>12. Debt</h3><p> At June 30, 2008, Marathon had $981 million of commercial paper outstanding under its U.S. commercial paper program that is supported by its $3.0 billion revolving credit facility.</p><P> On March 12, 2008, Marathon issued $1 billion aggregate principal amount of senior notes bearing interest at 5.900 percent with a maturity date of March 15, 2018. Interest on the senior notes is payable semi-annually beginning September 15, 2008.</P><p> In February 2008, the 805 million Canadian dollar revolving term credit facility of Marathon Oil Canada Corporation was repaid and the facility was terminated.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>11. Fair Value Measurements</h3><p> As defined in SFAS No. 157, fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. SFAS No. 157 describes three approaches to measuring the fair value of assets and liabilities: the market approach, the income approach and the cost approach, each of which include multiple valuation techniques. The market approach uses prices and other relevant information generated by market transactions involving identical or comparable assets or liabilities. The income approach uses valuation techniques to measure fair value by converting future amounts, such as cash flows or earnings, into a single present value am ount using current market expectations about those future amounts. The cost approach is based on the amount that would currently be required to replace the service capacity of an asset. This is often referred to as current replacement cost. The cost approach assumes that the fair value would not exceed what it would cost a market participant to acquire or construct a substitute asset of comparable utility, adjusted for obsolescence.</p><p> SFAS No. 157 does not prescribe which valuation technique should be used when measuring fair value and does not prioritize among the techniques. SFAS No. 157 establishes a fair value hierarchy that prioritized the inputs used in applying the various valuation techniques. Inputs broadly refer to the assumptions that market participants use to make pricing decisions, including assumptions about risk. Level 1 inputs are given the highest priority in the fair value hierarchy while Level 3 inputs are given the lowest priority. The three levels of the fair value hierarchy are as follows.</p><ul><li>Level 1 - Observable inputs that reflect unadjusted quoted prices for identical assets or liabilities in active markets as of the reporting date. Active markets are those in which transactions for the asset or liability occur in sufficient frequency and volume to provide pricing information on an ongoing basis.</li><li>Level 2 - Observable market-based inputs or unobservable inputs that are corroborated by market data. These are inputs other than quoted prices in active markets included in Level 1, which are either directly or indirectly observable as of the reporting date.</li><li>Level 3 - Unobservable inputs that are not corroborated by market data and may be used with internally developed methodologies that result in management's best estimate of fair value.</li></ul><p> Marathon uses a market or income approach for its recurring fair value measurements an d endeavors to use the best information available. Accordingly, valuation techniques that maximize the use of observable inputs are favored. Financial assets and liabilities are classified in their entirety based on the lowest priority level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy.</p><p> The following table presents net financial assets (liabilities) accounted for at fair value on a recurring basis as of June 30, 2008:</p><table style="border-collapse: collapse;"><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=12 height=18 align=left style="border-bottom: 1px solid #000000;"></t d><td width=65 height=18 align=center style="border-bottom: 1px solid #000000;"><b>Level 1</b></td><td width=9 height=18 align=center style="border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=center style="border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=center style="border-bottom: 1px solid #000000;"><b>Level 2</b></td><td width=9 height=18 align=center style="border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=center style="border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=center style="border-bottom: 1px solid #000000;"><b>Level 3</b></td><td width=9 height=18 align=center style="border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=center style="border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=center style="border-bottom: 1px solid #000000;">< b>Total</b></td></tr><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="background-color: #eeeeee;">Derivative Instruments:</td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=left style="background-color: #eeeeee;"></td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=left style="background-color: #eeeeee;"></td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=left style="background-color: #eeeeee;"></td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left st yle="background-color: #eeeeee;"></td><td width=65 height=18 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="background-color: #ffffff;"> Commodity</td><td width=12 height=18 align=left style="background-color: #ffffff;">$</td><td width=65 height=18 align=right style="background-color: #ffffff;">63</td><td width=9 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;">$</td><td width=65 height=18 align=right style="background-color: #ffffff;">(2)</td><td width=9 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;">$</td><td width=65 height=18 align=right style="background-color: #ffffff;">(988)& lt;/td><td width=9 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;">$</td><td width=65 height=18 align=right style="background-color: #ffffff;">(927)</td></tr><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="background-color: #eeeeee;"> Interest rate</td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=right style="background-color: #eeeeee;">-</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=right style="background-color: #eeeeee;">-</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 ali gn=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=right style="background-color: #eeeeee;">(1)</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=right style="background-color: #eeeeee;">(1)</td></tr><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="background-color: #ffffff;"> Foreign currency</td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff; border-botto m: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">14</td><td width=9 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1</td><td width=9 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">15</td></tr><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="background-color: #eeeeee;"> Net derivative instruments</td><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">63</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">12</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">(988)</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td ><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">(913)</td></tr><tr><td width=25 height=8 align=left></td><td width=315 height=8 align=left style="background-color: #ffffff;"></td><td width=12 height=8 align=left style="background-color: #ffffff;"></td><td width=65 height=8 align=right style="background-color: #ffffff;"></td><td width=9 height=8 align=left style="background-color: #ffffff;"></td><td width=12 height=8 align=left style="background-color: #ffffff;"></td><td width=65 height=8 align=right style="background-color: #ffffff;"></td><td width=9 height=8 align=left style="background-color: #ffffff;"></td><td width=12 height=8 align=left style="background-color: #ffffff;"></td><td width=65 heig ht=8 align=right style="background-color: #ffffff;"></td><td width=9 height=8 align=left style="background-color: #ffffff;"></td><td width=12 height=8 align=left style="background-color: #ffffff;"></td><td width=65 height=8 align=right style="background-color: #ffffff;"></td></tr><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="background-color: #eeeeee;">Other assets</td><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">15</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bott om: 1px solid #000000;">-</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">15</td></tr><tr><td width=25 height=18 align=left></td><td width=315 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"> Total at fair value</td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1 px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">78</td><td width=9 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">12</td><td width=9 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(988)</td><td width=9 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 he ight=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(898)</td></tr></table><p> Deposits of $75 million in broker accounts covered by master netting agreements are netted against the value to arrive at the fair values of commodity derivatives. Derivatives in Level 1 are exchange-traded contracts for crude oil, natural gas, refined products and ethanol measured at fair value with a market approach using the close-of-day settlement prices for the market. Derivatives in Level 2 are measured at fair value with a market approach using broker quotes or third-party pricing services, which have been corroborated with market data. Level 3 derivatives are measured at fair value using either a market or income approach. Generally at least one input is unobservable, such as the use of an internally generated mo del or an external data source. Commodity derivatives in Level 3 include a $526 million liability related to two U.K. natural gas sales contracts that are accounted for as derivative instruments and a $432 million liability for crude oil options related to sales of Canadian synthetic crude oil. The fair value of the U.K. natural gas contracts is measured with an income approach based upon cash flows from expected sales volumes and the U.K. forward natural gas strip price. The crude oil options are measured at fair value using a Black-Scholes option pricing model, an income approach that utilizes market prices and market volatility obtained from a third-party service.</p><p> The following is a reconciliation of the net beginning and ending balances recorded for derivative instruments classified as Level 3 in the fair value hierarchy for the three and six months ended June 30, 2008.</p><table style="border-collapse: collapse;"><tr><td width=25 heigh t=18 align=left></td><td width=515 height=18 align=left></td><td width=12 height=18 align=right></td><td width=150 height=18 align=center><b>Three Months Ended</b></td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=12 height=18 align=right style="border-bottom: 1px solid #000000;"></td><td width=150 height=18 align=center style="border-bottom: 1px solid #000000;"><b>June 30, 2008</b></td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #eeeeee;">Beginning balance</td><td width=12 height=18 align=right style="background-color: #eeeeee;">$</td><td width=150 height=18 align=right style="background-color: #eeeeee;">(485)</td></tr><tr> <td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #ffffff;">Total realized and unrealized losses:</td><td width=12 height=18 align=right style="background-color: #ffffff;"></td><td width=150 height=18 align=right style="background-color: #ffffff;"></td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #eeeeee;">Included in net income </td><td width=12 height=18 align=right style="background-color: #eeeeee;"></td><td width=150 height=18 align=right style="background-color: #eeeeee;">(542)</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #ffffff;">Included in other comprehensive income</td><td width=12 height=18 align=right style="background-color: #ffffff;"></td><td width=150 height=18 align=right style="background-color: #ffffff;">-</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #eeeeee;">Purchases, sales, issuances and settlements, net</td><td width=12 height=18 align=right style="background-color: #eeeeee;"></td><td width=150 height=18 align=right style="background-color: #eeeeee;">39</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">Ending Balance</td><td width=12 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=150 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(988)</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left></td& gt;<td width=12 height=18 align=right></td><td width=150 height=18 align=right></td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left></td><td width=12 height=18 align=right></td><td width=150 height=18 align=center><b>Six Months Ended</b></td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=12 height=18 align=right style="border-bottom: 1px solid #000000;"></td><td width=150 height=18 align=center style="border-bottom: 1px solid #000000;"><b>June 30, 2008</b></td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #eeeeee;">Beginning balance</td><td width=12 height=18 align=right style="backgroun d-color: #eeeeee;">$</td><td width=150 height=18 align=right style="background-color: #eeeeee;">(359)</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #ffffff;">Total realized and unrealized losses:</td><td width=12 height=18 align=right style="background-color: #ffffff;"></td><td width=150 height=18 align=right style="background-color: #ffffff;"></td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #eeeeee;">Included in net income </td><td width=12 height=18 align=right style="background-color: #eeeeee;"></td><td width=150 height=18 align=right style="background-color: #eeeeee;">(679)</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #ffffff;">Included in oth er comprehensive income</td><td width=12 height=18 align=right style="background-color: #ffffff;"></td><td width=150 height=18 align=right style="background-color: #ffffff;">(1)</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #eeeeee;">Purchases, sales, issuances and settlements, net</td><td width=12 height=18 align=right style="background-color: #eeeeee;"></td><td width=150 height=18 align=right style="background-color: #eeeeee;">51</td></tr><tr><td width=25 height=18 align=left></td><td width=515 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">Ending Balance</td><td width=12 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=150 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(988)</td></tr></table><p> The change in unrealized losses included in net income related to instruments held at June 30, 2008 was $557 million and $707 million for the second quarter and first six months of 2008. Amounts reported in net income are classified as sales and other operating revenues or cost of revenues for commodity derivative instruments, as net interest and other financing income for interest rate derivative instruments and as cost of revenues for foreign currency derivatives.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>10. Property, Plant and Equipment</h3><p> Exploratory well costs capitalized greater than one year after completion of drilling were $62 million as of June 30, 2008, a decrease of $38 million from December 31, 2007, primarily due to the transfer of the Ozona prospect exploratory wells in progress. A well on the Ozona prospect was re-entered and production casing was set in the second quarter of 2008.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>9. Inventories</h3><p> Inventories are carried at the lower of cost or market value. The cost of inventories of crude oil, refined products and merchandise is determined primarily under the last-in, first-out ("LIFO") method.</p><table style="border-collapse: collapse;"><tr><td width=25 height=18 align=left></td><td width=350 height=18 align=left></td><td width=12 height=12.75 align=center></td><td width=125 height=12.75 align=center><b>June 30,</b></td><td width=9 height=18 align=left></td><td width=12 height=12.75 align=center></td><td width=125 height=12.75 align=center><b>December 31,</b></td></tr><tr><td width=2 5 height=18 align=left></td><td width=350 height=18 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=12 height=12.75 align=right style="border-bottom: 1px solid #000000;"></td><td width=125 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=9 height=18 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=12.75 align=right style="border-bottom: 1px solid #000000;"></td><td width=125 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td></tr><tr><td width=25 height=18 align=left></td><td width=350 height=18 align=left style="background-color: #eeeeee;">Liquid hydrocarbons, natural gas and bitumen</td><td width=12 height=18 align=right style="background-color: #eeeeee;">$</td><td width=125 height=18 align=right style="background-color: #eeeeee;">2,476</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=right style="background-color: #eeeeee;">$</td><td width=125 height=18 align=right style="background-color: #eeeeee;">1,203</td></tr><tr><td width=25 height=18 align=left></td><td width=350 height=18 align=left style="background-color: #ffffff;">Refined products and merchandise</td><td width=12 height=18 align=right style="background-color: #ffffff;"></td><td width=125 height=18 align=right style="background-color: #ffffff;">2,245</td><td width=9 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=right style="background-color: #ffffff;"></td><td width=125 height=18 align=right style="background-color: #ffffff;">1,792</td></tr><tr><td width=25 height=18 align=left></t d><td width=350 height=18 align=left style="background-color: #eeeeee;">Supplies and sundry items</td><td width=12 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=125 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">294</td><td width=9 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=125 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">282</td></tr><tr><td width=25 height=18 align=left></td><td width=350 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"> Total, at cost</td><td width=12 height=18 align=right style="background-color: #ffffff; border-bottom: 1px s olid #000000;">$</td><td width=125 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">5,015</td><td width=9 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=125 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">3,277</td></tr></table></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>8. Comprehensive Income</h3><p> The following sets forth Marathon's comprehensive income for the periods indicated:</p><table style="border-collapse: collapse;"><td width=385 height=17 align=left></td><td width=150 height=13.5 align=center><b>Three Months Ended</b></td><td width=2 height=17 align=center></td><td width=150 height=13.5 align=center><b>Six Months Ended</b></td></tr><tr><td width=385 height=17 align=left></td><td width=150 height=13.5 align=center><b>June 30,</b></td><td width=2 height=17 align=center></td><td width=150 height=13.5 align=center><b>June 30,</b></td></tr&g t;</table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=300 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=50 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=9 height=17 align=right style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=9 height=17 align=right style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #0 00000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=9 height=17 align=right style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td></tr><tr><td width=24 height=17 align=left></td><td width=300 height=17 align=left style="background-color: #eeeeee;">Net income</td><td width=50 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">774</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">1,550</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">1,505</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">2,267</td></tr><tr><td width=24 height=17 align=left></td><td width=300 height=17 align=left style="background-color: #ffffff;">Other comprehensive income, net of taxes:</td><td width=50 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td>< ;td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width=24 height=17 align=left></td><td width=300 height=17 align=left style="background-color: #eeeeee;"> &# 160; Defined benefit postretirement</td><td width=50 height=17 align=left style="background-color: #eeeeee;">(a)</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(30)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(81)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(20)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td>&l t;td width=51 height=17 align=right style="background-color: #eeeeee;">(37)</td></tr><tr><td width=24 height=17 align=left></td><td width=300 height=17 align=left style="background-color: #ffffff;"> Other</td><td width=50 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td&g t;<td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(1)</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">3</td></tr><tr><td width=24 height=17 align=left></td><td width=300 height=17 align=left style="background-color: #eeeeee;"></td><td width=50 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align= right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=17 align=left></td><td width=300 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"> Comprehensive income</td>< td width=50 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">745</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1,470</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=51 height=17 align=right style="backgroun d-color: #ffffff; border-bottom: 1px solid #000000;">1,484</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">2,233</td></tr></table><p> (a) During the first six months of 2008 and 2007, changes were made to the estimates used to measure certain assumptions necessary in determining the funded status of Marathon's postretirement benefit plans as of December 31, 2007 and 2006.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>7. Income Taxes</h3><p> The following is an analysis of the effective income tax rates for the periods presented:</p><table style="border-collapse: collapse;"><tr><td width=520 height=18 align=left></td><td width=150 height=12.75 align=center><b>Six Months Ended</b></td></tr><tr><td width=520 height=18 align=left></td><td width=150 height=12.75 align=center><b>June 30,</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=25 height=18 align=left></td><td width=475 height=18 align=left style="border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="border-bot tom: 1px solid #000000;"><b>2008</b></td><td width=15 height=18 align=center style="border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="border-bottom: 1px solid #000000;"><b>2007</b></td></tr><tr><td width=25 height=18 align=left></td><td width=475 height=18 align=left style="background-color: #eeeeee;">Statutory U.S. income tax rate</td><td width=65 height=18 align=right style="background-color: #eeeeee;">35%</td><td width=15 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=right style="background-color: #eeeeee;">35%</td></tr><tr><td width=25 height=18 align=left></td><td width=475 height=18 align=left style="background-color: #ffffff;">Effects of foreign operations, including foreign tax credits</td><td width=65 height=18 align=right style="background-color: #ffffff;"> ;14</td><td width=15 height=18 align=left style="background-color: #ffffff;"></td><td width=65 height=18 align=right style="background-color: #ffffff;">9</td></tr><tr><td width=25 height=18 align=left></td><td width=475 height=18 align=left style="background-color: #eeeeee;">State and local income taxes, net of federal income tax effects</td><td width=65 height=18 align=right style="background-color: #eeeeee;">1</td><td width=15 height=18 align=left style="background-color: #eeeeee;"></td><td width=65 height=18 align=right style="background-color: #eeeeee;">2</td></tr><tr><td width=25 height=18 align=left></td><td width=475 height=18 align=left style="background-color: #ffffff;">Other tax effects</td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(2)</td><td width=15 height=18 align=left style="backgro und-color: #ffffff;"></td><td width=65 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(1)</td></tr><tr><td width=25 height=18 align=left></td><td width=475 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">Effective income tax rate for continuing operations</td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">48%</td><td width=15 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">45%</td></tr></table><p> The geographic sources of income and related tax expense contributed to the increase in the effective income tax rate in the first six months of 2008 when compared to the same period in 20 07. The estimated 2008 effective tax rate includes the reversal of the valuation allowance of approximately $700 million related to the Norwegian net operating loss carryforwards. Based upon current production estimates for 2008, the Company expects sufficient income will be generated to utilize this deferred tax asset by December 31, 2008.</p><p> Marathon is continuously undergoing examination of its U.S. federal income tax returns by the Internal Revenue Service. Such audits have been completed through the 2005 tax year. Marathon believes it has made adequate provision for federal income taxes and interest which may become payable for years not yet settled. Further, Marathon is routinely involved in U.S. state and local income tax audits and foreign jurisdiction tax audits. Marathon believes all other audits will be resolved within the amounts paid and/or provided for these liabilities. As of June 30, 2008, Marathon's income tax returns remain subject to examination in the following major tax jurisdictions for the tax years indicated.</p><table style="border-collapse: collapse;"><tr><td width=25 height=18 align=left></td><td width=150 height=18 align=left style="border-bottom: 1px solid #000000;"></td><td width=200 height=18 align=left style="border-bottom: 1px solid #000000;"></td><td width=100 height=18 align=right style="border-bottom: 1px solid #000000;"></td></tr><tr><td width=25 height=18 align=left></td><td width=150 height=18 align=left style="background-color: #eeeeee;">United States</td><td width=200 height=18 align=left style="background-color: #eeeeee;">(a)</td><td width=100 height=18 align=right style="background-color: #eeeeee;">2000 - 2007</td></tr><tr><td width=25 height=18 align=left></td><td width=150 height=18 align=left style="background-color: #ffffff;">Canada</td><td width=200 height=1 8 align=left style="background-color: #ffffff;"></td><td width=100 height=18 align=right style="background-color: #ffffff;">2000 - 2007</td></tr><tr><td width=25 height=18 align=left></td><td width=150 height=18 align=left style="background-color: #eeeeee;">Equatorial Guinea</td><td width=200 height=18 align=left style="background-color: #eeeeee;"></td><td width=100 height=18 align=right style="background-color: #eeeeee;">2006 - 2007</td></tr><tr><td width=25 height=18 align=left></td><td width=150 height=18 align=left style="background-color: #ffffff;">Libya</td><td width=200 height=18 align=left style="background-color: #ffffff;"></td><td width=100 height=18 align=right style="background-color: #ffffff;">2006 - 2007</td></tr><tr><td width=25 height=18 align=left></td><td width=150 height=18 align=left style="background-color: #eeeeee; border - -bottom: 1px solid #000000;">United Kingdom</td><td width=200 height=18 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=100 height=18 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">2005 - 2007</td></tr></table><p> (a) Includes federal, state and local jurisdictions.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>6. Defined Benefit Postretirement Plans</h3><p> The following summarizes the components of net periodic benefit cost:</p><table style="border-collapse: collapse;"><tr><td width=444 height=18 align=left></td><td width=145 height=13.5 align=center><b>Three Months Ended</b></td></tr><tr><td widtd=400 height=18 align=left></td><td width=145 height=13.5 align=center><b>June 30,</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=337 height=17 align=left></td><td width=125 height=12.75 align=center style="border-bottom: 1px solid #0000 00;"><b>Pension Benefits</b></td><td width=56 height=17 align=left></td><td width=125 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Other Benefits</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=337 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=57 height=12.75 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=55 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2 008</b></td><td width=57 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=23 height=17 align=center style="border-bottom: 1px solid #000000;"></td></tr></table><table style="border-collapse: collapse;"><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #eeeeee;">Service cost</td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">39</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">37</td><td width=9 heig ht=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">4</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">6</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #ffffff;">Interest cost</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">41</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td>< td width=65 height=17 align=right style="background-color: #ffffff;">37</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">10</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">11</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #eeeeee;">Expected return on plan assets</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(42)</td><td width=9 height=17 align=left style="backgroun d-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(39)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #ffffff;">Amortization:</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #eeeeee;"> - prior service cost (credit)</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">4</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">4</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(2)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(3)</td></tr><tr><td width=25 height=17 al ign=left></td><td width=315 height=17 align=left style="background-color: #ffffff;"> - actuarial loss</td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">11</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">13</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">2</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">Net periodic benefit cost</td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">53</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom : 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">52</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">12</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">16</td></tr></table><table style="border-collapse: collapse; margin-top: 20px;"><tr><td width=444 height=18 align=lef t></td><td width=145 height=13.5 align=center><b>Six Months Ended</b></td></tr><tr><td widtd=400 height=18 align=left></td><td width=145 height=13.5 align=center><b>June 30,</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=337 height=17 align=left></td><td width=125 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Pension Benefits</b></td><td width=56 height=17 align=left></td><td width=125 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Other Benefits</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=337 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td& gt;<td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=57 height=12.75 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=55 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=57 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=23 height=17 align=center style="border-bottom: 1px solid #000000;"></td></tr></table><table style="border-collapse: collapse; margin-bottom: 15px;"><tr><td width=25 height=17 align=left></td><t d width=315 height=17 align=left style="background-color: #eeeeee;">Service cost</td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">73</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">70</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">9</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-colo r: #eeeeee;">11</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #ffffff;">Interest cost</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">80</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">71</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">22</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style ="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">22</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #eeeeee;">Expected return on plan assets</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(84)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(77)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td>< ;td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #ffffff;">Amortization:</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">< /td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #eeeeee;"> - prior service cost (credit)</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">7</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">7</td><td width=9 heigh t=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(4)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(5)</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left style="background-color: #ffffff;"> - actuarial loss</td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">15</td><td width=9 height=17 align=left style="background-color: #ffffff;"> ;</td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">18</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">4</td></tr><tr><td width=25 height=17 align=left></td><td width=315 height=17 align=left styl e="background-color: #eeeeee; border-bottom: 1px solid #000000;">Net periodic benefit cost</td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">91</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">89</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">28</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">32</td></tr></table><p> During the first six months of 2008, Marathon made contributions of $33 million to its funded international pension plans. Marathon expects to make additional contributions of approximately $7 million to its funded pension plans over the remainder of 2008. Contributions made from the general assets of Marathon to cover current benefit payments related to unfunded pension and other postretirement benefit plans were $9 million and $16 million during the first six months of 2008.</p></body></html> <html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>5. Segment Information</h3><p> Marathon's operations consist of four reportable operating segments:</p><p> 1) Exploration and Production ("E&P") - explores for, produces and markets liquid hydrocarbons and natural gas on a worldwide basis; <br /> 2) Oil Sands Mining ("OSM") - mines, extracts and transports bitumen from oil sands deposits in Alberta, Canada, and upgrades the bitumen to produce and market synthetic crude oil and by-products; <br /> 3) Refining, Marketing and Transportation ("RM&T") - refines, markets and transports crude oil and petroleum products, primarily in the Midwest, upper Great Plains, Gulf Coast and southeas tern regions of the United States; and <br /> 4) Integrated Gas ("IG") - markets and transports products manufactured from natural gas, such as liquefied natural gas ("LNG") and methanol, on a worldwide basis, and is developing other projects to link stranded natural gas resources with key demand areas.</p><table style="border-collapse: collapse;"><tr><td widtd=24 height=17 align=left></td><td widtd=296 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td widtd=37 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td widtd=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>E&P</b></td><td widtd=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td widtd=12 height=17 align=left sty le="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>OSM</b></td><td widtd=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td widtd=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>RM&T</b></td><td widtd=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td widtd=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>IG</b></td><td widtd=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td widtd=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Total</b></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"><b>Three Months Ended June 30, 2008</b></td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Revenues:</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="backgro und-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width= 24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Customer</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">3,183</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">(80)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">18,267</td><td width=9 height=17 align=right style="background-color: # eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">21</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">21,391</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Intersegment</td><td width=37 height=17 align=left style="background-color: #ffffff;">(a)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">226</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td>< td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">96</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">37</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=center style="background-color: #ffffff;"></td><td width=12 height=17 align=center style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">359</td></tr><tr><td width=24 height=17 align=left>&l t;/td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Related parties</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">15</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">671</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">686</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Segment revenues</td><td width=37 heig ht=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">3,424</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">16</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">18,975</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">21 </td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">22,436</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Elimination of intersegment revenues</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(226)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(96)< /td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(37)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(359)</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Loss on U.K. natural gas contracts</td>< ;td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(165)</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(165)</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Total revenues</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border- bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">3,033</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">(80)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">18,938</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #00000 0;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">21</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">21,912</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Segment income (loss)</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">828</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 he ight=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">(157)</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">158</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">102</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">931</td></tr><tr><td width=24 height=17 align=left></td>& lt;td width=296 height=17 align=left style="background-color: #eeeeee;">Income from equity method investments</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">77</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">43</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 alig n=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">136</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">256</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Depreciation, depletion and amortization</td><td width=37 height=17 align=left style="background-color: #ffffff;">(b)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">311</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">33</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">150</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">1</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">495</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="backgr ound-color: #eeeeee;">Income tax provision (benefit)</td><td width=37 height=17 align=left style="background-color: #eeeeee;">(b)</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">854</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(54)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">108</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">< ;/td><td width=51 height=17 align=right style="background-color: #eeeeee;">36</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">944</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">Capital expenditures</td><td width=37 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">(c)(d)</td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">874</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bo ttom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">262</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">702</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td wid th=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1,838</td></tr></table><table style="border-collapse: collapse; margin-top: 30px;"><tr><td width=24 height=17 align=left></td><td widtd=296 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=37 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>E&P</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"> </td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>OSM</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>RM&T</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>IG</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td wi dth=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Total</b></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"><b>Three Months Ended June 30, 2007</b></td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td widt h=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Revenues:</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td> <td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff ;"></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Customer</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">2,018</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">14,248</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">68</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">16,334</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Intersegment</td><td width=37 height=17 align=left style="background-color: #ffffff;">(a)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">116</td><td width=9 height=17 align=right style ="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">83</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=center style="background-color: #ffffff;"></td><td width=12 height=17 align=center style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">199</td></tr><t r><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Related parties</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">7</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">404</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">411</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> S egment revenues</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">2,141</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">14,735</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=r ight style="background-color: #ffffff;">68</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">16,944</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Elimination of intersegment revenues</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(116)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right s tyle="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(83)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(199)</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Loss o n U.K. natural gas contracts</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(9)</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</t d><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(9)</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Total revenues</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left st yle="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">2,016</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">14,652</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eee eee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">68</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">16,736</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Segment income</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">400</td><td width=9 height=17 align=right style="background-color: #ffffff;"> </td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">1,246</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">12</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">1,658</td></tr><tr><td width=24 height=1 7 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;">Income from equity method investments</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">64</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">31</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td>&l t;td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">22</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">117</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Depreciation, depletion and amortization</td><td width=37 height=17 align=left style="background-color: #ffffff;">(b)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">237</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=righ t style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">149</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">3</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">389</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=1 7 align=left style="background-color: #eeeeee;">Minority interest in loss of subsidiary</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="backgroun d-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">1</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">1</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Income tax provision</td><td width=37 height=17 align=left style="background-color: #ffffff;">(b)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">480</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=1 7 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">721</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">4</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">1,205</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid # 000000;">Capital expenditures</td><td width=37 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">(c)(d)</td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">580</td><td width=9 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">334</td><td width=9 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">34</td><td width=9 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">948</td></tr></table><table style="border-collapse: collapse; margin-top: 30px;"><tr><td width=24 height=17 align=left></td><td widtd=279 height= 17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=37 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=60 height=17 align=center style="border-bottom: 1px solid #000000;"><b>E&P</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>OSM</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>RM&T</b></td><t d width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>IG</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=60 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Total</b></td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #eeeeee;"><b>Six Months Ended June 30, 2008</b></td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style ="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #ffffff;">Revenues:</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #eeeeee;"> Customer</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=60 height=17 align=right style="background-color: #eeeeee;">6,002</td><td width=9 height=17 align=right style="background-c olor: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">99</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">32,600</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">40</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=60 height=17 align=right style="background-color: #eeeeee;">38,741</td></tr><tr&g t;<td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #ffffff;"> Intersegment</td><td width=37 height=17 align=left style="background-color: #ffffff;">(a)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;">385</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">116</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">202</td><td width=9 height=17 align=right style="backgr ound-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=center style="background-color: #ffffff;"></td><td width=12 height=17 align=center style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;">703</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #eeeeee;"> Related parties</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=60 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">29</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">1,199</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="ba ckground-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=60 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">1,228</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #ffffff;"> Segment revenues</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;">6,416</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: # ffffff;">215</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">34,001</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">40</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;">40,672</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #eeeeee;"> Elimination of intersegme nt revenues</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style="background-color: #eeeeee;">(385)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(116)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(202)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=ri ght style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style="background-color: #eeeeee;">(703)</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #ffffff;"> Loss on U.K. natural gas contracts</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=60 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(235)</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #0 00000;"></td><td width=60 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">(235)</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=19 align=left style="background-color: #eeeeee;"> Total revenues</td><td width=37 height=19 align=left style="background-color: #eeeeee;"></td><td width=12 height=19 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=60 height=19 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">5,796</td><td width=9 height=19 align=right style="background-color: #eeeeee;"></td><td width=12 height=19 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=19 align=right style="background-color: #eeeeee; border-bottom: 2px solid #0000 00;">99</td><td width=9 height=19 align=right style="background-color: #eeeeee;"></td><td width=12 height=19 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=19 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">33,799</td><td width=9 height=19 align=right style="background-color: #eeeeee;"></td><td width=12 height=19 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=19 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">40</td><td width=9 height=19 align=right style="background-color: #eeeeee;"></td><td width=12 height=19 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=60 height=19 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">39,734</td>< /tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #ffffff;">Segment income (loss)</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=60 height=17 align=right style="background-color: #ffffff;">1,512</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">(130)</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">83</td><td width=9 height=17 align=right style="background- color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">201</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=60 height=17 align=right style="background-color: #ffffff;">1,666</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #eeeeee;">Income from equity method investments</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style="background-color: #eeeeee;">139</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">71</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">255</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style="background-color: #eeeeee;">465</td></tr><tr><td width=24 height=17 align=left></ td><td width=279 height=17 align=left style="background-color: #ffffff;">Depreciation, depletion and amortization</td><td width=37 height=17 align=left style="background-color: #ffffff;">(b)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;">570</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">67</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">298</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=1 2 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">2</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=60 height=17 align=right style="background-color: #ffffff;">937</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left style="background-color: #eeeeee;">Income tax provision (benefit)</td><td width=37 height=17 align=left style="background-color: #eeeeee;">(b)</td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style="background-color: #eeeeee;">1,541</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-c olor: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(45)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">63</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">84</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=60 height=17 align=right style="background-color: #eeeeee;">1,643</td></tr><tr><td width=24 height=17 align=left></td><td width=279 height=17 align=left sty le="background-color: #ffffff; border-bottom: 1px solid #000000;">Capital expenditures</td><td width=37 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">(c)(d)</td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=60 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1,649</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">510</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ff ffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1,213</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1</td><td width=9 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=60 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">3,373</td></tr></table><table style="border-collapse: collapse; margin-top: 30px;"><tr><td widt h=24 height=17 align=left></td><td widtd=296 height=17 align=left style="border-bottom: 1px solid #000000;">(In millions)</td><td width=42 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>E&P</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>OSM</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"&g t;<b>RM&T</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>IG</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Total</b></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"><b>Six Months Ended June 30, 2007</b></td><td width=42 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td&g t;<td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeee ee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Revenues:</td><td width=42 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-c olor: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Customer</td><td width=42 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">3,723</td><td widt h=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">25,015</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee;">124</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;">$</td><td width=51 height=17 align=right style="background-color: #eee eee;">28,862</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Intersegment</td><td width=42 height=17 align=left style="background-color: #ffffff;">(a)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">256</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">84</td><td w idth=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=center style="background-color: #ffffff;"></td><td width=12 height=17 align=center style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">340</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Related parties</td><td width=42 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px soli d #000000;">11</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">720</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">731</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Segment revenues</td><td width=42 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">3,990</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">25,819</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">124</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">29,933</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Elimination of intersegment revenues</td><td width=42 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(256)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(84)</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td>&l t;td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">(340)</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;"> Gain on U.K. natural gas contracts</td><td width=42 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">12</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=ri ght style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff ; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">12</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;"> Total revenues</td><td width=42 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">3,746</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; bord er-bottom: 2px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">25,735</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">124</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;">$</td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000; ">29,605</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Segment income</td><td width=42 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">785</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">1,591</td><td width=9 height=17 align=right st yle="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">31</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;">$</td><td width=51 height=17 align=right style="background-color: #ffffff;">2,407</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;">Income from equity method investments</td><td width=42 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">105</td><td width=9 height=17 align=right style="background-color: #eeeeee;">&l t;/td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">72</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">47</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">224</td></tr><tr><td width=24 height=17 align =left></td><td width=296 height=17 align=left style="background-color: #ffffff;">Depreciation, depletion and amortization</td><td width=42 height=17 align=left style="background-color: #ffffff;">(b)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">479</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">290</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td>& lt;td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">4</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">773</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee;">Minority interest in loss of subsidiary</td><td width=42 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right styl e="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">3</td><td width=9 height=17 align=right style="background-color: #eeeeee;"></td><td width=12 height=17 align=right style="background-color: #eeeeee;"></td><td width=51 height=17 align=right style="background-color: #eeeeee;">3</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=le ft style="background-color: #ffffff;">Income tax provision</td><td width=42 height=17 align=left style="background-color: #ffffff;">(b)</td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">894</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">919</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"> </td><td width=51 height=17 align=right style="background-color: #ffffff;">12</td><td width=9 height=17 align=right style="background-color: #ffffff;"></td><td width=12 height=17 align=right style="background-color: #ffffff;"></td><td width=51 height=17 align=right style="background-color: #ffffff;">1,825</td></tr><tr><td width=24 height=17 align=left></td><td width=296 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">Capital expenditures</td><td width=42 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">(c)(d)</td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">1,041</td><td width=9 height=17 align=right style="background-color: #eeeeee; bo rder-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">551</td><td width=9 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">91</td>< td width=9 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=51 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">1,683</td></tr></table><p> (a) Management believes intersegment transactions were conducted under terms comparable to those with unrelated parties. <br /> (b) Differences between segment totals and Marathon totals represent amounts related to corporate administrative activities and other unallocated items and are included in "Items not allocated to segments, net of income taxes" in reconciliation below. <br /> (c) Differences between segment totals and Marathon totals represent amounts related to corporate administrative activities. <br /> (d) Through April 2007, Integrated Gas segment capital expenditures include Equatorial Guinea LNG Holdings Limited ("EGHoldings") at 100 percent. Effective May 1, 2007, Marathon no longer consolidates EGHoldings and its investment in EGHoldings is accounted for under the equity method of accounting; therefore, EGHoldings' capital expenditures subsequent to April 2007 are not included in Marathon's capital expenditures.</p><p> The following reconciles segment income to net income as reported in the consolidated statements of income:</p><table style="border-collapse: collapse;"><td width=394 height=17 align=left></td><td width=150 height=13.5 align=center><b>Three Months Ended</b></td><td width=29 height=17 align=center></td><td width=150 height=13.5 align=center> <b>Six Months Ended</b></td></tr><tr><td width=394 height=17 align=left></td><td width=150 height=13.5 align=center><b>June 30</b></td><td width=29 height=17 align=center></td><td width=150 height=13.5 align=center><b>June 30</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=60 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=35 height=12.75 align=center style="border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td&g t;<td width=45 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=55 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=22 height=17 align=center style="border-bottom: 1px solid #000000;"></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #eeeeee;">Segment income</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">931</td&g t;<td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">1,658</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">1,666</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">2,407</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #ffffff;">Items not allocated to segments, net of income taxes:</td><td width=37 h eight=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td></tr ><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #eeeeee;">Corporate and other unallocated items</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(73)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(111)</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(41)</td><td width=9 height=17 align=left style="bac kground-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">(154)</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #ffffff;">Gain (loss) on U.K. natural gas contracts</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">(84)</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">(5)</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td& gt;<td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">(120)</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">6</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #eeeeee;">Gain on foreign currency derivative instruments</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align= left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #ffffff;">Loss on early extinguishment of debt</td><td width=37 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td ><td width=65 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">-</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">-</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #eeeeee;">U.K. t ax legislation</td><td width=37 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="back ground-color: #eeeeee;">-</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #ffffff;">Discontinued operations</td><td width=37 height=17 align=left style="background-color: #ffffff;">(a)</td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">8</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-colo r: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">8</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">Net income</td><td width=37 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeee e; border-bottom: 1px solid #000000;">774</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">1,550</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">1,505</td><td width=9 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td ><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">2,267</td></tr></table><p> (a) The Russian businesses sold in June 2006 were accounted for as discontinued operations. Adjustments to the sales price were completed in 2007 and an additional gain on the sale of $8 million ($13 million before income taxes) was recognized. See Marathon's 2007 Form 10-K for further information.</p><p> The following reconciles total revenues to sales and other operating revenues (including consumer excise taxes) as reported in the consolidated statements of income.</p><table style="border-collapse: collapse;"><td width=365 height=17 align=left></td><td width=150 height=13.5 align=center><b>Three Months Ended</b></td><td width=29 height=17 align=center></td><td width=150 height=13.5 al ign=center><b>Six Months Ended</b></td></tr><tr><td width=365 height=17 align=left></td><td width=150 height=13.5 align=center><b>June 30</b></td><td width=29 height=17 align=center></td><td width=150 height=13.5 align=center><b>June 30</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=350 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions)</i></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=55 height=12.75 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=55 height=17 align=center style="border-bottom: 1px solid #000000 ;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=55 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=18 height=17 align=center style="border-bottom: 1px solid #000000;"></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #eeeeee;">Total revenues</td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">21,912</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$ </td><td width=65 height=17 align=right style="background-color: #eeeeee;">16,736</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">39,734</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=12 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">29,605</td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=17 align=left style="background-color: #ffffff;">Less: Sales to related parties</td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-b ottom: 1px solid #000000;">686</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">411</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1,228</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=12 height=17 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">731& lt;/td></tr><tr><td width=24 height=17 align=left></td><td width=320 height=36 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"> Sales and other operating revenues<br /> (including consumer excise taxes)</td><td width=12 height=36 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=36 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">21,226</td><td width=9 height=36 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=36 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=36 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">16,325</td><td width=9 height=36 align=left style="background-color: #eeee ee; border-bottom: 1px solid #000000;"></td><td width=12 height=36 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=36 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">38,506</td><td width=9 height=36 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=12 height=36 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;">$</td><td width=65 height=36 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">28,874</td></tr></table></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>4. Acquisition</h3><p> On October 18, 2007, Marathon completed the acquisition of all the outstanding shares of Western Oil Sands Inc. ("Western") for cash and securities of $5,833 million. Subsequent to the transaction, Western's name was changed to Marathon Oil Canada Corporation. The acquisition was accounted for under the purchase method of accounting and, as such, Marathon's results of operations include Western's results from October 18, 2007. Western's oil sands mining and bitumen upgrading operations are reported as a separate Oil Sands Mining segment, while its ownership interests in leases where in-situ recovery techniques are expected to be utilized are included in the E&P segment.</p><p> T he following unaudited pro forma data is as if the acquisition of Western had been consummated at the beginning of each period presented. The pro forma data is based on historical information and does not reflect the actual results that would have occurred nor is it indicative of future results of operations.</p><table style="border-collapse: collapse;"><tr><td width=24 height=18 align=left></td><td width=394 height=18 align=left></td><td width=145 height=13.5 align=center><b>Three Months Ended</b></td><td width=145 height=13.5 align=center><b>Six Months Ended</b></td></tr><tr><td width=24 height=18 align=left></td><td widtd=394 height=18 align=left style="border-bottom: 1px solid #000000;"><i>(In millions, except per share amounts)</i></td><td width=145 height=13.5 align=center style="border-bottom: 1px solid #000000;"><b>June 30, 2007</b></td>< td width=145 height=13.5 align=center style="border-bottom: 1px solid #000000;"><b>June 30, 2007</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #eeeeee;">Revenues and other income</td><td width=50 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;">$</td><td width=15 height=18 align=right style="background-color: #eeeeee;">17,175</td><td width=30 height=18 align=left style="background-color: #eeeeee;"></td><td width=50 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;">$</td><td width=15 height=18 align=right style="background-color: #eeeeee;">30,424</td><td width=32 height=18 align=l eft style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #ffffff;">Income from continuing operations</td><td width=50 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;"></td><td width=15 height=18 align=right style="background-color: #ffffff;">1,372</td><td width=30 height=18 align=left style="background-color: #ffffff;"></td><td width=50 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;"></td><td width=15 height=18 align=right style="background-color: #ffffff;">2,015</td><td width=32 height=18 align=left style="background-color: #ffffff;"></td></tr><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #eeeeee;">Net income</td><td width=50 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=15 height=18 align=right style="background-color: #eeeeee;">1,380</td><td width=30 height=18 align=left style="background-color: #eeeeee;"></td><td width=50 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;"></td><td width=15 height=18 align=right style="background-color: #eeeeee;">2,023</td><td width=32 height=18 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #ffffff;">Per share data:</td><td width=50 height=18 align=left style="background-col or: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;"></td><td width=15 height=18 align=right style="background-color: #ffffff;"></td><td width=30 height=18 align=left style="background-color: #ffffff;"></td><td width=50 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;"></td><td width=15 height=18 align=right style="background-color: #ffffff;"></td><td width=32 height=18 align=left style="background-color: #ffffff;"></td></tr><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #eeeeee;"> Income from continuing operations - basic</td><td width=50 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;"> $</td><td width=15 height=18 align=right style="background-color: #eeeeee;">1.91</td><td width=30 height=18 align=left style="background-color: #eeeeee;"></td><td width=50 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;">$</td><td width=15 height=18 align=right style="background-color: #eeeeee;">2.80</td><td width=32 height=18 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #ffffff;"> Income from continuing operations - diluted</td><td width=50 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;">$</td><td width=15 height=18 align=right style="background-color: #ffffff;">1.9 0</td><td width=30 height=18 align=left style="background-color: #ffffff;"></td><td width=50 height=18 align=left style="background-color: #ffffff;"></td><td width=12 height=18 align=left style="background-color: #ffffff;">$</td><td width=15 height=18 align=right style="background-color: #ffffff;">2.78</td><td width=32 height=18 align=left style="background-color: #ffffff;"></td></tr><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #eeeeee;"> Net income - basic</td><td width=50 height=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;">$</td><td width=15 height=18 align=right style="background-color: #eeeeee;">1.92</td><td width=30 height=18 align=left style="background-color: #eeeeee;"></td><td width=50 he ight=18 align=left style="background-color: #eeeeee;"></td><td width=12 height=18 align=left style="background-color: #eeeeee;">$</td><td width=15 height=18 align=right style="background-color: #eeeeee;">2.81</td><td width=32 height=18 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=24 height=18 align=left></td><td width=397 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"> Net income - diluted</td><td width=50 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=15 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">1.91</td><td width=30 height=18 align=left style="background-color: #ffffff; border-bott om: 1px solid #000000;"></td><td width=50 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td><td width=12 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;">$</td><td width=15 height=18 align=right style="background-color: #ffffff; border-bottom: 1px solid #000000;">2.79</td><td width=32 height=18 align=left style="background-color: #ffffff; border-bottom: 1px solid #000000;"></td></tr></table></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>3. Income per Common Share</h3><p> Basic income per share is based on the weighted average number of common shares outstanding, including securities exchangeable into common shares. Diluted income per share includes exercise of stock options and restricted shares, provided the effect is not antidilutive.</p><table style="border-collapse: collapse;"><tr><td width=445 height=17 align=left></td><td width=200 height=12.75 align=center><b>Three Months Ended</b></td></tr><tr><td width=445 height=17 align=left></td><td width=200 height=12.75 align=center><b>June 30,</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=25 height=1 7></td><td width=307 height=17></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=9 height=17 style="background-color: #ffffff;"></td><td width=14 height=17 style="background-color: #ffffff;"></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td></tr> ;<tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions, except per share data)</i></td><td colspan=2 width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Basic</b></td><td width=9 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td colspan=2 width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Diluted</b></td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Basic</b></td><td width=9 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td colspan=2 width=8 height=12.75 align=center style ="border-bottom: 1px solid #000000;"><b>Diluted</b></td></tr><tr><td width=25 height=5 align=left></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></t d><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;">Income from continuing operations</td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">774</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">774</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right s tyle="background-color: #ffffff;">1,542</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">1,542</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;">Discontinued operations</td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">8</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">8</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;">Net income</td><td width=14 height=17 align=left style="border-bottom: 2px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 2px solid #000000; background-color: #ffffff;">774</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="border-bottom: 2px solid #000000; background-color: # ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 2px solid #000000; background-color: #ffffff;">774</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="border-bottom: 2px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 2px solid #000000; background-color: #ffffff;">1,550</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="border-bottom: 2px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 2px solid #000000; background-color: #ffffff;">1,550</td></tr><tr><td width=25 height=5 align=left></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="backgr ound-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=le ft style="background-color: #ffffff;">Weighted average common shares outstanding</td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">710</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">710</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">683</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-colo r: #ffffff;">683</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;">Effect of dilutive securities</td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">4</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align =right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee; border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 1px solid #000000;">6</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;">Weighted average common shares, including</td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color : #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;"> dilutive effect</td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">710</td><td width=9 height=17 align=le ft style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">714</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">683</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">689</td></tr><tr><td width=25 height=5 align=left></td&g t;<td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="backgro und-color: #ffffff;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;">Per share:</td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="b ackground-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;"> Income from continuing operations</td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">1.09</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">1.08</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-colo r: #ffffff;">2.26</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">2.24</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;"> Discontinued operations</td><td width=14 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td& gt;<td width=14 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">0.01</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">0.01</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;"> Net income</td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">1.09</td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffff ff;"></td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">1.08</td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;"></td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">2.27</td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;"></td><td width=13 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">2.25</td></tr></table>< ;table style="border-collapse: collapse; margin-top: 15px"><tr><td width=445 height=17 align=left></td><td width=200 height=12.75 align=center><b>Six Months Ended</b></td></tr><tr><td width=445 height=17 align=left></td><td width=200 height=12.75 align=center><b>June 30,</b></td></tr></table><table style="border-collapse: collapse;"><tr><td width=25 height=17></td><td width=307 height=17></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2008</b></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=9 height=17></td>< ;td width=14 height=17></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>2007</b></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td><td width=8 height=17 style="border-bottom: 1px solid #000000;"></td></tr><tr><td widtd=25 height=17 align=left></td><td widtd=307 height=17 align=left style="border-bottom: 1px solid #000000;"><i>(In millions, except per share data)</i></td><td colspan=2 width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Basic</b></td><td width=9 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td colspan=2 width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Diluted</b></td><td width=9 height=17 align=left style="b order-bottom: 1px solid #000000;"></td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000;"></td><td width=65 height=17 align=center style="border-bottom: 1px solid #000000;"><b>Basic</b></td><td width=9 height=17 align=center style="border-bottom: 1px solid #000000;"></td><td colspan=2 width=8 height=12.75 align=center style="border-bottom: 1px solid #000000;"><b>Diluted</b></td></tr><tr><td width=25 height=5 align=left></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12. 75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;">Income from continuing operations</td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">1,505</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">1,505</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">2,259</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">2,259</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;">Discontinued operations</td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=1 7 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">8</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">8</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;">Net income</td><td width= 14 height=17 align=left style="background-color: #ffffff; border-bottom: 2px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 2px solid #000000;">1,505</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff; border-bottom: 2px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 2px solid #000000;">1,505</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff; border-bottom: 2px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 2px solid #000000;">2,267</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left sty le="background-color: #ffffff; border-bottom: 2px solid #000000;">$</td><td width=65 height=17 align=right style="background-color: #ffffff; border-bottom: 2px solid #000000;">2,267</td></tr><tr><td width=25 height=5 align=left></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left st yle="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td><td width=8 height=12.75 align=left style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;">Weighted average common shares outstanding</td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">711</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">711</td><td width=9 height=17 align=left style="background-color: #ffffff;"> </td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">686</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;">686</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;">Effect of dilutive securities</td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right styl e="background-color: #eeeeee;">5</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">0</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;">5</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;">Weighted average common shares, including</td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td>& lt;td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;"></td><td width=65 height=17 align=right style="background-color: #ffffff;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;"> dilutive effect</td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td widt h=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">711</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">716</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; border-bottom: 2px solid #000000;">686</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee; border-bottom: 2px solid #000000;"></td><td width=65 height=17 align=right style="ba ckground-color: #eeeeee; border-bottom: 2px solid #000000;">691</td></tr><tr><td width=25 height=5 align=left></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></t d><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td><td width=8 height=12.75 align=left style="background-color: #ffffff;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;">Per share:</td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee; "></td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee;"></td><td width=65 height=17 align=right style="background-color: #eeeeee;"></td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #ffffff;"> Income from continuing operations</td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">2.11</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">2.10</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td>& lt;td width=14 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">3.29</td><td width=9 height=17 align=left style="background-color: #ffffff;"></td><td width=13 height=17 align=left style="background-color: #ffffff;">$</td><td width=65 height=17 align=right style="background-color: #ffffff;">3.27</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="background-color: #eeeeee;"> Discontinued operations</td><td width=14 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=1 7 align=right style="background-color: #eeeeee;">-</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=14 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">0.01</td><td width=9 height=17 align=left style="background-color: #eeeeee;"></td><td width=13 height=17 align=left style="background-color: #eeeeee;">$</td><td width=65 height=17 align=right style="background-color: #eeeeee;">0.01</td></tr><tr><td width=25 height=17 align=left></td><td width=307 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;"> Net income</td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">2.11</td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;"></td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">2.10</td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;"></td><td width=14 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">3.30</td><td width=9 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;"></td><td width=13 height=17 align=left style="border-bottom: 1px solid #000000; background-color: #ffffff;">$</td><td width=65 height=17 align=right style="border-bottom: 1px solid #000000; background-color: #ffffff;">3.28</td></tr></table><P> The per share calculations above exclude 5.5 million stock options for the second quarter and the first six months of 2008 and 3.0 million stock options for the second quarter and the first six months of 2007, as they were antidilutive.<P></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>2. New Accounting Standards</h3><p> In April 2007, the Financial Accounting Standards Board ("FASB") issued FASB Staff Position on FASB Interpretation No. 39, "Offsetting of Amounts Related to Certain Contracts" ("FSP FIN No. 39-1"), which allows a party to a master netting agreement to offset the fair value amounts related to the right to reclaim collateral against the fair value amounts recognized for derivative instruments. Such treatment was consistent with Marathon's accounting policy; therefore, adoption of FSP FIN No. 39-1 effective January 1, 2008, did not have any effect on Marathon's consolidated financial position.</p><p> In February 2007, the FASB issued Statement o f Financial Accounting Standards ("SFAS") No. 159, "The Fair Value Option for Financial Assets and Financial Liabilities." This statement permits entities to choose to measure at fair value many financial instruments and certain other items that are not currently required to be measured at fair value. It requires that unrealized gains and losses on items for which the fair value option has been elected be recorded in net income. The statement also establishes presentation and disclosure requirements designed to facilitate comparisons between entities that choose different measurement attributes for similar types of assets and liabilities. Marathon did not elect the fair value option when this standard became effective on January 1, 2008.</p><p> In September 2006, the FASB issued SFAS No. 157, "Fair Value Measurements." This statement defines fair value, establishes a framework for measuring fair value in generally accepted accounting principles and expands disclosures about fair value measurements. SFAS No. 157 does not require any new fair value measurements but may require some entities to change their measurement practices. In February 2008, the FASB issued FSP FAS 157-1, "Application of FASB Statement No. 157 to FASB Statement No. 13 and Other Accounting Pronouncements That Address Fair Value Measurements for Purposes of Lease Classification or Measurement under Statement 13," which removes certain leasing transactions from the scope of SFAS No. 157, and FSP FAS 157-2, "Effective Date of FASB Statement No. 157," which defers the effective date of SFAS No. 157 for one year for certain nonfinancial assets and nonfinancial liabilities, except those that are recognized or disclosed at fair value in the financial statements on a recurring basis. Effective January 1, 2008, Marathon adopted SFAS No. 157, except for measurements of those nonfinancial assets and liabilities subject to the one-year deferral, which for Marathon include impairments of goodwill, intangible assets and other long-lived assets, and initial measurement of asset retirement obligations, asset exchanges, business combinations and partial sales of proved properties. Adoption did not have a significant effect on Marathon's consolidated results of operations or financial position. The additional disclosures regarding assets and liabilities recorded at fair value and measured under SFAS No. 157 are presented in Note 11.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>1. Basis of Presentation</h3><p> These consolidated financial statements are unaudited but, in the opinion of management, reflect all adjustments necessary for a fair statement of the results for the periods reported. All such adjustments are of a normal recurring nature unless disclosed otherwise. These consolidated financial statements, including notes, have been prepared in accordance with the applicable rules of the Securities and Exchange Commission and do not include all of the information and disclosures required by accounting principles generally accepted in the United States of America for complete financial statements. Certain reclassifications of prior year data have been made to conform to 20 08 classifications. These interim financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Marathon Oil Corporation ("Marathon" or the "Company") 2007 Annual Report on Form 10-K.</p></body></html>

<html><head><meta http-equiv="Content-Type" content="text/html; charset=utf-8" /></head><body><h3>17. Subsequent Events</h3><p> On July 31, 2008, Marathon announced that the board of directors is evaluating the separation of Marathon into two independent, publicly-traded companies. One entity would consist of the Exploration and Production, Integrated Gas and Oil Sands Mining businesses; and the other entity would consist of the Refining, Marketing and Transportation business.</p><p> On July 9, 2008, Marathon entered into an agreement to sell its outside-operated and undeveloped offshore acreage in Norway, including $41 million in associated deferred income tax assets. The proceeds before closing adjustments are $416 million. The transaction is expected to close by the end of 2008. Beginning the third qu arter of 2008, the operating assets, the net carrying value of which is not significant, will be classified as held for sale until the transaction closes.</p></body></html>

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