3. Related Party Transactions

Our related parties included:

•

Marathon Oil Companies until June 30, 2011, the effective date of the Spinoff.

•

The Andersons Clymers Ethanol LLC (“TACE”), in which we have a 36 percent interest, and The Andersons Marathon Ethanol LLC (“TAME”), in which we have a 50 percent interest. These companies each own an ethanol production facility.

•

Centennial Pipeline LLC (“Centennial”), in which we have a 50 percent interest. Centennial owns a refined products pipeline and storage facility.

•

LOOP LLC (“LOOP”), in which we have a 51 percent noncontrolling interest. LOOP operates an offshore oil port.

•

Other equity method investees.

We believe that transactions with related parties, other than certain administrative transactions with the Marathon Oil Companies to effect the Spinoff and related to the provision of services, were conducted on terms comparable to those with unaffiliated parties.

On May 25, 2011, we entered into a separation and distribution agreement and several other agreements with the Marathon Oil Companies to effect the Spinoff and to provide a framework for our relationship with the Marathon Oil Companies. These agreements govern the relationship between us and Marathon Oil subsequent to the completion of the Spinoff and provide for the allocation between us and the Marathon Oil Companies of assets, liabilities and obligations attributable to periods prior to the Spinoff. Because the terms of these agreements were entered into in the context of a related party transaction, the terms may not be comparable to terms that would be obtained in a transaction between unaffiliated parties.

We entered into a transition services agreement with Marathon Oil under which we were providing each other with a variety of administrative services on an as-needed basis for a period of time not to exceed one year following the Spinoff. The charges under the transition services agreement were at cost-based rates that had been negotiated between us and Marathon Oil. Services provided to us by the Marathon Oil Companies during the first half of 2012 included accounting, audit, treasury, information technology and health, environmental, safety and security. Services provided by us to the Marathon Oil Companies during the first half of 2012 included administrative services, legal, human resources, accounting, audit, information technology and health, environmental, safety and security. The transition services agreement terminated on June 30, 2012.

Sales to related parties were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2012		2011		2012		2011
Equity method investees:
Centennial	$	—	$	—	$	1	$	34
Other equity method investees		2		2		5		6
Marathon Oil Companies		—		—		—		13

Total	$	2	$	2	$	6	$	53

Related party sales to Centennial consist primarily of petroleum products. Related party sales to the Marathon Oil Companies consisted of crude oil, which were based on contractual prices that were market-based, and pipeline operating revenue.

Purchases from related parties were as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2012		2011		2012		2011
Equity method investees:
Centennial	$	—	$	—	$	9	$	31
LOOP		11		24		32		56
TAME		29		41		89		112
TACE		35		8		50		35
Other equity method investees		9		7		24		22
Marathon Oil Companies		—		—		—		1,590

Total	$	84	$	80	$	204	$	1,846

Related party purchases from Centennial consist primarily of refinery feedstocks and refined product transportation costs. Related party purchases from LOOP and other equity method investees consist primarily of crude oil transportation costs. Related party purchases from TAME and TACE consist of ethanol. Related party purchases from the Marathon Oil Companies consisted primarily of crude oil and natural gas, which were recorded at contracted prices that were market-based.

The Marathon Oil Companies performed certain services for us prior to the Spinoff such as executive oversight, accounting, treasury, tax, legal, procurement and information technology services. We also provided certain services to the Marathon Oil Companies prior to the Spinoff, such as legal, human resources and tax services. The two groups of companies charged each other for these shared services at a negotiated rate. Where costs incurred by the Marathon Oil Companies on our behalf could not practically be determined by specific utilization, these costs were primarily allocated to us based on headcount or computer utilization. Our management believes those allocations were a reasonable reflection of the utilization of services provided. However, those allocations may not have fully reflected the expenses that would have been incurred had we been a stand-alone company during the periods presented. Net charges from the Marathon Oil Companies for these services reflected within selling, general and administrative expenses in the consolidated statements of income were $26 million for the nine months ended September 30, 2011.

Current receivables from related parties, which are included in receivables, less allowance for doubtful accounts on the consolidated balance sheets, were as follows:


(In millions)	September 30, 2012		December 31, 2011
Equity method investees	$	3	$	2

Payables to related parties, which are included in accounts payable on the consolidated balance sheets, were as follows:


(In millions)	September 30, 2012		December 31, 2011
Equity method investees:
Centennial	$	—	$	7
LOOP		4		5
TAME		4		4
TACE		3		2
Other equity method investees		3		2

Total	$	14	$	20

We have a throughput and deficiency agreement with LOOP, which had a prepaid tariff balance of $4 million at December 31, 2011. The prepaid tariff was utilized during the nine months ended September 30, 2012. We also had a throughput and deficiency agreement with Centennial, which expired on March 31, 2012. The prepaid tariff balance was $14 million at September 30, 2012 and $11 million at December 31, 2011. During the first quarter of 2012, we impaired our prepaid tariff with Centennial. For additional information on the impairment, see Note 14. Prepaid tariff balances are reflected in other noncurrent assets on the consolidated balance sheets.

During the nine months ended September 30, 2011, we borrowed $7,748 million and repaid $10,319 million under the credit agreement with MOC Portfolio Delaware, Inc. (“PFD”), a subsidiary of Marathon Oil. The credit agreement was terminated on June 30, 2011, and there has been no subsequent activity.

There were no borrowings during the nine months ended September 30, 2011 under our revenue bonds proceeds subsidiary loan agreement with Marathon Oil. The loan balance outstanding as of December 31, 2010 of $1,047 million was repaid on February 1, 2011 and the loan was terminated effective April 1, 2011.

Our investments in shares of PFD Redeemable Class A, Series 1 Preferred Stock (“PFD Preferred Stock”) were accounted for as investments in related party available-for-sale debt securities and were redeemed prior to the Spinoff.

Related party net interest and other financial income was as follows:


	Three Months Ended September 30,				Nine Months Ended September 30,
(In millions)	2012		2011		2012		2011
Dividend income:
PFD Preferred Stock	$	—	$	—	$	—	$	35
Interest income		1		—		1		—
Interest expense:
PFD credit agreement		—		—		—		3
Marathon Oil loan agreement		—		—		—		5
Interest capitalized		—		—		—		(8	)

Net interest expense		—		—		—		—

Related party net interest and other financial income	$	1	$	—	$	1	$	35

We also recorded property, plant and equipment additions related to capitalized interest incurred by Marathon Oil on our behalf of $2 million during the nine months ended September 30, 2011, which were reflected as contributions from Marathon Oil.

Certain asset or liability transfers between us and Marathon Oil, including assets and liabilities contributed under the separation and distribution agreement related to the Spinoff, and certain expenses, such as stock-based compensation, incurred by Marathon Oil on our behalf have been recorded as non-cash capital contributions or distributions. The net non-cash capital contributions from Marathon Oil were $81 million in the nine months ended September 30, 2011.