Note 4

Information Relating to the Consolidated Statement of Cash Flows


	Year ended December 31
	2011			2010			2009

Net decrease (increase) in operating working capital was composed of the following:
Increase in accounts and notes receivable	$	(2,156	)	$	(2,767	)	$	(1,476	)
(Increase) decrease in inventories		(404	)		15			1,213
Increase in prepaid expenses and other current assets		(853	)		(542	)		(264	)
Increase (decrease) in accounts payable and accrued liabilities		3,839			3,049			(1,121	)
Increase (decrease) in income and other taxes payable		1,892			321			(653	)

Net decrease (increase) in operating working capital	$	2,318		$	76		$	(2,301	)

Net cash provided by operating activities includes the following cash payments for interest and income taxes:
Interest paid on debt (net of capitalized interest)	$	–		$	34		$	–
Income taxes	$	17,374		$	11,749		$	7,537

Net sales of marketable securities consisted of the following gross amounts:
Marketable securities purchased	$	(112	)	$	(90	)	$	(30	)
Marketable securities sold		38			41			157

Net (purchases) sales of marketable securities	$	(74	)	$	(49	)	$	127

Net purchases of time deposits consisted of the following gross amounts:
Time deposits purchased	$	(6,439	)	$	(5,060	)	$	–
Time deposits matured		5,335			2,205			–

Net purchases of time deposits	$	(1,104	)	$	(2,855	)	$	–

In accordance with accounting standards for cash-flow classifications for stock options (ASC 718), the “Net decrease (increase) in operating working capital” includes reductions of $121, $67 and $25 for excess income tax benefits associated with stock options exercised during 2011, 2010 and 2009, respectively. These amounts are offset by an equal amount in “Net (purchases) sales of treasury shares.”

The “Acquisition of Atlas Energy” reflects the $3,009 of cash paid for all the common shares of Atlas. An “Advance to Atlas Energy” of $403 was made to facilitate the purchase of a 49 percent interest in Laurel Mountain Midstream LLC on the day of closing. The “Net decrease (increase) in operating working capital” includes $184 for payments made in connection with Atlas equity awards subsequent to the acquisition. Refer to Note 2, beginning on page FS-30 for additional discussion of the Atlas acquisition.

The “Repayments of long-term debt and other financing obligations” includes $761 for repayment of Atlas debt and $271 for payoff of the Atlas revolving credit facility.

The “Net (purchases) sales of treasury shares” represents the cost of common shares acquired less the cost of shares issued for share-based compensation plans. Purchases totaled $4,262, $775 and $6 in 2011, 2010 and 2009, respectively. In 2011 and 2010, the company purchased 42.3 million and 8.8 million common shares for $4,250 and $750 under its ongoing share repurchase program, respectively.

In 2011 and 2010, “Net sales (purchases) of other short-term investments” consist of restricted cash associated with capital-investment projects at the company’s Pascagoula and El Segundo refineries, acquisitions pending tax deferred exchanges, and Upstream abandonment activities that was invested in short-term securities and reclassified from “Cash and cash equivalents” to “Deferred charges and other assets” on the Consolidated Balance Sheet. The company issued $374, $1,250 and $350 in 2011, 2010 and 2009, respectively, of tax exempt bonds as a source of funds for U.S. refinery projects, which is included in “Proceeds from issuance of long-term debt.”

The Consolidated Statement of Cash Flows excludes changes to the Consolidated Balance Sheet that did not affect cash. In 2009, payments related to “Accrued liabilities” were excluded from “Net decrease (increase) in operating working capital” and were reported as “Capital expenditures.” The “Accrued liabilities” were related to upstream operating agreements outside the United States recorded in 2008. Refer also to Note 25, on page FS-58, for a discussion of revisions to the company’s AROs that also did not involve cash receipts or payments for the three years ending December 31, 2011.

The major components of “Capital expenditures” and the reconciliation of this amount to the reported capital and exploratory expenditures, including equity affiliates, are presented in the following table:


	Year ended December 31
	2011			2010			2009

Additions to properties, plant and equipment¹	$	25,440		$	18,474		$	16,107
Additions to investments		900			861			942
Current year dry hole expenditures		332			414			468
Payments for other liabilities and assets, net²		(172	)		(137	)		2,326

Capital expenditures		26,500			19,612			19,843
Expensed exploration expenditures		839			651			790
Assets acquired through capital lease obligations and other financing obligations		32			104			19

Capital and exploratory expenditures, excluding equity affiliates		27,371			20,367			20,652
Company’s share of expenditures by equity affiliates		1,695			1,388			1,585

Capital and exploratory expenditures, including equity affiliates	$	29,066		$	21,755		$	22,237


¹ Excludes noncash additions of $945 in 2011, $2,753 in 2010 and $985 in 2009.

² 2009 includes payments of $2,450 for accruals recorded in 2008.