us-gaap:ScheduleOfGuaranteeObligationsTextBlock

AK Steel Holding Corporation

NOTE 17 – Supplemental Guarantor Information

AK Holding, along with AK Tube, LLC and AK Steel Investments Inc. (the “Guarantor Subsidiaries”), fully and unconditionally, jointly and severally, guarantee the payment of interest, principal and premium, if any, on AK Steel’s 7 3/4% senior notes due in 2012. AK Tube, LLC is owned 100% by AKS Investments Inc. and AKS Investments Inc. is 100% owned by AK Steel. AK Steel is 100% owned by AK Holding. The Company has determined that full financial statements and other disclosures concerning AK Holding and the Guarantor Subsidiaries are not required to be presented. The presentation of the supplemental guarantor information reflects all investments in subsidiaries under the equity method. Net income (loss) of the subsidiaries accounted for under the equity method is therefore reflected in their respective parents’ investment accounts. The principal elimination entries eliminate investments in subsidiaries and inter-company balances and transactions. The following supplemental condensed consolidating financial statements present information about AK Holding, AK Steel, the Guarantor Subsidiaries and the other subsidiaries. The other subsidiaries are not guarantors of the senior notes.

Condensed Statements of Operations
For the Three Months Ended September 30, 2009

	AK Holding			AK Steel			Guarantor Subsidiaries		Other			Eliminations			Consolidated Company
Net sales	$	—		$	921.4		$	35.1	$	110.0		$	(25.4	)	$	1,041.1
Cost of products sold		0.1			816.0			30.5		100.5			(17.9	)		929.2
Selling and administrative expenses		0.7			46.5			2.1		3.9			(7.6	)		45.6
Depreciation		—			49.2			1.7		0.1			—			51.0
Total operating costs		0.8			911.7			34.3		104.5			(25.5	)		1,025.8
Operating profit (loss)		(0.8	)		9.7			0.8		5.5			0.1			15.3
Interest expense		—			9.0			—		—			—			9.0
Other income (expense)		—			(1.2	)		—		9.1			(5.0	)		2.9
Income (loss) before income taxes		(0.8	)		(0.5	)		0.8		14.6			(4.9	)		9.2
Income tax provision (benefit)		(0.3	)		(0.9	)		0.3		5.3			(0.9	)		3.5
Income (loss) from continuing operations		(0.5	)		0.4			0.5		9.3			(4.0	)		5.7
Less: income (loss) attributable to noncontrolling interests		—			—			—		(0.5	)		—			(0.5	)
Income (loss) attributable to AK Holding		(0.5	)		0.4			0.5		9.8			(4.0	)		6.2
Equity in net income of subsidiaries		6.7			6.3			—		—			(13.0	)		—
Net income (loss) attributable to AK Holding	$	6.2		$	6.7		$	0.5	$	9.8		$	(17.0	)	$	6.2

Condensed Statements of Operations
For the Three Months Ended September 30, 2008

	AK Holding			AK Steel			Guarantor Subsidiaries		Other		Eliminations			Consolidated Company
Net sales	$	—		$	1,980.8		$	57.3	$	166.5	$	(47.0	)	$	2,157.6
Cost of products sold		—			1,574.0			48.0		138.9		(20.0	)		1,740.9
Selling and administrative expenses		0.9			64.3			3.0		4.7		(16.3	)		56.6
Depreciation		—			48.8			1.6		0.1		—			50.5
Total operating costs		0.9			1,687.1			52.6		143.7		(36.3	)		1,848.0
Operating profit (loss)		(0.9	)		293.7			4.7		22.8		(10.7	)		309.6
Interest expense		—			11.6			—		—		—			11.6
Other income (expense)		—			(2.3	)		2.0		5.2		(4.0	)		0.9
Income (loss) before income taxes		(0.9	)		279.8			6.7		28.0		(14.7	)		298.9
Income tax provision (benefit)		(0.3	)		77.5			2.4		9.5		21.3			110.4
Income (loss) from continuing operations		(0.6	)		202.3			4.3		18.5		(36.0	)		188.5
Less: income (loss) attributable to noncontrolling interests		—			—			—		0.2		—			0.2
Income (loss) attributable to AK Holding		(0.6	)		202.3			4.3		18.3		(36.0	)		188.3
Equity in net income of subsidiaries		188.9			(13.4	)		—		—		(175.5	)		—
Net income (loss) attributable to AK Holding	$	188.3		$	188.9		$	4.3	$	18.3	$	(211.5	)	$	188.3

Condensed Statements of Operations
For the Nine Months Ended September 30, 2009

	AK Holding			AK Steel			Guarantor Subsidiaries			Other			Eliminations			Consolidated Company
Net sales	$	—		$	2,403.6		$	92.3		$	329.8		$	(68.8	)	$	2,756.9
Cost of products sold		0.1			2,273.0			83.1			307.7			(45.1	)		2,618.8
Selling and administrative expenses		2.7			140.0			6.8			12.6			(20.8	)		141.3
Depreciation		—			148.5			5.0			0.4			—			153.9
Total operating costs		2.8			2,561.5			94.9			320.7			(65.9	)		2,914.0
Operating profit (loss)		(2.8	)		(157.9	)		(2.6	)		9.1			(2.9	)		(157.1	)
Interest expense		—			28.3			—			0.1			—			28.4
Other income (expense)		—			(1.2	)		—			40.2			(30.4	)		8.6
Income (loss) before income taxes		(2.8	)		(187.4	)		(2.6	)		49.2			(33.3	)		(176.9	)
Income tax provision (benefit)		(1.0	)		(72.0	)		(0.9	)		18.2			(5.3	)		(61.0	)
Income (loss) from continuing operations		(1.8	)		(115.4	)		(1.7	)		31.0			(28.0	)		(115.9	)
Less: income (loss) attributable to noncontrolling interests		—			—			—			(1.5	)		—			(1.5	)
Income (loss) attributable to AK Holding		(1.8	)		(115.4	)		(1.7	)		32.5			(28.0	)		(114.4	)
Equity in net income of subsidiaries		(112.6	)		2.8			—			—			109.8			—
Net income (loss) attributable to AK Holding	$	(114.4	)	$	(112.6	)	$	(1.7	)		32.5		$	81.8		$	(114.4	)

Condensed Statements of Operations
For the Nine Months Ended September 30, 2008

	AK Holding			AK Steel			Guarantor Subsidiaries		Other		Eliminations			Consolidated Company
Net sales	$	—		$	5,698.9		$	176.7	$	470.7	$	(160.7	)	$	6,185.6
Cost of products sold		0.1			4,707.1			152.2		391.3		(104.3	)		5,146.4
Selling and administrative expenses		2.6			188.6			9.3		13.9		(46.3	)		168.1
Depreciation		—			148.5			5.0		0.4		—			153.9
Total operating costs		2.7			5,044.2			166.5		405.6		(150.6	)		5,468.4
Operating profit (loss)		(2.7	)		654.7			10.2		65.1		(10.1	)		717.2
Interest expense		—			34.8			—		0.1		—			34.9
Other income (expense)		—			(8.2	)		13.7		31.9		(27.3	)		10.1
Income (loss) before income taxes		(2.7	)		611.7			23.9		96.9		(37.4	)		692.4
Income tax provision (benefit)		(0.9	)		226.4			8.4		32.5		(9.0	)		257.4
Income (loss) from continuing operations		(1.8	)		385.3			15.5		64.4		(28.4	)		435.0
Less: income (loss) attributable to noncontrolling interests		—			—			—		0.4		—			0.4
Income (loss) attributable to AK Holding		(1.8	)		385.3			15.5		64.0		(28.4	)		434.6
Equity in net income of subsidiaries		436.4			51.1			—		—		(487.5	)		—
Net income (loss) attributable to AK Holding	$	434.6		$	436.4		$	15.5	$	64.0	$	(515.9	)	$	434.6

Condensed Balance Sheets
As of September 30, 2009

	AK Holding			AK Steel			Guarantor Subsidiaries			Other			Eliminations			Consolidated Company
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	326.1		$	—		$	13.4		$	—		$	339.5
Accounts receivable, net		—			331.0			18.7			54.1			(0.1	)		403.7
Inventories, net		—			546.9			14.5			68.2			(16.3	)		613.3
Deferred tax asset		—			355.2			—			—			—			355.2
Other current assets		0.3			50.8			0.4			0.5			—			52.0
Total Current Assets		0.3			1,610.0			33.6			136.2			(16.4	)		1,763.7
Property, Plant and Equipment		—			5,193.9			89.7			83.4			—			5,367.0
Less accumulated depreciation		—			(3,304.5	)		(46.0	)		(9.7	)		—			(3,360.2	)
Property, Plant and Equipment, Net		—			1,889.4			43.7			73.7			—			2,006.8
Other Assets:
Investment in AFSG Holdings, Inc.		—			—			55.6			—			—			55.6
Investment in affiliates		(1,237.6	)		1,237.6			40.1			987.1			(1,027.2	)		—
Inter-company accounts		2,055.9			(3,006.6	)		(24.7	)		(296.4	)		1,271.8			—
Other investments		—			30.6			—			18.3			—			48.9
Goodwill		—			(0.1	)		32.9			4.3			—			37.1
Other intangible assets		—			—			0.2			—			—			0.2
Deferred tax asset		—			485.8			—			—			—			485.8
Other non-current assets		—			9.2			—			0.2			—			9.4
TOTAL ASSETS	$	818.6		$	2,255.9		$	181.4		$	923.4		$	228.2		$	4,407.5

LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	527.4		$	4.4		$	9.7		$	(0.1	)	$	541.4
Accrued liabilities		—			193.8			2.3			3.3			—			199.4
Current portion of long-term debt		—			0.7			—			—			—			0.7
Current portion of pension and other postretirement benefit obligations		—			148.8			—			—			—			148.8
Total Current Liabilities		—			870.7			6.7			13.0			(0.1	)		890.3
Non-current Liabilities:
Long-term debt		—			605.9			—			—			—			605.9
Pension and other postretirement benefit obligations		—			1,870.7			0.5			—			—			1,871.2
Other non-current liabilities		—			146.2			—			72.9			1.2			220.3
Total Non-current Liabilities		—			2,622.8			0.5			72.9			1.2			2,697.4
TOTAL LIABILITIES		—			3,493.5			7.2			85.9			1.1			3,587.7
TOTAL AK HOLDING STOCKHOLDERS’ EQUITY (DEFICIT)		818.6			(1,237.6	)		174.2			836.3			227.1			818.6
Noncontrolling interest		—			—			—			1.2			—			1.2
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		818.6			(1,237.6	)		174.2			837.5			227.1			819.8
TOTAL LIABILITIES AND EQUITY	$	818.6		$	2,255.9		$	181.4		$	923.4		$	228.2		$	4,407.5

Condensed Balance Sheets
As of December 31, 2008

	AK Holding			AK Steel			Guarantor Subsidiaries			Other			Eliminations			Consolidated Company
ASSETS
Current Assets:
Cash and cash equivalents	$	—		$	548.6		$	—		$	14.1		$	—		$	562.7
Accounts receivable, net		—			394.7			19.5			57.2			(1.5	)		469.9
Inventories, net		—			481.1			18.6			71.8			(4.7	)		566.8
Deferred tax asset		—			333.0			—			—			—			333.0
Other current assets		0.1			69.4			0.3			0.6			—			70.4
Total Current Assets		0.1			1,826.8			38.4			143.7			(6.2	)		2,002.8
Property, Plant and Equipment		—			5,179.8			89.5			12.8			—			5,282.1
Less accumulated depreciation		—			(3,170.6	)		(41.0	)		(9.2	)		—			(3,220.8	)
Property, Plant and Equipment, Net		—			2,009.2			48.5			3.6			—			2,061.3
Other Assets:
Investment in AFSG Holdings, Inc.		—			—			55.6			—			—			55.6
Investments in affiliates		(1,074.2	)		1,074.2			40.1			960.9			(1,001.0	)		—
Inter-company accounts		2,042.1			(2,800.2	)		(33.5	)		(281.9	)		1,073.5			—
Other investments		—			27.3			—			23.1			—			50.4
Goodwill		—			—			32.8			4.3			—			37.1
Other intangible assets		—			—			0.3			—			—			0.3
Deferred tax asset		—			459.1			—			—			—			459.1
Other non-current assets		—			15.2			—			0.2			—			15.4
TOTAL ASSETS	$	968.0		$	2,611.6		$	182.2		$	853.9		$	66.3		$	4,682.0
LIABILITIES AND STOCKHOLDERS’ EQUITY (DEFICIT)
Current Liabilities:
Accounts payable	$	—		$	337.7		$	2.1		$	9.8		$	(1.5	)	$	348.1
Accrued liabilities		—			221.3			2.8			8.9			—			233.0
Current portion of long-term debt		—			0.7			—			—			—			0.7
Current portion of pension and other postretirement benefit obligations		—			152.4			—			—			—			152.4
Total Current Liabilities		—			712.1			4.9			18.7			(1.5	)		734.2
Non-current Liabilities:
Long-term debt		—			632.6			—			—			—			632.6
Pension and other postretirement benefit obligations		—			2,143.7			0.5			—			—			2,144.2
Other non-current liabilities		—			197.4			—			0.3			2.6			200.3
Total Non-current Liabilities		—			2,973.7			0.5			0.3			2.6			2,977.1
TOTAL LIABILITIES		—			3,685.8			5.4			19.0			1.1			3,711.3
TOTAL AK HOLDING STOCKHOLDERS’ EQUITY (DEFICIT)		968.0			(1,074.2	)		176.8			832.2			65.2			968.0
Noncontrolling interest		—			—			—			2.7			—			2.7
TOTAL STOCKHOLDERS’ EQUITY (DEFICIT)		968.0			(1,074.2	)		176.8			834.9			65.2			970.7
TOTAL LIABILITIES AND EQUITY	$	968.0		$	2,611.6		$	182.2		$	853.9		$	66.3		$	4,682.0

Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 2009

	AK Holding			AK Steel			Guarantor Subsidiaries			Other			Eliminations			Consolidated Company
Net cash flows from operating activities	$	(1.5	)	$	(111.9	)	$	10.0		$	33.8		$	(17.8	)	$	(87.4	)
Cash flows from investing activities:
Capital investments		—			(90.6	)		(0.3	)		(22.8	)		—			(113.7	)
Proceeds from sale of property, plant and equipment		—			0.5			—						—			0.5
Other investing items, net		—			0.1			—			1.7			—			1.8
Net cash flows from investing activities		—			(90.0	)		(0.3	)		(21.1	)		—			(111.4	)
Cash flows from financing activities:
Principal payments on long-term debt		—			(23.3	)		—			—			—			(23.3	)
Purchase of treasury stock		(11.4	)		—			—			—			—			(11.4	)
Common stock dividends paid		(16.5	)		—			—			—			—			(16.5	)
Inter-company activity		29.3			2.6			(9.7	)		(40.0	)		17.8			—
Advances from minority interest owner		—			—			—			25.3			—			25.3
Other financing items, net		0.1			0.1			—			1.3			—			1.5
Net cash flows from financing activities		1.5			(20.6	)		(9.7	)		(13.4	)		17.8			(24.4	)
Net increase (decrease) in cash and cash equivalents		—			(222.5	)		—			(0.7	)		—			(223.2	)
Cash and equivalents, beginning of period		—			548.6			—			14.1			—			562.7
Cash and equivalents, end of period	$	—		$	326.1		$	—		$	13.4		$	—		$	339.5

Condensed Statements of Cash Flows
For the Nine Months Ended September 30, 2008

	AK Holding			AK Steel			Guarantor Subsidiaries			Other			Eliminations			Consolidated Company

Net cash flows from operating activities	$	(1.3	)	$	(186.7	)	$	17.8		$	53.8		$	(22.7	)	$	(139.1	)
Cash flows from investing activities:
Capital investments		—			(118.8	)		(1.7	)		(0.3	)		—			(120.8	)
Investments, net					(8.2	)		—			—			—			(8.2	)
Proceeds from sale of property, plant and equipment					8.0			—			—			—			8.0
Other investing items, net		—			0.6			(0.1	)		(0.2	)		—			0.3
Net cash flows from investing activities		—			(118.4	)		(1.8	)		(0.5	)		—			(120.7	)
Cash flows from financing activities:
Principal payments on long-term debt		—			(0.5	)		—			—			—			(0.5	)
Proceeds from exercise of stock options		3.3			—			—			—			—			3.3
Purchase of treasury stock		(9.6	)		—			—			—			—			(9.6	)
Common stock dividends paid		(16.8	)		10.4			(13.7	)		(14.1	)		17.4			(16.8	)
Inter-company activity		24.5			7.2			(2.2	)		(34.8	)		5.3			—
Tax benefits from stock-based transactions		—			12.4			—			—			—			12.4
Other financing items, net		(0.1	)		0.4			(0.1	)		(1.4	)		—			(1.2	)
Net cash flows from financing activities		1.3			29.9			(16.0	)		(50.3	)		22.7			(12.4	)
Net increase (decrease) in cash and cash equivalents		—			(275.2	)		—			3.0			—			(272.2	)
Cash and equivalents, beginning of period		—			699.0			—			14.6			—			713.6
Cash and equivalents, end of period	$	—		$	423.8		$	—		$	17.6		$	—		$	441.4

ALLERGAN INC

Note 12: Guarantees

The Company’s Restated Certificate of Incorporation, as amended, provides that the Company will indemnify, to the fullest extent permitted by the Delaware General Corporation Law, each person that is involved in or is, or is threatened to be, made a party to any action, suit or proceeding by reason of the fact that he or she, or a person of whom he or she is the legal representative, is or was a director or officer of the Company or was serving at the request of the Company as a director, officer, employee or agent of another corporation or of a partnership, joint venture, trust or other enterprise. The Company has also entered into contractual indemnity agreements with each of its directors and executive officers pursuant to which, among other things, the Company has agreed to indemnify such directors and executive officers against any payments they are required to make as a result of a claim brought against such executive officer or director in such capacity, excluding claims (i) relating to the action or inaction of a director or executive officer that resulted in such director or executive officer gaining illegal personal profit or advantage, (ii) for an accounting of profits made from the purchase or sale of securities of the Company within the meaning of Section 16(b) of the Securities Exchange Act of 1934, as amended, or similar provisions of any state law or (iii) that are based upon or arise out of such director’s or executive officer’s knowingly fraudulent, deliberately dishonest or willful misconduct. The maximum potential amount of future payments that the Company could be required to make under these indemnification provisions is unlimited. However, the Company has purchased directors’ and officers’ liability insurance policies intended to reduce the Company’s monetary exposure and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions. As a result, the Company believes the estimated fair value of these indemnification arrangements is minimal.

The Company customarily agrees in the ordinary course of its business to indemnification provisions in agreements with clinical trials investigators in its drug, biologics and medical device development programs, in sponsored research agreements with academic and not-for-profit institutions, in various comparable agreements involving parties performing services for the Company in the ordinary course of business, and in its real estate leases. The Company also customarily agrees to certain indemnification provisions in its discovery and development collaboration agreements. With respect to the Company’s clinical trials and sponsored research agreements, these indemnification provisions typically apply to any claim asserted against the investigator or the investigator’s institution relating to personal injury or property damage, violations of law or certain breaches of the Company’s contractual obligations arising out of the research or clinical testing of the Company’s products, compounds or drug candidates. With respect to real estate lease agreements, the indemnification provisions typically apply to claims asserted against the landlord relating to personal injury or property damage caused by the Company, to violations of law by the Company or to certain breaches of the Company’s contractual obligations. The indemnification provisions appearing in the Company’s collaboration agreements are similar, but in addition provide some limited indemnification for the collaborator in the event of third party claims alleging infringement of intellectual property rights. In each of the above cases, the terms of these indemnification provisions generally survive the termination of the agreement. The maximum potential amount of future payments that the Company could be required to make under these provisions is generally unlimited. The Company has purchased insurance policies covering personal injury, property damage and general liability intended to reduce the Company’s exposure for indemnification and to enable the Company to recover a portion of any future amounts paid. The Company has not previously paid any material amounts to defend lawsuits or settle claims as a result of these indemnification provisions. As a result, the Company believes the estimated fair value of these indemnification arrangements is minimal.

AMERICAN EXPRESS CO

16. Guarantees

The Company provides cardmember protection plans that cover losses associated with purchased products, as well as certain other guarantees in the ordinary course of business which are within the scope of GAAP governing the accounting for guarantees.

In relation to its maximum amount of undiscounted payments as seen below, to date the Company has not experienced any significant losses related to guarantees. The Company’s initial recognition of guarantees is at fair market value, which has been determined in accordance with GAAP governing fair value measurement.

The following table provides information related to such guarantees at September 30, 2009 and December 31, 2008:


	Maximum amount of undiscounted future payments(a) *(Billions)*				Amount of related liability(b) *(Millions)*
Type of Guarantee	September 30, 2009		December 31, 2008		September 30, 2009		December 31, 2008
Card and travel operations (c)	$	65	$	69	$	100	$	99
Other (d)		1		1		81		93

Total	$	66	$	70	$	181	$	192

(a)

Represents the notional amounts that could be lost under the guarantees and indemnifications if there were a total default by the guaranteed parties. The Merchant Protection guarantee is calculated using management’s best estimate of maximum exposure based on all eligible claims as measured against annual billed business volumes.

(b)

Included as part of other liabilities on the Company’s Consolidated Balance Sheets.

(c)

Includes Credit Card Registry, Return Protection, Account Protection and Merchant Protection, which the Company offers directly to cardmembers. The Company generally has no collateral or other recourse provisions related to these guarantees.

(d)

Other primarily includes guarantees related to the Company’s business dispositions, real estate and various tax items.

APACHE CORP

11. SUPPLEMENTAL GUARANTOR INFORMATION

Apache Finance Canada Corporation (Apache Finance Canada) is a subsidiary of Apache and has approximately $650 million of publicly traded notes outstanding that are fully and unconditionally guaranteed by Apache. The following condensed consolidating financial statements are provided as an alternative to filing separate financial statements.

Apache Finance Pty Ltd. (Apache Finance Australia), a subsidiary of Apache, had $100 million of publicly traded securities, which matured on March 15, 2009. The notes were repaid using existing cash balances.

Each of these companies has been fully consolidated in Apache’s consolidated financial statements. As such, these condensed consolidating financial statements should be read in conjunction with the financial statements of Apache Corporation and subsidiaries and notes thereto, of which this note is an integral part.

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Quarter Ended September 30, 2009


					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache			Reclassifications
	Corporation		Canada		Corporation			& Eliminations			Consolidated
	(In thousands)
REVENUES AND OTHER:
Oil and gas production revenues	$	728,072	$	—	$	1,597,633		$	—		$	2,325,705
Equity in net income (loss) of affiliates		315,186		8,480		(8,100	)		(315,566	)		—
Other		1,240		14,824		(8,302	)		(1,036	)		6,726

		1,044,498		23,304		1,581,231			(316,602	)		2,332,431


OPERATING EXPENSES:
Depreciation, depletion and amortization		228,120		—		397,778			—			625,898
Asset retirement obligation accretion		15,607		—		10,446			—			26,053
Lease operating expenses		193,952		—		251,583			—			445,535
Gathering and transportation costs		8,526		—		27,706			—			36,232
Taxes other than income		27,408		—		156,523			—			183,931
General and administrative		64,001		—		19,527			(1,036	)		82,492
Financing costs, net		58,295		14,110		(10,721	)		—			61,684

		595,909		14,110		852,842			(1,036	)		1,461,825


INCOME BEFORE INCOME TAXES		448,589		9,194		728,389			(315,566	)		870,606
Provision for income taxes		6,573		8,814		413,203			—			428,590


NET INCOME		442,016		380		315,186			(315,566	)		442,016
Preferred stock dividends		1,420		—		—			—			1,420

INCOME ATTRIBUTABLE TO COMMON STOCK	$	440,596	$	380	$	315,186		$	(315,566	)	$	440,596

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Quarter Ended September 30, 2008


											All Other
							Apache		Apache		Subsidiaries
	Apache			Apache			Finance		Finance		of Apache			Reclassifications
	Corporation			North America			Australia		Canada		Corporation			& Eliminations			Consolidated
	(In thousands)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,290,323		$	—		$	—	$	—	$	2,086,279		$	(7,720	)	$	3,368,882
Equity in net income (loss) of affiliates		842,215			36,760			27,015		124,596		(3,705	)		(1,026,881	)		—
Other		(51,534	)		(24,263	)		24,263		14,701		33,757			(922	)		(3,998	)

		2,081,004			12,497			51,278		139,297		2,116,331			(1,035,523	)		3,364,884


OPERATING EXPENSES:
Depreciation, depletion and amortization		257,091			—			—		—		343,796			—			600,887
Asset retirement obligation accretion		16,174			—			—		—		8,796			—			24,970
Lease operating expenses		229,018			—			—		—		259,148			—			488,166
Gathering and transportation costs		11,928			—			—		—		38,167			(7,720	)		42,375
Taxes other than income		57,863			—			—		—		246,417			—			304,280
General and administrative		43,661			—			—		—		14,822			(922	)		57,561
Financing costs, net		32,780			(2,777	)		4,523		14,152		(15,387	)		—			33,291

		648,515			(2,777	)		4,523		14,152		895,759			(8,642	)		1,551,530


INCOME (LOSS) BEFORE INCOME TAXES		1,432,489			15,274			46,755		125,145		1,220,572			(1,026,881	)		1,813,354
Provision (benefit) for income taxes		241,664			(7,628	)		9,995		141		378,357			—			622,529


NET INCOME		1,190,825			22,902			36,760		125,004		842,215			(1,026,881	)		1,190,825
Preferred stock dividends		1,420			—			—		—		—			—			1,420


INCOME ATTRIBUTABLE TO COMMON STOCK	$	1,189,405		$	22,902		$	36,760	$	125,004	$	842,215		$	(1,026,881	)	$	1,189,405

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2009


							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In thousands)
REVENUES AND OTHER:
Oil and gas production revenues	$	1,913,223		$	—		$	4,090,440		$	—		$	6,003,663
Equity in net income (loss) of affiliates		(323,601	)		(526,463	)		133,123			716,941			—
Other		1,632			44,138			13,272			(3,071	)		55,971

		1,591,254			(482,325	)		4,236,835			713,870			6,059,634


OPERATING EXPENSES:
Depreciation, depletion and amortization		1,871,151			—			2,726,884			—			4,598,035
Asset retirement obligation accretion		48,082			—			31,192			—			79,274
Lease operating expenses		540,759			—			707,538			—			1,248,297
Gathering and transportation costs		24,222			—			78,828			—			103,050
Taxes other than income		69,696			—			317,515			—			387,211
General and administrative		210,178			—			51,336			(3,071	)		258,443
Financing costs, net		169,706			42,338			(30,618	)		—			181,426

		2,933,794			42,338			3,882,675			(3,071	)		6,855,736


INCOME (LOSS) BEFORE INCOME TAXES		(1,342,540	)		(524,663	)		354,160			716,941			(796,102	)
Provision (benefit) for income taxes		(472,336	)		(131,323	)		677,761			—			74,102


NET LOSS		(870,204	)		(393,340	)		(323,601	)		716,941			(870,204	)
Preferred stock dividends		4,260			—			—			—			4,260

LOSS ATTRIBUTABLE TO COMMON STOCK	$	(874,464	)	$	(393,340	)	$	(323,601	)	$	716,941		$	(874,464	)

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF OPERATIONS
For the Nine Months Ended September 30, 2008


											All Other
							Apache		Apache		Subsidiaries
	Apache			Apache			Finance		Finance		of Apache			Reclassifications
	Corporation			North America			Australia		Canada		Corporation			& Eliminations			Consolidated
	(In thousands)
REVENUES AND OTHER:
Oil and gas production revenues	$	4,267,293		$	—		$	—	$	—	$	6,230,045		$	(46,389	)	$	10,450,949
Equity in net income (loss) of affiliates		2,267,847			51,205			51,760		307,270		(4,893	)		(2,673,189	)		—
Other		(41,679	)		(16,880	)		16,804		44,024		2,365			(2,767	)		1,867

		6,493,461			34,325			68,564		351,294		6,227,517			(2,722,345	)		10,452,816


OPERATING EXPENSES:
Depreciation, depletion and amortization		845,486			—			—		—		1,003,558			—			1,849,044
Asset retirement obligation accretion		50,882			—			—		—		26,264			—			77,146
Lease operating expenses		644,344			—			—		—		745,198			—			1,389,542
Gathering and transportation costs		32,904			—			—		—		136,603			(46,389	)		123,118
Taxes other than income		173,689			—			—		—		671,717			—			845,406
General and administrative		176,373			—			—		—		45,250			(2,767	)		218,856
Financing costs, net		102,882			(8,272	)		13,518		42,378		(33,912	)		—			116,594

		2,026,560			(8,272	)		13,518		42,378		2,594,678			(49,156	)		4,619,706


INCOME (LOSS) BEFORE INCOME TAXES		4,466,901			42,597			55,046		308,916		3,632,839			(2,673,189	)		5,833,110
Provision (benefit) for income taxes		809,334			(3,056	)		3,841		432		1,364,992			—			2,175,543


NET INCOME		3,657,567			45,653			51,205		308,484		2,267,847			(2,673,189	)		3,657,567
Preferred stock dividends		4,260			—			—		—		—			—			4,260


INCOME ATTRIBUTABLE TO COMMON STOCK	$	3,653,307		$	45,653		$	51,205	$	308,484	$	2,267,847		$	(2,673,189	)	$	3,653,307

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2009


							All Other
				Apache			Subsidiaries
	Apache			Finance			of Apache			Reclassifications
	Corporation			Canada			Corporation			& Eliminations			Consolidated
	(In thousands)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	983,028		$	(22,377	)	$	1,718,820		$	—		$	2,679,471


CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(859,789	)		—			(1,978,748	)		—			(2,838,537	)
Additions to gas gathering, transmission and processing facilities		—			—			(203,783	)		—			(203,783	)
Acquisition of Marathon properties		(181,133	)		—			—			—			(181,133	)
Short-term investments		791,999			—			—			—			791,999
Restricted cash for acquisition settlement		13,880			—			—			—			13,880
Proceeds from sale of oil & gas properties		—			—			—			—			—
Investment in subsidiaries, net		(308,246	)		—			—			308,246			—
Other, net		(30,770	)		—			(67,326	)		—			(98,096	)


NET CASH USED IN INVESTING ACTIVITIES		(574,059	)		—			(2,249,857	)		308,246			(2,515,670	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Debt borrowings		996			60			531,533			(302,413	)		230,176
Payments on debt		—			—			(100,000	)		—			(100,000	)
Dividends paid		(155,125	)		—			—			—			(155,125	)
Common stock activity		19,028			20,606			(14,773	)		(5,833	)		19,028
Treasury stock activity, net		5,344			—			—			—			5,344
Cost of debt and equity transactions		(618	)		—			—			—			(618	)
Other		2,672			—			10,636			—			13,308

NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(127,703	)		20,666			427,396			(308,246	)		12,113


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		281,266			(1,711	)		(103,641	)		—			175,914

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		142,026			1,714			1,037,710			—			1,181,450


CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	423,292		$	3		$	934,069		$	—		$	1,357,364

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 2008


													All Other
							Apache			Apache			Subsidiaries
	Apache			Apache			Finance			Finance			of Apache			Reclassifications
	Corporation			North America			Australia			Canada			Corporation			& Eliminations			Consolidated
	(In thousands)
CASH PROVIDED BY (USED IN) OPERATING ACTIVITIES	$	2,548,120		$	(12,424	)	$	(11,967	)	$	(26,375	)	$	3,531,214		$	—		$	6,028,568


CASH FLOWS FROM INVESTING ACTIVITIES:
Additions to oil and gas property		(1,663,706	)		—			—			—			(2,399,269	)		—			(4,062,975	)
Additions to gas gathering, transmission and processing facilities		—			—			—			—			(420,850	)		—			(420,850	)
Restricted cash		(13,844	)		—			—			—			—			—			(13,844	)
Proceeds from sale of oil & gas properties		206,748			—			—			—			99,953			—			306,701
Investment in subsidiaries, net		(230,924	)		(12,975	)		—			—			—			243,899			—
Other, net		(34,814	)		—			—			—			(7,695	)		—			(42,509	)


NET CASH USED IN INVESTING ACTIVITIES		(1,736,540	)		(12,975	)		—			—			(2,727,861	)		243,899			(4,233,477	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Commercial paper and money market borrowings, net		(138,511	)		—			65			56			(30,652	)		—			(169,042	)
Payments on fixed-rate debt		—			—			—			—			(353	)		—			(353	)
Dividends paid		(187,735	)		4,940			(1,073	)		(2,130	)		143,313			(145,050	)		(187,735	)
Common stock activity		31,207			—			—			—			—			—			31,207
Treasury stock activity, net		4,171			19,975			12,975			26,699			39,200			(98,849	)		4,171
Cost of debt and equity transactions		(1,224	)		—			—			—			—			—			(1,224	)
Other		44,115			—			—			—			2,551			—			46,666


NET CASH PROVIDED BY (USED IN) FINANCING ACTIVITIES		(247,977	)		24,915			11,967			24,625			154,059			(243,899	)		(276,310	)


NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS		563,603			(484	)		—			(1,750	)		957,412			—			1,518,781

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR		3,626			484			1			1,751			119,961			—			125,823


CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	567,229		$	—		$	1		$	1		$	1,077,373		$	—		$	1,644,604

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of September 30, 2009


					All Other
			Apache		Subsidiaries
	Apache		Finance		of Apache		Reclassifications
	Corporation		Canada		Corporation		& Eliminations			Consolidated
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	423,291	$	3	$	934,070	$	—		$	1,357,364
Receivables, net of allowance		526,047		—		1,064,866		—			1,590,913
Short-term investments		—		—		—		—			—
Inventories		61,879		—		477,563		—			539,442
Drilling advances and other		251,908		1,095		249,814		—			502,817
Derivative instruments		11,534		—		17,632		—			29,166

		1,274,659		1,098		2,743,945		—			4,019,702


PROPERTY AND EQUIPMENT, NET		9,243,054		—		13,302,477		—			22,545,531


OTHER ASSETS:
Intercompany receivable, net		1,488,184		—		246,773		(1,734,957	)		—
Restricted cash		—		—		—		—			—
Goodwill, net		—		—		189,252		—			189,252
Equity in affiliates		10,929,246		1,075,503		42,021		(12,046,770	)		—
Deferred charges and other		161,380		1,003,113		306,518		(1,000,000	)		471,011

	$	23,096,523	$	2,079,714	$	16,830,986	$	(14,781,727	)	$	27,225,496


LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	—	$	—	$	39,669	$	—		$	39,669
Accounts payable		259,367		247,866		1,619,624		(1,734,957	)		391,900
Accrued exploration and development		145,893		—		516,494		—			662,387
Other accrued expenses		533,198		62,905		296,890		—			892,993

		938,458		310,771		2,472,677		(1,734,957	)		1,986,949

LONG-TERM DEBT		4,062,000		647,131		300,899		—			5,010,030


DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes		1,193,920		4,288		1,445,314		—			2,643,522
Asset retirement obligation		903,313		—		720,034		—			1,623,347
Derivative instruments		—		—		—		—			—
Other		643,510		—		962,816		(1,000,000	)		606,326

		2,740,743		4,288		3,128,164		(1,000,000	)		4,873,195


COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY		15,355,322		1,117,524		10,929,246		(12,046,770	)		15,355,322


	$	23,096,523	$	2,079,714	$	16,830,986	$	(14,781,727	)	$	27,225,496

APACHE CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATING BALANCE SHEET
As of December 31, 2008


											All Other
						Apache					Subsidiaries
	Apache		Apache			Finance			Apache		of Apache			Reclassifications
	Corporation		North America			Australia			Finance Canada		Corporation			& Eliminations			Consolidated
	(In thousands)
ASSETS
CURRENT ASSETS:
Cash and cash equivalents	$	142,026	$	—		$	2		$	1,714	$	1,037,708		$	—		$	1,181,450
Short-term investments		791,899		—			—			—		100			—			791,999
Receivables, net of allowance		514,174		—			—			1,095		841,710			—			1,356,979
Inventories		59,106		—			—			—		439,461			—			498,567
Drilling advances and other		319,648		—			—			1,786		146,265			—			467,699
Derivative instruments		137,308		—			—			—		16,972			—			154,280

		1,964,161		—			2			4,595		2,482,216			—			4,450,974


PROPERTY AND EQUIPMENT, NET		9,970,619		—			—			—		13,987,898			—			23,958,517


OTHER ASSETS:
Intercompany receivable, net		1,185,771		—			—			—		—			(1,185,771	)		—
Restricted cash		13,880		—			—			—		—			—			13,880
Goodwill, net		—		—			—			—		189,252			—			189,252
Equity in affiliates		12,919,395		510,620			714,092			1,556,673		(157,276	)		(15,543,504	)		—
Deferred charges and other		212,635		—			—			1,003,353		357,874			(1,000,000	)		573,862


	$	26,266,461	$	510,620		$	714,094		$	2,564,621	$	16,859,964		$	(17,729,275	)	$	29,186,485


LIABILITIES AND SHAREHOLDERS’ EQUITY
CURRENT LIABILITIES:
Short-term debt	$	—	$	—		$	99,977		$	—	$	12,621		$	—		$	112,598
Accounts payable		2,038,266		—			—			—		(1,489,321	)		—			548,945
Accrued exploration and development		279,746		—			—			—		685,113			—			964,859
Other accrued expenses		575,451		(10,097	)		165,432			290,587		1,058,431			(1,185,771	)		894,033

		2,893,463		(10,097	)		265,409			290,587		266,844			(1,185,771	)		2,520,435


LONG-TERM DEBT		4,061,005		—			—			647,071		100,899			—			4,808,975


DEFERRED CREDITS AND OTHER NONCURRENT LIABILITIES:
Income taxes		1,599,539		—			(31,292	)		3,548		1,594,862			—			3,166,657
Asset retirement obligation		844,126		—			—			—		711,403			—			1,555,529
Derivative instruments		—		30,643			(30,643	)		—		7,713			—			7,713
Other		359,607		—			—			—		1,258,848			(1,000,000	)		618,455

		2,803,272		30,643			(61,935	)		3,548		3,572,826			(1,000,000	)		5,348,354


COMMITMENTS AND CONTINGENCIES SHAREHOLDERS’ EQUITY		16,508,721		490,074			510,620			1,623,415		12,919,395			(15,543,504	)		16,508,721


	$	26,266,461	$	510,620		$	714,094		$	2,564,621	$	16,859,964		$	(17,729,275	)	$	29,186,485

ARCH COAL INC

16. Guarantees

The Company has agreed to continue to provide surety bonds and letters of credit for the reclamation and retiree healthcare obligations of Magnum Coal Company (“Magnum”) related to the properties the Company sold to Magnum on December 31, 2005. The purchase agreement requires Magnum to reimburse the Company for costs related to the surety bonds and letters of credit and to use commercially reasonable efforts to replace the obligations. If the surety bonds and letters of credit related to the reclamation obligations are not replaced by Magnum within a specified period of time, Magnum must post a letter of credit in favor of the Company in the amounts of the reclamation obligations. At September 30, 2009, the Company had approximately $91.6 million of surety bonds related to properties sold to Magnum. As a result of Magnum’s purchase by Patriot Coal Corporation, Magnum will be required to post letters of credit in the Company’s favor for the full amount of the reclamation obligation on or before February 2011.

Magnum also acquired certain coal supply contracts with customers who have not consented to the contracts’ assignment from the Company to Magnum. The Company has committed to purchase coal from Magnum to sell to those customers at the same price it is charging the customers for the sale. In addition, certain contracts were assigned to Magnum, but the Company has guaranteed Magnum’s performance under the contracts. The longest of the coal supply contracts extends to the year 2017. If Magnum is unable to supply the coal for these coal sales contracts then the Company would be required to purchase coal on the open market or supply contracts from its existing operations. At market prices effective at September 30, 2009, the cost of purchasing 13.3 million tons of coal to supply the contracts that have not been assigned over their duration would exceed the sales price under the contracts by approximately $293.8 million, and the cost of purchasing 3.0 million tons of coal to supply the assigned and guaranteed contracts over their duration would exceed the sales price under the contracts by approximately $57.8 million. The Company has also guaranteed Magnum’s performance under certain operating leases, the longest of which extends through 2011. If the Company were required to perform under its guarantees of the operating lease agreements, it would be required to make $3.5 million of lease payments. As the Company does not believe that it is probable that it would have to purchase replacement coal or fulfill its obligations under the lease guarantees, no losses have been recorded in the condensed consolidated financial statements as of September 30, 2009. However, if the Company would have to perform under these guarantees, it could potentially have a material adverse effect on the business, results of operations and financial condition of the Company.

In connection with the Company’s acquisition of the coal operations of ARCO and the simultaneous combination of the acquired ARCO operations and the Company’s Wyoming operations into the Arch Western joint venture, the Company agreed to indemnify the other member of Arch Western against certain tax liabilities in the event that such liabilities arise prior to June 1, 2013 as a result of certain actions taken, including the sale or other disposition of certain properties of Arch Western, the repurchase of certain equity interests in Arch Western by Arch Western or the reduction under certain circumstances of indebtedness incurred by Arch Western in connection with the acquisition. If the Company were to become liable, the maximum amount of potential future tax payments is $44.4 million at September 30, 2009, which is not recorded as a liability in the Company’s condensed consolidated financial statements. Since the indemnification is dependent upon the initiation of activities within the Company’s control and the Company does not intend to initiate such activities, it is remote that the Company will become liable for any obligation related to this indemnification. However, if such indemnification obligation were to arise, it could potentially have a material adverse effect on the business, results of operations and financial condition of the Company.

BioScrip, Inc.

NOTE 8 – SECURITY INTEREST AND LETTERS OF CREDIT

Under the terms of the prime vendor agreement with AmerisourceBergen Drug Company (“ABDC”), the Company granted ABDC a secured, first priority lien in all of its inventory as well as the proceeds thereof. In the ordinary course of business, the Company obtained certain letters of credit (“LC”) from commercial banks in favor of various parties. At September 30, 2009, there was $1.1 million on deposit as collateral for these LCs.

Boardwalk Pipeline Partners, LP

The Partnership has no independent assets or operations other than its investment in its subsidiaries. The Partnerships Boardwalk Pipelines subsidiary has issued securities which have been fully and unconditionally guaranteed by the Partnership. All of the subsidiaries of the Partnership are minor other than Boardwalk Pipelines and its consolidated subsidiaries. The Partnership does have separate partners capital including publicly traded limited partner common units. The Partnerships subsidiaries have no significant restrictions on their ability to pay distributions or make loans to the Partnership except as noted in the debt covenants and had no restricted assets at September 30, 2009. Note 7 contains additional information regarding the Partnerships debt and related covenants.

BOEING CO

Note 8 – Arrangements with Off-Balance Sheet Risk

We enter into arrangements with off-balance sheet risk in the normal course of business, primarily in the form of guarantees.

Third-Party Guarantees

The following tables provide quantitative data regarding our third-party guarantees. The maximum potential payments represent a “worst-case scenario,” and do not necessarily reflect our expected results. Estimated proceeds from collateral and recourse represent the anticipated values of assets we could liquidate or receive from other parties to offset our payments under guarantees.


As of September 30, 2009	Maximum Potential Payments		Estimated Proceeds from Collateral/ Recourse		Carrying Amount of Liabilities*
Contingent repurchase commitments	$	3,938	$	3,921	$	7
Indemnifications to ULA**		807				19
Other credit guarantees		150		139		2
Residual value guarantees		51		44		10



As of December 31, 2008	Maximum Potential Payments		Estimated Proceeds from Collateral/ Recourse		Carrying Amount of Liabilities*
Contingent repurchase commitments	$	4,024	$	4,014	$	7
Indemnifications to ULA**		1,184				7
Credit guarantees related to the Sea Launch venture		451		271		180
Other credit guarantees		158		145		11
Residual value guarantees		51		47		10

Amounts included in Other accrued liabilities

Amount includes contributed Delta launch program inventory of $406 and $813, plus $348 related to the pricing of certain contracts and $53 and $23 related to miscellaneous Delta contracts at September 30, 2009 and December 31, 2008.

Contingent Repurchase Commitments We have entered into contingent repurchase commitments with certain customers in conjunction with signing a definitive agreement for the sale of new aircraft (Sale Aircraft). Under these commitments, we agreed to repurchase the Sale Aircraft at a specified price, generally 10 years after delivery of the Sale Aircraft. Our repurchase of the Sale Aircraft is contingent upon a future, mutually acceptable agreement for the sale of additional new aircraft, and the subsequent exercise by the customer of its right to sell the Sale Aircraft to us. The repurchase price specified in contingent repurchase commitments is generally lower than the expected fair value at the specified repurchase date. Estimated Proceeds from Collateral/Recourse in the table above represent the lower of the contracted repurchase price or the expected fair value of each aircraft at the specified repurchase date.

Indemnifications to ULA We agreed to indemnify ULA against potential losses that ULA may incur in the event ULA is unable to obtain certain additional contract pricing from the USAF for four satellite missions. We believe ULA is entitled to additional contract pricing. In December 2008, ULA submitted a claim to the USAF to re-price the contract value for two of the four satellite missions covered by the indemnification. In March 2009, the USAF issued a denial of that claim and in June 2009, ULA filed an appeal. If ULA is unsuccessful obtaining additional pricing, we may be responsible for a portion of the shortfall and may record up to $386 in pre-tax losses associated with the four missions.

We agreed to indemnify ULA against losses in the event that costs associated with $1,360 of Delta launch program inventories included in contributed assets and $1,860 of Delta program inventories subject to an inventory supply agreement are not recoverable and allowable from existing and future orders. The term of the inventory indemnification extends to December 31, 2020. Since inception, ULA has sold $982 of inventories that were contributed by us.

Other Credit Guarantees We have issued credit guarantees, principally to facilitate the sale and/or financing of commercial aircraft. Under these arrangements, we are obligated to make payments to a guaranteed party in the event that lease or loan payments are not made by the original lessee or debtor or certain specified services are not performed. A substantial portion of these guarantees has been extended on behalf of original lessees or debtors with less than investment-grade credit. Our commercial aircraft credit-related guarantees are collateralized by the underlying commercial aircraft and certain other assets. Current outstanding credit guarantees expire within the next 11 years.

Residual Value Guarantees We have issued various residual value guarantees principally to facilitate the sale and financing of certain commercial aircraft. Under these guarantees, we are obligated to make payments to the guaranteed party if the related aircraft or equipment fair values fall below a specified amount at a future time. These obligations are collateralized principally by commercial aircraft and expire within the next 9 years.

Other Indemnifications

In conjunction with our sales of the Electron Dynamic Devices, Inc. and Rocketdyne Propulsion and Power businesses and the sale of our Commercial Airplanes facilities in Wichita, Kansas and Tulsa and McAlester, Oklahoma in 2005, we provided indemnifications to the buyers relating to pre-closing environmental contamination and certain other items. The terms of the indemnifications are indefinite. As it is impossible to assess whether there will be damages in the future or the amounts thereof (if any), we cannot estimate the maximum potential amount of future payments under these guarantees. Therefore, no liability has been recorded.

BOTTLING GROUP LLC

Note 15—Guarantees

PBG has a committed revolving credit facility of $1.2 billion and an uncommitted credit facility of $500 million. Both of these credit facilities are guaranteed by us and will be used to support PBG’s commercial paper program and our working capital requirements. PBG had no outstanding commercial paper as of September 5, 2009 and December 27, 2008.

In March 1999, PBG issued $1 billion of seven percent senior notes due 2029, which are guaranteed by us. We also guarantee that to the extent there is available cash, we will distribute pro rata to PBG and PepsiCo sufficient cash such that the aggregate cash distributed to PBG will enable PBG to pay its taxes, repurchase shares, distribute dividends and make interest payments for its internal and external debt.

CARDINAL HEALTH INC

10. GUARANTEES

In the ordinary course of business, the Company, from time to time, agrees to indemnify certain other parties under agreements with the Company, including under acquisition and disposition agreements, customer agreements and intellectual property licensing agreements. Such indemnification obligations vary in scope and, when defined, in duration. In many cases, a maximum obligation is not explicitly stated and therefore the overall maximum amount of the liability under such indemnification obligations cannot be reasonably estimated. Where appropriate, such indemnification obligations are recorded as a liability. Historically, the Company has not, individually or in the aggregate, made payments under these indemnification obligations in any material amounts. In certain circumstances, the Company believes that its existing insurance arrangements, subject to the general deduction and exclusion provisions, would cover portions of the liability that could arise from any of these indemnification obligations. In addition, the Company believes that the likelihood of a material liability being triggered under these indemnification obligations is not significant.

In the ordinary course of business, the Company, from time to time, enters into agreements that obligate the Company to make fixed payments upon the occurrence of certain events. Such obligations primarily relate to obligations arising under acquisition transactions, where the Company has agreed to make payments based upon the achievement of certain financial performance measures by the acquired business. Generally, the obligation is capped at an explicit amount. The Company’s aggregate exposure for these obligations, assuming the achievement of all financial performance measures, is not material. Any potential payment for these obligations would be treated as an adjustment to the purchase price of the related entity and would have no impact on the Company’s results of operations.

In the ordinary course of business, the Company, from time to time, extends loans to its customers which are subsequently sold to a bank. The bank services and administers these loans as well as any new loans the Company may direct. In order for the bank to purchase such loans, it requires the absolute and unconditional obligation of the Company to repurchase such loans upon the occurrence of certain events described in the agreement including, but not limited to, borrower payment default that exceeds 90 days, insolvency and bankruptcy At September 30, 2009 and June 30, 2009, notes in the program subject to the guaranty of the Company totaled $43.2 million and $39.9 million, respectively. These loans are reported in the Company’s condensed consolidated balance sheet.

Citigroup Inc.

20. GUARANTEES

The Company provides a variety of guarantees and indemnifications to Citigroup customers to enhance their credit standing and enable them to complete a wide variety of business transactions. For certain contracts meeting the definition of a guarantee, the guarantor must recognize, at inception, a liability for the fair value of the obligation undertaken in issuing the guarantee.

In addition, the guarantor must disclose the maximum potential amount of future payments the guarantor could be required to make under the guarantee, if there were a total default by the guaranteed parties. The determination of the maximum potential future payments is based on the notional amount of the guarantees without consideration of possible recoveries under recourse provisions or from collateral held or pledged. Such amounts bear no relationship to the anticipated losses, if any, on these guarantees.

The following tables present information about the Company's guarantees at September 30, 2009 and December 31, 2008:

	Maximum potential amount of future payments

In billions of dollars at September 30, except carrying value in millions	Expire within 1 year		Expire after 1 year		Total amount outstanding		Carrying value *(in millions)*
2009
Financial standby letters of credit	$	48.8	$	48.2	$	97.0	$	465.7
Performance guarantees		9.1		5.4		14.5		32.5
Derivative instruments considered to be guarantees		6.8		9.6		16.4		855.2
Loans sold with recourse		—		0.3		0.3		65.6
Securities lending indemnifications(1)		66.1		—		66.1		—
Credit card merchant processing(1)		59.4		—		59.4		—
Custody indemnifications and other		—		27.5		27.5		154.6

Total	$	190.2	$	91.0	$	281.2	$	1,573.6

	Maximum potential amount of future payments

In billions of dollars at December 31, except carrying value in millions	Expire within 1 year		Expire after 1 year		Total amount outstanding		Carrying value *(in millions)*
2008
Financial standby letters of credit	$	31.6	$	62.6	$	94.2	$	289.0
Performance guarantees		9.4		6.9		16.3		23.6
Derivative instruments considered to be guarantees(2)		7.6		7.2		14.8		1,308.4
Guarantees of collection of contractual cash flows(1)		—		0.3		0.3		—
Loans sold with recourse		—		0.3		0.3		56.4
Securities lending indemnifications(1)		47.6		—		47.6		—
Credit card merchant processing(1)		56.7		—		56.7		—
Custody indemnifications and other		—		21.6		21.6		149.2

Total	$	152.9	$	98.9	$	251.8	$	1,826.6

(1): The carrying values of guarantees of collections of contractual cash flows, securities lending indemnifications and credit card merchant processing are not material, as the Company has determined that the amount and probability of potential liabilities arising from these guarantees are not significant.
(2): Reclassified to conform to current period presentation.

Financial Standby Letters of Credit

Citigroup issues standby letters of credit which substitute its own credit for that of the borrower. If a letter of credit is drawn down, the borrower is obligated to repay Citigroup. Standby letters of credit protect a third party from defaults on contractual obligations. Financial standby letters of credit include guarantees of payment of insurance premiums and reinsurance risks that support industrial revenue bond underwriting and settlement of payment obligations to clearing houses, and also support options and purchases of securities or are in lieu of escrow deposit accounts. Financial standbys also backstop loans, credit facilities, promissory notes and trade acceptances.

Performance Guarantees

Performance guarantees and letters of credit are issued to guarantee a customer's tender bid on a construction or systems-installation project or to guarantee completion of such projects in accordance with contract terms. They are also issued to support a customer's obligation to supply specified products, commodities, or maintenance or warranty services to a third party.

Derivative Instruments Considered to Be Guarantees

Derivatives are financial instruments whose cash flows are based on a notional amount or an underlying instrument, where there is little or no initial investment, and whose terms require or permit net settlement. Derivatives may be used for a variety of reasons, including risk management, or to enhance returns. Financial institutions often act as intermediaries for their clients, helping clients reduce their risks. However, derivatives may also be used to take a risk position.

The derivative instruments considered guarantees, which are presented in the table above, include only those instruments that require Citi to make payments to the counterparty based on changes in an underlying that is related to an asset, a liability, or an equity security held by the guaranteed party. More specifically, derivative instruments considered guarantees include certain over-the-counter written put options where the counterparty is not a bank, hedge fund or broker-dealer (such counterparties are considered to be dealers in these markets, and may therefore not hold the underlying instruments). However, credit derivatives sold by the Company are excluded from this presentation. In addition, non-credit derivative contracts that are cash settled and for which the Company is unable to assert that it is probable the counterparty held the underlying instrument at the inception of the contract also are excluded from the disclosure above. The Company's credit derivative portfolio as protection seller (guarantor) is presented in Note 16 to the Consolidated Financial Statements, "Derivative Activities."

In instances where the Company's maximum potential future payment is unlimited, the notional amount of the contract is disclosed.

Guarantees of Collection of Contractual Cash Flows

Guarantees of collection of contractual cash flows protect investors in credit card receivables securitization trusts from loss of interest relating to insufficient collections on the underlying receivables in the trusts. The notional amount of these guarantees as of December 31, 2008, was $300 million. No such guarantees were outstanding at September 30, 2009.

Loans Sold with Recourse

Loans sold with recourse represent the Company's obligations to reimburse the buyers for loan losses under certain circumstances. Recourse refers to the clause in a sales agreement under which a lender will fully reimburse the buyer/investor for any losses resulting from the purchased loans. This may be accomplished by the seller's taking back any loans that become delinquent.

Securities Lending Indemnifications

Owners of securities frequently lend those securities for a fee to other parties who may sell them short or deliver them to another party to satisfy some other obligation. Banks may administer such securities lending programs for their clients. Securities lending indemnifications are issued by the bank to guarantee that a securities lending customer will be made whole in the event that the security borrower does not return the security subject to the lending agreement and collateral held is insufficient to cover the market value of the security.

Credit Card Merchant Processing

Credit card merchant processing guarantees represent the Company's indirect obligations in connection with the processing of private label and bankcard transactions on behalf of merchants.

Citigroup's primary credit card business is the issuance of credit cards to individuals. In addition, the Company provides transaction processing services to various merchants with respect to bankcard and private-label cards. In the event of a billing dispute with respect to a bankcard transaction between a merchant and a cardholder that is ultimately resolved in the cardholder's favor, the third party holds the primary contingent liability to credit or refund the amount to the cardholder and charge back the transaction to the merchant. If the third party is unable to collect this amount from the merchant, it bears the loss for the amount of the credit or refund paid to the cardholder.

The Company continues to have the primary contingent liability with respect to its portfolio of private-label merchants. The risk of loss is mitigated as the cash flows between the third party or the Company and the merchant are settled on a net basis and the third party or the Company has the right to offset any payments with cash flows otherwise due to the merchant. To further mitigate this risk, the third party or the Company may require a merchant to make an escrow deposit, delay settlement, or include event triggers to provide the third party or the Company with more financial and operational control in the event of the financial deterioration of the merchant, or require various credit enhancements (including letters of credit and bank guarantees). In the unlikely event that a private label merchant is unable to deliver products, services or a refund to its private label cardholders, Citigroup is contingently liable to credit or refund cardholders. In addition, although a third party holds the primary contingent liability with respect to the processing of bankcard transactions, in the event that the third party does not have sufficient collateral from the merchant or sufficient financial resources of its own to provide the credit or refunds to the cardholders, Citigroup would be liable to credit or refund the cardholders.

The Company's maximum potential contingent liability related to both bankcard and private label merchant processing services is estimated to be the total volume of credit card transactions that meet the requirements to be valid chargeback transactions at any given time. At September 30, 2009 and December 31, 2008, this maximum potential exposure was estimated to be $59 billion and $57 billion, respectively.

However, the Company believes that the maximum exposure is not representative of the actual potential loss exposure based on the Company's historical experience and its position as a secondary guarantor (in the case of bankcards). In most cases, this contingent liability is unlikely to arise, as most products and services are delivered when purchased and amounts are refunded when items are returned to merchants. The Company assesses the probability and amount of its contingent liability related to merchant processing based on the financial strength of the primary guarantor (in the case of bankcards) and the extent and nature of unresolved chargebacks and its historical loss experience. At September 30, 2009 and December 31, 2008, the estimated losses incurred and the carrying amounts of the Company's contingent obligations related to merchant processing activities were immaterial.

Custody Indemnifications

Custody indemnifications are issued to guarantee that custody clients will be made whole in the event that a third-party subcustodian or depository institution fails to safeguard clients' assets.

Other

As of December 31, 2008, Citigroup carried a reserve of $149 million related to certain of Visa USA's litigation matters. As of September 30, 2009, the carrying value of the reserve was $155 million. This reserve is included in Other liabilities on the Consolidated Balance Sheet.

Other Guarantees and Indemnifications

The Company, through its credit card business, provides various cardholder protection programs on several of its card products, including programs that provide insurance coverage for rental cars, coverage for certain losses associated with purchased products, price protection for certain purchases and protection for lost luggage. These guarantees are not included in the table, since the total outstanding amount of the guarantees and the Company's maximum exposure to loss cannot be quantified. The protection is limited to certain types of purchases and certain types of losses and it is not possible to quantify the purchases that would qualify for these benefits at any given time. The Company assesses the probability and amount of its potential liability related to these programs based on the extent and nature of its historical loss experience. At September 30, 2009 and December 31, 2008, the actual and estimated losses incurred and the carrying value of the Company's obligations related to these programs were immaterial.

In the normal course of business, the Company provides standard representations and warranties to counterparties in contracts in connection with numerous transactions and also provides indemnifications that protect the counterparties to the contracts in the event that additional taxes are owed due either to a change in the tax law or an adverse interpretation of the tax law. Counterparties to these transactions provide the Company with comparable indemnifications. While such representations, warranties and tax indemnifications are essential components of many contractual relationships, they do not represent the underlying business purpose for the transactions. The indemnification clauses are often standard contractual terms related to the Company's own performance under the terms of a contract and are entered into in the normal course of business based on an assessment that the risk of loss is remote. Often these clauses are intended to ensure that terms of a contract are met at inception (for example, that loans transferred to a counterparty in a sales transaction did in fact meet the conditions specified in the contract at the transfer date). No compensation is received for these standard representations and warranties, and it is not possible to determine their fair value because they rarely, if ever, result in a payment. In many cases, there are no stated or notional amounts included in the indemnification clauses and the contingencies potentially triggering the obligation to indemnify have not occurred and are not expected to occur. There are no amounts reflected on the Consolidated Balance Sheet as of September 30, 2009 and December 31, 2008, related to these indemnifications and they are not included in the table.

In addition, the Company is a member of or shareholder in hundreds of value-transfer networks (VTNs) (payment clearing and settlement systems as well as securities exchanges) around the world. As a condition of membership, many of these VTNs require that members stand ready to backstop the net effect on the VTNs of a member's default on its obligations. The Company's potential obligations as a shareholder or member of VTN associations are not considered to be guarantees, since the shareholders and members represent subordinated classes of investors in the VTNs. Accordingly, the Company's participation in VTNs is not reported in the table and there are no amounts reflected on the Consolidated Balance Sheet as of September 30, 2009 or December 31, 2008 for potential obligations that could arise from the Company's involvement with VTN associations.

At September 30, 2009 and December 31, 2008, the total carrying amounts of the liabilities related to the guarantees and indemnifications included in the table amounted to approximately $1.6 billion and $1.8 billion, respectively. The carrying value of derivative instruments is included in either Trading liabilities or Other liabilities, depending upon whether the derivative was entered into for trading or non-trading purposes. The carrying value of financial and performance guarantees is included in Other liabilities. For loans sold with recourse, the carrying value of the liability is included in Other liabilities. In addition, at September 30, 2009 and December 31, 2008, Other liabilities on the Consolidated Balance Sheet include an allowance for credit losses of $1,074 million and $887 million relating to letters of credit and unfunded lending commitments, respectively.

Collateral

Cash collateral available to the Company to reimburse losses realized under these guarantees and indemnifications amounted to $36 billion at September 30, 2009 and $33 billion at December 31, 2008. Securities and other marketable assets held as collateral amounted to $39 billion and $27 billion at September 30, 2009 and December 31, 2008, respectively, the majority of which collateral is held to reimburse losses realized under securities lending indemnifications. Additionally, letters of credit in favor of the Company held as collateral amounted to $900 million and $503 million at September 30, 2009 and December 31, 2008, respectively. Other property may also be available to the Company to cover losses under certain guarantees and indemnifications; however, the value of such property has not been determined.

Performance Risk

Citigroup evaluates the performance risk of its guarantees based on the assigned referenced counterparty internal or external ratings. Where external ratings are used, investment-grade ratings are considered to be Baa/BBB and above, while anything below is considered non-investment grade. The Citigroup internal ratings are in line with the related external rating system. On certain underlying referenced credits or entities, ratings are not available. Such referenced credits are included in the "Not-rated" category. The maximum potential amount of the future payments related to guarantees and credit derivatives sold is determined to be the notional amount of these contracts, which is the par amount of the assets guaranteed.

Presented in the tables below is the maximum potential amount of future payments classified based upon internal and external credit ratings as of September 30, 2009 and December 31, 2008. As previously mentioned, the determination of the maximum potential future payments is based on the notional amount of the guarantees without consideration of possible recoveries under recourse provisions or from collateral held or pledged. Such amounts bear no relationship to the anticipated losses, if any, on these guarantees.

	Maximum potential amount of future payments

*In billions of dollars as of September 30, 2009*	Investment grade		Non-investment grade		Not rated		Total
Financial standby letters of credit	$	48.5	$	21.1	$	27.4	$	97.0
Performance guarantees		7.0		3.7		3.8		14.5
Derivative instruments deemed to be guarantees		—		—		16.4		16.4
Loans sold with recourse		—		—		0.3		0.3
Securities lending indemnifications		—		—		66.1		66.1
Credit card merchant processing		—		—		59.4		59.4
Custody indemnifications and other		22.3		5.2		—		27.5

Total	$	77.8	$	30.0	$	173.4	$	281.2

	Maximum potential amount of future payments

*In billions of dollars as of December 31, 2008*	Investment grade		Non-investment grade		Not rated		Total
Financial standby letters of credit	$	49.2	$	28.6	$	16.4	$	94.2
Performance guarantees		5.7		5.0		5.6		16.3
Derivative instruments deemed to be guarantees		—		—		14.8		14.8
Guarantees of collection of contractual cash flows		—		—		0.3		0.3
Loans sold with recourse		—		—		0.3		0.3
Securities lending indemnifications		—		—		47.6		47.6
Credit card merchant processing		—		—		56.7		56.7
Custody indemnifications and other		18.5		3.1		—		21.6

Total	$	73.4	$	36.7	$	141.7	$	251.8

Credit Commitments

The table below summarizes Citigroup's other commitments as of September 30, 2009 and December 31, 2008.

*In millions of dollars*	U.S.		Outside of U.S.		September 30, 2009		December 31, 2008

Commercial and similar letters of credit	$	1,691	$	5,625	$	7,316	$	8,215
One- to four-family residential mortgages		1,002		260		1,262		937
Revolving open-end loans secured by one- to four-family residential properties		22,186		2,919		25,105		25,212
Commercial real estate, construction and land development		1,059		604		1,663		2,702
Credit card lines		680,750		134,402		815,152		1,002,437
Commercial and other consumer loan commitments		172,708		89,451		262,159		309,997

Total	$	879,396	$	233,261	$	1,112,657	$	1,349,500

The majority of unused commitments are contingent upon customers' maintaining specific credit standards. Commercial commitments generally have floating interest rates and fixed expiration dates and may require payment of fees. Such fees (net of certain direct costs) are deferred and, upon exercise of the commitment, amortized over the life of the loan or, if exercise is deemed remote, amortized over the commitment period.

Commercial and similar letters of credit

A commercial letter of credit is an instrument by which Citigroup substitutes its credit for that of a customer to enable the customers to finance the purchase of goods or to incur other commitments. Citigroup issues a letter on behalf of its client to a supplier and agrees to pay them upon presentation of documentary evidence that the supplier has performed in accordance with the terms of the letter of credit. When drawn, the customer then is required to reimburse Citigroup.

One- to four-family residential mortgages

A one- to four-family residential mortgage commitment is a written confirmation from Citigroup to a seller of a property that the bank will advance the specified sums enabling the buyer to complete the purchase.

Revolving open-end loans secured by one- to four-family residential properties

Revolving open-end loans secured by one- to four-family residential properties are essentially home equity lines of credit. A home equity line of credit is a loan secured by a primary residence or second home to the extent of the excess of fair market value over the debt outstanding for the first mortgage.

Commercial Real Estate, Construction and Land Development

Commercial real estate, construction and land development include unused portions of commitments to extend credit for the purpose of financing commercial and multifamily residential properties as well as land development projects. Both secured-by-real estate and unsecured commitments are included in this line. In addition, undistributed loan proceeds where there is an obligation to advance for construction progress, are also included in this line. However, this line only includes those extensions of credit that once funded will be classified as Loans on the Consolidated Balance Sheet.

Credit card lines

Citigroup provides credit to customers by issuing credit cards. The credit card lines are unconditionally cancellable by the issuer.

Commercial and other consumer loan commitments

Commercial and other consumer loan commitments include commercial commitments to make or purchase loans, to purchase third-party receivables and to provide note issuance or revolving underwriting facilities. Amounts include $130 billion and $140 billion with an original maturity of less than one year at September 30, 2009 and December 31, 2008, respectively. In addition, included in this line item are highly leveraged financing commitments which are agreements that provide funding to a borrower with higher levels of debt (measured by the ratio of debt capital to equity capital of the borrower) than is generally considered normal for other companies. This type of financing is commonly employed in corporate acquisitions, management buy-outs and similar transactions.

CME GROUP INC.

9. Guarantees

Guarantee of Exercise Rights Privileges. On August 23, 2006, CBOT Holdings and CBOT, along with a class consisting of certain CBOT full members, filed a lawsuit in the Court of Chancery of the State of Delaware against the Chicago Board Options Exchange, Inc. (CBOE). The lawsuit seeks to enforce and protect the exercise right privileges (ERP). The lawsuit alleges that these ERPs allow CBOT’s full members who hold them to become full members of CBOE and to participate on an equal basis with other members of CBOE in CBOE’s announced plans to demutualize. In July 2009, the court issued its final order approving the terms of the settlement. Pursuant to the terms of the settlement, holders of ERPs could submit a claim to participate in the settlement as a Class A or Class B settlement participant until October 14, 2008. Participating Class A members will share in an equity pool equal to 18% of the total common stock issued by CBOE in its demutualization and will share in a cash pool of up to $300.0 million, subject to a cap of $600,000 per individual. Participating Class B members would be paid $250,000 per ERP. The settlement is in the process of being appealed. In connection with the CBOT Holdings merger, the company provided holders of ERPs the option of tendering their ERP to the company for $250,000 payable following the closing of the merger or to participate in the CBOE lawsuit with a guaranteed payment of up to $250,000 from the company if the lawsuit results in a recovery of less than that amount. The maximum possible aggregate payment under the company’s guarantee, assuming that all outstanding ERPs are paid $250,000 by the company, is $293.0 million. The liability under the guarantee, which is recorded at fair value in other liabilities in the consolidated balance sheets, was estimated at $1.2 million at September 30, 2009.

Mutual Offset Agreement. CME and Singapore Exchange Limited (SGX) have a mutual offset agreement. The original term of the renewed agreement was through October 2009. The term of the agreement will be successively renewed for one-year periods unless terminated in advance by either party. Pursuant to such renewals, the current term is through October 2010. Under this agreement, CME can maintain collateral in the form of U.S. Treasury securities or irrevocable letters of credit. At September 30, 2009, CME was contingently liable to SGX on irrevocable letters of credit totaling $33.0 million and had pledged securities with a fair value of $50.0 million. Regardless of the collateral, CME guarantees all cleared transactions submitted through SGX and would initiate procedures designed to satisfy these financial obligations in the event of a default, such as the use of performance bonds and security deposits of the defaulting clearing firm.

CONOCOPHILLIPS

Note 11—Guarantees

At September 30, 2009, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial. In addition, unless otherwise stated we are not currently performing with any significance under the guarantee and expect future performance to be either immaterial or have only a remote chance of occurrence.

Construction Completion Guarantees

· In December 2005, we issued a construction completion guarantee for 30 percent of the $4 billion in loan facilities of Qatargas 3, which are being used to finance the construction of an LNG train in Qatar. Of the $4 billion in loan facilities, we committed to provide $1.2 billion. The maximum potential amount of future payments to third-party lenders under the guarantee is estimated to be $850 million, which could become payable if the full debt financing is utilized and completion of the Qatargas 3 project is not achieved. The project financing will be nonrecourse to ConocoPhillips upon certified completion, expected in 2011. At September 30, 2009, the carrying value of the guarantee to third-party lenders was $11 million.

Guarantees of Joint Venture Debt

· In June 2006, we issued a guarantee for 24 percent of $2 billion in credit facilities of Rockies Express Pipeline LLC, operated by Kinder Morgan Energy Partners, L.P. At September 30, 2009, Rockies Express had $1,871 million outstanding under the credit facilities, with our 24 percent guarantee equaling $449 million. The maximum potential amount of future payments to third-party lenders under the guarantee is estimated to be $480 million, which could become payable if the credit facilities are fully utilized and Rockies Express fails to meet its obligations under the credit agreement. The operator anticipates construction completion in late 2009. Refinancing of the $2 billion credit facility, which will make the debt nonrecourse to ConocoPhillips, is expected to begin at that time. At September 30, 2009, the total carrying value of this guarantee to third-party lenders was $11 million.

· At September 30, 2009, we had guarantees outstanding for our portion of joint venture debt obligations, which have terms of up to 16 years. The maximum potential amount of future payments under the guarantees is approximately $80 million. Payment would be required if a joint venture defaults on its debt obligations.

Other Guarantees

· In conjunction with our purchase of a 50 percent ownership interest in Australia Pacific LNG (APLNG) from Origin Energy in October 2008, we agreed to participate, if and when requested, in any parent company guarantees that were outstanding at the time we purchased our interest in APLNG. These parent company guarantees cover the obligation of APLNG to deliver natural gas under several sales agreements with remaining terms of eight to 22 years. Our maximum potential amount of future payments, or cost of volume delivery, under these guarantees is estimated to be $930 million ($1,940 million in the event of intentional or reckless breach) based on our 50 percent share of the remaining contracted volumes, which could become payable if APLNG fails to meet its obligations under these agreements and the obligations cannot otherwise be mitigated. Future payments are considered unlikely, as the payments, or cost of volume delivery, would only be triggered if APLNG does not have enough natural gas to meet these sales commitments and if the partners do not make necessary equity contributions into APLNG.

· We have other guarantees with maximum future potential payment amounts totaling $520 million, which consist primarily of dealer and jobber loan guarantees to support our marketing business, guarantees to fund the short-term cash liquidity deficits of certain joint ventures, a guarantee of minimum charter revenue for two LNG vessels, one small construction completion guarantee, guarantees relating to the startup of a refining joint venture, guarantees of the lease payment obligations of a joint venture, and guarantees of the residual value of leased corporate aircraft. At September 30, 2009, the carrying value of these guarantees to third-party lenders was $1 million. These guarantees generally extend up to 15 years or life of the venture.

In the third quarter of 2009, we sold our remaining ownership interest in four Keystone Pipeline entities (Keystone) to TransCanada Corporation. As a result, we no longer have any financial guarantees related to Keystone.

Indemnifications

Over the years, we have entered into various agreements to sell ownership interests in certain corporations, joint ventures and assets that gave rise to qualifying indemnifications. Agreements associated with these sales include indemnifications for taxes, environmental liabilities, permits and licenses, employee claims, real estate indemnity against tenant defaults, and litigation. The terms of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, the term is generally indefinite and the maximum amount of future payments is generally unlimited. The carrying amount recorded for these indemnifications at September 30, 2009, was $415 million. We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information the liability is essentially relieved or amortize the liability over an appropriate time period as the fair value of our indemnification exposure declines. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. Included in the recorded carrying amount were $254 million of environmental accruals for known contamination that are included in asset retirement obligations and accrued environmental costs at September 30, 2009. For additional information about environmental liabilities, see Note 12—Contingencies and Commitments.

CONSTELLATION ENERGY GROUP INC

Guarantees

Our guarantees do not represent incremental Constellation Energy obligations; rather they primarily represent parental guarantees of subsidiary obligations. The following table summarizes the maximum exposure by guarantor based on the stated limit of our outstanding guarantees:

At September 30, 2009	Stated Limit


	(In billions)
Constellation Energy guarantees	$	11.5
Merchant energy business guarantees		0.1
BGE guarantees		0.3

Total guarantees	$	11.9

At September 30, 2009, Constellation Energy had a total of $11.9 billion in guarantees outstanding related to loans, credit facilities, and contractual performance of certain of its subsidiaries as described below.

•

Constellation Energy guaranteed a face amount of $11.5 billion as follows:

•

$10.5 billion on behalf of our merchant energy subsidiaries to allow those subsidiaries the flexibility needed to conduct business with counterparties without having to post other forms of collateral. Our estimated net exposure for obligations under commercial transactions covered by these guarantees was approximately $2 billion at September 30, 2009, which represents the total amount the parent company could be required to fund based on September 30, 2009 market prices. For those guarantees related to our derivative liabilities, the fair value of the obligation is recorded in our Consolidated Balance Sheets.

•

$0.9 billion primarily on behalf of our nuclear generating facilities for nuclear insurance and credit support to ensure these plants have funds to meet expenses and obligations to safely operate and maintain the plants.

•

$0.1 billion to its other nonregulated businesses.

•

Our merchant energy business guaranteed $73.0 million for loans, performance guarantees and other payment obligations primarily related to certain power projects in which we have an investment.

•

BGE guaranteed the Trust Preferred Securities of $250.0 million of BGE Capital Trust II.

Duke Energy CORP

15. Guarantees and Indemnifications

Duke Energy and its subsidiaries have various financial and performance guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include performance guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. Duke Energy and its subsidiaries enter into these arrangements to facilitate commercial transactions with third parties by enhancing the value of the transaction to the third party.

On January 2, 2007, Duke Energy completed the spin-off of its natural gas businesses to shareholders. Guarantees that were issued by Duke Energy, Cinergy, or International Energy, or were assigned to Duke Energy prior to the spin-off remained with Duke Energy subsequent to the spin-off. Guarantees issued by Spectra Energy Capital, LLC (Spectra Capital) or its affiliates prior to the spin-off remained with Spectra Capital subsequent to the spin-off, except for certain guarantees that are in the process of being assigned to Duke Energy. During this assignment period, Duke Energy has indemnified Spectra Capital against any losses incurred under these guarantee obligations. The maximum potential amount of future payments associated with the guarantees issued by Spectra Capital is approximately $315 million.

Duke Energy has issued performance guarantees to customers and other third parties that guarantee the payment and performance of other parties, including certain non-wholly-owned entities, as well as guarantees of debt of certain non-consolidated entities and less than wholly-owned consolidated entities. If such entities were to default on payments or performance, Duke Energy would be required under the guarantees to make payments on the obligations of the less than wholly-owned entity. The maximum potential amount of future payments Duke Energy could have been required to make under these guarantees as of September 30, 2009 was approximately $473 million. Of this amount, approximately $214 million relates to guarantees issued on behalf of less than wholly-owned consolidated entities, with the remainder related to guarantees issued on behalf of third parties and unconsolidated affiliates of Duke Energy. Approximately $301 million of the guarantees expire between 2010 and 2021, with the remaining performance guarantees having no contractual expiration.

Included in the maximum potential amount of future payments discussed above is approximately $61 million of maximum potential amounts of future payments associated with guarantees issued to customers or other third parties related to the payment or performance obligations of certain entities that were previously wholly owned by Duke Energy but which have been sold to third parties, such as DukeSolutions, Inc. (DukeSolutions) and Duke Engineering & Services, Inc. (DE&S). These guarantees are primarily related to payment of lease obligations, debt obligations, and performance guarantees related to provision of goods and services. Duke Energy has received back-to-back indemnification from the buyer of DE&S indemnifying Duke Energy for any amounts paid related to the DE&S guarantees. Duke Energy also received indemnification from the buyer of DukeSolutions for the first $2.5 million paid by Duke Energy related to the DukeSolutions guarantees. Further, Duke Energy granted indemnification to the buyer of DukeSolutions with respect to losses arising under some energy services agreements retained by DukeSolutions after the sale, provided that the buyer agreed to bear 100% of the performance risk and 50% of any other risk up to an aggregate maximum of $2.5 million (less any amounts paid by the buyer under the indemnity discussed above). Additionally, for certain performance guarantees, Duke Energy has recourse to subcontractors involved in providing services to a customer. These guarantees have various terms ranging from 2009 to 2019, with others having no specific term.

Duke Energy has guaranteed certain issuers of surety bonds, obligating itself to make payment upon the failure of a non-wholly-owned entity to honor its obligations to a third party, as well as used bank-issued stand-by letters of credit to secure the performance of non-wholly-owned entities to a third party or customer. Under these arrangements, Duke Energy has payment obligations which are triggered by a draw by the third party or customer due to the failure of the non-wholly-owned entity to perform according to the terms of its underlying contract. Substantially all of these guarantees issued by Duke Energy relate to projects at Crescent, which filed Chapter 11 petitions in a U.S. Bankruptcy Court in June 2009. During the first quarter of 2009, Duke Energy determined that it was probable that it will be required to perform under certain of these guarantee obligations and recorded a charge of approximately $33 million associated with these obligations. At the time the charge was recorded, the face value of the guarantees was approximately $70 million, which has since been reduced to approximately $50 million as of September 30, 2009 as Crescent continues to complete some of its obligations under these guarantees.

Duke Energy has entered into various indemnification agreements related to purchase and sale agreements and other types of contractual agreements with vendors and other third parties. These agreements typically cover environmental, tax, litigation and other matters, as well as breaches of representations, warranties and covenants. Typically, claims may be made by third parties for various periods of time, depending on the nature of the claim. Duke Energy’s potential exposure under these indemnification agreements can range from a specified amount, such as the purchase price, to an unlimited dollar amount, depending on the nature of the claim and the particular transaction. Duke Energy is unable to estimate the total potential amount of future payments under these indemnification agreements due to several factors, such as the unlimited exposure under certain guarantees.

At September 30, 2009, the amounts recorded on the Consolidated Balance Sheets for the guarantees and indemnifications mentioned above, including performance guarantees associated with projects at Crescent for which it is probable that Duke Energy will be required to perform, is approximately $35 million. This amount is primarily recorded in Other within Deferred Credits and Other Liabilities on the Consolidated Balance Sheets.

FEDERAL NATIONAL MORTGAGE ASSOCIATION FANNIE MAE

8. Financial Guarantees and Master Servicing

We generate revenue by absorbing the credit risk of mortgage loans and mortgage-related securities backing our Fannie Mae MBS in exchange for a guaranty fee. We primarily issue single-class and multi-class Fannie Mae MBS and guarantee to the respective MBS trusts that we will supplement amounts received by the MBS trusts as required to permit timely payment of principal and interest on the related Fannie Mae MBS, irrespective of the cash flows received from borrowers. We also provide credit enhancements on taxable or tax-exempt mortgage revenue bonds issued by state and local governmental entities to finance multifamily housing for low- and moderate-income families. Additionally, we issue long-term standby commitments that require us to purchase loans from lenders if the loans meet certain delinquency criteria.

We record a guaranty obligation for (i) guarantees on lender swap transactions issued or modified on or after January 1, 2003, (ii) guarantees on portfolio securitization transactions, (iii) credit enhancements on mortgage revenue bonds, and (iv) our obligation to absorb losses under long-term standby commitments. Our guaranty obligation represents our obligation to stand ready to perform on these guarantees. Our guaranty obligation is recorded at fair value at inception. The carrying amount of the guaranty obligation, excluding deferred profit, was $11.4 billion and $9.7 billion as of September 30, 2009 and December 31, 2008, respectively. We also record an estimate of incurred credit losses on these guarantees in the “Reserve for guaranty losses” in our condensed consolidated balance sheets, as discussed further in “Note 5, Allowance for Loan Losses and Reserve for Guaranty Losses.”

We have a portion of our guarantees reflected in our condensed consolidated balance sheets. For those guarantees recorded in our condensed consolidated balance sheets, our maximum potential exposure under these guarantees is primarily comprised of the unpaid principal balance of the underlying mortgage loans, which totaled $2.5 trillion and $2.4 trillion as of September 30, 2009 and December 31, 2008, respectively. In addition, we had exposure of $142.8 billion and $172.2 billion for other guarantees not recorded in our condensed consolidated balance sheets as of September 30, 2009 and December 31, 2008, respectively, which primarily represents the unpaid principal balance of loans underlying guarantees issued prior to the effective date of the current FASB guidance on guaranty accounting.

The maximum exposure from our guarantees is not representative of the actual loss we are likely to incur, based on our historical loss experience. In the event we were required to make payments under our guarantees, we would pursue recovery of these payments by exercising our rights to the collateral backing the underlying loans and through available credit enhancements, which includes all recourse with third parties and mortgage insurance. The maximum amount we could recover through available credit enhancements and recourse with third parties on guarantees recorded in our condensed consolidated balance sheets was $118.3 billion and $124.4 billion as of September 30, 2009 and December 31, 2008, respectively. The maximum amount we could recover through available credit enhancements and recourse with all third parties on guarantees not recorded in our condensed consolidated balance sheets was $14.4 billion and $17.6 billion as of September 30, 2009 and December 31, 2008, respectively. Recoverability of such credit enhancements and recourse is subject to, but not limited to, our mortgage insurers’ and financial guarantors’ ability to meet their obligations to us. Refer to “Note 17, Concentrations of Credit Risk” for additional information.

Risk Characteristics of our Book of Business

We gauge our performance risk under our guaranty based on the delinquency status of the mortgage loans we hold in portfolio, or in the case of mortgage-backed securities, the underlying mortgage loans of the related securities. Management also monitors the serious delinquency rate, which is the percentage of single-family loans three or more months past due and the percentage of multifamily loans two or more months past due, of loans with certain risk characteristics, such as mark-to-market, loan-to-value ratio and operating debt service coverage. We use this information, in conjunction with housing market and economic conditions, to structure our pricing and our eligibility and underwriting criteria to accurately reflect the current risk of loans with these high-risk characteristics, and in some cases we decide to significantly reduce our participation in riskier loan product categories. Management also uses this data together with other credit risk measures to identify key trends that guide the development of our loss mitigation strategies.

The following tables display the current delinquency status and certain risk characteristics of our conventional single-family and total multifamily guaranty book of business as of September 30, 2009 and December 31, 2008.

		As of September 30, 2009⁽¹⁾						As of December 31, 2008⁽¹⁾
		30 days Delinquent		60 days Delinquent		Seriously Delinquent⁽²⁾		30 days Delinquent		60 days Delinquent		Seriously Delinquent⁽²⁾

Percentage of single-family
	conventional guaranty book of business ⁽³⁾	2.41	%	1.16	%	5.89	%	2.53	%	1.10	%	2.96	%
Percentage of single-family
	conventional loans ⁽⁴⁾	2.44		1.06		4.72		2.52		1.00		2.42

			As of September 30, 2009⁽¹⁾					As of December 31, 2008⁽¹⁾
			Percentage of Single-Family Conventional Guaranty Book of Business⁽³⁾		Percentage Seriously Delinquent^{(2) (4)}		Percentage of Single-Family Conventional Guaranty Book of Business⁽³⁾		Percentage Seriously Delinquent^{(2) (4)}
Estimated mark-to-market loan-to-value ratio:
	100.01% to 110%		5	%	13.18	%	5	%	7.12	%
	110.01% to 120%		3		16.34		3		9.91
	120.01% to 125%		1		18.70		1		11.79
	Greater than 125%		5		28.56		3		18.43
Geographical Distribution:
	Arizona		3		7.87		3		3.41
	California		17		5.06		16		2.30
	Florida		7		11.31		7		6.14
	Nevada		1		11.16		1		4.74
	Select Midwest states⁽⁵⁾		11		4.98		11		2.70
	All other states		61		3.58		62		1.86
Product Distribution:⁽⁶⁾
	Alt-A		9		13.97		11		7.03
	Subprime		*		26.41		*		14.29
	Negatively amortizing adjustable rate		1		9.53		1		5.61
	Interest only		7		17.94		8		8.42
	Investor property		6		5.15		6		2.95
	Condo/Coop		9		5.34		9		2.73
	Original loan-to-value ratio >90% ⁽⁷⁾		9		11.56		10		6.33
	FICO score <620 ⁽⁷⁾		4		16.08		5		9.03
	Original loan-to-value ratio >90% and
		FICO score <620 ⁽⁷⁾	1		25.32		1		15.97
Vintages:
		2005	11		6.25		13		2.99
		2006	11		11.11		14		5.11
		2007	16		11.80		20		4.70
		2008	14		2.93		16		0.67
		All other vintages	48		2.00		37		1.35

__________


^*	The percentage of the single-family conventional guaranty book of business consisting of subprime loans is less than 0.5%.
⁽¹⁾	Consists of the portion of our single-family conventional guaranty book of business for which we have detailed loan level information, which constitutes approximately 99% of our total single-family conventional guaranty book of business as of both September 30, 2009 and December 31, 2008.

⁽²⁾	Includes single-family conventional loans that are three months or more past due or in foreclosure.

⁽³⁾	Calculated based on the aggregate unpaid principal balance of delinquent single-family conventional loans divided by the aggregate unpaid principal balance of loans in our single-family conventional guaranty book of business.

⁽⁴⁾	Calculated based on the number of single-family conventional loans that are delinquent divided by the total number of loans in our single-family conventional guaranty book of business.

⁽⁵⁾	Consists of Illinois, Indiana, Michigan, and Ohio.

⁽⁶⁾	Categories are not mutually exclusive. Loans with multiple product features are included in all applicable categories.

⁽⁷⁾	Includes housing goals-oriented products such as MyCommunityMortgage® and Expanded Approval®.

	As of September 30, 2009^{(1) (2)}					As of December 31, 2008^{(1) (2)}
	30 days		Seriously		30 days		Seriously
	Delinquent		Delinquent⁽³⁾		Delinquent		Delinquent⁽³⁾

Percentage of multifamily guaranty book of business	0.19	%	0.62	%	0.12	%	0.30	%

			As of September 30, 2009^{(1) (2)}				As of December 31, 2008^{(1) (2)}
			Percentage of				Percentage of
			Multifamily		Percentage		Multifamily		Percentage
			Guaranty		Seriously		Guaranty		Seriously
			Book of Business		Delinquent		Book of Business		Delinquent
Originating loan-to-value ratio:
	Greater than 80%		5	%	0.29	%	5	%	0.92	%
	Less than or equal to 80%		95		0.64		95		0.27
Originating debt service coverage ratio:
	Less than or equal to 1.10		10		0.09		11		-
	Greater than 1.10		90		0.68		89		0.33
Originating loan size distribution:
	Less than or equal to $750,000		2		0.92		3		0.55
	Greater than $750,000 and less than
		or equal to $3 million	13		0.97		13		0.52
	Greater than $3 million and less than
		or equal to $5 million	9		1.02		10		0.39
	Greater than $5 million and less than
		or equal to $25 million	41		0.59		41		0.43
	Greater than $25 million		35		0.40		33		-
Maturing dates:
	Maturing in 2009		5		0.73		6		0.10
	Maturing in 2010		2		1.60		3		0.32
	Maturing in 2011		5		0.30		5		0.37
	Maturing in 2012		9		1.57		10		0.16
	Maturing in 2013		11		0.23		-		-

__________

⁽¹⁾	Consists of the portion of our multifamily guaranty book of business for which we have detailed loan level information, which constitutes approximately 99% of our total multifamily guaranty book of business as of both September 30, 2009 and December 31, 2008.

⁽²⁾	Calculated based on the aggregate unpaid principal balance of delinquent multifamily loans divided by the aggregate unpaid principal balance of loans in our multifamily guaranty book of business.

⁽³⁾	Includes multifamily loans that are two months or more past due.

Guaranty Obligations

The following table displays changes in our “Guaranty obligations” in our condensed consolidated balance sheets for the three and nine months ended September 30, 2009 and 2008.

	For the				For the
	Three Months				Nine Months
	Ended				Ended
	September 30,				September 30,
	2009		2008		2009		2008
		(Dollars in millions)

Balance as of beginning of period	$	12,358	$	16,441	$	12,147	$	15,393
Additions to guaranty obligations⁽¹⁾		2,063		1,769		5,477		6,239
Amortization of guaranty obligation into guaranty fee income		(1,091)		(1,155)		(4,119)		(4,134)
Impact of consolidation activity⁽²⁾		(161)		(239)		(336)		(682)
Balance as of end of period	$	13,169	$	16,816	$	13,169	$	16,816

__________

⁽¹⁾	Represents the fair value of the contractual obligation and deferred profit at issuance of new guarantees.

⁽²⁾	Upon consolidation of MBS trusts, we derecognize our guaranty obligation to the respective trusts.

Deferred profit is a component of “Guaranty obligations” in our condensed consolidated balance sheets and is included in the table above. We recorded deferred profit on guarantees issued or modified on or after January 1, 2003 and before January 1, 2008, if the consideration we expected to receive for our guaranty exceeded the estimated fair value of the guaranty obligation at issuance.

Deferred profit had a carrying amount of $1.8 billion and $2.5 billion as of September 30, 2009 and December 31, 2008, respectively. For the three months ended September 30, 2009 and 2008, we recognized deferred profit amortization of $161 million and $210 million, respectively. For the nine months ended September 30, 2009 and 2008, we recognized deferred profit amortization of $670 million and $941 million, respectively.

The fair value of the guaranty obligation, net of deferred profit, associated with the Fannie Mae MBS included in “Investments in securities” was $4.5 billion and $3.8 billion as of September 30, 2009 and December 31, 2008, respectively.

Master Servicing

We do not perform the day-to-day servicing of mortgage loans in a MBS trust in a Fannie Mae securitization transaction; however, we are compensated to carry out administrative functions for the trust and oversee the primary servicer’s performance of the day-to-day servicing of the trust’s mortgage assets. This arrangement gives rise to either a MSA or a MSL.

The following table displays the carrying value and fair value of our MSA for the three and nine months ended September 30, 2009 and 2008.

		For the				For the
		Three Months				Nine Months
		Ended				Ended
		September 30,				September 30,
		2009		2008		2009		2008
		(Dollars in millions)

Cost basis:
	Beginning balance	$	376	$	1,052	$	764	$	1,171
	Additions		10		73		47		276
	Amortization		(3)		(34)		(42)		(152)
	Other-than-temporary impairments		(2)		(10)		(387)		(196)
	Reductions for MBS trusts paid-off and impact of consolidation activity		-		(6)		(1)		(24)
	Ending balance		381		1,075		381		1,075
Valuation allowance:
	Beginning balance		83		86		73		10
	Lower of cost or market adjustments		143		174		660		586
	Lower of cost or market recoveries		(190)		(205)		(697)		(541)
	Ending balance		36		55		36		55
Carrying value		$	345	$	1,020	$	345	$	1,020
Fair value, beginning of period		$	319	$	1,261	$	855	$	1,808
Fair value, end of period		$	488	$	1,349	$	488	$	1,349

The carrying value of our MSL, which approximates its fair value, was $74 million and $42 million as of September 30, 2009 and December 31, 2008, respectively.

We recognized servicing income, referred to as “Trust management income” in our condensed consolidated statements of operations, of $12 million and $65 million for the three months ended September 30, 2009 and 2008, respectively, and $36 million and $247 million for the nine months ended September 30, 2009 and 2008, respectively.

FLUOR CORP

(14) In the ordinary course of business, the company enters into various agreements providing financial or performance assurances to clients on behalf of certain unconsolidated partnerships, joint ventures and other jointly executed contracts. These agreements are entered into primarily to support the project execution commitments of these entities. The guarantees have various expiration dates ranging from mechanical completion of the facilities being constructed to a period extending beyond contract completion in certain circumstances. The maximum potential payment amount of an outstanding performance guarantee is the remaining cost of work to be performed by or on behalf of third parties under engineering and construction contracts. Performance guarantees outstanding as of September 30, 2009 amounted to $3.3 billion. Amounts that may be required to be paid in excess of estimated costs to complete contracts in progress are not estimable. For cost reimbursable contracts, amounts that may become payable pursuant to guarantee provisions are normally recoverable from the client for work performed under the contract. For lump-sum or fixed-price contracts, this amount is the cost to complete the contracted work less amounts remaining to be billed to the client under the contract. Remaining billable amounts could be greater or less than the cost to complete. In those cases where costs exceed the remaining amounts payable under the contract the company may have recourse to third parties, such as owners, co-venturers, subcontractors or vendors for claims.

Financial guarantees, provided in the ordinary course of business to clients and others in certain limited circumstances, are entered into with financial institutions and other credit grantors and generally obligate the company to make payment in the event of a default by the borrower. Most arrangements require the borrower to pledge collateral in the form of property, plant and equipment which is deemed adequate to recover amounts the company might be required to pay. As of September 30, 2009, there were no material guarantees outstanding.

FORD MOTOR CO

NOTE 18. GUARANTEES

At September 30, 2009, the following guarantees were issued and outstanding:

Guarantees related to affiliates and third parties. We guarantee debt and lease obligations of certain joint ventures, as well as certain financial obligations of outside third parties including suppliers to support our business and economic growth. Expiration dates vary through 2017, and guarantees will terminate on payment and/or cancellation of the obligation. A payment by us would be triggered by failure of the guaranteed party to fulfill its obligation covered by the guarantee. In some circumstances, we are entitled to recover from the third party amounts paid by us under the guarantee. However, our ability to enforce these rights is sometimes stayed until the guaranteed party is paid in full, and may be limited in the event of insolvency of the third party or other circumstances. Maximum potential payments under guarantees total $256 million and $206 million at September 30, 2009 and December 31, 2008, respectively. The carrying value of our recorded liabilities related to guarantees was $72 million and $24 million at September 30, 2009 and December 31, 2008, respectively. Our assessment of performance risk under these guarantees is reviewed regularly, and have resulted in no changes to our initial valuation.

In December 2005, we completed the sale of Hertz. As part of this transaction, we provided cash-collateralized letters of credit in an aggregate amount of $200 million to support the asset-backed portion of the buyer's financing for the transaction. Our commitment to provide the letters of credit expires no later than December 21, 2011 and supports the payment obligations of Hertz Vehicle Financing LLC under one or more series of asset-backed notes. The letters of credit can be drawn upon on any date funds allocated to pay interest on the asset-backed notes are insufficient to pay scheduled interest payments, principal amounts due on the legal final maturity date, or when the balance of assets supporting the asset-backed notes is less than the outstanding balance of the asset-backed notes. As of September 30, 2009 and December 31, 2008, the deferred gain related to the letters of credit was $10 million and $14 million, respectively. We believe future performance under these letters of credit is remote.

Indemnifications. In the ordinary course of business, we execute contracts involving indemnifications standard in the industry and indemnifications specific to a transaction, such as the sale of a business. These indemnifications might include claims regarding any of the following, among others: environmental, tax, and shareholder matters; intellectual property rights; power generation contracts; governmental regulations and employment-related matters; dealer, supplier, and other commercial contractual relationships; and financial matters, such as securitizations. Performance under these indemnities would generally be triggered by a breach of terms of the contract or by a third-party claim. We regularly evaluate the probability of having to incur costs associated with these indemnifications and have accrued for expected losses that are probable. As part of the sale of Jaguar Land Rover, we provided the buyer a customary set of indemnifications, some of which are subject to an aggregate limit of $805 million and some of which (e.g., warranties related to our capacity and authority to enter into the transaction, our ownership of the companies sold and the shares of those companies being free from encumbrances, and certain tax covenants) are unlimited in amount. At June 1, 2009, the indemnifications provided to the buyer of Jaguar Land Rover which were subject to an aggregate limit of $805 million expired; however, outstanding claims relating to these indemnifications, as well as indemnifications relating to certain warranties described in the preceding sentence continue. We believe that the probability of payment under these claims and indemnifications is remote. We also are party to numerous indemnifications which do not limit potential payment; therefore, we are unable to estimate a maximum amount of potential future payments that could result from claims made under these indemnities. During the third quarter of 2009, there were no significant changes to our indemnifications.

Product Performance

Warranty. Included in the warranty cost accruals are costs for basic warranty coverages on vehicles sold. Additional service actions, such as product recalls and other customer service actions, are not included in the warranty reconciliation below, but are also accrued for at the time of sale. Estimates for warranty costs are made based primarily on historical warranty claim experience, and most elements are reviewed and adjusted quarterly. The following is a tabular reconciliation of the product warranty accruals accounted for in Accrued liabilities and deferred revenue (in millions):

	First Nine Months
	2009			2008
Beginning balance	$	3,346		$	4,209
Payments made during the period		(1,895	)		(2,140	)
Changes in accrual related to warranties issued during the period		1,073			1,575
Changes in accrual related to pre-existing warranties		644			13
Foreign currency translation and other		117			(77	)
Ending balance	$	3,285		$	3,580

FORTUNE BRANDS INC

14.

Guarantees and Commitments

As of March 31, 2009, we terminated our guarantees related to the debt of Maxxium Worldwide B.V., our Spirits business’s former international sales and distribution joint venture. Since April 1, 2009, we have been providing similar guarantees of 50% of the credit facilities of Maxxium España S.L., reflecting our ownership in the joint venture with TEG. Guarantees of the credit facilities of the new joint venture entities in the alliance with TEG are not material.

We also guaranteed various leases for ACCO World Corporation, the Office business divested in a spin-off in 2005. We will continue to guarantee payment of certain real estate leases, with lease payments totaling approximately $24.3 million, through April 2013. Accordingly, we have recorded the fair value of these guarantees of $0.5 million as of September 30, 2009 as a liability on our financial statements.

We have provided typical indemnities in connection with divestitures. These indemnities relate to various representations generally included in divestiture agreements, such as environmental, tax, product liability, employee liability and other contingencies, depending on the transactions. In several of these divestitures, a maximum obligation for certain contingencies is not specified, which is not unusual for these transactions. We cannot reasonably estimate potential payments under these divestiture-related indemnity obligations. The indemnities vary in duration, and in some cases the durations are indefinite. Because authoritative guidance on guarantees was effective after December 31, 2002, we did not record any liabilities in the consolidated financial statements for indemnities entered into prior to that date. We have not made any indemnity payments that were material to our financial position or results of operations for any quarter. Furthermore, we do not expect that any potential payments in connection with any of these indemnity obligations would have a material adverse effect on our consolidated financial position, results of operations or liquidity for 2009 or in future periods.

GENUINE PARTS CO

Note G — Guarantees

The Company guarantees the borrowings of certain independently controlled automotive parts stores (“independents”) and certain other affiliates in which the Company has a noncontrolling equity ownership interest (“affiliates”). Presently, the independents are generally consolidated by unaffiliated enterprises that have a controlling financial interest through ownership of a majority voting interest in the entity. The Company has no voting interest or other equity conversion rights in any of the independents. The Company does not control the independents or the affiliates, but receives a fee for the guarantee. The Company has concluded that it is not the primary beneficiary with respect to any of the independents and that the affiliates are not variable interest entities. The Company’s maximum exposure to loss as a result of its involvement with these independents and affiliates is equal to the total borrowings subject to the Company’s guarantee. Certain borrowings of the independents and affiliates contain covenants similar to those included in the $350.0 million unsecured revolving line of credit agreement, as more fully discussed in Note 3 of the Company’s notes to the consolidated financial statements in the 2008 Annual Report on Form 10-K. At September 30, 2009, the Company was in compliance with all such covenants.

At September 30, 2009, the total borrowings of the independents and affiliates subject to guarantee by the Company were approximately $199.2 million. These loans generally mature over periods from one to ten years. In the event that the Company is required to make payments in connection with guaranteed obligations of the independents or the affiliates, the Company would obtain and liquidate certain collateral (e.g., accounts receivable and inventory) to recover all or a portion of the amounts paid under the guarantee. When it is deemed probable that the Company will incur a loss in connection with a guarantee, a liability is recorded equal to this estimated loss. To date, the Company has had no significant losses in connection with guarantees of independents’ and affiliates’ borrowings.

In accordance with FASB requirements and based on available information, the Company has accrued for certain guarantees related to the independents’ and affiliates’ borrowings as of September 30, 2009. These liabilities are not material to the financial position of the Company and are included in other long-term liabilities in the accompanying condensed consolidated balance sheets.

GOODRICH CORPORATION

Note 18. Guarantees

The Company extends financial and product performance guarantees to third parties. At September 30, 2009, the following environmental remediation and other indemnifications and financial guarantees were outstanding, in millions:


	Maximum		Carrying
	Potential		Amount of
	Payment		Liability
Environmental remediation and other indemnifications (Note 17, “Contingencies”)	No limit		$	18.1
Guarantees of residual value on leases	$	27.3	$	2.1
Guarantees of JV debt and other financial instruments	$	24.0	$	—

The Company has guarantees of residual values on certain lease obligations in which the Company is obligated to either purchase or remarket the assets at the end of the lease term.

The Company is guarantor on a revolving credit agreement totaling £20 million between Rolls-Royce Goodrich Engine Control Systems Limited (JV) and a financial institution. In addition, the Company guarantees the JV’s foreign exchange credit line and is indemnified by Rolls-Royce for 50% of the amount.

Service and Product Warranties

The Company provides service and warranty policies on certain of its products. The Company accrues liabilities under service and warranty policies based upon specific claims and a review of historical warranty and service claim experience. Adjustments are made to accruals as claim data and historical experience change. In addition, the Company incurs discretionary costs to service its products in connection with product performance issues.

The changes in the carrying amount of service and product warranties for the nine months ended September 30, 2009, in millions, are as follows:


Balance at December 31, 2008	$	139.2
Net provisions for warranties issued during the period		33.6
Net provisions (return to earnings) for warranties existing at the beginning of the year		(0.8	)
Payments		(37.4	)
Foreign currency translation		5.2

Balance at September 30, 2009	$	139.8

The current and long-term portions of service and product warranties were as follows:


	September 30,		December 31,
	2009		2008
	(Dollars in millions)
Accrued expenses	$	66.9	$	66.4
Other non-current liabilities		72.9		72.8

Total	$	139.8	$	139.2

Noble Corporation

Note 14 — Guarantees of Registered Securities

Noble-Cayman and Noble Holding (U.S.) Corporation (“NHC”), each a wholly-owned subsidiary of Noble-Swiss, are guarantors of Noble Drilling Corporation’s (“NDC”) 7.50% Senior Notes due 2019. The outstanding principal balance of the 7.50% Senior Notes at September 30, 2009 was $202 million. NDC is an indirect, wholly-owned subsidiary of Noble-Swiss and a direct, wholly-owned subsidiary of NHC. Noble-Cayman’s and NHC’s guarantees of the 7.50% Senior Notes are full and unconditional. In December 2005, Noble Drilling Holding LLC (“NDH”), an indirect wholly-owned subsidiary of Noble-Swiss, became a co-obligor on (and effectively a guarantor of) the 7.50% Senior Notes.

In connection with our recently completed worldwide internal restructuring (see Note 13), prior to September 30, 2009, Noble Drilling Services 1 LLC (“NDS1”), an indirect wholly-owned subsidiary of Noble-Swiss, became a co-issuer of the 7.50% Senior Notes. Subsequent to September 30, 2009, NDS1 merged with Noble Drilling Services 6 LLC (“NDS6”), also an indirect wholly-owned subsidiary of Noble-Swiss, as part of the internal restructuring. NDS6 was the surviving company in this merger and assumed NDS1’s obligations under, and became a co-issuer of, the 7.50% Senior Notes.

In connection with the issuance of Noble-Cayman’s 5.875% Senior Notes due 2013, NDC guaranteed the payment of the 5.875% Senior Notes. In connection with our recently completed worldwide internal restructuring (see Note 13), subsequent to the end of the quarter, Noble Holding International Limited (“NHIL”), an indirect wholly-owned subsidiary of Noble Cayman and Noble-Swiss, also guaranteed the payment of the 5.875% Senior Notes. NDC’s and NHIL’s guarantees of the 5.875% Senior Notes are full and unconditional. The outstanding principal balance of the 5.875% Senior Notes at September 30, 2009 was $300 million.

In November 2008, NHIL issued $250 million principal amount of 7.375% Senior Notes due 2014, which are fully and unconditionally guaranteed by Noble-Cayman. The outstanding principal balance of the 7.375% Senior Notes at September 30, 2009 was $249 million.

NRG ENERGY, INC.

Note 18 — Guarantees

NRG and its subsidiaries enter into various contracts that include indemnification and guarantee provisions as a routine part of the Company’s business activities. Examples of these contracts include asset purchases and sale agreements, commodity sale and purchase agreements, retail contracts, joint venture agreements, EPC agreements, operation and maintenance agreements, service agreements, settlement agreements, and other types of contractual agreements with vendors and other third parties, as well as affiliates. These contracts generally indemnify the counterparty for tax, environmental liability, litigation and other matters, as well as breaches of representations, warranties and covenants set forth in these agreements. In some cases, NRG’s maximum potential liability cannot be estimated, since the underlying agreements contain no limits on potential liability. The Company is also obligated with respect to customer deposits associated with Reliant Energy.

This Note 18 should be read in conjunction with the complete description under Note 25, Guarantees, to the Company’s financial statements in its Annual Report on Form 10-K for the year ended December 31, 2008.

In connection with the agreement to sell its 50% ownership interest in Mibrag B.V., NRG executed an agreement guaranteeing the performance of its subsidiary Lambique Beheer under the purchase and sale agreement. This agreement indemnifies the buyer for tax, environmental liability and other matters, as well as breaches of representations and warranties and is limited to EUR 206 million.

NRG signed a guarantee agreement on behalf of its subsidiary NRG Retail, LLC guaranteeing the payment and performance of its obligations under the LLC Membership Interest Purchase Agreement and related agreements with RRI in connection with the purchase of its retail business, including purchase price and acquired net working capital. In accordance with the LLC Membership Interest Purchase Agreement, on May 1, 2009, NRG signed an agreement guaranteeing payments up to $85 million related to the Restated Power Purchase Agreement with FPL Energy Upton Wind II, LLC. NRG has no reason to believe that the Company currently has any material liability relating to such routine indemnification obligations.

In connection with the October 5, 2009 amendment of the CSRA, NRG signed guarantee agreements on behalf of its subsidiary NRG Retail, LLC guaranteeing performance under power purchase and sales contracts. See Note 20, Subsequent Event, to this Form 10-Q for further discussion of the CSRA Amendment.

OPEN TEXT CORP

NOTE 18—GUARANTEES AND CONTINGENCIES

Guarantees and indemnifications

We have entered into license agreements with customers that include limited intellectual property indemnification clauses. Generally, we agree to indemnify our customers against legal claims that our software products infringe certain third party intellectual property rights. In the event of such a claim, we are generally obligated to defend our customers against the claim and either settle the claim at our expense or pay damages that our customers are legally required to pay to the third-party claimant. These intellectual property infringement indemnification clauses generally are subject to limits based upon the amount of the license sale. We have not made any indemnification payments in relation to these indemnification clauses.

In connection with certain facility leases, we have guaranteed payments on behalf of our subsidiaries either by providing a security deposit with the landlord or through unsecured bank guarantees obtained from local banks.

We have not disclosed a liability for guarantees, indemnities or warranties described above in the accompanying Condensed Consolidated Balance Sheets since the maximum amount of potential future payments under such guarantees, indemnities and warranties is not determinable.

Litigation

We are subject from time to time to legal proceedings and claims, either asserted or unasserted, that arise in the ordinary course of business, and accrue for these items where appropriate. While the outcome of these proceedings and claims cannot be predicted with certainty, we do not believe that the outcome of any of these legal matters will have a material adverse effect on our consolidated financial position, results of operations and cash flows. Currently, we are not involved in any litigation that we reasonably believe could materially impact our financial position or results of operations and cash flows.

PEABODY ENERGY CORP

(17) Guarantees and Financial Instruments with Off-Balance Sheet Risk

In the normal course of business, the Company is a party to guarantees and financial instruments with off-balance-sheet risk, such as bank letters of credit, performance or surety bonds and other guarantees and indemnities, which are not reflected in the accompanying condensed consolidated balance sheets. Such financial instruments are valued based on the amount of exposure under the instrument and the likelihood of required performance. In the Company’s past experience, virtually no claims have been made against these financial instruments. Management does not expect any material losses to result from these guarantees or off-balance-sheet instruments.

The Company owns a 37.5% interest in a partnership that leases a coal export terminal from the Peninsula Ports Authority of Virginia under a 30-year lease that permits the partnership to purchase the terminal at the end of the lease term for a nominal amount. The partners have severally (but not jointly) agreed to make payments under various agreements which in the aggregate provide the partnership with sufficient funds to pay rents and to cover the principal and interest payments on the floating-rate industrial revenue bonds issued by the Peninsula Ports Authority, and which are supported by letters of credit from a commercial bank. As of September 30, 2009, the Company’s maximum reimbursement obligation to the commercial bank was, in turn, supported by two letters of credit totaling $42.8 million.

The Company is party to an agreement with the Pension Benefit Guaranty Corporation (PBGC) and TXU Europe Limited, an affiliate of the Company’s former parent corporation, under which the Company is required to make special contributions to two of the Company’s defined benefit pension plans and to maintain a $37.0 million letter of credit in favor of the PBGC. If the Company or the PBGC gives notice of an intent to terminate one or more of the covered pension plans in which liabilities are not fully funded, or if the Company fails to maintain the letter of credit, the PBGC may draw down on the letter of credit and use the proceeds to satisfy liabilities under the Employee Retirement Income Security Act of 1974, as amended. The PBGC, however, is required to first apply amounts received from a $110.0 million guarantee in place from TXU Europe Limited in favor of the PBGC before it draws on the Company’s letter of credit. On November 19, 2002, TXU Europe Limited was placed under the administration process in the United Kingdom (a process similar to bankruptcy proceedings in the U.S.) and continues under this process as of September 30, 2009. As a result of these proceedings, TXU Europe Limited may be liquidated or otherwise reorganized in such a way as to relieve it of its obligations under its guarantee.

At September 30, 2009, the Company has a letter of credit of approximately $169 million Australian dollars (approximately $149 million U.S. dollars) for collateral for bank guarantees issued with respect to certain reclamation and performance obligations related to the mines acquired in the Excel Coal Limited acquisition.

Other Guarantees

The Company has a liability recorded of $52.3 million as of September 30, 2009 and $61.8 million as of December 31, 2008 related to reclamation and bonding commitments associated with the purchase of approximately 427 million tons of coal reserves and surface lands in the Illinois Basin in 2007.

The Company is the lessee under numerous equipment and property leases. It is common in such commercial lease transactions for the Company, as the lessee, to agree to indemnify the lessor for the value of the property or equipment leased, should the property be damaged or lost during the course of the Company's operations. The Company expects that losses with respect to leased property would be covered by insurance (subject to deductibles). The Company and certain of its subsidiaries have guaranteed other subsidiaries' performance under their various lease obligations. Aside from indemnification of the lessor for the value of the property leased, the Company’s maximum potential obligations under its leases are equal to the respective future minimum lease payments and the Company assumes that no amounts could be recovered from third parties.

A subsidiary of the Company owns a 5.06% undivided interest in the Prairie State Energy Campus (Prairie State). In connection with the development of Prairie State, each owner, including the Company’s subsidiary, has a guarantee for its proportionate share of obligations to pay its percentage of the construction costs under the Target Price Engineering, Procurement and Construction Agreement with Bechtel Power Corporation. The Company spent $41.6 million during the nine months ended September 30, 2009 ($111.3 million to date) representing its 5.06% share of the construction costs. Total construction costs for Prairie State are expected to be approximately $4 billion.

The Company has provided financial guarantees under certain long-term debt agreements entered into by its subsidiaries, and substantially all of the Company's subsidiaries provide financial guarantees under long-term debt agreements entered into by the Company. The maximum amounts payable under the Company's debt agreements are equal to the respective principal and interest payments. For the descriptions of the Company’s (and its subsidiaries’) debt, see Note 12 to the Notes to the Consolidated Financial Statements included in the Company’s Current Report on Form 8-K filed with the SEC on August 6, 2009. Supplemental guarantor/non-guarantor financial information is provided in Note 18.

As part of the Patriot spin-off, the Company agreed to maintain in force several letters of credit that secured Patriot obligations for certain employee benefits and workers’ compensation obligations. These letters of credit were to be released upon Patriot satisfying the beneficiaries with alternate letters of credit or insurance. If Patriot were unable to satisfy the primary beneficiaries by June 30, 2011, they would then be required to provide directly to the Company a letter of credit in the amount of the remaining obligation. As of September 30, 2009, Patriot has satisfied all beneficiaries with alternate letters of credit or insurance.

Accounts Receivable Securitization

The Company has an accounts receivable securitization program through its wholly-owned, bankruptcy-remote subsidiary (Seller). Under the program, the Company contributes undivided interests in a pool of eligible trade receivables to the Seller, which then sells, without recourse, to a multi-seller, asset-backed commercial paper conduit (Conduit). Purchases by the Conduit are financed with the sale of highly rated commercial paper. The Company utilizes proceeds from the sale of its accounts receivable as an alternative to other forms of debt, effectively reducing its overall borrowing costs. The funding cost of the securitization program was $3.4 million for the nine months ended September 30, 2009 and $8.2 million for the nine months ended September 30, 2008 and is included in interest expense in the unaudited condensed consolidated statements of operations. The Company continues to service the sold trade receivables but does not receive a servicing fee. The securitization program was renewed in May 2009 and extends to May 2012, while the letter of credit commitment that supports the commercial paper facility underlying the securitization program must be renewed annually.

The securitization transactions have been recorded as sales, with those accounts receivable sold to the Conduit removed from the condensed consolidated balance sheets. The amount of undivided interests in accounts receivable sold to the Conduit was $258.8 million as of September 30, 2009 and $275.0 million as of December 31, 2008. The $16.2 million decrease in the accounts receivable securitization program for the nine months ended September 30, 2009 is reflected in cash flows from operating activities in the unaudited condensed consolidated statements of cash flows. The facility decreased in usage by $1.9 million during the nine months ended September 30, 2008.

The Seller is a separate legal entity whose assets are available first and foremost to satisfy the claims of its creditors. Eligible receivables, as defined in the securitization agreement, consist of trade receivables from most of the Company’s U.S. subsidiaries, and are reduced for certain items such as past due balances and concentration limits. Of the eligible pool of receivables contributed to the Seller, undivided interests in only a portion of the pool are sold to the Conduit. The Company (the Seller) continues to own $55.7 million of receivables as of September 30, 2009, which represents collateral supporting the securitization program. The Seller’s interest in these receivables is subordinate to the Conduit’s interest in the event of default under the securitization agreement. If the Company defaulted under the securitization agreement or if its pool of eligible trade receivables decreased significantly, the Company could be prohibited from selling any additional receivables in the future under the agreement.

REYNOLDS AMERICAN INC

Note 16 — RAI Guaranteed, Unsecured Notes — Condensed Consolidating Financial Statements

The following condensed consolidating financial statements have been prepared pursuant to Rule 3-10 of Regulation S-X, relating to the guaranties of RAI’s $4.3 billion unsecured notes. RAI’s direct, wholly owned subsidiaries and certain of its indirectly owned subsidiaries have fully and unconditionally and jointly and severally, guaranteed these notes. The following condensed consolidating financial statements include: the accounts and activities of RAI, the parent issuer; RJR, RJR Tobacco, the Conwood companies, Conwood Holdings, Inc., Santa Fe, Lane, GPI and certain of RJR Tobacco’s other subsidiaries, the Guarantors; other indirect subsidiaries of RAI that are not Guarantors; and elimination adjustments.

Condensed Consolidating Statements of Income
(Dollars in Millions)


	Parent						Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
For the Three Months Ended September 30, 2009
Net sales	$	—		$	2,035		$	40		$	(30	)	$	2,045
Net sales, related party		—			107			—			—			107
Cost of products sold		—			1,149			19			(30	)		1,138
Selling, general and administrative expenses		—			354			17			—			371
Amortization expense		—			7			—			—			7

Operating income (loss)		—			632			4			—			636
Interest and debt expense		58			2			—			—			60
Interest income		—			(2	)		(3	)		—			(5	)
Intercompany interest (income) expense		(30	)		29			1			—			—
Intercompany dividend income		—			(11	)		—			11			—
Other (income) expense, net		(9	)		11			—			—			2

Income (loss) before income taxes		(19	)		603			6			(11	)		579
Provision for (benefit from) income taxes		(8	)		224			1			—			217
Equity income from subsidiaries		373			6			—			(379	)		—

Net income	$	362		$	385		$	5		$	(390	)	$	362

For the Three Months Ended September 30, 2008
Net sales	$	—		$	2,148		$	41		$	(33	)	$	2,156
Net sales, related party		—			116			—			—			116
Cost of products sold		—			1,242			20			(33	)		1,229
Selling, general and administrative expenses		8			349			18			—			375
Amortization expense		—			5			—			—			5
Restructuring charge		6			81			4			—			91
Trademark impairment charge		—			173			—			—			173

Operating income (loss)		(14	)		414			(1	)		—			399
Interest and debt expense		65			2			1			—			68
Interest income		—			(10	)		(6	)		—			(16	)
Intercompany interest (income) expense		(23	)		22			1			—			—
Intercompany dividend income		—			(11	)		—			11			—
Other expense, net		1			11			1			—			13

Income (loss) before income taxes		(57	)		400			2			(11	)		334
Provision for (benefit from) income taxes		(21	)		144			—			—			123
Equity income from subsidiaries		247			3			—			(250	)		—

Net income	$	211		$	259		$	2		$	(261	)	$	211

Condensed Consolidating Statements of Income
(Dollars in Millions)


	Parent						Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
For the Nine Months Ended September 30, 2009
Net sales	$	—		$	5,998		$	120		$	(101	)	$	6,017
Net sales, related party		—			306			—			—			306
Cost of products sold		—			3,378			59			(100	)		3,337
Selling, general and administrative expenses		10			1,070			49			—			1,129
Amortization expense		—			22			—			—			22
Trademark impairment charge		—			453			—			—			453

Operating income (loss)		(10	)		1,381			12			(1	)		1,382
Interest and debt expense		183			7			—			—			190
Interest income		—			(7	)		(8	)		—			(15	)
Intercompany interest (income) expense		(85	)		84			1			—			—
Intercompany dividend income		—			(32	)		—			32			—
Other (income) expense, net		(3	)		12			—			—			9

Income (loss) before income taxes		(105	)		1,317			19			(33	)		1,198
Provision for (benefit from) income taxes		(38	)		488			1			—			451
Equity income from subsidiaries		814			20			—			(834	)		—

Net income	$	747		$	849		$	18		$	(867	)	$	747

For the Nine Months Ended September 30, 2008
Net sales	$	—		$	6,307		$	117		$	(94	)	$	6,330
Net sales, related party		—			338			—			—			338
Cost of products sold		—			3,737			55			(94	)		3,698
Selling, general and administrative expenses		17			1,082			49			—			1,148
Amortization expense		—			16			—			—			16
Restructuring charge		6			81			4			—			91
Trademark impairment charge		—			173			—			—			173

Operating income (loss)		(23	)		1,556			9			—			1,542
Interest and debt expense		200			7			1			—			208
Interest income		(1	)		(38	)		(12	)		—			(51	)
Intercompany interest (income) expense		(63	)		59			4			—			—
Intercompany dividend income		—			(32	)		—			32			—
Gain on termination of joint venture		—			—			(328	)		—			(328	)
Other expense, net		3			—			—			—			3

Income (loss) before income taxes		(162	)		1,560			344			(32	)		1,710
Provision for (benefit from) income taxes		(57	)		686			1			—			630
Equity income from subsidiaries		1,185			344			—			(1,529	)		—

Net income	$	1,080		$	1,218		$	343		$	(1,561	)	$	1,080

Condensed Consolidating Statements of Cash Flows
(Dollars in Millions)


	Parent						Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
For the Nine Months Ended September 30, 2009
Cash flows from operating activities	$	274		$	1,071		$	16		$	(472	)	$	889

Cash flows from (used in) investing activities:
Proceeds from settlement of short-term investments		1			16			—			—			17
Capital expenditures		—			(72	)		(3	)		—			(75	)
Proceeds from termination of joint venture		—			—			24			—			24
Other, net		—			17			—			—			17
Intercompany investments		610			(610	)		—			—			—
Intercompany notes receivable		40			17			—			(57	)		—

Net cash flows from (used in) investing activities		651			(632	)		21			(57	)		(17	)

Cash flows from (used in) financing activities:
Dividends paid on common stock		(743	)		(440	)		—			440			(743	)
Repayment of long-term debt		(189	)		(11	)		—			—			(200	)
Excess tax benefit from stock-based compensation		1			—			—			—			1
Repurchase of common stock		(5	)		—			—			—			(5	)
Other, net		1			—			—			—			1
Dividends paid on preferred stock		(32	)		—			—			32			—
Intercompany notes payable		(17	)		(40	)		—			57			—

Net cash flows used in financing activities		(984	)		(491	)		—			529			(946	)

Effect of exchange rate changes on cash and cash equivalents		—			—			9			—			9

Net change in cash and cash equivalents		(59	)		(52	)		46			—			(65	)
Cash and cash equivalents at beginning of period		272			2,091			215			—			2,578

Cash and cash equivalents at end of period	$	213		$	2,039		$	261		$	—		$	2,513

Condensed Consolidating Statements of Cash Flows
(Dollars in Millions)


	Parent						Non-
	Issuer			Guarantors			Guarantors			Eliminations			Consolidated
For the Nine Months Ended September 30, 2008
Cash flows from operating activities	$	649		$	899		$	32		$	(752	)	$	828

Cash flows from (used in) investing activities:
Proceeds from settlement of short-term investments		—			208			—			—			208
Capital expenditures		—			(90	)		(5	)		—			(95	)
Proceeds from termination of joint venture		—			—			164			—			164
Other, net		(8	)		(33	)		28			—			(13	)
Intercompany notes receivable		40			(28	)		—			(12	)		—

Net cash flows from investing activities		32			57			187			(12	)		264

Cash flows from (used in) financing activities:
Dividends paid on common stock		(752	)		(720	)		—			720			(752	)
Excess tax benefit from stock-based compensation		2			—			—			—			2
Proceeds from stock options exercised		1			—			—			—			1
Repurchase of common stock		(207	)		—			—			—			(207	)
Other, net		1			—			—			—			1
Dividends paid on preferred stock		(32	)		—			—			32			—
Intercompany notes payable		98			(40	)		(70	)		12			—

Net cash flows used in financing activities		(889	)		(760	)		(70	)		764			(955	)

Effect of exchange rate changes on cash and cash equivalents		—			—			(23	)		—			(23	)

Net change in cash and cash equivalents		(208	)		196			126			—			114
Cash and cash equivalents at beginning of period		243			1,885			87			—			2,215

Cash and cash equivalents at end of period	$	35		$	2,081		$	213		$	—		$	2,329

Condensed Consolidating Balance Sheets
(Dollars in Millions)


	Parent				Non-
	Issuer		Guarantors		Guarantors		Eliminations			Consolidated
September 30, 2009
Assets
Cash and cash equivalents	$	213	$	2,039	$	261	$	—		$	2,513
Short-term investments		1		5		—		—			6
Accounts receivable, net		—		77		16		—			93
Accounts receivable, related party		—		65		—		—			65
Notes receivable		—		1		34		—			35
Other receivables		4		10		1		—			15
Inventories		—		1,063		35		(3	)		1,095
Deferred income taxes, net		9		902		1		—			912
Prepaid expenses and other		7		339		—		(4	)		342
Short-term intercompany notes and interest receivable		80		58		—		(138	)		—
Other intercompany receivables		259		—		15		(274	)		—

Total current assets		573		4,559		363		(419	)		5,076
Property, plant and equipment, net		7		956		27		—			990
Trademarks and other intangible assets, net		—		2,791		4		—			2,795
Goodwill		—		8,166		8		—			8,174
Long-term intercompany notes		2,040		1,387		—		(3,427	)		—
Investment in subsidiaries		9,653		467		—		(10,120	)		—
Other assets and deferred charges		312		182		138		(29	)		603

Total assets	$	12,585	$	18,508	$	540	$	(13,995	)	$	17,638

Liabilities and shareholders’ equity
Tobacco settlement accruals	$	—	$	2,396	$	—	$	—		$	2,396
Accounts payable and other accrued liabilities		396		783		34		(4	)		1,209
Due to related party		—		3		—		—			3
Deferred revenue, related party		—		13		—		—			13
Current maturities of long-term debt		300		—		—		—			300
Short-term intercompany notes and interest payable		32		81		25		(138	)		—
Other intercompany payables		—		274		—		(274	)		—

Total current liabilities		728		3,550		59		(416	)		3,921
Intercompany notes and interest payable		1,387		2,040		—		(3,427	)		—
Long-term debt (less current maturities)		4,022		122		—		—			4,144
Deferred income taxes, net		—		263		—		(30	)		233
Long-term retirement benefits (less current portion)		73		2,525		16		—			2,614
Other noncurrent liabilities		19		350		1		—			370
Shareholders’ equity		6,356		9,658		464		(10,122	)		6,356

Total liabilities and shareholders’ equity	$	12,585	$	18,508	$	540	$	(13,995	)	$	17,638

Condensed Consolidating Balance Sheets
(Dollars in Millions)


	Parent				Non-
	Issuer		Guarantors		Guarantors		Eliminations			Consolidated
December 31, 2008
Assets
Cash and cash equivalents	$	272	$	2,091	$	215	$	—		$	2,578
Short-term investments		1		22		—		—			23
Accounts receivable, net		—		68		16		—			84
Accounts receivable, related party		—		91		—		—			91
Notes receivable		—		1		34		—			35
Other receivables		9		27		1		—			37
Inventories		—		1,145		27		(2	)		1,170
Deferred income taxes, net		12		825		1		—			838
Prepaid expenses and other		35		128		4		(4	)		163
Short-term intercompany notes and interest receivable		81		65		—		(146	)		—
Other intercompany receivables		68		—		6		(74	)		—

Total current assets		478		4,463		304		(226	)		5,019
Property, plant and equipment, net		7		999		25		—			1,031
Trademarks and other intangible assets, net		—		3,266		4		—			3,270
Goodwill		—		8,166		8		—			8,174
Long-term intercompany notes		2,080		1,409		—		(3,489	)		—
Investment in subsidiaries		9,751		430		—		(10,181	)		—
Other assets and deferred charges		349		180		160		(29	)		660

Total assets	$	12,665	$	18,913	$	501	$	(13,925	)	$	18,154

Liabilities and shareholders’ equity
Tobacco settlement accruals	$	—	$	2,321	$	—	$	—		$	2,321
Accounts payable and other accrued liabilities		350		974		29		(4	)		1,349
Due to related party		—		3		—		—			3
Deferred revenue, related party		—		50		—		—			50
Current maturities of long-term debt		189		11		—		—			200
Short-term intercompany notes and interest payable		40		81		25		(146	)		—
Other intercompany payables		—		74		—		(74	)		—

Total current liabilities		579		3,514		54		(224	)		3,923
Intercompany notes and interest payable		1,409		2,080		—		(3,489	)		—
Long-term debt (less current maturities)		4,362		124		—		—			4,486
Deferred income taxes, net		—		311		—		(29	)		282
Long-term retirement benefits (less current portion)		64		2,755		17		—			2,836
Other noncurrent liabilities		14		375		1		—			390
Shareholders’ equity		6,237		9,754		429		(10,183	)		6,237

Total liabilities and shareholders’ equity	$	12,665	$	18,913	$	501	$	(13,925	)	$	18,154

RRI ENERGY INC

(10) Guarantees and Indemnifications

We have guaranteed some non-qualified benefits of CenterPoint’s existing retirees at September 20, 2002. The estimated maximum potential amount of future payments under the guarantee is approximately $52 million as of September 2009 and no liability is recorded in our consolidated balance sheet for this item.

We also guarantee the $500 million PEDFA bonds, which are included in our consolidated balance sheet as either outstanding debt or liabilities of discontinued operations ($408 million and $500 million are in our consolidated balance sheet as of September 30, 2009 and December 31, 2008, respectively). Our guarantees are secured by the same collateral as our 6.75% senior secured notes. The guarantees require us to comply with covenants similar to those in the 6.75% senior secured notes indenture. The PEDFA bonds will become secured by certain assets of our Seward power plant if the collateral supporting both the 6.75% senior secured notes and our guarantees are released. Our maximum potential obligation under the guarantees is for payment of the principal and related interest charges at a fixed rate of 6.75%. During June and July 2009, we purchased $92 million of the PEDFA bonds and are the holder of these repurchased bonds. During October 2009, we completed a tender offer and purchased for cash $2 million of the bonds and are the holder of these repurchased bonds. Therefore, the net amount payable by us would not exceed the amount of PEDFA bonds outstanding, excluding the PEDFA bonds we hold.

We have guaranteed payments to a third party relating to energy sales from El Dorado Energy, LLC, a former investment. The estimated maximum potential amount of future payments under this guarantee is approximately $21 million as of September 30, 2009 and no liability is recorded in our consolidated balance sheet for this item.

We enter into contracts that include indemnification and guarantee provisions. In general, we enter into contracts with indemnities for matters such as breaches of representations and warranties and covenants contained in the contract and/or against certain specified liabilities. Examples of these contracts include asset purchase and sales agreements, service agreements and procurement agreements.

In our debt agreements, we typically indemnify against liabilities that arise from the preparation, entry into, administration or enforcement of the agreement.

Except as otherwise noted, we are unable to estimate our maximum potential exposure under these agreements until an event triggering payment occurs. We do not expect to make any material payments under these agreements.

Sempra Energy

RBS Sempra Commodities
RBS is obligated to provide RBS Sempra Commodities with all growth capital, working-capital requirements and credit support. However, as a transitional measure, we continue to provide back-up guarantees for a portion of RBS Sempra Commodities’ trading obligations and for a credit facility with third party lenders pending novation (legal transfer) of the remaining trading obligations to RBS. Some of these back-up guarantees may continue for a prolonged period of time. RBS, which is controlled by the government of the United Kingdom, has fully indemnified us for any claims or losses in connection with these arrangements.
RBS Sempra Commodities’ net trading liabilities supported by Sempra Energy’s guarantees at September 30, 2009 were $722 million, consisting of guaranteed trading obligations net of collateral. The amount of guaranteed net trading liabilities varies from day to day with the value of the trading obligations and related collateral.
Sempra Energy also has guaranteed $344 million of $1.72 billion of RBS Sempra Commodities' commitments under a credit facility expiring September 29, 2010. Extensions of credit under the committed facility, which total $1.1 billion at September 30, 2009, are limited to and secured by a borrowing base consisting of receivables, inventories and other joint venture assets that are valued at varying percentages of current market value. At September 30, 2009, the gross market value of the borrowing base assets was $2.3 billion. The facility will be reduced and end as the borrowing base assets are transferred to RBS as established by the joint venture agreement.
OTHER GUARANTEES
Sempra Energy, Conoco Phillips (Conoco) and Kinder Morgan Energy Partners, L.P. (KMP) currently hold 25 percent, 24 percent and 51 percent ownership interests, respectively, in Rockies Express. Rockies Express is near completion of a natural gas pipeline to link natural gas producing areas in the Rocky Mountain region to the upper Midwest and the eastern United States. Rockies Express has a $2 billion, five-year credit facility expiring in 2011 that provides for revolving extensions of credit that are guaranteed by Sempra Energy, Conoco and KMP in proportion to their respective ownership percentages.
Borrowings under the facility bear interest at rates varying with market rates plus a margin that varies with the credit ratings of the lowest-rated guarantor. The facility requires each guarantor to comply with various financial and other covenants comparable to those contained in its senior unsecured credit facilities. In the case of Sempra Energy, the primary requirement is that we maintain a ratio of total indebtedness to total capitalization (as defined in the facility) of no more than 65 percent at the end of each quarter. Rockies Express had $1.9 billion of outstanding borrowings under this facility at September 30, 2009. The fair value to us of these guarantees is negligible.

SPECTRA ENERGY CORP.

15. Guarantees and Indemnifications

We have various financial guarantees and indemnifications which are issued in the normal course of business. As discussed below, these contracts include financial guarantees, stand-by letters of credit, debt guarantees, surety bonds and indemnifications. We enter into these arrangements to facilitate a commercial transaction with a third party by enhancing the value of the transaction to the third party. To varying degrees, these guarantees involve elements of performance and credit risk, which are not included on the Condensed Consolidated Balance Sheets. The possibility of having to honor our contingencies is largely dependent upon future operations of various subsidiaries, investees and other third parties, or the occurrence of certain future events.

We have issued performance guarantees to customers and other third parties that guarantee the payment and performance of other parties, including certain non-wholly owned entities. In connection with our spin-off from Duke Energy, certain guarantees that were previously issued by us have been assigned to, or replaced by, Duke Energy as guarantor in 2006. For any remaining guarantees of other Duke Energy obligations, Duke Energy has indemnified us against any losses incurred under these guarantee arrangements. The maximum potential amount of future payments we could have been required to make under these performance guarantees as of September 30, 2009 was approximately $431 million, which has been indemnified by Duke Energy, as discussed above. Approximately $5 million of the performance guarantees expire in 2009 and 2010, with the remaining performance guarantees expiring after 2010 or having no contractual expiration.

We have also issued joint and several guarantees to some of the Duke/Fluor Daniel (D/FD) project owners, guaranteeing the performance of D/FD under its engineering, procurement and construction contracts and other contractual commitments. D/FD is one of the entities transferred to Duke Energy in connection with our spin-off from Duke Energy. Substantially all of these guarantees have no contractual expiration and no stated maximum amount of future payments that we could be required to make. Fluor Enterprises Inc., as 50% owner in D/FD, has issued similar joint and several guarantees to the same D/FD project owners. In accordance with the D/FD partnership agreement, each of the partners is responsible for 50% of any payments to be made under those guarantees.

Westcoast Energy Inc. (Westcoast), a wholly owned subsidiary, has issued performance guarantees to third parties guaranteeing the performance of unconsolidated entities, such as equity method investments, and of entities previously sold by Westcoast to third parties. Those guarantees require Westcoast to make payment to the guaranteed third party upon the failure of such unconsolidated or sold entity to make payment under some of its contractual obligations, such as debt, purchase contracts and leases. Certain guarantees that were previously issued by Westcoast for obligations of entities that remained a part of Duke Energy are considered guarantees of third-party performance; however, Duke Energy has indemnified us against any losses incurred under these guarantee arrangements. The maximum potential amount of future payments Westcoast could have been required to make under those performance guarantees of non-wholly owned entities and third-party entities as of September 30, 2009 was $50 million. These guarantees have no contractual expiration.

We have entered into various indemnification agreements related to purchase and sale agreements and other types of contractual agreements with vendors and other third parties. These agreements typically cover environmental, tax, litigation and other matters, as well as breaches of representations, warranties and covenants. Typically, claims may be made by third parties for various periods of time, depending on the nature of the claim. Our potential exposure under these indemnification agreements can range from a specified amount, such as the purchase price, to an unlimited dollar amount, depending on the nature of the claim and the particular transaction. We are unable to estimate the total potential amount of future payments under these indemnification agreements due to several factors, such as the unlimited exposure under certain guarantees.

At September 30, 2009, the amounts recorded for the guarantees and indemnifications described above, including the indemnifications by Duke Energy to us, are not material, both individually and in the aggregate.

UNITED TECHNOLOGIES CORP /DE/

Note 10: Guarantees

We extend a variety of financial, market value and product performance guarantees to third parties. There have been no material changes to guarantees outstanding since December 31, 2008.

The changes in the carrying amount of service and product warranties and product performance guarantees for the nine months ended September 30, 2009 and 2008 are as follows:

(in millions of dollars)	2009		2008
Balance as of January 1	$	1,136	$	1,252
Warranties and performance guarantees issued		275		363
Settlements made		(312)		(457)
Other		(24)		1
Balance as of September 30	$	1,075	$	1,159

WINDSTREAM CORP

13.

Supplemental Guarantor Information:

In connection with the issuance of the 2013 Notes, the 2016 Notes, and the 2019 Notes (“the guaranteed notes”), certain of the Company’s wholly-owned subsidiaries (the “Guarantors”), including all former subsidiaries of Valor, provided guarantees of those debentures. These guarantees are full and unconditional as well as joint and several. Certain Guarantors may be subject to restrictions on their ability to distribute earnings to the Company. The remaining subsidiaries (the “Non-Guarantors”) of Windstream are not guarantors of the guaranteed notes. Following the acquisition of CTC, the guaranteed notes were amended to include certain subsidiaries of CTC as guarantors.

The following information presents condensed consolidated statements of income for the three and nine month periods ended September 30, 2009 and 2008, condensed consolidated balance sheets as of September 30, 2009 and December 31, 2008, and condensed consolidated statements of cash flows for the nine months ended September 30, 2009 and 2008 of the parent company, the Guarantors, and the Non-Guarantors. Investments in consolidated subsidiaries are held primarily by the parent company in the net assets of its subsidiaries and have been presented using the equity method of accounting.


	Condensed Consolidated Statement of Income (Unaudited) Three Months Ended September 30, 2009
(Millions)	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues and sales:
Service revenues	$	—		$	185.1		$	522.1		$	(2.3	)	$	704.9
Product sales		—			16.8			12.6			—			29.4

Total revenues and sales		—			201.9			534.7			(2.3	)		734.3
Costs and expenses:
Cost of services		—			62.4			192.4			(1.8	)		253.0
Cost of products sold		—			15.4			10.6			—			26.0
Selling, general, administrative and other		—			20.3			67.8			(0.5	)		87.6
Depreciation and amortization		—			47.8			86.0			—			133.8
Merger, integration and restructuring		—			3.0			5.5			—			8.5

Total costs and expenses		—			148.9			362.3			(2.3	)		508.9
Operating income		—			53.0			172.4			—			225.4

Earnings (losses) from consolidated subsidiaries		134.0			17.8			—			(151.8	)		—
Other income (expense), net		(1.7	)		27.5			(28.0	)		—			(2.2	)
Intercompany interest income (expense)		8.8			(3.8	)		(5.0	)		—			—
Interest expense		(95.3	)		(1.6	)		(0.6	)		—			(97.5	)

Income before income taxes		45.8			92.9			138.8			(151.8	)		125.7
Income tax expense (benefit)		(34.2	)		27.4			52.5			—			45.7

Net income	$	80.0		$	65.5		$	86.3		$	(151.8	)	$	80.0


	Condensed Consolidated Statement of Income (Unaudited) Three Months Ended September 30, 2008
(Millions)	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues and sales:
Service revenues	$	—		$	189.9		$	553.3		$	(1.3	)	$	741.9
Product sales		—			35.7			16.5			—			52.2

Total revenues and sales		—			225.6			569.8			(1.3	)		794.1
Costs and expenses:
Cost of services		—			59.6			197.3			(1.0	)		255.9
Cost of products sold		—			33.7			15.8			—			49.5
Selling, general, administrative and other		—			29.4			64.2			(0.3	)		93.3
Depreciation and amortization		—			42.2			81.6			—			123.8
Merger, integration and restructuring		—			0.2			0.8			—			1.0

Total costs and expenses		—			165.1			359.7			(1.3	)		523.5
Operating income		—			60.5			210.1			—			270.6

Earnings (losses) from consolidated subsidiaries		173.9			32.7			—			(206.6	)		—
Other income (expense), net		(0.5	)		0.6			0.4			—			0.5
Intercompany interest income (expense)		(7.9	)		(3.1	)		11.0			—			—
Interest expense		(101.0	)		(1.6	)		(0.7	)		—			(103.3	)

Income from continuing operations before income taxes		64.5			89.1			220.8			(206.6	)		167.8
Income tax expense (benefit)		(41.4	)		21.4			83.5			—			63.5

Income from continuing operations		105.9			67.7			137.3			(206.6	)		104.3
Discontinued operations, net		—			—			1.6			—			1.6

Net income	$	105.9		$	67.7		$	138.9		$	(206.6	)	$	105.9


	Condensed Consolidated Statement of Income (Unaudited) Nine Months Ended September 30, 2009
(Millions)	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues and sales:
Service revenues	$	—		$	559.8		$	1,586.5		$	(6.1	)	$	2,140.2
Product sales		—			66.2			35.8			—			102.0

Total revenues and sales		—			626.0			1,622.3			(6.1	)		2,242.2
Costs and expenses:
Cost of services		—			179.1			579.4			(4.6	)		753.9
Cost of products sold		—			59.5			30.4			—			89.9
Selling, general, administrative and other		—			65.4			203.1			(1.5	)		267.0
Depreciation and amortization		—			143.2			255.9			—			399.1
Merger, integration and restructuring		—			3.1			6.8			—			9.9

Total costs and expenses		—			450.3			1,075.6			(6.1	)		1,519.8
Operating income		—			175.7			546.7			—			722.4

Earnings (losses) from consolidated subsidiaries		427.5			58.7			—			(486.2	)		—
Other income (expense), net		0.9			82.5			(84.2	)		—			(0.8	)
Intercompany interest income (expense)		26.8			(11.4	)		(15.4	)		—			—
Interest expense		(288.6	)		(4.7	)		(1.7	)		—			(295.0	)

Income before income taxes		166.6			300.8			445.4			(486.2	)		426.6
Income tax expense (benefit)		(92.4	)		91.3			168.7			—			167.6

Net income	$	259.0		$	209.5		$	276.7		$	(486.2	)	$	259.0


	Condensed Consolidated Statement of Income (Unaudited) Nine Months Ended September 30, 2008
(Millions)	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Revenues and sales:
Service revenues	$	—		$	570.7		$	1,687.4		$	(3.4	)	$	2,254.7
Product sales		—			94.7			44.6			—			139.3

Total revenues and sales		—			665.4			1,732.0			(3.4	)		2,394.0
Costs and expenses:
Cost of services		—			177.4			585.3			(2.5	)		760.2
Cost of products sold		—			87.6			40.4			—			128.0
Selling, general, administrative and other		—			74.0			199.9			(0.9	)		273.0
Depreciation and amortization		—			127.3			241.4			—			368.7
Merger, integration and restructuring		—			0.9			7.4			—			8.3

Total costs and expenses		—			467.2			1,074.4			(3.4	)		1,538.2
Operating income		—			198.2			657.6			—			855.8

Earnings (losses) from consolidated subsidiaries		539.7			77.0			—			(616.7	)		—
Other income (expense), net		1.2			8.9			(1.0	)		—			9.1
Intercompany interest income (expense)		(30.7	)		(11.0	)		41.7			—			—
Interest expense		(305.0	)		(4.8	)		(2.1	)		—			(311.9	)

Income from continuing operations before income taxes		205.2			268.3			696.2			(616.7	)		553.0
Income tax expense (benefit)		(126.4	)		72.3			263.0			—			208.9

Income from continuing operations		331.6			196.0			433.2			(616.7	)		344.1
Discontinued operations, net		—			—			(12.5	)		—			(12.5	)

Net income	$	331.6		$	196.0		$	420.7		$	(616.7	)	$	331.6


	Condensed Consolidated Balance Sheet (Unaudited) As of September 30, 2009
(Millions)	Parent			Guarantors			Non- Guarantors			Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	278.6		$	0.4		$	11.0			—		$	290.0
Accounts receivable (less allowance for doubtful accounts of $16.5)		0.5			98.7			195.5			—			294.7
Inventories		—			14.2			9.3			—			23.5
Deferred income taxes		8.1			—			8.4			—			16.5
Prepaid expenses and other		20.9			6.5			26.5			—			53.9

Total current assets		308.1			119.8			250.7			—			678.6
Investments in consolidated subsidiaries		8,096.6			904.5			—			(9,001.1	)		—
Goodwill and other intangibles		0.1			1,778.4			1,492.5			—			3,271.0
Net property, plant and equipment		7.6			1,053.0			2,691.2			—			3,751.8
Other assets		28.3			11.4			27.0			—			66.7
Total Assets	$	8,440.7		$	3,867.1		$	4,461.4			$ (9,001.1)		$	7,768.1

Liabilities and Shareholders’ Equity
Current Liabilities:
Current maturities of long-term debt	$	14.0		$	0.1		$	10.0			—		$	24.1
Current portion of interest rate swaps		47.3			—			—			—			47.3
Accounts payable		10.5			25.4			96.0			—			131.9
Affiliates payable, net		2,909.6			40.3			(2,949.9	)		—			—
Advance payments and customer deposits		—			4.6			87.4			—			92.0
Accrued dividends		108.8			—			—			—			108.8
Accrued taxes		(47.1	)		48.5			41.7			—			43.1
Accrued interest		59.2			3.4			1.5			—			64.1
Other current liabilities		11.1			5.1			44.6			—			60.8

Total current liabilities		3,113.4			127.4			(2,668.7	)		—			572.1
Long-term debt		5,059.5			99.6			39.9			—			5,199.0
Deferred income taxes		(49.9	)		550.9			676.7			—			1,177.7
Other liabilities		127.9			12.8			488.8			—			629.5
Total liabilities		8,250.9			790.7			(1,463.3	)		—			7,578.3
Commitments and Contingencies (See Note 7)
Shareholders’ Equity:
Common stock		—			—			45.8			(45.8	)		—
Additional paid-in capital		63.6			1,764.4			2,619.1			(4,383.5	)		63.6
Accumulated other comprehensive loss		(292.8	)		(4.3	)		(216.6	)		220.9			(292.8	)
Retained earnings		419.0			1,316.3			3,476.4			(4,792.7	)		419.0

Total shareholders’ equity		189.8			3,076.4			5,924.7			(9,001.1	)		189.8
Total Liabilities and Shareholders’ Equity	$	8,440.7		$	3,867.1		$	4,461.4		$	(9,001.1	)	$	7,768.1


	Condensed Consolidated Balance Sheet (Unaudited) As of December 31, 2008
(Millions)	Parent			Guarantors		Non- Guarantors			Eliminations			Consolidated
Assets
Current Assets:
Cash and cash equivalents	$	282.8		$	1.0	$	12.8		$	—		$	296.6
Accounts receivable (less allowance for doubtful accounts of $16.3)		0.3			105.5		210.8			—			316.6
Inventories		—			21.3		9.5			—			30.8
Deferred income taxes		22.4			—		8.4			—			30.8
Prepaid expenses and other		2.3			4.2		27.4			—			33.9

Total current assets		307.8			132.0		268.9			—			708.7
Investments in consolidated subsidiaries		7,637.4			460.5		(1.4	)		(8,096.5	)		—
Goodwill and other intangibles		0.1			1,826.2		1,504.1			—			3,330.4
Net property, plant and equipment		7.6			1,103.6		2,785.9			—			3,897.1
Other assets		31.4			11.4		30.3			—			73.1
Total Assets	$	7,984.3		$	3,533.7	$	4,587.8			$ (8,096.5)		$	8,009.3

Liabilities and Shareholders’ Equity
Current Liabilities:
Current maturities of long-term debt	$	14.0		$	0.3	$	10.0		$	—		$	24.3
Current portion of interest rate swaps		40.5			—		—			—			40.5
Accounts payable		10.2			83.0		40.8			—			134.0
Affiliates payable, net		2,155.1			287.3		(2,442.4	)		—			—
Advance payments and customer deposits		—			8.7		85.3			—			94.0
Accrued dividends		109.9			—		—			—			109.9
Accrued taxes		(30.7	)		23.3		55.4			—			48.0
Accrued interest		135.8			1.7		0.9			—			138.4
Other current liabilities		15.7			13.2		47.3			—			76.2

Total current liabilities		2,450.5			417.5		(2,202.7	)		—			665.3
Long-term debt		5,218.8			99.6		39.8			—			5,358.2
Deferred income taxes		(92.7	)		519.5		643.8			—			1,070.6
Other liabilities		155.4			15.5		492.0			—			662.9
Total liabilities		7,732.0			1,052.1		(1,027.1	)