Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

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Item 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

COMMODITY PRICE RISK

We are exposed to market risks related to the volatility in the price of crude oil, refined products (primarily gasoline and distillate), grain (primarily corn), and natural gas used in our operations. To reduce the impact of price volatility on our results of operations and cash flows, we use commodity derivative instruments, including swaps, futures, and options to hedge:


•	inventories and firm commitments to purchase inventories generally for amounts by which our current year inventory levels (determined on a last-in, first-out (LIFO) basis) differ from our previous year-end LIFO inventory levels and


•	forecasted feedstock and refined product purchases, refined product sales, natural gas purchases, and corn purchases to lock in the price of those forecasted transactions at existing market prices that we deem favorable.

We use the futures markets for the available liquidity, which provides greater flexibility in transacting our hedging and trading operations. We use swaps primarily to manage our price exposure. We also enter into certain commodity derivative instruments for trading purposes to take advantage of existing market conditions related to future results of operations and cash flows.

Our positions in commodity derivative instruments are monitored and managed on a daily basis by a risk control group to ensure compliance with our stated risk management policy that has been approved by our board of directors.

The following sensitivity analysis includes all positions at the end of the reporting period with which we have market risk (in millions):



	Derivative Instruments Held For
	Non-Trading Purposes			Trading Purposes
December 31, 2014:
Gain (loss) in fair value resulting from:
10% increase in underlying commodity prices	$	(127	)	$	(2	)
10% decrease in underlying commodity prices	126			7

December 31, 2013:
Gain (loss) in fair value resulting from:
10% increase in underlying commodity prices	(91		)	3
10% decrease in underlying commodity prices	91			(2		)

See Note 21 of Notes to Consolidated Financial Statements for notional volumes associated with these derivative contracts as of December 31, 2014.

COMPLIANCE PROGRAM PRICE RISK

We are exposed to market risk related to the volatility in the price of biofuel credits needed to comply with various governmental and regulatory programs. To manage this risk, we enter into contracts to purchase these credits when prices are deemed favorable. Some of these contracts are derivative instruments; however, we elect the normal purchase exception and do not record these contracts at their fair values. As of December 31, 2014, there was no gain or loss in the fair value of derivative instruments that would result from a 10 percent increase or decrease in the underlying price of the contracts. See Note 21 of Notes to Consolidated Financial Statements for a discussion about these compliance programs.

INTEREST RATE RISK

The following table provides information about our debt instruments, excluding capital lease obligations (dollars in millions), the fair values of which are sensitive to changes in interest rates. Principal cash flows and related weighted-average interest rates by expected maturity dates are presented. We had no interest rate derivative instruments outstanding as of December 31, 2014 and 2013.



	December 31, 2014
	Expected Maturity Dates
	2015			2016			2017			2018			2019			There- after			Total			Fair Value
Debt:
Fixed rate	$	475		$	—		$	950		$	—		$	750		$	4,074		$	6,249		$	7,436
Average interest rate	5.2		%	—		%	6.4		%	—		%	9.4		%	6.9		%	7.0		%
Floating rate	$	126		$	—		$	—		$	—		$	—		$	—		$	126		$	126
Average interest rate	2.0		%	—		%	—		%	—		%	—		%	—		%	2.0		%



	December 31, 2013
	Expected Maturity Dates
	2014			2015			2016			2017			2018			There- after			Total			Fair Value
Debt:
Fixed rate	$	200		$	475		$	—		$	950		$	—		$	4,824		$	6,449		$	7,559
Average interest rate	4.8		%	5.2		%	—		%	6.4		%	—		%	7.3		%	6.9		%
Floating rate	$	100		$	—		$	—		$	—		$	—		$	—		$	100		$	100
Average interest rate	0.9		%	—		%	—		%	—		%	—		%	—		%	0.9		%

FOREIGN CURRENCY RISK

As of December 31, 2014, we had commitments to purchase $377 million of U.S. dollars. Our market risk was minimal on the contracts, as the majority of them matured on or before January 31, 2015, resulting in a gain of $12 million in the first quarter of 2015.

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