The Corporation produced 95 million barrels of crude oil and natural gas liquids and 249 million Mcf of natural gas in 2003. The Corporation’s crude oil and natural gas hedging activities included commodity futures and swap contracts. At December 31, 2003, crude oil hedges maturing in 2004 and 2005 cover 93 million barrels of crude oil production (91million barrels of crude oil at December 31, 2002). The Corporation has natural gas hedges maturing in 2004 cov- ering 18 million Mcf of natural gas production in the United States at December 31, 2003 (35 million Mcf of natural gas at December 31, 2002). the change in fair value is included in income currently. The Corporation has $384 million of notional value foreign currency forward contracts maturing in 2004 and 2005 ($307 million at December 31, 2002). Notional amounts do not quantify risk or represent assets or liabilities of the Cor- poration, but are used in the calculation of cash settlements under the contracts. The fair values of the foreign currency forward contracts recorded by the Corporation were receiv- ables of $40 million at December 31, 2003 and $18 million at December 31, 2002.  The Corporation also has $229 million in letters of credit outstanding at December 31, 2003 ($149 million at Decem- ber 31, 2002). Of the total letters of credit outstanding at December 31, 2003, $7 million represents contingent liabili- ties; the remaining $222 million relates to liabilities recorded on the balance sheet. Since the contracts described above are designated as hedges and correlate to price movements of crude oil and natural gas, any gains or losses resulting from market changes will be offset by losses or gains on the Corpora- tion’s production. At December 31, 2003, net after tax deferred losses in accumulated other comprehensive income from the Corporation’s crude oil and natural gas hedging contracts expiring through 2005 were $229 million ($352 million before income taxes), including $196 million of unrealized losses. Of the net after tax deferred loss, $185 million matures during 2004. At December 31, 2002, net after-tax deferred losses were $91 million ($141 million before income taxes), including $71 million of unrealized losses. Fair Value Disclosure: The Corporation estimates the fair value of its fixed-rate notes receivable and debt generally using discounted cash flow analysis based on current inter- est rates for instruments with similar maturities. Foreign cur- rency exchange contracts are valued based on current termination values or quoted market prices of comparable contracts. The Corporation’s valuation of commodity con- tracts considers quoted market prices where applicable. In the absence of quoted market prices, the Corporation val- ues contracts at fair value considering time value, volatility of the underlying commodities and other factors. In its energy marketing business, the Corporation has entered into cash flow hedges to fix the purchase prices of natural gas, heating oil, residual fuel oil and electricity. At December 31, 2003, the net after tax deferred gains in accu- mulated other comprehensive income from these contracts, expiring through 2007, were $45 million ($70 million before income taxes). Substantially all of the deferred gains will be recognized in 2004. The following table presents the year-end fair values of energy commodities and derivative financial instruments used in non-trading and trading activities: Commodity Trading: The Corporation, principally through a consolidated partnership, trades energy commodities, including futures, forwards, options and swaps, based on expectations of future market conditions. The Corporation’s income before income taxes from trading activities, includ- ing its share of the earnings of the trading partnership amounted to $30 million in 2003, $6 million in 2002 and $72 million in 2001. Other Financial Instruments: Foreign currency contracts are used to protect the Corporation from fluctuations in exchange rates. The Corporation enters into foreign cur- rency contracts, which are not designated as hedges, and 54 Fair Value Millions of dollars,  At Dec. 31 asset (liability) 2003 2002 Commodities $ GLYPH<209> $ 27 Futures and forwards Assets 219 370 Liabilities (218) (378) Options Held 975 65 Written (948) (27) Swaps Assets 1,157 1,323 Liabilities (1,384) (1,394)