of $1.5 billion and higher employee compensation and benefits of $700 million. In part, increased fuel purchases in 2011 reflected a new commercial arrangement that replaced a prior product exchange agreement for upstream operations in Indonesia.

     Exploration expenses in 2012 increased from 2011 mainly due to higher geological and geophysical costs and well write-offs.

     Exploration expenses in 2011 increased from 2010 mainly due to higher geological and geophysical costs, partly offset by lower well write-offs.

     The increase in 2012 from 2011 was mainly due to higher depreciation rates for certain oil and gas producing fields, partially offset by lower production levels. The decrease in 2011 from 2010 mainly reflected lower production levels and the 2011 sale of the Pembroke Refinery, partially offset by higher depreciation rates for certain oil and gas producing fields.

     Taxes other than on income decreased in 2012 from 2011 primarily due to lower import duties in the United Kingdom reflecting the sale of the company’s refining and marketing assets in the United Kingdom and Ireland in 2011. Partially offsetting the decrease were excise taxes associated with consolidation of Star Petroleum Refining Company beginning June 2012. Taxes other than on income decreased in 2011 from 2010 primarily due to lower import duties in the United Kingdom reflecting the 2011 sale of the Pembroke Refinery and other downstream assets, partly offset by higher excise taxes in the company’s South Africa downstream operations.

     Effective income tax rates were 43 percent in 2012, 43 percent  in 2011 and 40 percent in 2010. The rate was unchanged between 2012 and 2011. The impact of lower effective tax rates in international upstream operations were offset by foreign currency remeasurement impacts between periods. For international upstream, the lower effective tax rates in the current period were driven primarily by the effects of asset sales, one-time tax benefits and reduced withholding taxes, which were partially offset by a lower utilization of tax credits during the year. The rate was higher in 2011 than in 2010 primarily due to higher effective tax rates in certain international upstream jurisdictions. The higher international upstream effective tax rates were driven primarily by lower utilization of non-U.S. tax credits in 2011 and the effect of changes in income tax rates between periods, which were partially offset by foreign currency remeasurement impacts.

Liquidity and Capital Resources

Cash, cash equivalents, time deposits and marketable securities Total balances were $21.9 billion and $20.1 billion at December 31, 2012 and 2011, respectively. Cash provided by operating activities in 2012 was $38.8 billion, compared with $41.1 billion in 2011 and $31.4 billion in 2010. Cash provided by operating activities was net of contributions to employee pension plans of approximately $1.2 billion, $1.5 billion and $1.4 billion in 2012, 2011 and 2010, respectively. Cash provided by investing activities included proceeds and deposits related to asset sales of $2.7 billion in 2012, $3.5 billion in 2011, and $2.0 billion in 2010.