Over the past decade, there has been a debate over the correct form of the Cassie Baxter equation, which describes the expected contact angle of a liquid drop on a heterogeneous surface. The original Cassie-Baxter equation uses an area fraction of each solid phase calculated over the entirety of the surface, and its derivation is based on an assumption not all surfaces necessarily satisfy. Herein, we introduce fundamental Gibbsian composite-system thermodynamics as a new approach for deriving the complete set of equilibrium conditions for a liquid drop resting on a heterogeneous multiphase solid substrate. One of the equilibrium conditions is a form of the Cassie-Baxter equation that uses a line fraction determined at the contact line outlining the perimeter of the solid-liquid contact area. We elucidate the practical implications of using the line fraction for common patterns of heterogeneities.