What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2023-02-16 compared with 2022-02-17 · 2863 added, 3633 removed, 367 unchanged (95% of the section changed)

This section is long enough that the comparison stopped early. What follows is partial, and the remainder is not necessarily unchanged.

3 unchanged sentences

Reports of Management

Reports of Independent Registered Public Accounting Firm

Reports of Independent Registered Public Accounting Firm (PCAOB ID # 42 )

Consolidated Income Statement for the years ended December 31, 2022 , 2021 and 2020

8 unchanged sentences

Oil and Gas Operations

ConocoPhillips

ConocoPhillips 2022 10-K

Reports of Management

Management prepared, and is responsible

the consolidated financial statements

and the other information

appearing in this annual report.

The consolidated financial statements

present fairly the company’s

position, results of operations and

cash flows in conformity with accounting

principles generally accepted in the

United States.

In preparing its consolidated financial

statements, the company

includes amounts that are based on

estimates and judgments management

believes are reasonable under the circumstances.

The company’s financial

statements have

been audited by Ernst & Young

an independent registered public accounting

firm appointed

by the Audit and Finance Committee of the Board of Directors

and ratified by stockholders.

Management has

made available to Ernst & Young

LLP all of the company’s financial records

and related data, as well as the minutes

of stockholders’ and directors’

Assessment of Internal Control Over

Financial Reporting

Management is also responsible for establishing

and maintaining adequate internal

control over financial

ConocoPhillips’ internal control

system was designed to

provide reasonable assurance to

the company’s

management and directors regarding

the preparation and fair presentatio

of published financial statements.

All internal control systems,

no matter how well designed, have

inherent limitations.

Therefore, even those

systems determined to

be effective can provide

only reasonable assurance with respect

to financial statement

preparation and presentation.

Management assessed the effectiveness

of the company’s internal

control over financial reporting as

December 31, 2021.

In making this assessment, it used the criteria set forth

by the Committee of Sponsoring

Organizations of the Treadway

Commission in

Internal Control—Integrated

Framework (2013)

assessment, we believe the company’s

internal control over financial reporting

was effective as of

December 31, 2021.

Management’s assessment

of, and conclusion on,

the effectiveness of internal control

financial reporting did not include the internal controls

of the assets acquired from Shell Enterprise LLC

December 2021.

The total assets acquired represented

approximately 10 percent

of the company’s consolidated

total assets at December 31, 2021.

Ernst & Young

LLP has issued an audit report on the company’s

internal control over financial reporting

December 31, 2021, and their report is included herein.

/s/ William L.

Management prepared, and is responsible for, the consolidated financial statements and the other information appearing in this annual report.

The consolidated financial statements present fairly the company’s financial position, results of operations and cash flows in conformity with accounting principles generally accepted in the United States.

In preparing its consolidated financial statements, the company includes amounts that are based on estimates and judgments management believes are reasonable under the circumstances.

The company’s financial statements have been audited by Ernst & Young LLP, an independent registered public accounting firm appointed by the Audit and Finance Committee of the Board of Directors and ratified by stockholders.

Management has made available to Ernst & Young LLP all of the company’s financial records and related data, as well as the minutes of stockholders’ and directors’ meetings.

Assessment of Internal Control Over Financial Reporting

Management is also responsible for establishing and maintaining adequate internal control over financial reporting.

ConocoPhillips’ internal control system was designed to provide reasonable assurance to the company’s management and directors regarding the preparation and fair presentation of published financial statements.

All internal control systems, no matter how well designed, have inherent limitations.

Therefore, even those systems determined to be effective can provide only reasonable assurance with respect to financial statement preparation and presentation.

Management assessed the effectiveness of the company’s internal control over financial reporting as of December 31, 2022.

In making this assessment, it used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission in Internal Control—Integrated Framework (2013).

Based on our assessment, we believe the company’s internal control over financial reporting was effective as of December 31, 2022.

Ernst & Young LLP has issued an audit report on the company’s internal control over financial reporting as of December 31, 2022, and their report is included herein.

Lance /s/ William L.

Lance William L.

Chief Executive Officer

1 unchanged sentence

Chief Financial Officer

ConocoPhillips

Report of Independent Registered

Public Accounting Firm

To the Stockholders

and the Board of Directors of ConocoPhillips

ConocoPhillips 2022 10-K

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of ConocoPhillips

Opinion on the Financial Statements

We have audited the

accompanying consolidated

balance sheets of ConocoPhillips (the Company) as

31, 2021 and 2020, the related consolidated

income statement, consolidated

statements of comprehensive

income, changes in equity and cash flows for

each of the three years in the period ended December 31, 2021, and

the related notes (collectively referred

to as the “consolidated

financial statements”).

In our opinion,

consolidated financial statements

present fairly,

in all material respects, the financial position of the Company

of December 31, 2021 and 2020, and the results of its operations

and its cash flows for each of the three years

the period ended December 31, 2021, in conformity with

generally accepted accounting

We also have audited,

in accordance with the standards of the Public

Company Accounting Oversight

(United States) (PCAOB), the Company’s

internal control over financial reporting

as of December 31, 2021, based

on criteria established in Internal

Control–Integrated

Framework issued by the Committee

of Sponsoring

Organizations of the Treadway

Commission (2013 framework) and our report

dated February 17, 2022, expressed

an unqualified opinion thereon.

We have audited the accompanying consolidated balance sheets of ConocoPhillips (the Company) as of December 31, 2022 and 2021, the related consolidated income statement, consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S.

generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) and our report dated February 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

These financial statements are

the responsibility of the Company’s

Our responsibility is to express

opinion on the Company’s financial statements

based on our audits.

We are a public

accounting firm registered

with the PCAOB and are required to

be independent with respect to the Company

in accordance with the U.S.

federal securities laws and the applicable

rules and regulations of the Securities and Exchange

Commission and the

We conducted our audits

in accordance with the standards of the PCAOB.

Those standards require that

and perform the audit to obtain reasonable

assurance about whether the financial statements

are free of material

misstatement, whether due to

error or fraud.

Our audits included performing

procedures to assess the risks

material misstatement

of the financial statements, whether

due to error or fraud, and performing

procedures that

respond to those risks.

Such procedures

included examining, on a test basis, evidence

regarding the amounts and

disclosures in the financial statements.

Our audits also included evaluating the accounting

principles used and

significant estimates made by management,

as well as evaluating the overall

presentation of the financial

believe that our audits provide

a reasonable basis for our opinion.

These financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on the Company’s financial statements based on our audits.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that our audits provide a reasonable basis for our opinion.

Critical Audit Matters

The critical audit matters communicated

below are matters

arising from the current period audit of the

consolidated financial statements

that were communicated

or required to be communicated

to the Audit and

Finance Committee and that:

to accounts or disclosures that

are material to the consolidated financial

statements and (2) involved

our especially challenging, subjective or complex judgments.

The communication of

critical audit matters does not

alter in any way our opinion on the consolidated

financial statements, taken

whole, and we are not, by communicating the

critical audit matters below,

providing separate opinions

critical audit matters or on the accounts

or disclosures to which they relate.

ConocoPhillips

Accounting for asset retirement

obligations for certain offshore properties

Description of

At December 31, 2021, the asset retirement

obligation (ARO) balance totaled

$5.9 billion.

further described in Note 8, the Company records

AROs in the period in which they are

incurred, typically when the asset is installed

at the production location.

The estimation

obligations related to

certain offshore assets requires

significant judgment given the

magnitude and higher estimation uncertainty

related to plugging and abandonment of wells

and removal and disposal of offshore

oil and gas platforms, facilities

and pipelines costs

(collectively,

removal costs).

Furthermore, given

certain of these assets are nearing the end

of their operations, the impact of changes in these AROs

may result in a material impact to

earnings given the relatively short remainin

useful lives of the assets.

Auditing the Company’s AROs for

the obligations identified above is

complex and highly

judgmental due to the significant

estimation required by management

in determining the

In particular,

the estimates were sensitive to

significant subjective assumptions

such as removal cost estimates

and end of field life, which are affected

by expectations

about future market or economic conditions.

Addressed the

Matter in Our

We obtained an understanding,

evaluated the design and tested

the operating effectiveness

of the Company’s internal

controls over its ARO estimation

process, including management’s

review of the significant assumptions that

have a material effect on the

determination of the

tested management’s controls

over the completeness and accuracy of

the financial data used in the valuation.

the AROs for the obligations

identified above, our audit procedures included,

others, assessing the significant assumptions

and inputs used in the valuation, including

removal cost estimates

and end of field life assumptions.

removal cost estimates

by comparing to settlements and

recent removal activities and costs.

We also compared end of field life

assumptions to production forecasts.

Depreciation, depletion and amortization of proved oil and

gas properties, plants and

Description of

At December 31, 2021, the net book value

of the Company’s proved

oil and gas properties,

plants and equipment (PP&E) was $52 billion, and

depreciation, depletion and amortization

(DD&A) expense was $7.0 billion for the year

As described in Note 1, under the

successful efforts method of accounting,

DD&A of PP&E on producing hydrocarbon

properties and steam-assisted

gravity drainage facilities

and certain pipeline and liquified

natural gas assets (those which are

expected to have a declining utilization

determined by the unit-of-production

The unit-of-production

method uses proved

oil and gas reserves, as estimated

by the Company’s internal

reservoir engineers.

Proved oil and gas reserve

estimates are based on geological and

engineering assessments

of in-place hydrocarbon volumes,

the production plan, historical extraction

processing yield factors,

installed plant operating capacity

and approved operating limits.

Significant judgment is required by

the Company’s internal

reservoir engineers in evaluating

geological and engineering data when estimating

proved oil and gas reserves.

proved oil and gas reserves also

requires the selection of inputs, including oil and gas

assumptions, future operating and

capital costs assumptions and tax

rates by jurisdiction,

among others.

Because of the complexity involved

in estimating proved oil and gas

management also used an independent petroleum

engineering consulting firm to perform a

review of the processes and controls

used by the Company’s internal

reservoir engineers to

determine estimates of proved

oil and gas reserves.

ConocoPhillips

Auditing the Company’s DD&A calculation

is complex because of the use of the work of the

internal reservoir engineers and the

independent petroleum engineering consulting firm

the evaluation of management’s

determination of the inputs described above used by

internal reservoir engineers in estimating

proved oil and gas reserves.

Addressed the

Matter in Our

We obtained an understanding,

evaluated the design and tested

the operating effectiveness

of the Company’s internal

controls over its processes

to calculate DD&A, including

management’s controls

over the completeness and accuracy

of the financial data provided

to the internal reservoir engineers for

use in estimating proved oil and

gas reserves.

Our audit procedures included, among others,

evaluating the professional

qualifications and

objectivity of the Company’s internal

reservoir engineers primarily responsible

overseeing the preparation

of the proved oil and gas reserve

estimates and the independent

petroleum engineering consulting firm used to

review the Company’s

processes and

In addition, in assessing whether we can

use the work of the internal reservoir

engineers, we evaluated the completeness

and accuracy of the financial data and inputs

described above used by the internal reservoir

engineers in estimating proved

reserves by agreeing them to source

documentation and we identified and

corroborative and contrary

We also tested the accuracy

of the DD&A calculation,

including comparing the proved oil and gas

reserve amounts used in the calculation to

Company’s reserve report.

Valuation and recognition of

proved and unproved oil & gas properties acquired in

business combinations

Description of

During 2021, the Company closed its acquisition of Concho Resources

and its acquisition

of Permian assets from Shell Enterprises

LLC resulting in the recognition of proved

unproved oil and gas properties

within net properties, plants and equipment of $18.9 billion

and $8.6 billion, respectively.

As described in Note 3, the transactions were

accounted for as

business combinations under FASB

ASC 805 using the acquisition method, which requires

assets acquired and liabilities assumed to be measured

at their acquisition date fair values.

Oil and gas properties were valued

using a discounted cash flow approach

based on market

participant assumptions and third party valuation

experts were engaged by the Company

prepare fair value estimates.

Significant inputs to the valuation

of proved and unproved oil

and gas properties include estimates

of future commodity price assumptions and

profiles of reserve estimates, the

pace of drilling plans, future operating costs

rates using a market

-based weighted average cost

Auditing the Company's accounting for

its valuation of proved and unproved

properties is complex and considerably

judgmental due to the significant estimation

required by management of reserves

and resources associated with the acquired

the sensitivity of significant assumptions used in determining

the fair value.

In evaluating

the reasonableness of management’s

estimates and assumptions used, the audit

procedures performed required

a high degree of auditor judgment and additional effort,

including involving internal specialists.

Addressed the

Matter in Our

We obtained an understanding,

evaluated the design and tested

the operating effectiveness

of the Company’s internal

controls over its process

to estimate the fair value of the acquired

proved and unproved

oil and gas properties, including management’s

review of the

significant assumptions used as inputs to

the fair value calculations and final recording

the analysis.

ConocoPhillips

the estimated fair value of the acquired

proved and unproved

oil and gas properties,

our audit procedures included, among others,

evaluating the significant assumptions

and testing the completeness and accuracy

of the underlying data supporting the significant

For example, we compared

certain significant assumptions

to current industry,

third-party data and historical

results for reasonableness.

also performed sensitivity

analyses of significant assumptions, to

evaluate the extent of their impact to the

In addition, we involved

our valuation specialists to assist

with certain significant

assumptions included in the fair value estimate.

Furthermore, we evaluated

the professional

qualifications and objectivity of the third party

valuation specialist engaged by the Company

to prepare the fair value of the acquired

proved and unproved oil and

gas properties.

/s/ Ernst & Young

We have served as ConocoPhillips’

auditor since 1949.

The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the Audit and Finance Committee and that:

(1) relate to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective or complex judgments.

The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

ConocoPhillips 2022 10-K

Accounting for asset retirement obligations for certain offshore properties

Description of the Matter At December 31, 2022, asset retirement obligations (ARO) totaled $6.4 billion.

As further described in Note 8, the Company records ARO in the period in which they are incurred, typically when the asset is installed at the production location.

The estimation of obligations related to certain offshore assets requires significant judgment given the magnitude and higher estimation uncertainty related to plugging and abandonment of wells and removal and disposal of offshore oil and gas platforms and facilities (collectively, removal costs).

Furthermore, as certain of these assets are nearing the end of their operations, the impact of changes in these ARO may result in a material impact to earnings given the relatively short remaining useful lives of the assets.

Auditing the Company’s ARO for the obligations identified above is complex and highly judgmental due to the significant estimation required by management in determining the obligations.

In particular, the estimates were sensitive to significant subjective assumptions such as removal cost estimates and end of field life, which are affected by expectations about future market or economic conditions.

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s internal controls over its ARO estimation process, including management’s review of the significant assumptions that have a material effect on the determination of the obligations.

We also tested management’s controls over the completeness and accuracy of the financial data used in the valuation.

To test the ARO for the obligations identified above, our audit procedures included, among others, assessing the significant assumptions and inputs used in the valuation, including removal cost estimates and end of field life assumptions.

For example, we evaluated removal cost estimates by comparing to settlements and recent removal activities and costs.

We also compared end of field life assumptions to production forecasts.

Depreciation, depletion and amortization of proved oil and gas properties, plants and equipment

Description of the Matter At December 31, 2022, the net book value of the Company’s proved oil and gas properties, plants and equipment (PP&E) was $55 billion, and depreciation, depletion and amortization (DD&A) expense was $7.3 billion for the year then ended.

As described in Note 1, under the successful efforts method of accounting, DD&A of PP&E on producing hydrocarbon properties and steam-assisted gravity drainage facilities and certain pipeline and liquified natural gas assets (those which are expected to have a declining utilization pattern) are determined by the unit-of-production method.

The unit-of-production method uses proved oil and gas reserves, as estimated by the Company’s internal reservoir engineers.

Proved oil and gas reserves estimates are based on geological and engineering assessments of in-place hydrocarbon volumes, the production plan, historical extraction recovery and processing yield factors, installed plant operating capacity and approved operating limits.

Significant judgment is required by the Company’s internal reservoir engineers in evaluating geological and engineering data when estimating proved oil and gas reserves.

Estimating proved oil and gas reserves also requires the selection of inputs, including oil and gas price assumptions, future operating and capital costs assumptions and tax rates by jurisdiction, among others.

Because of the complexity involved in estimating proved oil and gas reserves, management also used an independent petroleum engineering consulting firm to perform a review of the processes and controls used by the Company’s internal reservoir engineers to determine estimates of proved oil and gas reserves.

Auditing the Company’s DD&A calculation is complex because of the use of the work of the internal reservoir engineers and the independent petroleum engineering consulting firm and the evaluation of management’s determination of the inputs described above used by the internal reservoir engineers in estimating proved oil and gas reserves.

ConocoPhillips 2022 10-K

How We Addressed the Matter in Our Audit We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s internal controls over its processes to calculate DD&A, including management’s controls over the completeness and accuracy of the financial data provided to the internal reservoir engineers for use in estimating proved oil and gas reserves.

Our audit procedures included, among others, evaluating the professional qualifications and objectivity of the Company’s internal reservoir engineers primarily responsible for overseeing the preparation of the proved oil and gas reserves estimates and the independent petroleum engineering consulting firm used to review the Company’s processes and controls.

In addition, in assessing whether we can use the work of the internal reservoir engineers, we evaluated the completeness and accuracy of the financial data and inputs described above used by the internal reservoir engineers in estimating proved oil and gas reserves by agreeing them to source documentation and we identified and evaluated corroborative and contrary evidence.

We also tested the accuracy of the DD&A calculation, including comparing the proved oil and gas reserves amounts used in the calculation to the Company’s reserve report.

/s/ Ernst & Young LLP

We have served as ConocoPhillips’ auditor since 1949.

Houston, Texas

February 16, 2023

ConocoPhillips

Report of Independent Registered

Public Accounting Firm

To the Stockholders

and the Board of Directors of ConocoPhillips

ConocoPhillips 2022 10-K

Report of Independent Registered Public Accounting Firm

To the Stockholders and the Board of Directors of ConocoPhillips

Opinion on Internal Control over Financial Reporting

We have audited ConocoPhillips’

internal control over financial reporting

as of December 31, 2021, based on

criteria established in Internal Control

–Integrated Framework

issued by the Committee of Sponsoring

Organizations of the Treadway

Commission (2013 framework) (the COSO criteria).

In our opinion, ConocoPhillips

(the Company) maintained, in all material

respects, effective internal

control over financial reporting

December 31, 2021, based on the COSO criteria.

under the heading “Assessment

of Internal Control

Over Financial Reporting” in the accompanying Reports of Management,

management’s assessment

conclusion on the effectiveness

of internal control over financial reporting

did not include the internal controls

the assets acquired from Shell Enterprise

LLC, which is included in the 2021 consolidated financial

statements of

ConocoPhillips and constituted approximately

10 percent of consolidated total

assets as of December 31, 2021.

Our audit of internal control over

financial reporting of ConocoPhillips also did not

include an evaluation of the

internal control over financial

reporting of the assets acquired from Shell Enterprise

We also have audited,

in accordance with the standards of the Public

Company Accounting Oversight

(United States) (PCAOB), the consolidated

balance sheets of the Company as of December 31, 2021 and 2020, the

related consolidated income statement,

consolidated statements

of comprehensive income, changes in equity

cash flows for each of the three years

in the period ended December 31, 2021, and the related notes

report dated February 17, 2022, expressed

an unqualified opinion thereon.

We have audited ConocoPhillips’ internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control–Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

In our opinion, ConocoPhillips (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2022, based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2022 and 2021, the related consolidated income statement, consolidated statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2022, and the related notes and our report dated February 16, 2023 expressed an unqualified opinion thereon.

Basis for Opinion

The Company’s management

is responsible for maintaining effective

internal control over

financial reporting and

for its assessment of the effectiveness

of internal control over financial reporting

included under the heading

of Internal Control Over Financial Reporting” in the

accompanying “Reports of Management.”

responsibility is to express an opinion

on the Company’s internal control

over financial reporting based on our

We are a public accounting

firm registered with the PCAOB and are

required to be independent with respect

to the Company in accordance with the U.S.

federal securities laws and

the applicable rules and regulations of the

Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance

with the standards of the PCAOB.

standards require that

perform the audit to obtain reasonable

assurance about whether effective

internal control over financial

was maintained in all material respects.

Our audit included obtaining an understanding

of internal control over financial

reporting, assessing the risk that a

material weakness exists, testing

and evaluating the design and operating

effectiveness of internal control

on the assessed risk, and performing such other procedures

as we considered necessary in the circumstances.

believe that our audit provides a reasonable

basis for our opinion.

ConocoPhillips

Definition and Limitations of Internal

Control Over Financial Reporting

A company’s internal

control over financial reporting is a process

designed to provide reasonable assurance

regarding the reliability of financial reporting

and the preparation of financial statements

for external purposes in

accordance with generally accepted

accounting principles.

internal control over financial reporting

includes those policies and procedures that

(1) pertain to the maintenance of records

that, in reasonable detail,

accurately and fairly reflect

the transactions and dispositions of the assets

of the company;

(2) provide reasonable

assurance that transactions

are recorded as necessary to permit preparation

of financial statements in accordance

with generally accepted accounting

principles, and that receipts and expenditures

of the company are being made

only in accordance with authorizations

of management and directors of the company;

and (3) provide reasonable

assurance regarding prevention

or timely detection of unauthorized acquisition, use,

or disposition of the

company’s assets that

could have a material effect

on the financial statements.

Because of its inherent limitations,

internal control over financial reporting

may not prevent or detect

misstatements.

projections of any evaluation

of effectiveness to future periods

are subject to the risk that

controls may become inadequate

because of changes in conditions, or that the

degree of compliance with the

policies or procedures may deteriorate.

Ernst & Young LLP

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included under the heading “Assessment of Internal Control Over Financial Reporting” in the accompanying “Reports of Management.” Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit.

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S.

federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our audit in accordance with the standards of the PCAOB.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects.

Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances.

We believe that our audit provides a reasonable basis for our opinion.

Definition and Limitations of Internal Control Over Financial Reporting

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles.

A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company;

(2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company;

and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.

Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.

Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.

/s/ Ernst & Young LLP

Houston, Texas

February 16, 2023

ConocoPhillips 2022 10-K

Financial Statements

ConocoPhillips

Consolidated Income Statement

ConocoPhillips

Years Ended December 31

Millions of Dollars

2022 2021 2020

Revenues and Other Income

3 unchanged sentences

Other income (loss) 504 1,203 ( 509 )

Revenues and Other Income

Total Revenues and Other Income 82,156 48,349 19,256

Costs and Expenses

1 unchanged sentence

Production and operating expenses 7,006 5,694 4,344

Selling, general and administrative

Selling, general and administrative expenses 623 719 430

Exploration expenses 564 344 1,457

Depreciation, depletion and amortization 7,504 7,208 5,521

other than income taxes

Impairments ( 12 ) 674 813

Taxes other than income taxes 3,364 1,634 754

Accretion on discounted liabilities 250 242 252

Interest and debt expense 805 884 806

Foreign currency transaction

(gains) losses

Foreign currency transaction gains ( 100 ) ( 22 ) ( 72 )

Other expenses ( 47 ) 102 13

Costs and Expenses

Total Costs and Expenses 53,928 35,637 22,396

Income (loss) before income taxes 28,228 12,712 ( 3,140 )

1 unchanged sentence

Net income (loss) 18,680 8,079 ( 2,655 )

net income attributable to noncontrolling

Net Income (Loss) Attributable

to ConocoPhillips

Net Income (Loss) Attributable

to ConocoPhillips Per Share

of Common Stock

Average Common Shares

(in thousands)

net income attributable to noncontrolling interests — — ( 46 )

Net Income (Loss) Attributable to ConocoPhillips $ 18,680 8,079 ( 2,701 )

Net Income (Loss) Attributable to ConocoPhillips Per Share of Common Stock (dollars)

Basic $ 14.62 6.09 ( 2.51 )

Diluted 14.57 6.07 ( 2.51 )

Average Common Shares Outstanding (in thousands)

Basic 1,274,028 1,324,194 1,078,030

Diluted 1,278,163 1,328,151 1,078,030

See Notes to Consolidated Financial Statements.

ConocoPhillips 2022 10-K

Financial Statements

ConocoPhillips

Consolidated Statement

of Comprehensive Income

Consolidated Statement of Comprehensive Income

ConocoPhillips

Years Ended December 31

Millions of Dollars

2022 2021 2020

Net Income (Loss) $ 18,680 8,079 ( 2,655 )

1 unchanged sentence

Defined benefit plans

Prior service credit arising during the period

Reclassification adjustment for

amortization of prior

service credit included in net income (loss)

Prior service (cost) credit arising during the period ( 10 ) — 29

Reclassification adjustment for amortization of prior service credit included in net income (loss) ( 39 ) ( 38 ) ( 32 )

Net change ( 49 ) ( 38 ) ( 3 )

Net actuarial gain (loss) arising during the period ( 623 ) 357 ( 210 )

Reclassification adjustment for

amortization of net

actuarial losses included in net income (loss)

Reclassification adjustment for amortization of net actuarial losses included in net income (loss) 72 178 117

Net change ( 551 ) 535 ( 93 )

Nonsponsored plans* 5 5 1

Income taxes on defined benefit

Income taxes on defined benefit plans 178 ( 108 ) 20

Defined benefit plans, net of tax ( 417 ) 394 ( 75 )

Unrealized holding gain (loss) on

Reclassification adjustment for

loss included in net income

Income taxes on unrealized

holding loss on securities

Unrealized holding gain (loss) on securities ( 13 ) ( 2 ) 2

Foreign currency translation

Income taxes on foreign

currency translation adjustments

Foreign currency translation

adjustments, net of tax

Other Comprehensive Income, Net of Tax

Reclassification adjustment for loss included in net income ( 1 ) ( 1 ) —

Income taxes on unrealized holding loss on securities 3 1 —

Unrealized holding gain (loss) on securities, net of tax ( 11 ) ( 2 ) 2

Foreign currency translation adjustments ( 623 ) ( 124 ) 209

Income taxes on foreign currency translation adjustments 1 — 3

Foreign currency translation adjustments, net of tax ( 622 ) ( 124 ) 212

Other Comprehensive Income (Loss), Net of Tax ( 1,050 ) 268 139

Comprehensive Income (Loss) 17,630 8,347 ( 2,516 )

comprehensive income attributable

to noncontrolling interests

Comprehensive Income (Loss) Attributable

to ConocoPhillips

*Plans for which ConocoPhillips is not the primary obligor—primarily those administered by equity

comprehensive income attributable to noncontrolling interests — — ( 46 )

Comprehensive Income (Loss) Attributable to ConocoPhillips $ 17,630 8,347 ( 2,562 )

* Plans for which ConocoPhillips is not the primary obligor—primarily those administered by equity affiliates.

See Notes to Consolidated Financial Statements.

ConocoPhillips 2022 10-K

Financial Statements

ConocoPhillips

Consolidated Balance Sheet

4 unchanged sentences

Short-term investments 2,785 446

Accounts and notes receivable (net of allowance

, respectively)

Accounts and notes receivable—related

Accounts and notes receivable (net of allowance of $ 2 and $ 2 , respectively)

Accounts and notes receivable—related parties 13 127

Investment in Cenovus Energy — 1,117

Prepaid expenses and other current

Current Assets

Inventories 1,219 1,208

Prepaid expenses and other current assets 1,199 1,581

Total Current Assets 18,749 16,050

Investments and long-term receivables 8,225 7,113

Loans and advances—related parties

Net properties, plants and equipment

(net of accumulated DD&A of $

, respectively)

Net properties, plants and equipment (net of accumulated DD&A of $ 66,630 and $ 64,735 , respectively)

64,866 64,911

Other assets 1,989 2,587

Total Assets $ 93,829 90,661

Accounts payable $ 6,113 5,002

Accounts payable—related

Accounts payable—related parties 50 23

Short-term debt 417 1,200

2 unchanged sentences

Other accruals 2,346 2,179

Current Liabilities

Total Current Liabilities 12,847 12,021

Long-term debt 16,226 18,734

Asset retirement obligations

and accrued environmental costs

Asset retirement obligations and accrued environmental costs 6,401 5,754

Deferred income taxes 7,726 6,179

1 unchanged sentence

Other liabilities and deferred credits 1,552 1,414

Common stock (

2,500,000,000

shares authorized at $

Issued (2021—

2,091,562,747

1,798,844,267

Total Liabilities 45,826 45,255

Common stock ( 2,500,000,000 shares authorized at $ 0.01 par value) Issued

(2022— 2,100,885,134 shares;

2021— 2,091,562,747 shares)

Par value 21 21

Capital in excess of par 61,142 60,581

Treasury stock

Accumulated other comprehensive

Treasury stock (at cost:

2022— 877,029,062 shares;

2021— 789,319,875 shares)

( 60,189 ) ( 50,920 )

Accumulated other comprehensive loss ( 6,000 ) ( 4,950 )

Retained earnings 53,029 40,674

Liabilities and Equity

Total Equity 48,003 45,406

Total Liabilities and Equity $ 93,829 90,661

See Notes to Consolidated Financial Statements.

ConocoPhillips 2022 10-K

Financial Statements

ConocoPhillips

Consolidated Statement

of Cash Flows

Consolidated Statement of Cash Flows

ConocoPhillips

Years Ended December 31

Millions of Dollars

2022 2021 2020

Cash Flows From Operating Activities

Net income (loss) $ 18,680 8,079 ( 2,655 )

Adjustments to reconcile net income

(loss) to net cash provided by

operating activities

Adjustments to reconcile net income (loss) to net cash provided by operating activities

Depreciation, depletion and amortization 7,504 7,208 5,521

Impairments ( 12 ) 674 813

Dry hole costs and leasehold impairments 340 44 1,083

3 unchanged sentences

Gain on dispositions ( 1,077 ) ( 486 ) ( 549 )

(Gain) loss on CVE common shares

(Gain) loss on investment in Cenovus Energy ( 251 ) ( 1,040 ) 855

Other 86 ( 788 ) 43

Working capital adjustments

Decrease (increase) in accounts and notes

Decrease (increase) in accounts and notes receivable ( 963 ) ( 2,500 ) 521

Increase in inventories ( 38 ) ( 160 ) ( 25 )

Decrease (increase) in prepaid expenses

and other current

Decrease (increase) in prepaid expenses and other current assets ( 173 ) ( 649 ) 76

Increase (decrease) in accounts payable 901 1,399 ( 249 )

Increase (decrease) in taxes

and other accruals

Net Cash Provided by Operating

Increase (decrease) in taxes and other accruals 39 3,181 ( 695 )

Net Cash Provided by Operating Activities 28,314 16,996 4,802

Cash Flows From Investing Activities

Capital expenditures and investments ( 10,159 ) ( 5,324 ) ( 4,715 )

Working capital changes

associated with investing activities

Working capital changes associated with investing activities 520 134 ( 155 )

Acquisition of businesses, net of cash acquired ( 60 ) ( 8,290 ) —

2 unchanged sentences

Collection of advances/loans—related parties 114 105 116

Other 2 87 ( 26 )

Net Cash Used in Investing Activities ( 8,741 ) ( 8,544 ) ( 4,121 )

3 unchanged sentences

Issuance of company common stock 362 145 ( 5 )

Repurchase of company common

Repurchase of company common stock ( 9,270 ) ( 3,623 ) ( 892 )

Dividends paid ( 5,726 ) ( 2,359 ) ( 1,831 )

Other ( 49 ) 7 ( 26 )

Net Cash Used in Financing Activities ( 18,053 ) ( 6,335 ) ( 2,708 )

Effect of Exchange

Rate Changes on Cash, Cash Equivalents

Restricted Cash

Net Change in Cash, Cash Equivalents and

Restricted Cash

Cash, cash equivalents and restricted

cash at beginning of period

Cash, Cash Equivalents and Restricted

Cash at End of Period

Restricted cash of $

million and $

million is included in the “Prepaid expenses and other current assets” and “Other assets”

respectively, of our Consolidated Balance Sheet as of December 31, 2021.

Restricted cash of $

million and $

million is included in the “Prepaid expenses and other current assets” and “Other assets” lines,

respectively, of our Consolidated Balance Sheet as of December 31, 2020.

Effect of Exchange Rate Changes on Cash, Cash Equivalents and Restricted Cash ( 224 ) ( 34 ) ( 20 )

Net Change in Cash, Cash Equivalents and Restricted Cash 1,296 2,083 ( 2,047 )

Cash, cash equivalents and restricted cash at beginning of period 5,398 3,315 5,362

Cash, Cash Equivalents and Restricted Cash at End of Period $ 6,694 5,398 3,315

Restricted cash of $ 236 million is included in the “ Other assets ” line of our Consolidated Balance Sheet as of December 31, 2022.

Restricted cash of $ 152 million and $ 218 million is included in the “Prepaid expenses and other current assets” and “Other assets” lines, respectively, of our Consolidated Balance Sheet as of December 31, 2021.

See Notes to Consolidated Financial Statements.

ConocoPhillips 2022 10-K

Financial Statements

ConocoPhillips

Consolidated Statement

of Changes in Equity

Consolidated Statement of Changes in Equity

ConocoPhillips

1 unchanged sentence

Attributable to ConocoPhillips

Par Value Capital in

Comprehensive

Income (Loss)

Income (Loss) Retained

Earnings Non-

Interests Total

Balances at December 31, 2019

Other comprehensive loss

Dividends declared—ordinary ($

per share of common stock)

$ 18 46,983 ( 46,405 ) ( 5,357 ) 39,742 69 35,050

Net income (loss) ( 2,701 ) 46 ( 2,655 )

Other comprehensive income (loss) 139 139

Dividends declared—ordinary ($ 1.69 per share of common stock)

( 1,831 ) ( 1,831 )

Repurchase of company common stock ( 892 ) ( 892 )

Distributions to noncontrolling interests and other ( 32 ) ( 32 )

Disposition ( 84 ) ( 84 )

Distributed under benefit plans 150 150

Changes in Accounting Principles*

Balances at December 31, 2020

$ 18 47,133 ( 47,297 ) ( 5,218 ) 35,213 — 29,849

Net income (loss) 8,079 8,079

Other comprehensive income

Dividends declared—ordinary ($

per share of common stock)

Other comprehensive income (loss) 268 268

Dividends declared

Ordinary ($ 1.75 per share of common stock)

( 2,359 ) ( 2,359 )

Variable return of cash ($ 0.20 per share of common stock)

( 260 ) ( 260 )

Acquisition of Concho 3 13,122 13,125

Repurchase of company common stock ( 3,623 ) ( 3,623 )

Distributions to noncontrolling interests and other

Distributed under benefit plans 326 326

Balances at December 31, 2021

Other comprehensive income

$ 21 60,581 ( 50,920 ) ( 4,950 ) 40,674 — 45,406

Net income (loss) 18,680 18,680

Other comprehensive income (loss) ( 1,050 ) ( 1,050 )

Dividends declared

per share of common stock)

Variable return of cash ($

per share of common stock)

Acquisition of Concho

Ordinary ($ 1.89 per share of common stock)

( 2,419 ) ( 2,419 )

Variable return of cash ($ 3.10 per share of common stock)

( 3,908 ) ( 3,908 )

Repurchase of company common stock ( 9,270 ) ( 9,270 )

1 unchanged sentence

Balances at December 31, 2022

*Cumulative effect of the adoption of ASU No.

2018-02, "Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income."

See Notes to Consolidated Financial Statements.

$ 21 61,142 ( 60,189 ) ( 6,000 ) 53,029 — 48,003

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Notes to Consolidated Financial Statements

ConocoPhillips

Notes to Consolidated

Financial Statements

Note 1—Accounting Policies

Consolidation Principles and Investments

—Our consolidated financial statements

include the accounts of

majority-owned, controlled subsidiaries

and, if applicable, variable interest

entities where we are the

primary beneficiary.

The equity method is used to account for

investments in affiliates

in which we have

the ability to exert significant

influence over the affiliates’ operating

and financial policies.

not have the ability to exert

significant influence, the investment

is measured at fair value except

the investment does not have

a readily determinable fair value.

For those exceptions, it will be measured

at cost minus impairment, plus or minus

observable price changes in orderly transactions for

or similar investment of the same issuer.

Undivided interests in oil and gas

joint ventures, pipelines,

natural gas plants and terminals

are consolidated on a proportionate

Other securities and

investments are generally

carried at cost.

We manage our operations

operating segments,

defined by geographic region:

Europe, Middle

East and North Africa;

• Consolidation Principles and Investments —Our consolidated financial statements include the accounts of majority-owned, controlled subsidiaries and, if applicable, variable interest entities where we are the primary beneficiary.

The equity method is used to account for investments in affiliates in which we have the ability to exert significant influence over the affiliates’ operating and financial policies.

When we do not have the ability to exert significant influence, the investment is measured at fair value except when the investment does not have a readily determinable fair value.

For those exceptions, it will be measured at cost minus impairment, plus or minus observable price changes in orderly transactions for an identical or similar investment of the same issuer.

Undivided interests in oil and gas joint ventures, pipelines, natural gas plants and terminals are consolidated on a proportionate basis.

Other securities and investments are generally carried at cost.

We manage our operations through six operating segments, defined by geographic region:

Europe, Middle East and North Africa;

Asia Pacific;

and Other International.

Foreign Currency Translation

—Adjustments resulting from the

process of translating foreign

currency financial statements

dollars are included

in accumulated other comprehensive

common stockholders’ equity.

Foreign currency transaction

gains and losses are included in current

Some of our foreign operations

use their local currency as the functional currency.

Use of Estimates

—The preparation of financial statements

in conformity with U.S.

GAAP requires

management to make estimates

and assumptions that affect the

reported amounts of assets, liabilities,

revenues and expenses and the disclosures

of contingent assets and liabilities.

Actual results could differ

from these estimates.

Revenue Recognition

—Revenues associated with

the sales of crude oil, bitumen, natural gas,

and other items are recognized

at the point in time when the customer obtains

control of the asset.

evaluating when a customer has control

of the asset, we primarily consider whether the transfer

title and physical delivery has occurred,

whether the customer has significant risks

and rewards of

ownership and whether the customer has

accepted delivery and a right to payment

products are typically sold at prevailing

market prices.

We allocate variable

market-based consideration

to deliveries (performance obligations)

in the current period as that consideration

relates specifically to

our efforts to transfer

control of current period deliveries

to the customer and represents

the amount we

expect to be entitled to in exchange

for the related products.

Payment is typically due within 30 days or

Revenues associated with transactions

commonly called buy/sell contracts,

in which the purchase and

sale of inventory with the same counterparty

are entered into “in contemplation”

of one another, are

combined and reported net (i.e., on the same income

statement line).

Shipping and Handling Costs

—We typically incur shipping and handling

costs prior to control transferring

to the customer and account for

these activities as fulfillment costs.

we include shipping and

handling costs in production and operating

expenses for production activities.

Transportation

related to marketing activities

are recorded in purchased commodities.

Freight costs billed to customers

are treated as a component of the transaction

price and recorded as a component of revenue

customer obtains control.

Cash Equivalents

—Cash equivalents are highly liquid, short-term

investments that are

readily convertible

to known amounts of cash and have

original maturities of 90 days or less from their date

They are carried at cost plus accrued interest,

which approximates fair value.

Notes to Consolidated Financial Statements

ConocoPhillips

—Short-term investments

include investments in bank time deposits

marketable securities (commercial

paper and government obligations)

which are carried at cost plus

accrued interest and have

original maturities of greater than 90 days

but within one year or when the

remaining maturities are within one year.

We also invest in financial instruments

classified as available

for sale debt securities which are carried at

Those instruments

are included in short-term

investments when they have

remaining maturities within one year as of the balance

Long-Term Investments

in Debt Securities

—Long-term investments

in debt securities includes financial

instruments classified as available

for sale debt securities with remaining maturities

greater than one year

as of the balance sheet date.

They are carried at fair value

and presented within the “Investments

long-term receivables” line of our consolidated

balance sheet.

—We have several

valuation methods for our various

types of inventories and consistently

the following methods for each type

of inventory.

The majority of our commodity-related inventories

recorded at cost using the

We measure these inventories

at the lower-of-cost-or-market

the aggregate.

Any necessary lower-of-cost-or-market

write-downs at year end are recorded

permanent adjustments to the LIFO cost

LIFO is used to better match current

inventory costs with

current revenues.

Costs include both direct and indirect expenditures

incurred in bringing an item or

product to its existing condition

and location, but not unusual/nonrecurring costs

or research and

development costs.

Materials, supplies and other miscellaneous inventories,

such as tubular goods and

well equipment, are valued using various

methods, including the weighted-average

-cost method and the

FIFO method, consistent with industry

Fair Value Measurements

—Assets and liabilities measured at fair value

and required to be categorized

within the fair value hierarchy

are categorized into

one of three different

levels depending on the

observability of the inputs employed in the measurement.

Level 1 inputs are quoted prices in active

markets for identical assets

or liabilities.

Level 2 inputs are observable inputs other than

quoted prices

included within Level 1 for the asset or liability,

either directly or indirectly through market

-corroborated

Level 3 inputs are unobservable inputs for

the asset or liability reflecting significant modifications

to observable related market

data or our assumptions about pricing by market

participants.

Derivative Instruments

—Derivative instruments are

recorded on the balance sheet at fair

right of offset exists and certain

other criteria are met, derivative assets

and liabilities with the same

counterparty are netted

on the balance sheet and the collateral payable

or receivable is netted against

derivative assets and derivative

liabilities, respectively.

Recognition and classification of the gain

or loss that results from recording

and adjusting a derivative to

fair value depends on the purpose for

issuing or holding the derivative.

Gains and losses from derivatives

not accounted for as hedges

are recognized immediately in

We do not apply hedge accounting

to our derivative instruments.

Oil and Gas Exploration and Development

—Oil and gas exploration and

development costs are

accounted for using the successful

efforts method of accounting.

Property Acquisition Costs

—Oil and gas leasehold acquisition costs

are capitalized and included in

the balance sheet caption PP&E.

Leasehold impairment is recognized based on

experience and management’s

Upon achievement of all conditions necessary for

to be classified as proved, the associated

leasehold costs are reclassified to proved

Exploratory Costs

—Geological and geophysical

costs and the costs of carrying and retaining

undeveloped properties are expensed

Exploratory well costs are

capitalized, or

on the balance sheet pending further evaluation of whether economically

reserves have been found.

If economically recoverable reserves

are not found, exploratory

are expensed as dry holes.

If exploratory wells encounter

potentially economic quantities

Notes to Consolidated Financial Statements

ConocoPhillips

gas, the well costs remain capitalized

on the balance sheet as long as sufficient progress

assessing the

reserves and the economic and operating

viability of the project is being made.

exploratory discoveries,

it is not unusual to have exploratory

wells remain suspended on the balance

sheet for several years

while we perform additional appraisal

drilling and seismic work on the

potential oil and gas field or while we seek government

or co-venturer approval

of development

plans or seek environmental permitting.

Once all required approvals

and permits have been

obtained, the projects are moved

into the development phase, and the

oil and gas resources are

designated as proved reserves.

Management reviews suspended well balances

continuously monitors the results

additional appraisal drilling and seismic work, and expenses

the suspended well costs as dry holes

when it judges the potential field does not warrant

further investment in the near term.

Development Costs

—Costs incurred to drill and equip development

wells, including unsuccessful

development wells, are capital

Depletion and Amortization

—Leasehold costs of producing properties

are depleted using the unit-of-

production method based on estimated

proved oil and gas reserves.

Amortization of development

costs is based on the unit-of-production

method using estimated proved

developed oil and gas

Capitalized Interest

—Interest from external

borrowings is capitalized on

major projects with an expected

construction period of one year or longer.

Capitalized interest

is added to the cost of the underlying asset

and is amortized over the useful lives of the assets

in the same manner as the underlying assets.

Depreciation and Amortization

—Depreciation and amortization of PP&E

on producing hydrocarbon

properties and SAGD facilities and

certain pipeline and LNG assets (those which are expected

declining utilization pattern),

are determined by the unit-of-production

Depreciation and

amortization of all other PP&E are determined by

either the individual-unit-straight-line

method or the

group-straight-line

method (for those individual units that are

highly integrated with other units).

Impairment of Properties, Plants and Equipment

—Long-lived assets used in operations are assessed

impairment whenever changes in facts

and circumstances indicate a possible

significant deterioration in

the future cash flows expected

to be generated by an asset group.

If there is an indication the carrying

amount of an asset may not be recovered,

a recoverability test

is performed using management’s

assumptions for prices, volumes and future

development plans.

If the sum of the undiscounted cash

flows before income-taxes

is less than the carrying value of the asset group,

the carrying value is written

down to estimated fair value

and reported as an impairment in the period in which

the determination is

Individual assets are grouped for

impairment purposes at the lowest level for

which there are

identifiable cash flows that are largely

independent of the cash flows of other groups

of assets—generally

on a field-by-field basis for E&P assets.

Because there usually is a lack of quoted market

prices for long-

lived assets, the fair value of impaired assets

is typically determined based on the present values

expected future cash flows using

rates and prices believed to be consistent

with those used by

principal market participants, or based

on a multiple of operating cash flow validated

with historical

market transactions of similar assets

where possible.

The expected future cash flows used

for impairment reviews and

related fair value calculations

on estimated future production

volumes, commodity prices,

operating costs and capital

considering all available evidence at the date

The impairment review includes cash

proved developed and undeveloped

reserves, including any development

expenditures necessary to

achieve that production.

Additionally, when probable

and possible reserves exist, an appropriate

adjusted amount of these reserves may

be included in the impairment calculation.

Notes to Consolidated Financial Statements

ConocoPhillips

Long-lived assets committed by

management for disposal within one year are

accounted for at the lower

of amortized cost or fair value,

less cost to sell, with fair value determined

using a binding negotiated

price, if available, or present value

of expected future cash flows

as previously described.

Maintenance and Repairs

—Costs of maintenance and repairs,

which are not significant improvements,

are expensed when incurred.

Property Dispositions

—When complete units of depreciable

property are sold, the asset cost

accumulated depreciation are

eliminated, with any gain or loss

reflected in the “Gain on dispositions” line

of our consolidated income statement.

When partial units of depreciable property are

disposed of or

retired which do not significantly

alter the DD&A rate, the difference

between asset cost and salvage

value is charged or credited to

accumulated depreciation.

Asset Retirement Obligations

and Environmental Costs

fair value of legal obligations

to retire and

remove long-lived assets are recorded

in the period in which the obligation is incurred

(typically when the

asset is installed at the production

Fair value is estimated using

a present value approach,

incorporating assumptions about estimated

amounts and timing of settlements and impacts

of the use of

technologies.

Environmental expenditures

are expensed or capitalized,

depending upon their future economic benefit.

Expenditures relating to an existing

condition caused by past operations,

and those having no future

economic benefit, are expensed.

Liabilities for environmental

expenditures are recorded

undiscounted basis (unless acquired through

a business combination, which we record

on a discounted

basis) when environmental assessments

or cleanups are probable and the costs

can be reasonably

Recoveries of environmental

remediation costs from other parties

are recorded as assets

when their receipt is probable and estimable.

Impairment of Investments

in Nonconsolidated Entities

—Investments in nonconsolidated

assessed for impairment whenever changes

in the facts and circumstances

indicate a loss in value has

When such a condition is judgmentally determined

to be other than temporary,

value of the investment is written

down to fair value.

The fair value of the impaired investment

on quoted market prices, if available,

or upon the present value of expected

future cash flows using

discount rates and prices believed

to be consistent with those used by

principal market participants, plus

market analysis of comparable

assets owned by the investee,

if appropriate.

—The fair value of a guarantee

is determined and recorded as a

liability at the time the

guarantee is given.

The initial liability is subsequently reduced as we are

released from exposure

the guarantee.

We amortize the guarantee

liability over the relevant time period, if one

exists, based on

the facts and circumstances surrounding

each type of guarantee.

In cases where the guarantee term

indefinite, we reverse the liability

when we have information

indicating the liability is essentially relieved

or amortize it over an appropriate

time period as the fair value of our guarantee

exposure declines over

We amortize the guarantee

liability to the related income statement

line item based on the nature

of the guarantee.

When it becomes probable that we will have

to perform on a guarantee, we accrue

separate liability if it is reasonably estimable,

based on the facts and circumstances

at that time.

reverse the fair value liability

only when there is no further exposure under the

Share-Based Compensation

—We recognize share

-based compensation expense over

the shorter of the

service period (i.e., the stated period of time required

to earn the award) or the period beginning at

start of the service period and ending when an employee first

becomes eligible for retirement.

elected to recognize expense

on a straight-line basis over the service period for

the entire award, whether

the award was granted

with ratable or cliff vesting.

Notes to Consolidated Financial Statements

ConocoPhillips

—Deferred income taxes

are computed using the liability method

and are provided on all

temporary differences

between the financial reporting basis and the tax

basis of our assets and liabilities,

except for deferred

taxes on income and temporary

differences related

to the cumulative translation

adjustment considered to be permanently

reinvested in certain

foreign subsidiaries and foreign

joint ventures.

Allowable tax credits are applied currently

as reductions of the provision for

income taxes.

Interest related to

unrecognized tax benefits

is reflected in interest

and debt expense, and penalties

related to unrecognized

tax benefits are reflected

in production and operating

Collected from Customers

and Remitted to Governmental

—Sales and value-added

taxes are recorded

Net Income (Loss) Per Share of Common

—Basic net income (loss) per share of common stock

calculated based upon the daily weighted-average

number of common shares outstanding

calculation includes fully vested stock

and unit awards that have not

yet been issued as

common stock, along with an adjustment

to net income (loss) for dividend equivalents

paid on unvested

unit awards that are considered

participating securities.

Diluted net income per share of common stock

includes unvested stock,

unit or option awards granted

under our compensation plans and vested but

unexercised stock

options, but only to the extent these instruments

dilute net income per share, primarily

under the treasury-stock method.

Diluted net loss per share, which is calculated

the same as basic net

loss per share, does not assume conversion

or exercise of securities that

would have an antidilutive effect.

Treasury stock

is excluded from the daily weighted

-average number of common

shares outstanding in

both calculations.

The earnings per share impact of the participating securities is immaterial.

See Note 24 .

• Foreign Currency Translation —Adjustments resulting from the process of translating foreign functional currency financial statements into U.S.

dollars are included in accumulated other comprehensive loss in common stockholders’ equity.

Foreign currency transaction gains and losses are included in current earnings.

Some of our foreign operations use their local currency as the functional currency.

• Use of Estimates —The preparation of financial statements in conformity with U.S.

GAAP requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosures of contingent assets and liabilities.

Actual results could differ from these estimates.

• Revenue Recognition —Revenues associated with the sales of crude oil, bitumen, natural gas, LNG, NGLs and other items are recognized at the point in time when the customer obtains control of the asset.

In evaluating when a customer has control of the asset, we primarily consider whether the transfer of legal title and physical delivery has occurred, whether the customer has significant risks and rewards of ownership and whether the customer has accepted delivery and a right to payment exists.

These products are typically sold at prevailing market prices.

We allocate variable market-based consideration to deliveries (performance obligations) in the current period as that consideration relates specifically to our efforts to transfer control of current period deliveries to the customer and represents the amount we expect to be entitled to in exchange for the related products.

Payment is typically due within 30 days or less.

Revenues associated with transactions commonly called buy/sell contracts, in which the purchase and sale of inventory with the same counterparty are entered into “in contemplation” of one another, are combined and reported net (i.e., on the same income statement line).

• Shipping and Handling Costs —We typically incur shipping and handling costs prior to control transferring to the customer and account for these activities as fulfillment costs.

Accordingly, we include shipping and handling costs in production and operating expenses for production activities.

Transportation costs related to marketing activities are recorded in purchased commodities.

Freight costs billed to customers are treated as a component of the transaction price and recorded as a component of revenue when the customer obtains control.

• Cash Equivalents —Cash equivalents are highly liquid, short-term investments that are readily convertible to known amounts of cash and have original maturities of 90 days or less from their date of purchase.

They are carried at cost plus accrued interest, which approximates fair value.

• Short-Term Investments —Short-term investments include investments in bank time deposits and marketable securities (commercial paper and government obligations) which are carried at cost plus accrued interest and have original maturities of greater than 90 days but within one year or when the remaining maturities are within one year.

We also invest in financial instruments classified as available for sale debt securities which are carried at fair value.

Those instruments are included in short-term investments when they have remaining maturities of one year or less, as of the balance sheet date.

• Long-Term Investments in Debt Securities —Long-term investments in debt securities includes financial instruments classified as available for sale debt securities with remaining maturities greater than one year as of the balance sheet date.

They are carried at fair value and presented within the “Investments and long-term receivables” line of our consolidated balance sheet.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

• Inventories —We have several valuation methods for our various types of inventories and consistently use the following methods for each type of inventory.

The majority of our commodity-related inventories are recorded at cost using the LIFO basis.

We measure these inventories at the lower-of-cost-or-market in the aggregate.

Any necessary lower-of-cost-or-market write-downs at year end are recorded as permanent adjustments to the LIFO cost basis.

LIFO is used to better match current inventory costs with current revenues.

Costs include both direct and indirect expenditures incurred in bringing an item or product to its existing condition and location, but not unusual/nonrecurring costs or research and development costs.

Materials, supplies and other miscellaneous inventories, such as tubular goods and well equipment, are valued using various methods, including the weighted-average-cost method and the FIFO method, consistent with industry practice.

• Fair Value Measurements —Assets and liabilities measured at fair value and required to be categorized within the fair value hierarchy are categorized into one of three different levels depending on the observability of the inputs employed in the measurement.

Level 1 inputs are quoted prices in active markets for identical assets or liabilities.

Level 2 inputs are observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs.

Level 3 inputs are unobservable inputs for the asset or liability reflecting significant modifications to observable related market data or our assumptions about pricing by market participants.

• Derivative Instruments —Derivative instruments are recorded on the balance sheet at fair value.

If the right of offset exists and certain other criteria are met, derivative assets and liabilities with the same counterparty are netted on the balance sheet and the collateral payable or receivable is netted against derivative assets and derivative liabilities, respectively.

Recognition and classification of the gain or loss that results from recording and adjusting a derivative to fair value depends on the purpose for issuing or holding the derivative.

Gains and losses from derivatives not accounted for as hedges are recognized immediately in earnings.

We do not apply hedge accounting to our derivative instruments.

• Oil and Gas Exploration and Development —Oil and gas exploration and development costs are accounted for using the successful efforts method of accounting.

Property Acquisition Costs —Oil and gas leasehold acquisition costs are capitalized and included in the balance sheet caption PP&E.

Leasehold impairment is recognized based on exploratory experience and management’s judgment.

Upon achievement of all conditions necessary for reserves to be classified as proved, the associated leasehold costs are reclassified to proved properties.

Exploratory Costs —Geological and geophysical costs and the costs of carrying and retaining undeveloped properties are expensed as incurred.

Exploratory well costs are capitalized, or “suspended,” on the balance sheet pending further evaluation of whether economically recoverable reserves have been found.

If economically recoverable reserves are not found, exploratory well costs are expensed as dry holes.

If exploratory wells encounter potentially economic quantities of oil and gas, the well costs remain capitalized on the balance sheet as long as sufficient progress assessing the reserves and the economic and operating viability of the project is being made.

For complex exploratory discoveries, it is not unusual to have exploratory wells remain suspended on the balance sheet for several years while we perform additional appraisal drilling and seismic work on the potential oil and gas field or while we seek government or co-venturer approval of development plans or seek environmental permitting.

Once all required approvals and permits have been obtained, the projects are moved into the development phase, and the oil and gas resources are designated as proved reserves.

Management reviews suspended well balances quarterly, continuously monitors the results of the additional appraisal drilling and seismic work, and expenses the suspended well costs as dry holes when it judges the potential field does not warrant further investment in the near term.

Development Costs —Costs incurred to drill and equip development wells, including unsuccessful development wells, are capitalized.

Depletion and Amortization —Leasehold costs of producing properties are depleted using the unit-of-production method based on estimated proved oil and gas reserves.

Amortization of development costs is based on the unit-of-production method using estimated proved developed oil and gas reserves.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

• Capitalized Interest —Interest from external borrowings is capitalized on major projects with an expected construction period of one year or longer.

Capitalized interest is added to the cost of the underlying asset and is amortized over the useful lives of the assets in the same manner as the underlying assets.

• Depreciation and Amortization —Depreciation and amortization of PP&E on producing hydrocarbon properties and SAGD facilities and certain pipeline and LNG assets (those which are expected to have a declining utilization pattern), are determined by the unit-of-production method.

Depreciation and amortization of all other PP&E are determined by either the individual-unit-straight-line method or the group-straight-line method (for those individual units that are highly integrated with other units).

• Impairment of Properties, Plants and Equipment —Long-lived assets used in operations are assessed for impairment whenever changes in facts and circumstances indicate a possible significant deterioration in the future cash flows expected to be generated by an asset group.

If there is an indication the carrying amount of an asset may not be recovered, a recoverability test is performed using management’s assumptions for prices, volumes and future development plans.

If the sum of the undiscounted cash flows before income-taxes is less than the carrying value of the asset group, the carrying value is written down to estimated fair value and reported as an impairment in the period in which the determination is made.

Individual assets are grouped for impairment purposes at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets—generally on a field-by-field basis for E&P assets.

Because there usually is a lack of quoted market prices for long-lived assets, the fair value of impaired assets is typically determined based on the present values of expected future cash flows using discount rates and prices believed to be consistent with those used by principal market participants, or based on a multiple of operating cash flow validated with historical market transactions of similar assets where possible.

The expected future cash flows used for impairment reviews and related fair value calculations are based on estimated future production volumes, commodity prices, operating costs and capital decisions, considering all available evidence at the date of review.

The impairment review includes cash flows from proved developed and undeveloped reserves, including any development expenditures necessary to achieve that production.

Additionally, when probable and possible reserves exist, an appropriate risk-adjusted amount of these reserves may be included in the impairment calculation.

Long-lived assets committed by management for disposal within one year are accounted for at the lower of amortized cost or fair value, less cost to sell, with fair value determined using a binding negotiated price, if available, or present value of expected future cash flows as previously described.

• Maintenance and Repairs —Costs of maintenance and repairs, which are not significant improvements, are expensed when incurred.

• Property Dispositions —When complete units of depreciable property are sold, the asset cost and related accumulated depreciation are eliminated, with any gain or loss reflected in the “Gain on dispositions” line of our consolidated income statement.

When partial units of depreciable property are disposed of or retired which do not significantly alter the DD&A rate, the difference between asset cost and salvage value is charged or credited to accumulated depreciation.

• Asset Retirement Obligations and Environmental Costs —The fair value of legal obligations to retire and remove long-lived assets are recorded in the period in which the obligation is incurred (typically when the asset is installed at the production location).

Fair value is estimated using a present value approach, incorporating assumptions about estimated amounts and timing of settlements and impacts of the use of technologies.

Environmental expenditures are expensed or capitalized, depending upon their future economic benefit.

Expenditures relating to an existing condition caused by past operations, and those having no future economic benefit, are expensed.

Liabilities for environmental expenditures are recorded on an undiscounted basis (unless acquired through a business combination, which we record on a discounted basis) when environmental assessments or cleanups are probable and the costs can be reasonably estimated.

Recoveries of environmental remediation costs from other parties are recorded as assets when their receipt is probable and estimable.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

• Impairment of Investments in Nonconsolidated Entities —Investments in nonconsolidated entities are assessed for impairment whenever changes in the facts and circumstances indicate a loss in value has occurred.

When such a condition is judgmentally determined to be other than temporary, the carrying value of the investment is written down to fair value.

The fair value of the impaired investment is based on quoted market prices, if available, or upon the present value of expected future cash flows using discount rates and prices believed to be consistent with those used by principal market participants, plus market analysis of comparable assets owned by the investee, if appropriate.

• Guarantees —The fair value of a guarantee is determined and recorded as a liability at the time the guarantee is given.

The initial liability is subsequently reduced as we are released from exposure under the guarantee.

We amortize the guarantee liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of guarantee.

In cases where the guarantee term is indefinite, we reverse the liability when we have information indicating the liability is essentially relieved or amortize it over an appropriate time period as the fair value of our guarantee exposure declines over time.

We amortize the guarantee liability to the related income statement line item based on the nature of the guarantee.

When it becomes probable that we will have to perform on a guarantee, we accrue a separate liability if it is reasonably estimable, based on the facts and circumstances at that time.

We reverse the fair value liability only when there is no further exposure under the guarantee.

• Share-Based Compensation —We recognize share-based compensation expense over the shorter of the service period (i.e., the stated period of time required to earn the award) or the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement.

We have elected to recognize expense on a straight-line basis over the service period for the entire award, whether the award was granted with ratable or cliff vesting.

• Income Taxes —Deferred income taxes are computed using the liability method and are provided on all temporary differences between the financial reporting basis and the tax basis of our assets and liabilities, except for deferred taxes on income and temporary differences related to the cumulative translation adjustment considered to be permanently reinvested in certain foreign subsidiaries and foreign corporate joint ventures.

Allowable tax credits are applied currently as reductions of the provision for income taxes.

Interest related to unrecognized tax benefits is reflected in interest and debt expense, and penalties related to unrecognized tax benefits are reflected in production and operating expenses.

• Taxes Collected from Customers and Remitted to Governmental Authorities —Sales and value-added taxes are recorded net.

• Net Income (Loss) Per Share of Common Stock —Basic net income (loss) per share (EPS) is calculated using the two-class method.

Under the two-class method, all earnings (distributed and undistributed) are allocated to common stock (including fully vested stock and unit awards that have not yet been issued as common stock) and participating securities.

ConocoPhillips grants RSUs under its share-based compensation programs, the majority of which entitle recipients to receive non-forfeitable dividends during the vesting period on a basis equivalent to dividends paid to holders of the Company’s common stock.

See Note 16 .

These unvested RSUs meet the definition of participating securities based on their respective rights to receive non-forfeitable dividends and are treated as a separate class of securities in computing basic EPS.

Participating securities are not included as incremental shares in computing diluted EPS.

Diluted EPS includes the potential impact of contingently issuable shares, including awards which require future service as a condition of delivery of the underlying common stock.

Diluted EPS is calculated under both the two-class and treasury stock methods, and the more dilutive amount is reported.

Diluted net loss per share does not assume conversion or exercise of securities as that would always have an antidilutive effect.

Treasury stock is excluded from the daily weighted-average number of common shares outstanding in both calculations.

See Note 23 .

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 2—Inventories

3 unchanged sentences

Materials and supplies 578 561

Inventories valued on

the LIFO basis

The estimated excess

of current replacement cost over

LIFO cost of inventories

was approximately $

million at December 31, 2021 and 2020, respectively.

Note 3—Asset Acquisitions and Dispositions

All gains or losses on asset dispositions are reported

before-tax and are included

net in the “Gain on dispositions”

line on our consolidated income stat

All cash proceeds and payments are

included in the “Cash Flows From

Investing Activities” section of our consolidated

statement of cash flows.

During the year,

we completed the acquisitions of Concho Resources

(Concho) and of Shell Enterprises LLC’s

(Shell) Permian assets.

The acquisitions were accounted for

as business combinations under FASB

Topic ASC 805

using the acquisition method, which requires assets

acquired and liabilities assumed to be measured at their

acquisition date fair values.

Fair value measurements were

made for acquired assets and liabilities, and

adjustments to those measurements

may be made in subsequent periods, up to

one year from the acquisition date

as we identify new information

about facts and circumstances that

existed as of the acquisition date to

Notes to Consolidated Financial Statements

ConocoPhillips

Total inventories $ 1,219 1,208

Inventories valued on the LIFO basis $ 396 395

The estimated excess of current replacement cost over LIFO cost of inventories was approximately $ 149 million and $ 251 million at December 31, 2022 and 2021, respectively.

Note 3—Acquisitions and Dispositions

All gains or losses on asset dispositions are reported before-tax and are included net in the “ Gain on dispositions ” line on our consolidated income statement.

All cash proceeds and payments are included in the “Cash Flows From Investing Activities” section of our consolidated statement of cash flows.

Acquisition of Additional Shareholding Interest in Australia Pacific LNG Pty Ltd (APLNG)

In February 2022, we completed the acquisition of an additional 10 percent interest in APLNG from Origin Energy for approximately $ 1.4 billion, after customary adjustments, in an all-cash transaction resulting from the exercise of our preemption right.

This increased our ownership in APLNG to 47.5 percent, with Origin Energy and Sinopec owning

27.5 percent and 25.0 percent, respectively.

APLNG is reported as an equity investment in our Asia Pacific segment.

Qatar Liquefied Gas Company Limited (8) (QG8)

During 2022, we were awarded a 25 percent interest in a new joint venture (QG8) with QatarEnergy that will participate in the North Field East (NFE) LNG project.

QG8 has a 12.5 percent interest in the NFE project and is reported as an equity method investment in our Europe, Middle East and North Africa segment.

Asset Acquisition

In September 2022, we completed the acquisition of an additional working interest in certain Eagle Ford acreage in the Lower 48 segment for cash consideration of $ 236 million after customary adjustments.

This agreement was accounted for as an asset acquisition, with the consideration allocated primarily to PP&E.

During 2022, we sold our interests in certain noncore assets in our Lower 48 segment for net proceeds of $ 680 million, with no gain or loss recognized on sale.

At the time of disposition, our interest in these assets had a net carrying value of $ 680 million, consisting of $ 825 million of assets, primarily related to $ 818 million of PP&E, and $ 145 million of liabilities, primarily related to AROs.

In March 2022, we completed the divestiture of our subsidiaries that held our Indonesia assets and operations, and based on an effective date of January 1, 2021, we received net proceeds of $ 731 million after customary adjustments and recognized a $ 534 million before-tax and $ 462 million after-tax gain related to this transaction.

Together, the subsidiaries sold indirectly held our 54 percent interest in the Indonesia Corridor Block Production Sharing Contract (PSC) and 35 percent shareholding in the Transasia Pipeline Company.

At the time of the disposition, the net carrying value was approximately $ 0.2 billion, excluding $ 0.2 billion of cash and restricted cash.

The net book value consisted primarily of $ 0.3 billion of PP&E and $ 0.1 billion of ARO.

The before-tax earnings associated with the subsidiaries sold, excluding the gain on disposition noted above, were $ 138 million and $ 604 million and $ 394 million for the years ended December 31, 2022, 2021 and 2020, respectively.

Results of operations for the Indonesia interests sold were reported in our Asia Pacific segment.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

In 2022, we recorded contingent payments of $ 451 million relating to the previous dispositions of our interest in the Foster Creek Christina Lake Partnership and western Canada gas assets and our San Juan assets.

The contingent payments are recorded as gain on disposition on our consolidated income statement and are reflected within our Canada and Lower 48 segments.

In our Canada segment, the contingent payment, calculated and paid on a quarterly basis, is $ 6 million CAD for every $1 CAD by which the WCS quarterly average crude price exceeds $ 52 CAD per barrel.

In our Lower 48 segment, the contingent payment, paid on an annual basis, is calculated monthly at $ 7 million per month in which the U.S.

Henry Hub price is at or above $ 3.20 per MMBTU.

The term of contingent payments in our Canada segment ended in the second quarter of 2022 and continues through 2023 for the Lower 48 segment.

We recorded contingent payments of $ 369 million in 2021.

No payments were recorded in 2020.

During the year, we completed the acquisitions of Concho Resources Inc.

(Concho) and of Shell Enterprises LLC’s (Shell) Permian assets.

The acquisitions were accounted for as business combinations under FASB Topic ASC 805 using the acquisition method, which requires assets acquired and liabilities assumed to be measured at their acquisition date fair values.

Fair value measurements were made for acquired assets and liabilities, and adjustments to those measurements may be made in subsequent periods, up to one year from the acquisition date as we identify new information about facts and circumstances that existed as of the acquisition date to consider.

Acquisition of Concho Resources Inc.

In January 2021, we completed our acquisition of Concho,

an independent oil and gas exploration

and production

company with operations across

New Mexico and West Texas

focused in the Permian Basin.

consideration

for the all-stock transaction

was valued at $

billion, in which 1.46 shares of ConocoPhillips common stock

exchanged for each outstanding

share of Concho common stock.

In January 2021, we completed our acquisition of Concho, an independent oil and gas exploration and production company with operations across New Mexico and West Texas focused in the Permian-based Delaware and Midland Basins.

Total consideration for the all-stock transaction was valued at $ 13.1 billion, in which 1.46 shares of ConocoPhillips common stock were exchanged for each outstanding share of Concho common stock.

Total Consideration

Number of shares of Concho common stock issued

and outstanding (in thousands)*

Number of shares of Concho stock awards

outstanding (in thousands)*

Number of shares of Concho common stock issued and outstanding (in thousands)* 194,243

Number of shares of Concho stock awards outstanding (in thousands)* 1,599

Number of shares exchanged 195,842

Exchange ratio 1.46

Additional shares of ConocoPhillips common stock

issued as consideration (in thousands)

Average price per share of ConocoPhillips

common stock**

Total Consideration

Additional shares of ConocoPhillips common stock issued as consideration (in thousands) 285,929

Average price per share of ConocoPhillips common stock** $ 45.9025

Total Consideration (Millions) $ 13,125

*Outstanding as of January 15, 2021.

**Based on the ConocoPhillips average stock price on January 15, 2021.

Oil and gas properties were valued

using a discounted cash flow approach

incorporating market

participant and

internally generated price assumptions;

Oil and gas properties were valued using a discounted cash flow approach incorporating market participant and internally generated price assumptions;

production profiles;

and operating

and development cost assumptions.

Debt assumed in the acquisition was valued based on

observable market prices.

The fair values determined for

accounts receivable, accounts

payable, and most other current

assets and current liabilities were equivalent

carrying value due to their short-term

The total consideration of $

billion was allocated to the

identifiable assets and liabilities based on their fair

values as of January 15, 2021.

Assets Acquired

Millions of Dollars

and operating and development cost assumptions.

Debt assumed in the acquisition was valued based on observable market prices.

The fair values determined for accounts receivable, accounts payable, and most other current assets and current liabilities were equivalent to the carrying value due to their short-term nature.

The total consideration of $ 13.1 billion was allocated to the identifiable assets and liabilities based on their fair values as of January 15, 2021.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Assets Acquired Millions of Dollars

Cash and cash equivalents $ 382

Accounts receivable, net 745

Prepaid expenses and other current

Inventories 45

Prepaid expenses and other current assets 37

Investments and long-term receivables 333

Net properties, plants and equipment 18,923

Other assets 62

Total assets acquired $ 20,527

Liabilities Assumed

4 unchanged sentences

Long-term debt 4,696

Asset retirement obligations

and accrued environmental costs

Asset retirement obligations and accrued environmental costs 310

Deferred income taxes 1,071

Other liabilities and deferred credits 117

Total liabilities

Total liabilities assumed $ 7,402

Net assets acquired $ 13,125

Notes to Consolidated Financial Statements

ConocoPhillips

With the completion of the Concho transaction,

we acquired proved and unproved

properties of approximately

billion and $

billion, respectively.

We recognized approximately

million of transaction-related costs,

all of which were expensed in the first

quarter of 2021.

These non-recurring costs related

primarily to fees paid to advisors

and the settlement of share-

based awards for certain Concho

employees based on the terms of the Merger Agreement.

In the first quarter of 2021, we commenced

a company-wide restructuring program,

the scope of which included

combining the operations of the two companies

as well as other global restructuring activities.

We recognized

non-recurring restructuring costs

mainly for employee severance and

related incremental pension

benefit costs.

The impact from these transaction and restructuring

costs to the lines of our consolidated income statement

the year ended December 31, 2021, are below:

With the completion of the Concho transaction, we acquired proved and unproved properties of approximately $ 11.8 billion and $ 6.9 billion, respectively.

We recognized approximately $ 157 million of transaction-related costs, all of which were expensed in the first quarter of 2021.

These non-recurring costs related primarily to fees paid to advisors and the settlement of share-based awards for certain Concho employees based on the terms of the Merger Agreement.

In the first quarter of 2021, we commenced a company-wide restructuring program, the scope of which included combining the operations of the two companies as well as other global restructuring activities.

We recognized non-recurring restructuring costs mainly for employee severance and related incremental pension benefit costs.

The impact from the transaction and restructuring costs to the lines of our consolidated income statement for the year ended December 31, 2021, are below:

Millions of Dollars

Restructuring Cost

Transaction Cost Restructuring Cost Total Cost

Production and operating expenses 128 128

Selling, general and administration

Selling, general and administration expenses 135 67 202

Exploration expenses 18 8 26

other than income taxes

Taxes other than income taxes 4 2 6

Other expenses — 29 29

On February 8, 2021, we completed a debt

exchange offer

related to the debt assumed from Concho.

of the debt exchange, we recognized

an additional income tax related

restructuring charge of $

From the acquisition date through

December 31, 2021, “Total Revenues

and Other Income” and “Net Income

(Loss) Attributable to ConocoPhillips”

associated with the acquired Concho business

were approximately $

million and $

million, respectively.

The results associated with the Concho business

for the same period

include a before- and after-tax

million and $

million, respectively,

on the acquired derivative

The before-tax loss is recorded

within “Total Revenues

and Other Income” on our consolidated

$ 157 234 391

In February 2021, we completed a debt exchange offer related to the debt assumed from Concho.

As a result of the debt exchange, we recognized an additional income tax-related restructuring charge of $ 75 million.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

From the acquisition date through December 31, 2021, “Total Revenues and Other Income” and “Net Income (Loss) Attributable to ConocoPhillips” associated with the acquired Concho business were approximately $ 6,571 million and $ 2,330 million, respectively.

The results associated with the Concho business for the same period include a before- and after-tax loss of $ 305 million and $ 233 million, respectively, on the acquired derivative contracts.

The before-tax loss is recorded within “Total Revenues and Other Income” on our consolidated income statement.

See Note 12 .

Acquisition of Shell Permian Assets

In December 2021, we completed our acquisition

of Shell assets in the Permian based Delaware Basin.

accounting close date used for reporting

purposes was December 31, 2021.

Assets acquired include approximately

net acres and producing properties

located entirely in Texas.

consideration for the transaction

Oil and gas properties were valued

using a discounted cash flow approach

incorporating market

participant and

internally generated price assumptions

production profiles,

and operating and development cost

The fair values determined for

accounts receivable, accounts

payable, and most other current

assets and current

liabilities were equivalent to the carrying

value due to their short-term

The total consideration

billion was allocated to the identifiable

assets and liabilities based on their fair values

at the acquisition date.

Notes to Consolidated Financial Statements

ConocoPhillips

Assets Acquired

Millions of Dollars

In December 2021, we completed our acquisition of Shell assets in the Permian based Delaware Basin.

The accounting close date used for reporting purposes was December 31, 2021.

Assets acquired include approximately 225,000 net acres and producing properties located entirely in Texas.

Total consideration for the transaction was $ 8.6 billion.

Oil and gas properties were valued using a discounted cash flow approach incorporating market participant and internally generated price assumptions, production profiles, and operating and development cost assumptions.

The fair values determined for accounts receivable, accounts payable, and most other current assets and current liabilities were equivalent to the carrying value due to their short-term nature.

The total consideration of $ 8.6 billion was allocated to the identifiable assets and liabilities based on their fair values at the acquisition date.

Assets Acquired Millions of Dollars

Accounts receivable, net $ 337

Inventories 20

Net properties, plants and equipment 8,582

Other assets 50

Total assets acquired $ 8,989

Liabilities Assumed

2 unchanged sentences

Other accruals 20

Asset retirement obligations

and accrued environmental costs

Asset retirement obligations and accrued environmental costs 86

Other liabilities and deferred credits 36

Total liabilities

Total liabilities assumed $ 354

Net assets acquired $ 8,635

With the completion of the Shell Permian transaction,

we acquired proved and unproved

properties of

approximately $

billion and $

billion, respectively.

We recognized approximately

million of transaction-

related costs which were expensed

With the completion of the Shell Permian transaction, we acquired proved and unproved properties of approximately $ 4.2 billion and $ 4.3 billion, respectively.

We recognized approximately $ 44 million of transaction-related costs which were expensed in 2021.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Supplemental Pro Forma (unaudited)

The following tables summarize the

unaudited supplemental pro

forma financial information fo

the year ended

December 31, 2021, and 2020, as if we had completed the acquisitions

of Concho and the Shell Permian assets on

January 1, 2020.

The following tables summarize the unaudited supplemental pro forma financial information for the year ended December 31, 2021, and 2020, as if we had completed the acquisitions of Concho and the Shell Permian assets on January 1, 2020.

Millions of Dollars

Year Ended December 31, 2021

Revenues and Other Income

As reported Pro forma

Shell Pro forma

Total Revenues and Other Income $ 48,349 3,220 51,569

Income (loss) before income taxes 12,712 1,201 13,913

Net Income (Loss) attributable to

ConocoPhillips

Net Income (Loss) attributable to ConocoPhillips 8,079 920 8,999

Earnings per share:

Basic net loss

Diluted net loss

Basic net income $ 6.09 6.78

Diluted net income 6.07 6.76

Millions of Dollars

Year Ended December 31, 2020

Revenues and Other Income

As reported Pro forma

Concho Pro forma

Shell Pro forma

Total Revenues and Other Income $ 19,256 3,762 1,685 24,703

Income (loss) before income taxes ( 3,140 ) 787 ( 247 ) ( 2,600 )

Net Income (Loss) attributable to

ConocoPhillips

Net Income (Loss) attributable to ConocoPhillips ( 2,701 ) 498 ( 189 ) ( 2,392 )

Earnings per share:

1 unchanged sentence

Diluted net loss ( 2.51 ) ( 1.75 )

Notes to Consolidated Financial Statements

ConocoPhillips

The unaudited supplemental pro forma

financial information is presented

for illustration purposes

only and is not

necessarily indicative of the operating

results that would have occurred

had the transactions been completed on

January 1, 2020, nor is it necessarily indicative of future

operating results of the combined entity.

The unaudited

pro forma financial information

for the twelve-month period ending December 31, 2020

is a result of combining

the consolidated income statement

of ConocoPhillips with the results of Concho and the assets

acquired from

The pro forma results do not

include transaction-related costs,

nor any cost savings anticipated

as a result of

the transactions.

The pro forma results include adjustments

from Concho’s historical

results to reverse

impairment expense of $

billion and $

billion related to oil and gas properties

and goodwill, respectively.

Other adjustments made relate primarily to

DD&A, which is based on the unit-of-production

method, resulting

from the purchase price allocated

to properties, plants and equipment.

We believe the estimates

and assumptions

are reasonable, and the relative

effects of the transaction are

properly reflected.

Announced Acquisitions

In December 2021, we announced that we have

notified Origin Energy that we are exercising

our preemption right

to purchase an additional

percent shareholding interest

in APLNG from Origin Energy for $

billion, which

will be funded from cash on the balance sheet, before

customary adjustments.

The effective date of the

transaction will be July 1, 2020 with closing anticipated

to occur in the first quarter of 2022 subject

to Australian

government approval.

In 2020, we completed the sale of our Australia

-West asset and operations.

The sales agreement entitled us to a

million payment upon a final investment

decision (FID) of the Barossa development project.

2021, FID was announced and as such, we recognized

million gain on disposition in the first quarter

The purchaser failed to pay the FID bonus

We have commenced an arbitration

proceeding against the

purchaser to enforce our contractual

right to the $

million, plus interest accruing from the due

operations related to

this transaction are reflected in

our Asia Pacific segment.

In the second half of 2021, we sold our interests

in certain noncore assets in our Lower 48 segment for

approximately $

million after customary adjustments,

recognizing a before-tax gain

on sale of approximately

We also completed the sale of our

noncore exploration

interests in Argentina,

recognizing a before-

tax loss on disposition of $

Results of operations for

Argentina were reported

International segment.

In 2021, we recorded contingent

payments of $

million relating to previous dispositions.

The contingent

payments are recorded

as gain on disposition on our consolidated

income statement and are

reflected within our

Canada and Lower 48 segments.

In our Canada segment, the

contingent payment, calculated and paid on a

quarterly basis, is $6 million CAD for every $1 CAD by which the WCS quarterly average crude price exceeds $52

CAD per barrel

The term for contingent

payments in our Canada segment ends on

May 16, 2022.

In our Lower 48

contingent payment, paid on an annual basis, is calculated monthly at $7 million per month in which

Henry Hub price is at or above $3.20 per MMBTU

The term for contingent payments

in our Lower 48

segment goes through 2023.

contingent payments were

recorded in 2020.

Planned Dispositions

In December 2021, we entered into

an agreement to sell two subsidiaries holding

our Indonesia assets and

operations to MedcoEnergi for

billion, before customary

adjustments, with an effective

date of January 1,

The subsidiaries hold our

percent interest in the Indonesia

Corridor Block Production Sharing Contract

percent shareholding interest

in the Transasia Pipeline

The net carrying value is

approximately $

billion, which consists primarily of PP&E.

The assets met the held for sale criteria in the fourth

and as of December 31, 2021, we have reclassified

billion of PP&E to “Prepaid expenses and

current assets” and $

billion of noncurrent ARO to “Other accruals”

on our consolidated balance sheet.

before-tax earnings associated

with our Indonesia subsidiaries were $

million and $

the years ended December 31, 2021, 2020 and 2019, respectively

This transaction is expected to close in

2022, subject to regulatory approvals

and other specific conditions precedent.

Results of operations for

subsidiaries to be sold are reported within our

Asia Pacific segment.

Notes to Consolidated Financial Statements

ConocoPhillips

In January 2022, we entered into

an agreement to sell our interests

in certain noncore assets in the Lower 48

segment for $

million, before customary adjustments.

This transaction is expected to

close in the second

quarter of 2022.

The unaudited supplemental pro forma financial information is presented for illustration purposes only and is not necessarily indicative of the operating results that would have occurred had the transactions been completed on January 1, 2020, nor is it necessarily indicative of future operating results of the combined entity.

The unaudited pro forma financial information for the twelve-month period ending December 31, 2020 is a result of combining the consolidated income statement of ConocoPhillips with the results of Concho and the assets acquired from Shell.

The pro forma results do not include transaction-related costs, nor any cost savings anticipated as a result of the transactions.

The pro forma results include adjustments from Concho’s historical results to reverse impairment expense of $ 10.5 billion and $ 1.9 billion related to oil and gas properties and goodwill, respectively.

Other adjustments made relate primarily to DD&A, which is based on the unit-of-production method, resulting from the purchase price allocated to properties, plants and equipment.

We believe the estimates and assumptions are reasonable, and the relative effects of the transaction are properly reflected.

In 2020, we completed the sale of our Australia-West asset and operations.

The sales agreement entitled us to a $ 200 million payment upon a final investment decision (FID) of the Barossa development project.

In March 2021, FID was announced and as such, we recognized a $ 200 million gain on disposition in the first quarter of 2021.

The purchaser failed to pay the FID bonus when due.

We have commenced an arbitration proceeding against the purchaser to enforce our contractual right to the $ 200 million, plus interest accruing from the due date.

Results of operations related to this transaction are reflected in our Asia Pacific segment.

See Note 11 .

In the second half of 2021, we sold our interests in certain noncore assets in our Lower 48 segment for approximately $ 250 million after customary adjustments, recognizing a before-tax gain on sale of approximately $ 58 million.

We also completed the sale of our noncore exploration interests in Argentina, recognizing a before-tax loss on disposition of $ 179 million.

Results of operations for Argentina were reported in our Other International segment.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Asset Acquisition

In August 2020, we completed the acquisition

of additional Montney acreage in Canada from Kelt

Exploration Ltd.

million after customary adjustments,

plus the assumption of $

million in financing obligations

associated with partially owned infrastructure.

This acquisition consisted primarily of undeveloped

properties and

net acres in the liquids-rich Inga Fireweed

asset Montney zone, which is directly

adjacent to our

existing Montney position.

The transaction increased our Montney acreage

position to approximately

percent working interest.

This agreement was accounted

for as an asset acquisition resulting

the recognition of $

million of PP&E;

million of ARO and accrued environmental

financing obligations recorded

primarily to long-term debt.

Results of operations for

the Montney asset are

reported in our Canada segment.

In February 2020, we sold our Waddell Ranch

interests in the Permian Basin

million after customary

gain or loss was recognized on the sale.

Results of operations for

the Waddell Ranch interests

sold were reported in our Lower 48 segment.

In March 2020, we completed the sale

of our Niobrara interests

for approximately $

million after customary

adjustments and recognized a

before-tax loss on disposition

At the time of disposition, our interest

in Niobrara had a net carrying value

million, consisting primarily of $

million of PP&E and $

The before-tax losses

associated with our interests

in Niobrara, including the loss on disposition

and an impairment of $

million recorded when we signed an

agreement to sell our interests

in the fourth

quarter of 2019, were $

million and $

million for the years ended December 31,

2020 and 2019, respectively.

Results of operations for

the Niobrara interests

sold were reported in our Lower 48 segment.

In May 2020, we completed the divestiture

of our subsidiaries that held our Australia

-West assets and operations,

and based on an effective date

of January 1, 2019, we received proceeds

We recognized a

tax gain of $

million related to this transaction

At the time of disposition, the net carrying value

subsidiaries sold was approximately

billion, excluding $

billion of cash.

The net carrying value consisted

primarily of $

billion of PP&E and $

billion of other current assets offset

billion of ARO, $

deferred tax liabilities, and

billion of other liabilities.

The before-tax earnings associated

with the subsidiaries

sold, including the gain on disposition noted

above, were $

million and $

million for the years ended

December 31, 2020 and 2019, respectively.

Production from the beginning of the year through

the disposition

date in May 2020 averaged

The sales agreement entitled us to

an additional $

million upon FID of

the Barossa development project.

Results of operations for

the subsidiaries sold were reported

in our Asia Pacific

In January 2019, we entered into

agreements to sell our

percent ownership interests

in the Golden Pass LNG

Golden Pass Pipeline.

We also entered into

agreements to amend our contractual

obligations for

retaining use of the facilities.

As a result of entering into these agreements,

we recorded a before

-tax impairment

million in the first quarter of 2019 which is

included in the “Equity in earnings of affiliates”

consolidated income statement.

We completed the sale in the second

quarter of 2019.

Results of operations for

these assets were reported in our Lower

Notes to Consolidated Financial Statements

ConocoPhillips

In April 2019, we entered into

an agreement to sell two ConocoPhillips

subsidiaries to Chrysaor E&P Limited

billion plus interest and customary

adjustments, with an effective date

of January 1, 2018.

September 30, 2019, we completed the sale

for proceeds of $

billion and recognized a $

billion before-tax

billion after-tax gain

associated with this transaction in 2019.

subsidiaries sold indirectly

held our exploration and production

assets in the U.K.

At the time of disposition, the net carrying value

approximately $

billion, consisting primarily of $

billion of PP&E, $

billion of cumulative foreign currency

translation adjustments, and $

billion of deferred tax assets,

billion of ARO and negative $

billion of working capital.

The before-tax earnings associated

with the subsidiaries sold, including the gain on

dispositions noted above, was $

billion for the year ended December 31, 2019.

Results of operations for

were reported within our Europe,

Middle East and North Africa segment.

In the second quarter of 2019, we recognized

an after-tax gain

million upon the closing of the sale of our

percent interest in the Greater

Sunrise Fields to the government of Timor-Leste

Sunrise Fields were included in our Asia Pacific

In the fourth quarter of 2019, we sold our interests

in the Magnolia field and platform for

net proceeds of $

million and recognized a before-tax

At the time of sale, the net carrying value

consisted of $

million of PP&E offset by $

million of ARO.

The Magnolia results of operations

were reported within our Lower

Note 4—Investments,

Loans and Long-Term

Components of investments, loans

and long-term receivables at December 31 were:

In August 2020, we completed the acquisition of additional Montney acreage in Canada from Kelt Exploration Ltd.

for $ 382 million after customary adjustments, plus the assumption of $ 31 million in financing obligations associated with partially owned infrastructure.

This acquisition consisted primarily of undeveloped properties and included 140,000 net acres in the liquids-rich Inga Fireweed asset Montney zone, which is directly adjacent to our existing Montney position.

The transaction increased our Montney acreage position to approximately 295,000 net acres with a 100 percent working interest.

This agreement was accounted for as an asset acquisition resulting in the recognition of $ 490 million of PP&E;

$ 77 million of ARO and accrued environmental costs;

and $ 31 million of financing obligations recorded primarily to long-term debt.

Results of operations for the Montney asset are reported in our Canada segment.

In February 2020, we sold our Waddell Ranch interests in the Permian Basin for $ 184 million after customary adjustments.

No gain or loss was recognized on the sale.

Results of operations for the Waddell Ranch interests sold were reported in our Lower 48 segment.

In March 2020, we completed the sale of our Niobrara interests for approximately $ 359 million after customary adjustments and recognized a before-tax loss on disposition of $ 38 million.

At the time of disposition, our interest in Niobrara had a net carrying value of $ 397 million, consisting primarily of $ 433 million of PP&E and $ 34 million of ARO.

The before-tax loss associated with our interests in Niobrara, including the loss on disposition noted above, was $ 25 million for the year ended December 31, 2020.

Results of operations for the Niobrara interests sold were reported in our Lower 48 segment.

In May 2020, we completed the divestiture of our subsidiaries that held our Australia-West assets and operations, and based on an effective date of January 1, 2019, we received proceeds of $ 765 million.

We recognized a before-tax gain of $ 587 million related to this transaction in 2020.

At the time of disposition, the net carrying value of the subsidiaries sold was approximately $ 0.2 billion, excluding $ 0.5 billion of cash.

The net carrying value consisted primarily of $ 1.3 billion of PP&E and $ 0.1 billion of other current assets offset by $ 0.7 billion of ARO, $ 0.3 billion of deferred tax liabilities, and $ 0.2 billion of other liabilities.

The before-tax earnings associated with the subsidiaries sold, including the gain on disposition noted above, was $ 851 million for the year ended December 31, 2020.

The sales agreement entitled us to an additional $ 200 million upon FID of the Barossa development project.

Results of operations for the subsidiaries sold were reported in our Asia Pacific segment.

Note 4—Investments, Loans and Long-Term Receivables

Components of investments and long-term receivables at December 31 were:

Millions of Dollars

Equity investments $ 7,493 6,701

Loans and advances—related parties

Long-term receivables 142 98

Long-term investments in debt

Long-term investments in debt securities 522 248

Other investments 68 66

$ 8,225 7,113

Equity Investments

Affiliated companies in which we had a significant

equity investment at December 31, 2021,

percent owned joint venture

with Origin Energy (

percent) and Sinopec (

to produce CBM from the Bowen and

Surat basins in Queensland, Australia,

as well as process and export

Qatar Liquefied Gas Company Limited

percent owned joint venture

with affiliates of

QatarEnergy (

percent) and Mitsui & Co., Ltd.

percent)—produces and liquefies

natural gas from

Qatar’s North Field, as well as exports

Summarized 100 percent earnings

information for equity method

investments in affiliated

combined, was as follows:

Affiliated companies in which we had a significant equity investment at December 31, 2022, included:

• APLNG— 47.5 percent owned joint venture with Origin Energy ( 27.5 percent) and Sinopec ( 25 percent)—to produce CBM from the Bowen and Surat basins in Queensland, Australia, as well as process and export LNG.

• Qatar Liquefied Gas Company Limited (3) (QG3)— 30 percent owned joint venture with affiliates of QatarEnergy ( 68.5 percent) and Mitsui & Co., Ltd.

( 1.5 percent)—produces and liquefies natural gas from Qatar’s North Field, as well as exports LNG.

• Qatar Liquefied Gas Company Limited (8) (QG8)— 25 percent owned joint venture with QatarEnergy ( 75 percent)—participant in the North Field East (NFE) LNG project.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Summarized 100 percent earnings information for equity method investments in affiliated companies, combined, was as follows:

Millions of Dollars

2022 2021 2020

Revenues $ 18,356 11,824 7,931

Income before income taxes 8,234 3,946 1,843

Notes to Consolidated Financial Statements

ConocoPhillips

Summarized 100 percent balance sheet information

for equity method investments

in affiliated companies,

combined, was as follows:

Net income 5,507 2,557 1,426

Summarized 100 percent balance sheet information for equity method investments in affiliated companies, combined, was as follows:

Millions of Dollars

3 unchanged sentences

Noncurrent liabilities 17,244 17,465

Our share of income taxes incurred

directly by an equity method investee

is reported in equity in earnings of

affiliates, and as such is not included in income taxes

on our consolidated financial statements.

At December 31, 2021, retained earnings

million related to the undistributed

earnings of affiliated

Dividends received from affiliates

million and $

million in 2021, 2020

and 2019, respectively.

APLNG is a joint venture focused on

producing CBM from the Bowen and Surat

basins in Queensland, Australia.

Natural gas is sold to domestic

customers and LNG is processed

and exported to Asia Pacific markets.

investment in APLNG gives us access

to CBM resources in Australia

and enhances our LNG position.

of APLNG LNG is sold under two long-term sales and purchase

agreements, supplemented with sales

of additional

LNG spot cargoes targeting

the Asia Pacific markets.

Origin Energy,

an integrated Australian

energy company,

the operator of APLNG’s

production and pipeline system,

while we operate the LNG facility.

APLNG executed project financing

agreements for an $

billion project finance facility in 2012.

All amounts were

drawn from the facility.

APLNG achieved financial completion on its original

billion project finance facility

during the third quarter of 2017, resulting in the facility

being nonrecourse.

The project financing facility has been

refinanced over time and at December 31, 2021, this

facility was composed of a financing agreement

Export-Import Bank of the United States,

a commercial bank facility and

United States Private

Placement note

APLNG made its first principal and interest

repayment in March 2017 and is scheduled to

payments until September 2030.

At December 31, 2021, a balance of $

billion was outstanding on the facilities.

During the fourth quarter of 2021, Origin Energy Limited

agreed to the sale of

percent of their interest in

billion, before customary

ConocoPhillips announced in December 2021 that we were

exercising our preemption

right under the APLNG Shareholders Agreement

to purchase an additional

shareholding interest in APLNG, subject

to government approvals.

The sales price associated with this preemption

right was determined to reflect

a relevant observable market

participant view of APLNG’s

fair value which was

below the carrying value of our existing

investment in APLNG.

Based on a review of the facts and circumstances

surrounding this decline in fair value,

we concluded in the fourth quarter of 2021 the impairment

was other than

temporary under the guidance of FASB

ASC Topic 323,

and the recognition of an impairment of our existing

investment was necessary.

we recorded a noncash $

million, before-tax and

after-tax impairment

in the fourth quarter of 2021.

The impairment, which is included in the “Impairments” line on

our consolidated

income statement, had the

effect of reducing the carrying value

of our existing investment

million as of

December 31, 2021.

This carrying value is included in the “Investments

and long-term receivables” line on our

consolidated balance sheet.

Notes to Consolidated Financial Statements

ConocoPhillips

The historical cost basis of our

percent share of net assets on the books

of APLNG was $

resulting in a basis difference of $

million on our books.

The basis difference, which is substantially

associated with PP&E and subject to amortization,

has been allocated on a relative

fair value basis to individual

production license areas owned by APLNG.

Any future additional payments

are expected to be allocated

similar manner.

As the joint venture produces

natural gas from each license, we amortize

the basis difference

allocated to that license using the unit-of-production

Included in net income (loss) attributable

ConocoPhillips for 2021, 2020 and 2019 was

after-tax expense

million and $

respectively,

representing the amortization

of this basis difference on currently

producing licenses.

QG3 is a joint venture that owns an

integrated large-scale

LNG project located in Qatar.

We provided project

financing, with a current outstanding balance of $

million as described below under “Loans.”

At December 31,

2021, the book value of our equity method investment

in QG3, excluding the project financing, was

We have terminal and pipeline

use agreements with Golden Pass

LNG Terminal and affiliated

Golden Pass Pipeline

near Sabine Pass, Texas,

intended to provide us with terminal and

pipeline capacity for the receipt, storage

regasification of LNG purchased

We previously held a

percent interest in Golden

Golden Pass Pipeline, but we sold those interests

in the second quarter of 2019 while retaining the

basic use agreements.

the LNG from QG3 is being sold to markets

outside of the U.S.

As part of our normal ongoing business operations

and consistent with industry practice,

we enter into numerous

agreements with other parties to pursue

business opportunities.

Included in such activity are loans to certain

affiliated and non-affiliated

At December 31, 2021, significant loans

to affiliated companies include $

million in project financing to QG3

which is recorded within the “Accounts

and notes receivable—related

parties” line on our consolidated balance

QG3 secured project financing of $

billion in December 2005, consisting of $

billion of loans from

export credit agencies (ECA), $

billion from commercial banks

billion from ConocoPhillips.

ConocoPhillips loan facilities have

substantially the same terms as the ECA

and commercial bank facilities.

December 15, 2011, QG3 achieved financial completion

and all project loan facilities became nonrecourse

project participants.

repayments began in January 2011 and

will extend through July 2022.

Note 5—Investment in Cenovus

Our investment in Cenovus Energy

(CVE) common shares is carried on our balance sheet

at fair value.

Number of shares of CVE common stock (millions)

Ownership of issued and outstanding common

Closing price on NYSE on last trading day

Fair Value (millions

During 2021, we began to dispose of CVE shares,

million shares during the year,

recognizing proceeds of

billion of which was received during the year.

Proceeds related to the sale of our

are presented within “Cash Flows from

Investing Activities” on our consolidated

statement of cash flows.

to market conditions, we intend

to continue to decrease our investment.

All gains and losses are recognized

within “Other income (loss)” on our consolidated

income statement.

Notes to Consolidated Financial Statements

ConocoPhillips

Our share of income taxes incurred directly by an equity method investee is reported in equity in earnings of affiliates, and as such is not included in income taxes on our consolidated financial statements.

At December 31, 2022, retained earnings included $ 42 million related to the undistributed earnings of affiliated companies.

Dividends received from affiliates were $ 3,045 million, $ 1,279 million and $ 1,076 million in 2022, 2021 and 2020, respectively.

APLNG is a joint venture focused on producing CBM from the Bowen and Surat basins in Queensland, Australia.

Natural gas is sold to domestic customers and LNG is processed and exported to Asia Pacific markets.

Our investment in APLNG gives us access to CBM resources in Australia and enhances our LNG position.

The majority of APLNG LNG is sold under two long-term sales and purchase agreements, supplemented with sales of additional LNG cargoes targeting the Asia Pacific markets.

Origin Energy, an integrated Australian energy company, is the operator of APLNG’s production and pipeline system, while we operate the LNG facility.

In 2012, APLNG executed an $ 8.5 billion project finance facility that became non-recourse following financial completion in 2017.

The facility is currently composed of a financing agreement with the Export-Import Bank of the United States, a commercial bank facility and two United States Private Placement note facilities.

APLNG principal and interest payments commenced in March 2017 and are scheduled to occur bi-annually until September 2030.

At December 31, 2022, a balance of $ 5.2 billion was outstanding on the facilities.

See Note 10 .

During the fourth quarter of 2021, Origin Energy Limited agreed to the sale of 10 percent of their interest in APLNG for $ 1.645 billion, before customary adjustments.

ConocoPhillips announced in December 2021 that we were exercising our preemption right under the APLNG Shareholders Agreement to purchase an additional 10 percent shareholding interest in APLNG, subject to government approvals.

The sales price associated with this preemption right was determined to reflect a relevant observable market participant view of APLNG’s fair value which was below the carrying value of our existing investment in APLNG.

Based on a review of the facts and circumstances surrounding this decline in fair value, we concluded in the fourth quarter of 2021 the impairment was other than temporary under the guidance of FASB ASC Topic 323, and the recognition of an impairment of our existing investment was necessary.

Accordingly, we recorded a noncash $ 688 million before-tax and after-tax impairment in the fourth quarter of 2021.

The impairment was included in the “Impairments” line on our consolidated income statement.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

At December 31, 2022, the carrying value of our equity method investment in APLNG was approximately $ 6.2 billion.

The historical cost basis of our 47.5 percent share of net assets of APLNG was $ 6.1 billion, resulting in a basis difference of $ 41 million on our books.

The basis difference, which is substantially all associated with PP&E and subject to amortization, has been allocated on a relative fair value basis to individual production license areas owned by APLNG.

Any future additional payments are expected to be allocated in a similar manner.

As the joint venture produces natural gas from each license, we amortize the basis difference allocated to that license using the unit-of-production method.

Included in net income (loss) attributable to ConocoPhillips for 2022, 2021 and 2020 was after-tax expense of $ 10 million, $ 39 million and $ 41 million, respectively, representing the amortization of this basis difference on currently producing licenses.

QG3 is a joint venture that owns an integrated large-scale LNG project located in Qatar.

We provided project financing, which was fully repaid in the third quarter of 2022, as described below under “Loans.” At December 31, 2022, the book value of our equity method investment in QG3 was approximately $ 0.7 billion.

We have terminal and pipeline use agreements with Golden Pass LNG Terminal and affiliated Golden Pass Pipeline near Sabine Pass, Texas, intended to provide us with terminal and pipeline capacity for the receipt, storage and regasification of LNG purchased from QG3.

Currently, the LNG from QG3 is being sold to markets outside of the U.S.

During 2022, we were awarded a 25 percent interest in a new joint venture (QG8) with QatarEnergy that will participate in the NFE LNG project.

QG8 has a 12.5 percent interest in the NFE project.

At December 31, 2022, the book value of our equity method investment was approximately $ 0.3 billion.

See N ote 3 .

As part of our normal ongoing business operations and consistent with industry practice, we enter into numerous agreements with other parties to pursue business opportunities.

Included in such activity are loans to certain affiliated and non-affiliated companies.

At December 31, 2022, there were no outstanding loans to affiliated companies as the final loan payment related to QG3 project financing was received in the third quarter of 2022.

QG3 secured project financing of $ 4.0 billion in December 2005, consisting of $ 1.3 billion of loans from export credit agencies (ECA), $ 1.5 billion from commercial banks and $ 1.2 billion from ConocoPhillips.

The ConocoPhillips loan facilities had substantially the same terms as the ECA and commercial bank facilities.

On December 15, 2011, QG3 achieved financial completion and all project loan facilities became nonrecourse to the project participants.

Semi-annual repayments began in January 2011 and were completed in July 2022, for all loan arrangements.

Note 5—Investment in Cenovus Energy

At December 31, 2021, we held 91 million common shares of Cenovus Energy (CVE), which approximated 4.5 percent of the issued and outstanding common shares of CVE.

Those shares were carried on our balance sheet at fair value of $ 1.1 billion based on NYSE closing price of $ 12.28 per share on the last day of trading for the period.

During the first quarter of 2022, we sold our remaining 91 million shares, recognizing proceeds of $ 1.4 billion.

All gains and losses were recognized within "Other income (loss)" on our consolidated income statement.

Proceeds related to the sale of our CVE shares were included within "Cash Flows from Investing Activities" on our consolidated statement of cash flows.

See Note 13 .

Millions of Dollars

Net gain (loss) on equity securities

Net gain (loss) on equity securities sold during

Unrealized gain (loss) on equity securities

still held at

the reporting date

Note 6—Suspended Wells and

Exploration Expenses

The following table reflects the net

changes in suspended exploratory

well costs during 2021, 2020 and 2019:

2022 2021 2020

Total Net gain (loss) on equity securities $ 251 1,040 ( 855 )

Net gain (loss) on equity securities sold during the period 251 473

Unrealized gain (loss) on equity securities still held at the reporting date $ 567 ( 855 )

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 6—Suspended Wells and Exploration Expenses

The following table reflects the net changes in suspended exploratory well costs during 2022, 2021 and 2020:

Millions of Dollars

2022 2021 2020

Beginning balance at January 1 $ 660 682 1,020

Additions pending the determination of proved

Reclassifications to proved

Additions pending the determination of proved reserves 5 10 164

Reclassifications to proved properties ( 7 ) — ( 42 )

Sales of suspended wells — — ( 313 )

1 unchanged sentence

Ending balance at December 31

million of assets held for sale in Australia-West at December 31, 2019.

For additional details on suspended wells charged to dry hole expense, see the Exploration Expenses section

of this Note.

The following table provides an aging

of suspended well balances at December 31:

$ 527 660 682

The following table provides an aging of suspended well balances at December 31:

Millions of Dollars

Exploratory well costs capitalized

for a period of one year or less

Exploratory well costs capitalized

for a period greater than one year

2022 2021 2020

Exploratory well costs capitalized for a period of one year or less $ 15 4 156

Exploratory well costs capitalized for a period greater than one year 512 656 526

Ending balance $ 527 660 682

million of assets held for sale in Australia-West at December 31, 2019.

Number of projects with exploratory

well costs capitalized for

greater than one year

Notes to Consolidated Financial Statements

ConocoPhillips

The following table provides a further

aging of those exploratory

well costs that have been capitalized

than one year since the completion of drilling as of December 31, 2021:

Number of projects with exploratory well costs capitalized for a period greater than one year 17 22 22

The following table provides a further aging of those exploratory well costs that have been capitalized for more than one year since the completion of drilling as of December 31, 2022:

Millions of Dollars

Suspended Since

Total 2019-2021

2016-2018 2006-2015

Willow—Alaska (2)

Surmont—Canada

315 201 114 —

PL 1009—Norway (1)

3 unchanged sentences

PL782S—Norway (1)

Montney—Canada (1)

Other of $10 million or less each (1)(2)

Total $ 512 308 174 30

(1) Additional appraisal wells planned.

1 unchanged sentence

costs being incurred to assess development.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Exploration Expenses

The charges discussed below are included in the “Exploration

expenses” line on our consolidated income

In our Alaska segment, we recorded

a before-tax impairment

million for the entire associated

value of capitalized undeveloped

leasehold costs related to

our Alaska North Slope Gas asset.

believe the project will advance,

and there is no current market

for the asset.

In our Other International segment, our interests

in the Middle Magdalena Basin of Colombia are in force

As we had no immediate plans to perform

under existing contracts;

therefore, in 2020, we recorded

expense totaling $

million for dry hole costs of a previously

suspended well and an impairment of the associated

capitalized undeveloped leasehold

carrying value.

In our Asia Pacific segment, we recorded

before-tax expense

million related to dry hole costs

of a previously

suspended well and an impairment of the associated capitalized

undeveloped leasehold carrying value associated

with the Kamunsu East Field in Malaysia

that is no longer in our development plans.

In our Lower 48 segment, we recorded

a before-tax impairment

million for the associated carrying value

capitalized undeveloped leasehold

costs and dry hole expenses of $

million before-tax

due to our decision to

discontinue exploration

activities related to our Central Louisiana

Austin Chalk acreage.

Notes to Consolidated Financial Statements

ConocoPhillips

The charges discussed below are included in the “Exploration expenses” line on our consolidated income statement.

In the fourth quarter, we recorded a before-tax expense of $ 129 million for impairment of certain aged, suspended wells associated with Surmont in our Canada segment.

In our Europe, Middle East and North Africa segment, we recorded a before-tax expense of $ 102 million for dry hole costs associated with four operated exploration and appraisal wells and one partner operated well that were drilled in Norway in 2022.

In our Alaska segment, we recorded a before-tax impairment of $ 828 million for the entire associated carrying value of capitalized undeveloped leasehold costs related to our Alaska North Slope Gas asset.

We had stopped participating in evaluating gas line projects and did not believe a project would advance.

We remain willing to sell our Alaska North Slope gas to interested parties on a competitive basis if a market materializes in the future.

In our Other International segment, our interests in the Middle Magdalena Basin of Colombia are in force majeure.

Because we had no immediate plans to perform under existing contracts, in 2020, we recorded a before-tax expense totaling $ 84 million for dry hole costs of a previously suspended well and an impairment of the associated capitalized undeveloped leasehold carrying value.

In our Asia Pacific segment, we recorded before-tax expense of $ 50 million related to dry hole costs of a previously suspended well and an impairment of the associated capitalized undeveloped leasehold carrying value associated with the Kamunsu East Field in Malaysia that is no longer in our development plans.

Note 7—Impairments

During 2021, 2020 and 2019, we recognized the following

before-tax impairment

During 2022, 2021 and 2020, we recognized the following before-tax impairment charges:

Millions of Dollars

2022 2021 2020

Alaska $ 2 5 —

Lower 48 ( 11 ) ( 8 ) 804

Canada ( 2 ) 6 3

Europe, Middle East and North Africa ( 1 ) ( 24 ) 6

We recorded an impairment

million on our APLNG investment included within

the Asia Pacific segment.

In our Lower 48 segment, we recorded

a credit to impairment of $

million due to a decreased ARO estimate

previously sold asset, in which we retained

the ARO liability.

This was offset by recorded

impairments of $

million during the fourth quarter of 2021, related

to certain noncore assets

due to changes in development plans.

In our Europe, Middle East and North

Africa segment, we recorded a credit

to impairment of $

million due to

decreased ARO estimates on fields

in Norway which ceased production and

were fully depreciated in prior years.

We recorded impairments

million, primarily related to certain

noncore assets in the Lower 48.

decrease in the outlook for current and

long-term natural gas prices

in early 2020, we recorded

impairments of $

million, primarily for the Wind River Basin operations

area, consisting of developed

properties in the Madden Field and the Lost Cabin

Gas Plant, in the first quarter of 2020.

Additionally,

primarily to changes in development plans

solidified in the last quarter of 2020, we recognized

impairments of $

million in the Lower 48 during the fourth

In the Lower 48, we recorded impairments

million, primarily related to developed

properties in our

Niobrara asset which were written

down to fair value less costs

Note 8—Asset Retirement

Obligations and Accrued Environmental

Asset retirement obligations

and accrued environmental costs

at December 31 were:

Asia Pacific — 695 —

$ ( 12 ) 674 813

We recorded an impairment of $ 688 million on our APLNG investment included within the Asia Pacific segment.

See Note 4 and Note 13 .

In our Lower 48 segment, we recorded a credit to impairment of $ 89 million due to a decreased ARO estimate for a previously sold asset, in which we retained the ARO liability.

This was offset by recorded impairments of $ 84 million during the fourth quarter of 2021, related to certain noncore assets due to changes in development plans.

See Note 13 .

In our Europe, Middle East and North Africa segment, we recorded a credit to impairment of $ 24 million due to decreased ARO estimates on fields in Norway which ceased production and were fully depreciated in prior years.

We recorded impairments of $ 813 million, primarily related to certain noncore assets in the Lower 48.

Due to a significant decrease in the outlook for current and long-term natural gas prices in early 2020, we recorded impairments of $ 523 million, primarily for the Wind River Basin operations area, consisting of developed properties in the Madden Field and the Lost Cabin Gas Plant, in the first quarter of 2020.

Additionally, due primarily to changes in development plans solidified in the last quarter of 2020, we recognized additional impairments of $ 287 million in the Lower 48 during the fourth quarter.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 8—Asset Retirement Obligations and Accrued Environmental Costs

Asset retirement obligations and accrued environmental costs at December 31 were:

Millions of Dollars

1 unchanged sentence

Accrued environmental costs 182 187

asset retirement obligations

and accrued environmental costs

Asset retirement obligations

and accrued environmental costs

due within one year*

Long-term asset retirement obligations

and accrued environmental costs

Total asset retirement obligations and accrued environmental costs 6,562 6,113

Asset retirement obligations and accrued environmental costs due within one year* ( 161 ) ( 359 )

Long-term asset retirement obligations and accrued environmental costs $ 6,401 5,754

*Classified as a current liability on the balance sheet under “Other accruals.”

Notes to Consolidated Financial Statements

ConocoPhillips

Asset Retirement Obligations

We record the fair value

of a liability for an ARO when it is incurred (typically

when the asset is installed at the

production location).

When the liability is initially recorded, we capitalize

the associated asset retirement

increasing the carrying amount of the related

If, in subsequent

periods, our estimate of this liability

changes, we will record an adjustment

to both the liability and PP&E.

Over time, the liability increases for the

change in its present value, while the capitalized

cost depreciates over

the useful life of the related asset.

Reductions to estimated liabilities

for assets that are no longer producing

are recorded as a credit to

impairment, if

the asset had been previously impaired, or as a credit

to DD&A, if the asset had not been previously impaired

We have numerous

AROs we are required to perform

under law or contract once an asset is permanently

out of service.

Most of these obligations are not

expected to be paid until several

years, or decades, in the future

and will be funded from general company

resources at the time of removal.

Our largest individual obligations

involve plugging and abandonment of wells and

removal and disposal of offshore

oil and gas platforms around

world, as well as oil and gas production

facilities and pipelines in Alaska.

During 2021 and 2020, our overall ARO changed as

We record the fair value of a liability for an ARO when it is incurred (typically when the asset is installed at the production location).

When the liability is initially recorded, we capitalize the associated asset retirement cost by increasing the carrying amount of the related PP&E.

Over time, the liability increases for the change in its present value, while the capitalized cost depreciates over the useful life of the related asset.

If, in subsequent periods, our estimate of this liability changes, we will record an adjustment to both the liability and PP&E.

Reductions to estimated liabilities for assets that are no longer producing are recorded as a credit to impairment.

We have numerous AROs we are required to perform under law or contract once an asset is permanently taken out of service.

Most of these obligations are not expected to be paid until several years, or decades, in the future and will be funded from general company resources at the time of removal.

Our largest individual obligations involve plugging and abandonment of wells and removal and disposal of offshore oil and gas platforms around the world, as well as oil and gas production facilities and pipelines in Alaska.

During 2022 and 2021, our overall ARO changed as follows:

Millions of Dollars

2 unchanged sentences

New obligations 144 555

Changes in estimates of existing

Changes in estimates of existing obligations 681 ( 113 )

Spending on existing obligations ( 231 ) ( 164 )

2 unchanged sentences

Balance at December 31

Accrued Environmental Costs

$ 6,380 5,926

Accrued Environmental Costs

at December 31, 2021 and 2020, were $

million and $

respectively.

We had accrued environmental

million and $

million at December 31, 2021 and 2020,

respectively,

related to remediation

activities in the U.S.

We had also accrued in Corporate

million and $

million of environmental costs

associated with sites no longer in operation

at December 31,

2021 and 2020, respectively.

In addition, both December 31, 2021 and 2020, included a $

million accrual, where

the company has been named a potentially

responsible party under the Federal Comprehensive

Environmental

Response, Compensation and Liability Act, or similar state

Accrued environmental liabilities are

be paid over periods extending up to

Expected expenditures for environmental

obligations acquired in various

business combinations are discounted

using a weighted-average

percent discount factor,

resulting in an accrued balance for acquired

environmental

liabilities of $

million at December 31, 2021.

The total expected future undiscounted

payments related to the

portion of the accrued environmental costs

that have been discounted

Notes to Consolidated Financial Statements

ConocoPhillips

Total accrued environmental costs at December 31, 2022 and 2021, were $ 182 million and $ 187 million, respectively.

We had accrued environmental costs of $ 107 million and $ 135 million at December 31, 2022 and 2021, respectively, related to remediation activities in the U.S.

We had also accrued in Corporate and Other $ 59 million and $ 36 million of environmental costs associated with sites no longer in operation at December 31, 2022 and 2021, respectively.

In addition, both December 31, 2022 and 2021, included a $ 16 million accrual, where the company has been named a potentially responsible party under the Federal Comprehensive Environmental Response, Compensation and Liability Act, or similar state laws.

Accrued environmental liabilities are expected to be paid over periods extending up to 30 years.

Expected expenditures for environmental obligations acquired in various business combinations are discounted using a weighted-average 5 percent discount factor, resulting in an accrued balance for acquired environmental liabilities of $ 111 million at December 31, 2022.

The total expected future undiscounted payments related to the portion of the accrued environmental costs that have been discounted are $ 147 million.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Long-term debt at December 31 was:

Millions of Dollars

% Debentures due 2021

2.40 % Notes due 2022

1 unchanged sentence

3.35 % Notes due 2024

% Debentures due 2025

2.125 % Notes due 2024

% Debentures due 2026

8.2 % Notes due 2025

1 unchanged sentence

2.40 % Notes due 2025

6.875 % Debentures due 2026

4.95 % Notes due 2026

7.8 % Debentures due 2027

3.75 % Notes due 2027

21 unchanged sentences

3.8 % Notes due 2052

Floating rate notes due 2022 at

% during 2021 and

% during 2020

Marine Terminal

Revenue Refunding Bonds due 2031 at

% during 2020

Industrial Development Bonds due 2035 at

% during 2021 and

% during 2020

Commercial Paper at

% during 2021

4.025 % Notes due 2062

Floating rate notes due 2022 at 1.06 % – 1.41 % during 2022 and 1.02 % – 1.12 % during 2021

Marine Terminal Revenue Refunding Bonds due 2031 at 0.07 % – 4.10 % during 2022 and 0.04 % – 0.15 % during 2021

Industrial Development Bonds due 2035 at 0.07 % – 4.10 % during 2022 and 0.04 % – 0.12 % during 2021

Debt at face value 15,855 17,766

Finance leases 1,320 1,261

Net unamortized premiums, discounts and debt

issuance costs

Net unamortized premiums, discounts and debt issuance costs ( 532 ) 907

Total debt 16,643 19,934

Short-term debt ( 417 ) ( 1,200 )

Long-term debt $ 16,226 18,734

Notes to Consolidated Financial Statements

ConocoPhillips

On January 15, 2021, we completed the acquisition of Concho

in an all-stock transaction.

In the acquisition, we

assumed Concho’s publicly

traded debt, with an outstanding principal balance

billion, which was recorded

at fair value of $

billion on the acquisition date.

The adjustment to fair value of the senior notes

approximately $

billion on the acquisition date will be amortized as

an adjustment to interest

expense over the

remaining contractual terms

of the senior notes.

In the first quarter of 2021, we completed

a debt exchange offer

related to the debt assumed from

approximately $

billion in aggregate principal amount

of Concho’s senior notes

offered in the exchange,

percent, or approximately

billion, was tendered and accepted.

The new debt issued by ConocoPhillips had

the same interest rates

and maturity dates as the Concho senior notes.

The portion not exchanged, approximately

million, remained outstanding across

five series of senior notes issued by Concho.

The debt exchange was

treated as a debt modification for

accounting purposes resulting in a portion

of the unamortized fair value

adjustment of the Concho senior notes allocated

to the new debt issued by ConocoPhillips on the settlement

of the exchange.

The new debt issued in the exchange is

fully and unconditionally guaranteed by

ConocoPhillips

We have a revolving

credit facility totaling $

billion with an expiration date

Our revolving credit

facility may be used for direct

bank borrowings, the issuance of letters

of credit totaling up to $

million, or as

support for our commercial paper program.

The revolving credit facility is broadly

syndicated among financial

institutions and does not contain any

material adverse change provisions

or any covenants requiring maintenance

of specified financial ratios or credit ratings.

The facility agreement contains

a cross-default provision

the failure to pay principal or

interest on other debt obligations

million or more by ConocoPhillips, or any

of its consolidated subsidiaries.

The amount of the facility is not subject to redetermination

prior to its expiration

Credit facility borrowings may

bear interest at a margin above

rates offered

by certain designated banks in the

London interbank market or

at a margin above the overnight federal

funds rate or prime rates

offered by certain

designated banks in the U.S.

The facility agreement calls for

commitment fees on available,

but unused, amounts.

The agreement also contains early termination

rights if our current directors

or their approved successors

be a majority of the Board of Directors.

The revolving credit facility supports

our ability to issue up to $

billion of commercial paper,

which is primarily a

funding source for short-term

working capital needs.

Commercial paper maturities are generally

With no commercial paper outstanding

direct borrowings or letters

of credit, we had access to

billion in available borrowing capacity

under our revolving credit facility

at December 31, 2021.

direct borrowings, letters

of credit, and $

million of commercial paper outstanding

as of December 31, 2020.

For information on Finance Leases,

The current credit ratings on our

long-term debt are:

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

In December 2022, the company retired $ 329 million principal amount of our 2.40 percent Notes at the natural maturity date.

In May 2022, we redeemed $ 1,250 million principal amount of our 4.95 percent Notes due 2026 .

We paid premiums above face value of $ 79 million to redeem the debt and recognized a loss on debt extinguishment of $ 83 million which is included in the "Other expenses" line on our consolidated income statement.

We also paid $ 500 million to retire the outstanding principal amount of the floating rate notes due 2022 at maturity.

In the first quarter of 2022, we completed a debt refinancing consisting of three concurrent transactions:

a tender offer to repurchase existing debt for cash;

exchange offers to retire certain debt in exchange for new debt and cash;

and a new debt issuance to partially fund the cash paid in the tender and exchange offers.

In March 2022, we repurchased a total of $ 2,716 million aggregate principal amount of debt as listed below.

We paid premiums above face value of $ 333 million to repurchase these debt instruments and recognized a gain on debt extinguishment of $ 155 million which is included in the "Other expenses" line on our consolidated income statement.

• 3.75 % Notes due 2027 with principal of $ 1,000 million (partial repurchase of $ 804 million)

• 4.3 % Notes due 2028 with principal of $ 1,000 million (partial repurchase of $ 777 million)

• 2.4 % Notes due 2031 with principal of $ 500 million (partial repurchase of $ 273 million)

• 4.875 % Notes due 2047 with principal of $ 800 million (partial repurchase of $ 481 million)

• 4.85 % Notes due 2048 with principal of $ 600 million (partial repurchase of $ 381 million)

Exchange Offers

Also in March 2022, we completed two concurrent debt exchange offers through which $ 2,544 million of aggregate principal of existing notes was tendered and accepted in exchange for a combination of new notes and cash.

The debt exchange offers were treated as debt modifications for accounting purposes resulting in a portion of the unamortized debt discount, premiums and debt issuance costs of the existing notes being allocated to the new notes on the settlement dates of the exchange offers.

We paid premiums above face value of $ 883 million, comprised of $ 872 million of cash as well as new notes, which were capitalized as additional debt discount.

We incurred expenses of $ 28 million in the exchanges which are included in the "Other expenses" line on our consolidated income statement.

The notes tendered and accepted in the exchange offers were:

• 7.0 % Debentures due 2029 with principal amount of $ 200 million (partial exchange of $ 88 million)

• 6.95 % Notes due 2029 with principal amount of $ 1,549 million (partial exchange of $ 354 million)

• 7.4 % Notes due 2031 with principal amount of $ 500 million (partial exchange of $ 118 million)

• 7.25 % Notes due 2031 with principal amount of $ 500 million (partial exchange of $ 100 million)

• 7.2 % Notes due 2031 with principal amount of $ 575 million (partial exchange of $ 128 million)

• 5.95 % Notes due 2036 with principal amount of $ 500 million (partial exchange of $ 174 million)

• 5.9 % Notes due 2038 with principal amount of $ 600 million (partial exchange of $ 250 million)

• 6.5 % Notes due 2039 with principal amount of $ 2,750 million (partial exchange of $ 1,162 million)

• 5.95 % Notes due 2046 with principal amount of $ 500 million (partial exchange of $ 171 million)

The notes tendered and accepted were exchanged for the following new notes:

• 3.758 % Notes due 2042 with principal amount of $ 785 million

• 4.025 % Notes due 2062 with principal amount of $ 1,770 million

New Debt Issuance

In March 2022, we issued the following new notes consisting of:

• 2.125 % Notes due 2024 with principal of $ 900 million

• 2.4 % Note due 2025 with principal of $ 900 million

• 3.8 % Note due 2052 with principal of $ 1,100 million

In February 2022, we refinanced our revolving credit facility from a total borrowing capacity of $ 6.0 billion to $ 5.5 billion with an expiration date of February 2027.

Our revolving credit facility may be used for direct bank borrowings, the issuance of letters of credit totaling up to $ 500 million, or as support for our commercial paper program.

The revolving credit facility is broadly syndicated among financial institutions and does not contain any material adverse change provisions or any covenants requiring maintenance of specified financial ratios or credit ratings.

The facility agreement contains a cross-default provision relating to the failure to pay principal or interest on other debt obligations of $ 200 million or more by ConocoPhillips, or any of its consolidated subsidiaries.

The amount of the facility is not subject to redetermination prior to its expiration date.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Credit facility borrowings may bear interest at a margin above the Secured Overnight Financing Rate (SOFR).

The facility agreement calls for commitment fees on available, but unused, amounts.

The facility agreement also contains early termination rights if our current directors or their approved successors cease to be a majority of the Board of Directors.

The revolving credit facility supports our ability to issue up to $ 5.5 billion of commercial paper.

Commercial paper is generally limited to maturities of 90 days and is included in short-term debt on our consolidated balance sheet.

With no commercial paper outstanding and no direct borrowings or letters of credit, we had access to $ 5.5 billion in available borrowing capacity under our revolving credit facility at December 31, 2022.

At December 31, 2021, we had no commercial paper outstanding and no direct borrowings or letters of credit issued.

In January 2021, we completed the acquisition of Concho in an all-stock transaction.

In the acquisition, we assumed Concho’s publicly traded debt, with an outstanding principal balance of $ 3.9 billion, which was recorded at fair value of $ 4.7 billion on the acquisition date.

The adjustment to fair value of the senior notes of approximately $ 0.8 billion on the acquisition date will be amortized as an adjustment to interest expense over the remaining contractual terms of the senior notes.

In February 2021, we completed a debt exchange offer related to the debt assumed from Concho.

Of the approximately $ 3.9 billion in aggregate principal amount of Concho’s senior notes offered in the exchange, 98 percent, or approximately $ 3.8 billion, was tendered and accepted.

The new debt issued by ConocoPhillips had the same interest rates and maturity dates as the Concho senior notes.

The portion not exchanged, approximately $ 67 million, remained outstanding across five series of senior notes issued by Concho.

The debt exchange was treated as a debt modification for accounting purposes resulting in a portion of the unamortized fair value adjustment of the Concho senior notes allocated to the new debt issued by ConocoPhillips on the settlement date of the exchange.

The new debt issued in the exchange is fully and unconditionally guaranteed by ConocoPhillips Company.

For information on Finance Leases, see Note 15 .

The current credit ratings on our long-term debt are:

“A” with a “stable” outlook

“A-” with a “stable” outlook

“A3” with a “positive” outlook

We do not have any

ratings triggers on any of our corporate

debt that would cause an automatic default,

thereby impact our access to liquidity,

upon downgrade of our credit ratings.

If our credit ratings are downgraded

from their current levels, it could

increase the cost of corporate

debt available to us and restrict

our access to the

commercial paper markets.

If our credit rating were to

deteriorate to a level

prohibiting us from accessing the

commercial paper market, we

would still be able to access funds under our revolving

credit facility.

At both December 31, 2021 and 2020, we had $

million of certain variable rate

demand bonds (VRDBs)

outstanding with maturities ranging

through 2035.

The VRDBs are redeemable at the option of the bondholders

on any business day.

If they are ever redeemed, we have

the ability and intent to refinance on

a long-term basis,

therefore, the VRDBs are included

in the “Long-term debt” line on our consolidated balance sheet.

Notes to Consolidated Financial Statements

ConocoPhillips

"A2" with a "stable" outlook

We do not have any ratings triggers on any of our corporate debt that would cause an automatic default, and thereby impact our access to liquidity upon downgrade of our credit ratings.

If our credit ratings are downgraded from their current levels, it could increase the cost of corporate debt available to us and restrict our access to the commercial paper markets.

If our credit ratings were to deteriorate to a level prohibiting us from accessing the commercial paper market, we would still be able to access funds under our revolving credit facility.

At both December 31, 2022 and 2021, we had $ 283 million of certain variable rate demand bonds (VRDBs) outstanding with maturities ranging through 2035.

The VRDBs are redeemable at the option of the bondholders on any business day.

If they are ever redeemed, we have the ability and intent to refinance on a long-term basis, therefore, the VRDBs are included in the “Long-term debt” line on our consolidated balance sheet.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 10—Guarantees

At December 31, 2021, 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

newly issued or modified guarantees.

Unless the carrying amount of the liability is noted below,

recognized a liability 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.

At December 31, 2022, 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 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.

APLNG Guarantees

At December 31, 2021, we had outstanding

multiple guarantees in connection with our

percent ownership

interest in APLNG.

The following is a description of the guarantees

with values calculated utilizing December 2021

exchange rates:

During the third quarter of 2016, we issued a guarantee

to facilitate the withdrawal

of our pro-rata

portion of the funds in a project finance reserve account.

We estimate the remaining

guarantee to be

Our maximum exposure under this guarantee

is approximately $

may become payable if an enforcement

action is commenced by the project finance lenders

At December 31, 2021, the carrying value of this

guarantee is approximately

In conjunction with our original purchase of an ownership

interest in APLNG from Origin Energy

October 2008, we agreed to reimburse

Origin Energy for our share of the existing

contingent liability

arising under guarantees of an existing

obligation of APLNG to deliver natural

gas under several sales

The final guarantee expires

in the fourth quarter of 2041.

Our maximum potential liability

for future payments, or cost

of volume delivery, under

these guarantees is estimated

billion in the event of intentional

or reckless breach) and would become payable

if APLNG fails to

meet its obligations under these agreements

and the obligations cannot otherwise be mitigated.

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 co-ventures do not

make necessary equity contributions

We have guaranteed

the performance of APLNG with regard

to certain other contracts

connection with the project’s continued

The guarantees have

remaining terms of

or the life of the venture.

Our maximum potential amount of future payments

related to these

guarantees is approximately

million and would become payable

if APLNG does not perform.

December 31, 2021, the carrying value of these guarantees

was approximately $

At December 31, 2022, we had outstanding multiple guarantees in connection with our 47.5 percent ownership interest in APLNG.

The following is a description of the guarantees with values calculated utilizing December 2022 exchange rates:

• During the third quarter of 2016, we issued a guarantee to facilitate the withdrawal of our pro-rata portion of the funds in a project finance reserve account.

We estimate the remaining term of this guarantee to be eight years .

Our maximum exposure under this guarantee is approximately $ 210 million and may become payable if an enforcement action is commenced by the project finance lenders against APLNG.

At December 31, 2022, the carrying value of this guarantee was approximately $ 14 million.

• In conjunction with our original purchase of an ownership interest in APLNG from Origin Energy Limited in October 2008, we agreed to reimburse Origin Energy Limited for our share of the existing contingent liability arising under guarantees of an existing obligation of APLNG to deliver natural gas under several sales agreements.

The final guarantee expires in the fourth quarter of 2041.

Our maximum potential liability for future payments, or cost of volume delivery, under these guarantees is estimated to be $ 780 million ($ 1.3 billion in the event of intentional or reckless breach) and would 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 co-ventures do not make necessary equity contributions into APLNG.

• We have guaranteed the performance of APLNG with regard to certain other contracts executed in connection with the project’s continued development.

The guarantees have remaining terms of 14 to 23 years or the life of the venture.

Our maximum potential amount of future payments related to these guarantees is approximately $ 290 million and would become payable if APLNG does not perform.

At December 31, 2022, the carrying value of these guarantees was approximately $ 20 million.

QG8 Guarantee

We have guaranteed our portion of certain fiscal and other joint venture obligations as a shareholder in QG8.

This guarantee has an approximate 30 -year term with no maximum limit.

At December 31, 2022, the carrying value of this guarantee was approximately $ 7 million.

Other Guarantees

We have other guarantees

with maximum future potential payment

amounts totaling approximately

which consist primarily of guarantees

of the residual value of leased office buildings, guarantees

of the residual

value of corporate aircraft,

and a guarantee for our portion

of a joint venture’s

project finance reserve accounts.

These guarantees have remaining

one to five years

and would become payable if certain asset

lower than guaranteed amounts

at the end of the lease or contract term, business

conditions decline at

guaranteed entities, or as a result

of nonperformance of contractual

terms by guaranteed parties.

December 31, 2021, the carrying value of these guarantees

was approximately $

We have other guarantees with maximum future potential payment amounts totaling approximately $ 600 million, which consist primarily of guarantees of the residual value of leased office buildings and guarantees of the residual value of corporate aircraft.

These guarantees have remaining terms of three to four years and would become payable if certain asset values are lower than guaranteed amounts at the end of the lease or contract term, business conditions decline at guaranteed entities, or as a result of nonperformance of contractual terms by guaranteed parties.

At December 31, 2022, there was no carrying value associated with these guarantees.

Indemnifications

Over the years, we have entered

into agreements to sell ownership

interests in certain legal

entities, joint ventures

and assets that gave rise to

qualifying indemnifications.

These agreements include indemnifications for

environmental liabilities.

The carrying amount recorded for

these indemnifications at December 31, 2021, was

approximately $

Those related to environmental

issues have terms that are generally

indefinite and the

maximum amounts

of future payments are generally

Although it is reasonably possible future

payments may exceed

amounts recorded, due to

the nature of the indemnifications, it is not possible to

reasonable estimate of the maximum potential

amount of future payments.

for additional

information about environmental

Notes to Consolidated Financial Statements

ConocoPhillips

Over the years, we have entered into agreements to sell ownership interests in certain legal entities, joint ventures and assets that gave rise to qualifying indemnifications.

These agreements include indemnifications for taxes and environmental liabilities.

The carrying amount recorded for these indemnifications at December 31, 2022, was approximately $ 20 million.

Those related to environmental issues have terms that are generally indefinite and the maximum amounts of future payments are generally unlimited.

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.

See Note 11 for additional information about environmental liabilities.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 11—Contingencies and Commitments

A number of lawsuits involving a variety

of claims arising in the ordinary course of business

have been filed against

ConocoPhillips.

We also may be required

to remove or mitigate

the effects on the environment

of the placement,

storage, disposal or release of

certain chemical, mineral and petroleum

substances at various

active and inactive

We regularly assess the need for accounting

recognition or disclosure of these contingencies.

In the case of

all known contingencies (other than those related

to income taxes), we accrue

a liability when the loss is probable

and the amount is reasonably estimable.

If a range of amounts can be reasonably

estimated and no amount within

the range is a better estimate

than any other amount, then the low end of the range

We do not reduce

these liabilities for potential insurance

or third-party recoveries.

We accrue receivables for

insurance or other

third-party recoveries when applicable.

With respect to income tax-related

contingencies, we use a cumulative

probability-weighted loss

accrual in cases where sustaining a tax

position is less than certain.

additional information about income tax

-related contingencies.

Based on currently available information,

we believe it is remote that future

costs related to known

liability exposures will exceed

current accruals by an amount that

would have a material adverse

impact on our

consolidated financial statements.

As we learn new facts concerning contingencies,

we reassess our position both

with respect to accrued liabilities and other potential

Estimates particularly sensitive to future

include contingent liabilities recorded

for environmental

remediation, tax and legal matters.

Estimated future

environmental remediation

costs are subject to change due to

such factors as the uncertain

magnitude of cleanup

costs, the unknown time and extent of such

remedial actions that may be required,

and the determination of our

liability in proportion to that of other responsible

Estimated future costs

related to tax and legal

are subject to change as events

evolve and as additional information

becomes available during the administrative

and litigation processes.

A number of lawsuits involving a variety of claims arising in the ordinary course of business have been filed against ConocoPhillips.

We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites.

We regularly assess the need for accounting recognition or disclosure of these contingencies.

In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable.

If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the low end of the range is accrued.

We do not reduce these liabilities for potential insurance or third-party recoveries.

We accrue receivables for insurance or other third-party recoveries when applicable.

With respect to income tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

See Note 17 , for additional information about income tax-related contingencies.

Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements.

As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures.

Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters.

Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required, and the determination of our liability in proportion to that of other responsible parties.

Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.

Environmental

We are subject to international,

federal, state and

local environmental laws

and regulations and record

environmental liabilities based on

management’s best estimates

These estimates are based on currently

facts, existing technology,

and presently enacted laws and regulations,

taking into account stakeholder

business considerations.

When measuring environmental liabilities,

we also consider our prior experience in

remediation of contaminated

sites, other companies’ cleanup experience, and data

released by the U.S.

other organizations.

We consider unasserted claims in our determination

of environmental liabilities,

accrue them in the period they are both probable and

reasonably estimable.

Although liability of those potentially responsible

for environmental remediation

costs is generally joint and

several for federal

sites and frequently so for other

sites, we are usually only one of many companies

particular site.

Due to the joint and several liabilities, we could

be responsible for all cleanup costs related

site at which we have been designated

as a potentially responsible party.

We have been successful to

sharing cleanup costs with other financially sound

Many of the sites at which we are potentially

responsible are still under investigation

by the EPA or

the agency concerned.

Prior to actual cleanup, those

potentially responsible normally assess the

site conditions, apportion responsibility and determine

the appropriate

In some instances, we may have

no liability or may attain a settlement

of liability.

Where it appears

that other potentially responsible parties may

be financially unable to bear their proportional share,

this inability in estimating our potential liability,

and we adjust our accruals accordingly.

As a result of various

acquisitions in the past, we assumed certain environmental

Some of these environmental obligations

are mitigated by indemnifications

made by others for our benefit, and some of the indemnifications

are subject to

dollar limits and time limits.

We are currently participating

in environmental assessments

and cleanups at numerous federal

Superfund and

comparable state and

international sites.

After an assessment of environmental

exposures for cleanup and other

costs, we make accruals on an

undiscounted basis (except

those acquired in a purchase business combination,

which we record on a discounted

basis) for planned investigation

and remediation activities for sites where

probable future costs will be incurred

and these costs can be reasonably estimated.

We have not reduced

accruals for possible insurance recoveries.

In the future, we may be involved

in additional environmental

assessments, cleanups and proceedings.

for a summary of our accrued environmental

Notes to Consolidated Financial Statements

ConocoPhillips

We are subject to international, federal, state and local environmental laws and regulations and record accruals for environmental liabilities based on management’s best estimates.

These estimates are based on currently available facts, existing technology, and presently enacted laws and regulations, taking into account stakeholder and business considerations.

When measuring environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the U.S.

EPA or other organizations.

We consider unasserted claims in our determination of environmental liabilities, and we accrue them in the period they are both probable and reasonably estimable.

Although liability of those potentially responsible for environmental remediation costs is generally joint and several for federal sites and frequently so for other sites, we are usually only one of many companies cited at a particular site.

Due to the joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party.

We have been successful to date in sharing cleanup costs with other financially sound companies.

Many of the sites at which we are potentially responsible are still under investigation by the EPA or the agency concerned.

Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation.

In some instances, we may have no liability or may attain a settlement of liability.

Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly.

As a result of various acquisitions in the past, we assumed certain environmental obligations.

Some of these environmental obligations are mitigated by indemnifications made by others for our benefit, and some of the indemnifications are subject to dollar limits and time limits.

We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state and international sites.

After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those acquired in a purchase business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated.

We have not reduced these accruals for possible insurance recoveries.

In the future, we may be involved in additional environmental assessments, cleanups and proceedings.

See Note 8 for a summary of our accrued environmental liabilities.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Litigation and Other Contingencies

We are subject to various

lawsuits and claims including but not limited to matters

involving oil and gas royalty

severance tax payments,

gas measurement and valuation

methods, contract disputes,

environmental damages,

climate change, personal injury,

and property damage.

Our primary exposures for such matters

relate to alleged

royalty and tax underpayments

on certain federal, state

and privately owned properties,

claims of alleged

environmental contamination

and damages from historic operations

and climate change.

We will continue to

defend ourselves vigorously

in these matters.

Our legal organization

applies its knowledge, experience and professional

judgment to the specific characteristics

of our cases, employing a litigation management

process to manage and monitor the legal

proceedings against us.

Our process facilitates the

early evaluation and quantification

of potential exposures in individual cases.

process also enables us to track those

cases that have been scheduled for

trial and/or mediation.

professional judgment and experience

in using these litigation management

tools and available information

current developments in all our cases,

our legal organization regularly

assesses the adequacy of current accruals

and determines if adjustment of existing

accruals, or establishment of new accruals, is

We have contingent

liabilities resulting from throughput agreements

with pipeline and processing companies not

associated with financing arrangements.

Under these agreements, we may be required

to provide any such

company with additional funds through

advances and penalties for fees related

to throughput capacity not utilized.

In addition, at December 31, 2021, we had performance

obligations secured by letters

of credit of $

million (issued as direct bank letters of credit)

related to various

purchase commitments for materials,

commercial activities and services incident to the ordinary

conduct of business.

In 2007, ConocoPhillips was unable to reach

agreement with respect to the empresa

mixta structure mandated

the Venezuelan government’s

Nationalization Decree.

As a result, Venezuela’s

national oil company,

Venezuela, S.A.

or its affiliates, directly assumed control

over ConocoPhillips’ interests

in the Petrozuata

and Hamaca heavy oil ventures and

the offshore Corocoro development

In response to this expropriation,

ConocoPhillips initiated international

arbitration on November 2, 2007, with the ICSID.

On September 3, 2013, an

ICSID arbitration tribunal held that Venezuela

unlawfully expropriated ConocoPhillips’

significant oil investments in

On January 17, 2017, the Tribunal reconfirmed

the decision that the expropriation

was unlawful.

March 2019, the Tribunal unanimously

ordered the government of Venezuela

to pay ConocoPhillips approximately

billion in compensation for the government’s

unlawful expropriation of the company’s

investments in

Venezuela in 2007.

On August 29, 2019, the ICSID Tribunal

issued a decision rectifying the award and

by approximately $

The award now stands at

billion plus interest.

The government of Venezuela

sought annulment of the award,

which automatically stayed

enforcement of the award.

On September 29, 2021,

the ICSID annulment committee lifted the

stay of enforcement

of the award.

The annulment proceedings have

been suspended as a result of Venezuela’s

non-payment of advances

to cover the costs of these proceedings.

In 2014, ConocoPhillips filed a separate

and independent arbitration under the rules

of the ICC against PDVSA

under the contracts that had established

the Petrozuata

and Hamaca projects.

The ICC Tribunal issued

April 2018, finding that PDVSA owed ConocoPhillips

approximately $

billion under their agreements in connection

with the expropriation of the projects

and other pre-expropriation fiscal

In August 2018, ConocoPhillips

entered into a settlement with PDVSA to recover the full amount of this ICC award, plus interest through the

payment period, including initial payments totaling approximately $ 500 million within a period of 90 days from the

time of signing of the settlement agreement.

The balance of the settlement is to be paid quarterly over a period of

four and a half years.

Per the settlement, PDVSA recognized

the ICC award as a judgment in various

jurisdictions,

and ConocoPhillips agreed to suspend

its legal enforcement actions.

ConocoPhillips sent notices of default to

PDVSA on October 14 and November 12, 2019, and

to date PDVSA has failed to

cure its breach.

ConocoPhillips has resumed legal enforcement

ConocoPhillips has received approximately

million in connection with the ICC award.

ConocoPhillips has ensured that

the settlement and any actions taken

enforcement thereof meet all

appropriate U.S.

requirements, including those related

to any applicable

sanctions imposed by the U.S.

Notes to Consolidated Financial Statements

ConocoPhillips

In 2016, ConocoPhillips filed a separate

and independent arbitration under the rules

of the ICC against PDVSA

under the contracts that had established

the Corocoro Project.

On August 2, 2019, the ICC Tribunal

ConocoPhillips approximately

million plus interest under the Corocoro

ConocoPhillips is seeking

recognition and enforcement

of the award in various jurisdictions.

ConocoPhillips has ensured that all the actions

related to the award meet

all appropriate U.S.

requirements, including those related

to any applicable

sanctions imposed by the U.S.

The Office of Natural Resources

Revenue (ONRR) has conducted audits

of ConocoPhillips’ payment of royalties

federal lands and has issued multiple orders

to pay additional royalties

to the federal government.

ConocoPhillips

and the ONRR entered into a settlement

agreement on March 23, 2021, to resolve

All orders and

associated appeals have been withdrawn

with prejudice.

Beginning in 2017, governmental and

other entities in several states

have filed lawsuits against

gas companies, including ConocoPhillips,

seeking compensatory damages and equitable relief

to abate alleged

climate change impacts.

Additional lawsuits with similar allegations

are expected to be filed.

claimed by plaintiffs are unspecified and

the legal and factual issues involved

in these cases are unprecedented.

ConocoPhillips believes these lawsuits are

factually and legally meritless and are

an inappropriate vehicle to

address the challenges associated with climate

change and will vigorously defend

against such lawsuits.

Several Louisiana parishes and the State

of Louisiana have filed

lawsuits under Louisiana’s

State and Local

Coastal Resources Management

Act (SLCRMA) against oil and gas

companies, including ConocoPhillips, seeking

compensatory damages for contamination

and erosion of the Louisiana coastline allegedly

caused by historical oil

and gas operations.

ConocoPhillips entities are defendants

of the lawsuits and will vigorously defend

Because Plaintiffs’ SLCRMA theories are

unprecedented, there is uncertainty

about these claims (both as to

scope and damages) and we continue to

evaluate our exposure in these lawsuits

In October 2020, the Bureau of Safety and

Environmental Enforcement

(BSEE) ordered the prior owners of Outer

Continental Shelf (OCS) Lease P-0166,

including ConocoPhillips, to decommission

the lease facilities, including two

offshore platforms located

near Carpinteria, California.

This order was sent after the current

owner of OCS Lease

P-0166 relinquished the lease and

abandoned the lease platforms and facilities.

BSEE’s order to

ConocoPhillips is

premised on its connection to Phillips Petroleum

a legacy company of ConocoPhillips,

percent interest in this

lease and operated these facilities, but

sold its interest approximately

ConocoPhillips continues to evaluate

our exposure in these lawsuits.

On May 10, 2021, ConocoPhillips filed arbitration

under the rules of the Singapore International

Arbitration Centre

(SIAC) against Santos KOTN

and Santos Limited for

their failure to timely pay the $

million bonus due

upon FID of the Barossa development project

under the sale and purchase agreement.

Santos Limited have filed a response

and counterclaim, and the arbitration

In July 2021, a federal securities class action

was filed against Concho, certain

of Concho’s officers,

ConocoPhillips as Concho’s

successor in the United States District Court

for the Southern District of Texas.

October 21, 2021, the court issued an order appointing

Utah Retirement Systems

and the Construction Laborers

Pension Trust

for Southern California as lead plaintiffs

(Lead Plaintiffs).

On January 7, 2022, the Lead Plaintiffs filed

their consolidated complaint alleging that

Concho made materially false and misleading

statements regarding

business and operations in violation of the federal

securities laws and seeking unspecified damages, attorneys’

fees, costs, equitable/injunctive

relief, and such

other relief that may be deemed appropriate.

We believe the

allegations in the action are without merit, and we

intend to vigorously defend

this litigation.

Long-Term Throughput

Agreements and Take

-or-Pay Agreements

We have certain throughput

agreements and take-or-pay

agreements in support of financing arrangements.

agreements typically provide for

natural gas or crude oil transportation

to be used in the ordinary course of

The aggregate amounts of estimated

payments under these various agreements

and 2027 and after—$

payments under the agreements were

million in 2021, $

million in 2020 and $

million in 2019.

Notes to Consolidated Financial Statements

ConocoPhillips

We are subject to various lawsuits and claims including but not limited to matters involving oil and gas royalty and severance tax payments, gas measurement and valuation methods, contract disputes, environmental damages, climate change, personal injury, and property damage.

Our primary exposures for such matters relate to alleged royalty and tax underpayments on certain federal, state and privately owned properties, claims of alleged environmental contamination and damages from historic operations, and climate change.

We will continue to defend ourselves vigorously in these matters.

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us.

Our process facilitates the early evaluation and quantification of potential exposures in individual cases.

This process also enables us to track those cases that have been scheduled for trial and/or mediation.

Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements.

Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized.

In addition, at December 31, 2022, we had performance obligations secured by letters of credit of $ 368 million (issued as direct bank letters of credit) related to various purchase commitments for materials, supplies, commercial activities and services incident to the ordinary conduct of business.

In 2007, ConocoPhillips was unable to reach agreement with respect to the empresa mixta structure mandated by the Venezuelan government’s Nationalization Decree.

As a result, Venezuela’s national oil company, Petróleos de Venezuela, S.A.

(PDVSA), or its affiliates, directly assumed control over ConocoPhillips’ interests in the Petrozuata and Hamaca heavy oil ventures and the offshore Corocoro development project.

In response to this expropriation, ConocoPhillips initiated international arbitration on November 2, 2007, with the ICSID.

On September 3, 2013, an ICSID arbitration tribunal held that Venezuela unlawfully expropriated ConocoPhillips’ significant oil investments in June 2007.

On January 17, 2017, the Tribunal reconfirmed the decision that the expropriation was unlawful.

In March 2019, the Tribunal unanimously ordered the government of Venezuela to pay ConocoPhillips approximately $ 8.7 billion in compensation for the government’s unlawful expropriation of the company’s investments in Venezuela in 2007.

On August 29, 2019, the ICSID Tribunal issued a decision rectifying the award and reducing it by approximately $ 227 million.

The award now stands at $ 8.5 billion plus interest.

The government of Venezuela sought annulment of the award, which automatically stayed enforcement of the award.

On September 29, 2021, the ICSID annulment committee lifted the stay of enforcement of the award.

The annulment proceedings are underway.

In 2014, ConocoPhillips filed a separate and independent arbitration under the rules of the ICC against PDVSA under the contracts that had established the Petrozuata and Hamaca projects.

The ICC Tribunal issued an award in April 2018, finding that PDVSA owed ConocoPhillips approximately $ 2 billion under their agreements in connection with the expropriation of the projects and other pre-expropriation fiscal measures.

In August 2018, ConocoPhillips entered into a settlement with PDVSA to recover the full amount of this ICC award, plus interest through the payment period, including initial payments totaling approximately $ 500 million within a period of 90 days from the time of signing of the settlement agreement.

The balance of the settlement is to be paid quarterly over a period of four and a half years.

Per the settlement, PDVSA recognized the ICC award as a judgment in various jurisdictions, and ConocoPhillips agreed to suspend its legal enforcement actions.

ConocoPhillips sent notices of default to PDVSA on October 14 and November 12, 2019, and to date PDVSA has failed to cure its breach.

As a result, ConocoPhillips has resumed legal enforcement actions.

To date, ConocoPhillips has received approximately $ 774 million in connection with the ICC award.

ConocoPhillips has ensured that the settlement and any actions taken in enforcement thereof meet all appropriate U.S.

regulatory requirements, including those related to any applicable sanctions imposed by the U.S.

against Venezuela.

In 2016, ConocoPhillips filed a separate and independent arbitration under the rules of the ICC against PDVSA under the contracts that had established the Corocoro Project.

On August 2, 2019, the ICC Tribunal awarded ConocoPhillips approximately $ 33 million plus interest under the Corocoro contracts.

ConocoPhillips is seeking recognition and enforcement of the award in various jurisdictions.

ConocoPhillips has ensured that all the actions related to the award meet all appropriate U.S.

regulatory requirements, including those related to any applicable sanctions imposed by the U.S.

against Venezuela.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Beginning in 2017, governmental and other entities in several states/territories in the U.S.

have filed lawsuits against oil and gas companies, including ConocoPhillips, seeking compensatory damages and equitable relief to abate alleged climate change impacts.

Additional lawsuits with similar allegations are expected to be filed.

The amounts claimed by plaintiffs are unspecified and the legal and factual issues are unprecedented, therefore, there is significant uncertainty about the scope of the claims and alleged damages and any potential impact on the Company’s financial condition.

ConocoPhillips believes these lawsuits are factually and legally meritless and are an inappropriate vehicle to address the challenges associated with climate change and will vigorously defend against such lawsuits.

Several Louisiana parishes and the State of Louisiana have filed 43 lawsuits under Louisiana’s State and Local Coastal Resources Management Act (SLCRMA) against oil and gas companies, including ConocoPhillips, seeking compensatory damages for contamination and erosion of the Louisiana coastline allegedly caused by historical oil and gas operations.

ConocoPhillips entities are defendants in 22 of the lawsuits and will vigorously defend against them.

On October 17, 2022, the Fifth Circuit affirmed remand of lead cases to state court and the subsequent request for rehearing was denied.

Accordingly, the federal district courts have issued remands to state court.

Because Plaintiffs’ SLCRMA theories are unprecedented, there is uncertainty about these claims (both as to scope and damages) and we continue to evaluate our exposure in these lawsuits.

In October 2020, the Bureau of Safety and Environmental Enforcement (BSEE) ordered the prior owners of Outer Continental Shelf (OCS) Lease P-0166, including ConocoPhillips, to decommission the lease facilities, including two offshore platforms located near Carpinteria, California.

This order was sent after the current owner of OCS Lease P-0166 relinquished the lease and abandoned the lease platforms and facilities.

BSEE’s order to ConocoPhillips is premised on its connection to Phillips Petroleum Company, a legacy company of ConocoPhillips, which held a historical 25 percent interest in this lease and operated these facilities, but sold its interest approximately 30 years ago.

ConocoPhillips continues to evaluate its exposure in this matter.

On May 10, 2021, ConocoPhillips filed arbitration under the rules of the Singapore International Arbitration Centre (SIAC) against Santos KOTN Pty Ltd.

and Santos Limited for their failure to timely pay the $ 200 million bonus due upon FID of the Barossa development project under the sale and purchase agreement.

Santos KOTN Pty Ltd.

and Santos Limited have filed a response and counterclaim, and the arbitration is underway.

In July 2021, a federal securities class action was filed against Concho, certain of Concho’s officers, and ConocoPhillips as Concho’s successor in the United States District Court for the Southern District of Texas.

On October 21, 2021, the court issued an order appointing Utah Retirement Systems and the Construction Laborers Pension Trust for Southern California as lead plaintiffs (Lead Plaintiffs).

On January 7, 2022, the Lead Plaintiffs filed their consolidated complaint alleging that Concho made materially false and misleading statements regarding its business and operations in violation of the federal securities laws and seeking unspecified damages, attorneys’ fees, costs, equitable/injunctive relief, and such other relief that may be deemed appropriate.

We believe the allegations in the action are without merit and are vigorously defending this litigation.

Long-Term Throughput Agreements and Take-or-Pay Agreements

We have certain throughput agreements and take-or-pay agreements in support of financing arrangements.

The agreements typically provide for natural gas or crude oil transportation to be used in the ordinary course of business.

The aggregate amounts of estimated payments under these various agreements are:

2023—$ 7 million;

2024—$ 7 million;

2025—$ 7 million;

2026—$ 7 million;

2027—$ 7 million;

and 2028 and after—$ 33 million.

Total payments under the agreements were $ 26 million in 2022, $ 27 million in 2021 and $ 25 million in 2020.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 12—Derivative and Financial Instruments

We use futures, forwards,

swaps and options in various markets

to meet our customer needs, capture

opportunities, and manage foreign exchange

currency risk.

Commodity Derivative Instruments

Our commodity business primarily consists of natural

gas, crude oil, bitumen, LNG and NGLs.

We use futures, forwards, swaps and options in various markets to meet our customer needs, capture market opportunities and manage foreign exchange currency risk.

Commodity Derivative Instruments

are held at fair value on our consolidated

balance sheet.

Where these balances

have the right of setoff,

they are presented on a net basis.

Related cash flows are recorded

as operating activities

on our consolidated statement

of cash flows.

On our consolidated income statement,

gains and losses are

recognized either on a gross

basis if directly related to our physical

business or a net basis if held for trading.

and losses related to contracts

that meet and are designated with the NPNS exception

are recognized upon

We generally apply this

exception to eligible crude contracts

and certain gas contracts.

apply hedge accounting for our commodity

The following table presents the gross

fair values of our commodity derivatives,

excluding collateral,

items where they appear on our consolidated

balance sheet:

Our commodity business primarily consists of natural gas, crude oil, bitumen, LNG and NGLs.

Commodity derivative instruments are held at fair value on our consolidated balance sheet.

Where these balances have the right of setoff, they are presented on a net basis.

Related cash flows are recorded as operating activities on our consolidated statement of cash flows.

On our consolidated income statement, gains and losses are recognized either on a gross basis if directly related to our physical business or a net basis if held for trading.

Gains and losses related to contracts that meet and are designated with the NPNS exception are recognized upon settlement.

We generally apply this exception to eligible crude contracts and certain gas contracts.

We do not apply hedge accounting for our commodity derivatives.

The following table presents the gross fair values of our commodity derivatives, excluding collateral, and the line items where they appear on our consolidated balance sheet:

Millions of Dollars

Prepaid expenses and other current

Prepaid expenses and other current assets $ 1,795 1,168

Other assets 242 75

Other accruals 1,800 1,160

Other liabilities and deferred credits 210 63

The gains (losses) from commodity derivatives

incurred, and the line items where they appear on our

income statement were:

The gains (losses) from commodity derivatives incurred, and the line items where they appear on our consolidated income statement were:

Millions of Dollars

2022 2021 2020

Sales and other operating revenues $ ( 88 ) ( 228 ) 19

1 unchanged sentence

Purchased commodities ( 91 ) 75 11

On January 15, 2021, we assumed financial derivative instruments

consisting of oil and natural gas

connection with the acquisition of Concho.

At the acquisition date, the financial derivative

instruments acquired

were recognized at fair

value as a net liability of $

million with settlement dates under the contracts

December 31, 2022.

During 2021, we recognized a loss

on settlement of the contracts for

associated with the acquired financial instruments

is recorded within the “Sales and other operating

revenues” line

on our consolidated income statement.

In connection with the settlement, we issued

a cash payment of $

million during 2021.

Cash settlements related to

the derivative contracts

are presented within “Cash Flows From

Operating Activities” on our consolidated

statement of cash flows.

Notes to Consolidated Financial Statements

ConocoPhillips

The table below summarizes our material

net exposures resulting from

outstanding commodity derivative

On January 15, 2021, we assumed financial derivative instruments consisting of oil and natural gas swaps in connection with the acquisition of Concho.

At the acquisition date, these financial derivative instruments acquired were recognized at fair value as a net liability of $ 456 million with settlement dates under the contracts through December 31, 2022.

During 2021, we recognized a loss on settlement of these derivatives contracts of $ 305 million.

This loss is recorded within the “Sales and other operating revenues” line on our consolidated income statement.

In connection with the settlement, we issued a cash payment of $ 761 million during 2021 which is included within “Cash Flows From Operating Activities” on our consolidated statement of cash flows.

The table below summarizes our net exposures resulting from outstanding commodity derivative contracts:

Open Position

Natural gas and power (billions

of cubic feet equivalent)

Foreign Currency Exchange

We have foreign

currency exchange rate

risk resulting from international

Our foreign currency

exchange derivative activity

primarily relates to managing our cash

-related foreign currency

exchange rate

exposures, such as firm commitments for

capital programs or local currency

tax payments, dividends and

returns from net investments

in foreign affiliates, and

investments in equity securities.

Our foreign currency exchange

derivative instruments are

held at fair value on our consolidated

balance sheet.

Related cash flows are included

within operating activities on our consolidated

statement of cash flows.

not elect hedge accounting on our foreign

currency exchange derivatives.

The following table presents the gross

fair values of our foreign currency

exchange derivatives,

collateral, and the line items where

they appear on our consolidated balance

Millions of Dollars

Prepaid expenses and other current

Other accruals

The (gains) losses from foreign

currency exchange derivatives

incurred and the line item where they appear

on our consolidated income statement

Millions of Dollars

Foreign currency transaction

(gains) losses

We had the following net notional

position of outstanding foreign currency

exchange derivatives:

Notional Currency

Foreign Currency Exchange

Buy British pound, sell euro

Sell British pound, buy euro

Sell Canadian dollar,

Buy Canadian dollar,

Buy Australian dollar,

Notes to Consolidated Financial Statements

ConocoPhillips

At December 31, 2021, we had outstanding foreign currency exchange forward contracts to buy $ 1.9 billion AUD at

$ 0.715 AUD against the U.S.

dollar in anticipation of our future acquisition of an additional interest in APLNG.

December 31, 2020, we had outstanding foreign currency exchange forward contracts to sell $ 0.45 billion CAD at

$ 0.748 CAD against the U.S.

Natural gas and power (billions of cubic feet equivalent)

Fixed price ( 14 ) 4

Basis ( 8 ) ( 22 )

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Financial Instruments

We invest in financial

instruments with maturities based on our cash

forecasts for the various

currency pools we manage.

The types of financial instruments in which we currently

invest include:

We invest in financial instruments with maturities based on our cash forecasts for the various accounts and currency pools we manage.

The types of financial instruments in which we currently invest include:

• Time deposits:

Interest bearing deposits

placed with financial institutions for a predetermined

Interest bearing deposits placed with financial institutions for a predetermined amount of time.

• Demand deposits:

Interest bearing deposits placed with financial

institutions.

Deposited funds can be

withdrawn without notice.

Interest bearing deposits placed with financial institutions.

Deposited funds can be withdrawn without notice.

• Commercial paper:

Unsecured promissory

notes issued by a corporation, commercial

bank or government

agency purchased at a discount to

mature at par.

government or government

agency obligations:

Unsecured promissory notes issued by a corporation, commercial bank or government agency purchased at a discount to mature at par.

government or government agency obligations:

Securities issued by the U.S.

6 unchanged sentences

• Asset-backed securities:

Collateralized

debt securities.

The following investments

are carried on our consolidated

balance sheet at cost, plus accrued interest

table reflects remaining maturities

at December 31, 2021 and 2020:

Collateralized debt securities.

The following investments are carried on our consolidated balance sheet at cost, plus accrued interest and the table reflects remaining maturities at December 31, 2022 and 2021:

Millions of Dollars

1 unchanged sentence

Cash and Cash

Investments and Long-

Term Receivables

Equivalents Short-Term

2022 2021 2022 2021

Cash $ 593 670

Demand Deposits 1,638 1,554

Time Deposits

4,116 2,363 1,288 217

91 to 180 days

Within one year 11 4

One year through five years

Government Obligations

Notes to Consolidated Financial Statements

ConocoPhillips

The following investments

in debt securities classified as available for

sale are carried at fair value on

consolidated balance sheet at December 31, 2021 and

$ 6,361 5,018 2,182 225

The following investments in debt securities classified as available for sale are carried at fair value on our consolidated balance sheet at December 31, 2022 and 2021:

Millions of Dollars

1 unchanged sentence

Cash and Cash

Investments and Long-

Term Receivables

Equivalents Short-Term

Investments Investments and Long-Term

2022 2021 2022 2021 2022 2021

Major Security Type

2 unchanged sentences

Government Obligations — — 115 — 63 2

Government Agency

Government Agency Obligations

Foreign Government Obligations — 7 7 2

Asset-backed Securities 1 2 138 63

Cash and Cash Equivalents and Short-Term

Investments have

remaining maturities within one year.

Investments and Long-Term

Receivables have remaining

maturities that vary from greater

than one year through

The following table summarizes the

amortized cost basis and fair value

of investments in debt securities classified

as available for sale at December 31:

$ 97 10 603 221 522 248

Cash and Cash Equivalents and Short-Term Investments have remaining maturities within one year.

Investments and Long-Term Receivables have remaining maturities that vary from greater than one year through five years.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The following table summarizes the amortized cost basis and fair value of investments in debt securities classified as available for sale at December 31:

Millions of Dollars

Amortized Cost Basis

Amortized Cost Basis Fair Value

2022 2021 2022 2021

Major Security Type

5 unchanged sentences

Asset-backed Securities 139 65 139 65

As of December 31, 2021 and 2020, total unrealized

losses for debt securities classified as available

for sale with

net losses were negligible.

Additionally,

as of December 31, 2021 and 2020, investments in these

debt securities in

an unrealized loss position for which an

allowance for credit losses has not been

recorded were negligible.

For the years

ended December 31, 2021 and 2020, proceeds from sales and

redemptions of investments

securities classified as available for sale were

million and $

million, respectively.

Gross realized gains and

losses included in earnings from those sales and redemptions

were negligible.

The cost of securities sold and

redeemed is determined using the specific identification

Notes to Consolidated Financial Statements

ConocoPhillips

Financial instruments potentially exposed

to concentrations of credit

risk consist primarily of cash equivalents,

short-term investments, long-term

investments in debt securities,

OTC derivative contracts

and trade receivables.

Our cash equivalents and short-term

investments are placed

in high-quality commercial paper,

government money

market funds, U.S.

and government agency obligations,

time deposits with major international banks

and financial institutions, high-quality corporate

bonds, foreign government obligations

and asset-backed

Our long-term investments in debt

securities are placed in high-quality corporate

bonds, asset-backed

securities, U.S.

government and government

agency obligations, foreign

government obligations, and

deposits with major international banks

and financial institutions.

The credit risk from our OTC derivative

contracts, such as forwards,

swaps and options, derives from the

counterparty to the transaction.

Individual counterparty exposure is

managed within predetermined credit limits

and includes the use of cash-call margins when appropriate,

thereby reducing the risk of significant

nonperformance.

We also use futures, swaps

and option contracts that have

a negligible credit risk because these

trades are cleared primarily with an

exchange clearinghouse and subject to

mandatory margin requirements until

we are exposed to the credit risk

of those exchange brokers

for receivables arising from

margin cash calls, as well as for cash

deposited to meet initial margin requirements.

Our trade receivables result primarily

from our petroleum operations

and reflect a broad national and

international customer base, which limits

our exposure to concentrations

of credit risk.

The majority of these

receivables have payment

30 days or less

, and we continually monitor this exposure

creditworthiness of the counterparties.

We may require collateral

to limit the exposure to loss including,

credit, prepayments and surety

bonds, as well as master netting arrangements

to mitigate credit risk with

counterparties that both buy from and

sell to us, as these agreements permit the amounts

owed by us or owed to

others to be offset against

amounts due to us.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure

exceeds a threshold amount.

We have contracts with fixed threshold amounts and other contracts with variable

threshold amounts that are contingent on our credit rating.

The variable threshold amounts typically decline for

lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if we fall below

investment grade.

$ 1,234 479 1,222 479

As of December 31, 2022 and 2021, total unrealized losses for debt securities classified as available for sale with net losses were $ 12 million and negligible, respectively.

No allowance for credit losses has been recorded on investments in debt securities which are in an unrealized loss position.

For the years ended December 31, 2022 and 2021, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $ 644 million and $ 594 million, respectively.

Gross realized gains and losses included in earnings from those sales and redemptions were negligible.

The cost of securities sold and redeemed is determined using the specific identification method.

Financial instruments potentially exposed to concentrations of credit risk consist primarily of cash equivalents, short-term investments, long-term investments in debt securities, OTC derivative contracts and trade receivables.

Our cash equivalents and short-term investments are placed in high-quality commercial paper, government money market funds, U.S.

government and government agency obligations, time deposits with major international banks and financial institutions, high-quality corporate bonds, foreign government obligations and asset-backed securities.

Our long-term investments in debt securities are placed in high-quality corporate bonds, asset-backed securities, U.S.

government and government agency obligations, foreign government obligations, and time deposits with major international banks and financial institutions.

The credit risk from our OTC derivative contracts, such as forwards, swaps and options, derives from the counterparty to the transaction.

Individual counterparty exposure is managed within predetermined credit limits and includes the use of cash-call margins when appropriate, thereby reducing the risk of significant nonperformance.

We also use futures, swaps and option contracts that have a negligible credit risk because these trades are cleared primarily with an exchange clearinghouse and subject to mandatory margin requirements until settled;

however, we are exposed to the credit risk of those exchange brokers for receivables arising from daily margin cash calls, as well as for cash deposited to meet initial margin requirements.

Our trade receivables result primarily from our petroleum operations and reflect a broad national and international customer base, which limits our exposure to concentrations of credit risk.

The majority of these receivables have payment terms of 30 days or less, and we continually monitor this exposure and the creditworthiness of the counterparties.

We may require collateral to limit the exposure to loss including, letters of credit, prepayments and surety bonds, as well as master netting arrangements to mitigate credit risk with counterparties that both buy from and sell to us, as these agreements permit the amounts owed by us or owed to others to be offset against amounts due to us.

Certain of our derivative instruments contain provisions that require us to post collateral if the derivative exposure exceeds a threshold amount.

We have contracts with fixed threshold amounts and other contracts with variable threshold amounts that are contingent on our credit rating.

The variable threshold amounts typically decline for lower credit ratings, while both the variable and fixed threshold amounts typically revert to zero if we fall below investment grade.

Cash is the primary collateral in all contracts;

however, many also permit us to post letters of

credit as collateral, such as transactions administered through the New York Mercantile Exchange.

The aggregate fair value

of all derivative instruments with such credit

risk-related contingent

features that were in

a liability position on December 31, 2021 and December 31, 2020, was $

million and $

million, respectively.

For these instruments,

collateral was posted as

of December 31, 2021 or December 31, 2020.

If our credit

rating had been downgraded below investment

grade on December 31, 2021, we would

have been required to

million of additional collateral, either with cash

or letters of credit.

Note 13—Fair Value

We carry a portion of our assets and liabilities at

fair value that are measured at

the reporting date using an exit

price (i.e., the price that would be received to sell an

asset or paid to transfer

a liability) and disclosed according to

the quality of valuation inputs under the fair value

The classification of an asset or liability is based on the lowest

level of input significant to its fair value.

are initially classified as Level 3 are subsequently

reported as Level 2 when the fair value derived

from unobservable

inputs is inconsequential to the overall

fair value, or if corroborated

market data becomes available.

liabilities initially reported as Level 2 are subsequently

reported as Level 3 if corroborated

market data is no longer

There were no material transfers

into or out of Level 3 during 2021 or 2020.

Notes to Consolidated Financial Statements

ConocoPhillips

Recurring Fair Value

Financial assets and liabilities reported at fair

value on a recurring basis primarily include our investment

common shares, our investment

in debt securities classified as available for

sale, and commodity derivatives.

Level 1 derivative assets and

liabilities primarily represent exchange

-traded futures and options that

valued using unadjusted prices available

from the underlying exchange.

Level 1 also includes our investment

in common shares of CVE, which is valued using

quotes for shares on the NYSE, and

our investments in U.S.

government obligations classified

as available for sale debt securities,

which are valued using exchange

Level 2 derivative assets and

liabilities primarily represent OTC

swaps, options and forward

purchase and sale

contracts that are valued

using adjusted exchange prices,

prices provided by brokers

or pricing service

companies that are all corroborated

by market data.

Level 2 also includes our investments

in debt securities

classified as available for sale including

investments in corporate

bonds, commercial paper,

securities, U.S.

government agency obligations

and foreign government obligations

that are valued using

pricing provided by brokers

or pricing service companies that are corroborated

with market data.

Level 3 derivative assets and

liabilities consist of OTC swaps,

options and forward purchase and

sale contracts

where a significant portion of fair value

is calculated from underlying market

data that is not readily available.

The derived value uses industry standard

methodologies that may consider the historical

relationships among

various commodities, modeled market

prices, time value, volatility factors

and other relevant economic

The use of these inputs results in management’s

best estimate of fair value.

Level 3 activity was

not material for all periods presented.

The following table summarizes the

fair value hierarchy

for gross financial assets and liabilities (i.e., unadjusted

where the right of setoff exists

for commodity derivatives accounted

for at fair value on a recurring

however, many also permit us to post letters of credit as collateral, such as transactions administered through the New York Mercantile Exchange.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The aggregate fair value of all derivative instruments with such credit risk-related contingent features that were in a liability position on December 31, 2022 and December 31, 2021, was $ 333 million and $ 281 million, respectively.

For these instruments, $ 42 million of collateral was posted as of December 31, 2022 and no collateral was posted as of December 31, 2021.

If our credit rating had been downgraded below investment grade on December 31, 2022, we would have been required to post $ 270 million of additional collateral, either with cash or letters of credit.

Note 13—Fair Value Measurement

We carry a portion of our assets and liabilities at fair value that are measured at the reporting date using an exit price (i.e., the price that would be received to sell an asset or paid to transfer a liability) and disclosed according to the quality of valuation inputs under the fair value hierarchy.

The classification of an asset or liability is based on the lowest level of input significant to its fair value.

Those that are initially classified as Level 3 are subsequently reported as Level 2 when the fair value derived from unobservable inputs is inconsequential to the overall fair value, or if corroborated market data becomes available.

Assets and liabilities initially reported as Level 2 are subsequently reported as Level 3 if corroborated market data is no longer available.

There were no material transfers into or out of Level 3 during 2022 or 2021.

Recurring Fair Value Measurement

Financial assets and liabilities reported at fair value on a recurring basis primarily include our investment in CVE common shares, our investments in debt securities classified as available for sale, and commodity derivatives.

• Level 1 derivative assets and liabilities primarily represent exchange-traded futures and options that are valued using unadjusted prices available from the underlying exchange.

Level 1 also includes our investment in common shares of CVE, which is valued using quotes for shares on the NYSE, and our investments in U.S.

government obligations classified as available for sale debt securities, which are valued using exchange prices.

• Level 2 derivative assets and liabilities primarily represent OTC swaps, options and forward purchase and sale contracts that are valued using adjusted exchange prices, prices provided by brokers or pricing service companies that are all corroborated by market data.

Level 2 also includes our investments in debt securities classified as available for sale including investments in corporate bonds, commercial paper, asset-backed securities, U.S.

government agency obligations and foreign government obligations that are valued using pricing provided by brokers or pricing service companies that are corroborated with market data.

• Level 3 derivative assets and liabilities consist of OTC swaps, options and forward purchase and sale contracts where a significant portion of fair value is calculated from underlying market data that is not readily available.

The derived value uses industry standard methodologies that may consider the historical relationships among various commodities, modeled market prices, time value, volatility factors and other relevant economic measures.

The use of these inputs results in management’s best estimate of fair value.

Level 3 activity was not material for all periods presented.

The following table summarizes the fair value hierarchy for gross financial assets and liabilities (i.e., unadjusted where the right of setoff exists for commodity derivatives accounted for at fair value on a recurring basis):

Millions of Dollars

December 31, 2021

December 31, 2020

December 31, 2022 December 31, 2021

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Investment in Cenovus Energy $ 1,117 — — 1,117

1 unchanged sentence

Commodity derivatives 958 951 128 2,037 562 619 62 1,243

Total assets $ 1,136 1,995 128 3,259 1,681 1,096 62 2,839

Commodity derivatives $ 906 843 261 2,010 593 543 87 1,223

Notes to Consolidated Financial Statements

ConocoPhillips

The following table summarizes those

commodity derivative balances subject to

the right of setoff as

presented on our consolidated

balance sheet.

We have elected to

offset the recognized fair

value amounts for

multiple derivative instruments

executed with the same counterparty

in our financial statements when a legal

right of setoff exists.

Total liabilities $ 906 843 261 2,010 593 543 87 1,223

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The following table summarizes those commodity derivative balances subject to the right of setoff as presented on our consolidated balance sheet.

We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of setoff exists.

Millions of Dollars

Amounts Subject to Right of Setoff

Right of Setoff

Recognized Amounts Not

Right of Setoff Gross

Amounts Gross

Presented Cash

Collateral Net

December 31, 2022

Assets $ 2,037 39 1,998 1,176 822 37 785

Liabilities 2,010 20 1,990 1,176 814 52 762

December 31, 2021

At December 31, 2021 and December 31, 2020, we did not present

any amounts gross on our consolidated

balance sheet where we had the right of setoff.

Non-Recurring Fair Value

The following table summarizes the

fair value hierarchy

by major category and date of remeasurement

accounted for at fair value

on a non-recurring basis:

Assets $ 1,243 85 1,158 650 508 — 508

Liabilities 1,223 82 1,141 650 491 36 455

At December 31, 2022 and December 31, 2021, we did not present any amounts gross on our consolidated balance sheet where we had the right of setoff.

Non-Recurring Fair Value Measurement

The following table summarizes the fair value hierarchy by major category and date of remeasurement for assets accounted for at fair value on a non-recurring basis:

Millions of Dollars

Fair Value Measurements

December 31, 2021

Fair Value Measurements Using

Fair Value Level 1

Inputs Level 2

Inputs Level 3

Inputs Before-Tax

Year ended December 31, 2021

Net PP&E (held for use)

2 unchanged sentences

December 31, 2021 5,574 — 5,574 — 688

Year ended December 31,

Net PP&E (held for use)

March 31, 2020

December 31, 2020

Net PP&E (held for use)

During 2021 and 2020, the estimated fair value

of certain noncore assets included

in our Lower 48 segment

declined to amounts below the carrying values.

The carrying values were written down

to fair value.

values were estimated based

on internal discounted cash

flow models using the following estimated assumptions:

estimated future production,

an outlook of future prices from a combination

of exchanges (short-term) coupled

with pricing service companies and our internal outlook

(long-term), future operating costs

expenditures, and a discount rate

believed to be consistent with

those used by principal market participants.

range and arithmetic average

of significant unobservable inputs used in the Level

3 fair value measurements for

significant assets were as follows:

Notes to Consolidated Financial Statements

ConocoPhillips

Unobservable Inputs

(Arithmetic Average)

December 31, 2021

Lower 48 Gulf Coast and

Rockies noncore field

Commodity production

Commodity price outlook*

Discount rate**

*Commodity price outlook based on a combination of external

pricing service companies' and our internal

outlook for years 2024-2050;

future prices escalated

% annually after year 2050.

**Determined as the weighted average cost

of capital of a group of peer companies,

adjusted for risks where appropriate.

Unobservable Inputs

(Arithmetic Average)

March 31, 2020

Wind River Basin

Natural gas production

Natural gas price outlook*

Discount rate**

*Henry Hub natural gas price outlook based on a combination

of external pricing service companies' outlooks

for years 2022-2034;

future prices escalated

annually after year 2034.

**Determined as the weighted average cost

of capital of a group of peer companies,

adjusted for risks where appropriate.

Unobservable Inputs

During 2021, the estimated fair value of certain noncore assets included in our Lower 48 segment declined to amounts below the carrying values.

The carrying values were written down to fair value.

The fair values were estimated based on internal discounted cash flow models using the following estimated assumptions:

estimated future production, an outlook of future prices from a combination of exchanges (short-term) coupled with pricing service companies and our internal outlook (long-term), future operating costs and capital expenditures, and a discount rate believed to be consistent with those used by principal market participants.

The range and arithmetic average of significant unobservable inputs used in the Level 3 fair value measurements for significant assets were as follows:

Dollars) Valuation

Technique Unobservable Inputs Range

(Arithmetic Average)

December 31, 2021

Central Basin Platform

Commodity production

Commodity price outlook*

Lower 48 Gulf Coast and Rockies noncore field $ 472 Discounted cash flow Commodity production (MBOED) 0.2 - 17 ( 5.4 )

Commodity price outlook* ($/BOE) $ 41.45 - $ 93.68 ($ 64.39 )

Discount rate** 7.3 % - 9.7 % ( 8.7 %)

*Commodity price outlook based on a combination of external

pricing service companies' and our internal

outlook for years 2023-2050;

future prices escalated

% annually after year 2050.

**Determined as the weighted average cost

of capital of a group of peer companies,

adjusted for risks where appropriate.

*Commodity price outlook based on a combination of external pricing service companies' and our internal outlook for years 2024-2050;

future prices escalated at 2.0 % annually after year 2050.

**Determined as the weighted average cost of capital of a group of peer companies, adjusted for risks where appropriate.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Equity Method Investments

During the fourth quarter of 2021, Origin Energy Limited

agreed to the sale of

percent of their interest in

billion, before customary

ConocoPhillips announced in December 2021 that we were

exercising our preemption

right under the APLNG Shareholders Agreement

to purchase an additional 10 percent

shareholding interest in APLNG, subject

to government approvals.

The sales price associated with this preemption

right was determined to reflect

a relevant observable market

participant view of APLNG’s

fair value which was

below the carrying value of our existing

investment in APLNG.

As such, our investment in APLNG was

down to its fair value of $

million, resulting in a before-tax

Notes to Consolidated Financial Statements

ConocoPhillips

Reported Fair Values

of Financial Instruments

We used the following methods

and assumptions to estimate the fair value

of financial instruments:

During the fourth quarter of 2021, Origin Energy Limited agreed to the sale of 10 percent of their interest in APLNG for $ 1.645 billion, before customary adjustments.

As such, our investment in APLNG was written down to its fair value of $ 5,574 million, resulting in a before-tax charge of $ 688 million.

See Note 4 and Not e 7 .

Reported Fair Values of Financial Instruments

We used the following methods and assumptions to estimate the fair value of financial instruments:

• Cash and cash equivalents and short-term investments:

The carrying amount reported on the balance

sheet approximates fair

For those investments classified as

available for sale debt securities,

carrying amount reported on the balance sheet

is fair value.

Accounts and notes receivable (including

long-term and related parties):

amount reported on

the balance sheet approximates

The valuation technique and methods

used to estimate the

fair value of the current portion of fixed

-rate related party

loans is consistent with Loans and advances—

related parties.

The carrying amount reported on the balance sheet approximates fair value.

For those investments classified as available for sale debt securities, the carrying amount reported on the balance sheet is fair value.

• Accounts and notes receivable (including long-term and related parties):

The carrying amount reported on the balance sheet approximates fair value.

The valuation technique and methods used to estimate the fair value of the current portion of fixed-rate related party loans is consistent with Loans and advances—related parties.

• Investment in Cenovus Energy:

for a discussion of the carrying value and fair

investment in CVE common shares.

Investments in debt securities classified

as available for sale:

The fair value

of investments in debt

securities categorized as Level

1 in the fair value hierarchy

is measured using exchange prices.

value of investments in debt

securities categorized as Level 2 in

the fair value hierarchy

is measured using

pricing provided by brokers

or pricing service companies that are corroborate

with market data.

See Note 5 for a discussion of the carrying value and fair value of our investment in CVE common shares.

• Investments in debt securities classified as available for sale:

The fair value of investments in debt securities categorized as Level 1 in the fair value hierarchy is measured using exchange prices.

The fair value of investments in debt securities categorized as Level 2 in the fair value hierarchy is measured using pricing provided by brokers or pricing service companies that are corroborated with market data.

See Note 12 .

• Loans and advances—related parties:

amount of floating-rate loans

approximates fair value.

The fair value of fixed-rate

loan activity is measured using market

observable data and is categorized

Level 2 in the fair value hierarchy.

Accounts payable (including related

parties) and floating-rate debt:

The carrying amount of accounts

payable and floating-rate

debt reported on the balance sheet approximates

The carrying amount of floating-rate loans approximates fair value.

The fair value of fixed-rate loan activity is measured using market observable data and is categorized as Level 2 in the fair value hierarchy.

• Accounts payable (including related parties) and floating-rate debt:

The carrying amount of accounts payable and floating-rate debt reported on the balance sheet approximates fair value.

• Fixed-rate debt:

The estimated

fair value of fixed-rate

debt is measured using prices available from

pricing service that is corroborated

by market data;

these liabilities are categorized

as Level 2 in

the fair value hierarchy.

The estimated fair value of fixed-rate debt is measured using prices available from a pricing service that is corroborated by market data;

therefore, these liabilities are categorized as Level 2 in the fair value hierarchy.

• Commercial paper:

The carrying amount of our commercial

paper instruments approximates

and is reported on the balance sheet as short-term

The following table summarizes the

net fair value of financial instruments

(i.e., adjusted where the right of setoff

exists for commodity derivatives):

The carrying amount of our commercial paper instruments approximates fair value and is reported on the balance sheet as short-term debt.

The following table summarizes the net fair value of financial instruments (i.e., adjusted where the right of setoff exists for commodity derivatives):

Millions of Dollars

Carrying Amount

Carrying Amount Fair Value

2022 2021 2022 2021

Financial assets

4 unchanged sentences

Financial liabilities

debt, excluding finance leases

Commodity derivatives

Total debt, excluding finance leases 15,323 18,673 15,545 22,451

Commodity derivatives 782 537 782 537

At December 31, 2021, commodity derivative

assets and liabilities are presented net with

obligation to return

cash collateral and $

million of rights to reclaim cash collateral,

respectively.

At December 31, 2020, commodity

derivative assets and liabilities are presented

million in obligations to return

cash collateral and

million of rights to reclaim cash collateral,

respectively.

Notes to Consolidated Financial Statements

ConocoPhillips

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 14—Equity

The changes in our shares of common stock,

as categorized in the equity section

of the balance sheet, were:

Beginning of year

1,798,844,267

1,795,652,203

The changes in our shares of common stock, as categorized in the equity section of the balance sheet, were:

2022 2021 2020

Beginning of year 2,091,562,747 1,798,844,267 1,795,652,203

Acquisition of Concho — 285,928,872 —

Distributed under benefit plans 9,322,387 6,789,608 3,192,064

2,091,562,747

1,798,844,267

1,795,652,203

End of year 2,100,885,134 2,091,562,747 1,798,844,267

Held in Treasury

1 unchanged sentence

Repurchase of common stock 87,709,187 58,517,786 20,018,275

End of year 877,029,062 789,319,875 730,802,089

Preferred Stock

We have authorized

million shares of preferred

stock, par value $

of which was issued or

outstanding at December 31, 2021 or 2020.

We have authorized 500 million shares of preferred stock, par value $ 0.01 per share, none of which was issued or outstanding at December 31, 2022 or 2021.

Noncontrolling Interests

In the second quarter of 2020, we completed the divestiture

of our subsidiaries that held our Australia

and operations.

These assets included the Darwin LNG and Bayu-Darwin Pipeline operating

joint ventures in which

there was a noncontrolling interest.

As a result, as of December 31, 2021 and 2020, we had no

noncontrolling

In 2020, we completed the divestiture of our subsidiaries that held our Australia-West assets and operations.

These assets included the Darwin LNG and Bayu-Darwin Pipeline operating joint ventures in which there was a noncontrolling interest.

As a result, as of December 31, 2020, we had no noncontrolling interests.

Repurchase of Common Stock

In late 2016, we initiated our current

share repurchase program,

which has a current total program

authorization

billion of our common stock.

In May 2021, we began a paced monetization

of our CVE common shares, the

proceeds of which have been applied to

share repurchases.

Share repurchases since inception of our current

program totaled

million shares at a cost of $

billion through the end of December 2021.

In late 2016, we initiated our current share repurchase program.

In October 2022, our Board of Directors approved an increase to our authorization from $ 25 billion to $ 45 billion of our common stock to support our plan for future share repurchases.

In May 2021, we began a paced monetization of our CVE common shares, the proceeds of which have been applied to share repurchases.

During the first quarter of 2022, we sold our remaining 91 million CVE common shares.

Share repurchases since inception of our current program totaled 335 million shares at a cost of $ 23 billion through the end of December 2022.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 15—Non-Mineral Leases

The company primarily leases office buildings

and drilling equipment, as well as ocean transport

vessels, tugboats,

corporate aircraft,

and other facilities and equipment.

Certain leases include escalation clauses for

adjusting rental

payments to reflect changes in

price indices and other leases include payment provisions

that vary based on the

nature of usage of the leased asset.

Additionally, the company

has executed certain leases that

provide it with the

option to extend or renew the term of

the lease, terminate the lease prior to the end

of the lease term, or

purchase the leased asset as of the end of the lease term.

In other cases, the company has executed

agreements that require it to

guarantee the residual value

of certain leased office buildings.

For additional

information about guarantees,

There are no significant restrictions

imposed on us by the lease

agreements with regard to

dividends, asset dispositions or borrowing ability.

Notes to Consolidated Financial Statements

ConocoPhillips

Certain arrangements may

contain both lease and non-lease components

and we determine if an arrangement

or contains a lease at contract

We adopted the provisions

of FASB ASU No.

2016-02, “Leases” (ASC

Topic 842) and

its amendments, beginning January 1, 2019.

This ASU superseded the requirements in

Topic 840 “Leases”

Only the lease components of these contractual

arrangements are subject to

the provisions of ASC Topic

842, and any non-lease components

are subject to other applicable accounting

we have elected to adopt

the optional practical expedient not to

separate lease components

apart from non-lease components for

accounting purposes.

This policy election has been adopted for each of the

company’s leased asset

classes existing as of the effective date

and subject to the transition provisions

Topic 842 and will be applied

to all new or modified leases executed on

or after January 1, 2019.

For contractual

arrangements executed

in subsequent periods involving

a new leased asset class, the company will determine

contract inception whether it will apply

the optional practical expedient to

the new leased asset class.

Leases are evaluated for classification

as operating or finance leases at the commencement

date of the lease and

right-of-use assets and corresponding

liabilities are recognized on our

consolidated balance sheet based on the

present value of future lease payments

relating to the use of the underlying asset during the lease term.

lease payments include variable lease payments

that depend upon an index or rate

using the index or rate at the

commencement date and probable

amounts owed under residual value

The amount of future lease

payments may be increased to

include additional payments related

to lease extension, termination,

purchase options when the company has

determined, at or subsequent to lease commencement,

generally due to

limited asset availability or operating

commitments, it is reasonably certain

of exercising such options.

incremental borrowing rate

as the discount rate in

determining the present value of future

lease payments, unless

the interest rate implicit in

the lease arrangement is readily

determinable.

Lease payments that vary

to the commencement date based on future

usage levels, the nature of leased asset activities,

or certain other

contingencies are not included in the measurement

of lease right-of-use assets and corresponding

have elected not to record

assets and liabilities on our consolidated balance

sheet for lease arrangements with

terms of 12 months or less.

We often enter into

leasing arrangements acting in the capacity as

operator for and/or

on behalf of certain oil and

gas joint ventures of undivided interests.

If the lease arrangement can be legally enforced

only against us as

operator and there is no separate

arrangement to sublease the underlying

leased asset to our coventurers,

recognize at lease commencement

a right-of-use asset and corresponding

lease liability on our consolidated

balance sheet on a gross basis.

While we record lease costs on a

gross basis in our consolidated income statement

and statement of cash flows,

such costs are offset by the reimbursement

we receive from our coventurers

share of the lease cost as the underlying leased asset

is utilized in joint venture activities.

As a result, lease cost is

presented in our consolidated

income statement and statement

of cash flows on a proportional basis.

nonoperating coventurer,

we recognize a right-of-use asset and

corresponding lease liability only if we were a

specified contractual party to the lease arrangement

and the arrangement could be legally

enforced against us.

this circumstance, we would recogni

ze both the right-of-use asset

and corresponding lease liability on our

consolidated balance sheet on a proportional

basis consistent with our undivided interest

ownership in the related

joint venture.

The company has historically recorded

certain finance leases executed

by investee companies

accounted for under

the proportionate consolidation

method of accounting on its consolidated

balance sheet on a proportional basis

consistent with its ownership

interest in the investee

In addition, the company has historically

finance lease assets and liabilities associated with certain

The company primarily leases office buildings and drilling equipment, as well as ocean transport vessels, tugboats, corporate aircraft, and other facilities and equipment.

Certain leases include escalation clauses for adjusting rental payments to reflect changes in price indices and other leases include payment provisions that vary based on the nature of usage of the leased asset.

Additionally, the company has executed certain leases that provide it with the option to extend or renew the term of the lease, terminate the lease prior to the end of the lease term, or purchase the leased asset as of the end of the lease term.

In other cases, the company has executed lease agreements that require it to guarantee the residual value of certain leased office buildings.

For additional information about guarantees, see Note 10 .

There are no significant restrictions imposed on us by the lease agreements with regard to dividends, asset dispositions or borrowing ability.

We determine if an arrangement is or contains a lease at contract inception.

Certain contractual arrangements may contain both lease and non-lease components.

Only the lease components of these contractual arrangements are subject to the provisions of ASC Topic 842, and any non-lease components are subject to other applicable accounting guidance;

however, we have elected to adopt the optional practical expedient not to separate lease components apart from non-lease components for existing asset classes (as of the adoption date of ASC 842) for accounting purposes.

For contractual arrangements involving a new leased asset class, we determine at contract inception whether it will apply the optional practical expedient to the new leased asset class.

Leases are evaluated for classification as operating or finance leases at the commencement date of the lease and right-of-use assets and corresponding liabilities are recognized on our consolidated balance sheet based on the present value of future lease payments relating to the use of the underlying asset during the lease term.

Future lease payments include variable lease payments that depend upon an index or rate using the index or rate at the commencement date and probable amounts owed under residual value guarantees.

The amount of future lease payments may be increased to include additional payments related to lease extension, termination, and/or purchase options when the company has determined, at or subsequent to lease commencement, generally due to limited asset availability or operating commitments, it is reasonably certain of exercising such options.

We use our incremental borrowing rate as the discount rate in determining the present value of future lease payments, unless the interest rate implicit in the lease arrangement is readily determinable.

Lease payments that vary subsequent to the commencement date based on future usage levels, the nature of leased asset activities, or certain other contingencies are not included in the measurement of lease right-of-use assets and corresponding liabilities.

We have elected not to record assets and liabilities on our consolidated balance sheet for lease arrangements with terms of 12 months or less.

We often enter into leasing arrangements acting in the capacity as operator for and/or on behalf of certain oil and gas joint ventures of undivided interests.

If the lease arrangement can be legally enforced only against us as operator and there is no separate arrangement to sublease the underlying leased asset to our coventurers, we recognize at lease commencement a right-of-use asset and corresponding lease liability on our consolidated balance sheet on a gross basis.

While we record lease costs on a gross basis in our consolidated income statement and statement of cash flows, such costs are offset by the reimbursement we receive from our coventurers for their share of the lease cost as the underlying leased asset is utilized in joint venture activities.

As a result, lease cost is presented in our consolidated income statement and statement of cash flows on a proportional basis.

If we are a nonoperating coventurer, we recognize a right-of-use asset and corresponding lease liability only if we were a specified contractual party to the lease arrangement and the arrangement could be legally enforced against us.

In this circumstance, we would recognize both the right-of-use asset and corresponding lease liability on our consolidated balance sheet on a proportional basis consistent with our undivided interest ownership in the related joint venture.

The company has historically recorded certain finance leases executed by investee companies accounted for under the proportionate consolidation method of accounting on its consolidated balance sheet on a proportional basis consistent with its ownership interest in the investee company.

In addition, the company has historically recorded finance lease assets and liabilities associated with certain oil and gas joint ventures on a proportional basis pursuant to accounting guidance applicable prior to the adoption date of ASC 842 on January 1, 2019.

In accordance with the transition provisions of ASC Topic 842, and since we have elected to adopt the package of optional transition-related practical expedients, the historical accounting treatment for these leases has been carried forward and is subject to reconsideration upon the modification or other required reassessment of the arrangements prior to lease term expiration.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The following table summarizes the right-of-use assets and lease liabilities for both the operating and finance leases on our consolidated balance sheet as of December 31:

Millions of Dollars

Leases Finance

Leases Operating

Leases Finance

Right-of-Use Assets

Properties, plants and equipment

Gross 2,043 1,812

Accumulated DD&A ( 1,022 ) ( 857 )

Prepaid expenses and other current assets 16 2

Other assets 536 649

Lease Liabilities

Short-term debt**

Other accruals 155 188

Long-term debt***

Other liabilities and deferred credits 390 479

Total lease liabilities $ 545 1,320 667 1,261

* Includes proportionately consolidated finance lease assets of $ 171 million at December 31, 2022 and $ 208 million at December 31, 2021.

** Includes proportionately consolidated finance lease liabilities of $ 169 million at December 31, 2022 and $ 154 million at December 31, 2021.

*** Includes proportionately consolidated finance lease liabilities of $ 399 million at December 31, 2022 and $ 462 million at December 31, 2021.

The following table summarizes our lease costs:

Millions of Dollars

2022 2021 2020

Operating lease cost $ 212 278 321

Finance lease cost

Amortization of right-of-use assets 189 148 163

Interest on lease liabilities 32 27 34

Short-term lease cost**

Total lease cost***

$ 527 474 560

* The amounts presented in the table above have not been adjusted to reflect amounts recovered or reimbursed from oil and gas coventurers.

** Short-term leases are not recorded on our consolidated balance sheet.

*** Variable lease cost and sublease income are immaterial for the periods presented and therefore are not included in the table above.

The following table summarizes the lease terms and discount rates as of December 31:

Lease Term and Discount Rate

Weighted-average term (years)

Operating leases 5.64 5.97

Finance leases 6.60 7.49

Weighted-average discount rate (percent)

Operating leases 2.99 2.66

Finance leases 3.40 3.24

ConocoPhillips 2022 10-K

The following table summarizes other lease information:

Millions of Dollars

2022 2021 2020

Other Information*

Cash paid for amounts included in the measurement of lease liabilities

Operating cash flows from operating leases $ 148 204 232

Operating cash flows from finance leases 30 6 11

Financing cash flows from finance leases 166 73 255

Right-of-use assets obtained in exchange for operating lease liabilities $ 114 174 250

Right-of-use assets obtained in exchange for finance lease liabilities 256 447 426

*The amounts presented in the table above have not been adjusted to reflect amounts recovered or reimbursed from oil and gas coventurers.

In addition, pursuant to other applicable accounting guidance, lease payments made in connection with preparing another asset for its intended use are reported in the "Cash Flows From Investing Activities" section of our consolidated statement of cash flows.

The following table summarizes future lease payments for operating and finance leases at December 31, 2022:

Millions of Dollars

Maturity of Lease Liabilities

2023 $ 169 356

Remaining years 118 352

portion representing imputed interest ( 54 ) ( 184 )

Total lease liabilities $ 545 $ 1,320

*Future lease payments for operating and finance leases commencing on or after January 1, 2019, also include payments related to non-lease components in accordance with our election to adopt the optional practical expedient not to separate lease components apart from non-lease components for accounting purposes.

In addition, future payments related to operating and finance leases proportionately consolidated by the company have been included in the table on a proportionate basis consistent with our respective ownership interest in the underlying investee company or oil and gas venture.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 16—Employee Benefit Plans

Pension and Postretirement Plans

An analysis of the projected benefit obligations for our pension plans and accumulated benefit obligations for our postretirement health and life insurance plans follows:

Millions of Dollars

Pension Benefits Other Benefits

2022 2021 2022 2021

Change in Benefit Obligation

Benefit obligation at January 1 $ 1,924 4,124 2,548 4,403 137 170

Service cost 58 47 73 61 1 2

Interest cost 62 77 53 79 4 4

Plan participant contributions — — — — 16 16

Plan amendments — — — — 9 —

Actuarial (gain) loss ( 325 ) ( 847 ) ( 117 ) ( 176 ) ( 27 ) ( 16 )

Benefits paid ( 241 ) ( 144 ) ( 654 ) ( 162 ) ( 38 ) ( 40 )

Divestiture — ( 56 ) — — — —

Curtailment — — 12 — — 1

Recognition of termination benefits — — 9 — — —

Foreign currency exchange rate change — ( 425 ) — ( 81 ) — —

Benefit obligation at December 31*

$ 1,478 2,776 1,924 4,124 102 137

*Accumulated benefit obligation portion of above at December 31:

$ 1,384 2,542 1,793 3,658

Change in Fair Value of Plan Assets

Fair value of plan assets at January 1 $ 1,664 4,812 1,770 4,793 — —

Actual return on plan assets ( 319 ) ( 1,372 ) 97 147 — —

Company contributions 75 96 451 119 22 24

Plan participant contributions — 1 — 1 16 16

Benefits paid ( 241 ) ( 144 ) ( 654 ) ( 162 ) ( 38 ) ( 40 )

Divestiture — ( 46 ) — — — —

Foreign currency exchange rate change — ( 468 ) — ( 86 ) — —

Fair value of plan assets at December 31

$ 1,179 2,879 1,664 4,812 — —

Funded Status $ ( 299 ) 103 ( 260 ) 688 ( 102 ) ( 137 )

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Millions of Dollars

Pension Benefits Other Benefits

2022 2021 2022 2021

Amounts Recognized in the Consolidated Balance Sheet at December 31

Noncurrent assets $ — 373 1 991 — —

Current liabilities ( 28 ) ( 10 ) ( 29 ) ( 15 ) ( 32 ) ( 34 )

Noncurrent liabilities ( 271 ) ( 260 ) ( 232 ) ( 288 ) ( 70 ) ( 103 )

Total recognized $ ( 299 ) 103 ( 260 ) 688 ( 102 ) ( 137 )

Weighted-Average Assumptions Used to Determine Benefit Obligations at December 31

Discount rate 5.65 % 4.20 2.80 2.15 5.65 2.65

Rate of compensation increase 5.00 3.65 4.00 3.40

Interest crediting rate for applicable benefits 3.55 2.50

Weighted-Average Assumptions Used to Determine Net Periodic Benefit Cost for Years Ended December 31

Discount rate 3.85 % 2.15 2.60 1.80 2.65 2.35

Expected return on plan assets 3.90 2.85 5.20 2.50

Rate of compensation increase 4.00 3.40 4.00 3.40

Interest crediting rate for applicable benefits 2.50 2.10

For both U.S.

and international pension plans, the overall expected long-term rate of return is developed from the expected future return of each asset class, weighted by the expected allocation of pension assets to that asset class.

We rely on a variety of independent market forecasts in developing the expected rate of return for each class of assets.

During 2022 and 2021, the actuarial gains related to the benefit obligations for U.S.

and international plans were primarily related to an increase in the discount rates.

During 2020, the actuarial losses related to the benefit obligations for U.S.

and international plans were primarily related to a decrease in the discount rates.

The following tables summarize information related to the Company's pension plans with projected and accumulated benefit obligations in excess of the fair value of the plans' assets:

Millions of Dollars

Pension Benefits

Pension Plans with Projected Benefit Obligation in Excess of Plan Assets

Projected benefit obligation $ 1,478 277 261 362

Fair value of plan assets 1,179 6 — 58

Pension Plans with Accumulated Benefit Obligation in Excess of Plan Assets

Accumulated benefit obligation $ 1,384 239 234 271

Fair value of plan assets 1,179 6 — 9

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Included in accumulated other comprehensive income (loss) at December 31 were the following before-tax amounts that had not been recognized in net periodic benefit cost:

Millions of Dollars

Pension Benefits Other Benefits

2022 2021 2022 2021

Unrecognized net actuarial loss (gain) $ 172 681 188 86 ( 28 ) ( 1 )

Unrecognized prior service cost (credit) — 1 — 1 ( 98 ) ( 145 )

Millions of Dollars

Pension Benefits Other Benefits

2022 2021 2022 2021

Sources of Change in Other Comprehensive Income (Loss)

Net gain (loss) arising during the period $ ( 44 ) ( 606 ) 134 207 27 16

Amortization of actuarial loss included in income (loss)* 61 11 145 33 — —

Net change during the period $ 17 ( 595 ) 279 240 27 16

Prior service credit (cost) arising during the period $ — ( 1 ) — — ( 9 ) —

Amortization of prior service (credit) included in income (loss) — ( 1 ) — ( 1 ) ( 38 ) ( 37 )

Net change during the period $ — ( 2 ) — ( 1 ) ( 47 ) ( 37 )

*Includes settlement (gains) losses recognized in 2022 and 2021.

The components of net periodic benefit cost of all defined benefit plans are presented in the following table:

Millions of Dollars

Pension Benefits Other Benefits

2022 2021 2020 2022 2021 2020

Components of Net Periodic Benefit Cost

Service cost $ 58 47 73 61 85 54 1 2 2

Interest cost 62 77 53 79 66 85 4 4 6

Expected return on plan assets ( 50 ) ( 124 ) ( 80 ) ( 120 ) ( 85 ) ( 145 ) — — —

Amortization of prior service credit — ( 1 ) — ( 1 ) — ( 1 ) ( 38 ) ( 37 ) ( 31 )

Recognized net actuarial loss (gain) 24 11 43 33 51 22 — — 1

Settlements loss (gain) 37 — 102 — 44 ( 1 ) — — —

Curtailment loss — — 12 — — — — — —

Net periodic benefit cost $ 131 10 203 52 161 14 ( 33 ) ( 31 ) ( 22 )

The components of net periodic benefit cost, other than the service cost component, are included in the “ Other expenses ” line item on our consolidated income statement.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

We recognized pension settlement losses of $ 37 million in 2022, $ 102 million in 2021, and $ 43 million in 2020 as lump-sum benefit payments from certain U.S.

and international pension plans exceeded the sum of service and interest costs for those plans and led to recognition of settlement losses.

In determining net pension and other postretirement benefit costs, we amortize prior service costs on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan.

For net actuarial gains and losses, we amortize 10 percent of the unamortized balance each year.

We have multiple non-pension postretirement benefit plans for health and life insurance.

The health care plans are contributory and subject to various cost sharing features, most with participant and company contributions adjusted annually;

the life insurance plans are noncontributory.

The measurement of the U.S.

pre-65 retiree medical accumulated postretirement benefit obligation assumes a health care cost trend rate of 6.5 percent in 2023 that declines to 5 percent by 2029.

The measurement of the U.S.

post-65 retiree medical accumulated postretirement benefit obligation assumes a health care cost trend rate of 4.5 percent in 2023 that increases to 5 percent by 2029.

We follow a policy of broadly diversifying pension plan assets across asset classes and individual holdings.

As a result, our plan assets have no significant concentrations of credit risk.

Asset classes that are considered appropriate include U.S.

equities, non-U.S.

equities, U.S.

fixed income, non-U.S.

fixed income, real estate and private equity investments.

Plan fiduciaries may consider and add other asset classes to the investment program from time to time.

The target allocations for plan assets are 25 percent equity securities, 71 percent debt securities, and 4 percent real estate.

Generally, the plan investments are publicly traded, therefore minimizing liquidity risk in the portfolio.

The following is a description of the valuation methodologies used for the pension plan assets.

There have been no changes in the methodologies used at December 31, 2022 and 2021.

• Fair values of equity securities and government debt securities categorized in Level 1 are primarily based on quoted market prices in active markets for identical assets and liabilities.

• Fair values of corporate debt securities, agency and mortgage-backed securities and government debt securities categorized in Level 2 are estimated using recently executed transactions and quoted market prices for similar assets and liabilities in active markets and for identical assets and liabilities in markets that are not active.

If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices.

When observable quoted market prices are not available, fair value is based on pricing models that use something other than actual market prices (e.g., observable inputs such as benchmark yields, reported trades and issuer spreads for similar securities), and these securities are categorized in Level 3 of the fair value hierarchy.

• Fair values of investments in common/collective trusts are determined by the issuer of each fund based on the fair value of the underlying assets.

• Fair values of mutual funds are based on quoted market prices, which represent the net asset value of shares held.

• Time deposits are valued at cost, which approximates fair value.

• Cash is valued at cost, which approximates fair value.

Fair values of international cash equivalents categorized in Level 2 are valued using observable yield curves, discounting and interest rates.

cash balances held in the form of short-term fund units that are redeemable at the measurement date are categorized as Level 2.

• Fair values of exchange-traded derivatives classified in Level 1 are based on quoted market prices.

For other derivatives classified in Level 2, the values are generally calculated from pricing models with market input parameters from third-party sources.

• Fair values of insurance contracts are valued at the present value of the future benefit payments owed by the insurance company to the plans’ participants.

• Fair values of real estate investments are valued using real estate valuation techniques and other methods that include reference to third-party sources and sales comparables where available.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

• A portion of U.S.

pension plan assets is held as a participating interest in an insurance annuity contract, which is calculated as the market value of investments held under this contract, less the accumulated benefit obligation covered by the contract.

The participating interest is classified as Level 3 in the fair value hierarchy as the fair value is determined via a combination of quoted market prices, recently executed transactions, and an actuarial present value computation for contract obligations.

At December 31, 2022, the participating interest in the annuity contract was valued at $ 55 million and consisted of $ 144 million in debt securities, less $ 89 million for the accumulated benefit obligation covered by the contract.

At December 31, 2021, the participating interest in the annuity contract was valued at $ 83 million and consisted of $ 206 million in debt securities, less $ 123 million for the accumulated benefit obligation covered by the contract.

The participating interest is not available for meeting general pension benefit obligations in the near term.

No future company contributions are required and no new benefits are being accrued under this insurance annuity contract.

The fair values of our pension plan assets at December 31, by asset class were as follows:

Millions of Dollars

International

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Equity securities

$ 4 — — 4 — — — —

International 36 — — 36 — — — —

Mutual funds 14 — — 14 201 298 — 499

Debt securities

Corporate — 1 — 1 — — — —

Mutual funds — — — — 365 — — 365

Cash and cash equivalents — — — — 36 — — 36

Real estate — — — — — — 146 146

Total in fair value hierarchy $ 54 1 — 55 602 298 146 1,046

Investments measured at net asset value*

Equity securities

Common/collective trusts 265 192

Debt securities

Common/collective trusts 759 1,637

Cash and cash equivalents 10 —

Real estate 34 —

Total** $ 54 1 — 1,123 602 298 146 2,875

*In accordance with FASB ASC Topic 715, “Compensation—Retirement Benefits,” certain investments that are to be measured at fair value using the net asset value per share (or its equivalent) practical expedient have not been classified in the fair value hierarchy.

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Change in Fair Value of Plan Assets.

**Excludes the participating interest in the insurance annuity contract with a net asset of $ 55 million and net receivables related to security transactions of $ 5 million.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The fair values of our pension plan assets at December 31, by asset class were as follows:

Millions of Dollars

International

Level 1 Level 2 Level 3 Total Level 1 Level 2 Level 3 Total

Equity securities

$ 3 — 5 8 — — — —

International 42 — — 42 — — — —

Mutual funds 17 — — 17 236 403 — 639

Debt securities

Corporate — 1 — 1 — — — —

Mutual funds — — — — 511 — — 511

Cash and cash equivalents — — — — 68 — — 68

Derivatives — — — — — — — —

Real estate — — — — — — 157 157

Total in fair value hierarchy $ 62 1 5 68 815 403 157 1,375

Investments measured at net asset value*

Equity securities

Common/collective trusts 394 417

Debt securities

Common/collective trusts 1,073 3,015

Cash and cash equivalents 9 —

Real estate 36 1

Total** $ 62 1 5 1,580 815 403 157 4,808

The fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the amounts presented in the Change in Fair Value of Plan Assets.

**Excludes the participating interest in the insurance annuity contract with a net asset of $ 83 million and net receivables related to security transactions of $ 5 million.

Level 3 activity was not material for all periods.

Our funding policy for U.S.

plans is to contribute at least the minimum required by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, as amended.

Contributions to foreign plans are dependent upon local laws and tax regulations.

In 2023, we expect to contribute approximately $ 90 million to our domestic qualified and nonqualified pension and postretirement benefit plans and $ 45 million to our international qualified and nonqualified pension and postretirement benefit plans.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The following benefit payments, which are exclusive of amounts to be paid from the insurance annuity contract and which reflect expected future service, as appropriate, are expected to be paid:

Millions of Dollars

Benefits Other

2023 $ 216 121 17

2024 199 123 15

2025 188 125 14

2026 173 126 12

2027 171 128 11

2028–2032 685 677 38

The following table summarizes our severance accrual activity:

Millions of Dollars

2022 2021 2020

Balance at January 1 $ 78 24 23

Accruals 1 170 14

Benefit payments ( 48 ) ( 116 ) ( 13 )

Balance at December 31

Accruals include severance costs associated with our company-wide restructuring program.

Of the remaining balance at December 31, 2022, $ 19 million is classified as short-term.

Defined Contribution Plans

employees are eligible to participate in the ConocoPhillips Savings Plan (CPSP).

Employees can deposit up to 75 percent of their eligible pay, subject to statutory limits, in the CPSP to a choice of 17 investment options.

Employees who participate in the CPSP and contribute 1 percent of their eligible pay receive a 6 percent company cash match with a potential company discretionary cash contribution of up to 6 percent.

Effective January 1, 2019, new employees, rehires and employees that elected to opt out of Title II of the ConocoPhillips Retirement Plan are eligible to receive a Company Retirement Contribution (CRC) of 6 percent of eligible pay into their CPSP.

After three years of service with the company, the employee is 100 percent vested in any CRC.

Company contributions charged to expense for the CPSP and predecessor plans were $ 140 million in 2022, $ 93 million in 2021 and $ 62 million in 2020.

We have several defined contribution plans for our international employees, each with its own terms and eligibility depending on location.

Total compensation expense recognized for these international plans was approximately $ 24 million in 2022, $ 26 million in 2021 and $ 25 million in 2020.

Share-Based Compensation Plans

The 2014 Omnibus Stock and Performance Incentive Plan of ConocoPhillips (the Plan) was approved by shareholders in May 2014, replacing similar prior plans and providing that no new awards shall be granted under the prior plans.

Over its 10 -year life, the Plan allows the issuance of up to 79 million shares of our common stock for compensation to our employees and directors;

however, as of the effective date of the Plan, (i) any shares of common stock available for future awards under the prior plans and (ii) any shares of common stock represented by awards granted under the Plan or the prior plans that are forfeited, expire or are cancelled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the company shall be available for awards under the Plan.

Of the 79 million shares available for issuance under the Plan, no more than 40 million shares of common stock are available for incentive stock options.

The Human Resources and Compensation Committee of our Board of Directors is authorized to determine the types, terms, conditions and limitations of awards granted.

Awards may be granted in the form of, but not limited to, stock options, restricted stock units and performance share units to employees and non-employee directors who contribute to the company’s continued success and profitability.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Total share-based compensation expense is measured using the grant date fair value for our equity-classified awards and the settlement date fair value for our liability-classified awards.

We recognize share-based compensation expense over the shorter of the service period (i.e., the stated period of time required to earn the award);

or the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement, but not less than six months, as this is the minimum period of time required for an award to not be subject to forfeiture.

Our share-based compensation programs generally provide accelerated vesting (i.e., a waiver of the remaining period of service required to earn an award) for awards held by employees at the time of their retirement.

Some of our share-based awards vest ratably (i.e., portions of the award vest at different times) while some of our awards cliff vest (i.e., all of the award vests at the same time).

We recognize expense on a straight-line basis over the service period for the entire award, whether the award was granted with ratable or cliff vesting.

Compensation Expense —Total share-based compensation expense recognized in net income (loss) and the associated tax benefit were:

Millions of Dollars

2022 2021 2020

Compensation cost $ 377 304 159

Tax benefit 95 76 40

Stock Options —Stock options granted under the provisions of the Plan and prior plans permit purchase of our common stock at exercise prices equivalent to the average fair market value of ConocoPhillips common stock on the date the options were granted.

The options have terms of 10 years and generally vest ratably, with one-third of the options awarded vesting and becoming exercisable on each anniversary date following the date of grant.

Options awarded to certain employees already eligible for retirement vest within six months of the grant date, but those options do not become exercisable until the end of the normal vesting period.

Beginning in 2018, stock option grants were discontinued and replaced with three-year, time-vested restricted stock units which generally will be cash-settled for 2018 and 2019 awards and stock-settled beginning with 2020 awards.

The following summarizes our stock option activity for the year ended December 31, 2022:

Millions of Dollars

Options Weighted-Average

Exercise Price Aggregate

Intrinsic Value

Outstanding at December 31, 2021

11,973,783 $ 56.46 $ 188

Exercised ( 7,670,208 ) 57.12 ( 308 )

Expired or cancelled — —

Outstanding at December 31, 2022

4,303,575 $ 55.28 $ 266

Vested at December 31, 2022

4,303,575 $ 55.28 $ 266

Exercisable at December 31, 2022

4,303,575 $ 55.28 $ 266

The weighted-average remaining contractual term of outstanding options, vested options and exercisable options at December 31, 2022, were all 2.57 years.

The aggregate intrinsic value of options exercised was $ 68 million in 2021 and $ 23 million in 2020.

During 2022, we received $ 438 million in cash and realized a tax benefit of $ 59 million from the exercise of options.

At December 31, 2022, all outstanding stock options were fully vested and there was no remaining compensation cost to be recorded.

Stock Unit Program —Generally, restricted stock units (RSU) are granted annually under the provisions of the Plan and vest in an aggregate installment on the third anniversary of the grant date.

In addition, RSUs granted under the Plan for a variable long-term incentive program vest ratably in three equal annual installments beginning on the first anniversary of the grant date.

Restricted stock units are also granted ad hoc to attract or retain key personnel, and the terms and conditions under which these restricted stock units vest vary by award.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Stock-Settled

Upon vesting, these restricted stock units are settled by issuing one share of ConocoPhillips common stock per unit.

Units awarded to retirement eligible employees vest six months from the grant date;

however, those units are not issued as common stock until the earlier of separation from the company or the end of the regularly scheduled vesting period.

Until issued as stock, most recipients of the RSUs receive a cash payment of a dividend equivalent or an accrued reinvested dividend equivalent that is charged to retained earnings.

The grant date fair market value of these RSUs is deemed equal to the average ConocoPhillips stock price on the grant date.

The grant date fair market value of units that do not receive a dividend equivalent while unvested is deemed equal to the average ConocoPhillips stock price on the grant date, less the net present value of the dividends that will not be received.

The following summarizes our stock-settled stock unit activity for the year ended December 31, 2022:

Stock Units Weighted-Average

Grant Date Fair Value Millions of Dollars

Total Fair Value

Outstanding at December 31, 2021

7,645,311 $ 53.81

Granted 2,139,168 90.57

Forfeited ( 137,011 ) 71.38

Issued ( 2,069,275 ) 63.57 $ 193

Outstanding at December 31, 2022

7,578,193 $ 61.20

Not Vested at December 31, 2022

5,264,282 $ 61.58

At December 31, 2022, the remaining unrecognized compensation cost from the unvested stock-settled units was $ 135 million, which will be recognized over a weighted-average period of 1.67 years, the longest period being 2.67 years.

The weighted-average grant date fair value of stock unit awards granted during 2021 and 2020 was $ 46.56 and $ 57.40 , respectively.

The total fair value of stock units issued during 2021 and 2020 was $ 144 million and $ 143 million, respectively.

Cash settled executive restricted stock units granted in 2018 and 2019 replaced the stock option program.

These restricted stock units, subject to elections to defer, will be settled in cash equal to the fair market value of a share of ConocoPhillips common stock per unit on the settlement date and are classified as liabilities on the balance sheet.

Units awarded to retirement eligible employees vest six months from the grant date;

however, those units are not settled until the earlier of separation from the company or the end of the regularly scheduled vesting period.

Compensation expense is initially measured using the average fair market value of ConocoPhillips common stock and is subsequently adjusted, based on changes in the ConocoPhillips stock price through the end of each subsequent reporting period, through the settlement date.

Recipients receive an accrued reinvested dividend equivalent that is charged to compensation expense.

The accrued reinvested dividend is paid at the time of settlement, subject to the terms and conditions of the award.

Beginning with executive restricted stock units granted in 2020, awards will be settled in stock.

The following summarizes our cash-settled stock unit activity for the year ended December 31, 2022:

Stock Units Weighted-Average Grant Date Fair Value Millions of Dollars

Total Fair Value

Outstanding at December 31, 2021

226,476 $ 72.18

Granted 531 85.37

Forfeited — —

Issued ( 227,007 ) 91.47 $ 21

Outstanding at December 31, 2022

At December 31, 2022, there was no remaining unrecognized compensation cost to be recorded for the unvested cash-settled units.

The weighted-average grant date fair value of stock unit awards granted during 2021 and 2020 were $ 57.19 and $ 41.59 , respectively.

The total fair value of stock units issued during 2021 and 2020 were $ 20 million and negligible, respectively.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Performance Share Program —Under the Plan, we also annually grant restricted performance share units (PSUs) to senior management.

These PSUs are authorized three years prior to their effective grant date (the performance period).

Stock-Settled

For performance periods beginning before 2009, PSUs do not vest until the employee becomes eligible for retirement by reaching age 55 with five years of service, and restrictions do not lapse until the employee separates from the company.

With respect to awards for performance periods beginning in 2009 through 2012, PSUs do not vest until the earlier of the date the employee becomes eligible for retirement by reaching age 55 with five years of service or five years after the grant date of the award, and restrictions do not lapse until the earlier of the employee’s separation from the company or five years after the grant date (although recipients can elect to defer the lapsing of restrictions until separation).

We recognize compensation expense for these awards beginning on the grant date and ending on the date the PSUs are scheduled to vest.

Since these awards are authorized three years prior to the effective grant date, for employees eligible for retirement by or shortly after the grant date, we recognize compensation expense over the period beginning on the date of authorization and ending on the date of grant.

Until issued as stock, recipients of the PSUs receive a cash payment of a dividend equivalent that is charged to retained earnings.

Beginning in 2013, PSUs authorized for future grants will vest, absent employee election to defer, upon settlement following the conclusion of the three-year performance period.

We recognize compensation expense over the period beginning on the date of authorization and ending on the conclusion of the performance period.

PSUs are settled by issuing one share of ConocoPhillips common stock per unit.

The following summarizes our stock-settled Performance Share Program activity for the year ended December 31, 2022:

Weighted-Average

Grant Date Fair Value Millions of Dollars

Stock Units Total Fair Value

Outstanding at December 31, 2021

1,448,847 $ 50.69

Granted 1,754 91.58

Issued ( 218,986 ) 51.04 $ 21

Outstanding at December 31, 2022

1,231,615 $ 50.68

At December 31, 2022, there was no remaining unrecognized compensation cost to be recorded on the unvested stock-settled performance shares.

There were no stock-settled PSUs granted during 2021;

however, the weighted-average grant date fair value of stock-settled PSUs granted during 2020 was $ 58.61 .

The total fair value of stock-settled PSUs issued during 2021 and 2020 were $ 18 million and $ 13 million, respectively.

In connection with and immediately following the separation of our Downstream businesses in 2012, grants of new PSUs, subject to a shortened performance period, were authorized.

Once granted, these PSUs vest, absent employee election to defer, on the earlier of five years after the grant date of the award or the date the employee becomes eligible for retirement.

For employees eligible for retirement by or shortly after the grant date, we recognize compensation expense over the period beginning on the date of authorization and ending on the date of grant.

Otherwise, we recognize compensation expense beginning on the grant date and ending on the date the PSUs are scheduled to vest.

These PSUs are settled in cash equal to the fair market value of a share of ConocoPhillips common stock per unit on the settlement date and thus are classified as liabilities on the balance sheet.

Until settlement occurs, recipients of the PSUs receive a cash payment of a dividend equivalent that is charged to compensation expense.

Beginning in 2013, PSUs authorized for future grants will vest upon settlement following the conclusion of the three-year performance period.

We recognize compensation expense over the period beginning on the date of authorization and ending at the conclusion of the performance period.

These PSUs will be settled in cash equal to the fair market value of a share of ConocoPhillips common stock per unit on the settlement date and are classified as liabilities on the balance sheet.

For performance periods beginning before 2018, during the performance period, recipients of the PSUs do not receive a cash payment of a dividend equivalent, but after the performance period ends, until settlement in cash occurs, recipients of the PSUs receive a cash payment of a dividend equivalent that is charged to compensation expense.

For the performance period beginning in 2018, recipients of the PSUs receive an accrued reinvested dividend equivalent that is charged to compensation expense.

The accrued reinvested dividend is paid at the time of settlement, subject to the terms and conditions of the award.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The following summarizes our cash-settled Performance Share Program activity for the year ended December 31, 2022:

Weighted-Average

Grant Date Fair Value Millions of Dollars

Stock Units Total Fair Value

Outstanding at December 31, 2021

117,679 $ 72.18

Granted 967,151 91.58

Settled ( 975,007 ) 89.87 $ 88

Outstanding at December 31, 2022

109,823 $ 117.11

At December 31, 2022, all outstanding cash-settled performance awards were fully vested and there was no remaining compensation cost to be recorded.

The weighted-average grant date fair value of cash-settled PSUs granted during 2021 and 2020 was $ 46.65 and $ 58.61 , respectively.

The total fair value of cash-settled performance share awards settled during 2021 and 2020 was $ 52 million and $ 116 million, respectively.

From inception of the Performance Share Program through 2013, approved PSU awards were granted after the conclusion of performance periods.

Beginning in February 2014, initial target PSU awards are issued near the beginning of new performance periods.

These initial target PSU awards will terminate at the end of the performance periods and will be settled after the performance periods have ended.

Also in 2014, initial target PSU awards were issued for open performance periods that began in prior years.

For the open performance period beginning in 2012, the initial target PSU awards terminated at the end of the three-year performance period and were replaced with approved PSU awards.

For the open performance period beginning in 2013, the initial target PSU awards terminated at the end of the three-year performance period and were settled after the performance period ended.

There is no effect on recognition of compensation expense.

Other —In addition to the above active programs, we have outstanding shares of restricted stock and restricted stock units that were either issued as part of our non-employee director compensation program for current and former members of the company’s Board of Directors, as part of an executive compensation program that has been discontinued or acquired as a result of an acquisition.

Generally, the recipients of the restricted shares or units receive a dividend or dividend equivalent.

The following summarizes the aggregate activity of these restricted shares and units for the year ended December 31, 2022:

Weighted-Average

Grant Date Fair Value Millions of Dollars

Stock Units Total Fair Value

Outstanding at December 31, 2021

1,616,367 $ 47.24

Granted 73,450 96.20

Cancelled ( 1,030 ) 24.61

Issued ( 449,028 ) 48.28 $ 40

Outstanding at December 31, 2022

1,239,759 $ 49.78

Not Vested at December 31, 2022

437,994 $ 45.90

At December 31, 2022, the remaining compensation cost from the unvested restricted stock was $ 10 million, which will be recognized over a weighted-average period of 1 year.

The weighted-average grant date fair value of awards granted during 2021 and 2020 was $ 46.43 and $ 51.46 , respectively.

The total fair value of awards issued during 2021 and 2020 was $ 8 million and $ 6 million, respectively.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 17—Income Taxes

Components of income tax provision (benefit) were:

Millions of Dollars

2022 2021 2020

Current $ 1,263 32 3

Deferred 1,629 1,161 ( 625 )

Current 5,813 3,128 350

Deferred 387 66 ( 70 )

State and local

Current 386 127 ( 4 )

Deferred 70 119 ( 139 )

Total tax provision (benefit) $ 9,548 4,633 ( 485 )

Deferred income taxes reflect the net tax effect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for tax purposes.

Major components of deferred tax liabilities and assets at December 31 were:

Millions of Dollars

Deferred Tax Liabilities

PP&E and intangibles $ 11,100 10,170

Inventory 48 44

Other 190 213

Total deferred tax liabilities 11,338 10,427

Deferred Tax Assets

Benefit plan accruals 450 321

Asset retirement obligations and accrued environmental costs 2,333 2,297

Investments in joint ventures 1,917 1,684

Other financial accruals and deferrals 736 827

Loss and credit carryforwards 6,354 7,402

Other 112 399

Total deferred tax assets 11,902 12,930

valuation allowance ( 8,049 ) ( 8,342 )

Total deferred tax assets net of valuation allowance 3,853 4,588

Net deferred tax liabilities $ 7,485 5,839

At December 31, 2022, noncurrent assets and liabilities included deferred taxes of $ 241 million and $ 7,726 million, respectively.

At December 31, 2021, noncurrent assets and liabilities included deferred taxes of $ 340 million and $ 6,179 million, respectively.

At December 31, 2022, the loss and credit carryforward deferred tax assets were primarily related to U.S.

foreign tax credit carryforwards of $ 5.3 billion and various jurisdictions net operating loss and credit carryforwards of $ 1.1 billion.

If not utilized, U.S.

foreign tax credits and net operating losses will begin to expire in 2023.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The following table shows a reconciliation of the beginning and ending deferred tax asset valuation allowance for 2022, 2021 and 2020:

Millions of Dollars

2022 2021 2020

Balance at January 1 $ 8,342 9,965 10,214

Charged to expense (benefit) 5 ( 45 ) 460

Other* ( 298 ) ( 1,578 ) ( 709 )

Balance at December 31

$ 8,049 8,342 9,965

*Represents changes due to originating deferred tax assets that have no impact to our effective tax rate, acquisitions/dispositions/revisions and the effect of translating foreign financial statements.

Valuation allowances have been established to reduce deferred tax assets to an amount that will, more likely than not, be realized.

At December 31, 2022, we have maintained a valuation allowance with respect to substantially all U.S.

foreign tax credit carryforwards, basis differences in our APLNG investment, and certain net operating loss carryforwards for various jurisdictions.

During 2022, the valuation allowance movement charged to earnings primarily relates to the impact of 2022 changes to Norway’s Petroleum Tax System which is partly offset by the U.S.

tax impact of the disposition of our CVE common shares.

Other movements are primarily related to valuation allowances on expiring tax attributes.

Based on our historical taxable income, expectations for the future, and available tax-planning strategies, management expects deferred tax assets, net of valuation allowances, will primarily be realized as offsets to reversing deferred tax liabilities.

During the second quarter of 2022, Norway enacted changes to the Petroleum Tax System.

As a result of the enactment, a valuation allowance of $ 58 million was recorded during the second quarter to reflect changes to our ability to realize certain deferred tax assets under the new law.

During 2021, the valuation allowance movement charged to earnings primarily relates to the fair value measurement of our CVE common shares that are not expected to be realized, and the expected realization of certain U.S.

tax attributes associated with our planned disposition of our Indonesia assets.

This is partially offset by Australian tax benefits associated with our impairment of APLNG that we do not expect to be realized.

Other movements are primarily related to valuation allowances on expiring tax attributes.

For more information on our Indonesia disposition see Note 3 .

During 2020, the valuation allowance movement charged to earnings primarily related to capital losses in Australia and to the fair value measurement of our CVE common shares that are not expected to be realized.

Other movements are primarily related to valuation allowances on expiring tax attributes.

At December 31, 2022, unremitted income considered to be permanently reinvested in certain foreign subsidiaries and foreign corporate joint ventures totaled approximately $ 4,477 million.

Deferred income taxes have not been provided on this amount, as we do not plan to initiate any action that would require the payment of income taxes.

The estimated amount of additional tax, primarily local withholding tax, that would be payable on this income if distributed is approximately $ 224 million.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

The following table shows a reconciliation of the beginning and ending unrecognized tax benefits for 2022, 2021 and 2020:

Millions of Dollars

2022 2021 2020

Balance at January 1 $ 1,345 1,206 1,177

Additions based on tax positions related to the current year 6 15 6

Additions for tax positions of prior years 6 177 67

Reductions for tax positions of prior years ( 62 ) ( 5 ) ( 34 )

Settlements ( 510 ) — ( 9 )

Lapse of statute ( 75 ) ( 48 ) ( 1 )

Balance at December 31

$ 710 1,345 1,206

Included in the balance of unrecognized tax benefits for 2022, 2021 and 2020 were $ 701 million, $ 1,261 million and $ 1,128 million respectively, which, if recognized, would impact our effective tax rate.

The balance of the unrecognized tax benefits decreased due to the closing of the 2017 audit of our federal income tax return.

As a result, we recognized federal and state tax benefits totaling $ 515 million relating to the recovery of outside tax basis previously offset by a full reserve.

The balance of the unrecognized tax benefits increased in 2021 mainly due to U.S.

tax credits acquired through our Concho acquisition.

See Note 3 and Not e 11.

At December 31, 2022, 2021 and 2020, accrued liabilities for interest and penalties totaled $ 35 million, $ 47 million and $ 46 million, respectively, net of accrued income taxes.

Interest and penalties resulted in an increase to earnings of $ 12 million in 2022, a reduction of $ 1 million in 2021 and a reduction to earnings of $ 4 million in 2020.

We file tax returns in the U.S.

federal jurisdiction and in many foreign and state jurisdictions.

Audits in major jurisdictions are generally complete as follows:

Canada (2016), Norway (2021) and U.S.

Issues in dispute for audited years and audits for subsequent years are ongoing and in various stages of completion in the many jurisdictions in which we operate around the world.

Consequently, the balance in unrecognized tax benefits can be expected to fluctuate from period to period.

Within the next twelve months, we may have audit periods close that could significantly impact our total unrecognized tax benefits.

It is reasonably possible such changes could be significant when compared with our total unrecognized tax benefits, but the amount of change is not estimable.

The amounts of U.S.

and foreign income (loss) before income taxes, with a reconciliation of tax at the federal statutory rate to the provision for income taxes, were:

Millions of Dollars Percent of Pre-Tax Income (Loss)

2022 2021 2020 2022 2021 2020

Income (loss) before income taxes

United States $ 16,739 8,024 ( 3,587 ) 59.3 % 63.1 114.2

Foreign 11,489 4,688 447 40.7 36.9 ( 14.2 )

$ 28,228 12,712 ( 3,140 ) 100.0 % 100.0 100.0

Federal statutory income tax $ 5,928 2,670 ( 659 ) 21.0 % 21.0 21.0

effective tax rates 3,866 1,915 194 13.7 15.1 ( 6.2 )

Australia disposition — — ( 349 ) — — 11.1

Recovery of outside basis ( 30 ) ( 55 ) ( 22 ) ( 0.1 ) ( 0.4 ) 0.7

Adjustment to tax reserves ( 551 ) ( 11 ) 18 ( 2.0 ) ( 0.1 ) ( 0.6 )

Adjustment to valuation allowance 5 ( 45 ) 460 — ( 0.4 ) ( 14.6 )

State income tax 405 194 ( 112 ) 1.4 1.5 3.6

Enhanced oil recovery credit ( 37 ) ( 99 ) ( 6 ) ( 0.1 ) ( 0.8 ) 0.2

Other ( 38 ) 64 ( 9 ) ( 0.1 ) 0.5 0.3

Total $ 9,548 4,633 ( 485 ) 33.8 % 36.4 15.5

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Our effective tax rate for 2022 was driven by our jurisdictional tax rates for this profit mix with net favorable impacts from routine tax credits and valuation allowance adjustments.

The adjustment to tax reserves primarily relates to the closing of the audit of our 2017 U.S.

federal tax return and the recognition of the U.S.

federal and state tax benefits described above.

Our effective tax rate for 2021 was driven by our jurisdictional tax rates for this profit mix with net favorable impacts from routine tax credits and valuation allowance adjustments.

The valuation allowance adjustment is primarily related to the fair value measurement and disposition of our CVE common shares of $ 218 million and the ability to utilize the U.S.

foreign tax credit and capital loss carryforward due to our anticipated disposition of our Indonesia entities of $ 29 million.

This was partially offset by an increase to our valuation allowance related to the tax impact of the impairment of our APLNG investment of $ 206 million for which we do not expect to receive a tax benefit.

Our effective tax rate for 2020 was impacted by the disposition of our Australia-West assets as well as the valuation allowance related to the fair value measurement of our CVE common shares.

The Australia-West disposition generated a before-tax gain of $ 587 million with an associated tax benefit of $ 10 million and resulted in the de-recognition of deferred tax assets resulting in $ 92 million of tax expense.

The disposition also generated an Australia capital loss tax benefit of $ 313 million which has been fully offset by a valuation allowance.

Due to changes in the fair market value of CVE common shares, the valuation allowance was increased by $ 178 million to offset the expected capital loss.

On August 16, 2022, the U.S.

enacted the Inflation Reduction Act of 2022, which among other things, implements a 15 percent minimum tax on book income of certain large corporations, a 1 percent excise tax on net stock repurchases and several tax incentives to promote lower carbon energy.

We are continuing to evaluate the impacts of this legislation as additional guidance is released;

however, we do not believe any impacts will be material to our consolidated financial statements.

Note 18—Accumulated Other Comprehensive Loss

Accumulated other comprehensive loss in the equity section of the balance sheet included:

Millions of Dollars

Benefit Plans Net

on Securities Foreign

Translation Accumulated

Comprehensive

December 31, 2019 $ ( 350 ) — ( 5,007 ) ( 5,357 )

Other comprehensive income (loss) ( 75 ) 2 212 139

December 31, 2020 ( 425 ) 2 ( 4,795 ) ( 5,218 )

Other comprehensive income (loss) 394 ( 2 ) ( 124 ) 268

December 31, 2021 ( 31 ) — ( 4,919 ) ( 4,950 )

Other comprehensive income (loss) ( 417 ) ( 11 ) ( 622 ) ( 1,050 )

December 31, 2022 $ ( 448 ) ( 11 ) ( 5,541 ) ( 6,000 )

The following table summarizes reclassifications out of accumulated other comprehensive loss during the years ended December 31:

Millions of Dollars

Defined Benefit Plans $ 26 109

Above amounts are included in the computation of net periodic benefit cost and are presented net of tax expense of:

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 19—Cash Flow Information

Millions of Dollars

2022 2021 2020

Noncash Investing Activities

Increase (decrease) in PP&E related to an increase (decrease) in asset retirement obligations $ 825 442 ( 116 )

Cash Payments

Interest $ 873 924 785

Income taxes 7,368 856 905

Net Sales (Purchases) of Investments

Short-term investments purchased $ ( 5,046 ) ( 5,554 ) ( 12,435 )

Short-term investments sold 3,102 8,810 12,015

Investments and long-term receivables purchased ( 775 ) ( 279 ) ( 325 )

Investments and long-term receivables sold 90 114 87

$ ( 2,629 ) 3,091 ( 658 )

Income tax payments have increased in 2022 as the company is returning to a tax paying position in the U.S.

as well as, increased taxes in Norway, and timing of tax payments in Libya.

See Note 3 and Note 12 for additional information on cash and non-cash changes to our consolidated balance sheet associated with our Concho acquisition.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 20—Other Financial Information

Millions of Dollars

2022 2021 2020

Interest and Debt Expense

Debt $ 791 887 788

Other 72 59 73

Capitalized ( 58 ) ( 62 ) ( 55 )

Expensed $ 805 884 806

Other Income (Loss)

Interest income $ 195 33 100

Gain (loss) on investment in Cenovus Energy* 251 1,040 ( 855 )

Other, net 58 130 246

$ 504 1,203 ( 509 )

*See Note 5 .

Research and Development Expenditures— expensed

Shipping and Handling Costs $ 1,595 1,047 857

Foreign Currency Transaction (Gains) Losses— after-tax

Alaska $ — — —

Lower 48 — — —

Canada ( 20 ) ( 1 ) ( 7 )

Europe, Middle East and North Africa ( 110 ) ( 11 ) ( 15 )

Asia Pacific 30 2 ( 11 )

Other International ( 1 ) 1 2

Corporate and Other 21 ( 7 ) ( 31 )

$ ( 80 ) ( 16 ) ( 62 )

Millions of Dollars

Properties, Plants and Equipment

Proved properties $ 119,609 114,274 *

Unproved properties 7,325 10,993

Other 4,562 4,379

Gross properties, plants and equipment 131,496 129,646

Accumulated depreciation, depletion and amortization ( 66,630 ) ( 64,735 ) *

Net properties, plants and equipment $ 64,866 64,911

*Excludes assets classified as held for sale at December 31, 2021.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 21—Related Party Transactions

Our related parties primarily include equity method investments and certain trusts for the benefit of employees.

For disclosures on trusts for the benefit of employees, see Note 16 .

Significant transactions with our equity affiliates were:

Millions of Dollars

2022 2021 2020

Operating revenues and other income $ 88 88 79

Purchases 1 5 —

Operating expenses and selling, general and administrative expenses 189 196 63

Net interest income* ( 1 ) ( 2 ) ( 5 )

*We paid interest to, or received interest from, various affiliates.

See Note 4 , for additional information on loans to affiliated companies.

Note 22—Sales and Other Operating Revenues

Revenue from Contracts with Customers

The following table provides further disaggregation of our consolidated sales and other operating revenues:

Millions of Dollars

2022 2021 2020

Revenue from contracts with customers $ 61,049 34,590 13,662

Revenue from contracts outside the scope of ASC Topic 606

Physical contracts meeting the definition of a derivative 17,150 11,500 5,177

Financial derivative contracts 295 ( 262 ) ( 55 )

Consolidated sales and other operating revenues $ 78,494 45,828 18,784

Revenues from contracts outside the scope of ASC Topic 606 relate primarily to physical gas contracts at market prices, which qualify as derivatives accounted for under ASC Topic 815, “Derivatives and Hedging,” and for which we have not elected NPNS.

There is no significant difference in contractual terms or the policy for recognition of revenue from these contracts and those within the scope of ASC Topic 606.

The following disaggregation of revenues is provided in conjunction with Note 24 —Segment Disclosures and Related Information :

Millions of Dollars

2022 2021 2020

Revenue from Outside the Scope of ASC Topic 606

Lower 48 $ 13,919 9,050 3,966

Canada 2,717 1,457 727

Europe, Middle East and North Africa 514 993 484

Physical contracts meeting the definition of a derivative $ 17,150 11,500 5,177

Millions of Dollars

2022 2021 2020

Revenue from Outside the Scope of ASC Topic 606

Crude oil $ 495 757 395

Natural gas 15,368 10,034 4,339

Other 1,287 709 443

Physical contracts meeting the definition of a derivative $ 17,150 11,500 5,177

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Practical Expedients

Typically, our commodity sales contracts are less than 12 months in duration;

however, in certain specific cases may extend longer, which may be out to the end of field life.

We have long-term commodity sales contracts which use prevailing market prices at the time of delivery, and under these contracts, the market-based variable consideration for each performance obligation (i.e., delivery of commodity) is allocated to each wholly unsatisfied performance obligation within the contract.

Accordingly, we have applied the practical expedient allowed in ASC Topic 606 and do not disclose the aggregate amount of the transaction price allocated to performance obligations or when we expect to recognize revenues that are unsatisfied (or partially unsatisfied) as of the end of the reporting period.

Receivables and Contract Liabilities

Receivables from Contracts with Customers

At December 31, 2022, the “Accounts and notes receivable” line on our consolidated balance sheet included trade receivables of $ 5,241 million compared with $ 5,268 million at December 31, 2021, and included both contracts with customers within the scope of ASC Topic 606 and those that are outside the scope of ASC Topic 606.

We typically receive payment within 30 days or less (depending on the terms of the invoice) once delivery is made.

Revenues that are outside the scope of ASC Topic 606 relate primarily to physical gas sales contracts at market prices for which we do not elect NPNS and are therefore accounted for as a derivative under ASC Topic 815.

There is little distinction in the nature of the customer or credit quality of trade receivables associated with gas sold under contracts for which NPNS has not been elected compared with trade receivables where NPNS has been elected.

Contract Liabilities from Contracts with Customers

We have entered into certain agreements under which we license our proprietary technology, including the Optimized Cascade® process technology, to customers to maximize the efficiency of LNG plants.

These agreements typically provide for milestone payments to be made during and after the construction phases of the LNG plant.

The payments are not directly related to our performance obligations under the contract and are recorded as deferred revenue to be recognized when the customer is able to benefit from their right to use the applicable licensed technology.

During the year ended December 31, 2022, we recognized revenue of $ 57 million in the "Sales and other operating revenues" line on our consolidated income statement.

We expect to recognize the outstanding contract liabilities of $ 19 million as of December 31, 2022, as revenue during 2026.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 23—Earnings Per Share

The following table presents the calculation of net income available to common shareholders and basic and diluted EPS for the years ended December 31, 2022, 2021, and 2020.

For each of the periods with net income presented in the table below, diluted EPS calculated under the two-class method was more dilutive.

Millions of Dollars (except per share amounts)

Years Ended December 31 2022 2021 2020

Basic earnings per share

Net Income (Loss) Attributable to ConocoPhillips $ 18,680 8,079 ( 2,701 )

Dividends and undistributed earnings

allocated to participating securities 60 19 6

Net Income (Loss) available to common shareholders $ 18,620 8,060 ( 2,707 )

Average common shares outstanding (in Millions) 1,274 1,324 1,078

Net Income (Loss) Attributable to ConocoPhillips Per Share

of Common Stock $ 14.62 6.09 ( 2.51 )

Diluted earnings per share

Net Income (Loss) available to common shareholders $ 18,620 8,060 ( 2,707 )

Average common shares outstanding (in Millions) 1,274 1,324 1,078

Dilutive impact of options and unvested

non-participating RSU/PSUs 4 4 —

Average diluted shares outstanding (in Millions) 1,278 1,328 1,078

Net Income (Loss) Attributable to ConocoPhillips Per Share

of Common Stock $ 14.57 6.07 ( 2.51 )

Note 24—Segment Disclosures and Related Information

We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide basis.

We manage our operations through six operating segments, which are primarily defined by geographic region:

Europe, Middle East and North Africa;

Asia Pacific;

and Other International.

Corporate and Other represents income and costs not directly associated with an operating segment, such as most interest expense, premiums on early retirement of debt, corporate overhead and certain technology activities, including licensing revenues.

Corporate assets include all cash and cash equivalents and short-term investments.

We evaluate performance and allocate resources based on net income (loss) attributable to ConocoPhillips.

Segment accounting policies are the same as those in N ote 1 .

Intersegment sales are at prices that approximate market.

In 2021, we completed our acquisition of Concho, an independent oil and gas exploration and production company with operations across New Mexico and West Texas as well as our acquisition of Shell’s Permian assets in the Texas Delaware Basin.

The accounting close date of the Shell transaction, used for reporting purposes, was December 31, 2021.

Results of operations for Concho and assets acquired from Shell are included in our Lower 48 segment.

Certain transaction and restructuring costs associated with these acquisitions are included in our Corporate and Other segment.

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Analysis of Results by Operating Segment

Millions of Dollars

2022 2021 2020

Sales and Other Operating Revenues

Alaska $ 7,905 5,480 3,408

Intersegment eliminations — — ( 11 )

Alaska 7,905 5,480 3,397

Lower 48 52,921 29,306 9,872

Intersegment eliminations ( 18 ) ( 12 ) ( 51 )

Lower 48 52,903 29,294 9,821

Canada 6,159 4,077 1,666

Intersegment eliminations ( 2,445 ) ( 1,583 ) ( 405 )

Canada 3,714 2,494 1,261

Europe, Middle East and North Africa 11,271 5,902 1,919

Intersegment eliminations ( 1 ) — ( 2 )

Europe, Middle East and North Africa 11,270 5,902 1,917

Asia Pacific 2,606 2,579 2,363

Other International — 4 7

Corporate and Other 96 75 18

Consolidated sales and other operating revenues $ 78,494 45,828 18,784

The market for our products is large and diverse, therefore, our sales and other operating revenues are not dependent upon any single customer.

Millions of Dollars

2022 2021 2020

Depreciation, Depletion, Amortization and Impairments

Alaska $ 941 1,002 996

Lower 48 4,854 4,067 3,358

Canada 400 392 342

Europe, Middle East and North Africa 735 862 775

Asia Pacific 518 1,483 809

Other International — — —

Corporate and Other 44 76 54

Consolidated depreciation, depletion, amortization and impairments $ 7,492 7,882 6,334

Equity in Earnings of Affiliates

Alaska $ 4 5 ( 7 )

Lower 48 ( 14 ) ( 18 ) ( 11 )

Europe, Middle East and North Africa 780 502 311

Asia Pacific 1,310 343 137

Other International 1 — 2

Corporate and Other — — —

Consolidated equity in earnings of affiliates $ 2,081 832 432

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Millions of Dollars

2022 2021 2020

Income Tax Provision (Benefit)

Alaska $ 885 402 ( 256 )

Lower 48 3,088 1,390 ( 378 )

Canada 206 150 ( 185 )

Europe, Middle East and North Africa 5,445 2,543 136

Asia Pacific 480 483 294

Other International 53 ( 53 ) ( 20 )

Corporate and Other ( 609 ) ( 282 ) ( 76 )

Consolidated income tax provision (benefit) $ 9,548 4,633 ( 485 )

Net Income (Loss) Attributable to ConocoPhillips

Alaska $ 2,352 1,386 ( 719 )

Lower 48 11,015 4,932 ( 1,122 )

Canada 714 458 ( 326 )

Europe, Middle East and North Africa 2,244 1,167 448

Asia Pacific 2,736 453 962

Other International ( 51 ) ( 107 ) ( 64 )

Corporate and Other ( 330 ) ( 210 ) ( 1,880 )

Consolidated net income (loss) attributable to ConocoPhillips $ 18,680 8,079 ( 2,701 )

Investments in and Advances to Affiliates

Alaska $ 55 58 62

Lower 48 235 242 25

Europe, Middle East and North Africa 1,049 797 918

Asia Pacific 6,154 5,603 6,705

Other International — 1 —

Corporate and Other — — —

Consolidated investments in and advances to affiliates $ 7,493 6,701 7,710

Alaska $ 15,126 14,812 14,623

Lower 48 42,950 41,699 11,932

Canada 6,971 7,439 6,863

Europe, Middle East and North Africa 8,263 9,125 8,756

Asia Pacific 9,511 9,840 11,231

Other International — 1 226

Corporate and Other 11,008 7,745 8,987

Consolidated total assets $ 93,829 90,661 62,618

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Millions of Dollars

2022 2021 2020

Capital Expenditures and Investments

Alaska $ 1,091 982 1,038

Lower 48 5,630 3,129 1,881

Canada 530 203 651

Europe, Middle East and North Africa 998 534 600

Asia Pacific 1,880 390 384

Other International — 33 121

Corporate and Other 30 53 40

Consolidated capital expenditures and investments $ 10,159 5,324 4,715

Interest Income and Expense

Interest income

Alaska $ — — —

Lower 48 — — —

Europe, Middle East and North Africa 1 2 5

Asia Pacific 9 9 7

Other International — — —

Corporate and Other 185 22 88

Interest and debt expense

Corporate and Other $ 805 884 806

Sales and Other Operating Revenues by Product

Crude oil $ 41,492 23,648 9,736

Natural gas 26,941 16,904 6,427

Natural gas liquids 3,650 1,668 528

Other* 6,411 3,608 2,093

Consolidated sales and other operating revenues by product $ 78,494 45,828 18,784

*Includes LNG and bitumen.

Geographic Information

Millions of Dollars

Sales and Other Operating Revenues (1)

Long-Lived Assets (2)

2022 2021 2020 2022 2021 2020

United States $ 60,899 34,847 13,230 51,200 50,580 24,034

Australia and Timor-Leste — — 605 6,158 5,579 6,676

Canada 3,714 2,494 1,261 6,269 6,608 6,385

China 1,135 724 460 1,538 1,476 1,491

Indonesia (3)

159 879 689 — 28 464

Libya 1,582 1,102 155 714 659 670

Malaysia 1,312 975 610 1,107 1,252 1,501

Norway 3,415 2,563 1,426 4,369 4,681 5,294

United Kingdom 6,273 2,236 336 1 1 1

Other foreign countries 5 8 12 1,003 748 1,087

Worldwide consolidated $ 78,494 45,828 18,784 72,359 71,612 47,603

(1) Sales and other operating revenues are attributable to countries based on the location of the selling operation.

(2) Defined as net PP&E plus equity investments and advances to affiliated companies.

(3) Assets divested in 2022.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Oil and Gas Operations (Unaudited)

In accordance with FASB ASC Topic 932, “Extractive Activities—Oil and Gas,” and regulations of the SEC, we are making certain supplemental disclosures about our oil and gas exploration and production operations.

These disclosures include information about our consolidated oil and gas activities and our proportionate share of our equity affiliates’ oil and gas activities in our operating segments.

As a result, amounts reported as equity affiliates in Oil and Gas Operations may differ from those shown in the individual segment disclosures reported elsewhere in this report.

Our disclosures by geographic area include the U.S., Canada, Europe, Asia Pacific/Middle East (inclusive of equity affiliates) and Africa.

As required by current authoritative guidelines, the estimated future date when an asset will be permanently shut down for economic reasons is based on historical 12-month first-of-month average prices and current costs.

This estimated date when production will end affects the amount of estimated reserves.

Therefore, as prices and cost levels change from year to year, the estimate of proved reserves also changes.

Generally, our proved reserves decrease as prices decline and increase as prices rise.

Our proved reserves include estimated quantities related to PSCs, which are reported under the “economic interest” method, as well as variable-royalty regimes, and are subject to fluctuations in commodity prices, recoverable operating expenses and capital costs.

If costs remain stable, reserve quantities attributable to recovery of costs will change inversely to changes in commodity prices.

For example, if prices increase, then our applicable reserve quantities would decline.

At December 31, 2022, approximately 3 percent of our total proved reserves were under PSCs, located in our Asia Pacific/Middle East geographic reporting area, and 4 percent of our total proved reserves were under a variable-royalty regime, located in our Canada geographic reporting area.

Reserves Governance

The recording and reporting of proved reserves are governed by criteria established by regulations of the SEC and FASB.

Proved reserves are those quantities of oil and gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible—from a given date forward, from known reservoirs, and under existing economic conditions, operating methods, and government regulations—prior to the time at which contracts providing the right to operate expire, unless evidence indicates renewal is reasonably certain, regardless of whether deterministic or probabilistic methods are used for the estimation.

The project to extract the hydrocarbons must have commenced or the operator must be reasonably certain it will commence the project within a reasonable time.

Proved reserves are further classified as either developed or undeveloped.

Proved developed reserves are proved reserves that can be expected to be recovered through existing wells with existing equipment and operating methods, or in which the cost of the required equipment is relatively minor compared with the cost of a new well, and through installed extraction equipment and infrastructure operational at the time of the reserves estimate if the extraction is by means not involving a well.

Proved undeveloped reserves are proved reserves expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion.

Reserves on undrilled acreage are limited to those directly offsetting development spacing areas that are reasonably certain of production when drilled, unless evidence provided by reliable technologies exists that establishes reasonable certainty of economic producibility at greater distances.

As defined by SEC regulations, reliable technologies may be used in reserve estimation when they have been demonstrated in the field to provide reasonably certain results with consistency and repeatability in the formation being evaluated or in an analogous formation.

The technologies and data used in the estimation of our proved reserves include, but are not limited to, performance-based methods, volumetric-based methods, geologic maps, seismic interpretation, well logs, well test data, core data, analogy and statistical analysis.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

We have a company-wide, comprehensive, SEC-compliant internal policy that governs the determination and reporting of proved reserves.

This policy is applied by the geoscientists and reservoir engineers in our business units around the world.

As part of our internal control process, each business unit’s reserves processes and controls are reviewed annually by an internal team which is headed by the company’s Manager of Reserves Compliance and Reporting.

This team, composed of internal reservoir engineers, geoscientists, finance personnel and a senior representative from DeGolyer and MacNaughton (D&M), a third-party petroleum engineering consulting firm, reviews the business units’ reserves for adherence to SEC guidelines and company policy through on-site visits, teleconferences and review of documentation.

In addition to providing independent reviews, this internal team also ensures reserves are calculated using consistent and appropriate standards and procedures.

This team is independent of business unit line management and is responsible for reporting its findings to senior management.

The team is responsible for communicating our reserves policy and procedures and is available for internal peer reviews and consultation on major projects or technical issues throughout the year.

All of our proved reserves held by consolidated companies and our share of equity affiliates have been estimated by ConocoPhillips.

During 2022, our processes and controls used to assess over 90 percent of proved reserves as of December 31, 2022, were reviewed by D&M.

The purpose of their review was to assess whether the adequacy and effectiveness of our internal processes and controls used to determine estimates of proved reserves are in accordance with SEC regulations.

In such review, ConocoPhillips’ technical staff presented D&M with an overview of the reserves data, as well as the methods and assumptions used in estimating reserves.

The data presented included pertinent seismic information, geologic maps, well logs, production tests, material balance calculations, reservoir simulation models, well performance data, operating procedures and relevant economic criteria.

Management’s intent in retaining D&M to review its processes and controls was to provide objective third-party input on these processes and controls.

D&M’s opinion was the general processes and controls employed by ConocoPhillips in estimating its December 31, 2022, proved reserves for the properties reviewed are in accordance with the SEC reserves definitions.

D&M’s report is included as Exhibit 99 of this Annual Report on Form 10-K.

The technical person primarily responsible for overseeing the processes and internal controls used in the preparation of the company’s reserves estimates is the Manager of Reserves Compliance and Reporting.

This individual holds a master’s degree in petroleum engineering.

He is a member of the Society of Petroleum Engineers with over 30 years of oil and gas industry experience and has held positions of increasing responsibility in reservoir engineering, subsurface and asset management in the U.S.

and several international field locations.

Engineering estimates of the quantities of proved reserves are inherently imprecise.

See the “Critical Accounting Estimates” section of Management’s Discussion and Analysis of Financial Condition and Results of Operations for additional discussion of the sensitivities surrounding these estimates.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Proved Reserves

December 31 Crude Oil

Millions of Barrels

Canada Europe Asia Pacific/

Middle East Africa Total

Consolidated Equity

Affiliates* Total

Developed and Undeveloped

End of 2019 1,231 797 2,028 5 198 134 197 2,562 73 2,635

Revisions (297) (126) (423) (2) 4 (4) (3) (428) — (428)

Improved recovery — — — — — 3 — 3 — 3

Purchases — 5 5 3 — — — 8 — 8

Extensions and discoveries 10 108 118 3 — — — 121 — 121

Production (65) (77) (142) (2) (28) (25) (3) (200) (5) (205)

Sales — (14) (14) (1) — — — (15) — (15)

End of 2020 879 693 1,572 6 174 108 191 2,051 68 2,119

Revisions 209 (52) 157 2 14 37 6 216 — 216

Improved recovery 1 — 1 — — — — 1 — 1

Purchases — 691 691 — — — — 691 — 691

Extensions and discoveries 10 289 299 5 2 1 — 307 — 307

Production (64) (160) (224) (3) (29) (24) (13) (293) (5) (298)

Sales — (9) (9) — — — — (9) — (9)

End of 2021 1,035 1,452 2,487 10 161 122 184 2,964 63 3,027

Revisions (31) 24 (7) — 31 19 (3) 40 — 40

Improved recovery — — — — — 3 — 3 — 3

Purchases — 6 6 — — — 42 48 — 48

Extensions and discoveries 15 250 265 — 8 — — 273 35 308

Production (64) (193) (257) (2) (25) (22) (13) (319) (5) (324)

Sales — (31) (31) — — (3) — (34) — (34)

End of 2022 955 1,508 2,463 8 175 119 210 2,975 93 3,068

December 31 Crude Oil

Millions of Barrels

Canada Europe Asia Pacific/

Middle East Africa Total

Consolidated Equity

Affiliates* Total

Consolidated operations

End of 2019 1,048 334 1,382 3 149 94 181 1,809 73 1,882

End of 2020 765 263 1,028 6 129 77 175 1,415 68 1,483

End of 2021 912 916 1,828 4 122 98 171 2,223 63 2,286

End of 2022 867 828 1,695 5 124 102 191 2,117 58 2,175

Consolidated operations

End of 2019 183 463 646 2 49 40 16 753 — 753

End of 2020 114 430 544 — 45 31 16 636 — 636

End of 2021 123 536 659 6 39 24 13 741 — 741

End of 2022 88 680 768 3 51 17 19 858 35 893

*All Equity Affiliate reserves are located in our Asia Pacific/Middle East Region.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Notable changes in proved crude oil reserves in the three years ended December 31, 2022, included:

• Revisions :

In 2022, upward revisions in Lower 48 were due to additional development drilling in the unconventional plays of 81 million barrels and higher prices of 33 million barrels, partially offset by increasing operating costs of 72 million barrels and technical revisions of 18 million barrels.

Upward revisions in Europe were primarily due to technical revisions of 23 million barrels and 8 million barrels due to higher prices.

Upward revisions of 19 million barrels in our consolidated operations in Asia Pacific/Middle East were primarily due to technical revisions.

In 2021, Alaska upward revisions were primarily driven by higher prices.

Downward revisions in Lower 48 were due to development timing for specific well locations from unconventional plays of 203 million barrels and technical revisions of 35 million barrels, partially offset by upward revisions due to higher prices of 115 million barrels and additional infill drilling in the unconventional plays of 71 million barrels.

Upward revisions in Europe were primarily due to higher prices.

In Asia Pacific/Middle East, increases were due to higher prices of 21 million barrels and technical revisions of 16 million barrels.

In 2020, Alaska downward revisions were primarily driven by lower prices of 243 million barrels and development plan changes of 54 million barrels.

Downward revisions in Lower 48 were due to lower prices of 89 million barrels and development timing for specific well locations from unconventional plays of 82 million barrels, partially offset by upward technical revisions and additional infill drilling in the unconventional plays of 45 million barrels.

• Purchases :

In 2022, crude oil reserve purchases were primarily in Africa, as a result of the acquisition of additional interest in the Libya Waha Concession.

In 2021, Lower 48 purchases were due to the Concho and Shell Permian acquisitions.

• Extensions and discoveries :

In 2022, extensions and discoveries in Lower 48 were primarily within unconventional plays in the Permian Basin.

Extensions and discoveries in our equity affiliates were in the Middle East.

In 2021, extensions and discoveries in Lower 48 were due to planned development to add specific well locations from the unconventional plays which more than offset the decreases resulting from development plan timing in the revisions category.

In 2020, extensions and discoveries in Lower 48 were due to planned development to add specific well locations from the unconventional plays which more than offset the decreases resulting from development plan timing in the revisions category.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

December 31 Natural Gas Liquids

Millions of Barrels

Canada Europe Asia Pacific/

Middle East Total Consolidated Equity Affiliates* Total

Developed and Undeveloped

Consolidated operations

End of 2019 100 245 345 2 13 1 361 39 400

Revisions — (26) (26) — 1 (1) (26) — (26)

Improved recovery — — — — — — — — —

Purchases — 2 2 2 — — 4 — 4

Extensions and discoveries — 41 41 1 — — 42 — 42

Production (6) (27) (33) (1) (2) — (36) (3) (39)

Sales — (5) (5) — — — (5) — (5)

End of 2020 94 230 324 4 12 — 340 36 376

Revisions (6) 213 207 — 1 — 208 — 208

Improved recovery — — — — — — — — —

Purchases — 72 72 — — — 72 — 72

Extensions and discoveries — 82 82 2 — — 84 — 84

Production (6) (50) (56) (1) (2) — (59) (3) (62)

Sales — (1) (1) — — — (1) — (1)

End of 2021 82 546 628 5 11 — 644 33 677

Revisions 1 208 209 1 3 — 213 — 213

Improved recovery — — — — — — — — —

Purchases — 3 3 — — — 3 — 3

Extensions and discoveries — 80 80 — 1 — 81 20 101

Production (5) (81) (86) (1) (2) — (89) (3) (92)

Sales — (7) (7) — — — (7) — (7)

End of 2022 78 749 827 5 13 — 845 50 895

December 31 Natural Gas Liquids

Millions of Barrels

Canada Europe Asia Pacific/

Middle East Total Consolidated Equity Affiliates* Total

Consolidated operations

End of 2019 100 99 199 1 10 1 211 39 250

End of 2020 94 83 177 4 9 — 190 36 226

End of 2021 82 334 416 3 9 — 428 33 461

End of 2022 78 409 487 3 10 — 500 31 531

Consolidated operations

End of 2019 — 146 146 1 3 — 150 — 150

End of 2020 — 147 147 — 3 — 150 — 150

End of 2021 — 212 212 2 2 — 216 — 216

End of 2022 — 340 340 2 3 — 345 19 364

*All Equity Affiliate reserves are located in our Asia Pacific/Middle East Region.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Notable changes in proved NGL reserves in the three years ended December 31, 2022, included:

• Revisions :

In 2022, upward revisions in Lower 48 were due to additional development drilling in the unconventional plays of 88 million barrels, technical revisions of 75 million barrels, continued conversion of acquired Concho Permian two-stream contracts to a three-stream (crude oil, natural gas and natural gas liquids) basis adding 70 million barrels, and higher prices of 13 million barrels.

This was partially offset by increasing operating costs of 38 million barrels.

In 2021, upward revisions in Lower 48 were due to conversion of acquired Concho Permian two-stream contracts to a three-stream (crude oil, natural gas and natural gas liquids) basis, adding 182 million barrels, additional infill drilling in the unconventional plays of 44 million barrels, technical revisions of 21 million barrels and higher prices of 28 million barrels, partially offset by downward revisions related to development timing for specific well locations from unconventional plays of 62 million barrels.

In 2020, downward revisions in Lower 48 were due to lower prices of 33 million barrels and development timing for specific well locations from unconventional plays of 20 million barrels, partially offset by upward technical revisions and additional infill drilling in the unconventional plays of 27 million barrels.

• Purchases :

In 2021, Lower 48 purchases were due to the Shell Permian acquisition.

• Extensions and discoveries :

In 2022, extensions and discoveries in Lower 48 were primarily within unconventional plays in the Permian Basin.

Extensions and discoveries in our equity affiliates were in the Middle East.

In 2020, extensions and discoveries in Lower 48 were due to planned development to add specific well locations from the unconventional plays, which more than offset the decreases in the revisions category.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

December 31 Natural Gas

Billions of Cubic Feet

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Developed and Undeveloped

Consolidated operations

End of 2019 2,688 2,431 5,119 43 896 977 224 7,259 4,421 11,680

Revisions (607) (439) (1,046) (15) 39 103 2 (917) (382) (1,299)

Improved recovery — — — — — — — — — —

Purchases — 74 74 29 — — — 103 2 105

Extensions and discoveries — 304 304 33 2 — — 339 78 417

Production (85) (231) (316) (16) (112) (171) (2) (617) (395) (1,012)

Sales — (39) (39) — — (58) — (97) — (97)

End of 2020 1,996 2,100 4,096 74 825 851 224 6,070 3,724 9,794

Revisions 715 41 756 15 54 60 — 885 247 1,132

Improved recovery — — — — — — — — — —

Purchases — 2,438 2,438 — — — — 2,438 — 2,438

Extensions and discoveries — 822 822 46 2 — — 870 116 986

Production (86) (473) (559) (30) (113) (147) (7) (856) (390) (1,246)

Sales — (270) (270) — — — — (270) — (270)

End of 2021 2,625 4,658 7,283 105 768 764 217 9,137 3,697 12,834

Revisions (35) 361 326 8 108 (2) (14) 426 898 1,324

Improved recovery — — — — — — — — — —

Purchases — 23 23 — — — 48 71 479 550

Extensions and discoveries — 505 505 4 103 — — 612 1,118 1,730

Production (88) (543) (631) (23) (117) (51) (10) (832) (439) (1,271)

Sales — (262) (262) — — (385) — (647) — (647)

End of 2022 2,502 4,742 7,244 94 862 326 241 8,767 5,753 14,520

December 31 Natural Gas

Billions of Cubic Feet

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Consolidated operations

End of 2019 2,601 1,398 3,999 30 697 843 224 5,793 3,898 9,691

End of 2020 1,961 1,051 3,012 74 598 806 224 4,714 3,293 8,007

End of 2021 2,579 3,100 5,679 52 679 688 217 7,315 3,204 10,519

End of 2022 2,474 2,628 5,102 64 641 322 241 6,370 3,974 10,344

Consolidated operations

End of 2019 87 1,033 1,120 13 199 134 — 1,466 523 1,989

End of 2020 35 1,049 1,084 — 227 45 — 1,356 431 1,787

End of 2021 46 1,558 1,604 53 89 76 — 1,822 493 2,315

End of 2022 28 2,114 2,142 30 221 4 — 2,397 1,779 4,176

*All Equity Affiliate reserves are located in our Asia Pacific/Middle East Region.

Natural gas production in the reserves table may differ from gas production (delivered for sale) in our statistics disclosure, primarily because the quantities above include gas consumed in production operations.

Quantities consumed in production operations are not significant in the periods presented.

The value of net production consumed in operations is not reflected in net revenues and production expenses, nor do the volumes impact the respective per unit metrics.

Reserve volumes include natural gas to be consumed in operations of 2,416 BCF, 2,748 BCF and 2,286 BCF, as of December 31, 2022, 2021 and 2020, respectively.

These volumes are not included in the calculation of our Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserve Quantities.

Natural gas reserves are computed at 14.65 pounds per square inch absolute and 60 degrees Fahrenheit.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Notable changes in proved natural gas reserves in the three years ended December 31, 2022, included:

• Revisions :

In 2022, upward revisions in Lower 48 were due to additional development drilling in the unconventional plays of 544 BCF, higher prices of 109 BCF, and technical revisions of 41 BCF.

These were partially offset by decreases of 233 BCF due to increasing operating costs, and 100 BCF due to the continued conversion of acquired Concho Permian two-stream contracts to a three-stream (crude oil, natural gas and natural gas liquids) basis.

Upward revisions in Canada were driven by higher prices of 26 BCF, partially offset by technical revisions of 18 BCF.

In Europe, technical revisions contributed 96 BCF, and higher prices 12 BCF of upward revisions.

Downward revisions in Africa were primarily due to technical revisions.

In our equity affiliates in Asia Pacific/Middle East, upward revisions were due to higher prices of 423 BCF, changing dynamics and improved prices in the regional LNG spot market of 331 BCF, and technical revisions of 204 BCF, partially offset by downward revisions due to increasing operating costs of 60 BCF.

In 2021, upward revisions in Alaska were due to higher prices of 587 BCF and technical revisions of 128 BCF.

In Lower 48, upward revisions of 614 BCF were due to higher prices, additional infill drilling in the unconventional plays of 277 BCF and technical revisions of 60 BCF, partially offset by downward revisions due to development timing for specific well locations from unconventional plays of 498 BCF and conversion of previously acquired Permian two-stream contracted volumes to a three-stream (crude oil, natural gas and natural gas liquids) basis of 412 BCF.

Upward revisions in Canada were due to higher prices of 29 BCF, partially offset by downward revisions due to technical revisions of 14 BCF.

In Europe, upward revisions were primarily due to higher prices.

Upward revisions in our consolidated operations in Asia Pacific/Middle East were due to technical revisions of 76 BCF, partially offset by price revisions of 16 BCF.

In our equity affiliates in Asia Pacific/Middle East, upward revisions were due to higher prices of 124 BCF and technical and cost revisions of 123 BCF.

In 2020, downward revisions in Alaska were primarily due to lower prices.

In Lower 48, downward revisions of 372 BCF were due to lower prices and 154 BCF were due to development timing for specific well locations from unconventional plays, partially offset by technical revisions of 87 BCF.

Downward revisions in our equity affiliates in Asia Pacific/Middle East were due to lower prices of 426 BCF, partially offset by performance revisions of 44 BCF.

Upward revisions in our consolidated operations in Asia Pacific/Middle East were due to technical revisions of 88 BCF and price revisions of 15 BCF.

• Purchases :

In 2022, purchases in Africa were a result of the acquisition of additional interest in the Libya Waha Concession.

In our equity affiliates, purchases were due to the acquisition of additional affiliate interest in Asia Pacific.

In 2021, Lower 48 purchases were due to the Concho and Shell Permian acquisitions.

In 2020, Canada purchases were due to the acquisition of additional Montney acreage.

• Extensions and discoveries :

In 2022, extensions and discoveries in Lower 48 were primarily within unconventional plays in the Permian Basin.

In Europe, extensions and discoveries were due to additional planned development.

Extensions and discoveries in our equity affiliates were primarily in the Middle East.

Extensions and discoveries in Canada were primarily driven by ongoing drilling successes in Montney.

In 2022, Lower 48 sales represent the disposition of noncore assets.

Sales in our consolidated operations in Asia Pacific/Middle East represent the disposition of our Indonesia assets.

In 2021, Lower 48 sales represent the disposition of noncore assets.

In 2020, Asia Pacific/Middle East sales represent the disposition of the Australia-West assets.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

December 31 Bitumen

Millions of Barrels

Canada Total Consolidated Equity Affiliates* Total

Developed and Undeveloped

Consolidated operations

End of 2019 282 282 — 282

Revisions (15) (15) — (15)

Improved recovery — — — —

Purchases — — — —

Extensions and discoveries 85 85 — 85

Production (20) (20) — (20)

Sales — — — —

End of 2020 332 332 — 332

Revisions (50) (50) — (50)

Improved recovery — — — —

Purchases — — — —

Extensions and discoveries — — — —

Production (25) (25) — (25)

Sales — — — —

End of 2021 257 257 — 257

Revisions (17) (17) — (17)

Improved recovery — — — —

Purchases — — — —

Extensions and discoveries — — — —

Production (24) (24) — (24)

Sales — — — —

End of 2022 216 216 — 216

December 31 Bitumen

Millions of Barrels

Canada Total Consolidated Equity Affiliates* Total

Consolidated operations

End of 2019 187 187 — 187

End of 2020 117 117 — 117

End of 2021 150 150 — 150

End of 2022 127 127 — 127

Consolidated operations

End of 2019 95 95 — 95

End of 2020 215 215 — 215

End of 2021 107 107 — 107

End of 2022 89 89 — 89

*All Equity Affiliate reserves are located in our Asia Pacific/Middle East Region.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Notable changes in proved bitumen reserves in the three years ended December 31, 2022, included:

• Revisions :

In 2022, the impact of variable royalties on price resulted in downward revisions of 30 million barrels, partially offset by upward revisions primarily due to changes in development timing for specific pad locations from the Surmont development program.

In 2021, downward revisions of 64 million barrels were driven by changes in carbon tax costs and 39 million barrels due to changes in development timing for specific pad locations from the Surmont development program, partially offset by upward revisions from price of 53 million barrels.

In 2020, downward revisions in Canada were due to changes in development timing for specific pad locations from the Surmont development program of 12 million barrels with the remaining revisions primarily related to lower prices.

• Extensions and discoveries :

In 2021, extensions and discoveries in Canada were primarily due to planned development to add specific pad locations from the Surmont development program, which more than offset the decrease in the revisions category.

In 2020, extensions and discoveries in Canada were due to planned development to add specific pad locations from the Surmont development program, which offset the decrease in the revisions category of 31 million barrels.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

December 31 Total Proved Reserves

Millions of Barrels of Oil Equivalent

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Developed and Undeveloped

Consolidated operations

End of 2019 1,779 1,447 3,226 296 360 298 234 4,414 848 5,262

Revisions (398) (226) (624) (20) 12 13 (3) (622) (63) (685)

Improved recovery — — — — — 3 — 3 — 3

Purchases — 19 19 10 — — — 29 — 29

Extensions and discoveries 10 200 210 95 — — — 305 13 318

Production (85) (142) (227) (25) (49) (55) (3) (359) (73) (432)

Sales — (25) (25) (1) — (10) — (36) — (36)

End of 2020 1,306 1,273 2,579 355 323 249 228 3,734 725 4,459

Revisions 322 168 490 (45) 23 47 6 521 42 563

Improved recovery 1 — 1 — — — — 1 — 1

Purchases — 1,169 1,169 — — — — 1,169 — 1,169

Extensions and discoveries 10 508 518 15 3 1 — 537 19 556

Production (84) (289) (373) (35) (50) (48) (14) (520) (73) (593)

Sales — (54) (54) — — — — (54) — (54)

End of 2021 1,555 2,775 4,330 290 299 249 220 5,388 713 6,101

Revisions (35) 292 257 (15) 52 19 (5) 308 149 457

Improved recovery — — — — — 3 — 3 — 3

Purchases — 13 13 — — — 50 63 80 143

Extensions and discoveries 15 414 429 1 26 — — 456 241 697

Production (85) (364) (449) (31) (46) (31) (15) (572) (81) (653)

Sales — (82) (82) — — (67) — (149) — (149)

End of 2022 1,450 3,048 4,498 245 331 173 250 5,497 1,102 6,599

December 31 Total Proved Reserves

Millions of Barrels of Oil Equivalent

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Consolidated operations

End of 2019 1,582 666 2,248 197 275 236 218 3,174 761 3,935

End of 2020 1,186 521 1,707 140 238 211 212 2,508 653 3,161

End of 2021 1,424 1,767 3,191 166 244 212 207 4,020 631 4,651

End of 2022 1,357 1,676 3,033 147 240 155 231 3,806 751 4,557

Consolidated operations

End of 2019 197 781 978 99 85 62 16 1,240 87 1,327

End of 2020 120 752 872 215 85 38 16 1,226 72 1,298

End of 2021 131 1,008 1,139 124 55 37 13 1,368 82 1,450

End of 2022 93 1,372 1,465 98 91 18 19 1,691 351 2,042

*All Equity Affiliate reserves are located in our Asia Pacific/Middle East Region.

Natural gas reserves are converted to barrels of oil equivalent (BOE) based on a 6:1 ratio:

six MCF of natural gas converts to one BOE.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Proved Undeveloped Reserves

The following table shows changes in total proved undeveloped reserves for 2022:

Proved Undeveloped Reserves

Millions of Barrels of Oil Equivalent

End of 2021 1,450

Revisions 344

Improved recovery 3

Extensions and discoveries 627

Transfers to Proved Developed (391)

End of 2022 2,042

Revisions were predominantly driven by changes in development plans in Lower 48.

Extensions and discoveries were largely driven by the addition of 344 MMBOE in Lower 48 for the continued development of unconventional plays.

Equity affiliates, primarily in the Middle East, contributed 241 MMBOE.

The remaining extensions and discoveries were driven by the continued development planned in the other geographic regions.

Transfers to proved developed reserves were driven by the ongoing development of our assets.

Approximately 82 percent of the transfers were from the development of our Lower 48 unconventional plays.

The remainder of transfers were from development across the other geographic regions.

At December 31, 2022, our PUDs represented 31 percent of total proved reserves, compared with 24 percent at December 31, 2021.

Costs incurred for the year ended December 31, 2022, relating to the development of PUDs were $5.7 billion.

A portion of our costs incurred each year relates to development projects where the PUDs will be converted to proved developed reserves in future years.

At the end of 2022, approximately 93 percent of total PUDs were under development or scheduled for development within five years of initial disclosure, including all of our Lower 48 PUDs.

The remaining PUDs are in major development areas which are currently producing and predominantly within our Canada and Asia Pacific/Middle East geographic areas.

Results of Operations

The company’s results of operations from oil and gas activities for the years 2022, 2021 and 2020 are shown in the following tables.

Non-oil and gas activities, such as pipeline and marine operations, LNG operations, crude oil and gas marketing activities, and the profit element of transportation operations in which we have an ownership interest are excluded.

Additional information about selected line items within the results of operations tables is shown below:

• Sales include sales to unaffiliated entities attributable primarily to the company’s net working interests and royalty interests.

Sales are net of fees to transport our produced hydrocarbons beyond the production function to a final delivery point using transportation operations which are not consolidated.

• Transportation costs reflect fees to transport our produced hydrocarbons beyond the production function to a final delivery point using transportation operations which are consolidated.

• Other revenues include gains and losses from asset sales, certain amounts resulting from the purchase and sale of hydrocarbons, and other miscellaneous income.

• Production costs include costs incurred to operate and maintain wells, related equipment and facilities used in the production of petroleum liquids and natural gas.

• Taxes other than income taxes include production, property and other non-income taxes.

• Depreciation of support equipment is reclassified as applicable.

• Other related expenses include inventory fluctuations, foreign currency transaction gains and losses and other miscellaneous expenses.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Results of Operations

December 31,2022 Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Other

Consolidated operations

Sales $ 7,210 24,309 31,519 1,622 6,594 2,602 1,339 — 43,676

Transfers 6 — 6 — — — — — 6

Transportation costs (647) — (647) — — — — — (647)

Other revenues (1) 115 114 338 1 536 184 10 1,183

Total revenues 6,568 24,424 30,992 1,960 6,595 3,138 1,523 10 44,218

Production costs excluding taxes 1,160 3,600 4,760 581 511 342 55 — 6,249

Taxes other than income taxes 1,265 1,687 2,952 21 36 243 2 — 3,254

Exploration expenses 34 189 223 149 122 49 19 2 564

Depreciation, depletion and amortization 833 4,843 5,676 354 693 517 36 — 7,276

Impairments 2 (11) (9) (2) (1) — — — (12)

Other related expenses (19) 4 (15) (41) (178) 40 5 6 (183)

Accretion 78 55 133 11 62 25 — — 231

3,215 14,057 17,272 887 5,350 1,922 1,406 2 26,839

Income tax provision (benefit) 866 3,113 3,979 198 4,057 512 1,301 53 10,100

Results of operations $ 2,349 10,944 13,293 689 1,293 1,410 105 (51) 16,739

Equity affiliates

Sales $ — — — — — 1,000 — — 1,000

Transfers — — — — — 4,272 — — 4,272

Transportation costs — — — — — — — — —

Other revenues — — — — — 41 — — 41

Total revenues — — — — — 5,313 — — 5,313

Production costs excluding taxes — — — — — 491 — — 491

Taxes other than income taxes — — — — — 1,536 — — 1,536

Exploration expenses — — — — — — — — —

Depreciation, depletion and amortization — — — — — 530 530

Impairments — — — — — — — — —

Other related expenses — — — — — (2) — — (2)

Accretion — — — — — 27 — — 27

— — — — — 2,731 — — 2,731

Income tax provision (benefit) — — — — — 836 — — 836

Results of operations $ — — — — — 1,895 — — 1,895

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

December 31,2021 Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Other

Consolidated operations

Sales $ 4,832 14,093 18,925 1,219 3,568 2,525 917 — 27,154

Transfers 4 — 4 — — — — — 4

Transportation costs (626) — (626) — — — — — (626)

Other revenues 14 135 149 323 (5) 237 141 (161) 684

Total revenues 4,224 14,228 18,452 1,542 3,563 2,762 1,058 (161) 27,216

Production costs excluding taxes 1,073 2,414 3,487 518 487 466 43 — 5,001

Taxes other than income taxes 442 937 1,379 23 36 91 1 1 1,531

Exploration expenses 80 98 178 39 21 51 2 15 306

Depreciation, depletion and amortization 864 4,053 4,917 383 844 787 35 — 6,966

Impairments 5 (8) (3) 6 (24) 7 — — (14)

Other related expenses (31) 12 (19) (22) (42) 4 4 12 (63)

Accretion 71 47 118 10 70 26 — — 224

1,720 6,675 8,395 585 2,171 1,330 973 (189) 13,265

Income tax provision (benefit) 378 1,467 1,845 145 1,673 494 870 (53) 4,974

Results of operations $ 1,342 5,208 6,550 440 498 836 103 (136) 8,291

Equity affiliates

Sales $ — — — — — 745 — — 745

Transfers — — — — — 1,797 — — 1,797

Transportation costs — — — — — — — — —

Other revenues — — — — — 5 — — 5

Total revenues — — — — — 2,547 — — 2,547

Production costs excluding taxes — — — — — 329 — — 329

Taxes other than income taxes — — — — — 824 — — 824

Exploration expenses — — — — — 268 — — 268

Depreciation, depletion and amortization — — — — — 593 593

Impairments — — — — — 718 — — 718

Other related expenses — — — — — 3 — — 3

Accretion — — — — — 17 — — 17

— — — — — (205) — — (205)

Income tax provision (benefit) — — — — — (42) — — (42)

Results of operations $ — — — — — (163) — — (163)

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

December 31,2020 Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Other

Consolidated operations

Sales $ 2,944 3,421 6,365 230 1,560 1,717 129 — 10,001

Transfers 4 — 4 — — 191 — — 195

Transportation costs (587) — (587) — — (19) — — (606)

Other revenues (1) (20) (21) 40 (21) 576 11 10 595

Total revenues 2,360 3,401 5,761 270 1,539 2,465 140 10 10,185

Production costs excluding taxes 1,058 1,399 2,457 366 417 478 21 2 3,741

Taxes other than income taxes 296 263 559 16 30 42 3 1 651

Exploration expenses 1,099 73 1,172 40 52 71 13 108 1,456

Depreciation, depletion and amortization 840 2,544 3,384 335 755 808 8 — 5,290

Impairments — 804 804 3 5 — — — 812

Other related expenses 46 5 51 5 (58) (25) (29) 2 (54)

Accretion 72 46 118 8 73 33 — — 232

(1,051) (1,733) (2,784) (503) 265 1,058 124 (103) (1,943)

Income tax provision (benefit) (271) (430) (701) (191) 116 277 88 (20) (431)

Results of operations $ (780) (1,303) (2,083) (312) 149 781 36 (83) (1,512)

Equity affiliates

Sales $ — — — — — 483 — — 483

Transfers — — — — — 1,205 — — 1,205

Transportation costs — — — — — — — — —

Other revenues — — — — — 8 — — 8

Total revenues — — — — — 1,696 — — 1,696

Production costs excluding taxes — — — — — 289 — — 289

Taxes other than income taxes — — — — — 502 — — 502

Exploration expenses — — — — — 20 — — 20

Depreciation, depletion and amortization — — — — — 569 569

Impairments — — — — — — — — —

Other related expenses — — — — — (2) — — (2)

Accretion — — — — — 15 — — 15

— — — — — 303 — — 303

Income tax provision (benefit) — — — — — 39 — — 39

Results of operations $ — — — — — 264 — — 264

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Net Production 2022 2021 2020

Thousands of Barrels Daily

Consolidated operations

Alaska 177 178 181

Lower 48 534 447 213

United States 711 625 394

Europe 71 81 78

Asia Pacific 61 65 69

Africa 36 37 8

Total consolidated operations 885 816 555

Equity affiliates—Asia Pacific/Middle East 13 13 13

Total company 898 829 568

Delaware Basin Area (Lower 48)* 258 162 28

Greater Prudhoe Area (Alaska)* 67 67 68

Natural Gas Liquids

Consolidated operations

Alaska 17 16 16

Lower 48 221 110 74

United States 238 126 90

Asia Pacific — — 1

Total consolidated operations 244 134 97

Equity affiliates—Asia Pacific/Middle East 8 8 8

Total company 252 142 105

Delaware Basin Area (Lower 48)* 114 27 11

Greater Prudhoe Area (Alaska)* 17 16 15

Consolidated operations—Canada 66 69 55

Total company 66 69 55

Natural Gas Millions of Cubic Feet Daily

Consolidated operations

Alaska 34 16 10

Lower 48 1,402 1,340 585

United States 1,436 1,356 595

Canada 61 80 40

Europe 306 298 270

Asia Pacific 114 360 429

Africa 22 15 5

Total consolidated operations 1,939 2,109 1,339

Equity affiliates—Asia Pacific/Middle East 1,191 1,053 1,055

Total company 3,130 3,162 2,394

Delaware Basin Area (Lower 48)* 752 584 99

Greater Prudhoe Area (Alaska)* 32 12 4

*At year-end 2022 and 2021, the Delaware Basin Area in Lower 48 contained more than 15 percent of our total proved reserves.

At year-end 2021 and 2020, the Greater Prudhoe Area in Alaska contained more than 15 percent of our total proved reserves.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Average Sales Prices 2022 2021 2020

Crude Oil Per Barrel

Consolidated operations

Alaska* $ 92.58 60.81 33.72

Lower 48 94.46 66.12 35.17

United States 93.96 64.53 34.48

Canada 79.94 56.38 23.57

Europe 99.88 68.94 42.80

Asia Pacific 105.52 70.36 42.84

Africa 97.85 69.06 48.64

Total international 100.75 68.85 42.39

Total consolidated operations 95.27 65.53 36.69

Equity affiliates—Asia Pacific/Middle East 97.31 69.45 39.02

Total operations 95.30 65.59 36.75

Natural Gas Liquids Per Barrel

Consolidated operations

Lower 48 $ 35.36 30.63 12.13

United States 35.36 30.63 12.13

Canada 37.70 31.18 5.41

Europe 54.52 43.97 23.27

Asia Pacific — — 33.21

Total international 46.16 37.50 20.25

Total consolidated operations 35.67 31.04 12.90

Equity affiliates—Asia Pacific/Middle East 61.22 54.16 32.69

Total operations 36.50 32.45 14.61

Bitumen Per Barrel

Consolidated operations—Canada $ 55.56 37.52 8.02 **

Natural Gas Per Thousand Cubic Feet

Consolidated operations

Alaska $ 3.64 2.81 2.91

Lower 48 5.92 4.38 1.65

United States 5.92 4.38 1.66

Canada 3.62 2.54 1.21

Europe 35.33 13.75 3.23

Asia Pacific* 5.84 6.56 5.27

Africa 6.59 3.73 3.71

Total international 23.54 8.91 4.31

Total consolidated operations 10.56 6.00 3.13

Equity affiliates—Asia Pacific/Middle East 9.39 5.31 3.71

Total operations 10.60 5.77 3.38

*Average sales prices for Alaska crude oil and Asia Pacific natural gas above reflect a reduction for transportation costs in which we have an ownership interest that are incurred subsequent to the terminal point of the production function.

Accordingly, the average sales prices differ from those discussed in Item 7 of Management's Discussion and Analysis of Financial Condition and Results of Operations.

**Average sales prices include unutilized transportation costs.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

2022 2021 2020

Average Production Costs Per Barrel of Oil Equivalent*

Consolidated operations

Alaska $ 15.89 14.92 14.60

Lower 48 9.97 8.48 9.93

United States 10.97 9.78 11.51

Canada 18.73 15.10 14.29

Europe 11.20 9.88 8.97

Asia Pacific 11.71 10.21 9.26

Africa 3.77 2.95 6.38

Total international 12.36 10.53 10.11

Total consolidated operations 11.27 9.99 10.99

Equity affiliates—Asia Pacific/Middle East 6.14 4.60 4.01

Average Production Costs Per Barrel—Bitumen

Consolidated operations—Canada $ 17.62 13.41 12.45

Taxes Other Than Income Taxes Per Barrel of Oil Equivalent

Consolidated operations

Alaska $ 17.33 6.15 4.08

Lower 48 4.67 3.29 1.87

United States 6.80 3.87 2.62

Canada 0.68 0.67 0.62

Europe 0.79 0.73 0.65

Asia Pacific 8.32 1.99 0.81

Africa 0.14 0.07 0.91

Total international 2.51 1.06 0.72

Total consolidated operations 5.87 3.06 1.91

Equity affiliates—Asia Pacific/Middle East 19.22 11.52 6.96

Depreciation, Depletion and Amortization Per Barrel of Oil Equivalent

Consolidated operations

Alaska $ 11.41 12.02 11.59

Lower 48 13.42 14.24 18.05

United States 13.08 13.79 15.86

Canada 11.41 11.16 13.08

Europe 15.19 17.13 16.24

Asia Pacific 17.71 17.25 15.66

Africa 2.47 2.40 2.43

Total international 13.28 14.25 15.01

Total consolidated operations 13.12 13.92 15.54

Equity affiliates—Asia Pacific/Middle East 6.63 8.29 7.89

*Includes bitumen.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Development and Exploration Activities

The following two tables summarize our net interest in productive and dry exploratory and development wells in the years ended December 31, 2022, 2021 and 2020.

A “development well” is a well drilled within the proved area of a reservoir to the depth of a stratigraphic horizon known to be productive.

An “exploratory well” is a well drilled to find and produce crude oil or natural gas in an unknown field or a new reservoir within a proven field.

Exploratory wells also include wells drilled in areas near or offsetting current production, or in areas where well density or production history have not achieved statistical certainty of results.

Excluded from the exploratory well count are stratigraphic-type exploratory wells, primarily relating to oil sands delineation wells located in Canada and CBM test wells located in Asia Pacific/Middle East.

Net Wells Completed

Productive Dry

2022 2021 2020 2022 2021 2020

Consolidated operations

Alaska — — — — 1 3

Lower 48 118 87 3 — — —

United States 118 87 3 — 1 3

Canada 6 12 23 — — —

Europe — — — 2 — *

Asia Pacific/Middle East — * * 1 * *

Other areas — — — — — *

Total consolidated operations 124 99 26 6 1 3

Equity affiliates

Asia Pacific/Middle East * 3 8 — — —

Total equity affiliates * 3 8 — — —

Consolidated operations

Alaska 11 1 7 — — —

Lower 48 388 339 127 — — —

United States 399 340 134 — — —

Canada 11 2 — — — —

Europe 3 7 7 — — —

Asia Pacific/Middle East 22 21 16 — — —

Africa 2 1 2 — — —

Other areas — — — — — —

Total consolidated operations 437 371 159 — — —

Equity affiliates

Asia Pacific/Middle East 28 30 109 — — —

Total equity affiliates 28 30 109 — — —

*Our total proportionate interest was less than one.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

The table below represents the status of our wells drilling at December 31, 2022, and includes wells in the process of drilling or in active completion.

It also represents gross and net productive wells, including producing wells and wells capable of production at December 31, 2022.

Wells at December 31, 2022

In Progress Oil Gas

Gross Net Gross Net Gross Net

Consolidated operations

Alaska 2 1 1,591 929 — —

Lower 48 615 300 13,512 6,382 3,716 1,767

United States 617 301 15,103 7,311 3,716 1,767

Canada 42 30 192 96 147 147

Europe 22 5 487 84 58 2

Asia Pacific/Middle East 4 2 398 188 6 2

Africa 8 2 869 177 10 2

Other areas — — — — — —

Total consolidated operations 693 340 17,049 7,856 3,937 1,920

Equity affiliates

Asia Pacific/Middle East 279 39 — — 4,989 1,505

Total equity affiliates 279 39 — — 4,989 1,505

Acreage at December 31, 2022

Thousands of Acres

Developed Undeveloped

Gross Net Gross Net

Consolidated operations

Alaska 715 531 1,261 1,246

Lower 48 3,654 2,277 10,279 8,064

United States 4,369 2,808 11,540 9,310

Canada 289 219 3,429 1,944

Europe 430 50 1,195 470

Asia Pacific/Middle East 422 152 10,451 6,930

Africa 358 73 12,545 2,561

Other areas — — 156 125

Total consolidated operations 5,868 3,302 39,316 21,340

Equity affiliates

Asia Pacific/Middle East 1,045 314 3,943 1,066

Total equity affiliates 1,045 314 3,943 1,066

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Costs Incurred

December 31 Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Other

Consolidated operations

Unproved property acquisition $ — 255 255 — — — — — 255

Proved property acquisition — 249 249 — — — 104 — 353

— 504 504 — — — 104 — 608

Exploration 61 1,278 1,339 99 121 59 3 2 1,623

Development 1,316 4,559 5,875 475 711 425 4 — 7,490

$ 1,377 6,341 7,718 574 832 484 111 2 9,721

Equity affiliates

Unproved property acquisition $ — — — — — — — — —

Proved property acquisition — — — — — 881 — — 881

— — — — — 881 — — 881

Exploration — — — — — 25 — — 25

Development — — — — — 244 — — 244

$ — — — — — 1,150 — — 1,150

Consolidated operations

Unproved property acquisition $ 1 11,261 11,262 4 — — — — 11,266

Proved property acquisition — 16,101 16,101 1 — — — — 16,102

1 27,362 27,363 5 — — — — 27,368

Exploration 84 765 849 80 31 51 2 40 1,053

Development 949 2,461 3,410 175 398 433 24 — 4,440

$ 1,034 30,588 31,622 260 429 484 26 40 32,861

Equity affiliates

Unproved property acquisition $ — — — — — — — — —

Proved property acquisition — — — — — — — — —

— — — — — — — — —

Exploration — — — — — 5 — — 5

Development — — — — — 21 — — 21

$ — — — — — 26 — — 26

Consolidated operations

Unproved property acquisition $ 4 10 14 378 — 3 — 9 404

Proved property acquisition — 62 62 129 — — — — 191

4 72 76 507 — 3 — 9 595

Exploration 287 116 403 218 110 32 4 38 805

Development 745 1,758 2,503 102 451 427 18 — 3,501

$ 1,036 1,946 2,982 827 561 462 22 47 4,901

Equity affiliates

Unproved property acquisition $ — — — — — — — — —

Proved property acquisition — — — — — — — — —

— — — — — — — — —

Exploration — — — — — 12 — — 12

Development — — — — — 282 — — 282

$ — — — — — 294 — — 294

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Capitalized Costs

At December 31 Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Other

Consolidated operations

Proved property $ 24,041 62,756 86,797 7,487 13,716 10,534 1,075 — 119,609

Unproved property 589 5,145 5,734 1,291 100 93 98 9 7,325

24,630 67,901 92,531 8,778 13,816 10,627 1,173 9 126,934

Accumulated depreciation, depletion and amortization 11,906 31,455 43,361 2,927 9,774 7,970 458 9 64,499

$ 12,724 36,446 49,170 5,851 4,042 2,657 715 — 62,435

Equity affiliates

Proved property $ — — — — — 10,823 — — 10,823

Unproved property — — — — — 2,162 — — 2,162

— — — — — 12,985 — — 12,985

Accumulated depreciation, depletion and amortization — — — — — 8,400 — — 8,400

$ — — — — — 4,585 — — 4,585

Consolidated operations

Proved property $ 22,750 58,561 81,311 7,380 14,514 12,226 966 — 116,397

Unproved property 1,402 7,704 9,106 1,517 155 92 114 9 10,993

24,152 66,265 90,417 8,897 14,669 12,318 1,080 9 127,390

Accumulated depreciation, depletion and amortization 11,945 29,975 41,920 2,749 10,166 9,240 422 9 64,506

$ 12,207 36,290 48,497 6,148 4,503 3,078 658 — 62,884

Equity affiliates

Proved property $ — — — — — 10,357 — — 10,357

Unproved property — — — — — 2,162 — — 2,162

— — — — — 12,519 — — 12,519

Accumulated depreciation, depletion and amortization — — — — — 8,539 — — 8,539

$ — — — — — 3,980 — — 3,980

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserve Quantities

In accordance with SEC and FASB requirements, amounts were computed using 12-month average prices (adjusted only for existing contractual terms) and end-of-year costs, appropriate statutory tax rates and a prescribed 10 percent discount factor.

Twelve-month average prices are calculated as the unweighted arithmetic average of the first-day-of-the-month price for each month within the 12-month period prior to the end of the reporting period.

For all years, continuation of year-end economic conditions was assumed.

The calculations were based on estimates of proved reserves, which are revised over time as new data becomes available.

Probable or possible reserves, which may become proved in the future, were not considered.

The calculations also require assumptions as to the timing of future production of proved reserves and the timing and amount of future development costs, including dismantlement, and future production costs, including taxes other than income taxes.

While due care was taken in its preparation, we do not represent that this data is the fair value of our oil and gas properties, or a fair estimate of the present value of cash flows to be obtained from their development and production.

Discounted Future Net Cash Flows

Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Total

Consolidated operations

Future cash inflows $ 94,332 195,605 289,937 13,768 44,942 13,458 27,067 389,172

Future production costs 47,979 63,987 111,966 5,722 7,559 5,582 1,085 131,914

Future development costs 8,501 21,379 29,880 960 4,378 1,159 531 36,908

Future income tax provisions 8,882 23,136 32,018 863 25,416 1,780 23,615 83,692

Future net cash flows 28,970 87,103 116,073 6,223 7,589 4,937 1,836 136,658

10 percent annual discount 13,733 31,191 44,924 1,936 1,827 1,505 746 50,938

Discounted future net cash flows $ 15,237 55,912 71,149 4,287 5,762 3,432 1,090 85,720

Equity affiliates

Future cash inflows $ — — — — — 87,644 — 87,644

Future production costs — — — — — 51,912 — 51,912

Future development costs — — — — — 2,685 — 2,685

Future income tax provisions — — — — — 8,988 — 8,988

Future net cash flows — — — — — 24,059 — 24,059

10 percent annual discount — — — — — 10,787 — 10,787

Discounted future net cash flows $ — — — — — 13,272 — 13,272

Total company

Discounted future net cash flows $ 15,237 55,912 71,149 4,287 5,762 16,704 1,090 98,992

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Total

Consolidated operations

Future cash inflows $ 65,910 125,197 191,107 10,847 21,670 11,583 15,778 250,985

Future production costs 34,444 43,034 77,478 4,960 6,090 4,987 801 94,316

Future development costs 8,033 13,386 21,419 923 3,960 1,314 413 28,029

Future income tax provisions 5,310 13,167 18,477 117 8,345 1,542 13,506 41,987

Future net cash flows 18,123 55,610 73,733 4,847 3,275 3,740 1,058 86,653

10 percent annual discount 7,963 22,290 30,253 1,639 696 930 440 33,958

Discounted future net cash flows $ 10,160 33,320 43,480 3,208 2,579 2,810 618 52,695

Equity affiliates

Future cash inflows $ — — — — — 27,851 — 27,851

Future production costs — — — — — 15,491 — 15,491

Future development costs — — — — — 1,649 — 1,649

Future income tax provisions — — — — — 3,071 — 3,071

Future net cash flows — — — — — 7,640 — 7,640

10 percent annual discount — — — — — 2,640 — 2,640

Discounted future net cash flows $ — — — — — 5,000 — 5,000

Total company

Discounted future net cash flows $ 10,160 33,320 43,480 3,208 2,579 7,810 618 57,695

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Millions of Dollars

Canada Europe Asia Pacific/

Middle East Africa Total

Consolidated operations

Future cash inflows $ 30,145 31,533 61,678 4,198 9,857 7,940 9,997 93,670

Future production costs 22,905 17,582 40,487 4,316 4,770 3,838 1,277 54,688

Future development costs 7,932 12,799 20,731 750 3,688 1,289 461 26,919

Future income tax provisions — 376 376 — 267 1,075 7,571 9,289

Future net cash flows (692) 776 84 (868) 1,132 1,738 688 2,774

10 percent annual discount (1,501) (820) (2,321) (396) 117 406 294 (1,900)

Discounted future net cash flows $ 809 1,596 2,405 (472) 1,015 1,332 394 4,674

Equity affiliates

Future cash inflows $ — — — — — 17,284 — 17,284

Future production costs — — — — — 10,239 — 10,239

Future development costs — — — — — 1,186 — 1,186

Future income tax provisions — — — — — 1,728 — 1,728

Future net cash flows — — — — — 4,131 — 4,131

10 percent annual discount — — — — — 1,269 — 1,269

Discounted future net cash flows $ — — — — — 2,862 — 2,862

Total company

Discounted future net cash flows $ 809 $ 1,596 $ 2,405 $ (472) $ 1,015 $ 4,194 $ 394 $ 7,536

*Undiscounted future net cash flows related to the proved oil and gas reserves disclosed for Canada for the year ending December 31, 2020, are negative due to the inclusion of asset retirement costs and certain indirect costs in the calculation of the standardized measure of discounted future net cash flows.

These costs are not required to be included in the economic limit test for proved developed reserves as defined in Regulation S-X Rule 4-10.

Future net cash flows for Canada were also impacted by lower 12-month average pricing for bitumen and crude oil in 2020.

Commodity prices have since improved in the current environment.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

Sources of Change in Discounted Future Net Cash Flows

Millions of Dollars

Consolidated Operations Equity Affiliates Total Company

2022 2021 2020 2022 2021 2020 2022 2021 2020

Discounted future net cash flows at the beginning of the year $ 52,695 $ 4,674 27,372 $ 5,000 2,862 7,170 $ 57,695 7,536 34,542

Changes during the year

Revenues less production costs for the year (33,532) (20,000) (5,198) (3,245) (1,389) (897) (36,777) (21,389) (6,095)

Net change in prices, and production costs 61,902 50,956 (34,307) 8,184 3,822 (4,769) 70,086 54,778 (39,076)

Extensions, discoveries and improved recovery, less estimated future costs 7,882 10,420 887 1,472 (44) 22 9,354 10,376 909

Development costs for the year 6,687 4,396 3,593 272 91 192 6,959 4,487 3,785

Changes in estimated future development costs (4,088) (33) 754 189 (104) (205) (3,899) (137) 549

Purchases of reserves in place, less estimated future costs 3,353 17,833 1 1,282 — (3) 4,635 17,833 (2)

Sales of reserves in place, less estimated future costs (3,847) (468) (302) — — — (3,847) (468) (302)

Revisions of previous quantity estimates 13,080 2,985 (2,299) 2,193 178 (42) 15,273 3,163 (2,341)

Accretion of discount 7,021 964 3,984 616 344 804 7,637 1,308 4,788

Net change in income taxes (25,433) (19,032) 10,189 (2,691) (760) 590 (28,124) (19,792) 10,779

Total changes 33,025 48,021 (22,698) 8,272 2,138 (4,308) 41,297 50,159 (27,006)

Discounted future net cash flows at year end $ 85,720 $ 52,695 4,674 $ 13,272 5,000 2,862 $ 98,992 57,695 7,536

• The net change in prices and production costs is the beginning-of-year reserve-production forecast multiplied by the net annual change in the per-unit sales price and production cost, discounted at 10 percent.

• Purchases and sales of reserves in place, along with extensions, discoveries and improved recovery, are calculated using production forecasts of the applicable reserve quantities for the year multiplied by the 12-month average sales prices, less future estimated costs, discounted at 10 percent.

• Revisions of previous quantity estimates are calculated using production forecast changes for the year, including changes in the timing of production, multiplied by the 12-month average sales prices, less future estimated costs, discounted at 10 percent.

• The accretion of discount is 10 percent of the prior year’s discounted future cash inflows, less future production and development costs.

• The net change in income taxes is the annual change in the discounted future income tax provisions.

ConocoPhillips 2022 10-K

Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 8. Financial Statements and Supplementary Data