What changed in this filing

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Item 8. Financial Statements and Supplementary Data

2024-02-15 compared with 2023-02-16 · 430 added, 495 removed, 2735 unchanged (25% of the section changed)

39 unchanged sentences

Opinion on the Financial Statements

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”).

We have audited the accompanying consolidated balance sheets of ConocoPhillips (the Company) as of December 31, 2023 and 2022, the related consolidated income statement, statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, 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, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S.

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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:

(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.

Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the Audit and Finance Committee and that:

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

The communication of the critical audit matter 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 matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.

ConocoPhillips 2023 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

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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

Significant judgment is required by the Company’s internal reservoir engineers in evaluating the data used to estimate proved oil and gas reserves.

Estimating proved oil and gas reserves also requires the selection of inputs, including historical production, oil and gas price assumptions and future operating and capital costs assumptions, among others.

Auditing the Company’s DD&A calculation is complex because of the use of the work of the internal reservoir engineers 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.

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.

We have served as the Company's auditor since 1949.

/s/ Ernst & Young LLP

We have served as ConocoPhillips’ auditor since 1949.

Houston, Texas

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In our opinion, ConocoPhillips (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, 2023, 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.

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, 2023 and 2022, the related consolidated income statement, statements of comprehensive income, changes in equity and cash flows for each of the three years in the period ended December 31, 2023, and the related notes and our report dated February 15, 2024 expressed an unqualified opinion thereon.

Basis for Opinion

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Equity in earnings of affiliates 1,720 2,081 832

Gain on dispositions 1,077 486 549

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

Gain (loss) on dispositions 228 1,077 486

Other income 485 504 1,203

Total Revenues and Other Income 58,574 82,156 48,349

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Interest and debt expense 780 805 884

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

Foreign currency transaction (gain) loss 92 ( 100 ) ( 22 )

Other expenses 2 ( 47 ) 102

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Net Income (Loss) $ 10,957 18,680 8,079

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)

Net Income (Loss) Per Share of Common Stock (dollars)

Basic $ 9.08 14.62 6.09

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Defined benefit plans

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 )

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

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

Net change ( 38 ) ( 49 ) ( 38 )

Net actuarial gain (loss) arising during the period 37 ( 623 ) 357

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

Reclassification adjustment for amortization of net actuarial losses (gains) included in net income (loss) 82 72 178

Net change 119 ( 551 ) 535

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Unrealized holding gain (loss) on securities 20 ( 13 ) ( 2 )

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

Income taxes on unrealized holding loss on securities 3 1 —

Reclassification adjustment for (gain) loss included in net income ( 4 ) ( 1 ) ( 1 )

Income taxes on unrealized holding gain (loss) on securities ( 3 ) 3 1

Unrealized holding gain (loss) on securities, net of tax 13 ( 11 ) ( 2 )

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Foreign currency translation adjustments, net of tax 197 ( 622 ) ( 124 )

Unrealized gain (loss) on hedging activities 78 — —

Income taxes on unrealized gain (loss) on hedging activities ( 16 ) — —

Unrealized gain (loss) on hedging activities, net of tax 62 — —

Other Comprehensive Income (Loss), Net of Tax 327 ( 1,050 ) 268

Comprehensive Income (Loss) $ 11,284 17,630 8,347

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.

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Accounts and notes receivable—related parties 13 13

Investment in Cenovus Energy — 1,117

Inventories 1,398 1,219

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( 65,640 ) ( 60,189 )

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

Accumulated other comprehensive income (loss) ( 5,673 ) ( 6,000 )

Retained earnings 59,268 53,029

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Deferred taxes 1,145 2,086 1,346

Undistributed equity earnings 942 446 645

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

Distributions more (less) than income from equity affiliates 964 942 446

(Gain) loss on dispositions ( 228 ) ( 1,077 ) ( 486 )

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

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Decrease (increase) in accounts and notes receivable 1,333 ( 963 ) ( 2,500 )

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

Decrease (increase) in inventories ( 103 ) ( 38 ) ( 160 )

Decrease (increase) in prepaid expenses and other current assets 337 ( 173 ) ( 649 )

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Cash, Cash Equivalents and Restricted Cash at End of Period $ 5,899 6,694 5,398

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.

Restricted cash of $ 264 million and $ 236 million is included in the “ Other assets ” line of our Consolidated Balance Sheet as of December 31, 2023 and December 31, 2022, respectively.

See Notes to Consolidated Financial Statements.

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Millions of Dollars

Attributable to ConocoPhillips

Par Value Capital in

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Income (Loss) Retained

Earnings Non-

Interests Total

Earnings Total

Balances at December 31, 2020

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Other comprehensive income (loss) 268 268

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

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 ( 32 ) ( 32 )

Disposition ( 84 ) ( 84 )

Distributed under benefit plans 326 326

8 unchanged sentences

( 3,908 ) ( 3,908 )

Acquisition of Concho 3 13,122 13,125

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

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Repurchase of company common stock ( 5,400 ) ( 5,400 )

Excise tax on share repurchases ( 50 ) ( 50 )

Distributed under benefit plans 161 161

Other ( 1 ) 2 1

Balances at December 31, 2023

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• 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.

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

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

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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.

• Revenue Recognition —Revenues associated with the sales of crude oil, bitumen, natural gas, NGLs, LNG 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.

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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).

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.

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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.

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 coventurer 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.

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• 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.

• 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 (loss) on dispositions” line of our consolidated income statement.

When partial units of depreciable property are sold or retired which do not significantly alter the DD&A rate, the asset cost and accumulated depreciation are eliminated such that no gain or loss is recorded.

• 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).

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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.

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

See Note 16 .

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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.

Diluted 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.

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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 gains or losses on asset dispositions are reported before-tax and are included net in the “ Gain (loss) 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)

Surmont Acquisition

In October 2023, we completed our acquisition of the remaining 50 percent working interest in Surmont, an asset in our Canada segment, from TotalEnergies EP Canada Ltd.

Following the acquisition, we own 100 percent working interest in Surmont.

The fair value of total consideration for the all-cash transaction was $ 3.0 billion (CAD $ 4.1 billion):

Fair value of consideration Millions of Dollars

Cash paid $ 2,685

Contingent consideration 320

Total consideration $ 3,005

The contingent payment arrangement requires additional consideration to be paid to TotalEnergies EP Canada Ltd.

up to $ 0.4 billion CAD over a five-year term.

The contingent payments represent $ 2.0 million for every dollar that WCS pricing exceeds $ 52 per barrel during the month, subject to certain production targets being achieved.

The range of the undiscounted amounts we could pay under this arrangement is between $ 0 and $ 0.3 billion.

The fair value of the contingent consideration on the acquisition date was $ 320 million and estimated by applying the income approach.

See Note 13 .

The transaction is accounted for as a business combination 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.

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

The fair values of other assets acquired and liabilities assumed, which included accounts receivable, accounts payable, and most other current assets and current liabilities, were determined to be equivalent to the carrying value due to their short-term nature.

The total consideration of $ 3.0 billion was allocated to the identifiable assets and liabilities based on their fair values as of the acquisition date, October 4, 2023.

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Recognized amounts of identifiable assets acquired and liabilities assumed Millions of Dollars

Oil and gas properties 3,129

Asset retirement obligations ( 112 )

Total identifiable net assets $ 3,005

With the completion of the transaction, we acquired proved and unproved properties of approximately $ 2.9 billion and $ 0.2 billion, respectively.

In anticipation of the acquisition, we entered into, and settled, various foreign exchange forward contracts to purchase CAD and recognized a loss of $ 112 million in the "Foreign currency transaction (gain) loss" line on our consolidated income statement associated with these forward contracts.

The related cash flows are included within "cash flows from investing activities" on our consolidated statement of cash flows.

From the acquisition date through December 31, 2023, "Total Revenues and Other Income" and "Net Income (Loss)" associated with the acquired assets were $ 572 million and $ 119 million, respectively.

Supplemental Pro Forma (unaudited)

The following tables summarize the unaudited supplemental pro forma financial information for the year ended December 31, 2023, and 2022, as if we had completed the acquisition on January 1, 2022.

Millions of Dollars

Year Ended December 31, 2023

As reported Pro forma Surmont Pro forma Combined

Total Revenues and Other Income $ 58,574 2,561 61,135

Income (loss) before income taxes 16,288 659 16,947

Net Income (Loss) 10,957 501 11,458

Earnings per share:

Basic net income (loss) $ 9.08 9.50

Diluted net income (loss) 9.06 9.47

Millions of Dollars

Year Ended December 31, 2022

As reported Pro forma Surmont Pro forma Combined

Total Revenues and Other Income $ 82,156 3,582 85,738

Income (loss) before income taxes 28,228 947 29,175

Net Income (Loss) 18,680 720 19,400

Earnings per share:

Basic net income (loss) $ 14.62 15.18

Diluted net income (loss) 14.57 15.13

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, 2022, nor is it necessarily indicative of future operating results of the combined entity.

The unaudited pro forma financial information for the years ending December 31, 2023 and 2022, respectively, is a result of combining the consolidated income statement of ConocoPhillips with the assets acquired from TotalEnergies EP Canada Ltd.

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

The pro forma results include adjustments which 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.

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

QatarEnergy LNG NFS(3) (NFS3), formerly Qatar Liquefied Gas Company Limited (12) (QG12)

During 2022, we were awarded a 25 percent interest in NFS3, a new joint venture with QatarEnergy, to participate in the North Field South (NFS) LNG project.

Formation of NFS3 closed during 2023.

NFS3 has a 25 percent interest in the NFS project and is reported as an equity method investment in our Europe, Middle East and North Africa segment.

Port Arthur Liquefaction Holdings, LLC (PALNG)

During 2023, we acquired a 30 percent interest in PALNG, a joint venture for the development of a large-scale LNG facility for the first phase of the Port Arthur LNG project ("Phase 1").

Sempra PALNG Holdings, LLC owns the remaining 70 percent interest in the joint venture.

PALNG is reported as an equity method investment in our Corporate and Other segment.

Contingent Payments

We recorded contingent payments related to the previous dispositions of our working interests in the Foster Creek Christina Lake Partnership and western Canada gas assets, and our San Juan assets.

Contingent payments were recorded as (gain) loss on disposition on our consolidated income statement and reflected within our Canada and Lower 48 segments.

In our Canada segment, the contingent payment, calculated and paid quarterly, was $ 6 million CAD for every $1 CAD by which the WCS quarterly average crude oil price exceeded $ 52 CAD per barrel.

In our Lower 48 segment, the contingent payment, paid annually, was calculated monthly at $ 7 million per month when the U.S.

Henry Hub natural gas price was at or above $ 3.20 per MMBTU.

The term of contingent payments in our Canada segment ended in the second quarter of 2022 and the term of contingent payments in our Lower 48 segment ended at the end of 2023.

Contingent payments recorded in the years 2023, 2022 and 2021 were $ 7 million, $ 451 million and $ 369 million, respectively.

Acquisition of Additional Shareholding Interest in Australia Pacific LNG (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.

2 unchanged sentences

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.

QatarEnergy LNG NFE(4) (NFE4), formerly Qatar Liquefied Gas Company Limited (8) (QG8)

During 2022, we were awarded a 25 percent interest in NFE4, a new joint venture with QatarEnergy to participate in the North Field East (NFE) LNG project.

NFE4 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

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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.

Together, the subsidiaries sold indirectly held our 54 percent interest in the Indonesia Corridor Block 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.

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

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

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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.

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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.

We completed the final allocation of the purchase price to acquired assets and liabilities of Concho by the end of the year, and by the end of the first quarter of 2022 for the Shell assets.

It was based on the fair value of the long-lived assets and the conclusion of the fair value determination of all other assets and liabilities acquired.

Acquisition of Concho Resources Inc.

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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)* 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) 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;

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 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

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

Accounts payable $ 638

Accrued income and other taxes 56

Employee benefit obligations 4

Other accruals 510

Long-term debt 4,696

Asset retirement obligations and accrued environmental costs 310

Deferred income taxes 1,071

Other liabilities and deferred credits 117

Total liabilities assumed $ 7,402

Net assets acquired $ 13,125

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.

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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.

From the acquisition date through December 31, 2021, “Total Revenues and Other Income” and “Net Income (Loss)” 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.

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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

Accounts payable $ 206

Accrued income and other taxes 6

Other accruals 20

Asset retirement obligations and accrued environmental costs 86

Other liabilities and deferred credits 36

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 $ 4.2 billion and $ 4.3 billion, respectively.

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

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Supplemental Pro Forma (unaudited)

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

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 8,079 920 8,999

Earnings per share:

Basic net income $ 6.09 6.78

Diluted net income 6.07 6.76

The following table summarizes the unaudited supplemental pro forma financial information for the year ended December 31, 2021, as if we had completed the acquisition of the Shell Permian assets on January 1, 2020.

Millions of Dollars

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As reported Pro forma

Concho Pro forma

Shell Pro forma

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

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

Net Income (Loss) 8,079 920 8,999

Earnings per share:

Basic net loss $ ( 2.51 ) ( 1.75 )

Diluted net loss ( 2.51 ) ( 1.75 )

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.

Basic net income (loss) $ 6.09 6.78

Diluted net income (loss) 6.07 6.76

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 transaction been completed on January 1, 2020, nor is it necessarily indicative of future operating results of the combined entity.

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

The pro forma includes adjustments which 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 2020, we completed the sale of our Australia-West assets and operations.

The sales agreement entitled us to a $ 200 million payment upon a 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.

We filed an arbitration proceeding against the purchaser to enforce our contractual right to the $ 200 million, plus interest accruing from the due date and the matter was resolved in April 2023 to our satisfaction.

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

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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.

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

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$ 9,130 8,225

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Equity Investments

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• 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.

• Port Arthur Liquefication Holdings, LLC (PALNG)— 30 percent owned joint venture with Sempra PALNG Holdings, LLC for the development of a large-scale LNG facility for the first phase of the Port Arthur LNG project ("Phase 1").

• QatarEnergy LNG N(3) (N3), formerly 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

• QatarEnergy LNG NFE(4) (NFE4), formerly Qatar Liquefied Gas Company Limited (8) (QG8)— 25 percent owned joint venture with an affiliate of QatarEnergy ( 75 percent)—participant in the North Field East (NFE) LNG project.

• QatarEnergy LNG NFS(3) (NFS3), formerly Qatar Liquefied Gas Company Limited (12) (QG12)— 25 percent owned joint venture with an affiliate of QatarEnergy ( 75 percent)—participant in the North Field South project.

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

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Revenues $ 15,314 18,356 11,824

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

Net income 5,507 2,557 1,426

Income (loss) before income taxes 6,301 8,234 3,946

Net income (loss) 4,214 5,507 2,557

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

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See Note 10 .

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

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.

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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.

Accordingly, we recorded a noncash $ 688 million before- 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, 2023, the carrying value of our equity method investment in APLNG was approximately $ 5.4 billion.

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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 .

Included in net income (loss) for 2023, 2022 and 2021 was after-tax expense of $ 8 million, $ 10 million and $ 39 million, respectively, representing the amortization of this basis difference on currently producing licenses.

PALNG is a joint venture for the development of a large-scale LNG facility.

At December 31, 2023, the carrying value of our equity method investment in PALNG was approximately $ 1.1 billion.

N3 is a joint venture that owns an integrated large-scale LNG project located in Qatar.

Currently, the LNG from N3 is being sold to markets outside of the U.S.

NFE4 is a joint venture with QatarEnergy participating in the NFE LNG project.

NFE4 has a 12.5 percent interest in the NFE project.

NFS3 is a joint venture with QatarEnergy to participate in the NFS LNG project.

NFS3 has a 25 percent interest in the NFS project.

At December 31, 2023, the carrying value of our equity method investments in Qatar was approximately $ 1.1 billion.

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.

At December 31, 2023, there were no outstanding loans to affiliated companies.

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.

In 2022, we sold our remaining 91 million shares of Cenovus Energy (CVE), recognizing proceeds of $ 1.4 billion and a net gain of $ 251 million.

All gains and losses were recognized within "Other income" 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

2023 2022 2021

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 )

Total Net gain on equity securities 251 1,040

Net gain on equity securities sold during the period 251 473

Unrealized gain on equity securities still held at the reporting date $ 567

ConocoPhillips 2023 10-K

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2023 2022 2021

Beginning balance at January 1 $ 660 682 1,020

Beginning balance $ 527 660 682

Additions pending the determination of proved reserves — 5 10

Reclassifications to proved properties ( 285 ) ( 7 ) —

Sales of suspended wells — — ( 313 )

Charged to dry hole expense ( 58 ) ( 131 ) ( 32 )

Ending balance at December 31

$ 527 660 682

Ending balance $ 184 527 660

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

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Total 2020-2022 2017-2019 2006-2016

2016-2018 2006-2015

Willow—Alaska (2)

315 201 114 —

PL 1009—Norway (1)

WL4-00—Malaysia (2)

PL891—Norway (1)

West Willow—Alaska (1)

Narwhal Trend—Alaska (1)

WL4-00—Malaysia (2)

PL782S—Norway (1)

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

In our Europe, Middle East and North Africa segment, after further evaluation we recognized a before-tax expense of $ 37 million for dry hole costs associated with the suspended Warka discovery well, drilled in 2020, on license PL1009 in the Norwegian Sea.

In our Alaska segment, we recorded a before-tax expense of approximately $ 31 million for dry hole costs associated with the Bear-1 exploration well.

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

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Asia Pacific — — 695

Corporate and Other 1 — —

$ 14 ( 12 ) 674

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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 2023 10-K

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We had also accrued in Corporate and Other $ 55 million and $ 59 million of environmental costs associated with sites no longer in operation at December 31, 2023 and 2022, 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.

In addition, December 31, 2023 and 2022, included a $ 17 million and $ 16 million accrual, respectively, 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.

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Millions of Dollars

2.40 % Notes due 2022

7.65 % Debentures due 2023

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2.4 % Notes due 2025

3.35 % Debentures due 2025

8.2 % Notes due 2025

3.35 % Debentures due 2025

4.95 % Notes due 2026

6.875 % Debentures due 2026

7.8 % Debentures due 2027

3.75 % Notes due 2027

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5.95 % Notes due 2036

5.951 % Notes serially maturing 2022 through 2037

5.9 % Notes due 2038

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5.3 % Notes due 2053

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

5.55 % Notes due 2054

4.025 % Notes due 2062

5.70 % Notes due 2063

Marine Terminal Revenue Refunding Bonds due 2031 at 1.65 % – 4.70 % during 2023 and 0.07 % – 4.10 % during 2022

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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.

The principal amounts of long-term debt, excluding finance lease obligations, maturing in 2024 through 2028 are:

$ 759 million, $ 735 million, $ 104 million, $ 438 million, and $ 265 million, respectively.

In December 2023, the company retired $ 78 million principal amount of our 7.65 percent Notes at maturity.

In the third quarter of 2023, we issued $ 2.7 billion in new Notes through our universal shelf registration statement and prospectus supplement.

The net proceeds were used to fund the acquisition of the remaining 50 percent working interest in Surmont which closed in October 2023.

The following Notes were issued:

• 5.05 % Notes due 2033 with principal of $ 1.0 billion

• 5.55 % Notes due 2054 with principal of $ 1.0 billion

• 5.70 % Notes due 2063 with principal of $ 0.7 billion

In the second quarter of 2023, as described further below, we initiated and completed two concurrent transactions as part of our debt refinancing strategy.

We issued $ 1.1 billion in new Notes through our universal shelf registration statement and prospectus supplement and used the proceeds to repurchase $ 1.1 billion of existing debt.

Debt Issuance

On May 23, 2023, we issued 5.3 % Notes due 2053 with principal of $ 1.1 billion.

Tender Offers

On May 25, 2023, we repurchased a total of $ 1,133 million aggregate principal amount of debt as listed below.

We paid $ 33 million below face value to repurchase these debt instruments and recognized a gain on debt extinguishment of $ 27 million, which is included in the "Other expenses" line on our consolidated income statement.

• 2.125 % Notes due 2024 with principal of $ 900 million (partial repurchase of $ 439 million)

• 3.350 % Notes due 2024 with principal of $ 426 million (partial repurchase of $ 160 million)

• 2.400 % Notes due 2025 with principal of $ 900 million (partial repurchase of $ 534 million)

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

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

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

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

The notes tendered and accepted in the exchange offers were:

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• 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:

The notes tendered and accepted were exchanged for the following 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:

Debt Issuance

In March 2022, we issued the following notes:

• 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.

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

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

Revolving Credit Facility and Credit Rating Information

In 2022, we refinanced our revolving credit facility from a total borrowing capacity of $ 6.0 billion down 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.

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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).

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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 .

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• 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 .

We estimate the remaining term of this guarantee to be seven 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.

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Our maximum potential liability for future payments, or cost of volume delivery, under these guarantees is estimated to be $ 730 million ($ 1.2 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.

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-venturers 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.

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At December 31, 2023, the carrying value of these guarantees was approximately $ 29 million.

QG8 Guarantee

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

QatarEnergy LNG Limited Guarantee

We have guaranteed our portion of certain fiscal and other joint venture obligations as a shareholder in NFE4 and NFS3.

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

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We have other guarantees with maximum future potential payment amounts totaling approximately $ 620 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.

These guarantees have remaining terms of two to five 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, 2023, there was no carrying value associated with these guarantees.

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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.

Several Louisiana parishes and the State of Louisiana have filed numerous 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.

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

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

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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.

and Santos Limited for their failure to timely pay the $ 200 million bonus due upon final investment decision of the Barossa development project under the sale and purchase agreement for the sale of our Australia-West asset and operations.

The matter was resolved in April 2023 to our satisfaction.

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.

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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.

The defendants filed a motion to dismiss the consolidated complaint on March 8, 2022.

On June 23, 2023, the court denied defendants’ motion as to most defendants including Concho/ConocoPhillips.

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

ConocoPhillips is involved in pending disputes with commercial counterparties relating to the propriety of its force majeure notices following Winter Storm Uri in 2021.

We believe these claims are without merit and are vigorously defending them.

Long-Term Unconditional Purchase Obligations and Commitments, Including Throughput 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:

The agreements typically provide for natural gas or crude oil transportation and LNG purchase commitments.

The fixed and determinable portion of the remaining estimated payments under these various agreements as of December 31, 2023 are:

2024—$ 7 million;

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2028—$ 283 million;

and 2028 and after—$ 33 million.

and 2029 and after—$ 11 billion.

Generally, variable components of these obligations include commodity futures prices and inflation rates.

Purchases of LNG under these commitments are expected to be offset in the same or approximately same periods by cash received from the related sales transactions.

Total payments under the agreements were $ 26 million in 2023, $ 26 million in 2022 and $ 27 million in 2021.

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Commodity Derivative Instruments

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

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

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

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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:

The following table presents the gross fair values of our commodity derivatives, excluding collateral, on our consolidated balance sheet:

Millions of Dollars

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Other liabilities and deferred credits 80 210

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

The gains (losses) from commodity derivatives included in our consolidated income statement are presented in the following table:

Millions of Dollars

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Sales and other operating revenues $ 86 ( 88 ) ( 228 )

Other income (loss) ( 5 ) 25 4

Other income ( 6 ) ( 5 ) 25

Purchased commodities ( 90 ) ( 91 ) 75

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Notes to Consolidated Financial Statements Table of Contents

Interest Rate Derivative Instruments

During 2023, PALNG executed interest rate swaps that had the effect of converting 60 percent of the projected term loans outstanding to finance the cost of development and construction of Phase 1 from floating to fixed rate.

These swaps were designated and qualify for hedge accounting under ASC Topic 815, “Derivatives and Hedging,” as a cash flow hedge with changes in the fair value of the designated hedging instruments reported as a component of other comprehensive income and reclassified into earnings in the same periods that the hedged transactions will affect earnings.

We recognize our proportionate share of PALNG’s adjustments for other comprehensive income as a change to our equity method investment with corresponding adjustments in equity.

For the year ended December 31, 2023, we recognized an unrealized gain of $ 78 million in other comprehensive income related to these swaps.

Financial Instruments

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$ 5,635 6,361 536 2,182

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

The following investments in debt securities classified as available for sale are carried at fair value on our consolidated balance sheet at December 31, 2023 and 2022:

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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:

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$ 1,422 1,234 1,424 1,222

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.

As of December 31, 2023, total unrealized gains for debt securities classified as available for sale with net unrealized gains were $ 5 million and as of December 31, 2022, total unrealized losses for debt securities classified as available for sale with net unrealized losses were $ 12 million.

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

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

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

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.

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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, 2023 and December 31, 2022, was $ 181 million and $ 333 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.

For these instruments, no collateral was posted as of December 31, 2023 and $ 42 million collateral was posted as of December 31, 2022.

If our credit rating had been downgraded below investment grade on December 31, 2023, we would have been required to post $ 152 million of additional collateral, either with cash or letters of credit.

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 13—Fair Value Measurement

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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.

Financial assets and liabilities reported at fair value on a recurring basis primarily include our investments in debt securities classified as available for sale, commodity derivatives, and our contingent consideration arrangement related to the Surmont acquisition.

S ee Note 3 .

• 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.

Level 1 financial assets also include 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.

Level 2 financial assets also include 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.

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

Level 3 activity was not material for all periods presented.

Level 3 commodity derivative activity was not material for all periods presented.

• Level 3 liabilities include the fair value of future quarterly contingent payments to Total Energies EP Canada Ltd.

in connection with the acquisition of the remaining 50 percent working interest in Surmont.

Contingent consideration consists of payments up to approximately $ 0.4 billion CAD over a five-year term ending in the fourth quarter of 2028.

The contingent payments represent $ 2.0 million for every dollar that the monthly WCS average pricing exceeds $ 52 per barrel.

The terms include adjustments related to not achieving certain production targets.

The fair value of the contingent consideration as of December 31, 2023 is calculated using the income approach and is largely based on the estimated commodity price outlook using a combination of external pricing service companies' and our internal price outlook (unobservable input) and a discount rate consistent with those used by principal market participants (observable input).

Impact of other unobservable inputs on the fair value as of December 31, 2023 was not significant.

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):

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

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

Investments in debt securities $ 278 1,146 — 1,424 178 1,044 — 1,222

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Commodity derivatives $ 350 283 14 647 906 843 261 2,010

Contingent consideration — — 312 312 — — — —

Total liabilities $ 350 283 326 959 906 843 261 2,010

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Notes to Consolidated Financial Statements Table of Contents

The range and arithmetic average of the significant unobservable input used in the Level 3 fair value measurement was as follows:

Dollars) Valuation

Technique Unobservable Input Range

(Arithmetic Average)

December 31, 2023

Contingent consideration - Surmont $ 312 Discounted cash flow Commodity price outlook* ($/BOE) $ 45.48 - $ 63.04 ($ 57.45 )

*Commodity price outlook based on a combination of external pricing service companies' outlooks and our internal outlook.

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

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December 31, 2021 5,574 — 5,574 — 688

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Net PP&E (held for use)

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*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.

future prices escalated at 2.0 percent 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 10 percent of their interest in APLNG for $ 1.645 billion, before customary adjustments.

During 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.

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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 .

See Note 4 and Note 7 .

Reported Fair Values of Financial Instruments

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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:

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:

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See Note 12 .

• Loans and advances—related parties:

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:

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

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

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

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Financial assets

Investment in CVE common shares $ — 1,117 $ — 1,117

Commodity derivatives 345 824 345 824

Investments in debt securities 1,424 1,222 1,424 1,222

Loans and advances—related parties — 114 — 114

Financial liabilities

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Commodity derivatives 225 782 225 782

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 14—Equity

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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, 2023 or 2022.

Noncontrolling Interests

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

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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.

Share repurchases since inception of our current program totaled 383 million shares at a cost of $ 29 billion through the end of December 2023.

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 2023 10-K

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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.

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.

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.

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Accumulated DD&A ( 1,185 ) ( 1,022 )

Prepaid expenses and other current assets 16 2

Other assets 691 536

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Divestiture — — — ( 56 ) — —

Curtailment — — 12 — — 1

Recognition of termination benefits — — 9 — — —

Foreign currency exchange rate change — 52 — ( 425 ) — —

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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 2023, the actuarial losses related to the benefit obligations for U.S.

and international plans were primarily related to a decrease in the discount rates.

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.

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:

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Settlements loss (gain) 6 — 37 — 102 — — — —

Curtailment loss — — 12 — — — — — —

Curtailment loss (gain) — — — — 12 — — — —

Net periodic benefit cost $ 88 70 131 10 203 52 ( 35 ) ( 33 ) ( 31 )

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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.

The target allocations for plan assets, aggregated across U.S.

and international plans, are 24 percent equity securities, 72 percent debt securities, and 4 percent real estate.

Generally, the plan investments are publicly traded, therefore minimizing liquidity risk in the portfolio.

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Cash and cash equivalents — — — — 36 — — 36

Derivatives — — — — — — — —

Real estate — — — — — — 146 146

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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 can contribute 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.

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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 2023 Omnibus Stock and Performance Incentive Plan of ConocoPhillips (Omnibus Plan) was approved by shareholders in May 2023, replacing similar prior plans and providing that no new awards shall be granted under the prior plans.

Over its 10-year life, the Omnibus Plan allows the issuance of up to 36 million shares of our common stock for compensation to our employees and directors, but the available shares (i) are reduced by awards granted under the prior plan between the board adoption date (February 15, 2023) and the shareholder approval date (May 16, 2023) and (ii) are increased by any shares of common stock represented by awards granted under the Omnibus 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, excluding shares surrendered in payment of the exercise of a stock option or stock appreciation right, shares not issued in connection with the stock settlement of a stock appreciation right, or shares reacquired by the company using cash proceeds from the exercise of a stock option.

The Human Resources and Compensation Committee of our Board of Directors is authorized to determine the types, terms, conditions and limitations of awards granted.

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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.

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, for awards that provide for retirement-based vesting, the period beginning at the start of the service period and ending upon the later to occur of the date when an employee first becomes eligible for retirement or the date that is six months after the grant date (generally the minimum period of time required for an award to not be subject to forfeiture).

Other than certain retention awards, 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).

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Tax benefit 84 95 76

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.

Stock Options —Stock options granted under the provisions of the Omnibus 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.

Beginning in 2018, stock option grants were discontinued and replaced with three-year , time-vested restricted stock units which generally were cash-settled for 2018 and 2019 awards and will be stock-settled beginning with 2020 awards.

The following summarizes our stock option activity for the year ended December 31, 2023:

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At December 31, 2023, 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.

Stock Unit Programs —Restricted stock units (RSU) granted annually under the provisions of the Omnibus Plan and the general and executive RSU programs vest in one installment on the third anniversary of the grant date.

RSUs granted under the Omnibus Plan for a variable long-term incentive retention 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.

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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.

Units awarded to retirement eligible employees under the general and executive RSU programs vest six months from the grant date;

however, those units are not settled through the issuance of 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:

The grant date fair market value of RSUs 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 estimated dividends that will not be received.

The following summarizes our stock-settled stock RSU activity for the year ended December 31, 2023:

Stock Units Weighted-Average

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4,791,110 $ 78.20

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.

At December 31, 2023, the remaining unrecognized compensation cost from the unvested stock-settled RSUs was $ 166 million, which will be recognized over a weighted-average period of 1.70 years, the longest period being 2.58 years.

The weighted-average grant date fair value of stock-settled RSUs granted during 2022 and 2021 was $ 90.57 and $ 46.56 , respectively.

The total fair value of stock-settled RSUs issued during 2022 and 2021 was $ 193 million and $ 144 million, respectively.

Cash-settled executive RSUs granted in 2018 and 2019 replaced the stock option program.

These RSUs, subject to elections to defer, were 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.

Executive RSUs awarded to retirement eligible employees vest six months from the grant date;

however, those units were not settled until the earlier of separation from the company or the end of the regularly scheduled vesting period.

Compensation expense was initially measured using the average fair market value of ConocoPhillips common stock and was subsequently adjusted, based on changes in the ConocoPhillips stock price through the end of each subsequent reporting period, through the settlement date.

Recipients received an accrued reinvested dividend equivalent that was charged to compensation expense.

The accrued reinvested dividend was paid at the time of settlement, subject to the terms and conditions of the award.

Beginning with executive RSUs granted in 2020, awards will be settled in stock.

There was no cash-settled stock unit activity and no remaining unrecognized compensation cost to be recorded for the unvested cash-settled units for the year ended December 31, 2023.

The total fair value of cash-settled executive RSUs issued during 2022 and 2021 were $ 21 million and $ 20 million, respectively.

Performance Share Program —Under the Omnibus 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).

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Stock-Settled

Stock-settled PSUs are settled by issuing one share of ConocoPhillips common stock per unit.

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.

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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.

Because 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 stock-settled PSUs issued prior to 2013 receive a cash payment of a dividend equivalent that is charged to retained earnings.

Beginning in 2013, stock-settled 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.

Until issued as stock, recipients of these PSUs receive an accrued reinvested dividend equivalent that is charged to compensation expense.

The following summarizes our stock-settled Performance Share Program activity for the year ended December 31, 2023:

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Granted 3,797 112.50

Forfeited ( 72 ) 55.13

Issued ( 272,522 ) 51.15 $ 29

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At December 31, 2023, 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 weighted-average grant date fair value of stock-settled PSUs granted during 2022 was $ 91.58 ;

however, there were no stock-settled PSUs granted during 2021.

The total fair value of stock-settled PSUs issued during 2022 and 2021 were $ 21 million and $ 18 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.

In connection with and immediately following the separation of our Downstream businesses in 2012, grants of new cash-settled 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.

3 unchanged sentences

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.

Beginning in 2013, cash-settled 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.

1 unchanged sentence

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.

For the performance periods beginning in 2018 or later, 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.

21 unchanged sentences

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.

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 or 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.

12 unchanged sentences

149,270 $ 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.

At December 31, 2023, the remaining compensation cost from the unvested restricted stock was negligible, which will be recognized over a weighted-average period of 0.01 years.

The weighted-average grant date fair value of awards granted during 2022 and 2021 was $ 96.20 and $ 46.43 , respectively.

64 unchanged sentences

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, 2023, unremitted income considered to be permanently reinvested in certain foreign subsidiaries and foreign corporate joint ventures totaled approximately $ 4,975 million.

1 unchanged sentence

The estimated amount of additional tax, primarily local withholding tax, that would be payable on this income if distributed is approximately $ 249 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 2023, 2022 and 2021:

10 unchanged sentences

Included in the balance of unrecognized tax benefits for 2023, 2022 and 2021 were $ 378 million, $ 701 million and $ 1,261 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.

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

The balance of the unrecognized tax benefits decreased in 2023 due to the lapsing of the statute of limitations on certain of our foreign subsidiaries of $ 224 million as well as the closing of our 2018 Canadian domestic audit that resulted in a reduction of $ 92 million.

The balance of the unrecognized tax benefits decreased in 2022 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.

1 unchanged sentence

tax credits acquired through our Concho acquisition.

See Note 3 and Not e 11.

See Note 3 and Note 11.

At December 31, 2023, 2022 and 2021, accrued liabilities for interest and penalties totaled $ 45 million, $ 35 million and $ 47 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.

Interest and penalties resulted in a reduction to earnings of $ 10 million in 2023, an increase of $ 12 million in 2022 and a reduction to earnings of $ 1 million in 2021.

We file tax returns in the U.S.

16 unchanged sentences

effective tax rates 2,063 3,866 1,915 12.7 13.7 15.1

Australia disposition — — ( 349 ) — — 11.1

Recovery of outside basis ( 4 ) ( 30 ) ( 55 ) — ( 0.1 ) ( 0.4 )

5 unchanged sentences

Total $ 5,331 9,548 4,633 32.7 % 33.8 36.4

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Our effective tax rate for 2023 was driven by our jurisdictional tax rates for this profit mix with a favorable impact from routine tax credits.

The adjustment to tax reserves primarily relates to the lapsing of the statute of limitations on certain of our foreign subsidiaries and the closing of the 2018 Canadian domestic audit.

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.

6 unchanged sentences

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.

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

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:

Based upon our current analysis, these law changes are not expected to have a material impact to our consolidated financial statements.

Note 18—Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) in the equity section of the balance sheet included:

Millions of Dollars

Benefit Plans Net

Benefit Plans Net Unrealized

Holding Gain/(Loss)

on Securities Foreign

Translation Accumulated

Translation Unrealized Gain/(Loss) on Hedging Activities Accumulated

Comprehensive

Income/(Loss)

December 31, 2020 $ ( 425 ) 2 ( 4,795 ) — ( 5,218 )

5 unchanged sentences

December 31, 2023 $ ( 393 ) 2 ( 5,344 ) 62 ( 5,673 )

The following table summarizes reclassifications out of accumulated other comprehensive loss during the years ended December 31:

The following table summarizes reclassifications out of accumulated other comprehensive income (loss) during the years ended December 31:

Millions of Dollars

Defined Benefit Plans* $ 33 26

Above amounts are included in the computation of net periodic benefit cost and are presented net of tax expense of:

*Included in the computation of net periodic benefit cost and are presented net of tax expense of:

ConocoPhillips 2023 10-K

3 unchanged sentences

2023 2022 2021

Noncash Investing Activities

Noncash Investing and Financing Activities

Increase (decrease) in PP&E related to an increase (decrease) in asset retirement obligations $ 727 825 442

Fair value of contingent consideration on acquisition 320

Cash Payments

7 unchanged sentences

$ 1,373 ( 2,629 ) 3,091

Income tax payments have increased in 2022 as the company is returning to a tax paying position in the U.S.

Income tax payments increased in 2022 as the company returned 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.

For additional information on cash and non-cash changes to our consolidated balance sheet, see Note 3 and Note 13 for the Surmont acquisition and see Note 3 and Note 12 for the Concho acquisition.

ConocoPhillips 2023 10-K

8 unchanged sentences

Expensed $ 780 805 884

Other Income (Loss)

Interest income $ 412 195 33

22 unchanged sentences

Net properties, plants and equipment $ 70,044 64,866

*Excludes assets classified as held for sale at December 31, 2021.

ConocoPhillips 2023 10-K

9 unchanged sentences

Operating expenses and selling, general and administrative expenses 282 189 196

Net interest income* ( 1 ) ( 2 ) ( 5 )

Net interest (income)/loss* — ( 1 ) ( 2 )

*We paid interest to, or received interest from, various affiliates.

15 unchanged sentences

2023 2022 2021

Revenue from Outside the Scope of ASC Topic 606

Revenue from Contracts Outside the Scope of ASC Topic 606

Lower 48 $ 6,607 13,919 9,050

4 unchanged sentences

2023 2022 2021

Revenue from Outside the Scope of ASC Topic 606

Revenue from Contracts Outside the Scope of ASC Topic 606

Crude oil $ 143 495 757

19 unchanged sentences

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

Revenue recognized during the year ended December 31, 2023 was immaterial .

We expect to recognize the outstanding contract liabilities of $ 26 million as of December 31, 2023, as revenue during the years 2026, 2028 and 2029.

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.

The following table presents the calculation of net income (loss) available to common shareholders and basic and diluted EPS for the years ended December 31, 2023, 2022, and 2021.

For each of the periods with net income presented in the table below, diluted EPS calculated under the two-class method was more dilutive.

2 unchanged sentences

Basic earnings per share

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

Net Income (Loss) $ 10,957 18,680 8,079

Dividends and undistributed earnings

2 unchanged sentences

Average common shares outstanding (in Millions) 1,203 1,274 1,324

Net Income (Loss) Attributable to ConocoPhillips Per Share

of Common Stock $ 14.62 6.09 ( 2.51 )

Net Income (Loss) Per Share of Common Stock $ 9.08 14.62 6.09

Diluted earnings per share

4 unchanged sentences

Average diluted shares outstanding (in Millions) 1,206 1,278 1,328

Net Income (Loss) Attributable to ConocoPhillips Per Share

of Common Stock $ 14.57 6.07 ( 2.51 )

Net Income (Loss) Per Share of Common Stock $ 9.06 14.57 6.07

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Note 24—Segment Disclosures and Related Information

6 unchanged sentences

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 .

We evaluate performance and allocate resources based on net income (loss).

Segment accounting policies are the same as those in Note 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

3 unchanged sentences

Alaska 7,098 7,905 5,480

Intersegment eliminations — — ( 11 )

Alaska 7,905 5,480 3,397

Lower 48 38,244 52,921 29,306

11 unchanged sentences

Consolidated sales and other operating revenues $ 56,141 78,494 45,828

The market for our products is large and diverse, therefore, our sales and other operating revenues are not dependent upon any single customer.

In 2023, sales by our Lower 48 segment to a certain pipeline company accounted for approximately $ 5.8 billion or approximately 10 percent of our total consolidated sales and other operating revenues.

Millions of Dollars

9 unchanged sentences

Consolidated depreciation, depletion, amortization and impairments $ 8,284 7,492 7,882

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Millions of Dollars

2023 2022 2021

Equity in Earnings of Affiliates

6 unchanged sentences

Consolidated equity in earnings of affiliates $ 1,720 2,081 832

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Millions of Dollars

2022 2021 2020

Income Tax Provision (Benefit)

7 unchanged sentences

Consolidated income tax provision (benefit) $ 5,331 9,548 4,633

Net Income (Loss) Attributable to ConocoPhillips

Net Income (Loss)

Alaska $ 1,778 2,352 1,386

5 unchanged sentences

Corporate and Other ( 821 ) ( 330 ) ( 210 )

Consolidated net income (loss) attributable to ConocoPhillips $ 18,680 8,079 ( 2,701 )

Consolidated net income (loss) $ 10,957 18,680 8,079

Investments in and Advances to Affiliates

6 unchanged sentences

Consolidated investments in and advances to affiliates $ 7,905 7,493 6,701

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Millions of Dollars

2023 2022 2021

Alaska $ 16,174 15,126 14,812

6 unchanged sentences

Consolidated total assets $ 95,924 93,829 90,661

ConocoPhillips 2022 10-K

Notes to Consolidated Financial Statements Table of Contents

Millions of Dollars

2022 2021 2020

Capital Expenditures and Investments

23 unchanged sentences

Consolidated sales and other operating revenues by product $ 56,141 78,494 45,828

*Includes LNG and bitumen.

*Includes bitumen and power.

ConocoPhillips 2023 10-K

Notes to Consolidated Financial Statements Table of Contents

Geographic Information

3 unchanged sentences

2023 2022 2021 2023 2022 2021

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

$ 45,101 60,899 34,847 53,955 51,200 50,580

Australia — — — 5,426 6,158 5,579

Canada 3,006 3,714 2,494 9,666 6,269 6,608

5 unchanged sentences

Norway 2,408 3,415 2,563 4,489 4,369 4,681

United Kingdom 6,273 2,236 336 1 1 1

1,978 6,273 2,236 2 1 1

Other foreign countries 5 5 8 1,134 1,003 748

3 unchanged sentences

(3) Assets divested in 2022.

Note 25—New Accounting Standards

In November 2023, the FASB issued ASU No.

2023-07, “Improvements to Reportable Segment Disclosures” which sets forth improvements to the current segment disclosure requirements in accordance with Topic 280 “Segment Reporting”.

The amendments do not change how we identify our operating segments.

On adoption, the disclosure improvements will be applied retrospectively to prior periods presented.

The ASU is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024 and early adoption is permitted.

We are currently evaluating the impact of the adoption of this ASU.

In December 2023, the FASB issued ASU No.

2023-09, “Improvements to Income Tax Disclosures” which enhances the disclosure requirements within Topic 740 “Income Taxes”.

The enhancements will impact our financial statement disclosures only and will be applied prospectively with retrospective application permitted.

The ASU is effective for annual periods beginning after December 15, 2024 and early adoption is permitted.

We are currently evaluating the impact of the adoption of this ASU.

ConocoPhillips 2023 10-K

28 unchanged sentences

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.

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 unit's 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.

22 unchanged sentences

Middle East Africa Total

Consolidated Equity

Consolidated Operations Equity

Affiliates* Total

26 unchanged sentences

Middle East Africa Total

Consolidated Equity

Consolidated Operations Equity

Affiliates* Total

Consolidated operations

End of 2020 765 263 1,028 6 129 77 175 1,415 68 1,483

2 unchanged sentences

End of 2023 790 793 1,583 7 109 91 181 1,971 54 2,025

Consolidated operations

End of 2020 114 430 544 — 45 31 16 636 — 636

7 unchanged sentences

• Revisions :

In 2023, upward revisions in Lower 48 were due to development drilling of 161 million barrels and technical revisions in the unconventional plays of 31 million barrels, partially offset by downward revisions of 52 million barrels due to lower prices and 14 million barrels for changes in development plans.

An upward revision of 10 million barrels in Africa was primarily development drilling in Libya.

Upward revisions of 8 million barrels in the consolidated operations in Asia Pacific/Middle East were due to technical revisions.

In Alaska, where future production is constrained by the Trans-Alaska Pipeline System minimum flow limit, updated total North Slope development phasing indicated that the flow limit will be reached earlier than previously premised, resulting in downward revisions of 25 million barrels.

Further downward revisions in Alaska include development plan changes of 14 million barrels, cost escalation of 13 million barrels, and 7 million barrels due to lower prices, partially offset by 2 million barrels of technical 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.

5 unchanged sentences

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 :

2 unchanged sentences

• Extensions and discoveries :

In 2023, extensions and discoveries in Alaska were driven primarily by the Willow and Nuna projects.

Lower 48 extensions and discoveries were primarily within unconventional plays in the Permian Basin.

Extensions and discoveries in Canada and Asia Pacific/Middle East were driven primarily by Montney and Bohai Phase 4B in China, respectively.

In 2022, extensions and discoveries in Lower 48 were primarily within unconventional plays in the Permian Basin.

1 unchanged sentence

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 2023 10-K

3 unchanged sentences

Canada Europe Asia Pacific/

Middle East Total Consolidated Equity Affiliates* Total

Middle East Total Consolidated Operations Equity Affiliates* Total

Developed and Undeveloped

Consolidated operations

End of 2020 94 230 324 4 12 — 340 36 376

23 unchanged sentences

Canada Europe Asia Pacific/

Middle East Total Consolidated Equity Affiliates* Total

Consolidated operations

Middle East Total Consolidated Operations Equity Affiliates* Total

End of 2020 94 83 177 4 9 — 190 36 226

2 unchanged sentences

End of 2023 72 426 498 4 9 — 511 28 539

Consolidated operations

End of 2020 — 147 147 — 3 — 150 — 150

7 unchanged sentences

• 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.

In 2023, upward revisions in Lower 48 were due to additional development drilling in the unconventional plays of 86 million barrels and technical revisions of 71 million barrels.

This was partially offset by lower prices impacting 34 million barrels and development plan changes of 4 million barrels.

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 NGLs) 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.

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 NGLs) 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.

• Purchases :

2 unchanged sentences

In 2023, extensions and discoveries in Lower 48 were primarily within unconventional plays in the Permian Basin.

Canada extensions and discoveries were in Montney.

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 2023 10-K

3 unchanged sentences

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Middle East Africa Total Consolidated Operations Equity Affiliates* Total

Developed and Undeveloped

Consolidated operations

End of 2020 1,996 2,100 4,096 74 825 851 224 6,070 3,724 9,794

23 unchanged sentences

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Consolidated operations

Middle East Africa Total Consolidated Operations Equity Affiliates* Total

End of 2020 1,961 1,051 3,012 74 598 806 224 4,714 3,293 8,007

2 unchanged sentences

End of 2023 2,156 2,525 4,681 92 591 305 172 5,841 3,558 9,399

Consolidated operations

End of 2020 35 1,049 1,084 — 227 45 — 1,356 431 1,787

13 unchanged sentences

• Revisions :

In 2023, upward revisions in Lower 48 were due to additional development drilling in the unconventional plays of 502 BCF, technical revisions of 268 BCF, partly offset by lower prices of 211 BCF and development plan downward revisions of 38 BCF.

In Europe, technical revisions contributed 64 BCF and development drilling of 14 BCF, partially offset by lower prices of 5 BCF.

In Canada, upward revisions were driven by technical revisions of 37 BCF, partially offset by lower prices of 10 BCF.

Further downward revisions in Alaska included 72 BCF from operating efficiencies resulting in less gas to be consumed in operations, 22 BCF due to lower prices, 14 BCF from cost escalation, and 14 BCF due to technical revisions.

Downward revisions in Africa of 57 BCF due to infrastructure constraints and sales demand revisions.

In our equity affiliates, downward revisions were due to lower prices of 288 BCF, offset by upward technical revisions of 198 BCF.

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.

10 unchanged sentences

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 :

2 unchanged sentences

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 2023, extensions and discoveries in Lower 48 were primarily within unconventional plays in the Permian Basin.

Canada extensions and discoveries were in Montney.

Extensions and discoveries in our equity affiliates were in Australia.

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.

2 unchanged sentences

Extensions and discoveries in Canada were primarily driven by ongoing drilling successes in Montney.

In 2023, Lower 48 sales represent the disposition of noncore assets.

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 2023 10-K

2 unchanged sentences

Millions of Barrels

Canada Total Consolidated Equity Affiliates* Total

Canada Total*

Developed and Undeveloped

Consolidated operations

End of 2020 332 332

4 unchanged sentences

Production (25) (25)

Sales — — — —

End of 2021 257 257

4 unchanged sentences

Production (24) (24)

Sales — — — —

End of 2022 216 216

4 unchanged sentences

Production (30) (30)

Sales — — — —

End of 2023 410 410

1 unchanged sentence

Millions of Barrels

Canada Total Consolidated Equity Affiliates* Total

Consolidated operations

Canada Total*

End of 2020 117 117

2 unchanged sentences

End of 2023 293 293

Consolidated operations

End of 2020 215 215

2 unchanged sentences

End of 2023 117 117

*All Equity Affiliate reserves are located in our Asia Pacific/Middle East Region.

ConocoPhillips 2022 10-K

Supplementary Data Table of Contents

*There are no Bitumen reserves associated with our Equity Affiliates.

Notable changes in proved bitumen reserves in the three years ended December 31, 2023, included:

• Revisions :

In 2023, the upward revision of 15 million barrels is primarily due to the impact of price on variable royalties.

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.

In 2023, purchases in Canada were a result of the acquisition of the remaining 50 percent working interest in Surmont.

• 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 2023 10-K

3 unchanged sentences

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Middle East Africa Total Consolidated Operations Equity Affiliates* Total

Developed and Undeveloped

Consolidated operations

End of 2020 1,306 1,273 2,579 355 323 249 228 3,734 725 4,459

23 unchanged sentences

Canada Europe Asia Pacific/

Middle East Africa Total Consolidated Equity Affiliates* Total

Consolidated operations

Middle East Africa Total Consolidated Operations Equity Affiliates* Total

End of 2020 1,186 521 1,707 140 238 211 212 2,508 653 3,161

2 unchanged sentences

End of 2023 1,222 1,639 2,861 320 216 142 210 3,749 675 4,424

Consolidated operations

End of 2020 120 752 872 215 85 38 16 1,226 72 1,298

17 unchanged sentences

End of 2023 2,334

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.

Revisions of 354 MMBOE were predominately driven by progression of development plans in the Lower 48 unconventional plays partially offset by 23 MMBOE due to product price changes across the portfolio.

Extensions and discoveries were largely driven by the addition of 219 MMBOE in Alaska, primarily due to Willow and Nuna projects, 44 MMBOE in the Lower 48 unconventional plays and 39 MMBOE in Canada for Montney development.

The remaining extensions and discoveries were driven by the continued development planned in the other geographic regions, including 10 MMBOE from equity affiliates in Asia Pacific/Middle East.

Transfers to proved developed reserves were driven by the ongoing development of our assets.

5 unchanged sentences

At the end of 2023, approximately 86 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.

Increases in 2023 to PUDs scheduled for development beyond five years are primarily in Alaska, due to the initial recognition of PUDs associated with the Willow project, a development that is currently underway with production anticipated in 2029 due to its large scale and remote location.

The remaining PUDs to be developed beyond five years are in major development areas which are currently producing and located within our Canada and Asia Pacific/Middle East geographic areas.

Results of Operations

166 unchanged sentences

*At year-end 2023, 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.

At year-end 2021, the Greater Prudhoe Area in Alaska contained more than 15 percent of our total proved reserves.

ConocoPhillips 2023 10-K

20 unchanged sentences

Europe 41.13 54.52 43.97

Asia Pacific — — 33.21

Total international 34.56 46.16 37.50

17 unchanged sentences

Total operations 5.69 10.60 5.77

*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.

*Average sales prices for Alaska crude oil above reflects 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.

272 unchanged sentences

Discounted future net cash flows $ 10,160 $ 33,320 $ 43,480 $ 3,208 $ 2,579 $ 7,810 $ 618 $ 57,695

*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 2023 10-K

26 unchanged sentences

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