Item 1. Financial Statements

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Item 1. Financial Statements


Consolidated Income Statement			ConocoPhillips


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025
Revenues and other income
Sales and other operating revenues	$	19,161	14,004	34,922	30,521
Equity in earnings of affiliates	239		315	486	707
Gain (loss) on dispositions	14		317	19	396
Other income	108		104	149	217
Total revenues and other income	19,522		14,740	35,576	31,841
Costs and expenses
Purchased commodities	6,712		5,085	12,995	11,273
Production and operating expenses	2,431		2,572	4,707	5,078
Selling, general and administrative expenses	188		250	381	441
Exploration expenses	75		81	184	198
Depreciation, depletion and amortization	2,983		2,838	5,889	5,584
Impairments	2		1	21	2
Taxes other than income taxes	793		572	1,400	1,123
Accretion on discounted liabilities	99		95	196	189
Interest and debt expense	182		232	380	437
Foreign currency transaction (gain) loss	(25)		(3)	(25)	27
Other expenses	—		—	3	6
Total costs and expenses	13,440		11,723	26,131	24,358
Income (loss) before income taxes	6,082		3,017	9,445	7,483
Income tax provision (benefit)	2,151		1,046	3,331	2,663


Net income (loss)	$	3,931	1,971	6,114	4,820

Net income (loss) per share of common stock (dollars)
Basic	$	3.23	1.56	5.00	3.80
Diluted	3.23		1.56	5.00	3.79
Weighted-average common shares outstanding (in thousands)
Basic	1,213,453		1,257,512	1,218,715	1,265,387
Diluted	1,214,255		1,258,998	1,219,492	1,266,815

See Notes to Consolidated Financial Statements.


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Financial Statements			Table of Contents


Consolidated Statement of Comprehensive Income			ConocoPhillips


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025
Net income (loss)	$	3,931	1,971	6,114	4,820
Other comprehensive income (loss), net of tax:








Defined benefit plans	32		6	16	13



Unrealized holding gain (loss) on securities	(4)		2	(10)	4


Foreign currency translation adjustments	(176)		484	(271)	554



Other comprehensive income (loss), net of tax	(148)		492	(265)	571


Comprehensive income (loss)	$	3,783	2,463	5,849	5,391

See Notes to Consolidated Financial Statements.


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Financial Statements			Table of Contents


Consolidated Balance Sheet			ConocoPhillips


	Millions of Dollars
	June 30 2026		December 31 2025
Assets
Cash and cash equivalents	$	6,574	6,497
Short-term investments	1,118		484
Accounts and notes receivable, net	6,957		5,813



Inventories	1,879		1,873
Prepaid expenses and other current assets	2,667		865
Total current assets	19,195		15,532
Investments and long-term receivables	10,345		10,185

Net properties, plants and equipment (net of accumulated DD&A of $95,966 and $90,396, respectively)	91,248		93,239
Other assets	3,473		2,983
Total assets	$	124,261	121,939

Liabilities
Accounts payable	$	6,764	6,218


Short-term debt	462		1,020
Accrued income and other taxes	2,540		1,835
Employee benefit obligations	593		1,136
Other accruals	2,093		1,763
Total current liabilities	12,452		11,972
Long-term debt	22,828		22,424
Asset retirement obligations and accrued environmental costs	8,404		8,214
Deferred income taxes	12,387		12,237
Employee benefit obligations	933		969
Other liabilities and deferred credits	1,908		1,636
Total liabilities	58,912		57,452

Equity
Common stock (2,500,000,000 shares authorized at $0.01 par value)
Issued (2026—2,255,963,919 shares; 2025—2,253,518,282 shares)
Par value	23		23
Capital in excess of par	77,832		77,728
Treasury stock (at cost: 2026—1,054,626,440 shares; 2025—1,028,350,186 shares)	(79,251)		(76,217)
Accumulated other comprehensive income (loss)	(6,176)		(5,911)
Retained earnings	72,921		68,864
Total equity	65,349		64,487
Total liabilities and equity	$	124,261	121,939

See Notes to Consolidated Financial Statements.


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Financial Statements			Table of Contents


Consolidated Statement of Cash Flows			ConocoPhillips


	Millions of Dollars
	Six Months Ended June 30
	2026		2025
Cash flows from operating activities
Net income (loss)	$	6,114	4,820
Adjustments to reconcile net income (loss) to net cash provided by operating activities
Depreciation, depletion and amortization	5,889		5,584
Impairments	21		2
Dry hole costs and leasehold impairments	56		85
Accretion on discounted liabilities	196		189
Deferred taxes	149		78
Distributions more (less) than income from equity affiliates	110		(112)
(Gain) loss on dispositions	(19)		(396)

Other	47		(62)
Working capital adjustments
Decrease (increase) in accounts and notes receivable	(1,085)		973
Decrease (increase) in inventories	(19)		(84)
Decrease (increase) in prepaid expenses and other current assets	(288)		(229)
Increase (decrease) in accounts payable	331		(27)
Increase (decrease) in taxes and other accruals	227		(1,221)
Net cash provided by operating activities	11,729		9,600
Cash flows from investing activities
Capital expenditures and investments	(5,972)		(6,664)
Working capital changes associated with investing activities	154		551

Proceeds from asset dispositions	190		1,341
Net sales (purchases) of investments	(652)		(8)

Other	(39)		(27)
Net cash used in investing activities	(6,319)		(4,807)
Cash flows from financing activities

Repayment of debt	(175)		(806)
Issuance of company common stock	(39)		(55)
Repurchase of company common stock	(3,006)		(2,722)
Dividends paid	(2,057)		(1,982)
Other	(79)		(55)
Net cash used in financing activities	(5,356)		(5,620)
Effect of exchange rate changes on cash, cash equivalents and restricted cash	(5)		148
Net change in cash, cash equivalents and restricted cash	49		(679)
Cash, cash equivalents and restricted cash at beginning of period	6,916		5,905
Cash, cash equivalents and restricted cash at end of period	$	6,965	5,226

Restricted cash of $65 million is included in the "Prepaid expenses and other current assets" line of our Consolidated Balance Sheet at December 31, 2025.

Restricted cash of $391 million and $354 million is included in the "Other assets" line of our Consolidated Balance Sheet at June 30, 2026, and December 31, 2025, respectively.

See Notes to Consolidated Financial Statements.


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Notes to Consolidated Financial Statements			Table of Contents

Notes to Consolidated Financial Statements

Note 1—Basis of Presentation

The interim-period financial information presented in the financial statements included in this report is unaudited and, in the opinion of management, includes all known accruals and adjustments necessary for a fair presentation of the consolidated financial position of ConocoPhillips, its results of operations and cash flows for such periods. All such adjustments are of a normal and recurring nature, unless otherwise disclosed. Certain notes and other information have been condensed or omitted from the interim financial statements included in this report; therefore, these financial statements should be read in conjunction with the consolidated financial statements and notes included in our 2025 Annual Report on Form 10-K. Certain prior year financial statement line items have been reclassified to conform to the current year presentation.

Note 2—Inventories


	Millions of Dollars
	June 30 2026		December 31 2025
Crude oil and products	$	1,021	1,000
Materials and supplies	858		873
Total inventories	$	1,879	1,873

Inventories valued on the LIFO basis	$	594	609

Note 3—Acquisitions and Dispositions

Assets Held for Sale

In the second quarter of 2026, we entered into agreements to sell our interests in certain noncore assets in the Lower 48 segment for approximately $1.7 billion, subject to customary closing adjustments. The transactions met held for sale criteria in the second quarter of 2026. The associated disposal group that met these criteria had a net carrying value of approximately $1.5 billion, comprised primarily of PP&E and as of June 30, 2026, is included in "Prepaid expenses and other current assets" on our consolidated balance sheet. These transactions closed in the third quarter of 2026.

Planned Acquisitions

In July 2026, we entered into an agreement with a wholly owned subsidiary of BP p.l.c. (bp) to acquire a 42 percent direct equity holding in a non-operated joint venture, supporting the ongoing redevelopment of four large-scale, currently producing oil fields in the Kirkuk area of northern Iraq. This transaction is expected to close by the end of 2026, subject to regulatory approvals and other customary closing conditions, with an effective date of July 1, 2026. The purchase price is $0.4 billion, before closing adjustments, and includes deferred payments of $0.2 billion payable no later than three years from the date of close. The closing adjustments will include reimbursement of our proportionate share of bp's project costs incurred from the effective date of the agreement through close.

Note 4—Suspended Wells and Exploration Expenses

The capitalized cost of suspended wells at June 30, 2026 was $347 million, an increase of $104 million from December 31, 2025. The increase was primarily due to multiple wells drilled in Alaska.


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Notes to Consolidated Financial Statements			Table of Contents

Note 5—Debt

Our debt balance at June 30, 2026, was $23.3 billion, compared with $23.4 billion at December 31, 2025.

In the first quarter of 2026, the company retired $67 million principal amount of our 6.875% Notes at maturity.

At June 30, 2026, we had $283 million of certain variable rate demand bonds (VRDBs) outstanding, with maturities ranging through 2035. The VRDBs are redeemable at the option of the bondholders on any business day. If they are ever redeemed, we have the ability and intent to refinance them on a long-term basis; therefore, the VRDBs are included in the “Long-term debt” line on our consolidated balance sheet.

Municipal Bonds Remarketing

On July 1, 2026, we completed a $600 million remarketing of sub-series 2017D bonds that are part of the $1 billion St. John the Baptist Parish, State of Louisiana—Revenue Refunding Bonds Series 2017. The bonds are subject to an interest rate of 3.0% and a mandatory tender date of July 2, 2029.

Subsequent to the mandatory tender date, we will also have the right to remarket these bonds at any time up to the 2037 maturity date. At June 30, 2026, these bonds were included in the “Long-term debt” line on our consolidated balance sheet.

Note 6—Investments and Long-Term Receivables

Australia Pacific LNG Pty Ltd. (APLNG)

In Australia, we hold a 47.5 percent shareholding interest in APLNG. At June 30, 2026, the outstanding balance of APLNG's debt was $3.1 billion. The last principal and interest payment on the debt is due in September 2032. See Note 7.

At June 30, 2026, the carrying value of our equity method investment in APLNG was approximately $4.8 billion.

Port Arthur LNG (PALNG)

We hold a 30 percent direct equity investment in PALNG, a joint venture for the development of a large-scale LNG facility.

At June 30, 2026, the carrying value of our equity method investment in PALNG was approximately $1.7 billion.

Qatar LNG

Our equity method investments in Qatar include the following:

QatarEnergy LNG N(3) (N3)—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.
QatarEnergy LNG NFE(4) (NFE4)—25 percent owned joint venture with affiliates of QatarEnergy (70 percent) and China National Petroleum Corporation (5 percent)—participant in the North Field East LNG project.
QatarEnergy LNG NFS(3) (NFS3)—25 percent owned joint venture with an affiliate of QatarEnergy (75 percent)—participant in the North Field South LNG project.

At June 30, 2026, the carrying value of our equity method investments in Qatar was approximately $1.9 billion. See Note 7.

Note 7—Guarantees

At June 30, 2026, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability because the fair value of the obligation is immaterial. In addition, unless otherwise stated, we are not currently performing with any significance under the guarantee and expect future performance to be either immaterial or have only a remote chance of occurrence.

APLNG Guarantees

We have multiple outstanding guarantees in connection with our 47.5 percent ownership interest in APLNG. These guarantees have remaining terms of seven to 19 years, and the maximum potential future payments related to these guarantees are approximately $1,650 million. At June 30, 2026, the carrying value of these guarantees was approximately $49 million.


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Notes to Consolidated Financial Statements			Table of Contents

QatarEnergy LNG Guarantees

We have guaranteed our portion of certain fiscal and other joint venture obligations as a shareholder in NFE4 and NFS3. These guarantees have an approximate 30-year term with no maximum limit. At June 30, 2026, the carrying value of these guarantees was approximately $14 million.

Equatorial Guinea Guarantees

We have guaranteed payment obligations as a shareholder in both Equatorial Guinea LNG Operations, S.A., a fully owned subsidiary of Equatorial Guinea LNG Holdings Limited, and Alba Plant LLC with regard to certain agreements to process third-party gas. These guarantees have approximately two years remaining, and the maximum potential future payments related to these guarantees are approximately $116 million. At June 30, 2026, the carrying value of these guarantees was approximately $4 million.

Other Guarantees

We have other guarantees with maximum future potential payment amounts totaling approximately $560 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 one 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 June 30, 2026, there was no liability recognized for these guarantees.

Indemnifications

Over the years, we have entered into agreements to sell ownership interests in certain legal entities, joint ventures and assets that gave rise to qualifying indemnifications. These agreements include indemnifications for taxes and environmental liabilities. The carrying amount recorded for these indemnification obligations at June 30, 2026, was approximately $30 million. Those related to environmental issues have terms that are generally indefinite, and the maximum amounts of future payments are generally unlimited. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. See Note 8 **for additional information about environmental liabilities.

Note 8—Contingencies, Commitments and Accrued Environmental Costs

A number of lawsuits involving a variety of claims arising in the ordinary course of business have been filed against ConocoPhillips. We also may be required to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various active and inactive sites. We regularly assess the need for accounting recognition or disclosure of these contingencies. In the case of all known contingencies (other than those related to income taxes), we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the low end of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. We accrue receivables for insurance or other third-party recoveries when applicable. With respect to income tax-related contingencies, we use a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

Based on currently available information, we believe it is remote that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements. As we learn new facts concerning contingencies, we reassess our position both with respect to accrued liabilities and other potential exposures. Estimates particularly sensitive to future changes include contingent liabilities recorded for environmental remediation, tax and legal matters. Estimated future environmental remediation costs are subject to change due to such factors as the uncertain magnitude of cleanup costs, the unknown time and extent of such remedial actions that may be required and the determination of our liability in proportion to that of other responsible parties. Estimated future costs related to tax and legal matters are subject to change as events evolve and as additional information becomes available during the administrative and litigation processes.

Environmental

We are subject to international, federal, state and local environmental laws and regulations and record accruals for environmental liabilities based on management’s best estimates. These estimates are based on currently available facts, existing technology and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience and data released by the U.S. EPA or other organizations. We


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Notes to Consolidated Financial Statements			Table of Contents

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

Although liability of those potentially responsible for environmental remediation costs is generally joint and several for federal sites and frequently so for other sites, we are usually only one of many companies cited at a particular site. Due to the joint and several liabilities, we could be responsible for all cleanup costs related to any site at which we have been designated as a potentially responsible party. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites at which we are potentially responsible are still under investigation by the U.S. EPA or the agency concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability, and we adjust our accruals accordingly. As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit, and some of the indemnifications are subject to dollar limits and time limits.

We are currently participating in environmental assessments and cleanups at numerous federal Superfund and other comparable state and international sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except those acquired in a business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable future costs will be incurred and these costs can be reasonably estimated. We have not reduced these accruals for possible insurance recoveries.

For remediation activities in the U.S. and Canada, our consolidated balance sheet included total accrued environmental costs of $306 million at June 30, 2026, compared with $220 million at December 31, 2025. We expect to incur a substantial amount of these expenditures within the next 30 years. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.

Litigation and Other Contingencies

We are subject to various lawsuits and claims including, but not limited to, matters involving oil and gas royalty and severance tax payments, gas measurement and valuation methods, contract disputes, environmental damages, climate change, personal injury and property damage. Our primary exposures for such matters relate to alleged royalty and tax underpayments on certain federal, state and privately owned properties, claims of alleged environmental contamination and damages from historic operations and climate change. We will continue to defend ourselves vigorously in these matters.

Our legal organization applies its knowledge, experience and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases that have been scheduled for trial and/or mediation. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization regularly assesses the adequacy of current accruals and determines if adjustment of existing accruals, or establishment of new accruals, is required.

We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not utilized. In addition, at June 30, 2026, we had performance obligations secured by letters of credit of $295 million (issued as direct bank letters of credit) related to various purchase commitments for materials, supplies, commercial activities and services incident to the ordinary conduct of business.

In 2007, the government of Venezuela expropriated ConocoPhillips’ interests in the Petrozuata and Hamaca heavy oil ventures, as well as the offshore Corocoro development project. In response, ConocoPhillips initiated international arbitration proceedings before the ICSID. In March 2019, an ICSID tribunal unanimously ordered the government of Venezuela to pay ConocoPhillips approximately $8.7 billion (later reduced to $8.5 billion) plus interest for the unlawful expropriation of the projects. On January 22, 2025, an ICSID annulment committee dismissed Venezuela’s application to annul the tribunal’s decision and upheld the $8.5 billion award plus interest in full. Separate arbitrations before the ICC resulted in additional awards against Petróleos de Venezuela, S.A. and three of its affiliates, including an award for


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Notes to Consolidated Financial Statements			Table of Contents

approximately $2 billion, plus interest, for the Petrozuata and Hamaca projects and a $33 million award for the Corocoro project, plus interest. Cumulatively, as of June 30, 2026, the company has received approximately $795 million in connection with the first ICC award. Collection actions for all three awards are ongoing. ConocoPhillips has ensured that all actions related to these arbitration awards meet all appropriate U.S. regulatory requirements, including those related to any applicable sanctions imposed by the U.S. against Venezuela.

Beginning in 2017, governmental entities and individuals in several states/territories in the U.S. have filed lawsuits against oil and gas companies, including ConocoPhillips, seeking compensatory damages and equitable relief to abate alleged climate change related impacts. Additional lawsuits with similar allegations are expected to be filed. The legal and factual issues are unprecedented; therefore, there is significant uncertainty about the scope of the claims and alleged damages and any potential impact on the company’s financial condition. ConocoPhillips believes these lawsuits are factually and legally meritless and are an inappropriate vehicle to address the challenges associated with climate change and will vigorously defend against such lawsuits.

In October 2020, the Bureau of Safety and Environmental Enforcement (BSEE) ordered the prior owners of Outer Continental Shelf (OCS) Lease P-0166, including ConocoPhillips, to decommission the lease facilities, including two offshore platforms located near Carpinteria, California. This order was sent after the current owner of OCS Lease P-0166 relinquished the lease and abandoned the lease platforms and facilities. BSEE’s order to ConocoPhillips is premised on its connection to Phillips Petroleum Company, a legacy company of ConocoPhillips, which held a historical 25 percent interest in this lease and operated these facilities but sold its interest approximately 30 years ago. On June 9, 2026, the Interior Board of Land Appeals issued an order upholding BSEE's order. ConocoPhillips intends to appeal the decision while it continues to evaluate its exposure in this matter.

In July 2021, a federal securities class action was filed against Concho Resources Inc. (Concho), certain of Concho’s officers, and ConocoPhillips as Concho’s successor in the United States District Court for the Southern District of Texas. On October 21, 2021, the court issued an order appointing Utah Retirement Systems and the Construction Laborers Pension Trust for Southern California as lead plaintiffs (Lead Plaintiffs). On January 7, 2022, the Lead Plaintiffs filed their consolidated complaint alleging that Concho made materially false and misleading statements regarding its business and operations in violation of the federal securities laws and seeking unspecified damages, attorneys’ fees, costs, equitable/injunctive relief and such other relief that may be deemed appropriate. 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. On April 7, 2025, the court certified a class. We believe the allegations in the action are without merit and are vigorously defending this litigation.

Note 9—Derivative and Financial Instruments

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

Commodity Derivative Instruments

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. Where these balances have the right of setoff, they are presented on a net basis. Related cash flows are recorded as operating activities on our consolidated statement of cash flows. On our consolidated income statement, gains and losses are recognized either on a gross basis if directly related to our physical business or on a net basis if held for trading. Gains and losses related to contracts that meet and are designated with the NPNS exception are recognized upon settlement. We generally apply this exception to eligible crude contracts and certain gas contracts. We do not apply hedge accounting for our commodity derivatives.


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Notes to Consolidated Financial Statements			Table of Contents

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


	Millions of Dollars
	June 30 2026		December 31 2025
Assets
Prepaid expenses and other current assets	$	1,095	491
Other assets	207		113
Liabilities
Other accruals	1,045		438
Other liabilities and deferred credits	188		100

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


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025

Sales and other operating revenues	$	99	25	258	84
Other income	(4)		1	(9)	(3)
Purchased commodities	(88)		(7)	(157)	(46)

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


	Open Position Long (Short)
	June 30 2026	December 31 2025
Commodity
Natural gas and power (BCF equivalent)
Fixed price	(43)	(15)
Basis	(23)	(17)

Interest Rate Derivative Instruments

Our equity method investee, PALNG, has certain interest rate swaps that are measured at fair value. The gains (losses) from these swaps included in our consolidated income statement are presented in the following table:


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025
Equity in earnings of affiliates	$	37	18	28	33


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Notes to Consolidated Financial Statements			Table of Contents

Financial Instruments

We invest in financial instruments with maturities based on our cash forecasts for the various accounts and currency pools we manage. The types of financial instruments in which we currently invest include:

Time deposits: Interest bearing deposits placed with financial institutions for a predetermined amount of time.
Demand deposits: Interest bearing deposits placed with financial institutions. Deposited funds can be withdrawn without notice.
Commercial paper: Unsecured promissory notes issued by a corporation, commercial bank or government agency purchased at a discount to mature at par.
U.S. government or government agency obligations: Securities issued by the U.S. government or U.S. government agencies.
Foreign government obligations: Securities issued by foreign governments.
Corporate bonds: Unsecured debt securities issued by corporations.
Asset-backed securities: Collateralized debt securities.

The following investments are carried on our consolidated balance sheet at cost plus accrued interest, and the table reflects remaining maturities at June 30, 2026, and December 31, 2025:


	Millions of Dollars
	Carrying Amount
	Cash and cash equivalents			Short-term investments
	June 30 2026		December 31 2025	June 30 2026	December 31 2025
Cash	$	504	543
Demand deposits	3,946		3,781
Time deposits
1 to 90 days	1,894		975	655	6
91 to 180 days				4	17
Within one year				4	8
U.S. government obligations
1 to 90 days	230		1,198	—	—
	$	6,574	6,497	663	31

The following investments in debt securities classified as available for sale are carried at fair value on our consolidated balance sheet at June 30, 2026, and December 31, 2025:


		Millions of Dollars
		Carrying Amount
	Short-term investments			Investments and long-term receivables
		June 30 2026		December 31 2025	June 30 2026	December 31 2025
Major Security Type
Corporate bonds		$	354	308	688	651
Commercial paper		54		72
U.S. government obligations		32		46	226	224
U.S. government agency obligations		—		—	1	1
Foreign government obligations		5		9	9	9
Asset-backed securities		10		18	234	263
		$	455	453	1,158	1,148

Cash and cash equivalents and short-term investments have remaining maturities within one year. Investments and long-term receivables have remaining maturities that vary from greater than one year through 12 years.


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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:


	Millions of Dollars
	Amortized Cost Basis			Fair Value
	June 30 2026		December 31 2025	June 30 2026	December 31 2025
Major Security Type
Corporate bonds	$	1,044	953	1,042	959
Commercial paper	54		72	54	72
U.S. government obligations	260		268	258	270
U.S. government agency obligations	1		1	1	1
Foreign government obligations	14		18	14	18
Asset-backed securities	244		280	244	281
	$	1,617	1,592	1,613	1,601

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

For the three- and six-month periods ended June 30, 2026, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $269 million and $478 million, respectively. For the three- and six-month periods ended June 30, 2025, proceeds from sales and redemptions of investments in debt securities classified as available for sale were $300 million and $511 million, respectively. Gross realized gains and losses included in earnings from those sales and redemptions were negligible. The cost of securities sold and redeemed is determined using the specific identification method.

Credit Risk

Financial instruments subject to concentrations of credit risk primarily include cash equivalents, short‑ and long‑term investments in high‑quality debt securities, OTC derivative contracts and trade receivables. Cash and investments are diversified across high‑quality commercial paper, government money market funds, U.S. government and agency obligations, high-quality corporate bonds and asset‑backed securities, foreign government obligations and deposits with major financial institutions. Credit risk from OTC derivatives is managed through counterparty credit limits, margining and collateral requirements, while exchange‑cleared derivatives carry minimal risk but expose us to broker receivables related to margin postings. Trade receivables are broadly diversified geographically, generally have short payment terms and are actively monitored with collateral and netting arrangements used where appropriate.

Certain of our derivative contracts require us to post collateral if exposure exceeds fixed or credit‑rating‑dependent thresholds, which generally decrease with lower ratings and fall to zero below investment grade, with cash as the primary form of collateral and letters of credit permitted in some cases. The aggregate fair value of all derivative instruments with such credit risk-related contingent features that were in a liability position at June 30, 2026, and December 31, 2025 was $78 million and $73 million, respectively. For these instruments, no collateral was posted at June 30, 2026, or December 31, 2025. If our credit rating had been downgraded below investment grade at June 30, 2026, we would have been required to post $39 million of additional collateral, either in cash or through letters of credit.


13			ConocoPhillips 2026 Q2 10-Q


Notes to Consolidated Financial Statements			Table of Contents

Note 10—Fair Value Measurement

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

The classification of an asset or liability is based on the lowest level of input significant to its fair value. Those that are initially classified as Level 3 are subsequently reported as Level 2 when the fair value derived from unobservable inputs is inconsequential to the overall fair value, or if corroborated market data becomes available. Assets and liabilities initially reported as Level 2 are subsequently reported as Level 3 if corroborated market data is no longer available. There were no material transfers into or out of Level 3 during the six-month period ended June 30, 2026, or during the year ended December 31, 2025.

Recurring Fair Value Measurement

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

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 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 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.
Level 3 derivative assets and liabilities consist of OTC swaps, options and forward purchase and sale contracts where a significant portion of fair value is calculated from underlying market data that is not readily available. The derived value uses industry standard methodologies that may consider the historical relationships among various commodities, modeled market prices, time value, volatility factors and other relevant economic measures. The use of these inputs results in management’s best estimate of fair value. Level 3 commodity derivative activity was not material for all periods presented.
Level 3 liabilities include the fair value of future quarterly contingent payments associated with the 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. The consideration for the acquisition included a contingent consideration arrangement requiring payment of up to $0.4 billion CAD over a five-year term. The contingent payments represented $2 million for every dollar that WCS pricing exceeded $52 per barrel during the month, subject to certain production targets being achieved. The amount we could pay under this arrangement was up to $0.3 billion USD at closing. The fair value of the liability under the agreement was nil at December 31, 2025. During the six-month period ended June 30, 2026, we made a final payment of $81 million USD under the contingent consideration arrangement, bringing cumulative payments since the acquisition date to $0.3 billion USD. Payments are included in the "Other" line within the financing activities section of our consolidated statement of cash flows.


			ConocoPhillips 2026 Q2 10-Q			14


Notes to Consolidated Financial Statements			Table of Contents

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


	Millions of Dollars
	June 30, 2026					December 31, 2025
	Level 1		Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
Assets
Investments in debt securities	$	258	1,355	—	1,613	270	1,331	—	1,601
Commodity derivatives	901		332	69	1,302	306	230	68	604
Total assets	$	1,159	1,687	69	2,915	576	1,561	68	2,205

Liabilities
Commodity derivatives	963		137	133	1,233	354	124	60	538

Total liabilities	$	963	137	133	1,233	354	124	60	538

The following table summarizes those commodity derivative balances subject to the right of setoff as presented on our consolidated balance sheet. We have elected to offset the recognized fair value amounts for multiple derivative instruments executed with the same counterparty in our financial statements when a legal right of setoff exists.


	Millions of Dollars
				Amounts Subject to Right of Setoff
	Gross Amounts Recognized		Amounts Not Subject to Right of Setoff	Gross Amounts	Gross Amounts Offset	Net Amounts Presented	Cash Collateral	Net Amounts
June 30, 2026
Assets	$	1,302	43	1,259	974	285	1	284
Liabilities	1,233		13	1,220	974	246	63	183

December 31, 2025
Assets	$	604	2	602	361	241	6	235
Liabilities	538		1	537	361	176	53	123

At June 30, 2026, and December 31, 2025, we did not present any amounts gross on our consolidated balance sheet where we had the right of setoff.


15			ConocoPhillips 2026 Q2 10-Q


Notes to Consolidated Financial Statements			Table of Contents

Reported Fair Values of Financial Instruments

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

Cash and cash equivalents and short-term investments: The carrying amount reported on the balance sheet approximates fair value. For those investments classified as available for sale debt securities, the carrying amount reported on the balance sheet is fair value.
Accounts and notes receivable (including long-term and related parties): The carrying amount reported on the balance sheet approximates fair value.
Investments in debt securities classified as available for sale: The fair value of investments in debt securities categorized as Level 1 in the fair value hierarchy is measured using exchange prices. The fair value of investments in debt securities categorized as Level 2 in the fair value hierarchy is measured using pricing provided by brokers or pricing service companies that are corroborated with market data. See Note 9.
Accounts payable (including related parties) and floating-rate debt: The carrying amount of accounts payable and floating-rate debt reported on the balance sheet approximates fair value.
Fixed-rate debt: The estimated fair value of fixed-rate debt is measured using prices available from a pricing service that is corroborated by market data; therefore, these liabilities are categorized as Level 2 in the fair value hierarchy.
Commercial paper: The carrying amount of our commercial paper instruments approximates fair value and is reported on the balance sheet as short-term debt.

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


	Millions of Dollars
	Carrying Amount			Fair Value
	June 30 2026		December 31 2025	June 30 2026	December 31 2025
Financial assets
Commodity derivatives	$	327	237	327	237
Investments in debt securities	1,613		1,601	1,613	1,601

Financial liabilities
Total debt, excluding finance leases	22,553		22,643	22,332	22,698
Commodity derivatives	196		124	196	124

Note 11—Accumulated Other Comprehensive Income (Loss)

Accumulated other comprehensive income (loss) in the equity section of our consolidated balance sheet includes:


	Millions of Dollars
	Defined Benefit Plans		Unrealized Holding Gain/(Loss) on Securities	Foreign Currency Translation	Unrealized Gain/(Loss) on Hedging Activities	Accumulated Other Comprehensive Income/(Loss)
December 31, 2025	$	(335)	8	(5,602)	18	(5,911)
Other comprehensive income (loss)	16		(10)	(271)	—	(265)
June 30, 2026	$	(319)	(2)	(5,873)	18	(6,176)


			ConocoPhillips 2026 Q2 10-Q			16


Notes to Consolidated Financial Statements			Table of Contents

Note 12—Changes in Equity


	Millions of Dollars

	Common Stock
	Par Value		Capital in Excess of Par	Treasury Stock	Accum. Other Comprehensive Income (Loss)	Retained Earnings	Total
For the three months ended June 30, 2026
Balances at March 31, 2026	$	23	77,761	(77,231)	(6,028)	70,016	64,541
Net income (loss)						3,931	3,931
Other comprehensive income (loss)					(148)		(148)

Dividend declared ($0.84 per common share)						(1,025)	(1,025)

Repurchase of company common stock				(2,000)			(2,000)
Excise tax on share repurchases				(20)			(20)
Distributed under benefit plans			71				71
Other						(1)	(1)
Balances at June 30, 2026	$	23	77,832	(79,251)	(6,176)	72,921	65,349

For the six months ended June 30, 2026
Balances at December 31, 2025	$	23	77,728	(76,217)	(5,911)	68,864	64,487
Net income (loss)						6,114	6,114
Other comprehensive income (loss)					(265)		(265)

Dividends declared ($1.68 per common share)						(2,057)	(2,057)

Repurchase of company common stock				(3,006)			(3,006)
Excise tax on share repurchases				(27)			(27)
Distributed under benefit plans			104				104
Other				(1)			(1)
Balances at June 30, 2026	$	23	77,832	(79,251)	(6,176)	72,921	65,349



	Millions of Dollars
	Common Stock
	Par Value		Capital in Excess of Par	Treasury Stock	Accum. Other Comprehensive Income (Loss)	Retained Earnings	Total
For the three months ended June 30, 2025
Balances at March 31, 2025	$	23	77,554	(72,666)	(6,394)	66,721	65,238
Net income (loss)						1,971	1,971
Other comprehensive income (loss)					492		492

Dividend declared ($0.78 per common share)						(984)	(984)

Repurchase of company common stock				(1,222)			(1,222)
Excise tax on share repurchases				(12)			(12)
Distributed under benefit plans			89				89
Other				1		(1)	—
Balances at June 30, 2025	$	23	77,643	(73,899)	(5,902)	67,707	65,572

For the six months ended June 30, 2025
Balances at December 31, 2024	$	23	77,529	(71,152)	(6,473)	64,869	64,796
Net income (loss)						4,820	4,820
Other comprehensive income (loss)					571		571

Dividends declared ($1.56 per common share)						(1,982)	(1,982)

Repurchase of company common stock				(2,722)			(2,722)
Excise tax on share repurchases				(25)			(25)
Distributed under benefit plans			114				114

Balances at June 30, 2025	$	23	77,643	(73,899)	(5,902)	67,707	65,572


17			ConocoPhillips 2026 Q2 10-Q


Notes to Consolidated Financial Statements			Table of Contents

Note 13—Cash Flow Information


	Millions of Dollars
	Six Months Ended June 30
	2026		2025
Cash payments

Interest	$	363	325








Income taxes*	$	2,335	3,198
*2026 includes $119 million related to purchased income tax credits.

Net Sales (Purchases) of Investments
Short-term investments purchased	$	(671)	(461)
Short-term investments sold	306		794
Long-term investments purchased	(459)		(459)
Long-term investments sold	172		118
Total sales (purchases) of investments	$	(652)	(8)

For additional information on cash and non-cash changes to our consolidated balance sheet, see No t e 3 regarding assets held for sale during the period.

Note 14—Related Party Transactions

The following tables summarize the related party balances and activities which are primarily with equity affiliates:


	Millions of Dollars
	June 30 2026		December 31 2025
Balance Sheet
Accounts and notes receivable	$	75	79
Accounts payable	56		64


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025
Income Statement
Operating revenues and other income	$	11	25	23	49
Purchased commodities	(2)		—	(5)	2
Production and operating expenses and selling, general and administrative expenses	58		73	102	158


			ConocoPhillips 2026 Q2 10-Q			18


Notes to Consolidated Financial Statements			Table of Contents

Note 15—Employee Benefit Plans

Pension and Postretirement Plans


	Millions of Dollars
	Pension Benefits					Other Benefits
	2026			2025		2026	2025
	U.S.		Int'l.	U.S.	Int'l.
Components of net periodic benefit cost
Three months ended June 30
Service cost	$	11	8	14	8	1	1
Interest cost	19		35	23	31	2	2
Expected return on plan assets	(18)		(53)	(19)	(44)
Amortization of prior service cost (credit)	—		2	—	1	(1)	(6)
Recognized net actuarial loss (gain)	2		9	2	12	—	—
Settlements	5		—	—	—	—	—


Net periodic benefit cost	$	19	1	20	8	2	(3)

Six Months Ended June 30
Service cost	$	22	16	29	16	1	1
Interest cost	40		69	46	62	3	4
Expected return on plan assets	(38)		(106)	(38)	(89)
Amortization of prior service cost (credit)	—		2	—	1	(2)	(12)
Recognized net actuarial loss (gain)	4		18	5	23	—	—
Settlements	14		—	—	1	—	—


Net periodic benefit cost	$	42	(1)	42	14	2	(7)

The components of net periodic benefit cost, other than the service cost component, are included in the "Other expenses" line of our consolidated income statement.

We recognized a proportionate share of prior actuarial losses from other comprehensive income as pension settlement expense of $5 million and $14 million for the three- and six-month periods ended June 30, 2026, respectively. In conjunction with the recognition of pension settlement expense, the fair market value of the pension plan assets was updated, and the pension benefit obligations of the U.S. qualified pension plan and the U.S. non-qualified supplemental retirement plan were remeasured at June 30, 2026. At the measurement date, the net pension liability decreased by $24 million, primarily due to an increase in the discount rate resulting in a corresponding increase to other comprehensive income.

Severance Accrual

The following table summarizes our severance accrual activity for the six-month period ended June 30, 2026:


	Millions of Dollars
Balance at December 31, 2025	$	378
Accruals	31
Benefit payments	(279)
Foreign currency translation adjustment	(3)
Balance at June 30, 2026*	$	127

*Of the balance at June 30, 2026, $71 million is classified as short-term.


19			ConocoPhillips 2026 Q2 10-Q


Notes to Consolidated Financial Statements			Table of Contents

Note 16—Sales and Other Operating Revenues

Revenue from Contracts with Customers

The following table provides further disaggregation of our consolidated sales and other operating revenues:


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025
Revenue from contracts with customers	$	18,088	12,621	31,588	27,100
Revenue from contracts outside the scope of ASC Topic 606
Physical contracts meeting the definition of a derivative	1,008		1,445	3,147	3,415
Financial derivative contracts	65		(62)	187	6
Consolidated sales and other operating revenues	$	19,161	14,004	34,922	30,521

We apply the practical expedient allowed in ASC Topic 606, “Revenue from Contracts with Customers,” and do not disclose the aggregate amount of the transaction price allocated to performance obligations or when we expect to recognize revenues that are unsatisfied as of the end of the reporting period.

Revenues from contracts outside the scope of ASC Topic 606 relate primarily to physical gas contracts at market prices, which qualify as derivatives accounted for under ASC Topic 815, “Derivatives and Hedging,” and for which we have not elected NPNS. There is no significant difference in contractual terms or the policy for recognition of revenue from these contracts and those within the scope of ASC Topic 606. Further disaggregation of revenues is provided in Note 18—Segment Disclosures and Related Information.

Receivables from Contracts with Customers

At June 30, 2026, and December 31, 2025, the “Accounts and notes receivable, net” line on our consolidated balance sheet, presented net of allowances of $4 million for each period, included trade receivables of $5,792 million compared with $4,416 million at December 31, 2025, and included both contracts with customers within the scope of ASC Topic 606 and those that are outside the scope of ASC Topic 606. We typically receive payment within 30 days or less (depending on the terms of the invoice) once delivery is made. Revenues that are outside the scope of ASC Topic 606 relate primarily to physical natural gas sales contracts at market prices for which we do not elect NPNS and are therefore accounted for as a derivative under ASC Topic 815. There is little distinction in the nature of the customer or credit quality of trade receivables associated with natural gas sold under contracts for which NPNS has not been elected compared with trade receivables where NPNS has been elected.


			ConocoPhillips 2026 Q2 10-Q			20


Notes to Consolidated Financial Statements			Table of Contents

Note 17—Earnings Per Share

The following table presents the calculation of net income (loss) available to common shareholders and basic and diluted EPS. For the periods presented in the table below, diluted EPS calculated under the two-class method was more dilutive.


	Millions of Dollars (except per share amounts)
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025
Basic earnings per share

Net income (loss)	$	3,931	1,971	6,114	4,820
Less: Dividends and undistributed earnings
allocated to participating securities	13		7	19	17
Net income (loss) available to common shareholders	$	3,918	1,964	6,095	4,803
Weighted-average common shares outstanding (in millions)	1,213		1,258	1,219	1,265

Net income (loss) per share of common stock	$	3.23	1.56	5.00	3.80

Diluted earnings per share

Net income (loss) available to common shareholders	$	3,918	1,964	6,095	4,803
Weighted-average common shares outstanding (in millions)	1,213		1,258	1,219	1,265
Add: Dilutive impact of options and unvested
non-participating RSU/PSUs (in millions)	1		1	0	2
Weighted-average diluted shares outstanding (in millions)	1,214		1,259	1,219	1,267

Net income (loss) per share of common stock	$	3.23	1.56	5.00	3.79

Note 18—Segment Disclosures and Related Information

We explore for, produce, transport and market crude oil, bitumen, natural gas, LNG and NGLs on a worldwide basis. We manage our operations through five operating segments, which are primarily defined by geographic region: Alaska; Lower 48 (L48); Canada; Europe, Middle East and North Africa (EMENA); and Asia Pacific (AP).

Corporate and Other (Corporate) represents income and costs not directly associated with an operating segment, such as most interest expense, premiums on early retirement of debt, corporate overhead and certain technology activities, including licensing revenues. Corporate assets include all cash and cash equivalents and short-term investments.

Our chief operating decision maker (CODM) is our Chairman of the Board of Directors and Chief Executive Officer, who evaluates performance and allocates resources among our operating segments based on each segment's net income (loss). This is done through the annual budget and forecasting process.

Intersegment sales are at prices that approximate market.


21			ConocoPhillips 2026 Q2 10-Q


Notes to Consolidated Financial Statements			Table of Contents

Analysis of Results by Operating Segment


Three Months Ended June 30, 2026	Millions of Dollars
	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Segment sales and other operating revenues
Sales and other operating revenues#	$	1,873	13,031	1,925	2,276	674	19,779	15	19,794
Intersegment eliminations	—		(3)	(621)	—	—	(624)	(9)	(633)
Consolidated sales and other operating revenues	1,873		13,028	1,304	2,276	674	19,155	6	19,161

Significant segment expenses*
Production and operating expenses	522		1,276	290	270	87	2,445	(14)	2,431
DD&A	346		2,147	133	241	107	2,974	9	2,983
Income tax provision (benefit)	159		722	104	1,033	110	2,128	23	2,151
Total	1,027		4,145	527	1,544	304	7,547	18	7,565

Other segment items
Equity in earnings of affiliates	—		—	—	(45)	(167)	(212)	(27)	(239)
Interest income	—		—	—	—	—	—	(80)	(80)
Interest and debt expense	—		—	—	—	—	—	182	182
Other**	324		6,299	457	431	148	7,659	143	7,802
Total	324		6,299	457	386	(19)	7,447	218	7,665

Net income (loss)	$	522	2,584	320	346	389	4,161	(230)	3,931
#Includes revenue from physical contracts meeting the definition of a derivative that are outside the scope of ASC Topic 606 for the L48, Canada and EMENA segments of $0.5 billion, $0.1 billion and $0.4 billion, respectively.
*The significant segment expense categories and amounts in the table above align with segment-level information that is regularly provided to the CODM.
**Other segment items not required to be separately disclosed for each reportable segment include:
Gain (loss) on dispositions: L48 and Corporate
Other income and Other expenses: Alaska, L48, EMENA and Corporate
Purchased commodities: Alaska, L48, Canada, EMENA and AP
Selling, general and administrative expenses: L48, Canada, EMENA, AP and Corporate
Exploration expenses, Taxes other than income taxes and Accretion on discounted liabilities: Alaska, L48, Canada, EMENA, AP and Corporate
Impairments: L48
Foreign currency transaction (gain) loss: Canada, EMENA, AP and Corporate

Other Segment Disclosures


Three Months Ended June 30, 2026	Millions of Dollars

	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Equity investments	$	3	1	—	2,471	4,809	7,284	1,696	8,980
Total assets	21,617		61,966	9,757	10,797	8,230	112,367	11,894	124,261
Capital expenditures and investments	912		1,640	89	252	91	2,984	40	3,024


			ConocoPhillips 2026 Q2 10-Q			22


Notes to Consolidated Financial Statements			Table of Contents


Three Months Ended June 30, 2025	Millions of Dollars
	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Segment sales and other operating revenues
Sales and other operating revenues#	$	1,315	9,966	1,334	1,400	471	14,486	14	14,500
Intersegment eliminations	—		(3)	(486)	—	—	(489)	(7)	(496)
Consolidated sales and other operating revenues	1,315		9,963	848	1,400	471	13,997	7	14,004

Significant segment expenses*
Production and operating expenses	546		1,474	216	232	85	2,553	19	2,572
DD&A	361		2,003	143	198	118	2,823	15	2,838
Income tax provision (benefit)	47		382	50	593	67	1,139	(93)	1,046
Total	954		3,859	409	1,023	270	6,515	(59)	6,456

Other segment items
Equity in earnings of affiliates	—		(4)	—	(115)	(185)	(304)	(11)	(315)
Interest income	—		—	—	—	(2)	(2)	(65)	(67)
Interest and debt expense	—		—	—	—	—	—	232	232
Other**	226		4,709	290	255	58	5,538	189	5,727
Total	226		4,705	290	140	(129)	5,232	345	5,577

Net income (loss)	$	135	1,399	149	237	330	2,250	(279)	1,971
#Includes revenue from physical contracts meeting the definition of a derivative that are outside the scope of ASC Topic 606 for the L48, Canada and EMENA segments of $1.2 billion, $0.2 billion and $0.1 billion, respectively.
*The significant segment expense categories and amounts in the table above align with segment-level information that is regularly provided to the CODM.
**Other segment items not required to be separately disclosed for each reportable segment include:
Gain (loss) on dispositions and Impairments: L48
Other income: L48, EMENA and Corporate
Purchased commodities and Accretion on discounted liabilities: Alaska, L48, Canada, EMENA and AP

Selling, general and administrative expense, Exploration expenses and Taxes other than income taxes: Alaska, L48, Canada, EMENA, AP and Corporate
Foreign currency transaction (gain) loss: Canada, EMENA, AP and Corporate

Other expenses: L48, EMENA and Corporate

Other Segment Disclosures


Three Months Ended June 30, 2025	Millions of Dollars

	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Equity investments	$	4	126	—	2,084	5,172	7,386	1,612	8,998
Total assets	19,374		65,087	10,029	10,128	8,515	113,133	9,466	122,599
Capital expenditures and investments	986		1,704	144	356	64	3,254	32	3,286


23			ConocoPhillips 2026 Q2 10-Q


Notes to Consolidated Financial Statements			Table of Contents


Six Months Ended June 30, 2026	Millions of Dollars
	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Segment sales and other operating revenues
Sales and other operating revenues#	$	3,396	24,117	3,598	3,903	1,175	36,189	37	36,226
Intersegment eliminations	—		(9)	(1,277)	—	—	(1,286)	(18)	(1,304)
Consolidated sales and other operating revenues	3,396		24,108	2,321	3,903	1,175	34,903	19	34,922

Significant segment expenses*
Production and operating expenses	997		2,529	479	527	167	4,699	8	4,707
DD&A	698		4,198	285	480	210	5,871	18	5,889
Income tax provision (benefit)	251		1,117	131	1,758	170	3,427	(96)	3,331
Total	1,946		7,844	895	2,765	547	13,997	(70)	13,927

Other segment items
Equity in earnings of affiliates	—		—	—	(140)	(331)	(471)	(15)	(486)
Interest income	—		—	—	—	—	—	(189)	(189)
Interest and debt expense	—		—	—	—	—	—	380	380
Other**	634		12,277	1,021	667	275	14,874	302	15,176
Total	634		12,277	1,021	527	(56)	14,403	478	14,881

Net income (loss)	$	816	3,987	405	611	684	6,503	(389)	6,114
#Includes revenue from physical contracts meeting the definition of a derivative that are outside the scope of ASC Topic 606 for the L48, Canada and EMENA segments of $2.1 billion, $0.4 billion and $0.6 billion, respectively.
*The significant segment expense categories and amounts in the table above align with segment-level information that is regularly provided to the CODM.
**Other segment items not required to be separately disclosed for each reportable segment include:
Gain (loss) on dispositions: L48 and Corporate
Other income: Alaska, L48, Canada, EMENA and Corporate
Purchased commodities: Alaska, L48, Canada, EMENA and AP
Selling, general and administrative expenses: L48, Canada, EMENA, AP and Corporate
Exploration expenses, Taxes other than income taxes and Accretion on discounted liabilities: Alaska, L48, Canada, EMENA, AP and Corporate
Impairments: Alaska and L48
Foreign currency transaction (gain) loss: Canada, EMENA, AP and Corporate

Other expenses: Alaska, L48, EMENA and Corporate

Other Segment Disclosures


Six Months Ended June 30, 2026	Millions of Dollars

	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Equity investments	$	3	1	—	2,471	4,809	7,284	1,696	8,980
Total assets	21,617		61,966	9,757	10,797	8,230	112,367	11,894	124,261
Capital expenditures and investments	1,861		3,145	210	514	173	5,903	69	5,972


			ConocoPhillips 2026 Q2 10-Q			24


Notes to Consolidated Financial Statements			Table of Contents


Six Months Ended June 30, 2025	Millions of Dollars
	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Segment sales and other operating revenues
Sales and other operating revenues#	$	2,925	21,514	2,866	3,340	895	31,540	32	31,572
Intersegment eliminations	—		(3)	(1,033)	—	—	(1,036)	(15)	(1,051)
Consolidated sales and other operating revenues	2,925		21,511	1,833	3,340	895	30,504	17	30,521

Significant segment expenses*
Production and operating expenses	1,052		2,965	417	456	150	5,040	38	5,078
DD&A	716		3,907	274	417	237	5,551	33	5,584
Income tax provision (benefit)	186		830	131	1,515	131	2,793	(130)	2,663
Total	1,954		7,702	822	2,388	518	13,384	(59)	13,325

Other segment items
Equity in earnings of affiliates	—		(8)	—	(288)	(391)	(687)	(20)	(707)
Interest income	—		—	—	—	(4)	(4)	(139)	(143)
Interest and debt expense	—		—	—	—	—	—	437	437
Other**	509		10,628	606	584	131	12,458	331	12,789
Total	509		10,620	606	296	(264)	11,767	609	12,376

Net income (Loss)	$	462	3,189	405	656	641	5,353	(533)	4,820
#Includes revenue from physical contracts meeting the definition of a derivative that are outside the scope of ASC Topic 606 for the L48, Canada and EMENA segments of $2.7 billion, $0.4 billion and $0.4 billion, respectively.
*The significant segment expense categories and amounts in the table above align with segment-level information that is regularly provided to the CODM.
**Other segment items not required to be separately disclosed for each reportable segment include:
Gain (loss) on dispositions: L48 and Corporate
Other income: L48, Canada, EMENA, AP and Corporate
Selling, general and administrative expenses, Exploration expenses, Taxes other than income taxes and Accretion on discounted liabilities: Alaska, L48, Canada, EMENA, AP and Corporate
Purchased commodities: Alaska, L48, Canada, EMENA and AP

Impairments: L48 and EMENA

Foreign currency transaction (gain) loss: Canada, EMENA, AP and Corporate
Other expenses: EMENA and Corporate

Other Segment Disclosures


Six Months Ended June 30, 2025	Millions of Dollars

	Alaska		L48	Canada	EMENA	AP	Segment Totals	Corporate	Consolidated Total
Equity investments	$	4	126	—	2,084	5,172	7,386	1,612	8,998
Total assets	19,374		65,087	10,029	10,128	8,515	113,133	9,466	122,599
Capital expenditures and investments	2,032		3,518	309	630	118	6,607	57	6,664


25			ConocoPhillips 2026 Q2 10-Q


Notes to Consolidated Financial Statements			Table of Contents


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025

Consolidated sales and other operating revenues
Crude oil	$	14,271	9,528	24,529	20,361
Natural gas	1,149		1,930	3,653	4,762
Natural gas liquids	1,117		938	2,039	1,993
Other*	2,624		1,608	4,701	3,405
Total	$	19,161	14,004	34,922	30,521

*Includes bitumen, power and LNG.


	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025
Revenue from physical contracts meeting the definition of a derivative outside the scope of ASC Topic 606
Crude oil	$	178	48	288	157
Natural gas	649		1,117	2,350	2,763
Power	181		280	509	495
Total	$	1,008	1,445	3,147	3,415


Sales and other operating revenues by geographic location*	Millions of Dollars
	Three Months Ended June 30			Six Months Ended June 30
	2026		2025	2026	2025

U.S.	$	14,851	11,137	27,367	24,249









International	4,310		2,867	7,555	6,272
Worldwide consolidated	$	19,161	14,004	34,922	30,521

*Sales and other operating revenues are attributable to countries based on the location of the selling operation.


			ConocoPhillips 2026 Q2 10-Q			26


Notes to Consolidated Financial Statements			Table of Contents

Note 19—Income Taxes

Our effective tax rate for the three-month periods ended June 30, 2026, and June 30, 2025, was 35.4 percent and 34.7 percent, respectively. The change in the effective tax rate for the three-month period ended June 30, 2026, is primarily due to a shift in our mix of income among taxing jurisdictions.

Our effective tax rate for the six-month periods ended June 30, 2026, and June 30, 2025, was 35.3 percent and 35.6 percent, respectively. The change in the effective tax rate for the six-month period ended June 30, 2026, is primarily due to a shift in our mix of income among taxing jurisdictions partly offset by a change to our valuation allowance in the prior year, as described below.

During the first quarter of 2025, our valuation allowance decreased $56 million, relating to the expected utilization of previously unrecognized capital loss carryforwards due to our agreement to sell our interests in the Ursa and Europa fields, and the Ursa Oil Pipeline Company LLC to Shell Offshore Inc. and Shell Pipeline Company LP, respectively.

The company has ongoing income tax audits in a number of jurisdictions. The government agents in charge of these audits regularly request additional time to complete audits, which we generally grant, and conversely, occasionally close audits unpredictably.

Note 20—New Accounting Standards

In November 2024, the FASB issued ASU No. 2024-03, “Disaggregation of Income Statement Expenses” to disaggregate the disclosures about a public business entity’s expenses (including purchases of inventory, employee compensation, depreciation, depletion and amortization) in commonly presented expense captions. The ASU will impact our financial statement disclosures only and will be applied prospectively with retrospective application permitted. The ASU is effective for annual reporting periods beginning after December 15, 2026, and interim reporting periods beginning after December 15, 2027, and early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU.

In May 2026, the FASB issued ASU No. 2026-02, “Accounting for Environmental Credit Programs” to provide recognition, measurement, presentation and disclosure requirements for all entities that generate, purchase or receive environmental credits or will have a regulatory compliance obligation that may be settled with environmental credits (including renewable energy and carbon offset credits). This ASU will be applied on a retrospective basis through a cumulative-effect adjustment to the opening balance of retained earnings as of the beginning of the annual reporting period of adoption. The ASU is effective for annual reporting periods beginning after December 15, 2027, and interim reporting periods within those annual reporting periods, and early adoption is permitted. We are currently evaluating the impact of the adoption of this ASU.


27			ConocoPhillips 2026 Q2 10-Q


Management’s Discussion and Analysis			Table of Contents

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