q1 2009 earning report of conocophillips

1st QuarterEarnings Conference Call

April 23, 2009

CAUTIONARY STATEMENTFOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

CAUTIONARY STATEMENTFOR THE PURPOSES OF THE “SAFE HARBOR” PROVISIONS

OF THE PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The following presentation includes forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended and Section 21E of the Securities Exchange Act of 1934, as amended, which are intended to be covered by the safe harbors created thereby. You can identify our forward-looking statements by words such as “anticipates,” “expects,” “intends,” “plans,” “projects,” “believes,” “estimates,” and similar expressions. Forward-looking statements relating to ConocoPhillips’ operations are based on management’s expectations, estimates and projections about ConocoPhillips and the petroleum industry in general on the date these presentations were given. These statements are not guarantees of future performance and involve certain risks, uncertainties and assumptions that are difficult to predict. Further, certain forward-looking statements are based upon assumptions as to future events that may not prove to be accurate. Therefore, actual outcomes and results may differ materially from what is expressed or forecast in such forward-looking statements. Factors that could cause actual results or events to differ materially include, but are not limited to, crude oil and natural gas prices; refining and marketing margins; potential failure to achieve, and potential delays in achieving expected reserves or production levels from existing and future oil and gas development projects due to operating hazards, drilling risks, and the inherent uncertainties in interpreting engineering data relating to underground accumulations of oil and gas; unsuccessful exploratory activities; potential disruption or unexpected technical difficulties in developing new products and manufacturing processes; potential failure of new products to achieve acceptance in the market; unexpected cost increases or technical difficulties in constructing or modifying company manufacturing or refining facilities; unexpected difficulties in manufacturing, transporting or refining synthetic crude oil; international monetary conditions and exchange controls; potential liability for remedial actions under existing or future environmental regulations; potential liability resulting from pending or future litigation; limited access to capital or significantly higher cost of capital related to illiquidity or uncertainty in the domestic or international financial markets; general domestic and international economic and political conditions, as well as changes in tax, environmental and other laws applicable to ConocoPhillips’ business. Other factors that could cause actual results to differ materially from those described in the forward-looking statements include other economic, business, competitive and/or regulatory factors affecting ConocoPhillips’ business generally as set forth in ConocoPhillips’ filings with the Securities and Exchange Commission (SEC), including our Form 10-K for the year ending December 31, 2008, as updated by our subsequent periodic and current reports on Forms 10-Q and 8-K, respectively. ConocoPhillips is under no obligation (and expressly disclaims any such obligation) to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

This presentation includes certain non-GAAP financial measures, as indicated. Such non-GAAP measures are intended to supplement, not substitute for, comparable GAAP measures. Investors are urged to consider closely the comparable GAAP measure and the reconciliation to that measure provided in the Appendix or on our website at www.conocophillips.com. In this presentation, peer group “non-core earnings impacts” include publicly-disclosed gains and losses on asset dispositions, asset impairments, changes in litigation accruals, write-offs, uninsured losses, and restructuring charges, in each case, to the extent such items are in excess of >$249 million as well as all cumulative effect of accounting changes and discontinued operations, regardless of amount.

First-Quarter OverviewFirst-Quarter Overview

$0.8 Billion in Earnings

2.36 MMBOED Production

81% Refining Utilization

Lower Operating Costs

Earnings

$0.8 B

Debt-to-Cap

34%

Cash FromOperations

$1.9 B

Total Company Earnings1Q09 vs. 4Q08

Total Company Earnings1Q09 vs. 4Q08

1,914

840

264

125

516

310

1,669

4Q AdjustedEarnings*

Prices, Margins &Other Market

Impacts

Volumes Operating Costs Taxes Other 1Q09

* See Appendix for reconciliation of Adjusted Earnings to Earnings

$MM

Total Company Cash Flow1Q09

Total Company Cash Flow1Q09

1,885

802

1,924

755

81

3,147

696

Beginning Cashand CFO

Debt Increase Capital Program Dividends Other Ending CashBalance

$MM

Beginning

Cash

Debt RatioDebt Ratio

Equity $B Balance Sheet Debt $B

Debt-to-Capital Ratio %

5656

9084

35

44

54

0

20

40

60

80

100

'03 '04 '05 '06 '07 '081Q09

29.427.5

21.7

27.1

17.815.0

12.5

0

10

20

30

40

'03 '04 '05 '06 '07 '081Q09

3433

19

34

26

19

24

0

10

20

30

40

50

'03 '04 '05 '06 '07 '08 1Q09

Exploration & Production1Q09 vs. 4Q08

Exploration & Production1Q09 vs. 4Q08

Lower crude oil and natural gas prices

Reduced operating costs

Higher production volumes

1,9252,364

1,867

7439

31 9 817

4Q08 E&P Indonesia Russia Vietnam Australia Other 1Q09 E&P LUKOIL 1Q09

Total Company Production1Q09 vs. 4Q08

Total Company Production1Q09 vs. 4Q08

MBOED

E&P Earnings1Q09 vs. 4Q08

E&P Earnings1Q09 vs. 4Q08

$MM

700

1,392

193

153

50

731,015

4Q08 AdjustedEarnings*

Prices & OtherMarket Impacts

Sales Volumes Operating Costs Production Taxes Other 1Q09


Refining & Marketing1Q09 vs. 4Q08

Refining & Marketing1Q09 vs. 4Q08

Lower worldwide marketing margins

Reduced refining market capture

Decreased capacity utilization

R&M Earnings1Q09 vs. 4Q08

R&M Earnings1Q09 vs. 4Q08

753

205

42

251

325

14

4Q08 AdjustedEarnings*

Prices, Margins &Other Market

Impacts

Volumes Operating Costs Other 1Q09

$MM


Other Segments 1Q09 vs. 4Q08

Other Segments 1Q09 vs. 4Q08

LUKOIL Investment ($48MM vs. $0MM*)

Midstream ($123MM vs. $69MM)

Chemicals ($23MM vs. $-6MM)

Emerging Businesses ($0MM vs. $60MM*)

Corporate ($-259MM vs. $-354MM*)

* Amounts represent Adjusted Earnings. See Appendix for reconciliation of Adjusted Earnings to Earnings.

E&P Income per BOE

$ / BOE

Peer Group

11.6215.07

20.60 22.35 22.96

30.70

15.55

0.00

5.00

10.00

15.00

20.00

25.00

30.00

35.00

2003 2004 2005 2006 2007 2008 1Q09

E&P Cash Contribution per BOE

$ / BOE

E&P per BOE MetricsE&P per BOE Metrics

Based on total E&P BOE production. All companies Income adjusted to exclude certain non-core earnings impacts (based solely on publicly available information). Cash Contribution is calculated as Income plus DD&A. See Tables 1 and 2 of Appendix for additional information.

7.089.97

14.79 13.76 12.19

4.04

18.44

0.00

5.00

10.00

15.00

20.00

25.00

2003 2004 2005 2006 2007 2008 1Q09

Peer Group

1.26

2.39

3.59 3.854.50

2.40

0.94

0.00

1.00

2.00

3.00

4.00

5.00

2003 2004 2005 2006 2007 2008 1Q09

R&M Income per BBL

$ / BBL

R&M Cash Contribution per BBL

$ / BBL

1.88

3.06

4.28 4.645.16

3.16

1.80

0.00

1.00

2.00

3.00

4.00

5.00

6.00

2003 2004 2005 2006 2007 2008 1Q09

R&M per BBL MetricsR&M per BBL Metrics

Based on total petroleum product sales. All companies Income adjusted to exclude certain non-core earnings impacts (based solely on publicly available information). Cash Contribution is calculated as Income plus DD&A. See Tables 1 and 2 of Appendix for additional information.

8%5%

0%

10%

20%

30%

4Q08 1Q09

Return on Capital EmployedReturn on Capital Employed

All companies adjusted to exclude certain non-core earnings impacts. See Table 3 of Appendix for additional information.

Peer Group COP

OutlookOutlook

Full-year E&P production slightly higherthan 2008

Higher second-quarter U.S. refiningcapacity utilization

Continue cost discipline

Execute capital program

1st QuarterEarnings Conference Call

April 23, 2009

Appendix

Table 1

COP Non-GAAP ReconciliationsCOP Non-GAAP Reconciliations

2003 2004 2005 2006 2007 2008 1Q09GAAP E&P Net Income - $MM 4,302 5,702 8,430 9,848 4,615 (13,479) 700 GAAP E&P Net Income - $ / BOE 7.33 9.97 14.79 13.78 6.73 (20.59) 4.04 non-core earnings impacts - $MM gains and (losses) on asset dispositions 565 590 asset impairments (118) (4,752) (26,070) tax legislation / regulatory / other 142 (4) 133 436 (71) E&P Income - $ / BOE 7.08 9.97 14.79 13.76 12.19 18.44 4.04 E&P DD&A - $ / BOE 4.54 5.10 5.81 8.59 10.77 12.26 11.51 E&P Cash Contribution - $ / BOE 11.62 15.07 20.60 22.35 22.96 30.70 15.55

2003 2004 2005 2006 2007 2008 1Q09GAAP R&M Net Income - $MM 1,272 2,743 4,173 4,481 5,923 2,322 205 GAAP R&M Net Income - $ / BBL 1.14 2.39 3.52 3.53 5.00 2.09 0.84 non-core earnings impacts - $MM gains and (losses) on asset dispositions 339 224 asset impairments (441) 112 (550) tax legislation / regulatory / other (125) (83) 34 141 (24) (25) R&M Income - $ / BBL 1.26 2.39 3.59 3.85 4.50 2.40 0.94 R&M DD&A - $ / BBL 0.62 0.67 0.69 0.79 0.66 0.76 0.86 R&M Cash Contribution - $ / BBL 1.88 3.06 4.28 4.64 5.16 3.16 1.80


Table 2

For Peer Companies, Cash Contribution is calculated as adjusted Income plus DD&A for each full year 2003 through 2008.

2003 2004 2005 2006 2007 2008 1Q09GAAP E&P CFOA - $MM 7,751 9,109 12,126 16,978 16,228 20,976 2,270 GAAP E&P CFOA - $ / BOE 13.20 15.92 21.27 23.77 23.65 32.04 13.10

excluded GAAP items - $MMnon-cash working capital 356 221 31 244 393 389 (339) non-working capital adjustments* 573 267 350 770 78 488 (86)

E&P Cash Contribution - $ / BOE 11.62 15.07 20.60 22.35 22.96 30.70 15.55

2003 2004 2005 2006 2007 2008 1Q09GAAP R&M CFOA - $MM 2,208 2,671 4,914 4,625 6,757 1,903 (698) GAAP R&M CFOA - $ / BBL 1.99 2.32 4.14 3.65 5.70 1.71 (2.85)

excluded GAAP items - $MMnon-cash working capital (104) (702) 267 (1,095) 1,188 (1,294) (1,044) non-working capital adjustments* 225 (142) (427) (172) (546) (314) (95)

R&M Cash Contribution - $ / BBL 1.88 3.06 4.28 4.64 5.16 3.16 1.80

*Includes items such as deferred tax, accretion on discounted liabilities, and undistributed equity earnings.


Table 3

4Q08 1Q09GAAP ROCE -126% 5% non-core earnings impacts - $MM gains and (losses) on asset dispositions 525 - asset impairments (34,104) - tax legislation / regulatory / other (99) 63

ROCE 8% 5%

COP Non-GAAP ReconciliationsReconciliation of Adjusted Earnings to EarningsCOP Non-GAAP ReconciliationsReconciliation of Adjusted Earnings to Earnings

Table 4

4Q08 - $MM E&P R&M Lukoil Midstream Chem. Emerg. Bus. Corp. ConsolidatedEarnings (loss) ($24,293) $289 ($7,410) $69 ($6) ($25) ($388) ($31,764)Goodwill impairment (25,443) - - - - - - (25,443)Impairments - other (599) (537) - - - (85) (30) (1,251)LUKOIL Investment impairment - - (7,410) - - - - (7,410) Total Impairments (26,042) (537) (7,410) - - (85) (30) (34,104)Gain (loss) on asset sales 428 97 - - - - - 525Severance accruals (71) (24) - - - - (4) (99) Total Adjustments (25,685) (464) (7,410) - - (85) (34) (33,678)Adjusted earnings $1,392 $753 - $69 ($6) $60 ($354) $1,914

q1 2009 earning report of conocophillips

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