e424b2
Filed Pursuant to Rule 424(b)(2)
The registrants are updating the Calculation of
Registration Fee table set forth in
the Registration Statement on
Form S-3
(Registration Nos. 333-137890, 333-137890-01,
333-137890-02 and 333-137890-03) to indicate the
$2.1 billion aggregate offering price
of securities offered hereby and the filing fee of $224,700,
calculated in accordance
with Rule 457(r) and transmitted to the SEC in connection
herewith.
Prospectus Supplement
(To Prospectus dated October 6, 2006)
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ConocoPhillips Canada
Funding Company I
$1,250,000,000
5.625% Notes due 2016
fully and
unconditionally
guaranteed by
ConocoPhillips and
ConocoPhillips Company
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ConocoPhillips Canada
Funding Company II
$350,000,000
5.30% Notes due 2012
$500,000,000
5.95% Notes due 2036
fully and
unconditionally
guaranteed by
ConocoPhillips and
ConocoPhillips Company
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ConocoPhillips Canada Funding Company I will pay interest on the
2016 notes and ConocoPhillips Canada Funding Company II
will pay interest on the 2012 notes and the 2036 notes
semiannually on April 15 and October 15 of each year,
beginning April 15, 2007. The notes of each series are
subject to redemption and repayment at any time by the issuer of
that series for an amount equal to 100% of the principal amount
of the notes redeemed and repaid plus a make-whole premium. The
repayment amounts are described beginning on
page S-5
of this prospectus supplement. We use the term notes
to refer to all three series of notes collectively.
Neither the Securities and Exchange Commission nor any state or
Canadian provincial securities commission has approved or
disapproved these securities or determined if this prospectus
supplement or the accompanying prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense. The notes have not been, nor will they be, qualified
for sale to the public under the applicable securities laws in
Canada.
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Offering proceeds
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Public offering
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Underwriting
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to issuer, before
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price(1)
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discounts
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expenses(1)
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Per 2016 Note
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99.992%
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0.450%
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99.542%
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Total
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$
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1,249,900,000
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$
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5,625,000
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$
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1,244,275,000
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Per 2012 Note
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99.778%
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0.350%
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99.428%
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Total
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$
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349,223,000
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$
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1,225,000
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$
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347,998,000
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Per 2036 Note
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99.736%
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0.875%
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98.861%
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Total
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$
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498,680,000
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$
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4,375,000
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$
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494,305,000
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(1)
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Plus accrued interest from
October 13, 2006, if settlement occurs after that date.
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Delivery of the notes in book-entry form only will be made
through The Depository Trust Company, Clearstream Banking S.A.
and the Euroclear system on or about October 13, 2006,
against payment in immediately available funds.
Joint Book-Runners
Banc
of America Securities LLC
(Global Coordinator)
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Barclays
Capital |
Merrill
Lynch & Co. |
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(2016
Notes)
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(2016
Notes)
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Deutsche
Bank Securities |
UBS
Investment Bank |
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(2012
and 2036 Notes)
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(2012
and 2036 Notes)
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October 10, 2006
Senior Co-Managers
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Barclays
Capital |
Merrill
Lynch & Co. |
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(2012
and 2036 Notes)
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(2012
and 2036 Notes)
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Deutsche
Bank Securities |
UBS
Investment Bank |
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(2016
Notes)
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(2016
Notes)
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Co-Managers
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ABN
AMRO Incorporated |
BNP
PARIBAS |
Calyon
Securities (USA) |
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Daiwa
Securities SMBC Europe |
DnB
NOR Markets |
RBS
Greenwich Capital |
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HSBC |
ING
Financial
Markets |
Mitsubishi
UFJ Securities |
You should rely only on the information we have included or
incorporated by reference in this prospectus supplement and the
accompanying prospectus. We have not authorized anyone to
provide you with any other information. If you receive any
unauthorized information, you must not rely on it. We are
offering to sell the notes only in places where sales are
permitted. You should assume that the information we have
included in this prospectus supplement or the accompanying
prospectus is accurate only as of the date of this prospectus
supplement or the accompanying prospectus and that any
information we have incorporated by reference is accurate only
as of the date of the document incorporated by reference.
TABLE OF
CONTENTS
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Page
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Prospectus Supplement
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S-1
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S-4
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S-5
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S-11
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S-13
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S-14
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S-16
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Prospectus
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About This Prospectus
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1
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About ConocoPhillips
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1
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About ConocoPhillips Company
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1
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About ConocoPhillips Canada
Funding Company I
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1
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About ConocoPhillips Canada
Funding Company II
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2
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Where You Can Find More Information
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2
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Forward-Looking Information
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3
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Use of Proceeds
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4
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Ratio of Earnings to Fixed Charges
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4
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Description of the Debt Securities
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5
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Plan of Distribution
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15
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Legal Matters
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16
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Experts
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16
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Index to Financial Statements
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F-1
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Unless we state otherwise, all references in this prospectus
supplement and the accompanying prospectus to
dollars or $ are to the currency of the
United States of America.
SUMMARY
This summary highlights selected information from this
prospectus supplement and the accompanying prospectus, but does
not contain all information that may be important to you. This
prospectus supplement and the accompanying prospectus include
specific terms of the offering of the notes, information about
our business and financial data. We encourage you to read this
prospectus supplement and the accompanying prospectus, together
with the documents incorporated by reference, in their entirety
before making an investment decision.
In this prospectus supplement and the accompanying
prospectus, we refer to ConocoPhillips, its wholly owned and
majority owned subsidiaries (including ConocoPhillips Company,
ConocoPhillips Canada Funding Company I and ConocoPhillips
Canada Funding Company II) and its ownership interest
in equity affiliates as we or
ConocoPhillips, unless the context clearly indicates
otherwise. Our ownership interest in equity affiliates includes
corporate entities, partnerships, limited liability companies
and other ventures in which we exert significant influence by
virtue of our ownership interest, which is typically between 20%
and 50%.
The terms 2016 notes and Funding I
notes refers to the 5.625% Notes due 2016 issued by
ConocoPhillips Canada Funding Company I. The terms 2012
notes and 2036 notes refer to the
5.30% Notes due 2012 and the 5.95% Notes due 2036
issued by ConocoPhillips Canada Funding Company II, and the
term Funding II notes refers to the 2012 notes
and the 2036 notes, collectively. The term notes
refers to all three series of notes, collectively.
About
ConocoPhillips
ConocoPhillips is an international, integrated energy company.
Headquartered in Houston, Texas, ConocoPhillips had
approximately 38,000 employees worldwide and assets of
$162 billion as of June 30, 2006. ConocoPhillips has
four core activities worldwide: petroleum exploration and
production; petroleum refining, marketing, supply and
transportation; natural gas gathering, processing and marketing;
and chemicals and plastics production and distribution. In
addition, ConocoPhillips is investing in several emerging
businesses: fuels technology,
gas-to-liquids,
power generation and emerging technologies.
About
ConocoPhillips Company,
ConocoPhillips Canada Funding Company I and ConocoPhillips
Canada Funding Company II
ConocoPhillips Company is a direct wholly owned operating
subsidiary of ConocoPhillips. ConocoPhillips Canada Funding
Company I is a direct wholly owned special purpose finance
subsidiary of Conoco Petroleum Operations Inc. (itself an
indirect wholly owned subsidiary of ConocoPhillips), organized
to engage in financing activities to raise funds for the
business operations of ConocoPhillips and its subsidiaries.
ConocoPhillips Canada Funding Company II is a direct wholly
owned special purpose finance subsidiary of Burlington Resources
Inc. (itself a direct wholly owned subsidiary of
ConocoPhillips), organized to engage in financing activities to
raise funds for the business operations of ConocoPhillips and
its subsidiaries. In this prospectus supplement, we refer to
ConocoPhillips Company as CPCo, to ConocoPhillips
Canada Funding Company I as Funding I and to
ConocoPhillips Canada Funding Company II as
Funding II.
S-1
The
Offering
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Securities Offered |
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$1,250 million principal amount of 5.625% Notes due
2016 of Funding I |
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$350 million principal amount of 5.30% Notes due 2012
of Funding II |
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$500 million principal amount of 5.95% Notes due 2036
of Funding II |
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Guarantees |
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ConocoPhillips and CPCo will jointly and severally, fully and
unconditionally guarantee on a senior unsecured basis the full
and prompt payment of the principal of and any premium and
interest on the notes, when and as it becomes due and payable,
whether at maturity or otherwise. |
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Maturity Dates |
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October 15, 2016 for the 2016 notes |
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April 15, 2012 for the 2012 notes |
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October 15, 2036 for the 2036 notes |
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Interest Payment Dates |
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April 15 and October 15 of each year, commencing
April 15, 2007 |
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Optional Redemption |
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Funding I may elect to redeem and repay any or all of the
Funding I notes at any time in principal amounts of $1,000 or
any integral multiple of $1,000. Funding I will pay an amount
equal to the principal amount of notes redeemed and repaid plus
a make-whole premium. Funding I will also pay accrued interest
to the redemption date. |
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Funding II may elect to redeem and repay any or all of the
Funding II notes of each series at any time in principal
amounts of $1,000 or any integral multiple of $1,000.
Funding II will pay an amount equal to the principal amount
of notes redeemed and repaid plus a make-whole premium.
Funding II will also pay accrued interest to the redemption
date. |
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Please read Description of the Notes
Redemption. |
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Ranking |
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The Funding I notes will constitute senior unsecured debt of
Funding I and will rank equally with its senior unsecured debt
from time to time outstanding. The Funding II notes will
constitute senior unsecured debt of Funding II and will
rank equally with its senior unsecured debt from time to time
outstanding. |
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Covenants |
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We will issue the notes under indentures containing covenants
for your benefit. These covenants restrict our ability, with
certain exceptions, to: |
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incur debt secured by liens; |
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engage in sale/leaseback transactions; and |
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merge, consolidate or transfer all or substantially all
of our assets.
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S-2
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Lack of a Public Market for the Notes |
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There are no existing trading markets for the notes, and there
can be no assurance regarding: |
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any future development or liquidity of a trading
market for any series of notes;
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your ability to sell your notes at all; or
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the prices at which you may be able to sell your
notes. |
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Future trading prices of the notes will depend on many factors,
including: |
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prevailing interest rates;
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our operating results and financial
condition; and
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the markets for similar securities.
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We do not currently intend to apply for the listing of any
series of notes on any securities exchange or for quotation of
the notes in any dealer quotation system. |
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Use of Proceeds |
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We expect the net proceeds from the offering of the notes to be
approximately $2,086 million, after deducting underwriting
discounts and commissions and estimated expenses of the offering
that we will pay. These net proceeds will be lent to other
subsidiaries of ConocoPhillips, and the proceeds resulting from
these intercompany transactions will be used to retire debt
securities issued by other finance subsidiaries of
ConocoPhillips. |
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Further Issues |
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The 2016 notes will be limited initially to $1,250 million
in aggregate principal amount, the 2012 notes will be limited
initially to $350 million in aggregate principal amount,
and the 2036 notes will be limited initially to
$500 million in aggregate principal amount. We may,
however, reopen each series of notes and issue an
unlimited principal amount of additional notes of that series in
the future without the consent of the holders. |
S-3
USE OF
PROCEEDS
We expect the net proceeds from the offering of the notes to be
approximately $2,086 million, after deducting underwriting
discounts and estimated expenses of the offering that we will
pay. The net proceeds to Funding I from the issuance of the
Funding I notes and the net proceeds to Funding II from the
issuance of the Funding II notes will be lent to other
subsidiaries of ConocoPhillips. The proceeds resulting from
these intercompany transactions will be used to retire:
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$500 million principal amount of the 5.600% Notes due
December 1, 2006 of Burlington Resources Finance Company, a
special-purpose finance subsidiary of ConocoPhillips;
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$350 million principal amount of the 5.700% Notes due
March 1, 2007 of Burlington Resources Finance Company; and
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$1,250 million principal amount of the 5.45% Notes due
October 15, 2006 of Conoco Funding Company, a
special-purpose finance subsidiary of ConocoPhillips.
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We have issued notices of redemption with respect to the 5.600%
Notes due 2006 and the 5.700% Notes due 2007 of Burlington
Resources Finance Company, with a redemption date of
October 20, 2006. In connection with the redemption, we
expect to pay approximately $14.3 million of premium and
accrued interest. Any amounts required to retire the three
series of notes described above in excess of the net proceeds
from this offering will be funded with cash on hand.
S-4
DESCRIPTION OF
THE NOTES
We have summarized selected provisions of each series of the
notes below. The Funding I notes will be issued under an
indenture to be entered into among Funding I, as issuer,
ConocoPhillips and CPCo, as guarantors, and The Bank of New York
Trust Company, National Association, as trustee. The
Funding II notes will be issued under an indenture to be
entered into among Funding II, as issuer, ConocoPhillips
and CPCo, as guarantors, and The Bank of New York Trust Company,
National Association, as trustee. Each series of the notes is a
separate series of debt securities of Funding I or
Funding II described in the accompanying prospectus, and
this summary supplements that description. We urge you to read
that description for other provisions that may be important to
you.
In this summary description of the notes, unless we state
otherwise or the context clearly indicates otherwise, all
references to ConocoPhillips mean ConocoPhillips only, all
references to CPCo mean ConocoPhillips Company only, all
references to Funding I mean ConocoPhillips Canada Funding
Company I only, and all references to Funding II mean
ConocoPhillips Canada Funding Company II only.
General
The 2016 notes will mature on October 15, 2016 and will
bear interest at 5.625% per year. The 2012 notes will
mature on April 15, 2012 and will bear interest at
5.30% per year. The 2036 notes will mature on
October 15, 2036 and will bear interest at 5.95% per
year. Interest on the notes of each series will accrue from
October 13, 2006. In respect of each series of notes issued
by it, Funding I and Funding II:
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will pay interest semiannually on April 15 and
October 15 of each year, commencing April 15, 2007;
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will pay interest to the person in whose name a note is
registered at the close of business on the April 1 or
October 1 preceding the interest payment date;
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will compute interest on the basis of a
360-day year
consisting of twelve
30-day
months;
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will make payments on the notes at the offices of the trustee
and any paying agent; and
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may make payments by wire transfer for notes held in book-entry
form or by check mailed to the address of the person entitled to
the payment as it appears in the note register.
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Funding I and Funding II will issue the notes only in fully
registered form, without coupons, in minimum denominations of
$2,000 and any integral multiples of $1,000. The notes will not
be subject to any sinking fund or mandatory redemption
provisions.
The 2016 notes will be limited initially to $1,250 million
in aggregate principal amount, the 2012 notes will be limited
initially to $350 million in aggregate principal amount,
and the 2036 notes will be limited initially to
$500 million in aggregate principal amount. We may,
however, reopen each series of notes and issue an
unlimited principal amount of additional notes of that series in
the future without the consent of the holders. We may reopen a
series of notes only if the additional notes issued will be
fungible with the original notes of the series for United States
federal income tax purposes.
Redemption
The notes of each series will be redeemable and repayable at the
issuers option, in whole or in part, at any time and from
time to time, in principal amounts of $1,000 or any integral
multiple of $1,000 for a repayment amount equal to:
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100% of the principal amount of the notes of that series to be
redeemed and repaid; and
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a premium equal to the amount, if any, by which the sum of the
present values of the Remaining Scheduled Payments on the notes
being redeemed and repaid, discounted to the repayment date on a
semiannual basis (assuming a
360-day year
consisting of twelve
30-day
months) at the Treasury Rate plus 15 basis points for the
2016 notes, 10 basis points for the 2012 notes and
20 basis points for the 2036 notes, exceeds the principal
amount of the notes to be redeemed and repaid.
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S-5
In each case, the issuer will pay accrued but unpaid interest to
the repayment date.
Treasury Rate means the rate per year equal to:
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the yield, under the heading that represents the average for the
immediately preceding week, appearing in the most recently
published statistical release designated H.15(519)
or any successor publication which is published weekly by the
Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury
securities adjusted to constant maturity under the caption
Treasury Constant Maturities, for the maturity
corresponding to the Comparable Treasury Issue; provided
that if no maturity is within three months before or after
the maturity date for the applicable series of notes, yields for
the two published maturities most closely corresponding to the
Comparable Treasury Issue will be determined and the Treasury
Rate will be interpolated or extrapolated from those yields on a
straight line basis rounding to the nearest month; or
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if that release, or any successor release, is not published
during the week preceding the calculation date or does not
contain such yields, the rate per year equal to the semiannual
equivalent yield to maturity of the Comparable Treasury Issue,
calculated using a price for the Comparable Treasury Issue
(expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for that redemption date.
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The Treasury Rate will be calculated on the third business day
preceding the redemption date.
Comparable Treasury Issue means the United States
Treasury security selected by an Independent Investment Banker
that would be used, at the time of selection and in accordance
with customary financial practice, in pricing new issues of
corporate debt securities of comparable maturity to the
remaining term of the applicable series of notes.
Independent Investment Banker means one of the
Reference Treasury Dealers that we appoint.
Comparable Treasury Price means (a) the average
of the Reference Treasury Dealer Quotations for the redemption
date, after excluding the highest and lowest of such Reference
Treasury Dealer Quotations, or (b) if the trustee obtains
fewer than four such Reference Treasury Dealer Quotations, the
average of all quotations obtained.
Reference Treasury Dealer means each of Banc of
America Securities LLC (and its successors), Barclays Capital
Inc. (and its successors), Deutsche Bank Securities Inc. (and
its successors) and one other nationally recognized investment
banking firm that is a primary U.S. Government securities
dealer specified from time to time by us. If, however, any of
them shall cease to be a primary U.S. Government securities
dealer, we will substitute another nationally recognized
investment banking firm that is such a dealer.
Reference Treasury Dealer Quotations means, with
respect to each Reference Treasury Dealer and any redemption
date, the average, as determined by the trustee, of the bid and
asked prices for the Comparable Treasury Issue (expressed in
each case as a percentage of its principal amount) quoted in
writing to the trustee by such Reference Treasury Dealer as of
3:30 p.m., New York time, on the third business day
preceding the redemption date.
Remaining Scheduled Payments means the remaining
scheduled payments of the principal of and interest on each note
to be redeemed that would be due after the related redemption
date but for such redemption. If the redemption date is not an
interest payment date with respect to the note being redeemed,
the amount of the next succeeding scheduled interest payment on
the note will be reduced by the amount of interest accrued
thereon to that redemption date.
We will mail notice of a redemption and repayment not less than
30 days nor more than 60 days before the repayment
date to holders of notes to be redeemed and repaid.
If we redeem and repay less than all the notes of a series, the
trustee will select the particular notes of the series to be
redeemed and repaid pro rata, by lot or by another method the
trustee deems fair and appropriate. Unless there is a default in
payment of the repayment amount, on and after the repayment
date, interest will cease to accrue on the notes or portions
thereof called for redemption and repayment.
S-6
Except as described above, the notes will not be redeemable by
Funding I or Funding II prior to maturity and will not be
entitled to the benefit of any sinking fund.
Ranking
The notes will constitute senior debt of the applicable issuer
and will rank equally with the issuers other senior
unsecured debt from time to time outstanding.
ConocoPhillips and CPCos guarantees will rank
equally with all of their respective unsecured and
unsubordinated debt from time to time outstanding.
As of June 30, 2006, as adjusted to give effect to the
issuance of the notes and the application of the net proceeds as
described under Use of Proceeds, ConocoPhillips
would have had an aggregate of $25 billion of consolidated
long-term debt. Of such amount, approximately $24 billion
would have ranked equally in right of payment with the
guarantees of the notes. Approximately $1 billion would
have been secured or owed by subsidiaries other than CPCo,
Funding I, Funding II and other subsidiaries of which
ConocoPhillips has guaranteed debt, and therefore effectively
senior to the notes with respect to the assets securing the debt
or the assets of the subsidiary obligor.
Paying
Agents and Transfer Agents
The trustee for a series of notes will be appointed as paying
agent and transfer agent for the notes of that series. Payments
on the notes of a series will be made in U.S. dollars at
the office of the trustee and any paying agent for that series.
At our option, however, payments may be made by wire transfer
for notes held in book-entry form or by check mailed to the
address of the person entitled to the payment as it appears in
the security register.
Other
We will make all payments on the notes without withholding or
deducting any taxes or other governmental charges imposed by a
United States or Canadian jurisdiction, unless we are required
to do so by applicable law. A holder of the notes may, however,
be subject to U.S. federal income taxes, and taxes may be
withheld on certain payments on the notes, as described under
the caption Certain United States Federal Tax
Considerations. If we are required to withhold taxes, we
will not pay any additional, or gross up, amounts with respect
to the withholding or deduction.
We may at any time purchase notes on the open market or
otherwise at any price. We will surrender all notes that we
redeem or purchase to the trustee for cancellation. We may not
reissue or resell any of these notes.
Book-Entry
Delivery and Settlement
Global
Notes
We will issue the notes of each series in the form of one or
more permanent or temporary global notes in definitive, fully
registered, book-entry form. The global notes will be deposited
with or on behalf of The Depository Trust Company and registered
in the name of Cede & Co., as nominee of DTC, or will
remain in the custody of the trustee in accordance with the FAST
Balance Certificate Agreement between DTC and the trustee.
DTC,
Clearstream and Euroclear
Beneficial interests in the global notes will be represented
through book-entry accounts of financial institutions acting on
behalf of beneficial owners as direct and indirect participants
in DTC. Investors may hold interests in the global notes through
either DTC (in the United States), Clearstream Banking,
société anonyme, Luxembourg, or Euroclear Bank
S.A./N.V., as operator of the Euroclear System (in Europe) (the
Euroclear Operator), either directly if they are
participants of such systems or indirectly through organizations
that are participants in such systems. Clearstream and Euroclear
will hold interests on behalf of their participants through
customers securities accounts in Clearstreams and
Euroclears names on the books of
S-7
their U.S. depositaries, which in turn will hold such
interests in customers securities accounts in the
U.S. depositaries names on the books of DTC.
Citibank, N.A. will act as the U.S. depositary for
Clearstream, and JPMorgan Chase Bank, N.A. will act as the
U.S. depositary for Euroclear.
DTC has advised us as follows:
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DTC is a limited-purpose trust company organized under the New
York Banking Law, a banking organization within the
meaning of the New York Banking Law, a member of the Federal
Reserve System, a clearing corporation within the
meaning of the New York Uniform Commercial Code and a
clearing agency registered under Section 17A of
the Securities Exchange Act of 1934.
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DTC holds securities that its participants deposit with DTC and
facilitates the settlement among participants of securities
transactions, such as transfers and pledges, in deposited
securities through electronic computerized book-entry changes in
participants accounts, thereby eliminating the need for
physical movement of securities certificates.
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Direct participants include securities brokers and dealers,
banks, trust companies, clearing corporations and other
organizations.
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DTC is owned by a number of its direct participants and by The
New York Stock Exchange, Inc., the American Stock Exchange LLC
and the National Association of Securities Dealers, Inc.
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Access to the DTC system is also available to others such as
securities brokers and dealers, banks and trust companies that
clear through or maintain a custodial relationship with a direct
participant, either directly or indirectly.
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The rules applicable to DTC and its direct and indirect
participants are on file with the SEC.
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Clearstream has advised us that it is incorporated under the
laws of Luxembourg as a professional depositary. Clearstream
holds securities for its customers and facilitates the clearance
and settlement of securities transactions between its customers
through electronic book-entry changes in accounts of its
customers, thereby eliminating the need for physical movement of
certificates. Clearstream provides to its customers, among other
things, services for safekeeping, administration, clearance and
settlement of internationally traded securities and securities
lending and borrowing. Clearstream interfaces with domestic
markets in several countries. As a professional depositary,
Clearstream is subject to regulation by the Luxembourg
Commission for the Supervision of the Financial Section.
Clearstream customers are recognized financial institutions
around the world, including underwriters, securities brokers and
dealers, banks, trust companies, clearing corporations and other
organizations and may include the underwriters. Indirect access
to Clearstream is also available to others, such as banks,
brokers, dealers and trust companies that clear through or
maintain a custodial relationship with a Clearstream customer
either directly or indirectly.
Euroclear has advised us that it was created in 1968 to hold
securities for participants of Euroclear and to clear and settle
transactions between Euroclear participants through simultaneous
electronic book-entry delivery against payment, thereby
eliminating the need for physical movement of certificates and
any risk from lack of simultaneous transfers of securities and
cash. Euroclear provides various other services, including
securities lending and borrowing and interfaces with domestic
markets in several countries. Euroclear is operated by the
Euroclear Operator under contract with Euroclear Clearance
Systems S.C., a Belgian cooperative corporation (the
Cooperative). All operations are conducted by the
Euroclear Operator, and all Euroclear securities clearance
accounts and Euroclear cash accounts are accounts with the
Euroclear Operator, not the Cooperative. The Cooperative
establishes policy for Euroclear on behalf of Euroclear
participants. Euroclear participants include banks (including
central banks), securities brokers and dealers and other
professional financial intermediaries and may include the
underwriters. Indirect access to Euroclear is also available to
other firms that clear through or maintain a custodial
relationship with a Euroclear participant, either directly or
indirectly.
The Euroclear Operator has advised us that it is licensed by the
Belgian Banking and Finance Commission to carry out banking
activities on a global basis. As a Belgian bank, it is regulated
and examined by the Belgian Banking Commission.
S-8
We have provided the descriptions of the operations and
procedures of DTC, Clearstream and Euroclear in this prospectus
supplement solely as a matter of convenience. These operations
and procedures are solely within the control of those
organizations and are subject to change by them from time to
time. None of ConocoPhillips, CPCo, Funding I,
Funding II, the underwriters nor the trustee takes any
responsibility for these operations or procedures, and you are
urged to contact DTC, Clearstream and Euroclear or their
participants directly to discuss these matters.
We expect that under procedures established by DTC:
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upon deposit of the global notes with DTC or its custodian, DTC
will credit on its internal system the accounts of direct
participants designated by the underwriters with portions of the
principal amounts of the global notes; and
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ownership of the notes will be shown on, and the transfer of
ownership thereof will be effected only through, records
maintained by DTC or its nominee, with respect to interests of
direct participants, and the records of direct and indirect
participants, with respect to interests of persons other than
participants.
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The laws of some jurisdictions may require that purchasers of
securities take physical delivery of those securities in
definitive form. Accordingly, the ability to transfer interests
in the notes represented by a global note to those persons may
be limited. In addition, because DTC can act only on behalf of
its participants, who in turn act on behalf of persons who hold
interests through participants, the ability of a person having
an interest in notes represented by a global note to pledge or
transfer those interests to persons or entities that do not
participate in DTCs system, or otherwise to take actions
in respect of such interest, may be affected by the lack of a
physical definitive security in respect of such interest.
So long as DTC or its nominee is the registered owner of a
global note, DTC or that nominee will be considered the sole
owner or holder of the notes represented by that global note for
all purposes under the indenture and under the notes. Except as
provided below, owners of beneficial interests in a global note
will not be entitled to have notes represented by that global
note registered in their names, will not receive or be entitled
to receive physical delivery of certificated notes and will not
be considered the owners or holders thereof under the indenture
or under the notes for any purpose, including with respect to
the giving of any direction, instruction or approval to the
trustee. Accordingly, each holder owning a beneficial interest
in a global note must rely on the procedures of DTC and, if that
holder is not a direct or indirect participant, on the
procedures of the participant through which that holder owns its
interest, to exercise any rights of a holder of notes under the
indenture or the global note.
None of ConocoPhillips, CPCo, Funding I, Funding II
nor the trustee will have any responsibility or liability for
any aspect of the records relating to or payments made on
account of notes by DTC, Clearstream or Euroclear, or for
maintaining, supervising or reviewing any records of those
organizations relating to the notes.
Payments on the notes represented by the global notes will be
made to DTC or its nominee, as the case may be, as the
registered owner thereof. We expect that DTC or its nominee,
upon receipt of any payment on the notes represented by a global
note, will credit participants accounts with payments in
amounts proportionate to their respective beneficial interests
in the global note as shown in the records of DTC or its
nominee. We also expect that payments by participants to owners
of beneficial interests in the global note held through such
participants will be governed by standing instructions and
customary practice as is now the case with securities held for
the accounts of customers registered in the names of nominees
for such customers. The participants will be responsible for
those payments.
Distributions on the notes held beneficially through Clearstream
will be credited to cash accounts of its customers in accordance
with its rules and procedures, to the extent received by the
U.S. depositary for Clearstream.
Securities clearance accounts and cash accounts with the
Euroclear Operator are governed by the Terms and Conditions
Governing Use of Euroclear and the related Operating Procedures
of the Euroclear System, and applicable Belgian law
(collectively, the Terms and Conditions). The Terms
and Conditions govern transfers of securities and cash within
Euroclear, withdrawals of securities and cash from Euroclear,
and
S-9
receipts of payments with respect to securities in Euroclear.
All securities in Euroclear are held on a fungible basis without
attribution of specific certificates to specific securities
clearance accounts. The Euroclear Operator acts under the Terms
and Conditions only on behalf of Euroclear participants and has
no record of or relationship with persons holding through
Euroclear participants.
Distributions on the notes held beneficially through Euroclear
will be credited to the cash accounts of its participants in
accordance with the Terms and Conditions, to the extent received
by the U.S. depositary for Euroclear.
Clearance
and Settlement Procedures
Initial settlement for the notes will be made in immediately
available funds. Secondary market trading between DTC
participants will occur in the ordinary way in accordance with
DTC rules and will be settled in immediately available funds.
Secondary market trading between Clearstream customers
and/or
Euroclear participants will occur in the ordinary way in
accordance with the applicable rules and operating procedures of
Clearstream and Euroclear and will be settled using the
procedures applicable to conventional eurobonds in immediately
available funds.
Cross-market transfers between persons holding directly or
indirectly through DTC, on the one hand, and directly or
indirectly through Clearstream customers or Euroclear
participants, on the other, will be effected in DTC in
accordance with DTC rules on behalf of the relevant European
international clearing system by the U.S. depositary;
however, such cross-market transactions will require delivery of
instructions to the relevant European international clearing
system by the counterparty in such system in accordance with its
rules and procedures and within its established deadlines
(European time). The relevant European international clearing
system will, if the transaction meets its settlement
requirements, deliver instructions to the U.S. depositary
to take action to effect final settlement on its behalf by
delivering or receiving the notes in DTC, and making or
receiving payment in accordance with normal procedures for
same-day funds settlement applicable to DTC. Clearstream
customers and Euroclear participants may not deliver
instructions directly to their U.S. depositaries.
Because of time-zone differences, credits of the notes received
in Clearstream or Euroclear as a result of a transaction with a
DTC participant will be made during subsequent securities
settlement processing and dated the business day following the
DTC settlement date. Such credits or any transactions in the
notes settled during such processing will be reported to the
relevant Clearstream customers or Euroclear participants on such
business day. Cash received in Clearstream or Euroclear as a
result of sales of the notes by or through a Clearstream
customer or a Euroclear participant to a DTC participant will be
received with value on the DTC settlement date but will be
available in the relevant Clearstream or Euroclear cash account
only as of the business day following settlement in DTC.
Although DTC, Clearstream and Euroclear have agreed to the
foregoing procedures to facilitate transfers of the notes among
participants of DTC, Clearstream and Euroclear, they are under
no obligation to perform or continue to perform such procedures
and such procedures may be changed or discontinued at any time.
Certificated
Notes
We will issue certificated notes to each person that DTC
identifies as the beneficial owner of the notes represented by
the global notes upon surrender by DTC of the global notes if:
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DTC notifies us that it is no longer willing or able to act as a
depositary for the global notes, and we have not appointed a
successor depositary within 90 days of that notice;
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an event of default has occurred and is continuing, and DTC
requests the issuance of certificated notes; or
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we determine not to have the notes represented by a global note.
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Neither we nor the trustee will be liable for any delay by DTC,
its nominee or any direct or indirect participant in identifying
the beneficial owners of the related notes. We and the trustee
may conclusively rely on, and will be protected in relying on,
instructions from DTC or its nominee for all purposes, including
with respect to the registration and delivery, and the
respective principal amounts, of the notes to be issued.
S-10
CERTAIN UNITED
STATES FEDERAL TAX CONSIDERATIONS
The following is a summary of certain United States federal
income and estate tax considerations relating to the ownership
and disposition of the notes by an entity that is a foreign
corporation as to the United States, within the meaning of
Section 7701(a) of the Internal Revenue Code of 1986, as
amended (the Internal Revenue Code), or by an
individual who is not a citizen or resident of the United
States, within the meaning of Section 7701(b) of the
Internal Revenue Code (a nonresident alien). An
organization that is a partnership for United States federal
income tax purposes should consult with its own tax adviser as
to the United States federal tax considerations that are
applicable to it and to its partners.
Such summary, which does not purport to be a complete analysis
of all the relevant tax considerations, is based upon the
provisions of the Internal Revenue Code, regulations, rulings
and judicial decisions as of the date of this prospectus
supplement. These authorities may be changed, perhaps
retroactively, so as to result in United States federal tax
consequences different from those set forth below. We have not
sought any ruling from the Internal Revenue Service (the
IRS) with respect to the statements made in the
following summary, and we cannot assure you that the IRS will
agree with such statements.
Under the portfolio interest exemption, interest income on a
note that you receive will not be subject to United States
federal income tax or withholding if you are a foreign
corporation or a non resident alien and the interest is not
effectively connected with the conduct of a trade or business in
the United States by you and you
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do not own, actually or constructively, within the meaning of
Section 871(h)(3)(C) of the Internal Revenue Code,
10 percent or more of the total combined voting power of
all classes of ConocoPhillips voting stock and
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in the case of a note that is issued by Funding I do not own
actually or constructively, within the meaning of
Section 871(h)(3)(C) of the Internal Revenue Code, either
10 percent or more of the total combined voting power of
all classes of the stock of Funding I or 10 percent or more
of the capital or profits interest in Funding I and
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in the case of a note that is issued by Funding II do not own
actually or constructively, within the meaning of
Section 871(h)(3)(C) of the Internal Revenue Code, either
10 percent or more of the total combined voting power of
all classes of the stock of Funding II or 10 percent
or more of the capital or profits interest in Funding II
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are not a bank whose receipt of interest on a note is described
in Section 881(c)(3)(A) of the Internal Revenue Code;
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are not a controlled foreign corporation that is related, within
the meaning of Section 864(d)(4) of the Internal Revenue
Code, to ConocoPhillips and
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in the case of a note that is issued by Funding I are not so
related to Funding I and
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in the case of a note that is issued by Funding II are not
so related to Funding II; and
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the United States person who would otherwise be required to
withhold tax from the interest receives a statement (which meets
the requirements of Section 871(h)(5) of the Internal
Revenue Code and must be provided under penalties of perjury)
that the beneficial owner of the note is not a United States
person.
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If a statement meeting the requirements of
Section 871(h)(5) of the Internal Revenue Code is not
received by the person who would otherwise be required to
withhold tax from the interest or if the portfolio interest
exemption is not available for another reason, then the interest
on a note may be subject to United States withholding tax at a
rate of 30 percent (subject to reduction under an
applicable tax treaty).
The preceding paragraph assumes that Funding I and
Funding II will be disregarded for United States federal
income tax purposes and that the notes will be treated for
United States federal income tax purposes as
S-11
an obligation of a domestic corporation. If that were not the
case, then the conclusions in the preceding paragraph would
continue to be true and would be true in certain cases on weaker
conditions.
Interest on a note that is effectively connected with the
conduct of a trade or business in the United States by a holder
of a note who is a foreign corporation or a nonresident alien is
not subject to withholding if such a holder provides a properly
completed IRS
Form W-8ECI.
However, such a holder will generally be subject to United
States income tax on such interest on a net income basis at
rates applicable to a United States person, and a holder who is
a foreign corporation may also be subject to the United States
branch profits tax in respect of such interest.
You will not be subject to United States federal income tax on
any gain realized on the sale, exchange, redemption or other
disposition of a note unless the gain is effectively connected
with your conduct of a trade or business in the United States or
you are an individual who is present in the United States for
183 days or more in the taxable year in which the sale,
exchange, redemption or other disposition occurs and certain
other conditions are met.
The interest on a note will generally be reported to the IRS on
IRS
Form 1042-S.
Neither information reporting on IRS Form 1099 nor backup
withholding will apply to principal or interest payments or to
amounts received on the sale, exchange or redemption of a note
if an IRS
Form W-8BEN
is provided to us or other appropriate person and if, in the
case of amounts received on the sale, exchange or redemption of
a note, certain other information is provided. However, the
exemption from backup withholding and information reporting
requirements does not apply if the withholding agent or an
intermediary knows or has reason to know that such exemption is
not available to you.
Notes that are owned by an individual at the time of his or her
death will, if such individual is not a citizen of the United
States or resident of the United States for United States
federal estate tax purposes at that time, not be subject to
United States federal estate tax if the interest income on the
notes would be eligible at that time for the portfolio interest
exemption if a statement meeting the requirements of
Section 871(h)(5) of the Internal Revenue Code were
provided.
This summary of certain United States federal tax
considerations is for general information only and is not tax
advice. You are urged to consult your tax advisor with respect
to the application of United States federal tax laws to your
particular situation as well as any tax consequences under the
laws of any state, local, foreign or other taxing jurisdiction
or under any applicable tax treaty.
S-12
CERTAIN CANADIAN
TAX CONSIDERATIONS
The following is a general summary of the principal Canadian
federal income tax considerations generally applicable under the
Income Tax Act (Canada) (the Tax Act) to a holder (a
Holder) of notes who acquires the notes in this
offering and who, at all relevant times, for purposes of the Tax
Act, holds the notes as capital property, deals with
ConocoPhillips, Funding I and Funding II at arms
length, is not a resident or deemed to be a resident of Canada
and does not use or hold the notes and is not deemed to use or
hold the notes in, or in the course of, carrying on business in
Canada. Special rules, which are not discussed below, may apply
to a Holder who is a non-resident insurer which carries on
business in Canada and elsewhere. This summary does not apply to
financial institutions within the meaning of
section 142.2 of the Tax Act.
This summary is based on the current provisions of the Tax Act
and the regulations thereunder (the Regulations),
and on an understanding of the current published administrative
and assessing practices of the Canada Revenue Agency
(CRA). This summary takes into account all specific
proposals to amend the Tax Act and Regulations (the Tax
Proposals) publicly announced by or on behalf of the
Minister of Finance (Canada) prior to the date of this
prospectus supplement. There is no assurance that the Tax
Proposals will be enacted in their current form or at all. This
summary does not otherwise take into account or anticipate any
changes in law or the administrative and assessing practices of
the CRA, whether by judicial, governmental or legislative
decision or action, nor does it take into account tax
legislation or considerations of any province, territory, state,
local or foreign jurisdiction. The provisions of provincial
income tax legislation vary from province to province in Canada
and in some cases differ from federal income tax legislation.
The following is a general summary only, and each Holder is
urged to consult with such Holders own tax advisor with
respect to the Canadian federal income tax considerations set
forth below as applicable to the Holders particular
circumstances and any other federal, provincial, territorial,
state, local or foreign tax consequences to it of holding and
disposing of notes.
Taxation
of Interest on Notes
Based on the current administrative practice of the CRA, a
Holder will not be subject to Canadian withholding tax in
respect of interest, principal or premium paid or credited on
the notes issued hereunder; provided that the Holder deals with
Funding I and Funding II, as applicable, at arms
length within the meaning of the Tax Act at the time of such
payment or credit. For purposes of the Tax Act, related persons,
as defined therein, are deemed not to deal at arms length
and it is a question of fact whether persons not related to each
other deal at arms length.
Disposition
of Notes
A Holder will not generally be subject to tax under the Tax Act
in respect of any capital gain realized by such Holder on a
disposition (including a redemption) of a note.
S-13
UNDERWRITING
We and the underwriters for the offering named below have
entered into an underwriting agreement with respect to the
notes. Subject to certain conditions, each underwriter has
severally agreed to purchase the principal amount of notes
indicated in the following table at the public offering prices
less the underwriting discounts set forth on the cover page of
this prospectus supplement.
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Principal
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Principal
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Principal
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Amount
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Amount
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Amount
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Underwriter
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of 2016 Notes
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of 2012 Notes
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of 2036 Notes
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Banc of America Securities LLC
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$
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162,500,000
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$
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45,500,000
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$
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65,000,000
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Barclays Capital Inc.
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162,500,000
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45,500,000
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65,000,000
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Merrill Lynch, Pierce,
Fenner & Smith
Incorporated
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162,500,000
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45,500,000
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65,000,000
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Deutsche Bank Securities Inc.
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162,500,000
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45,500,000
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65,000,000
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UBS Securities LLC
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162,500,000
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45,500,000
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65,000,000
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ABN AMRO Incorporated
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43,750,000
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12,250,000
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17,500,000
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BNP Paribas Securities Corp.
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43,750,000
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12,250,000
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17,500,000
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Calyon Securities (USA) Inc.
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43,750,000
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12,250,000
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17,500,000
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Daiwa Securities SMBC Europe
Limited
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43,750,000
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12,250,000
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17,500,000
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DnB NOR Markets, Inc.
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43,750,000
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12,250,000
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17,500,000
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Greenwich Capital Markets,
Inc.
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43,750,000
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12,250,000
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17,500,000
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HSBC Securities (USA) Inc.
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43,750,000
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12,250,000
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17,500,000
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ING Financial Markets LLC
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43,750,000
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12,250,000
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17,500,000
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Mitsubishi UFJ Securities
International plc
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43,750,000
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12,250,000
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17,500,000
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SG Americas Securities, LLC
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43,750,000
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12,250,000
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17,500,000
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Total
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$
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1,250,000,000
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$
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350,000,000
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$
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500,000,000
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The underwriters are committed to take and pay for all of the
notes being offered, if any are taken.
The underwriters propose to offer some of the notes of each
series directly to the public at the applicable public offering
price set forth on the cover page of this prospectus supplement
and some of those notes to certain dealers at that public
offering price less a concession not in excess of:
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0.300% of the principal amount in the case of the 2016 notes;
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0.200% of the principal amount in the case of the 2012
notes; and
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0.500% of the principal amount in the case of the 2036 notes.
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The underwriters may allow, and such dealers may reallow, a
concession to certain other dealers not in excess of:
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0.200% of the principal amount in the case of the 2016 notes;
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0.150% of the principal amount in the case of the 2012
notes; and
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0.250% of the principal amount in the case of the 2036 notes.
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After the initial offering of the notes to the public, the
representatives may change the public offering prices and
concessions.
The notes are new issues of securities with no established
trading market. We have been advised by the underwriters that
the underwriters intend to make a market in each series of the
notes but are not obligated to do so and may discontinue market
making at any time without notice. No assurance can be given as
to the liquidity of the trading markets for the notes.
In connection with the offering, the underwriters may purchase
and sell notes in the open market. These transactions may
include short sales, stabilizing transactions and purchases to
cover positions created by short sales. Short sales involve the
sale by the underwriters of a greater number of notes than they
are required to
S-14
purchase in the offering. Stabilizing transactions consist of
certain bids or purchases made for the purpose of preventing or
retarding a decline in the market price of the notes while the
offering is in progress.
The underwriters also may impose a penalty bid. This occurs when
a particular underwriter repays to the underwriters a portion of
the underwriting discount received by it because the
representatives have repurchased notes sold by or for the
account of such underwriter in stabilizing or short covering
transactions.
These activities by the underwriters, as well as other purchases
by the underwriters for their own accounts, may stabilize,
maintain or otherwise affect the market prices of the notes. As
a result, the prices of the notes may be higher than the prices
that otherwise might exist in the open market. If these
activities are commenced, they may be discontinued by the
underwriters at any time. These transactions may be effected in
the
over-the-counter
market or otherwise.
In relation to each Member State of the European Economic Area
which has implemented the Prospectus Directive (each, a Relevant
Member State), each underwriter has represented and agreed that
with effect from and including the date on which the Prospectus
Directive is implemented in that Relevant Member State (the
Relevant Implementation Date) it has not made and will not make
an offer of notes to the public in that Relevant Member State
prior to the publication of a prospectus in relation to the
notes which has been approved by the competent authority in that
Relevant Member State or, where appropriate, approved in another
Relevant Member State and notified to the competent authority in
that Relevant Member State, all in accordance with the
Prospectus Directive, except that it may, with effect from and
including the Relevant Implementation Date, make an offer of
notes to the public in that Relevant Member State at any time:
(a) to legal entities which are authorised or regulated to
operate in the financial markets or, if not so authorised or
regulated, whose corporate purpose is solely to invest in
securities;
(b) to any legal entity which has two or more of
(1) an average of at least 250 employees during the last
financial year; (2) a total balance sheet of more than
43,000,000 and (3) an annual net turnover of more
than 50,000,000, as shown in its last annual or
consolidated accounts; or
(c) in any other circumstances which do not require the
publication by the issuer of a prospectus pursuant to
Article 3 of the Prospectus Directive.
For the purposes of this provision, the expression an
offer of notes to the public in relation to any
notes in any Relevant Member State means the communication in
any form and by any means of sufficient information on the terms
of the offer and the notes to be offered so as to enable an
investor to decide to purchase or subscribe the notes, as the
same may be varied in that Member State by any measure
implementing the Prospectus Directive in that Member State and
the expression Prospectus Directive means Directive 2003/71/EC
and includes any relevant implementing measure in each Relevant
Member State.
Each Underwriter has represented and agreed that:
(a) it has only communicated or caused to be communicated
and will only communicate or cause to be communicated an
invitation or inducement to engage in investment activity
(within the meaning of section 21 of FSMA) to persons who
have professional experience in matters relating to investments
falling within Article 19(5) of the Financial Services and
Markets Act 2000 (Financial Promotion) Order 2005 or in
circumstances in which section 21 of FSMA does not apply to
the company; and
(b) it has complied with, and will comply with, all
applicable provisions of FSMA with respect to anything done by
it in relation to the notes in, from or otherwise involving the
United Kingdom.
The notes may not be offered or sold by means of any document
other than (i) in circumstances which do not constitute an
offer to the public within the meaning of the Companies
Ordinance (Cap.32, Laws of Hong Kong), or (ii) to
professional investors within the meaning of the
Securities and Futures Ordinance (Cap.571, Laws of Hong Kong)
and any rules made thereunder, or (iii) in other
circumstances which do not result in the document being a
prospectus within the meaning of the Companies
Ordinance (Cap.32, Laws of Hong Kong), and no advertisement,
invitation or document relating to the notes may be issued or
may be in the possession of any person for the purpose of issue
(in each case whether in Hong Kong or elsewhere),
S-15
which is directed at, or the contents of which are likely to be
accessed or read by, the public in Hong Kong (except if
permitted to do so under the laws of Hong Kong) other than with
respect to notes which are or are intended to be disposed of
only to persons outside Hong Kong or only to professional
investors within the meaning of the Securities and Futures
Ordinance (Cap. 571, Laws of Hong Kong) and any rules made
thereunder.
The notes have not been and will not be registered under the
Securities and Exchange Law of Japan (the Securities and
Exchange Law) and each underwriter has agreed that it will not
offer or sell any notes, directly or indirectly, in Japan or to,
or for the benefit of, any resident of Japan (which term as used
herein means any person resident in Japan, including any
corporation or other entity organized under the laws of Japan),
or to others for re-offering or resale, directly or indirectly,
in Japan or to a resident of Japan, except pursuant to an
exemption from the registration requirements of, and otherwise
in compliance with, the Securities and Exchange Law and any
other applicable laws, regulations and ministerial guidelines of
Japan.
This prospectus has not been registered as a prospectus with the
Monetary Authority of Singapore. Accordingly, this prospectus
and any other document or material in connection with the offer
or sale, or invitation for subscription or purchase, of the
notes may not be circulated or distributed, nor may the notes be
offered or sold, or be made the subject of an invitation for
subscription or purchase, whether directly or indirectly, to
persons in Singapore other than (i) to an institutional
investor under Section 274 of the Securities and Futures
Act, Chapter 289 of Singapore (the SFA),
(ii) to a relevant person, or any person pursuant to
Section 275(1A), and in accordance with the conditions,
specified in Section 275 of the SFA or (iii) otherwise
pursuant to, and in accordance with the conditions of, any other
applicable provision of the SFA.
Where the notes are subscribed or purchased under
Section 275 by a relevant person which is: (a) a
corporation (which is not an accredited investor) the sole
business of which is to hold investments and the entire share
capital of which is owned by one or more individuals, each of
whom is an accredited investor; or (b) a trust (where the
trustee is not an accredited investor) whose sole purpose is to
hold investments and each beneficiary is an accredited investor,
shares, debentures and units of shares and debentures of that
corporation or the beneficiaries rights and interest in
that trust shall not be transferable for 6 months after
that corporation or that trust has acquired the notes under
Section 275 except: (1) to an institutional investor
under Section 274 of the SFA or to a relevant person, or
any person pursuant to Section 275(1A), and in accordance
with the conditions, specified in Section 275 of the SFA;
(2) where no consideration is given for the transfer; or
(3) by operation of law.
We estimate that our share of the total expenses of the
offering, excluding underwriting discounts and commissions, will
be approximately $1.0 million. The underwriters have also
agreed to reimburse us for certain of the expenses incurred by
us in connection with this offering.
We have agreed to indemnify the several underwriters against
certain liabilities, including liabilities under the Securities
Act of 1933.
The underwriters have from time to time provided, and in the
future may provide, certain investment banking and financial
advisory services to us and our affiliates, for which they have
received, and in the future would receive, customary fees.
Amounts outstanding under existing debt securities issued by
other finance subsidiaries of ConocoPhillips will be repaid in
connection with this offering.
LEGAL
MATTERS
Wayne C. Byers, Esq., our Senior Counsel, Baker Botts
L.L.P., Houston, Texas, our outside counsel, and McInnes Cooper,
Halifax, Nova Scotia, will issue opinions about certain legal
matters in connection with the offering of the notes for us.
Cravath, Swaine & Moore LLP, New York, New York, will
issue an opinion about certain legal matters in connection with
the offering for the underwriters. Cravath, Swaine &
Moore LLP represents us from time to time in connection with
various matters.
S-16
PROSPECTUS
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ConocoPhillips
Canada Funding Company I
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ConocoPhillips
Canada Funding Company II
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Senior
Debt Securities
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Senior
Debt Securities
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guaranteed as described in this prospectus by
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guaranteed as described in this prospectus by
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ConocoPhillips
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ConocoPhillips
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and
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and
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ConocoPhillips
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ConocoPhillips
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Company
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Company
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We will provide the specific terms of the securities in
supplements to this prospectus. You should read this prospectus
and any supplement carefully before you invest.
Neither the Securities and Exchange Commission nor any state
securities commission has approved or disapproved of these
securities or determined whether this prospectus is truthful or
complete. Any representation to the contrary is a criminal
offense.
The date of this prospectus is
October 6, 2006
TABLE OF
CONTENTS
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F-1
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ABOUT THIS
PROSPECTUS
This prospectus is part of a joint registration statement that
we have filed with the U.S. Securities and Exchange
Commission using a shelf registration process. Using
this process, we may offer any combination of the securities
described in this prospectus in one or more offerings. This
prospectus provides you with a general description of the
securities we may offer. Each time we use this prospectus to
offer securities, we will provide a prospectus supplement and,
if applicable, a pricing supplement that will describe the
specific terms of the offering. The prospectus supplement and
any pricing supplement may also add to, update or change the
information contained in this prospectus. Please carefully read
this prospectus, the prospectus supplement and any pricing
supplement, in addition to the information contained in the
documents we refer to under the heading Where You Can Find
More Information.
ABOUT
CONOCOPHILLIPS
ConocoPhillips is an international, integrated energy company.
ConocoPhillips has four core activities worldwide: petroleum
exploration and production; petroleum refining, marketing,
supply and transportation; natural gas gathering, processing and
marketing; and chemicals and plastics production and
distribution. In addition, ConocoPhillips is investing in
several emerging businesses: fuels technology,
gas-to-liquids,
power generation and emerging technologies. ConocoPhillips
principal executive office is located at 600 North Dairy
Ashford, Houston, Texas 77079, telephone
(281) 293-1000.
ABOUT
CONOCOPHILLIPS COMPANY
ConocoPhillips Company is a direct wholly owned subsidiary of
ConocoPhillips. Its principal executive offices are located at
600 North Dairy Ashford, Houston, Texas 77079, telephone
(281) 293-1000.
In this prospectus, we refer to ConocoPhillips Company as
CPCo.
ABOUT
CONOCOPHILLIPS CANADA FUNDING COMPANY I
ConocoPhillips Canada Funding Company I is an unlimited
liability company organized in September 2006 under the laws of
Nova Scotia, Canada. ConocoPhillips Canada Funding Company I is
a direct wholly owned special purpose finance subsidiary of
Conoco Petroleum Operations Inc. (itself an indirect wholly
owned subsidiary of ConocoPhillips), organized to engage in
financing activities to raise funds for the business
1
operations of ConocoPhillips and its subsidiaries. The principal
executive office of ConocoPhillips Canada Funding Company I is
located at 600 North Dairy Ashford, Houston, Texas 77079,
telephone
(281) 293-1000.
In this prospectus, we refer to ConocoPhillips Canada Funding
Company I as Funding I.
ABOUT
CONOCOPHILLIPS CANADA FUNDING COMPANY II
ConocoPhillips Canada Funding Company II is an unlimited
liability company organized in September 2006 under the laws of
Nova Scotia, Canada. ConocoPhillips Canada Funding
Company II is a direct wholly owned special purpose finance
subsidiary of Burlington Resources Inc. (itself a direct wholly
owned subsidiary of ConocoPhillips), organized to engage in
financing activities to raise funds for the business operations
of ConocoPhillips and its subsidiaries. The principal executive
office of ConocoPhillips Canada Funding Company II is
located at 600 North Dairy Ashford, Houston, Texas 77079,
telephone
(281) 293-1000.
In this prospectus, we refer to ConocoPhillips Canada Funding
Company II as Funding II.
WHERE YOU CAN
FIND MORE INFORMATION
ConocoPhillips files annual, quarterly and current reports,
proxy statements and other information with the SEC. You can
read and copy these materials at the SECs public reference
room at 100 F Street, N.E., Washington, D.C. 20549. You can
obtain information about the operation of the SECs public
reference room by calling the SEC at
1-800-SEC-0330.
The SEC also maintains an Internet site that contains
information ConocoPhillips has filed electronically with the
SEC, which you can access over the Internet at
http://www.sec.gov. You can also obtain information about
ConocoPhillips at the offices of the New York Stock Exchange,
20 Broad Street, New York, New York 10005. CPCo, Funding I
and Funding II do not file separate reports, proxy
statements or other information with the SEC under the
Securities Exchange Act of 1934.
This prospectus is part of a joint registration statement we
have filed with the SEC relating to the securities we may offer.
As permitted by SEC rules, this prospectus does not contain all
of the information we have included in the registration
statement and the accompanying exhibits and schedules we file
with the SEC. You may refer to the registration statement,
exhibits and schedules for more information about us and the
securities. The registration statement, exhibits and schedules
are available at the SECs public reference room or through
its Internet site.
The SEC allows us to incorporate by reference the
information ConocoPhillips has filed with it, which means that
we can disclose important information to you by referring you to
those documents. The information we incorporate by reference is
an important part of this prospectus, and later information that
ConocoPhillips files with the SEC will automatically update and
supersede this information. We incorporate by reference the
documents listed below and any future filings ConocoPhillips
makes with the SEC under Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act until the termination of this offering. The
documents we incorporate by reference are:
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ConocoPhillips Annual Report on
Form 10-K
for the year ended December 31, 2005;
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ConocoPhillips Quarterly Reports on
Form 10-Q
for the quarterly periods ended March 31, 2006 and
June 30, 2006; and
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ConocoPhillips Current Reports on
Form 8-K
as filed with the SEC on February 16, 2006,
February 22, 2006, March 20, 2006, March 31, 2006
(as amended by a Current Report on
Form 8-K/A
filed with the SEC on April 3, 2006), April 10, 2006,
April 11, 2006, May 11, 2006, May 15, 2006,
August 10, 2006 and October 6, 2006.
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You may request a copy of these filings, other than an exhibit
to these filings unless we have specifically incorporated that
exhibit by reference into the filing, at no cost, by writing or
telephoning ConocoPhillips at the following address:
ConocoPhillips
Shareholder Relations Department
P. O. Box 2197
Houston, Texas
77079-2197
Telephone:
(281) 293-6800
You should rely only on the information contained or
incorporated by reference in this prospectus, the prospectus
supplement and any pricing supplement. We have not authorized
any person, including any salesman or broker, to provide
information other than that provided in this prospectus, the
prospectus supplement or any pricing supplement. We have not
authorized anyone to provide you with different information. We
are not making an offer of the securities in any jurisdiction
where the offer is not permitted. You should assume that the
information in this prospectus, the prospectus supplement and
any pricing supplement is accurate only as of the date on its
cover page and that any information we have incorporated by
reference is accurate only as of the date of the document
incorporated by reference.
FORWARD-LOOKING
INFORMATION
This prospectus, including the information we incorporate by
reference, includes forward-looking statements within the
meaning of Section 27A of the Securities Act of 1933 and
Section 21E of the Securities Exchange Act of 1934. You can
identify our forward-looking statements by the words
expects, anticipates,
intends, plans, projects,
believes, estimates and similar
expressions.
We have based the forward-looking statements relating to
ConocoPhillips operations on its current expectations,
estimates and projections about ConocoPhillips and the
industries in which it operates in general. We caution you that
these statements are not guarantees of future performance and
involve risks, uncertainties and assumptions that we cannot
predict. In addition, we have based many of these
forward-looking statements on assumptions about future events
that may prove to be inaccurate. Accordingly,
ConocoPhillips actual outcomes and results may differ
materially from what we have expressed or forecast in the
forward-looking statements. Any differences could result from a
variety of factors, including the following:
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fluctuations in crude oil, natural gas and natural gas liquids
prices, refining and marketing margins and margins for
ConocoPhillips chemicals business;
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changes in the business, operations, results and prospects of
ConocoPhillips;
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the operation and financing of ConocoPhillips midstream
and chemicals joint ventures;
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potential failure or delays in achieving expected reserve or
production levels from existing and future oil and gas
development projects due to operating hazards, drilling risks
and the inherent uncertainties in predicting oil and gas
reserves and oil and gas reservoir performance;
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unsuccessful exploratory drilling activities;
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failure of new products and services to achieve market
acceptance;
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unexpected changes in costs or technical requirements for
constructing, modifying or operating facilities for exploration
and production projects, manufacturing or refining;
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unexpected technological or commercial difficulties in
manufacturing or refining ConocoPhillips refined products,
including synthetic crude oil, and chemicals products;
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lack of, or disruptions in, adequate and reliable transportation
for ConocoPhillips crude oil, natural gas, natural gas
liquids, liquefied natural gas and refined products;
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inability to timely obtain or maintain permits, including those
necessary for construction of liquefied natural gas terminals or
regasification facilities, comply with government regulations or
make capital expenditures required to maintain compliance;
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failure to complete definitive agreements and feasibility
studies for, and to timely complete construction of, announced
and future liquefied natural gas projects and related facilities;
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potential disruption or interruption of ConocoPhillips
operations due to accidents, extraordinary weather events, civil
unrest, political events or terrorism;
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international monetary conditions and exchange controls;
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liability for remedial actions, including removal and
reclamation obligations, under environmental regulations;
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liability resulting from litigation;
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general domestic and international economic and political
conditions, including armed hostilities and governmental
disputes over territorial boundaries;
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changes in tax and other laws, regulations or royalty rules
applicable to ConocoPhillips business; and
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inability to obtain economical financing for exploration and
development projects, construction or modification of facilities
and general corporate purposes.
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USE OF
PROCEEDS
Unless we inform you otherwise in the prospectus supplement, the
net proceeds from the sale of the securities will be used,
first, for repayment or refinancing of debt, including debt
securities issued by other finance subsidiaries of
ConocoPhillips, and, second, for general corporate purposes,
including acquisitions, working capital, capital expenditures
and repurchases and redemptions of securities. Pending any
specific application, we may initially invest funds in
short-term marketable securities or apply them to the reduction
of other short-term indebtedness.
RATIO OF EARNINGS
TO FIXED CHARGES
The following table presents the historical ratio of earnings to
fixed charges of ConocoPhillips for the six-month period ended
June 30, 2006, and each of the years in the five-year
period ended December 31, 2005. The following table also
presents the unaudited pro forma ratio of earnings to fixed
charges of ConocoPhillips for the six-month period ended
June 30, 2006, and the year ended December 31, 2005,
giving effect to the March 2006 acquisition of Burlington
Resources Inc. using the purchase method of accounting, as if
the acquisition had occurred on January 1, 2006, and
January 1, 2005, respectively. Please read the unaudited
pro forma financial statements included in the amendment to
ConocoPhillips Current Report on
Form 8-K/A
as filed with the SEC on April 3, 2006, as well as
Exhibit 99 to ConocoPhillips Quarterly Report on
Form 10-Q
for the quarterly period ended June 30, 2006.
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Six Months
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Ended
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June 30
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Year Ended December 31
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2005
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2004
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2003
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2002
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2001
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Ratio of Earnings to Fixed
Charges:
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ConocoPhillips
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18.0
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20.8
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12.4
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7.0
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2.9
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5.3x
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ConocoPhillips Pro Forma
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14.6
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13.1
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For purposes of this table, earnings consist of
income from continuing operations before income taxes, plus
fixed charges (excluding capitalized interest and the portion of
the preferred dividend requirement of a subsidiary not
previously deducted from pretax income, but including
amortization of amounts previously
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capitalized), less undistributed earnings of equity investees of
ConocoPhillips. Fixed charges consist of interest
(including capitalized interest) on all debt, amortization of
debt discounts and expenses incurred on issuance, and that
portion of rental expense believed to represent interest.
DESCRIPTION OF
THE DEBT SECURITIES
The debt securities of Funding I covered by this prospectus will
be Funding Is general unsecured obligations. Funding I
will issue debt securities fully and unconditionally guaranteed
by ConocoPhillips and CPCo on a senior unsecured basis under an
indenture to be entered into among Funding I, as issuer,
ConocoPhillips and CPCo, as guarantors, and The Bank of New York
Trust Company, National Association, as trustee. We refer to
this indenture as the Funding I indenture. The debt securities
of Funding II covered by this prospectus will be
Funding IIs general unsecured obligations.
Funding II will issue debt securities fully and
unconditionally guaranteed by ConocoPhillips and CPCo on a
senior unsecured basis under an indenture to be entered into
among Funding II, as issuer, ConocoPhillips and CPCo, as
guarantors, and The Bank of New York Trust Company, National
Association, as trustee. We refer to this indenture as the
Funding II indenture. We refer to the Funding I indenture
and the Funding II indenture collectively as the indentures.
We have summarized material provisions of the indentures, the
debt securities and the guarantees below. This summary is not
complete. We have filed forms of the indentures with the SEC as
exhibits to the registration statement, and you should read the
indentures for provisions that may be important to you.
In this summary description of the debt securities, unless we
state otherwise or the context clearly indicates otherwise, all
references to ConocoPhillips mean ConocoPhillips only, all
references to CPCo mean ConocoPhillips Company only, all
references to Funding I mean ConocoPhillips Canada Funding
Company I only, and all references to Funding II mean
ConocoPhillips Canada Funding Company II only.
General
The debt securities of Funding I and Funding II will
constitute senior debt of the issuer and will rank equally with
all of its unsecured and unsubordinated debt. Neither indenture
limits the amount of debt securities that may be issued under
that indenture, and neither limits the amount of other unsecured
debt or securities that ConocoPhillips, CPCo, Funding I or
Funding II may issue. Funding I and Funding II may
issue debt securities under the applicable indenture from time
to time in one or more series, each in an amount authorized
prior to issuance. No securities are outstanding under either
the Funding I indenture or the Funding II indenture.
Funding I and Funding II are special purpose financing
subsidiaries formed solely as financing vehicles for
ConocoPhillips and its subsidiaries. The ability of either
Funding I or Funding II to pay its debt service
obligations, including any payments required to be made under
its debt securities, is dependent upon its receipt of payments
from ConocoPhillips and its subsidiaries. If ConocoPhillips and
its subsidiaries were not to make such payments for any reason,
the holders of the debt securities issued by either Funding I or
Funding II would have to rely on the enforcement of
ConocoPhillips and CPCos guarantees described below.
ConocoPhillips conducts substantially all its operations through
subsidiaries, and those subsidiaries generate substantially all
its operating income and cash flow. As a result, distributions
or advances from those subsidiaries are the principal source of
funds necessary to meet the debt service obligations of
ConocoPhillips. Contractual provisions or laws, as well as the
subsidiaries financial condition and operating
requirements, may limit the ability of ConocoPhillips to obtain
cash from its subsidiaries that it requires to pay its debt
service obligations, including any payments required to be made
under its guarantee of the debt securities of Funding I and
Funding II. In addition, holders of the debt securities will
have a junior position to the claims of creditors of the
subsidiaries of ConocoPhillips on their assets and earnings.
Other than the restrictions on liens and sale/leaseback
transactions described below under Restrictive
Covenants, neither indenture contains any covenants or
other provisions designed to protect holders of the debt
securities in the event ConocoPhillips participates in a highly
leveraged transaction or upon a change of control. The
indentures also do not contain provisions that give holders the
right to require Funding I or
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Funding II to repurchase their securities in the event of a
decline in ConocoPhillips credit ratings for any reason,
including as a result of a takeover, recapitalization or similar
restructuring or otherwise.
The prospectus supplement relating to any series of debt
securities being offered will include specific terms relating to
the offering. These terms will include some or all of the
following:
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the issuer of the debt securities;
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the title of the debt securities;
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the total principal amount of the debt securities;
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whether the debt securities will be issued in individual
certificates to each holder or in the form of temporary or
permanent global securities held by a depositary on behalf of
holders;
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the date or dates on which the principal of and any premium on
the debt securities will be payable;
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any interest rate, the date from which interest will accrue,
interest payment dates and record dates for interest payments;
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whether and under what circumstances any additional amounts with
respect to the debt securities will be payable;
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the place or places where payments on the debt securities will
be payable;
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any provisions for optional redemption or early repayment;
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any provisions that would require the redemption, purchase or
repayment of debt securities;
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the denominations in which the debt securities will be issued;
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whether payments on the debt securities will be payable in
foreign currency or currency units or another form and whether
payments will be payable by reference to any index or formula;
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the portion of the principal amount of debt securities that will
be payable if the maturity is accelerated, if other than the
entire principal amount;
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any additional means of defeasance of the debt securities, any
additional conditions or limitations to defeasance of the debt
securities or any changes to those conditions or limitations;
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any changes or additions to the events of default or covenants
described in this prospectus;
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any restrictions or other provisions relating to the transfer or
exchange of debt securities;
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any terms for the conversion or exchange of the debt securities
for other securities of Funding I, Funding II or any
other entity; and
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any other terms of the debt securities not inconsistent with the
applicable indenture.
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We may sell the debt securities at a discount, which may be
substantial, below their stated principal amount. These debt
securities may bear no interest or interest at a rate that at
the time of issuance is below market rates. If we sell these
debt securities, we will describe in the prospectus supplement
any material United States federal income tax consequences and
other special considerations.
If we sell any of the debt securities for any foreign currency
or currency unit or if payments on the debt securities are
payable in any foreign currency or currency unit, we will
describe in the prospectus supplement the restrictions,
elections, tax consequences, specific terms and other
information relating to those debt securities and the foreign
currency or currency unit.
Guarantees
ConocoPhillips and CPCo will jointly and severally, fully and
unconditionally guarantee on a senior unsecured basis the full
and prompt payment of the principal of and any premium and
interest on the debt securities issued by each of Funding I and
Funding II when and as the payment becomes due and payable,
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whether at maturity or otherwise. The guarantees provide that in
the event of a default in the payment of principal of or any
premium or interest on a debt security issued by Funding I or
Funding II, the holder of that debt security may institute
legal proceedings directly against either ConocoPhillips or CPCo
to enforce the guarantees without first proceeding against
Funding I or Funding II, as applicable. The indentures
provide that ConocoPhillips and CPCo may under certain
circumstances assume all rights and obligations of Funding I or
Funding II under the applicable indenture with respect to a
series of debt securities issued by Funding I or
Funding II. The guarantees will rank equally with all of
ConocoPhillips and CPCos other unsecured and
unsubordinated debt from time to time outstanding.
Restrictive
Covenants
ConocoPhillips has agreed to two principal restrictions on its
activities for the benefit of holders of the debt securities.
The restrictive covenants summarized below will apply to a
series of debt securities (unless waived or amended) as long as
any of those debt securities are outstanding, unless the
prospectus supplement for the series states otherwise. We have
used in this summary description capitalized terms that we have
defined below under Glossary.
Limitation
on Liens
ConocoPhillips has agreed that it and its Principal Domestic
Subsidiaries will issue, assume or guarantee Debt for borrowed
money secured by a lien upon a Principal Property or shares of
stock or Debt of any Principal Domestic Subsidiary only if the
outstanding guarantees of debt securities issued by Funding I
and Funding II are secured equally and ratably with or
prior to the Debt secured by that lien. If the guarantees are so
secured, ConocoPhillips has the option to secure any of its and
its Subsidiaries other Debt or obligations equally and
ratably with or prior to the Debt secured by the lien and,
accordingly, equally and ratably with the guarantees. This
covenant has exceptions that permit:
(a) liens existing on the date Funding I or Funding II
first issues a series of debt securities under the applicable
indenture;
(b) liens on the property, assets, stock, equity or Debt of
any entity existing at the time ConocoPhillips or a Subsidiary
acquires that entity or its property or at the time the entity
becomes a Subsidiary or a Principal Domestic Subsidiary;
(c) liens on assets either:
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existing at the time of acquisition of the assets,
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securing all or part of the cost of acquiring, constructing,
improving, developing or expanding the assets, or
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securing Debt incurred to finance all or part of the purchase
price of the assets or the cost of constructing, improving,
developing or expanding the assets that was incurred before, at
the time of or within two years after the later of the
acquisition, the completion of construction, improvement,
development or expansion or the commencement of commercial
operation of the assets;
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(d) liens on specific assets to secure Debt incurred to
provide funds for the cost of exploration, drilling or
development of those assets;
(e) intercompany liens;
(f) liens securing industrial development, pollution
control or other revenue bonds of a domestic government entity;
(g) liens on personal property, other than shares of stock
or debt of any Principal Domestic Subsidiary, securing loans
maturing in less than one year;
(h) liens on a Principal Property arising in connection
with the sale of accounts receivable resulting from the sale of
oil or gas at the wellhead;
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(i) statutory or other liens arising in the ordinary course
of business and relating to amounts that are not yet delinquent
or are being contested in good faith; and
(j) any extensions, substitutions, replacements or renewals
of the above-described liens or any Debt secured by these liens
if both:
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the new lien is limited to the property (plus any improvements)
secured by the original lien, and
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the amount of Debt secured by the new lien and not otherwise
permitted does not materially exceed the amount of Debt
refinanced plus any premium or fee payable in connection with
any such extension, substitution, replacement or renewal.
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In addition, without securing the guarantees as described above,
ConocoPhillips and its Principal Domestic Subsidiaries may
issue, assume or guarantee Debt that this covenant would
otherwise restrict in a total principal amount that, when added
to all other outstanding Debt of ConocoPhillips and its
Principal Domestic Subsidiaries that this covenant would
otherwise restrict and the total amount of Attributable Debt
outstanding for Sale/Leaseback Transactions, does not exceed a
basket equal to 10% of Consolidated Adjusted Net
Assets. When calculating this total principal amount, we exclude
from the calculation Attributable Debt from Sale/Leaseback
Transactions in connection with which ConocoPhillips or a
Subsidiary has purchased property or retired or defeased Debt as
described in clause (b) below under Limitation on
Sale/Leaseback Transactions.
The following types of transactions do not create
Debt secured by liens within the meaning
of this covenant:
(a) the sale or other transfer of either:
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oil, gas or other minerals in place for a period of time until,
or in an amount such that, the purchaser will realize from those
minerals a specified amount of money or a specified amount of
those minerals, or
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any other interest in property commonly referred to as a
production payment; and
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(b) the mortgage or pledge of any property of
ConocoPhillips or a Subsidiary in favor of the United States,
any state of the United States or any department, agency or
instrumentality of either, to secure payments under any contract
or statute.
Limitation
on Sale/Leaseback Transactions
ConocoPhillips has agreed that it and any of its Principal
Domestic Subsidiaries will enter into a Sale/Leaseback
Transaction only if at least one of the following applies:
(a) ConocoPhillips or that Principal Domestic
Subsidiary could incur Debt in a principal amount equal to the
Attributable Debt for that Sale/Leaseback Transaction and,
without violating the Limitation on Liens covenant,
could secure that Debt by a lien on the property to be leased
without equally and ratably securing the guarantees of the debt
securities.
(b) Within the period beginning one year before the
closing of the Sale/Leaseback Transaction and ending one year
after the closing, ConocoPhillips or any Subsidiary applies the
net proceeds of the Sale/Leaseback Transaction either:
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to the voluntary defeasance or retirement of any debt securities
issued under an indenture or any Funded Debt, or
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to the acquisition, exploration, drilling, development,
construction, improvement or expansion of one or more Principal
Properties.
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Any net proceeds that are not applied for the purposes described
in (b) will be subject to the limitation described in (a).
For purposes of these calculations, the net proceeds of the
Sale/Leaseback Transaction means the net proceeds of the sale or
transfer of the property leased in the Sale/Leaseback
Transaction
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(or, if greater, the fair value of that property at the time of
the Sale/Leaseback Transaction as determined by
ConocoPhillips board of directors).
Glossary
Attributable Debt means the present value of the
rental payments during the remaining term of the lease included
in the Sale/Leaseback Transaction. To determine that present
value, we use a discount rate equal to the lease rate of the
Sale/Leaseback Transaction. For these purposes, rental payments
do not include any amounts required to be paid for taxes,
maintenance, repairs, insurance, assessments, utilities,
operating and labor costs and other items that do not constitute
payments for property rights. In the case of any lease that the
lessee may terminate by paying a penalty, if the net amount
(including payment of the penalty) would be reduced if the
lessee terminated the lease on the first date that it could be
terminated, then this lower net amount will be used.
Consolidated Adjusted Net Assets means the total
amount of assets of ConocoPhillips and its consolidated
subsidiaries less:
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all current liabilities (excluding liabilities that are
extendable or renewable at ConocoPhillips option to a date
more than 12 months after the date of calculation and
excluding current maturities of long-term debt); and
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total prepaid expenses and deferred charges.
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ConocoPhillips will calculate its Consolidated Adjusted Net
Assets based on its most recent quarterly balance sheet.
Debt means all notes, bonds, debentures or similar
evidences of debt for money borrowed.
Funded Debt means all Debt that matures on or is
renewable to a date more than one year after the date the Debt
is incurred.
Principal Domestic Subsidiary means CPCo and any
Subsidiary (1) that has substantially all its assets in the
United States, (2) that owns a Principal Property and
(3) in which ConocoPhillips capital investment,
together with any intercompany loans to that Subsidiary and any
debt of that Subsidiary guaranteed by ConocoPhillips or any
other Subsidiary, exceeds $100 million.
Principal Property means any oil or gas producing
property located onshore or offshore of the United States or any
refinery or manufacturing plant located in the United States.
This term excludes any property, refinery or plant that in the
opinion of ConocoPhillips board of directors is not
materially important to the total business conducted by
ConocoPhillips and its consolidated subsidiaries. This term also
excludes any transportation or marketing facilities or assets.
Sale/Leaseback Transaction means any arrangement
with anyone under which ConocoPhillips or a Subsidiary leases
any Principal Property that ConocoPhillips or that Subsidiary
has sold or transferred or will sell or transfer to that person.
This term excludes the following:
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temporary leases for a term of not more than three years;
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intercompany leases;
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leases of a Principal Property executed by the time of or within
12 months after the latest of the acquisition, the
completion of construction or improvement, or the commencement
of commercial operation of the Principal Property; and
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arrangements under any provision of law with an effect similar
to the former Section 168(f)(8) of the Internal Revenue
Code of 1954.
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Subsidiary means an entity at least a majority of
the outstanding voting stock of which is owned, directly or
indirectly, by ConocoPhillips or by one or more other
Subsidiaries, or by ConocoPhillips and one or more other
Subsidiaries.
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Consolidation,
Merger and Sale of Assets
ConocoPhillips
and CPCo
The indentures generally permit a consolidation or merger
involving ConocoPhillips or CPCo. They also permit
ConocoPhillips or CPCo, as applicable, to lease, transfer or
dispose of all or substantially all of its assets. Each of
ConocoPhillips and CPCo has agreed, however, that it will not
consolidate with or merge into any entity (other than
ConocoPhillips or CPCo, as applicable) or lease, transfer or
dispose of all or substantially all of its assets to any entity
(other than ConocoPhillips or CPCo, as applicable) unless:
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it is the continuing corporation; or
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if it is not the continuing corporation, the resulting entity or
transferee is organized and existing under the laws of any
United States jurisdiction and assumes the performance of its
covenants and obligations under the indentures and the
performance of the related guarantees of the debt
securities; and
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in either case, immediately after giving effect to the
transaction, no default or event of default would occur and be
continuing or would result from the transaction.
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Upon any such consolidation, merger or asset lease, transfer or
disposition involving ConocoPhillips or CPCo, the resulting
entity or transferee will be substituted for ConocoPhillips or
CPCo, as applicable, under the applicable indenture and the
guarantees. In the case of an asset transfer or disposition
other than a lease, ConocoPhillips or CPCo, as applicable, will
be released from the applicable indenture and the guarantees.
Funding
I and Funding II
Each of Funding I and Funding II may assign all its rights
and obligations under the applicable indenture and its debt
securities to:
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another entity with which Funding I or Funding II, as
applicable, is consolidated or merged or which acquires by
conveyance or transfer any properties or assets of Funding I or
Funding II, as applicable;
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ConocoPhillips or CPCo; or
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another subsidiary of ConocoPhillips or CPCo.
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In connection with any assignment other than to ConocoPhillips
or CPCo, ConocoPhillips and CPCo will continue to guarantee the
debt securities as described above. If Funding I or
Funding II assigns all of its rights and obligations under
its indenture and its debt securities to ConocoPhillips or CPCo,
ConocoPhillips and CPCos covenants regarding
consolidations, mergers and sales of assets,
ConocoPhillips covenants described above under
Restrictive Covenants and any other
covenants for the benefit of any series of debt securities
issued under that indenture will remain in effect.
Events of
Default
Unless we inform you otherwise in the applicable prospectus
supplement, the following are events of default with respect to
a series of debt securities:
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failure to pay interest on that series of debt securities for
30 days when due;
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failure to pay principal of or any premium on that series of
debt securities when due;
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failure to redeem, purchase or repay debt securities of that
series for 30 days when required;
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failure to comply with any covenant or agreement in that series
of debt securities or the applicable indenture (other than an
agreement or covenant that has been included in the indenture
solely for the benefit of other series of debt securities) for
90 days after written notice by the trustee or by the
holders of at least 25% in principal amount of the outstanding
debt securities issued under that indenture that are affected by
that failure;
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specified events involving bankruptcy, insolvency or
reorganization of ConocoPhillips, CPCo and, with respect to the
applicable indenture, Funding I or Funding II;
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any guarantee of any guarantor ceases to be in full force and
effect (other than in accordance with the terms of the
applicable indenture and such guarantee) or is declared null and
void and unenforceable or found to be invalid in a judicial
proceeding or any guarantor denies its liability under its
guarantee (other than by reason of the release of a guarantor
from its guarantee in accordance with the terms of the
applicable indenture and such guarantee); and
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any other event of default provided for that series of debt
securities.
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A default under one series of debt securities will not
necessarily be a default under another series. The trustee may
withhold notice to the holders of the debt securities of any
default or event of default (except in any payment on the debt
securities) if the trustee considers it in the interest of the
holders of the debt securities to do so.
If an event of default for any series of debt securities occurs
and is continuing, the trustee or the holders of at least 25% in
principal amount of the outstanding debt securities of the
series affected by the default (or, in some cases, 25% in
principal amount of all debt securities issued under the
applicable indenture that are affected, voting as one class) may
declare the principal of and all accrued and unpaid interest on
those debt securities to be due and payable. If an event of
default relating to certain events of bankruptcy, insolvency or
reorganization occurs, the principal of and interest on all the
debt securities issued under the applicable indenture will
become immediately due and payable without any action on the
part of the trustee or any holder. The holders of a majority in
principal amount of the outstanding debt securities of the
series affected by the default (or, in some cases, of all debt
securities issued under the applicable indenture that are
affected, voting as one class) may in some cases rescind this
accelerated payment requirement.
A holder of a debt security of any series issued under an
indenture may pursue any remedy under that indenture only if:
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the holder gives the trustee written notice of a continuing
event of default for that series;
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the holders of at least 25% in principal amount of the
outstanding debt securities of that series make a written
request to the trustee to pursue the remedy;
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the holders offer to the trustee indemnity satisfactory to the
trustee;
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the trustee fails to act for a period of 60 days after
receipt of the request and offer of indemnity; and
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during that
60-day
period, the holders of a majority in principal amount of the
debt securities of that series do not give the trustee a
direction inconsistent with the request.
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This provision does not, however, affect the right of a holder
of a debt security to sue for enforcement of any overdue payment.
In most cases, holders of a majority in principal amount of the
outstanding debt securities of a series (or of all debt
securities issued under the applicable indenture that are
affected, voting as one class) may direct the time, method and
place of:
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conducting any proceeding for any remedy available to the
trustee; and
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exercising any trust or power conferred on the trustee relating
to or arising as a result of an event of default.
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Each indenture requires ConocoPhillips, CPCo and Funding I or
Funding II, as applicable, to file each year with the
trustee a written statement as to their compliance with the
covenants contained in the indenture.
Modification
and Waiver
Each indenture may be amended or supplemented if the holders of
a majority in principal amount of the outstanding debt
securities of all series issued under that indenture that are
affected by the amendment or
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supplement (acting as one class) consent to it. Without the
consent of the holder of each debt security affected, however,
no modification may:
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reduce the amount of debt securities whose holders must consent
to an amendment, supplement or waiver;
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reduce the rate of or change the time for payment of interest on
the debt security;
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reduce the principal of the debt security or change its stated
maturity;
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reduce any premium payable on the redemption of the debt
security or change the time at which the debt security may or
must be redeemed;
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change any obligation to pay additional amounts on the debt
security;
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make payments on the debt security payable in currency other
than as originally stated in the debt security;
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impair the holders right to institute suit for the
enforcement of any payment on or with respect to the debt
security;
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make any change in the percentage of principal amount of debt
securities necessary to waive compliance with certain provisions
of the indenture or to make any change in the provision related
to modification;
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waive a continuing default or event of default regarding any
payment on the debt securities; or
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change the obligations of ConocoPhillips and CPCo under the
guarantees in any manner materially adverse to the holders of
any debt security issued under that indenture.
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Each indenture may be amended or supplemented or any provision
of that indenture may be waived without the consent of any
holders of debt securities issued under that indenture in
certain circumstances, including:
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to cure any ambiguity, omission, defect or inconsistency;
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to provide for the assumption of the obligations under the
indenture of ConocoPhillips, CPCo or Funding I or
Funding II, as applicable, by a successor upon any merger,
consolidation or asset transfer permitted under the indenture;
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to provide for uncertificated debt securities in addition to or
in place of certificated debt securities or to provide for
bearer debt securities;
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to provide any security for, any guarantees of or any additional
obligors on any series of debt securities or the related
guarantees;
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to comply with any requirement to effect or maintain the
qualification of that indenture under the Trust Indenture Act of
1939;
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to add covenants that would benefit the holders of any debt
securities or to surrender any rights ConocoPhillips, CPCo or
Funding I or Funding II, as applicable, has under the
indenture;
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to add events of default with respect to any debt securities; and
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to make any change that does not adversely affect any
outstanding debt securities of any series issued under that
indenture in any material respect.
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The holders of a majority in principal amount of the outstanding
debt securities of any series (or, in some cases, of all debt
securities issued under the applicable indenture, voting as one
class) may waive any existing or past default or event of
default with respect to those debt securities. Those holders may
not, however, waive any default or event of default in any
payment on any debt security or compliance with a provision that
cannot be amended or supplemented without the consent of each
holder affected.
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Defeasance
When we use the term defeasance, we mean discharge from some or
all of our obligations under the indentures. If any combination
of funds or government securities are deposited with the trustee
under an indenture sufficient to make payments on the debt
securities of a series issued under that indenture on the dates
those payments are due and payable, then, at our option, either
of the following will occur:
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ConocoPhillips, CPCo and Funding I or Funding II, as
applicable, will be discharged from their obligations with
respect to the debt securities of that series and the related
guarantees (legal defeasance); or
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ConocoPhillips, CPCo and Funding I or Funding II, as
applicable, will no longer have any obligation to comply with
the restrictive covenants, the merger covenants and other
specified covenants under the applicable indenture, and the
related events of default will no longer apply (covenant
defeasance).
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If a series of debt securities is defeased, the holders of the
debt securities of the series affected will not be entitled to
the benefits of the applicable indenture, except for obligations
to register the transfer or exchange of debt securities, replace
stolen, lost or mutilated debt securities or maintain paying
agencies and hold moneys for payment in trust. In the case of
covenant defeasance, the obligation of Funding I or
Funding II, as applicable, to pay principal, premium and
interest on the debt securities and ConocoPhillips and
CPCos guarantees of the payments will also survive.
Unless we inform you otherwise in the prospectus supplement, we
will be required to deliver to the trustee an opinion of counsel
that the deposit and related defeasance would not cause the
holders of the debt securities to recognize income, gain or loss
for U.S. federal income tax purposes. If we elect legal
defeasance, that opinion of counsel must be based upon a ruling
from the U.S. Internal Revenue Service or a change in law
to that effect.
Governing
Law
New York law will govern the indentures and the debt securities.
Trustee
The Bank of New York Trust Company, National Association will be
the trustee under each indenture. The Bank of New York serves as
trustee or custodian relating to a number of series of debt,
trust preferred securities and other long-term repayment
obligations of ConocoPhillips and its subsidiaries as of
June 30, 2006. The Bank of New York and its affiliates
perform certain commercial banking services for us for which
they receive customary fees and are lenders under various
outstanding credit facilities of subsidiaries of ConocoPhillips.
If an event of default occurs under an indenture and is
continuing, the trustee under that indenture will be required to
use the degree of care and skill of a prudent person in the
conduct of that persons own affairs. The trustee will
become obligated to exercise any of its powers under that
indenture at the request of any of the holders of any debt
securities issued under that indenture only after those holders
have offered the trustee indemnity satisfactory to it.
Each indenture contains limitations on the right of the trustee,
if it becomes a creditor of ConocoPhillips, CPCo, Funding I or
Funding II, as applicable, to obtain payment of claims or
to realize on certain property received for any such claim, as
security or otherwise. The trustee is permitted to engage in
other transactions with ConocoPhillips, CPCo, Funding I and
Funding II. If, however, it acquires any conflicting
interest, it must eliminate that conflict or resign within
90 days after ascertaining that it has a conflicting
interest and after the occurrence of a default under the
applicable indenture, unless the default has been cured, waived
or otherwise eliminated within the
90-day
period.
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Form,
Exchange, Registration and Transfer
The debt securities will be issued in registered form, without
interest coupons. There will be no service charge for any
registration of transfer or exchange of the debt securities.
However, payment of any transfer tax or similar governmental
charge payable for that registration may be required.
Debt securities of any series will be exchangeable for other
debt securities of the same series, the same total principal
amount and the same terms but in different authorized
denominations in accordance with the applicable indenture.
Holders may present debt securities for registration of transfer
at the office of the security registrar or any transfer agent we
designate. The security registrar or transfer agent will effect
the transfer or exchange if its requirements and the
requirements of the applicable indenture are met.
The trustee will be appointed as security registrar for the debt
securities. If a prospectus supplement refers to any transfer
agents we initially designate, we may at any time rescind that
designation or approve a change in the location through which
any transfer agent acts. We are required to maintain an office
or agency for transfers and exchanges in each place of payment.
We may at any time designate additional transfer agents for any
series of debt securities.
In the case of any redemption, we will not be required to
register the transfer or exchange of:
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any debt security during a period beginning 15 business days
prior to the mailing of the relevant notice of redemption or
repurchase and ending on the close of business on the day of
mailing of such notice; or
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any debt security that has been called for redemption in whole
or in part, except the unredeemed portion of any debt security
being redeemed in part.
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Payment
and Paying Agents
Unless we inform you otherwise in a prospectus supplement,
payments on the debt securities will be made in
U.S. dollars at the office of the trustee and any paying
agent. At our option, however, payments may be made by wire
transfer for global debt securities or by check mailed to the
address of the person entitled to the payment as it appears in
the security register. Unless we inform you otherwise in a
prospectus supplement, interest payments may be made to the
person in whose name the debt security is registered at the
close of business on the record date for the interest payment.
Unless we inform you otherwise in a prospectus supplement, the
trustee under the applicable indenture will be designated as the
paying agent for payments on debt securities issued under that
indenture. We may at any time designate additional paying agents
or rescind the designation of any paying agent or approve a
change in the office through which any paying agent acts.
If the principal of or any premium or interest on debt
securities of a series is payable on a day that is not a
business day, the payment will be made on the following business
day. For these purposes, unless we inform you otherwise in a
prospectus supplement, a business day is any day
that is not a Saturday, a Sunday or a day on which banking
institutions in any of New York, New York; Houston, Texas or a
place of payment on the debt securities of that series is
authorized or obligated by law, regulation or executive order to
remain closed.
Subject to the requirements of any applicable abandoned property
laws, the trustee and paying agent will pay to us upon written
request any money held by them for payments on the debt
securities that remains unclaimed for two years after the date
upon which that payment has become due. After payment to us,
holders entitled to the money must look to us for payment. In
that case, all liability of the trustee or paying agent with
respect to that money will cease.
Book-Entry
Debt Securities
The debt securities of a series may be issued in the form of one
or more global debt securities that would be deposited with a
depositary or its nominee identified in the prospectus
supplement. Global debt securities
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may be issued in either temporary or permanent form. We will
describe in the prospectus supplement the terms of any
depositary arrangement and the rights and limitations of owners
of beneficial interests in any global debt security.
PLAN OF
DISTRIBUTION
We may sell the securities in and outside the United States
through underwriters or dealers, directly to purchasers or
through agents.
Sale
Through Underwriters or Dealers
If we use underwriters in the sale of securities, the
underwriters will acquire the securities for their own account.
The underwriters may resell the securities from time to time in
one or more transactions, including negotiated transactions, at
a fixed public offering price or at varying prices determined at
the time of sale. Underwriters may offer securities to the
public either through underwriting syndicates represented by one
or more managing underwriters or directly by one or more firms
acting as underwriters. Unless we inform you otherwise in the
prospectus supplement, the obligations of the underwriters to
purchase the securities will be subject to conditions, and the
underwriters will be obligated to purchase all the securities if
they purchase any of them. The underwriters may change from time
to time any initial public offering price and any discounts or
concessions allowed or reallowed or paid to dealers.
During and after an offering through underwriters, the
underwriters may purchase and sell the securities in the open
market. These transactions may include overallotment and
stabilizing transactions and purchases to cover syndicate short
positions created in connection with the offering. The
underwriters may also impose a penalty bid, whereby selling
concessions allowed to syndicate members or other broker-dealers
for the offered securities sold for their account may be
reclaimed by the syndicate if such offered securities are
repurchased by the syndicate in stabilizing or covering
transactions. These activities may stabilize, maintain or
otherwise affect the market price of the offered securities,
which may be higher than the price that might otherwise prevail
in the open market. If commenced, these activities may be
discontinued at any time.
If we use dealers in the sale of securities, we will sell the
securities to them as principals. They may then resell those
securities to the public at varying prices determined by the
dealers at the time of resale. The dealers participating in any
sale of the securities may be deemed to be underwriters within
the meaning of the Securities Act of 1933 with respect to any
sale of those securities. We will include in the prospectus
supplement the names of the dealers and the terms of the
transaction.
Direct
Sales and Sales Through Agents
We may sell the securities directly. In that event, no
underwriters or agents would be involved. We may also sell the
securities through agents we designate from time to time. In the
prospectus supplement, we will name any agent involved in the
offer or sale of the securities, and we will describe any
commissions payable by us to the agent. Unless we inform you
otherwise in the prospectus supplement, any agent will agree to
use its reasonable best efforts to solicit purchases for the
period of its appointment.
We may sell the securities directly to institutional investors
or others who may be deemed to be underwriters within the
meaning of the Securities Act of 1933 with respect to any sale
of those securities. We will describe the terms of any such
sales in the prospectus supplement.
Delayed
Delivery Contracts
If we so indicate in the prospectus supplement, we may authorize
agents, underwriters or dealers to solicit offers from certain
types of institutions to purchase securities from us at the
public offering price under delayed delivery contracts. These
contracts would provide for payment and delivery on a specified
date in the future. The contracts would be subject only to those
conditions described in the prospectus supplement. The
prospectus supplement will describe the commission payable for
solicitation of those contracts.
15
General
Information
We may have agreements with the agents, dealers and underwriters
to indemnify them against civil liabilities, including
liabilities under the Securities Act of 1933, or to contribute
with respect to payments that the agents, dealers or
underwriters may be required to make. Agents, dealers and
underwriters may engage in transactions with us or perform
services for us in the ordinary course of their businesses.
LEGAL
MATTERS
The validity of the debt securities of Funding I and
Funding II and the validity of the related guarantees by
ConocoPhillips and CPCo and other matters in connection with any
offering of the securities will be passed upon for us by Wayne
C. Byers, ConocoPhillips Senior Counsel, or another of
ConocoPhillips lawyers, and Baker Botts L.L.P., Houston,
Texas, our outside counsel. Any underwriters will be advised
about legal matters relating to any offering by Cravath,
Swaine & Moore LLP, New York, New York, or such other
counsel as may be identified in the applicable prospectus
supplement. Any of those counsel will rely as to matters of
Canadian law on McInnes Cooper, Halifax, Nova Scotia.
EXPERTS
The consolidated financial statements of ConocoPhillips
appearing in ConocoPhillips Annual Report
(Form 10-K)
for the year ended December 31, 2005 (including the
condensed consolidating financial information and financial
statement schedule appearing therein), and ConocoPhillips
managements assessment of the effectiveness of internal
control over financial reporting as of December 31, 2005
included therein, have been audited by Ernst & Young
LLP, independent registered public accounting firm, as set forth
in their reports thereon, included therein, and incorporated
herein by reference. Such consolidated financial statements,
condensed consolidating financial information, financial
statement schedule, and managements assessment are
incorporated herein by reference in reliance upon such reports
given on the authority of such firm as experts in accounting and
auditing.
The consolidated financial statements of Burlington Resources
Inc., incorporated herein by reference to ConocoPhillips
Current Report on
Form 8-K/A
dated March 31, 2006, have been so incorporated in reliance
on the report of PricewaterhouseCoopers LLP, an independent
registered public accounting firm, given on the authority of
said firm as experts in auditing and accounting.
The balance sheet of ConocoPhillips Canada Funding
Company I at September 13, 2006, appearing in this
Prospectus and Registration Statement has been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon appearing
elsewhere herein, and is included in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
The balance sheet of ConocoPhillips Canada Funding
Company II at September 13, 2006, appearing in this
Prospectus and Registration Statement has been audited by
Ernst & Young LLP, independent registered public
accounting firm, as set forth in their report thereon appearing
elsewhere herein, and is included in reliance upon such report
given on the authority of such firm as experts in accounting and
auditing.
16
INDEX TO
FINANCIAL STATEMENTS
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Page
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ConocoPhillips Canada Funding
Company I
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Report of Independent Registered
Public Accounting Firm
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F-2
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Balance Sheet
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F-3
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Note to Balance Sheet
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F-4
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ConocoPhillips Canada Funding
Company II
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Report of Independent Registered
Public Accounting Firm
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F-5
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Balance Sheet
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F-6
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Note to Balance Sheet
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F-7
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F-1
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholder
ConocoPhillips Canada Funding Company I
We have audited the accompanying balance sheet of ConocoPhillips
Canada Funding Company I (the Company) as of
September 13, 2006. This balance sheet is the
responsibility of the Companys management. Our
responsibility is to express an opinion on this balance sheet
based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of
material misstatement. We were not engaged to perform an audit
of the Companys internal control over financial reporting.
Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the
Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the balance sheet referred to above presents
fairly, in all material respects, the financial position of
ConocoPhillips Canada Funding Company I at September 13,
2006, in conformity with U.S. generally accepted accounting
principles.
Houston, Texas
September 19, 2006
F-2
ConocoPhillips
Canada Funding Company I
Balance Sheet
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September 13,
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2006
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ASSETS
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Cash
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$
|
1,000
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|
|
|
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Total Assets
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$
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1,000
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STOCKHOLDERS
EQUITY
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Common stock (100,000 voting
shares authorized with no par value)
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Shares issued and outstanding
(100 shares)
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$
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1,000
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Total Stockholders Equity
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$
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1,000
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|
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See Note to Balance Sheet.
F-3
ConocoPhillips
Canada Funding Company I
Note to Balance Sheet
Basis of
Presentation
ConocoPhillips Canada Funding Company I was incorporated in the
province of Nova Scotia on September 8, 2006.
ConocoPhillips Canada Funding Company I has one stockholder,
Conoco Petroleum Operations Inc., which holds 100 shares of
the companys outstanding voting common stock. Conoco
Petroleum Operations Inc. contributed $1,000 for its
100 percent ownership interest on September 13, 2006.
ConocoPhillips Canada Funding Company I has authorized
1 million shares of preferred stock, 100,000 shares of
voting common stock, and 100,000 shares of non-voting
common stock. All shares were authorized without par value. No
shares of preferred stock or non-voting common stock were issued
or outstanding at September 13, 2006.
Other than its formation, ConocoPhillips Canada Funding Company
I has not conducted any activities. The company is a direct
wholly owned special-purpose finance subsidiary of Conoco
Petroleum Operations Inc. (itself an indirect wholly owned
subsidiary of ConocoPhillips), organized to engage in financing
activities to raise funds for the business operations of
ConocoPhillips and its subsidiaries.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and
expenses, and the disclosures of contingent assets and
liabilities. Actual results could differ from the estimates and
assumptions used.
F-4
REPORT OF
INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
The Board of Directors and Stockholder
ConocoPhillips Canada Funding Company II
We have audited the accompanying balance sheet of ConocoPhillips
Canada Funding Company II (the Company) as of
September 13, 2006. This balance sheet is the
responsibility of the Companys management. Our
responsibility is to express an opinion on this balance sheet
based on our audit.
We conducted our audit in accordance with the standards of the
Public Company Accounting Oversight Board (United States). Those
standards require that we plan and perform the audit to obtain
reasonable assurance about whether the balance sheet is free of
material misstatement. We were not engaged to perform an audit
of the Companys internal control over financial reporting.
Our audit included consideration of internal control over
financial reporting as a basis for designing audit procedures
that are appropriate in the circumstances, but not for the
purpose of expressing an opinion on the effectiveness of the
Companys internal control over financial reporting.
Accordingly, we express no such opinion. An audit also includes
examining, on a test basis, evidence supporting the amounts and
disclosures in the financial statements, assessing the
accounting principles used and significant estimates made by
management, and evaluating the overall financial statement
presentation. We believe that our audit provides a reasonable
basis for our opinion.
In our opinion, the balance sheet referred to above presents
fairly, in all material respects, the financial position of
ConocoPhillips Canada Funding Company II at
September 13, 2006, in conformity with U.S. generally
accepted accounting principles.
Houston, Texas
September 19, 2006
F-5
ConocoPhillips
Canada Funding Company II
Balance
Sheet
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|
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|
September 13,
|
|
|
|
2006
|
|
|
ASSETS
|
Cash
|
|
$
|
1,000
|
|
|
|
|
|
|
Total Assets
|
|
$
|
1,000
|
|
|
|
|
|
|
|
STOCKHOLDERS
EQUITY
|
Common stock (100,000 voting
shares authorized with no par value)
|
|
|
|
|
Shares issued and outstanding
(100 shares)
|
|
$
|
1,000
|
|
|
|
|
|
|
Total Stockholders Equity
|
|
$
|
1,000
|
|
|
|
|
|
|
See Note to Balance Sheet.
F-6
ConocoPhillips
Canada Funding Company II
Note to
Balance Sheet
Basis of
Presentation
ConocoPhillips Canada Funding Company II was incorporated
in the province of Nova Scotia on September 8, 2006.
ConocoPhillips Canada Funding Company II has one
stockholder, Burlington Resources Inc., which holds
100 shares of the companys outstanding voting common
stock. Burlington Resources Inc. contributed $1,000 for its
100 percent ownership interest on September 13, 2006.
ConocoPhillips Canada Funding Company II has authorized
1 million shares of preferred stock, 100,000 shares of
voting common stock, and 100,000 shares of non-voting
common stock. All shares were authorized without par value. No
shares of preferred stock or non-voting common stock were issued
or outstanding at September 13, 2006.
Other than its formation, ConocoPhillips Canada Funding
Company II has not conducted any activities. The company is
a direct wholly owned special-purpose finance subsidiary of
Burlington Resources Inc. (itself a direct wholly owned
subsidiary of ConocoPhillips), organized to engage in financing
activities to raise funds for the business operations of
ConocoPhillips and its subsidiaries.
The preparation of financial statements in conformity with
accounting principles generally accepted in the United States
requires management to make estimates and assumptions that
affect the reported amounts of assets, liabilities, revenues and
expenses, and the disclosures of contingent assets and
liabilities. Actual results could differ from the estimates and
assumptions used.
F-7
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ConocoPhillips Canada
Funding Company I
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ConocoPhillips Canada
Funding Company II
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$1,250,000,000
5.625% Notes due 2016
fully and
unconditionally
guaranteed by
ConocoPhillips and
ConocoPhillips Company
|
|
$350,000,000 5.30% Notes due 2012
$500,000,000 5.95% Notes due 2036 fully and unconditionally guaranteed by ConocoPhillips and ConocoPhillips Company
|
Prospectus Supplement
October 10, 2006
Joint Book-Runners
Banc
of America Securities LLC
(Global Coordinator)
|
|
Barclays
Capital |
Merrill
Lynch & Co. |
|
|
(2016
Notes)
|
(2016
Notes)
|
|
|
Deutsche
Bank Securities |
UBS
Investment Bank |
|
|
(2012
and 2036 Notes)
|
(2012
and 2036 Notes)
|
Senior Co-Managers
|
|
Barclays
Capital |
Merrill
Lynch & Co. |
|
|
(2012
and 2036 Notes)
|
(2012
and 2036 Notes)
|
|
|
Deutsche
Bank Securities |
UBS
Investment Bank |
|
|
(2016
Notes)
|
(2016
Notes)
|
Co-Managers
|
|
|
ABN
AMRO Incorporated |
BNP
PARIBAS |
Calyon
Securities (USA) |
|
|
|
Daiwa
Securities SMBC Europe |
DnB
NOR Markets |
RBS
Greenwich Capital |
|
|
|
HSBC |
ING
Financial
Markets |
Mitsubishi
UFJ Securities |