UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

þ		QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended           March 31, 2008                                                                            

o		TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from                                          to                                         

ConocoPhillips

Delaware (State or other jurisdiction of incorporation or organization)		01-0562944 (I.R.S. Employer Identification No.)

600 North Dairy Ashford, Houston, TX 77079
(Address of principal executive offices) (Zip Code)

281-293-1000
(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes þ No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer þ		Accelerated filer o		Non-accelerated filer o		Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No þ

The registrant had 1,542,446,703 shares of common stock, $.01 par value, outstanding at March 31, 2008.

 

 

CONOCOPHILLIPS

TABLE OF CONTENTS

		Page
Part I – Financial Information
Item 1. Financial Statements
Consolidated Income Statement			1
Consolidated Balance Sheet			2
Consolidated Statement of Cash Flows			3
Notes to Consolidated Financial Statements			4
Supplementary Information—Condensed Consolidating Financial Information			20
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
Item 3. Quantitative and Qualitative Disclosures About Market Risk			47
Item 4. Controls and Procedures			47
Part II – Other Information
Item 1. Legal Proceedings			48
Item 1A. Risk Factors			50
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			50
Item 6. Exhibits			51
Signature			52
Computation of Ratio of Earnings to Fixed Charges
Certification of CEO Pursuant to Rule 13a-14(a)
Certification of CFO Pursuant to Rule 13a-14(a)
Certifications Pursuant to Section 1350

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

Consolidated Income Statement		ConocoPhillips

		Millions of Dollars
		Three Months Ended
		March 31
		2008				2007
Revenues and Other Income
Sales and other operating revenues*		$	54,883				41,320
Equity in earnings of affiliates			1,359				929
Other income			310				618
Total Revenues and Other Income			56,552				42,867
Costs and Expenses
Purchased crude oil, natural gas and products			37,820				26,715
Production and operating expenses			2,691				2,492
Selling, general and administrative expenses			526				527
Exploration expenses			309				262
Depreciation, depletion and amortization			2,209				2,024
Impairments			6				(1	)
Taxes other than income taxes*			5,155				4,374
Accretion on discounted liabilities			104				79
Interest and debt expense			207				307
Foreign currency transaction (gains) losses			(43	)			1
Minority interests			19				21
Total Costs and Expenses			49,003				36,801
Income before income taxes			7,549				6,066
Provision for income taxes			3,410				2,520
Net Income		$	4,139				3,546
Net Income Per Share of Common Stock (dollars)
Basic		$	2.65				2.15
Diluted			2.62				2.12
Dividends Paid Per Share of Common Stock (dollars)		$	.47				.41
Average Common Shares Outstanding (in thousands)
Basic			1,562,198				1,647,352
Diluted			1,582,025				1,668,847
*Includes excise taxes on petroleum products sales:		$	3,857				3,841

See Notes to Consolidated Financial Statements.

Consolidated Balance Sheet		ConocoPhillips

		Millions of Dollars
		March 31				December 31
		2008				2007
Assets
Cash and cash equivalents		$	1,423				1,456
Accounts and notes receivable (net of allowance of $62 million in 2008 and $58 million in 2007)			15,205				14,687
Accounts and notes receivable—related parties			1,946				1,667
Inventories			6,995				4,223
Prepaid expenses and other current assets			3,039				2,702
Total Current Assets			28,608				24,735
Investments and long-term receivables			32,732				31,457
Loans and advances—related parties			1,962				1,871
Net properties, plants and equipment			89,207				89,003
Goodwill			29,354				29,336
Intangibles			884				896
Other assets			531				459
Total Assets		$	183,278				177,757
Liabilities
Accounts payable		$	18,953				16,591
Accounts payable—related parties			1,741				1,270
Short-term debt			384				1,398
Accrued income and other taxes			7,076				4,814
Employee benefit obligations			597				920
Other accruals			2,374				1,889
Total Current Liabilities			31,125				26,882
Long-term debt			21,108				20,289
Asset retirement obligations and accrued environmental costs			7,360				7,261
Joint venture acquisition obligation—related party			6,141				6,294
Deferred income taxes			21,005				21,018
Employee benefit obligations			3,099				3,191
Other liabilities and deferred credits			2,714				2,666
Total Liabilities			92,552				87,601
Minority Interests			1,151				1,173
Common Stockholders’ Equity
Common stock (2,500,000,000 shares authorized at $.01 par value)
Issued (2008—1,721,017,154 shares; 2007—1,718,448,829 shares)
Par value			17				17
Capital in excess of par			42,831				42,724
Grantor trusts (at cost: 2008—42,397,731 shares; 2007—42,411,331 shares)			(730	)			(731	)
Treasury stock (at cost: 2008—136,172,720 shares; 2007—104,607,149 shares)			(10,465	)			(7,969	)
Accumulated other comprehensive income			4,138				4,560
Unearned employee compensation			(122	)			(128	)
Retained earnings			53,906				50,510
Total Common Stockholders’ Equity			89,575				88,983
Total		$	183,278				177,757

See Notes to Consolidated Financial Statements.

Consolidated Statement of Cash Flows		ConocoPhillips

		Millions of Dollars
		Three Months Ended
		March 31
		2008				2007
Cash Flows From Operating Activities
Net income		$	4,139				3,546
Adjustments to reconcile net income to net cash provided by operating activities
Nonworking capital adjustments
Depreciation, depletion and amortization			2,209				2,024
Impairments			6				(1	)
Dry hole costs and leasehold impairments			154				148
Accretion on discounted liabilities			104				79
Deferred taxes			(17	)			77
Undistributed equity earnings			(987	)			(557	)
Gain on asset dispositions			(181	)			(499	)
Other			(164	)			(94	)
Working capital adjustments*
Decrease (increase) in accounts and notes receivable			(725	)			289
Increase in inventories			(2,783	)			(686	)
Decrease (increase) in prepaid expenses and other current assets			(372	)			67
Increase in accounts payable			2,822				1,539
Increase in taxes and other accruals			2,382				941
Net Cash Provided by Operating Activities			6,587				6,873
Cash Flows From Investing Activities
Capital expenditures and investments			(3,322	)			(2,847	)
Proceeds from asset dispositions			370				1,343
Long-term advances/loans—related parties			(67	)			(179	)
Collection of advances/loans—related parties			-				28
Other			7				7
Net Cash Used in Investing Activities			(3,012	)			(1,648	)
Cash Flows From Financing Activities
Issuance of debt			1,123				81
Repayment of debt			(1,325	)			(3,572	)
Issuance of company common stock			7				40
Repurchase of company common stock			(2,496	)			(1,000	)
Dividends paid on company common stock			(730	)			(674	)
Other			(196	)			(49	)
Net Cash Used in Financing Activities			(3,617	)			(5,174	)
Effect of Exchange Rate Changes on Cash and Cash Equivalents			9				(8	)
Net Change in Cash and Cash Equivalents			(33	)			43
Cash and cash equivalents at beginning of period			1,456				817
Cash and Cash Equivalents at End of Period		$	1,423				860

*Net of acquisition and disposition of businesses.
See Notes to Consolidated Financial Statements.

Notes to Consolidated Financial Statements		ConocoPhillips

Note 1—Interim Financial Information

The interim-period financial information presented in the financial statements included in this report is unaudited and includes all known accruals and adjustments, in the opinion of management, necessary for a fair presentation of the consolidated financial position of ConocoPhillips and its results of operations and cash flows for such periods. All such adjustments are of a normal and recurring nature. To enhance your understanding of these interim financial statements, see the consolidated financial statements and notes included in our 2007 Annual Report on Form 10-K.

Note 2—Changes in Accounting Principles

SFAS No. 157

Effective January 1, 2008, we implemented Financial Accounting Standards Board (FASB) Statement of Financial Accounting Standards (SFAS) No. 157, “Fair Value Measurements,” which defines fair value, establishes a framework for its measurement and expands disclosures about fair value measurements. We elected to implement this Statement with the one-year deferral permitted by FASB Staff Position (FSP) 157-2 for nonfinancial assets and nonfinancial liabilities measured at fair value, except those that are recognized or disclosed on a recurring basis (at least annually). The deferral applies to nonfinancial assets and liabilities measured at fair value in a business combination; impaired properties, plants and equipment; intangible assets and goodwill; and initial recognition of asset retirement obligations and restructuring costs for which we use fair value. We do not expect any significant impact to our consolidated financial statements when we implement SFAS No. 157 for these assets and liabilities.

Due to our election under FSP 157-2, for 2008, SFAS No. 157 applies to commodity and foreign currency derivative contracts and certain nonqualified deferred compensation and retirement plan assets that are measured at fair value on a recurring basis in periods subsequent to initial recognition. The implementation of SFAS No. 157 did not cause a change in the method of calculating fair value of assets or liabilities, with the exception of incorporating the impact of our nonperformance risk on derivative liabilities—which was not material. The primary impact from adoption was additional disclosures.

SFAS No. 157 requires disclosures that categorize assets and liabilities measured at fair value into one of three different levels depending on the observability of the inputs employed in the measurement. Level 1 inputs are quoted prices in active markets for identical assets or liabilities. Level 2 inputs are observable inputs other than quoted prices included within Level 1 for the asset or liability, either directly or indirectly through market-corroborated inputs. Level 3 inputs are unobservable inputs for the asset or liability reflecting our assumptions about pricing by market participants.

We value our exchange-cleared derivatives using unadjusted closing prices provided by the exchange as of the balance sheet date, and these are classified as Level 1 in the fair value hierarchy. Over the counter (OTC) financial swaps and physical commodity purchase and sale contracts are generally valued using quotations provided by brokers and price index developers such as Platts and Oil Price Information Service. These are classified as Level 2. In certain less liquid markets or for longer-term contracts, forward prices are not as readily available. In these circumstances, OTC swaps and physical commodity purchase and sale contracts are valued using internally developed methodologies that consider historical relationships among various commodities that result in management’s best estimate of fair value. These contracts are classified as Level 3.

Exchange-cleared financial options are valued using exchange closing prices and are classified as Level 1. Financial OTC and physical commodity options are valued using industry-standard models that consider various assumptions, including quoted forward prices for commodities, time value, volatility factors, and

contractual prices for the underlying instruments, as well as other relevant economic measures. The degree to which these inputs are observable in the forward markets determines whether the option is classified as Level 2 or 3.

As permitted under SFAS No.157, we use a mid-market pricing convention (the mid-point price between bid and ask prices). When appropriate, valuations are adjusted to reflect credit considerations, generally based on available market evidence.

The fair value hierarchy for our financial assets and liabilities accounted for at fair value on a recurring basis at March 31, 2008, was:

		Millions of Dollars
		Level 1				Level 2				Level 3				Total
Assets
Commodity derivatives		$	2,721				1,660				19				4,400
Foreign exchange derivatives			-				172				-				172
Nonqualified benefit plans			418				-				-				418
Total assets			3,139				1,832				19				4,990
Liabilities
Commodity derivatives		$	(2,677	)			(1,716	)			(72	)			(4,465	)
Foreign exchange derivatives			-				(33	)			-				(33	)
Total liabilities			(2,677	)			(1,749	)			(72	)			(4,498	)
Net assets (liabilities)			462				83				(53	)			492

The derivative values above are based on analysis of each contract as the fundamental unit of account as required by SFAS No. 157. Derivative assets and liabilities with the same counterparty are not netted where the legal right of offset exists, which is different than the net presentation basis in Note 19—Financial Instruments and Derivative Contracts, in our 2007 Annual Report on Form 10-K. Gains or losses from contracts in one level may be offset by gains or losses on contracts in another level or by changes in values of physical contracts or positions that are not reflected in the table.

Changes in the fair value of net commodity derivatives classified as Level 3 in the fair value hierarchy at March 31, 2008, were:

		Millions
		of Dollars
Fair Value Measurements Using Significant Unobservable Inputs (Level 3)
Balance at January 1, 2008		$	(34	)
Total gains (losses), realized and unrealized
Included in earnings or changes in net assets			(42	)
Included in other comprehensive income			-
Purchases, issuances and settlements			24
Transfers in and/or out of Level 3			(1	)
Balance at March 31, 2008		$	(53	)
The amount of total gains (losses) for the period included in earnings or changes in net assets attributable to the change in unrealized gains (losses) relating to assets held at March 31, 2008		$	1
The amount of total gains (losses) for the period included in earnings or changes in net assets attributable to the change in unrealized gains (losses) relating to liabilities held at March 31, 2008		$	(31	)

Gains and losses, realized and unrealized, included in earnings or changes in net assets for the three-month period ending March 31, 2008, were reported as follows:

		Millions of Dollars
						Purchased
		Other				Crude Oil
		Operating				Natural Gas
		Revenues				and Products				Total
Total gains (losses) included in earnings or changes in net assets		$	(43	)			1				(42	)
Change in unrealized gains (losses) relating to assets held at March 31, 2008		$	1				-				1
Change in unrealized gains (losses) relating to liabilities held at March 31, 2008		$	(31	)			-				(31	)

SFAS No. 159

In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option for Financial Assets and Financial Liabilities—Including an amendment of FASB Statement No. 115.” This Statement permits the election to carry financial instruments and certain other items similar to financial instruments at fair value on the balance sheet, with all changes in fair value reported in earnings. By electing the fair value option in conjunction with a derivative, an entity can achieve an accounting result similar to a fair value hedge without having to comply with complex hedge accounting rules. We adopted this Statement effective January 1, 2008. During the first quarter of 2008, we did not make the fair value election for any financial instruments not already carried at fair value in accordance with other accounting standards, so the adoption of SFAS No. 159 did not impact our consolidated financial statements.

Note 3—Variable Interest Entities (VIEs)

We have a 24 percent interest in West2East Pipeline LLC (West2East), a company holding a 100 percent interest in Rockies Express Pipeline LLC (Rockies Express). West2East is a VIE, but we are not the primary beneficiary. We use the equity method of accounting for our investment. In 2007, we issued a guarantee for 24 percent of the $2 billion in credit facilities of Rockies Express. In addition, we have a guarantee for 24 percent of $600 million of Floating Rate Notes due 2009 issued by Rockies Express. At March 31, 2008, the book value of our investment in West2East was $248 million. See Note 10—Guarantees, for additional information.

We have a 30 percent ownership interest with a 50 percent governance interest in the OOO Naryanmarneftegaz (NMNG) joint venture to develop resources in the Timan-Pechora province of Russia. The NMNG joint venture is a VIE because we and our related party, OAO LUKOIL, have disproportionate interests. We are not the primary beneficiary of the VIE and we use the equity method of accounting for this investment. At March 31, 2008, the book value of our investment in the venture was $1,929 million.

Note 4—Inventories

Inventories consisted of the following:

		Millions of Dollars
		March 31				December 31
		2008				2007
Crude oil and petroleum products		$	6,118				3,373
Materials, supplies and other			877				850
		$	6,995				4,223

Inventories valued on the last-in, first-out (LIFO) basis totaled $5,694 million and $2,974 million at March 31, 2008, and December 31, 2007, respectively. The remainder of our inventories are valued under various methods, including first-in, first-out and weighted average. The excess of current replacement cost over LIFO cost of inventories amounted to $7,945 million and $6,668 million at March 31, 2008, and December 31, 2007, respectively.

Note 5—Assets Held for Sale

In 2006, we commenced asset rationalization efforts that led to the classification of certain assets as “held for sale” under SFAS No. 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.” Accordingly, at December 31, 2007, we classified $1,092 million of noncurrent assets and $159 million of noncurrent liabilities as current assets and current liabilities, respectively.

During the first quarter of 2008, a portion of these held-for-sale assets were sold, and additional assets met the held-for-sale criteria. As a result, at March 31, 2008, we classified $914 million of noncurrent assets as “Prepaid expenses and other current assets” on our consolidated balance sheet and we classified $139 million of noncurrent liabilities as current liabilities, consisting of $114 million in “Accrued income and other taxes” and $25 million in “Other accruals.” We expect the disposal of these assets to be completed by the end of 2008.

The major classes of noncurrent assets and noncurrent liabilities held for sale and classified as current were:

		Millions of Dollars
		March 31				December 31
		2008				2007
Assets
Investments and long-term receivables		$	4				48
Net properties, plants and equipment			834				946
Goodwill			66				89
Intangibles			2				2
Other assets			8				7
Total assets		$	914				1,092
Exploration and Production		$	154				189
Refining and Marketing			760				903
		$	914				1,092
Liabilities
Asset retirement obligations and accrued environmental costs		$	21				23
Deferred income taxes			114				133
Other liabilities and deferred credits			4				3
Total liabilities		$	139				159
Exploration and Production		$	27				35
Refining and Marketing			112				124
		$	139				159

Note 6—Investments, Loans and Long-Term Receivables

LUKOIL

Our ownership interest in LUKOIL was 20 percent at March 31, 2008, based on 851 million shares authorized and issued. For financial reporting under U.S. generally accepted accounting principles, treasury shares held by LUKOIL are not considered outstanding for determining our equity-method ownership interest in LUKOIL. Our ownership interest, based on estimated shares outstanding, was 20.6 percent at March 31, 2008.

At March 31, 2008, the book value of our ordinary share investment in LUKOIL was $11,896 million. Our share of the net assets of LUKOIL was estimated to be $9,382 million. This basis difference of $2,514 million is primarily being amortized on a unit-of-production basis. On March 31, 2008, the closing price of LUKOIL

shares on the London Stock Exchange was $85.80 per share, making the total market value of our LUKOIL investment $14,596 million.

Loans to Related Parties

As part of our normal ongoing business operations and consistent with industry practice, we invest and enter into numerous agreements with other parties to pursue business opportunities, which share costs and apportion risks among the parties as governed by the agreements. Included in such activity are loans made to certain affiliated companies. Significant loans to affiliated companies at March 31, 2008, included the following:

	•		$612 million in loan financing and an additional $101 million of accrued interest to Freeport LNG for the construction of a liquefied natural gas (LNG) facility. We expect to provide loan financing of approximately $678 million, excluding accrued interest, for the construction of the facility.
	•		$355 million in loan financing and an additional $39 million of accrued interest to Varandey Terminal Company associated with the costs of a terminal expansion. We expect our total obligation for the terminal expansion to be approximately $386 million at current exchange rates, excluding interest to be accrued during construction.
	•		$733 million of project financing and an additional $52 million of accrued interest to Qatargas 3, an integrated project to produce and liquefy natural gas from Qatar’s North field. Our maximum exposure to this financing structure is $1.2 billion, excluding accrued interest.

Note 7—Properties, Plants and Equipment

The company’s investment in properties, plants and equipment (PP&E), with accumulated depreciation, depletion and amortization (Accum. DD&A), was:

		Millions of Dollars
		March 31, 2008												December 31, 2007
		Gross				Accum.				Net				Gross				Accum.				Net
		PP&E				DD&A				PP&E				PP&E				DD&A				PP&E
E&P		$	104,570				32,714				71,856				102,550				30,701				71,849
Midstream			115				65				50				267				103				164
R&M			20,376				4,936				15,440				19,926				4,733				15,193
LUKOIL Investment			-				-				-				-				-				-
Chemicals			-				-				-				-				-				-
Emerging Businesses			1,254				171				1,083				1,204				138				1,066
Corporate and Other			1,479				701				778				1,414				683				731
		$	127,794				38,587				89,207				125,361				36,358				89,003

Suspended Wells

The company’s capitalized cost of suspended wells at March 31, 2008, was $669 million, an increase of $80 million from $589 million at year-end 2007. For the category of exploratory well costs capitalized for a period greater than one year as of December 31, 2007, $9 million was charged to dry hole expense during the first three months of 2008.

Note 8—Debt

In January 2008, we repaid $1 billion of our Floating Rate Five-Year Term Note due 2011, reducing the outstanding balance to $2 billion. In March 2008, we redeemed our $300 million 7.125% Debentures due 2028 at a premium of $8 million, plus accrued interest.

At March 31, 2008, we had a $7.5 billion revolving credit facility, which expires in September 2012. The facility may be used as direct bank borrowings, as support for the ConocoPhillips $7.5 billion commercial paper program, as support for the ConocoPhillips Qatar Funding Ltd. $1.5 billion commercial paper program, or as support for issuances of letters of credit totaling up to $750 million. At March 31, 2008, and December 31, 2007, we had no outstanding borrowings under the credit facilities, but $40 million and $41 million, respectively, in letters of credit had been issued. Under both commercial paper programs, $1,856 million of commercial paper was outstanding at March 31, 2008, compared with $725 million at December 31, 2007.

Also at March 31, 2008, we classified $1,856 million of short-term debt as long-term debt, based on our ability and intent to refinance the obligation on a long-term basis under our revolving credit facilities.

Note 9—Joint Venture Acquisition Obligation

On January 3, 2007, we closed on a business venture with EnCana Corporation. As part of this transaction, we are obligated to contribute $7.5 billion, plus interest, over a ten-year period, beginning in 2007, to the upstream business venture, FCCL Oil Sands Partnership, which was formed as a result of the transaction.

Quarterly principal and interest payments of $237 million began in the second quarter of 2007, and will continue until the balance is paid. Of the principal obligation amount, approximately $601 million is short-term and is included in the “Accounts payable—related parties” line on our March 31, 2008, consolidated balance sheet. The principal portion of these payments, which totaled $145 million in the first three months of 2008, is presented on our consolidated statement of cash flows as an other financing activity. Interest accrues at a fixed annual rate of 5.3 percent on the unpaid principal balance. Fifty percent of the quarterly interest payment is reflected as a capital contribution and is included in the “Capital expenditures and investments” line on our consolidated statement of cash flows.

Note 10—Guarantees

At March 31, 2008, we were liable for certain contingent obligations under various contractual arrangements as described below. We recognize a liability, at inception, for the fair value of our obligation as a guarantor for newly issued or modified guarantees. Unless the carrying amount of the liability is noted below, we have not recognized a liability either because the guarantees were issued prior to December 31, 2002, or because the fair value of the obligation is immaterial.

Construction Completion Guarantees

•

In June 2006, we issued a guarantee for 24 percent of the $2 billion in credit facilities of Rockies Express Pipeline LLC (Rockies Express), which will be used to construct a natural gas pipeline across a portion of the United States. At March 31, 2008, Rockies Express had $1,523 million outstanding under the credit facilities, with our 24 percent guarantee equaling $366 million. The maximum potential amount of future payments to third-party lenders under the guarantee is estimated to be $480 million, which could become payable if the credit facility is fully utilized and Rockies Express fails to meet its obligations under the credit agreement. In addition, we also have a guarantee for 24 percent of $600 million of Floating Rate Notes due 2009 issued by Rockies Express in September 2007. It is

			anticipated final construction completion will be achieved in 2009, and refinancing will take place at that time, making the debt nonrecourse to ConocoPhillips. At March 31, 2008, the total carrying value of these guarantees to third-party lenders was $12 million. See Note 3—Variable Interest Entities (VIEs), for additional information.
	•		In December 2005, we issued a construction completion guarantee for 30 percent of the $4.0 billion in loan facilities of Qatargas 3, which will be used to construct an LNG train in Qatar. Of the $4.0 billion in loan facilities, ConocoPhillips has committed to provide $1.2 billion. The maximum potential amount of future payments to third-party lenders under the guarantee is estimated to be $850 million, which could become payable if the full debt financing is utilized and completion of the Qatargas 3 project is not achieved. The project financing will be nonrecourse to ConocoPhillips upon certified completion, which is expected in 2010. At March 31, 2008, the carrying value of the guarantee to the third-party lenders was $11 million. For additional information, see Note 6—Investments, Loans and Long-Term Receivables.

Guarantees of Joint-Venture Debt

•

At March 31, 2008, we had guarantees outstanding for our portion of joint-venture debt obligations, which have terms of up to 17 years. The maximum potential amount of future payments under the guarantees is approximately $90 million. Payment would be required if a joint venture defaults on its debt obligations.

Other Guarantees

	•		The Merey Sweeny, L.P. (MSLP) joint-venture project agreement requires the partners in the venture to pay cash calls to cover operating expenses in the event the venture does not have enough cash to cover operating expenses after setting aside the amount required for debt service over the next 17 years. Although there is no maximum limit stated in the agreement, the intent is to cover short-term cash deficiencies should they occur. Our maximum potential future payments under the agreement are currently estimated to be $100 million, assuming such a shortfall exists at some point in the future due to an extended operational disruption.
	•		In February 2003, we entered into two agreements establishing separate guarantee facilities of $50 million each for two LNG ships. Subject to the terms of each such facility, we will be required to make payments should the charter revenue generated by the respective ship fall below certain specified minimum thresholds, and we will receive payments to the extent that such revenues exceed those thresholds. The net maximum future payments that we may have to make over the 20-year terms of the two agreements could be up to $100 million in total. To the extent we receive any such payments, our actual gross payments over the 20 years could exceed that amount. In the event either ship is sold or a total loss occurs, we also may have recourse to the sales or insurance proceeds to recoup payments made under the guarantee facilities.
	•		We have guarantees of the residual value of leased corporate aircraft. The maximum potential payment under these guarantees at March 31, 2008, was $150 million.
	•		In December 2007, we acquired a 50 percent equity interest in the Keystone Oil Pipeline (Keystone) to form a 50/50 joint venture with TransCanada Corporation. Keystone plans to construct a crude oil pipeline originating in Hardisty, Alberta, with delivery points at Wood River and Patoka, Illinois, and Cushing, Oklahoma. In connection with certain planning and construction activities, agreements were put in place with third parties to guarantee the payments due. Our maximum potential amount of future payments under those agreements are estimated to be $400 million, which could become payable if Keystone fails to meet its obligations under the agreements noted above and the obligation cannot otherwise be mitigated. Payments under the guarantees are contingent upon the partners not making necessary equity contributions into Keystone; therefore, it is considered unlikely that payments would be required. All but $15 million of the guarantees will terminate after construction is completed, currently estimated to be in 2010.
	•		We have other guarantees with maximum future potential payment amounts totaling $200 million, which consist primarily of dealer and jobber loan guarantees to support our marketing business, guarantees to

fund the short-term cash liquidity deficits of certain joint ventures, one small construction completion guarantee, guarantees relating to the startup of a refining joint venture, and guarantees of the lease payment obligations of a joint venture. These guarantees generally extend up to 10 years or life of the venture and payment would be required only if the dealer, jobber or lessee goes into default, if the joint ventures have cash liquidity issues, if a construction project is not completed, or if a guaranteed party defaults on lease payments.

Indemnifications

Over the years, we have entered into various agreements to sell ownership interests in certain corporations and joint ventures and have sold several assets, including downstream and midstream assets, certain exploration and production assets, and downstream retail and wholesale sites that gave rise to qualifying indemnifications. Agreements associated with these sales include indemnifications for taxes, environmental liabilities, permits and licenses, employee claims, real estate indemnity against tenant defaults, and litigation. The terms of these indemnifications vary greatly. The majority of these indemnifications are related to environmental issues, the term is generally indefinite and the maximum amount of future payments is generally unlimited. The carrying amount recorded for these indemnifications at March 31, 2008, was $452 million. We amortize the indemnification liability over the relevant time period, if one exists, based on the facts and circumstances surrounding each type of indemnity. In cases where the indemnification term is indefinite, we will reverse the liability when we have information the liability is essentially relieved or amortize the liability over an appropriate time period as the fair value of our indemnification exposure declines. Although it is reasonably possible future payments may exceed amounts recorded, due to the nature of the indemnifications, it is not possible to make a reasonable estimate of the maximum potential amount of future payments. Included in the carrying amount recorded were $265 million of environmental accruals for known contamination that is included in asset retirement obligations and accrued environmental costs at March 31, 2008. For additional information about environmental liabilities, see Note 11—Contingencies and Commitments.

Note 11—Contingencies and Commitments

In the case of all known non-income-tax-related contingencies, we accrue a liability when the loss is probable and the amount is reasonably estimable. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. We do not reduce these liabilities for potential insurance or third-party recoveries. If applicable, we accrue receivables for probable insurance or other third-party recoveries. In the case of income-tax-related contingencies, we adopted FIN 48, effective January 1, 2007. FIN 48 requires a cumulative probability-weighted loss accrual in cases where sustaining a tax position is less than certain.

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

Environmental

We are subject to federal, state and local environmental laws and regulations. These may result in obligations to remove or mitigate the effects on the environment of the placement, storage, disposal or release of certain chemical, mineral and petroleum substances at various sites. When we prepare our consolidated financial statements, we record accruals for environmental liabilities based on management’s best estimates, using all

information that is available at the time. We measure estimates and base liabilities on currently available facts, existing technology, and presently enacted laws and regulations, taking into account stakeholder and business considerations. When measuring environmental liabilities, we also consider our prior experience in remediation of contaminated sites, other companies’ cleanup experience, and data released by the U.S. Environmental Protection Agency (EPA) or other organizations. We consider unasserted claims in our determination of environmental liabilities and we accrue them in the period that they are both probable and reasonably estimable.

Although liability of those potentially responsible for environmental remediation costs is generally joint and several for federal sites and frequently so for state sites, we are usually only one of many companies cited at a particular site. Due to the joint and several liabilities, we could be responsible for all of the cleanup costs related to any site at which we have been designated as a potentially responsible party. If we were solely responsible, the costs, in some cases, could be material to our, or one of our segments’, results of operations, capital resources or liquidity. However, settlements and costs incurred in matters that previously have been resolved have not been material to our results of operations or financial condition. We have been successful to date in sharing cleanup costs with other financially sound companies. Many of the sites at which we are potentially responsible are still under investigation by the EPA or the state agencies concerned. Prior to actual cleanup, those potentially responsible normally assess the site conditions, apportion responsibility and determine the appropriate remediation. In some instances, we may have no liability or may attain a settlement of liability. Where it appears that other potentially responsible parties may be financially unable to bear their proportional share, we consider this inability in estimating our potential liability and we adjust our accruals accordingly.

As a result of various acquisitions in the past, we assumed certain environmental obligations. Some of these environmental obligations are mitigated by indemnifications made by others for our benefit and some of the indemnifications are subject to dollar limits and time limits. We have not recorded accruals for any potential contingent liabilities that we expect to be funded by the prior owners under these indemnifications.

We are currently participating in environmental assessments and cleanups at numerous federal Superfund and comparable state sites. After an assessment of environmental exposures for cleanup and other costs, we make accruals on an undiscounted basis (except for those acquired in a purchase business combination, which we record on a discounted basis) for planned investigation and remediation activities for sites where it is probable that future costs will be incurred and these costs can be reasonably estimated. At March 31, 2008, our balance sheet included a total environmental accrual of $1,057 million, compared with $1,089 million at December 31, 2007. We expect to incur the majority of these expenditures within the next 30 years. We have not reduced these accruals for possible insurance recoveries. In the future, we may be involved in additional environmental assessments, cleanups and proceedings.

Legal Proceedings

Our legal organization applies its knowledge, experience, and professional judgment to the specific characteristics of our cases, employing a litigation management process to manage and monitor the legal proceedings against us. Our process facilitates the early evaluation and quantification of potential exposures in individual cases. This process also enables us to track those cases which have been scheduled for trial, as well as the pace of settlement discussions in individual matters. Based on professional judgment and experience in using these litigation management tools and available information about current developments in all our cases, our legal organization believes that there is only a remote likelihood that future costs related to known contingent liability exposures will exceed current accruals by an amount that would have a material adverse impact on our consolidated financial statements.

Other Contingencies

We have contingent liabilities resulting from throughput agreements with pipeline and processing companies not associated with financing arrangements. Under these agreements, we may be required to provide any such company with additional funds through advances and penalties for fees related to throughput capacity not

utilized. In addition, at March 31, 2008, we had performance obligations secured by letters of credit of $1,338 million (of which $40 million was issued under the provisions of our revolving credit facilities, and the remainder was issued as direct bank letters of credit) and various purchase commitments for materials, supplies, services and items of permanent investment incident to the ordinary conduct of business.

Note 12—Comprehensive Income

ConocoPhillips’ comprehensive income was as follows:

		Millions of Dollars
		Three Months Ended
		March 31
		2008				2007
Net income		$	4,139				3,546
After-tax changes in:
Defined benefit pension plans
Net prior service cost			4				5
Net actuarial loss			9				16
Nonsponsored plans			2				(3	)
Foreign currency translation adjustments			(435	)			131
Hedging activities			(2	)			(1	)
Comprehensive income		$	3,717				3,694

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

		Millions of Dollars
		March 31				December 31
		2008				2007
Defined benefit pension plans		$	(450	)			(465	)
Foreign currency translation adjustments			4,598				5,033
Deferred net hedging loss			(10	)			(8	)
Accumulated other comprehensive income		$	4,138				4,560

Note 13—Cash Flow Information

		Millions of Dollars
		Three Months Ended
		March 31
		2008				2007
Noncash Investing and Financing Activities
Investment in an upstream business venture through issuance of an acquisition obligation		$	-				7,313
Investment in a downstream business venture through contribution of noncash assets and liabilities			-				2,415
Cash Payments
Interest		$	86				115
Income taxes			1,649				1,199

Note 14—Employee Benefit Plans

Pension and Postretirement Plans

		Millions of Dollars
		Pension Benefits																Other Benefits
Three Months Ended		March 31																March 31
		2008								2007								2008				2007
		U.S.				Int’l.				U.S.				Int'l.
Components of Net Periodic Benefit Cost
Service cost		$	47				23				44				24				3				3
Interest cost			62				44				57				38				12				11
Expected return on plan assets			(56	)			(44	)			(51	)			(35	)			-				-
Amortization of prior service cost			2				-				3				2				3				3
Recognized net actuarial loss (gain)			16				3				15				11				(4	)			(4	)
Net periodic benefit costs		$	71				26				68				40				14				13

During the first three months of 2008, we contributed $113 million to our domestic qualified and nonqualified plans and $48 million to our international benefit plans. We currently expect to contribute a total of $460 million to our domestic plans and $177 million to our international plans in 2008.

Note 15—Related Party Transactions

Significant transactions with related parties were:

		Millions of Dollars
		Three Months Ended
		March 31
		2008				2007
Operating revenues (a)		$	3,171				2,618
Purchases (b)			4,398				3,210
Operating expenses and selling, general and administrative expenses (c)			116				108
Net interest expense (d)			21				30

Note 16—Segment Disclosures and Related Information

We have organized our reporting structure based on the grouping of similar products and services, resulting in six operating segments:

	1)		E&P—This segment primarily explores for, produces, transports and markets crude oil, natural gas and natural gas liquids on a worldwide basis.
	2)		Midstream—This segment gathers, processes and markets natural gas produced by ConocoPhillips and others, and fractionates and markets natural gas liquids, primarily in the United States and Trinidad. The Midstream segment primarily consists of our 50 percent equity investment in DCP Midstream.
	3)		R&M—This segment purchases, refines, markets and transports crude oil and petroleum products, mainly in the United States, Europe and Asia Pacific.
	4)		LUKOIL Investment—This segment represents our investment in the ordinary shares of LUKOIL, an international, integrated oil and gas company headquartered in Russia. At March 31, 2008, our ownership interest was 20 percent based on issued shares, and 20.6 percent based on estimated shares outstanding.
	5)		Chemicals—This segment manufactures and markets petrochemicals and plastics on a worldwide basis. The Chemicals segment consists of our 50 percent equity investment in CPChem.
	6)		Emerging Businesses—This segment represents our investment in new technologies or businesses outside our normal scope of operations.

Corporate and Other includes general corporate overhead, most interest income and expense, restructuring charges, and various other corporate activities. Corporate assets include all cash and cash equivalents.

We evaluate performance and allocate resources based on net income. Intersegment sales are at prices that approximate market.

Analysis of Results by Operating Segment

		Millions of Dollars
		Three Months Ended
		March 31
		2008				2007
Sales and Other Operating Revenues
E&P
United States		$	11,547				8,272
International			8,441				6,013
Intersegment eliminations—U.S.			(2,112	)			(1,156	)
Intersegment eliminations—international			(2,297	)			(1,441	)
E&P			15,579				11,688
Midstream
Total sales			1,642				1,105
Intersegment eliminations			(88	)			(59	)
Midstream			1,554				1,046
R&M
United States			26,961				20,039
International			10,926				8,635
Intersegment eliminations—U.S.			(219	)			(144	)
Intersegment eliminations—international			(7	)			(2	)
R&M			37,661				28,528
LUKOIL Investment			-				-
Chemicals			3				3
Emerging Businesses
Total sales			258				169
Intersegment eliminations			(177	)			(114	)
Emerging Businesses			81				55
Corporate and Other			5				-
Consolidated sales and other operating revenues		$	54,883				41,320

		Millions of Dollars
		Three Months Ended
		March 31
		2008				2007
Net Income (Loss)
E&P
United States		$	1,349				916
International			1,538				1,413
Total E&P			2,887				2,329
Midstream			137				85
R&M
United States			435				896
International			85				240
Total R&M			520				1,136
LUKOIL Investment			710				256
Chemicals			52				82
Emerging Businesses			12				(1	)
Corporate and Other			(179	)			(341	)
Consolidated net income		$	4,139				3,546

		Millions of Dollars
		March 31				December 31
		2008				2007
Total Assets
E&P
United States		$	36,263				35,160
International			59,426				59,412
Goodwill			25,587				25,569
Total E&P			121,276				120,141
Midstream			1,856				2,016
R&M
United States			27,296				24,336
International			10,517				9,766
Goodwill			3,767				3,767
Total R&M			41,580				37,869
LUKOIL Investment			11,896				11,164
Chemicals			2,273				2,225
Emerging Businesses			1,277				1,230
Corporate and Other			3,120				3,112
Consolidated total assets		$	183,278				177,757

Note 17—Income Taxes

Our effective tax rates for the first quarters of 2008 and 2007 were 45 percent and 42 percent, respectively. The change in the effective tax rate for the first quarter of 2008, versus the same period of 2007, was primarily due to the effect of our asset rationalization efforts during 2007, partially offset by a higher proportion of income in higher tax rate jurisdictions also during the 2007 quarter. The effective tax rate in excess of the domestic federal statutory rate of 35 percent was primarily due to foreign taxes.

Note 18—New Accounting Standards

In December 2007, the FASB issued SFAS No. 141 (Revised), “Business Combinations” (SFAS No. 141(R)). This Statement will apply to all transactions in which an entity obtains control of one or more other businesses. In general, SFAS No. 141(R) requires the acquiring entity in a business combination to recognize the fair value of all the assets acquired and liabilities assumed in the transaction; establishes the acquisition-date as the fair value measurement point; and modifies the disclosure requirements. This Statement applies prospectively to business combinations for which the acquisition date is on or after January 1, 2009. However, starting January 1, 2009, accounting for changes in valuation allowances for acquired deferred tax assets and the resolution of uncertain tax positions for prior business combinations will impact tax expense instead of impacting goodwill. We are currently evaluating the changes provided in this Statement.

Also in December 2007, the FASB issued SFAS No. 160, “Noncontrolling Interests in Consolidated Financial Statements—an amendment of ARB No. 51,” which changes the classification of noncontrolling interests, sometimes called a minority interest, in the consolidated financial statements. Additionally, this Statement establishes a single method of accounting for changes in a parent company’s ownership interest that do not result in deconsolidation and requires a parent company to recognize a gain or loss when a subsidiary is deconsolidated. This Statement is effective January 1, 2009, and will be applied prospectively with the exception of the presentation and disclosure requirements which must be applied retrospectively for all periods presented. We are currently evaluating the impact on our consolidated financial statements.

In March 2008, the FASB issued SFAS No. 161, “Disclosures about Derivative Instruments and Hedging Activities—an amendment of FASB No. 133.” This Statement expands the annual and interim disclosure requirements of SFAS No. 133, “Accounting for Derivative Instruments and Hedging Activities,” for derivative instruments within the scope of that Statement. We must adopt SFAS No. 161 no later than January 1, 2009, but it will not have any impact on our consolidated financial statements, other than the additional disclosures.

Supplementary Information—Condensed Consolidating Financial Information

We have various cross guarantees among ConocoPhillips, ConocoPhillips Company, ConocoPhillips Australia Funding Company, ConocoPhillips Canada Funding Company I, and ConocoPhillips Canada Funding Company II, with respect to publicly held debt securities. ConocoPhillips Company is wholly owned by ConocoPhillips. ConocoPhillips Australia Funding Company is an indirect, wholly owned subsidiary of ConocoPhillips Company. ConocoPhillips Canada Funding Company I and ConocoPhillips Canada Funding Company II are indirect, wholly owned subsidiaries of ConocoPhillips. ConocoPhillips and ConocoPhillips Company have fully and unconditionally guaranteed the payment obligations of ConocoPhillips Australia Funding Company, ConocoPhillips Canada Funding Company I, and ConocoPhillips Canada Funding Company II, with respect to their publicly held debt securities. Similarly, ConocoPhillips has fully and unconditionally guaranteed the payment obligations of ConocoPhillips Company with respect to its publicly held debt securities. In addition, ConocoPhillips Company has fully and unconditionally guaranteed the payment obligations of ConocoPhillips with respect to its publicly held debt securities. All guarantees are joint and several. The following condensed consolidating financial information presents the results of operations, financial position and cash flows for:

	•		ConocoPhillips, ConocoPhillips Company, ConocoPhillips Australia Funding Company, ConocoPhillips Canada Funding Company I, and ConocoPhillips Canada Funding Company II (in each case, reflecting investments in subsidiaries utilizing the equity method of accounting).
	•		All other nonguarantor subsidiaries of ConocoPhillips.
	•		The consolidating adjustments necessary to present ConocoPhillips’ results on a consolidated basis.

This condensed consolidating financial information should be read in conjunction with the accompanying consolidated financial statements and notes.

		Millions of Dollars
		Three Months Ended March 31, 2008
										ConocoPhillips
										Australia				ConocoPhillips				ConocoPhillips
						ConocoPhillips				Funding				Canada Funding				Canada Funding				All Other				Consolidating				Total
Income Statement		ConocoPhillips				Company				Company				Company I				Company II				Subsidiaries				Adjustments				Consolidated
Revenues and Other Income
Sales and other operating revenues		$	-				34,803				-				-				-				20,080				-				54,883
Equity in earnings of affiliates			4,185				3,061				-				-				-				1,308				(7,195	)			1,359
Other income			-				149				-				-				-				161				-				310
Intercompany revenues			9				717				24				23				14				6,050				(6,837	)			-
Total Revenues and Other Income			4,194				38,730				24				23				14				27,599				(14,032	)			56,552
Costs and Expenses
Purchased crude oil, natural gas and products			-				31,492				-				-				-				12,643				(6,315	)			37,820
Production and operating expenses			-				1,080				-				-				-				1,618				(7	)			2,691
Selling, general and administrative expenses			2				349				-				-				-				225				(50	)			526
Exploration expenses			-				55				-				-				-				254				-				309
Depreciation, depletion and amortization			-				372				-				-				-				1,837				-				2,209
Impairments			-				4				-				-				-				2				-				6
Taxes other than income taxes			-				1,254				-				-				-				3,962				(61	)			5,155
Accretion on discounted liabilities			-				15				-				-				-				89				-				104
Interest and debt expense			77				65				22				19				13				415				(404	)			207
Foreign currency transaction (gains) losses			-				(4	)			-				(72	)			(73	)			106				-				(43	)
Minority interests			-				-				-				-				-				19				-				19
Total Costs and Expenses			79				34,682				22				(53	)			(60	)			21,170				(6,837	)			49,003
Income before income taxes			4,115				4,048				2				76				74				6,429				(7,195	)			7,549
Provision for income taxes			(24	)			437				1				4				8				2,984				-				3,410
Net Income (Loss)		$	4,139				3,611				1				72				66				3,445				(7,195	)			4,139

		Millions of Dollars
		Three Months Ended March 31, 2007
										ConocoPhillips
										Australia				ConocoPhillips				ConocoPhillips
						ConocoPhillips				Funding				Canada Funding				Canada Funding				All Other				Consolidating				Total
Income Statement		ConocoPhillips				Company				Company				Company I				Company II				Subsidiaries				Adjustments				Consolidated
Revenues and Other Income
Sales and other operating revenues		$	-				25,977				-				-				-				15,343				-				41,320
Equity in earnings of affiliates			3,563				3,022				-				-				-				545				(6,201	)			929
Other income			-				(110	)			-				-				-				728				-				618
Intercompany revenues			89				698				30				19				12				3,813				(4,661	)			-
Total Revenues and Other Income			3,652				29,587				30				19				12				20,429				(10,862	)			42,867
Costs and Expenses
Purchased crude oil, natural gas and products			-				22,022				-				-				-				8,631				(3,938	)			26,715
Production and operating expenses			-				1,108				-				-				-				1,427				(43	)			2,492
Selling, general and administrative expenses			3				291				-				-				-				229				4				527
Exploration expenses			-				22				-				-				-				240				-				262
Depreciation, depletion and amortization			-				362				-				-				-				1,662				-				2,024
Impairments			-				(24	)			-				-				-				23				-				(1	)
Taxes other than income taxes			-				1,503				-				-				-				2,938				(67	)			4,374
Accretion on discounted liabilities			-				14				-				-				-				65				-				79
Interest and debt expense			112				355				28				19				13				397				(617	)			307
Foreign currency transaction (gains) losses			-				-				-				7				10				(16	)			-				1
Minority interests			-				-				-				-				-				21				-				21
Total Costs and Expenses			115				25,653				28				26				23				15,617				(4,661	)			36,801
Income before income taxes			3,537				3,934				2				(7	)			(11	)			4,812				(6,201	)			6,066
Provision for income taxes			(9	)			584				1				(7	)			(8	)			1,959				-				2,520
Net Income (Loss)		$	3,546				3,350				1				-				(3	)			2,853				(6,201	)			3,546

		Millions of Dollars
		At March 31, 2008
										ConocoPhillips
										Australia				ConocoPhillips				ConocoPhillips
						ConocoPhillips				Funding				Canada Funding				Canada Funding				All Other				Consolidating				Total
Balance Sheet		ConocoPhillips				Company				Company				Company I				Company II				Subsidiaries				Adjustments				Consolidated
Assets
Cash and cash equivalents		$	-				131				-				6				-				1,432				(146	)			1,423
Accounts and notes receivable			34				12,021				24				12				4				19,752				(14,696	)			17,151
Inventories			-				4,373				-				-				-				2,624				(2	)			6,995
Prepaid expenses and other current assets			9				855				-				3				2				2,170				-				3,039
Total Current Assets			43				17,380				24				21				6				25,978				(14,844	)			28,608
Investments, loans and long-term receivables*			88,335				60,806				1,700				1,427				966				21,975				(140,515	)			34,694
Net properties, plants and equipment			-				17,921				-				-				-				71,274				12				89,207
Goodwill			-				12,732				-				-				-				16,622				-				29,354
Intangibles			-				800				-				-				-				84				-				884
Other assets			7				180				3				5				4				425				(93	)			531
Total Assets		$	88,385				109,819				1,727				1,453				976				136,358				(155,440	)			183,278
Liabilities and Stockholders’ Equity
Accounts payable		$	5				19,403				-				11				5				15,966				(14,696	)			20,694
Short-term debt			1				296				-				-				-				87				-				384
Accrued income and other taxes			-				1,288				-				-				(1	)			5,692				97				7,076
Employee benefit obligations			-				378				-				-				-				220				(1	)			597
Other accruals			36				751				29				32				22				1,428				76				2,374
Total Current Liabilities			42				22,116				29				43				26				23,393				(14,524	)			31,125
Long-term debt			4,481				5,398				1,699				1,250				848				7,432				-				21,108
Asset retirement obligations and accrued environmental costs			-				1,140				-				-				-				6,220				-				7,360
Joint venture acquisition obligation			-				-				-				-				-				6,141				-				6,141
Deferred income taxes			(3	)			3,005				-				34				25				17,928				16				21,005
Employee benefit obligations			-				2,213				-				-				-				886				-				3,099
Other liabilities and deferred credits*			734				17,635				-				64				31				14,358				(30,108	)			2,714
Total Liabilities			5,254				51,507				1,728				1,391				930				76,358				(44,616	)			92,552
Minority interests			-				(19	)			-				-				-				1,172				(2	)			1,151
Retained earnings			47,393				27,563				(1	)			(75	)			(41	)			23,209				(44,142	)			53,906
Other stockholders’ equity			35,738				30,768				-				137				87				35,619				(66,680	)			35,669
Total		$	88,385				109,819				1,727				1,453				976				136,358				(155,440	)			183,278