UNITED STATES
SECURITIES AND EXCHANGE COMMISSION

FORM 10-Q

(Mark One)

For the quarterly period ended March 31, 2005          

OR

For the transition period from                                          to                                         

Commission file number 001-32395          

ConocoPhillips

600 North Dairy Ashford, Houston, TX 77079

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 an accelerated filer (as defined in Rule 12b-2 of the Exchange Act). Yes þ No o

The registrant had 696,149,683 shares of common stock, $.01 par value, outstanding at March 31, 2005.

CONOCOPHILLIPS

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. FINANCIAL STATEMENTS

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Note 1—Interim Financial Information

The financial information for the interim periods presented in the financial statements included in this report is unaudited and includes all known accruals and adjustments that, in the opinion of management, are 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. These interim financial statements should be read in conjunction with Management’s Discussion and Analysis of Financial Condition and Results of Operations and the consolidated financial statements and notes included in ConocoPhillips’ 2004 Annual Report on Form 10-K. Certain amounts in the 2004 financial statements included in this report on Form 10-Q have been reclassified to conform to the 2005 presentation.

Note 2—Accounting Policies

Revenue Recognition—Revenues associated with sales of crude oil, natural gas, natural gas liquids, petroleum and chemical products, and other items are recognized when title passes to the customer, which is when the risk of ownership passes to the purchaser and physical delivery of goods occurs, either immediately or within a fixed delivery schedule that is reasonable and customary in the industry. Revenues include the sales portion of transactions commonly called buy/sell contracts, in which physical commodity purchases and sales are simultaneously contracted with the same counterparty to either obtain a different quality or grade of refinery feedstock supply, reposition a commodity (for example, where we enter into a contract with a counterparty to sell refined products or natural gas volumes at one location and purchase similar volumes at another location closer to our wholesale customer), or both.

At its March 2005 and November 2004 meetings, the Emerging Issues Task Force (EITF) discussed Issue No. 04-13, “Accounting for Purchases and Sales of Inventory with the Same Counterparty,” which addresses accounting issues that arise when one company both sells inventory to, and buys inventory from, another company in the same line of business. The purchase and sale transactions may be pursuant to a single contractual arrangement or separate contractual arrangements, and the inventory purchased or sold may be in the form of raw material, work-in-progress, or finished goods. At issue is whether both the revenue and inventory/cost of sales should be recorded at fair value or whether the transactions should be classified as nonmonetary exchanges subject to the fair value exception of Accounting Principles Board (APB) Opinion No. 29, “Accounting for Nonmonetary Transactions.” Issue No. 04-13 encompasses our buy/sell transactions described above.

Buy/sell transactions have the same general terms and conditions as typical commercial contracts including: separate title transfer, transfer of risk of loss, separate gross billing and cash settlement for both the buy and sell sides of the transaction, and non-performance by one party does not relieve the other party of its obligation to perform (except in events of force majeure). Because buy/sell contracts have similar terms and conditions, we account for these purchase and sale transactions in the consolidated income statement as monetary transactions outside the scope of APB Opinion No. 29.

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Our buy/sell transactions are similar to the “barrel back” example used in EITF Issue No. 03-11, “Reporting Realized Gains and Losses on Derivative Instruments That Are Subject to FASB Statement No. 133 and Not ‘Held for Trading Purposes’ as Defined in Issue No. 02-3.” Using the “barrel back” example, the EITF concluded that a company’s decision to display buy/sell-type transactions either gross or net on the income statement is a matter of judgment that depends on relevant facts and circumstances. We apply this judgment based on guidance in EITF Issue No. 99-19, “Reporting Revenue Gross as a Principal versus Net as an Agent,” (Issue No. 99-19), which provides indicators for when to report revenues and the associated cost of goods sold gross (i.e., on separate revenue and cost of sales lines in the income statement) or net (i.e., on the same line). The indicators for gross reporting in Issue No. 99-19 are consistent with many of the characteristics of buy/sell transactions, which support our accounting for buy/sell transactions.

We also believe that the conclusion reached by the Derivatives Implementation Group Statement 133 Implementation Issue No. K1, “Miscellaneous: Determining Whether Separate Transactions Should be Viewed as a Unit,” further supports our judgment that the purchase and sale contracts should be viewed as two separate transactions and not as a single transaction.

At its March 2005 meeting, the EITF reached a tentative conclusion that exchanges of finished goods for raw materials or work-in-progress within the same line of business should be recorded at fair value because these exchanges culminate the earnings process. It is our understanding that the EITF does not expect to reach a final conclusion on whether both the revenue and inventory/cost of sales should be recorded at fair value until a decision is reached regarding whether these type of transactions should be classified as nonmonetary exchanges subject to the fair value exception of APB Opinion No. 29.

Depending on the EITF’s final conclusions, it is possible that we could be required to decrease sales and other operating revenues for first-quarter 2005 and 2004 by $4,569 million and $3,366 million, respectively, with a related decrease in purchased crude oil, natural gas and products on our consolidated income statement. We believe any impact to income from continuing operations and net income would result from LIFO inventory and would not be material to our financial statements.

Our Commercial organization uses commodity derivative contracts (such as futures and options) in various markets to optimize the value of our supply chain and balance physical systems. In addition to cash settlement prior to contract expiration, exchange-traded futures contracts may also be settled by physical delivery of the commodity, providing another source of supply to meet our refinery requirements or marketing demand. See Note 2—Accounting Policies—Derivative Instruments, for additional information on our accounting for, and reporting of, commodity derivative contracts.

Revenues from the production of natural gas properties, in which we have an interest with other producers, are recognized based on the actual volumes we sold during the period. Any differences between volumes sold and entitlement volumes, based on our net working interest, which are deemed to be non-recoverable through remaining production, are recognized as accounts receivable or accounts payable, as appropriate. Cumulative differences between volumes sold and entitlement volumes are generally not significant. Revenues associated with royalty fees from licensed technology are recorded based either upon volumes produced by the licensee or upon the successful completion of all substantive performance requirements related to the installation of licensed technology.

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Stock-Based Compensation—Effective January 1, 2003, we voluntarily adopted the fair-value accounting method prescribed by Statement of Financial Accounting Standard (SFAS) No. 123, “Accounting for Stock-Based Compensation.” We used the prospective transition method, applying the fair-value accounting method and recognizing compensation expense equal to the fair-market value on the grant date for all stock options granted or modified after December 31, 2002.

Employee stock options granted prior to 2003 continue to be accounted for under APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and related Interpretations. Because the exercise price of our employee stock options equals the market price of the underlying stock on the date of grant, no compensation expense is generally recognized under APB Opinion No. 25. The following table displays pro forma information as if provisions of SFAS No. 123 had been applied to all employee stock options granted:

Note 3—Changes in Accounting Principles

In April 2005, the Financial Accounting Standards Board (FASB) issued FSP FAS 19-1, “Accounting for Suspended Well Costs,” with application required in the first reporting period beginning after April 4, 2005. Under early application provisions, we adopted FSP FAS 19-1, effective January 1, 2005. The adoption of this standard did not impact our first-quarter 2005 net income. See Note 7—Properties, Plants and Equipment for additional information.

In December 2004, the FASB issued FASB Staff Position (FSP) FAS 109-1, “Application of FASB Statement No. 109, ‘Accounting for Income Taxes,’ to the Tax Deduction on Qualified Production Activities Provided by the American Jobs Creation Act of 2004” and FSP No. 109-2, “Accounting and Disclosure Guidance for the Foreign Earnings Repatriation Provision within the American Jobs Creation Act of 2004.” See Note 18—Income Taxes for additional information.

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Note 4—Discontinued Operations

Sales and other operating revenues and income (loss) from discontinued operations were as follows:

Assets of discontinued operations were primarily properties, plants and equipment, while liabilities of discontinued operations were primarily deferred taxes.

Note 5—Inventories

Inventories consisted of the following:

Inventories valued on a last-in, first-out (LIFO) basis totaled $3,855 million and $2,988 million at March 31, 2005, and December 31, 2004, respectively. The remainder of our inventories is 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 $3,196 million and $2,220 million at March 31, 2005, and December 31, 2004, respectively.

Note 6—Investments and Long-Term Receivables

LUKOIL

During the first quarter of 2005, we increased our ownership interest in LUKOIL to 11.3 percent at March 31, 2005, from 10.0 percent at December 31, 2004.

At March 31, 2005, the book value of our ordinary share investment in LUKOIL was $3,177 million. Our 11.3 percent share of the net assets of LUKOIL was estimated to be $2,449 million. This basis difference is $728 million, a majority of which is being amortized on a unit-of-production basis. On March 31, 2005, the closing price of LUKOIL shares on the London Stock Exchange was $33.88 per share, making the aggregate total market value of our LUKOIL investment $3,243 million at that date.

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Duke Energy Field Services, LLC (DEFS)

On February 24, 2005, ConocoPhillips and Duke Energy Corporation (Duke) agreed to general terms to restructure their respective ownership levels in DEFS, which would cause DEFS to become a jointly controlled venture, owned 50 percent by each company. This restructuring has been approved by the Boards of Directors of both owners. While the specific steps that will achieve this restructuring are still being negotiated with Duke, we expect that we will increase our current 30.3 percent ownership in DEFS to 50 percent through a series of direct and indirect transfers of certain Canadian Midstream assets from ConocoPhillips and DEFS to Duke, a disproportionate cash distribution from DEFS to Duke from the sale of DEFS’ interest in TEPPCO Partners, L.P. (TEPPCO), a $398 million cash contribution from ConocoPhillips to DEFS, and a final net cash payment to Duke of approximately $210 million, the last two items of which we expect to fund from our general liquidity resources. The restructuring is expected to close in the second or third quarter of 2005, subject to normal regulatory approvals.

The restructuring is expected to have the effect of significantly reducing the favorable basis difference in our investment in DEFS which, in turn, will significantly reduce the basis difference amortization reported in equity method earnings.

In first-quarter 2005, as a part of equity earnings, we recorded our $306 million (after tax) equity share of the financial gain from DEFS’ sale of the interest in TEPPCO.

Note 7—Properties, Plants and Equipment

Properties, plants and equipment included the following:

Suspended Wells

In April 2005, the FASB issued FASB Staff Position No. FAS 19-1, “Accounting for Suspended Well Costs” (FSP No. 19-1). This FASB Staff Position was issued to address whether there are circumstances that would permit the continued capitalization of exploratory well costs beyond one year, other than when further exploratory drilling is planned and major capital expenditures would be required to develop the project.

FSP No. 19-1 requires the continued capitalization of suspended well costs if the well has found a sufficient quantity of reserves to justify its completion as a producing well and the company is making sufficient progress assessing the reserves and the economic and operating viability of the project. All relevant facts and circumstances should be evaluated in determining whether a company is making sufficient progress assessing the reserves, and FSP No. 19-1 provides several indicators to assist in this evaluation. FSP No. 19-1 prohibits continued capitalization of suspended well costs on the chance that market conditions will change or technology will be developed to make the project economic. We adopted FSP No. 19-1 effective January 1, 2005. There was no impact to our consolidated financial statements from the adoption of this FASB Staff Position.

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The following table reflects the net changes in suspended exploratory well costs during the first quarter of 2005, as well as for the years 2004 and 2003.

The following table provides an aging of suspended well balances at March 31, 2005, and December 31, 2004 and 2003:

The following table provides a further aging of those exploratory well costs that have been capitalized for more than one year since the completion of drilling as of March 31, 2005:

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Note 8—Property Impairments

In the first quarters of 2005 and 2004, we recorded property impairments related to planned dispositions in our Midstream, Exploration and Production (E&P) and Refining and Marketing (R&M) segments. The amount of property impairments by segment were:

Note 9—Debt

At March 31, 2005, we had two revolving credit facilities totaling $5 billion, available for use either as direct bank borrowings or as support for the issuance of up to $5 billion in commercial paper, a portion of which may be denominated in other currencies (limited to euro 3 billion equivalent). The facilities included a $2.5 billion four-year facility expiring in October 2008 and a $2.5 billion five-year facility expiring in October 2009. In addition, the five-year facility may be used to support issuances of letters of credit totaling up to $750 million. The facilities are broadly syndicated among financial institutions and do not contain any material adverse change provisions or any covenants requiring maintenance of specified financial ratios or ratings. The credit agreements do contain a cross-default provision relating to our, or any of our consolidated subsidiaries’, failure to pay principal or interest on other debt obligations of $200 million or more. At March 31, 2005, and December 31, 2004, we had no outstanding borrowings under these facilities, but $173 million in letters of credit had been issued. There was no commercial paper outstanding at March 31, 2005, compared with $544 million at December 31, 2004.

In late March 2005, we redeemed our $400 million 3.625% Notes due 2007 at par plus accrued interest. In conjunction with this redemption, $400 million of interest rate swaps were cancelled.

Note 10—Contingencies and Commitments

In the case of all known contingencies, we accrue a liability when the loss is probable and the amount is reasonably estimable. 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.

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.

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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 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 consideration the likely effects of societal and economic factors. 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 also consider unasserted claims in our determination of environmental liabilities and we accrue them in the period that they become 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 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 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 those assumed 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, 2005, ConocoPhillips’ balance sheet included a total environmental accrual of $1,059 million, compared with $1,061 million at December 31, 2004. 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—We apply our 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 trial settings, as well as the status and pace of settlement discussions in individual matters. Based on our professional judgment and experience in using these litigation management tools and available information about current developments in all our

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cases, we believe 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 financial statements.

In January 2005, we entered into a consent decree with the United States, the states of Louisiana, Illinois, Pennsylvania, New Jersey, and the Northwest Clean Air Agency (the state of Washington) to settle allegations arising out of the EPA’s national enforcement initiative, as well as other related Clean Air Act regulation issues. In the consent decree, we agreed to reduce air emissions from refineries in Washington, California, Texas, Louisiana, Illinois, Pennsylvania, and New Jersey over the next eight years. We plan to spend an estimated $525 million over that time period to install control technology and equipment to reduce emissions from stacks, vents, valves, heaters, boilers, and flares.

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 by ConocoPhillips. In addition, we have performance obligations that are secured by unused letters of credit and various purchase commitments for materials, supplies, services and items of permanent investment incident to the ordinary conduct of business.

Note 11—Guarantees

At March 31, 2005, 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, no liability has been recorded related to the guarantee.

Construction Completion Guarantees

Guarantees of Joint-Venture Debt

Other Guarantees

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Indemnifications

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Note 12—Comprehensive Income

ConocoPhillips’ comprehensive income was as follows:

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

Note 13—Supplemental Cash Flow Information

Note 14—Sales of Receivables

At December 31, 2004, certain credit card and trade receivables had been sold to a Qualifying Special Purpose Entity (QSPE) in a revolving-period securitization arrangement. This arrangement provides for us to sell, and the QSPE to purchase, certain receivables and for the QSPE to then issue beneficial interests of up to $1.2 billion to five bank-sponsored entities. At December 31, 2004, the QSPE had issued beneficial

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interests to the bank-sponsored entities of $480 million. All five bank-sponsored entities are multi-seller conduits with access to the commercial paper market and purchase interests in similar receivables from numerous other companies unrelated to us. We have no ownership interests, nor any variable interests, in any of the bank-sponsored entities. As a result, we do not consolidate any of these entities. Furthermore, except as discussed below, we do not consolidate the QSPE because it meets the requirements of SFAS No. 140, “Accounting for Transfers and Servicing of Financial Assets and Extinguishments of Liabilities,” to be excluded from the consolidated financial statements of ConocoPhillips. The receivables transferred to the QSPE met the isolation and other requirements of SFAS No. 140 to be accounted for as sales and were accounted for accordingly.

By January 31, 2005, all of the beneficial interests held by the bank-sponsored entities had matured; therefore, in accordance with FAS 140, the operating results and cash flows of the QSPE subsequent to this maturity have been consolidated with our financial statements, and the assets and liabilities of the QSPE are included in our March 31, 2005 balance sheet.

Total cash flows received from and paid under the securitization arrangements were as follows:

Note 15—Employee Benefit Plans

Pension and Postretirement Plans

We recognized pension settlement losses of $4 million in the first quarter of 2004 due to high levels of lump-sum elections by new retirees in certain plans.

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During the first quarter of 2005, we contributed $100 million to our domestic qualified and non-qualified benefit plans and $34 million to international qualified and non-qualified benefit plans. For the full year 2005, we expect to contribute approximately $410 million to our domestic plans and $140 million to our international plans.

Note 16—Related Party Transactions

Significant transactions with related parties were:

Elimination of our equity percentage share of profit or loss on the above transactions was not material.

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Note 17—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:

Corporate and Other includes general corporate overhead; interest income and expense; discontinued operations; restructuring charges; certain eliminations; 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.

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Analysis of Results by Operating Segment

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Note 18—Income Taxes

Our effective tax rates for the first quarter of 2005 and 2004 were 41 percent and 46 percent, respectively. The reduction in the effective tax rate for the first quarter of 2005, versus the same period in 2004, was due to the utilization of capital loss carryforwards that previously had a full valuation allowance and a lower proportion of income in higher tax rate jurisdictions. The effective tax rate in excess of the domestic federal statutory rate of 35 percent was primarily due to foreign taxes.

One of the provisions of the American Jobs Creation Act of 2004 was a special deduction for qualifying manufacturing activities. While the legislation is still undergoing clarifications, under guidance from FASB FSP No. 109-1, we included the estimated impact as a current benefit, which was not material to the company’s effective tax rate, and it did not have any impact on our assessment of the need for possible valuation allowances.

Another provision of the American Jobs Creation Act of 2004 was a special one-time provision allowing earnings of controlled foreign companies to be repatriated at a reduced tax rate. At this point, our investigation into our response to the legislation is preliminary, as we await additional and final clarifying legislation and guidance from the government. Because of the uncertainties related to this legislation, and as provided by FASB FSP No. 109-2, we elected to defer our decision on potentially altering our current plans on permanently reinvesting in certain foreign subsidiaries and foreign corporate joint ventures. We expect final guidance to be issued and our investigation into our response to the legislation to be completed late in 2005.

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Note 19—New Accounting Standards and Emerging Issues

New Accounting Standards

In December 2004, the FASB issued SFAS No. 153, “Exchange of Nonmonetary Assets an amendment of APB Opinion No. 29.” This amendment eliminates the APB Opinion No. 29 exception for fair value recognition of nonmonetary exchanges of similar productive assets and replaces it with an exception for exchanges of nonmonetary assets that do not have commercial substance. This Statement is effective on a prospective basis beginning July 1, 2005. We continue to evaluate this Statement.

Also in December 2004, the FASB issued SFAS No. 123 (revised 2004), “Share-Based Payment,” (SFAS 123(R)), which supercedes APB Opinion No. 25, “Accounting for Stock Issued to Employees,” and replaces SFAS No. 123, “Accounting for Stock-Based Compensation,” which we adopted at the beginning of 2003. SFAS 123(R) prescribes the accounting for a wide range of share-based compensation arrangements, including share options, restricted share plans, performance-based awards, share appreciation rights, and employee share purchase plans, and generally requires the fair value of share-based awards to be expensed in the income statement. For ConocoPhillips, this statement provided for an effective date of third-quarter 2005; however, in April 2005 the Securities and Exchange Commission approved a new rule that delayed the effective date until January 1, 2006. We plan to adopt the provisions of this Statement January 1, 2006. We are studying the provisions of this new pronouncement to determine the impact, if any, on our financial statements. For more information on our adoption of SFAS No. 123 and its effect on net income, see Note 2—Accounting Policies.

In November 2004, the FASB issued SFAS No. 151, “Inventory Costs an amendment of ARB No. 43, Chapter 4.” This Statement requires that items, such as idle facility expense, excessive spoilage, double freight, and re-handling costs, be recognized as a current-period charge. We are required to implement this Statement in the first quarter of 2006. We are analyzing the provisions of this Statement to determine the effects, if any, on our financial statements.

In May 2003, the FASB issued SFAS No. 150, “Accounting for Certain Financial Instruments with Characteristics of Liabilities and Equity,” to address the balance sheet classification of certain financial instruments that have characteristics of both liabilities and equity. The Statement, already effective for contracts created or modified after May 31, 2003, was originally intended to become effective July 1, 2003, for all contracts existing at May 31, 2003. However, on November 7, 2003, the FASB issued an indefinite deferral of certain provisions of SFAS No. 150. We continue to monitor and assess the FASB’s modifications of SFAS No. 150, but do not anticipate any material impact to our financial statements.

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Emerging Issues

Note 20—Subsequent Event

On April 7, 2005, our Board of Directors declared a 2-for-1 split on our common stock effected in the form of a 100 percent stock dividend, payable June 1, 2005, to stockholders of record as of May 16, 2005. The total number of authorized common stock shares and associated par value per share was unchanged by this action. Per share information in the Consolidated Income Statement and stockholders’ equity information in the Consolidated Balance Sheet presented in this report are on a pre-split basis.

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Supplementary Information—Condensed Consolidating Financial Information

We have various cross guarantees among ConocoPhillips and ConocoPhillips Company with respect to publicly held debt securities. ConocoPhillips Company is wholly owned by ConocoPhillips. ConocoPhillips has fully and unconditionally guaranteed the payment obligations of ConocoPhillips Company with respect to its publicly held debt securities. Similarly, 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:

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

Effective January 1, 2005, ConocoPhillips Holding Company was merged into ConocoPhillips Company. Previously reported prior period information has been restated to reflect this reorganization of companies under common control.

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