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United States securities and exchange commission logo
March 22, 2024
William Bullock, Jr
EVP and Chief Financial Officer
ConocoPhillips
925 N. Eldridge Parkway
Houston, TX 77079
Re: ConocoPhillips
Form 10-K for the
Fiscal Year ended December 31, 2023
Filed February 15,
2024
File No. 001-32395
Dear William Bullock:
We have reviewed your
filing and have the following comments.
Please respond to this letter within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe a
comment applies to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to this letter, we may have additional comments.
Form 10-K for the Fiscal Year ended December 31, 2023
Management's Discussion and Analysis
Income Statement Analysis, page 41
1. We note that your
discussion and analysis of the income statement is limited to providing
a list of line items
along with quantification of changes for each caption during 2023, and
a few remarks
indicating the primary reasons for the change. However, you neither
disclose nor discuss
any numerical measures of activity from the income statement, either
on a consolidated or
segment basis, other than net income or loss, a few details of the
corporate and other
segment measure on page 49, and exploration expense on page 42.
We believe that you
would need to substantively revise your disclosures to comply with
Item 303(a) of
Regulation S-K, which requires a discussion and analysis "of the financial
statements" and
describes the objective as "to provide material information relevant to an
assessment of the
financial condition and results of operations" with the expectation that
such disclosures will
allow investors to view the business from management's
perspective. This
guidance states that you should "focus specifically on material events
William Bullock, Jr
FirstName LastNameWilliam Bullock, Jr
ConocoPhillips
Comapany
March NameConocoPhillips
22, 2024
March2 22, 2024 Page 2
Page
FirstName LastName
and uncertainties known to management that are reasonably likely to
cause reported
financial information not to be necessarily indicative of future
operating results or of
future financial condition," and provide within your disclosures
"descriptions and amounts
of matters that have had a material impact on reported operations."
We believe that disclosures of changes in line items should be
accompanied by the
corresponding measures of activity, including revenues and any costs
and expenses that
are material, to provide not only for an assessment of the periodic
results and
management's perspective, but also to provide context for the periodic
changes, to clarify
the significance of the change relative to the measures that are
exhibiting the change. For
example, we suggest including tabulations adjacent to your discussion
and analyses of the
consolidated results on page 41, and of the segment results on pages
44 through 48.
Please submit the revisions that you propose to address the concerns
outlined above and
explain to us how you have considered the indicative value of the
financial information
reported on the various line items of your income statement in
formulating your
disclosures; and to the extent that you believe the activity is not
relevant to an assessment
of your results of operations, explain to us the rationale underlying
your view.
2. We note that in discussing changes in the consolidated and segment
results there are
several instances in which you identify multiple reasons without
quantifying the extent of
change attributable to each item mentioned. For example, you state
that the change in
revenues is "primarily due to lower realized commodity prices
partially offset by higher
sales volumes," and that the increase in production and operating
expenses is "due to
increased well work activities and higher production volumes."
Item 303(b) of Regulation S-K, requires that when financial statements
reflect material
changes in line items, including changes that offset one another
within line items, the
underlying reasons be described in quantitative and qualitative terms,
which extends to
segment information when necessary to an understanding of the
business.
The guidance in subparagraphs (b)(2)(i), (ii), and (iii) further
clarifies that such
disclosures should address any significant economic changes that
materially affected
income from continuing operations, including "significant components
of revenues
or expenses" that are material to an understanding of the results of
operations, trends or
uncertainties that have had or that are reasonably likely to have "a
material impact on net
sales or revenues," events that are reasonably likely to cause "a
material change in the
relationship between costs and revenues," and when there have been
material changes in
net sales or revenues, this guidance requires that you quantify the
extent to which
such changes are attributable to changes in volumes, and separately to
changes in prices.
Please submit the revisions that you propose to address the concerns
outlined above and
identify the specific language within the revisions that you believe
will address each
requirement that is mentioned, such as the effects of significant
economic changes on
components of revenues and expenses, material changes in the
relationships between costs
William Bullock, Jr
ConocoPhillips
March 22, 2024
Page 3
and revenues, and your view of the apparent trends exhibited by the
historical activity
reported on the various line items of your income statement.
We remind you that the company and its management are responsible for
the accuracy
and adequacy of their disclosures, notwithstanding any review, comments, action
or absence of
action by the staff.
Please contact Mark Wojciechowski at 202-551-3759 or Karl Hiller at
202-551-3686 if
you have questions regarding comments on the financial statements and related
matters.
FirstName LastNameWilliam Bullock, Jr Sincerely,
Comapany NameConocoPhillips
Division of
Corporation Finance
March 22, 2024 Page 3 Office of Energy
& Transportation
FirstName LastName