COPConocoPhillips

In early 2021, we established a multidisciplinary Low Carbon Technologies organization with the remit of supporting our emissions reduction objectives, understanding the alternative energy landscape and prioritizing We continue to evaluate low carbon opportunities for potential future competitive investment. investment in support of our operational emission reduction targets. Such potential investments may expose us to numerous financial, legal, operational, reputational and other risks. While we perform a thorough analysis on these investments, the related technologies risks and markets are at early stages of development and we do not yet know what rate of return we will achieve, if any, and we may suspend our evaluation or investment if we determine that applicable markets have not developed at the pace required to support further investment. For example, as a result of the hydrogen and ammonia markets not developing at a pace required to support further investment, in 2024 we decided to suspend our evaluation of a low-carbon ammonia production facility on the U.S. Gulf Coast. Furthermore, we may not be able ultimately contribute materially to scale potential investments. operational emissions reductions. The success of our low-carbon strategy any such investment will depend in part upon the cooperation of government agencies, the support of stakeholders, the development of relevant markets for low carbon fuels, our ability to research and forecast potential investments, willingness of industry partners to collaborate and our ability to apply our existing strengths and expertise to new technologies, projects and markets.

Decreases Increases to earnings included lower higher revenues resulting from lower overall commodity prices higher volumes of $904 $142 million and the timing of sales as compared with 2023, 2024 partly offset by higher volumes lower commodity prices of $1,003 million, which includes volumes added from our acquisition of Marathon Oil. Additional decreases $303 million. Increases to earnings included higher lower DD&A of $562 million, $63 million driven by year-end 2024 upward reserve revisions and higher production other income of $250 million, higher rates of $181 $62 million and impacts primarily from our acquisition of Marathon Oil of $139 million; higher a change in fair value measurement associated with the Surmont contingent consideration arrangement. Additional increases to earnings included lower production and operating expenses of $431 million, $52 million driven by higher transportation related costs of $132 million, expenses associated with our acquisition of Marathon Oil of $110 million and higher lease operating expenses of $100 million; as well as the absence of gains associated with the divestiture of an equity investment of $100 million. prior-year planned turnaround activity at Surmont. See Note 3. 11.

Several Louisiana parishes and the State of Louisiana have filed numerous lawsuits under Louisiana’s State and Local Coastal Resources Management Act (SLCRMA) against oil and gas companies, including ConocoPhillips, seeking compensatory damages for contamination and erosion of the Louisiana coastline allegedly caused by historical oil and gas operations. ConocoPhillips entities are defendants in several of the lawsuits and will vigorously defend against them. On October 17, 2022, the Fifth Circuit affirmed remand of the lead case to state court and the subsequent request for rehearing was denied. Accordingly, the federal district courts have issued remands to state court. Because Plaintiffs’ SLCRMA theories are unprecedented, there is uncertainty about these claims (both as to scope and damages) damages), and we continue to evaluate our exposure in these lawsuits. lawsuits while assessing options for early resolution.

•Consolidation Principles and Investments—Our consolidated financial statements include the accounts of majority-owned, controlled subsidiaries and, if applicable, variable interest entities where we are the primary beneficiary. The equity method is used to account for investments in affiliates in which we have the ability to exert significant influence over the affiliates’ operating and financial policies. When we do not have the ability to exert significant influence, the investment is measured at fair value except when the investment does not have a readily determinable fair value. For those exceptions, it will be measured at cost minus impairment, plus or minus observable price changes in orderly transactions for an identical or similar investment of the same issuer. Undivided interests in oil and gas joint ventures, pipelines, natural gas plants and terminals are consolidated on a proportionate basis. Other securities and investments are generally carried at cost. We manage our operations through six five operating segments, defined by geographic region: Alaska; Lower 48; Canada; Europe, Middle East and North Africa; and Asia Pacific; and Other International. Pacific. See Note 23. 22.