Notes to Consolidated Financial Statements

Note 6 — Restructuring

As a result of the acquisition of Burlington Resources, we implemented a restructuring program in March 2006 to capture the synergies of combining the two companies. Under this program, which is expected to be completed by the end of March 2008, we recorded accruals totaling $230 million for employee severance payments, site closings, incremental pension benefit costs associated with the workforce reductions, and employee relocations. Approximately 600 positions have been identified for elimination, most of which are in the United States. Of the total accrual, $224 million is reflected in the Burlington Resources purchase price allocation as an assumed liability, and $6 million ($4 million after-tax) related to ConocoPhillips is reflected in selling, general and administrative expenses. Included in the total accruals of $230 million is $12 million related to pension benefits to be paid in conjunction with other retirement benefits over a number of future years. The following table summarizes benefit payments made during 2006 related to the non-pension accrual.