Employee Benefit Plans

12 Months Ended

Dec. 31, 2012

Employee Benefit Plans [Abstract]

Employee Benefit Plans

Note 19—Employee Benefit Plans

Pension and Postretirement Plans

In connection with the separation of the Downstream business, ConocoPhillips entered into an Employee Matters Agreement with Phillips 66, see Note 2—Discontinued Operations, which provides that employees of Phillips 66 no longer participate in benefit plans sponsored or maintained by ConocoPhillips as of the separation date. Upon separation, the ConocoPhillips pension and postretirementplans transferred assets and obligations to the Phillips 66 plans resulting in a net decrease in sponsored pension and postretirement plan obligations of $1,127 million. Additionally, as a result of the transfer of unrecognized losses to Phillips 66, deferred income taxes and other comprehensive incomedecreased $335 million and $570 million, respectively.

An analysis of the projected benefit obligations for our pension plans and accumulated benefit obligations for
our postretirement health and life insurance plans follows:
	Millions of Dollars
	Pension Benefits					Other Benefits
	2012			2011		2012	2011
	U.S.		Int’l.	U.S.	Int’l.
Change in Benefit Obligation
Benefit obligation at January 1	$	6,175	3,484	5,539	3,206	926	862
Service cost		170	91	225	98	6	10
Interest cost		186	152	247	178	33	42
Plan participant contributions		-	7	-	5	23	23
Government subsidy		-	-	-	-	-	4
Separation of Downstream business		(2,464)	(653)	-	-	(199)	-
Plan amendments		-	-	-	(53)	-	35
Actuarial loss		735	297	642	195	47	20
Benefits paid		(577)	(113)	(478)	(116)	(72)	(68)
Foreign currency exchange rate change		-	173	-	(29)	1	(2)
Benefit obligation at December 31*	$	4,225	3,438	6,175	3,484	765	926
*Accumulated benefit obligation portion of above at		3,710	2,972	5,363	2,939
December 31:	$
Change in Fair Value of Plan Assets
Fair value of plan assets at January 1	$	4,149	2,722	3,890	2,581	-	-
Actual return on plan assets		509	267	64	53	-	-
Company contributions		363	204	673	226	49	41
Plan participant contributions		-	7	-	5	23	23
Government subsidy		-	-	-	-	-	4
Separation of Downstream business		(1,712)	(479)	-	-	-	-
Benefits paid		(577)	(113)	(478)	(116)	(72)	(68)
Foreign currency exchange rate change		-	152	-	(27)	-	-
Fair value of plan assets at December 31	$	2,732	2,760	4,149	2,722	-	-
Funded Status	$	(1,493)	(678)	(2,026)	(762)	(765)	(926)

		Millions of Dollars
		Pension Benefits						Other Benefits
		2012				2011		2012	2011
		U.S.			Int’l.	U.S.	Int’l.
Amounts Recognized in the
	Consolidated Balance Sheet at
	December 31
Noncurrent assets		$	-		94	-	94	-	-
Current liabilities			(21)		(8)	(118)	(5)	(54)	(62)
Noncurrent liabilities			(1,472)		(764)	(1,908)	(851)	(711)	(864)
Total recognized		$	(1,493)		(678)	(2,026)	(762)	(765)	(926)
Weighted-Average Assumptions Used to
	Determine Benefit Obligations at
	December 31
Discount rate			3.55	%	4.50	4.30	4.90	3.55	4.40
Rate of compensation increase			4.75		4.45	4.25	4.30	-	-
Weighted-Average Assumptions Used to
	Determine Net Periodic Benefit Cost for
	Years Ended December 31
Discount rate			4.00	%	4.95	4.65	5.40	4.25	5.00
Expected return on plan assets			7.00		6.10	7.00	6.40	-	-
Rate of compensation increase			4.50		4.50	4.00	4.10	-	-

For both U.S. and international pensions, the overall expected long-term rate of return is developed from the expected future return of each asset class, weighted by the expected allocation of pension assets to that asset class. We rely on a variety of independent market forecasts in developing the expected rate of return for each class of assets.

Included in accumulated other comprehensive income at December 31 were the following before-tax amounts
that had not been recognized in net periodic benefit cost:
	Millions of Dollars
	Pension Benefits					Other Benefits
	2012			2011		2012	2011
	U.S.		Int’l.	U.S.	Int’l.
Unrecognized net actuarial loss (gain)	$	1,509	758	2,240	705	29	(26)
Unrecognized prior service cost (credit)		28	(60)	52	(78)	(12)	(13)

		Millions of Dollars
		Pension Benefits					Other Benefits
		2012			2011		2012	2011
		U.S.		Int’l.	U.S.	Int’l.
Sources of Change in Other
	Comprehensive Income
Net loss arising during the period		$	(450)	(206)	(858)	(307)	(48)	(20)
Separation of Downstream business			810	94	-	-	(7)	-
Amortization of (gain) loss included in
	income*		371	59	185	46	-	(5)
Net change during the period		$	731	(53)	(673)	(261)	(55)	(25)
Prior service (cost) credit arising during the
	period	$	-	2	-	53	-	(34)
Separation of Downstream business			17	(12)	-	-	3	-
Amortization of prior service cost (credit)
	included in income		7	(8)	9	-	(4)	(7)
Net change during the period		$	24	(18)	9	53	(1)	(41)
* Includes settlement losses recognized during the period.

Amounts included in accumulated other comprehensive income at December 31, 2012, that are expected to
be amortized into net periodic postretirement cost during 2013 are provided below:
	Millions of Dollars
	Pension Benefits			Other Benefits
	U.S.		Int’l.
Unrecognized net actuarial loss	$	151	76		3
Unrecognized prior service cost (credit)		6	(8)		(4)

For our tax-qualified pension plans with projected benefit obligations in excess of plan assets, the projected benefit obligation, the accumulated benefit obligation, and the fair value of plan assets were $6,278million, $5,602million, and $4,537million, respectively, at December31, 2012, and $8,481million, $7,377million, and $6,098million, respectively, at December 31, 2011.

For our unfunded nonqualified key employee supplemental pension plans, the projected benefit obligation and the accumulated benefit obligation were $525million and $382million, respectively, at December31, 2012, and were $499million and $374 million, respectively, at December31, 2011.

The components of net periodic benefit cost of all defined benefit plans are presented in the following table:
		Millions of Dollars
		Pension Benefits							Other Benefits
		2012			2011		2010		2012	2011	2010
		U.S.		Int’l.	U.S.	Int’l.	U.S.	Int’l.
Components of Net
	Periodic Benefit Cost
Service cost		$	170	91	225	98	229	90	6	10	11
Interest cost			186	152	247	178	260	169	33	42	46
Expected return on plan
	assets		(223)	(158)	(280)	(175)	(224)	(147)	-	-	-
Amortization of prior
	service cost (credit)		7	(8)	9	-	10	2	(4)	(7)	3
Recognized net actuarial
	loss (gain)		191	59	165	46	167	55	-	(5)	(7)
Net periodic benefit cost		$	331	136	366	147	442	169	35	40	53

In addition to the above, we recognized pension settlement losses of $181 million (including $24million in discontinued operations) in 2012 and $21million in 2011. Nonewas recognized in 2010. In 2012, lump-sum benefit payments from the U.S. qualified pension plan exceeded the sum of service and interest costs for that plan and led to an increase in settlement losses.

In determining net pension and other postretirement benefit costs, we amortize prior service costs on a straight-line basis over the average remaining service period of employees expected to receive benefits under the plan. For net actuarial gains and losses, we amortize 10 percent of the unamortized balance each year.

We have multiple nonpension postretirement benefit plans for health and life insurance. The health care plans are contributory and subject to various cost sharing features, with participant and company contributions adjusted annually; the life insurance plans are noncontributory. The measurement of the accumulated postretirement benefit obligation assumes a health care cost trend rate of 7.5 percent in 2012 that declines to 5percent by 2023. A one-percentage-point change in the assumed health care cost trend rate would be immaterial to ConocoPhillips.

Plan Assets—We follow a policy of broadly diversifying pension plan assets across asset classes, investment managers, and individual holdings. As a result, our plan assets have no significant concentrations of credit risk. Asset classes that are considered appropriate include U.S. equities, non-U.S. equities, U.S. fixed income, non-U.S. fixed income, real estate and private equity investments. Plan fiduciaries may consider and add other asset classes to the investment program from time to time. The target allocations for plan assets are 59 percent equity securities,37 percent debt securities and 4 percent real estate. Generally, the plan investments are publicly traded, therefore minimizing liquidity risk in the portfolio.

The following is a description of the valuation methodologies used for the pension plan assets. There have been no changes in the methodologies used at December 31, 2012 and 2011.

• Fair values of equity securities and government debt securities categorized in Level 1 are primarily based on quoted market prices.
• Fair values of corporate debt securities, agency and mortgage-backed securities and government debt securities categorized in Level 2 are estimated using recently executed transactions and quoted market prices. If there have been no market transactions in a particular fixed income security, its fair value is calculated by pricing models that benchmark the security against other securities with actual market prices. When observable quoted market prices are not available, fair value is based on pricing models that use something other than actual market prices (e.g., observable inputs such as benchmark yields, reported trades and issuer spreads for similar securities), and these securities are categorized in Level 3 of the fair value hierarchy.
• Fair values of investments in common/collective trusts are determined by the issuer of each fund based on the fair value of the underlying assets.
• Fair values of mutual funds are based on quoted market prices, which represent the net asset value of shares held.
• Cash is valued at cost, which approximates fair value. Fair values of international cash equivalents categorized in Level 2 are valued using observable yield curves, discounting and interest rates. U.S. cash balances held in the form of short-term fund units that are redeemable at the measurement date are categorized as Level 2.
• Fair values of exchange-traded derivatives classified in Level 1 are based on quoted market prices. For other derivatives classified in Level 2, the values are generally calculated from pricing models with market input parameters from third-party sources.
• Private equity funds are valued at net asset value as determined by the issuer based on the fair value of the underlying assets.
• Fair values of insurance contracts are valued at the present value of the future benefit payments owed by the insurance company to the plans' participants.
• Fair values of real estate investments are valued using real estate valuation techniques and other methods that include reference to third-party sources and sales comparables where available.
• A portion of U.S. pension plan assets is held as a participating interest in an insurance annuity contract, which is calculated as the market value of investments held under this contract, less the accumulated benefit obligation covered by the contract. The participating interest is classified as Level 3 in the fair value hierarchy as the fair value is determined via a combination of quoted market prices, recently executed transactions, and an actuarial present value computation for contract obligations. At December 31, 2012, the participating interest in the annuity contract was valued at $133 million and consisted of $358million in debt securities, less $225million for the accumulated benefit obligation covered by the contract. At December 31, 2011, the participating interest in the annuity contract was valued at $144million and consisted of $391million in debt securities, less $247million for the accumulated benefit obligation covered by the contract. The net change from 2011 to 2012 is due to a decrease in the fair value of the underlying investments of $33million and a decrease in the present value of the contract obligation of $22million. The participating interest is not available for meeting general pension benefit obligations in the near term. No future company contributions are required and no new benefits are being accrued under this insurance annuity contract.

The fair values of our pension plan assets at December 31, by asset class were as follows:
			Millions of Dollars
			U.S.					International
				Level 1	Level 2	Level 3	Total	Level 1	Level 2	Level 3	Total
2012
Equity Securities
	U.S.		$	875	-	-	875	443	-	-		443
	International			587	-	-	587	381	-	-		381
	Common/collective trusts			-	472	-	472	-	195	-		195
	Mutual funds			-	-	-	-	319	-	-		319
Debt Securities
	Government			146	54	-	200	496	-	-		496
	Corporate			-	306	2	308	-	155	1		156
	Agency and mortgage-backed
		securities		-	59	-	59	-	29	-		29
	Common/collective trusts			-	-	-	-	-	314	-		314
	Mutual funds			-	-	-	-	155	-	-		155
Cash and cash equivalents				-	94	-	94	22	18	-		40
Private equity funds				-	-	4	4	-	-	18		18
Derivatives				-	1	-	1	10	13	-		23
Real estate				-	-	-	-	-	-	183		183
Total*			$	1,608	986	6	2,600	1,826	724	202		2,752
*Excludes the participating interest in the insurance annuity contract with a net asset value of $133 million and net receivables related to
security transactions of $7 million.
2011
Equity Securities
	U.S.		$	1,251	-	-	1,251	413	-	-		413
	International			803	-	-	803	413	-	-		413
	Common/collective trusts			-	634	-	634	-	234	-		234
	Mutual funds			-	-	-	-	246	-	-		246
Debt Securities
	Government			311	81	-	392	532	-	-		532
	Corporate			-	551	3	554	-	122	1		123
	Agency and mortgage-backed
		securities		-	105	-	105	-	43	-		43
	Common/collective trusts			-	-	-	-	-	346	-		346
	Mutual funds			-	-	-	-	130	-	-		130
Cash and cash equivalents				-	249	-	249	32	26	-		58
Private equity funds				-	-	4	4	-	-	13		13
Derivatives				-	-	-	-	-	11	-		11
Insurance contracts				-	-	-	-	-	-	15		15
Real estate				-	-	-	-	-	-	139		139
Total*			$	2,365	1,620	7	3,992	1,766	782	168		2,716
*Excludes the participating interest in the insurance annuity contract with a net asset value of $144 million and net receivables related to
security transactions of $19 million.

Level 3 activity was not material.

Our funding policy for U.S. plans is to contribute at least the minimum required by the Employee Retirement Income Security Act of 1974 and the Internal Revenue Code of 1986, as amended. Contributions to foreign plans are dependent upon local laws and tax regulations. In 2013, we expect to contribute approximately $275million to our domestic qualified and nonqualified pension and postretirement benefit plans and $210 million to our international qualified and nonqualified pension and postretirement benefit plans.

The following benefit payments, which are exclusive of amounts to be paid from the insurance annuity
contract and which reflect expected future service, as appropriate, are expected to be paid:
	Millions of Dollars
	Pension Benefits			Other Benefits
	U.S.		Int’l.
2013	$	375	118		62
2014		370	126		63
2015		366	137		63
2016		370	141		63
2017		399	146		63
2018-2022		2,067	897		291

Defined Contribution Plans

Most U.S. employees are eligible to participate in the ConocoPhillips Savings Plan (CPSP). Employees can deposit up to 75 percent of their eligible pay up to the statutory limit ($17,000 in 2012) in the thrift feature of the CPSP to a choice of approximately 38 investment funds. Through 2012, ConocoPhillips matched contribution deposits, up to 1.25percent of eligible pay. Company contributions charged to expense related to continuing and discontinued operations for the CPSP and predecessor plans, excluding the stock savings feature (discussed below), were $16million in 2012, $25 million in 2011, and $24million in 2010.

The stock savings feature of the CPSP is a leveraged employee stock ownership plan. Through 2012, employees could elect to participate in the stock savings feature by contributing 1 percent of eligible pay and receiving an allocation of shares of common stock proportionate to the amount of contribution.

In 1990, the Long-Term Stock Savings Plan of Phillips Petroleum Company (now the stock savings feature of the CPSP) borrowed funds that were used to purchase previously unissued shares of company common stock. Since the Company guarantees the CPSP's borrowings, the unpaid balance is reported as a liability of the Company and unearned compensation is shown as a reduction of common stockholders' equity. Dividends on all shares are charged against retained earnings. The debt is serviced by the CPSP from company contributions and dividends received on certain shares of common stock held by the plan, including all unallocated shares. The shares held by the stock savings feature of the CPSP are released for allocation to participant accounts based on debt service payments on CPSP borrowings. In 2012, the final debt service payment was made and all remaining unallocated shares were released for allocation to participant accounts.

We recognize interest expense as incurred and compensation expense based on the fair value of the stock contributed or on the cost of the unallocated shares released, using the shares-allocated method. We recognized total CPSP expense related to continuing and discontinued operations to the stock savings feature of $104 million, $77 million and $92 million in 2012, 2011 and 2010, respectively, all of which was compensation expense. In 2012 and 2011, we made cash contributions to the CPSP of $5 million and $4 million, respectively. No cash contributions were made in 2010. In 2011 and 2010, we contributed 660,755shares and 1,776,873shares, respectively, of company common stock from the Compensation and Benefits Trust. The shares had a fair value of $84million and $103million, respectively. In 2012 and 2011, we contributed 1,554,355and 475,696shares, respectively, of company common stock from treasury stock. Dividends used to service debt were $10 million, $45 million and $41 million in 2012, 2011 and 2010, respectively. These dividends reduced the amount of compensation expense recognized each period. Interest incurred on the CPSP debt in 2012, 2011 and 2010 was $0.1 million, $1 million and $2 million, respectively.

The total CPSP stock savings feature shares as of December 31 were:
	2012		2011
Unallocated shares		-	811,963
Allocated shares		11,246,660	19,315,372
Total shares		11,246,660	20,127,335

The fair value of unallocated shares at December 31, 2011 was $59 million.

Starting in 2013, employees who participate in the CPSP and contribute 1 percent of their eligible pay will receive a 9 percent company cash match. CPSP will no longer have a stock savings feature.

We have several defined contribution plans for our international employees, each with its own terms and eligibility depending on location. Total compensation expense related to continuing and discontinued operations recognized for these international plans was approximately $56 million in 2012and2011 and $52 million in 2010.

Share-Based Compensation Plans

The 2011 Omnibus Stock and Performance Incentive Plan of ConocoPhillips (the Plan) was approved by shareholders in May 2011. Over its 10-year life, the Plan allows the issuance of up to 100 million shares of our common stock for compensation to our employees and directors; however, as of the effective date of the Plan, (i) any shares of common stock available for future awards under the prior plans and (ii) any shares of common stock represented by awards granted under the prior plans that are forfeited, expire or are canceled without delivery of shares of common stock or which result in the forfeiture of shares of common stock back to the company shall be available for awards under the Plan, and no new awards shall be granted under the prior plans. Of the 100 million shares available for issuance under the Plan, no more than 40 million shares of common stock are available for incentive stock options, and no more than 40 million shares are available for awards in stock.

Our share-based compensation programs generally provide accelerated vesting (i.e., a waiver of the remaining period of service required to earn an award) for awards held by employees at the time of their retirement. We recognize share-based compensation expense over the shorter of the service period (i.e., the stated period of time required to earn the award); or the period beginning at the start of the service period and ending when an employee first becomes eligible for retirement, but not less than six months, as this is the minimum period of time required for an award to not be subject to forfeiture. Some of our share-based awards vest ratably (i.e., portions of the award vest at different times) while some of our awards cliff vest (i.e., all of the award vests at the same time). We recognize expense on a straight-line basis over the service period for the entire award, whether the award was granted with ratable or cliff vesting.

Separation-Related Adjustments—In connection with the separation of the Downstream business on April 30, 2012, ConocoPhillips entered into an Employee Matters Agreement with Phillips 66, see Note 2—Discontinued Operations, which provides that employees of Phillips 66 no longer participate in benefit plans sponsored or maintained by ConocoPhillips. Pursuant to the Employee Matters Agreement, we made certain adjustments, using volumetric weighted-average prices for the 4-day period immediately prior to and immediately following the separation, to the exercise price and number of our share-based compensation awards, with the intention of preserving the intrinsic value of the awards immediately prior to the separation. These adjustments are summarized as follows and are reflected in the activity tables below:

• Outstanding options to purchase common shares of ConocoPhillips stock that were exercisable prior to the separation were adjusted so that the holders of the options would then hold one option to purchase common shares of Phillips 66 stock for every two adjusted stock options to purchase common shares of ConocoPhillips stock following the separation.
• Nonexercisable stock options and restricted stock units were converted to those of the entity where the employee holding them is working immediately post-separation. Therefore, nonexercisable stock options to purchase common shares of ConocoPhillips stock and ConocoPhillips restricted stock units held by an employee who separated with the Downstream business were surrendered as a result of the separation.
• In addition, former employee holders and a specified group of holders of stock options and restricted stock units who retired or terminated employment upon or shortly after the separation received both adjusted ConocoPhillips awards and Philips 66 awards.
• ConocoPhillips restricted stock and performance share units awarded for completed performance periods under the Performance Share Program, as well as vested restricted stock units held by current or former directors, were adjusted to provide holders one restricted share or restricted stock unit of Phillips 66 stock for every two restricted shares or restricted stock units of ConocoPhillips stock.

The separation-related adjustments did not have a material impact on either compensation expense or the potentially dilutive securities to be considered in the calculation of diluted earnings per share of common stock.

Compensation Expense—Total share-based compensation expense recognized in income related to continuing
and discontinued operations and the associated tax benefit for the years ended December 31 were as follows:
	Millions of Dollars
	2012		2011	2010
Compensation cost	$	321	246	211
Tax benefit		118	86	78

Stock Options—Stock options granted under the provisions of the Plan and prior plans permit purchase of our common stock at exercise prices equivalent to the average market price of the stock on the date the options were granted. The options have terms of 10years and generally vest ratably, with one-third of the options awarded vesting and becoming exercisable on each anniversary date following the date of grant. Options awarded to certain employees already eligible for retirement vest within 6months of the grant date, but those options do not become exercisable until the end of the normal vesting period.

The following summarizes our stock option activity for the year ended December 31, 2012:
					Weighted-
				Weighted-	Average		Millions of Dollars
				Average	Grant-Date		Aggregate
		Options		Exercise Price	Fair Value		Intrinsic Value
Outstanding at December 31, 2011		24,372,051	$	45.73
Granted		2,335,600		71.87	$	15.69
Exercised		(9,735,269)		25.34			$	469
Forfeited		(462,862)		55.76
Expired or canceled		(32,048)		65.65
Options surrendered, as a result of
	the separation	(1,045,820)		68.01
Options granted in conversion, as a
	result of the separation	865,353		45.92
Outstanding at December 31, 2012		16,297,005	$	43.67
Vested at December 31, 2012		14,348,278	$	42.58			$	219
Exercisable at December 31, 2012		12,725,857	$	41.90			$	204

The weighted-average remaining contractual term of vested options and exercisable options at December 31, 2012, was 4.92 years and 4.52years, respectively. The weighted-average grant date fair value of stock option awards granted during 2011 and 2010 was $16.70 and $11.70, respectively. The aggregate intrinsic value of options exercised during 2011 and 2010 was $416 million and $183 million, respectively.

During 2012, we received $294 million in cash and realized a tax benefit related to continuing and discontinued operations of $153 million from the exercise of options. At December 31, 2012, the remaining unrecognized compensation expense from unvested options was $9 million, which will be recognized over a weighted-average period of 1.66years, the longest period being 2.11years.

The fair market values of the options granted over the past three years were measured on the date of grant using
the Black-Scholes option-pricing model. During 2012, all stock option grants occurred prior to the separation
of the Downstream business. The weighted-average assumptions used were as follows:
		2012			2011	2010
Assumptions used
	Risk-free interest rate		1.62	%	3.10	3.23
	Dividend yield		4.00	%	4.00	4.00
	Volatility factor		33.30	%	33.40	33.80
	Expected life (years)		7.42		6.87	6.65

The ranges in the assumptions used were as follows:
		2012				2011		2010
		High			Low	High	Low	High	Low
Ranges used
	Risk-free interest rate		1.62	%	1.62	3.10	3.10	3.23	3.23
	Dividend yield		4.00		4.00	4.00	4.00	4.00	4.00
	Volatility factor		33.30		33.30	33.40	33.40	33.80	33.80

Expected volatility above was based on historical volatility of the company's stock using ConocoPhillips end-of-week closing stock prices over a period commensurate with the expected life of the options granted. We periodically calculate the average period of time lapsed between grant dates and exercise dates of past grants to estimate the expected life of new option grants.Due to the separation of our Downstream business, our calculation of expected volatility for grants of options in 2013 will be based on a three-year average historical stock price volatility of a group of peer companies.

Stock Unit Program—Generally, restricted stock units are granted annually under the provisions of the Plan and vest ratably, with one-third of the units vesting in 36 months, one-third vesting in 48 months, and the final third vesting 60 months from the date of grant.Beginning with restricted stock units granted in 2013, the general vesting schedule will accelerate withunits vesting 36 months from the date of grant. In addition, beginning in 2012, restricted stock units are granted under the Plan for a variable long-term incentive program, with one-third of units vesting in 12 months, one-third vesting in 24 months, and the final one-third vesting 36 months from the date of grant. Restricted stock units are also granted ad hoc to attract or retain key personnel, and the terms and conditions under which these restricted stock units vest vary by award. Upon vesting, the units are settled by issuing one share of ConocoPhillips common stock per unit. Units awarded to certain employees already eligible for retirement vest six months from the grant date, but those units are not issued as shares until the end of the normal vesting period. Until issued as stock, most recipients of the units receive a quarterly cash payment of a dividend equivalent that is charged to retained earnings. The grant date fair value of these units is deemed equal to the average ConocoPhillips stock price on the date of grant. The grant date fair market value of units that do not receive a dividend equivalent while unvested is deemed equal to the average ConocoPhillips stock price on the grant date, less the net present value of the dividends that will not be received.

The following summarizes our stock unit activity for the year ended December 31, 2012:
			Weighted-Average		Millions of Dollars
		Stock Units	Grant-Date Fair Value		Total Fair Value
Outstanding at December 31, 2011		8,728,958	$	55.41
Granted		5,911,369		60.62
Forfeited		(319,691)		52.70
Issued		(2,755,134)			$	187
Awards surrendered, as a result of the
	separation	(2,368,520)		59.56
Awards granted in conversion, as a result
	of the separation	2,280,140		45.00
Outstanding at December 31, 2012		11,477,122	$	46.58
Not Vested at December 31, 2012		8,659,344	$	47.63

At December 31, 2012, the remaining unrecognized compensation cost from the unvested units was $279million, which will be recognized over a weighted-average period of 2.54 years, the longest period being 7.34years. The weighted- average grant date fair value of stock unit awards granted during 2011 and 2010 was $67.54 and $46.38, respectively. The total fair value of stock units issued during 2011 and 2010 was $109 million and $79 million respectively.

Performance Share Program—Under the Plan, we also annually grant to senior management restricted performance share units (PSUs) that do not vest until either (i) with respect to awards for performance periods beginning before 2009, the employee becomes eligible for retirement by reaching age 55 with five years of service or (ii) with respect to awards for performance periods beginning in 2009, five years after the grant date of the award (although recipients can elect to defer the lapsing of restrictions until retirement after reaching age 55 with five years of service), so we recognize compensation expense for these awards beginning on the date of grant and ending on the date the PSUs are scheduled to vest. Since these awards are authorized three years prior to the grant date, for employees eligible for such retirement by or shortly after the grant date, we recognize compensation expense over the period beginning on the date of authorization and ending on the date of grant. These PSUs are settled by issuing one share of ConocoPhillips common stock per unit. Until issued as stock, recipients of the PSUs receive a quarterly cash payment of a dividend equivalent that is charged to retained earnings. In its current form, the first grant of PSUs under this program was in 2006.

During 2012, performance share awards previously authorized but not yet granted prior to the separation with our Downstream business were granted and a pro-rata number of performance share stock units were awarded to the employee participants.

The following summarizes our Performance Share Program activity for the year ended December 31, 2012.
		Weighted-Average		Millions of Dollars
	Stock Units	Grant-Date Fair Value		Total Fair Value
Outstanding at December 31, 2011	3,517,761	$	64.35
Granted	2,812,828		74.16
Forfeited	(4,893)		63.18
Issued	(1,141,412)			$	71
Outstanding at December 31, 2012	5,184,284	$	51.54
Not Vested at December 31, 2012	1,628,706	$	52.79

At December 31, 2012, the remaining unrecognized compensation cost from unvested performance share awards was $45 million, which includes $11 million related to unvested performance share awards tied to Phillips 66 stock held by ConocoPhillips employees, which will be recognized over a weighted-average period of 3.83 years, the longest period being 8.19 years. The weighted-average grant date fair value of performance share units granted during 2011 and 2010 was $70.57 and $48.39, respectively. The total fair value of performance share units issued during 2011 and 2010 was $37 million and $12 million respectively.

Other—In addition to the above active programs, we have outstanding shares of restricted stock and restricted stock units that were either issued to replace awards held by employees of companies we acquired or issued as part of a compensation program that has been discontinued. Generally, the recipients of the restricted shares or units receive a quarterly dividend or dividend equivalent.

The following summarizes the aggregate activity of these restricted shares and units for the year ended
December 31, 2012:
		Weighted-Average		Millions of Dollars
	Stock Units	Grant-Date Fair Value		Total Fair Value
Outstanding at December 31, 2011	2,587,915	$	33.49
Granted	86,701		63.54
Forfeited	(205,701)		24.20
Issued	(1,336,359)			$	73
Outstanding at December 31, 2012	1,132,556	$	27.34
Not Vested at December 31, 2012	-

At December 31, 2012, all outstanding restricted stock and restricted stock units were fully vested and there was no remaining compensation cost to be recorded.The weighted-average grant date fair value of restricted shares and units granted during 2011 and 2010 was $70.25 and $53.33, respectively. The total fair value of restricted shares and units issued during 2011 and 2010 was $10 million and $9 million respectively.