Looking Ahead While we are very pleased with our progress in 2014, it is  impossible to ignore the dramatic weakening of oil and gas  prices that began toward the end of the year and continued  into 2015. While the duration of the current oil and gas price  downturn cannot be predicted, world supplies appear to  be more abundant than previously anticipated, in large part  due to growth from the North American unconventionals.  In addition, global oil demand is growing less rapidly than  previously forecast. Therefore, the supply and demand  imbalance could constrain prices through 2015 or longer.  We further advanced our workforce priorities during 2014.  We are building a culture of collaboration, and investing in  health and wellness programs and professional development.  We believe these are important aspects of our goal to make  ConocoPhillips a great place to work. We also strive to make  our company a safer place to work. In 2014, we implemented  our  8 Life Saving Rules  worldwide, with a continued focus on  process safety.  We also developed a strategy framework to guide  improvements in environmental performance. For the eighth  year in a row, the  Dow Jones Sustainability Index North America recognized us for our sustainability e ff orts. We recognize that  long-term success in our industry demands strong health,  safety, environmental and social performance. We take pride  in our accomplishments, but never stop looking for ways  to improve. In the communities where we operate, we are committed  to being a responsible neighbor and partner. We proactively  engage with stakeholders to understand their expectations  and incorporate these insights into our business plans. We  have refocused our charitable investments primarily on two  signature programs—one focused on global water and  biodiversity stewardship and another that is focused on  mathematics education for middle and high school students.  By almost every measure, 2014 was another successful year  for ConocoPhillips on our journey as an independent E&P  company. We delivered on our commitments and strategic  objectives. We are pleased that the market took notice.  I want to thank our dedicated workforce, our board of directors  and our shareholders for your part in our success.  We responded quickly to the current low price environment  and are well positioned with a large portfolio of low cost of  supply development opportunities, the majority of our major  project spending behind us and a strong balance sheet.  Almost as soon as prices began declining, we made decisive  adjustments to our capital plans. We reduced our 2015 capital  expenditures budget to $11.5 billion, a reduction of more  than 30 percent compared to 2014. Additionally, we had  more than $5 billion of cash and cash equivalents on hand  at year-end 2014, with balance sheet capacity that we are  prepared to utilize.  4 ConocoPhillips  2014 ANNUAL REPORT ConocoPhillips employees use sophisticated analysis, visualization and  technologies to optimize drilling opportunities. An ongoing focus on safety through the 8 Life Saving Rules