UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-Q
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2006March 31, 2007
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to________
Commission File Number 1-2256
EXXON MOBIL CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 13-5409005
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5959 Las Colinas Boulevard, Irving, Texas 75039-2298
(Address of principal executive offices) (Zip Code)
(972) 444-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition of "accelerate"accelerated filer and large accelerated filer" in Rule 12b-2 of the Exchange Act.
Large accelerated filer X Accelerated filer Non-accelerated filer
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class Outstanding as of September 30, 2006March 31, 2007
Common stock, without par value 5,832,488,4455,633,270,055
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2006MARCH 31, 2007
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
Condensed Consolidated Statement of Income
3
Three months ended March 31, 2007 and nine months ended September 30, 2006 and 2005
Condensed Consolidated Balance Sheet
4
As of September 30, 2006March 31, 2007 and December 31, 20052006
Condensed Consolidated Statement of Cash Flows
5
NineThree months ended September 30,March 31, 2007 and 2006 and 2005
Notes to Condensed Consolidated Financial Statements
6-186-15
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
19-2516-19
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
2620
Item 4.
Controls and Procedures
2620
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
2620
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
2721
Item 6.
Exhibits
2721
Signature
2822
Index to Exhibits
2923
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(millions of dollars)
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | |||||||||||||||||||
REVENUES AND OTHER INCOME | ||||||||||||||||||||||||
Sales and other operating revenue(1) (2) | $ | 96,268 | $ | 96,731 | $ | 278,609 | $ | 262,828 | ||||||||||||||||
Sales and other operating revenue(1) | $ | 84,174 | $ | 86,317 | ||||||||||||||||||||
Income from equity affiliates | 1,778 | 3,080 | 5,265 | 5,957 | 1,915 | 1,800 | ||||||||||||||||||
Other income | 1,547 | 906 | 3,733 | 2,551 | 1,134 | 863 | ||||||||||||||||||
Total revenues and other income | 99,593 | 100,717 | 287,607 | 271,336 | 87,223 | 88,980 | ||||||||||||||||||
| ||||||||||||||||||||||||
COSTS AND OTHER DEDUCTIONS | ||||||||||||||||||||||||
Crude oil and product purchases | 49,364 | 52,345 | 140,365 | 136,334 | 40,042 | 42,821 | ||||||||||||||||||
Production and manufacturing expenses | 7,057 | 6,537 | 21,897 | 19,089 | 7,283 | 7,424 | ||||||||||||||||||
Selling, general and administrative expenses | 3,412 | 3,765 | 10,435 | 10,724 | 3,392 | 3,466 | ||||||||||||||||||
Depreciation and depletion | 2,730 | 2,513 | 8,134 | 7,582 | 2,942 | 2,644 | ||||||||||||||||||
Exploration expenses, including dry holes | 352 | 248 | 810 | 635 | 272 | 282 | ||||||||||||||||||
Interest expense | 281 | 73 | 553 | 373 | 103 | 165 | ||||||||||||||||||
Excise taxes(1) | 7,764 | 8,160 | 23,639 | 22,913 | ||||||||||||||||||||
Sales-based taxes(1) | 7,284 | 7,664 | ||||||||||||||||||||||
Other taxes and duties | 10,163 | 10,850 | 29,206 | 31,504 | 9,591 | 8,873 | ||||||||||||||||||
Income applicable to minority and preferred interests | 292 | 174 | 727 | 468 | 250 | 182 | ||||||||||||||||||
Total costs and other deductions | 81,415 | 84,665 | 235,766 | 229,622 | 71,159 | 73,521 | ||||||||||||||||||
| ||||||||||||||||||||||||
INCOME BEFORE INCOME TAXES | 18,178 | 16,052 | 51,841 | 41,714 | 16,064 | 15,459 | ||||||||||||||||||
Income taxes | 7,688 | 6,132 | 22,591 | 16,294 | 6,784 | 7,059 | ||||||||||||||||||
NET INCOME | $ | 10,490 | $ | 9,920 | $ | 29,250 | $ | 25,420 | $ | 9,280 | $ | 8,400 | ||||||||||||
| ||||||||||||||||||||||||
NET INCOME PER COMMON SHARE(dollars) | $ | 1.79 | $ | 1.60 | $ | 4.91 | $ | 4.04 | $ | 1.64 | $ | 1.38 | ||||||||||||
| ||||||||||||||||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||||||||||
- ASSUMING DILUTION(dollars) | $ | 1.77 | $ | 1.58 | $ | 4.86 | $ | 4.00 | $ | 1.62 | $ | 1.37 | ||||||||||||
DIVIDENDS PER COMMON SHARE(dollars) | $ | 0.32 | $ | 0.29 | $ | 0.96 | $ | 0.85 | $ | 0.32 | $ | 0.32 | ||||||||||||
(1) Excise taxes included in sales and other | ||||||||||||||||||||||||
(1) Sales-based taxes included in sales and other | ||||||||||||||||||||||||
operating revenue | $ | 7,764 | $ | 8,160 | $ | 23,639 | $ | 22,913 | $ | 7,284 | $ | 7,664 | ||||||||||||
(2) Amounts included in prior period sales and other operating | ||||||||||||||||||||||||
revenue for purchases/sales contracts with the same | ||||||||||||||||||||||||
counterparty. Associated costs are included in crude oil | ||||||||||||||||||||||||
and product purchases and other taxes and duties. | ||||||||||||||||||||||||
See accounting change note 2 on page 6. | $ | 0 | $ | 8,439 | $ | 0 | $ | 23,106 | ||||||||||||||||
The information in the Notes to Condensed Consolidated Financial Statements | The information in the Notes to Condensed Consolidated Financial Statements | |||||||||||||||||||||||
is an integral part of these statements. | is an integral part of these statements. |
-3-
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars)
Sept. 30, | Dec. 31, | March 31, | Dec. 31, | |||||||||||||
2006 | 2005 | 2007 | 2006 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 32,734 | $ | 28,671 | $ | 29,994 | $ | 28,244 | ||||||||
Cash and cash equivalents - restricted (note 4) | 4,604 | 4,604 | ||||||||||||||
Cash and cash equivalents - restricted (note 3) | 4,604 | 4,604 | ||||||||||||||
Notes and accounts receivable - net | 28,390 | 27,484 | 27,582 | 28,942 | ||||||||||||
Inventories | ||||||||||||||||
Crude oil, products and merchandise | 10,858 | 7,852 | 10,759 | 8,979 | ||||||||||||
Materials and supplies | 1,670 | 1,469 | 1,846 | 1,735 | ||||||||||||
Prepaid taxes and expenses | 3,497 | 3,262 | 3,280 | 3,273 | ||||||||||||
Total current assets | 81,753 | 73,342 | 78,065 | 75,777 | ||||||||||||
Property, plant and equipment - net | 111,722 | 107,010 | 114,201 | 113,687 | ||||||||||||
Investments and other assets | 30,472 | 27,983 | 31,033 | 29,551 | ||||||||||||
TOTAL ASSETS | $ | 223,947 | $ | 208,335 | $ | 223,299 | $ | 219,015 | ||||||||
LIABILITIES | ||||||||||||||||
Current liabilities | ||||||||||||||||
Notes and loans payable | $ | 2,125 | $ | 1,771 | $ | 2,006 | $ | 1,702 | ||||||||
Accounts payable and accrued liabilities | 40,225 | 36,120 | 38,923 | 39,082 | ||||||||||||
Income taxes payable | 12,454 | 8,416 | 9,661 | 8,033 | ||||||||||||
Total current liabilities | 54,804 | 46,307 | 50,590 | 48,817 | ||||||||||||
Long-term debt | 6,464 | 6,220 | 6,758 | 6,645 | ||||||||||||
Deferred income tax liabilities | 21,018 | 20,878 | 21,010 | 20,851 | ||||||||||||
Other long-term liabilities | 25,068 | 23,744 | 30,831 | 28,858 | ||||||||||||
TOTAL LIABILITIES | 107,354 | 97,149 | 109,189 | 105,171 | ||||||||||||
Commitments and contingencies (note 4) | ||||||||||||||||
Commitments and contingencies (note 3) | ||||||||||||||||
SHAREHOLDERS' EQUITY | ||||||||||||||||
Common stock, without par value: | ||||||||||||||||
Authorized: 9,000 million shares | ||||||||||||||||
Issued: 8,019 million shares | 4,665 | 4,477 | 4,530 | 4,786 | ||||||||||||
Earnings reinvested | 186,810 | 163,335 | 202,984 | 195,207 | ||||||||||||
Accumulated other nonowner changes in equity | ||||||||||||||||
Cumulative foreign exchange translation adjustment | 2,912 | 979 | 4,156 | 3,733 | ||||||||||||
Minimum pension liability adjustment | (2,364 | ) | (2,258 | ) | ||||||||||||
Postretirement benefits reserves adjustment | (6,702 | ) | (6,495 | ) | ||||||||||||
Common stock held in treasury: | ||||||||||||||||
2,187 million shares at September 30, 2006 | (75,430 | ) | ||||||||||||||
1,886 million shares at December 31, 2005 | (55,347 | ) | ||||||||||||||
2,386 million shares at March 31, 2007 | (90,858 | ) | ||||||||||||||
2,290 million shares at December 31, 2006 | (83,387 | ) | ||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | 116,593 | 111,186 | 114,110 | 113,844 | ||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 223,947 | $ | 208,335 | $ | 223,299 | $ | 219,015 | ||||||||
The number of shares of common stock issued and outstanding at March 31, 2007 and | The number of shares of common stock issued and outstanding at March 31, 2007 and | |||||||||||||||
December 31, 2006 were 5,633,270,055 and 5,728,702,212, respectively. | December 31, 2006 were 5,633,270,055 and 5,728,702,212, respectively. | |||||||||||||||
The information in the Notes to Condensed Consolidated Financial Statements | The information in the Notes to Condensed Consolidated Financial Statements | |||||||||||||||
is an integral part of these statements. | is an integral part of these statements. |
The number of shares of common stock issued and outstanding at September 30, 2006 and
December 31, 2005 were 5,832,488,445 and 6,132,998,174, respectively.
-4-
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Nine Months Ended | Three Months Ended | ||||||||||||||||
September 30, | March 31, | ||||||||||||||||
2006 | 2005 | 2007 | 2006 | ||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||||||||||
Net income | $ | 29,250 | $ | 25,420 | $ | 9,280 | $ | 8,400 | |||||||||
Depreciation and depletion | 8,134 | 7,582 | 2,942 | 2,644 | |||||||||||||
Changes in operational working capital, excluding cash and debt | 3,836 | 6,226 | 1,843 | 3,257 | |||||||||||||
All other items - net | (796 | ) | (1,480 | ) | 221 | 330 | |||||||||||
Net cash provided by operating activities | 40,424 | 37,748 | 14,286 | 14,631 | |||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||||||||||
Additions to property, plant and equipment | (11,301 | ) | (9,940 | ) | (3,106 | ) | (3,730 | ) | |||||||||
Sales of subsidiaries, investments, and property, plant and equipment | 2,328 | 4,580 | 538 | 394 | |||||||||||||
Other investing activities - net | (1,791 | ) | (2,019 | ) | (670 | ) | (167 | ) | |||||||||
Net cash used in investing activities | (10,764 | ) | (7,379 | ) | (3,238 | ) | (3,503 | ) | |||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||||||||||
Additions to long-term debt | 123 | 61 | 93 | 13 | |||||||||||||
Reductions in long-term debt | (31 | ) | (83 | ) | (36 | ) | (7 | ) | |||||||||
Additions/(reductions) in short-term debt - net | 245 | (993 | ) | 274 | (61 | ) | |||||||||||
Cash dividends to ExxonMobil shareholders | (5,775 | ) | (5,390 | ) | (1,825 | ) | (1,957 | ) | |||||||||
Cash dividends to minority interests | (207 | ) | (229 | ) | (74 | ) | (81 | ) | |||||||||
Changes in minority interests and sales/(purchases) | |||||||||||||||||
of affiliate stock | (380 | ) | (351 | ) | (149 | ) | (145 | ) | |||||||||
Taxes from employee stock-based awards | 270 | 0 | |||||||||||||||
Net ExxonMobil shares acquired | (20,379 | ) | (11,985 | ) | (7,788 | ) | (5,764 | ) | |||||||||
Net cash used in financing activities | (26,134 | ) | (18,970 | ) | (9,505 | ) | (8,002 | ) | |||||||||
Effects of exchange rate changes on cash | 537 | (690 | ) | 207 | 148 | ||||||||||||
Increase/(decrease) in cash and cash equivalents | 4,063 | 10,709 | 1,750 | 3,274 | |||||||||||||
Cash and cash equivalents at beginning of period | 28,671 | 18,531 | 28,244 | 28,671 | |||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 32,734 | $ | 29,240 | $ | 29,994 | $ | 31,945 | |||||||||
SUPPLEMENTAL DISCLOSURES | |||||||||||||||||
Income taxes paid | $ | 18,637 | $ | 15,104 | $ | 3,998 | $ | 4,088 | |||||||||
Cash interest paid | $ | 1,099 | $ | 361 | $ | 137 | $ | 108 | |||||||||
The information in the Notes to Condensed Consolidated Financial Statements | The information in the Notes to Condensed Consolidated Financial Statements | ||||||||||||||||
is an integral part of these statements. | is an integral part of these statements. |
-5-
EXXON MOBIL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1.
Basis of Financial Statement Preparation
These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 20052006 Annual Report on Form 10-K. In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. The Corporation's exploration and production activities are accounted for under the "successful efforts" method. A reclassification on the first quarter 2006 income statement was made in the second quarter 2006 of $1.3 billion from "Other taxes and duties" to "Crude oil and product purchases" related to the prior period balance sheet to combine the amounts for "Benefit plan related balances" and "Common stock" per the adoptionreporting of FAS 123R has been made to conform to the current presentation.
2.
Accounting Change for Purchases/Sales Contracts
Effective January 1, 2006, the Corporation adopted the Emerging Issues Task Force (EITF) consensus on Issue No. 04-13, “Accounting for Purchases and Sales of Inventory with the Same Counterparty.” The EITF concluded that purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another should be combined and recorded as exchanges measured at the book value of the item sold. In prior periods, the Corporation recorded certain crude oil, natural gas, petroleum product and chemical sales and purchases contemporaneously negotiated with the same counterparty as revenues and purchases. As a result of the EITF consensus, the Corporation’s accounts “Sales and other operating revenue”, “Crude oil and product purchases” and "Other taxes and duties" on the income statement were reduced by associated amounts with no imp act on net income. All operating segments are affected by this change, with the largest impact in the Downstream.counterparty.
3.2.
Accounting Change for Share-based PaymentsUncertainty in Income Taxes
Effective January 1, 2006,2007, the Corporation adopted the Financial Accounting Standards Board's revisedBoard’s (FASB) Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes". FIN 48 is an interpretation of FASB Statement of Financial Accounting Standards No. 123 (FAS 123R)109, "Accounting for Income Taxes", “Share-based Payment.” FAS 123R requires compensation costs related to share-based payments to be recognizedand prescribes a comprehensive model for recognizing, measuring, presenting and disclosing in the income statement over the requisite service period. The amount of the compensation cost is to be measured based on the grant-date fair value of the instrument issued. FAS 123R is effective for awards granted or modified after the date of adoption and for awards granted prior tofinancial statements uncertain tax positions that date that have not vested. In 2003, the Corporation adoptedhas taken or expects to take in its income tax returns. Upon the adoption of FIN 48, the Corporation recognized a policytransition gain of expensing all share-based payments that is consistent with$267 million in shareholders’ equity. The gain reflected the provisionsrecognition of FAS 123R, and all prior years' outstanding stock option awards have vested. FAS 123R does not materially change the Corporation’s existing accounting practices or the amount of share-based compensati on recognized in earnings.several refund claims, partly offset by increased liability reserves.
The cumulative compensation expense associatedCorporation is subject to income taxation in many jurisdictions around the world. The total amount of unrecognized income tax benefits in these jurisdictions at January 1, 2007, was $3.7 billion, almost all of which is classified as long term. Resolution of the related tax positions through negotiations with share-based payments made in 2005, 2004 and 2003 has been recognizedthe relevant tax authorities or through litigation will take many years to complete. Accordingly, it is difficult to predict the timing of resolution for individual tax positions. However, the Corporation does not anticipate that the total amount of unrecognized tax benefits will significantly increase or decrease in the income statement usingnext 12 months. Given the “nominal vesting period approach.” The full costlong time periods involved in resolving individual tax positions, the Corporation does not expect that the recognition of awards given to employees whounrecognized tax benefits will have retired before the end of the vesting period has been expensed. The use of a “non-substantive vesting period approach” basedmaterial impact on the retirement eligibility age is not significantly different fromCorporation’s effective income tax rate in any given year.
The following table summarizes the nominal vesting period approach. The non-substantive vesting period approach is applicabletax years that remain subject to grants made after the adoption of FAS 123R.examination by major tax jurisdiction:
Country of Operation | Open Tax Years | ||
Abu Dhabi | 2000-2006 | ||
Angola | 2002-2006 | ||
Australia | 2000-2006 | ||
Canada | 1990-2006 | ||
Equatorial Guinea | 1996-2006 | ||
Germany | 1998-2006 | ||
Japan | 2002-2006 | ||
Malaysia | 1983-2006 | ||
Nigeria | 1998-2006 | ||
Norway | 1993-2006 | ||
United Kingdom | 2002-2006 | ||
United States | 1989-2006 |
The Corporation classifies interest on income tax related balances as interest expense or interest income and classifies tax related penalties as operating expense.
At January 1, 2007, the Corporation had accrued interest payable of $0.5 billion related to income tax reserve balances.
-6-
Incentive Program
The 2003 Incentive Program provides for grants of stock options, stock appreciation rights (SARs), restricted stock and other forms of award. Awards may be granted to eligible employees of the Corporation and those affiliates at least 50 percent owned. The maximum number of shares of stock that may be issued under the 2003 Incentive Program is 220 million. Awards that are forfeited or expire, or are settled in cash, do not count against this maximum limit. The 2003 Incentive Program does not have a specified term. New awards may be made until the available shares are depleted, unless the Board terminates the plan early. Outstanding awards are subject to certain forfeiture provisions contained in the program or award instrument.
As under earlier programs, options and SARs may be granted at prices not less than 100 percent of market value on the date of grant and have a maximum life of 10 years. Most of the options and SARs normally first become exercisable one year following the date of grant. All remaining stock options and SARs outstanding were granted prior to 2002.
Restricted stock awards have been granted in the fourth quarter and the restricted shares were issued in the following first quarter. These shares are issued to employees from treasury stock. The units that are settled in cash are recorded as liabilities and their changes in fair value are recognized over the vesting period. During the applicable restricted periods, the shares may not be sold or transferred and are subject to forfeiture. The majority of the awards have graded vesting periods, with 50 percent of the shares in each award vesting after three years and the remaining 50 percent vesting after seven years. A small number of awards granted to certain senior executives have vesting periods of five years for 50 percent of the award and of ten years or retirement, which ever occurs later, for the remaining 50 percent of the award.
The Corporation has purchased shares in the open market and through negotiated transactions to offset shares issued in conjunction with benefit plans and programs. Purchases may be discontinued at any time without prior notice.
In 2002, the Corporation began issuing restricted stock as share-based compensation in lieu of stock options. Compensation expense for these awards is based on the price of the stock at the date of grant and has been recognized in income over the requisite service period, which is the same method of accounting as under FAS 123R. Prior to 2002, the Corporation issued stock options as share-based compensation, and since these awards vested prior to the effective date of FAS 123R, they continue to be accounted for by the method prescribed in APB 25, "Accounting for Stock Issued to Employees." Under this method, compensation expense for awards granted in the form of stock options is measured at the intrinsic value of the options (the difference between the market price of the stock and the exercise price of the options) on the date of grant. Since these two prices are the same on the date of grant, no compensation expense has been recognized in income for these awards.
-7-
Restricted stock and restricted units
The following table summarizes information about restricted stock and restricted stock units, including those shares from former Mobil plans, for the nine months ended September 30, 2006.
Weighted | |||||||||||||
Average | |||||||||||||
Grant-Date | |||||||||||||
Fair Value | |||||||||||||
Restricted stock/units: | Shares | per Share | |||||||||||
(thousands) | |||||||||||||
Issued and outstanding at December 31, 2005 | 29,530 | $41.52 | |||||||||||
2005 award issued in 2006 | 11,064 | $58.43 | |||||||||||
Vested | (56 | ) | $44.17 | ||||||||||
Forfeited | (158 | ) | $46.33 | ||||||||||
Issued and outstanding at September 30, 2006 | 40,380 | $46.13 |
As of September 30, 2006, there was $952 million of unrecognized compensation cost related to the nonvested restricted awards. This cost is expected to be recognized over a weighted-average period of 4.3 years. The compensation cost charged against income for the restricted stock and restricted units was $112 million and $80 million for the three months ended September 30, 2006, and 2005, respectively. The income tax benefit recognized in income related to this compensation expense was $15 million and $14 million for the same periods, respectively. The compensation cost charged against income for the restricted stock and restricted units was $407 million and $311 million for the nine months ended September 30, 2006, and 2005, respectively. The income tax benefit recognized in income related to this compensation expense was $56 million in each of the respective periods.
Stock options
The following table summarizes information about stock options, including those shares from former Mobil plans, for the nine months ended September 30, 2006.
Weighted | ||||||||||||||||||
Average | Average | |||||||||||||||||
Exercise | Remaining | |||||||||||||||||
Price | Contractual | |||||||||||||||||
Stock options: | Shares | per Share | Term | |||||||||||||||
(thousands) | ||||||||||||||||||
Outstanding at December 31, 2005 | 147,774 | $37.11 | ||||||||||||||||
Exercised | (26,807 | ) | $31.09 | |||||||||||||||
Forfeited | (242 | ) | $39.43 | |||||||||||||||
Outstanding at September 30, 2006 | 120,725 | $38.44 | 3.5 | years | ||||||||||||||
Exercisable at September 30, 2006 | 120,725 | $38.44 | 3.5 | years |
No compensation expense was recognized for stock options in the nine months ended September 30, 2006, and 2005, as all remaining outstanding stock options were granted prior to 2002 and are fully vested. No income tax benefit was recognized in income during the quarter related to stock options. Cash received from stock option exercises for the nine months ended September 30, 2006, was $829 million. The cash tax benefit realized for the options exercised in the nine months ended September 30, 2006, was $270 million. The aggregate intrinsic value of stock options exercised in the nine months ended September 30, 2006, was $879 million and for the balance of outstanding stock options was $3,460 million.
-8-
4.3.
Litigation and Other Contingencies
Litigation
A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits and tax disputes. Management has regular litigation and tax reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably p ossible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a materially adverse effect upon the Corporation’s operations or financial condition.
A number of lawsuits, including class actions, were brought in various courts against Exxon Mobil Corporation and certain of its subsidiaries relating to the accidental release of crude oil from the tanker Exxon Valdez in 1989. The vast majority ofAll the compensatory claims have been resolved and paid. All of the punitive damage claims were consolidated in the civil trial that began in 1994. The first judgment from the United States District Court for the District of Alaska in the amount of $5 billion was vacated by the United States Court of Appeals for the Ninth Circuit as being excessive under the Constitution. The second judgment in the amount of $4 billion was vacated by the Ninth Circuit panel without argument and sent back for the District Court to reconsider in light of the recent U.S. Supreme Court decision inCampbell v. State Farm.Farm. The most recent District Court judgment for punitive damages was for $4 .5$4.5 billion plus interest and was entered in JanuaryJanua ry 2004. ExxonMobil and the plaintiffs have appealed this decision to the Ninth Circuit. The Corporation has posted a $5.4 billion letter of credit. Oral arguments were held beforeExxonMobil and the plaintiffs appealed this decision to the Ninth Circuit, which ruled on January 27, 2006. Management believesDecember 22, 2006, that the likelihoodaward be reduced to $2.5 billion. On January 12, 2007, ExxonMobil petitioned the Ninth Circuit Court of the judgment being upheld is remote.Appeals for a rehearing en banc of its appeal. While it is reasonably possible that a liability for punitive damages may have been incurred from the Exxon Valdez grounding, it is not possible to predict the ultimate outcome or to reasonably estimate any such potential liability.
In December 2000, a jury in the 15th Judicial Circuit Court of Montgomery County, Alabama, returned a verdict against the Corporation in a dispute over royalties in the amount of $88 million in compensatory damages and $3.4 billion in punitive damages in the case ofExxon Corporation v. State of Alabama, et al.al. The verdict was upheld by the trial court in May 2001. In December 2002, the Alabama Supreme Court vacated the $3.5 billion jury verdict. The case was retried and in November 2003, a state district court jury in Montgomery, Alabama, returned a verdict against Exxon Mobil Corporation. The verdict included $63.5 million in compensatory damages and $11.8 billion in punitive damages. In March 2004, the district court judge reduced the amount of punitive damages to $3.5 billion. ExxonMobil believes the judgment is not justified by the evidence, that any punitive damage award is not justified by either the facts or the law, and that the amountamou nt of the award is grossly excessive and unconstitutional. ExxonMobil has appealed the decision to the Alabama Supreme Court. The Alabama Supreme Court heard oral arguments on February 6, 2007. Management believes that the likelihood of the judgment being upheld is remote. While it is reasonably possible that a liability may have been incurred by ExxonMobil from this dispute over royalties, it is not possible to predict the ultimate outcome or to reasonably estimate any such potential liability. In May 2004, the Corporation posted a $4.5 billion supersedeas bond as required by Alabama law to stay execution of the judgment pending appeal. The Corporation has pledged to the issuer of the bond collateral consisting of cash and short-term, high-quality securities with an aggregate value of approximately $4.6 billion. This collateral is reported as restricted cash and cash equivalents on the Consolidated Balance Sheet. Under the terms of the pledge agreement, the Corporation is entitled to receive the income generated from the cash and securities and to make investment decisions, but is restricted from using the pledged cash and securities for any other purpose until such time the bond is canceled.
-9-
-7-
In 2001, a Louisiana state court jury awarded compensatory damages of $56 million and punitive damages of $1 billion to a landowner for damage caused by a third party that leased the property from the landowner. The third party provided pipe cleaning and storage services for the Corporation and other entities. The Louisiana Fourth Circuit Court of Appeals reduced the punitive damage award to $112 million in 2005. The Corporation appealed this decision to the Louisiana Supreme Court which, in March 2006, refused to hear the appeal. ExxonMobil has fully accrued and paid the compensatory and punitive damage awards. The Corporation has appealed the punitive damage award to the U.S. Supreme Court.
In Allapattah v. Exxon, a jury inCourt, which on February 26, 2007, vacated the United States District Court forjudgment and remanded the Southern District of Florida determined in 2001 that a class of Exxon dealers between March 1983 and August 1994 had been overcharged for gasoline. In June 2003,case to the EleventhLouisiana Fourth Circuit Court of Appeals affirmedfor reconsideration in light of the judgment and in March 2004, denied a petition for Rehearing En Banc. In October 2004, therecent U.S. Supreme Court granted review as to whether the classdecision in the District Court judgment should include members that individually do not satisfy the $50,000 minimum amount-in-controversy requirement in federal court. In light of the Supreme Court’s decision to grant review of only part of ExxonMobil’s appeal, the Corporation took an after-tax charge of $550 million in the third quarter of 2004 reflecting the estimated liability, after considering potential set-offs and defenses for the claims under review by the Supreme Court. In June 2005, the Supreme Court granted the District Court the right to hear the claims of all class members and the Corporation took an after-tax charge of $200 million. The District Court has given final approval of a settlement of $1,075 million, pre-tax. This obligation has been fully accrued and was paid in the second quarter 2006.Williams v. Phillip Morris USA.
Tax issues for 1989 to 1993 remain pending before the U.S. Tax Court. The ultimate resolution of these issues is not expected to have a materially adverse effect upon the Corporation’s operations or financial condition.
Other Contingencies
As of September 30, 2006 | ||||||||||||
Equity | Other | |||||||||||
Company | Third Party | |||||||||||
Obligations | Obligations | Total | ||||||||||
(millions of dollars) | ||||||||||||
Total guarantees | $ | 3,411 | $ | 418 | $ | 3,829 |
As of March 31, 2007 | ||||||||||||
Equity | Other | |||||||||||
Company | Third Party | |||||||||||
Obligations | Obligations | Total | ||||||||||
(millions of dollars) | ||||||||||||
Total guarantees | $ | 4,354 | $ | 756 | $ | 5,110 |
The Corporation and certain of its consolidated subsidiaries were contingently liable at
September 30, 2006, March 31, 2007, for $3,829$5,110 million, primarily relating to ExxonMobil's guarantees of obligations of equity companies for notes, loans and other liabilities.performance under contracts. Included in this amount were guarantees by consolidated affiliates of $4,354 million, representing ExxonMobil’s share of obligations of certain equity companies. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. The Corporation's outstanding unconditional purchase obligations at September 30, 2006,March 31, 2007, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.
The operations and earnings of the Corporation and its affiliates throughout the world have been, and may in the future be, affected from time to time in varying degree by political developments and laws and regulations, such as forced divestiture of assets; restrictions on production, imports and exports; price controls; tax increases and retroactive tax claims; expropriation of property; cancellation of contract rights and environmental regulations. Both the likelihood of such occurrences and their overall effect upon the Corporation vary greatly from country to country and are not predictable.
In accordance with a nationalization decree issued by Venezuela's President Chavez in February, the Venezuelan National Oil Company (PdVSA) on May 1, 2007 assumed the operatorship of the Cerro Negro heavy oil development, which had been operated by an ExxonMobil affiliate that holds a 41.67 percent ownership interest in the project. The decree also requires conversion of the Cerro Negro project into a "mixed enterprise" structure and an increase in PdVSA's ownership interest in the project. Discussions with Venezuelan authorities are continuing over proposed changes to the joint venture relating to the nationalization decree. The Corporation does not expect the resolution of these issues to have a material effect upon the Corporation’s operations or financial condition.
-10-
-8-
5.4.
Nonowner Changes in Shareholders' Equity
Three Months Ended | Nine Months Ended | Three Months Ended | |||||||||||||||||||||||||||||||
September 30, | September 30, | March 31, | |||||||||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | ||||||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | ||||||||||||||||||||||||||||||||
Net income | $ | 10,490 | $ | 9,920 | $ | 29,250 | $ | 25,420 | $ | 9,280 | $ | 8,400 | |||||||||||||||||||||
Changes in other nonowner changes in equity | |||||||||||||||||||||||||||||||||
(net of income taxes) | |||||||||||||||||||||||||||||||||
Foreign exchange translation adjustment | 43 | 203 | 1,933 | (2,147 | ) | 423 | 414 | ||||||||||||||||||||||||||
Postretirement benefits reserve adjustment | |||||||||||||||||||||||||||||||||
(excluding amortization) | (408 | ) | 0 | ||||||||||||||||||||||||||||||
Amortization of postretirement benefits reserve | |||||||||||||||||||||||||||||||||
adjustment included in net periodic benefit costs | 201 | 0 | |||||||||||||||||||||||||||||||
Minimum pension liability adjustment | (8 | ) | 152 | (106 | ) | 152 | |||||||||||||||||||||||||||
Reclassification adjustment for gain on sale of | |||||||||||||||||||||||||||||||||
stock investment included in net income | 0 | 0 | 0 | (428 | ) | ||||||||||||||||||||||||||||
(before December 31, 2006, adoption of FAS 158) | 0 | (17 | ) | ||||||||||||||||||||||||||||||
Total nonowner changes in shareholders' equity | $ | 10,525 | $ | 10,275 | $ | 31,077 | $ | 22,997 | $ | 9,496 | $ | 8,797 |
6.5.
Earnings Per Share
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | |||||||||||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||||||||||
Net income (millions of dollars) | $ | 10,490 | $ | 9,920 | $ | 29,250 | $ | 25,420 | $ | 9,280 | $ | 8,400 | ||||||||||||
| ||||||||||||||||||||||||
Weighted average number of common shares | ||||||||||||||||||||||||
outstanding (millions of shares) | 5,861 | 6,241 | 5,967 | 6,304 | 5,650 | 6,068 | ||||||||||||||||||
Net income per common share (dollars) | $ | 1.79 | $ | 1.60 | $ | 4.91 | $ | 4.04 | $ | 1.64 | $ | 1.38 | ||||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||||||||||
- ASSUMING DILUTION | ||||||||||||||||||||||||
Net income (millions of dollars) | $ | 10,490 | $ | 9,920 | $ | 29,250 | $ | 25,420 | $ | 9,280 | $ | 8,400 | ||||||||||||
Weighted average number of common shares | ||||||||||||||||||||||||
outstanding (millions of shares) | 5,861 | 6,241 | 5,967 | 6,304 | 5,650 | 6,068 | ||||||||||||||||||
Effect of employee stock-based awards | 61 | 62 | 55 | 57 | 64 | 58 | ||||||||||||||||||
Weighted average number of common shares | ||||||||||||||||||||||||
outstanding - assuming dilution | 5,922 | 6,303 | 6,022 | 6,361 | 5,714 | 6,126 | ||||||||||||||||||
Net income per common share | ||||||||||||||||||||||||
- assuming dilution (dollars) | $ | 1.77 | $ | 1.58 | $ | 4.86 | $ | 4.00 | $ | 1.62 | $ | 1.37 |
-11--9-
7.6.
Annuity BenefitsPension and Other Postretirement Benefits
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | |||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||
Annuity Benefits - U.S. | ||||||||||||||||||||||||
Pension Benefits - U.S. | ||||||||||||||||||||||||
Components of net benefit cost | ||||||||||||||||||||||||
Service cost | $ | 85 | $ | 81 | $ | 253 | $ | 254 | $ | 97 | $ | 85 | ||||||||||||
Interest cost | 159 | 150 | 476 | 469 | 172 | 159 | ||||||||||||||||||
Expected return on plan assets | (157 | ) | (154 | ) | (469 | ) | (484 | ) | (210 | ) | (157 | ) | ||||||||||||
Amortization of actuarial loss/(gain) | ||||||||||||||||||||||||
and prior service cost | 69 | 67 | 205 | 209 | 67 | 69 | ||||||||||||||||||
Net pension enhancement and | ||||||||||||||||||||||||
curtailment/settlement expense | 39 | 30 | 118 | 94 | ||||||||||||||||||||
curtailment/settlement cost | 47 | 39 | ||||||||||||||||||||||
Net benefit cost | $ | 195 | $ | 174 | $ | 583 | $ | 542 | $ | 173 | $ | 195 | ||||||||||||
Annuity Benefits - Non-U.S. | ||||||||||||||||||||||||
Pension Benefits - Non-U.S. | ||||||||||||||||||||||||
Components of net benefit cost | ||||||||||||||||||||||||
Service cost | $ | 109 | $ | 89 | $ | 319 | $ | 284 | $ | 109 | $ | 103 | ||||||||||||
Interest cost | 225 | 193 | 661 | 619 | 237 | 215 | ||||||||||||||||||
Expected return on plan assets | (247 | ) | (175 | ) | (729 | ) | (589 | ) | (263 | ) | (237 | ) | ||||||||||||
Amortization of actuarial loss/(gain) | ||||||||||||||||||||||||
and prior service cost | 131 | 101 | 384 | 314 | 112 | 126 | ||||||||||||||||||
Net pension enhancement and | ||||||||||||||||||||||||
curtailment/settlement expense | 10 | 1 | 12 | 2 | ||||||||||||||||||||
curtailment/settlement cost | 0 | 1 | ||||||||||||||||||||||
Net benefit cost | $ | 228 | $ | 209 | $ | 647 | $ | 630 | $ | 195 | $ | 208 | ||||||||||||
Other Postretirement Benefits | ||||||||||||||||||||||||
Components of net benefit cost | ||||||||||||||||||||||||
Service cost | $ | 19 | $ | 18 | $ | 56 | $ | 52 | $ | 27 | $ | 18 | ||||||||||||
Interest cost | 79 | 77 | 231 | 227 | 112 | 77 | ||||||||||||||||||
Expected return on plan assets | (10 | ) | (10 | ) | (30 | ) | (29 | ) | (15 | ) | (10 | ) | ||||||||||||
Amortization of actuarial loss/(gain) | ||||||||||||||||||||||||
and prior service cost | 57 | 51 | 163 | 151 | 78 | 53 | ||||||||||||||||||
Net benefit cost | $ | 145 | $ | 136 | $ | 420 | $ | 401 | $ | 202 | $ | 138 |
-12--10-
8.7.
Disclosures about Segments and Related Information
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | |||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||
EARNINGS AFTER INCOME TAX | ||||||||||||||||||||||||
Upstream | ||||||||||||||||||||||||
United States | $ | 1,192 | $ | 1,671 | $ | 4,116 | $ | 4,413 | $ | 1,177 | $ | 1,280 | ||||||||||||
Non-U.S. | 5,301 | 5,678 | 15,894 | 12,898 | 4,864 | 5,103 | ||||||||||||||||||
Downstream | ||||||||||||||||||||||||
United States | 1,272 | 1,109 | 3,305 | 2,753 | 839 | 679 | ||||||||||||||||||
Non-U.S. | 1,466 | 1,019 | 3,189 | 2,849 | 1,073 | 592 | ||||||||||||||||||
Chemical | ||||||||||||||||||||||||
United States | 458 | 70 | 976 | 905 | 346 | 329 | ||||||||||||||||||
Non-U.S. | 893 | 402 | 2,164 | 1,813 | 890 | 620 | ||||||||||||||||||
All other | (92 | ) | (29 | ) | (394 | ) | (211 | ) | 91 | (203 | ) | |||||||||||||
Corporate total | $ | 10,490 | $ | 9,920 | $ | 29,250 | $ | 25,420 | $ | 9,280 | $ | 8,400 | ||||||||||||
SALES AND OTHER OPERATING REVENUE(1) (2) | ||||||||||||||||||||||||
SALES AND OTHER OPERATING REVENUE(1) | SALES AND OTHER OPERATING REVENUE(1) | |||||||||||||||||||||||
Upstream | ||||||||||||||||||||||||
United States | $ | 1,514 | $ | 1,470 | $ | 4,691 | $ | 4,713 | $ | 1,362 | $ | 1,777 | ||||||||||||
Non-U.S. | 6,059 | 6,585 | 21,860 | 17,066 | 5,493 | 7,539 | ||||||||||||||||||
Downstream | ||||||||||||||||||||||||
United States | 25,068 | 26,026 | 71,852 | 67,768 | 21,260 | 21,128 | ||||||||||||||||||
Non-U.S. | 54,602 | 54,966 | 154,583 | 149,910 | 47,641 | 47,704 | ||||||||||||||||||
Chemical | ||||||||||||||||||||||||
United States | 3,565 | 2,853 | 10,050 | 8,946 | 3,189 | 3,225 | ||||||||||||||||||
Non-U.S. | 5,454 | 4,814 | 15,559 | 14,402 | 5,224 | 4,940 | ||||||||||||||||||
All other | 6 | 17 | 14 | 23 | 5 | 4 | ||||||||||||||||||
Corporate total | $ | 96,268 | $ | 96,731 | $ | 278,609 | $ | 262,828 | $ | 84,174 | $ | 86,317 | ||||||||||||
(1) Includes excise taxes | ||||||||||||||||||||||||
(2) Prior year period includes amounts in sales and | ||||||||||||||||||||||||
other operating revenue for purchases/sales | ||||||||||||||||||||||||
contracts with the same counterparty. See | ||||||||||||||||||||||||
accounting change note 2 on page 6. | ||||||||||||||||||||||||
(1) Includes sales-based taxes | ||||||||||||||||||||||||
INTERSEGMENT REVENUE | ||||||||||||||||||||||||
Upstream | ||||||||||||||||||||||||
United States | $ | 1,675 | $ | 1,922 | $ | 5,614 | $ | 5,396 | $ | 1,563 | $ | 1,854 | ||||||||||||
Non-U.S. | 11,588 | 8,782 | 30,812 | 21,832 | 10,595 | 8,874 | ||||||||||||||||||
Downstream | ||||||||||||||||||||||||
United States | 3,619 | 2,732 | 9,695 | 7,230 | 2,782 | 2,782 | ||||||||||||||||||
Non-U.S. | 12,955 | 12,067 | 36,287 | 30,578 | 10,941 | 10,983 | ||||||||||||||||||
Chemical | ||||||||||||||||||||||||
United States | 2,067 | 1,920 | 5,990 | 4,997 | 1,697 | 1,823 | ||||||||||||||||||
Non-U.S. | 1,874 | 1,680 | 5,272 | 4,372 | 1,522 | 1,582 | ||||||||||||||||||
All other | 65 | 81 | 197 | 225 | 79 | 68 |
-13--11-
9.8.
Condensed Consolidating Financial Information Related to Guaranteed Securities Issued by Subsidiaries
Exxon Mobil Corporation has fully and unconditionally guaranteed the 6.125% notes due 2008 ($160 million of long-term debt at September 30, 2006) of Exxon Capital Corporation and the deferred interest debentures due 2012 ($1,5111,595 million long-term)long-term at March 31, 2007) and the debt securities due 2006-20112007-2011 ($6552 million long-term and $10$13 million short-term) of SeaRiver Maritime Financial Holdings, Inc. Exxon Capital Corporation and SeaRiver Maritime Financial Holdings, Inc. are, a 100 percent owned subsidiariessubsidiary of Exxon Mobil Corporation.
The following condensed consolidating financial information is provided for Exxon Mobil Corporation, as guarantor, and for Exxon Capital Corporation and SeaRiver Maritime Financial Holdings, Inc., as issuers,issuer, as an alternative to providing separate financial statements for the issuers.issuer. The accounts of Exxon Mobil Corporation, Exxon Capital Corporation and SeaRiver Maritime Financial Holdings, Inc. are presented utilizing the equity method of accounting for investments in subsidiaries.
SeaRiver | SeaRiver | |||||||||||||||||||||||||||||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | Exxon Mobil | Maritime | Consolidating | |||||||||||||||||||||||||||||||||||||||||||
Corporation | Exxon | Financial | and | Corporation | Financial | and | ||||||||||||||||||||||||||||||||||||||||||
Parent | Capital | Holdings | All Other | Eliminating | Parent | Holdings | All Other | Eliminating | ||||||||||||||||||||||||||||||||||||||||
Guarantor | Corporation | Inc. | Subsidiaries | Adjustments | Consolidated | Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||||||||||||||||||||||||||
Condensed consolidated statement of income for three months ended September 30, 2006 | ||||||||||||||||||||||||||||||||||||||||||||||||
Condensed consolidated statement of income for three months ended March 31, 2007 | Condensed consolidated statement of income for three months ended March 31, 2007 | |||||||||||||||||||||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||||||||||||||||||||||
Sales and other operating revenue, including excise taxes | $ | 4,286 | $ | - | $ | - | $ | 91,982 | $ | - | $ | 96,268 | ||||||||||||||||||||||||||||||||||||
Sales and other operating revenue, | ||||||||||||||||||||||||||||||||||||||||||||||||
including sales-based taxes | $ | 3,857 | $ | - | $ | 80,317 | $ | - | $ | 84,174 | ||||||||||||||||||||||||||||||||||||||
Income from equity affiliates | 10,302 | - | (5 | ) | 1,774 | (10,293 | ) | 1,778 | 9,167 | 7 | 1,904 | (9,163 | ) | 1,915 | ||||||||||||||||||||||||||||||||||
Other income | 314 | - | - | 1,233 | - | 1,547 | 222 | - | 912 | - | 1,134 | |||||||||||||||||||||||||||||||||||||
Intercompany revenue | 10,558 | 19 | 26 | 89,082 | (99,685 | ) | - | 8,281 | 26 | 77,889 | (86,196 | ) | - | |||||||||||||||||||||||||||||||||||
Total revenues and other income | 25,460 | 19 | 21 | 184,071 | (109,978 | ) | 99,593 | 21,527 | 33 | 161,022 | (95,359 | ) | 87,223 | |||||||||||||||||||||||||||||||||||
Costs and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||
Crude oil and product purchases | 10,187 | - | - | 132,976 | (93,799 | ) | 49,364 | 7,880 | - | 112,246 | (80,084 | ) | 40,042 | |||||||||||||||||||||||||||||||||||
Production and manufacturing expenses | 1,799 | 1 | - | 6,463 | (1,206 | ) | 7,057 | |||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 584 | - | - | 2,987 | (159 | ) | 3,412 | |||||||||||||||||||||||||||||||||||||||||
Production and manufacturing | ||||||||||||||||||||||||||||||||||||||||||||||||
expenses | 1,714 | - | 6,792 | (1,223 | ) | 7,283 | ||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||||||||||||||||||||||
expenses | 591 | - | 2,986 | (185 | ) | 3,392 | ||||||||||||||||||||||||||||||||||||||||||
Depreciation and depletion | 374 | 1 | - | 2,355 | - | 2,730 | 388 | - | 2,554 | - | 2,942 | |||||||||||||||||||||||||||||||||||||
Exploration expenses, including dry holes | 60 | - | - | 292 | - | 352 | ||||||||||||||||||||||||||||||||||||||||||
Exploration expenses, including dry | ||||||||||||||||||||||||||||||||||||||||||||||||
holes | 100 | - | 172 | - | 272 | |||||||||||||||||||||||||||||||||||||||||||
Interest expense | 1,327 | 5 | 46 | 3,434 | (4,531 | ) | 281 | 1,446 | 50 | 3,488 | (4,881 | ) | 103 | |||||||||||||||||||||||||||||||||||
Excise taxes | - | - | - | 7,764 | - | 7,764 | ||||||||||||||||||||||||||||||||||||||||||
Sales-based taxes | - | - | 7,284 | - | 7,284 | |||||||||||||||||||||||||||||||||||||||||||
Other taxes and duties | 10 | - | - | 10,153 | - | 10,163 | 13 | - | 9,578 | - | 9,591 | |||||||||||||||||||||||||||||||||||||
Income applicable to minority and preferred interests | - | - | - | 292 | - | 292 | ||||||||||||||||||||||||||||||||||||||||||
Income applicable to minority and | ||||||||||||||||||||||||||||||||||||||||||||||||
preferred interests | - | - | 250 | - | 250 | |||||||||||||||||||||||||||||||||||||||||||
Total costs and other deductions | 14,341 | 7 | 46 | 166,716 | (99,695 | ) | 81,415 | 12,132 | 50 | 145,350 | (86,373 | ) | 71,159 | |||||||||||||||||||||||||||||||||||
Income before income taxes | 11,119 | 12 | (25 | ) | 17,355 | (10,283 | ) | 18,178 | 9,395 | (17 | ) | 15,672 | (8,986 | ) | 16,064 | |||||||||||||||||||||||||||||||||
Income taxes | 629 | 5 | (7 | ) | 7,061 | - | 7,688 | 115 | (8 | ) | 6,677 | - | 6,784 | |||||||||||||||||||||||||||||||||||
Net income | $ | 10,490 | $ | 7 | $ | (18 | ) | $ | 10,294 | $ | (10,283 | ) | $ | 10,490 | $ | 9,280 | $ | (9 | ) | $ | 8,995 | $ | (8,986 | ) | $ | 9,280 |
-14-
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Exxon | Financial | and | |||||||||||||||||
Parent | Capital | Holdings | All Other | Eliminating | ||||||||||||||||
Guarantor | Corporation | Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated statement of income for three months ended September 30, 2005 | ||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||
Sales and other operating revenue, including excise taxes | $ | 3,465 | $ | - | $ | - | $ | 93,266 | $ | - | $ | 96,731 | ||||||||
Income from equity affiliates | 9,197 | - | (9 | ) | 3,085 | (9,193 | ) | 3,080 | ||||||||||||
Other income | 255 | - | - | 651 | - | 906 | ||||||||||||||
Intercompany revenue | 9,632 | 14 | 14 | 76,063 | (85,723 | ) | - | |||||||||||||
Total revenues and other income | 22,549 | 14 | 5 | 173,065 | (94,916 | ) | 100,717 | |||||||||||||
Costs and other deductions | ||||||||||||||||||||
Crude oil and product purchases | 8,565 | - | - | 125,338 | (81,558 | ) | 52,345 | |||||||||||||
Production and manufacturing expenses | 1,754 | 1 | - | 6,061 | (1,279 | ) | 6,537 | |||||||||||||
Selling, general and administrative expenses | 578 | - | - | 3,327 | (140 | ) | 3,765 | |||||||||||||
Depreciation and depletion | 344 | 1 | - | 2,168 | - | 2,513 | ||||||||||||||
Exploration expenses, including dry holes | 38 | - | - | 210 | - | 248 | ||||||||||||||
Interest expense | 707 | 4 | 40 | 2,089 | (2,767 | ) | 73 | |||||||||||||
Excise taxes | - | - | - | 8,160 | - | 8,160 | ||||||||||||||
Other taxes and duties | 7 | - | - | 10,843 | - | 10,850 | ||||||||||||||
Income applicable to minority and preferred interests | - | - | - | 174 | - | 174 | ||||||||||||||
Total costs and other deductions | 11,993 | 6 | 40 | 158,370 | (85,744 | ) | 84,665 | |||||||||||||
Income before income taxes | 10,556 | 8 | (35 | ) | 14,695 | (9,172 | ) | 16,052 | ||||||||||||
Income taxes | 636 | 3 | (9 | ) | 5,502 | - | 6,132 | |||||||||||||
Net income | $ | 9,920 | $ | 5 | $ | (26 | ) | $ | 9,193 | $ | (9,172 | ) | $ | 9,920 |
|
Revenues and other income | ||||||||||||||||||
Sales and other operating revenue, including excise taxes | $ | 12,436 | $ | - | $ | - | $ | 266,173 | $ | - | $ | 278,609 | ||||||
Income from equity affiliates | 28,646 | - | 7 | 5,256 | (28,644 | ) | 5,265 | |||||||||||
Other income | 722 | - | - | 3,011 | - | 3,733 | ||||||||||||
Intercompany revenue | 30,374 | 52 | 69 | 251,293 | (281,788 | ) | - | |||||||||||
Total revenues and other income | 72,178 | 52 | 76 | 525,733 | (310,432 | ) | 287,607 | |||||||||||
Costs and other deductions | ||||||||||||||||||
Crude oil and product purchases | 28,914 | - | - | 377,212 | (265,761 | ) | 140,365 | |||||||||||
Production and manufacturing expenses | 5,588 | 2 | - | 20,029 | (3,722 | ) | 21,897 | |||||||||||
Selling, general and administrative expenses | 1,939 | - | - | 8,946 | (450 | ) | 10,435 | |||||||||||
Depreciation and depletion | 1,027 | 3 | - | 7,104 | - | 8,134 | ||||||||||||
Exploration expenses, including dry holes | 215 | - | - | 595 | - | 810 | ||||||||||||
Interest expense | 3,403 | 13 | 137 | 8,871 | (11,871 | ) | 553 | |||||||||||
Excise taxes | - | - | - | 23,639 | - | 23,639 | ||||||||||||
Other taxes and duties | 26 | - | - | 29,180 | - | 29,206 | ||||||||||||
Income applicable to minority and preferred interests | - | - | - | 727 | - | 727 | ||||||||||||
Total costs and other deductions | 41,112 | 18 | 137 | 476,303 | (281,804 | ) | 235,766 | |||||||||||
Income before income taxes | 31,066 | 34 | (61 | ) | 49,430 | (28,628 | ) | 51,841 | ||||||||||
Income taxes | 1,816 | 14 | (24 | ) | 20,785 | - | 22,591 | |||||||||||
Net income | $ | 29,250 | $ | 20 | $ | (37 | ) | $ | 28,645 | $ | (28,628 | ) | $ | 29,250 |
-15--12-
| ||||||||||||||||||||
|
|
| ||||||||||||||||||
|
|
|
| |||||||||||||||||
|
|
|
|
| ||||||||||||||||
|
|
|
|
|
| |||||||||||||||
| ||||||||||||||||||||
|
SeaRiver | ||||||||||||||||||||||||||||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||||||||||||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||||||||||||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||||||||||||||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||||||||||
(millions of dollars) | ||||||||||||||||||||||||||||||||||||||||||||||
Condensed consolidated statement of income for three months ended March 31, 2006 | Condensed consolidated statement of income for three months ended March 31, 2006 | |||||||||||||||||||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||||||||||||||||||||
Sales and other operating revenue, including excise taxes | $ | 11,260 | $ | - | $ | - | $ | 251,568 | $ | - | $ | 262,828 | ||||||||||||||||||||||||||||||||||
Sales and other operating revenue, | ||||||||||||||||||||||||||||||||||||||||||||||
including sales-based taxes | $ | 4,221 | $ | - | $ | 82,096 | $ | - | $ | 86,317 | ||||||||||||||||||||||||||||||||||||
Income from equity affiliates | 23,272 | - | (1 | ) | 5,957 | (23,271 | ) | 5,957 | 8,443 | 9 | 1,797 | (8,449 | ) | 1,800 | ||||||||||||||||||||||||||||||||
Other income | 564 | - | - | 1,987 | - | 2,551 | 191 | - | 672 | - | 863 | |||||||||||||||||||||||||||||||||||
Intercompany revenue | 24,412 | 36 | 37 | 201,023 | (225,508 | ) | - | 8,769 | 20 | 77,803 | (86,592 | ) | - | |||||||||||||||||||||||||||||||||
Total revenues and other income | 59,508 | 36 | 36 | 460,535 | (248,779 | ) | 271,336 | 21,624 | 29 | 162,368 | (95,041 | ) | 88,980 | |||||||||||||||||||||||||||||||||
Costs and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||
Crude oil and product purchases | 22,696 | - | - | 327,907 | (214,269 | ) | 136,334 | 8,454 | - | 116,199 | (81,832 | ) | 42,821 | |||||||||||||||||||||||||||||||||
Production and manufacturing expenses | 5,031 | 2 | - | 17,969 | (3,913 | ) | 19,089 | |||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 1,776 | 1 | - | 9,315 | (368 | ) | 10,724 | |||||||||||||||||||||||||||||||||||||||
Production and manufacturing | ||||||||||||||||||||||||||||||||||||||||||||||
expenses | 2,037 | - | 6,616 | (1,229 | ) | 7,424 | ||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||||||||||||||||||||
expenses | 686 | - | 2,920 | (140 | ) | 3,466 | ||||||||||||||||||||||||||||||||||||||||
Depreciation and depletion | 1,011 | 3 | - | 6,568 | - | 7,582 | 311 | - | 2,333 | - | 2,644 | |||||||||||||||||||||||||||||||||||
Exploration expenses, including dry holes | 115 | - | - | 520 | - | 635 | ||||||||||||||||||||||||||||||||||||||||
Exploration expenses, including dry | ||||||||||||||||||||||||||||||||||||||||||||||
holes | 106 | - | 176 | - | 282 | |||||||||||||||||||||||||||||||||||||||||
Interest expense | 1,795 | 11 | 118 | 5,462 | (7,013 | ) | 373 | 993 | 45 | 2,521 | (3,394 | ) | 165 | |||||||||||||||||||||||||||||||||
Excise taxes | - | - | - | 22,913 | - | 22,913 | ||||||||||||||||||||||||||||||||||||||||
Sales-based taxes | - | - | 7,664 | - | 7,664 | |||||||||||||||||||||||||||||||||||||||||
Other taxes and duties | 15 | - | - | 31,489 | - | 31,504 | 6 | - | 8,867 | - | 8,873 | |||||||||||||||||||||||||||||||||||
Income applicable to minority and preferred interests | - | - | - | 468 | - | 468 | ||||||||||||||||||||||||||||||||||||||||
Income applicable to minority and | ||||||||||||||||||||||||||||||||||||||||||||||
preferred interests | - | - | 182 | - | 182 | |||||||||||||||||||||||||||||||||||||||||
Total costs and other deductions | 32,439 | 17 | 118 | 422,611 | (225,563 | ) | 229,622 | 12,593 | 45 | 147,478 | (86,595 | ) | 73,521 | |||||||||||||||||||||||||||||||||
Income before income taxes | 27,069 | 19 | (82 | ) | 37,924 | (23,216 | ) | 41,714 | 9,031 | (16 | ) | 14,890 | (8,446 | ) | 15,459 | |||||||||||||||||||||||||||||||
Income taxes | 1,649 | 7 | (28 | ) | 14,666 | - | 16,294 | 631 | (9 | ) | 6,437 | - | 7,059 | |||||||||||||||||||||||||||||||||
Net income | $ | 25,420 | $ | 12 | $ | (54 | ) | $ | 23,258 | $ | (23,216 | ) | $ | 25,420 | $ | 8,400 | $ | (7 | ) | $ | 8,453 | $ | (8,446 | ) | $ | 8,400 |
-16--13-
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated balance sheet as of March 31,2007 | ||||||||||||||||||||
Cash and cash equivalents | $ | 2,913 | $ | - | $ | 27,081 | $ | - | $ | 29,994 | ||||||||||
Cash and cash equivalents - restricted | - | - | 4,604 | - | 4,604 | |||||||||||||||
Notes and accounts receivable - net | 2,029 | - | 25,553 | - | 27,582 | |||||||||||||||
Inventories | 1,276 | - | 11,329 | - | 12,605 | |||||||||||||||
Prepaid taxes and expenses | 1,169 | 3 | 2,108 | - | 3,280 | |||||||||||||||
Total current assets | 7,387 | 3 | 70,675 | - | 78,065 | |||||||||||||||
Property, plant and equipment - net | 16,523 | - | 97,678 | - | 114,201 | |||||||||||||||
Investments and other assets | 214,751 | 430 | 414,212 | (598,360 | ) | 31,033 | ||||||||||||||
Intercompany receivables | 12,585 | 1,899 | 437,295 | (451,779 | ) | - | ||||||||||||||
Total assets | $ | 251,246 | $ | 2,332 | $ | 1,019,860 | $ | (1,050,139 | ) | $ | 223,299 | |||||||||
Notes and loan payables | $ | 260 | $ | 13 | $ | 1,733 | $ | - | $ | 2,006 | ||||||||||
Accounts payable and accrued liabilities | 2,786 | 1 | 36,136 | - | 38,923 | |||||||||||||||
Income taxes payable | - | - | 9,661 | - | 9,661 | |||||||||||||||
Total current liabilities | 3,046 | 14 | 47,530 | - | 50,590 | |||||||||||||||
Long-term debt | 273 | 1,647 | 4,838 | - | 6,758 | |||||||||||||||
Deferred income tax liabilities | 1,568 | 232 | 19,210 | - | 21,010 | |||||||||||||||
Other long-term liabilities | 11,444 | - | 19,387 | - | 30,831 | |||||||||||||||
Intercompany payables | 120,805 | 384 | 330,590 | (451,779 | ) | - | ||||||||||||||
Total liabilities | 137,136 | 2,277 | 421,555 | (451,779 | ) | 109,189 | ||||||||||||||
Earnings reinvested | 202,984 | (414 | ) | 153,489 | (153,075 | ) | 202,984 | |||||||||||||
Other shareholders' equity | (88,874 | ) | 469 | 444,816 | (445,285 | ) | (88,874 | ) | ||||||||||||
Total shareholders' equity | 114,110 | 55 | 598,305 | (598,360 | ) | 114,110 | ||||||||||||||
Total liabilities and | ||||||||||||||||||||
shareholders' equity | $ | 251,246 | $ | 2,332 | $ | 1,019,860 | $ | (1,050,139 | ) | $ | 223,299 |
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Exxon | Financial | and | |||||||||||||||||
Parent | Capital | Holdings | All Other | Eliminating | ||||||||||||||||
Guarantor | Corporation | Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated balance sheet as of September 30, 2006 | ||||||||||||||||||||
Cash and cash equivalents | $ | 6,912 | $ | - | $ | - | $ | 25,822 | $ | - | $ | 32,734 | ||||||||
Cash and cash equivalents - restricted | 4,604 | - | - | - | - | 4,604 | ||||||||||||||
Notes and accounts receivable - net | 2,175 | - | - | 26,215 | - | 28,390 | ||||||||||||||
Inventories | 1,441 | - | - | 11,087 | - | 12,528 | ||||||||||||||
Prepaid taxes and expenses | 1,352 | - | 14 | 2,131 | - | 3,497 | ||||||||||||||
Total current assets | 16,484 | - | 14 | 65,255 | - | 81,753 | ||||||||||||||
Property, plant and equipment - net | 16,876 | 89 | - | 94,757 | - | 111,722 | ||||||||||||||
Investments and other assets | 193,258 | - | 426 | 403,150 | (566,362 | ) | 30,472 | |||||||||||||
Intercompany receivables | 9,777 | 1,104 | 1,850 | 418,966 | (431,697 | ) | - | |||||||||||||
Total assets | $ | 236,395 | $ | 1,193 | $ | 2,290 | $ | 982,128 | $ | (998,059 | ) | $ | 223,947 | |||||||
Notes and loan payables | $ | 305 | $ | - | $ | 10 | $ | 1,810 | $ | - | $ | 2,125 | ||||||||
Accounts payable and accrued liabilities | 3,014 | 1 | 1 | 37,209 | - | 40,225 | ||||||||||||||
Income taxes payable | 0 | 14 | - | 12,440 | - | 12,454 | ||||||||||||||
Total current liabilities | 3,319 | 15 | 11 | 51,459 | - | 54,804 | ||||||||||||||
Long-term debt | 270 | 160 | 1,576 | 4,458 | - | 6,464 | ||||||||||||||
Deferred income tax liabilities | 2,875 | 26 | 249 | 17,868 | - | 21,018 | ||||||||||||||
Other long-term liabilities | 5,788 | 25 | - | 19,255 | - | 25,068 | ||||||||||||||
Intercompany payables | 107,550 | 139 | 383 | 323,625 | (431,697 | ) | - | |||||||||||||
Total liabilities | 119,802 | 365 | 2,219 | 416,665 | (431,697 | ) | 107,354 | |||||||||||||
Earnings reinvested | 186,810 | 43 | (398 | ) | 136,087 | (135,732 | ) | 186,810 | ||||||||||||
Other shareholders' equity | (70,217 | ) | 785 | 469 | 429,376 | (430,630 | ) | (70,217 | ) | |||||||||||
Total shareholders' equity | 116,593 | 828 | 71 | 565,463 | (566,362 | ) | 116,593 | |||||||||||||
Total liabilities and shareholders' equity | $ | 236,395 | $ | 1,193 | $ | 2,290 | $ | 982,128 | $ | (998,059 | ) | $ | 223,947 |
Condensed consolidated balance sheet as of December 31, 2005 | |||||||||||||||||||||||||||||||||||
Condensed consolidated balance sheet as of December 31, 2006 | Condensed consolidated balance sheet as of December 31, 2006 | ||||||||||||||||||||||||||||||||||
Cash and cash equivalents | $ | 12,076 | $ | - | $ | - | $ | 16,595 | $ | - | $ | 28,671 | $ | 6,355 | $ | - | $ | 21,889 | $ | - | $ | 28,244 | |||||||||||||
Cash and cash equivalents - restricted | 4,604 | - | - | - | - | 4,604 | - | - | 4,604 | - | 4,604 | ||||||||||||||||||||||||
Notes and accounts receivable - net | 2,183 | - | - | 25,301 | - | 27,484 | 2,057 | - | 26,885 | - | 28,942 | ||||||||||||||||||||||||
Inventories | 1,241 | - | - | 8,080 | - | 9,321 | 1,213 | - | 9,501 | - | 10,714 | ||||||||||||||||||||||||
Prepaid taxes and expenses | 117 | - | - | 3,145 | - | 3,262 | 357 | - | 2,916 | - | 3,273 | ||||||||||||||||||||||||
Total current assets | 20,221 | - | - | 53,121 | - | 73,342 | 9,982 | - | 65,795 | - | 75,777 | ||||||||||||||||||||||||
Property, plant and equipment - net | 15,537 | 92 | - | 91,381 | - | 107,010 | 16,730 | - | 96,957 | - | 113,687 | ||||||||||||||||||||||||
Investments and other assets | 164,290 | - | 449 | 409,233 | (545,989 | ) | 27,983 | 201,257 | 423 | 415,910 | (588,039 | ) | 29,551 | ||||||||||||||||||||||
Intercompany receivables | 14,569 | 1,041 | 1,768 | 377,176 | (394,554 | ) | - | 16,501 | 1,883 | 435,221 | (453,605 | ) | - | ||||||||||||||||||||||
Total assets | $ | 214,617 | $ | 1,133 | $ | 2,217 | $ | 930,911 | $ | (940,543 | ) | $ | 208,335 | $ | 244,470 | $ | 2,306 | $ | 1,013,883 | $ | (1,041,644 | ) | $ | 219,015 | |||||||||||
Notes and loan payables | $ | 446 | $ | - | $ | 10 | $ | 1,315 | $ | - | $ | 1,771 | $ | 90 | $ | 13 | $ | 1,599 | $ | - | $ | 1,702 | |||||||||||||
Accounts payable and accrued liabilities | 3,137 | 3 | 1 | 32,979 | - | 36,120 | 3,025 | 1 | 36,056 | - | 39,082 | ||||||||||||||||||||||||
Income taxes payable | 553 | 1 | 2 | 7,860 | - | 8,416 | 548 | 1 | 7,484 | - | 8,033 | ||||||||||||||||||||||||
Total current liabilities | 4,136 | 4 | 13 | 42,154 | - | 46,307 | 3,663 | 15 | 45,139 | - | 48,817 | ||||||||||||||||||||||||
Long-term debt | 270 | 160 | 1,456 | 4,334 | - | 6,220 | 274 | 1,602 | 4,769 | - | 6,645 | ||||||||||||||||||||||||
Deferred income tax liabilities | 2,909 | 27 | 257 | 17,685 | - | 20,878 | 1,975 | 237 | 18,639 | - | 20,851 | ||||||||||||||||||||||||
Other long-term liabilities | 5,411 | 13 | - | 18,320 | - | 23,744 | 8,044 | - | 20,814 | - | 28,858 | ||||||||||||||||||||||||
Intercompany payables | 90,705 | 121 | 383 | 303,345 | (394,554 | ) | - | 116,670 | 387 | 336,548 | (453,605 | ) | - | ||||||||||||||||||||||
Total liabilities | 103,431 | 325 | 2,109 | 385,838 | (394,554 | ) | 97,149 | 130,626 | 2,241 | 425,909 | (453,605 | ) | 105,171 | ||||||||||||||||||||||
Earnings reinvested | 163,335 | 23 | (361 | ) | 108,770 | (108,432 | ) | 163,335 | 195,207 | (404 | ) | 144,607 | (144,203 | ) | 195,207 | ||||||||||||||||||||
Other shareholders' equity | (52,149 | ) | 785 | 469 | 436,303 | (437,557 | ) | (52,149 | ) | (81,363 | ) | 469 | 443,367 | (443,836 | ) | (81,363 | ) | ||||||||||||||||||
Total shareholders' equity | 111,186 | 808 | 108 | 545,073 | (545,989 | ) | 111,186 | 113,844 | 65 | 587,974 | (588,039 | ) | 113,844 | ||||||||||||||||||||||
Total liabilities and shareholders' equity | $ | 214,617 | $ | 1,133 | $ | 2,217 | $ | 930,911 | $ | (940,543 | ) | $ | 208,335 | ||||||||||||||||||||||
Total liabilities and | |||||||||||||||||||||||||||||||||||
shareholders' equity | $ | 244,470 | $ | 2,306 | $ | 1,013,883 | $ | (1,041,644 | ) | $ | 219,015 |
-17--14-
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Exxon | Financial | and | |||||||||||||||||
Parent | Capital | Holdings | All Other | Eliminating | ||||||||||||||||
Guarantor | Corporation | Inc. | Subsidiaries | Adjustments | Consolidated | |||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated statement of cash flows for nine months ended September 30, 2006 | ||||||||||||||||||||
Cash provided by/(used in) operating activities | $ | 1,122 | $ | 44 | $ | 74 | $ | 40,512 | $ | (1,328 | ) | $ | 40,424 | |||||||
Cash flows from investing activities | ||||||||||||||||||||
Additions to property, plant and equipment | (1,188 | ) | - | - | (10,113 | ) | - | (11,301 | ) | |||||||||||
Sales of long-term assets | 226 | - | - | 2,102 | - | 2,328 | ||||||||||||||
Net intercompany investing | 20,711 | (63 | ) | (75 | ) | (20,736 | ) | 163 | - | |||||||||||
All other investing, net | - | - | - | (1,791 | ) | - | (1,791 | ) | ||||||||||||
Net cash provided by/(used in) investing activities | 19,749 | (63 | ) | (75 | ) | (30,538 | ) | 163 | (10,764 | ) | ||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Additions to long-term debt | - | - | - | 123 | - | 123 | ||||||||||||||
Reductions in long-term debt | - | - | - | (31 | ) | - | (31 | ) | ||||||||||||
Additions/(reductions) in short-term debt - net | (151 | ) | - | - | 396 | - | 245 | |||||||||||||
Cash dividends | (5,775 | ) | - | - | (1,328 | ) | 1,328 | (5,775 | ) | |||||||||||
Net ExxonMobil shares sold/(acquired) | (20,379 | ) | - | - | - | - | (20,379 | ) | ||||||||||||
Net intercompany financing activity | - | 19 | 1 | 143 | (163 | ) | - | |||||||||||||
All other financing, net | 270 | - | - | (587 | ) | - | (317 | ) | ||||||||||||
Net cash provided by/(used in) financing activities | (26,035 | ) | 19 | 1 | (1,284 | ) | 1,165 | (26,134 | ) | |||||||||||
Effects of exchange rate changes on cash | - | - | - | 537 | - | 537 | ||||||||||||||
Increase/(decrease) in cash and cash equivalents | $ | (5,164 | ) | $ | - | $ | - | $ | 9,227 | $ | - | $ | 4,063 |
Condensed consolidated statement of cash flows for nine months ended September 30, 2005 | ||||||||||||||||||||||||||||||||||||||
Cash provided by/(used in) operating activities | $ | 2,940 | $ | 25 | $ | 74 | $ | 35,544 | $ | (835 | ) | $ | 37,748 | |||||||||||||||||||||||||
SeaRiver | ||||||||||||||||||||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||||||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||||||||||||||||||||
(millions of dollars) | ||||||||||||||||||||||||||||||||||||||
Condensed consolidated statement of cash flows for three months ended March 31, 2007 | Condensed consolidated statement of cash flows for three months ended March 31, 2007 | |||||||||||||||||||||||||||||||||||||
Cash provided by/(used in) operating | ||||||||||||||||||||||||||||||||||||||
activities | $ | 1,017 | $ | 19 | $ | 13,413 | $ | (163 | ) | $ | 14,286 | |||||||||||||||||||||||||||
Cash flows from investing activities | ||||||||||||||||||||||||||||||||||||||
Additions to property, plant and equipment | (999 | ) | - | - | (8,941 | ) | - | (9,940 | ) | |||||||||||||||||||||||||||||
Additions to property, plant and | ||||||||||||||||||||||||||||||||||||||
equipment | (301 | ) | - | (2,805 | ) | - | (3,106 | ) | ||||||||||||||||||||||||||||||
Sales of long-term assets | 220 | - | - | 4,360 | - | 4,580 | 97 | - | 441 | - | 538 | |||||||||||||||||||||||||||
Net intercompany investing | 18,762 | 21 | (129 | ) | (18,820 | ) | 166 | - | 5,190 | (16 | ) | (5,202 | ) | 28 | - | |||||||||||||||||||||||
All other investing, net | 1 | - | - | (2,020 | ) | - | (2,019 | ) | - | - | (670 | ) | - | (670 | ) | |||||||||||||||||||||||
Net cash provided by/(used in) investing activities | 17,984 | 21 | (129 | ) | (25,421 | ) | 166 | (7,379 | ) | |||||||||||||||||||||||||||||
Net cash provided by/(used in) | ||||||||||||||||||||||||||||||||||||||
investing activities | 4,986 | (16 | ) | (8,236 | ) | 28 | (3,238 | ) | ||||||||||||||||||||||||||||||
Cash flows from financing activities | ||||||||||||||||||||||||||||||||||||||
Additions to long-term debt | - | - | - | 61 | - | 61 | - | - | 93 | - | 93 | |||||||||||||||||||||||||||
Reductions in long-term debt | - | - | - | (83 | ) | - | (83 | ) | - | - | (36 | ) | - | (36 | ) | |||||||||||||||||||||||
Additions/(reductions) in short-term debt - net | 67 | - | - | (1,060 | ) | - | (993 | ) | ||||||||||||||||||||||||||||||
Additions/(reductions) in short-term | ||||||||||||||||||||||||||||||||||||||
debt - net | 168 | - | 106 | - | 274 | |||||||||||||||||||||||||||||||||
Cash dividends | (5,390 | ) | - | - | (835 | ) | 835 | (5,390 | ) | (1,825 | ) | - | (163 | ) | 163 | (1,825 | ) | |||||||||||||||||||||
Net ExxonMobil shares sold/(acquired) | (11,985 | ) | - | - | - | - | (11,985 | ) | (7,788 | ) | - | - | - | (7,788 | ) | |||||||||||||||||||||||
Net intercompany financing activity | - | (50 | ) | (20 | ) | 161 | (91 | ) | - | - | (3 | ) | 31 | (28 | ) | - | ||||||||||||||||||||||
All other financing, net | - | - | 75 | (580 | ) | (75 | ) | (580 | ) | - | - | (223 | ) | - | (223 | ) | ||||||||||||||||||||||
Net cash provided by/(used in) financing activities | (17,308 | ) | (50 | ) | 55 | (2,336 | ) | 669 | (18,970 | ) | ||||||||||||||||||||||||||||
Effects of exchange rate changes on cash | - | - | - | (690 | ) | - | (690 | ) | ||||||||||||||||||||||||||||||
Increase/(decrease) in cash and cash equivalents | $ | 3,616 | $ | (4 | ) | $ | - | $ | 7,097 | $ | - | $ | 10,709 | |||||||||||||||||||||||||
Net cash provided by/(used in) | ||||||||||||||||||||||||||||||||||||||
financing activities | (9,445 | ) | (3 | ) | (192 | ) | 135 | (9,505 | ) | |||||||||||||||||||||||||||||
Effects of exchange rate changes | ||||||||||||||||||||||||||||||||||||||
on cash | - | - | 207 | - | 207 | |||||||||||||||||||||||||||||||||
Increase/(decrease) in cash and cash | ||||||||||||||||||||||||||||||||||||||
equivalents | $ | (3,442 | ) | $ | - | $ | 5,192 | $ | - | $ | 1,750 |
-18-
Condensed consolidated statement of cash flows for three months ended March 31, 2006 | ||||||||||||||||
Cash provided by/(used in) operating | ||||||||||||||||
activities | $ | 2,387 | $ | 15 | $ | 12,997 | $ | (768 | ) | $ | 14,631 | |||||
Cash flows from investing activities | ||||||||||||||||
Additions to property, plant and | ||||||||||||||||
equipment | (340 | ) | - | (3,390 | ) | - | (3,730 | ) | ||||||||
Sales of long-term assets | 18 | - | 376 | - | 394 | |||||||||||
Net intercompany investing | 2,847 | (16 | ) | (2,874 | ) | 43 | - | |||||||||
All other investing, net | - | - | (167 | ) | - | (167 | ) | |||||||||
Net cash provided by/(used in) | ||||||||||||||||
investing activities | 2,525 | (16 | ) | (6,055 | ) | 43 | (3,503 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Additions to long-term debt | - | - | 13 | - | 13 | |||||||||||
Reductions in long-term debt | - | - | (7 | ) | - | (7 | ) | |||||||||
Additions/(reductions) in short-term | ||||||||||||||||
debt - net | (163 | ) | - | 102 | - | (61 | ) | |||||||||
Cash dividends | (1,957 | ) | - | (768 | ) | 768 | (1,957 | ) | ||||||||
Net ExxonMobil shares sold/(acquired) | (5,764 | ) | - | - | - | (5,764 | ) | |||||||||
Net intercompany financing activity | - | 1 | 42 | (43 | ) | - | ||||||||||
All other financing, net | - | - | (226 | ) | - | (226 | ) | |||||||||
Net cash provided by/(used in) | ||||||||||||||||
financing activities | (7,884 | ) | 1 | (844 | ) | 725 | (8,002 | ) | ||||||||
Effects of exchange rate changes | ||||||||||||||||
on cash | - | - | 148 | - | 148 | |||||||||||
Increase/(decrease) in cash and cash | ||||||||||||||||
equivalents | $ | (2,972 | ) | $ | - | $ | 6,246 | $ | - | $ | 3,274 |
-15-
EXXON MOBIL CORPORATION
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
FUNCTIONAL EARNINGS SUMMARY
Third Quarter | First Nine Months | |||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||
(millions of dollars) | ||||||||||||
Net Income (U.S. GAAP) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,192 | $ | 1,671 | $ | 4,116 | $ | 4,413 | ||||
Non-U.S. | 5,301 | 5,678 | 15,894 | 12,898 | ||||||||
Downstream | ||||||||||||
United States | 1,272 | 1,109 | 3,305 | 2,753 | ||||||||
Non-U.S. | 1,466 | 1,019 | 3,189 | 2,849 | ||||||||
Chemical | ||||||||||||
United States | 458 | 70 | 976 | 905 | ||||||||
Non-U.S. | 893 | 402 | 2,164 | 1,813 | ||||||||
Corporate and financing | (92 | ) | (29 | ) | (394 | ) | (211 | ) | ||||
Net Income (U.S. GAAP) | $ | 10,490 | $ | 9,920 | $ | 29,250 | $ | 25,420 | ||||
Net income per common share (dollars) | $ | 1.79 | $ | 1.60 | $ | 4.91 | $ | 4.04 | ||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 1.77 | $ | 1.58 | $ | 4.86 | $ | 4.00 | ||||
Special items included in net income | ||||||||||||
Non-U.S. Upstream | ||||||||||||
Gain on Dutch gas restructuring | $ | 0 | $ | 1,620 | $ | 0 | $ | 1,620 | ||||
U.S. Downstream | ||||||||||||
Allapattah lawsuit provision | $ | 0 | $ | 0 | $ | 0 | $ | (200 | ) | |||
Non-U.S. Downstream | ||||||||||||
Sale of Sinopec shares | $ | 0 | $ | 0 | $ | 0 | $ | 310 | ||||
Non-U.S. Chemical | ||||||||||||
Sale of Sinopec shares | $ | 0 | $ | 0 | $ | 0 | $ | 150 |
First Three Months | ||||||||||||
2007 | 2006 | |||||||||||
(millions of dollars) | ||||||||||||
Net Income (U.S. GAAP) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,177 | $ | 1,280 | ||||||||
Non-U.S. | 4,864 | 5,103 | ||||||||||
Downstream | ||||||||||||
United States | 839 | 679 | ||||||||||
Non-U.S. | 1,073 | 592 | ||||||||||
Chemical | ||||||||||||
United States | 346 | 329 | ||||||||||
Non-U.S. | 890 | 620 | ||||||||||
Corporate and financing | 91 | (203 | ) | |||||||||
Net Income (U.S. GAAP) | $ | 9,280 | $ | 8,400 | ||||||||
Net income per common share (dollars) | $ | 1.64 | $ | 1.38 | ||||||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 1.62 | $ | 1.37 |
REVIEW OF THIRDFIRST QUARTER AND FIRST NINE MONTHS 20062007 RESULTS
Exxon Mobil Corporation reported record thirdfirst quarter 20062007 net income of $10,490$9,280 million, ($1.77 per share), an increase of $57010 percent or $880 million from the thirdfirst quarter of 2005.2006. Higher crude oil and natural gas realizations and improvedrefining, marketing and chemical margins were partly offset by lower refining margins.a decrease in crude oil and natural gas realizations. Earnings per share were $1.62, an increase of $1.77 increased 1218 percent, reflecting strong earnings and the reduction inbenefits of the numbershare repurchase program. Share purchases of $7.0 billion during the first quarter of 2007 reduced shares outstanding. Third quarter 2005 net income included a special gain of $1,620 million relatedoutstanding by 1.7 percent. Average shares outstanding were 7 percent lower relative to the restructuringfirst quarter of the Corporation's interest in the Dutch gas transportation business.
Record net income of $29,250 million ($4.86 per share) for the first nine months of 2006 increased by 15 percent versus 2005 reflecting ExxonMobil's continuing strong performance across all business segments. Earnings per share of $4.86 increased by 22 percent due to strong earnings and the reduction in the number of shares outstanding. Net income for the first nine months of 2005 included a $1,620 million special gain related to the restructuring of the Corporation's interest in the Dutch gas transportation business, a $460 million positive impact from the sale of the Corporation's interest in Sinopec and a $200 million litigation charge.
-19-2006.
Third Quarter | First Nine Months | |||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||
(millions of dollars) | ||||||||||||||||||
Upstream earnings | ||||||||||||||||||
United States | $ | 1,192 | $ | 1,671 | $ | 4,116 | $ | 4,413 | ||||||||||
Non-U.S. | 5,301 | 5,678 | 15,894 | 12,898 | ||||||||||||||
Total | $ | 6,493 | $ | 7,349 | $ | 20,010 | $ | 17,311 | ||||||||||
Special items included in net income | ||||||||||||||||||
Non-U.S. Upstream | ||||||||||||||||||
Gain on Dutch gas restructuring | $ | 0 | $ | 1,620 | $ | 0 | $ | 1,620 |
First Three Months | |||||||||||||||
|
| 2007 | 2006 | ||||||||||||
(millions of dollars) | |||||||||||||||
Upstream earnings | |||||||||||||||
United States | $ | 1,177 | $ | 1,280 | |||||||||||
Non-U.S. | 4,864 | 5,103 | |||||||||||||
Total | $ | 6,041 | $ | 6,383 |
Upstream earnings of $6,493were $6,041 million, were up $764down $342 million from the thirdfirst quarter of 2005 after reflecting the absence of the $1,620 million special gain related to the restructuring of the Corporation's interest in the Dutch gas transportation business,2006 primarily reflecting higher crude oillower realizations and decreased natural gas realizations.volumes driven by lower European demand. On an oil-equivalent basis, production increaseddecreased by 73 percent from the thirdfirst quarter of 2005.2006. Excluding the cumulative impact of entitlements and divestments, and entitlements,as well as OPEC quota effects, production increased 10was up almost 1 percent.
Liquids production of 2,6462,747 kbd (thousands of barrels per day) was up 195 kbd. Higher49 kbd higher. Increased production from projects in West Africa, Russia and increased volumes in Abu Dhabithe Middle East were partly offset by mature field decline entitlement effects and divestment impacts.the cumulative impact of entitlements and divestments. Excluding cumulative entitlement and divestment effects, as well as OPEC quota impacts, liquids production increased by 127 percent.
ThirdFirst quarter natural gas production was 8,16310,131 mcfd (millions of cubic feet per day) compared with 7,71611,175 mcfd last year. Higher volumes from projects in Qatar and absence of 2005 hurricane effects were partly offset by theThe impact of mature field decline and lowerthe reduction of European demand.demand by about 1,400 mcfd due to weather were partly offset by higher volumes from projects in Qatar.
Earnings from U.S. Upstream operations were $1,192$1,177 million, $479$103 million lower than the thirdfirst quarter of 2005.2006. Non-U.S. Upstream earnings of $5,301were $4,864 million, increased $1,243down $239 million after the absence of the Dutch gas transportation business restructuring gain in 2005.from 2006.
-16-
Upstream earnings for the first nine months of 2006 were $20,010 million, an increase of $2,699 million from 2005, primarily reflecting higher liquids and natural gas realizations partially offset by the absence of the Dutch gas transportation business restructuring gain in 2005. On an oil-equivalent basis, production increased 6 percent from last year. Excluding divestment and entitlement effects, production increased by 9 percent.
Liquids production of 2,682 kbd increased by 195 kbd from 2005. Higher production from projects in West Africa and increased volumes in Abu Dhabi were partly offset by mature field decline, entitlement effects and divestment impacts. Excluding entitlement effects and divestments, liquids production increased 12 percent.
Natural gas production of 9,353 mcfd increased 295 mcfd from 2005. Higher volumes from projects in Qatar were partly offset by mature field decline.
Earnings from U.S. Upstream operations for 2006 were $4,116 million, a decrease of $297 million. Earnings outside the U.S. were $15,894 million, $2,996 million higher than 2005.
-20-
Third Quarter | First Nine Months | |||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||
(millions of dollars) | ||||||||||||||||||
Downstream earnings | ||||||||||||||||||
United States | $ | 1,272 | $ | 1,109 | $ | 3,305 | $ | 2,753 | ||||||||||
Non-U.S. | 1,466 | 1,019 | 3,189 | 2,849 | ||||||||||||||
Total | $ | 2,738 | $ | 2,128 | $ | 6,494 | $ | 5,602 | ||||||||||
Special items included in net income | ||||||||||||||||||
U.S. Downstream | ||||||||||||||||||
Allapattah lawsuit provision | $ | 0 | $ | 0 | $ | 0 | $ | (200 | ) | |||||||||
Non-U.S. Downstream | ||||||||||||||||||
Sale of Sinopec shares | $ | 0 | $ | 0 | $ | 0 | $ | 310 |
First Three Months | ||||||||||||||||
2007 | 2006 | |||||||||||||||
(millions of dollars) | ||||||||||||||||
Downstream earnings | ||||||||||||||||
United States | $ | 839 | $ | 679 | ||||||||||||
Non-U.S. | 1,073 | 592 | ||||||||||||||
Total | $ | 1,912 | $ | 1,271 |
Downstream earnings were $2,738$1,912 million, up $610$641 million from the thirdfirst quarter 2005. The improved results reflect stronger worldwide2006, driven by higher refining and marketing margins which were partly offset by weaker refining margins.
and improved refinery throughput. Petroleum product sales were 7,3027,198 kbd, 17521 kbd lowerhigher than last year's third quarter,primarily due to divestments.first quarter.
U.S. Downstream earnings were $1,272$839 million, up $163 million.$160 million from the first quarter of 2006. Non-U.S. Downstream earnings of $1,466$1,073 million were $447$481 million higher than in the third quarter of 2005.higher.
Downstream earnings for the first nine months of 2006 of $6,494 million increased $1,002 million from 2005 reflecting stronger worldwide refining and marketing margins, partly offset by lower refining throughput. Earnings in 2005 also included a $200 million charge for Allapattah and a $310 million positive impact for Sinopec.
Petroleum product sales of 7,180 kbd decreased from 7,494 kbd in 2005, primarily due to lower refining throughput and divestments.
U.S. Downstream earnings were $3,305 million, up $352 million after the absence of the Allapattah charge in 2005. Non-U.S. Downstream earnings were $3,189 million, $650 million higher than last year after the absence of the Sinopec gain in 2005.
Third Quarter | First Nine Months | First Three Months | ||||||||||||||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | |||||||||||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||||||||||||||||
Chemical earnings | ||||||||||||||||||||||||||||||||||||||
United States | $ | 458 | $ | 70 | $ | 976 | $ | 905 | $ | 346 | $ | 329 | ||||||||||||||||||||||||||
Non-U.S. | 893 | 402 | 2,164 | 1,813 | 890 | 620 | ||||||||||||||||||||||||||||||||
Total | $ | 1,351 | $ | 472 | $ | 3,140 | $ | 2,718 | $ | 1,236 | $ | 949 | ||||||||||||||||||||||||||
Special items included in net income | ||||||||||||||||||||||||||||||||||||||
Non-U.S. Chemical | ||||||||||||||||||||||||||||||||||||||
Sale of Sinopec shares | $ | 0 | $ | 0 | $ | 0 | $ | 150 |
Chemical earnings were $1,351$1,236 million, up $879$287 million from the thirdfirst quarter 2005. The increase reflects stronger margins, partially offset by weaker demand for commodities.of 2006 due to improved margins. Prime product sales of 6,7526,805 kt (thousands of metric tons) in the first quarter of 2007 were down 203111 kt from last year's third quarter.the prior year.
Chemical earnings for the first nine months of 2006 were $3,140 million, up $572 million from 2005 reflecting higher margins and volumes, after the absence of the $150 million gain for Sinopec in 2005. Prime product sales were 20,523 kt, up 38 kt from 2005.
-21-
Third Quarter | First Nine Months | |||||||||||||||||
2006 | 2005 | 2006 | 2005 | |||||||||||||||
(millions of dollars) | ||||||||||||||||||
All other segments earnings | ||||||||||||||||||
Corporate and financing | $ | (92 | ) | $ | (29 | ) | $ | (394 | ) | $ | (211 | ) |
First Three Months | |||||||||||||||
2007 | 2006 | ||||||||||||||
(millions of dollars) | |||||||||||||||
Corporate and financing earnings | $ | 91 | $ | (203 | ) |
Corporate and financing expensesearnings were $92$91 million, versus $29 million in third quarter 2005.
Corporate and financing expenses for the first nine months of 2006 of $394 million increased by $183up $294 million, mainly due to tax items.
LIQUIDITY AND CAPITAL RESOURCES
Third Quarter | First Nine Months | First Three Months | ||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | |||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||
Net cash provided by/(used in) | ||||||||||||||||||||||||
Operating activities | $ | 40,424 | $ | 37,748 | $ | 14,286 | $ | 14,631 | ||||||||||||||||
Investing activities | (10,764 | ) | (7,379 | ) | (3,238 | ) | (3,503 | ) | ||||||||||||||||
Financing activities | (26,134 | ) | (18,970 | ) | (9,505 | ) | (8,002 | ) | ||||||||||||||||
Effect of exchange rate changes | 537 | (690 | ) | 207 | 148 | |||||||||||||||||||
Increase/(decrease) in cash and cash equivalents | $ | 4,063 | $ | 10,709 | $ | 1,750 | $ | 3,274 | ||||||||||||||||
Cash and cash equivalents | $ | 32,734 | $ | 29,240 | $ | 29,994 | $ | 31,945 | ||||||||||||||||
Cash and cash equivalents - restricted (note 4) | 4,604 | 4,604 | ||||||||||||||||||||||
Cash and cash equivalents - restricted (note 3) | 4,604 | 4,604 | ||||||||||||||||||||||
Total cash and cash equivalents (at end of period) | $ | 37,338 | $ | 33,844 | $ | 34,598 | $ | 36,549 | ||||||||||||||||
Cash flow from operations and asset sales | ||||||||||||||||||||||||
Net cash provided by operating activities (U.S. GAAP) | $ | 14,497 | $ | 15,767 | $ | 40,424 | $ | 37,748 | $ | 14,286 | $ | 14,631 | ||||||||||||
Sales of subsidiaries, investments and property, | ||||||||||||||||||||||||
plant and equipment | 878 | 754 | 2,328 | 4,580 | 538 | 394 | ||||||||||||||||||
Cash flow from operations and asset sales | $ | 15,375 | $ | 16,521 | $ | 42,752 | $ | 42,328 | $ | 14,824 | $ | 15,025 |
Because of the ongoing nature of our asset management and divestment program, we believe
it is useful for investors to consider asset sales proceeds together with cash provided by operating
activities when evaluating cash available for investment in the business and financing activities.
-17-
Total cash and cash equivalents, including the $4.6 billion of restricted cash, was $37.3$34.6 billion at the end of the thirdfirst quarter of 2006.2007.
Cash provided by operating activities totaled $40,424$14,286 million for the first ninethree months of 2006 and increased $2,676 million from 2005. Major sources2007, similar to 2006. The major source of funds werewas net income of $29,250$9,280 million, and non-cash provisionsadjusted for the noncash provision of $8,134$2,942 million for depreciation and depletion.depletion, both of which increased. The net timing effects of changes in operational working capital provided an offset. For additional details, see the Condensed Consolidated Statement of Cash Flows on page 5.
Investing activities for the first ninethree months of 20062007 used net cash of $10,764$3,238 million compared to $7,379$3,503 million in the prior year. Spending for additions to property, plant and equipment increased $1,361decreased $624 million to $11,301$3,106 million. Proceeds from asset divestments of $2,328$538 million in 2007 were $2,252 million lower in 2006 reflecting the absence of the $1.4 billion of proceeds from the sale of the Corporation's interest in Sinopec in 2005.higher.
Cash flow from operations and asset sales in the first ninethree months of 20062007 of $42.8$14.8 billion, including asset sales of $2.3$0.5 billion, increased from 2005 as higher cash from operating activities more than offsetwas comparable to the lower proceeds from asset sales. Cash flow from operations and asset sales in the third quarter of 2006 was $15.4 billion, including asset sales of $0.9 billion.
-22-prior year period.
Net cash used in financing activities of $26,134$9,505 million in the first ninethree months of 2006 compared to $18,9702007 increased $1,503 million in the 2005 period reflecting a higher level of purchases of shares of ExxonMobil stock.
During the thirdfirst quarter of 2006,2007, Exxon Mobil Corporation purchased 126108 million shares of its common stock for the treasury at a gross cost of $8.4$8.0 billion. These purchases included $7.0 billion to reduce the number of shares outstanding and the balance to offset shares issued in conjunction with the company benefitscompany's benefit plans and programs. Shares outstanding were reduced from 5,9455,729 million at the end of the secondfourth quarter to 5,8325,633 million at the end of the thirdfirst quarter.
Gross share purchases in the first nine months of 2006 of $21.2 billion reduced shares outstanding by 4.9 percent. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.
TheIn the first quarter of 2007 the Corporation distributed a total of $8.9$8.8 billion to shareholders, inan increase of 26 percent versus the thirdfirst quarter throughof 2006, including dividends of $1.8 billion and share purchases to reduce shares outstanding an increase of 30 percent or $2.1 billion versus 2005. For the first nine months of 2006, distributions to shareholders totaled $23.8 billion, an increase of $7.4 billion versus 2005.$7.0 billion.
Total debt of $8.6$8.8 billion at September 30, 2006 compared to $8.0March 31, 2007, increased from $8.3 billion at year-end 2005.2006. The Corporation's debt to total capital ratio was 6.76.9 percent at the end of the thirdfirst quarter of 20062007 compared to 6.56.6 percent at year-end 2005.2006.
Although the Corporation issues long-term debt from time to time and maintains a revolving commercial paper program, internally generated funds cover the majority of its financial requirements.
LitigationIn accordance with a nationalization decree issued by Venezuela's President Chavez in February, the Venezuelan National Oil Company (PdVSA) on May 1, 2007 assumed the operatorship of the Cerro Negro heavy oil development, which had been operated by an ExxonMobil affiliate that holds a 41.67 percent ownership interest in the project. The decree also requires conversion of the Cerro Negro project into a "mixed enterprise" structure and an increase in PdVSA's ownership interest in the project. Discussions with Venezuelan authorities are continuing over proposed changes to the joint venture relating to the nationalization decree. The Corporation does not expect the resolution of these issues to have a material effect upon the Corporation’s operations or financial condition. Litigation items and other contingencies are discussed in note 43 to the unaudited condensed consolidated financial statements.
The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses.
-18-
TAXES
Third Quarter | First Nine Months | First Three Months | |||||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | ||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | ||||||||||||||||||||||||||||
Taxes | |||||||||||||||||||||||||||||
Income taxes | $ | 7,688 | $ | 6,132 | $ | 22,591 | $ | 16,294 | $ | 6,784 | $ | 7,059 | |||||||||||||||||
Excise taxes | 7,764 | 8,160 | 23,639 | 22,913 | |||||||||||||||||||||||||
Sales-based taxes | 7,284 | 7,664 | |||||||||||||||||||||||||||
All other taxes and duties | 10,793 | 11,544 | 31,573 | 33,700 | 10,408 | 9,747 | |||||||||||||||||||||||
Total | $ | 26,245 | $ | 25,836 | $ | 77,803 | $ | 72,907 | $ | 24,476 | $ | 24,470 | |||||||||||||||||
Effective income tax rate | 44 | % | 42 | % | 45 | % | 42 | % | 44 | % | 47 | % |
Income, excisesales-based and all other taxes for the thirdfirst quarter of 20062007 of $26,245$24,476 million were up $409 million comparedsimilar to 2005.2006. In the thirdfirst quarter of 20062007 income tax expense was $7,688$6,784 million and the effective income tax rate was 44 percent, compared to $6,132$7,059 million and 4247 percent, respectively, in the prior year period. The changeResolution of income tax related issues resulted in charges in the totalfirst quarter of excise and all other taxes and duties reflects the tax impact of net reporting of purchases and sales of inventory with the same counterparty, only partly offset by the effects of higher prices.
-23-
Income, excise and all other taxes for the first nine months of 2006 of $77,803 million were up $4,896 million compared to 2005. In the first nine months of 2006 income tax expense was $22,591 million and the effective income tax rate was 45 percent, compared to $16,294 million and 42 percent, respectively, in the prior year period. The total of excise and all other taxes and duties was lower as effects of higher prices were more than offset by the tax impact of net reporting of purchases and sales of inventory with the same counterparty.2006.
CAPITAL AND EXPLORATION EXPENDITURES
Third Quarter | First Nine Months | First Three Months | |||||||||||||||||||||||||||
2006 | 2005 | 2006 | 2005 | 2007 | 2006 | ||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | ||||||||||||||||||||||||||||
Capital and exploration expenditures | |||||||||||||||||||||||||||||
Upstream (including exploration expenses) | $ | 4,142 | $ | 3,586 | $ | 12,161 | $ | 10,076 | $ | 3,469 | $ | 4,087 | |||||||||||||||||
Downstream | 658 | 646 | 1,981 | 1,747 | 531 | 581 | |||||||||||||||||||||||
Chemical | 195 | 162 | 525 | 485 | 219 | 144 | |||||||||||||||||||||||
Other | 66 | 20 | 119 | 60 | 3 | 12 | |||||||||||||||||||||||
Total | $ | 5,061 | $ | 4,414 | $ | 14,786 | $ | 12,368 | $ | 4,222 | $ | 4,824 |
In the first quarter, ExxonMobil continued its active efforts to increase world energy supplies.actively invest, bringing additional crude oil, finished products and natural gas to market. Spending on capital and exploration projects totaled $4.2 billion in the third quarter of 2006 was $5.1 billion, an increase of 15 percent versus 2005. In the third quarter of 2006, the results of our continuing long-term investment program yielded an additional 270 thousand oil-equivalent barrels per day of production, a 7 percent increase over the third quarter of 2005.first quarter.
In the first nine months of 2006, spending on capitalCapital and exploration projects was $14.8expenditures for full year 2006 were $19.9 billion an increase of 20 percent over 2005.
The Corporation expects the level of capital and exploration spendingare expected to be about $20 billioncontinue in 2006 compared to $18 billion in 2005.
RECENTLY ISSUED ACCOUNTING STANDARDS
In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48), "Accountingthis range for Uncertainty in Income Taxes". FIN 48 is an interpretation of FASB Statement No. 109 "Accounting for Income Taxes" and must be adopted by the Corporation no later than January 1, 2007. FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting, and disclosing in the financial statements uncertain tax positions that the company has taken or expects to take in its tax returns. The Corporation is evaluating the impact of adopting FIN 48.
In September 2006, the Financial Accounting Standards Board (FASB) issued Statement of Financial Accounting Standards No. 158, "Employers' Accounting for Defined Benefit Pension and Other Postretirement Plans", an amendment to FASB Statements No. 87, 88, 106 and 132(R). FAS 158 requires an employer to recognize the overfunded or underfunded status of a defined benefit post retirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through other non-owner changes in equity. The standard also requires disclosure in the notes to the financial statements of additional information about certain effects on net periodic benefit costs of the next fiscal year that arise from delayed recognition of gains or losses, prior service costs and transition asset or obligation. FAS 158 must be adopted by the Corporation in the financial statements for the year ending December 31, 2006. The Corporation is evaluating the impact of adopting FAS 158.
-24-
Based on December 31, 2005, pension and other postretirement plan balances, we estimate that the accrued benefit obligation would have been increased by approximately $5.8 billion. Net of the effects of changes in deferred income taxes and other balance sheet accounts, shareholders' equity would have been reduced by approximately $3.8 billion. We do not expect that the impact as of December 31, 2006 will be materially different. The standard will not have any impactseveral years. Actual spending could vary depending on the Corporation's operations, earnings or cash flows.progress of individual projects.
FORWARD-LOOKING STATEMENTS
Statements in this report relating to future plans, projections, events or conditions are forward-looking statements. Actual results, including project plans and related expenditures, resource recoveries, timing and capacities, could differ materially due to changes in long-term oil or gas prices or other market conditions affecting the oil and gas industry; adverse political events;events or disturbances; reservoir performance; the outcome of commercial negotiations; potential liability resulting from pending or future litigation; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading "Risk Factors""Factors Affecting Future Results" on our website and in Item 1A of ExxonMobil's 20052006 Form 10-K. We assume no duty to update these statements as of any future date.
-25--19-
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risks for the ninethree months ended September 30, 2006,March 31, 2007, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2005.2006.
Item 4. Controls and Procedures
As indicated in the certifications in Exhibit 31 of this report, the Corporation'sCorporation’s chief executive officer, principal financial officer and principal accounting officer have evaluated the Corporation'sCorporation’s disclosure controls and procedures as of September 30, 2006.March 31, 2007. Based on that evaluation, these officers have concluded that the Corporation'sCorporation’s disclosure controls and procedures are effective in ensuring that material information required to be disclosed by the Corporation in this quarterly reportthe reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them onin a manner that allows for timely basis.decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. There were no changes during the Corporation's last fiscal quarterquar ter that materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
ExxonMobil Oil Corporation has settled with theThe State of New York Attorney General allegations that(AG) sued a number of parties, including ExxonMobil, in New York state court, Albany County, relating to an alleged discharge of petroleum in Baldwin, New York at a former Mobil-branded service station located in Hopewell Junction (Dutchess County),and a service station owned/operated by an unrelated party. The suit (captioned "State of New York impactedv. Task Oil Corp., Exxon Mobil Corp., et al.") alleges that discharges from each service station have commingled and contaminated the soil and groundwater in the vicinity of the service station. ExxonMobil entered into a Settlement Agreement withstations. Although the State ofAG filed the complaint under the New York effective July 21, 2006,State Navigation Law against ExxonMobil and paid $720,000, of which $600,000the other parties in September 2000, no specific penalty demand was for remediation costs and prejudgment interest, and $120,000 wasmade at that time. In discovery proceedings, the AG indicated it will seek a civil penalty under New York's Navigation Law.against ExxonMobil for an amount above $100,000. The case was filedAG is also seeking compensatory damages for the costs of investigation and remed iation in New York state court, Albany County. Thisexcess of $1,500,000.
The Texas Commission on Environmental Quality (TCEQ) alleges that the Company's Beaumont refinery has violated provisions of the Texas Health and Safety Code and the Texas Water Code. Specific allegations include that the refinery failed to properly surface coat and timely inspect certain aboveground storage tanks, failed to comply with tank throughput representations in its permit, and violated certain permit limitation and reporting requirements. The TCEQ issued a Notice of Enforcement and Proposed Agreed Order on November 22, 2006. The Company disagrees with certain allegations, including that the throughput information raises a permit representation issue. The TCEQ enforcement personnel referred the matter was previously reportedto its litigation group in December, 2006. The TCEQ has proposed a penalty of $136,200 for this matter.
On March 22, 2007, ExxonMobil experienced a failure in the Company's second quarter 2006 Form 10-Q.sulfur recovery unit (SRU) at the Torrance refinery, which subsequently caused the cascading shutdown or idling of numerous other pieces of equipment and process units. The incident led to emissions of oxides of nitrogen (NOx), carbon dioxide (CO2), particulate matter (PM), oxides of sulfur (SOx), and volatile organic compounds (VOCs). In addition, similar emissions were expected to occur during the subsequent re-start process. The South Coast Air Quality Management District (AQMD) alleged that these emissions violated permit conditions and applicable AQMD rules. ExxonMobil agreed to pay a civil penalty of $250,000 and to spend a maximum of $2,000,000 for the development, implementation and completion of one or more Supplemental Environmental Project(s) intended to mitigate excess CO2, VOC and/or PM emissions resulting from operations associated with the SRU inciden t.
The Company also settled with the AQMD 23 Notices of Violation covering a number of alleged violations of air permit and air quality regulatory matters at the Torrance refinery occurring from October 12, 2005 to October 17, 2006. The settlement included the payment of a $150,000 civil penalty.
Refer to the relevant portions of note 43 on pages 97 and 108 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
-26--20-
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Note 1 -- On August 1, 2000, the Corporation announced its intention to resume purchases of shares of its common stock for the treasury both to offset shares issued in conjunction with company benefit plans and programs and to gradually reduce the number of shares outstanding. The announcement did not specify an amount or expiration date. The Corporation has continued to purchase shares since this announcement and to report purchased volumes in its quarterly earnings releases. Purchases may be made in both the open market and through negotiated transactions, and purchases may be increased, decreased or discontinued at any time without prior notice.
Item 6. Exhibits
Exhibit
Description
31.1
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief
Executive Officer.
31.2
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal
Financial Officer.
31.3
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal
Accounting Officer.
32.1
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
Executive Officer.
32.2
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Financial Officer.
32.3
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Accounting Officer.
-27--21-
EXXON MOBIL CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EXXON MOBIL CORPORATION
Date: NovemberMay 8, 20062007
By: /s/ Patrick T. Mulva
Name: Patrick T. Mulva
Title: Vice President, Controller and
Principal Accounting Officer
-28--22-
INDEX TO EXHIBITS
Exhibit
Description
31.1
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Chief Executive Officer.
31.2
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Principal Financial Officer.
31.3
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Principal Accounting Officer.
32.1
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
Executive Officer.
32.2
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal
Financial Officer.
32.3
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal
Accounting Officer.
-29--23-