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, 2007March 31, 2008
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, a non-accelerated filer, or a non-accelerated filer.smaller reporting company. See definitionthe definitions of "large accelerated filer," "accelerated filerfiler" and large accelerated filer""smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer X
Accelerated filer
Non-accelerated filer
Smaller reporting company
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, 2007March 31, 2008
Common stock, without par value 5,463,625,615 5,283,694,459
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2007MARCH 31, 2008
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
Condensed Consolidated Statement of Income
3
Three and nine months ended September 30,March 31, 2008 and 2007 and 2006
Condensed Consolidated Balance Sheet
4
As of September 30, 2007March 31, 2008 and December 31, 20062007
Condensed Consolidated Statement of Cash Flows
5
NineThree months ended September 30,March 31, 2008 and 2007 and 2006
Notes to Condensed Consolidated Financial Statements
6-166-14
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
17-2115-18
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
2219
Item 4.
Controls and Procedures
2219
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
22-2319
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
2320
Item 6.
Exhibits
2421
Signature
2522
Index to Exhibits
2623
-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, | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | |||||||||||||||||||
REVENUES AND OTHER INCOME | ||||||||||||||||||||||||
Sales and other operating revenue(1) | $ | 99,130 | $ | 96,268 | $ | 278,363 | $ | 278,609 | $ | 113,223 | $ | 84,174 | ||||||||||||
Income from equity affiliates | 2,158 | 1,778 | 6,088 | 5,265 | 2,809 | 1,915 | ||||||||||||||||||
Other income | 1,049 | 1,547 | 3,459 | 3,733 | 822 | 1,134 | ||||||||||||||||||
Total revenues and other income | 102,337 | 99,593 | 287,910 | 287,607 | 116,854 | 87,223 | ||||||||||||||||||
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COSTS AND OTHER DEDUCTIONS | ||||||||||||||||||||||||
Crude oil and product purchases | 51,973 | 49,364 | 139,642 | 140,365 | 60,971 | 40,042 | ||||||||||||||||||
Production and manufacturing expenses | 7,884 | 7,057 | 22,845 | 21,897 | 8,893 | 7,283 | ||||||||||||||||||
Selling, general and administrative expenses | 3,656 | 3,412 | 10,836 | 10,435 | 3,802 | 3,392 | ||||||||||||||||||
Depreciation and depletion | 3,159 | 2,730 | 9,095 | 8,134 | 3,104 | 2,942 | ||||||||||||||||||
Exploration expenses, including dry holes | 349 | 352 | 974 | 810 | 342 | 272 | ||||||||||||||||||
Interest expense | 73 | 281 | 272 | 553 | 130 | 103 | ||||||||||||||||||
Sales-based taxes(1) | 7,970 | 7,764 | 23,064 | 23,639 | 8,432 | 7,284 | ||||||||||||||||||
Other taxes and duties | 10,229 | 10,163 | 29,708 | 29,206 | 10,706 | 9,591 | ||||||||||||||||||
Income applicable to minority interests | 284 | 292 | 722 | 727 | 282 | 250 | ||||||||||||||||||
Total costs and other deductions | 85,577 | 81,415 | 237,158 | 235,766 | 96,662 | 71,159 | ||||||||||||||||||
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INCOME BEFORE INCOME TAXES | 16,760 | 18,178 | 50,752 | 51,841 | 20,192 | 16,064 | ||||||||||||||||||
Income taxes | 7,350 | 7,688 | 21,802 | 22,591 | 9,302 | 6,784 | ||||||||||||||||||
NET INCOME | $ | 9,410 | $ | 10,490 | $ | 28,950 | $ | 29,250 | $ | 10,890 | $ | 9,280 | ||||||||||||
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NET INCOME PER COMMON SHARE(dollars) | $ | 1.72 | $ | 1.79 | $ | 5.21 | $ | 4.91 | $ | 2.05 | $ | 1.64 | ||||||||||||
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NET INCOME PER COMMON SHARE | ||||||||||||||||||||||||
- ASSUMING DILUTION(dollars) | $ | 1.70 | $ | 1.77 | $ | 5.15 | $ | 4.86 | $ | 2.03 | $ | 1.62 | ||||||||||||
DIVIDENDS PER COMMON SHARE(dollars) | $ | 0.35 | $ | 0.32 | $ | 1.02 | $ | 0.96 | $ | 0.35 | $ | 0.32 | ||||||||||||
(1) Sales-based taxes included in sales and other | ||||||||||||||||||||||||
operating revenue | $ | 7,970 | $ | 7,764 | $ | 23,064 | $ | 23,639 | $ | 8,432 | $ | 7,284 | ||||||||||||
The information in the Notes to Condensed Consolidated Financial Statements | 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. | 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, | |||||||||||||
2007 | 2006 | 2008 | 2007 | |||||||||||||
ASSETS | ||||||||||||||||
Current assets | ||||||||||||||||
Cash and cash equivalents | $ | 31,423 | $ | 28,244 | $ | 40,913 | $ | 33,981 | ||||||||
Cash and cash equivalents - restricted (note 3) | 4,604 | 4,604 | ||||||||||||||
Marketable securities | 190 | 0 | 480 | 519 | ||||||||||||
Notes and accounts receivable - net | 31,832 | 28,942 | 36,428 | 36,450 | ||||||||||||
Inventories | ||||||||||||||||
Crude oil, products and merchandise | 10,883 | 8,979 | 13,075 | 8,863 | ||||||||||||
Materials and supplies | 2,136 | 1,735 | 2,303 | 2,226 | ||||||||||||
Prepaid taxes and expenses | 4,179 | 3,273 | 4,559 | 3,924 | ||||||||||||
Total current assets | 85,247 | 75,777 | 97,758 | 85,963 | ||||||||||||
Property, plant and equipment - net | 119,102 | 113,687 | 122,935 | 120,869 | ||||||||||||
Investments and other assets | 32,312 | 29,551 | 37,509 | 35,250 | ||||||||||||
TOTAL ASSETS | $ | 236,661 | $ | 219,015 | $ | 258,202 | $ | 242,082 | ||||||||
LIABILITIES | ||||||||||||||||
Current liabilities | ||||||||||||||||
Notes and loans payable | $ | 2,095 | $ | 1,702 | $ | 2,771 | $ | 2,383 | ||||||||
Accounts payable and accrued liabilities | 43,525 | 39,082 | 53,613 | 45,275 | ||||||||||||
Income taxes payable | 10,300 | 8,033 | 14,599 | 10,654 | ||||||||||||
Total current liabilities | 55,920 | 48,817 | 70,983 | 58,312 | ||||||||||||
Long-term debt | 6,896 | 6,645 | 7,235 | 7,183 | ||||||||||||
Deferred income tax liabilities | 22,329 | 20,851 | 24,008 | 22,899 | ||||||||||||
Other long-term liabilities | 32,913 | 28,858 | 32,837 | 31,926 | ||||||||||||
TOTAL LIABILITIES | 118,058 | 105,171 | 135,063 | 120,320 | ||||||||||||
Commitments and contingencies (note 3) | ||||||||||||||||
SHAREHOLDERS' EQUITY | ||||||||||||||||
Common stock, without par value: | ||||||||||||||||
Authorized: 9,000 million shares | ||||||||||||||||
Issued: 8,019 million shares | 4,988 | 4,786 | 4,745 | 4,933 | ||||||||||||
Earnings reinvested | 218,761 | 195,207 | 237,529 | 228,518 | ||||||||||||
Accumulated other comprehensive income | ||||||||||||||||
Cumulative foreign exchange translation adjustment | 7,433 | 3,733 | 9,449 | 7,972 | ||||||||||||
Postretirement benefits reserves adjustment | (6,584 | ) | (6,495 | ) | (5,945 | ) | (5,983 | ) | ||||||||
Common stock held in treasury: | ||||||||||||||||
2,556 million shares at September 30, 2007 | (105,995 | ) | ||||||||||||||
2,290 million shares at December 31, 2006 | (83,387 | ) | ||||||||||||||
2,736 million shares at March 31, 2008 | (122,639 | ) | ||||||||||||||
2,637 million shares at December 31, 2007 | (113,678 | ) | ||||||||||||||
TOTAL SHAREHOLDERS' EQUITY | 118,603 | 113,844 | 123,139 | 121,762 | ||||||||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 236,661 | $ | 219,015 | $ | 258,202 | $ | 242,082 | ||||||||
The number of shares of common stock issued and outstanding at September 30, 2007 and | ||||||||||||||||
December 31, 2006 were 5,463,625,615 and 5,728,702,212, respectively. | ||||||||||||||||
The number of shares of common stock issued and outstanding at March 31, 2008 and | The number of shares of common stock issued and outstanding at March 31, 2008 and | |||||||||||||||
December 31, 2007 were 5,283,694,459 and 5,381,795,265, respectively. | December 31, 2007 were 5,283,694,459 and 5,381,795,265, respectively. | |||||||||||||||
The information in the Notes to Condensed Consolidated Financial Statements | 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. | is an integral part of these statements. |
-4-
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Nine Months Ended | Three Months Ended | ||||||||||||||||||
September 30, | March 31, | ||||||||||||||||||
2007 | 2006 | 2008 | 2007 | ||||||||||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | CASH FLOWS FROM OPERATING ACTIVITIES | ||||||||||||||||||
Net income | Net income | $ | 28,950 | $ | 29,250 | $ | 10,890 | $ | 9,280 | ||||||||||
Depreciation and depletion | Depreciation and depletion | 9,095 | 8,134 | 3,104 | 2,942 | ||||||||||||||
Changes in operational working capital, excluding cash and debt | Changes in operational working capital, excluding cash and debt | 1,283 | 3,836 | 7,803 | 1,843 | ||||||||||||||
All other items - net | All other items - net | 1,339 | (796 | ) | (377 | ) | 221 | ||||||||||||
Net cash provided by operating activities | Net cash provided by operating activities | 40,667 | 40,424 | 21,420 | 14,286 | ||||||||||||||
CASH FLOWS FROM INVESTING ACTIVITIES | CASH FLOWS FROM INVESTING ACTIVITIES | ||||||||||||||||||
Additions to property, plant and equipment | Additions to property, plant and equipment | (10,827 | ) | (11,301 | ) | (3,979 | ) | (3,106 | ) | ||||||||||
Sales of subsidiaries, investments, and property, plant and equipment | Sales of subsidiaries, investments, and property, plant and equipment | 2,422 | 2,328 | 413 | 538 | ||||||||||||||
Other investing activities - net | Other investing activities - net | (1,660 | ) | (1,791 | ) | (734 | ) | (670 | ) | ||||||||||
Net cash used in investing activities | Net cash used in investing activities | (10,065 | ) | (10,764 | ) | (4,300 | ) | (3,238 | ) | ||||||||||
CASH FLOWS FROM FINANCING ACTIVITIES | CASH FLOWS FROM FINANCING ACTIVITIES | ||||||||||||||||||
Additions to long-term debt | Additions to long-term debt | 104 | 123 | 35 | 93 | ||||||||||||||
Reductions in long-term debt | Reductions in long-term debt | (111 | ) | (31 | ) | (46 | ) | (36 | ) | ||||||||||
Additions/(reductions) in short-term debt - net | Additions/(reductions) in short-term debt - net | 186 | 245 | 190 | 274 | ||||||||||||||
Cash dividends to ExxonMobil shareholders | Cash dividends to ExxonMobil shareholders | (5,718 | ) | (5,775 | ) | (1,879 | ) | (1,825 | ) | ||||||||||
Cash dividends to minority interests | Cash dividends to minority interests | (252 | ) | (207 | ) | (105 | ) | (74 | ) | ||||||||||
Changes in minority interests and sales/(purchases) | Changes in minority interests and sales/(purchases) | ||||||||||||||||||
of affiliate stock | of affiliate stock | (510 | ) | (380 | ) | (214 | ) | (149 | ) | ||||||||||
Tax benefits related to stock-based awards | 356 | 270 | |||||||||||||||||
Common stock acquired | Common stock acquired | (23,884 | ) | (21,208 | ) | (9,465 | ) | (7,960 | ) | ||||||||||
Common stock sold | Common stock sold | 891 | 829 | 131 | 172 | ||||||||||||||
Net cash used in financing activities | Net cash used in financing activities | (28,938 | ) | (26,134 | ) | (11,353 | ) | (9,505 | ) | ||||||||||
Effects of exchange rate changes on cash | Effects of exchange rate changes on cash | 1,515 | 537 | 1,165 | 207 | ||||||||||||||
Increase/(decrease) in cash and cash equivalents | Increase/(decrease) in cash and cash equivalents | 3,179 | 4,063 | 6,932 | 1,750 | ||||||||||||||
Cash and cash equivalents at beginning of period | Cash and cash equivalents at beginning of period | 28,244 | 28,671 | 33,981 | 28,244 | ||||||||||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 31,423 | $ | 32,734 | $ | 40,913 | $ | 29,994 | ||||||||||
SUPPLEMENTAL DISCLOSURES | SUPPLEMENTAL DISCLOSURES | ||||||||||||||||||
Income taxes paid | Income taxes paid | $ | 17,947 | $ | 18,637 | $ | 4,849 | $ | 3,998 | ||||||||||
Cash interest paid | Cash interest paid | $ | 376 | $ | 1,099 | $ | 184 | $ | 137 | ||||||||||
The information in the Notes to Condensed Consolidated Financial Statements | |||||||||||||||||||
is an integral part of these statements. | |||||||||||||||||||
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 20062007 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.
2.
Accounting Change for Uncertainty in Income TaxesFair Value Measurements
Effective January 1, 2007,2008, the Corporation adopted the Financial Accounting Standards Board’sBoard's (FASB) Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes". FIN 48 is an interpretation of FASB Statement No. 109, "Accounting157 (FAS 157), “Fair Value Measurements” for Income Taxes",financial assets and prescribesliabilities that are measured at fair value and nonfinancial assets and liabilities that are measured at fair value on a comprehensive modelrecurring basis. FAS 157 defines fair value, establishes a framework for recognizing, measuring presentingfair value when an entity is required to use a fair value measure for recognition or disclosure purposes and disclosingexpands the disclosures about fair value measurements. The initial application of FAS 157 is limited to the Corporation's investments in derivative instruments and some debt and equity securities. The fair value measurements for these instruments are based on quoted prices or observable market inputs. The value of these instruments is immaterial to the Corporation's financial statements uncertain tax positions thatand the related gains or losses from periodic measurement at fair value are de minimis.
On January 1, 2009, the Corporation has taken or expectswill adopt FAS 157 for nonfinancial assets and liabilities that are not measured at fair value on a recurring basis. The application of FAS 157 to take in its income tax returns. Upon the adoption of FIN 48, the Corporation recognized a transition gain of $267 million in shareholders’ equity. The gain reflectedCorporation's nonfinancial assets and liabilities will mostly be limited to the recognition and measurement of several refund claims, partly offset by increased liability reserves.
nonmonetary exchange transactions, asset retirement obligations and asset impairments. The Corporation 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 the 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 next 12 months. Given the long time periods involved in resolving individual tax positions, the Corporation does not expect that the recognition of unrecognized tax benefits willadoption to have a material impact on the Corporation’s effective income tax rate in any given year.
The unrecognized tax benefits described above will not be included in the Corporation's annual Form 10-K contractual obligations table because the Corporation is unable to make reasonably reliable estimates of the timing of cash settlements with the respective taxing authorities. The total amount of unrecognized tax benefits will be disclosed in a footnote to the contractual obligations table.
The following table summarizes the tax years that remain subject to examination by major tax jurisdiction:
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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-financial statements.
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.lawsuits. 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 o utcomeoutcome is reasonably possible and which are significant,sig nificant, 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.
-6-
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. All 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. The most recent District Court judgment for punitive damages was for $4.5 billion plus interest an dand was entered in JanuaryJanua ry 2004. The Corporation posted a $5.4 billion letter of credit. ExxonMobil and the plaintiffs appealed this decision to the Ninth Circuit, which ruled on December 22, 2006, that the award be reduced to $2.5 billion. On January 12, 2007, ExxonMobil petitioned the Ninth Circuit Court of Appeals for a rehearing en banc of its appeal. On May 23, 2007, with two dissenting opinions, the Ninth Circuit determined not to re-hear ExxonMobil'sExxonMobil’s appeal before the full court. ExxonMobil filed a petition for writ of certiorari to the U.S. Supreme Court on August 20, 2007. On October 29, 2007, the U.S. Supreme Court granted ExxonMobil'sExxonMobil’s petition for a writ of certiorari. Oral argument was held on February 27, 2008. 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. 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 appealed the decision to the Alabama Supreme Court. On November 1, 2007, the Alabama Supreme Court reversed the trial court's fraud judgment and instructed the district court to enter judgment for ExxonMobil, eliminating the punitive damage award. The Court also ruled in ExxonMobil's favor on some of the disputed lease issues, reducing the compensatory award to $52 million. 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 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 Condensed 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. The Company will pursue the cancellation of the bond and the release of the pledged collateral.
-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 appealed the punitive damage award to the U.S. Supreme Court, which on February 26, 2007, vacated the judgment and remanded the case to the Louisiana Fourth Circuit Court of Appeals for reconsideration in light of the recent U.S. Supreme Court decision inWilliams v. Phillip Morris USA. On August 8, 2007, the Fourth Circuit issued its decision on remand and declined to reduce the punitive damage award. ExxonMobil is seeking further review in the Louisiana Supreme Court.
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, 2007 | ||||||||||||||||||
Equity | Other | |||||||||||||||||
Company | Third Party | |||||||||||||||||
Obligations | Obligations | Total | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||
Total guarantees | $ | 3,796 | $ | 697 | $ | 4,493 |
As of March 31, 2008 | ||||||||||||||||||
Equity | Other | |||||||||||||||||
Company | Third Party | |||||||||||||||||
Obligations | Obligations | Total | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||
Total guarantees | $ | 6,466 | $ | 775 | $ | 7,241 |
The Corporation and certain of its consolidated subsidiaries were contingently liable at September 30, 2007,March 31, 2008, for $4,493$7,241 million, primarily relating to guarantees for notes, loans and performance under contracts. Included in this amount were guarantees by consolidated affiliates of $3,796$6,466 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, 2007,March 31, 2008, 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 ChavezVenezuela’s president in February of this year,2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates (ExxonMobil) holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a "mixed enterprise" structure“mixed enterprise” and an increase in PdVSA'sPdVSA’s or one of its affiliate'saffiliate’s ownership interest in the Project, with the stipulation that if an agreement was not reachedExxonMobil refused to accept the terms for the formation of the mixed enterprise duringwithin a specified period of time, the government would "directly take on“directly assume the activities"activities” carried out by the joint venture. ExxonMobil and Venezuela were not ablerefused to reach agreement onaccede to the formation of a mixed enterpriseterms proffered by PdVSA, and on June 27, 2007, the government expropriated ExxonMobil'sExxonMobil’s 41.67 percent interest in the Cerro Negro Project.
Subsequent
-7-
To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporation'sCorporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation'sCorporation’s operations or financial condition. At the time the assets were expropriated, ExxonMobil'sExxonMobil’s remaining net book investment in Cerro Negro producing assets was about $750 million.
-8-
4.
Comprehensive Income
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | |||||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||||||||||
Net income | $ | 9,410 | $ | 10,490 | $ | 28,950 | $ | 29,250 | $ | 10,890 | $ | 9,280 | ||||||||||||||||||||
Other comprehensive income | ||||||||||||||||||||||||||||||||
(net of income taxes) | ||||||||||||||||||||||||||||||||
Foreign exchange translation adjustment | 2,052 | 43 | 3,700 | 1,933 | 1,477 | 423 | ||||||||||||||||||||||||||
Postretirement benefits reserves adjustment | ||||||||||||||||||||||||||||||||
(excluding amortization) | (119 | ) | 0 | (694 | ) | 0 | (151 | ) | (408 | ) | ||||||||||||||||||||||
Amortization of postretirement benefits reserves | ||||||||||||||||||||||||||||||||
adjustment included in net periodic benefit costs | 190 | 0 | 605 | 0 | 189 | 201 | ||||||||||||||||||||||||||
Minimum pension liability adjustment | ||||||||||||||||||||||||||||||||
(before December 31, 2006, adoption of FAS 158) | 0 | (8 | ) | 0 | (106 | ) | ||||||||||||||||||||||||||
Total comprehensive income | $ | 11,533 | $ | 10,525 | $ | 32,561 | $ | 31,077 | $ | 12,405 | $ | 9,496 |
5.
Earnings Per Share
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | |||||||||||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||||||||||
Net income (millions of dollars) | $ | 9,410 | $ | 10,490 | $ | 28,950 | $ | 29,250 | $ | 10,890 | $ | 9,280 | ||||||||||||
| ||||||||||||||||||||||||
Weighted average number of common shares | ||||||||||||||||||||||||
outstanding (millions of shares) | 5,470 | 5,861 | 5,559 | 5,967 | 5,301 | 5,650 | ||||||||||||||||||
Net income per common share (dollars) | $ | 1.72 | $ | 1.79 | $ | 5.21 | $ | 4.91 | $ | 2.05 | $ | 1.64 | ||||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||||||||||||||
- ASSUMING DILUTION | ||||||||||||||||||||||||
Net income (millions of dollars) | $ | 9,410 | $ | 10,490 | $ | 28,950 | $ | 29,250 | $ | 10,890 | $ | 9,280 | ||||||||||||
Weighted average number of common shares | ||||||||||||||||||||||||
outstanding (millions of shares) | 5,470 | 5,861 | 5,559 | 5,967 | 5,301 | 5,650 | ||||||||||||||||||
Effect of employee stock-based awards | 66 | 61 | 61 | 55 | 61 | 64 | ||||||||||||||||||
Weighted average number of common shares | ||||||||||||||||||||||||
outstanding - assuming dilution | 5,536 | 5,922 | 5,620 | 6,022 | 5,362 | 5,714 | ||||||||||||||||||
Net income per common share | ||||||||||||||||||||||||
- assuming dilution (dollars) | $ | 1.70 | $ | 1.77 | $ | 5.15 | $ | 4.86 | $ | 2.03 | $ | 1.62 |
-9--8-
6.
Pension and Other Postretirement Benefits
Three Months Ended | Nine Months Ended | |||||||||||
September 30, | September 30, | |||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||
(millions of dollars) | ||||||||||||
Pension Benefits - U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 89 | $ | 85 | $ | 279 | $ | 253 | ||||
Interest cost | 172 | 159 | 516 | 476 | ||||||||
Expected return on plan assets | (212 | ) | (157 | ) | (634 | ) | (469 | ) | ||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 67 | 69 | 201 | 205 | ||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | 48 | 39 | 143 | 118 | ||||||||
Net benefit cost | $ | 164 | $ | 195 | $ | 505 | $ | 583 | ||||
Pension Benefits - Non-U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 109 | $ | 109 | $ | 330 | $ | 319 | ||||
Interest cost | 261 | 225 | 745 | 661 | ||||||||
Expected return on plan assets | (283 | ) | (247 | ) | (816 | ) | (729 | ) | ||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 108 | 131 | 331 | 384 | ||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | (13 | ) | 10 | (4 | ) | 12 | ||||||
Net benefit cost | $ | 182 | $ | 228 | $ | 586 | $ | 647 | ||||
Other Postretirement Benefits | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 26 | $ | 19 | $ | 83 | $ | 56 | ||||
Interest cost | 99 | 79 | 309 | 231 | ||||||||
Expected return on plan assets | (11 | ) | (10 | ) | (34 | ) | (30 | ) | ||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 86 | 57 | 244 | 163 | ||||||||
Net benefit cost | $ | 200 | $ | 145 | $ | 602 | $ | 420 |
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
(millions of dollars) | ||||||||||||
Pension Benefits - U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 95 | $ | 97 | ||||||||
Interest cost | 182 | 172 | ||||||||||
Expected return on plan assets | (229 | ) | (210 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 59 | 67 | ||||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | 44 | 47 | ||||||||||
Net benefit cost | $ | 151 | $ | 173 | ||||||||
Pension Benefits - Non-U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 113 | $ | 109 | ||||||||
Interest cost | 301 | 237 | ||||||||||
Expected return on plan assets | (318 | ) | (263 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 101 | 112 | ||||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | 0 | 0 | ||||||||||
Net benefit cost | $ | 197 | $ | 195 | ||||||||
Other Postretirement Benefits | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 29 | $ | 27 | ||||||||
Interest cost | 108 | 112 | ||||||||||
Expected return on plan assets | (12 | ) | (15 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 84 | 78 | ||||||||||
Net benefit cost | $ | 209 | $ | 202 |
-10--9-
7.
Disclosures about Segments and Related Information
Three Months Ended | Nine Months Ended | Three Months Ended | ||||||||||||||||||||||
September 30, | September 30, | March 31, | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | |||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||
EARNINGS AFTER INCOME TAX | ||||||||||||||||||||||||
Upstream | ||||||||||||||||||||||||
United States | $ | 1,196 | $ | 1,192 | $ | 3,595 | $ | 4,116 | $ | 1,631 | $ | 1,177 | ||||||||||||
Non-U.S. | 5,103 | 5,301 | 14,698 | 15,894 | 7,154 | 4,864 | ||||||||||||||||||
Downstream | ||||||||||||||||||||||||
United States | 914 | 1,272 | 3,498 | 3,305 | 398 | 839 | ||||||||||||||||||
Non-U.S. | 1,087 | 1,466 | 3,808 | 3,189 | 768 | 1,073 | ||||||||||||||||||
Chemical | ||||||||||||||||||||||||
United States | 296 | 458 | 846 | 976 | 284 | 346 | ||||||||||||||||||
Non-U.S. | 906 | 893 | 2,605 | 2,164 | 744 | 890 | ||||||||||||||||||
All other | (92 | ) | (92 | ) | (100 | ) | (394 | ) | (89 | ) | 91 | |||||||||||||
Corporate total | $ | 9,410 | $ | 10,490 | $ | 28,950 | $ | 29,250 | $ | 10,890 | $ | 9,280 | ||||||||||||
SALES AND OTHER OPERATING REVENUE(1) | SALES AND OTHER OPERATING REVENUE(1) | SALES AND OTHER OPERATING REVENUE(1) | ||||||||||||||||||||||
Upstream | ||||||||||||||||||||||||
United States | $ | 1,311 | $ | 1,514 | $ | 4,109 | $ | 4,691 | $ | 1,764 | $ | 1,362 | ||||||||||||
Non-U.S. | 5,136 | 6,059 | 15,932 | 21,860 | 8,399 | 5,493 | ||||||||||||||||||
Downstream | ||||||||||||||||||||||||
United States | 26,243 | 25,068 | 73,148 | 71,852 | 28,458 | 21,260 | ||||||||||||||||||
Non-U.S. | 57,233 | 54,602 | 158,346 | 154,583 | 64,517 | 47,641 | ||||||||||||||||||
Chemical | ||||||||||||||||||||||||
United States | 3,453 | 3,565 | 10,102 | 10,050 | 3,652 | 3,189 | ||||||||||||||||||
Non-U.S. | 5,743 | 5,454 | 16,707 | 15,559 | 6,429 | 5,224 | ||||||||||||||||||
All other | 11 | 6 | 19 | 14 | 4 | 5 | ||||||||||||||||||
Corporate total | $ | 99,130 | $ | 96,268 | $ | 278,363 | $ | 278,609 | $ | 113,223 | $ | 84,174 | ||||||||||||
(1) Includes sales-based taxes | ||||||||||||||||||||||||
INTERSEGMENT REVENUE | ||||||||||||||||||||||||
Upstream | ||||||||||||||||||||||||
United States | $ | 1,868 | $ | 1,675 | $ | 5,211 | $ | 5,614 | $ | 2,561 | $ | 1,563 | ||||||||||||
Non-U.S. | 12,181 | 11,588 | 34,446 | 30,812 | 14,881 | 10,595 | ||||||||||||||||||
Downstream | ||||||||||||||||||||||||
United States | 3,819 | 3,619 | 10,162 | 9,695 | 3,861 | 2,782 | ||||||||||||||||||
Non-U.S. | 13,225 | 12,955 | 37,051 | 36,287 | 16,543 | 10,941 | ||||||||||||||||||
Chemical | ||||||||||||||||||||||||
United States | 2,462 | 2,067 | 6,376 | 5,990 | 2,428 | 1,697 | ||||||||||||||||||
Non-U.S. | 2,030 | 1,874 | 5,718 | 5,272 | 2,432 | 1,522 | ||||||||||||||||||
All other | 70 | 65 | 239 | 197 | 67 | 79 |
-10-
8.
Accounting for Suspended Exploratory Well Costs
For the category of exploratory well costs at year-end 2006 that were suspended more than one year, a total of $46 million was expensed in the first nine months of 2007.
-11-
9.
Condensed Consolidating Financial Information Related to Guaranteed Securities Issued by Subsidiaries
Exxon Mobil Corporation has fully and unconditionally guaranteed the deferred interest debentures due 2012 ($1,6831,777 million long-term at September 30, 2007)March 31, 2008) and the debt securities due 2007-20112008-2011 ($5239 million long-term and $13 million short-term) of SeaRiver Maritime Financial Holdings, Inc., a 100 percent owned subsidiary of Exxon Mobil Corporation.
The following condensed consolidating financial information is provided for Exxon Mobil Corporation, as guarantor, and for SeaRiver Maritime Financial Holdings, Inc., as issuer, as an alternative to providing separate financial statements for the issuer. The accounts of Exxon Mobil 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 | Financial | and | Corporation | Financial | and | |||||||||||||||||||||||||||||||||||||||||||||||||||
Parent | Holdings, | All Other | Eliminating | Parent | Holdings | All Other | Eliminating | |||||||||||||||||||||||||||||||||||||||||||||||||
Guarantor | 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, 2007 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Condensed consolidated statement of income for three months ended March 31, 2008 | Condensed consolidated statement of income for three months ended March 31, 2008 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Sales and other operating revenue, | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
including sales-based taxes | $ | 4,064 | $ | - | $ | 95,066 | $ | - | $ | 99,130 | ||||||||||||||||||||||||||||||||||||||||||||||
Sales and other operating revenue, including sales-based taxes | $ | 4,515 | $ | - | $ | 108,708 | $ | - | $ | 113,223 | ||||||||||||||||||||||||||||||||||||||||||||||
Income from equity affiliates | 9,588 | (2 | ) | 2,148 | (9,576 | ) | 2,158 | 11,068 | 1 | 2,798 | (11,058 | ) | 2,809 | |||||||||||||||||||||||||||||||||||||||||||
Other income | 75 | - | 974 | - | 1,049 | 25 | - | 797 | - | 822 | ||||||||||||||||||||||||||||||||||||||||||||||
Intercompany revenue | 10,424 | 27 | 92,089 | (102,540 | ) | - | 11,600 | 17 | 112,600 | (124,217 | ) | - | ||||||||||||||||||||||||||||||||||||||||||||
Total revenues and other income | 24,151 | 25 | 190,277 | (112,116 | ) | 102,337 | 27,208 | 18 | 224,903 | (135,275 | ) | 116,854 | ||||||||||||||||||||||||||||||||||||||||||||
Costs and other deductions | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Crude oil and product purchases | 10,088 | - | 138,100 | (96,215 | ) | 51,973 | 11,850 | - | 167,242 | (118,121 | ) | 60,971 | ||||||||||||||||||||||||||||||||||||||||||||
Production and manufacturing | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | 1,758 | - | 7,476 | (1,350 | ) | 7,884 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
expenses | 629 | - | 3,201 | (174 | ) | 3,656 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Production and manufacturing expenses | 1,911 | - | 8,329 | (1,347 | ) | 8,893 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Selling, general and administrative expenses | 702 | - | 3,313 | (213 | ) | 3,802 | ||||||||||||||||||||||||||||||||||||||||||||||||||
Depreciation and depletion | 455 | - | 2,704 | - | 3,159 | 393 | - | 2,711 | - | 3,104 | ||||||||||||||||||||||||||||||||||||||||||||||
Exploration expenses, including dry | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||
holes | 73 | - | 276 | - | 349 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Exploration expenses, including dry holes | 79 | - | 263 | - | 342 | |||||||||||||||||||||||||||||||||||||||||||||||||||
Interest expense | 1,550 | 50 | 3,492 | (5,019 | ) | 73 | 1,194 | 53 | 3,510 | (4,627 | ) | 130 | ||||||||||||||||||||||||||||||||||||||||||||
Sales-based taxes | - | - | 7,970 | - | 7,970 | - | - | 8,432 | - | 8,432 | ||||||||||||||||||||||||||||||||||||||||||||||
Other taxes and duties | 11 | - | 10,218 | - | 10,229 | 15 | - | 10,691 | - | 10,706 | ||||||||||||||||||||||||||||||||||||||||||||||
Income applicable to minority interests | - | - | 284 | - | 284 | - | - | 282 | - | 282 | ||||||||||||||||||||||||||||||||||||||||||||||
Total costs and other deductions | 14,564 | 50 | 173,721 | (102,758 | ) | 85,577 | 16,144 | 53 | 204,773 | (124,308 | ) | 96,662 | ||||||||||||||||||||||||||||||||||||||||||||
Income before income taxes | 9,587 | (25 | ) | 16,556 | (9,358 | ) | 16,760 | 11,064 | (35 | ) | 20,130 | (10,967 | ) | 20,192 | ||||||||||||||||||||||||||||||||||||||||||
Income taxes | 177 | (9 | ) | 7,182 | - | 7,350 | 174 | (12 | ) | 9,140 | - | 9,302 | ||||||||||||||||||||||||||||||||||||||||||||
Net income | $ | 9,410 | $ | (16 | ) | $ | 9,374 | $ | (9,358 | ) | $ | 9,410 | $ | 10,890 | $ | (23 | ) | $ | 10,990 | $ | (10,967 | ) | $ | 10,890 |
-11-
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, 2007 | ||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||
Sales and other operating revenue, including sales-based taxes | $ | 3,857 | $ | - | $ | 80,317 | $ | - | $ | 84,174 | ||||||||||||||||||
Income from equity affiliates | 9,167 | 7 | 1,904 | (9,163 | ) | 1,915 | ||||||||||||||||||||||
Other income | 222 | - | 912 | - | 1,134 | |||||||||||||||||||||||
Intercompany revenue | 8,281 | 26 | 77,889 | (86,196 | ) | - | ||||||||||||||||||||||
Total revenues and other income | 21,527 | 33 | 161,022 | (95,359 | ) | 87,223 | ||||||||||||||||||||||
Costs and other deductions | ||||||||||||||||||||||||||||
Crude oil and product purchases | 7,880 | - | 112,246 | (80,084 | ) | 40,042 | ||||||||||||||||||||||
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 | 388 | - | 2,554 | - | 2,942 | |||||||||||||||||||||||
Exploration expenses, including dry holes | 100 | - | 172 | - | 272 | |||||||||||||||||||||||
Interest expense | 1,446 | 50 | 3,488 | (4,881 | ) | 103 | ||||||||||||||||||||||
Sales-based taxes | - | - | 7,284 | - | 7,284 | |||||||||||||||||||||||
Other taxes and duties | 13 | - | 9,578 | - | 9,591 | |||||||||||||||||||||||
Income applicable to minority interests | - | - | 250 | - | 250 | |||||||||||||||||||||||
Total costs and other deductions | 12,132 | 50 | 145,350 | (86,373 | ) | 71,159 | ||||||||||||||||||||||
Income before income taxes | 9,395 | (17 | ) | 15,672 | (8,986 | ) | 16,064 | |||||||||||||||||||||
Income taxes | 115 | (8 | ) | 6,677 | - | 6,784 | ||||||||||||||||||||||
Net income | $ | 9,280 | $ | (9 | ) | $ | 8,995 | $ | (8,986 | ) | $ | 9,280 |
-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 September 30, 2006 | ||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||
Sales and other operating revenue, | ||||||||||||||||||||||||||||
including sales-based taxes | $ | 4,286 | $ | - | $ | 91,982 | $ | - | $ | 96,268 | ||||||||||||||||||
Income from equity affiliates | 10,302 | (5 | ) | 1,774 | (10,293 | ) | 1,778 | |||||||||||||||||||||
Other income | 314 | - | 1,233 | - | 1,547 | |||||||||||||||||||||||
Intercompany revenue | 10,558 | 26 | 89,101 | (99,685 | ) | - | ||||||||||||||||||||||
Total revenues and other income | 25,460 | 21 | 184,090 | (109,978 | ) | 99,593 | ||||||||||||||||||||||
Costs and other deductions | ||||||||||||||||||||||||||||
Crude oil and product purchases | 10,187 | - | 132,976 | (93,799 | ) | 49,364 | ||||||||||||||||||||||
Production and manufacturing | ||||||||||||||||||||||||||||
expenses | 1,799 | - | 6,464 | (1,206 | ) | 7,057 | ||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||
expenses | 584 | - | 2,987 | (159 | ) | 3,412 | ||||||||||||||||||||||
Depreciation and depletion | 374 | - | 2,356 | - | 2,730 | |||||||||||||||||||||||
Exploration expenses, including dry | ||||||||||||||||||||||||||||
holes | 60 | - | 292 | - | 352 | |||||||||||||||||||||||
Interest expense | 1,327 | 46 | 3,439 | (4,531 | ) | 281 | ||||||||||||||||||||||
Sales-based taxes | - | - | 7,764 | - | 7,764 | |||||||||||||||||||||||
Other taxes and duties | 10 | - | 10,153 | - | 10,163 | |||||||||||||||||||||||
Income applicable to minority interests | - | - | 292 | - | 292 | |||||||||||||||||||||||
Total costs and other deductions | 14,341 | 46 | 166,723 | (99,695 | ) | 81,415 | ||||||||||||||||||||||
Income before income taxes | 11,119 | (25 | ) | 17,367 | (10,283 | ) | 18,178 | |||||||||||||||||||||
Income taxes | 629 | (7 | ) | 7,066 | - | 7,688 | ||||||||||||||||||||||
Net income | $ | 10,490 | $ | (18 | ) | $ | 10,301 | $ | (10,283 | ) | $ | 10,490 |
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, 2008 | ||||||||||||||||||||
Cash and cash equivalents | $ | 294 | $ | - | $ | 40,619 | $ | - | $ | 40,913 | ||||||||||
Marketable securities | - | - | 480 | - | 480 | |||||||||||||||
Notes and accounts receivable - net | 3,591 | 8 | 34,204 | (1,375 | ) | 36,428 | ||||||||||||||
Inventories | 1,479 | - | 13,899 | - | 15,378 | |||||||||||||||
Prepaid taxes and expenses | 456 | - | 4,103 | - | 4,559 | |||||||||||||||
Total current assets | 5,820 | 8 | 93,305 | (1,375 | ) | 97,758 | ||||||||||||||
Property, plant and equipment - net | 16,222 | - | 106,713 | - | 122,935 | |||||||||||||||
Investments and other assets | 220,181 | 474 | 430,485 | (613,631 | ) | 37,509 | ||||||||||||||
Intercompany receivables | 11,511 | 2,015 | 467,804 | (481,330 | ) | - | ||||||||||||||
Total assets | $ | 253,734 | $ | 2,497 | $ | 1,098,307 | $ | (1,096,336 | ) | $ | 258,202 | |||||||||
Notes and loan payables | $ | 2 | $ | 13 | $ | 2,756 | $ | - | $ | 2,771 | ||||||||||
Accounts payable and accrued liabilities | 3,287 | - | 50,326 | - | 53,613 | |||||||||||||||
Income taxes payable | - | - | 15,974 | (1,375 | ) | 14,599 | ||||||||||||||
Total current liabilities | 3,289 | 13 | 69,056 | (1,375 | ) | 70,983 | ||||||||||||||
Long-term debt | 276 | 1,816 | 5,143 | - | 7,235 | |||||||||||||||
Deferred income tax liabilities | 1,774 | 206 | 22,028 | - | 24,008 | |||||||||||||||
Other long-term liabilities | 11,410 | - | 21,427 | - | 32,837 | |||||||||||||||
Intercompany payables | 113,846 | 383 | 367,101 | (481,330 | ) | - | ||||||||||||||
Total liabilities | 130,595 | 2,418 | 484,755 | (482,705 | ) | 135,063 | ||||||||||||||
Earnings reinvested | 237,529 | (490 | ) | 124,482 | (123,992 | ) | 237,529 | |||||||||||||
Other shareholders' equity | (114,390 | ) | 569 | 489,070 | (489,639 | ) | (114,390 | ) | ||||||||||||
Total shareholders' equity | 123,139 | 79 | 613,552 | (613,631 | ) | 123,139 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 253,734 | $ | 2,497 | $ | 1,098,307 | $ | (1,096,336 | ) | $ | 258,202 |
Condensed consolidated statement of income for nine months ended September 30, 2007 | ||||||||||||||||
Revenues and other income | ||||||||||||||||
Sales and other operating revenue, | ||||||||||||||||
including sales-based taxes | $ | 12,063 | $ | - | $ | 266,300 | $ | - | $ | 278,363 | ||||||
Income from equity affiliates | 28,906 | 4 | 6,051 | (28,873 | ) | 6,088 | ||||||||||
Other income | 357 | - | 3,102 | - | 3,459 | |||||||||||
Intercompany revenue | 28,172 | 78 | 255,917 | (284,167 | ) | - | ||||||||||
Total revenues and other income | 69,498 | 82 | 531,370 | (313,040 | ) | 287,910 | ||||||||||
Costs and other deductions | ||||||||||||||||
Crude oil and product purchases | 26,587 | - | 378,106 | (265,051 | ) | 139,642 | ||||||||||
Production and manufacturing | ||||||||||||||||
expenses | 5,305 | - | 21,423 | (3,883 | ) | �� | 22,845 | |||||||||
Selling, general and administrative | ||||||||||||||||
expenses | 1,901 | - | 9,498 | (563 | ) | 10,836 | ||||||||||
Depreciation and depletion | 1,240 | - | 7,855 | - | 9,095 | |||||||||||
Exploration expenses, including dry | ||||||||||||||||
holes | 215 | - | 759 | - | 974 | |||||||||||
Interest expense | 4,566 | 151 | 10,824 | (15,269 | ) | 272 | ||||||||||
Sales-based taxes | - | - | 23,064 | - | 23,064 | |||||||||||
Other taxes and duties | 35 | - | 29,673 | - | 29,708 | |||||||||||
Income applicable to minority interests | - | - | 722 | - | 722 | |||||||||||
Total costs and other deductions | 39,849 | 151 | 481,924 | (284,766 | ) | 237,158 | ||||||||||
Income before income taxes | 29,649 | (69 | ) | 49,446 | (28,274 | ) | 50,752 | |||||||||
Income taxes | 699 | (26 | ) | 21,129 | - | 21,802 | ||||||||||
Net income | $ | 28,950 | $ | (43 | ) | $ | 28,317 | $ | (28,274 | ) | $ | 28,950 |
Condensed consolidated balance sheet as of December 31, 2007 | |||||||||||||||||
Cash and cash equivalents | $ | 1,393 | $ | - | $ | 32,588 | $ | - | $ | 33,981 | |||||||
Marketable securities | - | - | 519 | - | 519 | ||||||||||||
Notes and accounts receivable - net | 3,733 | 2 | 34,338 | (1,623 | ) | 36,450 | |||||||||||
Inventories | 1,198 | - | 9,891 | - | 11,089 | ||||||||||||
Prepaid taxes and expenses | 373 | - | 3,551 | - | 3,924 | ||||||||||||
Total current assets | 6,697 | 2 | 80,887 | (1,623 | ) | 85,963 | |||||||||||
Property, plant and equipment - net | 16,291 | - | 104,578 | - | 120,869 | ||||||||||||
Investments and other assets | 208,283 | 413 | 427,046 | (600,492 | ) | 35,250 | |||||||||||
Intercompany receivables | 14,577 | 1,961 | 437,433 | (453,971 | ) | - | |||||||||||
Total assets | $ | 245,848 | $ | 2,376 | $ | 1,049,944 | $ | (1,056,086 | ) | $ | 242,082 | ||||||
Notes and loan payables | $ | 3 | $ | 13 | $ | 2,367 | $ | - | $ | 2,383 | |||||||
Accounts payable and accrued liabilities | 3,038 | 1 | 42,236 | - | 45,275 | ||||||||||||
Income taxes payable | - | - | 12,277 | (1,623 | ) | 10,654 | |||||||||||
Total current liabilities | 3,041 | 14 | 56,880 | (1,623 | ) | 58,312 | |||||||||||
Long-term debt | 276 | 1,766 | 5,141 | - | 7,183 | ||||||||||||
Deferred income tax liabilities | 1,829 | 212 | 20,858 | - | 22,899 | ||||||||||||
Other long-term liabilities | 11,308 | - | 20,618 | - | 31,926 | ||||||||||||
Intercompany payables | 107,632 | 382 | 345,957 | (453,971 | ) | - | |||||||||||
Total liabilities | 124,086 | 2,374 | 449,454 | (455,594 | ) | 120,320 | |||||||||||
Earnings reinvested | 228,518 | (467 | ) | 114,037 | (113,570 | ) | 228,518 | ||||||||||
Other shareholders' equity | (106,756 | ) | 469 | 486,453 | (486,922 | ) | (106,756 | ) | |||||||||
Total shareholders' equity | 121,762 | 2 | 600,490 | (600,492 | ) | 121,762 | |||||||||||
Total liabilities and shareholders' equity | $ | 245,848 | $ | 2,376 | $ | 1,049,944 | $ | (1,056,086 | ) | $ | 242,082 |
-13-
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, 2008 | ||||||||||||||||||||
Cash provided by/(used in) operating activities | $ | 1,400 | $ | 13 | $ | 20,552 | $ | (545 | ) | $ | 21,420 | |||||||||
Cash flows from investing activities | ||||||||||||||||||||
Additions to property, plant and equipment | (352 | ) | - | (3,627 | ) | - | (3,979 | ) | ||||||||||||
Sales of long-term assets | 20 | - | 393 | - | 413 | |||||||||||||||
Net intercompany investing | 9,046 | (114 | ) | (9,093 | ) | 161 | - | |||||||||||||
All other investing, net | - | - | (734 | ) | - | (734 | ) | |||||||||||||
Net cash provided by/(used in) investing activities | 8,714 | (114 | ) | (13,061 | ) | 161 | (4,300 | ) | ||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Additions to long-term debt | - | - | 35 | - | 35 | |||||||||||||||
Reductions in long-term debt | - | - | (46 | ) | - | (46 | ) | |||||||||||||
Additions/(reductions) in short-term debt - net | - | - | 190 | - | 190 | |||||||||||||||
Cash dividends | (1,879 | ) | - | (545 | ) | 545 | (1,879 | ) | ||||||||||||
Net ExxonMobil shares sold/(acquired) | (9,334 | ) | - | - | - | (9,334 | ) | |||||||||||||
Net intercompany financing activity | - | 1 | 60 | (61 | ) | - | ||||||||||||||
All other financing, net | - | 100 | (319 | ) | (100 | ) | (319 | ) | ||||||||||||
Net cash provided by/(used in) financing activities | (11,213 | ) | 101 | (625 | ) | 384 | (11,353 | ) | ||||||||||||
Effects of exchange rate changes on cash | - | - | 1,165 | - | 1,165 | |||||||||||||||
Increase/(decrease) in cash and cash equivalents | $ | (1,099 | ) | $ | - | $ | 8,031 | $ | - | $ | 6,932 |
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 nine months ended September 30, 2006 | ||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||
Sales and other operating revenue, | ||||||||||||||||||||||||||||
including sales-based 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 | 69 | 251,345 | (281,788 | ) | - | ||||||||||||||||||||||
Total revenues and other income | 72,178 | 76 | 525,785 | (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 | - | 20,031 | (3,722 | ) | 21,897 | ||||||||||||||||||||||
Selling, general and administrative | ||||||||||||||||||||||||||||
expenses | 1,939 | - | 8,946 | (450 | ) | 10,435 | ||||||||||||||||||||||
Depreciation and depletion | 1,027 | - | 7,107 | - | 8,134 | |||||||||||||||||||||||
Exploration expenses, including dry | ||||||||||||||||||||||||||||
holes | 215 | - | 595 | - | 810 | |||||||||||||||||||||||
Interest expense | 3,403 | 137 | 8,884 | (11,871 | ) | 553 | ||||||||||||||||||||||
Sales-based taxes | - | - | 23,639 | - | 23,639 | |||||||||||||||||||||||
Other taxes and duties | 26 | - | 29,180 | - | 29,206 | |||||||||||||||||||||||
Income applicable to minority interests | - | - | 727 | - | 727 | |||||||||||||||||||||||
Total costs and other deductions | 41,112 | 137 | 476,321 | (281,804 | ) | 235,766 | ||||||||||||||||||||||
Income before income taxes | 31,066 | (61 | ) | 49,464 | (28,628 | ) | 51,841 | |||||||||||||||||||||
Income taxes | 1,816 | (24 | ) | 20,799 | - | 22,591 | ||||||||||||||||||||||
Net income | $ | 29,250 | $ | (37 | ) | $ | 28,665 | $ | (28,628 | ) | $ | 29,250 |
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 | (301 | ) | - | (2,805 | ) | - | (3,106 | ) | ||||||||
Sales of long-term assets | 97 | - | 441 | - | 538 | |||||||||||
Net intercompany investing | 5,190 | (16 | ) | (5,202 | ) | 28 | - | |||||||||
All other investing, net | - | - | (670 | ) | - | (670 | ) | |||||||||
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 | - | - | 93 | - | 93 | |||||||||||
Reductions in long-term debt | - | - | (36 | ) | - | (36 | ) | |||||||||
Additions/(reductions) in short-term debt - net | 168 | - | 106 | - | 274 | |||||||||||
Cash dividends | (1,825 | ) | - | (163 | ) | 163 | (1,825 | ) | ||||||||
Net ExxonMobil shares sold/(acquired) | (7,788 | ) | - | - | - | (7,788 | ) | |||||||||
Net intercompany financing activity | - | (3 | ) | 31 | (28 | ) | - | |||||||||
All other financing, net | - | - | (223 | ) | - | (223 | ) | |||||||||
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 |
-14-
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 September 30, 2007 | ||||||||||||||||||||
Cash and cash equivalents | $ | 3,055 | $ | - | $ | 28,368 | $ | - | $ | 31,423 | ||||||||||
Cash and cash equivalents - restricted | - | - | 4,604 | - | 4,604 | |||||||||||||||
Notes and accounts receivable - net | 5,585 | 10 | 29,844 | (3,607 | ) | 31,832 | ||||||||||||||
Inventories | 1,352 | - | 11,667 | - | 13,019 | |||||||||||||||
Prepaid taxes and expenses | 471 | - | 3,898 | - | 4,369 | |||||||||||||||
Total current assets | 10,463 | 10 | 78,381 | (3,607 | ) | 85,247 | ||||||||||||||
Property, plant and equipment - net | 16,262 | - | 102,840 | - | 119,102 | |||||||||||||||
Investments and other assets | 216,886 | 427 | 433,474 | (618,475 | ) | 32,312 | ||||||||||||||
Intercompany receivables | 11,258 | 1,938 | 439,850 | (453,046 | ) | - | ||||||||||||||
Total assets | $ | 254,869 | $ | 2,375 | $ | 1,054,545 | $ | (1,075,128 | ) | $ | 236,661 | |||||||||
Notes and loan payables | $ | 261 | $ | 13 | $ | 1,821 | $ | - | $ | 2,095 | ||||||||||
Accounts payable and accrued liabilities | 2,955 | 1 | 40,569 | - | 43,525 | |||||||||||||||
Income taxes payable | - | - | 13,907 | (3,607 | ) | 10,300 | ||||||||||||||
Total current liabilities | 3,216 | 14 | 56,297 | (3,607 | ) | 55,920 | ||||||||||||||
Long-term debt | 276 | 1,735 | 4,885 | - | 6,896 | |||||||||||||||
Deferred income tax liabilities | 1,636 | 222 | 20,471 | - | 22,329 | |||||||||||||||
Other long-term liabilities | 11,954 | - | 20,959 | - | 32,913 | |||||||||||||||
Intercompany payables | 119,184 | 383 | 333,479 | (453,046 | ) | - | ||||||||||||||
Total liabilities | 136,266 | 2,354 | 436,091 | (456,653 | ) | 118,058 | ||||||||||||||
Earnings reinvested | 218,761 | (447 | ) | 152,343 | (151,896 | ) | 218,761 | |||||||||||||
Other shareholders' equity | (100,158 | ) | 468 | 466,111 | (466,579 | ) | (100,158 | ) | ||||||||||||
Total shareholders' equity | 118,603 | 21 | 618,454 | (618,475 | ) | 118,603 | ||||||||||||||
Total liabilities and | ||||||||||||||||||||
shareholders' equity | $ | 254,869 | $ | 2,375 | $ | 1,054,545 | $ | (1,075,128 | ) | $ | 236,661 |
Condensed consolidated balance sheet as of December 31, 2006 | |||||||||||||||||
Cash and cash equivalents | $ | 6,355 | $ | - | $ | 21,889 | $ | - | $ | 28,244 | |||||||
Cash and cash equivalents - restricted | - | - | 4,604 | - | 4,604 | ||||||||||||
Notes and accounts receivable - net | 2,057 | - | 26,885 | - | 28,942 | ||||||||||||
Inventories | 1,213 | - | 9,501 | - | 10,714 | ||||||||||||
Prepaid taxes and expenses | 357 | - | 2,916 | - | 3,273 | ||||||||||||
Total current assets | 9,982 | - | 65,795 | - | 75,777 | ||||||||||||
Property, plant and equipment - net | 16,730 | - | 96,957 | - | 113,687 | ||||||||||||
Investments and other assets | 201,257 | 423 | 415,910 | (588,039 | ) | 29,551 | |||||||||||
Intercompany receivables | 16,501 | 1,883 | 435,221 | (453,605 | ) | - | |||||||||||
Total assets | $ | 244,470 | $ | 2,306 | $ | 1,013,883 | $ | (1,041,644 | ) | $ | 219,015 | ||||||
Notes and loan payables | $ | 90 | $ | 13 | $ | 1,599 | $ | - | $ | 1,702 | |||||||
Accounts payable and accrued liabilities | 3,025 | 1 | 36,056 | - | 39,082 | ||||||||||||
Income taxes payable | 548 | 1 | 7,484 | - | 8,033 | ||||||||||||
Total current liabilities | 3,663 | 15 | 45,139 | - | 48,817 | ||||||||||||
Long-term debt | 274 | 1,602 | 4,769 | - | 6,645 | ||||||||||||
Deferred income tax liabilities | 1,975 | 237 | 18,639 | - | 20,851 | ||||||||||||
Other long-term liabilities | 8,044 | - | 20,814 | - | 28,858 | ||||||||||||
Intercompany payables | 116,670 | 387 | 336,548 | (453,605 | ) | - | |||||||||||
Total liabilities | 130,626 | 2,241 | 425,909 | (453,605 | ) | 105,171 | |||||||||||
Earnings reinvested | 195,207 | (404 | ) | 144,607 | (144,203 | ) | 195,207 | ||||||||||
Other shareholders' equity | (81,363 | ) | 469 | 443,367 | (443,836 | ) | (81,363 | ) | |||||||||
Total shareholders' equity | 113,844 | 65 | 587,974 | (588,039 | ) | 113,844 | |||||||||||
Total liabilities and | |||||||||||||||||
shareholders' equity | $ | 244,470 | $ | 2,306 | $ | 1,013,883 | $ | (1,041,644 | ) | $ | 219,015 |
-15-
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 nine months ended September 30, 2007 | ||||||||||||||||||||
Cash provided by/(used in) operating | ||||||||||||||||||||
activities | $ | 21,063 | $ | 60 | $ | 40,176 | $ | (20,632 | ) | $ | 40,667 | |||||||||
Cash flows from investing activities | ||||||||||||||||||||
Additions to property, plant and | ||||||||||||||||||||
equipment | (912 | ) | - | (9,915 | ) | - | (10,827 | ) | ||||||||||||
Sales of long-term assets | 187 | - | 2,235 | - | 2,422 | |||||||||||||||
Net intercompany investing | 4,554 | (56 | ) | (4,565 | ) | 67 | - | |||||||||||||
All other investing, net | - | - | (1,660 | ) | - | (1,660 | ) | |||||||||||||
Net cash provided by/(used in) | ||||||||||||||||||||
investing activities | 3,829 | (56 | ) | (13,905 | ) | 67 | (10,065 | ) | ||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Additions to long-term debt | - | - | 104 | - | 104 | |||||||||||||||
Reductions in long-term debt | - | - | (111 | ) | - | (111 | ) | |||||||||||||
Additions/(reductions) in short-term | ||||||||||||||||||||
debt - net | 163 | - | 23 | - | 186 | |||||||||||||||
Cash dividends | (5,718 | ) | - | (20,632 | ) | 20,632 | (5,718 | ) | ||||||||||||
Net ExxonMobil shares sold/(acquired) | (22,993 | ) | - | - | - | (22,993 | ) | |||||||||||||
Net intercompany financing activity | - | (4 | ) | 71 | (67 | ) | - | |||||||||||||
All other financing, net | 356 | - | (762 | ) | - | (406 | ) | |||||||||||||
Net cash provided by/(used in) | ||||||||||||||||||||
financing activities | (28,192 | ) | (4 | ) | (21,307 | ) | 20,565 | (28,938 | ) | |||||||||||
Effects of exchange rate changes | ||||||||||||||||||||
on cash | - | - | 1,515 | - | 1,515 | |||||||||||||||
Increase/(decrease) in cash and cash | ||||||||||||||||||||
equivalents | $ | (3,300 | ) | $ | - | $ | 6,479 | $ | - | $ | 3,179 |
Condensed consolidated statement of cash flows for nine months ended September 30, 2006 | ||||||||||||||||
Cash provided by/(used in) operating | ||||||||||||||||
activities | $ | 1,122 | $ | 74 | $ | 40,556 | $ | (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 | (75 | ) | (20,745 | ) | 109 | - | |||||||||
All other investing, net | - | - | (1,791 | ) | - | (1,791 | ) | |||||||||
Net cash provided by/(used in) | ||||||||||||||||
investing activities | 19,749 | (75 | ) | (30,547 | ) | 109 | (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 | - | 1 | 108 | (109 | ) | - | ||||||||||
All other financing, net | 270 | - | (587 | ) | - | (317 | ) | |||||||||
Net cash provided by/(used in) | ||||||||||||||||
financing activities | (26,035 | ) | 1 | (1,319 | ) | 1,219 | (26,134 | ) | ||||||||
Effects of exchange rate changes | ||||||||||||||||
on cash | - | - | 537 | - | 537 | |||||||||||
Increase/(decrease) in cash and cash | ||||||||||||||||
equivalents | $ | (5,164 | ) | $ | - | $ | 9,227 | $ | - | $ | 4,063 |
-16-
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 | |||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||
(millions of dollars) | ||||||||||||
Net Income (U.S. GAAP) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,196 | $ | 1,192 | $ | 3,595 | $ | 4,116 | ||||
Non-U.S. | 5,103 | 5,301 | 14,698 | 15,894 | ||||||||
Downstream | ||||||||||||
United States | 914 | 1,272 | 3,498 | 3,305 | ||||||||
Non-U.S. | 1,087 | 1,466 | 3,808 | 3,189 | ||||||||
Chemical | ||||||||||||
United States | 296 | 458 | 846 | 976 | ||||||||
Non-U.S. | 906 | 893 | 2,605 | 2,164 | ||||||||
Corporate and financing | (92 | ) | (92 | ) | (100 | ) | (394 | ) | ||||
Net Income (U.S. GAAP) | $ | 9,410 | $ | 10,490 | $ | 28,950 | $ | 29,250 | ||||
Net income per common share (dollars) | $ | 1.72 | $ | 1.79 | $ | 5.21 | $ | 4.91 | ||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 1.70 | $ | 1.77 | $ | 5.15 | $ | 4.86 |
First Three Months | ||||||||||||
Net Income (U.S. GAAP) | 2008 | 2007 | ||||||||||
(millions of dollars) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,631 | $ | 1,177 | ||||||||
Non-U.S. | 7,154 | 4,864 | ||||||||||
Downstream | ||||||||||||
United States | 398 | 839 | ||||||||||
Non-U.S. | 768 | 1,073 | ||||||||||
Chemical | ||||||||||||
United States | 284 | 346 | ||||||||||
Non-U.S. | 744 | 890 | ||||||||||
Corporate and financing | (89 | ) | 91 | |||||||||
Net Income (U.S. GAAP) | $ | 10,890 | $ | 9,280 | ||||||||
Net income per common share (dollars) | $ | 2.05 | $ | 1.64 | ||||||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 2.03 | $ | 1.62 |
REVIEW OF THIRDFIRST QUARTER AND FIRST NINE MONTHS 20072008 RESULTS
Exxon Mobil Corporation reported thirdrecord first quarter 20072008 net income of $9,410$10,890 million, ($1.70 per share), down 10up 17 percent from the thirdfirst quarter of 2006, while earnings2007. Earnings per share were down 4up 25 percent forto $2.03 reflecting strong earnings and the same period. The decrease reflectedimpact of the continuing share purchase program. Higher crude oil and natural gas realizations, driven by record worldwide crude oil prices, were partly offset by lower downstreamrefining and chemical margins, partly offsetlower production volumes and higher operating costs. Share purchases to reduce shares outstanding were increased to $8.0 billion in the first quarter of 2008 and reduced shares outstanding by higher crude oil realizations. Excluding the impact of entitlements, divestments, OPEC quota effects and Venezuela, production on an oil-equivalent basis increased by 31.8 percent.
Net income of $28,950 million for the first nine months of 2007 was $300 million lower than the record first nine months of 2006. Earnings per share of $5.15 reflected strong earnings and increased by 6 percent due to the reduction in the number of shares outstanding. Excluding the impact of entitlements, divestments, OPEC quota effects and Venezuela, liquids production increased by 5 percent.
Third Quarter | First Nine Months | First Three Months | ||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 |
|
| 2008 | 2007 | |||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||||||||
Upstream earnings | ||||||||||||||||||||||||||||||
United States | $ | 1,196 | $ | 1,192 | $ | 3,595 | $ | 4,116 | $ | 1,631 | $ | 1,177 | ||||||||||||||||||
Non-U.S. | 5,103 | 5,301 | 14,698 | 15,894 | 7,154 | 4,864 | ||||||||||||||||||||||||
Total | $ | 6,299 | $ | 6,493 | $ | 18,293 | $ | 20,010 | $ | 8,785 | $ | 6,041 |
Upstream earnings in the third quarter of 2007 were $6,299$8,785 million, down $194up $2,744 million from the thirdfirst quarter of 2006 primarily reflecting lower2007. Record high crude oil and natural gas realizations increased earnings approximately $4.4 billion. Volume and higher operating expenses, mostlymix effects decreased earnings about $800 million, as increased natural gas volumes were more than offset by lower crude volumes. Earnings also decreased due to $300 million of higher crude oil realizations. taxes, $250 million of increased operating costs and $200 million of lower gains on asset sales.
On an oil-equivalent basis, production decreased by 25.6 percent from the thirdfirst quarter of 2006.2007. Excluding the impact of entitlements,Venezuela expropriation, divestments, OPEC quota effects and Venezuela,price and spend impacts on volumes, production was updown 3 percent.
-17-
Liquids production of 2,536totaled 2,474 kbd (thousands of barrels per day) was 111, down 272 kbd lower. Mature field decline and reduced entitlements were partly offset by increased production from projects in Africa and Russia.the first quarter of 2007. Excluding the impact of entitlements,Venezuela expropriation, divestments, OPEC quota effects and Venezuela,price and spend impacts on volumes, liquids production was up 3down 6 percent. Increased production from projects in west Africa and the North Sea was more than offset by mature field decline, PSC net interest reductions and maintenance activities.
ThirdFirst quarter natural gas production was 8,30210,246 mcfd (millions of cubic feet per day), up 163132 mcfd from 2006. Increased volume from projects in Qatar was2007. Higher European demand and North Sea project additions were partly offset by the impact of mature field decline. Excluding entitlement and divestment effects, natural gas production increased by 3 percent.
Earnings from U.S. Upstream operations were $1,196$1,631 million, $4$454 million higher than the thirdfirst quarter of 2006.2007. Non-U.S. Upstream earnings were $5,103$7,154 million, down $198up $2,290 million from 2006.2007.
Upstream earnings for the first nine months of 2007 were $18,293 million, a decrease of $1,717 million from 2006 due to lower natural gas realizations and higher operating expenses, partly offset by higher crude oil realizations and favorable sales mix effects. On an oil-equivalent basis, production decreased 2 percent from last year. Excluding the impact of entitlements, divestments, OPEC quota effects and Venezuela, production was up nearly 3 percent.
Liquids production of 2,649 kbd decreased by 33 kbd from 2006. Higher production from projects in Africa and Russia was offset by mature field decline and reduced entitlements. Excluding the impact of entitlements, divestments, OPEC quota effects and Venezuela, liquids production increased 5 percent.
Natural gas production of 9,043 mcfd decreased 302 mcfd from 2006. Lower volume from mature field decline was partly offset by projects in Qatar, Europe, Canada and Malaysia.
Earnings from U.S. Upstream operations for 2007 were $3,595 million, a decrease of $521 million. Earnings outside the U.S. were $14,698 million, $1,196 million lower than 2006.-15-
Third Quarter | First Nine Months | First Three Months | |||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | ||||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | ||||||||||||||||||||||||||||||
Downstream earnings | |||||||||||||||||||||||||||||||
United States | $ | 914 | $ | 1,272 | $ | 3,498 | $ | 3,305 | $ | 398 | $ | 839 | |||||||||||||||||||
Non-U.S. | 1,087 | 1,466 | 3,808 | 3,189 | 768 | 1,073 | |||||||||||||||||||||||||
Total | $ | 2,001 | $ | 2,738 | $ | 7,306 | $ | 6,494 | $ | 1,166 | $ | 1,912 |
Downstream earnings inof $1,166 million were $746 million lower than the thirdfirst quarter of 2007 were $2,001 million, down $737 million from the third quarter of 2006, driven by2007. Significantly lower worldwide refining and fuels marketing margins.margins decreased earnings approximately $1.0 billion, while improved refinery operations increased earnings about $350 million. Petroleum product sales of 6,821 kbd were 7,101 kbd, 201377 kbd lower than last year's third quarter.first quarter, mainly reflecting asset sales.
U.S. Downstream earnings were $914$398 million, down $358$441 million from the thirdfirst quarter of 2006.2007. Non-U.S. Downstream earnings of $1,087$768 million were $379$305 million lower.
Downstream earnings for the first nine months of 2007 were a record $7,306 million, an increase of $812 million from 2006 reflecting stronger marketing margins, refinery optimization activities and the sale of the Ingolstadt refinery, partly offset by lower refining margins. Petroleum product sales of 7,090 kbd decreased from 7,180 kbd in 2006.
U.S. Downstream earnings were $3,498 million, up $193 million. Non-U.S. Downstream earnings were $3,808 million, $619 million higher than last year.
-18-
Third Quarter | First Nine Months | First Three Months | |||||||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | ||||||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | ||||||||||||||||||||||||||||||||
Chemical earnings | |||||||||||||||||||||||||||||||||
United States | $ | 296 | $ | 458 | $ | 846 | $ | 976 | $ | 284 | $ | 346 | |||||||||||||||||||||
Non-U.S. | 906 | 893 | 2,605 | 2,164 | 744 | 890 | |||||||||||||||||||||||||||
Total | $ | 1,202 | $ | 1,351 | $ | 3,451 | $ | 3,140 | $ | 1,028 | $ | 1,236 |
Chemical earnings inof $1,028 million were $208 million lower than the thirdfirst quarter of 20072007. Lower margins, which decreased earnings approximately $350 million, were $1,202 million, down $149 million from the third quarter of 2006 due to lower margins partly offset by favorable foreign exchange and tax items.effects. Prime product sales of 6,7296,578 kt (thousands of metric tons) in the thirdfirst quarter of 20072008 were down 23227 kt fromlower than the prior year.
Chemical earnings for the first nine months of 2007 were a record $3,451 million, up $311 million from 2006 driven by higher margins. Prime product sales were20,431 kt, down 92 kt from 2006.
Third Quarter | First Nine Months | ||||||||||||||
2007 | 2006 | 2007 | 2006 | ||||||||||||
(millions of dollars) | |||||||||||||||
Corporate and financing earnings | $ | (92 | ) | $ | (92 | ) | $ | (100 | ) | $ | (394 | ) |
First Three Months | |||||||||||||||
2008 | 2007 | ||||||||||||||
(millions of dollars) | |||||||||||||||
Corporate and financing earnings | $ | (89 | ) | $ | 91 |
Corporate and financing expenses in the third quarter of 2007 of $92were $89 million, were flat with 2006.
Corporate and financing expenses for the first nine months of 2007 of $100 million decreased $294up $180 million, mainly due to favorablehigher corporate costs and tax items.
LIQUIDITY AND CAPITAL RESOURCES
Third Quarter | First Nine Months | First Three Months | ||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | |||||||||||||||||||
(millions of dollars) | (millions of dollars) | |||||||||||||||||||||||
Net cash provided by/(used in) | ||||||||||||||||||||||||
Operating activities | $ | 40,667 | $ | 40,424 | $ | 21,420 | $ | 14,286 | ||||||||||||||||
Investing activities | (10,065 | ) | (10,764 | ) | (4,300 | ) | (3,238 | ) | ||||||||||||||||
Financing activities | (28,938 | ) | (26,134 | ) | (11,353 | ) | (9,505 | ) | ||||||||||||||||
Effect of exchange rate changes | 1,515 | 537 | 1,165 | 207 | ||||||||||||||||||||
Increase/(decrease) in cash and cash equivalents | $ | 3,179 | $ | 4,063 | $ | 6,932 | $ | 1,750 | ||||||||||||||||
Cash and cash equivalents | $ | 31,423 | $ | 32,734 | $ | 40,913 | $ | 29,994 | ||||||||||||||||
Cash and cash equivalents - restricted (note 3) | 4,604 | 4,604 | ||||||||||||||||||||||
Cash and cash equivalents - restricted | 0 | 4,604 | ||||||||||||||||||||||
Total cash and cash equivalents (at end of period) | $ | 36,027 | $ | 37,338 | $ | 40,913 | $ | 34,598 | ||||||||||||||||
Cash flow from operations and asset sales | ||||||||||||||||||||||||
Net cash provided by operating activities (U.S. GAAP) | $ | 15,063 | $ | 14,497 | $ | 40,667 | $ | 40,424 | $ | 21,420 | $ | 14,286 | ||||||||||||
Sales of subsidiaries, investments and property, | ||||||||||||||||||||||||
plant and equipment | 749 | 878 | 2,422 | 2,328 | 413 | 538 | ||||||||||||||||||
Cash flow from operations and asset sales | $ | 15,812 | $ | 15,375 | $ | 43,089 | $ | 42,752 | $ | 21,833 | $ | 14,824 |
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.
-19--16-
Total cash and cash equivalents of $40.9 billion at the end of the first quarter of 2008 compared to $34.6 billion, including the $4.6 billion of restricted cash, was $36.0 billion at the end of the thirdfirst quarter of 2007.
Cash provided by operating activities totaled $40,667$21,420 million for the first ninethree months of 2007, similar to 2006.2008, $7,134 million higher than 2007. The major source of funds was net income of $28,950$10,890 million, adjusted for the noncash provision of $9,095$3,104 million for depreciation and depletion. Net changes in operational working capitaldepletion, both of which increased. The effects of higher prices on the timing of payments of accounts and other items in 2007payables and the timing of income taxes payable added $2.6 billion.to cash provided by operating activities. For additional details, see the Condensed Consolidated Statement of Cash Flows on page 5.
Investing activities for the first ninethree months of 20072008 used net cash of $10,065$4,300 million compared to $10,764$3,238 million in the prior year. Spending for additions to property, plant and equipment decreased $474increased $873 million to $10,827$3,979 million. Proceeds from asset divestments of $413 million in 2008 were lower.
Cash flow from operations and asset sales in the third quarterfirst three months of 2007 of $15.82008 was $21.8 billion, including asset sales of $0.7$0.4 billion, was comparable to the prior year period. For the first nine months of 2007, cash flow from operations and asset sales was $43.1 billion, including $2.4increased $7.0 billion from asset sales.the comparable 2007 period.
Net cash used in financing activities of $28,938$11,353 million in the first ninethree months of 20072008 increased $2,804$1,848 million reflecting a higher level of purchases of shares of ExxonMobil stock.
During the thirdfirst quarter of 2007,2008, Exxon Mobil Corporation purchased 90110 million shares of its common stock for the treasury at a gross cost of $7.8$9.5 billion. These purchases included $7.0$8.0 billion to reduce the number of shares outstanding, with the balance used to offset shares issued in conjunction with the company'sCompany's benefit plans and programs. Shares outstanding were reduced from 5,5465,382 million at the end of the secondfourth quarter to 5,4645,284 million at the end of the thirdfirst quarter.
Gross share purchases in the first nine months of 2007 were $23.9 billion, which reduced shares outstanding by 4.6 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.
The Corporation distributed a total of $8.9$9.9 billion to shareholders induring the third quarter through dividends of $1.9 billion and share purchases to reduce shares outstanding of $7.0 billion. For the first nine months of 2007 distributions to shareholders totaled $26.7 billion through dividends and share purchases to reduce shares outstanding, an increase of $2.913 percent or $1.1 billion versus 2006.the first quarter of 2007.
Total debt of $9.0$10.0 billion at September 30, 2007,March 31, 2008, increased from $8.3$9.6 billion at year-end 2006.2007. The Corporation's debt to total capital ratio was 6.87.3 percent at the end of the thirdfirst quarter of 20072008 compared to 6.67.1 percent at year-end 2006.2007.
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.
In accordance with a nationalization decree issued by Venezuela's President Chavez in February of this year, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates (ExxonMobil) holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a "mixed enterprise" structure and an increase in PdVSA's or one of its affiliate's ownership interest in the Project, with the stipulation that if an agreement was not reached for the formation of the mixed enterprise during a specified period of time, the government would "directly take on the activities" carried out by the joint venture. ExxonMobil and Venezuela were not able to reach agreement on the formation of a mixed enterprise and on June 27, 2007, the government expropriated ExxonMobil's 41.67 percent interest in the Cerro Negro Project.
Subsequent discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. At this time the net impact of this matter on the Corporation's consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation's operations or financial condition. At the time the assets were expropriated, ExxonMobil's remaining net book investment in Cerro Negro producing assets was about $750 million.
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.
In accordance with a nationalization decree issued by Venezuela’s president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would “directly assume the activities” carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by PdVSA, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project .
-20-To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition. At the time the assets were expropriated, ExxonMobil’s remaining net book investment in Cerro Negro producing assets was about $750 million.
-17-
TAXES
Third Quarter | First Nine Months | |||||||||||||
2007 | 2006 | 2007 | 2006 | |||||||||||
(millions of dollars) | ||||||||||||||
Taxes | ||||||||||||||
Income taxes | $ | 7,350 | $ | 7,688 | $ | 21,802 | $ | 22,591 | ||||||
Sales-based taxes | 7,970 | 7,764 | 23,064 | 23,639 | ||||||||||
All other taxes and duties | 10,953 | 10,793 | 32,026 | 31,573 | ||||||||||
Total | $ | 26,273 | $ | 26,245 | $ | 76,892 | $ | 77,803 | ||||||
Effective income tax rate | 46 | % | 44 | % | 45 | % | 45 | % |
Income, sales-based and all other taxes and duties for the third quarter of 2007 of $26,273 million were flat as compared to 2006. In the third quarter of 2007 income tax expense was $7,350 million and the effective income tax rate was 46 percent, compared to $7,688 million and 44 percent, respectively, in the prior year period.
First Three Months | ||||||||||||||
2008 | 2007 | |||||||||||||
(millions of dollars) | ||||||||||||||
Income taxes | $ | 9,302 | $ | 6,784 | ||||||||||
Sales-based taxes | 8,432 | 7,284 | ||||||||||||
All other taxes and duties | 11,607 | 10,408 | ||||||||||||
Total | $ | 29,341 | $ | 24,476 | ||||||||||
Effective income tax rate | 49 | % | 44 | % |
Income, sales-based and all other taxes and duties for the first nine monthsquarter of 20072008 of $76,892$29,341 million were down $911 million compared to 2006.higher than 2007. In the first nine monthsquarter of 20072008 income tax expense was $21,802increased to $9,302 million and the effective income tax rate was 4549 percent, compared to $22,591$6,784 million and 4544 percent, respectively, in the prior year period.
The change in the effective income tax rate reflects an increased share of total income from the non-U.S. Upstream segment. Sales-based taxes and all other taxes and duties increased in 2008 reflecting higher prices and foreign exchange.
CAPITAL AND EXPLORATION EXPENDITURES
Third Quarter | First Nine Months | First Three Months | |||||||||||||||||||||||||||
2007 | 2006 | 2007 | 2006 | 2008 | 2007 | ||||||||||||||||||||||||
(millions of dollars) | (millions of dollars) | ||||||||||||||||||||||||||||
Capital and exploration expenditures | |||||||||||||||||||||||||||||
Upstream (including exploration expenses) | $ | 3,851 | $ | 4,142 | $ | 11,186 | $ | 12,161 | $ | 4,095 | $ | 3,469 | |||||||||||||||||
Downstream | 984 | 658 | 2,389 | 1,981 | 827 | 531 | |||||||||||||||||||||||
Chemical | 601 | 195 | 1,096 | 525 | 566 | 219 | |||||||||||||||||||||||
Other | 5 | 66 | 31 | 119 | 3 | 3 | |||||||||||||||||||||||
Total | $ | 5,441 | $ | 5,061 | $ | 14,702 | $ | 14,786 | $ | 5,491 | $ | 4,222 |
ExxonMobil continued to actively invest in the third quarter, spending $5.4 billion on capital and exploration projects, an increase of 8 percent over 2006. For the first nine months of 2007, spendingSpending on capital and exploration projects was $14.7 billion.$5.5 billion in the first quarter of 2008, up 30 percent from last year, as we continued to actively invest in projects to bring additional crude oil, natural gas and finished products to market.
Capital and exploration expenditures for full year 20062007 were $19.9$20.9 billion and are expected to continue in this range from $25 billion to $30 billion for the next several years. Actual spending could vary depending on the progress of individual projects.
RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS
In December 2007, the FASB issued Statement No. 160 (FAS 160), “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51.” FAS 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. FAS 160 must be adopted by the Corporation no later than January 1, 2009. FAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of FAS 160 will be applied prospectively. The Corporation does not expect the adoption of FAS 160 to have a material impact on the Corporation’s financial statements.
FORWARD-LOOKING STATEMENTS
Statements in this report relating to future plans, projections, events or conditions are forward-looking statements. Actual results, including project plans, capacities, and related expenditures,timing and 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; political 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 "Factors Affecting Future Results" on our website and in Item 1A of ExxonMobil's 20062007 Form 10-K. We assume no duty to update these statements as of any future date.
-21--18-
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risks for the ninethree months ended September 30, 2007,March 31, 2008, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2006.2007.
Item 4. Controls and Procedures
As indicated in the certifications in Exhibit 31 of this report, the Corporation’s chief executive officer, principal financial officer and principal accounting officer have evaluated the Corporation’s disclosure controls and procedures as of September 30, 2007.March 31, 2008. Based on that evaluation, these officers have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely 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
On October 9, 2007, ExxonMobil Oil Corporation received a proposed agreed order fromFebruary 15, 2008, the Texas Commission on Environmental Quality (TCEQ) relatingfiled a Preliminary Report and Petition seeking an administrative penalty and corrective action related to three separate aira July 24, 2004, emissions events (in January, Aprilevent and May of 2007)alleged violations discovered in a 2005 TCEQ inspection at the Beaumont, Texas refinery. The events are associated with, respectively, a power disruption, a feed tank roof landing, and coker flaring due to low feedrate to the Wet Gas Compressor as the coker unit moved into turnaround. TheBaytown Refinery. TCEQ alleges that the three events were avoidable. In the proposed order, the TCEQ has assessed a penalty of $106,000. The Company is assessing the appropriate response to the proposed order.
On September 14, 2007, the TCEQ issued a proposed agreed order relating to the Company's Baytown, Texas refinery. The enforcement action relates to three separate air emissions events, occurring in October 2005, June 2006 and October 2006. The events are associated with, respectively, a forced draft fan trip at a fluid catalytic cracking unit, flooding/foaming in the delayed coker unit lean oil absorber, and a power plant relay trip. The TCEQ has assessedseeking an administrative penalty of $160,000 in the aggregate. The Company is contesting enforcement related$192,720. ExxonMobil has filed its Answer to the October 2006 power plant event (for which $60,000Petition and requested a contested case hearing. The matter is now pending before the State Office of the penalty is being sought), and negotiations are ongoing regarding the amount of penalty for the other two events.
On September 4, 2007, the TCEQ issued a proposed agreed order in which it assessed an administrative penalty of $133,000 relating to two separate air emissions events occurring in February 2007 at the Company's Baytown, Texas refinery. The events are associated with, respectively, a compressor trip at Booster Station 4 and an air blower interval of surge at the Flexicoker. ExxonMobil is not contesting the enforcement of either event, but negotiations are in progress regarding the penalty amount.
Pursuant to a proposed agreed order received in August 2007, the Colorado Department of Public Health and Environment (CDPHE) is pursuing an enforcement action against the Company relating to excess air emissions (VOC, NOx, HAPs) events at the Piceance Creek Unit Gas Plant. The issues were identified during agency inspections and internal reviews in 2006 and 2007. The violations were due to reciprocating engine exhaust catalyst failure and glycol dehydrator control device failure, as well as associated recordkeeping issues. The Company also self-disclosed an issue associated with emissions that were not reflected in the air permit, but discovered during testing. The Company is engaged with the CDPHE in settlement discussions to enter into a Compliance Order on Consent that will require the installation of a new control device (thermal oxidizer) as well as payment of penalties. The initial administrative penalty demand and associated economic benefit penalty demand exceed $500,000, but are under negotiation.
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The Environmental Protection Agency (EPA) is evaluating enforcement under the Toxic Substances Control Act for alleged leaks of PCB-containing oil from transformers and related alleged violations of PCB disposal requirements at the Company's Santa Ynez Unit Platform Hondo facility, offshore California. The EPA has indicated that they intend to seek civil penalties in excess of $100,000.
The Department of Justice (DOJ) and the U.S. Fish and Wildlife Service are evaluating enforcement for alleged violations of the Migratory Bird Treaty Act at the Company's Piceance Creek production unit in Colorado, the LaBarge, Wyoming production facility, and isolated production facilities in Kansas, Oklahoma and Texas. The DOJ has indicated that it intends to seek fines and restitution in excess of $100,000.Administrative Hearings.
Refer to the relevant portions of note 3 on pages 76 and 87 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
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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 companythe Company's 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. In its most recent earnings release dated May 1, 2008, the Corporation stated that share purchases to reduce shares outstanding were increased to $8.0 billion in the first quarter of 2008. 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.
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Item 6. Exhibits
Exhibit
Description
10(iii)(d)(a.1)
ExxonMobil Executive Life Insurance and Death Benefit Plan.2003 Incentive Program, as approved by shareholders May 28, 2003.
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.
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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: November 7, 2007May 6, 2008
By: /s/ Patrick T. Mulva
Name: Patrick T. Mulva
Title: Vice President, Controller and
Principal Accounting Officer
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INDEX TO EXHIBITS
Exhibit
Description
10(iii)(d)(a.1)
ExxonMobil Executive Life Insurance and Death Benefit Plan.2003 Incentive Program, as approved by shareholders May 28, 2003.
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.
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