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
| | | | |
| September 30,March 31,
| | | September 30,
| |
|
| | | 2014
| | | 2013
| | | 2014
| | | 2013
| Revenues and other income
| | | | | 2015 |
|
| 2014 |
| Revenues and other income | | | | | | | | | Sales and other operating revenue (1) | | | 103,56664,758
| | | 108,390101,312
| | | 311,484
| | | 314,818
| | Income from equity affiliates | | | 3,2112,261
| | | 3,4444,108
| | | 10,631
| | | 10,960
| | Other income | | | 713599
| | | 538905
| | | 3,795
| | | 1,617
| | | Total revenues and other income | | | 107,49067,618
| | | 112,372106,325
| | | 325,910
| | | 327,395
| Costs and other deductions |
| | | | | | | | | | | | | Crude oil and product purchases | | | 60,42832,698
| | | 63,96157,866
| | | 181,391
| | | 183,088
| | Production and manufacturing expenses | | | 9,9518,730
| | | 9,84210,088
| | | 30,517
| | | 29,856
| | Selling, general and administrative expenses | | | 3,1692,713
| | | 3,1503,132
| | | 9,470
| | | 9,536
| | Depreciation and depletion | | | 4,3624,300
| | | 4,2874,192
| | | 12,839
| | | 12,802
| | Exploration expenses, including dry holes | | | 319311
| | | 486317
| | | 1,132
| | | 1,385
| | Interest expense | | | 88 | | | 5266
| | | 218
| | | 161
| | Sales-based taxes (1) | | | 7,5195,530
| | | 7,8827,416
| | | 22,806
| | | 22,926
| | Other taxes and duties | | | 8,2446,613
| | | 8,5238,021
| | | 24,749
| | | 24,646
| | | Total costs and other deductions | | | 94,08060,983
| | | 98,18391,098
| | | 283,122
| | | 284,400
| Income before income taxes | | | 13,4106,635
| | | 14,18915,227
| | | 42,788
| | | 42,995
| | Income taxes | | | 5,0641,560
| | | 6,1205,857
| | | 15,955
| | | 18,190
| Net income including noncontrolling interests | | | 8,3465,075
| | | 8,0699,370
| | | 26,833
| | | 24,805
| | Net income attributable to noncontrolling interests | | | 276135
| | | 199270
| | | 883
| | | 575
| Net income attributable to ExxonMobil | | | 8,0704,940
| | | 7,8709,100
| | | 25,950
| | | 24,230
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Earnings per common share (dollars) | | | 1.891.17
| | | 1.792.10
| | | 6.04
| | | 5.46
| | | | | | | | | | | | | | | Earnings per common share - assuming dilution (dollars) | | | 1.891.17
| | | 1.792.10
| | | 6.04
| | | 5.46
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | Dividends per common share (dollars) | | | 0.69 | | | 0.63 | | | 2.01
| | | 1.83
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | (1) Sales-based taxes included in sales and other operating revenue | |
|
|
|
|
|
|
|
|
|
|
| | | operating revenue5,530
| | | 7,5197,416
| |
| 7,882
|
|
| 22,806
|
|
| 22,926
|
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
EXXON MOBIL CORPORATION | CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | | | | | | September 30, | | | September 30, | | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | | | | | | | | | | | Net income including noncontrolling interests | | | 8,346 | | | 8,069 | | | 26,833 | | | 24,805 | Other comprehensive income (net of income taxes) | | | | | | | | | | | | | | Foreign exchange translation adjustment | | | (3,828) | | | 1,229 | | | (2,986) | | | (2,317) | | Adjustment for foreign exchange translation (gain)/loss | | | | | | | | | | | | | | | | included in net income | | | - | | | - | | | 163 | | | - | | Postretirement benefits reserves adjustment | | | | | | | | | | | | | | | | (excluding amortization) | | | 372 | | | (222) | | | 196 | | | (58) | | Amortization and settlement of postretirement benefits reserves | | | | | | | | | | | | | | | | adjustment included in net periodic benefit costs | | | 289 | | | 455 | | | 918 | | | 1,353 | | Unrealized change in fair value of stock investments | | | (21) | | | - | | | (57) | | | - | | | Total other comprehensive income | | | (3,188) | | | 1,462 | | | (1,766) | | | (1,022) | Comprehensive income including noncontrolling interests | | | 5,158 | | | 9,531 | | | 25,067 | | | 23,783 | | Comprehensive income attributable to | | | | | | | | | | | | | | | | noncontrolling interests | | | (27) | | | 331 | | | 588 | | | 420 | Comprehensive income attributable to ExxonMobil | | | 5,185 | | | 9,200 | | | 24,479 | | | 23,363 |
EXXON MOBIL CORPORATION | | CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | | (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended | | | | | | | | | | March 31, | | | | | | | | | | 2015 | | | 2014 | | | | | | | | | | | | | | | Net income including noncontrolling interests | | | | 5,075 | | | 9,370 | | | Other comprehensive income (net of income taxes) | | | | | | | | | | | Foreign exchange translation adjustment | | | | (5,353) | | | (786) | | | | Adjustment for foreign exchange translation (gain)/loss included in net income | | | - | | | 82 | | | | Postretirement benefits reserves adjustment (excluding amortization) | | | 813 | | | (84) | | | | Amortization and settlement of postretirement benefits reserves adjustment | | | | | | | | | | | | included in net periodic benefit costs | | | | 351 | | | 316 | | | | Unrealized change in fair value of stock investments | | | 2 | | | (54) | | | | Realized (gain)/loss from stock investments included in net income | | | 8 | | | - | | | | | Total other comprehensive income | | | | (4,179) | | | (526) | | | Comprehensive income including noncontrolling interests | | | 896 | | | 8,844 | | | | Comprehensive income attributable to noncontrolling interests | | | (406) | | | 59 | | | Comprehensive income attributable to ExxonMobil | | | | 1,302 | | | 8,785 | |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION | | EXXON MOBIL CORPORATION | | CONDENSED CONSOLIDATED BALANCE SHEET | CONDENSED CONSOLIDATED BALANCE SHEET | | CONDENSED CONSOLIDATED BALANCE SHEET | | (millions of dollars) | (millions of dollars) | | (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | Sept. 30, | | | Dec. 31, | | | | | | | Mar. 31, | | | Dec. 31, | | | | | | | | 2014 | | | 2013 | | | | | | | 2015 | | | 2014 | | Assets | Assets | | | | | | | Assets | | | | | | | | Current assets | | | | | | | Current assets | | | | | | | | | Cash and cash equivalents | | | 4,962 | | | 4,644 | | | Cash and cash equivalents | | | 5,184 | | | 4,616 | | | | Cash and cash equivalents – restricted | | | 52 | | 269 | | | Cash and cash equivalents – restricted | | | 43 | | 42 | | | | Notes and accounts receivable – net | | | 30,963 | | 33,152 | | | Notes and accounts receivable – net | | | 25,031 | | 28,009 | | | | Inventories | | | | | | | | Inventories | | | | | | | | | | Crude oil, products and merchandise | | | 13,441 | | 12,117 | | | | Crude oil, products and merchandise | | | 11,792 | | 12,384 | | | | | Materials and supplies | | | 4,320 | | 4,018 | | | | Materials and supplies | | | 4,310 | | 4,294 | | | | Other current assets | | | 4,857 | | 5,108 | | | Other current assets | | | 4,298 | | 3,565 | | | | | Total current assets | | | 58,595 | | 59,308 | | | | Total current assets | | | 50,658 | | 52,910 | | | Investments, advances and long-term receivables | | | 35,012 | | 36,328 | | Investments, advances and long-term receivables | | | 34,471 | | 35,239 | | | Property, plant and equipment – net | | | 251,406 | | 243,650 | | Property, plant and equipment – net | | | 249,497 | | 252,668 | | | Other assets, including intangibles – net | | | 7,751 | | 7,522 | | Other assets, including intangibles – net | | | 8,335 | | 8,676 | | | | | Total assets | | | 352,764 | | | 346,808 | | | | Total assets | | | 342,961 | | | 349,493 | | | | | | | | | | | | | | | | | | | | | Liabilities | Liabilities | | | | | | | Liabilities | | | | | | | | Current liabilities | | | | | | | Current liabilities | | | | | | | | | Notes and loans payable | | | 10,243 | | | 15,808 | | | Notes and loans payable | | | 13,277 | | | 17,468 | | | | Accounts payable and accrued liabilities | | | 49,272 | | 48,085 | | | Accounts payable and accrued liabilities | | | 38,144 | | 42,227 | | | | Income taxes payable | | | 6,469 | | 7,831 | | | Income taxes payable | | | 4,512 | | 4,938 | | | | | Total current liabilities | | | 65,984 | | 71,724 | | | | Total current liabilities | | | 55,933 | | 64,633 | | | Long-term debt | | | 11,591 | | 6,891 | | Long-term debt | | | 19,494 | | 11,653 | | | Postretirement benefits reserves | | | 19,268 | | 20,646 | | Postretirement benefits reserves | | | 24,632 | | 25,802 | | | Deferred income tax liabilities | | | 41,132 | | 40,530 | | Deferred income tax liabilities | | | 38,935 | | 39,230 | | | Long-term obligations to equity companies | | | 5,132 | | 4,742 | | Long-term obligations to equity companies | | | 5,519 | | 5,325 | | | Other long-term obligations | | | 22,162 | | 21,780 | | Other long-term obligations | | | 21,002 | | 21,786 | | | | | Total liabilities | | | 165,269 | | | 166,313 | | | | Total liabilities | | | 165,515 | | | 168,429 | | | | | | | | | | | | | | | | | | | | | Commitments and contingencies (Note 2) | | | | | | | | Commitments and contingencies (Note 3) | | Commitments and contingencies (Note 3) | | | | | | | | | | | | | | | | | | | | | | Equity | Equity | | | | | | | Equity | | | | | | | | Common stock without par value | | | | | | | Common stock without par value | | | | | | | | | (9,000 million shares authorized, 8,019 million shares issued) | | | 10,681 | | 10,077 | | | (9,000 million shares authorized, 8,019 million shares issued) | | | 11,006 | | 10,792 | | | Earnings reinvested | | | 404,738 | | 387,432 | | Earnings reinvested | | | 410,414 | | 408,384 | | | Accumulated other comprehensive income | | | (12,196) | | (10,725) | | Accumulated other comprehensive income | | | (22,595) | | (18,957) | | | Common stock held in treasury | | | | | | | Common stock held in treasury | | | | | | | | | (3,784 million shares at Sept. 30, 2014 and | | | | | | | (3,838 million shares at March 31, 2015 and | | | | | | | | 3,684 million shares at Dec. 31, 2013) | | | (222,636) | | (212,781) | | | 3,818 million shares at December 31, 2014) | | | (227,598) | | (225,820) | | | | | ExxonMobil share of equity | | | 180,587 | | 174,003 | | | | ExxonMobil share of equity | | | 171,227 | | 174,399 | | | Noncontrolling interests | | | 6,908 | | 6,492 | | Noncontrolling interests | | | 6,219 | | 6,665 | | | | | Total equity | | | 187,495 | | 180,495 | | | | Total equity | | | 177,446 | | 181,064 | | | | | Total liabilities and equity | | | 352,764 | | | 346,808 | | | | Total liabilities and equity | | | 342,961 | | | 349,493 | |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION | | EXXON MOBIL CORPORATION | | CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | | CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS | | (millions of dollars) | (millions of dollars) | | (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended | | | | | | Three Months Ended | | | | | | | September 30, | | | | | | March 31, | | | | | | | 2014 | | | 2013 | | | | | | 2015 | | | 2014 | | Cash flows from operating activities | Cash flows from operating activities | | | | | | | | Cash flows from operating activities | | | | | | | | | Net income including noncontrolling interests | | | 26,833 | | | 24,805 | | Net income including noncontrolling interests | | | 5,075 | | | 9,370 | | | Depreciation and depletion | | | 12,839 | | | 12,802 | | Depreciation and depletion | | | 4,300 | | | 4,192 | | | Changes in operational working capital, excluding cash and debt | | | (460) | | | (2,676) | | Changes in operational working capital, excluding cash and debt | | | (509) | | | 2,452 | | | All other items – net | | | (1,511) | | | (225) | | All other items – net | | | (868) | | | (911) | | | | Net cash provided by operating activities | | | 37,701 | | | 34,706 | | | Net cash provided by operating activities | | | 7,998 | | | 15,103 | | | | | | | | | | | | | | | | | | | | | Cash flows from investing activities | Cash flows from investing activities | | | | | | | | Cash flows from investing activities | | | | | | | | | Additions to property, plant and equipment | | | (24,068) | | | (25,243) | | Additions to property, plant and equipment | | | (6,844) | | | (7,328) | | | Proceeds associated with sales of subsidiaries, property, plant and | | | | | | | | Proceeds associated with sales of subsidiaries, property, plant and | | | | | | | | | | equipment, and sales and returns of investments | | | 3,794 | | | 871 | | | equipment, and sales and returns of investments | | | 484 | | | 1,111 | | | Additional investments and advances | | | (1,269) | | | (3,644) | | Additional investments and advances | | | (282) | | | (457) | | | Other investing activities – net | | | 3,415 | | | 527 | | Other investing activities – net | | | 290 | | | 368 | | | | Net cash used in investing activities | | | (18,128) | | | (27,489) | | | Net cash used in investing activities | | | (6,352) | | | (6,306) | | | | | | | | | | | | | | | | | | | | | Cash flows from financing activities | Cash flows from financing activities | | | | | | | | Cash flows from financing activities | | | | | | | | | Additions to long-term debt | | | 5,503 | | | 206 | | Additions to long-term debt | | | 8,000 | | | 5,500 | | | Additions/(reductions) in short-term debt – net | | | (514) | | | (386) | | Reductions in long-term debt | | | (10) | | | - | | | Additions/(reductions) in debt with three months or less maturity | | | (5,413) | | | 9,869 | | Additions/(reductions) in short-term debt – net | | | (157) | | | (446) | | | Cash dividends to ExxonMobil shareholders | | | (8,644) | | | (8,125) | | Additions/(reductions) in debt with three months or less maturity | | | (3,956) | | | (6,222) | | | Cash dividends to noncontrolling interests | | | (172) | | | (225) | | Cash dividends to ExxonMobil shareholders | | | (2,910) | | | (2,732) | | | Changes in noncontrolling interests | | | - | | | (1) | | Cash dividends to noncontrolling interests | | | (40) | | | (58) | | | Tax benefits related to stock-based awards | | | 10 | | | 14 | | Common stock acquired | | | (1,781) | | | (3,860) | | | Common stock acquired | | | (9,865) | | | (12,696) | | Common stock sold | | | - | | | 2 | | | Common stock sold | | | 10 | | | 46 | | | Net cash used in financing activities | | | (854) | | | (7,816) | | | | Net cash used in financing activities | | | (19,085) | | | (11,298) | | | Effects of exchange rate changes on cash | Effects of exchange rate changes on cash | | | (170) | | | (191) | | Effects of exchange rate changes on cash | | | (224) | | | (24) | | Increase/(decrease) in cash and cash equivalents | Increase/(decrease) in cash and cash equivalents | | | 318 | | | (4,272) | | Increase/(decrease) in cash and cash equivalents | | | 568 | | | 957 | | Cash and cash equivalents at beginning of period | Cash and cash equivalents at beginning of period | | | 4,644 | | | 9,582 | | Cash and cash equivalents at beginning of period | | | 4,616 | | | 4,644 | | Cash and cash equivalents at end of period | Cash and cash equivalents at end of period | | | 4,962 | | | 5,310 | | Cash and cash equivalents at end of period | | | 5,184 | | | 5,601 | | | | | | | | | | | | | | | | | | | | | Supplemental Disclosures | Supplemental Disclosures | | | | | | | | Supplemental Disclosures | | | | | | | | | Income taxes paid | | | 14,338 | | | 19,871 | | Income taxes paid | | | 1,226 | | | 4,145 | | | Cash interest paid | | | 295 | | | 318 | | Cash interest paid | | | 170 | | | 87 | |
Non-Cash Transaction
In the third quarter of 2014, ExxonMobil completed an asset exchange, primarily a noncash transaction, of approximately $600 million. This amount is not included in the “Proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments” or the “Additions to property, plant and equipment” lines on the Statement of Cash Flows.
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
| EXXON MOBIL CORPORATION | | CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | | (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ExxonMobil Share of Equity | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | | | | | | | | | | | | | Other | | Common | | | | | | | | | | | | | | | | | | | | | Compre- | | Stock | | ExxonMobil | | Non- | | | | | | | | | Common | | Earnings | | hensive | | Held in | | Share of | | controlling | | Total | | | | | | Stock | | Reinvested | | Income | | Treasury | | Equity | | Interests | | Equity | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31, 2012 | | | 9,653 | | | 365,727 | | | (12,184) | | | (197,333) | | | 165,863 | | | 5,797 | | | 171,660 | | Amortization of stock-based awards | | | 593 | | | - | | | - | | | - | | | 593 | | | - | | | 593 | | Tax benefits related to stock-based | | | | | | | | | | | | | | | | | | | | | | | awards | | | 200 | | | - | | | - | | | - | | | 200 | | | - | | | 200 | | Other | | | (384) | | | - | | | - | | | - | | | (384) | | | 242 | | | (142) | | Net income for the period | | | - | | | 24,230 | | | - | | | - | | | 24,230 | | | 575 | | | 24,805 | | Dividends – common shares | | | - | | | (8,125) | | | - | | | - | | | (8,125) | | | (225) | | | (8,350) | | Other comprehensive income | | | - | | | - | | | (867) | | | - | | | (867) | | | (155) | | | (1,022) | | Acquisitions, at cost | | | - | | | - | | | - | | | (12,696) | | | (12,696) | | | (1) | | | (12,697) | | Dispositions | | | - | | | - | | | - | | | 431 | | | 431 | | | - | | | 431 | Balance as of September 30, 2013 | | | 10,062 | | | 381,832 | | | (13,051) | | | (209,598) | | | 169,245 | | | 6,233 | | | 175,478 | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31, 2013 | | | 10,077 | | | 387,432 | | | (10,725) | | | (212,781) | | | 174,003 | | | 6,492 | | | 180,495 | | Amortization of stock-based awards | | | 588 | | | - | | | - | | | - | | | 588 | | | - | | | 588 | | Tax benefits related to stock-based | | | | | | | | | | | | | | | | | | | | | | | | | awards | | | 10 | | | - | | | - | | | - | | | 10 | | | - | | | 10 | | Other | | | 6 | | | - | | | - | | | - | | | 6 | | | - | | | 6 | | Net income for the period | | | - | | | 25,950 | | | - | | | - | | | 25,950 | | | 883 | | | 26,833 | | Dividends – common shares | | | - | | | (8,644) | | | - | | | - | | | (8,644) | | | (172) | | | (8,816) | | Other comprehensive income | | | - | | | - | | | (1,471) | | | - | | | (1,471) | | | (295) | | | (1,766) | | Acquisitions, at cost | | | - | | | - | | | - | | | (9,865) | | | (9,865) | | | - | | | (9,865) | | Dispositions | | | - | | | - | | | - | | | 10 | | | 10 | | | - | | | 10 | Balance as of September 30, 2014 | | | 10,681 | | | 404,738 | | | (12,196) | | | (222,636) | | | 180,587 | | | 6,908 | | | 187,495 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Nine Months Ended September 30, 2014 | | | | | Nine Months Ended September 30, 2013 | | | | | | | | | Held in | | | | | | | | | | | Held in | | | | | Common Stock Share Activity | | Issued | | Treasury | | Outstanding | | | | | Issued | | Treasury | | Outstanding | | | | | (millions of shares) | | | | | (millions of shares) | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31 | | | 8,019 | | | (3,684) | | | 4,335 | | | | | | 8,019 | | | (3,517) | | | 4,502 | | | | Acquisitions | | | - | | | (100) | | | (100) | | | | | | - | | | (141) | | | (141) | | | | Dispositions | | | - | | | - | | | - | | | | | | - | | | 8 | | | 8 | | Balance as of September 30 | | | 8,019 | | | (3,784) | | | 4,235 | | | | | | 8,019 | | | (3,650) | | | 4,369 |
| EXXON MOBIL CORPORATION | | CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | | (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | ExxonMobil Share of Equity | | | | | | | | | | | | | | | | | Accumulated | | | | | | | | | | | | | | | | | | | | | | | Other | | Common | | | | | | | | | | | | | | | | | | | | | Compre- | | Stock | | ExxonMobil | | Non- | | | | | | | | | Common | | Earnings | | hensive | | Held in | | Share of | | controlling | | Total | | | | | | Stock | | Reinvested | | Income | | Treasury | | Equity | | Interests | | Equity | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31, 2013 | | | 10,077 | | | 387,432 | | | (10,725) | | | (212,781) | | | 174,003 | | | 6,492 | | | 180,495 | | Amortization of stock-based awards | | | 201 | | | - | | | - | | | - | | | 201 | | | - | | | 201 | | Tax benefits related to stock-based | | | | | | | | | | | | | | | | | | | | | | | awards | | | 3 | | | - | | | - | | | - | | | 3 | | | - | | | 3 | | Other | | | (5) | | | - | | | - | | | - | | | (5) | | | - | | | (5) | | Net income for the period | | | - | | | 9,100 | | | - | | | - | | | 9,100 | | | 270 | | | 9,370 | | Dividends – common shares | | | - | | | (2,732) | | | - | | | - | | | (2,732) | | | (58) | | | (2,790) | | Other comprehensive income | | | - | | | - | | | (315) | | | - | | | (315) | | | (211) | | | (526) | | Acquisitions, at cost | | | - | | | - | | | - | | | (3,860) | | | (3,860) | | | - | | | (3,860) | | Dispositions | | | - | | | - | | | - | | | 3 | | | 3 | | | - | | | 3 | Balance as of March 31, 2014 | | | 10,276 | | | 393,800 | | | (11,040) | | | (216,638) | | | 176,398 | | | 6,493 | | | 182,891 | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31, 2014 | | | 10,792 | | | 408,384 | | | (18,957) | | | (225,820) | | | 174,399 | | | 6,665 | | | 181,064 | | Amortization of stock-based awards | | | 213 | | | - | | | - | | | - | | | 213 | | | - | | | 213 | | Tax benefits related to stock-based | | | | | | | | | | | | | | | | | | | | | | | | | awards | | | 3 | | | - | | | - | | | - | | | 3 | | | - | | | 3 | | Other | | | (2) | | | - | | | - | | | - | | | (2) | | | - | | | (2) | | Net income for the period | | | - | | | 4,940 | | | - | | | - | | | 4,940 | | | 135 | | | 5,075 | | Dividends – common shares | | | - | | | (2,910) | | | - | | | - | | | (2,910) | | | (40) | | | (2,950) | | Other comprehensive income | | | - | | | - | | | (3,638) | | | - | | | (3,638) | | | (541) | | | (4,179) | | Acquisitions, at cost | | | - | | | - | | | - | | | (1,781) | | | (1,781) | | | - | | | (1,781) | | Dispositions | | | - | | | - | | | - | | | 3 | | | 3 | | | - | | | 3 | Balance as of March 31, 2015 | | | 11,006 | | | 410,414 | | | (22,595) | | | (227,598) | | | 171,227 | | | 6,219 | | | 177,446 | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Three Months Ended March 31, 2015 | | | | | Three Months Ended March 31, 2014 | | | | | | | | | Held in | | | | | | | | | | | Held in | | | | | Common Stock Share Activity | | Issued | | Treasury | | Outstanding | | | | | Issued | | Treasury | | Outstanding | | | | | (millions of shares) | | | | | (millions of shares) | | | | | | | | | | | | | | | | | | | | | | | | | | | Balance as of December 31 | | | 8,019 | | | (3,818) | | | 4,201 | | | | | | 8,019 | | | (3,684) | | | 4,335 | | | | Acquisitions | | | - | | | (20) | | | (20) | | | | | | - | | | (41) | | | (41) | | | | Dispositions | | | - | | | - | | | - | | | | | | - | | | - | | | - | | Balance as of March 31 | | | 8,019 | | | (3,838) | | | 4,181 | | | | | | 8,019 | | | (3,725) | | | 4,294 |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
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 20132014 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. Prior data has been reclassified in certain cases to conform to the current presentation basis. The Corporation's exploration and production activities are accounted for under the "successful efforts" method. 2. Recently Issued Accounting Standard In May 2014, the Financial Accounting Standards Board issued a new standard, Revenue from Contracts with Customers. The standard establishes a single revenue recognition model for all contracts with customers, eliminates industry specific requirements, and expands disclosure requirements. The standard is required to be adopted beginning January 1, 2017. ExxonMobil is evaluating the standard and its effect on the Corporation’s 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. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters as well as other matters which management believes should be disclosed. 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 material adverse effect upon the Corporation's operations, financial condition, or financial statements taken as a whole. Other Contingencies The Corporation and certain of its consolidated subsidiaries were contingently liable at September 30, 2014,March 31, 2015, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. 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. | | | | | | As of September 30, 2014 | | | | | | | | | Equity | | | Other | | | | | | | | | | | | Company | | | Third Party | | | | | | | | | | | | Obligations (1) | | | Obligations | | | Total | | | | | | | | | (millions of dollars) | | | | Guarantees | | | | | | | | | | | | | | Debt-related | | | 3,398 | | | 44 | | | 3,442 | | | | | Other | | | 3,267 | | | 4,273 | | | 7,540 | | | | | | Total | | | 6,665 | | | 4,317 | | | 10,982 | | | | | | | | | | | | | | | | | | | (1) ExxonMobil share | | | | | | | | | | | |
| | | | | | As of March 31, 2015 | | | | | | | | | Equity | | | Other | | | | | | | | | | | | Company | | | Third Party | | | | | | | | | | | | Obligations (1) | | | Obligations | | | Total | | | | | | | | | (millions of dollars) | | | | Guarantees | | | | | | | | | | | | | | Debt-related | | | 88 | | | 38 | | | 126 | | | | | Other | | | 3,141 | | | 3,733 | | | 6,874 | | | | | | Total | | | 3,229 | | | 3,771 | | | 7,000 | | | | | | | | | | | | | | | | | | | (1) ExxonMobil share | | | | | | | | | | | |
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, 2014,March 31, 2015, 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 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 the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million. On September 6, 2007, affiliates of ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) invoking ICSID jurisdiction under Venezuela’s Investment Law and the Netherlands-Venezuela Bilateral Investment Treaty.. The ICSID Tribunal issued a decision on June 10, 2010, finding that it had jurisdiction to proceed on the basis of the Netherlands-Venezuela Bilateral Investment Treaty. On October 9, 2014, the ICSID Tribunal issued its final award finding in favor of the ExxonMobil affiliates and awarding $1.6 billion as of the date of expropriation, June 27, 2007, and interest from that date at 3.25% compounded annually until the date of payment in full. The Tribunal also noted that one of the Cerro Negro Project agreements provides a mechanism to prevent double recovery between the ICISDICSID award and all or part of an earlier award of $908 million to an ExxonMobil affiliate, Mobil Cerro Negro, Ltd., against PdVSA and a PdVSA affiliate, PdVSA CN, in an arbitration under the rules of the International Chamber of Commerce (ICC). Judgment was entered on the ICSID award by the United States District Court for the Southern District of New York on October 10, 2014. AThe Republic of Venezuela filed a motion to vacate that judgment on procedural grounds was filed by the Republic of Venezuela on October 14, 2014, and is pending beforelater, a motion to modify the court. judgment by reducing the rate of interest to be paid on the ICSID award from the entry of the court’s judgment, until the date of payment. The court denied the Republic of Venezuela’s two motions on February 13, 2015, and March 4, 2015, respectively. The Republic of Venezuela filed a notice of appeal of the court’s actions on the two motions on March 9, 2015. On October 23, 2014, the Republic of Venezuela filed with ICSID an application to revise the ICSID award such that it requires repayment of the value of the ICC award to PdVSA at the same time as payment is made to the ExxonMobil affiliates for the ICSID award and that provision be made for interest on the amount to be repaid. Thereafter, pursuant to ICSID arbitration rules, the ICSID award was stayed pending further action of the Tribunal. On October 27, 2014, ExxonMobil filed a response with ICSID that contests the application for revision of that award on both factual and jurisdictional grounds. On February 2, 2015, the Republic of Venezuela filed an application to annul the ICSID award. The application alleges that, in issuing the ICSID award, the Tribunal exceeded its powers, failed to state reasons on which the ICSID award was based, and departed from a fundamental rule of procedure. Upon registration of this application with ICSID on February 9, 2015, a further stay of the ICSID award was entered. The federal court in New York has yet to be satisfied and proceedings concerningstayed its judgment until such time as the stays of the ICSID award remain pending and soentered following the Government of Venezuela’s filing of its two applications have been lifted. The net impact of these matters on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.
An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award. The Contractors have appealed that judgment. In June 2013, the Contractors filed a lawsuit against NNPC in the Nigerian federal high court in order to preserve their ability to seek enforcement of the PSC in the courts if necessary. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. At this time, the net impact of this matter on the Corporation's consolidated financial results cannot be reasonably estimated. However, regardless of the outcome of enforcement proceedings, the Corporation does not expect the proceedings to have a material effect upon the Corporation's operations or financial condition.
3.4. Other Comprehensive Income Information
| | | | | | Cumulative | | | Post- | | | | | | | | | | | Foreign | | | retirement | | | Unrealized | | | | | | | | Exchange | | | Benefits | | | Change in | | | ExxonMobil Share of Accumulated Other | | | Translation | | | Reserves | | | Stock | | | Comprehensive Income | | | Adjustment | | | Adjustment | | | Investments | Total | | | | | (millions of dollars) | | | | | | | | | | | | | | | | Balance as of December 31, 2012 | | | 2,410 | | | (14,594) | | | - | (12,184) | | Current period change excluding amounts reclassified | | | | | | | | | | | | | from accumulated other comprehensive income | | | (2,118) | | | (52) | | | - | (2,170) | | Amounts reclassified from accumulated other | | | | | | | | | | | | | comprehensive income | | | - | | | 1,303 | | | - | 1,303 | | Total change in accumulated other comprehensive income | | | (2,118) | | | 1,251 | | | - | (867) | | Balance as of September 30, 2013 | | | 292 | | | (13,343) | | | - | (13,051) | | | | | | | | | | | | | | | | Balance as of December 31, 2013 | | | (846) | | | (9,879) | | | - | (10,725) | | Current period change excluding amounts reclassified | | | | | | | | | | | | | from accumulated other comprehensive income | | | (2,637) | | | 176 | | | (57) | (2,518) | | Amounts reclassified from accumulated other | | | | | | | | | | | | | comprehensive income | | | 163 | | | 884 | | | - | 1,047 | | Total change in accumulated other comprehensive income | | | (2,474) | | | 1,060 | | | (57) | (1,471) | | Balance as of September 30, 2014 | | | (3,320) | | | (8,819) | | | (57) | (12,196) |
| | | | | | Cumulative | | | Post- | | | | | | | | | | | | | Foreign | | | retirement | | | Unrealized | | | | | | | | | | Exchange | | | Benefits | | | Change in | | | | | ExxonMobil Share of Accumulated Other | | | Translation | | | Reserves | | | Stock | | | | | Comprehensive Income | | | Adjustment | | | Adjustment | | | Investments | | | Total | | | | | (millions of dollars) | | | | | | | | | | | | | | | | | | Balance as of December 31, 2013 | | | (846) | | | (9,879) | | | - | | | (10,725) | | Current period change excluding amounts reclassified | | | | | | | | | | | | | | | from accumulated other comprehensive income | | | (555) | | | (93) | | | (54) | | | (702) | | Amounts reclassified from accumulated other | | | | | | | | | | | | | | | comprehensive income | | | 82 | | | 305 | | | - | | | 387 | | Total change in accumulated other comprehensive income | | | (473) | | | 212 | | | (54) | | | (315) | | Balance as of March 31, 2014 | | | (1,319) | | | (9,667) | | | (54) | | | (11,040) | | | | | | | | | | | | | | | | | | Balance as of December 31, 2014 | | | (5,952) | | | (12,945) | | | (60) | | | (18,957) | | Current period change excluding amounts reclassified | | | | | | | | | | | | | | | from accumulated other comprehensive income | | | (4,784) | | | 796 | | | 2 | | | (3,986) | | Amounts reclassified from accumulated other | | | | | | | | | | | | | | | comprehensive income | | | - | | | 340 | | | 8 | | | 348 | | Total change in accumulated other comprehensive income | | | (4,784) | | | 1,136 | | | 10 | | | (3,638) | | Balance as of March 31, 2015 | | | (10,736) | | | (11,809) | | | (50) | | | (22,595) |
| | | | | | | | | | | | | | | | | | Three Months Ended | | | Nine Months Ended | | Amounts Reclassified Out of Accumulated Other | | | September 30, | | | September 30, | | Comprehensive Income - Before-tax Income/(Expense) | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | | (millions of dollars) | | | | | | | | | | | | | | | | | | Foreign exchange translation gain/(loss) included in net income | | | | | | | | | | | | | (Statement of Income line: Other income) | - | | | - | | | (163) | | | - | | Amortization and settlement of postretirement benefits reserves | | | | | | | | | | | | | adjustment included in net periodic benefit costs (1) | (430) | | | (648) | | | (1,315) | | | (1,951) | | | | | | | | | | | | | | | | |
| | | | | | | | | | Three Months Ended | | Amounts Reclassified Out of Accumulated Other | | | | | | | March 31, | | Comprehensive Income - Before-tax Income/(Expense) | | | | 2015 | | | 2014 | | | | | | | | | | | (millions of dollars) | | | | | | | | | | | | | | | | Foreign exchange translation gain/(loss) included in net income | | | | | | | | (Statement of Income line: Other income) | | | | - | | | (82) | | Amortization and settlement of postretirement benefits reserves | | | | | | | | | | adjustment included in net periodic benefit costs (1) | (511) | | | (451) | | Realized change in fair value of stock investments included in net income | | | | | | | (Statement of Income line: Other income) | (12) | | | - | | | | | | | | | | | | | | |
(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 56 – Pension and Other Postretirement Benefits for additional details.)
| | | | | | Three Months Ended | | | Nine Months Ended | | Income Tax (Expense)/Credit For | | | September 30, | | | September 30, | | Components of Other Comprehensive Income | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | | (millions of dollars) | | | | | | | | | | | | | | | | | | Foreign exchange translation adjustment | | | 70 | | | (16) | | | 99 | | | 100 | | Postretirement benefits reserves adjustment | | | | | | | | | | | | | | | (excluding amortization) | | | (138) | | | 85 | | | (61) | | | 28 | | Amortization and settlement of postretirement benefits reserves | | | | | | | | | | | | | | adjustment included in net periodic benefit costs | | | (141) | | | (193) | | | (397) | | | (598) | | Unrealized change in fair value of stock investments | | 11 | | | - | | | 30 | | | - | | Total | | | (198) | | | (124) | | | (329) | | | (470) |
| | | | | | | | | | | | Three Months Ended | | Income Tax (Expense)/Credit For | | | | | | | | | March 31, | | Components of Other Comprehensive Income | | | | | | | | | 2015 | | | 2014 | | | | | | | | | | | | | (millions of dollars) | | | | | | | | | | | | | | | | | | Foreign exchange translation adjustment | | | | | | | | | 90 | | | (32) | | Postretirement benefits reserves adjustment (excluding amortization) | | | (377) | | | 50 | | Amortization and settlement of postretirement benefits reserves | | | | | | | | | adjustment included in net periodic benefit costs | | | (160) | | | (135) | | Unrealized change in fair value of stock investments | | | (1) | | | 29 | | Realized change in fair value of stock investments | | | | | | | | | included in net income | | | (4) | | | - | | Total | | | | | | | | | (452) | | | (88) |
4.5. Earnings Per Share
| | | | | Three Months Ended | | | Nine Months Ended | | | | | | September 30, | | | September 30, | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | | | | | | | | | | | | | Earnings per common share | | | | | | | | | | | | | Net income attributable to ExxonMobil (millions of dollars) | | 8,070 | | | 7,870 | | | 25,950 | | | 24,230 | | | | | | | | | | | | | | | Weighted average number of common shares | | | | | | | | | | | | | | outstanding (millions of shares) | | 4,267 | | | 4,395 | | | 4,297 | | | 4,438 | | | | | | | | | | | | | | | | | Earnings per common share (dollars) (1) | | 1.89 | | | 1.79 | | | 6.04 | | | 5.46 | | | | | | | | | | | | | | | |
| | | | | | | Three Months Ended | | | | | | | | | March 31, | | | | | | | | | 2015 | | | 2014 | | | | | | | | | | | | | | | Earnings per common share | | | | | | | | | | | | | | | | | | | | | | Net income attributable to ExxonMobil (millions of dollars) | | | 4,940 | | | 9,100 | | | | | | | | | | | | | Weighted average number of common shares outstanding (millions of shares) | | | 4,211 | | | 4,328 | | | | | | | | | | | | | | | Earnings per common share (dollars) (1) | | | | 1.17 | | | 2.10 | | | | | | | | | | | | | |
(1) The calculation of earnings per common share and earnings per common share – assuming dilution are the same in each period shown. 5.6. Pension and Other Postretirement Benefits
| | | | | | | Three Months Ended | | | Nine Months Ended | | | | | | | | September 30, | | | September 30, | | | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | | | | | | | | | | | | | | | | | | | | (millions of dollars) | | Components of net benefit cost | | | | | | | | | | | | | | | Pension Benefits - U.S. | | | | | | | | | | | | | | | | Service cost | | | 156 | | | 206 | | | 515 | | | 581 | | | | Interest cost | | | 202 | | | 188 | | | 605 | | | 562 | | | | Expected return on plan assets | | | (200) | | | (209) | | | (600) | | | (626) | | | | Amortization of actuarial loss/(gain) and prior | | | | | | | | | | | | | | | | | service cost | | | 105 | | | 165 | | | 313 | | | 493 | | | | Net pension enhancement and | | | | | | | | | | | | | | | | | curtailment/settlement cost | | | 113 | | | 182 | | | 338 | | | 546 | | | | Net benefit cost | | | 376 | | | 532 | | | 1,171 | | | 1,556 | | | | | | | | | | | | | | | | | | | | Pension Benefits - Non-U.S. | | | | | | | | | | | | | | | | Service cost | | | 144 | | | 170 | | | 448 | | | 521 | | | | Interest cost | | | 285 | | | 265 | | | 859 | | | 803 | | | | Expected return on plan assets | | | (300) | | | (278) | | | (899) | | | (841) | | | | Amortization of actuarial loss/(gain) and prior | | | | | | | | | | | | | | | | | service cost | | | 183 | | | 239 | | | 564 | | | 724 | | | | Net pension enhancement and | | | | | | | | | | | | | | | | | curtailment/settlement cost | | | - | | | 1 | | | - | | | 2 | | | | Net benefit cost | | | 312 | | | 397 | | | 972 | | | 1,209 | | | | | | | | | | | | | | | | | | | | Other Postretirement Benefits | | | | | | | | | | | | | | | | Service cost | | | 32 | | | 44 | | | 107 | | | 123 | | | | Interest cost | | | 89 | | | 87 | | | 293 | | | 264 | | | | Expected return on plan assets | | | (9) | | | (10) | | | (29) | | | (30) | | | | Amortization of actuarial loss/(gain) and prior | | | | | | | | | | | | | | | | | service cost | | | 29 | | | 61 | | | 100 | | | 186 | | | | Net benefit cost | | | 141 | | | 182 | | | 471 | | | 543 |
| | | | | | | | Three Months Ended | | | | | | | | | March 31, | | | | | | | | | 2015 | | | 2014 | | | | | | | | | (millions of dollars) | | Components of net benefit cost | | | | | | | | | | Pension Benefits - U.S. | | | | | | | | | | | Service cost | | | | 195 | | | 177 | | | | Interest cost | | | | 196 | | | 202 | | | | Expected return on plan assets | | | | (207) | | | (200) | | | | Amortization of actuarial loss/(gain) and prior service cost | | | 138 | | | 104 | | | | Net pension enhancement and curtailment/settlement cost | | | 117 | | | 112 | | | | Net benefit cost | | | | 439 | | | 395 | | | | | | | | | | | | | | | | | | | | | | | | | | | Pension Benefits - Non-U.S. | | | | | | | | | | | Service cost | | | | 176 | | | 150 | | | | Interest cost | | | | 218 | | | 285 | | | | Expected return on plan assets | | | | (278) | | | (298) | | | | Amortization of actuarial loss/(gain) and prior service cost | | | 211 | | | 192 | | | | Net benefit cost | | | | 327 | | | 329 | | | | | | | | | | | | | | | | | | | | | | | | | | | Other Postretirement Benefits | | | | | | | | | | | Service cost | | | | 37 | | | 37 | | | | Interest cost | | | | 90 | | | 92 | | | | Expected return on plan assets | | | | (7) | | | (9) | | | | Amortization of actuarial loss/(gain) and prior service cost | | | 45 | | | 43 | | | | Net benefit cost | | | | 165 | | | 163 | | | | | | | | | | | | |
6.7. Financial Instruments
The fair value of financial instruments is determined by reference to observable market data and other valuation techniques as appropriate. The only category of financial instruments where the difference between fair value and recorded book value is notable is long-term debt. The estimated fair value of total long-term debt, excluding capitalized lease obligations, was $11,568$19,735 million at September 30, 2014,March 31, 2015, and $6,787$11,660 million at December 31, 2013,2014, as compared to recorded book values of $11,238$19,155 million at September 30, 2014,March 31, 2015, and $6,516$11,278 million at December 31, 2013.2014. The increase in the estimated fair value and book value of long-term debt reflects the Corporation’s issuance of $5,500 million$8.0 billion of long-term debt in the first quarter of 2014.2015. The $5,500 million$8.0 billion of long-term debt is comprised of $750 million of floating-rate notes due in 2017, $500 million of floating-rate notes due in 2019,2018, $500 million of floating-rate notes due in 2022, $1,600 million of 1.305% notes due in 2018, $1,500 million of 0.921%1.912% notes due in 2017,2020, $1,150 million of 2.397% notes due in 2022, $1,750 million of 1.819%2.709% notes due in 2019,2025, and $1,000 million of 3.176%3.567% notes due in 2024.2045. The fair value of long-term debt by hierarchy level at September 30, 2014,March 31, 2015, is: Level 1 $10,868$19,226 million; Level 2 $637$446 million; and Level 3 $63 million. Level 1 represents quoted prices in active markets. Level 2 includes debt whose fair value is based upon a publicly available index. Level 3 involves using internal data augmented by relevant market indicators if available. 7.8. Disclosures about Segments and Related Information
| | | | | | Three Months Ended | | | Nine Months Ended | | | | | | | September 30, | | | September 30, | | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | Earnings After Income Tax | | (millions of dollars) | | | Upstream | | | | | | | | | | | | | | | | United States | | | 1,257 | | | 1,050 | | | 3,694 | | | 3,005 | | | | Non-U.S. | | | 5,159 | | | 5,663 | | | 18,386 | | | 17,050 | | | Downstream | | | | | | | | | | | | | | | | United States | | | 460 | | | 315 | | | 1,619 | | | 1,602 | | | | Non-U.S. | | | 564 | | | 277 | | | 929 | | | 931 | | | Chemical | | | | | | | | | | | | | | | | United States | | | 765 | | | 680 | | | 1,972 | | | 1,947 | | | | Non-U.S. | | | 435 | | | 345 | | | 1,116 | | | 971 | | | All other | | | (570) | | | (460) | | | (1,766) | | | (1,276) | | | Corporate total | | | 8,070 | | | 7,870 | | | 25,950 | | | 24,230 | | | | | | | | | | | | | | | | | | Sales and Other Operating Revenue (1) | | | | | | | | | | | | | | | Upstream | | | | | | | | | | | | | | | | United States | | | 4,133 | | | 3,416 | | | 12,780 | | | 9,516 | | | | Non-U.S. | | | 5,367 | | | 5,829 | | | 17,607 | | | 18,931 | | | Downstream | | | | | | | | | | | | | | | | United States | | | 31,367 | | | 32,032 | | | 94,210 | | | 92,995 | | | | Non-U.S. | | | 52,580 | | | 57,179 | | | 157,044 | | | 164,066 | | | Chemical | | | | | | | | | | | | | | | | United States | | | 3,920 | | | 3,873 | | | 11,546 | | | 11,479 | | | | Non-U.S. | | | 6,196 | | | 6,058 | | | 18,280 | | | 17,813 | | | All other | | | 3 | | | 3 | | | 17 | | | 18 | | | Corporate total | | | 103,566 | | | 108,390 | | | 311,484 | | | 314,818 | | | | | | | | | | | | | | | | | | (1) | Includes sales-based taxes | | | | | | | | | | | | | | | | | | | | | | | | | | | | Intersegment Revenue | | | | | | | | | | | | | | | Upstream | | | | | | | | | | | | | | | | United States | | | 1,866 | | | 2,015 | | | 6,133 | | | 6,324 | | | | Non-U.S. | | | 10,466 | | | 12,505 | | | 31,327 | | | 35,097 | | | Downstream | | | | | | | | | | | | | | | | United States | | | 4,390 | | | 5,056 | | | 13,446 | | | 15,312 | | | | Non-U.S. | | | 11,086 | | | 14,099 | | | 36,485 | | | 39,263 | | | Chemical | | | | | | | | | | | | | | | | United States | | | 2,775 | | | 2,971 | | | 7,962 | | | 9,157 | | | | Non-U.S. | | | 2,328 | | | 2,352 | | | 7,052 | | | 6,407 | | | All other | | | 69 | | | 66 | | | 207 | | | 204 |
| | | | | | | Three Months Ended | | | | | | | | March 31, | | | | | | | | 2015 | | | 2014 | | Earnings After Income Tax | | | | (millions of dollars) | | | Upstream | | | | | | | | | | | United States | | | | (52) | | | 1,244 | | | | Non-U.S. | | | | 2,907 | | | 6,539 | | | Downstream | | | | | | | | | | | United States | | | | 567 | | | 623 | | | | Non-U.S. | | | | 1,100 | | | 190 | | | Chemical | | | | | | | | | | | United States | | | | 605 | | | 679 | | | | Non-U.S. | | | | 377 | | | 368 | | | All other | | | | (564) | | | (543) | | | Corporate total | | | | 4,940 | | | 9,100 | | | | | | | | | | | | | Sales and Other Operating Revenue (1) | | | | | | | | | | Upstream | | | | | | | | | | | United States | | | | 2,125 | | | 3,874 | | | | Non-U.S. | | | | 4,122 | | | 5,827 | | | Downstream | | | | | | | | | | | United States | | | | 18,389 | | | 30,412 | | | | Non-U.S. | | | | 33,162 | | | 51,288 | | | Chemical | | | | | | | | | | | United States | | | | 2,792 | | | 3,876 | | | | Non-U.S. | | | | 4,166 | | | 6,032 | | | All other | | | | 2 | | | 3 | | | Corporate total | | | | 64,758 | | | 101,312 | | | | | | | | | | | | | (1) Includes sales-based taxes | | | | | | | | | | | | | | | | | | Intersegment Revenue | | | | | | | | | | Upstream | | | | | | | | | | | United States | | | | 1,180 | | | 2,063 | | | | Non-U.S. | | | | 4,857 | | | 10,781 | | | Downstream | | | | | | | | | | | United States | | | | 3,076 | | | 4,909 | | | | Non-U.S. | | | | 5,273 | | | 12,842 | | | Chemical | | | | | | | | | | | United States | | | | 1,773 | | | 2,634 | | | | Non-U.S. | | | | 1,321 | | | 2,267 | | | All other | | | | 68 | | | 67 |
EXXON MOBIL CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FUNCTIONAL EARNINGS SUMMARY | FUNCTIONAL EARNINGS SUMMARY | FUNCTIONAL EARNINGS SUMMARY | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter | | | First Nine Months | | | | First Three Months | Earnings (U.S. GAAP) | Earnings (U.S. GAAP) | | | 2014 | | | 2013 | | 2014 | | | 2013 | Earnings (U.S. GAAP) | | | 2015 | | | 2014 | | | | (millions of dollars) | | | | (millions of dollars) | Upstream | Upstream | | | | | | | | | | | | | Upstream | | | | | | | | United States | | | 1,257 | | | 1,050 | | 3,694 | | | 3,005 | United States | | | (52) | | | 1,244 | | Non-U.S. | | | 5,159 | | | 5,663 | | 18,386 | | | 17,050 | Non-U.S. | | | 2,907 | | | 6,539 | Downstream | Downstream | | | | | | | | | | | | Downstream | | | | | | | | United States | | | 460 | | | 315 | | 1,619 | | | 1,602 | United States | | | 567 | | | 623 | | Non-U.S. | | | 564 | | | 277 | | 929 | | | 931 | Non-U.S. | | | 1,100 | | | 190 | Chemical | Chemical | | | | | | | | | | | | Chemical | | | | | | | | United States | | | 765 | | | 680 | | 1,972 | | | 1,947 | United States | | | 605 | | | 679 | | Non-U.S. | | | 435 | | | 345 | | 1,116 | | | 971 | Non-U.S. | | | 377 | | | 368 | Corporate and financing | Corporate and financing | | | (570) | | | (460) | | (1,766) | | | (1,276) | Corporate and financing | | | (564) | | | (543) | | Net Income attributable to ExxonMobil (U.S. GAAP) | | | 8,070 | | | 7,870 | | 25,950 | | | 24,230 | Net Income attributable to ExxonMobil | | | 4,940 | | | 9,100 | | | | | �� | | | | | | | | | | | | | | | | Earnings per common share (dollars) | Earnings per common share (dollars) | | | 1.89 | | | 1.79 | | 6.04 | | | 5.46 | Earnings per common share (dollars) | | | 1.17 | | | 2.10 | Earnings per common share - assuming dilution (dollars) | | Earnings per common share - assuming dilution (dollars) | | 1.17 | | | 2.10 | | | | | | | | | | | | | | | | | | | | Earnings per common share - assuming dilution (dollars) | | | 1.89 | | | 1.79 | | 6.04 | | | 5.46 | |
References in this discussion to corporate earnings mean net income attributable to ExxonMobil (U.S. GAAP) from the consolidated income statement. Unless otherwise indicated, references to earnings, Upstream, Downstream, Chemical and Corporate and Financing segment earnings, and earnings per share are ExxonMobil's share after excluding amounts attributable to noncontrolling interests. REVIEW OF THIRDFIRST QUARTER 20142015 RESULTS Earnings in the period rose 3 percent from the thirdExxonMobil’s first quarter 2015 earnings of 2013, driven by higher margins and improved operations in the Downstream and Chemical businesses, partially offset by the impact of lower Upstream realizations.
ExxonMobil’s quarterly results$4.9 billion, or $1.17 per diluted share, demonstrate the strengthvalue of ourthe Company’s integrated businesses in a lower commodity price environment. Regardless of current market conditions, the Company remains focused on business model. Integration across Upstream, Downstreamfundamentals and Chemical gives us competitive advantages in scale, efficiency, technical and commercial capabilities, regardless of market fluctuations over the business cycle.
Earnings of $25,950 million in the first nine months of 2014 increased $1,720 million from 2013. that create long‑term shareholder value.
Earnings per share – assuming dilution for the first nine months of 2014 increased 11 percent to $6.04.
Capital and exploration expenditures for the first nine months of 2014 were $28.1 billion, down 14 percent from 2013.
Through the first nine months of 2014, the Corporation distributed $17.6 billion to shareholders through dividends and share purchases to reduce shares outstanding.
| | | | | Third Quarter | | | First Nine Months | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | (millions of dollars) | Upstream earnings | | | | | | | | | | | | | | United States | | | 1,257 | | | 1,050 | | | 3,694 | | | 3,005 | | Non-U.S. | | | 5,159 | | | 5,663 | | | 18,386 | | | 17,050 | | | Total | | | 6,416 | | | 6,713 | | | 22,080 | | | 20,055 |
| | | | | First Three Months | | | | | | 2015 | | | 2014 | | | | | | (millions of dollars) | Upstream earnings | | | | | | | | United States | | | (52) | | | 1,244 | | Non-U.S. | | | 2,907 | | | 6,539 | | | Total | | | 2,855 | | | 7,783 |
Upstream earnings were $6,416$2,855 million in the third quarterfirst three months of 2014,2015, down $297$4,928 million from the thirdfirst quarter of 2013.2014. Lower liquids and gas realizations decreased earnings by $670 million. Favorable volume$5.5 billion. Higher volumes and mix effects increased earnings by $340 million.million, reflecting growth from new developments. All other items, including favorable tax effects, increased earnings by $30$250 million. On an oil‑equivalent basis, production decreased 4.7increased 2.3 percent from the thirdfirst quarter of 2013. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 1 percent, with liquids up 0.6 percent and gas down 2.9 percent. 2014. Liquids production totaled 2,065 kbd (thousands of2.3 million barrels per day), down 134 kbd from the third quarter of 2013. The Abu Dhabi onshore concession expiry reduced volumes by 148 kbd. Excluding this impact, liquids production wasday, up slightly as project ramp‑up and work programs more than offset field decline, divestment impacts and higher downtime. Third quarter129,000 barrels per day, while natural gas production was 10,595 mcfd (millions of11.8 billion cubic feet per day),day, down 319 mcfd188 million cubic feet per day from 2013. Field decline2014. Project ramp‑up and lower entitlement volumeseffects were partly offset by new production from Papua New Guineafield decline and work programs.maintenance activities.
Earnings fromThe U.S. Upstream operations were $1,257recorded a loss of $52 million, $207down $1,296 million higher thanfrom the thirdfirst quarter of 2013. Non‑U.S.2014. Non-U.S. Upstream earnings were $5,159$2,907 million, down $504 million from the prior year.
Upstream earnings in the first nine months of 2014 were $22,080 million, up $2,025 million from 2013. Lower prices and volumes were more than offset by favorable mix effects, increasing earnings by a net $470 million. All other items, primarily asset sales, increased earnings by $1.6 billion.
On an oil‑equivalent basis, production was down 5.3 percent compared to the same period in 2013. Excluding the impact of the expiry of the Abu Dhabi onshore concession, production decreased 2 percent.
Liquids production of 2,087 kbd decreased 105 kbd compared to 2013. The Abu Dhabi onshore concession expiry reduced volumes by 137 kbd. Excluding this impact, liquids production was up 1.5 percent, driven by project ramp‑up and work programs.
Natural gas production of 11,115 mcfd decreased 703 mcfd from 2013, as expected U.S. field decline and lower European demand were partially offset by project ramp‑up and work programs.
Earnings from U.S. Upstream operations were $3,694 million, up $689 million from 2013. Non‑U.S. Upstream earnings were $18,386 million, up $1,336$3,632 million from the prior year.
| | | | Third Quarter | | | First Nine Months | | | First Quarter | Upstream additional information | Upstream additional information | | | | (thousands of barrels daily) | | Upstream additional information | | (thousands of barrels daily) | Volumes reconciliation (Oil-equivalent production)(1) | Volumes reconciliation (Oil-equivalent production)(1) | | | | | | | | | Volumes reconciliation (Oil-equivalent production) (1) | | | | | 2013 | | | | 4,018 | | | | 4,162 | | | 2014 | | 2014 | | | | 4,151 | | | Entitlements - Net interest | | | | (2) | | | | (3) | | Entitlements - Net Interest | | | | (35) | | | Entitlements - Price / spend | | | | (44) | | | | (45) | | Entitlements - Price / Spend / Other | | | | 176 | | | Quotas | | | | - | | | | - | | Quotas | | | | - | | | Divestments | | | | (36) | | | | (28) | | Divestments | | | | (38) | | | United Arab Emirates onshore concession expiry | | | | (148) | | | | (137) | | Growth / Other | | | | (6) | | | Net growth | | | | 43 | | | | (9) | | | 2014 | | | | 3,831 | | | | 3,940 | | | 2015 | | 2015 | | | | 4,248 | | | | | | | | | | | | | | | | | | | (1) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels. | (1) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels. | | | (1) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels. |
Listed below are descriptions of ExxonMobil’s entitlement volume effects. These descriptionsvolumes reconciliation factors which are provided to facilitate understanding of the terms. Production Sharing Contract (PSC)Entitlements - Net Interest Reductions are contractual reductions inchanges to ExxonMobil’s share of production volumes coveredcaused by PSCs.non-operational changes to volume-determining factors. These reductionsfactors consist of net interest changes specified in Production Sharing Contracts (PSCs) which typically occur when cumulative investment returns or production volumes achieve defined thresholds, changes in equity upon achieving pay-out in partner investment carry situations, equity redeterminations as specified in venture agreements, or as a result of the PSCs.termination or expiry of a concession. Once a net interest reductionchange has occurred, it typically will not be reversed by subsequent events, such as lower crude oil prices.
Entitlements - Price, Spend and Spend Impacts on VolumesOther are fluctuations inchanges to ExxonMobil’s share of production volumes caused byresulting from temporary changes to non-operational volume-determining factors. These factors include changes in oil and gas prices or spending levels from one period to another. For example, at higher prices, fewer barrels are required for ExxonMobil to recover its costs. According to the terms of contractual arrangements or government royalty regimes, price or spending variability can increase or decrease royalty burdens and/or volumes attributable to ExxonMobil. For example, at higher prices, fewer barrels are required for ExxonMobil to recover its costs. These effects generally vary from period to period with field spending patterns or market prices for crude oil orand natural gas.
| | | | | Third Quarter | | | First Nine Months | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | (millions of dollars) | Downstream earnings | | | | | | | | | | | | | | United States | | | 460 | | | 315 | | | 1,619 | | | 1,602 | | Non-U.S. | | | 564 | | | 277 | | | 929 | | | 931 | | | Total | | | 1,024 | | | 592 | | | 2,548 | | | 2,533 |
Downstream earnings were $1,024 million Such factors can also include other temporary changes in the third quarter of 2014, up $432 million from 2013. Stronger margins, primarily refining, increased earningsnet interest as dictated by $820 million. Volume and mix effects increased earnings by $100 million. All other items, primarily foreign exchange impacts, decreased earnings by $490 million. Petroleum product sales of 5,999 kbd were 32 kbd lower than last year's third quarter.specific provisions in production agreements.
EarningsQuotas are changes in ExxonMobil’s allowable production arising from production constraints imposed by countries which are members of the U.S. Downstream were $460 million, up $145 million fromOrganization of the third quarter of 2013. Non‑U.S. Downstream earnings of $564 million were $287 million higher than last year.
Downstream earnings of $2,548 millionPetroleum Exporting Countries (OPEC). Volumes reported in this category would have been readily producible in the first nine monthsabsence of 2014 increased $15 million from 2013. Lower margins, mainly refining, decreased earnings by $280 million. Volume and mix effects increased earnings by $460 million. All other items, primarily unfavorable foreign exchange and tax impacts, partially offset by lower operating expenses, decreased earnings by $160 million. Petroleum product sales of 5,886 kbd increased 35 kbd from 2013.the quota.
U.S. Downstream earnings were $1,619 million, up $17 millionDivestments are reductions in ExxonMobil’s production arising from 2013. Non‑U.S. Downstream earnings were $929 million,commercial arrangements to fully or partially reduce equity in a decrease of $2 millionfield or asset in exchange for financial or other economic consideration.
Growth and Other factors comprise all other operational and non-operational factors not covered by the above definitions that may affect volumes attributable to ExxonMobil. Such factors include, but are not limited to, production enhancements from the prior year.project and work program activities, acquisitions including additions from asset exchanges, downtime, market demand, natural field decline, and any fiscal or commercial terms that do not affect entitlements.
| | | | | Third Quarter | | | First Nine Months | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | (millions of dollars) | Chemical earnings | | | | | | | | | | | | | | United States | | | 765 | | | 680 | | | 1,972 | | | 1,947 | | Non-U.S. | | | 435 | | | 345 | | | 1,116 | | | 971 | | | Total | | | 1,200 | | | 1,025 | | | 3,088 | | | 2,918 |
| | | | | First Three Months | | | | | | 2015 | | | 2014 | | | | | | (millions of dollars) | Downstream earnings | | | | | | | | United States | | | 567 | | | 623 | | Non-U.S. | | | 1,100 | | | 190 | | | Total | | | 1,667 | | | 813 |
Third quarter 2014 ChemicalDownstream earnings were $1,667 million for the first three months of $1,2002015, up $854 million were $175 million higher thanfrom the thirdfirst quarter of 2013. Margins2014. Stronger margins increased earnings by $210 million, with improved commodities realizations partly offset by weaker specialties.$1 billion. Volume and mix effects increased earnings by $10$70 million. All other items, primarily higher maintenance expense, decreased earnings by $40$260 million. ThirdPetroleum product sales of 5.8 million barrels per day were flat with the prior year’s first quarter.
Earnings from the U.S. Downstream were $567 million, down $56 million from the first quarter of 2014. Non-U.S. Downstream earnings of $1,100 million were $910 million higher than last year. | | | | | First Three Months | | | | | | 2015 | | | 2014 | | | | | | (millions of dollars) | Chemical earnings | | | | | | | | United States | | | 605 | | | 679 | | Non-U.S. | | | 377 | | | 368 | | | Total | | | 982 | | | 1,047 |
Chemical earnings of $982 million for the first three months of 2015 were $65 million lower than the first quarter of 2014. Improved margins increased earnings by $240 million. Favorable volume mix effects increased earnings by $30 million. All other items, primarily unfavorable foreign exchange effects, decreased earnings by $340 million. First quarter prime product sales of 6,249 kt (thousands of6.1 million metric tons)tons were essentially flat with59,000 metric tons lower than last year's thirdfirst quarter. Chemical earnings of $3,088 million in the first nine months of 2014 were $170 million higher than 2013. Higher margins increased earnings by $20 million, while volume and mix effects increased earnings by $140 million. All other items increased earnings by $10 million. Prime product sales of 18,516 kt were up 530 kt from 2013, driven by increased Singapore production.
| | | Third Quarter | | | First Nine Months | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | (millions of dollars) | | | | | | | | | | | | | | Corporate and financing earnings | | | (570) | | | (460) | | | (1,766) | | | (1,276) |
| | | | | First Three Months | | | | | | 2015 | | | 2014 | | | | | | (millions of dollars) | | | | | | | | | | Corporate and financing earnings | | | (564) | | | (543) |
Corporate and financing expenses were $570$564 million for the thirdfirst three months of 2015, essentially flat with the first quarter of 2014, up $110 million from the third quarter of 2013.2014. Corporate and financing expenses were $1,766 million in the first nine months of 2014, up $490 million from 2013, primarily due to unfavorable tax impacts.
LIQUIDITY AND CAPITAL RESOURCES | LIQUIDITY AND CAPITAL RESOURCES | LIQUIDITY AND CAPITAL RESOURCES | | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter | | | First Nine Months | | | | | First Three Months | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | 2015 | | | 2014 | | | | | (millions of dollars) | | | | | (millions of dollars) | Net cash provided by/(used in) | Net cash provided by/(used in) | | | | | | | | | | | | | Net cash provided by/(used in) | | | | | | | | Operating activities | | | | | | | | 37,701 | | 34,706 | Operating activities | | | 7,998 | | | 15,103 | | Investing activities | | | | | | | | (18,128) | | (27,489) | Investing activities | | | (6,352) | | | (6,306) | | Financing activities | | | | | | | | (19,085) | | (11,298) | Financing activities | | | (854) | | | (7,816) | Effect of exchange rate changes | Effect of exchange rate changes | | | | | | | | (170) | | (191) | Effect of exchange rate changes | | | (224) | | | (24) | Increase/(decrease) in cash and cash equivalents | Increase/(decrease) in cash and cash equivalents | | | | | | | | 318 | | (4,272) | Increase/(decrease) in cash and cash equivalents | | | 568 | | | 957 | | | | | | | | | | | | | | | | | | | | | | Cash and cash equivalents (at end of period) | Cash and cash equivalents (at end of period) | | | | | | | | 4,962 | | 5,310 | Cash and cash equivalents (at end of period) | | | 5,184 | | | 5,601 | Cash and cash equivalents – restricted (at end of period) | Cash and cash equivalents – restricted (at end of period) | | | | | | | | 52 | | 439 | Cash and cash equivalents – restricted (at end of period) | | | 43 | | | 204 | Total cash and cash equivalents (at end of period) | Total cash and cash equivalents (at end of period) | | | | | | | | 5,014 | | 5,749 | Total cash and cash equivalents (at end of period) | | | 5,227 | | | 5,805 | | | | | | | | | | | | | | | | | | | | | | Cash flow from operations and asset sales | Cash flow from operations and asset sales | | | | | | | | | | | Cash flow from operations and asset sales | | | | | | | | Net cash provided by operating activities (U.S. GAAP) | | | 12,396 | | 13,431 | | 37,701 | | 34,706 | Net cash provided by operating activities (U.S. GAAP) | | | 7,998 | | | 15,103 | | Proceeds associated with sales of subsidiaries, property, | | | | | | | | | | Proceeds associated with sales of subsidiaries, property, plant & equipment, | | | | | | | | plant & equipment, and sales and returns of investments | | | 127 | | 206 | | 3,794 | | 871 | | and sales and returns of investments | | | 484 | | | 1,111 | | Cash flow from operations and asset sales | | | 12,523 | | 13,637 | | 41,495 | | 35,577 | Cash flow from operations and asset sales | | | 8,482 | | | 16,214 |
Because of the ongoing nature of our asset management and divestment program, we believe it is useful for investors to consider proceeds associated with asset sales together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions. Cash flow from operations and asset sales in the third quarter of 2014 was $12.5 billion, including asset sales of $0.1 billion, and decreased $1.1 billion from the comparable 2013 period primarily due to working capital changes.
Cash provided by operating activities totaled $37.7$8.0 billion for the first ninethree months of 2014, $3.02015, $7.1 billion higherlower than 2013.2014. The major source of funds was net income including noncontrolling interests of $26.8$5.1 billion, an increasea decrease of $2.0$4.3 billion from the prior year period. The adjustment for the noncash provision of $12.8$4.3 billion for depreciation and depletion was flat with 2013.increased by $0.1 billion. Changes in operational working capital decreased cash flows by $0.5 billion in 20142015, primarily due to increase in inventory offset by payable balances.lower payables. Changes in operational working capital decreasedadded $2.5 billion to cash flows by $2.7 billionflow in 2013,2014, primarily due to an increase in inventory.higher payables. All other items net decreased cash by $1.5$0.9 billion in 2014 and by $0.2 billion in 2013.both periods. For additional details, see the Condensed Consolidated Statement of Cash Flows on page 6. Investing activities for the first ninethree months of 20142015 used net cash of $18.1$6.4 billion, a decreasean increase of $9.4nearly $0.1 billion compared to the prior year. Spending for additions to property, plant and equipment of $24.1$6.8 billion was $1.2$0.5 billion lower than 2013.2014. Proceeds from asset sales of $3.8$0.5 billion increased $2.9decreased $0.6 billion. Additional investment and advances decreased $2.4$0.2 billion to $1.3 billion reflecting the absence of the 2013 acquisition of Celtic Exploration Ltd.$0.3 billion. Other investing activities – net increased $2.9decreased $0.1 billion to $3.4 billion primarily reflecting the collection of advances.$0.3 billion. Cash flow from operations and asset sales forin the first nine monthsquarter of 20142015 was $41.5$8.5 billion, including asset sales of $3.8$0.5 billion, and increased $5.9decreased $7.7 billion from the comparable 20132014 period primarily due to higher proceeds from asset saleslower earnings and the absence of unfavorable 2013 working capital impacts. changes. During the first quarter of 2014,2015, the Corporation issued $5.5$8.0 billion of long-term debt and used part of the proceeds to reduce short-term debt. Net cash used in financing activities of $19.1$0.9 billion in the first ninethree months of 2015 was $7.0 billion lower than 2014 was $7.8 billion higher than 2013 reflecting total debt reduction in 2014 and short-termthe 2015 debt issuance in 2013, partially offset byand a lower level of purchases of shares of ExxonMobil stock in 2014. 2015. During the thirdfirst quarter of 2014,2015, Exxon Mobil Corporation purchased 3020 million shares of its common stock for the treasury at a gross cost of $3.0$1.8 billion. These purchases wereincluded $1 billion to reduce the number of shares outstanding.outstanding with the balance used to acquire shares in conjunction with the company’s benefit plans and programs. Shares outstanding decreased from 4,2654,201 million at year-end to 4,181 million at the end of the secondfirst quarter to 4,235 million at the end of the third quarter 2014.2015. 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 to shareholders a total of $5.9$3.9 billion in the thirdfirst quarter of 20142015 through dividends and share purchases to reduce shares outstanding. Total cash and cash equivalents of $5.0$5.2 billion at the end of the thirdfirst quarter of 20142015 compared to $5.7$5.8 billion at the end of the thirdfirst quarter of 2013.2014. Total debt of $21.8$32.8 billion compared to $22.7$29.1 billion at year-end 2013.2014. The Corporation's debt to total capital ratio was 10.415.6 percent at the end of the thirdfirst quarter of 20142015 compared to 11.213.9 percent at year-end 2013. 2014. While theThe Corporation issueshas access to significant capacity of long-term debt from time to time, the Corporation currently expectsand short-term liquidity. Internally generated funds are expected to cover its near-termthe majority of financial requirements, predominantly with internally generated funds, supplemented by its revolving commercial paper program. long-term and short-term debt.
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. Additionally, the Corporation continues to evaluate opportunities to enhance its business portfolio through acquisitions of assets or companies, and enters into such transactions from time to time. Key criteria for evaluating acquisitions include potential for future growth and attractive current valuations. Acquisitions may be made with cash, shares of the Corporation’s common stock, or both. Litigation and other contingencies are discussed in Note 23 to the unaudited condensed consolidated financial statements. | | | | | | | | | | | | | | TAXES | TAXES | | | | | | | | | | | TAXES | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Third Quarter | | | First Nine Months | | | | | First Three Months | | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | 2015 | | | 2014 | | | | | | (millions of dollars) | | | | | (millions of dollars) | | | | | | | | | | | | | | | | | | | | | | | | | | Income taxes | Income taxes | | | 5,064 | | 6,120 | | 15,955 | | 18,190 | | Income taxes | | | 1,560 | | | 5,857 | | | Effective income tax rate | | | 43 | % | | 48 | % | | 43 | % | | 48 | % | Effective income tax rate | | | 33 | % | | 45 | % | Sales-based taxes | Sales-based taxes | | | 7,519 | | 7,882 | | 22,806 | | 22,926 | | Sales-based taxes | | | 5,530 | | | 7,416 | | All other taxes and duties | All other taxes and duties | | | 9,060 | | 9,252 | | 27,223 | | 27,019 | | All other taxes and duties | | | 7,274 | | | 8,857 | | | | Total | | | 21,643 | | 23,254 | | 65,984 | | 68,135 | | Total | | | 14,364 | | | 22,130 | |
Income, sales-based and all other taxes and duties totaled $21.6$14.4 billion for the thirdfirst quarter of 2014,2015, a decrease of $1.6$7.8 billion from 2013.2014. Income tax expense decreased by $1.1$4.3 billion to $5.1$1.6 billion as a result ofreflecting lower pre-tax income and a lower effective tax rate. The effective income tax rate was 4333 percent compared to 4845 percent in the prior year period due primarily to impacts related to the Corporation’s asset management program.a lower share of earnings in higher tax jurisdictions. Sales-based taxes and all other taxes and duties decreased by $0.6$3.5 billion to $16.6 billion. Income, sales-based and all other taxes and duties totaled $66.0 billion for the first nine months of 2014, a decrease of $2.2 billion from 2013. Income tax expense decreased by $2.2 billion to $16.0$12.8 billion as a result of a lower effective tax rate. The effective income tax rate was 43 percent compared to 48 percent in the prior year due primarily to sales realizations.impacts related to the Corporation’s asset management program. Sales-based and all other taxes were flat at $50.0 billion.
| | | | | | | | | | | | | | | CAPITAL AND EXPLORATION EXPENDITURES | | | | | | | | | | | | | | | | | | | | | Third Quarter | | | First Nine Months | | | | | | 2014 | | | 2013 | | | 2014 | | | 2013 | | | | | (millions of dollars) | | | | | | | | | | | | | | | | | Upstream (including exploration expenses) | | | 8,424 | | | 9,475 | | | 24,082 | | | 29,599 | | Downstream | | | 780 | | | 556 | | | 2,002 | | | 1,740 | | Chemical | | | 626 | | | 509 | | | 1,970 | | | 1,215 | | Other | | | 7 | | | 6 | | | 19 | | | 11 | | | Total | | | 9,837 | | | 10,546 | | | 28,073 | | | 32,565 | |
Capital and exploration expenditures in the third quarter of 2014 were $9.8 billion, down 7 percent from the third quarter of 2013.
CAPITAL AND EXPLORATION EXPENDITURES | | | | | | | | | | | | | | | First Three Months | | | | | | 2015 | | | 2014 | | | | | | (millions of dollars) | | | | | | | | | | | Upstream (including exploration expenses) | | | 6,417 | | | 7,264 | | Downstream | | | 621 | | | 540 | | Chemical | | | 654 | | | 630 | | Other | | | 12 | | | 2 | | | Total | | | 7,704 | | | 8,436 | |
Capital and exploration expenditures in the first nine monthsquarter of 20142015 were $28.1$7.7 billion, down 149 percent from the first nine monthsquarter of 2013 due primarily to the absence of the $3.1 billion Celtic Exploration Ltd. acquisition.2014, in line with plan. The Corporation anticipates an average investment profile of about $37$34 billion per year for the next severalfew years. Actual spending could vary depending on the progress of individual projects and property acquisitions. As noted in Item 1A of ExxonMobil’s Form 10-K for 2013, the Corporation’s results can be adversely affected by political or regulatory developments affecting our operations. These include restrictions on doing business in certain countries, or restricting the kind of business that may be conducted. As noted in ExxonMobil’s Form 10-Q for the quarter ended June 30,In 2014, both the European Union (EU) and the United States (U.S.) have imposed sanctions against Russia relating to the situation in the Ukraine. On September 12, 2014, the EU and U.S. imposed additional sanctions relating to the Russian energy sector. In complianceExxonMobil continues to comply with theall sanctions and all general and specificregulatory licenses prohibited activities involving offshore Russiaapplicable to its affiliates’ investments in the Black Sea, Arctic regions, and onshore West Siberia have been wound down.Russian Federation.
RECENTLY ISSUED ACCOUNTING STANDARDS In May 2014, the Financial Accounting Standards Board issued a new standard, Revenue from Contracts with Customers. The standard establishes a single revenue recognition model for all contracts with customers, eliminates industry specific requirements and expands disclosure requirements. The standard is required to be adopted beginning January 1, 2017. ExxonMobil is evaluating the standard and its effect on the Corporation’s financial statements. FORWARD-LOOKING STATEMENTS Statements relating to future plans, projections, events or conditions are forward-looking statements. Actual results, including project plans, costs, timing, and capacities; capital and exploration expenditures; resource recoveries; and share purchase levels, could differ materially due to factors including: changes in oil or gas prices or other market or economic conditions affecting the oil and gas industry, including the scope and duration of economic recessions; the outcome of exploration and development efforts; changes in law or government regulation, including tax and environmental requirements; the outcome of commercial negotiations; changes in technical or operating conditions; and other factors discussed under the heading "Factors Affecting Future Results" in the “Investors” section of our website and in Item 1A of ExxonMobil's 20132014 Form 10-K. We assume no duty to update these statements as of any future date. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. Item 3. Quantitative and Qualitative Disclosures About Market Risk Information about market risks for the ninethree months ended September 30, 2014,March 31, 2015, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2013.2014. 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, 2014.March 31, 2015. 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 quarter that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
PART II. OTHER INFORMATION Item 1. Legal Proceedings ExxonMobil Refining & Supply Company, a divisionRegarding the criminal charges filed against XTO Energy Inc. (XTO) by the Pennsylvania Attorney General’s Office pertaining to XTO’s Marquardt Well Site in Penn Township, Pennsylvania, reported most recently in the Corporation’s 2013 Form 10-K, in pre-trial proceedings on April 14, 2015, the Pennsylvania Court of Common Pleas issued an order denying XTO’s motion to dismiss the Corporation, entered into a Consent Agreement and Final Order, effective August 19, 2014, resolving two alleged violations relatingcase.
With respect to a purported failure to annually certify operating procedures for two processes and an alleged failure to fully train contract employeesthe enforcement action filed by the United States, on practices associated with opening process equipment during two incidents at the Baton Rouge Refinery in early 2012. These alleged violations were identified bybehalf of the United States Environmental Protection Agency (EPA) during a July 2012 inspection(USEPA), and the State of Arkansas, on behalf of the refinery. The settlement terms, agreed to by the EPA and the Corporation, require the Corporation to pay a civil penalty in the amountArkansas Department of $120,000. As reported in the Corporation’s Form 10-Q for the second quarter of 2014, on May 20, 2014, the Texas Commission on Environmental Quality, (TCEQ) issued a Notice of Enforcement and Proposed Agreed Order alleging that record reviews and inspections atagainst ExxonMobil Oil Corporation’s (EMOC) Beaumont, Texas, refinery in 2013 and 2014, identified deficiencies in the refinery’s cooling tower monitoring activities and one air emission event, which allegedly violated provisions of the Texas Health and Safety Code, the Texas Water Code, and the Code of Federal Regulations. Additionally, TCEQ identified deficiencies in a refinery continuous emissions monitoring system relative accuracy test audit procedure. The parties have agreed upon full settlement of the enforcement action which imposes a $200,859 penalty on EMOC. To date, $100,429 has been paid to TCEQ. The balance will be paid to a Supplemental Environmental Project upon endorsement by TCEQ.
Regarding the civil enforcement investigationPipeline Company (EMPCo) related to the April 28, 2012, discharge of crude oil from the ExxonMobilPegasus Pipeline Company’s (EMPCo) North Line Pipeline near Torbert in Pointe Coupee Parish, Louisiana,Mayflower, Faulkner County, Arkansas, previously reported in the Corporation’s Form 10-Q for the third quarter of 2013, EMPCo entered into a Consent Decree with U.S. Department of Justice and the EPA, which was filed in federal court on August 26, 2014, and approved by the Court on October 17, 2014. EMPCo agreed to a penalty of $1.437 million which resolved the Clean Water Act allegation. The allegations raised by the Louisiana Department of Environmental Quality remain unresolved at this time.
Regarding the U.S. Department of Transportation Pipeline & Hazardous Material Safety Administration (PHMSA) enforcement action with respect to EMPCo’s pipeline integrity management program previously reported in the Corporation’s Form 10-Q for the first quarter of 2012 and second quarter of 2013, on July 15, 2014, PHMSA issued its decision on EMPCo’s Petition for Reconsideration and reduced the civil penalty imposed on EMPCo from $112,300 to $101,500 and reduced the number of pipeline segments required to be hydro-pressure tested from 16 to 7 segments. EMPCo paid the penalty assessed on August 4, 2014.
Regarding the enforcement matter brought by TCEQ concerning alleged exceedances of volatile organic compound emissions from Tank 22 at the Corporation’s King Ranch Gas Plant previously reported in the Corporation’s Form 10-K for 2013, the parties have agreed upon a settlement of the matter, which was approved by the TCEQ Commissioners on August 20, 2014. The settlement requires the Corporation to comply with the applicable new source review permit, remove Tank 22 from service, and pay a penalty of $225,450 consisting of a $90,180 civil penalty and a $90,180 payment to a TCEQ-approved Supplemental Environmental Project fund. The remaining $45,090 of the penalty will be deferred and removed if all of the terms of the settlement agreement are achieved by August 20, 2015.
As reported in the Corporation’s Forms 10-Q for the first, quartersecond, and third quarters of 20122013, and the first and second quarters of 2014, and in its 2014 Form 10-K, EMPCo has reached an agreement with the EPA issuedUnited States and the State of Arkansas on a Consent Decree to resolve the matter. The Consent Decree, if approved by the court, would require EMPCo to pay a civil penalty to the United States of $3.19 million and to pay the State of Arkansas $1.88 million consisting of a $1 million civil penalty, $600,000 towards a supplemental environmental project, and $280,000 to reimburse expenses of the Arkansas Attorney General’s Office. In addition, the Consent Decree would require EMPCo to conduct enhanced training, stage additional spill response equipment, and enhance integrity treatment of the pipeline. The Consent Decree was lodged with the court on April 22, 2015. A 30-day public comment period began on April 28, 2015, when the Consent Decree was published in the Federal Register.
As reported most recently in the Corporation’s 2014 Form 10-K, in December 2014, XTO agreed to a settlement with the Department of Justice, USEPA and the West Virginia Department of Environmental Protections (WVDEP) concerning administrative orders to XTO Energy Inc. (XTO) for alleged violations of thealleging Clean Water Act at threeviolations issued by the USEPA with regard to eight XTO locations in West Virginia. In addition, XTOVirginia, five of which were voluntarily disclosed six additional West Virginia sitesby XTO to the EPA. OneUSEPA. Pursuant to the settlement, XTO will pay a civil penalty of these voluntarily reported sites$2.3 million and has been resolved with no enforcement action taken. Negotiations continue onentered into a Consent Decree with the Department of Justice, USEPA and WVDEP. The Consent Decree requires XTO to prepare and submit restoration plans for approval by USEPA and WVDEP and conduct approximately $3.0 million in restoration and mitigation activities at the impacted locations or at alternative locations approved by the USEPA and WVDEP. On April 24, 2015, the United States District Court for the remaining eight sites to resolve outstanding penalty and compliance issues. It is expected thatNorthern District of West Virginia approved the EPA will seek penalties from XTO in excess of $100,000 to resolve the matters at all of the remaining sites.Consent Decree. Refer to the relevant portions of Note 23 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | | | | | | | | | | | | | Issuer Purchase of Equity Securities for Quarter Ended September 30, 2014March 31, 2015 | | | | | | | | | | | | | | | | | | | | Total Number of | | Maximum Number | | | | | | | | | Shares Purchased | | of Shares that May | | | | | Total Number | | Average | | as Part of Publicly | | Yet Be Purchased | | | | | of Shares | | Price Paid | | Announced Plans | | Under the Plans or | Period | | | Purchased | | per Share | | or Programs | �� | Programs | | | | | | | | | | | | July 2014January 2015
| | 9,877,3476,510,349
| | $102.8490.44 | | 9,877,3476,510,349
| | | August 2014February 2015
| | 10,020,0406,184,584
| | $99.0990.56 | | 10,020,0406,184,584
| | | September 2014March 2015
| | 10,271,7337,411,392
| | $96.7085.24 | | 10,271,7337,411,392
| | | | Total | | | 30,169,12020,106,325
| | $99.5088.56 | | 30,169,12020,106,325
| | (See Note 1) |
Note 1 - On August 1, 2000, the Corporation announced its intention to resume purchases of shares of its common stock for the treasury both to offset shares issued in conjunction with company benefit plans and programs and to gradually reduce the number of shares outstanding. The announcement did not specify an amount or expiration date. The Corporation has continued to purchase shares since this announcement and to report purchased volumes in its quarterly earnings releases. In its most recent earnings release dated October 31, 2014,April 30, 2015, the Corporation stated that fourthsecond quarter 20142015 share purchases to reduce shares outstanding are anticipated to equal $3$1 billion. Purchases may be made in both the open market and through negotiated transactions, and purchases may be increased, decreased or discontinued at any time without prior notice. Item 6. Exhibits Exhibit | | Description | | | | 31.1 | | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer. | 31.2 | | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Financial Officer. | 31.3 | | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer. | 32.1 | | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer. | 32.2 | | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Financial Officer. | 32.3 | | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer. | 101 | | Interactive Data Files. |
The registrant has not filed with this report copies of the instruments defining the rights of holders of long-term debt of the registrant and its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed. The registrant agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.
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 5, 2014May 6, 2015 | By: | /s/ DAVID S. ROSENTHAL | | | David S. Rosenthal | | | Vice President, Controller and | | | Principal Accounting Officer | | | |
INDEX TO EXHIBITS Exhibit | | Description | | | | 31.1 | | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer. | 31.2 | | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Financial Officer. | 31.3 | | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer. | 32.1 | | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer. | 32.2 | | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Financial Officer. | 32.3 | | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer. | 101 | | Interactive Data Files. |
The registrant has not filed with this report copies of the instruments defining the rights of holders of long-term debt of the registrant and its subsidiaries for which consolidated or unconsolidated financial statements are required to be filed. The registrant agrees to furnish a copy of any such instrument to the Securities and Exchange Commission upon request.
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