UNITED STATES
FORM 10-Q
☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
__________to__________
New Jersey |
| 13-5409005 | ||||||
(State or other jurisdiction of |
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incorporation or organization) |
| (I.R.S. Employer Identification Number) |
(972) 940-6000
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Title of Each Class |
| Trading Symbol |
| Name of Each Exchange | ||||||||||
Common Stock, without par value |
| XOM |
| New York Stock Exchange | ||||||||||
0.142% Notes due 2024 | XOM24B | New York Stock Exchange | ||||||||||||
0.524% Notes due 2028 | XOM28 | New York Stock Exchange | ||||||||||||
0.835% Notes due 2032 | XOM32 | New York Stock Exchange | ||||||||||||
1.408% Notes due 2039 | XOM39A | New York Stock Exchange |
Large accelerated filer | ☑ | Accelerated filer | ☐ | ||||||||
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Non-accelerated filer | ☐ | Smaller reporting company | ☐ | ||||||||
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| Emerging growth company | ☐ |
☐ No ☑
Class |
| Outstanding as of | ||||||
Common stock, without par value |
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EXXON MOBIL CORPORATION
PART I. FINANCIAL INFORMATION | |||||
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Item 1.Financial Statements |
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Condensed Consolidated Statement of Changes in Equity Nine months ended September 30, 2020 and 2019 | 8 | ||||
Notes to Condensed Consolidated Financial Statements |
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3.Quantitative and Qualitative Disclosures About Market Risk |
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Item 4.Controls and Procedures |
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PART II. OTHER INFORMATION | |||||
Item 1.Legal Proceedings |
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Item 1A.Risk Factors |
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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 6.Exhibits |
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Index to Exhibits |
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Signature |
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PART I. FINANCIAL INFORMATION |
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PART I. FINANCIAL INFORMATION
| The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 3
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 4
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 5
(1) Includes a net addition of commercial paper with a maturity of over three months of $6.4 billion in 2020 and $3.1 billion in 2019. The gross amount of commercial paper with a maturity of over three months issued was $28.8 billion in 2020 and $13.4 billion in 2019, while the gross amount repaid was $22.4 billion in 2020 and $10.3 billion in 2019. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. | 6 |
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| The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 7 |
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| The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. 8 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 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 2019 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. | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Miscellaneous Financial Information | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| 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, 2020, 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.
(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 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 Venezuelan nationalization decree issued in February 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil 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. 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 collected awards of $908 million in an arbitration against PdVSA under the rules of the International Chamber of Commerce in respect of an indemnity related to the Cerro Negro Project and $260 million in an arbitration for compensation due for the La Ceiba Project and for export curtailments at the Cerro Negro Project under rules of International Centre for Settlement of Investment Disputes (ICSID). An ICSID arbitration award relating to the Cerro Negro Project’s expropriation ($1.4 billion) was annulled based on a determination that a prior Tribunal failed to adequately explain why the cap on damages in the indemnity owed by PdVSA did not affect or limit the amount owed for the expropriation of the Cerro Negro Project. ExxonMobil filed a new claim seeking to restore the original award of damages for the Cerro Negro Project with ICSID on September 26, 2018. The net impact of this matter 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. 10 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 appealed that judgment to the Court of Appeal, Abuja Judicial Division. On July 22, 2016, the Court of Appeal upheld the decision of the lower court setting aside the award. On October 21, 2016, the Contractors appealed the decision to the Supreme Court of Nigeria. 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. Following dismissal by this court, the Contractors appealed to the Nigerian Court of Appeal in June 2016. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York (SDNY) to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. NNPC moved to dismiss the lawsuit. On September 4, 2019, the SDNY dismissed the Contractors’ petition to recognize and enforce the Erha arbitration award. The Contractors filed a notice of appeal in the Second Circuit on October 2, 2019. 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. 11 4. Other Comprehensive Income Information
(1) Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) of $(159) million, net of taxes.
12 5. Earnings Per Share |
(1) | The calculation of earnings (loss) per common share and earnings (loss) per common share – assuming dilution are the same in each period shown. 6. Pension and Other Postretirement Benefits |
13 7. Financial Instruments and Derivatives Financial Instruments. The estimated fair value of financial instruments at September 30, 2020, and December 31, 2019, and the related hierarchy level for the fair value measurement is as follows: |
(1) Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles, net (2) Included in the Balance Sheet line: Investments, advances and long-term receivables (3) Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles, net (4) Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations (5) Excluding finance lease obligations (6) Included in the Balance Sheet line: Other long-term obligations (7) Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company. At September 30, 2020, the Corporation had $462 million of collateral under master netting arrangements not offset against the derivatives on the Consolidated Balance Sheet, primarily related to initial margin requirements. 14 Long-term debt. The increase in the estimated fair value and book value of long-term debt reflects the Corporation's issuance of new debt securities during 2020. The carrying value of these debt securities as of September 30, 2020, is below: |
(1) Includes premiums of $152 million. (2) Euro-denominated. The Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to foreign exchange fluctuations is reported in accumulated other comprehensive income. As of September 30, 2020, the Corporation has designated $5.3 billion of its Euro-denominated long-term debt and related accrued interest as a net investment hedge of its European business. The net investment hedge is deemed to be perfectly effective. The Corporation had undrawn short-term committed lines of credit of $11.0 billion and an undrawn long-term committed line of credit of $0.2 billion as of third quarter 2020. In the third quarter, the Corporation increased its 364-day facility from $7.5 billion to $10.0 billion and terminated the supplemental $7.0 billion facility that was established in the first quarter of 2020. Derivative Instruments. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity. 15 The net notional long/(short) position of derivative instruments at September 30, 2020, and December 31, 2019, was as follows:
Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Consolidated Statement of Income are included in the following lines on a before-tax basis:
16 8. Disclosures about Segments and Related Information
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| 9. Leases A previously recorded operating lease was renegotiated in the first quarter of 2020 and the new agreement no longer meets the definition of a lease. At year-end 2019, this agreement had been reported as a right of use asset of $1.3 billion and a lease liability of $1.3 billion in the “Other” operating lease category. The new agreement will be reported as a take-or-pay obligation. | 18 | 10. Allowance for Current Expected Credit Loss (CECL) | Financial Instruments – Credit Losses (Topic 326) | , as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and reasonable and supportable forecasts. The standard requires this expected loss methodology for trade receivables, certain other financial assets and off-balance sheet credit exposures. The cumulative effect adjustment related to the adoption of this standard reduced equity by $93 million. |
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
| 19 |
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
| |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
|
|
|
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
3
EXXON MOBIL CORPORATION |
| |||||||||||
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
| |||||||||||
(millions of dollars) |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| |||
|
|
|
|
|
|
|
| March 31, |
| |||
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Net income (loss) including noncontrolling interests |
|
|
| (770) |
|
| 2,406 |
| |||
| Other comprehensive income (loss) (net of income taxes) |
|
|
|
|
|
|
|
| |||
|
| Foreign exchange translation adjustment |
|
|
| (5,649) |
|
| 749 |
| ||
|
| Postretirement benefits reserves adjustment (excluding amortization) |
|
| 87 |
|
| (26) |
| |||
|
| Amortization and settlement of postretirement benefits reserves adjustment |
|
|
|
|
|
|
| |||
|
|
|
| included in net periodic benefit costs |
|
|
| 204 |
|
| 185 |
|
|
|
| Total other comprehensive income (loss) |
|
|
| (5,358) |
|
| 908 |
| |
| Comprehensive income (loss) including noncontrolling interests |
|
| (6,128) |
|
| 3,314 |
| ||||
|
| Comprehensive income (loss) attributable to noncontrolling interests |
|
| (672) |
|
| 182 |
| |||
| Comprehensive income (loss) attributable to ExxonMobil |
|
|
| (5,456) |
|
| 3,132 |
|
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
4
EXXON MOBIL CORPORATION |
| |||||||||
CONDENSED CONSOLIDATED BALANCE SHEET |
| |||||||||
(millions of dollars) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Mar. 31, |
|
| Dec. 31, |
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
Assets |
|
|
|
|
|
|
| |||
| Current assets |
|
|
|
|
|
|
| ||
|
| Cash and cash equivalents |
|
| 11,412 |
|
| 3,089 |
| |
|
| Notes and accounts receivable – net |
|
| 20,871 |
|
| 26,966 |
| |
|
| Inventories |
|
|
|
|
|
|
| |
|
|
| Crude oil, products and merchandise |
|
| 12,067 |
|
| 14,010 |
|
|
|
| Materials and supplies |
|
| 4,434 |
|
| 4,518 |
|
|
| Other current assets |
|
| 1,465 |
|
| 1,469 |
| |
|
|
| Total current assets |
|
| 50,249 |
|
| 50,052 |
|
| Investments, advances and long-term receivables |
|
| 42,981 |
|
| 43,164 |
| ||
| Property, plant and equipment – net |
|
| 248,409 |
|
| 253,018 |
| ||
| Other assets, including intangibles – net |
|
| 14,165 |
|
| 16,363 |
| ||
|
|
| Total assets |
|
| 355,804 |
|
| 362,597 |
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities |
|
|
|
|
|
|
| |||
| Current liabilities |
|
|
|
|
|
|
| ||
|
| Notes and loans payable |
|
| 27,755 |
|
| 20,578 |
| |
|
| Accounts payable and accrued liabilities |
|
| 35,815 |
|
| 41,831 |
| |
|
| Income taxes payable |
|
| 1,203 |
|
| 1,580 |
| |
|
|
| Total current liabilities |
|
| 64,773 |
|
| 63,989 |
|
| Long-term debt |
|
| 31,857 |
|
| 26,342 |
| ||
| Postretirement benefits reserves |
|
| 21,913 |
|
| 22,304 |
| ||
| Deferred income tax liabilities |
|
| 24,863 |
|
| 25,620 |
| ||
| Long-term obligations to equity companies |
|
| 4,024 |
|
| 3,988 |
| ||
| Other long-term obligations |
|
| 19,631 |
|
| 21,416 |
| ||
|
|
| Total liabilities |
|
| 167,061 |
|
| 163,659 |
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and contingencies (Note 3) |
|
| - |
|
| - |
| |||
|
|
|
|
|
|
|
| |||
Equity |
|
|
|
|
|
|
| |||
| Common stock without par value |
|
|
|
|
|
|
| ||
|
| (9,000 million shares authorized, 8,019 million shares issued) |
|
| 15,636 |
|
| 15,637 |
| |
| Earnings reinvested |
|
| 416,919 |
|
| 421,341 |
| ||
| Accumulated other comprehensive income |
|
| (24,339) |
|
| (19,493) |
| ||
| Common stock held in treasury |
|
|
|
|
|
|
| ||
|
| (3,791 million shares at March 31, 2020 and |
|
|
|
|
|
|
| |
|
| 3,785 million shares at December 31, 2019) |
|
| (226,137) |
|
| (225,835) |
| |
|
|
| ExxonMobil share of equity |
|
| 182,079 |
|
| 191,650 |
|
| Noncontrolling interests |
|
| 6,664 |
|
| 7,288 |
| ||
|
|
| Total equity |
|
| 188,743 |
|
| 198,938 |
|
|
|
| Total liabilities and equity |
|
| 355,804 |
|
| 362,597 |
|
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
5
EXXON MOBIL CORPORATION |
| |||||||||
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
| |||||||||
(millions of dollars) |
| |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
| |||
|
|
|
|
|
| March 31, |
| |||
|
|
|
|
|
| 2020 |
|
| 2019 |
|
Cash flows from operating activities |
|
|
|
|
|
|
| |||
| Net income (loss) including noncontrolling interests |
|
| (770) |
|
| 2,406 |
| ||
| Depreciation and depletion |
|
| 5,819 |
|
| 4,571 |
| ||
| Noncash inventory adjustment - lower of cost or market |
|
| 2,245 |
|
| - |
| ||
| Changes in operational working capital, excluding cash and debt |
|
| (942) |
|
| 2,257 |
| ||
| All other items – net |
|
| (78) |
|
| (896) |
| ||
|
|
| Net cash provided by operating activities |
|
| 6,274 |
|
| 8,338 |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities |
|
|
|
|
|
|
| |||
| Additions to property, plant and equipment |
|
| (5,945) |
|
| (5,199) |
| ||
| Proceeds associated with sales of subsidiaries, property, plant and |
|
|
|
|
|
|
| ||
|
| equipment, and sales and returns of investments |
|
| 86 |
|
| 107 |
| |
| Additional investments and advances |
|
| (728) |
|
| (910) |
| ||
| Other investing activities including collection of advances |
|
| 220 |
|
| 209 |
| ||
|
|
| Net cash used in investing activities |
|
| (6,367) |
|
| (5,793) |
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities |
|
|
|
|
|
|
| |||
| Additions to long-term debt |
|
| 8,466 |
|
| - |
| ||
| Reductions in long-term debt |
|
| (2) |
|
| - |
| ||
| Reductions in short-term debt |
|
| (1,533) |
|
| (3,777) |
| ||
| Additions/(reductions) in commercial paper, and debt with three |
|
|
|
|
|
|
| ||
|
| months or less maturity (1) |
|
| 5,829 |
|
| 6,776 |
| |
| Cash dividends to ExxonMobil shareholders |
|
| (3,719) |
|
| (3,505) |
| ||
| Cash dividends to noncontrolling interests |
|
| (45) |
|
| (43) |
| ||
| Changes in noncontrolling interests |
|
| 94 |
|
| (74) |
| ||
| Common stock acquired |
|
| (305) |
|
| (421) |
| ||
|
|
| Net cash used in financing activities |
|
| 8,785 |
|
| (1,044) |
|
Effects of exchange rate changes on cash |
|
| (369) |
|
| 43 |
| |||
Increase/(decrease) in cash and cash equivalents |
|
| 8,323 |
|
| 1,544 |
| |||
Cash and cash equivalents at beginning of period |
|
| 3,089 |
|
| 3,042 |
| |||
Cash and cash equivalents at end of period |
|
| 11,412 |
|
| 4,586 |
| |||
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures |
|
|
|
|
|
|
| |||
| Income taxes paid |
|
| 1,372 |
|
| 1,793 |
| ||
| Cash interest paid |
|
|
|
|
|
|
| ||
|
| Included in cash flows from operating activities |
|
| 313 |
|
| 247 |
| |
|
| Capitalized, included in cash flows from investing activities |
|
| 155 |
|
| 175 |
| |
|
| Total cash interest paid |
|
| 468 |
|
| 422 |
|
(1) Includes a net addition of commercial paper with a maturity of over three months of $8.2 billion in 2020 and $5.3 billion in 2019. The gross amount of commercial paper with a maturity of over three months issued was $13.1 billion in 2020 and $6.4 billion in 2019, while the gross amount repaid was $4.9 billion in 2020 and $1.1 billion in 2019.
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
6
| 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, 2018 |
|
| 15,258 |
|
| 421,653 |
|
| (19,564) |
|
| (225,553) |
|
| 191,794 |
|
| 6,734 |
|
| 198,528 | |||
| Amortization of stock-based awards |
|
| 223 |
|
| - |
|
| - |
|
| - |
|
| 223 |
|
| - |
|
| 223 | ||
| Other |
|
| (5) |
|
| - |
|
| - |
|
| - |
|
| (5) |
|
| 9 |
|
| 4 | ||
| Net income (loss) for the period |
|
| - |
|
| 2,350 |
|
| - |
|
| - |
|
| 2,350 |
|
| 56 |
|
| 2,406 | ||
| Dividends - common shares |
|
| - |
|
| (3,505) |
|
| - |
|
| - |
|
| (3,505) |
|
| (43) |
|
| (3,548) | ||
| Other comprehensive income (loss) |
|
| - |
|
| - |
|
| 782 |
|
| - |
|
| 782 |
|
| 126 |
|
| 908 | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| (421) |
|
| (421) |
|
| (83) |
|
| (504) | ||
| Dispositions |
|
| - |
|
| - |
|
| - |
|
| 4 |
|
| 4 |
|
| - |
|
| 4 | ||
Balance as of March 31, 2019 |
|
| 15,476 |
|
| 420,498 |
|
| (18,782) |
|
| (225,970) |
|
| 191,222 |
|
| 6,799 |
|
| 198,021 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance as of December 31, 2019 |
|
| 15,637 |
|
| 421,341 |
|
| (19,493) |
|
| (225,835) |
|
| 191,650 |
|
| 7,288 |
|
| 198,938 | |||
| Amortization of stock-based awards |
|
| 181 |
|
| - |
|
| - |
|
| - |
|
| 181 |
|
| - |
|
| 181 | ||
| Other |
|
| (182) |
|
| - |
|
| - |
|
| - |
|
| (182) |
|
| 157 |
|
| (25) | ||
| Net income (loss) for the period |
|
| - |
|
| (610) |
|
| - |
|
| - |
|
| (610) |
|
| (160) |
|
| (770) | ||
| Dividends - common shares |
|
| - |
|
| (3,719) |
|
| - |
|
| - |
|
| (3,719) |
|
| (45) |
|
| (3,764) | ||
| Cumulative effect of accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| change |
|
| - |
|
| (93) |
|
| - |
|
| - |
|
| (93) |
|
| (1) |
|
| (94) |
| Other comprehensive income (loss) |
|
| - |
|
| - |
|
| (4,846) |
|
| - |
|
| (4,846) |
|
| (512) |
|
| (5,358) | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| (305) |
|
| (305) |
|
| (63) |
|
| (368) | ||
| Dispositions |
|
| - |
|
| - |
|
| - |
|
| 3 |
|
| 3 |
|
| - |
|
| 3 | ||
Balance as of March 31, 2020 |
|
| 15,636 |
|
| 416,919 |
|
| (24,339) |
|
| (226,137) |
|
| 182,079 |
|
| 6,664 |
|
| 188,743 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, 2020 |
|
|
|
| Three Months Ended March 31, 2019 | ||||||||||||||
|
|
|
|
|
|
|
| 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 |
|
| (3,785) |
|
| 4,234 |
|
|
|
|
| 8,019 |
|
| (3,782) |
|
| 4,237 | ||
|
|
| Acquisitions |
|
| - |
|
| (6) |
|
| (6) |
|
|
|
|
| - |
|
| (6) |
|
| (6) |
|
|
| Dispositions |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
| Balance as of March 31 |
|
| 8,019 |
|
| (3,791) |
|
| 4,228 |
|
|
|
|
| 8,019 |
|
| (3,788) |
|
| 4,231 |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
7
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 2019 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. Miscellaneous Financial Information
Crude oil, products and merchandise inventories are carried at the lower of current market value or cost, generally determined under the last-in first-out method (LIFO). The Corporation’s results for the first quarter of 2020 include a before-tax charge of $2,777 million, included in “Crude oil and product purchases” on the Statement of Income, from writing down the book value of inventories to their market value at the end of the period. This adjustment, together with a similar adjustment for equity companies included in “Income from equity affiliates,” resulted in a $2,096 million after-tax charge to earnings (excluding noncontrolling interests) and will be re-evaluated at the end of each quarter in 2020. The earnings impact may be adjusted upward or downward this year based on prevailing market prices at the time of future evaluations. At year-end, any required adjustment is considered permanent and is incorporated into the LIFO carrying value of the inventory.
The COVID-19 pandemic resulted in substantial reductions in demand for crude oil, natural gas, and petroleum products. This reduction in demand led to sharp declines in industry prices and considerable volatility in financial markets during the quarter. Based on deteriorating industry conditions and a significant reduction in its market capitalization, the Corporation assessed its goodwill balances and certain asset groups for impairment and recognized after-tax impairment charges of $787 million. These charges included goodwill impairment of $562 million in Upstream, Downstream, and Chemical reporting units and other impairment charges of $225 million, mainly in the Upstream segment. For the goodwill impairment charges, the fair values of the impacted reporting units primarily reflected market-based estimates of historical EBITDA multiples at the end of the quarter. For the other impairment charges, which mainly relate to the Corporation’s investment in an Upstream equity company, recent third party price outlooks, internal estimates of future volumes and costs, and estimates of discount rates for similar properties were used to estimate fair value. The charges related to goodwill impairment are included in “Depreciation and depletion” on the Statement of Income while the charges related to other impairments are largely included in “Income from equity affiliates.”
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 March 31, 2020, 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.
8
|
|
|
|
|
| As of March 31, 2020 |
|
| ||||||
|
|
|
|
|
| Equity |
|
| Other |
|
|
|
|
|
|
|
|
|
|
| Company |
|
| Third Party |
|
|
|
|
|
|
|
|
|
|
| Obligations (1) |
|
| Obligations |
|
| Total |
|
|
|
|
|
|
|
| (millions of dollars) |
|
| ||||||
| Guarantees |
|
|
|
|
|
|
|
|
|
|
| ||
|
| Debt-related |
|
| 868 |
|
| 108 |
|
| 976 |
|
| |
|
| Other |
|
| 846 |
|
| 4,636 |
|
| 5,482 |
|
| |
|
|
| Total |
|
| 1,714 |
|
| 4,744 |
|
| 6,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (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 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 Venezuelan nationalization decree issued in February 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil 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. 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 collected awards of $908 million in an arbitration against PdVSA under the rules of the International Chamber of Commerce in respect of an indemnity related to the Cerro Negro Project and $260 million in an arbitration for compensation due for the La Ceiba Project and for export curtailments at the Cerro Negro Project under rules of International Centre for Settlement of Investment Disputes (ICSID). An ICSID arbitration award relating to the Cerro Negro Project’s expropriation ($1.4 billion) was annulled based on a determination that a prior Tribunal failed to adequately explain why the cap on damages in the indemnity owed by PdVSA did not affect or limit the amount owed for the expropriation of the Cerro Negro Project. ExxonMobil filed a new claim seeking to restore the original award of damages for the Cerro Negro Project with ICSID on September 26, 2018.
The net impact of this matter 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 appealed that judgment to the Court of Appeal, Abuja Judicial Division. On July 22, 2016, the Court of Appeal upheld the decision of the lower court setting aside the award. On October 21, 2016, the Contractors appealed the decision to the Supreme Court of Nigeria. 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. Following dismissal by this court, the Contractors appealed to the Nigerian Court of Appeal in June 2016. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York (SDNY) to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. NNPC moved to dismiss the lawsuit. On September 4, 2019, the SDNY dismissed the Contractors’ petition to recognize and enforce the Erha arbitration award. The Contractors filed a notice of appeal in the Second Circuit on October 2, 2019. 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.
9
4.Other Comprehensive Income Information
|
|
|
|
|
| Cumulative |
|
| Post- |
|
|
|
|
|
|
|
|
| Foreign |
|
| retirement |
|
|
|
|
|
|
|
|
| Exchange |
|
| Benefits |
|
|
|
| ExxonMobil Share of Accumulated Other |
|
| Translation |
|
| Reserves |
|
|
| ||
| Comprehensive Income |
|
| Adjustment |
|
| Adjustment |
|
| Total | ||
|
|
|
| (millions of dollars) | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2018 |
|
| (13,881) |
|
| (5,683) |
|
| (19,564) | ||
| Current period change excluding amounts reclassified |
|
|
|
|
|
|
|
|
| ||
|
| from accumulated other comprehensive income |
|
| 627 |
|
| (23) |
|
| 604 | |
| Amounts reclassified from accumulated other |
|
|
|
|
|
|
|
|
| ||
|
| comprehensive income |
|
| - |
|
| 178 |
|
| 178 | |
| Total change in accumulated other comprehensive income |
|
| 627 |
|
| 155 |
|
| 782 | ||
| Balance as of March 31, 2019 |
|
| (13,254) |
|
| (5,528) |
|
| (18,782) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2019 |
|
| (12,446) |
|
| (7,047) |
|
| (19,493) | ||
| Current period change excluding amounts reclassified |
|
|
|
|
|
|
|
|
| ||
|
| from accumulated other comprehensive income |
|
| (5,113) |
|
| 72 |
|
| (5,041) | |
| Amounts reclassified from accumulated other |
|
|
|
|
|
|
|
|
| ||
|
| comprehensive income |
|
| - |
|
| 195 |
|
| 195 | |
| Total change in accumulated other comprehensive income |
|
| (5,113) |
|
| 267 |
|
| (4,846) | ||
| Balance as of March 31, 2020 |
|
| (17,559) |
|
| (6,780) |
|
| (24,339) |
|
|
|
|
|
|
|
|
|
| Three Months Ended | |||
| Amounts Reclassified Out of Accumulated Other |
|
|
|
|
|
| March 31, | |||||
| Comprehensive Income - Before-tax Income/(Expense) |
|
|
| 2020 |
|
| 2019 | |||||
|
|
|
|
|
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Amortization and settlement of postretirement benefits reserves |
|
|
|
|
|
|
| |||||
|
| adjustment included in net periodic benefit costs |
|
|
|
| |||||||
|
| (Statement of Income line: Non-service pension and postretirement benefit expense) | (262) |
|
| (237) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended | |||
| Income Tax (Expense)/Credit For |
|
|
|
|
| March 31, | |||||
| Components of Other Comprehensive Income |
|
|
|
|
| 2020 |
|
| 2019 | ||
|
|
|
|
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign exchange translation adjustment |
|
|
|
|
| 7 |
|
| - | ||
| Postretirement benefits reserves adjustment (excluding amortization) |
|
|
|
|
| (62) |
|
| 10 | ||
| Amortization and settlement of postretirement benefits reserves |
|
|
|
|
|
|
|
|
| ||
|
| adjustment included in net periodic benefit costs |
|
|
|
|
| (58) |
|
| (52) | |
| Total |
|
|
|
|
| (113) |
|
| (42) |
10
5.Earnings Per Share
|
|
|
|
|
|
|
|
| Three Months Ended | |||
|
|
|
|
|
|
|
|
| March 31, | |||
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common share |
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
| |||||
| Net income (loss) attributable to ExxonMobil (millions of dollars) |
|
| (610) |
|
| 2,350 | |||||
|
|
|
|
|
|
|
| |||||
| Weighted average number of common shares outstanding (millions of shares) |
|
| 4,270 |
|
| 4,270 | |||||
|
|
|
|
|
|
|
| |||||
| Earnings (Loss) per common share (dollars) (1) |
|
| (0.14) |
|
| 0.55 | |||||
|
|
|
|
|
|
|
| |||||
| Dividends paid per common share (dollars) |
|
| 0.87 |
|
| 0.82 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The calculation of earnings (loss) per common share and earnings (loss) per common share – assuming dilution are the same in each period shown.
6.Pension and Other Postretirement Benefits
|
|
|
|
|
|
|
| Three Months Ended | |||
|
|
|
|
|
|
|
| March 31, | |||
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
|
|
|
| (millions of dollars) | |||
| Components of net benefit cost |
|
|
|
|
|
|
| |||
|
| Pension Benefits - U.S. |
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
|
| 235 |
|
| 175 | |
|
|
| Interest cost |
|
|
| 177 |
|
| 193 | |
|
|
| Expected return on plan assets |
|
|
| (175) |
|
| (142) | |
|
|
| Amortization of actuarial loss/(gain) and prior service cost |
|
| 79 |
|
| 77 | ||
|
|
| Net pension enhancement and curtailment/settlement cost |
|
| 52 |
|
| 54 | ||
|
|
| Net benefit cost |
|
|
| 368 |
|
| 357 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pension Benefits - Non-U.S. |
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
|
| 175 |
|
| 139 | |
|
|
| Interest cost |
|
|
| 161 |
|
| 192 | |
|
|
| Expected return on plan assets |
|
|
| (222) |
|
| (197) | |
|
|
| Amortization of actuarial loss/(gain) and prior service cost |
|
| 119 |
|
| 103 | ||
|
|
| Net benefit cost |
|
|
| 233 |
|
| 237 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Postretirement Benefits |
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
|
| 45 |
|
| 33 | |
|
|
| Interest cost |
|
|
| 70 |
|
| 79 | |
|
|
| Expected return on plan assets |
|
|
| (4) |
|
| (4) | |
|
|
| Amortization of actuarial loss/(gain) and prior service cost |
|
| 12 |
|
| 3 | ||
|
|
| Net benefit cost |
|
|
| 123 |
|
| 111 | |
|
|
|
|
|
|
|
|
|
|
|
|
11
7.Financial Instruments and Derivatives
Financial Instruments. The estimated fair value of financial instruments at March 31, 2020, and December 31, 2019, and the related hierarchy level for the fair value measurement is as follows:
|
|
|
|
| At March 31, 2020 | ||||||||||||||
|
|
|
|
| (millions of dollars) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value |
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Difference |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Gross |
| Effect of |
| Effect of |
| in Carrying |
| Net |
|
|
|
|
|
|
|
|
|
|
| Assets |
| Counterparty |
| Collateral |
| Value and |
| Carrying |
|
|
|
|
| Level 1 |
| Level 2 |
| Level 3 |
| & Liabilities |
| Netting |
| Netting |
| Fair Value |
| Value |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative assets (1) |
| 4,565 |
| 171 |
| - |
| 4,736 |
| (3,603) |
| (962) |
| - |
| 171 | ||
| Advances to/receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| from equity companies (2)(7) |
| - |
| 1,702 |
| 6,088 |
| 7,790 |
| - |
| - |
| 746 |
| 8,536 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial assets (3) |
| 1,141 |
| - |
| 975 |
| 2,116 |
| - |
| - |
| 51 |
| 2,167 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative liabilities (4) |
| 3,637 |
| 216 |
| - |
| 3,853 |
| (3,603) |
| (34) |
| - |
| 216 | ||
| Long-term debt (5) |
| 33,128 |
| 124 |
| 4 |
| 33,256 |
| - |
| - |
| (2,630) |
| 30,626 | ||
| Long-term obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| to equity companies (7) |
| - |
| - |
| 3,490 |
| 3,490 |
| - |
| - |
| 534 |
| 4,024 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial liabilities (6) |
| - |
| - |
| 1,064 |
| 1,064 |
| - |
| - |
| 40 |
| 1,104 |
|
|
|
|
| At December 31, 2019 | ||||||||||||||
|
|
|
|
| (millions of dollars) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value |
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Difference |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Gross |
| Effect of |
| Effect of |
| in Carrying |
| Net |
|
|
|
|
|
|
|
|
|
|
| Assets |
| Counterparty |
| Collateral |
| Value and |
| Carrying |
|
|
|
|
| Level 1 |
| Level 2 |
| Level 3 |
| & Liabilities |
| Netting |
| Netting |
| Fair Value |
| Value |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative assets (1) |
| 533 |
| 102 |
| - |
| 635 |
| (463) |
| (70) |
| - |
| 102 | ||
| Advances to/receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| from equity companies (2)(7) |
| - |
| 1,941 |
| 6,729 |
| 8,670 |
| - |
| - |
| (128) |
| 8,542 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial assets (3) |
| 1,145 |
| - |
| 974 |
| 2,119 |
| - |
| - |
| 44 |
| 2,163 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative liabilities (4) |
| 568 |
| 70 |
| - |
| 638 |
| (463) |
| (105) |
| - |
| 70 | ||
| Long-term debt (5) |
| 25,652 |
| 134 |
| 3 |
| 25,789 |
| - |
| - |
| (1,117) |
| 24,672 | ||
| Long-term obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| to equity companies (7) |
| - |
| - |
| 4,245 |
| 4,245 |
| - |
| - |
| (257) |
| 3,988 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial liabilities (6) |
| - |
| - |
| 1,042 |
| 1,042 |
| - |
| - |
| 16 |
| 1,058 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Included in the Balance Sheet lines: Notes and accounts receivable, less estimated doubtful amounts and Other assets, including intangibles, net | ||||||||||||||||||
(2) | Included in the Balance Sheet line: Investments, advances and long-term receivables | ||||||||||||||||||
(3) | Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles, net | ||||||||||||||||||
(4) | Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations | ||||||||||||||||||
(5) | Excluding finance lease obligations | ||||||||||||||||||
(6) | Included in the Balance Sheet line: Other long-term obligations | ||||||||||||||||||
(7) | Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company. |
12
The increase in the estimated fair value and book value of long-term debt reflects the Corporation’s issuance of $8.5 billion of long-term debt in the first quarter of 2020. The $8.5 billion of long-term debt is comprised of $1,500 million of 2.992% notes due in 2025, $1,000 million of 3.294% notes due in 2027, $2,000 million of 3.482% notes due in 2030, $1,250 million of 4.227% notes due in 2040, and $2,750 million of 4.327% notes due in 2050.
In the first quarter of 2020, the Corporation established a short-term credit facility to provide an additional $7.0 billion of borrowing capacity for general corporate purposes to supplement its existing short-term revolving credit facilities of $7.9 billion as of year-end 2019. The majority of these credit facilities will expire within one year. As of March 31, 2020, no material amounts have been drawn on these facilities.
Subsequent Event. On April 15, 2020, the Corporation issued $9.5 billion of long-term debt. The $9.5 billion of long-term debt is comprised of $2,750 million of 1.571% notes due in 2023, $1,250 million of 2.992% notes due in 2025, $2,000 million of 2.610% notes due in 2030, $750 million of 4.227% notes due in 2040, and $2,750 million of 3.452% notes due in 2051. Net cash proceeds were $9.6 billion reflecting two tranches that were issued at a premium. This transaction was not reflected in the consolidated financial statements as of March 31, 2020.
Derivative Instruments. The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the Corporation’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and for trading purposes. Commodity contracts held for trading purposes are presented in the Consolidated Statement of Income on a net basis in the line “Sales and other operating revenue.” The Corporation’s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation’s financial position as of March 31, 2020, and December 31, 2019, or results of operations for the periods ended March 31, 2020 and 2019.
Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.
At March 31, 2020, the net notional long/(short) position of derivative instruments was (4) million barrels for crude oil, (36) million barrels for products, and (192) million MMBtus of natural gas. At December 31, 2019, the net notional long/(short) position of derivative instruments was 57 million barrels for crude oil, (38) million barrels for products, and (165) million MMBtus of natural gas.
Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Consolidated Statement of Income are included in the following lines on a before-tax basis:
|
|
|
|
|
| Three Months Ended | |||
|
|
|
|
|
| March 31, | |||
|
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
|
Sales and other operating revenue |
|
| 1,236 |
|
| (275) | |||
Crude oil and product purchases |
|
| (352) |
|
| (18) | |||
|
| Total |
|
| 884 |
|
| (293) |
13
8.Disclosures about Segments and Related Information
|
|
|
|
|
|
| Three Months Ended | |||
|
|
|
|
|
|
| March 31, | |||
|
|
|
|
|
|
| 2020 |
|
| 2019 |
| Earnings (Loss) After Income Tax |
|
|
| (millions of dollars) | |||||
|
| Upstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| (704) |
|
| 96 |
|
|
| Non-U.S. |
|
|
| 1,240 |
|
| 2,780 |
|
| Downstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| (101) |
|
| (161) |
|
|
| Non-U.S. |
|
|
| (510) |
|
| (95) |
|
| Chemical |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 288 |
|
| 161 |
|
|
| Non-U.S. |
|
|
| (144) |
|
| 357 |
|
| Corporate and financing |
|
|
| (679) |
|
| (788) | |
|
| Corporate total |
|
|
| (610) |
|
| 2,350 | |
|
|
|
|
|
|
|
|
|
|
|
| Sales and Other Operating Revenue |
|
|
|
|
|
|
| ||
|
| Upstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 1,777 |
|
| 2,693 |
|
|
| Non-U.S. |
|
|
| 2,567 |
|
| 3,804 |
|
| Downstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 15,384 |
|
| 15,642 |
|
|
| Non-U.S. |
|
|
| 29,304 |
|
| 32,297 |
|
| Chemical |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 2,296 |
|
| 2,505 |
|
|
| Non-U.S. |
|
|
| 3,800 |
|
| 4,695 |
|
| Corporate and financing |
|
|
| 6 |
|
| 10 | |
|
| Corporate total |
|
|
| 55,134 |
|
| 61,646 | |
|
|
|
|
|
|
|
|
|
|
|
| Intersegment Revenue |
|
|
|
|
|
|
| ||
|
| Upstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 2,273 |
|
| 2,311 |
|
|
| Non-U.S. |
|
|
| 6,387 |
|
| 7,129 |
|
| Downstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 3,952 |
|
| 4,761 |
|
|
| Non-U.S. |
|
|
| 5,124 |
|
| 6,169 |
|
| Chemical |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 1,766 |
|
| 1,889 |
|
|
| Non-U.S. |
|
|
| 1,263 |
|
| 1,547 |
|
| Corporate and financing |
|
|
| 55 |
|
| 53 |
14
| Geographic |
|
|
|
|
|
| ||
|
|
|
| Three Months Ended | |||||
|
|
|
|
|
| March 31, | |||
| Sales and Other Operating Revenue |
|
| 2020 |
|
| 2019 | ||
|
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
|
| United States |
|
| 19,457 |
|
| 20,840 | ||
| Non-U.S. |
|
| 35,677 |
|
| 40,806 | ||
|
| Total |
|
| 55,134 |
|
| 61,646 | |
|
|
|
|
|
|
|
|
|
|
| Significant Non-U.S. revenue sources include: (1) |
|
|
|
|
|
| ||
|
| Canada |
|
| 3,823 |
|
| 4,850 | |
|
| United Kingdom |
|
| 3,691 |
|
| 4,421 | |
|
| Singapore |
|
| 2,616 |
|
| 3,121 | |
|
| France |
|
| 2,589 |
|
| 3,074 | |
|
| Italy |
|
| 1,958 |
|
| 2,645 | |
|
| Belgium |
|
| 1,889 |
|
| 3,529 |
(1) Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in Non-U.S. operations where attribution to a specific country is not practicable.
9.Leases
A previously recorded operating lease was renegotiated in the first quarter of 2020 and the new agreement no longer meets the definition of a lease. At year-end 2019, this agreement had been reported as a right of use asset of $1.3 billion and a lease liability of $1.3 billion in the “Other” operating lease category. The new agreement will be reported as a take-or-pay obligation.
15
10.Allowance for Current Expected Credit Loss (CECL)
Effective January 1, 2020, the Corporation adopted the Financial Accounting Standards Board’s update, Financial Instruments – Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and reasonable and supportable forecasts. The standard requires this expected loss methodology for trade receivables, certain other financial assets and off-balance sheet credit exposures. The cumulative effect adjustment related to the adoption of this standard reduced equity by $93 million.
The Corporation is exposed to credit losses primarily through sales of petroleum products, crude oil, NGLs and natural gas, as well as loans to equity companies and joint venture receivables. A counterparty’s ability to pay is assessed through a credit review process that considers payment terms, the counterparty’s established credit rating or the Corporation’s assessment of the counterparty’s credit worthiness, contract terms, country of operation, and other risks. The Corporation can require prepayment or collateral to mitigate certain credit risks.
The Corporation groups financial assets into portfolios that share similar risk characteristics for purposes of determining the allowance for credit losses. Each reporting period, the Corporation assesses whether a significant change in the risk of credit loss has occurred. Among the quantitative and qualitative factors considered are historical financial data, current conditions, industry and country risk, current credit ratings and the quality of third-party guarantees secured from the counterparty. Financial assets are written off in whole, or in part, when practical recovery efforts have been exhausted and no reasonable expectation of recovery exists. Subsequent recoveries of amounts previously written off are recognized in earnings. The Corporation manages receivable portfolios using past due balances as a key credit quality indicator.
The Corporation recognizes a credit allowance for off-balance sheet credit exposures as a liability on the balance sheet, separate from the allowance for credit losses related to recognized financial assets. Among these exposures are unfunded loans to equity companies and financial guarantees that cannot be cancelled unilaterally by the Corporation.
During the first quarter of 2020, the COVID-19 pandemic spread rapidly through most areas of the world resulting in economic uncertainty, global financial market volatility, and negative effects in the credit markets. The Corporation has considered these effects, along with the significantly lower balances of trade receivables at the end of the quarter, in its estimate of credit losses and concluded no material adjustment to credit allowances in the quarter was required. At March 31, 2020, the Corporation’s evaluation of financial assets under Financial Instruments – Credit Losses (Topic 326), as amended, included $17,740 million of notes and accounts receivable, net of allowances of $148 million, and $9,211 million of loans and long-term receivables, net of allowances of $441 million, and certain other financial assets where there is immaterial risk of loss.
|
|
| Reserve for | Liabilities for |
| |||
|
|
| Notes and Other | Off Balance |
| |||
|
|
| Receivables and Loans | Sheet Assets |
| |||
|
|
| Trade | Other |
|
|
| Total |
|
|
| (millions of dollars) | |||||
|
|
|
|
|
|
|
|
|
Balance at December 31, 2019 | 34 | 469 |
| - |
| 503 | ||
Cumulative effect of accounting change | 52 | 45 |
| 12 |
| 109 | ||
Current period provision | 4 | 1 |
| (1) |
| 4 | ||
Write-offs charged against the allowance | (1) | - |
| - |
| (1) | ||
Other | (1) | (14) |
| 2 |
| (13) | ||
Balance at March 31, 2020 | 88 | 501 |
| 13 |
| 602 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
16
EXXON MOBIL CORPORATION
FUNCTIONAL EARNINGS SUMMARY First Three Months Earnings (Loss) (U.S. GAAP) 2020 2019 (millions of dollars) Upstream United States (704) 96 Non-U.S. 1,240 2,780 Downstream United States (101) (161) Non-U.S. (510) (95) Chemical United States 288 161 Non-U.S. (144) 357 Corporate and financing (679) (788) Net income (loss) attributable to ExxonMobil (U.S. GAAP) (610) 2,350 Earnings (Loss) per common share (dollars) (0.14) 0.55 Earnings (Loss) per common share - assuming dilution (dollars) (0.14) 0.55 First Three Months 2020 2019 (millions of dollars) Upstream results United States (704) 96 Non-U.S. 1,240 2,780 Total 536 2,876 •Liquids production totaled 2.4 million barrels per day, down 12,000 barrels per day, with growth, higher entitlements, and lower downtime more than offset by divestments, government mandates, and lower demand. (1) First Quarter Upstream additional information (thousands of barrels daily) Volumes reconciliation (Oil-equivalent production) (1) 2019 3,981 Entitlements - Net Interest (6) Entitlements - Price / Spend / Other 55 Quotas - Divestments (177) Growth / Other 193 2020 4,046 (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. First Three Months 2020 2019 (millions of dollars) Downstream results United States (101) (161) Non-U.S. (510) (95) Total (611) (256) Downstream results were a loss of First Three Months 2020 2019 (millions of dollars) Chemical results United States 288 161 Non-U.S. (144) 357 Total 144 518 Higher margins increased earnings by $190 million. Volume and mix effects decreased earnings by $220 million. First Three Months 2020 2019 (millions of dollars) Corporate and financing results (679) (788) LIQUIDITY AND CAPITAL RESOURCES First Three Months 2020 2019 (millions of dollars) Net cash provided by/(used in) Operating activities 6,274 8,338 Investing activities (6,367) (5,793) Financing activities 8,785 (1,044) Effect of exchange rate changes (369) 43 Increase/(decrease) in cash and cash equivalents 8,323 1,544 Cash and cash equivalents (at end of period) 11,412 4,586 Cash flow from operations and asset sales Net cash provided by operating activities (U.S. GAAP) 6,274 8,338 Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments 86 107 Cash flow from operations and asset sales 6,360 8,445 LIQUIDITY AND CAPITAL RESOURCES issuances. above second quarter levels. TAXES First Three Months 2020 2019 (millions of dollars) Income taxes 512 1,883 Effective income tax rate 481 % 53 % Total other taxes and duties (1) 7,497 8,087 Total 8,009 9,970 CAPITAL AND EXPLORATION EXPENDITURES First Three Months 2020 2019 (millions of dollars) Upstream (including exploration expenses) 5,126 5,361 Downstream 1,234 829 Chemical 782 696 Other 1 4 Total 7,143 6,890 Capital and exploration expenditures in the first PART II. OTHER INFORMATION the treasury both to offset shares issued in conjunction with company benefit plans and programs and to gradually reduce the number of INDEX TO EXHIBITS Exhibit Description Standing resolution for non-employee director cash fees dated March 1, Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer. Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Financial Officer. Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer. Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer. Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Financial Officer. Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer. 101 Interactive Data Files (formatted as Inline XBRL). 104 Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). EXXON MOBIL CORPORATION Date: By: /s/ DAVID S. ROSENTHAL David S. Rosenthal Vice President, Controller and Principal Accounting Officer Third Quarter First Nine Months Earnings (Loss) (U.S. GAAP) 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Upstream United States (681) 37 (2,582) 468 Non-U.S. 298 2,131 1,084 7,837 Downstream United States (136) 673 (338) 822 Non-U.S. (95) 557 472 603 Chemical United States 357 53 816 208 Non-U.S. 304 188 456 739 Corporate and financing (727) (469) (2,278) (2,027) Net income (loss) attributable to ExxonMobil (U.S. GAAP) (680) 3,170 (2,370) 8,650 (0.15) 0.75 (0.55) 2.03 (0.15) 0.75 (0.55) 2.03 oil producingoil-producing countries which led to increases in inventory levels and sharp declines in prices for crude oil and other petrochemical products.Against this backdrop During the second and third quarters, the effects of COVID-19 continued to have a negative impact on the world’s major economies and demand for our products.uncertainty, global financial markets have experienced significant volatility and disruption, which at timesimpacts appear increasingly likely to persist to some extent well into 2021.negatively impacted the efficiency of credit markets and available pools of liquidity.Intaken several actions in response to these conditions,conditions. In April 2020 the Corporation announced significant reductions in 2020 capital spending and operating expenses. Capital and exploration expenditures for 2020 are now expected to be no more than $23 billion, down from the previously announced $33 billion. The Corporation took steps to strengthen its liquidity including issuing $8.5 billion of long-term U.S. debt securities in the first quarter of 2020 and issuing a further $9.5 billion of long-term U.S. debt securities and $5.0 billion of long-term Euro-denominated debt securities in the second quarter of 2020. The Corporation is developing plans consistent with near-term demand uncertainties and does not plan on increasing gross debt above second quarter levels. The Corporation had undrawn short-term committed lines of credit of $11.0 billion and an undrawn long-term committed line of credit of $0.2 billion as of third quarter 2020. In the third quarter, the Corporation increased its 364-day facility from $7.5 billion to $10 billion and terminated the supplemental $7.0 billion facility that was established in the first quarter of 2020.has resulted in a downward revision to estimates of proved reserves estimates reported in the 2019 Form 10-K of approximately 1 billion oil-equivalent barrels, mainly related to unconventional drilling in the United States. Consequently, unit-of-production depreciation and depletion rates for Upstream assets will be higherincreased beginning in the first quarter.The Corporation also took additional actions to strengthen its liquidity including issuing $8.5 billion of long-term debt securities inquarter, which continued through the first quarter of 2020 and issuing a further $9.5 billion of long-term debt securities subsequent to the date of the financial statements as described in Note 7. In the first quarter of 2020, the Corporation established a short-term credit facility to provide an additional $7.0 billion of borrowing capacity for general corporate purposes to supplement its existing short-term revolving credit facilities of $7.9 billion as of year-end 2019. The majority of these credit facilities will expire within one year and may be renewed or replaced according to the Corporation’s financing needs and business environment. As of March 31, 2020, no material amounts have been drawn on these facilities.17Should industry conditions near the end of the first quarter persist for an extended period into the future, the Corporation expects lower realized prices for its products to result in lower earnings and operating cash flow than in previous quarters. Amidst these conditions, project deferrals and idling of capacity will continue or may increase, and project cancellations could occur, resulting in lower volumes across one or more business segments. The capital spending reductions will result in lower near-term production volumes in the Upstream and delays in previously anticipated volume increases in future years. While the Corporation’s view of long-term supply and demand fundamentals has not changed significantly, any future reduction in the range of its long-term price outlooks could put a significant portion of its long-lived assets at risk for impairment. However, due to the inherent difficulty in predicting future commodity prices, and the relationship between industry prices and costs, it is not practicable to reasonably estimate the existence or range of any potential future impairment charges related to the Corporation’s long-lived assets.As disclosed in ExxonMobil’s 2019 Form 10-K, low crude oil and natural gas prices can impact the Corporation’s proved reserves as reported under Securities and Exchange Commission (SEC) rules.third quarter. Average year-to-date crude oil and natural gas prices have been significantly affected by the very low prices experienced nearsince the end of the first quarter. IfShould prices seenremain near the end of the first quarter persistcurrent levels for the remainder of the year, under the SEC definition of proved reserves, certain quantities of crude oil, bitumen and natural gas will not qualify as proved reserves at year-end 2020. SinceBased on available price information for 2020 and the effects of expected reductions in capital spending mentioned above, it is possible that reductions to proved reserves estimates are affected by a numbercould amount to approximately 25 percent of factors including timing and completion of development projects, reservoir performance, market prices and differentials, costs, fiscal and commercial terms, government policies, regulatory approvals and partner considerations, it is not practicable to reasonably estimate the range of any potential future revisions to the Corporation’s proved reserves for22.4 billion oil-equivalent barrels reported at year-end 2020 reporting.2019.FIRSTTHIRD QUARTER 2020 RESULTSfirstthird quarter 2020 results were a loss of $610 million,$0.7 billion, or $0.14$0.15 per diluted share, compared with earnings of $2.4$3.2 billion a year earlier. The decrease in earnings was primarily the result of lower Upstream realizations, reduced Downstream margins, and unfavorable non-operational impacts, and lower Upstream realizations.including less favorable one-time tax items. These impacts were partly offset by lower expenses across all business segments and higher Downstream margins on favorable mark-to-market derivatives, reduced maintenance activity mainly involume and mix effects.Downstream,first nine months of 2020 were a loss of $2.4 billion, or $0.55 per diluted share, compared with earnings of $8.7 billion a year earlier.Upstream volume growth. Unfavorable non-operational impacts reflected an inventory write-down and impairments, with further information provided in Note 2.exploration expenditures were $16.6 billion, down $6.1 billion from 2019.4.03.8 million barrels per day, up 2down 4 percent from the prior year. Excluding entitlement effects, divestments, and divestments,government mandates, oil-equivalent production was up 5 percent.essentially flat with the prior year.$3.7$11.2 billion in dividends to shareholders. Third Quarter First Nine Months 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Upstream results United States (681) 37 (2,582) 468 Non-U.S. 298 2,131 1,084 7,837 Total (383) 2,168 (1,498) 8,305 $536$298 million, down $1,833 million from the prior year quarter.quarternine months of 2020, compared with earnings of $8,305 million in the first nine months of 2019.$2,340$6,753 million from the prior year.quarternine months of 2019.·Realizations reduced earnings by $2,020 million, with lower liquids realizations of $1,370 million and lower gas realizations of $650 million.·Volume and mix effects increased earnings by $220 million due to higher liquids volumes of $290 million partly offset by lower gas volumes of $70 million.·All other items decreased earnings by $540 million, mainly due to unfavorable non-operational impacts associated with impairments of $360 million and an inventory write-down of $260 million.·U.S. Upstream results were a loss of $704 million, down $800 million from the prior year quarter.·Non-U.S. Upstream earnings were $1,240 million, down $1,540 million from the prior year quarter.·On an oil-equivalent basis, production increased 2 percent from the first quarter of 2019.·Liquids production totaled 2.5 million barrels per day, up 153,000 barrels per day, with growth and lower downtime partly offset by divestments.·Natural gas production was 9.4 billion cubic feet per day, down 528 million cubic feet per day, mainly driven by divestments and lower demand. Third Quarter First Nine Months Upstream additional information (thousands of barrels daily) (thousands of barrels daily) 2019 3,899 3,929 Entitlements - Net Interest (9) (8) Entitlements - Price / Spend / Other 159 108 Government Mandates (139) (82) Divestments (154) (163) Growth / Other (84) 1 2020 3,672 3,785 18QuotasGovernment Mandates are changes in ExxonMobil’s allowableto ExxonMobil's sustainable production arising fromlevels due to temporary non-operational production constraintslimits imposed by countries which are membersgovernments, generally upon a sector, type or method of the Organization of the Petroleum Exporting Countries (OPEC). Volumes reported in this category would have been readily producible in the absence of the quota.production. Third Quarter First Nine Months 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Downstream results United States (136) 673 (338) 822 Non-U.S. (95) 557 472 603 Total (231) 1,230 134 1,425 19$611$231 million in the third quarter of 2020, down $1,461 million from the third quarter of 2019. Third Quarter First Nine Months 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Chemical results United States 357 53 816 208 Non-U.S. 304 188 456 739 Total 661 241 1,272 947 a lossearnings of $256$53 million in the prior year quarter.quarter of 2019.·Margins increased earnings by $1,260 million, mainly reflecting favorable mark-to-market derivatives and higher margins on product sales.·Volume and mix effects increased earnings by $390 million.·All other items reduced earnings by $2,010 million, mainly due to unfavorable non-operational impacts associated with an inventory write-down of $1,600 million and impairments of $340 million.·U.S. Downstream results were a loss of $101 million, compared with a loss of $161 million in the prior year quarter.·Non-U.S. Downstream results were a loss of $510 million, compared with a loss of $95 million in the prior year quarter.·Petroleum product sales of 5.3 million barrels per day were 128,000 barrels per day lower than the prior year quarter.Chemical earnings were $144 million in the first quarternine months of 2020, down $374up $325 million from the first quarternine months of 2019.·Higher margins increased earnings by $10 million.·Volume and mix effects decreased earnings by $60 million.·All other items decreased earnings by $320 million, mainly due to unfavorable non-operational impacts associated with an inventory write-down of $230 million and impairments of $90 million.·U.S. Chemical earnings were $288 million, up $127 million from the prior year quarter.·Non-U.S. Chemical results were a loss of $144 million, compared with earnings of $357 million in the prior year quarter.·First quarter prime product sales of 6.2 million metric tons were 535,000 metric tons lower than the prior year quarter. Third Quarter First Nine Months 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Corporate and financing results (727) (469) (2,278) (2,027) $679$727 million for the third quarter of 2020, up $258 million from the third quarter of 2019, reflecting the absence of a prior year favorable one-time tax item.quarternine months of 2020, down $109up $251 million from 2019, reflecting the first quarterabsence of 2019.prior year favorable one-time tax items and higher financing costs partly offset by lower corporate costs.20 Third Quarter First Nine Months 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Net cash provided by/(used in) Operating activities 10,663 23,364 Investing activities (15,157) (18,820) Financing activities 10,568 (2,162) Effect of exchange rate changes (331) (73) Increase/(decrease) in cash and cash equivalents 5,743 2,309 Cash and cash equivalents (at end of period) 8,832 5,351 Cash flow from operations and asset sales Net cash provided by operating activities (U.S. GAAP) 4,389 9,079 10,663 23,364 Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments 100 460 229 600 Cash flow from operations and asset sales 4,489 9,539 10,892 23,964 firstthird quarter of 2020 was $6.4 billion, including asset sales of $0.1$4.5 billion, a decrease of $2.1$5.1 billion from the comparable 2019 period primarily reflecting lower earnings and unfavorable working capital impacts. Current market conditions and the ability of counterparties to secure financing may negatively affect the pace of asset sales in 2020.$6.3$10.7 billion for the first threenine months of 2020, $2.1$12.7 billion lower than 2019. Net income including noncontrolling interests was a loss of $0.8$2.6 billion, a decrease of $3.2$11.7 billion from the prior year period. The adjustments for the noncash provisions were $5.8$15.7 billion for depreciation and depletion and $2.2$0.1 billion for the lower of cost or market inventory adjustment. Changes in operational working capital were a reduction of $0.9$1.5 billion, compared to a contribution of $2.3$2.6 billion in the prior year period. All other items net decreased cash flows by $0.1$0.9 billion in 2020 versus a reduction of $0.9$2.3 billion in 2019. See the Condensed Consolidated Statement of Cash Flows for additional details.threenine months of 2020 used net cash of $6.4$15.2 billion, an increasea decrease of $0.6$3.7 billion compared to the prior year. Spending for additions to property, plant and equipment of $5.9$13.7 billion was $0.7$4.0 billion higherlower than 2019. Proceeds from asset sales of $0.1$0.2 billion were $0.4 billion lower than the prior year. Net investments and advances were comparable to the prior year. Investments and advances decreased $0.2 billion to $0.5year at $1.7 billion.quarternine months of 2020, the Corporation issued $8.5$23.2 billion of long-term debt. Net cash provided by financing activities was $8.8$10.6 billion in the first threenine months of 2020, $9.8$12.7 billion higher than 2019 reflecting the 2020 debt issuance.firstthird quarter of 2020 was $59.6$68.8 billion compared to $46.9 billion at year-end 2019. The Corporation's debt to total capital ratio was 24.027.1 percent at the end of the firstthird quarter of 2020 compared to 19.1 percent at year-end 2019.threenine months of 2020, Exxon Mobil Corporation purchased 6 million shares of its common stock for the treasury at a gross cost of $0.3 billion. These purchases were made to offset shares or units settled in shares issued in conjunction with the company’s benefit plans and programs. Shares outstanding decreased from 4,234 million at year-end to 4,228 million at the end of the firstthird quarter of 2020. Purchases may be made both in the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.retainedhas access to significant capacity of long-term and short-term liquidity during the period despite challenging financial market conditions.liquidity. Commercial paper continuedcontinues to provide short-term liquidity despite brief periods of reduced investor demand. Theand the balance of commercial paper outstanding was $24.4$18.8 billion as of March 31,September 30, 2020. To provide increased liquidityCash and flexibility,cash equivalents was $8.8 billion at the end of the third quarter of 2020. The Corporation had undrawn short-term committed lines of credit of $11.0 billion and an undrawn long-term committed line of credit of $0.2 billion as of third quarter 2020. In the third quarter, the Corporation increased cash and cash equivalents by $8.3its 364-day facility from $7.5 billion to $11.4$10.0 billion duringand terminated the supplemental $7.0 billion facility that was established in the first quarter of 2020. Additionally, in the first quarter of 2020, the Corporation established a short-term credit facility to provide an additional $7.0 billion of borrowing capacity for general corporate purposes to supplement its existing short-term revolving credit facilities of $7.9 billion as of year-end 2019. The majority of these credit facilities will expire within one year and may be renewed or replaced according to the Corporation’s financing needs and business environment. As of March 31, 2020, no material amounts have been drawn on these facilities.21Short-termInternally generated funds and available cash are generally expected to cover financial requirements, supplemented by short-term and long-term debt as required. The Corporation is used to cover cash needs in excess of internally generated funds. Under current economic conditions, the level ofdeveloping plans consistent with near-term demand uncertainties and does not plan on increasing gross debt is expected to increase in the near-term. The Corporation’s balance sheet strength and access to financial markets on attractive terms provide the capacity to continue investing in industry-advantaged projects to create value and preserve cash for the dividend. Management views the Corporation’s financial strength as a competitive advantage and maintaining a competitive credit position is an important factor in balancing capital allocation priorities and determining the pace of investments.$3.7$11.2 billion to shareholders in the first threenine months of 2020 through dividends. Third Quarter First Nine Months 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Income taxes 337 1,474 378 4,598 Effective income tax rate -198 % 37 % -56 % 41 % 7,901 8,317 21,081 24,770 Total 8,238 9,791 21,459 29,368 $8.0$8.2 billion for the firstthird quarter of 2020, a decrease of $2.0$1.6 billion from 2019. Income tax expense decreasedwas $0.3 billion compared to $1.5 billion in the prior year reflecting operating losses driven by $1.4 billion to $0.5 billion reflecting lower pre-tax income resulting from lower commodity prices. The effective income tax rate of 481-198 percent compared to 5337 percent in the prior year period primarily due to a change in mix of earningsresults in jurisdictions with varying tax rates. The change in mix of earnings was primarily driven by inventory valuation and impairment impacts. Total other taxes and duties decreased by $0.6$0.4 billion to $7.5$7.9 billion.suit and is assessingsuit. Proceedings in the ruling.District Court are continuing. Unfavorable resolution of all positions at issue with the IRS would not have a materially adverse effect on the Corporation’s net income or liquidity. The IRS has asserted penalties associated with several of those positions. The Corporation has not recognized the penalties as an expense because the Corporation does not expect the penalties to be sustained under applicable law. Third Quarter First Nine Months 2020 2019 2020 2019 (millions of dollars) (millions of dollars) Upstream (including exploration expenses) 2,794 5,791 11,497 17,394 Downstream 772 1,069 3,059 3,011 Chemical 564 852 2,041 2,266 Other 3 7 6 17 Total 4,133 7,719 16,603 22,688 22quarternine months of 2020 were $7.1$16.6 billion, up 4down 27 percent from the first quarternine months of 2019.2019 in response to market conditions. The Corporation anticipates an investment level of no more than $23 billion in 2020, down from the previously announced $33 billion. Actual spending could vary depending on the progress of individual projects and property acquisitions.performance,performance; the impact of the COVID-19 pandemic on results; planned capital and cash operating expense reductions;reductions and ability to meet or exceed announced reduction objectives; total capital expenditures and mix; earnings; cash flow,flow; capital allocation and debt levels; dividend and shareholder returns; business and project plans, timing, costs and capacities; resource recoveries and production rates; accounting and financial reporting effects resulting from market developments and ExxonMobil’s responsive actions;actions, including potential impairment charges resulting from any significant changes in current development plan strategy or divestment plans; the pace and outcome of divestments; and the impact of new technologies, including to increase capital efficiency and production and to reduce greenhouse gas emissions and intensity, could differ materially due to a number of factors. These include global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market conditions that impact prices and differentials; the outcome of government policies and actions, including actions taken to address COVID-19 and to maintain the functioning of national and global economies and markets; the impact of company actions to protect the health and safety of employees, vendors, customers, and communities; actions of competitors and commercial counterparties; the ability to access short- and long-term debt markets on a timely and affordable basis; the severity, length and ultimate impact of COVID-19 on people and economies;economies, including the nature and pace of economic recovery as well as the ability of ExxonMobil and its vendors and contractors to maintain operations while taking appropriate health protective measures for employees and others; reservoir performance; the outcome of exploration projects and timely completion of development and construction projects; changes in law, taxes, or regulation including environmental regulations, and timely granting of governmental permits; war, trade agreements and patterns, shipping blockades or harassment, and other political or security disturbances; opportunities for and regulatory approval of potential investments or divestments; the actions of competitors; the capture of efficiencies within and between business lines;lines and the ability to maintain near-term cost reductions as ongoing efficiencies while maintaining future competitive positioning; unforeseen technical or operating difficulties; unexpected technological developments;the development and competitiveness of alternative energy and emission reduction technologies; the results of research programs; the ability to bring new technologies to commercial scale on a cost-competitive basis, including emission reduction technologies and large-scale hydraulic fracturing projects; general economic conditions including the occurrence and duration of economic recessions; the results of research programs; and other factors discussed under the heading Factors Affecting Future Results on the Investors page of our website at www.exxonmobil.com and in Item 1A of ExxonMobil’s 2019 Form 10-K.10-K and subsequent Forms 10-Q for the quarters ended March 31, 2020, June 30, 2020, and September 30, 2020. Statements regarding plans or potential outcomes for the fourth quarter 2020 and 2021 also remain subject to completion of ExxonMobil’s annual corporate planning process and approval of the resulting company plan by the Board of Directors, expected in November 2020. We assume no duty to update these statements as of any future date.23threenine months ended March 31,September 30, 2020, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2019.March 31,September 30, 2020. 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.24secondthird quarter of 2006,2017, ExxonMobil appealed to the StateU.S. Court of New York Attorney General (AG) suedAppeals for the Fifth Circuit a numberjudgment of parties, including ExxonMobil, in New York state court, Albany County, seeking penalties relating to an alleged discharge of petroleum at a Mobil-branded service station in Uniondale, New York. The suit (captioned "State of New York v. United Gas Corp. et al.") alleged that the discharge has impacted soil and groundwater in the vicinity of the service station. The AG and the seven defendants agreed to settlement terms in January 2020. The settlement includes a payment of $3.2 million by ExxonMobil and the completion of remediation work by one of the other defendants. No civil penalties were assessed for ExxonMobil or the other defendants.Regarding a matter last reported in the Corporation’s Form 10-K for 2019, on December 31, 2019, the United States Federal District Court Northernfor the Southern District of Texas (the FederalCourt), vacated theentered on April 26, 2017, in a citizen suit captioned Environment Texas Citizen Lobby, Inc. et al. v. Exxon Mobil Corporation. The U.S. District Court had awarded approximately $20 million in civil penalty assessed bypenalties, payable to the United States DepartmentTreasury. In the suit filed in December 2010, Environment Texas Citizen Lobby, Inc. and the Sierra Club, Lone Star Chapter, sought declaratory and injunctive relief, penalties, attorney fees and litigation costs associated with alleged violations of Treasury, OfficeTitle V of Foreign Assets Control (OFAC)the Clean Air Act. Plaintiffs alleged that ExxonMobil repeatedly violated, and will continue to violate, its air operating permits, the Texas State Implementation Plan and the Clean Air Act by emitting air pollutants into the atmosphere from the Baytown complex in excess of applicable emission limitations or otherwise without authorization at the Baytown, Texas, refinery, chemical plant and olefins plant. On July 29, 2020, the Fifth Circuit vacated the District Court’s penalty award and remanded the case back to the District Court for further proceedings. A revised decision in the District Court could occur as early as the fourth quarter of 2020. Exxon Mobil Corporation, ExxonMobil Development Company and ExxonMobil Oil Corporation (EMOC) on July 20,August 19, 2020, seeking penalties and injunctive relief for 13 alleged unauthorized emissions events at EMOC’s Beaumont Refinery in Texas from 2017 for allegedly violatingto 2020. The State alleged violations under the Ukraine-Related Sanctions Regulations, 31 C.F.R. part 589.Texas Clean Air Act, including the alleged failure of EMOC to timely notify the Texas Commission on Environmental Quality of reportable emissions events and alleged failure to submit a proper certification in its October 26, 2018 permit compliance certification. The civil penalty vacated bylawsuit, captioned State of Texas v. ExxonMobil Oil Corporation, was filed in the Federal98th Judicial District Court was inof Travis County, Texas. The State has not quantified the amount of $2,000,000. On April 8, 2020, OFAC and the U.S. Department of Justice confirmed that the U.S. Federal Government will not seek an appeal of the Federal Court’s final judgment vacating the penalty issued by OFAC against the Corporation.sought.25Issuer Purchase of Equity Securities for Quarter Ended September 30, 2020 Period Total Number
of Shares
PurchasedAverage
Price Paid
per ShareTotal Number of
Shares Purchased
as Part of Publicly
Announced Plans
or ProgramsMaximum Number
of Shares that May
Yet Be Purchased
Under the Plans
or ProgramsJuly 2020 — $ — — August 2020 — $ — — September 2020 — $ — — Total — — (See Note 1) Issuer PurchaseEquity Securitiesshares of its common stock for Quarter Ended March 31, 2020Total Number ofMaximum NumberShares PurchasedShares that MayTotal NumberAverageas Partshares 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 earnings release dated February 2, 2016, the Corporation stated it will continue to acquire shares to offset dilution in conjunction with benefit plans and programs, but had suspended making purchases to reduce shares outstanding effective beginning the first quarter of Publicly2016.Yet Be Purchasedof SharesPrice PaidAnnounced PlansUnder the Plans orPeriodPurchasedper Shareor ProgramsProgramsJanuary 20201,775,929$67.551,775,929February 20201,760,540$58.751,760,540March 20202,038,531$39.882,038,531Total5,575,0005,575,000(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 earnings release dated February 2, 2016, the Corporation stated it will continue to acquire shares to offset dilution in conjunction with benefit plans and programs, but had suspended making purchases to reduce shares outstanding effective beginning the first quarter of 2016.26ExhibitDescription By-Laws, as amended effective March 1, 2020 (incorporated by reference to Exhibit 3(ii) to the Registrant’s Report on Form 8-K of March 3, 2020). 2020.2020 (incorporated by reference to Exhibit 10(iii)(f.4) to the Registrant's report on Form 10-Q for the quarter ended March 31, 2020).27 May 6,November 4, 202028