Exxon Mobil (XOM) 10-Q 2008 Q3 Quarterly report

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

( X )   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2008

or

(   )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to________

Commission File Number 1-2256

                                 EXXON MOBIL CORPORATION                                 

(Exact name of registrant as specified in its charter)

                            NEW JERSEY                                                             13-5409005                         

               (State or other jurisdiction of                                              (I.R.S. Employer                     

               incorporation or organization)                                        Identification Number)               

     5959 Las Colinas Boulevard, Irving, Texas                             75039-2298       

(Address of principal executive offices)                               (Zip Code)

                                         (972) 444-1000                                         

(Registrant's telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No    

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer   X 

Accelerated filer      

Non-accelerated filer      

Smaller reporting company      

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes    No  X 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

                      Class                                                                    Outstanding as of September 30, 2008

Common stock, without par value                                                             5,086,649,128                

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2008

TABLE OF CONTENTS

Page

Number

PART I.  FINANCIAL INFORMATION

Item 1.

Financial Statements

Condensed Consolidated Statement of Income

3

Three and nine months ended September 30, 2008 and 2007

Condensed Consolidated Balance Sheet

4

As of September 30, 2008 and December 31, 2007

Condensed Consolidated Statement of Cash Flows

5

Nine months ended September 30, 2008 and 2007

Notes to Condensed Consolidated Financial Statements

6

Item 2.

Management's Discussion and Analysis of Financial

Condition and Results of Operations

16

Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22

Item 4.

Controls and Procedures

22

PART II.  OTHER INFORMATION

Item 1.

Legal Proceedings

22

Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23

Item 5.

Other Information

23

Item 6.

Exhibits

24

Signature

25

Index to Exhibits

26

-2-

PART I.  FINANCIAL INFORMATION

Item 1.  Financial Statements

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2008		2007		2008			2007
REVENUES AND OTHER INCOME
Sales and other operating revenue(1)	$	132,085	$	99,130	$	379,084		$	278,363
Income from equity affiliates		2,824		2,158		8,616			6,088
Other income(2)		2,828		1,049		4,963			3,459
Total revenues and other income		137,737		102,337		392,663			287,910
COSTS AND OTHER DEDUCTIONS
Crude oil and product purchases		73,298		51,973		210,964			139,642
Production and manufacturing expenses		9,878		7,884		28,837			22,845
Selling, general and administrative expenses		3,823		3,656		12,014			10,836
Depreciation and depletion		3,008		3,159		9,202			9,095
Exploration expenses, including dry holes		403		349		1,083			974
Interest expense		318		73		555			272
Sales-based taxes(1)		9,327		7,970		27,297			23,064
Other taxes and duties		10,989		10,229		33,113			29,708
Income applicable to minority interests		536		284		1,043			722
Total costs and other deductions		111,580		85,577		324,108			237,158
INCOME BEFORE INCOME TAXES		26,157		16,760		68,555			50,752
Income taxes		11,327		7,350		31,155			21,802
NET INCOME	$	14,830	$	9,410	$	37,400		$	28,950
NET INCOME PER COMMON SHARE(dollars)	$	2.89	$	1.72	$	7.19		$	5.21
NET INCOME PER COMMON SHARE
- ASSUMING DILUTION(dollars)	$	2.86	$	1.70	$	7.11		$	5.15
DIVIDENDS PER COMMON SHARE(dollars)	$	0.40	$	0.35	$	1.15		$	1.02
(1) Sales-based taxes included in sales and other
operating revenue	$	9,327	$	7,970	$	27,297		$	23,064
(2) Includes $62 million gain from sale of non-U.S. investment,
net of related $143 million foreign exchange loss	$	0	$	0	$	(81	)	$	0
The information in the Notes to Condensed Consolidated Financial Statements
is an integral part of these statements.

-3-

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(millions of dollars)

	Sept. 30,				Dec. 31,
	2008				2007
ASSETS
Current assets
Cash and cash equivalents		$	36,674			$	33,981
Marketable securities			1,760				519
Notes and accounts receivable - net			35,251				36,450
Inventories
Crude oil, products and merchandise			13,510				8,863
Materials and supplies			2,430				2,226
Prepaid taxes and expenses			6,396				3,924
Total current assets			96,021				85,963
Property, plant and equipment - net			123,258				120,869
Investments and other assets			36,939				35,250
TOTAL ASSETS		$	256,218			$	242,082
LIABILITIES
Current liabilities
Notes and loans payable		$	2,881			$	2,383
Accounts payable and accrued liabilities			49,087				45,275
Income taxes payable			15,663				10,654
Total current liabilities			67,631				58,312
Long-term debt			7,383				7,183
Deferred income tax liabilities			23,265				22,899
Other long-term liabilities			32,653				31,926
TOTAL LIABILITIES			130,932				120,320
Commitments and contingencies (note 3)
SHAREHOLDERS' EQUITY
Common stock, without par value:
Authorized:   9,000 million shares
Issued:       8,019 million shares			5,105				4,933
Earnings reinvested			259,878				228,518
Accumulated other comprehensive income
Cumulative foreign exchange translation adjustment			5,407				7,972
Postretirement benefits reserves adjustment			(5,468	)			(5,983	)
Common stock held in treasury:
2,932 million shares at September 30, 2008			(139,636	)
2,637 million shares at December 31, 2007							(113,678	)
TOTAL SHAREHOLDERS' EQUITY			125,286				121,762
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY		$	256,218			$	242,082
The number of shares of common stock issued and outstanding at September 30, 2008 and
December 31, 2007 were 5,086,649,128 and 5,381,795,265, respectively.
The information in the Notes to Condensed Consolidated Financial Statements
is an integral part of these statements.

-4-

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(millions of dollars)

	Nine Months Ended
	September 30,
		2008			2007
CASH FLOWS FROM OPERATING ACTIVITIES
Net income	$	37,400		$	28,950
Depreciation and depletion		9,202			9,095
Changes in operational working capital, excluding cash and debt		4,430			1,283
All other items - net		(1,791	)		1,339
Net cash provided by operating activities		49,241			40,667
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment		(13,993	)		(10,827	)
Sales of subsidiaries, investments, and property, plant and equipment		4,202			2,422
Other investing activities - net		(3,081	)		(1,660	)
Net cash used in investing activities		(12,872	)		(10,065	)
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt		177			104
Reductions in long-term debt		(152	)		(111	)
Additions/(reductions) in short-term debt - net		294			186
Cash dividends to ExxonMobil shareholders		(6,040	)		(5,718	)
Cash dividends to minority interests		(346	)		(252	)
Changes in minority interests and sales/(purchases)
of affiliate stock		(319	)		(510	)
Tax benefits related to stock-based awards		162			356
Common stock acquired		(26,889	)		(23,884	)
Common stock sold		489			891
Net cash used in financing activities		(32,624	)		(28,938	)
Effects of exchange rate changes on cash		(1,052	)		1,515
Increase/(decrease) in cash and cash equivalents		2,693			3,179
Cash and cash equivalents at beginning of period		33,981			28,244
CASH AND CASH EQUIVALENTS AT END OF PERIOD	$	36,674		$	31,423
SUPPLEMENTAL DISCLOSURES
Income taxes paid	$	25,194		$	17,947
Cash interest paid	$	488		$	376
The information in the Notes to Condensed Consolidated Financial Statements
is an integral part of these statements.

-5-

EXXON MOBIL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

1.

Basis of Financial Statement Preparation

These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 2007 Annual Report on Form 10-K.  In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein.  All such adjustments are of a normal recurring nature.  The Corporation's exploration and production activities are accounted for under the "successful efforts" method.

2.

Fair Value Measurements

Effective January 1, 2008, the Corporation adopted the Financial Accounting Standards Board's (FASB) Statement No. 157 (FAS 157), “Fair Value Measurements” for financial assets and liabilities that are measured at fair value and nonfinancial assets and liabilities that are measured at fair value on a recurring basis.  FAS 157 defines fair value, establishes a framework for measuring fair value when an entity is required to use a fair value measure for recognition or disclosure purposes and expands the disclosures about fair value measurements.  The initial application of FAS 157 is limited to the Corporation's investments in derivative instruments and some debt and equity securities.  The fair value measurements for these instruments are based on quoted prices or observable market inputs.  The value of these instruments is immaterial to the Corporation's financial statements and the related gains or losses from periodic measurement at fair value are de minimis.

On January 1, 2009, the Corporation will adopt FAS 157 for nonfinancial assets and liabilities that are not measured at fair value on a recurring basis. The application of FAS 157 to the Corporation's nonfinancial assets and liabilities will mostly be limited to the recognition and measurement of nonmonetary exchange transactions, asset retirement obligations and asset impairments.  The Corporation does not expect the adoption to have a material impact on the Corporation’s financial statements.

3.

Litigation and Other Contingencies

Litigation

A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are sig nificant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a materially adverse effect upon the Corporation’s operations or financial condition.

-6-

A number of lawsuits, including class actions, were brought in various courts against Exxon Mobil Corporation and certain of its subsidiaries relating to the accidental release of crude oil from the tanker Exxon Valdez in 1989. All the compensatory claims have been resolved and paid. All of the punitive damage claims were consolidated in the civil trial that began in 1994. On June 25, 2008, the U.S. Supreme Court vacated the $2.5 billion punitive damage award previously entered by the Ninth Circuit Court of Appeals and remanded the case to the Circuit Court with an instruction that punitive damages in the case may not exceed a maximum amount of $507.5 million. Exxon Mobil Corporation recorded an after tax charge of $290 million in the second quarter of 2008 reflecting the maximum amount of the punitive damages. The parties have filed briefs in the Ninth Circuit Court of Appeals on the issue of post judgment interest and recovery of costs. Exxon Mobi l Corporation recorded an after tax charge of $170 million in the third quarter of 2008 reflecting its estimate of the resolution of those issues.

Other Contingencies

	As of September 30, 2008
		Equity				Other
		Company				Third Party
		Obligations				Obligations				Total
	(millions of dollars)
Total guarantees			$	5,196	$		827	$	6,023

The Corporation and certain of its consolidated subsidiaries were contingently liable at September 30, 2008, for $6,023 million, primarily relating to guarantees for notes, loans and performance under contracts. Included in this amount were guarantees by consolidated affiliates of $5,196 million, representing ExxonMobil’s share of obligations of certain equity companies. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. The Corporation's outstanding unconditional purchase obligations at September 30, 2008, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.

The operations and earnings of the Corporation and its affiliates throughout the world have been, and may in the future be, affected from time to time in varying degree by political developments and laws and regulations, such as forced divestiture of assets; restrictions on production, imports and exports; price controls; tax increases and retroactive tax claims; expropriation of property; cancellation of contract rights and environmental regulations. Both the likelihood of such occurrences and their overall effect upon the Corporation vary greatly from country to country and are not predictable.

In accordance with a nationalization decree issued by Venezuela’s president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would “directly assume the activities” carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by PdVSA, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 pe rcent interest in the Cerro Negro Project.

To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.

-7-

4.

Comprehensive Income

	Three Months Ended								Nine Months Ended
	September 30,								September 30,
		2008			2007					2008			2007
	(millions of dollars)
Net income	$	14,830		$		9,410		$		37,400		$		28,950
Other comprehensive income
(net of income taxes)
Foreign exchange translation adjustment		(4,282	)			2,052				(2,719	)			3,700
Adjustment for foreign exchange translation
loss included in net income		0				0				154				0
Postretirement benefits reserves adjustment
(excluding amortization)		198				(119	)			(36	)			(694	)
Amortization of postretirement benefits reserves
adjustment included in net periodic benefit costs		176				190				551				605
Total comprehensive income	$	10,922		$		11,533		$		35,350		$		32,561

5.

Earnings Per Share

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
		2008		2007		2008		2007
NET INCOME PER COMMON SHARE
Net income (millions of dollars)	$	14,830	$	9,410	$	37,400	$	28,950
Weighted average number of common shares
outstanding (millions of shares)		5,102		5,470		5,202		5,559
Net income per common share (dollars)	$	2.89	$	1.72	$	7.19	$	5.21
NET INCOME PER COMMON SHARE
- ASSUMING DILUTION
Net income (millions of dollars)	$	14,830	$	9,410	$	37,400	$	28,950
Weighted average number of common shares
outstanding (millions of shares)		5,102		5,470		5,202		5,559
Effect of employee stock-based awards		58		66		58		61
Weighted average number of common shares
outstanding - assuming dilution		5,160		5,536		5,260		5,620
Net income per common share
- assuming dilution (dollars)	$	2.86	$	1.70	$	7.11	$	5.15

-8-

6.

Pension and Other Postretirement Benefits

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2008			2007			2008			2007
	(millions of dollars)
Pension Benefits - U.S.
Components of net benefit cost
Service cost	$	96		$	89		$	287		$	279
Interest cost		181			172			545			516
Expected return on plan assets		(228	)		(212	)		(686	)		(634	)
Amortization of actuarial loss/(gain)
and prior service cost		60			67			178			201
Net pension enhancement and
curtailment/settlement cost		44			48			131			143
Net benefit cost	$	153		$	164		$	455		$	505
Pension Benefits - Non-U.S.
Components of net benefit cost
Service cost	$	107		$	109		$	334		$	330
Interest cost		294			261			900			745
Expected return on plan assets		(308	)		(283	)		(943	)		(816	)
Amortization of actuarial loss/(gain)
and prior service cost		103			108			313			331
Net pension enhancement and
curtailment/settlement cost		0			(13	)		2			(4	)
Net benefit cost	$	196		$	182		$	606		$	586
Other Postretirement Benefits
Components of net benefit cost
Service cost	$	23		$	26		$	80		$	83
Interest cost		92			99			329			309
Expected return on plan assets		(13	)		(11	)		(47	)		(34	)
Amortization of actuarial loss/(gain)
and prior service cost		61			86			217			244
Net benefit cost	$	163		$	200		$	579		$	602

The company expects to make contributions of up to $1,050 million to non-U.S. pension funds, an increase of $521 million from the year-end 2007 estimate of $529 million.

-9-

7.

Disclosures about Segments and Related Information

	Three Months Ended						Nine Months Ended
	September 30,						September 30,
		2008			2007			2008			2007
	(millions of dollars)
EARNINGS AFTER INCOME TAX
Upstream
United States	$	1,879		$	1,196		$	5,544		$	3,595
Non-U.S.		9,092			5,103			24,224			14,698
Downstream
United States		978			914			1,669			3,498
Non-U.S.		2,035			1,087			4,068			3,808
Chemical
United States		257			296			643			846
Non-U.S.		830			906			2,159			2,605
All other		(241	)		(92	)		(907	)		(100	)
Corporate total	$	14,830		$	9,410		$	37,400		$	28,950
SALES AND OTHER OPERATING REVENUE(1)
Upstream
United States	$	1,784		$	1,311		$	5,558		$	4,109
Non-U.S.		8,230			5,136			25,618			15,932
Downstream
United States		33,038			26,243			97,562			73,148
Non-U.S.		78,168			57,233			218,352			158,346
Chemical
United States		4,011			3,453			11,833			10,102
Non-U.S.		6,851			5,743			20,150			16,707
All other		3			11			11			19
Corporate total	$	132,085		$	99,130		$	379,084		$	278,363
(1) Includes sales-based taxes
INTERSEGMENT REVENUE
Upstream
United States	$	2,604		$	1,868		$	8,237		$	5,211
Non-U.S.		17,160			12,181			49,301			34,446
Downstream
United States		4,866			3,819			13,968			10,162
Non-U.S.		19,132			13,225			57,081			37,051
Chemical
United States		2,902			2,462			8,507			6,376
Non-U.S.		2,959			2,030			8,061			5,718
All other		68			70			206			239

8.

Unrecognized Tax Benefits

Unrecognized tax benefits for prior years' tax positions were reduced by $0.9 billion in the third quarter of 2008 primarily due to tax settlements.  This reduction in tax benefits did not have a material effect on the Corporation's earnings or effective income tax rate.  The Corporation does not anticipate that the total amount of unrecognized tax benefits will significantly increase or decrease in the next 12 months.

-10-

9.

Condensed Consolidating Financial Information Related to Guaranteed Securities Issued by Subsidiaries

Exxon Mobil Corporation has fully and unconditionally guaranteed the deferred interest debentures due 2012 ($1,875 million long-term at September 30, 2008) and the debt securities due 2008-2011 ($39 million long-term and $13 million short-term) of SeaRiver Maritime Financial Holdings, Inc., a 100 percent owned subsidiary of Exxon Mobil Corporation.

The following condensed consolidating financial information is provided for Exxon Mobil Corporation, as guarantor, and for SeaRiver Maritime Financial Holdings, Inc., as issuer, as an alternative to providing separate financial statements for the issuer.  The accounts of Exxon Mobil Corporation and SeaRiver Maritime Financial Holdings, Inc. are presented utilizing the equity method of accounting for investments in subsidiaries.

				SeaRiver
	Exxon Mobil			Maritime							Consolidating
	Corporation			Financial							and
	Parent			Holdings				All Other			Eliminating
	Guarantor			Inc.				Subsidiaries			Adjustments				Consolidated
	(millions of dollars)
Condensed consolidated statement of income for three months ended September 30, 2008
Revenues and other income
Sales and other operating revenue, including sales-based taxes	$	4,859	$		-		$		127,226	$		-		$		132,085
Income from equity affiliates		14,267			5				2,819			(14,267	)			2,824
Other income		81			-				2,747			-				2,828
Intercompany revenue		13,636			11				128,749			(142,396	)			-
Total revenues and other income		32,843			16				261,541			(156,663	)			137,737
Costs and other deductions
Crude oil and product purchases		13,164			-				196,879			(136,745	)			73,298
Production and manufacturing expenses		2,067			-				9,286			(1,475	)			9,878
Selling, general and administrative expenses		734			-				3,315			(226	)			3,823
Depreciation and depletion		360			-				2,648			-				3,008
Exploration expenses, including dry holes		70			-				333			-				403
Interest expense		901			52				3,411			(4,046	)			318
Sales-based taxes		-			-				9,327			-				9,327
Other taxes and duties		18			-				10,971			-				10,989
Income applicable to minority interests		-			-				536			-				536
Total costs and other deductions		17,314			52				236,706			(142,492	)			111,580
Income before income taxes		15,529			(36	)			24,835			(14,171	)			26,157
Income taxes		699			(14	)			10,642			-				11,327
Net income	$	14,830	$		(22	)	$		14,193	$		(14,171	)	$		14,830

-11-

				SeaRiver
	Exxon Mobil			Maritime							Consolidating
	Corporation			Financial							and
	Parent			Holdings				All Other			Eliminating
	Guarantor			Inc.				Subsidiaries			Adjustments				Consolidated
	(millions of dollars)
Condensed consolidated statement of income for three months ended September 30, 2007
Revenues and other income
Sales and other operating revenue,
including sales-based taxes	$	4,064	$		-		$		95,066	$		-		$		99,130
Income from equity affiliates		9,588			(2	)			2,148			(9,576	)			2,158
Other income		75			-				974			-				1,049
Intercompany revenue		10,424			27				92,089			(102,540	)			-
Total revenues and other income		24,151			25				190,277			(112,116	)			102,337
Costs and other deductions
Crude oil and product purchases		10,088			-				138,100			(96,215	)			51,973
Production and manufacturing
expenses		1,758			-				7,476			(1,350	)			7,884
Selling, general and administrative
expenses		629			-				3,201			(174	)			3,656
Depreciation and depletion		455			-				2,704			-				3,159
Exploration expenses, including dry
holes		73			-				276			-				349
Interest expense		1,550			50				3,492			(5,019	)			73
Sales-based taxes		-			-				7,970			-				7,970
Other taxes and duties		11			-				10,218			-				10,229
Income applicable to minority interests		-			-				284			-				284
Total costs and other deductions		14,564			50				173,721			(102,758	)			85,577
Income before income taxes		9,587			(25	)			16,556			(9,358	)			16,760
Income taxes		177			(9	)			7,182			-				7,350
Net income	$	9,410	$		(16	)	$		9,374	$		(9,358	)	$		9,410

Condensed consolidated statement of income for nine months ended September 30, 2008
Revenues and other income
Sales and other operating revenue, including sales-based taxes	$	14,588	$	-		$	364,496	$	-		$	379,084
Income from equity affiliates		37,100		3			8,594		(37,081	)		8,616
Other income		206		-			4,757		-			4,963
Intercompany revenue		40,288		39			373,783		(414,110	)		-
Total revenues and other income		92,182		42			751,630		(451,191	)		392,663
Costs and other deductions
Crude oil and product purchases		40,533		-			567,555		(397,124	)		210,964
Production and manufacturing expenses		6,271		-			26,825		(4,259	)		28,837
Selling, general and administrative expenses		2,630		-			10,029		(645	)		12,014
Depreciation and depletion		1,132		-			8,070		-			9,202
Exploration expenses, including dry holes		216		-			867		-			1,083
Interest expense		2,834		157			9,940		(12,376	)		555
Sales-based taxes		-		-			27,297		-			27,297
Other taxes and duties		49		-			33,064		-			33,113
Income applicable to minority interests		-		-			1,043		-			1,043
Total costs and other deductions		53,665		157			684,690		(414,404	)		324,108
Income before income taxes		38,517		(115	)		66,940		(36,787	)		68,555
Income taxes		1,117		(41	)		30,079		-			31,155
Net income	$	37,400	$	(74	)	$	36,861	$	(36,787	)	$	37,400

-12-

				SeaRiver
	Exxon Mobil			Maritime							Consolidating
	Corporation			Financial							and
	Parent			Holdings				All Other			Eliminating
	Guarantor			Inc.				Subsidiaries			Adjustments				Consolidated
	(millions of dollars)
Condensed consolidated statement of income for nine months ended September 30, 2007
Revenues and other income
Sales and other operating revenue,
including sales-based taxes	$	12,063	$		-		$		266,300	$		-		$		278,363
Income from equity affiliates		28,906			4				6,051			(28,873	)			6,088
Other income		357			-				3,102			-				3,459
Intercompany revenue		28,172			78				255,917			(284,167	)			-
Total revenues and other income		69,498			82				531,370			(313,040	)			287,910
Costs and other deductions
Crude oil and product purchases		26,587			-				378,106			(265,051	)			139,642
Production and manufacturing
expenses		5,305			-				21,423			(3,883	)			22,845
Selling, general and administrative
expenses		1,901			-				9,498			(563	)			10,836
Depreciation and depletion		1,240			-				7,855			-				9,095
Exploration expenses, including dry
holes		215			-				759			-				974
Interest expense		4,566			151				10,824			(15,269	)			272
Sales-based taxes		-			-		��		23,064			-				23,064
Other taxes and duties		35			-				29,673			-				29,708
Income applicable to minority interests		-			-				722			-				722
Total costs and other deductions		39,849			151				481,924			(284,766	)			237,158
Income before income taxes		29,649			(69	)			49,446			(28,274	)			50,752
Income taxes		699			(26	)			21,129			-				21,802
Net income	$	28,950	$		(43	)	$		28,317	$		(28,274	)	$		28,950

-13-

				SeaRiver
	Exxon Mobil			Maritime					Consolidating
	Corporation			Financial					and
	Parent			Holdings			All Other		Eliminating
	Guarantor			Inc.			Subsidiaries		Adjustments			Consolidated
	(millions of dollars)
Condensed consolidated balance sheet as of September 30, 2008
Cash and cash equivalents	$	2,411		$	-		$	34,263	$	-		$	36,674
Marketable securities		-			-			1,760		-			1,760
Notes and accounts receivable - net		4,945			24			33,370		(3,088	)		35,251
Inventories		1,562			-			14,378		-			15,940
Prepaid taxes and expenses		496			-			5,900		-			6,396
Total current assets		9,414			24			89,671		(3,088	)		96,021
Property, plant and equipment - net		16,635			-			106,623		-			123,258
Investments and other assets		220,383			476			430,432		(614,352	)		36,939
Intercompany receivables		13,558			2,032			477,607		(493,197	)		-
Total assets	$	259,990		$	2,532		$	1,104,333	$	(1,110,637	)	$	256,218
Notes and loan payables	$	32		$	13		$	2,836	$	-		$	2,881
Accounts payable and accrued liabilities		3,775			-			45,312		-			49,087
Income taxes payable		-			-			18,751		(3,088	)		15,663
Total current liabilities		3,807			13			66,899		(3,088	)		67,631
Long-term debt		283			1,914			5,186		-			7,383
Deferred income tax liabilities		1,669			193			21,403		-			23,265
Other long-term liabilities		11,598			-			21,055		-			32,653
Intercompany payables		117,347			383			375,467		(493,197	)		-
Total liabilities		134,704			2,503			490,010		(496,285	)		130,932
Earnings reinvested		259,878			(541	)		128,111		(127,570	)		259,878
Other shareholders' equity		(134,592	)		570			486,212		(486,782	)		(134,592	)
Total shareholders' equity		125,286			29			614,323		(614,352	)		125,286
Total liabilities and         shareholders' equity	$	259,990		$	2,532		$	1,104,333	$	(1,110,637	)	$	256,218

Condensed consolidated balance sheet as of December 31, 2007
Cash and cash equivalents	$	1,393		$	-		$	32,588	$	-		$	33,981
Marketable securities		-			-			519		-			519
Notes and accounts receivable - net		3,733			2			34,338		(1,623	)		36,450
Inventories		1,198			-			9,891		-			11,089
Prepaid taxes and expenses		373			-			3,551		-			3,924
Total current assets		6,697			2			80,887		(1,623	)		85,963
Property, plant and equipment - net		16,291			-			104,578		-			120,869
Investments and other assets		208,283			413			427,046		(600,492	)		35,250
Intercompany receivables		14,577			1,961			437,433		(453,971	)		-
Total assets	$	245,848		$	2,376		$	1,049,944	$	(1,056,086	)	$	242,082
Notes and loan payables	$	3		$	13		$	2,367	$	-		$	2,383
Accounts payable and accrued liabilities		3,038			1			42,236		-			45,275
Income taxes payable		-			-			12,277		(1,623	)		10,654
Total current liabilities		3,041			14			56,880		(1,623	)		58,312
Long-term debt		276			1,766			5,141		-			7,183
Deferred income tax liabilities		1,829			212			20,858		-			22,899
Other long-term liabilities		11,308			-			20,618		-			31,926
Intercompany payables		107,632			382			345,957		(453,971	)		-
Total liabilities		124,086			2,374			449,454		(455,594	)		120,320
Earnings reinvested		228,518			(467	)		114,037		(113,570	)		228,518
Other shareholders' equity		(106,756	)		469			486,453		(486,922	)		(106,756	)
Total shareholders' equity		121,762			2			600,490		(600,492	)		121,762
Total liabilities and         shareholders' equity	$	245,848		$	2,376		$	1,049,944	$	(1,056,086	)	$	242,082

-14-

					SeaRiver
	Exxon Mobil				Maritime						Consolidating
	Corporation				Financial						and
	Parent				Holdings			All Other			Eliminating
	Guarantor				Inc.			Subsidiaries			Adjustments			Consolidated
	(millions of dollars)
Condensed consolidated statement of cash flows for nine months ended September 30, 2008
Cash provided by/(used in) operating
activities		$	25,019		$	29		$	46,979		$	(22,786	)	$	49,241
Cash flows from investing activities
Additions to property, plant and
equipment			(1,489	)		-			(12,504	)		-			(13,993	)
Sales of long-term assets			138			-			4,064			-			4,202
Net intercompany investing			9,600			(130	)		(9,647	)		177			-
All other investing, net			-			-			(3,081	)		-			(3,081	)
Net cash provided by/(used in)
investing activities			8,249			(130	)		(21,168	)		177			(12,872	)
Cash flows from financing activities
Additions to long-term debt			-			-			177			-			177
Reductions in long-term debt			-			-			(152	)		-			(152	)
Additions/(reductions) in short-term
debt - net			29			-			265			-			294
Cash dividends			(6,040	)		-			(22,786	)		22,786			(6,040	)
Net ExxonMobil shares sold/(acquired)			(26,400	)		-			-			-			(26,400	)
Net intercompany financing activity			-			1			76			(77	)		-
All other financing, net			161			100			(664	)		(100	)		(503	)
Net cash provided by/(used in)
financing activities			(32,250	)		101			(23,084	)		22,609			(32,624	)
Effects of exchange rate changes
on cash			-			-			(1,052	)		-			(1,052	)
Increase/(decrease) in cash and cash
equivalents		$	1,018		$	-		$	1,675		$	-		$	2,693

Condensed consolidated statement of cash flows for nine months ended September 30, 2007
Cash provided by/(used in) operating
activities	$	21,063		$	60		$	40,176		$	(20,632	)	$	40,667
Cash flows from investing activities
Additions to property, plant and
equipment		(912	)		-			(9,915	)		-			(10,827	)
Sales of long-term assets		187			-			2,235			-			2,422
Net intercompany investing		4,554			(56	)		(4,565	)		67			-
All other investing, net		-			-			(1,660	)		-			(1,660	)
Net cash provided by/(used in)
investing activities		3,829			(56	)		(13,905	)		67			(10,065	)
Cash flows from financing activities
Additions to long-term debt		-			-			104			-			104
Reductions in long-term debt		-			-			(111	)		-			(111	)
Additions/(reductions) in short-term
debt - net		163			-			23			-			186
Cash dividends		(5,718	)		-			(20,632	)		20,632			(5,718	)
Net ExxonMobil shares sold/(acquired)		(22,993	)		-			-			-			(22,993	)
Net intercompany financing activity		-			(4	)		71			(67	)		-
All other financing, net		356			-			(762	)		-			(406	)
Net cash provided by/(used in)
financing activities		(28,192	)		(4	)		(21,307	)		20,565			(28,938	)
Effects of exchange rate changes
on cash		-			-			1,515			-			1,515
Increase/(decrease) in cash and cash
equivalents	$	(3,300	)	$	-		$	6,479		$	-		$	3,179

-15-

EXXON MOBIL CORPORATION

Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations

FUNCTIONAL EARNINGS SUMMARY

	Third Quarter						First Nine Months
Net Income (U.S. GAAP)		2008			2007			2008			2007
	(millions of dollars)
Upstream
United States	$	1,879		$	1,196		$	5,544		$	3,595
Non-U.S.		9,092			5,103			24,224			14,698
Downstream
United States		978			914			1,669			3,498
Non-U.S.		2,035			1,087			4,068			3,808
Chemical
United States		257			296			643			846
Non-U.S.		830			906			2,159			2,605
Corporate and financing		(241	)		(92	)		(907	)		(100	)
Net Income (U.S. GAAP)	$	14,830		$	9,410		$	37,400		$	28,950
Net income per common share (dollars)	$	2.89		$	1.72		$	7.19		$	5.21
Net income per common share
- assuming dilution (dollars)	$	2.86		$	1.70		$	7.11		$	5.15
Special items included in net income
Non-U.S. Upstream
Sale of German gas transportation business	$	1,620		$	0		$	1,620		$	0
Corporate and financing
Valdez litigation	$	(170	)	$	0		$	(460	)	$	0

REVIEW OF THIRD QUARTER AND FIRST NINE MONTHS 2008 RESULTS

ExxonMobil reported strong results in the third quarter of 2008, demonstrating the continued success of our disciplined business approach.  Record net income for the third quarter of $14,830 million was up 58 percent from the third quarter of 2007.  Net income included a gain of $1,620 million from the sale of the natural gas transportation business in Germany and a charge of $170 million reflecting a provision for interest related to the Valdez punitive damages award.  Earnings per share of $2.86 were up 68 percent reflecting the benefit of the share purchase program.  

Third quarter results include impacts of Hurricanes Gustav and Ike which affected U.S. Gulf Coast operations during the period.  We responded quickly and effectively to maximize supplies of gasoline and other products to the marketplace.  The majority of our operations are back on-line or are completing the final stages of start-up.  At our Beaumont Chemical facilities, we continue to progress repairs and start-up planning after experiencing significant flooding during Hurricane Ike.  Quarterly upstream volumes were down 24 thousand oil-equivalent barrels per day and costs were higher by $50 million before tax due to the hurricanes.  Damage repairs and lower volumes across all business lines associated with the hurricanes are expected to reduce fourth quarter earnings by about $500 million.

__________________________________________________________

Net income for the first nine months 2008 of $37,400 million was a record and increased $8,450 million or 29 percent from 2007.  Earnings per share of $7.11 increased 38 percent, reflecting strong business results and the continued reduction in the number of shares outstanding.  Net income in 2008 included a gain of $1,620 million from the sale of the natural gas transportation business in Germany and charges totaling $460 million related to the Valdez punitive damages award.

-16-

	Third Quarter				First Nine Months
	2008		2007		2008		2007
	(millions of dollars)
Upstream earnings
United States	$	1,879	$	1,196	$	5,544		$	3,595
Non-U.S.		9,092		5,103		24,224			14,698
Total	$	10,971	$	6,299	$	29,768		$	18,293
Special items included in net income
Non-U.S. Upstream
Sale of German gas transportation business	$	1,620	$	0	$	1,620		$	0

Upstream earnings were $10,971 million in the third quarter of 2008, up $4,672 million from 2007.  Higher crude oil and natural gas realizations increased earnings approximately $4.4 billion and the gain from the sale of the German natural gas transportation business added $1.6 billion.  Lower sales volumes decreased earnings about $1.3 billion.  

On an oil-equivalent basis, production decreased 8 percent from the third quarter of 2007.  Excluding lower entitlement volumes (which include price and spend impacts and PSC net interest reductions) and impacts associated with the hurricanes, production was down about 5 percent.  Higher maintenance activity and downtime reduced volumes by just under 3 percent.

Liquids production totaled 2,291 kbd (thousands of barrels per day), down 246 kbd from the third quarter of 2007.  Excluding lower entitlement volumes and the impacts of the hurricanes, liquids production was down 5 percent, as increased production from projects in west Africa and the North Sea was more than offset by mature field decline and higher maintenance activity.  

Third quarter natural gas production was 7,823 mcfd (millions of cubic feet per day), down 460 mcfd from 2007.   Higher European demand and new production volumes from project additions in the North Sea and Malaysia were more than offset by mature field decline, increased maintenance activity and entitlement effects.

Earnings from U.S. Upstream operations were $1,879 million, $683 million higher than the third quarter of 2007.  Non-U.S. Upstream earnings, including the gain from the sale of the German natural gas transportation business, were $9,092 million, up $3,989 million from last year.

__________________________________________________________

Upstream earnings in the first nine months of 2008 were a record at $29,768 million, up $11,475 million from 2007.  Record high crude oil and natural gas realizations increased earnings approximately $14.8 billion and the gain related to the sale of the German natural gas transportation business added $1.6 billion.  Lower sales volumes reduced earnings about $3.7 billion.  Higher taxes and increased operating costs decreased earnings approximately $1.5 billion.  Favorable foreign exchange effects provided a partial offset.

On an oil-equivalent basis, production decreased 7 percent from last year.  Excluding impacts related to the Venezuela expropriation and lower entitlement volumes, production was down about 4 percent.

Liquids production of 2,383 kbd decreased 267 kbd from 2007.  Excluding the Venezuela expropriation and lower entitlement volumes, liquids production was down about 5 percent, as field decline in mature areas more than offset project volume increases.

Natural gas production of 8,843 mcfd decreased 194 mcfd from 2007.  Higher volumes from North Sea, Malaysia and Qatar projects and higher European demand were more than offset by mature field decline and planned maintenance activity.    

Earnings from U.S. Upstream operations for 2008 were $5,544 million, an increase of $1,949 million.  Earnings outside the U.S., including the gain related to the sale of the German natural gas transportation business, were $24,224 million, $9,526 million higher than 2007.

-17-

	Third Quarter				First Nine Months
	2008		2007		2008		2007
	(millions of dollars)
Downstream earnings
United States	$	978	$	914	$	1,669		$	3,498
Non-U.S.		2,035		1,087		4,068			3,808
Total	$	3,013	$	2,001	$	5,737		$	7,306

Downstream earnings of $3,013 million in the third quarter of 2008 were up $1,012 million from the third quarter of 2007. Higher margins increased earnings by $1.1 billion while favorable mix effects increased earnings by $200 million.  Unfavorable foreign exchange effects provided a partial offset.  Petroleum product sales of 6,688 kbd were 413 kbd lower than last year's third quarter, mainly reflecting asset sales and lower demand.

U.S. Downstream earnings were $978 million, up $64 million from the third quarter of 2007.  Non-U.S. Downstream earnings of $2,035 million were $948 million higher than last year.

__________________________________________________________

Downstream earnings in the first nine months of 2008 of $5,737 million were $1,569 million lower than 2007.  Lower worldwide refining margins decreased earnings approximately $1.9 billion while higher operating costs reduced earnings about $400 million.  Improved refinery operations increased earnings about $800 million.  Petroleum product sales of 6,761 kbd decreased from 7,090 kbd in 2007, mainly reflecting asset sales and lower demand.

U.S. Downstream earnings were $1,669 million, down $1,829 million.  Non-U.S. Downstream earnings were $4,068 million, $260 million higher than last year.

	Third Quarter					First Nine Months
	2008		2007			2008		2007
	(millions of dollars)
Chemical earnings
United States	$	257	$	296	$		643		$	846
Non-U.S.		830		906			2,159			2,605
Total	$	1,087	$	1,202	$		2,802		$	3,451

Chemical earnings of $1,087 million in the third quarter of 2008 were $115 million lower than the third quarter of 2007.  Lower volumes, which reduced earnings approximately $200 million, and lower margins were partly offset by favorable foreign exchange effects.  Third quarter prime product sales of 6,060 kt (thousands of metric tons) were 669 kt lower than the prior year due to hurricane effects and lower demand.

__________________________________________________________

Chemical earnings in the first nine months of 2008 of $2,802 million decreased $649 million from 2007.  Lower margins decreased earnings approximately $900 million, while lower volumes decreased earnings by about $200 million.  Favorable foreign exchange and tax effects provided a partial offset.  Prime product sales of 19,356 kt were down 1,075 kt from 2007.

-18-

	Third Quarter						First Nine Months
	2008			2007			2008			2007
	(millions of dollars)
Corporate and financing earnings	$	(241	)	$	(92	)	$	(907	)		$	(100	)
Special items included in net income
Corporate and financing
Valdez litigation	$	(170	)	$	0		$	(460	)		$	0

Corporate and financing expenses increased to $241 million in the third quarter of 2008, reflecting the $170 million charge for interest related to the Valdez litigation.

__________________________________________________________

Corporate and financing expenses in the first nine months of 2008 of $907 million, increased by $807 million due to lower interest rates on cash balances and higher corporate costs, and included $460 million of charges related to the Valdez litigation.

LIQUIDITY AND CAPITAL RESOURCES

	Third Quarter				First Nine Months
		2008		2007		2008			2007
	(millions of dollars)
Net cash provided by/(used in)
Operating activities					$	49,241		$	40,667
Investing activities						(12,872	)		(10,065	)
Financing activities						(32,624	)		(28,938	)
Effect of exchange rate changes						(1,052	)		1,515
Increase/(decrease) in cash and cash equivalents					$	2,693		$	3,179
Cash and cash equivalents					$	36,674		$	31,423
Cash and cash equivalents - restricted						0			4,604
Total cash and cash equivalents (at end of period)					$	36,674		$	36,027
Cash flow from operations and asset sales
Net cash provided by operating activities (U.S. GAAP)	$	14,403	$	15,063	$	49,241		$	40,667
Sales of subsidiaries, investments and property,
plant and equipment		2,630		749		4,202			2,422
Cash flow from operations and asset sales	$	17,033	$	15,812	$	53,443		$	43,089

Because of the ongoing nature of our asset management and divestment program, we believe

it is useful for investors to consider asset sales proceeds together with cash provided by operating

activities when evaluating cash available for investment in the business and financing activities.

Total cash and cash equivalents of $36.7 billion at the end of the third quarter of 2008 compared to $36.0 billion, including the $4.6 billion of restricted cash, at the end of the third quarter of 2007.

Cash provided by operating activities totaled $49,241 million for the first nine months of 2008, $8,574 million higher than 2007.  The major source of funds was net income of $37,400 million, adjusted for the noncash provision of $9,202 million for depreciation and depletion, both of which increased.  The effects of higher prices and the timing of payments of accounts and other payables, of collection of accounts receivable and the timing of income taxes payable added to cash provided by operating activities.  For additional details, see the Condensed Consolidated Statement of Cash Flows on page 5.

Investing activities for the first nine months of 2008 used net cash of $12,872 million compared to $10,065 million in the prior year.  Spending for additions to property, plant and equipment increased $3,166 million to $13,993 million.  Proceeds from asset divestments of $4,202 million in 2008, increased from $2,422 million in the prior year, with the increase mainly attributable to the sale of the German natural gas transportation business in the third quarter.

-19-

Cash flow from operations and asset sales in the third quarter of 2008 of $17.0 billion, including asset sales of $2.6 billion, was $1.2 billion higher than in the third quarter of 2007.  Cash flow from operations and asset sales for the first nine months of 2008 of $53.4 billion, including $4.2 billion from asset sales, was $10.3 billion higher than in the comparable 2007 period.

Net cash used in financing activities of $32,624 million in the first nine months of 2008 increased $3,686 million, reflecting a higher level of purchases of shares of ExxonMobil stock.

During the third quarter of 2008, Exxon Mobil Corporation purchased 109 million shares of its common stock for the treasury at a gross cost of $8.7 billion.  These purchases included $8.0 billion to reduce the number of shares outstanding, with the balance used to offset shares issued in conjunction with the company's benefit plans and programs.  Shares outstanding were reduced 2.1 percent from 5,194 million at the end of the second quarter to 5,087 million at the end of the third quarter.

Gross share purchases in the first nine months of 2008 were $26.9 billion, reducing shares outstanding by 5.5 percent.  Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.

The Corporation returned significant cash to shareholders, distributing a total of $10.1 billion in the third quarter of 2008 through dividends of $2.1 billion and share purchases of $8.0 billion to reduce shares outstanding.  The Corporation distributed a total of $30.0 billion to shareholders in the first nine months of 2008 through dividends and share purchases to reduce shares outstanding, an increase of $3.3 billion versus 2007.  Dividends in the first nine months of 2008 of $1.15 per share increased 13 percent.

Total debt of $10.3 billion at September 30, 2008, increased from $9.6 billion at year-end 2007.  The Corporation's debt to total capital ratio was 7.3 percent at the end of the third quarter of 2008 compared to 7.1 percent at year-end 2007.

Although the Corporation issues long-term debt from time to time and maintains a revolving commercial paper program, internally generated funds cover the majority of its financial requirements.

In accordance with a nationalization decree issued by Venezuela’s president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would “directly assume the activities” carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by PdVSA, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project .

To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.

The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade.  Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses.

On July 1, 2008, affiliates of Exxon Mobil Corporation completed the sale of their interests in the natural gas transportation business in northern Germany.  This transaction does not affect the exploration, production and natural gas sale and storage activities conducted by ExxonMobil affiliates in Germany.  The positive after-tax earnings of this transaction of $1,620 million was reported in third quarter 2008 results.

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TAXES

	Third Quarter						First Nine Months
	2008			2007			2008			2007
	(millions of dollars)
Income taxes	$	11,327		$	7,350		$	31,155			$	21,802
Sales-based taxes		9,327			7,970			27,297				23,064
All other taxes and duties		11,856			10,953			35,760				32,026
Total	$	32,510		$	26,273		$	94,212			$	76,892
Effective income tax rate		45	%		46	%		48	%			45	%

Income, sales-based and all other taxes and duties for the third quarter of 2008 of $32,510 million were higher than 2007.  In the third quarter of 2008 income tax expense increased to $11,327 million reflecting the higher level of earnings and the effective income tax rate was 45 percent, compared to $7,350 million and 46 percent, respectively, in the prior year period.  Sales-based taxes and all other taxes and duties increased in 2008 reflecting higher prices and foreign exchange.

Income, sales-based and all other taxes and duties for the first nine months of 2008 of $94,212 million were higher than 2007.  In the first nine months of 2008, income tax expense increased to $31,155 million reflecting the higher level of earnings and the effective income tax rate was 48 percent, compared to $21,802 million and 45 percent, respectively, in the prior year period.  The change in the effective income tax rate reflects an increased share of total income from the non-U.S. Upstream segment.  Sales-based taxes and all other taxes and duties increased in 2008 reflecting higher prices and foreign exchange.

CAPITAL AND EXPLORATION EXPENDITURES

	Third Quarter				First Nine Months
	2008		2007		2008		2007
	(millions of dollars)
Upstream (including exploration expenses)	$	5,277	$	3,851	$	14,629		$	11,186
Downstream		844		984		2,575			2,389
Chemical		721		601		2,084			1,096
Other		11		5		26			31
Total	$	6,853	$	5,441	$	19,314		$	14,702

Despite the continuing uncertainty in world financial markets, ExxonMobil has maintained a strong financial position.  In the third quarter of 2008, capital and exploration project spending increased to $6.9 billion, up 26 percent from 2007.  

__________________________________________________________

For the first nine months of 2008, spending on capital and exploration projects was $19.3 billion, an increase of 31 percent versus 2007.  Through these investments we continue to make a substantial contribution to employment and economic activity in the countries in which we operate.

We plan to continue our disciplined capital investments with our full year capital and exploration expenditures projected to be about $25 billion, consistent with previous guidance.

RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS

In December 2007, the FASB issued Statement No. 160 (FAS 160), “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51.”  FAS 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity.  FAS 160 must be adopted by the Corporation no later than January 1, 2009.  FAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing minority interests.  All other requirements of FAS 160 will be applied prospectively.  The Corporation does not expect the adoption of FAS 160 to have a material impact on the Corporation’s financial statements.

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FORWARD-LOOKING STATEMENTS

Statements in this report relating to future plans, projections, events or conditions are forward-looking statements.  Actual results, including project plans, resource recoveries and production rates, capital expenditures, and the impact of hurricane damage on future earnings, could differ materially due to changes in long-term oil or gas prices or other market conditions affecting the oil and gas industry; completion of repair projects as planned; unforeseen technical difficulties; political events or disturbances; reservoir performance; the outcome of commercial negotiations; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading "Factors Affecting Future Results" on our website and in Item 1A of ExxonMobil's 2007 Form 10-K.  We assume no duty to update these statements as of any future date.  

Item 3.  Quantitative and Qualitative Disclosures About Market Risk

Information about market risks for the nine months ended September 30, 2008, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2007.

Item 4.  Controls and Procedures

As indicated in the certifications in Exhibit 31 of this report, the Corporation’s chief executive officer, principal financial officer and principal accounting officer have evaluated the Corporation’s disclosure controls and procedures as of September 30, 2008.  Based on that evaluation, these officers have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.  There were no changes during the Corporation's last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.

PART II.  OTHER INFORMATION

Item 1.  Legal Proceedings

On August 1, 2008, the Connecticut Department of Environmental Protection (CTDEP) requested a Consent Order as a result of an alleged June 2007 discharge of gasoline at a Mobil-branded service station in South Windsor, Connecticut.  The proposed Consent Order seeks a penalty of $180,000.  ExxonMobil is assessing its response to the CTDEP.

Regarding a previously reported matter, on September 11, 2008, Exxon Mobil Corporation entered into a Consent Decree with the State of Maryland Department of the Environment (MDE) to resolve the lawsuit filed by the MDE on May 15, 2006.  In the litigation, the MDE alleged that a dealer-operated Exxon-branded service station in Jacksonville, Maryland, released petroleum from an underground storage tank.  The Consent Decree requires ExxonMobil to pay a $4 million penalty and complete remediation in exchange for a release of all claims asserted in the lawsuit.  

Regarding a previously reported matter, the Puerto Rico Environmental Quality Board (EQB) issued an order on May 21, 2001, alleging that Esso Standard Oil Company (Puerto Rico) (Esso) failed to investigate and remediate alleged hydrocarbon contamination associated with underground storage tanks at a service station in Barranquitas, Puerto Rico. The EQB sought a penalty of $75.9 million. On November 7, 2006, after granting Esso’s motion for summary judgment, the District Court issued a permanent injunction prohibiting the EQB from conducting any administrative proceedings against Esso related to the penalty. The EQB Defendants appealed and, on April 10, 2008, the U.S. Court of Appeals for the First Circuit issued its decision upholding the permanent injunction.  The time for appeals has now passed and on September 19, 2008, the District Court, on remand, granted Esso’s request for attorney fees and costs and ordered the EQB Defendants to pay Esso approximately $1.7 million in fees and expenses. An appeal of that order is expected.

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Regarding a previously reported matter, on August 21, 2008, a Consent Agreement and Final Order (CAFO) was filed with Region 9 of the Environmental Protection Agency (EPA) to resolve alleged violations under the Toxic Substances Control Act.  The EPA sought enforcement under the Act for alleged leaks of PCB-containing oil from transformers and related alleged violations of PCB disposal requirements at the Santa Ynez Unit Platform Hondo facility, offshore California. Under the terms of the CAFO, on September 2, 2008, Exxon Mobil Corporation paid a civil administrative penalty of $2,642,000.  Prior to the completion of the CAFO, the transformers were replaced with new PCB-free transformers.

Refer to the relevant portions of note 3 on pages 6 and 7 of this Quarterly Report on Form 10-Q for further information on legal proceedings.

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds

Issuer Purchase of Equity Securities for Quarter Ended September 30, 2008
				Total Number of		Maximum Number
				Shares Purchased		Of Shares that May
	Total Number	Average		as Part of Publicly		Yet Be Purchased
	Of Shares	Price Paid		Announced Plans		Under the Plans or
Period	Purchased	per Share		or Programs		Programs
July, 2008	35,200,616		83.48		35,200,616
August, 2008	36,475,282		78.64		36,475,282
September, 2008	37,026,344		77.14		37,026,344
Total	108,702,242		$79.70		108,702,242	(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 the Company's benefit plans and programs and to gradually reduce the number of shares outstanding.  The announcement did not specify an amount or expiration date.  The Corporation has continued to purchase shares since this announcement and to report purchased volumes in its quarterly earnings releases.  Purchases may be made in both the open market and through negotiated transactions, and purchases may be increased, decreased or discontinued at any time without prior notice.

Item 5.  Other Information

The Registrant hereby furnishes the information set forth in its news release, dated November 4, 2008, announcing enhancements to its corporate governance structure and the appointment of Samuel J. Palmisano as Presiding Director.  A copy of the release is included as Exhibit 99.1.

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Item 6.  Exhibits

Exhibit

Description

31.1

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief

  Executive Officer.

31.2

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal

  Financial Officer.

31.3

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal

  Accounting Officer.

32.1

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief

  Executive Officer.

32.2

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by

  Principal Financial Officer.

32.3

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by

  Principal Accounting Officer.

99.1

Exxon Mobil Corporation News Release, dated November 4, 2008, relating to

  its corporate governance structure.

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EXXON MOBIL CORPORATION

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

EXXON MOBIL CORPORATION

Date: November 4, 2008  

By:   /s/  Patrick T. Mulva                        

        Name:  Patrick T. Mulva

        Title:     Vice President, Controller and

                      Principal Accounting Officer

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INDEX TO EXHIBITS

Exhibit

Description

31.1

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by

  Chief Executive Officer.

31.2

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by

  Principal Financial Officer.

31.3

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by

  Principal Accounting Officer.

32.1

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief

  Executive Officer.

32.2

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal

  Financial Officer.

32.3

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal

  Accounting Officer.

99.1

Exxon Mobil Corporation News Release, dated November 4, 2008, relating to

  its corporate governance structure.

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