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 March 31, 2008
or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to________
Commission File Number 1-2256
EXXON MOBIL CORPORATION
(Exact name of registrant as specified in its charter)
NEW JERSEY 13-5409005
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
5959 Las Colinas Boulevard, Irving, Texas 75039-2298
(Address of principal executive offices) (Zip Code)
(972) 444-1000
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes X No
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a 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 March 31, 2008
Common stock, without par value 5,283,694,459
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
Condensed Consolidated Statement of Income
3
Three months ended March 31, 2008 and 2007
Condensed Consolidated Balance Sheet
4
As of March 31, 2008 and December 31, 2007
Condensed Consolidated Statement of Cash Flows
5
Three months ended March 31, 2008 and 2007
Notes to Condensed Consolidated Financial Statements
6-14
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
15-18
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
19
Item 4.
Controls and Procedures
19
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
19
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
20
Item 6.
Exhibits
21
Signature
22
Index to Exhibits
23
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(millions of dollars)
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
REVENUES AND OTHER INCOME | ||||||||||||
Sales and other operating revenue (1) | $ | 113,223 | $ | 84,174 | ||||||||
Income from equity affiliates | 2,809 | 1,915 | ||||||||||
Other income | 822 | 1,134 | ||||||||||
Total revenues and other income | 116,854 | 87,223 | ||||||||||
| ||||||||||||
COSTS AND OTHER DEDUCTIONS | ||||||||||||
Crude oil and product purchases | 60,971 | 40,042 | ||||||||||
Production and manufacturing expenses | 8,893 | 7,283 | ||||||||||
Selling, general and administrative expenses | 3,802 | 3,392 | ||||||||||
Depreciation and depletion | 3,104 | 2,942 | ||||||||||
Exploration expenses, including dry holes | 342 | 272 | ||||||||||
Interest expense | 130 | 103 | ||||||||||
Sales-based taxes (1) | 8,432 | 7,284 | ||||||||||
Other taxes and duties | 10,706 | 9,591 | ||||||||||
Income applicable to minority interests | 282 | 250 | ||||||||||
Total costs and other deductions | 96,662 | 71,159 | ||||||||||
| ||||||||||||
INCOME BEFORE INCOME TAXES | 20,192 | 16,064 | ||||||||||
Income taxes | 9,302 | 6,784 | ||||||||||
NET INCOME | $ | 10,890 | $ | 9,280 | ||||||||
| ||||||||||||
NET INCOME PER COMMON SHARE (dollars) | $ | 2.05 | $ | 1.64 | ||||||||
| ||||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||
- ASSUMING DILUTION (dollars) | $ | 2.03 | $ | 1.62 | ||||||||
DIVIDENDS PER COMMON SHARE (dollars) | $ | 0.35 | $ | 0.32 | ||||||||
(1) Sales-based taxes included in sales and other | ||||||||||||
operating revenue | $ | 8,432 | $ | 7,284 | ||||||||
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)
March 31, | Dec. 31, | |||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 40,913 | $ | 33,981 | ||||
Marketable securities | 480 | 519 | ||||||
Notes and accounts receivable - net | 36,428 | 36,450 | ||||||
Inventories | ||||||||
Crude oil, products and merchandise | 13,075 | 8,863 | ||||||
Materials and supplies | 2,303 | 2,226 | ||||||
Prepaid taxes and expenses | 4,559 | 3,924 | ||||||
Total current assets | 97,758 | 85,963 | ||||||
Property, plant and equipment - net | 122,935 | 120,869 | ||||||
Investments and other assets | 37,509 | 35,250 | ||||||
TOTAL ASSETS | $ | 258,202 | $ | 242,082 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Notes and loans payable | $ | 2,771 | $ | 2,383 | ||||
Accounts payable and accrued liabilities | 53,613 | 45,275 | ||||||
Income taxes payable | 14,599 | 10,654 | ||||||
Total current liabilities | 70,983 | 58,312 | ||||||
Long-term debt | 7,235 | 7,183 | ||||||
Deferred income tax liabilities | 24,008 | 22,899 | ||||||
Other long-term liabilities | 32,837 | 31,926 | ||||||
TOTAL LIABILITIES | 135,063 | 120,320 | ||||||
Commitments and contingencies (note 3) | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Common stock, without par value: | ||||||||
Authorized: 9,000 million shares | ||||||||
Issued: 8,019 million shares | 4,745 | 4,933 | ||||||
Earnings reinvested | 237,529 | 228,518 | ||||||
Accumulated other comprehensive income | ||||||||
Cumulative foreign exchange translation adjustment | 9,449 | 7,972 | ||||||
Postretirement benefits reserves adjustment | (5,945 | ) | (5,983 | ) | ||||
Common stock held in treasury: | ||||||||
2,736 million shares at March 31, 2008 | (122,639 | ) | ||||||
2,637 million shares at December 31, 2007 | (113,678 | ) | ||||||
TOTAL SHAREHOLDERS' EQUITY | 123,139 | 121,762 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 258,202 | $ | 242,082 | ||||
The number of shares of common stock issued and outstanding at March 31, 2008 and | ||||||||
December 31, 2007 were 5,283,694,459 and 5,381,795,265, respectively. | ||||||||
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)
Three Months Ended | |||||||||
March 31, | |||||||||
2008 | 2007 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
Net income | $ | 10,890 | $ | 9,280 | |||||
Depreciation and depletion | 3,104 | 2,942 | |||||||
Changes in operational working capital, excluding cash and debt | 7,803 | 1,843 | |||||||
All other items - net | (377 | ) | 221 | ||||||
Net cash provided by operating activities | 21,420 | 14,286 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
Additions to property, plant and equipment | (3,979 | ) | (3,106 | ) | |||||
Sales of subsidiaries, investments, and property, plant and equipment | 413 | 538 | |||||||
Other investing activities - net | (734 | ) | (670 | ) | |||||
Net cash used in investing activities | (4,300 | ) | (3,238 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
Additions to long-term debt | 35 | 93 | |||||||
Reductions in long-term debt | (46 | ) | (36 | ) | |||||
Additions/(reductions) in short-term debt - net | 190 | 274 | |||||||
Cash dividends to ExxonMobil shareholders | (1,879 | ) | (1,825 | ) | |||||
Cash dividends to minority interests | (105 | ) | (74 | ) | |||||
Changes in minority interests and sales/(purchases) | |||||||||
of affiliate stock | (214 | ) | (149 | ) | |||||
Common stock acquired | (9,465 | ) | (7,960 | ) | |||||
Common stock sold | 131 | 172 | |||||||
Net cash used in financing activities | (11,353 | ) | (9,505 | ) | |||||
Effects of exchange rate changes on cash | 1,165 | 207 | |||||||
Increase/(decrease) in cash and cash equivalents | 6,932 | 1,750 | |||||||
Cash and cash equivalents at beginning of period | 33,981 | 28,244 | |||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 40,913 | $ | 29,994 | |||||
SUPPLEMENTAL DISCLOSURES | |||||||||
Income taxes paid | $ | 4,849 | $ | 3,998 | |||||
Cash interest paid | $ | 184 | $ | 137 | |||||
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 Corporations financial statements.
3.
Litigation and Other Contingencies
Litigation
A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. 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 Corporations operations or financial condition.
-6-
A number of lawsuits, including class actions, were brought in various courts against Exxon Mobil Corporation and certain of its subsidiaries relating to the accidental release of crude oil from the tanker Exxon Valdez in 1989. All the compensatory claims have been resolved and paid. All of the punitive damage claims were consolidated in the civil trial that began in 1994. The first judgment from the United States District Court for the District of Alaska in the amount of $5 billion was vacated by the United States Court of Appeals for the Ninth Circuit as being excessive under the Constitution. The second judgment in the amount of $4 billion was vacated by the Ninth Circuit panel without argument and sent back for the District Court to reconsider in light of the recent U.S. Supreme Court decision in Campbell v. State Farm. The most recent District Court judgment for punitive damages was for $4.5 billion plus interest and was entered in January 2004. The Corporation posted a $5.4 billion letter of credit. ExxonMobil and the plaintiffs appealed this decision to the Ninth Circuit, which ruled on December 22, 2006, that the award be reduced to $2.5 billion. On January 12, 2007, ExxonMobil petitioned the Ninth Circuit Court of Appeals for a rehearing en banc of its appeal. On May 23, 2007, with two dissenting opinions, the Ninth Circuit determined not to re-hear ExxonMobils appeal before the full court. ExxonMobil filed a petition for writ of certiorari to the U.S. Supreme Court on August 20, 2007. On October 29, 2007, the U.S. Supreme Court granted ExxonMobils petition for a writ of certiorari. Oral argument was held on February 27, 2008. While it is reasonably possible that a liability for punitive damages may have been incurred from the Exxon Valdez grounding, it is not possible to predict the ultimate outcome or to reasonably estimate any such potential liability.
Other Contingencies
As of March 31, 2008 | ||||||||||||||||||
Equity | Other | |||||||||||||||||
Company | Third Party | |||||||||||||||||
Obligations | Obligations | Total | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||
Total guarantees | $ | 6,466 | $ | 775 | $ | 7,241 |
The Corporation and certain of its consolidated subsidiaries were contingently liable at March 31, 2008, for $7,241 million, primarily relating to guarantees for notes, loans and performance under contracts. Included in this amount were guarantees by consolidated affiliates of $6,466 million, representing ExxonMobils share of obligations of certain equity companies. These guarantees are not reasonably likely to have a material effect on the Corporations 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 Corporations operations or financial condition. The Corporation's outstanding unconditional purchase obligations at March 31, 2008, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.
The operations and earnings of the Corporation and its affiliates throughout the world have been, and may in the future be, affected from time to time in varying degree by political developments and laws and regulations, such as forced divestiture of assets; restrictions on production, imports and exports; price controls; tax increases and retroactive tax claims; expropriation of property; cancellation of contract rights and environmental regulations. Both the likelihood of such occurrences and their overall effect upon the Corporation vary greatly from country to country and are not predictable.
In accordance with a nationalization decree issued by Venezuelas 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 PdVSAs or one of its affiliates 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 ExxonMobils 41.67 percent interest in the Cerro Negro Project.
-7-
To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporations consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporations operations or financial condition. At the time the assets were expropriated, ExxonMobils remaining net book investment in Cerro Negro producing assets was about $750 million.
4.
Comprehensive Income
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
(millions of dollars) | ||||||||||||||||
Net income | $ | 10,890 | $ | 9,280 | ||||||||||||
Other comprehensive income | ||||||||||||||||
(net of income taxes) | ||||||||||||||||
Foreign exchange translation adjustment | 1,477 | 423 | ||||||||||||||
Postretirement benefits reserves adjustment | ||||||||||||||||
(excluding amortization) | (151 | ) | (408 | ) | ||||||||||||
Amortization of postretirement benefits reserves | ||||||||||||||||
adjustment included in net periodic benefit costs | 189 | 201 | ||||||||||||||
Total comprehensive income | $ | 12,405 | $ | 9,496 |
5.
Earnings Per Share
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||
Net income (millions of dollars) | $ | 10,890 | $ | 9,280 | ||||||||
| ||||||||||||
Weighted average number of common shares | ||||||||||||
outstanding (millions of shares) | 5,301 | 5,650 | ||||||||||
Net income per common share (dollars) | $ | 2.05 | $ | 1.64 | ||||||||
NET INCOME PER COMMON SHARE | ||||||||||||
- ASSUMING DILUTION | ||||||||||||
Net income (millions of dollars) | $ | 10,890 | $ | 9,280 | ||||||||
Weighted average number of common shares | ||||||||||||
outstanding (millions of shares) | 5,301 | 5,650 | ||||||||||
Effect of employee stock-based awards | 61 | 64 | ||||||||||
Weighted average number of common shares | ||||||||||||
outstanding - assuming dilution | 5,362 | 5,714 | ||||||||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 2.03 | $ | 1.62 |
-8-
6.
Pension and Other Postretirement Benefits
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
(millions of dollars) | ||||||||||||
Pension Benefits - U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 95 | $ | 97 | ||||||||
Interest cost | 182 | 172 | ||||||||||
Expected return on plan assets | (229 | ) | (210 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 59 | 67 | ||||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | 44 | 47 | ||||||||||
Net benefit cost | $ | 151 | $ | 173 | ||||||||
Pension Benefits - Non-U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 113 | $ | 109 | ||||||||
Interest cost | 301 | 237 | ||||||||||
Expected return on plan assets | (318 | ) | (263 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 101 | 112 | ||||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | 0 | 0 | ||||||||||
Net benefit cost | $ | 197 | $ | 195 | ||||||||
Other Postretirement Benefits | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 29 | $ | 27 | ||||||||
Interest cost | 108 | 112 | ||||||||||
Expected return on plan assets | (12 | ) | (15 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 84 | 78 | ||||||||||
Net benefit cost | $ | 209 | $ | 202 |
-9-
7.
Disclosures about Segments and Related Information
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
(millions of dollars) | ||||||||||||
EARNINGS AFTER INCOME TAX | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,631 | $ | 1,177 | ||||||||
Non-U.S. | 7,154 | 4,864 | ||||||||||
Downstream | ||||||||||||
United States | 398 | 839 | ||||||||||
Non-U.S. | 768 | 1,073 | ||||||||||
Chemical | ||||||||||||
United States | 284 | 346 | ||||||||||
Non-U.S. | 744 | 890 | ||||||||||
All other | (89 | ) | 91 | |||||||||
Corporate total | $ | 10,890 | $ | 9,280 | ||||||||
SALES AND OTHER OPERATING REVENUE (1) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,764 | $ | 1,362 | ||||||||
Non-U.S. | 8,399 | 5,493 | ||||||||||
Downstream | ||||||||||||
United States | 28,458 | 21,260 | ||||||||||
Non-U.S. | 64,517 | 47,641 | ||||||||||
Chemical | ||||||||||||
United States | 3,652 | 3,189 | ||||||||||
Non-U.S. | 6,429 | 5,224 | ||||||||||
All other | 4 | 5 | ||||||||||
Corporate total | $ | 113,223 | $ | 84,174 | ||||||||
(1) Includes sales-based taxes | ||||||||||||
INTERSEGMENT REVENUE | ||||||||||||
Upstream | ||||||||||||
United States | $ | 2,561 | $ | 1,563 | ||||||||
Non-U.S. | 14,881 | 10,595 | ||||||||||
Downstream | ||||||||||||
United States | 3,861 | 2,782 | ||||||||||
Non-U.S. | 16,543 | 10,941 | ||||||||||
Chemical | ||||||||||||
United States | 2,428 | 1,697 | ||||||||||
Non-U.S. | 2,432 | 1,522 | ||||||||||
All other | 67 | 79 |
-10-
8.
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 ($1,777 million long-term at March 31, 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.
-11-
SeaRiver | ||||||||||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||||||||||
(millions of dollars) | ||||||||||||||||||||||||||||
Condensed consolidated statement of income for three months ended March 31, 2007 | ||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||
Sales and other operating revenue, including sales-based taxes | $ | 3,857 | $ | - | $ | 80,317 | $ | - | $ | 84,174 | ||||||||||||||||||
Income from equity affiliates | 9,167 | 7 | 1,904 | (9,163 | ) | 1,915 | ||||||||||||||||||||||
Other income | 222 | - | 912 | - | 1,134 | |||||||||||||||||||||||
Intercompany revenue | 8,281 | 26 | 77,889 | (86,196 | ) | - | ||||||||||||||||||||||
Total revenues and other income | 21,527 | 33 | 161,022 | (95,359 | ) | 87,223 | ||||||||||||||||||||||
Costs and other deductions | ||||||||||||||||||||||||||||
Crude oil and product purchases | 7,880 | - | 112,246 | (80,084 | ) | 40,042 | ||||||||||||||||||||||
Production and manufacturing expenses | 1,714 | - | 6,792 | (1,223 | ) | 7,283 | ||||||||||||||||||||||
Selling, general and administrative expenses | 591 | - | 2,986 | (185 | ) | 3,392 | ||||||||||||||||||||||
Depreciation and depletion | 388 | - | 2,554 | - | 2,942 | |||||||||||||||||||||||
Exploration expenses, including dry holes | 100 | - | 172 | - | 272 | |||||||||||||||||||||||
Interest expense | 1,446 | 50 | 3,488 | (4,881 | ) | 103 | ||||||||||||||||||||||
Sales-based taxes | - | - | 7,284 | - | 7,284 | |||||||||||||||||||||||
Other taxes and duties | 13 | - | 9,578 | - | 9,591 | |||||||||||||||||||||||
Income applicable to minority interests | - | - | 250 | - | 250 | |||||||||||||||||||||||
Total costs and other deductions | 12,132 | 50 | 145,350 | (86,373 | ) | 71,159 | ||||||||||||||||||||||
Income before income taxes | 9,395 | (17 | ) | 15,672 | (8,986 | ) | 16,064 | |||||||||||||||||||||
Income taxes | 115 | (8 | ) | 6,677 | - | 6,784 | ||||||||||||||||||||||
Net income | $ | 9,280 | $ | (9 | ) | $ | 8,995 | $ | (8,986 | ) | $ | 9,280 |
-12-
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated balance sheet as of March 31, 2008 | ||||||||||||||||||||
Cash and cash equivalents | $ | 294 | $ | - | $ | 40,619 | $ | - | $ | 40,913 | ||||||||||
Marketable securities | - | - | 480 | - | 480 | |||||||||||||||
Notes and accounts receivable - net | 3,591 | 8 | 34,204 | (1,375 | ) | 36,428 | ||||||||||||||
Inventories | 1,479 | - | 13,899 | - | 15,378 | |||||||||||||||
Prepaid taxes and expenses | 456 | - | 4,103 | - | 4,559 | |||||||||||||||
Total current assets | 5,820 | 8 | 93,305 | (1,375 | ) | 97,758 | ||||||||||||||
Property, plant and equipment - net | 16,222 | - | 106,713 | - | 122,935 | |||||||||||||||
Investments and other assets | 220,181 | 474 | 430,485 | (613,631 | ) | 37,509 | ||||||||||||||
Intercompany receivables | 11,511 | 2,015 | 467,804 | (481,330 | ) | - | ||||||||||||||
Total assets | $ | 253,734 | $ | 2,497 | $ | 1,098,307 | $ | (1,096,336 | ) | $ | 258,202 | |||||||||
Notes and loan payables | $ | 2 | $ | 13 | $ | 2,756 | $ | - | $ | 2,771 | ||||||||||
Accounts payable and accrued liabilities | 3,287 | - | 50,326 | - | 53,613 | |||||||||||||||
Income taxes payable | - | - | 15,974 | (1,375 | ) | 14,599 | ||||||||||||||
Total current liabilities | 3,289 | 13 | 69,056 | (1,375 | ) | 70,983 | ||||||||||||||
Long-term debt | 276 | 1,816 | 5,143 | - | 7,235 | |||||||||||||||
Deferred income tax liabilities | 1,774 | 206 | 22,028 | - | 24,008 | |||||||||||||||
Other long-term liabilities | 11,410 | - | 21,427 | - | 32,837 | |||||||||||||||
Intercompany payables | 113,846 | 383 | 367,101 | (481,330 | ) | - | ||||||||||||||
Total liabilities | 130,595 | 2,418 | 484,755 | (482,705 | ) | 135,063 | ||||||||||||||
Earnings reinvested | 237,529 | (490 | ) | 124,482 | (123,992 | ) | 237,529 | |||||||||||||
Other shareholders' equity | (114,390 | ) | 569 | 489,070 | (489,639 | ) | (114,390 | ) | ||||||||||||
Total shareholders' equity | 123,139 | 79 | 613,552 | (613,631 | ) | 123,139 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 253,734 | $ | 2,497 | $ | 1,098,307 | $ | (1,096,336 | ) | $ | 258,202 |
Condensed consolidated balance sheet as of December 31, 2007 | |||||||||||||||||
Cash and cash equivalents | $ | 1,393 | $ | - | $ | 32,588 | $ | - | $ | 33,981 | |||||||
Marketable securities | - | - | 519 | - | 519 | ||||||||||||
Notes and accounts receivable - net | 3,733 | 2 | 34,338 | (1,623 | ) | 36,450 | |||||||||||
Inventories | 1,198 | - | 9,891 | - | 11,089 | ||||||||||||
Prepaid taxes and expenses | 373 | - | 3,551 | - | 3,924 | ||||||||||||
Total current assets | 6,697 | 2 | 80,887 | (1,623 | ) | 85,963 | |||||||||||
Property, plant and equipment - net | 16,291 | - | 104,578 | - | 120,869 | ||||||||||||
Investments and other assets | 208,283 | 413 | 427,046 | (600,492 | ) | 35,250 | |||||||||||
Intercompany receivables | 14,577 | 1,961 | 437,433 | (453,971 | ) | - | |||||||||||
Total assets | $ | 245,848 | $ | 2,376 | $ | 1,049,944 | $ | (1,056,086 | ) | $ | 242,082 | ||||||
Notes and loan payables | $ | 3 | $ | 13 | $ | 2,367 | $ | - | $ | 2,383 | |||||||
Accounts payable and accrued liabilities | 3,038 | 1 | 42,236 | - | 45,275 | ||||||||||||
Income taxes payable | - | - | 12,277 | (1,623 | ) | 10,654 | |||||||||||
Total current liabilities | 3,041 | 14 | 56,880 | (1,623 | ) | 58,312 | |||||||||||
Long-term debt | 276 | 1,766 | 5,141 | - | 7,183 | ||||||||||||
Deferred income tax liabilities | 1,829 | 212 | 20,858 | - | 22,899 | ||||||||||||
Other long-term liabilities | 11,308 | - | 20,618 | - | 31,926 | ||||||||||||
Intercompany payables | 107,632 | 382 | 345,957 | (453,971 | ) | - | |||||||||||
Total liabilities | 124,086 | 2,374 | 449,454 | (455,594 | ) | 120,320 | |||||||||||
Earnings reinvested | 228,518 | (467 | ) | 114,037 | (113,570 | ) | 228,518 | ||||||||||
Other shareholders' equity | (106,756 | ) | 469 | 486,453 | (486,922 | ) | (106,756 | ) | |||||||||
Total shareholders' equity | 121,762 | 2 | 600,490 | (600,492 | ) | 121,762 | |||||||||||
Total liabilities and shareholders' equity | $ | 245,848 | $ | 2,376 | $ | 1,049,944 | $ | (1,056,086 | ) | $ | 242,082 |
-13-
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated statement of cash flows for three months ended March 31, 2008 | ||||||||||||||||||||
Cash provided by/(used in) operating activities | $ | 1,400 | $ | 13 | $ | 20,552 | $ | (545 | ) | $ | 21,420 | |||||||||
Cash flows from investing activities | ||||||||||||||||||||
Additions to property, plant and equipment | (352 | ) | - | (3,627 | ) | - | (3,979 | ) | ||||||||||||
Sales of long-term assets | 20 | - | 393 | - | 413 | |||||||||||||||
Net intercompany investing | 9,046 | (114 | ) | (9,093 | ) | 161 | - | |||||||||||||
All other investing, net | - | - | (734 | ) | - | (734 | ) | |||||||||||||
Net cash provided by/(used in) investing activities | 8,714 | (114 | ) | (13,061 | ) | 161 | (4,300 | ) | ||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Additions to long-term debt | - | - | 35 | - | 35 | |||||||||||||||
Reductions in long-term debt | - | - | (46 | ) | - | (46 | ) | |||||||||||||
Additions/(reductions) in short-term debt - net | - | - | 190 | - | 190 | |||||||||||||||
Cash dividends | (1,879 | ) | - | (545 | ) | 545 | (1,879 | ) | ||||||||||||
Net ExxonMobil shares sold/(acquired) | (9,334 | ) | - | - | - | (9,334 | ) | |||||||||||||
Net intercompany financing activity | - | 1 | 60 | (61 | ) | - | ||||||||||||||
All other financing, net | - | 100 | (319 | ) | (100 | ) | (319 | ) | ||||||||||||
Net cash provided by/(used in) financing activities | (11,213 | ) | 101 | (625 | ) | 384 | (11,353 | ) | ||||||||||||
Effects of exchange rate changes on cash | - | - | 1,165 | - | 1,165 | |||||||||||||||
Increase/(decrease) in cash and cash equivalents | $ | (1,099 | ) | $ | - | $ | 8,031 | $ | - | $ | 6,932 |
Condensed consolidated statement of cash flows for three months ended March 31, 2007 | ||||||||||||||||
Cash provided by/(used in) operating activities | $ | 1,017 | $ | 19 | $ | 13,413 | $ | (163 | ) | $ | 14,286 | |||||
Cash flows from investing activities | ||||||||||||||||
Additions to property, plant and equipment | (301 | ) | - | (2,805 | ) | - | (3,106 | ) | ||||||||
Sales of long-term assets | 97 | - | 441 | - | 538 | |||||||||||
Net intercompany investing | 5,190 | (16 | ) | (5,202 | ) | 28 | - | |||||||||
All other investing, net | - | - | (670 | ) | - | (670 | ) | |||||||||
Net cash provided by/(used in) investing activities | 4,986 | (16 | ) | (8,236 | ) | 28 | (3,238 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Additions to long-term debt | - | - | 93 | - | 93 | |||||||||||
Reductions in long-term debt | - | - | (36 | ) | - | (36 | ) | |||||||||
Additions/(reductions) in short-term debt - net | 168 | - | 106 | - | 274 | |||||||||||
Cash dividends | (1,825 | ) | - | (163 | ) | 163 | (1,825 | ) | ||||||||
Net ExxonMobil shares sold/(acquired) | (7,788 | ) | - | - | - | (7,788 | ) | |||||||||
Net intercompany financing activity | - | (3 | ) | 31 | (28 | ) | - | |||||||||
All other financing, net | - | - | (223 | ) | - | (223 | ) | |||||||||
Net cash provided by/(used in) financing activities | (9,445 | ) | (3 | ) | (192 | ) | 135 | (9,505 | ) | |||||||
Effects of exchange rate changes on cash | - | - | 207 | - | 207 | |||||||||||
Increase/(decrease) in cash and cash equivalents | $ | (3,442 | ) | $ | - | $ | 5,192 | $ | - | $ | 1,750 |
-14-
EXXON MOBIL CORPORATION
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
FUNCTIONAL EARNINGS SUMMARY
First Three Months | ||||||||||||
Net Income (U.S. GAAP) | 2008 | 2007 | ||||||||||
(millions of dollars) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,631 | $ | 1,177 | ||||||||
Non-U.S. | 7,154 | 4,864 | ||||||||||
Downstream | ||||||||||||
United States | 398 | 839 | ||||||||||
Non-U.S. | 768 | 1,073 | ||||||||||
Chemical | ||||||||||||
United States | 284 | 346 | ||||||||||
Non-U.S. | 744 | 890 | ||||||||||
Corporate and financing | (89 | ) | 91 | |||||||||
Net Income (U.S. GAAP) | $ | 10,890 | $ | 9,280 | ||||||||
Net income per common share (dollars) | $ | 2.05 | $ | 1.64 | ||||||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 2.03 | $ | 1.62 |
REVIEW OF FIRST QUARTER 2008 RESULTS
Exxon Mobil Corporation reported record first quarter 2008 net income of $10,890 million, up 17 percent from the first quarter of 2007. Earnings per share were up 25 percent to $2.03 reflecting strong earnings and the impact of the continuing share purchase program. Higher crude oil and natural gas realizations, driven by record worldwide crude oil prices, were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs. Share purchases to reduce shares outstanding were increased to $8.0 billion in the first quarter of 2008 and reduced shares outstanding by 1.8 percent.
First Three Months | |||||||||||||||
|
| 2008 | 2007 | ||||||||||||
(millions of dollars) | |||||||||||||||
Upstream earnings | |||||||||||||||
United States | $ | 1,631 | $ | 1,177 | |||||||||||
Non-U.S. | 7,154 | 4,864 | |||||||||||||
Total | $ | 8,785 | $ | 6,041 |
Upstream earnings were $8,785 million, up $2,744 million from the first quarter of 2007. Record high crude oil and natural gas realizations increased earnings approximately $4.4 billion. Volume and mix effects decreased earnings about $800 million, as increased natural gas volumes were more than offset by lower crude volumes. Earnings also decreased due to $300 million of higher taxes, $250 million of increased operating costs and $200 million of lower gains on asset sales.
On an oil-equivalent basis, production decreased 5.6 percent from the first quarter of 2007. Excluding the Venezuela expropriation, divestments, OPEC quota effects and price and spend impacts on volumes, production was down 3 percent.
Liquids production totaled 2,474 kbd (thousands of barrels per day), down 272 kbd from the first quarter of 2007. Excluding the Venezuela expropriation, divestments, OPEC quota effects and price and spend impacts on volumes, liquids production was down 6 percent. Increased production from projects in west Africa and the North Sea was more than offset by mature field decline, PSC net interest reductions and maintenance activities.
First quarter natural gas production was 10,246 mcfd (millions of cubic feet per day), up 132 mcfd from 2007. Higher European demand and North Sea project additions were partly offset by mature field decline.
Earnings from U.S. Upstream operations were $1,631 million, $454 million higher than the first quarter of 2007. Non-U.S. Upstream earnings were $7,154 million, up $2,290 million from 2007.
-15-
First Three Months | ||||||||||||||||
2008 | 2007 | |||||||||||||||
(millions of dollars) | ||||||||||||||||
Downstream earnings | ||||||||||||||||
United States | $ | 398 | $ | 839 | ||||||||||||
Non-U.S. | 768 | 1,073 | ||||||||||||||
Total | $ | 1,166 | $ | 1,912 |
Downstream earnings of $1,166 million were $746 million lower than the first quarter of 2007. Significantly lower worldwide refining margins decreased earnings approximately $1.0 billion, while improved refinery operations increased earnings about $350 million. Petroleum product sales of 6,821 kbd were 377 kbd lower than last year's first quarter, mainly reflecting asset sales.
U.S. Downstream earnings were $398 million, down $441 million from the first quarter of 2007. Non-U.S. Downstream earnings of $768 million were $305 million lower.
First Three Months | ||||||||||||||||||
2008 | 2007 | |||||||||||||||||
(millions of dollars) | ||||||||||||||||||
Chemical earnings | ||||||||||||||||||
United States | $ | 284 | $ | 346 | ||||||||||||||
Non-U.S. | 744 | 890 | ||||||||||||||||
Total | $ | 1,028 | $ | 1,236 |
Chemical earnings of $1,028 million were $208 million lower than the first quarter of 2007. Lower margins, which decreased earnings approximately $350 million, were partly offset by favorable foreign exchange and tax effects. Prime product sales of 6,578 kt (thousands of metric tons) in the first quarter of 2008 were 227 kt lower than the prior year.
First Three Months | |||||||||||||||
2008 | 2007 | ||||||||||||||
(millions of dollars) | |||||||||||||||
Corporate and financing earnings | $ | (89 | ) | $ | 91 |
Corporate and financing expenses were $89 million, up $180 million, mainly due to higher corporate costs and tax items.
LIQUIDITY AND CAPITAL RESOURCES
First Three Months | ||||||||||||
2008 | 2007 | |||||||||||
(millions of dollars) | ||||||||||||
Net cash provided by/(used in) | ||||||||||||
Operating activities | $ | 21,420 | $ | 14,286 | ||||||||
Investing activities | (4,300 | ) | (3,238 | ) | ||||||||
Financing activities | (11,353 | ) | (9,505 | ) | ||||||||
Effect of exchange rate changes | 1,165 | 207 | ||||||||||
Increase/(decrease) in cash and cash equivalents | $ | 6,932 | $ | 1,750 | ||||||||
Cash and cash equivalents | $ | 40,913 | $ | 29,994 | ||||||||
Cash and cash equivalents - restricted | 0 | 4,604 | ||||||||||
Total cash and cash equivalents (at end of period) | $ | 40,913 | $ | 34,598 | ||||||||
Cash flow from operations and asset sales | ||||||||||||
Net cash provided by operating activities (U.S. GAAP) | $ | 21,420 | $ | 14,286 | ||||||||
Sales of subsidiaries, investments and property, | ||||||||||||
plant and equipment | 413 | 538 | ||||||||||
Cash flow from operations and asset sales | $ | 21,833 | $ | 14,824 |
Because of the ongoing nature of our asset management and divestment program, we believe
it is useful for investors to consider asset sales proceeds together with cash provided by operating
activities when evaluating cash available for investment in the business and financing activities.
-16-
Total cash and cash equivalents of $40.9 billion at the end of the first quarter of 2008 compared to $34.6 billion, including the $4.6 billion of restricted cash, at the end of the first quarter of 2007.
Cash provided by operating activities totaled $21,420 million for the first three months of 2008, $7,134 million higher than 2007. The major source of funds was net income of $10,890 million, adjusted for the noncash provision of $3,104 million for depreciation and depletion, both of which increased. The effects of higher prices on the timing of payments of accounts and other payables 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 three months of 2008 used net cash of $4,300 million compared to $3,238 million in the prior year. Spending for additions to property, plant and equipment increased $873 million to $3,979 million. Proceeds from asset divestments of $413 million in 2008 were lower.
Cash flow from operations and asset sales in the first three months of 2008 was $21.8 billion, including asset sales of $0.4 billion, and increased $7.0 billion from the comparable 2007 period.
Net cash used in financing activities of $11,353 million in the first three months of 2008 increased $1,848 million reflecting a higher level of purchases of shares of ExxonMobil stock.
During the first quarter of 2008, Exxon Mobil Corporation purchased 110 million shares of its common stock for the treasury at a gross cost of $9.5 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 from 5,382 million at the end of the fourth quarter to 5,284 million at the end of the first quarter. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.
The Corporation distributed a total of $9.9 billion to shareholders during the quarter through dividends and share purchases to reduce shares outstanding, an increase of 13 percent or $1.1 billion versus the first quarter of 2007.
Total debt of $10.0 billion at March 31, 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 first 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.
The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses.
In accordance with a nationalization decree issued by Venezuelas 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 PdVSAs or one of its affiliates 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 ExxonMobils 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 Corporations consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporations operations or financial condition. At the time the assets were expropriated, ExxonMobils remaining net book investment in Cerro Negro producing assets was about $750 million.
-17-
TAXES
First Three Months | ||||||||||||||
2008 | 2007 | |||||||||||||
(millions of dollars) | ||||||||||||||
Income taxes | $ | 9,302 | $ | 6,784 | ||||||||||
Sales-based taxes | 8,432 | 7,284 | ||||||||||||
All other taxes and duties | 11,607 | 10,408 | ||||||||||||
Total | $ | 29,341 | $ | 24,476 | ||||||||||
Effective income tax rate | 49 | % | 44 | % |
Income, sales-based and all other taxes and duties for the first quarter of 2008 of $29,341 million were higher than 2007. In the first quarter of 2008 income tax expense increased to $9,302 million and the effective income tax rate was 49 percent, compared to $6,784 million and 44 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
First Three Months | ||||||||||||||
2008 | 2007 | |||||||||||||
(millions of dollars) | ||||||||||||||
Upstream (including exploration expenses) | $ | 4,095 | $ | 3,469 | ||||||||||
Downstream | 827 | 531 | ||||||||||||
Chemical | 566 | 219 | ||||||||||||
Other | 3 | 3 | ||||||||||||
Total | $ | 5,491 | $ | 4,222 |
Spending on capital and exploration projects was $5.5 billion in the first quarter of 2008, up 30 percent from last year, as we continued to actively invest in projects to bring additional crude oil, natural gas and finished products to market.
Capital and exploration expenditures for full year 2007 were $20.9 billion and are expected to range from $25 billion to $30 billion for the next several years. Actual spending could vary depending on the progress of individual projects.
RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS
In December 2007, the FASB issued Statement No. 160 (FAS 160), Noncontrolling Interests in Consolidated Financial Statements an Amendment of ARB No. 51. FAS 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. FAS 160 must be adopted by the Corporation no later than January 1, 2009. FAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of FAS 160 will be applied prospectively. The Corporation does not expect the adoption of FAS 160 to have a material impact on the Corporations financial statements.
FORWARD-LOOKING STATEMENTS
Statements in this report relating to future plans, projections, events or conditions are forward-looking statements. Actual results, including project plans, capacities, and timing and resource recoveries could differ materially due to changes in long-term oil or gas prices or other market conditions affecting the oil and gas industry; political events or disturbances; reservoir performance; the outcome of commercial negotiations; 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.
-18-
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risks for the three months ended March 31, 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 Corporations chief executive officer, principal financial officer and principal accounting officer have evaluated the Corporations disclosure controls and procedures as of March 31, 2008. Based on that evaluation, these officers have concluded that the Corporations 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 Commissions 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 February 15, 2008, the Texas Commission on Environmental Quality (TCEQ) filed a Preliminary Report and Petition seeking an administrative penalty and corrective action related to a July 24, 2004, emissions event and alleged violations discovered in a 2005 TCEQ inspection at the Baytown Refinery. TCEQ is seeking an administrative penalty of $192,720. ExxonMobil has filed its Answer to the Petition and requested a contested case hearing. The matter is now pending before the State Office of Administrative Hearings.
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.
-19-
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Note 1 -- On August 1, 2000, the Corporation announced its intention to resume purchases of shares of its common stock for the treasury both to offset shares issued in conjunction with 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. In its most recent earnings release dated May 1, 2008, the Corporation stated that share purchases to reduce shares outstanding were increased to $8.0 billion in the first quarter of 2008. Purchases may be made in both the open market and through negotiated transactions, and purchases may be increased, decreased or discontinued at any time without prior notice.
-20-
Item 6. Exhibits
Exhibit
Description
10(iii)(a.1)
2003 Incentive Program, as approved by shareholders May 28, 2003.
31.1
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief
Executive Officer.
31.2
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal
Financial Officer.
31.3
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal
Accounting Officer.
32.1
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
Executive Officer.
32.2
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Financial Officer.
32.3
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Accounting Officer.
-21-
EXXON MOBIL CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EXXON MOBIL CORPORATION
Date: May 6, 2008
By: /s/ Patrick T. Mulva
Name: Patrick T. Mulva
Title: Vice President, Controller and
Principal Accounting Officer
-22-
INDEX TO EXHIBITS
Exhibit
Description
10(iii)(a.1)
2003 Incentive Program, as approved by shareholders May 28, 2003.
31.1
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Chief Executive Officer.
31.2
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Principal Financial Officer.
31.3
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Principal Accounting Officer.
32.1
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
Executive Officer.
32.2
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal
Financial Officer.
32.3
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal
Accounting Officer.
-23-