Attached files

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EXCEL - IDEA: XBRL DOCUMENT - EXXON MOBIL CORPFinancial_Report.xls
EX-32.1 - SECTION 1350 CERTIFICATION (PURSUANT TO SARBANES-OXLEY SECTION 906) BY CHIEF EXECUTIVE OFFICER - EXXON MOBIL CORPxomexhibit321.htm
EX-31.1 - CERTIFICATION (PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(A)) BY CHIEF EXECUTIVE OFFICER - EXXON MOBIL CORPxomexhibit311.htm
EX-32.2 - SECTION 1350 CERTIFICATION (PURSUANT TO SARBANES-OXLEY SECTION 906) BY PRINCIPAL FINANCIAL OFFICER - EXXON MOBIL CORPxomexhibit322.htm
EX-31.2 - CERTIFICATION (PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(A)) BY PRINCIPAL FINANCIAL OFFICER - EXXON MOBIL CORPxomexhibit312.htm
EX-31.3 - CERTIFICATION (PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(A)) BY PRINCIPAL ACCOUNTING OFFICER - EXXON MOBIL CORPxomexhibit313.htm
EX-32.3 - SECTION 1350 CERTIFICATION (PURSUANT TO SARBANES-OXLEY SECTION 906) BY PRINCIPAL ACCOUNTING OFFICER - EXXON MOBIL CORPxomexhibit323.htm

 

 

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 June 30, 2014

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   No ¨ 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   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 June 30, 2014

Common stock, without par value

 

 4,264,692,028 

 


 

 

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2014

 

TABLE OF CONTENTS

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

Item 1.       Financial Statements

 

 

     Condensed Consolidated Statement of Income

Three and six months ended June 30, 2014 and 2013

 

3

     Condensed Consolidated Statement of Comprehensive Income

Three and six months ended June 30, 2014 and 2013

 

4

     Condensed Consolidated Balance Sheet

As of June 30, 2014 and December 31, 2013

5

 

 

     Condensed Consolidated Statement of Cash Flows

          Six months ended June 30, 2014 and 2013

 

6

     Condensed Consolidated Statement of Changes in Equity

          Six months ended June 30, 2014 and 2013

 

7

     Notes to Condensed Consolidated Financial Statements

 

8

Item 2.       Management's Discussion and Analysis of Financial

                     Condition and Results of Operations

 

13

Item 3.       Quantitative and Qualitative Disclosures About Market Risk

 

20

Item 4.       Controls and Procedures

 

20

 

 

PART II.  OTHER INFORMATION

 

Item 1.       Legal Proceedings

 

21

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

 

22

Item 6.       Exhibits

 

22

Signature

 

23

Index to Exhibits

 

24


2

 


 

 

 

PART I.  FINANCIAL INFORMATION

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Item 1.  Financial Statements

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Three Months Ended

  

  

Six Months Ended

  

  

  

  

  

June 30,

  

  

June 30,

  

  

  

  

  

2014 

  

  

2013 

  

  

2014 

  

  

2013 

Revenues and other income  

  

  

  

  

  

  

  

  

  

  

  

  

  

Sales and other operating revenue (1) 

  

  

106,158 

  

  

103,050 

  

  

207,918 

  

  

206,428 

  

Income from equity affiliates

  

  

3,312 

  

  

3,098 

  

  

7,420 

  

  

7,516 

  

Other income

  

  

2,177 

  

  

518 

  

  

3,082 

  

  

1,079 

  

  

Total revenues and other income

  

  

111,647 

  

  

106,666 

  

  

218,420 

  

  

215,023 

Costs and other deductions  

  

  

  

  

  

  

  

  

  

  

  

  

  

Crude oil and product purchases

  

  

62,649 

  

  

59,678 

  

  

120,963 

  

  

119,127 

  

Production and manufacturing expenses

  

  

10,478 

  

  

10,278 

  

  

20,566 

  

  

20,014 

  

Selling, general and administrative expenses

  

  

3,169 

  

  

3,268 

  

  

6,301 

  

  

6,386 

  

Depreciation and depletion

  

  

4,285 

  

  

4,405 

  

  

8,477 

  

  

8,515 

  

Exploration expenses, including dry holes

  

  

496 

  

  

454 

  

  

813 

  

  

899 

  

Interest expense

  

  

64 

  

  

85 

  

  

130 

  

  

109 

  

Sales-based taxes (1) 

  

  

7,871 

  

  

7,552 

  

  

15,287 

  

  

15,044 

  

Other taxes and duties

  

  

8,484 

  

  

8,178 

  

  

16,505 

  

  

16,123 

  

  

Total costs and other deductions

  

  

97,496 

  

  

93,898 

  

  

189,042 

  

  

186,217 

Income before income taxes  

  

  

14,151 

  

  

12,768 

  

  

29,378 

  

  

28,806 

  

Income taxes  

  

  

5,034 

  

  

5,793 

  

  

10,891 

  

  

12,070 

Net income including noncontrolling interests  

  

  

9,117 

  

  

6,975 

  

  

18,487 

  

  

16,736 

  

Net income attributable to noncontrolling interests  

  

  

337 

  

  

115 

  

  

607 

  

  

376 

Net income attributable to ExxonMobil  

  

  

8,780 

  

  

6,860 

  

  

17,880 

  

  

16,360 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per common share (dollars) 

  

  

2.05 

  

  

1.55 

  

  

4.15 

  

  

3.67 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per common share - assuming dilution (dollars) 

  

  

2.05 

  

  

1.55 

  

  

4.15 

  

  

3.67 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Dividends per common share (dollars) 

  

  

0.69 

  

  

0.63 

  

  

1.32 

  

  

1.20 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(1) Sales-based taxes included in sales and other

  

  

  

  

  

  

  

  

  

  

  

  

  

  

operating revenue

  

  

7,871 

  

  

7,552 

  

  

15,287 

  

  

15,044 

 

 

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


3

 


 

 

 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Three Months Ended

  

  

Six Months Ended

  

  

  

  

  

  

June 30,

  

  

June 30,

  

  

  

  

  

  

2014 

  

  

2013 

  

  

2014 

  

  

2013 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Net income including noncontrolling interests

  

  

9,117 

  

  

6,975 

  

  

18,487 

  

  

16,736 

Other comprehensive income (net of income taxes)

  

  

  

  

  

  

  

  

  

  

  

  

  

Foreign exchange translation adjustment

  

  

1,628 

  

  

(2,337)

  

  

842 

  

  

(3,546)

  

Adjustment for foreign exchange translation (gain)/loss

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

 included in net income

  

  

81 

  

  

  

  

163 

  

  

  

Postretirement benefits reserves adjustment

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(excluding amortization)

  

  

(92)

  

  

99 

  

  

(176)

  

  

164 

  

Amortization and settlement of postretirement benefits reserves

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

adjustment included in net periodic benefit costs

  

  

313 

  

  

454 

  

  

629 

  

  

898 

  

Unrealized change in fair value of stock investments

  

  

18 

  

  

  

  

(36)

  

  

  

  

Total other comprehensive income

  

  

1,948 

  

  

(1,784)

  

  

1,422 

  

  

(2,484)

Comprehensive income including noncontrolling interests

  

  

11,065 

  

  

5,191 

  

  

19,909 

  

  

14,252 

  

Comprehensive income attributable to

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

noncontrolling interests

  

  

556 

  

  

(55)

  

  

615 

  

  

89 

Comprehensive income attributable to ExxonMobil

  

  

10,509 

  

  

5,246 

  

  

19,294 

  

  

14,163 

 

 

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


4

 


 

 

 

EXXON MOBIL CORPORATION

  

CONDENSED CONSOLIDATED BALANCE SHEET

  

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

June 30,

  

  

Dec. 31,

  

  

  

  

  

  

  

2014 

  

  

2013 

  

Assets  

  

  

  

  

  

  

  

  

Current assets

  

  

  

  

  

  

  

  

  

Cash and cash equivalents

  

  

6,083 

  

  

4,644 

  

  

  

Cash and cash equivalents – restricted

  

  

198 

  

  

269 

  

  

  

Notes and accounts receivable – net

  

  

34,182 

  

  

33,152 

  

  

  

Inventories

  

  

  

  

  

  

  

  

  

  

Crude oil, products and merchandise

  

  

13,944 

  

  

12,117 

  

  

  

  

Materials and supplies

  

  

4,233 

  

  

4,018 

  

  

  

Other current assets

  

  

5,373 

  

  

5,108 

  

  

  

  

Total current assets

  

  

64,013 

  

  

59,308 

  

  

Investments, advances and long-term receivables

  

  

35,110 

  

  

36,328 

  

  

Property, plant and equipment – net

  

  

251,353 

  

  

243,650 

  

  

Other assets, including intangibles – net

  

  

8,110 

  

  

7,522 

  

  

  

  

Total assets

  

  

358,586 

  

  

346,808 

  

  

  

  

  

  

  

  

  

  

  

  

Liabilities  

  

  

  

  

  

  

  

  

Current liabilities

  

  

  

  

  

  

  

  

  

Notes and loans payable

  

  

9,948 

  

  

15,808 

  

  

  

Accounts payable and accrued liabilities

  

  

52,363 

  

  

48,085 

  

  

  

Income taxes payable

  

  

7,218 

  

  

7,831 

  

  

  

  

Total current liabilities

  

  

69,529 

  

  

71,724 

  

  

Long-term debt

  

  

11,817 

  

  

6,891 

  

  

Postretirement benefits reserves

  

  

20,161 

  

  

20,646 

  

  

Deferred income tax liabilities

  

  

41,000 

  

  

40,530 

  

  

Long-term obligations to equity companies

  

  

5,041 

  

  

4,742 

  

  

Other long-term obligations

  

  

22,907 

  

  

21,780 

  

  

  

  

Total liabilities

  

  

170,455 

  

  

166,313 

  

  

  

  

  

  

  

  

  

  

  

  

Commitments and contingencies (Note 2)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Equity  

  

  

  

  

  

  

  

  

Common stock without par value

  

  

  

  

  

  

  

  

  

(9,000 million shares authorized,  8,019 million shares issued)

  

  

10,487 

  

  

10,077 

  

  

Earnings reinvested

  

  

399,614 

  

  

387,432 

  

  

Accumulated other comprehensive income

  

  

(9,311)

  

  

(10,725)

  

  

Common stock held in treasury

  

  

  

  

  

  

  

  

  

(3,754 million shares at June 30, 2014 and

  

  

  

  

  

  

  

  

   3,684 million shares at Dec. 31, 2013)

  

  

(219,635)

  

  

(212,781)

  

  

  

  

ExxonMobil share of equity  

  

  

181,155 

  

  

174,003 

  

  

Noncontrolling interests

  

  

6,976 

  

  

6,492 

  

  

  

  

Total equity

  

  

188,131 

  

  

180,495 

  

  

  

  

Total liabilities and equity

  

  

358,586 

  

  

346,808 

  

 

 

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


5

 


 

 

 

EXXON MOBIL CORPORATION

  

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

  

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Six Months Ended

  

  

  

  

  

  

  

June 30,

  

  

  

  

  

  

  

2014 

  

  

2013 

  

Cash flows from operating activities

  

  

  

  

  

  

  

  

Net income including noncontrolling interests

  

  

18,487 

  

  

16,736 

  

  

Depreciation and depletion

  

  

8,477 

  

  

8,515 

  

  

Changes in operational working capital, excluding cash and debt

  

  

  

  

(2,962)

  

  

All other items – net

  

  

(1,662)

  

  

(1,014)

  

  

  

  

Net cash provided by operating activities

  

  

25,305 

  

  

21,275 

  

  

  

  

  

  

  

  

  

  

  

  

Cash flows from investing activities

  

  

  

  

  

  

  

  

Additions to property, plant and equipment

  

  

(15,870)

  

  

(16,145)

  

  

Proceeds associated with sales of subsidiaries, property, plant and

  

  

  

  

  

  

  

  

  

equipment, and sales and returns of investments

  

  

3,667 

  

  

665 

  

  

Additional investments and advances

  

  

(678)

  

  

(3,464)

  

  

Other investing activities – net

  

  

2,398 

  

  

397 

  

  

  

  

Net cash used in investing activities

  

  

(10,483)

  

  

(18,547)

  

  

  

  

  

  

  

  

  

  

  

  

Cash flows from financing activities

  

  

  

  

  

  

  

  

Additions to long-term debt

  

  

5,500 

  

  

202 

  

  

Additions/(reductions) in short-term debt – net

  

  

(489)

  

  

(362)

  

  

Additions/(reductions) in debt with three months or less maturity

  

  

(5,747)

  

  

7,928 

  

  

Cash dividends to ExxonMobil shareholders

  

  

(5,698)

  

  

(5,355)

  

  

Cash dividends to noncontrolling interests

  

  

(131)

  

  

(185)

  

  

Changes in noncontrolling interests

  

  

 - 

  

  

(1)

  

  

Tax benefits related to stock-based awards

  

  

  

  

  

  

Common stock acquired

  

  

(6,863)

  

  

(9,652)

  

  

Common stock sold

  

  

  

  

  

  

  

  

Net cash used in financing activities

  

  

(13,412)

  

  

(7,409)

  

Effects of exchange rate changes on cash

  

  

29 

  

  

(292)

  

Increase/(decrease) in cash and cash equivalents

  

  

1,439 

  

  

(4,973)

  

Cash and cash equivalents at beginning of period

  

  

4,644 

  

  

9,582 

  

Cash and cash equivalents at end of period

  

  

6,083 

  

  

4,609 

  

  

  

  

  

  

  

  

  

  

  

  

Supplemental Disclosures

  

  

  

  

  

  

  

  

Income taxes paid

  

  

10,366 

  

  

14,660 

  

  

Cash interest paid

  

  

174 

  

  

219 

  

 

 

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


6

 


 

 

 

  

EXXON MOBIL CORPORATION

  

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

  

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

ExxonMobil Share of Equity

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Accumulated

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Other

  

Common

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Compre-

  

Stock

  

ExxonMobil

  

Non-

  

  

  

  

  

  

  

  

Common

  

Earnings

  

hensive

  

Held in

  

Share of

  

controlling

  

Total

  

  

  

  

  

Stock

  

Reinvested

  

Income

  

Treasury

  

Equity

  

Interests

  

Equity

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Balance as of December 31, 2012

  

  

9,653 

  

  

365,727 

  

  

(12,184)

  

  

(197,333)

  

  

165,863 

  

  

5,797 

  

  

171,660 

  

Amortization of stock-based awards

  

  

428 

  

  

 - 

  

  

 - 

  

  

 - 

  

  

428 

  

  

 - 

  

  

428 

  

Tax benefits related to stock-based

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

awards

  

  

192 

  

  

 - 

  

  

 - 

  

  

 - 

  

  

192 

  

  

 - 

  

  

192 

  

Other

  

  

(391)

  

  

 - 

  

  

 - 

  

  

 - 

  

  

(391)

  

  

241 

  

  

(150)

  

Net income for the period

  

  

 - 

  

  

16,360 

  

  

 - 

  

  

 - 

  

  

16,360 

  

  

376 

  

  

16,736 

  

Dividends – common shares

  

  

 - 

  

  

(5,355)

  

  

 - 

  

  

 - 

  

  

(5,355)

  

  

(185)

  

  

(5,540)

  

Other comprehensive income

  

  

 - 

  

  

 - 

  

  

(2,197)

  

  

 - 

  

  

(2,197)

  

  

(287)

  

  

(2,484)

  

Acquisitions, at cost

  

  

 - 

  

  

 - 

  

  

 - 

  

  

(9,652)

  

  

(9,652)

  

  

(1)

  

  

(9,653)

  

Dispositions

  

  

 - 

  

  

 - 

  

  

 - 

  

  

399 

  

  

399 

  

  

 - 

  

  

399 

Balance as of June 30, 2013

  

  

9,882 

  

  

376,732 

  

  

(14,381)

  

  

(206,586)

  

  

165,647 

  

  

5,941 

  

  

171,588 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Balance as of December 31, 2013

  

  

10,077 

  

  

387,432 

  

  

(10,725)

  

  

(212,781)

  

  

174,003 

  

  

6,492 

  

  

180,495 

  

Amortization of stock-based awards

  

  

402 

  

  

 - 

  

  

 - 

  

  

 - 

  

  

402 

  

  

 - 

  

  

402 

  

Tax benefits related to stock-based

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

awards

  

  

  

  

 - 

  

  

 - 

  

  

 - 

  

  

  

  

 - 

  

  

  

Other

  

  

  

  

 - 

  

  

 - 

  

  

 - 

  

  

  

  

 - 

  

  

  

Net income for the period

  

  

 - 

  

  

17,880 

  

  

 - 

  

  

 - 

  

  

17,880 

  

  

607 

  

  

18,487 

  

Dividends – common shares

  

  

 - 

  

  

(5,698)

  

  

 - 

  

  

 - 

  

  

(5,698)

  

  

(131)

  

  

(5,829)

  

Other comprehensive income

  

  

 - 

  

  

 - 

  

  

1,414 

  

  

 - 

  

  

1,414 

  

  

  

  

1,422 

  

Acquisitions, at cost

  

  

 - 

  

  

 - 

  

  

 - 

  

  

(6,863)

  

  

(6,863)

  

  

 - 

  

  

(6,863)

  

Dispositions

  

  

 - 

  

  

 - 

  

  

 - 

  

  

  

  

  

  

 - 

  

  

Balance as of June 30, 2014

  

  

10,487 

  

  

399,614 

  

  

(9,311)

  

  

(219,635)

  

  

181,155 

  

  

6,976 

  

  

188,131 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Six Months Ended June 30, 2014

  

  

  

  

Six Months Ended June 30, 2013

  

  

  

  

  

  

  

  

Held in

  

  

  

  

  

  

  

  

  

  

Held in

  

  

  

  

Common Stock Share Activity

  

Issued

  

Treasury

  

Outstanding

  

  

  

  

Issued

  

Treasury

  

Outstanding

  

  

  

  

(millions of shares)

  

  

  

  

(millions of shares)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Balance as of December 31

  

  

8,019 

  

  

(3,684)

  

  

4,335 

  

  

  

  

  

8,019 

  

  

(3,517)

  

  

4,502 

  

  

  

Acquisitions

  

  

 - 

  

  

(70)

  

  

(70)

  

  

  

  

  

 - 

  

  

(108)

  

  

(108)

  

  

  

Dispositions

  

  

 - 

  

  

 - 

  

  

 - 

  

  

  

  

  

 - 

  

  

  

  

  

Balance as of June 30

  

  

8,019 

  

  

(3,754)

  

  

4,265 

  

  

  

  

  

8,019 

  

  

(3,617)

  

  

4,402 

 

 

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


7

 


 

 

EXXON MOBIL CORPORATION

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1.     Basis of Financial Statement Preparation

 

These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 2013 Annual Report on Form 10-K.  In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein.  All such adjustments are of a normal recurring nature.  Prior data has been reclassified in certain cases to conform to the current presentation basis.

 

The Corporation's exploration and production activities are accounted for under the "successful efforts" method.

 

2.     Litigation and Other Contingencies

 

Litigation

 

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

 

 

Other Contingencies

 

The Corporation and certain of its consolidated subsidiaries were contingently liable at June 30, 2014, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

  

  

  

  

  

  

As of June 30, 2014

  

  

  

  

  

  

  

  

Equity

  

  

Other

  

  

  

  

  

  

  

  

  

  

  

Company

  

  

Third Party

  

  

  

  

  

  

  

  

  

  

  

Obligations (1) 

  

  

Obligations

  

  

Total

  

  

  

  

  

  

  

  

(millions of dollars)

  

  

  

Guarantees

  

  

  

  

  

  

  

  

  

  

  

  

  

Debt-related

  

  

3,328 

  

  

50 

  

  

3,378 

  

  

  

  

Other

  

  

3,925 

  

  

4,700 

  

  

8,625 

  

  

  

  

  

Total

  

  

7,253 

  

  

4,750 

  

  

12,003 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(1) ExxonMobil share

  

  

  

  

  

  

  

  

  

  

  


8

 


 

 

 

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 June 30, 2014, 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.  On July 31, 2014, the European Union (EU) issued its latest sanctions against Russia relating to the situation in Ukraine which became effective on August 1, 2014.  On August 1, 2014, the United States (U.S.) through the Department of Commerce, Bureau of Industry and Security issued its latest sanctions against Russia relating to the situation in Ukraine which will become effective when published in the Federal Register.  The extent of the impact of these latest EU and U.S. sanctions on ExxonMobil cannot be determined at this time and continues under evaluation.

 

In accordance with a nationalization decree issued by Venezuela’s president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project.  The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would “directly assume the activities” carried out by the joint venture.  ExxonMobil refused to accede to the terms proffered by the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project.  ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.

 

On September 6, 2007, affiliates of ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) invoking ICSID jurisdiction under Venezuela’s Investment Law and the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID Tribunal issued a decision on June 10, 2010, finding that it had jurisdiction to proceed on the basis of the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID arbitration proceeding is continuing and a hearing on the merits was held in February 2012.  At this time, the net impact of these matters on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.

 

An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award.  The Contractors have appealed that judgment. In June 2013, the Contractors filed a lawsuit against NNPC in the Nigerian federal high court in order to preserve their ability to seek enforcement of the PSC in the courts if necessary. At this time, the net impact of this matter on the Corporation's consolidated financial results cannot be reasonably estimated. However, regardless of the outcome of enforcement proceedings, the Corporation does not expect the proceedings to have a material effect upon the Corporation's operations or financial condition. 


9

 


 

 

3.     Other Comprehensive Income Information

 

  

  

  

  

  

  

Cumulative

  

  

Post-

  

  

  

  

  

  

  

  

  

  

Foreign

  

  

retirement

  

  

Unrealized

  

  

  

  

  

  

  

Exchange

  

  

Benefits

  

  

Change in

  

  

ExxonMobil Share of Accumulated Other

  

  

Translation

  

  

Reserves

  

  

Stock

  

  

Comprehensive Income

  

  

Adjustment

  

  

Adjustment

  

  

Investments

Total

  

  

  

  

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Balance as of December 31, 2012

  

  

2,410 

  

  

(14,594)

  

  

 - 

(12,184)

  

Current period change excluding amounts reclassified

  

  

  

  

  

  

  

  

  

  

  

  

from accumulated other comprehensive income

  

  

(3,214)

  

  

152 

  

  

 - 

(3,062)

  

Amounts reclassified from accumulated other

  

  

  

  

  

  

  

  

  

  

  

  

comprehensive income

  

  

 - 

  

  

865 

  

  

 - 

865 

  

Total change in accumulated other comprehensive income

  

  

(3,214)

  

  

1,017 

  

  

 - 

(2,197)

  

Balance as of June 30, 2013

  

  

(804)

  

  

(13,577)

  

  

 - 

(14,381)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Balance as of December 31, 2013

  

  

(846)

  

  

(9,879)

  

  

 - 

(10,725)

  

Current period change excluding amounts reclassified

  

  

  

  

  

  

  

  

  

  

  

  

from accumulated other comprehensive income

  

  

849 

  

  

(168)

  

  

(36)

645 

  

Amounts reclassified from accumulated other

  

  

  

  

  

  

  

  

  

  

  

  

comprehensive income

  

  

 163 

  

  

606 

  

  

 - 

769 

  

Total change in accumulated other comprehensive income

  

  

1,012 

  

  

438 

  

  

(36)

1,414 

  

Balance as of June 30, 2014

  

  

166 

  

  

(9,441)

  

  

(36)

(9,311)

 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Three Months Ended

  

  

Six Months Ended

  

Amounts Reclassified Out of Accumulated Other

  

  

June 30,

  

  

June 30,

  

Comprehensive Income - Before-tax Income/(Expense)

  

  

2014 

  

  

2013 

  

  

2014 

  

  

2013 

  

  

  

  

  

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Foreign exchange translation gain/(loss) included in net income

  

  

  

  

  

  

  

  

  

  

  

  

(Statement of Income line: Other income)

 (81) 

  

  

 - 

  

  

 (163) 

  

  

 - 

  

Amortization and settlement of postretirement benefits reserves

  

  

  

  

  

  

  

  

  

  

  

  

adjustment included in net periodic benefit costs (1)

(434)

  

  

(659)

  

  

 (885) 

  

  

(1,303)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(1)     These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 5 – Pension and Other Postretirement Benefits for additional details.)

 

 

  

  

  

  

  

  

Three Months Ended

  

  

Six Months Ended

  

Income Tax (Expense)/Credit For

  

  

June 30,

  

  

June 30,

  

Components of Other Comprehensive Income

  

  

2014 

  

  

2013 

  

  

2014 

  

  

2013 

  

  

  

  

  

(millions of dollars)

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Foreign exchange translation adjustment

  

  

 61 

  

  

 79 

  

  

 29 

  

  

 116 

  

Postretirement benefits reserves adjustment

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(excluding amortization)

  

  

 27 

  

  

 (38) 

  

  

 77 

  

  

 (57) 

  

Amortization and settlement of postretirement benefits reserves

  

  

  

  

  

  

  

  

  

  

  

  

  

adjustment included in net periodic benefit costs

  

  

 (121) 

  

  

 (205) 

  

  

 (256) 

  

  

 (405) 

  

Unrealized change in fair value of stock investments

  

 (10) 

  

  

 - 

  

  

 19 

  

  

 - 

  

Total

  

  

 (43) 

  

  

 (164) 

  

  

 (131) 

  

  

 (346) 


10

 


 

 

4.     Earnings Per Share

 

  

  

  

  

  

Three Months Ended

  

  

Six Months Ended

  

  

  

  

  

June 30,

  

  

June 30,

  

  

  

  

  

2014 

  

  

2013 

  

  

2014 

  

  

2013 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per common share

  

  

  

  

  

  

  

  

  

  

  

  

Net income attributable to ExxonMobil (millions of dollars)

  

8,780 

  

  

6,860 

  

  

17,880 

  

  

16,360 

  

    

  

  

  

  

  

  

  

  

  

  

  

  

Weighted average number of common shares  

  

  

  

  

  

  

  

  

  

  

  

  

  

outstanding (millions of shares)

  

4,297 

  

  

4,433 

  

  

4,312 

  

  

4,459 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Earnings per common share (dollars) (1)

  

2.05 

  

  

1.55 

  

  

4.15 

  

  

3.67 

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

(1)  The calculation of earnings per common share and earnings per common share – assuming dilution are the same in each period shown.

 

5.     Pension and Other Postretirement Benefits

 

  

  

  

  

  

  

  

Three Months Ended

  

  

Six Months Ended

  

  

  

  

  

  

  

June 30,

  

  

June 30,

  

  

  

  

  

  

  

2014 

  

  

2013 

  

  

2014 

  

  

2013 

  

  

  

  

  

  

(millions of dollars)

  

Components of net benefit cost

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Pension Benefits - U.S.  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

  

Service cost

  

  

182 

  

  

188 

  

  

359 

  

  

375 

  

  

  

Interest cost

  

  

201