Attached files

file filename
EX-31.2 - CERTIFICATION (PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(A)) BY PRINCIPAL FINANCIAL OFFICER - EXXON MOBIL CORPxomexhibit312.htm
EX-32.1 - SECTION 1350 CERTIFICATION (PURSUANT TO SARBANES-OXLEY SECTION 906) BY CHIEF EXECUTIVE OFFICER - EXXON MOBIL CORPxomexhibit321.htm
EX-32.3 - SECTION 1350 CERTIFICATION (PURSUANT TO SARBANES-OXLEY SECTION 906) BY PRINCIPAL ACCOUNTING OFFICER - EXXON MOBIL CORPxomexhibit323.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-31.3 - CERTIFICATION (PURSUANT TO SECURITIES EXCHANGE ACT RULE 13A-14(A)) BY PRINCIPAL ACCOUNTING OFFICER - EXXON MOBIL CORPxomexhibit313.htm

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2015

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   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

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   

 

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, 2015

Common stock, without par value

 

 4,162,938,512  

  

 


 

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2015

 

TABLE OF CONTENTS

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

Item 1.       Financial Statements

 

 

     Condensed Consolidated Statement of Income

Three and nine months ended September 30, 2015 and 2014

 

3

     Condensed Consolidated Statement of Comprehensive Income

Three and nine months ended September 30, 2015 and 2014

 

4

     Condensed Consolidated Balance Sheet

As of September 30, 2015 and December 31, 2014

5

 

 

     Condensed Consolidated Statement of Cash Flows

          Nine months ended September 30, 2015 and 2014

 

6

     Condensed Consolidated Statement of Changes in Equity

          Nine months ended September 30, 2015 and 2014

 

7

     Notes to Condensed Consolidated Financial Statements

 

8

Item 2.       Management's Discussion and Analysis of Financial

                     Condition and Results of Operations

 

14

Item 3.       Quantitative and Qualitative Disclosures About Market Risk

 

22

Item 4.       Controls and Procedures

 

22

 

 

PART II.  OTHER INFORMATION

 

Item 1.       Legal Proceedings

 

23

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

 

24

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,

 

 

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

Revenues and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue (1) 

 

 

65,679

 

 

103,206

 

 

201,797

 

 

310,237

 

Income from equity affiliates

 

 

1,783

 

 

3,211

 

 

6,125

 

 

10,631

 

Other income

 

 

(118)

 

 

713

 

 

1,153

 

 

3,795

 

 

Total revenues and other income

 

 

67,344

 

 

107,130

 

 

209,075

 

 

324,663

Costs and other deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

 

32,276

 

 

60,068

 

 

102,286

 

 

180,144

 

Production and manufacturing expenses

 

 

8,614

 

 

9,951

 

 

26,579

 

 

30,517

 

Selling, general and administrative expenses

 

 

2,967

 

 

3,169

 

 

8,511

 

 

9,470

 

Depreciation and depletion

 

 

4,542

 

 

4,362

 

 

13,293

 

 

12,839

 

Exploration expenses, including dry holes

 

 

324

 

 

319

 

 

1,005

 

 

1,132

 

Interest expense

 

 

78

 

 

88

 

 

251

 

 

218

 

Sales-based taxes (1) 

 

 

5,813

 

 

7,519

 

 

17,308

 

 

22,806

 

Other taxes and duties

 

 

6,981

 

 

8,244

 

 

20,504

 

 

24,749

 

 

Total costs and other deductions

 

 

61,595

 

 

93,720

 

 

189,737

 

 

281,875

Income before income taxes

 

 

5,749

 

 

13,410

 

 

19,338

 

 

42,788

 

Income taxes

 

 

1,365

 

 

5,064

 

 

5,617

 

 

15,955

Net income including noncontrolling interests

 

 

4,384

 

 

8,346

 

 

13,721

 

 

26,833

 

Net income attributable to noncontrolling interests

 

 

144

 

 

276

 

 

351

 

 

883

Net income attributable to ExxonMobil

 

 

4,240

 

 

8,070

 

 

13,370

 

 

25,950

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) 

 

 

1.01

 

 

1.89

 

 

3.18

 

 

6.04

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars) 

 

 

1.01

 

 

1.89

 

 

3.18

 

 

6.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share (dollars) 

 

 

0.73

 

 

0.69

 

 

2.15

 

 

2.01

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

operating revenue

 

 

5,813

 

 

7,519

 

 

17,308

 

 

22,806



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

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

4,384

 

 

8,346

 

 

13,721

 

 

26,833

Other comprehensive income (net of income taxes)

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

(4,023)

 

 

(3,828)

 

 

(8,379)

 

 

(2,986)

 

Adjustment for foreign exchange translation (gain)/loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 included in net income

 

 

 -  

 

 

 -  

 

 

 -  

 

 

163

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

484

 

 

372

 

 

1,111

 

 

196

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

367

 

 

289

 

 

1,075

 

 

918

 

Unrealized change in fair value of stock investments

 

 

7

 

 

(21)

 

 

26

 

 

(57)

 

Realized (gain)/loss from stock investments included in

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

net income

 

 

3

 

 

 -  

 

 

15

 

 

 -  

 

 

Total other comprehensive income

 

 

(3,162)

 

 

(3,188)

 

 

(6,152)

 

 

(1,766)

Comprehensive income including noncontrolling interests

 

 

1,222

 

 

5,158

 

 

7,569

 

 

25,067

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

noncontrolling interests

 

 

(175)

 

 

(27)

 

 

(422)

 

 

588

Comprehensive income attributable to ExxonMobil

 

 

1,397

 

 

5,185

 

 

7,991

 

 

24,479



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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

 

Dec. 31,

 

 

 

 

 

 

 

2015

 

 

2014

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

4,296

 

 

4,616

 

 

 

Cash and cash equivalents – restricted

 

 

 -  

 

 

42

 

 

 

Notes and accounts receivable – net

 

 

22,157

 

 

28,009

 

 

 

Inventories

 

 

 

 

 

 

 

 

 

 

Crude oil, products and merchandise

 

 

12,249

 

 

12,384

 

 

 

 

Materials and supplies

 

 

4,335

 

 

4,294

 

 

 

Other current assets

 

 

4,197

 

 

3,565

 

 

 

 

Total current assets

 

 

47,234

 

 

52,910

 

 

Investments, advances and long-term receivables

 

 

34,315

 

 

35,239

 

 

Property, plant and equipment – net

 

 

250,583

 

 

252,668

 

 

Other assets, including intangibles – net

 

 

8,530

 

 

8,676

 

 

 

 

Total assets

 

 

340,662

 

 

349,493

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Notes and loans payable

 

 

14,473

 

 

17,468

 

 

 

Accounts payable and accrued liabilities

 

 

36,681

 

 

42,227

 

 

 

Income taxes payable

 

 

3,674

 

 

4,938

 

 

 

 

Total current liabilities

 

 

54,828

 

 

64,633

 

 

Long-term debt

 

 

19,839

 

 

11,653

 

 

Postretirement benefits reserves

 

 

24,422

 

 

25,802

 

 

Deferred income tax liabilities

 

 

38,210

 

 

39,230

 

 

Long-term obligations to equity companies

 

 

5,524

 

 

5,325

 

 

Other long-term obligations

 

 

21,000

 

 

21,786

 

 

 

 

Total liabilities

 

 

163,823

 

 

168,429

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock without par value

 

 

 

 

 

 

 

 

 

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

 

 

11,443

 

 

10,792

 

 

Earnings reinvested

 

 

412,718

 

 

408,384

 

 

Accumulated other comprehensive income

 

 

(24,336)

 

 

(18,957)

 

 

Common stock held in treasury

 

 

 

 

 

 

 

 

 

(3,856 million shares at September 30, 2015 and

 

 

 

 

 

 

 

 

   3,818 million shares at December 31, 2014)

 

 

(229,102)

 

 

(225,820)

 

 

 

 

ExxonMobil share of equity

 

 

170,723

 

 

174,399

 

 

Noncontrolling interests

 

 

6,116

 

 

6,665

 

 

 

 

Total equity

 

 

176,839

 

 

181,064

 

 

 

 

Total liabilities and equity

 

 

340,662

 

 

349,493

 



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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

2015

 

 

2014

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

13,721

 

 

26,833

 

 

Depreciation and depletion

 

 

13,293

 

 

12,839

 

 

Changes in operational working capital, excluding cash and debt

 

 

(1,037)

 

 

(460)

 

 

All other items – net

 

 

(13)

 

 

(1,511)

 

 

 

 

Net cash provided by operating activities

 

 

25,964

 

 

37,701

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(20,354)

 

 

(24,068)

 

 

Proceeds associated with sales of subsidiaries, property, plant and

 

 

 

 

 

 

 

 

 

equipment, and sales and returns of investments

 

 

1,604

 

 

3,794

 

 

Additional investments and advances

 

 

(412)

 

 

(1,269)

 

 

Other investing activities – net

 

 

662

 

 

3,415

 

 

 

 

Net cash used in investing activities

 

 

(18,500)

 

 

(18,128)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Additions to long-term debt

 

 

8,028

 

 

5,503

 

 

Reductions in long-term debt

 

 

(18)

 

 

 -  

 

 

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

 

 

(475)

 

 

(514)

 

 

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

 

 

(2,537)

 

 

(5,413)

 

 

Cash dividends to ExxonMobil shareholders

 

 

(9,036)

 

 

(8,644)

 

 

Cash dividends to noncontrolling interests

 

 

(127)

 

 

(172)

 

 

Tax benefits related to stock-based awards

 

 

 -  

 

 

10

 

 

Common stock acquired

 

 

(3,285)

 

 

(9,865)

 

 

Common stock sold

 

 

 -  

 

 

10

 

 

 

 

Net cash used in financing activities

 

 

(7,450)

 

 

(19,085)

 

Effects of exchange rate changes on cash

 

 

(334)

 

 

(170)

 

Increase/(decrease) in cash and cash equivalents

 

 

(320)

 

 

318

 

Cash and cash equivalents at beginning of period

 

 

4,616

 

 

4,644

 

Cash and cash equivalents at end of period

 

 

4,296

 

 

4,962

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

 

Income taxes paid

 

 

5,594

 

 

14,338

 

 

Cash interest paid

 

 

459

 

 

295

 



2015 Non-Cash Transactions

An asset exchange resulted in value received of approximately $500 million including $100 million in cash. The non-cash portion was not included in the “Proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments” or the “All other items-net” lines on the Statement of Cash Flows.

 

Capital leases of approximately $800 million were not included in “Additions to long-term debt” or “Additions to property, plant and equipment” lines on the Statement of Cash Flows.

 

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


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, 2013

 

 

10,077

 

 

387,432

 

 

(10,725)

 

 

(212,781)

 

 

174,003

 

 

6,492

 

 

180,495

 

Amortization of stock-based awards

 

 

588

 

 

 -  

 

 

 -  

 

 

 -  

 

 

588

 

 

 -  

 

 

588

 

Tax benefits related to stock-based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

awards

 

 

10

 

 

 -  

 

 

 -  

 

 

 -  

 

 

10

 

 

 -  

 

 

10

 

Other

 

 

6

 

 

 -  

 

 

 -  

 

 

 -  

 

 

6

 

 

 -  

 

 

6

 

Net income for the period

 

 

 -  

 

 

25,950

 

 

 -  

 

 

 -  

 

 

25,950

 

 

883

 

 

26,833

 

Dividends – common shares

 

 

 -  

 

 

(8,644)

 

 

 -  

 

 

 -  

 

 

(8,644)

 

 

(172)

 

 

(8,816)

 

Other comprehensive income

 

 

 -  

 

 

 -  

 

 

(1,471)

 

 

 -  

 

 

(1,471)

 

 

(295)

 

 

(1,766)

 

Acquisitions, at cost

 

 

 -  

 

 

 -  

 

 

 -  

 

 

(9,865)

 

 

(9,865)

 

 

 -  

 

 

(9,865)

 

Dispositions

 

 

 -  

 

 

 -  

 

 

 -  

 

 

10

 

 

10

 

 

 -  

 

 

10

Balance as of September 30, 2014

 

 

10,681

 

 

404,738

 

 

(12,196)

 

 

(222,636)

 

 

180,587

 

 

6,908

 

 

187,495

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2014

 

 

10,792

 

 

408,384

 

 

(18,957)

 

 

(225,820)

 

 

174,399

 

 

6,665

 

 

181,064

 

Amortization of stock-based awards

 

 

647

 

 

 -  

 

 

 -  

 

 

 -  

 

 

647

 

 

 -  

 

 

647

 

Tax benefits related to stock-based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

awards

 

 

9

 

 

 -  

 

 

 -  

 

 

 -  

 

 

9

 

 

 -  

 

 

9

 

Other

 

 

(5)

 

 

 -  

 

 

 -  

 

 

 -  

 

 

(5)

 

 

 -  

 

 

(5)

 

Net income for the period

 

 

 -  

 

 

13,370

 

 

 -  

 

 

 -  

 

 

13,370

 

 

351

 

 

13,721

 

Dividends – common shares

 

 

 -  

 

 

(9,036)

 

 

 -  

 

 

 -  

 

 

(9,036)

 

 

(127)

 

 

(9,163)

 

Other comprehensive income

 

 

 -  

 

 

 -  

 

 

(5,379)

 

 

 -  

 

 

(5,379)

 

 

(773)

 

 

(6,152)

 

Acquisitions, at cost

 

 

 -  

 

 

 -  

 

 

 -  

 

 

(3,285)

 

 

(3,285)

 

 

 -  

 

 

(3,285)

 

Dispositions

 

 

 -  

 

 

 -  

 

 

 -  

 

 

3

 

 

3

 

 

 -  

 

 

3

Balance as of September 30, 2015

 

 

11,443

 

 

412,718

 

 

(24,336)

 

 

(229,102)

 

 

170,723

 

 

6,116

 

 

176,839

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2015

 

 

 

 

Nine Months Ended September 30, 2014

 

 

 

 

 

 

 

 

Held in

 

 

 

 

 

 

 

 

 

 

Held in

 

 

 

 

Common Stock Share Activity

 

Issued

 

Treasury

 

Outstanding

 

 

 

 

Issued

 

Treasury

 

Outstanding

 

 

 

 

(millions of shares)

 

 

 

 

(millions of shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31

 

 

8,019

 

 

(3,818)

 

 

4,201

 

 

 

 

 

8,019

 

 

(3,684)

 

 

4,335

 

 

 

Acquisitions

 

 

 -  

 

 

(38)

 

 

(38)

 

 

 

 

 

 -  

 

 

(100)

 

 

(100)

 

 

 

Dispositions

 

 

 -  

 

 

 -  

 

 

 -  

 

 

 

 

 

 -  

 

 

 -  

 

 

 -  

 

Balance as of September 30

 

 

8,019

 

 

(3,856)

 

 

4,163

 

 

 

 

 

8,019

 

 

(3,784)

 

 

4,235



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 2014 Annual Report on Form 10-K. In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. Prior data has been reclassified in certain cases to conform to the current presentation basis.

 

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

 

2.     Recently Issued Accounting Standard

 

In May 2014, the Financial Accounting Standards Board issued a new standard, Revenue from Contracts with Customers. The standard establishes a single revenue recognition model for all contracts with customers, eliminates industry specific requirements, and expands disclosure requirements. The standard is required to be adopted beginning January 1, 2018. ExxonMobil is evaluating the standard and its effect on the Corporation’s financial statements. 

 

3.      Litigation and Other Contingencies

 

Litigation

 

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

 

Other Contingencies

 

The Corporation and certain of its consolidated subsidiaries were contingently liable at September 30, 2015, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

 

 

 

 

 

 

As of September 30, 2015

 

 

 

 

 

 

 

 

Equity

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Company

 

 

Third Party

 

 

 

 

 

 

 

 

 

 

 

Obligations (1) 

 

 

Obligations

 

 

Total

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

Guarantees

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-related

 

 

85

 

 

37

 

 

122

 

 

 

 

Other

 

 

2,665

 

 

4,546

 

 

7,211

 

 

 

 

 

Total

 

 

2,750

 

 

4,583

 

 

7,333

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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 September 30, 2015, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.

 

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

 

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

 

On September 6, 2007, affiliates of ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID). The ICSID Tribunal issued a decision on June 10, 2010, finding that it had jurisdiction to proceed on the basis of the Netherlands-Venezuela Bilateral Investment Treaty. On October 9, 2014, the ICSID Tribunal issued its final award finding in favor of the ExxonMobil affiliates and awarding $1.6 billion as of the date of expropriation, June 27, 2007, and interest from that date at 3.25% compounded annually until the date of payment in full. The Tribunal also noted that one of the Cerro Negro Project agreements provides a mechanism to prevent double recovery between the ICSID award and all or part of an earlier award of $908 million to an ExxonMobil affiliate, Mobil Cerro Negro, Ltd., against PdVSA and a PdVSA affiliate, PdVSA CN, in an arbitration under the rules of the International Chamber of Commerce.

 

On June 12, 2015, the Tribunal rejected in its entirety Venezuela’s October 23, 2014, application to revise the ICSID award. The Tribunal also lifted the associated stay of enforcement that had been entered upon the filing of the application to revise.

 

Still pending is Venezuela’s February 2, 2015, application to ICSID seeking annulment of the ICSID award. That application alleges that, in issuing the ICSID award, the Tribunal exceeded its powers, failed to state reasons on which the ICSID award was based, and departed from a fundamental rule of procedure. A separate stay of the ICSID award was entered following the filing of the annulment application. On July 7, 2015, the ICSID Committee considering the annulment application heard arguments from the parties on whether to lift the stay of the award associated with that application. On July 28, 2015, the Committee issued an order that would lift the stay of enforcement unless, within 30 days, Venezuela delivered a commitment to pay the award if the application to annul is denied. On September 17, 2015, the Committee ruled that Venezuela had complied with the requirement to submit a written commitment to pay the award and so left the stay of enforcement in place. A hearing on Venezuela’s application for annulment is scheduled for January 25-27, 2016.

 

The United States District Court for the Southern District of New York entered judgment on the ICSID award on October 10, 2014. Motions filed by Venezuela to vacate that judgment on procedural grounds and to modify the judgment by reducing the rate of interest to be paid on the ICSID award from the entry of the court’s judgment, until the date of payment, were denied on February 13, 2015, and March 4, 2015, respectively. On March 9, 2015, Venezuela filed a notice of appeal of the court’s actions on the two motions.

 

The District Court’s judgment on the ICSID award is currently stayed until such time as ICSID’s stay of the award entered following Venezuela’s filing of its application to annul has been lifted. The net impact of these matters on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.

  


9  


 

An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award. The Contractors appealed that judgment to the Court of Appeal, Abuja Judicial Division. In June 2013, the Contractors filed a lawsuit against NNPC in the Nigerian federal high court in order to preserve their ability to seek enforcement of the PSC in the courts if necessary. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. NNPC has moved to dismiss the lawsuit. Proceedings in the Southern District of New York are currently stayed. 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. 


10  


 

4.     Other Comprehensive Income Information

 

 

 

 

 

 

Cumulative

 

 

Post-

 

 

 

 

 

 

 

 

 

 

Foreign

 

 

retirement

 

 

Unrealized

 

 

 

 

 

 

 

Exchange

 

 

Benefits

 

 

Change in

 

 

ExxonMobil Share of Accumulated Other

 

 

Translation

 

 

Reserves

 

 

Stock

 

 

Comprehensive Income

 

 

Adjustment

 

 

Adjustment

 

 

Investments

Total

 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2013

 

 

(846)

 

 

(9,879)

 

 

 -  

(10,725)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

(2,637)

 

 

176

 

 

(57)

(2,518)

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

163

 

 

884

 

 

 -  

1,047

 

Total change in accumulated other comprehensive income

 

 

(2,474)

 

 

1,060

 

 

(57)

(1,471)

 

Balance as of September 30, 2014

 

 

(3,320)

 

 

(8,819)

 

 

(57)

(12,196)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2014

 

 

(5,952)

 

 

(12,945)

 

 

(60)

(18,957)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

(7,497)

 

 

1,036

 

 

26

(6,435)

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

 -  

 

 

1,041

 

 

15

1,056

 

Total change in accumulated other comprehensive income

 

 

(7,497)

 

 

2,077

 

 

41

(5,379)

 

Balance as of September 30, 2015

 

 

(13,449)

 

 

(10,868)

 

 

(19)

(24,336)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Amounts Reclassified Out of Accumulated Other

 

 

September 30,

 

 

September 30,

 

Comprehensive Income - Before-tax Income/(Expense)

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

(Statement of Income line: Other income)

 -  

 

 

 -  

 

 

 -  

 

 

(163)

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs (1) 

(534)

 

 

(430)

 

 

(1,552)

 

 

(1,315)

 

Realized change in fair value of stock investments included in

 

 

 

 

 

 

 

 

 

 

 

 

 

net income (Statement of Income line: Other income)

 

 

(5)

 

 

 -  

 

 

(23)

 

 

 -  

 

(1)   These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 6 – Pension and Other Postretirement Benefits for additional details.)

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Income Tax (Expense)/Credit For

 

 

September 30,

 

 

September 30,

 

Components of Other Comprehensive Income

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

82

 

 

70

 

 

147

 

 

99

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

(225)

 

 

(138)

 

 

(527)

 

 

(61)

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

(167)

 

 

(141)

 

 

(477)

 

 

(397)

 

Unrealized change in fair value of stock investments

 

(3)

 

 

11

 

 

(14)

 

 

30

 

Realized change in fair value of stock investments

 

 

 

 

 

 

 

 

 

 

 

 

 

included in net income

 

 

(2)

 

 

 -  

 

 

(8)

 

 

 -  

 

Total

 

 

(315)

 

 

(198)

 

 

(879)

 

 

(329)


11  


 

5.     Earnings Per Share

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

4,240

 

 

8,070

 

 

13,370

 

 

25,950

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding (millions of shares)

 

4,190

 

 

4,267

 

 

4,201

 

 

4,297

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) (1) 

 

1.01

 

 

1.89

 

 

3.18

 

 

6.04

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

6.     Pension and Other Postretirement Benefits

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

 

2015

 

 

2014

 

 

2015

 

 

2014

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(millions of dollars)

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

231

 

 

156

 

 

625

 

 

515

 

 

 

Interest cost

 

 

196

 

 

202

 

 

589

 

 

605

 

 

 

Expected return on plan assets

 

 

(208)

 

 

(200)

 

 

(622)

 

 

(600)

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

137

 

 

105

 

 

411

 

 

313

 

 

 

Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

curtailment/settlement cost

 

 

117

 

 

113

 

 

351

 

 

338

 

 

 

Net benefit cost

 

 

473

 

 

376

 

 

1,354

 

 

1,171

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

170

 

 

144

 

 

518

 

 

448

 

 

 

Interest cost

 

 

206

 

 

285

 

 

636

 

 

859

 

 

 

Expected return on plan assets

 

 

(268)

 

 

(300)

 

 

(819)

 

 

(899)