View:
FORM 10-Q/A
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For The Quarterly Period Ended June 30, 1994
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 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)
225 E. John W. Carpenter Freeway, Irving, Texas 75062-2298
___________________________________________________________
(Address of principal executive offices) (Zip Code)
(214) 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 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 30,1994
_______________________________ ________________________________
Common stock, without par value 1,241,414,948
EXXON CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1994
INDEX
PART I. FINANCIAL INFORMATION
Page
Number
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Three and six months ended June 30, 1994 and 1993
Condensed Consolidated Balance Sheet 4
As of June 30, 1994 and December 31, 1993
Condensed Consolidated Statement of Cash Flows 5
Six months ended June 30, 1994 and 1993
Notes to Condensed Consolidated Financial Statements 5
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6-10
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 11
Item 4. Submission of Matters to a Vote of Security Holders 12
Item 6. Exhibits and Reports on Form 8-K 13
Signature 14
-2-
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXXON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(millions of dollars)
Three Months Ended Six Months Ended
June 30, June 30,
__________________ _________________
1994 1993 1994 1993
REVENUE _______ _______ _______ ______
Sales and other operating
revenue, including excise
taxes $27,102 $27,604 $52,726 $54,501
Earnings from equity interests
and other revenue 217 348 557 713
______ ______ ______ ______
Total revenue 27,319 27,952 53,283 55,214
COSTS AND OTHER DEDUCTIONS ______ ______ ______ ______
Crude oil and product purchases 11,488 11,713 21,743 23,549
Operating expenses 3,144 3,196 6,214 6,265
Selling, general and
administrative expenses 1,735 1,762 3,351 3,370
Depreciation and depletion 1,233 1,236 2,522 2,430
Exploration expenses, including
dry holes 135 147 273 276
Interest expense 107 190 408 341
Excise taxes 2,856 2,902 5,597 5,660
Other taxes and duties 5,146 4,984 9,938 9,566
Income applicable to minority
and preferred interests 38 58 92 123
______ ______ ______ ______
Total costs and other
deductions 25,882 26,188 50,138 51,580
______ ______ ______ ______
INCOME BEFORE INCOME TAXES 1,437 1,764 3,145 3,634
Income taxes 552 529 1,100 1,214
______ ______ ______ ______
NET INCOME $ 885 $ 1,235 $ 2,045 $ 2,420
====== ====== ====== ======
Net income per common share*, $ 0.70 $ 0.98 $ 1.62 $ 1.92
Dividends per common share $ 0.72 $ 0.72 $ 1.44 $ 1.44
Average number common shares
outstanding (millions) 1,241.6 1,241.9 1,241.7 1,241.8
* Computed as income less dividends on preferred stock divided by
the average number of common shares outstanding.
-3-
EXXON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars)
June 30, Dec. 31,
1994 1993
_______ _______
ASSETS
Current assets
Cash and cash equivalents $ 1,879 $ 983
Other marketable securities 242 669
Notes and accounts receivable - net 7,203 6,860
Inventories
Crude oil, products and merchandise 4,631 4,616
Materials and supplies 838 856
Prepaid taxes and expenses 1,193 875
_______ _______
Total current assets 15,986 14,859
Property, plant and equipment - net 62,443 61,962
Investments and other assets 7,673 7,324
_______ _______
TOTAL ASSETS $86,102 $84,145
======= =======
LIABILITIES
Current liabilities
Notes and loans payable $ 4,116 $ 4,109
Accounts payable and accrued liabilities 12,729 12,122
Income taxes payable 2,044 2,359
_______ _______
Total current liabilities 18,889 18,590
Long-term debt 8,754 8,506
Annuity reserves, deferred credits and
other liabilities 22,598 22,257
_______ _______
TOTAL LIABILITIES 50,241 49,353
_______ _______
SHAREHOLDERS' EQUITY
Preferred stock, without par value:
Authorized:200 million shares
Issued: 16 million shares(Convertible,Class A)
Outstanding:11 million shares at June 30,1994 612
13 million shares at Dec. 31,1993 668
Guaranteed LESOP obligation (614) (716)
Common stock, without par value:
Authorized: 2,000 million shares
Issued: 1,813 million shares 2,822 2,822
Earnings reinvested 49,606 49,365
Cumulative foreign exchange translation
adjustment 459 (370)
Common stock held in treasury:
571 million shares at June 30, 1994 (17,024)
571 million shares at Dec. 31, 1993 (16,977)
_______ _______
TOTAL SHAREHOLDERS' EQUITY 35,861 34,792
_______ _______
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $86,102 $84,145
======= =======
The number of shares of common stock issued and outstanding at
June 30, 1994 and December 31, 1993 were 1,241,414,948 and
1,241,737,220, respectively.
-4-
EXXON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Six Months Ended
____June 30,___
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES ______ _____
Net income $2,045 $2,420
Depreciation and depletion 2,522 2,430
Changes in operational working capital,
excluding cash and debt (64) 145
All other items - net (85) 305
______ ______
Net Cash Provided By Operating Activities 4,418 5,300
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions and additions to property,
plant and equipment (2,998) (3,126)
Sales of subsidiaries and property,
plant and equipment 667 443
Other investing activities - net 653 142
______ ______
Net Cash Used In Investing Activities (1,678) (2,541)
______ ______
NET CASH GENERATION BEFORE FINANCING ACTIVITIES 2,740 2,759
______ ______
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt 735 374
Reductions in long-term debt (301) (116)
Additions/(reductions) in short-term debt - net (121) 29
Cash dividends to Exxon shareholders (1,812) (1,816)
Cash dividends to minority interests (301) (143)
Additions/(reductions) to minority interests and
sales/(redemptions) of affiliate preferred stock 40 (477)
Acquisitions of Exxon shares - net (103) (108)
______ _____
Net Cash Used In Financing Activities (1,863) (2,257)
______ ______
Effects Of Exchange Rate Changes On Cash 19 (13)
______ ______
Increase/(Decrease) In Cash And Cash Equivalents 896 489
Cash And Cash Equivalents At Beginning Of Period 983 898
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,879 $1,387
====== ======
SUPPLEMENTAL DISCLOSURES
Income taxes paid $1,272 $1,131
Cash interest paid $ 330 $ 362
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
These condensed consolidated financial statements should be read in the
context of the consolidated financial statements and notes thereto filed
with the S.E.C. in the corporation's 1993 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.
-5-
EXXON CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FUNCTIONAL EARNINGS SUMMARY Second Quarter First Six Months
_____________ _________________
1994 1993 1994 1993
Petroleum and natural gas ____ ____ ____ ____
Exploration and production (millions of dollars)
United States $ 206 $ 262 $ 451 $ 490
Non-U.S. 397 499 987 1,167
Refining and marketing
United States (1) 113 38 134
Non-U.S. 202 333 551 610
_____ _____ ______ _____
Total petroleum and natural gas 804 1,207 2,027 2,401
Chemicals
United States 110 50 202 137
Non-U.S. 80 36 137 72
Other operations 64 48 122 96
Corporate and financing (173) (106) (443) (286)
_____ _____ _____ _____
NET INCOME $ 885 $ 1,235 $2,045 $2,420
===== ===== ===== =====
SECOND QUARTER 1994 COMPARED WITH SECOND QUARTER 1993
Exxon Corporation estimated second quarter 1994 net income at $885 million,
equal to $0.70 per share. Comparable second quarter 1993 earnings were
$1,025 million, or $0.81 per share, excluding $210 million of tax credits
and gains on asset sales.
Exxon's second quarter results benefited from increasing production and
sales volumes in all segments of the business. However, both upstream and
downstream petroleum earnings experienced declines relative to last year
because of lower average, but rising, crude oil prices during the quarter.
Earnings from exploration and production were lower because the depressed
world crude oil market kept average crude oil realizations below last
year's level. At the same time, refining and marketing earnings were also
reduced because rising crude oil costs during the quarter were not matched
by equivalent increases in world market prices for refined products.
Crude production increased as a result of new developments in the North Sea
and Alaska. Natural gas sales were higher in the U.S., Europe and the Far
East. Worldwide petroleum product sales increased as a result of higher
demand for clean products and specialties in the U.S., Europe and the Far
East.
Chemical sales and margins both improved in the second quarter. As a
result, Chemical earnings in the quarter more than doubled from a
year ago, and have now improved for four consecutive quarters.
Exxon continued to emphasize reductions in operating costs. Additional
steps to further streamline operations in the U.S. and Canada were announced.
-6-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
OTHER COMMENTS ON SECOND QUARTER COMPARISON
SECOND QUARTER 1994 COMPARED WITH SECOND QUARTER 1993 (Continued)
As discussed in Part II, Item 1 of this Form 10-Q, a number of lawsuits,
including class actions, relating to the Valdez accident have been brought
against the corporation and certain of its subsidiaries. In phase II-A of
the federal civil litigation currently being tried in the United States
District Court for the District of Alaska, the jury returned a verdict on
August 11, 1994 finding that fisher plaintiffs were damaged in the amount
of $286.8 million. No charge was taken in second quarter 1994 earnings
as a result of this award. Because this award is subject to a number of
adjustments by the court, including a reduction to reflect payments
already made by the corporation to many of these plaintiffs,and possibly
to additional legal proceedings, it is not possible to estimate what the
ultimate earnings impact will be.
The final cost to the corporation from this federal civil litigation and
the other pending lawsuits is not possible to predict; however it is
believed the final outcome is unlikely to have a materially adverse
effect upon the corporation's operations, financial condition or liquidity
OTHER COMMENTS ON SECOND QUARTER COMPARISON
During the second quarter 1994, worldwide production earnings were
negatively impacted by crude prices which were on average more than $2.00
per barrel below the prior year. However, natural gas earnings improved
as new developments and higher demand supported growth in production.
Crude production in the second quarter 1994 was 1,712 kbd (thousand barrels
per day) up from 1,649 kbd the prior year. The increase resulted from
higher production levels in the North Sea and Alaska. Worldwide natural
gas production of 5,394 mcfd (million cubic feet per day) increased 15
percent compared to the second quarter 1993. Second quarter earnings from
U.S. exploration and production operations were $206 million, compared
with $262 million in 1993. Earnings from exploration and production
operations outside the U.S. totaled $397 million, compared with $499
million in the second quarter of last year.
Petroleum product margins were negatively affected this year as product
pricesdid not keep pace with increases in crude supply costs, while in the
second quarter 1993 petroleum product margins benefited from declining
crude costs. Earnings from worldwide refining and marketing operations
totaled $201 million in the second quarter 1994 compared with $446 million
in the second quarter 1993. Worldwide petroleum product sales volumes
of 4,942 kbd rose by 2 percent compared to the second quarter of last year
Sales increases were in clean products.
Second quarter worldwide chemical earnings of $190 million more than
doubled last year's level. Earnings benefited from increased sales,
improved margins and lower operating costs. Product sales volumes of
3,304 kt (thousand tons) were up 4 percent over last year's quarter.
-7-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
OTHER COMMENTS ON SECOND QUARTER COMPARISON (Continued)
Earnings from other operating segments totaled $64 million, up from $48
million in the second quarter 1993. Copper prices and coal production
were higher. Corporate and financing expenses of $173 million compared
with $106 million in the second quarter of last year, which included a
$104 million benefit from non-recurring credits. Net income in the
second quarter of 1993 included credits totaling $210 million from tax
rate changes and asset dispositions.
Revenue for the second quarter totaled $27,319 million, compared with
$27,952 million in the second quarter 1993. Capital and exploration
expenditures of $1,959 million compared to $2,138 million in the second
quarter 1993.
During the second quarter of 1994, Exxon purchased 1.0 million shares
of its stock for the treasury at a cost of $61 million.
FIRST SIX MONTHS 1994 COMPARED WITH FIRST SIX MONTHS 1993
Net income of $2,045 million in the first half of 1994 compared with
$2,420 million in 1993. Net income in 1993 included $257 million of
net special credits, while the first six months of 1994 included $66
million of tax related credits.
Worldwide crude prices were weaker in 1994, down over $3.00 per barrel
on average from 1993. Earnings from U.S. exploration and production
operations were $451 million, compared with $490 million in the first
half of last year. Lower operating costs and improvements in U.S.
natural gas market conditions, including higher prices and sales volumes,
provided some offset to lower crude prices. Earnings from exploration and
production operations outside the U.S. were $987 million in 1994, compared
with $1,167 million the prior year.
Worldwide crude production of 1,728 kbd in 1994 was up from 1,662 kbd in
1993,principally as a result of increased production in the North Sea and
Alaska. Natural gas production of 6,331 mcfd rose by 454 mcfd versus 1993
largely due to increased production from new developments in the U.S. and
the Far East and improved demand in Europe.
As a result of the rise in crude costs in the second quarter of 1994,
petroleum product margins for the first half of this year were on average
weaker than during the first half of 1993. In addition, an increase in
scheduled refinery maintenance activities this year reduced refining
earnings. Worldwide refining and marketing earnings for the first half of
1994 totaled $589 million versus $744 million last year. Petroleum product
sales volumes of 4,951 kbd rose from 4,850 kbd in the first half of last
year, with increases in most major markets including the U.S., Canada,
Europe, Latin America, and the Far East.
Earnings from worldwide chemical operations totaled $339 million in 1994,
an increase of over 60 percent from the first six months of last year.
Margins in 1994 were higher than the previous year and sales volumes
totaled 6,572 kt, up from 6,392 kt in 1993.
-8-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
FIRST SIX MONTHS 1994 COMPARED WITH FIRST SIX MONTHS 1993 (Continued)
Other operations earned $122 million in the first half of 1994, up from
$96 million in 1993, primarily as a result of higher copper prices
and coal production.
Corporate and financing charges of $443 million in the first half of
1994, compared with $286 million in 1993 which included $131 million
of tax credits.
Net cash generation before financing activities was $2,740 million in
the first half of 1994 versus $2,759 million in the same period last year.
Operating activities provided net cash of $4,418 million, a decrease of
$882 million from 1993's first half, due mainly to lower net income and
changes in operational working capital. Investing activities used net
cash of $1,678 million, or $863 million less than a year ago, primarily
due to higher proceeds from asset dispositions.
Net cash used in financing activities was $1,863 million in the first
half of 1994 versus $2,257 million for the year-ago period. The
decrease of $394 million mainly reflects the absence of the redemption
of preferred securities by an affiliate in 1993. Net outlays for
treasury share acquisitions were $103 million versus $108 million in
the same period last year. During the first half of 1994, a total of
2.3 million shares were acquired at a cost of $147 million. Purchases
are made in the open market and through negotiated transactions.
Purchases may be discontinued at any time.
Capital and exploration expenditures totaled $3,536 million in this year's
first half, down $178 million from a year ago, reflecting in part the
completion of several major development projects in 1993.
Total debt of $12.9 billion at June 30, 1994 was $0.3 billion higher than
the level at year-end 1993. The corporation's debt to capital ratio was
25.3 percent at the end of the first six months of 1994, unchanged from
year-end 1993.
Over the twelve months ended June 30, 1994, return on average shareholders'
equity was 14.0 percent. Return on average capital employed, which
includes debt, was 11.1 percent over the same time period.
Although the corporation accesses financial markets from time to time,
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.
-9-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Concluded)
SPECIAL ITEMS
_____________
Second Quarter First Six Months
______________ ________________
1994 1993 1994 1993
(millions of dollars)
EXPLORATION & PRODUCTION
Non-U.S.
Primarily asset dispositions - - - $20
Primarily tax related - $82 $66 82
REFINING AND MARKETING
United States
Primarily asset dispositions - 43 - 43
Non-U.S.
Primarily asset dispositions - (32) - (32)
OTHER OPERATIONS
Primarily tax related - 13 - 13
CORPORATE & FINANCING
Primarily tax related - 104 - 131
___ ____ ____ ____
TOTAL - $210 $ 66 $257
=== ==== ==== ====
-10-
PART II - OTHER INFORMATION
EXXON CORPORATION
FOR THE QUARTER ENDED JUNE 30, 1994
Item 1. Legal Proceedings
______ _________________
As previously reported, a number of lawsuits, including class actions, have
been brought in various courts against Exxon Corporation and certain of its
subsidiaries relating to the release of crude oil from the tanker Exxon
Valdez in 1989. Most of these lawsuits seek unspecified compensatory and
punitive damages; several lawsuits seek damages in varying specified
amounts. The claims of many individuals have been dismissed or settled.
Civil trial in the United States District Court for the District of
Alaska for most of the remaining actions commenced on May 2, 1994.
On June 13, 1994, at the conclusion of the first of four phases of
the trial, the jury determined that the defendants acted recklessly
and therefore could be liable for punitive damages. On August 11,
1994, the jury returned a verdict in phase II-A of the trial finding
that fisher plaintiffs were damaged in the amount of $286.8 million.
This award is subject to a number of adjustments by the court,
including a reduction to reflect payments already made by the
corporation to many of these plaintiffs, and possibly to additional
legal proceedings.
On July 15, 1994, an agreement was reached with counsel for the Alaska
Native class providing for a partial settlement of the Native class
claims arising from the Exxon Valdez oil spill. If approved by the
court, this partial settlement will require the corporation to pay
$20 million to resolve the Native class claims for replacement cost of
lost subsistence harvests resulting from the oil spill. Those claims
had been scheduled to be tried in phase II-B of the trial.
In phase III, the jury will determine the amount of punitive damages,
if any, to be assessed against the corporation. The corporation
continues to believe that it should not be liable for any punitive
damages. If punitive damages are awarded, the corporation intends
to pursue all means of recourse available to it.
Phase IV will be a separate proceeding to deal with certain claims for
compensatory damages not addressed in prior phases. The total amount
of these claims has not yet been specified.
Trial in Alaska state court for damages to certain lands commenced on
June 20, 1994. The damages claimed in this trial total approximately
$120 million. There are a number of additional cases pending in Alaska
state court that are not yet set for trial.
-11-
PART II - OTHER INFORMATION
EXXON CORPORATION
FOR THE QUARTER ENDED JUNE 30, 1994
Item 4. Submission of Matters to a Vote of Security Holders
______ ___________________________________________________
At the annual meeting of shareholders on April 27, 1994, the following
proposals were voted upon:
Concerning Election of Directors
Votes Votes
Nominees for Director Cast For Withheld
_____________________ ___________ _________
Randolph W. Bromery 991,705,590 8,126,395
D. Wayne Calloway 992,337,613 7,494,372
Jess Hay 992,234,875 7,597,110
William R. Howell 992,351,838 7,480,147
Philip E. Lippincott 992,394,611 7,437,373
Marilyn Carlson Nelson 991,416,633 8,415,352
Lee R. Raymond 991,911,460 7,920,525
Charles R. Sitter 992,246,639 7,585,346
John H. Steele 991,564,122 8,267,863
Robert E. Wilhelm 991,873,873 7,958,111
Joseph D. Williams 992,267,493 7,564,492
Concerning Ratification of Appointment of Independent Accountants
Votes Cast For: 986,879,501
Votes Cast Against: 8,085,514
Abstentions: 4,866,968
Broker Non-Votes: N/A
Concerning the Annual Meeting Date
Votes Cast For: 34,444,597
Votes Cast Against: 822,686,592
Abstentions: 28,396,412
Broker Non-Votes: 114,304,384
Concerning Mining Operations
Votes Cast For: 51,016,170
Votes Cast Against: 795,867,527
Abstentions: 38,643,903
Broker Non-Votes: 114,304,384
See also pages 4 through 7 and pages 14 through 16 of the registrant's
definitive proxy statement dated March 4, 1994.
-12-
PART II - OTHER INFORMATION
EXXON CORPORATION
FOR THE QUARTER ENDED JUNE 30, 1994
Item 6. Exhibits and Reports on Form 8-K
______ ________________________________
a) Exhibits
None
b) Reports on Form 8-K
The registrant has not filed any reports on Form 8-K during the
quarter.
-13-
EXXON CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1994
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 CORPORATION
Date: August 15, 1994 W. B. Cook
______________________________________
W. B. Cook, Vice President, Controller
and Principal Accounting Officer
-14-