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FORM 10-Q
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 September 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 September 30,1994
_______________________________ ________________________________
Common stock, without par value 1,241,455,701
EXXON CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1994
INDEX
PART I. FINANCIAL INFORMATION
Page
Number
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Three and nine months ended September 30, 1994 and 1993
Condensed Consolidated Balance Sheet 4
As of September 30, 1994 and December 31, 1993
Condensed Consolidated Statement of Cash Flows 5
Nine months ended September 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 6. Exhibits and Reports on Form 8-K 11
Signature 12
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXXON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(millions of dollars)
Three Months Ended Nine Months Ended
September 30, September 30,
__________________ _________________
1994 1993 1994 1993
REVENUE _______ _______ _______ ______
Sales and other operating
revenue, including excise
taxes $29,237 $27,380 $81,963 $81,881
Earnings from equity interests
and other revenue 326 540 883 1,253
______ ______ ______ ______
Total revenue 29,563 27,920 82,846 83,134
______ ______ ______ ______
COSTS AND OTHER DEDUCTIONS
Crude oil and product purchases 12,353 11,614 34,096 35,163
Operating expenses 3,101 3,035 9,315 9,300
Selling, general and
administrative expenses 1,783 1,676 5,134 5,046
Depreciation and depletion 1,187 1,210 3,709 3,640
Exploration expenses, including
dry holes 147 173 420 449
Interest expense 126 193 534 534
Excise taxes 3,190 2,925 8,787 8,585
Other taxes and duties 5,639 4,993 15,577 14,559
Income applicable to minority
and preferred interests 97 64 189 187
______ ______ ______ ______
Total costs and other
deductions 27,623 25,883 77,761 77,463
______ ______ ______ ______
INCOME BEFORE INCOME TAXES 1,940 2,037 5,085 5,671
Income taxes 785 677 1,885 1,891
______ ______ ______ ______
NET INCOME $ 1,155 $ 1,360 $ 3,200 $ 3,780
====== ====== ====== ======
Net income per common share* $ 0.92 $ 1.09 $ 2.54 $ 3.01
Dividends per common share $ 0.72 $ 0.72 $ 2.16 $ 2.16
Average number common shares
outstanding (millions) 1,241.4 1,241.6 1,241.6 1,241.7
* Computed as income less dividends on preferred stock divided by
the weighted average number of common shares outstanding.
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EXXON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars)
Sept. 30, Dec. 31,
1994 1993
________ ________
ASSETS
Current assets
Cash and cash equivalents $ 1,700 $ 983
Other marketable securities 725 669
Notes and accounts receivable - net 7,315 6,860
Inventories
Crude oil, products and merchandise 4,703 4,616
Materials and supplies 862 856
Prepaid taxes and expenses 1,145 875
_______ _______
Total current assets 16,450 14,859
Property, plant and equipment - net 63,454 61,962
Investments and other assets 7,886 7,324
_______ _______
TOTAL ASSETS $87,790 $84,145
======= =======
LIABILITIES
Current liabilities
Notes and loans payable $ 4,195 $ 4,109
Accounts payable and accrued liabilities 12,832 12,122
Income taxes payable 2,226 2,359
_______ _______
Total current liabilities 19,253 18,590
Long-term debt 8,936 8,506
Annuity reserves, deferred credits and
other liabilities 23,085 22,257
_______ _______
TOTAL LIABILITIES 51,274 49,353
_______ _______
SHAREHOLDERS' EQUITY
Preferred stock, without par value:
Authorized:200 million shares
Issued: 16 million shares(Convertible,Class A)
Outstanding: 9 million shares at Sept. 30, 1994 583
11 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 49,860 49,365
Cumulative foreign exchange translation
adjustment 889 (370)
Common stock held in treasury:
571 million shares at Sept. 30, 1994 (17,024)
571 million shares at Dec. 31, 1993 (16,977)
_______ _______
TOTAL SHAREHOLDERS' EQUITY 36,516 34,792
_______ _______
TOTAL LIABILITIES & SHAREHOLDERS' EQUITY $87,790 $84,145
======= =======
The number of shares of common stock issued and outstanding at
September 30, 1994 and December 31, 1993 were 1,241,455,701 and
1,241,737,220, respectively.
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EXXON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Nine Months Ended
____Sept. 30,____
1994 1993
CASH FLOWS FROM OPERATING ACTIVITIES ______ _____
Net income $3,200 $3,780
Depreciation and depletion 3,709 3,640
Changes in operational working capital,
excluding cash and debt (312) 1,051
All other items - net 504 6
______ _____
Net Cash Provided By Operating Activities 7,101 8,477
______ _____
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions and additions to property,
plant and equipment (4,646) (4,841)
Sales of subsidiaries and property,
plant and equipment 787 934
Other investing activities - net 118 (118)
______ _____
Net Cash Used In Investing Activities (3,741) (4,025)
______ _____
NET CASH GENERATION BEFORE FINANCING ACTIVITIES 3,360 4,452
______ _____
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt 883 1,261
Reductions in long-term debt (336) (158)
Additions/(reductions) in short-term debt - net (60) (1,268)
Cash dividends to Exxon shareholders (2,717) (2,723)
Cash dividends to minority interests (370) (202)
Additions/(reductions) to minority interests and
sales/(redemptions) of affiliate preferred stock 31 (533)
Acquisitions of Exxon shares - net (132) (154)
______ _____
Net Cash Used In Financing Activities (2,701) (3,777)
______ ______
Effects Of Exchange Rate Changes On Cash 58 (21)
______ ______
Increase/(Decrease) In Cash And Cash Equivalents 717 654
Cash And Cash Equivalents At Beginning Of Period 983 898
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $1,700 $1,552
====== ======
SUPPLEMENTAL DISCLOSURES
Income taxes paid $1,765 $1,409
Cash interest paid $ 517 $ 502
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.
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EXXON CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
FUNCTIONAL EARNINGS SUMMARY Third Quarter First Nine Months
_____________ _________________
1994 1993 1994 1993
Petroleum and natural gas ____ ____ ____ ____
Exploration and production (millions of dollars)
United States $ 208 $ 273 $ 659 $ 763
Non-U.S. 408 549 1,395 1,716
Refining and marketing
United States 87 121 125 255
Non-U.S. 330 474 881 1,084
_____ _____ ______ _____
Total petroleum and natural gas 1,033 1,417 3,060 3,818
Chemicals
United States 80 46 282 183
Non-U.S. 118 22 255 94
Other operations 89 19 211 115
Corporate and financing (165) (144) (608) (430)
_____ _____ _____ _____
NET INCOME $1,155 $ 1,360 $3,200 $3,780
===== ===== ===== =====
THIRD QUARTER 1994 COMPARED WITH THIRD QUARTER 1993
Exxon Corporation estimated third quarter 1994 net income at $1,155
million, equal to $0.92 per share, compared with $1,360 million, or
$1.09 per share, in the same period last year.
Earnings in the third quarter of 1993 included $306 million of credits
for asset sales and tax adjustments. Excluding those special items,
this quarter's earnings are up ten percent relative to the third
quarter of 1993.
In the third quarter of 1994, Exxon's liquids production, natural gas
sales, refinery throughput, petroleum product sales, chemical sales
and coal sales were all above the levels achieved in the comparable
quarter of 1993. Worldwide crude oil prices were slightly higher,
but industry refining margins were narrower than in the third
quarter of last year.
Exxon's chemical product sales in the third quarter were the highest
in over two years, and margins also improved. As a result, chemical
earnings more than doubled from a year ago. In addition, earnings
from Exxon's other operating segments improved, as coal production
increased and copper prices rose.
OTHER COMMENTS ON THIRD QUARTER COMPARISON
Relative to the prior year, third quarter 1994 worldwide production
earnings benefited from a modest improvement in crude prices.
However, natural gas earnings were negatively impacted by lower gas
realizations in the U.S. Third quarter earnings from U.S.
exploration and production operations were $208 million, while
earnings from operations outside the U.S. were $408 million.
Excluding special items, comparable 1993 earnings were $176 million
for U.S. operations and $397 million for operations outside the U.S.
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EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
OTHER COMMENTS ON THIRD QUARTER COMPARISON (Continued)
Crude production in the third quarter 1994 was 1,670 kbd (thousand
barrels per day) up from 1,620 kbd the prior year. Production from
new developments in the U.S. and the North Sea provided most of the
increase. Worldwide natural gas production of 4,660 mcfd (million
cubic feet per day) was up 41 mcfd from the prior year as reductions
in European sales were offset by new production from Exxon's Mobile
Bay development in the U.S. and growth in Pacific Rim demand.
Petroleum product margins were lower in this year's third quarter,
as product prices did not keep pace with higher crude supply costs,
while in the 1993 third quarter product margins benefited from
declining crude supply costs. Worldwide petroleum product sales of
5,043 kbd rose 120 kbd compared to the third quarter of last year,
with increases in U.S., Europe, Far East and Latin American volumes.
Third quarter 1994 earnings from refining and marketing operations
in the U.S. were $87 million, compared with $121 million in the third
quarter 1993. Earnings from refining and marketing operations outside
the U.S. totaled $330 million, versus $474 million in the third
quarter last year.
Earnings from chemical operations in the third quarter of this year
benefited from improved margins and increased sales. Product sales
volumes of 3,307 kt (thousand tons) were up 219 kt over last year's
quarter. Third quarter 1994 worldwide chemical earnings were $198
million compared with $68 million last year.
Earnings from other operating segments totaled $89 million, compared
with $19 million in third quarter 1993. Coal production increased
and copper realizations rose substantially.
Corporate and financing expenses in the third quarter 1994 were
$165 million, compared with $144 million last year.
Net income in the third quarter of 1993 included $306 million of
tax credits and gains on asset sales; there were no similar
credits in the third quarter 1994.
During the third quarter 1994, a Federal District Court jury in
Anchorage, Alaska, returned compensatory and punitive damage
verdicts in the civil litigation resulting from the accidental
grounding of the Exxon Valdez in 1989. See Exxon's Current
Report on Form 8-K dated September 21, 1994. During the quarter,
Exxon filed motions to overturn or reduce these verdicts, which
are being reviewed by the trial court and may be the subject of
appeals to higher courts. Since it is impossible to estimate what
the ultimate earnings impact will be, no charge was taken in the
third quarter related to these events.
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EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
OTHER COMMENTS ON THIRD QUARTER COMPARISON (Continued)
Revenue for the third quarter totaled $29,563 million. This was an
increase from $27,920 million in the third quarter 1993. Capital
and exploration expenditures of $1,925 million compared to $2,010
million in the third quarter 1993.
During the third quarter of this year, Exxon purchased 0.6 million
shares of its stock for the treasury at a cost of $34 million.
FIRST NINE MONTHS 1994 COMPARED WITH FIRST NINE MONTHS 1993
Net income of $3,200 million for the first nine months of 1994
compared with $3,780 million in 1993. Net income in 1993 included
$563 million of net special credits, while the first nine months of
1994 included $66 million of tax related credits.
Although worldwide crude prices improved in the third quarter, through
nine months of 1994 prices were weaker, down over $2.00 per barrel on
average from 1993. Worldwide crude production of 1,704 kbd was up
from 1,648 kbd in 1993, principally as a result of increased
production from new developments in the North Sea and Alaska. Natural
gas production of 5,757 mcfd rose by six percent versus 1993, largely
due to increased U.S. and Pacific Rim production. Excluding special
items, earnings from U.S. exploration and production operations were
$659 million, compared with $666 million in the first nine months of
last year. Outside the U.S., earnings from exploration and
production operations were $1,329 million versus $1,462 million in
1993.
Petroleum product margins for the first nine months of 1994 were on
average weaker than the prior year, negatively impacting refining
and marketing earnings. In addition, an increase in refining
maintenance activities this year reduced earnings. Worldwide
petroleum product sales of 4,985 kbd were up from 4,875 kbd in the
first nine months of 1993, with increases in clean product sales in
most major markets. Through the first nine months of this year, U.S.
refining and marketing earnings were $125 million, compared with $255
million the prior year. Earnings from refining and marketing
operations outside the U.S. were $881 million, versus $1,084 million
in 1993.
Earnings from worldwide chemical operations totaled $537 million for
the first nine months of 1994, nearly double the earnings level of the
prior year. Product margins were higher than in 1993 and sales volume
this year totaled 9,879 kt, up from 9,480 kt in the first nine months
of 1993.
-8-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
FIRST NINE MONTHS 1994 COMPARED WITH FIRST NINE MONTHS 1993 (Continued)
Earnings from other operating segments totaled $211 million in the
first nine months of 1994, up from $115 million in 1993. Coal and
copper production increased, and copper prices were significantly
higher. Corporate and financing charges of $608 million compared
with $430 million in the first nine months of 1993, which benefited
from $220 million of tax credits.
Net cash generation before financing activities was $3,360 million in
the first nine months of 1994 versus $4,452 million in the same period
last year. Operating activities provided net cash of $7,101 million,
a decrease of $1,376 million from 1993's first nine months, due mainly
to lower net income and changes in operational working capital.
Investing activities used net cash of $3,741 million, or $284 million
less than a year ago.
Net cash used in financing activities was $2,701 million in the first
nine months of 1994 versus $3,777 million for the year-ago period. The
decrease of $1,076 million mainly reflects the absence of the redemption
of preferred securities by an affiliate in 1993 and increased
borrowings. Net outlays for treasury share acquisitions were $132
million versus $154 million in the same period last year. During the
first nine months of 1994, a total of 2.9 million shares were acquired
at a cost of $181 million. Purchases are made in the open market and
through negotiated transactions. Purchases may be discontinued at any
time.
Capital and exploration expenditures of $5,461 million in the first
nine months of 1994 compared to $5,724 million in the same period
last year.
Total debt of $13.1 billion at September 30, 1994 was $0.5 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 nine months of
1994, unchanged from year-end 1993.
Over the twelve months ended September 30, 1994, return on average
shareholders' equity was 13.2 percent. Return on average capital
employed, which includes debt, was 10.6 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
_____________
Third Quarter First Nine Months
______________ ________________
1994 1993 1994 1993
____ ____ ____ ____
(millions of dollars)
EXPLORATION & PRODUCTION
United States
Primarily asset dispositions - $182 - $182
Primarily tax related - (85) - (85)
Non-U.S.
Primarily asset dispositions - (26) - (6)
Primarily tax related - 178 $66 260
REFINING AND MARKETING
United States
Primarily asset dispositions - - - 43
Primarily tax related - (17) - (17)
Non-U.S.
Primarily asset dispositions - - - (32)
Primarily tax related - 23 - 23
CHEMICALS
Primarily tax related - (26) - (26)
OTHER OPERATIONS
Primarily asset dispositions - (12) - (12)
Primarily tax related - - - 13
CORPORATE & FINANCING
Primarily tax related - 89 - 220
___ ____ ____ ____
TOTAL - $306 $ 66 $563
=== ==== ==== ====
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PART II - OTHER INFORMATION
EXXON CORPORATION
FOR THE QUARTER ENDED SEPTEMBER 30, 1994
Item 1. Legal Proceedings
______ _________________
On September 30, 1994, the U.S. Environmental Protection Agency issued
a Complaint to the registrant proposing civil penalties totaling
$258,000 for a number of alleged violations of the Clean Air Act and
the Clean Water Act at the registrant's Baton Rouge Chemical Plant.
The registrant plans to request a hearing concerning the Complaint.
See also the registrant's Current Report on Form 8-K dated September
21, 1994 for developments in the legal proceedings arising out of the
release of crude oil from the tanker Exxon Valdez in 1989.
Item 6. Exhibits and Reports on Form 8-K
________________________________________
a) Exhibits
Exhibit 27, Financial Data Schedule, is included only in the
electronic filing of this document.
b) Reports on Form 8-K
The registrant filed a Form 8-K on September 21, 1994.
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EXXON CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 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: November 11, 1994 W. B. Cook
______________________________________
W. B. Cook, Vice President, Controller
and Principal Accounting Officer
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