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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 June 30, 1995
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, 1995
_______________________________ _______________________________
Common stock, without par value 1,241,765,493
EXXON CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 1995
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Page
Number
______
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Three and six months ended June 30, 1995 and 1994
Condensed Consolidated Balance Sheet 4
As of June 30, 1995 and December 31, 1994
Condensed Consolidated Statement of Cash Flows 5
Six months ended June 30, 1995 and 1994
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 4. Submission of Matters to a Vote of Security Holders 11
Item 6. Exhibits and Reports on Form 8-K 12
Signature 13
-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,
__________________ ________________
REVENUE 1995 1994 1995 1994
____ ____ ____ ____
Sales and other operating revenue,
including excise taxes $31,084 $27,102 $60,281 $52,726
Earnings from equity interests and
other revenue 583 217 1,165 557
_______ _______ _______ _______
Total revenue 31,667 27,319 61,446 53,283
_______ _______ _______ _______
COSTS AND OTHER DEDUCTIONS
Crude oil and product purchases 13,186 11,488 25,426 21,743
Operating expenses 3,217 3,144 6,259 6,214
Selling, general and administrative
expenses 1,755 1,735 3,486 3,351
Depreciation and depletion 1,328 1,233 2,664 2,522
Exploration expenses, including dry
holes 167 135 335 273
Interest expense 176 107 319 408
Excise taxes 3,238 2,856 6,308 5,597
Other taxes and duties 5,840 5,146 11,304 9,938
Income applicable to minority and preferred
interests 86 38 160 92
_______ _______ _______ _______
Total costs and other deductions 28,993 25,882 56,261 50,138
_______ _______ _______ _______
INCOME BEFORE INCOME TAXES 2,674 1,437 5,185 3,145
Income taxes 1,044 552 1,895 1,100
_______ _______ _______ _______
NET INCOME $ 1,630 $ 885 $ 3,290 $ 2,045
======= ======= ======= =======
Net income per common share* $ 1.30 $ 0.70 $ 2.63 $ 1.62
Dividends per common share $ 0.75 $ 0.72 $ 1.50 $ 1.44
Average number common shares
outstanding (millions) 1,242.5 1,241.6 1,242.2 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)
June 30, Dec. 31,
1995 1994
________ ________
ASSETS
Current assets
Cash and cash equivalents $ 2,577 $ 1,157
Other marketable securities 157 618
Notes and accounts receivable - net 8,066 8,073
Inventories
Crude oil, products and merchandise 5,069 4,717
Materials and supplies 828 824
Prepaid taxes and expenses 1,289 1,071
_______ _______
Total current assets 17,986 16,460
Property, plant and equipment - net 64,653 63,425
Investments and other assets 8,519 7,977
_______ _______
TOTAL ASSETS $91,158 $87,862
======= =======
LIABILITIES
Current liabilities
Notes and loans payable $ 3,308 $ 3,858
Accounts payable and accrued liabilities 13,750 13,391
Income taxes payable 2,403 2,244
_______ _______
Total current liabilities 19,461 19,493
Long-term debt 8,550 8,831
Annuity reserves, deferred credits and other liabilities 23,148 22,123
_______ _______
TOTAL LIABILITIES 51,159 50,447
_______ _______
SHAREHOLDERS' EQUITY
Preferred stock, without par value:
Authorized: 200 million shares
Outstanding: 8 million shares at June 30, 1995 501
9 million shares at Dec. 31, 1994 554
Guaranteed LESOP obligation (501) (613)
Common stock, without par value:
Authorized: 2,000 million shares
Issued: 1,813 million shares 2,822 2,822
Earnings reinvested 52,234 50,821
Cumulative foreign exchange translation adjustment 2,057 848
Common stock held in treasury:
571 million shares at June 30, 1995 (17,114)
571 million shares at Dec. 31, 1994 (17,017)
_______ _______
TOTAL SHAREHOLDERS' EQUITY 39,999 37,415
_______ _______
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $91,158 $87,862
======= =======
The number of shares of common stock issued and outstanding at June 30, 1995
and December 31, 1994 were 1,241,765,493 and 1,241,744,053, respectively.
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EXXON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Six Months Ended
June 30,
________________
1995 1994
______ ______
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $3,290 $2,045
Depreciation and depletion 2,664 2,522
Changes in operational working capital, excluding cash
and debt (8) (64)
All other items - net 384 (85)
______ ______
Net Cash Provided By Operating Activities 6,330 4,418
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions and additions to property, plant and (3,046) (2,998)
equipment.
Sales of subsidiaries and property, plant and equipment 258 667
Other investing activities - net 667 653
______ ______
Net Cash Used In Investing Activities (2,121) (1,678)
______ ______
NET CASH GENERATION BEFORE FINANCING ACTIVITIES 4,209 2,740
______ ______
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt 787 735
Reductions in long-term debt (615) (301)
Additions/(reductions) in short-term debt - net (947) (121)
Cash dividends to Exxon shareholders (1,884) (1,812)
Cash dividends to minority interests (156) (301)
Additions/(reductions) to minority interests and
sales/(redemptions) of affiliate preferred stock 6 40
Acquisitions of Exxon shares - net (150) (103)
______ ______
Net Cash Used In Financing Activities (2,959) (1,863)
______ ______
Effects Of Exchange Rate Changes On Cash 170 19
______ ______
Increase/(Decrease) In Cash And Cash Equivalents 1,420 896
Cash And Cash Equivalents At Beginning Of Period 1,157 983
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $2,577 $1,879
====== ======
SUPPLEMENTAL DISCLOSURES
Income taxes paid $1,103 $1,272
Cash interest paid $ 423 $ 330
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
These unaudited 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 1994 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
_____________ ________________
1995 1994 1995 1994
____ ____ ____ ____
(millions of dollars)
Petroleum and natural gas
Exploration and production
United States $ 281 $ 206 $ 490 $ 451
Non-U.S. 570 397 1,327 987
Refining and marketing
United States 61 (1) 77 38
Non-U.S. 224 202 408 551
______ _____ ______ _____
Total petroleum and natural gas 1,136 804 2,302 2,027
Chemicals
United States 266 110 496 202
Non-U.S. 305 80 622 137
Other operations 109 64 222 122
Corporate and financing (186) (173) (352) (443)
______ _____ ______ _____
NET INCOME $1,630 $ 885 $3,290 $2,045
====== ===== ====== ======
SECOND QUARTER 1995 COMPARED WITH SECOND QUARTER 1994
Exxon Corporation estimated second quarter 1995 earnings of $1,630 million,
an increase of 84 percent from $885 million in the second quarter of 1994.
On a per share basis, net income was $1.30, up from $0.70 in the second
quarter last year.
As a result of improvements in all major operating segments, Exxon earned net
income of $1.6 billion, the highest ever achieved in a second quarter.
Crude oil prices were volatile during the quarter, strengthening early in
the period but then weakening by the end of the quarter. However, relative
to the second quarter of last year, average crude prices were stronger.
While Exxon increased liquids production, unseasonably warm weather resulted
in a reduction in gas sales in Europe and lower natural gas prices in the
U.S. Downstream earnings improved from last year's very low level, but
remain disappointing due primarily to depressed industry refining margins.
Exxon increased sales of motor gasoline and specialty products, but heating
oil sales were down due to warm weather. Chemical earnings tripled compared
to a year ago, establishing a new quarterly earnings record. Worldwide
chemical product sales were increased and margins improved. Earnings from
other operations grew significantly, primarily due to improvements in copper
and coal results.
Exxon continues to increase capital and exploration spending as attractive
investment opportunities are developed in each of the major operating
segments.
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EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
OTHER COMMENTS ON SECOND QUARTER COMPARISON
During the second quarter 1995, worldwide production earnings benefited from
crude oil prices that were on average more than $2.00 per barrel above the
prior year's quarter. However, by the end of the quarter crude oil prices
had weakened, falling back to the levels of a year ago. Natural gas prices
in the U.S. were negatively impacted by unseasonably warm weather.
Worldwide crude production was 1,742 kbd (thousand barrels per day) in the
second quarter, up from 1,694 kbd in 1994. The increase in production came
mainly from developments in the U.S. and Malaysia. Worldwide natural gas
production of 5,094 mcfd (million cubic feet per day) was down 270 mcfd from
the second quarter of last year principally as a result of the unusually
warm weather this year and correspondingly lower demand in Europe and North
America.
Exploration and production earnings in the U.S. were $281 million, up from
$206 million in the second quarter last year. Exploration and production
earnings from operations outside the U.S. were $570 million, up from $397
million in the second quarter 1994. Both areas benefited from higher
average crude oil prices which more than offset the negative effects of
lower natural gas realizations and sales.
Worldwide petroleum product sales of 4,882 kbd were down from 4,940 kbd in
the second quarter 1994. The decline resulted primarily from lower weather
related demand for distillates, particularly in Europe and the U.S. However,
motor gasoline sales were higher this year with increases in the U.S., Latin
America and Asia-Pacific markets.
Refining and marketing earnings in the U.S. were $61 million, up from
essentially break even in last year's second quarter. Refining and
marketing earnings from operations outside the U.S. were $224 million,
compared with $202 million in last year's second quarter. Petroleum product
margins remained very weak as higher average crude supply costs coupled with
an industry-wide over supply situation exerted downward pressure on refining
margins. Earnings outside the U.S. were also impacted by a higher level of
scheduled refinery maintenance activity this year.
Worldwide chemical earnings were $571 million, up sharply from $190 million
in the second quarter 1994. Higher product margins and record prime product
sales of 3,429 kt (thousand metric tons) contributed to the improved results.
Earnings from other operating segments, including coal, minerals and power,
totaled $109 million, an increase from $64 million in the second quarter 1994.
Earnings this year benefited from higher coal and copper prices and an
increase in copper production. Results also benefited from continued growth
in Exxon's power generation investment base.
-7-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
OTHER COMMENTS ON SECOND QUARTER COMPARISON (Continued)
Corporate and financing expenses of $186 million were comparable to $173
million in the second quarter last year.
Revenue totaled $31,667 million compared with $27,319 million in the second
quarter last year. Capital and exploration expenditures of $2,019 million
compared to $1,959 million in the second quarter 1994.
There was essentially no change in the number of Exxon shares outstanding at
quarter end after the purchase of 3.7 million shares for the treasury.
FIRST SIX MONTHS 1995 COMPARED WITH FIRST SIX MONTHS 1994
Net income of $3,290 million in the first half 1995 compared with $2,045
million in 1994.
Worldwide crude prices during the first half 1995 were on average about
$2.50 per barrel above the prior year. Liquids production of 1,757 kbd was
up from 1,718 kbd in 1994, principally as a result of increased production
from new developments in the U.S., the North Sea and Malaysia. Despite
increases in natural gas production in Canada and the Asia-Pacific region,
worldwide natural gas production of 6,116 mcfd was down 199 mcfd from 1994
as a result of unseasonably warm temperatures in both the U.S. and Europe.
Overall, earnings from U.S. exploration and production operations were $490
million in 1995, up from $451 million in the first half 1994. Outside the
U.S., 1995 earnings from exploration and production operations were $1,327
million, versus $987 million in 1994.
Petroleum product margins were weaker in the first half of 1995 than in the
comparable 1994 period as a result of higher average crude supply costs and
an industry-wide oversupply situation. Worldwide petroleum product sales of
4,960 kbd in 1995 compared to 4,950 kbd in the first half of last year, as
an increase in motor gasoline sales was nearly offset by weather-related
declines in distillate sales. U.S. refining and marketing earnings were
$77 million in the first half of this year, up from $38 million in 1994.
The impact of weaker product margins was offset by an increase in motor
gasoline sales and lower refinery maintenance expense this year. Outside
the U.S., refining and marketing earnings of $408 million were down from
$551 million in the first half 1994, principally due to extremely weak
refining margins in Europe, and an increase in scheduled refinery
maintenance expenses.
Earnings from worldwide chemical operations totaled $1,118 million in the
first half of 1995, more than triple the earnings of the 1994 period.
Higher product margins, increased product sales volumes and lower operating
expenses combined to produce the earnings improvement.
Earnings from other operating segments, including coal, minerals, and power,
were $222 million in the first half of this year. This was up from $122
million in 1994, as earnings benefited from higher copper prices and
production, as well as an increase in Exxon's power generation asset base.
-8-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Continued)
FIRST SIX MONTHS 1995 COMPARED WITH FIRST SIX MONTHS 1994 (Continued)
Corporate and financing expenses of $352 million in 1995 were down from $443
million in the first half of last year. A reduction in foreign exchange
effects and lower tax expense offset the impact of higher interest costs.
Net cash generation before financing activities was $4,209 million in the
first half of 1995 versus $2,740 million in the same period last year.
Operating activities provided net cash of $6,330 million, an increase of
$1,912 million from 1994's first half, due mainly to higher net income.
Investing activities used net cash of $2,121 million, or $443 million more
than a year ago, primarily due to lower proceeds from asset dispositions.
Net cash used in financing activities was $2,959 million in the first half of
1995 versus $1,863 million for the year-ago period. The increase of $1,096
million mainly reflects reductions in short-term and long-term debt. During
the first half of 1995, a total of 4.7 million shares of Exxon common stock
were acquired for the treasury at a cost of $322 million. Purchases are
made in both the open market and through negotiated transactions. Purchases
may be discontinued at any time.
Capital and exploration expenditures of $3,781 million in this year's first
half were up $245 million from a year ago as spending increased outside the
U.S. Capital and exploration expenditures in 1995 should exceed the 1994
level as Exxon maintains its focus on profitable growth opportunities.
Total debt of $11.9 billion at June 30, 1995 was $0.8 billion lower than the
level at year-end 1994. The corporation's debt to capital ratio was 21.9
percent at the end of the first six months of 1995, down from 24.3 percent
at year-end 1994 due to a lower debt level and increased shareholders' equity.
Over the twelve months ended June 30, 1995, return on average shareholders'
equity was 16.7 percent. Return on average capital employed, which includes
debt, was 13.2 percent over the same time period.
Although the corporation issues long-term debt from time to time and
maintains a revolving commercial paper program, internally generated funds
cover the majority of its financial requirements.
The corporation, as part of its ongoing asset management program, continues to
evaluate its mix of assets for potential upgrade. Because of the ongoing
nature of this program, dispositions will continue to be made from time to
time which will result in either gains or losses.
-9-
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (Concluded)
SPECIAL ITEMS
_____________
Second Quarter First Six Months
______________ ________________
1995 1994 1995 1994
____ ____ ____ ____
(millions of dollars)
EXPLORATION & PRODUCTION
________________________
Non-U. S.
Primarily tax related - - - $66
___ ___ ___ ___
TOTAL - - - $66
=== === === ===
-10-
PART II. OTHER INFORMATION
EXXON CORPORATION
. FOR THE QUARTER ENDED JUNE 30, 1995
Item 4. Submission of Matters to a Vote of Security Holders
___________________________________________________
At the annual meeting of shareholders on April 26, 1995, the
following proposals were voted upon:
Concerning Election of Directors
Votes Votes
Nominees for Director Cast for Withheld
_____________________ ___________ _________
Randolph W. Bromery 1,034,752,103 7,232,718
D. Wayne Calloway 1,035,720,374 6,264,447
Jess Hay 1,034,765,998 7,218,823
James R. Houghton 1,035,594,866 6,389,955
William R. Howell 1,035,654,911 6,329,910
Philip E. Lippincott 1,035,652,554 6,332,267
Marilyn Carlson Nelson 1,035,401,499 6,583,322
Lee R. Raymond 1,035,020,597 6,964,224
Charles R. Sitter 1,035,613,522 6,371,299
John H. Steele 1,035,435,452 6,549,369
Robert E. Wilhelm 1,035,855,467 6,129,354
Joseph D. Williams 1,034,759,752 7,225,069
Concerning Ratification of Appointment of Independent Accountants
Votes Cast For: 1,033,639,714
Votes Cast Against: 4,363,032
Abstentions: 3,982,075
Broker Non-Votes: N/A
Concerning the Annual Meeting Date
Votes Cast For: 41,586,383
Votes Cast Against: 856,017,461
Abstentions: 23,756,991
Broker Non-Votes: 120,623,986
Concerning Mining Operations
Votes Cast For: 47,476,705
Votes Cast Against: 825,962,374
Abstentions: 47,941,357
Broker Non-Votes: 120,604,385
See also pages 4 through 8 and pages 15 through 17 of the registrant's
definitive proxy statement dated March 10, 1995.
-11-
PART II. OTHER INFORMATION
EXXON CORPORATION
FOR THE QUARTER ENDED JUNE 30, 1995
Item 6. Exhibits and Reports on Form 8-K
______ ________________________________
a) Exhibits
Exhibit 27, Financial Data Schedule (included only in the electronic
filing of this document).
b) Reports on Form 8-K
The registrant has not filed any reports on Form 8-K during the quarter.
-12-
EXXON CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED JUNE 30, 1995
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 10, 1995 /s/ W. Bruce Cook
_________________________________________
W. Bruce Cook, Vice President, Controller
and Principal Accounting Officer
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