SEC Filing | Exxon Mobil Corporation

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D. C. 20549 FORM 10-Q ( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended June 30, 2000 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 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, 2000 _______________________________ _______________________________ Common stock, without par value 3,483,841,401

EXXON MOBIL CORPORATION FORM 10-Q FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2000 TABLE OF CONTENTS Page Number ______ PART I. FINANCIAL INFORMATION Item 1. Financial Statements Condensed Consolidated Statement of Income 3 Three and six months ended June 30, 2000 and 1999 Condensed Consolidated Balance Sheet 4 As of June 30, 2000 and December 31, 1999 Condensed Consolidated Statement of Cash Flows 5 Six months ended June 30, 2000 and 1999 Notes to Condensed Consolidated Financial Statements 6-10 Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations 11-17 ` Item 3. Quantitative and Qualitative Disclosures About Market Risk 18 PART II. OTHER INFORMATION Item 1. Legal Proceedings 18 Item 4. Submission of Matters to a Vote of Security Holders 19-20 Item 6. Exhibits and Reports on Form 8-K 20 Signature 21

-2- PART I. FINANCIAL INFORMATION Item 1. Financial Statements EXXON MOBIL CORPORATION CONDENSED CONSOLIDATED STATEMENT OF INCOME (millions of dollars) Three Months Ended Six Months Ended June 30, June 30, __________________ ________________ 2000 1999 2000 1999 REVENUE ____ ____ ____ ____ Sales and other operating revenue, including excise taxes $54,936 $42,458 $108,209 $80,440 Earnings from equity interests and other revenue 1,020 819 1,828 1,519 _______ _______ ________ _______ Total revenue 55,956 43,277 110,037 81,959 _______ _______ ________ _______ COSTS AND OTHER DEDUCTIONS Crude oil and product purchases 26,340 17,543 51,304 31,452 Operating expenses 4,456 3,827 8,741 7,970 Selling, general and administrative expenses 2,830 3,338 5,707 6,582 Depreciation and depletion 1,939 1,989 4,067 4,160 Exploration expenses, including dry holes 166 297 376 539 Merger related expenses 202 20 732 27 Interest expense 126 128 300 310 Excise taxes 5,457 5,222 10,950 10,100 Other taxes and duties 7,624 8,222 15,706 16,442 Income applicable to minority and preferred interests 110 7 182 16 _______ _______ ________ _______ Total costs and other deductions 49,250 40,593 98,065 77,598 _______ _______ ________ _______ INCOME BEFORE INCOME TAXES 6,706 2,684 11,972 4,361 Income taxes 2,706 730 4,947 923 _______ _______ ________ _______ INCOME BEFORE EXTRAORDINARY ITEM 4,000 1,954 7,025 3,438 Extraordinary gain from required asset divestitures, net of income tax 530 0 985 0 _______ _______ ________ _______ NET INCOME $ 4,530 $ 1,954 $ 8,010 $ 3,438 ======= ======= ======== ======= NET INCOME PER COMMON SHARE (DOLLARS) Before extraordinary gain $ 1.15 $ 0.57 $ 2.02 $ 0.99 Extraordinary gain, net of income tax 0.15 0.00 0.28 0.00 _______ _______ ________ _______ Net Income $ 1.30 $ 0.57 $ 2.30 $ 0.99 ======= ======= ======== ======= NET INCOME PER COMMON SHARE - ASSUMING DILUTION (DOLLARS) Before extraordinary gain $ 1.13 $ 0.56 $ 1.99 $ 0.98 Extraordinary gain, net of income tax 0.15 0.00 0.28 0.00 _______ _______ ________ _______ Net Income $ 1.28 $ 0.56 $ 2.27 $ 0.98 ======= ======= ======== ======= Dividends per common share $ 0.44 $ 0.42 $ 0.88 $ 0.83

-3- EXXON MOBIL CORPORATION CONDENSED CONSOLIDATED BALANCE SHEET (millions of dollars) June 30, Dec. 31, 2000 1999 _______ ________ ASSETS Current assets Cash and cash equivalents $ 5,813 $ 1,688 Other marketable securities 50 73 Notes and accounts receivable - net 20,285 19,155 Inventories Crude oil, products and merchandise 7,444 7,370 Materials and supplies 1,055 1,122 Prepaid taxes and expenses 2,404 1,733 ________ ________ Total current assets 37,051 31,141 Property, plant and equipment - net 91,303 94,043 Investments and other assets 18,264 19,337 ________ ________ TOTAL ASSETS $146,618 $144,521 ======== ======== LIABILITIES Current liabilities Notes and loans payable $ 6,617 $ 10,570 Accounts payable and accrued liabilities 27,217 25,492 Income taxes payable 4,758 2,671 ________ ________ Total current liabilities 38,592 38,733 Long-term debt 8,009 8,402 Annuity reserves, deferred credits and other liabilities 33,081 33,920 ________ ________ TOTAL LIABILITIES 79,682 81,055 ________ ________ SHAREHOLDERS' EQUITY Benefit plan related balances (267) (298) Common stock, without par value: Authorized: 4,500 million shares Issued: 4,010 million shares 3,510 3,403 Earnings reinvested 80,002 75,055 Accumulated other nonowner changes in equity Cumulative foreign exchange translation adjustment (4,054) (2,300) Minimum pension liability adjustment (299) (299) Unrealized gains on stock investments 40 31 Common stock held in treasury: 526 million shares at June 30, 2000 (11,996) 533 million shares at Dec. 31, 1999 (12,126) ________ ________ TOTAL SHAREHOLDERS' EQUITY 66,936 63,466 ________ ________ TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $146,618 $144,521 ======== ======== The number of shares of common stock issued and outstanding at June 30, 2000 and December 31, 1999 were 3,483,841,401 and 3,477,423,323, respectively.

-4- EXXON MOBIL CORPORATION CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS (millions of dollars) Six Months Ended June 30, ________________ 2000 1999 ____ ____ CASH FLOWS FROM OPERATING ACTIVITIES Net income $ 8,010 $ 3,438 Depreciation and depletion 4,067 4,160 Changes in operational working capital, excluding cash and debt 2,224 2 All other items - net (2,847) (1,079) _______ _______ Net cash provided by operating activities 11,454 6,521 _______ _______ CASH FLOWS FROM INVESTING ACTIVITIES Additions to property, plant and equipment (3,801) (5,731) Sales of subsidiaries and property, plant and equipment 3,209 520 Other investing activities - net 699 (60) _______ _______ Net cash provided by/(used in) investing activities 107 (5,271) _______ _______ NET CASH GENERATION BEFORE FINANCING ACTIVITIES 11,561 1,250 _______ _______ CASH FLOWS FROM FINANCING ACTIVITIES Additions to long-term debt 143 378 Reductions in long-term debt (280) (164) Additions/(reductions) in short-term debt - net (4,178) 1,878 Cash dividends to ExxonMobil shareholders (3,063) (2,910) Cash dividends to minority interests (91) (88) Changes in minority interests and sales/(purchases) of affiliate stock (112) (236) Net ExxonMobil shares sold/(acquired) 195 (292) _______ _______ Net cash used in financing activities (7,386) (1,434) _______ _______ Effects of exchange rate changes on cash (50) (27) _______ _______ Increase/(decrease) in cash and cash equivalents 4,125 (211) Cash and cash equivalents at beginning of period 1,688 2,386 _______ _______ CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 5,813 $ 2,175 ======= ======= SUPPLEMENTAL DISCLOSURES Income taxes paid $ 2,582 $ 1,267 Cash interest paid $ 476 $ 384

-5- 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 1999 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. 2. Recently Issued Statements of Financial Accounting Standards In June 1998, the Financial Accounting Standards Board released Statement No. 133, "Accounting for Derivative Instruments and Hedging Activities Information." Several requirements of Statement No. 133 were amended in Statement No. 138 issued in June 2000. The accounting and reporting standards for derivative instruments established in these statements must be adopted by Exxon Mobil Corporation beginning no later than January 1, 2001. These statements require that an entity recognize all derivatives as either assets or liabilities in the financial statements and measure those instruments at fair value. These statements also define the accounting for changes in the fair value of the derivatives based on the intended use of the derivative. Adoption of these statements is not expected to have a material effect upon the corporation's operations or financial condition. 3. Merger of Exxon Corporation and Mobil Corporation On November 30, 1999, a wholly-owned subsidiary of Exxon Corporation merged with Mobil Corporation so that Mobil became a wholly-owned subsidiary of Exxon (the "Merger"). At the same time, Exxon changed its name to Exxon Mobil Corporation. As a result of the Merger, the accounts of certain refining, marketing and chemicals operations jointly controlled by the combining companies have been included in the consolidated financial statements. These operations were previously accounted for by Exxon and Mobil as separate companies using the equity method of accounting. The Merger was accounted for as a pooling of interests. Accordingly, the consolidated financial statements give retroactive effect to the Merger, with all periods presented as if Exxon and Mobil had always been combined. In the second quarter of 2000, in association with the Merger, $202 million of before tax costs ($150 million after tax) were recorded as merger related expenses. For the six months ended June 30, 2000 merger related expenses totaled $732 million before tax ($475 million after tax). Charges in the second quarter of 2000 included separation expenses of approximately $120 million related to workforce reductions (for an additional 800 employees) plus other merger implementation expenses. During the quarter, 2,100 employees actually separated and were paid pursuant to various severance plans.

-6- The severance reserve balance is expected to be expended in 2000, 2001 and 2002. The following table summarizes the activity in the severance reserve for the six months ended June 30, 2000: Opening Balance at Balance Additions Deductions Period End _______ _________ __________ __________ (millions of dollars) 330 532 467 395 4. Extraordinary Gain on Required Asset Divestitures Second quarter 2000 results included a net after tax gain of $530 million (net of $75 million of income taxes), or $0.15 per common share, from asset divestments that were required as a condition of the regulatory approval of the Merger. Second quarter divestments included Exxon's Benicia refinery, Exxon marketing assets in California, and certain Mobil European gas marketing operations. For the six months ended June 30, 2000, the net after tax gain from required asset divestitures totaled $985 million (net of $624 million of income taxes). The net after tax gain on required divestments was reported as an extraordinary item according to accounting requirements for business combinations accounted for as a pooling of interests. 5. Litigation and Other Contingencies A number of lawsuits, including class actions, were brought in various courts against the corporation and certain of its subsidiaries relating to the accidental release of crude oil from the tanker Exxon Valdez in 1989. Essentially all of these lawsuits have now been resolved or are subject to appeal. On September 24, 1996, the United States District Court for the District of Alaska entered a judgment in the amount of $5.058 billion in the Exxon Valdez civil trial that began in May 1994. The District Court awarded approximately $19.6 million in compensatory damages to fisher plaintiffs, $38 million in prejudgment interest on the compensatory damages and $5 billion in punitive damages to a class composed of all persons and entities who asserted claims for punitive damages from the corporation as a result of the Exxon Valdez grounding. The District Court also ordered that these awards shall bear interest from and after entry of the judgment. The District Court stayed execution on the judgment pending appeal based on a $6.75 billion letter of credit posted by the corporation. The corporation has appealed the judgment. The corporation has also appealed the District Court's denial of its renewed motion for a new trial. The United States Court of Appeals for the Ninth Circuit heard oral arguments on the appeals on May 3, 1999. In March 2000, the Ninth Circuit ruled solely on the issue of the corporation's renewed motion for a new trial upholding the District Court's denial of the motion. In July 2000, the corporation requested the United States Supreme Court review the Court of Appeals' March decision. The corporation continues to believe that the punitive damages in this case are unwarranted and that the judgment should be set aside or substantially reduced by the appellate courts.

-7- On January 29, 1997, a settlement agreement was concluded resolving all remaining matters between the corporation and various insurers arising from the Valdez accident. Under terms of this settlement, the corporation received $480 million. Final income statement recognition of this settlement continues to be deferred in view of uncertainty regarding the ultimate cost to the corporation of the Valdez accident. The ultimate cost to the corporation from the lawsuits arising from the Exxon Valdez grounding is not possible to predict and may not be resolved for a number of years. Under the October 8, 1991, civil agreement and consent decrees with the U.S. and Alaska governments, the corporation has made annual payments since 1991, which in each of the years 1999, 1998, and 1997, were $70 million. These payments were charged against the provision that was previously established to cover the costs of the settlement. German and Dutch affiliated companies are the concessionaires of a natural gas field subject to a treaty between the governments of Germany and the Netherlands under which the gas reserves in an undefined border or common area are to be shared equally. Entitlement to the reserves is determined by calculating the amount of gas which can be recovered from this area. Based on the final reserve determination, the German affiliate has received more gas than its entitlement. Arbitration proceedings, as provided in the agreements, were conducted to resolve issues concerning the compensation for the overlifted gas. By final award dated July 2, 1999, preceded by an interim award in 1996, an arbitral tribunal established the full amount of the compensation for the excess gas. This amount has now been paid, but the Dutch affiliate is seeking to have the award set aside. Other substantive matters remain outstanding, including recovery of royalties paid on such excess gas and the taxes payable on the final compensation amount. The ultimate outcome is not expected to have a materially adverse effect upon the corporation's operations or financial condition. The U.S. Tax Court has decided the issue with respect to the pricing of crude oil purchased from Saudi Arabia for the years 1979-1981 in favor of the corporation. This decision is subject to appeal. Certain other issues for the years 1979-1988 remain pending before the Tax Court. The ultimate resolution of these issues is not expected to have a materially adverse effect upon the corporation's operations or financial condition. Claims for substantial amounts have been made against the corporation and certain of its consolidated subsidiaries in other pending lawsuits, the outcome of which is not expected to have a materially adverse effect upon the corporation's operations or financial condition. The corporation and certain of its consolidated subsidiaries are directly and indirectly contingently liable for amounts similar to those at the prior year-end relating to guarantees for notes, loans and performance under contracts, including guarantees of non-U.S. excise taxes and customs duties of other companies, entered into as a normal business practice, under reciprocal arrangements. 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.

-8- 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. 6. Nonowner Changes in Shareholders' Equity The total nonowner changes in shareholders' equity for the three months ended June 30, 2000 and 1999 were $3,746 million and $1,657 million, respectively. The total nonowner changes in shareholders' equity for the six months ended June 30, 2000 and 1999 were $6,265 million and $2,323 million, respectively. Total nonowner changes in shareholders' equity include net income and the change in the cumulative foreign exchange translation adjustment, the minimum pension liability adjustment and the unrealized gains on stock investments components of shareholders' equity. 7. Earnings Per Share Three Months Ended Six Months Ended June 30, June 30, __________________ ________________ 2000 1999 2000 1999 ____ ____ ____ ____ NET INCOME PER COMMON SHARE Income before extraordinary item (millions of dollars) $4,000 $1,954 $7,025 $3,438 Less: Preferred stock dividends 0 (13) 0 (27) ______ ______ ______ ______ Income available to common shares $4,000 $1,941 $7,025 $3,411 ====== ====== ====== ====== Weighted average number of common shares outstanding (millions of shares) 3,481 3,451 3,481 3,450 Net income per common share (dollars) Before extraordinary item $ 1.15 $ 0.57 $ 2.02 $ 0.99 Extraordinary gain, net of income tax 0.15 0.00 0.28 0.00 ______ ______ ______ ______ Net income $ 1.30 $ 0.57 $ 2.30 $ 0.99 ====== ====== ====== ====== NET INCOME PER COMMON SHARE - ASSUMING DILUTION Income before extraordinary item (millions of dollars) $4,000 $1,954 $7,025 $3,438 Adjustment for assumed dilution (3) 1 (10) 0 ______ ______ ______ ______ Income available to common shares $3,997 $1,955 $7,015 $3,438 ====== ====== ====== ====== Weighted average number of common shares outstanding (millions of shares) 3,481 3,451 3,481 3,450 Plus: Issued on assumed exercise of stock options 43 48 43 44 Plus: Assumed conversion of preferred stock 0 23 0 23 ______ ______ ______ ______ Weighted average number of common shares outstanding 3,524 3,522 3,524 3,517 ====== ====== ====== ====== Net income per common share - assuming dilution (dollars) Before extraordinary item $ 1.13 $ 0.56 $ 1.99 $ 0.98 Extraordinary gain, net of income tax 0.15 0.00 0.28 0.00 ______ ______ ______ ______ Net income $ 1.28 $ 0.56 $ 2.27 $ 0.98 ====== ====== ====== ======

-9- 8. Disclosures about Segments and Related Information Three Months Ended Six Months Ended June 30, June 30, __________________ ________________ 2000 1999 2000 1999 ____ ____ ____ ____ (millions of dollars) EARNINGS AFTER INCOME TAX (Before extraordinary item) Upstream United States $ 1,086 $ 351 $ 1,966 $ 510 Non-U.S. 1,679 919 3,553 1,552 Downstream United States 594 322 776 384 Non-U.S. 404 156 591 511 Chemicals United States 238 202 419 342 Non-U.S. 124 96 263 267 All Other (125) (92) (543) (128) _______ _______ ________ _______ Corporate Total $ 4,000 $ 1,954 $ 7,025 $ 3,438 ======= ======= ======== ======= SALES AND OTHER OPERATING REVENUE Upstream United States $ 1,195 $ 709 $ 2,191 $ 1,323 Non-U.S. 3,312 2,697 7,115 5,431 Downstream United States 14,100 10,150 27,117 18,058 Non-U.S. 31,696 25,523 62,788 49,131 Chemicals United States 2,113 1,521 4,082 2,926 Non-U.S. 2,302 1,638 4,472 3,149 All Other 218 220 444 422 _______ _______ ________ _______ Corporate Total $54,936 $42,458 $108,209 $80,440 ======= ======= ======== ======= INTERSEGMENT REVENUE Upstream United States $ 1,467 $ 852 $ 2,948 $ 1,501 Non-U.S. 3,971 1,677 7,686 3,099 Downstream United States 1,099 720 1,972 1,066 Non-U.S. 2,188 1,351 4,109 2,441 Chemicals United States 608 450 1,190 804 Non-U.S. 458 321 904 585 All Other 98 177 272 332

-10- EXXON MOBIL CORPORATION Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations FUNCTIONAL EARNINGS SUMMARY Second Quarter First Six Months ______________ ________________ 2000 1999 2000 1999 ____ ____ ____ ____ (millions of dollars) Earnings including merger effects and special items ___________________________________________________ Exploration and production United States $1,086 $ 351 $1,966 $ 510 Non-U.S. 1,679 919 3,553 1,552 Refining and marketing United States 594 322 776 384 Non-U.S. 404 156 591 511 Chemicals United States 238 202 419 342 Non-U.S. 124 96 263 267 Other operations 127 85 246 182 Corporate and financing (102) (157) (314) (283) Merger expenses (150) (20) (475) (27) Gain on required asset divestitures 530 0 985 0 ______ ______ ______ ______ NET INCOME $4,530 $1,954 $8,010 $3,438 ====== ====== ====== ====== Net income per common share $ 1.30 $ 0.57 $ 2.30 $ 0.99 Net income per common share - assuming dilution $ 1.28 $ 0.56 $ 2.27 $ 0.98 Merger effects and special items ________________________________ Exploration and production Non-U.S. $ 0 $ 119 $ 0 $ 119 Refining and marketing Non-U.S. 0 0 0 (120) Merger expenses (150) (20) (475) (27) Gain on required asset divestitures 530 0 985 0 ______ ______ ______ ______ TOTAL $ 380 $ 99 $ 510 $ (28) ====== ====== ====== ====== Earnings excluding merger effects and special items ___________________________________________________ Exploration and production United States $1,086 $ 351 $1,966 $ 510 Non-U.S. 1,679 800 3,553 1,433 Refining and marketing United States 594 322 776 384 Non-U.S. 404 156 591 631 Chemicals United States 238 202 419 342 Non-U.S. 124 96 263 267 Other operations 127 85 246 182 Corporate and financing (102) (157) (314) (283) ______ ______ ______ ______ TOTAL $4,150 $1,855 $7,500 $3,466 ====== ====== ====== ====== Earnings per common share $ 1.20 $ 0.54 $ 2.16 $ 1.00 Earnings per common share - assuming dilution $ 1.18 $ 0.53 $ 2.13 $ 0.99

-11- SECOND QUARTER 2000 COMPARED WITH SECOND QUARTER 1999 Exxon Mobil Corporation reported record results for the second consecutive quarter. Excluding merger effects and special items, estimated second quarter 2000 earnings of $4,150 million ($1.18 per share) increased $2,295 million from the second quarter of last year. Including net favorable merger effects of $380 million, estimated net income of $4,530 million ($1.28 per share) increased $2,576 million from the second quarter of last year. Revenue for the second quarter of 2000 totaled $55,956 million compared with $43,277 million in 1999. Capital and exploration expenditures of $2,424 million in the second quarter of 2000 were up about 10 percent from the first quarter and will continue to increase over the remainder of the year. Second quarter spending was below last year's level of $3,561 million due to the completion of several major projects. ExxonMobil's second quarter 2000 earnings improved substantially from the same period a year ago, and were a second consecutive quarterly record. These results reflect not only historically high crude oil and natural gas prices, but also the fact that the merger is on track and synergy capture is well underway. First half total operating costs, excluding merger expenses, were down about $800 million (before tax) from the first half of 1999. The combined assets of the new company are performing well and the financial results for each of the major businesses improved. The majority of the improvement in profits this quarter came from outside the U.S. and from the upstream business due to higher crude and natural gas prices. These prices, which are the raw material costs for the downstream and chemicals businesses, increased at a faster pace than prices in the highly competitive end-user and consumer market places. Upstream earnings were $2.8 billion and represented a third consecutive record quarter. Upstream results benefited from higher crude oil prices, which were up over $11 per barrel from the second quarter of 1999, reflecting the impact of tight worldwide crude oil markets. Higher natural gas prices, particularly in the U.S., also contributed to improved earnings. Liquids production, excluding the effects of lower entitlements caused by higher crude prices, was 3 percent higher this quarter, mainly reflecting new production from fields in the North Sea and Venezuela and increased production from eastern Canada. Downstream earnings improved from last year's results when business fundamentals were deteriorating due to product oversupply and the inability of product prices to keep pace with rising crude costs. That supply and demand environment persisted through 1999 and has continued into 2000 in many parts of the world. This year's results reflect improved refining margins in the U.S. and Europe, partly offset by lower Asia-Pacific refining margins and lower marketing margins in most geographic areas. As perspective, though higher than the depressed level of 1999, this year's second quarter results are in line with downstream earnings in both the second quarter of 1997 and 1998. Chemicals earnings also improved from last year. Record sales volumes helped earnings. However, in the face of higher feedstock costs the business had difficulty in maintaining margins, particularly in the specialty businesses. Earnings from other operations also improved due to higher copper prices.

-12- During the quarter, ExxonMobil continued its active investment program, spending $2,424 million on capital and exploration projects, up about 10 percent from the first quarter. Capital expenditures should continue to increase throughout the rest of the year. OTHER COMMENTS ON SECOND QUARTER COMPARISON Upstream earnings benefited from higher crude oil prices that averaged over $11 per barrel more than the second quarter of 1999. Worldwide average natural gas realizations were almost 50 percent higher than last year, partly driven by much higher U.S. gas prices as a result of lower industry inventory levels. Lower exploration expenses also benefited upstream results. Liquids production increased 31 kbd (thousands of barrels per day) or 1 percent to 2,504 kbd. Excluding the impact of lower entitlement volumes that resulted from higher crude prices, the increase was 3 percent, reflecting a second full quarter of production from the Balder and Jotun developments in Norway and the Cerro Negro development in Venezuela. These increases more than offset the effects of natural field declines. Second quarter natural gas production of 9,238 mcfd (millions of cubic feet per day) was up 60 mcfd or 1 percent from the prior year due to higher production in Europe, eastern Canada and Qatar, partly offset by lower Indonesian volumes. Earnings from U.S. upstream operations were $1,086 million, an increase of $735 million from the prior year. Upstream earnings outside the U.S. were $1,679 million, an increase of $879 million, after excluding special items of $119 million from 1999. Downstream results improved mainly as a result of stronger refining margins in the U.S. and Europe. Lower operating expenses also benefited earnings. These favorable effects were partly offset by lower refining margins in Asia-Pacific and lower marketing margins in most geographic areas. Petroleum product sales were 7,895 kbd compared with 8,842 kbd in the prior year's second quarter. The reduction was mainly due to the required divestiture of Mobil's European fuels joint venture and lower supply sales in Asia-Pacific as a result of the low margin environment. Sales volumes increased 98 kbd from first quarter. U.S. downstream earnings were $594 million, up $272 million from the prior year as a result of higher refining margins, improved operating performance and lower operating expenses, partly offset by lower marketing margins. Outside of the U.S., higher European refining margins more than offset the effects of lower refining margins in Asia-Pacific and lower marketing margins. Earnings of $404 million were $248 million higher than the second quarter of 1999. Although total downstream earnings improved from last year's depressed levels, the business had difficulty in recovering the significantly higher crude oil costs in the market place. Even with these improved results, the U.S. business made about 5 cents per gallon. Chemicals earnings were $362 million, up $64 million from the same quarter a year ago. Prime product sales volumes of 6,596 kt (thousands of metric tons) were a record and were 456 kt or 7 percent higher than last year. Feedstock cost increases put significant pressure on both commodity and specialty product margins.

-13- Earnings from other operations, including coal, minerals and power, totaled $127 million, compared with $85 million in the second quarter of 1999. Earnings improved on higher copper prices, partly offset by lower coal prices. Corporate and financing expenses of $102 million compared with $157 million in the second quarter of 1999. The decrease was driven by a reduction in administrative expenses as a result of combining Exxon and Mobil headquarters operations. Lower interest expenses as a result of lower debt levels and higher tax-related benefits also contributed to the improvement. During the period, the company's operating segments continued to benefit from reductions in the tax rates of several countries and the favorable resolution of tax-related issues. Second quarter net income included gains on required asset divestments of $530 million, offset by $150 million of merger expenses, including implementation expenses and employee separations. FIRST SIX MONTHS 2000 COMPARED WITH FIRST SIX MONTHS 1999 Excluding merger effects and special items, first half 2000 earnings of $7,500 million ($2.13 per share) increased $4,034 million from the first half of last year. Including net favorable merger effects of $510 million in the current year, net income of $8,010 million ($2.27 per share) increased $4,572 million. Upstream earnings increased due to higher crude oil and natural gas realizations, up 107 percent and 37 percent, respectively. Liquids production of 2,545 kbd compared with 2,506 kbd in the first half of 1999, primarily reflecting new production from the Jotun and Balder fields in Norway and from the Cerro Negro field in Venezuela. Worldwide natural gas production of 10,690 mcfd was up 350 mcfd reflecting higher production in eastern Canada, Europe and Qatar partly offset by lower production in Indonesia. Total oil equivalent production, net of entitlement effects, is 3 percent higher than last year. Exploration expenses were also lower this year. Earnings from U.S. upstream operations for the first six months were $1,966 million, an increase of $1,456 million from 1999. Earnings outside the U.S. were $3,553 million, $2,120 million higher than last year, excluding special items from 1999. Petroleum product sales of 7,846 kbd compared with 8,908 kbd in the first half of 1999. The decrease reflects the effects of the required divestiture of Mobil's European fuels joint venture and lower supply sales in Asia-Pacific as a result of the low margin environment. Overall first half results were impacted by difficulty in recovering the significant increases in raw material costs. Earnings from U.S. downstream operations were $776 million, up $392 million from 1999, reflecting stronger refining margins, improved operations and lower operating expense, partly offset by the effects of lower marketing margins. Excluding special items from 1999, earnings outside the U.S. of $591 million were $40 million lower than last year. The effects of lower Asia- Pacific refining margins and lower marketing margins and volumes were partly offset by stronger European refining margins. Chemicals earnings totaled $682 million in the first half of 2000, up $73 million from last year. Prime product sales volumes of 13,115 kt were 8 percent higher than last year. Stronger industry commodity prices and record production helped offset significant margin pressure on specialty products.

-14- Earnings from other operations totaled $246 million, an increase of $64 million from the first half of 1999, reflecting higher copper prices and higher copper and coal volumes, partly offset by lower coal prices. Corporate and financing expenses increased $31 million to $314 million, primarily reflecting higher interest rates. MERGER OF EXXON CORPORATION AND MOBIL CORPORATION On November 30, 1999, a wholly-owned subsidiary of Exxon Corporation merged with Mobil Corporation so that Mobil became a wholly-owned subsidiary of Exxon (the "Merger"). At the same time, Exxon changed its name to Exxon Mobil Corporation. As a result of the Merger, the accounts of certain refining, marketing and chemicals operations jointly controlled by the combining companies have been included in the consolidated financial statements. These operations were previously accounted for by Exxon and Mobil as separate companies using the equity method of accounting. The Merger was accounted for as a pooling of interests. Accordingly, the consolidated financial statements give retroactive effect to the Merger, with all periods presented as if Exxon and Mobil had always been combined. In the second quarter of 2000, in association with the Merger, $202 million of before tax costs ($150 million after tax) were recorded as merger related expenses. For the six months ended June 30, 2000 merger related expenses totaled $732 million before tax ($475 million after tax). Additional severance and implementation expenses will be recognized during 2000 as the merger implementation program progresses. Charges in the second quarter of 2000 included separation expenses of approximately $120 million related to workforce reductions (for an additional 800 employees) plus other merger implementation expenses. During the quarter, 2,100 employees actually separated and were paid pursuant to various severance plans. The severance reserve balance is expected to be expended in 2000, 2001 and 2002. The following table summarizes the activity in the severance reserve for the six months ended June 30, 2000: Opening Balance at Balance Additions Deductions Period End _______ _________ __________ __________ (millions of dollars) 330 532 467 395 Merger related expenses are expected to grow to approximately $2.5 billion before tax on a cumulative basis by 2002. Pre-tax operating synergies associated with the Merger, including cost savings and efficiency gains, are expected to reach $4.6 billion per year by 2002. Merger synergy initiatives are on track and the rate of benefit capture is expected to increase as the year progresses.

-15- Certain property -- primarily refining, marketing, pipeline and natural gas distribution assets -- must be divested as a condition of the regulatory approval of the Merger by the U.S. Federal Trade Commission and the European Commission. Second quarter 2000 results included a net after tax gain of $530 million (net of $75 million of income taxes), or $0.15 per common share, from such divestments. Second quarter divestments included Exxon's Benicia refinery, Exxon marketing assets in California, and certain Mobil European gas marketing operations. For the six months ended June 30, 2000, the net after tax gain from required asset divestitures totaled $985 million (net of $624 million of income taxes). The net after tax gain on required divestments was reported as an extraordinary item according to accounting requirements for business combinations accounted for as a pooling of interests. Further required divestments will occur during the remainder of the year and are also expected to result in a net gain. LIQUIDITY AND CAPITAL RESOURCES Net cash generation before financing activities was $11,561 million in the first six months of 2000 versus $1,250 million in the same period last year. Operating activities provided net cash of $11,454 million, an increase of $4,933 million from the prior year, influenced by higher net income. Investing activities provided net cash of $107 million, compared to a use of cash of $5,271 million in the prior year, reflecting lower additions to property, plant, and equipment and the proceeds from the asset divestments that were required as a condition of regulatory approval of the merger. Net cash used in financing activities was $7,386 million in the first half of 2000 versus $1,434 million in the same period last year. The increase was driven by debt reductions in the current year period versus debt increases last year. Prior to the merger, the corporation purchased shares of its common stock for the treasury to offset shares issued in conjunction with company benefit plans and programs. Consistent with pooling accounting requirements, these purchases were suspended effective with the close of the ExxonMobil merger on November 30, 1999. On August 1, 2000, the corporation announced its intention to purchase shares. Share purchases are expected to offset the dilution associated with the company's benefit plans and programs and gradually reduce shares of common stock outstanding. Purchases may be made in both the open market and through negotiated transactions, and may be discontinued at any time. Revenue for the first half of 2000 totaled $110,037 million compared to $81,959 million in the first half of 1999. Capital and exploration expenditures were $4,648 million in the first half 2000 compared to $6,915 million in last year's first half. The capital and exploration spending program for 2000 is forecast to be between $11 and $12 billion. Spending over the next several years is projected to be in the $13 billion plus range. Total debt of $14.6 billion at June 30, 2000 decreased $4.3 billion from year-end 1999. The corporation's debt to total capital ratio was 17.2 percent at the end of the first half of 2000, compared to 22.0 percent at year-end 1999.

-16- Over the twelve months ended June 30, 2000, return on average shareholders' equity was 19.4 percent. Return on average capital employed, which includes debt, was 15.2 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. Litigation and other contingencies are discussed in note 5 to the unaudited condensed consolidated financial statements. There are no events or uncertainties known to management beyond those already included in reported financial information that would indicate a material change in future operating results or future financial condition. 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, within the constraints of pooling of interests accounting, which will result in either gains or losses. FORWARD-LOOKING STATEMENTS Statements in this discussion regarding expectations, plans and future events or conditions are forward-looking statements. Actual future results, including synergy benefits from the merger; asset divestment proceeds; financing sources; the resolution of contingencies; the effect of changes in prices, interest rates and other market conditions; and environmental and capital expenditures could differ materially depending on a number of factors. These factors include management's ability to implement merger plans successfully and on schedule; the outcome of commercial negotiations; and other factors discussed above and in Item 1 of ExxonMobil's most recent Annual Report on Form 10-K.

-17- Item 3. Quantitative and Qualitative Disclosures About Market Risk Information about market risks for the six months ended June 30, 2000 does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 1999. PART II. OTHER INFORMATION Item 1. Legal Proceedings On March 29, 2000, the California South Coast Air Quality Management District ("SCAQMD") issued an initial demand letter alleging that Mobil Oil Corporation's Torrance Refinery had underpaid air emissions fees during the period 1994-99 due to the use of incorrect emissions calculation methodologies. In addition to demanding payment of approximately $3,134,000 in fees, the letter proposes penalties of approximately $1,431,000. The SCAQMD Fee Review Committee is scheduled to consider the matter in August, 2000, and discussions with the authorities are on going. On May 1, 2000, a previously-reported matter, involving allegations by the New Jersey Department of Environmental Protection ("NJDEP") that Mobil Oil Corporation's operations of a formerly-owned refinery in Paulsboro, New Jersey, had violated air permit conditions, was settled. The NJDEP had sought penalties of $111,600; the matter was settled with a payment of $67,500. Refer to the relevant portions of Note 5 on pages 7 through 9 of this Quarterly Report on Form 10-Q for further information on legal proceedings.

-18- Item 4. Submission of Matters to a Vote of Security Holders At the annual meeting of shareholders on May 31, 2000, the following proposals were voted upon. Percentages are based on the total of the shares voted for and against. Concerning Election of Directors Votes Votes Nominees for Directors Cast For Withheld ______________________ ________ ________ Michael J. Boskin 2,846,604,419 24,913,064 Rene Dahan 2,847,691,609 23,825,874 William T. Esrey 2,847,188,794 24,328,689 Donald V. Fites 2,843,925,776 27,591,707 Jess Hay 2,844,596,812 26,920,671 Charles A. Heimbold, Jr. 2,846,352,025 25,165,458 James R. Houghton 2,847,385,945 24,131,538 William R. Howell 2,844,686,180 26,831,303 Helene L. Kaplan 2,830,281,297 41,236,186 Reatha Clark King 2,846,811,836 24,705,647 Philip E. Lippincott 2,847,266,037 24,251,446 Harry J. Longwell 2,847,044,723 24,472,760 J. Richard Munro 2,846,096,456 25,421,027 Marilyn Carlson Nelson 2,847,010,223 24,507,260 Lucio A. Noto 2,846,029,043 25,488,440 Lee R. Raymond 2,845,803,311 25,714,172 Eugene A. Renna 2,847,005,957 24,511,526 Walter V. Shipley 2,847,045,215 24,472,268 Concerning Ratification of Independent Accountants Votes Cast For: 2,844,764,945 99.6% Votes Cast Against: 11,618,837 0.4% Abstentions: 15,133,701 Broker Non-Votes: N/A Concerning Term Limit for Nonemployee Directors Votes Cast For: 111,284,864 4.7% Votes Cast Against: 2,231,649,435 95.3% Abstentions: 57,796,237 Broker Non-Votes: 470,786,947 Concerning Policy on Board Diversity Votes Cast For: 182,040,640 7.9% Votes Cast Against: 2,114,109,373 92.1% Abstentions: 104,580,864 Broker Non-Votes: 470,786,606

-19- Concerning Renewable Energy Sources Votes Cast For: 139,602,443 6.2% Votes Cast Against: 2,107,393,495 93.8% Abstentions: 153,740,445 Broker Non-Votes: 470,781,100 Concerning Additional Report on ANWR Drilling Votes Cast For: 122,488,927 5.4% Votes Cast Against: 2,166,399,655 94.6% Abstentions: 111,842,312 Broker Non-Votes: 470,786,589 Concerning Additional Report on Chad-Cameroon Pipeline Votes Cast For: 112,471,825 4.9% Votes Cast Against: 2,170,098,710 95.1% Abstentions: 118,160,357 Broker Non-Votes: 470,786,591 Concerning Amendment of EEO Policy Votes Cast For: 186,005,588 8.3% Votes Cast Against: 2,068,197,745 91.7% Abstentions: 146,527,564 Broker Non-Votes: 470,786,586 Concerning Additional Report on Executive Compensation Votes Cast For: 177,522,028 7.7% Votes Cast Against: 2,123,556,681 92.3% Abstentions: 99,513,516 Broker Non-Votes: 470,925,258 See also pages 3 through 10 and pages 27 through 43 of the registrant's definitive proxy statement dated April 14, 2000. 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.

-20- EXXON MOBIL CORPORATION 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 MOBIL CORPORATION Date: August 14, 2000 /s/ DONALD D. HUMPHREYS _______________________________________________ Donald D. Humphreys, Vice President, Controller and Principal Accounting Officer

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5 THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM EXXONMOBIL'S CONDENSED CONSOLIDATED BALANCE SHEET AT 6/30/00 AND EXXONMOBIL'S CONDENSED CONSOLIDATED STATEMENT OF INCOME FOR THE SIX MONTHS ENDED 6/30/00, THAT ARE CONTAINED IN EXXONMOBIL'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED 6/30/00. THE SCHEDULE IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS. 1,000,000 6-MOS DEC-31-2000 JUN-30-2000 5,813 50 14,983 238 8,499 37,051 187,437 96,134 146,618 38,592 8,009 0 0 3,510 63,426 146,618 108,209 110,037 51,304 51,304 13,184 0 300 11,972 4,947 7,025 0 985 0 8,010 2.30 2.27