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 March 31, 2001
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 March 31, 2001
_______________________________ ________________________________
Common stock, without par value 3,449,876,474
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2001
TABLE OF CONTENTS
Page
Number
______
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Three months ended March 31, 2001 and 2000
Condensed Consolidated Balance Sheet 4
As of March 31, 2001 and December 31, 2000
Condensed Consolidated Statement of Cash Flows 5
Three months ended March 31, 2001 and 2000
Notes to Condensed Consolidated Financial Statement 6-14
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 15-20
Item 3. Quantitative and Qualitative Disclosures About Market Risk 21
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 21
Item 6. Exhibits and Reports on Form 8-K 21
Signature 22
-2-
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(millions of dollars)
Three Months Ended
March 31,
___________________
2000 1999
_______ _______
REVENUE
Sales and other operating revenue,
including excise taxes $56,076 $53,273
Earnings from equity interests and other revenue 1,224 808
_______ _______
Total revenue 57,300 54,081
_______ _______
COSTS AND OTHER DEDUCTIONS
Crude oil and product purchases 24,878 24,964
Operating expenses 4,989 4,285
Selling, general and administrative expenses 3,060 2,877
Depreciation and depletion 1,976 2,128
Exploration expenses, including dry holes 280 210
Merger related expenses 121 530
Interest expense 77 174
Excise taxes 5,294 5,493
Other taxes and duties 8,193 8,082
Income applicable to minority and preferred interests 212 72
_______ _______
Total costs and other deductions 49,080 48,815
_______ _______
INCOME BEFORE INCOME TAXES 8,220 5,266
Income taxes 3,260 2,241
_______ _______
INCOME BEFORE EXTRAORDINARY ITEM 4,960 3,025
Extraordinary gain from required asset divestitures,
net of income tax 40 455
_______ _______
NET INCOME $ 5,000 $ 3,480
======= =======
NET INCOME PER COMMON SHARE (DOLLARS)
Before extraordinary gain $ 1.44 $ 0.87
Extraordinary gain, net of income tax 0.01 0.13
_______ _______
Net income $ 1.45 $ 1.00
======= =======
NET INCOME PER COMMON SHARE
- ASSUMING DILUTION (DOLLARS)
Before extraordinary gain $ 1.42 $ 0.86
Extraordinary gain, net of income tax 0.01 0.13
_______ _______
Net income $ 1.43 $ 0.99
======= =======
DIVIDENDS PER COMMON SHARE $ 0.44 $ 0.44
-3-
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars)
March 31, Dec. 31,
2001 2000
________ ________
ASSETS
Current assets
Cash and cash equivalents $ 10,906 $ 7,080
Notes and accounts receivable - net 21,117 22,996
Inventories
Crude oil, products and merchandise 7,329 7,244
Materials and supplies 1,053 1,060
Prepaid taxes and expenses 2,122 2,019
________ ________
Total current assets 42,527 40,399
Property, plant and equipment - net 88,006 89,829
Investments and other assets 18,253 18,772
________ ________
TOTAL ASSETS $148,786 $149,000
======== ========
LIABILITIES
Current liabilities
Notes and loans payable $ 5,560 $ 6,161
Accounts payable and accrued liabilities 25,164 26,755
Income taxes payable 6,637 5,275
________ ________
Total current liabilities 37,361 38,191
Long-term debt 7,270 7,280
Deferred income tax liability 16,357 16,442
Other long-term liabilities 15,909 16,330
________ ________
TOTAL LIABILITIES 76,897 78,243
________ ________
SHAREHOLDERS' EQUITY
Benefit plan related balances (222) (235)
Common stock, without par value:
Authorized: 4,500 million shares
Issued: 4,010 million shares 3,692 3,661
Earnings reinvested 90,130 86,652
Accumulated other nonowner changes in equity
Cumulative foreign exchange translation adjustment (5,867) (4,862)
Minimum pension liability adjustment (310) (310)
Unrealized losses on stock investments (24) (17)
Common stock held in treasury:
560 million shares at March 31, 2001 (15,510)
545 million shares at December 31, 2000 (14,132)
________ ________
TOTAL SHAREHOLDERS' EQUITY 71,889 70,757
________ ________
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $148,786 $149,000
======== ========
The number of shares of common stock issued and outstanding at March 31,
2001 and December 31, 2000 were 3,449,876,474 and 3,465,003,114,
respectively.
-4-
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Three Months Ended
March 31,
___________________
2001 2000
_______ _______
CASH FLOWS FROM OPERATING ACTIVITIES
Net income $ 5,000 $ 3,480
Depreciation and depletion 1,976 2,128
Changes in operational working capital, excluding
cash and debt 1,678 1,830
All other items - net 75 (1,948)
_______ _______
Net cash provided by operating activities 8,729 5,490
_______ _______
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment (2,028) (1,769)
Sales of subsidiaries, investments, and property,
plant and equipment 287 1,982
Other investing activities - net 649 645
_______ _______
Net cash provided by/(used in) investing activities (1,092) 858
_______ _______
NET CASH GENERATION BEFORE FINANCING ACTIVITIES 7,637 6,348
_______ _______
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt 243 85
Reductions in long-term debt (214) (282)
Additions/(reductions) in short-term debt - net (720) (3,334)
Cash dividends to ExxonMobil shareholders (1,522) (1,531)
Cash dividends to minority interests (63) (63)
Changes in minority interests and sales/(purchases)
of affiliate stock (16) (42)
Net ExxonMobil shares sold/(acquired) (1,370) 109
_______ _______
Net cash provided by/(used in) financing activities (3,662) (5,058)
_______ _______
Effects of exchange rate changes on cash (149) (50)
_______ _______
Increase/(decrease) in cash and cash equivalents 3,826 1,240
Cash and cash equivalents at beginning of period 7,080 1,688
_______ _______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $10,906 $ 2,928
======= =======
SUPPLEMENTAL DISCLOSURES
Income taxes paid $ 1,491 $ 974
Cash interest paid $ 166 $ 225
-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 2000 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. Accounting Change
As of January 1, 2001, ExxonMobil adopted Financial Accounting Standards
Board Statement No. 133 (FAS 133), "Accounting for Derivative Instruments
and Hedging Activities" as amended by Statements No. 137 and 138. This
statement requires that all derivatives be recognized as either assets or
liabilities in the financial statements and be measured at fair value.
Since the corporation makes limited use of derivatives, the effect of
adoption of FAS 133 on the corporation's operations or financial
condition was negligible.
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. The Merger was accounted for as a pooling
of interests.
In the first quarter of 2001, in association with the Merger, $121 million
of before tax costs ($90 million after tax) were recorded as merger
related expenses. In the first quarter of 2000, merger related costs were
$530 million before tax ($325 million after tax). The severance reserve
balance at the end of the first quarter of 2001 is expected to be expended
in 2001 and 2002. The following table summarizes the activity in the
severance reserve for the quarter ended March 31, 2001:
Opening Balance at
Balance Additions Deductions Period End
_______ _________ __________ __________
(millions of dollars)
317 35 113 239
-6-
4. Extraordinary Gains on Required Asset Divestitures
First quarter 2001 results included a net after tax gain of $40 million
(including an income tax credit of $15 million), or $0.01 per common
share, from asset divestments that were required as a condition of the
regulatory approval of the Merger. The gain represents further resolution
of certain issues associated with the sale of Mobil's interest in the
European fuels joint venture with British Petroleum. First quarter 2000
included a net after tax gain of $455 million (net of $549 million of
income taxes) or $0.13 per common share from required asset divestments.
These net gains on required divestments have been reported as
extraordinary items in accordance with 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 Exxon Mobil 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. ExxonMobil has appealed the judgment. The United States
Court of Appeals for the Ninth Circuit heard oral arguments on the appeal
on May 3, 1999. 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.
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, ExxonMobil
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 ExxonMobil 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 will make a final payment of
$70 million in 2001. This payment, along with prior payments, will be
charged against the provision that was previously established to cover
the costs of the settlement.
-7-
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 and a petition to set the
award aside has now been dismissed, rendering the award final in all
respects. Other substantive matters remain outstanding, including
recovery of royalties paid on such excess gas and the taxes payable on
the final compensation amount. The net financial impact on the
corporation is not possible to predict at this time. However, the
ultimate outcome is not expected to have a materially adverse effect upon
the corporation's operations or financial condition.
On December 19, 2000, a jury in Montgomery County, Alabama, returned a
verdict against the corporation in a contract dispute over royalties in
the amount of $87.69 million in compensatory damages and $3.42 billion in
punitive damages in the case of Exxon Corporation v. State of Alabama,
et al. The verdict was upheld by the trial court on May 4, 2001.
ExxonMobil will appeal the verdict and believes that the verdict is
unwarranted and that the judgement should be set aside or substantially
reduced. 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 1979-1993 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 ExxonMobil 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 March 31, 2001 and 2000 were $3,988 million and $2,519 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 and losses on stock investments components of shareholders' equity.
7. Earnings Per Share
Three Months Ended
March 31,
__________________
2001 2000
______ ______
NET INCOME PER COMMON SHARE
Income before extraordinary item (millions of dollars) $4,960 $3,025
Weighted average number of common shares
outstanding (millions of shares) 3,457 3,478
Net income per common share (dollars)
Before extraordinary gain $ 1.44 $ 0.87
Extraordinary gain, net of income tax 0.01 0.13
______ ______
Net income $ 1.45 $ 1.00
====== ======
NET INCOME PER COMMON SHARE - ASSUMING DILUTION
Income before extraordinary item (millions of dollars) $4,960 $3,025
Adjustment for assumed dilution (3) 2
______ ______
Income available to common shares $4,957 $3,027
====== ======
Weighted average number of common shares
outstanding (millions of shares) 3,457 3,478
Plus: Issued on assumed exercise of stock options 38 44
______ ______
Weighted average number of common shares outstanding 3,495 3,522
====== ======
Net income per common share
- assuming dilution (dollars)
Before extraordinary gain $ 1.42 $ 0.86
Extraordinary gain, net of income tax 0.01 0.13
______ ______
Net income $ 1.43 $ 0.99
====== ======
-9-
8. Disclosures about Segments and Related Information
Three Months Ended
March 31,
___________________
2001 2000
________ _______
(millions of dollars)
EARNINGS AFTER INCOME TAX
(Before extraordinary item)
Upstream
United States $ 1,628 $ 880
Non-U.S. 2,150 1,874
Downstream
United States 409 182
Non-U.S. 590 187
Chemicals
United States 45 181
Non-U.S. 155 139
All Other (17) (418)
_______ _______
Corporate Total $ 4,960 $ 3,025
======= =======
SALES AND OTHER OPERATING REVENUE
Upstream
United States $ 2,286 $ 996
Non-U.S. 4,497 3,803
Downstream
United States 12,729 13,017
Non-U.S. 31,928 31,092
Chemicals
United States 1,965 1,969
Non-U.S. 2,445 2,170
All Other 226 226
_______ _______
Corporate Total $56,076 $53,273
======= =======
INTERSEGMENT REVENUE
Upstream
United States $ 1,970 $ 1,481
Non-U.S. 3,427 3,218
Downstream
United States 1,292 873
Non-U.S. 4,032 2,418
Chemicals
United States 698 671
Non-U.S. 586 446
All Other 51 30
-10-
9. Condensed Consolidating Financial Information Related to Guaranteed
Securities Issued by Subsidiaries
Exxon Mobil Corporation has fully and unconditionally guaranteed the
6.0% notes due 2005 and the 6.125% notes due 2008 of Exxon Capital
Corporation and the deferred interest debentures due 2012 and the debt
securities due 2001-2011 of SeaRiver Maritime Financial Holdings, Inc.
Exxon Capital Corporation and SeaRiver Maritime Financial Holdings, Inc.
are 100 percent owned subsidiaries of Exxon Mobil Corporation.
The following condensed consolidating financial information is provided
for Exxon Mobil Corporation, as guarantor, and for Exxon Capital
Corporation and SeaRiver Maritime Financial Holdings, Inc., as issuers,
as an alternative to providing separate financial statements for the
issuers. The accounts of Exxon Mobil Corporation, Exxon Capital
Corporation and SeaRiver Maritime Financial Holdings, Inc., are
presented utilizing the equity method of accounting for investments in
subsidiaries.
Exxon SeaRiver
Mobil Maritime Consolidating
Corporation Exxon Financial and
Parent Capital Holdings, All Other Eliminating
Guarantor Corporation Inc. Subsidiaries Adjustments Consolidated
___________ ___________ __________ ____________ _____________ ____________
(millions of dollars)
Condensed consolidated statement of income for three months ended March 31, 2001
________________________________________________________________________________
Revenue
Sales and other
operating revenue,
including excise
taxes $9,256 $ - $ - $46,820 $ - $56,076
Earnings from equity
interests and other
revenue 4,352 - 16 1,063 (4,207) 1,224
Intercompany revenue 1,128 294 21 27,346 (28,789) -
_______ _____ _____ ________ ________ _______
Total revenue 14,736 294 37 75,229 (32,996) 57,300
_______ _____ _____ ________ ________ _______
Costs and other
deductions
Crude oil and product
purchases 5,488 - - 45,402 (26,012) 24,878
Operating expenses 1,679 1 - 4,240 (931) 4,989
Selling, general and
administrative
expenses 509 - - 2,551 - 3,060
Depreciation and
depletion 376 1 1 1,598 - 1,976
Exploration expenses,
including dry holes 44 - - 236 - 280
Merger related
expenses 35 - - 86 - 121
Interest expense 380 275 31 1,237 (1,846) 77
Excise taxes 608 - - 4,686 - 5,294
Other taxes and duties 4 - - 8,189 - 8,193
Income applicable to
minority and
preferred interests - - - 212 - 212
______ _____ _____ _______ _______ _______
Total costs and
other deductions 9,123 277 32 68,437 (28,789) 49,080
_______ _____ _____ _______ ________ _______
Income before income
taxes 5,613 17 5 6,792 (4,207) 8,220
Income taxes 653 6 (4) 2,605 - 3,260
_______ _____ _____ _______ ________ _______
Income before
extraordinary item 4,960 11 9 4,187 (4,207) 4,960
Extraordinary gain,
net of income tax 40 - - 25 (25) 40
_______ _____ _____ _______ ________ _______
Net income $ 5,000 $ 11 $ 9 $ 4,212 $ (4,232) $ 5,000
======= ===== ===== ======= ======== =======
-11-
Exxon SeaRiver
Mobil Maritime Consolidating
Corporation Exxon Financial and
Parent Capital Holdings, All Other Eliminating
Guarantor Corporation Inc. Subsidiaries Adjustments Consolidated
___________ ___________ _________ ____________ _____________ ____________
(millions of dollars)
Condensed consolidated statement of income for three months ended March 31, 2000
________________________________________________________________________________
Revenue
Sales and other operating
revenue, including
excise taxes $ 8,108 $ - $ - $45,165 $ - $53,273
Earnings from equity
interests and other
revenue 2,756 - 6 705 (2,659) 808
Intercompany revenue 458 179 17 19,426 (20,080) -
_______ _____ _____ _______ ________ _______
Total revenue 11,322 179 23 65,296 (22,739) 54,081
_______ _____ _____ _______ ________ _______
Costs and other
deductions
Crude oil and product
purchases 4,589 - - 39,187 (18,812) 24,964
Operating expenses 1,296 - - 3,277 (288) 4,285
Selling, general and
administrative
expenses 438 - (2) 2,441 - 2,877
Depreciation and
depletion 336 1 1 1,790 - 2,128
Exploration expenses,
including dry holes 34 - - 176 - 210
Merger related
expenses 197 - - 333 - 530
Interest expense 311 162 28 653 (980) 174
Excise taxes 728 - - 4,765 - 5,493
Other taxes and
duties 3 - - 8,079 - 8,082
Income applicable to
minority and
preferred interests - - - 72 - 72
_______ _____ _____ _______ ________ _______
Total costs and
other deductions 7,932 163 27 60,773 (20,080) 48,815
_______ _____ _____ _______ ________ _______
Income before income
taxes 3,390 16 (4) 4,523 (2,659) 5,266
Income taxes 365 4 (4) 1,876 - 2,241
_______ _____ _____ _______ ________ _______
Income before
extraordinary item 3,025 12 - 2,647 (2,659) 3,025
Extraordinary gain,
net of income tax 455 - - 430 (430) 455
_______ _____ _____ _______ ________ _______
Net income $ 3,480 $ 12 $ - $ 3,077 $ (3,089) $ 3,480
======= ===== ===== ======= ======== =======
-12-
Exxon SeaRiver
Mobil Maritime Consolidating
Corporation Exxon Financial and
Parent Capital Holdings, All Other Eliminating
Guarantor Corporation Inc. Subsidiaries Adjustments Consolidated
___________ ___________ __________ ___________ _____________ ____________
(millions of dollars)
Condensed consolidated balance sheet as of March 31, 2001
_________________________________________________________
Cash and cash
equivalents $ 5,541 $ - $ - $ 5,365 $ - $ 10,906
Notes and accounts
receivable - net 4,055 - - 17,062 - 21,117
Inventories 1,145 - - 7,237 - 8,382
Other current assets 205 - 4 1,913 - 2,122
________ _______ ______ ________ _________ ________
Total current
assets 10,946 - 4 31,577 - 42,527
Property, plant and
equipment - net 18,535 112 8 69,351 - 88,006
Investments and other
assets 83,227 - 574 308,375 (373,923) 18,253
Intercompany receivables 6,554 22,011 1,352 196,977 (226,894) -
________ _______ ______ ________ _________ ________
Total assets $119,262 $22,123 $1,938 $606,280 $(600,817) $148,786
======== ======= ====== ======== ========= ========
Notes and loan payables $ 62 $ 51 $ 7 $ 5,440 $ - $ 5,560
Accounts payable and
accrued liabilities 3,664 8 2 21,490 - 25,164
Income taxes payable 1,424 15 - 5,198 - 6,637
________ _______ ______ ________ _________ ________
Total current
liabilities 5,150 74 9 32,128 - 37,361
Long-term debt 1,221 269 949 4,831 - 7,270
Deferred income tax
liabilities 3,350 34 291 12,682 - 16,357
Other long-term
liabilities 4,439 - - 11,470 - 15,909
Intercompany payables 33,213 20,873 382 172,426 (226,894) -
________ _______ ______ ________ _________ ________
Total liabilities 47,373 21,250 1,631 233,537 (226,894) 76,897
Earnings reinvested 90,130 67 (87) 40,847 (40,827) 90,130
Other shareholders'
equity (18,241) 806 394 331,896 (333,096) (18,241)
________ _______ ______ ________ _________ ________
Total shareholders'
equity 71,889 873 307 372,743 (373,923) 71,889
________ _______ ______ ________ _________ ________
Total liabilities
and shareholders'
equity $119,262 $22,123 $1,938 $606,280 $(600,817) $148,786
======== ======= ====== ======== ========= ========
Condensed consolidated balance sheet as of December 31, 2000
____________________________________________________________
Cash and cash
equivalents $ 4,235 $ - $ - $ 2,845 $ - $ 7,080
Notes and accounts
receivable - net 4,427 - - 18,569 - 22,996
Inventories 1,102 - - 7,202 - 8,304
Other current assets 262 - 14 1,743 - 2,019
________ _______ ______ ________ _________ ________
Total current
assets 10,026 - 14 30,359 - 40,399
Property, plant and
equipment - net 18,559 113 9 71,148 - 89,829
Investments and other
assets 80,097 2 558 308,584 (370,469) 18,772
Intercompany receivables 9,339 19,124 1,355 212,790 (242,608) -
________ _______ ______ ________ _________ ________
Total assets $118,021 $19,239 $1,936 $622,881 $(613,077) $149,000
======== ======= ====== ======== ========= ========
Notes and loan payables $ 60 $ 74 $ 7 $ 6,020 $ - $ 6,161
Accounts payable and
accrued liabilities 3,918 8 2 22,827 - 26,755
Income taxes payable 902 9 - 4,364 - 5,275
________ _______ ______ ________ _________ ________
Total current
liabilities 4,880 91 9 33,211 - 38,191
Long-term debt 1,209 281 925 4,865 - 7,280
Deferred income tax
liabilities 3,334 31 292 12,785 - 16,442
Other long-term
liabilities 4,428 9 - 11,893 - 16,330
Intercompany payables 33,413 17,965 412 190,818 (242,608) -
________ _______ ______ ________ _________ _______
Total liabilities 47,264 18,377 1,638 253,572 (242,608) 78,243
Earnings reinvested 86,652 56 (96) 36,946 (36,906) 86,652
Other shareholders'
equity (15,895) 806 394 332,363 (333,563) (15,895)
_______ _______ ______ ________ _________ ________
Total shareholders'
equity 70,757 862 298 369,309 (370,469) 70,757
_______ _______ ______ ________ _________ ________
Total liabilities
and shareholders'
equity $118,021 $19,239 $1,936 $622,881 $(613,077) $149,000
======== ======= ====== ======== ========= ========
-13-
Exxon SeaRiver
Mobil Maritime Consolidating
Corporation Exxon Financial and
Parent Capital Holdings, All Other Eliminating
Guarantor Corporation Inc. Subsidiaries Adjustments Consolidated
___________ ___________ _________ ____________ ______________ ____________
(millions of dollars)
Condensed consolidated statement of cash flows for three months ended March 31, 2001
____________________________________________________________________________________
Cash provided by/(used in)
operating activities $2,052 $ 14 $ 27 $ 6,921 $ (285) $ 8,729
______ _______ _____ _______ ______ _______
Cash flows from investing
activities
Additions to property,
plant and equipment (445) - - (1,583) - (2,028)
Sales of long-term
assets 110 - - 177 - 287
Net intercompany
investing 2,492 (2,887) 3 437 (45) -
All other investing,
net (12) - - 661 - 649
______ _______ _____ _______ ______ _______
Net cash provided
by/(used in)
investing
activities 2,145 (2,887) 3 (308) (45) (1,092)
______ _______ _____ _______ ______ _______
Cash flows from financing
activities
Additions to long-term
debt - - 243 - 243
Reductions in long-term
debt (1) (12) - (201) - (214)
Additions/(reductions)
in short-term debt
- net 2 (23) - (699) - (720)
Cash dividends (1,522) - - (285) 285 (1,522)
Net ExxonMobil shares
sold/(acquired) (1,370) - - - - (1,370)
Net intercompany
financing activity - 2,908 (30) (2,923) 45 -
All other financing,
net - - - (79) - (79)
______ _______ _____ _______ ______ _______
Net cash provided
by/(used in)
financing
activities (2,891) 2,873 (30) (3,944) 330 (3,662)
______ _______ _____ _______ ______ _______
Effects of exchange rate
changes on cash - - - (149) - (149)
______ _______ _____ _______ ______ _______
Increase/(decrease) in
cash and cash
equivalents $1,306 $ - $ - $ 2,520 $ - $ 3,826
====== ======= ===== ======= ====== =======
Condensed consolidated statement of cash flows for three months ended March 31, 2000
____________________________________________________________________________________
Cash provided by/(used in)
operating activities $1,513 $ (2) $ 31 $ 4,039 $ (91) $ 5,490
______ _______ _____ _______ ______ _______
Cash flows from
investing activities
Additions to property,
plant and equipment (342) - - (1,427) - (1,769)
Sales of long-term
assets 228 - - 1,754 - 1,982
Net intercompany
investing 1,122 (403) (32) (722) 35 -
All other investing, net 81 - - 564 - 645
______ _______ _____ _______ ______ _______
Net cash provided
by/(used in)
investing
activities 1,089 (403) (32) 169 35 858
______ _______ _____ _______ ______ _______
Cash flows from financing
activities
Additions to long-term
debt - - - 85 - 85
Reductions in long-term
debt - - - (282) - (282)
Additions/(reductions)
in short-term debt
- net (967) 9 - (2,376) - (3,334)
Cash dividends (1,531) - - (91) 91 (1,531)
Net ExxonMobil shares
sold/(acquired) 109 - - - - 109
Net intercompany
financing activity - 396 1 (362) (35) -
All other financing, net - - - (105) - (105)
______ _______ _____ _______ ______ _______
Net cash provided
by/(used in)
financing
activities (2,389) 405 1 (3,131) 56 (5,058)
______ _______ _____ _______ ______ _______
Effects of exchange rate
changes on cash - - - (50) - (50)
______ _______ _____ _______ ______ _______
Increase/(decrease) in
cash and cash
equivalents $ 213 $ - $ - $ 1,027 $ - $ 1,240
====== ======= ===== ======= ====== =======
-14-
EXXON MOBIL CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition and
Results of Operations
FUNCTIONAL EARNINGS SUMMARY
First Quarter
_____________________
2001 2000
______ ______
(millions of dollars)
Earnings including merger effects
_________________________________
Upstream
United States $1,628 $ 880
Non-U.S. 2,150 1,874
Downstream
United States 409 182
Non-U.S. 590 187
Chemicals
United States 45 181
Non-U.S. 155 139
Other operations 141 119
Corporate and financing (68) (212)
Merger expenses (90) (325)
Gain from required asset divestitures 40 455
______ ______
NET INCOME $5,000 $3,480
====== ======
Net income per common share $ 1.45 $ 1.00
Net income per common share
- assuming dilution $ 1.43 $ 0.99
Merger effects
______________
Merger expenses $ (90) $ (325)
Gain from required asset divestitures 40 455
______ ______
TOTAL $ (50) $ 130
====== ======
Earnings excluding merger effects
_________________________________
Upstream
United States $1,628 $ 880
Non-U.S. 2,150 1,874
Downstream
United States 409 182
Non-U.S. 590 187
Chemicals
United States 45 181
Non-U.S. 155 139
Other operations 141 119
Corporate and financing (68) (212)
______ ______
TOTAL $5,050 $3,350
====== ======
Earnings per common share $ 1.46 $ 0.96
Earnings per common share
- assuming dilution $ 1.44 $ 0.95
-15-
FIRST QUARTER 2001 COMPARED WITH FIRST QUARTER 2000
Exxon Mobil Corporation reported record first quarter results. Excluding net
merger effects, estimated first quarter 2001 earnings of $5,050 million ($1.44
per share) increased $1,700 million (51 percent) from the first quarter of
2000. Including net merger effects, net income of $5,000 million ($1.43 per
share) increased $1,520 million. Revenue for the first quarter of 2001 totaled
$57,300 million compared with $54,081 million in 2000. Capital and exploration
expenditures of $2,516 million in the first quarter of 2001 were up
$292 million, or 13 percent, compared with $2,224 million last year.
The record first quarter results reflected higher natural gas realizations and
refining margins as well as continued improvements in operating efficiencies
across the corporation. Volumes increased in every business line except for
natural gas, which was affected by the controlled shutdown of facilities in the
Aceh province of Indonesia. Capital expenditures increased in line with higher
full-year spending plans.
Upstream earnings were $3.8 billion, a sixth consecutive quarterly earnings
record. These results were $1,024 million, or 37 percent higher than in the
same period a year ago, driven by higher average natural gas realizations,
especially in the U.S. This was partly offset by lower crude oil prices and
higher exploration expenses. Liquids production increased 1 percent with growth
in Equatorial Guinea, Venezuela, Kazakhstan and Canada. These increases were
partly offset by lower natural gas liquids production in the U.S. due to
reducing gas plant processing rates to maximize natural gas availability. Gas
volumes increased by about 1 percent absent the impact of the Aceh shutdown.
Downstream earnings were nearly one billion dollars, a substantial improvement
from last year's first quarter results when rising crude prices depressed
margins. First quarter 2001 results reflected improved refinery performance and
stronger refining margins in the U.S. and Europe. Refining margins remained
weak in Asia-Pacific. Marketing margins outside the U.S. improved, but remained
below historical levels. Marketing margins in the U.S. remained depressed.
Sales volumes increased 3 percent and, when adjusted for the impact of U.S.
businesses divested as a condition of the regulatory approval of the merger,
were up 4 percent.
Chemicals earnings declined despite higher sales volumes that exceeded the
record first quarter levels achieved last year. Higher U.S. natural gas prices
drove up feedstock costs, lowering U.S. earnings in the early part of the
quarter to near breakeven levels. Outside of the U.S., positive volume effects
were partly offset by weaker margins and unfavorable foreign exchange impacts.
Earnings from other operations improved on higher coal realizations and
favorable foreign exchange effects.
During the quarter, ExxonMobil continued its active investment program,
spending $2,516 million on capital and exploration projects, compared with
$2,224 million last year, reflecting higher activity in both the upstream and
downstream.
During the first quarter, the Corporation acquired 17.5 million shares at a
gross cost of $1,442 million to offset the dilution associated with benefit
plans and to reduce common stock outstanding.
-16-
OTHER COMMENTS ON FIRST QUARTER COMPARISON
Upstream earnings benefited from higher worldwide average natural gas
realizations, driven by much higher U.S. gas prices as a result of growing
demand and low inventory levels. The favorable earnings impact of higher
natural gas prices was partly offset by lower crude realizations.
Liquids production of 2,619 kbd (thousands of barrels per day) increased from
2,602 kbd in the first quarter of 2000. This increase reflected higher
production in Equatorial Guinea, Venezuela, Kazakhstan and Canadian heavy oil
operations, partly offset by lower production in the U.S. due to a decision to
reduce gas plant processing to maximize natural gas sales, and by natural field
declines in mature areas. First quarter natural gas production of 12,083 mcfd
(millions of cubic feet per day) compared with 12,146 mcfd last year. Absent
the effect of suspending operations in the Aceh province of Indonesia due to
security concerns, worldwide gas production would have been up about 1 percent,
reflecting higher production in Qatar. In North America, higher gas volumes in
eastern Canada offset natural field declines in mature areas.
Earnings from U.S. upstream operations were $1,628 million, an increase of
$748 million from the prior year. Upstream earnings outside the U.S. were
$2,150 million, an increase of $276 million.
Downstream results improved substantially from the first quarter of last year
reflecting stronger refining margins in the U.S. and Europe, with continued
weakness in Asia-Pacific. Improved refinery performance also benefited
earnings. In the U.S. there was an increase in refinery turnaround costs in
preparation for the upcoming driving season. Marketing margins outside the U.S.
improved modestly, but remained below historical levels. Marketing margins in
the U.S. remained depressed. Petroleum product sales were 8,010 kbd, 214 kbd
higher than the prior year's first quarter, as higher supply sales mainly in
Asia-Pacific were partly offset by the absence of volumes from operations
divested as a requirement of the merger.
U.S. downstream earnings were $409 million, up $227 million. Non-U.S.
downstream earnings of $590 million were $403 million higher than last year.
Chemicals earnings were $200 million, down $120 million from the same quarter a
year ago as higher feedstock and energy costs, particularly in the U.S., put
significant pressure on commodity margins. Prime product sales volumes of
6,533 kt (thousands of metric tons) were slightly above last year's record
level.
Earnings from other operations, including coal, minerals and power, totaled
$141 million, compared with $119 million in the first quarter of 2000. Key
contributors were higher coal realizations and favorable foreign exchange
effects.
Corporate and financing expenses of $68 million compared with $212 million in
the first quarter of 2000. The decrease reflected lower net interest costs due
to lower debt levels and significantly higher cash balances, and also reflected
increased tax-related benefits.
During the period, the company's operating segments continued to benefit from
reductions in the tax rates of several countries and favorable resolution of
tax-related issues.
First quarter net income included gains on required asset divestments of
$40 million and $90 million of merger expenses.
-17-
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. The Merger was accounted for as a pooling of interests.
In the first quarter of 2001, in association with the Merger, $121 million of
before tax costs ($90 million after tax) were recorded as merger related
expenses. In the first quarter of 2000, merger related costs were $530 million
before tax ($325 million after tax). The severance reserve balance at the end
of the first quarter of 2001 is expected to be expended in 2001 and 2002. The
following table summarizes the activity in the severance reserve for the
quarter ended March 31, 2001:
Opening Balance at
Balance Additions Deductions Period End
_______ _________ __________ __________
(millions of dollars)
317 35 113 239
Merger related expenses are expected to grow to approximately $2.5 billion
before tax on a cumulative basis by 2002. Merger synergy initiatives, including
cost savings, efficiency gains, and revenue enhancements, are on track.
Certain property -- primarily refining, marketing, pipeline and natural gas
distribution assets -- were divested in 2000 as a condition of the regulatory
approval of the Merger by the U.S. Federal Trade Commission and the European
Commission. First quarter 2001 results included a net after tax gain of $40
million (including an income tax credit of $15 million), or $0.01 per common
share, from asset divestments that were required as a condition of the
regulatory approval of the Merger. The gain represents further resolution of
certain issues associated with the sale of Mobil's interest in the European
fuels joint venture with British Petroleum. First quarter 2000 included a net
after tax gain of $455 million (net of $549 million of income taxes) or
$0.13 per common share from required asset divestments. These net gains on
required divestments have been reported as extraordinary items in accordance
with accounting requirements for business combinations accounted for as a
pooling of interests.
-18-
LIQUIDITY AND CAPITAL RESOURCES
Net cash generation before financing activities was $7,637 million in the first
three months of 2001 versus $6,348 million in the same period last year.
Operating activities provided net cash of $8,729 million, an increase of $3,239
million from the prior year, influenced by higher net income. Investing
activities used net cash of $1,092 million, compared to cash provided of
$858 million in the prior year, reflecting the absence of proceeds from the
asset divestments in 2000 that were required as a condition of regulatory
approval of the merger.
Net cash used in financing activities was $3,662 million in the first quarter
of 2001 versus $5,058 million in the same quarter last year. The decrease was
driven by lower debt reductions in the current year period versus last year,
partially offset by purchases of shares of ExxonMobil common stock.
During the first quarter of 2001, Exxon Mobil Corporation purchased
17.5 million shares of its common stock for the treasury at a gross cost of
$1,442 million. These purchases were to offset shares issued in conjunction
with company benefit plans and programs and to reduce the number of shares
outstanding. Shares outstanding were reduced from 3,465 million at the end of
2000 to 3,450 million at the end of the first quarter 2001. Purchases may be
made in both the open market and through negotiated transactions, and may be
discontinued at any time.
Revenue for the first quarter of 2001 totaled $57,300 million compared to
$54,081 million in the first quarter 2000.
Capital and exploration expenditures were $2,516 million in the first quarter
2001 compared to $2,224 million in last year's first quarter. Given the
breadth of ExxonMobil's portfolio of attractive growth opportunities, capital
and exploration investments are expected to increase by 15 to 20 percent in
2001 versus 2000 and another 10 percent in 2002.
Total debt of $12.8 billion at March 31, 2001 decreased $0.6 billion from
year-end 2000. The corporation's debt to total capital ratio was 14.6 percent
at the end of the first quarter of 2001, compared to 15.4 percent at year-end
2000.
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.
-19-
FORWARD-LOOKING STATEMENTS
Statements in this discussion regarding expectations, plans and future
events or conditions are forward-looking statements. Actual future
results, including merger related expenses; synergy benefits from the
merger (including cost savings, efficiency gains, and revenue
enhancements); 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; changes in the supply of and demand
for crude oil, natural gas and petroleum and petrochemical products; and
other factors discussed above and discussed under the caption "Factors
Affecting Future Results" in Item 1 of ExxonMobil's 2000 Form 10-K.
-20-
EXXON MOBIL CORPORATION
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risks for the three months ended March 31,
2001 does not differ materially from that discussed under Item 7A of
the registrant's Annual Report on Form 10-K for 2000.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On January 19, 2001, the Environmental Protection Agency (EPA) issued
a Notice of Violation regarding the corporation's Baytown, Texas
refinery, alleging that two projects at the refinery conducted during
the 1980's resulted in significant net emission increases of at least
NOx and alleging that the corporation failed to obtain Prevention of
Significant Deterioration permits. On January 29, 2001, the EPA issued
a Notice of Violation regarding the former Mobil refinery at
Paulsboro, New Jersey, alleging that projects undertaken during 1988
and 1992 triggered New Source Review pre-construction permitting and
pollution control requirements. Both Notices of Violation were issued
in connection with the EPA's New Source Review Enforcement Initiative.
Neither Notice included a demand for specific fines or penalties. The
corporation and the EPA are expected to commence discussions regarding
the Notices during the second quarter.
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.
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
The registrant has no exhibits for the period ended March 31, 2001.
b) Reports on Form 8-K
The registrant has not filed any reports on Form 8-K during the
quarter.
-21-
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: May 14, 2001
/s/ DONALD D. HUMPHREYS
_______________________________________________
Donald D. Humphreys, Vice President, Controller
and Principal Accounting Officer
-22-