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, 2008
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 by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.
Large accelerated filer X
Accelerated filer
Non-accelerated filer
Smaller reporting company
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes No X
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, 2008
Common stock, without par value 5,283,694,459
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2008
TABLE OF CONTENTS
Page
Number
PART I. FINANCIAL INFORMATION
Item 1.
Financial Statements
Condensed Consolidated Statement of Income
3
Three months ended March 31, 2008 and 2007
Condensed Consolidated Balance Sheet
4
As of March 31, 2008 and December 31, 2007
Condensed Consolidated Statement of Cash Flows
5
Three months ended March 31, 2008 and 2007
Notes to Condensed Consolidated Financial Statements
6-14
Item 2.
Management's Discussion and Analysis of Financial
Condition and Results of Operations
15-18
Item 3.
Quantitative and Qualitative Disclosures About Market Risk
19
Item 4.
Controls and Procedures
19
PART II. OTHER INFORMATION
Item 1.
Legal Proceedings
19
Item 2.
Unregistered Sales of Equity Securities and Use of Proceeds
20
Item 6.
Exhibits
21
Signature
22
Index to Exhibits
23
-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, | ||||||||||||
2008 | 2007 | |||||||||||
REVENUES AND OTHER INCOME | ||||||||||||
Sales and other operating revenue (1) | $ | 113,223 | $ | 84,174 | ||||||||
Income from equity affiliates | 2,809 | 1,915 | ||||||||||
Other income | 822 | 1,134 | ||||||||||
Total revenues and other income | 116,854 | 87,223 | ||||||||||
| ||||||||||||
COSTS AND OTHER DEDUCTIONS | ||||||||||||
Crude oil and product purchases | 60,971 | 40,042 | ||||||||||
Production and manufacturing expenses | 8,893 | 7,283 | ||||||||||
Selling, general and administrative expenses | 3,802 | 3,392 | ||||||||||
Depreciation and depletion | 3,104 | 2,942 | ||||||||||
Exploration expenses, including dry holes | 342 | 272 | ||||||||||
Interest expense | 130 | 103 | ||||||||||
Sales-based taxes (1) | 8,432 | 7,284 | ||||||||||
Other taxes and duties | 10,706 | 9,591 | ||||||||||
Income applicable to minority interests | 282 | 250 | ||||||||||
Total costs and other deductions | 96,662 | 71,159 | ||||||||||
| ||||||||||||
INCOME BEFORE INCOME TAXES | 20,192 | 16,064 | ||||||||||
Income taxes | 9,302 | 6,784 | ||||||||||
NET INCOME | $ | 10,890 | $ | 9,280 | ||||||||
| ||||||||||||
NET INCOME PER COMMON SHARE (dollars) | $ | 2.05 | $ | 1.64 | ||||||||
| ||||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||
- ASSUMING DILUTION (dollars) | $ | 2.03 | $ | 1.62 | ||||||||
DIVIDENDS PER COMMON SHARE (dollars) | $ | 0.35 | $ | 0.32 | ||||||||
(1) Sales-based taxes included in sales and other | ||||||||||||
operating revenue | $ | 8,432 | $ | 7,284 | ||||||||
The information in the Notes to Condensed Consolidated Financial Statements | ||||||||||||
is an integral part of these statements. |
-3-
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars)
March 31, | Dec. 31, | |||||||
2008 | 2007 | |||||||
ASSETS | ||||||||
Current assets | ||||||||
Cash and cash equivalents | $ | 40,913 | $ | 33,981 | ||||
Marketable securities | 480 | 519 | ||||||
Notes and accounts receivable - net | 36,428 | 36,450 | ||||||
Inventories | ||||||||
Crude oil, products and merchandise | 13,075 | 8,863 | ||||||
Materials and supplies | 2,303 | 2,226 | ||||||
Prepaid taxes and expenses | 4,559 | 3,924 | ||||||
Total current assets | 97,758 | 85,963 | ||||||
Property, plant and equipment - net | 122,935 | 120,869 | ||||||
Investments and other assets | 37,509 | 35,250 | ||||||
TOTAL ASSETS | $ | 258,202 | $ | 242,082 | ||||
LIABILITIES | ||||||||
Current liabilities | ||||||||
Notes and loans payable | $ | 2,771 | $ | 2,383 | ||||
Accounts payable and accrued liabilities | 53,613 | 45,275 | ||||||
Income taxes payable | 14,599 | 10,654 | ||||||
Total current liabilities | 70,983 | 58,312 | ||||||
Long-term debt | 7,235 | 7,183 | ||||||
Deferred income tax liabilities | 24,008 | 22,899 | ||||||
Other long-term liabilities | 32,837 | 31,926 | ||||||
TOTAL LIABILITIES | 135,063 | 120,320 | ||||||
Commitments and contingencies (note 3) | ||||||||
SHAREHOLDERS' EQUITY | ||||||||
Common stock, without par value: | ||||||||
Authorized: 9,000 million shares | ||||||||
Issued: 8,019 million shares | 4,745 | 4,933 | ||||||
Earnings reinvested | 237,529 | 228,518 | ||||||
Accumulated other comprehensive income | ||||||||
Cumulative foreign exchange translation adjustment | 9,449 | 7,972 | ||||||
Postretirement benefits reserves adjustment | (5,945 | ) | (5,983 | ) | ||||
Common stock held in treasury: | ||||||||
2,736 million shares at March 31, 2008 | (122,639 | ) | ||||||
2,637 million shares at December 31, 2007 | (113,678 | ) | ||||||
TOTAL SHAREHOLDERS' EQUITY | 123,139 | 121,762 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY | $ | 258,202 | $ | 242,082 | ||||
The number of shares of common stock issued and outstanding at March 31, 2008 and | ||||||||
December 31, 2007 were 5,283,694,459 and 5,381,795,265, respectively. | ||||||||
The information in the Notes to Condensed Consolidated Financial Statements | ||||||||
is an integral part of these statements. |
-4-
EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Three Months Ended | |||||||||
March 31, | |||||||||
2008 | 2007 | ||||||||
CASH FLOWS FROM OPERATING ACTIVITIES | |||||||||
Net income | $ | 10,890 | $ | 9,280 | |||||
Depreciation and depletion | 3,104 | 2,942 | |||||||
Changes in operational working capital, excluding cash and debt | 7,803 | 1,843 | |||||||
All other items - net | (377 | ) | 221 | ||||||
Net cash provided by operating activities | 21,420 | 14,286 | |||||||
CASH FLOWS FROM INVESTING ACTIVITIES | |||||||||
Additions to property, plant and equipment | (3,979 | ) | (3,106 | ) | |||||
Sales of subsidiaries, investments, and property, plant and equipment | 413 | 538 | |||||||
Other investing activities - net | (734 | ) | (670 | ) | |||||
Net cash used in investing activities | (4,300 | ) | (3,238 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES | |||||||||
Additions to long-term debt | 35 | 93 | |||||||
Reductions in long-term debt | (46 | ) | (36 | ) | |||||
Additions/(reductions) in short-term debt - net | 190 | 274 | |||||||
Cash dividends to ExxonMobil shareholders | (1,879 | ) | (1,825 | ) | |||||
Cash dividends to minority interests | (105 | ) | (74 | ) | |||||
Changes in minority interests and sales/(purchases) | |||||||||
of affiliate stock | (214 | ) | (149 | ) | |||||
Common stock acquired | (9,465 | ) | (7,960 | ) | |||||
Common stock sold | 131 | 172 | |||||||
Net cash used in financing activities | (11,353 | ) | (9,505 | ) | |||||
Effects of exchange rate changes on cash | 1,165 | 207 | |||||||
Increase/(decrease) in cash and cash equivalents | 6,932 | 1,750 | |||||||
Cash and cash equivalents at beginning of period | 33,981 | 28,244 | |||||||
CASH AND CASH EQUIVALENTS AT END OF PERIOD | $ | 40,913 | $ | 29,994 | |||||
SUPPLEMENTAL DISCLOSURES | |||||||||
Income taxes paid | $ | 4,849 | $ | 3,998 | |||||
Cash interest paid | $ | 184 | $ | 137 | |||||
The information in the Notes to Condensed Consolidated Financial Statements | |||||||||
is an integral part of these statements. |
-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 2007 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.
Fair Value Measurements
Effective January 1, 2008, the Corporation adopted the Financial Accounting Standards Board's (FASB) Statement No. 157 (FAS 157), Fair Value Measurements for financial assets and liabilities that are measured at fair value and nonfinancial assets and liabilities that are measured at fair value on a recurring basis. FAS 157 defines fair value, establishes a framework for measuring fair value when an entity is required to use a fair value measure for recognition or disclosure purposes and expands the disclosures about fair value measurements. The initial application of FAS 157 is limited to the Corporation's investments in derivative instruments and some debt and equity securities. The fair value measurements for these instruments are based on quoted prices or observable market inputs. The value of these instruments is immaterial to the Corporation's financial statements and the related gains or losses from periodic measurement at fair value are de minimis.
On January 1, 2009, the Corporation will adopt FAS 157 for nonfinancial assets and liabilities that are not measured at fair value on a recurring basis. The application of FAS 157 to the Corporation's nonfinancial assets and liabilities will mostly be limited to the recognition and measurement of nonmonetary exchange transactions, asset retirement obligations and asset impairments. The Corporation does not expect the adoption to have a material impact on the Corporations financial statements.
3.
Litigation and Other Contingencies
Litigation
A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are sig nificant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a materially adverse effect upon the Corporations operations or financial condition.
-6-
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. All the compensatory claims have been resolved and paid. All of the punitive damage claims were consolidated in the civil trial that began in 1994. The first judgment from the United States District Court for the District of Alaska in the amount of $5 billion was vacated by the United States Court of Appeals for the Ninth Circuit as being excessive under the Constitution. The second judgment in the amount of $4 billion was vacated by the Ninth Circuit panel without argument and sent back for the District Court to reconsider in light of the recent U.S. Supreme Court decision in Campbell v. State Farm. The most recent District Court judgment for punitive damages was for $4.5 billion plus interest and was entered in Janua ry 2004. The Corporation posted a $5.4 billion letter of credit. ExxonMobil and the plaintiffs appealed this decision to the Ninth Circuit, which ruled on December 22, 2006, that the award be reduced to $2.5 billion. On January 12, 2007, ExxonMobil petitioned the Ninth Circuit Court of Appeals for a rehearing en banc of its appeal. On May 23, 2007, with two dissenting opinions, the Ninth Circuit determined not to re-hear ExxonMobils appeal before the full court. ExxonMobil filed a petition for writ of certiorari to the U.S. Supreme Court on August 20, 2007. On October 29, 2007, the U.S. Supreme Court granted ExxonMobils petition for a writ of certiorari. Oral argument was held on February 27, 2008. While it is reasonably possible that a liability for punitive damages may have been incurred from the Exxon Valdez grounding, it is not possible to predict the ultimate outcome or to reasonably estimate any such potential liability.
Other Contingencies
As of March 31, 2008 | ||||||||||||||||||
Equity | Other | |||||||||||||||||
Company | Third Party | |||||||||||||||||
Obligations | Obligations | Total | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||
Total guarantees | $ | 6,466 | $ | 775 | $ | 7,241 |
The Corporation and certain of its consolidated subsidiaries were contingently liable at March 31, 2008, for $7,241 million, primarily relating to guarantees for notes, loans and performance under contracts. Included in this amount were guarantees by consolidated affiliates of $6,466 million, representing ExxonMobils share of obligations of certain equity companies. These guarantees are not reasonably likely to have a material effect on the Corporations financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
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 Corporations operations or financial condition. The Corporation's outstanding unconditional purchase obligations at March 31, 2008, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.
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.
In accordance with a nationalization decree issued by Venezuelas president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a mixed enterprise and an increase in PdVSAs or one of its affiliates ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would directly assume the activities carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by PdVSA, and on June 27, 2007, the government expropriated ExxonMobils 41.67 percent interest in the Cerro Negro Project.
-7-
To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporations consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporations operations or financial condition. At the time the assets were expropriated, ExxonMobils remaining net book investment in Cerro Negro producing assets was about $750 million.
4.
Comprehensive Income
Three Months Ended | ||||||||||||||||
March 31, | ||||||||||||||||
2008 | 2007 | |||||||||||||||
(millions of dollars) | ||||||||||||||||
Net income | $ | 10,890 | $ | 9,280 | ||||||||||||
Other comprehensive income | ||||||||||||||||
(net of income taxes) | ||||||||||||||||
Foreign exchange translation adjustment | 1,477 | 423 | ||||||||||||||
Postretirement benefits reserves adjustment | ||||||||||||||||
(excluding amortization) | (151 | ) | (408 | ) | ||||||||||||
Amortization of postretirement benefits reserves | ||||||||||||||||
adjustment included in net periodic benefit costs | 189 | 201 | ||||||||||||||
Total comprehensive income | $ | 12,405 | $ | 9,496 |
5.
Earnings Per Share
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
NET INCOME PER COMMON SHARE | ||||||||||||
Net income (millions of dollars) | $ | 10,890 | $ | 9,280 | ||||||||
| ||||||||||||
Weighted average number of common shares | ||||||||||||
outstanding (millions of shares) | 5,301 | 5,650 | ||||||||||
Net income per common share (dollars) | $ | 2.05 | $ | 1.64 | ||||||||
NET INCOME PER COMMON SHARE | ||||||||||||
- ASSUMING DILUTION | ||||||||||||
Net income (millions of dollars) | $ | 10,890 | $ | 9,280 | ||||||||
Weighted average number of common shares | ||||||||||||
outstanding (millions of shares) | 5,301 | 5,650 | ||||||||||
Effect of employee stock-based awards | 61 | 64 | ||||||||||
Weighted average number of common shares | ||||||||||||
outstanding - assuming dilution | 5,362 | 5,714 | ||||||||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 2.03 | $ | 1.62 |
-8-
6.
Pension and Other Postretirement Benefits
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
(millions of dollars) | ||||||||||||
Pension Benefits - U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 95 | $ | 97 | ||||||||
Interest cost | 182 | 172 | ||||||||||
Expected return on plan assets | (229 | ) | (210 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 59 | 67 | ||||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | 44 | 47 | ||||||||||
Net benefit cost | $ | 151 | $ | 173 | ||||||||
Pension Benefits - Non-U.S. | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 113 | $ | 109 | ||||||||
Interest cost | 301 | 237 | ||||||||||
Expected return on plan assets | (318 | ) | (263 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 101 | 112 | ||||||||||
Net pension enhancement and | ||||||||||||
curtailment/settlement cost | 0 | 0 | ||||||||||
Net benefit cost | $ | 197 | $ | 195 | ||||||||
Other Postretirement Benefits | ||||||||||||
Components of net benefit cost | ||||||||||||
Service cost | $ | 29 | $ | 27 | ||||||||
Interest cost | 108 | 112 | ||||||||||
Expected return on plan assets | (12 | ) | (15 | ) | ||||||||
Amortization of actuarial loss/(gain) | ||||||||||||
and prior service cost | 84 | 78 | ||||||||||
Net benefit cost | $ | 209 | $ | 202 |
-9-
7.
Disclosures about Segments and Related Information
Three Months Ended | ||||||||||||
March 31, | ||||||||||||
2008 | 2007 | |||||||||||
(millions of dollars) | ||||||||||||
EARNINGS AFTER INCOME TAX | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,631 | $ | 1,177 | ||||||||
Non-U.S. | 7,154 | 4,864 | ||||||||||
Downstream | ||||||||||||
United States | 398 | 839 | ||||||||||
Non-U.S. | 768 | 1,073 | ||||||||||
Chemical | ||||||||||||
United States | 284 | 346 | ||||||||||
Non-U.S. | 744 | 890 | ||||||||||
All other | (89 | ) | 91 | |||||||||
Corporate total | $ | 10,890 | $ | 9,280 | ||||||||
SALES AND OTHER OPERATING REVENUE (1) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,764 | $ | 1,362 | ||||||||
Non-U.S. | 8,399 | 5,493 | ||||||||||
Downstream | ||||||||||||
United States | 28,458 | 21,260 | ||||||||||
Non-U.S. | 64,517 | 47,641 | ||||||||||
Chemical | ||||||||||||
United States | 3,652 | 3,189 | ||||||||||
Non-U.S. | 6,429 | 5,224 | ||||||||||
All other | 4 | 5 | ||||||||||
Corporate total | $ | 113,223 | $ | 84,174 | ||||||||
(1) Includes sales-based taxes | ||||||||||||
INTERSEGMENT REVENUE | ||||||||||||
Upstream | ||||||||||||
United States | $ | 2,561 | $ | 1,563 | ||||||||
Non-U.S. | 14,881 | 10,595 | ||||||||||
Downstream | ||||||||||||
United States | 3,861 | 2,782 | ||||||||||
Non-U.S. | 16,543 | 10,941 | ||||||||||
Chemical | ||||||||||||
United States | 2,428 | 1,697 | ||||||||||
Non-U.S. | 2,432 | 1,522 | ||||||||||
All other | 67 | 79 |
-10-
8.
Condensed Consolidating Financial Information Related to Guaranteed Securities Issued by Subsidiaries
Exxon Mobil Corporation has fully and unconditionally guaranteed the deferred interest debentures due 2012 ($1,777 million long-term at March 31, 2008) and the debt securities due 2008-2011 ($39 million long-term and $13 million short-term) of SeaRiver Maritime Financial Holdings, Inc., a 100 percent owned subsidiary of Exxon Mobil Corporation.
The following condensed consolidating financial information is provided for Exxon Mobil Corporation, as guarantor, and for SeaRiver Maritime Financial Holdings, Inc., as issuer, as an alternative to providing separate financial statements for the issuer. The accounts of Exxon Mobil Corporation and SeaRiver Maritime Financial Holdings, Inc. are presented utilizing the equity method of accounting for investments in subsidiaries.
-11-
SeaRiver | ||||||||||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||||||||||
(millions of dollars) | ||||||||||||||||||||||||||||
Condensed consolidated statement of income for three months ended March 31, 2007 | ||||||||||||||||||||||||||||
Revenues and other income | ||||||||||||||||||||||||||||
Sales and other operating revenue, including sales-based taxes | $ | 3,857 | $ | - | $ | 80,317 | $ | - | $ | 84,174 | ||||||||||||||||||
Income from equity affiliates | 9,167 | 7 | 1,904 | (9,163 | ) | 1,915 | ||||||||||||||||||||||
Other income | 222 | - | 912 | - | 1,134 | |||||||||||||||||||||||
Intercompany revenue | 8,281 | 26 | 77,889 | (86,196 | ) | - | ||||||||||||||||||||||
Total revenues and other income | 21,527 | 33 | 161,022 | (95,359 | ) | 87,223 | ||||||||||||||||||||||
Costs and other deductions | ||||||||||||||||||||||||||||
Crude oil and product purchases | 7,880 | - | 112,246 | (80,084 | ) | 40,042 | ||||||||||||||||||||||
Production and manufacturing expenses | 1,714 | - | 6,792 | (1,223 | ) | 7,283 | ||||||||||||||||||||||
Selling, general and administrative expenses | 591 | - | 2,986 | (185 | ) | 3,392 | ||||||||||||||||||||||
Depreciation and depletion | 388 | - | 2,554 | - | 2,942 | |||||||||||||||||||||||
Exploration expenses, including dry holes | 100 | - | 172 | - | 272 | |||||||||||||||||||||||
Interest expense | 1,446 | 50 | 3,488 | (4,881 | ) | 103 | ||||||||||||||||||||||
Sales-based taxes | - | - | 7,284 | - | 7,284 | |||||||||||||||||||||||
Other taxes and duties | 13 | - | 9,578 | - | 9,591 | |||||||||||||||||||||||
Income applicable to minority interests | - | - | 250 | - | 250 | |||||||||||||||||||||||
Total costs and other deductions | 12,132 | 50 | 145,350 | (86,373 | ) | 71,159 | ||||||||||||||||||||||
Income before income taxes | 9,395 | (17 | ) | 15,672 | (8,986 | ) | 16,064 | |||||||||||||||||||||
Income taxes | 115 | (8 | ) | 6,677 | - | 6,784 | ||||||||||||||||||||||
Net income | $ | 9,280 | $ | (9 | ) | $ | 8,995 | $ | (8,986 | ) | $ | 9,280 |
-12-
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated balance sheet as of March 31, 2008 | ||||||||||||||||||||
Cash and cash equivalents | $ | 294 | $ | - | $ | 40,619 | $ | - | $ | 40,913 | ||||||||||
Marketable securities | - | - | 480 | - | 480 | |||||||||||||||
Notes and accounts receivable - net | 3,591 | 8 | 34,204 | (1,375 | ) | 36,428 | ||||||||||||||
Inventories | 1,479 | - | 13,899 | - | 15,378 | |||||||||||||||
Prepaid taxes and expenses | 456 | - | 4,103 | - | 4,559 | |||||||||||||||
Total current assets | 5,820 | 8 | 93,305 | (1,375 | ) | 97,758 | ||||||||||||||
Property, plant and equipment - net | 16,222 | - | 106,713 | - | 122,935 | |||||||||||||||
Investments and other assets | 220,181 | 474 | 430,485 | (613,631 | ) | 37,509 | ||||||||||||||
Intercompany receivables | 11,511 | 2,015 | 467,804 | (481,330 | ) | - | ||||||||||||||
Total assets | $ | 253,734 | $ | 2,497 | $ | 1,098,307 | $ | (1,096,336 | ) | $ | 258,202 | |||||||||
Notes and loan payables | $ | 2 | $ | 13 | $ | 2,756 | $ | - | $ | 2,771 | ||||||||||
Accounts payable and accrued liabilities | 3,287 | - | 50,326 | - | 53,613 | |||||||||||||||
Income taxes payable | - | - | 15,974 | (1,375 | ) | 14,599 | ||||||||||||||
Total current liabilities | 3,289 | 13 | 69,056 | (1,375 | ) | 70,983 | ||||||||||||||
Long-term debt | 276 | 1,816 | 5,143 | - | 7,235 | |||||||||||||||
Deferred income tax liabilities | 1,774 | 206 | 22,028 | - | 24,008 | |||||||||||||||
Other long-term liabilities | 11,410 | - | 21,427 | - | 32,837 | |||||||||||||||
Intercompany payables | 113,846 | 383 | 367,101 | (481,330 | ) | - | ||||||||||||||
Total liabilities | 130,595 | 2,418 | 484,755 | (482,705 | ) | 135,063 | ||||||||||||||
Earnings reinvested | 237,529 | (490 | ) | 124,482 | (123,992 | ) | 237,529 | |||||||||||||
Other shareholders' equity | (114,390 | ) | 569 | 489,070 | (489,639 | ) | (114,390 | ) | ||||||||||||
Total shareholders' equity | 123,139 | 79 | 613,552 | (613,631 | ) | 123,139 | ||||||||||||||
Total liabilities and shareholders' equity | $ | 253,734 | $ | 2,497 | $ | 1,098,307 | $ | (1,096,336 | ) | $ | 258,202 |
Condensed consolidated balance sheet as of December 31, 2007 | |||||||||||||||||
Cash and cash equivalents | $ | 1,393 | $ | - | $ | 32,588 | $ | - | $ | 33,981 | |||||||
Marketable securities | - | - | 519 | - | 519 | ||||||||||||
Notes and accounts receivable - net | 3,733 | 2 | 34,338 | (1,623 | ) | 36,450 | |||||||||||
Inventories | 1,198 | - | 9,891 | - | 11,089 | ||||||||||||
Prepaid taxes and expenses | 373 | - | 3,551 | - | 3,924 | ||||||||||||
Total current assets | 6,697 | 2 | 80,887 | (1,623 | ) | 85,963 | |||||||||||
Property, plant and equipment - net | 16,291 | - | 104,578 | - | 120,869 | ||||||||||||
Investments and other assets | 208,283 | 413 | 427,046 | (600,492 | ) | 35,250 | |||||||||||
Intercompany receivables | 14,577 | 1,961 | 437,433 | (453,971 | ) | - | |||||||||||
Total assets | $ | 245,848 | $ | 2,376 | $ | 1,049,944 | $ | (1,056,086 | ) | $ | 242,082 | ||||||
Notes and loan payables | $ | 3 | $ | 13 | $ | 2,367 | $ | - | $ | 2,383 | |||||||
Accounts payable and accrued liabilities | 3,038 | 1 | 42,236 | - | 45,275 | ||||||||||||
Income taxes payable | - | - | 12,277 | (1,623 | ) | 10,654 | |||||||||||
Total current liabilities | 3,041 | 14 | 56,880 | (1,623 | ) | 58,312 | |||||||||||
Long-term debt | 276 | 1,766 | 5,141 | - | 7,183 | ||||||||||||
Deferred income tax liabilities | 1,829 | 212 | 20,858 | - | 22,899 | ||||||||||||
Other long-term liabilities | 11,308 | - | 20,618 | - | 31,926 | ||||||||||||
Intercompany payables | 107,632 | 382 | 345,957 | (453,971 | ) | - | |||||||||||
Total liabilities | 124,086 | 2,374 | 449,454 | (455,594 | ) | 120,320 | |||||||||||
Earnings reinvested | 228,518 | (467 | ) | 114,037 | (113,570 | ) | 228,518 | ||||||||||
Other shareholders' equity | (106,756 | ) | 469 | 486,453 | (486,922 | ) | (106,756 | ) | |||||||||
Total shareholders' equity | 121,762 | 2 | 600,490 | (600,492 | ) | 121,762 | |||||||||||
Total liabilities and shareholders' equity | $ | 245,848 | $ | 2,376 | $ | 1,049,944 | $ | (1,056,086 | ) | $ | 242,082 |
-13-
SeaRiver | ||||||||||||||||||||
Exxon Mobil | Maritime | Consolidating | ||||||||||||||||||
Corporation | Financial | and | ||||||||||||||||||
Parent | Holdings | All Other | Eliminating | |||||||||||||||||
Guarantor | Inc. | Subsidiaries | Adjustments | Consolidated | ||||||||||||||||
(millions of dollars) | ||||||||||||||||||||
Condensed consolidated statement of cash flows for three months ended March 31, 2008 | ||||||||||||||||||||
Cash provided by/(used in) operating activities | $ | 1,400 | $ | 13 | $ | 20,552 | $ | (545 | ) | $ | 21,420 | |||||||||
Cash flows from investing activities | ||||||||||||||||||||
Additions to property, plant and equipment | (352 | ) | - | (3,627 | ) | - | (3,979 | ) | ||||||||||||
Sales of long-term assets | 20 | - | 393 | - | 413 | |||||||||||||||
Net intercompany investing | 9,046 | (114 | ) | (9,093 | ) | 161 | - | |||||||||||||
All other investing, net | - | - | (734 | ) | - | (734 | ) | |||||||||||||
Net cash provided by/(used in) investing activities | 8,714 | (114 | ) | (13,061 | ) | 161 | (4,300 | ) | ||||||||||||
Cash flows from financing activities | ||||||||||||||||||||
Additions to long-term debt | - | - | 35 | - | 35 | |||||||||||||||
Reductions in long-term debt | - | - | (46 | ) | - | (46 | ) | |||||||||||||
Additions/(reductions) in short-term debt - net | - | - | 190 | - | 190 | |||||||||||||||
Cash dividends | (1,879 | ) | - | (545 | ) | 545 | (1,879 | ) | ||||||||||||
Net ExxonMobil shares sold/(acquired) | (9,334 | ) | - | - | - | (9,334 | ) | |||||||||||||
Net intercompany financing activity | - | 1 | 60 | (61 | ) | - | ||||||||||||||
All other financing, net | - | 100 | (319 | ) | (100 | ) | (319 | ) | ||||||||||||
Net cash provided by/(used in) financing activities | (11,213 | ) | 101 | (625 | ) | 384 | (11,353 | ) | ||||||||||||
Effects of exchange rate changes on cash | - | - | 1,165 | - | 1,165 | |||||||||||||||
Increase/(decrease) in cash and cash equivalents | $ | (1,099 | ) | $ | - | $ | 8,031 | $ | - | $ | 6,932 |
Condensed consolidated statement of cash flows for three months ended March 31, 2007 | ||||||||||||||||
Cash provided by/(used in) operating activities | $ | 1,017 | $ | 19 | $ | 13,413 | $ | (163 | ) | $ | 14,286 | |||||
Cash flows from investing activities | ||||||||||||||||
Additions to property, plant and equipment | (301 | ) | - | (2,805 | ) | - | (3,106 | ) | ||||||||
Sales of long-term assets | 97 | - | 441 | - | 538 | |||||||||||
Net intercompany investing | 5,190 | (16 | ) | (5,202 | ) | 28 | - | |||||||||
All other investing, net | - | - | (670 | ) | - | (670 | ) | |||||||||
Net cash provided by/(used in) investing activities | 4,986 | (16 | ) | (8,236 | ) | 28 | (3,238 | ) | ||||||||
Cash flows from financing activities | ||||||||||||||||
Additions to long-term debt | - | - | 93 | - | 93 | |||||||||||
Reductions in long-term debt | - | - | (36 | ) | - | (36 | ) | |||||||||
Additions/(reductions) in short-term debt - net | 168 | - | 106 | - | 274 | |||||||||||
Cash dividends | (1,825 | ) | - | (163 | ) | 163 | (1,825 | ) | ||||||||
Net ExxonMobil shares sold/(acquired) | (7,788 | ) | - | - | - | (7,788 | ) | |||||||||
Net intercompany financing activity | - | (3 | ) | 31 | (28 | ) | - | |||||||||
All other financing, net | - | - | (223 | ) | - | (223 | ) | |||||||||
Net cash provided by/(used in) financing activities | (9,445 | ) | (3 | ) | (192 | ) | 135 | (9,505 | ) | |||||||
Effects of exchange rate changes on cash | - | - | 207 | - | 207 | |||||||||||
Increase/(decrease) in cash and cash equivalents | $ | (3,442 | ) | $ | - | $ | 5,192 | $ | - | $ | 1,750 |
-14-
EXXON MOBIL CORPORATION
Item 2.
Management's Discussion and Analysis of Financial Condition
and Results of Operations
FUNCTIONAL EARNINGS SUMMARY
First Three Months | ||||||||||||
Net Income (U.S. GAAP) | 2008 | 2007 | ||||||||||
(millions of dollars) | ||||||||||||
Upstream | ||||||||||||
United States | $ | 1,631 | $ | 1,177 | ||||||||
Non-U.S. | 7,154 | 4,864 | ||||||||||
Downstream | ||||||||||||
United States | 398 | 839 | ||||||||||
Non-U.S. | 768 | 1,073 | ||||||||||
Chemical | ||||||||||||
United States | 284 | 346 | ||||||||||
Non-U.S. | 744 | 890 | ||||||||||
Corporate and financing | (89 | ) | 91 | |||||||||
Net Income (U.S. GAAP) | $ | 10,890 | $ | 9,280 | ||||||||
Net income per common share (dollars) | $ | 2.05 | $ | 1.64 | ||||||||
Net income per common share | ||||||||||||
- assuming dilution (dollars) | $ | 2.03 | $ | 1.62 |
REVIEW OF FIRST QUARTER 2008 RESULTS
Exxon Mobil Corporation reported record first quarter 2008 net income of $10,890 million, up 17 percent from the first quarter of 2007. Earnings per share were up 25 percent to $2.03 reflecting strong earnings and the impact of the continuing share purchase program. Higher crude oil and natural gas realizations, driven by record worldwide crude oil prices, were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs. Share purchases to reduce shares outstanding were increased to $8.0 billion in the first quarter of 2008 and reduced shares outstanding by 1.8 percent.
First Three Months | |||||||||||||||
|
| 2008 | 2007 | ||||||||||||
(millions of dollars) | |||||||||||||||
Upstream earnings | |||||||||||||||
United States | $ | 1,631 | $ | 1,177 | |||||||||||
Non-U.S. | 7,154 | 4,864 | |||||||||||||
Total | $ | 8,785 | $ | 6,041 |
Upstream earnings were $8,785 million, up $2,744 million from the first quarter of 2007. Record high crude oil and natural gas realizations increased earnings approximately $4.4 billion. Volume and mix effects decreased earnings about $800 million, as increased natural gas volumes were more than offset by lower crude volumes. Earnings also decreased due to $300 million of higher taxes, $250 million of increased operating costs and $200 million of lower gains on asset sales.
On an oil-equivalent basis, production decreased 5.6 percent from the first quarter of 2007. Excluding the Venezuela expropriation, divestments, OPEC quota effects and price and spend impacts on volumes, production was down 3 percent.
Liquids production totaled 2,474 kbd (thousands of barrels per day), down 272 kbd from the first quarter of 2007. Excluding the Venezuela expropriation, divestments, OPEC quota effects and price and spend impacts on volumes, liquids production was down 6 percent. Increased production from projects in west Africa and the North Sea was more than offset by mature field decline, PSC net interest reductions and maintenance activities.
First quarter natural gas production was 10,246 mcfd (millions of cubic feet per day), up 132 mcfd from 2007. Higher European demand and North Sea project additions were partly offset by mature field decline.
Earnings from U.S. Upstream operations were $1,631 million, $454 million higher than the first quarter of 2007. Non-U.S. Upstream earnings were $7,154 million, up $2,290 million from 2007.
-15-
First Three Months | ||||||||||||||||
2008 | 2007 | |||||||||||||||
(millions of dollars) | ||||||||||||||||
Downstream earnings | ||||||||||||||||
United States | $ | 398 | $ | 839 | ||||||||||||
Non-U.S. | 768 | 1,073 | ||||||||||||||
Total | $ | 1,166 | $ | 1,912 |
Downstream earnings of $1,166 million were $746 million lower than the first quarter of 2007. Significantly lower worldwide refining margins decreased earnings approximately $1.0 billion, while improved refinery operations increased earnings about $350 million. Petroleum product sales of 6,821 kbd were 377 kbd lower than last year's first quarter, mainly reflecting asset sales.
U.S. Downstream earnings were $398 million, down $441 million from the first quarter of 2007. Non-U.S. Downstream earnings of $768 million were $305 million lower.
First Three Months | ||||||||||||||||||
2008 | 2007 | |||||||||||||||||
(millions of dollars) | ||||||||||||||||||
Chemical earnings | ||||||||||||||||||
United States | $ | 284 | $ | 346 | ||||||||||||||
Non-U.S. | 744 | 890 | ||||||||||||||||
Total | $ | 1,028 | $ | 1,236 |
Chemical earnings of $1,028 million were $208 million lower than the first quarter of 2007. Lower margins, which decreased earnings approximately $350 million, were partly offset by favorable foreign exchange and tax effects. Prime product sales of 6,578 kt (thousands of metric tons) in the first quarter of 2008 were 227 kt lower than the prior year.
First Three Months | |||||||||||||||
2008 | 2007 | ||||||||||||||
(millions of dollars) | |||||||||||||||
Corporate and financing earnings | $ | (89 | ) | $ | 91 |
Corporate and financing expenses were $89 million, up $180 million, mainly due to higher corporate costs and tax items.
LIQUIDITY AND CAPITAL RESOURCES
First Three Months | ||||||||||||
2008 | 2007 | |||||||||||
(millions of dollars) | ||||||||||||
Net cash provided by/(used in) | ||||||||||||
Operating activities | $ | 21,420 | $ | 14,286 | ||||||||
Investing activities | (4,300 | ) | (3,238 | ) | ||||||||
Financing activities | (11,353 | ) | (9,505 | ) | ||||||||
Effect of exchange rate changes | 1,165 | 207 | ||||||||||
Increase/(decrease) in cash and cash equivalents | $ | 6,932 | $ | 1,750 | ||||||||
Cash and cash equivalents | $ | 40,913 | $ | 29,994 | ||||||||
Cash and cash equivalents - restricted | 0 | 4,604 | ||||||||||
Total cash and cash equivalents (at end of period) | $ | 40,913 | $ | 34,598 | ||||||||
Cash flow from operations and asset sales | ||||||||||||
Net cash provided by operating activities (U.S. GAAP) | $ | 21,420 | $ | 14,286 | ||||||||
Sales of subsidiaries, investments and property, | ||||||||||||
plant and equipment | 413 | 538 | ||||||||||
Cash flow from operations and asset sales | $ | 21,833 | $ | 14,824 |
Because of the ongoing nature of our asset management and divestment program, we believe
it is useful for investors to consider asset sales proceeds together with cash provided by operating
activities when evaluating cash available for investment in the business and financing activities.
-16-
Total cash and cash equivalents of $40.9 billion at the end of the first quarter of 2008 compared to $34.6 billion, including the $4.6 billion of restricted cash, at the end of the first quarter of 2007.
Cash provided by operating activities totaled $21,420 million for the first three months of 2008, $7,134 million higher than 2007. The major source of funds was net income of $10,890 million, adjusted for the noncash provision of $3,104 million for depreciation and depletion, both of which increased. The effects of higher prices on the timing of payments of accounts and other payables and the timing of income taxes payable added to cash provided by operating activities. For additional details, see the Condensed Consolidated Statement of Cash Flows on page 5.
Investing activities for the first three months of 2008 used net cash of $4,300 million compared to $3,238 million in the prior year. Spending for additions to property, plant and equipment increased $873 million to $3,979 million. Proceeds from asset divestments of $413 million in 2008 were lower.
Cash flow from operations and asset sales in the first three months of 2008 was $21.8 billion, including asset sales of $0.4 billion, and increased $7.0 billion from the comparable 2007 period.
Net cash used in financing activities of $11,353 million in the first three months of 2008 increased $1,848 million reflecting a higher level of purchases of shares of ExxonMobil stock.
During the first quarter of 2008, Exxon Mobil Corporation purchased 110 million shares of its common stock for the treasury at a gross cost of $9.5 billion. These purchases included $8.0 billion to reduce the number of shares outstanding, with the balance used to offset shares issued in conjunction with the Company's benefit plans and programs. Shares outstanding were reduced from 5,382 million at the end of the fourth quarter to 5,284 million at the end of the first quarter. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.
The Corporation distributed a total of $9.9 billion to shareholders during the quarter through dividends and share purchases to reduce shares outstanding, an increase of 13 percent or $1.1 billion versus the first quarter of 2007.
Total debt of $10.0 billion at March 31, 2008, increased from $9.6 billion at year-end 2007. The Corporation's debt to total capital ratio was 7.3 percent at the end of the first quarter of 2008 compared to 7.1 percent at year-end 2007.
Although the Corporation issues long-term debt from time to time and maintains a revolving commercial paper program, internally generated funds cover the majority of its financial requirements.
The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses.
In accordance with a nationalization decree issued by Venezuelas president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a mixed enterprise and an increase in PdVSAs or one of its affiliates ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would directly assume the activities carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by PdVSA, and on June 27, 2007, the government expropriated ExxonMobils 41.67 percent interest in the Cerro Negro Project .
To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporations consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporations operations or financial condition. At the time the assets were expropriated, ExxonMobils remaining net book investment in Cerro Negro producing assets was about $750 million.
-17-
TAXES
First Three Months | ||||||||||||||
2008 | 2007 | |||||||||||||
(millions of dollars) | ||||||||||||||
Income taxes | $ | 9,302 | $ | 6,784 | ||||||||||
Sales-based taxes | 8,432 | 7,284 | ||||||||||||
All other taxes and duties | 11,607 | 10,408 | ||||||||||||
Total | $ | 29,341 | $ | 24,476 | ||||||||||
Effective income tax rate | 49 | % | 44 | % |
Income, sales-based and all other taxes and duties for the first quarter of 2008 of $29,341 million were higher than 2007. In the first quarter of 2008 income tax expense increased to $9,302 million and the effective income tax rate was 49 percent, compared to $6,784 million and 44 percent, respectively, in the prior year period. The change in the effective income tax rate reflects an increased share of total income from the non-U.S. Upstream segment. Sales-based taxes and all other taxes and duties increased in 2008 reflecting higher prices and foreign exchange.
CAPITAL AND EXPLORATION EXPENDITURES
First Three Months | ||||||||||||||
2008 | 2007 | |||||||||||||
(millions of dollars) | ||||||||||||||
Upstream (including exploration expenses) | $ | 4,095 | $ | 3,469 | ||||||||||
Downstream | 827 | 531 | ||||||||||||
Chemical | 566 | 219 | ||||||||||||
Other | 3 | 3 | ||||||||||||
Total | $ | 5,491 | $ | 4,222 |
Spending on capital and exploration projects was $5.5 billion in the first quarter of 2008, up 30 percent from last year, as we continued to actively invest in projects to bring additional crude oil, natural gas and finished products to market.
Capital and exploration expenditures for full year 2007 were $20.9 billion and are expected to range from $25 billion to $30 billion for the next several years. Actual spending could vary depending on the progress of individual projects.
RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS
In December 2007, the FASB issued Statement No. 160 (FAS 160), Noncontrolling Interests in Consolidated Financial Statements an Amendment of ARB No. 51. FAS 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity. FAS 160 must be adopted by the Corporation no later than January 1, 2009. FAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing minority interests. All other requirements of FAS 160 will be applied prospectively. The Corporation does not expect the adoption of FAS 160 to have a material impact on the Corporations financial statements.
FORWARD-LOOKING STATEMENTS
Statements in this report relating to future plans, projections, events or conditions are forward-looking statements. Actual results, including project plans, capacities, and timing and resource recoveries could differ materially due to changes in long-term oil or gas prices or other market conditions affecting the oil and gas industry; political events or disturbances; reservoir performance; the outcome of commercial negotiations; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading "Factors Affecting Future Results" on our website and in Item 1A of ExxonMobil's 2007 Form 10-K. We assume no duty to update these statements as of any future date.
-18-
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risks for the three months ended March 31, 2008, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2007.
Item 4. Controls and Procedures
As indicated in the certifications in Exhibit 31 of this report, the Corporations chief executive officer, principal financial officer and principal accounting officer have evaluated the Corporations disclosure controls and procedures as of March 31, 2008. Based on that evaluation, these officers have concluded that the Corporations disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commissions rules and forms. There were no changes during the Corporation's last fiscal quar ter that materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
On February 15, 2008, the Texas Commission on Environmental Quality (TCEQ) filed a Preliminary Report and Petition seeking an administrative penalty and corrective action related to a July 24, 2004, emissions event and alleged violations discovered in a 2005 TCEQ inspection at the Baytown Refinery. TCEQ is seeking an administrative penalty of $192,720. ExxonMobil has filed its Answer to the Petition and requested a contested case hearing. The matter is now pending before the State Office of Administrative Hearings.
Refer to the relevant portions of note 3 on pages 6 and 7 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
-19-
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
Note 1 -- On August 1, 2000, the Corporation announced its intention to resume purchases of shares of its common stock for the treasury both to offset shares issued in conjunction with the Company's benefit plans and programs and to gradually reduce the number of shares outstanding. The announcement did not specify an amount or expiration date. The Corporation has continued to purchase shares since this announcement and to report purchased volumes in its quarterly earnings releases. In its most recent earnings release dated May 1, 2008, the Corporation stated that share purchases to reduce shares outstanding were increased to $8.0 billion in the first quarter of 2008. Purchases may be made in both the open market and through negotiated transactions, and purchases may be increased, decreased or discontinued at any time without prior notice.
-20-
Item 6. Exhibits
Exhibit
Description
10(iii)(a.1)
2003 Incentive Program, as approved by shareholders May 28, 2003.
31.1
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief
Executive Officer.
31.2
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal
Financial Officer.
31.3
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal
Accounting Officer.
32.1
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
Executive Officer.
32.2
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Financial Officer.
32.3
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by
Principal Accounting Officer.
-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 6, 2008
By: /s/ Patrick T. Mulva
Name: Patrick T. Mulva
Title: Vice President, Controller and
Principal Accounting Officer
-22-
INDEX TO EXHIBITS
Exhibit
Description
10(iii)(a.1)
2003 Incentive Program, as approved by shareholders May 28, 2003.
31.1
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Chief Executive Officer.
31.2
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Principal Financial Officer.
31.3
Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by
Principal Accounting Officer.
32.1
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief
Executive Officer.
32.2
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal
Financial Officer.
32.3
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal
Accounting Officer.
-23-
Exhibit 10(iii)(a.1)
EXXON MOBIL CORPORATION
2003 INCENTIVE PROGRAM
(as approved by shareholders May 28, 2003)
I. Purposes
This 2003 Incentive Program is intended to help reward, retain, and motivate selected employees of the Corporation and its affiliates and to align further the interests of those employees with the interests of the Corporation's shareholders through the grant of stock-based awards.
II. Definitions
The following definitions apply:
(1) 'Administrative authority' means the Board, a committee designated by the Board, the Chairman of the Board, or the Chairman's delegates authorized to administer outstanding awards under this Program, establish requirements and procedures for the operation of the Program, and to exercise other powers assigned to the administrative authority under this Program in accordance with Section III.
(2) 'Affiliate' means a corporation, partnership, limited liability company, or other entity in which the Corporation, directly or indirectly, owns an equity interest and which the administrative authority determines to be an affiliate for purposes of this Program (including for purposes of determining whether a change of employment constitutes a termination).
(3) 'Award' means a stock option, a stock appreciation right, restricted stock, a restricted stock unit, performance stock, a performance stock unit, deferred stock, a deferred stock unit, or other award granted under this Program.
(4) 'Board' means the Board of Directors of the Corporation.
(5) 'Code' means the Internal Revenue Code, as in effect from time to time.
(6) 'Compensation Committee' means the committee of the Board so designated in accordance with Section IV.
(7) 'Corporation' means Exxon Mobil Corporation, a New Jersey corporation, or its successors.
(8) 'Deferred stock' means a share the delivery of which is subject to a specified deferral period.
(9) 'Deferred stock unit' means a stock unit the settlement of which is subject to a specified deferral period.
(10) 'Designated beneficiary' means the person designated by the grantee of an award pursuant to Section XVI to be entitled, on the death of the grantee, to any remaining rights arising out of the award.
(11) 'Detrimental activity' of a grantee means activity at any time, during or after employment with the Corporation or an affiliate, that is determined in individual cases by the administrative authority to be (a) a material violation of applicable standards, policies, or procedures of the Corporation or an affiliate; or (b) a material breach of legal or other duties owed by the grantee to the Corporation or an affiliate;
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or (c) a material breach of any contract between the grantee and the Corporation or an affiliate; or (d) acceptance by grantee of duties to a third party under circumstances that create a material conflict of interest, or the appearance of a material conflict of interest, with respect to the grantee's retention of outstanding awards under this Program. Detrimental activity includes, without limitation, activity that would be a basis for termination of employment for cause under applicable law in the United States, or a comparable standard under applicable law of another jurisdiction. With respect to material conflict of interest or the appearance of material conflict of interest, such conflict or appearance might occur when, for example and without limitation, a grantee holding an outstanding award becomes employed or otherwise engaged by an entity that regulates, deals with, or competes with the Cor poration or an affiliate.
(12) Employee means an employee of the Corporation or an affiliate, including a part-time employee or an employee on military, family, or other approved temporary leave.
(13) 'Exchange Act' means the Securities Exchange Act of 1934, as in effect from time to time.
(14) 'Fair market value' as of any day means (a) if the New York Stock Exchange is open for trading on that day, the average of the high and low price of the shares as reported on the consolidated tape during the New York Stock Exchange regular session; or (b) if the New York Stock Exchange is not open for trading on that day, the price determined under the preceding clause (a) for the most recent prior trading day.
(15) 'Grantee' means a recipient of an award under this Program.
(16) Granting authority means the Board or any appropriate committee authorized to grant and amend awards under this Program and to exercise other powers assigned to the granting authority under this Program in accordance with Section V.
(17) 'Incentive Stock Option' or 'ISO' means a stock option that meets the requirements of Section 422 of the Code or any successor provision.
(18) 'Other award' means a form of award based on, payable in, or otherwise related to shares that is not covered by Sections IX, X, XI, or XII of this Program.
(19) 'Performance stock' means a share the delivery of which is subject to attainment of specified performance criteria.
(20) 'Performance stock unit' means a stock unit the delivery or settlement of which is subject to attainment of specified performance criteria.
(21) 'Program' means this 2003 Incentive Program, as amended from time to time.
(22) 'Reporting person' means a person subject to the reporting requirements of Section 16(a) of the Exchange Act with respect to the shares.
(23) 'Resign' means to terminate at the initiative of the employee before standard retirement time. Resignation includes, without limitation, early retirement at the initiative of the employee. The time or date of a resignation for purposes of this Program is not necessarily the employee's last day on the payroll. See Section XV(3).
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(24) 'Restricted stock' means shares subject to restrictions on transfer and potential forfeiture for a specified restricted period.
(25) 'Restricted stock unit' means a stock unit subject to restrictions on transfer and potential forfeiture for a specified restricted period.
(26) 'Rule 16b-3' means Rule 16b-3 or any successor rule under the Exchange Act that exempts transactions under employee benefit plans, as in effect from time to time.
(27) 'Section 162(m)' means Section 162(m) of the Code and the regulations thereunder, as in effect from time to time.
(28) 'Share' means a share of common stock of the Corporation, or any security issued in exchange therefor.
(29) 'Stock unit' means a right with a value based on the value of shares.
(30) 'Shareholder-approved plan' means any of the plans constituting parts of any Incentive Programs previously approved by shareholders of the Corporation.
(31) 'Spread' means the difference between the exercise price per share of an award and the fair market value of the underlying shares on the date the award is exercised.
(32) 'Standard retirement time' means (a) for each US-dollar payroll employee, the first day of the month immediately following the month in which the employee attains age 65; and (b) for each other employee, the comparable age in that employee's payroll country as determined by the administrative authority with reference to local law, custom, and affiliate policies regarding retirement.
(33) 'Stock appreciation right' or 'SAR' means an award giving the grantee the right to receive the spread on the shares specified in the award.
(34) 'Terminate' means cease to be an employee for any reason, whether at the initiative of the employee, the employer, or otherwise. That reason could include, without limitation, resignation or retirement by the employee; discharge of the employee by the employer, with or without cause; death; transfer of employment to an entity that is not an affiliate; or a sale, divestiture, or other transaction as a result of which an employer ceases to be an affiliate. A change of employment from the Corporation or one affiliate to another affiliate, or to the Corporation, is not a termination. The time or date of termination is not necessarily the employee's last day on the payroll. See Section XV(3).
III. Administration
The Board is the ultimate administrative authority for this Program, with the power to interpret and administer its provisions. The Board may delegate its authority to a committee which, except in the case of the Compensation Committee, need not be a committee of the Board. Subject to the authority of the Board or an authorized committee, the Chairman and his delegates will serve as the administrative authority for purposes of establishing requirements and procedures for the operation of the Program; making final determinations and interpretations with respect to outstanding awards; and exercising other powers assigned to the administrative authority under this Program.
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IV. Compensation Committee
The Board will appoint a Compensation Committee. The Compensation Committee will consist of three or more non-employee members of the Board, each of whom satisfies such criteria of independence as the Board may establish and such additional regulatory or listing requirements as the Board may determine to be applicable or appropriate. No award under this Program may be granted to a member of the Compensation Committee.
V. Right to Grant Awards; Reserved Powers; Eligibility
(1) The Board is the ultimate granting authority for this Program, with the power to select eligible persons for participation and to make all decisions concerning the grant or amendment of awards. The Board may delegate this authority in whole or in part (a) in the case of reporting persons, to the Compensation Committee; and (b) in the case of employees who are not reporting persons, to a committee of two or more persons who may, but need not, be directors of the Corporation.
(2) The granting authority has sole discretion to select persons for awards under this Program, except that grants may be made only to persons who at the time of grant are, or within the immediately preceding 12 months have been, employees of the Corporation or of an affiliate in which the Corporation directly or indirectly holds a 50 percent or greater equity interest. No person is entitled to an award as a matter of right, and the grant of an award under this Program does not entitle a grantee to any future or additional awards.
VI. Term
This Program will become effective when approved by the shareholders of the Corporation and will terminate when there are no longer any outstanding awards under the Program.
VII. Available Shares
(1) The maximum number of shares issued pursuant to awards under this Program may not exceed 220,000,000 shares. Within this overall limitation, the following additional limitations also apply:
(a) No more than 20,000,000 shares may be issued under ISOs;
(b) No more than 5,000,000 shares may be granted under stock options or SARs to any one grantee in any one calendar year;
(c) No more than 10,000,000 shares may be issued under other awards pursuant to Section XIII; and
(d) Grants of performance stock and performance stock units to certain senior executives under Section XI(2) are subject to the limitation based on annual net income specified in Section XI(2)(b).
(2) To the extent an award under this Program is settled in cash, expires unexercised, or is forfeited or cancelled, shares subject to the award will not be considered to have been issued and will not be applied against the maximum number of shares under the preceding clause (1).
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(3) Shares surrendered to or withheld by the Corporation in payment of the exercise price or applicable taxes upon exercise or settlement of an award may also be used thereafter for additional awards.
VIII. Adjustments
Whenever a stock split, stock dividend, merger, or other relevant change in capitalization occurs, the administrative authority (which, in the case of reporting persons, must be the Compensation Committee) may adjust the terms of outstanding awards, as well as the terms of this Program relating to the number of shares that may be granted or issued, as appropriate to prevent either dilution or enlargement of the rights of grantees and potential grantees.
IX. Stock Options; SARs
(1) Subject to the terms of this Program, stock options and SARs may be granted to selected persons upon such terms and conditions as the granting authority determines, except that:
(a) The exercise price per share may not be less than 100 percent of fair market value on the date of grant;
(b) Except in case of death as provided in Section XVI, a stock option or SAR may not become exercisable until at least one year after the date of grant; and
(c) An unexercised stock option or SAR will expire at the earliest of the following times:
(i) Ten years after it is granted;
(ii) Any earlier date specified in the award; or
(iii) Such earlier date as may apply under Section XV.
(2) The granting authority may designate any stock option as an ISO. However, the aggregate fair market value (determined as of the date a stock option is granted) of shares underlying stock options designated as ISOs that become exercisable for the first time by any grantee during any calendar year (under this Program and all other plans of the Corporation and any affiliate) may not exceed $100,000 (or such other amount as may be reflected in the limits imposed from time to time by Section 422(d) of the Code or any successor provision). This limitation will be applied by taking stock options into account in the order in which they were granted. In addition, (a) the total number of shares granted as ISOs under this Program may not exceed the limit specified in Section VII(1)(a); and (b) no ISO may be granted after the tenth anniversary of the date on which shareholders approve this Program. If a stock o ption or portion that is intended to qualify as an ISO fails to meet the foregoing requirements, the option or portion will be treated as not being an ISO but will otherwise remain a valid stock option according to its terms.
(3) Payment of the exercise price of a stock option may be made in cash or shares in accordance with the terms of this Program and any requirements or procedures of the administrative authority in effect at the time. If permitted by the administrative authority, shares used as payment need not be physically delivered to the Corporation but may be deemed transferred so that only a net number of shares is physically
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delivered to the grantee in settlement of an option exercise. Shares used as payment will be valued at fair market value. For this purpose, the administrative authority may establish procedures under which fair market value is determined either on the date of exercise or as of the immediately preceding day.
(4) SARs may be granted as freestanding awards or in tandem with stock options. A tandem SAR may be included with a stock option at the time the option is granted or by an amendment of the option. Exercise of a tandem SAR will be deemed a surrender of the related stock option for cancellation and vice versa. SARs may be settled in cash, shares, or a combination thereof.
(5) A stock option or SAR may provide that it will be deemed to be automatically exercised on the last day of its term if the award has positive value and would otherwise expire unexercised under subsections (1)(c)(i) or (1)(c)(ii) of this Section IX.
X. Restricted Stock; Restricted Stock Units
Subject to the terms of this Program, restricted stock and restricted stock units may be granted to selected persons upon such terms and conditions as the granting authority determines, including: the duration and conditions of the applicable restricted periods; whether or not, in the case of restricted stock, the grantee has the right to vote the shares or receive dividends; and, in the case of restricted stock units, the method of settlement, which may be in cash, shares, or a combination thereof. However, except in case of death (which is covered in Section XVI), the restricted period for restricted stock and restricted stock units granted under this Section X may not be less than three years from the date the award is approved by the granting authority.
XI. Performance Stock; Performance Stock Units
(1) Subject to the terms of this Program, performance stock and performance stock units may be granted to selected persons upon such terms and conditions as the granting authority determines, including: the applicable performance periods and performance criteria; maximum, minimum and target settlement values, if applicable; whether or not, in the case of performance stock, the grantee has the right to vote the shares or receive dividends; and, in the case of performance stock units, the method of settlement, which may be in cash, shares, or another form of award permitted under this Program, or a combination thereof. However, the performance period for performance stock and performance stock units granted under this Section XI may not be less than 12 months. The extent to which performance criteria have been achieved will be determined by the administrative authority (which, in the case of awards granted under Section XI(2), must be the Compensation Committee).
(2) Performance stock or performance stock units granted to the Corporation's Chief Executive Officer, the other four most highly compensated officers, and any other key employees designated by the Compensation Committee as of the end of each taxable year of the Corporation will be subject to the following additional terms:
(a) The award will be subject both to the shareholder-approved performance goal specified in paragraph (b) of this Section XI(2) and to the attainment of such other objective goals as shall be pre-established by the Compensation Committee based on one or more of the following performance criteria: earnings per share,
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net income, cash flow, operating income, return on capital employed, and total shareholder return.
(b) The maximum amount of awards granted under these terms to any one grantee for any one year is limited to the shareholder-approved performance goal of one-half of one percent (0.5 percent) of the Corporation's net income from operations for that year. For this purpose, performance stock will be valued at the fair market value of shares and performance stock units will be valued at the fair market value of one share per unit on the date of grant. The Compensation Committee may award a grantee less, but not more, than the maximum award under this Section XI(2).
XII. Deferred Stock; Deferred Stock Units
(1) Subject to the terms of this Program, deferred stock and deferred stock units may be granted to selected persons upon such terms and conditions as the granting authority determines, including: the duration of the deferral period; the number of installments in which delivery of deferred stock or settlement of deferred stock units will be made; whether or not, in the case of deferred stock, the grantee has the right to vote the shares or receive dividends; and, in the case of deferred stock units, the method of settlement, which may be in cash, shares, or a combination thereof. However, deferred stock and deferred stock units granted under this Section XII may only be granted in lieu of salary, bonus, or incentive compensation that would otherwise be paid to the grantee in cash. For this purpose, deferred stock will be valued at the fair market value of shares and deferred stock units will be va lued at the fair market value of one share per unit on the date of grant.
(2) Deferred stock and deferred stock units may be awarded at the election of the granting authority or, if the granting authority permits and subject to any requirements and procedures established by the administrative authority, at the election of the grantee.
XIII. Other Awards
Subject to the terms of this Program (including the 10,000,000 share limit specified in Section VII(1)(c)), other awards may be granted to selected persons upon such terms and conditions as the granting authority determines consistent with the overall purposes of this Program.
XIV. Deferred and Installment Settlement; Dividend and Interest Equivalents
(1) The granting authority may permit or require settlement of any award under this Program to be deferred and to be made in one or more installments upon such terms and conditions as the granting authority may determine at the time the award is granted or by amendment of the award.
(2) Any form of award may accrue dividend equivalents upon such terms and conditions as the granting authority determines. Dividend equivalents may be paid currently in cash or may be deemed to be reinvested in additional shares (which may thereafter accrue additional dividend equivalents). Any reinvestment will be at fair market value on the date thereof. Reinvested dividend equivalents will be settled in cash or shares
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upon exercise, settlement, or payment of, or lapse of restrictions on, the underlying award, and will expire or be forfeited or cancelled upon the same conditions as the underlying award.
(3) An award that is settled in whole or in part in cash on a deferred basis may provide for interest equivalents to be credited with respect to the cash payment upon such terms and conditions as the granting authority determines. Interest equivalents may be paid currently or may be added to the balance of the award amount and compounded. Compounded interest equivalents will be paid in cash upon exercise, settlement, or payment of, or lapse of restrictions on, the underlying award, and will expire or be forfeited or cancelled upon the same conditions as the underlying award. The granting authority may delegate to the administrative authority the right to determine the rate or rates at which interest equivalents will accrue.
(4) The crediting of dividend or interest equivalents on an outstanding award is not a new grant for purposes of the eligibility provisions of Section V(2).
XV. Termination; Detrimental Activity
(1) If a grantee terminates before standard retirement time, other than by reason of death, all outstanding awards of the grantee under this Program (including unexercised stock options or SARs, restricted stock and restricted stock units still subject to restriction, and performance stock, performance stock units, deferred stock, deferred stock units, and other awards not yet paid or settled) will automatically expire and be forfeited as of the date of termination except to the extent the administrative authority (which, in the case of reporting persons, must be the Compensation Committee) determines otherwise.
(2) If a grantee resigns, the administrative authority (which, in the case of reporting persons, must be the Compensation Committee) may, in furtherance of the employee-retention purpose of this Program or for other good reason, require the grantee to pay to the Corporation an amount equal to the spread on any stock option or SAR exercised by the grantee during the six-month period immediately preceding such resignation. The provisions of this Section XV(2) are in addition to, not in lieu of, the other consequences of termination provided in this Section XV.
(3) For purposes of this Program, the administrative authority may determine that the time or date an employee resigns or otherwise terminates is the time or date the employee gives notice of resignation, accepts employment with another employer, otherwise indicates an intent to resign, or is discharged. The time or date of termination for this purpose is not necessarily the employee's last day on the payroll.
(4) If the administrative authority (which, in the case of reporting persons, must be the Compensation Committee) determines that a grantee has engaged in detrimental activity, whether or not the grantee is still an employee, then the administrative authority may, effective as of the time of such determination, cancel and cause to expire all or part of the grantee's outstanding awards under this Program (including unexercised stock options or SARs, restricted stock and restricted stock units still subject to restriction, and performance stock, performance stock units, deferred stock, deferred stock units, and other awards not yet paid or settled).
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(5) If the administrative authority is advised or has reason to believe that a grantee (a) may have engaged in detrimental activity; or (b) may have accepted employment with another employer or otherwise indicated an intent to resign, the authority may suspend the exercise, delivery or settlement of all or any specified portion of such grantee's outstanding awards pending an investigation of the matter.
XVI. Death; Beneficiary Designation
(1) Unless otherwise specified in the award, if a grantee dies:
(a) Any of the grantee's stock options or SARs that are not yet exercisable will become immediately exercisable in full;
(b) Any remaining restrictions with respect to the grantee's restricted stock or restricted stock units will expire; and
(c) The administrative authority may alter or accelerate the settlement schedule of any performance stock, performance stock units, deferred stock, deferred stock units, or other award payable on a deferred or installment basis.
(2) Any rights with respect to an award existing after the grantee dies are exercisable by the grantee's designated beneficiary or, if there is no designated beneficiary, by the grantee's estate representative or lawful heirs as demonstrated to the satisfaction of the administrative authority. Beneficiary designations must be made in writing and in accordance with such requirements and procedures as the administrative authority may establish.
XVII. Amendments to the Program and Outstanding Awards; Shareholder Approval
(1) The Board can from time to time amend this Program or halt the grant of new awards under this Program, except that approval of the shareholders of the Corporation will be required for any amendment (other than adjustments under Section VIII):
(a) To increase the maximum number of shares that may be issued under
Section VII;
(b) To decrease the minimum exercise price per share of a stock option or SAR; or
(c) That would otherwise materially increase the benefits accruing to participants under the Program.
An amendment of this Program will, unless the amendment provides otherwise, be immediately and automatically effective for all outstanding awards.
(2) Without amending this Program, the granting authority may amend any one or more outstanding awards under this Program or any other shareholder-approved plan to incorporate in those awards any terms that could be incorporated in a new award under this Program, except that approval of the shareholders of the Corporation will be required for any amendment of an outstanding stock option or SAR to decrease the exercise price per share (other than an adjustment under Section VIII). An award as amended must satisfy any conditions or limitations applicable to the particular type of award under the terms of this Program.
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(3) Approval of the shareholders of the Corporation will also be required for (a) any cancellation of an outstanding option or SAR in exchange for the grant of a new option or SAR having a lower exercise price per share or (b) any cancellation of an outstanding option or SAR having an exercise price above the current market price of the shares in exchange for another form of award under this Program.
XVIII. Withholding Taxes
The Corporation has the right, in its sole discretion, to deduct or withhold at any time shares, stock units, or cash otherwise payable or deliverable in order to satisfy any required withholding, social security, and similar taxes and contributions with respect to awards under this Program. Withheld shares may be retained by the Corporation or sold on behalf of the grantee. Alternatively, the Corporation also has the right in its sole discretion, to require the grantee at any time to deposit with the Corporation cash in an amount determined by the Corporation to be necessary to satisfy required withholding, social security, and similar taxes and contributions with respect to awards under this Program. In its sole discretion, the Corporation may permit the grantee to satisfy all or part of the grantee's obligations under this Section XVIII by delivering, in accordance with any applicable requireme nts or procedures of the administrative authority, shares previously owned by the grantee. Shares withheld or delivered in accordance with this Section XVIII will be valued at fair market value. For this purpose, the administrative authority may establish procedures under which fair market value is determined either on the date of withholding or delivery or as of the immediately preceding day.
XIX. Non-US Awards
Subject to the limitations contained in this Program, the granting authority may establish different terms and conditions for awards to persons who are residents or nationals of countries other than the United States in order to accommodate the local laws, tax policies, or customs of such countries. Such terms and conditions may include, without limitation, granting cash-only stock appreciation rights or stock units in lieu of or in tandem with share awards. The granting authority may adopt one or more supplements or sub-plans under this Program to implement those different terms and conditions.
XX. General Provisions
(1) Shares subject to awards under this Program may either be authorized but unissued shares or previously issued shares that have been reacquired by the Corporation.
(2) For reporting persons, transactions under this Program are intended to comply with all applicable conditions of Rule 16b-3. If any provision of this Program or any action by an authority under this Program fails to so comply, such provision or action will, without further action by any person, be deemed to be automatically amended to the extent necessary to effect compliance with Rule 16b-3 or if such provision or action cannot be amended to effect such compliance, be deemed null and void.
(3) An award under this Program is not transferable except by will or the laws of descent and distribution, and is not subject to attachment, execution, or levy of any kind. The designation by a grantee of a designated beneficiary is not a transfer for this purpose.
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(4) A particular form of award may be granted to a grantee either alone or in addition to other awards hereunder. The provisions of particular forms of award need not be the same for each grantee.
(5) Unless otherwise provided in the terms of an award, an award will not give the grantee any rights as a shareholder until any shares subject to or deliverable in settlement of the award are actually issued and registered in the name of the grantee free of restriction.
(6) An award may be granted for no consideration, for the minimum consideration required by applicable law, or for such other consideration as the granting authority may determine.
(7) An award and any shares in settlement of an award may be evidenced in such manner as the administrative authority determines, including by physical instrument or certificate, by electronic communication, or by book entry. In the event of any dispute or discrepancy regarding the terms of an award, the records of the administrative authority will be determinative.
(8) The grant of an award under this Program does not constitute or imply a contract of employment and does not in any way limit or restrict the ability of the employer to terminate the grantee's employment, with or without cause, even if such termination results in the expiration, cancellation, or forfeiture of outstanding awards.
(9) A grantee will have only a contractual right to the shares or amounts, if any, payable in settlement of an award under this Program, unsecured by any assets of the Corporation or any other entity.
(10) This Program will be governed by the laws of the State of New York and the United States of America, without regard to any conflict of law rules.
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EXHIBIT 31.1
Certification by Rex W. Tillerson
Pursuant to Securities Exchange Act Rule 13a-14(a)
I, Rex W. Tillerson, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Exxon Mobil Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 6, 2008
/s/ Rex W. Tillerson
Rex W. Tillerson
Chief Executive Officer
EXHIBIT 31.2
Certification by Donald D. Humphreys
Pursuant to Securities Exchange Act Rule 13a-14(a)
I, Donald D. Humphreys, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Exxon Mobil Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 6, 2008
/s/ Donald D. Humphreys
Donald D. Humphreys
Senior Vice President and Treasurer
(Principal Financial Officer)
EXHIBIT 31.3
Certification by Patrick T. Mulva
Pursuant to Securities Exchange Act Rule 13a-14(a)
I, Patrick T. Mulva, certify that:
1.
I have reviewed this quarterly report on Form 10-Q of Exxon Mobil Corporation;
2.
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.
The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
(a)
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
5.
The registrant's other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
(a)
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
(b)
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
Date: May 6, 2008
/s/ Patrick T. Mulva
Patrick T. Mulva
Vice President and Controller
(Principal Accounting Officer)
EXHIBIT 32.1
Certification of Periodic Financial Report
Pursuant to 18 U.S.C. Section 1350
For purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Rex W. Tillerson, the chief executive officer of Exxon Mobil Corporation (the Company), hereby certifies that, to his knowledge:
(i)
the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 6, 2008
/s/ Rex W. Tillerson
Rex W. Tillerson
Chief Executive Officer
A signed original of this written statement required by Section 906 has been provided to Exxon Mobil Corporation and will be retained by Exxon Mobil Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.2
Certification of Periodic Financial Report
Pursuant to 18 U.S.C. Section 1350
For purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Donald D. Humphreys, the principal financial officer of Exxon Mobil Corporation (the Company), hereby certifies that, to his knowledge:
(i)
the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 6, 2008
/s/ Donald D. Humphreys
Donald D. Humphreys
Senior Vice President and Treasurer
(Principal Financial Officer)
A signed original of this written statement required by Section 906 has been provided to Exxon Mobil Corporation and will be retained by Exxon Mobil Corporation and furnished to the Securities and Exchange Commission or its staff upon request.
EXHIBIT 32.3
Certification of Periodic Financial Report
Pursuant to 18 U.S.C. Section 1350
For purposes of 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, the undersigned, Patrick T. Mulva, the principal accounting officer of Exxon Mobil Corporation (the Company), hereby certifies that, to his knowledge:
(i)
the Quarterly Report on Form 10-Q of the Company for the quarter ended March 31, 2008, as filed with the Securities and Exchange Commission on the date hereof (the Report) fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(ii) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 6, 2008
/s/ Patrick T. Mulva
Patrick T. Mulva
Vice President and Controller
(Principal Accounting Officer)
A signed original of this written statement required by Section 906 has been provided to Exxon Mobil Corporation and will be retained by Exxon Mobil Corporation and furnished to the Securities and Exchange Commission or its staff upon request.