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 September 30, 2012

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   No ¨ 

 

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   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 September 30, 2012

Common stock, without par value                                                   4,559,342,639

 

 


 

 

 

EXXON MOBIL CORPORATION

 

FORM 10-Q

 

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30,  2012

 

TABLE OF CONTENTS

 

 

 

 

 

Page

Number

                    PART I.  FINANCIAL INFORMATION

 

 

 

 

Item 1.       Financial Statements

 

 

 

     Condensed Consolidated Statement of Income

Three and nine months ended September 30, 2012 and 2011

 

3

 

     Condensed Consolidated Statement of Comprehensive Income

Three and nine months ended September 30, 2012 and 2011

 

4

 

     Condensed Consolidated Balance Sheet

As of September 30, 2012 and December 31, 2011

5

 

 

 

 

     Condensed Consolidated Statement of Cash Flows

          Nine months ended September 30, 2012 and 2011

 

6

 

     Condensed Consolidated Statement of Changes in Equity

          Nine months ended September 30, 2012 and 2011

 

7

 

     Notes to Condensed Consolidated Financial Statements

 

8

 

Item 2.       Management's Discussion and Analysis of Financial

                     Condition and Results of Operations

 

16

 

Item 3.       Quantitative and Qualitative Disclosures About Market Risk

 

21

 

Item 4.       Controls and Procedures

 

21

 

 

 

 

                  PART II.  OTHER INFORMATION

 

 

 

 

Item 1.       Legal Proceedings

 

22

 

Item 2.       Unregistered Sales of Equity Securities and Use of Proceeds

 

23

 

Item 6.       Exhibits

 

23

 

Signature

 

24

 

Index to Exhibits

 

25

 

       


-2-

 


 

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Item 1.  Financial Statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30,

 

September 30,

 

 

 

 

2012 

 

 

2011 

 

 

2012 

 

 

2011 

REVENUES AND OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue (1) 

 

$

111,554 

 

$

120,475 

 

$

343,488 

 

$

351,120 

Income from equity affiliates

 

 

3,386 

 

 

3,915 

 

 

11,247 

 

 

11,462 

Other income

 

 

766 

 

 

940 

 

 

12,387 

 

 

2,238 

 

Total revenues and other income

 

 

115,706 

 

 

125,330 

 

 

367,122 

 

 

364,820 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

COSTS AND OTHER DEDUCTIONS

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

 

65,180 

 

 

69,289 

 

 

201,349 

 

 

199,233 

Production and manufacturing expenses

 

 

9,128 

 

 

10,199 

 

 

28,765 

 

 

30,041 

Selling, general and administrative expenses

 

 

3,468 

 

 

3,764 

 

 

10,555 

 

 

11,072 

Depreciation and depletion

 

 

4,037 

 

 

3,866 

 

 

11,778 

 

 

11,508 

Exploration expenses, including dry holes

 

 

494 

 

 

728 

 

 

1,388 

 

 

1,654 

Interest expense

 

 

59 

 

 

98 

 

 

216 

 

 

172 

Sales-based taxes (1) 

 

 

8,137 

 

 

8,484 

 

 

24,657 

 

 

25,013 

Other taxes and duties

 

 

7,883 

 

 

10,222 

 

 

27,388 

 

 

29,911 

 

Total costs and other deductions

 

 

98,386 

 

 

106,650 

 

 

306,096 

 

 

308,604 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Income before income taxes

 

 

17,320 

 

 

18,680 

 

 

61,026 

 

 

56,216 

 

Income taxes

 

 

7,394 

 

 

8,009 

 

 

23,647 

 

 

23,734 

Net income including noncontrolling interests

 

 

9,926 

 

 

10,671 

 

 

37,379 

 

 

32,482 

 

Net income attributable to noncontrolling interests

 

 

356 

 

 

341 

 

 

2,449 

 

 

822 

Net income attributable to ExxonMobil

 

$

9,570 

 

$

10,330 

 

$

34,930 

 

$

31,660 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars)

 

$

2.09 

 

$

2.13 

 

$

7.50 

 

$

6.46 

  

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars)

 

$

2.09 

 

$

2.13 

 

$

7.50 

 

$

6.45 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share (dollars) 

 

$

0.57 

 

$

0.47 

 

$

1.61 

 

$

1.38 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Sales-based taxes included in sales and other

 

 

 

 

 

 

 

 

 

 

 

 

 

operating revenue

 

$

8,137 

 

$

8,484 

 

$

24,657 

 

$

25,013 

 

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.


-3-

 


 

 

 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

 

2012 

 

2011 

 

2012 

 

2011 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

9,926 

 

$

10,671 

 

$

37,379 

 

$

32,482 

 

 

Other comprehensive income (net of income taxes)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

1,620 

 

 

(3,336)

 

 

1,298 

 

 

(1,224)

 

 

 

Adjustment for foreign exchange translation (gain)/loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 included in net income

 

 

(119)

 

 

 

 

(4,354)

 

 

 

 

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

(224)

 

 

272 

 

 

(404)

 

 

(293)

 

 

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

454 

 

 

298 

 

 

2,083 

 

 

929 

 

 

 

Change in fair value of cash flow hedges

 

 

 

 

14 

 

 

 

 

24 

 

 

 

Realized (gain)/loss from settled cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

included in net income

 

 

 

 

(17)

 

 

 

 

(50)

 

 

 

 

Total other comprehensive income

 

 

1,731 

 

 

(2,769)

 

 

(1,377)

 

 

(614)

 

 

Comprehensive income including noncontrolling interests

 

 

11,657 

 

 

7,902 

 

 

36,002 

 

 

31,868 

 

 

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

noncontrolling interests

 

 

541 

 

 

101 

 

 

1,062 

 

 

713 

 

 

Comprehensive income attributable to ExxonMobil

 

$

11,116 

 

$

7,801 

 

$

34,940 

 

$

31,155 

 

 

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.


-4-

 


 

 

 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED BALANCE SHEET

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

Dec. 31,

 

 

 

 

 

2012 

 

2011 

 

ASSETS

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

$

13,055 

 

$

12,664 

 

 

Cash and cash equivalents – restricted

 

 

206 

 

 

404 

 

 

Notes and accounts receivable – net

 

 

36,635 

 

 

38,642 

 

 

Inventories

 

 

 

 

 

 

 

 

 

Crude oil, products and merchandise

 

 

13,010 

 

 

11,665 

 

 

 

Materials and supplies

 

 

3,565 

 

 

3,359 

 

 

Other current assets

 

 

5,667 

 

 

6,229 

 

 

 

Total current assets

 

 

72,138 

 

 

72,963 

 

Investments, advances and long-term receivables

 

 

35,105 

 

 

34,333 

 

Property, plant and equipment – net

 

 

220,330 

 

 

214,664 

 

Other assets, including intangibles – net

 

 

7,618 

 

 

9,092 

 

 

 

Total assets

 

$

335,191 

 

$

331,052 

 

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

Notes and loans payable

 

$

3,496 

 

$

7,711 

 

 

Accounts payable and accrued liabilities

 

 

53,516 

 

 

57,067 

 

 

Income taxes payable

 

 

13,049 

 

 

12,727 

 

 

 

Total current liabilities

 

 

70,061 

 

 

77,505 

 

Long-term debt

 

 

8,928 

 

 

9,322 

 

Postretirement benefits reserves

 

 

21,652 

 

 

24,994 

 

Deferred income tax liabilities

 

 

37,642 

 

 

36,618 

 

Other long-term obligations

 

 

24,553 

 

 

21,869 

 

 

 

Total liabilities

 

 

162,836 

 

 

170,308 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EQUITY

 

 

 

 

 

 

 

Common stock, without par value:

 

 

 

 

 

 

 

 

Authorized:   9,000 million shares

 

 

 

 

 

 

 

 

Issued:         8,019 million shares

 

 

9,645 

 

 

9,512 

 

Earnings reinvested

 

 

358,369 

 

 

330,939 

 

Accumulated other comprehensive income

 

 

(9,113)

 

 

(9,123)

 

Common stock held in treasury:

 

 

 

 

 

 

 

 

3,460 million shares at September 30, 2012

 

 

(192,188)

 

 

 

 

 

3,285 million shares at December 31, 2011

 

 

 

 

 

(176,932)

 

 

 

ExxonMobil share of equity

 

 

166,713 

 

 

154,396 

 

Noncontrolling interests

 

 

5,642 

 

 

6,348 

 

 

 

Total equity

 

 

172,355 

 

 

160,744 

 

 

 

Total liabilities and equity

 

$

335,191 

 

$

331,052 

 

 

The number of shares of common stock issued and outstanding at September 30, 2012 and December 31, 2011 were 4,559,342,639 and 4,733,948,268, respectively.

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.


-5-

 


 

 

 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

2012 

 

2011 

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

$

37,379 

 

$

32,482 

 

 

Depreciation and depletion

 

 

11,778 

 

 

11,508 

 

 

Changes in operational working capital, excluding cash and debt

 

 

3,119 

 

 

2,154 

 

 

Net (gain) on asset sales

 

 

(11,693)

 

 

(1,269)

 

 

All other items – net

 

 

2,363 

 

 

(281)

 

 

 

 

Net cash provided by operating activities

 

 

42,946 

 

 

44,594 

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(24,214)

 

 

(22,341)

 

 

Proceeds associated with sales of subsidiaries, property, plant and

 

 

 

 

 

 

 

 

 

equipment, and sales and returns of investments

 

 

6,850 

 

 

4,246 

 

 

Additional investments and advances

 

 

(768)

 

 

(3,122)

 

 

Additions to marketable securities

 

 

 

 

(1,754)

 

 

Sales of marketable securities

 

 

 

 

1,674 

 

 

Other investing activities – net

 

 

1,533 

 

 

1,144 

 

 

 

 

Net cash used in investing activities

 

 

(16,599)

 

 

(20,153)

 

 

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

Additions to long-term debt

 

 

597 

 

 

457 

 

 

Reductions in long-term debt

 

 

(15)

 

 

(236)

 

 

Additions/(reductions) in short-term debt – net

 

 

(3,506)

 

 

1,414 

 

 

Cash dividends to ExxonMobil shareholders

 

 

(7,500)

 

 

(6,773)

 

 

Cash dividends to noncontrolling interests

 

 

(287)

 

 

(264)

 

 

Changes in noncontrolling interests

 

 

198 

 

 

(12)

 

 

Tax benefits related to stock-based awards

 

 

 

 

220 

 

 

Common stock acquired

 

 

(15,814)

 

 

(16,633)

 

 

Common stock sold

 

 

184 

 

 

616 

 

 

 

 

Net cash used in financing activities

 

 

(26,143)

 

 

(21,211)

 

 

 

 

 

 

 

 

 

 

 

 

Effects of exchange rate changes on cash

 

 

187 

 

 

(33)

 

Increase/(decrease) in cash and cash equivalents

 

 

391 

 

 

3,197 

 

Cash and cash equivalents at beginning of period

 

 

12,664 

 

 

7,825 

 

Cash and cash equivalents at end of period

 

$

13,055 

 

$

11,022 

 

 

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES

 

 

 

 

 

 

 

 

Income taxes paid

 

$

17,895 

 

$

20,349 

 

 

Cash interest paid

 

$

387 

 

$

390 

 

 

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.


-6-

 


 

 

 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ExxonMobil Share of Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compre-

 

Stock

 

ExxonMobil

 

Non-

 

 

 

 

 

 

Common

 

Earnings

 

hensive

 

Held in

 

Share of

 

controlling

 

Total

 

 

 

Stock

 

Reinvested

 

Income

 

Treasury

 

Equity

 

Interests

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2010

 

$

9,371 

 

$

298,899 

 

$

(4,823)

 

$

(156,608)

 

$

146,839 

 

$

5,840 

 

$

152,679 

Amortization of stock-based awards

 

 

572 

 

 

 

 

 

 

 

 

572 

 

 

 

 

572 

Tax benefits related to stock-based awards

159 

 

 

 

 

 

 

 

 

159 

 

 

 

 

159 

Other

 

 

(596)

 

 

 

 

 

 

 

 

(596)

 

 

(4)

 

 

(600)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income for the period

 

 

 

 

31,660 

 

 

 

 

 

 

31,660 

 

 

822 

 

 

32,482 

Dividends – common shares

 

 

 

 

(6,773)

 

 

 

 

 

 

(6,773)

 

 

(264)

 

 

(7,037)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

(505)

 

 

 

 

(505)

 

 

(109)

 

 

(614)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions, at cost

 

 

 

 

 

 

 

 

(16,633)

 

 

(16,633)

 

 

(12)

 

 

(16,645)

Dispositions

 

 

 

 

 

 

 

 

1,216 

 

 

1,216 

 

 

 

 

1,216 

Balance as of September 30, 2011

 

$

9,506 

 

$

323,786 

 

$

(5,328)

 

$

(172,025)

 

$

155,939 

 

$

6,273 

 

$

162,212 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2011

 

$

9,512 

 

$

330,939 

 

$

(9,123)

 

$

(176,932)

 

$

154,396 

 

$

6,348 

 

$

160,744 

Amortization of stock-based awards

 

 

618 

 

 

 

 

 

 

 

 

618 

 

 

 

 

618 

Tax benefits related to stock-based awards

 

 

252 

 

 

 

 

 

 

 

 

252 

 

 

 

 

252 

Other

 

 

(737)

 

 

 

 

 

 

 

 

(737)

 

 

(1,450)

 

 

(2,187)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income for the period

 

 

 

 

34,930 

 

 

 

 

 

 

34,930 

 

 

2,449 

 

 

37,379 

Dividends – common shares

 

 

 

 

(7,500)

 

 

 

 

 

 

(7,500)

 

 

(287)

 

 

(7,787)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other comprehensive income

 

 

 

 

 

 

10 

 

 

 

 

10 

 

 

(1,387)

 

 

(1,377)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Acquisitions, at cost

 

 

 

 

 

 

 

 

(15,814)

 

 

(15,814)

 

 

(31)

 

 

(15,845)

Dispositions

 

 

 

 

 

 

 

 

558 

 

 

558 

 

 

 

 

558 

Balance as of September 30, 2012

 

$

9,645 

 

$

358,369 

 

$

(9,113)

 

$

(192,188)

 

$

166,713 

 

$

5,642 

 

$

172,355 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2012

 

 

 

 

Nine Months Ended September 30, 2011

 

 

 

 

 

 

Held in

 

 

 

 

 

 

 

 

 

 

Held in

 

 

 

Common Stock Share Activity

 

Issued

 

Treasury

 

Outstanding

 

 

 

 

Issued

 

Treasury

 

Outstanding

 

 

(millions of shares)

 

 

 

 

(millions of shares)

Balance as of December 31

 

 

8,019 

 

 

(3,285)

 

 

4,734 

 

 

 

 

 

8,019 

 

 

(3,040)

 

 

4,979 

 

Acquisitions

 

 

 

 

(185)

 

 

(185)

 

 

 

 

 

 

 

(209)

 

 

(209)

 

Dispositions

 

 

 

 

10 

 

 

10 

 

 

 

 

 

 

 

23 

 

 

23 

Balance as of September 30

 

 

8,019 

 

 

(3,460)

 

 

4,559 

 

 

 

 

 

8,019 

 

 

(3,226)

 

 

4,793 

 

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.


-7-

 


 

 

 

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 2011 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.     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 significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters as well as other matters which management believes should be disclosed. 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 material adverse effect upon the Corporation's operations, financial condition, or financial statements taken as a whole.

 

On June 30, 2011, a state district court jury in Baltimore County, Maryland returned a verdict against Exxon Mobil Corporation in Allison, et al v. Exxon Mobil Corporation, a case involving an accidental 26,000 gallon gasoline leak at a suburban Baltimore service station. The verdict included approximately $497 million in compensatory damages and approximately $1.0 billion in punitive damages in a finding that ExxonMobil fraudulently misled the plaintiff-residents about the events leading up to the leak, the leak's discovery, and the nature and extent of any groundwater contamination. ExxonMobil believes the verdict is not justified by the evidence and that the amount of the compensatory award is grossly excessive and the imposition of punitive damages is improper and unconstitutional. The trial court denied a post-trial motion that ExxonMobil filed to overturn the punitive damages verdict and entered a final judgment in the amount of $1,488 million. ExxonMobil has appealed the verdict and judgment. The appeal is pending before the Maryland Court of Appeals. In an earlier trial involving the same leak and different plaintiffs, the jury awarded compensatory damages but rejected the plaintiffs' punitive damages claims. Those plaintiffs did not appeal the jury's denial of punitive damages. On February 9, 2012, the Maryland Court of Special Appeals reversed in part and affirmed in part the trial court's decision on compensatory damages in that case. The Maryland Court of Appeals granted writs of certiorari to both parties in response to their separate petitions seeking reversals of portions of the Court of Special Appeals' decision. The appeals in both of these cases were consolidated before the Maryland Court of Appeals and arguments were held on November 5, 2012.  The ultimate outcome of all of this litigation is not expected to have a material adverse effect upon the Corporation's operations, financial condition, or financial statements taken as a whole.

 

Other Contingencies

 

The Corporation and certain of its consolidated subsidiaries were contingently liable at September 30, 2012, for guarantees relating to notes, loans and performance under contracts. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


-8-

 


 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of September 30, 2012

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

Other

 

 

 

 

 

 

 

 

 

 

Company

 

Third Party

 

 

 

 

 

 

 

 

 

 

Obligations (1) 

 

Obligations

 

Total

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

Guarantees

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-related

 

$

2,224 

 

$

56 

 

$

2,280 

 

 

 

 

Other

 

 

3,243 

 

 

4,211 

 

 

7,454 

 

 

 

 

 

Total

 

$

5,467 

 

$

4,267 

 

$

9,734 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) ExxonMobil share

 

 

 

 

 

 

 

 

 

 

 

 

Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. The Corporation's outstanding unconditional purchase obligations at September 30, 2012, 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 Venezuela’s 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 PdVSA’s or one of its affiliate’s 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 the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project.  ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.

 

On September 6, 2007, affiliates of ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) invoking ICSID jurisdiction under Venezuela’s Investment Law and the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID Tribunal issued a decision on June 10, 2010, finding that it had jurisdiction to proceed on the basis of the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID arbitration proceeding is continuing and a hearing on the merits was held in February 2012.  At this time, the net impact of these matters on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.

 

An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award.  The Contractors have appealed that judgment. At this time, the net impact of this matter on the Corporation's consolidated financial results cannot be reasonably estimated. However, regardless of the outcome of enforcement proceedings, the Corporation does not expect the proceedings to have a material effect upon the Corporation's operations or financial condition. 


-9-

 


 

 

 

3.     Other Comprehensive Income Information

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ExxonMobil Share of Accumulated

 

 

 

 

 

Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cumulative

 

Post-

 

Unrealized

 

 

 

 

 

 

 

 

Foreign

 

retirement

 

Change in

 

 

 

 

 

 

 

 

Exchange

 

Benefits

 

Fair Value

 

 

 

 

 

 

 

 

Translation

 

Reserves

 

on Cash

 

 

 

 

 

 

 

 

Adjustment

 

Adjustment

 

Flow Hedges

 

Total

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2010

 

$

 5,011 

 

$

 (9,889) 

 

$

 55 

 

$

 (4,823) 

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

 (1,110) 

 

 

 (252) 

 

 

 24 

 

 

 (1,338) 

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

 - 

 

 

 883 

 

 

 (50) 

 

 

 833 

 

Total change in accumulated other comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

 

 

 (1,110) 

 

 

 631 

 

 

 (26) 

 

 

 (505) 

 

Balance as of September 30, 2011

 

$

 3,901 

 

$

 (9,258) 

 

$

 29 

 

$

 (5,328) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2011

 

$

 4,168 

 

$

 (13,291) 

 

$

 - 

 

$

 (9,123) 

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

 1,159 

 

 

 (351) 

 

 

 - 

 

 

 808 

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

 (2,603) 

 

 

 1,805 

 

 

 - 

 

 

 (798) 

 

Total change in accumulated other comprehensive

 

 

 

 

 

 

 

 

 

 

 

 

 

 

income

 

 

 (1,444) 

 

 

 1,454 

 

 

 - 

 

 

 10 

 

Balance as of September 30, 2012

 

$

 2,724 

 

$

 (11,837) 

 

$

 - 

 

$

 (9,113) 

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

2012 

 

2011 

 

2012 

 

2011 

 

 

 

 

 

(millions of dollars)

 

Income Tax (Expense)/Credit For

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of Other Comprehensive Income

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

$

 (55) 

 

$

 121 

 

$

 (92) 

 

$

 34 

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

 100 

 

 

 (111) 

 

 

 190 

 

 

 126 

 

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

 (200) 

 

 

 (132) 

 

 

 (1,132) 

 

 

 (433) 

 

Unrealized change in fair value on cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Change in fair value of cash flow hedges

 

 

 - 

 

 

 (9) 

 

 

 - 

 

 

 (14) 

 

  

Realized (gain)/loss from settled cash flow hedges

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

included in net income

 

 

 - 

 

 

 11 

 

 

 - 

 

 

 31 

 

Total

 

$

 (155) 

 

$

 (120) 

 

$

 (1,034) 

 

$

 (256) 


-10-

 


 

 

 

4.     Earnings Per Share

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

2012 

 

2011 

 

2012 

 

2011 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

$

9,570 

 

$

10,330 

 

$

34,930 

 

$

31,660 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding (millions of shares)

 

 

4,597 

 

 

4,839 

 

 

4,657 

 

 

4,902 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars)

 

$

2.09 

 

$

2.13 

 

$

7.50 

 

$

6.46 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

$

9,570 

 

$

10,330 

 

$

34,930 

 

$

31,660 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding (millions of shares)

 

 

4,597 

 

 

4,839 

 

 

4,657 

 

 

4,902 

 

 

 

    Effect of employee stock-based awards

 

 

 - 

 

 

 

 

 - 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding - assuming dilution

 

 

4,597 

 

 

4,843 

 

 

4,657 

 

 

4,908 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

- assuming dilution (dollars)

 

$

2.09 

 

$

2.13 

 

$

7.50 

 

$

6.45 


-11-

 


 

 

 

5.     Pension and Other Postretirement Benefits

 

 

 

 

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

September 30,

 

 

 

 

 

 

2012 

 

2011 

 

2012 

 

2011 

 

 

 

 

 

 

(millions of dollars)

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

 173 

 

$

 148 

 

$

 489 

 

$

 397 

 

 

 

Interest cost

 

 

 205 

 

 

 198 

 

 

 615 

 

 

 594 

 

 

 

Expected return on plan assets

 

 

 (196) 

 

 

 (192) 

 

 

 (590) 

 

 

 (577) 

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

 146 

 

 

 123 

 

 

 436 

 

 

 370 

 

 

 

Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

curtailment/settlement cost

 

 

 123 

 

 

 64 

 

 

 369 

 

 

 266 

 

 

 

Net benefit cost

 

$

 451 

 

$

 341 

 

$

 1,319 

 

$

 1,050 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

$

 156 

 

$

 147 

 

$

 490