10-Q 1 xom10q2q2013.htm FORM 10-Q  

 

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

x   QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended June 30, 2013

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 June 30, 2013

Common stock, without par value

 

 4,401,631,689 

 

 


 

 

 

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2013

 

TABLE OF CONTENTS

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

Item 1.       Financial Statements

 

 

     Condensed Consolidated Statement of Income

Three and six months ended June 30, 2013 and 2012

 

3

     Condensed Consolidated Statement of Comprehensive Income

Three and six months ended June 30, 2013 and 2012

 

4

     Condensed Consolidated Balance Sheet

As of June 30, 2013 and December 31, 2012

5

 

 

     Condensed Consolidated Statement of Cash Flows

          Six months ended June 30, 2013 and 2012

 

6

     Condensed Consolidated Statement of Changes in Equity

          Six months ended June 30, 2013 and 2012

 

7

     Notes to Condensed Consolidated Financial Statements

 

8

Item 2.       Management's Discussion and Analysis of Financial

                     Condition and Results of Operations

 

14

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

 

24

Item 6.       Exhibits

 

24

Signature

 

25

Index to Exhibits

 

26


-2-

 


 

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Item 1.  Financial Statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

2013 

 

 

2012 

 

 

2013 

 

 

2012 

Revenues and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue (1) 

 

 

102,853 

 

 

112,745 

 

 

206,681 

 

 

231,934 

 

Income from equity affiliates

 

 

3,098 

 

 

3,651 

 

 

7,516 

 

 

7,861 

 

Other income

 

 

518 

 

 

10,967 

 

 

1,079 

 

 

11,621 

 

 

Total revenues and other income

 

 

106,469 

 

 

127,363 

 

 

215,276 

 

 

251,416 

Costs and other deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

 

59,481 

 

 

66,344 

 

 

119,380 

 

 

136,169 

 

Production and manufacturing expenses

 

 

10,278 

 

 

9,787 

 

 

20,014 

 

 

19,637 

 

Selling, general and administrative expenses

 

 

3,268 

 

 

3,486 

 

 

6,386 

 

 

7,087 

 

Depreciation and depletion

 

 

4,405 

 

 

3,899 

 

 

8,515 

 

 

7,741 

 

Exploration expenses, including dry holes

 

 

454 

 

 

372 

 

 

899 

 

 

894 

 

Interest expense

 

 

85 

 

 

50 

 

 

109 

 

 

157 

 

Sales-based taxes (1) 

 

 

7,552 

 

 

8,027 

 

 

15,044 

 

 

16,520 

 

Other taxes and duties

 

 

8,178 

 

 

9,207 

 

 

16,123 

 

 

19,505 

 

 

Total costs and other deductions

 

 

93,701 

 

 

101,172 

 

 

186,470 

 

 

207,710 

Income before income taxes

 

 

12,768 

 

 

26,191 

 

 

28,806 

 

 

43,706 

 

Income taxes

 

 

5,793 

 

 

8,537 

 

 

12,070 

 

 

16,253 

Net income including noncontrolling interests

 

 

6,975 

 

 

17,654 

 

 

16,736 

 

 

27,453 

 

Net income attributable to noncontrolling interests

 

 

115 

 

 

1,744 

 

 

376 

 

 

2,093 

Net income attributable to ExxonMobil

 

 

6,860 

 

 

15,910 

 

 

16,360 

 

 

25,360 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) 

 

 

1.55 

 

 

3.41 

 

 

3.67 

 

 

5.41 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars) 

 

 

1.55 

 

 

3.41 

 

 

3.67 

 

 

5.41 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share (dollars) 

 

 

0.63 

 

 

0.57 

 

 

1.20 

 

 

1.04 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

operating revenue

 

 

7,552 

 

 

8,027 

 

 

15,044 

 

 

16,520 

 

 

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

 

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

 

2013 

 

 

2012 

 

 

2013 

 

 

2012 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

6,975 

 

 

17,654 

 

 

16,736 

 

 

27,453 

Other comprehensive income (net of income taxes)

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

(2,337)

 

 

(1,367)

 

 

(3,546)

 

 

(322)

 

Adjustment for foreign exchange translation (gain)/loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 included in net income

 

 

 

 

(4,302)

 

 

 

 

(4,235)

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

99 

 

 

224 

 

 

164 

 

 

(180)

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

454 

 

 

1,236 

 

 

898 

 

 

1,629 

 

 

Total other comprehensive income

 

 

(1,784)

 

 

(4,209)

 

 

(2,484)

 

 

(3,108)

Comprehensive income including noncontrolling interests

 

 

5,191 

 

 

13,445 

 

 

14,252 

 

 

24,345 

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

noncontrolling interests

 

 

(55)

 

 

196 

 

 

89 

 

 

521 

Comprehensive income attributable to ExxonMobil

 

 

5,246 

 

 

13,249 

 

 

14,163 

 

 

23,824 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

June 30,

 

 

Dec. 31,

 

 

 

 

 

 

 

2013 

 

 

2012 

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

4,609 

 

 

9,582 

 

 

 

Cash and cash equivalents – restricted

 

 

403 

 

 

341 

 

 

 

Notes and accounts receivable – net

 

 

35,340 

 

 

34,987 

 

 

 

Inventories

 

 

 

 

 

 

 

 

 

 

Crude oil, products and merchandise

 

 

13,373 

 

 

10,836 

 

 

 

 

Materials and supplies

 

 

3,824 

 

 

3,706 

 

 

 

Other current assets

 

 

5,295 

 

 

5,008 

 

 

 

 

Total current assets

 

 

62,844 

 

 

64,460 

 

 

Investments, advances and long-term receivables

 

 

35,643 

 

 

34,718 

 

 

Property, plant and equipment – net

 

 

235,240 

 

 

226,949 

 

 

Other assets, including intangibles – net

 

 

7,888 

 

 

7,668 

 

 

 

 

Total assets

 

 

341,615 

 

 

333,795 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Notes and loans payable

 

 

11,861 

 

 

3,653 

 

 

 

Accounts payable and accrued liabilities

 

 

52,619 

 

 

50,728 

 

 

 

Income taxes payable

 

 

8,208 

 

 

9,758 

 

 

 

 

Total current liabilities

 

 

72,688 

 

 

64,139 

 

 

Long-term debt

 

 

7,496 

 

 

7,928 

 

 

Postretirement benefits reserves

 

 

25,281 

 

 

25,267 

 

 

Deferred income tax liabilities

 

 

38,947 

 

 

37,570 

 

 

Long-term obligations to equity companies

 

 

4,045 

 

 

3,555 

 

 

Other long-term obligations

 

 

21,570 

 

 

23,676 

 

 

 

 

Total liabilities

 

 

170,027 

 

 

162,135 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 2)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock without par value

 

 

 

 

 

 

 

 

 

(9,000 million shares authorized,  8,019 million shares issued)

 

 

9,882 

 

 

9,653 

 

 

Earnings reinvested

 

 

376,732 

 

 

365,727 

 

 

Accumulated other comprehensive income

 

 

(14,381)

 

 

(12,184)

 

 

Common stock held in treasury

 

 

 

 

 

 

 

 

 

(3,617 million shares at June 30, 2013 and

 

 

 

 

 

 

 

 

   3,517 million shares at Dec. 31, 2012)

 

 

(206,586)

 

 

(197,333)

 

 

 

 

ExxonMobil share of equity

 

 

165,647 

 

 

165,863 

 

 

Noncontrolling interests

 

 

5,941 

 

 

5,797 

 

 

 

 

Total equity

 

 

171,588 

 

 

171,660 

 

 

 

 

Total liabilities and equity

 

 

341,615 

 

 

333,795 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended

 

 

 

 

 

 

 

June 30,

 

 

 

 

 

 

 

2013 

 

 

2012 

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

16,736 

 

 

27,453 

 

 

Depreciation and depletion

 

 

8,515 

 

 

7,741 

 

 

Changes in operational working capital, excluding cash and debt

 

 

(2,962)

 

 

3,408 

 

 

Net (gain) on asset sales

 

 

(358)

 

 

(11,109)

 

 

All other items – net

 

 

(656)

 

 

2,011 

 

 

 

 

Net cash provided by operating activities

 

 

21,275 

 

 

29,504 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(16,145)

 

 

(16,188)

 

 

Proceeds associated with sales of subsidiaries, property, plant and

 

 

 

 

 

 

 

 

 

equipment, and sales and returns of investments

 

 

665 

 

 

6,243 

 

 

Additional investments and advances

 

 

(3,464)

 

 

(241)

 

 

Other investing activities – net

 

 

397 

 

 

1,079 

 

 

 

 

Net cash used in investing activities

 

 

(18,547)

 

 

(9,107)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Additions to long-term debt

 

 

202 

 

 

389 

 

 

Reductions in long-term debt

 

 

 - 

 

 

(11)

 

 

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

 

 

7,566 

 

 

(214)

 

 

Cash dividends to ExxonMobil shareholders

 

 

(5,355)

 

 

(4,878)

 

 

Cash dividends to noncontrolling interests

 

 

(185)

 

 

(137)

 

 

Changes in noncontrolling interests

 

 

(1)

 

 

198 

 

 

Tax benefits related to stock-based awards

 

 

 

 

 - 

 

 

Common stock acquired

 

 

(9,652)

 

 

(10,716)

 

 

Common stock sold

 

 

 

 

86 

 

 

 

 

Net cash used in financing activities

 

 

(7,409)

 

 

(15,283)

 

Effects of exchange rate changes on cash

 

 

(292)

 

 

24 

 

Increase/(decrease) in cash and cash equivalents

 

 

(4,973)

 

 

5,138 

 

Cash and cash equivalents at beginning of period

 

 

9,582 

 

 

12,664 

 

Cash and cash equivalents at end of period

 

 

4,609 

 

 

17,802 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

 

Income taxes paid

 

 

14,660 

 

 

12,327 

 

 

Cash interest paid

 

 

219 

 

 

290 

 

 

 

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, 2011

 

 

 9,512 

 

 

 330,939 

 

 

 (9,123) 

 

 

 (176,932) 

 

 

 154,396 

 

 

 6,348 

 

 

 160,744 

 

Amortization of stock-based awards

 

 

 439 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 439 

 

 

 - 

 

 

 439 

 

Tax benefits related to stock-based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

awards

 

 

 23 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 23 

 

 

 - 

 

 

 23 

 

Other

 

 

 (753) 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 (753) 

 

 

 (1,450) 

 

 

 (2,203) 

 

Net income for the period

 

 

 - 

 

 

 25,360 

 

 

 - 

 

 

 - 

 

 

 25,360 

 

 

 2,093 

 

 

 27,453 

 

Dividends – common shares

 

 

 - 

 

 

 (4,878) 

 

 

 - 

 

 

 - 

 

 

 (4,878) 

 

 

 (214) 

 

 

 (5,092) 

 

Other comprehensive income

 

 

 - 

 

 

 - 

 

 

 (1,536) 

 

 

 - 

 

 

 (1,536) 

 

 

 (1,572) 

 

 

 (3,108) 

 

Acquisitions, at cost

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 (10,716) 

 

 

 (10,716) 

 

 

 (31) 

 

 

 (10,747) 

 

Dispositions

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 476 

 

 

 476 

 

 

 - 

 

 

 476 

Balance as of June 30, 2012

 

 

 9,221 

 

 

 351,421 

 

 

 (10,659) 

 

 

 (187,172) 

 

 

 162,811 

 

 

 5,174 

 

 

 167,985 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2012

 

 

 9,653 

 

 

 365,727 

 

 

 (12,184) 

 

 

 (197,333) 

 

 

 165,863 

 

 

 5,797 

 

 

 171,660 

 

Amortization of stock-based awards

 

 

 428 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 428 

 

 

 - 

 

 

 428 

 

Tax benefits related to stock-based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

awards

 

 

 192 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 192 

 

 

 - 

 

 

 192 

 

Other

 

 

 (391) 

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 (391) 

 

 

 241 

 

 

 (150) 

 

Net income for the period

 

 

 - 

 

 

 16,360 

 

 

 - 

 

 

 - 

 

 

 16,360 

 

 

 376 

 

 

 16,736 

 

Dividends – common shares

 

 

 - 

 

 

 (5,355) 

 

 

 - 

 

 

 - 

 

 

 (5,355) 

 

 

 (185) 

 

 

 (5,540) 

 

Other comprehensive income

 

 

 - 

 

 

 - 

 

 

 (2,197) 

 

 

 - 

 

 

 (2,197) 

 

 

 (287) 

 

 

 (2,484) 

 

Acquisitions, at cost

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 (9,652) 

 

 

 (9,652) 

 

 

 (1) 

 

 

 (9,653) 

 

Dispositions

 

 

 - 

 

 

 - 

 

 

 - 

 

 

 399 

 

 

 399 

 

 

 - 

 

 

 399 

Balance as of June 30, 2013

 

 

 9,882 

 

 

 376,732 

 

 

 (14,381) 

 

 

 (206,586) 

 

 

 165,647 

 

 

 5,941 

 

 

 171,588 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Six Months Ended June 30, 2013

 

 

 

 

Six Months Ended June 30, 2012

 

 

 

 

 

 

 

 

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 

 

 

 (3,517) 

 

 

 4,502 

 

 

 

 

 

 8,019 

 

 

 (3,285) 

 

 

 4,734 

 

 

 

Acquisitions

 

 

 - 

 

 

 (108) 

 

 

 (108) 

 

 

 

 

 

 - 

 

 

 (127) 

 

 

 (127) 

 

 

 

Dispositions

 

 

 - 

 

 

 8 

 

 

 8 

 

 

 

 

 

 - 

 

 

 9 

 

 

 9 

 

Balance as of June 30

 

 

 8,019 

 

 

 (3,617) 

 

 

 4,402 

 

 

 

 

 

 8,019 

 

 

 (3,403) 

 

 

 4,616 

 

 

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 2012 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.  Prior year’s data has been reclassified in certain cases to conform to the 2013 presentation basis.

 

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.

 

 

Other Contingencies

 

The Corporation and certain of its consolidated subsidiaries were contingently liable at June 30, 2013, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. 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.

 

 

 

 

 

 

 

As of June 30, 2013

 

 

 

 

 

 

 

 

Equity

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Company

 

 

Third Party

 

 

 

 

 

 

 

 

 

 

 

Obligations (1) 

 

 

Obligations

 

 

Total

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

Guarantees

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-related

 

 

2,793 

 

 

52 

 

 

2,845 

 

 

 

 

Other

 

 

4,145 

 

 

4,585 

 

 

8,730 

 

 

 

 

 

Total

 

 

6,938 

 

 

4,637 

 

 

11,575 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) ExxonMobil share

 

 

 

 

 

 

 

 

 

 

 


-8-

 


 

 

 

 

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 June 30, 2013, 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. In June 2013, the Contractors filed a lawsuit against NNPC in the Nigerian federal high court in order to preserve their ability to seek enforcement of the PSC in the courts if necessary. 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

 

 

 

 

 

 

 

Cumulative

 

 

Post-

 

 

 

 

 

 

 

 

 

Foreign

 

 

retirement

 

 

 

 

 

 

 

 

 

Exchange

 

 

Benefits

 

 

 

 

ExxonMobil Share of Accumulated Other

 

 

Translation

 

 

Reserves

 

 

 

 

 

Comprehensive Income

 

 

Adjustment

 

 

Adjustment

 

 

Total

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2011

 

 

4,168 

 

 

(13,291)

 

 

(9,123)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

(266)

 

 

(152)

 

 

(418)

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

(2,484)

 

 

1,366 

 

 

(1,118)

 

Total change in accumulated other comprehensive income

 

 

(2,750)

 

 

1,214 

 

 

(1,536)

 

Balance as of June 30, 2012

 

 

1,418 

 

 

(12,077)

 

 

(10,659)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2012

 

 

2,410 

 

 

(14,594)

 

 

(12,184)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

(3,214)

 

 

152 

 

 

(3,062)

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

 - 

 

 

865 

 

 

865 

 

Total change in accumulated other comprehensive income

 

 

(3,214)

 

 

1,017 

 

 

(2,197)

 

Balance as of June 30, 2013

 

 

(804)

 

 

(13,577)

 

 

(14,381)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

Amounts Reclassified Out of Accumulated Other

 

 

June 30,

 

 

June 30,

 

 

Comprehensive Income - Before-tax Income/(Expense)

2013 

 

 

2012 

 

 

2013 

 

 

2012 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation gain/(loss) included in net income

 

 

 

 

 

 

 

 

 

 

 

 

(Statement of Income line: Other income)

 - 

 

 

 4,302 

 

 

 - 

 

 

 4,235 

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs (1)

 (659) 

 

 

 (1,979) 

 

 

 (1,303) 

 

 

 (2,561) 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)     These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 5 – Pension and Other Postretirement Benefits for additional details.)

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

Income Tax (Expense)/Credit For

 

 

June 30,

 

 

June 30,

 

 

Components of Other Comprehensive Income

 

 

2013 

 

 

2012 

 

 

2013 

 

 

2012 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

 79 

 

 

 23 

 

 

 116 

 

 

 (37) 

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

 (38) 

 

 

 (71) 

 

 

 (57) 

 

 

 90 

 

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

 (205) 

 

 

 (743) 

 

 

 (405) 

 

 

 (932) 

 

Total

 

 

 (164) 

 

 

 (791) 

 

 

 (346) 

 

 

 (879) 


-10-

 


 

 

 

4.     Earnings Per Share

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

 

2013 

 

 

2012 

 

 

2013 

 

 

2012 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

 

6,860 

 

 

15,910 

 

 

16,360 

 

 

25,360 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding (millions of shares)

 

 

4,433 

 

 

4,656 

 

 

4,459 

 

 

4,686 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) 

 

 

1.55 

 

 

3.41 

 

 

3.67 

 

 

5.41 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

 

6,860 

 

 

15,910 

 

 

16,360 

 

 

25,360 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding (millions of shares)

 

 

4,433 

 

 

4,656 

 

 

4,459 

 

 

4,686 

 

 

 

    Effect of employee stock-based awards

 

 

 - 

 

 

 

 

 - 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding - assuming dilution

 

 

4,433 

 

 

4,657 

 

 

4,459 

 

 

4,687 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars) 

 

 

1.55 

 

 

3.41 

 

 

3.67 

 

 

5.41 


-11-

 


 

 

 

5.     Pension and Other Postretirement Benefits

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Six Months Ended

 

 

 

 

 

 

 

June 30,

 

 

June 30,

 

 

 

 

 

 

 

2013 

 

 

2012 

 

 

2013 

 

 

2012 

 

 

 

 

 

 

(millions of dollars)

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 188 

 

 

 160 

 

 

 375 

 

 

 316 

 

 

 

Interest cost

 

 

 187 

 

 

 205 

 

 

 374 

 

 

 410 

 

 

 

Expected return on plan assets

 

 

 (208) 

 

 

 (204) 

 

 

 (417) 

 

 

 (394) 

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

 164 

 

 

 144 

 

 

 328 

 

 

 290 

 

 

 

Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

curtailment/settlement cost

 

 

 197 

 

 

 123 

 

 

 364 

 

 

 246 

 

 

 

Net benefit cost

 

 

 528 

 

 

 428 

 

 

 1,024 

 

 

 868 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 173 

 

 

 166 

 

 

 351 

 

 

 334 

 

 

 

Interest cost

 

 

 261 

 

 

 282 

 

 

 538 

 

 

 580 

 

 

 

Expected return on plan assets

 

 

 (271) 

 

 

 (273) 

 

 

 (563)