10-Q 1 xom10q1q2019.htm FORM 10-Q  

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended March 31, 2019

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) 940-6000

(Registrant's telephone number, including area code)

 

 

 

Securities registered pursuant to Section 12(b) of the Act:

 

 

 

Title of Each Class

 

 

Trading Symbol

 

Name of Each Exchange

on Which Registered

Common Stock, without par value

 

      XOM

 

   New York Stock Exchange

 

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 every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes   No    

 

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company.  See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.

 

Large accelerated filer

Accelerated filer

  

Non-accelerated filer

 

Smaller reporting company

 

 

Emerging growth company

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  

 

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes    No  

 

Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.

 

Class

 

Outstanding as of March 31, 2019

Common stock, without par value

 

 4,231,093,914 

 


 

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2019

 

TABLE OF CONTENTS

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

Item 1.       Financial Statements

 

 

     Condensed Consolidated Statement of Income

Three months ended March 31, 2019 and 2018

 

3

     Condensed Consolidated Statement of Comprehensive Income

Three months ended March 31, 2019 and 2018

 

4

     Condensed Consolidated Balance Sheet

As of March 31, 2019 and December 31, 2018

5

 

 

     Condensed Consolidated Statement of Cash Flows

Three months ended March 31, 2019 and 2018

6

 

 

     Condensed Consolidated Statement of Changes in Equity

Three months ended March 31, 2019 and 2018

7

 

 

     Notes to Condensed Consolidated Financial Statements

 

8

Item 2.       Management's Discussion and Analysis of Financial

                     Condition and Results of Operations

 

19

Item 3.       Quantitative and Qualitative Disclosures About Market Risk

 

26

Item 4.       Controls and Procedures

 

26

 

 

PART II.  OTHER INFORMATION

 

Item 1.       Legal Proceedings

 

27

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

 

28

Item 6.       Exhibits

 

28

Index to Exhibits

 

29

Signature

 

30

 

  


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,

 

 

 

 

 

 

2019

 

 

2018

 

Revenues and other income

 

 

 

 

 

 

 

 

Sales and other operating revenue

 

 

61,646

 

 

65,436

 

 

Income from equity affiliates

 

 

1,709

 

 

1,910

 

 

Other income

 

 

270

 

 

865

 

 

 

Total revenues and other income

 

 

63,625

 

 

68,211

 

Costs and other deductions

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

 

34,801

 

 

36,288

 

 

Production and manufacturing expenses

 

 

8,970

 

 

8,491

 

 

Selling, general and administrative expenses

 

 

2,770

 

 

2,747

 

 

Depreciation and depletion

 

 

4,571

 

 

4,470

 

 

Exploration expenses, including dry holes

 

 

280

 

 

287

 

 

Non-service pension and postretirement benefit expense

 

 

358

 

 

337

 

 

Interest expense

 

 

181

 

 

204

 

 

Other taxes and duties

 

 

7,405

 

 

8,147

 

 

 

Total costs and other deductions

 

 

59,336

 

 

60,971

 

Income before income taxes

 

 

4,289

 

 

7,240

 

 

Income taxes

 

 

1,883

 

 

2,457

 

Net income including noncontrolling interests

 

 

2,406

 

 

4,783

 

 

Net income attributable to noncontrolling interests

 

 

56

 

 

133

 

Net income attributable to ExxonMobil

 

 

2,350

 

 

4,650

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) 

 

 

0.55

 

 

1.09

 

  

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars) 

 

 

0.55

 

 

1.09

 



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

 

 

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

 

2,406

 

 

4,783

 

 

Other comprehensive income (net of income taxes)

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

 

749

 

 

(804)

 

 

 

Adjustment for foreign exchange translation (gain)/loss included in net income

 

 

-

 

 

168

 

 

 

Postretirement benefits reserves adjustment (excluding amortization)

 

 

(26)

 

 

(434)

 

 

 

Amortization and settlement of postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

included in net periodic benefit costs

 

 

 

185

 

 

237

 

 

 

 

Total other comprehensive income

 

 

 

908

 

 

(833)

 

 

Comprehensive income including noncontrolling interests

 

 

3,314

 

 

3,950

 

 

 

Comprehensive income attributable to noncontrolling interests

 

 

182

 

 

(9)

 

 

Comprehensive income attributable to ExxonMobil

 

 

 

3,132

 

 

3,959

 



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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Mar. 31,

 

 

Dec. 31,

 

 

 

 

 

 

 

2019

 

 

2018

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

4,586

 

 

3,042

 

 

 

Notes and accounts receivable – net

 

 

27,105

 

 

24,701

 

 

 

Inventories

 

 

 

 

 

 

 

 

 

 

Crude oil, products and merchandise

 

 

13,979

 

 

14,803

 

 

 

 

Materials and supplies

 

 

4,353

 

 

4,155

 

 

 

Other current assets

 

 

1,553

 

 

1,272

 

 

 

 

Total current assets

 

 

51,576

 

 

47,973

 

 

Investments, advances and long-term receivables

 

 

42,068

 

 

40,790

 

 

Property, plant and equipment – net

 

 

248,563

 

 

247,101

 

 

Other assets, including intangibles – net

 

 

13,982

 

 

10,332

 

 

 

 

Total assets

 

 

356,189

 

 

346,196

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Notes and loans payable

 

 

21,794

 

 

17,258

 

 

 

Accounts payable and accrued liabilities

 

 

42,090

 

 

37,268

 

 

 

Income taxes payable

 

 

2,748

 

 

2,612

 

 

 

 

Total current liabilities

 

 

66,632

 

 

57,138

 

 

Long-term debt

 

 

19,031

 

 

20,538

 

 

Postretirement benefits reserves

 

 

20,051

 

 

20,272

 

 

Deferred income tax liabilities

 

 

27,287

 

 

27,244

 

 

Long-term obligations to equity companies

 

 

4,430

 

 

4,382

 

 

Other long-term obligations

 

 

20,737

 

 

18,094

 

 

 

 

Total liabilities

 

 

158,168

 

 

147,668

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock without par value

 

 

 

 

 

 

 

 

 

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

 

 

15,476

 

 

15,258

 

 

Earnings reinvested

 

 

420,498

 

 

421,653

 

 

Accumulated other comprehensive income

 

 

(18,782)

 

 

(19,564)

 

 

Common stock held in treasury

 

 

 

 

 

 

 

 

 

(3,788 million shares at March 31, 2019 and

 

 

 

 

 

 

 

 

   3,782 million shares at December 31, 2018)

 

 

(225,970)

 

 

(225,553)

 

 

 

 

ExxonMobil share of equity

 

 

191,222

 

 

191,794

 

 

Noncontrolling interests

 

 

6,799

 

 

6,734

 

 

 

 

Total equity

 

 

198,021

 

 

198,528

 

 

 

 

Total liabilities and equity

 

 

356,189

 

 

346,196

 



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)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2019

 

 

2018

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

2,406

 

 

4,783

 

 

Depreciation and depletion

 

 

4,571

 

 

4,470

 

 

Changes in operational working capital, excluding cash and debt

 

 

2,257

 

 

351

 

 

All other items – net

 

 

(896)

 

 

(1,085)

 

 

 

 

Net cash provided by operating activities

 

 

8,338

 

 

8,519

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(5,199)

 

 

(3,349)

 

 

Proceeds associated with sales of subsidiaries, property, plant and

 

 

 

 

 

 

 

 

 

equipment, and sales and returns of investments

 

 

107

 

 

1,441

 

 

Additional investments and advances

 

 

(910)

 

 

(138)

 

 

Other investing activities including collection of advances

 

 

209

 

 

187

 

 

 

 

Net cash used in investing activities

 

 

(5,793)

 

 

(1,859)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Reductions in short-term debt

 

 

(3,777)

 

 

(3,872)

 

 

Additions/(reductions) in commercial paper, and debt with three

 

 

 

 

 

 

 

 

 

months or less maturity (1) 

 

 

6,776

 

 

1,950

 

 

Cash dividends to ExxonMobil shareholders

 

 

(3,505)

 

 

(3,291)

 

 

Cash dividends to noncontrolling interests

 

 

(43)

 

 

(43)

 

 

Changes in noncontrolling interests

 

 

(74)

 

 

(59)

 

 

Common stock acquired

 

 

(421)

 

 

(427)

 

 

 

 

Net cash used in financing activities

 

 

(1,044)

 

 

(5,742)

 

Effects of exchange rate changes on cash

 

 

43

 

 

30

 

Increase/(decrease) in cash and cash equivalents

 

 

1,544

 

 

948

 

Cash and cash equivalents at beginning of period

 

 

3,042

 

 

3,177

 

Cash and cash equivalents at end of period

 

 

4,586

 

 

4,125

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

 

Income taxes paid

 

 

1,793

 

 

2,117

 

 

Cash interest paid

 

 

 

 

 

 

 

 

 

Included in cash flows from operating activities

 

 

247

 

 

206

 

 

 

Capitalized, included in cash flows from investing activities

 

 

175

 

 

154

 

 

 

Total cash interest paid

 

 

422

 

 

360

 



 (1) Includes a net addition of commercial paper with a maturity of over three months of $5.3 billion in 2019 and a net reduction of $0.3 billion in 2018. The gross amount of commercial paper with a maturity of over three months issued was $6.4 billion in 2019 and $0.4 billion in 2018, while the gross amount repaid was $1.1 billion in 2019 and $0.7 billion in 2018.

 

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, 2017

 

 

14,656

 

 

414,540

 

 

(16,262)

 

 

(225,246)

 

 

187,688

 

 

6,812

 

 

194,500

 

Amortization of stock-based awards

 

 

237

 

 

-

 

 

-

 

 

-

 

 

237

 

 

-

 

 

237

 

Other

 

 

(5)

 

 

-

 

 

-

 

 

-

 

 

(5)

 

 

-

 

 

(5)

 

Net income for the period

 

 

-

 

 

4,650

 

 

-

 

 

-

 

 

4,650

 

 

133

 

 

4,783

 

Dividends - common shares

 

 

-

 

 

(3,291)

 

 

-

 

 

-

 

 

(3,291)

 

 

(43)

 

 

(3,334)

 

Cumulative effect of accounting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

change

 

 

-

 

 

71

 

 

(39)

 

 

-

 

 

32

 

 

15

 

 

47

 

Other comprehensive income

 

 

-

 

 

-

 

 

(691)

 

 

-

 

 

(691)

 

 

(142)

 

 

(833)

 

Acquisitions, at cost

 

 

-

 

 

-

 

 

-

 

 

(427)

 

 

(427)

 

 

(59)

 

 

(486)

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

2

 

 

2

 

 

-

 

 

2

Balance as of March 31, 2018

 

 

14,888

 

 

415,970

 

 

(16,992)

 

 

(225,671)

 

 

188,195

 

 

6,716

 

 

194,911

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

 

15,258

 

 

421,653

 

 

(19,564)

 

 

(225,553)

 

 

191,794

 

 

6,734

 

 

198,528

 

Amortization of stock-based awards

 

 

223

 

 

-

 

 

-

 

 

-

 

 

223

 

 

-

 

 

223

 

Other

 

 

(5)

 

 

-

 

 

-

 

 

-

 

 

(5)

 

 

-

 

 

(5)

 

Net income for the period

 

 

-

 

 

2,350

 

 

-

 

 

-

 

 

2,350

 

 

56

 

 

2,406

 

Dividends - common shares

 

 

-

 

 

(3,505)

 

 

-

 

 

-

 

 

(3,505)

 

 

(43)

 

 

(3,548)

 

Other comprehensive income

 

 

-

 

 

-

 

 

782

 

 

-

 

 

782

 

 

126

 

 

908

 

Acquisitions, at cost

 

 

-

 

 

-

 

 

-

 

 

(421)

 

 

(421)

 

 

(83)

 

 

(504)

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

4

 

 

4

 

 

9

 

 

13

Balance as of March 31, 2019

 

 

15,476

 

 

420,498

 

 

(18,782)

 

 

(225,970)

 

 

191,222

 

 

6,799

 

 

198,021

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2019

 

 

 

 

Three Months Ended March 31, 2018

 

 

 

 

 

 

 

 

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

 

 

(3,782)

 

 

4,237

 

 

 

 

 

8,019

 

 

(3,780)

 

 

4,239

 

 

 

Acquisitions

 

 

-

 

 

(6)

 

 

(6)

 

 

 

 

 

-

 

 

(5)

 

 

(5)

 

 

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

 

 

 

-

 

 

-

 

 

-

 

Balance as of March 31

 

 

8,019

 

 

(3,788)

 

 

4,231

 

 

 

 

 

8,019

 

 

(3,785)

 

 

4,234



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 2018 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 data has been reclassified in certain cases to conform to the current presentation basis.

 

The Corporation's exploration and production activities are accounted for under the "successful efforts" method.



2.     Accounting Changes

 

Effective January 1, 2019, the Corporation adopted the Financial Accounting Standards Board’s Standard, Leases (Topic 842), as amended. The standard requires all leases to be recorded on the balance sheet as a right of use asset and a lease liability. The Corporation used a transition method that applies the new lease standard at January 1, 2019. The Corporation applied a policy election to exclude short-term leases from balance sheet recognition and also elected certain practical expedients at adoption. As permitted, the Corporation did not reassess whether existing contracts are or contain leases, the lease classification for any existing leases, initial direct costs for any existing lease and whether existing land easements and rights of way, which were not previously accounted for as leases, are or contain a lease. At adoption on January 1, 2019, an operating lease liability of $3.3 billion was recorded and the operating lease right of use asset was $4.3 billion, including $1.0 billion of previously recorded prepaid leases. There was no cumulative earnings effect adjustment.  

 

Effective January 1, 2020, ExxonMobil will adopt the Financial Accounting Standards Board’s update, Financial Instruments – Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and expectations of the future. The Corporation is evaluating the standard and its effect on the Corporation’s 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 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 March 31, 2019, 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.


8


 

 

 

 

 

 

 

As of March 31, 2019

 

 

 

 

 

 

 

 

Equity

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Company

 

 

Third Party

 

 

 

 

 

 

 

 

 

 

 

Obligations (1) 

 

 

Obligations

 

 

Total

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

Guarantees

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-related

 

 

612

 

 

79

 

 

691

 

 

 

 

Other

 

 

1,081

 

 

4,288

 

 

5,369

 

 

 

 

 

Total

 

 

1,693

 

 

4,367

 

 

6,060

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  (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 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 Venezuelan nationalization decree issued in February 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil 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. 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 collected awards of $908 million in an arbitration against PdVSA under the rules of the International Chamber of Commerce in respect of an indemnity related to the Cerro Negro Project and $260 million in an arbitration for compensation due for the La Ceiba Project and for export curtailments at the Cerro Negro Project under rules of International Centre for Settlement of Investment Disputes (ICSID). An ICSID arbitration award relating to the Cerro Negro Project’s expropriation ($1.4 billion) was annulled based on a determination that a prior Tribunal failed to adequately explain why the cap on damages in the indemnity owed by PdVSA did not affect or limit the amount owed for the expropriation of the Cerro Negro Project. ExxonMobil filed a new claim seeking to restore the original award of damages for the Cerro Negro Project with ICSID on September 26, 2018.

 

The net impact of this matter 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 appealed that judgment to the Court of Appeal, Abuja Judicial Division. On July 22, 2016, the Court of Appeal upheld the decision of the lower court setting aside the award. On October 21, 2016, the Contractors appealed the decision to the Supreme Court of Nigeria. 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. Following dismissal by this court, the Contractors appealed to the Nigerian Court of Appeal in June 2016. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. NNPC has moved to dismiss the lawsuit. 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


 

4.     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, 2017

 

 

(9,482)

 

 

(6,780)

 

 

(16,262)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

(686)

 

 

(440)

 

 

(1,126)

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

168

 

 

228

 

 

396

 

Total change in accumulated other comprehensive income

 

 

(518)

 

 

(212)

 

 

(730)

 

Balance as of March 31, 2018

 

 

(10,000)

 

 

(6,992)

 

 

(16,992)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2018

 

 

(13,881)

 

 

(5,683)

 

 

(19,564)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

627

 

 

(23)

 

 

604

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

-

 

 

178

 

 

178

 

Total change in accumulated other comprehensive income

 

 

627

 

 

155

 

 

782

 

Balance as of March 31, 2019

 

 

(13,254)

 

 

(5,528)

 

 

(18,782)

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Amounts Reclassified Out of Accumulated Other

 

 

 

 

 

 

March 31,

 

Comprehensive Income - Before-tax Income/(Expense)

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

(Statement of Income line: Other income)

 

 

 

-

 

 

(168)

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

 

 

 

 

(Statement of Income line: Non-service pension and postretirement benefit expense)

(237)

 

 

(320)

 

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Income Tax (Expense)/Credit For

 

 

 

 

 

March 31,

 

Components of Other Comprehensive Income

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Postretirement benefits reserves adjustment (excluding amortization)

 

 

 

 

 

10

 

 

124

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

 

 

 

(52)

 

 

(83)

 

Total

 

 

 

 

 

(42)

 

 

41


10


5.     Earnings Per Share

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

 

2,350

 

 

4,650

 

  

 

 

 

 

 

 

 

Weighted average number of common shares outstanding (millions of shares)

 

 

4,270

 

 

4,270

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) (1)

 

 

0.55

 

 

1.09

 

 

 

 

 

 

 

 

 

Dividends paid per common share (dollars)

 

 

0.82

 

 

0.77

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) The calculation of earnings per common share and earnings per common share – assuming dilution are the same in each period shown.

 

6.     Pension and Other Postretirement Benefits

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

 

2019

 

 

2018

 

 

 

 

 

 

 

 

(millions of dollars)

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 

175

 

 

209

 

 

 

Interest cost

 

 

 

193

 

 

180

 

 

 

Expected return on plan assets

 

 

 

(142)

 

 

(182)

 

 

 

Amortization of actuarial loss/(gain) and prior service cost

 

 

77

 

 

91

 

 

 

Net pension enhancement and curtailment/settlement cost

 

 

54

 

 

63

 

 

 

Net benefit cost

 

 

 

357

 

 

361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 

139

 

 

158

 

 

 

Interest cost

 

 

 

192

 

 

200

 

 

 

Expected return on plan assets

 

 

 

(197)

 

 

(252)

 

 

 

Amortization of actuarial loss/(gain) and prior service cost

 

 

103

 

 

118

 

 

 

Net pension enhancement and curtailment/settlement cost

 

 

-

 

 

33

 

 

 

Net benefit cost

 

 

 

237

 

 

257

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Postretirement Benefits

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 

33

 

 

36

 

 

 

Interest cost

 

 

 

79

 

 

75

 

 

 

Expected return on plan assets

 

 

 

(4)

 

 

(6)

 

 

 

Amortization of actuarial loss/(gain) and prior service cost

 

 

3

 

 

17

 

 

 

Net benefit cost

 

 

 

111

 

 

122

 

 

 

 

 

 

 

 

 

 

 

 


11


 

7.     Financial Instruments and Derivatives

 

Financial Instruments. The estimated fair value of financial instruments at March 31, 2019 and December 31, 2018, and the related hierarchy level for the fair value measurement is as follows:

 

 

 

 

 

 

At March 31, 2019

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Gross Assets

&

Liabilities

 

Effect of Counterparty Netting

 

Effect of Collateral Netting

 

Difference in Carrying Value and Fair Value

 

Net Carrying Value

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets (1) 

 

145

 

24

 

-

 

169

 

(145)

 

-

 

-

 

24

 

Advances to/receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from equity companies (2)(7) 

 

-

 

2,157

 

6,703

 

8,860

 

-

 

-

 

54

 

8,914

 

Other long-term

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

financial assets (3) 

 

914

 

-

 

806

 

1,720

 

-

 

-

 

93

 

1,813

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities (4) 

 

213

 

13

 

-

 

226

 

(145)

 

(68)

 

-

 

13

 

Long-term debt (5) 

 

18,088

 

111

 

4

 

18,203

 

-

 

-

 

(473)

 

17,730

 

Long-term obligations

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to equity companies (7) 

 

-

 

-

 

4,526

 

4,526

 

-

 

-

 

(96)

 

4,430

 

Other long-term

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

financial liabilities (6) 

 

-

 

-

 

1,039

 

1,039

 

-

 

-

 

3

 

1,042

 

 

 

 

 

 

At December 31, 2018

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Fair Value

 

 

 

 

 

 

 

 

 

 

 

 

 

Level 1

 

Level 2

 

Level 3

 

Total Gross Assets

&

Liabilities

 

Effect of Counterparty Netting

 

Effect of Collateral Netting

 

Difference in Carrying Value and Fair Value

 

Net Carrying Value

Assets

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative assets (1) 

 

297

 

-

 

-

 

297

 

(151)

 

(146)

 

-

 

-

 

Advances to/receivables

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

from equity companies (2)(7) 

 

-

 

2,100

 

6,293

 

8,393

 

-

 

-

 

215

 

8,608

 

Other long-term

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

financial assets (3) 

 

848

 

-

 

974

 

1,822

 

-

 

-

 

112

 

1,934

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Derivative liabilities (4) 

 

151

 

-

 

-

 

151

 

(151)

 

-

 

-

 

-

 

Long-term debt (5) 

 

19,029

 

117

 

4

 

19,150

 

-

 

-

 

85

 

19,235

 

Long-term obligations

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

to equity companies (7) 

 

-

 

-

 

4,330

 

4,330

 

-

 

-

 

52

 

4,382

 

Other long-term

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

financial liabilities (6) 

 

-

 

-

 

1,046

 

1,046

 

-

 

-