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, 2016
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
☑
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
|
☑
|
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
☑
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, 2016
|
Common stock,
without par value
|
|
4,146,611,352
|
PART I. FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
Item 1. Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
EXXON MOBIL
CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENT OF INCOME
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Revenues and other income
|
|
|
|
|
|
|
|
|
Sales and other operating revenue
(1)
|
|
|
47,105
|
|
|
64,758
|
|
|
Income from equity affiliates
|
|
|
1,251
|
|
|
2,261
|
|
|
Other income
|
|
|
351
|
|
|
599
|
|
|
|
Total revenues and other income
|
|
|
48,707
|
|
|
67,618
|
|
Costs and other deductions
|
|
|
|
|
|
|
|
|
Crude oil and product purchases
|
|
|
20,707
|
|
|
32,698
|
|
|
Production and manufacturing expenses
|
|
|
7,561
|
|
|
8,730
|
|
|
Selling, general and administrative expenses
|
|
|
2,593
|
|
|
2,713
|
|
|
Depreciation and depletion
|
|
|
4,765
|
|
|
4,300
|
|
|
Exploration expenses, including dry holes
|
|
|
355
|
|
|
311
|
|
|
Interest expense
|
|
|
77
|
|
|
88
|
|
|
Sales-based taxes
(1)
|
|
|
4,815
|
|
|
5,530
|
|
|
Other taxes and duties
|
|
|
6,104
|
|
|
6,613
|
|
|
|
Total costs and other deductions
|
|
|
46,977
|
|
|
60,983
|
|
Income before income taxes
|
|
|
1,730
|
|
|
6,635
|
|
|
Income taxes
|
|
|
(51)
|
|
|
1,560
|
|
Net income including noncontrolling interests
|
|
|
1,781
|
|
|
5,075
|
|
|
Net income attributable to noncontrolling interests
|
|
|
(29)
|
|
|
135
|
|
Net income attributable to ExxonMobil
|
|
|
1,810
|
|
|
4,940
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
(dollars)
|
|
|
0.43
|
|
|
1.17
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share - assuming dilution
(dollars)
|
|
|
0.43
|
|
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends per common share
(dollars)
|
|
|
0.73
|
|
|
0.69
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
(1) Sales-based taxes included in sales and other operating
revenue
|
|
4,815
|
|
|
5,530
|
|
|
|
|
|
|
|
|
|
|
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
EXXON MOBIL CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income including noncontrolling interests
|
|
|
|
1,781
|
|
|
5,075
|
|
|
Other comprehensive income (net of income taxes)
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation adjustment
|
|
|
|
3,340
|
|
|
(5,353)
|
|
|
|
Postretirement benefits reserves adjustment (excluding amortization)
|
|
|
(119)
|
|
|
813
|
|
|
|
Amortization and settlement of postretirement benefits reserves
adjustment
|
|
|
|
|
|
|
|
|
|
|
|
included in net periodic benefit costs
|
|
|
|
289
|
|
|
351
|
|
|
|
Unrealized change in fair value of stock investments
|
|
|
-
|
|
|
2
|
|
|
|
Realized (gain)/loss from stock investments included in net
income
|
|
|
-
|
|
|
8
|
|
|
|
|
Total other comprehensive income
|
|
|
|
3,510
|
|
|
(4,179)
|
|
|
Comprehensive income including noncontrolling interests
|
|
|
5,291
|
|
|
896
|
|
|
|
Comprehensive income attributable to noncontrolling interests
|
|
|
354
|
|
|
(406)
|
|
|
Comprehensive income attributable to ExxonMobil
|
|
|
|
4,937
|
|
|
1,302
|
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
EXXON MOBIL CORPORATION
|
|
CONDENSED
CONSOLIDATED BALANCE SHEET
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar.
31,
|
|
|
Dec.
31,
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
4,846
|
|
|
3,705
|
|
|
|
Notes and accounts receivable – net
|
|
|
19,814
|
|
|
19,875
|
|
|
|
Inventories
|
|
|
|
|
|
|
|
|
|
|
Crude oil, products and merchandise
|
|
|
11,837
|
|
|
12,037
|
|
|
|
|
Materials and supplies
|
|
|
4,386
|
|
|
4,208
|
|
|
|
Other current assets
|
|
|
3,368
|
|
|
2,798
|
|
|
|
|
Total current assets
|
|
|
44,251
|
|
|
42,623
|
|
|
Investments, advances and long-term receivables
|
|
|
34,915
|
|
|
34,245
|
|
|
Property, plant and equipment – net
|
|
|
255,257
|
|
|
251,605
|
|
|
Other assets, including intangibles – net
|
|
|
8,366
|
|
|
8,285
|
|
|
|
|
Total assets
|
|
|
342,789
|
|
|
336,758
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current liabilities
|
|
|
|
|
|
|
|
|
|
Notes and loans payable
|
|
|
13,540
|
|
|
18,762
|
|
|
|
Accounts payable and accrued liabilities
|
|
|
32,294
|
|
|
32,412
|
|
|
|
Income taxes payable
|
|
|
2,892
|
|
|
2,802
|
|
|
|
|
Total current liabilities
|
|
|
48,726
|
|
|
53,976
|
|
|
Long-term debt
|
|
|
29,568
|
|
|
19,925
|
|
|
Postretirement benefits reserves
|
|
|
22,401
|
|
|
22,647
|
|
|
Deferred income tax liabilities
|
|
|
36,293
|
|
|
36,818
|
|
|
Long-term obligations to equity companies
|
|
|
5,457
|
|
|
5,417
|
|
|
Other long-term obligations
|
|
|
21,846
|
|
|
21,165
|
|
|
|
|
Total liabilities
|
|
|
164,291
|
|
|
159,948
|
|
|
|
|
|
|
|
|
|
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|
|
Commitments and contingencies (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock without par value
|
|
|
|
|
|
|
|
|
|
(9,000 million shares authorized, 8,019 million shares issued)
|
|
|
11,825
|
|
|
11,612
|
|
|
Earnings reinvested
|
|
|
411,200
|
|
|
412,444
|
|
|
Accumulated other comprehensive income
|
|
|
(20,384)
|
|
|
(23,511)
|
|
|
Common stock held in treasury
|
|
|
|
|
|
|
|
|
|
(3,872 million shares at March 31, 2016 and
|
|
|
|
|
|
|
|
|
3,863 million shares at December 31, 2015)
|
|
|
(230,454)
|
|
|
(229,734)
|
|
|
|
|
ExxonMobil share of equity
|
|
|
172,187
|
|
|
170,811
|
|
|
Noncontrolling interests
|
|
|
6,311
|
|
|
5,999
|
|
|
|
|
Total equity
|
|
|
178,498
|
|
|
176,810
|
|
|
|
|
Total liabilities and equity
|
|
|
342,789
|
|
|
336,758
|
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
EXXON MOBIL CORPORATION
|
|
CONDENSED
CONSOLIDATED STATEMENT OF CASH FLOWS
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
|
|
Net income including noncontrolling interests
|
|
|
1,781
|
|
|
5,075
|
|
|
Depreciation and depletion
|
|
|
4,765
|
|
|
4,300
|
|
|
Changes in operational working capital, excluding cash and debt
|
|
|
(399)
|
|
|
(509)
|
|
|
All other items – net
|
|
|
(1,335)
|
|
|
(868)
|
|
|
|
|
Net cash provided by operating activities
|
|
|
4,812
|
|
|
7,998
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
|
|
Additions to property, plant and equipment
|
|
|
(4,601)
|
|
|
(6,844)
|
|
|
Proceeds associated with sales of subsidiaries, property, plant
and
|
|
|
|
|
|
|
|
|
|
equipment, and sales and returns of investments
|
|
|
177
|
|
|
484
|
|
|
Additional investments and advances
|
|
|
(234)
|
|
|
(282)
|
|
|
Other investing activities – net
|
|
|
309
|
|
|
290
|
|
|
|
|
Net cash used in investing activities
|
|
|
(4,349)
|
|
|
(6,352)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
|
|
Additions to long-term debt
|
|
|
11,963
|
|
|
8,000
|
|
|
Reductions in long-term debt
|
|
|
-
|
|
|
(10)
|
|
|
Additions/(reductions) in short-term debt – net
|
|
|
(28)
|
|
|
(157)
|
|
|
Additions/(reductions) in commercial paper, and debt with three
|
|
|
|
|
|
|
|
|
|
|
months or less maturity
(1)
|
|
|
(7,594)
|
|
|
(3,956)
|
|
|
Cash dividends to ExxonMobil shareholders
|
|
|
(3,054)
|
|
|
(2,910)
|
|
|
Cash dividends to noncontrolling interests
|
|
|
(42)
|
|
|
(40)
|
|
|
Common stock acquired
|
|
|
(726)
|
|
|
(1,781)
|
|
|
Common stock sold
|
|
|
5
|
|
|
-
|
|
|
|
|
Net cash used in financing activities
|
|
|
524
|
|
|
(854)
|
|
Effects of exchange rate changes on cash
|
|
|
154
|
|
|
(224)
|
|
Increase/(decrease) in cash and cash equivalents
|
|
|
1,141
|
|
|
568
|
|
Cash and cash equivalents at beginning of period
|
|
|
3,705
|
|
|
4,616
|
|
Cash and cash equivalents at end of period
|
|
|
4,846
|
|
|
5,184
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental Disclosures
|
|
|
|
|
|
|
|
|
Income taxes paid
|
|
|
749
|
|
|
1,226
|
|
|
Cash interest paid
|
|
|
223
|
|
|
170
|
|
(1) Includes a net
addition of commercial paper with a maturity of over three months of $0.7
billion in 2016 and $2.6 billion in 2015. The gross amount of commercial paper
with a maturity of over three months issued was $1.0 billion in 2016 and
$2.6 billion in 2015, while the gross amount repaid was $0.3 billion in
2016. There were no payments in 2015.
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
|
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, 2014
|
|
|
10,792
|
|
|
408,384
|
|
|
(18,957)
|
|
|
(225,820)
|
|
|
174,399
|
|
|
6,665
|
|
|
181,064
|
|
Amortization of stock-based awards
|
|
|
213
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
213
|
|
|
-
|
|
|
213
|
|
Tax benefits related to stock-based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
awards
|
|
|
3
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3
|
|
|
-
|
|
|
3
|
|
Other
|
|
|
(2)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2)
|
|
|
-
|
|
|
(2)
|
|
Net income for the period
|
|
|
-
|
|
|
4,940
|
|
|
-
|
|
|
-
|
|
|
4,940
|
|
|
135
|
|
|
5,075
|
|
Dividends – common shares
|
|
|
-
|
|
|
(2,910)
|
|
|
-
|
|
|
-
|
|
|
(2,910)
|
|
|
(40)
|
|
|
(2,950)
|
|
Other comprehensive income
|
|
|
-
|
|
|
-
|
|
|
(3,638)
|
|
|
-
|
|
|
(3,638)
|
|
|
(541)
|
|
|
(4,179)
|
|
Acquisitions, at cost
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(1,781)
|
|
|
(1,781)
|
|
|
-
|
|
|
(1,781)
|
|
Dispositions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
3
|
|
|
3
|
|
|
-
|
|
|
3
|
Balance as of March 31, 2015
|
|
|
11,006
|
|
|
410,414
|
|
|
(22,595)
|
|
|
(227,598)
|
|
|
171,227
|
|
|
6,219
|
|
|
177,446
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2015
|
|
|
11,612
|
|
|
412,444
|
|
|
(23,511)
|
|
|
(229,734)
|
|
|
170,811
|
|
|
5,999
|
|
|
176,810
|
|
Amortization of stock-based awards
|
|
|
211
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
211
|
|
|
-
|
|
|
211
|
|
Tax benefits related to stock-based
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
awards
|
|
|
4
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
-
|
|
|
4
|
|
Other
|
|
|
(2)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(2)
|
|
|
-
|
|
|
(2)
|
|
Net income for the period
|
|
|
-
|
|
|
1,810
|
|
|
-
|
|
|
-
|
|
|
1,810
|
|
|
(29)
|
|
|
1,781
|
|
Dividends – common shares
|
|
|
-
|
|
|
(3,054)
|
|
|
-
|
|
|
-
|
|
|
(3,054)
|
|
|
(42)
|
|
|
(3,096)
|
|
Other comprehensive income
|
|
|
-
|
|
|
-
|
|
|
3,127
|
|
|
-
|
|
|
3,127
|
|
|
383
|
|
|
3,510
|
|
Acquisitions, at cost
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(726)
|
|
|
(726)
|
|
|
-
|
|
|
(726)
|
|
Dispositions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
6
|
|
|
6
|
|
|
-
|
|
|
6
|
Balance as of March 31, 2016
|
|
|
11,825
|
|
|
411,200
|
|
|
(20,384)
|
|
|
(230,454)
|
|
|
172,187
|
|
|
6,311
|
|
|
178,498
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended March 31, 2016
|
|
|
|
|
Three
Months Ended March 31, 2015
|
|
|
|
|
|
|
|
|
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
|
|
|
(3,863)
|
|
|
4,156
|
|
|
|
|
|
8,019
|
|
|
(3,818)
|
|
|
4,201
|
|
|
|
Acquisitions
|
|
|
-
|
|
|
(9)
|
|
|
(9)
|
|
|
|
|
|
-
|
|
|
(20)
|
|
|
(20)
|
|
|
|
Dispositions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balance as of March 31
|
|
|
8,019
|
|
|
(3,872)
|
|
|
4,147
|
|
|
|
|
|
8,019
|
|
|
(3,838)
|
|
|
4,181
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
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 2015 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. Recently Issued Accounting Standards
In May 2014, the Financial Accounting
Standards Board issued a new standard,
Revenue from Contracts with Customers
.
The standard establishes a single revenue recognition model for all contracts
with customers, eliminates industry specific requirements, and expands
disclosure requirements. The standard is required to be adopted beginning
January 1, 2018.
“Sales and Other
Operating Revenue” on the Consolidated Statement of Income includes sales,
excise and value-added taxes on sales transactions. When the Corporation adopts
the standard, revenue will exclude sales-based taxes collected on behalf of
third parties. This change in reporting will not impact earnings.
The Corporation
continues to evaluate other areas of the standard and its effect on the
Corporation’s financial statements.
In February 2016, the
Financial Accounting Standards Board issued a new standard,
Leases
. The
standard requires all leases with an initial term greater than one year be
recorded on the balance sheet as an asset and a lease liability. The standard
is required to be adopted beginning January 1, 2019. ExxonMobil 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,
2016, 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 March 31, 2016
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
Third
Party
|
|
|
|
|
|
|
|
|
|
|
|
Obligations
(1)
|
|
|
Obligations
|
|
|
Total
|
|
|
|
|
|
|
|
|
(millions
of dollars)
|
|
|
|
Guarantees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt-related
|
|
|
111
|
|
|
38
|
|
|
149
|
|
|
|
|
Other
|
|
|
2,761
|
|
|
4,576
|
|
|
7,337
|
|
|
|
|
|
Total
|
|
|
2,872
|
|
|
4,614
|
|
|
7,486
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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 March 31, 2016, 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.
On September 6, 2007,
affiliates of ExxonMobil filed a Request for Arbitration with the International
Centre for Settlement of Investment Disputes (ICSID). 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. On October 9,
2014, the ICSID Tribunal issued its final award finding in favor of the
ExxonMobil affiliates and awarding $1.6 billion as of the date of
expropriation, June 27, 2007, and interest from that date at 3.25% compounded
annually until the date of payment in full. The Tribunal also noted that one of
the Cerro Negro Project agreements provides a mechanism to prevent double
recovery between the ICSID award and all or part of an earlier award of $908
million to an ExxonMobil affiliate, Mobil Cerro Negro, Ltd., against PdVSA and
a PdVSA affiliate, PdVSA CN, in an arbitration under the rules of the
International Chamber of Commerce.
On June 12, 2015, the
Tribunal rejected in its entirety Venezuela’s October 23, 2014, application to
revise the ICSID award. The Tribunal also lifted the associated stay of
enforcement that had been entered upon the filing of the application to revise.
Still pending is
Venezuela’s February 2, 2015, application to ICSID seeking annulment of the
ICSID award. That application alleges that, in issuing the ICSID award, the
Tribunal exceeded its powers, failed to state reasons on which the ICSID award
was based, and departed from a fundamental rule of procedure. A separate stay
of the ICSID award was entered following the filing of the annulment
application. On July 7, 2015, the ICSID Committee considering the annulment
application heard arguments
from the parties on whether
to lift the stay of the award associated with that application. On July 28,
2015, the Committee issued an order that would lift the stay of enforcement
unless, within 30 days, Venezuela delivered a commitment to pay the award if
the application to annul is denied. On September 17, 2015, the Committee ruled
that Venezuela had complied with the requirement to submit a written commitment
to pay the award and so left the stay of enforcement in place. A hearing on
Venezuela’s application for annulment was held March 8-9, 2016.
The United States
District Court for the Southern District of New York entered judgment on the
ICSID award on October 10, 2014. Motions filed by Venezuela to vacate that
judgment on procedural grounds and to modify the judgment by reducing the rate
of interest to be paid on the ICSID award from the entry of the court’s judgment,
until the date of payment, were denied on February 13, 2015, and March 4, 2015,
respectively. On March 9, 2015, Venezuela filed a notice of appeal of the
court’s actions on the two motions. Oral arguments on this appeal were held
before the United States Court of Appeals for the Second Circuit on January 7,
2016.
The District Court’s
judgment on the ICSID award is currently stayed until such time as ICSID’s stay
of the award entered following Venezuela’s filing of its application to annul
has been lifted. 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 appealed that judgment to the Court of Appeal, Abuja
Judicial Division. 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. 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.
Proceedings in the Southern District of New York are currently stayed. 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.
4.
Other Comprehensive
Income Information
|
|
|
|
|
|
Cumulative
|
|
|
Post-
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
retirement
|
|
|
Unrealized
|
|
|
|
|
|
|
|
|
|
Exchange
|
|
|
Benefits
|
|
|
Change
in
|
|
|
|
|
ExxonMobil Share of Accumulated Other
|
|
|
Translation
|
|
|
Reserves
|
|
|
Stock
|
|
|
|
|
Comprehensive Income
|
|
|
Adjustment
|
|
|
Adjustment
|
|
|
Investments
|
|
|
Total
|
|
|
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2014
|
|
|
(5,952)
|
|
|
(12,945)
|
|
|
(60)
|
|
|
(18,957)
|
|
Current period change excluding amounts reclassified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from accumulated other comprehensive income
|
|
|
(4,784)
|
|
|
796
|
|
|
2
|
|
|
(3,986)
|
|
Amounts reclassified from accumulated other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
comprehensive income
|
|
|
-
|
|
|
340
|
|
|
8
|
|
|
348
|
|
Total change in accumulated other comprehensive income
|
|
|
(4,784)
|
|
|
1,136
|
|
|
10
|
|
|
(3,638)
|
|
Balance as of March 31, 2015
|
|
|
(10,736)
|
|
|
(11,809)
|
|
|
(50)
|
|
|
(22,595)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2015
|
|
|
(14,170)
|
|
|
(9,341)
|
|
|
-
|
|
|
(23,511)
|
|
Current period change excluding amounts reclassified
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from accumulated other comprehensive income
|
|
|
2,962
|
|
|
(116)
|
|
|
-
|
|
|
2,846
|
|
Amounts reclassified from accumulated other
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
comprehensive income
|
|
|
-
|
|
|
281
|
|
|
-
|
|
|
281
|
|
Total change in accumulated other comprehensive income
|
|
|
2,962
|
|
|
165
|
|
|
-
|
|
|
3,127
|
|
Balance as of March 31, 2016
|
|
|
(11,208)
|
|
|
(9,176)
|
|
|
-
|
|
|
(20,384)
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Amounts Reclassified Out of Accumulated Other
|
|
|
|
|
|
|
March
31,
|
|
Comprehensive Income - Before-tax Income/(Expense)
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization and settlement of postretirement benefits reserves
|
|
|
|
|
|
|
|
|
|
adjustment included in net periodic benefit costs
(1)
|
(414)
|
|
|
(511)
|
|
Realized change in fair value of stock investments included in
net income
|
|
|
|
|
|
|
(Statement of Income line: Other income)
|
-
|
|
|
(12)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) These accumulated other comprehensive income components are
included in the computation of net periodic pension cost. (See Note 6 – Pension
and Other Postretirement Benefits for additional details.)
|
|
|
|
|
|
|
|
|
|
|
|
Three
Months Ended
|
|
Income Tax (Expense)/Credit For
|
|
|
|
|
|
|
|
|
March
31,
|
|
Components of Other Comprehensive Income
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange translation adjustment
|
|
|
|
|
|
|
|
|
(11)
|
|
|
90
|
|
Postretirement benefits reserves adjustment (excluding
amortization)
|
|
|
80
|
|
|
(377)
|
|
Amortization and settlement of postretirement benefits reserves
|
|
|
|
|
|
|
|
|
adjustment included in net periodic benefit costs
|
|
|
(125)
|
|
|
(160)
|
|
Unrealized change in fair value of stock investments
|
|
|
-
|
|
|
(1)
|
|
Realized change in fair value of stock investments
|
|
|
|
|
|
|
|
|
included in net income
|
|
|
-
|
|
|
(4)
|
|
Total
|
|
|
|
|
|
|
|
|
(56)
|
|
|
(452)
|
5. Earnings Per
Share
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to ExxonMobil
(millions of dollars)
|
|
|
1,810
|
|
|
4,940
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average number of common shares outstanding
(millions of shares)
|
|
|
4,178
|
|
|
4,211
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per common share
(dollars)
(1)
|
|
|
|
0.43
|
|
|
1.17
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(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,
|
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
|
|
(millions
of dollars)
|
|
Components of net benefit cost
|
|
|
|
|
|
|
|
|
|
Pension Benefits - U.S.
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
|
202
|
|
|
195
|
|
|
|
Interest cost
|
|
|
|
198
|
|
|
196
|
|
|
|
Expected return on plan assets
|
|
|
|
(182)
|
|
|
(207)
|
|
|
|
Amortization of actuarial loss/(gain) and prior service cost
|
|
|
124
|
|
|
138
|
|
|
|
Net pension enhancement and curtailment/settlement cost
|
|
|
111
|
|
|
117
|
|
|
|
Net benefit cost
|
|
|
|
453
|
|
|
439
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits - Non-U.S.
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
|
149
|
|
|
176
|
|
|
|
Interest cost
|
|
|
|
213
|
|
|
218
|
|
|
|
Expected return on plan assets
|
|
|
|
(235)
|
|
|
(278)
|
|
|
|
Amortization of actuarial loss/(gain) and prior service cost
|
|
|
148
|
|
|
211
|
|
|
|
Net benefit cost
|
|
|
|
275
|
|
|
327
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other Postretirement Benefits
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
|
35
|
|
|
37
|
|
|
|
Interest cost
|
|
|
|
89
|
|
|
90
|
|
|
|
Expected return on plan assets
|
|
|
|
(6)
|
|
|
(7)
|
|
|
|
Amortization of actuarial loss/(gain) and prior service cost
|
|
|
31
|
|
|
45
|
|
|
|
Net benefit cost
|
|
|
|
149
|
|
|
165
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Financial
Instruments
The fair value of financial instruments is
determined by reference to observable market data and other valuation
techniques as appropriate. The only category of financial instruments where the
difference between fair value and recorded book value is notable is long-term
debt. The estimated fair value of total long-term debt, excluding capitalized
lease obligations, was $29,061 million at March 31, 2016, and $18,854 million
at December 31, 2015, as compared to recorded book values of $28,306 million
at March 31, 2016, and $18,687 million at December 31, 2015. The increase
in the estimated fair value and book value of long-term debt reflects the
Corporation’s issuance of $12.0 billion of long-term debt in the first quarter
of 2016. The $12.0 billion of long-term debt is comprised of $750 million of
floating-rate notes due in 2018, $250 million of floating-rate notes due in
2019, $1,000 million of 1.439% notes due in 2018, $1,250 million of 1.708%
notes due in 2019, $2,500 million of 2.222% notes due in 2021, $1,250 million
of 2.726% notes due in 2023, $2,500 million of 3.043% notes due in 2026 and
$2,500 million of 4.114% notes due in 2046.
The fair value of long-term debt by
hierarchy level at March 31, 2016, is: Level 1 $28,835 million;
Level 2 $164 million; and Level 3 $62 million. Level 1 represents
quoted prices in active markets. Level 2 includes debt whose fair value is
based upon a publicly available index. Level 3 involves using internal data
augmented by relevant market indicators if available.
8. Disclosures
about Segments and Related Information
|
|
|
|
|
|
|
Three
Months Ended
|
|
|
|
|
|
|
|
March
31,
|
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
Earnings After Income Tax
|
|
|
|
(millions
of dollars)
|
|
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
(832)
|
|
|
(52)
|
|
|
|
Non-U.S.
|
|
|
|
756
|
|
|
2,907
|
|
|
Downstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
187
|
|
|
567
|
|
|
|
Non-U.S.
|
|
|
|
719
|
|
|
1,100
|
|
|
Chemical
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
581
|
|
|
605
|
|
|
|
Non-U.S.
|
|
|
|
774
|
|
|
377
|
|
|
All other
|
|
|
|
(375)
|
|
|
(564)
|
|
|
Corporate total
|
|
|
|
1,810
|
|
|
4,940
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and Other Operating Revenue
(1)
|
|
|
|
|
|
|
|
|
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
1,450
|
|
|
2,125
|
|
|
|
Non-U.S.
|
|
|
|
3,019
|
|
|
4,122
|
|
|
Downstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
11,513
|
|
|
18,389
|
|
|
|
Non-U.S.
|
|
|
|
24,937
|
|
|
33,162
|
|
|
Chemical
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
2,385
|
|
|
2,792
|
|
|
|
Non-U.S.
|
|
|
|
3,799
|
|
|
4,166
|
|
|
All other
|
|
|
|
2
|
|
|
2
|
|
|
Corporate total
|
|
|
|
47,105
|
|
|
64,758
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Includes sales-based taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment Revenue
|
|
|
|
|
|
|
|
|
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
806
|
|
|
1,180
|
|
|
|
Non-U.S.
|
|
|
|
3,453
|
|
|
4,857
|
|
|
Downstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
2,390
|
|
|
3,076
|
|
|
|
Non-U.S.
|
|
|
|
4,070
|
|
|
5,273
|
|
|
Chemical
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
1,404
|
|
|
1,773
|
|
|
|
Non-U.S.
|
|
|
|
952
|
|
|
1,321
|
|
|
All other
|
|
|
|
58
|
|
|
68
|
9.
Accounting for Suspended Exploratory Well Costs
For the category of exploratory well costs
at year-end 2015 that were suspended more than one year, a total of $74 million
was expensed in the first three months of 2016.
EXXON MOBIL
CORPORATION
Item 2. Management's
Discussion and Analysis of Financial Condition and Results of Operations
FUNCTIONAL EARNINGS SUMMARY
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Three Months
|
Earnings (U.S. GAAP)
|
|
|
2016
|
|
|
2015
|
|
|
|
|
(millions
of dollars)
|
Upstream
|
|
|
|
|
|
|
|
United States
|
|
|
(832)
|
|
|
(52)
|
|
Non-U.S.
|
|
|
756
|
|
|
2,907
|
Downstream
|
|
|
|
|
|
|
|
United States
|
|
|
187
|
|
|
567
|
|
Non-U.S.
|
|
|
719
|
|
|
1,100
|
Chemical
|
|
|
|
|
|
|
|
United States
|
|
|
581
|
|
|
605
|
|
Non-U.S.
|
|
|
774
|
|
|
377
|
Corporate and financing
|
|
|
(375)
|
|
|
(564)
|
|
Net Income attributable to ExxonMobil
|
|
|
1,810
|
|
|
4,940
|
|
|
|
|
|
|
|
Earnings per common share
(dollars)
|
|
|
0.43
|
|
|
1.17
|
|
|
|
|
|
|
|
|
Earnings per common share - assuming dilution
(dollars)
|
|
0.43
|
|
|
1.17
|
|
|
|
|
|
|
|
|
References in this
discussion to corporate earnings mean net income attributable to ExxonMobil
(U.S. GAAP) from the consolidated income statement. Unless otherwise indicated,
references to earnings, Upstream, Downstream, Chemical and Corporate and
Financing segment earnings, and earnings per share are ExxonMobil's share after
excluding amounts attributable to noncontrolling interests.
REVIEW OF FIRST QUARTER 2016 RESULTS
ExxonMobil’s first
quarter 2016 earnings were $1.8 billion, or $0.43 per diluted
share, compared with $4.9 billion a year earlier. Lower Upstream and
Downstream earnings were partially offset by stronger Chemical results and
lower corporate costs.
The organization
continues to respond effectively to challenging industry conditions, capturing
enhancements to operational performance and creating margin uplift despite low
prices. The scale and integrated nature of our cash flow provide competitive
advantage and support consistent strategy execution.
New project capacity
additions drove liquids production up 11.5 percent in the quarter, or 261,000
barrels per day. Total Upstream volumes increased to 4.3 million oil-equivalent
barrels per day.
|
|
|
|
|
First
Three Months
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(millions
of dollars)
|
Upstream earnings
|
|
|
|
|
|
|
|
United States
|
|
|
(832)
|
|
|
(52)
|
|
Non-U.S.
|
|
|
756
|
|
|
2,907
|
|
|
Total
|
|
|
(76)
|
|
|
2,855
|
Upstream earnings
declined $2,931 million from the first quarter of 2015, to a loss of $76
million. Lower liquids and gas realizations decreased earnings by
$2.6 billion. Sales mix effects decreased earnings by $100 million.
All other items decreased earnings by $250 million, including lower gains
on asset sales and less favorable tax items partly offset by lower expenses.
On an oil-equivalent basis, production increased 1.8 percent
from the first quarter of 2015. Liquids production totaled 2.5 million
barrels per day, up 261,000 barrels per day, while natural gas production
was 10.7 billion cubic feet per day, down 1.1 billion cubic feet per
day from 2015. Project ramp‑up was partly offset by regulatory
restrictions in the Netherlands, field decline and asset management impacts.
The U.S. Upstream
operations recorded a loss of $832 million, compared to a loss of
$52 million in the first quarter of 2015. Non-U.S. Upstream earnings were
$756 million, down $2,151 million from the prior year.
|
|
|
First
Quarter
|
Upstream additional information
|
|
(thousands
of barrels daily)
|
Volumes reconciliation
(Oil-equivalent production)
(1)
|
|
|
|
|
2015
|
|
|
|
4,248
|
|
|
Entitlements - Net Interest
|
|
|
|
5
|
|
|
Entitlements - Price / Spend / Other
|
|
|
|
31
|
|
|
Quotas
|
|
|
|
-
|
|
|
Divestments
|
|
|
|
(41)
|
|
|
Growth / Other
|
|
|
|
82
|
|
2016
|
|
|
|
4,325
|
|
|
|
|
|
|
|
|
(1) Gas converted to oil-equivalent at 6 million cubic feet = 1
thousand barrels.
|
Listed below are descriptions of ExxonMobil’s volumes reconciliation
factors which are provided to facilitate understanding of the terms.
Entitlements - Net
Interest
are changes to ExxonMobil’s share of production volumes caused by
non-operational changes to volume-determining factors. These factors consist of
net interest changes specified in Production Sharing Contracts (PSCs) which
typically occur when cumulative investment returns or production volumes
achieve defined thresholds, changes in equity upon achieving pay-out in partner
investment carry situations, equity redeterminations as specified in venture
agreements, or as a result of the termination or expiry of a concession. Once a
net interest change has occurred, it typically will not be reversed by
subsequent events, such as lower crude oil prices.
Entitlements - Price,
Spend and Other
are changes to ExxonMobil’s share of production volumes resulting
from temporary changes to non-operational volume-determining factors. These
factors include changes in oil and gas prices or spending levels from one
period to another. According to the terms of contractual arrangements or
government royalty regimes, price or spending variability can increase or
decrease royalty burdens and/or volumes attributable to ExxonMobil. For
example, at higher prices, fewer barrels are required for ExxonMobil to recover
its costs. These effects generally vary from period to period with field
spending patterns or market prices for oil and natural gas. Such factors can
also include other temporary changes in net interest as dictated by specific
provisions in production agreements.
Quotas
are changes in
ExxonMobil’s allowable production arising from production constraints imposed
by countries which are members of the Organization of the Petroleum Exporting
Countries (OPEC). Volumes reported in this category would have been readily
producible in the absence of the quota.
Divestments
are reductions in
ExxonMobil’s production arising from commercial arrangements to fully or
partially reduce equity in a field or asset in exchange for financial or other
economic consideration.
Growth and Other
factors comprise all
other operational and non-operational factors not covered by the above
definitions that may affect volumes attributable to ExxonMobil. Such factors
include, but are not limited to, production enhancements from project and work
program activities, acquisitions including additions from asset exchanges,
downtime, market demand, natural field decline, and any fiscal or commercial
terms that do not affect entitlements.
|
|
|
|
|
First
Three Months
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(millions
of dollars)
|
Downstream earnings
|
|
|
|
|
|
|
|
United States
|
|
|
187
|
|
|
567
|
|
Non-U.S.
|
|
|
719
|
|
|
1,100
|
|
|
Total
|
|
|
906
|
|
|
1,667
|
Downstream earnings
were $906 million, down $761 million from the first quarter of 2015.
Weaker margins decreased earnings by $860 million. Volume and mix effects
increased earnings by $10 million. All other items, primarily favorable
foreign exchange effects, increased earnings by $90 million. Petroleum
product sales of 5.3 million barrels per day were 480,000 barrels per day
lower than the prior year’s first quarter.
Earnings from the
U.S. Downstream were $187 million, down $380 million from the first
quarter of 2015. Non-U.S. Downstream earnings of $719 million were
$381 million lower than last year.
|
|
|
|
|
First
Three Months
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(millions
of dollars)
|
Chemical earnings
|
|
|
|
|
|
|
|
United States
|
|
|
581
|
|
|
605
|
|
Non-U.S.
|
|
|
774
|
|
|
377
|
|
|
Total
|
|
|
1,355
|
|
|
982
|
Chemical earnings of
$1,355 million were $373 million higher than the first quarter of
2015. Improved margins increased earnings by $250 million. Favorable
volume and mix effects increased earnings by $80 million. All other items,
primarily lower expenses, increased earnings by $40 million. First quarter
prime product sales of 6.2 million metric tons were 104,000 metric
tons higher than last year's first quarter.
|
|
|
|
|
First
Three Months
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
Corporate and financing earnings
|
|
|
(375)
|
|
|
(564)
|
Corporate and
financing expenses were $375 million for the first quarter of 2016, down
$189 million from the first quarter of 2015 due to favorable tax items.
LIQUIDITY AND
CAPITAL RESOURCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Three Months
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(millions
of dollars)
|
Net cash provided by/(used in)
|
|
|
|
|
|
|
|
Operating activities
|
|
|
4,812
|
|
|
7,998
|
|
Investing activities
|
|
|
(4,349)
|
|
|
(6,352)
|
|
Financing activities
|
|
|
524
|
|
|
(854)
|
Effect of exchange rate changes
|
|
|
154
|
|
|
(224)
|
Increase/(decrease) in cash and cash equivalents
|
|
|
1,141
|
|
|
568
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (at end of period)
|
|
|
4,846
|
|
|
5,184
|
Cash and cash equivalents – restricted (at end of period)
|
|
|
-
|
|
|
43
|
Total cash and cash equivalents (at end of period)
|
|
|
4,846
|
|
|
5,227
|
|
|
|
|
|
|
|
|
|
Cash flow from operations and asset sales
|
|
|
|
|
|
|
|
Net cash provided by operating activities (U.S. GAAP)
|
|
|
4,812
|
|
|
7,998
|
|
Proceeds associated with sales of subsidiaries, property, plant
& equipment,
|
|
|
|
|
|
|
|
and sales and returns of investments
|
|
|
177
|
|
|
484
|
|
Cash flow from operations and asset sales
|
|
|
4,989
|
|
|
8,482
|
Because of the
ongoing nature of our asset management and divestment program, we believe it is
useful for investors to consider proceeds associated with asset sales together
with cash provided by operating activities when evaluating cash available for
investment in the business and financing activities, including shareholder
distributions.
Cash provided by
operating activities totaled $4.8 billion for the first three months of 2016,
$3.2 billion lower than 2015. Net income including noncontrolling interests was
$1.8 billion, a decrease of $3.3 billion from the prior year period. The
adjustment for the noncash provision of $4.8 billion for depreciation and
depletion increased by $0.5 billion. Changes in operational working capital
decreased cash flows by $0.4 billion in 2016 and $0.5 billion in 2015. All
other items net decreased cash by $1.3 billion in 2016 and $0.9 billion in
2015. For additional details, see the Condensed Consolidated Statement of Cash
Flows on page 6.
Investing activities
for the first three months of 2016 used net cash of $4.3 billion, a decrease of
$2.0 billion compared to the prior year. Spending for additions to property,
plant and equipment of $4.6 billion was $2.2 billion lower than 2015. Proceeds
from asset sales of $0.2 billion decreased $0.3 billion. Other investing
activities – net were unchanged at $0.3 billion.
Cash flow from
operations and asset sales in the first quarter of 2016 was $5.0 billion,
including asset sales of $0.2 billion, and decreased $3.5 billion from the
comparable 2015 period primarily due to lower earnings.
During the first
quarter of 2016, the Corporation issued $12.0 billion of long-term debt and
used part of the proceeds to reduce short-term debt. The net cash generated by
financing activities was $0.5 billion in the first three months of 2016, $1.4
billion higher than 2015 reflecting lower purchases of ExxonMobil stock in
2016.
During the first
quarter of 2016, Exxon Mobil Corporation purchased 9 million shares of its
common stock for the treasury at a gross cost of $0.7 billion. These purchases
were made to acquire shares in conjunction with the company’s benefit plans and
programs. Shares outstanding decreased from 4,156 million at year-end to 4,147
million at the end of the first quarter 2016. Purchases may be made in both the
open market and through negotiated transactions, and may be increased,
decreased or discontinued at any time without prior notice.
The Corporation
distributed to shareholders a total of $3.1 billion in the first quarter of
2016 through dividends.
Total cash and cash
equivalents of $4.8 billion at the end of the first quarter of 2016 compared to
$5.2 billion at the end of the first quarter of 2015.
Total debt of $43.1 billion compared to $38.7 billion at year-end
2015. The Corporation's debt to total capital ratio was 19.5 percent at the end
of the first quarter of 2016 compared to 18.0 percent at year-end 2015.
The Corporation has
access to significant capacity of long-term and short-term liquidity.
Internally generated funds are expected to cover the majority of financial
requirements, supplemented by long-term and short-term debt.
The Corporation, as
part of its ongoing asset management program, continues to evaluate its mix of
assets for potential upgrade. Because of the ongoing nature of this program,
dispositions will continue to be made from time to time which will result in
either gains or losses. Additionally, the Corporation continues to evaluate
opportunities to enhance its business portfolio through acquisitions of assets
or companies, and enters into such transactions from time to time. Key criteria
for evaluating acquisitions include potential for future growth and attractive
current valuations. Acquisitions may be made with cash, shares of the
Corporation’s common stock, or both.
Litigation and other
contingencies are discussed in Note 3 to the unaudited condensed consolidated
financial statements.
TAXES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Three Months
|
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
(51)
|
|
|
1,560
|
|
|
Effective income tax rate
|
|
|
19
|
%
|
|
33
|
%
|
Sales-based taxes
|
|
|
4,815
|
|
|
5,530
|
|
All other taxes and duties
|
|
|
6,731
|
|
|
7,274
|
|
|
Total
|
|
|
11,495
|
|
|
14,364
|
|
Income, sales-based and all other taxes and duties totaled
$11.5 billion for the first quarter of 2016, a decrease of $2.9 billion from
2015. Income tax decreased by $1.6 billion and was a credit of $51 million
reflecting lower earnings, including a loss in the United States. The effective
income tax rate, which is calculated based on consolidated company income taxes
and ExxonMobil share of equity company income taxes, was 19 percent compared to
33 percent
in the prior year period
due to a
higher share of earnings in lower tax jurisdictions, the loss in the United
States, and favorable one-time tax items
. Sales-based
taxes and all other taxes and duties decreased by $1.3 billion to $11.5 billion
as a result of lower sales realizations.
In the United States,
the Corporation has various U.S. federal income tax positions at issue with the
Internal Revenue Service (IRS) for tax years 2006-2011. For tax years
2010-2011, the IRS has asserted a penalty associated with several of those
positions. The Corporation has not recognized the penalty as an expense
because, in the Corporation’s judgment, the IRS should not be able to sustain
the penalty under applicable law. The same U.S. federal income tax positions
are at issue for tax years 2006-2009 and also could be subject to the assertion
of a penalty. Unfavorable resolution of these issues would not have a
materially adverse effect on the Corporation’s net income or liquidity. The IRS
has not completed its audit of tax years after 2011.
CAPITAL AND EXPLORATION EXPENDITURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First
Three Months
|
|
|
|
|
|
2016
|
|
|
2015
|
|
|
|
|
|
(millions
of dollars)
|
|
|
|
|
|
|
|
|
|
|
Upstream (including exploration expenses)
|
|
|
3,979
|
|
|
6,417
|
|
Downstream
|
|
|
528
|
|
|
621
|
|
Chemical
|
|
|
611
|
|
|
654
|
|
Other
|
|
|
9
|
|
|
12
|
|
|
Total
|
|
|
5,127
|
|
|
7,704
|
|
Capital
and
exploration expenditures in the first quarter of 2016 were
$5.1 billion, down 33 percent from the first quarter of 2015. The Corporation
anticipates an investment level of $23.2 billion in 2016. Actual spending could
vary depending on the progress of individual projects and property
acquisitions.
In 2014, the European Union and United States imposed
sanctions relating to the Russian energy sector. ExxonMobil continues to comply
with all sanctions and regulatory licenses applicable to its affiliates’
investments in the Russian Federation.
RECENTLY ISSUED ACCOUNTING STANDARDS
In May 2014, the Financial Accounting
Standards Board issued a new standard,
Revenue from Contracts with Customers
.
The standard establishes a single revenue recognition model for all contracts
with customers, eliminates industry specific requirements, and expands
disclosure requirements. The standard is required to be adopted beginning
January 1, 2018.
“Sales and Other Operating Revenue” on the
Consolidated Statement of Income includes sales, excise and value-added taxes
on sales transactions. When the Corporation adopts the standard, revenue will
exclude sales-based taxes collected on behalf of third parties. This change in
reporting will not impact earnings.
The Corporation continues to evaluate
other areas of the standard and its effect on the Corporation’s financial
statements.
In February 2016, the Financial Accounting
Standards Board issued a new standard,
Leases
. The standard requires all
leases with an initial term greater than one year be recorded on the balance
sheet as an asset and a lease liability. The standard is required to be adopted
beginning January 1, 2019. ExxonMobil is evaluating the standard and its effect
on the Corporation’s financial statements.
FORWARD-LOOKING STATEMENTS
Statements
relating to future plans, projections, events or conditions are forward-looking
statements. Actual financial and operating results, including project plans,
costs, timing, and capacities; capital and exploration expenditures; resource
recoveries; and share purchase levels, could differ materially due to factors
including: changes in oil or gas prices or other market or economic conditions
affecting the oil and gas industry, including the scope and duration of
economic recessions; the outcome of exploration and development efforts;
changes in law or government regulation, including tax and environmental
requirements; the impact of fiscal and commercial terms; changes in technical
or operating conditions; and other factors discussed under the heading
"Factors Affecting Future Results" in the “Investors” section of our
website and in Item 1A of ExxonMobil's 2015 Form 10-K. We assume no duty
to update these statements as of any future date.
The term
“project” as used in this report can refer to a variety of different activities
and does not necessarily have the same meaning as in any government payment
transparency reports.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
Information about
market risks for the three months ended March 31, 2016, does not differ
materially from that discussed under Item 7A of the registrant's Annual Report
on Form 10-K for 2015.
Item 4. Controls and
Procedures
As indicated in the
certifications in Exhibit 31 of this report, the Corporation’s Chief Executive Officer,
Principal Financial Officer and Principal Accounting Officer have evaluated the
Corporation’s disclosure controls and procedures as of March 31, 2016.
Based on that evaluation, these officers have concluded that the Corporation’s
disclosure controls and procedures are effective in ensuring that information
required to be disclosed by the Corporation in the reports that it files or
submits under the Securities Exchange Act of 1934, as amended, is accumulated
and communicated to them in a manner that allows for timely decisions regarding
required disclosures and are effective in ensuring that such information is
recorded, processed, summarized and reported within the time periods specified
in the Securities and Exchange Commission’s rules and forms. There were no
changes during the Corporation’s last fiscal quarter that materially affected,
or are reasonably likely to materially affect, the Corporation’s internal control
over financial reporting.