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 September 30, 2017March 31, 2018

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) 444-1000940-6000

(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, 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 September 30, 2017March 31, 2018

Common stock, without par value

 

 4,237,106,0774,233,834,437 

 

 

   

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2017MARCH 31, 2018

 

TABLE OF CONTENTS

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

Item 1.       Financial Statements

 

 

     Condensed Consolidated Statement of Income

Three and nine months ended September 30,March 31, 2018 and 2017 and 2016

 

3

     Condensed Consolidated Statement of Comprehensive Income

Three and nine months ended September 30,March 31, 2018 and 2017 and 2016

 

4

     Condensed Consolidated Balance Sheet

As of September 30, 2017March 31, 2018 and December 31, 20162017

5

 

 

     Condensed Consolidated Statement of Cash Flows

          NineThree months ended September 30,March 31, 2018 and 2017 and 2016

 

6

     Condensed Consolidated Statement of Changes in Equity

          NineThree months ended September 30,March 31, 2018 and 2017 and 2016

 

7

     Notes to Condensed Consolidated Financial Statements

 

8

Item 2.       Management's Discussion and Analysis of Financial

                     Condition and Results of Operations

 

1516

Item 3.       Quantitative and Qualitative Disclosures About Market Risk

 

2423

Item 4.       Controls and Procedures

 

2423

 

 

PART II.  OTHER INFORMATION

 

Item 1.       Legal Proceedings

 

2524

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

 

2625

Item 6.       Exhibits

 

2625

Index to Exhibits

 

2726

Signature

 

2827


2 

 

   

PART I.  FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

Item 1. Financial Statements

 

 

 

 

 

 

 

 

 

 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

Nine Months Ended

 

 

 

 

September 30,March 31,

September 30,

 

 

 

2018

2017

2016

2017

2016

Revenues and other income

 

 

 

 

 

 

 

 

Sales and other operating revenue(1) 

 

 

64,41565,436

 

 

56,76756,474

 

186,330

160,232

 

Income from equity affiliates

 

 

1,4721,910

 

 

1,1031,710

 

4,707

3,478

 

Other income

 

 

278865

 

 

807487

 

1,291

1,368

 

 

Total revenues and other income

 

 

66,16568,211

 

 

58,67758,671

 

192,328

165,078

Costs and other deductions

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

 

31,43236,288

 

 

28,03530,359

 

91,985

75,872

 

Production and manufacturing expenses

 

 

8,3348,491

 

 

7,7097,566

 

24,586

23,346

 

Selling, general and administrative expenses

 

 

2,7252,747

 

 

2,7362,505

 

7,952

7,975

 

Depreciation and depletion

 

 

4,8804,470

 

 

4,6054,519

 

14,051

14,191

 

Exploration expenses, including dry holes

 

 

284287

 

 

327289

Non-service pension and postretirement benefit expense

 

 

1,087337

 

 

1,127373

 

Interest expense

 

 

111204

 

 

106146

 

415

258

Sales-based taxes (1) 

5,864

5,437

16,795

15,687

 

Other taxes and duties

 

 

6,9528,147

 

 

6,4966,996

 

19,800

19,270

 

 

Total costs and other deductions

 

 

60,58260,971

 

 

55,45152,753

 

176,671

157,726

Income before income taxes

 

 

5,5837,240

 

 

3,2265,918

 

15,657

7,352

 

Income taxes

 

 

1,4982,457

 

 

3371,828

 

4,218

1,001

Net income including noncontrolling interests

 

 

4,0854,783

 

 

2,8894,090

 

11,439

6,351

 

Net income attributable to noncontrolling interests

 

 

115133

 

 

23980

 

109

191

Net income attributable to ExxonMobil

 

 

3,9704,650

 

 

2,6504,010

 

11,330

6,160

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) 

 

 

0.931.09

 

 

0.630.95

 

2.66

1.47

  

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars) 

 

 

0.931.09

 

 

0.630.95

 

2.66

1.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends per common share (dollars) 

 

 

0.77

 

 

0.75

 

2.29

2.23

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

operating revenue

5,864

5,437

16,795

15,687



The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


3 

 

 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

4,085

 

 

2,889

 

 

11,439

 

 

6,351

Other comprehensive income (net of income taxes)

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

2,342

 

 

(107)

 

 

5,424

 

 

2,506

 

Adjustment for foreign exchange translation (gain)/loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 included in net income

 

 

-

 

 

-

 

 

234

 

 

-

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

(145)

 

 

34

 

 

(329)

 

 

25

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

311

 

 

278

 

 

850

 

 

859

 

 

Total other comprehensive income

 

 

2,508

 

 

205

 

 

6,179

 

 

3,390

Comprehensive income including noncontrolling interests

 

 

6,593

 

 

3,094

 

 

17,618

 

 

9,741

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

noncontrolling interests

 

 

372

 

 

166

 

 

700

 

 

536

Comprehensive income attributable to ExxonMobil

 

 

6,221

 

 

2,928

 

 

16,918

 

 

9,205

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

 

4,783

 

 

4,090

 

 

Other comprehensive income (net of income taxes)

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

 

(804)

 

 

1,408

 

 

 

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

 

 

168

 

 

-

 

 

 

Postretirement benefits reserves adjustment (excluding amortization)

 

 

(434)

 

 

(25)

 

 

 

Amortization and settlement of postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

included in net periodic benefit costs

 

 

 

237

 

 

256

 

 

 

 

Total other comprehensive income

 

 

 

(833)

 

 

1,639

 

 

Comprehensive income including noncontrolling interests

 

 

3,950

 

 

5,729

 

 

 

Comprehensive income attributable to noncontrolling interests

 

 

(9)

 

 

159

 

 

Comprehensive income attributable to ExxonMobil

 

 

 

3,959

 

 

5,570

 



The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


4 

 

 

EXXON MOBIL CORPORATION

EXXON MOBIL CORPORATION

 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED BALANCE SHEET

CONDENSED CONSOLIDATED BALANCE SHEET

 

CONDENSED CONSOLIDATED BALANCE SHEET

 

(millions of dollars)

(millions of dollars)

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

 

Dec. 31,

 

 

 

 

 

 

Mar. 31,

 

 

Dec. 31,

 

 

 

 

 

 

2017

 

 

2016

 

 

 

 

 

 

2018

 

 

2017

 

Assets

Assets

 

 

 

 

 

 

Assets

 

 

 

 

 

Current assets

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

Cash and cash equivalents

 

 

4,266

 

 

3,657

 

 

Cash and cash equivalents

 

 

4,125

 

 

3,177

 

 

Notes and accounts receivable – net

 

 

23,263

 

21,394

 

 

Notes and accounts receivable – net

 

24,686

 

25,597

 

 

Inventories

 

 

 

 

 

 

 

Inventories

 

 

 

 

 

 

 

Crude oil, products and merchandise

 

 

12,488

 

10,877

 

 

 

Crude oil, products and merchandise

 

13,879

 

12,871

 

 

 

Materials and supplies

 

 

4,255

 

4,203

 

 

 

Materials and supplies

 

4,169

 

4,121

 

 

Other current assets

 

 

1,480

 

1,285

 

 

Other current assets

 

1,456

 

1,368

 

 

 

Total current assets

 

 

45,752

 

41,416

 

 

 

Total current assets

 

48,315

 

47,134

 

Investments, advances and long-term receivables

 

 

37,649

 

35,102

 

Investments, advances and long-term receivables

 

40,350

 

39,160

 

Property, plant and equipment – net

 

 

255,556

 

244,224

 

Property, plant and equipment – net

 

250,352

 

252,630

 

Other assets, including intangibles – net

 

 

10,470

 

9,572

 

Other assets, including intangibles – net

 

9,809

 

9,767

 

 

 

Total assets

 

 

349,427

 

 

330,314

 

 

 

Total assets

 

 

348,826

 

 

348,691

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

Liabilities

 

 

 

 

 

 

Liabilities

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

Notes and loans payable

 

 

15,741

 

 

13,830

 

 

Notes and loans payable

 

 

19,836

 

 

17,930

 

 

Accounts payable and accrued liabilities

 

 

34,698

 

31,193

 

 

Accounts payable and accrued liabilities

 

37,207

 

36,796

 

 

Income taxes payable

 

 

3,338

 

2,615

 

 

Income taxes payable

 

3,263

 

3,045

 

 

 

Total current liabilities

 

 

53,777

 

47,638

 

 

 

Total current liabilities

 

60,306

 

57,771

 

Long-term debt

 

 

24,869

 

28,932

 

Long-term debt

 

20,781

 

24,406

 

Postretirement benefits reserves

 

 

20,874

 

20,680

 

Postretirement benefits reserves

 

21,696

 

21,132

 

Deferred income tax liabilities

 

 

34,430

 

34,041

 

Deferred income tax liabilities

 

26,760

 

26,893

 

Long-term obligations to equity companies

 

 

5,003

 

5,124

 

Long-term obligations to equity companies

 

4,818

 

4,774

 

Other long-term obligations

 

 

21,276

 

20,069

 

Other long-term obligations

 

19,554

 

19,215

 

 

 

Total liabilities

 

 

160,229

 

 

156,484

 

 

 

Total liabilities

 

 

153,915

 

 

154,191

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 3)

Commitments and contingencies (Note 3)

 

 

 

 

 

 

Commitments and contingencies (Note 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

Equity

 

 

 

 

 

 

Equity

 

 

 

 

 

Common stock without par value

 

 

 

 

 

 

Common stock without par value

 

 

 

 

 

 

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

 

 

14,783

 

12,157

 

 

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

 

14,888

 

14,656

 

Earnings reinvested

 

 

409,449

 

407,831

 

Earnings reinvested

 

415,970

 

414,540

 

Accumulated other comprehensive income

 

 

(16,651)

 

(22,239)

 

Accumulated other comprehensive income

 

(16,992)

 

(16,262)

 

Common stock held in treasury

 

 

 

 

 

 

Common stock held in treasury

 

 

 

 

 

 

(3,782 million shares at September 30, 2017 and

 

 

 

 

 

 

(3,785 million shares at March 31, 2018 and

 

 

 

 

 

 

   3,871 million shares at December 31, 2016)

 

 

(225,305)

 

(230,424)

 

 

   3,780 million shares at December 31, 2017)

 

(225,671)

 

(225,246)

 

 

 

ExxonMobil share of equity

 

 

182,276

 

167,325

 

 

 

ExxonMobil share of equity

 

188,195

 

187,688

 

Noncontrolling interests

 

 

6,922

 

6,505

 

Noncontrolling interests

 

6,716

 

6,812

 

 

 

Total equity

 

 

189,198

 

173,830

 

 

 

Total equity

 

194,911

 

194,500

 

 

 

Total liabilities and equity

 

 

349,427

 

 

330,314

 

 

 

Total liabilities and equity

 

 

348,826

 

 

348,691

 



The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


5 

 

 

EXXON MOBIL CORPORATION

EXXON MOBIL CORPORATION

 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

(millions of dollars)

(millions of dollars)

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

Three Months Ended

 

 

 

 

 

September 30,

 

 

 

 

 

March 31,

 

 

 

 

 

2017

 

 

2016

 

 

 

 

 

2018

 

 

2017

 

Cash flows from operating activities

Cash flows from operating activities

 

 

 

 

 

 

 

Cash flows from operating activities

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

11,439

 

 

6,351

 

Net income including noncontrolling interests

 

 

4,783

 

 

4,090

 

Depreciation and depletion

 

 

14,051

 

 

14,191

 

Depreciation and depletion

 

 

4,470

 

 

4,519

 

Changes in operational working capital, excluding cash and debt

 

 

(547)

 

 

(2,386)

 

Changes in operational working capital, excluding cash and debt

 

 

351

 

 

793

 

All other items – net

 

 

(2,288)

 

 

(3,470)

 

All other items – net

 

 

(1,085)

 

 

(1,229)

 

 

Net cash provided by operating activities

 

 

22,655

 

 

14,686

 

 

Net cash provided by operating activities

 

 

8,519

 

 

8,173

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

Cash flows from investing activities

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(10,901)

 

 

(12,276)

 

Additions to property, plant and equipment

 

 

(3,349)

 

 

(2,890)

 

Proceeds associated with sales of subsidiaries, property, plant and

 

 

 

 

 

 

 

Proceeds associated with sales of subsidiaries, property, plant and

 

 

 

 

 

 

 

 

equipment, and sales and returns of investments

 

 

1,695

 

 

2,182

 

 

equipment, and sales and returns of investments

 

 

1,441

 

 

687

 

Additional investments and advances

 

 

(1,950)

 

 

(1,398)

 

Additional investments and advances

 

 

(138)

 

 

(1,738)

 

Other investing activities including collection of advances

 

 

1,962

 

 

761

 

Other investing activities including collection of advances

 

 

187

 

 

180

 

 

Net cash used in investing activities

 

 

(9,194)

 

 

(10,731)

 

 

Net cash used in investing activities

 

 

(1,859)

 

 

(3,761)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

Cash flows from financing activities

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

Additions to long-term debt

 

 

60

 

 

11,964

 

Additions to long-term debt

 

 

-

 

 

60

 

Additions to short-term debt

 

 

1,735

 

 

-

 

Additions to short-term debt

 

 

-

 

 

1,734

 

Reductions in short-term debt

 

 

(4,971)

 

 

(286)

 

Reductions in short-term debt

 

 

(3,872)

 

 

(2,669)

 

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

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

months or less maturity (1) 

 

 

339

 

 

(4,062)

 

 

months or less maturity (1) 

 

 

1,950

 

 

1,308

 

Cash dividends to ExxonMobil shareholders

 

 

(9,712)

 

 

(9,320)

 

Cash dividends to ExxonMobil shareholders

 

 

(3,291)

 

 

(3,134)

 

Cash dividends to noncontrolling interests

 

 

(139)

 

 

(122)

 

Cash dividends to noncontrolling interests

 

 

(43)

 

 

(44)

 

Changes in noncontrolling interests

 

 

(90)

 

 

-

 

Changes in noncontrolling interests

 

 

(59)

 

 

-

 

Common stock acquired

 

 

(515)

 

 

(727)

 

Common stock acquired

 

 

(427)

 

 

(501)

 

Common stock sold

 

 

-

 

 

6

 

 

Net cash used in financing activities

 

 

(5,742)

 

 

(3,246)

 

 

Net cash used in financing activities

 

 

(13,293)

 

 

(2,547)

 

Effects of exchange rate changes on cash

Effects of exchange rate changes on cash

 

 

441

 

 

(20)

 

Effects of exchange rate changes on cash

 

 

30

 

 

74

 

Increase/(decrease) in cash and cash equivalents

Increase/(decrease) in cash and cash equivalents

 

 

609

 

 

1,388

 

Increase/(decrease) in cash and cash equivalents

 

 

948

 

 

1,240

 

Cash and cash equivalents at beginning of period

Cash and cash equivalents at beginning of period

 

 

3,657

 

 

3,705

 

Cash and cash equivalents at beginning of period

 

 

3,177

 

 

3,657

 

Cash and cash equivalents at end of period

Cash and cash equivalents at end of period

 

 

4,266

 

 

5,093

 

Cash and cash equivalents at end of period

 

 

4,125

 

 

4,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures

Supplemental Disclosures

 

 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

Income taxes paid

 

 

4,611

 

 

3,049

 

Income taxes paid

 

 

2,117

 

 

1,970

 

Cash interest paid

 

 

965

 

 

709

 

Cash interest paid

 

 

360

 

 

368

 



2017 Non-CashNoncash Transactions

In the first ninethree months of 2017, the Corporation completed the acquisitions of InterOil Corporation and of companies that own certain oil and gas properties in the Permian Basin and other assets. These transactions included a significant non-cash component. Additional information is providednoncash component associated with the issuance of a combined 96 million shares of Exxon Mobil Corporation common stock in Note 9.acquisition consideration.

 

 (1) Includes a net reduction of commercial paper with a maturity of over three months of $0.5$0.3 billion in 20172018 and a net addition of $1.0$0.1 billion in 2016.2017. The gross amount of commercial paper with a maturity of over three months issued was $2.7$0.4 billion in 20172018 and $2.9$1.1 billion in 2016,2017, while the gross amount repaid was $3.2$0.7 billion in 20172018 and $1.9$1.0 billion in 2016.2017.

 

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, 2015

 

 

11,612

 

 

412,444

 

 

(23,511)

 

 

(229,734)

 

 

170,811

 

 

5,999

 

 

176,810

 

Amortization of stock-based awards

 

 

612

 

 

-

 

 

-

 

 

-

 

 

612

 

 

-

 

 

612

 

Tax benefits related to stock-based

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

awards

 

 

11

 

 

-

 

 

-

 

 

-

 

 

11

 

 

-

 

 

11

 

Other

 

 

(7)

 

 

-

 

 

-

 

 

-

 

 

(7)

 

 

-

 

 

(7)

 

Net income for the period

 

 

-

 

 

6,160

 

 

-

 

 

-

 

 

6,160

 

 

191

 

 

6,351

 

Dividends – common shares

 

 

-

 

 

(9,320)

 

 

-

 

 

-

 

 

(9,320)

 

 

(122)

 

 

(9,442)

 

Other comprehensive income

 

 

-

 

 

-

 

 

3,045

 

 

-

 

 

3,045

 

 

345

 

 

3,390

 

Acquisitions, at cost

 

 

-

 

 

-

 

 

-

 

 

(727)

 

 

(727)

 

 

-

 

 

(727)

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

12

 

 

12

 

 

-

 

 

12

Balance as of September 30, 2016

 

 

12,228

 

 

409,284

 

 

(20,466)

 

 

(230,449)

 

 

170,597

 

 

6,413

 

 

177,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2016

 

 

12,157

 

 

407,831

 

 

(22,239)

 

 

(230,424)

 

 

167,325

 

 

6,505

 

 

173,830

 

Amortization of stock-based awards

 

 

635

 

 

-

 

 

-

 

 

-

 

 

635

 

 

-

 

 

635

 

Other

 

 

(87)

 

 

-

 

 

-

 

 

-

 

 

(87)

 

 

(54)

 

 

(141)

 

Net income for the period

 

 

-

 

 

11,330

 

 

-

 

 

-

 

 

11,330

 

 

109

 

 

11,439

 

Dividends – common shares

 

 

-

 

 

(9,712)

 

 

-

 

 

-

 

 

(9,712)

 

 

(139)

 

 

(9,851)

 

Other comprehensive income

 

 

-

 

 

-

 

 

5,588

 

 

-

 

 

5,588

 

 

591

 

 

6,179

 

Acquisitions, at cost

 

 

-

 

 

-

 

 

-

 

 

(596)

 

 

(596)

 

 

(90)

 

 

(686)

 

Issued for acquisitions

 

 

2,078

 

 

-

 

 

-

 

 

5,711

 

 

7,789

 

 

-

 

 

7,789

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

4

 

 

4

 

 

-

 

 

4

Balance as of September 30, 2017

 

 

14,783

 

 

409,449

 

 

(16,651)

 

 

(225,305)

 

 

182,276

 

 

6,922

 

 

189,198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2017

 

 

 

 

Nine Months Ended September 30, 2016

 

 

 

 

 

 

 

 

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

 

 

(3,871)

 

 

4,148

 

 

 

 

 

8,019

 

 

(3,863)

 

 

4,156

 

 

 

Acquisitions

 

 

-

 

 

(7)

 

 

(7)

 

 

 

 

 

-

 

 

(9)

 

 

(9)

 

 

 

Issued for acquisitions

 

 

-

 

 

96

 

 

96

 

 

 

 

 

-

 

 

-

 

 

-

 

 

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

 

 

 

-

 

 

-

 

 

-

 

Balance as of September 30

 

 

8,019

 

 

(3,782)

 

 

4,237

 

 

 

 

 

8,019

 

 

(3,872)

 

 

4,147

 

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, 2016

 

 

12,157

 

 

407,831

 

 

(22,239)

 

 

(230,424)

 

 

167,325

 

 

6,505

 

 

173,830

 

Amortization of stock-based awards

 

 

264

 

 

-

 

 

-

 

 

-

 

 

264

 

 

-

 

 

264

 

Other

 

 

(84)

 

 

-

 

 

-

 

 

-

 

 

(84)

 

 

-

 

 

(84)

 

Net income for the period

 

 

-

 

 

4,010

 

 

-

 

 

-

 

 

4,010

 

 

80

 

 

4,090

 

Dividends

 

 

-

 

 

(3,134)

 

 

-

 

 

-

 

 

(3,134)

 

 

(44)

 

 

(3,178)

 

Other comprehensive income

 

 

-

 

 

-

 

 

1,560

 

 

-

 

 

1,560

 

 

79

 

 

1,639

 

Acquisitions, at cost

 

 

-

 

 

-

 

 

-

 

 

(582)

 

 

(582)

 

 

-

 

 

(582)

 

Issued for acquisitions

 

 

2,078

 

 

-

 

 

-

 

 

5,711

 

 

7,789

 

 

-

 

 

7,789

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

3

 

 

3

 

 

-

 

 

3

Balance as of March 31, 2017

 

 

14,415

 

 

408,707

 

 

(20,679)

 

 

(225,292)

 

 

177,151

 

 

6,620

 

 

183,771

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

-

 

 

(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

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended March 31, 2018

 

 

 

 

Three Months Ended March 31, 2017

 

 

 

 

 

 

 

 

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

 

 

(3,780)

 

 

4,239

 

 

 

 

 

8,019

 

 

(3,871)

 

 

4,148

 

 

 

Acquisitions

 

 

-

 

 

(5)

 

 

(5)

 

 

 

 

 

-

 

 

(7)

 

 

(7)

 

 

 

Issued for acquisitions

 

 

-

 

 

-

 

 

-

 

 

 

 

 

-

 

 

96

 

 

96

 

 

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

 

 

 

-

 

 

-

 

 

-

 

Balance as of March 31

 

 

8,019

 

 

(3,785)

 

 

4,234

 

 

 

 

 

8,019

 

 

(3,782)

 

 

4,237



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 20162017 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 StandardsChanges

 

In May 2014,Effective January 1, 2018, ExxonMobil adopted the Financial Accounting Standards Board issued a newBoard’s standard, Revenue from Contracts with Customers (Topic 606)., as amended. The standard establishes a single revenue recognition model for all contracts with customers, eliminates industry and transaction specific requirements, and expands disclosure requirements. The standard is required to bewas 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 expects to adopt the standard using the Modified Retrospective method, under which prior years’year results are not restated, but supplemental information on the impact of the new standard is provided for any material impacts of the standard on 2018 results. The Corporation continues to evaluate other areasadoption of the standard which aredid not expected to have a material effectimpact on any of the lines reported in the Corporation’s financial statements. The cumulative effect of adoption of the standard was de minimis. The Corporation did not elect any practical expedients that require disclosure. See Note 9.

 

InEffective January 2016,1, 2018, ExxonMobil adopted the Financial Accounting Standards Board issued an updated standard,Board’s Update, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The standard requires investments in equity securities other than consolidated subsidiaries and equity method investments to be measured at fair value with changes in the fair value recognized through net income. Companies can electThe Corporation elected a modified approach for equity securities that do not have a readily determinable fair value. ExxonMobil is evaluatingThis modified approach measures investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The cumulative effect adjustment related to the adoption of this standard increased equity $47 million. The portion of unrealized gains and its effectlosses recognized during the reporting period on equity securities still held at March 31, 2018 and the Corporation’scarrying value of equity securities without readily determinable fair values at March 31, 2018 were not significant to the Corporation. The standard also expanded disclosures related to financial statements and plans to adopt it in 2018.instruments. See Note 7.

 

In March 2017,Effective January 1, 2018, ExxonMobil adopted the Financial Accounting Standards Board issued an Accounting StandardsBoard’s Update, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.Cost. The update requires separate presentation of the service cost component from other components of net benefit costs to becosts. The other components are reported in a new line on the same lineCorporation’s Statement of Income, “Non-service pension and postretirement benefit expense.” The Corporation elected to use the income statementpractical expedient which uses the amounts disclosed in the pension and other postretirement benefit plan note for the prior comparative periods as other compensation costs andthe estimation basis for applying the retrospective presentation requirements, as it is impracticable to determine the amounts capitalized in those periods. Beginning in 2018, the other components of net benefit costs (non-service costs) to be presented separatelyare included in the Corporate and financing segment. The estimated after-tax impact from the service cost component. change in segmentation is an increase of about $100 million in Corporate and financing expenses for the first quarter of 2018, offset across the operating segments. Additionally, only the service cost component of net benefit costs will beis eligible for capitalization. The updatecapitalization in situations where it is requiredotherwise appropriate to be adopted beginning January 1, 2018. The Corporation expects to add a new line “Non-service pension and postretirement benefit expense” to its Consolidated Statement of Income. This line would reflect the non-service costs that were previously included in “Production and manufacturing expenses” and “Selling, general and administrative expenses”. The update is not expected to have a material impact on the Corporation’s financial statements. Beginning January 1, 2018, the Corporation expects to include all of the non-servicecapitalize employee costs in its Corporate and financing segment.connection with the construction or production of an asset.

 

The impact of the retrospective presentation change on ExxonMobil's consolidated statement of income for the period ended March 31, 2017, is shown below.

 

 

 

 

 

As of March 31, 2017

 

 

 

 

 

 

 

As Reported

 

Change

 

As Adjusted

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and manufacturing expenses

 

 

7,845

 

(279)

 

7,566

 

 

 

Selling, general and administrative expenses

 

 

2,599

 

(94)

 

2,505

 

 

 

Non-service pension and postretirement benefit expense

 

 

-

 

373

 

373

 

 

In February 2016,
8

Effective January 1, 2019, ExxonMobil will adopt the Financial Accounting Standards Board issued a newBoard’s standard, Leases (Topic 842)., as amended. 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. ExxonMobilThe Corporation is gathering and evaluating data and recently acquired a system to facilitate implementation. We are progressing an assessment of the standard and itsmagnitude of the effect on the Corporation’s financial statements and plans to adopt it in 2019. statements.


8

  



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 September 30, 2017,March 31, 2018, 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 September 30, 2017

 

 

 

 

 

 

 

 

Equity

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Company

 

 

Third Party

 

 

 

 

 

 

 

 

 

 

 

Obligations (1) 

 

 

Obligations

 

 

Total

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

Guarantees

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-related

 

 

107

 

 

30

 

 

137

 

 

 

 

Other

 

 

2,754

 

 

4,267

 

 

7,021

 

 

 

 

 

Total

 

 

2,861

 

 

4,297

 

 

7,158

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) ExxonMobil share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

As of March 31, 2018

 

 

 

 

 

 

 

 

Equity

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Company

 

 

Third Party

 

 

 

 

 

 

 

 

 

 

 

Obligations (1) 

 

 

Obligations

 

 

Total

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

Guarantees

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-related

 

 

96

 

 

328

 

 

424

 

 

 

 

Other

 

 

1,558

 

 

4,887

 

 

6,445

 

 

 

 

 

Total

 

 

1,654

 

 

5,215

 

 

6,869

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(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.

 


9

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.

 


9

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%3.25 percent 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 February 2, 2015, Venezuela filed a Request for Annulment of the ICSID award. On March 9, 2017, the ICSID Committee hearing the Request for Annulment issued a decision partially annulling the award of the Tribunal issued on October 9, 2014. The Committee affirmed the compensation due for the La Ceiba project and for export curtailments at the Cerro Negro project, but annulled the portion of the award relating to the Cerro Negro Project’s expropriation ($1.4 billion) based on its determination that the 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. As a result, ExxonMobil retains an award for $260 million (including accrued interest). ExxonMobil reached an agreement with Venezuela for full payment of the $260 million andmillion. To date, Venezuela has begun performing on it.continues to meet its payment obligations. The agreement does not impact ExxonMobil’s ability to re-arbitrate the issue that was the basis for the annulment in a new ICSID arbitration proceeding.

 

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. On July 11, 2017, the United States Court of Appeals for the Second Circuit rendered its opinion overturning the District Court’s decision and vacating the judgment on the grounds that a different procedure should have been used to reduce the award to judgment. The Corporation did not seek a writ of certiorari and the court case is evaluating next steps.now concluded.

 

A stay of the District Court’s judgment has continued pending the completion of the Second Circuit appeal. 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. 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. The stay in the proceedings in the Southern District of New York has been lifted. 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.


10 

 

   

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, 2015

 

 

(14,170)

 

 

(9,341)

 

 

(23,511)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

2,189

 

 

23

 

 

2,212

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

-

 

 

833

 

 

833

 

Total change in accumulated other comprehensive income

 

 

2,189

 

 

856

 

 

3,045

 

Balance as of September 30, 2016

 

 

(11,981)

 

 

(8,485)

 

 

(20,466)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2016

 

 

(14,501)

 

 

(7,738)

 

 

(22,239)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

4,925

 

 

(300)

 

 

4,625

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

140

 

 

823

 

 

963

 

Total change in accumulated other comprehensive income

 

 

5,065

 

 

523

 

 

5,588

 

Balance as of September 30, 2017

 

 

(9,436)

 

 

(7,215)

 

 

(16,651)

 

 

 

 

 

 

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, 2016

 

 

(14,501)

 

 

(7,738)

 

 

(22,239)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

1,342

 

 

(29)

 

 

1,313

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

-

 

 

247

 

 

247

 

Total change in accumulated other comprehensive income

 

 

1,342

 

 

218

 

 

1,560

 

Balance as of March 31, 2017

 

 

(13,159)

 

 

(7,520)

 

 

(20,679)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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)

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Amounts Reclassified Out of Accumulated Other

 

 

September 30,

 

 

September 30,

 

Comprehensive Income - Before-tax Income/(Expense)

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

(Statement of Income line: Other income)

-

 

 

-

 

 

(234)

 

 

-

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs (1) 

(450)

 

 

(415)

 

 

(1,215)

 

 

(1,248)

(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

 

 

Nine Months Ended

 

Income Tax (Expense)/Credit For

 

 

September 30,

 

 

September 30,

 

Components of Other Comprehensive Income

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

17

 

 

(9)

 

 

(9)

 

 

(6)

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

74

 

 

(11)

 

 

154

 

 

20

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

(139)

 

 

(137)

 

 

(365)

 

 

(389)

 

Total

 

 

(48)

 

 

(157)

 

 

(220)

 

 

(375)

 

 

 

 

 

 

 

 

 

Three Months Ended

 

Amounts Reclassified Out of Accumulated Other

 

 

 

 

 

March 31,

 

Comprehensive Income - Before-tax Income/(Expense)

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

(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)

 

 

(320)

 

 

(359)

 

 

 

 

 

 

 

 

 

 

 

 

 



 

 

 

 

 

 

 

 

 

Three Months Ended

 

Income Tax (Expense)/Credit For

 

 

 

 

 

March 31,

 

Components of Other Comprehensive Income

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

 

 

 

-

 

 

(18)

 

Postretirement benefits reserves adjustment (excluding amortization)

 

 

 

 

 

124

 

 

5

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

 

 

 

(83)

 

 

(103)

 

Total

 

 

 

 

 

41

 

 

(116)


11 

 

   

5.     Earnings Per Share

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

3,970

 

 

2,650

 

 

11,330

 

 

6,160

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding (millions of shares)

 

4,271

 

 

4,178

 

 

4,252

 

 

4,178

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) (1) 

 

0.93

 

 

0.63

 

 

2.66

 

 

1.47

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

 

4,650

 

 

4,010

 

  

 

 

 

 

 

 

 

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

 

 

4,270

 

 

4,223

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) (1)

 

 

1.09

 

 

0.95

 

 

 

 

 

 

 

 

 

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

 

       each period shown.

(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

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(millions of dollars)

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

200

 

 

200

 

 

583

 

 

606

 

 

 

Interest cost

 

 

199

 

 

198

 

 

598

 

 

594

 

 

 

Expected return on plan assets

 

 

(194)

 

 

(182)

 

 

(582)

 

 

(545)

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

110

 

 

124

 

 

332

 

 

373

 

 

 

Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

curtailment/settlement cost

 

 

187

 

 

111

 

 

450

 

 

333

 

 

 

Net benefit cost

 

 

502

 

 

451

 

 

1,381

 

 

1,361

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

155

 

 

131

 

 

445

 

 

430

 

 

 

Interest cost

 

 

198

 

 

206

 

 

574

 

 

636

 

 

 

Expected return on plan assets

 

 

(260)

 

 

(227)

 

 

(743)

 

 

(701)

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

135

 

 

151

 

 

388

 

 

452

 

 

 

Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

curtailment/settlement cost

 

 

-

 

 

-

 

 

(5)

 

 

-

 

 

 

Net benefit cost

 

 

228

 

 

261

 

 

659

 

 

817

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Postretirement Benefits

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

36

 

 

38

 

 

92

 

 

115

 

 

 

Interest cost

 

 

88

 

 

85

 

 

227

 

 

258

 

 

 

Expected return on plan assets

 

 

(6)

 

 

(6)

 

 

(17)

 

 

(18)

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

18

 

 

29

 

 

45

 

 

90

 

 

 

Net benefit cost

 

 

136

 

 

146

 

 

347

 

 

445

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

(millions of dollars)

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 

209

 

 

197

 

 

 

Interest cost

 

 

 

180

 

 

199

 

 

 

Expected return on plan assets

 

 

 

(182)

 

 

(194)

 

 

 

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

 

 

91

 

 

110

 

 

 

Net pension enhancement and curtailment/settlement cost

 

 

63

 

 

105

 

 

 

Net benefit cost

 

 

 

361

 

 

417

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 

158

 

 

145

 

 

 

Interest cost

 

 

 

200

 

 

187

 

 

 

Expected return on plan assets

 

 

 

(252)

 

 

(239)

 

 

 

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

 

 

118

 

 

127

 

 

 

Net pension enhancement and curtailment/settlement cost

 

 

33

 

 

(5)

 

 

 

Net benefit cost

 

 

 

257

 

 

215

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Postretirement Benefits

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

 

36

 

 

26

 

 

 

Interest cost

 

 

 

75

 

 

72

 

 

 

Expected return on plan assets

 

 

 

(6)

 

 

(6)

 

 

 

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

 

 

17

 

 

17

 

 

 

Net benefit cost

 

 

 

122

 

 

109

 

 

 

 

 

 

 

 

 

 

 

 


12 

 

7.     Financial Instruments

 

Effective January 1, 2018, ExxonMobil adopted the Financial Accounting Standards Board’s Update, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The estimated fair value of financial instruments is determined by reference to observable market dataat March 31, 2018, and other valuation techniques as appropriate. The only category of financial instruments where the difference betweenrelated hierarchy level for the fair value and recorded book valuemeasurement is notable is long-term debt. The estimated fair value of total long-term debt, excluding capitalized lease obligations, was $24,199 million at September 30, 2017, and $27,968 million at December 31, 2016, as compared to recorded book values of $23,523 million at September 30, 2017, and $27,707 million at December 31, 2016.

The fair value of long-term debt by hierarchy level at September 30, 2017, is: Level 1 $24,021 million; Level 2 $172 million; and Level 3 $6 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.follows:



8.     Disclosures about Segments and Related Information

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

Earnings After Income Tax

 

(millions of dollars)

 

 

Upstream

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

(238)

 

 

(477)

 

 

(439)

 

 

(1,823)

 

 

 

Non-U.S.

 

 

1,805

 

 

1,097

 

 

5,442

 

 

2,661

 

 

Downstream

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

391

 

 

225

 

 

1,030

 

 

824

 

 

 

Non-U.S.

 

 

1,141

 

 

1,004

 

 

3,003

 

 

2,136

 

 

Chemical

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

403

 

 

434

 

 

1,413

 

 

1,524

 

 

 

Non-U.S.

 

 

689

 

 

737

 

 

1,835

 

 

2,219

 

 

All other

 

 

(221)

 

 

(370)

 

 

(954)

 

 

(1,381)

 

 

Corporate total

 

 

3,970

 

 

2,650

 

 

11,330

 

 

6,160

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and Other Operating Revenue (1)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Upstream

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

2,282

 

 

2,152

 

 

6,955

 

 

5,373

 

 

 

Non-U.S.

 

 

3,736

 

 

3,177

 

 

10,865

 

 

9,371

 

 

Downstream

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

16,312

 

 

14,930

 

 

47,059

 

 

40,981

 

 

 

Non-U.S.

 

 

34,837

 

 

29,969

 

 

99,978

 

 

85,135

 

 

Chemical

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

2,589

 

 

2,474

 

 

8,119

 

 

7,377

 

 

 

Non-U.S.

 

 

4,646

 

 

4,049

 

 

13,313

 

 

11,970

 

 

All other

 

 

13

 

 

16

 

 

41

 

 

25

 

 

Corporate total

 

 

64,415

 

 

56,767

 

 

186,330

 

 

160,232

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1)

Includes sales-based taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenue

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Upstream

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

1,365

 

 

875

 

 

3,937

 

 

2,598

 

 

 

Non-U.S.

 

 

5,734

 

 

4,401

 

 

16,356

 

 

12,843

 

 

Downstream

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

3,134

 

 

2,775

 

 

10,621

 

 

8,057

 

 

 

Non-U.S.

 

 

5,866

 

 

4,903

 

 

16,048

 

 

13,514

 

 

Chemical

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

1,675

 

 

1,615

 

 

5,290

 

 

4,805

 

 

 

Non-U.S.

 

 

1,482

 

 

1,043

 

 

3,776

 

 

3,073

 

 

All other

 

 

51

 

 

60

 

 

154

 

 

174

 

 

 

 

 

At March 31, 2018

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Carrying

 

Fair Value

 

 

 

 

 

Value

 

Level 1

 

Level 2

 

Level 3

 

Total

Assets

 

 

 

 

 

 

 

 

 

 

 

Advances to/receivables from equity companies (included in

 

 

 

 

 

 

 

 

 

 

 

 

the Balance Sheet line: Investments, advances and

 

 

 

 

 

 

 

 

 

 

 

 

long-term receivables)

 

9,240

 

-

 

2,221

 

7,171

 

9,392

 

Other long-term financial assets (included in the Balance

 

 

 

 

 

 

 

 

 

 

 

 

Sheet lines: Investments, advances and long-term receivables

 

 

 

 

 

 

 

 

 

 

 

 

and Other assets, including intangibles – net)

 

1,695

 

742

 

-

 

976

 

1,718

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

 

 

 

Long-term debt (excluding capitalized lease obligations)

 

19,315

 

19,266

 

152

 

4

 

19,422

 

Long-term obligations to equity companies

 

4,818

 

-

 

-

 

5,058

 

5,058

 

Other long-term financial liabilities (included in the

 

 

 

 

 

 

 

 

 

 

 

 

Balance Sheet line: Other long-term obligations)

 

1,066

 

-

 

-

 

1,059

 

1,059


13 

 

9.     InterOil Corporation and Permian Basin Properties Acquisitions

InterOil Corporation

On February 22, 2017, the Corporation completed the acquisition of InterOil Corporation (IOC) for $2.7 billion. The IOC acquisition was unproved properties in Papua New Guinea. Consideration included 28 million shares of Exxon Mobil Corporation common stock having a value on the acquisition date of $2.2 billion, a Contingent Resource Payment (CRP) with a fair value of $0.3 billion and cash of $0.2 billion. The CRP provides IOC shareholders $7.07 per share in cash for each incremental independently certified Trillion Cubic Feet Equivalent (TCFE) of resources above 6.2 TCFE, up to 11.0 TCFE. IOC’s assets include a contingent receivable related to the same resource base for volumes in excess of 3.5 TCFE at amounts ranging from $0.24 - $0.40 per thousand cubic feet equivalent. The fair value of the contingent receivable was $1.1 billion at the acquisition date. Fair values of contingent amounts were based on assumptions about the outcome of the resource certification, future business plans and appropriate discount rates.

On September 6, 2017, the resource certification was finalized triggering both payment of the CRP to former IOC shareholders and receipt of the current portion of the contingent receivable. The earnings impact from settlement of the CRP and the related contingent receivable was not material.

Permian Basin Properties8.     Disclosures about Segments and Related Information

On February 28, 2017, the Corporation completed the acquisition for $6.2 billion of a number of companies from the Bass family in Fort Worth, Texas, that indirectly own mostly unproved oil and gas properties in the Permian Basin and other assets. Consideration included 68 million shares of Exxon Mobil Corporation common stock having a value on the acquisition date of $5.5 billion, together with additional contingent cash payments tied to future drilling and completion activities (up to a maximum of $1.02 billion). The fair value of the contingent payment was $0.7 billion as of the acquisition date and is expected to be paid beginning in 2020 and ending no later than 2032 commensurate with the development of the resource. Fair value of the contingent payment was based on assumptions including drilling and completion activities, appropriate discount rates and tax rates.

Below is a summary of the net assets acquired for each acquisition.

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

 

March 31,

 

 

 

 

 

 

 

2018

 

 

2017

 

Earnings After Income Tax

 

 

 

(millions of dollars)

 

 

Upstream

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

429

 

 

(18)

 

 

 

Non-U.S.

 

 

 

3,068

 

 

2,270

 

 

Downstream

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

319

 

 

292

 

 

 

Non-U.S.

 

 

 

621

 

 

824

 

 

Chemical

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

503

 

 

529

 

 

 

Non-U.S.

 

 

 

508

 

 

642

 

 

Corporate and financing (1) 

 

 

 

(798)

 

 

(529)

 

 

Corporate total

 

 

 

4,650

 

 

4,010

 

 

 

 

 

 

 

 

 

 

 

 

Sales and Other Operating Revenue

 

 

 

 

 

 

 

 

 

Upstream

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

2,361

 

 

2,324

 

 

 

Non-U.S.

 

 

 

3,628

 

 

3,509

 

 

Downstream

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

16,995

 

 

14,582

 

 

 

Non-U.S.

 

 

 

34,372

 

 

29,044

 

 

Chemical

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

2,989

 

 

2,783

 

 

 

Non-U.S.

 

 

 

5,078

 

 

4,218

 

 

Corporate and financing

 

 

 

13

 

 

14

 

 

Corporate total

 

 

 

65,436

 

 

56,474

 

 

 

 

 

 

 

 

 

 

 

 

Intersegment Revenue

 

 

 

 

 

 

 

 

 

Upstream

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

2,062

 

 

1,290

 

 

 

Non-U.S.

 

 

 

6,871

 

 

5,899

 

 

Downstream

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

4,944

 

 

3,646

 

 

 

Non-U.S.

 

 

 

7,089

 

 

5,214

 

 

Chemical

 

 

 

 

 

 

 

 

 

 

United States

 

 

 

2,194

 

 

1,770

 

 

 

Non-U.S.

 

 

 

1,843

 

 

1,190

 

 

Corporate and financing

 

 

 

49

 

 

56

 

 

 

 

 

IOC

 

Permian

 

 

 

 

(billions of dollars)

 

 

 

 

 

 

 

 

Current assets

 

 

0.6

 

-

 

Property, plant and equipment

 

 

2.9

 

6.3

 

Other

 

 

0.6

 

-

 

Total assets

 

 

4.1

 

6.3

 

 

 

 

 

 

 

 

Current liabilities

 

 

0.5

 

-

 

Long-term liabilities

 

 

0.9

 

0.1

 

Total liabilities

 

 

1.4

 

0.1

 

 

 

 

 

 

 

 

Net assets acquired

 

 

2.7

 

6.2



10.(1) Accounting for Suspended Exploratory Well Costs

ForSee Note 2 for additional details regarding the categorychange in segmentation of exploratory well costs at year-end 2016 that were suspended more than one year, a total of $240 million was expensed in the first nine months of 2017.Non-service pension and postretirement benefit expense.


14

 

Geographic

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

 

 

 

 

March 31,

 

Sales and Other Operating Revenue

 

 

2018

 

 

2017

 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

22,345

 

 

19,689

 

Non-U.S.

 

 

43,091

 

 

36,785

 

 

Total

 

 

65,436

 

 

56,474

 

 

 

 

 

 

 

 

 

 

 

Significant Non-U.S. revenue sources include:  (1) 

 

 

 

 

 

 

 

 

Canada

 

 

5,375

 

 

4,634

 

 

United Kingdom

 

 

4,672

 

 

4,135

 

 

Belgium

 

 

3,977

 

 

3,265

 

 

Singapore

 

 

3,427

 

 

2,751

 

 

France

 

 

3,245

 

 

2,568

 

 

Italy

 

 

3,154

 

 

2,669

 

 

Germany

 

 

2,231

 

 

2,004

(1) Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in Non‑U.S. operations where attribution to a specific country is not practicable.



9.     Additional Information on Revenue Recognition

Accounting Policy for Revenue Recognition

The Corporation generally sells crude oil, natural gas and petroleum and chemical products under short-term agreements at prevailing market prices. In some cases (e.g., natural gas), products may be sold under long-term agreements, with periodic price adjustments to reflect market conditions. Revenue is recognized at the amount the Corporation expects to receive when the customer has taken control, which is typically when title transfers and the customer has assumed the risks and rewards of ownership. The prices of certain sales are based on price indexes that are sometimes not available until the next period. In such cases, estimated realizations are accrued when the sale is recognized, and are finalized when the price is available. Such adjustments to revenue from performance obligations satisfied in previous periods are not significant. Payment for revenue transactions is typically due within 30 days. Future volume delivery obligations that are unsatisfied at the end of the period are expected to be fulfilled through ordinary production or purchases. These performance obligations are based on market prices at the time of the transaction and are fully constrained due to market price volatility.

“Sales and other operating revenue” and “Notes and accounts receivable” primarily arise from contracts with customers. Long-term receivables are primarily from non-customers. Contract assets are mainly from marketing assistance programs and are not significant. Contract liabilities are mainly customer prepayments and accruals of expected volume discounts and are not significant.


15 

 

   

EXXON MOBIL CORPORATION

 

Item 2.       Management's Discussion and Analysis of Financial Condition and Results of Operations

 

FUNCTIONAL EARNINGS SUMMARY

FUNCTIONAL EARNINGS SUMMARY

FUNCTIONAL EARNINGS SUMMARY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

First Three Months

Earnings (U.S. GAAP)

Earnings (U.S. GAAP)

 

 

2017

 

 

2016

 

2017

 

 

2016

Earnings (U.S. GAAP)

 

 

2018

 

 

2017

 

 

(millions of dollars)

 

 

 

(millions of dollars)

Upstream

Upstream

 

 

 

 

 

 

 

 

 

 

 

 

Upstream

 

 

 

 

 

 

United States

 

 

(238)

 

 

(477)

 

(439)

 

 

(1,823)

United States

 

 

429

 

 

(18)

Non-U.S.

 

 

1,805

 

 

1,097

 

5,442

 

 

2,661

Non-U.S.

 

 

3,068

 

 

2,270

Downstream

Downstream

 

 

 

 

 

 

 

 

 

 

 

Downstream

 

 

 

 

 

 

United States

 

 

391

 

 

225

 

1,030

 

 

824

United States

 

 

319

 

 

292

Non-U.S.

 

 

1,141

 

 

1,004

 

3,003

 

 

2,136

Non-U.S.

 

 

621

 

 

824

Chemical

Chemical

 

 

 

 

 

 

 

 

 

 

 

Chemical

 

 

 

 

 

 

United States

 

 

403

 

 

434

 

1,413

 

 

1,524

United States

 

 

503

 

 

529

Non-U.S.

 

 

689

 

 

737

 

1,835

 

 

2,219

Non-U.S.

 

 

508

 

 

642

Corporate and financing

 

 

(221)

 

 

(370)

 

(954)

 

 

(1,381)

Corporate and financing (1)

Corporate and financing (1)

 

 

(798)

 

 

(529)

Net income attributable to ExxonMobil (U.S. GAAP)

 

 

3,970

 

 

2,650

 

11,330

 

 

6,160

  Net income attributable to ExxonMobil (U.S. GAAP)

 

 

4,650

 

 

4,010

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars)

Earnings per common share (dollars)

 

 

0.93

 

 

0.63

 

2.66

 

 

1.47

Earnings per common share (dollars)

 

 

1.09

 

 

0.95

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars)

Earnings per common share - assuming dilution (dollars)

 

 

0.93

 

 

0.63

 

2.66

 

 

1.47

Earnings per common share - assuming dilution (dollars)

 

1.09

 

 

0.95

 

 

 

 

 

 

(1) See Note 2 to the financial statements for additional details regarding the change in segmentation of Non-service pension and postretirement benefit expense.

 

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 THIRDFIRST QUARTER 20172018 RESULTS

 

ExxonMobil’s thirdfirst quarter 20172018 earnings of $4were $4.7 billion, or $0.93 per diluted share, compared with $2.7 billion a year earlier, as commodity prices improved and performance in the Upstream and Downstream strengthened.

Earnings of $11.3 billion for the first nine months of 2017 increased 84 percent from $6.2 billion in 2016.

Earnings$1.09 per share assuming dilution, were $2.66.compared with $4 billion a year earlier. Increased commodity prices, coupled with a focus on operating efficiently and strengthening the portfolio, resulted in higher earnings and the highest cash flow from operations and asset sales since 2014.

 

CapitalThrough new discoveries and exploration expenditures were $14.1 billion, down 3 percent from 2016.

Oil‑equivalent production was 4 million barrels per day, down 1 percent fromacquired acreage, the prior year. Excluding entitlement effects and divestments, oil‑equivalent production was up 1 percent from the prior year.

Corporation has positioned its Upstream portfolio well for future growth. The Corporation distributed $9.7 billion in dividendsalso made good progress on plans to shareholders.


15

 

 

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

(millions of dollars)

Upstream earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

(238)

 

 

(477)

 

 

(439)

 

 

(1,823)

 

Non-U.S.

 

 

1,805

 

 

1,097

 

 

5,442

 

 

2,661

 

 

Total

 

 

1,567

 

 

620

 

 

5,003

 

 

838

Upstream earnings were $1,567 millionimprove the production mix and grow premium product sales in the third quarter of 2017, up $947 million from the third quarter of 2016. Higher liquidsDownstream and gas realizations increased earnings by $860 million. Higher volume and mix effects increased earnings by $20 million. All other items increased earnings by $70 million as lower expenses were partly offset by unfavorable foreign exchange effects.

On an oil-equivalent basis, production increased 2 percent from the third quarter of 2016. Liquids production totaled 2.3 million barrels per day, up 69,000 barrels per day as lower downtime and higher project volumes were partly offset by field decline. Natural gas production was 9.6 billion cubic feet per day, down 16 million cubic feet per day from 2016 as field decline and lower demand were partly offset by project ramp‑up, primarily in Australia, and work programs.

U.S. Upstream results were a loss of $238 million in the third quarter of 2017, compared to a loss of $477 million in the third quarter of 2016. Non‑U.S. Upstream earnings were $1,805 million, up $708 million from the prior year.

Upstream earnings were $5,003 million in the first nine months of 2017, up $4,165 million from 2016. Higher realizations increased earnings by $4.1 billion. Unfavorable volume and mix effects decreased earnings by $300 million. All other items increased earnings by $380 million, primarily due to lower expenses partly offset by unfavorable tax items in the current year.

On an oil‑equivalent basis, production of 4 million barrels per day was down 1 percent compared to 2016. Liquids production of 2.3 million barrels per day decreased 65,000 barrels per day as field decline and lower entitlements were partly offset by increased project volumes and work programs. Natural gas production of 10.1 billion cubic feet per day increased 106 million cubic feet per day from 2016 as project ramp‑up, primarily in Australia, was partly offset by field decline.

U.S. Upstream results were a loss of $439 million in 2017, compared to a loss of $1,823 million in 2016. Non‑U.S. Upstream earnings were $5,442 million, up $2,781 million from the prior year.Chemical businesses.


16 

 

 

 

 

 

Third Quarter

 

 

First Nine Months

Upstream additional information

 

 

 

(thousands of barrels daily)

 

Volumes reconciliation (Oil-equivalent production)(1) 

 

 

 

 

 

 

 

 

 

2016

 

 

 

3,811

 

 

 

 

4,030

 

 

Entitlements - Net Interest

 

 

 

(1)

 

 

 

 

-

 

 

Entitlements - Price / Spend / Other

 

 

 

(14)

 

 

 

 

(68)

 

 

Quotas

 

 

 

-

 

 

 

 

-

 

 

Divestments

 

 

 

(5)

 

 

 

 

(6)

 

 

Growth / Other

 

 

 

87

 

 

 

 

27

 

2017

 

 

 

3,878

 

 

 

 

3,983

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels.

 

 

 

 

 

 

 

First Three Months

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

(millions of dollars)

Upstream earnings

 

 

 

 

 

 

 

United States

 

 

429

 

 

(18)

 

Non-U.S.

 

 

3,068

 

 

2,270

 

 

Total

 

 

3,497

 

 

2,252

Upstream earnings were $3,497 million in the first quarter of 2018, up $1,245 million from the first quarter of 2017.

·Higher liquids and gas realizations increased earnings by $1,430 million.

·Lower volume and mix effects, including the impact from the Papua New Guinea earthquake, decreased earnings by $190 million.

·All other items increased earnings by $10 million, as the $366 million gain on the Scarborough sale in Australia was partially offset by higher expenses.

·U.S. Upstream earnings were $429 million, up $447 million from the prior year.

·Non‑U.S. Upstream earnings were $3,068 million, up $798 million from the prior year.

·On an oil‑equivalent basis, production decreased 6 percent from the first quarter of 2017.

·Liquids production totaled 2.2 million barrels per day, down 117,000 barrels per day as lower volumes from decline, entitlements, and divestments, were partially offset by growth in North America.

·Natural gas production was 10 billion cubic feet per day, down 870 million cubic feet per day driven by higher downtime, including impacts from the Papua New Guinea earthquake, lower entitlements, and base decline.


17

 

 

 

First Quarter

Upstream additional information

 

(thousands of barrels daily)

Volumes reconciliation (Oil-equivalent production) (1) 

 

 

 

 

2017

 

 

 

4,151

 

 

Entitlements - Net Interest

 

 

 

(3)

 

 

Entitlements - Price / Spend / Other

 

 

 

(70)

 

 

Quotas

 

 

 

-

 

 

Divestments

 

 

 

(53)

 

 

Growth / Other

 

 

 

(136)

 

2018

 

 

 

3,889

 

 

 

 

 

 

 

 

(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.

  


1718 

 

 

 

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

(millions of dollars)

Downstream earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

391

 

 

225

 

 

1,030

 

 

824

 

Non-U.S.

 

 

1,141

 

 

1,004

 

 

3,003

 

 

2,136

 

 

Total

 

 

1,532

 

 

1,229

 

 

4,033

 

 

2,960

 

 

 

 

 

First Three Months

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

(millions of dollars)

Downstream earnings

 

 

 

 

 

 

 

United States

 

 

319

 

 

292

 

Non-U.S.

 

 

621

 

 

824

 

 

Total

 

 

940

 

 

1,116

 

Downstream earnings were $1,532$940 million, up $303down $176 million from the thirdfirst quarter of 2016. Higher refining2017.

·Margins decreased earnings $30 million, as lower Non‑U.S. margins increased earningswere partially offset by $1 billion. Volumehigher U.S. margins.

·Lower volumes and mix effects, primarily reflecting lower throughput at the Joliet refinery in Illinois, decreased earnings by $160$60 million.

·All other items decreased earnings by $550$90 million, reflecting the absence of favorable asset managementas lower divestment gains of $380 million in the prior year from the sale of Canadian retail assets and higher expenses related to Hurricane Harvey. were partially offset by lower turnaround costs in the U.S.

·U.S. Downstream earnings were $319 million, up $27 million from the prior year.

·Non‑U.S. Downstream earnings were $621 million, down $203 million from the prior year.

·Petroleum product sales of 5.55.4 million barrels per day were 43,000 barrels per day lower than last year’s third quarter.

Earnings from the U.S. Downstream were $391 million, up $166 million from the third quarter of 2016. Non‑U.S. Downstream earnings of $1,141 million were $137 million higher than prior year.

Downstream earnings of $4,033 million in the first nine months of 2017 increased $1,073 million from 2016. Stronger refining and marketing margins increased earnings by $1.3 billion, while volume and mix effects increased earnings by $110 million. All other items decreased earnings by $290 million, mainly reflecting the absence of the Canadian retail assets sale. Petroleum product sales of 5.5 million barrels per day were 26,00037,000 barrels per day higher than 2016.

U.S. Downstream earnings were $1,030 million, an increase of $206 million from 2016. Non‑U.S. Downstream earnings were $3,003 million, up $867 million from the prior year.last year’s first quarter.



 

 

 

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

(millions of dollars)

Chemical earnings

 

 

 

 

 

 

 

 

 

 

 

 

 

United States

 

 

403

 

 

434

 

 

1,413

 

 

1,524

 

Non-U.S.

 

 

689

 

 

737

 

 

1,835

 

 

2,219

 

 

Total

 

 

1,092

 

 

1,171

 

 

3,248

 

 

3,743

 

 

 

 

 

First Three Months

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

(millions of dollars)

Chemical earnings

 

 

 

 

 

 

 

United States

 

 

503

 

 

529

 

Non-U.S.

 

 

508

 

 

642

 

 

Total

 

 

1,011

 

 

1,171

 

Chemical earnings of $1,092$1,011 million were $79$160 million lower than the thirdfirst quarter of 2016. 2017.

·Weaker margins decreased earnings by $200$270 million.

·Volume and mix effects increased earnings by $120 million. Third

·All other items decreased earnings by $10 million, as higher growth‑related expenses were partially offset by favorable foreign exchange impacts. 

·U.S. Chemical earnings were $503 million, down $26 million from the prior year.

·Non‑U.S. Chemical earnings were $508 million, down $134 million from the prior year.

·First quarter prime product sales of 6.46.7 million metric tons were 313,000596,000 metric tons, or 510 percent, higher than the prior year despite Hurricane Harvey impacts.

U.S. Chemical earnings of $403 million were $31 million lower than the third quarter of 2016. Non‑U.S. Chemical earnings of $689 million were $48 million lower than prior year.

Chemical earnings of $3,248 million for the first nine months of 2017 decreased $495 million from 2016. Weaker margins decreased earnings by $320 million. Volume and mix effects increased earnings by $70 million. All other items decreased earnings by $250 million, primarily due to higher expenses from increased turnaround activityproject growth and new business growth. Prime product sales of 18.6 million metric tons were up 22,000 metric tons from the first nine months of 2016.acquisitions.



 

U.S. Chemical earnings were $1,413 million, down $111 million from 2016. Non‑U.S. Chemical earnings of $1,835 million were $384 million lower than prior year.


18

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and financing earnings

 

 

(221)

 

 

(370)

 

 

(954)

 

 

(1,381)

 

 

 

 

 

First Three Months

 

 

 

 

 

2018

 

 

2017

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

Corporate and financing earnings

 

 

(798)

 

 

(529)

 

Corporate and financing expenses were $221$798 million for the thirdfirst quarter of 2018, up $269 million from the first quarter of 2017 down $149 million from the third quarter of 2016 mainly due to favorable impacts from the resolutionimpact of long‑standinga lower U.S. tax items.

Corporaterate, and higher pension and financing expenses were $954 million in the first nine months of 2017 compared to $1,381 million in 2016, with the decrease mainly due to favorable impacts from the resolution of long‑standing tax items.related costs.


19 

 

LIQUIDITY AND CAPITAL RESOURCESLIQUIDITY AND CAPITAL RESOURCES

LIQUIDITY AND CAPITAL RESOURCES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

 

First Three Months

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

2018

 

 

2017

 

 

 

(millions of dollars)

 

 

 

 

(millions of dollars)

Net cash provided by/(used in)

Net cash provided by/(used in)

 

 

 

 

 

 

 

 

 

 

 

 

Net cash provided by/(used in)

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

 

22,655

 

14,686

Operating activities

 

 

8,519

 

 

8,173

Investing activities

 

 

 

 

 

 

 

(9,194)

 

(10,731)

Investing activities

 

 

(1,859)

 

 

(3,761)

Financing activities

 

 

 

 

 

 

 

(13,293)

 

(2,547)

Financing activities

 

 

(5,742)

 

 

(3,246)

Effect of exchange rate changes

Effect of exchange rate changes

 

 

 

 

 

 

 

441

 

(20)

Effect of exchange rate changes

 

 

30

 

 

74

Increase/(decrease) in cash and cash equivalents

Increase/(decrease) in cash and cash equivalents

 

 

 

 

 

 

 

609

 

1,388

Increase/(decrease) in cash and cash equivalents

 

 

948

 

 

1,240

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents (at end of period)

Cash and cash equivalents (at end of period)

 

 

 

 

 

 

 

4,266

 

5,093

Cash and cash equivalents (at end of period)

 

 

4,125

 

 

4,897

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow from operations and asset sales

Cash flow from operations and asset sales

 

 

 

 

 

 

 

 

 

 

Cash flow from operations and asset sales

 

 

 

 

 

 

Net cash provided by operating activities (U.S. GAAP)

 

 

7,535

 

5,355

 

22,655

 

14,686

Net cash provided by operating activities (U.S. GAAP)

 

 

8,519

 

 

8,173

Proceeds associated with sales of subsidiaries, property,

 

 

 

 

 

 

 

 

 

Proceeds associated with sales of subsidiaries, property, plant & equipment,

 

 

 

 

 

 

plant & equipment, and sales and returns of investments

 

 

854

 

976

 

1,695

 

2,182

 

and sales and returns of investments

 

 

1,441

 

 

687

Cash flow from operations and asset sales

 

 

8,389

 

6,331

 

24,350

 

16,868

Cash flow from operations and asset sales

 

 

9,960

 

 

8,860

 

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 flow from operations and asset sales in the thirdfirst quarter of 20172018 was $8.4$10.0 billion, including asset sales of $0.9$1.4 billion, an increase of $2.1$1.1 billion from the comparable 20162017 period primarily due to higher earnings.earnings and increased proceeds from asset management activity.

 

Cash provided by operating activities totaled $22.7$8.5 billion for the first nine monthsquarter of 2017, $8.02018, $0.3 billion higher than 2016.2017. The major source of funds was net income including noncontrolling interests of $11.4$4.8 billion, an increase of $5.1$0.7 billion from the prior year period. The adjustment for the non-cashnoncash provision of $14.1$4.5 billion for depreciation and depletion decreased by $0.1 billion.was essentially in line with 2017. Changes in operational working capital decreasedincreased cash flows by $0.5$0.4 billion, in 2017 versus a reduction of $2.4down $0.4 billion in 2016.from the prior year period. All other items net decreased cash flows by $2.3$1.1 billion in 20172018 compared to a reduction of $3.5$1.2 billion in 2016.2017. See the Condensed Consolidated Statement of Cash Flows for additional details.

 

Investing activities for the first nine monthsquarter of 20172018 used net cash of $9.2$1.9 billion, a decrease of $1.5$1.9 billion compared to the prior year. Spending for additions to property, plant and equipment of $10.9$3.3 billion was $1.4$0.5 billion lowerhigher than 2016.2017. Proceeds from asset sales of $1.7$1.4 billion decreased $0.5increased $0.8 billion. Additional investmentsInvestments and advances were $2.0decreased $1.6 billion, an increaseprincipally reflecting the absence of $0.6 billion, and principally reflect the deposit into escrow of the maximum potential contingent consideration payable as a result of the acquisition of InterOil Corporation. Other investing activities including collection of advances increased cash flows by $2.0 billion, including the return of unused contingent consideration from the InterOil acquisition escrow, and were up $1.2 billion from the previous year.

Cash flow from operations and asset salesCorporation in the first nine months of 2017 was $24.4 billion, including asset sales of $1.7 billion, an increase of $7.5 billion from the comparable 2016 period primarily due to higher earnings.2017.

 

Net cash used by financing activities was $13.3$5.7 billion in the first nine monthsquarter of 2017,2018, an increase of $10.7$2.5 billion from 2016 mainly reflecting the absence2017. The net reduction in short and long term debt was $1.9 billion compared to a net addition of the Corporation’s issuance of $12.0$0.4 billion in long-term debt in the prior year.2017.

 

During the first nine monthsquarter of 2017,2018, Exxon Mobil Corporation purchased 65 million shares of its common stock for the treasury at a gross cost of $0.5$0.4 billion. These purchases were made to offset shares or units settled in shares issued in conjunction with the company’s benefit plans and programs. Shares outstanding increaseddecreased from 4,1484,239 million at year-end to 4,2374,234 million at the end of the thirdfirst quarter of 2017, mainly due to shares issued for the acquisitions of InterOil Corporation and of companies that hold acreage in the Permian Basin.2018. Purchases may be made both in the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.

 

The Corporation distributed a total of $3.3 billion to shareholders in the thirdfirst quarter of 20172018 through dividends.

 

Total cash and cash equivalents of $4.1 billion at the end of the first quarter of 2018 compared to $3.2 billion at year-end 2017.

Total debt at the end of the first quarter of 2018 was $40.6 billion compared to $42.3 billion at year-end 2017. The Corporation's debt to total capital ratio was 17.2 percent at the end of the first quarter of 2018 compared to 17.9 percent at year-end 2017.


20 

 

Total cash and cash equivalents of $4.3 billion at the end of the third quarter of 2017 compared to $5.1 billion at the end of the third quarter of 2016.

Total debt at the end of the third quarter of 2017 was $40.6 billion compared to $42.8 billion at year-end 2016. The Corporation's debt to total capital ratio was 17.7 percent at the end of the third quarter of 2017 compared to 19.7 percent at year-end 2016.

The Corporation has access to significant capacity of long-term and short-term liquidity. Internally generated funds are generally expected to cover financial requirements, supplemented by short-term and long-term debt as required.

 

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

TAXES

 

 

 

 

 

 

 

 

 

 

TAXES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

 

 

First Three Months

 

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

 

2018

 

 

2017

 

 

 

 

(millions of dollars)

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

Income taxes

 

 

1,498

 

337

 

4,218

 

1,001

 

Income taxes

 

 

2,457

 

 

1,828

 

Effective income tax rate

 

 

33

%

 

20

%

 

34

%

 

26

%

Effective income tax rate

 

 

40

%

 

38

%

 

Sales-based taxes

 

 

5,864

 

5,437

 

16,795

 

15,687

 

All other taxes and duties

 

 

7,488

 

7,054

 

21,561

 

21,076

 

Total other taxes and duties (1)

Total other taxes and duties (1)

 

 

8,815

 

 

7,629

 

 

Total

 

 

14,850

 

12,828

 

42,574

 

37,764

 

Total

 

 

11,272

 

 

9,457

 

 

Income, sales-based and all other(1) Includes “Other taxes and duties totaled $14.8duties” plus taxes that are included in “Production and manufacturing expenses” and “Selling, general and administrative expenses.”

Total taxes were $11.3 billion for the thirdfirst quarter of 2017,2018, an increase of $2.0$1.8 billion from 2016.2017. Income tax expense increased by $1.2$0.6 billion to $1.5$2.5 billion reflecting higher pre-tax income. The effective income tax rate was 3340 percent compared to 20 percent in the prior year period reflecting the effect of one-time tax items and a higher share of earnings in high tax jurisdictions. Sales-based taxes and all other taxes and duties increased by $0.8 billion to $13.3 billion as a result of higher sales realizations.

Income, sales-based and all other taxes and duties totaled $42.6 billion for the first nine months of 2017, an increase of $4.8 billion from 2016. Income tax expense increased by $3.2 billion to $4.2 billion reflecting higher pre-tax income. The effective income tax rate was 34 percent compared to 2638 percent in the prior year period due to a higher share of earnings in highhigher tax jurisdictions. Sales-based taxes and allTotal other taxes and duties increased by $1.6$1.2 billion to $38.4 billion as a result$8.8 billion.

During the first three months of higher sales realizations.2018, there were no significant changes to the Corporation’s reasonable estimates of the income tax effects reflected in 2017 for the changes in tax law and tax rate from the enactment of the U.S. Tax Cuts and Jobs Act and following guidance outlined in the SEC Staff Accounting Bulletin No. 118. The impact of tax law changes on the Corporation’s financial statements could differ from its estimates due to further analysis of the new law, regulatory guidance, technical corrections legislation, or guidance under U.S. GAAP. If significant changes occur, the Corporation will provide updated information in connection with future regulatory filings.

 

In the United States, the Corporation has various ongoing U.S. federal income tax positions at issue with the Internal Revenue Service (IRS) for tax years beginning in 2006. The IRS has asserted penalties associated with several of those positions. The Corporation has not recognized the penalties as an expense because the Corporation does not expect the penalties to be sustained under applicable law. The Corporation has filed a refund suit for tax years 2006-2009 in a U.S. federal district court with respect to the positions at issue for those years. Unfavorable resolution of all positions at issue with the IRS would not have a materially adverse effect on the Corporation’s net income or liquidity.


21 

 

CAPITAL AND EXPLORATION EXPENDITURESCAPITAL AND EXPLORATION EXPENDITURES

 

CAPITAL AND EXPLORATION EXPENDITURES

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Third Quarter

 

 

First Nine Months

 

 

 

 

First Three Months

 

 

 

 

2017

 

 

2016

 

 

2017

 

 

2016

 

 

 

 

2018

 

 

2017

 

 

 

(millions of dollars)

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Upstream (including exploration expenses)

Upstream (including exploration expenses)

 

 

3,175

 

3,072

 

 

9,080

 

 

10,970

 

Upstream (including exploration expenses)

 

 

3,759

 

 

3,119

 

Downstream

Downstream

 

 

611

 

589

 

 

1,742

 

 

1,759

 

Downstream

 

 

614

 

 

545

 

Chemical

Chemical

 

 

2,183

 

503

 

 

3,215

 

 

1,677

 

Chemical

 

 

465

 

 

497

 

Other

Other

 

 

18

 

26

 

 

44

 

 

69

 

Other

 

 

29

 

 

8

 

Total

 

 

5,987

 

4,190

 

 

14,081

 

 

14,475

 

Total

 

 

4,867

 

 

4,169

 

 

Capital and exploration expenditures in the thirdfirst quarter of 20172018 were $6$4.9 billion, including the Jurong aromatics plant acquisition.

Capital and exploration expenditures in the first nine months of 2017 were $14.1 billion, down 3up 17 percent from the first nine monthsquarter of 2016 due primarily to lower upstream major project spending partially offset by the Jurong aromatics plant acquisition.2017. The Corporation anticipates an investment level of $22$24 billion in 2017.2018. 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. See Part II. Other Information, Item 1. Legal Proceedings in this report for information concerning a civil penalty assessment related to this matter which the Corporation is contesting.



The Groningen field is operated by Nederlandse Aardolie Maatschappij (NAM), a Netherlands company owned 50 percent by affiliates of the Corporation. NAM has a 60 percent interest in the Groningen field. On March 29, 2018, the Dutch Cabinet notified Parliament of its intention to further reduce previously legislated Groningen gas extraction in response to seismic events over the last several years. Affiliates of the Corporation and their partners are actively in discussions with the government on the associated implementation measures. If the Cabinet’s intentions are implemented, the reduction to the Corporation’s proved reserves could be up to 0.8 billion oil-equivalent barrels. In addition, the seismic activity has yielded various claims. Where losses are probable and reasonably estimable, liabilities have been recorded. The Corporation does not expect these matters to have a material effect on the Corporation’s operations or financial condition. While the future production profile and other considerations related to the Groningen field could vary depending on a wide variety of factors, reduced gas extraction in the future is expected to result in lower reported production, earnings and cash flows than in recent years for the Corporation’s share of NAM.



RECENTLY ISSUED ACCOUNTING STANDARDS

 

In May 2014,Effective January 1, 2019, ExxonMobil will adopt the Financial Accounting Standards Board issued a newBoard’s standard, Revenue from Contracts with CustomersLeases (Topic 842). 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 expects to adopt the standard using the Modified Retrospective method, under which prior years’ results are not restated, but supplemental information on the impact of the new standard is provided for 2018 results. The Corporation continues to evaluate other areas of the standard, which are not expected to have a material effect on the Corporation’s financial statements.

In January 2016, the Financial Accounting Standards Board issued an updated standard, Financial Instruments—Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The standard requires investments in equity securities other than consolidated subsidiaries and equity method investments to be measured at fair value with changes in the fair value recognized through net income. Companies can elect a modified approach for equity securities that do not have a readily determinable fair value. ExxonMobil is evaluating the standard and its effect on the Corporation’s financial statements and plans to adopt it in 2018.

In March 2017, the Financial Accounting Standards Board issued an Accounting Standards Update, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The update requires the service cost component of net benefit costs to be reported in the same line of the income statement, as other compensation costs and the other components of net benefit costs (non-service costs) to be presented separately from the service cost component. Additionally, only the service cost component of net benefit costs will be eligible for capitalization. The update is required to be adopted beginning January 1, 2018. The Corporation expects to add a new line “Non-service pension and postretirement benefit expense” to its Consolidated Statement of Income. This line would reflect the non-service costs that were previously included in “Production and manufacturing expenses” and “Selling, general and administrative expenses”. The update is not expected to have a material impact on the Corporation’s financial statements. Beginning January 1, 2018, the Corporation expects to include all of the non-service costs in its Corporate and financing segment.

In February 2016, the Financial Accounting Standards Board issued a new standard, Leases.amended. 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. ExxonMobilThe Corporation is gathering and evaluating data and recently acquired a system to facilitate implementation. We are progressing an assessment of the standard and itsmagnitude of the effect on the Corporation’s financial statements and plans to adopt it in 2019. statements.


22 

 

   

CRITICAL ACCOUNTING ESTIMATES

As part of its annual planning and budgeting cycle which is completed in the fourth quarter each year, the Corporation develops crude and natural gas price outlooks as well as estimates of future costs and other factors necessary to complete its plan. Management’s price outlook and other factors, including factors such as operating costs, resource productivity, and capital efficiency, are re-assessed when facts and circumstances warrant but no less often than annually. To the extent any impairment testing may be required, management uses assumptions that are reasonable in relation to these factors in developing estimates of future cash flows. An asset group would be impaired if its estimated undiscounted cash flows were less than the asset’s carrying value, and impairment would be measured by the amount by which the carrying value exceeds fair value. Development of future undiscounted cash flow estimates requires significant management judgment, particularly in cases where an asset’s life is expected to extend decades into the future, and an important component of the estimate is management’s outlook on prices and other factors as noted above.

The Corporation has identified emerging trends such as increasing estimates of available natural gas supplies and ongoing reductions in costs of supply for natural gas. In the fourth quarter of 2017, the Corporation will incorporate the impacts of these trends and the resulting lower price outlook in its annual planning and budgeting cycle. Once complete, the Corporation expects to perform an impairment assessment for its North American natural gas asset groups utilizing the information developed as part of the planning and budgeting process. It is not practicable at this time to estimate the impact these trends would have on the undiscounted cash flows for individual asset groups or any resulting impairment charges. However these trends are likely to place the Corporation’s North American natural gas asset groups at risk for potential impairment. The Corporation will complete its analysis of relevant factors as discussed above and perform any necessary impairment testing in connection with the preparation of the Corporation’s year-end financial statements for inclusion in its 2017 Form 10-K.

FORWARD-LOOKING STATEMENTS

 

Statements relating to future plans, projections, events or conditions are forward-looking statements. Future results, including project plans, costs, timing, and capacities; efficiency gains; capital and exploration expenditures; production rates;business growth; integration benefits; resource recoveries; the impact of new technologies; potential impairment charges; and share purchase levels, could differ materially due to factors including: changes in oil, gas or petrochemical prices or other market or economic conditions affecting the oil, gas or petrochemical industries, including the scope and duration of economic recessions; the outcome of exploration and development efforts; timely completion of new projects; changes in law or government regulation, including tax and environmental requirements; the impact of fiscal and commercial terms and outcome of commercial negotiations; the results of research programs; changes in technical or operating conditions; actions of competitors; 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 20162017 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.


23



Item 3.  Quantitative and Qualitative Disclosures About Market Risk

 

Information about market risks for the ninethree months ended September 30, 2017,March 31, 2018, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2016.2017.



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 September 30, 2017.March 31, 2018. 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.


2423 

 

   

PART II.  OTHER INFORMATION

 

Item 1.  Legal Proceedings

  

As last reported in the Corporation’s Form 10-Q for the second quarterOn January 25, 2018, ExxonMobil Oil Corporation (EMOC) received a letter setting forth a potential settlement of 2016, in a matter related to the dischargepreviously issued notice of crude oilviolation from the Pegasus PipelineSouth Coast Air Quality Management District (SCAQMD) regarding EMOC’s former Torrance Refinery in Mayflower, Faulkner County, Arkansas,California. The SCAQMD contends that the Pipelinerefinery failed to adequately identify and Hazardous Materials Safety Administration (PHMSA) on October 1, 2015, issued a Final Order arising from a November 2013 Noticemeet the requirements concerning pumps, sumps and other equipment subject to SCAQMD leak detection, repair and reporting requirements over an extended period of Probable Violation alleging that ExxonMobil Pipeline Company (EMPCo) violated multiple federal Pipeline Safety Regulations. The Final Order imposed a penalty of $2,630,400, which EMPCo paid on April 21, 2016. On June 27, 2016, EMPCo filed an appeal with the U.S. Court of Appeals for the Fifth Circuit, contesting PHMSA’s regulatory findings and compliance order directives and seeking a refundtime prior to EMOC’s sale of the penalty paid. On August 14, 2017, the Fifth Circuit dismissed fiverefinery, in violation of the six violations EMPCo challenged from PHMSA’s final administrative order, and vacated $1,634,100 in associated penalties, which PHMSA must now refund to EMPCo. The Fifth Circuit also remanded the remaining violation back to PHMSA for re-calculation of the civil penalty previously imposed. 

As reported in the Corporation’s Form 10-Q for the second quarter of 2017, the United States District Court for the Southern District of Texas entered a revised judgment on April 26, 2017, in a citizen suit captioned Environment Texas Citizen Lobby, Inc. et al. v. Exxon Mobil Corporation, awarding approximately $20 million in civil penalties, payable to the United States Treasury. In the suit filed in December 2010, Environment Texas Citizen Lobby, Inc.SCAQMD rules and the Sierra Club, Lone Star Chapter, filed a citizen suitCalifornia Health and Safety Code provisions dealing with air quality. The SCAQMD is seeking declaratory and injunctive relief, penalties, attorney fees and litigation costs associated with alleged violations of Title V of the Clean Air Act. Plaintiffs alleged that ExxonMobil repeatedly violated, and will continue to violate, its air operating permits, the Texas State Implementation Plan and the Clean Air Act by emitting air pollutants into the atmosphere from the Baytown complex in excess of applicable emission limitations or otherwise without authorization at$100,000 to resolve the Baytown, Texas, refinery, chemical plant and olefins plant. ExxonMobil filed its appeal of the judgmentmatter. EMOC is in the U.S. Court of Appeals for the Fifth Circuit on August 25, 2017.

As reported in the Corporation’s Form 10-Q for the first quarter of 2016, the company has been insettlement discussions with the United States Department of Justice (DOJ)SCAQMD, and the parties have entered into a tolling agreement to facilitate settlement discussions.

On March 26, 2018, the Corporation received a proposed agreed order from the Texas Commission on Environmental Protection Agency (EPA) to resolve claims of non-compliance with the Clean Air ActQuality (TCEQ), dated March 15, 2018, related to flaring at its eight U.S. chemical facilities with flares.routine Title V air operating permit investigations conducted by the TCEQ in 2017 of the Baytown Refinery in Texas. The EPA has allegedproposed agreed order alleges that the sitesrefinery failed to properly operate andauthorize, monitor, flares. ExxonMobil Chemical Company has reached a settlement agreement with the DOJ, the EPA and the Louisiana Department of Environmental Quality to resolve these claims. The complaint and the consent decree are expected to be filed in the U.S. District Court for the Southern District of Texas. The company has agreed to pay a penalty of $2,500,000,or keep records on certain equipment and to pay $2,572,000 to fund supplemental environmental projects.comply with certain flare or fuel gas monitoring system availability requirements or concentration limits. The company has also agreed to make investmentsadministrative penalty proposed by the TCEQ is in new equipment atexcess of $100,000. ExxonMobil is evaluating the facilities.proposal and alleged violations.

 

As reported in the Corporation’s Form 10-Q for the second quarter of 2017, on July 20, 2017, the United States Department of Treasury, Office of Foreign Assets Control (OFAC) assessed a civil penalty against Exxon Mobil Corporation, ExxonMobil Development Company and ExxonMobil Oil Corporation for violating the Ukraine-Related Sanctions Regulations, 31 C.F.R. part 589. The assessed civil penalty is in the amount of $2,000,000. ExxonMobil and its affiliates have been and continue to be in compliance with all sanctions and disagree that any violation has occurred. ExxonMobil and its affiliates have filed a complaint on July 20, 2017, in the United States Federal District Court, Northern District of Texas seeking judicial review of, and to enjoin, the civil penalty under the Administrative Procedures Act and the United States Constitution, including on the basis that it represents an arbitrary and capricious action by OFAC and a violation of the Company’s due process rights.

 

Refer to the relevant portions of Note 3 of this Quarterly Report on Form 10-Q for further information on legal proceedings.


2524 

 

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

Issuer Purchase of Equity Securities for Quarter Ended September 30, 2017

Total Number of

Maximum Number

Shares Purchased

of Shares that May

Total Number

Average

as Part of Publicly

Yet Be Purchased

of Shares

Price Paid

Announced Plans

Under the Plans or

Period

Purchased

per Share

or Programs

Programs

July 2017

-

-

August 2017

-

-

September 2017

-

-

Total

-

-

(See Note 1)

During the third quarter, the Corporation did not purchase any shares of its common stock for the treasury.

Note 1 - On August 1, 2000, the Corporation announced its intention to resume purchases of shares of its common stock for the treasury both to offset shares issued in conjunction with company benefit plans and programs and to gradually reduce the number of shares outstanding. The announcement did not specify an amount or expiration date. The Corporation has continued to purchase shares since this announcement and to report purchased volumes in its quarterly earnings releases. In its earnings release dated February 2, 2016, the Corporation stated it will continue to acquire shares to offset dilution in conjunction with benefit plans and programs, but had suspended making purchases to reduce shares outstanding effective beginning the first quarter of 2016.

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

Issuer Purchase of Equity Securities for Quarter Ended March 31, 2018

Total Number of

Maximum Number

Shares Purchased

of Shares that May

Total Number

Average

as Part of Publicly

Yet Be Purchased

of Shares

Price Paid

Announced Plans

Under the Plans or

Period

Purchased

per Share

or Programs

Programs

January 2018

1,856,228

$87.26

1,856,228

February 2018

1,663,186

$78.00

1,663,186

March 2018

1,792,886

$74.56

1,792,886

Total

5,312,300

$80.08

5,312,300

(See Note 1)

Note 1 - On August 1, 2000, the Corporation announced its intention to resume purchases of shares of its common stock for the treasury both to offset shares issued in conjunction with company benefit plans and programs and to gradually reduce the number of shares outstanding. The announcement did not specify an amount or expiration date. The Corporation has continued to purchase shares since this announcement and to report purchased volumes in its quarterly earnings releases. In its earnings release dated February 2, 2016, the Corporation stated it will continue to acquire shares to offset dilution in conjunction with benefit plans and programs, but had suspended making purchases to reduce shares outstanding effective beginning the first quarter of 2016.



Item 6.  Exhibits

 

See Index to Exhibits of this report.


2625 

 

   

INDEX TO EXHIBITS

 

 

Exhibit

 

Description

 

 

 

3(ii)

By-Laws, as revised effective November 1, 2017 (incorporated by reference to Exhibit 3(ii) to the Registrant’s Report on Form 8-K of October 31, 2017).

31.1

 

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer.

31.2

 

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Financial Officer.

31.3

 

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer.

32.1

 

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer.

32.2

 

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Financial Officer.

32.3

 

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer.

101

 

Interactive Data Files.


2726 

 

   

EXXON MOBIL CORPORATION

 

SIGNATURE

 

 

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

 

 

 

EXXON MOBIL CORPORATION

 

Date: November 1, 2017May 3, 2018 

By:

/s/  DAVID S. ROSENTHAL

 

 

David S. Rosenthal

 

 

Vice President, Controller and

 

 

Principal Accounting Officer

 

 

 

 


2827