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 June 30,March 31, 20192020
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to________
Commission File Number 1-2256
Exxon Mobil Corporation
(Exact name of registrant as specified in its charter)
New Jersey |
| 13-5409005 |
(State or other jurisdiction of |
| (I.R.S. Employer |
incorporation or organization) |
| Identification Number) |
5959 Las Colinas Boulevard, Irving, Texas 75039-2298
(Address of principal executive offices) (Zip Code)
(972) 940-6000
(Registrant's telephone number, including area code)
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Securities registered pursuant to Section 12(b) of the Act:
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| Name of Each Exchange |
Title of Each Class |
| Trading Symbol |
| on Which Registered |
Common Stock, without par value |
| XOM |
| New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer | ☑ | Accelerated filer | ☐ |
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Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
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| 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 |
Common stock, without par value |
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EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019MARCH 31, 2020
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
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Item 1.Financial Statements |
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Condensed Consolidated Statement of Income Three | 3 |
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Condensed Consolidated Statement of Comprehensive Income Three | 4 |
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Condensed Consolidated Balance Sheet As of | 5 |
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Condensed Consolidated Statement of Cash Flows
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Condensed Consolidated Statement of Changes in Equity Three months ended | 7 |
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Notes to Condensed Consolidated Financial Statements |
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Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations |
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Item 3.Quantitative and Qualitative Disclosures About Market Risk |
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Item 4.Controls and Procedures |
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PART II. OTHER INFORMATION
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Item 1.Legal Proceedings |
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Item 1A.Risk Factors | 25 |
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Item 2.Unregistered Sales of Equity Securities and Use of Proceeds |
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Item 6.Exhibits |
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Index to Exhibits |
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Signature |
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2
PART I. FINANCIAL INFORMATION | PART I. FINANCIAL INFORMATION | PART I. FINANCIAL INFORMATION |
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Item 1. Financial Statements | Item 1. Financial Statements | Item 1. Financial Statements |
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EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION |
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CONDENSED CONSOLIDATED STATEMENT OF INCOME | CONDENSED CONSOLIDATED STATEMENT OF INCOME | CONDENSED CONSOLIDATED STATEMENT OF INCOME |
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(millions of dollars) | (millions of dollars) | (millions of dollars) |
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| Three Months Ended |
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| Six Months Ended |
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| Three Months Ended |
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| June 30, |
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| June 30, |
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| March 31, |
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| 2019 |
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| 2018 |
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| 2019 |
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| 2018 |
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| 2020 |
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| 2019 |
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Revenues and other income | Revenues and other income |
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| Revenues and other income |
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| Sales and other operating revenue |
| 67,491 |
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| 71,456 |
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| 129,137 |
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| 136,892 | Sales and other operating revenue |
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| 55,134 |
| 61,646 |
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| Income from equity affiliates |
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| 1,359 |
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| 1,729 |
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| 3,068 |
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| 3,639 | Income from equity affiliates |
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| 775 |
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| 1,709 |
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| Other income |
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| 241 |
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| 316 |
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| 511 |
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| 1,181 | Other income |
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| 249 |
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| 270 |
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| Total revenues and other income |
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| 69,091 |
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| 73,501 |
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| 132,716 |
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| 141,712 |
| Total revenues and other income |
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| 56,158 |
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| 63,625 |
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Costs and other deductions | Costs and other deductions |
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| Costs and other deductions |
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| Crude oil and product purchases |
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| 38,942 |
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| 41,327 |
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| 73,743 |
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| 77,615 | Crude oil and product purchases |
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| 32,083 |
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| 34,801 |
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| Production and manufacturing expenses |
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| 9,522 |
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| 8,918 |
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| 18,492 |
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| 17,409 | Production and manufacturing expenses |
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| 8,297 |
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| 8,970 |
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| Selling, general and administrative expenses |
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| 2,827 |
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| 2,993 |
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| 5,597 |
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| 5,740 | Selling, general and administrative expenses |
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| 2,579 |
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| 2,770 |
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| Depreciation and depletion |
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| 4,631 |
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| 4,589 |
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| 9,202 |
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| 9,059 | Depreciation and depletion |
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| 5,819 |
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| 4,571 |
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| Exploration expenses, including dry holes |
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| 333 |
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| 332 |
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| 613 |
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| 619 | Exploration expenses, including dry holes |
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| 288 |
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| 280 |
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| Non-service pension and postretirement benefit expense |
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| 313 |
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| 308 |
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| 671 |
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| 645 | Non-service pension and postretirement benefit expense |
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| 269 |
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| 358 |
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| Interest expense |
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| 216 |
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| 147 |
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| 397 |
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| 351 | Interest expense |
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| 249 |
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| 181 |
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| Other taxes and duties |
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| 7,675 |
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| 8,375 |
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| 15,080 |
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| 16,522 | Other taxes and duties |
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| 6,832 |
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| 7,405 |
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| Total costs and other deductions |
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| 64,459 |
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| 66,989 |
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| 123,795 |
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| 127,960 |
| Total costs and other deductions |
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| 56,416 |
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| 59,336 |
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Income before income taxes |
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| 4,632 |
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| 6,512 |
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| 8,921 |
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| 13,752 | |||||||||||
Income (Loss) before income taxes | Income (Loss) before income taxes |
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| (258) |
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| 4,289 |
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| Income taxes |
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| 1,241 |
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| 2,526 |
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| 3,124 |
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| 4,983 | Income taxes |
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| 512 |
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| 1,883 |
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Net income including noncontrolling interests |
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| 3,391 |
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| 3,986 |
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| 5,797 |
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| 8,769 | |||||||||||
Net income (loss) including noncontrolling interests | Net income (loss) including noncontrolling interests |
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| (770) |
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| 2,406 |
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| Net income attributable to noncontrolling interests |
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| 261 |
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| 36 |
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| 317 |
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| 169 | Net income (loss) attributable to noncontrolling interests |
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| (160) |
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| 56 |
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Net income attributable to ExxonMobil |
| 3,130 |
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| 3,950 |
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| 5,480 |
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| 8,600 | ||||||||||||
Net income (loss) attributable to ExxonMobil | Net income (loss) attributable to ExxonMobil |
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| (610) |
| 2,350 |
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Earnings per common share (dollars) |
| 0.73 |
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| 0.92 |
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| 1.28 |
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| 2.01 | ||||||||||||
Earnings (Loss) per common share (dollars) | Earnings (Loss) per common share (dollars) |
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| (0.14) |
| 0.55 |
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Earnings per common share - assuming dilution (dollars) |
| 0.73 |
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| 0.92 |
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| 1.28 |
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| 2.01 | ||||||||||||
Earnings (Loss) per common share - assuming dilution (dollars) | Earnings (Loss) per common share - assuming dilution (dollars) |
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| (0.14) |
| 0.55 |
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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) | |||||||||||||||
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| Three Months Ended |
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| Six Months Ended | ||||||
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| June 30, |
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| June 30, | ||||||
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| 2019 |
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| 2018 |
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| 2019 |
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| 2018 |
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Net income including noncontrolling interests |
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| 3,391 |
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| 3,986 |
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| 5,797 |
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| 8,769 | |||
Other comprehensive income (net of income taxes) |
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| Foreign exchange translation adjustment |
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| 600 |
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| (2,040) |
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| 1,349 |
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| (2,844) | ||
| Adjustment for foreign exchange translation (gain)/loss |
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| included in net income |
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| - |
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| 18 |
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| 186 |
| Postretirement benefits reserves adjustment |
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| (excluding amortization) |
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| (34) |
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| 43 |
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| (60) |
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| (391) |
| Amortization and settlement of postretirement benefits reserves |
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| adjustment included in net periodic benefit costs |
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| 141 |
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| 229 |
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| 326 |
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| 466 |
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| Total other comprehensive income |
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| 707 |
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| (1,750) |
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| 1,615 |
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| (2,583) | |
Comprehensive income including noncontrolling interests |
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| 4,098 |
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| 2,236 |
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| 7,412 |
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| 6,186 | |||
| Comprehensive income attributable to |
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| noncontrolling interests |
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| 391 |
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| (97) |
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| 573 |
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| (106) |
Comprehensive income attributable to ExxonMobil |
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| 3,707 |
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| 2,333 |
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| 6,839 |
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| 6,292 |
EXXON MOBIL CORPORATION |
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CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
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(millions of dollars) |
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| Three Months Ended |
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| March 31, |
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| 2020 |
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| 2019 |
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| Net income (loss) including noncontrolling interests |
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| (770) |
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| 2,406 |
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| Other comprehensive income (loss) (net of income taxes) |
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| Foreign exchange translation adjustment |
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| (5,649) |
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| 749 |
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| Postretirement benefits reserves adjustment (excluding amortization) |
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| 87 |
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| (26) |
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| Amortization and settlement of postretirement benefits reserves adjustment |
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| included in net periodic benefit costs |
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| 204 |
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| 185 |
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| Total other comprehensive income (loss) |
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| (5,358) |
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| 908 |
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| Comprehensive income (loss) including noncontrolling interests |
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| (6,128) |
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| 3,314 |
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| Comprehensive income (loss) attributable to noncontrolling interests |
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| (672) |
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| 182 |
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| Comprehensive income (loss) attributable to ExxonMobil |
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| (5,456) |
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| 3,132 |
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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 |
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CONDENSED CONSOLIDATED BALANCE SHEET | CONDENSED CONSOLIDATED BALANCE SHEET |
| CONDENSED CONSOLIDATED BALANCE SHEET |
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(millions of dollars) | (millions of dollars) |
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| June 30, |
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| Dec. 31, |
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| Mar. 31, |
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| Dec. 31, |
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| 2019 |
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| 2018 |
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| 2020 |
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| 2019 |
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Assets | Assets |
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| Assets |
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| Current assets |
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| Current assets |
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| Cash and cash equivalents |
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| 4,213 |
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| 3,042 |
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| Cash and cash equivalents |
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| 11,412 |
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| 3,089 |
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| Notes and accounts receivable – net |
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| 27,132 |
| 24,701 |
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| Notes and accounts receivable – net |
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| 20,871 |
| 26,966 |
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| Inventories |
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| Inventories |
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| Crude oil, products and merchandise |
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| 14,379 |
| 14,803 |
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| Crude oil, products and merchandise |
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| 12,067 |
| 14,010 |
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| Materials and supplies |
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| 4,456 |
| 4,155 |
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| Materials and supplies |
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| 4,434 |
| 4,518 |
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| Other current assets |
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| 1,563 |
| 1,272 |
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| Other current assets |
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| 1,465 |
| 1,469 |
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| Total current assets |
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| 51,743 |
| 47,973 |
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| Total current assets |
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| 50,249 |
| 50,052 |
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| Investments, advances and long-term receivables |
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| 42,533 |
| 40,790 |
| Investments, advances and long-term receivables |
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| 42,981 |
| 43,164 |
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| Property, plant and equipment – net |
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| 250,853 |
| 247,101 |
| Property, plant and equipment – net |
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| 248,409 |
| 253,018 |
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| Other assets, including intangibles – net |
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| 15,600 |
| 10,332 |
| Other assets, including intangibles – net |
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| 14,165 |
| 16,363 |
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| Total assets |
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| 360,729 |
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| 346,196 |
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| Total assets |
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| 355,804 |
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| 362,597 |
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Liabilities | Liabilities |
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| Liabilities |
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| Current liabilities |
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| Current liabilities |
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| Notes and loans payable |
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| 26,195 |
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| 17,258 |
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| Notes and loans payable |
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| 27,755 |
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| 20,578 |
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| Accounts payable and accrued liabilities |
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| 41,480 |
| 37,268 |
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| Accounts payable and accrued liabilities |
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| 35,815 |
| 41,831 |
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| Income taxes payable |
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| 2,612 |
| 2,612 |
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| Income taxes payable |
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| 1,203 |
| 1,580 |
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| Total current liabilities |
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| 70,287 |
| 57,138 |
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| Total current liabilities |
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| 64,773 |
| 63,989 |
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| Long-term debt |
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| 19,001 |
| 20,538 |
| Long-term debt |
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| 31,857 |
| 26,342 |
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| Postretirement benefits reserves |
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| 19,822 |
| 20,272 |
| Postretirement benefits reserves |
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| 21,913 |
| 22,304 |
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| Deferred income tax liabilities |
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| 26,846 |
| 27,244 |
| Deferred income tax liabilities |
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| 24,863 |
| 25,620 |
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| Long-term obligations to equity companies |
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| 4,181 |
| 4,382 |
| Long-term obligations to equity companies |
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| 4,024 |
| 3,988 |
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| Other long-term obligations |
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| 22,127 |
| 18,094 |
| Other long-term obligations |
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| 19,631 |
| 21,416 |
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| Total liabilities |
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| 162,264 |
| 147,668 |
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| Total liabilities |
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| 167,061 |
| 163,659 |
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Commitments and contingencies (Note 3) | Commitments and contingencies (Note 3) |
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| - |
| - |
| Commitments and contingencies (Note 3) |
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| - |
| - |
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Equity | Equity |
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| Equity |
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| Common stock without par value |
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| Common stock without par value |
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| (9,000 million shares authorized, 8,019 million shares issued) |
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| 15,639 |
| 15,258 |
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| (9,000 million shares authorized, 8,019 million shares issued) |
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| 15,636 |
| 15,637 |
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| Earnings reinvested |
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| 419,913 |
| 421,653 |
| Earnings reinvested |
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| 416,919 |
| 421,341 |
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| Accumulated other comprehensive income |
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| (18,205) |
| (19,564) |
| Accumulated other comprehensive income |
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| (24,339) |
| (19,493) |
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| Common stock held in treasury |
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| Common stock held in treasury |
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| (3,788 million shares at June 30, 2019 and |
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| (3,791 million shares at March 31, 2020 and |
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| 3,782 million shares at December 31, 2018) |
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| (225,970) |
| (225,553) |
|
| 3,785 million shares at December 31, 2019) |
|
| (226,137) |
| (225,835) |
| ||||
|
|
| ExxonMobil share of equity |
|
| 191,377 |
| 191,794 |
|
|
| ExxonMobil share of equity |
|
| 182,079 |
| 191,650 |
| ||
| Noncontrolling interests |
|
| 7,088 |
| 6,734 |
| Noncontrolling interests |
|
| 6,664 |
| 7,288 |
| ||||||
|
|
| Total equity |
|
| 198,465 |
| 198,528 |
|
|
| Total equity |
|
| 188,743 |
| 198,938 |
| ||
|
|
| Total liabilities and equity |
|
| 360,729 |
|
| 346,196 |
|
|
| Total liabilities and equity |
|
| 355,804 |
|
| 362,597 |
|
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) |
| ||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||||
|
|
|
|
| Six Months Ended |
|
|
|
|
| Three Months Ended |
| ||||||||
|
|
|
|
| June 30, |
|
|
|
|
| March 31, |
| ||||||||
|
|
|
|
| 2019 |
| 2018 |
|
|
|
|
| 2020 |
| 2019 |
| ||||
Cash flows from operating activities | Cash flows from operating activities |
|
|
|
|
|
|
| Cash flows from operating activities |
|
|
|
|
|
|
| ||||
| Net income (loss) including noncontrolling interests |
|
| (770) |
|
| 2,406 |
| ||||||||||||
| Net income including noncontrolling interests |
|
| 5,797 |
|
| 8,769 |
| Depreciation and depletion |
|
| 5,819 |
|
| 4,571 |
| ||||
| Depreciation and depletion |
|
| 9,202 |
|
| 9,059 |
| Noncash inventory adjustment - lower of cost or market |
|
| 2,245 |
|
| - |
| ||||
| Changes in operational working capital, excluding cash and debt |
|
| 1,014 |
|
| (982) |
| Changes in operational working capital, excluding cash and debt |
|
| (942) |
|
| 2,257 |
| ||||
| All other items – net |
|
| (1,728) |
|
| (547) |
| All other items – net |
|
| (78) |
|
| (896) |
| ||||
|
| Net cash provided by operating activities |
|
| 14,285 |
|
| 16,299 |
|
| Net cash provided by operating activities |
|
| 6,274 |
|
| 8,338 |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Cash flows from investing activities | Cash flows from investing activities |
|
|
|
|
|
|
| Cash flows from investing activities |
|
|
|
|
|
| |||||
| Additions to property, plant and equipment |
|
| (11,372) |
|
| (8,276) |
| Additions to property, plant and equipment |
|
| (5,945) |
|
| (5,199) |
| ||||
| 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 |
|
| 140 |
|
| 1,748 |
|
| equipment, and sales and returns of investments |
|
| 86 |
|
| 107 |
| ||
| Additional investments and advances |
|
| (1,730) |
|
| (704) |
| Additional investments and advances |
|
| (728) |
|
| (910) |
| ||||
| Other investing activities including collection of advances |
|
| 292 |
|
| 277 |
| Other investing activities including collection of advances |
|
| 220 |
|
| 209 |
| ||||
|
| Net cash used in investing activities |
|
| (12,670) |
|
| (6,955) |
|
| Net cash used in investing activities |
|
| (6,367) |
|
| (5,793) |
| ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Cash flows from financing activities | Cash flows from financing activities |
|
|
|
|
|
|
| Cash flows from financing activities |
|
|
|
|
|
| |||||
| Additions to long-term debt |
|
| 43 |
|
| - |
| Additions to long-term debt |
|
| 8,466 |
|
| - |
| ||||
| Reductions in short-term debt |
|
| (3,805) |
|
| (4,256) |
| Reductions in long-term debt |
|
| (2) |
|
| - |
| ||||
| Additions/(reductions) in commercial paper, and debt with three |
|
|
|
|
|
|
| Reductions in short-term debt |
|
| (1,533) |
|
| (3,777) |
| ||||
|
| months or less maturity (1) |
|
| 11,126 |
|
| 2,902 |
| Additions/(reductions) in commercial paper, and debt with three |
|
|
|
|
|
| ||||
| Cash dividends to ExxonMobil shareholders |
|
| (7,220) |
|
| (6,793) |
|
| months or less maturity (1) |
|
| 5,829 |
|
| 6,776 |
| |||
| Cash dividends to noncontrolling interests |
|
| (100) |
|
| (135) |
| Cash dividends to ExxonMobil shareholders |
|
| (3,719) |
|
| (3,505) |
| ||||
| Changes in noncontrolling interests |
|
| (119) |
|
| (275) |
| Cash dividends to noncontrolling interests |
|
| (45) |
|
| (43) |
| ||||
| Common stock acquired |
|
| (421) |
|
| (429) |
| Changes in noncontrolling interests |
|
| 94 |
|
| (74) |
| ||||
|
| Net cash used in financing activities |
|
| (496) |
|
| (8,986) |
| Common stock acquired |
|
| (305) |
|
| (421) |
| |||
|
| Net cash used in financing activities |
|
| 8,785 |
|
| (1,044) |
| |||||||||||
Effects of exchange rate changes on cash | Effects of exchange rate changes on cash |
|
| 52 |
|
| (105) |
| Effects of exchange rate changes on cash |
|
| (369) |
|
| 43 |
| ||||
Increase/(decrease) in cash and cash equivalents | Increase/(decrease) in cash and cash equivalents |
|
| 1,171 |
|
| 253 |
| Increase/(decrease) in cash and cash equivalents |
|
| 8,323 |
|
| 1,544 |
| ||||
Cash and cash equivalents at beginning of period | Cash and cash equivalents at beginning of period |
|
| 3,042 |
|
| 3,177 |
| Cash and cash equivalents at beginning of period |
|
| 3,089 |
|
| 3,042 |
| ||||
Cash and cash equivalents at end of period | Cash and cash equivalents at end of period |
|
| 4,213 |
|
| 3,430 |
| Cash and cash equivalents at end of period |
|
| 11,412 |
|
| 4,586 |
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Supplemental Disclosures | Supplemental Disclosures |
|
|
|
|
|
|
| Supplemental Disclosures |
|
|
|
|
|
| |||||
| Income taxes paid |
|
| 3,884 |
|
| 4,426 |
| Income taxes paid |
|
| 1,372 |
|
| 1,793 |
| ||||
| Cash interest paid |
|
|
|
|
|
|
| Cash interest paid |
|
|
|
|
|
| |||||
|
| Included in cash flows from operating activities |
|
| 277 |
|
| 144 |
|
| Included in cash flows from operating activities |
|
| 313 |
|
| 247 |
| ||
|
| Capitalized, included in cash flows from investing activities |
|
| 355 |
|
| 333 |
|
| Capitalized, included in cash flows from investing activities |
|
| 155 |
|
| 175 |
| ||
|
| Total cash interest paid |
|
| 632 |
|
| 477 |
|
| Total cash interest paid |
|
| 468 |
|
| 422 |
|
(1) Includes a net addition of commercial paper with a maturity of over three months of $6.5$8.2 billion in 20192020 and $0.9$5.3 billion in 2018.2019. The gross amount of commercial paper with a maturity of over three months issued was $12.3$13.1 billion in 20192020 and $2.2$6.4 billion in 2018,2019, while the gross amount repaid was $5.8$4.9 billion in 20192020 and $1.3$1.1 billion in 2018.2019.
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 March 31, 2018 |
|
| 14,888 |
|
| 415,970 |
|
| (16,992) |
|
| (225,671) |
|
| 188,195 |
|
| 6,716 |
|
| 194,911 | |||
| Amortization of stock-based awards |
|
| 199 |
|
| - |
|
| - |
|
| - |
|
| 199 |
|
| - |
|
| 199 | ||
| Other |
|
| (1) |
|
| - |
|
| - |
|
| - |
|
| (1) |
|
| (7) |
|
| (8) | ||
| Net income for the period |
|
| - |
|
| 3,950 |
|
| - |
|
| - |
|
| 3,950 |
|
| 36 |
|
| 3,986 | ||
| Dividends - common shares |
|
| - |
|
| (3,502) |
|
| - |
|
| - |
|
| (3,502) |
|
| (92) |
|
| (3,594) | ||
| Other comprehensive income |
|
| - |
|
| - |
|
| (1,617) |
|
| - |
|
| (1,617) |
|
| (133) |
|
| (1,750) | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| (2) |
|
| (2) |
|
| (209) |
|
| (211) | ||
Balance as of June 30, 2018 |
|
| 15,086 |
|
| 416,418 |
|
| (18,609) |
|
| (225,673) |
|
| 187,222 |
|
| 6,311 |
|
| 193,533 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance as of March 31, 2019 |
|
| 15,476 |
|
| 420,498 |
|
| (18,782) |
|
| (225,970) |
|
| 191,222 |
|
| 6,799 |
|
| 198,021 | |||
| Amortization of stock-based awards |
|
| 166 |
|
| - |
|
| - |
|
| - |
|
| 166 |
|
| - |
|
| 166 | ||
| Other |
|
| (3) |
|
| - |
|
| - |
|
| - |
|
| (3) |
|
| - |
|
| (3) | ||
| Net income for the period |
|
| - |
|
| 3,130 |
|
| - |
|
| - |
|
| 3,130 |
|
| 261 |
|
| 3,391 | ||
| Dividends - common shares |
|
| - |
|
| (3,715) |
|
| - |
|
| - |
|
| (3,715) |
|
| (57) |
|
| (3,772) | ||
| Other comprehensive income |
|
| - |
|
| - |
|
| 577 |
|
| - |
|
| 577 |
|
| 130 |
|
| 707 | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| (83) |
|
| (83) | ||
| Dispositions |
|
| - |
|
| - |
|
| - |
|
| - |
|
| - |
|
| 38 |
|
| 38 | ||
Balance as of June 30, 2019 |
|
| 15,639 |
|
| 419,913 |
|
| (18,205) |
|
| (225,970) |
|
| 191,377 |
|
| 7,088 |
|
| 198,465 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended June 30, 2019 |
|
|
|
| Three Months Ended June 30, 2018 | ||||||||||||||
|
|
|
|
|
|
|
| Held in |
|
|
|
|
|
|
|
|
|
| Held in |
|
|
| ||
| Common Stock Share Activity |
| Issued |
| Treasury |
| Outstanding |
|
|
|
| Issued |
| Treasury |
| Outstanding | ||||||||
|
|
|
| (millions of shares) |
|
|
|
| (millions of shares) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of March 31 |
|
| 8,019 |
|
| (3,788) |
|
| 4,231 |
|
|
|
|
| 8,019 |
|
| (3,785) |
|
| 4,234 | ||
|
|
| Acquisitions |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
|
|
| Dispositions |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
| Balance as of June 30 |
|
| 8,019 |
|
| (3,788) |
|
| 4,231 |
|
|
|
|
| 8,019 |
|
| (3,785) |
|
| 4,234 |
| 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, 2018 |
|
| 15,258 |
|
| 421,653 |
|
| (19,564) |
|
| (225,553) |
|
| 191,794 |
|
| 6,734 |
|
| 198,528 | |||
| Amortization of stock-based awards |
|
| 223 |
|
| - |
|
| - |
|
| - |
|
| 223 |
|
| - |
|
| 223 | ||
| Other |
|
| (5) |
|
| - |
|
| - |
|
| - |
|
| (5) |
|
| 9 |
|
| 4 | ||
| Net income (loss) for the period |
|
| - |
|
| 2,350 |
|
| - |
|
| - |
|
| 2,350 |
|
| 56 |
|
| 2,406 | ||
| Dividends - common shares |
|
| - |
|
| (3,505) |
|
| - |
|
| - |
|
| (3,505) |
|
| (43) |
|
| (3,548) | ||
| Other comprehensive income (loss) |
|
| - |
|
| - |
|
| 782 |
|
| - |
|
| 782 |
|
| 126 |
|
| 908 | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| (421) |
|
| (421) |
|
| (83) |
|
| (504) | ||
| Dispositions |
|
| - |
|
| - |
|
| - |
|
| 4 |
|
| 4 |
|
| - |
|
| 4 | ||
Balance as of March 31, 2019 |
|
| 15,476 |
|
| 420,498 |
|
| (18,782) |
|
| (225,970) |
|
| 191,222 |
|
| 6,799 |
|
| 198,021 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance as of December 31, 2019 |
|
| 15,637 |
|
| 421,341 |
|
| (19,493) |
|
| (225,835) |
|
| 191,650 |
|
| 7,288 |
|
| 198,938 | |||
| Amortization of stock-based awards |
|
| 181 |
|
| - |
|
| - |
|
| - |
|
| 181 |
|
| - |
|
| 181 | ||
| Other |
|
| (182) |
|
| - |
|
| - |
|
| - |
|
| (182) |
|
| 157 |
|
| (25) | ||
| Net income (loss) for the period |
|
| - |
|
| (610) |
|
| - |
|
| - |
|
| (610) |
|
| (160) |
|
| (770) | ||
| Dividends - common shares |
|
| - |
|
| (3,719) |
|
| - |
|
| - |
|
| (3,719) |
|
| (45) |
|
| (3,764) | ||
| Cumulative effect of accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| change |
|
| - |
|
| (93) |
|
| - |
|
| - |
|
| (93) |
|
| (1) |
|
| (94) |
| Other comprehensive income (loss) |
|
| - |
|
| - |
|
| (4,846) |
|
| - |
|
| (4,846) |
|
| (512) |
|
| (5,358) | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| (305) |
|
| (305) |
|
| (63) |
|
| (368) | ||
| Dispositions |
|
| - |
|
| - |
|
| - |
|
| 3 |
|
| 3 |
|
| - |
|
| 3 | ||
Balance as of March 31, 2020 |
|
| 15,636 |
|
| 416,919 |
|
| (24,339) |
|
| (226,137) |
|
| 182,079 |
|
| 6,664 |
|
| 188,743 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended March 31, 2020 |
|
|
|
| Three Months Ended March 31, 2019 | ||||||||||||||
|
|
|
|
|
|
|
| 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 |
|
| (3,785) |
|
| 4,234 |
|
|
|
|
| 8,019 |
|
| (3,782) |
|
| 4,237 | ||
|
|
| Acquisitions |
|
| - |
|
| (6) |
|
| (6) |
|
|
|
|
| - |
|
| (6) |
|
| (6) |
|
|
| Dispositions |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
| Balance as of March 31 |
|
| 8,019 |
|
| (3,791) |
|
| 4,228 |
|
|
|
|
| 8,019 |
|
| (3,788) |
|
| 4,231 |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
7
| EXXON MOBIL CORPORATION | |||||||||||||||||||||||
| CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | |||||||||||||||||||||||
| (millions of dollars) | |||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ExxonMobil Share of Equity |
|
|
|
|
|
| |||||||||||||
|
|
|
|
|
|
|
|
|
| Accumulated |
|
|
|
|
|
|
|
|
|
|
| |||
|
|
|
|
|
|
|
|
|
|
| Other |
| Common |
|
|
|
|
|
|
|
|
| ||
|
|
|
|
|
|
|
|
|
|
| Compre- |
| Stock |
| ExxonMobil |
| Non- |
|
|
| ||||
|
|
|
|
| Common |
| Earnings |
| hensive |
| Held in |
| Share of |
| controlling |
| Total | |||||||
|
|
|
|
| Stock |
| Reinvested |
| Income |
| Treasury |
| Equity |
| Interests |
| Equity | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of December 31, 2017 |
|
| 14,656 |
|
| 414,540 |
|
| (16,262) |
|
| (225,246) |
|
| 187,688 |
|
| 6,812 |
|
| 194,500 | |||
| Amortization of stock-based awards |
|
| 436 |
|
| - |
|
| - |
|
| - |
|
| 436 |
|
| - |
|
| 436 | ||
| Other |
|
| (6) |
|
| - |
|
| - |
|
| - |
|
| (6) |
|
| (7) |
|
| (13) | ||
| Net income for the period |
|
| - |
|
| 8,600 |
|
| - |
|
| - |
|
| 8,600 |
|
| 169 |
|
| 8,769 | ||
| Dividends - common shares |
|
| - |
|
| (6,793) |
|
| - |
|
| - |
|
| (6,793) |
|
| (135) |
|
| (6,928) | ||
| Cumulative effect of accounting |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| change |
|
| - |
|
| 71 |
|
| (39) |
|
| - |
|
| 32 |
|
| 15 |
|
| 47 |
| Other comprehensive income |
|
| - |
|
| - |
|
| (2,308) |
|
| - |
|
| (2,308) |
|
| (275) |
|
| (2,583) | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| (429) |
|
| (429) |
|
| (268) |
|
| (697) | ||
| Dispositions |
|
| - |
|
| - |
|
| - |
|
| 2 |
|
| 2 |
|
| - |
|
| 2 | ||
Balance as of June 30, 2018 |
|
| 15,086 |
|
| 416,418 |
|
| (18,609) |
|
| (225,673) |
|
| 187,222 |
|
| 6,311 |
|
| 193,533 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Balance as of December 31, 2018 |
|
| 15,258 |
|
| 421,653 |
|
| (19,564) |
|
| (225,553) |
|
| 191,794 |
|
| 6,734 |
|
| 198,528 | |||
| Amortization of stock-based awards |
|
| 389 |
|
| - |
|
| - |
|
| - |
|
| 389 |
|
| - |
|
| 389 | ||
| Other |
|
| (8) |
|
| - |
|
| - |
|
| - |
|
| (8) |
|
| - |
|
| (8) | ||
| Net income for the period |
|
| - |
|
| 5,480 |
|
| - |
|
| - |
|
| 5,480 |
|
| 317 |
|
| 5,797 | ||
| Dividends - common shares |
|
| - |
|
| (7,220) |
|
| - |
|
| - |
|
| (7,220) |
|
| (100) |
|
| (7,320) | ||
| Other comprehensive income |
|
| - |
|
| - |
|
| 1,359 |
|
| - |
|
| 1,359 |
|
| 256 |
|
| 1,615 | ||
| Acquisitions, at cost |
|
| - |
|
| - |
|
| - |
|
| (421) |
|
| (421) |
|
| (166) |
|
| (587) | ||
| Dispositions |
|
| - |
|
| - |
|
| - |
|
| 4 |
|
| 4 |
|
| 47 |
|
| 51 | ||
Balance as of June 30, 2019 |
|
| 15,639 |
|
| 419,913 |
|
| (18,205) |
|
| (225,970) |
|
| 191,377 |
|
| 7,088 |
|
| 198,465 | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Six Months Ended June 30, 2019 |
|
|
|
| Six Months Ended June 30, 2018 | ||||||||||||||
|
|
|
|
|
|
|
| Held in |
|
|
|
|
|
|
|
|
|
| Held in |
|
|
| ||
| Common Stock Share Activity |
| Issued |
| Treasury |
| Outstanding |
|
|
|
| Issued |
| Treasury |
| Outstanding | ||||||||
|
|
|
| (millions of shares) |
|
|
|
| (millions of shares) | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31 |
|
| 8,019 |
|
| (3,782) |
|
| 4,237 |
|
|
|
|
| 8,019 |
|
| (3,780) |
|
| 4,239 | ||
|
|
| Acquisitions |
|
| - |
|
| (6) |
|
| (6) |
|
|
|
|
| - |
|
| (5) |
|
| (5) |
|
|
| Dispositions |
|
| - |
|
| - |
|
| - |
|
|
|
|
| - |
|
| - |
|
| - |
| Balance as of June 30 |
|
| 8,019 |
|
| (3,788) |
|
| 4,231 |
|
|
|
|
| 8,019 |
|
| (3,785) |
|
| 4,234 |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
8
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 20182019 Annual Report on Form 10-K. In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. Prior data has been reclassified in certain cases to conform to the current presentation basis.
The Corporation's exploration and production activities are accounted for under the "successful efforts" method.
2.Accounting Changes Miscellaneous Financial Information
Crude oil, products and merchandise inventories are carried at the lower of current market value or cost, generally determined under the last-in first-out method (LIFO). The Corporation’s results for the first quarter of 2020 include a before-tax charge of $2,777 million, included in “Crude oil and product purchases” on the Statement of Income, from writing down the book value of inventories to their market value at the end of the period. This adjustment, together with a similar adjustment for equity companies included in “Income from equity affiliates,” resulted in a $2,096 million after-tax charge to earnings (excluding noncontrolling interests) and will be re-evaluated at the end of each quarter in 2020. The earnings impact may be adjusted upward or downward this year based on prevailing market prices at the time of future evaluations. At year-end, any required adjustment is considered permanent and is incorporated into the LIFO carrying value of the inventory.
Effective January 1, 2019,The COVID-19 pandemic resulted in substantial reductions in demand for crude oil, natural gas, and petroleum products. This reduction in demand led to sharp declines in industry prices and considerable volatility in financial markets during the quarter. Based on deteriorating industry conditions and a significant reduction in its market capitalization, the Corporation adoptedassessed its goodwill balances and certain asset groups for impairment and recognized after-tax impairment charges of $787 million. These charges included goodwill impairment of $562 million in Upstream, Downstream, and Chemical reporting units and other impairment charges of $225 million, mainly in the Financial Accounting Standards Board’s Standard, Leases (Topic 842), as amended.Upstream segment. For the goodwill impairment charges, the fair values of the impacted reporting units primarily reflected market-based estimates of historical EBITDA multiples at the end of the quarter. For the other impairment charges, which mainly relate to the Corporation’s investment in an Upstream equity company, recent third party price outlooks, internal estimates of future volumes and costs, and estimates of discount rates for similar properties were used to estimate fair value. The standard requires all leasescharges related to be recordedgoodwill impairment are included in “Depreciation and depletion” on the balance sheet as a rightStatement of use asset and a lease liability. The Corporation used a transition method that appliesIncome while the new lease standard at January 1, 2019. The Corporation applied a policy electioncharges related to exclude short-term leasesother impairments are largely included in “Income from balance sheet recognition and also elected certain practical expedients at adoption. As permitted, the Corporation did not reassess whether existing contracts are or contain leases, the lease classification for any existing leases, initial direct costs for any existing lease and whether existing land easements and rights of way, which were not previously accounted for as leases, are or contain a lease. At adoption on January 1, 2019, an operating lease liability of $3.3 billion was recorded and the operating lease right of use asset was $4.3 billion, including $1.0 billion of previously recorded prepaid leases. There was no cumulative earnings effect adjustment.
Effective January 1, 2020, ExxonMobil will adopt the Financial Accounting Standards Board’s update, Financial Instruments – Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and expectations of the future. The Corporation is evaluating the standard and its effect on the Corporation’s financial statements.
equity affiliates.”
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 June 30, 2019,March 31, 2020, 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.
98
|
|
|
|
|
| As of June 30, 2019 |
|
| ||||||
|
|
|
|
|
| Equity |
|
| Other |
|
|
|
|
|
|
|
|
|
|
| Company |
|
| Third Party |
|
|
|
|
|
|
|
|
|
|
| Obligations (1) |
|
| Obligations |
|
| Total |
|
|
|
|
|
|
|
| (millions of dollars) |
|
| ||||||
| Guarantees |
|
|
|
|
|
|
|
|
|
|
| ||
|
| Debt-related |
|
| 641 |
|
| 83 |
|
| 724 |
|
| |
|
| Other |
|
| 855 |
|
| 4,674 |
|
| 5,529 |
|
| |
|
|
| Total |
|
| 1,496 |
|
| 4,757 |
|
| 6,253 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) | ExxonMobil share |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of March 31, 2020 |
|
| ||||||
|
|
|
|
|
| Equity |
|
| Other |
|
|
|
|
|
|
|
|
|
|
| Company |
|
| Third Party |
|
|
|
|
|
|
|
|
|
|
| Obligations (1) |
|
| Obligations |
|
| Total |
|
|
|
|
|
|
|
| (millions of dollars) |
|
| ||||||
| Guarantees |
|
|
|
|
|
|
|
|
|
|
| ||
|
| Debt-related |
|
| 868 |
|
| 108 |
|
| 976 |
|
| |
|
| Other |
|
| 846 |
|
| 4,636 |
|
| 5,482 |
|
| |
|
|
| Total |
|
| 1,714 |
|
| 4,744 |
|
| 6,458 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (1) | ExxonMobil share |
|
|
|
|
|
|
|
|
|
|
|
Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition.
The operations and earnings of the Corporation and its affiliates throughout the world have been, and may in the future be, affected from time to time in varying degree by political developments and laws and regulations, such as forced divestiture of assets; restrictions on production, imports and exports; price controls; tax increases and retroactive tax claims; expropriation of property; cancellation of contract rights and environmental regulations. Both the likelihood of such occurrences and their overall effect upon the Corporation vary greatly from country to country and are not predictable.
In accordance with a Venezuelan nationalization decree issued in February 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project. ExxonMobil refused to accede to the terms proffered by the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project.
ExxonMobil collected awards of $908 million in an arbitration against PdVSA under the rules of the International Chamber of Commerce in respect of an indemnity related to the Cerro Negro Project and $260 million in an arbitration for compensation due for the La Ceiba Project and for export curtailments at the Cerro Negro Project under rules of International Centre for Settlement of Investment Disputes (ICSID). An ICSID arbitration award relating to the Cerro Negro Project’s expropriation ($1.4 billion) was annulled based on a determination that a prior Tribunal failed to adequately explain why the cap on damages in the indemnity owed by PdVSA did not affect or limit the amount owed for the expropriation of the Cerro Negro Project. ExxonMobil filed a new claim seeking to restore the original award of damages for the Cerro Negro Project with ICSID on September 26, 2018.
The net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.
An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award. The Contractors appealed that judgment to the Court of Appeal, Abuja Judicial Division. On July 22, 2016, the Court of Appeal upheld the decision of the lower court setting aside the award. On October 21, 2016, the Contractors appealed the decision to the Supreme Court of Nigeria. In June 2013, the Contractors filed a lawsuit against NNPC in the Nigerian federal high court in order to preserve their ability to seek enforcement of the PSC in the courts if necessary. Following dismissal by this court, the Contractors appealed to the Nigerian Court of Appeal in June 2016. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York (SDNY) to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. NNPC has moved to dismiss the lawsuit. On September 4, 2019, the SDNY dismissed the Contractors’ petition to recognize and enforce the Erha arbitration award. The Contractors filed a notice of appeal in the Second Circuit on October 2, 2019. 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.
109
4.Other Comprehensive Income Information
|
|
|
|
|
| Cumulative |
|
| Post- |
|
|
|
|
|
|
|
|
| Foreign |
|
| retirement |
|
|
|
|
|
|
|
|
| Exchange |
|
| Benefits |
|
|
|
| ExxonMobil Share of Accumulated Other |
|
| Translation |
|
| Reserves |
|
|
| ||
| Comprehensive Income |
|
| Adjustment |
|
| Adjustment |
|
| Total | ||
|
|
|
|
|
| (millions of dollars) | ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2017 |
|
| (9,482) |
|
| (6,780) |
|
| (16,262) | ||
| Current period change excluding amounts reclassified |
|
|
|
|
|
|
|
|
| ||
|
| from accumulated other comprehensive income |
|
| (2,573) |
|
| (409) |
|
| (2,982) | |
| Amounts reclassified from accumulated other |
|
|
|
|
|
|
|
|
| ||
|
| comprehensive income |
|
| 186 |
|
| 449 |
|
| 635 | |
| Total change in accumulated other comprehensive income |
|
| (2,387) |
|
| 40 |
|
| (2,347) | ||
| Balance as of June 30, 2018 |
|
| (11,869) |
|
| (6,740) |
|
| (18,609) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2018 |
|
| (13,881) |
|
| (5,683) |
|
| (19,564) | ||
| Current period change excluding amounts reclassified |
|
|
|
|
|
|
|
|
| ||
|
| from accumulated other comprehensive income |
|
| 1,096 |
|
| (49) |
|
| 1,047 | |
| Amounts reclassified from accumulated other |
|
|
|
|
|
|
|
|
| ||
|
| comprehensive income |
|
| - |
|
| 312 |
|
| 312 | |
| Total change in accumulated other comprehensive income |
|
| 1,096 |
|
| 263 |
|
| 1,359 | ||
| Balance as of June 30, 2019 |
|
| (12,785) |
|
| (5,420) |
|
| (18,205) |
|
|
|
|
|
| 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, 2018 |
|
| (13,881) |
|
| (5,683) |
|
| (19,564) | ||
| Current period change excluding amounts reclassified |
|
|
|
|
|
|
|
|
| ||
|
| from accumulated other comprehensive income |
|
| 627 |
|
| (23) |
|
| 604 | |
| Amounts reclassified from accumulated other |
|
|
|
|
|
|
|
|
| ||
|
| comprehensive income |
|
| - |
|
| 178 |
|
| 178 | |
| Total change in accumulated other comprehensive income |
|
| 627 |
|
| 155 |
|
| 782 | ||
| Balance as of March 31, 2019 |
|
| (13,254) |
|
| (5,528) |
|
| (18,782) | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Balance as of December 31, 2019 |
|
| (12,446) |
|
| (7,047) |
|
| (19,493) | ||
| Current period change excluding amounts reclassified |
|
|
|
|
|
|
|
|
| ||
|
| from accumulated other comprehensive income |
|
| (5,113) |
|
| 72 |
|
| (5,041) | |
| Amounts reclassified from accumulated other |
|
|
|
|
|
|
|
|
| ||
|
| comprehensive income |
|
| - |
|
| 195 |
|
| 195 | |
| Total change in accumulated other comprehensive income |
|
| (5,113) |
|
| 267 |
|
| (4,846) | ||
| Balance as of March 31, 2020 |
|
| (17,559) |
|
| (6,780) |
|
| (24,339) |
|
|
|
|
|
| ||||||||||
|
|
|
|
|
| Three Months Ended |
|
| Six Months Ended | ||||||
| Amounts Reclassified Out of Accumulated Other |
|
| June 30, |
|
| June 30, | ||||||||
| Comprehensive Income - Before-tax Income/(Expense) |
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 | ||
|
|
|
|
| (millions of dollars) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign exchange translation gain/(loss) included in net income |
|
|
|
|
|
|
|
|
|
| ||||
|
| (Statement of Income line: Other income) | - |
|
| (18) |
|
| - |
|
| (186) | |||
| 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) | (191) |
|
| (290) |
|
| (428) |
|
| (610) |
|
|
|
|
|
|
|
|
|
| Three Months Ended | |||
| Amounts Reclassified Out of Accumulated Other |
|
|
|
|
|
| March 31, | |||||
| Comprehensive Income - Before-tax Income/(Expense) |
|
|
| 2020 |
|
| 2019 | |||||
|
|
|
|
|
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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) | (262) |
|
| (237) | |||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended |
|
| Six Months Ended | ||||||
| Income Tax (Expense)/Credit For |
|
| June 30, |
|
| June 30, | ||||||||
| Components of Other Comprehensive Income |
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 | ||
|
|
|
|
| (millions of dollars) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign exchange translation adjustment |
|
| - |
|
| 5 |
|
| - |
|
| 5 | ||
| Postretirement benefits reserves adjustment |
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| (excluding amortization) |
|
| 10 |
|
| (58) |
|
| 20 |
|
| 66 | |
| Amortization and settlement of postretirement benefits reserves |
|
|
|
|
|
|
|
|
|
|
| |||
|
| adjustment included in net periodic benefit costs |
|
| (50) |
|
| (61) |
|
| (102) |
|
| (144) | |
| Total |
|
| (40) |
|
| (114) |
|
| (82) |
|
| (73) |
|
|
|
|
|
|
|
|
| Three Months Ended | |||
| Income Tax (Expense)/Credit For |
|
|
|
|
| March 31, | |||||
| Components of Other Comprehensive Income |
|
|
|
|
| 2020 |
|
| 2019 | ||
|
|
|
|
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign exchange translation adjustment |
|
|
|
|
| 7 |
|
| - | ||
| Postretirement benefits reserves adjustment (excluding amortization) |
|
|
|
|
| (62) |
|
| 10 | ||
| Amortization and settlement of postretirement benefits reserves |
|
|
|
|
|
|
|
|
| ||
|
| adjustment included in net periodic benefit costs |
|
|
|
|
| (58) |
|
| (52) | |
| Total |
|
|
|
|
| (113) |
|
| (42) |
1110
5.Earnings Per Share
|
|
|
|
| Three Months Ended |
|
| Six Months Ended | ||||||
|
|
|
|
| June 30, |
|
| June 30, | ||||||
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common share |
|
|
|
|
|
|
|
|
|
|
| ||
| Net income attributable to ExxonMobil (millions of dollars) |
| 3,130 |
|
| 3,950 |
|
| 5,480 |
|
| 8,600 | ||
|
|
|
|
|
|
|
|
|
|
|
|
| ||
| Weighted average number of common shares |
|
|
|
|
|
|
|
|
|
|
| ||
|
| outstanding (millions of shares) |
| 4,271 |
|
| 4,271 |
|
| 4,270 |
|
| 4,270 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common share (dollars) (1) |
| 0.73 |
|
| 0.92 |
|
| 1.28 |
|
| 2.01 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends paid per common share (dollars) |
| 0.87 |
|
| 0.82 |
|
| 1.69 |
|
| 1.59 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Three Months Ended | |||
|
|
|
|
|
|
|
|
| March 31, | |||
|
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Earnings per common share |
|
|
|
|
|
| |||||
|
|
|
|
|
|
|
| |||||
| Net income (loss) attributable to ExxonMobil (millions of dollars) |
|
| (610) |
|
| 2,350 | |||||
|
|
|
|
|
|
|
| |||||
| Weighted average number of common shares outstanding (millions of shares) |
|
| 4,270 |
|
| 4,270 | |||||
|
|
|
|
|
|
|
| |||||
| Earnings (Loss) per common share (dollars) (1) |
|
| (0.14) |
|
| 0.55 | |||||
|
|
|
|
|
|
|
| |||||
| Dividends paid per common share (dollars) |
|
| 0.87 |
|
| 0.82 | |||||
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) The calculation of earnings (loss) per common share and earnings (loss) per common share – assuming dilution are the same in each period shown.
6.Pension and Other Postretirement Benefits
|
|
|
|
|
|
| Three Months Ended |
|
| Six Months Ended | ||||||
|
|
|
|
|
|
| June 30, |
|
| June 30, | ||||||
|
|
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
|
|
| (millions of dollars) | ||||||||||
| Components of net benefit cost |
|
|
|
|
|
|
|
|
|
|
|
| |||
|
| Pension Benefits - U.S. |
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
| 180 |
|
| 204 |
|
| 355 |
|
| 413 | |
|
|
| Interest cost |
|
| 189 |
|
| 181 |
|
| 382 |
|
| 361 | |
|
|
| Expected return on plan assets |
|
| (142) |
|
| (181) |
|
| (284) |
|
| (363) | |
|
|
| Amortization of actuarial loss/(gain) and prior |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| service cost |
|
| 79 |
|
| 92 |
|
| 156 |
|
| 183 |
|
|
| Net pension enhancement and |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| curtailment/settlement cost |
|
| 53 |
|
| 63 |
|
| 107 |
|
| 126 |
|
|
| Net benefit cost |
|
| 359 |
|
| 359 |
|
| 716 |
|
| 720 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pension Benefits - Non-U.S. |
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
| 138 |
|
| 154 |
|
| 277 |
|
| 312 | |
|
|
| Interest cost |
|
| 192 |
|
| 186 |
|
| 384 |
|
| 386 | |
|
|
| Expected return on plan assets |
|
| (192) |
|
| (237) |
|
| (389) |
|
| (489) | |
|
|
| Amortization of actuarial loss/(gain) and prior |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| service cost |
|
| 55 |
|
| 113 |
|
| 158 |
|
| 231 |
|
|
| Net pension enhancement and |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| curtailment/settlement cost |
|
| - |
|
| - |
|
| - |
|
| 33 |
|
|
| Net benefit cost |
|
| 193 |
|
| 216 |
|
| 430 |
|
| 473 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Postretirement Benefits |
|
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
| 33 |
|
| 35 |
|
| 66 |
|
| 71 | |
|
|
| Interest cost |
|
| 79 |
|
| 76 |
|
| 158 |
|
| 151 | |
|
|
| Expected return on plan assets |
|
| (4) |
|
| (6) |
|
| (8) |
|
| (12) | |
|
|
| Amortization of actuarial loss/(gain) and prior |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
|
| service cost |
|
| 4 |
|
| 21 |
|
| 7 |
|
| 38 |
|
|
| Net benefit cost |
|
| 112 |
|
| 126 |
|
| 223 |
|
| 248 |
|
|
|
|
|
|
|
| Three Months Ended | |||
|
|
|
|
|
|
|
| March 31, | |||
|
|
|
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
|
|
|
| (millions of dollars) | |||
| Components of net benefit cost |
|
|
|
|
|
|
| |||
|
| Pension Benefits - U.S. |
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
|
| 235 |
|
| 175 | |
|
|
| Interest cost |
|
|
| 177 |
|
| 193 | |
|
|
| Expected return on plan assets |
|
|
| (175) |
|
| (142) | |
|
|
| Amortization of actuarial loss/(gain) and prior service cost |
|
| 79 |
|
| 77 | ||
|
|
| Net pension enhancement and curtailment/settlement cost |
|
| 52 |
|
| 54 | ||
|
|
| Net benefit cost |
|
|
| 368 |
|
| 357 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pension Benefits - Non-U.S. |
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
|
| 175 |
|
| 139 | |
|
|
| Interest cost |
|
|
| 161 |
|
| 192 | |
|
|
| Expected return on plan assets |
|
|
| (222) |
|
| (197) | |
|
|
| Amortization of actuarial loss/(gain) and prior service cost |
|
| 119 |
|
| 103 | ||
|
|
| Net benefit cost |
|
|
| 233 |
|
| 237 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other Postretirement Benefits |
|
|
|
|
|
|
| ||
|
|
| Service cost |
|
|
| 45 |
|
| 33 | |
|
|
| Interest cost |
|
|
| 70 |
|
| 79 | |
|
|
| Expected return on plan assets |
|
|
| (4) |
|
| (4) | |
|
|
| Amortization of actuarial loss/(gain) and prior service cost |
|
| 12 |
|
| 3 | ||
|
|
| Net benefit cost |
|
|
| 123 |
|
| 111 | |
|
|
|
|
|
|
|
|
|
|
|
|
1211
7.Financial Instruments and Derivatives
Financial Instruments. The estimated fair value of financial instruments at June 30, 2019March 31, 2020, and December 31, 2018,2019, and the related hierarchy level for the fair value measurement is as follows:
|
|
|
|
| At June 30, 2019 | ||||||||||||||
|
|
|
|
| (millions of dollars) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value |
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Difference |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Gross |
| Effect of |
| Effect of |
| in Carrying |
| Net |
|
|
|
|
|
|
|
|
|
|
| Assets |
| Counterparty |
| Collateral |
| Value and |
| Carrying |
|
|
|
|
| Level 1 |
| Level 2 |
| Level 3 |
| & Liabilities |
| Netting |
| Netting |
| Fair Value |
| Value |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative assets (1) |
| 449 |
| 39 |
| - |
| 488 |
| (415) |
| (34) |
| - |
| 39 | ||
| Advances to/receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| from equity companies (2)(7) |
| - |
| 2,191 |
| 6,313 |
| 8,504 |
| - |
| - |
| 151 |
| 8,655 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial assets (3) |
| 1,000 |
| - |
| 810 |
| 1,810 |
| - |
| - |
| 86 |
| 1,896 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative liabilities (4) |
| 432 |
| 26 |
| - |
| 458 |
| (415) |
| (17) |
| - |
| 26 | ||
| Long-term debt (5) |
| 18,446 |
| 137 |
| 4 |
| 18,587 |
| - |
| - |
| (885) |
| 17,702 | ||
| Long-term obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| to equity companies (7) |
| - |
| - |
| 4,209 |
| 4,209 |
| - |
| - |
| (28) |
| 4,181 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial liabilities (6) |
| - |
| - |
| 1,030 |
| 1,030 |
| - |
| - |
| 7 |
| 1,037 |
|
|
|
|
| At December 31, 2018 | ||||||||||||||
|
|
|
|
| (millions of dollars) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value |
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Difference |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Gross |
| Effect of |
| Effect of |
| in Carrying |
| Net |
|
|
|
|
|
|
|
|
|
|
| Assets |
| Counterparty |
| Collateral |
| Value and |
| Carrying |
|
|
|
|
| Level 1 |
| Level 2 |
| Level 3 |
| & Liabilities |
| Netting |
| Netting |
| Fair Value |
| Value |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative assets (1) |
| 297 |
| - |
| - |
| 297 |
| (151) |
| (146) |
| - |
| - | ||
| Advances to/receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| from equity companies (2)(7) |
| - |
| 2,100 |
| 6,293 |
| 8,393 |
| - |
| - |
| 215 |
| 8,608 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial assets (3) |
| 848 |
| - |
| 974 |
| 1,822 |
| - |
| - |
| 112 |
| 1,934 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative liabilities (4) |
| 151 |
| - |
| - |
| 151 |
| (151) |
| - |
| - |
| - | ||
| Long-term debt (5) |
| 19,029 |
| 117 |
| 4 |
| 19,150 |
| - |
| - |
| 85 |
| 19,235 | ||
| Long-term obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| to equity companies (7) |
| - |
| - |
| 4,330 |
| 4,330 |
| - |
| - |
| 52 |
| 4,382 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial liabilities (6) |
| - |
| - |
| 1,046 |
| 1,046 |
| - |
| - |
| (3) |
| 1,043 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Included in the Balance Sheet lines: Notes and accounts receivable, less estimated doubtful amounts and Other assets, including intangibles, net | ||||||||||||||||||
(2) | Included in the Balance Sheet line: Investments, advances and long-term receivables | ||||||||||||||||||
(3) | Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles, net | ||||||||||||||||||
(4) | Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations | ||||||||||||||||||
(5) | Excluding finance lease obligations | ||||||||||||||||||
(6) | Included in the Balance Sheet line: Other long-term obligations | ||||||||||||||||||
(7) | Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the equity company. |
|
|
|
|
| At March 31, 2020 | ||||||||||||||
|
|
|
|
| (millions of dollars) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value |
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Difference |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Gross |
| Effect of |
| Effect of |
| in Carrying |
| Net |
|
|
|
|
|
|
|
|
|
|
| Assets |
| Counterparty |
| Collateral |
| Value and |
| Carrying |
|
|
|
|
| Level 1 |
| Level 2 |
| Level 3 |
| & Liabilities |
| Netting |
| Netting |
| Fair Value |
| Value |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative assets (1) |
| 4,565 |
| 171 |
| - |
| 4,736 |
| (3,603) |
| (962) |
| - |
| 171 | ||
| Advances to/receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| from equity companies (2)(7) |
| - |
| 1,702 |
| 6,088 |
| 7,790 |
| - |
| - |
| 746 |
| 8,536 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial assets (3) |
| 1,141 |
| - |
| 975 |
| 2,116 |
| - |
| - |
| 51 |
| 2,167 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative liabilities (4) |
| 3,637 |
| 216 |
| - |
| 3,853 |
| (3,603) |
| (34) |
| - |
| 216 | ||
| Long-term debt (5) |
| 33,128 |
| 124 |
| 4 |
| 33,256 |
| - |
| - |
| (2,630) |
| 30,626 | ||
| Long-term obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| to equity companies (7) |
| - |
| - |
| 3,490 |
| 3,490 |
| - |
| - |
| 534 |
| 4,024 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial liabilities (6) |
| - |
| - |
| 1,064 |
| 1,064 |
| - |
| - |
| 40 |
| 1,104 |
|
|
|
|
| At December 31, 2019 | ||||||||||||||
|
|
|
|
| (millions of dollars) | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Fair Value |
|
|
|
|
|
|
|
| ||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Difference |
|
|
|
|
|
|
|
|
|
|
|
|
| Total Gross |
| Effect of |
| Effect of |
| in Carrying |
| Net |
|
|
|
|
|
|
|
|
|
|
| Assets |
| Counterparty |
| Collateral |
| Value and |
| Carrying |
|
|
|
|
| Level 1 |
| Level 2 |
| Level 3 |
| & Liabilities |
| Netting |
| Netting |
| Fair Value |
| Value |
Assets |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative assets (1) |
| 533 |
| 102 |
| - |
| 635 |
| (463) |
| (70) |
| - |
| 102 | ||
| Advances to/receivables |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| from equity companies (2)(7) |
| - |
| 1,941 |
| 6,729 |
| 8,670 |
| - |
| - |
| (128) |
| 8,542 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial assets (3) |
| 1,145 |
| - |
| 974 |
| 2,119 |
| - |
| - |
| 44 |
| 2,163 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
Liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |||
| Derivative liabilities (4) |
| 568 |
| 70 |
| - |
| 638 |
| (463) |
| (105) |
| - |
| 70 | ||
| Long-term debt (5) |
| 25,652 |
| 134 |
| 3 |
| 25,789 |
| - |
| - |
| (1,117) |
| 24,672 | ||
| Long-term obligations |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| to equity companies (7) |
| - |
| - |
| 4,245 |
| 4,245 |
| - |
| - |
| (257) |
| 3,988 | |
| Other long-term |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| financial liabilities (6) |
| - |
| - |
| 1,042 |
| 1,042 |
| - |
| - |
| 16 |
| 1,058 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) | Included in the Balance Sheet lines: Notes and accounts receivable, less estimated doubtful amounts and Other assets, including intangibles, net | ||||||||||||||||||
(2) | Included in the Balance Sheet line: Investments, advances and long-term receivables | ||||||||||||||||||
(3) | Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles, net | ||||||||||||||||||
(4) | Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations | ||||||||||||||||||
(5) | Excluding finance lease obligations | ||||||||||||||||||
(6) | Included in the Balance Sheet line: Other long-term obligations | ||||||||||||||||||
(7) | Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company. |
1312
The increase in the estimated fair value and book value of long-term debt reflects the Corporation’s issuance of $8.5 billion of long-term debt in the first quarter of 2020. The $8.5 billion of long-term debt is comprised of $1,500 million of 2.992% notes due in 2025, $1,000 million of 3.294% notes due in 2027, $2,000 million of 3.482% notes due in 2030, $1,250 million of 4.227% notes due in 2040, and $2,750 million of 4.327% notes due in 2050.
In the first quarter of 2020, the Corporation established a short-term credit facility to provide an additional $7.0 billion of borrowing capacity for general corporate purposes to supplement its existing short-term revolving credit facilities of $7.9 billion as of year-end 2019. The majority of these credit facilities will expire within one year. As of March 31, 2020, no material amounts have been drawn on these facilities.
Subsequent Event. On April 15, 2020, the Corporation issued $9.5 billion of long-term debt. The $9.5 billion of long-term debt is comprised of $2,750 million of 1.571% notes due in 2023, $1,250 million of 2.992% notes due in 2025, $2,000 million of 2.610% notes due in 2030, $750 million of 4.227% notes due in 2040, and $2,750 million of 3.452% notes due in 2051. Net cash proceeds were $9.6 billion reflecting two tranches that were issued at a premium. This transaction was not reflected in the consolidated financial statements as of March 31, 2020.
Derivative Instruments. The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the Corporation’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and for trading purposes. Commodity contracts held for trading purposes are presented in the Consolidated Statement of Income on a net basis in the line “Sales and other operating revenue.” The Corporation’s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation’s financial position as of June 30, 2019March 31, 2020, and December 31, 2018,2019, or results of operations for the periods ended June 30, 2019March 31, 2020 and 2018.2019.
Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.
At June 30,March 31, 2020, the net notional long/(short) position of derivative instruments was (4) million barrels for crude oil, (36) million barrels for products, and (192) million MMBtus of natural gas. At December 31, 2019, the net notional long/(short) position of derivative instruments was (20)57 million barrels for crude oil, (44)(38) million barrels for products, and (140)(165) million MMBtus of natural gas. At December 31, 2018, the net notional long/(short) position of derivative instruments was (19) million barrels for crude oil and (9) million barrels for products.
Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Consolidated Statement of Income are included in the following lines on a before-tax basis:
|
|
|
|
|
| Three Months Ended |
| Six Months Ended |
|
|
|
|
| Three Months Ended | ||||||||||
|
|
|
|
|
| June 30, |
| June 30, |
|
|
|
|
| March 31, | ||||||||||
|
|
|
|
|
| 2019 |
| 2018 |
| 2019 |
| 2018 |
|
|
|
|
| 2020 |
| 2019 | ||||
|
|
|
|
|
| (millions of dollars) |
|
|
|
|
| (millions of dollars) | ||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||||
Sales and other operating revenue | Sales and other operating revenue |
|
| 33 |
| (11) |
| (242) |
| (3) | Sales and other operating revenue |
|
| 1,236 |
| (275) | ||||||||
Crude oil and product purchases | Crude oil and product purchases |
|
| 33 |
| (193) |
| 15 |
| (274) | Crude oil and product purchases |
|
| (352) |
| (18) | ||||||||
|
| Total |
|
| 66 |
| (204) |
| (227) |
| (277) |
| Total |
|
| 884 |
| (293) |
1413
8.Disclosures about Segments and Related Information
|
|
|
|
|
| Three Months Ended |
|
| Six Months Ended | ||||||
|
|
|
|
|
| June 30, |
|
| June 30, | ||||||
|
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
| Earnings After Income Tax |
| (millions of dollars) | ||||||||||||
|
| Upstream |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 335 |
|
| 439 |
|
| 431 |
|
| 868 |
|
|
| Non-U.S. |
|
| 2,926 |
|
| 2,601 |
|
| 5,706 |
|
| 5,669 |
|
| Downstream |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 310 |
|
| 695 |
|
| 149 |
|
| 1,014 |
|
|
| Non-U.S. |
|
| 141 |
|
| 29 |
|
| 46 |
|
| 650 |
|
| Chemical |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| (6) |
|
| 453 |
|
| 155 |
|
| 956 |
|
|
| Non-U.S. |
|
| 194 |
|
| 437 |
|
| 551 |
|
| 945 |
|
| Corporate and financing |
|
| (770) |
|
| (704) |
|
| (1,558) |
|
| (1,502) | |
|
| Corporate total |
|
| 3,130 |
|
| 3,950 |
|
| 5,480 |
|
| 8,600 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sales and Other Operating Revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Upstream |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 2,594 |
|
| 2,548 |
|
| 5,287 |
|
| 4,909 |
|
|
| Non-U.S. |
|
| 3,709 |
|
| 3,587 |
|
| 7,513 |
|
| 7,215 |
|
| Downstream |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 18,721 |
|
| 19,658 |
|
| 34,363 |
|
| 36,653 |
|
|
| Non-U.S. |
|
| 35,306 |
|
| 37,406 |
|
| 67,603 |
|
| 71,778 |
|
| Chemical |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 2,504 |
|
| 3,019 |
|
| 5,009 |
|
| 6,008 |
|
|
| Non-U.S. |
|
| 4,647 |
|
| 5,226 |
|
| 9,342 |
|
| 10,304 |
|
| Corporate and financing |
|
| 10 |
|
| 12 |
|
| 20 |
|
| 25 | |
|
| Corporate total |
|
| 67,491 |
|
| 71,456 |
|
| 129,137 |
|
| 136,892 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| |
| Intersegment Revenue |
|
|
|
|
|
|
|
|
|
|
|
| ||
|
| Upstream |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 2,641 |
|
| 2,071 |
|
| 4,952 |
|
| 4,133 |
|
|
| Non-U.S. |
|
| 8,376 |
|
| 7,381 |
|
| 15,505 |
|
| 14,252 |
|
| Downstream |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 6,742 |
|
| 5,749 |
|
| 11,503 |
|
| 10,693 |
|
|
| Non-U.S. |
|
| 6,568 |
|
| 7,611 |
|
| 12,737 |
|
| 14,700 |
|
| Chemical |
|
|
|
|
|
|
|
|
|
|
|
| |
|
|
| United States |
|
| 2,569 |
|
| 2,350 |
|
| 4,458 |
|
| 4,544 |
|
|
| Non-U.S. |
|
| 1,583 |
|
| 1,973 |
|
| 3,130 |
|
| 3,816 |
|
| Corporate and financing |
|
| 55 |
|
| 50 |
|
| 108 |
|
| 99 |
|
|
|
|
|
|
| Three Months Ended | |||
|
|
|
|
|
|
| March 31, | |||
|
|
|
|
|
|
| 2020 |
|
| 2019 |
| Earnings (Loss) After Income Tax |
|
|
| (millions of dollars) | |||||
|
| Upstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| (704) |
|
| 96 |
|
|
| Non-U.S. |
|
|
| 1,240 |
|
| 2,780 |
|
| Downstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| (101) |
|
| (161) |
|
|
| Non-U.S. |
|
|
| (510) |
|
| (95) |
|
| Chemical |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 288 |
|
| 161 |
|
|
| Non-U.S. |
|
|
| (144) |
|
| 357 |
|
| Corporate and financing |
|
|
| (679) |
|
| (788) | |
|
| Corporate total |
|
|
| (610) |
|
| 2,350 | |
|
|
|
|
|
|
|
|
|
|
|
| Sales and Other Operating Revenue |
|
|
|
|
|
|
| ||
|
| Upstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 1,777 |
|
| 2,693 |
|
|
| Non-U.S. |
|
|
| 2,567 |
|
| 3,804 |
|
| Downstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 15,384 |
|
| 15,642 |
|
|
| Non-U.S. |
|
|
| 29,304 |
|
| 32,297 |
|
| Chemical |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 2,296 |
|
| 2,505 |
|
|
| Non-U.S. |
|
|
| 3,800 |
|
| 4,695 |
|
| Corporate and financing |
|
|
| 6 |
|
| 10 | |
|
| Corporate total |
|
|
| 55,134 |
|
| 61,646 | |
|
|
|
|
|
|
|
|
|
|
|
| Intersegment Revenue |
|
|
|
|
|
|
| ||
|
| Upstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 2,273 |
|
| 2,311 |
|
|
| Non-U.S. |
|
|
| 6,387 |
|
| 7,129 |
|
| Downstream |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 3,952 |
|
| 4,761 |
|
|
| Non-U.S. |
|
|
| 5,124 |
|
| 6,169 |
|
| Chemical |
|
|
|
|
|
|
| |
|
|
| United States |
|
|
| 1,766 |
|
| 1,889 |
|
|
| Non-U.S. |
|
|
| 1,263 |
|
| 1,547 |
|
| Corporate and financing |
|
|
| 55 |
|
| 53 |
1514
| Geographic |
|
|
|
|
|
|
|
|
|
|
| ||
|
|
| Three Months Ended |
|
| Six Months Ended | ||||||||
|
|
|
|
| June 30, |
|
| June 30, | ||||||
| Sales and Other Operating Revenue |
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 | ||
|
|
|
|
| (millions of dollars) | |||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| United States |
| 23,819 |
|
| 25,225 |
|
| 44,659 |
|
| 47,570 | ||
| Non-U.S. |
| 43,672 |
|
| 46,231 |
|
| 84,478 |
|
| 89,322 | ||
|
| Total |
| 67,491 |
|
| 71,456 |
|
| 129,137 |
|
| 136,892 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Significant Non-U.S. revenue sources include: (1) |
|
|
|
|
|
|
|
|
|
|
| ||
|
| Canada |
| 5,346 |
|
| 6,163 |
|
| 10,196 |
|
| 11,538 | |
|
| United Kingdom |
| 4,781 |
|
| 4,771 |
|
| 9,202 |
|
| 9,443 | |
|
| Belgium |
| 3,245 |
|
| 4,090 |
|
| 6,773 |
|
| 8,067 | |
|
| France |
| 3,258 |
|
| 3,572 |
|
| 6,332 |
|
| 6,817 | |
|
| Singapore |
| 3,135 |
|
| 3,458 |
|
| 6,255 |
|
| 6,885 | |
|
| Italy |
| 2,494 |
|
| 3,214 |
|
| 5,139 |
|
| 6,368 | |
|
| Germany |
| 2,019 |
|
| 2,435 |
|
| 3,916 |
|
| 4,666 |
| Geographic |
|
|
|
|
|
| ||
|
|
|
| Three Months Ended | |||||
|
|
|
|
|
| March 31, | |||
| Sales and Other Operating Revenue |
|
| 2020 |
|
| 2019 | ||
|
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
|
| United States |
|
| 19,457 |
|
| 20,840 | ||
| Non-U.S. |
|
| 35,677 |
|
| 40,806 | ||
|
| Total |
|
| 55,134 |
|
| 61,646 | |
|
|
|
|
|
|
|
|
|
|
| Significant Non-U.S. revenue sources include: (1) |
|
|
|
|
|
| ||
|
| Canada |
|
| 3,823 |
|
| 4,850 | |
|
| United Kingdom |
|
| 3,691 |
|
| 4,421 | |
|
| Singapore |
|
| 2,616 |
|
| 3,121 | |
|
| France |
|
| 2,589 |
|
| 3,074 | |
|
| Italy |
|
| 1,958 |
|
| 2,645 | |
|
| Belgium |
|
| 1,889 |
|
| 3,529 |
(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.Leases
A previously recorded operating lease was renegotiated in the first quarter of 2020 and the new agreement no longer meets the definition of a lease. At year-end 2019, this agreement had been reported as a right of use asset of $1.3 billion and a lease liability of $1.3 billion in the “Other” operating lease category. The new agreement will be reported as a take-or-pay obligation.
1615
9. Leases10.Allowance for Current Expected Credit Loss (CECL)
Effective January 1, 2020, the Corporation adopted the Financial Accounting Standards Board’s update, Financial Instruments – Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and reasonable and supportable forecasts. The standard requires this expected loss methodology for trade receivables, certain other financial assets and off-balance sheet credit exposures. The cumulative effect adjustment related to the adoption of this standard reduced equity by $93 million.
The Corporation is exposed to credit losses primarily through sales of petroleum products, crude oil, NGLs and its consolidated affiliates generally purchasenatural gas, as well as loans to equity companies and joint venture receivables. A counterparty’s ability to pay is assessed through a credit review process that considers payment terms, the property, plantcounterparty’s established credit rating or the Corporation’s assessment of the counterparty’s credit worthiness, contract terms, country of operation, and equipment usedother risks. The Corporation can require prepayment or collateral to mitigate certain credit risks.
The Corporation groups financial assets into portfolios that share similar risk characteristics for purposes of determining the allowance for credit losses. Each reporting period, the Corporation assesses whether a significant change in operations, but therethe risk of credit loss has occurred. Among the quantitative and qualitative factors considered are situations wherehistorical financial data, current conditions, industry and country risk, current credit ratings and the quality of third-party guarantees secured from the counterparty. Financial assets are leased, primarilywritten off in whole, or in part, when practical recovery efforts have been exhausted and no reasonable expectation of recovery exists. Subsequent recoveries of amounts previously written off are recognized in earnings. The Corporation manages receivable portfolios using past due balances as a key credit quality indicator.
The Corporation recognizes a credit allowance for drilling equipment, tankers, office buildings, railcars, and other moveable equipment. Right of use assets and lease liabilities are establishedoff-balance sheet credit exposures as a liability on the balance sheet, separate from the allowance for leases with an expected term greater than one year, by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed paymentcredit losses related to service costs for drilling equipmentrecognized financial assets. Among these exposures are unfunded loans to equity companies and tankers is excluded fromfinancial guarantees that cannot be cancelled unilaterally by the calculation of right of use assets and lease liabilities. Generally assets are leased only for a portion of their useful lives, and are accounted for as operating leases. In limited situations assets are leased for nearly all of their useful lives, and are accounted for as finance leases.Corporation.
Variable payments under these lease agreements are not significant. Residual value guarantees, restrictions, or covenants related to leases, and transactions with related parties are also not significant. In general, leases are capitalized usingDuring the incremental borrowing ratefirst quarter of 2020, the COVID-19 pandemic spread rapidly through most areas of the leasing affiliate.world resulting in economic uncertainty, global financial market volatility, and negative effects in the credit markets. The Corporation’s activities as a lessor are not significant.
At adoptionCorporation has considered these effects, along with the significantly lower balances of trade receivables at the end of the lease accounting change (see Note 2)quarter, in its estimate of credit losses and concluded no material adjustment to credit allowances in the quarter was required. At March 31, 2020, the Corporation’s evaluation of financial assets under Financial Instruments – Credit Losses (Topic 326), on January 1, 2019, an operating lease liabilityas amended, included $17,740 million of $3.3 billion was recordednotes and the operating lease rightaccounts receivable, net of use asset was $4.3 billion, including $1.0 billionallowances of previously recorded prepaid leases. There was no cumulative earnings effect adjustment.$148 million, and $9,211 million of loans and long-term receivables, net of allowances of $441 million, and certain other financial assets where there is immaterial risk of loss.
|
|
|
| Operating Leases |
|
| |||||
|
|
|
|
| Drilling Rigs |
|
|
|
| ||
|
|
|
|
| and Related |
|
|
| Finance | ||
|
|
|
|
| Equipment | Other |
| Total |
| Leases | |
|
|
|
|
| (millions of dollars) |
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
Lease Cost |
|
| Three Months Ended June 30, 2019 | ||||||||
Operating lease cost |
|
| 57 |
| 313 |
| 370 |
|
| ||
Short-term and other (net of sublease rental income) |
|
| 258 |
| 357 |
| 615 |
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of right of use assets |
|
|
|
|
|
|
|
| 31 | ||
Interest on lease liabilities |
|
|
|
|
|
|
|
| 36 | ||
| Total |
|
| 315 |
| 670 |
| 985 |
| 67 | |
|
|
|
|
|
|
|
|
|
|
|
|
Lease Cost |
|
| Six Months Ended June 30, 2019 | ||||||||
Operating lease cost |
|
| 97 |
| 568 |
| 665 |
|
| ||
Short-term and other (net of sublease rental income) |
|
| 453 |
| 630 |
| 1,083 |
|
| ||
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of right of use assets |
|
|
|
|
|
|
|
| 62 | ||
Interest on lease liabilities |
|
|
|
|
|
|
|
| 67 | ||
| Total |
|
| 550 |
| 1,198 |
| 1,748 |
| 129 | |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reserve for | Liabilities for |
| |||
|
|
| Notes and Other | Off Balance |
| |||
|
|
| Receivables and Loans | Sheet Assets |
| |||
|
|
| Trade | Other |
|
|
| Total |
|
|
| (millions of dollars) | |||||
|
|
|
|
|
|
|
|
|
Balance at December 31, 2019 | 34 | 469 |
| - |
| 503 | ||
Cumulative effect of accounting change | 52 | 45 |
| 12 |
| 109 | ||
Current period provision | 4 | 1 |
| (1) |
| 4 | ||
Write-offs charged against the allowance | (1) | - |
| - |
| (1) | ||
Other | (1) | (14) |
| 2 |
| (13) | ||
Balance at March 31, 2020 | 88 | 501 |
| 13 |
| 602 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
17
|
|
|
| Operating Leases |
|
| |||||
|
|
|
|
| Drilling Rigs |
|
|
|
| ||
|
|
|
|
| and Related |
|
|
| Finance | ||
|
|
|
|
| Equipment | Other |
| Total |
| Leases | |
|
|
|
|
| (millions of dollars) |
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet |
|
| June 30, 2019 | ||||||||
Right of use assets |
|
|
|
|
|
|
|
|
| ||
| Included in Other assets, including intangibles - net |
|
| 616 |
| 5,649 |
| 6,265 |
|
| |
| Included in Property, plant and equipment - net |
|
|
|
|
|
|
|
| 1,536 | |
|
| Total right of use assets |
|
| 616 |
| 5,649 |
| 6,265 |
| 1,536 |
|
|
|
|
|
|
|
|
|
|
|
|
Lease liability due within one year |
|
|
|
|
|
|
|
|
| ||
| Included in Accounts payable and accrued liabilities |
|
| 221 |
| 903 |
| 1,124 |
| 32 | |
| Included in Notes and loans payable |
|
|
|
|
|
|
|
| 172 | |
Long-term lease liability |
|
|
|
|
|
|
|
|
| ||
| Included in Other long-term obligations |
|
| 387 |
| 3,789 |
| 4,176 |
|
| |
| Included in Long-term debt |
|
|
|
|
|
|
|
| 1,299 | |
| Included in Long-term obligations to equity companies |
|
|
|
|
|
|
|
| 140 | |
|
| Total lease liability |
|
| 608 |
| 4,692 |
| 5,300 |
| 1,643 |
|
|
|
|
|
|
|
|
|
|
|
|
Maturity Analysis of Lease Liabilities |
|
| June 30, 2019 | ||||||||
2019 remaining months |
|
| 117 |
| 554 |
| 671 |
| 234 | ||
2020 |
|
| 211 |
| 914 |
| 1,125 |
| 206 | ||
2021 |
|
| 120 |
| 698 |
| 818 |
| 183 | ||
2022 |
|
| 61 |
| 500 |
| 561 |
| 175 | ||
2023 |
|
| 41 |
| 448 |
| 489 |
| 174 | ||
2024 |
|
| 30 |
| 404 |
| 434 |
| 173 | ||
2025 and beyond |
|
| 69 |
| 1,877 |
| 1,946 |
| 2,431 | ||
| Total lease payments |
|
| 649 |
| 5,395 |
| 6,044 |
| 3,576 | |
Discount to present value |
|
| (41) |
| (703) |
| (744) |
| (1,933) | ||
| Total lease liability |
|
| 608 |
| 4,692 |
| 5,300 |
| 1,643 | |
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average remaining lease term - years |
|
| 4 |
| 9 |
| 8 |
| 25 | ||
Weighted average discount rate - percent |
|
| 3.0% |
| 3.2% |
| 3.2% |
| 9.8% | ||
|
|
|
|
|
|
|
|
|
|
|
|
In addition to the lease liabilities in the table immediately above, at June 30, 2019, undiscounted commitments for leases not yet commenced totaled $0.8 billion for operating leases and $3.4 billion for finance leases. The finance leases relate to floating production storage and offloading vessels and a long-term hydrogen purchase agreement. The underlying assets for these finance leases were primarily designed by, and are being constructed by, the lessors.
|
|
|
| Operating Leases |
|
| |||||
|
|
|
|
| Drilling Rigs |
|
|
|
| ||
|
|
|
|
| and Related |
|
|
| Finance | ||
|
|
|
|
| Equipment | Other |
| Total |
| Leases | |
|
|
|
|
| (millions of dollars) |
|
| ||||
|
|
|
|
|
|
|
|
|
|
|
|
Other Information |
|
| Six Months Ended June 30, 2019 | ||||||||
Cash paid for amounts included in the measurement of lease liabilities |
|
|
|
|
|
|
|
|
| ||
| Cash flows from operating activities |
|
|
|
| 504 |
| 504 |
| 27 | |
| Cash flows from investing activities |
|
| 110 |
|
|
| 110 |
|
| |
| Cash flows from financing activities |
|
|
|
|
|
|
|
| 32 | |
|
|
|
|
|
|
|
|
|
|
|
|
Noncash right of use assets recorded for lease liabilities |
|
|
|
|
|
|
|
|
| ||
| For January 1 adoption of Topic 842 |
|
| 445 |
| 2,818 |
| 3,263 |
|
| |
| In exchange for new lease liabilities during the period |
|
| 257 |
| 2,305 |
| 2,562 |
|
| |
|
|
|
|
|
|
|
|
|
|
|
|
18
At December 31, 2018, the Corporation and its consolidated subsidiaries held noncancelable operating leases and charters covering drilling equipment, tankers and other assets with minimum undiscounted lease commitments totaling $6,112 million as indicated in the table. Estimated related sublease rental income from noncancelable subleases totals $22 million.
�� |
| Lease Payments | |||||
|
| Under Minimum Commitments | |||||
|
| As of December 31, 2018 | |||||
|
|
| Drilling Rigs |
|
| ||
|
|
| and Related |
|
| ||
|
|
| Equipment | Other |
| Total | |
|
|
| (millions of dollars) | ||||
|
|
|
|
|
|
|
|
2019 |
|
| 222 |
| 934 |
| 1,156 |
2020 |
|
| 166 |
| 819 |
| 985 |
2021 |
|
| 107 |
| 658 |
| 765 |
2022 |
|
| 43 |
| 506 |
| 549 |
2023 |
|
| 32 |
| 422 |
| 454 |
2024 and beyond |
|
| 53 |
| 2,150 |
| 2,203 |
Total |
|
| 623 |
| 5,489 |
| 6,112 |
Net rental cost under both cancelable and noncancelable operating leases incurred during 2018, 2017 and 2016 were as follows:
|
|
|
| For full year | ||||
|
|
|
| 2018 |
| 2017 |
| 2016 |
|
|
|
| (millions of dollars) | ||||
|
|
|
|
|
|
|
|
|
Rental cost |
|
|
|
|
|
| ||
| Drilling rigs and related equipment |
| 723 |
| 792 |
| 1,274 | |
| Other (net of sublease rental income) |
| 1,992 |
| 1,826 |
| 1,817 | |
|
| Total |
| 2,715 |
| 2,618 |
| 3,091 |
1916
EXXON MOBIL CORPORATION
Item 2.Management's Discussion and Analysis of Financial Condition and Results of Operations
FUNCTIONAL EARNINGS SUMMARY | |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Second Quarter |
|
| First Six Months | ||||||
Earnings (U.S. GAAP) |
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 | |
|
|
| (millions of dollars) | ||||||||||
Upstream |
|
|
|
|
|
|
|
|
|
|
|
| |
| United States |
|
| 335 |
|
| 439 |
|
| 431 |
|
| 868 |
| Non-U.S. |
|
| 2,926 |
|
| 2,601 |
|
| 5,706 |
|
| 5,669 |
Downstream |
|
|
|
|
|
|
|
|
|
|
|
| |
| United States |
|
| 310 |
|
| 695 |
|
| 149 |
|
| 1,014 |
| Non-U.S. |
|
| 141 |
|
| 29 |
|
| 46 |
|
| 650 |
Chemical |
|
|
|
|
|
|
|
|
|
|
|
| |
| United States |
|
| (6) |
|
| 453 |
|
| 155 |
|
| 956 |
| Non-U.S. |
|
| 194 |
|
| 437 |
|
| 551 |
|
| 945 |
Corporate and financing |
|
| (770) |
|
| (704) |
|
| (1,558) |
|
| (1,502) | |
| Net income attributable to ExxonMobil (U.S. GAAP) |
|
| 3,130 |
|
| 3,950 |
|
| 5,480 |
|
| 8,600 |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Earnings per common share (dollars) |
|
| 0.73 |
|
| 0.92 |
|
| 1.28 |
|
| 2.01 | |
|
|
|
|
|
|
|
|
|
|
|
|
| |
Earnings per common share - assuming dilution (dollars) |
|
| 0.73 |
|
| 0.92 |
|
| 1.28 |
|
| 2.01 |
FUNCTIONAL EARNINGS SUMMARY | |||||||
|
|
|
|
|
|
|
|
|
|
|
| First Three Months | |||
Earnings (Loss) (U.S. GAAP) |
|
| 2020 |
|
| 2019 | |
|
|
|
| (millions of dollars) | |||
Upstream |
|
|
|
|
|
| |
| United States |
|
| (704) |
|
| 96 |
| Non-U.S. |
|
| 1,240 |
|
| 2,780 |
Downstream |
|
|
|
|
|
| |
| United States |
|
| (101) |
|
| (161) |
| Non-U.S. |
|
| (510) |
|
| (95) |
Chemical |
|
|
|
|
|
| |
| United States |
|
| 288 |
|
| 161 |
| Non-U.S. |
|
| (144) |
|
| 357 |
Corporate and financing |
|
| (679) |
|
| (788) | |
| Net income (loss) attributable to ExxonMobil (U.S. GAAP) |
|
| (610) |
|
| 2,350 |
|
|
|
|
|
|
| |
Earnings (Loss) per common share (dollars) |
|
| (0.14) |
|
| 0.55 | |
|
|
|
|
|
|
|
|
Earnings (Loss) per common share - assuming dilution (dollars) |
| (0.14) |
|
| 0.55 | ||
|
|
|
|
|
|
|
|
References in this discussion to Corporate earnings (loss) mean net income (loss) attributable to ExxonMobil (U.S. GAAP) from the consolidated income statement. Unless otherwise indicated, references to earnings (loss), Upstream, Downstream, Chemical and Corporate and financing segment earnings (loss), and earnings (loss) per share are ExxonMobil's share after excluding amounts attributable to noncontrolling interests.
CURRENT ECONOMIC CONDITIONS
During the first quarter of 2020, the balance of supply and demand for petroleum and petrochemical products experienced two significant disruptive effects. On the demand side, the COVID-19 pandemic spread rapidly through most areas of the world resulting in substantial reductions in consumer and business activity and significantly reduced demand for crude oil, natural gas, and petroleum products. This reduction in demand coincided with announcements of increased production in certain key oil producing countries which led to sharp declines in prices for crude oil and other petrochemical products.Against this backdrop of economic uncertainty, global financial markets have experienced significant volatility and disruption, which at times has negatively impacted the efficiency of credit markets and available pools of liquidity.
In response to these conditions, the Corporation announced significant reductions in 2020 capital spending and operating expenses. Capital and exploration expenditures for 2020 are now expected to be $23 billion, down from the previously announced $33 billion. The Corporation’s near-term reduction in capital expenditures has resulted in a downward revision to proved reserves estimates reported in the 2019 Form 10-K of approximately 1 billion oil-equivalent barrels, mainly related to unconventional drilling in the United States. Consequently, unit-of-production depreciation and depletion rates for Upstream assets will be higher beginning in the first quarter.
The Corporation also took additional actions to strengthen its liquidity including issuing $8.5 billion of long-term debt securities in the first quarter of 2020 and issuing a further $9.5 billion of long-term debt securities subsequent to the date of the financial statements as described in Note 7. In the first quarter of 2020, the Corporation established a short-term credit facility to provide an additional $7.0 billion of borrowing capacity for general corporate purposes to supplement its existing short-term revolving credit facilities of $7.9 billion as of year-end 2019. The majority of these credit facilities will expire within one year and may be renewed or replaced according to the Corporation’s financing needs and business environment. As of March 31, 2020, no material amounts have been drawn on these facilities.
17
Should industry conditions near the end of the first quarter persist for an extended period into the future, the Corporation expects lower realized prices for its products to result in lower earnings and operating cash flow than in previous quarters. Amidst these conditions, project deferrals and idling of capacity will continue or may increase, and project cancellations could occur, resulting in lower volumes across one or more business segments. The capital spending reductions will result in lower near-term production volumes in the Upstream and delays in previously anticipated volume increases in future years. While the Corporation’s view of long-term supply and demand fundamentals has not changed significantly, any future reduction in the range of its long-term price outlooks could put a significant portion of its long-lived assets at risk for impairment. However, due to the inherent difficulty in predicting future commodity prices, and the relationship between industry prices and costs, it is not practicable to reasonably estimate the existence or range of any potential future impairment charges related to the Corporation’s long-lived assets.
As disclosed in ExxonMobil’s 2019 Form 10-K, low crude oil and natural gas prices can impact the Corporation’s proved reserves as reported under Securities and Exchange Commission (SEC) rules. Average year-to-date crude oil and natural gas prices have been significantly affected by the very low prices experienced near the end of the first quarter. If prices seen near the end of the first quarter persist for the remainder of the year, under the SEC definition of proved reserves, certain quantities of crude oil and natural gas will not qualify as proved reserves at year-end 2020. Since proved reserves estimates are affected by a number of factors including timing and completion of development projects, reservoir performance, market prices and differentials, costs, fiscal and commercial terms, government policies, regulatory approvals and partner considerations, it is not practicable to reasonably estimate the range of any potential future revisions to the Corporation’s proved reserves for year-end 2020 reporting.
The Corporation has taken steps, in line with government guidelines and restrictions, to limit the spread of COVID-19 among employees, contractors and the broader community, while also maintaining operations to ensure reliable supply of products to customers. The Corporation maintains robust business continuity plans, but should these efforts not be successful the Corporation could experience declines in workforce productivity that exacerbate some of the adverse operating and financial effects noted above.
REVIEW OF SECONDFIRST QUARTER 20192020 RESULTS
ExxonMobil’s secondfirst quarter 2019 earnings2020 results were $3.1 billion,a loss of $610 million, or $0.73$0.14 per diluted share, compared with $4.0earnings of $2.4 billion a year earlier. The decrease in earnings was primarily the result of unfavorable non-operational impacts and lower Upstream realizations, weaker Downstream and Chemical margins, higher scheduled maintenance activity, and increased expenses.realizations. These impacts were partly offset by higher Downstream margins on favorable mark-to-market derivatives, reduced maintenance activity mainly in the Downstream, and Upstream volume growthgrowth. Unfavorable non-operational impacts reflected an inventory write-down and favorable one-time items.
Earnings of $5.5 billion for the first six months of 2019 were down 36 percent from $8.6 billionimpairments, with further information provided in 2018.
Earnings per share assuming dilution were $1.28.
Capital and exploration expenditures were $15.0 billion, up 30 percent from 2018.Note 2.
Oil-equivalent production was 3.94.0 million barrels per day, up 52 percent from the prior year. Excluding entitlement effects and divestments, oil-equivalent production was also up 5 percent.
The Corporation distributed $7.2$3.7 billion in dividends to shareholders.
20
|
|
|
|
| Second Quarter |
|
| First Six Months | ||||||
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
| (millions of dollars) | ||||||||||
Upstream earnings |
|
|
|
|
|
|
|
|
|
|
|
| ||
| United States |
|
| 335 |
|
| 439 |
|
| 431 |
|
| 868 | |
| Non-U.S. |
|
| 2,926 |
|
| 2,601 |
|
| 5,706 |
|
| 5,669 | |
|
| Total |
|
| 3,261 |
|
| 3,040 |
|
| 6,137 |
|
| 6,537 |
|
|
|
|
| First Three Months | |||
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
| (millions of dollars) | |||
Upstream results |
|
|
|
|
|
| ||
| United States |
|
| (704) |
|
| 96 | |
| Non-U.S. |
|
| 1,240 |
|
| 2,780 | |
|
| Total |
|
| 536 |
|
| 2,876 |
Upstream earnings were $3,261$536 million in the secondfirst quarter of 2019, up $2212020, down $2,340 million from the secondfirst quarter of 2018.2019.
· |
|
|
· |
|
|
· | All other items |
|
· | U.S. Upstream |
|
· | Non-U.S. Upstream earnings were |
|
· | On an oil-equivalent basis, production increased |
|
· | Liquids production totaled |
|
· | Natural gas production was |
Upstream earnings were $6,137 million in the first six months of 2019, down $400 million from the first six months of 2018.
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
2118
|
|
|
| Second Quarter |
|
| First Six Months |
|
| First Quarter | |||||||
Upstream additional information | Upstream additional information |
|
|
| (thousands of barrels daily) |
| Upstream additional information |
| (thousands of barrels daily) | ||||||||
Volumes reconciliation (Oil-equivalent production)(1) | Volumes reconciliation (Oil-equivalent production)(1) |
|
|
|
|
|
|
|
|
| Volumes reconciliation (Oil-equivalent production) (1) |
|
|
|
| ||
2018 |
|
|
| 3,647 |
|
|
|
| 3,768 |
| |||||||
2019 | 2019 |
|
|
| 3,981 |
| |||||||||||
| Entitlements - Net Interest |
|
|
| - |
|
|
|
| - |
| Entitlements - Net Interest |
|
|
| (6) |
|
| Entitlements - Price / Spend / Other |
|
|
| 20 |
|
|
|
| 14 |
| Entitlements - Price / Spend / Other |
|
|
| 55 |
|
| Quotas |
|
|
| - |
|
|
|
| - |
| Quotas |
|
|
| - |
|
| Divestments |
|
|
| (9) |
|
|
|
| (17) |
| Divestments |
|
|
| (177) |
|
| Growth / Other |
|
|
| 251 |
|
|
|
| 180 |
| Growth / Other |
|
|
| 193 |
|
2019 |
|
|
| 3,909 |
|
|
|
| 3,945 |
| |||||||
2020 | 2020 |
|
|
| 4,046 |
| |||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. | (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. |
|
| (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one 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.
2219
|
|
|
|
| Second Quarter |
|
| First Six Months | ||||||
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
| (millions of dollars) | ||||||||||
Downstream earnings |
|
|
|
|
|
|
|
|
|
|
|
| ||
| United States |
|
| 310 |
|
| 695 |
|
| 149 |
|
| 1,014 | |
| Non-U.S. |
|
| 141 |
|
| 29 |
|
| 46 |
|
| 650 | |
|
| Total |
|
| 451 |
|
| 724 |
|
| 195 |
|
| 1,664 |
|
|
|
|
| First Three Months | |||
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
| (millions of dollars) | |||
Downstream results |
|
|
|
|
|
| ||
| United States |
|
| (101) |
|
| (161) | |
| Non-U.S. |
|
| (510) |
|
| (95) | |
|
| Total |
|
| (611) |
|
| (256) |
Downstream earningsresults were $451a loss of $611 million in the secondfirst quarter of 2019, down $2732020, compared with a loss of $256 million fromin the secondfirst quarter of 2018.2019.
· | Margins |
|
· |
| |
· | All other items reduced earnings by $2,010 million, mainly due to unfavorable non-operational impacts associated with an inventory write-down of $1,600 million and impairments of $340 million. | |
· | U.S. Downstream results were a loss of $101 million, compared with a loss of $161 million in the prior year quarter. | |
· | Non-U.S. Downstream results were a loss of $510 million, compared with a loss of $95 million in the prior year quarter. | |
· | Petroleum product sales of 5.3 million barrels per day were 128,000 barrels per day lower than the prior year quarter. |
|
|
|
|
| First Three Months | |||
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
| (millions of dollars) | |||
Chemical results |
|
|
|
|
|
| ||
| United States |
|
| 288 |
|
| 161 | |
| Non-U.S. |
|
| (144) |
|
| 357 | |
|
| Total |
|
| 144 |
|
| 518 |
Chemical earnings were $144 million in the first quarter of 2020, down $374 million from the first quarter of 2019.
· | Higher margins increased earnings by $10 million. | |
· | Volume and mix effects decreased earnings by $60 million. |
|
· | All other items | |
|
| |
|
| |
|
|
Downstream earnings were $195 million in the first six months of 2019, down $1,469 million from the first six months of 2018.
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
23
|
|
|
|
| Second Quarter |
|
| First Six Months | ||||||
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
| (millions of dollars) | ||||||||||
Chemical earnings |
|
|
|
|
|
|
|
|
|
|
|
| ||
| United States |
|
| (6) |
|
| 453 |
|
| 155 |
|
| 956 | |
| Non-U.S. |
|
| 194 |
|
| 437 |
|
| 551 |
|
| 945 | |
|
| Total |
|
| 188 |
|
| 890 |
|
| 706 |
|
| 1,901 |
Chemical earnings were $188 million in the second quarter of 2019, down $702 million from the second quarter of 2018.
|
| |
|
| |
|
|
|
· | U.S. Chemical earnings were |
|
· | Non-U.S. Chemical results were a loss of $144 million, compared with earnings |
|
· |
|
|
Chemical earnings were $706 million in the first six months of 2019, down $1,195 million from the first six months of 2018.
|
| |
|
| |
|
| |
|
| |
|
| |
|
|
|
|
| Second Quarter |
|
| First Six Months | ||||||
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
| (millions of dollars) | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
Corporate and financing earnings |
|
| (770) |
|
| (704) |
|
| (1,558) |
|
| (1,502) |
|
|
|
|
| First Three Months | |||
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
| (millions of dollars) | |||
|
|
|
|
|
|
|
|
|
Corporate and financing results |
|
| (679) |
|
| (788) |
Corporate and financing expenses were $770 million for the second quarter of 2019, up $66 million from the second quarter of 2018.
Corporate and financing expenses were $1,558$679 million for the first six monthsquarter of 2019, up $562020, down $109 million from the first six monthsquarter of 2018.2019.
2420
LIQUIDITY AND CAPITAL RESOURCES | ||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Second Quarter |
|
| First Six Months | ||||||
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
| (millions of dollars) | ||||||||||
Net cash provided by/(used in) |
|
|
|
|
|
|
|
|
|
|
|
| ||
| Operating activities |
|
|
|
|
|
|
|
| 14,285 |
|
| 16,299 | |
| Investing activities |
|
|
|
|
|
|
|
| (12,670) |
|
| (6,955) | |
| Financing activities |
|
|
|
|
|
|
|
| (496) |
|
| (8,986) | |
Effect of exchange rate changes |
|
|
|
|
|
|
|
| 52 |
|
| (105) | ||
Increase/(decrease) in cash and cash equivalents |
|
|
|
|
|
|
|
| 1,171 |
|
| 253 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (at end of period) |
|
|
|
|
|
|
|
| 4,213 |
|
| 3,430 | ||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flow from operations and asset sales |
|
|
|
|
|
|
|
|
|
|
|
| ||
| Net cash provided by operating activities (U.S. GAAP) |
|
| 5,947 |
|
| 7,780 |
|
| 14,285 |
|
| 16,299 | |
| Proceeds associated with sales of subsidiaries, property, |
|
|
|
|
|
|
|
|
|
|
|
| |
|
| plant & equipment, and sales and returns of investments |
|
| 33 |
|
| 307 |
|
| 140 |
|
| 1,748 |
| Cash flow from operations and asset sales |
|
| 5,980 |
|
| 8,087 |
|
| 14,425 |
|
| 18,047 |
LIQUIDITY AND CAPITAL RESOURCES | ||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
| First Three Months | |||
|
|
|
|
| 2020 |
|
| 2019 |
|
|
|
|
| (millions of dollars) | |||
Net cash provided by/(used in) |
|
|
|
|
|
| ||
| Operating activities |
|
| 6,274 |
|
| 8,338 | |
| Investing activities |
|
| (6,367) |
|
| (5,793) | |
| Financing activities |
|
| 8,785 |
|
| (1,044) | |
Effect of exchange rate changes |
|
| (369) |
|
| 43 | ||
Increase/(decrease) in cash and cash equivalents |
|
| 8,323 |
|
| 1,544 | ||
|
|
|
|
|
|
|
|
|
Cash and cash equivalents (at end of period) |
|
| 11,412 |
|
| 4,586 | ||
|
|
|
|
|
|
|
|
|
Cash flow from operations and asset sales |
|
|
|
|
|
| ||
| Net cash provided by operating activities (U.S. GAAP) |
|
| 6,274 |
|
| 8,338 | |
| Proceeds associated with sales of subsidiaries, property, plant & equipment, |
|
|
|
|
| ||
|
| and sales and returns of investments |
|
| 86 |
|
| 107 |
| Cash flow from operations and asset sales |
|
| 6,360 |
|
| 8,445 |
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 secondfirst quarter of 20192020 was $6.0$6.4 billion, including asset sales of $33 million,$0.1 billion, a decrease of $2.1 billion from the comparable 20182019 period primarily reflecting lower earnings and unfavorable working capital impacts. Current market conditions and the ability of counterparties to secure financing may negatively affect the pace of asset sale proceeds.sales in 2020.
Cash provided by operating activities totaled $14.3$6.3 billion for the first sixthree months of 2019, $2.02020, $2.1 billion lower than 2018. The major source of funds was net2019. Net income including noncontrolling interests was a loss of $5.8$0.8 billion, a decrease of $3.0$3.2 billion from the prior year period. The adjustmentadjustments for the noncash provision of $9.2provisions were $5.8 billion for depreciation and depletion was up $0.1and $2.2 billion from 2018.for the lower of cost or market inventory adjustment. Changes in operational working capital contributed $1.0were a reduction of $0.9 billion, compared to a decreasecontribution of $1.0$2.3 billion in the prior year period. All other items net decreased cash flows by $1.7$0.1 billion in 20192020 versus a reduction of $0.5$0.9 billion in 2018.2019. See the Condensed Consolidated Statement of Cash Flows for additional details.
Investing activities for the first sixthree months of 20192020 used net cash of $12.7$6.4 billion, an increase of $5.7$0.6 billion compared to the prior year. Spending for additions to property, plant and equipment of $11.4$5.9 billion was $3.1$0.7 billion higher than 2018.2019. Proceeds from asset sales of $0.1 billion decreased $1.6 billion.were comparable to the prior year. Investments and advances increased $1.0decreased $0.2 billion to $1.7$0.5 billion.
Cash flow from operations and asset sales in the first six months of 2019 was $14.4 billion, including asset sales of $0.1 billion, a decrease of $3.6 billion from the comparable 2018 period primarily reflecting lower earnings and asset sale proceeds.
Net cash used by financing activities was $0.5 billion in the first six months of 2019, a decrease of $8.5 billion from 2018. The net addition to short-term debt was $7.3 billion compared to a net reduction of $1.4 billion in 2018.
During the first sixquarter of 2020, the Corporation issued $8.5 billion of long-term debt. Net cash provided by financing activities was $8.8 billion in the first three months of 2020, $9.8 billion higher than 2019 reflecting the 2020 debt issuance.
Total debt at the end of the first quarter of 2020 was $59.6 billion compared to $46.9 billion at year-end 2019. The Corporation's debt to total capital ratio was 24.0percent at the end of the first quarter of 2020 compared to 19.1 percent at year-end 2019.
During the first three months of 2020, Exxon Mobil Corporation purchased 56 million shares of its common stock for the treasury at a gross cost of $0.4$0.3 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 decreased from 4,2374,234 million at year-end to 4,2314,228 million at the end of the secondfirst quarter of 2019.2020. 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 $7.2 billion to shareholders in the first six months of 2019 through dividends.
Total cash and cash equivalents of $4.2 billion at the end of the second quarter of 2019 compared to $3.0 billion at year-end 2018.
Total debt at the end of the second quarter of 2019 was $45.2 billion compared to $37.8 billion at year-end 2018. The Corporation's debt to total capital ratio was 18.5 percent at the end of the second quarter of 2019 compared to 16.0 percent at year-end 2018.
25
The Corporation hasretained access to significant capacity of long-term and short-term liquidity. Internally generated funds are generally expectedliquidity during the period despite challenging financial market conditions. Commercial paper continued to cover financial requirements, supplementedprovide short-term liquidity despite brief periods of reduced investor demand. The balance of commercial paper outstanding was $24.4 billion as of March 31, 2020. To provide increased liquidity and flexibility, the Corporation increased cash and cash equivalents by $8.3 billion to $11.4 billion during the first quarter of 2020. Additionally, in the first quarter of 2020, the Corporation established a short-term credit facility to provide an additional $7.0 billion of borrowing capacity for general corporate purposes to supplement its existing short-term revolving credit facilities of $7.9 billion as of year-end 2019. The majority of these credit facilities will expire within one year and may be renewed or replaced according to the Corporation’s financing needs and business environment. As of March 31, 2020, no material amounts have been drawn on these facilities.
21
Short-term and long-term debt is used to cover cash needs in excess of internally generated funds. Under current economic conditions, the level of debt is expected to increase in the near-term. The Corporation’s balance sheet strength and access to financial markets on attractive terms provide the capacity to continue investing in industry-advantaged projects to create value and preserve cash for the dividend. Management views the Corporation’s financial strength as required.a competitive advantage and maintaining a competitive credit position is an important factor in balancing capital allocation priorities and determining the pace of investments.
The Corporation distributed a total of $3.7 billion to shareholders in the first three months of 2020 through dividends.
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 |
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|
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| TAXES |
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|
| |||
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| ||
|
|
|
|
| Second Quarter |
|
| First Six Months |
|
|
|
| First Three Months |
| |||||||||||
|
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
| 2020 |
|
| 2019 |
| ||
|
|
|
| (millions of dollars) |
|
|
|
| (millions of dollars) |
| |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ||
Income taxes | Income taxes |
|
| 1,241 |
|
| 2,526 |
|
| 3,124 |
|
| 4,983 |
| Income taxes |
|
| 512 |
|
| 1,883 |
| |||
| Effective income tax rate |
|
| 34 | % |
| 44 | % |
| 44 | % |
| 42 | % | Effective income tax rate |
|
| 481 | % |
| 53 | % |
| ||
Total other taxes and duties (1) | Total other taxes and duties (1) |
|
| 8,366 |
|
| 9,003 |
|
| 16,453 |
|
| 17,818 |
| Total other taxes and duties (1) |
|
| 7,497 |
|
| 8,087 |
| |||
|
| Total |
|
| 9,607 |
|
| 11,529 |
|
| 19,577 |
|
| 22,801 |
| Total |
|
| 8,009 |
|
| 9,970 |
|
(1) Includes “Other taxes and duties” plus taxes that are included in “Production and manufacturing expenses” and “Selling, general and administrative expenses.”
Total taxes were $9.6$8.0 billion for the secondfirst quarter of 2019,2020, a decrease of $1.9$2.0 billion from 2018.2019. Income tax expense decreased by $1.3$1.4 billion to $1.2$0.5 billion reflecting lower pre-tax income.income resulting from lower commodity prices. The effective income tax rate was 34of 481 percent compared to 4453 percent in the prior year period primarily due to favorable one-timea change in mix of earnings in jurisdictions with varying tax items.rates. The change in mix of earnings was primarily driven by inventory valuation and impairment impacts. Total other taxes and duties decreased by $0.6 billion to $8.4 billion.
Total taxes were $19.6 billion for the first six months of 2019, a decrease of $3.2 billion from 2018. Income tax expense decreased by $1.9 billion to $3.1 billion reflecting lower pre-tax income. The effective income tax rate was 44 percent compared to 42 percent in the prior year period due to a higher share of earnings in higher tax jurisdictions. Total other taxes and duties decreased by $1.4 billion to $16.5$7.5 billion.
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 Corporation filed a refund suit for tax years 2006-2009 in U.S. federal district court with respect to the positions at issue for those years. On February 24, 2020, the Corporation received an adverse ruling on this suit and is assessing the ruling. 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. 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. The trial for those tax issues was completed at the end of June and the Corporation is awaiting a decision. 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.
2622
CAPITAL AND EXPLORATION EXPENDITURES | CAPITAL AND EXPLORATION EXPENDITURES |
| CAPITAL AND EXPLORATION EXPENDITURES |
| ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Second Quarter |
|
| First Six Months |
|
|
|
| First Three Months |
| |||||||||
|
|
|
| 2019 |
|
| 2018 |
|
| 2019 |
|
| 2018 |
|
|
|
| 2020 |
|
| 2019 |
|
|
|
| (millions of dollars) |
|
|
|
| (millions of dollars) |
| |||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Upstream (including exploration expenses) | Upstream (including exploration expenses) |
|
| 6,242 |
|
| 4,855 |
|
| 11,603 |
|
| 8,614 |
| Upstream (including exploration expenses) |
|
| 5,126 |
|
| 5,361 |
|
Downstream | Downstream |
|
| 1,113 |
|
| 1,230 |
|
| 1,942 |
|
| 1,844 |
| Downstream |
|
| 1,234 |
|
| 829 |
|
Chemical | Chemical |
|
| 718 |
|
| 533 |
|
| 1,414 |
|
| 998 |
| Chemical |
|
| 782 |
|
| 696 |
|
Other | Other |
|
| 6 |
|
| 9 |
|
| 10 |
|
| 38 |
| Other |
|
| 1 |
|
| 4 |
|
| Total |
|
| 8,079 |
|
| 6,627 |
|
| 14,969 |
|
| 11,494 |
| Total |
|
| 7,143 |
|
| 6,890 |
|
Capital and exploration expenditures in the secondfirst quarter of 20192020 were $8.1$7.1 billion, up 22 percent from the second quarter of 2018.
Capital and exploration expenditures in the first six months of 2019 were $15.0 billion, up 304 percent from the first six monthsquarter of 2018 due primarily to growth in the U.S. Permian Basin.2019. The Corporation anticipates an investment level of approximately $30$23 billion in 2019.2020, down from the previously announced $33 billion. Actual spending could vary depending on the progress of individual projects and property acquisitions.
RECENTLY ISSUED ACCOUNTING STANDARDS
Effective January 1, 2020, ExxonMobil will adopt the Financial Accounting Standards Board’s update, Financial Instruments – Credit Losses (Topic 326), as amended. The standard requires a valuation allowance for credit losses be recognized for certain financial assets that reflects the current expected credit loss over the asset’s contractual life. The valuation allowance considers the risk of loss, even if remote, and considers past events, current conditions and expectations of the future. The Corporation is evaluating the standard and its effect on the Corporation’s financial statements.
FORWARD-LOOKING STATEMENTS
Statements related to outlooks, projections, goals, targets, descriptions of strategic plans and objectives, and other statements of future events or conditions are forward-looking statements. Actual future results, including financial and operating performance, the impact of the COVID-19 pandemic on results; planned capital and cash operating expense reductions; total capital expenditures and mix; cash flow, dividend and shareholder returns; business and project plans, capacities,timing, costs and timing;capacities; resource recoveries and production rates; accounting effects resulting from market developments and ExxonMobil’s responsive actions; and the impact of new technologies, including to increase capital efficiency and production and to reduce greenhouse gas emissions, could differ materially due to a number of factors. These include global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and petrochemicalsfeedstocks and other market conditions that impact prices and differentials; the outcome of government policies and actions, including actions taken to address COVID-19 and to maintain the functioning of national and global economies and markets; the impact of company actions to protect the health and safety of employees, vendors, customers, and communities; actions of competitors and commercial counterparties; the ability to access short- and long-term debt markets on a timely and affordable basis; the severity, length and ultimate impact of COVID-19 on people and economies; reservoir performance; the outcome of exploration projects and timely completion of development and construction projects; the impact of fiscal and commercial terms and the outcome of commercial negotiations or acquisitions; changes in law, taxes, or regulation including environmental regulations, and timely granting of governmental permits; war, trade agreements and patterns, shipping blockades or harassment, and other political or security disturbances; opportunities for and regulatory approval of potential investments or divestments; the actions of competitors; the capture of efficiencies between business lines; unforeseen technical or operating difficulties; unexpected technological developments; the ability to bring new technologies to commercial scale on a cost-competitive basis, including large-scale hydraulic fracturing projects; general economic conditions including the occurrence and duration of economic recessions; the results of research programs; and other factors discussed under the heading Factors Affecting Future Results on the Investors page of our website at www.exxonmobil.com and in Item 1A of ExxonMobil’s 20182019 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.
2723
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risks for the sixthree months ended June 30, 2019,March 31, 2020, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2018.2019.
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 June 30, 2019.March 31, 2020. 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.
2824
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
As reported in the Corporation’s Form 10-Q for the firstsecond quarter of 2018, on January 25, 2018, ExxonMobil Oil Corporation (EMOC) received a letter setting forth a potential settlement of a previously issued notice of violation from the South Coast Air Quality Management District (SCAQMD) regarding EMOC’s formerly owned Torrance Refinery in California. The SCAQMD contended that the refinery failed to adequately identify and meet the requirements concerning pumps, sumps and other equipment subject to SCAQMD leak detection, repair and reporting requirements over an extended period of time prior to EMOC’s sale of the refinery, in violation of SCAQMD rules and the California Health and Safety Code provisions dealing with air quality. On May 6, 2019, SCAQMD and EMOC agreed on a penalty of $165,000 to resolve the matter, and EMOC has paid the penalty.
As reported in the Corporation’s Form 10-Q for the first quarter of 2019, on March 20, 2019,2006, the State of California Air Resources Board (CARB) informed EMOCNew York Attorney General (AG) sued a number of its intentionparties, including ExxonMobil, in New York state court, Albany County, seeking penalties relating to attempt to settle an enforcement matter involving the formerly owned Torrance Refineryalleged discharge of petroleum at a Mobil-branded service station in California under the California Health and Safety Code. Specifically, CARB contendedUniondale, New York. The suit (captioned "State of New York v. United Gas Corp. et al.") alleged that the refinery faileddischarge has impacted soil and groundwater in the vicinity of the service station. The AG and the seven defendants agreed to timely calibrate and inspect a greenhouse gas reporting meter as required by the applicable regulations and to accurately report greenhouse gas emissions from refinery operationssettlement terms in 2014 and 2015 in a manner consistent with applicable regulations. The alleged violations have been corrected. On or about June 7, 2019, CARB and EMOC agreed on a penalty of $493,500 to resolve the matter.January 2020. The settlement agreement has been executedincludes a payment of $3.2 million by EMOC,ExxonMobil and the company is awaiting executioncompletion of remediation work by CARB.one of the other defendants. No civil penalties were assessed for ExxonMobil or the other defendants.
InRegarding a matter last reported in the Corporation’s Form 10-Q10-K for first quarter of2019, on December 31, 2019, the U.S. Department of Justice (DOJ) and U.S. Environmental Protection Agency (EPA) filed a complaint and proposed consent decree on March 6, 2019, to settle a pending enforcement action with EMOC regarding alleged violations at EMOC’s Beaumont Refinery in Texas under the Clean Air Act and various sections of the EPA’s Chemical Accident Prevention Provisions. The DOJ and EPA had contended that EMOC failed to identify hazards, failed to design and maintain a safe facility, and failed to mitigate the consequences of a claimed accidental release related to a flash fire that occurred on April 17, 2013. Additionally, based on an on-site inspection in 2013, the DOJ and EPA claim that EMOC failed to include all covered processes in its risk management program and failed to inspect certain process equipment in a timely fashion. On May 3, 2019, the U.S.United States Federal District Court, for the EasternNorthern District of Texas Beaumont Division, accepted and entered final judgment upon a Consent Decree whereby(the FederalCourt), vacated the parties agreed to a civil penalty of $616,000, payment of $730,000 to a Supplemental Environmental Project (SEP), and additional corrective actions to resolve the matter. Payment of the penalty was made on or about May 13, 2019, and completion of the SEP is planned for the second quarter of 2020.
As most recently reported in the Corporation’s Form 10-Q for the first quarter of 2019, the DOJ contacted ExxonMobil Pipeline Company (EMPCo) concerning possible civil charges under the Clean Water Act arising in connection with the July 1, 2011, discharge of crude oil into the Yellowstone River from EMPCo’s Silvertip Pipeline near Laurel, Montana. In March 2019, EMPCo reached an agreement with the DOJ on a Consent Decree to resolve the matter. On June 4, 2019, the Consent Decree was enteredassessed by the U.S. District Court in the District of Montana, and on or about July 2, 2019, EMPCo paid a civil penalty to the United States in the amount of $1.05 million.
As last reported in the Corporation’s Form 10-Q for the first quarter of 2019, 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 on July 20, 2017, for allegedly violating the Ukraine-Related Sanctions Regulations, 31 C.F.R. part 589. The assessed civil penalty isvacated by the Federal Court was 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 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 ActOn April 8, 2020, OFAC and the United States Constitution, including onU.S. Department of Justice confirmed that the basis that it representsU.S. Federal Government will not seek an arbitrary and capricious actionappeal of the Federal Court’s final judgment vacating the penalty issued by OFAC and a violation ofagainst the Company’s due process rights.
Corporation.
Refer to the relevant portions of Note 3 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
Item 1A. Risk Factors
The risk factors that are discussed in Item 1A of the registrant’s Annual Report on Form 10-K for 2019, including those risk factors in respect of commodity supply and demand and public health, encompass, among other things, current market conditions of production oversupply as well as demand reduction due to the COVID-19 pandemic which has led to a significant decrease in commodity prices. Our future business results, including cash flows and financing needs, will be affected by the extent and duration of these conditions and the effectiveness of responsive actions that we and others take, including our actions to reduce capital and operating expenses and government actions to address the COVID-19 pandemic, as well as any resulting impact on national and global economies and markets. At this time, it is difficult to predict the timing of any resolution of the current supply imbalances and the ultimate impact of COVID-19, and we continue to monitor market developments and evaluate the impacts of decreased demand on our production levels, as well as impacts on project development and future production.
2925
| ||||||||||
| ||||||||||
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| |||||||||
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| |||||||||
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| |||||||
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| |||||||
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| ||||||
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| |||||||
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| |||||||
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| |||||||
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|
|
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
Issuer Purchase of Equity Securities for Quarter Ended March 31, 2020 | ||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| 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 2020 |
| 1,775,929 |
| $67.55 |
| 1,775,929 |
|
| ||
February 2020 |
| 1,760,540 |
| $58.75 |
| 1,760,540 |
|
| ||
March 2020 |
| 2,038,531 |
| $39.88 |
| 2,038,531 |
|
| ||
| Total |
|
| 5,575,000 |
|
|
| 5,575,000 |
| (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.
3026
INDEX TO EXHIBITS
Exhibit |
| Description |
|
|
|
By-Laws, as amended effective March 1, 2020 (incorporated by reference to Exhibit 3(ii) to the Registrant’s Report on Form 8-K of March 3, 2020). | ||
Standing resolution for non-employee director cash fees dated March 1, 2020. | ||
| Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer. | |
| Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Financial Officer. | |
| Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer. | |
| Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer. | |
| Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Financial Officer. | |
| Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer. | |
101 |
| Interactive Data |
104 |
| Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
|
|
|
3127
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: | By: | /s/ DAVID S. ROSENTHAL |
|
| David S. Rosenthal |
|
| Vice President, Controller and |
|
| Principal Accounting Officer |
|
|
|
3228