Form 10-Q
Table of Contents

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549

FORM 10-Q

 

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2011

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

incorporation or organization)

 

(I.R.S. Employer

Identification Number)

5959 Las Colinas Boulevard, Irving, Texas   75039-2298
(Address of principal executive offices)   (Zip Code)

(972) 444-1000

(Registrant’s telephone number, including area code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  x    No  ¨

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

 

Large accelerated filer     x     Accelerated filer   ¨
Non-accelerated filer   ¨     Smaller reporting company     ¨

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

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

 

Class

   Outstanding as of March 31, 2011
Common stock, without par value    4,926,085,717

 

 

 


Table of Contents

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2011

TABLE OF CONTENTS

 

          Page
Number
 
PART I. FINANCIAL INFORMATION   

Item 1.

   Financial Statements   

Condensed Consolidated Statement of Income
Three months ended March 31, 2011 and 2010

     3   

Condensed Consolidated Balance Sheet
As of March 31, 2011 and December 31, 2010

     4   

Condensed Consolidated Statement of Cash Flows
Three months ended March 31, 2011 and 2010

     5   

Condensed Consolidated Statement of Changes in Equity
Three months ended March 31, 2011 and 2010

     6   

Notes to Condensed Consolidated Financial Statements

     7   

Item 2.

   Management’s Discussion and Analysis of Financial Condition and Results of Operations      17   

Item 3.

   Quantitative and Qualitative Disclosures About Market Risk      22   

Item 4.

   Controls and Procedures      22   
PART II. OTHER INFORMATION   

Item 1.

   Legal Proceedings      22   

Item 2.

   Unregistered Sales of Equity Securities and Use of Proceeds      23   

Item 6.

   Exhibits      23   

Signature

     24   

Index to Exhibits

     25   

 

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PART I. FINANCIAL INFORMATION

 

Item 1. Financial Statements

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)

 

     Three Months Ended
March 31,
 
     2011      2010  

REVENUES AND OTHER INCOME

     

Sales and other operating revenue (1)

   $ 109,251       $ 87,037   

Income from equity affiliates

     3,827         2,537   

Other income

     926         677   
                 

Total revenues and other income

     114,004         90,251   
                 

COSTS AND OTHER DEDUCTIONS

     

Crude oil and product purchases

     60,497         46,785   

Production and manufacturing expenses

     9,520         8,435   

Selling, general and administrative expenses

     3,627         3,514   

Depreciation and depletion

     3,761         3,280   

Exploration expenses, including dry holes

     334         686   

Interest expense

     29         55   

Sales-based taxes (1)

     7,916         6,815   

Other taxes and duties

     9,403         8,613   
                 

Total costs and other deductions

     95,087         78,183   
                 

Income before income taxes

     18,917         12,068   

Income taxes

     8,004         5,493   
                 

Net income including noncontrolling interests

     10,913         6,575   

Net income attributable to noncontrolling interests

     263         275   
                 

Net income attributable to ExxonMobil

   $ 10,650       $ 6,300   
                 

Earnings per common share (dollars)

   $ 2.14       $ 1.33   

Earnings per common share - assuming dilution (dollars)

   $ 2.14       $ 1.33   

Dividends per common share (dollars)

   $ 0.44       $ 0.42   

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

   $ 7,916       $ 6,815   

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.

 

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EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(millions of dollars)

 

     Mar. 31,
2011
    Dec. 31,
2010
 

ASSETS

    

Current assets

    

Cash and cash equivalents

   $ 12,833      $ 7,825   

Cash and cash equivalents - restricted

     401        628   

Notes and accounts receivable - net

     35,146        32,284   

Inventories

    

Crude oil, products and merchandise

     13,026        9,852   

Materials and supplies

     3,236        3,124   

Other current assets

     7,380        5,271   
                

Total current assets

     72,022        58,984   

Investments, advances and long-term receivables

     35,207        35,338   

Property, plant and equipment - net

     203,726        199,548   

Other assets, including intangibles, net

     8,578        8,640   
                

Total assets

   $ 319,533      $ 302,510   
                

LIABILITIES

    

Current liabilities

    

Notes and loans payable

   $ 3,560      $ 2,787   

Accounts payable and accrued liabilities

     57,700        50,034   

Income taxes payable

     12,316        9,812   
                

Total current liabilities

     73,576        62,633   

Long-term debt

     12,316        12,227   

Postretirement benefits reserves

     20,076        19,367   

Deferred income tax liabilities

     36,121        35,150   

Other long-term obligations

     19,913        20,454   
                

Total liabilities

     162,002        149,831   
                

Commitments and contingencies (note 2)

    

EQUITY

    

Common stock, without par value:

    

Authorized: 9,000 million shares

    

Issued: 8,019 million shares

     9,156        9,371   

Earnings reinvested

     307,361        298,899   

Accumulated other comprehensive income

    

Cumulative foreign exchange translation adjustment

     6,260        5,011   

Postretirement benefits reserves adjustment

     (9,955     (9,889

Unrealized gain/(loss) on cash flow hedges

     39        55   

Common stock held in treasury:

    

3,093 million shares at March 31, 2011

     (161,381  

3,040 million shares at December 31, 2010

       (156,608
                

ExxonMobil share of equity

     151,480        146,839   

Noncontrolling interests

     6,051        5,840   
                

Total equity

     157,531        152,679   
                

Total liabilities and equity

   $ 319,533      $ 302,510   
                

The number of shares of common stock issued and outstanding at March 31, 2011 and December 31, 2010 were 4,926,085,717 and 4,978,538,898, respectively.

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.

 

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EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(millions of dollars)

 

     Three Months Ended
March 31,
 
     2011     2010  

CASH FLOWS FROM OPERATING ACTIVITIES

    

Net income including noncontrolling interests

   $ 10,913      $ 6,575   

Depreciation and depletion

     3,761        3,280   

Changes in operational working capital, excluding cash and debt

     2,887        3,201   

All other items - net

     (705     (10
                

Net cash provided by operating activities

     16,856        13,046   
                

CASH FLOWS FROM INVESTING ACTIVITIES

    

Additions to property, plant and equipment

     (7,051     (5,756

Sales of subsidiaries, investments, and property, plant and equipment

     1,341        424   

Other investing activities - net

     357        165   
                

Net cash used in investing activities

     (5,353     (5,167
                

CASH FLOWS FROM FINANCING ACTIVITIES

    

Additions to long-term debt

     98        27   

Reductions in long-term debt

     (29     (3

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

     743        (121

Cash dividends to ExxonMobil shareholders

     (2,188     (1,986

Cash dividends to noncontrolling interests

     (95     (83

Changes in noncontrolling interests

     (9     (1

Common stock acquired

     (5,653     (2,495

Common stock sold

     384        42   
                

Net cash used in financing activities

     (6,749     (4,620
                

Effects of exchange rate changes on cash

     254        (210
                

Increase/(decrease) in cash and cash equivalents

     5,008        3,049   

Cash and cash equivalents at beginning of period

     7,825        10,693   
                

Cash and cash equivalents at end of period

   $ 12,833      $ 13,742   
                

SUPPLEMENTAL DISCLOSURES

    

Income taxes paid

   $ 5,173      $ 3,896   

Cash interest paid

   $ 103      $ 130   

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.

 

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EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

(millions of dollars)

 

     ExxonMobil Share of Equity              
     Common
Stock
    Earnings
Reinvested
    Accumulated
Other
Compre-
hensive
Income
    Common
Stock
Held in
Treasury
    ExxonMobil
Share of
Equity
    Noncontrolling
Interest
    Total
Equity
 

Balance as of December 31, 2009

   $ 5,503      $ 276,937      $ (5,461   $ (166,410   $ 110,569      $ 4,823      $ 115,392   

Amortization of stock-based awards

     188              188          188   

Tax benefits related to stock- based awards

     (1           (1       (1

Other

     (390           (390     12        (378

Net income for the period

       6,300            6,300        275        6,575   

Dividends - common shares

       (1,986         (1,986     (83     (2,069

Foreign exchange translation adjustment

         (587       (587     70        (517

Postretirement benefits reserves adjustment

         196          196        16        212   

Amortization of postretirement benefits reserves adjustment included in periodic benefit costs

         315          315        13        328   

Acquisitions at cost

           (2,495     (2,495     (1     (2,496

Dispositions

           432        432          432   
                                                        

Balance as of March 31, 2010

   $ 5,300      $ 281,251      $ (5,537   $ (168,473   $ 112,541      $ 5,125      $ 117,666   
                                                        

Balance as of December 31, 2010

   $ 9,371      $ 298,899      $ (4,823   $ (156,608   $ 146,839      $ 5,840      $ 152,679   

Amortization of stock-based awards

     203              203          203   

Tax benefits related to stock-based awards

     81              81          81   

Other

     (499           (499     (4     (503

Net income for the period

       10,650            10,650        263        10,913   

Dividends - common shares

       (2,188         (2,188     (95     (2,283

Foreign exchange translation adjustment

         1,249          1,249        85        1,334   

Postretirement benefits reserves adjustment

         (362       (362     (43     (405

Amortization of postretirement benefits reserves adjustment included in periodic benefit costs

         296          296        14        310   

Change in fair value of cash flow hedges

         3          3          3   

Realized (gain)/loss from settled cash flow hedges included in net income

         (19       (19       (19

Acquisitions at cost

           (5,653     (5,653     (9     (5,662

Dispositions

           880        880          880   
                                                        

Balance as of March 31, 2011

   $ 9,156      $ 307,361      $ (3,656   $ (161,381   $ 151,480      $ 6,051      $ 157,531   
                                                        
     Three Months Ended March 31, 2011           Three Months Ended March 31, 2010  

Common Stock Share Activity

   Issued     Held in
Treasury
    Outstanding           Issued     Held in
Treasury
    Outstanding  
     (millions of shares)           (millions of shares)  

Balance as of December 31

     8,019        (3,040     4,979          8,019        (3,292     4,727   

Acquisitions

       (69     (69         (37     (37

Dispositions

       16        16            8        8   
                                                  

Balance as of March 31

     8,019        (3,093     4,926          8,019        (3,321     4,698   
                                                  

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.

 

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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 2010 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. The Corporation’s exploration and production activities are accounted for under the “successful efforts” method.

 

2. Litigation and Other Contingencies

Litigation

A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. 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 materially adverse effect upon the Corporation’s operations, financial condition, or financial statements taken as a whole.

Other Contingencies

 

     As of March 31, 2011  
     Equity
Company
Obligations
     Other
Third Party
Obligations
     Total  
     (millions of dollars)  

Total guarantees

   $ 7,189       $ 3,706       $ 10,895   

The Corporation and certain of its consolidated subsidiaries were contingently liable at March 31, 2011, for $10,895 million, primarily relating to guarantees for notes, loans and performance under contracts. Included in this amount were guarantees by consolidated affiliates of $7,189 million, representing ExxonMobil’s share of obligations of certain equity companies. 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.

Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. The Corporation’s outstanding unconditional purchase obligations at March 31, 2011, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.

The operations and earnings of the Corporation and its affiliates throughout the world have been, and may in the future be, affected from time to time in varying degree by political developments and laws and regulations, such as forced divestiture of assets; restrictions on production, imports and exports; price controls; tax increases and retroactive tax claims; expropriation of property; cancellation of contract rights and environmental regulations. Both the likelihood of such occurrences and their overall effect upon the Corporation vary greatly from country to country and are not predictable.

 

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In accordance with a nationalization decree issued by Venezuela’s president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would “directly assume the activities” carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project.

On September 6, 2007, affiliates of ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) invoking ICSID jurisdiction under Venezuela’s Investment Law and the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID Tribunal issued a decision on June 10, 2010, finding that it had jurisdiction to proceed on the basis of the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID arbitration proceeding is continuing and a hearing on the merits is currently scheduled for the first quarter of 2012. An affiliate of ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce (ICC) against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. A hearing on the merits of the ICC arbitration concluded in September 2010 and the parties have filed post-hearing briefs. At this time, the net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.

 

3. Comprehensive Income

 

     Three Months Ended
March 31,
 
     2011     2010  
     (millions of dollars)  

Net income including noncontrolling interests

   $ 10,913      $ 6,575   

Other comprehensive income (net of income taxes)

    

Foreign exchange translation adjustment

     1,334        (517

Postretirement benefits reserves adjustment (excluding amortization)

     (405     212   

Amortization of postretirement benefits reserves adjustment included in net periodic benefit costs

     310        328   

Change in fair value of cash flow hedges

     3        0   

Realized (gain)/loss from settled cash flow hedges included in net income

     (19     0   
                

Comprehensive income including noncontrolling interests

     12,136        6,598   

Comprehensive income attributable to noncontrolling interests

     319        374   
                

Comprehensive income attributable to ExxonMobil

   $ 11,817      $ 6,224   
                

 

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4. Earnings Per Share

 

     Three Months Ended
March 31,
 
     2011      2010  

EARNINGS PER COMMON SHARE

     

Net income attributable to ExxonMobil (millions of dollars)

   $ 10,650       $ 6,300   

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

     4,963         4,722   

Earnings per common share (dollars)

   $ 2.14       $ 1.33   

EARNINGS PER COMMON SHARE - ASSUMING DILUTION

     

Net income attributable to ExxonMobil (millions of dollars)

   $ 10,650       $ 6,300   

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

     4,963         4,722   

Effect of employee stock-based awards

     8         14   
                 

Weighted average number of common shares outstanding - assuming dilution

     4,971         4,736   
                 

Earnings per common share - assuming dilution (dollars)

   $ 2.14       $ 1.33   

 

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5. Pension and Other Postretirement Benefits

 

     Three Months Ended
March 31,
 
     2011     2010  
     (millions of dollars)  

Pension Benefits - U.S.

    

Components of net benefit cost

    

Service cost

   $ 125      $ 110   

Interest cost

     198        199   

Expected return on plan assets

     (192     (181

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

     123        131   

Net pension enhancement and curtailment/settlement cost

     101        127   
                

Net benefit cost

   $ 355      $ 386   
                

Pension Benefits - Non-U.S.

    

Components of net benefit cost

    

Service cost

   $ 139      $ 123   

Interest cost

     316        296   

Expected return on plan assets

     (290     (252

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

     184        165   

Net pension enhancement and curtailment/settlement cost

     0        1   
                

Net benefit cost

   $ 349      $ 333   
                

Other Postretirement Benefits

    

Components of net benefit cost

    

Service cost

   $ 26      $ 24   

Interest cost

     103        103   

Expected return on plan assets

     (10     (9

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

     57        62   
                

Net benefit cost

   $ 176      $ 180   
                

 

6. Financial and Derivative Instruments

Financial Instruments. The fair value of financial instruments is determined by reference to observable market data and other valuation techniques as appropriate. The only category of financial instruments where the difference between fair value and recorded book value is notable is long-term debt. The estimated fair value of total long-term debt, including capitalized lease obligations, was $12.8 billion at March 31, 2011, and $12.8 billion at December 31, 2010, as compared to recorded book values of $12.3 billion at March 31, 2011, and $12.2 billion at December 31, 2010. The fair value hierarchy for long-term debt is primarily Level 1 (quoted prices for identical assets in active markets).

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 interest rates, currency rates and commodity prices. As a result, the Corporation makes limited use of derivatives to mitigate the impact of such changes. The Corporation does not engage in speculative derivative activities or derivative trading activities nor does it use derivatives with leveraged features.

 

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When the Corporation does enter into derivative transactions, it is to offset exposures associated with interest rates, foreign currency exchange rates and hydrocarbon prices that arise from existing assets, liabilities and forecasted transactions. For derivatives designated as cash flow hedges, the Corporation’s activity is intended to manage the price risk posed by physical transactions.

The estimated fair value of derivative instruments outstanding and recorded on the balance sheet was a net asset of $168 million and $172 million at March 31, 2011, and at year-end 2010, respectively. This is the amount that the Corporation would have received from third parties if these derivatives had been settled in the open market. Assets and liabilities associated with derivatives are predominantly recorded either in “Other current assets” or “Accounts payable and accrued liabilities”. The March 31, 2011, net asset balance includes the Corporation’s outstanding cash flow hedge position, acquired as a result of the June 2010 XTO merger, of $164 million. As the current cash flow hedge positions settle, these programs will be discontinued.

The fair value hierarchy for derivative instruments is primarily Level 2 (either market prices for similar assets in active markets or prices quoted by a broker or other market-corroborated prices).

The Corporation recognized a before-tax gain related to derivative instruments of $20 million during the three month period ended March 31, 2011, and $2 million during the three month period ended March 31, 2010. Income statement effects associated with derivatives are recorded either in “Sales and other operating revenue” or “Crude oil and product purchases”. Of the amount stated above for 2011, cash flow hedges resulted in a before-tax gain of $33 million. The ineffective portion of derivatives designated as hedges is de minimis.

The principal natural gas futures contracts and swap agreements acquired as part of the XTO merger that are in place as of March 31, 2011, will expire at the end of 2011. The associated volume of natural gas is 250 mcfd at a weighted average NYMEX price of $7.02 per thousand cubic feet. These derivative contracts qualify for cash flow hedge accounting. The Corporation will receive the cash flow related to these derivative contracts at the price indicated above. However, the amount of the income statement gain or loss realized from these contracts will be limited to the change in fair value of the derivative instruments from the acquisition date of XTO.

The Corporation believes that there are no material market or credit risks to the Corporation’s financial position, results of operations or liquidity as a result of the derivative activities described above.

 

-11-


Table of Contents
7. Disclosures about Segments and Related Information

 

     Three Months Ended
March 31,
 
     2011     2010  
     (millions of dollars)  

EARNINGS AFTER INCOME TAX

    

Upstream

    

United States

   $ 1,279      $ 1,091   

Non-U.S.

     7,396        4,723   

Downstream

    

United States

     694        (60

Non-U.S.

     405        97   

Chemical

    

United States

     669        539   

Non-U.S.

     847        710   

All other

     (640     (800
                

Corporate total

   $ 10,650      $ 6,300   
                

SALES AND OTHER OPERATING REVENUE (1)

    

Upstream

    

United States

   $ 3,286      $ 1,266   

Non-U.S.

     8,878        6,308   

Downstream

    

United States

     27,537        21,813   

Non-U.S.

     59,191        48,857   

Chemical

    

United States

     3,647        3,397   

Non-U.S.

     6,708        5,393   

All other

     4        3   
                

Corporate total

   $ 109,251      $ 87,037   
                

(1)    Includes sales-based taxes

    

INTERSEGMENT REVENUE

    

Upstream

    

United States

   $ 2,359      $ 2,142   

Non-U.S.

     12,305        9,552   

Downstream

    

United States

     4,530        3,384   

Non-U.S.

     16,501        12,957   

Chemical

    

United States

     2,816        2,308   

Non-U.S.

     2,450        2,037   

All other

     64        70   

 

-12-


Table of Contents
8. Condensed Consolidating Financial Information Related to Guaranteed Securities Issued by Subsidiaries

Exxon Mobil Corporation has fully and unconditionally guaranteed the deferred interest debentures due 2012 ($2,457 million long-term at March 31, 2011) and the debt securities due 2011 ($13 million short-term) of SeaRiver Maritime Financial Holdings, Inc., a 100 percent owned subsidiary of Exxon Mobil Corporation.

The following condensed consolidating financial information is provided for Exxon Mobil Corporation, as guarantor, and for SeaRiver Maritime Financial Holdings, Inc., as issuer, as an alternative to providing separate financial statements for the issuer. The accounts of Exxon Mobil Corporation and SeaRiver Maritime Financial Holdings, Inc. are presented utilizing the equity method of accounting for investments in subsidiaries.

 

     Exxon Mobil
Corporation
Parent
Guarantor
    SeaRiver
Maritime
Financial
Holdings
Inc.
    All Other
Subsidiaries
     Consolidating
and
Eliminating
Adjustments
    Consolidated  
     (millions of dollars)  

Condensed consolidated statement of income for three months ended March 31, 2011

  

Revenues and other income

           

Sales and other operating revenue,
including sales-based taxes

   $ 4,247      $ —        $ 105,004       $ —        $ 109,251   

Income from equity affiliates

     11,154        (4     3,795         (11,118     3,827   

Other income

     30        —          896         —          926   

Intercompany revenue

     12,228        1        107,781         (120,010     —     
                                         

Total revenues and other income

     27,659        (3     217,476         (131,128     114,004   
                                         

Costs and other deductions

           

Crude oil and product purchases

     14,106        —          163,771         (117,380     60,497   

Production and manufacturing expenses

     1,877        —          8,989         (1,346     9,520   

Selling, general and administrative expenses

     730        —          3,069         (172     3,627   

Depreciation and depletion

     386        —          3,375         —          3,761   

Exploration expenses, including dry holes

     64        —          270         —          334   

Interest expense

     54        68        1,039         (1,132     29   

Sales-based taxes

     —          —          7,916         —          7,916   

Other taxes and duties

     9        —          9,394         —          9,403   
                                         

Total costs and other deductions

     17,226        68        197,823         (120,030     95,087   
                                         

Income before income taxes

     10,433        (71     19,653         (11,098     18,917   

Income taxes

     (217     (25     8,246         —          8,004   
                                         

Net income including noncontrolling interests

     10,650        (46     11,407         (11,098     10,913   

Net income attributable to noncontrolling interests

     —          —          263         —          263   
                                         

Net income attributable to ExxonMobil

   $ 10,650      $ (46   $ 11,144       $ (11,098   $ 10,650   
                                         

 

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Table of Contents
     Exxon Mobil
Corporation
Parent
Guarantor
     SeaRiver
Maritime
Financial
Holdings
Inc.
    All Other
Subsidiaries
     Consolidating
and
Eliminating
Adjustments
    Consolidated  
     (millions of dollars)  

Condensed consolidated statement of income for three months ended March 31, 2010

  

Revenues and other income

            

Sales and other operating revenue,
including sales-based taxes

   $ 3,933       $ —        $ 83,104       $ —        $ 87,037   

Income from equity affiliates

     6,212         —          2,514         (6,189     2,537   

Other income

     62         —          615         —          677   

Intercompany revenue

     9,486         1        80,646         (90,133     —     
                                          

Total revenues and other income

     19,693         1        166,879         (96,322     90,251   
                                          

Costs and other deductions

            

Crude oil and product purchases

     9,800         —          124,635         (87,650     46,785   

Production and manufacturing expenses

     1,937         —          7,804         (1,306     8,435   

Selling, general and administrative expenses

     730         —          2,952         (168     3,514   

Depreciation and depletion

     418         —          2,862         —          3,280   

Exploration expenses, including dry holes

     75         —          611         —          686   

Interest expense

     68         61        954         (1,028     55   

Sales-based taxes

     —           —          6,815         —          6,815   

Other taxes and duties

     8         —          8,605         —          8,613   
                                          

Total costs and other deductions

     13,036         61        155,238         (90,152     78,183   
                                          

Income before income taxes

     6,657         (60     11,641         (6,170     12,068   

Income taxes

     357         (23     5,159         —          5,493   
                                          

Net income including noncontrolling interests

     6,300         (37     6,482         (6,170     6,575   

Net income attributable to noncontrolling interests

     —           —          275         —          275   
                                          

Net income attributable to ExxonMobil

   $ 6,300       $ (37   $ 6,207       $ (6,170   $ 6,300   
                                          

 

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Table of Contents
     Exxon Mobil
Corporation
Parent
Guarantor
    SeaRiver
Maritime
Financial
Holdings
Inc.
    All Other
Subsidiaries
     Consolidating
and
Eliminating
Adjustments
    Consolidated  
     (millions of dollars)  

Condensed consolidated balance sheet as of March 31, 2011

  

Cash and cash equivalents

   $ 367      $ —        $ 12,466       $ —        $ 12,833   

Cash and cash equivalents - restricted

     225        —          176         —          401   

Notes and accounts receivable - net

     2,630        11        33,046         (541     35,146   

Inventories

     1,712        —          14,550         —          16,262   

Other current assets

     403        —          6,977         —          7,380   
                                         

Total current assets

     5,337        11        67,215         (541     72,022   

Property, plant and equipment - net

     18,983        —          184,743         —          203,726   

Investments and other assets

     266,465        454        474,943         (698,077     43,785   

Intercompany receivables

     20,088        2,633        561,228         (583,949     —     
                                         

Total assets

   $ 310,873      $ 3,098      $ 1,288,129       $ (1,282,567   $ 319,533   
                                         

Notes and loan payables

   $ 1,776      $ 13      $ 1,771       $ —        $ 3,560   

Accounts payable and accrued liabilities

     3,263        —          54,437         —          57,700   

Income taxes payable

     —          —          12,857         (541     12,316   
                                         

Total current liabilities

     5,039        13        69,065         (541     73,576   

Long-term debt

     295        2,457        9,564         —          12,316   

Postretirement benefits reserves

     9,994        —          10,082         —          20,076   

Deferred income tax liabilities

     557        96        35,468         —          36,121   

Other long-term obligations

     4,756        —          15,157         —          19,913   

Intercompany payables

     138,752        382        444,815         (583,949     —     
                                         

Total liabilities

     159,393        2,948        584,151         (584,490     162,002   
                                         

Earnings reinvested

     307,361        (894     143,400         (142,506     307,361   

Other ExxonMobil equity

     (155,881     1,044        554,527         (555,571     (155,881
                                         

ExxonMobil share of equity

     151,480        150        697,927         (698,077     151,480   

Noncontrolling interests

     —          —          6,051         —          6,051   
                                         

Total equity

     151,480        150        703,978         (698,077     157,531   
                                         

Total liabilities and equity

   $ 310,873      $ 3,098      $ 1,288,129       $ (1,282,567   $ 319,533   
                                         

Condensed consolidated balance sheet as of December 31, 2010

  

Cash and cash equivalents

   $ 309      $ —        $ 7,516       $ —        $ 7,825   

Cash and cash equivalents - restricted

     371        —          257         —          628   

Notes and accounts receivable - net

     2,104        —          30,346         (166     32,284   

Inventories

     1,457        —          11,519         —          12,976   

Other current assets

     239        —          5,032         —          5,271   
                                         

Total current assets

     4,480        —          54,670         (166     58,984   

Property, plant and equipment - net

     18,830        —          180,718         —          199,548   

Investments and other assets

     255,005        458        462,893         (674,378     43,978   

Intercompany receivables

     18,186        2,457        528,405         (549,048     —     
                                         

Total assets

   $ 296,501      $ 2,915      $ 1,226,686       $ (1,223,592   $ 302,510   
                                         

Notes and loan payables

   $ 1,042      $ 13      $ 1,732       $ —        $ 2,787   

Accounts payable and accrued liabilities

     2,987        —          47,047         —          50,034   

Income taxes payable

     —          3        9,975         (166     9,812   
                                         

Total current liabilities

     4,029        16        58,754         (166     62,633   

Long-term debt

     295        2,389        9,543         —          12,227   

Postretirement benefits reserves

     9,660        —          9,707         —          19,367   

Deferred income tax liabilities

     642        107        34,401         —          35,150   

Other long-term obligations

     5,632        —          14,822         —          20,454   

Intercompany payables

     129,404        382        419,262         (549,048     —     
                                         

Total liabilities

     149,662        2,894        546,489         (549,214     149,831   
                                         

Earnings reinvested

     298,899        (848     132,357         (131,509     298,899   

Other ExxonMobil equity

     (152,060     869        542,000         (542,869     (152,060
                                         

ExxonMobil share of equity

     146,839        21        674,357         (674,378     146,839   

Noncontrolling interests

     —          —          5,840         —          5,840   
                                         

Total equity

     146,839        21        680,197         (674,378     152,679   
                                         

Total liabilities and equity

   $ 296,501      $ 2,915      $ 1,226,686       $ (1,223,592   $ 302,510   
                                         

 

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Table of Contents
     Exxon Mobil
Corporation
Parent
Guarantor
     SeaRiver
Maritime
Financial
Holdings
Inc.
     All Other
Subsidiaries
     Consolidating
and
Eliminating
Adjustments
     Consolidated  
     (millions of dollars)  

Condensed consolidated statement of cash flows for three months ended March 31, 2011

  

Cash provided by/(used in) operating activities

   $ (36    $ 1       $ 16,992       $ (101    $ 16,856   
                                            

Cash flows from investing activities

              

Additions to property, plant and equipment

     (600      —           (6,451      —           (7,051

Sales of long-term assets

     39         —           1,302         —           1,341   

Net intercompany investing

     7,232         (176      (7,457      401         —     

All other investing, net

     146         —           211         —           357   
                                            

Net cash provided by/(used in) investing activities

     6,817         (176      (12,395      401         (5,353
                                            

Cash flows from financing activities

              

Additions to long-term debt

     —           —           98         —           98   

Reductions in long-term debt

     —           —           (29      —           (29

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

     734         —           9         —           743   

Cash dividends

     (2,188      —           (101      101         (2,188

Net ExxonMobil shares sold/(acquired)

     (5,269      —           —           —           (5,269

Net intercompany financing activity

     —           —           226         (226      —     

All other financing, net

     —           175         (104      (175      (104
                                            

Net cash provided by/(used in) financing activities

     (6,723      175         99         (300      (6,749
                                            

Effects of exchange rate changes on cash

     —           —           254         —           254   
                                            

Increase/(decrease) in cash and cash equivalents

   $ 58       $ —         $ 4,950       $ —         $ 5,008   
                                            

Condensed consolidated statement of cash flows for three months ended March 31, 2010

  

Cash provided by/(used in) operating activities

   $ 1,253       $ 1       $ 11,898       $ (106    $ 13,046   
                                            

Cash flows from investing activities

              

Additions to property, plant and equipment

     (711      —           (5,045      —           (5,756

Sales of long-term assets

     58         —           366         —           424   

Net intercompany investing

     3,699         (151      (3,901      353         —     

All other investing, net

     —           —           165         —           165   
                                            

Net cash provided by/(used in) investing activities

     3,046         (151      (8,415      353         (5,167
                                            

Cash flows from financing activities

              

Additions to long-term debt

     —           —           27         —           27   

Reductions in long-term debt

     —           —           (3      —           (3

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

     (30      —           (91      —           (121

Cash dividends

     (1,986      —           (106      106         (1,986

Net ExxonMobil shares sold/(acquired)

     (2,453      —           —           —           (2,453

Net intercompany financing activity

     —           —           203         (203      —     

All other financing, net

     —           150         (84      (150      (84
                                            

Net cash provided by/(used in) financing activities

     (4,469      150         (54      (247      (4,620
                                            

Effects of exchange rate changes on cash

     —           —           (210      —           (210
                                            

Increase/(decrease) in cash and cash equivalents

   $ (170    $ —         $ 3,219       $ —         $ 3,049   
                                            

 

-16-


Table of Contents

EXXON MOBIL CORPORATION

 

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

FUNCTIONAL EARNINGS SUMMARY

 

     First Three Months  

Earnings (U.S. GAAP)

   2011     2010  
     (millions of dollars)  

Upstream

    

United States

   $ 1,279      $ 1,091   

Non-U.S.

     7,396        4,723   

Downstream

    

United States

     694        (60

Non-U.S.

     405        97   

Chemical

    

United States

     669        539   

Non-U.S.

     847        710   

Corporate and financing

     (640     (800
                

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

   $ 10,650      $ 6,300   
                

Earnings per common share (dollars)

   $ 2.14      $ 1.33   

Earnings per common share - assuming dilution (dollars)

   $ 2.14      $ 1.33   

References in this discussion to total corporate earnings mean net income attributable to ExxonMobil (U.S. GAAP) from the income statement. Unless otherwise indicated, references to earnings, special items, Upstream, Downstream, Chemical and Corporate and Financing segment earnings, and earnings per share are ExxonMobil’s share after excluding amounts attributable to noncontrolling interests.

REVIEW OF FIRST QUARTER 2011 RESULTS

ExxonMobil’s earnings reflect continued leadership in operational performance during a period of strong commodity prices. Earnings were $10.7 billion, up 69 percent from the first quarter of 2010, reflecting higher crude oil and natural gas realizations, increased refining margins and record Chemical performance.

In the first quarter, capital and exploration expenditures were $7.8 billion, up 14 percent from last year.

The Corporation returned over $7 billion to shareholders in the first quarter through dividends and share purchases to reduce shares outstanding.

 

     First Three Months  
     2011      2010  
     (millions of dollars)  

Upstream earnings

     

United States

   $ 1,279       $ 1,091   

Non-U.S.

     7,396         4,723   
                 

Total

   $ 8,675       $ 5,814   
                 

Upstream earnings for the first three months were $8,675 million, up $2,861 million from the first quarter of 2010. Higher crude oil and natural gas realizations increased earnings by nearly $2.6 billion. Production mix and volume effects decreased earnings by $160 million, while asset management activity and lower expenses increased earnings by $470 million.

On an oil-equivalent basis, production increased over 10 percent from the first quarter of 2010. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, production was up 12 percent.

 

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Table of Contents

Liquids production totaled 2,399 kbd (thousands of barrels per day), down 15 kbd from the first quarter of 2010. Excluding the impacts of entitlement volumes, OPEC quota effects and divestments, liquids production was up 2 percent, as increased production in Qatar and the U.S. more than offset field decline.

First quarter natural gas production was 14,525 mcfd (millions of cubic feet per day), up 2,836 mcfd from 2010, driven by additional U.S. unconventional gas volumes and project ramp-ups in Qatar.

Earnings from U.S. Upstream operations were $1,279 million, $188 million higher than the first quarter of 2010. Non-U.S. Upstream earnings were $7,396 million, up $2,673 million from last year.

 

     First Three Months  
         2011              2010      
     (millions of dollars)  

Downstream earnings

     

United States

   $ 694       $ (60

Non-U.S.

     405         97   
                 

Total

   $ 1,099       $ 37   
                 

First quarter Downstream earnings of $1,099 million were up $1,062 million from the first quarter of 2010. Higher industry refining margins, partly offset by lower marketing margins, increased earnings by $470 million. Positive volume and mix effects increased earnings by $350 million, while all other items, mainly favorable foreign exchange impacts, increased earnings by $240 million. Petroleum product sales of 6,267 kbd were 72 kbd higher than last year’s first quarter.

Earnings from the U.S. Downstream were $694 million, up $754 million from the first quarter of 2010. Non-U.S. Downstream earnings of $405 million were $308 million higher than last year.

 

     First Three Months  
         2011              2010      
     (millions of dollars)  

Chemical earnings

     

United States

   $ 669       $ 539   

Non-U.S.

     847         710   
                 

Total

   $ 1,516       $ 1,249   
                 

Record Chemical earnings of $1,516 million for the first three months were $267 million higher than 2010. Improved margins increased earnings by $470 million, while other items, including the absence of asset management gains from 2010, decreased earnings by $200 million. First quarter prime product sales of 6,322 kt (thousands of metric tons) were 166 kt lower than the prior year.

 

     First Three Months  
         2011             2010      
     (millions of dollars)  

Corporate and financing earnings

   $ (640   $ (800

Corporate and financing expenses were $640 million during the first quarter of 2011, down $160 million from the first quarter of 2010 due to the absence of last year’s tax charge related to the U.S. health care legislation.

 

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LIQUIDITY AND CAPITAL RESOURCES

 

     First Three Months  
     2011     2010  
     (millions of dollars)  

Net cash provided by/(used in)

    

Operating activities

   $ 16,856      $ 13,046   

Investing activities

     (5,353     (5,167

Financing activities

     (6,749     (4,620

Effect of exchange rate changes

     254        (210
                

Increase/(decrease) in cash and cash equivalents

   $ 5,008      $ 3,049   
                

Cash and cash equivalents (at end of period)

   $ 12,833      $ 13,742   

Cash and cash equivalents - restricted (at end of period)

     401        0   
                

Total cash and cash equivalents (at end of period)

   $ 13,234      $ 13,742   
                

Cash flow from operations and asset sales

    

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

   $ 16,856      $ 13,046   

Sales of subsidiaries, investments and property, plant and equipment

     1,341        424   
                

Cash flow from operations and asset sales

   $ 18,197      $ 13,470   
                

Because of the ongoing nature of our asset management and divestment program, we believe it is useful for investors to consider asset sales proceeds together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities.

Total cash and cash equivalents of $13.2 billion at the end of the first quarter of 2011 compared to $13.7 billion at the end of the first quarter of 2010.

Cash provided by operating activities totaled $16.9 billion for the first three months of 2011, $3.8 billion higher than 2010. The major source of funds was net income including noncontrolling interests of $10.9 billion, adjusted for the noncash provision of $3.8 billion for depreciation and depletion, both of which increased. Changes in operational working capital added to cash flows in both periods. For additional details, see the Condensed Consolidated Statement of Cash Flows on page 5.

Investing activities for the first three months of 2011 used net cash of $5.4 billion compared to $5.2 billion in the prior year. Spending for additions to property, plant and equipment increased $1.3 billion to $7.1 billion. Proceeds from asset sales increased $0.9 billion to $1.3 billion.

Cash flow from operations and asset sales for the first three months of 2011 of $18.2 billion, including asset sales of $1.3 billion, increased $4.7 billion from the comparable 2010 period.

Net cash used in financing activities of $6.7 billion in the first three months of 2011 was $2.1 billion higher than 2010, mostly reflecting a higher level of purchases of shares of ExxonMobil stock.

During the first quarter of 2011, Exxon Mobil Corporation purchased 69 million shares of its common stock for the treasury at a gross cost of $5.7 billion. These purchases included $5 billion to reduce the number of shares outstanding, with the balance used to offset shares issued in conjunction with the company’s benefit plans and programs. Shares outstanding decreased from 4,979 million at the end of the fourth quarter 2010 to 4,926 million at the end of the first quarter 2011. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.

The Corporation distributed to shareholders a total of $7.2 billion in the first quarter of 2011 through dividends and share purchases to reduce shares outstanding.

Total debt of $15.9 billion at March 31, 2011, compared to $15.0 billion at year-end 2010. The Corporation’s debt to total capital ratio was 9.2 percent at the end of the first quarter of 2011 compared to 9.0 percent at year-end 2010.

Although the Corporation issues long-term debt from time to time and maintains a revolving commercial paper program, internally generated funds are expected to cover the majority of its net near-term financial requirements.

 

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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.

In accordance with a nationalization decree issued by Venezuela’s president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would “directly assume the activities” carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project.

On September 6, 2007, affiliates of ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) invoking ICSID jurisdiction under Venezuela’s Investment Law and the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID Tribunal issued a decision on June 10, 2010, finding that it had jurisdiction to proceed on the basis of the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID arbitration proceeding is continuing and a hearing on the merits is currently scheduled for the first quarter of 2012. An affiliate of ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce (ICC) against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. A hearing on the merits of the ICC arbitration concluded in September 2010 and the parties have filed post-hearing briefs. At this time, the net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.

TAXES

 

     First Three Months  
     2011     2010  
     (millions of dollars)  

Income taxes

   $ 8,004      $ 5,493   

Effective income tax rate

     47     50

Sales-based taxes

     7,916        6,815   

All other taxes and duties

     10,316        9,349   
                

Total

   $ 26,236      $ 21,657   
                

Income, sales-based and all other taxes and duties for the first quarter of 2011 of $26.2 billion were higher than 2010. In the first quarter of 2011, income tax expense increased to $8.0 billion reflecting the higher level of earnings, and the effective income tax rate was 47 percent, compared to $5.5 billion and 50 percent, respectively, in the prior year period. Sales-based taxes and all other taxes and duties increased in 2011 reflecting higher prices.

CAPITAL AND EXPLORATION EXPENDITURES

 

     First Three Months  
     2011      2010  
     (millions of dollars)  

Upstream (including exploration expenses)

   $ 6,900       $ 5,546   

Downstream

     450         674   

Chemical

     449         614   

Other

     22         43   
                 

Total

   $ 7,821       $ 6,877   
                 

In the first quarter of 2011, capital and exploration expenditures were $7.8 billion, up 14 percent from last year, as ExxonMobil continues with plans to invest between $33 billion and $37 billion per year over the next several years to develop new energy supplies to meet future demand growth. Actual spending could vary depending on the progress of individual projects.

 

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FORWARD-LOOKING STATEMENTS

Statements in this report relating to future plans, projections, events or conditions are forward-looking statements. Actual results, including project plans, costs, timing, and capacities; capital and exploration expenditures; and share purchase levels, could differ materially due to factors including: changes in long-term oil or gas prices or other market or economic conditions affecting the oil and gas industry; unforeseen technical difficulties; political events or disturbances; reservoir performance; the outcome of commercial negotiations; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading “Factors Affecting Future Results” in the “Investors” section of our website and in Item 1A of ExxonMobil’s 2010 Form 10-K. We assume no duty to update these statements as of any future date.

 

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Item 3. Quantitative and Qualitative Disclosures About Market Risk

Information about market risks for the three months ended March 31, 2011, does not differ materially from that discussed under Item 7A of the registrant’s Annual Report on Form 10-K for 2010.

 

Item 4. Controls and Procedures

As indicated in the certifications in Exhibit 31 of this report, the Corporation’s chief executive officer, principal financial officer and principal accounting officer have evaluated the Corporation’s disclosure controls and procedures as of March 31, 2011. 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.

PART II. OTHER INFORMATION

 

Item 1. Legal Proceedings

Regarding a matter reported in the Corporation’s Form 10-Q for the first quarter of 2007, on January 11, 2011, Exxon Mobil Corporation settled a suit brought in September 2000 by The State of New York in Albany County, New York, against a number of parties, including ExxonMobil, relating to an alleged discharge of petroleum in Baldwin, New York, at a former Mobil-branded service station and a service station owned/operated by an unrelated party. The suit (captioned State of New York v. Task Oil Corp., Exxon Mobil Corp., et al.) alleged that discharges from each service station had commingled and contaminated the soil and groundwater in the vicinity of the service stations. To resolve the matter with ExxonMobil, the New York State Department of Environmental Conservation issued a general release in favor of ExxonMobil in exchange for a payment of $730,000 by ExxonMobil for all State costs and interest. There was no penalty assessed in this matter against ExxonMobil.

As reported in the Corporation’s Form 10-K for 2010, the New York State Attorney General, Exxon Mobil Corporation and ExxonMobil Oil Corporation have agreed to enter into a Consent Decree to resolve issues relating to alleged contamination at ExxonMobil’s former Brooklyn, New York, terminal and refinery at issue in a lawsuit brought on July 17, 2007, in the U.S. District Court for the Eastern District of New York. The Consent Decree required ExxonMobil to undertake actions to investigate and remediate certain environmental conditions at the Brooklyn terminal and refinery, pay $19.5 million to fund Environmental Benefit Projects to benefit the Greenpoint Community; pay a civil penalty of $250,000; pay $250,000 for Natural Resources Damages Restoration Projects; pay past costs of the State for oversight of, investigation and remedial activities in the amount of $1.5 million and pay future State oversight costs, up to $3.5 million. On March 2, 2011, the Court approved the Consent Decree.

As reported in the Corporation’s 2010 Form 10-K, on February 17, 2011, the United States District Court for the District of New Jersey granted defendants’ motion to dismiss a purported shareholder lawsuit captioned Resnik v. Boskin et al., filed in 2009, alleging direct and derivative claims against the Corporation’s directors serving at the time, the “named executive officers” listed in the Corporation’s 2009 Proxy Statement (as defined in Securities and Exchange Commission regulations) and Exxon Mobil Corporation. The court found fatal flaws in the plaintiff’s three causes of action. On March 21, 2011, the court entered a final order dismissing the plaintiff’s amended complaint with prejudice. Plaintiff’s counsel has advised that the plaintiff does not plan to appeal the dismissal of the case.

Refer to the relevant portions of note 2 on pages 7 and 8 of this Quarterly Report on Form 10-Q for further information on legal proceedings.

 

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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, 2011

 

 

Period

   Total Number
Of Shares
Purchased
     Average
Price Paid
per Share
     Total Number of
Shares Purchased
as Part of Publicly
Announced Plans
or Programs
     Maximum Number
Of Shares that May
Yet Be Purchased
Under the Plans or
Programs
 

January, 2011

     23,616,900       $ 77.17         23,616,900      

February, 2011

     20,684,993       $ 84.02         20,684,993      

March, 2011

     25,124,067       $ 83.29         25,124,067      
                       

Total

     69,425,960       $ 81.42         69,425,960         (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 most recent earnings release dated April 28, 2011, the Corporation stated that second quarter 2011 share purchases to reduce shares outstanding are anticipated to equal $5 billion. Purchases may be made in both the open market and through negotiated transactions, and purchases may be increased, decreased or discontinued at any time without prior notice.

 

Item 6. Exhibits

 

Exhibit

 

Description

3(ii)   By-laws, as revised to April 27, 2011 (incorporated by reference to Exhibit 3(ii) to the Registrant’s Current Report on Form 8-K filed on April 29, 2011).
31.1   Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer.
31.2   Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Financial Officer.
31.3   Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer.
32.1   Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer.
32.2   Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Financial Officer.
32.3   Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer.
101   Interactive Data Files.

 

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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: May 5, 2011

    By:   /s/    Patrick T. Mulva
     

Name:

Title:

 

Patrick T. Mulva

Vice President, Controller and Principal

Accounting Officer

 

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INDEX TO EXHIBITS

 

Exhibit

 

Description

3(ii)   By-laws, as revised to April 27, 2011 (incorporated by reference to Exhibit 3(ii) to the Registrant’s Current Report on Form 8-K filed on April 29, 2011).
31.1   Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer.
31.2   Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Financial Officer.
31.3   Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer.
32.1   Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer.
32.2   Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Financial Officer.
32.3   Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer.
101   Interactive Data Files.

 

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