Company Quick10K Filing
Quick10K
Exxon Mobil
Closing Price ($) Shares Out (MM) Market Cap ($MM)
$78.53 4,237 $332,730
10-Q 2018-09-30 Quarter: 2018-09-30
10-Q 2018-06-30 Quarter: 2018-06-30
10-Q 2018-03-31 Quarter: 2018-03-31
10-K 2017-12-31 Annual: 2017-12-31
10-Q 2017-09-30 Quarter: 2017-09-30
10-Q 2017-06-30 Quarter: 2017-06-30
10-Q 2017-03-31 Quarter: 2017-03-31
10-K 2016-12-31 Annual: 2016-12-31
10-Q 2016-09-30 Quarter: 2016-09-30
10-Q 2016-06-30 Quarter: 2016-06-30
10-Q 2016-03-31 Quarter: 2016-03-31
10-K 2015-12-31 Annual: 2015-12-31
8-K 2019-02-01
8-K 2018-11-02
8-K 2018-07-27
8-K 2018-06-07
8-K 2018-05-30 Shareholder Vote
8-K 2018-04-27
8-K 2018-03-15
8-K 2018-02-08
8-K 2018-01-31
8-K 2018-01-19 Regulation FD
CVX Chevron
SNP China Petroleum & Chemical
PSX Phillips 66
MPC Marathon Petroleum
VLO Valero Energy
IMO Imperial Oil
HFC HollyFrontier
CVI CVR Energy
BPT BP Prudhoe Bay Royalty Trust
VTNR Vertex Energy
XOM 2018-09-30
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Item 4. Controls and Procedures
Part II. Other Information
Item 1. Legal Proceedings
Item 6. Exhibits
EX-31.1 xomexhibit311.htm
EX-31.2 xomexhibit312.htm
EX-31.3 xomexhibit313.htm
EX-32.1 xomexhibit321.htm
EX-32.2 xomexhibit322.htm
EX-32.3 xomexhibit323.htm

Exxon Mobil Earnings 2018-09-30

XOM 10Q Quarterly Report

Balance SheetIncome StatementCash Flow

10-Q 1 xom10q3q2018.htm FORM 10-Q  

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

FORM 10-Q

 

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

THE SECURITIES EXCHANGE ACT OF 1934

 

For the quarterly period ended September 30, 2018

or

 

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

THE SECURITIES EXCHANGE ACT OF 1934

 

For the transition period from __________to________

 

Commission File Number 1-2256

 

EXXON MOBIL CORPORATION

(Exact name of registrant as specified in its charter)

 

NEW JERSEY

 

13-5409005

(State or other jurisdiction of

 

(I.R.S. Employer

incorporation or organization)

 

Identification Number)

 

5959 LAS COLINAS BOULEVARD, IRVING, TEXAS 75039-2298

(Address of principal executive offices) (Zip Code)

 

(972) 940-6000

(Registrant's telephone number, including area code)

 

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

 

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

 

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

 

Large accelerated filer

Accelerated filer

  

Non-accelerated filer

 

Smaller reporting company

 

 

Emerging growth company

 

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

 

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

 

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

 

Class

 

Outstanding as of September 30, 2018

Common stock, without par value

 

 4,233,807,170 

 


 

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2018

 

TABLE OF CONTENTS

 

 

PART I.  FINANCIAL INFORMATION

 

 

 

Item 1.       Financial Statements

 

 

     Condensed Consolidated Statement of Income

Three and nine months ended September 30, 2018 and 2017

 

3

     Condensed Consolidated Statement of Comprehensive Income

Three and nine months ended September 30, 2018 and 2017

 

4

     Condensed Consolidated Balance Sheet

As of September 30, 2018 and December 31, 2017

5

 

 

     Condensed Consolidated Statement of Cash Flows

          Nine months ended September 30, 2018 and 2017

 

6

     Condensed Consolidated Statement of Changes in Equity

          Nine months ended September 30, 2018 and 2017

 

7

     Notes to Condensed Consolidated Financial Statements

 

8

Item 2.       Management's Discussion and Analysis of Financial

                     Condition and Results of Operations

 

16

Item 3.       Quantitative and Qualitative Disclosures About Market Risk

 

24

Item 4.       Controls and Procedures

 

24

 

 

PART II.  OTHER INFORMATION

 

Item 1.       Legal Proceedings

 

25

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

 

26

Item 6.       Exhibits

 

26

Index to Exhibits

 

27

Signature

 

28


2


 

PART I.  FINANCIAL INFORMATION

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Item 1.  Financial Statements

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

Revenues and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue

 

 

74,187

 

 

59,350

 

 

211,079

 

 

171,850

 

Income from equity affiliates

 

 

1,960

 

 

1,472

 

 

5,599

 

 

4,707

 

Other income

 

 

458

 

 

278

 

 

1,639

 

 

1,291

 

 

Total revenues and other income

 

 

76,605

 

 

61,100

 

 

218,317

 

 

177,848

Costs and other deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

 

41,776

 

 

31,432

 

 

119,391

 

 

91,985

 

Production and manufacturing expenses

 

 

9,097

 

 

7,952

 

 

26,506

 

 

23,578

 

Selling, general and administrative expenses

 

 

2,892

 

 

2,632

 

 

8,632

 

 

7,693

 

Depreciation and depletion

 

 

4,658

 

 

4,880

 

 

13,717

 

 

14,051

 

Exploration expenses, including dry holes

 

 

292

 

 

284

 

 

911

 

 

1,087

 

Non-service pension and postretirement benefit expense

 

 

307

 

 

475

 

 

952

 

 

1,267

 

Interest expense

 

 

200

 

 

111

 

 

551

 

 

415

 

Other taxes and duties

 

 

8,303

 

 

7,751

 

 

24,825

 

 

22,115

 

 

Total costs and other deductions

 

 

67,525

 

 

55,517

 

 

195,485

 

 

162,191

Income before income taxes

 

 

9,080

 

 

5,583

 

 

22,832

 

 

15,657

 

Income taxes

 

 

2,634

 

 

1,498

 

 

7,617

 

 

4,218

Net income including noncontrolling interests

 

 

6,446

 

 

4,085

 

 

15,215

 

 

11,439

 

Net income attributable to noncontrolling interests

 

 

206

 

 

115

 

 

375

 

 

109

Net income attributable to ExxonMobil

 

 

6,240

 

 

3,970

 

 

14,840

 

 

11,330

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

  

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) 

 

 

1.46

 

 

0.93

 

 

3.47

 

 

2.66

  

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share - assuming dilution (dollars) 

 

 

1.46

 

 

0.93

 

 

3.47

 

 

2.66



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


3


 

EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

6,446

 

 

4,085

 

 

15,215

 

 

11,439

Other comprehensive income (net of income taxes)

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

124

 

 

2,342

 

 

(2,720)

 

 

5,424

 

Adjustment for foreign exchange translation (gain)/loss

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 included in net income

 

 

-

 

 

-

 

 

186

 

 

234

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

(3)

 

 

(145)

 

 

(394)

 

 

(329)

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

223

 

 

311

 

 

689

 

 

850

 

 

Total other comprehensive income

 

 

344

 

 

2,508

 

 

(2,239)

 

 

6,179

Comprehensive income including noncontrolling interests

 

 

6,790

 

 

6,593

 

 

12,976

 

 

17,618

 

Comprehensive income attributable to

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

noncontrolling interests

 

 

311

 

 

372

 

 

205

 

 

700

Comprehensive income attributable to ExxonMobil

 

 

6,479

 

 

6,221

 

 

12,771

 

 

16,918



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


4


 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED BALANCE SHEET

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sept. 30,

 

 

Dec. 31,

 

 

 

 

 

 

 

2018

 

 

2017

 

Assets

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

5,669

 

 

3,177

 

 

 

Notes and accounts receivable – net

 

 

27,880

 

 

25,597

 

 

 

Inventories

 

 

 

 

 

 

 

 

 

 

Crude oil, products and merchandise

 

 

14,617

 

 

12,871

 

 

 

 

Materials and supplies

 

 

4,144

 

 

4,121

 

 

 

Other current assets

 

 

1,665

 

 

1,368

 

 

 

 

Total current assets

 

 

53,975

 

 

47,134

 

 

Investments, advances and long-term receivables

 

 

40,427

 

 

39,160

 

 

Property, plant and equipment – net

 

 

249,153

 

 

252,630

 

 

Other assets, including intangibles – net

 

 

11,073

 

 

9,767

 

 

 

 

Total assets

 

 

354,628

 

 

348,691

 

 

 

 

 

 

 

 

 

 

 

 

Liabilities

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

 

Notes and loans payable

 

 

19,413

 

 

17,930

 

 

 

Accounts payable and accrued liabilities

 

 

41,714

 

 

36,796

 

 

 

Income taxes payable

 

 

4,161

 

 

3,045

 

 

 

 

Total current liabilities

 

 

65,288

 

 

57,771

 

 

Long-term debt

 

 

20,624

 

 

24,406

 

 

Postretirement benefits reserves

 

 

21,448

 

 

21,132

 

 

Deferred income tax liabilities

 

 

27,084

 

 

26,893

 

 

Long-term obligations to equity companies

 

 

4,625

 

 

4,774

 

 

Other long-term obligations

 

 

18,728

 

 

19,215

 

 

 

 

Total liabilities

 

 

157,797

 

 

154,191

 

 

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (Note 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Equity

 

 

 

 

 

 

 

 

Common stock without par value

 

 

 

 

 

 

 

 

 

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

 

 

15,254

 

 

14,656

 

 

Earnings reinvested

 

 

419,155

 

 

414,540

 

 

Accumulated other comprehensive income

 

 

(18,370)

 

 

(16,262)

 

 

Common stock held in treasury

 

 

 

 

 

 

 

 

 

(3,785 million shares at September 30, 2018 and

 

 

 

 

 

 

 

 

   3,780 million shares at December 31, 2017)

 

 

(225,674)

 

 

(225,246)

 

 

 

 

ExxonMobil share of equity

 

 

190,365

 

 

187,688

 

 

Noncontrolling interests

 

 

6,466

 

 

6,812

 

 

 

 

Total equity

 

 

196,831

 

 

194,500

 

 

 

 

Total liabilities and equity

 

 

354,628

 

 

348,691

 



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


5


 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

 

 

 

 

 

 

2018

 

 

2017

 

Cash flows from operating activities

 

 

 

 

 

 

 

 

Net income including noncontrolling interests

 

 

15,215

 

 

11,439

 

 

Depreciation and depletion

 

 

13,717

 

 

14,051

 

 

Changes in operational working capital, excluding cash and debt

 

 

(25)

 

 

(547)

 

 

All other items – net

 

 

(1,500)

 

 

(2,288)

 

 

 

 

Net cash provided by operating activities

 

 

27,407

 

 

22,655

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

Additions to property, plant and equipment

 

 

(13,480)

 

 

(10,901)

 

 

Proceeds associated with sales of subsidiaries, property, plant and

 

 

 

 

 

 

 

 

 

equipment, and sales and returns of investments

 

 

3,239

 

 

1,695

 

 

Additional investments and advances

 

 

(1,113)

 

 

(1,950)

 

 

Other investing activities including collection of advances

 

 

492

 

 

1,962

 

 

 

 

Net cash used in investing activities

 

 

(10,862)

 

 

(9,194)

 

 

 

 

 

 

 

 

 

 

 

 

Cash flows from financing activities

 

 

 

 

 

 

 

 

Additions to long-term debt

 

 

-

 

 

60

 

 

Additions to short-term debt

 

 

-

 

 

1,735

 

 

Reductions in short-term debt

 

 

(4,279)

 

 

(4,971)

 

 

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

 

 

 

 

 

 

 

 

 

months or less maturity (1) 

 

 

1,626

 

 

339

 

 

Cash dividends to ExxonMobil shareholders

 

 

(10,296)

 

 

(9,712)

 

 

Cash dividends to noncontrolling interests

 

 

(192)

 

 

(139)

 

 

Changes in noncontrolling interests

 

 

(374)

 

 

(90)

 

 

Common stock acquired

 

 

(430)

 

 

(515)

 

 

 

 

Net cash used in financing activities

 

 

(13,945)

 

 

(13,293)

 

Effects of exchange rate changes on cash

 

 

(108)

 

 

441

 

Increase/(decrease) in cash and cash equivalents

 

 

2,492

 

 

609

 

Cash and cash equivalents at beginning of period

 

 

3,177

 

 

3,657

 

Cash and cash equivalents at end of period

 

 

5,669

 

 

4,266

 

 

 

 

 

 

 

 

 

 

 

 

Supplemental Disclosures

 

 

 

 

 

 

 

 

Income taxes paid

 

 

6,740

 

 

4,611

 

 

Cash interest paid

 

 

839

 

 

965

 



2017 Noncash Transactions

In the first nine months of 2017, the Corporation completed the acquisitions of InterOil Corporation and of companies that own certain oil and gas properties in the Permian Basin and other assets. These transactions included a significant noncash component associated with the issuance of a combined 96 million shares of Exxon Mobil Corporation common stock in acquisition consideration.

 

 (1) Includes a net addition of commercial paper with a maturity of over three months of $0.3 billion in 2018 and a net reduction of $0.5 billion in 2017. The gross amount of commercial paper with a maturity of over three months issued was $3.1 billion in 2018 and $2.7 billion in 2017, while the gross amount repaid was $2.8 billion in 2018 and $3.2 billion in 2017.

 

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


6


 

 

EXXON MOBIL CORPORATION

 

CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

ExxonMobil Share of Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Accumulated

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other

 

Common

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Compre-

 

Stock

 

ExxonMobil

 

Non-

 

 

 

 

 

 

 

 

Common

 

Earnings

 

hensive

 

Held in

 

Share of

 

controlling

 

Total

 

 

 

 

 

Stock

 

Reinvested

 

Income

 

Treasury

 

Equity

 

Interests

 

Equity

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2016

 

 

12,157

 

 

407,831

 

 

(22,239)

 

 

(230,424)

 

 

167,325

 

 

6,505

 

 

173,830

 

Amortization of stock-based awards

 

 

635

 

 

-

 

 

-

 

 

-

 

 

635

 

 

-

 

 

635

 

Other

 

 

(87)

 

 

-

 

 

-

 

 

-

 

 

(87)

 

 

(54)

 

 

(141)

 

Net income for the period

 

 

-

 

 

11,330

 

 

-

 

 

-

 

 

11,330

 

 

109

 

 

11,439

 

Dividends - common shares

 

 

-

 

 

(9,712)

 

 

-

 

 

-

 

 

(9,712)

 

 

(139)

 

 

(9,851)

 

Other comprehensive income

 

 

-

 

 

-

 

 

5,588

 

 

-

 

 

5,588

 

 

591

 

 

6,179

 

Acquisitions, at cost

 

 

-

 

 

-

 

 

-

 

 

(596)

 

 

(596)

 

 

(90)

 

 

(686)

 

Issued for acquisitions

 

 

2,078

 

 

-

 

 

-

 

 

5,711

 

 

7,789

 

 

-

 

 

7,789

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

4

 

 

4

 

 

-

 

 

4

Balance as of September 30, 2017

 

 

14,783

 

 

409,449

 

 

(16,651)

 

 

(225,305)

 

 

182,276

 

 

6,922

 

 

189,198

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

605

 

 

-

 

 

-

 

 

-

 

 

605

 

 

-

 

 

605

 

Other

 

 

(7)

 

 

-

 

 

-

 

 

-

 

 

(7)

 

 

(8)

 

 

(15)

 

Net income for the period

 

 

-

 

 

14,840

 

 

-

 

 

-

 

 

14,840

 

 

375

 

 

15,215

 

Dividends - common shares

 

 

-

 

 

(10,296)

 

 

-

 

 

-

 

 

(10,296)

 

 

(192)

 

 

(10,488)

 

Cumulative effect of accounting

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

change

 

 

-

 

 

71

 

 

(39)

 

 

-

 

 

32

 

 

15

 

 

47

 

Other comprehensive income

 

 

-

 

 

-

 

 

(2,069)

 

 

-

 

 

(2,069)

 

 

(170)

 

 

(2,239)

 

Acquisitions, at cost

 

 

-

 

 

-

 

 

-

 

 

(430)

 

 

(430)

 

 

(366)

 

 

(796)

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

2

 

 

2

 

 

-

 

 

2

Balance as of September 30, 2018

 

 

15,254

 

 

419,155

 

 

(18,370)

 

 

(225,674)

 

 

190,365

 

 

6,466

 

 

196,831

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Nine Months Ended September 30, 2018

 

 

 

 

Nine Months Ended September 30, 2017

 

 

 

 

 

 

 

 

Held in

 

 

 

 

 

 

 

 

 

 

Held in

 

 

 

 

Common Stock Share Activity

 

Issued

 

Treasury

 

Outstanding

 

 

 

 

Issued

 

Treasury

 

Outstanding

 

 

 

 

(millions of shares)

 

 

 

 

(millions of shares)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31

 

 

8,019

 

 

(3,780)

 

 

4,239

 

 

 

 

 

8,019

 

 

(3,871)

 

 

4,148

 

 

 

Acquisitions

 

 

-

 

 

(5)

 

 

(5)

 

 

 

 

 

-

 

 

(7)

 

 

(7)

 

 

 

Issued for acquisitions

 

 

-

 

 

-

 

 

-

 

 

 

 

 

-

 

 

96

 

 

96

 

 

 

Dispositions

 

 

-

 

 

-

 

 

-

 

 

 

 

 

-

 

 

-

 

 

-

 

Balance as of September 30

 

 

8,019

 

 

(3,785)

 

 

4,234

 

 

 

 

 

8,019

 

 

(3,782)

 

 

4,237



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


7


 

EXXON MOBIL CORPORATION

 

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

 

1.      Basis of Financial Statement Preparation

 

These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 2017 Annual Report on Form 10-K. In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. Prior data has been reclassified in certain cases to conform to the current presentation basis.

 

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



2.      Accounting Changes

 

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

 

Effective January 1, 2018, ExxonMobil adopted the Financial Accounting Standards Board’s Update, Financial Instruments    Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. The standard requires investments in equity securities other than consolidated subsidiaries and equity method investments to be measured at fair value with changes in the fair value recognized through net income. The Corporation elected a modified approach for equity securities that do not have a readily determinable fair value. This modified approach measures investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The cumulative effect adjustment related to the adoption of this standard increased equity $47 million. The portion of unrealized gains and losses recognized during the reporting period on equity securities still held at September 30, 2018 and the carrying value of equity securities without readily determinable fair values at September 30, 2018 were not significant to the Corporation. The standard also expanded disclosures related to financial instruments. See Note 7.

 

Effective January 1, 2018, ExxonMobil adopted the Financial Accounting Standards Board’s Update, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost. The update requires separate presentation of the service cost component from other components of net benefit costs. The other components are reported in a new line on the Corporation’s Statement of Income, “Non-service pension and postretirement benefit expense.” The Corporation elected to use the practical expedient which uses the amounts disclosed in the pension and other postretirement benefit plan note for the prior comparative periods as the estimation basis for applying the retrospective presentation requirements, as it is impracticable to determine the amounts capitalized in those periods. Beginning in 2018, the other components of net benefit costs are included in the Corporate and financing segment. The estimated after-tax impact from the change in segmentation is an increase in Corporate and financing expenses of about $100 million for the third quarter and $300 million for the first nine months of 2018. The increase in the Corporate and financing expenses is offset by lower expenses across the operating segments. Additionally, only the service cost component of net benefit costs is eligible for capitalization in situations where it is otherwise appropriate to capitalize employee costs in connection with the construction or production of an asset.  


8


 

The impact of the retrospective presentation change on ExxonMobil's Consolidated Statement of Income for the three months and nine months ended September 30, 2017, is shown below.  

 

 

 

Three Months Ended

 

Nine Months Ended

 

 

 

September 30, 2017

 

September 30, 2017

 

 

 

As Reported

 

Change

 

As Adjusted

 

As Reported

 

Change

 

As Adjusted

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Production and manufacturing expenses

8,334

 

(382)

 

7,952

 

24,586

 

(1,008)

 

23,578

Selling, general and administrative expenses

2,725

 

(93)

 

2,632

 

7,952

 

(259)

 

7,693

Non-service pension and postretirement benefit expense

-

 

475

 

475

 

-

 

1,267

 

1,267

 

Effective January 1, 2019, ExxonMobil will adopt the Financial Accounting Standards Board’s standard, Leases (Topic 842), as amended. The standard requires all leases with an initial term greater than one year to be recorded on the balance sheet as a right of use asset and a lease liability. We expect to use a transition method that applies the new lease standard at January 1, 2019, and recognizes any cumulative-effect adjustments to the opening balance of 2019 retained earnings.

 

The Corporation acquired lease accounting software to facilitate implementation, and is currently configuring and testing the software. Based on leases outstanding at the end of 2017, the Corporation estimates the operating lease right of use asset and lease liability would have been in the range of $4 billion to $5 billion at that time. The effect on the Corporation’s balance sheet as a result of implementing the standard on January 1, 2019, could differ considerably depending on operating leases commenced in 2018 as well as interest rates and other factors such as the expiry or renewal of leases during the year.

 

3.      Litigation and Other Contingencies

 

Litigation

 

A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters, as well as other matters which management believes should be disclosed. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a material adverse effect upon the Corporation's operations, financial condition, or financial statements taken as a whole.

 

Other Contingencies

 

The Corporation and certain of its consolidated subsidiaries were contingently liable at September 30, 2018, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.

 

 

 

 

 

 

 

As of September 30, 2018

 

 

 

 

 

 

 

 

Equity

 

 

Other

 

 

 

 

 

 

 

 

 

 

 

Company

 

 

Third Party

 

 

 

 

 

 

 

 

 

 

 

Obligations (1) 

 

 

Obligations

 

 

Total

 

 

 

 

 

 

 

 

(millions of dollars)

 

 

 

Guarantees

 

 

 

 

 

 

 

 

 

 

 

 

 

Debt-related

 

 

461

 

 

63

 

 

524

 

 

 

 

Other

 

 

1,008

 

 

4,046

 

 

5,054

 

 

 

 

 

Total

 

 

1,469

 

 

4,109

 

 

5,578

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) ExxonMobil share

 

 

 

 

 

 

 

 

 

 

 


9


 

Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition.

 

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

In accordance with a Venezuelan nationalization decree issued in February 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project. ExxonMobil refused to accede to the terms proffered by the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project.

 

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

 

The net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.

 

An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award. The Contractors appealed that judgment to the Court of Appeal, Abuja Judicial Division. On July 22, 2016, the Court of Appeal upheld the decision of the lower court setting aside the award. On October 21, 2016, the Contractors appealed the decision to the Supreme Court of Nigeria. In June 2013, the Contractors filed a lawsuit against NNPC in the Nigerian federal high court in order to preserve their ability to seek enforcement of the PSC in the courts if necessary. Following dismissal by this court, the Contractors appealed to the Nigerian Court of Appeal in June 2016. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. NNPC has moved to dismiss the lawsuit. At this time, the net impact of this matter on the Corporation's consolidated financial results cannot be reasonably estimated. However, regardless of the outcome of enforcement proceedings, the Corporation does not expect the proceedings to have a material effect upon the Corporation's operations or financial condition.


10


 

4.     Other Comprehensive Income Information

 

 

 

 

 

 

Cumulative

 

 

Post-

 

 

 

 

 

 

 

 

 

Foreign

 

 

retirement

 

 

 

 

 

 

 

 

 

Exchange

 

 

Benefits

 

 

 

 

ExxonMobil Share of Accumulated Other

 

 

Translation

 

 

Reserves

 

 

 

 

Comprehensive Income

 

 

Adjustment

 

 

Adjustment

 

 

Total

 

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2016

 

 

(14,501)

 

 

(7,738)

 

 

(22,239)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

4,925

 

 

(300)

 

 

4,625

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

140

 

 

823

 

 

963

 

Total change in accumulated other comprehensive income

 

 

5,065

 

 

523

 

 

5,588

 

Balance as of September 30, 2017

 

 

(9,436)

 

 

(7,215)

 

 

(16,651)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Balance as of December 31, 2017

 

 

(9,482)

 

 

(6,780)

 

 

(16,262)

 

Current period change excluding amounts reclassified

 

 

 

 

 

 

 

 

 

 

 

from accumulated other comprehensive income

 

 

(2,551)

 

 

(406)

 

 

(2,957)

 

Amounts reclassified from accumulated other

 

 

 

 

 

 

 

 

 

 

 

comprehensive income

 

 

186

 

 

663

 

 

849

 

Total change in accumulated other comprehensive income

 

 

(2,365)

 

 

257

 

 

(2,108)

 

Balance as of September 30, 2018

 

 

(11,847)

 

 

(6,523)

 

 

(18,370)

 

 

 

 

 

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Amounts Reclassified Out of Accumulated Other

 

 

September 30,

 

 

September 30,

 

Comprehensive Income - Before-tax Income/(Expense)

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

 

 

 

 

 

 

 

 

 

 

 

(Statement of Income line: Other income)

-

 

 

-

 

 

(186)

 

 

(234)

 

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)

(287)

 

 

(450)

 

 

(897)

 

 

(1,215)



 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

Income Tax (Expense)/Credit For

 

 

September 30,

 

 

September 30,

 

Components of Other Comprehensive Income

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

 

8

 

 

17

 

 

13

 

 

(9)

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(excluding amortization)

 

 

-

 

 

74

 

 

66

 

 

154

 

Amortization and settlement of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 

adjustment included in net periodic benefit costs

 

 

(64)

 

 

(139)

 

 

(208)

 

 

(365)

 

Total

 

 

(56)

 

 

(48)

 

 

(129)

 

 

(220)


11


 

5.     Earnings Per Share

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share

 

 

 

 

 

 

 

 

 

 

 

 

Net income attributable to ExxonMobil (millions of dollars)

 

6,240

 

 

3,970

 

 

14,840

 

 

11,330

 

  

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

 

outstanding (millions of shares)

 

4,271

 

 

4,271

 

 

4,271

 

 

4,252

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings per common share (dollars) (1) 

 

1.46

 

 

0.93

 

 

3.47

 

 

2.66

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dividends paid per common share (dollars) 

 

0.82

 

 

0.77

 

 

2.41

 

 

2.29

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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

 

6.     Pension and Other Postretirement Benefits

 

 

 

 

 

 

 

 

Three Months Ended

 

 

Nine Months Ended

 

 

 

 

 

 

 

September 30,

 

 

September 30,

 

 

 

 

 

 

 

2018

 

 

2017

 

 

2018

 

 

2017

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(millions of dollars)

 

Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

203

 

 

200

 

 

616

 

 

583

 

 

 

Interest cost

 

 

179

 

 

199

 

 

540

 

 

598

 

 

 

Expected return on plan assets

 

 

(182)

 

 

(194)

 

 

(545)

 

 

(582)

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

93

 

 

110

 

 

276

 

 

332

 

 

 

Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

curtailment/settlement cost

 

 

63

 

 

187

 

 

189

 

 

450

 

 

 

Net benefit cost

 

 

356

 

 

502

 

 

1,076

 

 

1,381

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Service cost

 

 

149

 

 

155

 

 

461

 

 

445

 

 

 

Interest cost

 

 

185

 

 

198

 

 

571

 

 

574

 

 

 

Expected return on plan assets

 

 

(233)

 

 

(260)

 

 

(722)

 

 

(743)

 

 

 

Amortization of actuarial loss/(gain) and prior

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

service cost

 

 

113

 

 

135

 

 

344

 

 

388

 

 

 

Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

curtailment/settlement cost

 

 

-

 

 

-

 

 

33

 

 

(5)

 

 

 

Net benefit cost