UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
10-Q
☑
QUARTERLY REPORT
PURSUANT TO SECTION 13 OR 15(d) OF
THE
SECURITIES EXCHANGE ACT OF 1934
For
the quarterly period ended
March 31,
2019
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 CORP
ORATION
(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)
Securities registered
pursuant to Section 12(b) of the Act:
Title
of Each Class
|
|
Trading
Symbol
|
|
Name of Each Exchange
on Which Registered
|
Common Stock, without
par value
|
|
XOM
|
|
New York Stock Exchange
|
Indicate
by check mark whether the registrant (1) has filed all reports required to be
filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the
preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes
☑
No
☐
Indicate
by check mark whether the registrant has submitted electronically every
Interactive Data File required to be submitted and posted pursuant to Rule 405
of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months
(or for such shorter period that the registrant was required to submit and post
such files). Yes
☑
No
☐
Indicate
by check mark whether the registrant is a large accelerated filer, an
accelerated filer, a non-accelerated filer, smaller reporting company, or an
emerging growth company. See the definitions of "large accelerated
filer," "accelerated filer," "smaller reporting
company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
|
☑
|
Accelerated filer
|
☐
|
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 March 31, 2019
|
Common
stock, without par value
|
|
4,231,093,914
|
PART
I. FINANCIAL INFORMATION
|
|
|
|
|
|
|
|
|
|
|
|
Item 1.
Financial Statements
|
|
|
|
|
|
|
|
|
|
|
|
EXXON MOBIL CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENT OF
INCOME
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
Revenues and
other income
|
|
|
|
|
|
|
|
|
Sales and other
operating revenue
|
|
|
61,646
|
|
|
65,436
|
|
|
Income from
equity affiliates
|
|
|
1,709
|
|
|
1,910
|
|
|
Other income
|
|
|
270
|
|
|
865
|
|
|
|
Total revenues
and other income
|
|
|
63,625
|
|
|
68,211
|
|
Costs and other
deductions
|
|
|
|
|
|
|
|
|
Crude oil and
product purchases
|
|
|
34,801
|
|
|
36,288
|
|
|
Production and
manufacturing expenses
|
|
|
8,970
|
|
|
8,491
|
|
|
Selling, general
and administrative expenses
|
|
|
2,770
|
|
|
2,747
|
|
|
Depreciation and
depletion
|
|
|
4,571
|
|
|
4,470
|
|
|
Exploration
expenses, including dry holes
|
|
|
280
|
|
|
287
|
|
|
Non-service
pension and postretirement benefit expense
|
|
|
358
|
|
|
337
|
|
|
Interest expense
|
|
|
181
|
|
|
204
|
|
|
Other taxes and
duties
|
|
|
7,405
|
|
|
8,147
|
|
|
|
Total costs and
other deductions
|
|
|
59,336
|
|
|
60,971
|
|
Income before
income taxes
|
|
|
4,289
|
|
|
7,240
|
|
|
Income taxes
|
|
|
1,883
|
|
|
2,457
|
|
Net income
including noncontrolling interests
|
|
|
2,406
|
|
|
4,783
|
|
|
Net income
attributable to noncontrolling interests
|
|
|
56
|
|
|
133
|
|
Net income
attributable to ExxonMobil
|
|
|
2,350
|
|
|
4,650
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share
(dollars)
|
|
|
0.55
|
|
|
1.09
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share - assuming dilution
(dollars)
|
|
|
0.55
|
|
|
1.09
|
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
EXXON
MOBIL CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENT OF
COMPREHENSIVE INCOME
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
including noncontrolling interests
|
|
|
|
2,406
|
|
|
4,783
|
|
|
Other
comprehensive income (net of income taxes)
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange
translation adjustment
|
|
|
|
749
|
|
|
(804)
|
|
|
|
Adjustment for
foreign exchange translation (gain)/loss included in net income
|
|
|
-
|
|
|
168
|
|
|
|
Postretirement
benefits reserves adjustment (excluding amortization)
|
|
|
(26)
|
|
|
(434)
|
|
|
|
Amortization and
settlement of postretirement benefits reserves adjustment
|
|
|
|
|
|
|
|
|
|
|
|
included in net
periodic benefit costs
|
|
|
|
185
|
|
|
237
|
|
|
|
|
Total other
comprehensive income
|
|
|
|
908
|
|
|
(833)
|
|
|
Comprehensive
income including noncontrolling interests
|
|
|
3,314
|
|
|
3,950
|
|
|
|
Comprehensive
income attributable to noncontrolling interests
|
|
|
182
|
|
|
(9)
|
|
|
Comprehensive
income attributable to ExxonMobil
|
|
|
|
3,132
|
|
|
3,959
|
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
EXXON
MOBIL CORPORATION
|
|
CONDENSED CONSOLIDATED BALANCE SHEET
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mar. 31,
|
|
|
Dec. 31,
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
4,586
|
|
|
3,042
|
|
|
|
Notes and
accounts receivable – net
|
|
|
27,105
|
|
|
24,701
|
|
|
|
Inventories
|
|
|
|
|
|
|
|
|
|
|
Crude oil,
products and merchandise
|
|
|
13,979
|
|
|
14,803
|
|
|
|
|
Materials and
supplies
|
|
|
4,353
|
|
|
4,155
|
|
|
|
Other current
assets
|
|
|
1,553
|
|
|
1,272
|
|
|
|
|
Total current
assets
|
|
|
51,576
|
|
|
47,973
|
|
|
Investments,
advances and long-term receivables
|
|
|
42,068
|
|
|
40,790
|
|
|
Property, plant
and equipment – net
|
|
|
248,563
|
|
|
247,101
|
|
|
Other assets,
including intangibles – net
|
|
|
13,982
|
|
|
10,332
|
|
|
|
|
Total assets
|
|
|
356,189
|
|
|
346,196
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
Current
liabilities
|
|
|
|
|
|
|
|
|
|
Notes and loans
payable
|
|
|
21,794
|
|
|
17,258
|
|
|
|
Accounts payable
and accrued liabilities
|
|
|
42,090
|
|
|
37,268
|
|
|
|
Income taxes
payable
|
|
|
2,748
|
|
|
2,612
|
|
|
|
|
Total current
liabilities
|
|
|
66,632
|
|
|
57,138
|
|
|
Long-term debt
|
|
|
19,031
|
|
|
20,538
|
|
|
Postretirement
benefits reserves
|
|
|
20,051
|
|
|
20,272
|
|
|
Deferred income
tax liabilities
|
|
|
27,287
|
|
|
27,244
|
|
|
Long-term
obligations to equity companies
|
|
|
4,430
|
|
|
4,382
|
|
|
Other long-term
obligations
|
|
|
20,737
|
|
|
18,094
|
|
|
|
|
Total liabilities
|
|
|
158,168
|
|
|
147,668
|
|
|
|
|
|
|
|
|
|
|
|
|
Commitments and
contingencies (Note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity
|
|
|
|
|
|
|
|
|
Common stock
without par value
|
|
|
|
|
|
|
|
|
|
(9,000 million
shares authorized, 8,019 million shares issued)
|
|
|
15,476
|
|
|
15,258
|
|
|
Earnings reinvested
|
|
|
420,498
|
|
|
421,653
|
|
|
Accumulated other
comprehensive income
|
|
|
(18,782)
|
|
|
(19,564)
|
|
|
Common stock held
in treasury
|
|
|
|
|
|
|
|
|
|
(3,788 million
shares at March 31, 2019 and
|
|
|
|
|
|
|
|
|
3,782 million
shares at December 31, 2018)
|
|
|
(225,970)
|
|
|
(225,553)
|
|
|
|
|
ExxonMobil share
of equity
|
|
|
191,222
|
|
|
191,794
|
|
|
Noncontrolling
interests
|
|
|
6,799
|
|
|
6,734
|
|
|
|
|
Total equity
|
|
|
198,021
|
|
|
198,528
|
|
|
|
|
Total liabilities
and equity
|
|
|
356,189
|
|
|
346,196
|
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
EXXON
MOBIL CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENT OF CASH
FLOWS
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
Cash flows from
operating activities
|
|
|
|
|
|
|
|
|
Net income
including noncontrolling interests
|
|
|
2,406
|
|
|
4,783
|
|
|
Depreciation and
depletion
|
|
|
4,571
|
|
|
4,470
|
|
|
Changes in
operational working capital, excluding cash and debt
|
|
|
2,257
|
|
|
351
|
|
|
All other items –
net
|
|
|
(896)
|
|
|
(1,085)
|
|
|
|
|
Net cash provided
by operating activities
|
|
|
8,338
|
|
|
8,519
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
|
|
|
Additions to
property, plant and equipment
|
|
|
(5,199)
|
|
|
(3,349)
|
|
|
Proceeds
associated with sales of subsidiaries, property, plant and
|
|
|
|
|
|
|
|
|
|
equipment, and
sales and returns of investments
|
|
|
107
|
|
|
1,441
|
|
|
Additional
investments and advances
|
|
|
(910)
|
|
|
(138)
|
|
|
Other investing
activities including collection of advances
|
|
|
209
|
|
|
187
|
|
|
|
|
Net cash used in
investing activities
|
|
|
(5,793)
|
|
|
(1,859)
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
Reductions in
short-term debt
|
|
|
(3,777)
|
|
|
(3,872)
|
|
|
Additions/(reductions)
in commercial paper, and debt with three
|
|
|
|
|
|
|
|
|
|
months or less
maturity
(1)
|
|
|
6,776
|
|
|
1,950
|
|
|
Cash dividends to
ExxonMobil shareholders
|
|
|
(3,505)
|
|
|
(3,291)
|
|
|
Cash dividends to
noncontrolling interests
|
|
|
(43)
|
|
|
(43)
|
|
|
Changes in
noncontrolling interests
|
|
|
(74)
|
|
|
(59)
|
|
|
Common stock
acquired
|
|
|
(421)
|
|
|
(427)
|
|
|
|
|
Net cash used in
financing activities
|
|
|
(1,044)
|
|
|
(5,742)
|
|
Effects of
exchange rate changes on cash
|
|
|
43
|
|
|
30
|
|
Increase/(decrease)
in cash and cash equivalents
|
|
|
1,544
|
|
|
948
|
|
Cash and cash
equivalents at beginning of period
|
|
|
3,042
|
|
|
3,177
|
|
Cash and cash
equivalents at end of period
|
|
|
4,586
|
|
|
4,125
|
|
|
|
|
|
|
|
|
|
|
|
|
Supplemental
Disclosures
|
|
|
|
|
|
|
|
|
Income taxes paid
|
|
|
1,793
|
|
|
2,117
|
|
|
Cash interest
paid
|
|
|
|
|
|
|
|
|
|
Included in cash
flows from operating activities
|
|
|
247
|
|
|
206
|
|
|
|
Capitalized,
included in cash flows from investing activities
|
|
|
175
|
|
|
154
|
|
|
|
Total cash
interest paid
|
|
|
422
|
|
|
360
|
|
(1)
Includes a net
addition of commercial paper with a maturity of over three months of $
5.3
billion in 2019 and a net
reduction of $
0.3
billion in 2018. The gross
amount of commercial paper with a maturity of over three months issued was $
6.4
billion in 2019 and $
0.4
billion in 2018, while the
gross amount repaid was $
1.1
billion in 2019 and $
0.7
billion in 2018.
The information in the
Notes to Condensed Consolidated Financial Statements is an integral part of
these statements.
|
EXXON MOBIL CORPORATION
|
|
CONDENSED CONSOLIDATED STATEMENT OF
CHANGES IN EQUITY
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ExxonMobil Share of Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
|
|
Common
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Compre-
|
|
Stock
|
|
ExxonMobil
|
|
Non-
|
|
|
|
|
|
|
|
|
Common
|
|
Earnings
|
|
hensive
|
|
Held in
|
|
Share of
|
|
controlling
|
|
Total
|
|
|
|
|
|
Stock
|
|
Reinvested
|
|
Income
|
|
Treasury
|
|
Equity
|
|
Interests
|
|
Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2017
|
|
|
14,656
|
|
|
414,540
|
|
|
(16,262)
|
|
|
(225,246)
|
|
|
187,688
|
|
|
6,812
|
|
|
194,500
|
|
Amortization of
stock-based awards
|
|
|
237
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
237
|
|
|
-
|
|
|
237
|
|
Other
|
|
|
(5)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5)
|
|
|
-
|
|
|
(5)
|
|
Net income for
the period
|
|
|
-
|
|
|
4,650
|
|
|
-
|
|
|
-
|
|
|
4,650
|
|
|
133
|
|
|
4,783
|
|
Dividends -
common shares
|
|
|
-
|
|
|
(3,291)
|
|
|
-
|
|
|
-
|
|
|
(3,291)
|
|
|
(43)
|
|
|
(3,334)
|
|
Cumulative effect
of accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
change
|
|
|
-
|
|
|
71
|
|
|
(39)
|
|
|
-
|
|
|
32
|
|
|
15
|
|
|
47
|
|
Other
comprehensive income
|
|
|
-
|
|
|
-
|
|
|
(691)
|
|
|
-
|
|
|
(691)
|
|
|
(142)
|
|
|
(833)
|
|
Acquisitions, at
cost
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(427)
|
|
|
(427)
|
|
|
(59)
|
|
|
(486)
|
|
Dispositions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
2
|
|
|
2
|
|
|
-
|
|
|
2
|
Balance as of
March 31, 2018
|
|
|
14,888
|
|
|
415,970
|
|
|
(16,992)
|
|
|
(225,671)
|
|
|
188,195
|
|
|
6,716
|
|
|
194,911
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2018
|
|
|
15,258
|
|
|
421,653
|
|
|
(19,564)
|
|
|
(225,553)
|
|
|
191,794
|
|
|
6,734
|
|
|
198,528
|
|
Amortization of
stock-based awards
|
|
|
223
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
223
|
|
|
-
|
|
|
223
|
|
Other
|
|
|
(5)
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(5)
|
|
|
-
|
|
|
(5)
|
|
Net income for
the period
|
|
|
-
|
|
|
2,350
|
|
|
-
|
|
|
-
|
|
|
2,350
|
|
|
56
|
|
|
2,406
|
|
Dividends -
common shares
|
|
|
-
|
|
|
(3,505)
|
|
|
-
|
|
|
-
|
|
|
(3,505)
|
|
|
(43)
|
|
|
(3,548)
|
|
Other
comprehensive income
|
|
|
-
|
|
|
-
|
|
|
782
|
|
|
-
|
|
|
782
|
|
|
126
|
|
|
908
|
|
Acquisitions, at
cost
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
(421)
|
|
|
(421)
|
|
|
(83)
|
|
|
(504)
|
|
Dispositions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
4
|
|
|
4
|
|
|
9
|
|
|
13
|
Balance as of
March 31, 2019
|
|
|
15,476
|
|
|
420,498
|
|
|
(18,782)
|
|
|
(225,970)
|
|
|
191,222
|
|
|
6,799
|
|
|
198,021
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2019
|
|
|
|
|
Three Months Ended March 31, 2018
|
|
|
|
|
|
|
|
|
Held in
|
|
|
|
|
|
|
|
|
|
|
Held in
|
|
|
|
|
Common
Stock Share Activity
|
|
Issued
|
|
Treasury
|
|
Outstanding
|
|
|
|
|
Issued
|
|
Treasury
|
|
Outstanding
|
|
|
|
|
(millions of shares)
|
|
|
|
|
(millions of shares)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31
|
|
|
8,019
|
|
|
(3,782)
|
|
|
4,237
|
|
|
|
|
|
8,019
|
|
|
(3,780)
|
|
|
4,239
|
|
|
|
Acquisitions
|
|
|
-
|
|
|
(6)
|
|
|
(6)
|
|
|
|
|
|
-
|
|
|
(5)
|
|
|
(5)
|
|
|
|
Dispositions
|
|
|
-
|
|
|
-
|
|
|
-
|
|
|
|
|
|
-
|
|
|
-
|
|
|
-
|
|
Balance as of
March 31
|
|
|
8,019
|
|
|
(3,788)
|
|
|
4,231
|
|
|
|
|
|
8,019
|
|
|
(3,785)
|
|
|
4,234
|
The information in the Notes to Condensed Consolidated Financial
Statements is an integral part of these statements.
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 2018 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, 2019, the Corporation adopted the Financial
Accounting Standards Board’s Standard,
Leases (Topic 842)
, as amended.
The standard requires all leases to be recorded on the balance sheet as a right
of use asset and a lease liability. The Corporation used a transition method
that applies the new lease standard at January 1, 2019.
The Corporation applied a policy election to exclude short-term
leases from balance sheet recognition and also elected certain practical
expedients at adoption. As permitted, the Corporation did not reassess whether
existing contracts are or contain leases, the lease classification for any
existing leases, initial direct costs for any existing lease and whether
existing land easements and rights of way, which were not previously accounted
for as leases, are or contain a lease.
At adoption on January 1, 2019, an
operating lease liability of $
3.3
billion was recorded and
the operating lease right of use asset was $
4.3
billion, including $
1.0
billion of previously
recorded prepaid leases. There was no cumulative earnings effect adjustment.
Effective January 1, 2020, ExxonMobil will adopt the Financial
Accounting Standards Board’s update,
Financial Instruments – Credit Losses
(Topic 326)
, as amended. The standard requires a valuation allowance for
credit losses be recognized for certain financial assets that reflects the
current expected credit loss over the asset’s contractual life. The valuation
allowance considers the risk of loss, even if remote, and considers past
events, current conditions and expectations of the future. The Corporation is
evaluating the standard and its effect on the Corporation’s financial
statements.
3. Litigation and Other Contingencies
Litigation
A variety of claims
have been made against ExxonMobil and certain of its consolidated subsidiaries
in a number of pending lawsuits. Management has regular litigation reviews, including
updates from corporate and outside counsel, to assess the need for accounting
recognition or disclosure of these contingencies. The Corporation accrues an
undiscounted liability for those contingencies where the incurrence of a loss
is probable and the amount can be reasonably estimated. If a range of amounts
can be reasonably estimated and no amount within the range is a better estimate
than any other amount, then the minimum of the range is accrued. The
Corporation does not record liabilities when the likelihood that the liability
has been incurred is probable but the amount cannot be reasonably estimated or
when the liability is believed to be only reasonably possible or remote. For
contingencies where an unfavorable outcome is reasonably possible and which are
significant, the Corporation discloses the nature of the contingency and, where
feasible, an estimate of the possible loss. For purposes of our contingency
disclosures, “significant” includes material matters, as well as other matters
which management believes should be disclosed. ExxonMobil will continue to
defend itself vigorously in these matters. Based on a consideration of all
relevant facts and circumstances, the Corporation does not believe the ultimate
outcome of any currently pending lawsuit against ExxonMobil will have a
material adverse effect upon the Corporation's operations, financial condition,
or financial statements taken as a whole.
Other Contingencies
The Corporation and
certain of its consolidated subsidiaries were contingently liable at
March 31, 2019, for guarantees relating to notes, loans and performance
under contracts. Where guarantees for environmental remediation and other
similar matters do not include a stated cap, the amounts reflect management’s
estimate of the maximum potential exposure. These guarantees are not reasonably
likely to have a material effect on the Corporation’s financial condition,
changes in financial condition, revenues or expenses, results of operations,
liquidity, capital expenditures or capital resources.
|
|
|
|
|
|
As of March 31, 2019
|
|
|
|
|
|
|
|
|
Equity
|
|
|
Other
|
|
|
|
|
|
|
|
|
|
|
|
Company
|
|
|
Third Party
|
|
|
|
|
|
|
|
|
|
|
|
Obligations
(1)
|
|
|
Obligations
|
|
|
Total
|
|
|
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
Guarantees
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Debt-related
|
|
|
612
|
|
|
79
|
|
|
691
|
|
|
|
|
Other
|
|
|
1,081
|
|
|
4,288
|
|
|
5,369
|
|
|
|
|
|
Total
|
|
|
1,693
|
|
|
4,367
|
|
|
6,060
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
|
ExxonMobil
share
|
|
|
|
|
|
|
|
|
|
|
|
Additionally, the Corporation and its affiliates have numerous
long-term sales and purchase commitments in their various business activities,
all of which are expected to be fulfilled with no adverse consequences material
to the Corporation’s operations or financial condition.
The
operations and earnings of the Corporation and its affiliates throughout the
world have been, and may in the future be, affected from time to time in varying
degree by political developments and laws and regulations, such as forced
divestiture of assets; restrictions on production, imports and exports; price
controls; tax increases and retroactive tax claims; expropriation of property;
cancellation of contract rights and environmental regulations. Both the
likelihood of such occurrences and their overall effect upon the Corporation
vary greatly from country to country and are not predictable.
In accordance with a
Venezuelan nationalization decree issued in February 2007, a subsidiary of the
Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro
Negro Heavy Oil Project. The decree also required conversion of the Cerro Negro
Project into a “mixed enterprise” and an increase in PdVSA’s or one of its
affiliate’s ownership interest in the Project. ExxonMobil refused to accede to
the terms proffered by the government, and on June 27, 2007, the government
expropriated ExxonMobil’s
41.67
percent interest in the
Cerro Negro Project.
ExxonMobil collected
awards of $
908
million in an arbitration
against PdVSA under the rules of the International Chamber of Commerce in
respect of an indemnity related to the Cerro Negro Project and $
260
million in an arbitration
for compensation due for the La Ceiba Project and for export curtailments at
the Cerro Negro Project under rules of International Centre for Settlement of
Investment Disputes (ICSID). An ICSID arbitration award relating to the Cerro
Negro Project’s expropriation ($
1.4
billion) was annulled
based on a determination that a prior Tribunal failed to adequately explain why
the cap on damages in the indemnity owed by PdVSA did not affect or limit the
amount owed for the expropriation of the Cerro Negro Project. ExxonMobil filed
a new claim seeking to restore the original award of damages for the Cerro
Negro Project with ICSID on September 26, 2018.
The net impact of this
matter on the Corporation’s consolidated financial results cannot be reasonably
estimated. Regardless, the Corporation does not expect the resolution to have a
material effect upon the Corporation’s operations or financial condition.
An affiliate of ExxonMobil is one of the Contractors
under a Production Sharing Contract (PSC) with the Nigerian National Petroleum
Corporation (NNPC) covering the Erha block located in the offshore waters of
Nigeria. ExxonMobil's affiliate is the operator of the block and owns a
56.25
percent interest under the
PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude
oil in excess of its entitlement under the terms of the PSC. In accordance with
the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria,
under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a
three-member arbitral Tribunal issued an award upholding the Contractors'
position in all material respects and awarding damages to the Contractors
jointly in an amount of approximately $
1.8
billion plus $
234
million in accrued
interest. The Contractors petitioned a Nigerian federal court for enforcement
of the award, and NNPC petitioned the same court to have the award set aside.
On May 22, 2012, the court set aside the award. The Contractors appealed
that judgment to the Court of Appeal, Abuja Judicial Division. On July 22,
2016, the Court of Appeal upheld the decision of the lower court setting aside
the award.
On
October 21, 2016, the Contractors appealed the decision to the Supreme
Court of Nigeria. In June 2013, the Contractors filed a lawsuit against NNPC in
the Nige
rian 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.
4. Other
Comprehensive Income Information
|
|
|
|
|
|
Cumulative
|
|
|
Post-
|
|
|
|
|
|
|
|
|
|
Foreign
|
|
|
retirement
|
|
|
|
|
|
|
|
|
|
Exchange
|
|
|
Benefits
|
|
|
|
|
ExxonMobil
Share of Accumulated Other
|
|
|
Translation
|
|
|
Reserves
|
|
|
|
|
Comprehensive
Income
|
|
|
Adjustment
|
|
|
Adjustment
|
|
|
Total
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2017
|
|
|
(9,482)
|
|
|
(6,780)
|
|
|
(16,262)
|
|
Current period
change excluding amounts reclassified
|
|
|
|
|
|
|
|
|
|
|
|
from accumulated
other comprehensive income
|
|
|
(686)
|
|
|
(440)
|
|
|
(1,126)
|
|
Amounts
reclassified from accumulated other
|
|
|
|
|
|
|
|
|
|
|
|
comprehensive
income
|
|
|
168
|
|
|
228
|
|
|
396
|
|
Total change in
accumulated other comprehensive income
|
|
|
(518)
|
|
|
(212)
|
|
|
(730)
|
|
Balance as of
March 31, 2018
|
|
|
(10,000)
|
|
|
(6,992)
|
|
|
(16,992)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance as of
December 31, 2018
|
|
|
(13,881)
|
|
|
(5,683)
|
|
|
(19,564)
|
|
Current period
change excluding amounts reclassified
|
|
|
|
|
|
|
|
|
|
|
|
from accumulated
other comprehensive income
|
|
|
627
|
|
|
(23)
|
|
|
604
|
|
Amounts
reclassified from accumulated other
|
|
|
|
|
|
|
|
|
|
|
|
comprehensive
income
|
|
|
-
|
|
|
178
|
|
|
178
|
|
Total change in
accumulated other comprehensive income
|
|
|
627
|
|
|
155
|
|
|
782
|
|
Balance as of
March 31, 2019
|
|
|
(13,254)
|
|
|
(5,528)
|
|
|
(18,782)
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Amounts
Reclassified Out of Accumulated Other
|
|
|
|
|
|
|
March 31,
|
|
Comprehensive
Income - Before-tax Income/(Expense)
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Foreign exchange
translation gain/(loss) included in net income
|
|
|
|
|
|
|
|
(Statement of
Income line: Other income)
|
|
|
|
-
|
|
|
(168)
|
|
Amortization and
settlement of postretirement benefits reserves
|
|
|
|
|
|
|
|
|
|
adjustment
included in net periodic benefit costs
|
|
|
|
|
|
|
(Statement of
Income line: Non-service pension and postretirement benefit expense)
|
(237)
|
|
|
(320)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
Income Tax
(Expense)/Credit For
|
|
|
|
|
|
March 31,
|
|
Components
of Other Comprehensive Income
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Postretirement
benefits reserves adjustment (excluding amortization)
|
|
|
|
|
|
10
|
|
|
124
|
|
Amortization and
settlement of postretirement benefits reserves
|
|
|
|
|
|
|
|
|
|
|
|
adjustment
included in net periodic benefit costs
|
|
|
|
|
|
(52)
|
|
|
(83)
|
|
Total
|
|
|
|
|
|
(42)
|
|
|
41
|
5. Earnings Per
Share
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
common share
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
attributable to ExxonMobil
(millions of dollars)
|
|
|
2,350
|
|
|
4,650
|
|
|
|
|
|
|
|
|
|
Weighted average
number of common shares outstanding
(millions of shares)
|
|
|
4,270
|
|
|
4,270
|
|
|
|
|
|
|
|
|
|
Earnings per
common share
(dollars)
(1)
|
|
|
0.55
|
|
|
1.09
|
|
|
|
|
|
|
|
|
|
Dividends paid
per common share
(dollars)
|
|
|
0.82
|
|
|
0.77
|
|
|
|
|
|
|
|
|
|
|
|
|
|
(1)
The calculation of
earnings per common share and earnings per common share – assuming dilution are
the same in each period shown.
6. Pension and Other Postretirement Benefits
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
|
(millions of dollars)
|
|
Components of
net benefit cost
|
|
|
|
|
|
|
|
|
|
Pension Benefits
- U.S.
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
|
175
|
|
|
209
|
|
|
|
Interest cost
|
|
|
|
193
|
|
|
180
|
|
|
|
Expected return
on plan assets
|
|
|
|
(142)
|
|
|
(182)
|
|
|
|
Amortization of
actuarial loss/(gain) and prior service cost
|
|
|
77
|
|
|
91
|
|
|
|
Net pension
enhancement and curtailment/settlement cost
|
|
|
54
|
|
|
63
|
|
|
|
Net benefit cost
|
|
|
|
357
|
|
|
361
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension Benefits
- Non-U.S.
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
|
139
|
|
|
158
|
|
|
|
Interest cost
|
|
|
|
192
|
|
|
200
|
|
|
|
Expected return
on plan assets
|
|
|
|
(197)
|
|
|
(252)
|
|
|
|
Amortization of
actuarial loss/(gain) and prior service cost
|
|
|
103
|
|
|
118
|
|
|
|
Net pension
enhancement and curtailment/settlement cost
|
|
|
-
|
|
|
33
|
|
|
|
Net benefit cost
|
|
|
|
237
|
|
|
257
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Postretirement Benefits
|
|
|
|
|
|
|
|
|
|
|
Service cost
|
|
|
|
33
|
|
|
36
|
|
|
|
Interest cost
|
|
|
|
79
|
|
|
75
|
|
|
|
Expected return
on plan assets
|
|
|
|
(4)
|
|
|
(6)
|
|
|
|
Amortization of
actuarial loss/(gain) and prior service cost
|
|
|
3
|
|
|
17
|
|
|
|
Net benefit cost
|
|
|
|
111
|
|
|
122
|
|
|
|
|
|
|
|
|
|
|
|
|
7. Financial
Instruments and Derivatives
Financial Instruments.
The estimated fair value of financial
instruments at March 31, 2019 and December 31, 2018, and the related hierarchy
level for the fair value measurement is as follows:
|
|
|
|
|
At March 31, 2019
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Gross Assets
&
Liabilities
|
|
Effect of Counterparty Netting
|
|
Effect of Collateral Netting
|
|
Difference in Carrying Value and Fair
Value
|
|
Net Carrying Value
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative assets
(1)
|
|
145
|
|
24
|
|
-
|
|
169
|
|
(145)
|
|
-
|
|
-
|
|
24
|
|
Advances
to/receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from equity
companies
(2)(7)
|
|
-
|
|
2,157
|
|
6,703
|
|
8,860
|
|
-
|
|
-
|
|
54
|
|
8,914
|
|
Other long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial assets
(3)
|
|
914
|
|
-
|
|
806
|
|
1,720
|
|
-
|
|
-
|
|
93
|
|
1,813
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liabilities
(4)
|
|
213
|
|
13
|
|
-
|
|
226
|
|
(145)
|
|
(68)
|
|
-
|
|
13
|
|
Long-term debt
(5)
|
|
18,088
|
|
111
|
|
4
|
|
18,203
|
|
-
|
|
-
|
|
(473)
|
|
17,730
|
|
Long-term
obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to equity
companies
(7)
|
|
-
|
|
-
|
|
4,526
|
|
4,526
|
|
-
|
|
-
|
|
(96)
|
|
4,430
|
|
Other long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial
liabilities
(6)
|
|
-
|
|
-
|
|
1,039
|
|
1,039
|
|
-
|
|
-
|
|
3
|
|
1,042
|
|
|
|
|
|
At December 31, 2018
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Fair Value
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Level 1
|
|
Level 2
|
|
Level 3
|
|
Total Gross Assets
&
Liabilities
|
|
Effect of Counterparty Netting
|
|
Effect of Collateral Netting
|
|
Difference in Carrying Value and Fair
Value
|
|
Net Carrying Value
|
Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative assets
(1)
|
|
297
|
|
-
|
|
-
|
|
297
|
|
(151)
|
|
(146)
|
|
-
|
|
-
|
|
Advances
to/receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
from equity
companies
(2)(7)
|
|
-
|
|
2,100
|
|
6,293
|
|
8,393
|
|
-
|
|
-
|
|
215
|
|
8,608
|
|
Other long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial assets
(3)
|
|
848
|
|
-
|
|
974
|
|
1,822
|
|
-
|
|
-
|
|
112
|
|
1,934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Derivative
liabilities
(4)
|
|
151
|
|
-
|
|
-
|
|
151
|
|
(151)
|
|
-
|
|
-
|
|
-
|
|
Long-term debt
(5)
|
|
19,029
|
|
117
|
|
4
|
|
19,150
|
|
-
|
|
-
|
|
85
|
|
19,235
|
|
Long-term
obligations
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
to equity
companies
(7)
|
|
-
|
|
-
|
|
4,330
|
|
4,330
|
|
-
|
|
-
|
|
52
|
|
4,382
|
|
Other long-term
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
financial
liabilities
(6)
|
|
-
|
|
-
|
|
1,046
|
|
1,046
|
|
-
|
|
-
|
|
(3)
|
|
1,043
|
(1)
Included in the Balance Sheet line: Notes and accounts
receivable, less estimated doubtful amounts
(2)
Included in the Balance Sheet line:
Investments, advances and long-term receivables
(3)
Included in the Balance Sheet lines:
Investments, advances and long-term receivables and Other assets, including
intangibles, net
(4)
Included in the Balance Sheet line:
Accounts payable and accrued liabilities
(5)
Excluding finance lease obligations
(6)
Included in the Balance Sheet line:
Other long-term obligations
(7)
Advances to/receivables from equity companies and
long-term obligations to equity companies are mainly designated as hierarchy
level 3 inputs.
The fair value is calculated by discounting the remaining obligations by a
rate consistent with the credit quality and industry of the equity company.
Derivative
Instruments.
The
Corporation’s size, strong capital structure, geographic diversity and the
complementary nature of the Upstream, Downstream and Chemical businesses reduce
the Corporation’s enterprise-wide risk from changes in commodity prices,
currency rates and interest rates. In addition, the Corporation uses
commodity-based contracts, including derivatives, to manage commodity price
risk and for trading purposes.
Commodity
contracts held for trading purposes are presented in the Consolidated Statement
of Income on a net basis in the line “Sales and other operating revenue.” The
Corporation’s commodity derivatives are not accounted for under hedge
accounting.
At
times, the Corporation also enters into forward currency and interest rate
derivatives, none of which are material to the Corporation’s financial position
as of March 31, 2019 and December 31, 2018, or results of operations for the
periods ended March 31, 2019 and 2018.
Credit risk associated with the
Corporation’s derivative position is mitigated by several factors, including
the use of derivative clearing exchanges and the quality of and financial
limits placed on derivative counterparties. The Corporation maintains a system
of controls that includes the authorization, reporting and monitoring of
derivative activity.
At March 31, 2019, the net notional long/(short) position of
derivative instruments was (
35
) million barrels for crude oil, was (
36
) million barrels for
products, and was (
10
) million MMBtus of natural
gas. At December 31, 2018, the net notional long/(short) position of derivative
instruments was (
19
) million barrels for crude
oil and was (
9
) million barrels for
products.
Realized and unrealized gains/(losses) on derivative instruments
that were recognized in the Consolidated Statement of Income are included in
the following lines on a before-tax basis:
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
Sales and other
operating revenue
|
|
|
(275)
|
|
|
8
|
Crude oil and
product purchases
|
|
|
(18)
|
|
|
(81)
|
|
|
Total
|
|
|
(293)
|
|
|
(73)
|
8. Disclosures
about Segments and Related Information
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
|
March 31,
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
Earnings
After Income Tax
|
|
|
|
(millions of dollars)
|
|
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
96
|
|
|
429
|
|
|
|
Non-U.S.
|
|
|
|
2,780
|
|
|
3,068
|
|
|
Downstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
(161)
|
|
|
319
|
|
|
|
Non-U.S.
|
|
|
|
(95)
|
|
|
621
|
|
|
Chemical
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
161
|
|
|
503
|
|
|
|
Non-U.S.
|
|
|
|
357
|
|
|
508
|
|
|
Corporate and
financing
|
|
|
|
(788)
|
|
|
(798)
|
|
|
Corporate total
|
|
|
|
2,350
|
|
|
4,650
|
|
|
|
|
|
|
|
|
|
|
|
|
Sales and
Other Operating Revenue
|
|
|
|
|
|
|
|
|
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
2,693
|
|
|
2,361
|
|
|
|
Non-U.S.
|
|
|
|
3,804
|
|
|
3,628
|
|
|
Downstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
15,642
|
|
|
16,995
|
|
|
|
Non-U.S.
|
|
|
|
32,297
|
|
|
34,372
|
|
|
Chemical
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
2,505
|
|
|
2,989
|
|
|
|
Non-U.S.
|
|
|
|
4,695
|
|
|
5,078
|
|
|
Corporate and
financing
|
|
|
|
10
|
|
|
13
|
|
|
Corporate total
|
|
|
|
61,646
|
|
|
65,436
|
|
|
|
|
|
|
|
|
|
|
|
|
Intersegment
Revenue
|
|
|
|
|
|
|
|
|
|
Upstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
2,311
|
|
|
2,062
|
|
|
|
Non-U.S.
|
|
|
|
7,129
|
|
|
6,871
|
|
|
Downstream
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
4,761
|
|
|
4,944
|
|
|
|
Non-U.S.
|
|
|
|
6,169
|
|
|
7,089
|
|
|
Chemical
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
|
1,889
|
|
|
2,194
|
|
|
|
Non-U.S.
|
|
|
|
1,547
|
|
|
1,843
|
|
|
Corporate and
financing
|
|
|
|
53
|
|
|
49
|
|
Geographic
|
|
|
|
|
|
|
|
|
|
|
Three Months Ended
|
|
|
|
|
|
|
March 31,
|
|
Sales and
Other Operating Revenue
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
United States
|
|
|
20,840
|
|
|
22,345
|
|
Non-U.S.
|
|
|
40,806
|
|
|
43,091
|
|
|
Total
|
|
|
61,646
|
|
|
65,436
|
|
|
|
|
|
|
|
|
|
|
|
Significant
Non-U.S. revenue sources include:
(1)
|
|
|
|
|
|
|
|
|
Canada
|
|
|
4,850
|
|
|
5,375
|
|
|
United Kingdom
|
|
|
4,421
|
|
|
4,672
|
|
|
Belgium
|
|
|
3,529
|
|
|
3,977
|
|
|
Singapore
|
|
|
3,121
|
|
|
3,427
|
|
|
France
|
|
|
3,074
|
|
|
3,245
|
|
|
Italy
|
|
|
2,645
|
|
|
3,154
|
|
|
Germany
|
|
|
1,897
|
|
|
2,231
|
(1)
Revenue is determined by primary country
of operations. Excludes certain sales and other operating revenues in Non‑U.S.
operations where attribution to a specific country is not practicable.
9. Leases
The Corporation and its consolidated affiliates generally purchase
the property, plant and equipment used in operations, but there are situations
where assets are leased, primarily for drilling equipment, tankers, office
buildings, railcars, and other moveable equipment.
Right of use assets and lease liabilities are established on the
balance sheet for leases with an expected term greater than one year, by
discounting the amounts fixed in the lease agreement for the duration of the
lease which is reasonably certain, considering the probability of exercising
any early termination and extension options. The portion of the fixed payment
related to service costs for drilling equipment and tankers is excluded from
the calculation of right of use assets and lease liabilities.
Generally assets are leased only for a
portion of their useful lives, and are accounted for as operating leases. In
limited situations assets are leased for nearly all of their useful lives, and
are accounted for as finance leases.
Variable payments under
these lease agreements are not significant. Residual value guarantees,
restrictions, or covenants related to leases, and transactions with related
parties are also not significant.
In
general, leases are capitalized using the incremental borrowing rate of the
leasing affiliate.
The
Corporation’s activities as a lessor are not significant.
At adoption of the
lease accounting change (see Note 2), on January 1, 2019, an operating lease
liability of $3.3 billion was recorded and the operating lease right of use
asset was $4.3 billion, including $1.0 billion of previously recorded prepaid
leases. There was no cumulative earnings effect adjustment.
|
|
|
|
Operating Leases
|
|
|
|
|
|
|
|
Drilling Rigs
|
|
|
|
|
|
|
|
|
|
and Related
|
|
|
|
Finance
|
|
|
|
|
|
Equipment
|
Other
|
|
Total
|
|
Leases
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease Cost
|
|
|
Three Months Ended March 31, 2019
|
Operating lease
cost
|
|
|
40
|
|
255
|
|
295
|
|
|
Short-term and
other (net of sublease rental income)
|
|
|
195
|
|
273
|
|
468
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amortization of
right of use assets
|
|
|
|
|
|
|
|
|
31
|
Interest on
lease liabilities
|
|
|
|
|
|
|
|
|
31
|
|
Total
|
|
|
235
|
|
528
|
|
763
|
|
62
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Balance Sheet
|
|
|
March 31, 2019
|
Right of use
assets
|
|
|
|
|
|
|
|
|
|
|
Included in
Other assets, including intangibles - net
|
|
|
539
|
|
3,901
|
|
4,440
|
|
|
|
Included in
Property, plant and equipment - net
|
|
|
|
|
|
|
|
|
1,554
|
|
|
Total right of
use assets
|
|
|
539
|
|
3,901
|
|
4,440
|
|
1,554
|
|
|
|
|
|
|
|
|
|
|
|
|
Lease liability
due within one year
|
|
|
|
|
|
|
|
|
|
|
Included in
Accounts payable and accrued liabilities
|
|
|
167
|
|
699
|
|
866
|
|
34
|
|
Included in
Notes and loans payable
|
|
|
|
|
|
|
|
|
174
|
Long-term lease
liability
|
|
|
|
|
|
|
|
|
|
|
Included in
Other long-term obligations
|
|
|
373
|
|
2,238
|
|
2,611
|
|
|
|
Included in
Long-term debt
|
|
|
|
|
|
|
|
|
1,301
|
|
Included in
Long-term obligations to equity companies
|
|
|
|
|
|
|
|
|
146
|
|
|
Total lease
liability
|
|
|
540
|
|
2,937
|
|
3,477
|
|
1,655
|
|
|
|
|
Operating Leases
|
|
|
|
|
|
|
|
Drilling Rigs
|
|
|
|
|
|
|
|
|
|
and Related
|
|
|
|
Finance
|
|
|
|
|
|
Equipment
|
Other
|
|
Total
|
|
Leases
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Maturity
Analysis of Lease Liabilities
|
|
|
March 31, 2019
|
2019 remaining
months
|
|
|
137
|
|
608
|
|
745
|
|
293
|
2020
|
|
|
154
|
|
622
|
|
776
|
|
204
|
2021
|
|
|
96
|
|
441
|
|
537
|
|
180
|
2022
|
|
|
57
|
|
290
|
|
347
|
|
173
|
2023
|
|
|
40
|
|
253
|
|
293
|
|
171
|
2024
|
|
|
29
|
|
213
|
|
242
|
|
172
|
2025 and beyond
|
|
|
70
|
|
924
|
|
994
|
|
2,411
|
|
Total lease
payments
|
|
|
583
|
|
3,351
|
|
3,934
|
|
3,604
|
Discount to
present value
|
|
|
(43)
|
|
(414)
|
|
(457)
|
|
(1,949)
|
|
Total lease
liability
|
|
|
540
|
|
2,937
|
|
3,477
|
|
1,655
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
remaining lease term - years
|
|
|
5
|
|
8
|
|
7
|
|
25
|
Weighted average
discount rate - percent
|
|
|
3.0%
|
|
3.2%
|
|
3.1%
|
|
9.7%
|
|
|
|
|
|
|
|
|
|
|
|
|
In addition to the operating lease liabilities in the table
immediately above, at March 31, 2019, additional undiscounted commitments for
leases not yet commenced totaled $
2.6
billion. Included
among these commitments is $
1.7
billion for crude oil
pipeline transportation that is expected to commence later in 2019. The
underlying assets for these leases were primarily designed by, and are being
constructed by, the lessors. These unrecorded lease commitments are the primary
difference between the operating lease liabilities reflected in the table above
and the $
6.1
billion disclosed at
December 31, 2018, for minimum lease commitments under the prior lease
accounting standard.
|
|
|
|
Operating Leases
|
|
|
|
|
|
|
|
Drilling Rigs
|
|
|
|
|
|
|
|
|
|
and Related
|
|
|
|
Finance
|
|
|
|
|
|
Equipment
|
Other
|
|
Total
|
|
Leases
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other
Information
|
|
|
Three Months Ended March 31, 2019
|
Cash paid for
amounts included in the measurement of lease liabilities
|
|
|
|
|
|
|
|
|
|
|
Cash flows from
operating activities
|
|
|
|
|
228
|
|
228
|
|
14
|
|
Cash flows from investing
activities
|
|
|
40
|
|
|
|
40
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
|
|
|
16
|
|
|
|
|
|
|
|
|
|
|
|
|
Noncash right of
use assets recorded for lease liabilities
|
|
|
|
|
|
|
|
|
|
|
For January 1
adoption of
Topic 842
|
|
|
445
|
|
2,818
|
|
3,263
|
|
|
|
In exchange for
new lease liabilities during the period
|
|
|
125
|
|
320
|
|
445
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
At December 31, 2018, the Corporation
and its consolidated subsidiaries held noncancelable operating leases and charters
covering drilling equipment, tankers and other assets with minimum undiscounted
lease commitments totaling $
6,112
million as indicated in
the table. Estimated related sublease rental income from noncancelable
subleases totals $
22
million.
|
|
Lease Payments
|
|
|
Under Minimum Commitments
|
|
|
As of December 31, 2018
|
|
|
|
Drilling Rigs
|
|
|
|
|
|
and Related
|
|
|
|
|
|
Equipment
|
Other
|
|
Total
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
2019
|
|
|
222
|
|
934
|
|
1,156
|
2020
|
|
|
166
|
|
819
|
|
985
|
2021
|
|
|
107
|
|
658
|
|
765
|
2022
|
|
|
43
|
|
506
|
|
549
|
2023
|
|
|
32
|
|
422
|
|
454
|
2024 and beyond
|
|
|
53
|
|
2,150
|
|
2,203
|
Total
|
|
|
623
|
|
5,489
|
|
6,112
|
Net rental cost under both cancelable and noncancelable operating
leases incurred during 2018, 2017 and 2016 were as follows:
|
|
|
|
For full year
|
|
|
|
|
2018
|
|
2017
|
|
2016
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
Rental cost
|
|
|
|
|
|
|
|
Drilling rigs
and related equipment
|
|
723
|
|
792
|
|
1,274
|
|
Other (net of
sublease rental income)
|
|
1,992
|
|
1,826
|
|
1,817
|
|
|
Total
|
|
2,715
|
|
2,618
|
|
3,091
|
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)
|
|
|
2019
|
|
|
2018
|
|
|
|
|
(millions of dollars)
|
Upstream
|
|
|
|
|
|
|
|
United States
|
|
|
96
|
|
|
429
|
|
Non-U.S.
|
|
|
2,780
|
|
|
3,068
|
Downstream
|
|
|
|
|
|
|
|
United States
|
|
|
(161)
|
|
|
319
|
|
Non-U.S.
|
|
|
(95)
|
|
|
621
|
Chemical
|
|
|
|
|
|
|
|
United States
|
|
|
161
|
|
|
503
|
|
Non-U.S.
|
|
|
357
|
|
|
508
|
Corporate and
financing
|
|
|
(788)
|
|
|
(798)
|
|
Net income
attributable to ExxonMobil (U.S. GAAP)
|
|
|
2,350
|
|
|
4,650
|
|
|
|
|
|
|
|
Earnings per
common share
(dollars)
|
|
|
0.55
|
|
|
1.09
|
|
|
|
|
|
|
|
|
Earnings per
common share - assuming dilution
(dollars)
|
|
0.55
|
|
|
1.09
|
|
|
|
|
|
|
|
|
References in this
discussion to Corporate earnings mean net income attributable to ExxonMobil
(U.S. GAAP) from the consolidated income statement. Unless otherwise indicated,
references to earnings, Upstream, Downstream, Chemical and Corporate and financing
segment earnings, and earnings per share are ExxonMobil's share after excluding
amounts attributable to noncontrolling interests.
REVIEW OF FIRST QUARTER 2019 RESULTS
ExxonMobil’s first quarter 2019 earnings were $2.4 billion, or $0.55
per diluted share, compared with $4.7 billion a year earlier. The decrease
in earnings was primarily the result of lower Downstream and Chemical margins
and higher scheduled maintenance activity.
Oil‑equivalent production was 4.0 million barrels per day, up
2 percent from the prior year. Excluding entitlement effects and
divestments, oil‑equivalent production was up 3 percent from the prior
year.
The Corporation distributed $3.5 billion in dividends to
shareholders.
|
|
|
|
|
First Three Months
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
(millions of dollars)
|
Upstream
earnings
|
|
|
|
|
|
|
|
United States
|
|
|
96
|
|
|
429
|
|
Non-U.S.
|
|
|
2,780
|
|
|
3,068
|
|
|
Total
|
|
|
2,876
|
|
|
3,497
|
Upstream earnings were $2,876 million
in the first quarter of 2019, down $621 million from the first quarter of
2018.
·
Realizations
decreased earnings by $30 million due to lower liquids realizations of
$360 million, partly offset by higher gas realizations of $330 million.
·
Higher
volume and mix effects increased earnings by $80 million due to higher
liquids volumes of $230 million, partly offset by lower gas volumes of $150
million.
·
All
other items decreased earnings by $670 million due to the absence of a gain on
the Scarborough asset sale of $366 million, higher growth-related expenses
and asset impairment charges.
·
U.S.
Upstream earnings were $96 million, down $333 million from the prior
year quarter.
·
Non‑U.S.
Upstream earnings were $2,780 million, down $288 million from the
prior year quarter.
·
On
an oil‑equivalent basis, production increased 2 percent from the
first quarter of 2018.
·
Liquids
production totaled 2.3 million barrels per day, up 111,000 barrels
per day due to U.S. growth and improved reliability, partly offset by decline.
·
Natural
gas production was 9.9 billion cubic feet per day, down 114 million
cubic feet per day due to lower demand, decline and divestments, partly offset
by lower maintenance and growth.
|
|
|
First Quarter
|
Upstream
additional information
|
|
(thousands of barrels daily)
|
Volumes
reconciliation
(Oil-equivalent production)
(1)
|
|
|
|
|
2018
|
|
|
|
3,889
|
|
|
Entitlements -
Net Interest
|
|
|
|
-
|
|
|
Entitlements -
Price / Spend / Other
|
|
|
|
10
|
|
|
Quotas
|
|
|
|
-
|
|
|
Divestments
|
|
|
|
(27)
|
|
|
Growth / Other
|
|
|
|
109
|
|
2019
|
|
|
|
3,981
|
|
|
|
|
|
|
|
|
(1) Gas
converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels.
|
Listed below are descriptions of ExxonMobil’s volumes
reconciliation factors which are provided to facilitate understanding of the
terms.
Entitlements - Net
Interest
are changes to ExxonMobil’s share of production volumes caused by
non-operational changes to volume-determining factors. These factors consist of
net interest changes specified in Production Sharing Contracts (PSCs) which
typically occur when cumulative investment returns or production volumes
achieve defined thresholds, changes in equity upon achieving pay-out in partner
investment carry situations, equity redeterminations as specified in venture
agreements, or as a result of the termination or expiry of a concession. Once a
net interest change has occurred, it typically will not be reversed by
subsequent events, such as lower crude oil prices.
Entitlements - Price,
Spend and Other
are changes to ExxonMobil’s share of production volumes resulting
from temporary changes to non-operational volume-determining factors. These
factors include changes in oil and gas prices or spending levels from one
period to another. According to the terms of contractual arrangements or
government royalty regimes, price or spending variability can increase or
decrease royalty burdens and/or volumes attributable to ExxonMobil. For
example, at higher prices, fewer barrels are required for ExxonMobil to recover
its costs. These effects generally vary from period to period with field
spending patterns or market prices for oil and natural gas. Such factors can
also include other temporary changes in net interest as dictated by specific
provisions in production agreements.
Quotas
are changes in
ExxonMobil’s allowable production arising from production constraints imposed
by countries which are members of the Organization of the Petroleum Exporting
Countries (OPEC). Volumes reported in this category would have been readily
producible in the absence of the quota.
Divestments
are reductions in
ExxonMobil’s production arising from commercial arrangements to fully or
partially reduce equity in a field or asset in exchange for financial or other
economic consideration.
Growth and Other
factors comprise all
other operational and non-operational factors not covered by the above
definitions that may affect volumes attributable to ExxonMobil. Such factors
include, but are not limited to, production enhancements from project and work
program activities, acquisitions including additions from asset exchanges,
downtime, market demand, natural field decline, and any fiscal or commercial
terms that do not affect entitlements.
|
|
|
|
|
First Three Months
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
(millions of dollars)
|
Downstream
earnings
|
|
|
|
|
|
|
|
United States
|
|
|
(161)
|
|
|
319
|
|
Non-U.S.
|
|
|
(95)
|
|
|
621
|
|
|
Total
|
|
|
(256)
|
|
|
940
|
Downstream earnings
were ($256) million in the first quarter of 2019, down $1,196 million
from the first quarter of 2018.
·
Margins
decreased earnings by $860 million.
·
Volume
and mix effects remained essentially flat due to higher scheduled maintenance,
offset by improved yield / sales mix impacts.
·
All
other items decreased earnings by $340 million due to higher scheduled
maintenance and unfavorable yield / sales mix impacts.
·
U.S.
Downstream earnings were ($161) million, down $480 million from the
prior year quarter.
·
Non‑U.S.
Downstream earnings were ($95) million, down $716 million from the
prior year quarter.
·
Petroleum
product sales of 5.4 million barrels per day were 17,000 barrels per
day lower than the prior year quarter.
|
|
|
|
|
First Three Months
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
(millions of dollars)
|
Chemical
earnings
|
|
|
|
|
|
|
|
United States
|
|
|
161
|
|
|
503
|
|
Non-U.S.
|
|
|
357
|
|
|
508
|
|
|
Total
|
|
|
518
|
|
|
1,011
|
Chemical earnings of $518 million in the first quarter
of 2019 were $493 million lower than the first quarter of 2018.
·
Lower margins
decreased earnings by $360 million.
·
Volume and mix effects
increased earnings by $60 million.
·
All other items
decreased earnings by $190 million, mainly due to higher growth-related
expenses and unfavorable foreign exchange impacts.
·
U.S.
Chemical earnings were $161 million, down $342 million from the prior
year quarter.
·
Non‑U.S.
Chemical earnings were $357 million, down $151 million from the prior
year quarter.
·
First quarter prime
product sales of 6.8 million metric tons were 104,000 metric tons
higher than the prior year quarter due to growth.
|
|
|
|
|
First Three Months
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
Corporate
and financing earnings
|
|
|
(788)
|
|
|
(798)
|
Corporate and financing expenses were $788 million for
the first quarter of 2019, down $10 million from the prior year quarter.
LIQUIDITY AND CAPITAL RESOURCES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Three Months
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
(millions of dollars)
|
Net cash
provided by/(used in)
|
|
|
|
|
|
|
|
Operating
activities
|
|
|
8,338
|
|
|
8,519
|
|
Investing
activities
|
|
|
(5,793)
|
|
|
(1,859)
|
|
Financing activities
|
|
|
(1,044)
|
|
|
(5,742)
|
Effect of
exchange rate changes
|
|
|
43
|
|
|
30
|
Increase/(decrease)
in cash and cash equivalents
|
|
|
1,544
|
|
|
948
|
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents (at end of period)
|
|
|
4,586
|
|
|
4,125
|
|
|
|
|
|
|
|
|
|
Cash flow from
operations and asset sales
|
|
|
|
|
|
|
|
Net cash
provided by operating activities (U.S. GAAP)
|
|
|
8,338
|
|
|
8,519
|
|
Proceeds
associated with sales of subsidiaries, property, plant & equipment,
|
|
|
|
|
|
|
|
and sales and
returns of investments
|
|
|
107
|
|
|
1,441
|
|
Cash flow from
operations and asset sales
|
|
|
8,445
|
|
|
9,960
|
Because of the ongoing
nature of our asset management and divestment program, we believe it is useful
for investors to consider proceeds associated with asset sales together with
cash provided by operating activities when evaluating cash available for
investment in the business and financing activities, including shareholder
distributions.
Cash flow from
operations and asset sales in the first quarter of 2019 was $8.4 billion,
including asset sales of $0.1 billion, a decrease of $1.5 billion from the
comparable 2018 period primarily reflecting lower asset sale proceeds.
Cash provided by
operating activities totaled $8.3 billion for the first three months of 2019, $0.2
billion lower than 2018. The major source of funds was net income including
noncontrolling interests of $2.4 billion, a decrease of $2.4 billion from the
prior year period. The adjustment for the noncash provision of $4.6 billion for
depreciation and depletion was up $0.1 billion from 2018. Changes in
operational working capital contributed $2.3 billion, up $1.9 billion from the
prior year period. All other items net decreased cash flows by $0.9 billion in
2019 versus a reduction of $1.1 billion in 2018. See the Condensed Consolidated
Statement of Cash Flows for additional details.
Investing activities
for the first three months of 2019 used net cash of $5.8 billion, an increase
of $3.9 billion compared to the prior year. Spending for additions to property,
plant and equipment of $5.2 billion was $1.9 billion higher than 2018. Proceeds
from asset sales of $0.1 billion decreased $1.3 billion. Investments and
advances increased $0.8 billion to $0.9 billion.
Net cash used by
financing activities was $1.0 billion in the first three months of 2019, a
decrease of $4.7 billion from 2018. The net addition to short-term debt was
$3.0 billion compared to a net reduction of $1.9 billion in 2018.
During the first three
months of 2019, Exxon Mobil Corporation purchased 5 million shares of its
common stock for the treasury at a gross cost of $0.4 billion. These purchases
were made to offset shares or units settled in shares issued in conjunction
with the company’s benefit plans and programs. Shares outstanding decreased
from 4,237 million at year-end to 4,231 million at the end of the first quarter
of 2019. Purchases may be made both in the open market and through negotiated
transactions, and may be increased, decreased or discontinued at any time
without prior notice.
The Corporation
distributed a total of $3.5 billion to shareholders in the first quarter of 2019
through dividends.
Total cash and cash
equivalents of $4.6 billion at the end of the first quarter of 2019 compared to
$3.0 billion at year-end 2018.
Total debt at the end
of the first quarter of 2019 was $40.8 billion compared to $37.8 billion at
year-end 2018. The Corporation's debt to total capital ratio was 17.1 percent
at the end of the first quarter of 2019 compared to 16.0 percent at year-end
2018.
The Corporation has access to significant capacity of long-term
and short-term liquidity. Internally generated funds are generally expected to
cover financial requirements, supplemented by short-term and long-term debt as
required.
The Corporation, as
part of its ongoing asset management program, continues to evaluate its mix of
assets for potential upgrade. Because of the ongoing nature of this program,
dispositions will continue to be made from time to time which will result in
either gains or losses. Additionally, the Corporation continues to evaluate
opportunities to enhance its business portfolio through acquisitions of assets
or companies, and enters into such transactions from time to time. Key criteria
for evaluating acquisitions include potential for future growth and attractive
current valuations. Acquisitions may be made with cash, shares of the
Corporation’s common stock, or both.
Litigation and other
contingencies are discussed in Note 3 to the unaudited condensed consolidated
financial statements.
TAXES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Three Months
|
|
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income taxes
|
|
|
1,883
|
|
|
2,457
|
|
|
|
Effective
income tax rate
|
|
|
53
|
%
|
|
40
|
%
|
|
Total other
taxes and duties
(1)
|
|
|
8,087
|
|
|
8,815
|
|
|
|
Total
|
|
|
9,970
|
|
|
11,272
|
|
|
(1)
Includes “Other taxes and duties” plus taxes that are
included in “Production and manufacturing expenses” and “Selling, general and
administrative expenses.”
Total taxes were $10.0 billion for the first quarter of 2019,
a decrease of $1.3 billion from 2018. Income tax expense decreased by $0.6
billion to $1.9 billion reflecting lower pre-tax income. The effective income
tax rate was 53 percent compared to 40 percent in the prior year period. This
increase mainly reflects a higher share of earnings in higher tax jurisdictions
in the Non-U.S. Upstream segment. Total other taxes and duties decreased by $0.7
billion to $8.1 billion.
In the United States, the Corporation has various ongoing
U.S. federal income tax positions at issue with the Internal Revenue Service
(IRS) for tax years beginning in 2006. The IRS has asserted penalties
associated with several of those positions. The Corporation has not recognized
the penalties as an expense because the Corporation does not expect the
penalties to be sustained under applicable law. The Corporation has filed a
refund suit for tax years 2006-2009 in a U.S. federal district court with
respect to the positions at issue for those years. Unfavorable resolution of
all positions at issue with the IRS would not have a materially adverse effect
on the Corporation’s net income or liquidity.
CAPITAL AND EXPLORATION EXPENDITURES
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
First Three Months
|
|
|
|
|
|
2019
|
|
|
2018
|
|
|
|
|
|
(millions of dollars)
|
|
|
|
|
|
|
|
|
|
|
Upstream
(including exploration expenses)
|
|
|
5,361
|
|
|
3,759
|
|
Downstream
|
|
|
829
|
|
|
614
|
|
Chemical
|
|
|
696
|
|
|
465
|
|
Other
|
|
|
4
|
|
|
29
|
|
|
Total
|
|
|
6,890
|
|
|
4,867
|
|
Capital and
exploration expenditures in the first quarter of 2019 were $6.9 billion, up 42
percent from the first quarter of 2018. The Corporation anticipates an
investment level of approximately $30 billion in 2019. Actual spending could
vary depending on the progress of individual projects and property
acquisitions.
RECENTLY ISSUED ACCOUNTING STANDARDS
Effective January
1, 2020, ExxonMobil will adopt the Financial Accounting Standards Board’s
update,
Financial Instruments – Credit Losses (Topic 326)
, as amended.
The standard requires a valuation allowance for credit losses be recognized for
certain financial assets that reflects the current expected credit loss over
the asset’s contractual life. The valuation allowance considers the risk of
loss, even if remote, and considers past events, current conditions and
expectations of the future. The Corporation is evaluating the standard and its
effect on the Corporation’s financial statements.
FORWARD-LOOKING STATEMENTS
Statements
related to outlooks, projections, goals, targets, descriptions of strategic
plans and objectives, and other statements of future events or conditions are
forward-looking statements. Actual future results, including business and
project plans, capacities, costs, and timing; resource recoveries and
production rates; and the impact of new technologies, including to increase
capital efficiency and production and to reduce greenhouse gas emissions, could
differ materially due to a number of factors. These include global or regional
changes in supply and demand for oil, gas, and petrochemicals and other market
conditions that impact prices and differentials; reservoir performance; the
outcome of exploration projects and timely completion of development and
construction projects; the impact of fiscal and commercial terms and the
outcome of commercial negotiations or acquisitions; changes in law, taxes, or
regulation, including environmental regulations, and timely granting of
governmental permits; war and other political or security disturbances; the
actions of competitors; the capture of efficiencies between business lines;
unforeseen technical or operating difficulties; unexpected technological
developments; the ability to bring new technologies to commercial scale on a
cost-competitive basis; general economic conditions including the occurrence
and duration of economic recessions; the results of research programs; and
other factors discussed under the heading Factors Affecting Future Results on
the Investors page of our website at www.exxonmobil.com and in Item 1A of
ExxonMobil’s 2018
Form 10-K. We assume no duty to update these
statements as of any future date.
The term
“project” as used in this report can refer to a variety of different activities
and does not necessarily have the same meaning as in any government payment
transparency reports.
Item 3. Quantitative and Qualitative Disclosures About Market
Risk
Information about
market risks for the three months ended March 31, 2019, does not differ
materially from that discussed under Item 7A of the registrant's Annual Report
on Form 10-K for 2018.
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, 2019.
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.