Edgar Filing: EXXON MOBIL CORP

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

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

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended September 30, 2013

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

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to________

Commission File Number 1-2256

EXXON MOBIL CORPORATION

(Exact name of registrant as specified in its charter)

NEW JERSEY		13-5409005
(State or other jurisdiction of		(I.R.S. Employer
incorporation or organization)		Identification Number)

5959 LAS COLINAS BOULEVARD, IRVING, TEXAS 75039-2298

(Address of principal executive offices) (Zip Code)

(972) 444-1000

(Registrant's telephone number, including area code)

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

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

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

Large accelerated filer

Accelerated filer

Non-accelerated filer

Smaller reporting company

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

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

Class		Outstanding as of September 30, 2013
Common stock, without par value		4,368,513,787

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 2013

TABLE OF CONTENTS

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements
Condensed Consolidated Statement of Income Three and nine months ended September 30, 2013 and 2012	3
Condensed Consolidated Statement of Comprehensive Income Three and nine months ended September 30, 2013 and 2012	4
Condensed Consolidated Balance Sheet As of September 30, 2013 and December 31, 2012	5

Condensed Consolidated Statement of Cash Flows Nine months ended September 30, 2013 and 2012	6
Condensed Consolidated Statement of Changes in Equity Nine months ended September 30, 2013 and 2012	7
Notes to Condensed Consolidated Financial Statements	8
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations	14
Item 3. Quantitative and Qualitative Disclosures About Market Risk	21
Item 4. Controls and Procedures	21

PART II. OTHER INFORMATION
Item 1. Legal Proceedings	22
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds	23
Item 6. Exhibits	23
Signature	24
Index to Exhibits	25

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,
			2013	2012	2013	2012
Revenues and other income
	Sales and other operating revenue (1)		108,390	110,989	314,818	342,348
	Income from equity affiliates		3,444	3,386	10,960	11,247
	Other income		538	766	1,617	12,387
		Total revenues and other income	112,372	115,141	327,395	365,982
Costs and other deductions
	Crude oil and product purchases		63,961	64,615	183,088	200,209
	Production and manufacturing expenses		9,842	9,128	29,856	28,765
	Selling, general and administrative expenses		3,150	3,468	9,536	10,555
	Depreciation and depletion		4,287	4,037	12,802	11,778
	Exploration expenses, including dry holes		486	494	1,385	1,388
	Interest expense		52	59	161	216
	Sales-based taxes (1)		7,882	8,137	22,926	24,657
	Other taxes and duties		8,523	7,883	24,646	27,388
		Total costs and other deductions	98,183	97,821	284,400	304,956
Income before income taxes			14,189	17,320	42,995	61,026
	Income taxes		6,120	7,394	18,190	23,647
Net income including noncontrolling interests			8,069	9,926	24,805	37,379
	Net income attributable to noncontrolling interests		199	356	575	2,449
Net income attributable to ExxonMobil			7,870	9,570	24,230	34,930


Earnings per common share (dollars)			1.79	2.09	5.46	7.50

Earnings per common share - assuming dilution (dollars)			1.79	2.09	5.46	7.50


Dividends per common share (dollars)			0.63	0.57	1.83	1.61


(1) Sales-based taxes included in sales and other
		operating revenue	7,882	8,137	22,926	24,657

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		Nine Months Ended
				September 30,		September 30,
				2013	2012	2013	2012

Net income including noncontrolling interests				8,069	9,926	24,805	37,379
Other comprehensive income (net of income taxes)
	Foreign exchange translation adjustment			1,229	1,620	(2,317)	1,298
	Adjustment for foreign exchange translation (gain)/loss
			included in net income	-	(119)	-	(4,354)
	Postretirement benefits reserves adjustment
			(excluding amortization)	(222)	(224)	(58)	(404)
	Amortization and settlement of postretirement benefits reserves
			adjustment included in net periodic benefit costs	455	454	1,353	2,083
		Total other comprehensive income		1,462	1,731	(1,022)	(1,377)
Comprehensive income including noncontrolling interests				9,531	11,657	23,783	36,002
	Comprehensive income attributable to
			noncontrolling interests	331	541	420	1,062
Comprehensive income attributable to ExxonMobil				9,200	11,116	23,363	34,940

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)

				Sept. 30,	Dec. 31,
				2013	2012
Assets
	Current assets
		Cash and cash equivalents		5,310	9,582
		Cash and cash equivalents – restricted		439	341
		Notes and accounts receivable – net		33,230	34,987
		Inventories
			Crude oil, products and merchandise	12,829	10,836
			Materials and supplies	4,038	3,706
		Other current assets		5,457	5,008
			Total current assets	61,303	64,460
	Investments, advances and long-term receivables			37,048	34,718
	Property, plant and equipment – net			240,981	226,949
	Other assets, including intangibles – net			8,232	7,668
			Total assets	347,564	333,795

Liabilities
	Current liabilities
		Notes and loans payable		13,889	3,653
		Accounts payable and accrued liabilities		51,260	50,728
		Income taxes payable		7,600	9,758
			Total current liabilities	72,749	64,139
	Long-term debt			7,404	7,928
	Postretirement benefits reserves			25,319	25,267
	Deferred income tax liabilities			39,506	37,570
	Long-term obligations to equity companies			4,636	3,555
	Other long-term obligations			22,472	23,676
			Total liabilities	172,086	162,135

Commitments and contingencies (Note 2)

Equity
	Common stock without par value
		(9,000 million shares authorized, 8,019 million shares issued)		10,062	9,653
	Earnings reinvested			381,832	365,727
	Accumulated other comprehensive income			(13,051)	(12,184)
	Common stock held in treasury
		(3,650 million shares at Sept. 30, 2013 and
		3,517 million shares at Dec. 31, 2012)		(209,598)	(197,333)
			ExxonMobil share of equity	169,245	165,863
	Noncontrolling interests			6,233	5,797
			Total equity	175,478	171,660
			Total liabilities and equity	347,564	333,795

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)

				Nine Months Ended
				September 30,
				2013	2012
Cash flows from operating activities
	Net income including noncontrolling interests			24,805	37,379
	Depreciation and depletion			12,802	11,778
	Changes in operational working capital, excluding cash and debt			(2,676)	3,119
	Net (gain) on asset sales			(511)	(11,693)
	All other items – net			286	2,363
			Net cash provided by operating activities	34,706	42,946

Cash flows from investing activities
	Additions to property, plant and equipment			(25,243)	(24,214)
	Proceeds associated with sales of subsidiaries, property, plant and
		equipment, and sales and returns of investments		871	6,850
	Additional investments and advances			(3,644)	(409)
	Other investing activities – net			527	1,174
			Net cash used in investing activities	(27,489)	(16,599)

Cash flows from financing activities
	Additions to long-term debt			206	597
	Reductions in long-term debt			-	(15)
	Additions/(reductions) in short-term debt – net			9,483	(3,506)
	Cash dividends to ExxonMobil shareholders			(8,125)	(7,500)
	Cash dividends to noncontrolling interests			(225)	(287)
	Changes in noncontrolling interests			(1)	198
	Tax benefits related to stock-based awards			14	-
	Common stock acquired			(12,696)	(15,814)
	Common stock sold			46	184
			Net cash used in financing activities	(11,298)	(26,143)
Effects of exchange rate changes on cash				(191)	187
Increase/(decrease) in cash and cash equivalents				(4,272)	391
Cash and cash equivalents at beginning of period				9,582	12,664
Cash and cash equivalents at end of period				5,310	13,055

Supplemental Disclosures
	Income taxes paid			19,871	17,895
	Cash interest paid			318	387

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, 2011				9,512		330,939			(9,123)		(176,932)		154,396		6,348		160,744
	Amortization of stock-based awards			618		-			-		-		618		-		618
	Tax benefits related to stock-based
		awards		252		-			-		-		252		-		252
	Other			(737)		-			-		-		(737)		(1,450)		(2,187)
	Net income for the period			-		34,930			-		-		34,930		2,449		37,379
	Dividends – common shares			-		(7,500)			-		-		(7,500)		(287)		(7,787)
	Other comprehensive income			-		-			10		-		10		(1,387)		(1,377)
	Acquisitions, at cost			-		-			-		(15,814)		(15,814)		(31)		(15,845)
	Dispositions			-		-			-		558		558		-		558
Balance as of September 30, 2012				9,645		358,369			(9,113)		(192,188)		166,713		5,642		172,355

Balance as of December 31, 2012				9,653		365,727			(12,184)		(197,333)		165,863		5,797		171,660
	Amortization of stock-based awards			593		-			-		-		593		-		593
	Tax benefits related to stock-based
		awards		200		-			-		-		200		-		200
	Other			(384)		-			-		-		(384)		242		(142)
	Net income for the period			-		24,230			-		-		24,230		575		24,805
	Dividends – common shares			-		(8,125)			-		-		(8,125)		(225)		(8,350)
	Other comprehensive income			-		-			(867)		-		(867)		(155)		(1,022)
	Acquisitions, at cost			-		-			-		(12,696)		(12,696)		(1)		(12,697)
	Dispositions			-		-			-		431		431		-		431
Balance as of September 30, 2013				10,062		381,832			(13,051)		(209,598)		169,245		6,233		175,478



			Nine Months Ended September 30, 2013									Nine Months Ended September 30, 2012
					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		(3,517)			4,502				8,019		(3,285)		4,734
		Acquisitions		-		(141)			(141)				-		(185)		(185)
		Dispositions		-		8			8				-		10		10
	Balance as of September 30			8,019		(3,650)			4,369				8,019		(3,460)		4,559

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 2012 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. 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, 2013, 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, 2013

Equity

Other

Company

Third Party

Obligations (1)

Obligations

Total

(millions of dollars)

Guarantees

Debt-related

3,002

3,054

Other

3,572

4,774

8,346

Total

6,574

4,826

11,400

(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 Corporation's outstanding unconditional purchase obligations at September 30, 2013, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.

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

In accordance with a nationalization decree issued by Venezuela’s president in February 2007, by May 1, 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. This Project had been operated and owned by ExxonMobil affiliates holding a 41.67 percent ownership interest in the Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project, with the stipulation that if ExxonMobil refused to accept the terms for the formation of the mixed enterprise within a specified period of time, the government would “directly assume the activities” carried out by the joint venture. ExxonMobil refused to accede to the terms proffered by the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.

On September 6, 2007, affiliates of ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes (ICSID) invoking ICSID jurisdiction under Venezuela’s Investment Law and the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID Tribunal issued a decision on June 10, 2010, finding that it had jurisdiction to proceed on the basis of the Netherlands-Venezuela Bilateral Investment Treaty. The ICSID arbitration proceeding is continuing and a hearing on the merits was held in February 2012. At this time, the net impact of these matters on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.

An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award. The Contractors have appealed that judgment. 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. 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.

3. 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, 2011			4,168	(13,291)	(9,123)
Current period change excluding amounts reclassified
	from accumulated other comprehensive income		1,159	(351)	808
Amounts reclassified from accumulated other
	comprehensive income		(2,603)	1,805	(798)
Total change in accumulated other comprehensive income			(1,444)	1,454	10
Balance as of September 30, 2012			2,724	(11,837)	(9,113)

Balance as of December 31, 2012			2,410	(14,594)	(12,184)
Current period change excluding amounts reclassified
	from accumulated other comprehensive income		(2,118)	(52)	(2,170)
Amounts reclassified from accumulated other
	comprehensive income		-	1,303	1,303
Total change in accumulated other comprehensive income			(2,118)	1,251	(867)
Balance as of September 30, 2013			292	(13,343)	(13,051)

Three Months Ended

Nine Months Ended

Amounts Reclassified Out of Accumulated Other

September 30,

Comprehensive Income - Before-tax Income/(Expense)

2013

2012

2013

2012

(millions of dollars)

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

(Statement of Income line: Other income)

119

4,354

Amortization and settlement of postretirement benefits reserves

adjustment included in net periodic benefit costs (1)

(648)

(654)

(1,951)

(3,215)

(1) These accumulated other comprehensive income components are included in the computation of net periodic pension cost. (See Note 5 – Pension and Other Postretirement Benefits for additional details.)

				Three Months Ended		Nine Months Ended
Income Tax (Expense)/Credit For				September 30,		September 30,
	Components of Other Comprehensive Income			2013	2012	2013	2012
			(millions of dollars)

Foreign exchange translation adjustment				(16)	(55)	100	(92)
Postretirement benefits reserves adjustment
	Postretirement benefits reserves adjustment
		(excluding amortization)		85	100	28	190
	Amortization and settlement of postretirement benefits reserves
		adjustment included in net periodic benefit costs		(193)	(200)	(598)	(1,132)
Total				(124)	(155)	(470)	(1,034)

4. Earnings Per Share

			Three Months Ended		Nine Months Ended
			September 30,		September 30,
			2013	2012	2013	2012

Earnings per common share
Net income attributable to ExxonMobil (millions of dollars)			7,870	9,570	24,230	34,930

Weighted average number of common shares
	outstanding (millions of shares)		4,395	4,597	4,438	4,657

Earnings per common share (dollars)			1.79	2.09	5.46	7.50

Earnings per common share - assuming dilution
Net income attributable to ExxonMobil (millions of dollars)			7,870	9,570	24,230	34,930

Weighted average number of common shares
	outstanding (millions of shares)		4,395	4,597	4,438	4,657
		Effect of employee stock-based awards	-	-	-	-
Weighted average number of common shares
	outstanding - assuming dilution		4,395	4,597	4,438	4,657

Earnings per common share - assuming dilution (dollars)			1.79	2.09	5.46	7.50

5. Pension and Other Postretirement Benefits

Three Months Ended

Nine Months Ended

September 30,

2013

2012

2013

2012

(millions of dollars)

Pension Benefits - U.S.

Components of net benefit cost

Service cost

206

173