-----BEGIN PRIVACY-ENHANCED MESSAGE-----
Proc-Type: 2001,MIC-CLEAR
Originator-Name: webmaster@www.sec.gov
Originator-Key-Asymmetric:
MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen
TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB
MIC-Info: RSA-MD5,RSA,
Dk5emyfXXZSA3hw4rIoCJp4CKJJqFJbKv/INd98TF8iCOdziRSTSfKrPZyO5LEEg
tuY4YBBbjCvZL2tOy/D2aA==
<SEC-DOCUMENT>0000930661-01-000781.txt : 20010410
<SEC-HEADER>0000930661-01-000781.hdr.sgml : 20010410
ACCESSION NUMBER: 0000930661-01-000781
CONFORMED SUBMISSION TYPE: 10-K
PUBLIC DOCUMENT COUNT: 8
CONFORMED PERIOD OF REPORT: 20001231
FILED AS OF DATE: 20010328
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: EXXON MOBIL CORP
CENTRAL INDEX KEY: 0000034088
STANDARD INDUSTRIAL CLASSIFICATION: 2911
IRS NUMBER: 135409005
STATE OF INCORPORATION: NJ
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-K
SEC ACT:
SEC FILE NUMBER: 001-02256
FILM NUMBER: 1581622
BUSINESS ADDRESS:
STREET 1: 5959 LAS COLINAS BLVD
CITY: IRVING
STATE: TX
ZIP: 75039-2298
BUSINESS PHONE: 9724441000
MAIL ADDRESS:
STREET 1: 5959 LAS COLINAS BLVD
CITY: IRVING
STATE: TX
ZIP: 75039-2298
FORMER COMPANY:
FORMER CONFORMED NAME: EXXON CORP
DATE OF NAME CHANGE: 19920703
FORMER COMPANY:
FORMER CONFORMED NAME: STANDARD OIL CO OF NEW JERSEY
DATE OF NAME CHANGE: 19721123
</SEC-HEADER>
<DOCUMENT>
<TYPE>10-K
<SEQUENCE>1
<FILENAME>0001.txt
<DESCRIPTION>FORM 10-K
<TEXT>
<PAGE>
2000
- - - - - - -------------------------------------------------------------------------------
- - - - - - -------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
----------------
FORM 10-K
[X] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
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 Identification
incorporation or organization) 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)
----------------
Securities registered pursuant to Section 12(b) of the Act:
<TABLE>
<CAPTION>
Name of Each Exchange
Title of Each Class on Which Registered
------------------- -----------------------
<S> <C>
Common Stock, without par value (3,455,409,183 shares
outstanding at February 28, 2001) New York Stock Exchange
Registered securities guaranteed by Registrant:
SeaRiver Maritime Financial Holdings, Inc.
Twenty-Five Year Debt Securities due October 1, 2011 New York Stock Exchange
Exxon Capital Corporation
Twelve Year 6% Notes due July 1, 2005 New York Stock Exchange
</TABLE>
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 if disclosure of delinquent filers pursuant to Item
405 of Regulation S-K is not contained herein, and will not be contained, to
the best of registrant's knowledge, in definitive proxy or information
statements incorporated by reference in Part III of this Form 10-K or any
amendment to this Form 10-K.
-----
The aggregate market value of the voting stock held by non-affiliates of the
registrant on February 28, 2001, based on the closing price on that date of
$81.05 on the New York Stock Exchange composite tape, was in excess of $280
billion.
Documents Incorporated by Reference:
Proxy Statement for the 2001 Annual Meeting of Shareholders (Part III)
- - - - - - -------------------------------------------------------------------------------
- - - - - - -------------------------------------------------------------------------------
<PAGE>
EXXON MOBIL CORPORATION
FORM 10-K
FOR THE FISCAL YEAR ENDED DECEMBER 31, 2000
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
Number
------
PART I
<C> <S> <C>
Item 1. Business..................................................... 1-2
Item 2. Properties................................................... 2-14
Item 3. Legal Proceedings............................................ 15
Item 4. Submission of Matters to a Vote of Security Holders.......... 15
Executive Officers of the Registrant [pursuant to Instruction 3 to
Regulation S-K, Item 401(b)]......................................... 16
PART II
Item 5. Market for Registrant's Common Stock and Related Shareholder
Matters...................................................... 17
Item 6. Selected Financial Data...................................... 17
Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations.................................... 17
Item 7A. Quantitative and Qualitative Disclosures About Market Risk... 17-18
Item 8. Financial Statements and Supplementary Data.................. 18
Item 9. Changes in and Disagreements with Accountants on Accounting
and Financial Disclosure..................................... 18
PART III
Item 10. Directors and Executive Officers of the Registrant........... 18
Item 11. Executive Compensation....................................... 18
Item 12. Security Ownership of Certain Beneficial Owners and
Management................................................... 18
Item 13. Certain Relationships and Related Transactions............... 18
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on
Form 8-K..................................................... 18
Financial Section...................................................... 19-57
Signatures............................................................. 58-60
Index to Exhibits...................................................... 61
Exhibit 12 -- Computation of Ratio of Earnings to Fixed Charges
</TABLE>
<PAGE>
PART I
Item 1. Business.
Exxon Mobil Corporation ("ExxonMobil"), formerly named Exxon Corporation,
was incorporated in the State of New Jersey in 1882.
On December 1, 1998, Exxon Corporation ("Exxon") and Mobil Corporation
("Mobil") signed an agreement to merge the two companies subject to
shareholder approval, regulatory reviews and other conditions. On November 30,
1999, pursuant to the agreement, a wholly-owned subsidiary of Exxon was merged
with and into Mobil so that Mobil became a wholly-owned subsidiary of Exxon.
At the same time, Exxon changed its name to Exxon Mobil Corporation.
Coincident with the merger, ExxonMobil announced a new organization
structure built on a concept of eleven separate global businesses designed to
allow the company to compete more effectively in a changing worldwide energy
industry: five upstream businesses--Exploration, Development, Production, Gas
Marketing and Upstream Research; four downstream businesses-- Refining and
Supply, Fuels Marketing, Lubricants and Petroleum Specialties, and Technology;
plus a chemical company and a coal and minerals company.
Divisions and affiliated companies of ExxonMobil operate or market products
in the United States and about 200 other countries and territories. Their
principal business is energy, involving exploration for, and production of,
crude oil and natural gas, manufacturing of petroleum products and
transportation and sale of crude oil, natural gas and petroleum products.
ExxonMobil is a major manufacturer and marketer of basic petrochemicals,
including olefins, aromatics, polyethylene and polypropylene plastics and a
wide variety of specialty products. ExxonMobil is engaged in exploration for,
and mining and sale of coal, copper and other minerals. ExxonMobil also has
interests in electric power generation facilities. Affiliates of ExxonMobil
conduct extensive research programs in support of these businesses.
Exxon Mobil Corporation has several divisions and hundreds of affiliates,
many with names that include ExxonMobil, Exxon, Esso or Mobil. For convenience
and simplicity, in this report the terms ExxonMobil, Exxon, Esso and Mobil, as
well as the terms corporation, company, our, we and its, are sometimes used as
abbreviated references to specific affiliates or groups of affiliates. The
precise meaning depends on the context in question.
In 2000, the corporation spent $1,529 million (of which $393 million were
capital expenditures) on environmental projects and expenses worldwide, mostly
dealing with air and water conservation. Total expenditures for such
activities are expected to be about $1.8 billion in both 2001 and 2002 (with
capital expenditures representing about 25 percent of the total).
Operating data and industry segment information for the corporation are
contained on pages 50, 56 and 57; information on oil and gas reserves is
contained on pages 53 and 54 and information on company-sponsored research and
development activities is contained on page 34 of the Financial Section of
this report.
Factors Affecting Future Results
- - - - - - --------------------------------
Competitive Factors: The energy and petrochemical industries are highly
competitive. There is competition within the industries and also with other
industries in supplying the energy, fuel and chemical needs of industry and
individual consumers. The corporation competes with other firms in the sale or
purchase of various goods or services in many national and international
markets and employs all methods of competition which are lawful and
appropriate for such purposes.
Political Factors: 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 instability and by other
political developments and laws and regulations, such as forced divestiture of
1
<PAGE>
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.
Industry and Economic Factors: The operations and earnings of the corporation
and its affiliates throughout the world are also affected by local, regional
and global events or conditions that affect supply and demand for oil, natural
gas, petroleum products, petrochemicals and other ExxonMobil products. These
events or conditions are generally not predictable and include, among other
things, the development of new supply sources; supply disruptions; weather;
international political events; technological advances; changes in
demographics and consumer preferences and the competitiveness of alternative
energy sources or product substitutes.
Project Factors: The advancement, cost and results of particular ExxonMobil
projects also depend on the outcome of negotiations with partners,
governments, suppliers, customers or others; changes in operating conditions
or costs and the occurrence of unforeseen technical difficulties.
Merger-Related Factors: Realization of the benefits of the merger will depend,
among other things, upon management's ability to integrate the businesses of
Exxon and Mobil successfully and on schedule. Future results could also be
affected by the diversion of management's focus and resources from other
strategic opportunities during the merger integration process.
Market Risk Factors: See also page 23 and 24 of the Financial Section of this
report for discussion of the impact of market risks, inflation and other
uncertainties.
Projections, estimates and descriptions of ExxonMobil's plans and objectives
included or incorporated in Items 1, 2, 7 and 7A of this report are forward-
looking statements. Actual future results, including merger related expenses,
synergy benefits from the merger (including cost savings, efficiency gains and
revenue enhancements), project completion dates, production rates, capital
expenditures, costs and business plans could differ materially due to, among
other things, the factors discussed above and elsewhere in this report.
Item 2. Properties.
Part of the information in response to this item and to the Securities
Exchange Act Industry Guide 2 is contained in the Financial Section of this
report in Note 10, which note appears on page 36, and on pages 51 through 55
and 57.
Information with regard to oil and gas producing activities follows:
- - - - - - --------------------------------------------------------------------
1. Net Reserves of Crude Oil and Natural Gas Liquids (millions of barrels) and
Natural Gas (billions of cubic feet) at Year-End 2000
Estimated proved reserves are shown on pages 53 and 54 of the Financial
Section of this report. No major discovery or other favorable or adverse event
has occurred since December 31, 2000, that would cause a significant change in
the estimated proved reserves as of that date. For information on the
standardized measure of discounted future net cash flows relating to proved
oil and gas reserves, see page 55 of the Financial Section of this report.
2. Estimates of Total Net Proved Oil and Gas Reserves Filed with Other Federal
Agencies
During 2000, ExxonMobil filed proved reserves estimates with the U.S.
Department of Energy on Forms EIA-23 and EIA-28. The information is consistent
with the ExxonMobil 1999 Annual Report to shareholders with the exception of
EIA-23 which covered total oil and gas reserves from
2
<PAGE>
ExxonMobil-operated properties in the United States and does not include gas
plant liquids. The differences between the oil reserves and gas reserves
reported on EIA-23 and those reported in the 1999 Annual Report exceed five
percent.
3. Average Sales Prices and Production Costs per Unit of Production
Reference is made to page 51 of the Financial Section of this report.
Average sales prices have been calculated by using sales quantities from our
own production as the divisor. Average production costs have been computed by
using net production quantities for the divisor. The volumes of crude oil and
natural gas liquids (NGL) production used for this computation are shown in
the reserves table on page 53 of the Financial Section of this report. The net
production volumes of natural gas available for sale by the producing function
used in this calculation are shown on page 57 of the Financial Section of this
report. The volumes of natural gas were converted to oil-equivalent barrels
based on a conversion factor of six thousand cubic feet per barrel.
4. Gross and Net Productive Wells
<TABLE>
<CAPTION>
Year-End 2000
--------------------------
Oil Gas
------------- ------------
Gross Net Gross Net
------ ------ ------ -----
<S> <C> <C> <C> <C>
United States..................................... 35,552 12,455 9,857 4,590
Canada............................................ 6,750 5,188 4,938 2,489
Europe............................................ 1,702 546 1,331 480
Asia-Pacific...................................... 1,394 518 718 256
Africa............................................ 362 154 -- --
Other............................................. 974 176 137 41
------ ------ ------ -----
Total............................................ 46,734 19,037 16,981 7,856
====== ====== ====== =====
</TABLE>
5. Gross and Net Developed Acreage
<TABLE>
<CAPTION>
Year-End 2000
---------------------
Gross Net
---------- ----------
(Thousands of acres)
<S> <C> <C>
United States.......................................... 9,578 5,993
Canada................................................. 4,577 2,390
Europe................................................. 11,576 4,816
Asia-Pacific........................................... 4,605 1,528
Africa................................................. 894 387
Other.................................................. 9,175 1,821
---------- ----------
Total................................................. 40,405 16,935
========== ==========
</TABLE>
Note: Separate acreage data for oil and gas are not maintained because, in
many instances, both are produced from the same acreage.
6. Gross and Net Undeveloped Acreage
<TABLE>
<CAPTION>
Year-End 2000
--------------------
Gross Net
--------- ----------
(Thousands of acres)
<S> <C> <C>
United States........................................... 11,527 7,399
Canada.................................................. 22,136 9,619
Europe.................................................. 16,283 6,244
Asia-Pacific............................................ 38,037 19,641
Africa.................................................. 47,325 20,111
Other................................................... 51,718 26,363
---------- ---------
Total.................................................. 187,026 89,377
========== =========
</TABLE>
3
<PAGE>
7. Summary of Acreage Terms in Key Areas
UNITED STATES
Oil and gas exploration leases have an exploration period ranging from one
to ten years, and a production period that normally remains in effect until
production ceases. In some instances, a "fee interest" is acquired where both
the surface and the underlying mineral interests are owned outright.
CANADA
Exploration permits are granted for varying periods of time with renewals
possible. Production leases are held as long as there is production on the
lease. The majority of Cold Lake leases were taken for an initial 21-year term
in 1968-1969 and renewed for a second 21-year term in 1989-1990. The
exploration acreage in Eastern Canada is currently held by work commitments of
various amounts.
EUROPE
France
Exploration permits are granted for periods of three to five years,
renewable up to two times accompanied by substantial acreage relinquishments:
50 percent of the acreage at first renewal; 25 percent of the remaining
acreage at second renewal. A 1994 law requires a bidding process prior to
granting of an exploration permit. Upon discovery of commercial hydrocarbons,
a production concession is granted for up to 50 years, renewable in periods of
25 years each.
Germany
Exploration concessions are granted for an initial maximum period of five
years with possible extensions of up to three years for an indefinite period.
Extensions are subject to specific, minimum work commitments. Production
licenses are normally granted for 20 to 25 years with multiple possible
extensions as long as there is production on the license.
Netherlands
Onshore: Exploration drilling permits are issued for a period of two to five
years. Permits issued after 1996 are issued for a period of time necessary to
perform the activities for which the permit is issued. Production concessions
are granted after discoveries have been made, under conditions that are
negotiated with the government. Normally, they are field-life concessions
covering an area defined by hydrocarbon occurrences.
Offshore: Prospecting licenses issued prior to March 1976 are for a 15-year
period, with relinquishment of about 50 percent of the original area required
at the end of ten years. Prospecting licenses issued between 1976 and 1996 are
for a ten-year period, with relinquishment of about 50 percent of the original
area required at the end of six years. Current licenses are for a period of
time necessary to perform the activities for which the permit is issued. For
commercial discoveries within a prospecting license, a production license is
normally issued for a 40-year period.
Norway
Licenses issued prior to 1972 were for an initial period of six years and an
extension period of 40 years, with relinquishment of at least one-fourth of
the original area required at the end of the sixth year and another one-fourth
at the end of the ninth year. Licenses issued between 1972 and 1997 were for
an initial period of up to 10 years and an extension period of up to 30 years,
with relinquishment of at least one-half of the original area required at the
end of the sixth year. Licenses issued after July 1,
4
<PAGE>
1997 have an initial period of from four to ten years and a normal extension
period of up to 30 years or in special cases of up to 50 years, and with
relinquishment of at least one-half of the original area required at the end
of the initial period.
United Kingdom
Acreage terms are fixed by the government and are periodically changed. For
example, the regulations governing licenses issued between 1996 and 1998
provide for an initial term of three years with possible extensions of six, 15
and 24 years for a license period of 45 more years. After the second
extension, the license must be surrendered in part. In recent licensing
rounds, the initial term has generally been for six years. After possible
surrender of acreage, the license may continue for 30 more years.
ASIA-PACIFIC
Australia
Onshore: Acreage terms are fixed by the individual state and territory
governments. These terms and conditions vary significantly between the states
and territories. Exploration permits are normally granted for two to six years
(in some states the Minister fixes the term) with possible renewals and
relinquishment. Production licenses in South Australia are granted for an
initial term of 21 years, with subsequent renewals, each for 21 years, for the
full area. Production licenses in Queensland are granted for varying periods
consistent with expected field lives, with renewals on a similar basis.
Offshore: Acreage terms are fixed by the federal government beyond the three
nautical mile limit offshore (all of the company's offshore acreage), in most
cases by legislation but in some cases by the Joint Authority (composed of
federal and state ministers) at the time of grant. Exploration permits are
granted for six years with possible renewals of five-year periods. A 50
percent relinquishment of remaining area is mandatory at the end of each
renewal period. Retention leases may be granted for resources that are not
commercially viable at the time of application, but are expected to become
commercially viable within 15 years. These are granted for periods of five
years and renewals may be requested. Production licenses granted prior to
September 1, 1998 were initially for 21 years, with a further renewal of 21
years and thereafter renewals at the discretion of the Joint Authority or
Federal Minister. Effective from September 1, 1998, new production licenses
are granted "indefinitely" i.e., for the life of the field (if no operations
for the recovery of petroleum have been carried on for five years, the license
may be terminated).
Indonesia
Exploration and production activities in Indonesia are generally governed by
production sharing contracts negotiated with the national oil company. Certain
activities may also be subject to joint operating agreements and/or technical
assistance contracts also negotiated with the national oil company. The more
recent contracts have an overall term of up to 30 years with possible
extensions in some contracts. The initial exploration period is from six to
ten years.
Malaysia
Exploration and production activities are governed by production sharing
contracts negotiated with the national oil company. The more recent contracts
have an overall term of 24 to 37 years with possible extensions to the
exploration or development periods. The exploration period is five to seven
years with the possibility of extensions, after which time areas with no
commercial discoveries must be relinquished. The development period is four to
five years from commercial discovery, with the possibility of extensions under
special circumstances. Areas from which commercial production has not started
by the end of the development period must be relinquished if no extension is
granted. The total production period is 15 to 25 years from first commercial
lifting, not to exceed the overall term of the current contract.
5
<PAGE>
Papua New Guinea
Exploration and production activities are governed by the Petroleum Act.
Exploration permits are granted for an initial term of six years with renewals
of five years. A 50 percent area relinquishment is mandatory at the end of the
first term. Production licenses are granted for an initial 25-year period.
Renewals of up to 20 years may be granted at the Minister's discretion.
Petroleum retention licenses are granted for five-year terms, renewable twice
for maximum retention time of 15 years.
Thailand
The company's concessions and the Petroleum Act of 1972 allow production for
30 years (through 2021) with a possible ten-year extension at terms generally
prevalent at the time.
AFRICA
Angola
Exploration and production activities are governed by production sharing
agreements with an initial exploration term of four years and an optional
second phase of two to three years. The production period is for 25 years and
a negotiated extension is common.
Cameroon
Exploration and production activities are governed by agreements negotiated
with the national oil company. The concessions have various agreements with
regard to license extension, terms and conditions for the exploration and
production phase.
Chad
Exploration permits are issued for a period of five years, renewable for two
further five-year periods. The production term is for 30 years.
Equatorial Guinea
Exploration and production activities are governed by production sharing
contracts negotiated with the state Ministry of Mines and Energy. The
exploration term is for 10 to 15 years with limited relinquishments in the
absence of commercial discoveries. The production period for crude is 30 years
while the production period for gas is 50 years.
Nigeria
Exploration and production activities in the deepwater offshore areas are
typically governed by production sharing contracts (PSCs) with the national
oil company. The national oil company holds the underlying Oil Prospecting
License (OPL) and any resulting Oil Mining Lease (OML). The terms of the PSCs
are generally 30 years, including a ten-year exploration period (six-year
initial exploration phase plus a four-year optional period) with no required
relinquishment after the initial phase, a 50 percent relinquishment
requirement after the second phase and a 20-year production period that may be
extended.
Some exploration activities are carried out in deepwater by joint ventures
with indigenous companies as direct participants in an OPL. OPLs in deepwater
offshore areas are valid for ten years and are non-renewable, while in all
other areas OPLs are for five years and also are non-renewable. Demonstrating
a commercial discovery is the basis for conversion of an OPL to an OML.
OMLs granted prior to the 1969 Petroleum Act, (i.e., under the Minerals Oils
Act 1914, repealed by the 1969 Petroleum Act) were for 30 years onshore and 40
years in offshore areas and are renewable upon 12 months written notice, for
further periods of 30 and 40 years, respectively.
6
<PAGE>
OMLs granted under the 1969 Petroleum Act, which include all deepwater OMLs,
have a maximum term of 20 years without distinction for on- or offshore
location and are renewable, upon 12 months written notice, for another period
of 20 years. OMLs not held by the national oil company are also subject to a
mandatory 50 percent relinquishment, after the first ten years of their
duration.
In all cases, renewal of OMLs is almost certain if lessee satisfies three
conditions, namely, lessee: i) gives the requisite notice within the minimum
stipulated period; ii) has paid up-to-date all rentals, royalties and fees and
iii) has fulfilled all lessee's obligations under the OML.
The MOU (Memorandum of Understanding) defining commercial terms applicable
to existing oil production was renegotiated and executed in 2000 and is
effective for a minimum of three years with possible extension on mutual
agreement. Guidelines for Marginal Field Development were issued by the
Government.
OTHER COUNTRIES
Argentina
The concession terms for onshore in Argentina are two to three years for the
initial exploration period, one to two years for the second exploration period
and zero to one year for the third exploration period. The concession terms
for offshore in Argentina are four years for the initial exploration period,
three years for the second exploration period and three years for the third
exploration period. Fifty percent relinquishment is required after each
exploration period. An extension after the third exploration period is
possible for up to four years. The total exploration and exploitation term is
25 years. A ten-year extension is possible once a field has been developed.
Azerbaijan
The production sharing agreement (PSA) for the development of the
Megastructure is established for an initial period of 30 years starting from
the PSA execution date in 1994.
Other exploration and production activities are governed by PSAs negotiated
with the national oil company. The exploration period consists of three or
four years with the possibility of a one to three-year extension. The
production period, which includes development, is for 25 years or 35 years
with the possibility of one or two five-year extensions.
Kazakhstan
Onshore: Exploration and production activities are governed by a joint-
venture agreement negotiated with the Republic of Kazakhstan. Existing
production operations have a 40-year production period that commenced in 1993.
Offshore: Exploration and production activities are governed by a production
sharing agreement negotiated with the Republic of Kazakhstan. The exploration
period consists of six years with the possibility of a two-year extension. The
production period, which includes development, is for 20 years with the
possibility of two ten-year extensions.
Qatar
The State of Qatar grants concessions to LNG projects within Qatar's
offshore North field to permit the economic development and production of
sufficient gas to satisfy the LNG sales obligations of these projects.
Republic of Yemen
Production sharing agreements (PSAs) negotiated with the government entitle
the company to participate in exploration operations within a designated area
during the exploration period. In the
7
<PAGE>
event of a commercial oil discovery, the company is entitled to proceed with
development and production operations during the development period. The
length of these periods and other specific terms are negotiated prior to
executing the PSA. Existing production operations have a development period
extending 20 years from first commercial declaration (made in November 1985
for the Marib PSA and June 1995 for the Jannah PSA).
Venezuela
Exploration and production activities are governed by contracts negotiated
with the national oil company. Exploration activity is covered by risk/profit
sharing contracts where exploration blocks were awarded for 35 years.
Production licenses are awarded for 20 years under production service
agreements.
Strategic association agreements (such as the Cerro Negro project) are
limited to those projects that require vertical integration. Licenses are
awarded for 35 years. Significant amendments to the contract terms require
Venezuelan congressional approval.
8. Number of Net Productive and Dry Wells Drilled
<TABLE>
<CAPTION>
2000 1999 1998
----- ----- -----
<S> <C> <C> <C>
A. Net Productive Exploratory Wells Drilled
United States............................................... 2 16 23
Canada...................................................... 49 4 18
Europe...................................................... 3 7 8
Asia-Pacific................................................ 5 4 19
Africa...................................................... 2 8 6
Other....................................................... 1 1 8
----- ----- -----
Total...................................................... 62 40 82
----- ----- -----
B. Net Dry Exploratory Wells Drilled
United States............................................... 2 11 20
Canada...................................................... 12 2 9
Europe...................................................... 3 5 11
Asia-Pacific................................................ 3 10 15
Africa...................................................... 4 2 8
Other....................................................... 2 1 1
----- ----- -----
Total...................................................... 26 31 64
----- ----- -----
C. Net Productive Development Wells Drilled
United States............................................... 604 419 629
Canada...................................................... 213 308 149
Europe...................................................... 40 51 54
Asia-Pacific................................................ 30 47 69
Africa...................................................... 16 10 15
Other....................................................... 31 32 17
----- ----- -----
Total...................................................... 934 867 933
----- ----- -----
D. Net Dry Development Wells Drilled
United States............................................... 7 16 21
Canada...................................................... -- 12 8
Europe...................................................... 5 2 4
Asia-Pacific................................................ 1 -- 3
Africa...................................................... -- -- --
Other....................................................... -- 1 2
----- ----- -----
Total...................................................... 13 31 38
----- ----- -----
Total number of net wells drilled........................... 1,035 969 1,117
===== ===== =====
</TABLE>
8
<PAGE>
9. Present Activities
A. Wells Drilling -- Year-End 2000
<TABLE>
<CAPTION>
Gross Net
----- ---
<S> <C> <C>
United States....................................................... 151 69
Canada.............................................................. 63 12
Europe.............................................................. 26 9
Asia-Pacific........................................................ 9 4
Africa.............................................................. 5 2
Other............................................................... 9 3
--- ---
Total............................................................. 263 99
=== ===
</TABLE>
B. Review of Principal Ongoing Activities in Key Areas
During 2000, ExxonMobil's activities were conducted, either directly or
through affiliated companies, for exploration by ExxonMobil Exploration
Company, for large development activities by ExxonMobil Development Company,
for producing and smaller development activities by ExxonMobil Production
Company and for gas marketing by ExxonMobil Gas Marketing Company. During this
same period, some of ExxonMobil's exploration, development, production and gas
marketing activities were also conducted in California by Aera Energy, LLC, a
joint venture with Shell Oil Company and in Canada by the Resources Division
of Imperial Oil Limited, which is 69.6 percent owned by ExxonMobil.
Some of the more significant ongoing activities are:
UNITED STATES
Exploration and delineation of additional hydrocarbon resources continued.
At year-end 2000, ExxonMobil's acreage totaled 13.4 million net acres.
ExxonMobil was active in areas onshore and offshore in the lower 48 states and
in Alaska. A total of 3.9 net exploration and delineation wells were completed
during 2000.
During 2000, 539.1 net development wells were completed within and around
mature fields in the inland lower 48 states.
Participation in Alaska production and development continued and a total of
21.0 net development wells were drilled in 2000. Equity realignment in the
Prudhoe Bay field increased the company's net production by 30 thousand
barrels per day.
ExxonMobil's net acreage in the Gulf of Mexico at year-end 2000 was 3.5
million acres. A total of 47.1 net exploration and development wells were
completed during the year and development continued on several Gulf of Mexico
projects in 2000.
. In May 2000, production began from the ExxonMobil-operated Hoover and
Diana fields in the deepwater Gulf of Mexico using a Deep-Draft Caisson
Vessel (DDCV). This DDCV, installed in 4,800 feet of water, set a world
water-depth record for a combined drilling and production platform.
. Activities to tie-in Nile, a one well subsea development in 3,500 feet
of water, to the Marlin host platform are underway. First production is
planned for second quarter 2001.
. Construction and drilling activities advanced in the ExxonMobil-operated
Mica field, a remote deepwater subsea development located in 4,500 feet
water depth tied back to the Pompano host platform. First production is
scheduled for mid-year 2001.
9
<PAGE>
. Activities to tie-in the ExxonMobil-operated Marshall and Madison
discoveries, located in 4,800 feet water depth, to the Hoover host
facilities are underway. First production is planned for early 2002.
CANADA
ExxonMobil's year-end acreage holdings totaled 12.0 million net acres. A
total of 273.7 net exploration and development wells were completed during the
year.
Gross production from Cold Lake averaged 119 thousand barrels per day during
2000. Field work began on the next expansion targeted to start up in 2003. In
Eastern Canada, 2000 marked the first full year of gas production of the Sable
Offshore Energy Project. The Terra Nova oil development project offshore
Newfoundland is under construction.
EUROPE
France
ExxonMobil's acreage at year-end 2000 was 0.8 million net acres, with 2.5
net exploration and development wells completed during the year.
Germany
A total of 2.8 million net acres were held by ExxonMobil at year-end 2000,
with 4.8 net exploration and development wells drilled during the year. The
offshore A6/B4 gas project in the North Sea came on stream in the third
quarter of 2000.
Netherlands
ExxonMobil's interest in licenses totaled 2.5 million net acres at year-end
2000. During 2000, 2.7 net exploration and development wells were drilled.
Significant, but smaller fields, are continuously being discovered, developed
and brought on stream.
Norway
ExxonMobil's net interest in licenses at year-end 2000 totaled 1.4 million
acres, all offshore. ExxonMobil participated in 12.7 net exploration and
development well completions in 2000. Production was initiated on three
developments: Aasgard B/C, Sygna and Oseberg South. Field development projects
for Snorre B, Ringhorne and Grane fields are in progress.
United Kingdom
ExxonMobil's net interest in licenses at year-end 2000 totaled approximately
3.2 million acres, all offshore. A total of 28.2 net exploration and
development wells were completed during the year. Several projects started up,
including Shearwater, Triton, Cook and Skiff. Several major projects were
underway including Skene, Brigantine and Elgin/Franklin.
ASIA-PACIFIC
Australia
ExxonMobil's net year-end 2000 acreage holdings totaled 7.6 million acres.
ExxonMobil drilled a total of 24.4 net exploration and development wells in
2000. A development drilling program was completed offshore Australia.
10
<PAGE>
Indonesia
ExxonMobil had acreage of 8.0 million net acres at year-end 2000. During the
year ExxonMobil acquired an additional 51 percent interest in the Cepu block,
bringing its total interest to 100 percent.
Malaysia
ExxonMobil has interests in production sharing contracts covering 4.5
million net acres offshore Malaysia. During the year, a total of 13.3 net
exploration and development wells were completed. Development and infill
drilling were successfully completed at Tapis-E, Pulai-A and Jerneh-A
platforms. Major development projects currently in progress are Angsi, Larut
and five satellite field developments. These are scheduled for installation
and start-up in the 2001 to 2003 time frame.
Papua New Guinea
ExxonMobil's 2000 year-end acreage was 0.6 million net acres, with 0.5 net
exploration and development wells completed in 2000. An extended well test
commenced in the Moran field.
Thailand
ExxonMobil's acreage in the Khorat concession totaled 15 thousand net acres
at year-end.
AFRICA
Angola
ExxonMobil's year-end 2000 acreage holdings totaled 3.7 million net acres
and 3.6 net exploration and development wells were completed during the year.
Development continued on the Girassol field in Block 17 with first production
scheduled in late 2001. Development planning is progressing on ExxonMobil-
operated discoveries in Block 15 and non-operated Block 17 discoveries.
Cameroon
ExxonMobil's acreage totaled 0.3 million net acres at year-end, with 0.9 net
exploration and development wells completed during the year. The D1b field is
under development with first oil planned by year-end 2001.
Chad
ExxonMobil's net year-end 2000 acreage holdings consisted of 4.1 million
acres. Construction has commenced on the Chad-Cameroon Oil Development and
Pipeline project which will develop discovered oil fields in landlocked
southern Chad and transport produced oil to the coast of Cameroon.
Equatorial Guinea
ExxonMobil's net acreage totaled 0.6 million acres at year-end, with 4.4 net
exploration and development wells completed during the year. Production from
the Jade platform started in June 2000.
Nigeria
ExxonMobil's net acreage totaled 1.4 million acres at year-end, with 10.8
net exploration and development wells completed during the year. Development
plans are being progressed for the Bonga discovery (OPL 212) and for the
ExxonMobil-operated Erha (OPL 209) discovery. Expected start-up is 2004 for
Bonga and 2005 for Ehra.
11
<PAGE>
OTHER COUNTRIES
Argentina
ExxonMobil's acreage totaled 0.6 net million acres at year-end, with 4.0 net
exploration and development wells completed during the year.
Azerbaijan
At year-end 2000, ExxonMobil's net acreage totaled 0.2 million acres located
in the Caspian Sea offshore of Azerbaijan.
At the Megastructure Early Oil project, water injection to support reservoir
pressure was started in mid-2000. Engineering design of the next platform
continues.
Kazakhstan
ExxonMobil's net acreage totaled 0.4 million acres at year-end 2000, with
1.2 net exploration and development wells completed during 2000. Production
capacity from the Tengiz field has increased with the completion of a fifth
processing train and the implementation of gas handling de-bottlenecking
projects. Development planning to further increase production is ongoing.
Substantial progress was made on construction of the Caspian Pipeline
Consortium (CPC) project for transporting oil from Tengiz, and other Caspian
fields and nearby areas, to the Russian Black Sea port of Novorossiysk. Start-
up is projected in 2001. The pipeline will displace the high cost rail and
barge transportation now being used.
Qatar
Production and development activities continued on two major liquefied
natural gas (LNG) projects in Qatar -- Qatargas (Qatar Liquefied Gas Company
Limited) and RasGas (Ras Laffan Liquefied Natural Gas Company Ltd.). Initial
RasGas operations commenced in 1999 from the first LNG train. A second train
started up in March 2000, bringing total production capacity to 6.6 MTA
(million metric tons per year) of LNG. Engineering and design was completed in
2000 for two new LNG trains as part of the RasGas Expansion project.
In May 2000, a development and production sharing agreement was executed for
the Enhanced Gas Utilization (EGU) project, which provides for up to 1.75
billion cubic feet per day of gas production, along with associated condensate
and natural gas liquids, from Qatar's North field. Engineering and design of
the EGU gas production facilities were completed in 2000. Gas from EGU is
targeted for domestic use and regional sales via pipeline.
Republic of Yemen
ExxonMobil's net acreage in the Republic of Yemen production sharing areas
totaled 0.9 million acres onshore at year-end. During the year, 5.7 net
exploration and development wells were drilled and completed.
Venezuela
ExxonMobil's net acreage totaled 0.5 million acres at year-end with 19.3 net
exploration and development wells completed during the year. The Cerro Negro
heavy oil project began production in November 1999, and the Central
Processing facility was completed in the fourth quarter of 2000. Construction
activities on the Upgrader Facility at the Jose Industrial Complex are on
schedule for a 2001 start-up.
12
<PAGE>
WORLDWIDE EXPLORATION
Exploration activities were underway in several areas in which ExxonMobil
has no established production operations. A total of 35.2 million net acres
were held at year-end, and 3.6 net exploration wells were completed during the
year.
Information with regard to mining activities follows:
- - - - - - -----------------------------------------------------
Syncrude Operations
Syncrude is a joint-venture established to recover shallow deposits of tar
sands using open-pit mining methods, to extract the crude bitumen, and to
produce a high-quality, light (32 degree API), sweet, synthetic crude oil. The
Syncrude operation, located near Fort McMurray, Alberta, Canada, exploits a
portion of the Athabasca Oil Sands Deposit. The location is readily accessible
by public road. The produced synthetic crude oil is shipped from the Syncrude
site to Edmonton, Alberta in the Alberta Oil Sands Pipeline owned by the
Alberta Energy Company Ltd. Since startup in 1978, Syncrude has produced 1.2
billion barrels of synthetic crude oil. Imperial Oil Limited is the owner of a
25 percent interest in the joint-venture. Exxon Mobil Corporation has a 69.6
percent interest in Imperial Oil Limited.
Operating License and Leases
Syncrude has an operating license issued by the Province of Alberta which is
effective until 2035. This license permits Syncrude to mine tar sands and
produce synthetic crude oil from approved development areas on tar sands
leases. Syncrude holds eight tar sands leases covering approximately 255,000
acres in the Athabasca Oil Sands Deposit. Issued by the Province of Alberta,
the leases are automatically renewable as long as tar sands operations are
ongoing or the leases are part of an approved development plan. Syncrude
leases 10, 12, 17, 22 and 34 (containing proven reserves) and leases 29, 30
and 31 (containing no proven reserves) are included within a development plan
approved by the Province of Alberta's Department of Resource Development.
There were no known previous commercial operations on these leases prior to
the start-up of operations in 1978.
Operations, Plant and Equipment
Operations at Syncrude involve three main processes: open pit mining,
extraction of crude bitumen and upgrading of crude bitumen into synthetic
crude oil. In the Base mine (lease 17), the mining and transportation system
uses draglines, bucketwheel reclaimers and belt conveyors. In the North mine
(leases 17 and 22) and in the Aurora mine (leases 10, 12 and 34), a truck,
shovel and hydrotransport system is used. Production from the Aurora mine
commenced in 2000. The extraction facilities, which separate crude bitumen
from sand, are capable of processing approximately 545,000 tons of tar sands a
day, producing 110 million barrels of crude bitumen a year. This represents
recovery capability of about 92 percent of the crude bitumen contained in the
mined tar sands.
Crude bitumen extracted from tar sands is refined to a marketable
hydrocarbon product through a combination of carbon removal in two large,
high-temperature, fluid-coking vessels and by hydrogen addition in high-
temperature, high-pressure, hydrocracking vessels. These processes remove
carbon and sulfur and reformulate the crude into a low viscosity, low sulfur,
high-quality synthetic crude oil product. In 2000 this upgrading process
yielded 0.843 barrels of synthetic crude oil per barrel of crude bitumen.
About two-thirds of the synthetic crude oil is processed by Edmonton area
refineries and the remaining one-third is pipelined to refineries in eastern
Canada and the mid-western United States. Electricity is provided to Syncrude
by a 270 megawatt electricity generating plant and an 80 megawatt electricity
generating plant, both located at Syncrude. The generating plants are owned by
the Syncrude participants. Imperial Oil Limited's 25 percent share of net
investment in plant, property and equipment, including surface mining
facilities, transportation equipment and upgrading facilities is $690 million.
13
<PAGE>
Synthetic Crude Oil Reserves
The crude bitumen is contained within the unconsolidated sands of the
McMurray Formation. Ore bodies are buried beneath 50 to 150 feet of
overburden, have bitumen grades ranging from 4 to 14 weight percent and ore
thickness of 115 to 160 feet. Estimates of synthetic crude oil reserves are
based on detailed geological and engineering assessments of in-place crude
bitumen volume, the mining plan, historical extraction recovery and upgrading
yield factors, installed plant operating capacity and operating approval
limits. The in-place volume, depth and grade are established through extensive
and closely spaced core drilling. Proven reserves include the operating Base
and North mines and the Aurora mine. In accordance with the approved mining
plan, there are an estimated 3,535 million tons of extractable tar sands in
the Base and North mines, with an average bitumen grade of 10.4 weight
percent. In addition, at the Aurora mine, there are an estimated 1,645 million
tons of extractable tar sands at an average bitumen grade of 11.3 weight
percent. After deducting royalties payable to the Province of Alberta,
Imperial Oil Limited estimates its 25 percent net share of proven reserves is
equivalent to 610 million barrels of synthetic crude oil.
ExxonMobil Share of Net Proven Syncrude Reserves(1)
<TABLE>
<CAPTION>
Synthetic Crude Oil
-------------------------------
Base Mine and
North Mine Aurora Mine Total
------------- ----------- -----
(millions of barrels)
<S> <C> <C> <C>
January 1, 2000................................. 387 190 577
Revision of previous estimate................... -- 48 48
Production...................................... (14) (1) (15)
--- --- ---
December 31, 2000............................... 373 237 610
=== === ===
</TABLE>
- - - - - - --------
(1) Net reserves are the company's share of reserves after deducting royalties
payable to the Province of Alberta.
Syncrude Operating Statistics (total operation)
<TABLE>
<CAPTION>
2000 1999 1998 1997 1996
----- ----- ----- ----- -----
<S> <C> <C> <C> <C> <C>
Operating Statistics
Total mined volume (millions of cubic yards)(1).. 85.1 100.1 98.4 71.1 63.4
Mined volume to tar sands ratio(1)............... 0.96 0.99 1.05 0.75 0.68
Tar sands mined (million of tons)................ 156.4 178.7 165.9 166.7 163.7
Average bitumen grade (weight percent)........... 11.0 10.8 10.7 10.6 10.4
----- ----- ----- ----- -----
Crude bitumen in mined tar sands (millions of
tons)........................................... 17.2 19.3 17.8 17.7 17.0
Average extraction recovery (percent)............ 89.7 91.4 91.6 91.0 90.0
----- ----- ----- ----- -----
Crude bitumen production (millions of
barrels)(2)..................................... 86.8 99.6 92.1 90.3 86.4
Average upgrading yield (percent)................ 84.3 83.9 84.6 84.5 84.2
----- ----- ----- ----- -----
Gross synthetic crude oil produced (millions of
barrels)........................................ 73.2 83.6 77.9 76.3 72.9
ExxonMobil net share (millions of barrels)(3).... 15 20 19 17 15
</TABLE>
- - - - - - --------
(1) Includes pre-stripping of mine areas and reclamation volumes.
(2) Crude bitumen production is equal to crude bitumen in mined tar sands
multiplied by the average extraction recovery and the appropriate
conversion factor.
(3) Reflects ExxonMobil's 25 percent interest in production less applicable
royalties payable to the Province of Alberta.
14
<PAGE>
Item 3. Legal Proceedings.
A previously reported matter, involving a proceeding by the Texas Natural
Resource Conservation Commission captioned "In the Matter of an Enforcement
Action Concerning Exxon Mobil Corporation, Air Account No. JE-0067-I" and
alleging that the corporation failed to timely install NOx RACT and meet other
related requirements at the Mobil Oil Corporation Beaumont, Texas refinery in
violation of the Texas Health and Safety Code and various Commission rules,
was settled and a Final Agreed Order prepared during the fourth quarter of
2000. The Agreed Order requires payment of an administrative penalty of
$64,800 in addition to a Supplemental Environmental Project (SEP). The SEP
involves the purchase by the corporation of $64,800 worth of communications
equipment for the Jefferson County Local Emergency Planning Commission to
improve their ability to respond to local emergencies, including air pollution
incidents. The Commission had initially sought an administrative penalty of
$234,900. The Final Order will be executed during the first half of 2001.
In November, 2000, the Illinois Attorney General's office made a demand for
$275,000 in civil penalties in connection with a previously reported matter
involving a suit commenced by the Attorney General of the State of Illinois
and the State's Attorney for Will County, Illinois and alleging that a July 2,
1999 release of water and gas from the coker unit of Mobil Oil Corporation's
Joliet, Illinois refinery violated several provisions of the Illinois
Environmental Protection Act, created a public nuisance and violated a 1998
Consent Order. Penalties were previously unspecified. The corporation is
reviewing the demand.
The corporation, the U.S. Environmental Protection Agency and the California
Regional Water Quality Control Board have reached an agreement in principle to
settle penalty claims arising from a 1991 oil spill by Mobil Oil Corporation
into the Santa Clara River upon payment of $1,250,000 in civil penalties. The
agencies allege the spill resulted in violations of the Federal Clean Water
Act, the California Water Code and the Federal Oil Pollution Act. The
settlement, as well as an associated consent decree still to be negotiated,
will ultimately require approval by the court and publication in the Federal
Register to become effective.
Refer to the relevant portions of Note 17 on page 46 of the Financial
Section of this report for additional information on legal proceedings.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
----------------
15
<PAGE>
Executive Officers of the Registrant [pursuant to Instruction 3 to Regulation
S-K, Item 401(b)].
<TABLE>
<CAPTION>
Age as of
March 31,
Name 2001 Title (Held Office Since)
---- --------- ------------------------------------------------
<S> <C> <C>
L. R. Raymond.... 62 Chairman of the Board (1993)
R. Dahan......... 59 Senior Vice President (1995)
H. J. Longwell... 59 Senior Vice President (1995)
E. A. Renna...... 56 Senior Vice President (1999)
H. R. Cramer..... 50 Vice President (1999)
M. E. Foster..... 58 President, ExxonMobil Development Company (1999)
D. D. Humphreys.. 53 Vice President and Controller (1997)
K. T. Koonce..... 62 Vice President (1999)
C. W. Matthews... 56 Vice President and General Counsel (1995)
S. R. McGill..... 58 Vice President (1998)
J. T. McMillan... 64 Vice President (1997)
S. D. Pryor...... 51 Vice President (1999)
F. A. Risch...... 58 Vice President and Treasurer (1999)
D. S. Sanders.... 61 Vice President (1999)
J. S. Simon...... 57 Vice President (1999)
P. E. Sullivan... 57 Vice President and General Tax Counsel (1995)
J. L. Thompson... 61 Vice President (1991)
T. P. Townsend... 64 Vice President -- Investor Relations (1990)
and Secretary (1995)
</TABLE>
For at least the past five years, Messrs. Longwell, Matthews, Raymond,
Risch, Sullivan, Thompson and Townsend have been employed as executives of the
registrant. Mr. Raymond also holds the title of president.
The following executive officers of the registrant have also served as
executives of the subsidiaries, affiliates or divisions of the registrant
shown opposite their names during the five years preceding December 31, 2000.
<TABLE>
<S> <C>
Esso Italiana S.p.A. ............................... Simon
Esso Malaysia Berhad................................ Humphreys
Esso Production Malaysia Inc. ...................... Humphreys
Exxon Chemical Company.............................. Sanders
Exxon Coal and Minerals Company..................... McMillan
Exxon Company, International........................ Dahan, McGill and Simon
Exxon Company, U.S.A................................ Foster and McMillan
Exxon Upstream Development Company.................. Foster
Exxon Ventures (CIS) Inc. .......................... Koonce
ExxonMobil Chemical Company......................... Sanders
ExxonMobil Coal and Minerals Company................ McMillan
ExxonMobil Fuels Marketing Company.................. Cramer
ExxonMobil Gas Marketing Company.................... McGill
ExxonMobil Lubricants & Petroleum Specialties
Company............................................ Pryor
ExxonMobil Production Company....................... Koonce
ExxonMobil Refining & Supply Company................ Simon
Mobil Asia Pacific Pty. Ltd. ....................... Pryor
Mobil Chemical Company.............................. Pryor
Mobil Corporation................................... Cramer and Renna
Mobil Europe and Central Asia Limited............... Cramer
Mobil Europe Limited................................ Cramer
Mobil Oil Corporation............................... Pryor and Renna
Mobil South, Inc. .................................. Cramer
</TABLE>
Officers are generally elected by the Board of Directors at its meeting on
the day of each annual election of directors, each such officer to serve until
his or her successor has been elected and qualified.
16
<PAGE>
PART II
Item 5. Market for Registrant's Common Stock and Related Shareholder Matters.
Reference is made to the quarterly information which appears on page 56 of
the Financial Section of this report.
In accordance with the registrant's 1997 Nonemployee Director Restricted
Stock Plan, as amended, each incumbent nonemployee director (13 persons) was
granted 1,200 shares of restricted stock on January 1, 2001. These grants are
exempt from registration under bonus stock interpretations such as the "no-
action" letter to Pacific Telesis Group (June 30, 1992).
Item 6. Selected Financial Data.
<TABLE>
<CAPTION>
Years Ended December 31,
---------------------------------------------
2000 1999 1998 1997 1996
-------- -------- -------- -------- --------
(millions of dollars, except per share
amounts)
<S> <C> <C> <C> <C> <C>
Sales and other operating
revenue, including excise taxes. $228,439 $182,529 $165,627 $197,732 $210,038
Net income
Before extraordinary item and
cumulative effect of
accounting change............. $ 15,990 $ 7,910 $ 8,144 $ 11,732 $ 10,474
Extraordinary gain from
required asset divestitures,
net of income tax............. $ 1,730 $ -- $ -- $ -- $ --
Cumulative effect of accounting
change........................ $ -- $ -- $ (70) $ -- $ --
-------- -------- -------- -------- --------
Net income..................... $ 17,720 $ 7,910 $ 8,074 $ 11,732 $ 10,474
Net income per common share
Before extraordinary item and
cumulative effect of
accounting change............. $ 4.60 $ 2.28 $ 2.33 $ 3.32 $ 2.95
Extraordinary gain, net of
income tax.................... $ 0.50 $ -- $ -- $ -- $ --
Cumulative effect of accounting
change........................ $ -- $ -- $ (0.02) $ -- $ --
-------- -------- -------- -------- --------
Net income..................... $ 5.10 $ 2.28 $ 2.31 $ 3.32 $ 2.95
Net income per common share -
assuming dilution
Before extraordinary item and
cumulative effect of
accounting change............. $ 4.55 $ 2.25 $ 2.30 $ 3.28 $ 2.91
Extraordinary gain, net of
income tax.................... $ 0.49 $ -- $ -- $ -- $ --
Cumulative effect of accounting
change........................ $ -- $ -- $ (0.02) $ -- $ --
-------- -------- -------- -------- --------
Net income..................... $ 5.04 $ 2.25 $ 2.28 $ 3.28 $ 2.91
Cash dividends per common share . $ 1.760 $ 1.687 $ 1.666 $ 1.619 $ 1.538
Total assets..................... $149,000 $144,521 $139,335 $143,751 $146,939
Long-term debt................... $ 7,280 $ 8,402 $ 8,532 $ 10,868 $ 11,986
</TABLE>
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operations.
Reference is made to the section entitled "Management's Discussion and
Analysis of Financial Condition and Results of Operations" beginning on page
20 of the Financial Section of this report.
Item 7A. Quantitative and Qualitative Disclosures About Market Risk.
Reference is made to the section entitled "Market Risks, Inflation and Other
Uncertainties" beginning on page 23 excluding the part entitled "Inflation and
Other Uncertainties" and to the
17
<PAGE>
eleventh paragraph of the section entitled "Liquidity and Capital Resources"
on page 25 of the Financial Section of this report. All statements other than
historical information incorporated in this Item 7A are forward looking
statements. The actual impact of future market changes could differ materially
due to, among other things, factors discussed in this report.
Item 8. Financial Statements and Supplementary Data.
Reference is made to the consolidated financial statements, together with
the report thereon of PricewaterhouseCoopers LLP dated February 28, 2001,
appearing on pages 27 to 50; the Quarterly Information appearing on page 56
and the Supplemental Information on Oil and Gas Exploration and Production
Activities appearing on pages 51 to 55 of the Financial Section of this
report. Consolidated Financial Statement Schedules have been omitted because
they are not applicable or the required information is shown in the
consolidated financial statements or notes thereto.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
PART III
Item 10. Directors and Executive Officers of the Registrant.
Incorporated by reference to the sections entitled "Election of Directors"
and "Section 16(a) Beneficial Ownership Reporting Compliance" of the
registrant's definitive proxy statement for the 2001 annual meeting of
shareholders (the "2001 Proxy Statement").
Item 11. Executive Compensation.
Incorporated by reference to the section entitled "Director Compensation"
and the section entitled "Executive Compensation Tables" of the registrant's
2001 Proxy Statement.
Item 12. Security Ownership of Certain Beneficial Owners and Management.
Incorporated by reference to the section entitled "Director and Executive
Officer Stock Ownership" of the registrant's 2001 Proxy Statement.
Item 13. Certain Relationships and Related Transactions.
None.
PART IV
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) (1) and (a) (2) Financial Statements:
See Table of Contents on page 19 of the Financial Section of this
report.
(a) (3) Exhibits:
See Index to Exhibits on page 61 of this report.
(b) Reports on Form 8-K.
The Registrant did not file any reports on Form 8-K during the last
quarter of 2000.
18
<PAGE>
FINANCIAL SECTION
TABLE OF CONTENTS
<TABLE>
<S> <C>
Management's Discussion and Analysis of Financial Condition and Results
of Operations........................................................... 20-26
Report of Independent Accountants........................................ 27
Consolidated Financial Statements
Statement of Income.................................................... 28
Balance Sheet.......................................................... 29
Statement of Shareholders' Equity...................................... 30
Statement of Cash Flows................................................ 31
Notes to Consolidated Financial Statements
1. Summary of Accounting Policies..................................... 32
2. Extraordinary Item and Accounting Change........................... 33
3. Merger of Exxon Corporation and Mobil Corporation.................. 33
4. Reorganization Costs............................................... 33
5. Miscellaneous Financial Information ............................... 34
6. Cash Flow Information.............................................. 34
7. Additional Working Capital Data ................................... 34
8. Equity Company Information ........................................ 35
9. Investments and Advances........................................... 35
10. Investment in Property, Plant and Equipment........................ 36
11. Leased Facilities ................................................. 36
12. Capital............................................................ 36
13. Employee Stock Ownership Plans .................................... 38
14. Financial Instruments ............................................. 38
15. Long-Term Debt..................................................... 39
16. Incentive Program.................................................. 45
17. Litigation and Other Contingencies ................................ 46
18. Annuity Benefits and Other Postretirement Benefits ................ 47
19. Income, Excise and Other Taxes .................................... 49
20. Disclosures about Segments and Related Information ................ 50
Supplemental Information on Oil and Gas Exploration and Production
Activities ............................................................. 51-55
Quarterly Information ................................................... 56
Operating Summary ....................................................... 57
</TABLE>
19
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
<TABLE>
<CAPTION>
FUNCTIONAL EARNINGS 2000 1999 1998
____________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C>
Earnings Including Merger Effects and Special Items
Upstream
United States $ 4,545 $1,842 $ 850
Non-U.S. 7,824 4,044 2,502
Downstream
United States 1,561 577 1,199
Non-U.S. 1,857 650 2,275
Chemicals
United States 644 738 792
Non-U.S. 517 616 602
Other operations 551 426 384
Corporate and financing (589) (514) (460)
Merger expenses (920) (469) --
Gain from required asset divestitures 1,730 -- --
Accounting change -- -- (70)
-----------------------
Net income $17,720 $7,910 $8,074
=======================
Net income per common share (dollars) $ 5.10 $ 2.28 $ 2.31
Net income per common share -- assuming dilution (dollars) $ 5.04 $ 2.25 $ 2.28
============================================================================================================
Merger Effects and Special Items
Upstream
United States $ -- $ -- $ (185)
Non-U.S. -- 119 (176)
Downstream
United States -- -- 8
Non-U.S. -- (120) (412)
Chemicals
United States -- -- (8)
Non-U.S. -- -- (1)
Corporate and financing -- -- 112
Merger expenses (920) (469) --
Gain from required asset divestitures 1,730 -- --
Accounting change -- -- (70)
-----------------------
Total $ 810 $ (470) $ (732)
=======================
============================================================================================================
Earnings Excluding Merger Effects and Special Items
Upstream
United States $ 4,545 $1,842 $1,035
Non-U.S. 7,824 3,925 2,678
Downstream
United States 1,561 577 1,191
Non-U.S. 1,857 770 2,687
Chemicals
United States 644 738 800
Non-U.S. 517 616 603
Other operations 551 426 384
Corporate and financing (589) (514) (572)
-----------------------
Total $16,910 $8,380 $8,806
=======================
Earnings per common share (dollars) $ 4.87 $ 2.41 $ 2.52
Earnings per common share -- assuming dilution (dollars) $ 4.81 $ 2.38 $ 2.49
============================================================================================================
</TABLE>
20
<PAGE>
REVIEW OF 2000 RESULTS
Earnings excluding merger effects and special items were $16,910 million, an
increase of $8,530 million from 1999. Net income in 2000 of $17,720 million,
including net favorable merger effects of $810 million, increased $9,810 million
from 1999. Upstream (Exploration and Production) earnings benefited from higher
crude oil and natural gas realizations, which on average were up about 60
percent and 45 percent, respectively, versus 1999. Excluding the effects of
lower entitlements caused by higher crude prices, liquids production was 3
percent higher than 1999. Downstream (Refining and Marketing) earnings improved
from the very depressed results in 1999, driven by stronger worldwide refining
margins and better refining operations. However, downstream profitability was
restrained by difficulties in recovering the significant increases in raw
material costs that occurred over much of the year. Merger implementation
activities in 2000 added a net $810 million to net income, reflecting $1,730
million of gains from asset divestitures that were a condition of regulatory
approval of the merger. These gains more than offset merger implementation
expenses of $920 million. Results in 1999 included $470 million of net charges
for special items, primarily merger expenses with other special items
essentially offsetting. Revenue for 2000 totaled $233 billion, up 25 percent
from 1999, and the cost of crude oil and product purchases increased by 41
percent, both influenced by higher prices.
Excluding merger expenses, the combined total of operating costs (including
operating, selling, general, administrative, exploration, depreciation and
depletion expenses from the consolidated statement of income and ExxonMobil's
share of similar costs for equity companies) in 2000 were $43.6 billion, down
about $700 million from 1999. The impact of efficiency initiatives, including
the capture of merger synergies, reduced operating costs by $1.6 billion.
Interest expense in 2000 was $589 million compared to $695 million in 1999 as
the effect of lower debt levels was partly offset by higher interest rates.
Upstream
Upstream earnings of $12,369 million increased due to higher crude oil and
natural gas realizations, up about 60 percent and 45 percent, respectively.
Liquids production of 2,553 kbd (thousands of barrels daily) increased from
2,517 kbd in 1999. Excluding the effects of lower entitlements caused by higher
crude prices, liquids production was 3 percent higher than 1999, mainly
reflecting new production from fields in the North Sea and Venezuela and
increased production from eastern Canada and Alaska. These increases more than
offset the effects of natural field declines. Natural gas production of 10,343
mcfd (millions of cubic feet daily) was about the same as 1999 reflecting higher
production in eastern Canada, Europe and Qatar, offset by lower production in
Indonesia. Excluding entitlement impacts, natural gas production increased about
1 percent. Lower exploration expenses also benefited 2000 upstream earnings.
Earnings from U.S. upstream operations were $4,545 million, an increase of
$2,703 million from 1999. Earnings outside the U.S. were $7,824 million, $3,899
million higher than last year, excluding a $141 million deferred tax benefit and
a $22 million property write-off in 1999.
Downstream
Downstream earnings of $3,418 million improved over $2 billion from the very
depressed results in 1999, driven by stronger worldwide refining margins and
better refining operations. Earnings also benefited from a planned reduction in
inventories as a result of merging Exxon and Mobil operations around the world.
Petroleum product sales of 7,993 kbd compared with 8,887 kbd in 1999. The
decrease reflected the effects of the required divestiture of Mobil's European
fuels joint venture and of U.S. marketing and refining assets, as well as lower
supply sales in Asia-Pacific resulting from the low margin environment. Refinery
throughput was 5,642 kbd compared with 5,977 kbd in 1999. Excluding the effects
of the divestments, refinery throughput in 2000 was at the same level as 1999
and petroleum product sales were down about 4 percent. Earnings from U.S.
downstream operations were $1,561 million, up $984 million from the depressed
results of 1999, reflecting stronger refining margins and improved operations,
partly offset by weaker marketing margins. Earnings outside the U.S. of $1,857
million were $1,087 million higher than 1999 after excluding special charges in
1999 in Japan of $80 million for non-merger related restructuring of downstream
operations and a $40 million write-off associated with the cancellation of a
power project. The improvement was driven by stronger European and to a much
lesser extent Southeast Asian refining margins and improved refining operations,
partly offset by weaker marketing margins.
Chemicals
Chemicals earnings totaled $1,161 million compared with $1,354 million in 1999.
Record prime product sales volumes of 25,637 kt (thousands of metric tons) were
up 354 kt. The decline in earnings was driven by higher feedstock and energy
costs and unfavorable foreign exchange effects.
Other Operations
Earnings from other operating segments totaled $551 million, an increase of $125
million from 1999, reflecting record copper, coal and electricity sales, higher
copper prices, lower operating expenses and favorable foreign exchange effects,
partly offset by lower coal prices.
Corporate and Financing
Corporate and financing expenses of $589 million compared with $514 million in
1999. The increase resulted from unfavorable foreign
21
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
exchange effects and lower tax-related benefits. Partly offsetting was a
reduction in administrative expenses as a result of combining Exxon and Mobil
headquarters operations. The effect of lower debt levels was partly offset by
higher interest rates during the year.
REVIEW OF 1999 RESULTS
Earnings excluding merger expenses and special items were $8,380 million, down
$426 million or 5 percent from 1998. Net income was $7,910 million, down from
$8,074 million in 1998. The decline was primarily in the downstream where
steeply rising crude oil costs could not be recovered in the marketplace. Crude
oil prices rose about $14 per barrel from January to December 1999, depressing
downstream margins in all geographic areas. Weaker chemicals margins and lower
coal prices also adversely affected earnings. However, upstream results
benefited from the increase in crude oil prices and partly offset the weakness
in downstream business conditions. Record chemicals, coal and copper volumes and
reduced expenses in every operating segment also benefited earnings. Results in
1999 included $470 million of net charges for special items -- $469 million of
merger expenses with other special items essentially offsetting. Results in 1998
included $732 million of net special charges. Revenue for 1999 totaled $186
billion, up 9 percent from 1998, and the cost of crude oil and product purchases
increased 24 percent.
Excluding merger expenses, the combined total of operating costs (including
operating, selling, general, administrative, exploration, depreciation and
depletion expenses from the consolidated statement of income and ExxonMobil's
share of similar costs for equity companies) in 1999 was $44.3 billion, down
about $400 million from 1998. The impact of efficiency initiatives, including
the capture of early merger synergies, reduced operating costs by $1.2 billion.
Interest expense in 1999 was $695 million, $127 million higher than 1998,
mainly due to a higher debt level and unfavorable foreign exchange effects.
Upstream
Upstream earnings of $5,886 million increased significantly from 1998 reflecting
higher average crude oil prices, up over $5 per barrel from 1998. Average U.S.
natural gas prices were 9 percent higher than the prior year, while European gas
prices, which are tied to petroleum product prices on a lagged basis, were about
17 percent lower. Liquids production of 2,517 kbd was up 1 percent from 2,502
kbd in 1998 as production from new developments in the North Sea, the Gulf of
Mexico, West Africa and the Caspian offset natural field declines in North
America and lower liftings in Indonesia and Malaysia. Natural gas production of
10,308 mcfd compared with 10,617 mcfd in 1998. Upstream expenses were reduced
from 1998 levels. Earnings from the U.S. upstream were $1,842 million, up $807
million after excluding $185 million of special charges related mainly to
property write-downs in 1998. Outside the U.S. upstream earnings were $3,925
million, up $1,247 million after excluding a $141 million deferred tax benefit
and a $22 million property write-off in 1999 and $176 million of other net
special charges in 1998.
Downstream
Downstream earnings of $1,227 million declined from 1998's strong results
primarily reflecting escalating crude oil costs and weaker downstream margins in
all geographic areas. Unfavorable foreign exchange and inventory effects also
reduced earnings. Higher volumes, mainly in the U.S., and lower operating
expenses provided a partial offset. Petroleum product sales were 8,887 kbd
compared with 8,873 kbd in 1998. Refinery throughput was 5,977 kbd compared with
6,093 kbd in 1998. In the U.S., downstream earnings were $577 million, down $614
million from 1998 after excluding $8 million of special credits related to
inventory adjustments in 1998. Downstream operations outside of the U.S. earned
$770 million, down $1,917 million from 1998 after excluding special charges from
both years. Results in 1999 included $80 million of charges for non-merger
related restructuring of Japanese downstream operations and a $40 million write-
off associated with the cancellation of a power project in Japan, while 1998
results included $412 million of special charges largely related to the impact
of lower prices on inventories and Mobil-British Petroleum (BP) alliance
implementation costs.
Chemicals
Earnings from chemicals operations totaled $1,354 million, down $40 million or 3
percent from 1998. Industry margins declined due to lower product prices and
higher feedstock costs. Prime product sales volumes of 25,283 kt were a record.
Earnings also benefited from lower operating expenses. Chemicals' results
included $9 million of special charges related to the impact of lower prices on
inventories in 1998.
Other Operations
Earnings from other operating segments totaled $426 million, an increase of $42
million from 1998. The increase reflects record copper and coal production,
lower operating expenses and favorable foreign exchange effects, partly offset
by depressed coal prices.
Corporate and Financing
Corporate and financing expenses were $514 million, $54 million higher than 1998
which included a net special credit of $112 million related to settlement of
prior years' tax disputes. Excluding special items, expenses were $58 million
lower reflecting lower tax-related charges.
MERGER OF EXXON CORPORATION AND MOBIL CORPORATION
On November 30, 1999, a wholly-owned subsidiary of Exxon Corporation (Exxon)
merged with Mobil Corporation (Mobil) so that Mobil became a wholly-owned
subsidiary of Exxon (the "Merger"). At the same time, Exxon changed its name to
Exxon Mobil Corporation (ExxonMobil). Under the terms of the agreement,
approximately 1.0 billion shares of ExxonMobil common stock were issued in
exchange for all the outstanding shares of Mobil common stock based upon an
exchange ratio of 1.32015. Following the exchange, former shareholders of Exxon
owned approximately 70 percent of the corporation, while former Mobil
shareholders owned approximately 30 percent of the corporation. Each outstanding
share of Mobil preferred stock was converted into one share of a new class of
ExxonMobil preferred stock.
As a result of the Merger, the accounts of certain downstream and chemicals
operations jointly controlled by the combining companies have been included in
the consolidated financial statements. These operations were previously
accounted for by Exxon and Mobil as separate companies using the equity method
of accounting.
22
<PAGE>
The Merger was accounted for as a pooling of interests. Accordingly, the
consolidated financial statements give retroactive effect to the merger, with
all periods presented as if Exxon and Mobil had always been combined.
As a condition of the approval of the Merger, the U.S. Federal Trade
Commission and the European Commission required that certain property --
primarily downstream, pipeline and natural gas distribution assets -- be
divested. These assets, with a carrying value of approximately $3 billion, were
sold in the year 2000. Before-tax proceeds for these assets were approximately
$5 billion. The net after-tax gain of $1,730 million was reported as an
extraordinary item consistent with pooling of interests accounting
requirements. The properties have historically earned approximately $200
million per year.
REORGANIZATION COSTS
In association with the merger between Exxon and Mobil, $1,406 million pre-tax
($920 million after-tax) and $625 million pre-tax ($469 million after-tax) of
costs were recorded as merger related expenses in 2000 and 1999, respectively.
Cumulative charges included separation expenses related to workforce reductions
(approximately 6,000 employees at year-end 2000) and merger closing and
implementation costs. The separation reserve balance at year-end 2000 of
approximately $320 million is expected to be expended in 2001. Merger related
expenses are expected to grow to approximately $2.5 billion pre-tax on a
cumulative basis by 2002. Pre-tax operating synergies associated with the
Merger, which are on track with expectations, including cost savings, efficiency
gains, and revenue enhancements, are expected to reach $4.6 billion per year by
2002.
In the first quarter of 1999 the corporation recorded a $120 million after-
tax charge for the reorganization of Japanese downstream operations in its
wholly-owned Esso Sekiyu K.K. and 50.1 percent owned General Sekiyu K.K.
affiliates. The reorganization resulted in the reduction of approximately 700
administrative, financial, logistics and marketing service employee positions.
The Japanese affiliates recorded a combined charge of $216 million (before-tax)
to selling, general and administrative expenses for the employee related costs.
Substantially all cash expenditures anticipated in the restructuring provision
have been paid as of the end of 1999. General Sekiyu also recorded a $211
million (before-tax) charge to depreciation and depletion for the write-off of
costs associated with the cancellation of a power plant project at the Kawasaki
terminal. Manpower reduction savings associated with this reorganization are
approximately $50 million per year after-tax in 2000.
As indicated in note 4, during 1998 Mobil implemented reorganization programs
in Australia, New Zealand and Latin America to integrate regional fuels and
lubes operations. In 1997, Mobil and BP announced that their European
downstream alliance would implement a major reorganization of its lubricant
base oil refining business. Also in 1997, Mobil commenced two major cost
savings initiatives in Asia-Pacific: one in Japan in response to the
deregulated business environment and the other in Australia. After-tax costs
for programs initiated in 1998 were $41 million and for the 1997 programs were
$189 million. Benefits associated with these undertakings are estimated at $140
million per year after-tax.
The following table summarizes the activity in the reorganization reserves.
The 1998 opening balance represents accruals for provisions taken in prior
years.
Opening Balance at
Balance Additions Deductions Year End
___________________________________________________________________________
(millions of dollars)
1998 $300 $ 50 $181 $169
1999 169 563 351 381
2000 381 738 780 339
CAPITAL AND EXPLORATION EXPENDITURES
Capital and exploration expenditures in 2000 were $11.2 billion, down from $13.3
billion in 1999, primarily reflecting timing of completion of major project
expenditures.
Upstream spending was down 18 percent to $6.9 billion in 2000, from $8.4
billion in 1999, as a result of the completion of major projects in the North
Sea, Canada and South America, and lower exploration expenses. Capital
investments in the downstream totaled $2.6 billion in 2000, up $0.2 billion
from 1999, primarily reflecting increased investments in China and higher
spending at U.S. refineries. The increase was largely offset by lower spending
in the European Fuels Joint Venture with BP which was divested in 2000 as a
condition of regulatory approval of the merger, and lower spending in the
retail businesses. Chemicals capital expenditures were $1.5 billion in 2000,
down from $2.2 billion in 1999, due to the completion of major projects in the
United States, Singapore, Saudi Arabia, and Thailand.
Capital and exploration expenditures in the U.S. totaled $3.3 billion in
2000, a decrease of $0.1 billion from 1999, reflecting higher spending in both
the upstream and downstream, offset by lower spending in chemicals. Spending
outside the U.S. of $7.9 billion in 2000 compared with $9.9 billion in 1999,
reflecting lower expenditures in the upstream and chemicals.
Firm commitments related to capital projects totaled approximately $4.6
billion at the end of 2000, the same as at year-end 1999. The largest single
commitment in 2000 was $2.3 billion associated with the development of crude
oil and natural gas resources in Malaysia. The corporation expects to fund the
majority of these commitments through internally generated funds.
MARKET RISKS, INFLATION AND OTHER UNCERTAINTIES
In the past, crude, product and chemical prices have fluctuated widely in
response to changing market forces. The impacts of these price fluctuations on
earnings from upstream operations, downstream operations and chemical operations
have been varied, tending at times to be offsetting.
The markets for crude oil and natural gas have a history of significant price
volatility. Although prices will occasionally drop precipitously, industry
prices over the long term will continue to be driven by market supply and
demand fundamentals. Accordingly, the corporation tests the viability of its
oil and gas operations based on long-term price projections. The corporation's
assessment is that its operations will
23
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
continue to be successful in a variety of market conditions. This is the
outcome of disciplined investment and asset management programs.
Investment opportunities are tested against a variety of market conditions,
including low price scenarios. As a result, investments that would succeed only
in highly favorable price environments are screened out of the investment plan.
In addition, the corporation has had an aggressive asset management program in
which under-performing assets are either improved to acceptable levels or
considered for divestment. The asset management program involves a disciplined,
regular review to ensure that all assets are contributing to the corporation's
strategic and financial objectives. The result has been the creation of a very
efficient capital base.
Risk Management
The corporation's size, geographic diversity and the complementary nature of the
upstream, downstream and chemicals businesses mitigate the corporation's risk
from changes in interest rates, currency rates and commodity prices. As a
result, the corporation makes limited use of derivatives to offset exposures
arising from existing transactions.
Interest rate, foreign exchange rate and commodity price exposures from the
contracts undertaken in accordance with the corporation's policies have not
been significant. Derivative instruments are not held for trading purposes nor
do they have leveraged features.
Debt-Related Instruments
The corporation is exposed to changes in interest rates, primarily as a result
of its short-term and long-term debt with both fixed and floating interest
rates. The corporation makes limited use of interest rate swap agreements to
adjust the ratio of fixed and floating rates in the debt portfolio. The impact
of a 100 basis point change in interest rates affecting the corporation's debt
would not be material to earnings, cash flow or fair value.
Foreign Currency Exchange Rate Instruments
The corporation conducts business in many foreign currencies and is subject to
foreign currency exchange rate risk on cash flows related to sales, expenses,
financing and investment transactions. The impacts of fluctuations in foreign
currency exchange rates on ExxonMobil's geographically diverse operations are
varied and often offsetting in amount. The corporation makes limited use of
currency exchange contracts to reduce the risk of adverse foreign currency
movements related to certain foreign currency debt obligations. Exposure from
market rate fluctuations related to these contracts is not material. Aggregate
foreign exchange transaction gains and losses included in net income are
discussed in note 5 to the consolidated financial statements.
Commodity Instruments
The corporation makes limited use of commodity forwards, swaps and futures
contracts of short duration to mitigate the risk of unfavorable price movements
on certain crude, natural gas and petroleum product purchases and sales.
Commodity price exposure related to these contracts is not material.
Inflation and Other Uncertainties
The general rate of inflation in most major countries of operation has been
relatively low in recent years, and the associated impact on operating costs has
been countered by cost reductions from efficiency and productivity improvements.
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.
RECENTLY ISSUED STATEMENTS
OF FINANCIAL ACCOUNTING STANDARDS
In June 1998, the Financial Accounting Standards Board released Statement No.
133, "Accounting for Derivative Instruments and Hedging Activities." Statement
No. 133, as amended by Statements No. 137 and 138, must be adopted by the
corporation no later than January 1, 2001. The statement establishes accounting
and reporting standards for derivative instruments. It requires that all
derivatives be recognized as either assets or liabilities in the financial
statements and measured at fair value. It establishes the accounting for changes
in the fair value of the derivatives depending on their intended use. Since the
corporation makes very limited use of derivatives, the effect of adoption on the
corporation's operations or financial condition will be negligible.
SITE RESTORATION AND OTHER ENVIRONMENTAL COSTS
Over the years the corporation has accrued provisions for estimated site
restoration costs to be incurred at the end of the operating life of certain of
its facilities and properties. In addition, the corporation accrues provisions
for environmental liabilities in the many countries in which it does business
when it is probable that obligations have been incurred and the amounts can be
reasonably estimated. This policy applies to assets or businesses currently
owned or previously disposed.
The corporation has accrued provisions for probable environmental remediation
obligations at various sites, including multi-party sites where ExxonMobil has
been identified as one of the potentially responsible parties by the U.S.
Environmental Protection Agency. The involvement of other financially
responsible companies at these multi-party sites mitigates ExxonMobil's actual
joint and several liability exposure. At present, no individual site is
expected to have losses material to ExxonMobil's operations, financial
condition or liquidity.
Charges made against income for site restoration and environmental
liabilities were $311 million in 2000, $219 million in 1999 and $240 million in
1998. At the end of 2000, accumulated site restoration and environmental
provisions, after reduction for amounts paid, amounted to $3.7 billion.
ExxonMobil believes that any cost in excess of the amounts already provided for
in the financial statements would not have a materially adverse effect upon the
corporation's operations, financial condition or liquidity.
24
<PAGE>
In 2000, the corporation spent $1,529 million (of which $393 million were
capital expenditures) on environmental projects and expenses worldwide, mostly
dealing with air and water conservation. Total expenditures for such activities
are expected to be about $1.8 billion in both 2001 and 2002 (with capital
expenditures representing about 25 percent of the total).
TAXES
Income, excise and all other taxes and duties totaled $68.4 billion in 2000, an
increase of $6.9 billion or 11 percent from 1999. Income tax expense, both
current and deferred, was $11.1 billion compared to $3.2 billion in 1999,
reflecting higher pre-tax income in 2000. The effective tax rate increased from
31.8 percent in 1999 to 42.4 percent in 2000 as a result of a larger share of
total earnings coming from the more highly taxed non-U.S. upstream segment and
lower benefits from resolution of tax-related issues. Excise and all other taxes
and duties decreased $1.0 billion to $57.3 billion.
Income, excise and all other taxes and duties totaled $61.5 billion in 1999,
an increase of $1.6 billion or 3 percent from 1998. Income tax expense, both
current and deferred, was $3.2 billion compared to $3.9 billion in 1998,
reflecting lower pre-tax income in 1999, the impact of lower foreign tax rates
and favorable resolution of tax-related issues. The effective tax rate was 31.8
percent in 1999 versus 35.2 percent in 1998. Excise and all other taxes and
duties increased $2.3 billion to $58.3 billion, reflecting higher prices.
LIQUIDITY AND CAPITAL RESOURCES
In 2000, cash provided by operating activities totaled $22.9 billion, up $7.9
billion from 1999. Major sources of funds were net income of $17.7 billion and
non-cash provisions of $8.1 billion for depreciation and depletion.
Cash used in investing activities totaled $3.3 billion, down $7.7 billion
from 1999 due to higher proceeds from sales of subsidiaries, investments and
property, plant and equipment resulting from asset divestitures that were
required as a condition of the regulatory approval of the merger, and due to
lower additions to property, plant and equipment.
Cash used in financing activities was $14.2 billion, up $9.4 billion, driven
by debt reductions in the current year versus debt increases in 1999, along
with higher purchases of common shares. Dividend payments on common shares
increased from $1.687 per share to $1.760 per share and totaled $6.1 billion, a
payout of 35 percent. Total consolidated debt declined by $5.6 billion to $13.4
billion.
Shareholders' equity increased by $7.3 billion to $70.8 billion. The ratio of
debt to capital decreased to 15 percent, reflecting lower debt levels and the
higher shareholders' equity balance.
Prior to the merger, the corporation purchased shares of its common stock for
the treasury. Consistent with pooling accounting requirements, this repurchase
program was terminated effective with the close of the ExxonMobil merger on
November 30, 1999. On August 1, 2000, the corporation announced its intention
to purchase shares of its common stock. During 2000, Exxon Mobil Corporation
purchased 27.0 million shares of its common stock for the treasury at a gross
cost of $2,352 million. These purchases were to offset shares issued in
conjunction with company benefit plans and programs and to reduce the number of
shares outstanding. Shares outstanding were reduced from 3,477 million at the
end of 1999 to 3,465 million at the end of 2000. Purchases were made in both
the open market and through negotiated transactions, and may be discontinued at
any time.
In 1999, cash provided by operating activities totaled $15.0 billion, down
$1.4 billion from 1998. Major sources of funds were net income of $7.9 billion
and non-cash provisions of $8.3 billion for depreciation and depletion.
Cash used in investing activities totaled $11.0 billion, down $1.0 billion
from 1998 primarily as a result of lower additions to property, plant and
equipment, partly offset by lower sales of subsidiaries and property, plant and
equipment.
Cash used in financing activities was $4.8 billion, down $2.4 billion,
primarily due to fewer common share purchases. Dividend payments on common
shares increased from $1.666 per share to $1.687 per share and totaled $5.8
billion, a payout of 74 percent. Total consolidated debt increased by $2.0
billion to $19.0 billion.
Shareholders' equity increased by $1.3 billion to $63.5 billion. The ratio of
debt to capital increased to 22 percent, reflecting higher debt levels. During
1999, Exxon purchased 8.3 million shares of its common stock for the treasury
at a cost of $648 million. These purchases were used to offset shares issued in
conjunction with the company's benefit plans and programs. Purchases were made
both in the open market and through negotiated transactions. Consistent with
pooling of interest accounting requirements, these repurchases were terminated
effective with the close of the ExxonMobil merger on November 30, 1999.
Previously, as a consequence of the then proposed merger of Exxon and Mobil
announced on December 1, 1998, both companies' repurchase programs to reduce
the number of shares outstanding were discontinued.
Although the corporation issues long-term debt from time to time and
maintains a revolving commercial paper program, internally generated funds
cover the majority of its financial requirements.
As discussed in note 14 to the consolidated financial statements, the
corporation's financial derivative activities are limited to simple risk
management strategies. The corporation does not trade in financial derivatives
nor does it use financial derivatives with leveraged features. The corporation
maintains a system of controls that includes a policy covering the
authorization, reporting, and monitoring of derivative activity. The
corporation's derivative activities pose no material credit or market risks to
ExxonMobil's operations, financial condition or liquidity.
Litigation and Other Contingencies
As discussed in note 17 to the consolidated financial statements, a number of
lawsuits, including class actions, were brought in various courts against Exxon
Mobil Corporation and certain of its subsidiaries relating to the accidental
release of crude oil from the tanker Exxon Valdez in 1989. Essentially all of
these lawsuits have now been resolved or are subject to appeal.
25
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF
OPERATIONS
On September 24, 1996, the United States District Court for the District of
Alaska entered a judgment in the amount of $5.058 billion in the Exxon Valdez
civil trial that began in May 1994. The District Court awarded approximately
$19.6 million in compensatory damages to fisher plaintiffs, $38 million in
prejudgment interest on the compensatory damages and $5 billion in punitive
damages to a class composed of all persons and entities who asserted claims for
punitive damages from the corporation as a result of the Exxon Valdez grounding.
The District Court also ordered that these awards shall bear interest from and
after entry of the judgment. The District Court stayed execution on the judgment
pending appeal based on a $6.75 billion letter of credit posted by the
corporation. ExxonMobil has appealed the judgment. The United States Court of
Appeals for the Ninth Circuit heard oral arguments on the appeal on May 3, 1999.
The corporation continues to believe that the punitive damages in this case are
unwarranted and that the judgment should be set aside or substantially reduced
by the appellate courts. The ultimate cost to the corporation from the lawsuits
arising from the Exxon Valdez grounding is not possible to predict and may not
be resolved for a number of years.
On December 19, 2000, a jury in Montgomery County, Alabama, returned a
verdict against the corporation in a contract dispute over royalties in the
amount of $87.69 million in compensatory damages and $3.42 billion in punitive
damages in the case of Exxon Corporation v. State of Alabama, et al. ExxonMobil
will challenge the verdict and believes that the verdict is unwarranted and
that the judgment should be set aside or substantially reduced. The ultimate
outcome is not expected to have a materially adverse effect upon the
corporation's operations or financial condition.
The U.S. Tax Court has decided the issue with respect to the pricing of crude
oil purchased from Saudi Arabia for the years 1979-1981 in favor of the
corporation. This decision is subject to appeal. Certain other issues for the
years 1979-1993 remain pending before the Tax Court. Ultimate resolution of
these issues and several other tax and legal issues, notably final resolution
of royalty recovery and tax issues related to the gas lifting imbalance in the
Common Area (along the German/Dutch border), is not expected to have a
materially adverse effect upon the corporation's operations, financial
condition or liquidity.
There are no events or uncertainties known to management beyond those already
included in reported financial information that would indicate a material
change in future operating results or financial condition.
THE EURO
On January 1, 1999, eleven European countries established fixed conversion rates
between their existing sovereign currencies ("legacy currencies") and adopted
the euro as their common legal currency. The euro and the legacy currencies are
each legal tender for transactions now. Beginning January 1, 2002, the
participating countries will issue euro-denominated bills and coins. By July 1,
2002 each country will withdraw its sovereign currency and transactions
thereafter will be conducted solely in euros. Based on work to date, the
conversion to the euro is not expected to have a material effect on the
corporation's operations, financial condition or liquidity.
FORWARD-LOOKING STATEMENTS
Statements in this discussion regarding expectations, plans and future events or
conditions are forward-looking statements. Actual future results, including
merger related expenses; synergy benefits from the merger (including cost
savings, efficiency gains and revenue enhancements); financing sources; the
resolution of contingencies; the effect of changes in prices, interest rates and
other market conditions; and environmental and capital expenditures could differ
materially depending on a number of factors. These factors include management's
ability to implement merger plans successfully and on schedule; the outcome of
commercial negotiations; changes in the supply of and demand for crude oil,
natural gas, and petroleum and petro-chemical products; and other factors
discussed above and under the caption "Factors Affecting Future Results" in
Item 1 of ExxonMobil's 2000 Form 10-K.
26
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
[LOGO OF PRICEWATERHOUSECOOPERS LLC]
Dallas, Texas
February 28, 2001
To the Shareholders of Exxon Mobil Corporation
In our opinion, based on our audits and the report of other auditors, the
consolidated financial statements appearing on pages 28 through 50 present
fairly, in all material respects, the financial position of Exxon Mobil
Corporation and its subsidiary companies at December 31, 2000 and 1999, and
the results of their operations and their cash flows for each of the three
years in the period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America. These financial
statements are the responsibility of the corporation's management; our
responsibility is to express an opinion on these financial statements based on
our audits. The consolidated financial statements give retroactive effect to
the merger of Mobil Corporation on November 30, 1999 in a transaction
accounted for as a pooling of interests, as described in note 3 to the
consolidated financial statements. We did not audit the financial statements
of Mobil Corporation, which statements reflect total revenues of $53,531
million for the year ended December 31, 1998. Those statements were audited by
other auditors whose report thereon has been furnished to us, and our opinion
expressed herein, insofar as it relates to the amounts included for Mobil
Corporation, is based solely on the report of the other auditors. We conducted
our audits of these statements in accordance with auditing standards generally
accepted in the United States of America, which require that we plan and
perform the audit to obtain reasonable assurance about whether the financial
statements are free of material misstatement. An audit includes examining, on
a test basis, evidence supporting the amounts and disclosures in the financial
statements, assessing the accounting principles used and significant estimates
made by management, and evaluating the overall financial statement
presentation. We believe that our audits and the report of the other auditors
provide a reasonable basis for our opinion.
As discussed in note 2 to the consolidated financial statements, the
corporation changed its method of accounting for the cost of start-up
activities in 1998.
/s/ PRICEWATERHOUSECOOPERS LLP
27
<PAGE>
CONSOLIDATED STATEMENT OF INCOME
<TABLE>
<CAPTION>
2000 1999 1998
______________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C>
Revenue
Sales and other operating revenue, including excise taxes $228,439 $182,529 $165,627
Earnings from equity interests and other revenue 4,309 2,998 4,015
--------------------------
Total revenue $232,748 $185,527 $169,642
--------------------------
Costs and other deductions
Crude oil and product purchases $108,951 $ 77,011 $ 62,145
Operating expenses 18,135 16,806 17,666
Selling, general and administrative expenses 12,044 13,134 12,925
Depreciation and depletion 8,130 8,304 8,355
Exploration expenses, including dry holes 936 1,246 1,506
Merger related expenses 1,406 625 --
Interest expense 589 695 568
Excise taxes 22,356 21,646 20,926
Other taxes and duties 32,708 34,765 33,203
Income applicable to minority and preferred interests 412 145 265
--------------------------
Total costs and other deductions $205,667 $174,377 $157,559
--------------------------
Income before income taxes $ 27,081 $ 11,150 $ 12,083
Income taxes 11,091 3,240 3,939
--------------------------
Income before extraordinary item and cumulative effect of accounting change $ 15,990 $ 7,910 $ 8,144
Extraordinary gain from required asset divestitures, net of income tax 1,730 -- --
Cumulative effect of accounting change -- -- (70)
--------------------------
Net income $ 17,720 $ 7,910 $ 8,074
==========================
Net income per common share (dollars)
Before extraordinary item and cumulative effect of accounting change $ 4.60 $ 2.28 $ 2.33
Extraordinary gain, net of income tax 0.50 -- --
Cumulative effect of accounting change -- -- (0.02)
--------------------------
Net income $ 5.10 $ 2.28 $ 2.31
--------------------------
Net income per common share -- assuming dilution (dollars)
Before extraordinary item and cumulative effect of accounting change $ 4.55 $ 2.25 $ 2.30
Extraordinary gain, net of income tax 0.49 -- --
Cumulative effect of accounting change -- -- (0.02)
--------------------------
Net income $ 5.04 $ 2.25 $ 2.28
--------------------------
</TABLE>
The information on pages 32 through 50 is an integral part of these statements.
28
<PAGE>
CONSOLIDATED BALANCE SHEET
<TABLE>
<CAPTION>
Dec. 31 Dec. 31
2000 1999
_____________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C>
Assets
Current assets
Cash and cash equivalents $ 7,080 $ 1,688
Other marketable securities 1 73
Notes and accounts receivable, less estimated doubtful amounts 22,996 19,155
Inventories
Crude oil, products and merchandise 7,244 7,370
Materials and supplies 1,060 1,122
Prepaid taxes and expenses 2,018 1,733
-------------------
Total current assets $ 40,399 $ 31,141
Investments and advances 12,618 14,544
Property, plant and equipment, at cost, less accumulated depreciation and depletion 89,829 94,043
Other assets, including intangibles, net 6,154 4,793
-------------------
Total assets $149,000 $ 144,521
===================
Liabilities
Current liabilities
Notes and loans payable $ 6,161 $ 10,570
Accounts payable and accrued liabilities 26,755 25,492
Income taxes payable 5,275 2,671
-------------------
Total current liabilities $ 38,191 $ 38,733
Long-term debt 7,280 8,402
Annuity reserves and accrued liabilities 11,934 12,902
Deferred income tax liabilities 16,442 16,251
Deferred credits 1,166 1,079
Equity of minority and preferred shareholders in affiliated companies 3,230 3,688
-------------------
Total liabilities $ 78,243 $ 81,055
-------------------
Shareholders' equity
Benefit plan related balances $ (235) $ (298)
Common stock without par value (4,500 million shares authorized) 3,661 3,403
Earnings reinvested 86,652 75,055
Accumulated other nonowner changes in equity
Cumulative foreign exchange translation adjustment (4,862) (2,300)
Minimum pension liability adjustment (310) (299)
Unrealized gains/(losses) on stock investments (17) 31
Common stock held in treasury (545 million shares in 2000 and 533 million shares in 1999) (14,132) (12,126)
-------------------
Total shareholders' equity $ 70,757 $ 63,466
-------------------
Total liabilities and shareholders' equity $149,000 $ 144,521
===================
</TABLE>
The information on pages 32 through 50 is an integral part of these statements.
29
<PAGE>
CONSOLIDATED STATEMENT OF SHAREHOLDERS' EQUITY
<TABLE>
<CAPTION>
2000 1999 1998
_____________________________________________________________________
Nonowner Nonowner Nonowner
Changes Changes Changes
Shareholders' in Shareholders' in Shareholders' in
Equity Equity Equity Equity Equity Equity
_____________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Class A preferred stock outstanding at end of year $ -- $ -- $ 105
Class B preferred stock outstanding at end of year -- -- 641
Benefit plan related balances (235) (298) (793)
Common stock (see note 12)
At beginning of year 3,403 4,870 4,766
Issued -- 92 104
Other 258 303 --
Cancellation of common stock held in treasury -- (1,862) --
--------- --------- ---------
At end of year $ 3,661 $ 3,403 $ 4,870
--------- --------- ---------
Earnings reinvested
At beginning of year 75,055 75,109 72,875
Net income for the year 17,720 $17,720 7,910 $7,910 8,074 $8,074
Dividends -- common and preferred shares (6,123) (5,872) (5,840)
Cancellation of common stock held in treasury -- (2,092) --
--------- --------- ---------
At end of year $ 86,652 $ 75,055 $ 75,109
--------- --------- ---------
Accumulated other nonowner changes in equity
At beginning of year (2,568) (1,981) (1,940)
Foreign exchange translation adjustment (2,562) (2,562) (727) (727) 367 367
Minimum pension liability adjustment (11) (11) 109 109 (408) (408)
Unrealized gains/(losses) on stock investments (48) (48) 31 31 -- --
--------- --------- ---------
At end of year $ (5,189) $ (2,568) $ (1,981)
--------- ------- --------- ------ --------- ------
Total $15,099 $7,323 $8,033
======= ====== ======
Common stock held in treasury
At beginning of year (12,126) (15,831) (12,881)
Acquisitions, at cost (2,352) (976) (3,523)
Dispositions 346 727 573
Cancellation, returned to unissued -- 3,954 --
--------- --------- ---------
At end of year $ (14,132) $ (12,126) $ (15,831)
--------- --------- ---------
Shareholders' equity at end of year $ 70,757 $ 63,466 $ 62,120
========= ========= =========
</TABLE>
<TABLE>
<CAPTION>
Share Activity
________________________________________________________
2000 1999 1998
________________________________________________________
(millions of shares)
<S> <C> <C> <C>
Class A preferred stock -- -- 2
Class B preferred stock -- -- 0.2
Common stock
Issued (see note 12)
At beginning of year 4,010 4,169 4,164
Issued -- 4 5
Cancelled -- (163) --
--------- --------- ---------
At end of year 4,010 4,010 4,169
--------- --------- ---------
Held in treasury (see note 12)
At beginning of year (533) (711) (674)
Acquisitions, at cost (27) (17) (53)
Dispositions 15 32 16
Cancellation, returned to unissued -- 163 --
--------- --------- ---------
At end of year (545) (533) (711)
--------- --------- ---------
Common shares outstanding at end of year 3,465 3,477 3,458
========= ========= =========
</TABLE>
The information on pages 32 through 50 is an integral part of these statements.
30
<PAGE>
CONSOLIDATED STATEMENT OF CASH FLOWS
<TABLE>
<CAPTION>
2000 1999 1998
________________________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C>
Cash flows from operating activities
Net income
Accruing to ExxonMobil shareholders $ 17,720 $ 7,910 $ 8,074
Accruing to minority and preferred interests 412 145 265
Adjustments for non-cash transactions
Depreciation and depletion 8,130 8,304 8,355
Deferred income tax charges/(credits) 10 (1,439) 318
Annuity and accrued liability provisions (662) 412 (251)
Dividends received greater than/(less than) equity in current earnings of equity companies (387) 146 328
Extraordinary gain from required asset divestitures, before income tax (2,038) -- --
Changes in operational working capital, excluding cash and debt
Reduction/(increase) -- Notes and accounts receivable (4,832) (3,478) 2,170
-- Inventories (297) 50 438
-- Prepaid taxes and expenses (204) 177 8
Increase/(reduction) -- Accounts and other payables 5,411 3,046 (3,010)
All other items -- net (326) (260) (259)
----------------------------
Net cash provided by operating activities $ 22,937 $ 15,013 $ 16,436
----------------------------
Cash flows from investing activities
Additions to property, plant and equipment $ (8,446) $(10,849) $(12,730)
Sales of subsidiaries, investments and property, plant and equipment 5,770 972 1,884
Additional investments and advances (1,648) (1,476) (1,469)
Collection of advances 985 387 336
Additions to other marketable securities (41) (61) (61)
Sales of other marketable securities 82 42 58
----------------------------
Net cash used in investing activities $ (3,298) $(10,985) $(11,982)
----------------------------
Net cash generation before financing activities $ 19,639 $ 4,028 $ 4,454
----------------------------
Cash flows from financing activities
Additions to long-term debt $ 238 $ 454 $ 1,384
Reductions in long-term debt (901) (341) (305)
Additions to short-term debt 500 1,870 930
Reductions in short-term debt (2,413) (2,359) (2,175)
Additions/(reductions) in debt with less than 90 day maturity (3,129) 2,210 2,384
Cash dividends to ExxonMobil shareholders (6,123) (5,872) (5,843)
Cash dividends to minority interests (251) (219) (387)
Changes in minority interests and sales/(purchases) of affiliate stock (227) (200) (84)
Common stock acquired (2,352) (670) (3,547)
Common stock sold 493 348 507
----------------------------
Net cash used in financing activities $(14,165) $ (4,779) $ (7,136)
----------------------------
Effects of exchange rate changes on cash $ (82) $ 53 $ 23
----------------------------
Increase/(decrease) in cash and cash equivalents $ 5,392 $ (698) $ (2,659)
Cash and cash equivalents at beginning of year 1,688 2,386 5,045
----------------------------
Cash and cash equivalents at end of year $ 7,080 $ 1,688 $ 2,386
============================
</TABLE>
The information on pages 32 through 50 is an integral part of these
statements.
31
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The corporation's principal business is energy, involving the worldwide
exploration, production, transportation and sale of crude oil and natural gas
(upstream) and the manufacture, transportation and sale of petroleum products
(downstream). The corporation is also a major worldwide manufacturer and
marketer of petrochemicals and participates in coal and minerals mining and
electric power generation.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates that affect the
reported amounts of assets, liabilities, revenues and expenses and the
disclosure of contingent assets and liabilities. Actual results could differ
from these estimates.
The accompanying consolidated financial statements and the supporting and
supplemental material are the responsibility of the management of Exxon Mobil
Corporation.
1. Summary of Accounting Policies
Principles of Consolidation. The consolidated financial statements include the
accounts of those significant subsidiaries owned directly or indirectly with
more than 50 percent of the voting rights held by the corporation, and for
which other shareholders do not possess the right to participate in significant
management decisions. Amounts representing the corporation's percentage
interest in the underlying net assets of other significant subsidiaries and
less than majority owned companies in which a significant equity ownership
interest is held, are included in "Investments and advances"; the corporation's
share of the net income of these companies is included in the consolidated
statement of income caption "Earnings from equity interests and other revenue."
Investments in other companies, none of which is significant, are generally
included in "Investments and advances" at cost or less. Dividends from these
companies are included in income as received.
Revenue Recognition. Revenues associated with sales of crude oil, natural gas,
petroleum and chemical products and all other items are recorded when title
passes to the customer.
Revenues from the production of natural gas properties in which the
corporation has an interest with the other producers are recognized on the
basis of the company's net working interest. Differences between actual
production and net working interest volumes are not significant.
Derivative Instruments. As discussed in footnote 14, the corporation makes
limited use of derivative instruments to hedge its exposures associated with
interest rates, foreign currency exchange rates and hydrocarbon prices. Gains
and losses on hedging contracts are recognized concurrent with the recognition
of the economic impact of the underlying exposures using either the accrual or
deferral method of accounting. In order to qualify for hedge accounting, the
derivative instrument must be designated and effective as a hedge.
The accrual method is used for interest rate swaps, cross-currency interest
rate swaps and commodity swaps. Under the accrual method, differentials in the
swapped amounts are recorded as adjustments of the underlying periodic cash
flows that are being hedged. If these swaps are terminated, the gains and
losses are amortized over the original lives of such contracts. The deferral
method is used for futures exchange contracts, forward contracts and commodity
swaps. Gains and losses resulting from changes in value of derivative
instruments are deferred and recognized in the same period as the gains and
losses of the items being hedged.
Cash flow from derivative instruments that qualify for hedge accounting is
included in the same category for cash flow purposes as the item being hedged.
Inventories. Crude oil, products and merchandise inventories are carried at the
lower of current market value or cost (generally determined under the last-in,
first-out method - LIFO). Costs include applicable purchase costs and operating
expenses but not general and administrative expenses or research and
development costs. Inventories of materials and supplies are valued at cost or
less.
Property, Plant and Equipment. Depreciation, depletion and amortization, based
on cost less estimated salvage value of the asset, are primarily determined
under either the unit-of-production method or the straight-line method. Unit-
of-production rates are based on oil, gas and other mineral reserves estimated
to be recoverable from existing facilities. The straight-line method of
depreciation is based on estimated asset service life taking obsolescence into
consideration.
Maintenance and repairs are expensed as incurred. Major renewals and
improvements are capitalized and the assets replaced are retired.
The corporation's upstream activities are accounted for under the "successful
efforts" method. Under this method, costs of productive wells and development
dry holes, both tangible and intangible, as well as productive acreage are
capitalized and amortized on the unit-of-production method. Costs of that
portion of undeveloped acreage likely to be unproductive, based largely on
historical experience, are amortized over the period of exploration. Other
exploratory expenditures, including geophysical costs, other dry hole costs and
annual lease rentals, are expensed as incurred. Exploratory wells that find oil
and gas in an area requiring a major capital expenditure before production
could begin are evaluated annually to assure that commercial quantities of
reserves have been found or that additional exploration work is underway or
planned. Exploratory well costs not meeting either of these tests are charged
to expense.
Oil, gas and other properties held and used by the corporation are reviewed
for impairment whenever events or changes in circumstances indicate that the
carrying amounts may not be recoverable. The corporation estimates the future
undiscounted cash flows of the affected properties to judge the recoverability
of carrying amounts. In general, analyses are based on proved reserves, except
in circumstances where it is probable that additional resources will be
developed and contribute to cash flows in the future.
Environmental Conservation and Site Restoration Costs. Liabilities for
environmental conservation are recorded when it is probable that obligations
have been incurred and the amounts can be reasonably estimated. These
liabilities are not reduced by possible recoveries from third parties, and
projected cash expenditures are not discounted.
Site restoration costs that may be incurred by the corporation at the end of
the operating life of certain of its facilities and properties are reserved
ratably over the asset's productive life.
32
<PAGE>
Foreign Currency Translation. The "functional currency" for translating the
accounts of the majority of downstream and chemical operations outside the U.S.
is the local currency. Local currency is also used for upstream operations that
are relatively self-contained and integrated within a particular country, such
as in Canada, the United Kingdom, Norway and Continental Europe. The U.S.
dollar is used for operations in highly inflationary economies, in Singapore
which is predominantly export oriented and for some upstream operations,
primarily in Malaysia, Indonesia, Nigeria, Equatorial Guinea and the Middle
East. For all operations, gains or losses on remeasuring foreign currency
transactions into functional currency are included in income.
2. Extraordinary Item and Accounting Change
Net income for 2000 included a net after-tax gain of $1,730 million (net of $308
million of income taxes), or $0.49 per common share -- assuming dilution, from
asset divestments that were required as a condition of the regulatory approval
of the Merger. The net after-tax gain on required divestments was reported as an
extraordinary item according to accounting requirements for business
combinations accounted for as a pooling of interests.
Effective as of January 1, 1998, the corporation adopted the American
Institute of Certified Public Accountants' Statement of Position 98-5,
"Reporting on the Costs of Start-up Activities." This statement requires that
costs of start-up activities and organizational costs be expensed as incurred.
The cumulative effect of this accounting change on years prior to 1998 was a
charge of $70 million (net of $70 million income tax effect), or $0.02 per
common share.
3. Merger of Exxon Corporation and Mobil Corporation
On November 30, 1999, a wholly-owned subsidiary of Exxon Corporation (Exxon)
merged with Mobil Corporation (Mobil) so that Mobil became a wholly-owned
subsidiary of Exxon (the "Merger"). At the same time, Exxon changed its name to
Exxon Mobil Corporation (ExxonMobil). Under the terms of the agreement,
approximately 1.0 billion shares of ExxonMobil common stock were issued in
exchange for all the outstanding shares of Mobil common stock based upon an
exchange ratio of 1.32015. Following the exchange, former shareholders of Exxon
owned approximately 70 percent of the corporation, while former Mobil
shareholders owned approximately 30 percent of the corporation. Each outstanding
share of Mobil preferred stock was converted into one share of a new class of
ExxonMobil preferred stock.
As a result of the Merger, the accounts of certain downstream and chemicals
operations jointly controlled by the combining companies have been included in
the consolidated financial statements. These operations were previously
accounted for by Exxon and Mobil as separate companies using the equity method
of accounting.
The Merger was accounted for as a pooling of interests. Accordingly, the
consolidated financial statements give retroactive effect to the Merger, with
all periods presented as if Exxon and Mobil had always been combined. Certain
reclassifications have been made to conform the presentation of Exxon and
Mobil.
The following table sets forth summary data for the separate companies and the
combined amounts for periods prior to the Merger.
Nine Months Year
Ended Ended
Sept. 30 Dec. 31
1999 1998
_______________________________________________________________________________
(millions of dollars)
Revenues
Exxon $ 89,378 $117,772
Mobil 42,782 53,531
Adjustments (1) 6,033 7,987
Eliminations (7,248) (9,648)
------------------
ExxonMobil $130,945 $169,642
==================
Net Income
Exxon $ 3,725 $ 6,370
Mobil 1,901 1,704
------------------
ExxonMobil $ 5,626 $ 8,074
==================
(1) Consolidation of activities previously accounted for using the equity
method of accounting.
As a condition of the approval of the Merger, the U.S. Federal Trade Commission
and the European Commission required that certain property -- primarily
downstream, pipeline and natural gas distribution assets -- be divested. These
assets, with a carrying value of approximately $3 billion, were sold in the year
2000. The net after-tax gain of $1,730 million was reported as an extraordinary
item. The properties have historically earned approximately $200 million per
year.
4. Reorganization Costs
In association with the Merger, $1,406 million pre-tax ($920 million after-tax)
and $625 million pre-tax ($469 million after-tax) of costs were recorded as
merger related expenses in 2000 and 1999, respectively. Cumulative charges
included separation expenses of approximately $1,125 million related to
workforce reductions (approximately 6,000 employees at year-end 2000), plus
implementation and merger closing costs. The separation reserve balance at year
end 2000 of approximately $320 million, is expected to be expended in 2001.
In the first quarter of 1999, the corporation recorded a $120 million after-
tax charge for the non-merger related reorganization of Japanese downstream
operations in its wholly-owned Esso Sekiyu K.K. and 50.1 percent owned General
Sekiyu K.K. affiliates. The reorganization resulted in the reduction of
approximately 700 administrative, financial, logistics and marketing service
employee positions. The Japanese affiliates recorded a combined charge of $216
million (before-tax) to selling, general and administrative expenses for the
employee related costs. Substancially all cash expenditures anticipated in the
restructuring provision have been paid as of the end of 1999. General Sekiyu
also recorded a $211 million (before-tax) charge to
33
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
depreciation and depletion for the write-off of costs associated with the
cancellation of a power plant project at the Kawasaki terminal.
In 1998, Mobil implemented new reorganization programs in Australia and New
Zealand and in Latin America to integrate regional fuels and lubes operations.
These programs resulted in the elimination of approximately 500 positions as
well as asset write-downs in Australia and New Zealand. A provision of $50
million ($41 million after-tax) was recorded in selling, general and
administrative expenses and depreciation and depletion for these programs. In
1998 and 1999, a combination of cash for employee separation benefits and exit
costs and noncash costs for the closure of facilities essentially depleted the
reserve.
In 1997, Mobil and BP announced that their alliance would implement a major
restructuring of its lubricant base oil refining business. This program
resulted in the elimination of approximately 460 positions and in write-downs
and closure of certain facilities and was completed by the end of 1999.
Reserves were recorded in 1997 of about $86 million ($82 million after-tax)
mainly for employee severance costs associated with workforce reductions and
for write-downs and closure of certain facilities. These costs were recorded in
earnings from equity interests and selling, general and administrative
expenses. Cash outlays have been approximately $70 million and non-cash costs
about $20 million. There was no amount remaining in this reserve at December
31, 2000, for this program.
Also in 1997, Mobil commenced two major cost savings initiatives in Asia-
Pacific -- one in Japan in response to the deregulated business environment and
the other in Australia. These programs resulted in the elimination of
approximately 400 positions and the impairment of certain assets. In 1997,
reserves were recorded in the amount of $172 million ($107 million after-tax)
primarily for separation costs related to workforce reductions and for closure
of certain facilities. The provisions were recorded in selling, general and
administrative expenses; operating expenses; earnings from equity interests and
other revenue and depreciation and depletion. At the end of 2000 the reserve
was essentially depleted.
The following table summarizes the activity in the reorganization reserves.
The 1998 opening balance represents accruals for provisions taken in prior
years.
Opening Balance at
Balance Additions Deductions Year End
_______________________________________________________________________________
(millions of dollars)
1998 $300 $ 50 $181 $169
1999 169 563 351 381
2000 381 738 780 339
5. Miscellaneous Financial Information
Research and development costs totaled $564 million in 2000, $630 million in
1999 and $753 million in 1998.
Net income included aggregate foreign exchange transaction losses of $236
million in 2000 and $5 million in 1999, and gains of $20 million in 1998.
In 2000, 1999, and 1998, net income included gains of $175 million, and
losses of $7 million and $8 million, respectively, attributable to the combined
effects of LIFO inventory accumulations and draw-downs. The aggregate
replacement cost of inventories was estimated to exceed their LIFO carrying
values by $6,706 million and $5,898 million at December 31, 2000 and 1999,
respectively.
In 1998, Mobil recorded a charge of $325 million before-tax ($270 million
after-tax) to adjust certain inventories to their market value. Also in 1998, a
charge of $491 million before-tax ($387 million after-tax) was recorded by
Mobil to write down certain oil and gas properties to fair value.
6. Cash Flow Information
The consolidated statement of cash flows provides information about changes in
cash and cash equivalents. Highly liquid investments with maturities of three
months or less when acquired are classified as cash equivalents.
Cash payments for interest were: 2000 -- $729 million, 1999 -- $882 million
and 1998 -- $1,066 million. Cash payments for income taxes were: 2000 -- $8,671
million, 1999 -- $3,805 million and 1998 -- $4,629 million.
7. Additional Working Capital Data Dec. 31 Dec. 31
2000 1999
_______________________________________________________________________________
(millions of dollars)
Notes and accounts receivable
Trade, less reserves of $258 million
and $231 million $ 17,568 $ 14,605
Other, less reserves of $48 million
and $10 million 5,428 4,550
-----------------------
$ 22,996 $19,155
=======================
Notes and loans payable
Bank loans $ 1,244 $ 2,223
Commercial paper 3,761 7,231
Long-term debt due within one year 650 407
Other 506 709
-----------------------
$ 6,161 $10,570
=======================
Accounts payable and accrued liabilities
Trade payables $ 15,357 $13,524
Obligations to equity companies 586 608
Accrued taxes other than income taxes 5,423 6,005
Other 5,389 5,355
-----------------------
$ 26,755 $25,492
=======================
On December 31, 2000, unused credit lines for short-term financing totaled
approximately $6.7 billion. Of this total, $3.3 billion support commercial
paper programs under terms negotiated when drawn. The weighted average interest
rate on short-term borrowings outstanding at December 31, 2000 and 1999 was 6.4
percent and 5.6 percent, respectively.
34
<PAGE>
8. Equity Company Information
The summarized financial information below includes amounts related to certain
less than majority owned companies and majority owned subsidiaries where
minority shareholders possess the right to participate in significant management
decisions (see note 1). These companies are primarily engaged in crude
production, natural gas marketing and refining operations in North America;
natural gas production, natural gas distribution, and downstream operations in
Europe and crude production in Kazakhstan and the Middle East. Also included are
several power generation, petrochemical/lubes manufacturing and chemical
ventures; 1998 and 1999 included amounts related to Mobil's European Fuels joint
venture which was divested as a condition of the Merger approval.
<TABLE>
<CAPTION>
2000 1999 1998
_____________________________________________________
ExxonMobil ExxonMobil ExxonMobil
Equity Company Financial Summary Total Share Total Share Total Share
__________________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Total revenues
Percent of revenues from companies included in the ExxonMobil
consolidation was 7% in 1998, 8% in 1999 and 11% in 2000 $81,371 $32,452 $94,534 $32,124 $76,552 $24,740
-----------------------------------------------------
Income before income taxes $ 7,632 $ 3,092 $ 4,100 $ 2,095 $ 4,104 $ 2,002
Less: Related income taxes (1,382) (658) (734) (449) (1,071) (492)
-----------------------------------------------------
Net income $ 6,250 $ 2,434 $ 3,366 $ 1,646 $ 3,033 $ 1,510
=====================================================
Current assets $28,784 $11,479 $21,518 $ 7,739 $19,037 $ 6,645
Property, plant and equipment, less accumulated depreciation 36,553 13,733 44,213 15,509 40,268 15,221
Other long-term assets 6,656 2,979 4,806 2,106 3,529 1,449
-----------------------------------------------------
Total assets $71,993 $28,191 $70,537 $25,354 $62,834 $23,315
-----------------------------------------------------
Short-term debt $ 2,636 $ 1,093 $ 2,856 $ 1,129 $ 2,628 $ 1,048
Other current liabilities 25,377 10,357 18,129 6,324 16,367 5,574
Long-term debt 11,116 4,094 13,486 3,978 11,316 3,488
Other long-term liabilities 7,054 3,273 5,372 2,598 4,974 2,362
Advances from shareholders 8,485 2,510 3,636 1,919 3,734 2,017
-----------------------------------------------------
Net assets $17,325 $ 6,864 $27,058 $ 9,406 $23,815 $ 8,826
=====================================================
</TABLE>
<TABLE>
<S> <C> <C>
9. Investments and Advances Dec. 31 Dec. 31
2000 1999
__________________________________________________________________________________________________________________________
(million of dollars)
Companies carried at equity in underlying assets
Investments $ 6,864 $ 9,406
Advances 2,510 1,919
-----------------
$ 9,374 $11,325
Companies carried at cost or less and stock investments carried at fair value 1,230 964
-----------------
$10,604 $12,289
Long-term receivables and miscellaneous investments at cost or less 2,014 2,255
-----------------
Total $12,618 $14,544
=================
</TABLE>
35
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
10. Investment in Property, Plant and Equipment Dec. 31, 2000 Dec. 31, 1999
________________________________________________
Cost Net Cost Net
_________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C>
Petroleum and natural gas
Upstream $106,287 $ 45,731 $ 106,067 $ 48,100
Downstream 51,862 26,730 54,772 28,974
------------------------------------------------
Total petroleum and natural gas $158,149 $ 72,461 $ 160,839 $ 77,074
Chemicals 17,860 9,935 17,564 9,969
Other 11,737 7,433 10,809 7,000
------------------------------------------------
Total $187,746 $ 89,829 $ 189,212 $ 94,043
================================================
</TABLE>
Accumulated depreciation and depletion totaled $97,917 million at the end of
2000 and $95,169 million at the end of 1999. Interest capitalized in 2000, 1999
and 1998 was $641 million, $595 million and $545 million, respectively.
________________________________________________________________________________
11. Leased Facilities
At December 31, 2000, the corporation and its consolidated subsidiaries held
non-cancelable operating charters and leases covering drilling equipment,
tankers, service stations and other properties with minimum lease commitments
as indicated in the table.
Net rental expenditures for 2000, 1999 and 1998 totaled $1,935 million,
$2,172 million and $2,760 million, respectively, after being reduced by related
rental income of $195 million, $317 million and $331 million, respectively.
Minimum rental expenditures totaled $1,992 million in 2000, $2,311 million in
1999 and $2,910 million in 1998.
Minimum Related
commitment rental income
________________________________________________________________________________
(millions of dollars)
2001 $ 1,219 $ 76
2002 814 65
2003 604 44
2004 462 29
2005 347 22
2006 and beyond 1,959 104
________________________________________________________________________________
12. Capital
At the effective time of the merger of Exxon and Mobil, the authorized common
stock of ExxonMobil was increased from three billion shares to 4.5 billion
shares. Under the terms of the merger agreement, approximately 1.0 billion
shares of ExxonMobil common stock were issued in exchange for all of the
outstanding shares of Mobil's common stock based upon an exchange ratio of
1.32015 ExxonMobil shares for each Mobil share. Mobil's common stock accounted
for as treasury stock was cancelled at the effective time of the merger.
In 1989, Mobil sold 206 thousand shares of a new issue of Series B
Convertible Preferred Stock to its employee stock ownership plan (Mobil ESOP)
trust for $3,887.50 per share. Each preferred share was convertible into 100
shares of Mobil common stock. The proceeds of the issuance were used by Mobil
for general corporate purposes. Dividends were cumulative and payable in an
amount per share equal to $300 per annum. In connection with the merger, each
outstanding share of Mobil's Series B Convertible Preferred Stock was converted
into one share of ExxonMobil Class B Preferred Stock with similar terms. Each
share of ExxonMobil Class B Preferred Stock was convertible into 132.015 shares
of ExxonMobil common stock. In 1999 and 1998, Mobil Series B Convertible
Preferred Stock totaling 6 thousand shares in each year were redeemed. In 1999,
after the merger, 159 thousand shares of ExxonMobil Class B Preferred Stock
totaling $618 million were converted to ExxonMobil common stock. No shares of
Class B Preferred Stock remain outstanding.
36
<PAGE>
In 1989, Exxon sold 16.3 million shares of a new issue of convertible Class A
Preferred Stock to its leveraged employee stock ownership plan (Exxon LESOP)
trust for $61.50 per share. The proceeds of the issuance were used by Exxon for
general corporate purposes. If the common share price exceeded $30.75, one
share of Exxon Class A Preferred Stock was convertible into two shares of
common stock. If the price was $30.75 or less, one share of preferred stock was
convertible into common shares having a value of $61.50. Dividends were
cumulative and payable in an amount per share equal to $4.680 per annum. In
1999 and 1998, 1.7 million and 1.4 million shares of Exxon Class A Preferred
Stock totaling $105 million and $85 million, respectively, were converted to
common stock. At year-end 1999, no shares of Class A Preferred Stock remained
outstanding.
In 1989, $1,800 million of benefit plan related balances were recorded as debt
and as a reduction to shareholders' equity, representing Exxon and Mobil
guaranteed borrowings by the Mobil ESOP and Exxon LESOP trusts to purchase
preferred stock. As the debt is repaid and common shares are earned by
employees, the benefit plan related balances are being extinguished. Preferred
dividends of $36 million and $60 million were paid during 1999 and 1998,
respectively.
The table below summarizes the earnings per share calculations.
<TABLE>
<S> <C> <C> <C>
2000 1999 1998
________________________
Net income per common share
- - - - - - ---------------------------
Income before extraordinary item and cumulative effect of accounting change (millions of dollars) $15,990 $7,910 $ 8,144
Less: Preferred stock dividends -- (36) (60)
------------------------
Income available to common shares $15,990 $7,874 $ 8,084
========================
Weighted average number of common shares outstanding (millions of shares) 3,477 3,453 3,468
Net income per common share
Before extraordinary item and cumulative effect of accounting change $ 4.60 $ 2.28 $ 2.33
Extraordinary gain, net of income tax 0.50 -- --
Cumulative effect of accounting change -- -- (0.02)
------------------------
Net income $ 5.10 $ 2.28 $ 2.31
========================
Net income per common share -- assuming dilution
- - - - - - ------------------------------------------------
Income before extraordinary item and cumulative effect of accounting change (millions of dollars) $15,990 $7,910 $ 8,144
Adjustment for assumed dilution (8) 1 (7)
------------------------
Income available to common shares $15,982 $7,911 $ 8,137
========================
Weighted average number of common shares outstanding (millions of shares) 3,477 3,453 3,468
Plus: Issued on assumed exercise of stock options 40 44 39
Plus: Assumed conversion of preferred stock -- 21 26
------------------------
Weighted average number of common shares outstanding 3,517 3,518 3,533
========================
Net income per common share
Before extraordinary item and cumulative effect of accounting change $ 4.55 $ 2.25 $ 2.30
Extraordinary gain, net of income tax 0.49 -- --
Cumulative effect of accounting change -- -- (0.02)
------------------------
Net income $ 5.04 $ 2.25 $ 2.28
========================
Dividends paid per common share $ 1.760 $1.687 $ 1.666
</TABLE>
37
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
13. Employee Stock Ownership Plans
In 1989, the Exxon leveraged employee stock ownership plan (Exxon LESOP) trust
borrowed $1,000 million under the terms of notes guaranteed by Exxon maturing
between 1990 and 1999. As further described in note 12, the Exxon LESOP trust
used the proceeds of the borrowing to purchase shares of Exxon's convertible
Class A Preferred Stock. The final Exxon LESOP note matured in 1999 with the
final principal payment of the outstanding debt. All remaining shares of Exxon
Class A Preferred Stock were converted to ExxonMobil common shares.
In 1989, the Mobil Oil Corporation employee stock ownership plan (Mobil ESOP)
trust borrowed $800 million under the terms of notes and debentures guaranteed
by Mobil. As further described in note 12, the trust used the proceeds of the
borrowing to purchase shares of Mobil's Series B Convertible Preferred Stock
which upon the Merger were converted into shares of ExxonMobil Class B
Preferred Stock with similar terms. By year-end 1999, all outstanding shares of
Class B Preferred Stock were converted to ExxonMobil common shares.
The Exxon LESOP and Mobil ESOP were merged in late 1999 to create the
ExxonMobil ESOP. Employees eligible to participate in ExxonMobil's Savings Plan
may elect to participate in the ExxonMobil ESOP. Corporate contributions to the
plan and dividends are used to make principal and interest payments on the
notes and debentures. As contributions and dividends are credited, common
shares are allocated to participants' accounts. When debt service exceeded
dividends, ExxonMobil funded the excess. The excess for the ExxonMobil ESOP was
$15 million, $19 million, and $15 million in 2000, 1999, and 1998,
respectively.
Accounting for the plans has followed the principles which were in effect for
the respective plans when they were established. The amount of compensation
expense related to the plans and recorded by the corporation during the periods
was not significant. The ExxonMobil ESOP trust held 59.9 million shares of
ExxonMobil common stock at the end of 1999 and 54.6 million shares at the end
of 2000.
14. Financial Instruments
The fair value of financial instruments is determined by reference to various
market data and other valuation techniques as appropriate. Long-term debt is
the only category of financial instruments whose fair value differs materially
from the recorded book value. The estimated fair value of total long-term debt,
including capitalized lease obligations, at December 31, 2000 and 1999, was
$8.0 billion and $8.9 billion, respectively, as compared to recorded book
values of $7.3 billion and $8.4 billion.
The corporation's size, geographic diversity and the complementary nature of
the upstream, downstream and chemicals businesses mitigate the corporation's
risk from changes in interest rate, foreign currency rate and commodity prices.
As a result, the corporation makes limited use of derivatives to offset
exposures arising from existing transactions. Derivative instruments are not
held for trading purposes nor do they have leveraged features. In addition,
they are either purchased or sold over authorized exchanges or with
counterparties of high credit standing. As a result of the above factors, the
corporation's exposure to credit risks and market risks from derivative
activities is negligible.
The notional principal amounts of derivative financial instruments at December
31, are as follows:
At December 31: 2000 1999
_______________ ____ ____
(millions of dollars)
Debt-related instruments $ 970 $2,111
Nondebt-related foreign currency
exchange rate instruments 63 4,245
Commodity financial instruments
requiring cash settlement 1,367 1,988
-------------------
Total $2,400 $8,344
===================
38
<PAGE>
15. Long-Term Debt
At December 31, 2000, long-term debt consisted of $6,630 million due in U.S.
dollars and $650 million representing the U.S. dollar equivalent at year-end
exchange rates of amounts payable in foreign currencies. These amounts exclude
that portion of long-term debt, totaling $650 million, which matures within one
year and is included in current liabilities. The amounts of long-term debt
maturing, together with sinking fund payments required, in each of the four
years after December 31, 2001, in millions of dollars, are: 2002 -- $368, 2003
- - - - - - -- $832, 2004 -- $2,245 and 2005 -- $359. Certain of the borrowings described
may from time to time be assigned to other ExxonMobil affiliates. At
December 31, 2000, the corporation's unused long-term credit lines were not
material.
The total outstanding balance of defeased debt at year-end 2000 was $480
million. Summarized long-term borrowings at year-end 2000 and 1999 were as
follows:
2000 1999
_______________________________________________________________________________
(millions of dollars)
Exxon Mobil Corporation
7.45% Guaranteed notes due 2001 $ -- $ 246
Guaranteed zero coupon notes due 2004
-- Face value ($1,146) net of
unamortized discount 749 671
Exxon Capital Corporation
6.0% Guaranteed notes due 2005 106 246
6.125% Guaranteed notes due 2008 175 250
SeaRiver Maritime Financial Holdings, Inc.
Guaranteed debt securities due 2002-2011(1) 115 122
Guaranteed deferred interest
debentures due 2012
-- Face value ($771) net of unamortized
discount plus accrued interest 811 728
Imperial Oil Limited
8.3% notes due 2001 -- 200
Variable rate notes due 2004(2) 600 600
Mobil Oil Canada, Ltd.
3.0% Swiss franc debentures due 2003(3) 331 331
5.0% U.S. dollar Eurobonds due 2004(4) 274 300
Mobil Producing Nigeria Unlimited
8.625% notes due 2002-2006 188 229
Mobil Corporation
8.625% debentures due 2021 247 247
7.625% debentures due 2033 203 213
Industrial revenue bonds due 2003-2033(5) 1,469 1,429
ESOP Trust notes due 2002-2003 100 351
Other U.S. dollar obligations(6) 1,062 1,045
Other foreign currency obligations 598 924
Capitalized lease obligations(7) 252 270
-----------------
Total long-term debt $7,280 $8,402
=================
1. Average effective interest rate of 6.4% in 2000 and 5.3% in 1999.
2. Average effective interest rate of 6.6% in 2000 and 5.3% in 1999.
3. Swapped into floating rate U.S.$ debt.
4. Swapped principally into floating rate debt.
5. Average effective interest rate of 4.5% in 2000 and 4.0% in 1999.
6. Average effective interest rate of 7.8% in 2000 and 7.6% in 1999.
7. Average imputed interest rate of 7.2% in 2000 and 7.2% in 1999.
39
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Condensed consolidating financial information related to guaranteed securities
issued by subsidiaries
Exxon Mobil Corporation has fully and unconditionally guaranteed the 6.0%
notes due 2005 and the 6.125% notes due 2008 of Exxon Capital Corporation and
the deferred interest debentures due 2012 and the debt securities due 2000-2011
of SeaRiver Maritime Financial Holdings, Inc. Exxon Capital Corporation and
SeaRiver Maritime Financial Holdings, Inc. are 100 percent owned subsidiaries
of Exxon Mobil Corporation.
The following condensed consolidating financial information is provided for
Exxon Mobil Corporation, as guarantor, and for Exxon Capital Corporation and
SeaRiver Maritime Financial Holdings, Inc., as issuers, as an alternative to
providing separate financial statements for the issuers. The accounts of Exxon
Mobil Corporation, Exxon Capital Corporation and SeaRiver Maritime Financial
Holdings, Inc. are presented utilizing the equity method of accounting for
investments in subsidiaries.
<TABLE>
<CAPTION>
Exxon Mobil SeaRiver Consolidating
Corporation Exxon Maritime and
Parent Capital Financial All Other Eliminating
Guarantor Corporation Holdings, Inc. Subsidiaries Adjustments Consolidated
_________________________________________________________________________________
(millions of dollars)
Condensed consolidated statement of income for twelve months ended December 31, 2000
____________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Revenue
Sales and other operating revenue,
including excise taxes $ 36,211 $ -- $ -- $ 192,228 $ -- $ 228,439
Earnings from equity interests and other revenue 14,399 -- 35 3,577 (13,702) 4,309
Intercompany revenue 4,148 997 90 92,832 (98,067) --
---------------------------------------------------------------------------------
Total revenue 54,758 997 125 288,637 (111,769) 232,748
---------------------------------------------------------------------------------
Costs and other deductions
Crude oil and product purchases 22,790 -- -- 173,012 (86,851) 108,951
Operating expenses 5,787 3 1 17,051 (4,707) 18,135
Selling, general and administrative expenses 1,978 -- -- 10,203 (137) 12,044
Depreciation and depletion 1,510 5 3 6,612 -- 8,130
Exploration expenses, including dry holes 115 -- -- 821 -- 936
Merger related expenses 402 -- -- 1,171 (167) 1,406
Interest expense 1,449 916 116 4,313 (6,205) 589
Excise taxes 2,614 -- -- 19,742 -- 22,356
Other taxes and duties 15 -- -- 32,693 -- 32,708
Income applicable to minority and
preferred interests -- -- -- 412 -- 412
---------------------------------------------------------------------------------
Total costs and other deductions 36,660 924 120 266,030 (98,067) 205,667
---------------------------------------------------------------------------------
Income before income taxes 18,098 73 5 22,607 (13,702) 27,081
Income taxes 2,108 20 (10) 8,973 -- 11,091
---------------------------------------------------------------------------------
Income before extraordinary item and
accounting change 15,990 53 15 13,634 (13,702) 15,990
Extraordinary gain, net of income tax 1,730 -- -- 962 (962) 1,730
Cumulative effect of accounting change -- -- -- -- -- --
---------------------------------------------------------------------------------
Net income $ 17,720 $ 53 $ 15 $ 14,596 $ (14,664) $ 17,720
=================================================================================
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Exxon Mobil SeaRiver Consolidating
Corporation Exxon Maritime and
Parent Capital Financial All Other Eliminating
Guarantor Corporation Holdings, Inc. Subsidiaries Adjustments Consolidated
_______________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Condensed consolidated statement of income for twelve months ended December 31, 1999
____________________________________________________________________________________
Revenue
Sales and other operating revenue, including
excise taxes $25,758 $ -- $ -- $156,771 $ -- $182,529
Earnings from equity interests and other revenue 7,585 37 31 2,102 (6,757) 2,998
Intercompany revenue 1,585 660 61 35,825 (38,131) --
--------------------------------------------------------------------------
Total revenue 34,928 697 92 194,698 (44,888) 185,527
--------------------------------------------------------------------------
Costs and other deductions
Crude oil and product purchases 13,926 -- -- 97,296 (34,211) 77,011
Operating expenses 4,669 3 1 13,285 (1,152) 16,806
Selling, general and administrative expenses 2,230 -- -- 10,908 (4) 13,134
Depreciation and depletion 1,396 5 3 6,900 -- 8,304
Exploration expenses, including dry holes 110 -- -- 1,136 -- 1,246
Merger related expenses 479 -- -- 146 -- 625
Interest expense 1,150 561 95 1,653 (2,764) 695
Excise taxes 2,846 -- -- 18,800 -- 21,646
Other taxes and duties 14 -- -- 34,751 -- 34,765
Income applicable to minority and preferred
interests -- -- -- 145 -- 145
--------------------------------------------------------------------------
Total costs and other deductions 26,820 569 99 185,020 (38,131) 174,377
--------------------------------------------------------------------------
Income before income taxes 8,108 128 (7) 9,678 (6,757) 11,150
Income taxes 198 28 (13) 3,027 -- 3,240
--------------------------------------------------------------------------
Income before extraordinary item and accounting
change 7,910 100 6 6,651 (6,757) 7,910
Extraordinary gain, net of income tax -- -- -- -- -- --
Cumulative effect of accounting change -- -- -- -- -- --
--------------------------------------------------------------------------
Net income $ 7,910 $ 100 $ 6 $ 6,651 $ (6,757) $ 7,910
==========================================================================
Condensed consolidated statement of income for twelve months ended December 31, 1998
____________________________________________________________________________________
Revenue
Sales and other operating revenue, including
excise taxes $22,508 $ -- $ -- $143,119 $ -- $165,627
Earnings from equity interests and other revenue 8,256 207 36 3,372 (7,856) 4,015
Intercompany revenue 1,199 1,221 60 20,448 (22,928) --
--------------------------------------------------------------------------
Total revenue 31,963 1,428 96 166,939 (30,784) 169,642
--------------------------------------------------------------------------
Costs and other deductions
Crude oil and product purchases 10,434 -- -- 69,729 (18,018) 62,145
Operating expenses 5,249 3 1 13,536 (1,123) 17,666
Selling, general and administrative expenses 1,902 (3) -- 11,026 -- 12,925
Depreciation and depletion 1,381 5 3 6,966 -- 8,355
Exploration expenses, including dry holes 239 -- -- 1,267 -- 1,506
Merger related expenses -- -- -- -- -- --
Interest expense 1,513 1,548 91 1,203 (3,787) 568
Excise taxes 2,743 -- -- 18,183 -- 20,926
Other taxes and duties 20 -- -- 33,183 -- 33,203
Income applicable to minority and preferred
interests -- -- -- 265 -- 265
--------------------------------------------------------------------------
Total costs and other deductions 23,481 1,553 95 155,358 (22,928) 157,559
--------------------------------------------------------------------------
Income before income taxes 8,482 (125) 1 11,581 (7,856) 12,083
Income taxes 338 (29) (13) 3,643 -- 3,939
--------------------------------------------------------------------------
Income before extraordinary item and accounting
change 8,144 (96) 14 7,938 (7,856) 8,144
Extraordinary gain, net of income tax -- -- -- -- -- --
Cumulative effect of accounting change (70) -- -- (39) 39 (70)
--------------------------------------------------------------------------
Net income $ 8,074 $ (96) $ 14 $ 7,899 $ (7,817) $ 8,074
==========================================================================
</TABLE>
41
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Condensed consolidating financial information related to guaranteed securities
issued by subsidiaries
<TABLE>
<CAPTION>
Exxon Mobil SeaRiver Consolidating
Corporation Exxon Maritime and
Parent Capital Financial All Other Eliminating
Guarantor Corporation Holdings, Inc. Subsidiaries Adjustments Consolidated
______________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Condensed consolidated balance sheet for year ended December 31, 2000
_____________________________________________________________________
Cash and cash equivalents $ 4,235 $ -- $ -- $ 2,845 $ -- $ 7,080
Notes and accounts receivable -- net 4,427 -- -- 18,569 -- 22,996
Inventories 1,102 -- -- 7,202 -- 8,304
Other current assets 262 -- 14 1,743 -- 2,019
---------------------------------------------------------------------------
Total current assets 10,026 -- 14 30,359 -- 40,399
Investments and advances 79,589 -- 408 303,090 (370,469) 12,618
Property, plant and equipment -- net 18,559 113 9 71,148 -- 89,829
Other long-term assets 508 2 150 5,494 -- 6,154
Intercompany receivables 9,339 19,124 1,355 212,790 (242,608) --
---------------------------------------------------------------------------
Total assets $118,021 $19,239 $1,936 $622,881 $(613,077) $149,000
===========================================================================
Notes and loans payable $ 60 $ 74 $ 7 $ 6,020 $ -- $ 6,161
Accounts payable and accrued liabilities 3,918 8 2 22,827 -- 26,755
Income taxes payable 902 9 -- 4,364 -- 5,275
---------------------------------------------------------------------------
Total current liabilities 4,880 91 9 33,211 -- 38,191
Long-term debt 1,209 281 925 4,865 -- 7,280
Deferred income tax liabilities 3,334 31 292 12,785 -- 16,442
Other long-term liabilities 4,428 9 -- 11,893 -- 16,330
Intercompany payables 33,413 17,965 412 190,818 (242,608) --
---------------------------------------------------------------------------
Total liabilities 47,264 18,377 1,638 253,572 (242,608) 78,243
Earnings reinvested 86,652 56 (96) 36,946 (36,906) 86,652
Other shareholders' equity (15,895) 806 394 332,363 (333,563) (15,895)
---------------------------------------------------------------------------
Total shareholders' equity 70,757 862 298 369,309 (370,469) 70,757
---------------------------------------------------------------------------
Total liabilities and shareholders' equity $118,021 $19,239 $1,936 $622,881 $(613,077) $149,000
===========================================================================
Condensed consolidated balance sheet for year ended December 31,1999
____________________________________________________________________
Cash and cash equivalents $ 112 $ -- $ -- $ 1,576 $ -- $ 1,688
Notes and accounts receivable -- net 2,968 -- -- 16,187 -- 19,155
Inventories 1,121 -- -- 7,371 -- 8,492
Other current assets 105 2 19 1,680 -- 1,806
---------------------------------------------------------------------------
Total current assets 4,306 2 19 26,814 -- 31,141
Investments and advances 68,065 -- 411 94,273 (148,205) 14,544
Property, plant and equipment -- net 19,037 118 12 74,876 -- 94,043
Other long-term assets 530 2 128 4,133 -- 4,793
Intercompany receivables 7,956 11,981 1,243 59,436 (80,616) --
---------------------------------------------------------------------------
Total assets $ 99,894 $12,103 $1,813 $259,532 $(228,821) $144,521
===========================================================================
Notes and loans payable $ 1,012 $ 57 $ 7 $ 9,494 $ -- $ 10,570
Accounts payable and accrued liabilities 4,900 14 2 20,576 -- 25,492
Income taxes payable 435 -- -- 2,236 -- 2,671
---------------------------------------------------------------------------
Total current liabilities 6,347 71 9 32,306 -- 38,733
Long-term debt 1,419 495 849 5,639 -- 8,402
Deferred income tax liabilities 3,232 33 289 12,697 -- 16,251
Other long-term liabilities 5,080 9 -- 12,580 -- 17,669
Intercompany payables 20,350 10,685 385 49,196 (80,616) --
---------------------------------------------------------------------------
Total liabilities 36,428 11,293 1,532 112,418 (80,616) 81,055
Earnings reinvested 75,055 4 (111) 28,258 (28,151) 75,055
Other shareholders' equity (11,589) 806 392 118,856 (120,054) (11,589)
---------------------------------------------------------------------------
Total shareholders' equity 63,466 810 281 147,114 (148,205) 63,466
---------------------------------------------------------------------------
Total liabilities and shareholders' equity $ 99,894 $12,103 $1,813 $259,532 $(228,821) $144,521
===========================================================================
</TABLE>
42
<PAGE>
<TABLE>
<CAPTION>
Exxon Mobil SeaRiver Consolidating
Corporation Exxon Maritime and
Parent Capital Financial All Other Eliminating
Guarantor Corporation Holdings, Inc. Subsidiaries Adjustments Consolidated
______________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Condensed consolidated statement of cash flows for twelve months ended December 31, 2000
________________________________________________________________________________________
Cash provided by/(used in) operating activities $ 7,704 $ 61 $ 94 $ 16,063 $ (985) $ 22,937
--------------------------------------------------------------------------
Cash flows from investing activities
Additions to property, plant and equipment (1,832) -- -- (6,614) -- (8,446)
Sales of long-term assets 1,088 -- -- 4,682 -- 5,770
Net intercompany investing 6,386 (7,143) (114) (6,285) 7,156 --
All other investing, net (26) -- -- (596) -- (622)
--------------------------------------------------------------------------
Net cash provided by/(used in) investing
activities 5,616 (7,143) (114) (8,813) 7,156 (3,298)
--------------------------------------------------------------------------
Cash flows from financing activities
Additions to short- and long-term debt 23 -- -- 715 -- 738
Reductions in short- and long-term debt (247) (214) (7) (2,846) -- (3,314)
Additions/(reductions) in debt with less than
90 day maturity (990) 16 -- (2,155) -- (3,129)
Cash dividends (6,123) -- -- (985) 985 (6,123)
Common stock acquired (2,352) -- -- -- -- (2,352)
Net intercompany financing activity -- 7,280 27 (151) (7,156) --
All other financing, net 493 -- -- (478) -- 15
--------------------------------------------------------------------------
Net cash provided by/(used in) financing
activities (9,196) 7,082 20 (5,900) (6,171) (14,165)
--------------------------------------------------------------------------
Effects of exchange rate changes on cash -- -- -- (82) -- (82)
--------------------------------------------------------------------------
Increase/(decrease) in cash and cash equivalents $ 4,124 $ -- $ -- $ 1,268 $ -- $ 5,392
==========================================================================
Condensed consolidated statement of cash flows for twelve months ended December 31, 1999
________________________________________________________________________________________
Cash provided by/(used in) operating activities $ 5,056 $ 78 $ 104 $ 12,916 $(3,141) $ 15,013
--------------------------------------------------------------------------
Cash flows from investing activities
Additions to property, plant and equipment (1,968) -- -- (8,881) -- (10,849)
Sales of long-term assets 294 -- -- 678 -- 972
Net intercompany investing 2,982 (751) (95) (6,468) 4,332 --
All other investing, net (31) -- -- (1,077) -- (1,108)
--------------------------------------------------------------------------
Net cash provided by/(used in) investing
activities 1,277 (751) (95) (15,748) 4,332 (10,985)
--------------------------------------------------------------------------
Cash flows from financing activities
Additions to short- and long-term debt 2 -- -- 2,322 -- 2,324
Reductions in short- and long-term debt (2) -- (7) (2,691) -- (2,700)
Additions/(reductions) in debt with less than
90 day maturity (117) 10 -- 2,317 -- 2,210
Cash dividends (5,872) (2,000) -- (1,141) 3,141 (5,872)
Common stock acquired (670) -- -- -- -- (670)
Net intercompany financing activity -- 2,663 (2) 1,671 (4,332) --
All other financing, net 348 -- -- (419) -- (71)
--------------------------------------------------------------------------
Net cash provided by/(used in) financing
activities (6,311) 673 (9) 2,059 (1,191) (4,779)
--------------------------------------------------------------------------
Effects of exchange rate changes on cash -- -- -- 53 -- 53
--------------------------------------------------------------------------
Increase/(decrease) in cash and cash equivalents $ 22 $ -- $ -- $ (720) $ -- $ (698)
==========================================================================
</TABLE>
43
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Condensed consolidating financial information related to guaranteed securities
issued by subsidiaries
<TABLE>
<CAPTION>
Exxon Mobil SeaRiver Consolidating
Corporation Exxon Maritime and
Parent Capital Financial All Other Eliminating
Guarantor Corporation Holdings, Inc. Subsidiaries Adjustments Consolidated
______________________________________________________________________________
(millions of dollars)
Condensed consolidated statement of cash flows for twelve months ended December 31, 1998
________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Cash provided by/(used in) operating activities $ 13,969 $ (30) $ 99 $ 16,577 $(14,179) $ 16,436
-------------------------------------------------------------------------------
Cash flows from investing activities
Additions to property, plant and equipment (2,157) -- -- (10,573) -- (12,730)
Sales of long-term assets 181 -- -- 1,703 -- 1,884
Net intercompany investing (6,492) 8,172 (95) 4,597 (6,182) --
All other investing, net (26) -- -- (1,110) -- (1,136)
-------------------------------------------------------------------------------
Net cash provided by/(used in) investing
activities (8,494) 8,172 (95) (5,383) (6,182) (11,982)
-------------------------------------------------------------------------------
Cash flows from financing activities
Additions to short- and long-term debt 5 -- -- 2,309 -- 2,314
Reductions in short- and long-term debt (2) -- (7) (2,471) -- (2,480)
Additions/(reductions) in debt with less than
90 day maturity 1,069 44 -- 1,271 -- 2,384
Cash dividends (5,843) (1,950) -- (12,229) 14,179 (5,843)
Common stock acquired (3,547) -- -- -- -- (3,547)
Net intercompany financing activity -- (6,236) 3 51 6,182 --
All other financing, net 507 -- -- (471) -- 36
-------------------------------------------------------------------------------
Net cash provided by/(used in) financing
activities (7,811) (8,142) (4) (11,540) 20,361 (7,136)
-------------------------------------------------------------------------------
Effects of exchange rate changes on cash -- -- -- 23 -- 23
-------------------------------------------------------------------------------
Increase/(decrease) in cash and cash equivalents $ (2,336) $ -- $ -- $ (323) $ -- $ (2,659)
===============================================================================
</TABLE>
44
<PAGE>
16. Incentive Program
The 1993 Incentive Program provides for grants of stock options, stock
appreciation rights (SARs), restricted stock and other forms of award. Awards
may be granted over a 10-year period to eligible employees of the corporation
and those affiliates at least 50 percent owned. The number of shares of stock
which may be awarded each year under the 1993 Incentive Program may not exceed
seven tenths of one percent (0.7%), of the total number of shares of common
stock of the corporation outstanding (excluding shares held by the corporation)
on December 31 of the preceding year. If the total number of shares effectively
granted in any year is less than the maximum number of shares allowable, the
balance may be carried over thereafter. Outstanding awards are subject to
certain forfeiture provisions contained in the program or award instrument.
Options and SARs may be granted at prices not less than 100 percent of
market value on the date of grant and have a maximum life of 10 years. Most of
the options and SARs normally first become exercisable one year following the
date of grant.
On the closing of the merger on November 30, 1999, outstanding options and
SARs granted by Mobil under its 1995 Incentive Compensation and Stock
Ownership Plan and prior plans were assumed by ExxonMobil and converted into
rights to acquire ExxonMobil common stock with adjustments to reflect the
exchange ratio. No further awards may be granted under the former Mobil plans.
Shares available for granting under the 1993 Incentive Program were 59,536
thousand at the beginning of 2000 and 42,303 thousand at the end of 2000. At
December 31, 1999 and 2000, respectively, 1,077 thousand and 1,219 thousand
shares of restricted common stock were outstanding.
Statement of Financial Accounting Standards No. 123, "Accounting for Stock-
Based Compensation," was implemented in January 1996. As permitted by the
Standard, ExxonMobil retained its prior method of accounting for stock
compensation. If the provisions of Statement No. 123 had been adopted, net
income and earnings per share (on both a basic and diluted basis) would have
been reduced by $296 million, or $0.08 per share in 2000; $149 million, or
$0.04 per share in 1999 and $134 million, or $0.04 per share in 1998. For the
ExxonMobil plan, the average fair value of each option granted during 2000,
1999, and 1998 was $20.36, $19.70 and $12.80, respectively. The fair value was
estimated at the grant date using an option-pricing model with the following
weighted average assumptions for 2000, 1999 and 1998, respectively: risk-free
interest rates of 5.5 percent, 6.2 percent and 4.8 percent; expected life of 6
years for all years; volatility of 16 percent, 15 percent and 13 percent and a
dividend yield of 2.0 percent, 2.1 percent and 2.3 percent. For the Mobil
plans, the average fair value of each Mobil option granted during 1999 and
1998 was $17.02 and $13.05, respectively. The fair value was estimated at the
grant date using an option-pricing model with the following weighted average
assumptions for 1999 and 1998, respectively: risk-free interest rates of 5.2
percent and 5.7 percent; expected life of 5 years for both years; volatility
of 20 percent and 18 percent and a dividend yield of 2.7 percent and 3.2
percent.
Changes that occurred in options outstanding in 2000, 1999 and 1998
(including the former Mobil plans) are summarized below (shares in thousands):
<TABLE>
<CAPTION>
2000 1999 1998
________________________________________________________________________________
Avg. Exercise Avg. Exercise Avg. Exercise
Shares Price Shares Price Shares Price
________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C>
Outstanding at beginning of year 121,116 $49.62 110,609 $42.03 112,341 $36.42
Granted 18,112 90.37 22,099 78.00 16,646 65.89
Exercised (14,357) 32.70 (11,250) 30.31 (17,907) 28.65
Expired/Canceled (531) 74.25 (342) 66.18 (471) 55.41
------- ------- -------
Outstanding at end of year 124,340 57.40 121,116 49.62 110,609 42.03
Exercisable at end of year 97,572 51.89 87,472 42.16 83,258 36.76
</TABLE>
The following table summarizes information about stock options outstanding,
including those from former Mobil plans, at December 31, 2000 (shares in
thousands):
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
_____________________________________________________________________ __________________________
Exercise Price Avg. Remaining Avg. Exercise Avg. Exercise
Range Shares Contractual Life Price Shares Price
_____________________________________________________________________ __________________________
<S> <C> <C> <C> <C> <C>
$23.27-33.07 30,800 3.2 years $29.77 30,800 $29.77
38.12-55.42 33,329 6.2 years 45.80 29,819 44.84
58.36-90.44 60,211 8.7 years 77.96 36,953 76.02
------ ------
Total 124,340 6.7 years 57.40 97,572 51.89
</TABLE>
45
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
17. Litigation and Other Contingencies
A number of lawsuits, including class actions, were brought in various courts
against Exxon Mobil Corporation and certain of its subsidiaries relating to the
accidental release of crude oil from the tanker Exxon Valdez in 1989.
Essentially all of these lawsuits have now been resolved or are subject to
appeal.
On September 24, 1996, the United States District Court for the District of
Alaska entered a judgment in the amount of $5.058 billion in the Exxon Valdez
civil trial that began in May 1994. The District Court awarded approximately
$19.6 million in compensatory damages to fisher plaintiffs, $38 million in
prejudgment interest on the compensatory damages and $5 billion in punitive
damages to a class composed of all persons and entities who asserted claims for
punitive damages from the corporation as a result of the Exxon Valdez
grounding. The District Court also ordered that these awards shall bear
interest from and after entry of the judgment. The District Court stayed
execution on the judgment pending appeal based on a $6.75 billion letter of
credit posted by the corporation. ExxonMobil has appealed the judgment. The
United States Court of Appeals for the Ninth Circuit heard oral arguments on
the appeal on May 3, 1999. The corporation continues to believe that the
punitive damages in this case are unwarranted and that the judgment should be
set aside or substantially reduced by the appellate courts.
On January 29, 1997, a settlement agreement was concluded resolving all
remaining matters between the corporation and various insurers arising from the
Valdez accident. Under terms of this settlement, ExxonMobil received $480
million. Final income statement recognition of this settlement continues to be
deferred in view of uncertainty regarding the ultimate cost to the corporation
of the Valdez accident.
The ultimate cost to ExxonMobil from the lawsuits arising from the Exxon
Valdez grounding is not possible to predict and may not be resolved for a
number of years.
Under the October 8, 1991, civil agreement and consent decrees with the U.S.
and Alaska governments, the corporation will make a final payment of $70
million in 2001. This payment, along with prior payments will be charged
against the provision that was previously established to cover the costs of the
settlement.
German and Dutch affiliated companies are the concessionaires of a natural
gas field subject to a treaty between the governments of Germany and the
Netherlands under which the gas reserves in an undefined border or common area
are to be shared equally. Entitlement to the reserves is determined by
calculating the amount of gas which can be recovered from this area. Based on
the final reserve determination, the German affiliate has received more gas
than its entitlement. Arbitration proceedings, as provided in the agreements,
were conducted to resolve issues concerning the compensation for the overlifted
gas.
By final award dated July 2, 1999, preceded by an interim award in 1996, an
arbitral tribunal established the full amount of the compensation for the
excess gas. This amount has now been paid and a petition to set the award aside
has now been dismissed, rendering the award final in all respects. Other
substantive matters remain outstanding, including recovery of royalties paid on
such excess gas and the taxes payable on the final compensation amount. The net
financial impact on the corporation is not possible to predict at this time.
However, the ultimate outcome is not expected to have a materially adverse
effect upon the corporation's operations or financial condition.
On December 19, 2000, a jury in Montgomery County, Alabama, returned a
verdict against the corporation in a contract dispute over royalties in the
amount of $87.69 million in compensatory damages and $3.42 billion in punitive
damages in the case of Exxon Corporation v. State of Alabama, et al. ExxonMobil
will challenge the verdict and believes that the verdict is unwarranted and
that the judgement should be set aside or substantially reduced. The ultimate
outcome is not expected to have a materially adverse effect upon the
corporation's operations or financial condition.
The U.S. Tax Court has decided the issue with respect to the pricing of crude
oil purchased from Saudi Arabia for the years 1979-1981 in favor of the
corporation. This decision is subject to appeal. Certain other issues for the
years 1979-1993 remain pending before the Tax Court. The ultimate resolution of
these issues is not expected to have a materially adverse effect upon the
corporation's operations or financial condition.
Claims for substantial amounts have been made against ExxonMobil and certain
of its consolidated subsidiaries in other pending lawsuits, the outcome of
which is not expected to have a materially adverse effect upon the
corporation's operations or financial condition.
The corporation and certain of its consolidated subsidiaries were
contingently liable at December 31, 2000, for $2,184 million, primarily
relating to guarantees for notes, loans and performance under contracts. This
includes $770 million representing guarantees of non-U.S. excise taxes and
customs duties of other companies, entered into as a normal business practice,
under reciprocal arrangements. Not included in this figure are guarantees by
consolidated affiliates of $1,715 million, representing ExxonMobil's share of
obligations of certain equity companies.
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.
46
<PAGE>
18. Annuity Benefits and Other Postretirement Benefits
<TABLE>
<CAPTION>
Annuity Benefits
_________________________________________________________ Other Postretirement
U.S. Non-U.S. Benefits
____________________________________________________________________________________
2000 1999 1998 2000 1999 1998 2000 1999 1998
____________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Components of net benefit cost
Service cost $ 214 $ 249 $ 229 $ 245 $ 312 $ 297 $ 24 $ 36 $ 34
Interest cost 592 555 549 603 608 625 201 190 191
Expected return on plan assets (726) (601) (622) (641) (599) (564) (51) (48) (41)
Amortization of actuarial loss/(gain)
and prior service cost (168) (36) (24) 55 167 111 -- 14 12
Net pension enhancement and
curtailment/settlement expense (175) 1 1 77 50 (1) (5) -- --
------------------------------------------------------------------------------------
Net benefit cost $ (263) $ 168 $ 133 $ 339 $ 538 $ 468 $169 $192 $ 196
====================================================================================
</TABLE>
Costs for defined contribution plans were $67 million, $69 million and $121
million in 2000, 1999 and 1998, respectively.
<TABLE>
<CAPTION>
Annuity Benefits Other
_____________________________________ Postretirement
U.S. Non-U.S. Benefits
________________ __________________ ________________
2000 1999 2000 1999 2000 1999
________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C>
Change in benefit obligation
Benefit obligation at January 1 $ 8,032 $ 8,708 $11,628 $ 12,572 $ 2,620 $ 2,932
Service cost 214 249 245 312 24 36
Interest cost 592 555 603 608 201 190
Actuarial loss/(gain) 179 (746) 429 (948) 144 (333)
Benefits paid (1,534) (859) (815) (814) (233) (259)
Foreign exchange rate changes -- -- (811) (171) (8) 14
Other 168 125 (216) 69 194 40
--------------------------------------------------------
Benefit obligation at December 31 $ 7,651 $ 8,032 $ 11,063 $ 11,628 $ 2,942 $ 2,620
========================================================
Change in plan assets
Fair value at January 1 $ 7,965 $ 6,604 $ 8,689 $ 7,577 $ 568 $ 512
Actual return on plan assets 208 2,083 (12) 1,467 (30) 104
Foreign exchange rate changes -- -- (612) 14 -- --
Payments directly to participants 156 138 311 305 166 172
Company contribution -- -- 232 167 38 42
Benefits paid (1,534) (859) (815) (814) (233) (259)
Other -- (1) (13) (27) (63) (3)
--------------------------------------------------------
Fair value at December 31 $ 6,795 $ 7,965 $ 7,780 $ 8,689 $ 446 $ 568
========================================================
Assets in excess of/(less than) benefit obligation
Balance at December 31 $ (856) $ (67) $ (3,283) $ (2,939) $(2,496) $(2,052)
Unrecognized net transition liability/(asset) (31) (102) 49 42 -- --
Unrecognized net actuarial loss/(gain) (788) (1,960) 507 (368) 35 (217)
Unrecognized prior service cost 281 338 297 310 180 5
Intangible asset (12) (33) (82) (81) -- --
Equity of minority shareholders -- -- (36) (23) -- --
Minimum pension liability adjustment (163) (103) (422) (444) -- --
--------------------------------------------------------
Prepaid/(accrued) benefit cost $(1,569) $(1,927) $ (2,970) $ (3,503) $(2,281) $(2,264)
========================================================
Annuity assets and reserves in excess of accumulated benefit obligation $ 1,422 $ 2,833 $ 710 $ 1,760 -- --
Assumptions as of December 31 (percent)
--------------------------------------------------------
Discount rate 7.5 7.75 3.0-7.0 3.0-7.3 7.5 7.75
Long-term rate of compensation increase 3.5 3.5 3.0-5.0 3.0-4.0 3.5 3.5
Long-term rate of return on funded assets 9.5 9.5 6.5-10.0 5.5-10.0 9.5 9.5
</TABLE>
47
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
The data shown on the previous page are reported as required by current
accounting standards which specify use of a discount rate at which
postretirement liabilities could be effectively settled. The discount rate
stipulated for use in calculating year-end postretirement liabilities is based
on the year-end rate of interest on high quality bonds. For determining the
funding requirements of U.S. annuity plans in accordance with applicable
federal government regulations, ExxonMobil uses the expected long-term rate of
return of the annuity fund's actual portfolio as the discount rate. This rate
has historically been higher than bonds as the majority of pension assets are
invested in equities. In fact, the actual rate earned over the past decade has
been 15 percent. On this basis, all funded U.S. plans meet the full funding
requirements of the Department of Labor and the Internal Revenue Service as
detailed in the table below. Certain smaller U.S. plans and a number of non-
U.S. plans are not funded because of local tax conventions and regulatory
practices which do not encourage funding of these plans. Book reserves have
been established for these plans to provide for future benefit payments.
<TABLE>
<CAPTION>
Status of U.S. annuity plans subject to federal government funding requirements 2000 1999
________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C>
Funded assets at market value less total projected benefit obligation $ (856) $ (67)
Differences between accounting and funding basis:
Certain smaller plans unfunded due to lack of tax and regulatory incentives 884 874
Use of long-term rate of return on fund assets as the discount rate 981 1,061
Use of government required assumptions and other actuarial adjustments 364 (1,086)
---------------
Funded assets in excess of obligations under government regulations $1,373 $ 782
---------------
</TABLE>
48
<PAGE>
19. Income, Excise and Other Taxes
<TABLE>
<CAPTION>
2000 1999 1998
________________________________________________________________________________________________________________
United Non- United Non- United Non-
States U.S. Total States U.S. Total States U.S. Total
________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Income taxes
Federal or non-U.S.
Current $ 2,635 $ 7,972 $10,607 $ 369 $ 3,973 $ 4,342 $ 801 $ 2,753 $ 3,554
Deferred -- net 433 (322) 111 214 (1,489) (1,275) 196 5 201
U.S. tax on non-U.S. operations 64 -- 64 25 -- 25 43 -- 43
------------------------------------------------------------------------
$ 3,132 $ 7,650 $10,782 $ 608 $ 2,484 $ 3,092 $1,040 $ 2,758 $ 3,798
State 309 -- 309 148 -- 148 141 -- 141
------------------------------------------------------------------------
Total income taxes $ 3,441 $ 7,650 $11,091 $ 756 $ 2,484 $ 3,240 $1,181 $ 2,758 $ 3,939
Excise taxes 6,997 15,359 22,356 7,795 13,851 21,646 7,459 13,467 20,926
All other taxes and duties 1,253 33,685 34,938 1,021 35,616 36,637 967 34,084 35,051
------------------------------------------------------------------------
Total $11,691 $56,694 $68,385 $9,572 $51,951 $61,523 $9,607 $50,309 $59,916
========================================================================
</TABLE>
All other taxes and duties include taxes reported in operating and selling,
general and administrative expenses. The above provisions for deferred income
taxes include net credits for the effect of changes in tax laws and rates of $84
million in 2000, $205 million in 1999 and $153 million in 1998. Income taxes
(charged)/credited directly to shareholders' equity were:
<TABLE>
<CAPTION>
2000 1999 1998
_______________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C>
Cumulative foreign exchange translation adjustment $221 $ (84) $(21)
Minimum pension liability adjustment 27 (127) 375
Unrealized gains and losses on stock investments 57 (45) --
Other components of shareholders' equity 111 50 88
</TABLE>
The reconciliation between income tax expense and a theoretical U.S. tax
computed by applying a rate of 35 percent for 2000, 1999 and 1998, is as
follows:
<TABLE>
<CAPTION>
2000 1999 1998
_______________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C>
Earnings before Federal and non-U.S. income taxes
United States $ 9,016 $ 3,187 $ 3,451
Non-U.S. 17,756 7,815 8,491
-------------------------
Total $26,772 $11,002 $11,942
-------------------------
Theoretical tax $ 9,370 $ 3,851 $ 4,180
Effect of equity method accounting (852) (576) (529)
Non-U.S. taxes in excess of theoretical U.S. tax 1,986 201 256
U.S. tax on non-U.S. operations 64 25 43
Other U.S. 214 (409) (152)
-------------------------
Federal and non-U.S. income tax expense $10,782 $ 3,092 $ 3,798
=========================
Total effective tax rate 42.4% 31.8% 35.2%
</TABLE>
The effective income tax rate includes state income taxes and the
corporation's share of income taxes of equity companies. Equity company taxes
totaled $658 million in 2000, $449 million in 1999 and $492 million in 1998,
primarily all outside the U.S.
Deferred income taxes reflect the impact of temporary differences between the
amount of assets and liabilities recognized for financial reporting purposes
and such amounts recognized for tax purposes.
Deferred tax liabilities/(assets) are comprised of the following at December
31:
<TABLE>
<CAPTION>
Tax effects of temporary differences for: 2000 1999
___________________________________________________________________________
(millions of dollars)
<S> <C> <C>
Depreciation $13,358 $14,118
Intangible development costs 3,282 3,371
Capitalized interest 1,891 1,500
Other liabilities 2,935 2,028
----------------
Total deferred tax liabilities $21,466 $21,017
----------------
Pension and other postretirement benefits $(1,923) $(2,070)
Tax loss carryforwards (1,763) (1,701)
Other assets (3,465) (2,195)
----------------
Total deferred tax assets $(7,151) $(5,966)
----------------
Asset valuation allowances 380 651
----------------
Net deferred tax liabilities $14,695 $15,702
================
</TABLE>
The corporation had $14 billion of indefinitely reinvested, undistributed
earnings from subsidiary companies outside the U.S. Unrecognized deferred taxes
on remittance of these funds are not expected to be material.
49
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
20. Disclosures about Segments and Related Information
The functional segmentation of operations reflected below is consistent with
ExxonMobil's internal reporting. Earnings are before the cumulative effect of
accounting changes and include special items. Transfers are at estimated market
prices. The interest revenue amount relates to interest earned on cash deposits
and marketable securities. Interest expense includes non-debt related interest
expense of $142 million, $123 million and $81 million in 2000, 1999 and 1998,
respectively. All Other includes smaller operating segments, corporate and
financing activities, merger expenses, and extraordinary gains from required
asset divestitures of $1,730 million.
<TABLE>
<CAPTION>
Upstream Downstream Chemicals
________________ _________________ _______________
All Corporate
U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Other Total
________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31, 2000
Earnings after income tax $ 4,545 $ 7,824 $ 1,561 $ 1,857 $ 644 $ 517 $ 772 $ 17,720
Earnings of equity companies included above 753 1,400 71 74 35 139 (38) 2,434
Sales and other operating revenue 5,669 15,774 56,080 132,483 8,198 9,303 932 228,439
Intersegment revenue 6,557 15,654 8,631 11,684 2,905 2,398 181 --
Depreciation and depletion expense 1,417 3,469 594 1,489 397 281 483 8,130
Interest revenue -- -- -- -- -- -- 258 258
Interest expense -- -- -- -- -- -- 589 589
Income taxes 2,489 7,137 889 850 344 210 (828) 11,091
Additions to property, plant and equipment 1,513 3,501 966 926 288 458 794 8,446
Investments in equity companies 1,261 1,971 264 1,456 492 1,395 25 6,864
Total assets 18,825 39,626 13,516 42,422 8,047 10,234 16,330 149,000
========================================================================
As of December 31, 1999
Earnings after income tax $ 1,842 $ 4,044 $ 577 $ 650 $ 738 $ 616 $ (557) $ 7,910
Earnings of equity companies included above 299 881 8 148 49 83 178 1,646
Sales and other operating revenue 3,104 11,353 43,376 109,969 6,554 7,223 950 182,529
Intersegment revenue 3,925 9,093 2,867 5,387 1,624 1,317 796 --
Depreciation and depletion expense 1,330 3,497 697 1,670 402 274 434 8,304
Interest revenue -- -- -- -- -- -- 153 153
Interest expense -- -- -- -- -- -- 695 695
Income taxes 1,008 2,703 343 (22) 338 63 (1,193) 3,240
Additions to property, plant and equipment 1,440 5,025 830 1,201 600 1,093 660 10,849
Investments in equity companies 1,171 2,647 280 3,304 429 1,537 38 9,406
Total assets 18,211 40,906 13,699 43,718 7,605 9,831 10,551 144,521
========================================================================
As of December 31, 1998
Earnings after income tax $ 850 $ 2,502 $ 1,199 $ 2,275 $ 792 $ 602 $ (76) $ 8,144
Earnings of equity companies included above 92 955 69 126 7 67 194 1,510
Sales and other operating revenue 3,017 10,493 36,642 100,957 5,940 7,649 929 165,627
Intersegment revenue 2,957 6,313 2,124 4,828 2,101 1,250 798 --
Depreciation and depletion expense 1,682 3,330 706 1,516 402 338 381 8,355
Interest revenue -- -- -- -- -- -- 185 185
Interest expense -- -- -- -- -- -- 568 568
Income taxes 476 1,490 666 1,204 329 132 (358) 3,939
Additions to property, plant and equipment 1,836 5,646 1,035 1,718 622 1,121 752 12,730
Investments in equity companies 1,161 2,523 313 3,345 365 1,058 61 8,826
Total assets 18,130 39,094 12,585 42,790 7,224 8,898 10,614 139,335
========================================================================
</TABLE>
<TABLE>
<CAPTION>
Geographic
Sales and other operating revenue 2000 1999 1998 Long-lived assets 2000 1999 1998
________________________________________________________________ ________________________________________________________________
(millions of dollars) (millions of dollars)
<S> <C> <C> <C> <S> <C> <C> <C>
United States $ 70,036 $ 53,214 $ 45,783 United States $ 33,087 $ 33,913 $ 33,597
Non-U.S. 158,403 129,315 119,844 Non-U.S. 56,742 60,130 58,986
-------------------------- --------------------------
Total $228,439 $182,529 $165,627 Total $ 89,829 $ 94,043 $ 92,583
Significant non-U.S. revenue sources include: Significant non-U.S. long-lived assets include:
Japan $ 24,520 $ 19,727 $ 22,982 United Kingdom $ 9,024 $ 10,293 $ 11,112
United Kingdom 19,904 16,305 16,012 Canada 7,922 8,404 7,526
Canada 16,059 11,576 9,995 Japan 5,532 6,545 6,055
</TABLE>
50
<PAGE>
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
<TABLE>
<CAPTION>
Consolidated Subsidiaries
_________________________________________________________________ Non-
United Asia- Consolidated Total
Results of Operations States Canada Europe Pacific Africa Other Total Interests Worldwide
___________________________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
2000 - Revenue
Sales to third parties $ 4,060 $2,423 $ 4,387 $ 2,167 $ 20 $ 366 $13,423 $ 3,055 $16,478
Transfers 5,420 771 5,491 2,130 3,212 324 17,348 1,532 18,880
----------------------------------------------------------------------------------------
$ 9,480 $3,194 $ 9,878 $ 4,297 $ 3,232 $ 690 $30,771 $ 4,587 $35,358
Production costs excluding taxes 1,231 595 1,627 543 400 181 4,577 621 5,198
Exploration expenses 145 81 135 164 196 211 932 22 954
Depreciation and depletion 1,373 586 1,906 556 340 141 4,902 399 5,301
Taxes other than income 637 33 358 506 446 4 1,984 997 2,981
Related income tax 2,419 736 3,274 1,005 1,093 97 8,624 975 9,599
----------------------------------------------------------------------------------------
Results of producing activities $ 3,675 $1,163 $ 2,578 $ 1,523 $ 757 $ 56 $ 9,752 $ 1,573 $11,325
Other earnings* 117 (36) 521 144 31 (31) 746 298 1,044
----------------------------------------------------------------------------------------
Total earnings $ 3,792 $1,127 $ 3,099 $ 1,667 $ 788 $ 25 $10,498 $ 1,871 $12,369
========================================================================================
1999 - Revenue
Sales to third parties $ 2,419 $ 925 $ 3,287 $ 2,160 $ 13 $ 178 $ 8,982 $ 2,123 $11,105
Transfers 3,237 848 2,965 1,250 1,986 204 10,490 867 11,357
----------------------------------------------------------------------------------------
$ 5,656 $1,773 $ 6,252 $ 3,410 $ 1,999 $ 382 $19,472 $ 2,990 $22,462
Production costs excluding taxes 1,347 504 1,499 566 394 157 4,467 617 5,084
Exploration expenses 232 93 280 144 236 261 1,246 29 1,275
Depreciation and depletion 1,260 486 1,932 678 318 173 4,847 443 5,290
Taxes other than income 425 31 246 288 309 2 1,301 591 1,892
Related income tax 893 252 929 521 534 (5) 3,124 546 3,670
----------------------------------------------------------------------------------------
Results of producing activities $ 1,499 $ 407 $ 1,366 $ 1,213 $ 208 $ (206) $ 4,487 $ 764 $ 5,251
Other earnings* 42 32 391 6 17 (36) 452 183 635
----------------------------------------------------------------------------------------
Total earnings $ 1,541 $ 439 $ 1,757 $ 1,219 $ 225 $ (242) $ 4,939 $ 947 $ 5,886
========================================================================================
1998 - Revenue
Sales to third parties $ 2,297 $ 603 $ 3,427 $ 1,893 $ (8) $ 40 $ 8,252 $ 2,385 $10,637
Transfers 2,343 526 1,956 928 1,362 182 7,297 537 7,834
----------------------------------------------------------------------------------------
$ 4,640 $1,129 $ 5,383 $ 2,821 $ 1,354 $ 222 $15,549 $ 2,922 $18,471
Production costs excluding taxes 1,505 501 1,731 514 284 241 4,776 542 5,318
Exploration expenses 317 74 299 210 248 352 1,500 69 1,569
Depreciation and depletion 1,649 423 1,726 813 254 197 5,062 388 5,450
Taxes other than income 343 40 195 164 225 6 973 595 1,568
Related income tax 313 (49) 499 509 196 30 1,498 513 2,011
----------------------------------------------------------------------------------------
Results of producing activities $ 513 $ 140 $ 933 $ 611 $ 147 $ (604) $ 1,740 $ 815 $ 2,555
Other earnings* 269 51 556 5 (19) 17 879 (82) 797
----------------------------------------------------------------------------------------
Total earnings $ 782 $ 191 $ 1,489 $ 616 $ 128 $ (587) $ 2,619 $ 733 $ 3,352
========================================================================================
Average sales prices and production costs per unit of production
___________________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
During 2000
Average sales prices
Crude oil and NGL, per barrel $ 23.94 $ 21.60 $ 26.96 $ 28.74 $ 28.17 $ 24.57 $ 25.77 $ 24.17 $ 25.59
Natural gas, per thousand cubic feet 3.85 3.58 2.69 2.59 -- 1.29 3.12 3.11 3.12
Average production costs, per barrel** 3.08 4.04 3.72 2.72 3.39 5.50 3.43 2.90 3.35
During 1999
Average sales prices
Crude oil and NGL, per barrel $ 14.96 $ 14.47 $ 16.59 $ 17.96 $ 16.81 $ 18.57 $ 16.16 $ 14.52 $ 15.97
Natural gas, per thousand cubic feet 2.21 1.61 2.25 1.88 -- 1.21 2.08 2.47 2.15
Average production costs, per barrel** 3.42 3.69 3.64 2.40 3.31 6.20 3.38 3.02 3.33
During 1998
Average sales prices
Crude oil and NGL, per barrel $ 9.87 $ 8.29 $ 12.59 $ 13.10 $ 12.42 $ 10.90 $ 11.29 $ 10.72 $ 11.23
Natural gas, per thousand cubic feet 2.01 1.27 2.62 1.50 -- 1.24 1.99 3.03 2.16
Average production costs, per barrel** 3.55 3.60 4.48 1.97 2.61 10.67 3.56 2.73 3.45
</TABLE>
* Includes earnings from transportation operations, tar sands operations, LNG
operations, technical services agreements, other non-operating activities
and adjustments for minority interests.
** Production costs exclude depreciation and depletion and all taxes. Natural
gas included by conversion to crude oil equivalent.
51
<PAGE>
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
Oil and Gas Exploration and Production Costs
The amounts shown for net capitalized costs of consolidated subsidiaries are
$4,852 million less at year-end 2000 and $4,593 million less at year-end 1999
than the amounts reported as investments in property, plant and equipment for
the upstream in note 10. This is due to the exclusion from capitalized costs of
certain transportation and research assets and assets relating to the tar sands
and LNG operations, and to the inclusion of accumulated provisions for site
restoration costs, all as required in Statement of Financial Accounting
Standards No. 19.
The amounts reported as costs incurred include both capitalized costs and
costs charged to expense during the year. Total worldwide costs incurred in
2000 were $6,063 million, down $1,696 million from 1999, due primarily to lower
development costs. 1999 costs were $7,759 million, down $1,616 million from
1998, due primarily to lower development costs.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
______________________________________________________ Non-
United Asia- Consolidated Total
Capitalized costs States Canada Europe Pacific Africa Other Total Interests Worldwide
________________________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31, 2000
Property (acreage) costs -- Proved $ 4,686 $ 2,784 $ 161 $ 729 $ 54 $1,187 $ 9,601 $ 11 $ 9,612
-- Unproved 700 236 50 1,044 641 314 2,985 3 2,988
----------------------------------------------------------------------------
Total property costs $ 5,386 $ 3,020 $ 211 $ 1,773 $ 695 $1,501 $ 12,586 $ 14 $ 12,600
Producing assets 31,843 5,958 27,794 11,359 3,920 1,592 82,466 5,528 87,994
Support facilities 860 105 447 950 41 119 2,522 260 2,782
Incomplete construction 877 682 1,050 678 1,001 497 4,785 430 5,215
----------------------------------------------------------------------------
Total capitalized costs $38,966 $ 9,765 $29,502 $14,760 $5,657 $3,709 $102,359 $ 6,232 $ 108,591
Accumulated depreciation and depletion 25,129 4,607 18,666 9,486 1,946 1,646 61,480 2,858 64,338
----------------------------------------------------------------------------
Net capitalized costs $13,837 $ 5,158 $10,836 $ 5,274 $3,711 $2,063 $ 40,879 $ 3,374 $ 44,253
============================================================================
As of December 31, 1999
Property (acreage) costs -- Proved $ 4,606 $ 2,952 $ 207 $ 931 $ 105 $1,246 $ 10,047 $ 14 $ 10,061
-- Unproved 664 214 59 926 662 254 2,779 3 2,782
----------------------------------------------------------------------------
Total property costs $ 5,270 $ 3,166 $ 266 $ 1,857 $ 767 $1,500 $ 12,826 $ 17 $ 12,843
Producing assets 30,708 4,499 28,669 11,526 3,161 1,281 79,844 5,294 85,138
Support facilities 795 115 580 1,007 767 399 3,663 145 3,808
Incomplete construction 1,093 2,226 1,828 651 582 182 6,562 695 7,257
----------------------------------------------------------------------------
Total capitalized costs $37,866 $10,006 $31,343 $15,041 $5,277 $3,362 $102,895 $ 6,151 $ 109,046
Accumulated depreciation and depletion 23,953 4,401 18,680 9,248 1,575 1,531 59,388 2,872 62,260
----------------------------------------------------------------------------
Net capitalized costs $13,913 $ 5,605 $12,663 $ 5,793 $3,702 $1,831 $ 43,507 $ 3,279 $ 46,786
============================================================================
<CAPTION>
Costs incurred in property acquisitions, exploration and development activities
_______________________________________________________________________________________________________________________________
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
During 2000
Property acquisition costs -- Proved $ 1 $ 1 $ -- $ 1 $ -- $ -- $ 3 $ -- $ 3
-- Unproved 72 15 4 96 2 49 238 -- 238
Exploration costs 219 145 187 145 272 297 1,265 23 1,288
Development costs 1,236 525 1,262 502 402 224 4,151 383 4,534
----------------------------------------------------------------------------
Total $ 1,528 $ 686 $ 1,453 $ 744 $ 676 $ 570 $ 5,657 $ 406 $ 6,063
============================================================================
During 1999
Property acquisition costs -- Proved $ -- $ -- $ 1 $ 18 $ -- $ -- $ 19 $ -- $ 19
-- Unproved 8 5 8 -- 459 70 550 -- 550
Exploration costs 263 106 248 152 304 267 1,340 38 1,378
Development costs 1,263 787 1,822 576 547 408 5,403 409 5,812
----------------------------------------------------------------------------
Total $1,534 $ 898 $ 2,079 $ 746 $1,310 $ 745 $ 7,312 $ 447 $ 7,759
============================================================================
During 1998
Property acquisition costs -- Proved $ 21 $ 2 $ -- $ 1 $ -- $ -- $ 24 $ -- $ 24
-- Unproved 100 9 13 4 87 78 291 -- 291
Exploration costs 409 79 392 258 329 380 1,847 127 1,974
Development costs 1,469 731 2,596 757 584 286 6,423 663 7,086
----------------------------------------------------------------------------
Total $1,999 $ 821 $3,001 $1,020 $ 1,000 $ 744 $ 8,585 $ 790 $ 9,375
============================================================================
</TABLE>
52
<PAGE>
Oil and Gas Reserves
The following information describes changes during the years and balances of
proved oil and gas reserves at year-end 1998, 1999 and 2000.
The definitions used are in accordance with applicable Securities and
Exchange Commission regulations.
Proved oil and gas reserves are the estimated quantities of crude oil,
natural gas and natural gas liquids which geological and engineering data
demonstrate with reasonable certainty to be recoverable in future years from
known reservoirs under existing economic and operating conditions, i.e., prices
and costs as of the date the estimate is made. Prices include consideration of
changes in existing prices provided only by contractual arrangements, but not
on escalations based upon future conditions. In some cases, substantial new
investments in additional wells and related facilities will be required to
recover these proved reserves.
Proved reserves include 100 percent of each majority owned affiliate's
participation in proved reserves and ExxonMobil's ownership percentage of the
proved reserves of equity companies, but exclude royalties and quantities due
others. Gas reserves exclude the gaseous equivalent of liquids expected to be
removed from the gas on leases, at field facilities and at gas processing
plants. These liquids are included in net proved reserves of crude oil and
natural gas liquids.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
_____________________________________________________
Non-
United Asia- Consolidated Total
Crude Oil and Natural Gas Liquids States Canada Europe Pacific Africa Other Total Interests Worldwide
_____________________________________________________________________________________________________________________________
(millions of barrels)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net proved developed and undeveloped reserves
January 1, 1998 2,916 1,228 1,875 838 1,341 241 8,439 1,840 10,279
Revisions 73 (23) 13 41 230 11 345 117 462
Purchases -- -- -- -- -- -- -- -- --
Sales (5) (5) -- -- -- -- (10) (3) (13)
Improved recovery 17 9 21 -- 1 -- 48 85 133
Extensions and discoveries 37 43 27 24 358 474 963 23 986
Production (234) (98) (228) (117) (109) (16) (802) (92) (894)
----------------------------------------------------------------------------
December 31, 1998 2,804 1,154 1,708 786 1,821 710 8,983 1,970 10,953
Revisions 96 19 96 23 128 6 368 25 393
Purchases -- -- -- -- -- -- -- -- --
Sales (3) -- -- -- -- -- (3) (9) (12)
Improved recovery 7 1 15 -- 3 -- 26 72 98
Extensions and discoveries 58 277 174 18 191 2 720 -- 720
Production (213) (96) (232) (112) (119) (18) (790) (102) (892)
----------------------------------------------------------------------------
December 31, 1999 2,749 1,355 1,761 715 2,024 700 9,304 1,956 11,260
Revisions 410 9 25 29 50 24 547 33 580
Purchases -- -- -- -- -- -- -- -- --
Sales (1) (5) -- -- -- -- (6) -- (6)
Improved recovery 40 34 20 -- 3 -- 97 26 123
Extensions and discoveries 8 33 5 39 425 4 514 3 517
Production (220) (96) (253) (93) (118) (26) (806) (107) (913)
----------------------------------------------------------------------------
December 31, 2000 2,986 1,330 1,558 690 2,384 702 9,650 1,911 11,561
Developed reserves, included above
At December 31, 1998 2,470 594 884 673 1,032 57 5,710 1,383 7,093
At December 31, 1999 2,383 608 1,086 615 1,048 186 5,926 1,333 7,259
At December 31, 2000 2,661 630 978 504 989 245 6,007 1,331 7,338
</TABLE>
53
<PAGE>
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES
Net proved developed reserves are those volumes which are expected to be
recovered through existing wells with existing equipment and operating methods.
Undeveloped reserves are those volumes which are expected to be recovered as a
result of future investments to drill new wells, to recomplete existing wells
and/or to install facilities to collect and deliver the production from
existing and future wells.
Reserves attributable to certain oil and gas discoveries were not considered
proved as of year-end 2000 due to geological, technological or economic
uncertainties and therefore are not included in the tabulation.
Crude oil and natural gas liquids and natural gas production quantities shown
are the net volumes withdrawn from ExxonMobil's oil and gas reserves. The
natural gas quantities differ from the quantities of gas delivered for sale by
the producing function as reported on page 57 due to volumes consumed or flared
and inventory changes. Such quantities amounted to approximately 242 billion
cubic feet in 1998, 391 billion cubic feet in 1999 and 392 billion cubic feet
in 2000.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
____________________________________________________ Non-
United Asia- Consolidated Total
Natural Gas States Canada Europe Pacific Africa Other Total Interests Worldwide
_____________________________________________________________________________________________________________________
(billions of cubic feet)
Net proved developed and undeveloped reserves
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
January 1, 1998 13,481 3,352 11,747 10,311 2 504 39,397 19,688 59,085
Revisions 643 (87) 456 245 -- 99 1,356 184 1,540
Purchases -- 10 -- -- -- -- 10 -- 10
Sales (52) (47) (10) (4) -- -- (113) (34) (147)
Improved recovery 3 57 20 -- -- -- 80 34 114
Extensions and discoveries 195 503 191 362 111 60 1,422 99 1,521
Production (1,213) (299) (1,003) (916) -- (48) (3,479) (638) (4,117)
--------------------------------------------------------------------------
December 31, 1998 13,057 3,489 11,401 9,998 113 615 38,673 19,333 58,006
Revisions 781 31 680 131 -- 42 1,665 142 1,807
Purchases -- -- -- -- -- -- -- -- --
Sales (18) (1) -- -- -- -- (19) -- (19)
Improved recovery 2 14 105 -- -- -- 121 161 282
Extensions and discoveries 305 207 192 44 58 6 812 61 873
Production (1,126) (353) (1,150) (815) -- (55) (3,499) (654) (4,153)
--------------------------------------------------------------------------
December 31, 1999 13,001 3,387 11,228 9,358 171 608 37,753 19,043 56,796
Revisions 987 69 970 (113) 147 62 2,122 85 2,207
Purchases -- 10 -- -- -- -- 10 -- 10
Sales (3) (5) -- -- -- -- (8) -- (8)
Improved recovery 22 24 46 -- -- 24 116 50 166
Extensions and discoveries 195 430 96 11 70 26 828 45 873
Production (1,157) (399) (1,170) (710) (13) (53) (3,502) (676) (4,178)
--------------------------------------------------------------------------
December 31, 2000 13,045 3,516 11,170 8,546 375 667 37,319 18,547 55,866
Developed reserves, included above
At December 31, 1998 10,690 2,254 7,939 6,871 2 389 28,145 7,967 36,112
At December 31, 1999 10,820 2,475 7,764 6,471 2 426 27,958 8,643 36,601
At December 31, 2000 10,956 2,850 8,222 6,300 125 477 28,930 9,087 38,017
====================================================================================================================
</TABLE>
INFORMATION ON CANADIAN TAR SANDS PROVEN RESERVES NOT INCLUDED ABOVE
In addition to conventional liquids and natural gas proved reserves, ExxonMobil
has significant interests in proven tar sands reserves in Canada associated with
the Syncrude project. For internal management purposes, ExxonMobil views these
reserves and their development as an integral part of total Upstream operations.
However, U.S. Securities and Exchange Commission regulations define these
reserves as mining related and not a part of conventional oil and gas reserves.
The tar sands reserves are not considered in the standardized measure of
discounted future cash flows for conventional oil and gas reserves, which is
found on page 55.
<TABLE>
<CAPTION>
Tar Sands Reserves Canada
___________________________________________
(millions of barrels)
<S> <C>
At December 31, 1998 597
At December 31, 1999 577
At December 31, 2000 610
</TABLE>
54
<PAGE>
Standardized Measure of Discounted Future Cash Flows
As required by the Financial Accounting Standards Board, the standardized
measure of discounted future net cash flows is computed by applying year-end
prices, costs and legislated tax rates and a discount factor of 10 percent to
net proved reserves. The corporation believes the standardized measure is not
meaningful and may be misleading.
<TABLE>
<CAPTION>
Consolidated Subsidiaries
________________________________________________________ Non-
United Asia- Consolidated Total
States Canada Europe Pacific Africa Other Total Interests Worldwide
_______________________________________________________________________________________________________________________________
<CAPTION>
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
As of December 31, 1998
Future cash inflows from sales of oil and gas $45,618 $13,255 $42,408 $21,640 $16,889 $ 6,539 $146,349 $62,642 $208,991
Future production costs 18,946 4,567 14,926 8,679 6,298 2,530 55,946 28,343 84,289
Future development costs 4,066 2,012 5,668 3,490 4,141 975 20,352 3,393 23,745
Future income tax expenses 7,359 2,411 8,290 2,725 2,585 667 24,037 11,734 35,771
-------------------------------------------------------------------------------
Future net cash flows $15,247 $ 4,265 $13,524 $ 6,746 $ 3,865 $ 2,367 $ 46,014 $19,172 $ 65,186
Effect of discounting net cash flows at 10% 7,395 2,011 4,951 3,060 2,058 1,541 21,016 12,207 33,223
-------------------------------------------------------------------------------
Discounted future net cash flows $ 7,852 $ 2,254 $ 8,573 $ 3,686 $ 1,807 $ 826 $ 24,998 $ 6,965 $ 31,963
===============================================================================
As of December 31, 1999
Future cash inflows from sales of oil and gas $82,674 $29,360 $64,192 $34,771 $49,247 $13,780 $274,024 $94,767 $368,791
Future production costs 21,219 6,618 13,660 9,754 11,784 2,548 65,583 33,006 98,589
Future development costs 4,131 2,116 4,904 3,516 4,779 605 20,051 3,104 23,155
Future income tax expenses 20,103 8,096 23,396 7,680 20,405 2,493 82,173 26,573 108,746
-------------------------------------------------------------------------------
Future net cash flows $37,221 $12,530 $22,232 $13,821 $12,279 $ 8,134 $106,217 $32,084 $138,301
Effect of discounting net cash flows at 10% 20,139 5,884 7,351 5,918 6,275 4,694 50,261 19,473 69,734
-------------------------------------------------------------------------------
Discounted future net cash flows $17,082 $ 6,646 $14,881 $ 7,903 $ 6,004 $ 3,440 $ 55,956 $12,611 $ 68,567
===============================================================================
As of December 31, 2000
Future cash inflows from sales of oil and gas $177,178 $41,275 $70,208 $34,658 $52,651 $10,317 $386,287 $93,597 $479,884
Future production costs 26,417 7,857 15,979 9,977 10,953 3,467 74,650 38,011 112,661
Future development costs 3,977 2,806 5,552 3,405 7,516 798 24,054 3,901 27,955
Future income tax expenses 55,192 12,731 26,078 7,382 18,949 1,830 122,162 21,333 143,495
-------------------------------------------------------------------------------
Future net cash flows $ 91,592 $17,881 $22,599 $13,894 $15,233 $ 4,222 $165,421 $30,352 $195,773
Effect of discounting net cash flows at 10% 48,876 6,795 7,779 5,638 8,158 2,450 79,696 18,825 98,521
-------------------------------------------------------------------------------
Discounted future net cash flows $ 42,716 $11,086 $14,820 $ 8,256 $ 7,075 $ 1,772 $ 85,725 $11,527 $ 97,252
===============================================================================
</TABLE>
Change in Standardized Measure of Discounted Future Net Cash Flows Relating to
Proved Oil and Gas Reserves
<TABLE>
<CAPTION>
Consolidated Subsidiaries 2000 1999 1998
_______________________________________________________________________________________________________________________________
(millions of dollars)
<S> <C> <C> <C>
Value of reserves added during the year due to extensions, discoveries, improved recovery
and net purchases less related costs $ 6,029 $ 4,245 $ 1,329
Changes in value of previous-year reserves due to:
Sales and transfers of oil and gas produced during the year, net of production (lifting) costs (24,498) (13,395) (10,300)
Development costs incurred during the year 4,194 5,313 6,104
Net change in prices, lifting and development costs 44,702 59,466 (34,611)
Revisions of previous reserves estimates 12,537 3,106 1,281
Accretion of discount 7,694 3,056 5,865
Net change in income taxes (20,889) (30,833) 15,989
---------------------------
Total change in the standardized measure during the year $ 29,769 $ 30,958 $(14,343)
===========================
</TABLE>
55
<PAGE>
QUARTERLY INFORMATION
<TABLE>
<CAPTION>
2000 1999
_______________________________________________________________________________
First Second Third Fourth First Second Third Fourth
Quarter Quarter Quarter Quarter Year Quarter Quarter Quarter Quarter Year
______________________________________________________________________________________________________________
(thousands of barrels daily)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Volumes
Production of crude oil
and natural gas liquids 2,602 2,514 2,497 2,600 2,553 2,540 2,473 2,477 2,579 2,517
Refinery throughput 5,528 5,572 5,736 5,732 5,642 6,068 5,950 5,899 5,991 5,977
Petroleum product sales 7,796 8,035 8,069 8,068 7,993 8,974 8,842 8,879 8,857 8,887
<CAPTION>
(millions of cubic feet daily)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Natural gas production
available for sale 12,146 9,247 8,735 11,252 10,343 11,516 9,178 8,700 11,851 10,308
<CAPTION>
(thousands of metric tons)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Chemical prime product sales 6,519 6,596 6,038 6,484 25,637 6,076 6,262 6,288 6,657 25,283
<CAPTION>
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Summarized financial data
Sales and other operating
revenue $53,273 54,936 57,497 62,733 228,439 $37,982 42,458 48,415 53,674 182,529
Gross profit* $21,896 22,201 23,620 25,506 93,223 $17,850 19,229 20,379 22,950 80,408
Net income before
extraordinary item $ 3,025 4,000 4,060 4,905 15,990 $ 1,484 1,954 2,188 2,284 7,910
Extraordinary gain from
required asset divestitures $ 455 530 430 315 1,730 -- -- -- -- --
Net income $ 3,480 4,530 4,490 5,220 17,720 $ 1,484 1,954 2,188 2,284 7,910
<CAPTION>
(dollars per share)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Per share data
Net income per common share
before extraordinary item $ 0.87 1.15 1.17 1.41 4.60 $ 0.42 0.57 0.63 0.66 2.28
Extraordinary gain from
required asset divestitures $ 0.13 0.15 0.12 0.10 0.50 $ -- -- -- -- --
Net income per common share $ 1.00 1.30 1.29 1.51 5.10 $ 0.42 0.57 0.63 0.66 2.28
Net income per common share
-- assuming dilution $ 0.99 1.28 1.28 1.49 5.04 $ 0.42 0.56 0.62 0.65 2.25
Dividends per common share $0.4400 0.4400 0.4400 0.4400 1.7600 $0.4165 0.4165 0.4165 0.4375 1.6870
Common stock prices
High $86.313 84.750 90.750 95.438 95.438 $76.375 87.250 83.000 86.563 87.250
Low $69.875 75.000 75.125 84.063 69.875 $64.313 69.438 72.125 70.063 64.313
</TABLE>
* Gross profit equals sales and other operating revenue less estimated costs
associated with products sold.
The price range of ExxonMobil Common Stock is as reported on the composite
tape of the several U.S. exchanges where ExxonMobil Common Stock is traded. The
principal market where ExxonMobil Common Stock (XOM) is traded is the New York
Stock Exchange, although the stock is traded on other exchanges in and outside
the United States. Through December 1, 1999, the Common Stock traded under the
name of Exxon Corporation (XON).
There were 718,881 registered shareholders of ExxonMobil common stock at
December 31, 2000. At January 31, 2001, the registered shareholders of
ExxonMobil common stock numbered 715,020.
On January 31, 2001, the corporation declared a $0.44 dividend per common
share, payable March 9, 2001.
56
<PAGE>
OPERATING SUMMARY
<TABLE>
<CAPTION>
2000 1999 1998 1997
_______________________________________________________________________________
(thousands of barrels daily)
<S> <C> <C> <C> <C>
Production of crude oil and natural gas liquids
Net production
United States 733 729 745 803
Canada 304 315 322 287
Europe 704 650 635 641
Asia-Pacific 253 307 322 347
Africa 323 326 301 294
Other Non-U.S. 236 190 177 155
---------------------------
Worldwide 2,553 2,517 2,502 2,527
===========================
<CAPTION>
(millions of cubic feet daily)
<S> <C> <C> <C> <C>
Natural gas production available for sale
Net production
United States 2,856 2,871 3,140 3,223
Canada 844 683 667 600
Europe 4,463 4,438 4,245 4,283
Asia-Pacific 1,755 2,027 2,352 2,632
Other Non-U.S. 425 289 213 156
---------------------------
Worldwide 10,343 10,308 10,617 10,894
===========================
<CAPTION>
(thousands of barrels daily)
<S> <C> <C> <C> <C>
Refinery throughput
United States 1,862 1,930 1,919 2,026
Canada 451 441 445 448
Europe 1,578 1,782 1,888 1,899
Asia-Pacific 1,462 1,537 1,554 1,559
Other Non-U.S. 289 287 287 302
---------------------------
Worldwide 5,642 5,977 6,093 6,234
===========================
Petroleum product sales
United States 2,669 2,918 2,804 2,777
Canada 577 587 579 574
Europe 2,129 2,597 2,646 2,609
Asia-Pacific and other Eastern Hemisphere 2,090 2,223 2,266 2,249
Latin America 528 562 578 564
---------------------------
Worldwide 7,993 8,887 8,873 8,773
===========================
Gasoline, naphthas 3,122 3,428 3,417 3,317
Heating oils, kerosene, diesel oils 2,373 2,658 2,689 2,725
Aviation fuels 749 813 774 753
Heavy fuels 694 706 765 744
Specialty petroleum products 1,055 1,282 1,228 1,234
---------------------------
Worldwide 7,993 8,887 8,873 8,773
===========================
<CAPTION>
(thousands of metric tons)
<S> <C> <C> <C> <C>
Chemical prime product sales 25,637 25,283 23,628 23,838
===========================
<CAPTION>
(millions of metric tons)
<S> <C> <C> <C> <C>
Coal production 17 17 15 15
===========================
<CAPTION>
(thousands of metric tons)
<S> <C> <C> <C> <C>
Copper production 254 248 216 205
===========================
</TABLE>
Operating statistics include 100 percent of operations of majority owned
subsidiaries; for other companies, crude production, gas, petroleum product and
chemical prime product sales include ExxonMobil's ownership percentage, and
refining throughput includes quantities processed for ExxonMobil Net
production excludes royalties and quantities due others when produced, whether
payment is made in kind or cash.
57
<PAGE>
SIGNATURES
Pursuant to the requirements of Section 13 of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on its behalf by
the undersigned, thereunto duly authorized.
EXXON MOBIL CORPORATION
By: /s/ LEE R. RAYMOND
----------------------------------
(Lee R. Raymond,
Chairman of the Board)
Dated March 28, 2001
----------------
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints Richard
E. Gutman, Paul A. Hanson and Brian A. Maher, and each of them, his or her
true and lawful attorneys-in-fact and agents, with full power of substitution
and resubstitution, for him or her and in his or her name, place and stead, in
any and all capacities, to sign any and all amendments to this Annual Report
on Form 10-K, and to file the same, with all exhibits thereto, and other
documents in connection therewith, with the Securities and Exchange
Commission, granting unto said attorneys-in-fact and agents, and each of them,
full power and authority to do and perform each and every act and thing
requisite and necessary to be done, as fully to all intents and purposes as he
or she might or could do in person, hereby ratifying and confirming all that
said attorneys-in-fact and agents or any of them, or their or his or her
substitute or substitutes, may lawfully do or cause to be done by virtue
hereof.
----------------
Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
<TABLE>
<S> <C> <C>
/s/ LEE R. RAYMOND Chairman of the Board March 28, 2001
______________________________________ (Principal Executive
(Lee R. Raymond) Officer)
/s/ MICHAEL J. BOSKIN Director March 28, 2001
______________________________________
(Michael J. Boskin)
/s/ RENE DAHAN Director March 28, 2001
______________________________________
(Rene Dahan)
</TABLE>
58
<PAGE>
<TABLE>
<S> <C> <C>
/s/ WILLIAM T. ESREY Director March 28, 2001
______________________________________
(William T. Esrey)
/s/ DONALD V. FITES Director March 28, 2001
______________________________________
(Donald V. Fites)
/s/ JESS HAY Director March 28, 2001
______________________________________
(Jess Hay)
/s/ CHARLES A. HEIMBOLD, JR. Director March 28, 2001
______________________________________
(Charles A. Heimbold, Jr.)
/s/ JAMES R. HOUGHTON Director March 28, 2001
______________________________________
(James R. Houghton)
/s/ WILLIAM R. HOWELL Director March 28, 2001
______________________________________
(William R. Howell)
/s/ HELENE L. KAPLAN Director March 28, 2001
______________________________________
(Helene L. Kaplan)
/s/ REATHA CLARK KING Director March 28, 2001
______________________________________
(Reatha Clark King)
/s/ PHILIP E. LIPPINCOTT Director March 28, 2001
______________________________________
(Philip E. Lippincott)
/s/ HARRY J. LONGWELL Director March 28, 2001
______________________________________
(Harry J. Longwell)
</TABLE>
59
<PAGE>
<TABLE>
<S> <C> <C>
/s/ J. RICHARD MUNRO Director March 28, 2001
______________________________________
(J. Richard Munro)
/s/ MARILYN CARLSON NELSON Director March 28, 2001
______________________________________
(Marilyn Carlson Nelson)
/s/ EUGENE A. RENNA Director March 28, 2001
______________________________________
(Eugene A. Renna)
/s/ WALTER V. SHIPLEY Director March 28, 2001
______________________________________
(Walter V. Shipley)
/s/ DONALD D. HUMPHREYS Controller (Principal March 28, 2001
______________________________________ Accounting Officer)
(Donald D. Humphreys)
/s/ FRANK A. RISCH Treasurer (Principal March 28, 2001
______________________________________ Financial Officer)
(Frank A. Risch)
</TABLE>
60
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<C> <S> <C>
3(i). Restated Certificate of Incorporation, as restated
November 30, 1999 (incorporated by reference to Exhibit
3(i) to the registrant's Annual Report on Form 10-K for
1999).
3(ii). By-Laws, as revised to November 30, 1999 (incorporated by
reference to Exhibit 3(ii) to the Registrant's Annual
Report on Form 10-K for 1999).
10(iii)(a). 1993 Incentive Program, as amended (incorporated by
reference to Exhibit 10(iii)(a) of the registrant Annual
Report on Form 10-K for 1999).*
10(iii)(b). 2001 Nonemployee Director's Deferred Compensation Plan.*
10(iii)(c). Restricted Stock Plan for Nonemployee Directors, as
amended (incorporated by reference to Exhibit 10(iii)(c)
to the registrant's Annual Report on Form 10-K for
1996).*
10(iii)(d). ExxonMobil Executive Life Insurance and Death Benefit Plan
(incorporated by reference to Exhibit 10(iii)(d) to the
registrant's Annual Report on Form 10-K for 1999).*
10(iii)(e). Short Term Incentive Program, as amended (incorporated by
reference to Exhibit 10(iii)(e) to the registrant's
Annual Report on Form 10-K for 1999).*
10(iii)(f). 1997 Nonemployee Director Restricted Stock Plan
(incorporated by reference to Exhibit 10(iii)(f) to the
registrant's Quarterly Report on Form 10-Q for the
quarter ended September 30, 2000).*
10(iii)(g). 1995 Mobil Incentive Compensation and Stock Ownership
Plan.*
10(iii)(h). Mobil Oil Corporation's Executive Life Insurance Program
(incorporated by reference to Exhibit 10.4 to the Annual
Report on Form 10-K of Mobil Corporation filed March 31,
1999).*
10(iii)(i). Supplemental Employees Savings Plan of Mobil Oil
Corporation (incorporated by reference to Exhibit 10.5 to
the Annual Report on Form 10-K of Mobil Corporation filed
March 31, 1999).*
12. Computation of ratio of earnings to fixed charges.
21. Subsidiaries of the registrant.
23.1 Consent of PricewaterhouseCoopers LLP, Independent
Accountants.
23.2 Consent of Ernst & Young LLP, Independent Auditors.
99. Report of Ernst & Young LLP, Independent Auditors.
</TABLE>
- - - - - - --------
* Compensatory plan or arrangement required to be identified pursuant to Item
14(a)(3) of this Annual Report on Form 10-K.
The registrant has not filed with this report copies of the instruments
defining the rights of holders of long-term debt of the registrant and its
subsidiaries for which consolidated or unconsolidated financial statements are
required to be filed. The registrant agrees to furnish a copy of any such
instrument to the Securities and Exchange Commission upon request.
61
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(III).(B)
<SEQUENCE>2
<FILENAME>0002.txt
<DESCRIPTION>2001 NONEMPLOYEE DIR. DEF. COMP. PLAN
<TEXT>
<PAGE>
Exhibit 10(iii)(b)
EXXON MOBIL CORPORATION
2001 NONEMPLOYEE DIRECTORS' DEFERRED COMPENSATION PLAN
(as adopted effective January 1, 2001)
1. Purpose
-------
The purpose of the Plan is to provide nonemployee directors of the
Corporation with an opportunity to defer compensation as a director.
2. Effective Date; Transition
--------------------------
(a) This Plan shall become effective on the Effective Date.
(b) For incumbent directors and directors elected after the Effective
Date, this Plan replaces the Prior Plan. Accounts of incumbent
directors under the Prior Plan shall, as of the Effective Date, be
transferred to this Plan with the account balance credited as deferred
cash or, to the extent the incumbent director elects reallocation
under Section 6(e), deferred stock units. Deferral elections made by
an incumbent director under the Prior Plan shall remain in effect for
purposes of this Plan, subject to the participant's ability to make a
prospective change under Section 5(c)(3) or a one-time reallocation
under Section 6(e).
(c) Retired directors shall not be entitled to participate in this Plan.
Accounts of retired directors under the Prior Plan shall remain
subject to the terms and conditions of the Prior Plan.
3. Definitions
-----------
In this Plan, the following definitions apply:
"Account" means the account maintained by the Corporation for deferred
cash and deferred stock units credited under Section 6.
"Administrator" means the Secretary of the Corporation.
"Board" means the Board of Directors of the Corporation.
"Compensation" means the cash retainer payable to a nonemployee
director for service on the Board, for service as member of any Board
committee, and for service as chairman of any Board committee, together
with other cash fees, if any, payable to a
<PAGE>
nonemployee director in that capacity for attending meetings or otherwise for
service on the Board or any Board committee. Grants of restricted stock and
reimbursement of expenses do not constitute compensation for purposes of this
Plan.
"Corporation" means Exxon Mobil Corporation, a New Jersey corporation, and
its successors.
"Deferred cash" means a credit to a participant's account under Section
6(b) that represents the right to receive a cash payment equal to the credited
amount plus deemed interest on settlement of the account.
"Deferred stock unit" means a credit to a participant's account under
Section 6(c) that represents the right to receive a cash payment equal to the
fair market value of one share on settlement of the account.
"Effective Date" means January 1, 2001.
"Fair market value" means, for any date, the average of the high and low
sales prices for shares as reported on the Consolidated Tape during the New York
Stock Exchange regular session on such date.
"Incumbent director" means a nonemployee director who holds office on the
Effective Date.
"Nonemployee director" means a member of the Board who is not also an
employee of the Corporation or any affiliate of the Corporation.
"Participant" means each nonemployee director who elects to defer
compensation under this Plan.
"Plan" means this Exxon Mobil Corporation 2001 Nonemployee Directors'
Deferred Compensation Plan, as it may be amended from time to time.
"Prior Plan" means the Exxon Corporation Plan for Deferral of Non-employee
Director Compensation and Fees originally adopted by the Board effective May 15,
1980.
"Retired director" means a participant in the Prior Plan who does not hold
office on the Effective Date.
"Share" means a share of common stock of the Corporation.
"Term of office" means, for any nonemployee director, each period beginning
with the director's election to office and continuing until the next
2
<PAGE>
annual meeting of shareholders and until the director is reelected to
office or his or her successor shall have been elected and qualified.
4. Administration
--------------
The Board and, subject to the oversight of the Board, the Administrator
shall have authority to administer the Plan, including conclusive authority
to construe and interpret the Plan, to establish rules, policies,
procedures, forms, and notices for use in carrying out the Plan, and to
make all other determinations necessary or desirable for administration of
the Plan.
5. Election to Defer Compensation
------------------------------
(a) Amount of Deferral. A nonemployee director may elect to defer receipt
------------------
of all or a specified portion of the compensation otherwise thereafter
payable to such director.
(b) Manner of Electing Deferral. An election to defer compensation shall
---------------------------
be made by giving written notice to the Administrator in the form
approved by the Administrator. Such notice shall include:
(1) the percentage of compensation to be deferred,
(2) an election for the deferred compensation to be credited as
deferred cash and/or as deferred stock units,
(3) an election for the account to be settled in either a lump-sum
payment or in a specified number of annual installments (not to exceed
five), and
(4) the date of the lump-sum payment or the first installment payment
in settlement of the account (which shall not be earlier than January
15 of the year following the year in which service as a nonemployee
director terminates nor later than January 15 first following the
participant's 72nd birthday, or such other date as may be approved by
the Administrator.)
(c) Time of Election; Effectiveness; Change of Election.
---------------------------------------------------
(1) An election to defer compensation for a term of office shall be
made by a nonemployee director at, or prior to, the time of
election and prior to the right to receive any compensation for
such term of office.
(2) An election shall continue in effect until the end of the
participant's service as a nonemployee director or until the
3
<PAGE>
effectiveness of a change in the nonemployee director's deferral
election, as provided in clause (3) below, whichever occurs
first.
(3) A nonemployee director may change a deferral election by giving
written notice to the Administrator, provided that, except for
the one-time reallocation permitted under Section 6(e), a change
shall only be effective prospectively for terms of office
commencing at or after the time of such notice.
6. Deferred Compensation Account
-----------------------------
(a) Establishment of Account. The Corporation will maintain an account
------------------------
for each participant. Accounts under this Plan shall be unfunded and shall
represent only an unsecured claim against the general assets of the
Corporation.
(b) Deferred Cash. If a participant elects to defer compensation in the
-------------
form of deferred cash, the amount so deferred will be credited to the
participant's account on the date such compensation would otherwise have
been payable absent the election to defer. In addition, at the end of each
calendar month the deferred cash credits in the account shall be increased
by an amount equal to deemed interest, at such reasonable rate per annum as
may be determined from time to time by the Administrator, upon the average
daily balance of deferred cash in the account during such month.
(c) Deferred Stock Units. If a participant elects to defer compensation
--------------------
in the form of deferred stock units, a number of units will be credited to
the participant's account, at the time such compensation would otherwise
have been payable absent the election to defer, equal to (i) the otherwise
payable amount divided by (ii) the fair market value of a share on the last
----------
trading day preceding the credit date. In addition, on each date on which
a cash dividend is payable on the shares, the participant's account shall
be credited with a number of units equal to (i) the per share cash dividend
times the number of deferred stock units then credited to the account,
-----
divided by (ii) the fair market value of a share on the last trading day
----------
preceding the dividend payment date. Accounts shall be credited with
fractional deferred stock units, rounded to the third decimal place.
(d) Adjustments. In case of a stock split, stock dividend, or other
-----------
relevant change in capitalization, the number of deferred stock units
credited to a participant's account shall be adjusted in such manner as the
Administrator deems appropriate.
4
<PAGE>
(e) One-time Reallocation to Deferred Stock Units.
---------------------------------------------
(1) Incumbent directors who were participants in the Prior Plan shall
have a one-time right to reallocate all or a portion of their account
balance to deferred stock units. Such participants may elect
reallocation by giving written notice to the Administrator in the form
approved by the Administrator.
(2) A reallocation notice under this Section must be received by the
Administrator on or before the date of the Corporation's 2001 Annual
Meeting of Shareholders and shall include:
(A) the date as of which the reallocation is to be made, which
must be (i) on or after the Effective Date, (ii) on or after the
date the notice is received, and (iii) no later than the date of
the Corporation's 2001 Annual Meeting of Shareholders;
(B) the percentage of the participant's credited account balance
to be reallocated to deferred stock units; and
(C) an election for deferred compensation from and after the
reallocation date to be credited as deferred cash and/or as
deferred stock units, provided that the participant shall not be
entitled to change the amount of compensation deferred for the
current term of office.
(3) If a participant elects to reallocate, on the date specified in the
reallocation notice the specified percentage of the account's deferred
cash balance, including deemed interest credited through the most
recent month end in accordance with Section 6(b), shall be debited
from deferred cash and the account shall be credited with a number of
deferred stock units equal to (i) the reallocated amount divided by
----------
(ii) the fair market value of a share on the last trading day
preceding the reallocation date.
(4) Participants shall have no right to have amounts credited as
deferred stock units in their accounts reallocated or converted to
deferred cash. Except for the one time reallocation right provided
above, participants shall have no right to have amounts credited as
deferred cash in their accounts reallocated or converted to deferred
stock units.
5
<PAGE>
7. Valuation
---------
The value of an account as of any date on which a settlement payment is
to be made under Section 8 shall be the sum of (a) the amount of deferred
cash then credited to the account, with deemed interest credited through
the most recent month end in accordance with Section 6(b), plus (b) an
----
amount equal to the number of deferred stock units then credited to the
account times the fair market value of a share on the last trading day
-----
preceding the payment date.
8. Settlement
----------
(a) Lump Sum. If a participant elects lump sum settlement, an amount of
--------
cash equal to the value of the account determined in accordance with
Section 7 shall be paid to the participant on January 15 of the year
selected as provided in Section 5(b).
(b) Installment Payments. If a participant elects settlement in
--------------------
installments, an amount of cash determined as hereafter provided shall be
paid to the participant on January 15 of each year of the installment
payment period selected as provided in Section 5(b). The amount of each
installment shall be equal to (i) the value of the account as of the
payment date for such installment, determined in accordance with Section 7,
divided by (ii) the number of unpaid installments. Each installment
----------
payment shall be debited to the deferred cash and deferred stock units in a
participant's account on a pro-rata basis.
(c) Payment on Death. Notwithstanding a participant's settlement
----------------
election, in the event of a participant's death an amount of cash equal to
the remaining value of the account determined as provided in Section 7
shall be paid in a single payment to the participant's estate or permitted
designated beneficiary as soon as practicable.
(e) No early withdrawal. No withdrawal may be made from a participant's
-------------------
account except as provided in this Section 8.
(f) Cash settlement only. Settlement of accounts under this Plan shall be
--------------------
made only in cash.
9. Beneficiary Designation
-----------------------
Participants may designate a beneficiary to be paid any amounts remaining
unpaid under this Plan on the death of the participant, provided that such
designation will only be given effect if the designation is expressly
authorized as a non-testamentary transfer under applicable laws of descent
and distribution as determined by the Administrator.
6
<PAGE>
Beneficiary designations shall be subject to such forms, requirements and
procedures as the Administrator may establish from time to time.
10. Non-Assignability
-----------------
The right of a participant to receive any unpaid portion of the
participant's account may not be assigned or transferred except by will or
the laws of descent and distribution (including permitted beneficiary
designations under Section 9), and may not be pledged or encumbered or be
subject to attachment, execution, or levy of any kind.
11. Amendment and Termination
-------------------------
This Plan may be amended, modified or terminated by the Board at any time,
provided that no such amendment, modification or termination shall, without
the consent of a participant, adversely affect such participant's rights
with respect to amounts accrued in the participant's account.
12. Governing Law
-------------
This Plan and all actions taken under it shall be governed by the laws of
the State of New York, without reference to conflict of law principles.
13. Severability
------------
If any provision of this Plan shall be deemed illegal or invalid for any
reason, such illegality or invalidity shall not affect the remaining
provisions of the Plan but shall be fully severable.
14. Compliance
----------
The Administrator is authorized to take such steps as may be necessary
including, without limitation, delaying effectiveness of a participant's
election or delaying settlement of an account, in order to ensure that this
Plan and all actions taken under it comply with any law, regulation, or
listing requirement which the Administrator deems applicable or desirable,
including the exemption provided by Rule 16b-3 under the Securities
Exchange Act of 1934.
7
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-10.(III).(G)
<SEQUENCE>3
<FILENAME>0003.txt
<DESCRIPTION>1995 MOBIL INCENTIVE COMP. AND STK. OWNERSHIP PLAN
<TEXT>
<PAGE>
Exhibit 10(iii)(g)
1995 MOBIL INCENTIVE COMPENSATION AND STOCK OWNERSHIP PLAN
ARTICLE I--PURPOSE OF THE PLAN
The purpose of the Mobil Incentive Compensation and Stock Ownership Plan is
to promote the creation of shareholder value by encouraging, recognizing and
rewarding sustained outstanding corporate, division, business unit and
individual performance by key Employees of Mobil Corporation and Affiliated
Corporations who are largely responsible for the management, growth and
protection of the business. The Plan in addition provides part of a competitive
total compensation package to attract and retain key Employees.
The components of the Plan include the Short-Term Incentive Program, the
Long-Term Incentive Program and the Stock Ownership Program. The purpose of the
Short-Term Incentive Program is to base a portion of key Employees' total annual
compensation on the performance of the Corporation compared to the performance
of other companies selected by the Committee, with the intention that the key
Employees will receive total compensation that is above the average for
comparable positions paid by such other companies when the Corporation's
comparative performance is above average; total compensation that is equal to
the average for comparable positions paid by these companies when the
Corporation's comparative performance is average; and total compensation that is
below the average for comparable positions when the Corporation's comparative
performance is below average. The Long-Term Incentive Program provides rewards,
based on the performance of the Corporation over a longer term, to those key
Employees who have the potential to contribute significantly to the long-term
growth and success of the Corporation. These awards are denominated in
hypothetical stock or in the form of Restricted Stock, which serves to align the
interests of these key Employees with the interests of shareholders. The purpose
of the Stock Ownership Program is to provide long-term incentive, designed to
encourage Stock ownership by key Employees, thereby directly aligning their
financial interests with those of shareholders. Key Employees receive Stock
Options, which provide them an opportunity to increase their ownership of Stock,
and the Committee is expected to develop guidelines to encourage key Employees
to take advantage of the program to acquire and hold Stock.
ARTICLE II--DEFINITIONS
"Adjusted Net Income" with respect to any fiscal year of the Corporation
means the amount reported as net income in the Income Statement for such year,
adjusted to exclude any of the following items:
(a) extraordinary items (as described in Accounting Principles Board
Opinion No. 30);
(b) gains or losses on the disposition of discontinued operations of a
segment of the business; and
(c) the cumulative effect of changes in accounting principles.
"Affiliated Corporation" means any stock corporation of which a majority of
the voting common or capital stock is owned directly or indirectly by the
Corporation.
"Allotment" means a number of Stock Equivalents granted pursuant to Section
5.3(a).
"Allotment Supplement" means a number of Stock Equivalents credited with
respect to an Allotment pursuant to Section 5.3(b).
"Authorized Share Pool" for any calendar year during any part of which this
Plan is in effect means nine tenths of one percent (0.9%) of the total issued
and outstanding shares of Stock as of December 31 of the preceding year,
cumulative from the effective date of the Plan, subject to adjustment pursuant
to Article IX.
"Award" means a Short-Term Incentive Award or a Long-Term Incentive Award
granted under Article V or an Option granted under Article VI. Awards granted
that are to be paid upon full satisfaction of any applicable conditions are
provisional Awards and are forfeitable until such conditions are satisfied. An
Award is non-forfeitable if the only condition to its payment is passage of
time.
A-1
<PAGE>
"Award Date" means the date an Award is granted.
"Board" means the Board of Directors of the Corporation.
"Chief Executive Officer" means the Employee of the Corporation acting in
such capacity.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time. Reference to a specific provision of the Code shall include such provision
and any regulation or ruling promulgated thereunder.
"Committee" means the Management Compensation and Organization Committee of
the Board or such other committee as may be designated by the Board to
administer the Plan.
"Corporation" means Mobil Corporation, a Delaware corporation, or its
successor.
"Dividend Equivalent" means, in respect of one Stock Equivalent, an amount
equal to the amount of the dividend that would be payable on any Dividend
Payment Date with respect to one share of Stock.
"Dividend Payment Date" means a date on which dividends are paid with
respect to Stock.
"Employee" means any person who is a regular full time employee of the
Corporation or an Affiliated Corporation, including such employees who are
officers or directors of the Corporation. In the discretion of the Committee,
the term may include persons who at the request of the Corporation or any
Affiliated Corporation accept employment with any company in which the
Corporation directly or indirectly has a substantial interest.
"Fair Market Value" of Stock is the mean between the highest and lowest
quoted selling price of Stock on the New York Stock Exchange or, in the
discretion of the Committee, as reported by a recognized central market
reporting system on the date an Award is granted or on any other date the value
of Stock is to be determined, provided that (i) if no sales of Stock shall have
been so made on such Exchange or so reported by such central market reporting
system on such date, or (ii) if in the opinion of the Committee insufficient
sales shall have been made on such date to constitute a representative market,
then Fair Market Value shall be determined by taking a weighted average of the
means between the highest and lowest sales prices on the nearest representative
trading dates before and after the valuation date. The average is to be weighted
inversely by the respective numbers of trading days between the trading dates
and the valuation date.
"Incentive Award" means a Short-Term Incentive Award or a Long-Term
Incentive Award.
"Income Statement" with respect to any fiscal year of the Corporation means
the consolidated statement of income and the accompanying notes to financial
statements for such year included in the Corporation's annual report to
shareholders.
"Long-Term Incentive Award" means an Award granted pursuant to Section 5.3.
"Named Executive Officer" means an Employee described in Section 162(m)(3)
of the Code for the year an Incentive Award is granted.
"Non-Qualified Option" means an Option granted under Article VI which is
not a Qualified Option.
"Option" means an Award granted under Article VI in the form of a right to
purchase Stock evidenced by an instrument containing such provisions as the
Committee may establish.
"Performance Cycle" means any period, beginning not earlier than January 1,
1995, of four successive calendar years.
"Performance Measure" means such measure or indicator of the performance of
the Corporation, an Affiliated Corporation, any division, department or
identifiable segment thereof, or of any individual recipient of an Award as may
be set forth herein or established from time to time by the Committee.
A-2
<PAGE>
"Plan" means this 1995 Mobil Incentive Compensation and Stock Ownership
Plan.
"Prior Plan" means the 1991 Mobil Incentive Compensation and Stock Option
Plan.
"Qualified Option" means an option granted under Article VI which is
designated by the Committee as a Qualified Option and for which the Code
provides for either or both deferral of taxation on exercise or a lower
effective rate of tax on recognition of gain than would be available in respect
of a Non-Qualified Option.
"Restricted Stock" means Stock which bears such restrictive endorsements as
the Committee, in its discretion, shall deem appropriate and necessary to carry
out the purpose of this Plan.
"Short-Term Incentive Award" means an Award granted pursuant to Section
5.2.
"Special Item" with respect to any fiscal year of the Corporation means
each item in excess of $10 million after tax that is reflected in the
Corporation's Adjusted Net Income for such year and is recorded in accordance
with generally accepted accounting principles in one of the following
categories:
(a) Gains or losses on asset sales or dispositions;
(b) Asset write downs;
(c) Litigation or claim judgments or settlements;
(d) Accruals for environmental obligations;
(e) Effect of changes in tax law or rate on deferred tax liabilities;
(f) Accruals for restructuring programs; and
(g) Catastrophic property losses.
"Stock" means the publicly traded common stock of the Corporation or any
successor, including any adjustments in the event of changes in capital
structure of the type described in Article IX.
"Stock Equivalent" means a hypothetical share of Stock credited to an
Employee having a value at any time equal to the Fair Market Value of an actual
share of Stock at that time. Stock Equivalents may be recorded in full shares
only or in full and fractional shares pursuant to such rules as the Committee
shall prescribe.
ARTICLE III--ADMINISTRATION OF THE PLAN
3.1 COMPOSITION OF COMMITTEE
This Plan shall be administered by the Committee which shall be composed of
not less than four members of the Board as may be designated by the Board;
provided that the Committee shall not include any individual who (a) is an
officer or employee of the Corporation or any Affiliated Corporation; (b) is a
former officer of the Corporation or any Affiliated Corporation; (c) is a former
employee of the Corporation or any Affiliated Corporation who receives
compensation for prior service (other than benefits under a tax-qualified
retirement plan) during the taxable year in which such individual serves on the
Committee; (d) is not an outside director as defined under Section 162(m) of the
Code; or (e) has been eligible to receive Awards under this Plan or the Prior
Plan at any time within the 12-month period immediately prior to service as a
member of the Committee; provided that the restrictions set out in clause (d)
shall not apply prior to the annual meeting of shareholders of the Corporation
in 1996 (or such later date as may be permitted under Section 162(m) of the
Code). The Board may designate alternate members of the Committee from eligible
Board members to act in the place and stead of any absent member of the
Committee.
3.2 QUORUM
A majority of the Committee shall constitute a quorum, and the acts of a
majority of the members present at any meeting at which a quorum is present, or
acts approved in writing by all of the members in the absence of a meeting,
shall be the acts of the Committee. Any one or more members of the Committee may
participate in a meeting by means of a conference telephone or similar
communications equipment by means of which all
A-3
<PAGE>
persons participating in the meeting can hear and speak to each other.
Participation by such means shall constitute presence in person at such
meeting.
3.3 POWERS
The Committee shall have full and final authority to operate, manage and
administer the Plan on behalf of the Corporation. This authority includes, but
is not limited to:
(a) The power to grant Awards conditionally or unconditionally,
subject to any applicable limitations in this Plan,
(b) The power to establish Performance Measures upon which Awards
shall be based; provided that any changes to the Performance Measures
applicable to Named Executive Officers set forth in Article V shall be
subject to approval by a separate vote of the shareholders of the
Corporation,
(c) The power to make the certification referred to in Section 3.4(b),
(d) The power to reduce the amount of any Award (other than an Award
that has become non-forfeitable),
(e) The power to determine whether Incentive Awards shall be expressed
in United States currency, shares of Stock, Restricted Stock, or any
combination thereof,
(f) The power to prescribe the form or forms of the instruments
evidencing Awards granted under this Plan,
(g) The power to pay and to defer payment of Incentive Awards which
have become non-forfeitable,
(h) The power to direct the Corporation to make the conversions,
accruals and payments provided for by the Plan,
(i) The power to interpret the Plan and to make any determination of
fact incident to the operation of the Plan,
(j) The power to provide regulations for the operation of the various
features of the Plan, and otherwise to prescribe regulations for the
interpretation, management and administration of the Plan,
(k) The power to delegate responsibility for Plan operation,
management and administration on such terms, consistent with the Plan, as
the Committee may establish,
(l) The power to delegate to other persons the responsibility of
performing ministerial acts in furtherance of the Plan's purpose, and
(m) The power to engage the services of persons, companies, or
organizations, including but not limited to banks, insurance companies,
brokerage firms, and consultants, in furtherance of the Plan's purpose.
3.4 CERTIFICATION
No Short-Term Incentive Award or Long-Term Incentive Award will be paid to
a Named Executive Officer unless the Committee has certified in writing (which
writing may include approved minutes of a meeting of the Committee) that the
Adjusted Net Income and Special Items, or the average of the Adjusted Net Income
amounts for the years included in a Performance Cycle, as the case may be, was
equal to or in excess of the amount required for the granting of such Award
hereunder.
3.5 COMMUNICATION OF AWARDS
The Committee shall timely communicate in writing to each Employee to whom
an Award is granted in accordance with this Plan a description of such Award,
including the terms and any conditions of its payment.
3.6 ACCOUNTS
(a) For the purpose of accounting for provisional Awards and
non-forfeitable Awards deferred as to payment, the Corporation shall establish
bookkeeping accounts bearing the name of each Employee receiving such Awards.
Except as provided below, each account shall be unfunded, and shall not be a
trust for the benefit of the Employee; the existence of such accounts shall not
give any Employee any rights superior to those of unsecured general creditors of
the Corporation.
A-4
<PAGE>
(b) With respect to non-forfeitable Awards, payment of which is deferred,
the Committee may, in its discretion, direct the Corporation:
(i) To pay an amount equal to such Award to a trustee or fiduciary in
trust for the benefit of one or more Employees, as the Committee may
designate, with instructions to provide for the investment thereof during
any period of deferment; or
(ii) To allocate an amount equal to such Award to an investment manager
(who may, but need not, be an Employee of the Corporation or an Affiliated
Corporation) with instructions to provide for the investment thereof during
the period of deferment either in the discretion of such manager or one or
more designated investment advisors.
ARTICLE IV--ELIGIBILITY
4.1 ELIGIBLE EMPLOYEES
Awards will be granted only to key Employees described in Article I,
selected or determined by (or pursuant to delegation of authority from) the
Committee in its sole discretion. An Incentive Award may be granted within a
reasonable period after an employee's termination of service and such Incentive
Award shall be deemed granted to an Employee. Neither the members of the
Committee nor any member of the Board who is not an Employee shall be eligible
to receive an Award. In lieu of determining individual Employees to whom Awards
may be granted and the amounts of such Awards, the Committee may in its
discretion from time to time authorize such determinations with respect to
Employees other than Named Executive Officers to be made by the Chief Executive
Officer or by senior management of the divisions, departments or other
identifiable segments of the Corporation or of Affiliated Corporations or their
divisions, departments or other identifiable segments, provided that such
determinations shall be made in accordance with such rules, regulations and
guidance as the Committee shall prescribe. Named Executive Officers, other
Officers of the Corporation, Directors who are Employees and other Employees to
whom the Committee delegates final authority to determine Awards under the Plan
are eligible only for Awards granted directly by the Committee.
4.2 RELEVANT FACTORS
In selecting individual Employees to whom Awards shall be granted at any
time, as well as in determining the amount, type, terms and conditions of any
Award, the Committee (or as authorized, its representative) shall weigh such
factors as are relevant to accomplish the purpose of the Plan as stated in
Article I. No Employee shall be eligible for the grant of any Option under the
Plan if at the time of grant the Employee, directly or indirectly, owns Stock
possessing more than 5% of the combined voting power of all classes of Stock of
the Corporation and its Affiliated Corporations. No Named Executive Officer
shall be eligible for the grant of any Award that would cause the applicable
amounts in Articles V or VI to be exceeded.
ARTICLE V--INCENTIVE AWARDS
5.1 PROVISIONAL AND NON-FORFEITABLE INCENTIVE AWARDS
The Committee may in its discretion grant Incentive Awards that are provisional
or non-forfeitable in accordance with such criteria, at such intervals, in such
form and upon such conditions as the Committee may establish, subject to the
limitations set forth in this Plan. Incentive Awards, whether provisional or
non-forfeitable, may be expressed in United States currency, shares of Stock,
shares of Restricted Stock or any combination thereof, and upon satisfaction of
the relevant conditions, if any, may be paid or distributed currently, deferred
for payment at a later date, or paid in part currently and in part at a later
date, all as the Committee in its discretion shall determine.
5.2 SHORT-TERM INCENTIVE AWARDS
The Committee in its sole discretion may grant or approve Short-Term
Incentive Awards to Employees from time to time. The amounts of such Awards
shall be determined on the basis of such Performance Measures as the Committee
shall establish from time to time. In the case of Named Executive Officers, the
Performance Measure for Short-Term Incentive Awards shall be the Adjusted Net
Income for the year prior to the year in which any such Award is granted,
further adjusted to exclude the effects of any Special Items for such year.
A-5
<PAGE>
The amount of the Short-Term Incentive Award for any year to a Named Executive
Officer who is the Chief Executive Officer shall be 0.1% of such Performance
Measure, and the amount of the Short-Term Incentive Award for any year to any
other Named Executive Officer shall be 0.0375% of such Performance Measure, in
each case subject to reduction pursuant to Section 5.4.
5.3 LONG-TERM INCENTIVE AWARDS
(a) The Committee in its sole discretion may grant Allotments comprised of
a specified number of Stock Equivalents to Employees from time to time. Each
Allotment shall be granted during the first year of, and shall be in respect of,
a Performance Cycle and shall remain provisional until the Committee grants or
determines not to grant a Long-Term Incentive Award in respect of such Allotment
pursuant to Section 5.3(c). The maximum number of Stock Equivalents that may
comprise Allotments granted at any time during any calendar year during any part
of which this Plan is in effect shall be the number of shares of Stock in the
Authorized Share Pool for such calendar year reduced by:
(i) the number of shares of Stock upon which Options have theretofore
been granted pursuant to Section 6.2 during such calendar year;
(ii) the number of Stock Equivalents comprising Allotments that have
theretofore been granted pursuant to this Section 5.3(a) during such
calendar year;
(iii) the number of Stock Equivalents comprising Allotment Supplements
that have theretofore been credited pursuant to Section 5.3(b) during such
calendar year or are reasonably estimated to be so credited during the
remainder of such calendar year; and
(iv) the number of shares of Restricted Stock, if any, that have
theretofore been awarded pursuant to Section 5.3(d) during such calendar
year.
(b) On each Dividend Payment Date after the Award Date of any Allotment, an
Allotment Supplement shall be credited in respect of such Allotment and any
Allotment Supplements theretofore credited pursuant to this Section 5.3(b) in
respect of such Allotment. The number of Stock Equivalents that shall comprise
an Allotment Supplement shall be determined by dividing (i) the Dividend
Equivalents in respect of the number of Stock Equivalents that comprise such
Allotment and any Allotment Supplements theretofore credited pursuant to this
Section 5.3(b) in respect of such Allotment by (ii) the Fair Market Value of a
share of Stock on the Dividend Payment Date.
(c) After the end of each Performance Cycle, all Stock Equivalents that
comprise an Allotment in respect of such Performance Cycle and all Allotment
Supplements theretofore credited in respect of such Allotment shall be converted
to a Long-Term Incentive Award in an amount, if any, to be based on Performance
Measures established by the Committee from time to time. In the case of each
Named Executive Officer, the Performance Measure shall be Adjusted Net Income,
and the amount of the Long-Term Incentive Award granted to each such Officer in
respect of a Performance Cycle, irrespective of the number of Stock Equivalents
credited to the account of such Officer in respect of such Performance Cycle,
shall be 0.2% of the average of the Adjusted Net Income for each of the four
years of such Performance Cycle, subject to reduction pursuant to Section 5.4.
(d) In addition to the Long-Term Incentive Awards described in Sections
5.3(a), (b) and (c), the Committee in its sole discretion may grant Long-Term
Incentive Awards in the form of Restricted Stock to such Employees as it shall
identify as having extraordinary potential to make a long-term contribution to
the success of the Corporation. The maximum number of shares of Restricted Stock
that can be the subject of any such grant shall be 10,000, subject to adjustment
in accordance with Article IX. No Award may be made pursuant to this Section
5.3(d) to any person who at the time of the Award holds Restricted Stock granted
pursuant to this Section 5.3(d) as to which all restrictions applicable to such
Restricted Stock have not lapsed. The foregoing determination as to whether
restrictions have lapsed shall be made without regard to any potential or actual
modification of such restrictions after the original grant date. The maximum
number of shares of Restricted Stock that may be granted at any time during any
calendar year during any part of which this Plan is in effect shall be the
number of shares in the Authorized Share Pool for such calendar year reduced by:
(i) the number of shares of Stock upon which Options have theretofore
been granted pursuant to Section 6.2 during such calendar year;
A-6
<PAGE>
(ii) the number of Stock Equivalents comprising Allotments that have
theretofore been granted pursuant to Section 5.3(a) during such calendar
year;
(iii) the number of Stock Equivalents comprising Allotment Supplements
that have theretofore been credited pursuant to Section 5.3(b) during such
calendar year or are reasonably expected to be so credited during the
remainder of such calendar year; and
(iv) the number of shares of Restricted Stock that have theretofore been
awarded pursuant to this Section 5.3(d) during such calendar year.
5.4 REDUCTION OF AWARDS
(a) The Committee in its sole discretion may, but shall not be required to,
reduce the amount of, or not grant, any Short-Term Incentive Award or any Long-
Term Incentive Award that could otherwise be granted, based on such Performance
Measures or other considerations as it deems appropriate.
(b) No Short-Term Incentive Award or Long-Term Incentive Award that could
otherwise be granted shall be granted if no dividend has been paid to holders of
Stock in the preceding 12 months. Allotments or Allotment Supplements with
respect to which Long-Term Incentive Awards are prohibited by the preceding
sentence shall be cancelled.
5.5 DEATH OF EMPLOYEE
Any provisional Incentive Award shall be cancelled upon death of the
Employee during the provisional period except as the Committee may otherwise
provide. If a provisional Incentive Award is cancelled by reason of the death of
the Employee, the Committee may authorize an alternative disposition in its
discretion.
5.6 DEFERRAL OF INCENTIVE AWARDS
The Committee may, in its sole discretion, permit or require deferral of
payment of any Incentive Award, subject to such terms, conditions, rules and
regulations as the Committee shall prescribe. Deferred Incentive Awards may be
denominated in Stock Equivalents or such other units as the Committee shall
prescribe. Where a deferred Incentive Award is denominated in Stock Equivalents,
each such Stock Equivalent shall be valued at an amount equal to the Fair Market
Value of a share of Stock on the date that payment would have been due but for
the deferral (or the Fair Market Value of a share of Stock averaged over such
dates as the Committee shall establish from time to time). An account bearing
the name of the Employee as provided in Section 3.6 shall be credited with the
number of Stock Equivalents determined on the basis of such value. Each such
account shall also be credited on each Dividend Payment Date with an amount of
Dividend Equivalents in respect of the Stock Equivalents in the account.
Dividend Equivalents may, in the discretion of the Committee, be disbursed in
cash to the Employee to whose account they have been credited or accumulated in
such account in the form of additional Stock Equivalents based on the Fair
Market Value of a share of Stock on the Dividend Payment Date. Stock Equivalents
resulting from deferral of Incentive Awards shall not be charged against any
Authorized Share Pool.
5.7 PAYMENT OF INCENTIVE AWARDS
Payment of Incentive Awards shall be made, in the sole discretion of the
Committee, in cash, Stock, Restricted Stock, or any combination of cash, Stock
and Restricted Stock; provided that the Committee may prescribe by regulation
circumstances in which amounts payable to any person who is or was a director or
officer subject to Section 16 of the Securities Exchange Act of 1934 shall be
paid solely in cash.
ARTICLE VI--STOCK OPTION AWARDS
6.1 NUMBER OF SHARES
The maximum number of shares of Stock upon which Options may be granted at
any time during any calendar year during any part of which this Plan is in
effect shall be the number of shares in the Authorized Share Pool for such
calendar year reduced by:
(a) the number of shares of Stock upon which Options have theretofore been
granted pursuant to Section 6.2 during such calendar year;
A-7
<PAGE>
(b) the number of Stock Equivalents comprising Allotments that have
theretofore been granted pursuant to Section 5.3(a) during such calendar
year;
(c) the number of Stock Equivalents comprising Allotment Supplements
that have theretofore been credited pursuant to Section 5.3(b) during such
calendar year or are reasonably estimated to be so credited during the
remainder of such calendar year; and
(d) the number of shares of Restricted Stock that have theretofore been
awarded pursuant to Section 5.3.(d) during such calendar year.
Of the shares of Stock upon which Options may be granted in any year
pursuant to the foregoing sentence, no more than 2,000,000 shares (subject to
adjustment pursuant to Article IX) per year, cumulative from the effective date
of the Plan, shall be available for the grant of Incentive Stock Options.
6.2 OPTION GRANTS
The Committee in its sole discretion may from time to time grant Options on
such terms and subject to such conditions as it shall deem appropriate, subject
to the applicable provisions of this Plan; provided that the maximum number of
shares of Stock upon which Options may be granted to any Employee in any
calendar year shall be 150,000, subject to adjustment as provided in Article IX.
As to each Option, the Committee shall have full and final authority in its
discretion: (a) to determine whether the same shall be a Qualified Option or a
Non-Qualified Option or both, (b) to determine the number of shares of Stock
subject to each Option, subject to the limit set forth in the immediately
preceding sentence, (c) to determine the purchase price of the shares of Stock
subject to each Option (the "Option Price"), which price shall be not less than
the minimum price specified in Section 6.4, and (d) to determine the time or
times when each Option shall become exercisable and the duration of the exercise
period, which period shall not exceed the maximum period specified in Section
6.3.
6.3 TERM OF OPTIONS
The full term of each Option granted hereunder shall be for such period as
the Committee shall determine, but not for more than ten years from the date of
granting thereof. Each Option shall be subject to earlier termination as
provided in Sections 6.8 and 6.9.
6.4 OPTION PRICE
The Option Price shall be determined by the Committee at the time any
Option is granted and shall be not less than 100 percent of the Fair Market
Value of the shares covered thereby at the time the Option is granted (but in no
event less than par value).
6.5 NON-TRANSFERABILITY OF OPTIONS
No Option granted under this Plan shall be transferable by the grantee
otherwise than by will or the laws of descent and distribution, and such Option
may be exercised during the grantee's lifetime only by the grantee; provided
that the Committee may in its sole discretion provide in the instrument
evidencing any Non-Qualified Option any terms and conditions upon which such
Non-Qualified Option may be transferred if the Committee determines, based upon
such advice of counsel (which may be counsel to the Corporation) as it deems
appropriate, that a Registration Statement under the Securities Act of 1933 is
in effect, or an exemption from the requirements for such a Registration
Statement exists, for each of (a) the transfer of such Non-Qualified Option; (b)
the issuance of Stock to the transferee of the Non-Qualified Option upon
exercise of the Non-Qualified Option; and (c) any sale by the transferee of the
Option of Stock issued to such transferee upon exercise of the Non-Qualified
Option.
6.6 INCENTIVE STOCK OPTIONS
Any Option issued hereunder which is intended to qualify as an "incentive
stock option" as described in Section 422 of the Code (an "ISO") shall be
subject to the limitations or requirements as may be necessary for the purposes
of Section 422 of the Code to the extent and in such form as determined by the
Committee in its discretion.
A-8
<PAGE>
6.7 EXERCISE OF OPTIONS
Each Option granted under this Plan shall be exercisable on such date or
dates and during such period and for such number of shares as shall be
determined pursuant to the provisions of the instrument evidencing such Option.
A person electing to exercise an Option shall give written notice to the
Corporation or its agent of such election and of the number of shares he or she
has elected to purchase and shall at the time of exercise tender the full
purchase price of the shares he or she has elected to purchase plus any required
withholding taxes. Until a certificate or certificates for the shares so
purchased has been issued to, or for the benefit of, such person, or until an
entry in lieu of such a certificate is made on the stock books of the
Corporation, he or she shall possess no rights of a record holder with respect
to any of such shares. The purchase price may be paid in cash, by certified
check or in shares of Stock (excluding fractional shares) or any combination
thereof. Shares of Stock delivered in payment of the purchase price shall be
valued at the Fair Market Value of such shares on the date of exercise of the
Option. The shares to be delivered upon exercise of Options under this Plan
shall be made available, at the discretion of the Board, either from authorized
but unissued shares or from previously issued and reacquired shares of Stock
held by the Corporation as treasury shares, including shares purchased in the
open market.
6.8 OPTION UNAFFECTED BY CHANGE IN DUTIES
No Option shall be affected by any change of duties or position of the
optionee (including transfer to or from an Affiliated Corporation), so long as
he or she continues to be an Employee. If an optionee shall cease to be an
Employee for any reason other than death, such Option shall thereafter be
exercisable only to the extent of the purchase rights, if any, which have
accrued as of the date of such cessation; provided that (i) the Committee may
provide in the instrument evidencing any Option that the Committee may in its
absolute discretion, upon any such cessation of employment, determine (but be
under no obligation to determine) that such accrued purchase rights shall be
deemed to include additional shares covered by such Option and (ii) unless the
Committee shall otherwise provide in the instrument evidencing any Option, upon
any such cessation of employment, such remaining rights to purchase shall in any
event terminate upon the expiration of the original term of the Option where
such cessation of employment is on account of retirement under a Corporation
sponsored retirement plan on or after the Employee attains age sixty, on account
of long-term disability, or on account of any other reason specified by the
Committee, or its delegate, for the purpose of making this clause applicable,
and otherwise, upon the expiration of three months from such date of
termination, but in no event later than the expiration of the original term of
the Option.
6.9 DEATH OF OPTIONEE
Should an optionee die while in possession of the legal right to exercise
an Option or Options under this Plan, such person (the "personal
representative") as shall have acquired, by will or by the laws of descent and
distribution, the right to exercise any Option theretofore granted may exercise
such Option (i) at any time up to the expiration of the original term of the
Option in the following cases: (a) where the optionee was an Employee on the
date of death and (b) where the optionee was not an Employee on the date of
death and his or her employment ceased on account of retirement under a
Corporation sponsored plan on or after the Employee attained age sixty, on
account of long term disability, or on account of any other reason specifically
approved by the Committee or its delegate for the purpose of making this clause
applicable; or (ii) at any time prior to one year from the date of death where
the optionee was not an Employee on the date of death and his or her employment
ceased on account of a cause other than those specified in clause (i)(b) above,
provided that such Option shall expire in all events no later than the last day
of the original term of such Option, and provided further, that any such
exercise shall be limited to the purchase rights which have accrued as of the
date when the optionee ceased to be such an Employee, whether by death or
otherwise, provided further, however, that the Committee may provide in the
instrument evidencing any Option that all shares covered by such Option shall
become subject to purchase immediately upon the death of the optionee.
ARTICLE VII--BENEFITS PLANS
Incentive Awards, Awards of Restricted Stock and Awards of Options under
the Plan are discretionary and are additional to and not a part of regular
salary. Incentive Awards, Awards of Restricted Stock and Awards of Options may
not be used in determining the amount of compensation for any purpose under the
benefit plans of the Corporation, or an Affiliated Corporation, except (1) an
Incentive Award made to an
A-9
<PAGE>
Employee may be used in determining the amount of compensation for the purpose
of any retirement or life insurance plan of the Corporation and its Affiliated
Corporations to the extent provided from time to time in such plan, and (2) as
the Committee may otherwise from time to time expressly provide.
ARTICLE VIII--AMENDMENT, SUSPENSION OR TERMINATION OF THE PLAN
The Board may suspend the Plan or any part thereof at any time or may
terminate the Plan in its entirety. Awards shall not be granted under any part
of the Plan affected by a suspension, nor shall Awards be granted after Plan
termination.
The Board may also amend the Plan from time to time, except that amendments
which affect the following subjects must be approved by shareholders of the
Corporation:
(a) The qualifications for eligibility to become or remain a member of
the Committee;
(b) The Performance Measures and the amounts of the Short-Term Incentive
Awards and the Long-Term Incentive Awards for Named Executive Officers;
(c) Except as provided in Article IX relating to capital changes, the
number of shares in the Authorized Share Pool for any calendar year, the
maximum number of shares of Stock upon which Options may be granted to any
person in any calendar year and the maximum number of shares of Restricted
Stock that may be awarded to any person pursuant to Section 5.3(d);
(d) The maximum term of Options granted;
(e) The minimum Option Price;
(f) The term of the Plan;
(g) The requirements as to eligibility for participation in the Plan;
(h) The prohibition against granting Awards to a member of the
Committee; and
(i) The provision requiring that Employees to whom the Committee has
delegated final authority to determine Awards under the Plan are
eligible only for Awards granted directly by the Committee.
Awards granted prior to suspension or termination of the Plan may not be
cancelled solely because of such suspension or termination, except with the
consent of the grantee of the Award.
ARTICLE IX--CHANGES IN CAPITAL STRUCTURE
Stock, Stock Equivalents, Restricted Stock and the instruments evidencing
Options granted hereunder shall be subject to adjustments in the event of
changes in the outstanding stock of the Corporation by reason of Stock
dividends, Stock splits, recapitalizations, reorganizations, mergers,
consolidations, combinations, exchanges or other relevant changes in
capitalization occurring after the date of an Award to the same extent as would
affect an actual share of Stock issued and outstanding on the effective date of
such change. In the event of any such change, the aggregate number and classes
of shares comprising the Authorized Share Pool for the calendar year in which
such change occurs, the number of shares upon which Options may thereafter be
granted to any person pursuant to Section 6.2, and the number of shares of
Restricted Stock that may thereafter be awarded to any person pursuant to
Section 5.3(d) shall be appropriately adjusted as determined by the Board so as
to reflect such change.
ARTICLE X--EFFECTIVE DATE AND TERM OF THE PLAN
The Plan became effective January 1, 1995, subject to the affirmative vote
of the holders of shares entitled to cast a majority of the votes entitled to be
cast (in person or by proxy) for or against approval of the Plan at the Annual
Meeting of the shareholders of the Corporation in 1995. The Plan shall continue
until such time as it may be terminated by action of the Board; provided,
however, that the Plan, if not so terminated, shall be submitted to the
shareholders of the Corporation for their approval not later than December 31,
2000. No Options may be granted under this Plan subsequent to April 30, 2000.
A-10
<PAGE>
ARTICLE XI--TRANSITION--1991 INCENTIVE COMPENSATION AND STOCK OPTION PLAN
(a) This Plan supersedes the Prior Plan, and no new Incentive Awards or
Options, as defined in the Prior Plan, may be granted under the Prior Plan after
the effective date of this Plan, except that (i) short-term incentive awards in
respect of 1994 shall be payable pursuant to the Prior Plan in 1995 and (ii)
options granted in 1995 to persons, other than Named Executive Officers, that
are subject to the laws of any foreign jurisdiction that require, or condition
favorable tax treatment on, approval of the plan pursuant to which options are
granted prior to the grant thereof shall be granted pursuant to the Prior Plan
but shall count against the Authorized Share Pool for 1995; provided that
nothing herein shall modify the terms of the Prior Plan if this Plan is not
approved by vote of the shareholders of the Corporation as contemplated by
Article X. Incentive Awards including conditional Incentive Awards made and
Options granted under the Prior Plan before the effective date of this Plan
shall remain outstanding and shall be administered under the terms of the Prior
Plan.
(b) Any Awards granted under this Plan prior to approval of this Plan by
the shareholders of the Corporation shall be conditional upon, and forfeited
upon the failure of, such approval at the Annual Meeting of Stockholders of
Mobil Corporation in 1995; provided that failing such approval any such Award to
a person other than a Named Executive Officer that could have been granted under
the terms of the Prior Plan may, in the discretion of the Committee, be deemed
to have been so granted.
A-11
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-12
<SEQUENCE>4
<FILENAME>0004.txt
<DESCRIPTION>COMP. OF RATIO OF EARNINGS
<TEXT>
<PAGE>
EXHIBIT 12
EXXON MOBIL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
<TABLE>
<CAPTION>
Years Ended December 31,
-------------------------------------------
2000 1999 1998 1997 1996
------- ------- ------- ------- -------
(millions of dollars)
<S> <C> <C> <C> <C> <C>
Income before extraordinary item
and cumulative effect of
accounting change................ $15,990 $ 7,910 $ 8,144 $11,732 $10,474
Excess/(shortfall) of dividends
over earnings of affiliates owned
less than 50 percent accounted
for by the equity method......... (354) 300 164 (64) 186
Provision for income taxes(1)..... 11,630 3,632 4,390 8,140 8,201
Capitalized interest.............. (409) (423) (400) (448) (467)
Minority interests in earnings of
consolidated subsidiaries........ 346 139 261 523 500
------- ------- ------- ------- -------
27,203 11,558 12,559 19,883 18,894
------- ------- ------- ------- -------
Fixed Charges:(1)
Interest expense--borrowings..... 637 826 769 811 944
Capitalized interest............. 653 606 564 595 598
Rental expense representative of
interest factor................. 551 617 795 818 819
Dividends on preferred stock..... 12 8 6 5 4
------- ------- ------- ------- -------
1,853 2,057 2,134 2,229 2,365
------- ------- ------- ------- -------
Total adjusted earnings available
for payment of fixed charges..... $29,056 $13,615 $14,693 $22,112 $21,259
======= ======= ======= ======= =======
Number of times fixed charges are
earned........................... 15.7 6.6 6.9 9.9 9.0
</TABLE>
- - - - - - ---------------------
Note:
(1) The provision for income taxes and the fixed charges include Exxon Mobil
Corporation's share of 50 percent owned companies and majority owned
subsidiaries that are not consolidated.
1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-21
<SEQUENCE>5
<FILENAME>0005.txt
<DESCRIPTION>SUBSIDIARIES OF THE REGISTRANT
<TEXT>
<PAGE>
EXHIBIT 21
Subsidiaries of the Registrant (1), (2) and (3)
AT DECEMBER 31, 2000
<TABLE>
<CAPTION>
Percentage
of Voting
Securities
Owned
Directly
or State or
Indirectly Country
by of
Registrant Organization
---------- -----------------
<S> <C> <C>
Aera Energy, LLC (5)...................................... 48.2 California
Al-Jubail Petrochemical Company (4) (5)................... 50 Saudi Arabia
Ampolex (CEPU) Pte Ltd.................................... 100 Singapore
Ancon Insurance Company, Inc.............................. 100 Vermont
BEB Erdgas und Erdoel GmbH (4) (5)........................ 50 Germany
Caspian Pipeline Consortium (5)........................... 7.5 Russia/Kazakhstan
Castle Peak Power Company Limited (5)..................... 60 Hong Kong
Chalmette Refining, LLC (4) (5)........................... 50 Delaware
Compania Minera Disputada de Las Condes Limitada.......... 100 Chile
Delhi Petroleum Pty. Ltd.................................. 100 Australia
Duke Energy Trading and Marketing, LLC (5)................ 40 Delaware
Esso Australia Resources Pty. Ltd......................... 100 Australia
Esso Austria GmbH......................................... 100 Austria
Esso Brasileira de Petroleo Limitada...................... 100 Brazil
ESSO BVBA/SPRL............................................ 100 Belgium
Esso Capital B.V.......................................... 100 Netherlands
Esso Chile Petrolera Limitada............................. 100 Chile
Esso Colombiana Limited................................... 100 Delaware
Esso Coordination Center.................................. 100 Belgium
ESSO Deutschland GmbH..................................... 100 Germany
Esso Exploration and Production Angola (Block 33) Limited. 100 Bahamas
Esso Exploration and Production Chad Inc.................. 100 Delaware
Esso Exploration and Production Norway AS................. 100 Norway
Esso Exploration and Production UK Limited................ 100 England
Esso Exploration Angola (Block 15) Limited................ 100 Bahamas
Esso Exploration Angola (Block 17) Limited................ 100 Bahamas
Esso Holding Company Singapore Limited.................... 100 Bahamas
Esso Hong Kong Limited.................................... 100 Hong Kong
Esso Ireland Limited...................................... 100 Ireland
Esso Italiana S.r.l....................................... 100 Italy
Esso Malaysia Berhad...................................... 65 Malaysia
Esso Natuna Ltd........................................... 100 Bahamas
Esso Nederland B.V. ...................................... 100 Netherlands
Esso Norge AS............................................. 100 Norway
Esso Petroleum Company, Limited........................... 100 England
Esso Production Malaysia Inc.............................. 100 Delaware
ESSO Schweiz GmbH......................................... 100 Switzerland
Esso Sekiyu Yugen Kaisha.................................. 100 Japan
Esso Sociedad Anonima Petrolera Argentina................. 100 Argentina
Esso Societe Anonyme Francaise............................ 81.548 France
Esso (Thailand) Public Company Limited.................... 87.5 Thailand
Esso Trading Company of Abu Dhabi......................... 100 Delaware
</TABLE>
1
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Voting
Securities
Owned
Directly
or State or
Indirectly Country
by of
Registrant Organization
---------- --------------
<S> <C> <C>
Exxon Azerbaijan Limited............................... 100 Bahamas
Exxon Capital Corporation.............................. 100 New Jersey
Exxon Chemical Arabia Inc.............................. 100 Delaware
Exxon Chemical Asset Management Partnership............ 91.01 Delaware
Exxon Equity Holding Company........................... 100 Delaware
Exxon Land Development, Inc............................ 100 Arizona
Exxon Mobile Bay Limited Partnership................... 92.68 Delaware
Exxon Overseas Investment Corporation.................. 100 Delaware
Exxon Yemen Inc. ...................................... 100 Delaware
ExxonMobil Asia Pacific Pte. Ltd....................... 100 Singapore
ExxonMobil Aviation International Limited.............. 100 England
ExxonMobil (Barbados) Foreign Sales Corporation........ 100 Barbados
ExxonMobil Central Europe Holding GmbH ................ 100 Germany
ExxonMobil Chemical Antwerp Ethylene................... 100 Belgium
ExxonMobil Chemical Films Europe, Inc.................. 100 Delaware
ExxonMobil Chemical France SARL........................ 99.77 France
ExxonMobil Chemical Holland B.V. ...................... 100 Netherlands
ExxonMobil Chemical Holland LLC........................ 100 Delaware
ExxonMobil Chemical Limited............................ 100 England
ExxonMobil Chemical Olefins Inc........................ 100 Delaware
ExxonMobil Chemical Operations Private................. 100 Singapore
ExxonMobil Chemical Polymeres SNC...................... 99.77 France
ExxonMobil Chemical Singapore Private Limited ......... 100 Singapore
ExxonMobil Coal USA, Inc............................... 100 Delaware
ExxonMobil - Egypt (S.A.E.)............................ 100 Egypt
ExxonMobil Energy Limited.............................. 100 Hong Kong
ExxonMobil Far East Holdings Ltd....................... 100 Bahamas
ExxonMobil Global Services Company..................... 100 Delaware
ExxonMobil Holding Company Holland LLC ................ 100 Delaware
ExxonMobil Kazakhstan Ventures Inc..................... 100 Delaware
ExxonMobil Oil Indonesia Inc........................... 100 Delaware
ExxonMobil Oil Singapore Pte. Ltd...................... 100 Singapore
ExxonMobil Pipeline Company............................ 100 Delaware
ExxonMobil Sales and Supply Corporation................ 100 Delaware
Fina Antwerp Olefins N.V. (5).......................... 35 Belgium
Imperial Oil Limited................................... 69.6 Canada
International Colombia Resources Corporation........... 100 Delaware
Mineraloelraffinerie Oberrhein GmbH & Co. KG (5)....... 25 Germany
Mobil Africa........................................... 100 France
Mobil Argentina S.A. .................................. 99.999 Argentina
Mobil Australia Resources Company Pty Limited.......... 100 Australia
Mobil Business Resources Corporation................... 100 Delaware
Mobil California Exploration & Producing Asset Company. 100 Delaware
Mobil Cerro Negro, Ltd................................. 100 Cayman Islands
Mobil Corporation...................................... 100 Delaware
Mobil de Colombia S.A.................................. 98.1 Colombia
Mobil Development Nigeria Inc.......................... 100 Delaware
Mobil Equatorial Guinea Inc............................ 100 Delaware
Mobil Erdgas-Erdoel GmbH............................... 100 Germany
</TABLE>
2
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Voting
Securities
Owned
Directly
or State or
Indirectly Country
by of
Registrant Organization
---------- ----------------
<S> <C> <C>
Mobil Europe Inc.................................. 100 Delaware
Mobil Exploration Indonesia Inc................... 100 Delaware
Mobil Exploration Nigeria Inc..................... 100 Delaware
Mobil Exploration Norway Inc...................... 100 Delaware
Mobil Exploration & Producing Australia Pty Ltd... 100 Australia
Mobil Gas Marketing (U.K.) Limited................ 100 England
Mobil Holdings (Europe and Africa) Limited........ 100 Delaware
Mobil International Petroleum Corporation......... 100 Delaware
Mobil Investments Canada Inc...................... 100 Delaware
Mobil Investments Inc............................. 100 Delaware
Mobil Natural Gas Inc............................. 100 Delaware
Mobil North Sea Limited........................... 100 Delaware
Mobil Oil Abu Dhabi Inc........................... 100 Delaware
Mobil Oil Australia Pty. Ltd...................... 100 Australia
Mobil Oil Austria Aktiengesellschaft.............. 100 Austria
Mobil Oil B.V..................................... 100 Netherlands
Mobil Oil Canada, Ltd............................. 100 Canada
Mobil Oil Corporation............................. 100 New York
Mobil Oil Credit Corporation...................... 100 Delaware
Mobil Oil Exploration & Producing Southeast Inc... 100 Delaware
Mobil Oil Francaise............................... 99.98 France
Mobil Oil Hong Kong Limited....................... 100 Hong Kong
Mobil Oil Malaysia Sendirian Berhad............... 100 Malaysia
Mobil Oil New Zealand Limited..................... 100 New Zealand
Mobil Oil Nigeria Public Limited Company.......... 60 Nigeria
Mobil Pase Inc.................................... 100 Delaware
Mobil Petroleum Company Inc....................... 100 Delaware
Mobil Pipe Line Company........................... 100 Delaware
Mobil Producing Netherlands Inc................... 100 Delaware
Mobil Producing Nigeria Unlimited................. 100 Nigeria
Mobil Producing Texas & New Mexico Inc............ 100 Delaware
Mobil Qatargas Inc................................ 100 Delaware
Mobil QM Gas Inc.................................. 100 Delaware
Mobil Refining Australia Pty Ltd.................. 100 Australia
Mobil Rocky Mountain Inc.......................... 100 Delaware
Mobil Sekiyu Yugen Kaisha......................... 100 Japan
Mobil Shipping and Transportation Company......... 100 Marshall Islands
Mobil Trading and Supply Limited.................. 100 England
Mobil U.S. Properties Inc......................... 100 Delaware
Mobil Yanbu Petrochemical Company Inc............. 100 Delaware
Mobil Yanbu Refining Company Inc.................. 100 Delaware
Nederlandse Aardolie Maastschappij B.V. (4) (5)... 50 Netherlands
oy Esso ab........................................ 100 Finland
Paxon Polymer Company, L.P. II.................... 92.83 Delaware
Qatar Liquefied Gas Company Limited (5)........... 10 Qatar
Ras Laffan Liquefied Natural Gas Company Ltd. (5). 26.5 Qatar
Saudi Aramco Mobil Refinery Company Ltd. (4) (5).. 50 Saudi Arabia
Saudi Yanbu Petrochemical Co. (4) (5)............. 50 Saudi Arabia
</TABLE>
3
<PAGE>
<TABLE>
<CAPTION>
Percentage
of Voting
Securities
Owned
Directly
or State or
Indirectly Country
by of
Registrant Organization
---------- ----------------
<S> <C> <C>
Schubert Beteiligungs-GmbH........................ 73.55 Germany
SeaRiver Maritime Financial Holdings, Inc......... 100 Delaware
SeaRiver Maritime, Inc............................ 100 Delaware
Standard Marine Tonsberg AS....................... 100 Norway
Superior Oil (U.K.) Limited....................... 100 England
Tengizchevroil (5)................................ 25 Kazakhstan
TonenGeneral Sekiyu K.K. ......................... 50.021 Japan
Tonen Kagaku K.K. ................................ 50.021 Japan
</TABLE>
- - - - - - ---------------------
NOTES:
(1) For the purposes of this list, if the registrant owns directly or
indirectly approximately 50 percent of the voting securities of any
person and approximately 50 percent of the voting securities of such
person is owned directly or indirectly by another interest, or if the
registrant includes its share of net income of any other unconsolidated
person in consolidated net income, such person is deemed to be a
subsidiary.
(2) With respect to certain companies, shares in names of nominees and
qualifying shares in names of directors are included in the above
percentages.
(3) The names of other subsidiaries have been omitted from the above list
since considered in the aggregate, they would not constitute a
significant subsidiary.
(4) The registrant owns directly or indirectly approximately 50 percent of
the securities of this person and approximately 50 percent of the voting
securities of this person is owned directly or indirectly by another
single interest.
(5) The investment in this unconsolidated person is represented by the
registrant's percentage interest in the underlying net assets of such
person.
4
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.1
<SEQUENCE>6
<FILENAME>0006.txt
<DESCRIPTION>CONSENT OF INDEPENDENT ACCOUNTANTS
<TEXT>
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in the following
Prospectuses constituting part of the Registration Statements on:
<TABLE>
<S> <C>
Form S-3 (Nos. 333-27489 --Exxon Mobil Corporation Shareholder Investment Program;
and 33-60677)
Form S-3 (No. 33-48919) --Guaranteed Debt Securities and Warrants to Purchase
Guaranteed Debt Securities of Exxon Capital Corporation;
Form S-3 (No. 33-8922) --Guaranteed Debt Securities of SeaRiver Maritime
Financial Holdings, Inc. (formerly Exxon Shipping
Company)
</TABLE>
and we hereby consent to the incorporation by reference in the Registration
Statements on:
<TABLE>
<S> <C>
Form S-8 (Nos. 333-38917 --1993 Incentive Program of Exxon Mobil Corporation
and 33-51107) (together with 1988 Long Term Incentive Plan of Exxon
Mobil Corporation);
Form S-8 (No. 333-72955) --ExxonMobil Savings Plan;
Form S-8 (No. 333-75659) --Post-Effective Amendment No. 2 on Form S-8 to Form S-4
which pertains to the 1993 Incentive Program of Exxon
Mobil Corporation
</TABLE>
of our report dated February 28, 2001 relating to the financial statements
which appear in this Form 10-K.
/s/ PricewaterhouseCoopers LLP
Dallas, Texas
March 28, 2001
1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-23.2
<SEQUENCE>7
<FILENAME>0007.txt
<DESCRIPTION>CONSENT OF ERNST & YOUNG
<TEXT>
<PAGE>
EXHIBIT 23.2
Consent of Ernst & Young LLP, Independent Auditors
We consent to the incorporation by reference in the Registration Statements on
Form S-3 (Nos. 333-27489 and 33-60677) pertaining to the Exxon Mobil
Corporation Shareholder Investment Program; Form S-3 (No. 33-48919) pertaining
to Guaranteed Debt Securities and Warrants to Purchase Guaranteed Debt
Securities of Exxon Capital Corporation; Form S-3 (No. 33-8922) pertaining to
Guaranteed Debt Securities of SeaRiver Maritime Financial Holdings, Inc.
(formerly Exxon Shipping Company); Form S-8 (Nos. 333-38917 and 33-51107)
pertaining to the 1993 Incentive Program of Exxon Mobil Corporation and the
1988 Long Term Incentive Plan of Exxon Mobil Corporation; and Form S-8 (No.
333-72955) pertaining to the ExxonMobil Savings Plan; and Post-Effective
Amendment No. 2 on Form S-8 to the Registration Statement on Form S-4 (No.
333-75659) pertaining to the 1993 Incentive Program of Exxon Mobil
Corporation; and in the related Prospectuses of our report dated February 26,
1999, with respect to the consolidated financial statements and schedule of
Mobil Corporation included in this Annual Report on Form 10-K of Exxon Mobil
Corporation.
/s/ Ernst & Young LLP
McLean, Virginia
March 28, 2001
1
</TEXT>
</DOCUMENT>
<DOCUMENT>
<TYPE>EX-99
<SEQUENCE>8
<FILENAME>0008.txt
<DESCRIPTION>REPORT OF ERNST & YOUNG
<TEXT>
<PAGE>
Exhibit 99
Report of Ernst & Young LLP
Independent Auditors
Board of Directors and Shareholders
Mobil Corporation
We have audited the consolidated statements of income, changes in shareholders'
equity, and cash flows of Mobil Corporation for the year ended December 31, 1998
(not presented separately herein). Our audit also included the financial
statement schedule listed in the Index at Item 14 (not presented separately
herein). These financial statements and schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on these
financial statements based on our audits.
We conducted our audit in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the consolidated results of operations and cash flows of
Mobil Corporation for the year ended December 31, 1998, in conformity with
accounting principles generally accepted in the United States. Also, in our
opinion, the related financial statement schedule, when considered in relation
to the basis financial statements taken as a whole, presents fairly in all
material respects the information set forth therein.
/s/ ERNST & YOUNG LLP
McLean, Virginia
February 26, 1999
</TEXT>
</DOCUMENT>
</SEC-DOCUMENT>
-----END PRIVACY-ENHANCED MESSAGE-----