UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D. C. 20549


FORM 10-Q


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

THE SECURITIES EXCHANGE ACT OF 1934


For the quarterly period ended June 30, 2006


or


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

THE SECURITIES EXCHANGE ACT OF 1934


For the transition period from __________to________


Commission File Number 1-2256



                                 EXXON MOBIL CORPORATION                                 

(Exact name of registrant as specified in its charter)




                            NEW JERSEY                                                             13-5409005                         

               (State or other jurisdiction of                                              (I.R.S. Employer                     

               incorporation or organization)                                        Identification Number)               


     5959 Las Colinas Boulevard, Irving, Texas                             75039-2298       

(Address of principal executive offices)                               (Zip Code)


                                         (972) 444-1000                                         

(Registrant's telephone number, including area code)



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


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

         Large accelerated filer   X        Accelerated filer               Non-accelerated filer      


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


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



                      Class                                                                         Outstanding as of June 30, 2006

Common stock, without par value                                                              5,944,957,050                







EXXON MOBIL CORPORATION


FORM 10-Q


FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2006


TABLE OF CONTENTS


Page

Number


PART I.  FINANCIAL INFORMATION


Item 1.

Financial Statements


Condensed Consolidated Statement of Income

3

Six months ended June 30, 2006 and 2005


Condensed Consolidated Balance Sheet

4

As of June 30, 2006 and December 31, 2005


Condensed Consolidated Statement of Cash Flows

5

Six months ended June 30, 2006 and 2005


Notes to Condensed Consolidated Financial Statements

6-18


Item 2.

Management's Discussion and Analysis of Financial

Condition and Results of Operations

19-24


Item 3.

Quantitative and Qualitative Disclosures About Market Risk

25


Item 4.

Controls and Procedures

25


PART II.  OTHER INFORMATION


Item 1.

Legal Proceedings

25-26


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

26


Item 4.

Submission of Matters to a Vote of Security Holders

27-28


Item 6.

Exhibits

29


Signature

30


Index to Exhibits

31




-2-



PART I.  FINANCIAL INFORMATION



Item 1.  Financial Statements


EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF INCOME

(millions of dollars)



 

Three Months Ended

 

Six Months Ended

 
 

June 30,

 

June 30,

 
  

2006

  

2005

  

2006

  

2005

 

REVENUES AND OTHER INCOME

            

Sales and other operating revenue (1) (2)

$

96,024

 

$

86,622

 

$

182,341

 

$

166,097

 

Income from equity affiliates

 

1,687

  

1,321

  

3,487

  

2,877

 

Other income

 

1,323

  

625

  

2,186

  

1,645

 

       Total revenues and other income

 

99,034

  

88,568

  

188,014

  

170,619

 

 

            

COSTS AND OTHER DEDUCTIONS

            

Crude oil and product purchases (2)

 

48,180

  

44,700

  

91,001

  

83,989

 

Production and manufacturing expenses

 

7,416

  

6,444

  

14,840

  

12,552

 

Selling, general and administrative expenses

 

3,557

  

3,508

  

7,023

  

6,959

 

Depreciation and depletion

 

2,760

  

2,516

  

5,404

  

5,069

 

Exploration expenses, including dry holes

 

176

  

214

  

458

  

387

 

Interest expense

 

107

  

244

  

272

  

300

 

Excise taxes (1)

 

8,211

  

7,515

  

15,875

  

14,753

 

Other taxes and duties (2)

 

10,170

  

10,469

  

19,043

  

20,654

 

Income applicable to minority and preferred interests

 

253

  

199

  

435

  

294

 

       Total costs and other deductions

 

80,830

  

75,809

  

154,351

  

144,957

 

 

            

INCOME BEFORE INCOME TAXES

 

18,204

  

12,759

  

33,663

  

25,662

 

       Income taxes

 

7,844

  

5,119

  

14,903

  

10,162

 

NET INCOME

$

10,360

 

$

7,640

 

$

18,760

 

$

15,500

 
             

 

            

NET INCOME PER COMMON SHARE (dollars)

$

1.74

 

$

1.21

 

$

3.12

 

$

2.44

 

 

            

NET INCOME PER COMMON SHARE

            

 - ASSUMING DILUTION (dollars)

$

1.72

 

$

1.20

 

$

3.09

 

$

2.42

 
             
             

DIVIDENDS PER COMMON SHARE (dollars)

$

0.32

 

$

0.29

 

$

0.64

 

$

0.56

 
             
             

(1) Excise taxes included in sales and other

            

         operating revenue

$

8,211

 

$

7,515

 

$

15,875

 

$

14,753

 
             

(2) Amounts included in prior period sales and other operating

            

         revenue for purchases/sales contracts with the same

            

         counterparty. Associated costs are included in crude oil

            

         and product purchases and other taxes and duties.

            

         See accounting change note 2 on page 6.

$

0

 

$

7,507

 

$

0

 

$

14,667

 



-3-



EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(millions of dollars)


 

June 30,

 

Dec. 31,

 
 

2006

 

2005

 

ASSETS

        

Current assets

        

   Cash and cash equivalents

 

$

32,113

  

$

28,671

 

   Cash and cash equivalents - restricted (note 4)

  

4,604

   

4,604

 

   Notes and accounts receivable - net

  

28,607

   

27,484

 

   Inventories

        

     Crude oil, products and merchandise

  

10,233

   

7,852

 

     Materials and supplies

  

1,596

   

1,469

 

   Prepaid taxes and expenses

  

3,505

   

3,262

 

     Total current assets

  

80,658

   

73,342

 

Property, plant and equipment - net

  

111,110

   

107,010

 

Investments and other assets

  

29,242

   

27,983

 
         

     TOTAL ASSETS

 

$

221,010

  

$

208,335

 
         

LIABILITIES

        

Current liabilities

        

   Notes and loans payable

 

$

1,964

  

$

1,771

 

   Accounts payable and accrued liabilities

  

39,302

   

36,120

 

   Income taxes payable

  

10,288

   

8,416

 

     Total current liabilities

  

51,554

   

46,307

 

Long-term debt

  

6,393

   

6,220

 

Deferred income tax liabilities

  

22,275

   

20,878

 

Other long-term liabilities

  

25,024

   

23,744

 
         

     TOTAL LIABILITIES

  

105,246

   

97,149

 
         

Commitments and contingencies (note 4)

        
         

SHAREHOLDERS' EQUITY

        

Common stock, without par value:

        

   Authorized:  

9,000 million shares

        

   Issued:      

8,019 million shares

  

4,499

   

4,477

 

Earnings reinvested

  

178,212

   

163,335

 

Accumulated other nonowner changes in equity

        

   Cumulative foreign exchange translation adjustment

  

2,869

   

979

 

   Minimum pension liability adjustment

  

(2,356

)

  

(2,258

)

Common stock held in treasury:

        

       2,074 million shares at June 30, 2006

  

(67,460

)

    

       1,886 million shares at December 31, 2005

      

(55,347

)

         

     TOTAL SHAREHOLDERS' EQUITY

  

115,764

   

111,186

 
         

     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

221,010

  

$

208,335

 



The number of shares of common stock issued and outstanding at June 30, 2006 and

December 31, 2005 were 5,944,957,050 and 6,132,998,174, respectively.


-4-




EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(millions of dollars)




  

Six Months Ended

 
  

June 30,

 
   

2006

   

2005

 

CASH FLOWS FROM OPERATING ACTIVITIES

        

   Net income

 

$

18,760

  

$

15,500

 

   Depreciation and depletion

  

5,404

   

5,069

 

   Changes in operational working capital, excluding cash and debt

  

1,002

   

2,573

 

   All other items - net

  

761

   

(1,161

)

         

    Net cash provided by operating activities

  

25,927

   

21,981

 
         

CASH FLOWS FROM INVESTING ACTIVITIES

        

   Additions to property, plant and equipment

  

(7,586

)

  

(6,448

)

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

  

1,450

   

3,826

 

   Other investing activities - net

  

(640

)

  

(592

)

         

    Net cash used in investing activities

  

(6,776

)

  

(3,214

)

         

CASH FLOWS FROM FINANCING ACTIVITIES

        

   Additions to long-term debt

  

72

   

1

 

   Reductions in long-term debt

  

(27

)

  

(11

)

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

  

106

   

(267

)

   Cash dividends to ExxonMobil shareholders

  

(3,883

)

  

(3,568

)

   Cash dividends to minority interests

  

(125

)

  

(138

)

   Changes in minority interests and sales/(purchases)

        

      of affiliate stock

  

(252

)

  

(193

)

   Taxes from employee stock-based awards

  

128

   

0

 

   Net ExxonMobil shares acquired

  

(12,394

)

  

(6,696

)

         

    Net cash used in financing activities

  

(16,375

)

  

(10,872

)

         

Effects of exchange rate changes on cash

  

666

   

(778

)

         

Increase/(decrease) in cash and cash equivalents

  

3,442

   

7,117

 

Cash and cash equivalents at beginning of period

  

28,671

   

18,531

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

32,113

  

$

25,648

 
         

SUPPLEMENTAL DISCLOSURES

        

   Income taxes paid

 

$

12,221

  

$

10,867

 

   Cash interest paid

 

$

988

  

$

138

 




-5-



EXXON MOBIL CORPORATION


NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS


1.

Basis of Financial Statement Preparation


These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 2005 Annual Report on Form 10-K.  In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein.  All such adjustments are of a normal recurring nature.  The Corporation's exploration and production activities are accounted for under the "successful efforts" method.  Certain reclassifications to prior periods have been made to conform to the current presentation, including combining the amounts for the balance sheet lines "Benefit plan related balances" and "Common stock" per the adoption of FAS 123R and reclassifying on the income statement $1.3 billion of first quarter 2006 "Other taxes and duties" to "Crude oil and product purchases" related to the reporting of purchases and sales of inventory with the same counterparty.



2.

Accounting Change for Purchases/Sales Contracts


Effective January 1, 2006, the Corporation adopted the Emerging Issues Task Force (EITF) consensus on Issue No. 04-13, “Accounting for Purchases and Sales of Inventory with the Same Counterparty.”  The EITF concluded that purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another should be combined and recorded as exchanges measured at the book value of the item sold.  In prior periods, the Corporation recorded certain crude oil, natural gas, petroleum product and chemical sales and purchases contemporaneously negotiated with the same counterparty as revenues and purchases.  As a result of the EITF consensus, the Corporation’s accounts “Sales and other operating revenue”, “Crude oil and product purchases” and "Other taxes and duties" on the income statement were reduced by associated amounts with no impact on net income. All operating segments are affected by this change, with the largest impact in the Downstream.



3.

Accounting Change for Share-based Payments


Effective January 1, 2006, the Corporation adopted the Financial Accounting Standards Board's revised Statement of Financial Accounting Standards No. 123 (FAS 123R), “Share-based Payment.” FAS 123R requires compensation costs related to share-based payments to be recognized in the income statement over the requisite service period. The amount of the compensation cost is to be measured based on the grant-date fair value of the instrument issued. FAS 123R is effective for awards granted or modified after the date of adoption and for awards granted prior to that date that have not vested. In 2003, the Corporation adopted a policy of expensing all share-based payments that is consistent with the provisions of FAS 123R, and all prior years outstanding stock option awards have vested. FAS 123R will therefore not materially change the Corporation’s existing accounting practices or the amount of share-based compensation recognized in earnings.


The cumulative compensation expense associated with share-based payments made in 2005, 2004 and 2003 has been recognized in the income statement using the “nominal vesting period approach.” The full cost of awards given to employees who have retired before the end of the vesting period has been expensed. The use of a “non-substantive vesting period approach” based on the retirement eligibility age is not significantly different from the nominal vesting period approach. The non-substantive vesting period approach is applicable to grants made after the adoption of FAS 123R.




-6-



Incentive Program


The 2003 Incentive Program provides for grants of stock options, stock appreciation rights (SARs), restricted stock and other forms of award. Awards may be granted to eligible employees of the Corporation and those affiliates at least 50 percent owned. The maximum number of shares of stock that may be issued under the 2003 Incentive Program is 220 million. Awards that are forfeited or expire, or are settled in cash, do not count against this maximum limit. The 2003 Incentive Program does not have a specified term. New awards may be made until the available shares are depleted, unless the Board terminates the plan early. Outstanding awards are subject to certain forfeiture provisions contained in the program or award instrument.


As under earlier programs, 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. All remaining stock options and SARs outstanding were granted prior to 2002.


Restricted stock awards have been granted in the fourth quarter and the restricted shares were issued in the following first quarter. These shares are issued to employees from treasury stock. The units that are settled in cash are recorded as liabilities and their changes in fair value are recognized over the vesting period. During the applicable restricted periods, the shares may not be sold or transferred and are subject to forfeiture. The majority of the awards have graded vesting periods, with 50 percent of the shares in each award vesting after three years and the remaining 50 percent vesting after seven years. A small number of awards granted to certain senior executives have vesting periods of five years for 50 percent of the award and of ten years or retirement, which ever occurs later, for the remaining 50 percent of the award.


The Corporation has purchased shares in the open market and through negotiated transactions to offset shares issued in conjunction with benefit plans and programs.  Purchases may be discontinued at any time without prior notice.


In 2002, the Corporation began issuing restricted stock as share-based compensation in lieu of stock options. Compensation expense for these awards is based on the price of the stock at the date of grant and has been recognized in income over the requisite service period, which is the same method of accounting as under FAS 123R.  Prior to 2002, the Corporation issued stock options as share-based compensation, and since these awards vested prior to the effective date of FAS 123R, they continue to be accounted for by the method prescribed in APB 25, "Accounting for Stock Issued to Employees."  Under this method, compensation expense for awards granted in the form of stock options is measured at the intrinsic value of the options (the difference between the market price of the stock and the exercise price of the options) on the date of grant. Since these two prices are the same on the date of grant, no compensation expense has been recognized in income for these awards.




-7-



Restricted stock and restricted units


The following table summarizes information about restricted stock and restricted stock units, including those shares from former Mobil plans, for the six months ended June 30, 2006.


     

Weighted

 
     

Average

 
     

Grant-Date

 
     

Fair Value

 

  Restricted stock/units:

 

  Shares

  

per Share

 
  

(thousands)

    
 

Issued and outstanding at December 31, 2005

 

29,530

  

$41.52  

 
 

2005 award issued in 2006

 

11,064

  

$58.43  

 
 

Vested

 

(12

)

 

$34.63  

 
 

Forfeited

 

(126

)

 

$46.57  

 
 

Issued and outstanding at June 30, 2006

 

40,456

  

$46.13  

 


As of June 30, 2006, there was $1,053 million of unrecognized compensation cost related to the nonvested restricted awards.  This cost is expected to be recognized over a weighted-average period of 4.5 years.  The compensation cost charged against income for the restricted stock and restricted units was $101 million and $149 million for the three months ended June 30, 2006, and 2005, respectively.  The total income tax benefit recognized in income related to this compensation expense was $18 million and $29 million for the same periods, respectively.  The compensation cost charged against income for the restricted stock and restricted units was $295 million and $231 million for the six months ended June 30, 2006, and 2005, respectively.  The total income tax benefit recognized in income related to this compensation expense was $53 million and $42 million for the same periods, respectively.


Stock options


The following table summarizes information about stock options, including those shares from former Mobil plans, for the six months ended June 30, 2006.


      

Weighted

 
    

Average

 

Average

 
    

Exercise

 

Remaining

 
    

Price

 

Contractual

 

  Stock options:

 

Shares

 

per Share

 

Term

 

 

 

(thousands)

     
 

Outstanding at December 31, 2005

 

147,774

  

$37.11

    
 

Exercised

 

(13,216

)

 

$29.67

    
 

Expired/canceled

 

(231

)

 

$39.23

    
 

Outstanding at June 30, 2006

 

134,327

  

$37.83

 

3.6

 years

 
           
 

Exercisable at June 30, 2006

 

134,327

  

$37.83

 

3.6

 years

 


No compensation expense was recognized for stock options in the six months ended June 30, 2006, and 2005, as all remaining outstanding stock options were granted prior to 2002 and are fully vested. No income tax benefit was recognized in income during the quarter related to stock options.  Cash received from stock option exercises for the six months ended June 30, 2006, was $392 million.  The cash tax benefit realized for the options exercised in the six months ended June 30, 2006, was $128 million.  The aggregate intrinsic value of stock options exercised in the six months ended June 30, 2006, was $416 million and for the balance of outstanding stock options was $3,159 million.





-8-



4.

Litigation and Other Contingencies


Litigation


A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits and tax disputes. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated, or when the liability is believed to be only reasonably possible or remote. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a materially adverse effect upon the Corporation’s operations or financial condition.


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. The vast majority of the compensatory claims have been resolved and paid. All of the punitive damage claims were consolidated in the civil trial that began in 1994. The first judgment from the United States District Court for the District of Alaska in the amount of $5 billion was vacated by the United States Court of Appeals for the Ninth Circuit as being excessive under the Constitution. The second judgment in the amount of $4 billion was vacated by the Ninth Circuit panel without argument and sent back for the District Court to reconsider in light of the recent U.S. Supreme Court decision in Campbell v. State Farm. The most recent District Court judgment for punitive damages was for $4.5 billion plus interest and was entered in January 2004. ExxonMobil and the plaintiffs have appealed this decision to the Ninth Circuit. The Corporation has posted a $5.4 billion letter of credit. Oral arguments were held before the Ninth Circuit on January 27, 2006. Management believes that the likelihood of the judgment being upheld is remote. While it is reasonably possible that a liability may have been incurred from the Exxon Valdez grounding, it is not possible to predict the ultimate outcome or to reasonably estimate any such potential liability.


In December 2000, a jury in the 15th Judicial Circuit Court of Montgomery County, Alabama, returned a verdict against the Corporation in a dispute over royalties in the amount of $88 million in compensatory damages and $3.4 billion in punitive damages in the case of Exxon Corporation v. State of Alabama, et al. The verdict was upheld by the trial court in May 2001. In December 2002, the Alabama Supreme Court vacated the $3.5 billion jury verdict. The case was retried and in November 2003, a state district court jury in Montgomery, Alabama, returned a verdict against Exxon Mobil Corporation. The verdict included $63.5 million in compensatory damages and $11.8 billion in punitive damages. In March 2004, the district court judge reduced the amount of punitive damages to $3.5 billion. ExxonMobil believes the judgment is not justified by the evidence, that any punitive damage award is not justified by either the facts or the law, and that the amount of the award is grossly excessive and unconstitutional. ExxonMobil has appealed the decision to the Alabama Supreme Court. Management believes that the likelihood of the judgment being upheld is remote. While it is reasonably possible that a liability may have been incurred by ExxonMobil from this dispute over royalties, it is not possible to predict the ultimate outcome or to reasonably estimate any such potential liability. In May 2004, the Corporation posted a $4.5 billion supersedeas bond as required by Alabama law to stay execution of the judgment pending appeal. The Corporation has pledged to the issuer of the bond collateral consisting of cash and short-term, high-quality securities with an aggregate value of approximately $4.6 billion. This collateral is reported as restricted cash and cash equivalents on the Consolidated Balance Sheet. Under the terms of the pledge agreement, the Corporation is entitled to receive the income generated from the cash and securities and to make investment decisions, but is restricted from using the pledged cash and securities for any other purpose until such time the bond is canceled.



-9-



In 2001, a Louisiana state court jury awarded compensatory damages of $56 million and punitive damages of $1 billion to a landowner for damage caused by a third party that leased the property from the landowner. The third party provided pipe cleaning and storage services for the Corporation and other entities. The Louisiana Fourth Circuit Court of Appeals reduced the punitive damage award to $112 million in 2005. The Corporation appealed this decision to the Louisiana Supreme Court which, in March 2006, refused to hear the appeal. ExxonMobil has fully accrued and paid the compensatory and punitive damage awards. The Corporation has appealed the punitive damage award to the U.S. Supreme Court.


In Allapattah v. Exxon, a jury in the United States District Court for the Southern District of Florida determined in 2001 that a class of Exxon dealers between March 1983 and August 1994 had been overcharged for gasoline. In June 2003, the Eleventh Circuit Court of Appeals affirmed the judgment and in March 2004, denied a petition for Rehearing En Banc. In October 2004, the U.S. Supreme Court granted review as to whether the class in the District Court judgment should include members that individually do not satisfy the $50,000 minimum amount-in-controversy requirement in federal court. In light of the Supreme Court’s decision to grant review of only part of ExxonMobil’s appeal, the Corporation took an after-tax charge of $550 million in the third quarter of 2004 reflecting the estimated liability, after considering potential set-offs and defenses for the claims under review by the Supreme Court. In June 2005, the Supreme Court granted the District Court the right to hear the claims of all class members and the Corporation took an after-tax charge of $200 million. The District Court has given final approval of a settlement of $1,075 million, pre-tax. This obligation has been fully accrued and was paid in the second quarter 2006.


Tax issues for 1986 to 1993 remain pending before the U.S. 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.



Other Contingencies


 

As of June 30, 2006

 

Equity

  

Other

   
 

Company

  

Third Party

   
 

Obligations

  

Obligations

 

Total

 
 

(millions of dollars)

Total guarantees

 

$

3,834

 

$

279

 

$

4,113

 


The Corporation and certain of its consolidated subsidiaries were contingently liable at

June 30, 2006, for $4,113 million, primarily relating to ExxonMobil's guarantees of obligations of equity companies for notes, loans and other liabilities.


Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. The Corporation's outstanding unconditional purchase obligations at June 30, 2006, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.


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



-10-




5.

Nonowner Changes in Shareholders' Equity



 

Three Months Ended

 

Six Months Ended

 
 

June 30,

 

June 30,

 
  

2006

  

2005

  

2006

  

2005

 
 

(millions of dollars)

 
             

Net income

$

10,360

 

$

7,640

 

$

18,760

 

$

15,500

 

Changes in other nonowner changes in equity

            

Foreign exchange translation adjustment

 

1,476

  

(1,451

)

 

1,890

  

(2,350

)

Minimum pension liability adjustment

 

(81

)

 

0

  

(98

)

 

0

 

Reclassification adjustment for gain on sale of

            

    stock investment included in net income

 

0

  

0

  

0

  

(428

)

Total nonowner changes in shareholders' equity

$

11,755

 

$

6,189

 

$

20,552

 

$

12,722

 



6.

Earnings Per Share



 

Three Months Ended

 

Six Months Ended

 
 

June 30,

 

June 30,

 
  

2006

  

2005

  

2006

  

2005

 
             

NET INCOME PER COMMON SHARE

            

Net income (millions of dollars)

$

10,360

 

$

7,640

 

$

18,760

 

$

15,500

 

 

            

Weighted average number of common shares

            

  outstanding (millions of shares)

 

5,971

  

6,310

  

6,019

  

6,337

 
             

Net income per common share (dollars)

$

1.74

 

$

1.21

 

$

3.12

 

$

2.44

 
             

NET INCOME PER COMMON SHARE

            

 - ASSUMING DILUTION

            

Net income (millions of dollars)

$

10,360

 

$

7,640

 

$

18,760

 

$

15,500

 
             

Weighted average number of common shares

            

  outstanding (millions of shares)

 

5,971

  

6,310

  

6,019

  

6,337

 

    Effect of employee stock-based awards

 

59

  

60

  

57

  

57

 

Weighted average number of common shares

            

  outstanding - assuming dilution

 

6,030

  

6,370

  

6,076

  

6,394

 
             

Net income per common share

            

   - assuming dilution (dollars)

$

1.72

 

$

1.20

 

$

3.09

 

$

2.42

 




-11-



7.

Annuity Benefits and Other Postretirement Benefits


 

Three Months Ended

 

Six Months Ended

 
 

June 30,

 

June 30,

 
  

2006

  

2005

  

2006

  

2005

 
 

(millions of dollars)

 

Annuity Benefits - U.S.

            

   Components of net benefit cost

            

      Service cost

$

83

 

$

91

 

$

168

 

$

173

 

      Interest cost

 

158

  

168

  

317

  

319

 

      Expected return on plan assets

 

(155

)

 

(175

)

 

(312

)

 

(330

)

      Amortization of actuarial loss/(gain)

            

        and prior service cost

 

67

  

74

  

136

  

142

 

      Net pension enhancement and

            

        curtailment/settlement expense

 

40

  

34

  

79

  

64

 

      Net benefit cost

$

193

 

$

192

 

$

388

 

$

368

 
             
             

Annuity Benefits - Non-U.S.

            

   Components of net benefit cost

            

      Service cost

$

107

 

$

102

 

$

210

 

$

195

 

      Interest cost

 

221

  

213

  

436

  

426

 

      Expected return on plan assets

 

(245

)

 

(212

)

 

(482

)

 

(414

)

      Amortization of actuarial loss/(gain)

            

        and prior service cost

 

127

  

107

  

253

  

213

 

      Net pension enhancement and

            

        curtailment/settlement expense

 

1

  

1

  

2

  

1

 

      Net benefit cost

$

211

 

$

211

 

$

419

 

$

421

 
             
             

Other Postretirement Benefits

            

   Components of net benefit cost

            

      Service cost

$

19

 

$

18

 

$

37

 

$

34

 

      Interest cost

 

75

  

76

  

152

  

150

 

      Expected return on plan assets

 

(10

)

 

(10

)

 

(20

)

 

(19

)

      Amortization of actuarial loss/(gain)

            

        and prior service cost

 

53

  

51

  

106

  

100

 

      Net benefit cost

$

137

 

$

135

 

$

275

 

$

265

 




-12-



8.

Disclosures about Segments and Related Information



 

Three Months Ended

 

Six Months Ended

 
 

June 30,

 

June 30,

 
  

2006

  

2005

  

2006

  

2005

 
 

(millions of dollars)

 

EARNINGS AFTER INCOME TAX

            

  Upstream

            

    United States

$

1,644

 

$

1,389

 

$

2,924

 

$

2,742

 

    Non-U.S.

 

5,490

  

3,519

  

10,593

  

7,220

 

  Downstream

            

    United States

 

1,354

  

999

  

2,033

  

1,644

 

    Non-U.S.

 

1,131

  

1,022

  

1,723

  

1,830

 

  Chemical

            

    United States

 

189

  

343

  

518

  

835

 

    Non-U.S.

 

651

  

471

  

1,271

  

1,411

 

  All other

 

(99

)

 

(103

)

 

(302

)

 

(182

)

  Corporate total

$

10,360

 

$

7,640

 

$

18,760

 

$

15,500

 
             

SALES AND OTHER OPERATING REVENUE (1) (2)

          

  Upstream

            

     United States

$

1,400

 

$

1,707

 

$

3,177

 

$

3,243

 

     Non-U.S.

 

8,262

  

5,509

  

15,801

  

10,481

 

  Downstream

            

     United States

 

25,656

  

22,429

  

46,784

  

41,742

 

     Non-U.S.

 

52,277

  

49,455

  

99,981

  

94,944

 

  Chemical

            

     United States

 

3,260

  

2,938

  

6,485

  

6,093

 

     Non-U.S.

 

5,165

  

4,582

  

10,105

  

9,588

 

  All other

 

4

  

2

  

8

  

6

 

  Corporate total

$

96,024

 

$

86,622

 

$

182,341

 

$

166,097

 
             

(1) Includes excise taxes

            

(2) Prior year period includes amounts in sales and

          

        other operating revenue for purchases/sales

          

        contracts with the same counterparty. See

          

        accounting change note 2 on page 6.

            
             

INTERSEGMENT REVENUE

            

  Upstream

            

     United States

$

2,085

 

$

1,667

 

$

3,939

 

$

3,474

 

     Non-U.S.

 

10,350

  

6,710

  

19,224

  

13,050

 

  Downstream

            

     United States

 

3,294

  

2,418

  

6,076

  

4,498

 

     Non-U.S.

 

12,349

  

9,784

  

23,332

  

18,511

 

  Chemical

            

     United States

 

2,100

  

1,672

  

3,923

  

3,077

 

     Non-U.S.

 

1,816

  

1,403

  

3,398

  

2,692

 

  All other

 

64

  

72

  

132

  

144

 




-13-



9.

Condensed Consolidating Financial Information Related to Guaranteed Securities Issued by Subsidiaries


Exxon Mobil Corporation has fully and unconditionally guaranteed the 6.125% notes due 2008 ($160 million of long-term debt at June 30, 2006) of Exxon Capital Corporation and the deferred interest debentures due 2012 ($1,471 million long-term) and the debt securities due 2006-2011 ($65 million long-term and $10 million short-term) 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.



     

SeaRiver

       
 

Exxon Mobil

   

Maritime

   

Consolidating

   
 

Corporation

 

Exxon

 

Financial

   

and

   
 

Parent

 

Capital

 

Holdings

 

All Other

 

Eliminating

   
 

Guarantor

 

Corporation

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 
 

(millions of dollars)

 
                   

Condensed consolidated statement of income for three months ended June 30, 2006

      

Revenues and other income

                  

Sales and other operating revenue,

including excise taxes


$


3,929

 


$


-

 


$


-

 


$


92,095

 


$


-

 


$


96,024

 

Income from equity affiliates

 

9,901

  

-

  

3

  

1,685

  

(9,902

)

 

1,687

 

Other income

 

217

  

-

  

-

  

1,106

  

-

  

1,323

 

Intercompany revenue

 

11,047

  

17

  

23

  

84,424

  

(95,511

)

 

-

 

Total revenues and other income

 

25,094

  

17

  

26

  

179,310

  

(105,413

)

 

99,034

 

Costs and other deductions

                  

Crude oil and product purchases

 

10,273

  

-

  

-

  

128,037

  

(90,130

)

 

48,180

 

Production and manufacturing

expenses

 


1,752

  


-

  


-

  


6,951

  


(1,287


)

 


7,416

 

 

Selling, general and administrative

expenses

 


669

  


-

  


-

  


3,039

  


(151


)

 


3,557

 

Depreciation and depletion

 

342

  

1

  

-

  

2,417

  

-

  

2,760

 

Exploration expenses, including dry

holes

 


49

  


-

  


-

  


127

  


-

  


176

 

Interest expense

 

1,083

  

4

  

46

  

2,920

  

(3,946

)

 

107

 

Excise taxes

 

-

  

-

  

-

  

8,211

  

-

  

8,211

 

Other taxes and duties

 

10

  

-

  

-

  

10,160

  

-

  

10,170

 

Income applicable to minority and

preferred interests

 


-

  


-

  


-

  


253

  


-

  


253

 

Total costs and other deductions

 

14,178

  

5

  

46

  

162,115

  

(95,514

)

 

80,830

 

Income before income taxes

 

10,916

  

12

  

(20

)

 

17,195

  

(9,899

)

 

18,204

 

Income taxes

 

556

  

5

  

(8

)

 

7,291

  

-

  

7,844

 

Net income

$

10,360

 

$

7

 

$

(12

)

$

9,904

 

$

(9,899

)

$

10,360

 




-14-



     

SeaRiver

       
 

Exxon Mobil

   

Maritime

   

Consolidating

   
 

Corporation

 

Exxon

 

Financial

   

and

   
 

Parent

 

Capital

 

Holdings

 

All Other

 

Eliminating

   
 

Guarantor

 

Corporation

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 
 

(millions of dollars)

 
                   

Condensed consolidated statement of income for three months ended June 30, 2005

      

Revenues and other income

                  

Sales and other operating revenue,

including excise taxes


$


3,815

 


$


-

 


$


-

 


$


82,807

 


$


-

 


$


86,622

 

Income from equity affiliates

 

7,025

  

-

  

5

  

1,316

  

(7,025

)

 

1,321

 

Other income

 

179

  

-

  

-

  

446

  

-

  

625

 

Intercompany revenue

 

7,923

  

11

  

13

  

65,620

  

(73,567

)

 

-

 

Total revenues and other income

 

18,942

  

11

  

18

  

150,189

  

(80,592

)

 

88,568

 

Costs and other deductions

                  

Crude oil and product purchases

 

7,553

  

-

  

-

  

106,948

  

(69,801

)

 

44,700

 

Production and manufacturing

expenses

 


1,644

  


1

  


-

  


6,146

  


(1,347


)

 


6,444

 

 

Selling, general and administrative

expenses

 


641

  


1

  


-

  


2,988

  


(122


)

 


3,508

 

Depreciation and depletion

 

336

  

1

  

-

  

2,179

  

-

  

2,516

 

Exploration expenses, including dry

holes

 


49

  


-

  


-

  


165

  


-

  


214

 

Interest expense

 

681

  

3

  

39

  

1,820

  

(2,299

)

 

244

 

Excise taxes

 

-

  

-

  

-

  

7,515

  

-

  

7,515

 

Other taxes and duties

 

3

  

-

  

-

  

10,466

  

-

  

10,469

 

Income applicable to minority and

preferred interests

 


-

  


-

  


-

  


199

  


-

  


199

 

Total costs and other deductions

 

10,907

  

6

  

39

  

138,426

  

(73,569

)

 

75,809

 

Income before income taxes

 

8,035

  

5

  

(21

)

 

11,763

  

(7,023

)

 

12,759

 

Income taxes

 

395

  

2

  

(9

)

 

4,731

  

-

  

5,119

 

Net income

$

7,640

 

$

3

 

$

(12

)

$

7,032

 

$

(7,023

)

$

7,640

 


Condensed consolidated statement of income for six months ended June 30, 2006

      


Revenues and other income

                  

Sales and other operating revenue,

including excise taxes


$


8,150

 


$


-

 


$


-

 


$


174,191

 


$


-

 


$


182,341

 

Income from equity affiliates

 

18,344

  

-

  

12

  

3,482

  

(18,351

)

 

3,487

 

Other income

 

408

  

-

  

-

  

1,778

  

-

  

2,186

 

Intercompany revenue

 

19,816

  

33

  

43

  

162,211

  

(182,103

)

 

-

 

Total revenues and other income

 

46,718

  

33

  

55

  

341,662

  

(200,454

)

 

188,014

 

Costs and other deductions

                  

Crude oil and product purchases

 

18,727

  

-

  

-

  

244,236

  

(171,962

)

 

91,001

 

Production and manufacturing

expenses

 


3,789

  


1

  


-

  


13,566

  


(2,516


)

 


14,840

 

 

Selling, general and administrative

expenses

 


1,355

  


-

  


-

  


5,959

  


(291


)

 


7,023

 

Depreciation and depletion

 

653

  

2

  

-

  

4,749

  

-

  

5,404

 

Exploration expenses, including dry

holes

 


155

  


-

  


-

  


303

  


-

  


458

 

Interest expense

 

2,076

  

8

  

91

  

5,437

  

(7,340

)

 

272

 

Excise taxes

 

-

  

-

  

-

  

15,875

  

-

  

15,875

 

Other taxes and duties

 

16

  

-

  

-

  

19,027

  

-

  

19,043

 

Income applicable to minority and

preferred interests

 


-

  


-

  


-

  


435

  


-

  


435

 

Total costs and other deductions

 

26,771

  

11

  

91

  

309,587

  

(182,109

)

 

154,351

 

Income before income taxes

 

19,947

  

22

  

(36

)

 

32,075

  

(18,345

)

 

33,663

 

Income taxes

 

1,187

  

9

  

(17

)

 

13,724

  

-

  

14,903

 

Net income

$

18,760

 

$

13

 

$

(19

)

$

18,351

 

$

(18,345

)

$

18,760

 





-15-



     

SeaRiver

       
 

Exxon Mobil

   

Maritime

   

Consolidating

   
 

Corporation

 

Exxon

 

Financial

   

and

   
 

Parent

 

Capital

 

Holdings

 

All Other

 

Eliminating

   
 

Guarantor

 

Corporation

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 
 

(millions of dollars)

 
                   

Condensed consolidated statement of income for six months ended June 30, 2005

      


Revenues and other income

                  

Sales and other operating revenue,

including excise taxes


$


7,795

 


$


-

 


$


-

 


$


158,302

 


$


-

 


$


166,097

 

Income from equity affiliates

 

14,075

  

-

  

8

  

2,872

  

(14,078

)

 

2,877

 

Other income

 

309

  

-

  

-

  

1,336

  

-

  

1,645

 

Intercompany revenue

 

14,780

  

22

  

23

  

124,960

  

(139,785

)

 

-

 

Total revenues and other income

 

36,959

  

22

  

31

  

287,470

  

(153,863

)

 

170,619

 

Costs and other deductions

                  

Crude oil and product purchases

 

14,131

  

-

  

-

  

202,569

  

(132,711

)

 

83,989

 

Production and manufacturing

expenses

 


3,277

  


1

  


-

  


11,908

  


(2,634


)

 


12,552

 

 

Selling, general and administrative

expenses

 


1,198

  


1

  


-

  


5,988

  


(228


)

 


6,959

 

Depreciation and depletion

 

667

  

2

  

-

  

4,400

  

-

  

5,069

 

Exploration expenses, including dry

holes

 


77

  


-

  


-

  


310

  


-

  


387

 

Interest expense

 

1,088

  

7

  

78

  

3,373

  

(4,246

)

 

300

 

Excise taxes

 

-

  

-

  

-

  

14,753

  

-

  

14,753

 

Other taxes and duties

 

8

  

-

  

-

  

20,646

  

-

  

20,654

 

Income applicable to minority and

preferred interests

 


-

  


-

  


-

  


294

  


-

  


294

 

Total costs and other deductions

 

20,446

  

11

  

78

  

264,241

  

(139,819

)

 

144,957

 

Income before income taxes

 

16,513

  

11

  

(47

)

 

23,229

  

(14,044

)

 

25,662

 

Income taxes

 

1,013

  

4

  

(19

)

 

9,164

  

-

  

10,162

 

Net income

$

15,500

 

$

7

 

$

(28

)

$

14,065

 

$

(14,044

)

$

15,500

 




-16-




     

SeaRiver

       
 

Exxon Mobil

   

Maritime

   

Consolidating

   
 

Corporation

 

Exxon

 

Financial

   

and

   
 

Parent

 

Capital

 

Holdings

 

All Other

 

Eliminating

   
 

Guarantor

 

Corporation

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 
 

(millions of dollars)

 

Condensed consolidated balance sheet as of June 30, 2006

       

Cash and cash equivalents

$

9,408

 

$

-

 

$

-

 

$

22,705

 

$

-

 

$

32,113

 

Cash and cash equivalents - restricted

 

4,604

  

-

  

-

  

-

  

-

  

4,604

 

Notes and accounts receivable - net

 

2,032

  

-

  

-

  

26,575

  

-

  

28,607

 

Inventories

 

1,311

  

-

  

-

  

10,518

  

-

  

11,829

 

Prepaid taxes and expenses

 

926

  

-

  

10

  

2,569

  

-

  

3,505

 

      Total current assets

 

18,281

  

-

  

10

  

62,367

  

-

  

80,658

 

Property, plant and equipment - net

 

15,578

  

90

  

-

  

95,442

  

-

  

111,110

 

Investments and other assets

 

183,127

  

-

  

430

  

404,404

  

(558,719

)

 

29,242

 

Intercompany receivables

 

11,382

  

1,089

  

1,831

  

397,418

  

(411,720

)

 

-

 

      Total assets

$

228,368

 

$

1,179

 

$

2,271

 

$

959,631

 

$

(970,439

)

$

221,010

 
                   

Notes and loan payables

$

330

 

$

-

 

$

10

 

$

1,624

 

$

-

 

$

1,964

 

Accounts payable and accrued liabilities

 

2,815

  

8

  

1

  

36,478

  

-

  

39,302

 

Income taxes payable

 

-

  

9

  

-

  

10,279

  

-

  

10,288

 

      Total current liabilities

 

3,145

  

17

  

11

  

48,381

  

-

  

51,554

 

Long-term debt

 

270

  

160

  

1,536

  

4,427

  

-

  

6,393

 

Deferred income tax liabilities

 

2,845

  

26

  

252

  

19,152

  

-

  

22,275

 

Other long-term liabilities

 

5,856

  

20

  

-

  

19,148

  

-

  

25,024

 

Intercompany payables

 

100,488

  

135

  

383

  

310,714

  

(411,720

)

 

-

 

      Total liabilities

 

112,604

  

358

  

2,182

  

401,822

  

(411,720

)

 

105,246

 
                   

Earnings reinvested

 

178,212

  

36

  

(380

)

 

125,977

  

(125,633

)

 

178,212

 

Other shareholders' equity

 

(62,448

)

 

785

  

469

  

431,832

  

(433,086

)

 

(62,448

)

      Total shareholders' equity

 

115,764

  

821

  

89

  

557,809

  

(558,719

)

 

115,764

 

      Total liabilities and

        shareholders' equity


$


228,368

 


$


1,179

 


$


2,271

 


$


959,631

 


$


(970,439


)


$


221,010

 


Condensed consolidated balance sheet as of December 31, 2005

       

Cash and cash equivalents

$

12,076

 

$

-

 

$

-

 

$

16,595

 

$

-

 

$

28,671

 

Cash and cash equivalents - restricted

 

4,604

  

-

  

-

  

-

  

-

  

4,604

 

Notes and accounts receivable - net

 

2,183

  

-

  

-

  

25,301

  

-

  

27,484

 

Inventories

 

1,241

  

-

  

-

  

8,080

  

-

  

9,321

 

Prepaid taxes and expenses

 

117

  

-

  

-

  

3,145

  

-

  

3,262

 

      Total current assets

 

20,221

  

-

  

-

  

53,121

  

-

  

73,342

 

Property, plant and equipment - net

 

15,537

  

92

  

-

  

91,381

  

-

  

107,010

 

Investments and other assets

 

164,290

  

-

  

449

  

409,233

  

(545,989

)

 

27,983

 

Intercompany receivables

 

14,569

  

1,041

  

1,768

  

377,176

  

(394,554

)

 

-

 

      Total assets

$

214,617

 

$

1,133

 

$

2,217

 

$

930,911

 

$

(940,543

)

$

208,335

 
                   

Notes and loan payables

$

446

 

$

-

 

$

10

 

$

1,315

 

$

-

 

$

1,771

 

Accounts payable and accrued liabilities

 

3,137

  

3

  

1

  

32,979

  

-

  

36,120

 

Income taxes payable

 

553

  

1

  

2

  

7,860

  

-

  

8,416

 

      Total current liabilities

 

4,136

  

4

  

13

  

42,154

  

-

  

46,307

 

Long-term debt

 

270

  

160

  

1,456

  

4,334

  

-

  

6,220

 

Deferred income tax liabilities

 

2,909

  

27

  

257

  

17,685

  

-

  

20,878

 

Other long-term liabilities

 

5,411

  

13

  

-

  

18,320

  

-

  

23,744

 

Intercompany payables

 

90,705

  

121

  

383

  

303,345

  

(394,554

)

 

-

 

      Total liabilities

 

103,431

  

325

  

2,109

  

385,838

  

(394,554

)

 

97,149

 
                   

Earnings reinvested

 

163,335

  

23

  

(361

)

 

108,770

  

(108,432

)

 

163,335

 

Other shareholders' equity

 

(52,149

)

 

785

  

469

  

436,303

  

(437,557

)

 

(52,149

)

      Total shareholders' equity

 

111,186

  

808

  

108

  

545,073

  

(545,989

)

 

111,186

 

      Total liabilities and

        shareholders' equity


$


214,617

 


$


1,133

 


$


2,217

 


$


930,911

 


$


(940,543


)


$


208,335

 



-17-



     

SeaRiver

       
 

Exxon Mobil

   

Maritime

   

Consolidating

   
 

Corporation

 

Exxon

 

Financial

   

and

   
 

Parent

 

Capital

 

Holdings

 

All Other

 

Eliminating

   
 

Guarantor

 

Corporation

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 
 

(millions of dollars)

 
                   

Condensed consolidated statement of cash flows for six months ended June 30, 2006

    

Cash provided by/(used in) operating

activities


$


1,686

 


$


34

 


$


54

 


$


25,297

 


$


(1,144


)


$


25,927

 

Cash flows from investing activities

                  

Additions to property, plant and

equipment

 


(755


)

 


-

  


-

  


(6,831


)

 


-

  


(7,586


)

Sales of long-term assets

 

96

  

-

  

-

  

1,354

  

-

  

1,450

 

Net intercompany investing

 

12,576

  

(48

)

 

(55

)

 

(12,594

)

 

121

  

-

 

All other investing, net

 

-

  

-

  

-

  

(640

)

 

-

  

(640

)

Net cash provided by/(used in)

investing activities

 


11,917

  


(48


)

 


(55


)

 


(18,711


)

 


121


 


(6,776


)

Cash flows from financing activities

                  

Additions to long-term debt

 

-

  

-

  

-

  

72

  

-

  

72

 

Reductions in long-term debt

 

-

  

-

  

-

  

(27

)

 

-

  

(27

)

Additions/(reductions) in short-term

debt - net

 


(122


)

 


-


 


-

  


228


 


-

  


106


Cash dividends

 

(3,883

)

 

-

  

-

  

(1,144

)

 

1,144

  

(3,883

)

Net ExxonMobil shares sold/(acquired)

 

(12,394

)

 

-

  

-

  

-

  

-

  

(12,394

)

Net intercompany financing activity

 

-

  

14

  

1

  

106

  

(121

)

 

-

 

All other financing, net

 

128

  

-

  

-

  

(377

)

 

-

  

(249

)

Net cash provided by/(used in)

financing activities

 


(16,271


)

 


14


 


1


 


(1,142


)

 


1,023

  


(16,375


)

Effects of exchange rate changes

on cash

 


-

  


-

  


-

  


666


 


-

  


666


Increase/(decrease) in cash and cash

equivalents


$


(2,668


)


$


-



$


-

 


$


6,110

 


$


-

 


$


3,442

 


Condensed consolidated statement of cash flows for six months ended June 30, 2005

    

Cash provided by/(used in) operating

activities


$


768

 


$


24

 


$


16

 


$


21,798

 


$


(625


)


$


21,981

 

Cash flows from investing activities

                  

Additions to property, plant and

equipment

 


(645


)

 


-

  


-

  


(5,803


)

 


-

  


(6,448


)

Sales of long-term assets

 

62

  

-

  

-

  

3,764

  

-

  

3,826

 

Net intercompany investing

 

9,854

  

47

  

4

  

(9,841

)

 

(64

)

 

-

 

All other investing, net

 

-

  

-

  

-

  

(592

)

 

-

  

(592

)

Net cash provided by/(used in)

investing activities

 


9,271

  


47


 


4

  


(12,472


)

 


(64


)

 


(3,214


)

Cash flows from financing activities

                  

Additions to long-term debt

 

-

  

-

  

-

  

1

  

-

  

1

 

Reductions in long-term debt

 

-

  

-

  

-

  

(11

)

 

-

  

(11

)

Additions/(reductions) in short-term

debt - net

 


23

  


-


 


-

  


(290


)

 


-

  


(267


)

Cash dividends

 

(3,568

)

 

-

  

-

  

(625

)

 

625

  

(3,568

)

Net ExxonMobil shares sold/(acquired)

 

(6,696

)

 

-

  

-

  

-

  

-

  

(6,696

)

Net intercompany financing activity

 

-

  

(75

)

 

(20

)

 

31

  

64

  

-

 

All other financing, net

 

-

  

-

  

-

  

(331

)

 

-

  

(331

)

Net cash provided by/(used in)

financing activities

 


(10,241


)

 


(75


)

 


(20


)

 


(1,225


)

 


689

  


(10,872


)

Effects of exchange rate changes

on cash

 


-

  


-

  


-

  


(778


)

 


-

  


(778


)

Increase/(decrease) in cash and cash

equivalents


$


(202


)


$


(4


)


$


-

 


$


7,323

 


$


-

 


$


7,117

 




-18-


EXXON MOBIL CORPORATION


Item 2.

Management's Discussion and Analysis of Financial Condition

and Results of Operations


FUNCTIONAL EARNINGS SUMMARY


 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

Net Income (U.S. GAAP)

            

Upstream

            

   United States

$

1,644

 

$

1,389

 

$

2,924

 

$

2,742

 

   Non-U.S.

 

5,490

  

3,519

  

10,593

  

7,220

 

Downstream

            

   United States

 

1,354

  

999

  

2,033

  

1,644

 

   Non-U.S.

 

1,131

  

1,022

  

1,723

  

1,830

 

Chemical

            

   United States

 

189

  

343

  

518

  

835

 

   Non-U.S.

 

651

  

471

  

1,271

  

1,411

 

Corporate and financing

 

(99

)

 

(103

)

 

(302

)

 

(182

)

Net Income (U.S. GAAP)

$

10,360

 

$

7,640

 

$

18,760

 

$

15,500

 
             
             

Net income per common share (dollars)

$

1.74

 

$

1.21

 

$

3.12

 

$

2.44

 

Net income per common share

            

   - assuming dilution (dollars)

$

1.72

 

$

1.20

 

$

3.09

 

$

2.42

 
             

Special items included in net income

            

U.S. Downstream

            

   Allapattah lawsuit provision

$

0

 

$

(200

)

$

0

 

$

(200

)

Non-U.S. Downstream

            

   Sale of Sinopec shares

$

0

 

$

0

 

$

0

 

$

310

 

Non-U.S. Chemical

            

   Sale of Sinopec shares

$

0

 

$

0

 

$

0

 

$

150

 



REVIEW OF SECOND QUARTER AND FIRST SIX MONTHS 2006 RESULTS


Exxon Mobil Corporation reported record second quarter 2006 net income of $10,360 million, an increase of $2,720 million (36 percent) from the second quarter of 2005.  Higher crude oil and natural gas realizations and improved refining margins were partly offset by lower marketing margins.  Earnings per share of $1.72 increased 43 percent, reflecting strong earnings and the reduction in the number of shares outstanding.


_____________________________________________


First half net income, a record of $18,760 million, increased by 21 percent versus first half 2005 reflecting ExxonMobil's strong execution across all business segments.  Earnings per share of $3.09 increased by 28 percent due to strong earnings and the reduction in the number of shares outstanding.  First half 2005 included a $460 million positive impact from the sale of the Corporation's interest in Sinopec and a $200 million special charge for Allapattah.






-19-



 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

Upstream earnings

            

   United States

$

1,644

 

$

1,389

 

$

2,924

 

$

2,742

 

   Non-U.S.

 

5,490

  

3,519

  

10,593

  

7,220

 

Total

$

7,134

 

$

4,908

 

$

13,517

 

$

9,962

 



Upstream earnings were $7,134 million, up $2,226 million from the second quarter of 2005 primarily reflecting higher crude oil and natural gas realizations.  On an oil-equivalent basis, production increased by 6 percent from the second quarter of 2005.  Excluding the impact of divestments and entitlements, production increased 9 percent.


Liquids production of 2,701 kbd (thousands of barrels per day) was 233 kbd higher.  Higher production from projects in West Africa and increased volumes in Abu Dhabi were partly offset by mature field decline, entitlement effects and divestment impacts.  Excluding entitlement and divestment effects, liquids production increased by 14 percent.


Second quarter natural gas production was 8,769 mcfd (millions of cubic feet per day) compared with 8,709 mcfd last year.  Higher volumes from projects in Qatar were partly offset by the impact of mature field decline and planned maintenance activity.


Earnings from U.S. Upstream operations were $1,644 million, $255 million higher than the second quarter of 2005.  Non-U.S. Upstream earnings were $5,490 million, up $1,971 million from 2005.  


_____________________________________________


Upstream earnings for the first six months of 2006 were $13,517 million, an increase of $3,555 million from 2005, primarily reflecting higher liquids and natural gas realizations.  On an oil-equivalent basis, production increased 6 percent from last year.  Excluding divestment and entitlement effects, production increased by 8 percent.


Liquids production of 2,700 kbd increased by 194 kbd from 2005.  Higher production from projects in West Africa and increased volumes in Abu Dhabi were partly offset by mature field decline, entitlement effects and divestment impacts.  Excluding entitlement effects and divestments, liquids production increased 12 percent.


Natural gas production of 9,967 mcfd increased 226 mcfd from 2005.  Higher volumes from projects in Qatar were partly offset by mature field decline and planned maintenance activity.


Earnings from U.S. Upstream operations for 2006 were $2,924 million, an increase of $182 million.  Earnings outside the U.S. were $10,593 million, $3,373 million higher than 2005.





-20-



 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

Downstream earnings

            

   United States

$

1,354

 

$

999

 

$

2,033

 

$

1,644

 

   Non-U.S.

 

1,131

  

1,022

  

1,723

  

1,830

 

Total

$

2,485

 

$

2,021

 

$

3,756

 

$

3,474

 

Special items included in net income

            

U.S. Downstream

            

   Allapattah lawsuit provision

$

0

 

$

(200

)

$

0

 

$

(200

)

Non-U.S. Downstream

            

   Sale of Sinopec shares

$

0

 

$

0

 

$

0

 

$

310

 


Downstream earnings of $2,485 million increased $464 million from the second quarter 2005.  The improved results reflect stronger worldwide refining margins, which were partly offset by weaker marketing margins and lower refining throughput.  Second quarter 2005 included a $200 million charge for the Allapattah lawsuit provision.


Petroleum product sales were 7,060 kbd, 450 kbd lower than last year's second quarter, primarily due to lower refining throughput associated with planned maintenance and divestments.


U.S. Downstream earnings were $1,354 million, up $355 million.  Non-U.S. Downstream earnings of $1,131 million were $109 million higher than in the second quarter of 2005.


_____________________________________________


Downstream earnings for the first six months of 2006 of $3,756 million increased $282 million from 2005 reflecting stronger worldwide refining margins, partly offset by weaker marketing margins and lower refining throughput.  First half 2005 earnings also included a $200 million charge for Allapattah and a $310 million positive impact for Sinopec.


Petroleum product sales of 7,118 kbd decreased from 7,502 kbd in 2005, primarily due to lower refining throughput and divestments.


U.S. Downstream earnings were $2,033 million, up $389 million.  Non-U.S. Downstream earnings were $1,723 million, an increase of $203 million after the absence of the Sinopec gain in 2005.


 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

Chemical earnings

            

   United States

$

189

 

$

343

 

$

518

 

$

835

 

   Non-U.S.

 

651

  

471

  

1,271

  

1,411

 

Total

$

840

 

$

814

 

$

1,789

 

$

2,246

 

Special items included in net income

            

Non-U.S. Chemical

            

   Sale of Sinopec shares

$

0

 

$

0

 

$

0

 

$

150

 


Chemical earnings were $840 million, up $26 million from the second quarter 2005.  Prime product sales of 6,855 kt (thousands of metric tons) were up 263 kt from last year's second quarter due to stronger commodity sales.

_____________________________________________


Chemical earnings for the first six months of 2006 were $1,789 million, down $457 million from 2005 reflecting weaker margins and the absence of the $150 million gain for Sinopec, partly offset by higher volumes.  Prime product sales were 13,771 kt, up 241 kt from 2005.


-21-



 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

All other segments earnings

            

Corporate and financing

$

(99

)

$

(103

)

$

(302

)

$

(182

)



Corporate and financing expenses were $99 million, versus $103 million in second quarter 2005.


_____________________________________________


Corporate and financing expenses for the first six months of $302 million increased by $120 million mainly due to tax items.



LIQUIDITY AND CAPITAL RESOURCES

 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

Net cash provided by/(used in)

            

Operating activities

      

$

25,927

 

$

21,981

 

Investing activities

       

(6,776

)

 

(3,214

)

Financing activities

       

(16,375

)

 

(10,872

)

Effect of exchange rate changes

       

666

  

(778

)

Increase/(decrease) in cash and cash equivalents

      

$

3,442

 

$

7,117

 
             

Cash and cash equivalents

      

$

32,113

 

$

25,648

 

Cash and cash equivalents - restricted (note 4)

       

4,604

  

4,604

 

Total cash and cash equivalents (at end of period)

      

$

36,717

 

$

30,252

 
             

Cash flow from operations and asset sales

            

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

$

11,296

 

$

9,013

 

$

25,927

 

$

21,981

 

Sales of subsidiaries, investments and property,

            

    plant and equipment

 

1,056

  

2,029

  

1,450

  

3,826

 

Cash flow from operations and asset sales

$

12,352

 

$

11,042

 

$

27,377

 

$

25,807

 


Because of the ongoing nature of our asset management and divestment program, we believe

it is useful for investors to consider asset sales proceeds together with cash provided by operating

activities when evaluating cash available for investment in the business and financing activities.


Total cash and cash equivalents, including the $4.6 billion of restricted cash, was $36.7 billion at the end of the second quarter of 2006.


Cash provided by operating activities totaled $25,927 million for the first six months of 2006 and increased $3,946 million from 2005.  Major sources of funds were net income of $18,360 million and non-cash provisions of $5,404 million for depreciation and depletion.  For additional details, see the Condensed Consolidated Statement of Cash Flows on page 5.


Investing activities for the first six months of 2006 used net cash of $6,776 million compared to $3,214 million in the prior year. Spending for additions to property, plant and equipment increased $1,138 million to $7,586 million.  Proceeds from asset divestments were $2,376 million lower in 2006 reflecting the absence of the $1.4 billion of proceeds from the sale of the Corporation's interest in Sinopec in 2005.


Cash flow from operations and asset sales in the first six months of 2006 of $27.4 billion, including asset sales of $1.5 billion, increased from 2005 as higher cash from operating activities more than offset the lower proceeds from asset sales.  Cash flow from operations and asset sales in the second quarter of 2006 was $12.4 billion, including asset sales of $1.1 billion.


-22-


Net cash used in financing activities of $16,375 million in the first six months of 2006 compared to $10,872 million in the 2005 period reflecting a higher level of purchases of shares of ExxonMobil stock.


During the second quarter of 2006, Exxon Mobil Corporation purchased 111 million shares of its common stock for the treasury at a gross cost of $6.8 billion.  These purchases included $6.0 billion to reduce the number of shares outstanding and the balance to offset shares issued in conjunction with the company benefits plans and programs.  Shares outstanding were reduced from 6,050 million at the end of the first quarter to 5,945 million at the end of the second quarter.  As a consequence of the continued strengthening of our financial position, share purchases to reduce shares outstanding will be increased to $7.0 billion in the third quarter.  


Gross share purchases in the first half of 2006 were $12.8 billion, which reduced shares outstanding by 3.1 percent.  Shares outstanding have been reduced by over one billion shares since the ExxonMobil merger in 1999.  Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.


The Corporation distributed a total of $7.9 billion to shareholders in the second quarter of 2006 through dividends and share purchases to reduce shares outstanding, an increase of 48 percent or $2.6 billion versus 2005.  For the first half of 2006, distributions to shareholders totaled $14.9 billion, an increase of $5.3 billion versus 2005.


Total debt of $8.4 billion at June 30, 2006 compared to $8.0 billion at year-end 2005.  The Corporation's debt to total capital ratio was 6.5 percent at the end of the second quarter of 2006, the same as at year-end 2005.


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.


Litigation and other contingencies are discussed in note 4 to the unaudited condensed consolidated financial statements.


The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade.  Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses.



TAXES

 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

Taxes

            

Income taxes

$

7,844

 

$

5,119

 

$

14,903

 

$

10,162

 

Excise taxes

 

8,211

  

7,515

  

15,875

  

14,753

 

All other taxes and duties

 

11,033

  

11,212

  

20,780

  

22,156

 

Total

$

27,088

 

$

23,846

 

$

51,558

 

$

47,071

 
             

Effective income tax rate

 

44.2

%

 

41.4

%

 

45.7

%

 

41.3

%


Income, excise and all other taxes for the second quarter of 2006 of $27,088 million were up $3,242 million compared to 2005.  In the second quarter of 2006 income tax expense was $7,844 million and the effective income tax rate was 44.2 percent, compared to $5,119 million and 41.4 percent, respectively, in the prior year period.  The total of excise and all other taxes and duties was higher as the effects of higher prices were only partly offset by the tax impact of net of reporting purchases and sales of inventory with the same counterparty.


_____________________________________________



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Income, excise and all other taxes for the first six months of 2006 of $51,558 million were up $4,487 million compared to 2005.  In the first six months of 2006 income tax expense was $14,903 million and the effective income tax rate was 45.7 percent, compared to $10,162 million and 41.3 percent, respectively, in the prior year period.  The total of excise and all other taxes and duties were similar as effects of higher prices were offset by the tax impact of net reporting of purchases and sales of inventory with the same counterparty.



CAPITAL AND EXPLORATION EXPENDITURES


 

Second Quarter

 

First Six Months

 
  

2006

  

2005

  

2006

  

2005

 
  

(millions of dollars)

 

Capital and exploration expenditures

            

Upstream (including exploration expenses)

$

3,932

 

$

3,678

 

$

8,019

 

$

6,490

 

Downstream

 

742

  

649

  

1,323

  

1,101

 

Chemical

 

186

  

175

  

330

  

323

 

Other

 

41

  

35

  

53

  

40

 

Total

$

4,901

 

$

4,537

 

$

9,725

 

$

7,954

 


ExxonMobil continued its active investment program in the second quarter, spending $4.9 billion on capital and exploration projects, an increase of 8 percent versus 2005.   In the second quarter of 2006, the results of the Company's continuing long-term investment program yielded an additional 243 thousand oil-equivalent barrels per day of production, a 6 percent increase over the second quarter of 2005.


_____________________________________________


Capital and exploration expenditures in the first six months of 2006 were $9.7 billion, an increase of $1.8 billion versus 2005.


As a result of additional Upstream opportunities, the Corporation expects the level of capital and exploration spending to be about $20 billion in 2006, an increase of $1 billion from the forecast discussed in the first quarter and compared to $18 billion in 2005.



RECENTLY ISSUED ACCOUNTING STANDARD


In June 2006, the Financial Accounting Standards Board (FASB) issued FASB Interpretation No. 48 (FIN 48), "Accounting for Uncertainty in Income Taxes".  FIN 48 is an interpretation of FASB Statement No. 109 "Accounting for Income Taxes" and must be adopted by the Corporation no later than January 1, 2007.  FIN 48 prescribes a comprehensive model for recognizing, measuring, presenting, and disclosing in the financial statements uncertain tax positions that the company has taken or expects to take in its tax returns.  The Corporation is evaluating the impact of adopting FIN 48.



FORWARD-LOOKING STATEMENTS


Statements in this report relating to future plans, projections, events, or conditions are forward-looking statements.  Actual results, including project plans, resource recoveries, timing, and capacities, could differ materially due to changes in long-term oil or gas prices or other market conditions affecting the oil and gas industry; political events or disturbances; reservoir performance; the outcome of commercial negotiations; potential liability resulting from pending or future litigation; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading "Risk Factors" in Item 1A of ExxonMobil's 2005 Form 10-K.  We assume no duty to update these statements as of any future date.



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Item 3.  Quantitative and Qualitative Disclosures About Market Risk


Information about market risks for the six months ended June 30, 2006, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2005.



Item 4.  Controls and Procedures


As indicated in the certifications in Exhibit 31 of this report, the Corporation's chief executive officer, principal financial officer and principal accounting officer have evaluated the Corporation's disclosure controls and procedures as of June 30, 2006.  Based on that evaluation, these officers have concluded that the Corporation's disclosure controls and procedures are effective in ensuring that material information required to be in this quarterly report is made known to them on a timely basis.  There were no changes during the Corporation's last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.



PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings


The State of New York Attorney General (AG) sued Mobil Oil Corporation and a number of other parties in New York state court, Albany County, under the New York State Navigation Law, alleging that petroleum was discharged at a former Mobil-branded service station located in Hopewell Junction (Dutchess County), New York.  The AG alleges that the discharge has impacted soil and groundwater in the vicinity of the service station.  Although the AG filed the complaint in 1998, no specific penalty demand was made against Mobil at that time.  In early 2006, the AG asserted for the first time during settlement negotiations a demand to ExxonMobil for a penalty of $120,000.  Negotiations continue between ExxonMobil and the AG.      


The State of New York Attorney General (AG) sued a number of parties, including ExxonMobil, in New York state court, Albany County, seeking penalties relating to an alleged discharge of petroleum at a Mobil-branded service station in Uniondale, New York.  The suit (captioned "State of New York v. United Gas Corp. et al.") alleges that the discharge has impacted soil and groundwater in the vicinity of the service station.  Although the AG filed the complaint under the New York State Navigation Law against ExxonMobil and the other parties in September 2004, no specific penalty demand was made against Mobil at that time.  In early 2006, it became evident in discussions between ExxonMobil and the AG that the AG likely will seek a civil penalty against ExxonMobil for an amount above $100,000.  


The State of Maryland Department of the Environment (MDE) has filed a complaint seeking injunctive relief, penalties and damages against ExxonMobil with respect to an alleged release of petroleum from an underground storage tank at a dealer-operated, Exxon-branded service station in Jacksonville, Maryland.  The MDE filed its complaint on May 15, 2006 seeking a civil penalty of in excess of $100,000 and unspecified damages.  The case is captioned "State of Maryland, Department of the Environment v. Exxon Mobil Corporation" and was filed in the Circuit Court for Baltimore County, State of Maryland.





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On May 11, 2006, the Pennsylvania Department of Environmental Protection (PDEP) issued a proposed Consent Assessment of Civil Penalty to Mobil Pipe Line Company pursuant to the Pennsylvania Clean Streams Law to resolve its allegations that Mobil discharged gasoline into the soil and groundwater in South Whitehall Township, Pennsylvania.  The release allegedly occurred from a pipeline and also caused a fire beginning on February 1, 2005 and continuing until February 4, 2005.  The proposed Consent Assessment of Civil Penalty provides for payment of $122,000 as a combined civil penalty and cost reimbursement amount.  Negotiation of the terms of the Consent Assessment of Civil Penalty and the payment amount are ongoing.


As previously reported, The New York State Department of Environmental Conservation (NYSDEC) issued a Notice of Hearing and Complaint on March 24, 2004 alleging that ExxonMobil Oil Corporation in whole or in part is responsible for a discharge of 17 million gallons of petroleum prior to 1978 in connection with past operations at its Brooklyn terminal. The NYSDEC also alleges that the Brooklyn terminal had numerous spills after 1978, in violation of New York navigational law.  In May 2006, the NYSDEC requested a penalty of $3 million, an environmental benefits project worth $7 million, a $2 million payment for a natural resource damages assessment, and a $1 million payment for oversight costs.  In late May, the NYSDEC notified ExxonMobil that it was discontinuing negotiations with ExxonMobil.  On June 19, 2006, the NYSDEC referred the matter to the New York State Attorney General (AG).  The AG has made no decision on whether to file suit and will meet with ExxonMobil before making that decision.  The Corporation has been conducting investigations and remediation activities in accordance with two NYSDEC consent orders since 1990.


Refer to the relevant portions of note 4 on pages 9 and 10 of this Quarterly Report on Form 10-Q for further information on legal proceedings.



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


 

Issuer purchase of equity securities for quarter ended June 30, 2006

          
       

Total Number of

 

Maximum Number

       

Shares Purchased

 

of Shares that May

   

Total Number

 

Average

 

as Part of Publicly

 

Yet Be Purchased

   

Of Shares

 

Price Paid

 

Announced Plans

 

Under the Plans or

 

Period

 

Purchased

 

per Share

 

or Programs

 

Programs

          
 

April, 2006

 

29,388,737

 

$62.71

 

29,388,737

  
          
 

May, 2006

 

40,834,949

 

$62.11

 

40,834,949

  
          
 

June, 2006

 

41,221,239

 

$59.27

 

41,221,239

  
          
 

Total

 

111,444,925

 

$61.22

 

111,444,925

 

(See Note 1)


Note 1 -- On August 1, 2000, the Corporation announced its intention to resume purchases of shares of its common stock for the treasury both to offset shares issued in conjunction with company benefit plans and programs and to gradually reduce the number of shares outstanding.  The announcement did not specify an amount or expiration date.  The Corporation has continued to purchase shares since this announcement and to report purchased volumes in its quarterly earnings releases.  In its most recent earnings release dated July 27, 2006, the Corporation stated its intention to increase share purchases to $7.0 billion to reduce shares outstanding in the third quarter of 2006.  Purchases may be made in both the open market and through negotiated transactions, and purchases may be increased, decreased or discontinued at any time without prior notice.



-26-



Item 4.  Submission of Matters to a Vote of Security Holders


At the annual meeting of shareholders on May 31, 2006, the following proposals were voted upon.  Percentages are based on the total of the shares voted For and Against.


Concerning Election of Directors

     
  

 Votes

 

 Votes

Nominees

 

 Cast For

 

 Withheld

Michael J. Boskin

 

4,805,851,594

94.5%

279,037,697

William W. George

 

4,955,443,300

97.5%

129,445,991

James R. Houghton

 

4,053,173,121

79.7%

1,031,716,170

William R. Howell

 

4,031,846,797

79.3%

1,053,042,494

Reatha Clark King

 

4,056,049,319

79.8%

1,028,839,972

Philip E. Lippincott

 

4,885,524,586

96.1%

199,364,705

Henry A. McKinnell, Jr.

 

4,793,661,667

94.3%

291,227,624

Marilyn Carlson Nelson

 

4,922,580,912

96.8%

162,308,379

Samuel J. Palmisano

 

4,925,478,824

96.9%

159,410,467

Walter V. Shipley

 

4,170,545,769

82.0%

914,343,522

J. Stephen Simon

 

4,927,167,788

96.9%

157,721,503

Rex W. Tillerson

 

4,922,144,565

96.8%

162,744,726

     

Concerning Ratification of Independent Auditors

  

Votes Cast For:

 

4,927,953,654

97.9%

 

Votes Cast Against:

 

103,473,850

2.1%

 

Abstentions:

 

53,461,787

  

Broker Non-Votes:

 

0

  
     

Concerning Cumulative Voting

  

Votes Cast For:

 

1,328,801,926

34.0%

 

Votes Cast Against:

 

2,581,637,220

66.0%

 

Abstentions:

 

158,126,241

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Majority Vote

  

Votes Cast For:

 

2,073,130,957

52.2%

 

Votes Cast Against:

 

1,897,793,240

47.8%

 

Abstentions:

 

97,641,190

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Industry Experience

  

Votes Cast For:

 

250,750,995

6.3%

 

Votes Cast Against:

 

3,723,626,758

93.7%

 

Abstentions:

 

94,187,634

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Director Qualifications

  

Votes Cast For:

 

273,577,214

6.9%

 

Votes Cast Against:

 

3,698,462,712

93.1%

 

Abstentions:

 

96,525,461

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Director Compensation

  

Votes Cast For:

 

300,088,180

7.6%

 

Votes Cast Against:

 

3,659,471,878

92.4%

 

Abstentions:

 

109,005,329

  

Broker Non-Votes:

 

1,016,323,904

  


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Concerning Board Chairman and CEO

  

Votes Cast For:

 

1,339,408,466

34.3%

 

Votes Cast Against:

 

2,561,198,795

65.7%

 

Abstentions:

 

167,958,126

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Executive Compensation Report

  

Votes Cast For:

 

507,745,843

12.8%

 

Votes Cast Against:

 

3,453,396,050

87.2%

 

Abstentions:

 

107,423,494

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Executive Compensation Criteria

  

Votes Cast For:

 

354,143,264

9.1%

 

Votes Cast Against:

 

3,551,276,218

90.9%

 

Abstentions:

 

163,145,905

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Political Contributions Report

    

Votes Cast For:

 

420,303,736

11.5%

 

Votes Cast Against:

 

3,244,415,564

88.5%

 

Abstentions:

 

403,846,087

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Corporate Sponsorships Report

    

Votes Cast For:

 

304,085,684

8.3%

 

Votes Cast Against:

 

3,378,400,194

91.7%

 

Abstentions:

 

386,079,509

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Amendment of EEO Policy

    

Votes Cast For:

 

1,320,000,373

34.6%

 

Votes Cast Against:

 

2,498,061,196

65.4%

 

Abstentions:

 

250,503,818

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Biodiversity Impact Report

    

Votes Cast For:

 

308,658,243

8.5%

 

Votes Cast Against:

 

3,321,334,478

91.5%

 

Abstentions:

 

438,572,666

  

Broker Non-Votes:

 

1,016,323,904

  
     

Concerning Community Environmental Impact

    

Votes Cast For:

 

368,695,329

10.0%

 

Votes Cast Against:

 

3,302,763,927

90.0%

 

Abstentions:

 

397,106,131

  

Broker Non-Votes:

 

1,016,323,904

  



For additional information, see the registrant's definitive proxy statement dated April 12, 2006 -- from page 6, beginning with "Item 1 - Election of Directors", through page 9; and -- from page 32, beginning with "Item 2 - Ratification of Independent Auditors", through page 55.




-28-




Item 6.  Exhibits


Exhibit

Description


3(i)

Restated Certificate of Incorporation, as restated November 30, 1999 and as further amended effective June 20, 2001.


31.1

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief

 

  Executive Officer.


31.2

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal

  Financial Officer.


31.3

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal

  Accounting Officer.


32.1

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief

  

 

  Executive Officer.


32.2

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by

  Principal Financial Officer.


32.3

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by

  Principal Accounting Officer.





-29-






EXXON MOBIL CORPORATION



SIGNATURE




Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.




EXXON MOBIL CORPORATION




Date: August 4, 2006  

By:   /s/  Patrick T. Mulva                        

        Name:  Patrick T. Mulva

           

        Title:     Vice President, Controller and

                      Principal Accounting Officer





-30-




INDEX TO EXHIBITS


Exhibit

Description


3(i)

Restated Certificate of Incorporation, as restated November 30, 1999 and as

  further amended effective June 20, 2001.


31.1

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by

  Chief Executive Officer.


31.2

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by

  Principal Financial Officer.


31.3

Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by

  Principal Accounting Officer.


32.1

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief

  

  Executive Officer.


32.2

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal

 

   Financial Officer.


32.3

Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal

 

   Accounting Officer.








-31-