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, 2008


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, a non-accelerated filer, or a smaller reporting company.  See the definitions of "large accelerated filer," "accelerated filer" and "smaller reporting company" in Rule 12b-2 of the Exchange Act.

Large accelerated filer   X 

Accelerated filer      

Non-accelerated filer      

Smaller reporting company      


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


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



                      Class                                                                        Outstanding as of June 30, 2008

Common stock, without par value                                                              5,194,003,020                







EXXON MOBIL CORPORATION


FORM 10-Q


FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2008


TABLE OF CONTENTS


Page

Number


PART I.  FINANCIAL INFORMATION


Item 1.

Financial Statements


Condensed Consolidated Statement of Income

3

Three and six months ended June 30, 2008 and 2007


Condensed Consolidated Balance Sheet

4

As of June 30, 2008 and December 31, 2007


Condensed Consolidated Statement of Cash Flows

5

Six months ended June 30, 2008 and 2007


Notes to Condensed Consolidated Financial Statements

6-15


Item 2.

Management's Discussion and Analysis of Financial

Condition and Results of Operations

16-21


Item 3.

Quantitative and Qualitative Disclosures About Market Risk

22


Item 4.

Controls and Procedures

22


PART II.  OTHER INFORMATION


Item 1.

Legal Proceedings

22-23


Item 2.

Unregistered Sales of Equity Securities and Use of Proceeds

23


Item 4.

Submission of Matters to a Vote of Security Holders

24-26


Item 6.

Exhibits

26


Signature

27


Index to Exhibits

28




-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,

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

 

REVENUES AND OTHER INCOME

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue (1)

$

133,776

 

$

95,059

 

$

246,999

 

$

179,233

 

Income from equity affiliates

 

2,983

 

 

2,015

 

 

5,792

 

 

3,930

 

Other income (2)

 

1,313

 

 

1,276

 

 

2,135

 

 

2,410

 

       Total revenues and other income

 

138,072

 

 

98,350

 

 

254,926

 

 

185,573

 

 

 

 

 

 

 

 

 

 

 

 

 

 

COSTS AND OTHER DEDUCTIONS

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

76,695

 

 

47,627

 

 

137,666

 

 

87,669

 

Production and manufacturing expenses

 

10,066

 

 

7,678

 

 

18,959

 

 

14,961

 

Selling, general and administrative expenses

 

4,389

 

 

3,788

 

 

8,191

 

 

7,180

 

Depreciation and depletion

 

3,090

 

 

2,994

 

 

6,194

 

 

5,936

 

Exploration expenses, including dry holes

 

338

 

 

353

 

 

680

 

 

625

 

Interest expense

 

107

 

 

96

 

 

237

 

 

199

 

Sales-based taxes (1)

 

9,538

 

 

7,810

 

 

17,970

 

 

15,094

 

Other taxes and duties

 

11,418

 

 

9,888

 

 

22,124

 

 

19,479

 

Income applicable to minority interests

 

225

 

 

188

 

 

507

 

 

438

 

       Total costs and other deductions

 

115,866

 

 

80,422

 

 

212,528

 

 

151,581

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INCOME BEFORE INCOME TAXES

 

22,206

 

 

17,928

 

 

42,398

 

 

33,992

 

       Income taxes

 

10,526

 

 

7,668

 

 

19,828

 

 

14,452

 

NET INCOME

$

11,680

 

$

10,260

 

$

22,570

 

$

19,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER COMMON SHARE (dollars)

$

2.25

 

$

1.85

 

$

4.30

 

$

3.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 - ASSUMING DILUTION (dollars)

$

2.22

 

$

1.83

 

$

4.25

 

$

3.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

DIVIDENDS PER COMMON SHARE (dollars)

$

0.40

 

$

0.35

 

$

0.75

 

$

0.67

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Sales-based taxes included in sales and other

 

 

 

 

 

 

 

 

 

 

         operating revenue

$

9,538

 

$

7,810

 

$

17,970

 

$

15,094

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(2) Includes $62 million gain from sale of non-U.S. investment,

 

 

 

 

 

 

 

 

 

 

         net of related $143 million foreign exchange loss

$

(81

)

$

0

 

$

(81

)

$

0

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.



-3-



EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEET

(millions of dollars)


 

June 30,

 

Dec. 31,

 

 

2008

 

2007

 

ASSETS

 

 

 

 

 

 

 

 

Current assets

 

 

 

 

 

 

 

 

   Cash and cash equivalents

 

$

38,968

 

 

$

33,981

 

   Marketable securities

 

 

732

 

 

 

519

 

   Notes and accounts receivable - net

 

 

41,820

 

 

 

36,450

 

   Inventories

 

 

 

 

 

 

 

 

     Crude oil, products and merchandise

 

 

13,513

 

 

 

8,863

 

     Materials and supplies

 

 

2,348

 

 

 

2,226

 

   Prepaid taxes and expenses

 

 

6,601

 

 

 

3,924

 

     Total current assets

 

 

103,982

 

 

 

85,963

 

Property, plant and equipment - net

 

 

124,925

 

 

 

120,869

 

Investments and other assets

 

 

37,851

 

 

 

35,250

 

 

 

 

 

 

 

 

 

 

     TOTAL ASSETS

 

$

266,758

 

 

$

242,082

 

 

 

 

 

 

 

 

 

 

LIABILITIES

 

 

 

 

 

 

 

 

Current liabilities

 

 

 

 

 

 

 

 

   Notes and loans payable

 

$

2,310

 

 

$

2,383

 

   Accounts payable and accrued liabilities

 

 

60,262

 

 

 

45,275

 

   Income taxes payable

 

 

14,661

 

 

 

10,654

 

     Total current liabilities

 

 

77,233

 

 

 

58,312

 

Long-term debt

 

 

7,327

 

 

 

7,183

 

Deferred income tax liabilities

 

 

24,299

 

 

 

22,899

 

Other long-term liabilities

 

 

33,073

 

 

 

31,926

 

 

 

 

 

 

 

 

 

 

     TOTAL LIABILITIES

 

 

141,932

 

 

 

120,320

 

 

 

 

 

 

 

 

 

 

Commitments and contingencies (note 3)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SHAREHOLDERS' EQUITY

 

 

 

 

 

 

 

 

Common stock, without par value:

 

 

 

 

 

 

 

 

   Authorized:  

9,000 million shares

 

 

 

 

 

 

 

 

   Issued:      

8,019 million shares

 

 

4,904

 

 

 

4,933

 

Earnings reinvested

 

 

247,111

 

 

 

228,518

 

Accumulated other comprehensive income

 

 

 

 

 

 

 

 

   Cumulative foreign exchange translation adjustment

 

 

9,689

 

 

 

7,972

 

   Postretirement benefits reserves adjustment

 

 

(5,842

)

 

 

(5,983

)

Common stock held in treasury:

 

 

 

 

 

 

 

 

       2,825 million shares at June 30, 2008

 

 

(131,036

)

 

 

 

 

       2,637 million shares at December 31, 2007

 

 

 

 

 

 

(113,678

)

 

 

 

 

 

 

 

 

 

     TOTAL SHAREHOLDERS' EQUITY

 

 

124,826

 

 

 

121,762

 

 

 

 

 

 

 

 

 

 

     TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

 

$

266,758

 

 

$

242,082

 

 

 

 

 

 

 

 

 

 

The number of shares of common stock issued and outstanding at June 30, 2008 and

December 31, 2007 were 5,194,003,020 and 5,381,795,265, respectively.

 

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.




-4-




EXXON MOBIL CORPORATION

CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS

(millions of dollars)




 

 

Six Months Ended

 

 

 

June 30,

 

 

 

 

2008

 

 

 

2007

 

CASH FLOWS FROM OPERATING ACTIVITIES

 

 

 

 

 

 

 

 

   Net income

 

$

22,570

 

 

$

19,540

 

   Depreciation and depletion

 

 

6,194

 

 

 

5,936

 

   Changes in operational working capital, excluding cash and debt

 

 

7,286

 

 

 

(366

)

   All other items - net

 

 

(1,212

)

 

 

494

 

 

 

 

 

 

 

 

 

 

    Net cash provided by operating activities

 

 

34,838

 

 

 

25,604

 

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM INVESTING ACTIVITIES

 

 

 

 

 

 

 

 

   Additions to property, plant and equipment

 

 

(8,851

)

 

 

(6,892

)

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

 

 

1,572

 

 

 

1,673

 

   Other investing activities - net

 

 

(1,489

)

 

 

(1,104

)

 

 

 

 

 

 

 

 

 

    Net cash used in investing activities

 

 

(8,768

)

 

 

(6,323

)

 

 

 

 

 

 

 

 

 

CASH FLOWS FROM FINANCING ACTIVITIES

 

 

 

 

 

 

 

 

   Additions to long-term debt

 

 

36

 

 

 

99

 

   Reductions in long-term debt

 

 

(53

)

 

 

(75

)

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

 

 

(215

)

 

 

246

 

   Cash dividends to ExxonMobil shareholders

 

 

(3,977

)

 

 

(3,786

)

   Cash dividends to minority interests

 

 

(215

)

 

 

(142

)

   Changes in minority interests and sales/(purchases)

 

 

 

 

 

 

 

 

      of affiliate stock

 

 

(142

)

 

 

(319

)

   Tax benefits related to stock-based awards

 

 

150

 

 

 

237

 

   Common stock acquired

 

 

(18,226

)

 

 

(16,043

)

   Common stock sold

 

 

438

 

 

 

622

 

 

 

 

 

 

 

 

 

 

    Net cash used in financing activities

 

 

(22,204

)

 

 

(19,161

)

 

 

 

 

 

 

 

 

 

Effects of exchange rate changes on cash

 

 

1,121

 

 

 

595

 

 

 

 

 

 

 

 

 

 

Increase/(decrease) in cash and cash equivalents

 

 

4,987

 

 

 

715

 

Cash and cash equivalents at beginning of period

 

 

33,981

 

 

 

28,244

 

CASH AND CASH EQUIVALENTS AT END OF PERIOD

 

$

38,968

 

 

$

28,959

 

 

 

 

 

 

 

 

 

 

SUPPLEMENTAL DISCLOSURES

 

 

 

 

 

 

 

 

   Income taxes paid

 

$

15,927

 

 

$

12,382

 

   Cash interest paid

 

$

337

 

 

$

246

 

 

 

The information in the Notes to Condensed Consolidated Financial Statements

is an integral part of these statements.




-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 2007 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.



2.

Fair Value Measurements


Effective January 1, 2008, the Corporation adopted the Financial Accounting Standards Board's (FASB) Statement No. 157 (FAS 157), “Fair Value Measurements” for financial assets and liabilities that are measured at fair value and nonfinancial assets and liabilities that are measured at fair value on a recurring basis.  FAS 157 defines fair value, establishes a framework for measuring fair value when an entity is required to use a fair value measure for recognition or disclosure purposes and expands the disclosures about fair value measurements.  The initial application of FAS 157 is limited to the Corporation's investments in derivative instruments and some debt and equity securities.  The fair value measurements for these instruments are based on quoted prices or observable market inputs.  The value of these instruments is immaterial to the Corporation's financial statements and the related gains or losses from periodic measurement at fair value are de minimis.


On January 1, 2009, the Corporation will adopt FAS 157 for nonfinancial assets and liabilities that are not measured at fair value on a recurring basis. The application of FAS 157 to the Corporation's nonfinancial assets and liabilities will mostly be limited to the recognition and measurement of nonmonetary exchange transactions, asset retirement obligations and asset impairments.  The Corporation does not expect the adoption to have a material impact on the Corporation’s financial statements.



3.

Litigation and Other Contingencies


Litigation


A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. 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.




-6-



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. All 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 September 1996 was in the amount of $5 billion.  Several appeals resulted in a reduction in the award to $2.5 billion by the Ninth Circuit.  In October 2007, the U.S. Supreme Court granted ExxonMobil’s petition for a writ of certiorari.


On June 25, 2008, the U. S. Supreme Court vacated the $2.5 billion punitive damage award previously entered by the Ninth Circuit Court of Appeals and remanded the case to the Circuit Court with an instruction that punitive damages in the case may not exceed a maximum amount of $507.5 million.  Exxon Mobil Corporation recorded an after tax charge of $290 million in the second quarter of 2008 reflecting the maximum amount of the punitive damages.  In early July, the plaintiffs filed a brief with the Supreme Court requesting interest on the punitive damage award from September 1996.  ExxonMobil filed a brief opposing interest for the period prior to the Supreme Court decision in June 2008.  While it is reasonably possible that a liability for interest may be ordered by the court, it is not possible to predict the ultimate outcome or to reasonably estimate the potential liability.


Other Contingencies


 

As of June 30, 2008

 

 

       Equity

 

 

       Other

 

 

 

 

 

    Company

 

 

   Third Party

 

 

 

 

 

 Obligations

 

 

  Obligations

 

   Total

 

 

(millions of dollars)

Total guarantees

 

$

   5,841

 

  $

  922

 

 $

   6,763

 


The Corporation and certain of its consolidated subsidiaries were contingently liable at June 30, 2008, for $6,763 million, primarily relating to guarantees for notes, loans and performance under contracts. Included in this amount were guarantees by consolidated affiliates of $5,841 million, representing ExxonMobil’s share of obligations of certain equity companies. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.


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, 2008, were similar to those at the prior year-end period. Unconditional purchase obligations as defined by accounting standards are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services.


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


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


-7-



To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.



4.

Comprehensive Income



 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income

$

11,680

 

$

10,260

 

$

22,570

 

$

19,540

 

Other comprehensive income

 

 

 

 

 

 

 

 

 

 

 

 

 (net of income taxes)

 

 

 

 

 

 

 

 

 

 

 

 

Foreign exchange translation adjustment

 

86

 

 

1,225

 

 

1,563

 

 

1,648

 

Adjustment for foreign exchange translation

 

 

 

 

 

 

 

 

 

 

 

 

 loss included in net income

 

154

 

 

0

 

 

154

 

 

0

 

Postretirement benefits reserves adjustment

 

 

 

 

 

 

 

 

 

 

 

 

 (excluding amortization)

 

(83

)

 

(167

)

 

(234

)

 

(575

)

Amortization of postretirement benefits reserves

 

 

 

 

 

 

 

 

 

 

 

 

 adjustment included in net periodic benefit costs

 

186

 

 

214

 

 

375

 

 

415

 

Total comprehensive income

$

12,023

 

$

11,532

 

$

24,428

 

$

21,028

 



5.

Earnings Per Share



 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

Net income (millions of dollars)

$

11,680

 

$

10,260

 

$

22,570

 

$

19,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

  outstanding (millions of shares)

 

5,201

 

 

5,555

 

 

5,252

 

 

5,603

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share (dollars)

$

2.25

 

$

1.85

 

$

4.30

 

$

3.49

 

 

 

 

 

 

 

 

 

 

 

 

 

 

NET INCOME PER COMMON SHARE

 

 

 

 

 

 

 

 

 

 

 

 

 - ASSUMING DILUTION

 

 

 

 

 

 

 

 

 

 

 

 

Net income (millions of dollars)

$

11,680

 

$

10,260

 

$

22,570

 

$

19,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

  outstanding (millions of shares)

 

5,201

 

 

5,555

 

 

5,252

 

 

5,603

 

    Effect of employee stock-based awards

 

60

 

 

65

 

 

59

 

 

62

 

Weighted average number of common shares

 

 

 

 

 

 

 

 

 

 

 

 

  outstanding - assuming dilution

 

5,261

 

 

5,620

 

 

5,311

 

 

5,665

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share

 

 

 

 

 

 

 

 

 

 

 

 

   - assuming dilution (dollars)

$

2.22

 

$

1.83

 

$

4.25

 

$

3.45

 


-8-



6.

Pension and Other Postretirement Benefits


 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

 

 

(millions of dollars)

 

Pension Benefits - U.S.

 

 

 

 

 

 

 

 

 

 

 

 

   Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

      Service cost

$

96

 

$

93

 

$

191

 

$

190

 

      Interest cost

 

182

 

 

172

 

 

364

 

 

344

 

      Expected return on plan assets

 

(229

)

 

(212

)

 

(458

)

 

(422

)

      Amortization of actuarial loss/(gain)

 

 

 

 

 

 

 

 

 

 

 

 

        and prior service cost

 

59

 

 

67

 

 

118

 

 

134

 

      Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

        curtailment/settlement cost

 

43

 

 

48

 

 

87

 

 

95

 

      Net benefit cost

$

151

 

$

168

 

$

302

 

$

341

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Pension Benefits - Non-U.S.

 

 

 

 

 

 

 

 

 

 

 

 

   Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

      Service cost

$

114

 

$

112

 

$

227

 

$

221

 

      Interest cost

 

305

 

 

247

 

 

606

 

 

484

 

      Expected return on plan assets

 

(317

)

 

(270

)

 

(635

)

 

(533

)

      Amortization of actuarial loss/(gain)

 

 

 

 

 

 

 

 

 

 

 

 

        and prior service cost

 

109

 

 

111

 

 

210

 

 

223

 

      Net pension enhancement and

 

 

 

 

 

 

 

 

 

 

 

 

        curtailment/settlement cost

 

2

 

 

9

 

 

2

 

 

9

 

      Net benefit cost

$

213

 

$

209

 

$

410

 

$

404

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Other Postretirement Benefits

 

 

 

 

 

 

 

 

 

 

 

 

   Components of net benefit cost

 

 

 

 

 

 

 

 

 

 

 

 

      Service cost

$

28

 

$

30

 

$

57

 

$

57

 

      Interest cost

 

129

 

 

98

 

 

237

 

 

210

 

      Expected return on plan assets

 

(22

)

 

(8

)

 

(34

)

 

(23

)

      Amortization of actuarial loss/(gain)

 

 

 

 

 

 

 

 

 

 

 

 

        and prior service cost

 

72

 

 

80

 

 

156

 

 

158

 

      Net benefit cost

$

207

 

$

200

 

$

416

 

$

402

 




-9-



7.

Disclosures about Segments and Related Information



 

Three Months Ended

 

Six Months Ended

 

 

June 30,

 

June 30,

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

 

 

(millions of dollars)

 

EARNINGS AFTER INCOME TAX

 

 

 

 

 

 

 

 

 

 

 

 

  Upstream

 

 

 

 

 

 

 

 

 

 

 

 

    United States

$

2,034

 

$

1,222

 

$

3,665

 

$

2,399

 

    Non-U.S.

 

7,978

 

 

4,731

 

 

15,132

 

 

9,595

 

  Downstream

 

 

 

 

 

 

 

 

 

 

 

 

    United States

 

293

 

 

1,745

 

 

691

 

 

2,584

 

    Non-U.S.

 

1,265

 

 

1,648

 

 

2,033

 

 

2,721

 

  Chemical

 

 

 

 

 

 

 

 

 

 

 

 

    United States

 

102

 

 

204

 

 

386

 

 

550

 

    Non-U.S.

 

585

 

 

809

 

 

1,329

 

 

1,699

 

  All other

 

(577

)

 

(99

)

 

(666

)

 

(8

)

  Corporate total

$

11,680

 

$

10,260

 

$

22,570

 

$

19,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

SALES AND OTHER OPERATING REVENUE (1)

 

 

 

 

 

 

 

 

 

 

  Upstream

 

 

 

 

 

 

 

 

 

 

 

 

     United States

$

2,010

 

$

1,436

 

$

3,774

 

$

2,798

 

     Non-U.S.

 

8,989

 

 

5,303

 

 

17,388

 

 

10,796

 

  Downstream

 

 

 

 

 

 

 

 

 

 

 

 

     United States

 

36,066

 

 

25,645

 

 

64,524

 

 

46,905

 

     Non-U.S.

 

75,667

 

 

53,472

 

 

140,184

 

 

101,113

 

  Chemical

 

 

 

 

 

 

 

 

 

 

 

 

     United States

 

4,170

 

 

3,460

 

 

7,822

 

 

6,649

 

     Non-U.S.

 

6,870

 

 

5,740

 

 

13,299

 

 

10,964

 

  All other

 

4

 

 

3

 

 

8

 

 

8

 

  Corporate total

$

133,776

 

$

95,059

 

$

246,999

 

$

179,233

 

 

 

 

 

 

 

 

 

 

 

 

 

 

(1) Includes sales-based taxes

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

INTERSEGMENT REVENUE

 

 

 

 

 

 

 

 

 

 

 

 

  Upstream

 

 

 

 

 

 

 

 

 

 

 

 

     United States

$

3,072

 

$

1,780

 

$

5,633

 

$

3,343

 

     Non-U.S.

 

17,260

 

 

11,670

 

 

32,141

 

 

22,265

 

  Downstream

 

 

 

 

 

 

 

 

 

 

 

 

     United States

 

5,241

 

 

3,561

 

 

9,102

 

 

6,343

 

     Non-U.S.

 

21,406

 

 

12,885

 

 

37,949

 

 

23,826

 

  Chemical

 

 

 

 

 

 

 

 

 

 

 

 

     United States

 

3,177

 

 

2,217

 

 

5,605

 

 

3,914

 

     Non-U.S.

 

2,670

 

 

2,166

 

 

5,102

 

 

3,688

 

  All other

 

71

 

 

90

 

 

138

 

 

169

 



8.

Unrecognized Tax Benefits


It is reasonably possible that settlements will be reached with tax jurisdictions within the next twelve months on various issues that could result in a 15 to 20 percent reduction of the $5.2 billion year-end 2007 balance of unrecognized tax benefits.  This reduction in unrecognized tax benefits would not have a material effect on the Corporation's earnings or effective income tax rate.




-10-



9.

Condensed Consolidating Financial Information Related to Guaranteed Securities Issued by Subsidiaries


Exxon Mobil Corporation has fully and unconditionally guaranteed the deferred interest debentures due 2012 ($1,826 million long-term at June 30, 2008) and the debt securities due 2008-2011 ($39 million long-term and $13 million short-term) of SeaRiver Maritime Financial Holdings, Inc., a 100 percent owned subsidiary of Exxon Mobil Corporation.


The following condensed consolidating financial information is provided for Exxon Mobil Corporation, as guarantor, and for SeaRiver Maritime Financial Holdings, Inc., as issuer, as an alternative to providing separate financial statements for the issuer.  The accounts of Exxon Mobil 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

 

Financial

 

 

 

and

 

 

 

 

Parent

 

Holdings

 

All Other

 

Eliminating

 

 

 

 

Guarantor

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 

 

(millions of dollars)

 

 

Condensed consolidated statement of income for three months ended June 30, 2008

Revenues and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue,

including sales-based taxes


$


5,214

 


$


-

 


$


128,562

 


$


-

 


$


133,776

 

Income from equity affiliates

 

11,765

 

 

(3

)

 

2,977

 

 

(11,756

)

 

2,983

 

Other income

 

100

 

 

-

 

 

1,213

 

 

-

 

 

1,313

 

Intercompany revenue

 

15,052

 

 

11

 

 

132,434

 

 

(147,497

)

 

-

 

Total revenues and other income

 

32,131

 

 

8

 

 

265,186

 

 

(159,253

)

 

138,072

 

Costs and other deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

15,519

 

 

-

 

 

203,434

 

 

(142,258

)

 

76,695

 

Production and manufacturing

expenses

 


2,293

 

 


-

 

 


9,210

 

 


(1,437


)

 


10,066

 

 

Selling, general and administrative

expenses

 


1,194

 

 


-

 

 


3,401

 

 


(206


)

 


4,389

 

Depreciation and depletion

 

379

 

 

-

 

 

2,711

 

 

-

 

 

3,090

 

Exploration expenses, including dry

holes

 


67

 

 


-

 

 


271

 

 


-

 

 


338

 

Interest expense

 

739

 

 

52

 

 

3,019

 

 

(3,703

)

 

107

 

Sales-based taxes

 

-

 

 

-

 

 

9,538

 

 

-

 

 

9,538

 

Other taxes and duties

 

16

 

 

-

 

 

11,402

 

 

-

 

 

11,418

 

Income applicable to minority interests

 

-

 

 

-

 

 

225

 

 

-

 

 

225

 

Total costs and other deductions

 

20,207

 

 

52

 

 

243,211

 

 

(147,604

)

 

115,866

 

Income before income taxes

 

11,924

 

 

(44

)

 

21,975

 

 

(11,649

)

 

22,206

 

Income taxes

 

244

 

 

(15

)

 

10,297

 

 

-

 

 

10,526

 

Net income

$

11,680

 

$

(29

)

$

11,678

 

$

(11,649

)

$

11,680

 




-11-



 

 

 

SeaRiver

 

 

 

 

 

 

 

 

Exxon Mobil

 

Maritime

 

 

 

Consolidating

 

 

 

 

Corporation

 

Financial

 

 

 

and

 

 

 

 

Parent

 

Holdings

 

All Other

 

Eliminating

 

 

 

 

Guarantor

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 

 

(millions of dollars)

 

 

Condensed consolidated statement of income for three months ended June 30, 2007

Revenues and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue,

including sales-based taxes


$


4,142

 


$


-

 


$


90,917

 


$


-

 


$


95,059

 

Income from equity affiliates

 

10,151

 

 

(1

)

 

1,999

 

 

(10,134

)

 

2,015

 

Other income

 

60

 

 

-

 

 

1,216

 

 

-

 

 

1,276

 

Intercompany revenue

 

9,467

 

 

25

 

 

85,939

 

 

(95,431

)

 

-

 

Total revenues and other income

 

23,820

 

 

24

 

 

180,071

 

 

(105,565

)

 

98,350

 

Costs and other deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

8,619

 

 

-

 

 

127,760

 

 

(88,752

)

 

47,627

 

Production and manufacturing

expenses

 


1,833

 

 


-

 

 


7,155

 

 


(1,310


)

 


7,678

 

 

Selling, general and administrative

expenses

 


681

 

 


-

 

 


3,311

 

 


(204


)

 


3,788

 

Depreciation and depletion

 

397

 

 

-

 

 

2,597

 

 

-

 

 

2,994

 

Exploration expenses, including dry

holes

 


42

 

 


-

 

 


311

 

 


-

 

 


353

 

Interest expense

 

1,570

 

 

51

 

 

3,844

 

 

(5,369

)

 

96

 

Sales-based taxes

 

-

 

 

-

 

 

7,810

 

 

-

 

 

7,810

 

Other taxes and duties

 

11

 

 

-

 

 

9,877

 

 

-

 

 

9,888

 

Income applicable to minority interests

 

-

 

 

-

 

 

188

 

 

-

 

 

188

 

Total costs and other deductions

 

13,153

 

 

51

 

 

162,853

 

 

(95,635

)

 

80,422

 

Income before income taxes

 

10,667

 

 

(27

)

 

17,218

 

 

(9,930

)

 

17,928

 

Income taxes

 

407

 

 

(9

)

 

7,270

 

 

-

 

 

7,668

 

Net income

$

10,260

 

$

(18

)

$

9,948

 

$

(9,930

)

$

10,260

 


Condensed consolidated statement of income for six months ended June 30, 2008

Revenues and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue,

including sales-based taxes


$


9,729

 


$


-

 


$


237,270

 


$


-

 


$


246,999

 

Income from equity affiliates

 

22,833

 

 

(2

)

 

5,775

 

 

(22,814

)

 

5,792

 

Other income

 

125

 

 

-

 

 

2,010

 

 

-

 

 

2,135

 

Intercompany revenue

 

26,652

 

 

28

 

 

245,034

 

 

(271,714

)

 

-

 

Total revenues and other income

 

59,339

 

 

26

 

 

490,089

 

 

(294,528

)

 

254,926

 

Costs and other deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

27,369

 

 

-

 

 

370,676

 

 

(260,379

)

 

137,666

 

Production and manufacturing

expenses

 


4,204

 

 


-

 

 


17,539

 

 


(2,784


)

 

18,959

 

 

Selling, general and administrative

expenses

 


1,896

 

 


-

 

 


6,714

 

 


(419


)

 

8,191

 

Depreciation and depletion

 

772

 

 

-

 

 

5,422

 

 

-

 

 

6,194

 

Exploration expenses, including dry

holes

 

146

 

 


-

 

 

534

 

 


-

 

 

680

 

Interest expense

 

1,933

 

 

105

 

 

6,529

 

 

(8,330

)

 

237

 

Sales-based taxes

 

-

 

 

-

 

 

17,970

 

 

-

 

 

17,970

 

Other taxes and duties

 

31

 

 

-

 

 

22,093

 

 

-

 

 

22,124

 

Income applicable to minority interests

 

-

 

 

-

 

 

507

 

 

-

 

 

507

 

Total costs and other deductions

 

36,351

 

 

105

 

 

447,984

 

 

(271,912

)

 

212,528

 

Income before income taxes

 

22,988

 

 

(79

)

 

42,105

 

 

(22,616

)

 

42,398

 

Income taxes

 

418

 

 

(27

)

 

19,437

 

 

-

 

 

19,828

 

Net income

$

22,570

 

$

(52

)

$

22,668

 

$

(22,616

)

$

22,570

 




-12-



 

 

 

SeaRiver

 

 

 

 

 

 

 

 

Exxon Mobil

 

Maritime

 

 

 

Consolidating

 

 

 

 

Corporation

 

Financial

 

 

 

and

 

 

 

 

Parent

 

Holdings

 

All Other

 

Eliminating

 

 

 

 

Guarantor

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 

 

(millions of dollars)

 

 

Condensed consolidated statement of income for six months ended June 30, 2007

Revenues and other income

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Sales and other operating revenue,

including sales-based taxes


$


7,999

 


$


-

 


$


171,234

 


$


-

 


$


179,233

 

Income from equity affiliates

 

19,318

 

 

6

 

 

3,903

 

 

(19,297

)

 

3,930

 

Other income

 

282

 

 

-

 

 

2,128

 

 

-

 

 

2,410

 

Intercompany revenue

 

17,748

 

 

51

 

 

163,828

 

 

(181,627

)

 

-

 

Total revenues and other income

 

45,347

 

 

57

 

 

341,093

 

 

(200,924

)

 

185,573

 

Costs and other deductions

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Crude oil and product purchases

 

16,499

 

 

-

 

 

240,006

 

 

(168,836

)

 

87,669

 

Production and manufacturing

expenses

 


3,547

 

 


-

 

 


13,947

 

 


(2,533


)

 


14,961

 

 

Selling, general and administrative

expenses

 


1,272

 

 


-

 

 


6,297

 

 


(389


)

 


7,180

 

Depreciation and depletion

 

785

 

 

-

 

 

5,151

 

 

-

 

 

5,936

 

Exploration expenses, including dry

holes

 


142

 

 


-

 

 


483

 

 


-

 

 


625

 

Interest expense

 

3,016

 

 

101

 

 

7,332

 

 

(10,250

)

 

199

 

Sales-based taxes

 

-

 

 

-

 

 

15,094

 

 

-

 

 

15,094

 

Other taxes and duties

 

24

 

 

-

 

 

19,455

 

 

-

 

 

19,479

 

Income applicable to minority interests

 

-

 

 

-

 

 

438

 

 

-

 

 

438

 

Total costs and other deductions

 

25,285

 

 

101

 

 

308,203

 

 

(182,008

)

 

151,581

 

Income before income taxes

 

20,062

 

 

(44

)

 

32,890

 

 

(18,916

)

 

33,992

 

Income taxes

 

522

 

 

(17

)

 

13,947

 

 

-

 

 

14,452

 

Net income

$

19,540

 

$

(27

)

$

18,943

 

$

(18,916

)

$

19,540

 




-13-



 

 

 

SeaRiver

 

 

 

 

 

 

 

 

Exxon Mobil

 

Maritime

 

 

 

Consolidating

 

 

 

 

Corporation

 

Financial

 

 

 

and

 

 

 

 

Parent

 

Holdings

 

All Other

 

Eliminating

 

 

 

 

Guarantor

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 

 

(millions of dollars)

 

Condensed consolidated balance sheet as of June 30, 2008

 

Cash and cash equivalents

$

115

 

$

-

 

$

38,853

 

$

-

 

$

38,968

 

Marketable securities

 

-

 

 

-

 

 

732

 

 

-

 

 

732

 

Notes and accounts receivable - net

 

5,484

 

 

16

 

 

39,279

 

 

(2,959

)

 

41,820

 

Inventories

 

1,429

 

 

-

 

 

14,432

 

 

-

 

 

15,861

 

Prepaid taxes and expenses

 

506

 

 

-

 

 

6,095

 

 

-

 

 

6,601

 

      Total current assets

 

7,534

 

 

16

 

 

99,391

 

 

(2,959

)

 

103,982

 

Property, plant and equipment - net

 

16,350

 

 

-

 

 

108,575

 

 

-

 

 

124,925

 

Investments and other assets

 

210,047

 

 

471

 

 

430,995

 

 

(603,662

)

 

37,851

 

Intercompany receivables

 

16,876

 

 

2,023

 

 

465,530

 

 

(484,429

)

 

-

 

      Total assets

$

250,807

 

$

2,510

 

$

1,104,491

 

$

(1,091,050

)

$

266,758

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes and loan payables

$

150

 

$

13

 

$

2,147

 

$

-

 

$

2,310

 

Accounts payable and accrued liabilities

 

3,939

 

 

-

 

 

56,323

 

 

-

 

 

60,262

 

Income taxes payable

 

-

 

 

-

 

 

17,620

 

 

(2,959

)

 

14,661

 

      Total current liabilities

 

4,089

 

 

13

 

 

76,090

 

 

(2,959

)

 

77,233

 

Long-term debt

 

275

 

 

1,865

 

 

5,187

 

 

-

 

 

7,327

 

Deferred income tax liabilities

 

1,643

 

 

199

 

 

22,457

 

 

-

 

 

24,299

 

Other long-term liabilities

 

11,704

 

 

-

 

 

21,369

 

 

-

 

 

33,073

 

Intercompany payables

 

108,270

 

 

383

 

 

375,776

 

 

(484,429

)

 

-

 

      Total liabilities

 

125,981

 

 

2,460

 

 

500,879

 

 

(487,388

)

 

141,932

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings reinvested

 

247,111

 

 

(519

)

 

114,253

 

 

(113,734

)

 

247,111

 

Other shareholders' equity

 

(122,285

)

 

569

 

 

489,359

 

 

(489,928

)

 

(122,285

)

      Total shareholders' equity

 

124,826

 

 

50

 

 

603,612

 

 

(603,662

)

 

124,826

 

      Total liabilities and

        shareholders' equity


$


250,807

 


$


2,510

 


$


1,104,491

 


$


(1,091,050


)


$


266,758

 



Condensed consolidated balance sheet as of December 31, 2007

 

Cash and cash equivalents

$

1,393

 

$

-

 

$

32,588

 

$

-

 

$

33,981

 

Marketable securities

 

-

 

 

-

 

 

519

 

 

-

 

 

519

 

Notes and accounts receivable - net

 

3,733

 

 

2

 

 

34,338

 

 

(1,623

)

 

36,450

 

Inventories

 

1,198

 

 

-

 

 

9,891

 

 

-

 

 

11,089

 

Prepaid taxes and expenses

 

373

 

 

-

 

 

3,551

 

 

-

 

 

3,924

 

      Total current assets

 

6,697

 

 

2

 

 

80,887

 

 

(1,623

)

 

85,963

 

Property, plant and equipment - net

 

16,291

 

 

-

 

 

104,578

 

 

-

 

 

120,869

 

Investments and other assets

 

208,283

 

 

413

 

 

427,046

 

 

(600,492

)

 

35,250

 

Intercompany receivables

 

14,577

 

 

1,961

 

 

437,433

 

 

(453,971

)

 

-

 

      Total assets

$

245,848

 

$

2,376

 

$

1,049,944

 

$

(1,056,086

)

$

242,082

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Notes and loan payables

$

3

 

$

13

 

$

2,367

 

$

-

 

$

2,383

 

Accounts payable and accrued liabilities

 

3,038

 

 

1

 

 

42,236

 

 

-

 

 

45,275

 

Income taxes payable

 

-

 

 

-

 

 

12,277

 

 

(1,623

)

 

10,654

 

      Total current liabilities

 

3,041

 

 

14

 

 

56,880

 

 

(1,623

)

 

58,312

 

Long-term debt

 

276

 

 

1,766

 

 

5,141

 

 

-

 

 

7,183

 

Deferred income tax liabilities

 

1,829

 

 

212

 

 

20,858

 

 

-

 

 

22,899

 

Other long-term liabilities

 

11,308

 

 

-

 

 

20,618

 

 

-

 

 

31,926

 

Intercompany payables

 

107,632

 

 

382

 

 

345,957

 

 

(453,971

)

 

-

 

      Total liabilities

 

124,086

 

 

2,374

 

 

449,454

 

 

(455,594

)

 

120,320

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Earnings reinvested

 

228,518

 

 

(467

)

 

114,037

 

 

(113,570

)

 

228,518

 

Other shareholders' equity

 

(106,756

)

 

469

 

 

486,453

 

 

(486,922

)

 

(106,756

)

      Total shareholders' equity

 

121,762

 

 

2

 

 

600,490

 

 

(600,492

)

 

121,762

 

      Total liabilities and

        shareholders' equity


$


245,848

 


$


2,376

 


$


1,049,944

 


$


(1,056,086


)


$


242,082

 


-14-



 

 

 

SeaRiver

 

 

 

 

 

 

 

 

Exxon Mobil

 

Maritime

 

 

 

Consolidating

 

 

 

 

Corporation

 

Financial

 

 

 

and

 

 

 

 

Parent

 

Holdings

 

All Other

 

Eliminating

 

 

 

 

Guarantor

 

Inc.

 

Subsidiaries

 

Adjustments

 

Consolidated

 

 

(millions of dollars)

 

Condensed consolidated statement of cash flows for six months ended June 30, 2008

 

Cash provided by/(used in) operating

activities


$


22,935

 


$


21

 


$


34,334

 


$


(22,452


)


$


34,838

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and

equipment

 


(835


)

 


-

 

 


(8,016


)

 


-

 

 


(8,851


)

Sales of long-term assets

 

98

 

 

-

 

 

1,474

 

 

-

 

 

1,572

 

Net intercompany investing

 

(2,008

)

 

(122

)

 

1,961

 

 

169

 

 

-

 

All other investing, net

 

-

 

 

-

 

 

(1,489

)

 

-

 

 

(1,489

)

Net cash provided by/(used in)

investing activities

 


(2,745


)

 


(122


)

 


(6,070


)

 


169


 


(8,768


)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to long-term debt

 

-

 

 

-

 

 

36

 

 

-

 

 

36

 

Reductions in long-term debt

 

-

 

 

-

 

 

(53

)

 

-

 

 

(53

)

Additions/(reductions) in short-term

debt - net

 


147


 


-

 

 


(362


)

 


-

 

 


(215


)

Cash dividends

 

(3,977

)

 

-

 

 

(22,452

)

 

22,452

 

 

(3,977

)

Net ExxonMobil shares sold/(acquired)

 

(17,788

)

 

-

 

 

-

 

 

-

 

 

(17,788

)

Net intercompany financing activity

 

-

 

 

1

 

 

68

 

 

(69

)

 

-

 

All other financing, net

 

150

 

 

100

 

 

(357

)

 

(100

)

 

(207

)

Net cash provided by/(used in)

financing activities

 


(21,468


)

 


101

 

 


(23,120


)

 


22,283

 

 


(22,204


)

Effects of exchange rate changes

on cash

 


-

 

 


-

 

 


1,121


 


-

 

 


1,121


Increase/(decrease) in cash and cash

equivalents


$


(1,278


)


$


-

 


$


6,265

 


$


-

 


$


4,987

 



Condensed consolidated statement of cash flows for six months ended June 30, 2007

 

Cash provided by/(used in) operating

activities


$


1,135

 


$


39

 


$


24,879

 


$


(449


)


$


25,604

 

Cash flows from investing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to property, plant and

equipment

 


(622


)

 


-

 

 


(6,270


)

 


-

 

 


(6,892


)

Sales of long-term assets

 

156

 

 

-

 

 

1,517

 

 

-

 

 

1,673

 

Net intercompany investing

 

18,178

 

 

(35

)

 

(18,189

)

 

46

 

 

-

 

All other investing, net

 

-

 

 

-

 

 

(1,104

)

 

-

 

 

(1,104

)

Net cash provided by/(used in)

investing activities

 


17,712

 

 


(35


)

 


(24,046


)

 


46

 

 


(6,323


)

Cash flows from financing activities

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Additions to long-term debt

 

-

 

 

-

 

 

99

 

 

-

 

 

99

 

Reductions in long-term debt

 

-

 

 

-

 

 

(75

)

 

-

 

 

(75

)

Additions/(reductions) in short-term

debt - net

 


40


 


-

 

 


206


 


-

 

 


246


Cash dividends

 

(3,786

)

 

-

 

 

(449

)

 

449

 

 

(3,786

)

Net ExxonMobil shares sold/(acquired)

 

(15,421

)

 

-

 

 

-

 

 

-

 

 

(15,421

)

Net intercompany financing activity

 

-

 

 

(4

)

 

50

 

 

(46

)

 

-

 

All other financing, net

 

237

 

 

-

 

 

(461

)

 

-

 

 

(224

)

Net cash provided by/(used in)

financing activities

 


(18,930


)

 


(4


)

 


(630


)

 


403

 

 


(19,161


)

Effects of exchange rate changes

on cash

 


-

 

 


-

 

 


595

 

 


-

 

 


595


Increase/(decrease) in cash and cash

equivalents


$


(83


)


$


-

 


$


798

 


$


-

 


$


715

 


-15-


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

 

Net Income (U.S. GAAP)

 

2008

 

 

2007

 

 

2008

 

 

2007

 

 

(millions of dollars)

 

Upstream

 

 

 

 

 

 

 

 

 

 

 

 

   United States

$

2,034

 

$

1,222

 

$

3,665

 

$

2,399

 

   Non-U.S.

 

7,978

 

 

4,731

 

 

15,132

 

 

9,595

 

Downstream

 

 

 

 

 

 

 

 

 

 

 

 

   United States

 

293

 

 

1,745

 

 

691

 

 

2,584

 

   Non-U.S.

 

1,265

 

 

1,648

 

 

2,033

 

 

2,721

 

Chemical

 

 

 

 

 

 

 

 

 

 

 

 

   United States

 

102

 

 

204

 

 

386

 

 

550

 

   Non-U.S.

 

585

 

 

809

 

 

1,329

 

 

1,699

 

Corporate and financing

 

(577

)

 

(99

)

 

(666

)

 

(8

)

Net Income (U.S. GAAP)

$

11,680

 

$

10,260

 

$

22,570

 

$

19,540

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Net income per common share (dollars)

$

2.25

 

$

1.85

 

$

4.30

 

$

3.49

 

Net income per common share

 

 

 

 

 

 

 

 

 

 

 

 

   - assuming dilution (dollars)

$

2.22

 

$

1.83

 

$

4.25

 

$

3.45

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items included in net income

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and financing

 

 

 

 

 

 

 

 

 

 

 

 

   Valdez litigation

$

(290

)

$

0

 

$

(290

)

$

0

 


REVIEW OF SECOND QUARTER AND FIRST SIX MONTHS 2008 RESULTS


ExxonMobil's reported second quarter net income was a record $11,680 million, up 14 percent from the second quarter of 2007.  Net income included an after tax special charge of $290 million reflecting the $508 million maximum punitive damages set by the recent Supreme Court ruling in the Valdez litigation.  Record crude oil and natural gas realizations were partly offset by lower refining and chemical margins, lower production volumes and higher operating costs.  Earnings per share of $2.22 were up 21 percent reflecting the strong earnings and the impact of the continuing share purchase program.


__________________________________________________________


Net income for the first six months of 2008 of $22,570 million was a record and increased $3,030 million or 16 percent from 2007 reflecting higher crude oil and natural gas realizations.  Earnings per share increased 23 percent to $4.25, reflecting strong business results and the continued reduction in the number of shares outstanding.



 

Second Quarter

 

First Six Months

 

 

2008

 

2007

 

2008

 

2007

 

 

(millions of dollars)

 

Upstream earnings

 

 

 

 

 

 

 

 

 

 

 

 

   United States

$

2,034

 

$

1,222

 

$

3,665

 

$

2,399

 

   Non-U.S.

 

7,978

 

 

4,731

 

 

15,132

 

 

9,595

 

Total

$

10,012

 

$

5,953

 

$

18,797

 

$

11,994

 


Upstream earnings in the second quarter of 2008 were $10,012 million, up $4,059 million from the second quarter of 2007.  Record crude oil and natural gas realizations increased earnings approximately $6.1 billion.  Lower sales volumes decreased earnings about $1.7 billion.  Higher operating costs and increased taxes also reduced earnings.


On an oil-equivalent basis, production decreased 8 percent from the second quarter of 2007.  Excluding impacts related to the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes (including price and spend impacts and PSC net interest reductions), production was down about 3 percent.



-16-


Liquids production totaled 2,393 kbd (thousands of barrels per day), down 275 kbd from the second quarter of 2007.  Excluding the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes, liquids production was down just over 2 percent, as increased production from projects in west Africa and the North Sea was more than offset by mature field decline and higher maintenance activity.


Second quarter natural gas production was 8,448 mcfd (millions of cubic feet per day), down 285 mcfd from 2007.   Higher European demand and new production volumes from project additions in the North Sea were more than offset by mature field decline and increased maintenance activity.


Earnings from U.S. Upstream operations were $2,034 million, $812 million higher than the second quarter of 2007.  Non-U.S. Upstream earnings were $7,978 million, up $3,247 million from last year.


__________________________________________________________


Upstream earnings for the first six months of 2008 were a record $18,797 million, up $6,803 million from 2007. Record high crude oil and natural gas realizations increased earnings approximately $10.5 billion.  Lower sales volumes reduced earnings about $2.5 billion.  Higher taxes, increased operating costs and lower gains on asset sales decreased earnings approximately $1.2 billion.


On an oil-equivalent basis, production decreased 7 percent from last year.  Excluding impacts related to the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes, production was down 2 percent.


Liquids production of 2,431 kbd decreased 276 kbd from 2007.  Excluding the Venezuela expropriation, the Nigeria labor strike and lower entitlement volumes, liquids production was down 3 percent as field decline in mature areas more than offset project volume increases.


Natural gas production of 9,333 mcfd decreased 86 mcfd from 2007.  Higher volumes from North Sea and Qatar projects and higher European demand were more than offset by mature field decline.    


Earnings from U.S. Upstream operations for 2008 were $3,665 million, an increase of $1,266 million.  Earnings outside the U.S. were $15,132 million, $5,537 million higher than 2007.




 

Second Quarter

 

First Six Months

 

 

2008

 

2007

 

2008

 

2007

 

 

(millions of dollars)

 

Downstream earnings

 

 

 

 

 

 

 

 

 

 

 

 

   United States

$

293

 

$

1,745

 

$

691

 

$

2,584

 

   Non-U.S.

 

1,265

 

 

1,648

 

 

2,033

 

 

2,721

 

Total

$

1,558

 

$

3,393

 

$

2,724

 

$

5,305

 


Downstream earnings in the second quarter of 2008 of $1,558 million were down $1,835 million from the second quarter of 2007 as lower margins reduced earnings by $1.9 billion, driven by significantly lower worldwide refining margins.  Petroleum product sales of 6,775 kbd were 199 kbd lower than last year's second quarter, mainly reflecting asset sales and lower demand.


U.S. Downstream earnings were $293 million, down $1,452 million from the second quarter of 2007.  Non-U.S. Downstream earnings of $1,265 million were $383 million lower.


__________________________________________________________


Downstream earnings in the first six months of 2008 of $2,724 million were $2,581 million lower than 2007.  Lower worldwide refining and marketing margins decreased earnings approximately $2.9 billion while higher operating costs reduced earnings about $300 million.  Improved refinery operations increased earnings about $600 million.  Petroleum product sales of 6,798 kbd decreased from 7,085 kbd in 2007, mainly reflecting asset sales.


U.S. Downstream earnings were $691 million, down $1,893 million.  Non-U.S. Downstream earnings were $2,033 million, $688 million lower than last year.


-17-



 

Second Quarter

 

First Six Months

 

 

2008

 

2007

 

2008

 

2007

 

 

(millions of dollars)

 

Chemical earnings

 

 

 

 

 

 

 

 

 

 

 

 

   United States

$

102

 

$

204

 

$

386

 

$

550

 

   Non-U.S.

 

585

 

 

809

 

 

1,329

 

 

1,699

 

Total

$

687

 

$

1,013

 

$

1,715

 

$

2,249

 


Chemical earnings in the second quarter of 2008 of $687 million were $326 million lower than the second quarter of 2007.  Lower margins, which reduced earnings approximately $500 million, were partly offset by favorable foreign exchange and tax effects.  Prime product sales of 6,718 kt (thousands of metric tons) in the second quarter of 2008 were 179 kt lower than the prior year.


__________________________________________________________


Chemical earnings in the first six months of 2008 of $1,715 million decreased $534 million from 2007.  Lower margins, which decreased earnings approximately $800 million, were partly offset by favorable foreign exchange and tax effects.  Prime product sales of 13,296 kt were down 406 kt from 2007.



 

Second Quarter

 

First Six Months

 

 

2008

 

2007

 

2008

 

2007

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and financing earnings

$

(577

)

$

(99

)

$

(666

)

$

(8

)

 

 

 

 

 

 

 

 

 

 

 

 

 

Special items included in net income

 

 

 

 

 

 

 

 

 

 

 

 

Corporate and financing

 

 

 

 

 

 

 

 

 

 

 

 

   Valdez litigation

$

(290

)

$

0

 

$

(290

)

$

0

 


Corporate and financing expenses in the second quarter of 2008 of $577 million increased from 2007 by $188 million mainly due to tax items and lower interest income and included $290 million for the Valdez litigation charge.


__________________________________________________________


Corporate and financing expenses in the first six months of 2008 of $666 million increased by $368 million mainly due to lower interest income, higher corporate costs and tax items and included $290 million for the Valdez litigation charge.




-18-



LIQUIDITY AND CAPITAL RESOURCES


 

Second Quarter

 

First Six Months

 

 

 

2008

 

 

2007

 

 

2008

 

 

2007

 

 

(millions of dollars)

 

Net cash provided by/(used in)

 

 

 

 

 

 

 

 

 

 

 

 

Operating activities

 

 

 

 

 

 

$

34,838

 

$

25,604

 

Investing activities

 

 

 

 

 

 

 

(8,768

)

 

(6,323

)

Financing activities

 

 

 

 

 

 

 

(22,204

)

 

(19,161

)

Effect of exchange rate changes

 

 

 

 

 

 

 

1,121

 

 

595

 

Increase/(decrease) in cash and cash equivalents

 

 

 

 

 

 

$

4,987

 

$

715

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash and cash equivalents

 

 

 

 

 

 

$

38,968

 

$

28,959

 

Cash and cash equivalents - restricted

 

 

 

 

 

 

 

0

 

 

4,604

 

Total cash and cash equivalents (at end of period)

 

 

 

 

 

 

$

38,968

 

$

33,563

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Cash flow from operations and asset sales

 

 

 

 

 

 

 

 

 

 

 

 

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

$

13,418

 

$

11,318

 

$

34,838

 

$

25,604

 

Sales of subsidiaries, investments and property,

 

 

 

 

 

 

 

 

 

 

 

 

    plant and equipment

 

1,159

 

 

1,135

 

 

1,572

 

 

1,673

 

Cash flow from operations and asset sales

$

14,577

 

$

12,453

 

$

36,410

 

$

27,277

 


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 of $39.0 billion at the end of the second quarter of 2008 compared to $33.6 billion, including the $4.6 billion of restricted cash, at the end of the second quarter of 2007.


Cash provided by operating activities totaled $34,838 million for the first six months of 2008, $9,234 million higher than 2007.  The major source of funds was net income of $22,570 million, adjusted for the noncash provision of $6,194 million for depreciation and depletion, both of which increased.  The effects of higher prices and the timing of payments of accounts and other payables, of collection of accounts receivable and the timing of income taxes payable added to cash provided by operating activities.  For additional details, see the Condensed Consolidated Statement of Cash Flows on page 5.


Investing activities for the first six months of 2008 used net cash of $8,768 million compared to $6,323 million in the prior year.  Spending for additions to property, plant and equipment increased $1,959 million to $8,851 million.  Proceeds from asset divestments of $1,572 million in 2008 were similar to the prior year.


Cash flow from operations and asset sales in the second quarter of 2008 of $14.6 billion, including asset sales of $1.2 billion, was $2.1 billion higher than in the second quarter of 2007.  Cash flow from operations and asset sales for the first six months of 2008 of $36.4 billion, including $1.6 billion from asset sales, was $9.1 billion higher than in the comparable 2007 period.


Net cash used in financing activities of $22,204 million in the first six months of 2008 increased $3,043 million, reflecting a higher level of purchases of shares of ExxonMobil stock.


During the second quarter of 2008, Exxon Mobil Corporation purchased 98 million shares of its common stock for the treasury at a gross cost of $8.8 billion.  These purchases included $8.0 billion to reduce the number of shares outstanding, with the balance used to offset shares issued in conjunction with the company's benefit plans and programs.  Shares outstanding were reduced 1.7 percent from 5,284 million at the end of the first quarter to 5,194 million at the end of the second quarter.


Gross share purchases in the first six months of 2008 were $18.2 billion, reducing shares outstanding by 3.5 percent.  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.


-19-


The Corporation distributed a total of $10.1 billion to shareholders in the second quarter of 2008 through dividends of $2.1 billion and share purchases to reduce shares outstanding of $8.0 billion, an increase of 12 percent or $1.1 billion versus the second quarter of 2007.  The Corporation distributed a total of $20.0 billion to shareholders in the first six months of 2008 through dividends and share purchases to reduce shares outstanding, an increase of $2.2 billion versus 2007.  Year to date dividends per share of $0.75 increased 12 percent.


Total debt of $9.6 billion at June 30, 2008, was the same as at year-end 2007.  The Corporation's debt to total capital ratio was 6.9 percent at the end of the second quarter of 2008 compared to 7.1 percent at year-end 2007.


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.


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


To date, discussions with Venezuelan authorities have not resulted in an agreement on the amount of compensation to be paid to ExxonMobil. On September 6, 2007, ExxonMobil filed a Request for Arbitration with the International Centre for Settlement of Investment Disputes. ExxonMobil has also filed an arbitration under the rules of the International Chamber of Commerce against PdVSA and a PdVSA affiliate for breach of their contractual obligations under certain Cerro Negro Project agreements. At this time, the net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. However, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition. ExxonMobil’s remaining net book investment in Cerro Negro producing assets is about $750 million.


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.


On July 1, 2008, affiliates of Exxon Mobil Corporation completed the sale of their interests in the natural gas transport business in northern Germany.  This transaction does not affect the exploration, production and natural gas sale and storage activities conducted by ExxonMobil affiliates in Germany.  The positive after-tax earnings of this transaction of approximately $1.6 billion will be reported in third quarter 2008 results.



TAXES

 

Second Quarter

 

First Six Months

 

 

2008

 

2007

 

2008

 

2007

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Income taxes

$

10,526

 

$

7,668

 

$

19,828

 

$

14,452

 

Sales-based taxes

 

9,538

 

 

7,810

 

 

17,970

 

 

15,094

 

All other taxes and duties

 

12,297

 

 

10,665

 

 

23,904

 

 

21,073

 

Total

$

32,361

 

$

26,143

 

$

61,702

 

$

50,619

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Effective income tax rate

 

49

%

 

44

%

 

49

%

 

44

%


Income, sales-based and all other taxes and duties for the second quarter of 2008 of $32,361 million were higher than 2007.  In the second quarter of 2008 income tax expense increased to $10,526 million and the effective income tax rate was 49 percent, compared to $7,668 million and 44 percent, respectively, in the prior year period.  The change in the effective income tax rate reflects an increased share of total income from the non-U.S. Upstream segment.  Sales-based taxes and all other taxes and duties increased in 2008 reflecting higher prices and foreign exchange.


-20-



Income, sales-based and all other taxes and duties for the first six months of 2008 of $61,702 million were higher than 2007.  In the first six months of 2008, income tax expense increased to $19,828 million and the effective income tax rate was 49 percent, compared to $14,452 million and 44 percent, respectively, in the prior year period.  The change in the effective income tax rate reflects an increased share of total income from the non-U.S. Upstream segment.  Sales-based taxes and all other taxes and duties increased in 2008 reflecting higher prices and foreign exchange.



CAPITAL AND EXPLORATION EXPENDITURES

 

Second Quarter

 

First Six Months

 

 

2008

 

2007

 

2008

 

2007

 

 

(millions of dollars)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Upstream (including exploration expenses)

$

5,257

 

$

3,866

 

$

9,352

 

$

7,335

 

Downstream

 

904

 

 

874

 

 

1,731

 

 

1,405

 

Chemical

 

797

 

 

276

 

 

1,363

 

 

495

 

Other

 

12

 

 

23

 

 

15

 

 

26

 

Total

$

6,970

 

$

5,039

 

$

12,461

 

$

9,261

 


In the second quarter of 2008, ExxonMobil increased investments across all business lines to help meet global demand for crude oil, natural gas and finished products.  Capital and exploration expenditures increased to $7.0 billion, up 38 percent from the second quarter of 2007.


__________________________________________________________


Capital and exploration expenditures for the first six months of 2008 were $12.5 billion, an increase of 35 percent versus 2007.


Capital and exploration expenditures for full year 2007 were $20.9 billion and are expected to range from $25 billion to $30 billion for the next several years.  Actual spending could vary depending on the progress of individual projects.



RECENTLY ISSUED STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS


In December 2007, the FASB issued Statement No. 160 (FAS 160), “Noncontrolling Interests in Consolidated Financial Statements – an Amendment of ARB No. 51.”  FAS 160 changes the accounting and reporting for minority interests, which will be recharacterized as noncontrolling interests and classified as a component of equity.  FAS 160 must be adopted by the Corporation no later than January 1, 2009.  FAS 160 requires retrospective adoption of the presentation and disclosure requirements for existing minority interests.  All other requirements of FAS 160 will be applied prospectively.  The Corporation does not expect the adoption of FAS 160 to have a material impact on the Corporation’s financial statements.



FORWARD-LOOKING STATEMENTS


Statements in this report relating to future plans, projections, events or conditions are forward-looking statements.  Actual results, including project plans, 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; wars and acts of terrorism or sabotage; changes in technical or operating conditions; and other factors discussed under the heading "Factors Affecting Future Results" on our website and in Item 1A of ExxonMobil's 2007 Form 10-K.  We assume no duty to update these statements as of any future date.  






-21-



Item 3.  Quantitative and Qualitative Disclosures About Market Risk


Information about market risks for the six months ended June 30, 2008, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2007.


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, 2008.  Based on that evaluation, these officers have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms.  There were no changes during the Corporation's last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation's internal control over financial reporting.



PART II.  OTHER INFORMATION


Item 1.  Legal Proceedings


On February 16, 2007, the South Coast Air Quality Management District (AQMD) issued a Notice of Violation (NOV) alleging that a hole in the roof of one of the Torrance Refinery's waste water/recovery oil tanks violated certain AQMD rules and applicable facility permit conditions.  As part of a larger settlement of 10 other AQMD notices of violation on May 13, 2008, the AQMD and ExxonMobil Oil Corporation agreed to resolve the alleged violations in this NOV with a penalty payment of $320,000.  Each of the other ten NOVs had an associated penalty of less than $100,000, resulting in a total penalty amount of $469,500 for settlement of all 11 NOVs.


On May 20, 2008, the Illinois Attorney General and Illinois EPA filed a civil complaint against ExxonMobil Oil Corporation in the Circuit Court of Will County, Illinois, alleging that the Joliet Refinery violated certain air emission regulations and caused petroleum sheens at the facility wharf, in violation of federal and State of Illinois requirements.  The Complaint includes eight counts alleging a total of five water related violations and 12 air related violations.  The air emission events relate to several electrical power outages suffered at the refinery during the period 2005 through 2007.  The Complaint seeks a civil penalty in excess of $100,000.  The Complaint also seeks an Order requiring ExxonMobil to conduct “an independent engineering evaluation of the adequacy of the Refinery’s power system" and to undertake “the necessary corrective action to permanently eliminate source areas” of petroleum contamination in the wharf area.


As previously reported, the Texas Commission on Environmental Quality (TCEQ) issued a Notice of Enforcement and Proposed Agreed Order on November 22, 2006, alleging that the Company's Beaumont Refinery violated provisions of the Texas Health and Safety Code and the Texas Water Code.  The allegations related to permit and reporting requirements applicable to certain of the refinery's aboveground storage tanks.  The TCEQ initially proposed a penalty of $136,200.  The matter has been resolved as of July 10, 2008.  The TCEQ agreed to eliminate throughput and emissions exceedance allegations and added one allegation for late submittal of a Permit by Rule.  ExxonMobil agreed to pay a total of $55,200, with half of that amount to be paid as a penalty and half to be paid to fund a Supplemental Environmental Project for retrofit/replacement of Jefferson County heavy vehicles.  The agreed order is expected to be signed in the next several months.


The U.S. Environmental Protection Agency (EPA) and U.S. Department of Justice (DOJ) have alleged certain violations of Clean Air Act air permitting requirements and air quality rules associated with certain storage tanks and loading racks at ExxonMobil affiliates' Cabras Terminal (Guam) and Saipan Terminal (Saipan).  No formal complaint has been filed in this matter, but the EPA and DOJ have indicated that they will seek corrective action and penalties in excess of $100,000 to resolve the matter.


-22-



On April 14, 2008, ExxonMobil executed a Compliance Order on Consent with the Colorado Department of Public Health and Environment (CDPHE) to resolve an enforcement action relating to excess air emissions events at the Piceance Creek Unit Gas Plant.  The issues were identified during agency inspections and internal reviews in 2006 and 2007.  The Company also self-disclosed an issue associated with emissions that were not reflected in the air permit, but discovered during testing.  As part of the settlement, ExxonMobil agreed to pay a total penalty settlement amount of $738,430 and also agreed to install and operate a thermal oxidizer to control emissions of volatile organic compounds consistent with state and federal air permitting requirements.  The settlement amount consists of two components: i) $285,500 as an administrative penalty, of which $228,400 may be offset via performance of one or more supplemental environmental projects, and ii) $452,930 as an economic benefit penalty.



Refer to the relevant portions of note 3 on pages 6 and 7 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, 2008

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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, 2008

 

33,222,013

 

$91.01

 

33,222,013

 

 

 

 

 

 

 

 

 

 

 

 

 

May, 2008

 

31,689,114

 

$90.64

 

31,689,114

 

 

 

 

 

 

 

 

 

 

 

 

 

June, 2008

 

32,736,859

 

$87.51

 

32,736,859

 

 

 

 

 

 

 

 

 

 

 

 

 

Total

 

97,647,986

 

$89.72

 

97,647,986

 

(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 the Company's 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.  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.




-23-


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


At the annual meeting of shareholders on May 28, 2008, the following proposals were voted upon.  Percentages are based on the total of the shares voted For and either Withheld or voted Against, as appropriate.


             Concerning Election of Directors

 

 

 

 

 

 

 

 

 

 Votes

 

 Votes

             Nominees

 

 Cast For

 

 Withheld

             Michael J. Boskin

 

     4,261,202,105

95.1%

      218,251,360

             Larry R. Faulkner

 

     4,338,082,660

96.8%

      141,370,805

             William W. George

 

     4,357,013,761

97.3%

      122,439,704

             James R. Houghton

 

     4,310,463,918

96.2%

      168,989,547

             Reatha Clark King

 

     4,327,173,349

96.6%

      152,280,116

             Marilyn Carlson Nelson

 

     4,331,867,232

96.7%

      147,586,233

             Samuel J. Palmisano

 

     4,358,570,442

97.3%

      120,883,023

             Steven S Reinemund

 

     4,340,093,996

96.9%

      139,359,469

             Walter V. Shipley

 

     4,353,963,941

97.2%

      125,489,524

             Rex W. Tillerson

 

     4,343,542,327

97.0%

      135,911,138

             Edward E. Whitacre, Jr.

 

     4,358,483,138

97.3%

      120,970,327

 

 

 

 

 

             Concerning Ratification of Independent Auditors

 

 

             Votes Cast For:

 

     4,309,316,861

98.0%

 

             Votes Cast Against:

 

          89,936,431

2.0%

 

             Abstentions:

 

          80,200,173

 

 

             Broker Non-Votes:

 

                          0

 

 

 

 

 

 

 

             Concerning Shareholder Proposals Prohibited

 

 

             Votes Cast For:

 

          94,563,822

2.8%

 

             Votes Cast Against:

 

     3,293,199,805

97.2%

 

             Abstentions:

 

        153,137,758

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

             Concerning Director Nominee Qualifications

 

 

             Votes Cast For:

 

        118,326,019

3.4%

 

             Votes Cast Against:

 

     3,322,211,694

96.6%

 

             Abstentions:

 

        100,363,672

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Board Chairman and CEO

 

 

             Votes Cast For:

 

     1,361,080,211

39.5%

 

             Votes Cast Against:

 

     2,081,307,709

60.5%

 

             Abstentions:

 

          98,513,465

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Shareholder Return Policy

 

 

             Votes Cast For:

 

        162,879,474

4.7%

 

             Votes Cast Against:

 

     3,272,308,929

95.3%

 

             Abstentions:

 

        105,712,982

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Shareholder Advisory Vote on Executive Compensation

             Votes Cast For:

 

     1,361,229,410

40.7%

 

             Votes Cast Against:

 

     1,981,102,514

59.3%

 

             Abstentions:

 

        198,569,461

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

             Concerning Executive Compensation Report

 

 

             Votes Cast For:

 

        368,484,255

10.9%

 

             Votes Cast Against:

 

     3,025,097,742

89.1%

 

             Abstentions:

 

        147,319,388

 

 

             Broker Non-Votes:

 

        938,552,080

 

 


-24-



 

 

 

             Concerning Incentive Pay Recoupment

 

 

             Votes Cast For:

 

        428,405,781

12.5%

 

             Votes Cast Against:

 

     3,010,622,412

87.5%

 

             Abstentions:

 

        101,873,192

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Corporate Sponsorships Report

 

 

             Votes Cast For:

 

        287,651,144

9.7%

 

             Votes Cast Against:

 

     2,688,298,219

90.3%

 

             Abstentions:

 

        564,952,022

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Political Contributions Report

 

 

             Votes Cast For:

 

        843,964,133

27.6%

 

             Votes Cast Against:

 

     2,211,647,378

72.4%

 

             Abstentions:

 

        485,289,874

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Amendment of EEO Policy

 

 

             Votes Cast For:

 

     1,296,428,500

39.6%

 

             Votes Cast Against:

 

     1,975,180,175

60.4%

 

             Abstentions:

 

        269,292,710

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Community Environmental Impact

 

 

             Votes Cast For:

 

        327,559,000

10.8%

 

             Votes Cast Against:

 

     2,700,516,909

89.2%

 

             Abstentions:

 

        512,825,476

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning ANWR Drilling Report

 

 

             Votes Cast For:

 

        252,395,955

8.4%

 

             Votes Cast Against:

 

     2,737,719,520

91.6%

 

             Abstentions:

 

        550,785,910

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Greenhouse Gas Emissions Goals

 

 

             Votes Cast For:

 

        922,633,711

30.9%

 

             Votes Cast Against:

 

     2,066,475,554

69.1%

 

             Abstentions:

 

        551,792,120

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning CO2 Information at the Pump

 

 

             Votes Cast For:

 

        211,432,634

7.0%

 

             Votes Cast Against:

 

     2,819,336,182

93.0%

 

             Abstentions:

 

        510,132,569

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Climate Change and Technology Report

 

 

             Votes Cast For:

 

        314,453,997

10.4%

 

             Votes Cast Against:

 

     2,709,207,016

89.6%

 

             Abstentions:

 

        517,240,372

 

 

             Broker Non-Votes:

 

        938,552,080

 

 

 

 

 

 

 

             Concerning Energy Technology Report

 

 

             Votes Cast For:

 

        284,241,536

9.4%

 

             Votes Cast Against:

 

     2,739,669,008

90.6%

 

             Abstentions:

 

        516,990,841

 

 

             Broker Non-Votes:

 

        938,552,080

 

 


-25-



 

 

 

 

 

             Concerning Renewable Energy Policy

 

 

             Votes Cast For:

 

        805,429,204

27.5%

 

             Votes Cast Against:

 

     2,128,479,852

72.5%

 

             Abstentions:

 

        606,992,329

 

 

             Broker Non-Votes:

 

        938,552,080

 

 



For additional information, see the registrant's definitive proxy statement dated April 10, 2008, "Item 1 - Election of Directors" (beginning on page 12) and the items beginning with "Item 2 - Ratification of Independent Auditors", on page 47, through "Item 19 - Renewable Energy Policy", ending on page 73.



Item 6.  Exhibits


Exhibit

Description


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.





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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 5, 2008  

By:   /s/  Patrick T. Mulva                        

        Name:  Patrick T. Mulva

           

        Title:     Vice President, Controller and

                      Principal Accounting Officer





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INDEX TO EXHIBITS


Exhibit

Description


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.








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