FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
( X ) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1997
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 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 the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
Class Outstanding as of September 30, 1997
_______________________________ _____________________________________
Common stock, without par value 2,465,911,285
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<PAGE>
EXXON CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED SEPTEMBER 30, 1997
TABLE OF CONTENTS
Page
Number
______
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Income 3
Three and nine months ended September 30, 1997 and 1996
Condensed Consolidated Balance Sheet 4
As of September 30, 1997 and December 31, 1996
Condensed Consolidated Statement of Cash Flows 5
Nine months ended September 30, 1997 and 1996
Notes to Condensed Consolidated Financial Statements 6 - 8
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 9 -13
PART II. OTHER INFORMATION
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
Signature 15
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<PAGE>
PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
EXXON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(millions of dollars)
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
__________________ ________________
<S> <C> <C> <C> <C>
REVENUE 1997 1996 1997 1996
_______ _______ _______ _______
Sales and other operating revenue,
including excise taxes $32,381 $32,938 $100,780 $95,037
Earnings from equity interests and other
revenue 368 383 1,400 1,700
______ ______ ______ ______
Total revenue 32,749 33,321 102,180 $96,737
______ ______ ______ ______
COSTS AND OTHER DEDUCTIONS
Crude oil and product purchases 13,619 14,026 43,457 39,948
Operating expenses 3,186 3,202 9,763 9,760
Selling, general and administrative expenses 2,088 2,051 6,276 6,007
Depreciation and depletion 1,299 1,307 4,068 3,985
Exploration expenses, including dry holes 174 195 480 484
Interest expense 107 97 289 309
Excise taxes 3,616 3,852 10,904 10,812
Other taxes and duties 5,798 5,972 17,182 17,101
Income applicable to minority and
preferred interests 96 72 299 291
______ ______ ______ ______
Total costs and other deductions 29,983 30,774 92,718 88,697
______ ______ ______ ______
INCOME BEFORE INCOME TAXES 2,766 2,547 9,462 8,040
Income taxes 946 987 3,502 3,025
______ ______ ______ ______
NET INCOME $ 1,820 $ 1,560 $ 5,960 $ 5,015
====== ====== ====== ======
Net income per common share* $ 0.74 $ 0.62 $ 2.40 $ 2.01
Dividends per common share* $ 0.410 $ 0.395 $ 1.215 $ 1.165
Average number common shares outstanding
(millions)* 2,470.3 2,483.9 2,477.3 2,484.0
</TABLE>
Net income per share computed as income less dividends on preferred stock
divided by the weighted average number of common shares outstanding.
* Prior year amounts restated to reflect two-for-one stock split effective
March 14, 1997.
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EXXON CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars)
<TABLE>
<CAPTION>
Sept. 30, Dec. 31,
1997 1996
________ _______
<S> <C> <C>
ASSETS
Current assets
Cash and cash equivalents $ 4,781 $ 2,951
Other marketable securities 18 18
Notes and accounts receivable - net 10,248 10,499
Inventories
Crude oil, products and merchandise 4,717 4,501
Materials and supplies 769 784
Prepaid taxes and expenses 1,153 1,157
_______ _______
Total current assets 21,686 19,910
Property, plant and equipment - net 67,008 66,607
Investments and other assets 8,429 9,010
_______ _______
TOTAL ASSETS
$97,123 $95,527
======= =======
LIABILITIES
Current liabilities
Notes and loans payable $ 2,647 $ 2,510
Accounts payable and accrued liabilities 14,966 14,510
Income taxes payable 2,637 2,485
_______ _______
Total current liabilities 20,250 19,505
Long-term debt 7,281 7,236
Annuity reserves, deferred credits and other
liabilities 26,236 25,244
_______ _______
TOTAL LIABILITIES 53,767 51,985
_______ _______
SHAREHOLDERS' EQUITY
Preferred stock, without par value:
Authorized: 200 million shares
Outstanding: 3 million shares at Sept. 30, 1997 206
5 million shares at Dec. 31, 1996 303
Guaranteed LESOP obligation (225) (345)
Common stock, without par value:
Authorized: 3,000 million shares
Issued: 2,984 million shares at Sept. 30, 1997 2,322
See Note 3 for shares at Dec. 31, 1996 2,822
Earnings reinvested 50,727 57,156
Cumulative foreign exchange translation adjustment (600) 1,126
Common stock held in treasury:
518 million shares at Sept. 30, 1997 (9,074)
1,142 million shares at Dec. 31, 1996 (17,520)
_______ _______
TOTAL SHAREHOLDERS' EQUITY 43,356 43,542
_______ _______
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $97,123 $95,527
======= =======
</TABLE>
The number of shares of common stock issued and outstanding at September 30,
1997 and December 31, 1996 (restated to reflect two-for-one stock split
effective March 14, 1997) were 2,465,911,285 and 2,483,492,968, respectively.
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EXXON CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
<TABLE>
<CAPTION> Nine Months Ended
September 30,
__________________
1997 1996
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES ______ ______
Net income $5,960 $5,015
Depreciation and depletion 4,068 3,985
Changes in operational working capital, excluding
cash and debt 229 634
All other items - net 1,758 566
_____ _____
Net Cash Provided By Operating Activities 12,015 10,200
______ ______
CASH FLOWS FROM INVESTING ACTIVITIES
Acquisitions and additions to property, plant
and equipment (5,300) (5,101)
Sales of subsidiaries and property, plant and equipment 331 372
Other investing activities - net (232) 44
______ ______
Net Cash Used In Investing Activities (5,201) (4,685)
______ ______
NET CASH GENERATION BEFORE FINANCING ACTIVITIES 6,814 5,515
______ ______
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt 483 550
Reductions in long-term debt (220) (711)
Additions/(reductions) in short-term debt - net (294) (129)
Cash dividends to Exxon shareholders (3,024) (2,915)
Cash dividends to minority interests (258) (242)
Additions/(reductions) to minority interests and
sales/(redemptions) of affiliate preferred stock (87) (329)
Acquisitions of Exxon shares - net (1,555) (321)
______ ______
Net Cash Used In Financing Activities (4,955) (4,097)
______ ______
Effects Of Exchange Rate Changes On Cash (29) (16)
______ ______
Increase/(Decrease) In Cash And Cash Equivalents 1,830 1,402
Cash And Cash Equivalents At Beginning Of Period 2,951 1,508
______ ______
CASH AND CASH EQUIVALENTS AT END OF PERIOD $4,781 $2,910
______ ______
SUPPLEMENTAL DISCLOSURES
Income taxes paid $2,502 $1,957
Cash interest paid $ 576 $ 643
</TABLE>
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<PAGE>
EXXON 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 S.E.C. in the corporation's 1996 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.
During the third quarter of 1997, the corporation increased its ownership
in General Sekiyu K.K. (GSK) from 49% to 50.1%. These financial statements
reflect consolidation of GSK retroactive to the beginning of the year. GSK
was previously accounted for as an equity company. The January 1, 1997
balance sheet of GSK had total assets of $3.9 billion, including $0.1
billion of cash and cash equivalents and $2.0 billion of net property,
plant and equipment and total liabilities of $3.2 billion including $0.3
billion of short and long term debt and $0.7 billion of equity of minority
interests. Revenues for the first nine months of 1997 included $4.3
billion for GSK. Consolidated net income was unchanged as a result of the
restatement of prior quarter statements of income to reflect inclusion of
GSK revenues and expenses.
2. Recently Issued Statements Of Financial Accounting Standards
In February 1997, the Financial Accounting Standards Board released
Statement No. 128, "Earnings per Share" which must be adopted for both
interim and annual periods ending after December 15, 1997, with earlier
application not permitted. Based on preliminary estimates, basic earnings
per share defined by the statement is consistent with current reporting of
net income per common share. The difference between basic and diluted
earnings per share is expected to be insignificant.
In June 1997, the Financial Accounting Standards Board released Statement
No. 130, "Reporting Comprehensive Income" and Statement No. 131,
"Disclosures about Segments of an Enterprise and Related Information."
Both statements become effective for fiscal years beginning after December
15, 1997 with early adoption permitted. These statements require
disclosure of certain components of changes in equity and certain
information about operating segments and geographic areas of operation. No
decision has been made as to when the company will adopt the statements.
These statements will not have any effect on the results of operations or
financial position.
3. Capital
On February 26, 1997, the corporation's Board of Directors approved a two-
for-one stock split to Common Stock shareholders of record on March 14,
1997 and canceled 321,000,000 shares (pre-split basis) of Common Stock
without par value held by the corporation as treasury shares. These
canceled shares were returned to the status of authorized but unissued
shares. The treasury stock account was credited for $9,869 million, the
Common Stock account charged for $500 million and the retained earnings
account charged for $9,369 million to cancel these treasury shares.
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EXXON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On March 14, 1997, the authorized Common Stock was increased from two
billion shares without par value to three billion shares without par value
and the issued shares were split on a two-for-one basis.
Since canceled treasury shares were returned to the status of authorized
but unissued shares and used to partially accomplish the two-for-one stock
split, the restated number of Common Stock shares issued (on a post-split
basis) at December 31, 1996 is not meaningful.
The number of shares of Common Stock issued and outstanding as of December
31, 1996 and 1995, restated to reflect the two-for-one stock split, were
2,483,492,968 and 2,483,543,658, respectively. Earnings per share for the
years ended December 31, 1996, 1995 and 1994, restated for the effect of
the two-for-one stock split, are $3.01, $2.59, and $2.04, respectively.
4. Litigation And Other Contingencies
A number of lawsuits, including class actions, were brought in various
courts against Exxon Corporation and certain of its subsidiaries relating
to the accidental release of crude oil from the tanker Exxon Valdez in
1989. Essentially all of these lawsuits have now been resolved or are
subject to appeal.
On September 24, 1996, the United States District Court for the District of
Alaska entered a judgment in the amount of $5.058 billion in the Exxon
Valdez civil trial that began in May 1994. The District Court awarded
approximately $19.6 million in compensatory damages to fisher plaintiffs,
$38 million in prejudgment interest on the compensatory damages and $5
billion in punitive damages to a class composed of all persons and entities
who asserted claims for punitive damages from the corporation as a result
of the Exxon Valdez grounding. The District Court also ordered that these
awards shall bear interest from and after entry of the judgment. The
District Court stayed execution on the judgment pending appeal based on a
$6.75 billion letter of credit posted by the corporation. Exxon has
appealed the judgment. The corporation continues to believe that the
punitive damages in this case are unwarranted and that the judgment should
be set aside or substantially reduced by the appellate courts.
The ultimate cost to the corporation from the lawsuits arising from the
Exxon Valdez grounding is not possible to predict and may not be resolved
for a number of years.
German and Dutch affiliated companies are the concessionaires of a natural
gas field subject to a treaty between the governments of Germany and the
Netherlands under which the gas reserves in an undefined border or common
area are to be shared equally. Entitlement to the reserves is determined
by calculating the amount of gas which can be recovered from this area.
Based on the final reserve determination, the German affiliate has received
more gas than its entitlement. Arbitration proceedings, as provided in the
agreements, have been underway to determine the manner of resolving the
issues between the German and Dutch affiliated companies.
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<PAGE>
EXXON CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
On July 8, 1996, an interim ruling was issued establishing a provisional
compensation payment for the excess gas received. Additional compensation,
if any, remains subject to further arbitration proceedings or negotiation.
Other substantive matters remain outstanding, including recovery of
royalties paid on such excess gas and the taxes payable on the final
compensation amount. The net financial impact on the corporation is not
possible to predict at this time given these outstanding issues. However,
the ultimate outcome is not expected to have a materially adverse effect
upon the corporation's consolidated financial condition or operations.
The U.S. Tax Court has decided the issue with respect to the pricing of
crude oil purchased from Saudi Arabia for the years 1979-1981 in favor of
the corporation. This decision is subject to appeal. Certain other issues
for the years 1979-1982 remain pending before the Tax Court. The ultimate
resolution of these issues is not expected to have a materially adverse
effect upon the corporation's operations or financial condition.
Claims for substantial amounts have been made against Exxon and certain of
its consolidated subsidiaries in other pending lawsuits, the outcome of
which is not expected to have a materially adverse effect upon the
corporation's financial condition or operations.
The corporation and certain of its consolidated subsidiaries are directly
and indirectly contingently liable for amounts similar to those at the
prior year-end relating to guarantees for notes, loans and performance
under contracts, including guarantees of non-U.S. excise taxes and customs
duties of other companies, entered into as a normal business practice,
under reciprocal arrangements.
Additionally, the corporation and its affiliates have numerous long-term
sales and purchase commitments in their various business activities, all of
which are expected to be fulfilled with no adverse consequences material to
the corporation's operations or financial condition.
The operations and earnings of the corporation and its affiliates
throughout the world have been, and may in the future be, affected from
time to time in varying degree by political developments and laws and
regulations, such as forced divestiture of assets; restrictions on
production, imports and exports; price controls; tax increases and
retroactive tax claims; expropriation of property; cancellation of contract
rights and environmental regulations. Both the likelihood of such
occurrences and their overall effect upon the corporation vary greatly from
country to country and are not predictable.
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<PAGE>
EXXON CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
<TABLE>
<CAPTION>
FUNCTIONAL EARNINGS SUMMARY
Third Quarter First Nine Months
_______________ _________________
1997 1996 1997 1996
_____ _____ _____ _____
(millions of dollars)
<S> <C> <C> <C> <C>
Petroleum and natural gas
Exploration and production
United States $ 326 $ 395 $1,215 $1,237
Non-U.S. 569 583 2,079 2,202
Refining and marketing
United States 182 58 401 140
Non-U.S. 345 168 1,024 492
_____ _____ _____ _____
Total petroleum and natural gas 1,422 1,204 4,719 4,071
Chemicals
United States 214 208 652 527
Non-U.S. 135 133 400 405
Other operations 111 116 366 333
Corporate and financing (62) (101) (177) (321)
_____ _____ _____ _____
NET INCOME $1,820 $1,560 $5,960 $5,015
===== ===== ===== =====
</TABLE>
THIRD QUARTER 1997 COMPARED WITH THIRD QUARTER 1996
Exxon Corporation estimated third quarter 1997 net income of $1,820 million,
an increase of $260 million or 17 percent from $1,560 million in the third
quarter 1996. On a per share basis, net income increased to $0.74 in the
third quarter of 1997 compared to $0.62 in the prior year's quarter.
Exxon achieved record third quarter net income of $1.82 billion, and earnings
for the first nine months of nearly $6 billion were the highest in Exxon's
history. This year's third quarter results benefited from much improved
downstream margins, as well as higher sales of petroleum products, chemicals
and natural gas.
During the quarter, crude oil prices were on average about $2.50 per barrel
lower than last year. Natural gas sales were higher this year with increases
in North America and the Far East, while liquids production was similar to
last year's third quarter. Third quarter downstream earnings more than
doubled from last year. Margins improved as industry refining profitability
in the U.S. and Europe improved from last year's depressed levels. Petroleum
product sales in the third quarter again achieved record levels, with
increases from last year in nearly all major markets. Chemicals sales volumes
continued strong, establishing a quarterly record. However, chemical product
prices and industry margins weakened during the quarter. Copper prices were
much improved this year relative to last year's third quarter decline, and
both copper and coal production were higher.
During the quarter, Exxon continued its active investment program, spending
nearly $2.3 billion on capital and exploration projects.
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<PAGE>
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
OTHER COMMENTS ON THIRD QUARTER COMPARISON
Exploration and production earnings were adversely impacted by lower crude
prices which averaged about $2.50 per barrel less than the prior year. U.S.
gas prices were higher than last year and strengthened considerably at the
end of the quarter, while European realizations were lower due to the
stronger U.S. dollar in 1997.
Liquids production of 1,558 kbd (thousand barrels per day) compared to 1,570
kbd in the third quarter 1996. Production increases from Canadian heavy oil
operations and new developments in the North Sea and Australia were offset by
planned maintenance, property sales, and field declines. Gas production of
5,204 mcfd (million cubic feet per day) was up 2 percent from 1996, due to
higher North America and Asia Pacific sales.
Earnings from U.S. exploration and production were $326 million compared with
$395 million last year. Outside the U.S., earnings from exploration and
production were $569 million, versus $583 million in the third quarter 1996.
Downstream industry margins improved from the depressed levels of third
quarter 1996. Refining margins in the U.S. and Europe improved. Worldwide
marketing margins benefited from an improved retail environment in the U.K.
Petroleum product sales of 5,410 kbd increased 4 percent from last year's
third quarter. Sales volumes increased in North America and Asia Pacific.
Refinery throughput increased 213 kbd relative to last year, principally
reflecting lower scheduled maintenance.
In the U.S., third quarter refining and marketing earnings were $182 million,
up $124 million from the prior year. Earnings from refining and marketing
operations outside the U.S. were $345 million, an increase of $177 million
from last year.
Chemical earnings were $349 million, up $8 million from the third quarter
1996. Record prime product sales of 4,433 kt (thousand metric tons) were up
13 percent from the prior year. Overall margins declined due in part to lower
commodity chemicals prices.
Earnings from other operations, including coal, minerals and power, totaled
$111 million compared to $116 million in the third quarter 1996. Copper
realizations and production were higher in this year's third quarter, offset
by lower coal earnings. Corporate and financing expenses of $62 million
compared to $101 million in the third quarter of last year, reflecting lower
tax and debt-related charges.
Revenue for the third quarter of 1997 totaled $32,749 million compared to
$33,321 million in the third quarter 1996. Capital and exploration
expenditures were $2,274 million in the third quarter 1997 compared to $2,320
million in last year's third quarter.
During the third quarter of 1997, Exxon purchased 11.1 million shares of its
common stock for the treasury at a cost of $698 million, reducing shares
outstanding from 2,474.4 million at the end of this year's second quarter to
2,465.9 at the end of the third quarter. Purchases are made in open market
and negotiated transactions and may be discontinued at any time.
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<PAGE>
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FIRST NINE MONTHS 1997 COMPARED WITH FIRST NINE MONTHS 1996
Net income was $5,960 million for the first nine months of 1997, an increase
of 19 percent from the $5,015 million earned in 1996. On a per share basis,
net income was $2.40 for the first nine months of 1997 compared to $2.01 last
year. Net income for the first nine months of 1996 included $125 million in
non-recurring credits. Excluding these credits, the increase in net income
this year was $1,070 million or 22 percent.
Exploration and production earnings declined slightly from last year. Liquids
production of 1,590 kbd compared to 1,616 kbd last year. Increased Canadian
heavy oil production and production from new developments, primarily in Norway
and Australia, were more than offset by the near term effect of revised
contractual arrangements in Malaysia, field declines, and property sales.
Natural gas production of 6,116 mcfd was down 242 mcfd from the first nine
months of 1996, reflecting warmer European weather. Crude oil prices on
average were about $0.50 per barrel lower than last year, while natural gas
prices were somewhat higher.
Earnings from U.S. exploration and production were $1,215 million, down from
$1,237 million in 1996. Outside the U.S., exploration and production earnings
were $2,079 million, flat with the same period last year, after excluding
non-recurring credits of $125 million in the first quarter of 1996.
Downstream industry margins in the U.S. and Europe improved from last year's
low levels. The retail environment in the U.K. also showed improvement.
Petroleum product sales of 5,389 kbd increased 243 kbd over last year, with
volume growth in all major geographic areas.
Earnings from U.S. refining and marketing operations were $401 million, up
$261 million from the prior year. Refining and marketing operations outside
the U.S. earned $1,024 million in the first nine months of 1997, an increase
of $532 million from last year.
Chemicals earnings totaled $1,052 million, an increase of $120 million from
the first nine months of 1996. Prime product sales grew 10 percent over 1996
to 12,923 kt. On average, industry commodity prices and margins were also
improved from last year's levels although they were weaker in the third
quarter.
Earnings from other operations totaled $366 million, an increase of
$33 million from the first nine months of 1996. Copper and coal production
and copper prices were higher. Corporate and financing expenses declined
$144 million to $177 million, reflecting lower tax-related charges and lower
debt costs.
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<PAGE>
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
FIRST NINE MONTHS 1997 COMPARED WITH FIRST NINE MONTHS 1996
Net cash generation before financing activities was $6,814 million in the
first nine months of 1997 versus $5,515 million in the same period last year.
Operating activities provided net cash of $12,015 million, an increase of
$1,815 million from the prior year, influenced by higher net income and an
insurance related settlement. Investing activities used net cash of $5,201
million, or $516 million more than a year ago, including a higher level of
capital investment.
Net cash used in financing activities was $4,955 million in the first nine
months of 1997 versus $4,097 million for the year-ago period. The increase of
$858 million reflects the purchase of additional shares of Exxon common stock.
During the first nine months of 1997, a total of 31.3 million shares of Exxon
common stock were acquired for the treasury at a cost of $1,840 million.
Purchases are made in both the open market and through negotiated
transactions. Purchases may be discontinued at any time.
Capital and exploration expenditures of $6,279 million in the first nine
months of 1997 compared to $6,612 in the same period last year. Total capital
and exploration activity in 1997 should be at similar levels to 1996 as
attractive investment opportunities continue to be developed in each of the
major business segments.
Total debt of $9.9 billion at September 30, 1997 compares to $9.7 billion at
year-end 1996. The corporation's debt to capital ratio was 17.8 percent at
the end of the first nine months of 1997, similar to the 17.7 percent at
year-end 1996.
Over the twelve months ended September 30, 1997, return on average
shareholders' equity was 19.9 percent. Return on average capital employed,
which includes debt, was 16.4 percent over the same time period.
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. There are no events or
uncertainties known to management beyond those already included in reported
financial information that would indicate a material change in future
operating results or future financial condition.
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.
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<PAGE>
EXXON CORPORATION
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS
SPECIAL ITEMS
Third Quarter First Nine Months
________________ _________________
1997 1996 1997 1996
____ ____ ____ ____
(millions of dollars)
EXPLORATION & PRODUCTION
________________________
Non-U.S.
Tax related - - - $125
____ ____ ____ ____
TOTAL - - - $125
==== ==== ==== ====
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<PAGE>
PART II. OTHER INFORMATION
EXXON CORPORATION
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
Item 1. Legal Proceedings
_______ _________________
As reported in the registrant's Quarterly Reports on Form 10-Q for
the quarters ended March 31, 1995 and September 30, 1996, the
United States Environmental Protection Agency has alleged
violations of the Clean Air Act by Esso Virgin Islands, Inc.
("EVII"), a subsidiary of the registrant, involving failure to
conduct performance testing on a timely basis and underestimations
of daily throughput of gasoline in an emissions permit application.
EVII has agreed to pay a civil penalty of $294,200 to settle this
matter.
Item 6. Exhibits and Reports on Form 8-K
_______ ________________________________
a) Exhibits
Exhibit 27, Financial Data Schedule (included only in the electronic
filing of this document).
b) Reports on Form 8-K
The registrant has not filed any reports on Form 8-K during the
quarter.
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<PAGE>
EXXON CORPORATION
FORM 10-Q
FOR THE QUARTER ENDED SEPTEMBER 30, 1997
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 CORPORATION
Date: November 12, 1997 /s/ Donald D. Humphreys
_______________________________________________
Donald D. Humphreys, Vice President, Controller
and Principal Accounting Officer
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<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
THE SCHEDULE CONTAINS SUMMARY FINANCIAL INFORMATION EXTRACTED FROM EXXON'S
CONDENSED CONSOLIDATED BALANCE SHEET AT SEPT. 30, 1997 AND EXXON'S CONDENSED
CONSOLIDATED STATEMENT OF INCOME FOR THE THIRD QUARTER 1997, THAT ARE CONTAINED
IN EXXON'S FORM 10-Q FOR THE QUARTERLY PERIOD ENDED SEPT. 30, 1997. THE SCHEDULE
IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO SUCH FINANCIAL STATEMENTS.
</LEGEND>
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 4,781
<SECURITIES> 18
<RECEIVABLES> 7,580
<ALLOWANCES> 92
<INVENTORY> 5,486
<CURRENT-ASSETS> 21,686
<PP&E> 129,176
<DEPRECIATION> 62,168
<TOTAL-ASSETS> 97,123
<CURRENT-LIABILITIES> 20,250
<BONDS> 7,281
0
206
<COMMON> 2,322
<OTHER-SE> 40,828
<TOTAL-LIABILITY-AND-EQUITY> 97,123
<SALES> 100,780
<TOTAL-REVENUES> 102,180
<CGS> 43,457
<TOTAL-COSTS> 43,457
<OTHER-EXPENSES> 14,311
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 289
<INCOME-PRETAX> 9,462
<INCOME-TAX> 3,502
<INCOME-CONTINUING> 5,960
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 5,960
<EPS-PRIMARY> 2.400<F1>
<EPS-DILUTED> 0
<FN>
<F1>Prior period primary earnings per share amounts have been restated for the
two-for-one stock split effective March 14, 1997.
</FN>
</TABLE>
