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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 10-Q
QUARTERLY REPORT
PURSUANT TO SECTION 13 or 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1996
Commission file number 1-7555
MOBIL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-2850309
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
3225 Gallows Road, Fairfax, VA. 22037-0001
(Address of principal executive offices) (Zip Code)
(703) 846-3000
Registrant's telephone number
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 .
The number of shares outstanding of the registrant's common
stock, all of which comprise a single class with a $2.00 par
value, as of October 31, 1996, the latest practicable date, was
393,964,421.
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<PAGE>
MOBIL CORPORATION
Form 10-Q
Quarterly Report
September 30, 1996
TABLE OF CONTENTS
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PART I - FINANCIAL INFORMATION Page
Item 1. Condensed Consolidated Financial Statements
Consolidated Statement of Income for the
Three and Nine Months Ended
September 30, 1995 and 1996................... 1
Consolidated Balance Sheet at December 31, 1995
and September 30, 1996........................ 2
Consolidated Statement of Cash Flows for the
Nine Months Ended September 30, 1995 and 1996. 3
Notes to Condensed Consolidated Financial
Statements ................................... 4
Item 2. Management's Discussion and Analysis of Results
of Operations and Financial Condition .......... 6
PART II - OTHER INFORMATION
Item 1. Legal Proceedings ................................ 16
Item 2. Changes in Securities ............................ 17
Item 3. Defaults Upon Senior Securities .................. 17
Item 4. Submission of Matters to a Vote of Security
Holders ........................................ 17
Item 5. Other Information ................................ 17
Item 6. Exhibits and Reports on Form 8-K ................. 17
SIGNATURE .................................................. 18
EXHIBIT INDEX .............................................. 19
Exhibit 11. Computation of Earnings per Common Share ..... 20
Exhibit 12. Computation of Ratio of Earnings to Fixed
Charges .................................... 22
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<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Condensed Consolidated Financial Statements
MOBIL CORPORATION
CONSOLIDATED STATEMENT OF INCOME
(In millions, except per-share amounts)
<TABLE>
<CAPTION>
For the Three Months|For the Nine Months
Ended September 30, |Ended September 30,
--------------------|-------------------
|
1995 1996 | 1995 1996
------- ------- |------- -------
<S> <C> <C> <C> <C>
Revenues |
Sales and services (a) .................. $18,267 $19,852 |$54,369 $57,642
Income from equity investments, asset |
sales, interest and other ............. 370 474 | 744 904
------- ------- |------- -------
|
Total Revenues ........................ 18,637 20,326 | 55,113 58,546
------- ------- |------- -------
Costs and Expenses |
Crude oil, products and operating |
supplies and expenses ................. 10,172 11,788 | 30,773 33,687
Exploration expenses .................... 102 143 | 276 291
Selling and general expenses ............ 1,274 1,176 | 4,398 3,541
Depreciation, depletion and amortization. 688 645 | 2,225 1,903
Interest and debt discount expense ...... 119 119 | 351 332
Taxes other than income taxes (a) ....... 4,880 4,850 | 13,878 14,077
Income taxes ............................ 616 836 | 1,611 2,427
------- ------- |------- -------
Total Costs and Expenses .............. 17,851 19,557 | 53,512 56,258
------- ------- |------- -------
Net Income ................................ $ 786 $ 769 |$ 1,601 $ 2,288
======= ======= |======= =======
|
Net Income Per Common Share (b)............ $ 1.95 $ 1.92 |$ 3.94 $ 5.70
======= ======= |======= =======
|
Dividends Per Common Share ................ $ .925 $ 1.00 |$ 2.70 $ 2.925
======= ======= |======= =======
|
|
|
Notes: |
|
(a) Includes excise and state gasoline |
taxes of ............................ $ 2,202 $ 2,313 |$ 6,248 $ 6,685
|
(b) Based on net income less preferred |
stock dividend requirements of ...... $ 14 $ 13 |$ 42 $ 40
divided by the weighted average |
number of common shares outstanding |
(000's) of .......................... 395,536 393,925 |395,726 394,221
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
MOBIL - 1 -
<PAGE>
MOBIL CORPORATION
CONSOLIDATED BALANCE SHEET
(In millions)
<TABLE>
<CAPTION>
Dec. 31, Sept. 30,
ASSETS 1995 1996
------- --------
<S> <C> <C>
Current Assets
Cash and cash equivalents ................................ $ 498 $ 706
Accounts and notes receivable ............................ 7,316 7,561
Inventories .............................................. 3,287 3,454
Prepaid expenses and other current assets ................ 642 697
Deferred income taxes .................................... 313 219
------- -------
Total Current Assets ................................... 12,056 12,637
Investments and Long-Term Receivables ...................... 4,184 5,214
Properties, Plants and Equipment ........................... 51,719 55,311
Less: Accumulated Depreciation, Depletion and Amortization . 26,869 27,980
------- -------
Net Properties, Plants and Equipment ....................... 24,850 27,331
Deferred Charges and Other Assets .......................... 1,048 1,045
------- -------
Total Assets ........................................... $42,138 $46,227
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Short-term debt .......................................... $ 2,127 $ 3,706
Accounts payable ......................................... 5,358 5,383
Accrued liabilities ...................................... 2,703 2,978
Income, excise, state gasoline and other taxes payable ... 2,676 2,688
Deferred income taxes .................................... 190 238
------- -------
Total Current Liabilities .............................. 13,054 14,993
Long-Term Debt ............................................. 4,629 4,925
Reserves for Employee Benefits ............................. 1,624 1,592
Accrued Restoration, Removal and Environmental Costs ....... 1,254 1,254
Deferred Credits and Other Noncurrent Obligations .......... 884 1,233
Deferred Income Taxes ...................................... 2,647 3,328
Minority Interest in Subsidiary Companies .................. 95 106
------- -------
Total Liabilities ...................................... 24,187 27,431
------- -------
Shareholders' Equity
Preferred stock (ESOP-related) -- shares issued and
outstanding: 92,864 at December 31, 1995 and
89,192 at September 30, 1996 ........................... 722 693
Unearned employee compensation (ESOP-related) ............ (411) (376)
Common stock -- $2.00 par value; shares authorized:
600,000,000; shares issued: 443,905,531 at December 31,
1995 and 445,147,296 at September 30, 1996 ............. 888 890
Capital surplus .......................................... 1,396 1,449
Earnings retained in the business ........................ 17,745 18,840
Cumulative foreign exchange translation adjustment ....... (27) (131)
Common stock held in treasury, at cost -- shares:
49,345,650 at December 31, 1995 and 51,183,750 at
September 30, 1996 ..................................... (2,362) (2,569)
------- -------
Total Shareholders' Equity ............................. 17,951 18,796
------- -------
Total Liabilities and Shareholders' Equity ................. $42,138 $46,227
======= =======
</TABLE>
The accompanying notes are an integral part of these
condensed consolidated financial statements.
MOBIL - 2 -
<PAGE>
MOBIL CORPORATION
CONSOLIDATED STATEMENT OF CASH FLOWS
(In millions)
<TABLE>
<CAPTION>
For the Nine Months
Ended September 30,
-------------------
1995 1996
------- -------
<S> <C> <C>
Cash Flows from Operating Activities
Net Income ......................................... $ 1,601 $ 2,288
Adjustments to reconcile to net cash from
operating activities:
Depreciation, depletion and amortization ....... 2,225 1,903
Deferred income taxes .......................... (41) 372
Earnings (greater) less than dividends from
equity affiliates ............................ (27) 111
Exploration expenses (includes noncash
charges: 1995-$20; 1996-$16) ................ 276 291
Gain on sales of properties, plants and
equipment and other assets ................... (34) (311)
Decrease (increase) in working capital items ... 6 (470)
Other, net ..................................... 7 (1)
------- -------
Net Cash from Operating Activities ................... 4,013 4,183
------- -------
Cash Flows from Investing Activities
Capital and exploration expenditures ............... (2,897) (3,311)
Acquisition of Ampolex Limited, net of cash
acquired ......................................... - (1,347)
Proceeds from sales of properties, plants and
equipment and other assets ....................... 266 1,005
Payments attributable to investments and
long-term receivables ............................ (76) (638)
------- -------
Net Cash Used in Investing Activities ................ (2,707) (4,291)
------- -------
Cash Flows from Financing Activities
Cash dividends ..................................... (1,111) (1,193)
Proceeds from borrowings having original
terms greater than three months .................. 1,493 1,038
Repayments of borrowings having original
terms greater than three months .................. (1,248) (744)
(Decrease) increase in other borrowings ............ (201) 1,362
Proceeds from issuance of common stock ............. 56 55
Purchase of common stock for treasury .............. (183) (207)
------- -------
Net Cash (Used in) Provided by Financing Activities .. (1,194) 311
------- -------
Effect of Exchange Rate Changes on Cash and
Cash Equivalents ................................... (46) 5
------- -------
Net Increase in Cash and Cash Equivalents............. 66 208
Cash and Cash Equivalents - Beginning of Period ...... 531 498
------- -------
Cash and Cash Equivalents - End of Period ............ $ 597 $ 706
======= =======
</TABLE>
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Memo:
Net cash from operating activities .................. $ 4,013 $ 4,183
Net cash used in investing activities ............... (2,707) (4,291)
Cash dividends ...................................... (1,111) (1,193)
------- -------
Excess (shortfall) of cash from operating activities
over investing activities and dividends ........... $ 195 $(1,301)
======= =======
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The accompanying notes are an integral part of these
condensed consolidated financial statements.
MOBIL - 3 -
<PAGE>
MOBIL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Financial Statements
The condensed consolidated financial statements of Mobil Corporation (Mobil)
included herein are unaudited and have been prepared pursuant to the rules and
regulations of the Securities and Exchange Commission (SEC). Although certain
information normally included in financial statements prepared in accordance
with generally accepted accounting principles has been condensed or omitted,
Mobil believes that the disclosures are adequate to make the information
presented not misleading. The condensed consolidated financial statements should
be read in conjunction with the consolidated financial statements, the notes
thereto and the financial statement schedule included or incorporated by
reference in Mobil's Annual Report on Form 10-K for its fiscal year ended
December 31, 1995.
The condensed consolidated financial statements included herein reflect all
normal recurring adjustments that, in the opinion of management, are necessary
for a fair presentation. The results for interim periods are not necessarily
indicative of trends or of results to be expected for a full year.
2. Acquisitions
On February 14, 1996, Mobil announced that an Australian subsidiary, Mobil
Exploration & Producing Australia Pty Ltd (MEPA), had acquired a substantial
equity position in Ampolex Limited (Ampolex) and had made a proposal to acquire
the remaining listed securities of this Australian oil and gas company. After
MEPA revised its offer in May 1996, the Board of Directors of Ampolex
recommended that the holders of Ampolex's ordinary and preference shares accept
MEPA's offer. MEPA's offer for the preference shares closed on September 13,
1996, with MEPA having acquired approximately 99% of the preference shares, and
MEPA has commenced compulsory acquisition of the remaining preference shares.
MEPA has acquired approximately 99% of the ordinary shares, and following the
close of the offer for the ordinary shares will be able to compulsorily acquire
the remaining ordinary shares. In addition, in April and July, 1996, MEPA
offered to purchase all of Ampolex's unsecured subordinated convertible 8%
notes. Prior to MEPA's takeover offer, however, a dispute had arisen between
Ampolex and certain holders of such notes as to the proper rate of conversion of
each note into Ampolex ordinary shares. In June 1995, Ampolex initiated legal
proceedings in Australia, seeking, among other things, declarations as to such
rate of conversion. On September 25, 1996, Ampolex announced it had reached
agreement to settle this litigation, and the holders of the notes who were
parties to the litigation tendered their notes to MEPA under the terms MEPA had
originally offered. MEPA now owns approximately 97% of the notes. On November 5,
1996, MEPA offered to purchase the remaining notes at a price of A$10.00 per
note. If this offer is successful, the total price to be paid by MEPA for the
purchase of Ampolex will be U.S. $1,395 million.
The acquisition of Ampolex was recorded using the purchase accounting method
for business combinations and the excess of MEPA's investment in Ampolex over
the book value of Ampolex's net assets was allocated on the basis of the
estimated fair values of the net assets acquired. Effective July 1, 1996,
Ampolex was consolidated in Mobil's financial statements. At June 30, 1996,
MEPA's investment in Ampolex had been accounted for under the equity method,
pending the completion of the purchase price allocation.
MOBIL - 4 -
<PAGE>
2. Acquisitions -- concluded
On May 16, 1996, Mobil announced that it had acquired a 25% equity interest in
the Tengiz oil field in the Republic of Kazakstan for $1.1 billion. To date,
Mobil has paid $546 million, and has recorded its obligation for the remaining
balance which is payable in installments through the year 2000, upon reaching
certain project milestones.
3. Supplementary Cash Flow Data
The table below details the components of the line "Decrease (increase) in
working capital items" which is shown in the Consolidated Statement of Cash
Flows on page 3. The impact of changes in foreign currency translation rates has
been removed from these amounts. Therefore, these amounts do not agree with the
differences that could be derived from the Consolidated Balance Sheet amounts
shown on page 2.
----------------------------------------------------------------------
(In millions) For the Nine Months
Ended September 30,
--------------------
1995 1996
----- -----
Changes in Working Capital Items
(Increases)/decreases
Accounts and notes receivable ................. $ (85) $(501)
Inventories ................................... (174) (214)
Prepaid expenses and other current assets ..... (80) (40)
Accounts payable .............................. (129) 235
Accrued liabilities ........................... 283 (1)
Income, excise, state gasoline and
other taxes payable ......................... 191 51
----- -----
Decrease (increase) in working capital items .. $ 6 $(470)
===== =====
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MOBIL - 5 -
<PAGE>
Item 2. Management's Discussion and Analysis of Results of Operations and
Financial Condition.
RESULTS OF OPERATIONS
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| |
| REPORTED EARNINGS Third Quarter |First Nine Months |
| (In millions) _____________ Incr./|_________________ Incr./|
| 1995 1996 (Decr.)| 1995 1996 (Decr.)|
| ----- ----- ----- | ------ ------ ------ |
| Petroleum Operations | |
| E&P - United States .......... $ 46 $ 234 $ 188 | $ 185 $ 556 $ 371 |
| - International .......... 256 303 47 | 792 963 171 |
| ----- ----- ----- | ------ ------ ------ |
| Total E&P .................... 302 537 235 | 977 1,519 542 |
| ----- ----- ----- | ------ ------ ------ |
| M&R - United States .......... 148 83 (65)| 131 311 180 |
| - International .......... 200 148 (52)| 231 512 281 |
| ----- ----- ----- | ------ ------ ------ |
| Total M&R .................... 348 231 (117)| 362 823 461 |
| ----- ----- ----- | ------ ------ ------ |
| Total Petroleum ................ 650 768 118 | 1,339 2,342 1,003 |
| | |
| Chemical ....................... 179 90 (89)| 523 225 (298)|
| Corporate and Other (a) ........ 34 (22) (56)| (46) (107) (61)|
| Net Financing Expense .......... (77) (67) 10 | (215) (172) 43 |
| ----- ----- ----- | ------ ------ ------ |
| Net Income ..................... $ 786 $ 769 $ (17)| $1,601 $2,288 $ 687 |
| ===== ===== ===== | ====== ====== ====== |
|------------------------------------------------------------------------------|
| |
| OPERATING EARNINGS Third Quarter |First Nine Months |
| (Adjusted for Special Items) _____________ Incr./ _________________ Incr./|
| (In millions) 1995 1996 (Decr.)| 1995 1996 (Decr.)|
| ----- ----- ----- | ------ ------ ------ |
| Petroleum Operations | |
| E&P - United States .......... $ 46 $ 152 $ 106 | $ 237 $ 474 $ 237 |
| - International .......... 256 270 14 | 817 930 113 |
| ----- ----- ----- | ------ ------ ------ |
| Total E&P .................... 302 422 120 | 1,054 1,404 350 |
| ----- ----- ----- | ------ ------ ------ |
| M&R - United States .......... 148 83 (65)| 235 311 76 |
| - International .......... 229 148 (81)| 528 512 (16)|
| ----- ----- ----- | ------ ------ ------ |
| Total M&R .................... 377 231 (146)| 763 823 60 |
| ----- ----- ----- | ------ ------ ------ |
| Total Petroleum ................ 679 653 (26)| 1,817 2,227 410 |
| | |
| Chemical ....................... 179 90 (89)| 539 225 (314)|
| Corporate and Other (a) ........ (37) (8) 29 | (55) (62) (7)|
| Net Financing Expense .......... (77) (67) 10 | (215) (172) 43 |
| ----- ----- ----- | ------ ------ ------ |
| Income Excluding Special Items.. 744 668 (76)| 2,086 2,218 132 |
| Special Items (table on page 7). 42 101 59 | (485) 70 555 |
| ----- ----- ----- | ------ ------ ------ |
| Net Income ..................... $ 786 $ 769 $ (17)| $1,601 $2,288 $ 687 |
| ===== ===== ===== | ====== ====== ====== |
|------------------------------------------------------------------------------|
(a) Corporate and Other includes the results from Real Estate operations,
Mining and Minerals, corporate administrative expenses and other items.
MOBIL - 6 -
<PAGE>
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SPECIAL ITEMS Third Quarter | First Nine Months
(In millions) 1995 1996 | 1995 1996
----- ----- | ----- -----
Asset Sales ........................ $ - $ 129 | $ (22) $ 129
SRP Implementation (a).............. - (28) | - (59)
Restructuring (b)....... ........... - - | (505) -
Litigation Settlement .............. 71 - | 71 -
Property Write-downs................ (29) - | (29) -
----- ----- | ----- -----
Total Special Items .............. $ 42 $ 101 | $(485) $ 70
===== ===== ===== =====
(a) Staff Redesign Project (SRP).
(b) Includes $286 million for SRP, $39 million for restructuring of U.S.
marketing and refining operations and $180 million for European refining.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
REVENUES BY SEGMENT Third Quarter | First Nine Months
(In millions) Incr./| Incr./
(Decr.)| (Decr.)
1995 1996 % | 1995 1996 %
------- ------- ---- | ------ ------- ----
Exploration & Producing ....... $ 1,693 $ 1,974 17 | $ 5,268 $ 5,815 10
Marketing & Refining .......... 15,391 17,500 14 | 45,280 50,138 11
Chemical ...................... 1,349 768 (43) | 4,163 2,341 (44)
Corporate & Other ............. 204 84 (59) | 402 252 (37)
------- ------- | ------- -------
Total Revenues .............. $18,637 $20,326 9 | $55,113 $58,546 6
======= ======= | ======= =======
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CONSOLIDATED RESULTS OVERVIEW
THIRD QUARTER 1996 COMPARED WITH THIRD QUARTER 1995
Consolidated third quarter net income was $769 million, a decrease of $17
million from the $786 million reported for the third quarter of 1995. Earnings
per common share for the third quarter of 1996 were $1.92, compared with $1.95
for the comparable period in 1995. This quarter's results included net special
benefits of $101 million -- $129 million of gains on asset sales, partly offset
by $28 million of restructuring implementation costs. Last year's quarterly
results included $42 million of net special benefits -- a $71 million favorable
litigation settlement, partly offset by $29 million of property write-downs.
Excluding special items from both periods, third quarter 1996 operating income
of $668 million decreased $76 million, or 10%.
Third quarter results were disappointing due to unfavorable market conditions
in many of the businesses where Mobil has a substantial presence; although the
company's outlook for these businesses is favorable over the longer term. Also,
results were hurt by a higher level of unscheduled refinery downtime in the
United States. All affected refineries were restored to normal operations.
Strong crude oil and natural gas prices were more than offset by significantly
lower worldwide downstream and petrochemical margins. In particular, the
downstream business has not been able to recover rising crude oil prices in the
marketplace. Additionally, paraxylene prices have recently been under
significant downward pressure as a result of surplus capacity and weak demand.
Other factors unfavorably affecting this period's comparison with last year were
the absence of the Nigerian reserve bonus, the Ruhrgas dividend, and income from
the divested chemical businesses. The expiration of the tax holiday for the
MOBIL - 7 -
<PAGE>
CONSOLIDATED RESULTS OVERVIEW -- continued
petrochemicals joint venture in Saudi Arabia and higher exploration expenses in
international upstream operations also had negative impacts. Partly offsetting
these items was the favorable impact of higher worldwide downstream sales
volumes, which were up 7%.
This quarter, savings from expense initiatives totaled about $160 million
before tax, including savings from the staff redesign project and other
restructuring programs. These savings were, however, offset by higher volume
related expenses, including costs associated with new programs for growth, as
well as inflation, in particular higher purchased energy expenses.
Worldwide revenues in the third quarter of 1996 of $20,326 million were $1,689
million higher than revenues in the third quarter of 1995, reflecting higher
worldwide crude oil, natural gas and petroleum product prices, and higher
petroleum product sales volumes, partly offset by lower petrochemical prices and
the absence of revenues from divested chemical businesses. Income from equity
investments, asset sales, interest and other was $104 million higher, mainly due
to asset sales in this year's third quarter. Crude oil, products and operating
supplies and expenses increased by $1,616 million to $11,788 million, primarily
due to increased crude and product prices and higher worldwide product sales
volumes, partly offset by the impact of the divested chemical businesses.
Exploration expenses were $41 million higher, mainly reflecting the acquisition
of Ampolex and higher dry drilling expense in international areas. Selling and
general expenses decreased $98 million to $1,176 million, in part due to expense
reductions associated with restructuring programs. Depreciation, depletion and
amortization expenses (DD&A) were $43 million lower largely due to the absence
of last year's write-down of certain marketing assets in Australia and the
effects of adopting FAS 121 in the fourth quarter of 1995, partly offset by the
inclusion of Ampolex's DD&A. Taxes other than income taxes decreased $30 million
as higher worldwide product sales volumes and an increase in the duty tax rate
in the United Kingdom were more than offset by the absence of import duties on
crude oil resulting from the closure of the Woerth refinery in Germany. Income
tax expense increased $220 million to $836 million, mainly due to higher taxes
in international Exploration and Producing, including the absence of last year's
Nigerian reserve bonus, and other mix changes in the sources of earnings.
FIRST NINE MONTHS 1996 COMPARED WITH FIRST NINE MONTHS 1995
Mobil's consolidated net income for the first nine months of 1996 was $2,288
million, $687 million higher than the $1,601 million earned in the comparable
period last year. Included in this year's net income were net special benefits
of $70 million, representing gains on asset sales, partly offset by
restructuring implementation costs. Last year's results included $485 million of
net special charges, primarily for the realignment of worldwide staff support
services and restructuring of marketing and refining operations in the United
States and Europe. Excluding special items, Mobil's 1996 nine month operating
income was $2,218 million, up $132 million, or 6%, from last year.
The $132 million increase in operating earnings is mainly from improved
petroleum sector market conditions and benefits from higher volumes and business
initiatives, largely offset by lower Chemical income. In Exploration and
Producing, higher income resulted from higher prices and lower producing
expenses, and from lower capital recovery charges primarily due to adoption of
FAS 121 in the fourth quarter of 1995. In Marketing and Refining, higher volumes
and industry refining margins have been partly offset by a higher level
MOBIL - 8 -
<PAGE>
CONSOLIDATED RESULTS OVERVIEW -- continued
of refinery downtime and lower U.K. marketing margins. Unscheduled refinery
downtime reduced earnings by about $45 million versus last year. Chemical income
is lower than last year when record income resulted from very high worldwide
petrochemical margins. This year, petrochemical margins are significantly lower
and results have been hurt by the absence of income from divested businesses and
the expiration of the Saudi tax holiday. Additionally, reduced operating
performance at certain chemical plants negatively impacted earnings by about $25
million.
Since May 1995, Mobil has commenced five major restructuring programs with the
projected elimination of approximately 6,000 positions and the closure of
certain facilities. During 1995, the Company established restructuring
provisions of $911 million ($590 million after tax), primarily to cover the
costs of employee separation benefits and the closure of certain facilities. Of
this amount, $671 million represented forecast cash expenditures. As of
September 30, 1996, cumulative cash outlays covered by the restructuring
provisions totaled $352 million. As of the same date, spending related to other
implementation costs for these programs totaled about $100 million, before tax.
All programs are on schedule and are expected to reach an annualized savings
rate of over $1 billion by year-end.
Nine month 1996 revenues of $58,546 million were $3,433 million higher than
revenues in the same period of 1995 due to increased worldwide petroleum product
sales volumes and higher worldwide selling prices for crude oil, natural gas and
petroleum products, partly offset by lower petrochemical prices and the absence
of revenues from divested chemical businesses. Income from equity investments,
asset sales, interest and other increased $160 million, mainly due to this
year's gains on asset sales. Crude oil, products and operating supplies and
expenses increased by $2,914 million to $33,687 million due to increased crude
and product prices and higher product sales volumes, partly offset by the
absence of costs from the divested chemical businesses. Selling and general
expenses declined $857 million to $3,541 million, primarily due to the absence
of last year's special charges for various restructuring programs, subsequent
expense reductions associated with those programs and the divestiture of the
chemical businesses. Depreciation, depletion and amortization expenses were $322
million lower largely due to the absence of 1995 restructuring-related asset
write-downs and the effects of adopting FAS 121 in the fourth quarter of 1995.
Taxes other than income taxes increased $199 million to $14,077 million due to
higher worldwide product sales volumes and an increase in the duty tax rate in
the United Kingdom, partially offset by the absence of import duties on crude
oil resulting from the closure of the Woerth refinery in Germany. Income tax
expense increased $816 million over the prior year, mainly due to higher pre-tax
income and mix changes in the sources of earnings.
MOBIL - 9 -
<PAGE>
Exploration and Producing
- --------------------------------------------------------------------------------
Exploration and Producing
Selected Operating Data Third Quarter First Nine Months
Incr./(Decr.) Incr./(Decr.)
1995 1996 Vol. % 1995 1996 Vol. %
Net Crude Oil and NGL |
Production (TBD) - U.S. 278 257 (21) (8) | 285 268 (17) (6)
- Intl. 533 594 61 11 | 523 568 45 9
----- ----- ----- | ----- ----- -----
Total .................. 811 851 40 5 | 808 836 28 3
===== ===== ===== | ===== ===== =====
Net Natural Gas |
Production (MMCFD) - U.S. 1,417 1,284 (133) (9) | 1,479 1,366 (113) (8)
- Intl. 2,677 2,784 107 4 | 3,055 3,118 63 2
----- ----- ----- | ----- ----- -----
Total .................. 4,094 4,068 (26) (1) | 4,534 4,484 (50) (1)
===== ===== ===== | ===== ===== =====
|
Total Net Production (TBDOE) 1,539 1,574 35 2 | 1,614 1,633 19 1
===== ===== ===== | ===== ===== =====
- --------------------------------------------------------------------------------
THIRD QUARTER 1996 COMPARED WITH THIRD QUARTER 1995
Exploration and Producing income of $537 million was $235 million higher than
the third quarter of last year. This year's results included $115 million of
special benefits for gains on asset sales, $82 million in the U.S. and $33
million in Canada. There were no special items last year. Excluding special
items, operating income of $422 million was $120 million higher than last year.
In the United States, operating income was $152 million, up $106 million,
mainly due to higher prices for crude oil and natural gas. The crude oil price
increase was mitigated by the weakening of prices for California heavy crudes,
which make up about 40% of Mobil's U.S. crude production, relative to light
crudes. Lower exploration expenses, savings from restructuring initiatives, and
lower capital recovery charges also contributed to the improved earnings. These
benefits were partially offset by the impact of lower production volumes
resulting from asset sales and natural field declines.
International operating income of $270 million was $14 million higher, mainly
due to higher prices and volumes. Volumes were up due to the success of Mobil's
continuing investment program in Nigeria and production was added with the
acquisitions of Tengiz and Ampolex. Earnings were reduced this period by higher
exploration expenses, timing of the Ruhrgas dividend (received in the third
quarter of 1995 and in the second quarter of 1996), and the absence of the
Nigerian reserve bonus included in last year's third quarter.
FIRST NINE MONTHS 1996 COMPARED WITH FIRST NINE MONTHS 1995
Exploration and Producing income of $1,519 million was $542 million higher
than last year. Last year's results included $77 million of special charges; $55
million related to the restructuring of staff support services and $22 million
related to losses on U.S. asset sales. This year's results included special
benefits of $115 million for gains on asset sales. Excluding special items from
both periods, operating income of $1,404 million was $350 million higher than
last year. Higher income resulted from higher worldwide crude oil and natural
gas prices, lower producing expenses, and from lower capital recovery charges
primarily due to adoption of FAS 121 in the fourth quarter of 1995.
MOBIL - 10 -
<PAGE>
Marketing and Refining
- --------------------------------------------------------------------------------
Marketing and Refining Third Quarter First Nine Months
Selected Operating Data Incr./(Decr.) Incr./(Decr.)
1995 1996 Vol. % 1995 1996 Vol. %
----- ----- --- -- ----- ----- --- --
Petroleum Product
Sales (TBD)(a) - U.S. ... 1,285 1,414 129 10 | 1,266 1,340 74 6
- Intl. .. 1,910 1,990 80 4 | 1,885 1,963 78 4
----- ----- --- | ----- ----- ---
Total .................. 3,195 3,404 209 7 | 3,151 3,303 152 5
===== ===== === | ===== ===== ===
|
Refinery Runs (TBD) |
- U.S. ... 902 926 24 3 | 897 914 17 2
- Intl. .. 1,225 1,254 29 2 | 1,231 1,223 (8) (1)
----- ----- --- | ----- ----- ---
Total .................. 2,127 2,180 53 2 | 2,128 2,137 9 -
===== ===== === | ===== ===== ===
(a) includes supply/other sales
- --------------------------------------------------------------------------------
THIRD QUARTER 1996 COMPARED WITH THIRD QUARTER 1995
Marketing and Refining income of $231 million was $117 million lower than the
third quarter of last year. Last year's results included $29 million of special
charges for property write-downs. There were no special items this year.
Excluding special items, operating income of $231 million was $146 million
lower.
United States operating income was $83 million, down $65 million from last
year, mainly due to weak margins, as product prices lagged the increase in crude
costs, and unscheduled refinery downtime. The unscheduled refinery downtime hurt
earnings by about $25 million versus last year. These factors were partially
offset by higher product sales volumes, notably retail gasoline sales, where
volumes increased due to the implementation of Friendly Serve(sm) and other
programs to develop new business.
International operating income of $148 million was down $81 million due to
lower integrated margins in Europe and Asia-Pacific. U.K. marketing margins,
while somewhat improved from the second quarter of this year, were significantly
below those in the third quarter of 1995. Lower paraxylene margins also had an
impact on Mobil's Singapore refinery earnings, as income from the aromatics
complex at this facility is shared between M&R and Mobil Chemical. These market
factors more than offset the positive impact of stronger sales volumes.
FIRST NINE MONTHS 1996 COMPARED WITH FIRST NINE MONTHS 1995
Marketing and Refining income was $823 million, $461 million higher than last
year. Last year's results included special charges of $401 million (U.S. -- $65
million for redesign of staff support services and $39 million for restructuring
marketing and refining operations; International -- $88 million for redesign of
staff support services, $180 million for European refining, and $29 million of
property write-downs). There were no special items this year. Excluding special
items, operating income increased $60 million to $823 million. Higher volumes
and industry refining margins were partly offset by a higher level of refinery
downtime and lower U.K. marketing margins. Unscheduled refinery downtime reduced
earnings by about $45 million versus last year.
MOBIL - 11 -
<PAGE>
Chemical
THIRD QUARTER AND FIRST NINE MONTH COMPARISONS OF 1996 WITH 1995
Chemical income of $90 million was $89 million lower than last year's third
quarter. In the first nine months of 1996, Chemical income was $225 million
compared with $523 million in the same period last year. Excluding last year's
special charge of $16 million for redesign of staff support services, Chemical
operating income of $225 million was $314 million lower than the first nine
months of 1995. Declines in both the third quarter and the year-to-date periods
reflected lower worldwide polyethylene resin and paraxylene margins, the absence
of income from divested businesses and the expiration of the tax holiday for the
company's petrochemicals joint venture in Saudi Arabia. Additionally, reduced
operating performance at certain chemical plants negatively impacted
year-to-date income by about $25 million.
Corporate and Other
THIRD QUARTER AND FIRST NINE MONTH COMPARISONS OF 1996 WITH 1995
Corporate and Other expense of $22 million was $56 million higher than last
year's third quarter when results included $71 million of special benefits from
a favorable litigation settlement. This year's quarterly results included net
special charges of $14 million, $28 million of costs for restructuring
implementation, partly offset by a $14 million gain on an asset sale. Excluding
special items from both periods, Corporate and Other expense of $8 million was
$29 million lower than the third quarter last year when results included costs
associated with restructuring. Additionally, the current-year quarter benefited
from improved results in real estate operations and the timing of certain
miscellaneous items.
For the first nine months of 1996, Corporate and Other expense was $107
million, $61 million higher than last year. Last year's results included net
special benefits of $9 million, the $71 million favorable litigation settlement,
offset by $62 million of restructuring charges. This year's results included $45
million of net special charges, $59 million of costs for restructuring
implementation, partly offset by a $14 million gain on an asset sale. Excluding
special items from both periods, Corporate and Other expense was $62 million, $7
million higher than last year when results were favorably impacted by the sale
of an office complex in Arlington, Virginia.
Net Financing Expense
THIRD QUARTER AND FIRST NINE MONTH COMPARISONS OF 1996 WITH 1995
Net Financing Expense of $67 million was $10 million lower than last year's
third quarter due to lower interest rates, partly offset by interest on
additional borrowings resulting from this year's Ampolex and Tengiz
acquisitions. For the first nine months of 1996, Net Financing Expense of $172
million was $43 million lower than last year reflecting lower average debt
balances, lower average interest rates, and the capitalization of interest
expense on major projects in Nigeria, Qatar and Canada.
MOBIL - 12 -
<PAGE>
DISCUSSION OF FINANCIAL CONDITION
At September 30, 1996, total current assets of $12,637 million were $581
million higher than at year-end 1995 reflecting higher accounts receivable
balances due to higher worldwide prices and petroleum product sales volumes,
partly offset by the contribution of accounts receivable to the gas marketing
joint venture with PanEnergy. Also contributing to the increase in total current
assets were higher inventories that mainly reflect higher volumes, and a higher
level of cash and cash equivalents.
Investments and long-term receivables increased $1,030 million, primarily due
to the acquisition of a 25% equity interest in the Tengiz field in Kazakstan.
Net properties, plants and equipment increased $2,481 million to $27,331
million. Capital expenditures, including the acquisition of Ampolex, were partly
offset by depreciation, depletion and amortization, and the impact of asset
sales.
Total current liabilities of $14,993 million at September 30, 1996, increased
$1,939 million from year-end 1995. This increase primarily reflects higher
short-term debt used to fund the acquisitions of Ampolex and Tengiz.
Total debt of Mobil and its subsidiaries was $8,631 million at September 30,
1996, up $1,875 million from year-end 1995. The debt-to-capitalization ratio was
31% at September 30, 1996, compared with 27% at year-end 1995.
Deferred Credits and Other Noncurrent Obligations increased $349 million to
$1,233 million mainly due to future obligations related to the acquisition of an
interest in the Tengiz field.
Current and noncurrent deferred income tax liabilities increased $729 million,
primarily due to the consolidation of Ampolex and accelerated depreciation
associated with an increase in investment spending, primarily in international
Exploration and Producing.
Shareholders' equity rose $845 million during the first nine months of 1996,
primarily due to an increase of $1,095 million in earnings retained in the
business at September 30, 1996. Partly offsetting the higher retained earnings
were a net charge in the cumulative foreign exchange translation adjustment
account reflecting a strengthening U.S. dollar in certain countries in which the
company has significant operations ($104 million) and an increase in the cost of
common stock held in the treasury as 1,838,100 shares were purchased on the open
market to offset the dilutive effects of the issuance of shares upon exercise of
stock options ($207 million).
During the first nine months of 1996, net cash generated from operating
activities was $4,183 million, $1,301 million less than the cash requirements
for investing activities and dividends, reflecting the cost of the two major
acquisitions of Ampolex and Tengiz, consistent with Mobil's stated growth
strategy in international oil and gas.
MOBIL - 13 -
<PAGE>
DISCUSSION OF FINANCIAL CONDITION - concluded
Capital and Exploration Expenditures for the third quarter of 1996 were $2,750
million, an increase of $1,631 million from the comparable period last year. For
the first nine months of 1996, worldwide capital and exploration expenditures
were $4,705 million, compared with $2,897 million for the year-earlier period.
The increase in both periods was primarily due to the full consolidation of the
Ampolex acquisition that was previously reflected in investments and advances.
- ----------------------------------------------------------------------------
CAPITAL AND EXPLORATION
EXPENDITURES Third Quarter First Nine Months
(In millions) 1995 1996 1995 1996
----- ----- ----- -----
Petroleum Operations |
Exploration & Producing - U.S. .. $ 306 $ 95 | $ 577 $ 367
- Intl. . 459 2,226 | 1,267 3,072
Marketing & Refining - U.S. .. 94 87 | 333 261
- Intl. . 178 243 | 502 730
Chemical ........................... 63 92 | 155 223
Corporate & Other .................. 19 7 | 63 52
------ ------ | ------ ------
Total Capital and Exploration |
Expenditures (a).............. $1,119 $2,750 | $2,897 $4,705
====== ====== | ====== ======
Memo: |
Exploration Expenses charged |
to income, included above |
- U.S. .. $ 27 $ 6 | $ 53 $ 39
- Intl. . 75 137 | 223 252
------ ------ | ------ ------
Total Exploration Expenses ..... $ 102 $ 143 | $ 276 $ 291
------ ------ | ------ ------
- ----------------------------------------------------------------------------
(a) Current year totals include $1,394 million for the acquisition of Ampolex.
In addition to the above Capital and Exploration spending, Mobil also acquired
a 25% equity interest in the Tengiz oil field in Kazakstan (in the second
quarter) for $1.1 billion, of which about half has been paid to date, and the
balance will be settled in installments through the year 2000, upon reaching
certain project milestones.
Return on average shareholders' equity was 16.7% for the twelve month period
ended September 30, 1996, compared with 13.5% for the calendar year 1995. Return
on average capital employed for the twelve month period ended September 30,
1996, was 12.7%, compared with 10.9% for the calendar year 1995.
Whenever external financing is needed, Mobil and its subsidiary companies have
ready access to multiple capital markets, including significant bank credit
lines.
At September 30, 1996, Mobil had effective shelf registration statements on
file with the SEC permitting the offer and sale of $1,815 million of debt
securities. Shelf registrations allowing the issuance of U.S. $531 million of
Euro-Medium-Term Notes and bonds having a principal amount of 30 billion
Japanese yen were also in place.
MOBIL - 14 -
<PAGE>
CURRENT DEVELOPMENTS
Gulf of Mexico
During 1995, Mobil acquired 40% interest in two deepwater Gulf of Mexico
developments -- the Cooper field in Garden Banks and the Green Canyon area's
Allegheny field. Recent performance of both projects has been disappointing.
Original projections for the Cooper field called for ultimate recovery of 60-90
million barrels of oil equivalent (MMBOE) (Mobil's share 24-36 MMBOE). Original
projections for the Allegheny field were for recovery of about 120 MMBOE
(Mobil's share 48 MMBOE). Mobil's combined net book value for both fields at
September 30, 1996, was $233 million. Ultimate production and recovery for both
projects are currently being reevaluated following recent drilling activities at
the Allegheny field and recent drilling and production performance at the Cooper
field. Ultimate production and reserves are expected to be lower than originally
projected at both fields. Lower cost development scenarios are also being
progressed for the Allegheny project which will likely delay start-up from late
1998 to near 2000. Mobil is working with Enserch (operator) to determine the
best course of action to improve the economics of both projects and continues to
closely monitor their progress.
MOBIL - 15 -
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings.
Environmental Litigation.
Mobil periodically receives notices from the Environmental Protection Agency
(EPA) or equivalent agencies at the state level that Mobil is a "potentially
responsible party" under Superfund or equivalent state legislation with respect
to various waste disposal sites. The majority of these sites are either still
under investigation by the EPA or the state agencies concerned, or under
remediation, or both. In certain instances, Mobil and other potentially
responsible parties have been named in court or administrative proceedings by
federal or state agencies seeking the cleanup of these sites. Mobil has also
been named as a defendant in various suits brought by private parties alleging
injury from disposal of wastes at these sites. The ultimate impact of these
proceedings on the business or accounts of Mobil cannot be predicted at this
time due to the large number of other potentially responsible parties and the
speculative nature of cleanup cost estimates, but based on our long experience
in managing environmental matters, we do not anticipate that the aggregate level
of future remediation costs will increase above recent levels so as to
materially and adversely affect our consolidated financial position or
liquidity.
On September 27, 1996, the EPA filed an administrative complaint with the
USEPA hearing clerk alleging that Mobil Oil Corporation had violated the Toxic
Substances Control Act by failing to submit to EPA copies of several studies
regarding toxic substances. The penalty sought is $303,000.
On September 30, 1996, a previously-reported proceeding brought by the EPA
against Mobil Oil Corporation on August 8, 1995 was settled. The EPA had alleged
that the operations of Mobil Oil Corporation's Chalmette, Louisiana refinery
violated various Clean Air Act requirements and various requirements of the
Emergency Preparedness Community Right to Know Act relating to the submission of
forms. The EPA had proposed a penalty of $281,991; the proceeding was settled by
a payment of $163,945.
The foregoing proceedings are not of material importance in relation to
Mobil's accounts and are described in compliance with SEC rules requiring
disclosure of such proceedings although not material.
Other Than Environmental Litigation.
Mobil and its subsidiaries are engaged in various litigations and have a
number of unresolved claims pending. While the amounts claimed are substantial
and the ultimate liability in respect of such litigations and claims cannot be
determined at this time, Mobil is of the opinion that such liability, to the
extent not provided for through insurance or otherwise, is not likely to be of
material importance in relation to its accounts.
Mobil has provided in its accounts for items and issues not yet resolved based
on management's best judgement.
MOBIL - 16 -
<PAGE>
Item 2. Changes in Securities.
None.
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
Item 5. Other Information.
None.
Item 6. Exhibits and Reports on Form 8-K.
Exhibits.
The following exhibits are filed with this report:
11. Computation of Earnings Per Common Share
12. Computation of Ratio of Earnings to Fixed Charges
27. Financial Data Schedule (electronic only)
Reports on Form 8-K.
Mobil filed the following Current Reports on Form 8-K during and subsequent
to the end of the third quarter:
Date of 8-K Description of 8-K
July 22, 1996 Submitted a copy of the Mobil News Release issued July 22,
1996, reporting Mobil's estimated earnings for the second
quarter of 1996.
August 7, 1996 Submitted a news release issued August 7, 1996, reporting
that BP and Mobil had received approval from the European
Commission to combine the two companies' operations in the
marketing and refining of fuels and lubricants.
September 3, 1996 Submitted the "Form of Note" in
connection with the offering and sale of
Mobil Oil Corporation Employee Stock
Ownership Plan Trust Medium-Term Notes.
October 21, 1996 Submitted a copy of the Mobil News Release issued October
21, 1996, reporting Mobil's estimated earnings for the
third quarter of 1996.
MOBIL - 17 -
<PAGE>
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.
REGISTRANT MOBIL CORPORATION
BY /S/ M. F. Keeth
NAME AND TITLE M. F. Keeth
Controller;
Principal Accounting Officer
DATE November 12, 1996
MOBIL - 18 -
<PAGE>
EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
- ------- ----------------
11. Computation of Earnings Per Electronic
Common Share
12. Computation of Ratio of Earnings Electronic
to Fixed Charges
27. Financial Data Schedule Electronic
MOBIL - 19 -
<PAGE>
Exhibit 11.
MOBIL CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(In millions, except for per-share amounts;
number of shares in thousands)
For the Three Months
Ended September 30,
--------------------
Primary 1995 1996
- ------- -------- --------
Net income ........................................... $ 786 $ 769
Less dividends on preferred stock .................... 14 13
-------- --------
Net income applicable to common shares ............... $ 772 $ 756
======== ========
Weighted average number of primary common shares
Outstanding ........................................ 395,536 393,925
Issuable on assumed exercise of stock options ...... 4,276 4,835
-------- --------
Total ........................................... 399,812 398,760
======== ========
Primary earnings per common share .................... $ 1.93 $ 1.90
======== ========
Fully Diluted
- -------------
Net income ........................................... $ 786 $ 769
Less additional contribution to ESOP ................. 5 4
-------- --------
Adjusted net income applicable to common shares ...... $ 781 $ 765
======== ========
Weighted average number of primary common shares ..... 399,812 398,760
Increment to assumed exercise of stock options to
reflect maximum dilutive effect .................... 166 124
Assumed conversion of preferred stock ................ 9,369 8,919
-------- --------
Total ........................................... 409,347 407,803
======== ========
Fully diluted earnings per common share .............. $ 1.91 $ 1.88
======== ========
- -----------
This Exhibit is included to show that dilution of earnings per common share is
immaterial and therefore not necessary for presentation on the Consolidated
Statement of Income.
MOBIL - 20 -
<PAGE>
Exhibit 11. (concluded)
MOBIL CORPORATION
COMPUTATION OF EARNINGS PER COMMON SHARE
(In millions, except for per-share amounts;
number of shares in thousands)
For the Nine Months
Ended September 30,
Primary 1995 1996
Net income ....................................... $ 1,601 $ 2,288
Less dividends on preferred stock ................ 42 40
-------- --------
Net income applicable to common shares ........... $ 1,559 $ 2,248
======== ========
Weighted average number of primary common shares
Outstanding .................................... 395,726 394,221
Issuable on assumed exercise of stock options .. 3,835 4,805
-------- ---------
Total ...................................... 399,561 399,026
======== ========
Primary earnings per common share................. $ 3.90 $ 5.63
======== ========
Fully Diluted
Net Income ....................................... $ 1,601 $ 2,288
Less additional contribution to ESOP ............. 17 14
-------- --------
Adjusted net income applicable to common shares .. $ 1,584 $ 2,274
======== ========
Weighted average number of primary common shares . 399,561 399,026
Increment to assumed exercise of stock options to
reflect maximum dilutive effect ................ 608 154
Assumed conversion of preferred stock ............ 9,369 8,919
-------- --------
Total ...................................... 409,538 408,099
======== ========
Fully diluted earnings per common share........... $ 3.87 $ 5.57
======== ========
- -----------
This Exhibit is included to show that dilution of earnings per common share is
immaterial and therefore not necessary for presentation on the Consolidated
Statement of Income.
MOBIL - 21 -
<PAGE>
Exhibit 12.
MOBIL CORPORATION
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(In millions)
Nine
Months
Ended
Year Ended December 31, September 30,
----------------------------------------------------
1991 1992 1993 1994 1995 1996
------ ------ ------ ------ ------ ------
Income Before Change in
Accounting Principle(s).. $1,920 $1,308 $2,084 $1,759 $2,376 $2,288
Add:
Income taxes .............. 2,105 1,567 1,931 1,919 2,015 2,427
Portion of rents
representative of
interest factor ......... 344 319 339 340 368 276
Interest and debt
discount expense ........ 713 612 529(a) 461 467 332
Earnings (greater) less
than dividends from
equity affiliates........ (151) 36 265 (40) (51) 111
------ ------ ------ ------ ------ ------
Income as Adjusted ........ $4,931 $3,842 $5,148 $4,439 $5,175 $5,434
====== ====== ====== ====== ====== ======
Fixed Charges:
Interest and debt
discount expense ........ $ 713 $ 612 $ 529(a)$ 461 $ 467 $ 332
Capitalized interest ...... 20 42 42 37 47 61
Portion of rents
representative of
interest factor ......... 344 319 339 340 368 276
------ ------ ------ ------ ------ ------
Total Fixed Charges ....... $1,077 $ 973 $ 910 $ 838 $ 882 $ 669
====== ====== ====== ====== ====== ======
Ratio of Earnings to
Fixed Charges ........... 4.6 3.9 5.7(a) 5.3 5.9 8.1
====== ====== ====== ====== ====== ======
Note:
For the years ended December 31, 1991, 1992, 1993, 1994 and 1995 and the nine
months ended September 30, 1996, Fixed Charges exclude $42 million, $37 million,
$31 million, $37 million, $28 million, and $19 million, respectively, of
interest expense attributable to debt issued by the Mobil Oil Corporation
Employee Stock Ownership Plan Trust and guaranteed by Mobil.
(a) Excludes the favorable effect of $205 million of interest benefits from the
resolution of prior-period tax issues.
MOBIL - 22-
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
ART. 5 FDS FOR PERIOD ENDED SEPTEMBER 30, 1996 10-Q
This schedule contains summary financial information extracted
from the September 30, 1996 Form 10-Q, and is qualified in its
entirety by reference to such financial statements.
</LEGEND>
<CIK> 0000067182
<NAME> MOBILCORP/JNICHOLS
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> SEP-30-1996
<CASH> 706
<SECURITIES> 0
<RECEIVABLES> 7,561
<ALLOWANCES> 0
<INVENTORY> 3,454
<CURRENT-ASSETS> 12,637
<PP&E> 55,311
<DEPRECIATION> 27,980
<TOTAL-ASSETS> 46,227
<CURRENT-LIABILITIES> 14,993
<BONDS> 4,925
0
693
<COMMON> 890
<OTHER-SE> 17,213
<TOTAL-LIABILITY-AND-EQUITY> 46,227
<SALES> 57,642<F1>
<TOTAL-REVENUES> 58,546<F1>
<CGS> 33,687
<TOTAL-COSTS> 35,590
<OTHER-EXPENSES> 14,368
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 332
<INCOME-PRETAX> 4,715
<INCOME-TAX> 2,427
<INCOME-CONTINUING> 2,288
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2,288
<EPS-PRIMARY> 5.63
<EPS-DILUTED> 5.57
<FN>
<F1>SALES AND TOTAL REVENUES INCLUDE $6,685 MILLION OF EXCISE AND
STATE GASOLINE TAXES
</FN>
</TABLE>
