SEC File No 33-18130
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 11-K
ANNUAL REPORT
Pursuant to Section 15(d) of the
Securities Exchange Act of 1934
For the fiscal year ended January 31, 1998
EMPLOYEES SAVINGS PLAN OF
MOBIL OIL CORPORATION
(Full title of the plan)
MOBIL CORPORATION
3225 Gallows Road, Fairfax, Virginia
22037-0001
Telephone: (703) 846-3000
(Name of issuer of the securities held pursuant to the plan and
the address of its principal executive office)
13-2850309
(IRS Employer Identification No.)
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
FORM 11-K
FOR THE FISCAL YEARS ENDED
JANUARY 31, 1997 AND 1998
TABLE OF CONTENTS
Page
Report of Ernst & Young LLP, Independent Auditors.................. 1
Statements of Net Assets Available for Benefits.................... 2-3
Statements of Changes in Net Assets Available for Benefits......... 4-5
Notes to Plan Financial Statements................................. 6
Supplemental Information:
Schedule of Assets Held for Investment Purposes.................. 13
Schedule of Reportable Transactions.............................. 14
Signature.......................................................... 15
Exhibit Index...................................................... 16
Exhibit 23 - Consent of Ernst & Young LLP, Independent Auditors.... 17
A schedule of party-in-interest transactions has not been presented because
there were no such prohibited transactions.
<PAGE>
REPORT OF INDEPENDENT AUDITORS
Board of Directors
Mobil Oil Corporation
We have audited the accompanying statements of net assets available for benefits
of the Employees Savings Plan of Mobil Oil Corporation (the Plan) as of January
31, 1997 and 1998, and the related statements of changes in net assets available
for benefits for the years then ended. These financial statements are the
responsibility of the Plan's management. Our responsibility is to express an
opinion on these financial statements based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the net assets available for benefits of the Plan at
January 31, 1997 and 1998, and the changes in its net assets available for
benefits for the years then ended, in conformity with generally accepted
accounting principles.
Our audits were made for the purpose of forming an opinion on the basic
financial statements taken as a whole. The accompanying supplemental schedules
of assets held for investment purposes as of January 31, 1998 and reportable
transactions for the year ended January 31, 1998, are presented for purposes of
complying with the Department of Labor's Rules and Regulations for Reporting and
Disclosure under the Employee Retirement Income Security Act of 1974, and are
not a required part of the basic financial statements. The supplemental
schedules have been subjected to the auditing procedures applied in our audits
of the basic financial statements and, in our opinion, are fairly stated in all
material respects in relation to the basic financial statements taken as a
whole.
Fairfax, Virginia Ernst & Young LLP
April 15, 1998
- 1 -
<PAGE>
<TABLE>
<CAPTION>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JANUARY 31, 1997
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MOBIL LONG-
MOBIL ESOP TERM OTHER OTHER PARTIC-
COMMON PREFERRED FIXED JENNISON LOWER HIGHER IPANT
STOCK STOCK INCOME EQUITY RISK RISK LOAN
FUND FUND FUND FUND FUNDS FUNDS FUND TOTAL
----------------------------------------------------------------------
Investments, at
current value $1,975 $1,152 $800 $710 $403 $201 $87 $5,328
Contributions receivable:
Company 1 163 - - - - - 164
Participants 4 - 3 2 2 1 - 12
Dividends and interest
receivable - 22 - - - - 1 23
Loan repayments
receivable - - - - - - 2 2
Cash - - - - 11 - - 11
----------------------------------------------------------------------
Total assets 1,980 1,337 803 712 416 202 90 5,540
----------------------------------------------------------------------
Accrued interest
payable - (19) - - - - - (19)
ESOP debt - (526) - - - - - (526)
----------------------------------------------------------------------
Total liabilities - (545) - - - - - (545)
----------------------------------------------------------------------
Net assets available
for benefits $1,980 $ 792 $803 $712 $416 $202 $90 $4,995
======================================================================
See accompanying notes
</TABLE>
- 2 -
<PAGE>
<TABLE>
<CAPTION>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JANUARY 31, 1998
(millions of dollars)
<S>
<C> <C> <C> <C> <C> <C> <C> <C>
MOBIL LONG-
MOBIL ESOP TERM OTHER OTHER PARTIC-
COMMON PREFERRED FIXED JENNISON LOWER HIGHER IPANT
STOCK STOCK INCOME EQUITY RISK RISK LOAN
FUND FUND FUND FUND FUNDS FUNDS FUND TOTAL
----------------------------------------------------------------------
Investments, at
current value $2,093 $1,168 $699 $856 $429 $220 $82 $5,547
Contributions receivable:
Company 1 171 - - - - - 172
Participants 3 - 1 1 1 1 - 7
Dividends and interest
receivable - 21 - - - - 1 22
Loan repayments
receivable - - - - - - 2 2
Cash - - - - 5 - - 5
----------------------------------------------------------------------
Total assets 2,097 1,360 700 857 435 221 85 5,755
----------------------------------------------------------------------
Accrued interest
payable - (17) - - - - - (17)
ESOP debt - (497) - - - - - (497)
----------------------------------------------------------------------
Total liabilities - (514) - - - - - (514)
----------------------------------------------------------------------
Net assets available
for benefits $2,097 $ 846 $700 $857 $435 $221 $85 $5,241
======================================================================
See accompanying notes
</TABLE>
- 3 -
<PAGE>
<TABLE>
<CAPTION>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED JANUARY 31, 1997
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MOBIL LONG-
MOBIL ESOP TERM OTHER OTHER PARTIC-
COMMON PREFERRED FIXED JENNISON LOWER HIGHER IPANT
STOCK STOCK INCOME EQUITY RISK RISK LOAN
FUND FUND FUND FUND FUNDS FUNDS FUND TOTAL
----------------------------------------------------------------------
Contributions
Company $ 18 $ 39 $ - $ - $ - $ - $ - $ 57
Participants 36 - 16 20 11 7 - 90
Investment income
Dividends 67 53 - - - - - 120
Interest and other
investment income - - 39 - 50 21 6 116
Realized and unrealized
gains and (losses)
on investments 341 183 - 161 4 3 - 692
----------------------------------------------------------------------
Total investment income 408 236 39 161 54 24 6 928
----------------------------------------------------------------------
Interest on ESOP debt - (47) - - - - - (47)
Distributions to
participants (227) (38) (178) (53) (90) (6) (9) (601)
Transfers in (Notes 1 & 5) 11 - 23 7 21 8 1 71
Transfers out (Note 1) (1) - - (1) - - - (2)
Inter-fund transfers (229) (15) 332 9 (176) 83 (4) -
----------------------------------------------------------------------
Net increase in net
assets available
for benefits 16 175 232 143 (180) 116 (6) 496
Net assets available for benefits:
At beginning of year 1,964 617 571 569 596 86 96 4,499
----------------------------------------------------------------------
At end of year $1,980 $792 $803 $712 $416 $202 $90 $4,995
======================================================================
See accompanying notes
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED JANUARY 31, 1998
(millions of dollars)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MOBIL LONG-
MOBIL ESOP TERM OTHER OTHER PARTIC-
COMMON PREFERRED FIXED JENNISON LOWER HIGHER IPANT
STOCK STOCK INCOME EQUITY RISK RISK LOAN
FUND FUND FUND FUND FUNDS FUNDS FUND TOTAL
--------------------------------------------------------------------
Contributions
Company $ 17 $ 29 $ - $ - $ - $ - $ - $ 46
Participants 34 - 9 18 11 9 - 81
Investment income
Dividends 64 52 - - - - - 116
Interest and other
investment income - - 47 - 40 5 7 99
Realized and unrealized
gains and losses on
investments 90 51 - 194 9 6 - 350
----------------------------------------------------------------------
Total investment income 154 103 47 194 49 11 7 565
----------------------------------------------------------------------
Interest on ESOP debt - (43) - - - - - (43)
Distributions to
participants (154) (24) (130) (47) (45) (13) (4) (417)
Transfers in (Notes 1 & 5) 3 - 5 2 3 1 - 14
Transfers out - - - - - - - -
Inter-fund transfers 63 (11) (34) (22) 1 11 (8) -
----------------------------------------------------------------------
Net increase in net
assets available
for benefits 117 54 (103) 145 19 19 (5) 246
Net assets available for benefits:
At beginning of year 1,980 792 803 712 416 202 90 4,995
----------------------------------------------------------------------
At end of year $2,097 $846 $700 $857 $435 $221 $85 $5,241
======================================================================
See accompanying notes
</TABLE>
- 5 -
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1997 and 1998
Note 1. Description of the Plan
Eligibility - Through December 31, 1997, regular employees of Mobil Oil
Corporation and its participating affiliates (Mobil) generally became eligible
to participate in the Employees Savings Plan of Mobil Oil Corporation (the Plan)
on the first of the month after completion of one year of service. Effective
January 1, 1998, most employees are immediately eligible to participate in the
Plan. Films division employees hired after April 1, 1998 or later become
eligible to participate in the Plan on the first of the month after completing
one year of service.
Concurrent with the sale to Tenneco of Mobil Chemical Company's Plastics
Division in November 1995, the following provisions were made for its Plan
participants: (i) all accounts became fully vested, (ii) participants were
allowed under certain conditions to transfer their account balances directly to
a Tenneco plan during a window period from April 1, 1996 through September 30,
1996, (iii) a lump sum distribution window was opened through December 31, 1997,
and (iv) participants became eligible to initiate loans during the five year
period ending November 17, 2000. During the Plan years ended January 31, 1997,
participants transferred from their accounts a total $2,177,733 to the Tenneco
Plan.
On October 1, 1996, the Station Operators, Inc. Retirement Savings Plan of Mobil
Oil Corporation (the SOI Plan) was merged into the Plan. Participants in the SOI
Plan became participants in the Plan, except that they became ineligible to
receive Mobil's contributions in the Plan's 401(k) Account. The merger resulted
in the transfer of net assets totaling $5,188,040 to the Plan.
On November 1, 1996, Mobil's Pasadena Hourly Thrift Plan (the Pasadena Plan) was
merged into the Plan. Participants in the Pasadena plan became participants in
the Plan, except that they became ineligible to receive Mobil's contributions in
the Plan's 401(k) Account, and became eligible to receive a 2% ESOP allocation
in the Plan's Savings Account. The merger resulted in the transfer of net assets
totalling $1,947,028 to the Plan.
Contributions - The Plan is composed of two parts:
Savings Account - Employees can make after-tax contributions to the Savings
Account of the Plan, subject to certain tax law limitations. The maximum
permitted employee contribution to the Savings Account is 15% of benefits
bearing pay (plus certain make-up contributions). Mobil contributes sufficient
funds to provide an allocation of Mobil's Series B ESOP Convertible Preferred
Stock (Mobil ESOP Convertible Preferred Stock) equal to 4% of employees'
benefits bearing pay (except for (i) Pasadena Hourly participants, whose
allocation percentage is 2%, and (ii) Films division participants, whose
allocation percentage has been increased from 4% to 5% for the year ended
January 31, 1998, and decreased to 4% for the year ended January 31, 1999), plus
additional Mobil ESOP Convertible Preferred Stock in lieu of preferred cash
dividends on such stock.
401(k) Account - This includes employee pre-tax contributions and Mobil's
contributions of 2% of base pay (3% for pre-January 1, 1969 employees). SOI and
Pasadena Hourly participants are ineligible to receive Mobil contributions. An
employee can elect to receive a portion or all of Mobil's contribution in cash.
The combined Mobil and employee contributions to this account cannot exceed 15%
of the employee's eligible compensation. Federal regulations governing the
401(k) Account limit in certain cases the combined Mobil and employee 401(k)
contributions to less than 15% of eligible compensation.
- 6 -
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1997 and 1998
Note 1. Description of the Plan - continued
Effective January 1, 1999, Mobil's 4% contribution rate to the ESOP will
increase to 6% of benefits bearing pay, and Mobil's contribution to the 401(k)
Account will be discontinued, except for pre-January 1, 1969 employees who will
continue to have 1% contributed unless the employee elects to receive the 1% in
cash.
Vesting & other - Mobil's contributions to the Savings Account and related
investment income become vested upon completion of five years of employment.
Mobil's contributions to the 401(k) account and all employee contributions and
related earnings are immediately vested.
Effective January 1, 1999, participants will (i) have the option to receive
dividends from Mobil Common Stock in the Plan in cash without a withdrawal
penalty, and (ii) receive additional contributions equal to 15% of the amount of
dividends they receive on Mobil Common Stock, subject to certain limitations.
The terms of the Plan are more fully described in the Summary Plan Description,
which is furnished to each participant.
Note 2. Administration of Plan Assets
The Plan is administered by Mobil Oil Corporation acting through fiduciaries
designated by its Board of Directors to serve at its discretion. Merrill Lynch,
Pierce, Fenner and Smith Inc. is the record-keeper for the Plan. Merrill Lynch
Trust Company (Merrill Lynch) is the trustee, with the exception of the ESOP
portion of the Plan, of which Bankers Trust Company is the trustee.
Note 3. Major Accounting Policies
Security valuation - Mobil Common Stock is valued at the Plan's average sales
price for the day (based on the New York Stock Exchange), on the day of
valuation or, lacking any sales on that day, at the most recent bid quotation.
Mobil's ESOP Convertible Preferred Stock units (1/100th of a share) are stated
at current value, which is the higher of the liquidation value or current market
value. Liquidation value is the minimum price guaranteed by Mobil, $38.875 per
unit. Current market value is defined as the average sales price for Mobil
Common Stock as defined in the previous paragraph.
Long-Term Fixed Income Funds and the Merrill Lynch Floating Rate Long-Term Fixed
Income Fund (LTFI)are stated at current value, which approximates fair value,
representing the original cost, plus interest (based upon the crediting rates of
the underlying contracts) reduced by transfers out and withdrawals.
The Aim Charter Fund, the Merrill Lynch Global Allocation Fund, the Merrill
Lynch Institutional Fund, the Franklin U.S. Government Securities Fund, the MFS
Emerging Growth Fund, the Templeton Foreign Fund and the Templeton Developing
Markets Trust are publicly traded and valued at the closing sale price of the
last business day of the Plan year.
The Jennison Fund and the Merrill Lynch Equity Index Trust are stated at current
value, which approximates the fair value of the funds' underlying securities and
encompass dividends, interest, gains and losses and administration fees in the
values of each unit.
- 7 -
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1997 and 1998
Note 3. Major Accounting Policies - continued
Participant loans represent the outstanding principal balances of the loans and
are valued at cost, which approximates current value.
Additional descriptions of the investment choices in the Plan are available to
the participants from Merrill Lynch.
Investment income - Dividends from Mobil Common Stock are accrued on the ex-
dividend date.
The minimum annual dividend on a unit of Mobil ESOP Convertible Preferred Stock
accrues on a monthly basis, and is set at $3.00 per year. If the aggregate
declared dividends on a share of Mobil Common Stock for the six months before a
semi-annual dividend on the Mobil ESOP Convertible Preferred Stock exceed $3.00
per share, the semi-annual dividend on a unit of the Mobil ESOP Convertible
Preferred Stock will be at least the same as such aggregate dividends on a share
of Mobil Common Stock.
All other earnings are stated on an accrual basis. Investment income from all
sources is stated net of investment management, trustee, audit and other third
party fees of approximately $2,427,000 and $2,782,000 for the years ended
January 31, 1997 and 1998, respectively.
Security transactions are recorded on a trade date basis. Realized and
unrealized gains and losses are based on an average cost method.
Forfeitures - Amounts forfeited (non-vested Mobil contributions and accumulated
earnings thereon) under the Plan are used to reduce Mobil contributions.
Unapplied forfeitures at January 31 are accounted for as reductions in Mobil
contributions.
Reclassifications - The financial statements for the year ended January 31,
1997, have been reclassified to conform to the 1998 presentation.
Use of estimates - The preparation of the financial statements in accordance
with generally accepted accounting principles requires Mobil to make certain
estimates and assumptions affecting amounts in the financial statements. Actual
results could differ from these estimates and assumptions.
Note 4. Employee Stock Ownership Plan (ESOP)
In November 1989, the ESOP trust, supported by a Mobil guarantee, privately
placed $800,000,000 of floating interest rate notes due November 22, 2004, and
used the proceeds to purchase 205,788 shares of Mobil ESOP Convertible Preferred
Stock at a price equal to liquidation value, or $3,887.50 per share. Each share
is convertible into 100 shares of Mobil Common Stock and is entitled to 100
votes.
On February 27, 1990, the ESOP trust issued and Mobil guaranteed $800,000,000 of
9.17% Sinking Fund Debentures due February 29, 2000, pursuant to Rule 415 under
the Securities Act of 1933. The ESOP trust used the proceeds to retire the
floating interest rate notes due November 22, 2004.
- 8 -
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1997 and 1998
Note 4. Employee Stock Ownership Plan (ESOP) - continued
The ESOP trust has a shelf registration on file with the Securities and Exchange
Commission that would, as of January 31, 1998, permit the offer and sale of $115
million of debt securities, guaranteed by Mobil, pursuant to Rule 415. Through
January 31, 1998, the ESOP trust issued and Mobil guaranteed an aggregate of
$185 million of medium-term notes under this shelf registration. The proceeds of
sale of these notes were used to retire identical principal amounts of existing
debt, and the proceeds of the issue and sale of any other debt securities issued
and sold under this shelf registration would be used for the same purpose.
Interest on these medium-term notes is due semi-annually. A summary of these
medium-term notes is as follows:
Date of Interest Maturity
Issuance Amount Rate Date
-------- ------------ -------- --------
2/28/94 $ 25,000,000 6.220% 2/28/02
8/31/94 15,000,000 7.550% 2/28/02
2/28/95 30,000,000 8.225% 8/31/04
8/31/96 25,000,000 6.700% 8/31/00
8/31/96 15,000,000 6.625% 2/28/01
2/28/97 25,000,000 6.250% 8/31/01
2/28/97 10,000,000 6.300% 9/03/02
9/02/97 40,000,000 6.375% 8/31/01
------------
$185,000,000
============
Principal and interest payments on the debentures and medium term notes are due
semi-annually. Fiscal year annual principal maturities are as follows:
$115,800,000 in 1999; $135,600,000 in 2000; $85,600,000 in 2001; $80,000,000 in
2002; $50,000,000 in 2003; and $30,000,000 thereafter. Only unallocated assets
held in the ESOP trust are subject to recourse by creditors of the ESOP trust.
On March 2, 1998, the ESOP trust issued and Mobil guaranteed medium term notes
of $25,000,000 at 5.875%, due September 3, 2002, and $20,000,000 at 5.900%, due
February 28, 2003.
The ESOP trust uses dividends on the Mobil ESOP Convertible Preferred Stock,
together with contributions from Mobil, to repay the ESOP debt (principal and
interest). The amount of ESOP debt repaid each Plan year results in the release
of shares of Mobil ESOP Convertible Preferred Stock to be available for
allocation to Plan participants' accounts. Mobil contributes semi-annually
sufficient funds to ensure that each participant's account is credited with
Mobil ESOP Convertible Preferred Stock as discussed in Note 1.
Plan participants earned 780,876 and 623,668 pay-based units of Mobil ESOP
Convertible Preferred Stock, plus credit for fractional units, for the fiscal
years ended January 31, 1997 and 1998, respectively. The aggregate fair values
of these units were $44,475,803 in 1997 and $43,921,110 in 1998. In addition,
Plan participants earn units of Mobil ESOP Convertible Preferred Stock equal to
the value of the preferred dividends on units allocated to participant accounts.
The units of Mobil ESOP Convertible Preferred Stock earned by dividends were
429,594 with a fair value of $24,513,138 in 1997, and 354,055 with a fair value
of $25,109,583 in 1998.
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<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1997 and 1998
Note 4. Employee Stock Ownership Plan (ESOP) - continued
As of January 31, 1997 and 1998, the Plan held 9,270,402 and 8,292,678 units,
respectively, of Mobil ESOP Convertible Preferred Stock, which have yet to be
earned by employees. The current values of these unearned units were
$608,370,131 in 1997 and $568,048,443 in 1998. Net assets available for benefits
at January 31, 1997 and 1998, included unrealized gains on the unallocated units
of $247,983,254 and $245,670,586, respectively, since the ESOP's inception.
As a result of the two-for-one split of Mobil Common Stock in May 1997, the
number of outstanding shares of Mobil ESOP Convertible Preferred Stock was
doubled and the dividend rate and liquidation price were halved. All references
in this report to the number of shares of such stock, dividend rate and
liquidation price reflect, in some cases as a result of retroactive adjustments,
these stock split- related changes.
Note 5. Contributions and Distributions
Mobil's contributions are net of forfeitures of $650,123 and $229,409 for the
years ended January 31, 1997 and 1998, respectively.
Transfers in include participant-initiated rollovers of certain distributions
from other tax-qualified plans into the Savings Account, and the merger of other
Mobil plans into the Plan (see Note 1).
The Plan provides for the payment of vested benefits upon termination, death,
disability or retirement.
Note 6. Participant Loans
The Plan allows participants to borrow against their accounts in the trust. Loan
interest rates are reviewed quarterly and determined for new loans, if
appropriate, based on the "Bank Prime Loan" rate for the last business day of
the second preceding calendar month, as published in Federal Reserve Statistical
Release H.15. The term of loans may be any monthly increment between 12 and 60
months.
The maximum loan amount permitted is the lesser of (i) one-half the current
value of the vested portion of the participant's account less any outstanding
loan balance, or (ii) $50,000 less the maximum outstanding loan balance in the
preceding twelve months.
The Plan permits employees whose employment with Mobil was terminated as a
result of the sale of operations in Nichols, Florida, the sale of the Consumer
Products Division, Mobil Natural Gas Inc.'s asset sale and related joint venture
and Mobil's entering into the Aera Energy joint venture to continue repaying
their outstanding loans in accordance with the existing repayment schedules.
Note 7. Plan Investments
At January 31, 1997 and 1998, the percentage of the Plan's net assets that were
investments in or receivables from Mobil was 66% and 65%, respectively.
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<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1997 and 1998
Note 7. Plan Investments - continued
Investments in the Plan as of January 31, 1997 were as follows ($ millions):
Current
Cost Value
-------- --------
Mobil Common Stock.......................... $ 917 $1,975
Mobil ESOP Convertible Preferred Stock...... 683 1,152
Merrill Lynch Floating Rate Long-Term
Fixed Income Fund......................... 800 800
Jennison Equity Fund........................ 359 710
Other lower risk funds - less than 5% of Plan net assets:
Merrill Lynch Institutional Fund.......... 147 147
Merrill Lynch Global Allocation Fund...... 77 82
Merrill Lynch Equity Index Trust.......... 47 60
Franklin U.S. Government Securities Fund.. 56 57
AIM Charter Fund.......................... 49 57
Other higher risk funds - less than 5% of Plan net assets:
MFS Emerging Growth Fund.................. 99 113
Templeton Foreign Fund.................... 50 53
Templeton Developing Markets Trust........ 31 35
Participant Loans........................... 87 87
------ ------
$3,402 $5,328
====== ======
Investments in the Plan as of January 31, 1998 were as follows ($ millions):
Current
Cost Value
-------- --------
Mobil Common Stock.......................... $1,086 $2,093
Mobil ESOP Convertible Preferred Stock...... 663 1,168
Merrill Lynch Floating Rate Long-Term
Fixed Income Fund......................... 699 699
Jennison Equity Fund........................ 371 856
Other lower risk funds - less than 5% of Plan net assets:
Merrill Lynch Institutional Fund.......... 114 114
Merrill Lynch Global Allocation Fund...... 82 84
Merrill Lynch Equity Index Trust.......... 68 94
Franklin U.S. Government Securities Fund.. 70 71
AIM Charter Fund.......................... 58 66
Other higher risk funds - less than 5% of Plan net assets:
MFS Emerging Growth Fund.................. 100 126
Templeton Foreign Fund.................... 63 61
Templeton Developing Markets Trust........ 42 33
Participant Loans........................... 82 82
------ ------
$3,498 $5,547
====== ======
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<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1997 and 1998
Note 7. Plan Investments - continued
The Plan's investment in Mobil Common Stock at January 31, 1997 and 1998
represents 3.8% and 3.9% of the outstanding shares, respectively.
The average crediting interest rate of the Merrill Lynch Floating Rate Long-Term
Fixed Income Fund for the years ended January 31, 1997 and 1998 was 6.5% for
both years. The annualized crediting interest rate at January 31, 1997 and 1998
was also 6.5% for both years. Crediting rates fluctuate with the activities of
the underlying contracts. This investment choice has no fixed term nor a minimum
crediting interest rate in that context.
Note 8. Tax Status
On January 9, 1996, the Internal Revenue Service (IRS) determined that the Plan,
as amended to include the ESOP, continued to be a qualified plan under Section
401(a) of the Internal Revenue Code (the Code), that the ESOP portion qualifies
as an employee stock ownership plan under section 4975(e)(7) of the Code, and
that the Trust thereunder (the Trust) is exempt from Federal income tax under
Section 501(a) of the Code.
On February 10, 1998, Mobil submitted an application to the IRS seeking an
updated determination of the qualified status of the plan, covering Plan changes
made since 1996.
Note 9. Plan Termination
While Mobil has not expressed an intent to terminate the Plan, it may do so at
any time, subject to the provisions of the Employee Retirement Income Security
Act (ERISA). In the event the Plan is terminated, all participants will become
fully vested in their accounts and the net assets of the Plan shall be
distributed among the participants in accordance with ERISA.
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<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JANUARY 31, 1998
<S> <C> <C> <C>
Description of Investment, CURRENT
Identity of Issue, Borrower, Including Maturity Date, Rate of COST VALUE
Lessor or Similar Party Interest, Par or Maturity Value (000's) (000's)
- ----------------------------------------------------------------------------------------------------
Corporate Stocks:
Mobil Common Stock* 30,551,202 shares $1,086,361 $2,092,757
Mobil ESOP Convertible
Preferred Stock* 170,520 shares 662,898 1,168,064
Registered Investment Companies:
Merrill Lynch Institutional Fund* 114,175,494 shares 114,175 114,175
Massachusetts Financial Services Company
MFS Emerging Growth Fund 3,380,831 shares 100,327 125,868
Merrill Lynch Global Allocation Fund* 5,812,812 shares 81,681 83,588
Franklin Custodian Funds, Inc. Franklin
U.S. Government Securities Fund 10,262,678 shares 69,687 71,326
AIM Charter Fund 5,345,718 shares 58,323 66,233
Franklin Templeton Group Templeton
Foreign Fund 6,148,205 shares 62,773 61,421
Franklin Templeton Group Templeton
Developing Markets Trust 2,776,279 shares 41,801 32,761
Common Collective Trust:
Merrill Lynch Equity Index Trust* 1,420,030 shares 67,915 93,848
Other investments:
Jennison Associates Capital Corporation
Jennison Equity Fund 13,207,361 units 370,624 855,838
Merrill Lynch Floating Rate
Long-Term Fixed Income Fund* 699,474,232 shares 699,474 699,474
Participant loans, 6.0% to 9.0% interest rate range* 81,834 81,834
---------- ----------
$3,497,873 $5,547,187
========== ==========
* Party-in-interest as defined by ERISA
- 13 -
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED JANUARY 31, 1998
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Expense Current
Incurred Value at Net
Identity Purchase Selling Lease With Cost of Transaction Gain
of Party Price Price Rental Transaction Asset Date (Loss)
Involved Description of Asset (000's) (000's) (000's) (000's) (000's) (000's) (000's)
- ----------------------------------------------------------------------------------------------------------
Series of Transactions (Category iii)
Mobil* Mobil Common Stock
1,105 Purchases $429,416 $141 $429,557
1,089 Sales $307,822 94 222,189 $307,728 $85,539
Merrill Merrill Lynch Floating
Lynch* Rate LTFI
1,054 Purchases 388,016 388,016
986 Sales 487,861 487,861 487,861 -
* Party-in-interest as defined by ERISA
There were no category (I), (ii) or (iv) reportable transactions for the fiscal
year.
</TABLE>
- 14 -
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, Mobil Oil
Corporation, the administrator of the Employees Savings Plan of Mobil Oil
Corporation, has duly caused this Annual Report to be signed on its behalf by
the undersigned hereunto duly authorized.
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
MOBIL OIL CORPORATION
BY /s/ GORDON G. GARNEY
NAME AND TITLE Gordon G. Garney, Senior
Assistant Secretary
DATE May 13, 1998
- 15 -
<PAGE>
EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
23. Consent of Ernst & Young LLP, Electronic
Independent Auditors,
dated May 6, 1998.
- 16 -
<PAGE>
SIGNATURE
EXHIBIT 23
CONSENT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
We consent to the incorporation by reference in the Registration Statements Form
S-8 (Nos 33-18130 and 333-16819) pertaining to the Employees Savings Plan of
Mobil Oil Corporation, Form S-3 (No 33-34133-01) of the Mobil Oil Corporation
Employee Stock Ownership Plan Trust for the registration of $300,000,000
principal amount of debt securities guaranteed by Mobil Corporation and in the
related Prospectuses, of our report dated April 15, 1998, with respect to the
financial statements and supplemental schedules of the Employees Savings Plan of
Mobil Oil Corporation included in this Annual Report (Form 11-K) for the fiscal
year ended January 31, 1998.
/s/ ERNST & YOUNG LLP
Fairfax, Virginia Ernst & Young LLP
May 6, 1998
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<PAGE>
