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, 1999
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, 1998 and 1999
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, 1998 and 1999, 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, 1998 and 1999, 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 performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of January 31, 1999 and reportable transactions
for the year the ended, are presented for the purpose of additional analysis and
are not a required part of the financial statements but are supplementary
information required by the Department of Labor's Rules and Regulations for
Reporting and Disclosure under the Employee Retirement Income Security Act of
1974. These supplemental schedules are the responsibility of the Plan's
management. The Fund Information in the statement of net assets available for
benefits and the statement of changes in net assets available for benefits is
presented for purposes of additional analysis rather than to present the net
assets available for benefits and the changes in net assets available for
benefits of each fund. The supplemental schedules and fund information have been
subjected to auditing procedures applied in our audits of the financial
statements and, in our opinion, are fairly stated in all material respects in
relation to the financial statements taken as a whole.
Fairfax, Virginia Ernst & Young LLP
April 16, 1999
1
<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>
2
<PAGE>
<TABLE>
<CAPTION>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
JANUARY 31, 1999
(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 $2,458 $1,438 $779 $1,221 $545 $233 $74 $6,748
Contributions receivable:
Company 181 - - - - - 181
Participants 3 - 1 1 1 1 - 7
Dividends and interest
receivable - 20 - - - - 1 21
Loan repayments
receivable - - - - - - 2 2
Cash - - - - 6 - - 6
----------------------------------------------------------------------
Total assets 2,461 1,639 780 1,222 552 234 77 6,965
----------------------------------------------------------------------
Accrued interest
payable - (15) - - - - - (15)
ESOP debt - (471) - - - - - (471)
----------------------------------------------------------------------
Total liabilities - (486) - - - - - (486)
----------------------------------------------------------------------
Net assets available
for benefits $2,461 $1,153 $780 $1,222 $552 $234 $77 $6,479
======================================================================
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, 1998
(millions of dollars)
<S> <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 - - 28 11 - 155
Interest and other
investment income - - 47 - - - 7 54
Realized and unrealized
gains on investments 90 51 - 194 21 - - 356
---------------------------------------------------------------------
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 (Note 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>
4
<PAGE>
<TABLE>
<CAPTION>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
STATEMENTS OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
YEAR ENDED JANUARY 31, 1999
(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 $ 26 $ - $ - $ - $ - $ - $ 43
Participants 37 - 11 21 14 10 - 93
Investment income
Dividends 67 50 - - 24 8 - 149
Interest and other
investment income - - 46 - - - 6 52
Realized and unrealized
gains on investments 567 318 - 415 43 19 - 1,362
----------------------------------------------------------------------
Total investment income 634 368 46 415 67 27 6 1,563
----------------------------------------------------------------------
Interest on ESOP debt - (38) - - - - - (38)
Distributions to
participants (167) (31) (141) (51) (42) (10) (4) (446)
Transfers in (Note 5) 3 - 12 6 7 1 - 29
Transfers out (Note 5) (2) (2) (1) - (1) - - (6)
Inter-fund transfers (158) (16) 153 (26) 72 (15) (10) -
----------------------------------------------------------------------
Net increase in net
assets available
for benefits 364 307 80 365 117 13 (8) 1,238
Net assets available for benefits:
At beginning of year 2,097 846 700 857 435 221 85 5,241
----------------------------------------------------------------------
At end of year $2,461 $1,153 $780 $1,222 $552 $234 $77 $6,479
======================================================================
See accompanying notes
</TABLE>
5
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1998 and 1999
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.
During 1998, Mobil sold certain operations in Paulsboro, New Jersey and
Pasadena, Texas. The Plan provided full vesting to all affected participants and
allowed them to continue to repay their outstanding loans under the existing
loan amortization schedules.
Contributions - The Plan is composed of two parts:
Savings Account - Through December 31, 1998, Mobil contributed sufficient funds
to this account to provide an allocation of Mobil's Series B ESOP Convertible
Preferred Stock (Mobil ESOP Convertible Preferred Stock) equal to 4% of most
employees' eligible compensation, plus additional Mobil ESOP Convertible
Preferred Stock in lieu of preferred cash dividends on such stock. Effective on
January 1, 1999, Mobil's contribution was increased to 6% for most employees.
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 eligible compensation (plus
certain make-up contributions).
401(k) Account - Through December 31, 1998, Mobil contributed 2% of eligible
compensation for most employees to this account(and an additional 1% for most
pre-January 1, 1969 employees). An employee could elect to receive a portion or
all of Mobil's contributions in cash. Effective on January 1, 1999, this 2%
contribution was discontinued. The account also includes employee pre-tax
contributions. 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.
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 have the option to receive dividends
from Mobil Common Stock in the Plan in cash without withdrawal penalties.
The terms of the Plan are more fully described in the Summary Plan Description,
which is available to each participant.
In December 1998, Mobil and Exxon Corporation signed an agreement to merge the
two companies, subject to regulatory and shareholder approvals.
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.
6
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1998 and 1999
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 preferred 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.
The Merrill Lynch Floating Rate Long-Term Fixed Income Fund (LTFI) is 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.
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 $2,782,000 and $3,317,000 for the years ended
January 31, 1998 and 1999, respectively.
Security transactions are recorded on a trade date basis. Realized and
unrealized gains and losses are based on an average cost method.
7
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1998 and 1999
Note 3. Major Accounting Policies - continued
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.
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 million 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. As of January 31, 1999,
$196.2 million of these debentures were still outstanding.
Through January 31, 1999, the ESOP trust issued and Mobil guaranteed an
aggregate of $275 million of medium-term notes under a $300 million shelf
registration filed with the Securities and Exchange Commission pursuant to Rule
415. On March 12, 1999, the Securities and Exchange Commission declared
effective a new shelf registration that would permit the offer and sale by the
ESOP trust of an additional $475 million in debt securities, guaranteed by
Mobil, pursuant to Rule 415. The proceeds of the sales of the issued 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 the new
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 as
of January 31, 1999 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
3/02/98 25,000,000 5.875% 9/03/02
3/02/98 20,000,000 5.900% 2/28/03
8/31/98 45,000,000 5.800% 9/02/03
------------
$275,000,000
============
8
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1998 and 1999
Note 4. Employee Stock Ownership Plan (ESOP) - continued
Principal and interest payments on the debentures and medium term notes are due
semi-annually. Plan fiscal year annual principal maturities are as follows:
$135,600,000 in 2000; $85,600,000 in 2001; $80,000,000 in 2002; $75,000,000 in
2003; and $95,000,000 in 2004.
On February 4, 1999, the ESOP trust established a commercial paper program under
which the ESOP trust may sell to institutional investors up to $500 million of
short-term notes, guaranteed by Mobil. The proceeds of the sales of such notes
will be used for the same purposes as the proceeds of the debt securities issued
by the ESOP trust and guaranteed by Mobil under the above mentioned shelf
registrations. On March 1, 1999, the ESOP trust issued and Mobil guaranteed
$115,090,808 of 4.973% notes, due August 31, 1999. The proceeds were used in
part to retire in advance of their normal maturity dates the first three
medium-term notes identified in the above schedule.
Only unallocated assets held in the ESOP trust are subject to recourse by
creditors of the ESOP trust.
The ESOP trust uses dividends on the Mobil ESOP Convertible Preferred Stock,
together with contributions from Mobil, to repay the principal and interest on
the ESOP debt. 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 623,668 and 630,678 pay-based units of Mobil ESOP
Convertible Preferred Stock, plus credit for fractional units, for the fiscal
years ended January 31, 1998 and 1999, respectively. The aggregate fair values
of these units were $43,921,110 in 1998 and $49,186,368 in 1999. 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
354,055 with a fair value of $25,109,583 in 1998, and 350,736 with a fair value
of $26,463,066 in 1999.
As of January 31, 1998 and 1999, the Plan held 8,329,097 and 7,347,683 units,
respectively, of Mobil ESOP Convertible Preferred Stock, which have yet to be
earned by employees. The current values of these unearned units were
$570,543,154 in 1998 and $642,922,263 in 1999. Net assets available for benefits
at January 31, 1998 and 1999, included unrealized gains on the unallocated units
of $246,749,503 and $357,281,086, 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 $229,409 and $270,663 for the
years ended January 31, 1998 and 1999, respectively.
9
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1998 and 1999
Note 5. Contributions and Distributions - continued
Transfers in include participant-initiated rollovers of certain distributions
from other tax-qualified plans into the Savings Account. Transfers out during
the year ended January 31, 1999 include a trust-to-trust transfer of the
balances of former Mobil employees who became employees of the Aera Energy joint
venture.
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) $50,000 less the maximum outstanding loan balance in the
preceding twelve months.
Note 7. Plan Investments
At January 31, 1998 and 1999, the percentage of the Plan's net assets that were
investments in or receivables from Mobil was 66% and 63%, respectively.
Investments in the Plan as of January 31, 1998 were as follows ($ 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 $5,547
====== ======
10
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1998 and 1999
Note 7. Plan Investments - continued
Investments in the Plan as of January 31, 1999 were as follows ($ millions):
Current
Cost Value
------ -------
Mobil Common Stock.......................... $1,096 $2,458
Mobil ESOP Convertible Preferred Stock...... 639 1,438
Merrill Lynch Floating Rate Long-Term
Fixed Income Fund......................... 779 779
Jennison Equity Fund........................ 412 1,221
Other lower risk funds - less than 5% of Plan
net assets:
Merrill Lynch Institutional Fund.......... 127 127
Merrill Lynch Global Allocation Fund...... 73 67
Merrill Lynch Equity Index Trust.......... 101 153
Franklin U.S. Government Securities Fund.. 113 114
AIM Charter Fund.......................... 62 84
Other higher risk funds - less than 5% of Plan net assets:
MFS Emerging Growth Fund.................. 104 157
Templeton Foreign Fund.................... 63 52
Templeton Developing Markets Trust........ 35 24
Participant Loans........................... 74 74
------ ------
$3,678 $6,748
====== ======
The Plan's investment in Mobil Common Stock at January 31, 1998 and 1999
represented 3.9% and 3.6%, respectively, of the outstanding shares.
The average crediting interest rate of the Merrill Lynch Floating Rate Long-Term
Fixed Income Fund for the years ended January 31, 1998 and 1999 was 6.5% and
6.3%, respectively. The annualized crediting interest rate at January 31, 1998
and 1999 was 6.5% and 6.1%, respectively. 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 October 23, 1998, the Internal Revenue Service determined that the entire
Plan, a stock bonus plan qualified under Section 401(a) of the Internal Revenue
Code (the Code), also qualifies as an employee stock ownership plan (an "ESOP")
under section 4975(e)(7) of the Code, and that the Trusts thereunder
(collectively, the Trust) are exempt from Federal income tax under Section
501(a) of the Code.
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.
11
<PAGE>
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
NOTES TO PLAN FINANCIAL STATEMENTS
JANUARY 31, 1998 and 1999
Note 10. Impact of Year 2000 (unaudited)
The Year 2000 issue is the result of computer programs being written using two
digits rather than four to define the applicable year. Any of the computer
programs that have time-sensitive software may recognize a date using "00"
rather than the year 2000. This could result in system failure or
miscalculations causing disruptions of operations, including, among other
things, a temporary inability to process transactions or engage in similar,
normal business activities.
Mobil has essentially completed an assessment of its business software and
equipment from a year 2000 compliance standpoint. Mobil is in the process of
completing the modification or replacement of its materially important business
software and equipment that are not year 2000 compliant so that its computer
systems will function properly with respect to dates in the year 2000. The
Plan's service providers have indicated that they are presently taking steps to
ensure that their systems and operations that impact Plan information will be
Year 2000 compliant.
12
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<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
ITEM 27a - SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
JANUARY 31, 1999
<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* 28,088,090 shares $1,095,948 $2,457,708
Mobil ESOP Convertible
Preferred Stock* 164,354 shares 638,927 1,438,099
Registered Investment Companies:
Merrill Lynch Institutional Fund* 126,731,686 shares 126,732 126,732
Massachusetts Financial Services Company
MFS Emerging Growth Fund 3,273,929 shares 103,732 156,788
Merrill Lynch Global Allocation Fund* 5,240,459 shares 72,992 66,763
Franklin Custodian Funds, Inc. Franklin
U.S. Government Securities Fund 16,458,090 shares 112,621 113,890
AIM Charter Fund 5,344,412 shares 61,689 83,907
Franklin Templeton Group Templeton
Foreign Fund 6,350,266 shares 62,501 52,390
Franklin Templeton Group Templeton
Developing Markets Trust 2,480,433 shares 34,641 24,110
Common Collective Trust:
Merrill Lynch Equity Index Trust* 1,760,066 shares 100,976 153,705
Other investments:
Jennison Associates Capital Corporation
Jennison Equity Fund 12,564,501 units 412,376 1,220,641
Merrill Lynch Floating Rate
Long-Term Fixed Income Fund* 778,739,939 shares 778,740 778,740
Participant loans, 6.0% to 9.0% interest rate range* 74,238 74,238
---------- ----------
$3,676,113 $6,747,711
========== ==========
* Party-in-interest as defined by ERISA
</TABLE>
13
<PAGE>
<TABLE>
<CAPTION>
SUPPLEMENTAL INFORMATION
EMPLOYEES SAVINGS PLAN OF MOBIL OIL CORPORATION
ITEM 27d - SCHEDULE OF REPORTABLE TRANSACTIONS
YEAR ENDED JANUARY 31, 1999
<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
1,013 Purchases $393,206 $154 $393,360
1,838 Sales $488,572 187 340,459 $488,385 $147,926
Merrill Merrill Lynch Floating
Lynch* Rate LTFI
1,063 Purchases 571,711 571,711
971 Sales 491,777 491,777 491,777 -
* 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 12, 1999
15
<PAGE>
EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
23. Consent of Ernst & Young LLP, Electronic
Independent Auditors,
dated May 5, 1999.
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 (Nos. 33-34133-01 and 333-67123) of the Mobil
Oil Corporation Employee Stock Ownership Plan Trust for the registration of
$300,000,000 and $475,000,000, respectively, principal amount of debt securities
guaranteed by Mobil Corporation and in the related Prospectus, of our report
dated April 16, 1999, 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, 1999.
/S/ ERNST & YOUNG LLP
Fairfax, Virginia Ernst & Young LLP
May 5, 1999
17
