2013 Annual Report (10-K) for Exxon Mobil Corporation

Long-Term Debt 

1. What was the difference between the interest expense and interest paid in 2013? 

There is significant difference between interest expense and interest paid in the fiscal year 2013. Interest expense recognizes the amount of interest that is incurred over a significant period. On the other hand, the interest paid is accrued interest on debt that has already been settled. In the year ended December 31 st 2013 Exxon Mobil had paid up interest worth $426 million as stated in page 71. The interest expense are presented in page 62 is $9 million. As a result, the difference is $417 million. 

2. How much long-term debt will mature in 2014? 

The long-term debt will significantly increase over the course of the following year. In this case, the 2013 Annual Report (10-K) for Exxon Mobil the long-term debt due for the year 2014 is estimated at $1,034 million. This amount is clearly stated on page 51 of the 10-K report. 

3. What was the weighted average interest rate on the company’s long-term debt for the year ended December 31, 2013? 

In an attempt to identify the weighted average interest rate of the company can be found by multiplying each loan amount with its interest rate. This score obtained is the loan weight factor. One should then add the weight factors for each loan to attain the total loan weight factor. The total loan weight factor is the divided by the total loan amount which then helps in realizing the average weighted average interest. 

Amount	Interest Rate		Interest
742	4.60%		34.132
177	3.30%		5.841
249	8.63%		21.47625
2527	0.10%		2.527
112	4.40%		4.928
375	7.80%		29.25
4182
		Weighted Average Interest= 98.1543/4183
			=2.35% found on page 79

4. Was the current yield at December 31, 2013, on the company’s long-term debt the same as, greater, or less than the average yield at issuance? At December 31, 2012? 

The current year yield at issuance in December 31 st , 2013 was less than that of December 31 st , 2012. It is estimated that the yield in approximately $37 million. 

Contributed Capital 

1. How many shares of preferred stock were authorized and issued at the end of 2013? 

From a critical analysis of Exxon Mobil financial statements of the fiscal year 2013, there is no evidence of the preferred stock. In this case, the company does not seem to have authorized preferred stock (Securities and Exchange Commission, 2013). 

2. How many shares of common stock were authorized and issued at the end of 2013? What is the par value per share? 

According to the consolidated statement of cash flows, it is evident that authorized common stock shares amounted to 9,000 million shares. A further 8,019 million shares were issued by the end of 2013. As presented by the report of the company there was no par value per share provided (Securities and Exchange Commission, 2013). 

3. How many shares of treasury stock did the company hold at the end of 2013? What was the average cost per share? 

Exxon Mobil holds nearly 3,684 million shares at the conclusion of the fiscal year 2013. This amounts to nearly $212,781 million as the total cost of the shares of treasury stock that the company owns. In order to calculate the total cost per share for each one of these treasury stocks one should divide the total cost of the treasury stock by the shares the company held at the end of 2013. This amount is clearly stated from page 64 of the report (Securities and Exchange Commission, 2013). 

Average cost per share = $212,781/3,684 = $56.7581 

4. How many shares of treasury stock did the company reacquire during 2013? What was the average cost per share? 

The company reacquired multiple treasury stock over the course of the 2013 fiscal year. A total of 177 million shares of its common stock were reacquired costing the company $16 billion. To identify the average cost per share in this reacquisition the total cost is divided by the total number of shares. Through the figures provided in page 49 indicate that the average cost of $90.3955 (Securities and Exchange Commission, 2013). 

Average cost per share = $16 billion/177 million = $90.3955 

5. Briefly describe the company’s Stock Option Plan. Answer the following questions regarding the plan. 

The stock option plan that the company incorporates includes the 2003 Incentive Program that has laid out numerous plans. In this regard, there are grants provided for stock options, restricted stock, stock appreciation rights (SARs) and other awards to the company. These details are clearly identified on page 80 of the report (Securities and Exchange Commission, 2013). 

Investments 

1. How much was the fair value of the company’s investments at the end of 2013? What comprises these investments? 

The fair value of the company’s investments at the issued on December 31 st 2013 is at a total of 78.29. This figure is clearly outlined on page 80 of the report. It includes the cost of the issued investments on January 1 st , the 2012 award that was issued for 2013, the forfeited and vested investments. 

2. How much was the change in investments from 2012 to 2013? 

There has been significant change in the investments from 2012 to that made in 2013. The grant price in dollars changed from 87.24 in 2012 to 94.47 in 2013. The difference of the two is $7.23 (Securities and Exchange Commission, 2013). The fair value of shares and units vested in 2012 was $926 million as opposed to $1,040 million in 2013. In this case, the change realized is $114 million. 

3. What was the company’s basic net income per share for 2013? How does this amount compare to 2012? 

The basic net income per share in 2013 is equated to the net income divided by the average outstanding common shares at the time. According to the figures provided, the net income for the year 2012 is $854 million/ 117 million = $7.30. This figure gives a clear value of the basic earnings per share in the year 2013. This amount is almost equal to that of the previous fiscal year 2012 (Securities and Exchange Commission, 2013). 

How much preferred dividends were subtracted in the computation of this income per share? 

Following a critical assessment of the report for Exxon Mobil, there were no preferred dividends subtracted from the gross income. 

What was the average number of common shares outstanding used in the computation of this income per share? 

The average number of common shares outstanding is 117 million drawn from information on page 80 (Securities and Exchange Commission, 2013). 

What was the company’s diluted net income per share for 2013? How does this amount compare to 2012? 

For the year 2013 the diluted net income per share was $7.30. That of 2012 is significantly lower higher due to lower prices per share (Securities and Exchange Commission, 2013). 

What potential common shares were included and excluded, and why? 

The potential common shares included were grants for stock options, restricted stock and stock appreciation rights. These shares were included as part of the 2003 Incentive Program. 

4. What were the dividends per share and in total for 2013? 

At the end of the fiscal year 2013 the dividends per share were $2.46 amounting to a total of $10,870.74 million as presented by figures in page 77 (Securities and Exchange Commission, 2013). 

Income Tax 

1. What was the total income tax expense relating to income before income taxes for 2013? How much of this was current? How much was deferred? 

The total income tax expense for the year 2013 is 24,263 million of dollars. 1,391 is for the US whereas $22,872 million for Non-US. The current amounted to $23,188 million while the deferred was approximately $641 million. These are presented on page 94 (Securities and Exchange Commission, 2013). 

2. What were the total deferred tax assets at the end of 2013? Total deferred tax liabilities? Net deferred tax liability? 

At the end of 2013 fiscal year the total deferred tax assets $22,295 million. The total deferred tax liabilities amounted to $54,358 million while he net deferred tax liability at $34,554 million. These figures are found on page 95. 

3. How much was the noncurrent deferred tax liability at the end of 2013 and where was it reported? 

In the case of the noncurrent deferred tax liability at the end of the fiscal year 2013 were at a total of $40,530 million (Securities and Exchange Commission, 2013). This was reported on page 95 of the report. 

Pension and Other Postemployment Benefits 

1. What kind of pension plans does the company have? 

The company offers three funded pension plans the projected benefit obligation, accumulated benefit obligation and fair value of plan assets. There are also two unfunded pension plans including the accumulated benefit obligation and the projected benefit obligation. 

2. How much is the company’s pension and other postemployment benefits expense in 2013? 

At the end of 2013, the funded pension plan expensed included: 

Projected benefit obligation-14,737 millions 

Accumulated benefit obligation-12,342 millions 

Fair value of plan assets-11,189 millions 

In the case of the unfunded pension plans the expenses included 

Projected benefit obligation-2,567 millions 

Accumulated benefit obligation-1,647 millions (Securities and Exchange Commission, 2013) (pg. 91) 

3. How much are the company’s actual and expected return on plan assets in 2013? 

The company has significant returns on plan assets in 2013 include $827 million for the net actuarial loss/gain and $8 million prior service cost. Pg. 91 

4. How much is the benefit obligation at December 31, 2013? 

As of December 31 st , 2013 the total benefit obligation was $31293 million as presented by figures in page 91. 

Leasing 

1. What type(s) of lease does the company have? Why does the company use this type of lease? 

There are two types of lease that the company has; the minimum undisclosed lease commitment and the related sublease rental income. 

2. How much were the obligations reported? 

In the year end, the obligations of the company were as follows. Rental costs were $3,841 million and less sublease rental income $44 million. The net rental cost is $3,797 million (Securities and Exchange Commission, 2013). 

Cash Flow 

1. What was the net cash provided by operating activities for 2013? What method was used to determine this amount? What was the largest positive adjustment to net income? 

The net cash provided by the operating activities in 2013 amounted to $44,914 million (Securities and Exchange Commission, 2013). The method used is through adding net income for noncontrolling interests, adjustments for noncash transactions that include postretirement benefits, depreciation, deferred tax charges and long-term obligation provisions. Dividends received that are greater that equity in current earnings, changes in operational working capital along with the gain asset sales and other net items all add up to the net cash by operating activities. (Securities and Exchange Commission, 2013) Pg. 65 

2. What was the net cash used in investing activities for 2013? What was the largest investing cash outflow? Investing cash inflow? 

The net cash used in making investments amounts to $34,201 million. Additions to plant, equipment and property are the largest cash inflow at $33,669 million (Securities and Exchange Commission, 65). Cash inflow ensures revenue earned through significant investment in company assets (Caiazza, Hsieh, Tiwari, & Topf, 2013). 

3. What was the net cash used in financing activities for 2013? What was the largest financing cash inflow? Financing cash outflow? 

The net cash used for financing activities in the year 2013 amounted to $15,476 million. The largest financing cash outflow includes common stock acquired and dividends sent to ExxonMobil shareholders. The largest cash inflow include additions in long-term and short-term debts along with the text benefits received (Securities and Exchange Commission, 2013). 

4. What was the interest paid in 2013? Income taxes paid? 

The interests paid in 2013 amount to $426 million as per the figures provided on page 71 (Securities and Exchange Commission, 2013). The company also made cash payments of income taxes amounting to $25,066 million. 

5. Compute the “cash flow from operations to sales” ratio for 2013. How does this result compare to 2012? Why? 

The cash flow from operating activities to sales revenue ration is attained through dividing the former by the latter and multiplying by 100 to get the ratio as a percentage. In this case, the cash flow from operations to sales ratio is 44,914/420,836 x 100 = 10.67% in 2013. In 2012 the ratio is 56,170/451,509 x 100 = 12.44% making it significantly higher due to increased sales revenue and net cash from operating activities (Securities and Exchange Commission, 2013). Pg 62 and 65. 

6. Compute the profit margin for 2013. How does this result compare to the cash flow from operations to sales ratio for 2013? Why? 

Profit margin refers to the amount by which sales revenue have exceeded the costs incurred in the business. In this regard, the profit margin for 2013 is $32,580 million/$57,711million = $0.56. This margin shows that the company has a 56% profit margin which is significantly higher than the cash flow from operations to sales ratio (Securities and Exchange Commission, 2013). 

Financial Disclosures 

1. Did the firm’s auditors provide a clean opinion on the financial statements? 

The Exxon Mobil Company seeks auditing services from Price Waterhouse Coopers one of the most well known audit corporations in the world. The auditors provide a clean opinion on the financial statements as they present significant growth of the company. 

2. Has the company made changes in any accounting methods or estimates it uses? Discuss the stated reasons and types of changes. 

The company has incorporated both accrual-based financial accounting and cash-based tax accounting. These different practices enable the company to keep a close track on daily business operations while also monitoring the cash flow of the company. Though the financial accounting helps monitor daily operations it may be misleading in identifying purchases. Tax accounting may also mislead as a sudden jump in cash receipts may cause members to think the business is more profitable. However, no changes have been made in the accounting methods and estimates used. 

3. Has the company made any accounting errors correction? Discuss the stated reasons and types of correction. 

The auditors have not made any accounting errors correction. 

4. Have there been any subsequent events, errors and irregularities, illegal acts, or related-party transactions that have a material effect on the company’s financial position? 

Exxon Mobil has faced numerous violations of state regulations among issues related to the Clean Air Act resulting in subsequent investigations. Some litigation was completed by year end while others are pending. 

5. Name at least two trends in the company’s operations or capital resources that management considers significant to the company’s future? 

According to the energy company operations in the Middle East are important towards its continued growth as it also has potential for retail locations that increases sales. 

6. Is the company engaged in more than one significant line of business? If so, what are the company’s operating segments? What is the sales volume from each segment? What is the sales trend for each market in the last two years? In addition, compare the relative profitability of the segments. 

The organization is involved in multiple lines of business that include the Upstream, Downstream and Chemical functions all of which represent operating sectors of the company. The Upstream segment helps in the exploration and production of natural gas and crude oil. The Downstream segment manufactures and distributes petroleum products. The Chemical segments is involved in manufacture and sale of petrochemicals. 

	2013	2012	Change
Upstream	26841	29895	-0.10
Downstream	3449	13190	-0.74
Chemical	3828	3898	-0.02

References 

Caiazza, R., Hsieh, W., Tiwari, M., & Topf, D. (2013). M&A between giants: the fastest way to dominate the world economy. Foresight , 15(3), 228-239. 

Lin, J., & Fink, P. (2013). International Financial Reporting Standards: Are They Right for the United States?. Journal of global business issues , 7(2), 59. 

Securities and Exchange Commission (2013) Form 10-K Annual Report Pursuant to Section 13 of 15(d) of The Securities Exchange Act of 1934: Exxon Mobil Corporation . Washington, D.C.