ML20214Q716

1985 Annual Rept

ML20214Q716
Person / Time
Site:	Framatome ANP Richland
Issue date:	12/31/1985
From:	Garvin C, Rawl L SIEMENS POWER CORP. (FORMERLY SIEMENS NUCLEAR POWER
To:
Shared Package
ML20214Q688	List: ML20214Q687 ML20214Q705 ML20214Q716 ML20214Q725
References
NUDOCS 8609260261
Download: ML20214Q716 (50)

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!ed with the Secunties of Capitol and Bagby. Houston, Texas, on Thursday, May 15,1986.

and Exchange Commission at 9.30 a m. Houston time A descnption of Exxon's employee benefit plans, including pension plans, and a summary annual report of such plans Stock certificates may be transferred at the following A summary of Exxons progress in the employment of minontees transfer agents' oHices:

and women in its U S. work force and of its purchases from minor' sty-owned businesses Bank of Amenca National Trust and Savings Association 201 Mission Street A summary of Exxon's South Afncan affiliates

• employment polices Dept. 9527 and practices and community-related activities San Francisco, California 94105 Dimensions 85, a report on Exxon's 1985 contnbutions in the st W Nahonal Bad of Houston public interest 1301 Fannin Houston, Texas 77002 Dividend Reinvestment Plan The First National Bank of Boston A brochure is available on Exxon's Dividend Reinvestment Plan. It 50 Momssey Boulevard explains how shareholders may increase their investment in the Dorchester, Massachusetts 02125 stock of the corporation without fees or service charges-The First National Bank of Chicago One First National Plaza Requests for reports, other publications Suite 0122 and information about company operations Chicago, Illinois 60670 should be addressed to:

Exxon Corporation Shareholder Services Morgan Guaranty Trust Company of New York 1251 Avenue of the Amencas

• S' "Y

New York, New York 10020-1198 New York, New York 10007-2193 or telephone collect (212) 333-6900 Inquines regarding the Dividend Reinvestment Plan, dividend payments, stock tran:;fer requirements, address changes and account consolidations should be addressed to:

Morgan Guaranty Trust Company of New York Post Oflice Box 7600 Church Street Station New York, New York 10249-76e Telephone (212) 587-6472

Highlights i

I Financial 1984 1985 Netincome biiiionsoteoiiars 5.5 4.9 Netincome persnare

$ 6.77

$ 6.46 Earnings before specialitems persnare

$ 6.62

$ 7.43 l

Dividends persnare

$ 3.35

$ 3.45 l

Shareholders' equity persnare

$36.84

$39.83 Return on average shareholders' equity percent 19.0 16.8 Return on average capital employed percent.

15.4 14.2 COVER:"The downstream" is an oilman's term for the Netincome to revenue percent 5.7 5.2 rrfning and marketing part of Capital and exploration expenditures biiiionsotooiiars 9.8

$ 10.8 the business. The viewpoint rrpresented here-an Exxon Research and development costs miinonsotooiiars

$ 736

$ 681 station as it might appearfrom thefuelport ofa customers car-is the ultimate down.

Operating stream terminus of thelong Net l.iquids productian inousandsof barreisdairy 1,655 1,701 petroleum supplyline. The rierc ineludes one of the Exxon Refinery crude oil runs inousanosatbarreiseaiiy 3,220 2,903 Shops which made their debut Ne US. in 19ss (for other Petroleum product sales inousanosorbarreisoairy 4,192 4,082 of the store, scepages Natural gas production available for sale i

"d 13h Exxon'slargest.

minions of cubic feet daily 5,918 5,661 1980 carrungsgains were un the refning and marketing Chemical revenue m6onsof dollars

$8,372

$7,932 segment.

'See dehn,tions on page 4 The hose nozzleson gaso-

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linep:<mps at right also

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l symbol.'ze the downstream

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'w end of the supplyline. The s

l Gilbarco afiliate.

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rose 12 percent. Including these items, they fell a modest 5 percent. The cumulative impact of the buy-back of Exxon stock has been substantial. Fifty-four cents of the 1985 earnings per share is attributable to the buy-backs begun in 1983.

That we were able to do as well as we did in 1985 is attributable to strategies set in motion some time ago. A major emphasis in our planning over the past several years has been to prepare for a more competitive future. We have done this in a variety of ways, all directed toward making Exxon a more productive organization. In refining and marketing, for instanee, we have systematically phased out less efEcient capacity when it became apparent that it could no longer compete. Current refining capacity, as a result,is down about a quarter from its 1981 level. At the same time, we have upgraded to higher levels of efficiency and productivity those facilities that we have retained.

Average sales volume in Exxon service stations is an example. Over the same four-year period this has increased some 30 percent. Emphasis on higher-value products and greater selectivity in geographical market participation have been other elements in our downstream strategy.

In exploration and production, our goal has been two-fold: to develop and maximize recovery fmm existing oil and gas 6 elds (about two-thirds of our producing investments have gone for this purpose) and to strengthen our resource base through cost-effective additions to reserves. In 1985, we drilled a record number of development wells and the largest number of exploration wells in the (h

last quarter of a century The new discoveries and extensions to existing fields that resulted, along Q

with purchases and revised recovery estimates, more than replaced volumes produced. For the fourth year running, we increased our reserve base.

Allin all, then,it was a good year for Exxon. But as we all know, much has happened since the year ended. Early in 1986, spot crude oil prices experienced their most drastic drop in the modern history of the oilindustry. Ilow far this may go, how permanent it may be, and all that it implies for the future remains to be seen. But that there will be far-reaching consequences for our industry seems certain. As a result, we are having to rethink our entire strategy. Exploration ventures, capital investments, the lines of business that we are in-all must be reexamined to make sure that they continue to make sense in a radically new environment.

Uncertainties are not new to our industry, of course, and we have learned to live with them. We have the experience, physical resources, and financial strength to do what needs to be done. And we have the people to do it. The contributions of our employees, always vital to our success, were never more so than in times such as these. We thank them, as we thank our shareholders for their continued support and interest.

We look forward to seeing as many of you as possible at the annual meeting in May.

FOR THE BOARD OF DIRECTORS March 3,1986 OD ?

0 L(

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C. C. GARVIN. JR, Chahnan L)

L. G. RAWL Pres dent 3

l To the Shareholders l

l 1

1 For a year of weak oil demand and continued excess industry producing capacity, Exxon's 1985 results not only turned out to be better than might have been expected, they were in fact quite good. Although total net income was 12 percent less than the record five and a half billion dollars of 1984, this was attributable to special items that had a negative impact on 1985 earnings. Chief among these was the charge taken in the Hawkins oil price case, about which we wrote you several months ago. You have probably read about the Supreme Court rejecting our appealin this case.

While we feel that this was an unjustified outcome, we have no choice but to live with the result.

Without Hawkins and the various other specialitems, total 1985 earnings would actually have been about 3.7 percent greater than those of 1984. Our fourth quarter results were particularly gratifying. In excess of 91.8 billion, they exceeded any previous fourth quarter in the company's i

history. Compared to the previous year they were up 26.4 percent.

Once again, earnings in the exploration and production segment of our business set a new record, reaching a level of almost five billion dollars. It was in refining and marketing, however, that i

the gain over 1984 was most i ronounced. Although not exceeding results achieved in some ea rlier years, earnings from this part of our business rose almost half a billion dollars. A large part of this came in the fourth quarter as margins improved both in the U.S. and abroad. The principal changes j

in the non-oil / gas parts of our business were in chemicals, where an extremely competitive market brought a fall-off in results,in minerals, where cost reduction measures reduced the loss bemg sustained, and in Reliance Electric, which continued to show profit improvement.

Reflecting the continued purchase by Exxon of outstanding shares of the company's stock, earnings per share in 1985 fared even better than overall earnings. Excluding special items, they t

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h REVIEW OF THE YEAR Earnings gain offset by F unctiona' and geographic speCialitems.

analysis of results Petroleum and natural ga s

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On a icorkboat in the South China Sea orfprninsular Malay-sia. a icorker directs operator of a crane (vriloir structure on upper g

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f,y g the platform is thefirst ofsece ral planntd by Exxon for the big

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Guntongfield. At right. Rohanna L'

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s Ahmad. a seniorgeologist u-ith 1

the company Iholding clipboardJ.

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icith contract drilling employee l

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Petroleum and Natural Gas

,usiness Profile - Exploration and Production 84 1M5 Expioration and Production Earnings United States 2.012 2.111 Worldw.de reserves L.iquids production up, i

Foreign 2.777

~2 826 Totai 0 85 4 937 diilling at new high.

increased again.

Average capital employed United States 11.907 12 312 Earnings from exploration and For the fourth consecutive Tota T

I7 production operations were up year, the company increased 3.1 percent, despite declining its worldwide oil and gas re-Capital and exploration expenditures United States 4 245 4.638 crude oil and natural gas serves on an oil equivalent Foreign

_2 778

_2 923 prices. U.S. gas prices were basis, as additions through 1

Total 7.023 7.561 particularly depressed because discoveries, extensions to ex-Research and development costs 174 159 of a continued large capacity isting fields, purchases and Return on average capitalemployed surplus in the industry. Ilut revised recovery estimates P *'

United States 16 9 17 1 Exxon's average U.S. gas more than replaced volumes 0

" *l9" realizations improved, as ma-produced. Liquid reserves also 8

jor contracts with even lower increased in the United States Net production and supplies -liquids Q"g' prices expired and were and worldwide.

Un ted StNes replaced by sales on more Exxon purchased more than 778 768 favorable terms.

50 million oilequivalent barrels Foreign 835 884 Proportionahnterest in production The company drilled a of proved U.S. reserves. The of equity cornpan,es 21 20 record 1,941 development wells, company also acquired 49 per-sands productron - Canad a

-7 including some 550 wells cent of Ilunt Oil Company's drilled todeve!T eavy oil intenent in a production ^ haring h

Natural gas production available for sale d,7C reserves at Cold Lake, Alberta. agreement with the govern-rup ment of North Yemen.The "o

ted St es 2 485 2.085 oil and natural gas l.iquid s in-agreement includes the Alif roreign 1.522 1.528 creased, with the largest gains oil field, of which Exxon's net Prcoortionahnte'eshn product,cn of equity compan.es

_1,911 2 <048 in Canada and Australia. Gas share is 98 million barrels of Tc,t a' 5.918 5661 production was lower, due proved reserves.

i mainly to lower U.S. demand.

5

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Construction cranes and the to.cers ofprocessing units rise against scintry skies at LaBarge, i

IQoming (right), schere Exxon Q

is buildingfacilities to separate p

3y and process naturalgas, carbon yn dioxide and othergasesfrom a f

N- - hills of the Rockies. The main

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y major deposit beneath thefoot-

^q' plant shoten here is scheduled to start up in 1986.

A C

. Senior drilling technician Gail l{

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2 Sabanosh (left) adjusts a valve at A.

a rig drilling Exxon USA's

,i Ananuacfieldin east Tcxas. An j

expanded program ofexploration f

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and development drilling in G

~,9 thelouer 48 states helped Exxon di increase its US. oilandgas k reserves in 1985 b ) Exploration acreage l Netliquidproductionl Increased exploration acquired in15 countries. Crude oiland natural effortled tO Oil and !j and supplies gas liquids reserves gas finds. The company spent $109 mil-l 3' i Exxon drilled 433 exploration lion in three Federallease l wells worldwide, the highest 8' sales to acquire 325,000 acres totalin more than 25 years. l in the Gulf of Mexico. Foreign l 2, 6-U.S. discoveries included acquisitions included acreage i in Canada, Colombia, Gua-r~~ two new gas finds in Mobile r- + Bay, Alabama. In addition, temala, Ecuador, the United 'i 1 Exxon participated in a num-Kingdom, France. Norway, the 2' ber of smaller oil and gas dis-Netherlands. West Germany. ]: g coveries in the lower 48 states. Turkey, Gabon, North Yemen, 0 '1981 0 1982 1983 1984 1985l 1981 1982 1983 1984 1985 Exploration results otY the the People's Republic of China I coast of Alaska were a major l ' O**' and New Zealand. disappointment, however. The I Un red Swes product cn C3 Europe company drilled or participated i~ Q UrwtedStates in seven dry holes on Bering Sea acreage and drilled a sec-ond dry hole at the Antares l prospect in the Beaufort Sea. I Foreign discoveries included 9 6 ---ea ,--r--e~~

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k 05 A Crete of Exxon' guyed tourr in s Construction continut J at Cold /f theGulfofMexico(bclou) Lake, Albe rta (la it). u here conductslite boat drill using 0eperialhas a phased Jerclop-survivalcapsules madefor quick nt project to nrove r klary launching and sally in the oilfrom sands 1.500 to a t belote roughest seas. Tourr is produc-ground. Thinned by steam inject-ing oilin 1.000firt of scater. cd through multiple urlis, the c he asy oilor " bitumen"is pumped to the surface anJ trratedfor vrmoral nf sanJ, trater andgas. \\ The firstjour phases of the t k projat, involting about 500 u cils w Q N and treatment hcchtics. urnt into production in 1M5 j .q; Part nf the Exxon!She'ljoint C ie nture u hich has Jaelope J so many productive oilandgas prope rties in the l'K. %rth Sea, j the inginti ring team at right ts designing a platrbrm thr the Te rn f._ .( feld. Tram membcrs. shou n icith a modelnf the plattorni in the backgrounJ. snclude Bob Munt and Russ l'ates qf Exxon on the ends and Mahdi Hassan and Len Coote yiShollin the anto r The plattorm is schedula J togo into production in IF) Syncrude production North Sea set a record. development Totai number of projects advanced. net wells dritied Operating improvements at P5ns were announced for a joint venture with Shell. The 25-the Syncrude project, which satellite platform at the Eider platforms will develop a total 20-produces synthetic crude oil field in the northern sector of of some 1.3 trillion cubic feet by mining and processing Al-the North Sea, part of Exxon's of natural gas in the new Sean 15-berta's Athabasca oil sands, led 50/50 joint venture with Shell fields and in the mature Leman to record production averaging in U.K. waters. The structure and Indefatigable fields. 10 128,000 barrels a day,15 per-will be linked to platforms at In Norwegian waters, natu-cent above the previous high the Tern and North Cormorant ral gas sales began from the 5-set in 1983. Imperial ha3 a 25 field 3, a nd will tap an estimated giant Statfjord field with com-percent interest in the project. 81 million barrel 3 ofliquid pletion of the Statpipe pipeline 0 1981 1982 1583 1984 1985 An expansmn program is reserves at Eider. The Eider and onshore gas treating facil-now under way to add new platform is scheduled to start ities. In addition, the new " ' I *9" mining and processing equip-producing in 1989. Statfjord "C" platform was 1 ~ 1 UrutedStates ment. The expansion will in-In the central sector, a plat-brought onstream. At year crea3e Syncrude capacity to form was placed at Clyde, a end, total sales from the field an estimated 145.000 barrels a field with total reserves esti-reached a rate of about 360 day in 1987. mated at 159 million barrel 3. million cubic feet of gas a day. Exxon has a 24.5 percent in-Liquid production averaged terest in this field. Production 725,000 barrels a day (Exxon startup i3 scheduled for 1987. share: 8.4 percent). Six platforms were placed on gas fields in the southern sector, also part of Exxon's 9

. o m_- , Mif~- E x y t 4 s 5 { g. b-Insulatingpanels are installed ,i ! : a, !; L g (left) atop a resselof the Flexi-coking unit being erectedat the ( '# M, @:Y refinery in Baytourn, Texas. Vinc .? ofconstruction al right shorcs '/ cone-shapedportion afanother resselbefore installation. The l Flexicoking unit.part ofan up-2 / - gradingproject at Baytoscn I u hich trillgo onstream in late 1936. uses a process developed by Exxon Research and Engin-cering to incrrase the proportion ofvaluablelightproductsin rrtinery output. Refining and Marketing Dutch gas export Platforms placed at Business Profile - Refining and Marketing 1984 1985 Contracts extended. three Malaysian earnings '"* o"S o' do"d's Oil fields. un.ted siares 161 229 Foreign 247 643 Contract extensions for the Production began from a plat-Tot at 408 872 sale of Dutch natural gas to form installed at the Guntong Average capitalemployed export marketsir West Ger-field, the first of several un.ted states 2.380 2.54 7 ) many, France, Italy, Belgium planned for the field. Delin, Foreign _5130 6,29J j and Switzerland were nego-eation drilling confirmed th?. Capit tempenditures tiated by Gasunie (Exxon extent of reserves in the Sehg! unsted states 385 624 i interest: 25 percent), the com-field, and work started on the Foretgn 1.019 1,309 pany which purchases and design of the first Seligi plat-Totar 1.404 1.933 i sells virtually all the gas from form. Guntong and Seligi are Research and development costs 111 104 i Dutch fields. The 10-year ex-the largest undeveloped fields Return on average capitalemployed P"C"" ' tensions will maintain export othhore peninsular Alalaysia. united siates 68 90 sales in the 2.5 to 3 billion cubic In addition, the first plat-F ' ;9 Ta feet-a-day range until well into forms were installed at the 5 the first decade of the next cen-Palas and Tabu fields, with Petroleum product sales $aUsca$ tury. Approximately 30 percent production scheduled to begin United states 1,149 1.123 of these sales will be supplied in 1%6. The new platforms Foreign 3.043 2,959 by Exxon-interest gas. bring the total operated by Tt 4.192 4.082 g, Exxon in Atalaysia to 21. United states 1.021 1.054 Foreign __2 199 L84_9 1 Totai 3.220 2.903 10 i

44 [..- + tt -{ ,,,q'. %Yw 4' '~' Ti $M h( (%,

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l 1 1 4 s @;I4 'E% chm &$= n_.m u \\ O A+f inery u pg ri!6 n g service StallOn f pro lpcts progressed petroleum product TT10dernization features sales volumes electronic systems. i I l ga l l l l l l 9ll l 1 l 1 l l

't s , f ~, 1 ~- ' 'xf'. l Scrrice statson in Siontgomery, Alabama llett). is one ofl20 3., Exxon stations u hich introduced Exxon Shops ta thr US. motoring w,o public sn 1995 Interior tu u-(briou-) shou s the concenstnce y products and automottre stems in stock and the cashter u ho ts y the only station cmployer on duty at this seif-scree ou tle t. Exxon Shops icsllbe installed at other ncte or modernizedstations in the next tercyrars. 5 - ;~r== q : 3 m q .J, At a sert ice station near Oslo, r Yn )- U.& '~ Nortcay (abot e), a motoristpays N ^1: A R - ny J6rgasoline by usung a bank debit "^ ~ card to charge the purchase to his ~ .a, bank account. Exxon's Eu ropean ^ my cfiliates are expandsng the use ofsuch customer-actitated equip-ment, uhich can acceptpaper 4AhAA ' currency as utilas crrdit and ~ ~ ' do bit cards. ft M m:vXua p tu e International Marine Business Prof de -International Marine 1984 1985 Fleet reductions' cut Operating COSTS. mons of donars Earnings /(loss) (63) (65) Average capitalemployed 828 640 data capture and data tran3-capital expenditures 5 1 Losses in Exxon's international mission for Exxon credit card 3, Research and development costs 2 2 shipping business continued, Master and Visa credit cards NNM " Average capacity,wortdwide oe,$e$itor,s and seiected bank debit cards. canea vesseis 12 0 11 2 quirements and freight rates Seseral European affiliates. cna<te ed vesse!s 15 15 which remained depressed for notably those in Belgium, Tota' 13 5 12.7 most of the year. Cost savings Denmark, Finland and Norway, associated with the company's expanded installations of cus-ongoing program to reduce tomer-activated equipment fleet size helped tolimit the w hich accepts paper currency impact on operating results. as well as credit and debit Exxon sold or scrapped six card 3. Connected to gasoline large crude oil carriers and pumps, such equipment allows three smaller vessels in 1985. stations to dispense fuel when This brought totalinterna-3tation attendant s a re otT duty. tional and coastal vessels in Exxon USA plans market tests t he company's operatin g and of 3imilar cash acceptorVeard tied-up flects to 84 and re-readers during 1986. duced fleet tonnage by 18 percent 10 9.7 million tons at year end. The company also provided for the disposal of several additionallarge crude carriers. These reductions will result in continuing sav-ings in opet ating costs. 13

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j .r; y4 .1v. ay, ..e x~ 34.. e + b i .i 1 Chemicals Business Profile -Chemrcals Chemical earnings I Earnings declined despite l 204 123 increased volumes. Chemicals revenue 4[ Exxon Cherna al sales volumes 43 41 43 45 evc ero ora wen e,nwn4ensrees : Average capital ernployed were higher in prim.iry petro-u i E 1 76 ' i hemicals polvmcrsmd 4

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i# 5 iV2 spe< ialties, but were lower in 0 7 - i ' 03 1 E2 ' agricult urali hemit als wher" 6 Capital expenditure s ,g, , g. shipment s were reduced due r 21 157 to the sale <if the cii:npanyk 4' 32c 13^ fert thzer pl; int in t he.\\ct her-2 Research ar'd development costs 12 la nd s. Re'. c M ue s and ea rmngs Return on average capital employed were dow n worldwide because 0 1981 1982 1983 1984 1985 11 of lower prices and depres sed 2 b Uldf Mlils whlt h f eilected t!st' ChemtCa!S mtensely ( t empt I!!l\\c ('ind t-fliins in t he Indust r\\. ^ Polymers and fabrcated pen 6xts Pnmary petuhemrCats l l O 14

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m a.,;uurm. ni, n:r~i r~ < l, rti a Et t ur: Lh,m: , fer u f r!. ou flar:t J:, v w F r op, e..! m 1N < t., n .. fl,i,:( : ' n be. 'lsi n l s fir ih ' }-b o th f r u o > a s g.; r.;:n 'r n: tho.% 9 Th he a to f r n!!< < o a ha ! r in mat, r ul u,ol t n m iwa fll>!r, s in,l a u nfo v i n do.! ?he 91 he rb::tu s [ r * !:n s,. -4 t.. s. S n, .c i u w. s + &Q t-t,..., e y, -.w. s-y , 3 - w _m + n t ofm ; mCh. I; GN _ # .%' ' k I xz-t ; : r ; \\...,,. p .n vau s- .t y p v r. n r t , - w Ethylene plant started Specialty chemical Restructuring steps up in Scotland. business expanded. taken in Europe. cd E u- ; e. aai-tris ed i nca -t -pet uit,, imnucals to the inaserm,o: re,t r uct u r in g o -tructn, u e m: i. Ex x'in der i! 'ca eth- - ;" r ' in in spet uh t he :n-tex tile anrl;. aper Indust ries. na n cs. thc oirniuns u dd it s ge ; air' i'. F:. m, .a n . -.arket s t brough prinF .ind brnadera d it s position in fertih/er plant in laizenburg, l!e Y< !llt s. w b : ol up 'Icir ' Q:::t n!. ph 'it t x p.insn rn i!r!!lIng inull-a!!d per bli the Nethe!! ands and t lt hed it s

n ( t iber,pr te--e-r.C sq;-

ir - unce i heran als for oil and et h%cr.e plant in Cologne. West ea-Squai-f ron t re l',rr 'rY h "h deve:op:ner - m-ea-product n.n. The i ompa ns t ier nuns. In addition. it s ole-

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t ompa n s alone with Euon ro o- .-:tn i p:. - *;.r.'- 'he 1a'. - a r, redtursp< F rara c. ;n. l sta rtin e t onst r uc pet roleoni nu r ket m e oper a-et', ne.,i ba - r ra : ,r i m? g1, i g : r: g.u..i.,' he; ,+1 <,f a ni A plui at li itiin t v in s in Sweden. -e,3-nuke p!a- - X er -

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-.L. ,.g-yS 4[ \\ 1 ,1 'J I, a. t l Edl) !. J. w e t l l \\ i h Coal U.S. coal output at a Colombian coal new high. shipments began. Coal production hxi -l'i ti 1 :i oi ; ~l L. fir-t ( t i.t l u.i, -h :ppe i t > > i c r,'x hi 1 ', ;.e i e te e s p. t in.i r k 't - in in i i fic 25-I . 2ti: ,i - ir*i w it h ('er rc:iin t 1 c.c a e, (,,, 0 : h ;,[- he h %.p. !. r k'>i ( ;i;a., per.: -uln Slupnic - r.i s. d i pu' tr he m-f< ir i e s ca r 't,t ale,i 2.1 n n: <.n 15-2

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p '- N1,,-t, >f t he pi r ni.me: t S w 'L* i i. t !. i. r ! -!, 'pp. :' e f. n li.' ',, - (e !t j ut' l. > pt ! e .).i' h,tse bet : i, ;.p'i t. d,,t t !g O'1981 1982 1983 1984 1985 l -'l - h i - L'er r e.'irl pn o t. in a h n h Cosomtxan - sur* ace i n sp:',.,i t !,, .d a + i E x x,, sr.a r. ..w ner h:p w: h Cancida - sarface c n.w, >- u,.m, ,!.t,,, h: e,s,.n,, i D 8 ; i<.t!s.. ip,i t ( )pe i a' UO'IN SIYOS < ;+' e r i 3 1 c: ;a r J' a '-a< cinphnn.JD '<!urir il-Surface c e - it.!! I i ;i 17f f (.,,1 l I, ij m it * ' Under<jrvd i' e ?:d *ii .sju it, ! i' i, +, ,,L. ,. p. 3, ' 't'. hit, D,, d ; L - h., t w i 16

l l Huge bonm ofshtp loader (left) at the ncic coalpart ofihrt Bolivar. f >mbia.duarfs thecranesbe-used in thepnalstagcs ofits i struction. Coalbrought by railfrom the Cerrejan mine some 100 miles inland is hltedfrom l stockpslesby bucketuheel y stacker / reclaimers and marrJ by convoyor beit to the shiploader, u hich can load i1.000 metric h, tons per hour into ships' holds. } j Mine, radroad andport are all r parts of the $3 billion Cerrejon h cualexport project. u hich made , ^* f prst shtpments in 19% 5 Drrssed for the heat, a u orker at ~ f the assavlaboratory of the Har-l w 4 bour Lightsgold mine in Western ? - Australiapils molds in a proce-dure knoten as a " pouring of Business Profile -Coal 1964 1985 pre."The su rlace mining oper-ation is teorking an are deposit Mom' ns l Earnings operaung mines 65 59 originally discovered bepire the New business and mine develoc ent costs 122) 120) turn of the century. 43 39 Average capital employed 1 057 1.333 7 l Capital and exploration expenditures 397 367 Research and development costs 8 3 i Revenue 327 357 rna es s so o ms M,nerals i

ecoverable reserves 11.070 11.040 Production 25 1 28 9

o. sign capacity Chile copper Gold mine began I

Eostingoperat ons 37 9 37.9 operations posted productionin Australia. l Under construct on 83 91 first profit. M'"'S Compania Minera Disputada Exxon's first gold mine, und$r d made its first profit from oper-Harbour Lights, produced e opment ation ofits two Chilean copper about 35,000 ounces of gold Business Profile - Minerals 1984 1995 mines despite continued price after commencing operation Earnings /(loss) weakness in world copper at midyear.The mine showed "" "N' N S operating resutt s (16) 1 ma rkets. Results were helped a profit for the year, as weak 1 Mine pre-development and dese!acment cost s (17) (9) by improved productivitv, as gold prices were offset by favor-E x ploratron costs the company increased pn>- able currency exchange and Average capitalemployed 352 359 duction by 21 percent to 75,000 steps taker to reduce unit i Capital and exploration expenditures 71 82 metric tons with manning operating costs. Exxon has a Research and development costs 4 3 levels unchanged from the pre-50 percent share and is the j Revenue 97 108 vious year. Most of the pro-operator of the Western trousams ee.,.c to"' duction increase was due to Australia property. j the 1984 expansion of the Recoverable reserves-contained metal Cccper 12.819 12.752 i Z nc 4.212 4.088 El Soldado underground mm.e. l Lead 353 388 Molybdenum 214 213 Gold-thousands of troy uus.ces 354 330 Production Ccoper 67 77 Gold-thousands of troy ounces 18 linesin operation Cocper 2 2 i Zinc / Copper 1 Go!d 1 i 17

6 Expansion ofHong Ksng's Castle Peakpourrplant (right, y t. Lustrouscoppercommutatorsat abotr) continued in 1985, as th< W In:ttgointoDCelectrsc motors prst offourgeneratorsplanned "g y"]. made at a Reliance Electrsc pr the "B" station on theleft \\ Companyplant in Gainesville, urnt on line ahead ofschedule; Y. Georgia. With plants in 18 states the "A" station on the right is in e and 14presgn conntries, the fulloperation. The expansion Cleveland-based afiliate ss a project teilladd over 4,000 mega-uvridleader in manufactursng wattsofcapacity by completion in and marketing motors, drstes 1990 to supply thegrowing de-and a bn>adline ofother indus-mand forelectric pourrin the plant $ market area ofKowloon trialequipment. k and the New Territories, seen on Using an automatic insertson thefarside ofthe waterin the machine, a technician (right) at viewof&ng Kongharborbelow. ~ ,v the Richland, Washington, plant ofExxon Nuclear Company placesafuel rodpiled with ura-nium pellets in a nuclearfuel assembly uhilea qualitycontrol inspector verines theserial numberand rodlocation. The 4 assembly ispart ofa rcioaddeliv-ery boundpr one of the com-panys utilsty customers. l l Reliance Electric Company Busines s profile-Other 1984 1985 Earnings ~ " ' " Earnings up on higher Rehance Electnc 11 30 Sales. Hong Kong pcwer generatron 88 90 Other operahcns 47 (19) 146 101 Sales revenues of Reliance Automate programmable con-Electric rose by 8 percent R nce E e rc 1.230 1,085 trollers, which provide comput-Hong Kong power generation 839 1,002 despite intense competition m erized control for motors and Other operations 1.530 1,655 its key markets, particularly relays. Its new remote under-capital and exploration expenditures from foreign manufacturers. ground telephone distribution Rehance Electnc 51 49 Iligher earnings reflected im-system, designed for servicing Hong Kong power generation 328 346 provementsin productivity residential customers, offers Ot her cperations 131 94 made by the company in recent significant savings to tele-Research and development costs 186 159 years as well as increased phone operating companies. s les.Therewassignificant The company decided to Revenue-Reliance Electric 1,538 1.667 Generating capacity-Hong Kong power (MW) 3.664 4.341 improvement in the motors sell the operations of Federal and drives businesses, and the Pacific Electric Company, company's telecommunica-a Relianceaffiliate primarily tions business posted record involved in making electrical e sales and earnings. distribution and protective Reliance introduced a line products for use in residential of fractional horsepower AC and commercialconstruction. drives and expanded its line of O 18

.m E ..s 1 + % z s m+; f' O Vong Kong Power Generation Other Operations Earnings increased as Exxon Nuclear power plant expanded. delivered 10,000th fuel assembly liigher earnings from Exxonk new conditions. Electricity Earnings from other opera-date in company plants at Rich-majority interest in electricity so!d to the Peoplek Repubhc of tions (includmg Exxon Nuclear, land. Washington, and Lingen, generating facihties m Hong China accounted for 8 percent Gdba rco, Zilog, insurance and West Germany, have contained Kon g operated by the Chma of Chma Light & Powerk real estate operation,) were the energy equivalent of over Light & Power Company tut al sales. down, due mainly to the ab-a billion barrels of oil. reflecte< the phased expan-3ence of tax deferral reversals sinn program now under w ay. which had added $79 million With 11iaur 350-megawatt to 1984 earnings in this coal tirea generators at the segment. Castle Peak "A" station al-1)eliveries of reactor fuel ready operational, the first of anemblies to electric utilities l four ti77-megawatt coal-fired by Exxon Nuclear ro se 22 per-generators at the "H" station cent. A re'oad shipment on started upahead of schedule August 9 contained the com-in 19G Const ruction con-pany's 10.000th fuel assembly. i tmued on the ot her three ti77-Since it began operations megawatt units miIcded in the in 19ti9. Exxon Nuclear has $3 bilhon Castle Peak project. provided fuel for more than 40 Electricity sales in Hong reactors in the l'nited States, eng grew by 5 percent. retlect - Europe and the Far East. Fuel . contmued f.n orable busi-assembhes manufactured to 19

h'- g -} ~ ~ y, -. - * ; s. p r s 4 M-R*' In appnriationforan Exxcn ,,p e, - LSA grant to the Houston % f y*. 3 Zoos' ;arge catjacihties, zoo g t,e y 0 f TC C ' 'W . opialun"ated an Exxon Day .s f ~ ^ For the outing, Exxon LSA g v N incitedchildn n and roun wlors y. D a from Big Brothers, residents g f %G, kr .s /* 4 e from the Cente,-for the Retarded. / &y and all Exxon employns in the y nuston area u ho contribute s ~ their time to these and othergood n! causesas participants in Exxon' UdunteerInvolvement s Program. lo quote a balloon, it iras a "Zoopendous" occasion. 3 3 Equal Employment Opportunity Public Service Programs Gains made by women Exxon's contributions Teacher education " Great Performances" and minorities. in the United States emphasized in series won 10 awards. totaled $61 million. Foundation's 30th year. The percentage of minorities Contributions of $61 million to Since its inception, the Exxon in its 13th season, the " Great in Exxon's U.S. work force U.S. public service activities, Education Foundation has Performances" public television grew from 19.5 to 20.1 percent which included $29 million m made more than $200 million series funded in part by Exxon and the percentage of women grant payments by the Ex xon in grants toimprove liberal won eight Emmy Awards and from 27.1 to 27.2 percent,in Education Foundation, were and technical education in two Prix Italia, a record for the spite of a reduction in the com-up 4 percent from the previous both private and public sys-series. Progra m highlights in-pany's U.S. employment. year. Support for education tems of higher education. cluded the San Francisco At year end, minorities held accounted for 53 percent of In 1985, the Foundation llallet's performance of "Cin-8.2 percent of managerialjobs, the total; health, welfare and began to give more attention derella " Luciano Pavarottiin compared to 7.8 percent a year community services received to an area of great importance the opera film "Rigolet to " ea rlier. Minorities' share of 20 percent: public information to elementary and secondary "Ilernstein Cond acts West professionaljobs declined from and policy research,10 percent; education-the professional Side Story" and a two-part 10.8 to 10.5 percent, partly due and arts and public television education which colleges and documentary on Sir Laurence to shifts into managerial ranks. programming,17 percent. universities provide to aspir-Olivier. Managerialjobs held by In addition, Exxon affiliates ing teachers. The largest of women remained at 8.2 per-abroad contributed $12 million several teacher education cent, while women profe-in countries where they oper. grant s was a $250.000 award sionals increased from 17.4 to ate. In Colombia, for ex-to the University of Washing-17.7 percent. ample, affiliates started pro-ton at Seattle to launch a U.S.-based division 3 hired grams to alleviate suffering project in which about a dozen 4,175 3eople for domestic em-and aid reconstruction in areas colleges of education will ployment in 1985. Of these, affected by the volcano erup. work together over the next 41.5 percent were women and tion, with imtial disbursement s five years to improve their 19A percent were minorities. exceeding $250,000. programs. 20

I E hANCIAL SECTION PAGE Financial Review Financial Summary 22 Management's Discussion and Analysis of Financial Condition and Results of Operations 23-27 Financial Statements Consolidated Balance Sheet 28 Consolidated Statement of income 29 Consulidated Statement of Shareholders' Equity 29 Consolidated Statement of Funds Provided and Utilized 30 Report of Independent Accountants 31 Notes to Financial Statements 31-38 SupplementalInformation on Oil and Gas Exploration and Production Activities 39-43 Supplemental Information Regarding inflation and Changing Prices 44 Quarterly Information 45 Operating Summary 46 O 21

Financial Review Financial Summary 1981 1982 1983 1984 19 Sales and other operating revenue Petroleum and natural gas $ 102.418 92,570 83.622 85,415 81,399 Chemicats 7.116 6,049 6.392 6,870 6,670 Coal 204 288 272 327 357 Minerals 83 80 115 97 108 Reliance Electnc 1.673 1.561 1.397 1,538 1,667 Hong Kong power generation 604 584 566 608 586 Other and eliminations 1,12_2 927 1 083 _1,018 833 1 Total sales and other operating revenue 113.220 102,059 93.447 95,873 91,620 Earnings from equity interests and other revenue 1,702 1,500 1.287 1 415 1 24_9 Revenue $ 114,9_22 103<559 94.734 97 288 92 6_69 1 1 Earn:ngs Petroleum and natural gas Exploration and production 4,117 3,431 4,079 4,789 4.937 Refining and marketing 1,132 1,141 1,156 408 872 International manne 29 (76) (101) (6_3) (65) Total petroleum and natural gas 5,278 4,496 5,134 5,134 5.744 Chemicats 238 93 270 430 249 Coal 13 23 37 43 39 Minerals (97) (95) (57) (52) (21) Reliance Electnc 29 (32) (33) 11 30 Hong Kong power generation 36 51 71 88 o Other operations (78) 14 44 47 i Corporate and financina (507) (323) (497) (298) (5. Earnings before special items 4,912 4,227 4,969 5,403 5,604 Foreign exchange on debt (32) 166 85 267 (2) Facihties restructunng (54) (207) (76) (142) (187) Hawkins provision (545) Net income 4,826 _ 4 186 4 978 5 528 4,8_7_0 1 1 Net income per share 5.58 4.82 5.78 6.77 6.46 Cash dtvidends per share 3.00 3 00 3.10 3.35 3.45 Net income to average shareholders' equity (percent) 17.8 14.9 17.2 19 0 16.8 Net income tu total revenue (percent) 4.2 4.0 5.3 5.7 5.2 Working capital 5,500 3,328 3,556 1,974 (1,734) Ratio of current assets to current liabilities 1.31 1.20 1.24 1.13 0.91 Property, plant and equipment, less reserves $ 35,286 38,982 40,868 42,776 48,262 Total additions to property. plant and equipment 9,003 9,040 7,124 7,842 8,844 Exploration expenses, including dry holes 1,650 1,773 1,408 1,365 1,495 Research and development costs 630 707 692 736 681 Total assets $ 61,575 62,289 62,963 63,278 69.160 Long-term debt 5,153 4,556 4,669 5,105 4,820 Total debt 8,186 7.303 5,536 6,382 7,909 Fixed charge coverage ratio (SEC definition) 7.5 6.5 9.5 9.7 9.6 Shareholders' equity $ 27,743 28,440 29,443 28,851 29,096 Shareholders' equity per share 31.95 32.84 34.80 36.84 39.83 Average number of shares outstanding (thousands) 864,926 867,959 861,399 816.169 754,0 ' Number of shareholders at year-end (thousands) 776 865 889 839 Wages, salanes, and employee benefits 5.832 5.993 5.849 5.550 5, Average number of employees (thousands) 180 173 156 150 146 22

Management's Discussion and Analysis of Financial Condition and Results of Operations view of 1985 ResultS Netincome-change from1984 MJhons of dollars 35 net income of $4.870 milhon was $658 milhon or 11.9 ercent lower than in 1984. Net income per share was $6.46. Retaryandwetg Cb iiO r down 4 6 percent. the lower percentage deChne in earnings ( per share reflecting treasury share purchases. Eworafm andprt JbCf@ kW Earnings befor specialitems, which exclude facihties

• " a Ctmals restructunng cha.ges. debt-related foreign exchange effects and the 1985 Hawkins lawsuit provision, were si T Cormemm

$5.604 milhon. up $201 milhon. on a per share basis. they rose from $6 62 in 1984 to $743 in 1985. I~~~L raeyneerwye on aea 1985 saw stronger earnings in both domestic and foreign ~ i Ha**"S prows,on petroleum and natural gas operations led by improved refin-ing and marketing margins. These improvemerts were more gg gg,,, ,gg g ,g ,g gg gg than suf ficient to offset the effects of lower chemicals earn-ings and higher corporate and financing costs. While earn-ings before speciul items increased 3.7 percent over 1984, lower foreign exchange ef fects on af fikate debt, due to the weakening dollar additional facihties restructuring charges standard for determining employers' pension expense for and midyear provtsons for the Hawkins judgment brought the pnncipal U s. plan resulted in a net pension expense net income below last year credit of $93 milkon for 1985 compared with a net charge Revenue tota'ed $92,869 milhon, down 4.5 percent from of about $49 milhon in 1984. $97,288 milhon iri 1984 Pnmary reasons for the dechne Further inventory reductions contnbuted $316 mill'on to include a 2 6 percent reduction in petroleum product sales net income from the sale of relatively low-cost UFO inven-volumes. lower average U s petroleum and worldwide tories compared to $594 milkon in 1984. Aporoximately 40 chemicals reahzations. and foreign exchange effects from percent of the 1984 ga,ns were associated with the discon-the translation of local currency reahzations. Hrgher average tinu ance of Aruba operations. tural gas and local currency petroteum products reahza-1s somewhat offset these dechnes, as did sales volume Petroleum and Natural Gas ,ocreases in overseas natural gas, coal. chemicats, Rehance Exploration and Production Electnc, and minerals. Earnings from exploration and production operations were ' Crude and product purchases dropped 9 percent mainly $4,937 milkon, up $148 milkon from 1984. In the U s., natural reflecting reductions in volumes purchased. Sof tening inter-gas eamings improved as higher average pnces (resulting national crude pnces reduced per barrel acquisition costs. from the expiration of old long-term contracts and a set-operating and selhng, general and administrative tlement of pnor-year contract issues) more than of fset a 16 expenses were down $346 milhon. Savings from pnor percent dechne in gas saies volumes. Lower crude and NGL restructunng steps. efficiencies and lower U s. dollar reahzations were partially offset by earnings from higher equiva'ents of local currency costs were positive factors. In pipehne throughput. Workover programs and property pur-addition,1985 implementation of the new accounting chases increased production in the lower 48 states, but Revenue and costs Net income Exxon's returns ( ah E] 2s-m l m m 20-9 l 60 4-7 y sme ,5 j Newy e - ] m 63 3-a oceynyrn a v e w ses to. 9='re em 1 4 2- ,a Return on "W!W5 sha'ehoicers' eqwty t r-T <s 1~ rms Crn u & Peturn on uwt:x:?m capital err 01cyed e em e C !1981 1982 19831984 1965 i1991 1982 19831984 1985 !1981 1982 1983 1984 1985 23

did not quite compensate for the absence of 1984 Prudhoe Corporate and Financing Bay equity redetermination volumes as U S. crude produc-Corporate and financing charges increased by $210 tion dechned 1 percent. mdhon reflecting pnncipally lower income from corporate Foreign exploration and production earnings of $2,826 portfolio investments and the absence of 1984 deferred mdhon were up $49 mdhon. Increased crude (up 6 percent) tax reversals. and natural gas (up 4 percent) production and lower effec-tive tax rates improved earnings, but were partially offset Foreign Exchange on Debt by higher production expenses, foreign exchange effects Strengthening of the dollar resulted in debt related foreign and lower crude poces. Far East production increased exchange gains in 1984 of $267 mdlion. In 1985, this was 20 thousand barrels per day (kbd) to 330 kbd, and Cana-reduced to a smallloss as a result of the weakening dollar. dian production rose 31 kbd to 145 kbd. Ef fective October 1,1985, the krone was determined to be Worldwide depreciation and depletion were up due to the apprc pnate functional currency for Norwegian higher production and investment, and exploration expenses exploration and production operations, rather than the U.S. rose reflecting increased activity and dry holes. dollar. Tte approximate impact of this change on 1985 earnings was a positive $60 mdhon in the fourth quarter. Refining and Marketing Earnings from refining and marketing operations rose $68 Facilities Restructuring mdhon in the U S. and $396 mdhon abroad as margins 1985 earnings included provisions for additional disposals strengthened from the severely depressed levels of 1984 of tankers, for the shutdowns of chemical and refining facih-Lower crude costs, the weakening dollar and firmer product ties in Germany and for disposition of Federal Pacific, an pnces were contnbuting factors. Overa!I sales volumes were affilmte of Rekance Electoc. Partly offsetting were gains down ref!ecting continuing dechnes in heavy fuel demand. from tle sale of marketing and chemicals facihties in Swe-Sa!es of motor gasohne and distdiates, pnmanly heating oil, den and a fertikzer plant in the Netherlands. The major 1984 grew LIFO inventory profits from the sale of relatively low items were provisions for discontinuance of Aruba and cost otocks tota'ed $299 mahon compared to $338 mdhon Exxcn Office Systems operations. as well as wnte of fs of in 1984 seve ral tanl<ers. International Marine ~ international manne losses of $65 maken were essentWly even with 1984 as Cost saangs from fleet restructunng about offset reduced demand for intemational ocean transportat.on services. Chemicals Earnings from Chemical operations worldmde totated $249 mdhon, down $181 mdhon as excess capacity depressed margins worldmde. Increases in basic petrochemicals and plastics sales volumes were partly of fsetting Eamings in the U S. were $81 mdhon lower mainly due to marg n de-chnes in olefins and plastics. Foreign earnings were Review of 1984 Results down $100 mdhon due to margin erosion and higher costs Net income of $5.528 milhon in 1984 was $550 mdhon or 11 associated with new facihties percent higher than in 1983 On a per share basis. earnings were $6.77, up 17.1 percent from $5.78 per share. Dunng Other 1984, 64.3 mdhon shares were purchased for the treasury, Earnings from coal operations of $39 mdhon were lower in and this contnbuted to the per share increase in earnings. 1985 reflect.ng reduced reakzations Petroleum and chemical revenues increased in 1984, as Losses frorn minerals operations were reduced to $21 demand increased in the first half with the strong economic mdhon pnmanly due to higher sales and productiwty ga:ns. recovery. However, growth slowed in some areas in the as world copper poces remained depressed second half of the year, and this, together with lower Earnings from Rehance Electnc operations rose $19 m1 weather-related demand and continued surplus supply, and kon to $30 mdhon ref:ecting improved sales and cost sav excess capacity, placed pressure on pnces and margins. ings from pnor restructunng steps Crude pnces weakened throughout the year and ended the Earnings from Hong Kong power generanon aere about year in an unsettled cond: tion. Worldwide downstream level, whde other operations were down $66 mdhon mainly operations suffered significantly from downward pressure due to the absence of 1984 deferred tax revarsals. on product pnces in most major markets. 24

Total operating expenses were lower as the increased International Marine - sts resulting from higher volumes worldwide were more International manne losses were $63 milhon in 1984 and In offset by cost reductions reflecting the continued $101 milkon in 1983.1984 continued to be af ected by lower phasis on efficiency and productivity improvements The international freight rates and dechning affikate demand for strengthening of the dollar further reduced the U.S. equiv-transportation services. Partly offsetting were cost savings a!ent of overseas operating costs. from prior restructuring and efficiency improvement steps. Further business rationalization steps included the deci-sion to withdraw from Exxon Office Systems operations, Chemicals to discontinue operations at the Aruba refinery and to Earnings from worldwide chemical operations totaled dispose of additional tankers.1984 net income included $430 milkon in 1984, an increase of $160 mdhon over 1983. the restoration to earnings of $149 mdhon of pnor years' The improvement occurred about equally in the U.S. deferred tax provisions. and foreign operations. Worldwide sales volumes were up A reduction in inventory contnbuted $594 million to net 12 percent over 1983 to 15.8 million tons, and margins income from the sale of relatively low-cost LIFO inventones improved. compared to $565 million in 1983. The 1984 gains asso-ciated with the d1scontinuance of Aruba operations contnb-Other uted about 40 percent of these profits. Eamings from a'l other operating segments combined were $137 mil Son, an increase of $75 mdkon from 1983. Petr:l;um and Natural Gaa A turnaround at Rehance Electnc was a major factor, with Exploration and Production earnings of $11 mdhon compared to a $33 milkon loss n Earnings from this segment were $4,789 mdhon in 1984, a 1983. A 10 percent increase in sales due to a stronger $710 mdhon increase over 1983. Overseas crude od produc-economy and positive effects of previous restructunng pro-tion increased 12 percent. North Sea production was up 38 grams accounted for the change. thousand barrels per day (kbd), and production in the Far Earn'ngs from Hong Kong power generation increased East increased 43 kbd. reflecting higher Malaysian pro- $17 milhon as the investment base continued to grow. duction and the impact of a newly developed Australian Lower earnings in segments of Exxon Enterpnses were field. Crude od production was about even in the U S. as about of fset by a portion of the deferred tax reversal. efforts to recover additional od from older, dechning fields

re offset by reduced Alaska volumes due to the comple-Corporate and Financing in of the make-up volume associated with the Prudhoe General corporate and financing costs deckned $199 md-Bay equity redetermination.

lion. Reversal of previously deferred tax provisions, higher Demand for natural gas improved in 1984. Production af ter-tax interest income and 1984 debt restructunng gains avadable for sale rose in the U S. to 2.485 milhon cubic feet were the pnncipal factors. per day (mcfd). from 2.345 mcfd in 1983. Overseas vo!umes increased 5 percent to 3.433 mcfd. Foreign Exchange on Debt Worldwide, denreciation and depletion were up due to Dunng 1984, the stronger dollar produced significant for-higher product on and investment, but exploration expenses eign exchange gains on overseas debt in those countnes were Dwer reflecting lower dry hole costs. Taxes were up where the dollar is the functional currency for accounting reflecting the production volume increase partially of fset by purposes. These gains resulted in $267 million of income in lower average effective tax rates abroad and lower windfall 1984 compared to $85 mdhon in 1983. profit taxes in the U.S. Facilities Restructuring Refining and Marketing The major items incluoed in 1984 were provisions for the Earnings from refining and marketing operations were $408 discontinuance of the Aruba operations and of Exxon mdhon in 1984 compared to $1,156 mdhon in 1983. LIFO ga:ns Office Systems and the disposal of tankers. The 1983 pro-were $338 mdhon in 1984, compared to $525 mdkon in 1983. vision included the shutdown of the Montreal refinery, Highly compet tive petro!eum markets worldwide served tanker disposals and the discontinuance of certain Rehance to depress product margins, whde the strengthening do!!ar Electnc operations. pushed up the local currency cost of crude supphes in foreign markets. ~ Petroleum volumes were up in total with a 4 percent increase :n foreign markets and flat domestic sales. This net gr} crease partly compensated for the margin reduction. / h Lj 25 L

Taxes Capital and Exploration Expenditures Provision for worldwide taxes decreased $0.5 biihon in 1985 In 1985, capital and exploration expenditures totaled $10.8 to $214 bilhon. Income tax expense. including current and bilhon, up 11 percent from $9.8 bilhon in 1984. deferred taxes, decreased $0 4 bilhon reflecting lower earn-The largest component of spending was worldwide ings. mainly in the U.S Excise taxes were down $01 bdhon, exploration and production development activities which while other tases and duties were even despite lower U S. tota!ed $7.6 bilhon, up $0.5 bilhon over 1984. U S expendi-windfall profits taxes. Taxes in 1985 were 23 percent of tures included acquisit:on of exploration and producing revenue up 1 percent from 1984. acreage. Also included were oil and gas development and The 1985 effective tax rate was 52.1 percent compared enhanced recovery projects. Most of the increase over 1984 with 50.6 percent in 1984. The absence of the 1984 de-was due to higher spending on development projects and ferred tax resersal was the largest single factor accounting programs such as the LaBarge. Wyoming natural gas and for the increase. carbon dioxide project. Activity abroad centered in Europe. Provision for worldwide taxes increased $0.1 bdhon in Canada. Austraha and Malaysia 1984 to $219 bdhon locome tax expense, including current Refining and marketing expenditures totaled $1.9 bilhon, and deferred taxes, increased $0 3 billion reflecting higher up $0 5 bilhon from 1984. These expenditures were pnmarily earnings in both domestic and foreign operations Excise for continued upgrading of refinery units and modemization taxes were up $0.1 b:lhon mainly due to higher Austrahan of retail stations with Ex xon's new design and identifi-crude production. Other taxes and duties decreased $0.4 cation system. A key project in 1985 was the Rotterdam bdhon. about half of which was due to lower windfall profit Flexicoking unit. which is expected to be completed taxes in the U S Taxes in 1984 were 22 percent of revenue. in 1986. Construction and mine development expenditures con-tinued at the Cerrej6n coal mine. The first dehvenes of coal were made in 1985. Over 95 percent of the worldwide expenditures were for energy-related projects. pnmanly petroleum and natural gas Chemical expenditures accounted for a further 3 percent o! the total Geographically. investments in the United States accounted for over 50 percent. or about $5 6 bilkon. In Canada and other Western Hemisphere areas, expenditureo totaled $1.4 bilhon. and in Europe and other Eastern Hemi-sphere areas. $3.8 bilhon was spent. The functional and geographic mix of the 1985 program reflects a continuation of pnor years' patterns Taxes Capital and explora6on expenditures Capital and exploration expenditures 25k l Ca a'ea '2-I >, tcctco 12N t jl 7' l 20 'O-u 8-3 i ~5 s.:a 6-Mmerais a'>d o??e's 6 D 5 FeJe w Chema s l 'ccme rves cre' other M Ere'gf crocess.eg <t-ma y,d mame rg r E c se ta es Esope y. g. bne' fuei anc:U es n 'ed Stres t ""C

1991 1982 19931984 1985 11981 1982 1983 1984 1985 1981 198219831984 1985 26

Liquidity and Capital Resources ,J(1985, funds from operations and other sources, before shareholders' equity plus minonty interest) at year-end 1985 p _ pncing, totaled $11.9 bilhon, up $0.2 bilhon from last year. was 21 percent, up from 18 percent at year-end 1984. v primary sources of these funds were net income of Dunng 1984, funds provided from operations and other e $4.9 bilhon, depreciation and depletion of $4.3 bilkon and sources. excluding financing, totaled $11.7 bilhon, down $1.4 changes in operating working capital which generated $1.1 billion from 1983. Changes in working capital which had bilhon. Financing activities provided an additional $1.5 bilhon generated $2.3 bil: ion in 1983 tota led $0.4 billion in 1984. compared to $0.8 bdkon in 1984. Increased short term This reduction more than offset gains from higher net debt more than offset a $285 million reduction of long term income and depreciation and depletion charges. Financing debt. In total, funds provided amounted to $13.5 bilhon. up provided an additional $0.8 bdhon, including $200 million in $0.9 bilkon from 1984 zero coupon notes issued in the Euromarket and $400 mil-Total funds utikzed were $14.3 bdhon, up $0.9 bdhon as lion for a capitahzed lease associated with the Odin field in additions to property, plant and equipment increased $1.0 Norway. In total, funds provided were $12.5 billion, up $1.2 bdlion to $8.8 bdlion. Dividends to Exxon shareholders bilhon from 1983. This improvement reflects a positive were up 10c per share; however, total dividend payments $2.6 bilhon swing in financing following 1983's reduction of dechned $134 million as treasury share purchases reduced short term debt. the number of shares outstanding. Dunng 1985. $2.7 b'llion Funds utdized in 1984 totaled $13.3 bdhon. Additions to was spent to acquire 54 mdhon shares of stock.This com-property, plant and equipment were up $0.7 bilhon to $7.8 pares with 1984's acquisitions of 64 mdkon shares at a bilhon, $2.6 bdhon was used to acquire treasury shares and cost of $2.6 bdlion. The excess of funds utikzed over funds dividends to Exxon shareholders totaled $2.7 billion. The provided resulted in a drawdown of $816 mdkon in cash excess of funds utikzed over those provided resulted in a and marketable secunties to $2.5 bdlion. reduction of cash and marketable secunties of $0.8 bi: lion Net working capital was a negative $1.7 bdhon as the to $3.3 bdhon. drawdown in the cash and marketable secunties, higher Net working capital totated $2.0 billion at year-end 1984, short term debt and accounts payable (the latter assoc - a reduction of $1.6 bdhon as inventories and receivables ated with the Hawkins decision) more than outweighed were lower in addition to lower cash and marketable secun-increases in receivables and inventones and reductions of ties. The ratio of debt to capital at year-end 1984 was 18 tacome tax and other payables. The $2.1 bdhon Hawkins percent, up from 15 percent at year end 1983. Ngment was paid in February 1986, following the Supreme (, urt's refusal to hear Exxon's appeal. The payment was The corporation maintained its strong financial position financed initially with intemally generated funds and short-and flexibikty to meet future financial needs. Although the term borrowing. Exxon anticipates that the cash outflow corporation has access to financial markets from time to wdl be reduced through income tax and other recovenes. time. internally generated funds cover the majority of its The ratio of debt to capital (short and long-term debt plus Snancial requirements. Funds provided Funds utilized Totalshort andlong-termdebt t4l l

{

10 i4- ) mm v ~ T2 M'M '2 - BR m p 8 'W y h & , ~ Nl q.m? 10 w s d M q m 6 e ~ s. i. Enon P:pekne p "' * - ^ ' magg company cett, pp on, pnmaHy for trans-A aska il S 6 6 iLXM p,pehne 4-t n si283 j Net soc' ease en cebt $ hare purchases - ,4 ggg - Qw l 4-4- otherU s ' f 50%A t redscocmn cett EiE28 C doi;ar debt ~ l. f y E' owced For gn tetore Lnanceg AD,t'ons !c plant currency debt bt981 198219831984 ' 985 0 u.cesci m s C,,gg,,ggy,933,gg439g5 bw e n 1 1981 198219831984 1985 27 l'

Consolidated Balanco Sh00t ERON CORPORATION Dec.31 Dec. ' 1984 19-. (millions of dotiars) Assets Current assets Cash $ 1.384 $ 1.078 Marketable securities 1,906 1,396 Notes and accounts receivable, less estimated doubtful amounts 7,366 7,527 Inventories Crude oil. products and merchandise 3.600 3,803 Materials and supplies 1,102 993 Prepaid taxes and expenses _1,881 2,558 Total current assets 17.239 17,355 Investments and advances 1,743 2,311 Property. plant and equipment, at cost, less accumulated depreciation and depletion 42,776 48.262 Other assets, including intangibles _1,520 _1,232 Total assets $ 63,278 $ 69,160 Liabilities Current liabil. ties Notes and loans payable $ 1.277 5 3,089 Accounts payable and accrued liabil. ties 10.845 13,359 income taxes payable _3J 4.3 _2,641 Total current liabilities 15.265 19,089 Long-term debt 5,105 4,820 Annuity reserves and accrued liabilities 3,478 3.3 Deferred income tax credits 8.948 1 1,C Deferred income 369 4 Equity of minority shareholders in affiliated companies 1,2_6_2 __1 J_82 Total liabilities 34,427 40,064 l Shareholders' equity 28J51 .29,096 Total liabilities and shareholders' equity $ 63,278 $ 69,160 n.e,ntorma%n on pgs 31 througn 38 is an integrat pa t cf inese s'a emems O 28

Consolidat::d Statement of Incoma ERON CORPORATION l 1983 1984 1985 (mdhons of dollars) Sales and other operating revenue, including excise taxes $93,447 $95,873 $ 91,620 Earnings from equity interests and other revenue 1,287 1,415 1,249 94,734 97,288 9.2,869 Costs and other deductions Crude oil and product purchases 46,709 48,962 44,536 Operating expenses 10,450 9.903 9,702 Selling, general and administrative expenses 4.948 4,969 4,824 Depreciation and depletion 3,526 4,073 4,274 Exploration expenses, including dry holes 1,408 1,365 1,495 Interest expense 749 400 627 Hawkins provision

• 948 Income, excise and other taxes 21,806 21,879 21,354 Income applicable to minonty interests 158 209 239 89,756 91,760 87,999 N:t income

$_4,978 $_5 528 $ 4,870 Per share $5.78 $6.77 $6.46

• Resuits for 1985 include a provs on of $918 mi:non, or $545 milhon r,et of income taxes. related to the Hawkins Field unit litigation hnsolidated Statement of Shareholders' Equity 1983 1984 1985 Shares Dollars Shares Dollars Shares Dollars (milhons)

Capital stock Authonzed-1 bilhon shares without par value issued at end of year 906 $ 2.822 906 $ 2 8_22 906 $ 242_2 c Earnings reinvested At beginning of year 27,211 29,515 32,302 Net income for year 4,978 5,528 4,870 Dividends ($3.10 per share in 1983, $3.35 in 1984 and $3.45 in 1985) .[2,674) (2,741) _(2J0_7) At end of year 29,515 32,302 _34J65 Cumulative foreign exchange translation adjustment At beginning of year (531) (1,070) (1,818) Change dunng the year ._L539) (748) 669 At end of year (1,070) (1,818) _(1,149) Capital stock held in treasury, at cost At beginning of year (40) (1,062) (60) (1,824) (123) (4,455) Acquisitions (21) (784) (64) (2,672) (54) (2,748) Dispositions 1 22 1 41 2 61 At end of year 16_0) (1,824) (123) (4,455) (175) _(71_42) 2 t ,areholders' equity At end of year $29J43 $28&51 $ 29,096 Shares outstanding at end of year 8_46 7_8;3 731_ l The informat:On on pages 31 through 38 is an integral part ct these statements. 29

Csnstlidat d Stat:m:nt cf Funds Provided cnd Utiliz::d ERON CORPORATION 1983 1984 19. (milhons of dollars) Funds from operations Net income Accruing to Exxon shareholders $ 4,978 $ 5,528 $ 4,870 Accruing to minority interests 158 209 239 Costs charged to income not requiring funds Depreciation and depletion 3,528 4,073 4,274 Deferred income tax charges 778 705 1,174 Annuity and accrued hability provisions 724 384 190 Dividends received which were less than equity in current earnings of equity companies (112) (70) (49) Funds provided from operations 10 054 10,829 10_ 69_8 Funds from other sources, excluding financing activities Sales of property, plant and equipment 417 227 288 All other decreases /(increases) in long-term items-net 322 263 (140) Changes in working capital, excluding cash and debt Reduction /(increase)-Notes and accounts receivable 466 534 (161) -Inventories 565 269 (94) -Prepaid taxes and expenses 813 (253) (677) increase /(reduction)-Accounts payable (692) (156) 2,514 -Income taxes payable 1,146 (28) (502) Funds from other sources, excluding short-term debt, cash and marketable secunties 3.037 856 _1,2 Funds provided before financing 13,091 11,685 11,926 Funds from /(used in) financing activities Additions to long-term debt 911 1,363 429 Reductions in long-term debt (798) (927) (714) Net additions /(reductions)in short term debt 1 880) 410 1.812 Funds from/(used in) financing activities (1,767) 846 _1J27 Total funds provided, excluding cash items 11 324 12,531 13d53 Utilization of funds Additions to property, plant and equipment 7,124 7,842 8,844 Cash dividends to Exxon shareholders 2,674 2,741 2,607 Cash dividends to minonty interests 117 123 131 Acquisition of Exxon shares-net 762 _2 631 2.687 Funds utilized 10,677 R337 14J69 increase /(decrease)in cash and marketable securities 647 $ 1806) $_(816) The information on pages 31 through 38 is an integral part of these staternents O 30

R: port of Ind: pendent Acc unt:nts To the Shareholders of Exxon Corporation ur opinion, the consolidated financial statements appearing on pages 28 through 38 present fairly the financial posi-3 of Exxon Corporation and its subsidiary companies at December 31,1984 and 1985, and the results of their oper-v ations and the changes in their financial position for each of the three years in the penod ended December 31,1985, in conformity with generally accepted accounting principles consistently apphed. Our examinations of these statements were made in accordance with generally accepted auditing standards and accordingly included such tests of the ac-counting records and such other auditing procedures as we considered necessary in the circumstances. 153 East 53rd Street New York, New York f March 3,1986 Not:s to Financial Statements The accompanying financial statements and the supporting talized and amortized on the unit of production method. and supplemental matenal are the responsibikty of the Costs of that portien of undeveloped acreage hkely to be management of Exxon Corporation. unproductive, based largely on historical experience, are The corporation's financial reporting is in agreement amortized over the penod of exploration. Other exploratory with the Organization for Economic Cooperation and Devel-expenditures, including geophysical costs, other dry hole opment guidehnes for multinational enterpnses and with costs and annuallease rentals, are expensed as incurred. the standards of the International Accounting Standards Depreciation, depletion and amortization, based on cost Committee. less estimated salvage value of the asset, are pnmanly determined under either the unit of production method or

1. Summary of accounting policies the straight-kne method as apphed, generally, to groups Principles of consolidation The consokdated financial of assets. Unit of production rates are based on oil, gas Otements include the accounts of those significant sub-and other mineral reserves estimated to be recoverable janes owned directly or indirectly more than 50 percent.

from existing facilities. The straight-kne method of depreci-Amounts representing the corporation's percentage inter-ation is based on estimated asset service hfe taking est in the underlying net assets of less than majonty-owned obsolescence into consideration. co npanies in which a significant equity ownership interest Maintenance and repairs are expensed as incurred. is held are included in " investments and advances." The Major renewals and major improvements are capitalized, corporation's share of the net income of these companies and the assets replaced are retired. is included in the consohdated statement of income caption Upon normal retirement or replacement, the cost of " Earnings from equity interests and other revenue." properties, less salvage, is charged to the allowance for Investments in all other companies, none of which is sig-depreciation. Gains or losses ansing from abnormal retire-nificant, are included in " Investments and advances" at ments or sales are included in operating results currently. cost or less. Dividends from these companies are included in income as received. Income taxes Income tax reductions ansing from per-centage depletion and U.S. investment credits are included Marketable securities Marketable securities are stated at in operating results as reakzed. the lower of cost or market. Foreign currency translation The " functional currency','as Inventories Crude oil, products and merchandise inven-defined under Financial Accounting Standards Board State-tones are carned at the lower of current market value or ment No. 52-Foreign Currency Translation, for translating cost (generally determined under the last in, first-out the accounts of the majonty of foreign refining, marketing method-LIFO). Costs include apphcable purchase costs and chemical operations is the local currency. Local and operating expenses, but not general and administrative currency is also used for exploration and production oper-expenses or research and development costs. Inventones ations that are relatively self contained and integrated of matenals and supphes are valued at cost or less. within a particular country, such as in Austraha, Canada, the United Kingdom, Norway (ef fective October 1,1985) perty, plant and equipment The corporation's explo-and continental Europe. The U.S. dollar is used for >n and production activities are accounted for under the operations in highly inflationary economies and in some ccessful efforts" method. Under this method, costs exploration and production operations, primanly in Malaysia of productive wells and development dry holes, both tan-and the Middle East. gibfe and intangible, as well as productive acreage are capi-31

2. Miscellaneous financial information Net income included $565 million in 1983,$594 mdkon Cash included time deposits of $722 million at the end of in 1984 and $316 million in 1985 attnbuted to the sale of 1984 and $405 mdkon at the end of 1985.

relatively low-cost crude and products obtained from draw Marketable secunties at year-end 1984 and 1985 were downs of LIFO inventory quantities. Carned at cost, which was $36 mdkon and $81 milkon, in 1984 and 1985, treasury shares were utikzed in connec-respectively, less than their fa:r market value. tion with stock options exercised, bonuses and stock appre-Estimated doubtful notes and accounts receivable were ciation rights under incentive programs. $165 milkon at the end of 1984 and $157 mdkon at the end of 1985.

3. Investments and advances Accumulated depreciation and depletion totaled $22,091 Components of investments ard advances were:

milkon at the end of 1984 and $25,501 mdkon at the end 1984 1985 e earch and development costs totaled $692 mdkon in In less than majonty-owned companies 1983, $736 mdkon in 1984 and $681 mdkon in 1985. Carned at equity in underlying assets Aggregate foreign exchange transaction losses included Investments $1,218 $ 1,379 in determining net income totaled $56 milkon in 1983. Advances 35 45 Results for 1984 and 1985 included gains of $109 mdkon 1.253 1,424 and $82 m: Ikon respectively. Camed at cost or less 106 105 Interest capitalized in 1983,1984 and 1985, in conformity 1,359 1,529 with Financial Accounting Standards Board Statement No. Long term receivables and miscellaneous 34-Capitakzation of Interest Cost, as modified by State-investments at cost or less 384 782 ment No. 71, was $271 milkon, $268 mdkon and $371 mdlion, Total $1.743 $ 2,311 respectively.

4. Equity company information These data exclude Aramco,in which the government of The summanzed financialinformation below includes those Saudi Arabia acquired dunng 1980 the beneficial interest in less than majonty-owned companies, except Aramco, for substantially all of the assets and operations. Aramco con-which Enon s share of net income is included in consok-tinues to have access to a significant volume of Saudi Ara-dated net income (sel Note 1, page 31). Exxon's earnings bian crude oil. Exxon's share of eamings of Aramco, af ter from these companies consist in large part of eamings from appkcation of adjustments, totaled $8 milkon, $77 mdlion natural gas production and d:stnbution companies in the and $14 mdkon in 1983,1984 and 1985, respectively.

Netherlands and West Germany. 1983 1984 1985 Exxon Exxon Exxon Total share Total share Total share (rrmiions of dailars) Total revenues Includes sales to companies in the Exxon conschdation which amoorted to 15% in 1983 and 1984 and 14% in 1985 $ 20,707 $6.372 $ 20,278 $6,181 $21.072 $6,415 Eamings before income taxes $ 3,594 $1,558 $ 3,283 $1,392 $ 3,277 $ 1.421 Less Related income taxes (1 698) (725) (1.477) (605) (1.405) (603) Earnings 1,896 833 1,806 787 1,872 818 Less Interest enpense (334) (110) (310) (96) (236) (70) Related income taxes on interest expense 156 50 148 45 114 34 Net income $ 1,718 $ 773 $ 1,644 $ 736 $ 1,750 $ 782 Current assets $ 6,701 $2.133 $ 6,006 $1,969 $ 7,784 $2,547 Propert/, plant and equ,pment, less accumulated depreciation 5.753 2.241 5.869 2.302 7.352 2,928 Othei long term assets 838 345 864 390 870 383 Total assets 13.292 4,719 12,739 4.661 16,006 5,858 Short-term debt 2,275 732 1,703 563 2,183 700 Other current katet'es 4,062 1,506 3,804 1,495 5.442 2,141 Long term debt 2,544 866 2.632 934 2,850 1, Other long term I:3Dihties 984 402 1.143 455 _1 452 Net assets $ 3,427 $ 1,213 $ 3,457 $ 1,214 $ 4,079 $1,3

• includes $1.000 ruon of liab+t es guaranteed by conschdated affiates 32

5. Investment in property, plant and equipment Investrr ent "N

Dec 31,1984 Add t.ons-1985 Insestment Dec 31.1985 Less (miikons cf doilars) Less U accumufated accumulated deprec.a' on depreciation and depst on United States Fore +gn Total At cost and depietron Petroleum and naturai gas Exp! oration and production $25 057 $ 3.595 $ 2.022 5 5.617 $ 42.529 $ 28.327 Refining and market:rg 7.738 602 1,228 1.830 16.221 9.420 International manne 771 1 1,463 559 Total petro:eum and naturai gas 33.566 4,197 3.250 7.448 60.213 38.306 Chem. cats 3.353 145 141 286 5.569 3.351 Other 5.857 247 863 1 110 7.981 6.605 1 Totat $42,776 $4.589 $4,254 $ 8,844 $73,763 $48,262

6. L ng-term debt The amounts of long-term debt matunng together At December 31.1985. long-term debt consisted of $3.246 with. sinking fund payments required, in each of the mdhon due in U S. dolars and $1.574 melkon representing four years atter December 31,1986, in milhons of dollars, the U S. dollar equivaient at year end exchange rates of are.1987-$702,1988-$367; 1989-$561; 1990-$320.

amounts payable in fore!gn currencies. These amounts ex-Dunng 1984, an affikate issued at a discount $1,800 mil-clude that portion of !ong-term debt, totahng $358 mohon, kon of zero coupon notes due in 2004. The affikate received whrch matures within one year and is included in current $199 milhon as proceeds from these notes. No payment of habikties Long-term borrowings at year-end 1985 are sum-interest is provided for by zero coupon notes. At matunty, manzed below. with weighted average interest rates in the $1,800 milhon will be paid to note holders At December p3rentheses. 31,1985, these notes were included in the United States dol-imaens cf donars) lars category of other consohdated subsidianes as follows: Exx:n Corporation (min ons of dollars) Aabng rate penut.on control revenue Pnncipal $ '.800 bonds-due 2012, 2013, 2014 and 2022 $ 390 Less unamurtized discount (1 575) Qer obhgabcos -due 1987 2022 44 $ 434 Total $ 225 Exxon Pipeline Company 8N% guaranteed detentures-due 2000 216 Dunng 1982, an affikate issued at a discount $771 milhon 5 50% manne terrmna' revenue bonds - due 2007 163 of deferred interest debentures due in 2012. There will be 8%% guaranteed detertures-due 2001 173 no payment of interest on the debentures pnor to matunty. 9% guarantped detentures-due 2004 153 At matunty, the holder of each debenture wiii be entitled to Other obbgations -due 1997-2008 130 835 a payment of interest of $730 in addition to the $270 pnn-cipal amount of the debentures. At December 31,1985, these debentures were included in the United States dollars Oth;r c nsolidated subsidianes category of other consohdated subsidianes as follows: Captaued lease cttgabons' United S'ates do!!ars $338 (mithnns of dollars) Other CurrenC!es 20_5 543 Pnncipal $ 771 United States do'!a's (8 4%) 1.639 Less unamortized decount _L648) Bntish pounds (81M 692 Tott I $ 123 Hong Kong dcitars (9 5%) 317 Canad an dollars (9 7%) 244 Deterred interest $ 37 Norwe7an kroner (9 4%) 51 French francs (70%) 39 in 1982, debt totahng $515 milhon was removed from the Other currencies (12 5%) 26 3,551 balance sheet through the creation of an irrevocable trust. ~ ~ ~ T;ta' long te'm debt $4.820 The principal and interest of the funds deposited with the trustee will be suf ficient to fund the scheduled pnncipal and 'At a, a. mage ernured rie'est rate ct 119% interest payment of these debt issues. Dunng 1983, $51 mil-hon of these debt issues were retired, leaving a balance of ( $464 mdhon at year-end 1985. i 1 33

7. Annuity benefits Charges to consolidated income for the cost of such Exxon and many of its affikates have defined benefit retire-annuity plans were $520 milhon, $328 milkon, and $115 mil-ment plans which cover substantially all of their employees.

kon for the years 1983.1984, and 1985. respectively. The Plan benefits are generally based on years of service and reduction in 1984 pension cost was largely due to assume employees' compensation during the last years of employ-higher rates of return on assets reflecting current and antici-ment. Benefits are pard from funds previously provided pated long-term performance. to trustees and insurance companies or are paid directly by Effective January 1,1985 the provisions of Financial the carporation or its affikates and charged against book Accounting Standards Board Statements No. 87-Employ-reser ses previously provided. In the company's pnncipal U.S. ers' Accounting for Pensions and No. 88-Employers' plan, covenng most U.S employees. funds are contnbuted Accounting for Settlements and Curtailments of Defined to trustees as necessary to provide for current service Benefit Pension Plans and for Termination Benefits were and for any unfunded projected benefit obligation over a adopted for the pnncipal U.S. plan Adoption of these stan-reasonable penod. To the extent that these requirements dards had the effect of reducing 1985 pension expense are fully cosered by assets on hand. a contnbution may by $144 milkon, such that $93 milhon of negatise pension not be made in a particular year. As of year-end 1985, expense was recorded for th's plan. as shown :n the follow-approximately three-quarters of the assets of this plan ing table. were held in equity secunties, with the remainder in fixed (mdlions of dojlars) income secuntres. Benefits earned dunng the year $115 Assumed aserage future rates of return on plan assets interest accrued on benef:ts were as follows: U S. plans-8 3 percent in 1983 and eamed in poor years 328 10.0 percent in 1984 and 1985: foreign plans-vanous rates Return on assets-actual (984) from plan to plan, from 4 percent to 15 percent. Measure-ass deferred gain 543 (441) ment of the projected benefit obhgation in 1985 in the Amortization of net gain at January 1,1965 _(95) pnncipal U S p!an was based on a 10 percent assumed Net negative pension cost for year $193) discount rate and an assumed 8 percent long-term rate of compensation increase U S Plans Foreign Plans Annu4 cians s'Os Dec 31.1984 Dec 3t.1985 Dec. 31,1984 Dec 31.r (rri thons of do:iars) Estimated amount of assets

• required to provide funds for future payment of:

Projected benet ts based on er picyrent serace to date and p esent pay leve:s Vested $ 2.773 $ 2,949 $ 1,991 $ 2.150 Non sested 136 179 148 180 Accurrulated benet t chhga!cn 2.909 3.128 2,139 2.330 Add.t ona! amcunts re'ated to projected pay increases 719 899 832 802 Tota! propred benet t obagron 3.628 4 027 2,971 M32 Actual amount of assets available for benefits Funded assets (market sa'ues) 4.789 5.537 1,799 2.249 Boce reser.es 137 71 959 lj28 Tutal assets 4,926 _5 608 2258 3J77 Assets in excess of/(less than) projected benefit t bligation $ 1,298 $_1581- $_(213) $ _245 1 Cons,st,ng cf-Unreccgoged ret asset est og at tN dWe of iriti apphca',cn of FAS No 87 (1/1<85) $ 1.298 $1.203 Unrecognyed not gin from fr.orable actuanal exponence since initial appbcation of FAS No 87 378

• Bred nn the assced ra% 3 iw mst/ n'/e1 0

34 l

8. Other post-employment benefits

10. Litigation In addition to providing annuity benefits, the company and On January 27,1986, the U S. Supreme Court announced hny of its affikates provide certain health care and hfe its decision not to review Exxon's appeal of the judgment in

, urance benefits for retired employees. Employees may the Hawkins case favonng the Department of Energy (DOE). become ehgible for these benefits if they retire with The htigation related to the pncing of crude oil produced annuitant status. These benefits are provided pnmanly from the Hawkins field in East Texas between 1975 and the through payments to insurance companies or contnbutions end of pnce controls in 1981. As a result, on February 27, to trust funds, based on the benefits paid dunng the 1986. Exxon, as unit operator, paid about $2.1 bilkon to the year. The company recognizes the cost of providing these U S. Treasury, representing an $895.5 mdkon judgment plus benefits by expensing the annualinsurance premiums accrued interest. The ustimated potential net cost to Exxon and trust fund contnbutions, which were $72 mdhon in 1984 was reflected in provisions against earnings in 1985 and and $78 milkon in 1985. earher penods and allows for recovery of apphcable wind-fall profits taxes, severance and income tax, as well as

9. Additional working capital data recovery from other interest owners in the field.

Consohdated notes and accounts receivab!e include: In other htigation with the DOE and unresolved adminis-1984 1985 trative proceedings, the DOE has alleged overpncing of approximately $520 mdhon Since some of the alleged over-(mdbons of dOHars) pncing relates to activities which continued beyond the Trade. less reserves of $152 mmion and $142 mahon $6.311 $6.215 penods covered by these allegations, with possible further liabihty for interest in some instances, cumulative amounts Other, less reserves of $13 m@cn and may be higher than those alleged by the DOE. The cor- $15 muon 1 055 1,312 $7366 $7,527 potation beheves its positions are correct and continues to defend them in all of these DOE matters. The alleged Notes. loans, accounts payable and accrued habikties amounts are also before appkcation of the corporation's unrecovered cost bank balances which the corporation con-include: tends should be apphed as credits against the alleged violations before amounts of overpncing, if any, can (mnons of dchars! be determined. C }kloans 747 $ 842 Claims for substantial amounts have been made against cnmercial paper 33 1 346 Exxon and certain of its conschdated subsid, anes in other 'Long term debt due utNn ore year 381 358 pending lawsuits, the outcome of which wdl not be maten-Other 116 543 ally important in relation to the consohdated financial posi-Total notes and loans payable _1,277 _3,089 tion of the corporation in the opinion of its general counsel. Trade payables 7.069 7,394 Haakins judgmert 2,C'69

11. Leased facilities Obbgat.cns to equ,ty ccmpanies 547 470 At December 31,1985, the corporation and its consohdated Accrued taxes other than income taxes 1.320 1,443 subsidianes held non cancelable operating charters and Otrer 1909 1,983 leases covenng tankers, service stations and other proper-ties for which minimum lease commitments were as follows:

Tota' accounts pajabie and accrued habill ties 10 845 13,359 Mnimum comm,tment neiated a"er reduct on for rental $12,122 $ 16,448 related rental income income Tankers Other Unused Itnes of credit for short term financing avadable (minions of dottars) at December 31,1985, totaled approximately $4,800 mdhon. 1986 $57 $380 $ 60 1987 31 200 60 1988 27 121 55 1989 19 92 53 1990 8 69 50 1991 and beyond 11 152 381 Net rental expense for 1983,1984 and 1985 totaled $1,235 mdhon, $1,204 milkon and $1,193 mohon, respec-O tively, af ter being reduced by related rentalincome of $69 ) ) milhon, $86 mdhon and $93 mahon, respectnely 35

12. Other contingencies stock appreciation nghts attached in anticipation of settle-The corporahon and certain of the consohdated sub-ment of such rights at market value of the chares covered sidianes were contingently hable at December 31.1985. for by the options to which attached. $54 mdhon was charge

$825 mdkon for guarantees primanly relating to notes. loans to earnings in 1984 and $76 mdhon was charged to cam-and performance under contracts This includes $330 ings in 1985 The exercise of such nghts releases the mdhon representing guarantees of foreign excise taxes and cmporahon from the obhgation of providing stock under customs duties of other companies, entered into as a the opt on at the option pnce normal business practice, under reciprocal arrangements Changes that occurred dunng 1985 in options outstand-Not included in this figure are guarantees by consolidated ing are summanzed below affikates of $1.090 milhon representing Exxon's share of obhgahons of certain equity companies, as shown in Note 4 1973 pio 1978 pian 1983 pian Additionally, the corporahon and its af fihates have numer-number of shares ous long term sales commitments in their vanous business Outstanding at December 31.1984 714.211 7,365,359 4.925 250 activities. all of which are expected to be fulfilled with no adSerse consequences matenal to the corporahon's consol. Granted at $53 06 idated f nancial posihon awrage per share 2.627,200 The Controller General of Venezuela has filed income tax Less Exercised 196.980 791.110 146.093 claims of approximately $275 mdhon for the pened January E m pired 400 800 66.500 Surrende vd 258.847 1.394.235 330.527 1.1970, to March 18.1971 against the corporation's af fik. ates operating in Venezuela in that penod The claims relate Outstanding at to aMeged retroactive apphcation of tax export salues es. December 31,1985 257,984 5.179 214 7.009 330 tabhshed by the goSernment on March 8,1971, to be ef fec. AvaMW fm grant aHe tNe from March 18. 1971 The corp 2 ration and its affihates December 31.1985 None None 5.490.950 beheve that there is no legal foundation for the claims The af fihates are defending their interests vigorously. utehzing the The average option pnce per share of the ophons out-apphtatJe procedures estabhshed under Venezuelan law standing a' December 31,1985, for the plans was $4019 The opera!'ons and eamings of the corporation and its The ef fect on reported earnings per share from the af fihates throughout the world have been and ma/ in the assumed exercise of stock options outstanding at year end future be affected from time to hme in varying degree by 1983,1984 or 1985 would be insignificant pohtical developments and laws and regulations, such as furced duestiture of assets, restnctions on produchon.

14. Bonus plan imports and exports pnce controls, tax increases and retro. The 1983 Incentive Program makes provision for grants of actwe tax claims. expropnation of property, cancellation of bonuses in respect of each of the five years beginning contract oghts, and polfution controls Both the hkehhood with 1983 which are not to exceed 3 percent of the amount of such occurrences and their overall ef fect upon the cor by which net income in a given year exceeds 6 percent of poration vary greatly from country to country and are not capital investe1 (as defined in the plan). Bonuses may be predictable granted to chgible employees of the corporation and of those affthates at least 95 percent owned Bonuses may be

13. Stock option plans granted in cash, shares of the corporation's stock or earn-The 1983 Incentr<e Program makes provision for the grant ings bonus units, which are rights entilkng the grantee to of options on a maxirnum of 13.000,000 shares of cor-receive on the settlement date, with certain kmitations, an pcration stock over the fae year penod ending May 31, amount of cash equal to the corporahon's cumulative cam-1988 A3 under earher plans. ophons may be granted at ings per share as reflected in its quarterly earnings state-pnces not less than 100 percent of market value on the ments as init ally pubksned, commencing with earnings for date of grant Options granted are exercisable af ter one the first full quarter following the date of grant to and year of continuous employment following dite of grant including the last full quarter preceding the date of The 1983 plan atso provides for granting stock appre-settlement Bonuses other than umts may be paid in cash ciation rights to holders of options under present and past or shares of the corporation's stock in full at the time of plans. wh+ch permit them to surrender exercisable options allotment or retirement or in annualinstallments Any unpaid in exchange f ar shares of the corporahons stock having an amounts are suMJect to certain forfeiture provisions con-aggregate market value at the hme of surre d er, equal to f ained in the plan the d f ference bet Acen the option pnce and market value Grants in cash and shares of the corporation's stock are of shares cosered by surrendered ophons. or to receive charged to earnings in the year of grant. Amounts earned such d.fference in cash under the condihons pro /ided for under earnir,gs bor'us units are accrued as they occur.

the stock appreciahon rtqhts Total charges to earnings in 1983,1084 and 1985 were $ Outstanding opt.ons for 13.004 820 and 12.446 528 mahon. $35 trulhon and $33 mahon, respectively, reflecting shares at December 31.1984 and 1985. respectuely had grants substanhally less than the maximum permitted [ l 36

15. Income, excise and other taxes 1983 1984 1985 United United United States Foregn Total States Foregn Total States Foregn Total Some taxes (ne ns of donars)

Federal or foreign-current $ 1,030 $ 2.676 $ 3,706 $ 992 $ 3.353 $ 4.345 $ 609 $ 2.857 $ 3.466 -deferred -net 165 777 942 457 271 728 534 597 1,131 U S tax on foreign operations 31 _ 31 (118) (118) 62 62 1.226 3,453 4,679 1,331 3.624 4.955 1,205 3,454 4,659 State 92 92 115 115 29 29 Total income tax expense 1.318 3.453 4,771 1.446 3.624 5.070 1.234 3.454 4.688 Excise taxes 1.047 3.839 4.886 1.205 3.814 5.019 1.264 3.683 4.947 Other taxes and duties' 2.117 10.032 12.149 1.843 9.947 11.7_90 1113 10M _6 11.719 Total $4.482 $17.324 $ 21.806 $4,494 $ 17,385 $21.879 $4,211 $ t 7,143 $21,354 Reconcikation between income tax expense and a Net deferred income tax expense, above represents the theoretical U.S. tax computed by applying a rate of sum of tax ef fects related to timing differences, generally 46 percent to eamings before income taxes: between amounts reportable currently for tax purposes and related amounts included in earnings for financial 1983 1984 1985 reporting. as follows-(milhons of dollars) Earnings before Federal and Tax effects of timing differences for-1983 1984 1985 foreign income taxes (*"' ns of donars) United States $3 046 $ 3.402 $ 2,627 Foreign 6.611 7.081 6.902 Depreciation $865 $627 $ 684 inventones 166 (24) 253 Total $9 657 $ 10.483 5 9.529 Intangible development costs 303 285 95 Theoretical tax $4 442 $ 4 822 $ 4.383 Hawkins provision (353) Adjustments for fore,gn taxes Otner (392) (160) 452 On excess of thecretical b S tax 412 367 279 Net deferred income taxes $942 $728 $1,131 C S de' erred tax on undistribt ted earnings (149) 1985 U S investment tax cred.t (173) (149) (229) U S tax on foreign operations 31 31 62 Tax effects of timing United U S research cred.t (19) (7) (4) differences for States Foreign Total Other U S ,_(14) 40 168 9' Depreciation $629 $ 55 $ 684 ta xpen e Inventories 1 252 253 United States 1.226 1.331 1,205 Foreign 3 45_3 _3R4 3.454 Intangible development costs 65 30 95 Total $4.679 $ 4.955 $ 4,659 Hawkins provision (353) (353) Other 192 260 452 Net deterred income taxes $534 $597 $1,131 Effective income tax rate. includ.ng income taxes of equ:ty companies and state income taxes-percent. 1983 1984 1985 Income taxes do not include $122 mdlion, $52 milhon and $44 mdlion ir 1983.1984 and 1985. respectively, of United States 41 3 44 7 44 4 Fore.gn 57 4 53 3 54 8 state franchise taxes which are based on income Total 52 5 50 6 52 i Possible taxes, beyond those provided, on remittances Exxon share of income taxes of equity companies included above totated $740 milhon in 1983, $593 milhon of undistnbuted earnings of subsidiary companies, af ter in 1984 and $604 mdhon in 1985, essentially a!I in the giving consideration to amounts which are reinvested in-I foreign area definitely, are not expected to be matenal n]udes U S und' ail prof.t ' tan cf 1853 rmthcn 1692 manon and 1540 makon in 1983.1984 and 1995. respectuely / 37

l i

16. Distribution of earnings and assets Segment 1983 1984 1985 Chem-Corporate Chem-Corporate Chem-Corpor Petroleum ca's total Petroleum cats total Petroleum cais it

"* # #^* Sales and operating revenue Non affiliated $ 83.622 $6.392 $ 93,447 $ 85.415 $ 6.870 $ 95.873 $ 81,399 $ 6,670 $ 91.620 Intersegmert 3.361 1,297 4.536 1,502 3,090 1,262 Totai $ 86;983 $.7,689 $ 93,447 $ 89 951 $8 372 $ 95,873 $84,489 $7,932 $91,620 1 Operating prof,t $ 9 616 $ 376 $ 9 694 $ 9.8 % $ 677 $ 10.584 5 10.463 $ 385 $ 10.956 Add /(deduct) Income taxes (5 076) (118) (5.090) (5.377) (247) (5.514) (5 326) (118) (5.408) Minonty interests (123) (1) (179) (155) (12) (233) (194) (5) (268) Eamings of equity compantes 804 18 841 835 15 864 848 (14) 832 Intersegment adlustments (87) (5) (65) (3) (47) 1 Corporate and financng _ (497) __(298) (508) Earnings before special items $ 5,134 $ 270 4.969 $ 5,134 $ 430 5.403 $ 5,744 $ 249 5,604 Add /(deduct; Foreign exchange on debt 85 267 (2) Facilit:es restructunng (70) (142) (187) Hawons provision __ (545) Net income $ 4_978 $ 5,528 $ 4,870 identiable assets $ 46 851 $ 5 304 $.62 963 $ 46.927 $ 5.246 $ 63.278 $ 52.884 $ 5.337 $ 69160 Depreciat>on and deptet,on 2.936 230 35:8 3.351 227 4 073 3.496 234 4.274 Add.t;ons to punt 5531 437 7,1.". 6.520 240 7.842 7.448 286 8 844 Earn rgs beto e Ident't'at GCographic _ sales and other operata) revanue_ _spec at items ass Non ittilated latera'ea Total (mdlions of dollars) 1983 Petroleum and chemicals Un:ted States $ 24.360 $ 994 $ 25.354 $ 2.440 $ 23.803 Other Western Hemisphere 16 032 1.912 17.944 293 7.838 Eastern Hemisphere 49.552 1.100 50 652 2.772 19.439 Intemat:ona! manne 70 414 484 (101) 1.020 Other/ eliminations . 3,433 (4.420) _ (90 7) (435) _.10,863 Corporate total $ 93,447 $ 93,44 7 $ 4,%9 $ 62,%3 1984 Petroleum and chemicals United states $ 25 430 $ 1.013 $ 26 443 $ 2.377 $ 24.921 Other Western Hemisphere 16.217 1.449 17.666 350 7.555 Eastern Hemisphere 50.584 568 51.152 2.900 18 834 internat:cna! manne 54 273 327 (63) 809 Other/ eliminations 3,588 (3,303) ._ 285 . [161) 11,159 Corporate total $ 95 873 $ 95,873 $5,403 $ 63.278 1985 Petroleum and chemicals United States $ 25 319 $ 904 $ 26 223 $ 2.463 $ 28.160 Other Wes'ern Hemisphere 14 397 287 14.684 473 7.367 Eastern Hemisphere 48 304 790 49.094 3,122 22.076 Internahonal manne 49 128 177 (65) 606 Other/ eliminations _3,551 (2,109) _1,442 (389) 10,951 Corporate total $ 91,620 $ 91,620 $ 5,604 $ 69,160 ansfers t+twe.m bumness y tmtes or amas a o at eshmated rearket prces $rnernab3naim$rAres$s are denved trEm nwnue? based on charges to other n .,tes et 4-ved e ,y,mfustry chaner U;d AmuNabhapMm1 in!+ rest is enchjee Werest eense O 38

Supplem:ntil Inf:rmati:n en Oil cnd G:s Expl:rcti:n cnd Producti:n Activiti:s This section provides histoncal revenue, cost, operating costs incurred and capitahzed costs, page 42, provides more ^{nings and reserve information regarding Exxon's oil and relevant information to assist in an evaluation of oil and gas ,h exploration and production operations dunng 1983, operations than the information on standardized measure of F 'i984 and 1985. In the company's opinion the information on discounted future net cash flows required by the Financial earnings, below, oil and gas reserves, pages 40 and 41, and Accounting Standards Board (FASB), shown on page 43. Other Australia T tal United Western Middle East and Ecrnin0s World Mde States Canada Hemisphere Europe and Afnca Far East (millions of dollars) Year 1983 Revenue $16.956 $8.136 $ 937 $ 72 $4.680 $ 45 $ 3,086 Less costs Produution costs

• 6.027 3.299 304 24 600 9

1,791 Exploration expense 1,364 788 49 85 246 30 166 Depreciation, depletion and amortization expense 2.306 1,481 87 40 481 12 205 7.259 2.568 497 (77) 3.353 (6) 924 Related income tan _4_m_36 1,078 3t6 2,262 3 477 1 Earnings from own production 3.123 1,490 181 (77) 1.091 (9) 447 Proportionalinterest in earnings cf equity companies 567 538 8 21 Otner earnings" 389 376 5 1 4 5 __L2) Total earnings from exploration and production $ 4,079 $ _1,866 $ 186 $ R6) $ 1,633 $_4 $_4_66 Year 1984 Revenue $18 236 $8.407 $ 930 $ 94 $5,159 $ 39 $3.607 Less Costa Production costs

• 5.712 2,792 301 18 572 6

2.023 Espioration expense 1.328 858 33 25 245 29 138 Depreciation. deplet.on and amortizatlon e> pense 1704 1.762 89 54 549 10 240 8.492 2.995 507 (3) 3.793 (6) 1,206 Related income ta= 4.689 1294 300 _(5) 2,506 5 589 Earnings from own production 3.803 1.701 207 2 1.287 (11) 617 Proportiona! interest in earnings of eavity companies 595 510 77 8 other earnings" 391 311 (4) 11_0) 81 12 1 -Oal earnings from exploranon and production $ _4,7_89 $2,012 $_203 Sj8) $1,878 $ 78 $ 626 ) br1985 Revenue $17,967 $ 8.107 $ 1,041 $ 98 $ 5.108 $ 30 $ 3.583 Less costs Production costs

• 5.902 2,707 376 23 708 18 2.070 E =ploration expensa 1.462 966 44 35 257 58 102 Depreciation dep* tion and amortrzabon e= pense

_2.847 1705 113 44 712 16 257 7,756 2.729 508 (4) 3.431 (62) 1.154 j Rewed ancome tan _4.085 1,175 228 1 2.088 3 590 Earnings from own productton 3 671 1.554 280 (5) 1.343 (65) 564 Proportionalinterest in earnings of equity companies 578 551 14 13 Other earnings ** 688 557 14 4 95 3 15 70 tat earnings from emptorahon and producteon $_4,937 $2,111 $_294 $J1) $ 1,989 $(48) $__5fs2 Revenuo Year 1983 -Sales to thed part es $ 5.051 $ 1.362 $ 611 $ 72 $ 785 $ 27 $ 2.194 Sa:es te consohdated a'til.ates 11 905 6.774 326 3.895 18 892 Year 1984-Sales to third part es 7,680 1,698 594 94 2.663 24 2.607 Sales to conschdated amtates 10.556 6.709 336 2.496 15 1.000 Year 1985 -Sales to third part.es 7.042 1.674 293 98 2.354 18 2.605 Sates to consolidated affil,ates 10 925 6,433 748 2,754 12 978 )

• Includes taxes other than income f ases SpeciftCafi/ included are U S " windfall profit" tas $853 (1983). $692 (1984). $540 (1985) and Austrahan encise tan $1,374 (1983) $1510 (1984). $1.653 (1985)

"locludes earnings re;ated to transportation of oil and gas. sate of supphes from othe sources includ.ng long term agreements with foreign governments. cil sands < parations and technical services agreements. and reduced by m nority interests l 39

Oil and Gas Reserves

• The following information describes changes durin] the additional wells and related facilities will te required to years and balances of oil and gas reserves at year-end recover these proved reserves.

1983,1984 and 1985. Proved reserves include 100 percent of each majonty-The definitions used are those developed by the owned affiliate's participation in proved reserves and Department of Energy for its Financial Reporting System Exxon's ownership percentage of the proved reserves of and adopted by the FASB. equity companies, but exclude royalties and quantitles due Proved reserves are the estimated quantities of oil and others when produced. Gas reserves exclude the gaseous gas which geological and eng.neenng data demonstrate equivalent of liquids expected to be removed from the gas with reasonable certarnty to be recoverable in future years on leases, at field facilities and at gas processing plants. from known reservoirs under ex sting economic and oper-These liquids are included in net proved reserves of crude ating conditions. They include scme reserves which may or oil and natural gas liquids. may not be produccle within the lives of ex: sting agree-Net proved developed reserves are those volumes which ments. In some cases, substantia. new investments in are expected to be recovered through existing wells with Other Austraka Tot al Un,ted Western Middte East and Worid ede States Canad& Hemisphere Europe and Afoca Far East Crude oil and natural gas hquids yndhons of barreis) Net proved developed and undeveloped reserves Beg nning cf w 1983 0,347 2,836 596 21 1,780 20 1,094 Re.:s. ors ct cre.'ous est ma+es 224 44 13 7 88 2 70 tr prmed reuo.er, 59 59 Ewnsiers and a scmeoes 405 128 156 2 118 1 Poduct on 1557) J285) J1D 15) _{135) _.9) (97) EN cf yev 1963 6,478 2,782 732 25 1,851 20 1,068 Reusicos ct crevous est, mates 155 67 16 3 (6) 75 trncrased <eca.ery 104 61 43 Puro ases et : a m sin plame 37 57 E stensors a d esco er es 270 33 152 2 69 14 Poduct on _J590) _G85) J14) g) 3 1.59) _{2) (113) End of year 19c4 6,474 2,715 909 24 1,754 18 1, Reusinos c' cra.4us est ma'es 168 92 16) 16 Improved rec m 86 63 19 4 Pur&ases c' - r e a s in p:3ce 141 43 98 r E nters crs a^d a sccwetes 467 90 18? 112 78 Pec&ct,on 3 3) J281) J) f) J152) _(1) (120) End of,e v 1985 6,733 2,722 1,067 33 1,728 115 1,068 Net proved developed reserves (included above) Bog rrang ct, car 1983 3 663 2 134 527 19 624 3 556 End cf ev 1983 3 v2 2.115 509 19 685 5 629 End of rw 1384 3 924 2.030 530 21 597 3 743 End of yev 1985 4 536 2 082 860 23 841 17 713 Proportional interest in proved reserves of equity companies End of year 1983 57 47 10 End of ye u 1384 69 58 11 End ef ev 1985 96 75 21 Supphes from non consohdated affihates Er'd of ev 1983 525 525 r Recewed dy rg 1983 9 9 End of yev 1984 509 509 Rece..e4 deng 1984 8 8 End cf yev 1985 437 497 nWeGed dormg 1985 7 7 Oil sands reserves End of,e r 1%1 179 179 Endet ev 1384 172 172 r End at jaar 1985 242 242 Worldwide net proved developed and undeveloped reserves (including non-consohdated and oil sands) End d year 1983 7 239 2 782 911 25 1.898 545 if Lnd of rar 1984 7 224 21 t 5 1.081 24 1.822 527 1A Er 4 of r v 1985 7.568 2.722 f.309 33 1803 612 1.0 e %e footryte en p m 41 40

existing equ:pment and operating methods. Undeveloped 1985 due to geological, technological and economic uncer- ^ serves are those volumes which are expected to be tainhes and therefore are not included in the tebulation.

overed as a result of future investments, pending or in Crude oil and natural gas liqu:ds and natural gas pro-

progress, to dnll new wells. to recomplete existing wells, duction quantities shown are the net volumes withdrawn and to install facikties to collect and dekser the production from Exxon's oil and gas reserves. These differ from the from existing and future wells quantities of oil and gas dekvered for sa!e by the producing United States proved natural gas reserves include 9,277 function, as reported c'i page 46. due to inventory changes billion cubic feet of reserves in Alaska for which a major and, especially in the case of natural gas, volumes con-pipehne would need to be constructed sumed and/or vented. Such quantities were not significant Reserves attributable to certain oil and gas discoseries in for crude oil and natural gas hquids. For natural gas, such the U.S, Canada. Malaysia, Thailand, Indonesia, North quantities amounted to approximately 183 bi!kon cubic feet Yemen, Chad. China Austraha, the U K, the Netherlands in 1983,157 bilkon cubic feet in 1984, and 192 bilkon cubic and Norway were not considered prosed as of year-end feet in 1985. Other Austraba Tctal Un.ted Western %dd e East and Wor!da de States Canadi Hermsphere Europe and Afnca Far East (brons of cub,c feet) Natur;t gas Net proved devebped and undeveloped reserves Beg rring of year 1993 28,676 16,461 1,350 241 6,650 4 3,970 Peus:cos of prewous est r ates t825 1.323 7 4 5C'6 (15) impra,ed recover, 9 9 Enters ons and d s wer es t 3C7 586 9 3 703 6 Product cn (1 516) (946) (66) (28) (365) (1) (110) Sa.es of rmrera's in race 11 022) 1 022) End o' yev t983 29,279 17,433 1,300 220 7,494 3 2,829 Revs ons of cres aus est rna'es $66 68 19 19 463 1 (4) Purmses cf rmrera s.n p ace 25 25 impraed recc. ery 30 20 16 Eversions and d scae< es t 501 1 315 6 2 171 7 Product en Jt,622) J7 7) 3 62) J40) J) 1 14) /7d cf year 1984 29,785 17.884 1,279 213 7,688 3 2,718 es.uns cf pre <cus es* mses 130 45 144 20 (204) 119 achases cf m,re'a s r EXe 49 49 'r p esed recocy 26 18 8 E. tens.cos and a s ser es 1242 840 54 4 342 2 P M uctcn J.1_5 % _,_ (8 7 4) j 52) $8) J447) J) J07) Erd of year 1985 29,723 17,962 1,433 215 7,379 2 2,732 Net proved developed reserves (included above) Begnnrg of,ey 1963 22 498 15 378 1153 185 3 280 4 2 498 End of >es 1933 23 010 16 366 1 127 163 3 251 3 2.100 Erd cf year 1984 23 160 16 194 1.100 157 3 568 3 2.138 End of year 1985 24 010 16 483 1 244 152 3 995 2 2.134 Proportionalinterest in proved reserves of c;uity cornpanies End cf year 1983 17541 17.441 100 End of year 1984 17.214 17.123 91 End cf year 1985 17 079 16 982 97 or'dride not proved developed and undeveloped reserves End o' rear 1993 46 820 17.433 1 300 220 24 935 3 2 929 End cf year 1984 46 999 17.884 1.279 213 24 811 3 2.809 Er,d cf year 1965 46 802 17.962 1 433 215 24 361 2 2.829

• Trese and over tat es as retej <n t s roport do nct inciude reser,e surch cost and otNr data ret'<.g to E nons eterest n the Arabian Amencan Oil Cc cag (A'amcc) beca 2se tre gwervent cf Sa o Aritra prv,t; ts the d.s osme cf cor f+nt a rtrrnahan un ser a d rect!,e isset ty the unister of Petrwom ar.d PMe*a Aesuces toa'rg Me ter 10 W2 Durrg 1%0 tre qwnment acquwd tre tm&w interest in sut stantia y aii of Aramcos aswts a-d creates Newr A<amco cor.t nues to tam access to a syn f cant ulume o' Saudi A*atran crude cd Qu ds reserves On p+y? 41 and rato $ g n reserms above (cGnptfod t1 Ud eQFvamnt bV'A'S Dased On 3 CGndrSICn factGr of Cr do il and raf f ai ]is I r

u s s th if,and CbliC eet W LWT) red'es**ts IP0 reseNes On an Od e'Ti 400t lais d'5cuWed in the HvoeW Of ite Year f r /% ,[ \\ l \\ J x.y 41

Oil and Gas Exploration and Production Costs The amounts reported as costs incurred in property This table summanzes capitahzed costs at December 31 acquisihon, exploration and deselopment achvities include 1984 and 1985 and certain costs incurred in cd and natural both capitahzed costs and costs charged to expense gas producing activities dunng 1983.1984 and 1985. dunng the year. The amounts shown for net capitahzed costs are Costs incurred in 1984 were $6.536 mdhon, up 16 percent $2.681 mdhon less at year end 1984 and $3.015 mdkon less from 1983 pnmanly due to higher expenditures for explo-at year end 1985 than the amounts reported as investments rahon drdhng and explorahon acreage in the U S. and in property, plant and equipment for emplorabor and pro-increased deve'opment costs in Europe Costs incurred duction in Note 5. on page 33, due to exclud:ng from the in 1985 were $6.924 mahon. up 6 percent from 1984 capilahzed costs certain transportahon and research mainly due to higher development costs in the U S and assets and assets refahng to the od sands operat ons of highar acquisition costs in the Middle East which more Syncrude in Canada and to includ.ng accumulated pro-than of fset lower U S acquisit on costs and lower European visions for site restoration costs, all as required by the FASB development Costs in Statement No 19. Other Austraha Tota! United Western %fde East and War % fe Sta'es Canada Hemmitem Eunte and Arnca far East Capitatued costs (meons of dobrs) As of December 31,1984 Pn perty wea r costs Prosed $ t.671 $ 1.506 $ 106 $ 6 14 $ 5 $ 34 Unprawa 4f65 3 P59 146 3 22 17 td ruty pr, g erty cats 5736 5 365 252 9 36 22 52 Prudong a se !s 23 574 14 JP, 1 281 236 5.435 59 2.188 Sopr urt taa e es t 043 400 tot 18 139 5 380 incompey, wnstre tmn 1 345 _ t,5n6 4 74 _3 872 76 414 Tota captaoir f costs 33098 21.586 210H 206 6 542 162 3 G34 AcwouM1 derewton dwe' un amort 13No an't ao B ng#;. r ens 11,522 7,921 _ 6]') _t 82 L7t 0 _46 __972 Ne' Wa red >t; $ 22,176 $ 13,663 $ 1,469 $ 84 $ 4,782 $116 $ 2,062 Pr pata:ns ir ' *st cf r et cac 'a zed n sts a eqct, w T r.es $ $ rj) g $p4 g 3c As of Decernber 31.1985 Prepor t, w rnig.+ a ', Prom t 1 2446 $ t 777 48 5 6 1 18 $510 urg rowd 14H6 12H5 144 27 7 23 ktitpr.re-;,- cts 5 912 5 062 242 6 45 517 60 Prod o nq n e', 28 236 16 4 M 1 811 260 7.260 150 2 319 Sug p rt ta. O a t t 75 440 98 19 194 48 376 inampew acs' s * & )en 2 204 291 11 Hw) 19 404 tota! ( apt.sJed u as 31 2 24202 2 442 2% HW 734 3.159 /u un ou'e! Sgo ' it on vp.'un v e! ze < m rd ae >n t e n "s 11910 . H 44a M7 2J4 2,o/ 7 _ ut _ t,154 Net c q ;ta. r t a $ 25,312 $ 15,362 $ 1,745 $ 72 $ 5,462 $666 $ 2,005 s Pn p atonai e a r et w ' n.,1 < sn nt e t, tf ( ( p g. r,e', M41 $ 7(y) $ 42 C sts 6ncurred in property acquisition, esploration and development activities During 1983 Pr..g er t, a qv ',o, v; $ 8n $ mH I 3 $ 11 $ 16 E.p n n o sts t 446 780 46 $ 50 3/H 25 2t7 Dewk (.trert. ', 't A } l.875 24) 21 712 11 4H1 L 't C $ 5,648 $ 3,463 $ 290 $ 71 $ 1,063 $ 47 $ 714 pmportu ne r, r, et of 1 e< "el t v e eq A s en c.n 19) $ 161 $ k1 Dunng 1984 Prq er t, a q n f :.c < t. $ 111J $ t.31 t 4 $ 1 $ 16 f=ph+rl':m o at, t 6tc IOU N $ 11 $ 32H 31 158 (' oer ( mer.t u y 1 %H I 771 Y)4 _I T t,106 29 __ 2'r) 73e $ 6,536 $ 4,116 $ 344 3 48 $ 1,494 $ 61 $ 473 P< por t n e iet, 9 ct. ,ts,,unrity equ<t, o N e., t78 $ 161 $ 15 Dunng 1985 Noen,+om' n(< $ 971 $ 445 14 $ 506 R E rp r v n < 1.746 1tbH L1 5 42 $ 151 75 t [ v.+ t c r e r., o,t ; 47M 2 M41 4 16 P6 50/ 55 P4 $ 6,924 $ 4,396 $ $21 $ 68 $ 943 $636 Pr p at,g erte ,t<tcmt,r u ede, e j, t, 4 or r g..i' eq $ A 19 $ 189 $ 20 42 l

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves The standardized measure of discounted future net give effect to events which have occurred since the year-Oh flows of proved oil and gas reserves is computed by end dates. lying year-end average prices and production costs, As noted on page 39, the company does not beheve ()tutory year end tax rates and a discount factor of 10 this information provides the most meaningfulinformation sta percent pei year Accordingly, year end projections do not on the results of oil and gas operations. Other Australia Total United Western Middle East and Worldede States Canada Hemisphere Europe and Africa Far East (millions of dollars) As of December 31,1983 Future cash inflows from sa:es of oil and gas $218.005 $ 97.212 $20.032 $353 $ 73.079 $ 578 $26.751 Future production and desetopment cash ccsts 86 493 42.467 8.873 234 23.448 275 11,196 Future income tan expenses 70.295 24,29_1 1198 3_2_ 628 97 7.081 Future net cash flows 61.217 30.454 1.961 119 17.003 206 8 474 Effect c f discounting net cash fiows at 10% 34 358 18,408 3 278 30 8 591 101 3.950 Standardized measure of d;scounted future net cash flows $_28,859 $_12,046 $ 1,683 $_89 $_8 4_12 $_105 $ 4,524 1 As of December 31,1984 Future cash ir%ws from sa!es of oil and gas $218.444 $ 100,208 $24.099 $316 , $c9.539 $ 526 $23.756 Future production and development cash costs 84 247 39.508 10.936 194 23.009 23t 10.369 Future income tai expenses 68.378 _2_6At M59 22 2L461 99 6 586 Future net cash flows 65.819 33.949 5.704 100 19 069 196 6,801_ Effect of discounting net cash flows at 10% 35.870 19.661 3.420 25 9 910 82 2 772 Standarduled measure of d scounted future net cash flows $__29 949 $_14,288 $_2,284 $_75 $ 9,159 $ 114 $ 4,029 1 As cf December 31,1985 Future cash inflows from sales of oil and gas $ 217.131 $ 100,950 $22.793 $403 $65 257 $2 996 $24.732 Future production and cevelopment cash costs 84 562 37.476 8 222 188 27,788 948 9.940 Future income tan expenses 63 843 _27,999 6 823 40 20.581 955 _7.44_5 Future net cash ficws 68.726 35 '75 7.748 175 16.888 1.093 7,347 Mect of d<scounting net cash tiows at 10% 37.904 21.193 _4,409 43 _M84 605 3M70 odardized measure of discounted jture net cash flows $_30,822 $ _1_4,282 $ _ 3,339 $132 $_.8,904 $_ 488 $_3,877 Proportional interest in the standardized measura of discounted future not cash flows related t3 proved reserves of equity companies' $4.224 $53 At December 31.1983 $4 277 At December 31,1984 4.361 4.304 57 At December 31.1985 5.53' 5442 89 Ch:nge in Standardized Measure of Discounted mdhon. The increase was pnmanly a result of reserve Futura Net Cash Flows Relating to Prnved Oil and Gas additions and the favorable effect of higher near term R: serves-Consolidated Affiliates production rates reflecting 1984 expenence. In 1983, the standardized measure e eased $956 mdkon in 1985, the standardized measure increased $873 mdhon, as a consequence of adding new reserves and revisions to malnly reflecting the value of reserves added dunng the existing reserves. year and the ef fects of lower locome taxes. In 1984, the standardized measure increased by $3,090 1983 1984 1985 (milhons of dollars) Value of reserves added dunng the year, due to estensions. discoveries, other adtt ons and 6mproved recovery. less related costs $ I.300 $ 2.463 $ 3 916 Changes in value of prevous year reserves due to Sa!es and transfers of oil and gn produced dunng the year. net of production costs (10 929) (12.524) (12.065) Development costs incurred during the year 3.363 3.588 4.205 Net change in prices and prodact'en costs (283) 240 (3 252) Aevision of previous reserves estimates 3,125 981 831 Accretion of discount 5 829 5.855 6 268 I Other changes (2,156) 3 544 (1.210) 707 1 057) 11_8_0 s i change in income la ses i l al change in the standardited measu e dunng the year 958 $ 3,090 $ 873 r 'See tootnote on page 41 i 43 J

Suppl:m:nt:1 Inform tion R:garding inficti:::n and Chrnging Pric:s The comparabikty of histoncal financial data is reduced Table i shows the results of operations in 1985 as reflect-over time due to the effects of inflation which results in the ed in the Consolidated Statement of Income (page 29) an loss of purchasing power of the reporting unit-the dollar. as adjusted for specific cost The largest adjustment is tc Since 1979, the Financial Accounting Standarcs Board depreciation, reflecting increases in specific costs of the (FASB) has required large U S. corporations to report, on a facMties over onginal acquisihon costs. Crude oil and prod-supplemental and expenmental basis, inflahon adjusted uct purchase costs also increased. reflecting higher current financial results The FASB's prescnbed method has proven (vs. histonc) cost of LIFO inventory quantities. controversial. and there is no consensus among preparers Table I also shows changes which occurred during the and users of financial statements regarding the best way to year as a result of inflation. The first of these is a gain treasure the impact of inflation Thus, the data presented resulting from the effect of the dechne in the purchasing on this page should not be viewed as precise measures. power of the dollar on the net monetary amounts owed but indicators to be used in conjunction with other informa-by the company Most of the company's current assets, tion about the company's abihty to cope with inflation except inventories, and the current habihties, long-term debt The data in the Tables are presented in accordance with and deferred income taxes are monetary items, the FASB's guidehnes for current cost disclosure. The The second change represents the extent to which method used adjusts for the current. or specific, costs of changes in the specific prices for inventory and property, insentory and property, plant and equipment. The current plant and equ'pment dunng 1985 differed from the increase cost of inventory is the estimated current cost of purchases althbuted to the ef fects of generalinflat.on as measured by or production, depending on the company's norma' sources the U S. CPI U. ct supp!y For the most part the Current cost of plant and Table I-Financial results for 1985 adjusted for ewpment represents repfacement in-place and in k:nd, by changing prices way of new construction, less an anoAance for accumu-mens of dyys> lated deprectat.cn proportionate to that apphcable to the Ad,usted ter eosting assets No consideration has been gwen to posso 1985 specite ble repucerrent of assets of a d,f ferert type. at a dif ferent Urad osted costs i location or uth improsed operating cost ef ficiencies The incorne front continuing operations Total reserue specific costs used ande behesed reasonable, are neces $32f69 $92 669 costs and ciner deductions sanly subjective They do not I acessardy represent amounts crude oa and product ourchues 44 536 45 e for which the assets could be sold or costs ahich adi be Deprecia' on and dermc n 4 274 6 incurred or the manner and entent in which actual replace- ) ment of assets wdi occur Totr costs a,d ct%r ded;ct.cns 8}95 9 0 i 91 More specif ca'ly, land, other than Od and gas acreage. Incnme from cort numg operar ens $ 4T70 $[2]t 74 has been va!ued based on apprarsal or sstimated current Ga n Uum dechne.n the purcnas.rg power et net market pnces Od and gas acreage costs have been amunts owed $ 717 cha c pnas wms grew econ updated using the U S Consumer Pnce Inden for Urban (t 243) Consumers (CPI U) Development costs of od and g3s Prcperty p ant and eq ; pere"t 2 485 propert;es were measured by use of appropnate indices or I"*et' os (at gar endt 54796 to 197 or m nd m e nt M g r on e e 62 73 SM eshmates of current dn!hng rtatenal and equ:pment costs. i Other p! ant and equ.pment for the most part. Was updated by use of internMly de, eloped construction cost indices TahMs ll and Ill. below, show a five year summary of key items such as autometwe equipment and othce budding 3 financial results adjusted for changing pnces and for were costed at current market poces general inflat on. respectwef y T ble Il-Five-year surnmary of financial results adjusted for changing prices ImAons et durs eor t car sN o a%unto n.orir 1H5 d*am 1981 1M2 1%) 1984 1985 Womonmwt v corr w cne m ors $ t 793 (330) $ 1 762 $ 2 n25 $ 2. t 74 Per share 2 07 ( 37) 2 04 3 58 2 88 G rn f rom de r e,n p.ms r g ruerrfrrt t w ts n6ed 1266 620 607 626 717 increveadM'ea W 'n ne 'A D' c es s r tas gee 4 i@ v m for m orhnes rd t.rmery part n eg i rront 3 825 5 817

1. 3 0%

(3 929s 1242 o F orryn vrec, mnvaton a tastenet f4,ft6) (1 570) 12 213; (2351) 919 Shvemws e at rv e"1 75 781 77.072 68 h2 60.302 57.090 Tcble lll-Supplementary data adjusted for generalinflation ra.rray t=5 en Uai reverue w e n $135 932 $115 416 $ 102 2 30 $100 759 $92 C+dets per sr vo 3 55 3 35 3 35 3 47 ~ Wrket once a' ver ord W snee 35 % 3P. 40 % 40 S E A, era ;a mesumer pr c e mde I1967 - 100) 272 4 N91 298 4 3111 322 2 hor'PY I dbOM djN } ) Par Jrja$Pd on a vef f je cGD$.ifW (.f (O l dei Wmwe) 10 4 % 61X 32' 43% 36% P 44 i

Quarterlyinformation 1984 1985 First Second T hird Fourth Fir st Second Third Fourth 8marized financialinformation Quarter Quarter Quarter Quarter Year Quar ter Quarter Quarter Quarter Year Sales and other cperat,ng revenue (mission) $24.498 24.031 23.219 24.125 95 873 22.883 22.695 22.099 23,943 91.620 Gross profit (mditon)* $ 8.485 8,597 7.887 7,966 32.935 7 850 8 216 8.083 8.959 33.108 Net income (million) $ 1.475 1 350 1.275 1.428 5.528 1 325 745 995 1.805 4.870 Netincome per share $ 1 75 1 63 1 58 18 t 6 77 1 71 99 1 33 2 43 6 46 Dividends per share 80 85 85 85 3 35 85 85 85 90 3 45 Stock prices High $40 000 43125 45 375 45 500 45 500 50 875 54 250 53 875 55 875 55 875 Low $ 36125 38 000 38 000 41 000 36 125 44 125 49 250 49 375 49 000 44 125 The price range of Exxon stock is based on the Composite At February 10,1986, there were 776,172 holders of record of Tape of the several U.S. exchanges where E xxon stock is Ex xon stock. traded.The pnncipal market where Ex xon stock (xON)is traded On January 29,1986, the corporation declared a $.90 is the New York Stock Exchange, although the stock is traded dividend per share payable March 10,1986. on most major exchanges.

• Gross prof ! equais sa'es and other cperahng resenue tess estimated costs associated M1h product s sold n

) u-Exxon Dividends, Share Price and Return to a Shareholder Adjusted for Generallnflation The first two charts below depict histoncahnformation as shown on the third chart for various periods pnor to year-end shown by the bars, w hile the solid line plots trends in average 1985.The before tax returns are shown on both an unadjusted 1985 dollars (adjustments made using the U.S CPI U). basis (blue bar) and adjusted f or generahnflation, as measured The return to a shareholder f rom holding E x xon stock is by the U S. CPI U(gray bar) Dividends to Exxon shareholders Exxon share price Return to a shoreholder from holding Ex xon stock nem ee sen< m s e,,e e-.1 ,, - w.e a G { 5-l e-I 'N e1 ss n. 4 ].. 2-30 - l 'O n f ) 5 'o I 6 J ,', r 1 M1 id2Ri]Ridl211 .uall2HJHUM4 DDJ 25 45

i i Operating Summ:ry 1981 1982 1983 1984 1985 Net production of crude oil and natural gas liquids (thousands of barrels daily) Net production United States 752 740 781 778 766 Canaca 94 95 90 93 116 Other Western Hemisphere 11 10 14 16 13 Europe 194 289 370 412 417 Middle East and Afnca 39 5 5 4 3 Austraba and Far East 230 228 267 310 330 Total conschdated af fikates 1,320 1.367 1,527 1,613 1,652 Proportional interest in production of equity companies 32 33 32 21 20 Oil sands production-Canada 26 18 23 21 29 Worldwide 1.378 1.418 1.582 1.655 1,701 Refinery crude oil runs United States 1,111 989 958 1.021 1,054 Canada 430 366 378 365 344 Other Western Hemisphere 401 375 341 295 98 Europe 1,472 1.324 1,135 1,111 1,003 Midd:e East and Afnca 12 8 5 4 5 Austraka and Far East 452 434 449 424 399 Worldwide 3.878 3.496 3 266 3,220 2,903 Petroleum product sales Aaation fue:s 323 330 316 312 326 Gasoline. nachthas 1.369 1,346 1,344 1,380 1,397 Home heatirg oils, kerosene, diesel ods 1.324 1.299 1,280 1,349 1.343 Heavy fuets 1,051 849 681 685 539 Specia:ty practs 534 486 464 466 477 Total 4.601 4,310 4.085 4.192 4,082 United States 1.295 1,174 1.146 1,149 1, Canada 439 408 393 407 Other Western Hemisphere 459 453 436 400 3 Europe 1.807 1,704 1.566 1.684 1,629 Other Eastern Hemisphere 601 571 544 552 549 Worldwide 4.601 4.310 4,085 4,192 4,082 Natural gas production available for sale Net production (mdhons of cubic feet dady) United States 3.065 2.594 2.345 2.485 2.085 Canada 186 186 181 168 141 Other Western Hemisphere 82 72 70 70 69 Eurcpe 799 773 851 1,069 1,086 Middle East and Afnca 46 1 Austraha and Far East 251 264 225 215 231 Total consohdated af fuates 4.429 3.889 3.672 4.007 3.613 Proportionalinterest in production of equity companies 2.191 1.860 1,956 1.911 2.048 Worldwide 6 S20 5.749 5 628 5.918 5,661 (thousands of deadweight tons, daily average) T:nker c1pacity, owned and chartered 21,880 18,930 15 820 13.540 12,720 (thousands of barrels daily) Pipeline throughput 2,740 2.624 2.600 2.694 2,933 Opera rg see st cs omer f*aa spesce thr%p at,rcrude 100 percent of uer P penre INoutput represents quantat4es da% era f for E = =on by art compan e5 in o af.ons of reatorit, owned a"ma*es for over rompames gas ami crwie product.on

• h*c h a stock interest is held Net product <on enciudes royalties arv1 quant:tres due t ri C fJde E a aOn s C*nersh'p Ie' Cent 4Q8 and Crude r# 5 include Quant ties Other5 When [Voduced whetbet payment is n a 14 in bind of cash proc @Ssed for E ason O

46 m.u o nr,,vo I

Dirzctors Officers Waham A Andres Retored Chairman or the Executive C C Garvsn.J-Chairman or the Board and Chief Committee. Dayton Hudson Corporahon Executive Otticer {retaangl L G Rai Pres, dent F Bennett Senior Vrce President J F Bennett Senior Vice President Rando!pn W Bromery Commonsea:th Professorcr J G Clarke-_ Senoor Voce President Geophysics. Uraers,ty of D K.Mcivor Senior Vice President Massachusetts at Amherst President. Weston Geophyscal M E.J O'Loughhn Sensor Vice President international Corporation L R Raymond Senior Vice President J G Clarke Senior Vice President C R Sctter Sensor Vice President C C Garvin,Jr Chairman of the Boardand Chiet R H Beresturd Vrce President-Petroleum Products Enecutm e Orticer E R Cattarulla. Voce Presidenland Secretary Jess Hay._____- - --- Chairman or the Board and J D Crutchheld Voce President Choet Enecutrve Ottcer. Lomas & Nettleton Financial R N Dolph Vice President Corporation [ mortgage bannung. R M Ingram Vece President .nsuranc e and other financial serwces) W D Kruger Vice President-Gas Wuham n Hose:I_ Chwiman or the Board and Ch.et n 3 gru,tenga Voce President-Corporate Plannrog ) E.ecutwe Ottoce' J C. Penney R S Lombard_ Vice President andGeneralCounsel Corrpany inc [ department stores l an i catalog cha.n] H E McBraye Vice President $4r Hector Laing _ _ _ Cherrman. United Biscuits G B McCullough_ Vice President-Employee Relations 8 l (Hodngs) plc ltood and con ectionary T J McDonagh. Vice President-Medicine and prod acts. restaurants l Enveronmenfa/ Health Phip E Lrp,ncet' Charman, President and Chief Randall Meyer __ V,Ce President A L Monroe __ _ __ Vice PresidentandController S tFape pany [sanitar y paper pnnt,ng and pubhshing papers. torestry W 8 Nobles.Jr _ Vice President-Communicat#0ns operaticnsl andComputer Sciences D S MacNaughton Chairma,0! the E secutive Committee. F M Peduns. Vuce President-Producing i HospitalCorporahon of Amenca t~ A Robrnson_ Vice Pres dent and Treasurer [hosatai rwnersh p and man.yementl \\ Meg. vet L A U.ncycar-__ _ Pro fe s sor ot Phy sic a! Science and Cec d Counsel d Ida Gu en Professat or Educahnn. i a;assachusatt;lr t tute otiechnology O E Smacy-_ - Voce President-WashingtonOttice f P. m " ~ ~ ~ ' knaldV Uckr-censor Vice President A E J O Lourfdin _____ _ _ Sen,or Vice Pes.nent - ~ ~ - - - - - Mar t hil PWr son _._._ - - _. Presdnt Empfus. Beloit Conege Chief Executives, Reg'ionaland Operating Organizations Ber t Phnps. -___ _ _ _-. _ _ Pet red Chairm in of the Bord. C' ark Equ+mer t Company lmatenal hedbog and construction er upment. DI.VISIOM OF__ E X XON COf P_On AT_I_ON an!es and transm.ssionsl J D Crutchfield _ President. Esso M<ddle East L G Ris! _ Pres cent H H Dotph__ President, Esson tnternational i L R Rnmond_ - - -.. Senior Vrce Pres &nt Company ] Haruh t A Shaut) - __ _._ Pet red President and Chier E # echo n M Inmanu- __ PresidenL Ea son Monerats Company OMcer Campt>cil Soup Company H E McBrayer_ _ __ _ Present. En von Chemica/ Company pood processing l Randall Meyer _ __ _ _ _ ___ President. Esson Company. U S A Chartes R S.ttrr - - - - - Senior voce President a L Y Strohl-i Of to Waltf von Amerangen._._._ Ch&rman of the Management Board Presodent, Es son Enterpnses { and Ch et E necuto e Onicer. atto Wollt AFF ILIATE D COMPANIES ) AG [.ron and steel mar.hiner y and j metalurgical product sl D R Clair President Esson Research and Engineering Company Committeesof theBoard A R Haynes--- Chairman or the Board. smpenalO,1 ) bmeted E A Humble-- President. Esso E sploration Inc Aud t Comm tten _ __ _ _.__ M Peterson (Ch+rman). I Y------- - P dM'EmEM W H A Shaub(Voce Cha.rmant a W R HoseII.H La:ry D S MacNaughton J C Murley _ _ _. _. _ __ Pros, dent.Seliance Electoc Company M L A Ms.Vcar B Vhuf,ps 9 a pvx _. -. Prq s&nt. Esso Europo lnc q (kwd Advisory Commdtee L W Welch. Jr _ _.___ _ President. Esson Product #on on Con'nbutions _ _ _ _ _ _ _ _ _ J G Clarke (ChairmanA Research Company EYi r N E * ** - - ----- hmkot N Inter Amencarnc. A r1 J v tt. I M Peterson Bo;Fd Cumpr Commit tee _'nsat on_ _ _ _ _ _ _ _ D S MacNaoqhton(Chairman). B PhilDps (Vice Ch+rmanA W A Andres.W R Hosell,H A Shaub l _. C C Garvin. Jr (Chairman). secubve Committee _ L G Rant (Vice Chairman). l A W Bromery W R Howell.H A Saaot) Nominaf nq Committee _ ____ _ C C Garvin.Jr (Chermaal R W Bromery. J Hay.H La,rq M L A MacVcar I --}}