8-KOther Events

EXXON MOBIL CORP 8-K Report (Dec 20, 2002)

Filed December 20, 2002For Securities:XOM

Summary

ExxonMobil Corp. (XOM) filed an 8-K on December 20, 2002, to announce significant changes in how it will present its financial segment information. These changes are driven by the divestiture of its copper mining business in Chile and Colombian and Australian coal operations, along with the reassignment of management responsibility for certain continuing operations. Specifically, the company will now report its divested coal and minerals businesses as discontinued operations in its 2002 annual report. The company is also reclassifying its electric power generation operations (primarily in Hong Kong) from 'other operations' to the 'non-U.S. upstream' segment. Remaining U.S. coal operations will move to the 'U.S. upstream' segment. Other residual activities within 'other operations,' such as captive insurance and global services, will be reported under the 'corporate and financing' segment. These changes align with accounting standards FAS 131 and FAS 144 and are intended to provide greater clarity and consistency in future financial reporting. Importantly, these reclassifications do not impact ExxonMobil's total net income, EPS, or overall capital and exploration expenditures.

Key Highlights

  • 1ExxonMobil is changing its segment reporting structure, effective for the 2002 annual report.
  • 2Divested copper mining (Chile) and coal operations (Colombia, Australia) will be presented as discontinued operations.
  • 3Electric power generation operations (primarily Hong Kong) will be moved from 'other operations' to 'non-U.S. upstream'.
  • 4U.S. coal operations will be moved from 'other operations' to 'U.S. upstream'.
  • 5Remaining 'other operations' (captive insurance, global services) will be reported under 'corporate and financing'.
  • 6These changes are in accordance with FAS 131 and FAS 144 accounting standards.
  • 7The resegmentation does not alter total net income, EPS, or total capital and exploration expenditures.

Frequently Asked Questions

The primary reason for the change is the divestiture of certain non-core businesses, including copper mining and coal operations, and the reallocation of management responsibility for other ongoing operations like electric power generation. This allows for a clearer presentation of the company's core energy businesses.

No, the company explicitly states that these changes in segment presentation do not alter the total net income or net income per share for any period. The reclassification is purely an accounting and reporting adjustment.

Investors will first see the new segment reporting reflected in ExxonMobil's fourth-quarter 2002 earnings release and its 2002 annual report. The company also provided historical data (1998-2002) on a resegmented basis in this filing to help investors adjust.

The 'Other Operations' segment is being significantly reduced. Divested businesses are now 'discontinued operations.' Electric power generation and U.S. coal operations are being moved to upstream segments. The remaining activities, primarily captive insurance and global services, will be reported under the 'Corporate and financing' segment.