Exxon Mobil
Annual Report 2021

Plain-text annual report

A N N U A L R E P O R T S N 2021S O O U T L I 2 0 2 1 H I G H L I G H T S F I N A N C I A L A C C O M P L I S H M E N T S Earnings increased to $23 billion Cash flow increased to $48 billion3 Structural cost savings of Capex discipline with investment of Breakeven lowered to $2 billion1 Debt reduced by $20 billion4 $17 billion $41 per barrel2 Dividend annual growth for Share repurchase program announced 39 consecutive years $10 billion S T R E N G T H E N I N G I N D U S T R Y L E A D E R S H I P • Maintained best-ever safety and reliability performance • Streamlined low-cost organizational structure • 2025 greenhouse gas emission-reduction plans achieved four years ahead of schedule5 • Low Carbon Solutions business progressed multiple global initiatives U P G R A D I N G O U R P O R T F O L I O • Guyana recoverable resource increased to >10 Boeb with continued exploration success6 • Corpus Christi Chemical Complex started up ahead of schedule and under budget • Permian production increased by almost 100 Koebd7 • High-value Chemical performance product sales rose by 7% • More than $3 billion of non-core assets divested8 C O N T E N T S L E T T E R T O S H A R E H O L D E R S IFC LETTER TO SHAREHOLDERS II STRENGTHENING INDUSTRY LEADERSHIP III SHARING SUCCESS WITH SHAREHOLDERS IV SOLUTIONS FOR THE ENERGY TRANSITION VIII MEETING OUR CUSTOMERS’ NEEDS X AFFORDABLE AND RELIABLE ENERGY XII TRANSPORTATION EFFICIENCY PRODUCTS XIV SUSTAINABLE CHEMICAL PRODUCTS XVI GOVERNANCE – ENGAGED LEADERSHIP 1 FORM 10-K At ExxonMobil, we are optimistic for the future, confident that our focus on developing and deploying high-value solutions will lead to real progress in meeting the world’s economic and environmental challenges. Leveraging our competitive advantages, we’re well positioned to meet needs of communities around the world, advance lower-emission solutions, and importantly, reward our shareholders. 126 STOCK PERFORMANCE GRAPHS 2 0 2 1 P E R S P E C T I V E S 127 FREQUENTLY USED TERMS 129 FOOTNOTES 130 BOARD OF DIRECTORS 131 INVESTOR INFORMATION A B O U T T H E C O V E R Guyana: Advancing production to responsibly meet growing energy demand See Cautionary Statement on page 131 for important information regarding forward-looking statements and terms used in this report. In 2021, we strengthened our industry leadership position. Our effective pandemic response, focused investments during the down cycle, and structural cost savings positioned us to realize the full benefits of the market recovery. We delivered exceptional growth in earnings and cash flow that enabled us to restore our balance sheet and increase the dividend. During the year, we structurally reduced costs by almost $2 billion on top of $3 billion in savings the prior year, distributed nearly $15 billion to our shareholders through dividends, and reduced net debt to pre-pandemic levels. We improved performance across our high-value portfolio, including expanding the estimated recoverable resource offshore Guyana, growing production and driving efficiencies across our Permian operations, achieving record earnings in our Chemical and Lubricants businesses, and delivering the state-of-the-art Corpus Christi Chemical Complex on schedule and under budget. We achieved all of this while sustaining best-ever safety and reliability performance. We also made significant advances in our new Low Carbon Solutions business to reduce emissions in our operations and bring affordable solutions to the hard-to- decarbonize sectors such as commercial transportation and heavy industry. To support these efforts, we plan to invest more than $15 billion on lower-emission initiatives over the next six years. We are advancing more than two dozen projects focused on carbon capture and storage, hydrogen, and biofuels, which together are expected to develop into multi-trillion-dollar markets in the decades ahead, creating exciting new opportunities for our company.9 N E T - Z E R O A M B I T I O N Earlier this year, we announced our ambition to achieve net-zero Scope 1 and 2 greenhouse gas emissions from our operations by 2050. This ambition is backed by a comprehensive roadmap approach that identifies emission-reduction opportunities for each of our major operated assets. It is part of a continuum that includes specific near- and medium-term emission-reduction goals, including our 2025 plans that we achieved in 2021 – four years ahead of schedule. It also includes new 2030 plans that are expected to reduce emissions intensity across a variety of metrics and corporate-wide absolute emissions by 20%.5 S T R A T E G Y T O G R O W S H A R E H O L D E R V A L U E I N A L O W E R - E M I S S I O N F U T U R E As we move forward, we are continuing to evolve and streamline our business structure to fully leverage our competitive advantages – in scale, integration, technology, functional excellence, and our highly skilled people. Our new structure, announced earlier this year, aligns our Upstream, Product Solutions, and Low Carbon Solutions businesses along market-focused value chains to improve line of sight to customer needs and drive accountability. This will position us to grow earnings and cash flow faster than competition and deliver greater shareholder returns across a broad range of future energy-transition scenarios. For nearly 140 years, ExxonMobil has been a leader in innovation, supplying products that people need to live healthy and prosperous lives in an ever-changing world. We’re committed to continuing to provide critical solutions that support a lower-emission future and create sustainable value for all stakeholders. Thank you for investing in our company. Darren Woods Chairman and CEO S T R E N G T H E N I N G I N D U S T R Y L E A D E R S H I P ExxonMobil’s strategy focuses on maximizing our competitive advantages to grow globally competitive businesses by leading in earnings and cash flow growth through disciplined capital and cost management, strong operating performance, lower emissions intensity, and continuous improvement of the best portfolio in the industry. As part of our strategic planning processes over than $15 billion of investments from 2022 through 2027, the past several years, we took a hard look at our directed at initiatives that will reduce emissions from our performance and competitive position and took steps operations and advance opportunities in our Low Carbon to structurally reduce costs, enhance capital efficiency, Solutions business. and drive improvements across our businesses to maximize shareholder returns. T R A N S F O R M I N G T H E B U S I N E S S In 2021, we significantly improved performance and delivered earnings of $23 billion. Our cash flow from operating activities totaled $48 billion, the highest since 2012. We used the cash flow to restore our balance sheet, essentially paying back what we borrowed in 2020. We’ve made significant progress in improving our competitiveness. We structurally reduced costs by almost $5 billion compared to 2019 and increased our capital efficiency. At the same time, we sustained best-ever performance for both safety and reliability as we advanced major projects in Guyana, the Permian Basin, Brazil, Corpus Christi, and other locations around the world. S T R E A M L I N E D B U S I N E S S S T R U C T U R E In a highly competitive industry, we must continue to evolve, which is why we’ve further streamlined our business structure. This new model will enable us to better serve the needs of our customers while becoming more efficient by capturing economies of scale and eliminating duplication. In addition, by centralizing the skills and capabilities required by all of our businesses, we can allocate critical resources more effectively, driving higher value while providing flexibility. This serves us well in a variety of potential future scenarios, irrespective of the pace of the energy transition. • UPSTREAM – includes our low cost-of-supply, high-return oil and natural gas operations that are resilient to future demand scenarios. • PRODUCT SOLUTIONS – consolidates Downstream Our environmental performance also continues to and Chemical to form the world’s largest downstream and improve. We achieved our 2025 emission-reduction chemical company developing innovative products needed goals ahead of schedule and announced plans to by modern society. achieve net-zero Scope 1 and 2 greenhouse gas emissions from our operated assets in the Permian Basin by 2030. Early in 2022, we announced our ambition to achieve corporate-wide net-zero Scope 1 and 2 greenhouse gas emissions for operated assets by 2050.5 These efforts are being supported by more • LOW CARBON SOLUTIONS – supports reducing emissions from our operations and products, and provides solutions to help lower society’s emissions through developing markets in carbon capture and storage, hydrogen, and biofuels. II | III E X X O N M O B I L 2 0 2 1 A N N U A L R E P O R T >10 billion OIL-EQUIVALENT BARRELS OF RECOVERABLE RESOURCE IN THE 6 STABROEK BLOCK OFFSHORE GUYANA New discoveries increased the recoverable resource in Guyana, where more than 3,500 Guyanese and 800 local suppliers support our activities. S H A R I N G S U C C E S S W I T H S H A R E H O L D E R S For decades we’ve demonstrated our commitment to reliable and growing shareholder distributions, including a stable and sustainable dividend. 39 years of consecutive annual dividend growth $10 billion share repurchase program initiated in 2022 $20 billion reduction in total debt4 Our corporate plan balances capital-allocation priorities by investing in high-return projects while maintaining a strong dividend and balance sheet. During the pandemic and unprecedented collapse in market demand, we leaned on the strength of our balance sheet to maintain our strong dividend at a time when many in our industry were forced to reduce distributions. As the global economy rebounded, the low cost-of-supply opportunities we invested in at the bottom of the cycle, alongside the structural cost efficiencies we achieved, generated our highest cash flow from operating activities since 2012. This enabled us to reduce our debt-to-capital ratio to well within our target range of 20-25% and maintain a strong investment-grade credit rating. With the balance sheet restored, we increased the dividend, achieving 39 consecutive years of annual dividend growth. In 2021, we provided shareholder distributions totaling nearly $15 billion,10 divested more than $3 billion of non-core assets,8 and invested just under $17 billion in our advantaged opportunities. Building on that commitment to return cash to shareholders, we also initiated a $10 billion share-repurchase program in January 2022 that we expect to complete over the following 12 to 24 months. S O L U T I O N S F O R T H E E N E R G Y T R A N S I T I O N ExxonMobil is committed to help achieve a net-zero future. We are focused on leveraging our extensive experience in meeting vast and complex challenges to advance solutions at scale in the highest- emitting sectors of the economy. Our investments will enable us to achieve our emission-reduction goals and grow shareholder value across a broad range of future scenarios. N E T - Z E R O A M B I T I O N We’re aiming to achieve net-zero Scope 1 and 2 greenhouse gas emissions from our operated assets by 20505 by taking a comprehensive approach centered on developing detailed emission-reduction roadmaps for each major operated asset. These roadmaps include energy efficiency measures, methane mitigation, equipment upgrades, and the elimination of venting and routine flaring. Further opportunities include power and steam co-generation and electrification of operations, using renewable or lower-emission power. This ambition builds on our 2030 emission-reduction plans, which include reaching net-zero greenhouse gas emissions in our Permian Basin operations by 2030,5 and ongoing investments in lower-emission solutions, including carbon capture and storage, hydrogen, $15 billion OF LOWER-EMISSION INVESTMENTS FROM 2022 THROUGH 2027 and biofuels, where we have distinct competitive The same capabilities, technical strengths, and market experience that support our existing businesses will help drive commercial growth opportunities for carbon capture and storage, hydrogen, and biofuels. advantages and proven experience. L E A R N M O R E A B O U T I T Link to our complete ACS Report for more information on this subject. 2 0 2 1 A N N U A L R E P O R T E X X O N M O B I L IV | V Canola field: One of several potential feedstocks for renewable diesel. A C C E L E R A T E D E M I S S I O N - R E D U C T I O N P L A N S Our 2030 emission-reduction plans are consistent with Paris-aligned pathways, the U.S. and European Union’s Global Methane Pledge, and the U.S. Methane Emissions Reduction Action Plan. 20-30% 40-50% 70-80% REDUCTION IN CORPORATE- REDUCTION IN UPSTREAM REDUCTION IN WIDE GREENHOUSE GAS GREENHOUSE GAS INTENSITY INTENSITY CORPORATE-WIDE METHANE INTENSITY 60-70% REDUCTION IN CORPORATE-WIDE FLARING INTENSITY Absolute corporate-wide and Upstream greenhouse gas emissions are expected to decrease by 20% and 30%, respectively. Similarly, absolute flaring and methane emissions are expected to decrease by 60% and 70%, respectively. These plans are also expected to achieve World Bank Zero Routine Flaring by 2030. All reductions are compared to 2016 levels from the company’s operated assets.5 These plans build on our 2025 reduction plans that we achieved last year – four years ahead of schedule. These reductions included a 15-20% reduction in greenhouse gas intensity of our Upstream operations, which was supported by a 40-50% reduction in methane intensity and a 35-45% reduction in flaring intensity.5 L O W C A R B O N S O L U T I O N S In early 2021, we established our Low Carbon Solutions business to help reduce emissions in our operations and advance key emissions-reducing technical solutions such as carbon capture and storage, hydrogen, and biofuels. These technologies are essential to reducing emissions in manufacturing, power generation, and transportation – the three most energy-intensive and hard-to-decarbonize sectors of the economy. Using estimates and demand projections, including the IPCC’s Lower 2°C scenarios, the total addressable markets for these technologies and products are expected to grow significantly to more than $3 trillion by 2040.9 VI | VII E X X O N M O B I L 2 0 2 1 A N N U A L R E P O R T C A R B O N C A P T U R E A N D S T O R AG E Carbon capture and storage is one of the few proven technologies that can deliver deep emission reductions in industrial sectors. We have more SOURCES: POWER GENERATION, MANUFACTURING, REFINERIES, AND CHEMICAL PLANTS than 30 years of experience capturing and permanently storing CO2 and have cumulatively captured more anthropogenic CO2 than any other company.5 Last year, we announced progress on 10 large carbon capture and storage opportunities, further extending our leadership. THE HOUSTON CARBON CAPTURE AND STORAGE HUB HAS THE POTENTIAL TO CAPTURE AND PERMANENTLY STORE ABOUT 100 MILLION METRIC TONS OF CO2 ANNUALLY BY 2040. E X P E R I E N C E C C S F O R YO U R S E L F Link to an augmented reality presentation on our carbon capture technology. SOURCES OF CO2 GULF OF MEXICO CO2 TO STORAGE H Y D R O G E N Hydrogen is a zero-carbon energy carrier that can serve as an affordable and reliable source of energy for heavy-duty trucking and energy-intensive industrial processes in the steel, refining, and chemical sectors. We produce about 1.3 million metric tons of hydrogen per year and are evaluating additional strategic investments to bring this lower-emission energy technology to scale. B I O F U E L S Biofuels have the high energy density required to meet the needs of commercial transportation, while significantly reducing CO2 emissions. We plan to provide more than 40,000 barrels per day of biofuels by 2025, with a further goal of 200,000 barrels per day by 2030. This would reduce annual CO2 emissions from the transportation sector by 25 million metric tons, equivalent to the emissions from 5 million cars.5, 11 A D V O C A T I N G F O R S U P P O R T I V E P O L I C Y The enactment of sound government policies can accelerate the deployment of key technologies at the pace and scale required to support a net-zero future. Supportive policies, such as an explicit price on carbon or well-designed, sector- based policy options, can provide direct investment and incentives for a broad range of emission-reduction technologies in the same way they have accelerated growth for wind, solar, and electric vehicles. Long term, we have the capital flexibility and optionality necessary to pace our investments consistent with advancements in technology and supportive policy that can accelerate the energy transition. We continually innovate and use industry-leading technology to safely produce lower-emission energy resources to affordably and reliably meet the fundamental needs of people around the world. Our upstream operations bring Our refineries and logistics As one of the world’s largest chemical reliable and affordable energy deliver high-quality fuels and producers, we create sustainable solutions to the world. lubricants around the globe. products for modern life. VIII | IX E X X O N M O B I L 2 0 2 1 A N N U A L R E P O R T M E E T I N G O U R C U S T O M E R S ’ N E E D S A F F O R D A B L E A N D R E L I A B L E E N E R G Y ExxonMobil’s low cost-of-supply developments in unconventional Permian, deepwater, and LNG are lower in greenhouse gas intensity and underpin the growing value of our portfolio. ~4 million oil-equivalent barrels of net oil and gas production per day 39 countries with Upstream activity D E E P W A T E R Guyana contains one of the largest oil plays discovered in the past decade. Exploration success continued with additional discoveries increasing the estimated recoverable resource in the Stabroek block. The Liza Phase 1 development continued its strong performance in 2021, and Liza Phase 2 started up earlier this year. The third major development, Payara, is on schedule for first oil in 2024, followed by Yellowtail in 2025, after issuance of the production license. We envision six projects online by 2027, with the potential for up to 10 projects to fully develop the discovered resource. In Brazil, the Bacalhau field development is progressing in the prolific Santos Basin. Bacalhau Phase 1 is expected to produce 220,000 barrels of oil per day and received final approvals in 2021 with first oil anticipated in 2024. X | XI E X X O N M O B I L 2 0 2 1 A N N U A L R E P O R T P E R M I A N favorable emissions profile of natural gas versus coal for power generation, In 2021, we continued to increase combined with our operational production in the Permian with a performance and investments in focus on responsibly maximizing the world-class resources, makes our LNG value of our competitive position. portfolio competitive in a broad range Our drilling efficiency has more than doubled versus 2019 and we have achieved significant reductions in development and operating costs, driving step-change improvements in cash flow and profitability. We also announced an industry-first path to achieve net-zero Scope 1 and 2 greenhouse gas emissions in our operated Permian assets by 2030.5 of business environments. Key projects include the Coral South floating LNG development in Mozambique, the Golden Pass export facility on the U.S. Gulf Coast, and future developments in Papua New Guinea and Mozambique. O T H E R U P S T R E A M We conduct conventional oil and natural gas operations in 17 countries. In these Our plan includes eliminating routine mature conventional operations, our flaring, upgrading equipment, improving focus is on maximizing cash flows by monitoring, and electrifying operations lowering costs and optimizing recovery with lower-emission power. efficiency. L N G We are an industry leader in liquefied natural gas (LNG) and participate in the production of 87 million metric tons per year – accounting for more than one-fifth of global demand. The In Canada, through our majority-owned affiliate Imperial Oil Limited, we have a significant long-life heavy oil portfolio. In 2021, Imperial Oil announced its participation in the Oil Sands Pathway to Net Zero initiative, which is working to achieve net-zero emissions by 2050. T E C H N O L O G Y : R E D U C I N G M E T H A N E E M I S S I O N S Since initiating our program to reduce methane emissions across our U.S. unconventional operations, we have conducted more than 23,000 leak surveys on more than 5.2 million components at more than 9,500 production sites. We are leading collaborations with stakeholders to develop breakthrough detection technologies while also upgrading facility designs and phasing out gas-driven pneumatic equipment. As a result of these actions, we reduced U.S. unconventional methane emissions by approximately 40% as of year-end 2020 compared to 2016. T R A N S P O R TAT I O N E F F I C I E N C Y P R O D U C T S ExxonMobil produces high-performance fuels and lubricant products that power global transportation, improve efficiency, and reduce our customers’ overall life-cycle emissions. F U E L S We supply nearly 5 million barrels per day of transportation fuels. Our refineries lead industry with lower Carbon Emissions Intensity, performing 15% better than the global industry average.12 As the need for conventional fuel peaks, we are investing to shift the yield from our 19 global refineries toward additional high-performance chemicals, lubricants, and biofuels. XII | XIII E X X O N M O B I L 2 0 2 1 A N N U A L R E P O R T 70% fewer carbon emissions from biofuels compared to conventional fuels13 B I O F U E L S L U B R I C A N T S We’re growing our portfolio of biofuels High-quality lubricants, basestocks, to meet the needs of our customers and waxes help customers improve and help society decarbonize the efficiency in the transportation and transportation sector. Our majority- industrial sectors. With leading positions owned affiliate, Imperial Oil Limited, is in basestocks and synthetic lubricants, progressing plans to produce renewable we are helping customers achieve diesel at its Strathcona refinery. It is their efficiency goals by extending expected to produce approximately maintenance intervals and engine 20,000 barrels per day, which could and equipment life. We are focused reduce emissions in the Canadian on increasing our position in rapidly transportation sector by about 3 million metric tons per year.5 growing Asian markets to build on our strong presence in North America The facility will utilize locally grown and Europe. plant-based feedstock and hydrogen with carbon capture and storage as part of the manufacturing processes. T E C H N O L O G Y : E L E C T R I C V E H I C L E P R O D U C T S We are unlocking new possibilities for automotive manufacturers and customers by expanding the boundaries of product innovation. The Mobil EV product line consists of high-performance fluids for gears, bearings, and thermal management in electric vehicles. Our technical experience and relationships with vehicle manufacturers position us for lubricant sales growth in this rapidly evolving and growing automotive segment. S U S TA I N A B L E C H E M I C A L P R O D U C T S Worldwide demand for chemicals is expected to grow faster than the economy as a whole, driven by global population growth and improving living standards. Chemicals demand and GDP 14 These factors, together with lower life-cycle greenhouse gas emissions versus (percent growth versus 2010) Chemicals demand 150 120 90 60 30 0 alternatives, make plastics a material of choice and drive demand for sustainable solutions. To meet this demand, we are investing in new capacity, such as the Corpus Christi Chemical Complex, which started up below budget and ahead of schedule in 2021, as well as new technologies that include advanced recycling. Our sustainable product solutions improve modern life across a wide range of applications. Plastic smartphones, computers, electronic devices, appliances, packaging, medical equipment, building materials, and countless other World GDP applications provide many benefits. Our advanced product solutions are the result of close customer collaboration and enable tougher and lighter products that use less material, save energy, reduce cost and waste, and lower life-cycle 2010 2020 2030 greenhouse gas emissions.5 XIV | XV E X X O N M O B I L 2 0 2 1 A N N U A L R E P O R T H E A L T H A N D W E L L N E S S A G R I C U L T U R A L A N D F O O D P A C K A G I N G Performance polymers support Our performance polymers enable improved health and wellness. Our customers to advance innovations in polymers are found in key products agricultural films and food packaging such as surgical and medical gowns, that improve crop yields and reduce face masks, and other disposable food waste, which also has a net healthcare products that help prevent positive effect on greenhouse gas the spread of disease. These products emissions. Longer-lasting agricultural continue to be essential in supporting films protect and preserve crops even the pandemic response. in harsh environments. Performance polyethylene for packaging uses less material without compromising integrity as food moves from farm to table. T R A N S P O R T A T I O N ExxonMobil’s plastics and butyl rubber products are used in many vehicle applications. They improve transportation efficiency and associated emissions by reducing vehicle weight and improving tire performance and battery range. 26 million metric tons of annual sales places ExxonMobil among the largest chemical producers in the world T E C H N O L O G Y : A D V A N C E D R E C Y C L I N G Leveraging our integration and pioneering technology, we are accelerating large-scale advanced recycling projects to transform plastic waste into the raw materials used to make virgin-quality plastic and other everyday products. There are no evident technical limitations to how many times a plastic product can be put through this process. In 2021, we began building one of North America’s largest advanced recycling units with initial planned recycling capacity of 30,000 metric tons per year. We are progressing plans to grow our worldwide capacity to 500,000 metric tons per year by year-end 2026. G O V E R N A N C E – E N G A G E D L E A D E R S H I P ExxonMobil’s diverse, engaged, and experienced board governs the Corporation with a unified focus to grow long-term shareholder value in the evolving energy landscape. Five new independent directors joined the board in 2021, bringing additional perspectives and experience in energy, capital allocation, and business transition. As a collective, the board oversees and provides guidance on the Corporation’s strategy and planning. Directors leverage experiences and perspectives gained through prominent leadership roles in their fields, supplemented with input from experts inside and outside of ExxonMobil, to oversee the Corporation’s capital-allocation priorities with a focus on growing shareholder value and playing a leading role in the energy transition. Ongoing engagement with our shareholders is vitally important, and the board and management team play an active role in keeping shareholders informed about the business, understanding shareholders’ perspectives, and addressing areas of interest. In 2021, the board and management engaged with shareholders representing more than 40% of total shares outstanding and are continuing an active program in 2022. “The board is highly engaged in future business planning and focused on ensuring the company tests its assumptions, consistently challenges conventional thinking, and pursues high-value solutions.” – Ken Frazier, Lead Director 100% ALL of directors have held prominent leadership roles in their fields directors have relevant financial and/or risk management experience See page 130 for Board of Directors information. XVI E X X O N M O B I L 2 0 2 1 A N N U A L R E P O R T 2021 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 10-K ☑ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021 or ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to Commission File Number 1-2256 Exxon Mobil Corporation (Exact name of registrant as specified in its charter) New Jersey (State or other jurisdiction of incorporation or organization) 13-5409005 (I.R.S. Employer Identification Number) 5959 Las Colinas Boulevard, Irving, Texas 75039-2298 (Address of principal executive offices) (Zip Code) (972) 940-6000 (Registrant’s telephone number, including area code) Securities registered pursuant to Section 12(b) of the Act: Title of Each Class Common Stock, without par value 0.142% Notes due 2024 0.524% Notes due 2028 0.835% Notes due 2032 1.408% Notes due 2039 Trading Symbol XOM XOM24B XOM28 XOM32 XOM39A Name of Each Exchange on Which Registered New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange New York Stock Exchange Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes ☑ No ☐ Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act. Yes ☐ No ☑ Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐ Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes R No ☐ Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. Large accelerated filer Non-accelerated filer ☑ ☐ Accelerated filer Smaller reporting company Emerging growth company ☐ ☐ ☐ If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐ Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑ Indicate by check mark whether the registrant is a shell company (as defined by Rule 12b-2 of the Act). Yes ☐ No ☑ The aggregate market value of the voting stock held by non-affiliates of the registrant on June 30, 2021, the last business day of the registrant’s most recently completed second fiscal quarter, based on the closing price on that date of $63.08 on the New York Stock Exchange composite tape, was in excess of $267 billion. Class Common stock, without par value Outstanding as of January 31, 2022 4,233,592,429 Documents Incorporated by Reference: Proxy Statement for the 2022 Annual Meeting of Shareholders (Part III) EXXON MOBIL CORPORATION FORM 10-K FOR THE FISCAL YEAR ENDED DECEMBER 31, 2021 TABLE OF CONTENTS PART I Item 1. Business Item 1A. Risk Factors Item 1B. Unresolved Staff Comments Item 2. Item 3. Item 4. Properties Legal Proceedings Mine Safety Disclosures Information about our Executive Officers PART II Item 5. Item 7. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities Management’s Discussion and Analysis of Financial Condition and Results of Operations Item 7A. Quantitative and Qualitative Disclosures About Market Risk Item 8. Item 9. Financial Statements and Supplementary Data Changes in and Disagreements With Accountants on Accounting and Financial Disclosure Item 9A. Controls and Procedures Item 9B. Other Information Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections PART III Item 10. Item 11. Item 12. Item 13. Item 14. Directors, Executive Officers and Corporate Governance Executive Compensation Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters Certain Relationships and Related Transactions, and Director Independence Principal Accounting Fees and Services PART IV Exhibits, Financial Statement Schedules Form 10-K Summary Item 15. Item 16. Financial Section Index to Exhibits* Signatures* Exhibits 31 and 32 — Certifications* * Not included with the 2021 Annual Report to Shareholders but available on the Investor section of our website at www.exxonmobil.com 1 2 6 7 28 28 29 31 31 31 32 32 32 32 32 33 33 33 34 34 34 34 35 PART I ITEM 1. BUSINESS Exxon Mobil Corporation was incorporated in the State of New Jersey in 1882. Divisions and affiliated companies of ExxonMobil operate or market products in the United States and most other countries of the world. Our principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen and biofuels. Affiliates of ExxonMobil conduct extensive research programs in support of these businesses. Exxon Mobil Corporation has several divisions and hundreds of affiliates, many with names that include ExxonMobil, Exxon, Esso, Mobil or XTO. For convenience and simplicity, in this report the terms ExxonMobil, Exxon, Esso, Mobil and XTO, as well as terms like Corporation, Company, our, we, and its, are sometimes used as abbreviated references to specific affiliates or groups of affiliates. The precise meaning depends on the context in question. The energy and petrochemical industries are highly competitive, both within the industries and also with other industries in supplying the energy, fuel, and chemical needs of industrial and individual consumers. Certain industry participants, including ExxonMobil, are expanding investments in lower-emission energy and emission-reduction services and technologies. The Corporation competes with other firms in the sale or purchase of needed goods and services in many national and international markets and employs all methods of competition which are lawful and appropriate for such purposes. Operating data and industry segment information for the Corporation are contained in the Financial Section of this report under the following: “Management's Discussion and Analysis of Financial Condition and Results of Operations: Business Results” and “Note 18: Disclosures about Segments and Related Information”. Information on oil and gas reserves is contained in the “Oil and Gas Reserves” part of the “Supplemental Information on Oil and Gas Exploration and Production Activities” portion of the Financial Section of this report. ExxonMobil has a long-standing commitment to the development of proprietary technology. We have a wide array of research programs designed to meet the needs identified in each of our business segments. ExxonMobil held over 8 thousand active patents worldwide at the end of 2021. For technology licensed to third parties, revenues totaled approximately $66 million in 2021. Although technology is an important contributor to the overall operations and results of our Company, the profitability of each business segment is not dependent on any individual patent, trade secret, trademark, license, franchise, or concession. ExxonMobil operates in a highly complex, competitive, and changing global energy business environment where decisions and risks play out over time horizons that are often decades in length. This long-term orientation underpins the Corporation's philosophy on talent development. Talent development begins with recruiting exceptional candidates and continues with individually planned experiences and training designed to facilitate broad development and a deep understanding of our business across the business cycle. Our career-oriented approach to talent development results in strong retention and an average length of service of 30 years for our career employees. Compensation, benefits, and workplace programs support the Corporation's talent management approach, and are designed to attract and retain employees for a career through compensation that is market competitive, long-term oriented, and highly differentiated by individual performance. Over 60 percent of our global employee workforce is from outside the U.S., and over the past decade 39 percent of our global hires for management, professional and technical positions were female and 35 percent of our U.S. hires for management, professional and technical positions were minorities. With over 160 nationalities represented in the company, we encourage and respect diversity of thought, ideas, and perspective from our workforce. We consider and monitor diversity through all stages of employment, including recruitment, training, and development of our employees. We also work closely with the communities where we operate to identify and invest in initiatives that help support local needs, including local talent and skill development. The number of regular employees was 63 thousand, 72 thousand, and 75 thousand at years ended 2021, 2020, and 2019, respectively. Regular employees are defined as active executive, management, professional, technical, and wage employees who work full time or part time for the Corporation and are covered by the Corporation’s benefit plans and programs. 1 As discussed in item 1A. Risk Factors in this report, compliance with existing and potential future government regulations, including taxes, environmental regulations, and other government regulations and policies that directly or indirectly affect the production and sale of our products, may have material effects on the capital expenditures, earnings, and competitive position of ExxonMobil. With respect to the environment, throughout ExxonMobil’s businesses, new and ongoing measures are taken to prevent and minimize the impact of our operations on air, water, and ground, including, but not limited to, compliance with environmental regulations. These include a significant investment in refining infrastructure and technology to manufacture clean fuels, as well as projects to monitor and reduce nitrogen oxide, sulfur oxide and greenhouse gas emissions, and expenditures for asset retirement obligations. Using definitions and guidelines established by the American Petroleum Institute, ExxonMobil’s 2021 worldwide environmental expenditures for all such preventative and remediation steps, including ExxonMobil’s share of equity company expenditures, were $4.6 billion, of which $3.4 billion were included in expenses with the remainder in capital expenditures. The total cost for such activities is expected to increase to approximately $5.3 billion in 2022, with capital expenditures expected to account for approximately 30 percent of the total. Costs for 2023 are anticipated to be higher as the Low Carbon Solutions business matures and the Corporation progresses its emission- reduction plans. Information concerning the source and availability of raw materials used in the Corporation’s business, the extent of seasonality in the business, the possibility of renegotiation of profits or termination of contracts at the election of governments, and risks attendant to foreign operations may be found in “Item 1A. Risk Factors” and “Item 2. Properties” in this report. ExxonMobil maintains a website at exxonmobil.com. Our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and any amendments to those reports filed or furnished pursuant to Section 13(a) of the Securities Exchange Act of 1934 are made available through our website as soon as reasonably practical after we electronically file or furnish the reports to the Securities and Exchange Commission (SEC). Also available on the Corporation’s website are the company’s Corporate Governance Guidelines, Code of Ethics and Business Conduct, and additional policies as well as the charters of the audit, compensation, and other committees of the Board of Directors. Information on our website is not incorporated into this report. The SEC maintains an internet site (http://www.sec.gov) that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC. ITEM 1A. RISK FACTORS ExxonMobil’s financial and operating results are subject to a variety of risks inherent in the global oil, gas, and petrochemical businesses, and the pursuit of lower-emission business opportunities. Many of these risk factors are not within the company’s control and could adversely affect our business, our financial and operating results, or our financial condition. These risk factors include: Supply and Demand The oil, gas, and petrochemical businesses are fundamentally commodity businesses. This means ExxonMobil’s operations and earnings may be significantly affected by changes in oil, gas, and petrochemical prices and by changes in margins on refined products. Oil, gas, petrochemical, and product prices and margins in turn depend on local, regional, and global events or conditions that affect supply and demand for the relevant commodity or product. Any material decline in oil or natural gas prices could have a material adverse effect on certain of the company’s operations, especially in the Upstream segment, financial condition, and proved reserves. On the other hand, a material increase in oil or natural gas prices could have a material adverse effect on certain of the company’s operations, especially in the Downstream and Chemical segments. Economic conditions. The demand for energy and petrochemicals is generally linked closely with broad-based economic activities and levels of prosperity. The occurrence of recessions or other periods of low or negative economic growth will typically have a direct adverse impact on our results. Other factors that affect general economic conditions in the world or in a major region, such as changes in population growth rates, periods of civil unrest, government regulation or austerity programs, trade tariffs or broader breakdowns in global trade, security or public health issues and responses, or currency exchange rate fluctuations, can also impact the demand for energy and petrochemicals. Sovereign debt downgrades, defaults, inability to access debt markets due to credit or legal constraints, liquidity crises, the breakup or restructuring of fiscal, monetary, or political systems such as the European Union, and other events or conditions that impair the functioning of financial markets and institutions also pose risks to ExxonMobil, including risks to the safety of our financial assets and to the ability of our partners and customers to fulfill their commitments to ExxonMobil. COVID-19. The initial phase of the COVID-19 pandemic caused conditions of demand reduction and oversupply to develop rapidly and resulted in significant decreases in commodity prices and margins. ExxonMobil’s future business results, including cash flows and financing needs, will be affected by the scope and severity of current and future COVID outbreaks; actions taken by governments and others to address the pandemic and the effects of those actions on national and global economies and markets; changes in consumer behavior that affect demand for our products; and the effectiveness of the Corporation’s own responsive actions to protect the safety and well-being of our people. 2 Other demand-related factors. Other factors that may affect the demand for oil, gas, and petrochemicals, and therefore impact our results, include technological improvements in energy efficiency; seasonal weather patterns; increased competitiveness of, or government policy support for, alternative energy sources; changes in technology that alter fuel choices, such as technological advances in energy storage that make wind and solar more competitive for power generation; changes in consumer preferences for our products, including consumer demand for alternative fueled or electric transportation or alternatives to plastic products; and broad- based changes in personal income levels. See also “Climate Change and the Energy Transition” below. Other supply-related factors. Commodity prices and margins also vary depending on a number of factors affecting supply. For example, increased supply from the development of new oil and gas supply sources and technologies to enhance recovery from existing sources tends to reduce commodity prices to the extent such supply increases are not offset by commensurate growth in demand. Similarly, increases in industry refining or petrochemical manufacturing capacity relative to demand tend to reduce margins on the affected products. World oil, gas, and petrochemical supply levels can also be affected by factors that reduce available supplies, such as the level of and adherence by participating countries to production quotas established by OPEC or "OPEC+" and other agreements among sovereigns, government policies, including actions intended to reduce greenhouse gas emissions, that restrict oil and gas production or increase associated costs, and the occurrence of wars, hostile actions, natural disasters, disruptions in competitors’ operations, logistics constraints or unexpected unavailability of distribution channels that may disrupt supplies. Technological change can also alter the relative costs for competitors to find, produce, and refine oil and gas and to manufacture petrochemicals. Other market factors. ExxonMobil’s business results are also exposed to potential negative impacts due to changes in interest rates, inflation, currency exchange rates, and other local or regional market conditions. Market factors may also result in losses from commodity derivatives and other instruments we use to hedge price exposures or for trading purposes. Government and Political Factors ExxonMobil’s results can be adversely affected by political or regulatory developments affecting our operations. Access limitations. A number of countries limit access to their oil and gas resources, including by restricting leasing or permitting activities, or may place resources off-limits from development altogether. Restrictions on production of oil and gas could increase to the extent governments view such measures as a viable approach for pursuing national and global energy and climate policies. Restrictions on foreign investment in the oil and gas sector tend to increase in times of high commodity prices, when national governments may have less need of outside sources of private capital. Many countries also restrict the import or export of certain products based on point of origin. Restrictions on doing business. ExxonMobil is subject to laws and sanctions imposed by the United States or by other jurisdictions where we do business that may prohibit ExxonMobil or certain of its affiliates from doing business in certain countries, or restricting the kind of business that may be conducted. Such restrictions may provide a competitive advantage to competitors who may not be subject to comparable restrictions. Lack of legal certainty. Some countries in which we do business lack well-developed legal systems, or have not yet adopted, or may be unable to maintain, clear regulatory frameworks for oil and gas development. Lack of legal certainty exposes our operations to increased risk of adverse or unpredictable actions by government officials, and also makes it more difficult for us to enforce our contracts. In some cases these risks can be partially offset by agreements to arbitrate disputes in an international forum, but the adequacy of this remedy may still depend on the local legal system to enforce an award. Regulatory and litigation risks. Even in countries with well-developed legal systems where ExxonMobil does business, we remain exposed to changes in law or interpretation of settled law (including changes that result from international treaties and accords) and changes in policy that could adversely affect our results, such as: • • • • • • • increases in taxes, duties, or government royalty rates (including retroactive claims); price controls; changes in environmental regulations or other laws that increase our cost of compliance or reduce or delay available business opportunities (including changes in laws affecting offshore drilling operations, water use, methane emissions, hydraulic fracturing, or use of new or recycled plastics); actions by policy-makers, regulators, or other actors to delay or deny necessary licenses and permits, restrict the availability of oil and gas leases or the transportation of our products, or otherwise require changes in the company's business or strategy that could result in reduced returns; adoption of regulations mandating efficiency standards, the use of alternative fuels or uncompetitive fuel components; adoption of government payment transparency regulations that could require us to disclose competitively sensitive commercial information, or that could cause us to violate the non-disclosure laws of other countries; and government actions to cancel contracts, re-denominate the official currency, renounce or default on obligations, renegotiate terms unilaterally, or expropriate assets. Legal remedies available to compensate us for expropriation or other takings may be inadequate. 3 We also may be adversely affected by the outcome of litigation, especially in countries such as the United States in which very large and unpredictable punitive damage awards may occur; by government enforcement proceedings alleging non-compliance with applicable laws or regulations; or by state and local government actors as well as private plaintiffs acting in parallel that attempt to use the legal system to promote public policy agendas (including seeking to reduce the production and sale of hydrocarbon products though litigation targeting the company or other industry participants), gain political notoriety, or obtain monetary awards from the company. Security concerns. Successful operation of particular facilities or projects may be disrupted by civil unrest, acts of sabotage or terrorism, cybersecurity attacks, the application of national security laws or policies that result in restricting our ability to do business in a particular jurisdiction, and other local security concerns. Such concerns may require us to incur greater costs for security or to shut down operations for a period of time. Climate Change and the Energy Transition Net-zero scenarios. Driven by concern over the risks of climate change, a number of countries have adopted, or are considering the adoption of, regulatory frameworks to reduce greenhouse gas emissions including emissions from the production and use of oil and gas and their products. These actions are being taken both independently by national and regional governments and within the framework of United Nations Conference of the Parties summits under which many countries of the world have endorsed objectives to reduce the atmospheric concentration of CO2 over the coming decades, with an ambition ultimately to achieve “net-zero.” Net-zero means that emissions of greenhouse gases from human activities would be balanced by actions that remove such gases from the atmosphere. Expectations for transition of the world’s energy system to lower emission sources and ultimately net-zero derive from hypothetical scenarios that reflect many assumptions about the future and reflect substantial uncertainties. The company’s objective to lead in the energy transition, including the company’s announced ambition ultimately to achieve net-zero with respect to emissions from operations where ExxonMobil is the operator, carries risks that the transition, including underlying technologies, policies, and markets as discussed in more detail below, will not develop at the pace or in the manner expected by current net-zero scenarios. The success of our strategy for the energy transition will also depend on our ability to recognize key signposts of change in the global energy system on a timely basis, and our corresponding ability to direct investment to the technologies and businesses, at the appropriate stage of development, to best capitalize on our competitive strengths. Greenhouse gas restrictions. Government actions intended to reduce greenhouse gas emissions include adoption of cap and trade regimes, carbon taxes, trade tariffs, minimum renewable usage requirements, restrictive permitting, increased mileage and other efficiency standards, mandates for sales of electric vehicles, mandates for use of specific fuels or technologies, and other incentives or mandates designed to support transitioning to lower-emission energy sources. Political and other actors and their agents also increasingly seek to advance climate change objectives indirectly, such as by seeking to reduce the availability or increase the cost of financing and investment in the oil and gas sector and taking actions intended to promote changes in business strategy for oil and gas companies. Depending on how policies are formulated and applied, such policies could negatively affect our investment returns, make our hydrocarbon-based products more expensive or less competitive, lengthen project implementation times, and reduce demand for hydrocarbons, as well as shift hydrocarbon demand toward relatively lower-carbon alternatives. Current and pending greenhouse gas regulations or policies may also increase our compliance costs, such as for monitoring or sequestering emissions. Technology and low carbon solutions. Achieving societal ambitions to reduce greenhouse gas emissions and ultimately achieve net- zero will require new technologies to reduce the cost and increase the scalability of alternative energy sources, as well as technologies such as carbon capture and storage (CCS). CCS technologies, focused initially on capturing and sequestering CO2 emissions from high-intensity industrial activities, can assist in meeting society’s objective to mitigate atmospheric greenhouse gas levels while also helping ensure the availability of the reliable and affordable energy the world requires. ExxonMobil has established a Low Carbon Solutions (LCS) business unit to advance the development and deployment of these technologies and projects, including CCS, hydrogen and advanced biofuels, breakthrough energy efficiency processes, advanced energy-saving materials, and other technologies. The company’s efforts include both in-house research and development and collaborative efforts with leading universities as well as commercial partners involved in advanced lower-emission energy technologies. Our future results and ability to grow our LCS business and succeed through the energy transition will depend in part on the success of these research and collaboration efforts and on our ability to adapt and apply the strengths of our current business model to providing the energy products of the future in a cost- competitive manner. Policy and market development. The scale of the world’s energy system means that, in addition to developments in technology as discussed above, a successful energy transition will require appropriate support from governments and private participants throughout the global economy. Our ability to develop and deploy CCS and other lower emission energy technologies at commercial scale, and the growth and future returns of LCS and other emerging businesses in which we invest, will depend in part on the continued development of supportive government policies and markets. Failure or delay of these policies or markets to materialize or be maintained could adversely impact these investments. Policy and other actions that result in restricting the availability of hydrocarbon products without commensurate reduction in demand may have unpredictable adverse effects, including increased commodity price volatility; periods of significantly higher commodity prices and resulting inflationary pressures; and local or regional energy shortages. Such effects in turn may depress economic growth or lead to rapid or conflicting shifts in policy by different actors, with resulting adverse effects on our businesses. 4 See also the discussion of “Supply and Demand,” “Government and Political Factors,” and “Operational and Other Factors” in this Item 1A. Operational and Other Factors In addition to external economic and political factors, our future business results also depend on our ability to manage successfully those factors that are at least in part within our control. The extent to which we manage these factors will impact our performance relative to competition. For projects in which we are not the operator, we depend on the management effectiveness of one or more co- venturers whom we do not control. Exploration and development program. Our ability to maintain and grow our oil and gas production depends on the success of our exploration and development efforts. Among other factors, we must continuously improve our ability to identify the most promising resource prospects and apply our project management expertise to bring discovered resources on line as scheduled and within budget. Project and portfolio management. The long-term success of ExxonMobil’s Upstream, Downstream, and Chemical businesses, as well as the future success of LCS and other emerging lower-emission investments, depends on complex, long-term, capital intensive projects. These projects in turn require a high degree of project management expertise to maximize efficiency. Specific factors that can affect the performance of major projects include our ability to: negotiate successfully with joint venturers, partners, governments, suppliers, customers, or others; model and optimize reservoir performance; develop markets for project outputs, whether through long- term contracts or the development of effective spot markets; manage changes in operating conditions and costs, including costs of third party equipment or services such as drilling rigs and shipping; prevent, to the extent possible, and respond effectively to unforeseen technical difficulties that could delay project start-up or cause unscheduled project downtime; and influence the performance of project operators where ExxonMobil does not perform that role. In addition to the effective management of individual projects, ExxonMobil’s success, including our ability to mitigate risk and provide attractive returns to shareholders, depends on our ability to successfully manage our overall portfolio, including diversification among types and locations of our projects, products produced, and strategies to divest assets. We may not be able to divest assets at a price or on the timeline we contemplate in our strategies. Additionally, we may retain certain liabilities following a divestment and could be held liable for past use or for different liabilities than anticipated. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. Operational efficiency. An important component of ExxonMobil’s competitive performance, especially given the commodity-based nature of many of our businesses, is our ability to operate efficiently, including our ability to manage expenses and improve production yields on an ongoing basis. This requires continuous management focus, including technology improvements, cost control, productivity enhancements, regular reappraisal of our asset portfolio, and the recruitment, development, and retention of high caliber employees. Research and development and technological change. To maintain our competitive position, especially in light of the technological nature of our businesses and the need for continuous efficiency improvement, ExxonMobil’s technology, research, and development organizations must be successful and able to adapt to a changing market and policy environment, including developing technologies to help reduce greenhouse gas emissions. To remain competitive we must also continuously adapt and capture the benefits of new and emerging technologies, including successfully applying advances in the ability to process very large amounts of data to our businesses. Safety, business controls, and environmental risk management. Our results depend on management’s ability to minimize the inherent risks of oil, gas, and petrochemical operations, to control effectively our business activities, and to minimize the potential for human error. We apply rigorous management systems and continuous focus on workplace safety and avoiding spills or other adverse environmental events. For example, we work to minimize spills through a combined program of effective operations integrity management, ongoing upgrades, key equipment replacements, and comprehensive inspection and surveillance. Similarly, we are implementing cost-effective new technologies and adopting new operating practices to reduce air emissions, not only in response to government requirements but also to address community priorities. We employ a comprehensive enterprise risk management system to identify and manage risk across our businesses. We also maintain a disciplined framework of internal controls and apply a controls management system for monitoring compliance with this framework. Substantial liabilities and other adverse impacts could result if we do not timely identify and mitigate applicable risks, or if our management systems and controls do not function as intended. 5 Cybersecurity. ExxonMobil is regularly subject to attempted cybersecurity disruptions from a variety of sources including state- sponsored actors. ExxonMobil’s defensive preparedness includes multi-layered technological capabilities for prevention and detection of cybersecurity disruptions; non-technological measures such as threat information sharing with governmental and industry groups; internal training and awareness campaigns including routine testing of employee awareness and an emphasis on resiliency including business response and recovery. If the measures we are taking to protect against cybersecurity disruptions prove to be insufficient or if our proprietary data is otherwise not protected, ExxonMobil as well as our customers, employees, or third parties could be adversely affected. We are also exposed to potential harm from cybersecurity events that may affect the operations of third-parties, including our partners, suppliers, service providers (including providers of cloud-hosting services for our data or applications), and customers. Cybersecurity disruptions could cause physical harm to people or the environment; damage or destroy assets; compromise business systems; result in proprietary information being altered, lost, or stolen; result in employee, customer, or third-party information being compromised; or otherwise disrupt our business operations. We could incur significant costs to remedy the effects of a major cybersecurity disruption in addition to costs in connection with resulting regulatory actions, litigation, or reputational harm. Preparedness. Our operations may be disrupted by severe weather events, natural disasters, human error, and similar events. For example, hurricanes may damage our offshore production facilities or coastal refining and petrochemical plants in vulnerable areas. Our facilities are designed, constructed, and operated to withstand a variety of extreme climatic and other conditions, with safety factors built in to cover a number of engineering uncertainties, including those associated with wave, wind, and current intensity, marine ice flow patterns, permafrost stability, storm surge magnitude, temperature extremes, extreme rainfall events, and earthquakes. Our consideration of changing weather conditions and inclusion of safety factors in design covers the engineering uncertainties that climate change and other events may potentially introduce. Our ability to mitigate the adverse impacts of these events depends in part upon the effectiveness of our robust facility engineering as well as our rigorous disaster preparedness and response, and business continuity planning. Insurance limitations. The ability of the Corporation to insure against many of the risks it faces as described in this Item 1A is limited by the availability and cost of coverage, which may not be economic, as well as the capacity of the applicable insurance markets, which may not be sufficient. Competition. As noted in Item 1 above, the energy and petrochemical industries are highly competitive. We face competition not only from other private firms, but also from state-owned companies that are increasingly competing for opportunities outside of their home countries and as partners with other private firms. In some cases, these state-owned companies may pursue opportunities in furtherance of strategic objectives of their government owners, with less focus on financial returns than companies owned by private shareholders, such as ExxonMobil. Technology and expertise provided by industry service companies may also enhance the competitiveness of firms that may not have the internal resources and capabilities of ExxonMobil or reduce the need for resource- owning countries to partner with private-sector oil and gas companies in order to monetize national resources. As described in more detail above, our hydrocarbon-based energy products are also subject to growing and, in many cases, government-supported competition from alternative energy sources. Reputation. Our reputation is an important corporate asset. Factors that could have a negative impact on our reputation include an operating incident or significant cybersecurity disruption; changes in consumer views concerning our products; a perception by investors or others that the Corporation is making insufficient progress with respect to our ambition to lead in the energy transition, or that pursuit of this ambition may result in allocation of capital to investments with reduced returns; and other adverse events such as those described in this Item 1A. Negative impacts on our reputation could in turn make it more difficult for us to compete successfully for new opportunities, obtain necessary regulatory approvals, obtain financing, attract talent, or could reduce consumer demand for our branded products. ExxonMobil’s reputation may also be harmed by events which negatively affect the image of our industry as a whole. Projections, estimates, and descriptions of ExxonMobil’s plans and objectives included or incorporated in Items 1, 1A, 2, 7 and 7A of this report are forward-looking statements. Actual future results, including project completion dates, production rates, capital expenditures, costs, and business plans could differ materially due to, among other things, the factors discussed above and elsewhere in this report. ITEM 1B. UNRESOLVED STAFF COMMENTS None. 6 ITEM 2. PROPERTIES Information with regard to oil and gas producing activities follows: 1. Disclosure of Reserves A. Summary of Oil and Gas Reserves at Year-End 2021 The table below summarizes the oil-equivalent proved reserves in each geographic area and by product type for consolidated subsidiaries and equity companies. Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels. The Corporation has reported proved reserves on the basis of the average of the first-day-of-the-month price for each month during the last 12-month period. As a result of higher average prices in 2021, certain quantities of crude oil, bitumen, and natural gas that did not qualify as proved reserves in the prior year qualified as proved reserves at year-end 2021. Otherwise, no major discovery or other favorable or adverse event has occurred since December 31, 2021 that would cause a significant change in the estimated proved reserves as of that date. Crude Oil (million bbls) Natural Gas Liquids (million bbls) Bitumen (million bbls) Synthetic Oil (million bbls) Natural Gas (billion cubic ft) Oil- Equivalent Total All Products (million bbls) Proved Reserves Developed Consolidated Subsidiaries United States Canada/Other Americas (1) Europe Africa Asia Australia/Oceania Total Consolidated Equity Companies United States Europe Africa Asia Total Equity Company Total Developed Undeveloped Consolidated Subsidiaries United States Canada/Other Americas (1) Europe Africa Asia Australia/Oceania Total Consolidated Equity Companies United States Europe Africa Asia Total Equity Company Total Undeveloped Total Proved Reserves 1,170 262 3 304 2,096 45 3,880 127 10 — 322 459 4,339 1,137 507 — 31 941 29 2,645 28 — 5 419 452 3,097 7,436 493 6 — 26 58 18 601 6 — — 152 158 759 484 1 — — 47 3 535 — — — 112 112 647 1,406 — 2,635 — — — — 2,635 — — — — — 2,635 — 259 — — — — 259 — — — — — 259 2,894 — 326 — — — — 326 — — — — — 326 — 112 — — — — 112 — — — — — 112 438 11,287 574 377 315 2,527 3,513 18,593 117 339 — 6,017 6,473 25,066 3,701 345 6 2 1,166 2,850 8,070 23 69 806 4,141 5,039 13,109 38,175 3,544 3,325 66 382 2,575 648 10,540 153 66 — 1,477 1,696 12,236 2,238 937 1 31 1,182 507 4,896 32 12 139 1,221 1,404 6,300 18,536 (1) Other Americas includes proved developed reserves of 106 million barrels of crude oil and 151 billion cubic feet of natural gas, as well as proved undeveloped reserves of 488 million barrels of crude oil and 233 billion cubic feet of natural gas. 7 In the preceding reserves information, consolidated subsidiary and equity company reserves are reported separately. However, the Corporation operates its business with the same view of equity company reserves as it has for reserves from consolidated subsidiaries. The Corporation anticipates several projects will come online over the next few years providing additional production capacity. However, actual volumes will vary from year to year due to the timing of individual project start-ups; operational outages; reservoir performance; performance of enhanced oil recovery projects; regulatory changes; the impact of fiscal and commercial terms; asset sales; weather events; price effects on production sharing contracts; changes in the amount and timing of capital investments that may vary depending on the oil and gas price environment; and other factors described in Item 1A. Risk Factors. The estimation of proved reserves, which is based on the requirement of reasonable certainty, is an ongoing process based on rigorous technical evaluations, commercial and market assessments and detailed analysis of well and reservoir information such as flow rates and reservoir pressures. Furthermore, the Corporation only records proved reserves for projects which have received significant funding commitments by management toward the development of the reserves. Although the Corporation is reasonably certain that proved reserves will be produced, the timing and amount recovered can be affected by a number of factors including completion of development projects, reservoir performance, regulatory approvals, government policies, consumer preferences, and significant changes in crude oil and natural gas price levels. In addition, proved reserves could be affected by an extended period of low prices which could reduce the level of the Corporation’s capital spending and also impact our partners’ capacity to fund their share of joint projects. B. Technologies Used in Establishing Proved Reserves Additions in 2021 Additions to ExxonMobil’s proved reserves in 2021 were based on estimates generated through the integration of available and appropriate geological, engineering and production data, utilizing well-established technologies that have been demonstrated in the field to yield repeatable and consistent results. Data used in these integrated assessments included information obtained directly from the subsurface via wellbores, such as well logs, reservoir core samples, fluid samples, static and dynamic pressure information, production test data, and surveillance and performance information. The data utilized also included subsurface information obtained through indirect measurements including high-quality 3‑D and 4‑D seismic data, calibrated with available well control information. The tools used to interpret the data included seismic processing software, reservoir modeling and simulation software, and data analysis packages. In some circumstances, where appropriate analog reservoirs were available, reservoir parameters from these analogs were used to increase the quality of and confidence in the reserves estimates. 8 C. Qualifications of Reserves Technical Oversight Group and Internal Controls over Proved Reserves ExxonMobil has a dedicated Global Reserves and Resources group that provides technical oversight and is separate from the operating organization. Primary responsibilities of this group include oversight of the reserves estimation process for compliance with Securities and Exchange Commission (SEC) rules and regulations, review of annual changes in reserves estimates, and the reporting of ExxonMobil’s proved reserves. This group also maintains the official company reserves estimates for ExxonMobil’s proved reserves of crude oil, natural gas liquids, bitumen, synthetic oil, and natural gas. In addition, the group provides training to personnel involved in the reserves estimation and reporting process within ExxonMobil and its affiliates. The Manager of the Global Reserves and Resources group has more than 30 years of experience in reservoir engineering and reserves assessment, has a degree in Engineering and served on the Oil and Gas Reserves Committee of the Society of Petroleum Engineers (SPE). The group is staffed with individuals that have an average of more than 15 years of technical experience in the petroleum industry, including expertise in the classification and categorization of reserves under SEC guidelines. This group includes individuals who hold degrees in either Engineering or Geology. The Global Reserves and Resources group maintains a central database containing the official company reserves estimates. Appropriate controls, including limitations on database access and update capabilities, are in place to ensure data integrity within this central database. An annual review of the system’s controls is performed by internal audit. Key components of the reserves estimation process include technical evaluations, commercial and market assessments, analysis of well and field performance, and long-standing approval guidelines. No changes may be made to the reserves estimates in the central database, including additions of any new initial reserves estimates or subsequent revisions, unless these changes have been thoroughly reviewed and evaluated by duly authorized geoscience and engineering professionals within the operating organization. In addition, changes to reserves estimates that exceed certain thresholds require further review and approval by the appropriate level of management within the operating organization before the changes may be made in the central database. Endorsement by the Global Reserves and Resources group for all proved reserves changes is a mandatory component of this review process. After all changes are made, reviews are held with senior management for final endorsement. 2. Proved Undeveloped Reserves At year-end 2021, approximately 6.3 billion oil-equivalent barrels (GOEB) of ExxonMobil’s proved reserves were classified as proved undeveloped. This represents 34 percent of the 18.5 GOEB reported in proved reserves. This compares to 5.0 GOEB of proved undeveloped reserves reported at the end of 2020. During the year, ExxonMobil conducted development activities that resulted in the transfer of approximately 0.5 GOEB from proved undeveloped to proved developed reserves by year end. The largest transfers were related to development activities in the United States. During 2021, extensions and discoveries, primarily in the United States, Brazil, and Guyana, resulted in an addition of approximately 1.3 GOEB of proved undeveloped reserves, along with an increase of approximately 0.6 GOEB due to revisions primarily in Asia and Canada. Overall, investments of $8.0 billion were made by the Corporation during 2021 to progress the development of reported proved undeveloped reserves, including $7.8 billion for oil and gas producing activities, along with additional investments for other non-oil and gas producing activities such as the construction of support infrastructure and other related facilities. These investments represented 65 percent of the $12.3 billion in total reported Upstream capital and exploration expenditures. One of ExxonMobil’s requirements for reporting proved reserves is that management has made significant funding commitments toward the development of the reserves. ExxonMobil has a disciplined investment strategy and many major fields require long lead- time in order to be developed. Development projects typically take several years from the time of recording proved undeveloped reserves to the start of production and can exceed five years for large and complex projects. Proved undeveloped reserves in Australia, Canada, Kazakhstan, the United States, and the United Arab Emirates have remained undeveloped for five years or more primarily due to constraints on the capacity of infrastructure, as well as the time required to complete development for very large projects. The Corporation is reasonably certain that these proved reserves will be produced; however, the timing and amount recovered can be affected by a number of factors including completion of development projects, reservoir performance, regulatory approvals, government policies, consumer preferences, the pace of co-venturer/government funding, changes in the amount and timing of capital investments, and significant changes in crude oil and natural gas price levels. Of the proved undeveloped reserves that have been reported for five or more years, over 80 percent are contained in the aforementioned countries. In Australia, proved undeveloped reserves are associated with future compression for the Gorgon Jansz LNG project. In Canada, proved undeveloped reserves are related to Cold Lake operations. In Kazakhstan, the proved undeveloped reserves are related to the remainder of the Tengizchevroil joint venture development that includes a production license in the Tengiz - Korolev field complex. The Tengizchevroil joint venture is producing, and proved undeveloped reserves will continue to move to proved developed as approved development phases progress. In the United Arab Emirates, proved undeveloped reserves are associated with an approved development plan and continued drilling investment for the producing Upper Zakum field. 9 3. Oil and Gas Production, Production Prices and Production Costs A. Oil and Gas Production The table below summarizes production by final product sold and by geographic area for the last three years. Crude oil and natural gas liquids production Consolidated Subsidiaries United States Canada/Other Americas (1) Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Asia Total Equity Companies 2021 2020 (thousands of barrels daily) 2019 Crude Oil NGL Crude Oil NGL Crude Oil NGL 482 130 16 241 407 28 1,304 43 3 207 253 195 3 3 7 21 15 244 1 — 60 61 481 121 22 301 449 29 1,403 49 3 208 260 154 5 5 11 23 15 213 1 — 62 63 461 87 84 360 432 30 1,454 52 3 232 287 131 4 21 12 22 15 205 2 — 62 64 Total crude oil and natural gas liquids production 1,557 305 1,663 276 1,741 269 Bitumen production Consolidated Subsidiaries Canada/Other Americas Synthetic oil production Consolidated Subsidiaries Canada/Other Americas Total liquids production Natural gas production available for sale Consolidated Subsidiaries United States Canada/Other Americas (1) Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Asia Total Equity Companies Total natural gas production available for sale Oil-equivalent production 365 342 311 62 2,289 2,724 195 377 43 807 1,280 5,426 22 431 2,658 3,111 8,537 3,712 68 2,349 (millions of cubic feet daily) 2,668 277 447 9 872 1,219 5,492 23 342 2,614 2,979 8,471 65 2,386 2,756 258 808 7 851 1,319 5,999 22 649 2,724 3,395 9,394 (thousands of oil-equivalent barrels daily) 3,761 3,952 (1) Other Americas includes crude oil production for 2021, 2020 and 2019 of 48 thousand, 29 thousand, and 2 thousand barrels daily, respectively; and natural gas production available for sale for 2021, 2020 and 2019 of 36 million, 45 million, and 36 million cubic feet daily, respectively. 10 B. Production Prices and Production Costs The table below summarizes average production prices and average production costs by geographic area and by product type for the last three years. During 2021 Consolidated Subsidiaries Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Bitumen, per barrel Synthetic oil, per barrel Average production costs, per oil-equivalent barrel - total Average production costs, per barrel - bitumen Average production costs, per barrel - synthetic oil Equity Companies Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Average production costs, per oil-equivalent barrel - total Total Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Bitumen, per barrel Synthetic oil, per barrel Average production costs, per oil-equivalent barrel - total Average production costs, per barrel - bitumen Average production costs, per barrel - synthetic oil During 2020 Consolidated Subsidiaries Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Bitumen, per barrel Synthetic oil, per barrel Average production costs, per oil-equivalent barrel - total Average production costs, per barrel - bitumen Average production costs, per barrel - synthetic oil Equity Companies Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Average production costs, per oil-equivalent barrel - total Total Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Bitumen, per barrel Synthetic oil, per barrel Average production costs, per oil-equivalent barrel - total Average production costs, per barrel - bitumen Average production costs, per barrel - synthetic oil United States 65.03 32.24 3.02 — — 8.33 — — 67.06 29.94 3.11 30.51 65.20 32.23 3.02 — — 9.24 — — 34.97 13.83 0.98 — — 9.82 — — 39.10 11.05 1.19 25.13 35.35 13.80 0.98 — — 10.55 — — Canada/ Other Americas Europe Africa (dollars per unit) Asia Australia/ Oceania Total 68.56 30.51 2.92 44.26 64.73 22.47 22.69 48.87 — — — — 68.56 30.51 2.92 44.26 64.73 22.47 22.69 48.87 37.26 10.34 1.56 17.71 37.32 18.40 19.22 33.61 — — — — 37.26 10.34 1.56 17.71 37.32 18.40 19.22 33.61 66.20 42.31 11.83 — — 25.31 — — 62.60 — 8.19 38.82 65.54 42.31 9.89 — — 31.79 — — 41.39 20.11 3.13 — — 21.22 — — 38.95 — 3.85 30.74 41.11 20.11 3.44 — — 24.76 — — 70.21 54.57 1.67 — — 18.92 — — — — — — 70.21 54.57 1.67 — — 19.04 — — 42.27 21.32 1.24 — — 16.67 — — — — — — 42.27 21.32 1.24 — — 16.73 — — 67.28 32.62 2.11 — — 7.16 — — 65.85 52.14 6.54 1.59 66.80 47.10 5.50 — — 4.06 — — 39.39 21.37 1.49 — — 6.50 — — 35.18 30.02 3.14 1.63 38.07 27.65 2.72 — — 3.91 — — 69.00 43.07 6.64 — — 5.14 — — 67.14 33.65 4.33 44.26 64.73 12.15 22.69 48.87 — — — — 66.01 51.64 6.74 6.67 69.00 43.07 6.64 — — 5.14 — — 66.96 37.27 5.21 44.26 64.73 10.92 22.69 48.87 36.67 27.92 4.34 — — 5.35 — — 38.31 16.05 2.01 17.71 37.32 11.57 19.22 33.61 — — — — 35.97 29.58 3.20 5.34 36.67 27.92 4.34 — — 5.35 — — 37.95 19.16 2.43 17.71 37.32 10.21 19.22 33.61 11 During 2019 Consolidated Subsidiaries Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Bitumen, per barrel Synthetic oil, per barrel Average production costs, per oil-equivalent barrel - total Average production costs, per barrel - bitumen Average production costs, per barrel - synthetic oil Equity Companies Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Average production costs, per oil-equivalent barrel - total Total Average production prices Crude oil, per barrel NGL, per barrel Natural gas, per thousand cubic feet Bitumen, per barrel Synthetic oil, per barrel Average production costs, per oil-equivalent barrel - total Average production costs, per barrel - bitumen Average production costs, per barrel - synthetic oil United States 54.41 18.94 1.54 — — 12.25 — — 60.95 15.63 1.75 25.70 55.08 18.90 1.54 — — 12.95 — — Canada/ Other Americas Europe Africa (dollars per unit) Asia Australia/ Oceania Total 59.39 16.59 1.44 36.25 56.18 23.41 24.18 40.38 — — — — 59.39 16.59 1.44 36.25 56.18 23.41 24.18 40.38 63.59 30.56 4.50 — — 13.69 — — 58.72 — 5.01 14.04 63.41 30.56 4.73 — — 13.80 — — 65.64 41.41 1.49 — — 17.51 — — 64.14 24.64 2.07 — — 7.34 — — 61.08 30.55 6.26 — — 6.60 — — 61.04 22.85 3.05 36.25 56.18 13.43 24.18 40.38 — — — — 58.74 36.28 5.24 2.03 — — — — 59.15 35.76 5.17 5.00 65.64 41.41 1.49 — — 17.56 — — 62.27 33.23 4.49 — — 4.39 — — 61.08 30.55 6.26 — — 6.60 — — 60.73 25.89 3.82 36.25 56.18 11.48 24.18 40.38 Average production prices have been calculated by using sales quantities from the Corporation’s own production as the divisor. Average production costs have been computed by using net production quantities for the divisor. The volumes of crude oil and natural gas liquids (NGL) production used for this computation are shown in the oil and gas production table in section 3.A. The volumes of natural gas used in the calculation are the production volumes of natural gas available for sale and are also shown in section 3.A. The natural gas available for sale volumes are different from those shown in the reserves table in the “Oil and Gas Reserves” part of the “Supplemental Information on Oil and Gas Exploration and Production Activities” portion of the Financial Section of this report due to volumes consumed or flared. Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. 12 4. Drilling and Other Exploratory and Development Activities A. Number of Net Productive and Dry Wells Drilled 2021 2020 2019 Net Productive Exploratory Wells Drilled Consolidated Subsidiaries United States Canada/Other Americas Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Africa Asia Total Equity Companies Total productive exploratory wells drilled Net Dry Exploratory Wells Drilled Consolidated Subsidiaries United States Canada/Other Americas Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Africa Asia Total Equity Companies Total dry exploratory wells drilled 1 5 — — — — 6 — — — — — 6 1 3 — — — — 4 — — — — — 4 4 2 — 1 — — 7 — — — — — 7 — 1 — — 1 — 2 — — — — — 2 3 6 1 — — 1 11 — — — — — 11 — 1 1 — — 1 3 — — — — — 3 13 Net Productive Development Wells Drilled Consolidated Subsidiaries United States Canada/Other Americas Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Africa Asia Total Equity Companies Total productive development wells drilled Net Dry Development Wells Drilled Consolidated Subsidiaries United States Canada/Other Americas Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Africa Asia Total Equity Companies Total dry development wells drilled 2021 2020 2019 433 28 1 1 4 — 467 13 1 1 5 20 487 4 — — — — — 4 — — — — — 4 412 36 2 2 15 4 471 60 1 — 5 66 537 6 — — — — 1 7 — — — — — 7 618 49 3 4 12 — 686 199 — — 9 208 894 8 — — 1 — — 9 — — — — — 9 Total number of net wells drilled 501 553 917 14 B. Exploratory and Development Activities Regarding Oil and Gas Resources Extracted by Mining Technologies Syncrude Operations. Syncrude is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract the crude bitumen, and then upgrade it to produce a high-quality, light (32 degrees API), sweet, synthetic crude oil. Imperial Oil Limited is the owner of a 25 percent interest in the joint venture. Exxon Mobil Corporation has a 69.6 percent interest in Imperial Oil Limited. In 2021, the company’s share of net production of synthetic crude oil was about 62 thousand barrels per day and share of net acreage was about 55 thousand acres in the Athabasca oil sands deposit. Kearl Operations. Kearl is a joint venture established to recover shallow deposits of oil sands using open-pit mining methods to extract the crude bitumen. Imperial Oil Limited holds a 70.96 percent interest in the joint venture and ExxonMobil Canada Properties holds the other 29.04 percent. Exxon Mobil Corporation has a 69.6 percent interest in Imperial Oil Limited and a 100 percent interest in ExxonMobil Canada Properties. Kearl is comprised of six oil sands leases covering about 49 thousand acres in the Athabasca oil sands deposit. Kearl is located approximately 40 miles north of Fort McMurray, Alberta, Canada. Bitumen is extracted from oil sands and processed through bitumen extraction and froth treatment trains. The product, a blend of bitumen and diluent, is shipped to our refineries and to other third parties. Diluent is natural gas condensate or other light hydrocarbons added to the crude bitumen to facilitate transportation by pipeline and rail. During 2021, average net production at Kearl was about 251 thousand barrels per day. During 2021, approximately 2.4 billion barrels of bitumen at Kearl were added to proved reserves primarily as a result of an improved SEC price basis versus 2020. 5. Present Activities A. Wells Drilling Wells Drilling Consolidated Subsidiaries United States Canada/Other Americas Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Africa Asia Total Equity Companies Total gross and net wells drilling Year-End 2021 Year-End 2020 Gross Net Gross Net 1,059 44 2 11 11 — 1,127 12 — — 2 14 588 33 1 2 3 — 627 — — — 1 1 1,206 38 13 14 14 — 1,285 3 1 6 2 12 741 29 6 3 4 — 783 1 1 1 1 4 1,141 628 1,297 787 15 B. Review of Principal Ongoing Activities UNITED STATES ExxonMobil’s year-end 2021 acreage holdings totaled 10.5 million net acres, of which 0.3 million net acres were offshore. ExxonMobil was active in areas onshore and offshore in the lower 48 states and in Alaska. Development activities continued on the Golden Pass liquefied natural gas export project. During the year, a total of 449.4 net exploration and development wells were completed in the inland lower 48 states. Development activities focused on liquids-rich opportunities in the onshore U.S., primarily in the Permian Basin of West Texas and New Mexico. ExxonMobil’s net acreage in the Gulf of Mexico at year-end 2021 was 0.3 million acres. A total of 0.8 net exploration and development wells were completed during the year. Participation in Alaska production and development continued with a total of 1.1 net development wells completed. CANADA / OTHER AMERICAS Canada Oil and Gas Operations: ExxonMobil’s year-end 2021 acreage holdings totaled 6.7 million net acres, of which 3.9 million net acres were offshore. A total of 3.7 net development wells were completed during the year. In Situ Bitumen Operations: ExxonMobil’s year-end 2021 in situ bitumen acreage holdings totaled 0.6 million net onshore acres. A total of 12 net development wells at Cold Lake were completed during the year. Argentina ExxonMobil’s net acreage totaled 2.9 million acres, of which 2.6 million net acres were offshore at year-end 2021. During the year, a total of 8.1 net development wells were completed. Brazil ExxonMobil’s net acreage totaled 2.6 million offshore acres at year-end 2021. During the year, a total of 1.4 net exploration wells were completed. The Bacalhau Phase 1 project was funded in 2021. Guyana ExxonMobil’s net acreage totaled 4.6 million offshore acres at year-end 2021. During the year, a total of 11 net exploration and development wells were completed. Development activities continued on the Liza Phase 2 and Payara projects. EUROPE Germany ExxonMobil’s net acreage totaled 1.6 million onshore acres at year-end 2021. During the year, a total of 0.3 net development well was completed. Netherlands ExxonMobil’s net interest in licenses totaled 1.4 million acres, of which 1.0 million acres were onshore at year-end 2021. During the year, a total of 0.5 net development well was completed. In 2021, the Dutch Government further reduced Groningen gas extraction. The expectation is that Groningen will cease regular production in 2022. United Kingdom ExxonMobil’s net interest in licenses totaled 0.1 million offshore acres at year-end 2021. During the year, a total of 0.4 net development well was completed. 16 AFRICA Angola ExxonMobil’s net acreage totaled 3.0 million acres, of which 2.9 million net acres were offshore at year-end 2021. During the year, a total of 1.1 net development wells were completed. Chad ExxonMobil’s net acreage totaled 46 thousand onshore acres at year-end 2021. In 2021, ExxonMobil entered into an agreement to divest its assets in Chad. The transaction is expected to close in 2022. Equatorial Guinea ExxonMobil’s net acreage totaled 0.1 million offshore acres at year-end 2021. In 2021, ExxonMobil relinquished 0.4 million net offshore acres. Mozambique ExxonMobil’s net acreage totaled 1.8 million offshore acres at year-end 2021. During the year, a total of 1.5 net development wells were completed. Development activities continued on the Coral South Floating LNG project. Nigeria ExxonMobil’s net acreage totaled 0.9 million offshore acres at year-end 2021. ASIA Azerbaijan ExxonMobil's net acreage totaled 7 thousand offshore acres at year-end 2021. During the year, a total of 0.7 net development wells were completed. Indonesia ExxonMobil’s net acreage totaled 0.1 million onshore acres at year-end 2021. Iraq ExxonMobil’s net acreage totaled 36 thousand onshore acres at year-end 2021. Oil field rehabilitation activities continued during 2021 and across the life of this project will include drilling of new wells; working over of existing wells; and optimization, debottlenecking and expansion of facilities. Kazakhstan ExxonMobil’s net acreage totaled 0.3 million acres, of which 0.2 million net acres were offshore at year-end 2021. During the year, a total of 2 net development wells were completed. Development activities continued on the Tengiz Expansion project. Malaysia ExxonMobil’s interests in production sharing contracts covered 0.2 million net acres offshore at year-end 2021. Qatar Through our joint ventures with Qatar Energy, ExxonMobil’s net acreage totaled 65 thousand acres offshore at year-end 2021. ExxonMobil participated in 62.2 million tonnes per year gross liquefied natural gas capacity and 3.4 billion cubic feet per day of flowing gas capacity at year-end. During the year, a total of 4.8 net development wells were completed. The North Field Production Sustainment Integrated Drilling and Looping project was funded in 2021. Effective January 1, 2022, ExxonMobil no longer participates in the Qatar Liquefied Gas Company Limited (QG1) venture, representing 3.6 thousand net acres and 9.9 million tonnes per year gross liquefied natural gas capacity. Russia ExxonMobil’s net acreage holdings in Sakhalin totaled 85 thousand offshore acres at year-end 2021. During the year, a total of 0.9 net development wells were completed. Thailand ExxonMobil’s net onshore acreage in Thailand concessions totaled 16 thousand acres at year-end 2021. During the year, a total of 0.2 development wells were completed. 17 United Arab Emirates ExxonMobil’s net acreage in the Abu Dhabi offshore Upper Zakum oil concession was 81 thousand acres at year-end 2021. During the year, a total of 0.6 net development wells were completed. Development activities continued on the Upper Zakum 1 MBD Sustainment project. AUSTRALIA / OCEANIA Australia ExxonMobil’s net acreage totaled 1.8 million acres offshore and 10 thousand acres onshore at year-end 2021. The co-venturer-operated Gorgon Jansz liquefied natural gas (LNG) development consists of a subsea infrastructure for offshore production and transportation of the gas, a 15.6 million tonnes per year LNG facility and a 280 million cubic feet per day domestic gas plant located on Barrow Island, Western Australia. The Jansz-Io Compression project was funded in 2021. Development activities continued on the Gorgon Stage 2 project during the year. Papua New Guinea ExxonMobil’s net acreage totaled 3.4 million acres, of which 1.2 million net acres were offshore at year-end 2021. In 2021, ExxonMobil relinquished 2.1 million net offshore acres. The Papua New Guinea (PNG) liquefied natural gas integrated development includes gas production and processing facilities in the southern PNG Highlands, onshore and offshore pipelines, and a 6.9 million tonnes per year liquefied natural gas facility near Port Moresby. WORLDWIDE EXPLORATION At year-end 2021, exploration activities were under way in several areas in which ExxonMobil has no established production operations and thus are not included above. A total of 18.3 million net acres were held at year-end 2021. 6. Delivery Commitments ExxonMobil sells crude oil and natural gas from its producing operations under a variety of contractual obligations, some of which may specify the delivery of a fixed and determinable quantity for periods longer than one year. ExxonMobil also enters into natural gas sales contracts where the source of the natural gas used to fulfill the contract can be a combination of our own production and the spot market. Worldwide, we are contractually committed to deliver approximately 28 million barrels of oil and 2,500 billion cubic feet of natural gas for the period from 2022 through 2024. We expect to fulfill the majority of these delivery commitments with production from our proved developed reserves. Any remaining commitments will be fulfilled with production from our proved undeveloped reserves and purchases on the open market as necessary. 18 7. Oil and Gas Properties, Wells, Operations and Acreage A. Gross and Net Productive Wells Gross and Net Productive Wells Consolidated Subsidiaries United States Canada/Other Americas Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Asia Total Equity Companies Total gross and net productive wells Year-End 2021 Year-End 2020 Oil Gas Oil Gas Gross Net Gross Net Gross Net Gross Net 19,401 4,656 439 1,102 1,038 522 27,158 7,566 4,548 116 416 333 99 13,078 18,670 3,209 441 24 137 94 22,575 10,773 1,247 207 10 80 40 12,357 19,631 4,754 559 1,141 974 540 27,599 7,878 4,644 126 432 310 102 13,492 20,480 3,276 487 26 132 90 24,491 12,195 1,275 221 10 78 38 13,817 12,108 57 225 12,390 39,548 4,793 20 56 4,869 17,947 3,355 547 168 4,070 26,645 333 171 35 539 12,896 12,368 57 217 12,642 40,241 4,851 20 54 4,925 18,417 4,223 552 157 4,932 29,423 417 172 32 621 14,438 There were 23,645 gross and 20,528 net operated wells at year-end 2021 and 25,595 gross and 22,239 net operated wells at year-end 2020. The number of wells with multiple completions was 1,082 gross in 2021 and 1,067 gross in 2020. 19 B. Gross and Net Developed Acreage Gross and Net Developed Acreage Consolidated Subsidiaries United States Canada/Other Americas (1) Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Asia Total Equity Companies Total gross and net developed acreage Year-End 2021 Year-End 2020 Gross Net Gross Net (thousands of acres) 12,180 2,905 1,980 2,409 1,929 3,242 24,645 687 3,646 701 5,034 29,679 7,503 2,075 1,078 818 557 1,067 13,098 163 1,116 160 1,439 14,537 12,834 2,944 2,231 2,409 1,938 3,262 25,618 928 3,667 701 5,296 30,914 7,971 2,071 1,189 818 561 1,068 13,678 208 1,118 160 1,486 15,164 (1) Includes developed acreage in Other Americas of 490 gross and 311 net thousands of acres for 2021 and 2020. Separate acreage data for oil and gas are not maintained because, in many instances, both are produced from the same acreage. C. Gross and Net Undeveloped Acreage Gross and Net Undeveloped Acreage Consolidated Subsidiaries United States Canada/Other Americas (1) Europe Africa Asia Australia/Oceania Total Consolidated Subsidiaries Equity Companies United States Europe Africa Asia Total Equity Companies Total gross and net undeveloped acreage Year-End 2021 Year-End 2020 Gross Net Gross Net (thousands of acres) 6,751 36,764 14,458 23,797 766 8,638 91,174 159 596 596 — 1,351 92,525 2,807 18,246 5,961 15,186 227 4,112 46,539 64 139 149 — 352 46,891 6,969 37,833 14,802 35,956 888 12,971 109,419 160 765 596 — 1,521 110,940 2,967 18,985 6,018 24,558 280 6,265 59,073 64 214 149 — 427 59,500 (1) Includes undeveloped acreage in Other Americas of 26,084 gross and 12,471 net thousands of acres for 2021 and 2020. 20 ExxonMobil’s investment in developed and undeveloped acreage is comprised of numerous concessions, blocks, and leases. The terms and conditions under which the Corporation maintains exploration and/or production rights to the acreage are property-specific, contractually defined, and vary significantly from property to property. Work programs are designed to ensure that the exploration potential of any property is fully evaluated before expiration. In some instances, the Corporation may elect to relinquish acreage in advance of the contractual expiration date if the evaluation process is complete and there is not a business basis for extension. In cases where additional time may be required to fully evaluate acreage, the Corporation has generally been successful in obtaining extensions. The scheduled expiration of leases and concessions for undeveloped acreage over the next three years is not expected to have a material adverse impact on the Corporation. D. Summary of Acreage Terms UNITED STATES Oil and gas exploration and production rights are acquired from mineral interest owners through a lease. Mineral interest owners include the Federal and State governments, as well as private mineral interest owners. Leases typically have an exploration period ranging from one to ten years, and a production period that normally remains in effect until production ceases. Under certain circumstances, a lease may be held beyond its exploration term even if production has not commenced. In some instances regarding private property, a “fee interest” is acquired where the underlying mineral interests are owned outright. CANADA / OTHER AMERICAS Canada Exploration licenses or leases in onshore areas are acquired for varying periods of time with renewals or extensions possible. These licenses or leases entitle the holder to continue existing licenses or leases upon completing specified work. In general, these license and lease agreements are held as long as there is proven production capability on the licenses and leases. Exploration licenses in offshore eastern Canada and the Beaufort Sea are held by work commitments of various amounts and rentals. They are valid for a term of nine years. Offshore production licenses are valid for 25 years, with rights of extension for continued production. Significant discovery licenses in the offshore, relating to currently undeveloped discoveries, do not have a definite term. Argentina The Federal Hydrocarbon Law was amended in 2014. Pursuant to the amended law, the production term for an onshore unconventional concession is 35 years, and 25 years for a conventional concession, with unlimited 10-year extensions possible, once a field has been developed. In 2019, the government granted three offshore exploration licenses, with terms of eight years, divided into two exploration periods of four years, with an optional extension of five years for each license. Two onshore exploration concessions were initially granted prior to the amendment and are governed under Provincial Law with expiration terms through 2024. Brazil The exploration and production of oil and gas are governed by concession contracts and production sharing contracts. Concession contracts provide for an exploration period of up to 8 years and a production period of 27 years. Production sharing contracts provide for an exploration period of up to 7 years and a production period of up to 28 years. Guyana The Petroleum (Exploration and Production) Act authorizes the government of Guyana to grant petroleum prospecting and production licenses and to enter into petroleum agreements for the exploration and production of hydrocarbons. Petroleum agreements provide for an exploration period of up to 10 years and a production period of 20 years, with a 10-year extension. EUROPE Germany Exploration concessions are granted for an initial maximum period of five years, with an unlimited number of extensions up to three years each. Extensions are subject to specific minimum work commitments. Production licenses are normally granted for 20 to 25 years with multiple possible extensions subject to production on the license. Netherlands Under the Mining Law, effective January 1, 2003, exploration and production licenses for both onshore and offshore areas are issued for a period as explicitly defined in the license. The term is based on the period of time necessary to perform the activities for which the license is issued. License conditions are stipulated in the license and are based on the Mining Law. 21 Production rights granted prior to January 1, 2003, remain subject to their existing terms, and differ slightly for onshore and offshore areas. Onshore production licenses issued prior to 1988 were indefinite; from 1988 they were issued for a period as explicitly defined in the license, ranging from 35 to 45 years. Offshore production licenses issued before 1976 were issued for a fixed period of 40 years; from 1976 they were again issued for a period as explicitly defined in the license, ranging from 15 to 40 years. United Kingdom Acreage terms are fixed by the government and are periodically changed. For example, many of the early licenses issued under the first four licensing rounds provided an initial term of six years with relinquishment of at least one-half of the original area at the end of the initial term, subject to extension for a further 40 years. At the end of any such 40-year term, licenses may continue in producing areas until cessation of production; or licenses may continue in development areas for periods agreed on a case-by-case basis until they become producing areas; or licenses terminate in all other areas. The majority of traditional licenses currently issued have an initial exploration term of four years with a second term extension of four years, and a final production term of 18 years, with a mandatory relinquishment of 50 percent of the acreage after the initial term and of all acreage that is not covered by a development plan at the end of the second term. AFRICA Angola Exploration and production activities are governed by either production sharing agreements or other contracts with initial exploration terms ranging from three to four years with options to extend from one to five years. The production periods range from 20 to 30 years, and the agreements generally provide for negotiated extensions. Chad Exploration permits are issued for a period of five years, and are renewable for one or two further five-year periods. The terms and conditions of the permits, including relinquishment obligations, are specified in a negotiated convention. The production term is 30 years and in 2017 was extended by 20 years to 2050. Equatorial Guinea Exploration, development and production activities are governed by production sharing contracts negotiated with the State Ministry of Mines and Hydrocarbons. The production period for crude oil is 30 years. Mozambique Exploration and production activities are generally governed by concession contracts with the Government of the Republic of Mozambique, represented by the Ministry of Mineral Resources and Energy. An interest in Area 4 offshore Mozambique was acquired in 2017. Terms for Area 4 are governed by the Exploration and Production Concession Contract (EPCC) for Area 4 Offshore of the Rovuma Block. The EPCC expires 30 years after an approved plan of development becomes effective for a given discovery area. In 2018, an interest was acquired in offshore blocks, A5-B, Z5-C and Z5-D. Terms for the three blocks are governed by their respective EPCCs, with blocks Z5-C and Z5-D having an initial exploration phase that expires in 2022 and block A5-B's initial exploration phase expiring in 2023 after being granted a one-year extension. The EPCCs provide a development and production period that expires 30 years after the approval of a plan of development. Nigeria Exploration and production activities in the deepwater offshore areas are typically governed by production sharing contracts (PSCs) with the national oil company, the Nigerian National Petroleum Corporation (NNPC). NNPC typically holds the underlying Oil Prospecting License (OPL) and any resulting Oil Mining Lease (OML). The terms of the PSCs are generally 30 years, including a 10-year exploration period (an initial exploration phase that can be divided into multiple optional periods) covered by an OPL. Upon commercial discovery, an OPL may be converted to an OML. Partial relinquishment is required under the PSC at the end of the 10- year exploration period, and OMLs have a 20-year production period that may be extended, subject to the partial relinquishment provision of the Petroleum Industry Act (PIA) enacted on August 16, 2021. Some exploration activities are carried out in deepwater by joint ventures with local companies holding interests in an OPL. OPLs in deepwater offshore areas are valid for 10 years, while in all other areas the licenses are for five years. Demonstrating a commercial discovery is the basis for conversion of an OPL to an OML. 22 OMLs granted prior to the 1969 Petroleum Act (i.e., under the Mineral Oils Act 1914, repealed by the 1969 Petroleum Act) were for 30 years onshore and 40 years in offshore areas and have been renewed, effective December 1, 2008, for a further period of 20 years, with a further renewal option of 20 years. Operations under these pre-1969 OMLs are conducted under a joint venture agreement with NNPC rather than a PSC. Commercial terms applicable to the existing joint venture oil production are defined by the Petroleum Profits Tax Act. OMLs granted under the 1969 Petroleum Act, which include all deepwater OMLs, have a maximum term of 20 years without distinction for onshore or offshore location and are renewable, upon 12-months written notice, for another period of 20 years. OMLs not held by NNPC are also subject to a mandatory 50-percent relinquishment after the first 10 years of their duration. ASIA Azerbaijan The production sharing agreement (PSA) for the development of the Azeri-Chirag-Gunashli field was established for an initial period of 30 years starting from the PSA execution date in 1994. The PSA was amended in September 2017 to extend the term by 25 years to 2049. Indonesia Exploration and production activities in Indonesia are generally governed by cooperation contracts, usually in the form of a production sharing contract (PSC), negotiated with BPMIGAS, a government agency established in 2002 to manage upstream oil and gas activities. In 2012, Indonesia’s Constitutional Court ruled certain articles of law relating to BPMIGAS to be unconstitutional, but stated that all existing PSCs signed with BPMIGAS should remain in force until their expiry, and the functions and duties previously performed by BPMIGAS are to be carried out by the relevant Ministry of the Government of Indonesia until the promulgation of a new oil and gas law. By presidential decree, SKKMIGAS became the interim successor to BPMIGAS. The current PSCs have an exploration period of six years, which can be extended once for a period of four years with a total contract period of 30 years including an exploitation period. PSC terms can be extended for a maximum of 20 years for each extension with the approval of the government. Iraq Development and production activities in the state-owned oil and gas fields are governed by contracts with regional oil companies of the Iraqi Ministry of Oil. An ExxonMobil affiliate entered into a contract with Basra Oil Company of the Iraqi Ministry of Oil for the rights to participate in the development and production activities of the West Qurna Phase I oil and gas field effective March 1, 2010. The term of the contract is 20 years with the right to extend for five years. The contract provides for cost recovery plus per-barrel fees for incremental production above specified levels. Kazakhstan Onshore exploration and production activities are governed by the production license, exploration license, and joint venture agreements negotiated with the Republic of Kazakhstan. Existing production operations have a 40-year production period that commenced in 1993. Offshore exploration and production activities are governed by a production sharing agreement negotiated with the Republic of Kazakhstan. The exploration period is six years followed by separate appraisal periods for each discovery. The production period for each discovery, which includes development, is 20 years from the date of declaration of commerciality with the possibility of two 10- year extensions. Malaysia Production activities are governed by production sharing contracts (PSCs) negotiated with the national oil company. The PSCs have production terms of 25 years. Extensions are generally subject to the national oil company’s prior written approval. Qatar The State of Qatar grants gas production development project rights to develop and supply gas from the offshore North Field to permit the economic development and production of gas reserves sufficient to satisfy the gas and LNG sales obligations of these projects. The initial terms for these rights generally extend for 25 years. Extensions and terms are subject to State of Qatar approval. Russia Terms for ExxonMobil’s Sakhalin acreage are fixed by the current production sharing agreement between the Russian government and the Sakhalin-1 consortium, of which ExxonMobil is the operator. 23 Thailand The Petroleum Act of 1971 allows production under ExxonMobil’s concessions for 30 years with a 10-year extension at terms generally prevalent at the time. In 2021, one concession was extended to 2031. United Arab Emirates An interest in the development and production activities of the offshore Upper Zakum field was acquired in 2006. In 2017, the governing agreements were extended to 2051. AUSTRALIA / OCEANIA Australia Exploration and production activities conducted offshore in Commonwealth waters are governed by Federal legislation. Exploration permits are granted for an initial term of six years with two possible five-year renewal periods. Retention leases may be granted for resources that are not commercially viable at the time of application, but are expected to become commercially viable within 15 years. These are granted for periods of five years and renewals may be requested. Prior to July 1998, production licenses were granted initially for 21 years, with a further renewal of 21 years and thereafter indefinitely, i.e., for the life of the field. Effective from July 1998, new production licenses are granted indefinitely. In each case, a production license may be terminated if no production operations have been carried on for five years. Papua New Guinea Exploration and production activities are governed by the Oil and Gas Act. Petroleum prospecting licenses are granted for an initial term of six years with a five-year extension possible (an additional extension of three years is possible in certain circumstances). Generally, a 50-percent relinquishment of the license area is required at the end of the initial six-year term, if extended. Petroleum development licenses are granted for an initial 25-year period. An extension for further consecutive period(s) of up to 20 years may be granted at the Minister’s discretion. Petroleum retention licenses may be granted for gas resources that are not commercially viable at the time of application, but may become commercially viable within the maximum possible retention time of 15 years. Petroleum retention licenses are granted for five-year terms, and may be extended, at the Minister’s discretion, twice for the maximum retention time of 15 years. Extensions of petroleum retention licenses may be for periods of less than one year, renewable annually, if the Minister considers at the time of extension that the resources could become commercially viable in less than five years, provided that the total period of all extensions granted does not exceed 10 years. 24 Information with regard to the Downstream segment follows: ExxonMobil’s Downstream segment manufactures, trades and sells petroleum products. The refining and supply operations encompass a global network of manufacturing plants, transportation systems, and distribution centers that provide a range of fuels, lubricants and other products and feedstocks to our customers around the world. Refining Capacity At Year-End 2021 (1) ExxonMobil Share KBD (2) ExxonMobil Interest % United States Joliet Baton Rouge Billings Baytown Beaumont Total United States Canada Strathcona Nanticoke Sarnia Total Canada Europe Antwerp Fos-sur-Mer Gravenchon Karlsruhe Trecate Rotterdam Fawley Total Europe Asia Pacific Fujian Jurong/PAC Sriracha Total Asia Pacific Middle East Yanbu Total Worldwide Illinois Louisiana Montana Texas Texas Alberta Ontario Ontario Belgium France France Germany Italy Netherlands United Kingdom China Singapore Thailand Saudi Arabia 254 521 60 561 369 1,765 196 113 119 428 307 133 244 78 132 192 262 1,348 67 592 167 826 100 100 100 100 100 69.6 69.6 69.6 100 82.9 82.9 25 75.2 100 100 25 100 66 200 50 4,567 (1) Capacity data is based on 100 percent of rated refinery process unit stream-day capacities under normal operating conditions, less the impact of shutdowns for regular repair and maintenance activities, averaged over an extended period of time. The listing excludes refining capacity for a minor interest held through equity securities in New Zealand, and the Laffan Refinery in Qatar for which results are reported in the Upstream segment. (2) Thousands of barrels per day (KBD). ExxonMobil share reflects 100 percent of atmospheric distillation capacity in operations of ExxonMobil and majority-owned subsidiaries. For companies owned 50 percent or less, ExxonMobil share is the greater of ExxonMobil’s interest or that portion of distillation capacity normally available to ExxonMobil. 25 The marketing operations sell products and services throughout the world through our Exxon, Esso and Mobil brands. Retail Sites At Year-End 2021 — 11,315 11,315 — 2,389 2,389 197 5,834 6,031 566 1,327 1,893 — 489 489 223 205 428 986 21,559 22,545 United States Owned/leased Distributors/resellers Total United States Canada Owned/leased Distributors/resellers Total Canada Europe Owned/leased Distributors/resellers Total Europe Asia Pacific Owned/leased Distributors/resellers Total Asia Pacific Latin America Owned/leased Distributors/resellers Total Latin America Middle East/Africa Owned/leased Distributors/resellers Total Middle East/Africa Worldwide Owned/leased Distributors/resellers Total Worldwide 26 Information with regard to the Chemical segment follows: ExxonMobil’s Chemical segment manufactures and sells petrochemicals. The Chemical business supplies olefins, polyolefins, aromatics, and a wide variety of other petrochemicals. Chemical Complex Capacity At Year-End 2021 (1) Ethylene Polyethylene Polypropylene Paraxylene ExxonMobil Interest % (millions of metric tons per year) North America Baton Rouge Baytown Beaumont Corpus Christi Mont Belvieu Sarnia Total North America Europe Antwerp Fife Gravenchon Meerhout Rotterdam Total Europe Middle East Al Jubail Yanbu Total Middle East Asia Pacific Fujian Singapore Sriracha Total Asia Pacific Louisiana Texas Texas Texas Texas Ontario Belgium United Kingdom France Belgium Netherlands Saudi Arabia Saudi Arabia China Singapore Thailand 1.1 4.0 0.9 0.9 — 0.3 7.2 — 0.4 0.4 — — 0.8 0.7 1.0 1.7 0.3 1.9 — 2.2 1.3 — 1.7 0.7 2.3 0.5 6.5 0.4 — 0.4 0.5 — 1.3 0.7 0.7 1.4 0.2 1.9 — 2.1 Total Worldwide 11.9 11.2 100 100 100 50 100 69.6 100 50 100 100 100 50 50 25 100 66 0.5 0.7 — — — — 1.2 — — 0.3 — — 0.3 — 0.2 0.2 0.2 0.9 — 1.1 2.8 — 0.6 0.3 — — — 0.9 — — — — 0.7 0.7 — — — 0.2 1.8 0.5 2.5 4.1 (1) Capacity reflects 100 percent for operations of ExxonMobil and majority-owned subsidiaries. For companies owned 50 percent or less, capacity is ExxonMobil’s interest. Due to rounding, numbers presented above may not add up precisely to the totals indicated. 27 ITEM 3. LEGAL PROCEEDINGS ExxonMobil has elected to use a $1 million threshold for disclosing environmental proceedings. Refer to the relevant portions of “Note 16: Litigation and Other Contingencies” of the Financial Section of this report for additional information on legal proceedings. ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 28 Information about our Executive Officers (positions and ages as of February 23, 2022) Darren W. Woods Chairman of the Board Held current title since: January 1, 2017 Age: 57 Mr. Darren W. Woods became a Director and President of Exxon Mobil Corporation on January 1, 2016, and Chairman of the Board and Chief Executive Officer of Exxon Mobil Corporation on January 1, 2017, positions he continues to hold as of this filing date. Neil A. Chapman Senior Vice President Held current title since: January 1, 2018 Age: 59 Mr. Neil A. Chapman was President of ExxonMobil Chemical Company and Vice President of Exxon Mobil Corporation January 1, 2015 – December 31, 2017. He became Senior Vice President of Exxon Mobil Corporation on January 1, 2018, a position he continues to hold as of this filing date. Kathryn A. Mikells Senior Vice President and Chief Financial Officer Held current title since: August 9, 2021 Age: 56 Ms. Kathryn A. Mikells was Chief Financial Officer and a member of the board of directors of Diageo plc November 2015 – June 2021. Prior to that time, she held Chief Financial Officer positions at Xerox, ADT, Nalco, and United Airlines, where she also served as Vice President of Investor Relations and Treasurer. She became Senior Vice President and Chief Financial Officer of Exxon Mobil Corporation on August 9, 2021, positions she continues to hold as of this filing date. Jack P. Williams, Jr. Senior Vice President Held current title since: June 1, 2014 Age: 58 Mr. Jack P. Williams, Jr. became Senior Vice President of Exxon Mobil Corporation on June 1, 2014, a position he continues to hold as of this filing date. Ian S. Carr Vice President September 1, 2020 Held current title since: Mr. Ian S. Carr was Vice President, Strategy and Planning, ExxonMobil Refining & Supply Company May 1, 2014 – July 31, 2017. He was Vice President, Upstream Strategy and Planning, ExxonMobil Gas & Power Marketing Company August 1, 2017 – March 31, 2019. He was Vice President, Strategy and Portfolio Management, ExxonMobil Upstream Business Development Company April 1, 2019 – September 30, 2019. He was Senior Vice President, Fuels, ExxonMobil Fuels & Lubricants Company October 1, 2019 – August 31, 2020. He became President of ExxonMobil Fuels & Lubricants Company and Vice President of Exxon Mobil Corporation on September 1, 2020, positions he continues to hold as of this filing date. Age: 58 Linda D. DuCharme Vice President President, ExxonMobil Integrated Solutions Company July 1, 2020, and April 1, 2019, respectively Held current title since: Ms. Linda D. DuCharme was President of ExxonMobil Global Services Company August 1, 2016 – March 31, 2019. She became President of ExxonMobil Upstream Integrated Solutions Company April 1, 2019, and President of ExxonMobil Upstream Business Development Company and Vice President of Exxon Mobil Corporation on July 1, 2020, positions she continues to hold as of this filing date. Age: 57 Len M. Fox Vice President and Controller Held current title since: Mr. Len M. Fox was Vice President, Chemical Business Services and Treasurer, ExxonMobil Chemical Company June 1, 2015 – January 31, 2020. He was Assistant Treasurer of Exxon Mobil Corporation February 1, 2020 – December 31, 2020. Following a special assignment, he became Vice President and Controller of Exxon Mobil Corporation on March 1, 2021, positions he continues to hold as of this filing date. March 1, 2021 Age: 58 29 Jon M. Gibbs President, ExxonMobil Global Projects Company Held current title since: Mr. Jon M. Gibbs was Vice President, Asia Pacific and Middle East, ExxonMobil Development Company January 1, 2016 – January 14, 2019. He was Upstream Organization Design Team Lead, ExxonMobil Development Company January 15, 2019 – March 31, 2019. He was President, ExxonMobil Global Services Company April 1, 2019 – June 30, 2020. He was Senior Vice President, Global Project Delivery, ExxonMobil Global Projects Company July 1, 2020 – March 31, 2021. He became President of ExxonMobil Global Projects Company on April 1, 2021, a position he continues to hold as of this filing date. April 1, 2021 Age: 50 Stephen A. Littleton Vice President – Investor Relations and Secretary Held current title since: Mr. Stephen A. Littleton was Assistant Controller of Exxon Mobil Corporation June 1, 2015 – April 30, 2018. He was Vice President, Downstream Business Services and Downstream Controller May 1, 2018 – March 14, 2020. He became Vice President – Investor Relations and Secretary of Exxon Mobil Corporation on March 15, 2020, positions he continues to hold as of this filing date. March 15, 2020 Age: 56 Liam M. Mallon Vice President Held current title since: Mr. Liam M. Mallon was President of ExxonMobil Development Company January 1, 2017 – March 31, 2019. He became President of ExxonMobil Upstream Oil & Gas Company and Vice President of Exxon Mobil Corporation on April 1, 2019, positions he continues to hold as of this filing date. April 1, 2019 Age: 59 Karen T. McKee Vice President Held current title since: Ms. Karen T. McKee was Vice President, Basic Chemicals, ExxonMobil Chemical Company May 1, 2014 – July 31, 2017. She was Senior Vice President, Basic Chemicals, Integration & Growth, ExxonMobil Chemical Company August 1, 2017 – March 31, 2019. She became President of ExxonMobil Chemical Company and Vice President of Exxon Mobil Corporation on April 1, 2019, positions she continues to hold as of this filing date. April 1, 2019 Age: 55 Craig S. Morford Vice President and General Counsel Held current title since: Mr. Craig S. Morford was Chief Legal and Compliance Officer of Cardinal Heath, Inc. prior to joining Exxon Mobil Corporation in May 2019. He was Deputy General Counsel of Exxon Mobil Corporation May 1, 2019 – October 31, 2020. He became Vice President and General Counsel of Exxon Mobil Corporation on November 1, 2020, positions he continues to hold as of this filing date. November 1, 2020 Age: 63 James M. Spellings, Jr. Vice President, Treasurer and General Tax Counsel Held current title since: March 1, 2010 (Vice President and General Tax Counsel) April 1, 2020 (Treasurer) Age: 60 Mr. James M. Spellings, Jr. became Vice President and General Tax Counsel of Exxon Mobil Corporation on March 1, 2010, and Treasurer of Exxon Mobil Corporation on April 1, 2020, positions he continues to hold as of this filing date. Theodore J. Wojnar, Jr. Vice President – Corporate Strategic Planning Held current title since: August 1, 2017 Age: 62 Mr. Theodore J. Wojnar, Jr. was President of ExxonMobil Research and Engineering Company April 1, 2011 – July 31, 2017. He became Vice President – Corporate Strategic Planning of Exxon Mobil Corporation on August 1, 2017, a position he continues to hold as of this filing date. Officers are generally elected by the Board of Directors at its meeting on the day of each annual election of directors, with each such officer serving until a successor has been elected and qualified. The above-named officers are required to file reports under Section 16 of the Securities Exchange Act of 1934. 30 PART II ITEM 5. MARKET FOR REGISTRANT'S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES The principal market where ExxonMobil common stock (XOM) is traded is the New York Stock Exchange, although the stock is traded on other exchanges in and outside the United States. There were 327,689 registered shareholders of ExxonMobil common stock at December 31, 2021. At January 31, 2022, the registered shareholders of ExxonMobil common stock numbered 325,508. On January 26, 2022, the Corporation declared an $0.88 dividend per common share, payable March 10, 2022. Reference is made to Item 12 in Part III of this report. Issuer Purchases of Equity Securities for Quarter Ended December 31, 2021 Period October 2021 November 2021 December 2021 Total Average Price Paid per Share Total Number of Shares Purchased - - - — Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs - - - — Maximum Number of Shares that May Yet be Purchased Under the Plans or Programs (See Note 1) During the fourth quarter, the Corporation did not purchase any shares of its common stock for the treasury, and did not issue or sell any unregistered equity securities. Note 1 - In January 2022, the Corporation initiated a share repurchase program of up to $10 billion over 12 to 24 months. ITEM 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Reference is made to the section entitled “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in the Financial Section of this report. ITEM 7A. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Reference is made to the section entitled “Market Risks” in the Financial Section of this report. All statements, other than historical information incorporated in this Item 7A, are forward-looking statements. The actual impact of future market changes could differ materially due to, among other things, factors discussed in this report. 31 ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Reference is made to the following in the Financial Section of this report: • • • Consolidated financial statements, together with the report thereon of PricewaterhouseCoopers LLP (PCAOB ID 238) dated February 23, 2022, beginning with the section entitled “Report of Independent Registered Public Accounting Firm” and continuing through “Note 19: Income and Other Taxes”; “Supplemental Information on Oil and Gas Exploration and Production Activities” (unaudited); and “Frequently Used Terms” (unaudited). Financial Statement Schedules have been omitted because they are not applicable or the required information is shown in the consolidated financial statements or notes thereto. ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE None. ITEM 9A. CONTROLS AND PROCEDURES Management’s Evaluation of Disclosure Controls and Procedures As indicated in the certifications in Exhibit 31 of this report, the Corporation’s Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer have evaluated the Corporation’s disclosure controls and procedures as of December 31, 2021. Based on that evaluation, these officers have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. Management’s Report on Internal Control Over Financial Reporting Management, including the Corporation’s Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer, is responsible for establishing and maintaining adequate internal control over the Corporation’s financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that Exxon Mobil Corporation’s internal control over financial reporting was effective as of December 31, 2021. PricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2021, as stated in their report included in the Financial Section of this report. Changes in Internal Control Over Financial Reporting There were no changes during the Corporation’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting. ITEM 9B. OTHER INFORMATION None. ITEM 9C. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS Not applicable. 32 PART III ITEM 10. DIRECTORS, EXECUTIVE OFFICERS AND CORPORATE GOVERNANCE Reference is made to the section of this report titled “Information about our Executive Officers”. Incorporated by reference to the following from the registrant’s definitive proxy statement for the 2022 annual meeting of shareholders (the “2022 Proxy Statement”): • • • The section entitled “Election of Directors”; The portions entitled “Director Qualifications”, “Director Nomination Process and Board Succession”, and “Code of Ethics and Business Conduct” of the section entitled “Corporate Governance”; and The “Audit Committee” portion, “Director Independence” portion, “Board Meetings and Annual Meeting Attendance” portion, and the membership table of the portion entitled “Board Committees” of the section entitled “Corporate Governance”. ITEM 11. EXECUTIVE COMPENSATION Incorporated by reference to the sections entitled “Director Compensation”, “Compensation Committee Report”, “Compensation Discussion and Analysis”, “Executive Compensation Tables”, and “Pay Ratio” of the registrant’s 2022 Proxy Statement. ITEM 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT AND RELATED STOCKHOLDER MATTERS The information required under Item 403 of Regulation S-K is incorporated by reference to the sections “Director and Executive Officer Stock Ownership” and “Certain Beneficial Owners” of the registrant’s 2022 Proxy Statement. Equity Compensation Plan Information Plan Category Equity compensation plans approved by security holders (a) (b) (c) Number of Securities to be Issued Upon Exercise of Outstanding Options, Warrants and Rights 42,039,960 (1) Weighted- Average Exercise Price of Outstanding Options, Warrants and Rights — Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans [Excluding Securities Reflected in Column (a)] 66,104,769 (2)(3) Equity compensation plans not approved by security holders — Total 42,039,960 (1) The number of restricted stock units to be settled in shares. — — — 66,104,769 (2) Available shares can be granted in the form of restricted stock or other stock-based awards. Includes 65,754,069 shares available for award under the 2003 Incentive Program and 350,700 shares available for award under the 2004 Non- Employee Director Restricted Stock Plan. (3) Under the 2004 Non-Employee Director Restricted Stock Plan approved by shareholders in May 2004, and the related standing resolution adopted by the Board, each non-employee director automatically receives 8,000 shares of restricted stock when first elected to the Board and, if the director remains in office, an additional 2,500 restricted shares each following year. While on the Board, each non-employee director receives the same cash dividends on restricted shares as a holder of regular common stock, but the director is not allowed to sell the shares. The restricted shares may be forfeited if the director leaves the Board early. 33 ITEM 13. CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS, AND DIRECTOR INDEPENDENCE Incorporated by reference to the portion entitled “Related Person Transactions and Procedures” of the section entitled “Director and Executive Officer Stock Ownership”; and the portion entitled “Director Independence” of the section entitled “Corporate Governance” of the registrant’s 2022 Proxy Statement. ITEM 14. PRINCIPAL ACCOUNTING FEES AND SERVICES Incorporated by reference to the portion entitled “Audit Committee” of the section entitled “Corporate Governance” and the section entitled “Ratification of Independent Auditors” of the registrant’s 2022 Proxy Statement. PART IV ITEM 15. EXHIBITS, FINANCIAL STATEMENT SCHEDULES (a) (1) and (2) Financial Statements: See Table of Contents of the Financial Section of this report. (b) (3) Exhibits: See Index to Exhibits of this report. ITEM 16. FORM 10-K SUMMARY None. 34 FINANCIAL SECTION TABLE OF CONTENTS Business Profile Financial Information Frequently Used Terms Management’s Discussion and Analysis of Financial Condition and Results of Operations Forward-Looking Statements Overview Business Environment Business Results Liquidity and Capital Resources Capital and Exploration Expenditures Taxes Environmental Matters Market Risks Critical Accounting Estimates Management’s Report on Internal Control Over Financial Reporting Report of Independent Registered Public Accounting Firm Consolidated Financial Statements Statement of Income Statement of Comprehensive Income Balance Sheet Statement of Cash Flows Statement of Changes in Equity Notes to Consolidated Financial Statements 1. Summary of Accounting Policies 2. Restructuring Activities 3. Miscellaneous Financial Information 4. Other Comprehensive Income Information 5. Cash Flow Information 6. Additional Working Capital Information 7. Equity Company Information 8. Investments, Advances and Long-Term Receivables 9. Property, Plant and Equipment and Asset Retirement Obligations 10. Accounting for Suspended Exploratory Well Costs 11. Leases 12. Earnings Per Share 13. Financial Instruments and Derivatives 14. Long-Term Debt 15. Incentive Program 16. Litigation and Other Contingencies 17. Pension and Other Postretirement Benefits 18. Disclosures about Segments and Related Information 19. Income and Other Taxes Supplemental Information on Oil and Gas Exploration and Production Activities 35 36 37 38 42 42 43 46 56 59 60 61 61 63 67 68 70 71 72 73 74 75 79 80 81 82 82 83 85 85 87 89 91 92 93 95 96 97 103 106 110 BUSINESS PROFILE Financial Upstream United States Non-U.S. Total Downstream United States Non-U.S. Total Chemical United States Non-U.S. Total Corporate and Financing Earnings (Loss) After Income Taxes Average Capital Employed Return on Average Capital Employed Capital and Exploration Expenditures 2021 2020 2021 2020 2021 2020 2021 2020 (millions of dollars) (percent) (millions of dollars) 3,663 12,112 15,775 (19,385) 55,305 (645) 101,645 (20,030) 156,950 65,780 107,506 173,286 1,314 791 2,105 (852) 12,292 (225) 18,929 (1,077) 31,221 11,472 18,682 30,154 4,502 3,294 7,796 (2,636) 1,277 686 1,963 (3,296) 15,714 17,281 32,995 1,724 (22,440) 222,890 14,436 17,600 32,036 (1,445) 234,031 6.6 11.9 10.1 10.7 4.2 6.7 28.6 19.1 23.6 — 10.9 (29.5) (0.6) (11.6) 4,018 8,236 12,254 6,817 7,614 14,431 (7.4) (1.2) (3.6) 1,000 1,095 2,095 2,344 1,877 4,221 8.8 3.9 6.1 — 1,367 876 2,243 3 16,595 (9.3) 2,002 714 2,716 6 21,374 Total 23,040 See Frequently Used Terms for a definition and calculation of capital employed and return on average capital employed. Operating Net liquids production United States Non-U.S. Total 2021 2020 (thousands of barrels daily) 721 1,568 2,289 685 1,664 2,349 Refinery throughput United States Non-U.S. Total 2021 2020 (thousands of barrels daily) 1,623 2,322 3,945 1,549 2,224 3,773 (millions of cubic feet daily) (thousands of barrels daily) Natural gas production available for sale United States Non-U.S. Total 2,746 5,791 8,537 2,691 5,780 8,471 Petroleum product sales (2) United States Non-U.S. Total Oil-equivalent production (1) (thousands of oil-equivalent barrels daily) 3,761 3,712 Chemical prime product sales (2) (3) United States Non-U.S. Total 2,257 2,905 5,162 2,154 2,741 4,895 (thousands of metric tons) 9,724 16,608 26,332 9,010 16,439 25,449 (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. (2) Petroleum product and chemical prime product sales data reported net of purchases/sales contracts with the same counterparty. (3) Prime product sales are total product sales including ExxonMobil’s share of equity company volumes and finished-product transfers to the Downstream. 36 FINANCIAL INFORMATION Sales and other operating revenue Earnings (loss) Upstream Downstream Chemical Corporate and Financing Net income (loss) attributable to ExxonMobil Earnings (loss) per common share (dollars) Earnings (loss) per common share – assuming dilution (dollars) 2021 2020 2019 (millions of dollars, except where stated otherwise) 276,692 178,574 255,583 15,775 (20,030) 14,442 2,105 7,796 (1,077) 2,323 1,963 592 (2,636) (3,296) (3,017) 23,040 (22,440) 14,340 5.39 5.39 (5.25) (5.25) 3.36 3.36 Earnings (loss) to average ExxonMobil share of equity (percent) 14.1 (12.9) 7.5 Working capital Ratio of current assets to current liabilities (times) Additions to property, plant and equipment Property, plant and equipment, less allowances Total assets Exploration expenses, including dry holes Research and development costs Long-term debt Total debt Debt to capital (percent) Net debt to capital (percent) (1) ExxonMobil share of equity at year-end ExxonMobil share of equity per common share (dollars) Weighted average number of common shares outstanding (millions) 2,511 1.04 (11,470) 0.80 (13,937) 0.78 12,541 216,552 338,923 17,342 227,553 332,750 24,904 253,018 362,597 1,054 843 1,285 1,016 1,269 1,214 43,428 47,704 21.4 18.9 47,182 67,640 29.2 27.8 26,342 46,920 19.1 18.1 168,577 39.77 4,275 157,150 37.12 4,271 191,650 45.26 4,270 Number of regular employees at year-end (thousands) (2) 63.0 72.0 74.9 (1) Debt net of cash. (2) Regular employees are defined as active executive, management, professional, technical and wage employees who work full time or part time for the Corporation and are covered by the Corporation’s benefit plans and programs. 37 FREQUENTLY USED TERMS Listed below are definitions of several of ExxonMobil’s key business and financial performance measures. These definitions are provided to facilitate understanding of the terms and their calculation. Cash Flow From Operations and Asset Sales Cash flow from operations and asset sales is the sum of the net cash provided by operating activities and proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments from the Consolidated Statement of Cash Flows. This cash flow reflects the total sources of cash both from operating the Corporation’s assets and from the divesting of assets. The Corporation employs a long-standing and regular disciplined review process to ensure that assets are contributing to the Corporation’s strategic objectives. Assets are divested when they are no longer meeting these objectives or are worth considerably more to others. Because of the regular nature of this activity, we believe it is useful for investors to consider proceeds associated with asset sales together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions. Cash Flow From Operations and Asset Sales Net cash provided by operating activities Proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments Cash flow from operations and asset sales 2021 2020 2019 (millions of dollars) 48,129 14,668 29,716 3,176 51,305 999 15,667 3,692 33,408 Capital Employed Capital employed is a measure of net investment. When viewed from the perspective of how the capital is used by the businesses, it includes ExxonMobil’s net share of property, plant and equipment and other assets less liabilities, excluding both short-term and long- term debt. When viewed from the perspective of the sources of capital employed in total for the Corporation, it includes ExxonMobil’s share of total debt and equity. Both of these views include ExxonMobil’s share of amounts applicable to equity companies, which the Corporation believes should be included to provide a more comprehensive measure of capital employed. Capital Employed Business uses: asset and liability perspective Total assets Less liabilities and noncontrolling interests share of assets and liabilities Total current liabilities excluding notes and loans payable Total long-term liabilities excluding long-term debt Noncontrolling interests share of assets and liabilities Add ExxonMobil share of debt-financed equity company net assets Total capital employed Total corporate sources: debt and equity perspective Notes and loans payable Long-term debt ExxonMobil share of equity Less noncontrolling interests share of total debt Add ExxonMobil share of equity company debt Total capital employed 2021 2020 2019 (millions of dollars) 338,923 332,750 362,597 (52,367) (63,169) (8,746) 4,001 218,642 (35,905) (65,075) (8,773) 4,140 227,137 (43,411) (73,328) (8,839) 3,906 240,925 4,276 43,428 168,577 20,458 47,182 157,150 (1,640) 4,001 218,642 (1,793) 4,140 227,137 20,578 26,342 191,650 (1,551) 3,906 240,925 38 FREQUENTLY USED TERMS Return on Average Capital Employed Return on average capital employed (ROCE) is a performance measure ratio. From the perspective of the business segments, ROCE is annual business segment earnings divided by average business segment capital employed (average of beginning and end-of-year amounts). These segment earnings include ExxonMobil’s share of segment earnings of equity companies, consistent with our capital employed definition, and exclude the cost of financing. The Corporation’s total ROCE is net income attributable to ExxonMobil excluding the after-tax cost of financing, divided by total corporate average capital employed. The Corporation has consistently applied its ROCE definition for many years and views it as one of the best measures of historical capital productivity in our capital- intensive, long-term industry. Additional measures, which are more cash flow based, are used to make investment decisions. Return on Average Capital Employed Net income (loss) attributable to ExxonMobil Financing costs (after-tax) Gross third-party debt ExxonMobil share of equity companies All other financing costs – net Total financing costs Earnings (loss) excluding financing costs 2021 2020 2019 (millions of dollars) 23,040 (22,440) 14,340 (1,196) (1,272) (1,075) (170) (182) (207) 11 (1,355) 24,395 666 (788) (21,652) 141 (1,141) 15,481 Average capital employed 222,890 234,031 236,603 Return on average capital employed – corporate total 10.9% (9.3)% 6.5% Structural Cost Savings Structural cost savings describe decreases in the below expenses as a result of operational efficiencies, workforce reductions and other cost saving measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative annual structural cost savings totaled $4.9 billion, of which $1.9 billion was achieved in 2021. The total change between periods in expenses below will reflect both structural cost savings and other changes in spend, including market factors, such as energy costs, inflation, and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations. Structural cost savings are stewarded internally to support management’s oversight of spending over time. This measure is useful for investors to understand the Corporation’s efforts to optimize spending through disciplined expense management. Consolidated Statement of Income Line Items Targeted for Structural Cost Savings 2021 2020 2019 Production and manufacturing expenses Selling, general and administrative expenses Exploration expenses, including dry holes Total (millions of dollars) 36,035 9,574 1,054 46,663 30,431 10,168 1,285 41,884 36,826 11,398 1,269 49,493 39 FREQUENTLY USED TERMS Earnings (Loss) excluding Identified Items Earnings (loss) excluding Identified Items, are earnings (loss) excluding individually significant non-operational events with an absolute corporate total earnings impact of at least $250 million in a given quarter. The earnings (loss) impact of an Identified Item for an individual segment in a given quarter may be less than $250 million when the item impacts several segments or several periods. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The Corporation believes this view provides investors increased transparency into business results and trends, and provides investors with a view of the business as seen through the eyes of management. Earnings (loss) excluding Identified Items is not meant to be viewed in isolation or as a substitute for net income (loss) attributable to ExxonMobil as prepared in accordance with U.S. GAAP. Upstream U.S. Non-U.S. Total U.S. Non-U.S. Total U.S. Non-U.S. Total 2021 2020 2019 (millions of dollars) Earnings (loss) (U.S. GAAP) 3,663 12,112 15,775 (19,385) (645) (20,030) 536 13,906 14,442 Impairments (263) (489) (752) (17,092) (2,244) (19,336) — — — Gain/(loss) on sale of assets Inventory valuation - lower of cost or market Tax-related items Contractual provisions Identified Items — 459 459 — — — — 3,679 3,679 — — — — — — — (250) (250) — (61) (61) — — (297) (297) — — — — — — — 755 — 755 — (263) (280) (543) (17,092) (2,602) (19,694) — 4,434 4,434 Earnings (loss) excluding Identified Items 3,926 12,392 16,318 (2,293) 1,957 (336) 536 9,472 10,008 Downstream U.S. Non-U.S. Total U.S. Non-U.S. Total U.S. Non-U.S. Total 2021 2020 2019 (millions of dollars) Earnings (loss) (U.S. GAAP) 1,314 791 2,105 (852) (225) (1,077) 1,717 606 2,323 Impairments Gain/(loss) on sale of assets Tax-related items Identified Items — 4 — 4 — — — — — 4 — 4 (4) — — (4) (593) (597) — — (262) (262) (855) (859) — — — — — — (9) (9) — — (9) (9) Earnings (loss) excluding Identified Items 1,310 791 2,101 (848) 630 (218) 1,717 615 2,332 Chemical U.S. Non-U.S. Total U.S. Non-U.S. Total U.S. Non-U.S. Total 2021 2020 2019 Earnings (loss) (U.S. GAAP) Impairments Gain/(loss) on sale of assets Tax-related items Identified Items 4,502 3,294 7,796 — 630 — 630 — 494 — 494 — 136 — 136 (millions of dollars) 1,277 (90) — — (90) 686 1,963 (2) — (22) (24) (92) — (22) (114) Earnings (loss) excluding Identified Items 4,008 3,158 7,166 1,367 710 2,077 40 206 — — — — 206 386 — — 2 2 384 592 — — 2 2 590 FREQUENTLY USED TERMS Corporate and Financing Earnings (loss) (U.S. GAAP) Impairments Gain/(loss) on sale of assets Tax-related items Severance charges Identified Items 2021 2020 2019 (millions of dollars) (2,636) (3,296) (3,017) — (12) — (52) (64) (35) — — (326) (361) — (24) 332 — 308 Earnings (loss) excluding Identified Items (2,572) (2,935) (3,325) Corporate Total Net income (loss) attributable to ExxonMobil (U.S. GAAP) Impairments Gain/(loss) on sale of assets Inventory valuation - lower of cost or market Tax-related items Severance charges Contractual provisions Identified Items Earnings (loss) excluding Identified Items 2021 2020 2019 (millions of dollars) 23,040 (752) 1,081 — — (52) (250) 27 23,013 (22,440) (20,060) — (61) (581) (326) — (21,028) (1,412) 14,340 — 3,655 — 1,080 — — 4,735 9,605 References in Frequently Used Terms and Management's Discussion & Analysis to total corporate earnings (loss) mean net income (loss) attributable to ExxonMobil from the Consolidated Statement of Income. Unless otherwise indicated, references to earnings (loss), Upstream, Downstream, Chemical and Corporate and Financing earnings (loss), and earnings (loss) per share are ExxonMobil’s share after excluding amounts attributable to noncontrolling interests. 41 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FORWARD-LOOKING STATEMENTS Outlooks, projections, goals, targets, descriptions of strategic plans and objectives, and other statements of future events or conditions in this release are forward-looking statements. Similarly, emission-reduction roadmaps are dependent on future market factors, such as continued technological progress and policy support, and also represent forward-looking statements. Actual future results, including future energy demand and mix; financial and operating performance; realized price and margins; dividends and shareholder returns, including the timing and amounts of share repurchases; volume growth; project plans, timing, costs, and capacities; capital expenditures, including lower-emissions and environmental expenditures; cost reductions and structural cost savings; integration benefits; emission intensity and absolute emissions reductions; achievement of ambitions to reach Scope 1 and Scope 2 net-zero from operated assets by 2050, to reduce methane emissions and flaring, or to complete major asset emission reduction roadmaps; implementation and outcomes of carbon capture and storage projects and infrastructure, renewable fuel projects, blue hydrogen projects, and other technology efforts; the impact of new technologies on society and industry; capital expenditures and mix; investment returns; accounting and financial reporting effects resulting from market or regulatory developments and ExxonMobil’s responsive actions, including potential impairment charges; and the outcome of litigation and tax contingencies, could differ materially due to a number of factors. These include global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market or economic conditions that impact demand, prices and differentials; policy and consumer support for lower-emission products and technologies in different jurisdictions; the impact of company actions to protect the health and safety of employees, vendors, customers, and communities; actions of competitors and commercial counterparties; the ability to access short- and long-term debt markets on a timely and affordable basis; the severity, length and ultimate impact of COVID-19 variants and government responses on people and economies; reservoir performance; the outcome of exploration projects and timely completion of development and construction projects; regulatory actions targeting public companies in the oil and gas industry; changes in local, national, or international law, taxes, regulation or policies affecting our business, including environmental regulations and timely granting of governmental permits; war, trade agreements and patterns, shipping blockades or harassment, and other political or security disturbances; the pace of regional and global economic recovery from the pandemic and the occurrence and severity of future outbreaks; opportunities for and regulatory approval of potential investments or divestments; the actions of competitors; the capture of efficiencies within and between business lines and the ability to maintain near-term cost reductions as ongoing efficiencies while maintaining future competitive positioning; unforeseen technical or operating difficulties; the development and competitiveness of alternative energy and emission reduction technologies; the results of research programs; the ability to bring new technologies to commercial scale on a cost-competitive basis; general economic conditions including the occurrence and duration of economic recessions; and other factors discussed under Item 1A. Risk Factors. Energy demand models are forward-looking by nature and aim to replicate system dynamics of the global energy system, requiring simplifications. The reference to any scenario in this report, including any potential net-zero scenarios, does not imply ExxonMobil views any particular scenario as likely to occur. In addition, energy demand scenarios require assumptions on a variety of parameters. As such, the outcome of any given scenario using an energy demand model comes with a high degree of uncertainty. For example, the IEA describes its NZE scenario as extremely challenging, requiring unprecedented innovation, unprecedented international cooperation and sustained support and participation from consumers. Third-party scenarios discussed in this report reflect the modeling assumptions and outputs of their respective authors, not ExxonMobil, and their use by ExxonMobil is not an endorsement by ExxonMobil of their underlying assumptions, likelihood or probability. Investment decisions are made on the basis of ExxonMobil’s separate planning process, but may be secondarily tested for robustness or resiliency against different assumptions, including against various scenarios. Any use of the modeling of a third-party organization within this report does not constitute or imply an endorsement by ExxonMobil of any or all of the positions or activities of such organization. OVERVIEW The following discussion and analysis of ExxonMobil’s financial results, as well as the accompanying financial statements and related notes to consolidated financial statements to which they refer, are the responsibility of the management of Exxon Mobil Corporation. The Corporation’s accounting and financial reporting fairly reflect its integrated business model involving exploration for, and production of, crude oil and natural gas, manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen, and biofuels. ExxonMobil's operating segments are Upstream, Downstream, and Chemical. Where applicable ExxonMobil voluntarily discloses additional U.S., Non-U.S. and regional splits to help investors better understand the company's operations. In January 2022, the Corporation announced that effective April 2022 it is streamlining its business structure by combining the Chemical and Downstream businesses. The company will be organized along three businesses – Upstream, Product Solutions, and Low Carbon Solutions, aligning along market-focused value chains. Product Solutions will consist of Energy Products, Specialty Products and Chemical Products. Low Carbon Solutions will continue to be included in Corporate and Financing. The businesses will be supported by a combined technology organization, and other centralized service-delivery groups, building on the establishment of a worldwide major projects organization in 2019. 42 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ExxonMobil, with its resource base, financial strength, disciplined investment approach and technology portfolio, is well-positioned to participate in substantial investments to develop new energy supplies. The company’s integrated business model, with significant investments in Upstream, Downstream and Chemical segments and Low Carbon Solutions business, generally reduces the Corporation’s risk from changes in commodity prices. While commodity prices depend on supply and demand and may be volatile on a short-term basis, ExxonMobil’s investment decisions are grounded on fundamentals reflected in our long-term business outlook, and use a disciplined approach in selecting and pursuing the most attractive investment opportunities. The corporate plan is a fundamental annual management process that is the basis for setting operating and capital objectives in addition to providing the economic assumptions used for investment evaluation purposes. The foundation for the assumptions supporting the corporate plan is the Energy Outlook and corporate plan volume projections are based on individual field production profiles, which are also updated at least annually. Price ranges for crude oil, natural gas, including price differentials, refinery and chemical margins, volumes, development and operating costs, including greenhouse gas emission prices, and foreign currency exchange rates are based on corporate plan assumptions developed annually by major region and are utilized for investment evaluation purposes. Major investment opportunities are evaluated over a range of potential market conditions. Once major investments are made, a reappraisal process is completed to ensure relevant lessons are learned and improvements are incorporated into future projects. BUSINESS ENVIRONMENT Long-Term Business Outlook ExxonMobil’s business planning is underpinned by a deep understanding of long-term energy fundamentals. These fundamentals include energy supply and demand trends, the scale and variety of energy needs worldwide; capability, practicality and affordability of energy alternatives including low-carbon solutions; greenhouse gas emission-reduction technologies; and supportive government policies. The company’s Energy Outlook (Outlook) considers these fundamentals to form the basis for the company’s long-term business planning, investment decisions, and research programs. The Outlook reflects the company’s view of global energy demand and supply through 2050. It is a projection based on current trends in technology, government policies, consumer preferences, geopolitics, and economic development. In addition, ExxonMobil considers a range of scenarios - including remote scenarios - to help inform perspective of the future and enhance strategic thinking over time. Included in the range of these scenarios are the Intergovernmental Panel on Climate Change Lower 2°C and the International Energy Agency's Net Zero Emissions (IEA NZE) by 2050 scenario. To effectively evaluate the pace of change, ExxonMobil uses many scenarios to help identify signposts that provide leading indicators of future developments and allow for timely adjustments to the Outlook. The IEA describes the IEA NZE as extremely challenging, requiring all stakeholders – governments, businesses, investors and citizens – to take action this year and every year after so that the goal does not slip out of reach. The scenario assumes unprecedented and sustained energy efficiency gains, innovation and technology transfer, lower-emission investments, and globally coordinated greenhouse gas reduction policy. The IEA acknowledges that society is not on the IEA NZE pathway. By 2050, the world’s population is projected at around 9.7 billion people, or about 2 billion more than in 2019. Coincident with this population increase, the Corporation expects worldwide economic growth to average close to 2.5 percent per year, with economic output growing by around 125 percent by 2050 compared to 2019. As economies and populations grow, and as living standards improve for billions of people, the need for energy is expected to continue to rise. Even with significant efficiency gains, global energy demand is projected to rise by almost 15 percent from 2019 to 2050. This increase in energy demand is expected to be driven by developing countries (i.e., those that are not member nations of the Organisation for Economic Co-operation and Development (OECD)). As expanding prosperity drives global energy demand higher, increasing use of energy-efficient technologies and practices as well as lower-emission products will continue to help significantly reduce energy consumption and emissions per unit of economic output over time. Substantial efficiency gains are likely in all key aspects of the world’s economy through 2050, affecting energy requirements for power generation, transportation, industrial applications, and residential and commercial needs. Under our Outlook, global electricity demand is expected to increase almost 75 percent from 2019 to 2050, with developing countries likely to account for about 80 percent of the increase. Consistent with this projection, power generation is expected to remain the largest and fastest growing major segment of global primary energy demand, supported by a wide variety of energy sources. The share of coal-fired generation is expected to decline substantially and approach 15 percent of the world’s electricity in 2050, versus nearly 35 percent in 2019, in part as a result of policies to improve air quality as well as reduce greenhouse gas emissions to address risks related to climate change. From 2019 to 2050, the amount of electricity supplied using natural gas, nuclear power, and renewables is expected to more than double, accounting for the entire growth in electricity supplies and offsetting the reduction of coal. Electricity from wind and solar is expected to increase more than 600 percent, helping total renewables (including other sources, e.g. hydropower) to account for about 80 percent of the increase in electricity supplies worldwide through 2050. Total renewables are expected to reach about 50 percent of global electricity supplies by 2050. Natural gas and nuclear are also expected to increase shares over the period to 2050, reaching more than 25 percent and about 10 percent of global electricity supplies, respectively, by 2050. Supplies of electricity by energy type will reflect significant differences across regions reflecting a wide range of factors including the cost and availability of various energy supplies and policy developments. 43 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Under our Outlook, energy for transportation - including cars, trucks, ships, trains and airplanes - is expected to increase by almost 25 percent from 2019 to 2050. Transportation energy demand is expected to account for over 40 percent of the growth in liquid fuels demand worldwide over this period. Light-duty vehicle demand for liquid fuels is projected to peak by around 2025 and then decline to levels seen in the early-2000s by 2050 as the impact of better fuel economy and significant growth in electric cars, led by China, Europe, and the United States, work to offset growth in the worldwide car fleet of about 75 percent. By 2050, light-duty vehicles are expected to account for around 15 percent of global liquid fuels demand. During the same time period, nearly all the world’s commercial transportation fleets are expected to continue to run on liquid fuels, including biofuels, which are widely available and offer practical advantages in providing a large quantity of energy in small volumes. Liquid fuels provide the largest share of global energy supplies today reflecting broad-based availability, affordability, ease of transportation, and fitness as a practical solution to meet a wide variety of needs. By 2050, global demand for liquid fuels is projected to grow to approximately 114 million barrels of oil equivalent per day, an increase of about 14 percent from 2019. The non-OECD share of global liquid fuels demand is expected to increase to nearly 70 percent by 2050, as liquid fuels demand in the OECD is expected to decline by more than 20 percent. Much of the global liquid fuels demand today is met by crude production from traditional conventional sources; these supplies will remain important, and significant development activity is expected to offset much of the natural declines from these fields. At the same time, a variety of emerging supply sources - including tight oil, deepwater, oil sands, natural gas liquids and biofuels - are expected to grow to help meet rising demand. The world’s resource base is sufficient to meet projected demand through 2050 as technology advances continue to expand the availability of economic and lower-carbon supply options. However, timely investments will remain critical to meeting global needs with reliable and affordable supplies. Natural gas is a lower-emission, versatile and practical fuel for a wide variety of applications, and it is expected to grow the most of any primary energy type from 2019 to 2050, meeting about 55 percent of global energy demand growth. Global natural gas demand is expected to rise nearly 35 percent from 2019 to 2050, with more than half of that increase coming from the Asia Pacific region. Significant growth in supplies of unconventional gas - the natural gas found in shale and other tight rock formations - will help meet these needs. In total, about 50 percent of the growth in natural gas supplies is expected to be from unconventional sources. At the same time, conventionally-produced natural gas is likely to remain the cornerstone of global supply, meeting more than two-thirds of worldwide demand in 2050. Liquefied natural gas (LNG) trade will expand significantly, meeting about 40 percent of the increase in global demand growth, with much of this supply expected to help meet rising demand in Asia Pacific. The world’s energy mix is highly diverse and will remain so through 2050. Oil is expected to remain the largest source of energy with its share remaining close to 30 percent in 2050. Coal is currently the second largest source of energy, but it is expected to lose that position to natural gas in the next few years. The share of natural gas is expected to reach more than 25 percent by 2050, while the share of coal falls to about half that of natural gas. Nuclear power is projected to grow significantly, as many nations are likely to expand nuclear capacity to address rising electricity needs as well as energy security and environmental issues. Total renewable energy is expected to exceed 20 percent of global energy by 2050, with biomass, hydro and geothermal contributing a combined share of more than 10 percent. Total energy supplied from wind, solar and biofuels is expected to increase rapidly, growing over 420 percent from 2019 to 2050, when they are projected to be about 10 percent of the world energy mix. To meet this projected demand under our Outlook, the Corporation anticipates that the world’s available oil and gas resource base will grow not only from new discoveries, but also from increases in previously discovered fields. Technology will underpin these increases. The investments to develop and supply resources to meet global demand through 2050 will be significant. This reflects a fundamental aspect of the oil and natural gas business as the International Energy Agency (IEA) describes in its World Energy Outlook 2021. International accords and underlying regional and national regulations covering greenhouse gas emissions continue to evolve with uncertain timing and outcome, making it difficult to predict their business impact. For many years, the Corporation has taken into account policies established to reduce energy-related greenhouse gas emissions in its long-term Energy Outlook. The climate accord reached at the Conference of the Parties (COP 21) in Paris set many new goals, and many related policies are still emerging. Our Energy Outlook reflects an environment with increasingly stringent climate policies and is consistent with the global aggregation of Nationally Determined Contributions (NDCs), as available at the end of 2020, which were submitted by signatories to the United Nations Framework Convention on Climate Change (UNFCCC) 2015 Paris Agreement. Our Energy Outlook seeks to identify potential impacts of climate-related policies, which often target specific sectors. It estimates potential impacts of these policies on consumer energy demand by using various assumptions and tools - including, depending on the sector, and, as applicable, use of a proxy cost of carbon or assessment of targeted policies (e.g. automotive fuel economy standards). For purposes of the Energy Outlook, a proxy cost on energy-related CO2 emissions is assumed to reach about $100 per metric ton in 2050 in OECD nations. China and other leading non-OECD nations are expected to trail OECD policy initiatives. Nevertheless, as people and nations look for ways to reduce risks of global climate change, they will continue to need practical solutions that do not jeopardize the affordability or reliability of the energy they need. The Corporation continues to monitor the updates to the NDCs that nations provided around COP 26 in Glasgow in November 2021 as well as other policy developments in light of net-zero ambitions recently formulated by some nations. 44 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The information provided in the Outlook includes ExxonMobil’s internal estimates and projections based upon internal data and analyses as well as publicly available information from external sources including the International Energy Agency. Leading the Drive to Net Zero The company plans to play a leading role in the energy transition by leveraging its core capabilities to meet society’s needs for products essential for modern life, while addressing the challenge of climate change. The Corporation announced its ambition to achieve net-zero emissions from its operated assets by 2050 (Scope 1 and 2 greenhouse gas emissions) and is taking a comprehensive approach centered on developing detailed emission-reduction roadmaps for major operated assets. The company’s roadmap approach identifies greenhouse gas emission-reduction opportunities and the investment and future policy needs required to achieve net-zero. The roadmaps are tailored to account for facility configuration and maintenance schedules, and they will be updated as technologies and policies evolve. Net-zero roadmaps for major assets, covering about 90% of the company’s greenhouse gas emissions, are scheduled to be completed by year-end 2022, and the remainder in 2023. Our strategy uses our advantages in scale, integration, technology and people to build globally competitive businesses that lead industry in earnings and cash flow growth across a broad range of scenarios. The company’s plans to reduce greenhouse gas emissions through 2030 compared to 2016 levels support its net-zero ambition. The plans are expected to result in a 20-30% reduction in corporate-wide greenhouse gas intensity, including reductions of 40-50% in upstream intensity, 70-80% in methane intensity and 60-70% in flaring intensity. These plans include actions that are expected to reduce absolute corporate-wide greenhouse gas emissions by approximately 20%, including an estimated 70% reduction in methane emissions, 60% reduction in flaring emissions and 30% reduction in upstream emissions. ExxonMobil established its Low Carbon Solutions business in early 2021, leveraging its unique combination of capabilities such as geophysics expertise and complex project management, to establish a new business in carbon capture and storage, hydrogen, and biofuels to accelerate emission reductions for customers and in its existing businesses. The Corporation plans to invest in initiatives to lower greenhouse gas emissions. A significant focus is on scaling up carbon capture and storage, hydrogen, and biofuels. Stronger policy further accelerates development and deployment of lower-emission technologies, and would provide ExxonMobil additional investment opportunities to reduce greenhouse gas emissions. The company's robust research and development process, continued evaluation of emerging technologies, and global collaborations will be key to identifying and growing lower-emission opportunities. During the start-up phase, the Low Carbon Solutions business will be reflected in Corporate and Financing. Recent Business Environment In early 2020, the balance of supply and demand for petroleum and petrochemical products experienced two significant disruptive effects. On the demand side, the COVID-19 pandemic spread rapidly through most areas of the world resulting in substantial reductions in consumer and business activity and significantly reduced demand for crude oil, natural gas, and petroleum products. This reduction in demand coincided with announcements of increased production in certain key oil-producing countries which led to increases in inventory levels and sharp declines in prices for crude oil, natural gas, and petroleum products. Demand for petroleum and petrochemical products has continued to recover through 2021, with the Corporation's financial results benefiting from stronger prices and margins, notably prices for crude oil and natural gas as well as Chemical product margins. The rate and pace of recovery, however, has varied across geographies and business lines, with Downstream margins only reaching the lower end of the 10-year range late in 2021 and jet demand continuing to lag. The Corporation continues to closely monitor industry and economic conditions amid this uneven global recovery from the COVID-19 pandemic which has brought unprecedented uncertainties to near-term economic outlooks. The general rate of inflation across major countries of operation experienced a brief decline in the initial stage of the COVID-19 pandemic. However inflation rates increased in 2021 across major economies, with some regions experiencing multi-decade highs, largely reflecting overall imbalances between supply and demand recoveries from the pandemic. The underlying factors include, but are not limited to, global supply chain disruptions, shipping bottlenecks, labor market constraints, and side effects from monetary and fiscal expansions. The global economic recovery remains uneven, with uncertainties remaining. Prices for services and materials continue to evolve in response to fast-changing commodity markets, industry activities, as well as government policies, impacting operating and capital costs. The Corporation closely monitors market trends and works to mitigate cost impacts in all price environments through its economies of scale in global procurement, efficient project management practices, and general productivity improvements. Organizational changes implemented over the past several years enabled the Corporation to realize nearly $5 billion of structural cost savings1 versus 2019, leveraging increased operational efficiencies and reduced overhead costs. Included in these savings is the completion of the workforce reduction programs, announced in late 2020 and early 2021, which are estimated to generate savings of approximately $2 billion per year compared to 2019 from lower employee and contractor costs. The company continues to take actions to streamline its business structure to improve effectiveness and reduce costs. The changes more fully leverage global functional capabilities, improve line of sight to markets, and enhance resource allocation to the highest corporate priorities. (1) Refer to Frequently Used Terms for definition of structural cost savings. 45 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS BUSINESS RESULTS Upstream ExxonMobil continues to sustain a diverse growth portfolio of exploration and development opportunities, which enables the Corporation to be selective, maximizing shareholder value and mitigating political and technical risks. ExxonMobil’s fundamental strategies guide our global Upstream business, including capturing material and accretive opportunities to continually high-grade the resource portfolio, selectively developing attractive oil and natural gas resources, developing and applying high-impact technologies, and pursuing productivity and efficiency gains as well as a reduction in greenhouse gas emissions. These strategies are underpinned by a relentless focus on operational excellence, development of our employees, and investment in the communities within which we operate. As future development projects and drilling activities bring new production online, the Corporation expects a shift in the geographic mix and in the type of opportunities from which volumes are produced. Based on current investment plans, the proportion of oil- equivalent production from the Americas is generally expected to increase over the next several years. About half of the Corporation's global production comes from unconventional, deepwater and LNG resources. This proportion is generally expected to grow over the next few years. The Upstream capital program continues to prioritize low cost-of-supply opportunities. In addition to continued development of Guyana, Brazil, and the Permian Basin, ExxonMobil has a strong pipeline of development projects. Most notable are our LNG developments in Mozambique, Papua New Guinea, and the Golden Pass LNG facility. The Corporation anticipates several projects will come online over the next few years providing additional production capacity. However, actual volumes will vary from year to year due to the timing of individual project start-ups; operational outages; reservoir performance; performance of enhanced oil recovery projects; regulatory changes; the impact of fiscal and commercial terms; asset sales; weather events; price effects on production sharing contracts; changes in the amount and timing of capital investments that may vary depending on the oil and gas price environment; international trade patterns and relations; and other factors described in Item 1A. Risk Factors. ExxonMobil believes prices over the long term will continue to be driven by market supply and demand, with the demand side largely being a function of general economic activities, alternative energy sources, levels of prosperity, technology advances, consumer preference and government policies. On the supply side, prices may be significantly impacted by political events, the actions of OPEC and other large government resource owners, and other factors. To manage the risks associated with price, ExxonMobil tests the resiliency of its annual plans and major investments across a range of price scenarios. Key Recent Events Significant progress was made on key new developments in Guyana, Brazil, the Permian Basin, and Mozambique during 2021. Guyana: Exploration success continued with additional discoveries increasing the estimated recoverable resource on the Stabroek block. The Liza Unity floating production, storage and offloading vessel arrived in Guyanese waters in late 2021 and started production in February 2022. In Payara, the third project, development drilling activities started in late 2021 and it remains on schedule for 2024 start-up. Yellowtail is the fourth and largest world-class development project and is expected to achieve first oil in 2025, following issuance of the production license. Permian: Production volumes averaged about 460 thousand oil-equivalent barrels per day (koebd) in 2021, nearly 100 koebd year-on- year production increase which exceeded expectations. The Corporation was successful in increasing drilling performance and continuing to improve capital efficiency. In December, ExxonMobil announced plans to achieve net-zero greenhouse gas emissions (Scope 1 and 2) by 2030 from our unconventional operations in the Permian Basin. Brazil: ExxonMobil announced its Final Investment Decision for the Bacalhau Phase 1 development in June 2021 with start-up planned for 2024. Mozambique: The Area 4 Coral South Floating LNG (FLNG) development continues as planned, targeting start-up in 2022, making Mozambique an LNG exporter. The Coral Sul FLNG vessel began tow to field in November 2021. 46 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Upstream Financial Results Earnings (loss) (U.S. GAAP) United States Non-U.S. Total Identified Items (1) United States Non-U.S. Total Earnings (loss) excluding Identified Items (1) United States Non-U.S. Total 2021 Upstream Earnings Factor Analysis (millions of dollars) 2021 2020 2019 (millions of dollars) 3,663 (19,385) 536 12,112 (645) 13,906 15,775 (20,030) 14,442 (263) (17,092) (280) (2,602) (543) (19,694) — 4,434 4,434 3,926 (2,293) 536 12,392 16,318 9,472 1,957 (336) 10,008 +19,150 15,775 +14,960 +2,040 -340 (20,030) 2020 Earnings Price Volume Other Identified Items (1) 2021 Earnings Price – Higher realizations increased earnings by $14,960 million. Volume – Unfavorable volume and mix effects decreased earnings by $340 million. Other – All other items increased earnings by $2,040 million, primarily driven by lower expenses of $1,360 million and one-time favorable tax items. Identified Items (1) – 2020 $(19,694) million loss primarily impairments of dry gas assets; 2021 $(543) million loss as a result of impairments of $(752) million and contractual provisions of $(250) million, partly offset by a $459 million gain from the U.K. Central and Northern North Sea divestment. (1) Refer to Frequently Used Terms for definition of Identified Items and earnings (loss) excluding Identified Items. 47 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2020 Upstream Earnings Factor Analysis (millions of dollars) 14,442 +1,170 -11,210 -300 -24,130 (20,030) 2019 Earnings Price Volume Other Identified Items (1) 2020 Earnings Price – Lower realizations reduced earnings by $11,210 million. Volume – Unfavorable volume and mix effects decreased earnings by $300 million. Other – All other items increased earnings by $1,170 million, primarily driven by lower expenses of $960 million. Identified Items (1) – 2019 $4,434 million gain primarily the $3,700 million gain from the Norway non-operated divestment; 2020 $(19,694) million loss primarily impairments of dry gas assets. (1) Refer to Frequently Used Terms for definition of Identified Items and earnings (loss) excluding Identified Items. Upstream Operational Results Production of crude oil, natural gas liquids, bitumen and synthetic oil Net production United States Canada/Other Americas Europe Africa Asia Australia/Oceania Worldwide Natural gas production available for sale Net production United States Canada/Other Americas Europe Africa Asia Australia/Oceania Worldwide Oil-equivalent production (2) 2021 2020 2019 (thousands of barrels daily) 721 560 22 248 695 43 2,289 685 536 30 312 742 44 2,349 (millions of cubic feet daily) 2,746 195 808 43 3,465 1,280 8,537 2,691 277 789 9 3,486 1,219 8,471 646 467 108 372 748 45 2,386 2,778 258 1,457 7 3,575 1,319 9,394 (thousands of oil-equivalent barrels daily) 3,712 3,761 3,952 (2) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. 48 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2021 Liquids production – 2.3 million barrels per day decreased 60 thousand barrels per day reflecting higher demand and growth, more than offset by entitlements, decline, and divestments. Natural gas production available for sale – 8.5 billion cubic feet per day increased 66 million cubic feet per day from 2020, reflecting higher demand, partly offset by divestments and Groningen production limit. 2020 Liquids production – 2.3 million barrels per day decreased 37 thousand barrels per day reflecting the impacts of government mandates, divestments, and lower demand, partly offset by growth and lower downtime. Natural gas production available for sale – 8.5 billion cubic feet per day decreased 923 million cubic feet per day from 2019, reflecting divestments, lower demand, and higher downtime, partly offset by growth. Upstream Additional Information Volumes Reconciliation (Oil-equivalent production) (1) Prior Year Entitlements - Net Interest Entitlements - Price / Spend / Other Government Mandates Divestments Demand / Growth / Other Current Year 2021 2020 (thousands of barrels daily) 3,761 (1) (97) 8 (24) 65 3,712 3,952 (9) 67 (110) (151) 12 3,761 (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. Listed below are descriptions of ExxonMobil’s volumes reconciliation factors which are provided to facilitate understanding of the terms. Entitlements - Net Interest are changes to ExxonMobil’s share of production volumes caused by non-operational changes to volume- determining factors. These factors consist of net interest changes specified in Production Sharing Contracts (PSCs) which typically occur when cumulative investment returns or production volumes achieve defined thresholds, changes in equity upon achieving pay- out in partner investment carry situations, equity redeterminations as specified in venture agreements, or as a result of the termination or expiry of a concession. Once a net interest change has occurred, it typically will not be reversed by subsequent events, such as lower crude oil prices. Entitlements - Price, Spend and Other are changes to ExxonMobil’s share of production volumes resulting from temporary changes to non-operational volume-determining factors. These factors include changes in oil and gas prices or spending levels from one period to another. According to the terms of contractual arrangements or government royalty regimes, price or spending variability can increase or decrease royalty burdens and/or volumes attributable to ExxonMobil. For example, at higher prices, fewer barrels are required for ExxonMobil to recover its costs. These effects generally vary from period to period with field spending patterns or market prices for oil and natural gas. Such factors can also include other temporary changes in net interest as dictated by specific provisions in production agreements. Government Mandates are changes to ExxonMobil's sustainable production levels due to temporary non-operational production limits imposed by governments, generally upon a sector, type or method of production. Divestments are reductions in ExxonMobil’s production arising from commercial arrangements to fully or partially reduce equity in a field or asset in exchange for financial or other economic consideration. Demand, Growth and Other factors comprise all other operational and non-operational factors not covered by the above definitions that may affect volumes attributable to ExxonMobil. Such factors include, but are not limited to, production enhancements from project and work program activities, acquisitions including additions from asset exchanges, downtime, market demand, natural field decline, and any fiscal or commercial terms that do not affect entitlements. 49 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Downstream ExxonMobil’s Downstream continues to be one of the largest, most integrated businesses among international oil companies (IOC), with significant positions across the full value chain including logistics, trading, refining, and marketing. The Corporation has a well- established presence in the Americas, Europe, and Asia Pacific. Downstream strategies competitively position the business across a range of market conditions. These strategies focus on providing high-value and lower-emission products that customers need to power global mobility; leveraging strong operations performance; capitalizing on integration across all ExxonMobil businesses; maximizing value from advantaged technology and a robust pipeline of lower-emission opportunities; and improving portfolio competitiveness and resilience with advantaged investments and divestments. With its large manufacturing footprint, ExxonMobil’s Downstream earnings are closely tied to industry refining margins. Refining margins improved steadily throughout 2021, recovering from historic lows in 2020 driven by COVID-19 pandemic demand impacts. By the end of 2021, refining margins had recovered to the bottom of the 10-year historical band from 2010 to 2019. Demand for gasoline and diesel had essentially recovered to normal levels by the end of 2021, while jet fuel demand remained below historical levels reflecting continued COVID-19 restrictions. Refining margins are anticipated to further improve in the near term as the recovery in international travel increases demand for jet fuel, and strong chemical demand persists for products essential to modern life. With improving market conditions, we restarted projects in Beaumont, Texas and Singapore to further strengthen the portfolio by increasing production of high-value fuels and lubricants. Refining margins are largely driven by differences in commodity prices and are a function of the difference between what a refinery pays for its raw materials and the market prices for the range of products produced. Crude oil and many products are widely traded with published prices, including those quoted on multiple exchanges around the world (e.g. New York Mercantile Exchange and Intercontinental Exchange). Prices for these commodities are determined by the global marketplace and are influenced by many factors, including global and regional supply/demand balances, inventory levels, industry refinery operations, import/export balances, currency fluctuations, seasonal demand, weather, and political climate. ExxonMobil’s outlook is that industry refining margins will remain volatile subject to shifting consumer demand as well as capacity changes from refinery additions and closures. ExxonMobil’s significant integration both within the Downstream value chains including lubricants, logistics, trading, refining, and marketing, as well as with Upstream and Chemical, improves our ability to generate shareholder value in a variety of market conditions. ExxonMobil continues to grow fuels product sales in new markets near major production assets with continued progress in the Mexico and Indonesia markets. Similarly, the lubricants business continues to grow, especially in Asia Pacific and the industrial sector, leveraging world class brands and integration with basestocks refining capability. Through the Mobil brands, such as Mobil 1, ExxonMobil is the worldwide leader in synthetic motor oils. The Downstream business is characterized by periods of margin volatility resulting from short-term and long-term supply and demand fluctuations. Proposed carbon policy and other climate-related regulations in many countries have the potential to increase industry volatility, both favorably and unfavorably. ExxonMobil continually evaluates the Downstream portfolio during all phases of the business cycle, which has resulted in numerous asset divestments and terminal conversions over the past decade to strengthen overall profitability and resiliency. When investing in the Downstream, ExxonMobil remains focused on projects resilient across a broad range of market conditions to support capturing value when opportunities emerge. Key Recent Events Lower-emission fuels: ExxonMobil announced plans for more than 40 thousand barrels per day of lower-emission fuels by 2025, including a new renewable diesel unit at the Strathcona refinery, and purchase agreements with Global Clean Energy in the U.S. and Biojet AS in Norway. Terminal conversions: ExxonMobil converted the Slagen, Norway and Altona, Australia refineries into product import terminals capable of serving existing markets. Additionally, Refining New Zealand announced conversion of its refinery (in which ExxonMobil owns a 17% minority share) to a product import terminal in 2022. 50 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Downstream Financial Results Earnings (loss) (U.S. GAAP) United States Non-U.S. Total Identified Items (1) United States Non-U.S. Total Earnings (loss) excluding Identified Items (1) United States Non-U.S. Total 2021 Downstream Earnings Factor Analysis (millions of dollars) 2021 2020 2019 (millions of dollars) 1,314 791 2,105 (852) 1,717 (225) 606 (1,077) 2,323 4 — 4 1,310 791 2,101 (4) (855) (859) — (9) (9) (848) 630 (218) 1,717 615 2,332 +1,920 +100 +300 +860 2,105 (1,077) 2020 Earnings Margins Volume Other Identified Items (1) 2021 Earnings Margins – Increased earnings by $1,920 million as industry refining conditions improved. Volume – Increased earnings by $100 million reflecting demand recovery and favorable mix. Other – Increased earnings by $300 million due to lower expenses of $560 million, partly offset by unfavorable foreign exchange and LIFO impacts. Identified Items (1) – 2020 $(859) million loss primarily as a result of impairments and unfavorable tax items. (1) Refer to Frequently Used Terms for definition of Identified Items and earnings (loss) excluding Identified Items. 51 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2020 Downstream Earnings Factor Analysis (millions of dollars) 2,323 2019 Earnings +900 +370 -3,820 Margins Volume Other -850 (1,077) Identified Items (1) 2020 Earnings Margins – Decreased earnings by $3,820 million including the impact of weaker industry refining conditions. Volume – Increased earnings by $370 million as manufacturing/yield improvement impacts were partly offset by weaker demand. Other – Increased earnings by $900 million due to lower expenses of $1,290 million, partly offset by unfavorable LIFO inventory impacts of $410 million. Identified Items (1) – 2020 $(859) million loss primarily as a result of impairments and unfavorable tax items. (1) Refer to Frequently Used Terms for definition of Identified Items and earnings (loss) excluding Identified Items. Downstream Operational Results Refinery throughput United States Canada Europe Asia Pacific Other Worldwide Petroleum product sales (2) United States Canada Europe Asia Pacific Other Worldwide Gasoline, naphthas Heating oils, kerosene, diesel oils Aviation fuels Heavy fuels Specialty petroleum products Worldwide (2) Data reported net of purchases/sales contracts with the same counterparty. 52 2021 2020 2019 (thousands of barrels daily) 1,623 379 1,210 571 162 3,945 2,257 448 1,340 653 464 5,162 2,158 1,749 220 269 766 5,162 1,549 340 1,173 553 158 3,773 2,154 418 1,253 651 419 4,895 1,994 1,751 213 249 688 4,895 1,532 353 1,317 598 181 3,981 2,292 476 1,479 738 467 5,452 2,220 1,867 406 270 689 5,452 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Chemical ExxonMobil is a leading global manufacturer and marketer of petrochemicals that support modern living. ExxonMobil helps meet society’s evolving needs by providing a wide range of innovative, valuable product solutions in an efficient and responsible manner. This is enabled by ExxonMobil’s proprietary technology combined with industry-leading scale and integration. These competitive advantages are underpinned by operational excellence, advantaged investments, and cost discipline. In 2021, while many markets continued to be negatively impacted by COVID-19, demand for chemical products remained resilient in several key segments including food packaging, hygiene and medical. Overall chemical industry margins improved compared to 2020 due to continued strong packaging demand and industry supply disruptions. We were uniquely positioned to capture value from the market in 2021 due to our integration, enabling nimble feed and product optimization, and our advantaged global supply and logistics. These, along with our outstanding reliability performance and continued structural cost savings, delivered record annual earnings. Worldwide demand for chemicals is expected to grow faster than the economy as a whole, driven by global population growth, an expanding middle class, and improving living standards. ExxonMobil’s integration with refining, together with our high-value performance products and unique project execution capability, enhances our ability to generate returns on investments across a range of market environments. In 2021, ExxonMobil completed construction of our joint venture ethane cracker and associated derivative units near Corpus Christi, Texas. The project started up in late 2021 below budget and ahead of schedule. With improving market conditions, we also restarted other U.S. Gulf Coast growth projects, including projects in Baytown, Texas and Baton Rouge, Louisiana that will support the growing demand for high-value chemicals products. Key Recent Events China investment: ExxonMobil reached final investment decision to proceed with a multi-billion dollar chemical complex in the Dayawan Petrochemical Industrial Park in Huizhou, Guangdong Province in China. The facility will help meet expected demand growth for performance chemical products in China. Advanced recycling: The Corporation is progressing construction of one of North America’s largest plastic waste advanced recycling facilities in Baytown, Texas, which is expected to start operations in 2022. In addition, plans are underway for up to 500,000 metric tons annually of advanced recycling capacity to be added across multiple sites by 2026. These investments enabled commercial volumes of certified circular polymers to be made available to the market in 2021. Materia acquisition: ExxonMobil acquired Materia, Inc., a technology company that has pioneered the development of a Nobel prize- winning technology for manufacturing a new class of materials. The innovative materials can be used in a number of applications, including wind turbine blades, electric vehicle parts, sustainable construction, and anticorrosive coatings. Santoprene divestment: ExxonMobil Chemical Company sold its global Santoprene business to Celanese. The sale included two manufacturing sites, one in the United States and one in the United Kingdom. Chemical Financial Results Earnings (loss) (U.S. GAAP) United States Non-U.S. Total Identified Items (1) United States Non-U.S. Total Earnings (loss) excluding Identified Items (1) United States Non-U.S. Total 2021 2020 2019 (millions of dollars) 4,502 3,294 7,796 494 136 630 4,008 3,158 7,166 1,277 686 1,963 (90) (24) (114) 1,367 710 2,077 206 386 592 — 2 2 206 384 590 (1) Refer to Frequently Used Terms for definition of Identified Items and earnings (loss) excluding Identified Items. 53 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS 2021 Chemical Earnings Factor Analysis (millions of dollars) +4,480 +250 +360 +740 7,796 1,963 2020 Earnings Margins Volume Other Identified Items (1) 2021 Earnings Margins – Stronger margins increased earnings by $4,480 million driven by resilient demand and industry supply constraints. Volume – Higher volumes increased earnings by $250 million on record production supported by exceptional reliability. Other – All other items increased earnings by $360 million primarily as a result of favorable foreign exchange, lower expenses, and favorable LIFO impacts. Identified Items (1) – 2020 $(114) million loss primarily as a result of impairments; 2021 $630 million gain as a result of the Santoprene divestment. 2020 Chemical Earnings Factor Analysis (millions of dollars) +930 -150 +710 1,963 -120 Margins Volume Other Identified Items (1) 2020 Earnings 592 2019 Earnings Margins – Stronger margins increased earnings by $930 million. Volume – Lower volumes decreased earnings by $150 million. Other – All other items increased earnings by $710 million primarily as a result of lower expenses. Identified Items (1) – 2020 $(114) million loss primarily as a result of impairments. (1) Refer to Frequently Used Terms for definition of Identified Items and earnings (loss) excluding Identified Items. Chemical Operational Results Chemical prime product sales (2) United States Non-U.S. Worldwide (2) Data reported net of purchases/sales contracts with the same counterparty. 54 2021 2020 2019 (thousands of metric tons) 9,724 16,608 26,332 9,010 16,439 25,449 9,127 17,389 26,516 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Corporate and Financing Corporate and Financing is comprised of corporate activities that support the Corporation’s operating segments and ExxonMobil’s Low Carbon Solutions business. Corporate activities include general administrative support functions, financing and insurance activities. Low Carbon Solutions activities are included in Corporate and Financing as the business continues to mature through commercialization and deployment of technology. Corporate and Financing Financial Results Earnings (loss) (U.S. GAAP) Identified Items (1) Earnings (loss) excluding Identified Items (1) 2021 2020 2019 (millions of dollars) (2,636) (3,296) (3,017) (64) (2,572) (361) (2,935) 308 (3,325) (1) Refer to Frequently Used Terms for definition of Identified Items and earnings (loss) excluding Identified Items. 2021 Corporate and Financing expenses were $2,636 million in 2021 compared to $3,296 million in 2020, with the decrease mainly due to the absence of prior year severance costs and lower financing costs. 2020 Corporate and Financing expenses were $3,296 million in 2020 compared to $3,017 million in 2019, with the increase mainly due to higher financing costs and employee severance costs, partly offset by lower corporate costs. 55 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS LIQUIDITY AND CAPITAL RESOURCES Sources and Uses of Cash Net cash provided by/(used in) Operating activities Investing activities Financing activities Effect of exchange rate changes Increase/(decrease) in cash and cash equivalents Total cash and cash equivalents 2021 2020 2019 (millions of dollars) 48,129 14,668 29,716 (10,235) (18,459) (23,084) (35,423) 5,285 (6,618) (33) (219) 2,438 1,275 33 47 (December 31) 6,802 4,364 3,089 Total cash and cash equivalents were $6.8 billion at the end of 2021, up $2.4 billion from the prior year. The major sources of funds in 2021 were net income including noncontrolling interests of $23.6 billion, the adjustment for the noncash provision of $20.6 billion for depreciation and depletion, contributions from operational working capital of $4.2 billion, proceeds from asset sales of $3.2 billion, and other investing activities of $1.5 billion. The major uses of funds included a debt reduction of $19.7 billion, spending for additions to property, plant and equipment of $12.1 billion, dividends to shareholders of $14.9 billion, and additional investments and advances of $2.8 billion. Total cash and cash equivalents were $4.4 billion at the end of 2020, up $1.3 billion from the prior year. The major sources of funds in 2020 were the adjustment for the noncash provision of $46.0 billion, a net debt increase of $20.1 billion, proceeds from asset sales of $1.0 billion, and other investing activities of $2.7 billion. The major uses of funds included a net loss including noncontrolling interests of $23.3 billion, spending for additions to property, plant and equipment of $17.3 billion, dividends to shareholders of $14.9 billion, and additional investments and advances of $4.9 billion. The Corporation has access to significant capacity of long-term and short-term liquidity. In addition to cash balances, commercial paper continues to provide short-term liquidity, and is reflected in “Notes and loans payable” on the Consolidated Balance Sheet with changes in outstanding commercial paper between periods included in the Consolidated Statement of Cash Flows. The Corporation took steps to strengthen its balance sheet in 2021, reducing debt by nearly $20 billion and ending the year with $47.7 billion in total debt. On December 31, 2021, the Corporation had undrawn short-term committed lines of credit of $10.7 billion and undrawn long- term lines of credit of $0.6 billion. To support cash flows in future periods, the Corporation will need to continually find or acquire and develop new fields, and continue to develop and apply new technologies and recovery processes to existing fields, in order to maintain or increase production. After a period of production at plateau rates, it is the nature of oil and gas fields to eventually produce at declining rates for the remainder of their economic life. Decline rates can vary widely by individual field due to a number of factors, including, but not limited to, the type of reservoir, fluid properties, recovery mechanisms, work activity, and age of the field. In particular, the Corporation’s key tight-oil plays have higher initial decline rates which tend to moderate over time. Furthermore, the Corporation’s net interest in production for individual fields can vary with price and the impact of fiscal and commercial terms. The Corporation has long been successful at mitigating the effects of natural field decline through disciplined investments in quality opportunities and project execution. The Corporation anticipates several projects will come online over the next few years providing additional production capacity. However, actual volumes will vary from year to year due to the timing of individual project start-ups; operational outages; reservoir performance; performance of enhanced oil recovery projects; regulatory changes; the impact of fiscal and commercial terms; asset sales; weather events; price effects on production sharing contracts; and changes in the amount and timing of investments that may vary depending on the oil and gas price environment. The Corporation’s cash flows are also highly dependent on crude oil and natural gas prices. Please refer to Item 1A. Risk Factors for a more complete discussion of risks. The Corporation’s financial strength enables it to make large, long-term capital expenditures. Capital and exploration expenditures in 2021 were $16.6 billion, reflecting the Corporation’s continued active investment program. The Corporation plans to invest in the range of $21 billion to $24 billion in 2022. 56 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Actual spending could vary depending on the progress of individual projects and property acquisitions. The Corporation has a large and diverse portfolio of development projects and exploration opportunities, which helps mitigate the overall political and technical risks of the Corporation’s Upstream segment and associated cash flow. Further, due to its financial strength and diverse portfolio of opportunities, the risk associated with failure or delay of any single project would not have a significant impact on the Corporation’s liquidity or ability to generate sufficient cash flows for operations and its fixed commitments. The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses. In light of commodity price volatility, and depending on the pace of demand recovery, the Corporation's planned divestment program could be adversely affected by fewer financially suitable buyers. This could result in a slowing of the pace of divestments, certain assets being sold at a price below current book value, or impairment charges if the likelihood of divesting certain assets increases. Additionally, the Corporation continues to evaluate opportunities to enhance its business portfolio through acquisitions of assets or companies, and enters into such transactions from time to time. Key criteria for evaluating acquisitions include potential for future growth and attractive current valuations. Acquisitions may be made with cash, shares of the Corporation’s common stock, or both. ExxonMobil closely monitors the potential impact of Interbank Offered Rate (IBOR) reform, including LIBOR, under a number of scenarios and has taken steps to mitigate the potential impact. Accordingly, ExxonMobil does not believe this event represents a material risk to the Corporation’s consolidated results of operations or financial condition. Cash Flow from Operating Activities 2021 Cash provided by operating activities totaled $48.1 billion in 2021, $33.5 billion higher than 2020. The major source of funds was net income including noncontrolling interests of $23.6 billion, an increase of $46.8 billion. The noncash provision for depreciation and depletion was $20.6 billion, down $25.4 billion from the prior year. The adjustment for the net gain on asset sales was $1.2 billion, an increase of $1.2 billion. The adjustment for dividends received less than equity in current earnings of equity companies was a reduction of $0.7 billion, compared to an increase of $1.0 billion in 2020. Changes in operational working capital, excluding cash and debt, increased cash in 2021 by $4.2 billion. 2020 Cash provided by operating activities totaled $14.7 billion in 2020, $15.0 billion lower than 2019. Net income (loss) including noncontrolling interests was a loss of $23.3 billion, a decrease of $38.0 billion. The noncash provision for depreciation and depletion was $46.0 billion, up $27.0 billion from the prior year, mainly due to asset impairments. The noncash provision for deferred income tax benefits was $8.9 billion and also included impacts from asset impairments. The adjustment for the net loss on asset sales was $4 million, a decrease of $1.7 billion. The adjustment for dividends received less than equity in current earnings of equity companies was an increase of $1.0 billion, compared to a reduction of $0.9 billion in 2019. Changes in operational working capital, excluding cash and debt, decreased cash in 2020 by $1.7 billion. Cash Flow from Investing Activities 2021 Cash used in investing activities netted to $10.2 billion in 2021, $8.2 billion lower than 2020. Spending for property, plant and equipment of $12.1 billion decreased $5.2 billion from 2020. Proceeds from asset sales and returns of investments of $3.2 billion compared to $1.0 billion in 2020. Additional investments and advances were $2.0 billion lower in 2021, while proceeds from other investing activities including collection of advances decreased by $1.2 billion. 2020 Cash used in investing activities netted to $18.5 billion in 2020, $4.6 billion lower than 2019. Spending for property, plant and equipment of $17.3 billion decreased $7.1 billion from 2019. Proceeds from asset sales and returns of investments of $1.0 billion compared to $3.7 billion in 2019. Additional investments and advances were $1.0 billion higher in 2020, while proceeds from other investing activities including collection of advances increased by $1.2 billion. 57 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Cash Flow from Financing Activities 2021 Cash used in financing activities was $35.4 billion in 2021, $40.7 billion higher than 2020. Dividend payments on common shares increased to $3.49 per share from $3.48 per share and totaled $14.9 billion. During 2021, the Corporation utilized cash to reduce debt by $19.7 billion. ExxonMobil share of equity increased $11.4 billion to $168.6 billion. The addition to equity for earnings was $23.0 billion. This was offset by reductions for distributions to ExxonMobil shareholders of $14.9 billion, all in the form of dividends. Foreign exchange translation effects of $0.9 billion for the stronger U.S. dollar reduced equity and a $3.8 billion change in the funded status of the postretirement benefits reserves increased equity. During 2021, Exxon Mobil Corporation suspended its share repurchase program used to offset shares or units settled in shares issued in conjunction with the company’s benefit plans and programs. In 2022, the Corporation initiated a share repurchase program of up to $10 billion over 12 to 24 months. 2020 Cash flow from financing activities was $5.3 billion in 2020, $11.9 billion higher than 2019. Dividend payments on common shares increased to $3.48 per share from $3.43 per share and totaled $14.9 billion. During 2020, the Corporation issued $23.2 billion of long- term debt. Total debt increased $20.7 billion to $67.6 billion at year-end. ExxonMobil share of equity decreased $34.5 billion to $157.2 billion. The reduction to equity for losses was $22.4 billion and the reduction for distributions to ExxonMobil shareholders of $14.9 billion, all in the form of dividends. Foreign exchange translation effects of $1.8 billion for the weaker U.S. dollar and a $1.0 billion change in the funded status of the postretirement benefits reserves increased equity. During 2020, Exxon Mobil Corporation acquired 8 million shares of its common stock for the treasury. Purchases were made to offset shares or units settled in shares issued in conjunction with the company’s benefit plans and programs. Shares outstanding decreased from 4,234 million to 4,233 million at the end of 2020. Contractual Obligations The Corporation has contractual obligations involving commitments to third parties that impact its liquidity and capital resource needs. These contractual obligations are primarily for leases, debt, asset retirement obligations, pension and other postretirement benefits, take-or-pay and unconditional purchase obligations, and firm capital commitments. See Notes 9, 11, 14 and 17 for information related to asset retirement obligations, leases, long-term debt and pensions, respectively. In addition, the Corporation also enters into commodity purchase obligations (volumetric commitments but no fixed or minimum price) which are resold shortly after purchase, either in an active, highly liquid market or under long-term, unconditional sales contracts with similar pricing terms. Examples include long-term, noncancelable LNG and natural gas purchase commitments and commitments to purchase refinery products at market prices. These commitments are not meaningful in assessing liquidity and cash flow, because the purchases will be offset in the same periods by cash received from the related sales transactions. Take-or-pay obligations are noncancelable, long-term commitments for goods and services. Unconditional purchase obligations are those long-term commitments that are noncancelable or cancelable only under certain conditions, and that third parties have used to secure financing for the facilities that will provide the contracted goods or services. These obligations mainly pertain to pipeline, manufacturing supply and terminal agreements. The total obligation at year-end 2021 for take-or-pay and unconditional purchase obligations was $30,031 million. Cash payments expected in 2022 and 2023 are $4,004 million and $3,560 million, respectively. 58 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Guarantees The Corporation and certain of its consolidated subsidiaries were contingently liable at December 31, 2021 for guarantees relating to notes, loans and performance under contracts (Note 16). Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources. Financial Strength On December 31, 2021, the Corporation had total unused short-term committed lines of credit of $10.7 billion (Note 6) and total unused long-term committed lines of credit of $0.6 billion (Note 14). The table below shows the Corporation’s consolidated debt to capital ratios. Debt to capital (percent) Net debt to capital (percent) 2021 21.4 18.9 2020 29.2 27.8 2019 19.1 18.1 Management views the Corporation’s financial strength to be a competitive advantage of strategic importance. The Corporation’s financial position gives it the opportunity to access the world’s capital markets across a range of market conditions, and enables the Corporation to take on large, long-term capital commitments in the pursuit of maximizing shareholder value. Industry conditions in 2020 led to lower realized prices for the Corporation’s products which resulted in substantially lower earnings and operating cash flow in comparison to 2019. The Corporation took steps to strengthen its liquidity in 2020, including issuing $23.2 billion of long-term debt and implementing significant capital and operating cost reductions. The Corporation ended 2020 with $67.6 billion in total debt. Stronger prices and margins improved the Corporation's financial results in 2021. The Corporation reduced debt by $19.9 billion and ended the year with $47.7 billion in total debt. Litigation and Other Contingencies As discussed in Note 16, a variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a material adverse effect upon the Corporation’s operations, financial condition, or financial statements taken as a whole. There are no events or uncertainties beyond those already included in reported financial information that would indicate a material change in future operating results or financial condition. Refer to Note 16 for additional information on legal proceedings and other contingencies. CAPITAL AND EXPLORATION EXPENDITURES Capital and exploration expenditures (Capex) represents the combined total of additions at cost to property, plant and equipment, and exploration expenses on a before-tax basis from the Consolidated Statement of Income. ExxonMobil’s Capex includes its share of similar costs for equity companies. Capex excludes assets acquired in nonmonetary exchanges, the value of ExxonMobil shares used to acquire assets, and depreciation on the cost of exploration support equipment and facilities recorded to property, plant and equipment when acquired. While ExxonMobil’s management is responsible for all investments and elements of net income, particular focus is placed on managing the controllable aspects of this group of expenditures. Upstream (1) Downstream Chemical Other Total (1) Exploration expenses included. 2021 2020 U.S. Non-U.S. Total U.S. Non-U.S. Total (millions of dollars) 12,254 2,095 2,243 3 16,595 6,817 2,344 2,002 6 11,169 7,614 1,877 714 — 10,205 14,431 4,221 2,716 6 21,374 4,018 1,000 1,367 3 6,388 8,236 1,095 876 — 10,207 59 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Capex in 2021 was $16.6 billion, as the Corporation continued to pursue opportunities to find and produce new supplies of oil and natural gas to meet global demand for energy. The Corporation plans to invest in the range of $21 billion to $24 billion in 2022. Included in the 2022 capital spend range is $8.3 billion of firm capital commitments. An additional $10.7 billion of firm capital commitments have been made for years 2023 and beyond. Actual spending could vary depending on the progress of individual projects and property acquisitions. Upstream spending of $12.3 billion in 2021 was down 15 percent from 2020, primarily in the U.S. Permian Basin. Investments in 2021 included the U.S. Permian Basin and key development projects in Guyana and Brazil. Development projects typically take several years from the time of recording proved undeveloped reserves to the start of production and can exceed five years for large and complex projects. The percentage of proved developed reserves was 66 percent of total proved reserves at year-end 2021, and has been over 60 percent for the last ten years. Capital investments in the Downstream totaled $2.1 billion in 2021, a decrease of $2.1 billion from 2020, reflecting lower global project spending. Chemical capital expenditures of $2.2 billion, decreased $0.5 billion, representing reduced spend on growth projects. TAXES Income taxes Effective income tax rate Total other taxes and duties Total 2021 2021 2020 2019 (millions of dollars) 7,636 (5,632) 5,282 31 % 17 % 34 % 32,955 40,591 28,425 22,793 33,186 38,468 Total taxes on the Corporation’s income statement were $40.6 billion in 2021, an increase of $17.8 billion from 2020. Income tax expense, both current and deferred, was $7.6 billion compared to a $5.6 billion benefit in 2020. The effective tax rate, which is calculated based on consolidated company income taxes and ExxonMobil’s share of equity company income taxes, was 31 percent compared to 17 percent in the prior year due primarily to a change in mix of results in jurisdictions with varying tax rates. Total other taxes and duties of $33.0 billion in 2021 increased $4.5 billion. 2020 Total taxes on the Corporation’s income statement were $22.8 billion in 2020, a decrease of $15.7 billion from 2019. Income tax expense, both current and deferred, was a benefit of $5.6 billion compared to $5.3 billion expense in 2019. The relative benefit was driven by asset impairments recorded in 2020. The effective tax rate, which is calculated based on consolidated company income taxes and ExxonMobil’s share of equity company income taxes, was 17 percent compared to 34 percent in the prior year due primarily to a change in mix of results in jurisdictions with varying tax rates. Total other taxes and duties of $28.4 billion in 2020 decreased $4.8 billion. 60 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS ENVIRONMENTAL MATTERS Environmental Expenditures Capital expenditures Other expenditures Total 2021 2020 (millions of dollars) 1,202 3,361 4,563 1,087 3,389 4,476 Throughout ExxonMobil’s businesses, new and ongoing measures are taken to prevent and minimize the impact of our operations on air, water and ground. These include a significant investment in refining infrastructure and technology to manufacture clean fuels, as well as projects to monitor and reduce nitrogen oxide, sulfur oxide and greenhouse gas emissions, and expenditures for asset retirement obligations. Using definitions and guidelines established by the American Petroleum Institute, ExxonMobil’s 2021 worldwide environmental expenditures for all such preventative and remediation steps, including ExxonMobil’s share of equity company expenditures, were $4.6 billion, of which $3.4 billion were included in expenses with the remainder in capital expenditures. The total cost for such activities is expected to increase to approximately $5.3 billion in 2022, with capital expenditures expected to account for approximately 30 percent of the total. Costs for 2023 are anticipated to be higher as the Low Carbon Solutions business matures and the Corporation progresses its emission-reduction plans. Environmental Liabilities The Corporation accrues environmental liabilities when it is probable that obligations have been incurred and the amounts can be reasonably estimated. This policy applies to assets or businesses currently owned or previously disposed. ExxonMobil has accrued liabilities for probable environmental remediation obligations at various sites, including multiparty sites where the U.S. Environmental Protection Agency has identified ExxonMobil as one of the potentially responsible parties. The involvement of other financially responsible companies at these multiparty sites could mitigate ExxonMobil’s actual joint and several liability exposure. At present, no individual site is expected to have losses material to ExxonMobil’s operations or financial condition. Consolidated company provisions made in 2021 for environmental liabilities were $146 million ($263 million in 2020) and the balance sheet reflects liabilities of $807 million as of December 31, 2021, and $902 million as of December 31, 2020. MARKET RISKS Worldwide Average Realizations (1) Crude oil and NGL ($ per barrel) Natural gas ($ per thousand cubic feet) (1) Consolidated subsidiaries. 2021 61.89 4.33 2020 35.41 2.01 2019 56.32 3.05 Crude oil, natural gas, petroleum product and chemical prices have fluctuated in response to changing market forces. The impacts of these price fluctuations on earnings from Upstream, Downstream and Chemical operations have varied. For the year 2022, a $1 per barrel change in the weighted-average realized price of oil would have approximately a $500 million annual after-tax effect on Upstream consolidated plus equity company earnings, excluding the impact of derivatives. Similarly, a $0.10 per thousand cubic feet change in the worldwide average gas realization would have approximately a $155 million annual after-tax effect on Upstream consolidated plus equity company earnings, excluding the impact of derivatives. For any given period, the extent of actual benefit or detriment will be dependent on the price movements of individual types of crude oil, results of trading activities, taxes and other government take impacts, price adjustment lags in long-term gas contracts, and crude and gas production volumes. Accordingly, changes in benchmark prices for crude oil and natural gas only provide broad indicators of changes in the earnings experienced in any particular period. In the very competitive downstream and chemical environments, earnings are primarily determined by margin capture rather than absolute price levels of products sold. Refining margins are a function of the difference between what a refiner pays for its raw materials (primarily crude oil) and the market prices for the range of products produced. These prices in turn depend on global and regional supply/demand balances, inventory levels, refinery operations, import/export balances and weather. The global energy markets can give rise to extended periods in which market conditions are adverse to one or more of the Corporation’s businesses. Such conditions, along with the capital-intensive nature of the industry and very long lead times associated with many of our projects, underscore the importance of maintaining a strong financial position. Management views the Corporation’s financial strength as a competitive advantage. 61 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS In general, segment results are not dependent on the ability to sell and/or purchase products to/from other segments. Instead, where such sales take place, they are the result of efficiencies and competitive advantages of integrated refinery and chemical complexes. Additionally, intersegment sales are at market-based prices. The products bought and sold between segments can also be acquired in worldwide markets that have substantial liquidity, capacity, and transportation capabilities. Refer to Note 18 for additional information on intersegment revenue. Although price levels of crude oil and natural gas may rise or fall significantly over the short to medium term due to global economic conditions, political events, decisions by OPEC and other major government resource owners and other factors, industry economics over the long term will continue to be driven by market supply and demand. Accordingly, the Corporation evaluates the viability of its major investments over a range of prices. The Corporation has an active asset management program in which underperforming assets are either improved to acceptable levels or considered for divestment. The asset management program includes a disciplined, regular review to ensure that assets are contributing to the Corporation’s strategic objectives. Risk Management The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the Corporation’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. The Corporation’s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation’s financial position as of December 31, 2021 and 2020, or results of operations for the years ended 2021, 2020 and 2019. Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. No material market or credit risks to the Corporation’s financial position, results of operations or liquidity exist as a result of the derivatives described in Note 13. The Corporation maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity. The Corporation is exposed to changes in interest rates, primarily on its short-term debt and the portion of long-term debt that carries floating interest rates. The impact of a 100-basis-point change in interest rates affecting the Corporation’s debt would not be material to earnings or cash flow. The Corporation has access to significant capacity of long-term and short-term liquidity. Internally generated funds are generally expected to cover financial requirements, supplemented by long-term and short-term debt as required. Commercial paper is used to balance short-term liquidity requirements. Some joint-venture partners are dependent on the credit markets, and their funding ability may impact the development pace of joint-venture projects. The Corporation conducts business in many foreign currencies and is subject to exchange rate risk on cash flows related to sales, expenses, financing and investment transactions. Fluctuations in exchange rates are often offsetting and the impacts on ExxonMobil’s geographically and functionally diverse operations are varied. The Corporation makes limited use of currency exchange contracts to mitigate the impact of changes in currency values, and exposures related to the Corporation’s use of these contracts are not material. 62 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS CRITICAL ACCOUNTING ESTIMATES The Corporation’s accounting and financial reporting fairly reflect its integrated business model involving exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen and biofuels. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. The Corporation’s accounting policies are summarized in Note 1. Oil and Natural Gas Reserves The estimation of proved oil and natural gas reserve volumes is an ongoing process based on rigorous technical evaluations, commercial and market assessments and detailed analysis of well information such as flow rates and reservoir pressure declines, development and production costs, and other factors. The estimation of proved reserves is controlled by the Corporation through long- standing approval guidelines. Reserve changes are made within a well-established, disciplined process driven by senior level geoscience and engineering professionals, assisted by the Global Reserves and Resources Group which has significant technical experience, culminating in reviews with and approval by senior management. Notably, the Corporation does not use specific quantitative reserve targets to determine compensation. Key features of the reserve estimation process are covered in Disclosure of Reserves in Item 2. Oil and natural gas reserves include both proved and unproved reserves. • Proved oil and natural gas reserves are determined in accordance with Securities and Exchange Commission (SEC) requirements. Proved reserves are those quantities of oil and natural gas which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible under existing economic and operating conditions and government regulations. Proved reserves are determined using the average of first-of-month oil and natural gas prices during the reporting year. Proved reserves can be further subdivided into developed and undeveloped reserves. Proved developed reserves include amounts which are expected to be recovered through existing wells with existing equipment and operating methods. Proved undeveloped reserves include amounts expected to be recovered from new wells on undrilled proved acreage or from existing wells where a relatively major expenditure is required for completion. Proved undeveloped reserves are recognized only if a development plan has been adopted indicating that the reserves are scheduled to be drilled within five years, unless specific circumstances support a longer period of time. The Corporation is reasonably certain that proved reserves will be produced. However, the timing and amount recovered can be affected by a number of factors including completion of development projects, reservoir performance, regulatory approvals, government policy, consumer preferences and significant changes in oil and natural gas price levels. • Unproved reserves are quantities of oil and natural gas with less than reasonable certainty of recoverability and include probable reserves. Probable reserves are reserves that, together with proved reserves, are as likely as not to be recovered. Revisions in previously estimated volumes of proved reserves for existing fields can occur due to the evaluation or re-evaluation of (1) already available geologic, reservoir or production data, (2) new geologic, reservoir or production data or (3) changes in the average of first-of-month oil and natural gas prices and/or costs that are used in the estimation of reserves. Revisions can also result from significant changes in development strategy or production equipment and facility capacity. Unit-of-Production Depreciation Oil and natural gas reserve volumes are used as the basis to calculate unit-of-production depreciation rates for most upstream assets. Depreciation is calculated by taking the ratio of asset cost to total proved reserves or proved developed reserves applied to actual production. The volumes produced and asset cost are known, while proved reserves are based on estimates that are subject to some variability. In the event that the unit-of-production method does not result in an equitable allocation of cost over the economic life of an upstream asset, an alternative method is used. The straight-line method is used in limited situations where the expected life of the asset does not reasonably correlate with that of the underlying reserves. For example, certain assets used in the production of oil and natural gas have a shorter life than the reserves, and as such, the Corporation uses straight-line depreciation to ensure the asset is fully depreciated by the end of its useful life. To the extent that proved reserves for a property are substantially de-booked and that property continues to produce such that the resulting depreciation charge does not result in an equitable allocation of cost over the expected life, assets will be depreciated using a unit-of-production method based on reserves determined at the most recent SEC price which results in a more meaningful quantity of proved reserves, appropriately adjusted for production and technical changes. 63 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Impairment The Corporation tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. The Corporation has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 and ASC 932, and relies, in part, on the Corporation’s planning and budgeting cycle. Because the lifespans of the vast majority of the Corporation’s major assets are measured in decades, the future cash flows of these assets are predominantly based on long-term oil and natural gas commodity prices and industry margins, and development and production costs. Significant reductions in the Corporation’s view of oil or natural gas commodity prices or margin ranges, especially the longer-term prices and margins, and changes in the development plans, including decisions to defer, reduce, or eliminate planned capital spending, can be an indicator of potential impairment. Other events or changes in circumstances, including indicators outlined in ASC 360, can be indicators of potential impairment as well. In general, the Corporation does not view temporarily low prices or margins as an indication of impairment. Management believes that prices over the long term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments and technology, and efficiency advancements. OPEC investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities, alternative energy sources and levels of prosperity. During the lifespan of its major assets, the Corporation expects that oil and gas prices and industry margins will experience significant volatility, and consequently these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the Corporation considers recent periods of operating losses in the context of its longer-term view of prices and margins. Energy Outlook and Cash Flow Assessment. The annual planning and budgeting process, known as the Corporate Plan, is the mechanism by which resources (capital, operating expenses, and people) are allocated across the Corporation. The foundation for the assumptions supporting the Corporate Plan is the Energy Outlook, which contains the Corporation’s demand and supply projections based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, and economic development. Reflective of the existing global policy environment, the Energy Outlook does not project the degree of required future policy and technology advancement and deployment for the world, or the Corporation, to meet net-zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Energy Outlook, and the Corporation’s business plans will be updated accordingly. If events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, the Corporation estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. Cash flows used in recoverability assessments are based on the assumptions developed in the Corporate Plan, which is reviewed and approved by the Board of Directors, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the Corporation’s assumptions of future capital allocations, crude oil and natural gas commodity prices including price differentials, refining and chemical margins, volumes, development and operating costs including greenhouse gas emission prices, and foreign currency exchange rates. Volumes are based on projected field and facility production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. The greenhouse gas emission prices reflect existing or anticipated policy actions that countries or localities may take in support of Paris Accord pledges. While third-party scenarios, such as the International Energy Agency Net Zero Emissions by 2050, may be used to test the resiliency of the Corporation's businesses or strategies, they are not used as a basis for developing future cash flows for impairment assessments. Fair Value of Impaired Assets. An asset group is impaired if its estimated undiscounted cash flows are less than the asset group’s carrying value. Impairments are measured by the amount by which the carrying value exceeds fair value. The assessment of fair value is based upon the views of a likely market participant. The principal parameters used to establish fair value include estimates of acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, throughput and product sales volumes, commodity prices which are consistent with the average of third-party industry experts and government agencies, refining and chemical margins, drilling and development costs, operating costs and discount rates which are reflective of the characteristics of the asset group. 64 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Other Impairment Estimates. Unproved properties are assessed periodically to determine whether they have been impaired. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the Corporation's future development plans, the estimated economic chance of success and the length of time that the Corporation expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period. Long-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the assets are considered impaired and adjusted to the lower value. Judgment is required to determine if assets are held for sale and to determine the fair value less cost to sell. Investments in equity companies are assessed for possible impairment when events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Examples of key indicators include a history of operating losses, negative earnings and cash flow outlook, significant downward revisions to oil and gas reserves, and the financial condition and prospects for the investee’s business segment or geographic region. If the decline in value of the investment is other than temporary, the carrying value of the investment is written down to fair value. In the absence of market prices for the investment, discounted cash flows are used to assess fair value, which requires significant judgment. Recent Impairments. In 2021, the Corporation identified situations where events or changes in circumstances indicated that the carrying value of certain long-lived assets may not be recoverable and performed impairment assessments. After-tax impairment charges of $1.0 billion, including impairments of suspended wells, were recognized during the year largely as a result of changes to Upstream development plans. In 2020, as part of the Corporation's annual review and approval of its business and strategic plan, a decision was made to no longer develop a significant portion of the dry gas portfolio in the U.S., Canada and Argentina. The impairment of these assets resulted in after-tax charges of $18.4 billion in Upstream. Other after-tax impairment charges of $1.1 billion, $0.6 billion and $0.2 billion were recognized in Upstream, Downstream and Chemical, respectively. These charges include impairments of property, plant and equipment, goodwill and equity method investments. In 2019, after-tax impairment charges were $0.2 billion. Factors which could put further assets at risk of impairment in the future include reductions in the Corporation’s price or margin outlooks, changes in the allocation of capital or development plans, reduced long-term demand for the Corporation's products, and operating cost increases which exceed the pace of efficiencies or the pace of oil and natural gas price or margin increases. However, due to the inherent difficulty in predicting future commodity prices or margins, and the relationship between industry prices and costs, it is not practicable to reasonably estimate the existence or range of any potential future impairment charges related to the Corporation’s long-lived assets. For further information regarding impairments in goodwill, equity method investments, property, plant and equipment and suspended wells, refer to Notes 3, 7, 9 and 10, respectively. Asset Retirement Obligations The Corporation is subject to retirement obligations for certain assets. The fair values of these obligations are recorded as liabilities on a discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the Corporation uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation; technical assessments of the assets; estimated amounts and timing of settlements; discount rates; and inflation rates. Asset retirement obligations are disclosed in Note 9. Suspended Exploratory Well Costs The Corporation continues capitalization of exploratory well costs when it has found a sufficient quantity of reserves to justify completion as a producing well and the Corporation is making sufficient progress assessing the reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expense. Assessing whether the Corporation is making sufficient progress on a project requires careful consideration of the facts and circumstances. The facts and circumstances that support continued capitalization of suspended wells at year-end are disclosed in Note 10. 65 MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Pension Benefits The Corporation and its affiliates sponsor about 80 defined benefit (pension) plans in over 40 countries. The Pension and Other Postretirement Benefits footnote (Note 17) provides details on pension obligations, fund assets and pension expense. Some of these plans (primarily non-U.S.) provide pension benefits that are paid directly by their sponsoring affiliates out of corporate cash flow rather than a separate pension fund because applicable tax rules and regulatory practices do not encourage advance funding. Book reserves are established for these plans. The portion of the pension cost attributable to employee service is expensed as services are rendered. The portion attributable to the increase in pension obligations due to the passage of time is expensed over the term of the obligations, which ends when all benefits are paid. The primary difference in pension expense for unfunded versus funded plans is that pension expense for funded plans also includes a credit for the expected long-term return on fund assets. For funded plans, including those in the U.S., pension obligations are financed in advance through segregated assets or insurance arrangements. These plans are managed in compliance with the requirements of governmental authorities and meet or exceed required funding levels as measured by relevant actuarial and government standards at the mandated measurement dates. In determining liabilities and required contributions, these standards often require approaches and assumptions that differ from those used for accounting purposes. The Corporation will continue to make contributions to these funded plans as necessary. All defined-benefit pension obligations, regardless of the funding status of the underlying plans, are fully supported by the financial strength of the Corporation or the respective sponsoring affiliate. Pension accounting requires explicit assumptions regarding, among others, the long-term expected earnings rate on fund assets, the discount rate for the benefit obligations and the long-term rate for future salary increases. Pension assumptions are reviewed annually by outside actuaries and senior management. These assumptions are adjusted as appropriate to reflect changes in market rates and outlook. The long-term expected earnings rate on U.S. pension plan assets in 2021 was 5.3 percent. The 10-year and 20-year actual returns on U.S. pension plan assets were 9 percent and 7 percent, respectively. The Corporation establishes the long-term expected rate of return by developing a forward-looking, long-term return assumption for each pension fund asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-term return assumption for each asset class. A worldwide reduction of 0.5 percent in the long-term rate of return on assets would increase annual pension expense by approximately $190 million before tax. Differences between actual returns on fund assets and the long-term expected return are not recognized in pension expense in the year that the difference occurs. Such differences are deferred, along with other actuarial gains and losses, and are amortized into pension expense over the expected remaining service life of employees. Litigation and Tax Contingencies A variety of claims have been made against the Corporation and certain of its consolidated subsidiaries in a number of pending lawsuits. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and where feasible, an estimate of the possible loss. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The status of significant claims is summarized in Note 16. Management judgment is required related to contingent liabilities and the outcome of litigation because both are difficult to predict. However, the Corporation has been successful in defending litigation in the past. Payments have not had a material adverse effect on operations or financial condition. In the Corporation’s experience, large claims often do not result in large awards. Large awards are often reversed or substantially reduced as a result of appeal or settlement. The Corporation is subject to income taxation in many jurisdictions around the world. The benefits of uncertain tax positions that the Corporation has taken or expects to take in its income tax returns are recognized in the financial statements if management concludes that it is more likely than not that the position will be sustained with the tax authorities. For a position that is likely to be sustained, the benefit recognized in the financial statements is measured at the largest amount that is greater than 50 percent likely of being realized. Significant management judgment is required in the accounting for income tax contingencies and tax disputes because the outcomes are often difficult to predict. The Corporation’s unrecognized tax benefits and a description of open tax years are summarized in Note 19. 66 MANAGEMENT’S REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING Management, including the Corporation’s Chief Executive Officer, Chief Financial Officer, and Principal Accounting Officer, is responsible for establishing and maintaining adequate internal control over the Corporation’s financial reporting. Management conducted an evaluation of the effectiveness of internal control over financial reporting based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. Based on this evaluation, management concluded that Exxon Mobil Corporation’s internal control over financial reporting was effective as of December 31, 2021. PricewaterhouseCoopers LLP, an independent registered public accounting firm, audited the effectiveness of the Corporation’s internal control over financial reporting as of December 31, 2021, as stated in their report included in the Financial Section of this report. Darren W. Woods Chief Executive Officer Kathryn A. Mikells Senior Vice President and Chief Financial Officer Len M. Fox Vice President and Controller (Principal Accounting Officer) 67 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Board of Directors and Shareholders of Exxon Mobil Corporation Opinions on the Financial Statements and Internal Control over Financial Reporting We have audited the accompanying consolidated balance sheet of Exxon Mobil Corporation and its subsidiaries (the “Corporation”) as of December 31, 2021 and 2020, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2021, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Corporation's internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Corporation as of December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021 in conformity with accounting principles generally accepted in the United States of America. Also in our opinion, the Corporation maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO. Basis for Opinions The Corporation's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management’s Report on Internal Control Over Financial Reporting. Our responsibility is to express opinions on the Corporation’s consolidated financial statements and on the Corporation's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Corporation in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects. Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions. Definition and Limitations of Internal Control over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. 68 REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM Critical Audit Matters The critical audit matter communicated below is a matter arising from the current period audit of the consolidated financial statements that was communicated or required to be communicated to the audit committee and that (i) relates to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the accounts or disclosures to which it relates. The Impact of Proved Oil and Natural Gas Reserves on Upstream Property, Plant and Equipment, Net As described in Notes 1, 9 and 18 to the consolidated financial statements, the Corporation’s consolidated upstream property, plant and equipment (PP&E), net balance was $157.0 billion as of December 31, 2021, and the related depreciation and depletion expense for the year ended December 31, 2021 was $16.7 billion. Management uses the successful efforts method to account for its exploration and production activities. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. As disclosed by management, proved oil and natural gas reserve volumes are used as the basis to calculate unit-of-production depreciation rates for most upstream assets. The estimation of proved oil and natural gas reserve volumes is an ongoing process based on technical evaluations, commercial and market assessments, and detailed analysis of well information such as flow rates and reservoir pressure declines, development and production costs, among other factors. As further disclosed by management, reserve changes are made within a well-established, disciplined process driven by senior level geoscience and engineering professionals, assisted by the Global Reserves and Resources Group (together “management’s specialists”). The principal considerations for our determination that performing procedures relating to the impact of proved oil and natural gas reserves on upstream PP&E, net is a critical audit matter are (i) the significant judgment by management, including the use of management’s specialists, when developing the estimates of proved oil and natural gas reserve volumes, as the reserve volumes are based on engineering assumptions and methods, which in turn led to (ii) a high degree of auditor judgment, subjectivity, and effort in performing procedures and evaluating audit evidence related to the data, methods, and assumptions used by management and its specialists in developing the estimates of proved oil and natural gas reserve volumes and the assumptions applied to the data related to future development costs and production costs, as applicable. Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management's estimates of proved oil and natural gas reserve volumes. The work of management's specialists was used in performing the procedures to evaluate the reasonableness of the proved oil and natural gas reserve volumes. As a basis for using this work, the specialists' qualifications were understood and the Corporation's relationship with the specialists was assessed. The procedures performed also included evaluation of the methods and assumptions used by the specialists, tests of the data used by the specialists, and an evaluation of the specialists' findings. These procedures also included, among others, testing the completeness and accuracy of the data related to future development costs and production costs. Additionally, these procedures included evaluating whether the assumptions applied to the data related to future development costs and production costs were reasonable considering the past performance of the Corporation. /s/ PricewaterhouseCoopers LLP Dallas, Texas February 23, 2022 We have served as the Corporation’s auditor since 1934. 69 CONSOLIDATED STATEMENT OF INCOME Revenues and other income Sales and other operating revenue Income from equity affiliates Other income Total revenues and other income Costs and other deductions Crude oil and product purchases Production and manufacturing expenses Selling, general and administrative expenses Depreciation and depletion (includes impairments) Exploration expenses, including dry holes Non-service pension and postretirement benefit expense Interest expense Other taxes and duties Total costs and other deductions Income (loss) before income taxes Income tax expense (benefit) Net income (loss) including noncontrolling interests Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to ExxonMobil Earnings (loss) per common share (dollars) Earnings (loss) per common share - assuming dilution (dollars) Note Reference Number 7 3, 9 17 19 19 12 12 2021 2020 2019 (millions of dollars) 276,692 178,574 255,583 6,657 2,291 1,732 1,196 5,441 3,914 285,640 181,502 264,938 155,164 36,035 9,574 20,607 1,054 786 947 30,239 254,406 31,234 7,636 23,598 558 94,007 30,431 10,168 46,009 1,285 1,205 1,158 26,122 210,385 (28,883) (5,632) (23,251) (811) 143,801 36,826 11,398 18,998 1,269 1,235 830 30,525 244,882 20,056 5,282 14,774 434 23,040 (22,440) 14,340 5.39 (5.25) 3.36 5.39 (5.25) 3.36 The information in the Notes to Consolidated Financial Statements is an integral part of these statements. 70 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Net income (loss) including noncontrolling interests Other comprehensive income (loss) (net of income taxes) Foreign exchange translation adjustment Adjustment for foreign exchange translation (gain)/loss included in net income Postretirement benefits reserves adjustment (excluding amortization) Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs Total other comprehensive income (loss) Comprehensive income (loss) including noncontrolling interests Comprehensive income (loss) attributable to noncontrolling interests Comprehensive income (loss) attributable to ExxonMobil 2021 2020 2019 (millions of dollars) 23,598 (23,251) 14,774 (872) 1,916 14 30 896 2,856 1,735 — (2,092) 582 225 (2) 3,118 925 3,169 26,767 786 (20,395) 14,999 (743) 588 25,981 (19,652) 14,411 The information in the Notes to Consolidated Financial Statements is an integral part of these statements. 71 CONSOLIDATED BALANCE SHEET Assets Current assets Cash and cash equivalents Notes and accounts receivable - net Inventories Crude oil, products and merchandise Materials and supplies Other current assets Total current assets Investments, advances and long-term receivables Property, plant and equipment, at cost, less accumulated depreciation and depletion Other assets, including intangibles - net Total assets Liabilities Current liabilities Notes and loans payable Accounts payable and accrued liabilities Income taxes payable Total current liabilities Long-term debt Postretirement benefits reserves Deferred income tax liabilities Long-term obligations to equity companies Other long-term obligations Total liabilities Commitments and contingencies Equity Common stock without par value (9,000 million shares authorized, 8,019 million shares issued) Earnings reinvested Accumulated other comprehensive income Common stock held in treasury (3,780 million shares in 2021 and 3,786 million shares in 2020) ExxonMobil share of equity Noncontrolling interests Total equity Total liabilities and equity Note Reference Number December 31, 2021 December 31, 2020 (millions of dollars) 6 3 8 9 6 6 14 17 19 16 6,802 32,383 4,364 20,581 14,519 4,261 1,189 59,154 45,195 216,552 18,022 338,923 4,276 50,766 1,601 56,643 43,428 18,430 20,165 2,857 21,717 14,169 4,681 1,098 44,893 43,515 227,553 16,789 332,750 20,458 35,221 684 56,363 47,182 22,415 18,165 3,253 21,242 163,240 168,620 15,746 392,059 (13,764) 15,688 383,943 (16,705) (225,464) 168,577 7,106 175,683 338,923 (225,776) 157,150 6,980 164,130 332,750 The information in the Notes to Consolidated Financial Statements is an integral part of these statements. 72 CONSOLIDATED STATEMENT OF CASH FLOWS Cash flows from operating activities Net income (loss) including noncontrolling interests Adjustments for noncash transactions Depreciation and depletion (includes impairments) Deferred income tax charges/(credits) Postretirement benefits expense in excess of/(less than) net payments Other long-term obligation provisions in excess of/(less than) payments Dividends received greater than/(less than) equity in current earnings of equity companies Changes in operational working capital, excluding cash and debt Reduction/(increase) - Notes and accounts receivable Increase/(reduction) - Accounts and other payables - Inventories - Other current assets Net (gain)/loss on asset sales All other items - net Net cash provided by operating activities Cash flows from investing activities Additions to property, plant and equipment Proceeds from asset sales and returns of investments Additional investments and advances Other investing activities including collection of advances Net cash used in investing activities Cash flows from financing activities Additions to long-term debt Reductions in long-term debt Additions to short-term debt (1) Reductions in short-term debt (1) Additions/(reductions) in commercial paper, and debt with three months or less maturity Contingent consideration payments Cash dividends to ExxonMobil shareholders Cash dividends to noncontrolling interests Changes in noncontrolling interests Common stock acquired Net cash provided by (used in) financing activities Effects of exchange rate changes on cash Increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Note Reference Number 3, 9 19 5 2021 2020 2019 (millions of dollars) 23,598 (23,251) 14,774 20,607 303 754 50 46,009 (8,856) 18,998 (944) 498 109 (1,269) (3,038) (668) 979 (936) (12,098) (489) (71) 16,820 (1,207) 530 48,129 5,384 (315) 420 (7,142) 4 2,207 14,668 (2,640) 72 (234) 3,725 (1,710) 1,540 29,716 (12,076) (17,282) (24,361) 3,176 (2,817) 1,482 999 (4,857) 2,681 3,692 (3,905) 1,490 (10,235) (18,459) (23,084) 46 (8) 12,687 (29,396) (2,983) (30) 23,186 (8) 35,396 (28,742) (9,691) (21) 7,052 (1) 18,967 (18,367) 1,011 — (14,924) (14,865) (14,652) (224) (436) (155) (35,423) (33) 2,438 4,364 6,802 (188) 623 (405) 5,285 (219) 1,275 3,089 4,364 (192) 158 (594) (6,618) 33 47 3,042 3,089 (1) Includes commercial paper with a maturity greater than three months. The information in the Notes to Consolidated Financial Statements is an integral part of these statements. 73 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY ExxonMobil Share of Equity Common Stock Earnings Reinvested Accumulated Other Comprehensive Income Common Stock Held in Treasury (millions of dollars) ExxonMobil Share of Equity Non- controlling Interests Total Equity Balance as of December 31, 2018 15,258 421,653 (19,564) (225,553) 191,794 6,734 198,528 Amortization of stock-based awards Other Net income (loss) for the year Dividends - common shares Other comprehensive income Acquisitions, at cost Dispositions 697 (318) — — — — — — — 14,340 (14,652) — — — — — — — 71 — — — — — — — (594) 312 697 (318) 14,340 (14,652) 71 (594) 312 — 489 434 (192) 154 (331) — 697 171 14,774 (14,844) 225 (925) 312 Balance as of December 31, 2019 15,637 421,341 (19,493) (225,835) 191,650 7,288 198,938 Amortization of stock-based awards Other Net income (loss) for the year Dividends - common shares Cumulative effect of accounting change Other comprehensive income Acquisitions, at cost Dispositions 696 (645) — — — — — — — — (22,440) (14,865) (93) — — — — — — — — 2,788 — — — — — — — — (405) 464 696 (645) (22,440) (14,865) (93) 2,788 (405) 464 — 692 (811) (188) (1) 68 (68) — 696 47 (23,251) (15,053) (94) 2,856 (473) 464 Balance as of December 31, 2020 15,688 383,943 (16,705) (225,776) 157,150 6,980 164,130 Amortization of stock-based awards Other Net income (loss) for the year Dividends - common shares Other comprehensive income Acquisitions, at cost Dispositions 534 (476) — — — — — — — 23,040 (14,924) — — — — — — — 2,941 — — — — — — — (155) 467 534 (476) 23,040 (14,924) 2,941 (155) 467 — 115 558 (224) 228 (551) — 534 (361) 23,598 (15,148) 3,169 (706) 467 Balance as of December 31, 2021 15,746 392,059 (13,764) (225,464) 168,577 7,106 175,683 Common Stock Share Activity Balance as of December 31, 2018 Acquisitions Dispositions Balance as of December 31, 2019 Acquisitions Dispositions Balance as of December 31, 2020 Acquisitions Dispositions Balance as of December 31, 2021 Issued Held in Treasury (millions of shares) Outstanding 8,019 — — 8,019 — — 8,019 — — 8,019 (3,782) (8) 5 (3,785) (8) 7 (3,786) (2) 8 (3,780) 4,237 (8) 5 4,234 (8) 7 4,233 (2) 8 4,239 The information in the Notes to Consolidated Financial Statements is an integral part of these statements. 74 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The accompanying consolidated financial statements and the supporting and supplemental material are the responsibility of the The accompanying consolidated financial statements and the supporting and supplemental material are the responsibility of the management of Exxon Mobil Corporation. management of Exxon Mobil Corporation. The Corporation’s principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, The Corporation’s principal business involves exploration for, and production of, crude oil and natural gas; manufacture, trade, transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of transport and sale of crude oil, natural gas, petroleum products, petrochemicals and a wide variety of specialty products; and pursuit of lower-emission business opportunities including carbon capture and storage, hydrogen and biofuels. lower-emission business opportunities including carbon capture and storage, hydrogen and biofuels. The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires The preparation of financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP) requires management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of management to make estimates that affect the reported amounts of assets, liabilities, revenues and expenses and the disclosure of contingent assets and liabilities. Actual results could differ from these estimates. Prior years’ data have been reclassified in certain contingent assets and liabilities. Actual results could differ from these estimates. Prior years’ data have been reclassified in certain cases to conform to the 2021 presentation basis. cases to conform to the 2021 presentation basis. 1. Summary of Accounting Policies 1. Summary of Accounting Policies Principles of Consolidation and Accounting for Investments Principles of Consolidation and Accounting for Investments The Consolidated Financial Statements include the accounts of subsidiaries the Corporation controls. They also include the The Consolidated Financial Statements include the accounts of subsidiaries the Corporation controls. They also include the Corporation’s share of the undivided interest in certain upstream assets, liabilities, revenues and expenses. Amounts representing the Corporation’s share of the undivided interest in certain upstream assets, liabilities, revenues and expenses. Amounts representing the Corporation’s interest in entities that it does not control, but over which it exercises significant influence, are included in “Investments, Corporation’s interest in entities that it does not control, but over which it exercises significant influence, are included in “Investments, advances and long-term receivables”. The Corporation’s share of the net income of these companies is included in the Consolidated advances and long-term receivables”. The Corporation’s share of the net income of these companies is included in the Consolidated Statement of Income caption “Income from equity affiliates”. Statement of Income caption “Income from equity affiliates”. Majority ownership is normally the indicator of control that is the basis on which subsidiaries are consolidated. However, certain Majority ownership is normally the indicator of control that is the basis on which subsidiaries are consolidated. However, certain factors may indicate that a majority-owned investment is not controlled and therefore should be accounted for using the equity method factors may indicate that a majority-owned investment is not controlled and therefore should be accounted for using the equity method of accounting. These factors occur where the minority shareholders are granted by law or by contract substantive participating rights. of accounting. These factors occur where the minority shareholders are granted by law or by contract substantive participating rights. These include the right to approve operating policies, expense budgets, financing and investment plans, and management These include the right to approve operating policies, expense budgets, financing and investment plans, and management compensation and succession plans. compensation and succession plans. Investments in equity companies are assessed for possible impairment when events or changes in circumstances indicate that the Investments in equity companies are assessed for possible impairment when events or changes in circumstances indicate that the carrying value of an investment may not be recoverable. Examples of key indicators include a history of operating losses, negative carrying value of an investment may not be recoverable. Examples of key indicators include a history of operating losses, negative earnings and cash flow outlook, significant downward revisions to oil and gas reserves, and the financial condition and prospects for earnings and cash flow outlook, significant downward revisions to oil and gas reserves, and the financial condition and prospects for the investee’s business segment or geographic region. If the decline in value of the investment is other than temporary, the carrying the investee’s business segment or geographic region. If the decline in value of the investment is other than temporary, the carrying value of the investment is written down to fair value. In the absence of market prices for the investment, discounted cash flows are value of the investment is written down to fair value. In the absence of market prices for the investment, discounted cash flows are used to assess fair value. used to assess fair value. Investments in equity securities other than consolidated subsidiaries and equity method investments are measured at fair value with Investments in equity securities other than consolidated subsidiaries and equity method investments are measured at fair value with changes in fair value recognized in net income. The Corporation uses the modified approach for equity securities that do not have a changes in fair value recognized in net income. The Corporation uses the modified approach for equity securities that do not have a readily determinable fair value. This modified approach measures investments at cost minus impairment, if any, plus or minus changes readily determinable fair value. This modified approach measures investments at cost minus impairment, if any, plus or minus changes resulting from observable price changes in orderly transactions in a similar investment of the same issuer. resulting from observable price changes in orderly transactions in a similar investment of the same issuer. The Corporation’s share of the cumulative foreign exchange translation adjustment for equity method investments is reported in The Corporation’s share of the cumulative foreign exchange translation adjustment for equity method investments is reported in “Accumulated other comprehensive income”. “Accumulated other comprehensive income”. Revenue Recognition Revenue Recognition The Corporation generally sells crude oil, natural gas and petroleum and chemical products under short-term agreements at prevailing The Corporation generally sells crude oil, natural gas and petroleum and chemical products under short-term agreements at prevailing market prices. In some cases (e.g., natural gas), products may be sold under long-term agreements, with periodic price adjustments to market prices. In some cases (e.g., natural gas), products may be sold under long-term agreements, with periodic price adjustments to reflect market conditions. Revenue is recognized at the amount the Corporation expects to receive when the customer has taken reflect market conditions. Revenue is recognized at the amount the Corporation expects to receive when the customer has taken control, which is typically when title transfers and the customer has assumed the risks and rewards of ownership. The prices of certain control, which is typically when title transfers and the customer has assumed the risks and rewards of ownership. The prices of certain sales are based on price indices that are sometimes not available until the next period. In such cases, estimated realizations are accrued sales are based on price indices that are sometimes not available until the next period. In such cases, estimated realizations are accrued when the sale is recognized, and are finalized when the price is available. Such adjustments to revenue from performance obligations when the sale is recognized, and are finalized when the price is available. Such adjustments to revenue from performance obligations satisfied in previous periods are not significant. Payment for revenue transactions is typically due within 30 days. Future volume satisfied in previous periods are not significant. Payment for revenue transactions is typically due within 30 days. Future volume delivery obligations that are unsatisfied at the end of the period are expected to be fulfilled through ordinary production or purchases. delivery obligations that are unsatisfied at the end of the period are expected to be fulfilled through ordinary production or purchases. These performance obligations are based on market prices at the time of the transaction and are fully constrained due to market price These performance obligations are based on market prices at the time of the transaction and are fully constrained due to market price volatility. volatility. Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and Purchases and sales of inventory with the same counterparty that are entered into in contemplation of one another are combined and recorded as exchanges measured at the book value of the item sold. recorded as exchanges measured at the book value of the item sold. “Sales and other operating revenue” and “Notes and accounts receivable” primarily arise from contracts with customers. Long-term “Sales and other operating revenue” and “Notes and accounts receivable” primarily arise from contracts with customers. Long-term receivables are primarily from non-customers. Contract assets are mainly from marketing assistance programs and are not significant. receivables are primarily from non-customers. Contract assets are mainly from marketing assistance programs and are not significant. Contract liabilities are mainly customer prepayments and accruals of expected volume discounts and are not significant. Contract liabilities are mainly customer prepayments and accruals of expected volume discounts and are not significant. 75 75 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Income and Other Taxes Income and Other Taxes The Corporation excludes from the Consolidated Statement of Income certain sales and value-added taxes imposed on and concurrent The Corporation excludes from the Consolidated Statement of Income certain sales and value-added taxes imposed on and concurrent with revenue-producing transactions with customers and collected on behalf of governmental authorities. Similar taxes, for which the with revenue-producing transactions with customers and collected on behalf of governmental authorities. Similar taxes, for which the Corporation is not considered to be an agent for the government, are reported on a gross basis (included in both “Sales and other Corporation is not considered to be an agent for the government, are reported on a gross basis (included in both “Sales and other operating revenue” and “Other taxes and duties”). operating revenue” and “Other taxes and duties”). The Corporation accounts for U.S. tax on global intangible low-taxed income as an income tax expense in the period in which it is The Corporation accounts for U.S. tax on global intangible low-taxed income as an income tax expense in the period in which it is incurred. incurred. Derivative Instruments Derivative Instruments The Corporation may use derivative instruments for trading purposes and to offset exposures associated with commodity prices, The Corporation may use derivative instruments for trading purposes and to offset exposures associated with commodity prices, foreign currency exchange rates and interest rates that arise from existing assets, liabilities, firm commitments and forecasted foreign currency exchange rates and interest rates that arise from existing assets, liabilities, firm commitments and forecasted transactions. All derivative instruments, except those designated as normal purchase and normal sale, are recorded at fair value. transactions. All derivative instruments, except those designated as normal purchase and normal sale, are recorded at fair value. Derivative assets and liabilities with the same counterparty are netted if the right of offset exists and certain other criteria are met. Derivative assets and liabilities with the same counterparty are netted if the right of offset exists and certain other criteria are met. Collateral payables or receivables are netted against derivative assets and derivative liabilities, respectively. Collateral payables or receivables are netted against derivative assets and derivative liabilities, respectively. Recognition and classification of the gain or loss that results from adjusting a derivative to fair value depends on the purpose for the Recognition and classification of the gain or loss that results from adjusting a derivative to fair value depends on the purpose for the derivative. All gains and losses from derivative instruments for which the Corporation does not apply hedge accounting are derivative. All gains and losses from derivative instruments for which the Corporation does not apply hedge accounting are immediately recognized in earnings. The Corporation may designate derivatives as fair value or cash flow hedges. For fair value immediately recognized in earnings. The Corporation may designate derivatives as fair value or cash flow hedges. For fair value hedges, the gain or loss from derivative instruments and the offsetting gain or loss from the hedged item are recognized in earnings. hedges, the gain or loss from derivative instruments and the offsetting gain or loss from the hedged item are recognized in earnings. For cash flow hedges, the gain or loss from the derivative instrument is initially reported as a component of other comprehensive For cash flow hedges, the gain or loss from the derivative instrument is initially reported as a component of other comprehensive income and subsequently reclassified into earnings in the period that the forecasted transaction affects earnings. income and subsequently reclassified into earnings in the period that the forecasted transaction affects earnings. Fair Value Fair Value Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants. Hierarchy levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. participants. Hierarchy levels 1, 2 and 3 are terms for the priority of inputs to valuation techniques used to measure fair value. Hierarchy level 1 inputs are quoted prices in active markets for identical assets or liabilities. Hierarchy level 2 inputs are inputs other Hierarchy level 1 inputs are quoted prices in active markets for identical assets or liabilities. Hierarchy level 2 inputs are inputs other than quoted prices included within level 1 that are directly or indirectly observable for the asset or liability. Hierarchy level 3 inputs than quoted prices included within level 1 that are directly or indirectly observable for the asset or liability. Hierarchy level 3 inputs are inputs that are not observable in the market. are inputs that are not observable in the market. Inventories Inventories Crude oil, products and merchandise inventories are carried at the lower of current market value or cost (generally determined under Crude oil, products and merchandise inventories are carried at the lower of current market value or cost (generally determined under the last-in, first-out method – LIFO). Inventory costs include expenditures and other charges (including depreciation) directly and the last-in, first-out method – LIFO). Inventory costs include expenditures and other charges (including depreciation) directly and indirectly incurred in bringing the inventory to its existing condition and location. Selling expenses and general and administrative indirectly incurred in bringing the inventory to its existing condition and location. Selling expenses and general and administrative expenses are reported as period costs and excluded from inventory cost. Inventories of materials and supplies are valued at cost or less. expenses are reported as period costs and excluded from inventory cost. Inventories of materials and supplies are valued at cost or less. Property, Plant and Equipment Property, Plant and Equipment Cost Basis. The Corporation uses the “successful efforts” method to account for its exploration and production activities. Under this Cost Basis. The Corporation uses the “successful efforts” method to account for its exploration and production activities. Under this method, costs are accumulated on a field-by-field basis. Costs incurred to purchase, lease, or otherwise acquire a property (whether method, costs are accumulated on a field-by-field basis. Costs incurred to purchase, lease, or otherwise acquire a property (whether unproved or proved) are capitalized when incurred. Exploratory well costs are carried as an asset when the well has found a sufficient unproved or proved) are capitalized when incurred. Exploratory well costs are carried as an asset when the well has found a sufficient quantity of reserves to justify its completion as a producing well and where the Corporation is making sufficient progress assessing the quantity of reserves to justify its completion as a producing well and where the Corporation is making sufficient progress assessing the reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to reserves and the economic and operating viability of the project. Exploratory well costs not meeting these criteria are charged to expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. Development expense. Other exploratory expenditures, including geophysical costs and annual lease rentals, are expensed as incurred. Development costs, including costs of productive wells and development dry holes, are capitalized. costs, including costs of productive wells and development dry holes, are capitalized. Depreciation, Depletion and Amortization. Depreciation, depletion and amortization are primarily determined under either the unit- Depreciation, Depletion and Amortization. Depreciation, depletion and amortization are primarily determined under either the unit- of-production method or the straight-line method, which is based on estimated asset service life taking obsolescence into of-production method or the straight-line method, which is based on estimated asset service life taking obsolescence into consideration. consideration. Acquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and Acquisition costs of proved properties are amortized using a unit-of-production method, computed on the basis of total proved oil and natural gas reserve volumes. Capitalized exploratory drilling and development costs associated with productive depletable extractive natural gas reserve volumes. Capitalized exploratory drilling and development costs associated with productive depletable extractive properties are amortized using the unit-of-production rates based on the amount of proved developed reserves of oil and gas that are properties are amortized using the unit-of-production rates based on the amount of proved developed reserves of oil and gas that are estimated to be recoverable from existing facilities using current operating methods. Under the unit-of-production method, oil and estimated to be recoverable from existing facilities using current operating methods. Under the unit-of-production method, oil and natural gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction natural gas volumes are considered produced once they have been measured through meters at custody transfer or sales transaction points at the outlet valve on the lease or field storage tank. points at the outlet valve on the lease or field storage tank. In the event that the unit-of-production method does not result in an equitable allocation of cost over the economic life of an upstream In the event that the unit-of-production method does not result in an equitable allocation of cost over the economic life of an upstream asset, an alternative method is used. The straight-line method is used in limited situations where the expected life of the asset does not asset, an alternative method is used. The straight-line method is used in limited situations where the expected life of the asset does not reasonably correlate with that of the underlying reserves. For example, certain assets used in the production of oil and natural gas have reasonably correlate with that of the underlying reserves. For example, certain assets used in the production of oil and natural gas have a shorter life than the reserves, and as such, the Corporation uses straight-line depreciation to ensure the asset is fully depreciated by a shorter life than the reserves, and as such, the Corporation uses straight-line depreciation to ensure the asset is fully depreciated by the end of its useful life. the end of its useful life. 76 76 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS To the extent that proved reserves for a property are substantially de-booked and that property continues to produce such that the To the extent that proved reserves for a property are substantially de-booked and that property continues to produce such that the resulting depreciation charge does not result in an equitable allocation of cost over the expected life, assets will be depreciated using a resulting depreciation charge does not result in an equitable allocation of cost over the expected life, assets will be depreciated using a unit-of-production method based on reserves determined at the most recent SEC price which results in a more meaningful quantity of unit-of-production method based on reserves determined at the most recent SEC price which results in a more meaningful quantity of proved reserves, appropriately adjusted for production and technical changes. proved reserves, appropriately adjusted for production and technical changes. Investments in refinery, chemical process, and lubes basestock manufacturing equipment are generally depreciated on a straight-line Investments in refinery, chemical process, and lubes basestock manufacturing equipment are generally depreciated on a straight-line basis over a 25-year life. Service station buildings and fixed improvements are generally depreciated over a 20-year life. Maintenance basis over a 25-year life. Service station buildings and fixed improvements are generally depreciated over a 20-year life. Maintenance and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized and the and repairs, including planned major maintenance, are expensed as incurred. Major renewals and improvements are capitalized and the assets replaced are retired. assets replaced are retired. Impairment Assessment. The Corporation tests assets or groups of assets for recoverability on an ongoing basis whenever events or Impairment Assessment. The Corporation tests assets or groups of assets for recoverability on an ongoing basis whenever events or changes in circumstances indicate that the carrying amounts may not be recoverable. Among the events or changes in circumstances changes in circumstances indicate that the carrying amounts may not be recoverable. Among the events or changes in circumstances which could indicate that the carrying value of an asset or asset group may not be recoverable are the following: which could indicate that the carrying value of an asset or asset group may not be recoverable are the following: • • • • • • • • • • • • a significant decrease in the market price of a long-lived asset; a significant decrease in the market price of a long-lived asset; a significant adverse change in the extent or manner in which an asset is being used or in its physical condition including a a significant adverse change in the extent or manner in which an asset is being used or in its physical condition including a significant decrease in current and projected reserve volumes; significant decrease in current and projected reserve volumes; a significant adverse change in legal factors or in the business climate that could affect the value, including an adverse action a significant adverse change in legal factors or in the business climate that could affect the value, including an adverse action or assessment by a regulator; or assessment by a regulator; an accumulation of project costs significantly in excess of the amount originally expected; an accumulation of project costs significantly in excess of the amount originally expected; a current-period operating loss combined with a history and forecast of operating or cash flow losses; and a current-period operating loss combined with a history and forecast of operating or cash flow losses; and a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before a current expectation that, more likely than not, a long-lived asset will be sold or otherwise disposed of significantly before the end of its previously estimated useful life. the end of its previously estimated useful life. The Corporation has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. The Corporation has a robust process to monitor for indicators of potential impairment across its asset groups throughout the year. This process is aligned with the requirements of ASC 360 and ASC 932, and relies in part on the Corporation’s planning and This process is aligned with the requirements of ASC 360 and ASC 932, and relies in part on the Corporation’s planning and budgeting cycle. Asset valuation analysis, profitability reviews and other periodic control processes assist the Corporation in assessing budgeting cycle. Asset valuation analysis, profitability reviews and other periodic control processes assist the Corporation in assessing whether events or changes in circumstances indicate the carrying amounts of any of its assets may not be recoverable. whether events or changes in circumstances indicate the carrying amounts of any of its assets may not be recoverable. Because the lifespans of the vast majority of the Corporation’s major assets are measured in decades, the future cash flows of these Because the lifespans of the vast majority of the Corporation’s major assets are measured in decades, the future cash flows of these assets are predominantly based on long-term oil and natural gas commodity prices, industry margins, and development and production assets are predominantly based on long-term oil and natural gas commodity prices, industry margins, and development and production costs. Significant reductions in the Corporation’s view of oil or natural gas commodity prices or margin ranges, especially the longer- costs. Significant reductions in the Corporation’s view of oil or natural gas commodity prices or margin ranges, especially the longer- term prices and margins, and changes in the development plans, including decisions to defer, reduce, or eliminate planned capital term prices and margins, and changes in the development plans, including decisions to defer, reduce, or eliminate planned capital spending, can be an indicator of potential impairment. Other events or changes in circumstances, can be indicators of potential spending, can be an indicator of potential impairment. Other events or changes in circumstances, can be indicators of potential impairment as well. impairment as well. In general, the Corporation does not view temporarily low prices or margins as an indication of impairment. Management believes that In general, the Corporation does not view temporarily low prices or margins as an indication of impairment. Management believes that prices over the long term must be sufficient to generate investments in energy supply to meet global demand. Although prices will prices over the long term must be sufficient to generate investments in energy supply to meet global demand. Although prices will occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand occasionally drop significantly, industry prices over the long term will continue to be driven by market supply and demand fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate fundamentals. On the supply side, industry production from mature fields is declining. This is being offset by investments to generate production from new discoveries, field developments and technology, and efficiency advancements. OPEC investment activities and production from new discoveries, field developments and technology, and efficiency advancements. OPEC investment activities and production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities, production policies also have an impact on world oil supplies. The demand side is largely a function of general economic activities, alternative energy sources and levels of prosperity. During the lifespan of its major assets, the Corporation expects that oil and gas alternative energy sources and levels of prosperity. During the lifespan of its major assets, the Corporation expects that oil and gas prices and industry margins will experience significant volatility, and consequently these assets will experience periods of higher prices and industry margins will experience significant volatility, and consequently these assets will experience periods of higher earnings and periods of lower earnings, or even losses. In assessing whether events or changes in circumstances indicate the carrying earnings and periods of lower earnings, or even losses. In assessing whether events or changes in circumstances indicate the carrying value of an asset may not be recoverable, the Corporation considers recent periods of operating losses in the context of its longer-term value of an asset may not be recoverable, the Corporation considers recent periods of operating losses in the context of its longer-term view of prices and margins. view of prices and margins. In the Upstream, the standardized measure of discounted cash flows included in the Supplemental Information on Oil and Gas In the Upstream, the standardized measure of discounted cash flows included in the Supplemental Information on Oil and Gas Exploration and Production Activities is required to use prices based on the average of first-of-month prices in the year. These prices Exploration and Production Activities is required to use prices based on the average of first-of-month prices in the year. These prices represent discrete points in time and could be higher or lower than the Corporation’s price assumptions which are used for impairment represent discrete points in time and could be higher or lower than the Corporation’s price assumptions which are used for impairment assessments. The Corporation believes the standardized measure does not provide a reliable estimate of the expected future cash flows assessments. The Corporation believes the standardized measure does not provide a reliable estimate of the expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its oil and gas reserves and to be obtained from the development and production of its oil and gas properties or of the value of its oil and gas reserves and therefore does not consider it relevant in determining whether events or changes in circumstances indicate the need for an impairment therefore does not consider it relevant in determining whether events or changes in circumstances indicate the need for an impairment assessment. assessment. 77 77 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Energy Outlook and Cash Flow Assessment. The annual planning and budgeting process, known as the Corporate Plan, is the Energy Outlook and Cash Flow Assessment. The annual planning and budgeting process, known as the Corporate Plan, is the mechanism by which resources (capital, operating expenses, and people) are allocated across the Corporation. The foundation for the mechanism by which resources (capital, operating expenses, and people) are allocated across the Corporation. The foundation for the assumptions supporting the Corporate Plan is the Energy Outlook, which contains the Corporation’s demand and supply projections assumptions supporting the Corporate Plan is the Energy Outlook, which contains the Corporation’s demand and supply projections based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, and economic based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, and economic development. Reflective of the existing global policy environment, the Energy Outlook does not project the degree of required future development. Reflective of the existing global policy environment, the Energy Outlook does not project the degree of required future policy and technology advancement and deployment for the world, or the Corporation, to meet net-zero by 2050. As future policies policy and technology advancement and deployment for the world, or the Corporation, to meet net-zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Energy Outlook, and the Corporation’s business plans will be and technology advancements emerge, they will be incorporated into the Energy Outlook, and the Corporation’s business plans will be updated accordingly. updated accordingly. If events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, the Corporation estimates the If events or changes in circumstances indicate that the carrying value of an asset may not be recoverable, the Corporation estimates the future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. In performing this future undiscounted cash flows of the affected properties to judge the recoverability of carrying amounts. In performing this assessment, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash assessment, assets are grouped at the lowest level for which there are identifiable cash flows that are largely independent of the cash flows of other groups of assets. Cash flows used in recoverability assessments are based on assumptions which are developed in the flows of other groups of assets. Cash flows used in recoverability assessments are based on assumptions which are developed in the Corporate Plan, which is reviewed and approved by the Board of Directors, and are consistent with the criteria management uses to Corporate Plan, which is reviewed and approved by the Board of Directors, and are consistent with the criteria management uses to evaluate investment opportunities. These evaluations make use of the Corporation’s assumptions of future capital allocations, crude oil evaluate investment opportunities. These evaluations make use of the Corporation’s assumptions of future capital allocations, crude oil and natural gas commodity prices including price differentials, refining and chemical margins, volumes, development and operating and natural gas commodity prices including price differentials, refining and chemical margins, volumes, development and operating costs including greenhouse gas emission prices, and foreign currency exchange rates. Volumes are based on projected field and facility costs including greenhouse gas emission prices, and foreign currency exchange rates. Volumes are based on projected field and facility production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows production profiles, throughput, or sales. Management’s estimate of upstream production volumes used for projected cash flows makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. The greenhouse gas emission prices makes use of proved reserve quantities and may include risk-adjusted unproved reserve quantities. The greenhouse gas emission prices reflect existing or anticipated policy actions that countries or localities may take in support of Paris Accord pledges. Cash flow reflect existing or anticipated policy actions that countries or localities may take in support of Paris Accord pledges. Cash flow estimates for impairment testing exclude the effects of derivative instruments. estimates for impairment testing exclude the effects of derivative instruments. Fair value of Impaired Assets. An asset group is impaired if its estimated undiscounted cash flows are less than the asset group's Fair value of Impaired Assets. An asset group is impaired if its estimated undiscounted cash flows are less than the asset group's carrying value. Impairments are measured by the amount by which the carrying value exceeds fair value. The assessment of fair value carrying value. Impairments are measured by the amount by which the carrying value exceeds fair value. The assessment of fair value is based upon the views of a likely market participant. The principal parameters used to establish fair value include estimates of is based upon the views of a likely market participant. The principal parameters used to establish fair value include estimates of acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow acreage values and flowing production metrics from comparable market transactions, market-based estimates of historical cash flow multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future multiples, and discounted cash flows. Inputs and assumptions used in discounted cash flow models include estimates of future production volumes, throughput and product sales volumes, commodity prices which are consistent with the average of third-party production volumes, throughput and product sales volumes, commodity prices which are consistent with the average of third-party industry experts and government agencies, refining and chemical margins, drilling and development costs, operating costs and industry experts and government agencies, refining and chemical margins, drilling and development costs, operating costs and discount rates which are reflective of the characteristics of the asset group. discount rates which are reflective of the characteristics of the asset group. Other Impairments Related to Property, Plant and Equipment. Unproved properties are assessed periodically to determine whether Other Impairments Related to Property, Plant and Equipment. Unproved properties are assessed periodically to determine whether they have been impaired. Significant unproved properties are assessed for impairment individually, and valuation allowances against they have been impaired. Significant unproved properties are assessed for impairment individually, and valuation allowances against the capitalized costs are recorded based on the Corporation's future development plans, the estimated economic chance of success and the capitalized costs are recorded based on the Corporation's future development plans, the estimated economic chance of success and the length of time that the Corporation expects to hold the properties. Properties that are not individually significant are aggregated by the length of time that the Corporation expects to hold the properties. Properties that are not individually significant are aggregated by groups and amortized based on development risk and average holding period. groups and amortized based on development risk and average holding period. Long-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair Long-lived assets that are held for sale are evaluated for possible impairment by comparing the carrying value of the asset with its fair value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the assets are considered impaired and adjusted value less the cost to sell. If the net book value exceeds the fair value less cost to sell, the assets are considered impaired and adjusted to the lower value. Gains on sales of proved and unproved properties are only recognized when there is neither uncertainty about the to the lower value. Gains on sales of proved and unproved properties are only recognized when there is neither uncertainty about the recovery of costs applicable to any interest retained nor any substantial obligation for future performance by the Corporation. recovery of costs applicable to any interest retained nor any substantial obligation for future performance by the Corporation. Interest costs incurred to finance expenditures during the construction phase of multiyear projects are capitalized as part of the Interest costs incurred to finance expenditures during the construction phase of multiyear projects are capitalized as part of the historical cost of acquiring the constructed assets. The project construction phase commences with the development of the detailed historical cost of acquiring the constructed assets. The project construction phase commences with the development of the detailed engineering design and ends when the constructed assets are ready for their intended use. Capitalized interest costs are included in engineering design and ends when the constructed assets are ready for their intended use. Capitalized interest costs are included in property, plant and equipment and are depreciated over the service life of the related assets. property, plant and equipment and are depreciated over the service life of the related assets. Environmental Liabilities Environmental Liabilities Liabilities for environmental costs are recorded when it is probable that obligations have been incurred and the amounts can be Liabilities for environmental costs are recorded when it is probable that obligations have been incurred and the amounts can be reasonably estimated. These liabilities are not reduced by possible recoveries from third parties, and projected cash expenditures are reasonably estimated. These liabilities are not reduced by possible recoveries from third parties, and projected cash expenditures are not discounted. not discounted. Foreign Currency Translation Foreign Currency Translation The Corporation selects the functional reporting currency for its international subsidiaries based on the currency of the primary The Corporation selects the functional reporting currency for its international subsidiaries based on the currency of the primary economic environment in which each subsidiary operates. Downstream and Chemical operations primarily use the local currency. economic environment in which each subsidiary operates. Downstream and Chemical operations primarily use the local currency. However, the U.S. dollar is used in countries with a history of high inflation (primarily in Latin America) and Singapore, which However, the U.S. dollar is used in countries with a history of high inflation (primarily in Latin America) and Singapore, which predominantly sells into the U.S. dollar export market. Upstream operations which are relatively self-contained and integrated within a predominantly sells into the U.S. dollar export market. Upstream operations which are relatively self-contained and integrated within a particular country, such as in Canada and Europe, use the local currency. Some Upstream operations, primarily in Asia and Africa, use particular country, such as in Canada and Europe, use the local currency. Some Upstream operations, primarily in Asia and Africa, use the U.S. dollar because they predominantly sell crude and natural gas production into U.S. dollar-denominated markets. the U.S. dollar because they predominantly sell crude and natural gas production into U.S. dollar-denominated markets. For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in income. For all operations, gains or losses from remeasuring foreign currency transactions into the functional currency are included in income. 78 78 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 2. Restructuring Activities 2. Restructuring Activities During 2020, ExxonMobil conducted an extensive global review of staffing levels and subsequently commenced targeted workforce During 2020, ExxonMobil conducted an extensive global review of staffing levels and subsequently commenced targeted workforce reductions within a number of countries to improve efficiency and reduce costs. The programs were completed by the end of 2021 and reductions within a number of countries to improve efficiency and reduce costs. The programs were completed by the end of 2021 and included both voluntary and involuntary employee separations as well as reductions in contractors. included both voluntary and involuntary employee separations as well as reductions in contractors. In 2021, the Corporation recorded before-tax charges of $58 million, consisting primarily of employee separation costs, associated In 2021, the Corporation recorded before-tax charges of $58 million, consisting primarily of employee separation costs, associated with announced workforce reduction programs in Singapore and Europe. These costs are captured in “Selling, general and with announced workforce reduction programs in Singapore and Europe. These costs are captured in “Selling, general and administrative expenses” on the Consolidated Statement of Income and reported within Corporate and Financing. The Corporation administrative expenses” on the Consolidated Statement of Income and reported within Corporate and Financing. The Corporation does not expect any further charges related to the previously disclosed workforce reduction programs. does not expect any further charges related to the previously disclosed workforce reduction programs. The following table summarizes the reserves and charges related to the workforce reduction programs announced in late 2020 and The following table summarizes the reserves and charges related to the workforce reduction programs announced in late 2020 and early 2021. These are recorded in “Accounts payable and accrued liabilities” on the Consolidated Balance Sheet and do not include early 2021. These are recorded in “Accounts payable and accrued liabilities” on the Consolidated Balance Sheet and do not include charges related to employee reductions associated with any portfolio changes or other projects. charges related to employee reductions associated with any portfolio changes or other projects. Beginning Balance Beginning Balance Additions/adjustments Additions/adjustments Payments made Payments made Ending Balance Ending Balance 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 403 403 58 58 (384) (384) 77 77 — — 450 450 (47) (47) 403 403 The cash outflows associated with the remaining liability balance of $77 million at December 31, 2021 will occur over the next few The cash outflows associated with the remaining liability balance of $77 million at December 31, 2021 will occur over the next few years, mainly in the form of monthly payments. years, mainly in the form of monthly payments. 79 79 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 3. Miscellaneous Financial Information 3. Miscellaneous Financial Information Research and development expenses totaled $843 million in 2021, $1,016 million in 2020, and $1,214 million in 2019. Research and development expenses totaled $843 million in 2021, $1,016 million in 2020, and $1,214 million in 2019. Net income included before-tax aggregate foreign exchange transaction losses of $18 million, $24 million and $104 million in 2021, Net income included before-tax aggregate foreign exchange transaction losses of $18 million, $24 million and $104 million in 2021, 2020 and 2019, respectively. 2020 and 2019, respectively. In 2021, 2020, and 2019, net income included gains of $54 million, $41 million, and $523 million, respectively, attributable to the In 2021, 2020, and 2019, net income included gains of $54 million, $41 million, and $523 million, respectively, attributable to the combined effects of LIFO inventory accumulations and drawdowns. The aggregate replacement cost of inventories was estimated to combined effects of LIFO inventory accumulations and drawdowns. The aggregate replacement cost of inventories was estimated to exceed their LIFO carrying values by $14.0 billion and $5.4 billion at December 31, 2021, and 2020, respectively. exceed their LIFO carrying values by $14.0 billion and $5.4 billion at December 31, 2021, and 2020, respectively. Crude oil, products and merchandise as of year-end 2021 and 2020 consist of the following: Crude oil, products and merchandise as of year-end 2021 and 2020 consist of the following: Crude oil Crude oil Petroleum products Petroleum products Chemical products Chemical products Gas/other Gas/other Total Total Dec 31, 2021 Dec 31, 2021 Dec 31, 2020 Dec 31, 2020 (millions of dollars) (millions of dollars) 4,162 4,162 5,081 5,081 3,354 3,354 1,922 1,922 14,519 14,519 5,354 5,354 5,138 5,138 3,023 3,023 654 654 14,169 14,169 Mainly as a result of declines in prices for crude oil, natural gas and petroleum products and a significant decline in its market Mainly as a result of declines in prices for crude oil, natural gas and petroleum products and a significant decline in its market capitalization at the end of the first quarter of 2020, the Corporation recognized before-tax goodwill impairment charges of capitalization at the end of the first quarter of 2020, the Corporation recognized before-tax goodwill impairment charges of $611 million in Upstream, Downstream, and Chemical reporting units. Fair value of the goodwill reporting units primarily reflected $611 million in Upstream, Downstream, and Chemical reporting units. Fair value of the goodwill reporting units primarily reflected market-based estimates of historical EBITDA multiples at the end of the first quarter. Charges related to goodwill impairments in 2020 market-based estimates of historical EBITDA multiples at the end of the first quarter. Charges related to goodwill impairments in 2020 are included in “Depreciation and depletion” on the Consolidated Statement of Income. are included in “Depreciation and depletion” on the Consolidated Statement of Income. 80 80 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 4. Other Comprehensive Income Information 4. Other Comprehensive Income Information ExxonMobil Share of Accumulated Other Comprehensive Income ExxonMobil Share of Accumulated Other Comprehensive Income Balance as of December 31, 2018 Balance as of December 31, 2018 Current period change excluding amounts reclassified from accumulated other comprehensive income Current period change excluding amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income Total change in accumulated other comprehensive income Total change in accumulated other comprehensive income Balance as of December 31, 2019 Balance as of December 31, 2019 comprehensive income (1) comprehensive income (1) Current period change excluding amounts reclassified from accumulated other Current period change excluding amounts reclassified from accumulated other Amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income Total change in accumulated other comprehensive income Total change in accumulated other comprehensive income Balance as of December 31, 2020 Balance as of December 31, 2020 comprehensive income (1) comprehensive income (1) Current period change excluding amounts reclassified from accumulated other Current period change excluding amounts reclassified from accumulated other Amounts reclassified from accumulated other comprehensive income Amounts reclassified from accumulated other comprehensive income Total change in accumulated other comprehensive income Total change in accumulated other comprehensive income Balance as of December 31, 2021 Balance as of December 31, 2021 Cumulative Foreign Cumulative Exchange Foreign Translation Exchange Adjustment Translation Adjustment Postretirement Benefits Postretirement Reserves Benefits Adjustment Reserves Adjustment (millions of dollars) (millions of dollars) (13,881) (13,881) 1,435 1,435 — — 1,435 1,435 (12,446) (12,446) (5,683) (5,683) (1,927) (1,927) 563 563 (1,364) (1,364) (7,047) (7,047) 1,818 1,818 14 14 1,832 1,832 (10,614) (10,614) (883) (883) (2) (2) (885) (885) (11,499) (11,499) 95 95 861 861 956 956 (6,091) (6,091) 2,938 2,938 888 888 3,826 3,826 (2,265) (2,265) Total Total (19,564) (19,564) (492) (492) 563 563 71 71 (19,493) (19,493) 1,913 1,913 875 875 2,788 2,788 (16,705) (16,705) 2,055 2,055 886 886 2,941 2,941 (13,764) (13,764) (1) Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $329 million and (1) Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $329 million and $(355) million in 2021 and 2020, respectively. $(355) million in 2021 and 2020, respectively. Amounts Reclassified Out of Accumulated Other Comprehensive Income - Before-tax Income/(Expense) Amounts Reclassified Out of Accumulated Other Comprehensive Income - Before-tax Income/(Expense) Foreign exchange translation gain/(loss) included in net income Foreign exchange translation gain/(loss) included in net income Amortization and settlement of postretirement benefits reserves adjustment included Amortization and settlement of postretirement benefits reserves adjustment included (Statement of Income line: Other income) (Statement of Income line: Other income) in net periodic benefit costs (Statement of Income line: Non-service pension and postretirement benefit in net periodic benefit costs expense) (Statement of Income line: Non-service pension and postretirement benefit expense) 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 2 2 (14) (14) 2019 2019 — — (1,229) (1,229) (1,158) (1,158) (751) (751) Income Tax (Expense)/Credit For Components of Other Comprehensive Income Income Tax (Expense)/Credit For Components of Other Comprehensive Income 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 118 118 109 109 (262) (262) (35) (35) (114) (114) (983) (983) (304) (304) (1,401) (1,401) 2019 2019 88 88 719 719 (169) (169) 638 638 Foreign exchange translation adjustment Foreign exchange translation adjustment Postretirement benefits reserves adjustment (excluding amortization) Postretirement benefits reserves adjustment (excluding amortization) Amortization and settlement of postretirement benefits reserves adjustment included Amortization and settlement of postretirement benefits reserves adjustment included Total Total in net periodic benefit costs in net periodic benefit costs 81 81 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 5. Cash Flow Information 5. Cash Flow Information The Consolidated Statement of Cash Flows provides information about changes in cash and cash equivalents. Highly liquid The Consolidated Statement of Cash Flows provides information about changes in cash and cash equivalents. Highly liquid investments with maturities of three months or less when acquired are classified as cash equivalents. investments with maturities of three months or less when acquired are classified as cash equivalents. For 2021, the “Net (gain)/loss on asset sales” on the Consolidated Statement of Cash Flows includes before-tax amounts from the sale For 2021, the “Net (gain)/loss on asset sales” on the Consolidated Statement of Cash Flows includes before-tax amounts from the sale of non-operated upstream assets in the United Kingdom Central and Northern North Sea and the sale of ExxonMobil's global of non-operated upstream assets in the United Kingdom Central and Northern North Sea and the sale of ExxonMobil's global Santoprene business. The United Kingdom Central and Northern North Sea assets were sold to Neo Energy, resulting in a before-tax Santoprene business. The United Kingdom Central and Northern North Sea assets were sold to Neo Energy, resulting in a before-tax gain of $0.4 billion and cash proceeds of $0.7 billion in 2021. The Santoprene business, including two chemical manufacturing sites in gain of $0.4 billion and cash proceeds of $0.7 billion in 2021. The Santoprene business, including two chemical manufacturing sites in Pensacola, Florida and Newport, Wales, was sold to Celanese, resulting in a before-tax gain of $0.8 billion and cash proceeds of Pensacola, Florida and Newport, Wales, was sold to Celanese, resulting in a before-tax gain of $0.8 billion and cash proceeds of $1.1 billion in 2021. For 2019, the “Net (gain)/loss on asset sales” line includes before-tax amounts from the sale of non-operated $1.1 billion in 2021. For 2019, the “Net (gain)/loss on asset sales” line includes before-tax amounts from the sale of non-operated upstream assets in Norway and upstream asset transactions in the U.S. The Norway assets were sold for $4.5 billion, resulting in a upstream assets in Norway and upstream asset transactions in the U.S. The Norway assets were sold for $4.5 billion, resulting in a gain of $3.7 billion and cash proceeds of $3.1 billion in 2019. gain of $3.7 billion and cash proceeds of $3.1 billion in 2019. For 2020, the “Depreciation and depletion” and “Deferred income tax charges/(credits)” on the Consolidated Statement of Cash Flows For 2020, the “Depreciation and depletion” and “Deferred income tax charges/(credits)” on the Consolidated Statement of Cash Flows include impacts from asset impairments, primarily in Upstream. include impacts from asset impairments, primarily in Upstream. Income taxes paid Income taxes paid Cash interest paid Cash interest paid Included in cash flows from operating activities Included in cash flows from operating activities Capitalized, included in cash flows from investing activities Capitalized, included in cash flows from investing activities Total cash interest paid Total cash interest paid 6. Additional Working Capital Information 6. Additional Working Capital Information Notes and accounts receivable Notes and accounts receivable Trade, less reserves of $159 million and $96 million Trade, less reserves of $159 million and $96 million Other, less reserves of $381 million and $378 million Other, less reserves of $381 million and $378 million Total Total Notes and loans payable Notes and loans payable Bank loans Bank loans Commercial paper Commercial paper Long-term debt due within one year Long-term debt due within one year Total Total 2021 2021 5,341 5,341 819 819 655 655 1,474 1,474 2020 2020 (millions of dollars) (millions of dollars) 2,428 2,428 786 786 665 665 1,451 1,451 2019 2019 7,018 7,018 560 560 731 731 1,291 1,291 Dec 31, 2021 Dec 31, 2021 Dec 31, 2020 Dec 31, 2020 (millions of dollars) (millions of dollars) 26,883 26,883 5,500 5,500 32,383 32,383 276 276 1,608 1,608 2,392 2,392 4,276 4,276 16,339 16,339 4,242 4,242 20,581 20,581 222 222 17,306 17,306 2,930 2,930 20,458 20,458 Accounts payable and accrued liabilities Accounts payable and accrued liabilities Trade payables Trade payables Payables to equity companies Payables to equity companies Accrued taxes other than income taxes Accrued taxes other than income taxes Other Other 17,499 17,499 6,476 6,476 3,408 3,408 7,838 7,838 35,221 35,221 The Corporation has short-term committed lines of credit of $10.7 billion which were unused as of December 31, 2021. These lines The Corporation has short-term committed lines of credit of $10.7 billion which were unused as of December 31, 2021. These lines are available for general corporate purposes. are available for general corporate purposes. The weighted-average interest rate on short-term borrowings outstanding was 0.2 percent and 0.2 percent at December 31, 2021, and The weighted-average interest rate on short-term borrowings outstanding was 0.2 percent and 0.2 percent at December 31, 2021, and 2020, respectively. 2020, respectively. 26,623 26,623 8,885 8,885 3,896 3,896 11,362 11,362 50,766 50,766 Total Total 82 82 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 7. Equity Company Information 7. Equity Company Information The summarized financial information below includes amounts related to certain less-than-majority-owned companies and majority- The summarized financial information below includes amounts related to certain less-than-majority-owned companies and majority- owned subsidiaries where minority shareholders possess the right to participate in significant management decisions (see Note 1). owned subsidiaries where minority shareholders possess the right to participate in significant management decisions (see Note 1). These companies are primarily engaged in oil and gas exploration and production, and natural gas marketing in North America; These companies are primarily engaged in oil and gas exploration and production, and natural gas marketing in North America; natural gas exploration, production and distribution in Europe; liquefied natural gas (LNG) operations and transportation of crude oil natural gas exploration, production and distribution in Europe; liquefied natural gas (LNG) operations and transportation of crude oil in Africa; and exploration, production, LNG operations, and the manufacture and sale of petroleum and petrochemical products in in Africa; and exploration, production, LNG operations, and the manufacture and sale of petroleum and petrochemical products in Asia and the Middle East. Also included are several refining, petrochemical manufacturing and marketing ventures. Asia and the Middle East. Also included are several refining, petrochemical manufacturing and marketing ventures. The share of total equity company revenues from sales to ExxonMobil consolidated companies was 10 percent, 11 percent and The share of total equity company revenues from sales to ExxonMobil consolidated companies was 10 percent, 11 percent and 13 percent in the years 2021, 2020 and 2019, respectively. 13 percent in the years 2021, 2020 and 2019, respectively. The Corporation’s ownership in these ventures is in the form of shares in corporate joint ventures as well as interests in partnerships. The Corporation’s ownership in these ventures is in the form of shares in corporate joint ventures as well as interests in partnerships. Differences between the company’s carrying value of an equity investment and its underlying equity in the net assets of the affiliate Differences between the company’s carrying value of an equity investment and its underlying equity in the net assets of the affiliate are assigned to the extent practicable to specific assets and liabilities based on the company’s analysis of the factors giving rise to the are assigned to the extent practicable to specific assets and liabilities based on the company’s analysis of the factors giving rise to the difference. The amortization of this difference, as appropriate, is included in “Income from equity affiliates” on the Consolidated difference. The amortization of this difference, as appropriate, is included in “Income from equity affiliates” on the Consolidated Statement of Income. Statement of Income. Impairments related to upstream equity investments of $0.2 billion and $0.6 billion in 2021 and 2020, respectively, are included in Impairments related to upstream equity investments of $0.2 billion and $0.6 billion in 2021 and 2020, respectively, are included in “Income from equity affiliates” or “Other income” on the Consolidated Statement of Income. “Income from equity affiliates” or “Other income” on the Consolidated Statement of Income. 2020 2020 2019 2019 2021 2021 Equity Company Financial Summary Equity Company Financial Summary Total Total ExxonMobil Share ExxonMobil Share Total revenues Total revenues Income before income taxes Income before income taxes Income taxes Income taxes Income from equity affiliates Income from equity affiliates Current assets Current assets Long-term assets Long-term assets Total assets Total assets Current liabilities Current liabilities Long-term liabilities Long-term liabilities Net assets Net assets 116,972 116,972 35,142 35,142 11,010 11,010 24,132 24,132 45,267 45,267 150,699 150,699 195,966 195,966 28,862 28,862 63,138 63,138 103,966 103,966 34,995 34,995 9,278 9,278 2,763 2,763 6,515 6,515 15,542 15,542 41,614 41,614 57,156 57,156 8,297 8,297 19,084 19,084 29,775 29,775 Total Total ExxonMobil Share ExxonMobil Share (millions of dollars) (millions of dollars) 69,954 69,954 12,743 12,743 4,333 4,333 8,410 8,410 21,282 21,282 2,830 2,830 870 870 1,960 1,960 33,419 33,419 150,358 150,358 183,777 183,777 18,827 18,827 66,053 66,053 98,897 98,897 11,969 11,969 41,457 41,457 53,426 53,426 5,245 5,245 19,927 19,927 28,254 28,254 Total Total ExxonMobil Share ExxonMobil Share 102,365 102,365 29,424 29,424 9,725 9,725 19,699 19,699 36,035 36,035 143,321 143,321 179,356 179,356 24,583 24,583 61,022 61,022 93,751 93,751 31,240 31,240 7,927 7,927 2,500 2,500 5,427 5,427 12,661 12,661 40,001 40,001 52,662 52,662 6,939 6,939 18,158 18,158 27,565 27,565 83 83 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A list of significant equity companies as of December 31, 2021, together with the Corporation’s percentage ownership interest, is A list of significant equity companies as of December 31, 2021, together with the Corporation’s percentage ownership interest, is detailed below: detailed below: Percentage Ownership Percentage Interest Ownership Interest 48 48 7 7 50 50 8 8 25 25 50 50 25 25 30 30 30 30 10 10 36 36 50 50 33 33 20 20 10 10 24 24 25 25 31 31 30 30 24 24 25 25 71 71 45 45 25 25 12 12 50 50 50 50 50 50 50 50 Upstream Upstream Aera Energy LLC Aera Energy LLC Barzan Gas Company Limited Barzan Gas Company Limited BEB Erdgas und Erdoel GmbH & Co. KG BEB Erdgas und Erdoel GmbH & Co. KG Caspian Pipeline Consortium Caspian Pipeline Consortium CORAL FLNG, S.A. CORAL FLNG, S.A. Cross Timbers Energy, LLC Cross Timbers Energy, LLC GasTerra B.V. GasTerra B.V. Golden Pass LNG Terminal LLC Golden Pass LNG Terminal LLC Golden Pass Pipeline LLC Golden Pass Pipeline LLC Marine Well Containment Company LLC Marine Well Containment Company LLC Mozambique Rovuma Venture, S.p.A. Mozambique Rovuma Venture, S.p.A. Nederlandse Aardolie Maatschappij B.V. Nederlandse Aardolie Maatschappij B.V. Papua New Guinea Liquefied Natural Gas Global Company LDC Papua New Guinea Liquefied Natural Gas Global Company LDC Permian Highway Pipeline LLC Permian Highway Pipeline LLC Qatar Liquefied Gas Company Limited Qatar Liquefied Gas Company Limited Qatar Liquefied Gas Company Limited (2) Qatar Liquefied Gas Company Limited (2) Ras Laffan Liquefied Natural Gas Company Limited Ras Laffan Liquefied Natural Gas Company Limited Ras Laffan Liquefied Natural Gas Company Limited (II) Ras Laffan Liquefied Natural Gas Company Limited (II) Ras Laffan Liquefied Natural Gas Company Limited (3) Ras Laffan Liquefied Natural Gas Company Limited (3) South Hook LNG Terminal Company Limited South Hook LNG Terminal Company Limited Tengizchevroil, LLP Tengizchevroil, LLP Terminale GNL Adriatico S.r.l. Terminale GNL Adriatico S.r.l. Downstream Downstream Alberta Products Pipe Line Ltd. Alberta Products Pipe Line Ltd. Fujian Refining & Petrochemical Co. Ltd. Fujian Refining & Petrochemical Co. Ltd. Permian Express Partners LLC Permian Express Partners LLC Saudi Aramco Mobil Refinery Company Ltd. Saudi Aramco Mobil Refinery Company Ltd. Chemical Chemical Al-Jubail Petrochemical Company Al-Jubail Petrochemical Company Gulf Coast Growth Ventures LLC Gulf Coast Growth Ventures LLC Saudi Yanbu Petrochemical Co. Saudi Yanbu Petrochemical Co. 84 84 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 8. Investments, Advances and Long-Term Receivables 8. Investments, Advances and Long-Term Receivables Equity method company investments and advances Equity method company investments and advances Investments Investments Advances, net of allowances of $34 million and $31 million Advances, net of allowances of $34 million and $31 million Total equity method company investments and advances Total equity method company investments and advances Equity securities carried at fair value and other investments at adjusted cost basis Equity securities carried at fair value and other investments at adjusted cost basis Long-term receivables and miscellaneous, net of reserves of $5,974 million and $6,115 million Long-term receivables and miscellaneous, net of reserves of $5,974 million and $6,115 million Total Total Dec 31, 2021 Dec 31, 2021 Dec 31, 2020 Dec 31, 2020 (millions of dollars) (millions of dollars) 31,225 31,225 8,326 8,326 39,551 39,551 138 138 5,506 5,506 45,195 45,195 29,772 29,772 8,812 8,812 38,584 38,584 143 143 4,788 4,788 43,515 43,515 9. Property, Plant and Equipment and Asset Retirement Obligations 9. Property, Plant and Equipment and Asset Retirement Obligations Property, Plant and Equipment Property, Plant and Equipment Upstream Upstream Downstream Downstream Chemical Chemical Other Other Total Total December 31, 2021 December 31, 2021 December 31, 2020 December 31, 2020 Cost Cost 375,813 375,813 57,947 57,947 43,288 43,288 18,014 18,014 495,062 495,062 (millions of dollars) (millions of dollars) Net Net 156,951 156,951 27,417 27,417 21,793 21,793 10,391 10,391 216,552 216,552 Cost Cost 386,614 386,614 57,922 57,922 42,868 42,868 17,918 17,918 505,322 505,322 Net Net 167,472 167,472 27,716 27,716 21,924 21,924 10,441 10,441 227,553 227,553 In 2021, the Corporation identified situations where events or changes in circumstances indicated that the carrying value of certain In 2021, the Corporation identified situations where events or changes in circumstances indicated that the carrying value of certain long-lived assets may not be recoverable and performed impairment assessments. Before-tax impairment charges of $1.2 billion, long-lived assets may not be recoverable and performed impairment assessments. Before-tax impairment charges of $1.2 billion, including impairments of suspended wells, were recognized during the year largely as a result of changes to Upstream development including impairments of suspended wells, were recognized during the year largely as a result of changes to Upstream development plans. plans. In 2020, as part of the Corporation's annual review and approval of its business and strategic plan, a decision was made to no longer In 2020, as part of the Corporation's annual review and approval of its business and strategic plan, a decision was made to no longer develop a significant portion of the dry gas portfolio in the U.S., Canada and Argentina. The impairment of these assets resulted in develop a significant portion of the dry gas portfolio in the U.S., Canada and Argentina. The impairment of these assets resulted in before-tax charges of $24.4 billion in Upstream. Other before-tax impairment charges in 2020 included $0.9 billion in Upstream, before-tax charges of $24.4 billion in Upstream. Other before-tax impairment charges in 2020 included $0.9 billion in Upstream, $0.5 billion in Downstream, and $0.1 billion in Chemical. In 2019, before-tax impairment charges were $0.1 billion. $0.5 billion in Downstream, and $0.1 billion in Chemical. In 2019, before-tax impairment charges were $0.1 billion. Impairment charges are primarily recognized in the lines “Depreciation and depletion” and “Exploration expenses, including dry Impairment charges are primarily recognized in the lines “Depreciation and depletion” and “Exploration expenses, including dry holes” on the Consolidated Statement of Income. Accumulated depreciation and depletion totaled $278,510 million at the end of 2021 holes” on the Consolidated Statement of Income. Accumulated depreciation and depletion totaled $278,510 million at the end of 2021 and $277,769 million at the end of 2020. and $277,769 million at the end of 2020. 85 85 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Asset Retirement Obligations Asset Retirement Obligations The Corporation incurs retirement obligations for certain assets. The fair values of these obligations are recorded as liabilities on a The Corporation incurs retirement obligations for certain assets. The fair values of these obligations are recorded as liabilities on a discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the Corporation uses discounted basis, which is typically at the time the assets are installed. In the estimation of fair value, the Corporation uses assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assumptions and judgments regarding such factors as the existence of a legal obligation for an asset retirement obligation, technical assessments of the assets, estimated amounts and timing of settlements, discount rates, and inflation rates. Asset retirement obligations assessments of the assets, estimated amounts and timing of settlements, discount rates, and inflation rates. Asset retirement obligations incurred in the current period were Level 3 fair value measurements. The costs associated with these liabilities are capitalized as part incurred in the current period were Level 3 fair value measurements. The costs associated with these liabilities are capitalized as part of the related assets and depreciated as the reserves are produced. Over time, the liabilities are accreted for the change in their present of the related assets and depreciated as the reserves are produced. Over time, the liabilities are accreted for the change in their present value. value. Asset retirement obligations for downstream and chemical facilities generally become firm at the time the facilities are permanently Asset retirement obligations for downstream and chemical facilities generally become firm at the time the facilities are permanently shut down and dismantled. These obligations may include the costs of asset disposal and additional soil remediation. However, these shut down and dismantled. These obligations may include the costs of asset disposal and additional soil remediation. However, these sites have indeterminate lives based on plans for continued operations and as such, the fair value of the conditional legal obligations sites have indeterminate lives based on plans for continued operations and as such, the fair value of the conditional legal obligations cannot be measured, since it is impossible to estimate the future settlement dates of such obligations. cannot be measured, since it is impossible to estimate the future settlement dates of such obligations. The following table summarizes the activity in the liability for asset retirement obligations: The following table summarizes the activity in the liability for asset retirement obligations: Balance at January 1 Balance at January 1 Accretion expense and other provisions Accretion expense and other provisions Reduction due to property sales Reduction due to property sales Payments made Payments made Liabilities incurred Liabilities incurred Foreign currency translation Foreign currency translation Revisions Revisions Balance at December 31 Balance at December 31 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 11,247 11,247 548 548 (1,002) (1,002) (444) (444) 42 42 (147) (147) 386 386 10,630 10,630 11,280 11,280 584 584 (77) (77) (669) (669) 26 26 239 239 (136) (136) 11,247 11,247 2019 2019 12,103 12,103 649 649 (1,085) (1,085) (827) (827) 89 89 84 84 267 267 11,280 11,280 The long-term Asset Retirement Obligations were $9,985 million and $10,558 million at December 31, 2021, and 2020, respectively, The long-term Asset Retirement Obligations were $9,985 million and $10,558 million at December 31, 2021, and 2020, respectively, and are included in “Other long-term obligations” on the Consolidated Balance Sheet. Estimated cash payments in 2022 and 2023 are and are included in “Other long-term obligations” on the Consolidated Balance Sheet. Estimated cash payments in 2022 and 2023 are $645 million and $648 million, respectively. $645 million and $648 million, respectively. 86 86 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 10. Accounting for Suspended Exploratory Well Costs 10. Accounting for Suspended Exploratory Well Costs The Corporation continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify The Corporation continues capitalization of exploratory well costs when the well has found a sufficient quantity of reserves to justify its completion as a producing well and the Corporation is making sufficient progress assessing the reserves and the economic and its completion as a producing well and the Corporation is making sufficient progress assessing the reserves and the economic and operating viability of the project. The term “project” as used in this report can refer to a variety of different activities and does not operating viability of the project. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. necessarily have the same meaning as in any government payment transparency reports. The following two tables provide details of the changes in the balance of suspended exploratory well costs as well as an aging The following two tables provide details of the changes in the balance of suspended exploratory well costs as well as an aging summary of those costs. summary of those costs. Change in capitalized suspended exploratory well costs: Change in capitalized suspended exploratory well costs: 2019 2019 2021 2021 2020 2020 Balance beginning at January 1 Balance beginning at January 1 Additions pending the determination of proved reserves Additions pending the determination of proved reserves Charged to expense Charged to expense Reclassifications to wells, facilities and equipment based on the determination of proved reserves Reclassifications to wells, facilities and equipment based on the determination of proved reserves Divestments/Other Divestments/Other Ending balance at December 31 Ending balance at December 31 Ending balance attributed to equity companies included above Ending balance attributed to equity companies included above Period end capitalized suspended exploratory well costs: Period end capitalized suspended exploratory well costs: Capitalized for a period of one year or less Capitalized for a period of one year or less Capitalized for a period of between one and five years Capitalized for a period of between one and five years Capitalized for a period of between five and ten years Capitalized for a period of between five and ten years Capitalized for a period of greater than ten years Capitalized for a period of greater than ten years Capitalized for a period greater than one year - subtotal Capitalized for a period greater than one year - subtotal Total Total (millions of dollars) (millions of dollars) 4,382 4,382 420 420 (325) (325) (328) (328) (29) (29) 4,120 4,120 306 306 4,613 4,613 208 208 (318) (318) (174) (174) 53 53 4,382 4,382 306 306 2021 2021 420 420 1,642 1,642 1,657 1,657 401 401 3,700 3,700 4,120 4,120 (millions of dollars) (millions of dollars) 2020 2020 208 208 1,828 1,828 1,932 1,932 414 414 4,174 4,174 4,382 4,382 4,160 4,160 532 532 (46) (46) (37) (37) 4 4 4,613 4,613 306 306 2019 2019 532 532 2,206 2,206 1,411 1,411 464 464 4,081 4,081 4,613 4,613 Exploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. The table below Exploration activity often involves drilling multiple wells, over a number of years, to fully evaluate a project. The table below provides a breakdown of the number of projects with only exploratory well costs capitalized for a period of one year or less and those provides a breakdown of the number of projects with only exploratory well costs capitalized for a period of one year or less and those that have had exploratory well costs capitalized for a period greater than one year. that have had exploratory well costs capitalized for a period greater than one year. Number of projects that only have exploratory well costs capitalized for a period of one year or less Number of projects that only have exploratory well costs capitalized for a period of one year or less Number of projects that have exploratory well costs capitalized for a period greater than one year Number of projects that have exploratory well costs capitalized for a period greater than one year Total Total 2021 2021 4 4 30 30 34 34 2020 2020 3 3 34 34 37 37 2019 2019 4 4 46 46 50 50 Of the 30 projects that have exploratory well costs capitalized for a period greater than one year as of December 31, 2021, 13 projects Of the 30 projects that have exploratory well costs capitalized for a period greater than one year as of December 31, 2021, 13 projects have drilling in the preceding year or exploratory activity planned in the next two years, while the remaining 17 projects are those with have drilling in the preceding year or exploratory activity planned in the next two years, while the remaining 17 projects are those with completed exploratory activity progressing toward development. completed exploratory activity progressing toward development. 87 87 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The table below provides additional detail for those 17 projects, which total $2,874 million. The table below provides additional detail for those 17 projects, which total $2,874 million. Dec. 31, 2021 Dec. 31, 2021 Years Wells Drilled / Years Wells Acquired Drilled / Acquired Country/Project Country/Project (millions of dollars) (millions of dollars) Comment Comment Argentina Argentina – La Invernada – La Invernada Australia Australia – Gorgon Area Ullage – Gorgon Area Ullage Canada Canada – Hibernia North – Hibernia North Guyana Guyana – Yellowtail – Yellowtail Kazakhstan Kazakhstan – Kairan – Kairan Mozambique Mozambique – Rovuma LNG Future Non-Straddling Train – Rovuma LNG Future Non-Straddling Train – Rovuma LNG Phase 1 – Rovuma LNG Phase 1 – Rovuma LNG Unitized Trains – Rovuma LNG Unitized Trains Nigeria Nigeria – Bonga North – Bonga North – Bonga SW – Bonga SW – Pegi – Pegi Papua New Guinea Papua New Guinea – Muruk – Muruk – Papua LNG – Papua LNG – P'nyang – P'nyang Romania Romania – Neptun Deep – Neptun Deep Tanzania Tanzania – Tanzania Block 2 – Tanzania Block 2 Vietnam Vietnam – Blue Whale – Blue Whale Total 2021 (17 projects) Total 2021 (17 projects) 2014 2014 Evaluating development plan to tie into planned infrastructure. Evaluating development plan to tie into planned infrastructure. 1994 - 2015 Evaluating development plans to tie into existing LNG facilities. 1994 - 2015 Evaluating development plans to tie into existing LNG facilities. 2019 2019 Awaiting capacity in existing/planned infrastructure. Awaiting capacity in existing/planned infrastructure. 2019 - 2020 Continuing discussions with the government regarding development plan. 2019 - 2020 Continuing discussions with the government regarding development plan. 2004 - 2007 Evaluating commercialization and field development alternatives, while continuing discussions with the government regarding the development 2004 - 2007 Evaluating commercialization and field development alternatives, while plan. continuing discussions with the government regarding the development plan. 2017 2017 2017 2017 2017 2017 Evaluating/progressing development plan to tie into planned LNG facilities. Evaluating/progressing development plan to tie into planned LNG facilities. Progressing development plan to tie into planned LNG facilities. Progressing development plan to tie into planned LNG facilities. Evaluating/progressing development plan to tie into planned LNG facilities. Evaluating/progressing development plan to tie into planned LNG facilities. 2004 - 2009 Evaluating/progressing development plan for tieback to existing/planned infrastructure. 2004 - 2009 Evaluating/progressing development plan for tieback to existing/planned infrastructure. Evaluating/progressing development plan for tieback to existing/planned infrastructure. Evaluating/progressing development plan for tieback to existing/planned infrastructure. Awaiting capacity in existing/planned infrastructure. Awaiting capacity in existing/planned infrastructure. 2001 2001 2009 2009 2017 - 2019 Evaluating/progressing development plans. 2017 - 2019 Evaluating/progressing development plans. Evaluating/progressing development plans. Evaluating/progressing development plans. 2012 - 2018 Evaluating/progressing development plans. 2012 - 2018 Evaluating/progressing development plans. 2017 2017 2012 - 2016 Continuing discussions with the government regarding development plan. 2012 - 2016 Continuing discussions with the government regarding development plan. 2012 - 2015 Evaluating development alternatives, while continuing discussions with 2012 - 2015 Evaluating development alternatives, while continuing discussions with the government regarding development plan. the government regarding development plan. 2011 - 2015 Evaluating/progressing development plans. 2011 - 2015 Evaluating/progressing development plans. 72 72 327 327 26 26 138 138 53 53 120 120 150 150 35 35 34 34 3 3 32 32 165 165 246 246 116 116 536 536 525 525 296 296 2,874 2,874 88 88 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 11. Leases 11. Leases The Corporation and its consolidated affiliates generally purchase the property, plant and equipment used in operations, but there are The Corporation and its consolidated affiliates generally purchase the property, plant and equipment used in operations, but there are situations where assets are leased, primarily for drilling equipment, tankers, office buildings, railcars, and other moveable equipment. situations where assets are leased, primarily for drilling equipment, tankers, office buildings, railcars, and other moveable equipment. Right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year by Right of use assets and lease liabilities are established on the balance sheet for leases with an expected term greater than one year by discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the discounting the amounts fixed in the lease agreement for the duration of the lease which is reasonably certain, considering the probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for probability of exercising any early termination and extension options. The portion of the fixed payment related to service costs for drilling equipment, tankers and finance leases is excluded from the calculation of right of use assets and lease liabilities. Generally, drilling equipment, tankers and finance leases is excluded from the calculation of right of use assets and lease liabilities. Generally, assets are leased only for a portion of their useful lives, and are accounted for as operating leases. In limited situations assets are leased assets are leased only for a portion of their useful lives, and are accounted for as operating leases. In limited situations assets are leased for nearly all of their useful lives, and are accounted for as finance leases. for nearly all of their useful lives, and are accounted for as finance leases. Variable payments under these lease agreements are not significant. Residual value guarantees, restrictions, or covenants related to Variable payments under these lease agreements are not significant. Residual value guarantees, restrictions, or covenants related to leases, and transactions with related parties are also not significant. In general, leases are capitalized using the incremental borrowing leases, and transactions with related parties are also not significant. In general, leases are capitalized using the incremental borrowing rate of the leasing affiliate. The Corporation’s activities as a lessor are not significant. rate of the leasing affiliate. The Corporation’s activities as a lessor are not significant. Lease Cost Lease Cost Operating Leases Operating Leases 2021 2021 1,542 1,542 1,351 1,351 2020 2020 1,553 1,553 1,613 1,613 2019 2019 (millions of dollars) (millions of dollars) 1,434 1,434 2,042 2,042 Finance Leases Finance Leases 2020 2020 2021 2021 2019 2019 Operating lease cost Operating lease cost Short-term and other (net of sublease rental income) Short-term and other (net of sublease rental income) Amortization of right of use assets Amortization of right of use assets Interest on lease liabilities Interest on lease liabilities 121 121 133 133 254 254 (1) Includes $681 million, $827 million and $1,164 million for drilling rigs and related equipment operating leases in 2021, 2020 and (1) Includes $681 million, $827 million and $1,164 million for drilling rigs and related equipment operating leases in 2021, 2020 and 143 143 169 169 312 312 133 133 158 158 291 291 Total (1) Total (1) 3,166 3,166 2,893 2,893 3,476 3,476 2019, respectively. 2019, respectively. Balance Sheet Balance Sheet Right of use assets Right of use assets Included in Other assets, including intangibles - net Included in Other assets, including intangibles - net Included in Property, plant and equipment - net Included in Property, plant and equipment - net Total right of use assets Total right of use assets Lease liability due within one year Lease liability due within one year Included in Accounts payable and accrued liabilities Included in Accounts payable and accrued liabilities Included in Notes and loans payable Included in Notes and loans payable Long-term lease liability Long-term lease liability Included in Other long-term obligations Included in Other long-term obligations Included in Long-term debt Included in Long-term debt Included in Long-term obligations to equity companies Included in Long-term obligations to equity companies Total lease liability (2) Total lease liability (2) Operating Leases Operating Leases December 31, 2021 December 31, 2021 December 31, 2020 December 31, 2020 Finance Leases Finance Leases December 31, 2021 December 31, 2021 December 31, 2020 December 31, 2020 (millions of dollars) (millions of dollars) 6,082 6,082 6,082 6,082 1,367 1,367 3,823 3,823 5,190 5,190 6,078 6,078 6,078 6,078 1,168 1,168 3,994 3,994 5,162 5,162 2,412 2,412 2,412 2,412 4 4 111 111 1,761 1,761 131 131 2,007 2,007 2,188 2,188 2,188 2,188 4 4 102 102 1,680 1,680 135 135 1,921 1,921 Weighted average remaining lease term (years) Weighted average remaining lease term (years) Weighted average discount rate (percent) Weighted average discount rate (percent) (2) Includes $935 million and $832 million for drilling rigs and related equipment operating leases in 2021 and 2020, respectively. (2) Includes $935 million and $832 million for drilling rigs and related equipment operating leases in 2021 and 2020, respectively. 7.7 % 7.7 % 2.9 % 2.9 % 2.3 % 2.3 % 11 11 20 20 10 10 20 20 8.9 % 8.9 % 89 89 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Maturity Analysis of Lease Liabilities Maturity Analysis of Lease Liabilities 2022 2022 2023 2023 2024 2024 2025 2025 2026 2026 2027 and beyond 2027 and beyond Total lease payments Total lease payments Discount to present value Discount to present value Total lease liability Total lease liability Operating Leases Operating Leases Finance Leases Finance Leases December 31, 2021 December 31, 2021 (millions of dollars) (millions of dollars) 1,456 1,456 1,141 1,141 574 574 437 437 384 384 1,978 1,978 5,970 5,970 (780) (780) 5,190 5,190 262 262 256 256 253 253 246 246 382 382 2,111 2,111 3,510 3,510 (1,503) (1,503) 2,007 2,007 In addition to the lease liabilities in the table immediately above, at December 31, 2021, undiscounted commitments for leases not yet In addition to the lease liabilities in the table immediately above, at December 31, 2021, undiscounted commitments for leases not yet commenced totaled $962 million for operating leases and $4,960 million for finance leases. Estimated cash payments for operating commenced totaled $962 million for operating leases and $4,960 million for finance leases. Estimated cash payments for operating and finance leases not yet commenced are $310 million and $415 million for 2022 and 2023 respectively. The finance leases relate to and finance leases not yet commenced are $310 million and $415 million for 2022 and 2023 respectively. The finance leases relate to floating production storage and offloading vessels, LNG transportation vessels, and a long-term hydrogen purchase agreement. The floating production storage and offloading vessels, LNG transportation vessels, and a long-term hydrogen purchase agreement. The underlying assets for these finance leases were primarily designed by, and are being constructed by, the lessors. underlying assets for these finance leases were primarily designed by, and are being constructed by, the lessors. Other Information Other Information Cash paid for amounts included in the measurement of lease liabilities Cash paid for amounts included in the measurement of lease liabilities Cash flows from operating activities Cash flows from operating activities Cash flows from investing activities Cash flows from investing activities Cash flows from financing activities Cash flows from financing activities Noncash right of use assets recorded for lease liabilities Noncash right of use assets recorded for lease liabilities For January 1 adoption of ASC 842 For January 1 adoption of ASC 842 In exchange for lease liabilities during the period In exchange for lease liabilities during the period Operating Leases Operating Leases 2020 2020 2021 2021 2019 2019 (millions of dollars) (millions of dollars) 2021 2021 Finance Leases Finance Leases 2020 2020 1,135 1,135 291 291 1,159 1,159 283 283 1,116 1,116 258 258 20 20 110 110 31 31 94 94 2019 2019 54 54 177 177 1,405 1,405 735 735 3,263 3,263 3,663 3,663 200 200 108 108 422 422 90 90 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 12. Earnings Per Share 12. Earnings Per Share 2019 Earnings per common share 2019 Earnings per common share Net income (loss) attributable to ExxonMobil (millions of dollars) 14,340 Net income (loss) attributable to ExxonMobil (millions of dollars) 14,340 Weighted average number of common shares outstanding (millions of shares) 4,270 Weighted average number of common shares outstanding (millions of shares) 4,270 Earnings (loss) per common share (dollars) (1) 3.36 Earnings (loss) per common share (dollars) (1) 3.36 Dividends paid per common share (dollars) 3.43 Dividends paid per common share (dollars) 3.43 (1) The earnings (loss) per common share and earnings (loss) per common share - assuming dilution are the same in each period (1) The earnings (loss) per common share and earnings (loss) per common share - assuming dilution are the same in each period 2020 2020 (22,440) (22,440) 4,271 4,271 (5.25) (5.25) 3.48 3.48 2021 2021 23,040 23,040 4,275 4,275 5.39 5.39 3.49 3.49 shown. shown. 91 91 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 13. Financial Instruments and Derivatives 13. Financial Instruments and Derivatives Financial Instruments. The estimated fair value of financial instruments at December 31, 2021 and December 31, 2020, and the Financial Instruments. The estimated fair value of financial instruments at December 31, 2021 and December 31, 2020, and the related hierarchy level for the fair value measurement is as follows: related hierarchy level for the fair value measurement is as follows: December 31, 2021 December 31, 2021 (millions of dollars) (millions of dollars) Assets Assets Derivative assets (1) Derivative assets (1) Advances to/receivables from equity Advances to/receivables from equity Other long-term financial assets (3) Other long-term financial assets (3) companies (2)(6) companies (2)(6) Liabilities Liabilities Derivative liabilities (4) Derivative liabilities (4) Long-term debt (5) Long-term debt (5) Long-term obligations to equity companies (6) Long-term obligations to equity companies (6) Other long-term financial liabilities (7) Other long-term financial liabilities (7) Assets Assets Derivative assets (1) Derivative assets (1) Advances to/receivables from equity Advances to/receivables from equity Other long-term financial assets (3) Other long-term financial assets (3) companies (2)(6) companies (2)(6) Fair Value Fair Value Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 1,422 1,422 — — 1,134 1,134 1,701 1,701 44,454 44,454 — — — — 1,523 1,523 3,076 3,076 — — 2,594 2,594 88 88 — — — — — — 5,373 5,373 1,058 1,058 — — 3 3 3,084 3,084 902 902 Fair Value Fair Value Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 1,247 1,247 — — 1,235 1,235 194 194 3,275 3,275 — — — — 5,904 5,904 944 944 Total Gross Assets & Total Gross Liabilities Assets & Liabilities Effect of Counterparty Effect of Netting Counterparty Netting Effect of Collateral Effect of Netting Collateral Netting Difference in Carrying Difference Value and in Carrying Fair Value Value and Fair Value Net Carrying Net Value Carrying Value 2,945 2,945 8,449 8,449 2,192 2,192 (1,930) (1,930) — — — — 4,295 4,295 44,545 44,545 3,084 3,084 902 902 (1,930) (1,930) — — — — — — December 31, 2020 December 31, 2020 (millions of dollars) (millions of dollars) (28) (28) — — — — (306) (306) — — — — — — — — (123) (123) 181 181 — — (2,878) (2,878) (227) (227) 58 58 987 987 8,326 8,326 2,373 2,373 2,059 2,059 41,667 41,667 2,857 2,857 960 960 Total Gross Assets & Total Gross Liabilities Assets & Liabilities Effect of Counterparty Effect of Netting Counterparty Netting Effect of Collateral Effect of Netting Collateral Netting Difference in Carrying Difference Value and in Carrying Fair Value Value and Fair Value Net Carrying Net Value Carrying Value 1,441 1,441 9,179 9,179 2,179 2,179 (1,282) (1,282) — — — — (6) (6) — — — — — — (367) (367) 125 125 153 153 8,812 8,812 2,304 2,304 Liabilities Liabilities 254 254 125 125 — — — — 1,443 1,443 50,263 50,263 — — — — Derivative liabilities (4) Derivative liabilities (4) Long-term debt (5) Long-term debt (5) Long-term obligations to equity companies (6) Long-term obligations to equity companies (6) Other long-term financial liabilities (7) Other long-term financial liabilities (7) — — 4 4 3,530 3,530 964 964 Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles - net Included in the Balance Sheet line: Investments, advances and long-term receivables Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles - net Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles - net Included in the Balance Sheet line: Investments, advances and long-term receivables Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles - net Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations (1) (2) (1) (3) (2) (4) (3) (5) Excluding finance lease obligations (4) (6) Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is (5) Excluding finance lease obligations calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company. (6) Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is Included in the Balance Sheet line: Other long-term obligations. Includes contingent consideration related to a prior year acquisition where fair value is based on (7) calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company. expected drilling activities and discount rates. Included in the Balance Sheet line: Other long-term obligations. Includes contingent consideration related to a prior year acquisition where fair value is based on (7) expected drilling activities and discount rates. — — (4,890) (4,890) (277) (277) 44 44 (1,282) (1,282) — — — — — — 1,697 1,697 50,392 50,392 3,530 3,530 964 964 213 213 45,502 45,502 3,253 3,253 1,008 1,008 (202) (202) — — — — — — At December 31, 2021 and December 31, 2020, the Corporation had $641 million and $504 million of collateral under master netting At December 31, 2021 and December 31, 2020, the Corporation had $641 million and $504 million of collateral under master netting arrangements not offset against the derivatives on the Consolidated Balance Sheet, primarily related to initial margin requirements. arrangements not offset against the derivatives on the Consolidated Balance Sheet, primarily related to initial margin requirements. 92 92 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Derivative Instruments. The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of the Derivative Instruments. The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the Corporation’s enterprise-wide risk from changes in commodity prices, Upstream, Downstream and Chemical businesses reduce the Corporation’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and for trading purposes. Commodity contracts held for trading purposes are presented in the Consolidated commodity price risk and for trading purposes. Commodity contracts held for trading purposes are presented in the Consolidated Statement of Income on a net basis in the line “Sales and other operating revenue”. The Corporation’s commodity derivatives are not Statement of Income on a net basis in the line “Sales and other operating revenue”. The Corporation’s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation’s financial position as of December 31, 2021 and 2020, or results of operations for 2021, 2020 and are material to the Corporation’s financial position as of December 31, 2021 and 2020, or results of operations for 2021, 2020 and 2019. 2019. Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity. that includes the authorization, reporting and monitoring of derivative activity. The net notional long/(short) position of derivative instruments at December 31, 2021 and December 31, 2020, was as follows: The net notional long/(short) position of derivative instruments at December 31, 2021 and December 31, 2020, was as follows: Crude oil (barrels) Crude oil (barrels) Petroleum products (barrels) Petroleum products (barrels) Natural gas (MMBTUs) Natural gas (MMBTUs) December 31, December 31, 2021 2021 December 31, December 31, 2020 2020 (millions) (millions) 82 82 (48) (48) (115) (115) 40 40 (46) (46) (500) (500) Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Consolidated Statement of Income are Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Consolidated Statement of Income are included in the following lines on a before-tax basis: included in the following lines on a before-tax basis: Sales and other operating revenue Sales and other operating revenue Crude oil and product purchases Crude oil and product purchases Total Total 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 404 404 (407) (407) (3) (3) (3,818) (3,818) 48 48 (3,770) (3,770) 2019 2019 (412) (412) 179 179 (233) (233) 14. Long-Term Debt 14. Long-Term Debt At December 31, 2021, long-term debt consisted of $37,611 million due in U.S. dollars and $5,817 million representing the U.S. At December 31, 2021, long-term debt consisted of $37,611 million due in U.S. dollars and $5,817 million representing the U.S. dollar equivalent at year-end exchange rates of amounts payable in foreign currencies. These amounts exclude that portion of long- dollar equivalent at year-end exchange rates of amounts payable in foreign currencies. These amounts exclude that portion of long- term debt, totaling $2,392 million, which matures within one year and is included in current liabilities. term debt, totaling $2,392 million, which matures within one year and is included in current liabilities. On December 17, 2021, the Corporation irrevocably deposited sufficient cash with the Trustee to fund the redemption of its On December 17, 2021, the Corporation irrevocably deposited sufficient cash with the Trustee to fund the redemption of its 2.397% notes due 2022. After the deposit of the funds, the Corporation was released from its obligation and the debt was extinguished. 2.397% notes due 2022. After the deposit of the funds, the Corporation was released from its obligation and the debt was extinguished. The amounts of long-term debt, excluding finance lease obligations, maturing in each of the four years after December 31, 2022, in The amounts of long-term debt, excluding finance lease obligations, maturing in each of the four years after December 31, 2022, in millions of dollars, are: 2023 – $4,039; 2024 – $3,836; 2025 – $4,597; and 2026 – $3,575. At December 31, 2021, the Corporation's millions of dollars, are: 2023 – $4,039; 2024 – $3,836; 2025 – $4,597; and 2026 – $3,575. At December 31, 2021, the Corporation's unused long-term lines of credit were $0.6 billion. unused long-term lines of credit were $0.6 billion. The Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net The Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to foreign exchange fluctuations is reported in accumulated other comprehensive income. As of December 31, 2021, the Corporation has foreign exchange fluctuations is reported in accumulated other comprehensive income. As of December 31, 2021, the Corporation has designated its $5.1 billion of Euro-denominated long-term debt and related accrued interest as a net investment hedge of its European designated its $5.1 billion of Euro-denominated long-term debt and related accrued interest as a net investment hedge of its European business. The net investment hedge is deemed to be perfectly effective. business. The net investment hedge is deemed to be perfectly effective. 93 93 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Summarized long-term debt at year-end 2021 and 2020 are shown in the table below: Summarized long-term debt at year-end 2021 and 2020 are shown in the table below: Average Rate (1) Average Rate (1) Exxon Mobil Corporation (2) Exxon Mobil Corporation (2) 2.397% notes due 2022 2.397% notes due 2022 1.902% notes due 2022 1.902% notes due 2022 Floating-rate notes due 2022 (Issued 2015) Floating-rate notes due 2022 (Issued 2015) Floating-rate notes due 2022 (Issued 2019) Floating-rate notes due 2022 (Issued 2019) 1.571% notes due 2023 1.571% notes due 2023 2.726% notes due 2023 2.726% notes due 2023 3.176% notes due 2024 3.176% notes due 2024 2.019% notes due 2024 2.019% notes due 2024 2.709% notes due 2025 2.709% notes due 2025 2.992% notes due 2025 2.992% notes due 2025 3.043% notes due 2026 3.043% notes due 2026 2.275% notes due 2026 2.275% notes due 2026 3.294% notes due 2027 3.294% notes due 2027 2.440% notes due 2029 2.440% notes due 2029 3.482% notes due 2030 3.482% notes due 2030 2.610% notes due 2030 2.610% notes due 2030 2.995% notes due 2039 2.995% notes due 2039 4.227% notes due 2040 4.227% notes due 2040 3.567% notes due 2045 3.567% notes due 2045 4.114% notes due 2046 4.114% notes due 2046 3.095% notes due 2049 3.095% notes due 2049 4.327% notes due 2050 4.327% notes due 2050 3.452% notes due 2051 3.452% notes due 2051 Exxon Mobil Corporation - Euro-denominated Exxon Mobil Corporation - Euro-denominated 0.142% notes due 2024 0.142% notes due 2024 0.524% notes due 2028 0.524% notes due 2028 0.835% notes due 2032 0.835% notes due 2032 1.408% notes due 2039 1.408% notes due 2039 XTO Energy Inc. (3) XTO Energy Inc. (3) 6.100% senior notes due 2036 6.100% senior notes due 2036 6.750% senior notes due 2037 6.750% senior notes due 2037 6.375% senior notes due 2038 6.375% senior notes due 2038 Industrial revenue bonds due 2022-2051 Industrial revenue bonds due 2022-2051 Other U.S. dollar obligations Other U.S. dollar obligations Other foreign currency obligations Other foreign currency obligations Finance lease obligations Finance lease obligations Debt issuance costs Debt issuance costs Total long-term debt Total long-term debt 0.028% 0.028% 7.438% 7.438% Dec 31, 2021 Dec 31, 2021 Dec 31, 2020 Dec 31, 2020 (millions of dollars) (millions of dollars) — — — — — — — — 2,750 2,750 1,250 1,250 1,000 1,000 1,000 1,000 1,750 1,750 2,794 2,794 2,500 2,500 1,000 1,000 1,000 1,000 1,250 1,250 2,000 2,000 2,000 2,000 750 750 2,087 2,087 1,000 1,000 2,500 2,500 1,500 1,500 2,750 2,750 2,750 2,750 1,698 1,698 1,133 1,133 1,133 1,133 1,133 1,133 191 191 291 291 226 226 2,244 2,244 64 64 37 37 1,761 1,761 (114) (114) 43,428 43,428 1,150 1,150 750 750 500 500 750 750 2,750 2,750 1,250 1,250 1,000 1,000 1,000 1,000 1,750 1,750 2,807 2,807 2,500 2,500 1,000 1,000 1,000 1,000 1,250 1,250 2,000 2,000 2,000 2,000 750 750 2,091 2,091 1,000 1,000 2,500 2,500 1,500 1,500 2,750 2,750 2,750 2,750 1,841 1,841 1,227 1,227 1,227 1,227 1,227 1,227 192 192 294 294 227 227 2,461 2,461 78 78 61 61 1,680 1,680 (131) (131) 47,182 47,182 (1) Average effective interest rate for debt and average imputed interest rate for finance leases at December 31, 2021. (1) Average effective interest rate for debt and average imputed interest rate for finance leases at December 31, 2021. (2) Includes premiums of $131 million in 2021 and $148 million in 2020. (2) Includes premiums of $131 million in 2021 and $148 million in 2020. (3) Includes premiums of $82 million in 2021 and $87 million in 2020. (3) Includes premiums of $82 million in 2021 and $87 million in 2020. 94 94 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 15. Incentive Program 15. Incentive Program The 2003 Incentive Program provides for grants of stock options, stock appreciation rights (SARs), restricted stock, and other forms of The 2003 Incentive Program provides for grants of stock options, stock appreciation rights (SARs), restricted stock, and other forms of awards. Awards may be granted to eligible employees of the Corporation and those affiliates at least 50 percent owned. Outstanding awards. Awards may be granted to eligible employees of the Corporation and those affiliates at least 50 percent owned. Outstanding awards are subject to certain forfeiture provisions contained in the program or award instrument. Options and SARs may be granted at awards are subject to certain forfeiture provisions contained in the program or award instrument. Options and SARs may be granted at prices not less than 100 percent of market value on the date of grant and have a maximum life of 10 years. The maximum number of prices not less than 100 percent of market value on the date of grant and have a maximum life of 10 years. The maximum number of shares of stock that may be issued under the 2003 Incentive Program is 220 million. Awards that are forfeited, expire, or are settled in shares of stock that may be issued under the 2003 Incentive Program is 220 million. Awards that are forfeited, expire, or are settled in cash, do not count against this maximum limit. The 2003 Incentive Program does not have a specified term. New awards may be made cash, do not count against this maximum limit. The 2003 Incentive Program does not have a specified term. New awards may be made until the available shares are depleted, unless the Board terminates the plan early. At the end of 2021, remaining shares available for until the available shares are depleted, unless the Board terminates the plan early. At the end of 2021, remaining shares available for award under the 2003 Incentive Program were 66 million. award under the 2003 Incentive Program were 66 million. Restricted Stock and Restricted Stock Units. Awards totaling 8,133 thousand, 8,681 thousand, and 8,936 thousand of restricted Restricted Stock and Restricted Stock Units. Awards totaling 8,133 thousand, 8,681 thousand, and 8,936 thousand of restricted (nonvested) common stock units were granted in 2021, 2020, and 2019, respectively. Compensation expense for these awards is based (nonvested) common stock units were granted in 2021, 2020, and 2019, respectively. Compensation expense for these awards is based on the price of the stock at the date of grant and is recognized in income over the requisite service period. Shares for these awards are on the price of the stock at the date of grant and is recognized in income over the requisite service period. Shares for these awards are issued to employees from treasury stock. The units that are settled in cash are recorded as liabilities and their changes in fair value are issued to employees from treasury stock. The units that are settled in cash are recorded as liabilities and their changes in fair value are recognized over the vesting period. During the applicable restricted periods, the shares and units may not be sold or transferred and are recognized over the vesting period. During the applicable restricted periods, the shares and units may not be sold or transferred and are subject to forfeiture. The majority of the awards have graded vesting periods, with 50 percent of the shares and units in each award subject to forfeiture. The majority of the awards have graded vesting periods, with 50 percent of the shares and units in each award vesting after three years and the remaining 50 percent vesting after seven years. Awards granted to a small number of senior vesting after three years and the remaining 50 percent vesting after seven years. Awards granted to a small number of senior executives have vesting periods of five years for 50 percent of the award and of 10 years for the remaining 50 percent of the award, executives have vesting periods of five years for 50 percent of the award and of 10 years for the remaining 50 percent of the award, except that for awards granted prior to 2020 the vesting of the 10-year portion of the award is delayed until retirement if later than 10 except that for awards granted prior to 2020 the vesting of the 10-year portion of the award is delayed until retirement if later than 10 years. years. The following tables summarize information about restricted stock and restricted stock units for the year ended December 31, 2021. The following tables summarize information about restricted stock and restricted stock units for the year ended December 31, 2021. Restricted stock and units outstanding Restricted stock and units outstanding Issued and outstanding at January 1 Issued and outstanding at January 1 Awards issued in 2021 Awards issued in 2021 Vested Vested Forfeited Forfeited Issued and outstanding at December 31 Issued and outstanding at December 31 Value of restricted stock units Value of restricted stock units Grant price (dollars) Grant price (dollars) Value at date of grant: Value at date of grant: Units settled in stock Units settled in stock Units settled in cash Units settled in cash Total value Total value 2021 2021 Weighted Average Grant-Date Weighted Average Fair Value per Share Grant-Date Fair Value per Share (dollars) (dollars) Shares Shares (thousands) (thousands) 39,585 39,585 8,753 8,753 (9,142) (9,142) (274) (274) 38,922 38,922 80.43 80.43 41.29 41.29 86.16 86.16 66.54 66.54 70.38 70.38 2021 2021 62.76 62.76 2020 2020 41.15 41.15 (millions of dollars) (millions of dollars) 325 325 32 32 357 357 461 461 49 49 510 510 2019 2019 68.77 68.77 559 559 55 55 614 614 As of December 31, 2021, there was $1,268 million of unrecognized compensation cost related to the nonvested restricted awards. As of December 31, 2021, there was $1,268 million of unrecognized compensation cost related to the nonvested restricted awards. This cost is expected to be recognized over a weighted-average period of 4.4 years. The compensation cost charged against income for This cost is expected to be recognized over a weighted-average period of 4.4 years. The compensation cost charged against income for the restricted stock and restricted stock units was $612 million, $672 million, and $741 million for 2021, 2020, and 2019, respectively. the restricted stock and restricted stock units was $612 million, $672 million, and $741 million for 2021, 2020, and 2019, respectively. The income tax benefit recognized in income related to this compensation expense was $49 million, $51 million, and $51 million for The income tax benefit recognized in income related to this compensation expense was $49 million, $51 million, and $51 million for the same periods, respectively. The fair value of shares and units vested in 2021, 2020, and 2019 was $562 million, $367 million, and the same periods, respectively. The fair value of shares and units vested in 2021, 2020, and 2019 was $562 million, $367 million, and $647 million, respectively. Cash payments of $48 million, $34 million, and $56 million for vested restricted stock units settled in cash $647 million, respectively. Cash payments of $48 million, $34 million, and $56 million for vested restricted stock units settled in cash were made in 2021, 2020, and 2019, respectively. were made in 2021, 2020, and 2019, respectively. 95 95 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 16. Litigation and Other Contingencies 16. Litigation and Other Contingencies Litigation. A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of Litigation. A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters, as well as other matters, which management believes should be disclosed. ExxonMobil will continue to defend itself vigorously in as well as other matters, which management believes should be disclosed. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a material adverse effect upon the Corporation’s operations, financial of any currently pending lawsuit against ExxonMobil will have a material adverse effect upon the Corporation’s operations, financial condition, or financial statements taken as a whole. condition, or financial statements taken as a whole. Other Contingencies. The Corporation and certain of its consolidated subsidiaries were contingently liable at December 31, 2021, for Other Contingencies. The Corporation and certain of its consolidated subsidiaries were contingently liable at December 31, 2021, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. Equity Company Obligations (1) Equity Company Obligations (1) December 31, 2021 December 31, 2021 Other Third-Party Obligations Other Third-Party Obligations (millions of dollars) (millions of dollars) Total Total 1,109 1,109 775 775 1,884 1,884 140 140 6,498 6,498 6,638 6,638 1,249 1,249 7,273 7,273 8,522 8,522 Guarantees Guarantees Debt-related Debt-related Other Other Total Total (1) ExxonMobil share. (1) ExxonMobil share. Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. condition. The Corporation has previously provided disclosure regarding (i) claims being pursued by the Corporation against the Venezuelan The Corporation has previously provided disclosure regarding (i) claims being pursued by the Corporation against the Venezuelan National Oil Company in connection with a 2007 Venezuelan nationalization decree, and (ii) claims being pursued by the Corporation National Oil Company in connection with a 2007 Venezuelan nationalization decree, and (ii) claims being pursued by the Corporation against the Nigerian National Petroleum Corporation in connection with a dispute involving crude oil lifting entitlements which was against the Nigerian National Petroleum Corporation in connection with a dispute involving crude oil lifting entitlements which was originally subject to arbitration in 2011. Both matters remain ongoing but, as previously disclosed, the Corporation does not expect the originally subject to arbitration in 2011. Both matters remain ongoing but, as previously disclosed, the Corporation does not expect the ultimate resolution of either matter to have a material effect upon the Corporation’s operations or financial condition. In the interest of ultimate resolution of either matter to have a material effect upon the Corporation’s operations or financial condition. In the interest of disclosure simplification, the Corporation will no longer include specific disclosure of these matters in its annual or quarterly reports disclosure simplification, the Corporation will no longer include specific disclosure of these matters in its annual or quarterly reports unless future developments alter the foregoing conclusions. unless future developments alter the foregoing conclusions. 96 96 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 17. Pension and Other Postretirement Benefits 17. Pension and Other Postretirement Benefits The benefit obligations and plan assets associated with the Corporation’s principal benefit plans are measured on December 31. The benefit obligations and plan assets associated with the Corporation’s principal benefit plans are measured on December 31. Weighted-average assumptions used to determine benefit Weighted-average assumptions used to determine benefit obligations at December 31 obligations at December 31 Discount rate Discount rate Long-term rate of compensation increase Long-term rate of compensation increase Change in benefit obligation Change in benefit obligation Benefit obligation at January 1 Benefit obligation at January 1 Service cost Service cost Interest cost Interest cost Actuarial loss/(gain) (1) Actuarial loss/(gain) (1) Benefits paid (2) (3) Benefits paid (2) (3) Foreign exchange rate changes Foreign exchange rate changes Amendments, divestments and other Amendments, divestments and other Benefit obligation at December 31 Benefit obligation at December 31 Accumulated benefit obligation at December 31 Accumulated benefit obligation at December 31 U.S. U.S. 2021 2021 Pension Benefits Pension Benefits 2020 2020 2021 2021 Non-U.S. Non-U.S. (percent) (percent) 2020 2020 3.00 3.00 4.50 4.50 2.80 2.80 5.50 5.50 2.20 2.20 4.20 4.20 1.60 1.60 4.20 4.20 (millions of dollars) (millions of dollars) 21,662 21,662 919 919 558 558 (747) (747) (3,810) (3,810) — — (71) (71) 20,959 20,959 965 965 708 708 1,287 1,287 (1,987) (1,987) — — (270) (270) 18,511 18,511 15,781 15,781 21,662 21,662 17,502 17,502 33,626 33,626 774 774 526 526 (2,803) (2,803) (1,550) (1,550) (1,162) (1,162) 81 81 29,492 29,492 27,373 27,373 29,918 29,918 707 707 657 657 2,344 2,344 (1,317) (1,317) 1,375 1,375 (58) (58) 33,626 33,626 30,952 30,952 Other Postretirement Other Postretirement Benefits Benefits 2021 2021 2020 2020 3.10 3.10 4.50 4.50 2.80 2.80 5.50 5.50 8,135 8,135 188 188 221 221 (881) (881) (517) (517) 3 3 116 116 7,265 7,265 — — 8,113 8,113 181 181 277 277 (66) (66) (510) (510) 23 23 117 117 8,135 8,135 — — (1) Actuarial loss/(gain) primarily reflects changes in discount rates, lower long-term rates of compensation and a lower health care (1) Actuarial loss/(gain) primarily reflects changes in discount rates, lower long-term rates of compensation and a lower health care (2) Benefit payments for funded and unfunded plans. (2) Benefit payments for funded and unfunded plans. (3) For 2021 and 2020, other postretirement benefits paid are net of $9 million and $16 million of Medicare subsidy receipts, (3) For 2021 and 2020, other postretirement benefits paid are net of $9 million and $16 million of Medicare subsidy receipts, cost trend rate. cost trend rate. respectively. respectively. For selection of the discount rate for U.S. plans, several sources of information are considered, including interest rate market For selection of the discount rate for U.S. plans, several sources of information are considered, including interest rate market indicators and the effective discount rate determined by use of a yield curve based on high-quality, noncallable bonds applied to the indicators and the effective discount rate determined by use of a yield curve based on high-quality, noncallable bonds applied to the estimated cash outflows for benefit payments. For major non-U.S. plans, the discount rate is determined by using a spot yield curve of estimated cash outflows for benefit payments. For major non-U.S. plans, the discount rate is determined by using a spot yield curve of high-quality, local-currency-denominated bonds at an average maturity approximating that of the liabilities. high-quality, local-currency-denominated bonds at an average maturity approximating that of the liabilities. The measurement of the accumulated postretirement benefit obligation assumes a health care cost trend rate of 4.0 percent in 2023 and The measurement of the accumulated postretirement benefit obligation assumes a health care cost trend rate of 4.0 percent in 2023 and subsequent years. subsequent years. Change in plan assets Change in plan assets Fair value at January 1 Fair value at January 1 Actual return on plan assets Actual return on plan assets Foreign exchange rate changes Foreign exchange rate changes Company contribution Company contribution Benefits paid (1) Benefits paid (1) Other Other Fair value at December 31 Fair value at December 31 (1) Benefit payments for funded plans. (1) Benefit payments for funded plans. Pension Benefits Pension Benefits U.S. U.S. 2021 2021 2020 2020 Non-U.S. Non-U.S. 2020 2021 2021 2020 (millions of dollars) (millions of dollars) Other Postretirement Other Postretirement Benefits Benefits 2021 2021 2020 2020 15,300 15,300 479 479 — — 794 794 (3,307) (3,307) — — 13,266 13,266 13,636 13,636 2,269 2,269 — — 1,004 1,004 (1,609) (1,609) — — 15,300 15,300 26,216 26,216 571 571 (605) (605) 293 293 (1,167) (1,167) (428) (428) 22,916 22,916 2,795 2,795 1,011 1,011 597 597 (992) (992) (111) (111) 24,880 24,880 26,216 26,216 446 446 20 20 — — 28 28 (54) (54) — — 440 440 425 425 42 42 — — 37 37 (58) (58) — — 446 446 97 97 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The funding levels of all qualified pension plans are in compliance with standards set by applicable law or regulation. As shown in the The funding levels of all qualified pension plans are in compliance with standards set by applicable law or regulation. As shown in the table below, certain smaller U.S. pension plans and a number of non-U.S. pension plans are not funded because local applicable tax table below, certain smaller U.S. pension plans and a number of non-U.S. pension plans are not funded because local applicable tax rules and regulatory practices do not encourage funding of these plans. All defined benefit pension obligations, regardless of the rules and regulatory practices do not encourage funding of these plans. All defined benefit pension obligations, regardless of the funding status of the underlying plans, are fully supported by the financial strength of the Corporation or the respective sponsoring funding status of the underlying plans, are fully supported by the financial strength of the Corporation or the respective sponsoring affiliate. affiliate. Assets in excess of/(less than) benefit obligation Assets in excess of/(less than) benefit obligation Balance at December 31 Balance at December 31 Funded plans Funded plans Unfunded plans Unfunded plans Total Total U.S. U.S. 2021 2021 Pension Benefits Pension Benefits 2021 2020 2020 2021 (millions of dollars) (millions of dollars) Non-U.S. Non-U.S. 2020 2020 (3,570) (3,570) (1,675) (1,675) (5,245) (5,245) (4,156) (4,156) (2,206) (2,206) (6,362) (6,362) 554 554 (5,166) (5,166) (4,612) (4,612) (1,223) (1,223) (6,187) (6,187) (7,410) (7,410) The authoritative guidance for defined benefit pension and other postretirement plans requires an employer to recognize the The authoritative guidance for defined benefit pension and other postretirement plans requires an employer to recognize the overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position overfunded or underfunded status of a defined benefit postretirement plan as an asset or liability in its statement of financial position and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income. and to recognize changes in that funded status in the year in which the changes occur through other comprehensive income. Assets in excess of/(less than) benefit obligation Assets in excess of/(less than) benefit obligation Balance at December 31 (1) Balance at December 31 (1) Amounts recorded in the consolidated Amounts recorded in the consolidated balance sheet consist of: balance sheet consist of: Other assets Other assets Current liabilities Current liabilities Postretirement benefits reserves Postretirement benefits reserves Total recorded Total recorded Amounts recorded in accumulated other comprehensive income consist of: Amounts recorded in accumulated other comprehensive income consist of: Net actuarial loss/(gain) Net actuarial loss/(gain) Prior service cost Prior service cost comprehensive income comprehensive income Total recorded in accumulated other Total recorded in accumulated other (1) Fair value of assets less benefit obligation shown on the preceding page. (1) Fair value of assets less benefit obligation shown on the preceding page. Pension Benefits Pension Benefits U.S. U.S. 2021 2021 2020 2020 Non-U.S. Non-U.S. 2020 2021 2021 2020 (millions of dollars) (millions of dollars) Other Postretirement Benefits Other Postretirement Benefits 2021 2021 2020 2020 (5,245) (5,245) (6,362) (6,362) (4,612) (4,612) (7,410) (7,410) (6,825) (6,825) (7,689) (7,689) — — (206) (206) (5,039) (5,039) (5,245) (5,245) — — (377) (377) (5,985) (5,985) (6,362) (6,362) 2,544 2,544 (267) (267) (6,889) (6,889) (4,612) (4,612) 1,931 1,931 (273) (273) (9,068) (9,068) (7,410) (7,410) — — (323) (323) (6,502) (6,502) (6,825) (6,825) — — (327) (327) (7,362) (7,362) (7,689) (7,689) 1,865 1,865 (324) (324) 1,541 1,541 3,102 3,102 (275) (275) 2,827 2,827 2,841 2,841 262 262 3,103 3,103 5,904 5,904 208 208 6,112 6,112 197 197 (232) (232) (35) (35) 1,164 1,164 (274) (274) 890 890 98 98 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The long-term expected rate of return on funded assets shown below is established for each benefit plan by developing a forward- The long-term expected rate of return on funded assets shown below is established for each benefit plan by developing a forward- looking, long-term return assumption for each asset class, taking into account factors such as the expected real return for the specific looking, long-term return assumption for each asset class, taking into account factors such as the expected real return for the specific asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation asset class and inflation. A single, long-term rate of return is then calculated as the weighted average of the target asset allocation percentages and the long-term return assumption for each asset class. percentages and the long-term return assumption for each asset class. Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 Weighted-average assumptions used to determine net periodic benefit cost for years ended December 31 Discount rate Discount rate Long-term rate of return on funded assets Long-term rate of return on funded assets Long-term rate of compensation increase Long-term rate of compensation increase U.S. U.S. 2020 2020 3.50 3.50 5.30 5.30 5.75 5.75 2021 2021 2.80 2.80 5.30 5.30 5.50 5.50 Pension Benefits Pension Benefits 2019 2019 2021 2021 4.40 4.40 5.30 5.30 5.75 5.75 1.60 1.60 4.10 4.10 4.20 4.20 Non-U.S. Non-U.S. 2020 2020 (percent) (percent) 2.30 2.30 4.10 4.10 4.80 4.80 Other Postretirement Benefits Other Postretirement Benefits 2019 2020 2019 2020 2021 2021 2019 2019 3.00 3.00 4.10 4.10 4.30 4.30 2.80 2.80 4.60 4.60 5.50 5.50 3.50 3.50 4.60 4.60 5.75 5.75 4.40 4.40 4.60 4.60 5.75 5.75 Components of net periodic benefit cost Components of net periodic benefit cost Service cost Service cost Interest cost Interest cost Expected return on plan assets Expected return on plan assets Amortization of actuarial loss/(gain) Amortization of actuarial loss/(gain) Amortization of prior service cost Amortization of prior service cost Net pension enhancement and curtailment/ Net pension enhancement and curtailment/ settlement cost settlement cost Net periodic benefit cost Net periodic benefit cost Changes in amounts recorded in accumulated other Changes in amounts recorded in accumulated other comprehensive income: comprehensive income: Net actuarial loss/(gain) Net actuarial loss/(gain) Amortization of actuarial (loss)/gain Amortization of actuarial (loss)/gain Prior service cost/(credit) Prior service cost/(credit) Amortization of prior service (cost)/credit Amortization of prior service (cost)/credit Foreign exchange rate changes Foreign exchange rate changes Total recorded in other comprehensive income Total recorded in other comprehensive income Total recorded in net periodic benefit cost and other Total recorded in net periodic benefit cost and other comprehensive income, before tax comprehensive income, before tax 965 965 708 708 919 919 558 558 (722) (703) (722) (703) 244 244 (23) (23) 310 310 5 5 280 280 1,565 1,565 489 489 1,465 1,465 774 774 526 526 (millions of dollars) (millions of dollars) 707 707 657 657 757 757 766 766 (568) (1,031) (897) (568) (1,031) (897) 305 305 5 5 164 164 1,429 1,429 420 420 57 57 32 32 778 778 416 416 68 68 49 49 1,000 1,000 188 188 221 221 551 551 763 763 (777) (777) 306 306 56 56 (98) — (98) — 424 801 424 801 (19) (19) 76 76 (42) (42) 181 181 277 277 (18) (18) 95 95 (42) (42) — — 493 493 139 139 315 315 (15) (15) 55 55 (42) (42) — — 452 452 (504) (279) (504) (279) (733) (590) (733) (590) (5) (5) (72) (271) — (72) (271) — 23 23 — — (1,286) (1,145) (1,286) (1,145) 179 179 — — 135 135 1,564 1,564 — — 420 420 (2,361) 446 (2,361) 446 609 609 (469) (430) (442) (469) (430) (442) (82) 92 (82) 92 (68) (55) (68) (55) (5) (5) (255) 236 (255) 236 90 (3,009) (3,009) 90 (2,231) 1,090 (2,231) 1,090 1,268 1,268 (208) (208) 379 379 (56) (56) 19 19 1,402 1,402 2,203 2,203 (891) (891) (76) (76) (92) 517 (92) 517 (55) (95) (55) (95) — — — — 42 42 42 42 — — — — (925) (134) 504 (925) (134) 504 956 (501) 359 956 (501) 359 — — 42 42 11 11 Costs for defined contribution plans were $177 million, $358 million and $422 million in 2021, 2020 and 2019, respectively. Costs for defined contribution plans were $177 million, $358 million and $422 million in 2021, 2020 and 2019, respectively. 99 99 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A summary of the change in accumulated other comprehensive income is shown in the table below: A summary of the change in accumulated other comprehensive income is shown in the table below: (Charge)/credit to other comprehensive income, before tax (Charge)/credit to other comprehensive income, before tax U.S. pension U.S. pension Non-U.S. pension Non-U.S. pension Other postretirement benefits Other postretirement benefits Total (charge)/credit to other comprehensive income, before tax Total (charge)/credit to other comprehensive income, before tax (Charge)/credit to income tax (see Note 4) (Charge)/credit to income tax (see Note 4) (Charge)/credit to investment in equity companies (Charge)/credit to investment in equity companies (Charge)/credit to other comprehensive income including noncontrolling interests, (Charge)/credit to other comprehensive income including noncontrolling interests, Charge/(credit) to equity of noncontrolling interests Charge/(credit) to equity of noncontrolling interests (Charge)/credit to other comprehensive income attributable to ExxonMobil (Charge)/credit to other comprehensive income attributable to ExxonMobil after tax after tax Total Pension and Other Postretirement Benefits Total Pension and Other Postretirement Benefits 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 2019 2019 1,286 1,286 3,009 3,009 925 925 5,220 5,220 (1,287) (1,287) 110 110 4,043 4,043 (217) (217) 3,826 3,826 1,145 1,145 (90) (90) 134 134 1,189 1,189 (153) (153) (110) (110) 926 926 30 30 956 956 (135) (135) (1,402) (1,402) (504) (504) (2,041) (2,041) 550 550 (19) (19) (1,510) (1,510) 146 146 (1,364) (1,364) The Corporation’s investment strategy for benefit plan assets reflects a long-term view, a careful assessment of the risks inherent in The Corporation’s investment strategy for benefit plan assets reflects a long-term view, a careful assessment of the risks inherent in plan assets and liabilities and broad diversification to reduce the risk of the portfolio. The benefit plan assets are primarily invested in plan assets and liabilities and broad diversification to reduce the risk of the portfolio. The benefit plan assets are primarily invested in passive global equity and local currency fixed income index funds to diversify risk while minimizing costs. The equity funds hold passive global equity and local currency fixed income index funds to diversify risk while minimizing costs. The equity funds hold ExxonMobil stock only to the extent necessary to replicate the relevant equity index. The fixed income funds are largely invested in ExxonMobil stock only to the extent necessary to replicate the relevant equity index. The fixed income funds are largely invested in investment grade corporate and government debt securities with interest rate sensitivity designed to approximate the interest rate investment grade corporate and government debt securities with interest rate sensitivity designed to approximate the interest rate sensitivity of plan liabilities. sensitivity of plan liabilities. Target asset allocations for benefit plans are reviewed periodically and set based on considerations such as risk, diversification, Target asset allocations for benefit plans are reviewed periodically and set based on considerations such as risk, diversification, liquidity and funding level. The target asset allocations for the major benefit plans range from 10 to 30 percent in equity securities and liquidity and funding level. The target asset allocations for the major benefit plans range from 10 to 30 percent in equity securities and the remainder in fixed income securities. The equity for the U.S. and certain non-U.S. plans include allocations to private equity the remainder in fixed income securities. The equity for the U.S. and certain non-U.S. plans include allocations to private equity partnerships that primarily focus on early-stage venture capital of less than 5 percent. partnerships that primarily focus on early-stage venture capital of less than 5 percent. The fair value measurement levels are accounting terms that refer to different methods of valuing assets. The terms do not represent The fair value measurement levels are accounting terms that refer to different methods of valuing assets. The terms do not represent the relative risk or credit quality of an investment. the relative risk or credit quality of an investment. 100 100 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The 2021 fair value of the benefit plan assets, including the level within the fair value hierarchy, is shown in the tables below: The 2021 fair value of the benefit plan assets, including the level within the fair value hierarchy, is shown in the tables below: U.S. Pension U.S. Pension Fair Value Measurement at December 31, 2021, Using: Fair Value Measurement at December 31, 2021, Using: Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 Net Asset Net Value Asset Value Non-U.S. Pension Non-U.S. Pension Fair Value Measurement at December 31, 2021, Using: Fair Value Measurement at December 31, 2021, Using: Level 1 Level 1 Total Total (millions of dollars) (millions of dollars) Level 2 Level 2 Level 3 Level 3 Net Asset Net Value Asset Value Total Total — — — — — — — — — — — — — — — — — — — — — — 5,242 (2) 5,242 (2) 3,945 (2) 3,945 (2) — — — — 9,187 9,187 — — — — — — — — — — — — — — — — 1,956 1,956 1,290 1,290 661 661 1 1 2 2 1 1 162 162 4,073 4,073 1,956 1,956 1,290 1,290 661 661 5,243 5,243 3,947 3,947 1 1 162 162 13,260 13,260 6 6 13,266 13,266 — — 76 (1) 76 (1) — — — — 209 (3) 209 (3) — — 62 62 347 347 — — — — — — 119 (2) 119 (2) 97 (2) 97 (2) 25 (2) 25 (2) 53 (4) 53 (4) 294 294 — — — — — — — — — — — — — — — — 3,416 3,416 2,424 2,424 627 627 5,831 5,831 11,620 11,620 191 191 108 108 24,217 24,217 3,416 3,416 2,500 2,500 627 627 5,950 5,950 11,926 11,926 216 216 223 223 24,858 24,858 22 22 24,880 24,880 Asset category: Asset category: Equity securities Equity securities U.S. U.S. Non-U.S. Non-U.S. Private equity Private equity Debt securities Debt securities Corporate Corporate Government Government Asset-backed Asset-backed Cash Cash Total at fair value Total at fair value Insurance contracts at contract value Insurance contracts at contract value Total plan assets Total plan assets (1) For non-U.S. equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (1) For non-U.S. equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market (3) For government debt securities that are traded on active exchanges, fair value is based on observable quoted prices. (3) For government debt securities that are traded on active exchanges, fair value is based on observable quoted prices. (4) For cash balances that are subject to withdrawal penalties or other adjustments, the fair value is treated as a Level 2 input. (4) For cash balances that are subject to withdrawal penalties or other adjustments, the fair value is treated as a Level 2 input. transactions. transactions. Asset category: Asset category: Equity securities Equity securities U.S. U.S. Non-U.S. Non-U.S. Debt securities Debt securities Corporate Corporate Government Government Asset-backed Asset-backed Cash Cash Total at fair value Total at fair value Fair Value Measurement at December 31, 2021, Using: Fair Value Measurement at December 31, 2021, Using: Other Postretirement Other Postretirement Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 (millions of dollars) (millions of dollars) Net Asset Value Net Asset Value 91 (1) 91 (1) 45 (1) 45 (1) — — — — — — — — 136 136 — — — — 95 (2) 95 (2) 206 (2) 206 (2) — — 3 3 304 304 — — — — — — — — — — — — — — — — — — — — — — — — — — — — Total Total 91 91 45 45 95 95 206 206 — — 3 3 440 440 (1) For equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (1) For equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions. transactions. 101 101 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The 2020 fair value of the benefit plan assets, including the level within the fair value hierarchy, is shown in the tables below: The 2020 fair value of the benefit plan assets, including the level within the fair value hierarchy, is shown in the tables below: U.S. Pension U.S. Pension Fair Value Measurement at December 31, 2020, Using: Fair Value Measurement at December 31, 2020, Using: Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 Non-U.S. Pension Non-U.S. Pension Fair Value Measurement at December 31, 2020, Using: Fair Value Measurement at December 31, 2020, Using: Level 3 Level 3 Level 2 Level 2 Level 1 Level 1 Total Total (millions of dollars) (millions of dollars) Net Asset Net Value Asset Value Net Asset Net Value Asset Value Total Total — — — — — — — — — — — — — — — — — — — — — — 5,146 (2) 5,146 (2) 5,261 (2) 5,261 (2) — — — — 10,407 10,407 — — — — — — — — — — — — — — — — 2,323 2,323 1,703 1,703 548 548 1 1 2 2 1 1 308 308 4,886 4,886 2,323 2,323 1,703 1,703 548 548 5,147 5,147 5,263 5,263 1 1 308 308 15,293 15,293 7 7 15,300 15,300 — — — — 89 (1) 89 (1) — — 250 (3) 250 (3) — — 69 69 408 408 — — — — — — 138 (2) 138 (2) 116 (2) 116 (2) 24 (2) 24 (2) 21 (4) 21 (4) 299 299 — — — — — — — — — — — — — — — — 4,177 4,177 3,285 3,285 530 530 5,212 5,212 11,993 11,993 239 239 50 50 25,486 25,486 4,177 4,177 3,374 3,374 530 530 5,350 5,350 12,359 12,359 263 263 140 140 26,193 26,193 23 23 26,216 26,216 Asset category: Asset category: Equity securities Equity securities U.S. U.S. Non-U.S. Non-U.S. Private equity Private equity Debt securities Debt securities Corporate Corporate Government Government Asset-backed Asset-backed Cash Cash Total at fair value Total at fair value Insurance contracts at contract value Insurance contracts at contract value Total plan assets Total plan assets (1) For non-U.S. equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (1) For non-U.S. equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market (3) For government debt securities that are traded on active exchanges, fair value is based on observable quoted prices. (3) For government debt securities that are traded on active exchanges, fair value is based on observable quoted prices. (4) For cash balances that are subject to withdrawal penalties or other adjustments, the fair value is treated as a Level 2 input. (4) For cash balances that are subject to withdrawal penalties or other adjustments, the fair value is treated as a Level 2 input. transactions. transactions. Asset category: Asset category: Equity securities Equity securities U.S. U.S. Non-U.S. Non-U.S. Debt securities Debt securities Corporate Corporate Government Government Asset-backed Asset-backed Cash Cash Total at fair value Total at fair value Other Postretirement Other Postretirement Fair Value Measurement at December 31, 2020, Using: Fair Value Measurement at December 31, 2020, Using: Level 1 Level 1 Level 2 Level 2 Level 3 Level 3 (millions of dollars) (millions of dollars) Net Asset Value Net Asset Value 88 (1) 88 (1) 48 (1) 48 (1) — — — — — — — — 136 136 — — — — 103 (2) 103 (2) 204 (2) 204 (2) — — — — 307 307 — — — — — — — — — — — — — — — — — — — — — — — — 3 3 3 3 Total Total 88 88 48 48 103 103 204 204 — — 3 3 446 446 (1) For equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (1) For equity securities held in separate accounts, fair value is based on observable quoted prices on active exchanges. (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market (2) For corporate, government and asset-backed debt securities, fair value is based on observable inputs of comparable market transactions. transactions. 102 102 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS A summary of pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets is shown A summary of pension plans with an accumulated benefit obligation and projected benefit obligation in excess of plan assets is shown in the table below: in the table below: For funded pension plans with an accumulated benefit obligation For funded pension plans with an accumulated benefit obligation in excess of plan assets: in excess of plan assets: Accumulated benefit obligation Accumulated benefit obligation Fair value of plan assets Fair value of plan assets For funded pension plans with a projected benefit obligation For funded pension plans with a projected benefit obligation in excess of plan assets: in excess of plan assets: Projected benefit obligation Projected benefit obligation Fair value of plan assets Fair value of plan assets For unfunded pension plans: For unfunded pension plans: Projected benefit obligation Projected benefit obligation Accumulated benefit obligation Accumulated benefit obligation All other postretirement benefit plans are unfunded or underfunded. All other postretirement benefit plans are unfunded or underfunded. U.S. U.S. 2021 2021 14,511 14,511 13,266 13,266 16,836 16,836 13,266 13,266 1,675 1,675 1,270 1,270 Pension Benefits Pension Benefits 2020 2020 (millions of dollars) (millions of dollars) Non-U.S. Non-U.S. 2020 2020 2021 2021 16,129 16,129 15,300 15,300 19,456 19,456 15,300 15,300 2,206 2,206 1,373 1,373 3,108 3,108 1,711 1,711 4,840 4,840 2,849 2,849 5,166 5,166 4,685 4,685 4,602 4,602 2,652 2,652 13,836 13,836 10,681 10,681 6,187 6,187 5,469 5,469 Pension Benefits Pension Benefits U.S. U.S. Non-U.S. Non-U.S. Other Postretirement Benefits Other Postretirement Benefits Medicare Subsidy Receipt Medicare Subsidy Receipt Gross Gross (millions of dollars) (millions of dollars) Contributions expected in 2022 Contributions expected in 2022 Benefit payments expected in: Benefit payments expected in: 2022 2022 2023 2023 2024 2024 2025 2025 2026 2026 2027 - 2031 2027 - 2031 640 640 1,306 1,306 1,188 1,188 1,179 1,179 1,157 1,157 1,154 1,154 5,803 5,803 405 405 1,173 1,173 1,176 1,176 1,205 1,205 1,173 1,173 1,155 1,155 6,145 6,145 — — 423 423 414 414 409 409 405 405 396 396 1,981 1,981 — — 21 21 22 22 23 23 24 24 25 25 132 132 18. Disclosures about Segments and Related Information 18. Disclosures about Segments and Related Information The Upstream, Downstream and Chemical functions best define the operating segments of the business that are reported separately. The Upstream, Downstream and Chemical functions best define the operating segments of the business that are reported separately. The factors used to identify these reportable segments are based on the nature of the operations that are undertaken by each segment. The factors used to identify these reportable segments are based on the nature of the operations that are undertaken by each segment. The Upstream segment is organized and operates to explore for and produce crude oil and natural gas. The Downstream segment is The Upstream segment is organized and operates to explore for and produce crude oil and natural gas. The Downstream segment is organized and operates to manufacture and sell petroleum products. The Chemical segment is organized and operates to manufacture organized and operates to manufacture and sell petroleum products. The Chemical segment is organized and operates to manufacture and sell petrochemicals. These segments are broadly understood across the petroleum and petrochemical industries. and sell petrochemicals. These segments are broadly understood across the petroleum and petrochemical industries. These functions have been defined as the operating segments of the Corporation because they are the segments (1) that engage in These functions have been defined as the operating segments of the Corporation because they are the segments (1) that engage in business activities from which revenues are recognized and expenses are incurred; (2) whose operating results are regularly reviewed business activities from which revenues are recognized and expenses are incurred; (2) whose operating results are regularly reviewed by the Corporation’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its by the Corporation’s chief operating decision maker to make decisions about resources to be allocated to the segment and to assess its performance; and (3) for which discrete financial information is available. performance; and (3) for which discrete financial information is available. Earnings after income tax include transfers at estimated market prices. Earnings after income tax include transfers at estimated market prices. In Corporate and Financing, interest revenue relates to interest earned on cash deposits and marketable securities. Interest expense In Corporate and Financing, interest revenue relates to interest earned on cash deposits and marketable securities. Interest expense includes non-debt-related interest expense of $103 million in 2021, $148 million in 2020 and $105 million in 2019. includes non-debt-related interest expense of $103 million in 2021, $148 million in 2020 and $105 million in 2019. 103 103 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Upstream Upstream U.S. U.S. Non-U.S. Non-U.S. As of December 31, 2021 As of December 31, 2021 Earnings (loss) after income tax Earnings (loss) after income tax Earnings of equity companies included above Earnings of equity companies included above Sales and other operating revenue Sales and other operating revenue Intersegment revenue Intersegment revenue Depreciation and depletion expense Depreciation and depletion expense Interest revenue Interest revenue Interest expense Interest expense Income tax expense (benefit) Income tax expense (benefit) Additions to property, plant and equipment Additions to property, plant and equipment Investments in equity companies Investments in equity companies Total assets Total assets As of December 31, 2020 As of December 31, 2020 Earnings (loss) after income tax Earnings (loss) after income tax Effect of asset impairments - noncash Effect of asset impairments - noncash Earnings of equity companies included above Earnings of equity companies included above Sales and other operating revenue Sales and other operating revenue Intersegment revenue Intersegment revenue Depreciation and depletion expense Depreciation and depletion expense Interest revenue Interest revenue Interest expense Interest expense Income tax expense (benefit) Income tax expense (benefit) Additions to property, plant and equipment Additions to property, plant and equipment Investments in equity companies Investments in equity companies Total assets Total assets As of December 31, 2019 As of December 31, 2019 Earnings (loss) after income tax Earnings (loss) after income tax Earnings of equity companies included above Earnings of equity companies included above Sales and other operating revenue Sales and other operating revenue Intersegment revenue Intersegment revenue Depreciation and depletion expense Depreciation and depletion expense Interest revenue Interest revenue Interest expense Interest expense Income tax expense (benefit) Income tax expense (benefit) Additions to property, plant and equipment Additions to property, plant and equipment Investments in equity companies Investments in equity companies Total assets Total assets Downstream Downstream Non-U.S. Non-U.S. U.S. U.S. Chemical Chemical Non-U.S. Non-U.S. U.S. U.S. (millions of dollars) (millions of dollars) Corporate and Corporate Financing and Financing Corporate Total Corporate Total 3,663 3,663 288 288 8,883 8,883 16,692 16,692 6,831 6,831 — — 58 58 1,116 1,116 3,308 3,308 4,999 4,999 67,294 67,294 12,112 12,112 5,535 5,535 12,914 12,914 33,405 33,405 9,918 9,918 — — 36 36 4,871 4,871 5,308 5,308 18,544 18,544 141,978 141,978 1,314 1,314 122 122 80,044 80,044 21,622 21,622 724 724 — — 1 1 379 379 997 997 352 352 27,436 27,436 791 791 74 74 137,963 137,963 27,065 27,065 1,031 1,031 — — 7 7 160 160 983 983 888 888 39,630 39,630 4,502 4,502 (139) (139) 15,309 15,309 9,639 9,639 578 578 — — — — 1,476 1,476 548 548 3,020 3,020 19,069 19,069 3,294 3,294 1,131 1,131 21,549 21,549 6,047 6,047 650 650 — — 1 1 688 688 739 739 3,759 3,759 20,653 20,653 (2,636) (2,636) (354) (354) 30 30 227 227 875 875 33 33 844 844 (1,054) (1,054) 658 658 (337) (337) 22,863 22,863 23,040 23,040 6,657 6,657 276,692 276,692 — — 20,607 20,607 33 33 947 947 7,636 7,636 12,541 12,541 31,225 31,225 338,923 338,923 (19,385) (19,385) (17,138) (17,138) (559) (559) 5,876 5,876 8,508 8,508 28,627 28,627 — — 52 52 (5,958) (5,958) 5,726 5,726 4,792 4,792 71,287 71,287 (645) (645) (2,287) (2,287) 2,101 2,101 8,673 8,673 19,642 19,642 12,723 12,723 — — 93 93 742 742 4,418 4,418 18,135 18,135 144,730 144,730 (852) (852) (15) (15) 134 134 48,256 48,256 12,258 12,258 716 716 — — 1 1 (324) (324) 2,983 2,983 352 352 23,754 23,754 (225) (225) (609) (609) (190) (190) 92,640 92,640 15,162 15,162 1,672 1,672 — — 21 21 393 393 1,731 1,731 879 879 34,848 34,848 1,277 1,277 (100) (100) (21) (21) 8,529 8,529 6,099 6,099 685 685 — — — — 440 440 1,221 1,221 2,543 2,543 17,839 17,839 686 686 (69) (69) 651 651 14,562 14,562 3,881 3,881 694 694 — — — — 272 272 592 592 3,514 3,514 20,220 20,220 (3,296) (3,296) (35) (35) (384) (384) 38 38 221 221 892 892 49 49 991 991 (1,197) (1,197) 671 671 (443) (443) 20,072 20,072 (22,440) (22,440) (20,253) (20,253) 1,732 1,732 178,574 178,574 — — 46,009 46,009 49 49 1,158 1,158 (5,632) (5,632) 17,342 17,342 29,772 29,772 332,750 332,750 536 536 282 282 9,364 9,364 10,893 10,893 6,162 6,162 — — 54 54 (151) (151) 10,404 10,404 5,313 5,313 95,750 95,750 13,906 13,906 4,534 4,534 13,779 13,779 30,864 30,864 9,305 9,305 — — 34 34 5,509 5,509 7,347 7,347 17,736 17,736 151,181 151,181 1,717 1,717 196 196 70,523 70,523 22,416 22,416 674 674 — — 1 1 465 465 2,685 2,685 319 319 23,442 23,442 606 606 19 19 134,460 134,460 24,775 24,775 832 832 — — 9 9 361 361 1,777 1,777 1,062 1,062 37,133 37,133 206 206 (4) (4) 9,723 9,723 7,864 7,864 555 555 — — — — 58 58 1,344 1,344 1,835 1,835 16,544 16,544 386 386 818 818 17,693 17,693 5,905 5,905 621 621 — — 1 1 305 305 589 589 3,335 3,335 20,376 20,376 (3,017) (3,017) (404) (404) 41 41 224 224 849 849 84 84 731 731 (1,265) (1,265) 758 758 (309) (309) 18,171 18,171 14,340 14,340 5,441 5,441 255,583 255,583 — — 18,998 18,998 84 84 830 830 5,282 5,282 24,904 24,904 29,291 29,291 362,597 362,597 104 104 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Geographic Geographic Sales and other operating revenue Sales and other operating revenue United States United States Non-U.S. Non-U.S. Total Total 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 2019 2019 104,236 104,236 172,456 172,456 276,692 276,692 62,663 62,663 115,911 115,911 178,574 178,574 89,612 89,612 165,971 165,971 255,583 255,583 Significant non-U.S. revenue sources include: (1) Significant non-U.S. revenue sources include: (1) Canada Canada Singapore Singapore United Kingdom United Kingdom France France Italy Italy Belgium Belgium Australia Australia 19,735 19,735 12,128 12,128 17,479 17,479 12,740 12,740 10,459 10,459 11,644 11,644 7,941 7,941 (1) Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in Non-U.S. (1) Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in Non-U.S. 13,093 13,093 9,442 9,442 11,055 11,055 8,676 8,676 7,091 7,091 6,231 6,231 5,839 5,839 22,166 22,166 15,031 15,031 14,759 14,759 13,236 13,236 10,056 10,056 9,153 9,153 7,646 7,646 operations where attribution to a specific country is not practicable. operations where attribution to a specific country is not practicable. Long-lived assets Long-lived assets United States United States Non-U.S. Non-U.S. Total Total Significant non-U.S. long-lived assets include: Significant non-U.S. long-lived assets include: Canada Canada Australia Australia Singapore Singapore Kazakhstan Kazakhstan Papua New Guinea Papua New Guinea United Arab Emirates United Arab Emirates Nigeria Nigeria Guyana Guyana Brazil Brazil Russia Russia Angola Angola 2021 2021 December 31, December 31, 2020 2020 (millions of dollars) (millions of dollars) 2019 2019 90,412 90,412 126,140 126,140 216,552 216,552 94,732 94,732 132,821 132,821 227,553 227,553 114,372 114,372 138,646 138,646 253,018 253,018 34,907 34,907 12,988 12,988 11,969 11,969 8,463 8,463 7,534 7,534 5,392 5,392 5,235 5,235 4,892 4,892 4,337 4,337 4,055 4,055 3,207 3,207 36,232 36,232 14,792 14,792 12,129 12,129 8,882 8,882 7,803 7,803 5,381 5,381 6,345 6,345 3,547 3,547 3,281 3,281 4,616 4,616 4,405 4,405 39,130 39,130 13,933 13,933 11,645 11,645 9,315 9,315 8,057 8,057 5,262 5,262 7,640 7,640 2,542 2,542 3,338 3,338 5,135 5,135 5,784 5,784 105 105 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 19. Income and Other Taxes 19. Income and Other Taxes State State Income tax expense (benefit) Income tax expense (benefit) Federal and non-U.S. Federal and non-U.S. Current Current Deferred - net Deferred - net U.S. tax on non-U.S. operations U.S. tax on non-U.S. operations Total federal and non-U.S. Total federal and non-U.S. Total income tax expense (benefit) Total income tax expense (benefit) All other taxes and duties All other taxes and duties Other taxes and duties Other taxes and duties Included in production Included in production Included in SG&A expenses Included in SG&A expenses and manufacturing expenses and manufacturing expenses Total other taxes and duties Total other taxes and duties Total Total 2021 2021 Non-U.S. Non-U.S. U.S. U.S. Total Total U.S. U.S. 2020 2020 Non-U.S. Non-U.S. (millions of dollars) (millions of dollars) Total Total U.S. U.S. 2019 2019 Non-U.S. Non-U.S. Total Total 236 236 870 870 26 26 1,132 1,132 470 470 1,602 1,602 3,731 3,731 1,589 1,589 170 170 5,490 5,490 7,092 7,092 6,948 6,948 7,184 7,184 262 262 2,908 2,908 3,170 3,170 (914) (914) — — 6,034 6,034 — — 6,034 6,034 13 13 (44) (6,045) (2,007) (8,052) (44) (6,045) (2,007) (8,052) 26 26 7,166 7,166 470 470 7,636 7,636 (4,869) (4,869) (763) (763) (5,632) (5,632) (5,770) (5,770) (763) (763) (6,533) (6,533) — — 901 901 — — 901 901 13 13 (121) 6,171 (121) 6,171 (255) (255) 89 89 (420) (420) — — (287) 5,751 (287) 5,751 — (182) (182) — (469) 5,751 (469) 5,751 6,050 6,050 (675) (675) 89 89 5,464 5,464 (182) (182) 5,282 5,282 26,508 26,508 674 674 283 283 27,465 27,465 33,499 33,499 30,239 30,239 2,263 2,263 453 453 32,955 32,955 40,591 40,591 23,014 3,108 23,014 3,108 663 1,148 663 1,148 328 164 328 164 24,005 4,420 4,420 24,005 (2,113) 24,906 (2,113) 24,906 26,122 26,122 1,811 1,811 492 492 28,425 28,425 22,793 22,793 3,566 3,566 1,385 1,385 160 160 5,111 5,111 4,642 4,642 26,959 26,959 811 811 305 305 28,075 28,075 33,826 33,826 30,525 30,525 2,196 2,196 465 465 33,186 33,186 38,468 38,468 The above provisions for deferred income taxes include net benefits of $53 million in 2021, $25 million in 2020, and $740 million in The above provisions for deferred income taxes include net benefits of $53 million in 2021, $25 million in 2020, and $740 million in 2019 related to changes in tax laws and rates, and a benefit of $6.3 billion in 2020 related to asset impairments. 2019 related to changes in tax laws and rates, and a benefit of $6.3 billion in 2020 related to asset impairments. 106 106 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The reconciliation between income tax expense (credit) and a theoretical U.S. tax computed by applying a rate of 21 percent for 2021, The reconciliation between income tax expense (credit) and a theoretical U.S. tax computed by applying a rate of 21 percent for 2021, 2020 and 2019 is as follows: 2020 and 2019 is as follows: Income (loss) before income taxes Income (loss) before income taxes United States United States Non-U.S. Non-U.S. Total Total Theoretical tax Theoretical tax Effect of equity method of accounting Effect of equity method of accounting Non-U.S. taxes in excess of/(less than) theoretical U.S. tax (1)(2) Non-U.S. taxes in excess of/(less than) theoretical U.S. tax (1)(2) State taxes, net of federal tax benefit (1) State taxes, net of federal tax benefit (1) Other Other Total income tax expense (credit) Total income tax expense (credit) Effective tax rate calculation Effective tax rate calculation Income tax expense (credit) Income tax expense (credit) ExxonMobil share of equity company income taxes ExxonMobil share of equity company income taxes Total income tax expense (credit) Total income tax expense (credit) Net income (loss) including noncontrolling interests Net income (loss) including noncontrolling interests Total income (loss) before taxes Total income (loss) before taxes Effective income tax rate Effective income tax rate 2021 2021 2020 2020 (millions of dollars) (millions of dollars) 9,478 9,478 21,756 21,756 31,234 31,234 6,559 6,559 (1,398) (1,398) 2,809 2,809 371 371 (705) (705) 7,636 7,636 7,636 7,636 2,756 2,756 10,392 10,392 23,598 23,598 33,990 33,990 31 % 31 % (27,704) (27,704) (1,179) (1,179) (28,883) (28,883) (6,065) (6,065) (364) (364) 1,606 1,606 (603) (603) (206) (206) (5,632) (5,632) (5,632) (5,632) 861 861 (4,771) (4,771) (23,251) (23,251) (28,022) (28,022) 17 % 17 % 2019 2019 (53) (53) 20,109 20,109 20,056 20,056 4,212 4,212 (1,143) (1,143) 2,573 2,573 (144) (144) (216) (216) 5,282 5,282 5,282 5,282 2,490 2,490 7,772 7,772 14,774 14,774 22,546 22,546 34 % 34 % (1) 2020 includes the impact of an increase in valuation allowance of $647 million in non-U.S. and $115 million in U.S. state (1) 2020 includes the impact of an increase in valuation allowance of $647 million in non-U.S. and $115 million in U.S. state (2) 2019 includes taxes less than the theoretical U.S. tax of $773 million from Norway operations and the sale of upstream assets, (2) 2019 includes taxes less than the theoretical U.S. tax of $773 million from Norway operations and the sale of upstream assets, jurisdictions. jurisdictions. $657 million from a tax rate change in Alberta, Canada, and $268 million from an adjustment to a prior year tax position. $657 million from a tax rate change in Alberta, Canada, and $268 million from an adjustment to a prior year tax position. 107 107 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial Deferred income taxes reflect the impact of temporary differences between the amount of assets and liabilities recognized for financial reporting purposes and such amounts recognized for tax purposes. reporting purposes and such amounts recognized for tax purposes. Deferred tax liabilities/(assets) are comprised of the following at December 31: Deferred tax liabilities/(assets) are comprised of the following at December 31: Tax effects of temporary differences for: Tax effects of temporary differences for: 2020 2020 2021 2021 (millions of dollars) (millions of dollars) 27,888 27,888 6,353 6,353 34,241 34,241 (3,687) (3,687) (2,865) (2,865) (6,914) (6,914) (7,694) (7,694) (21,160) (21,160) 2,634 2,634 15,715 15,715 28,778 28,778 6,427 6,427 35,205 35,205 (4,703) (4,703) (3,150) (3,150) (8,982) (8,982) (7,095) (7,095) (23,930) (23,930) 2,731 2,731 14,006 14,006 (millions of dollars) (millions of dollars) (4,450) (4,450) 20,165 20,165 15,715 15,715 (4,159) (4,159) 18,165 18,165 14,006 14,006 Property, plant and equipment Property, plant and equipment Other liabilities Other liabilities Total deferred tax liabilities Total deferred tax liabilities Pension and other postretirement benefits Pension and other postretirement benefits Asset retirement obligations Asset retirement obligations Tax loss carryforwards Tax loss carryforwards Other assets Other assets Total deferred tax assets Total deferred tax assets Asset valuation allowances Asset valuation allowances Net deferred tax liabilities Net deferred tax liabilities Other assets, including intangibles, net Other assets, including intangibles, net Deferred income tax liabilities Deferred income tax liabilities Net deferred tax liabilities Net deferred tax liabilities In 2021, asset valuation allowances of $2,634 million decreased by $97 million and included net provisions of $41 million and foreign In 2021, asset valuation allowances of $2,634 million decreased by $97 million and included net provisions of $41 million and foreign currency effects of $137 million. currency effects of $137 million. Balance sheet classification Balance sheet classification 2020 2020 2021 2021 The Corporation’s undistributed earnings from subsidiary companies outside the United States include amounts that have been The Corporation’s undistributed earnings from subsidiary companies outside the United States include amounts that have been retained to fund prior and future capital project expenditures. Deferred income taxes have not been recorded for potential future tax retained to fund prior and future capital project expenditures. Deferred income taxes have not been recorded for potential future tax obligations, such as foreign withholding tax and state tax, as these undistributed earnings are expected to be indefinitely reinvested for obligations, such as foreign withholding tax and state tax, as these undistributed earnings are expected to be indefinitely reinvested for the foreseeable future. As of December 31, 2021, it is not practicable to estimate the unrecognized deferred tax liability. However, the foreseeable future. As of December 31, 2021, it is not practicable to estimate the unrecognized deferred tax liability. However, unrecognized deferred taxes on remittance of these funds are not expected to be material. unrecognized deferred taxes on remittance of these funds are not expected to be material. Unrecognized Tax Benefits. The Corporation is subject to income taxation in many jurisdictions around the world. The benefits of Unrecognized Tax Benefits. The Corporation is subject to income taxation in many jurisdictions around the world. The benefits of uncertain tax positions that the Corporation has taken or expects to take in its income tax returns are recognized in the financial uncertain tax positions that the Corporation has taken or expects to take in its income tax returns are recognized in the financial statements if management concludes that it is more likely than not that the position will be sustained with the tax authorities. For a statements if management concludes that it is more likely than not that the position will be sustained with the tax authorities. For a position that is likely to be sustained, the benefit recognized in the financial statements is measured at the largest amount that is greater position that is likely to be sustained, the benefit recognized in the financial statements is measured at the largest amount that is greater than 50 percent likely of being realized. Unrecognized tax benefits reflect the difference between positions taken or expected to be than 50 percent likely of being realized. Unrecognized tax benefits reflect the difference between positions taken or expected to be taken on income tax returns and the amounts recognized in the financial statements. The following table summarizes the movement in taken on income tax returns and the amounts recognized in the financial statements. The following table summarizes the movement in unrecognized tax benefits: unrecognized tax benefits: Gross unrecognized tax benefits Gross unrecognized tax benefits 2019 2019 2021 2021 Balance at January 1 Balance at January 1 Additions based on current year's tax positions Additions based on current year's tax positions Additions for prior years' tax positions Additions for prior years' tax positions Reductions for prior years' tax positions Reductions for prior years' tax positions Reductions due to lapse of the statute of limitations Reductions due to lapse of the statute of limitations Settlements with tax authorities Settlements with tax authorities Foreign exchange effects/other Foreign exchange effects/other Balance at December 31 Balance at December 31 108 108 2020 2020 (millions of dollars) (millions of dollars) 8,844 8,844 253 253 218 218 (201) (201) (237) (237) (113) (113) — — 8,764 8,764 8,764 8,764 358 358 100 100 (79) (79) (2) (2) (11) (11) — — 9,130 9,130 9,174 9,174 287 287 120 120 (97) (97) (279) (279) (538) (538) 177 177 8,844 8,844 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS NOTES TO CONSOLIDATED FINANCIAL STATEMENTS The gross unrecognized tax benefit balances are predominantly related to tax positions that would reduce the Corporation’s effective The gross unrecognized tax benefit balances are predominantly related to tax positions that would reduce the Corporation’s effective tax rate if the positions are favorably resolved. Unfavorable resolution of these tax positions generally would not increase the effective tax rate if the positions are favorably resolved. Unfavorable resolution of these tax positions generally would not increase the effective tax rate. The 2021, 2020 and 2019 changes in unrecognized tax benefits did not have a material effect on the Corporation’s net tax rate. The 2021, 2020 and 2019 changes in unrecognized tax benefits did not have a material effect on the Corporation’s net income. income. Resolution of these tax positions through negotiations with the relevant tax authorities or through litigation will take many years to Resolution of these tax positions through negotiations with the relevant tax authorities or through litigation will take many years to complete. It is difficult to predict the timing of resolution for these tax positions since the timing is not entirely within the control of complete. It is difficult to predict the timing of resolution for these tax positions since the timing is not entirely within the control of the Corporation. In the United States, the Corporation has various ongoing U.S. federal income tax positions at issue with the Internal the Corporation. In the United States, the Corporation has various ongoing U.S. federal income tax positions at issue with the Internal Revenue Service (IRS) for tax years beginning in 2006. The Corporation filed a refund suit for tax years 2006-2009 in U.S. federal Revenue Service (IRS) for tax years beginning in 2006. The Corporation filed a refund suit for tax years 2006-2009 in U.S. federal district court (District Court) with respect to the positions at issue for those years. These positions are reflected in the unrecognized tax district court (District Court) with respect to the positions at issue for those years. These positions are reflected in the unrecognized tax benefits table. On February 24, 2020, the Corporation received an adverse ruling on this suit. The IRS has asserted penalties associated benefits table. On February 24, 2020, the Corporation received an adverse ruling on this suit. The IRS has asserted penalties associated with several of those positions. The Corporation has not recognized the penalties as an expense because the Corporation does not with several of those positions. The Corporation has not recognized the penalties as an expense because the Corporation does not expect the penalties to be sustained under applicable law. On January 13, 2021, the District Court ruled that no penalties apply to the expect the penalties to be sustained under applicable law. On January 13, 2021, the District Court ruled that no penalties apply to the Corporation's positions in this suit. The Corporation and the government have appealed the District Court's rulings to the U.S. Court of Corporation's positions in this suit. The Corporation and the government have appealed the District Court's rulings to the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit). Proceedings in the Fifth Circuit are continuing. Unfavorable resolution of all positions at Appeals for the Fifth Circuit (Fifth Circuit). Proceedings in the Fifth Circuit are continuing. Unfavorable resolution of all positions at issue with the IRS would not have a material adverse effect on the Corporation’s operations or financial condition. issue with the IRS would not have a material adverse effect on the Corporation’s operations or financial condition. It is reasonably possible that the total amount of unrecognized tax benefits could increase by up to 10 percent or decrease by up to It is reasonably possible that the total amount of unrecognized tax benefits could increase by up to 10 percent or decrease by up to 70 percent in the next 12 months. Such a decrease would result primarily from final resolution of the U.S. federal income tax litigation 70 percent in the next 12 months. Such a decrease would result primarily from final resolution of the U.S. federal income tax litigation within this timeframe. within this timeframe. The following table summarizes the tax years that remain subject to examination by major tax jurisdiction: The following table summarizes the tax years that remain subject to examination by major tax jurisdiction: Country of Operation Country of Operation Abu Dhabi Abu Dhabi Angola Angola Australia Australia Belgium Belgium Canada Canada Equatorial Guinea Equatorial Guinea Indonesia Indonesia Iraq Iraq Malaysia Malaysia Nigeria Nigeria Papua New Guinea Papua New Guinea Russia Russia United Kingdom United Kingdom United States United States Open Tax Years Open Tax Years 2020 — 2021 2020 — 2021 2018 — 2021 2018 — 2021 2010 — 2021 2010 — 2021 2017 — 2021 2017 — 2021 2001 — 2021 2001 — 2021 2007 — 2021 2007 — 2021 2008 — 2021 2008 — 2021 2016 — 2021 2016 — 2021 2017 — 2021 2017 — 2021 2006 — 2021 2006 — 2021 2008 — 2021 2008 — 2021 2019 — 2021 2019 — 2021 2015 — 2021 2015 — 2021 2006 — 2021 2006 — 2021 The Corporation classifies interest on income tax-related balances as interest expense or interest income and classifies tax-related The Corporation classifies interest on income tax-related balances as interest expense or interest income and classifies tax-related penalties as operating expense. penalties as operating expense. For 2021 and 2019 the Corporation's net interest expense was $0 million on income tax reserves. For 2020, the Corporation's net For 2021 and 2019 the Corporation's net interest expense was $0 million on income tax reserves. For 2020, the Corporation's net interest expense was a credit of $6 million. The related interest payable balances were $61 million at both December 31, 2021 and interest expense was a credit of $6 million. The related interest payable balances were $61 million at both December 31, 2021 and 2020. 2020. 109 109 SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES (unaudited) The results of operations for producing activities shown below do not include earnings from other activities that ExxonMobil includes in the Upstream function, such as oil and gas transportation operations, LNG liquefaction and transportation operations, coal and power operations, technical service agreements, gains and losses from derivative activity, other nonoperating activities and adjustments for noncontrolling interests. These excluded amounts for both consolidated and equity companies totaled $(1,380) million in 2021, $274 million in 2020 and $3,502 million in 2019. Oil sands mining operations are included in the results of operations in accordance with Securities and Exchange Commission and Financial Accounting Standards Board rules. Results of Operations Consolidated Subsidiaries 2021 - Revenue Sales to third parties Transfers Production costs excluding taxes Exploration expenses Depreciation and depletion Taxes other than income Related income tax Results of producing activities for consolidated subsidiaries Equity Companies 2021 - Revenue Sales to third parties Transfers Production costs excluding taxes Exploration expenses Depreciation and depletion Taxes other than income Related income tax Results of producing activities for equity companies United States Canada/ Other Americas Europe Africa Asia (millions of dollars) Australia/ Oceania Total 5,797 10,938 16,735 3,436 19 6,185 1,367 1,276 2,480 8,492 10,972 4,867 464 2,690 113 55 1,628 412 2,040 754 26 408 11 235 253 6,087 6,340 1,759 359 2,799 490 311 2,110 8,829 10,939 1,471 146 1,965 1,258 3,858 3,182 812 3,994 481 40 1,002 423 610 15,450 35,570 51,020 12,768 1,054 15,049 3,662 6,345 4,452 2,783 606 622 2,241 1,438 12,142 620 479 1,099 538 — 509 33 — 19 — — — — — — — — — 1,332 33 1,365 1,065 2 194 48 13 43 — — — 11 — — — 3 (14) 12,239 151 12,390 413 — 611 3,749 2,652 4,965 — — — — — — — — — 14,191 663 14,854 2,027 2 1,314 3,830 2,668 5,013 Total results of operations 4,471 2,783 649 608 7,206 1,438 17,155 110 Results of Operations Consolidated Subsidiaries 2020 - Revenue Sales to third parties Transfers Production costs excluding taxes Exploration expenses Depreciation and depletion Taxes other than income Related income tax Results of producing activities for consolidated subsidiaries Equity Companies 2020 - Revenue Sales to third parties Transfers Production costs excluding taxes Exploration expenses Depreciation and depletion Taxes other than income Related income tax Results of producing activities for equity companies United States Canada/ Other Americas Europe Africa Asia (millions of dollars) Australia/ Oceania Total 2,933 4,943 7,876 3,877 51 27,489 615 (5,650) 1,034 3,938 4,972 3,928 573 5,118 106 (944) 536 362 898 786 33 828 32 (343) 262 4,603 4,865 1,911 371 2,788 390 (258) 1,632 5,584 7,216 1,471 112 2,171 692 2,130 1,983 509 2,492 483 145 733 152 241 8,380 19,939 28,319 12,456 1,285 39,127 1,987 (4,824) (18,506) (3,809) (438) (337) 640 738 (21,712) 410 308 718 500 — 605 34 — (421) — — — — — — — — — 513 12 525 674 2 224 22 (246) (151) — — — 6 — — — (1) (5) 6,289 60 6,349 421 — 543 2,274 1,126 1,985 — — — — — — — — — 7,212 380 7,592 1,601 2 1,372 2,330 879 1,408 Total results of operations (18,927) (3,809) (589) (342) 2,625 738 (20,304) Consolidated Subsidiaries 2019 - Revenue Sales to third parties Transfers Production costs excluding taxes Exploration expenses Depreciation and depletion Taxes other than income Related income tax Results of producing activities for consolidated subsidiaries Equity Companies 2019 - Revenue Sales to third parties Transfers Production costs excluding taxes Exploration expenses Depreciation and depletion Taxes other than income Related income tax Results of producing activities for equity companies 5,070 6,544 11,614 4,697 120 5,916 998 (29) 1,452 5,979 7,431 4,366 498 1,975 122 (423) 2,141 1,345 3,486 1,196 118 601 113 (20) 802 7,892 8,694 2,387 234 3,019 682 1,188 2,393 8,706 11,099 1,597 119 2,264 1,182 4,238 3,132 628 3,760 637 180 703 250 599 14,990 31,094 46,084 14,880 1,269 14,478 3,347 5,553 (88) 893 1,478 1,184 1,699 1,391 6,557 664 530 1,194 543 1 431 33 — 186 — — — — — — — — — 1,248 6 1,254 570 4 231 75 180 194 — — — 6 — — — (1) (5) 10,536 464 11,000 555 — 528 3,634 2,275 4,008 — — — — — — — — — 12,448 1,000 13,448 1,674 5 1,190 3,742 2,454 4,383 Total results of operations 98 893 1,672 1,179 5,707 1,391 10,940 111 Oil and Gas Exploration and Production Costs The amounts shown for net capitalized costs of consolidated subsidiaries are $12,005 million less at year-end 2021 and $13,206 million less at year-end 2020 than the amounts reported as investments in property, plant and equipment for the Upstream in Note 9. This is due to the exclusion from capitalized costs of certain transportation and research assets and assets relating to LNG operations. Assets related to oil sands and oil shale mining operations are included in the capitalized costs in accordance with Financial Accounting Standards Board rules. Capitalized Costs Consolidated Subsidiaries As of December 31, 2021 Property (acreage) costs – Proved – Unproved Total property costs Producing assets Incomplete construction Total capitalized costs Accumulated depreciation and depletion Net capitalized costs for consolidated subsidiaries Equity Companies As of December 31, 2021 Property (acreage) costs – Proved – Unproved Total property costs Producing assets Incomplete construction Total capitalized costs Accumulated depreciation and depletion Net capitalized costs for equity companies Consolidated Subsidiaries As of December 31, 2020 Property (acreage) costs – Proved – Unproved Total property costs Producing assets Incomplete construction Total capitalized costs Accumulated depreciation and depletion Net capitalized costs for consolidated subsidiaries Equity Companies As of December 31, 2020 Property (acreage) costs – Proved – Unproved Total property costs Producing assets Incomplete construction Total capitalized costs Accumulated depreciation and depletion Net capitalized costs for equity companies United States Canada/ Other Americas Europe Africa Asia (millions of dollars) Australia/ Oceania Total 1,422 119 1,541 56,168 1,428 59,137 49,312 9,825 309 3,111 3,420 — 809 4,229 — 4,229 1,332 213 1,545 55,556 1,975 59,076 46,567 12,509 286 3,134 3,420 — 721 4,141 — 4,141 2,994 5 2,999 44,228 2,888 50,115 26,519 23,596 — — — 8,676 11,716 20,392 6,590 13,802 2,979 181 3,160 43,394 3,050 49,604 24,701 24,903 — — — 8,547 10,527 19,074 5,911 13,163 730 2,675 3,405 14,944 2,044 20,393 9,225 11,168 27,353 30,213 57,566 283,063 18,421 359,050 214,104 144,946 — — — — — — — — 411 3,115 3,526 21,109 12,651 37,286 16,056 21,230 771 2,642 3,413 15,348 1,972 20,733 8,628 12,105 25,343 33,680 59,023 291,786 18,582 369,391 215,125 154,266 — — — — — — — — 388 3,138 3,526 21,454 11,420 36,400 15,227 21,173 18,353 21,146 39,499 101,211 4,125 144,835 86,830 58,005 3,844 6,231 10,075 52,092 7,047 69,214 28,428 40,786 98 4 102 6,946 103 7,151 4,304 2,847 — — — — — — — — 18,059 23,255 41,314 104,650 5,549 151,513 89,401 62,112 2,151 7,352 9,503 52,552 4,590 66,645 26,635 40,010 98 4 102 6,975 138 7,215 3,854 3,361 — — — — — — — — 10 37 47 14,420 889 15,356 13,790 1,566 4 — 4 5,487 23 5,514 5,162 352 51 37 88 20,286 1,446 21,820 19,193 2,627 4 — 4 5,932 34 5,970 5,462 508 112 Oil and Gas Exploration and Production Costs (continued) The amounts reported as costs incurred include both capitalized costs and costs charged to expense during the year. Costs incurred also include new asset retirement obligations established in the current year, as well as increases or decreases to the asset retirement obligation resulting from changes in cost estimates or abandonment date. Total consolidated costs incurred in 2021 were $9,877 million, down $1,377 million from 2020, due primarily to lower development costs, partially offset by higher acquisition costs of unproved properties. In 2020, costs were $11,254 million, down $7,986 million from 2019, due primarily to lower development costs including lower asset retirement obligation cost estimates mainly in Angola. Total equity company costs incurred in 2021 were $1,451 million, down $561 million from 2020, due primarily to lower development costs. Costs Incurred in Property Acquisitions, Exploration and Development Activities United States Canada/ Other Americas Europe Africa Asia (millions of dollars) Australia/ Oceania Total During 2021 Consolidated Subsidiaries Property acquisition costs – Proved – Unproved Exploration costs Development costs Total costs incurred for consolidated subsidiaries Equity Companies Property acquisition costs – Proved – Unproved Exploration costs Development costs Total costs incurred for equity companies During 2020 Consolidated Subsidiaries Property acquisition costs – Proved – Unproved Exploration costs Development costs Total costs incurred for consolidated subsidiaries Equity Companies Property acquisition costs – Proved – Unproved Exploration costs Development costs Total costs incurred for equity companies During 2019 Consolidated Subsidiaries Property acquisition costs – Proved – Unproved Exploration costs Development costs Total costs incurred for consolidated subsidiaries Equity Companies Property acquisition costs – Proved – Unproved Exploration costs Development costs Total costs incurred for equity companies 37 78 19 3,352 3,486 — — — 8 8 1 80 60 5,675 5,816 — — — 135 135 12 226 134 10,275 10,647 — — 1 241 242 — 575 903 2,619 4,097 — — — — — 30 3 702 2,059 2,794 — — — — — — 105 1,107 2,946 4,158 — — — — — — — 46 207 253 — — 1 20 21 — — 40 316 356 — — 2 20 22 — 1 155 809 965 — — 5 15 20 90 — 185 389 664 — — — 88 88 344 47 232 (239) 384 — — — 71 71 — 20 252 1,066 1,338 — — — 69 69 15 — 47 805 867 — — — 1,334 1,334 7 — 110 974 1,091 — — — 1,784 1,784 26 — 111 1,317 1,454 — — — 2,585 2,585 — 35 40 435 510 — — — — — — — 83 730 813 — — — — — — — 194 484 678 — — — — — 142 688 1,240 7,807 9,877 — — 1 1,450 1,451 382 130 1,227 9,515 11,254 — — 2 2,010 2,012 38 352 1,953 16,897 19,240 — — 6 2,910 2,916 113 Oil and Gas Reserves The following information describes changes during the years and balances of proved oil and gas reserves at year-end 2019, 2020 and 2021. The definitions used are in accordance with the Securities and Exchange Commission’s Rule 4-10 (a) of Regulation S-X. Proved oil and natural gas reserves are those quantities of oil and natural gas, which, by analysis of geoscience and engineering data, can be estimated with reasonable certainty to be economically producible – from a given date forward, from known reservoirs, and under existing economic conditions, operating methods and government regulations – prior to the time at which contracts providing the right to operate expire, unless evidence indicates that renewal is reasonably certain. In some cases, substantial new investments in additional wells and related facilities will be required to recover these proved reserves. In accordance with the Securities and Exchange Commission’s (SEC) rules, the Corporation’s year-end reserves volumes as well as the reserves change categories shown in the following tables are required to be calculated on the basis of average prices during the 12- month period prior to the ending date of the period covered by the report, determined as an unweighted arithmetic average of the first- day-of-the-month price for each month within such period. These reserves quantities are also used in calculating unit-of-production depreciation rates and in calculating the standardized measure of discounted net cash flows. Revisions can include upward or downward changes in previously estimated volumes of proved reserves for existing fields due to the evaluation or re-evaluation of (1) already available geologic, reservoir or production data, (2) new geologic, reservoir or production data or (3) changes in the average of first-of-month oil and natural gas prices and/or costs that are used in the estimation of reserves. Revisions can also result from significant changes in either development strategy or production equipment/facility capacity. Proved reserves include 100 percent of each majority-owned affiliate’s participation in proved reserves and ExxonMobil’s ownership percentage of the proved reserves of equity companies, but exclude royalties and quantities due others. Natural gas reserves exclude the gaseous equivalent of liquids expected to be removed from the natural gas on leases, at field facilities and at gas processing plants. These liquids are included in net proved reserves of crude oil and natural gas liquids. In the proved reserves tables, consolidated reserves and equity company reserves are reported separately. However, the Corporation does not view equity company reserves any differently than those from consolidated companies. Reserves reported under production sharing and other nonconcessionary agreements are based on the economic interest as defined by the specific fiscal terms in the agreement. The production and reserves reported for these types of arrangements typically vary inversely with oil and natural gas price changes. As oil and natural gas prices increase, the cash flow and value received by the company increase; however, the production volumes and reserves required to achieve this value will typically be lower because of the higher prices. When prices decrease, the opposite effect generally occurs. The percentage of total proved reserves (consolidated subsidiaries plus equity companies) at year-end 2021 that were associated with production sharing contract arrangements was 12 percent on an oil-equivalent basis (natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels). Net proved developed reserves are those volumes that are expected to be recovered through existing wells with existing equipment and operating methods or in which the cost of the required equipment is relatively minor compared to the cost of a new well. Net proved undeveloped reserves are those volumes that are expected to be recovered from new wells on undrilled acreage, or from existing wells where a relatively major expenditure is required for recompletion. Crude oil, natural gas liquids, and natural gas production quantities shown are the net volumes withdrawn from ExxonMobil’s oil and natural gas reserves. The natural gas quantities differ from the quantities of natural gas delivered for sale by the producing function as reported in the Upstream Operational Results due to volumes consumed or flared and inventory changes. The changes between 2021 year-end proved reserves and 2020 year-end proved reserves reflect upward revisions of 2.4 billion barrels of bitumen at Kearl and 0.5 billion barrels of bitumen at Cold Lake, primarily as a result of improved prices. In addition, extensions and discoveries of approximately 1.3 billion oil-equivalent barrels (GOEB) occurred primarily in the United States (0.9 GOEB), Brazil (0.2 GOEB) and Guyana (0.1 GOEB). Worldwide production in 2021 was 1.4 GOEB. The downward revisions in 2020, primarily as a result of low prices during 2020, include 3.1 billion barrels of bitumen at Kearl, 0.6 billion barrels of bitumen at Cold Lake, and 0.5 GOEB in the United States. In addition, the Corporation’s near-term reduction in capital expenditures resulted in a net reduction to estimates of proved reserves of approximately 1.5 GOEB, mainly related to unconventional drilling in the United States. 114 Crude Oil, Natural Gas Liquids, Bitumen and Synthetic Oil Proved Reserves Crude Oil Natural Gas Liquids United States Canada/ Other Americas Europe Africa Asia Australia/ Oceania Total Worldwide (millions of barrels) Bitumen Canada/ Other Americas Synthetic Oil Canada/ Other Americas Total Net proved developed and undeveloped reserves of consolidated subsidiaries January 1, 2019 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2019 Attributable to noncontrolling interests Proportional interest in proved reserves of equity companies January 1, 2019 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2019 Total liquids proved reserves at December 31, 2019 3,204 (677) — 20 (1) 710 (168) 3,088 604 (25) 166 20 — — — — (117) — — — (30) 39 (132) 447 3,357 136 — — — — (158) 3,335 529 (66) — — — 125 (31) 557 21 (612) 105 7,965 — — — 20 — (118) — 835 — (11) (530) 94 7,560 1,404 (305) — 12 (27) 263 (72) 4,185 (213) — — — — (114) 1,275 3 3,858 894 254 15 — — — 1 (19) 251 — — — — — — — — 15 — — — — — 6 — — — — — (1) — 6 14 1,020 (38) — — — — (85) 897 (23) — 1,295 — — — — — — — 1 — (105) — — 1,168 342 3 — — — — (23) 322 — — — — — — — — 466 14,020 (27) (1,157) — — 32 — (145) — 1,098 — (24) (740) 13,108 415 126 — — — — — — — — 1,637 (20) — — — 1 (128) 1,490 3,339 557 53 453 4,232 94 8,728 1,597 3,858 415 14,598 Net proved developed and undeveloped reserves of consolidated subsidiaries January 1, 2020 Revisions Improved recovery Purchases Sales Extensions/discoveries Production 3,088 (1,139) — — (1) 187 (176) December 31, 2020 Attributable to noncontrolling interests 1,959 447 19 — — — — 39 (9) 557 (14) — — — — (2) — — 1 (45) 497 7 (8) 22 (110) 356 3,335 (20) — — — — (165) 3,150 94 7,560 (10) (1,173) — — — — — — (10) 74 6,058 188 (514) (3) 3,858 1,275 (209) (3,653) — — (3) 65 (74) 1,054 1 — — — 1 (125) 81 25 13,108 415 (79) (5,114) — — — — — (6) 387 133 (25) (738) 7,637 444 135 Proportional interest in proved reserves of equity companies January 1, 2020 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2020 Total liquids proved reserves at December 31, 2020 251 (102) — — — — (18) 131 — — — — — — — — — — — — 14 6 (4) — — — — — (1) — 6 9 897 4 — — — — (76) 825 (102) — 1,168 — — — — — — — — — — — (95) 971 322 (22) — — — — (23) 277 2,090 497 31 362 3,975 74 7,029 1,331 115 — — — — — — — — 81 — — — — — — — — 1,490 (124) — — — — (118) 1,248 444 8,885 Crude Oil, Natural Gas Liquids, Bitumen and Synthetic Oil Proved Reserves (continued) Crude Oil Natural Gas Liquids United States Canada/ Other Americas Europe Africa Asia Australia/ Oceania Total Worldwide (millions of barrels) Bitumen Canada/ Other Americas Synthetic Oil Canada/ Other Americas Total Net proved developed and undeveloped reserves of consolidated subsidiaries January 1, 2021 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2021 Attributable to noncontrolling interests Proportional interest in proved reserves of equity companies January 1, 2021 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2021 Total liquids proved reserves at December 31, 2021 1,959 47 — 5 (27) 499 (176) 2,307 22 15 — — 356 67 — — (28) — — — 3,150 36 — — — — (88) (149) 3,037 (6) 3 335 497 (2) — — (8) 329 (47) 769 9 131 38 — — — 2 (16) 155 — — — — — — — — 6 (1) 9 2 — — — — — — — — (1) — 5 10 825 (8) — — — — (76) 741 74 6,058 173 10 — — 5 — (63) — 828 — (10) (476) 74 6,525 1,054 4 — 1 (20) 183 (86) 81 2,944 2 — — — (133) 1,136 1 2,894 674 7,637 3,138 2 6 (83) 1,011 (718) 10,993 444 17 — — — — (23) 438 133 971 31 — — — — — — — 2 — (93) — 911 — 277 15 — — — — (22) 270 — — — — — — — — — — — — — — — — 1,248 46 — — — 2 (115) 1,181 2,462 769 13 340 3,778 74 7,436 1,406 2,894 438 12,174 116 Crude Oil, Natural Gas Liquids, Bitumen and Synthetic Oil Proved Reserves (continued) Crude Oil and Natural Gas Liquids United States Canada/ Other Americas Europe Africa Asia Australia/ Oceania Total (millions of barrels) Bitumen Canada/ Other Americas Synthetic Oil Canada/ Other Americas Total Proved developed reserves, as of December 31, 2019 Consolidated subsidiaries Equity companies 1,655 200 195 — 23 13 419 — 2,309 727 90 — 4,691 940 3,528 — 415 — 8,634 940 Proved undeveloped reserves, as of December 31, 2019 Consolidated subsidiaries Equity companies Total liquids proved reserves at December 31, 2019 2,474 60 4,389 381 — 576 29 1 66 Proved developed reserves, as of December 31, 2020 68 6 1,157 483 35 — 4,144 550 330 — — — 4,474 550 493 4,676 125 10,325 3,858 415 14,598 Consolidated subsidiaries Equity companies 1,473 111 293 — 13 8 345 — 2,299 646 67 — 4,490 765 Proved undeveloped reserves, as of December 31, 2020 Consolidated subsidiaries Equity companies Total liquids proved reserves at December 31, 2020 1,342 24 2,950 209 — 502 16 1 38 42 6 975 452 38 — 2,622 483 393 4,372 105 8,360 76 — 5 — 81 311 — 4,877 765 133 — 2,760 483 444 8,885 Proved developed reserves, as of December 31, 2021 Consolidated subsidiaries Equity companies 1,663 133 268 — 3 10 330 — 2,154 474 63 — 4,481 617 2,635 — 326 — 7,442 617 Proved undeveloped reserves, as of December 31, 2021 Consolidated subsidiaries Equity companies Total liquids proved reserves at December 31, 2021 1,621 28 508 — — — 31 5 988 531 32 — 3,180 564 259 — 112 — 3,551 564 3,445 776 13 366 4,147 95 8,842 (1) 2,894 438 12,174 (1) See previous pages for natural gas liquids proved reserves attributable to consolidated subsidiaries and equity companies. For additional information on natural gas liquids proved reserves see Item 2. Properties in ExxonMobil’s 2021 Form 10-K. 117 Natural Gas and Oil-Equivalent Proved Reserves Natural Gas Net proved developed and undeveloped reserves of consolidated subsidiaries January 1, 2019 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2019 Attributable to noncontrolling interests Proportional interest in proved reserves of equity companies January 1, 2019 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2019 Total proved reserves at December 31, 2019 Net proved developed and undeveloped reserves of consolidated subsidiaries January 1, 2020 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2020 Attributable to noncontrolling interests Proportional interest in proved reserves of equity companies January 1, 2020 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2020 Total proved reserves at December 31, 2020 United States Canada/ Other Americas Europe Africa (billions of cubic feet) Asia Australia/ Oceania Total Oil-Equivalent Total All Products (1) (millions of oil- equivalent barrels) 21,403 (3,213) — 85 (297) 2,151 (1,103) 19,026 225 (1) — — — 1 (12) 213 19,239 19,026 (4,904) — — (35) 433 (1,081) 13,439 213 (99) — — — — (12) 102 13,541 1,312 41 — — (416) — (316) 621 1,744 (301) — — (29) 166 (114) 1,466 256 588 (171) — — — — (40) 377 3,841 953 — — — — (361) 4,433 7,462 39 — — — — (500) 7,001 36,350 (2,652) — 85 (742) 2,317 (2,434) 32,924 — — — — — — — — 1,466 1,057 (238) — — — — (238) 581 1,202 863 45 — — — — — 908 1,285 13,321 142 — — — — (1,009) 12,454 16,887 — — — — — — — — 7,001 15,466 (52) — — — 1 (1,259) 14,156 47,080 1,466 (753) — — (30) 1 (123) 561 84 — — — — — — — — 561 621 (4) — — — 1 (177) 441 377 (23) — — — — (34) 320 4,433 245 — — — — (369) 4,309 7,001 (405) — — — — (462) 6,134 32,924 (5,844) — — (65) 435 (2,246) 25,204 581 (95) — — — — (126) 360 801 908 9 — — — — — 917 1,237 12,454 (106) — — — — (971) 11,377 15,686 — — — — — — — — 6,134 14,156 (291) — — — — (1,109) 12,756 37,960 20,078 (1,599) — 47 (269) 1,484 (1,145) 18,596 4,215 (29) — — — 1 (338) 3,849 22,445 18,596 (6,088) — — (17) 459 (1,113) 11,837 3,849 (172) — — — — (303) 3,374 15,211 (1) Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels. 118 Natural Gas and Oil-Equivalent Proved Reserves (continued) Natural Gas United States Canada/ Other Americas Europe Africa (billions of cubic feet) Asia Australia/ Oceania Total Oil-Equivalent Total All Products (1) (millions of oil- equivalent barrels) Net proved developed and undeveloped reserves of consolidated subsidiaries January 1, 2021 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2021 Attributable to noncontrolling interests Proportional interest in proved reserves of equity companies January 1, 2021 Revisions Improved recovery Purchases Sales Extensions/discoveries Production December 31, 2021 Total proved reserves at December 31, 2021 13,439 1,432 — 3 (164) 1,381 (1,103) 14,988 102 44 — — — 5 (11) 140 15,128 441 210 — — (120) — (148) 383 320 39 — — — — (42) 317 4,309 (276) — — — — (340) 3,693 6,134 712 — — — — (483) 6,363 25,204 2,422 — 3 (302) 1,544 (2,208) 26,663 561 305 — — (18) 163 (92) 919 124 — — — — — — — — 919 360 206 — — — — (158) 408 791 917 (111) — — — — — 806 1,123 11,377 (236) — — — — (983) 10,158 13,851 — — — — — — — — 6,363 12,756 (97) — — — 5 (1,152) 11,512 38,175 11,837 3,542 2 6 (134) 1,269 (1,086) 15,436 3,374 30 — — — 3 (307) 3,100 18,536 (1) Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels. 119 Natural Gas and Oil-Equivalent Proved Reserves (continued) Natural Gas Proved developed reserves, as of December 31, 2019 Consolidated subsidiaries Equity companies Proved undeveloped reserves, as of December 31, 2019 Consolidated subsidiaries Equity companies United States Canada/ Other Americas 11,882 143 7,144 70 613 — 853 — Europe Africa (billions of cubic feet) Asia Australia/ Oceania Total Oil-Equivalent Total All Products (1) (millions of oil- equivalent barrels) 502 377 3,508 3,765 20,647 505 — 9,859 — 10,507 12,075 2,691 Total proved reserves at December 31, 2019 19,239 1,466 1,202 1,285 16,887 7,001 47,080 119 — 925 3,236 12,277 76 908 2,595 — 3,649 6,521 1,158 22,445 Proved developed reserves, as of December 31, 2020 Consolidated subsidiaries Equity companies Proved undeveloped reserves, as of December 31, 2020 Consolidated subsidiaries Equity companies 10,375 83 3,064 19 Total proved reserves at December 31, 2020 13,541 Proved developed reserves, as of December 31, 2021 Consolidated subsidiaries Equity companies Proved undeveloped reserves, as of December 31, 2021 Consolidated subsidiaries Equity companies 11,287 117 3,701 23 Total proved reserves at December 31, 2021 15,128 472 — 89 — 561 574 — 345 — 919 399 318 3,323 3,344 18,231 293 — 8,992 — 9,368 7,915 2,326 42 67 2 986 2,790 6,973 917 2,385 — 3,388 801 1,237 15,686 6,134 37,960 3,922 1,048 15,211 377 315 2,527 3,513 18,593 339 — 6,017 — 6,473 10,540 1,696 6 69 2 1,166 2,850 8,070 806 4,141 — 5,039 791 1,123 13,851 6,363 38,175 4,896 1,404 18,536 (1) Natural gas is converted to an oil-equivalent basis at six billion cubic feet per one million barrels. 120 Standardized Measure of Discounted Future Cash Flows As required by the Financial Accounting Standards Board, the standardized measure of discounted future net cash flows is computed by applying first-day-of-the-month average prices, year-end costs and legislated tax rates and a discount factor of 10 percent to net proved reserves. The standardized measure includes costs for future dismantlement, abandonment and rehabilitation obligations. The Corporation believes the standardized measure does not provide a reliable estimate of the Corporation’s expected future cash flows to be obtained from the development and production of its oil and gas properties or of the value of its proved oil and gas reserves. The standardized measure is prepared on the basis of certain prescribed assumptions including first-day-of-the-month average prices, which represent discrete points in time and therefore may cause significant variability in cash flows from year to year as prices change. Standardized Measure of Discounted Future Cash Flows United States Canada/ Other Americas (1) Europe Africa Asia (millions of dollars) Australia/ Oceania Total Consolidated Subsidiaries As of December 31, 2019 Future cash inflows from sales of oil and gas Future production costs Future development costs Future income tax expenses Future net cash flows Effect of discounting net cash flows at 10% Discounted future net cash flows 208,981 90,448 53,641 12,530 52,362 30,499 21,863 190,604 133,606 31,158 5,888 19,952 7,728 12,224 5,789 3,209 4,397 (594) (1,223) (1,265) 42 30,194 10,177 6,756 5,374 7,887 872 7,015 215,837 58,255 14,113 108,316 35,153 18,658 16,495 43,599 12,980 8,109 5,158 17,352 7,491 9,861 695,004 308,675 118,174 136,672 131,483 63,983 67,500 Equity Companies As of December 31, 2019 Future cash inflows from sales of oil and gas Future production costs Future development costs Future income tax expenses Future net cash flows Effect of discounting net cash flows at 10% Discounted future net cash flows 15,729 6,848 3,681 — 5,200 2,721 2,479 — — — — — — — 3,194 1,302 1,182 346 364 41 323 2,509 246 247 555 1,461 1,112 349 115,451 48,259 11,463 17,891 37,838 18,573 19,265 — — — — — — — 136,883 56,655 16,573 18,792 44,863 22,447 22,416 Total consolidated and equity interests in standardized measure of discounted future net cash flows 24,342 12,224 365 7,364 35,760 9,861 89,916 (1) Includes discounted future net cash flows attributable to noncontrolling interests in ExxonMobil consolidated subsidiaries of $1,064 million in 2019. 121 Standardized Measure of Discounted Future Cash Flows (continued) United States Canada/ Other Americas (1) Europe Africa Asia (millions of dollars) Australia/ Oceania Total Consolidated Subsidiaries As of December 31, 2020 Future cash inflows from sales of oil and gas Future production costs Future development costs Future income tax expenses Future net cash flows Effect of discounting net cash flows at 10% Discounted future net cash flows Equity Companies As of December 31, 2020 Future cash inflows from sales of oil and gas Future production costs Future development costs Future income tax expenses Future net cash flows Effect of discounting net cash flows at 10% Discounted future net cash flows Total consolidated and equity interests in standardized measure of discounted future net cash flows Consolidated Subsidiaries As of December 31, 2021 Future cash inflows from sales of oil and gas Future production costs Future development costs Future income tax expenses Future net cash flows Effect of discounting net cash flows at 10% Discounted future net cash flows 93,520 53,635 27,668 (2,509) 14,726 8,564 6,162 38,193 19,971 10,991 851 6,380 1,116 5,264 2,734 1,815 4,244 (1,121) (2,204) (1,565) (639) 15,411 138,080 6,527 42,378 6,223 13,432 916 62,223 20,047 1,745 (511) 10,557 9,490 2,256 19,794 3,188 7,580 1,381 7,645 3,624 4,021 307,732 127,514 70,138 61,741 48,339 21,785 26,554 5,304 3,467 2,243 — (406) (378) (28) — — — — — — — 1,511 694 1,054 (115) (122) (86) (36) 740 247 163 42 288 258 30 63,105 29,170 9,929 8,088 15,918 7,443 8,475 — — — — — — — 70,660 33,578 13,389 8,015 15,678 7,237 8,441 6,134 5,264 (675) 2,286 17,965 4,021 34,995 217,023 63,464 29,941 24,770 98,848 50,524 48,324 209,711 111,468 31,736 12,004 54,503 25,793 28,710 4,322 1,142 2,113 451 616 (502) 1,118 24,812 7,700 5,921 4,319 6,872 739 6,133 211,255 55,241 14,519 107,577 33,918 17,383 16,535 69,015 14,880 7,286 13,038 33,811 18,751 15,060 736,138 253,895 91,516 162,159 228,568 112,688 115,880 Equity Companies As of December 31, 2021 Future cash inflows from sales of oil and gas Future production costs Future development costs Future income tax expenses Future net cash flows Effect of discounting net cash flows at 10% Discounted future net cash flows 10,607 5,005 2,340 — 3,262 1,553 1,709 — — — — — — — 5,889 785 1,137 1,793 2,174 683 1,491 4,553 261 62 1,168 3,062 1,868 1,194 146,845 49,810 8,317 29,463 59,255 25,710 33,545 — — — — — — — 167,894 55,861 11,856 32,424 67,753 29,814 37,939 Total consolidated and equity interests in standardized measure of discounted future net cash flows 50,033 28,710 2,609 7,327 50,080 15,060 153,819 (1) Includes discounted future net cash flows attributable to noncontrolling interests in ExxonMobil consolidated subsidiaries of $(150) million in 2020 and $3,666 million in 2021. 122 Change in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves Consolidated and Equity Interests 2019 Consolidated Subsidiaries Share of Equity Method Investees Total Consolidated and Equity Interests (millions of dollars) Discounted future net cash flows as of December 31, 2018 106,104 37,572 143,676 Value of reserves added during the year due to extensions, discoveries, improved recovery and net purchases/sales less related costs Changes in value of previous-year reserves due to: Sales and transfers of oil and gas produced during the year, net of production (lifting) costs Development costs incurred during the year Net change in prices, lifting and development costs Revisions of previous reserves estimates Accretion of discount Net change in income taxes Total change in the standardized measure during the year (1,252) 4 (1,248) (29,159) 16,544 (66,455) 4,906 11,433 25,379 (38,604) (8,202) 2,927 (21,046) 657 3,956 6,548 (15,156) (37,361) 19,471 (87,501) 5,563 15,389 31,927 (53,760) Discounted future net cash flows as of December 31, 2019 67,500 22,416 89,916 Consolidated and Equity Interests 2020 Consolidated Subsidiaries Share of Equity Method Investees Total Consolidated and Equity Interests (millions of dollars) Discounted future net cash flows as of December 31, 2019 67,500 22,416 89,916 Value of reserves added during the year due to extensions, discoveries, improved recovery and net purchases/sales less related costs Changes in value of previous-year reserves due to: Sales and transfers of oil and gas produced during the year, net of production (lifting) costs Development costs incurred during the year Net change in prices, lifting and development costs Revisions of previous reserves estimates Accretion of discount Net change in income taxes Total change in the standardized measure during the year 169 — 169 (15,048) 9,969 (80,444) 2,614 10,786 31,008 (40,946) (3,818) 1,760 (21,739) 680 3,011 6,131 (13,975) (18,866) 11,729 (102,183) 3,294 13,797 37,139 (54,921) Discounted future net cash flows as of December 31, 2020 26,554 8,441 34,995 123 Change in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves Consolidated and Equity Interests (continued) 2021 Consolidated Subsidiaries Share of Equity Method Investees Total Consolidated and Equity Interests (millions of dollars) Discounted future net cash flows as of December 31, 2020 26,554 8,441 34,995 Value of reserves added during the year due to extensions, discoveries, improved recovery and net purchases/sales less related costs Changes in value of previous-year reserves due to: Sales and transfers of oil and gas produced during the year, net of production (lifting) costs Development costs incurred during the year Net change in prices, lifting and development costs Revisions of previous reserves estimates Accretion of discount Net change in income taxes Total change in the standardized measure during the year 11,922 22 11,944 (35,813) 7,033 118,946 27,126 3,762 (43,650) 89,326 (9,948) 1,563 47,434 2,507 1,201 (13,281) 29,498 (45,761) 8,596 166,380 29,633 4,963 (56,931) 118,824 Discounted future net cash flows as of December 31, 2021 115,880 37,939 153,819 124 ADDITIONAL INFORMATION Stock Performance Graphs Frequently Used Terms Footnotes Board of Directors 126 127 129 130 125 STOCK PERFORMANCE GRAPHS (unaudited) Annual total return to ExxonMobil shareholders was 57.3 percent in 2021; the 5-year return through 2021 was -2.5 percent and the 10-year return was 0.9 percent. Total returns mean share price increase plus dividends paid, with dividends reinvested. The graphs below show the relative investment performance of ExxonMobil common stock, the S&P 500, and an industry competitor group over the last five and ten years. The industry competitor group consists of four other international integrated oil companies: BP, Chevron, Shell, and TotalEnergies. FIVE-YEAR CUMULATIVE TOTAL RETURNS (value of $100 invested at year-end 2016) $250 200 150 100 50 0 S&P 500 Industry Group ExxonMobil ExxonMobil S&P 500 Industry Group 2016 100 100 100 2017 96 122 119 2018 82 116 111 2019 88 153 122 2020 56 181 2021 88 233 85 115 Fiscal years ended December 31 TEN-YEAR CUMULATIVE TOTAL RETURNS (value of $100 invested at year-end 2011) $500 TEMPLATE CHART BASED ON DATA ABOVE 250 200 150 100 400 300 200 100 0 50 ExxonMobil S&P 500 2011 2016 100 100 Industry Group 100 2012 105 116 103 2013 2017 126 154 121 2014 118 175 111 2015 2018 103 177 92 2016 124 198 119 2017 2019 119 241 141 2018 101 231 132 S&P 500 Industry Group ExxonMobil 2019 2020 108 304 2020 69 359 2021 2021 109 463 145 101 137 Ind Group Fiscal years ended December 31 SP 500 XOM TEMPLATE CHART BASED ON DATA ABOVE 126 500 400 300 200 100 0 N O I S R E V FEB 15, 2022 8am 202 1 XOM10K- 5yearCumRet s.ai Ind Group SP 500 XOM N O I S R E V FEB 15, 2022 8am 202 1 XOM10K- 10year Returns.ai 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 FREQUENTLY USED TERMS Listed below are definitions of several of ExxonMobil’s key business and financial performance measures and other terms. These definitions are provided to facilitate understanding of the terms and their calculation. In the case of financial measures that we believe constitute “non-GAAP financial measures” under Securities and Exchange Commission Regulation G, we provide a reconciliation to the most comparable Generally Accepted Accounting Principles (GAAP) measure and other information required by that rule. Capital and exploration expenditures (Capex) • Represents the combined total of additions at cost to property, plant and equipment, and exploration expenses on a before-tax basis from the Consolidated Statement of Income. ExxonMobil’s Capex includes its share of similar costs for equity companies. Capex excludes assets acquired in nonmonetary exchanges, the value of ExxonMobil shares used to acquire assets, and depreciation on the cost of exploration support equipment and facilities recorded to property, plant and equipment when acquired. While ExxonMobil’s management is responsible for all investments and elements of net income, particular focus is placed on managing the controllable aspects of this group of expenditures. Structural cost savings (also structural cost reductions, structural cost efficiencies) • Structural cost savings describe decreases in the below expenses as a result of operational efficiencies, workforce reductions and other cost saving measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative annual structural cost savings totaled $4.9 billion, of which $1.9 billion was achieved in 2021. The total change between periods in expenses below will reflect both structural cost savings and other changes in spend, including market factors, such as energy costs, inflation, and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations. Structural cost savings are stewarded internally to support management’s oversight of spending over time. This measure is useful for investors to understand the Corporation’s efforts to optimize spending through disciplined expense management. Consolidated Statement of Income Line Items Targeted for Structural Cost Savings 2021 2020 2019 Production and manufacturing expenses Selling, general and administrative expenses Exploration expenses, including dry holes Total (millions of dollars) 36,035 9,574 1,054 46,663 30,431 10,168 1,285 41,884 36,826 11,398 1,269 49,493 Returns, investment returns, project returns • Unless referring specifically to ROCE, references to returns, investment returns, project returns, and similar terms mean future discounted cash flow returns on future capital investments based on current company estimates. Investment returns exclude prior exploration and acquisition costs. Heavy oil and oil sands • Heavy oil, for the purpose of this report, includes heavy oil, extra heavy oil, and bitumen, as defined by the World Petroleum Congress in 1987 based on American Petroleum Institute (API) gravity and viscosity at reservoir conditions. Heavy oil has an API gravity between 10 and 22.3 degrees. The API gravity of extra heavy oil and bitumen is less than 10 degrees. Extra heavy oil has a viscosity less than 10,000 centipoise, whereas the viscosity of bitumen is greater than 10,000 centipoise. The term “oil sands” is used to indicate heavy oil (generally bitumen) that is recovered in a mining operation. Performance product • Refers to Chemical products that provide differentiated performance for multiple applications through enhanced properties versus commodity alternatives and bring significant additional value to customers and end-users. Project • The term “project” can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. 127 Resources, resource base, and recoverable resources • Along with similar terms used in this report, these refer to the total remaining estimated quantities of oil and natural gas that are expected to be ultimately recoverable. The resource base includes quantities of oil and natural gas classified as proved reserves, as well as quantities that are not yet classified as proved reserves, but that are expected to be ultimately recoverable. The term “resource base” or similar terms are not intended to correspond to SEC definitions such as “probable” or “possible” reserves. The term “in-place” refers to those quantities of oil and natural gas estimated to be contained in known accumulations and includes recoverable and unrecoverable amounts. Roadmap (emission reductions) • The Company’s roadmap approach identifies greenhouse gas emission reduction opportunities and the investment and policy needs required to get to net zero. The roadmaps are tailored to account for facility configuration and maintenance schedules, and they will be updated as technologies and policies evolve. Separately, the reference case for planning beyond 2030 (including impairment assessments and future planned development activities) is based on the Energy Outlook, which contains the Company’s demand and supply projection based on its assessment of current trends in technology, government policies, consumer preferences, geopolitics, and economic development. As the roadmaps evolve, they continue to inform the Company’s planning process. 128 FOOTNOTES (pages I through XVI) 1. See the Frequently Used Terms. 2. Estimated Brent price to cover Capex, dividends to ExxonMobil shareholders, and other financing items. Further information is available in the 4Q 2021 Results Presentation available on the Investors section of our website at www.exxonmobil.com. 3. Net cash provided by operating activities, as reported in the Consolidated Statement of Cash Flows in ExxonMobil’s 2021 Form 10-K. 4. Total debt, as reported in the Financial Information section of ExxonMobil’s 2021 Form 10-K. 5. See ExxonMobil Advancing Climate Solutions – 2022 Progress Report on our website at www.exxonmobil.com, including the Cautionary Statement and Supplemental Information. 6. Billion oil-equivalent barrels of gross recoverable resource; see Frequently Used Terms on page 127 and the Cautionary Statement on page 131 of this Report. 7. Thousand oil-equivalent barrels per day of net production. 8. Proceeds from asset sales and returns of investments, as reported in the Consolidated Statement of Cash Flows. 9. ExxonMobil 2021 Investor Day Presentation, slide 12, available on the Investors section of our website at www.exxonmobil.com. 10. Cash dividends to ExxonMobil shareholders, as reported in the Consolidated Statement of Cash Flows in ExxonMobil’s 2021 Form 10-K. 11. Per U.S. EPA GHG calculator, based on 2021 data for gasoline-powered passenger vehicles. 12. Solomon Associates 2020 survey. 13. ExxonMobil analysis using Argonne National Labs’ GREET tools and published fuel carbon intensity from California LCFS regulations. 14. GDP: ExxonMobil’s 2021 Outlook for Energy. Commodity chemicals demand: IHS Markit World Analysis for polyethylene, polypropylene, and paraxylene. Exxon Mobil Corporation has numerous affiliates, many with names that include ExxonMobil, Exxon, Mobil, Esso, and XTO. For convenience and simplicity, those terms and terms such as Corporation, company, our, we, and its are sometimes used as abbreviated references to specific affiliates or affiliate groups. Abbreviated references describing global or regional operational organizations, and global or regional business lines are also sometimes used for convenience and simplicity. Similarly, ExxonMobil has business relationships with thousands of customers, suppliers, governments, and others. For convenience and simplicity, words such as venture, joint venture, partnership, co-venturer, and partner are used to indicate business and other relationships involving common activities and interests, and those words may not indicate precise legal relationships. The following are trademarks, service marks, or proprietary process names of Exxon Mobil Corporation or one of its affiliates: Exxon, ExxonMobil, ExxonMobil Low Carbon Solutions, Mobil, Mobil 1, and Mobil EV. 129 BOARD OF DIRECTORS As of January 1, 2022 Kenneth C. Frazier (Lead Director) Executive Chairman of the Board, Merck & Co., Inc. (pharmaceuticals) Director since 2009 Susan K. Avery President Emerita, Woods Hole Oceanographic Institution (nonprofit ocean research, exploration, and education) Director since 2017 Ursula M. Burns Former Chairman of the Board and Chief Executive Officer, VEON Ltd. (telecommunication services) Director since 2012 Kaisa H. Hietala Former Executive Vice President of Renewable Products at Neste Corporation (renewable energy) Director since 2021 Steven A. Kandarian Former Chairman of the Board, President, and Chief Executive Officer, MetLife (insurance) Director since 2018 Jeffrey W. Ubben Founder, Portfolio Manager, and Managing Partner, Inclusive Capital Partners, L.P. (financial services) Director since 2021 Michael J. Angelakis Chairman of the Board and Chief Executive Officer, Atairos Group Inc. (financial services) Director since 2021 Angela F. Braly Former Chairman of the Board, President, and Chief Executive Officer, WellPoint, Inc. (now Anthem) (health insurance) Director since 2016 Gregory J. Goff Former Executive Vice Chairman of the Board, Marathon Petroleum Corporation (refining and marketing) Director since 2021 Joseph L. Hooley Former Chairman of the Board, President, and Chief Executive Officer, State Street Corporation (financial services) Director since 2020 Alexander A. Karsner Senior Strategist at X (formerly Google X) (technology) Director since 2021 Darren W. Woods Chairman of the Board and Chief Executive Officer Director since 2016 STANDING COMMITTEES OF THE BOARD Audit Committee U.M. Burns (Chair), M.J. Angelakis, K.H. Hietala, J.L. Hooley Board Affairs Committee K.C. Frazier (Chair), S.K. Avery, G.J. Goff, A.A. Karsner Compensation Committee A.F. Braly (Chair), K.C. Frazier, G.J. Goff, S.A. Kandarian Finance Committee J.L. Hooley (Chair), M.J. Angelakis, U.M. Burns, K.H. Hietala, J.W. Ubben, D.W. Woods Public Issues and Contributions Committee S.K. Avery (Chair), A.F. Braly, S.A. Kandarian, A.A. Karsner, J.W. Ubben Executive Committee D.W. Woods (Chair), M.J. Angelakis, U.M. Burns, K.C. Frazier, G.J. Goff 130 I N V E S T O R I N F O R M A T I O N S H A R E H O L D E R S E R V I C E S M A R K E T I N F O R M A T I O N Shareholder inquiries should be addressed to ExxonMobil Shareholder Services at Computershare Trust Company, N.A., ExxonMobil’s transfer agent: The New York Stock Exchange is the principal exchange on which Exxon Mobil Corporation common stock is traded. S T O C K S Y M B O L : X O M ExxonMobil Shareholder Services c/o Computershare P.O. Box 43006 Providence, RI 02940-3006 1-800-252-1800 (Within the United States and Canada) 1-781-575-2058 (Outside the United States and Canada) An automated voice-response system is available 24 hours a day, 7 days a week. Service representatives are available Monday through Friday 8 a.m. to 8 p.m. Eastern Time. Registered shareholders can access information about their ExxonMobil stock accounts via the Internet at computershare.com/exxonmobil. S H A R E H O L D E R R E L A T I O N S A D D R E S S Exxon Mobil Corporation Attn: Shareholder Relations 5959 Las Colinas Boulevard Irving, TX 75039-2298 Additional copies may be obtained by writing or calling: Phone: 972-940-6000 Fax: 972-940-6748 Email: shareholderrelations@exxonmobil.com S T O C K P U R C H A S E A N D D I V I D E N D R E I N V E S T M E N T P L A N Computershare Trust Company, N.A., sponsors a stock purchase and dividend reinvestment plan, the Computershare Investment Plan for Exxon Mobil Corporation Common Stock. For more information and plan materials, go to computershare.com/exxonmobil or call or write ExxonMobil Shareholder Services. A N N U A L S H A R E H O L D E R M E E T I N G The 2022 Annual Meeting of Shareholders will be held virtually at 9:30 a.m. Central Time on Wednesday, May 25, 2022. Important shareholder information is available at exxonmobil.com: • Publications • Dividend Information • Earnings and Financials • Investor Presentations • Stock Quote • Contact Information • News Releases • Corporate Governance Cautionary Statement • Statements of plans, outlooks, targets, ambitions, and other future events or conditions in this report are forward-looking statements. Actual future results, including financial and operating performance; demand growth and mix, including the timing and nature of future markets for low emission energy products and technologies, and our related product sales levels and mix; capital expenditures; cost reductions; debt levels and allocation of capital; earnings and cash flow growth and shareholder returns; the ability to meet or exceed announced emission reduction plans and ambitions; resource recoveries; production rates; and project plans, timing, costs, and capacities could differ materially due to a number of factors including global or regional changes in supply or demand for oil, gas, or petrochemicals and other conditions affecting oil, gas, and petrochemical prices; the pace of recovery from, and the occurrence and severity of future outbreaks, of COVID-19 and the nature of responsive actions; the ability to realize efficiencies within and across our business lines and to maintain cost reductions while protecting our competitive positioning; our ability to recognize and adapt to changes in the global energy system, including the transition to lower emission technologies, and to invest on a timely basis in successful future businesses; the outcome and timing of exploration and development projects; timely completion of construction projects; war and other security disturbances; political factors including changes in local, national, or international policies affecting our business and development of appropriate policies to support the energy transition; changes in law or government regulations, including trade sanctions, taxes, and environmental regulations relating to the risks of climate change; the granting of necessary licenses and permits; the outcome of commercial negotiations; actions of competitors and commercial counterparties; actions of consumers including changes in demand preferences; the outcome of research efforts, including the success of collaborative efforts to develop new energy technologies, and the ability to bring new technologies to commercial scale on a cost-competitive basis; the development and competitiveness of alternative energy and emission reduction technologies; unforeseen technical or operating difficulties; and other factors discussed here and in Item 1A. Risk Factors, and under Forward Looking Statements on page 42, of our 2021 Form 10-K which forms part of this report. All forward-looking statements are based on management’s knowledge and reasonable expectations at the time of this report and we assume no duty to update these statements as of any future date. As used in this publication, references to “recoverable resource” and similar terms include quantities of oil and gas classified as proved reserves, as well as quantities that are not yet classified as proved reserves, but that are expected to be ultimately recoverable. “Industry” refers to publicly traded international energy companies. The term “project” can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. Unless otherwise specified, data shown is for 2021. Prior years’ data have been reclassified in certain cases to conform to the 2021 presentation basis. Unless otherwise stated, resources, production rates, and project capacities are gross. References to “emissions” refer to energy-related emissions. © 2 0 2 2 E X X O N M O B I L C O R P O R A T I O N Exxon Mobil Corporation Corporate Headquarters 5959 Las Colinas Boulevard Irving, TX 75039-2298 002CSNCA52 Printed in U.S.A. For more information, visit exxonmobil.com 

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