IRVING, Texas, Dec. 2 /PRNewswire/ -- The following was issued today by
Exxon Mobil Corporation (NYSE: XOM):
Today Exxon Mobil Corporation launched its new worldwide global structure.
A news release regarding this follows. Key points in the news release
include:
-- The corporation will employ an organization structure built on a
concept of eleven separate global businesses.
-- A new update on synergy benefits is expected by mid-December;
preliminary studies over the last 10 months suggests the near-term
benefits will likely be higher than the $2.8 billion annually
announced in December of last year.
-- 140 transition teams composed of 1,500 Exxon and Mobil employees have
completed a significant amount of merger work.
-- The corporation's global headquarters are officially up and running in
Irving, Texas. Functional business line headquarters in Houston and
Fairfax also are in operation.
-- Five global upstream companies, the Chemical company and the Coal and
Minerals company will be located in Houston.
-- Four global downstream companies will be based in Fairfax, Virginia.
-- All three Exxon, Esso and Mobil brands will be retained.
-- L. R. Raymond, former Chairman and Chief Executive Officer of Exxon,
is Chairman and Chief Executive Officer.
-- L. A. Noto, former Chairman and Chief Executive Officer of Mobil, is
Vice Chairman.
-- The 19-member Board will include six directors from Mobil and 13 from
Exxon.
Exxon Mobil Corporation announced today that it has launched a new
organization structure built on a concept of eleven separate global businesses
designed to allow the company to compete more effectively in a changing
worldwide energy industry.
Lee Raymond, Chairman and Chief Executive Officer of the corporation, also
said that by mid-December the company will announce a revised forecast of
merger benefits that will likely exceed the $2.8 billion annual level
announced last year.
Regarding the synergy benefits the companies announced in December of 1998
Raymond said, "At that time, we announced an expectation that the near-term
benefits would total $2.8 billion annually, on a pre-tax basis. Since that
time, our business transition teams have done a lot more planning and analysis
around how to combine the two companies and, at the same time, reorganize how
we manage the business -- with a clear goal of maximizing the company's
overall performance. We are convinced that the combined company will achieve
a higher return on capital than either company could have done alone.
"Much of what has been done since last December has, in effect, focused on
maximizing synergy benefits. We now have a much better understanding of what
we can achieve, how we can achieve it and how much it could be worth. We have
not yet, however, turned that understanding into an updated forecast. Our
plan is to do some post-closing work -- with an expectation that we will be
able to announce a revised forecast of synergy benefits by mid-December. I
will tell you that all we have seen and all we have found during the past
10 months suggests that the updated number will likely be higher than the
$2.8 billion annual level announced last year."
Raymond added that the December 1, 1998 projection of a worldwide
reduction in workforce of about 9,000 may also be revised in the new forecast.
He expressed concern for those employees who will be leaving as a result of
the merger, but noted that comprehensive severance packages and job placement
assistance would be available to those employees who are not offered positions
with the new company.
Regarding the significant organizational work accomplished over the last
year, Raymond said, "We believed almost a year ago that this merger was a
great opportunity and, today, we are even more convinced of that. Our clear
objective is to be the world's premier petroleum and petrochemical company.
This merger will significantly enhance shareholder value and allow us to meet
the needs of customers for quality products at competitive prices in the next
century."
Raymond noted that Exxon and Mobil have historically shared a number of
core values that will continue to guide the management of ExxonMobil. "First
and foremost, Exxon and Mobil shared a common resolve to maintain the highest
standards for safety, health, and environmental care. The companies also
shared a long-term commitment to creating shareholder value and a history of
strong performance based on efficiency, capital productivity, and
technological leadership," he said.
Transition Well Underway
Raymond noted that a significant amount of merger planning and transition
work has already been completed.
"We started in the first quarter of 1999 with 150 people assigned to about
25 'core' transition teams. That number grew to more than 1,500 Exxon and
Mobil people working on 140 teams just prior to closing. Throughout the
process the teams have functioned extremely well -- with a high level of
camaraderie and a common sense of purpose. This was an exceptional bonus --
exceeding everyone's expectation and a source of great confidence in how well
the organization will blend together," he said.
Raymond noted that ExxonMobil's corporate headquarters are officially up
and running in Irving, TX. The Board of Directors has taken all the necessary
actions to complete the merger and the company's new organizational structure.
Financial reporting and cash handling processes are also in place, as are the
company's emergency response and communication plans. Key policies and
compensation and benefits programs are also in effect, primarily for U.S.
employees. In most other locations, the existing policies and programs will
continue to apply until new ones are adopted by the local affiliates, which in
some cases are subject to works council and labor agreements.
Each of the functional business line headquarters offices in Houston and
Fairfax are in operation, and organizational plans have been developed for
regional centers and other key office locations. These plans are being
rapidly implemented, giving each functional company full readiness in managing
their day-to-day business activities.
New Corporate Structure
Raymond emphasized that in combining these two high-quality organizations,
"Our primary objective was to create a better company -- not a bigger company.
ExxonMobil, first and foremost, is a new kind of organization -- one that will
be able to distinguish itself in terms of its unique abilities and
performance. It is different from either of its components and from any other
company in the energy industry today."
Raymond said that ExxonMobil will employ a new organization structure
built on a concept of eleven separate global businesses designed to allow the
company to compete most effectively in the ever-changing and challenging
worldwide energy industry. He stated that this new structure will result in a
more focused approach as individual business lines are able to prioritize
opportunities and allocate resources on a worldwide basis. Raymond stressed
that the new global orientation will also lead to faster identification and
implementation of best practices, which is so critical to achieving and
maintaining competitive leadership.
Five global upstream companies -- Exploration, Development, Production,
Gas Marketing and Upstream Research -- will be headquartered in Houston along
with the Chemical company and the Coal and Minerals company. Four downstream
companies -- Fuels Marketing, Lubricants & Petroleum Specialties, Refining &
Supply, and Research and Engineering -- will be based in Fairfax, Virginia.
The company's senior management, in addition to Raymond and Lou Noto, Vice
Chairman of ExxonMobil and former CEO and Chairman of Mobil Corporation,
includes four senior vice presidents: Rene Dahan, Harry J. Longwell, Eugene A.
Renna, and Robert E. Wilhelm. Dahan, Longwell, and Wilhelm were formerly
senior vice presidents with Exxon Corporation. Renna was President and Chief
Operating Officer of Mobil Corporation.
The chemical and the coal and minerals companies will report to Dahan.
The upstream companies will report to Longwell, and the downstream companies
to Renna. Several corporate staff departments and service groups will report
to Wilhelm.
The ExxonMobil board of directors consists of 13 non-employee directors
and six employee directors who are the members of the senior management team.
Of the non-employee directors, nine were members of the Exxon board and four
sat on the Mobil board.
Global Scope/Solid Operational Performance
ExxonMobil has a presence in nearly 200 countries. The company has
exploration or production operations in some 50 countries. The company sells
fuels and chemicals in about 120 countries, and lubes in almost 200. Major
manufacturing facilities for these products are strategically located in
24 countries.
"A key benefit of the merger is that it allows us to compete more
effectively with the recently combined multinational oil companies and the
very large state-owned oil companies that are rapidly expanding outside their
home areas," Raymond said. "In addition," he added, "ExxonMobil will benefit
as proprietary technology and customer offerings that were developed
separately are shared and further improved."
In discussing the strategic fit of Exxon and Mobil, Raymond said the two
companies align well with each other in almost every facet of the business.
"In the exploration and production area, for example, Mobil's and Exxon's
respective strengths in Europe, Asia-Pacific, West Africa, the Caspian region,
Russia, South America, and North America line up well, with minimal overlap.
Our respective deepwater assets and deepwater technology also complement each
other well."
Outstanding Portfolio/Well-Positioned for Growth
The company, with headquarters in Irving, Texas, will be a worldwide
leader among energy companies, benefitting from unsurpassed functional and
geographic diversity with strong global brands and leading positions in key
businesses. Its operations range from exploration for and production of oil
and gas to manufacturing and marketing of fuels, lubricants and chemicals, to
mining of coal and minerals. In addition, the company is one of the world's
premier independent power generators.
ExxonMobil is well-positioned in both established and high-growth markets,
as well as resource-rich upstream areas. It also has the financial capacity
to pursue very large high-quality investment opportunities, positioning it
extremely well for future growth.
"While ExxonMobil has industry-leading financial, operational and
technological assets, it is our employees who provide the most valuable and
lasting competitive advantage," said Noto. "Never in the history of our two
companies will this advantage be as crucial as during the next several years
as we jointly reach for the exceptional benefits of this merger."
Mobil also brings major liquefied natural gas assets and experience to the
combined company, complementing Exxon's natural gas assets and gas-to-liquids
technology.
Noto said that in refining, marketing and chemicals, Exxon and Mobil each
have significant global brand recognition, expertise and technology. "We will
retain the Exxon, Esso, and Mobil brands, which are among the best recognized
and trusted in the world. Those brands are complemented by ExxonMobil's
strong retail operations which are located in key established as well as high-
growth markets around the globe. In the lubricants area, Exxon is the world's
leading producer of high-quality lube base stocks, which fits well with
Mobil's leadership in finished lubes technology and marketing. The company's
network of 43 refineries are well-positioned geographically to serve our fuels
customers most efficiently. Many are world-scale in size and enjoy the
benefits of integration with lubricants and petrochemicals manufacturing."
In the chemical businesses, he added that ExxonMobil's manufacturing
strength, business mix, and technological leadership position it well to
become the world's premier petrochemical company.
"Our current sales of about $15 billion/year make us one of the world's
largest petrochemical companies -- but customer preference and profitability,
not size, will make us the premier company," Noto said.
The company's new trademark is ExxonMobil. Designed specifically to
utilize the visual components of both the Exxon and Mobil brands, the logo
retains Exxon's interlocking X's and Mobil's red "O." The two names are
connected to emphasize the unity of the combined company.
ExxonMobil Board Of Directors
Michael J. Boskin, T.M. Friedman Professor of Economics and Senior
Fellow, Hoover Institution, Stanford University
Rene Dahan, Senior Vice President, Exxon Mobil Corporation
William T. Esrey, Chairman and CEO, Sprint Corporation
Donald V. Fites, former Chairman and CEO, Caterpillar, Inc.
Jess Hay, Chairman, Texas Foundation for Higher Education and HCB
Enterprises, Inc., a private investment firm
Charles A. Heimbold, Jr., Chairman and CEO, Bristol-Myers Squibb Company
James R. Houghton, Chairman Emeritus, Corning Incorporated
William R. Howell, Chairman Emeritus, J.C. Penney Company, Inc.
Helene L. Kaplan, Of Counsel to the law firm of Skadden, Arps, Slate,
Meagher & Flom LLP
Reatha Clark King, President and Executive Director, General Mills
Foundation and Vice President, General Mills, Inc.
Philip E. Lippincott, Chairman, Campbell Soup Company, retired Chairman
and CEO, Scott Paper Company
Harry J. Longwell, Senior Vice President, Exxon Mobil Corporation
J. Richard Munro, former Co-Chairman and Co-CEO, Time-Warner Inc.
Marilyn Carlson Nelson, Chairman and CEO, Carlson Companies, Inc. and
co-chair of Carlson Wagonlit Travel
Lucio A. Noto, Vice Chairman, Exxon Mobil Corporation
Lee R. Raymond, Chairman and CEO, Exxon Mobil Corporation
Eugene A. Renna, Senior Vice President, Exxon Mobil Corporation
Walter V. Shipley, Chairman, The Chase Manhattan Corporation and The
Chase Manhattan Bank
Robert E. Wilhelm, Senior Vice President, Exxon Mobil Corporation
ExxonMobil Combined Worldwide 1998 Facts And Statistics
Financial
-- Net Income ($B) 8.1
-- Total Revenues ($B) 170
-- Average Capital Employed ($B) 82
-- Capital and Exploration Expenditures ($B) 15.5
-- Return on Average Capital Employed (%) 11%
Upstream Operating
-- Proved Reserves (billions of oil-equivalent barrels) 21.3
-- Crude/Natural Gas Liquids Production (million barrels per day) 2.5
-- Gas Production (billion cubic feet per day) 11.3
-- Crude/Natural Gas Liquids Proved Reserves (billions of barrels) 11.5
-- Gas Proved Reserves (trillion cubic feet) 58.0
-- Countries (Exploration or Production) Approx. 50
Downstream Operating
-- Petroleum Product Sales (million barrels per day) 8.8
-- Service Stations (thousands) 40+
-- Convenience Stores (thousands) 15
-- Refinery Thruput (million barrels per day) 5.5
-- Refineries 44
-- Countries with Refineries 24
-- Fuels Marketing (number of countries) Approx. 120
Chemical Operating
-- Prime Product Sales (million tons) 21
-- Revenues (incl. Intersegment) ($B) 15
-- Manufacturing Sites 73
-- Countries with Manufacturing 24
-- Olefins Capacity (million tons per year) 11.2
-- Polyolefins Capacity (million tons per year) 6.4
Other Operating
-- Employees (thousands) 123
-- Common Shares Outstanding (billion) 3.5
-- Business Presence (number of countries) Approx. 200
SOURCE Exxon Mobil Corporation
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http://www.exxon.mobil.com
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CONTACT:
Media Relations of Exxon Mobil Corporation,
972-444-1107
NOTE TO EDITORS: Photos of senior executives, senior management
organization chart, maps, logos and brands to accompany this
story are available and can be retrieved in digital form by media
without charge from Wieck Photo DataBase, 972-392-0888. These
materials can also be obtained from the ExxonMobil internet site
at exxon.mobil.com. B-roll footage of ExxonMobil headquarters,
exploration and production, liquefied natural gas operations,
marketing operations, refinery operations, chemical operations,
graphics of new ExxonMobil logo and sound bites from Lee Raymond,
ExxonMobil CEO, are available at the following times and
locations: 8:00 - 8:30 a.m. EST -- Telstar C-4, Transponder 4
10:00 - 10:30 a.m. EST -- Telstar C-6, Transponder 15 12:00 -
12:30 p.m. EST -- Telstar C-6, Transponder 15
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