ExxonMobil Corporation (NYSE:XOM)
Annual Shareholder Meeting Call
May 29, 2013 10:00 AM ET
Rex Tillerson - Chairman and CEO
David Rosenthal - VP, Investor Relations and Secretary
David Ridenour - The National Center for Public Policy Research
Sonia Kowal - Zevin Asset Management
Patrick Young - United Steelworkers
Good morning, ladies and gentlemen. Would you please take your seats if you haven’t bound one yet? We have three clocks up here but we are going to call at 9 o’ clock then none of them are green. So, I would ask that the meeting come to order. I'm Rex Tillerson, Chairman and Chief Executive Officer of the ExxonMobil Corporation. I am pleased that so many of you are here with us today in person, but I also want to acknowledge and welcome those shareholders or other interested parties who may be joining us by way of the Internet. I do hope that you have an opportunity to meet some of our employees in person while visiting the various exhibits they are out in the foyer area. They are just a small sample of the more than 77,000 men and women who work on your behalf, 24 hours a day, 365 days a year, everyday of the week. Some of them in very difficult locations around the world, they are working hard representing the shareholder’s interest, ultimately to deliver much needed energy to the rest of the world.
So, I will have the opportunity this morning when I go through the business report, share with you some of the results of 2012 but it is really my high honor that I get the share with you their results because I really stand here and speak on their behalf and I am quite proud to do so. David Rosenthal is seated to my right. He is the Vice President of Investor Relations and the Corporate Secretary and he is going to the help me conduct the meeting today. I will introduce members of the board to you later in the meeting.
As mentioned on Page 2 of the proxy statement, it is the policy of the corporation to provide shareholders an opportunity for privacy in voting. For shareholders who returned their proxy cards without written comments, the voted proxies have not been seen by nor reported to the corporation, except in aggregate number. Anyone turning in a proxy card at this meeting who wishes to keep his or her votes secret may obtain an envelope from the ushers. Proxy cards will be collected later in the meeting.
A list of shareholders entitled to vote at this meeting or at any adjournment thereof is available for inspection. If anyone wishes to examine this list, an usher will be pleased to direct you to the proper location. Charles Rossi and Rebecca Finser (ph) of Computershare Trust Company have been appointed inspectors of the election for this meeting. They have taken an oath of office that has been delivered to the secretary for filing with the minutes of the meeting. Notice of this meeting has been properly given and the inspectors of election have determined that a quorum is present. There are more than 99,000 shareholders represented at this meeting, holding at least 3.6 billion shares or approximately 82% of the issued and outstanding shares of stock of the corporation entitled to vote. I direct that the inspectors' written determination as to the number of shares entitled to vote at the meeting be filed with the minutes. I declare a quorum present and the meeting ready for business.
I'd now like to explain our plan for conducting the meeting today. First, Secretary Rosenthal will outline the rules of conduct and how to gain recognition. Then I will make some brief comments about our business results and the future we see for your company. After that, the 11 items of business will be presented, beginning with the election of directors, the ratification of independent auditors and the advisory vote to approve executive compensation all of which are required by law. Then we will continue with the 8 shareholder proposals shown in the proxy statement, which was sent to all shareholders.
As described in the annual meeting program, discussion on the 11 items of business will be deferred until all items have been presented. Time permitting, we will respond to some of the questions submitted ahead of time via proxy cards or perhaps on the internet. Upon completion of the discussion on the items of business and voting, the polls will be closed, the formal business of this year's annual meeting will be concluded, and the inspector of elections will prepare their preliminary voting report.
While this is occurring, there should be some additional time available for comments and questions about ExxonMobil's business. When the inspectors are ready, I will ask them to give us their voting report. We will then conclude the meeting. At this time, let me turn the podium over to David Rosenthal to discuss the rules of conduct.
Good morning. I would now like to cover several aspects of today's meeting. But before we continue, I would like to take this opportunity to familiarize everyone with the safety features of this auditorium. In case of an emergency, we will be notified through the public address system. Emergency exits for the ground level as shown on the screen above me, are situated at the rear of the auditorium, where you entered, and down and front on either side. If we need to evacuate, just proceed to the nearest exit and the Meyerson personnel will guide you to the best way out. In addition, for safety reasons, please do not stand in the aisles or at the back of the hall and do not block the exits.
To ensure that the meeting is conducted in the interest of all shareholders, there are certain rules of conduct governing this meeting. These rules are posted on signs at the entrances to the meeting, are included in the program and are shown on the screen above me. Let me now cover several of the rules.
The distribution of pamphlets and other literature, banners, signs and other displays is strictly prohibited in the hall. Anyone who intentionally obstructs or interferes with this lawful meeting by physical action or verbal utterance is in violation of Texas law. Any persons engaging in such conduct will be asked to cease. And if they refuse, they will be escorted from the meeting. The laws of New Jersey, where ExxonMobil is incorporated, provide that no business can be brought up for a vote unless proper notice has been given to all shareholders. Therefore, in fairness to other shareholders not in attendance, and in keeping with the laws that govern our annual meeting, formal business at today's meeting is restricted to the items that were included in this year's proxy statement. Additional proposals may not be introduced from the floor.
In order to present a proposal, you must have checked in at the admissions desk in the lobby and verified that you are the proponent or a duly authorized proxy under New Jersey law. Presenters whose credentials have been verified will be given a blue presenter’s pass. If neither the proponent nor an authorized proxy has checked in and obtained a presenter’s pass, we will presume the proponent is not present. And I will move the proposal for the purposes of the orderly conduct of the meeting and so that the shareholder votes cast may be recorded. However, I will not be acting as a representative of the proponent. The authorized presenter of a shareholder proposal will have up to 3 minutes to present the proposal. Time may not be shared with another speaker. No second to the motion is required. Discussion on all items of business will be deferred until the discussion period later in the meeting.
Only shareholders as of the record date or their properly appointed proxies are entitled to speak at this annual meeting of ExxonMobil shareholders. Shareholders making comments during the meeting must speak or have their words translated into English so that the majority of shareholders present can understand what is being said.
Comments that are offensive or otherwise inappropriate will not be permitted. We would also ask that any issues of personal interest that are not relevant to all shareholders be raised directly with appropriate company representatives outside of the annual meeting. We request that individual shareholders respect the rights of others to speak and keep their comments as brief as possible. As noted in the proxy statement, the Chairman has broad authority to conduct the meeting in an orderly and timely manner.
If you wish to make comments, you must first fill out a speaker identification card that is included in the program that was provided to you as you entered the lobby. This card confirms that you meet the requirements to speak at this meeting. Give the completed card to the usher when you are recognized to address the meeting.
To ensure that as many shareholders as possible who want to address the meeting today have the opportunity to do so, we ask you to follow these additional instructions. If you would like to address the meeting, move to a reserved aisle seat, remain seated and raise your hand, holding your speaker identification card to indicate to the Chairman that you wish to speak. When recognized by the Chairman, give your completed speaker card to the usher and a microphone will be provided. Stand and begin by stating your name. Unless otherwise provided in these rules, you may speak for up to 2 minutes. Due to the large number of items on today's agenda, and the need to conclude the meeting within a reasonable period of time, we cannot assure that every shareholder who wishes to speak will be able to do so. First priority will be given to those who have not yet had an opportunity to speak.
As we have done in the past, we have provided a timing system with lights that will help speakers manage their time. I would like to demonstrate the system at this time. When the Chairman recognizes a speaker and a microphone has been provided by the usher, a green light will come on at the displays on both sides of the stage. The hall microphones will be activated only after the speaker has been recognized by the Chairman. When the speaker's time remaining reaches 30 seconds; a yellow light will turn on. A red light will indicate the speaker is at the end of their time allowed.
Finally as we typically note at the outset of similar meetings, I would like to draw your attention to our cautionary statement that is shown on the slide. This statement contains information regarding today’s presentation and discussion. You may also refer to our website ExxonMobil.com for additional information on factors effecting future result as well as supplemental information to finding key terms that we will use throughout the meeting today. Thank you.
Thank you David. Shortly we will address our items of business, however, I will first share with you some highlights from the 2012 financial and operating results, give a summary overview of our annul energy outlook, and provide you with a business and operational update. Our approach to managing the business continues to distinguish ExxonMobil and places us in a unique competitive position to help meet the world’s evolving energy needs and deliver superior value to our shareholders over the long term. I will start with the review of our financial and operating performance.
Overall I am pleased with our 2012 performance when assessed across a variety of financial and non-financial measures. First and most importantly, we continued our relentless focus on operational excellence, including safety performance and environmental management. We delivered earnings of $44.9 billion, second highest in the history of the Company. A return on average capital employed of 25.4%, and cash flow from operations and asset sales of $63.8 billion. These results reflect the strength of our proven business model and enable us to fund our investment program in disciplined way and to deliver unmatched shareholder distributions.
In 2012 we invested $39.8 billion in capital expenditures and total shareholder distributions were $30.1 billion. For the 19th consecutive year, we added more oil and natural gas reserves than we produced and our crude reserve replacement rate exceeded 100%. All of the above results reflect the hard work, diligence and dedication of the almost 77,000 men and women who work on ExxonMobil's behalf the world over.
As you’ve heard me say often, nothing receives more management attention at ExxonMobil than the safety and health of our employees, our contractors, our customers and the people who live and work in the areas where we operate. We also know that safety performance is a leading indicator of good business performance. Our vision, that nobody gets hurt, is fundamental to operational excellence. While never satisfied, our safety performance remains strong and improving with the relentless focus on effective risk management.
In 2012, performance improved notably from 2011 which as some of you will recall represented a basis change from 2010 as a result of including XTO for the first time. As a result of integration of our safety and OIMS practices, XTO's performance has measurably improved both employee and contractor workforces experienced reductions incident severity with our employee lost time incident rate nearing best ever performance levels.
We remain dedicated to the highest standards of safety and health and are committed to continuing this improvement trend. To do so require commitment at all levels within our company. An organization cannot be complacent or content with past safety performance and we will not be satisfied until we can conclude each day and say nobody got hurt.
Let’s now look at our environmental performance. Meeting the world’s growing need for energy while minimizing impacts on the environment is one of society’s great challenges. At ExxonMobile, rigorous environmental management programs are in place in every operation worldwide to deliver ongoing improvement at our global environmental performance throughout the lifecycle of our operations which typically span decades.
The results of this disciplined focused are significant, particularly in the area of energy efficiency. For example, in 2002 we committed along with other companies in our industry to achieve a 10% improvement in energy efficiency across our entire global refining and chemical operations by the year 2012. I am proud to report that ExxonMobile delivered on this commitment.
As indicated by the graph on this slide we have reduced greenhouse gas emissions by nearly 11 million tons in the last five years which is equivalent to taking almost 2 million cars off the roads in the United States. We also continue to progress initiatives to reduce the hydrocarbon flaring associated with our upstream operations. Since 2008, we have decreased hydrocarbon flaring by 40%.
Regrettably, a spill of crude oil from the Pegasus pipeline occurred in Mayflower, Arkansas in late March. As a result of our emergency response preparedness, our organization was well positioned to mount an immediate and thorough response and is committed to full restoration of the environment and the community in Mayflower. Despite the incident, we continue to make progress in reducing other hydrocarbon releases into the environment, most notably in spills of oil, products, chemicals, and drilling fluids.
Our marine organization which moved 1.8 billion barrels of oil and products on the oceans and waterways in 2012 has now gone more than three years with no hydrocarbon spills from company operated or term charted vessels. Additionally, this is the first year in which cumulative spills were less than one barrel from spot charted vessels.
In summary, we continue to place a high priority on our commitment to protect tomorrow today. ExxonMobile led the industry in 2012 with earnings of $44.9 billion, an increase of 9% compared to 2011 reflecting sound operational performance, capturing value from our integration advantages and the value derived from our ongoing asset management activities. Meanwhile, earnings per share increased 15% reflecting the added benefit of our substantial share buybacks.
In 2012, ExxonMobile's return on capital employed was an industry leading 25.4% about 7 percentage points higher than our nearest competitor. Over the past five years, ROCE averaged 24.4%, about 6 percentage points higher than our nearest competitor demonstrating the robustness of our long term disciplined approach to investing in the business.
In 2012, we invested $39.8 billion in capital expenditures to continue positioning the business for long term growth and sustainability. Over the past five years, we have invested $162 billion utilizing the corporation's financial strength and flexibility to invest through the business cycle and capture new opportunities.
Our approach to investing is to advance all attractive opportunities that will provide competitive returns when tested across a broad range of industry and future market conditions, maintaining capital efficiency and discipline underpins our long term success.
Another measure of the value created through strong financial and operating performance is the cash flow remaining after fully funding attractive investment opportunities. Over the past five years ExxonMobil generated a $138 billion of free cash flow. This almost equals the combined total of all of our competitors. Consistent, robust, free cash flows provide capacity for unmatched shareholder distributions and underpins a strong financial position. Our dividend payouts are made with a view of building long term shareholder value and providing reliable, real dividend growth, not just through the ups but also the downs of the business cycle.
Over the past five years we distributed $44 billion in dividends to shareholders. Since 1983 through multiple business cycle expansions and contractions shareholders have received annual per share dividend increases at an annualized growth rate of 6.1%, more than double the rate of inflation. We recently announced a 2nd quarter 2013 dividend payable June 10th of $0.63 per share, 10.5% increase over the previous quarterly rate bringing our ten year annualized growth rate to 9.7% per year. Share purchases are an efficient and flexible way of returning cash to our shareholders, while maintaining flexibility to balance the cash needs of the corporation. In 2012 distributions to shareholders through share purchases were $20 billion and just over a $100 billion over the last five years. Purchases have reduced shares outstanding by over 35% since the Exxon and Mobil merger including the impact of shares issued for XTO.
Another benefit of our ongoing share purchase program is the enhanced per share interest in ExxonMobil's producing assets. For example each share of ExxonMobil owns 21% more oil and gas production volumes today than it did in 2008, well above our competitor growth. Since 2008 ExxonMobil has delivered annualized production for share growth of 5%, more than 3 percentage points higher than our nearest peer. This slide shows reserve replacement and resource additions over the past five years. For the 19th consecutive year we replaced more than a 100% of production. In 2012 we had improved oil and gas reserves totaling 1.8 billion oil equivalent barrels. During 2012 we added over 4 billion oil equivalent barrels to the resource base. Exploration by the bid resource additions were over 2.9 billion oil equivalent barrels, the highest level since the ExxonMobil merger.
Now I'd like to share our views on the long term trends that shape ExxonMobil's business plans. Each year as most of you know, we take a broad in depth look at the global energy market place and we author a comprehensive report entitled the Outlook for Energy. By the year 2040, the world's population is expected to increase by close to two billion people and with it expanding economic prosperity. Coincident with these changes ExxonMobil's 2013 Outlook for Energy indicates global energy demand is likely to grow about 35%, ensuring reliable and affordable energy supplies to support this growth safely and while managing impacts to the environment will require broad based economic solutions. While we anticipate a gradual shift in the global energy mix, consumption of oil will remain most prominent as the fuel of choice to meet expanding transportation needs. Demand for natural gas will rise about 65% and will become the second most widely used source of energy. Natural gas is increasingly recognized as a reliable affordable and clean fuel for a variety of applications and its growth is supported by advanced technologies that are unlocking abundant resources and advancing ever broader utilization.
We expect that oil and other liquid fuels will remain the world's largest energy source in the year 2040, while conventional crude oil production will remain the most significant source of supply through this period demand growth will be met by development of new sources through application of advancing technologies, as you can see in the chart on the left, the most significant gains are expected from global deep water resources, however important growth is also expected from oil sands, and tight oil resources. Natural gas liquid supply is expected to increase as a byproduct of the significant growth of natural gas production. The plot on the right is natural gas supply and demand; an increasing share of global natural gas demand is expected to be met by unconventional supplies. The oil and gas outlooks make clear the important role of unconventional capabilities along with expanding existing deep water and ongoing improvement in conventional capability. By the year 2040 we expect energy demand for the transportation sector to increase more than 40%. However as shown on the chart the transportation product mix is changing. We expect the continuing shift of the transportation fuel mix towards diesel with continued gradual declines in demand for gasoline. In fact we expect diesel account for about 70% of demand growth for liquid transportation fuels. This largely reflects high growth rates in developing countries as greater truck, rail and marine transportation support expanding economic activity.
We expect global chemical demand to grow at a faster pace than GDP as people seek higher standards of living and purchase more household and packaging goods manufactured with chemical products. We estimate two-thirds of chemical demand growth will be in the Asia-Pacific region. As this region acquires chemical feedstock products to manufacture goods for domestic and export markets. China alone is expected to represent over half of the global demand increase with its rapidly growing middle class and expanding purchasing power. Other parts of the world will also have growing chemical demand but at a slower pace.
In the decades ahead the world will require dramatic expansion of reliable and affordable energy supplies to meet growing demand. The scale of the challenge is enormous and will require pursuit of all economic options to expand supplies in ways that are safe, secure, and environmentally responsible. A steadfast commitment to the development of new energy technologies is required expand supply of traditional fuels, advance new energy sources and capture ongoing energy efficiency opportunities.
Access to high quality resources and an unprecedented level of investment will be needed to develop our sources and meet consumer demand. Governments need to maintain policies that provide access for the development of new oil and gas resources and provide open trade to allow businesses and people to prosper and grow in the global economy. We know from experience that the best way to achieve our shared goal is by effectively managing and addressing the risk inherent in our business by maintaining a relentless focus on operational excellence.
Next I’ll cover key elements of our corporate strategy as well as business and operational updates. ExxonMobil’s mission is to be the premiere petroleum and petrochemical company in the world. To deliver on that mission requires each of our three business lines the Upstream, Downstream and Chemicals to be premiere among their peers. Some of the key aspects of our strategy to achieve this mission are shown on the slide. Our relentless attention to operational excellence supports safe reliable and efficient operations. We develop and deploy systems to consistently apply the high standards leading to best in class operating performance. We are uniquely positioned to fully harness value across our businesses through integration. We leverage the complimentary nature of each of our businesses to capture the maximum value of every molecule that moves through our hands. At ExxonMobil we employee disciplined processes in everything we do from initial resource captured through capital project development to ongoing operations. Within each of our businesses the quality size and diversity of our portfolio provides unique competitive advantages to ExxonMobil.
We have a continued long-term focus on maximizing profitability and returns from every asset in each of our business lines. This long-term approach has positioned each of our businesses to be at the top of their respective areas of competition which enables us to maximize long-term shareholder value.
Risk management is a business imperative and ExxonMobil has developed a robust risk management approach based upon decades of experience and continuous improvement. Our approach is supported by well-developed and clearly defined policies and procedures to ensure that we have a structured globally consistent system with the standards in place. Management commitment and accountability in all aspects of the business are essential to achieving expected results.
In addition, we rigorously incorporate high standards of design and operating practices into all new operations to mitigate or eliminate significant risk. Employee and contractor training is an essential element to achieve appropriate competencies at all levels within the organization and embed the right behaviors to manage risk affectively. All of this is done within the context of experienced based rigorously applied management system.
In place now for more than 20 years and broadly recognized as a model of success ExxonMobil’s operations integrity management system or OIMS provides a disciplined framework for managing safety security health and environmental risk. ExxonMobil’s OIMS has been broadly adopted by others as a template for their own risk management systems. OIMS establishes common expectations worldwide for managing risk. It is employed at ExxonMobil facilities and operations across the globe and is incorporated into daily operating decisions. It is not merely a set of written processes and procedures it is our culture, it is how we operate the business everyday 24 hours a day, seven days a week, 365 days a year.
ExxonMobil has a resource base of over 87 billion oil equivalent barrels which includes improved resource plus other discovered resources that are expected to be ultimately commercialized. Resource base is large; it is diverse and contains a well balanced portfolio of assets.
The bar on the left shows the diversity of the resource base with substantial holdings in all resource types. It is split equally between and gas and liquids as shown in the middle bar.
The bar on the right provides a description of commercial maturity. We currently have just over 25 billion oil equivalent barrels improved resource. Where an additional 27 billion barrels and design and development stages remainder of the portfolio approximately 35 billion oil equivalent barrels contains the resources for future development.
ExxonMobil has a large geographically diverse portfolio of more than 120 projects. They’re expected to develop more than 23 billion net oil equivalent barrels spending a wide range of resource types. This slide describes 8 of the 31 major products that we have started up or plan to start up between 2012 and 2017.
In 2012, we started up three major projects in Angola and Nigeria. Between 2013 and 2017, we planned to bring 28 major projects online including Kearl which started production last month and Papua New Guinea LNG facility in 2014. These projects provide a strong foundation for future production growth.
The Kearl Oil Sands development project in Canada is developing a world class resource of more than 4 billion barrels. The Kearl initial development started production in April and production is projected to reach approximately 110,000 barrels per day bitumen later this year. Due to deep-water making and expansion projects are expected to increase production to 345,000 barrels per day of bitumen.
Our long term growth production plateau is projected to extend for 30 years. The Kearl expansion project is well underway with over 30% of the project complete putting us on target for 2015 startup.
In Papua New Guinea we are developing a high quality 9 trillion cubic foot gas resource. The project includes a 430 mile pipeline to transport gas from the fields in the high (inaudible) two trains 6.9 million ton per year, LNG plant near Port Moresby. By the end of the first quarter, the project was approximately 80% complete this progressively achieving milestones. The project is on schedule for startup in 2014.
The Arkutun-Dagi project in Russia Far East is well underway with a successful installation of the gravity based structure offshore Sakhalin this past summer. Arkutun-Dagi will have pick production of 90,000 barrels per day and expected to recover 630 million barrels of oil.
In 2012 ExxonMobil started with Chayvo Onshore processing facility expansion to develop a 130 million barrels of oil equivalent. The projected was completed three months ahead of schedule and under budget.
The Hebron project in Canada was sanctioned in December 2012 and is schedule to produce more than 700 million barrels of oil. Execution is underway with detailed engineering procurement and site work in Newfoundland for the gravity base structure. Essential to long term growth is developing and maintaining a balanced portfolio of opportunities to develop profitable reserves over the decades to come.
As you can see from the map, our global exploration portfolio is diverse across all resource types and all geographies. The yellow dots on the map are new play test which are opportunities in underexplored or lesser explored basins. These offer significant potential if they are successful. But carry high uncertainty and risk and other opportunities in the portfolio.
The green dots highlight opportunities in proven plays where exploration discoveries have already been made and working hydrocarbon systems are proven. The orange dots highlight the most significant areas where we are exploring for and producing unconventional reservoirs.
Commenting on the opportunities we have recently secured in Russia we signed a strategic cooperation agreement with Rosneft to duly explore for and produce oil and gas in Russia, the United States as well as other parts of the world. The initial agreement include 31 million acres in the Kara Sea of the Russian arctic, 3 million acres in the Black Sea both for exploration and nearly 3 million acres in Western Siberia to evaluate unconditional tide or potential.
In February of this year we expanded the strategic cooperation agreement to include an additional 150 million acres for exploration valuation in the Russian arctic including seven new blocks in Chukchi, Laptev and Kara seas. The 180 million total acres we are now evaluating with Rosneft are equal to roughly six times the total leased acreage in the Gulf of Mexico.
These blocks in the Russian arctic cover some of the most promising and leased explored acreage in the world which will be evaluated through seismic and exploratory drilling programs. If successful, they will be developed through a combination of ExxonMobil's Arctic expertise, Rosneft's knowledge and experience in the region, consistent with ExxonMobile's approach to capital efficiency, operational environmental risks management. We are also very proud of our premier downstream in chemical business. As indicated by the points on the map, we have manufacturing assets in all major regions of the world.
We are the largest global refiner and the largest manufacturer of lubricant based stocks. We are one of the largest chemical companies in the world with leading positions in most of our chemical units and we are the most profitable downstream in chemical business in the industry. The foundation of our success is safe and reliable operations. Without this, we will not be able to focus on higher value activities that drive and enable industry leading results.
For example, if chemicals over the last seven years are steam crackers have on average run to 1-2% points higher than operating utilization rates than competition delivering millions of dollars of additional earnings. With reliable operations, we can utilize our scale to focus on structural improvements that translated into industry's best off-positions and industry leading returns.
Our process and product technologies enable our plans to continuously improve reliability, yields and costs. The strength of our downstream with chemical business enables our technologist to introduce new high value products. One example is our industry leading lubricants business. We are the world's largest lubes based stock manufacturer and the leading marketer of high margins synthetic lubricants, with three times the base stock market position and more than twice the synthetic lube position compared to the competitor average.
Over the past decade, we have doubled the sales of high value synthetic lubes, growing at a faster rate than the industry average. Our growth strategy encompasses new products, optimal sales, channels and engineering assistance resulting in more value for our customers. In 2012, we again set sales records for our flagship synthetic products, Mobil 1, Mobil SHC and Mobil Delvac 1. The strong performance in Mobil 1 sales is clearly shown in the graph.
Products from our chemical commodity polymer businesses are differentiated by applying proprietary catalyst technology to improve physical properties and performance. These unique products penetrate new markets faster than standard industry alternatives and as such they command a premium price due to the physical performance and sustainability benefits they deliver to our customers.
Altogether differentiated premium products have generated earnings that have tripled over the last decade. Recently completed and announced investments position us to sustain this growth trend.
We are advancing a robust pipeline of projects in the downstream and chemicals business to capture higher value growth. And the downstream, the Singapore diesel Hydrotreater project will increase our capacity produced to produce ultralow sulfur diesel necessary to being growing Asian demand for this cleaner burning product.
Expansion projects in our Finland and China lube (inaudible) plants will increase lubes manufacturing capacity in those countries by more than 50% strengthening our ability to capture market growth in Russia and China. In chemicals, we completed a significant expansion in Singapore doubling steam cracker capacity at the site. In Saudi Arabia, we are working with our partner to construct a world scale synthetic rubber especially elastomers plant to serve growing demand in the Middle East and Asia.
And most recently, we filed permit applications where a major expansion of our facilities in Texas with a new world scale ethane cracker associated premium polymer capacity to capture the value of growing ethane suppliers in North America. As you can see our downstream and chemical businesses constantly deliver a return in capital employed that is unmatched by competition at any point in the business cycle. This industry leading financial performance is enabled by proven business strategies and resilient competitive advantages including our integrated model, advanced technologies, feedstock flexibility and a balanced portfolio. A relentless focus on operational excellence, yield strong safety and environmental performance as well as reliability benefits and costs savings. And we continue to deliver fast growing high value products based on proprietary technology.
I am proud of our operational performance and financial results this past year. Central to our strengths and competitive advantages is a steadfast commitment to operate with the highest standards of ethical behavior and corporate citizenship, building (Audio Gap) resting the challenge of sustainability, balancing economic growth, social development and environmental protection, so that future generations are not compromised by actions taken today. By designing our approach to corporate citizenship around six key focus areas, we contribute to society’s broader sustainability objectives and manage the impact of our operations on local economies, societies and the environment.
ExxonMobil considers and mitigates risk at every stage of energy development. As you have seen we strive to continuously improve our safety and environmental performance. To create long term benefits for communities and our business, we work with local partners to contribute to economic development wherever we operate. Local employment advances economic development and education. For example in Malaysia, 95% of our personnel are Malay and 90% of managers and supervisors are Malay. Working with the corporation’s signature programs, advancing economic opportunities for women, combating malaria and other infectious diseases and improving education ExxonMobil helps to promote social development.
For example with a $125 million commitment from ExxonMobil the National Math and Science Imitative or NMSI continues math and science education in the United States. Since its inception in 2007, NMSI has reached 2.1 million students and NMSI’s advance placement program has achieved record setting results. Since 2002 ExxonMobil has provided over 800 million per education programs with 140 million direct as specifically towards teacher training programs in the United States.
Our focus is to maximize shareholder return over the long period of time. As we have said for many years, financial results and stock market returns particularly for highly capital intensive industries are best viewed over extended periods. And industry like ours requires sustainable risk management of cash and capital and long cycle times for investments to deliver results. ExxonMobil has generated greater shareholder value in the broader market and greater value than average of our competitors over the last 10 and 20 years periods.
Over the last decade, the S&P annualized return was 7% versus ExxonMobil annualized return of 12%. I’ll now recap where I believe ExxonMobil is well positioned for the future. As demonstrated by strong financial and operating performance, ExxonMobil is a leader in providing reliable, affordable energy in the safe, secure and environmentally responsible way. We have a balanced portfolio of high quality, material and diverse resources and assets across the business. Our focus on disciplined selective investments underpins our ability to deliver superior returns.
We are proud of our ongoing efforts to identify and develop new technologies that enable us to unlock value and be more competitive and efficient. With a focus on operational excellence, we develop and deploy systems to consistently apply the high standards leading to best-in-class operating performance.
Finally, we capture substantial value across our complimentary premier business lines through integration. We have built processes and systems that enable our organization to establish constancy of purpose and maximize the value of each molecule we produce, refine or manufacture. These strengths provide competitive advantage and allow us to continue maximizing long-term shareholder value.
Let’s take a pause now and watch a short video on safety.
[Audio and Video Presentation]
Now I would like to turn to the formal business of the meeting. Again let me make a few brief remarks on shareholder proposals and voting. Each year the corporation receives a number of suggestions from shareholders. Some of these are in the form of proposals to be presented at the annual meeting and each is given care for consideration. We seek dialogue with the sponsors prior to the meeting when there is more time to better understand each other's position and very often we find agreement.
Let me be clear on my conduct of the meeting. Recognizing that the majority of our shareholders have voted by proxy and are not present through established procedures to facilitate an orderly meeting, we set up a process where speakers identify themselves and express their views and we welcome those views. In order that as many shareholders as possible can participate. We have set time limits and a system of reminders to help speakers manage their time.
We have 11 items to consider. As secretary Rosenthal said earlier, discussion on all items of business will be deferred to the discussion period. This will enable us to have some time for general comments and questions as well and conclude the meeting at a reasonable timeframe. For those of who you wish to leave the meeting at any time, let me express my appreciation for your attendance and your trust on us. Since we have a number of items yet to discuss on the program and you have been sitting for about an hour, I’d invite you to take a moment to stand in place, stretch your legs little bit, get circulation re-going, and I will ask you to sit here just a minute.
Okay, you please take your seats. I warned you it will be short. It helps me anyway.
The first item of business is the election of 13 directors. I nominate the 13 persons identified on Pages 18 through 22 of the proxy statement. These 13 people are highly qualified to serve on the board. All of our nominees are currently serving as ExxonMobil directors with the exception of Mr. Weldon who has been nominated by the board for first election as a director today. All board nominees are here today, except for Mr. George who had a longstanding personal commitment.
Now I'd like to ask the nominees who are present and seated to my right in the orchestra terrace to stand as their names are called, and then I will close the nominations. Michael Boskin, Peter Brabeck-Letmathe, Ursula Burns, Larry Faulkner, Jay Fishman, Henrietta Fore, Kenneth Frazier, Sam Palmisano, Steve Reinemund, William Weldon, and Ed Whitacre.
I declare the polls open for all who want to vote in the election of directors and the 10 remaining items. If you wish to change your proxy instructions on the election of directors or any of the other 10 items, or if you have not submitted a proxy and wish to vote by ballot, they are available from the ushers. Please raise your hand if you would like a ballot at any time during the formal business. They will be collected after all items have been discussed.
The next item on the agenda is the ratification of PricewaterhouseCoopers as the independent auditors. The Audit Committee of the board has appointed PricewaterhouseCoopers to audit ExxonMobil's financial statements for the year 2013, and we are asking shareholders to ratify that appointment. PricewaterhouseCoopers is represented today by Mr. Alan Page. Alan, would you please stand? Thank you. The audit committee's reasons for recommending PricewaterhouseCoopers appear in the proxy statement. I move the adoption of the proposal shown on Pages 60 and 61 of the proxy statement.
The next order of business is consideration of the board-sponsored proposal regarding executive compensation. This board proposal calls for a shareholder advisory vote to approve executive compensation as required by law. The board recommends a vote for this proposal as outlined on Pages 61 and 62 of the proxy statement.
The next order of business is consideration of the 8 shareholder proposals in the proxy statement. The first of these shareholder proposals regarding an independent Chairman is shown on Pages 63 and 64 of the proxy statement. I understand that Sister Patricia Daley will present the proposal. Sister Pat?
Thank you, Mr. Tillerson and this is the board and hello shareholders. My name is Sister Patricia Daley and I am here today to present the first resolution from shareholders proposed by the Spinnaker Trust and the need more fund requesting the separation of the position of chair and CEO. I’ve been here a long time. This resolution has been filed and voted on in past year as well actually many-many years. The resolution is certainly not a criticism of our chair or of ExxonMobil; it’s a request for what we consider a best governance practice.
We believe at independent chair and board can improve a company’s focus on governance matters and strengthen accountability to shareholders as well as providing a better balance of power between the CEO and our Board of Director. We also believe that separating these positions is in the best interest of our company and prevent the conflict of interest. Separating the position of chair and CEO provides another layer of checks and balances and could improve the Board’s ability to oversight the activities of the company.
We believe that the role of the CEO is to run the company and the role of the Board is to provide independent oversight. It’s widely recognized the chairing the Board is time intensive. A separated chair role also pre-time for our CEO, Mr. Tillerson to focus on running the company and building effective business strategies many of those strategies we’ve just seen in hereabout, and finally by combining the position, there is the potential for a conflict of interest whereby the CEO as chairman is overseeing his or her own performance.
As the United Kingdom Company has this policy, and hundreds of U.S. companies do it well. In the 2012 expenses report, it was noted now 43% of U.S. companies had split the chair and CEO role. There is strong and growing investor support for this reform. This resolution was filed dozens of companies last year receiving a notable 35% average vote still the investors are taking note of this. Many institutional investors such as California, Connecticut, and New York and label funds like the AFL-CIO believe that it is best practice to separate these two functions. ExxonMobil’s current position is that this proposal with unusually reduced the flexibility of the board to select this leadership structure and that separate role should not be mandated.
The companies then set up governance policies that they think are best practices that reduced flexibility that could be done here and our resolution provides flexibility simply asking that this reform be implemented when a CEO comes to office at ExxonMobil. This is a crucial time both in practice and symbolically to demonstrate that a Board has full oversight of management on many-many issues including compensation so we hope that shareholders will vote for this resolution asking for the separation of Chair and CEO, thank you Mr. Tillerson.
Thank you, Sister Pat. The Board recommends the vote against this proposal is outlined on Page 64 of the proxy statement. The next shareholder proposal regarding majority vote for directors is shown on Pages 64 and 65 of the proxy statement. I understand Mr. Marco Vargas will present the proposal. Mr. Vargas?
Thank you, Mr. Chairman. I am Marco Vargas representing the United Brotherhood of Carpenters pension fund. Our funds collectively holds approximately 1,310,500 shares of ExxonMobil common stock, we're committed long term owners. We appreciate the opportunity to introduce a majority vote shareholder proposal that we believe advances the importance of corporate governor. The governors very much appreciate the constructive dialogue which we have maintained with ExxonMobil representatives over the many years of important corporate governance and executive compensation issues.
Our proposal is designed to encourage Exxon board of directors to adopt majority vote standard for director elections. The majority vote standard on consistent director election provides shareholders the meaningful voting rights. Combination of minority vote standard with the company's current director resignation policy would represent a strong election standard. The resignation policy provides a post-election process in which the board can exercise its judgment and make decisions on continued status on elected director. Over 86% of America's largest corporation and all of Exxon's peer companies have adopted majority vote standard and campaign resignation policy. ExxonMobil is the largest company, American company that has not adopted majority voting, we urge the board to establish a majority vote standard and join the mainstream of American corporations in this important election reform, thank you Mr. Chairman.
Thank you, Mr. Vargas. The board recommends a vote against this proposal as outlined on page 65 of the proxy statement. The next shareholder proposal to limit directorships is shown on pages 65 and 66 of the proxy statement. I understand Mr. Frank Sherman will present the proposal, Mr. Sherman.
Thank you Mr. Chairman, Board and fellow shareholders, my name is Frank Sherman and this morning, am representing on behalf of Kenneth Steinerd and John Shividen, proposal number six to curb excessive directorships, page 65 of your proxy statement. Shareholders recommend that our board take the steps necessary to adopt a bylaw to limit our directors to a maximum of three board memberships in companies with sales in excess of 500 million, a maximum of three board memberships includes their membership in our board, this limit would increase to four for board memberships of directors permanently retired and under the age of 70, the bylaw should also specify how to address situation where a director may have a brief temporary situation above these limits. And this will apply only to nominees of directors of meeting subsequent to this meeting. Adoption of this proposal would deter our directors from accepting further director assignments that would rob them of inadequate time to deal with the complex and troubling problems of our company. Adoption will also deter nomination committee from seeking new directors that would not have adequate time for effective overseeing. The GMI ratings, an independent investment research firm has rated our company with a D rating since 2009 with a high governance risk therefore I would request the shareholders vote for this proposal six to reduce or limit the number of board memberships for our board, thank you.
Thank you, Mr. Sherman. The board recommends a vote against this proposal as outlined on page 66 of the proxy statement, the next shareholder proposal calls for a report on lobbying and is shown on pages 66 and 67 of the proxy statement, I understand that Mr. Patrick Young, will present the proposal, Mr. Young.
Good morning, my name is Patrick Young; I'm here on behalf of the United Steelworkers National Union and most importantly on behalf of the workers at ExxonMobil refineries in Baton Rouge, Chalmette, Baytown, Belmont, Billings and Torrance, over 6000 members respectively. Our proposal asks that ExxonMobil prepare an annual report disclosing company policy and procedures governing both direct and indirect and grass root lobbying communications, we're also requesting disclosure on the actual amounts spent on those communications. To be abundantly clear we are not suggesting that ExxonMobil should refrain from all political spending. We had an opportunity to clear this up during some shareholder dialogue with representatives from the company earlier this spring. As shareholders we encourage transparency and accountability in the use of staff time and corporate funds to influence legislation and regulation both directly and indirectly.
At the system accountability of the company assets could be used for objectives contrary to ExxonMobil's long term interest. ExxonMobil is operating in one of the most heavily politicized industries in the history of the world and as such we believe that it's just as important for shareholders to understand the company's approach to engaging in political activity as it is for us to understand the company's approach to finding new reserves of oil. It's widely known ExxonMobil makes extensive investments in direct lobbying, in an active and industry trade groups from the API of the business round table. Anyone who owns a television, has a mailing address or had a passing familiarity with the evening news knows that ExxonMobil is also engaged in other extensive activities and influencing public policy makers as well as public opinion on important political questions. We believe that the shareholders need to understand the company’s approach to this type of political spending in order to fully understand the company’s performance and to assess long-term potential. We encourage the Board to join us and other shareholders in this call for comprehensive disclosure related to direct, indirect and grants service lobbying. Thank you.
Thank you, Mr. Young. The Board recommends a vote against this proposal as outlined on page 67 of the proxy statement. The next shareholder proposal calls for a political contributions policy and is shown on pages 67 and 68 of the proxy statement, understand Ms. Sonia Kowal will present the proposal did I get your name correct?
You did thank you. For all the shareholders and members of the Board my name is Sonia Kowal and I am with Zevin Asset Management I am moving proposal number eight on the proxy which asks ExxonMobil to conduct a study of the feasibility of refraining from all political giving and to report on its findings to shareholders. Similar resolutions have been filed at various groups this year such as Target, Chevron, 3M, EQT and Bank of America.
The Citizens United Supreme Court decision opened the gates for corporations to spend unlimited amount interim selections and the result was that 2012 was the most expensive election year ever. The value to shareholders from this slide of corporate spending is unclear at best and we are concerned about the risks to which ExxonMobil is exposing shareholders through controversial efforts to influence the electoral process.
Clearly some other corporations recognized this risk since there are 64 public companies with some type of explicit prohibition regarding political spending. We believe ExxonMobil wishes and intends to be a good corporate citizen and we believe ExxonMobil because of its strong standing in this industry has a real opportunity to also be a leader in the area of good governance and specifically in the area of political giving. During a time when public support for high political spending in election are low we are also concerned about the reputational risk and potential backlash as a result of the company positioning itself as one of the largest contributors in election campaign. Investors need to be aware of the risks that arrive when the public perceives a company it’s being too deeply engaged in the political process and potentially attempting to buy influence.
We believe that our proposal is the first step towards helping our company from possible damage to its reputations and associated negative publicity that could come from spending on political campaigns, ExxonMobil’s good name is the vital asset. As shareholders we recognize that there are instances when the company does need to engage in the public policy process, our proposal does not seek to constrain the company’s ability to lobby elected officials once they are elected. Rather this proposal seeks to address these company funds to influence the outcomes of elections including referendum. Also if the resolution is adopted and if the company should decide to refrain from using treasury funds to fund elections company executives and other employees would still be free to express their political views via donations to candidates and campaigns. For this reasons we have asked ExxonMobil to undertake a study on the feasibility of refraining from using corporate funds to influence election outcomes. This will send a message both to shareholders and to the public that ExxonMobil is able to profitably conduct business without resorting to regulatory favorites and politicians we urge to vote on proposal eight. Thank you, Mr. Tillerson.
Thank you, Ms. Kowal. The Board recommends a vote against this proposal as outlined on pages 68 and 69 of the proxy statement. The next shareholder proposal deals with an amendment to the corporation ZEO policy it is shown on page 69 of the proxy statement I understand that Mr. George Wong will present the proposal. Mr. Wong?
Mr. Chairman and our shareholders my name is George Wong and I am here on behalf of the New York State Common Retirement Fund to introduce the fund’s resolution calling on our company to strengthen its policies against employment discrimination on the basis of sexual orientation and gender identity. The New York State Common Retirement Fund holders of 15,682,595 shares of ExxonMobil believes that companies have a competitive advantage in recruiting and retaining employees from the widest possible talent pool and a discrimination based on non-job related criteria can lead to less efficient business operations.
Over the last several years a number of major U.S. corporations including a large majority of the Fortune 500 have agreed to add formal and explicit commitments to bar discrimination based on sexual orientation and gender identity to their employee policy statement. Unfortunately ExxonMobil is not one of these. Although the company claims that it does not discriminate in anyway on the basis of sexual orientation, this claim is belied by the facts. In 2011 New York State officials were informed by the company that it will not accept the validity of New York State marriages for the allocation of employee health benefits if the employees were gay, this is completely and totally unacceptable to us. The New York state common retirement firm believes that ExxonMobil should alter its policies and join with the overwhelming majority of major U.S. corporations in supporting both human rights and more efficient business operations and on their behave I therefore submit the resolution to prohibit discrimination based on sexual orientation and gender identity found in your proxy materials. Thank you Mr. Chairman.
The Board recommends a vote against this proposal is outlined on pages 69 and 70 of the proxy statement. The next shareholder proposal calls for a report on natural gas production and is shown on pages 70 and 71 of the proxy statement. I understand that Fr. Michael Crosby will present the proposal. Fr. Crosby?
Again good morning Mr. Tillerson and shareholders. My name is Michael Crosby, I’m Capuchin Franciscan from Milwaukee and I’m representing the New York City Controller John Liu that holds 11.3 million shares and as you saw on behalf of the foundation and seven other filers, co-filers.
The resolution is asking ExxonMobil to provide quantitative data on its efforts to safe guard republic and the environment from its hydraulic fracturing or fracing operations. You can see it’s not nothing against it but let's be sure that we are dealing with all the different potential risks. as you are well aware from reading the paper hydraulic fracturing operations use millions of gallons of watering chemicals and as a result generate substantial amounts that waste water and air emissions and at times these emissions have been linked to significant air and water pollution and human and health and even livestock harm in some places.
In addition, because of the infrastructure that is needed, there is road damage, higher cost of living, sky riding, sky racketing housing cost like places like North Dakota that just can’t support it. So, in the pace of these environmental and social impact restrictions in moratoria have been passed on natural gas extraction and hydraulic fracturing activities that limit business and opposing a wide range of cost on companies from the cost of delay to complete loss of access to valuable resources, materially impacting our holdings.
So, in New York and Pennsylvania alone which sit at top the Marcellus Shale, more than 200 municipalities surpass bans or restrictions that limit hydraulic fracturing. Outside the United States bans in moratoria are proliferating as well. When Germany put a hold on hydraulic fracturing, Exxon’s gas explorations were put at a risk. A growing number of companies are responding to these risks by increasing their transparency about the actions they are taking to reduce the impacts of natural gas extraction.
However, ExxonMobil according to the New York city is behind its peers and is not providing the kind of quantitative information that other companies are beginning to provide it’s rather pretty general in what’s it’s saying it’s doing. So, we realize that there is a need for more energy but this fracking has to have minimal social environmental risk.
So the call for quantitative metrics is consistent with U.S. department of energy's recommendations on shale gas production and so we encourage shareholders to vote and support of this very reasonable item number 10 that calls on the company to provide quantitative data regarding setting goals, reduction of harms associated with hydraulic fracturing. Thanks for considering the resolution.
Thank you Fr. Crosby. The Board recommends a vote against this proposal as outlined on page 71 of the proxy statement. The last shareholder proposal calls for greenhouse gas emission goals and is shown on page 72 of the proxy statement. I understand that Sister Patricia Daley will present the proposal. Sister Patricia?
Thank you Mr. Tillerson again, members of the Board and shareholders. This resolution (inaudible) here specifically for this reduction resolution for about six or seven years now, Fr. Crosby, other members of the interface center on corporate responsibility has been working with our company for probably 15 years and more addressing such serious concerns. This resolution is sponsored by my congregation, the Dominican Sisters of Caldwell New Jersey, The American Baptist Home Mission Society and more than 40 institutional investors who are part of the interface center on corporate responsibility.
So, other resolutions filed and withdrawn, so we really have more than 60 institutional investors who continue to come back each year. Last year, you may remember I put a great offer on the table and suggested that the initiative of working with Carbon Disclosure Project their action program which we started to talk about they seem to be some interest that is the went ahead – our company went ahead, I wouldn’t have to come back here again. That didn’t happen in (inaudible) and every year we come back and note that once again, 2012 was the hardest year on record in the United States. Many of you have been through record breaking drought, I had to evacuate a lot of old nuns because of Super Storm Sandy who were out of power for weeks and I still have relatives and friends who have not been able to return to their home.
Since human civilization began, our planet has really lived with 275 parts per million of carbon, until about 200 years ago. We can't go over the 350 mark or we're in trouble and we've already seen some of those issues. A couple of weeks ago, we went over the 400 parts per million. So we're in desperate territory right now.
For two years now, we've also been raising questions about stranded assets, all right; our company as; Mr. (inaudible) has gone on record and continues to do so about a carbon tax, some policy initiatives to reduce submission.
But now economists are looking at this carbon bubble and raising red flags to the energy sector. Even the international energy agency, the IEA now raises this concern noting that no more than a third of proven reserves of fossil fuels can be consumed before 2050 or we're really in trouble, this is further than we can come back from. When you were commenting before I noticed in your future reserve piece of the 87 number; the future number was really segregated into the future energy resources, or oil fins, which has a rate of carbon hit than any of the energy sources we're looking at today.
So this does provide even more of a risk for our future asset. We have seen and we are shareholders here because this is the next flow in company, it outperforms in our sector and it continues to do so because of what you kept referring to Mr. Tillerson as disciplined processes. Our company excels because we set up targets and goals. It's embedded in our culture, this resolution and the suggestions that we set targets and goals to reduce greenhouse gas submission, just to make sense. I want to thank you for your time today and the author is still on the table, I don’t need to come back here next year we can cut a deal.
Thank you sister Pat, the Board recommends a vote against this proposal is outlined on pages 72 and 73 of the proxy statements. All items of business have now been introduced for those of you who wish to address the meeting in the discussion period, this should be a good time to move towards the reserve seats from now, so that you will have ready access to microphone and while folks are repositioning to do that, if you would like to stand, stretch your legs again for a second, we will let everyone give repositioned.
I now open the floor for discussion on the items of business presented and we will ask during the segment you try and direct your comments towards the issues surrounding the various board and shareholder proposals. As I said earlier, we will have a general query later in the meeting for other topics that might be of interest, so if could find this portion of comments through the various shareholder proposals.
As described earlier, move to the aisle if you have not already done so or if not already seated nearby, remain seated, raise your hand and hold your speaker identification card to indicate you want to address the meeting, to recognize give your completed speaker, identification card to the usher and a microphone will be provided.
Stand to begin by stating your name, bear in mind the rules of conduct showing the program. Would ask you to make your comments as brief as possible so that we can allow as many people to address the meeting who has wished to do so. We will continue to use the lighting system just to help you manage your time.
First priority as I indicated over given to those who have not yet had an opportunity to speak, so I welcome your comments at this time. We got one over here.
Good morning Mr. Tillerson. I am David Ridenour representing the National Center for Public Policy Research which is a conservative free market think-tank. My wife and I have been shareholders for many years. I am commenting on items seven The United Steelworkers proposal for the report on lobbying. We agree with management and urge a vote again.
We note first that the proposal would require an extraordinary level of detailing company lobbying disclosures, more detailed than any other company we can think of, let alone that a company that has been subject to as much by preparation and this has one consistently been subjected to. Second, we know in particular section three of the proposal which states that the company must disclose its “membership in and payments to any tax-exempt organization that writes and endorses model legislation”. We hope our fellow shareholders are aware that this is a barely veiled attempt to make it difficult for the company to work with one organization in particular the American Legislative Exchange Council better known as ALEC, a 40 year old nonpartisan, non-profit organization that facilitates collaboration on issues important to all of us, amongst 1000 of state legislators in all the 50 states. ALEC held state legislators share with one and other good ideas that work in the areas such as healthcare reform, prison reform, criminal justice, public safety, education, government transparency job creation and energy policy. Yet because the ALEC shares good ideas in these important policy areas from a prospective to seek to keep government small and accountable to the people and our personal and corporate taxes low, special interest that over the time have come to dominate sectors of our government find ALEC threatening. The special interests need the government to enact their agendas and not infrequently fill their coffers and reward their ally.
As such ALEC is a threat to their agendas in an effort to eliminate it; they have attempted to intimidate as many corporations as possible to work with ALEC in any way into dropping all associations with their group. Unfortunately, many corporations have surrendered to this pressure which often is based on the smears and false (inaudible). But as far as we know this company is not one of them. We wish to commend the company’s management in this regard for not surrendering and for standing up for what not only is good for this company but quite literally to the United States itself. We urge our fellow shareholders to stand up for liberty lower taxes, government accountability and free market and vote no on seven. Thank you very much.
Thank you. Here, to on my right. Number four.
Sonia Kowal - Zevin Asset Management
Hello again Mr. Tillerson. This is Sonia Kowal from Zevin Asset Management. The American Petroleum Institute has an ongoing campaign of daily ads on major networks that you might have seen at primetime. They promote full scheme ahead for continued fossil fuel production and used for only giving lip service to alternative energy sources. This seems that odds towards ExxonMobil's increasingly diverse research space and so forth for carbon tax. I’d like to know how much ExxonMobil is giving annually to the API and in particular for this campaign which seems backward looking and inconsistent with the company’s messaging. Thank you.
We contribute to the API according to a (douche) formula which is not publically available and as indicated by their name the American Petroleum Institute they would, you would expect we are advocating responsible development of new petroleum resources. Over here.
Mr. Tillerson, Frank Sherman again. I am on the proxy, the Midwest (inaudible) Franciscans and a new member of the Interfaith Center for corporate responsibility. And I would like to make a statement in support of proposal number 11 for greenhouse gas emission reduction goals. As a metric driven company, we have shown the power of setting goals and safety and I thought the film was excellent. You have also said and exceeded energy reduction target as reported out as greenhouse gas emission reductions and as a fellow board member on the American Chemistry Council, I represented my company for last 10 years alongside of ExxonMobil where we said industry targets for the greenhouse gas emission reduction targets and exceeded those as well. So, many of your peers now have said targets both on an operations as well as their products when associated with greenhouse gas emissions.
As a largest publically traded energy company with a mission of becoming the premier global energy company, I see it is our challenge and our duty to address greenhouse gas emissions and climate change which faces our societies. Just as we have taken on the challenge to discover new energy sources to drive modern societies, I think we also should be taking on the challenge of greenhouse gas and climate change and therefore I would highly recommend our shareholders to vote for resolution number 11 so that our company can also be one of those leaders. Thank you, Mr. Chairman.
I am (Malcolm Shaw) from Dallas. I have this question, what is the one single thing we can do in our company to increase our gross profit margin?
I wish it was simple enough that there was only one thing that we have to do. But I think clearly, we have to work on the things that we can control, which is our cost structure, our investment efficiency, and the operational reliability. We can't control the market price we get, we can't control the demand that moves up and down with the current economic performance, we can't control the world’s economies, and we can't control the geopolitical environment we operate in. So we work on the things we can control which is investment discipline, capital efficiency, cost efficiency, reliability and operational expense and that if we do that better than all of our competitors that should give us industry leading profitability over the long term.
Again a quick question, do we have protection, form of insurance or even from our government against confiscation or nationalization of our operations in some of these third world countries.
No I think you find it pretty difficult to find an underwriter that would take that risk for you. That’s what, we are in the risk management business and that’s the risk that we comfortable managing.
I would like to speak in favor of proposals 10 and 11 and I would like to just make the connection between the very good film about safety of people that is uppermost in the thinking of the company and link it with safety of the planet. Mr. Pat mentioned that already the parts per million has exceeded the three safety and that we are beyond that. The scientists are saying this is serious detriment to the planet’s future. If we are so concerned about people and safety I think we’ve got to be equally concerned about the product mix of this company; when the company says there is a balance portfolio, and we don’t see anything related to renewables, it’s a business model that is created, this carbon excess that the scientists are saying and governments are saying something must be done. I noticed in the Corporate Citizen report under sustainability slide 45 you said that the goal of the company is to make sure that future generations are not compromised by actions taken today.
Well the whole presentation is indicating the actions today are precisely the same actions that have created the problem we are in and this is detrimental to the planet and therefore all of us. There has been no discussion, Mr. Tillerson that you made about these risks. I know you have got the energy efficiencies, you are reducing emissions, but not setting target. I just wish that maybe you could share a little bit more about your comments, last year however you said there is going to be technological or business solutions to the crisis. Could you just comment about it? Because really, until now we have been not really talked much about the crisis that’s facing the planet, and then if you could share a little bit more such as you did last summer, how you think that there is going to be business solutions or technological solutions to the crisis, the EIA and others say we are already in.
I think our views on climate change and the risk of climate change have been fairly well described both in public forums where I and others have spoken as well, as in publications in the ways we have expressed review climate change as a serious issue, it does present serious risk. I will maintain the view that I have had for some time now, but notwithstanding all the advancements that have been made in gathering more data, instrumenting the planet so that we understand how climate conditions on the planet are changing, notwithstanding all that data, our ability to project with any degree of certainty the future is continuing to be very limited.
If you examine the temperature record of the last decade, it really hadn’t changed. I know you will like to hear that as it don’t comport to some of the views of others, but last 10 years’ temperatures had been relatively flat. In a period when is been noted greenhouse gas concentrations have been rising. That’s not to drawing a conclusion about anything other than to make the point, our ability to understand all of the relationships between emissions and the environment and the feedback loops continues to be one of the science communities grand challenges and there are some of the best scientist in the world working on that. And we support their work; continue to support their work because we want to understand that as well. So as we said in the past that how do you want to deal with something or the outcome is unknowable but the risk are significant and so that’s why we have concentrated on we do not have a readily available replacement for the energy that provide the means of living that the world has today, not our standard of living but equally at the more importantly a standard of living that more than 2 billion people on the planet are below anything any of us would find acceptable from poverty, hunger, education standpoint, how do you want to deal with that great social challenge to what good is it to save the planet if humanity suffers in the process of those efforts when you don’t know exactly what your impacts are going to be, so we have taken a much more balanced view and we said lets manage the things, we know how to do manage today that’s why we’re strong proponents of energy efficiency, we’re strong proponents of how we consume energy and consuming it at a much more efficient way and we’re strong proponents of looking at other options for energy supplies and sources and we have invested in a broader ray of those in terms of the investigation so that we are well informed as to the likelihood of their having broad-based application on a scale that will serve human need across the planet.
There is nothing out there today that will do that. When mills won’t do it, solar panel won’t do it; bio-fuels won’t do it and all of those come with consequential issues as well, it’s not that we do not support continued advancement there, but I think that in this discussion which is vitally important to all mankind, I think we could have a much more use discussion if we could find the place in the middle which is where 80% of people are and talk about a reasonable approach that acknowledges what we know acknowledge what we don’t know and looks at all the tools available to us to manage that outcome and the engineered solutions side of that is, I’ll maybe biased because I’m an engineer and I have an engineering background and I work in a company there is full of scientist and engineers. I have enormous faith in our technology’s ability to find solutions as they present themselves to us which will be a combination of mitigation and adaptation, and I firmly believe that we will find that way forward but we’re only going to find that way forward if we can put all our energies into that and less of our energies into the most extreme view points on both end of this debate which is we’re dunned or you’re all crazy because neither of those is right.
Maybe I was disappointed the fact that the data is showing that warming isn’t as going as accessibly in the last 10 years, you know, I’m very pleased with that, so I wanted set the record straight, I don’t want it to get any worse but I would also you if you can accept that data that says the warming has flowed that if would also from the same scientist that have said that accept the fact that we are according to those same scientist because we have more than the 350 of the carbon that you would also say that is critical and must be addressed right now, I’d ask you to vote because I’m ready to say if reduction is good, I would hope you would do the same and say we can’t, we’re in a very bad situation when it’s over 350 parts.
Well, I can’t conclude there is something magical about 350 because that suggests these models are very competent and our examination about the models, are that they’re not competent, and in fact, if you read the IPCC report, they published a very broad range of possible outcomes because they acknowledge the models competencies or questionable, they have selected 350 as a case, a base case, around which they believe we should be pursuing but to suggest that 350 versus 450 somehow is a known outcome is just not respecting the competency of the model, so I don’t know if there 350 or 450 if you look at outlook as you’re seeing our outlook has range greenhouse gas emissions peaking and declining at some point in the future as technology takes hold more broadly across society, but it does lead to a much concentration of greenhouse gases.
We do not see a viable pathway with any known technology today to achieve the 350 outcome that is not devastating economies, societies, and people’s health and wellbeing around the world. You cannot get there, so the real question is, you want to keep arguing about that and pursuing something that cannot be achieved at cost that would be detrimental and do you want to talk about what’s the pathway we should be and how do we mitigate and prepare for the consequences as they present themselves because our ability to predict the consequence is simply not that good, sure thank you.
Yes, thank you, Mr. Tillerson to this opportunity. My name is (Ann Morton). I live in Dallas and I’ve lived here for over 40 years. I represent those citizens who are very adamant about protecting Dallas quality of life and we have been working very hard to prevent hydraulic fracking and balance as you well know, as you live here in this area as well. And personally on behalf of many of them I would like to thank XTO which is a subsidiary of ExxonMobil for pulling out of the Southern part of Dallas and not inflicting hydraulic fracking in Dallas, that is one thing that we can be assured of and we're very thankful to ExxonMobil for doing that. I support very much the proposals number 10 and 11; I think there are ways that we can work together. I think there is something that can be done, I think there is something that can be done, I think there are a lot of assumptions on both sides including yours and maybe including ours and I think something has to be done because things are changing, and we need to recognize that. I want Exxon to succeed, I've been a shareholder along with my husband for many years and I want that to happen. I also want to thank you again for pulling out of Dallas, thank you so much.
Thank you. Other comments? Over here. Number 4.
My name is David Martino and I'm a citizen here and a shareholder and I just want to thank Rex Tillerson, the Board and the hundreds of employees that have made Exxon the great company it is and become one of the largest most profitable companies in the world. Your success in the US has allowed us to become the great independent country we are and probably hopefully we will have energy security and energy independence someday. They talk about fracking over here, they probably don't realize that the first frac jobs occurred when a civil war veteran in 1866 passed the first patent on fracking, it later became hydraulic fracturing in 1947 and we have fracked over millions and millions of wells and not one single case has the hydraulic frac ever contaminated the fresh water zone as stated by a lot of people because they're trying to make money off of the oil companies because they bad water to start with. It's funny, you have helped to find enough oil and gas in this country so that the protestors here have been to leave their heated and air conditioned homes and fly and drive here so they can protest the way Exxon runs their business yet your success up there on the board, was so great I don’t know why they want to change a thing, thank you very much.
Thank you. Any other comments on the business proposal? Seeing none then, I believe all items of business have now been covered, if any of you have proxy cards please hand them to the ushers at this time, they'll be moving up and down the aisles, those of you who have already returned the proxy cards need not vote by ballot unless you wish to change your vote. If you wish to change your vote simply mark the appropriate sections of the ballot, the ballots will now be collected and turned over to the inspections of election to be counted, if you wish your ballot to be kept secret the ushers will provide you with an envelope, the appointed proxies in attendance today hereby cast all votes which we have been authorized to cash in accordance with the instructions indicated on the individual proxy cards, if you have proxies please pass those to the ushers in the aisle. Since proxies and ballots have been collected I now declare the polls closed, while the inspectors of election are preparing their preliminary reports I'll open the mikes back up to take a few more questions regarding ExxonMobil's business or comments that any of you may want to address to the meeting, I will interrupt that discussion when the voting results are available and we'll report those to you. So for those who have questions or would like to address the meeting you got an opportunity at this time.
My left, number five.
Once again my name is Patrick Young, I represent the United Steelworkers, we're the largest oil refining union in the country and I just wanted to speak a little bit and get your take a little bit about the safety video that you showed up there, and we applaud ExxonMobil for making safety a priority. Talking about safety for making it part of our company's dialogue and identity but one of the things I find a little concerning about the video, was, in a lot of the way we talked about safety today was the focus on personnel safety. We saw a lot of pictures of personnel protective equipment, hard hats, ear and around the area protection, everybody had their goggles, everybody had their steel toes, people were tethered in properly. Really the type of, and I don't to undermine the importance of personnel safety and thinking about personnel safety and the responsibility to every person who works in refinery or a rig has safety, we take that very seriously in our union but the biggest contributor to safety performance is not personnel safety where we stop trips and falls, it's process safety management it's the (infraction) and maintenance of refineries and equipment, it's the dealing of fatigue in a way that makes sense, it's oversight and inter safety in a way that doesn't seek to put blame on individuals or workers, we fix the problem together and I was wondering if you could talk a little bit about your approach to process safety as an organization and the importance of that in the refineries that we represent in the offshore work.
Well you make an excellent point and process safety is a little harder to depict in a video but it is extraordinarily important component of a comprehensive approach to risk management and safe operation of the facilities and working in our facilities I know you’re quite familiar with our process safety management systems. We measured a lot of the results there we have enhanced measurement of near miss incidents interestingly though even when we find a process safety failure a piece of equipment that fails a vessel that losses containment a valve that fails to perform as it’s intended to more often than not what we find is an individual that failed to follow an established operating procedure practice and it will manifest itself as a process safety incident there may be no personnel injury there may be a personnel injury in the results as well but the largest contributor to process safety incidents are failure by individuals to follow established operating practices and procedures so we are very intensely focused on that element of human behavior and a lot of what the video was about you heard people giving testimony is about their personal commitment I know they have to go out every day and do the right thing because they affect themselves in those realm.
And so we are intensely focused on trying to understand why do people make the choices they make, why does an operator who knows the proper operating procedure not follow it? Why do they make that decision at that one moment to take that risk and so we have established a center for human behavior around this issue of why people make risk choices when they know better and everybody in this room can think of instances back home changing a light bulb, working on the roof, cleaning the gutters; where you took a risk decision that probably wasn’t very wise you got by with it, didn’t get hurt.
With that same mentality, we are trying to understand, so process safety and personnel safety are completely integrated we cannot pull the two apart, yes we have to have good engineering designed equipment and we have to have good operating practices and maintenance programs but all the elements you mentioned are all important elements to how you make an integrated safety system result in the risk management you want which is no equipment failures and no personnel injuries.
So we are all in this together every one of us are in this together and it’s our interest in understanding what do we need to do to create the right environment whether it’s training what is it, so that everyone in that system understands our part of the system and they have to perform and we don’t want them taking those risk. We will take the downtime we will take some other outcome rather than take that wrong risk decision so that’s our philosophic approach to it and you are very correct in highlighting the importance of process safety as extraordinarily it is voted during the most catastrophic events the public hears and sees about that’s why we are so intensely focused on it but you cannot address process safety without addressing individual commitment as well the two go completely hand and glove so thanks for bringing that up important point, down here.
Frank Hewitt a long-term shareholder I am delighted with the performance, your performance in the past my question relates to your summary slide that shows the performance comparison with the competitors and the S&P the 20 and 10 year comparisons were very favorable what we have come to expect from ExxonMobil the five year comparison is less favorable and I wondered is there anything that you can put your figure on that might explain that difference and is it a trend and is it a trend that your company place to reserve or reverse?
Certainly and that’s a great question over the past five years I think there are two things that as we look at our performance and our financial results. And that of course was a market indicator that we were showing the 5, 10, 20 year comparisons. So how and what influences the market price of the stock there is a lot of things we could talk about but let me talk about what we have been doing in the last five years that I know has had an influence on the market’s view of the value.
Now first we have been in a very capital intensive period of time which really began a little prior to the last five years as we had to reinvest back into the business for the long-term growth of the business building a world class and world scale LNG presence started in Qatar but now in Australia, Papua New Guinea and other places you are hearing about.
So if you look at those capital expenditure numbers over the last five years compared to any other period of time even on an inflation normalized dollar basis they are at extraordinarily high levels with capital intensive investment comes an erosion of return because you have a lot of capital on the books that’s not performing it’s in construction it’s underway and yet to come so I think there has been bad affect the XTO merger had an effect because gas prices had not yet bottomed out while we anticipated at the time of the merger that it would be non-accretive in the near-term and we never defined near-term but near-term because we expected natural gas prices had not yet bottomed out. They bottomed that but they stayed lower much longer than we expected but function of couple of things, one the poor economic performance here in the U.S. is held demand down. Two, the pent-up capacity and the ability of smaller producers to keep cash flow going even through a period of low prices through hedging programs and forward sale agreements and what not, kept more capacity coming online than we thought the industry would be able to sustain.
So, we want a very good predictor on how quickly the U.S. economy was going to rebound and we missed slightly the industry’s pent-up capacity. A lot of that is working its way off. So, it’s for the near term I would say where we were offer a year or two and at acquisition merger that was undertaken because of a 30 to 40 year view of the value, I’m not too concerned about that.
So I think what’s happened in the last five years is the market has lifted that huge capital intensity which is had an impact on our returns the timing of the XTO deal and are waiting to see I think what the market has done is it’s waiting to see, okay how’s that I’ll go and turn out. And what’s interesting to me is throughout all of that though with second highest earnings ever last year on record, the 25 plus percentage return on capital employed 7 percentage points suburb our nearest competitor, industry leading safety results and we’re still investing enormous amounts for the future with a great portfolio.
So, and I’ll make that page today unless (inaudible) in New York on Wall Street and then after they’ll write their reports and we meet with the by side analyst to the people really on the stock, the big shareholders and make sure they understand where we’re going. And so I think it’s a question now we’ve been investing heavily, we’ve got delivered as we begin to startup of lot of these massive projects and I mentioned a couple today the Kearl project continuing the success we’ve had in Russia, the next new LNG province for us in Papua New Guinea which we’re already looking at how to expand that.
So, we got a deliver on startup and execution and that’s what we’ve talked to the organization that all these people sitting down here without their (man in those boots) I guaranty everyone comply back to me what the imperatives are. You know, it’s a reliable operations, cost and capital efficiency. You can go anywhere in the world with the ExxonMobil operation and you’re going to hear that form everybody. They all understand that that’s our commitment, we have to deliver and as we do that I think the market will recognize that ExxonMobil didn’t go anywhere, we’re right where we’ve always been.
My name is (inaudible) and I’m representing the New York CW International Union Pension Plan. I have a question regarding Board over side of compliances with the Foreign Corrupt Practices Act which I would like to address to director and audit committee member Steven Reinemund. ExxonMobil faces substantial ongoing risk of FCPA non-compliance given the rise that FCPA enforcement in general and the company’s expanses business about.
In 2011, it was reported that ExxonMobil was involved in an investigation in FCPA related enquiry into swift shipping company. This considering Exxon doesn’t just close the investigation to investors until it log reported the news.
Mr. Reinemund, I would like you to explain why as a member of the audit committee, you decided this information should not be disclosed. We also know that you are on the Board of Wal-Mart stores incorporated which is currently embroiled in national FCPA investigation. That company has just disclosed that it’s been $73 million related to those in the last quarter nearly double of what we've forecast.
The New York Times reported that high level Wal-Mart executive including current CEO Mike Duke and Board Chair Rob Walton knew of the scandal as early October 2005. Current and former members of the Board including you Mr. Reinemund clearly failed in their role to ensure proper internal control at the Wal-Mart. Wal-Mart’s recent experience has demonstrated the high cost of FCPA programs those legally and in terms of reputational advantage.
Mr. Reinemund, as a member of the audit committee at ExxonMobil and given your experience of the Wal-Mart how do you response with the concerns of the investors about ExxonMobil’s FCPA compliance practices and disclosures.
We’ll give a list as the ExxonMobil Board meeting and the Wal-Mart Board meeting or anyone else’s Board meeting, I’m going to respond. We have a comprehensive program of compliance with the Foreign Corrupt Practices Act. It is not unusual that we get from time to time enquires from the justice department or the committee of special investigations in the congress around certain countries in which we do conduct business.
Throughout all of those investigations we have never been accused of anything nor has anything ever been indicated that we were not in compliance and full compliance with all provisions of Foreign Corrupt Practices Act. In fact I think, our internal compliance programs, I’ll say this because I don’t want professional and read everyone but we do benchmark and look at what other companies do to ensure compliance. I think are just probably the best practice. It’s been in place for number of years, all of our employees are required to take training on a periodic bases and employees and since their positions are required undergo training our legal counsel annually, we have a system for disclosure, whistle blower processes, internal processes that people can pass along through a number of channels anonymously. If they believe there are any actions going on, that would be contrary to the law. So I would say that I have great deal of confidence in the strength of our internal processes and procedures. It is a challenging area to ensure that we have all 77,000 plus employees but also the 250,000 plus contractors the world over also in full compliance who may represented higher interest due to the job they have been asked to do.
Any instance of allegation of (inaudible) non-compliance is passed along to the audit committee and they are kept informed of the ongoing investigations and their ultimate outcome. It is a serious matter which we take very seriously. The Inspectors of election have indicated that the votes are ready to be; the outcome of votes we are ready to provide it so (inaudible).
Mr. Chairman, at least 3.6 billion shares of stock of the corporation have been voted on the 11 items of business discussed at today's meeting. Voting results are expressed as a percentage of total votes cast, and according to New Jersey corporate law abstentions are not votes cast. Subject to the final calculation of votes which should not materially change the results, we report the non-average, 96% of the votes cast were voted to elect as Directors the 13 nominees listed in the proxy statement.
On the resolution concerning the ratification of independent auditors approximately 98.9% of the shares voting thereon were voted for and 1.1% were voted against. On the resolution concerning an advisory vote to approve the executive compensation, approximately 70.6% of the shares voting thereon were voted for and 29.4% were voted against.
On the resolution concerning an independent chairman approximately 34.9% of their shares voting thereon were voted for and 65.1% were voted against.
On the resolution concerning a majority vote for directors, approximately 45.3% of the shares thereon were voted for and 54.7% were voted against.
On the resolution to limit the directorships approximately 5.8% of the shares voting thereon were voted for and 94.2% were voted against.
On the resolution concerning a report on (wellbeing) approximately 25% of their shares voting thereon were voted for and 75% were voted against.
On the resolution concerning a political contributions policy, approximately 5.7% of the shares voting thereon were voted for and 94.3% were voted against.
On the resolution concerning an amendment of EEO policy approximately 19.8% of the shares voting their own reported for and 80.2% were voted against.
On the resolution concerning a report on natural gas production, approximately 30.2% of the shares voting thereon were voted for and 69.8% were voted against.
On the resolution concerning greenhouse gas and missions goals approximately 26.8% of the shares voting thereon were voted for and 73.2% were voted against.
Our written reports will be submitted to the Secretary as soon as they are completed.
Thank you. As stated in the written report of the inspectors of the election on each of these matters will be delivered through the sector involved with the minutes of this meeting. The final votes on each of these matters will be available on the ExxonMobil website and will be filed with the SEC on Form 8-K.
Concluding the meeting let me thank all of you once again for being with us here in attendance. We appreciate you taking the time and some of you I know traveled some distance to attend the meeting today. We appreciate that you put that effort to come and be a part of the discussion today.
We also appreciate the interest of all of you taking the corporation as future success in our performance and we welcome feedback on that at all times.
We take all of your comments very seriously and I'll assure you that all the issues raised today will continue to receive ongoing consideration long after this meeting is concluded and will be part of the Board's future discussion as well. It was up close ever meeting of noted that one of the great strengths of the ExxonMobil Corporation is its size, it's vastness, it's scale and with that comes a great strength of diversity.
Within our ranks of employees and the contractors but also in the ranks for our shareholders, we have great diversity represented, diversity of people, diversity of cultures and we find enormous value in that diversity and we welcome the diverse viewpoints that come to our table for discussion.
We do not own the answers and everything; we own the process to get to those answers. So we welcome those comments, we welcome your interest in our performance in the future of the corporation and I thank you again for attending and for the long time, shareholders it's great to see you and as I say we are meeting for those that are here for short term, shareholders, we look forward to you becoming long term shareholders and seeing you for many years to come. Safe travels.
Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.
THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.
If you have any additional questions about our online transcripts, please contact us at: email@example.com. Thank you!