Exxon Mobil's (XOM) CEO Rex Tillerson Hosts Annual Shareholder Meeting (Transcript)

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Exxon Mobil Corporation (NYSE:XOM) Annual Shareholder Meeting Conference Call May 28, 2014 10:30 AM ET


Rex Tillerson - Chairman and Chief Executive Officer

David Rosenthal - Vice President, Investor Relations and Secretary

Marco Vargas

Fr. Michael Crosby

Shawn Gilchrist

Patricia Daly

Malcolm Shaw


Frank Rauscher - Aquinas Associates

Julian Martinez - SER-Jobs for Progress National

David Martino

Jack Fuller

David Ridenour - National Center for Public Policy

Jim Markham

Rex Tillerson - Chairman and Chief Executive Officer

Good morning, ladies and gentlemen. You would please find your seats. I would ask that the meeting please come to order. I am Rex Tillerson, Chairman and Chief Executive Officer of the Exxon Mobil Corporation. And I am pleased that so many of you are here with us today in person, but I also want to welcome our shareholders around the world who are joining us by way of the internet on the simulcast. I hope that you have an opportunity while those of you that were here to meet some of our employees in person while visiting the various displays in the foyer this morning. These are just a small representation of the some 75,000 men and women of Exxon Mobil, men and women who are working on your behalf, 24 hours a day, 7 days a week, 365 days a year. And many of them are working in very challenging locations and under challenging circumstances around the world. All with one objective in mind and that’s to deliver the energy that the world’s economies and people need to maintain their lifestyles in all corners of the world.

I will have the opportunity to report to you on our financial and operating results, but I am really reporting to you on their results. And that is the highest honor I have is to speak on their behalf to you today. David Rosenthal is seated to my right. He is the Vice President of Investor Relations and the Corporate Secretary. He will assist me in running the meeting today. I will introduce the 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 numbers. 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. Charlie (indiscernible) and Lori Chamoun of Computershare Trust Company have been appointed inspectors of 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 97,000 shareholders represented at this meeting, holding at least 3.5 billion shares or approximately 82.9% of the issued and outstanding shares of stock of the corporation which are 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 would 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 8 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 5 shareholder proposals shown in the proxy statement, which was sent to all shareholders in advance.

As described in the annual meeting program, discussion on the 8 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 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 inspectors of election will prepare their preliminary voting report. While this is occurring, there should be some time for additional comments and questions about Exxon Mobil’s business. When the inspectors are ready I will ask them to give us their voting report and we will then conclude the meeting.

At this time let me turn the podium to David Rosenthal to discuss the rules of conduct.

David Rosenthal - Vice President, Investor Relations and Secretary

Good morning. I would now like to cover several aspects of today’s meeting. 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. The 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 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 located 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 this 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 Exxon Mobil 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 Exxon Mobil 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 the 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 affecting future results as well as supplemental information to finding key terms that we will use throughout the meeting today. Thank you.

Rex Tillerson - Chairman and Chief Executive Officer

Thank you, David. Shortly, we will address our items of business. However, I will first share with you some highlights from 2013 financial and operating results, give a summary overview of our annual energy outlook, and provide you with a business and operational update. I will touch on several elements of our business approach that enable Exxon Mobil to deliver superior long-term shareholder results.

I will start with a review of our financial and operating performance. In reviewing 2013, the corporation sustained solid financial and operating performance despite global economic challenges at a wide range of uncertainties. We continued our strong safety and environmental performance. We delivered earnings of $32.6 billion, a return on average capital employed of 17.2%, and generated cash flow from operations and asset sales of $47.6 billion. We invested $42.5 billion in our various business lines. Total shareholder distributions were $25.9 billion.

For the 20th consecutive year, we added more oil and natural gas reserves than we produced with our proved reserve replacement ratio exceeding 100%. These results reflect the strength of our integrated business model and the diligence, expertise and dedication of the 75,000 men and women who work for Exxon Mobil throughout the world. Exxon Mobil’s approach to business is built upon a commitment to integrity in all we do. Nowhere is that more evident than in our commitment to safe operations with a continued emphasis on both personnel and process safety.

As this chart shows our safety performance continues to improve and remains very strong in the industry, we believe that effectively managing risk will enable us to achieve our vision that nobody gets hurt. In 2013, Exxon Mobil was awarded the Green Cross for Safety medal by the National Safety Council in recognition of our performance and leadership in safety. At Exxon Mobil, we recognized that meeting the world’s growing need for energy while managing the impacts on the environment is one of society’s great challenges. We have implemented rigorous environmental management programs and results of our actions are significant, particularly in the area of energy efficiency and flare reduction.

As shown on this chart, we have reduced greenhouse gas emissions by nearly 11 million metric tons over the past five years. This is equivalent to taking almost 2 million cars off the road in United States. The investment in highly efficient code generation capacity to provide electric power and steam through our facilities is a key contributor to our efforts. We also continued to progress initiatives to reduce hydrocarbon flaring bringing our results over the past 10 years to the total reduction of 50%. We are also carefully managing freshwater consumption in our operations.

The chart on the left summarizes freshwater consumed in our upstream, downstream and chemicals segments. We experienced a 25% reduction across all business lines since our acquisition of XTO in 2011 or a decrease of almost 600 million barrels or to put that in metrics it may be relevant to you 25 billion gallons. Exxon Mobil has been active in industry initiatives to develop standards and tools for water resource management including mapping water use, screening potential water stress or scarcity of major facilities and identifying use and risk mitigation steps. We are actively involved in a number of research efforts individually as well as through partnerships to further enhance our understanding and capabilities to effectively manage water.

Let’s now take a look at our 2013 financial metrics. Exxon Mobil continues to lead our peer group with earnings of $32.6 billion in 2013. The decrease of $12.3 billion compared to 2012 largely reflects the lower net gains from divestments of $8.6 billion and lower earnings in our upstream and downstream segments which were in line with general industry conditions. Our earnings performance continues to capture the value of our balance portfolio and our integrated business model. In 2013 Exxon Mobil’s return on capital employed was 17.2% or about 3.5 percentage points higher than our nearest competitor. Over the past five years return on capital employed averaged 21% or about 5 percentage points higher than our nearest competitor.

Our industry leading ROCE performance has been maintained even through the recent period of intensive upstream capital investments which have been necessary to position the company to meet the world’s growing energy needs. Our sustained leadership and capital efficiency reflects our consistent disciplined investment approach, our industry leading project execution capabilities as well as application of our innovative technologies.

In 2013 we invested $42.5 billion in capital expenditures to continue positioning the business for long-term growth and sustainability. Over the past five years we have invested $178 billion utilizing the corporation’s financial strength and flexibility to invest through the business cycle and capture new opportunities.

As you can see on the graph most of the CapEx was associated with an intense recapitalization of our upstream business. We progressed several major projects and completed strategic acquisitions to strengthen our portfolio. Our future plans reflect ongoing significant albeit lower upstream spending and marginally higher spending in the downstream and chemical businesses which are targeted at advantage return projects. I will provide an update on a few of these projects later in the presentation. Our approach to investing is to advance all attractive opportunities that provide competitive returns when tested across a broad range of industry and market conditions. Maintaining capital efficiency and discipline underpins our long-term success.

Another measure the value created through strong financial and operating performance is the cash flow remaining after fully funding our attractive investment opportunities. Over the past five year Exxon Mobil generated $104 billion of free cash flow. This is more than two times the average of our competitors during the period of relatively high upstream capital intensity or the industry as a whole. Consistent, robust free cash flow provides capacity for unmatched shareholder distributions and underpins our strong financial position.

Exxon Mobil’s disciplined capital allocation approach preserves the capacity for investments and industry leading shareholder distributions, while maintaining the flexibility and capacity of our strong balance sheet for longer term planning and execution. Since the beginning of 2009 Exxon Mobil has distributed $131 billion to our shareholders. During this five year period Exxon Mobil distributed 50% of the cash flow from operations and assets sales to shareholders.

As you can see from the chart, this payout ratio is double that of our nearest competitors during this period. Our dividend payouts are made with a view to building long-term shareholder value and providing reliable dividend growth through the ups and the downs of the business cycle. Over the past five years, we distributed $46.5 billion in dividends to you, our shareholders. We recently announced a second quarter 2014 dividend payable June 10 of $0.69 per share, a 9.5% increase over the previous quarterly rate. This is the 32nd consecutive year of dividend per share increases. Since 1982, shareholders have received annual per share dividend increases at an annualized growth rate of 6.3% more than double the rate of inflation.

Share purchases are an efficient and flexible way of returning cash to our shareholders. In 2013, distributions to shareholders to share purchases were $15 billion and just over $84 billion for the last five years. Purchases have reduced shares outstanding by 37% since the Exxon and Mobil merger, including the impact of shares issued for the merger of XTO.

An important benefit of our ongoing share purchase program is the enhanced per share interest in all of Exxon Mobil’s assets. For example, each share of Exxon Mobil owns 16% more of the upstream oil and natural gas production volumes than it did in 2009. Since 2009, Exxon Mobil has delivered annualized production per share growth of 4%, nearly 4 percentage points higher than our nearest peer. As you can see, the competitor group is trending generally flat to down in per share production over the last five years.

This slide shows our all-in natural gas reserves replacement performance compared to competitors over the last five years. For the 20th consecutive year, we have replaced more than 100% of production. In 2013, we added proved oil and gas reserves totaling 1.6 billion oil equivalent barrels, of which nearly 76% are liquids. At year end 2013, proved reserves of oil and gas totaled 25.2 billion oil equivalent barrels comprised of 53% liquids and 47% natural gas. A broad diverse proved reserve base supports today’s production volumes as well as positions us for new supplies in future.

Exxon Mobil has a resource base of nearly 91 billion oil equivalent barrels. The bar on the left shows the diversity of the resource base with substantial holdings in essentially all resource types. It is split equally between 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 in proved reserves. There are an additional 28 billion barrels in various stages of appraisal, engineering design, and development. The remainder of the portfolio approximately 37 billion barrels contains resources for future developments.

Exxon Mobil’s energy outlook, which we refresh and update annually guides our strategic investment programs necessary to meet the world’s growing energy needs. These investments help provide the affordable energy needed to promote economic growth and improve living standards around the world. The picture you see illustrates the changing living standards in the Shanghai suburbs.

Exxon Mobil’s 2014 energy outlook indicates that global energy demand is likely to grow by about 35%. Even taking into account, the offsetting impacts of significant energy efficiency gains, which we expect will capture the world over. Ensuring reliable and affordable energy supplies to support this growth safely and with minimum impact going in the environment, we will require broad-based economic solutions.

The bar chart on the left shows projected growth from 2010 to 2040 by energy type. Oil, gas and coal are the most widely used fuels today providing about 80% of supplies. Oil demand will remain most prominent with about two-thirds of its increase driven by expanding transportation needs. The use of natural gas will arise by about 65% and it will become the second most widely used source of energy surpassing coal. We expect global demand for the least carbon intensive fuels. Natural gas, nuclear, and renewables will rise at faster than average rates led by power generation requirements. We expect that oil and other liquid fuels will remain the world’s largest energy source even in the year 2040, meeting about one-third of the world’s energy demand. While conventional crude oil production will remain the most significant source of supply through 2040 more of the world’s demand will be met by emerging sources that only recently became available in significant quantities.

As you can see in the chart on the left, gains will be lead by deepwater production, which more than doubles to the year 2040. We also expect to see meaningful growth from all sands and tie all resources. And natural gas liquids supply will also increase as it benefits from techniques used to extract the unconventional shale gas. On the right, we see natural gas supply and demand. About 65% of the growth in natural gas supply is expected from unconventional resources, which will account for about one-third of global production in the year 2040. By 2040, we expect energy demand for the transportation sector to increase more than 40%.

As shown on the chart, we expect a continuing shift of the transportation fuel mix toward diesel with gasoline demand remaining flat to declining. In fact, we expect diesel will account to about 75% of the growth in liquid fuels for transportation. This reflects in part high growth rates in developing countries as economic activity expands and fosters greater truck, rail and marine transportation requirements. Natural gas will also contribute more significantly in the future to meet rising transportation needs.

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 packaged goods manufactured with chemical products. We estimate two-thirds of chemical demand growth will be in the Asia-Pacific as the region acquired chemical feed-stock products to manufacture goods for both domestic and export markets. China alone is expected to represent over half of the global demand increase with its rapidly growing middle class and its expanding purchasing power. Like no other commodity energy touches every aspect of modern live and provides tremendous benefits to people everywhere. To sustain progress and further expand prosperity the world must increase the availability of reliable and affordable energy supplies. While the scale and complexity of the energy challenge are immense, practical and economically viable options to meet people’s energy needs do continue to expand. Access to high quality resources is critical as is our ability to develop supplies and ways that are secure and environmentally responsible.

In this regard, technology advances are a key enabler to both safe and effective development of traditional and emerging energy sources. Substantial investments are required to meet growing demand, including the development and use of advanced technologies that are expanding and diversifying energy supplies. Free markets supported by sound and reliable public policies remain vital for future energy developments. This includes policies that promote free and open trade and which encourage private sector investments by reducing regulatory and fiscal uncertainty. And over time, our industry must effectively plan, develop and execute the technologically complex and capital intensive projects that provide the energy people need.

So, we will turn now to some of our operating highlights. And this is one of my favorite pictures, hopefully you saw in the booth upfront. It’s just a gorgeous picture of the b Bakken area in North Dakota, where we are making a number of investments to grow unconventional liquids production. So, let me cover key elements of our corporate strategy as well as the business and operational update.

Exxon Mobil’s strategy has been adopted to achieve our commitment to create long term shareholder value. As discussed earlier, our relentless attention to operational excellence supports safe, reliable and efficient operations. Our diversified balanced portfolio is a fundamental competitive advantage enabling us to manage a wider growth of chemical market and geopolitical risk and maximize profitability through changing business cycles. Continuing to capture the benefits our integrating business model, the complementary strings of each of our businesses allow us to maximize the value of molecules across the entire supply chain. Our integration and global perspective enables us to pursue, select and advance the most attractive business investment projects.

Continuing innovation in the pursuit of technology leadership across all business segments enables our expanding reach, project execution and our operational capabilities. At the very heart of our success are the talented men and women of Exxon Mobil and their drive to achieve premier business results. We must continue to attract, retain and develop outstanding employees. Our long term approach to managing the company has positioned each of our businesses to be at the top at their respective areas of competition enabling the delivery of superior returns to you our shareholders. Risk management is the core of our business is there are elements of risk in virtually everything we do. We take a systematic approach to risk management, guarded by comprehensive system known as the operations integrity management systems or in short OIMS.

OIMS provides a risk management framework with rigorously applied systems and processes to manage safety, security, help and environmental risk and to achieve excellence in our operating performance. OIMS guides the activities of each of our employees as well as our third party contractors around the world. Through OIMS, we focus on clearly defined policies to reinforce accountability and leadership and set expectations, measure performance and recognize progress. Bottom line OIMS helps us to sustain superior operational performance and ultimately maintain our liaisons through operations. Exxon Mobil is well positioned to deliver profitable growth. This chart summarizes key elements of our strategy that provides the financial flexibility required to fund our business and generate robust shareholder returns.

In the upstream, we are adding 1 million net oil equivalent barrels per day of new production volumes by the year 2017 through major projects start ups. Also improving the production with higher liquids and liquids price linked gas volumes, and increasing unit profitability through improved fiscal terms and the pursuit of better margins for each barrel we produce. In the downstream and chemical segments, we are diversifying feedstocks through our flexible and integrated system continuously pursuing operating efficiencies and maximizing sales of high value products. Our businesses also generate cash flow through active ongoing portfolio management and continued CapEx discipline with a clear focus on delivering the industry leading returns on capitals employed. Operational excellence, integration advantages and technology leadership across all of our businesses underpin our ability to grow cash flow.

I will now provide more insight into each of our businesses. In the upstream Exxon Mobil has a large high-quality portfolio with more than 120 projects including 21 new startups planned between now and the year 2017. This slide highlights 8 of the major projects that we plan to startup either this year in 2014 or next. These projects are representative of our geographic diversity ranging from North America to Russia, Southeast Asia and Australia to Africa and the Middle East. We are investing across a broad set of resource types, including the liquefied natural gas, the Arctic, the deepwater, conventional and all sands developments. These projects provide a strong foundation for profitable volume growth across a diverse resourced pipe with a broad set of technology approaches and attractive fiscal regimes. And in the near-term, grow liquids and liquids price linked production. So let me give you a brief insight of our Papua New Guinea LNG project.

The picture shows the LNG plant near Port Moresby. And you can also see the loading jetty in the background extending out into water. The successful completion of the project is unlocking the potential of a very high quality gas resource. The Papua New Guinea demonstrates again Exxon Mobil’s world class project execution capabilities. Beginning with the construction of a 430 mile pipeline, the installation through mountainous jungle was accomplished while overcoming flooding, challenging volcanic soil conditions and steep pinnacle slopes. Because of the lack of preexisting infrastructure, we constructed supplemental roads, communication lines and build up a new airfield. A project requires substantial community and local travel outreach and engagement and effective relationships with the government and indigenous communities.

Despite the many challenges, the project progressed ahead of schedule with LNG production now having started up and the first cargo of LNG loaded in last few days on its way to Tokyo, Japan. We continue to assess potentials for expansion of this project. We are well positioned for a high margin liquid growth in North America, probably the most exciting story in the energy industry over the last 30 years. Our unconventional position totals more than 10 million acres including high quality tight oil, and liquids rich place in the Bakken, the Permian, the Woodford Ardmore, the Montney, Duvernay in Canada, and the Athabasca Oil Sands. And high quality shale positions in Hanesville and Marsalis basins. In addition we hold more than 10 million acres of conventional resource that will contribute to long term liquid production. The combination of XTO’s execution capability and Exxon Mobil’s research expertise is advancing improvements in both resource recovery and cost development. As shown in the lower left we are growing profitable liquid production from our North Amercian holdings to one million barrels per day by 2017 representing a 50% increase since 2012. While the gas production outlook in red reflects our current views of market demand, we do have a very deep ready to drill inventory of well locations, and the ability to quickly increase natural gas production if market conditions demand so.

Essential to our long term growth is developing and maintaining a very deep and diverse portfolio of resource discovery and development opportunities which are indicated on this map. The green color dots highlight conventional opportunities. These include activities in the established areas such as Nigeria, Papua New Guinea, The Gulf of Mexico and Tanzania as well as new areas where we have made significant additions to our portfolio including Brazil, Liberia, Gabon and South Africa. Red color dots highlight our unconventional portfolio. During the past year we had new opportunities in type and heavy oil in Canada. We also have significant activity in South America and soon in West Siberia. The audit portfolio we have shown with the blue dots, the audit section is our most recent and most substantial addition to our global portfolio with substantial new escalation acreage in the Russian audit. We are considering these long term opportunities we are well positioned to leverage the depth of our world wide experience.

Our global natural gas holdings are also extremely well positioned to capitalize on growing demands for LNG, which is expected to more than double by the year 2025. We are evaluating several potential new opportunities to supply this growing demand. Exxon Mobil has been a leading player in the development of the LNG industry through our existing equity interest and operating capacity in Qatar and in Indonesia which are shown in green. We also have interest in new LNG capacity indicated in yellow through our participation which I just described, Papua New Guinea and the Gorgon project in Australia. We are capitalizing on our world class experience technological capabilities and our marketing expertise as we progress a number of new exciting opportunities to grow the LNG portfolio as shown in the red box. These include Tanzania, Australia, Russia and North America.

So let’s now turn to the downstream where we continue to strengthen the portfolio by selectively investing in our strategic assets and capitalizing on Exxon Mobil’s technology, scale and integration. The picture you see is of our world scale Baytown refining and chemical complex down the Texas Gulf Coast. Lowering raw material costs continues to be a focus area particularly in North America where new light and heavy crude supplies are creating unique opportunities. During the last few years we have expanded our advantaged North American crude runs by 40%, given our installed capacity and feedstock flexibility, our investments in this area continue to be incremental and completed during maintenance turnarounds and which allows to a very rapid startup of these new facilities.

Many of our investments are focused on growing sales of high value products such as diesel, jet fuel and lubricants. For example, we recently commissioned a new Ultra Low Sulphur Diesel unit in Singapore and a new desulphurization plant in Saudi Arabia is nearing completion. We are also progressing plants to install a coker at our Antwerp refinery in Belgium to upgrade low value bunker fuel into higher value diesel which is in high demand.

In our lubricants business, we have projects underway to expand high performance base stocks and finished product manufacturing capacity. We are investing in logistics capabilities as highlighted by our joint venture rail terminal project in Edmonton, Alberta, Canada. This terminal would allow us to supply up to 100,000 barrels per day of crude from Alberta, Canada to our North American refining network.

Steps to reduce operating cost include investments in steam and electric cogeneration capacity that was recently completed in Augusta, Italy as well as a new cogeneration plant which is being progressed in Singapore. Our disciplined portfolio management process results in the best asset mix in the business. We continually upgrade the portfolio in possible ways to build shareholder value.

Since 2005 we have reduced our global refining capacity by more than 1 million barrels per day by divesting smaller, less competitive facilities. And we have completed the transition of our domestic retail fuels marketing to a more capital efficient and growing branded wholesale business model. Exxon Mobil’s commitment to disciplined investment extends to our chemicals business where we are developing major projects in the United States, Saudi Arabia and Singapore.

To build on our competitive advantage, we continued to invest in the world scale projects to capture advantage feedstocks. In the U.S. we are progressing a multi-billion dollar project to capitalize on the abundance of low cost North American ethane. We plan to expand Baytown’s capacity with 1.5 million ton per year ethylene plant and install associated polyethylene lines at the Mont Belvieu plastics plant which is shown in the picture. Projects are targeted to capture opportunities to reduce production cost by installing advanced process technologies that enhanced energy efficiency, achieved greater reliability and produce higher yields.

Continuing to invest on increasing production of high value products in an even ever changing market is important of the long-term success of the chemicals company. For example, a new 400,000 ton per year facility in Saudi Arabia will produce specialty elastomers to serve growing demand in the Kingdom, the broader Middle East and Asia. We also recently approved a world scale grassroots specialty polymers project in Singapore to produce synthetic rubber to support the growing tire market in Asia as well as premium resins for adhesive applications.

Integration of new projects with existing, refining and chemical units enables lower capital and production costs by leveraging the existing site feedstocks, the utilities, the infrastructure and the organization. Last year, we successfully completed the startup of a new world scale steam cracker at our Singapore complex. The site is now producing some of our most advanced plastics and synthetic rubbers and is well-positioned to serve the rapidly growing markets in Asia and beyond.

I am very proud of our operational performance and financial results of the past year. An example of our success is shown by the photo of modern LNG cargo vessels to parking Qatar is done to supply the world’s need for reliable and affordable energy. Simple through our strengths and competitive advantages is a steadfast commitment to operate with the high standards of ethical behavior and corporate citizenship. Building strong relationships with the customers we serve and the communities where we operate as I want to touch on, on the next slide.

Exxon Mobil has many responsibilities to our shareholders, our neighbors, our customers, and our communities. We strive to be responsible corporate citizens and our success is underpinned by our technological expertise, our operational excellence, our safety performance and an unwavering commitment to ethical standards. Exxon Mobil views effective risk management and a commitment to safety as a business imperative. As you can see, we strive to continuously improve our safety and environmental performance.

Our business presence serves as a positive long-term economic driver in the communities where we live and work. We continue to make significant progress in hiring host country workers, which advances economic development and education in the communities where we operate. In Indonesia, for example, nearly 90% of employees are Indonesian nationals. Working through the Corporation’s signature programs, promoting women as catalyst for economic development, fighting malaria and improving education, we promote social development in communities around the world. Last year alone, we invested more than $10 million in promoting economic opportunities for women, $13 million in the fight against malaria, and $100 million towards education initiatives worldwide.

As we have said for many years, financial results and stock market returns, particularly for highly capital intensive industries are best viewed over long time horizons. An industry like ours requires sustainable risk management of cash and capital and long cycle times for investments to deliver results. Exxon Mobil has generated greater shareholder returns in the broader market and greater returns in the average of our competitors over the last 10-year and 20-year periods. Over the last decade, the S&P annualized return was 7% versus Exxon Mobil’s annualized return of 12%.

I will leave you with the key messages shown on the screen. In summary, Exxon Mobil, your corporation is well-positioned to provide the technological and industry leadership to meet the world’s growing energy needs in a safe and responsible way. Our current portfolio of assets and long-term investments are laying the groundwork for extraordinary opportunities for investors and we will provide the energy needed to fuel global economic growth and advancement in a very dynamic time. So, I want to pause for a moment and take a look at a short video, where some of you may have seen running on the television stations.

(Video Presentation)

So, now I would like to turn to the formal business of the meeting today. To begin, let me make a few brief remarks on shareholder proposals and voting. Each year, the corporation receives a number of suggestions from our shareholders. Some of these are in the form of proposals to be presented at the Annual Meeting, but let me just share you each is given careful 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 the conduct of the meeting. Recognizing that the majority of our shareholders have voted by proxy and are not present, we have established procedures to facilitate the meeting in an orderly way. We have setup the process for speakers to identify themselves and express their views and we welcome those views. In order that as many shareholders as possible can participate, as Mr. Rosenthal indicated, we have set some time limits and a system to simply help you manage your time.

We have 8 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 you, who wish to leave the meeting at anytime, let me express my appreciation for your attendance. Since we have a number of items yet to be discussed on the program and you have been sitting for a while now, I would invite you to take a brief moment to stand, stretch your legs just for a moment I ask to not leave the hall unless you absolutely need to.

Okay, you please take your seats. The first item of business is the election of 12 directors. I nominate the 12 persons identified on Page 17 through 20 of the proxy statement. These 12 people are highly qualified to serve on the board. All of our nominees are currently serving as Exxon Mobil directors. All board nominees are present today.

So now, I would like to ask the nominees here 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, Henrietta Fore, Jay Fishman, Ken Frazier, William George, Sam Palmisano, Steve Reinemund and William Weldon. Before moving on, I also would like to recognize one person that is retiring from the board today. Ed Whitacre served as a Director of your company since 2008. And I’d like to recognize Ed and thank him for his service.

I declare the polls open for all who want to vote in the election of directors and the 7 remaining items. If you wish to change your proxy instructions on the election of directors or any of the other 7 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 anytime 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 Exxon Mobil’s financial statements for 2014 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 Page 60 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 60 to 62 of the proxy statement.

The next order of business is consideration of the 5 shareholder proposals in the proxy statement. The first shareholder proposal regarding majority vote for directors is shown on Page 63 of the proxy statement. I understand Mr. Marco Vargas will present the proposal. Mr. Vargas?

Marco Vargas

Thank you, Mr. Chairman. I am Marco Vargas representing the United Brotherhood of Carpenters Pension Fund. Our funds collectively holds approximately 1,400,500 shares of Exxon Mobil common stock. We are committed long time owners. We appreciate the opportunity to gain an introduction, a majority vote shareholder proposal that we believe advances an opportunity in corporate governors. The governors appreciate the constructive dialogue, which we have maintained with Exxon Mobil representatives over many years an important corporate governance and executive compensation issues.

Our proposal is designed to encourage Exxon Mobil Board of Directors to adopt the majority of vote standard for the director selections despite the Board’s opposition to minority vote proposal receive 46% vote last year’s meeting. A majority vote standard used in the uncontested director election provides shareholders meaningful voting rights. The combination of minority vote standard with the company’s current director resignation policy would establish a strong election standard. The resignation policy provides for a post selection process in which the Board can exercise its judgment and make decisions on continued status on any unelected director. Nearly 90% of America’s largest corporations and all of Exxon Mobil’s peer companies have adopted the majority vote standard in compensation resignation policy. Exxon Mobil remains the largest American company that has not adopted to majority voting. We urge the Board to establish a majority vote standard and join the mainstream of America corporations on this important election reform. Thank you, Mr. Chairman.

Rex Tillerson - Chairman and Chief Executive Officer

Thank you. The Board recommends a vote against this proposal as outlined on Pages 63 and 64 of the proxy statement. The next shareholder proposal to limit directorships is shown on Page 64 of the proxy statement. I understand that Fr. Michael Crosby will present the proposal. Fr. Crosby?

Fr. Michael Crosby

Good morning, Mr. Tillerson and the rest of you on the Board and shareholders. I am here to on behalf of Kenneth Steiner of Great Neck, New York to move proposal 5, basically shareholders recommend that our board take the steps necessary to adopt a bylaw to limit our directors to a maximum of 3 board memberships in companies with sales in excess of $500 million annually. So that’s the proposal. And since Mr. Cynor and John Shalagan asked me to move it, I’d just like to say other reasons why from my perspective, this is a good resolution to support. And I want to back to what Mr. Tillerson said about the dialogue the company has taken with shareholders. We have a very good an informative meeting in New York with executives around the issue of climate change and other issues. And they were forthcoming. We had disagreements on some agreements on other. But that was in December and you all know we’ve been here before, our ongoing issue is that the company isn’t doing enough to address the crisis around climate change.

Now that was December. In March the intergovernmental panel on climate change, of which this company has part in it, said in effect first paragraph climate change is already having sweeping effects on every continent and throughout the world’s ocean. Scientists reported Monday. That was in March. Then earlier this year, I mean earlier this month, the Congress of the United States issued a mandated report where it’s more of the same in fact the world is at the door.

The effects of human induced climate change are being felt in every corner of the United States, scientists reported Tuesday. Our concern is that the directors, if they have too many outside responsibilities aren’t going to be able to address the crisis we are now in. Crisis is here. The world is at the door, every one of us is going to have to find creative ways to deal with how do we mitigate the risks? Even the company has said, it’s going to do that. So for this reason I urge support of this resolution so that all our efforts can find alternative ways to keep that low from blown down the house.

Rex Tillerson - Chairman and Chief Executive Officer

Thank you. The board recommends the vote against this proposal as outlined on page 64 of the proxy statement. The next shareholder proposal deals with an amendment to the corporations EEO policy and has shown on Pages 64 and 65 of the proxy statement. I understand that Michael Crosby will present this proposal.

Fr. Michael Crosby

Again I am Michael Crosby, Capuchin Franciscan. I am here on behalf of the New York State Common Retirement Fund to urge you to support the resolution of the New York State Common Retirement Fund, which holds 12,987,000 shares of Exxon Mobil. It believes the companies have a competitive a competitive advantage in recruiting and retaining employees from the widest pool of talent and the discrimination based on non-job related criteria can lead to less efficient business operations. It say over the last seven year a number of major U.S. corporations including a large majority of the Fortune 500 have agreed to add formal and explicit commitments to buy our discrimination based on sexual orientation and gender identity to their employee policy statement, partly say Exxon Mobil unfortunately is not one of these Fortune 500 companies.

The New York State Common Retirement Fund believes that Exxon Mobil has changed its policy and joined with the overwhelming majority of major U.S. corporations and supporting both human rights and more efficient business operations. And therefore on its behalf I submit the resolution to prohibit discrimination based on sexual orientation and gender identity filed in the proxy materials.

Rex Tillerson - Chairman and Chief Executive Officer

Thank you the board recommends a vote against this proposal as outlined on pages 65 and 66 of the proxy statement. The next shareholder proposal calls for a report on lobbying and has shown on pages 66 and 67 of the proxy statement. I understand Mr. Shawn Gilchrist will present the proposal.

Shawn Gilchrist

Our shareholders, we encouraged transparency and accountability in the use staff time and corporate funds to influence legislation and regulation both directly and indirectly. Absent a system of accountability, company assets could be used for objectives contrary to Exxon Mobil’s long-term interests. Exxon Mobil spent approximately $30 million in 2011 and 2012 on direct federal lobbying activities. These figures do not include lobbying expenditures to influence legislation in states. Exxon Mobil lobbied at state level with at least 286 lobbyists in 35 states between 2003 and 2011.

Exxon Mobil is listed as a member of the American Petroleum Institute and CEO, Rex Tillerson is a member of the Business Roundtable. In 2011 and 2012, the Business Roundtable spent more than $31 million on lobbying. Exxon Mobil does not disclose its memberships in, or payments to, trade associations, or the portions of amounts used for lobbying.

Corporate lobbying exposes our company to risks that could affect the company’s stated goals, objectives, and ultimately shareholder value, and we rely on the information provided by our company to evaluate goals and objectives, and therefore, have a strong interest in full disclosure of our company’s lobbying to assess whether our – whether our company’s lobbying is consistent with its expressed goals and in the best interests of shareholders and long-term value. Therefore we encourage our board to prepare a comprehensive disclosure related to direct, indirect and grassroots lobbying. Thank you.

Rex Tillerson - Chairman and Chief Executive Officer

Thank you. The board recommends a vote against this proposal as outlined on page 67 of the proxy statement. The last shareholder proposal calls for Greenhouse Gas Emissions Goals and has shown on pages 67 and 68 of the proxy statement. I understand that Mr. Patricia Daly will present the proposal. Mr. Pat.

Patricia Daly

Thank you Mr. Tillerson, good to see you this morning Mr. (indiscernible), thanks again for that meeting, the Crosby referenced and continued dialogue. Good morning members of the Board of Directors, it’s great to have you here and I appreciate these couple of minutes.

I represent my congregation the Dominican Sisters of Caldwell, New Jersey, also the American Baptist churches and about 40 institutional and individual shareholders, longtime shareholders in Exxon Mobil, some of them also longtime shareholders in Mobil. So I am here to move the resolution, we’ve been here for many years, about seven or eight years I think now asking our company to give us the business plan, to set goal to reduce screen definition in both operations and in product. Mr. Tillerson, I believe you started with Exxon in 1975 that is the year I entered the Dominican order, life has changed. That year ICCR members, we interface center on corporate responsibility, had shareholder resolutions about South Africa at both Exxon and Mobil.

We’ve been working with our company since 1996 on this issue, even longer with some other companies. Since then we have an additional 1.6 billion people on this planet. In 1996, there were 370 plus million of carbon in the atmosphere. Today we have well over 400 parts. Scientists tell us that 350 is the number to maintain a safe, loving environment. I think a lot of storms, right. But it’s no longer about the storms, it’s about food system on the planet, it’s about water, it’s about issues, it’s about ocean life, it’s about sea levels an incredible shift to this planet. Father Mike referenced the U.S. climate assessment report mandated by Congress how desperate that report now comes.

Back in 1997, our resolution that year asked for a report on climate risk, environmental liabilities. We are so grateful that our Board and our management has given us this report this spring. However, I am also concerned we took 17 years. So we have to report we are working on it, we work together, but our company continues to rely on a bid that the nations of the world will be nothing about climate change for the next 30 years.

I am working with the auto companies in the United States. They worked with the EPA to establish realistic new goal fuel standards, but they need the oil and gas industry to deliver the fuel, the cleaner fuels in order to make this happen. Our business plan impacts all businesses, not just in the United States, but around the world. It impacts people’s lives around the world.

I am seeing now that investors, major investors around the planet are now shifting money into the clean technology, the new businesses that we need. I know some of your board members, Mr. Weldon we have worked together with JPMorgan Chase. Mr. Reinemund is on that board. The financial sector we are witnessing a massive shift into new technologies. We need to step up to the responsibility as the nations of the world next year prepare for a new climate treaty. Retirees today depend on our business in the next 20 years, but employees today depends on the success of our business for the next 15 years and is got to be making the right investment.

I have a cousin who is about to start an engineering degree. I haven’t seen kids yet who are looking to go into the oil and gas business. The creators, engineers ongoing to the alternatives, we have got to be moving more money into the alternatives. Please give us the business plan to be able to pull that cost. Mr. Tillerson, thank you very much. Everybody, thanks so much for your time and patience today.

Rex Tillerson - Chairman and Chief Executive Officer

Thank you. The Board recommends a vote against this proposal as outlined on Pages 68 and 69 of the proxy statement. All items of business have now been introduced. I invite many of you that want to stand and stretch your legs for a minute and for those of you who wish to address the meeting in the discussion period this should be a good time to make your way towards one of the hall seat, so that you will have ready access to microphone. So, we will take a stretch for a minute.

Okay. If we could resume the meeting, you take your seats please? I now open the floor for discussion on the items of business presented. I would ask at this stage of the meeting that you limit your comments through the Board and shareholder proposals that are in the proxy statement as promised will have an opportunity for general comments or questions later. We received a number of questions on proxy cards and through our websites. And again, as I indicated as time permits, we will try to address some of those as well.

So, as described earlier, if you have not already done so, if you could get near an hall seat so that you are near the microphones and if you would remain seated until I call upon you, but simply raise your hand, holding your speaker identification card to indicate you like to address the meeting when I recognize you, please give your speaker card to the usher, stand and he will hand you a microphone and the microphone will be made live at that time. Again, I would ask that you keep your comments as brief as possible, so that we can allow as many people to speak and wish to do so. We will continue to use the lighting system just to help you manage your time. First priority will be given to those who have not spoken yet. So, let me begin over here.

Question-and-Answer Session

Frank Rauscher - Aquinas Associates

The topic is climate change. My name is Frank Rauscher. I am Senior Principal of Aquinas Associates in Dallas. I am here on behalf of the Christopher Reynolds Foundation. The foundation withdrew its resolution report on climate change assumptions is for strategic planning following constructive discussions of Corporate Secretary, David Rosenthal and his colleagues on December 17, 2013. And subsequent discussions and exchanges of letters have resulted in Exxon’s energy and climate report posted on your website and what you also have available out in the lobby. Mr. Tillerson, you will recall that in your talk to the (indiscernible) June 12, 2012, you said we have to be efficient and we have to manage climate change, but we also need to look at the other side of the engineering solutions, which is how we are planning to adapt to it. And there are solutions it’s not our problem we can’t solve.

One year later at the City Club of Cleveland in June 14, 2013, you raised another issue, having climate change is a risk management problem, what am I going to do about it as it turns out that (indiscernible) mitigation steps make the difference, what’s plan B. Plan B means you will start thinking about which kind of that (indiscernible) necessary of the consequences that people are concerned about present themselves. Since the December 2013 meeting, several significant reports have been released pointing to the urgency of addressing the methods between the energy and climate. As you know, these include the report of International Panel of Climate Change, the U.S. Climate Change Assessment and the CNA Military Advisory Board report on national security of accelerating risks of climate change. And we will also see the nexus of energy and climate change as important. Exxon Mobil’s March 31, 2014 energy and climate report to shareowners prepared response to the Reynolds Foundation’s resolution states that Exxon Mobil delays the changes to the earth’s climate including those that may result in anthropogenic pauses of the risk. And in order to address this risk, we are starting to consider economically efficient policies that includes the mitigation and (indiscernible). And that balanced reduction in climate risk with other global developments will need including the need to sustain and provide glory in populations.

Mr. Tillerson, what are the steps that you and City of Exxon are going to mitigate their risk of climate change? If these steps are not sufficient, what is your plan B, which you observed at the Cleveland requires that you know? How is Exxon Mobil using its resources to address the world’s biggest energy challenge how to meet global energy demand while addressing the potential disastrous impact to climate change on the global economy and/or generally in the whole global community? The March climate in energy report was a good beginning for a dialogue, but that may answer all these questions. We look forward to continuing dialogue, which we had agreed with your colleagues on these energy climate issues. And Mr. Tillerson, we look forward to hearing more directly from you on how we together can and will meet this challenge? You are the leader of the company and we expect your good participation sometime soon. Thank you for the opportunity to address today’s meeting’s first dialogue.

Rex Tillerson

Well, thank you Mr. Rauscher and thank you for being here on behalf of the Christopher Reynolds Foundation. As you indicated, we have published two reports and those are available to any of you who have not seen those, they are available in the print material that’s out in the lobby area, but they are also available on the website. And we also appreciate the dialogue we have had. And I think as we have said for many, many years now and as you have properly characterized my comments in various forms, we do view this as a risk management problem. And I think for a long time all we were talking about whole conversation was about how are we going to stop greenhouse gas concentrations from reaching certain levels in the atmosphere. And my view of that was multiple fold and I have shared with this audience before in past shareholder meetings that achieving certain levels that some suggest had to be achieved. There is no one today that can map a viable pathway to achieve that, no one. No one has a viable pathway to get there. It doesn’t mean we shouldn’t strive.

And I think the steps we are taking as a corporation are enabling at least progress towards mitigation. Our expansion of natural gas portfolio to displace higher carbon intense forms of power generation fuels to the lower efficient to higher efficiency fuels that we are producing for transportation sectors, for industrial uses are lubricants, our manufacturing of lightweight high strength plastics that displace heavier weight materials, more efficient to produce lighter weight, improve energy efficiency. I think as we have long said that the first and important step to every consumer, whether it’s an individual consumer and industrial consumer should be taking is to look at your ability to utilize energy more efficiently, smartly, because then you carry out your same activity and have a lower overall impact.

But even when you take all of those things in consideration in our energy outlook, we project what we think the effects of those are is still very difficult our map a viable pathway to certain concentrations that some people’s models indicate or desirable. So, a few years ago, in recognition it’s a risk management problem, the way you deal with risk is you take the steps you can to mitigate, but recognize you cannot eliminate the risk or certainly you can’t eliminate all of it. So, you should be spending some time thinking about well, what if everything I am doing even it doesn’t work or what if it turns out the reasons for all this happening aren’t what we thought they were, but the end result is the same. How are we going to deal with that?

So, as part of prudent policy discussions, we have begun to promote the dialogue around we think you have to think about this problem with both of those areas in mind. So, that’s the genesis of the conversation. And as we have looked at our own operations, we take a very broad view to where we can harden our assets, harden our facilities and we learned a lot through some of the terrible storms we have been through the Gulf Coast. And so where we see opportunities to do so we are hardening our own facilities and assets, but I think importantly we are also investing in those forms of energy delivery that we know will help with the mitigation as well.

I think you rightly acknowledged this is the most complex area of scientific and social conversation anyone is having today. It is extremely complex. And it is one that there is not going to be a ready set of solutions that are going to fit the world’s peoples, because the world’s peoples all have very needs at this stage of their development, which is why it makes it so complex. So, we all – we do support and engage in and we will continue to engage in active dialog. And we are going to continue our active engagement with UN’s Intergovernmental Panel on Climate Change. We have been actively engaged in that panel now for almost two decades with our own scientist, peer reviewing their work. So we are keenly aware of what that work is indicating. We are going to maintain our engagement with that.

So, I think it’s something that the ongoing dialogue is important. People need to be examining what the various pathways to mitigate are, but being realistic, if those don’t produce the outcome, we won’t – how we don’t deal with it. And I am a – this is a technology driven company. And so we have enormous faith in the technological prowess of the human mind in the innovation, because we have seen what is producing all of our lifetimes. And I am as confident about the things we do today that I never dreamed we would do 30 years ago. I am just as confident that the solutions to a lot of these problems, the same technical innovative minds will deliver those as the problems present themselves. And people are actively working on that. So, I appreciate and take the dialogue important. We take it seriously. We appreciate the engagement and we intend to continue that dialogue and engagement. I wish there was a simple list of things, I can tell everybody to go do. It’s just a little more complicated than that, but thank you for your comments. Yes, the lady in the blue right here.

Unidentified Analyst

Can you hear me?

Rex Tillerson

Yes, ma’am.

Unidentified Analyst

(Question Inaudible)

Rex Tillerson

Yes ma’am I think I know where you are going you would like some help.

Unidentified Analyst

Well, I need to tell you or (indiscernible).

Rex Tillerson

And this is the man who I hear that can help you.

Unidentified Analyst

Now he is not. I have contacted you. I have contacted everybody we have now gone through district court filing a case district court then said I had to do. I had probably give (indiscernible) agreement. And then that I was granted if I had to turnover this year to the district court then Exxon Mobil computer share through it out and next to the appellate court a lawsuit in appellate court (indiscernible) how many people and power taxes on the appellate court that we have connection with Exxon.

Rex Tillerson

I don’t know.

Unidentified Analyst

And actually you signed out (indiscernible) anyways make a longer chat and no one pays my turn. I finally gave her let’s say $21,000 to get those shares put into the chart. Then are we moving some right CE choices which we have encountered and that was a pullback situation as they moved me into the business and commerce I couldn’t pull back will so I paid $21,000 to get 8000 shares that my mother bought.

Rex Tillerson

This gentleman right here, right down here.

Malcolm Shaw

Mr. Chairman I’m Malcolm Shaw from Dallas, Texas. This question, what is the minimum expected production per day that we would require before we drill a well?

Rex Tillerson

Well, that depends on the cost of the well, depends on the resource we would expect to recover and the physical regime, the taxes we would have to pay. So, it vary literally varies around the world and varies from state to state.

Malcolm Shaw

Well, a 100 barrels a day, would that be.

Rex Tillerson

If you had a 100 barrels per day but you’re only – you’re going to recover 1000 barrels, we probably wouldn’t drill that well. So, I just want to say it’s not a – it’s much a production right alone if it is all those other factors. So, there is not a single, there is not a single answer.

Malcolm Shaw

Okay. This is second question. I’m noticing that Russia has signed a pack with Cuba to explore their fields and that’s in our backyard. I see that we are in China and we’re off the coast of Angola communist countries. If there any way that we can drill down in Cuba has to grow their share until the state department approves?

Rex Tillerson

Well, the current sanctioned law of United States will not allow us to participate in any activity in Cuba. There has been limited exploration wells drilled offshore Cuba, none of them have been successful. So, it’s questionable as to what the resource potential offshore Cuba is, that’s not been confirmed by anyone at this point.

Malcolm Shaw

My last question. On Page 3, of the Annual Report gives your picture, where did you get that green tie?

Rex Tillerson

I don’t know if I had a green tie, maybe that would be Photoshop. I’m constantly wearing a wrong color of tie to the photo opportunity. So, they have learned to Photoshop my tie color. Yes, sir, right down here in the front.

Unidentified Analyst

Thank you. (indiscernible) I will be back here. First, I want to say is thanks to you and all of the companies for doing such a fine job with everything you do, I mean you make money that’s in the game. So, thanks for doing that. However, I have few other comments, number one is I talked two years ago about having more females on the Board of Directors, you still have only two females, 17% that’s not really very great. Mary Barra is now CEO at GM. We got people out there, there is a lot of females around. If you look at some of statistics I have some from the UK and so that companies with more woman than boys were found to outperform their vitals with the 42% high return out in sales, 66% higher return on invested capital, 52% higher on equity.

I’m not sure if the numbers are right but they’re not 2%, 5%, they’re big numbers. Also, I suggested two possible females for the Board of Directors to your company already, one of them is in Dallas, I have seen they’re happy with that, I’m not sure we’re going with it. I really think we got to have more females and not only for Board of Director but also to the management of the company. So, I hope you appreciate that and maybe we’ll talk about this in future years.

The second thing is I also support the PVL policy having another 6, I think both for GE, LGVT people made progress with you in terms of now allow them to have benefits because they’re part of them. So, we’re somewhat there, yeah I was sort of shocked because I thought with that’s ruling that you are forced to do certain things, you do certain things, did you did anything else besides there. So, we’re going to so far not the other way. It so reminds me of the boys scouts that you and Bob made several years ago, they now have allowed girls in that girls scout in the troops so they made progress, I like to see that make more progress also. And I do here some other comments that you want to right now things on the proposals correct?

Rex Tillerson


Unidentified Analyst

Thank you, sir. Appreciate it very much.

Rex Tillerson

Thank you. Right here. Yeah, you’re right here now. Yeah.

Julian Martinez - SER-Jobs for Progress National

Thank you, Mr. Chairman. My name is Julian Martinez, now represent SER - Jobs for Progress National. SER organized 50 years ago in Texas to assist Hispanic community a careful and find the economic opportunities. SER has expanded their services in to many other areas and provides these service in a cross-air country serving over 1.3 million people a year. Exxon Mobil has been a part of SER and we would like to take this opportunity to thank you for SER and Hispanic community. A special appreciation recent participation in our 50th Annual Conference a few weeks ago here in Dallas.

They were often and SER has experience in a emblem. And changes right in client side. We have shared these moments in early 2014 as SER client American branch will allow us to Ad during the Super Bowl and Olympics they range above one voice over call than U.S. They do their market research and look their numbers, they know how fast the country is changing. As you may know, the Hispanic community is increasing dramatically. One in four children in the U.S. are now working home and the number of Hispanics home businesses grew by 44% compared to 15% for non-Hispanics firms. The combined Latina population of U.S. is greater than the total population of Canada and greater than any of Latin countries except Mexico and Brazil and would be the world’s 14th largest economy.

We are not sure that Exxon Mobil gets there. You have no Hispanics on your Board of Directors and your involvement in the community has been rather limited. We welcome and we would ask that you consider having an Hispanic Board Member as your next opportunity. Thank you.

Rex Tillerson

Thank you. So, back here in the back. Yeah, first one, right there.

Unidentified Analyst

Hello, Mr. Tillerson and congratulations in fellow stock awards. And then would you admire from batteries of Louisiana. I like to make a few comments. The energy industry working through the API has been filed to work along the side the fab unions such as the billing trade to support sound pro-growth policy. We want the best trained and best qualified workforce in the world period. An on going action has been on improving job of training programs for industry, the challenges of the 21st century means that the business leaders must take their highest priority to technical labs of workers and the surrounding community. I hope these words now familiar as those were the mocks made by you in the speech on the March 11th in Russian DC at the North America’s Billing Trades Legislative Conference.

In batteries, we would like you to encourage human resources to move to involve the union wealth the United States Steelworkers, United Steelworkers in training our employees to be the highest field in this competitive environment both in the refinery and the chem plant. The Union has important points on views on what it takes to work in this hazardous environment. Also, what is required to head with steel you needed to do the jobs they do. United Steelworkers shares your view on offering cooperative union management relationship, would like to assistance to emphasize both the needs to work together to improve the batteries facility. The employee those that would be skilled in required to work in the facility. They’ve been doing it and have been doing it for over a 100 years.

The Union wants to bring the mentality of safety and best trained employees as part of addressing the safety concerns in a cooperative joint health and safety committee where management views of the Union can work together to address the concerns of this aging facility. We would appreciate your help in getting the facility to become one of the best and safest workplace in this competitive environment. Thank you for your time.

Rex Tillerson

Thank you. Other comments on the shareholder proxies, any other shareholder proposals. Sister Pat.

Patricia Daley

Thank you. Pat Daley again from the Dominican. Mr. Tillerson, we chatted a couple of times that your support for carbon tax, and it doesn’t surprise you that I revoted in favor of the report on logging. Could you tell us how, what kind of conversation you’re having around carbon tax, I think it’s probably a simpler option than carbon trading and other SKUs. But, again can you tell us how Exxon Mobil is spending lobbying dollars on, some kind of your solution to be able to deal with the policy around this?

Rex Tillerson

Well, the kind of dollars that would show up in our lobbying report is an allocation of – in terms of me my direct time. Any time I go to Washington and engage with any policymaker to whether they would be elected legislators in the Congress, the executive branch and whatever form we log that time and that goes into the report. So, the conversations that I've had really over the last several years have been with a variety of congressional leaders, leaders of both parties, chairs of the relevant committees, I’ve had conversations with state department, energy department, the interior department, around policy choices to deal with the issue.

And my view has remained unchanged. I always preface it by saying if policymakers come to the conclusion that they have no other ways that they feel they can deal with influencing the behavior, the choices that people make around their energy consumption and you are considering various schemes by which to do that, and the most profitable ones are various forms of cap and trade policies, our valuation of those alternatives suggests that a carbon tax is the most efficient way to implement policy design to influence behavior.

So, our engagement, we talk about why we feel that way to pros and cons of trading systems which we have a long term test and experiment that is going on in Europe now for quite a long time. It’s not produced a very good result because Europe carbon emissions are going up while in the United States carbon emissions are going down in the absence of any policy.

And I think it’s important that we not take that lightly. So, our conversations have been prefaced first by you need to understand what that means for economic performance for the US economy or economies anywhere in the world when you impose any added cost to the system, first you need to ask yourself what does that mean for the economy and who bears the largest burden in that. And our view continues to be that when you impose a cost like that in whatever form on the economy, those less able to bear it end up bearing it, the poor, the lower middle class. So, we don’t really believe to that point that we have to do that. But if you don’t want to go there then we sit down and talk about our view that this is the most efficient straightforward fairest way to try and influence behavior.

So, those conversations continue because – I know you are well aware, there is a lot of conversations goes on in Washington about what should, what kind of policy choices should be undertaken. And we remain as actively engaged in those as ever. Other comments on proxy, Robert?

Unidentified Company Speaker

I would like to speak to the lobbying issue as well. And I read with interest this March article kind of a lead article in BusinessWeek, the Petro States of America and in effect it is saying that this company and the industry have the control of what happens in the United States Congress in terms of legislation. That’s why they titled the Petro States of America. And as the small sections, big oil swale the Washington, makes the US a petro state in all but me. When I look at that, and then look at other data, I see that according to the centers, the majority of Republicans don’t believe that there is climate change, 90% of this company’s political contributions are going to Republicans. So, on the one hand in this place we hear you saying there is climate change, the burning of fossil fuels are a human factor contributing to it, and yet we are going to support those very entities that are undermining the reality.

When I look at the power of lobbying and you see what is going on, you see that the new campaign that the company has that was in Wall Street Journal, USA Today, you have all seen it. And I would give anybody $1 on the floor here if you know what this campaign is really saying I could give you a dollar because I have all the property, I can’t get much more. Now what has this campaign said Exxon Mobil says there is climate change. There is global warming, the burning up fossil fuels are contributing to it and we got to do something because the world is at the door everybody in the United States would know that we got to do something. This is doing nothing.

This company, the Board of Directors and management have to do something to change. I read in our disciplines I read what you said there is 10 million acres this is what you said 10 million acres are under North American production which is business as usual. I had a Baptist among Sunday here in Arlington and the father is in the second biggest solar company in the United States based here. And if the costs are going down so fast and I thought what if we had 10 million acres in solar. I think they are trying that we got to make choices when we are facing this kind of a crisis. And so I urge you to use your suasion in advertising to let the people know it can’t be business as usual. Thank you.

Rex Tillerson

Thank you. Over here.

David Martino

Chairman, my name is David Martino, I am a geologist and I am against between house gas I voted against it. It is interesting to note that the term global warming is now called climate change. You know why this is because the temperature has dropped one degree in the last 10 years. They do not want to recognize that 800 years cycle has been going on for ever and ever. Carbon dioxide is a vital chemical compound that every plant needs to live and grow on and it synthesizes the oxygen for all humans and animals to live on. The main cause of carbon dioxide believe or not is volcanoes and people do not want to recognize it. And so book put out by Professor Ian Plimer, he is from Australia and he says the amount of carbon dioxide actually that comes from volcanoes is what’s causing all the problems, it’s not the work, it’s not all of the greenhouse gas guys that want to say shutdown this. You got the carbon tax they were talking about is really kind of interesting. Our current administration wants carbon tax because he wants to raise money to give to the poor who will vote for him and it’s not for anything else (indiscernible). So we are not going to change the global warming concept which is now called climate change and I hope everybody voted against your recommendation.

Rex Tillerson

Thank you.

Jack Fuller

Good morning. My name is Jack Fuller. I am here from (indiscernible) Texas a City of 1,000 people. We do not have an Exxon or a Mobil station. I moved to Harrold two years ago from the city of Odessa, Texas well over a 100,000 people which also does not have one Exxon or one Mobil station. We used to have a large humble pipeline company there your Exxon Mobil Pipeline now. I am wondering why we cannot have an Exxon station there had the people of Odessa done something to have the end the company. We could drive 25 miles, 30 miles over the midland and they have got over Exxon station, three Mobil stations why can’t we get the world’s best product in Odessa. I would like to know that and if you don’t know the reason then shame on you folks because…

Rex Tillerson

I am sure one of these folks I have stated notes for the branded wholesale organization to get right on that, thank you. Any other comments on shareholder proposals. We are seeing none. I think all the items of business are now being covered. If any of you have proxy cards please hand them to the ushers at this time. Those of you who have already returned your proxy cards need not vote by our ballot unless you wish to change your vote. If you do wish to change your vote, simply mark the appropriate sections of the ballot. The appointed proxies in attendance today hereby cast all votes, which we have been authorized to cast in accordance with the instructions indicated on the individual proxy cards. If you have proxies please pass those to the ushers in the hall at this time.

Since proxies and ballots have been collected, I now declare the polls closed. While the inspectors of elections are preparing their preliminary report, I will answer a few more questions regarding Exxon Mobil’s business or I will have time for further comments. I will interrupt this discussion period when the results are available so that we can report those to you. So for others who have questions or want to address meeting, I will take your comments at this time.

Unidentified Analyst

Mr. Tillerson, Directors thank you. Just to give you a perspective you started the company in 1975. I was born in 1975 and these shares that I vote today I vote in trust for my son who has born last year. So thank you for making money for all of them. In the presentation you highlighted several Exxon Mobil Russia projects, how Exxon Mobil avoid the political difficulties especially in light of recent events that other companies such as BP has experienced there in Russia? Thank you.

Rex Tillerson

Well I can’t comment on issues other companies may have had because I don’t would not have sufficient knowledge, all I would tell you is we have operated successfully in Russia now for almost 20 years. We have been in Russia conducting various joint venture activities producing successfully offshore multi-billion dollar investments now for about 8 years. And we are continuing to expand that project as you may be aware. So that kind of relationship is built over many, many years of the Russian government, our partners understanding the way we conduct our fairs and them understanding the expectations that we have for our joint venture to conduct itself. And I would say we are extraordinarily proud of what we have been to accomplish in Russia.

They have been very good partners for us. So our work force there is also roughly 80% Russian national. In terms of the politics that surround events of the day, I view it as not different than a lot of places we operate in the world have difficult and a complicated social and geopolitical forces surrounding our business. And part of the risk management when I talk about we are in the risk management business and there is elements of risk in essentially everything we do. An important element of risk that we manage is geopolitical risk. So one of the ways we manage that is through our geographic diversity by having your money, having the corporation’s money invested broadly around the world. So that while all of those investments are important to us there is no single investment that’s going to sink the business so to speak. We are very resilient and can withstand a lot of things and we have been through sanctions and countries before regrettably, we do not support sanctions generally because we don’t find them to be effective unless they are very well implemented comprehensively and that’s a very hard thing to do. So we always encourage the people who are making those decisions to consider the very broad collateral damage of who are they really harming with sanctions and what are their objectives and whether sanctions are really effective or not.

So in the meantime all we can do is continue to live up to our obligations and our commitments in all countries around the world where we operate and hold our counterparties accountable to live up to their obligations as well. I would tell you thus far the situation surrounding abates in Ukraine has had no impact on our ability to conduct our fairs in Russia and there has been no change in anyone’s posture towards us. I think it’s a very valued relationship by both parties and we are hopeful that that will continue for many years to come. Yes sir.

David Ridenour - National Center for Public Policy

Good morning. I’m David Ridenour, President of the National Center for Public Policy Research, a free market think tank. My wife and I are a long time shareholders. (indiscernible) in last year at this meeting I commended the company for bowing to leftwing demand (indiscernible) to the American Legislative Exchange Council. We continue to commend you for that. But today I want to kind of go in the other direction. Our think tank once received contributions from the company. These contributions ended after the company told us that it would not continue to contribute unless we adopted a more alarmist position on the climate change. We declined of course.

The company has sharply reduced donations across the board of free market organizations that promote same tax in regulatory policy which is in your interest. But judging from the protesters outside this morning, you haven’t really convinced a lot of people and you haven’t won a lot of friends. I bet not even one from around the leftwing groups. Even if the company declines the supporter organizations it agrees with as it once did, why is Exxon Mobil not doing more on its own to tell the American people the very compelling stories about this industry? Where is the risk for example in putting stickers on gasoline pump showing consumers how much the price of a gallon a gasoline taxes, how much is production and how very little is actually profit out of that? That information is on some websites that people just don’t read those websites. They do go to gas stations.

One of our individual supporters for many years is the late Raleigh Warner who was CEO of Mobil Oil. Under his leadership, Mobil invested heavily in very effective advocacy advertising. If a similar but modernized strategy were employed today, millions could learn how fracing has reduced CO2 emissions dramatically and about the company’s engineering marvels that safeguard the environment. You could describe who gets, hurt the most, lower income people who disproportionately are minorities when regulations and taxes make energy prices higher.

You once said, “We have a society that by and large is illiterate in science, math, engineering. What we do is a mystery to them, and they find it scary. Because of that it creates easy opportunities for opponents of development, activist organizations to manufacture fear.” The company could reduce that illiteracy and stamp out a lot of that fear if we used an updated version of Mr. Warner’s playbook to tell Exxon Mobil’s compelling positive story.

This company’s products make this country work, less, start powering under the table and tell that fantastic tale. If you and we aren’t proud of our product and act like it, why should anybody else. So, I would appreciate any comments you can offer on that. Thank you very much.

Rex Tillerson

Well, thank you for your comments and your confidence in the company of what we do is you’re saying a large portion of our efforts over the last two to three years have been to begin to elevate the public’s awareness of how important energy is in their daily lives, in order to have them be willing to engage in a next level of conversation about why these things are important and why these issues are important. But I take your comments seriously. It is one of our great challenges is how to engage the public broadly in issues that are often times complicated and mysterious to them. I can assure you we do not shrug from that and we have a very large coalition we call the Speakers Bureau of individuals who speak in their local communities. They speak to Kiwanis Clubs, they speak to Rotary Club, the PTAs, the Chambers of Commerce, and these are our employees. So they know the business better than anyone in order to put that face out there to engage with local communities and address the concerns and questions they have. That’s an effort we’ll continue. But it’s something that we just have to continue to work at daily. And it is always a bit of a judgment of where do you want to set the dial on trying to help people understand this.

So, I take your comments, again seriously and I welcome them and I thank you for your support. Right down here.

Unidentified Analyst

Good morning, Mr. Chairman, Mr. Rosenbusch and all the directors. My name is William (indiscernible) I am from Massachusetts. And I have been an investor in Exxon Mobil for over 30 years. And first I want to thank all the Exxon Mobil employees past and present for all the good and hard work. The current administration in Washington isn’t business friendly, especially the companies like ours. There continues to be a push by large universities to divest their multi-billion dollar endowments away from fossil fuel companies. Two other most recent institutions do so make that announcement, Harvard University as well as Stanford University. Can you speak to what Exxon Mobil is doing to support the clean energy movement, and what do you think is possible could you get a percentage of what you think the business will be that supports clean energy towards around 2040. I know it’s very difficult. My second question is price per barrel is over $100 and what price does the barrel have to drop to, to continue to support if the lowest price has to drop to the continued selected dividend, thank you.

Well I have to be very careful commenting on prices or walking close to that question in any form, the US justice department takes a great interest in anything I say about this. So I will have to defer on that. All I would comment is that I think we have structured the company financially with the investments we have made to give us a very healthy cash flow. And we have a lot of doves and levers and mobs we can turn and push and pull to ensure that we can continue to deliver the kind of dividend performance that you come to expect of us. We are certainly committed to do that. I think in terms of the clean energy component and again if you look at the energy outlook and I had a slide in here that showed our expectation is that renewables, solar, wind other forms of what people would I guess put in that category, clean energy are going to grow their rates of growth that are two to three times faster than the rate of growth of traditional sources of energy. And I think that’s reflective of the pull for that. Its reflective of a lot of regulatory mandate governments require utilities to have a certain component of renewable energy so they have to go out and get it whether it makes economic sense to them or not. So it is driven by a number of factors which we expect are willing to be with us for quite some time. As I think I have commented in the past week, continually evaluate the full landscape of all of the new sources of energy supply including those we have actually been in some of those lines of businesses before. We think thus far there has been no technology breakthroughs, doesn’t look like they are particularly promising on the scale basis without a lot of government support mandates and regulations.

And which is not – I prefer not to invest in opportunities that live and die by government mandate. I could what the government gives and just as easily take away the next day and you got a non-performing asset. And in fact you have seen a lot of our competitors who put a lot of money in to wind and solar taking numerous write downs of those investments we didn’t mark out. So we stay with what we know best which is all natural gas, petroleum, petrochemicals and we stick with technologies to help consumers use it more wisely, use it in a way that’s less impactful to the environment and we continue working technologies that allow us to find ways to deliver that to the consumer. That’s the things we know how to do best, but we have a very significant resource organization that has its fingers and hands on everything that is emerging out there because we certainly want to know about it for something that looks promising we have the way with all to enter anything which used to.

Jim Markham

Yes, my name is Jim Markham. I enjoyed a 13 year crew with Exxon Mobil. I am a college young engineer. And I am very proud of the brand. And my question is actually the offset of this gentleman have we ever considered taking the Exxon Mobil name off the street. Now that we have gone to the distributor brand, wholesale brand, we no longer the steward of our brand and here just locally our service stations will stay within $0.2 to $0.3 of competition and now that we have sold these locations to 7/11. We would sometimes with $0.21 off on the street. I am loyal, I will continue to pay it, but its very difficult that most folks don’t know that we no longer own those facilities or run those facilities, and we have given our brand to other folks to be the steward of that and it’s a reflection of the brand. And I am very proud of the company and by seeing that that to me, just it’s frustrating I would rather not – it’s the retail pieces within U.S. marketing it’s because it’s marketing we put our name on the street to market it. It’s really not that big of a piece of the business and I was just wondering if we ever considered that? Thank you.

Rex Tillerson

Well, we constantly evaluate the value of the brand to the consumer. We have included and in fact the business model confirms that there is significant value of the brand. And the agreements as we move the brand in wholesale models we do have specific provisions to protect the brand because the brand I think the point you are making is it’s us, it’s still us. And so we do have a fair amount of control over the quality of how the brand is presented to the customer. And we have a team of people that monitor that on an ongoing basis including digits that are unexpected, mystery, buyers programs they call them where we go on and test the quality of service. So I would take your comment and just to show you we do monitor that very carefully as we moved to this branded wholesaler model.

In fact the matter is and it’s kind of interesting and that’s why I had (chocolate), the Odessa and because the number of branded Exxon or Mobil retail sites has gone up since we exited the retail business and went to the branded wholesale which again an indication of how people out there value that brand and want our brand. They have changed from brands they were tied to before, put our brand up because they find it more attractive to their consumers. So we monitor very carefully. So far we are very pleased with the progress of the brand and wholesale model but your point is an excellent one, it’s us and we got to protect that brand and we do take that quite seriously. Yes.

Unidentified Analyst

Hi. I am (indiscernible) and I wanted to ask you something about hydraulic fracturing and with one thing – a couple of things. One is on the Halliburton loophole and I was noting that Exxon Mobil talked about that we went to be clean and responsible and that some other companies are not doing so well or as well as Exxon Mobil and would you be in favor of stronger regulations that would require maybe the dirtier players to do as well, so that it wouldn’t be an economic disadvantage to the companies that are doing right things. And the other question is regarding to the water waste from hydraulic fracturing and the water used. My family has a ranch in South Texas and water down there is a very precious commodity as it is worldwide. And I know that they are developments but not really seeing much of that happening in the field in terms of using other materials to do the fracturing and to have another way to deal with maybe recycling it, so it doesn’t have to be injected and some of those injection wells as you know are causing some earthquakes so could to (without) that frankly? Thank you.

Rex Tillerson

Certainly I am not sure I am familiar with the Halliburton loophole whether that has to do a frac disclosure or not. But I think you have touched on a number of the important elements. And one is how do we lift the performance of the entire industry to level the gears to public and the communities and the neighbors confidence that we can carry those things out and it would be done safely. I think the standards exist, the API has standards that are published the IPAA has standards of the Independent Petroleum Association that they have adopted. And by and large the regulatory structures at the state level are quite effective. And Texas has a very mature regulatory structure because the business and the industry has been ongoing nonstop. Pennsylvania has had to do some things to catch up because the industry activity had gone to a very small level and then suddenly exploded with the Marcellus shale. But they have at least stepped their regulatory capabilities. And in fact you may recall that Exxon Mobil announced that we in partnership with General Electric are putting $1 million each to fund programs that state universities in Pennsylvania, Oklahoma and Texas, I think Colorado, I’m sorry and Texas to train more regulators and what is the process called hydraulic fracturing. What are the risk that you need to be aware of them, what are the things you need to worry about in the regulatory oversight. So, I think all the elements are being put in place and so how do you lift the performance of those that may not be rigidly and rigorously applying the standards that we know if those standards are followed, you’re not going to have any issues and problems. I think that comes with enforcing the regulations. The regulations provide a many of these standards to be met and if they’re not being met, the regulator needs to deal with that.

I don’t, we don’t think there’s more regulation needed other than the regulators have better need to provide that oversight. And in some cases, they do need some additional personnel. And so, I think that is the best way to lift the competitiveness of all others. And then within the industry, a lot of us are in joint ventures where we own a piece of the acreage and someone else owns a piece and we might have made it operate that. We can hold them accountable to the standards that we’re not operating and we do. On the issue of water maintenance and you notice that I added the chart this year on water because it has become such a crucial element for many parts of the country and the world.

We are advancing in the levels of recycling in frac water and produced water as you mentioned and that’s probably the quickest thing we can do in areas like Pennsylvania where people concerned is much not so much about the water supply they are about the water disposal. But, in areas like South Texas and parts of West Texas where water is scarce, recycling of the water is keenly important. And we have ways in which if you have enough volume, so you can bring it to the central location, clean it up and reuse it. The other non water type fracing technologies continue to evolve and there are a number of processes that we evaluate and often cases, they’re not particularly cost effective. So, there’s more work needed to advance those and they may yet become more attractive particularly in areas where water cost are extremely high. So, thank you for the comments and the questions. Thank you.

Thank you. I’d like to say hello to everybody and god gave us another day so we got to make the best of it. Just wanted to know from Baton Rouge and John (inaudible), and they got a issue down there, I like you to addressed and Mr. Rouge didn’t file probably don’t wanted to handle this you probably could. But, we’ve been doing things since I hired in. 25 years ago Exxon you stated on there about safety that we lead, we want to lead in safety. Well, since when I hired in 25 years ago, we’re leading safety and that’s drop in ever since. And we’re aware, we’ve done cut manning to a point where at time say and brought this up to our management and they don’t want to see it. And so, we’ve added equipment and job task and labor intensive equipment, but cut manning because of different job cuts because we shutdown different chains of stuff. And what would happen is the group would go out and address these issues and so just a one person on one post, one person on another post. And the VP came down and visited us and told us we would have worst sight in the world for safety and it just shows that we’ve been degrading over time. And so, where I’m at, rest of the plant all over different areas they do better and I believe probably do the worse around that.

We got a situation where we got a one post place and we had an event yesterday. And we happen to have some people chain in and on days we have a day form but at night we don’t have that. So, four people were able to respond to this event, event with the feel on it promptly which does 85% to 90% of prompt problems that feel plus want to go to shop can see a blow to switch that is fair. And so, these four people out there instead of one and it’s a one post job. And so, they would able to stop anything from getting worse and it’s a mastered unit. So, it’s really can get bad quick when time starts to go and really gets bad. And so, I’d like you to maybe see if you could look into that and give us a little help because we do need to add some posts.

I know from a company standpoint, management loves they want to make money, I want to make money. I like to be going up, but I don’t want to get anyone hurt or possibly heal because of that. And so when that event happens, because it’s going to happen, because we are so undermined in this one play, it’s going to happen. When it does happen, it’s going to get outside and then it’s going to be bid. And when they investigate, they are going to come back and say hey, how come you all are so poorly mined. That it is a real big problem and we would like – I would like you to maybe get some the mine to look into it. I appreciate it.

Thank you. The inspectors of election are ready to report the preliminary vote. So may we have your report please?

Unidentified Company Speaker

Mr. Chairman, at least 3.5 billion shares of stock of the corporation have been voted on the 8 items of business discussed at today’s meeting. Voting results are expressed as a percentage of total votes cast. 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 that on average 97.5% 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 99.0% of the shares voting thereon were voted for and 1% were voted against. On the resolution concerning an advisory vote to approve the executive compensation, approximately 89.9% of the shares voting thereon were voted for and 10.1% were voted against.

On the resolution concerning a majority vote for directors, approximately 44.9% of the shares of voting thereon were voted for and 55.1% were voted against. On the resolution to limit directorships, approximately 4.8% of the shares voting thereon were voted for and 95.2% were voted against. On the resolution concerning an amendment of EEO policy, approximately 19.5% of the shares voting thereon were voted for and 80.5% were voted against.

On the resolution concerning a report on lobbying, approximately 21.1% of the shares voting thereon were voted for and 78.9% were voted against. On the resolution concerning greenhouse gas and missions goals approximately 22.0% of the shares voting thereon were voted for and 78.0% were voted against. Our written reports will be submitted to the Secretary as soon as they are completed.

Rex Tillerson - Chairman and Chief Executive Officer

Thank you. As stated in the written report of the inspectors of election on each of these matters that will be delivered to the Secretary involved with the Minutes of the Meeting. The final votes on each of these matters will be available on the Exxon Mobil website and they will be filed with the SEC on Form 8-K.

In concluding the meeting, let me thank all of you once again for taking the time to be with us today for attending and importantly for your participation, your comments, your questions, or input, we appreciate it. We know it’s quite an effort to travel to downtown Dallas to attend the meeting, but we appreciate that you are here.

As I have often said, one of the great strengths of this corporation is the diversity of our people, but it’s also a great strength in the diversity of our shareholders. We are afforded a great opportunity to hear from the full breadth of concerns that each of you have, which we know represent concerns broadly held by societies in general and around the world. So, we appreciate very much that you bring those forward and share those with us. They inform our thinking. They inform our decision-making. And let me assure you that everything that is brought to this meeting, the directors and myself listen to it carefully and we have further discussions in the future about it. So, again, thank all of you for being here to our long-term shareholders. It’s always great to see you every year. It’s the highlight of the meeting for me to get to greet some of you upfront. And I appreciate the chance to do that. And as I say every year, for those of you that are short-term shareholders, I look forward to you becoming long-term shareholders. Safe travels and we stand adjourn.

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