ASM 2017

May 31, 2017

Slides

Good morning, ladies and gentlemen. Can I ask you to please take your seats? Good morning and welcome. I ask that the meeting please come to order. I am Darren Woods, Chairman and Chief Executive Officer of ExxonMobil Corporation. I'm very pleased to welcome you here this morning, including our shareholders who are listening via the Internet. For those of you who are here, I hope you had a chance to talk to some of our employees before coming into the meeting. These men and women are among the more than 70,000 people who work for you around the world. Results I share with you today are their results. And I'm very privileged to stand here and to speak on their behalf. Next to me is Jeff Woodbury, Vice President of Investor Relations and Corporate Secretary. He will help me run the meeting today. I'll introduce the members of the Board later in the meeting. It is the policy of the corporation to provide confidential voting to shareholders. If you didn't include comments with your vote, your proxy card hasn't been seen by the company. Anyone wishing to vote in secret at this meeting can obtain an envelope from the ushers. Roxy cards will be collected later in the meeting. The list of shareholders entitled to vote is available for inspection. If anyone wishes to examine this list, an usher will direct you to the proper location. Shirley Nizrola and Paula Buckley of Computershare Trust Company are here. They 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 of the minutes. Notice that this meeting has been properly given. Inspectors of election have determined that a quorum is present. There are 3,600,000,000 shares represented at this meeting. This equates to approximately 85% of outstanding shares entitled to vote. A direct determination of the number of shares entitled to vote be filed with the minutes. I declare a forum, present and the meeting ready for business. We'd now like to explain our plan for conducting the meeting today. First, Jeff will outline the guidelines for the meeting. He will also outline how to gain recognition. Now, I'll make some comments about our business and vision for the future. After the business overview, we'll have a technology presentation followed by a video. Next, the items of the business will be presented. There are 13 proposals from the Board of Directors and shareholders. Proponents of shareholder proposals or their authorized proxy will introduce their proposals. I will briefly summarize the Board's response. The polls will be closed and the formal business of the meeting will be concluded. The Inspectors of Election will give us their preliminary voting report. We'll then have a discussion period for comments or questions regarding our business. If we have time, we will try to respond to some questions submitted via proxy cards in the Internet. Following the discussion period, I'll close the meeting with a few remarks. Shown in this slide is the list of proposals that will be presented and voted on this morning. There are 13 items of business. We'll begin with the election of directors and ratification of independent auditors. We'll then turn to advisory votes to approve executive compensation and frequency of future voting. We will continue with the 9 shareholder proposals shown in the proxy statement. At this time, let me turn the podium over to Jeff. Thank you, Darren. Ladies and gentlemen, good morning. I would first like to take this opportunity to familiarize everyone with the safety features of this auditorium. Now in the case of an emergency, we will be notified by the public address system. Emergency exits for the ground level as shown on the screen behind me are situated at the rear of the auditorium where you entered this morning and down on the front on either side. If we do need to evacuate, please proceed to the nearest exit and the Myers and personnel will guide you the best way out. In addition, for safety reasons, please do not stand in aisles or at the back of the hall and please do not block the exits. To ensure that the meeting is productive and conducted in the interest of all of our shareholders, there are certain guidelines governing this event. In the program, you will find the rules of conduct to ensure an orderly meeting that respects the rights of all participants. Only shareholders as of record date or their properly appointed proxies will be entitled to speak during the meeting. The laws in New Jersey where ExxonMobil is incorporated provide that no business can be brought up for a vote unless proper notice has been given to all of our shareholders. Therefore, in the fairness to other shareholders not in attendance and in keeping with the laws that govern our annual meeting, Normal business at today's meeting is restricted to the items included in this year's proxy statement. 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 presenters pass. If neither the proponent nor an authorized proxy is checked in, 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 the shareholder proposal will have up to 2 minutes to present the proposal while the usher holds the microphone. Time may not be shared with another speaker and no second to the motion is required. If during the discussion period you wish to make comments, please fill out a speaker identification card that was included in your program provided to you as you enter the lobby. This card confirms that you meet the requirements to speak at this meeting. If you'd like to address the meeting, move to a reserved aisle seat, remain seated, 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. We request that individual shareholders respect the rights of others to speak and please keep your comments as brief as possible. In this regard, we ask that matters of personal interest that are not relevant to all shareholders be raised directly with appropriate company representatives outside the annual meeting. Now due to the large number of items on today's agenda and the need to conclude the meeting within a reasonable period, we cannot assure that every shareholder who wishes to speak will be able to do so. As we've done in the past, we have provided a timing system with lights to help speakers manage their time and I'll demonstrate the system at this time. When the Chairman recognizes a speaker and an usher has arrived with a microphone, a green light will come on that displays on both sides of the stage. The hall microphones will be activated only after the speaker has been recognized by the Chairman. The speaker's time remaining reaches 30 seconds, a yellow light will turn on. A red light will indicate the speakers at the end of the time allowed and at that point we ask that you conclude your comments. Now finally, as we typically note at the outset of similar meetings, I'd like to draw your attention to the cautionary statement. And this statement contains information regarding today's presentation and discussion. You may also refer to our corporate website for additional information on factors affecting future results as well as supplemental information defining key terms that we used throughout the meeting today. So now, I'll turn the podium back to the Chairman to provide an overview of the business. Thank you. Thank you, Jeff. This morning, I'll be focusing on the many ways ExxonMobil creates value for our shareholders and for broader society. I'll also be sharing key business highlights, including our recent success in Guyana. The photo behind me shows the drillship, which is now operating offshore. Let me begin by reflecting on fundamental market conditions. As you are aware, last year, oversupply drove prices to their lowest level in a decade. Today, the market has become more balanced, but uncertainties remain. Global supply is dynamic, new projects are coming online, OPEC production is changing, and geopolitical uncertainties remain. As the world grows, the middle class also grows and standards of living improve. Over the next quarter century, we expect energy demand to increase about 25%. This demand growth and a dynamic supply environment, we expect continued market volatility in both the short and the long term. Our job is to compete and succeed in any market irrespective of conditions or price. To do this, we must produce the highest value products at the lowest possible cost in all operating environments. We are uniquely positioned to do so. We are confident in our people, our organization and our world class integrated businesses. We turn now to how we translate these fundamentals into value. Our winning proposition is underpinned by 6 pillars, beginning with unparalleled financial strength. This strength gives us the flexibility to invest in attractive opportunities across the business cycle. The second pillar is the integration of our upstream, downstream and chemical businesses. This integration offers us unique insights into trends and market conditions. It also gives us the flexibility to capture the highest value for each molecule as it moves along the value chain. Next is operational excellence, which is fundamental to ensuring safe and reliable operations. In volatile market conditions, smart cost management and capital discipline are critical. A portfolio of high quality assets drives long term leading results in any market environment. Finally, technology leadership allows us to break through barriers and solve complex problems through innovation and discovery. Of course, these pillars stay on the foundation of a world class workforce dedicated to delivering results and driving success. All this leads to a business that performs well across a range of market conditions, maximizing returns over the long term. We consistently outperform our peers. Over the past 10 years, ExxonMobil's return on capital employed averaged almost 20%, more than 5 percentage points higher than the nearest competitor. As you can see here, this leadership extends to each of our business segments, upstream, downstream and chemical. Each of these is a powerhouse in its own right. We now turn to our mission, supplying energy for modern life, improving living standards around the world, while minimizing the impact on the environment, including the risk of climate change. This dual challenge is among the most important issues facing society and our company. We're working on both aspects. In the long term, we think these efforts will lead to even greater shareholder value. We'll talk a little later in the meeting about how technology is helping to address this challenge, including a presentation by our Vice President of Research and Development. I'd like to spend a minute now discussing the importance of our mission, the role that energy plays in human development. We all know that access to energy helps improve living standards. Economic growth and energy use go hand in hand. The equation on the left captures this connection. Energy needs are a function of population and living standards. The graph on the right further underscores the connection. Vertical axis shows the UN Human Development Index made up of income, education and life expectancy. The horizontal axis is energy use. In short, as quality of life improves, energy use increases. Put another way, energy enables human development. According to the International Energy Agency or IEA, about 1,000,000,000 people live today without electricity. About 3,000,000,000 don't have modern fuels for cooking. This can result in significant health impacts, leading to shorter lifespans. Increasing access to affordable, reliable energy leads to meaningful change for people. It also supports growth of the middle class. That middle class is expected to increase to more than 5,000,000,000 people by 2,040. This will help raise energy demand by 25 percent even with big efficiency gains. That demand growth will come mainly from developing countries such as China, India and countries throughout Africa. Countries where new homes, cars and refrigerators will all require new supplies of energy. All viable energy sources will be necessary to meet society's development needs. This chart shows how the energy mix has changed over time. In the middle of the 19th century, the world was almost entirely dependent on wood. Today, oil and natural gas meet more than half the world's energy needs. The rest is met by coal, nuclear, solar and other sources. Our expectations of the future energy mix are consistent with those of other forecasters. Innovation drives the evolution of energy sources, expanding and diversifying the world's supply. You can see the long time it takes for new energy sources to be widely adopted, largely because of the size and scale of the energy system. But as we work to supply the energy important for development, we must also be mindful of the impact on our environment. This chart shows our projection for energy related carbon emissions by region. Similar to other outlooks, we expect emissions to slow consistent with the Paris pledges and we expect emissions to peak and gradually decline in the 2030s. Emissions in developed countries, those belonging to the OECD have been declining for the past several years. We expect that to decline to continue with new technology and efficiency. Emissions in non OECD countries are rising with the increasing energy needs I mentioned earlier. These increases would be even larger if not for a culmination of many efforts by individuals, companies and governments. As an energy company, it's essential that we continue to reduce emissions from our operations. We have done this by improving efficiency at our manufacturing facilities and through investments in flare reductions and other technology. We're also working to develop products that enable consumers to reduce their environmental footprint. An example is lightweight plastics that help cars go further with less fuel. To make an even bigger impact, we are working on fundamental technology breakthroughs that could reduce emissions even more. Finally, we engage in public policy discussions on the best way to manage the risk of climate change. When it comes to policy, we think the goal should be to reduce emissions at the lowest cost to society. To do this, we need a deep understanding of the issue. That's why we've been involved in climate research for 40 years. Our objectives are to understand the fundamental science, focus our technology developments and support sound policy. We partner with universities and participate in organizations like the Intergovernmental Panel on Climate Change or IPCC and the National Research Council. In fact, the IPCC selected ExxonMobil to contribute to its past four assessments. As I said a moment ago, we think the goal of carbon policy should be to reduce emissions at the lowest cost to society. We have established principles to guide our analysis of proposed approaches by governments. These principles led us to support the Paris Agreement as an effective framework for international action. And they led us in 2,009 to conclude that a revenue neutral carbon tax was a viable option for policymakers to consider. We've been encouraged to see the recent proposal put forth by James Baker, George Schultz and the Climate Leadership Council It aligns closely with our long standing principles. We have studied the proposal in-depth and plan to support it as it progresses. While policy will play an enabling role, technology will be key to addressing the risk of climate change and the growing need for energy. Technology will continue to provide new sources of energy and reduce energy and carbon intensity. Think of the breakthrough in unconventional natural gas here in the U. S. This has been a key driver to lowering emissions from power generation. In fact, emissions are lower than they've been in decades and emission intensity is at record low levels. Other examples of reductions energy intensity include the development of new lightweight plastics, I mentioned earlier, and higher efficiency fuels and lubricants. Changes in the supply mix and gains in efficiency mean reductions in carbon dioxide per unit of GDP. This all supports economic growth with a smaller environmental impact. Finally, we need to pursue alternative energy sources that are reliable, scalable, affordable and sustainable. We need to keep all of our options open. As we search for breakthroughs, we cannot forget the continuing role of oil and hydrocarbon liquids as both an energy source and chemical feedstock. Oil is important because of the lack of affordable alternatives for transportation fuels. This chart is based on data from the IEA. Current global liquid supply is about 95,000,000 oil equivalent barrels per day. The short bar in the center shows the projected reduction in supply over the next 25 years if no further investments are made to offset natural field decline. On the right chart shows 87,000,000 barrels of additional supply needed in 2,040. Even with more stringent emission policies, which is consistent with the pledges of the Paris Agreement. This is what they call the new policy scenario. To meet this need, more than $18,000,000,000,000 worth of investment in oil and gas is required. An even more aggressive scenario known as IEA 450 sets out a pathway consistent with the goal of limiting temperature increases to 2 degrees Celsius. Even that would require more than $11,000,000,000,000 of investment. Point is, 1,000,000,000,000 of dollars of upstream oil and gas investment is required even under the scenarios that limit carbon emissions to a 2 degree pathway. And as I said, much of this demand for liquids comes from sectors like commercial transport, industrial uses, chemicals, which have few available alternatives. With this context, we turn to how we create long term value for shareholders. As I've discussed, we are striving to meet society's dual challenge. To that end, we place a priority on the sustainability of our operations and helping consumers minimize their environmental footprint. We become part of the communities where we operate and make long term investments in infrastructure services. We continually look opportunities to high grade our portfolio of assets and investments. And finally, we pursue next generation technologies to support and improve all of these efforts. Our success is your success. We have a consistent record of sharing our success with you. This year marks our 35th consecutive year of dividend increases. We've grown our dividend by almost 9% a year over the past decade. That exceeds both the average of the S and P 500 as well as our competitors. We are the only major integrated oil company to announce a dividend increase so far this year of almost 3%. We're committed to a reliable and growing dividend over the long term, supplemented by flexible share buyback program. Since the Exxon and Mobile merger, we've returned more than $370,000,000,000 to shareholders. To put this number in some perspective, it's larger than the individual market caps of all but 6 of the S and P 500. Consistently achieving this level of performance requires that we uphold our core values. That includes our commitment to maintain operational integrity. Safety is ingrained in our culture and embedded in our processes. Power is more than a key priority. It's a way of life for our people. And I'm particularly proud of the best ever safety performance achieved last year. It's a testament to the hard work and dedication of every one of our people. Like the platform, we're now joining round of applause to thank the people who work for you who made this happen. Operational integrity is not just about the safety of our workforce. It extends to ensuring excellence in project execution, managing security and geopolitical risk and minimizing our environmental impact. Strong community engagement and commitment to local development is also enduring value. Each community has its own unique culture, cooked needs and sensitivities. We're committed to ensuring we have a positive impact. 1st and foremost, we engage with governments to support security and respect for human rights. We actively work with stakeholders during project development, incorporating their concerns and feedback. Another way we support our communities is through local employment and supplier development. We also routinely invest in social programs that carefully consider local needs and goals. Our investments sit around a variety of local priorities, including our 3 signature initiatives: improving education, combating malaria and advancing economic opportunities for women. These efforts support the success of our strategic business investments. This map showing a perspective of our major project activity across all businesses. We have a diverse portfolio of more than aluminum projects in development in the early stages of concept selection all the way to construction. We selectively invest in projects to add the most value and perform well across a range of economics conditions. We're cutting costs through optimized designs, project synergies and execution excellence. For example, we've achieved a 30% reduction in near term upstream project cost compared to last year's plan. In the downturn in chemical businesses, we're increasing our feedstock and logistics flexibility. We're focused on getting the highest value out of every molecule in our growing volumes of special products. We will start up 12 new downstream and chemical projects during 2019. Let me now provide an overview of some of these exciting opportunities. Our extensive portfolio of high oil and gas opportunities, also known as unconventionals, include acreage in every major basin in the U. S. We currently produce over 700,000 net oil equivalent barrels per day, mostly from unconventional resources. Are well positioned for growth. From a series of acquisitions, we have substantially enhanced our position. This includes an addition of a 400,000,000 net acres in the prolific Delaware Basin, which is part of the Permian. We have an inventory of over 50,000 drilling opportunities across the U. S. This includes a large inventory that performs well in a low price environment, underpinning near term production growth. We also continue to increase efficiency with application of key technologies and best practices. This has enhanced our drilling performance and optimized field development. Our innovative model helps us see all along the entire value chain and provides a distinct advantage. It enables us to capitalize on opportunities from wellhead to customer from our upstream through the downstream and chemical. Integration enables us to take full advantage of the growth of U. S. On commercial production. Production growth coupled with advantaged transportation has enabled increased pre runs at our 3 refineries on the Gulf Coast. We've also taken advantage of upstream expertise in the U. S. Natural gas market. This informs investment decisions in our chemical facilities on the Gulf Coast. These insights position our unconventional gas portfolio to compete for increased market share of domestic power generation and LNG exports. As conditions change, adjust our operations to improve returns. This flexibility provides options most of our competitors don't have. Our ability to capture market opportunities across the full value chain gives us a distinct competitive advantage. An example is the integration of our North American Downstream and Chemical businesses. This maximized our ability to process advantaged feedstocks into performance products. This includes premium fuels, lubricants and chemical products that meet growing demand and enhance profitability. In the U. S. Gulf Coast, we're expanding manufacturing of high value products. These include plastics used in packaging, collars and synthetic base stocks for rooms. We are improving logistics capabilities by focusing on strategic transportation assets. Last year, we formed a joint venture to move domestic crude oil to refineries in Texas and Louisiana. Overall, investments in major chemical, refining, lubricant and LNG projects along the Gulf Coast are expected to total more than $20,000,000,000 They're also expected to create about 35,000 construction jobs and 12,000 permanent jobs. These investments are creating value and growing the Gulf. Outside the United States, one of our recent success stories is our offshore Guyana. Our imaging technology support a successful exploration program we believe has high potential. We have discoveries at 3 oilfields and have identified more than 1,500,000,000 barrels of recoverable oil and gas. As a result, we're accelerating initial development at the Liza field, which has the potential to produce up to 120,000 barrels a day. DARPA Phase 1 is anticipated by 2020, fewer than 5 years after initial discovery. Another key international project, our Papua New Guinea LNG development demonstrates ExxonMobil's project and operational excellence. The project has consistently produced 20% above its original capacity, now in excess of 8,000,000 tons per year. We're evaluating a capital efficient expansion at the existing site. This will take advantage of several discovered resources in the area, including the Elk Antelope field, which was part of the recent Inner Oil acquisition. We also continue to actively explore other areas of PNG, as highlighted by the recent Muuruk discovery. As we grow our business in P and G, we continue to invest in social programs to provide community benefits and protect the environment. Our L and B development provides significant advantages to the people of Papua New Guinea and to the company and is well positioned for growth. In Africa, we recently announced the agreement to acquire a 25% interest in a world class resource offshore Mozambique. The deepwater area full block is estimated to contain more than 85,000,000,000,000 cubic feet of natural gas. This is expected to support a large scale LNG project. ExxonMobil will lead construction and operations of the onshore facility. This includes liquefaction trains with capacity of up to 40,000,000 tons per year, almost 6 times the size of the initial PNG LNG project. Our experience in PNG will help ensure that Mozambique is a success. They show important similarities, including the fact that both are complex developments in remote areas. We're also evaluating 3 exploration blocks to the south of Area 4 where seismic activities are progressing. A common denominator across all of our successful investments is technology. It's also key to supplying the world's energy needs while mitigating the risk of climate change. Our past success has been underpinned by our commitment to developing new technologies. The same will be true of our future success. We remain committed to fundamental science that is the foundation of new energy and environmental solutions. Our goal is to develop sustainable, scalable solutions that drive long term shareholder and societal value. This commitment is demonstrated by a long standing and focused research program of approximately $1,000,000,000 a year, which we will maintain across the price cycles. Our research addresses both components of the dual challenge, improving existing supply options and managing carbon intensity. Research programs to improve profitability are having impacts today in delivering value to high performance computing, advanced motor oils and plastics, and improved drilling techniques. Dedicated research programs are pursuing lower emissions innovations. We are advancing breakthrough technologies in carbon capture and storage, process intensification and 2nd generation biofuels. In a few minutes, we will share a deeper look at some of these programs in the technology spotlight. In addition to our own research efforts, we partner with more than 80 universities around the world to explore potential breakthroughs, like at Georgia Tech, where we have developed a form of reverse osmosis to reduce the air required to separate hydrocarbon molecules. Towards Stanford, we were looking at a variety of technologies as part of our global climate and energy project. Our proven technology leadership has been a cornerstone of our past success and I'm confident we'll continue to provide solutions for a teacher. Let me sum up by saying that we are focused on and working hard to deliver value, value for you, our shareholders, and value for society. We do this by helping to meet the global challenge. That is what we're about. Technology is the foundation of our business and it's critical to our success. We apply our technology across a broad portfolio of attractive opportunities. We apply the talents of our workforce. We leverage our financial and operating strengths and take full advantage of our integration. As we develop projects, we remain committed to disciplined investing, growing our financial strength. This has served us well and it's served all of you well. It's enabled us to succeed to the ups and downs of the price cycle. It positions us to continue to succeed. With that, I'd like to invite Doctor. BJ Swaruk, our Vice President for Research and Development to join me on stage. I provided you with a high level perspective on the importance of our commitment to technology. BJ is going to do a deeper dive into a few of our most exciting fields of research. BJ, over to you. Well, thanks, Darren. It really is an honor and a privilege to be here today to talk about the research that we're doing at ExxonMobil. Our technology and ability has enabled long term success for the corporation. We have a fundamental research program aimed at providing affordable and reliable energy to society, which will continue to underpin the research required to meet the dual challenge of delivering affordable and reliable energy while addressing the risks of climate change. This is a technical industry and I'm proud to say that we've been at the forefront of many of the technologies that have allowed energy to be delivered in a safe, affordable, scalable, reliable and sustainable manner, improving the lives of society. This chart shows us the subset of these technologies. The very things we are doing routinely today to supply the safe and affordable energy were unimaginable at the beginning of this industry. In the 1940s, we developed the process to make high octane fuels and synthetic tires, which were critical components in winning World War II. In the 1950s, we invented state of the art computers to simulate reservoirs to more efficiently and effectively produce soil. We also produced the first synthetic catalyst to make high octane fuels. This was the genesis of several innovations that continue through it today. In the '60s '70s, we brought plastics in Mobile 1, both continue to improve the lives and productivity of society. We pioneered the fundamental science which enabled the lithium ion battery still the leading battery technology today. And we're also pioneers in low sulfur fuels, greatly improving air Completed in 2000, the Hoover Diana platform in the Gulf of Mexico achieved many world and industry firsts, including setting a world water depth record for floating drilling and production platform with subsea tiebacks. We continue to develop specialty plastics that can provide tougher and thinner packaging films reducing waste and energy. Today's computers have allowed us to set a record for number of processes used in modeling and reservoir and we now have annual protection in Mobile 1. Projects I've mentioned over the next 10 years will utilize state of the art computing as well as several new catalysts and processing configurations that will lead to more effective and efficient production of oil, gas, fuel and chemicals. But we know new technology will be needed in the future to meet the increased demand and we need to do this in a way to manage CO2 emissions. This will require new technologies today and tomorrow. Let me talk about how we approach this challenge. Our long term approach integrates the 5 drivers shown in the chart. We must continue to pursue routes to improve efficiency. We need to do that today by using cleaner burning natural gas for power and lighter and tougher plastics for packaging. We continue to advocate for the integration of science and policy. For decades, we have provided technical investment insights to complex energy issues, including climate change and the safety of fuels and chemicals. We mentioned the need to increase supply, and we continue to work on more efficient processes to produce energy and develop fuels and chemicals. And we have a long term biofuels program, which I'll describe in a few moments. We recognize that there's a growing middle class in developing nations and the way they receive power and the types of fuels they require may be different to what has been used in developed nations. Understanding the synergy between distributed power and large scale power needed for urbanization as well as the future requirements for efficient fuels are central to our long range research. Finally, mitigating emissions research ranges from continuing to lower emissions from existing facilities to carbon capture and storage, which will likely be needed in the future. We've chosen areas in our capability to Wheelhouse to address these challenges. And we take a portfolio approach in each of these areas, meeting with several research programs in each focus area. In all of these areas, we're looking at exciting programs that are still likely decades away from large scale deployment, but we know from our past that we need to be working on those technologies today to be ready for tomorrow. I'd like to briefly describe 3 of these technologies. First, let's address the very nature of our industry. It requires energy and high capital infrastructure to produce fuels and chemicals. While we've advanced catalysts and process configurations, we still use high pressure and temperature. So we're looking at the process blocks, separation and chemical conversion reactions and challenging ourselves to do this differently. Why use higher temperature when membranes or specialized filters can do separations with much lower energy use? Learning from adjacent industries like water purification and working with leading institutions like Georgia Tech, We are developing membranes that can separate chemical building blocks with much lower temperatures which could have significant reduction in emissions. Also look at conversion where today needs large reactors from the chemistry needed to produce products. Here we're researching process intensification steps, essentially doing more with less energy, less capital and a smaller footprint. Again, learning from Adjacent's industry to develop modular solutions and working with universities like Purdue, we have a portfolio of programs in this area. Separations and conversions will always be core to producing large scale fuels and chemicals. We're working on transformative solutions for future employment, which will be critical to the growing enterprise and meeting the needs of society. Just to describe the potential, at the bench scale, we've demonstrated chemical separations that could result in up to 25% production in CO2 emissions. Now imagine if we can do that with similar technologies for large scale fuels production. It could be nearly 50% reduction in CO2 emissions. That's big and that's why we're working on this. Longer term wide scale carbon capture will be required to curb carbon emissions. We're meters in carbon capturing storage and today recaptureings were 1 fourth of the world's total captured CO2. But we know the process is complex, costly and requires additional power, sometimes up to 20% additional power to capture the CO2. We ask why not capture the CO2 in Primusi Energy. To do this, it will require new materials and new processes right in our area of expertise. Think of that concentrating CO2 while generating power. That really is transformative. Once again, we are working with partners here and we work with companies like FuelCell Energy and TDA as well as leading research institutes like the Netherlands VCN and leading universities like UC Berkeley to develop materials and process configurations. The schematic shown on the chart is that of using a fuel cell to concentrate the carbon dioxide from the natural gas turbine while generating power. The natural gas turbine is a good place to start where we use as natural gas, which is a clear burning fuel, both in terms of CO2 produced and other impurities that need to be removed before sequestration. We signed a research agreement with fuel cell energy last year and we're working hard to understand the fundamentals with an eye towards longer term large scale deployment. The process works for the lab and we're progressing a process demonstration unit in Alabama to further assess this technology. We're also working on other novel materials and processes concentrate CO2. This is hard, but we're committed to the research for the long term and we continue to look for additional ideas to add to our portfolio. Finally, I'd like to address transportation fuels. Transportation fuels, particularly for trucks and airplanes, will continue to require a high energy density liquid fuel. Biofuels have the potential to provide the energy density required, but scale and cost have been challenges. We've been researching biofuels for a long time and we are making progress. Today, biofuels are made largely from food sources such as corn and sugarcane in are relatively small scale. We're challenging that paradigm, targeting smart scale biotin production that does not compete for food and water. Algae are fast grown, can grow in brackish water and absorb CO2. Let's not use the crop, let's use the crop residue called cellulose to generate the fuel. Working with universities like Michigan State and Colorado School of Mines as well as companies like synthetic genomics and Renewable Energy Group, we're making progress in both algae based and cellulosic fuels. Still decades away from the scale we need, but fundamentals are driving our research and recent results are driving our enthusiasm. The energy industry has gone through several transitions, all underpinned by technology developments. We face the challenge of meeting the needs of a growing population while mitigating the risk of climate change. The only way to solve this challenge is through new technology. We need new options and new solutions. We've been developing and deploying game changing technologies to our industry for more than 130 years. In fact since 1950, we've been granted over 29,000 patents. Our competency and purpose to R and D infancy and we remain committed to fundamental research. We have a broad low emissions R and D portfolio with the flexibility to combine into a particular program area when it looks promising. We realize that we cannot address this alone. We've been significantly increasing our collaborations and partnerships over the past few years and we continue to work for partners that can complement our capabilities to address these challenges. Of course, our people are key and we have a highly skilled workforce with over 2,000 PhDs in engineering and science disciplines. We've been at the center of technology developments in this industry in the past. And while we do not know exactly what technologies will be acquired over the next 130 years, I have no doubt that we'll be at the center of the technology development and deployment. Thank you very much for your time. On the Gulf Coast, new ExxonMobil projects are expected to create over 45,000 jobs, and each job created by the energy industry supports 2 others in the community. Altogether, the industry supports over 9,000,000 jobs nationwide. These are jobs that natural gas is helping make happen, all while reducing the negative emissions. Energy lives here. Now we'll turn to the formal business of the meeting. We recognize that the majority of our shareholders have voted by proxy and are not present. We have established procedures to facilitate an orderly meeting. We have 13 items to consider. Proposal will be presented in the order they appear in the proxy statement. The first item of business is the election of 11 directors. I nominate the 11 persons identified in the proxy statement. These 11 people are highly qualified to serve on the Board. All of our nominees are currently serving as ExxonMobil Directors. Now I'd like to ask the nominees seen to my right and the orchestra, Terrence, to stand as your names are called. And I will close the nominations. In Fraser, that was Oberholmen Michael Foskin. Thank you. I also want to take this opportunity to recognize 2 of our directors who are retiring and will not stand for reelection. Doctor. Larry Faulkner, who has served on our Board for 9 years and Pete Peter, Rob Eklamath, who has been on the Board for 7 years. Please join me in expressing our appreciation for their leadership. Thank you. Now declare the polls open for all who want to vote in the election of the directors with 12 remaining items. If you wish to change your proxy instructions on the election of directors or any of the other call items or if you have not submitted a proxy and wish to vote by ballot, they are available from the ushers. Please raise your hand if you would like a ballot at any time during the formal business. It will be collected after all items have been introduced. The next item on the agenda the ratification of PricewaterhouseCoopers as the independent auditors. Board's Audit Committee has appointed PricewaterhouseCoopers to audit ExxonMobil's financial statements for 2017. We are asking shareholders to ratify that appointment. PricewaterhouseCoopers is represented today by Mr. Tom Smith. Tom, would you please stand? For our business is consideration of 2 board sponsored proposals regarding executive compensation. Next executive compensation as required by law. The Board recommends a vote for this proposal. Moving on to Resolution Number 4, the Board proposal calls for a shareholder advisory vote on the frequency of future advisory votes on executive compensation. The options are to hold a vote every 1, 2 or 3 years. The Board recommends that the vote be held every year. The next order of business is the consideration of the 9 shareholder proposals in the proxy statement. Before we begin, I'd like to make some general comments. First, we welcome, appreciate and actively promote shareholder engagement. Last year, for example, we engaged with shareholders holding about a quarter of all outstanding shares. We're on track to exceed that number this year. With respect to the 9 proposals under consideration today, it's important to note that they do not represent all the feedback we received in the last year. On a number of occasions, for shareholders, thoughtful proposals, we met and reached agreement. As a result, their proposals are not included in the voting today. In other words, today's proposals only represent areas where we cannot reach agreement and therefore are being put to a shareholder vote. For most of these, we agree with the underlying objective or intent. However, we disagree with how best to achieve that objective. Finally, we thank the shareholders presenting proposals. We may not agree on the most effective way to achieve our business objectives. But hopefully, we can agree that a constructive dialogue and exchange of views is beneficial. With that, let's turn to the 9 proposals. For those following along, details can be found in the proxy statement. First, shovel proposal calls for an independent Chairman. I understand that Craig Ryan will present the proposal. Good morning, Mr. Chairman and Mr. Secretary and members of the Board. I'm Craig Iron from the Westmont with over $300,000,000,000 in assets under management and I'm here to present proposal number 5 filed by the OMDs Trust, replacing that with separation of positions of Chair and CEO. This revolution is not a criticism of our new CEO of ExxonMobil. It is a request only consider to be governance best practice and proposals that the policy of the separating of each share be phased in with a new CEO of next The shareholders we ask for your vote today on proposal is number 5. Thank you. Thank you, Craig. In response to this proposal, let me share with you the Board's perspective. We agree that a strong independent Board is important and that the Board is responsible for the oversight of management, including the CEO. We also believe the Board must retain flexibility, becoming a leadership structure that best serves the interest of shareholders. The Board believes the current structure best serves these long term interests. In fact, the position of Presiding Director, which has been in place since 2008 provides effective independent leadership. He or she has the authority to call, chair and set the agenda of the Board's executive sessions. Also, the Board's Compensation Committee comprised entirely of independent directors, review CEO performance and establishes the CEO's compensation. The Board Compensation Committee reviews its assessment with the full Board without the CEO present. In summary, the Board believes and exercises appropriate oversight with sufficient independence and therefore recommend shareholders vote against this proposal. The next shareholder proposal calls for director nominees to be elected by majority vote. I understand that Gavin Griffin will present the proposal. Received a full 6% favorable vote at Cummins 2014 and Thank you, Kevin. Thank you for your perspective and thank you for the ownership. We agree that directors who serve our public board should have the support of a majority of shareholders. We share the same objectives as the proponents of this proposal, but we believe the policy we only have in place achieved that objective. The Board previously adopted a policy requiring a director to tender his or her resignation if he or she does not receive a majority of votes cast. The Board will accept the resignation absent a compelling reason. Coupled with the current plurality vote standard, this policy yields the same outcome as the majority vote standard. In other words, our current approach seeks to achieve the same result. The Board therefore recommends shareholder vote against this proposal. The next shareholder proposal calls for special shareholder meetings. I understand that Natasha Lamb presents the proposal. This proposal does not impact our Board's current power to call a special meeting. The Fortune 5 Summit companies allot 3% of shares to call Special meetings allow shareholders to vote on important matters such as electing new directors that can arise between annual meetings. You. Thank you, Natasha. We just said that we agree that shareholders should have a meaningful right to call a special meeting. In fact, this right is already provided for New Jersey when we are incorporated. The law requires stockholders of 10% and a show of good cause. We believe these requirements are prudent. They provide protection against the potential for abuse. We also believe the requirement for good cause is critical. It's The The next shareholder proposal concerns the restriction of precatory proposals. I understand that Steve will present the proposal. There are some implicit elements of your proposal that we share an agreement. However, we worry that it could limit the rights of shareholders to submit meaningful proposals that are important for all shareholders to consider. Having said this, the Board believes direct shareholder engagement is a much more effective approach and a stronger process that enables shareholders to dialogue with the company in an open and comprehensive manner. The Board therefore recommends shareholders vote against this proposal. The next shareholder proposal call will report on compensation for women. I understand that Steve Spruent will present this proposal. Thank you. Yes. I need Sprott in understanding him today because little progress has been made in narrowing agenda pay cap in over a quarter of a century. I have no doubt that ExxonMobil is well intentioned in its efforts to identify and aggressively promote a few outstanding is the best way to keep score. Numerous studies in which the gender of the name resonates to switch from male to female have demonstrated the damage done by unconscious bias. Both men and women tend to judge women more harshly than possible who will pay. ExxonMobil has a highly structured sports crisis system, it will allow shareholders and the public to monitor the progress. I think that not only ExxonMobil, but all of What gets probably reported gets attention to action. Public reporting drives improvement. Thank you, Eve. 1st and foremost, let me be absolutely clear. We agree that ExxonMobil should foster an enabling non discriminatory environment for all employees. We value diversities, including gender diversity. And even I will commit to you that your granddaughters come to work for ExxonMobil, they will be paid fairly. In discussing compensation, it's important to consider it in the broader context of development. Within ExxonMobil, compensation, development and advancements are highly integrated. Our program compensates individuals based on their performance, experience and pay grade regardless of gender. Regardless of gender. Given this, our focus is on progressing the development and advancement of women. Within the executive employee population, which has on average more than 20 years experience, almost 20% are women. That's an increase of 50% over the past decade. We expect this percentage to continue to increase as recently hires recent hires gain the necessary skills and experience. Notably, today, about a third of our early career executive employees are women. We share these development metrics in our citizenship report and therefore the Board believes the report called for in the proposal is unnecessary. The Board recommends shareholder vote against this proposal. The next shareholder proposal calls for import on lobbying. I understand that Ricky Brooks will present the proposal. Those shareholders and members of the Board. Unnamed Ricky Brooks, public policy in the best interest of Mexican that Workflow supports accountability and appropriate transparency in disclosable lobbying. We believe that our compliance with existing federal and state disclosure requirements achieves this objective. ExxonMobil complies not only with the letter, but also with the spirit of our federal and state requirements. This includes quarterly reports to Congress on our federal lobbying expenses and the specific issues on which we'll lobby. We also will be on the requirements to make our recently filed reports as well as the company's positions on key public issues available on our website. And a brief aside, let me say a few words about the American Legislative and Exchange Council or ALEC. We've received some feedback on our support from this group. It's important to note that ALEC is an association of more than 2,000 state legislators. Like you, it's highly unlikely that we would agree on every position they take, but that doesn't mean we shouldn't engage on a variety of state based issues that are important to a company of our size. We engage on multiple fronts with the diversity of groups even when we don't agree on everything. Some here today are in the same position. You may not agree with every approach we take, but you probably do agree there's benefit to continued engagement. In fact, on 2 occasions, ALEC has provided a venue for us to communicate our position on climate and a carbon tax to all of its membership. That wouldn't have happened, it wouldn't have been possible if we had discontinued our modest level of support, which we do disclose on our website. To summarize, the Board believes that existing disclosures are adequate and therefore recommend you vote against this proposal. The next proposal calls for a commitment to increase the total amount authorized for capital distributions. I understand that Natasha Lyon will present this proposal as well. Profitability for C3 while total capital distribution has fallen, 56% over the last 4 years, Thank you, Natasha. Board agrees with the proponents that the risk of climate change is important to our business, but we do not agree with this approach. This approach seeks to limit investment needed to meet growing energy demand. Forecast by reputable third parties such as the International Energy Agency show substantial upstream of more than $11,000,000,000,000 will be required through 2,040. That's true even under the 2 degree scenario. As part of our disciplined investing approach, we require all of our businesses to estimate, where appropriate, the cost associated with greenhouse gas emissions when seeking funding for capital investments. Overall, our disciplined capital approach has enabled us to maintain focus on a range of opportunities, including investments in low emissions technologies. As I mentioned earlier, this approach has consistently positioned ExxonMobil as an industry leader in long term return on capital. We've increased our dividends for 35 consecutive years and the company returned over $370,000,000,000 to shareholders since the merger. Given this, the Board recommends shareholders vote against the proposal. The next general proposal calls to report on the impacts of climate change policies. I understand that Edmund Mason will present the proposal. Thank you, Edward. Appreciate your perspective. Let me also say I appreciate the opportunity to discuss this issue. It's an important one and a concern of many of our shareholders and the general public. We believe the risk of climate change are serious and warrant action, thoughtful action. As a company, we're taking action in many ways, including investing in technologies that address this challenge. Governments are taking action too, through policies such as those envisioned by the Paris Agreement. The Board agrees that it's important to reflect both policy and technological developments in our long term projections. Furthermore, it's important that we reflect these projections in our company's strategies and plans. We do. One of our most important planning tools, our outlook for energy seeks to identify the potential impact of climate related policies. It uses a proxy cost of carbon to estimate potential impacts. It's worth noting that the carbon reductions in our outlook are consistent with the pledges in the Paris agreement. Our outlook assumes increasingly stringent climate policy. At the same time, it assumes growing energy demand through 2,040, including substantial demand for oil and gas. That's consistent with the IEA and other third party forecasts. In addition to our outlook, we also consider a wide range of factors in our planning and investment process. For example, as I previously mentioned, all of our businesses are required to include, where appropriate, an estimate of the cost associated with greenhouse gas emissions. This process addresses climate related risk and ensures delivery of long term shareholder value. Based on this approach, we're confident in the commercial viability of our portfolio. We have a lot more discussion on the safety and efficacy statement in 2 new posts that we published that I currently believe one called Energy and Carbon Managing the Risks and new brochure called the Energy and Carbon Summary. Our outlook for energy is a good resource as well. The Board believes the company has adequately assessed the potential impacts of future policy developments and has broadly shared this through the documents just referenced. As such, the Board has recommended you vote against this proposal. The final shareholder approval call for an report on methane emissions. I understand that Mr. Patricia Daley will present the proposal. Thank you, Sister Pat. Welcome back. Nice to see you again. We share your concern. The Board believes methane merits particular intention due to potential impacts on climate change. We've been focused on methane emission for some time. More than 10 years, we have reported our performance on annual methane emissions and discussed our ongoing efforts to minimize them. As the company seeks to reduce emissions from unconventional resource development, including hydraulic fracturing, a mix of voluntary and regulatory actions. We're also working with government agencies, universities and NGOs to better understand potential magnitude and characteristics of methane emissions. Our partners include the Environmental Defense Fund, University of Texas, Stanford University and the U. S. Department of Energy. We discussed these activities in our annual citizenship report and in our report, Unconventional Resource Development, Managing and Risk, Both can be found on our company website. And in this, the Board recommends shareholder vote against this proposal. All items of business have now been introduced. If any of you have proxy cards, please hand them to the ushers at this time. Those who have already returned the proxy cards need not vote by ballot unless they wish to change their votes. You'd like to change your votes, simply mark the appropriate sections of the ballot. The ballots will now be collected and turned over to the inspectors of election to be counted. If you wish your ballot to be kept secret, the usher will provide you with an envelope. The terms of the instructions indicated on the individual proxy cards. If you have proxies, please pass them to the ushers in the aisle. Okay. Since proxies and ballots have been collected, I now declare the pool is closed. Since you've all been sitting for a while, I invite any of you that want to, to stand and stretch your legs full moon. I understand these spectrums of election are ready to report deployment in a vote. Can you have your report, please? On the resolution concerning an advisory vote to approve executive compensation, approximately 68.4% of the shares voting thereon were voting for and 31.6% were voted against. 0.7% were loaded for 2 years and 11.1% were loaded for 3 years. On the resolution concerning an independent percent of the shares voting thereon were voted for and 61.8% were voted against. On a resolution concerning majority vote of directors, approximately 45.7% of the share voting thereon were voted for and 54.3% were voted against. On the resolution concerning special shareholder meetings, approximately 40% of the shares voting thereon were voted for and 60% were voted against. On the resolution to restrict predatory proposals, approximately 1.5% of the shares voting Miron were voted for and 98.5% were voted against. On the resolution concerning a report on compensation for women, approximately 7.9% of the shares voting their lawn were voted for and 92.1% were voted against. On the resolution concerning a report on lobbying, approximately 27.6% of the shares voting MAMON were voted for and 72.4% were voted against. On a resolution to increase capital distributions and rule of investments, approximately 3.8% of the shares voting thereon were voted for and 96.2% were voted against. On the resolution concerning Aeroport on impacts of climate change policies, approximately 62.3% of the shares voted year on were voted for and 37.7% were voted against. On the resolution concerning a report on methane emissions, approximately 38.7% of the shares voting thereon were voted for and 61.3% were voted against. Our written reports will be submitted to the secretary as soon as they are completed. Thank you. The written report and inspector of elections will be filed with the minutes of the meeting. Final votes on each of these matters will be available on the ExxonMobil website and filed with the SEC. Let me just say that we greatly respect our shareholders' input and we'll consider all of your feedback regardless of whether the resolution will receive a majority of the votes cast. Shareholder resolution receiving majority level of support will be reconsidered by the Board. This concludes the formal business of today's meeting. I will now open the floor for comments or questions regarding ExxonMobil's business. We've received a number of questions on proxy cards and through our website. And as time permits, we'll try to address some of those questions as well. If you want to speak, remain seated and raise your speaker identification card to indicate that you want to address the meeting. We recognize you to complete a speaker identification card to the usher. Please stand again by stating your name. You may speak up to 2 minutes while the ushers hold the microphone. Please make your comments as brief as possible so that we can accommodate as many speakers as time allows. We'll continue to use a lighting system to help you manage your time. First priority will be given to those who have not yet had an opportunity to speak. I welcome your questions and comments at this time. And I know our company has resisted that push from the EPA. My question is, is that still our company's position with a second home mandate? Thank you for the question. I think one of the challenges with that mandate has been that many of the cars on the road today do not warranty fuel that exceeds 10% of ethanol. And that has been a significant concern of the company that as we're selling ethanol, So we We have been in active conversations with a number of the agencies to make sure they understand the implications of higher ethanol fuels on the car fleet and the time it would take for new cars to advance the plastics and the rubbers that they have in the cars that the ethanol won't degrade the performance of those vehicles. Thank you. Hi. Mark Harris, retiring. A question on the Chemical business, actually 2. In a non proprietary way, can you discuss the selection of the South Texas site for the new joint venture reversal to the synergistic side at Mount Belvieu and Baytown? And secondly, with the large investments we made in Singapore over the last decade, especially in chemical business. Can you discuss in more detail our Asia strategy for the chemical business? Sure, absolutely. Those are both very important parts of our business. On a venture that we've been in discussions with SABIC, the Saudi company, which is a JV partner and that investment that we're considering, A lot of thought went into how best to support that JV and our partners in defining economic and competitively advantaged location to produce product, which will be exported overseas to meet the growing demand for chemical products. As we've looked at what we're doing within ExxonMobil without JVs are the units that we've got lots of opportunities with our existing sites. And so for this JV opportunity, we looked at grassroots sites. The location down near Corpus is, we think a very advantaged position. It allows us to tap into the unconventionals in the upstream, which will allow us to have advantaged feedstock to feed that plant. It also has great access to logistics to then ship the product out to Asia Pacific. And our view is that site as we look at it today the production from that site will be very competitive with any production anywhere around the world and allow us to serve the growing demand for advanced chemical products in China. With respect to the Singapore plant, Singapore is we have a very large investment across both our downstream and chemical facilities, a very large integrated site. We simply made an acquisition there to expand our chemical facility. And we see that as the platform for really serving that growing demand all through Asia. As you know, that's where the highest demand growth is. That's where we see people's standards of living continue to grow. And therefore, the demand for chemicals and particularly our high performance chemicals continue to grow. And so our objective is to serve that need out of a very secure, stable base in Singapore and take advantage of the logistics, take advantage of the synergies there that we have there at that site and the scale that we have at that site. So we see that as a very advanced platform for really serving all of the Asia demand for many, many years to come. Thank you for your question. Light of the current political environment, what are ExxonMobil's plans to maintain the technology and acreage position in the Arctic world of Russia? Thank you. Russia is a very important market and we have very large investments there. The areas that we've got today, which are impacted by the sanctions, are essentially in a standstill. So, we are complying fully with the sanctions that have been put in place today. All those investments, discussions and opportunities associated with those investments and discussions are essentially on hold until the government lists the sanctions, at which time we will then resume whatever conversations that we were having before the sanctions were put in place. We still have a very large and successful business on the East Coast of Russia on the Saucon Islands, which has not been impacted by the sanctions and so continue to do business there. Okay. Thank you for your question. My name is Sid Harris, and I'm a long term investor in Exxon Mobil Stock. Congratulations on the good results you've done over the years. Thank you. And we're very proud of Rex Tillerson, representing us overseas now. And my question now has to do with strategy. And I wonder whether with the rapid growth of wind energy and the fact that the cost of wind energy seem to be coming down and since we are a major producer of energy, does it make any sense for ExxonMobil to make a long term project to become the number 1 producer of wind energy Thank you for your question. It's very topical. We have spent quite a bit of time looking, not only our portfolio that exists today, but also opportunities in the alternative energy space. And what we tend to look for when we started with in that assessment is what I will say are the fundamental technologies and the advances that we see in that technology. And what we're looking for is where we can bring an advantage to that space, where we can invest in a space where we have we can add something unique that others are doing. In the solar and wind, there's a lot of research going on today and we've seen a lot of progress in the cost of solar coming down. With the work that's happening today, the patents that are being filed in solar, we expect to see continued progress with solar. As we compare that with our technology and our resources, we didn't see a lot of value that we could bring from the science side solar with respect to what's already happening. And the same is true with wind. There's some, I think, very interesting exciting opportunities in the wind space with high altitude wind that we see folks working on. Again, we compare that with our technology skill set and look for opportunities where we could contribute in that space, didn't see a lot. And so we didn't feel like with both solar and wind that there was an opportunity for us to invest and bring unique competitive advantage to that space. And so where we've chosen instead to concentrate is to look for expanding that alternative technology set or expanding opportunities to address some of the risk that we talked about today through some fundamental signs, which is in line with our capabilities. Okay. Thank you. Let's maybe go back and move back to Pat. Thank you for your time again. I really wanted to thank our company Over the last few years, Michael McCarthy, one of my colleagues, has raised and submitted a resolution asking for climate expertise on our Board. So I really want to thank you all, thank the Board for the nomination of C. W. I think the position that we've taken on the Paris place is very consistent with the framework we've discussed and the challenge that faces society. And some of the charts that I showed, it is a global challenge, which requires global participation. And we think the advantages of the Paris framework is that it engages and involves communities all around the world, countries all around the world irrespective of their economic development. So it's very important. As you saw on the chart, China is one of the fastest growing, the largest emitter. India is quickly coming up behind that. So we're going to need a global solution. So global framework is quite important. Congratulations on your new role and I wish you well. Thank you. I'd also like to take a minute and congratulate former Chairman Rex Tillerson on this nomination and appointment of Secretary of State of the United States. I do wish you well as you guide us to United States and the world during this difficult and tumultuous times. Mr. Chairman, I'd like to know the long term shareholder that holds shares of Exxon and Eagle Oil nearly 35 years. ExxonMobil has been a very good steward of my assets. Assets. I would expect that to continue into your leadership. My only genuine owning shares of ExxonMobil is to provide a better, more secure financial life for me and my family. I've spoken at this meeting in prior years and will make the same statement this year as I have in the past. I recognize ExxonMobil business line is extremely challenging and volatile. We want to thank all the hard work for men and women in the offices and the fields, the oil rigs onshore and offshore, security, wherever they work in the world for their dedication and their hard work. Everyone that works for ExxonMobil has an important role and recognizes by the shareholder. I think it's hard work contributes to the growth in support of earnings in support of dividend. I want you to know the quarterly dividend is very important to me and my family. I am however concerned that the payout rate has increased exponentially in recent years and it's right and I'd like it to be a better term issue to manage. I have an expectation that not only will the dividends continue to be picked quarterly, but will continue to increase annually over the decades to come. That's my expectation of rolling the stock. My question after that stated is, now depending on which front Brent talks to, peak oil may be as near as year 2025 or others have targeted peak oil in 2,040 or 2,050. Could you speak to what people oil and the view that ExxonMobil has taken and the impact of people on ExxonMobil? Sure. Thank you for your question. We also thank you for the recognition of the hard work of the men and women of ExxonMobil. I know they are every day, 24 hours a day, 7 days a week all around the world, doing their best to make sure that they're delivering shareholder value so that we can continue to pay your dividend. We're absolutely committed to doing it consistently. With respect to the demand and the demand situation going out into the future, I think for us in our perspective, if you go back in time and look at the company, there have been periods where there's been oversupplied and the market prices have come down and margins have gotten very tight. And that's essentially excess supply versus demand. And as you know, in our company, we are can operate successfully and be satisfied with and can operate successfully and be satisfied with the business returns that we're generating in more low points of the cycle. The wing supply exceeds demand. If you think about the future going forward and some of the uncertainty around exactly how demand will play itself out. And we're experiencing some of that today with the excess production coming out of the unconventionals, supply is exceeding demand. And in the future, depending on what happens with demand and how climate policy is formed, what technology is developed, there's a lot of things that will continue to evolve, which will impact that, economies will grow. If that market remains long on supply, we're positioned to do well in that marketplace. So I think one of the advantages and challenges of our business is there are lots of variables that impact the environment that we have to operate in. And for a long time, we've stopped trying to predict exactly how each of those variables are going to line up. Instead, look at the macro picture of when these variables line up and create environments that are difficult to operate in, we need to be prepared to compete in those and be successful. I've been with this company for 25 years. That been a key focus area every day I come to work, how do we get more efficient, more effective to deliver for when the market drops down. And so I'm actually convinced that as the markets develop, whatever environment we find ourselves in, we will be competitively advantaged in there to serve society and to grow shareholder value. Okay. Thank you. We've got time for one more question. How about the gentleman with the tie there, the blue jacket? Where the world's saying that no one gets hurt means no one's willing gets hurt. And I wish to hold the opportunity for the company and the employees on hand to get together and come out with a real deal. Thanks, Thank you, Steve. Thank you. You're certainly addressing one of the most important areas of our business, which is making sure that we keep our people safe. And I think the other point you make is absolutely critical, which is it takes engagement and working together between the employees and management if we're going to have a successful safety system. So there's absolutely no disagreement in that space. We have introduced over the last several years a safety system around the world called LPS or loss prevention system in our chemical refining facilities. And it's been a journey that the organization has been on to try to get better engagement and involvement with the workforce and for management all the way through. So safety has to be managed at every level and every facility. It's not just the workforce, people with their hands on the tools, it will all be up to our management, including our management of those facilities. That process has been in work and progressing, I think, quite successful. If you look at the results, and I mentioned earlier today, 20 16 was our safest year. The results that we're getting in all of our facilities around the world with this loss prevention system is record breaking. We have a number of facilities and sites that our safety incident levels are lower than we've ever had in any year that we've operated. So I'm not sure exactly where Baton Rouge is in that process, but I know that that work and the system that we're bringing to Baton Rouge and all other facilities is having great success all around the world, is keeping people safer. We're having fewer incidents. We're running our facilities better, which is absolutely critical. So very aligned with the objective to make sure that we're running our facilities safe and that management and the workforce are working together hand in hand to improve safety and ensure that nobody does get hurt. Thank you for your comment. And I want to thank Emily here for your questions and interest In that ExxonMobil, we're working on ways to provide it, are affecting the risk of climate change. Producing clean burning natural gas to reduce emissions from power generation. Capturing carbon dioxide before it reaches the atmosphere. And exploring new energy As we wrap up this year's Annual Meeting, I'd like to briefly summarize some of the key points we covered today. Society faces the dual challenge, meeting energy needs of people around the world and ensuring we limit impacts on the environment. ExxonMobil is committed to addressing these issues. As we've discussed, one of the most important ways we are contributing to strong innovation and the development of new technology. Our commitment to technology has been the linchpin of our success and has enabled us to deliver value for you, our shareholders and for society for more than 130 years. We remain confident that it will enable us to deliver value far into the future. Let me thank you all once again for attending. We appreciate your time. More importantly, we appreciate the interest you take in the corporation and its future success. I want to assure you that your comments are given consideration well after this meeting and in the Board's deliberations. 1 of our company's great strength is our large and diverse shareholder base. We benefit from the diversity of these viewpoints. We thank you for sharing them. And we hope to see you all again next year. At this time, the meeting is closed. I wish all of you a safe journey home. Thank you.