Exxon Mobil Corp. continues to tout the benefits of the mergerthat created the new company. “When we announced plans for themerger — about a year ago — both companies recognized this wasa once in a lifetime opportunity,” said Chairman Lee Raymond.”Since that time, we have further refined the opportunities andbenefits available to the merged company.” The synergy benefits ofthe merger are expected to be greater and realized sooner thanpreviously thought, Raymond said.

Much of the benefit of merging comes from job cuts. Staffingrequirements are expected to decline by almost 16,000 peoplebetween year-end 1998 and year-end 2002. About 2,000 of thatreduction already occurred in 1999, before completion of themerger. Executive positions will decrease by more than 1,000, orabout one-third of the two companies’ pre-merger totals. Staffingnumbers do not reflect required divestments or any additionalproductivity improvements in the base business beyond those alreadyidentified.

A year ago, the companies expected pre-tax synergy benefits tobe about $2.8 billion per year by year three of the merger. “Ourcurrent view is that near-term merger synergies will beconsiderably higher than we originally estimated. We expect thesynergies directly attributable to the merger itself to amount to$3.8 billion annually on a pre-tax basis.” Raymond said the mergeris forecast to improve net income by about $1 billion in 2000, withthe positive impact rising to around $2.5 billion by 2003.

Sales proceeds from assets to be divested are estimated to be $4to $5 billion. Raymond said the earnings impact from divestitureswas more difficult to estimate, “but current figures indicate a netgain of around $1 billion after tax.”

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