- Cash generation supported by integrated
portfolio
- Continued focus on business
fundamentals and strategic investments
- Chemical and Downstream results reflect
diverse product portfolio, integrated manufacturing sites
Exxon Mobil Corporation (NYSE:XOM):
Third Quarter
Nine Months 2016
2015 % 2016
2015 % Earnings Summary
(Dollars in millions, except per share data) Earnings
2,650
4,240 -38
6,160 13,370 -54
Earnings Per Common Share Assuming
Dilution
0.63 1.01 -38
1.47 3.18 -54
Capital and Exploration Expenditures
4,190 7,670 -45
14,475 23,635 -39
Exxon Mobil Corporation (NYSE:XOM) today announced estimated
third quarter 2016 earnings of $2.7 billion, or $0.63 per
diluted share, compared with $4.2 billion a year earlier.
Results reflect lower refining margins and commodity prices.
“ExxonMobil’s integrated business continues to deliver solid
results,” said Rex W. Tillerson, chairman and chief executive
officer. “While the operating environment remains challenging, the
company continues to focus on capturing efficiencies, advancing
strategic investments, and creating long-term shareholder
value.”
During the quarter, Upstream earnings were $620 million. Volumes
for the quarter declined 3 percent to 3.8 million
oil-equivalent barrels per day compared with a year ago, due to
unplanned downtime, primarily in Nigeria, and field decline
partially offset by increased production from recent project
start-ups.
Third quarter Chemical earnings of $1.2 billion, comparable with
prior year results, reflect higher maintenance costs, partially
offset by increased specialty product sales. Downstream earnings
declined to $1.2 billion primarily due to weaker refining
margins.
During the quarter, capital and exploration expenses were
reduced by 45 percent to $4.2 billion.
The corporation distributed $3.1 billion in dividends to
shareholders in the third quarter.
Third Quarter 2016 Highlights
• Earnings of $2.7 billion decreased $1.6 billion, or
38 percent, from the third quarter of 2015.
•
Earnings per share assuming dilution were $0.63.
•
Cash flow from operations and asset sales was $6.3 billion,
including proceeds associated with asset sales of $1 billion.
• Capital and exploration expenditures were $4.2
billion, down 45 percent from the third quarter of 2015.
• Oil-equivalent production was 3.8 million oil-equivalent
barrels per day, with liquids down 5.1 percent and natural gas up
0.8 percent.
• The corporation distributed $3.1
billion in dividends to shareholders.
• Dividends per
share of $0.75 increased 2.7 percent compared with the third
quarter of 2015.
• ExxonMobil and InterOil
Corporation announced an agreed transaction worth more than $2.5
billion, under which ExxonMobil will acquire all of the outstanding
shares of InterOil. The acquisition will give ExxonMobil access to
InterOil’s resource base, which includes interests in six licenses
in Papua New Guinea covering about four million acres. The
transaction is pending the outcome of a shareholder appeal of the
court decision approving the transaction.
•
ExxonMobil Kazakhstan Ventures Inc., a 25 percent shareholder in
Tengizchevroil LLP, has approved the final investment decision for
the Future Growth and Wellhead Pressure Management Project as part
of the next expansion phase of the Tengiz oil field.
• In Guyana, the Liza-3 appraisal well was successfully
completed in October, confirming a world-class resource discovery
in excess of 1 billion oil-equivalent barrels. Also in October, the
Owowo-3 exploration well, located offshore Nigeria, confirmed a
discovery of 500 million to 1 billion barrels of oil.
• ExxonMobil announced plans to increase production of
ultra-low sulfur fuels at the Beaumont, Texas, refinery by
approximately 40,000 barrels per day. The new unit will use
proprietary technology to remove sulfur while minimizing octane
loss, and will ensure gasoline meets the latest environmental
standards.
• The company announced plans to expand
its specialty elastomers plant in Newport, Wales. The project is
expected to be completed in late 2017 and will result in a 25
percent increase in global capacity to manufacture Santoprene
thermoplastic vulcanizate, high-performance elastomers used for
automotive, industrial and consumer applications.
•
ExxonMobil and Saudi Basic Industries Corporation (SABIC) are
considering the potential development of a jointly owned
petrochemical complex on the U.S. Gulf Coast. The project would
include a steam cracker and derivative units, and would be located
in Texas or Louisiana near natural gas feedstock. A final
investment decision will be made upon completion of necessary
studies.
• During the quarter, the company announced
new developments in its relationships with the Georgia Institute of
Technology, Princeton University and the University of Texas at
Austin to pursue technologies to help meet growing energy demand
while reducing environmental impacts and the risk of climate
change.
Third Quarter 2016 vs. Third Quarter 2015
Upstream earnings were $620 million in the third quarter of
2016, down $738 million from the third quarter of 2015. Lower
liquids and gas realizations decreased earnings by
$880 million, while volume and mix effects increased earnings
by $80 million. All other items, including lower expenses
partly offset by unfavorable foreign exchange effects, increased
earnings by $60 million.
On an oil-equivalent basis, production was down compared with
the third quarter of 2015. Liquids production totaled
2.2 million barrels per day, down 120,000 barrels per
day. Higher downtime, mainly in Nigeria, and field decline were
partly offset by project start-ups. Natural gas production was
9.6 billion cubic feet per day, up 77 million cubic feet
per day from 2015 as project start-ups more than offset field
decline and divestment impacts.
U.S. Upstream earnings declined $35 million from the third
quarter of 2015 to a loss of $477 million in the third quarter
of 2016. Non-U.S. Upstream earnings were $1.1 billion, down
$703 million from the prior year.
Downstream earnings were $1.2 billion, down
$804 million from the third quarter of 2015. Weaker margins,
mainly in refining, decreased earnings by $1.6 billion while
favorable volume and mix effects increased earnings by
$170 million. All other items increased earnings by
$580 million, including lower maintenance expenses and gains
from divestments in Canada. Petroleum product sales of
5.6 million barrels per day were 203,000 barrels per day
lower than the prior year mainly due to divestment of the Torrance,
California, and Chalmette, Louisiana, refineries.
Earnings from the U.S. Downstream were $225 million, down
$262 million from the third quarter of 2015. Non-U.S. Downstream
earnings of $1 billion were $542 million lower than prior
year.
Chemical earnings of $1.2 billion were $56 million
lower than the third quarter of 2015. Margins decreased earnings by
$10 million. Volume and mix effects increased earnings by
$20 million. All other items decreased earnings by
$70 million due primarily to higher maintenance expenses.
Third quarter prime product sales of 6.1 million metric
tons were 51,000 metric tons higher than the prior year's
third quarter.
U.S. Chemical earnings of $434 million were $92 million lower
than the third quarter of 2015. Non-U.S. Chemical earnings of
$737 million were $36 million higher than prior year.
Corporate and financing expenses were $370 million for the third
quarter of 2016, compared to $378 million in the third quarter
of 2015.
First Nine Months 2016
Highlights
• Earnings of $6.2 billion decreased 54 percent from
$13.4 billion in 2015.
• Earnings per share assuming
dilution were $1.47.
• Cash flow from operations and
asset sales was $16.9 billion, including proceeds associated with
asset sales of $2.2 billion.
• Capital and
exploration expenditures were $14.5 billion, down 39 percent from
2015.
• Oil-equivalent production was essentially unchanged
at 4 million oil-equivalent barrels per day, with liquids up 2.6
percent and natural gas down 4.4 percent.
• The corporation
distributed $9.3 billion in dividends to shareholders.
First Nine Months 2016 vs. First Nine Months 2015
Upstream earnings were $838 million, down $5.4 billion
from the first nine months of 2015. Lower realizations decreased
earnings by $5.8 billion. Favorable volume and mix effects
increased earnings by $130 million. All other items increased
earnings by $260 million, primarily due to lower expenses
partly offset by the absence of asset management gains.
On an oil-equivalent basis, production of 4 million barrels
per day was essentially flat compared to the same period in 2015.
Liquids production of 2.4 million barrels per day increased
59,000 barrels per day, with project start-ups partly offset
by field decline, the Canadian wildfires, and downtime mainly in
Nigeria. Natural gas production of 10 billion cubic feet per
day decreased 458 million cubic feet per day from 2015 as
regulatory restrictions in the Netherlands, field decline and
divestment impacts were partly offset by project start-ups.
U.S. Upstream earnings declined $1.3 billion from 2015 to a
loss of $1.8 billion in 2016. Earnings outside the U.S. were
$2.7 billion, down $4.1 billion from the prior year.
Downstream earnings of $3 billion decreased
$2.2 billion from 2015. Weaker refining margins decreased
earnings by $3.3 billion, while volume and mix effects
increased earnings by $330 million. All other items increased
earnings by $680 million, mainly reflecting lower maintenance
expense and gains from divestments. Petroleum product sales of
5.5 million barrels per day were 306,000 barrels per day
lower than 2015 mainly due to divestment of the Torrance and
Chalmette refineries.
U.S. Downstream earnings were $824 million, a decrease of
$642 million from 2015. Non-U.S. Downstream earnings were
$2.1 billion, down $1.6 billion from the prior year.
Chemical earnings of $3.7 billion increased $288 million
from 2015. Stronger margins increased earnings by
$440 million. Favorable volume and mix effects increased
earnings by $130 million. All other items decreased earnings
by $280 million, including the absence of asset management
gains in the U.S. partly offset by lower expenses. Prime product
sales of 18.6 million metric tons were up 387,000 metric
tons from 2015.
U.S. Chemical earnings were $1.5 billion, down
$342 million from the first nine months of 2015 reflecting the
absence of asset management gains. Non-U.S. Chemical earnings of
$2.2 billion were $630 million higher than prior
year.
Corporate and financing expenses were $1.4 billion in 2016,
compared to $1.5 billion in 2015.
During the first nine months of 2016, Exxon Mobil Corporation
purchased 9 million shares of its common stock for the
treasury at a gross cost of $727 million. These shares were
acquired to offset dilution in conjunction with the company’s
benefit plans and programs. The corporation will continue to
acquire shares to offset dilution in conjunction with its benefit
plans and programs, but does not currently plan on making purchases
to reduce shares outstanding.
Forward-looking Statements
As disclosed in ExxonMobil’s 2015 Form 10-K, low crude oil and
natural gas prices can impact the corporation’s reserves as
reported under Securities and Exchange Commission (SEC) rules.
Average year-to-date crude prices have been significantly affected
by the very low prices experienced during the first quarter of
2016, but have recovered considerably since that time. If the
average prices seen during the first nine months of 2016 persist
for the remainder of the year, under the SEC definition of proved
reserves, certain quantities of oil, such as those associated with
the Kearl oil sands operations in Canada, will not qualify as
proved reserves at year-end 2016. In addition, if these average
prices persist, the projected end-of-field-life for estimating
reserves will accelerate for certain liquids and natural gas
operations in North America, resulting in a reduction of proved
reserves at year-end 2016. Quantities that could be required to be
de-booked as proved reserves on an SEC basis amount to
approximately 3.6 billion barrels of bitumen at Kearl, and about 1
billion oil-equivalent barrels in other North America operations.
Among the factors that would result in these reserves being
re-booked as proved reserves at some point in the future are a
recovery in average price levels, a further decline in costs, and /
or operating efficiencies. Under the terms of certain contractual
arrangements or government royalty regimes, lower prices can also
increase proved reserves attributable to ExxonMobil. We do not
expect the de-booking of reported proved reserves under SEC
definitions to affect the operation of the underlying projects or
to alter our outlook for future production volumes.
In light of continued weakness in the upstream industry
environment during 2016, and as part of its annual planning and
budgeting process which is currently in progress, the corporation
will perform an assessment of its major long-lived assets, similar
to the exercise undertaken in late 2015, including North America
natural gas assets and certain other assets across the remainder of
its operations. The assessment will reflect crude and natural gas
price outlooks consistent with those that management uses to
evaluate investment opportunities and generally consistent with the
long-term price forecasts published by third-party industry and
government experts. Development of future undiscounted cash flow
estimates requires significant management judgment, particularly in
cases where an asset’s life is expected to extend decades into the
future. An asset group would be impaired if its estimated
undiscounted cash flows were less than the asset’s carrying value,
and impairment would be measured by the amount by which the
carrying value exceeds fair value. The corporation will complete
its asset recoverability assessment and analyze the conclusions of
that assessment in connection with the preparation and review of
the corporation’s year-end financial statements for inclusion in
its 2016 Form 10-K. Until these activities are complete, it is not
practicable to reasonably estimate the existence or range of
potential future impairments related to the corporation’s
long-lived assets.
ExxonMobil will discuss financial and operating results and
other matters during a webcast at 8:30 a.m. Central Time on
October 28, 2016. To listen to the event or access an archived
replay, please visit www.exxonmobil.com.
Cautionary Statement
Statements relating to future plans, projections, events or
conditions are forward-looking statements. Actual financial and
operating results, including project plans, costs, timing, and
capacities; capital and exploration expenditures; asset carrying
values; reported reserves; resource recoveries; and share purchase
levels, could differ materially due to factors including: changes
in oil or gas prices or other market or economic conditions
affecting the oil and gas industry, including the scope and
duration of economic recessions; the outcome of exploration and
development efforts; changes in law or government regulation,
including tax and environmental requirements; the impact of fiscal
and commercial terms; changes in technical or operating conditions;
and other factors discussed under the heading "Factors Affecting
Future Results" in the “Investors” section of our website and in
Item 1A of ExxonMobil's 2015 Form 10-K. Closing of pending
acquisitions is also subject to satisfaction of the conditions
precedent provided in the applicable agreement. We assume no duty
to update these statements as of any future date.
Frequently Used Terms
This press release includes cash flow from operations and asset
sales, which is a non-GAAP financial measure. Because of the
regular nature of our asset management and divestment program, we
believe it is useful for investors to consider proceeds associated
with the sales of subsidiaries, property, plant and equipment, and
sales and returns of investments together with cash provided by
operating activities when evaluating cash available for investment
in the business and financing activities. A reconciliation to net
cash provided by operating activities is shown in Attachment II.
References to quantities of oil or natural gas may include amounts
that we believe will ultimately be produced, but that are not yet
classified as “proved reserves” under SEC definitions. Further
information on ExxonMobil's frequently used financial and operating
measures and other terms including “prime product sales” is
contained under the heading "Frequently Used Terms" available
through the “Investors” section of our website at
exxonmobil.com.
Reference to Earnings
References to corporate earnings mean net income attributable to
ExxonMobil (U.S. GAAP) from the consolidated income statement.
Unless otherwise indicated, references to earnings, Upstream,
Downstream, Chemical and Corporate and Financing segment earnings,
and earnings per share are ExxonMobil's share after excluding
amounts attributable to noncontrolling interests.
The term “project” as used in this release can refer to a
variety of different activities and does not necessarily have the
same meaning as in any government payment transparency reports.
Santoprene is a registered trademark of Exxon Mobil
Corporation.
Exxon Mobil Corporation has numerous affiliates, many with names
that include ExxonMobil, Exxon, Mobil, Esso, and XTO. For
convenience and simplicity, those terms and terms such as
Corporation, company, our, we, and its are sometimes used as
abbreviated references to specific affiliates or affiliate groups.
Similarly, ExxonMobil has business relationships with thousands of
customers, suppliers, governments, and others. For convenience and
simplicity, words such as venture, joint venture, partnership,
co-venturer, and partner are used to indicate business and other
relationships involving common activities and interests, and those
words may not indicate precise legal relationships.
Estimated Key Financial and
Operating Data Attachment I Exxon Mobil
Corporation Third Quarter 2016 (millions of dollars,
unless noted)
Third Quarter
Nine Months 2016
2015 2016 2015
Earnings / Earnings Per Share Total revenues and
other income
58,677 67,344
165,078 209,075 Total
costs and other deductions
55,451 61,595
157,726
189,737 Income before income taxes
3,226 5,749
7,352
19,338 Income taxes
337 1,365
1,001 5,617 Net income
including noncontrolling interests
2,889 4,384
6,351
13,721 Net income attributable to noncontrolling interests
239 144
191 351 Net income attributable to ExxonMobil
(U.S. GAAP)
2,650 4,240
6,160 13,370 Earnings
per common share (dollars)
0.63 1.01
1.47 3.18
Earnings per common share - assuming
dilution (dollars)
0.63 1.01
1.47 3.18
Other Financial
Data Dividends on common stock Total
3,133 3,060
9,320 9,036 Per common share (dollars)
0.75 0.73
2.23 2.15 Millions of common shares outstanding At
September 30
4,147 4,163 Average - assuming dilution
4,178 4,190
4,178 4,201 ExxonMobil share of
equity at September 30
170,597 170,723 ExxonMobil share of
capital employed at September 30
218,993 207,303
Income taxes
337 1,365
1,001 5,617 Sales-based taxes
5,437 5,813
15,687 17,308 All other taxes
7,054 7,585
21,076 22,454 Total taxes
12,828
14,763
37,764 45,379
ExxonMobil share of income taxes of equity
companies
391 686
1,256 2,402
Attachment II Exxon Mobil Corporation Third
Quarter 2016 (millions of dollars)
Third
Quarter Nine Months
2016 2015 2016
2015 Earnings (U.S. GAAP) Upstream United
States
(477 ) (442 )
(1,823 ) (541 )
Non-U.S.
1,097 1,800
2,661 6,785 Downstream United
States
225 487
824 1,466 Non-U.S.
1,004 1,546
2,136 3,740 Chemical United States
434 526
1,524 1,866 Non-U.S.
737 701
2,219 1,589
Corporate and financing
(370 ) (378 )
(1,381
) (1,535 ) Net income attributable to ExxonMobil
2,650 4,240
6,160 13,370
Cash flow
from operations and asset sales (billions of dollars)
Net cash provided by operating activities
(U.S. GAAP)
5.3 9.2
14.7 26.0 Proceeds associated with asset
sales
1.0 0.5
2.2 1.6 Cash flow from operations and
asset sales
6.3 9.7
16.9 27.6
Attachment III Exxon Mobil Corporation
Third Quarter 2016 Third Quarter
Nine Months 2016
2015 2016 2015
Net production of crude oil, natural gas
liquids, bitumen and synthetic oil, thousand barrels per day
(kbd)
United States
484 468
493 470 Canada / South America
437 425
424 386 Europe
189 197
203 198
Africa
388 531
482 524 Asia
651 651
700
671 Australia / Oceania
62 59
57 51 Worldwide
2,211 2,331
2,359 2,300
Natural gas production available for sale,
million cubic feet per day (mcfd)
United States
3,058 3,094
3,105 3,155 Canada / South
America
220 229
244 267 Europe
1,650 1,495
2,057 2,213 Africa
13 7
7 6 Asia
3,662
3,910
3,758 4,151 Australia / Oceania
998 789
856 693 Worldwide
9,601 9,524
10,027 10,485
Oil-equivalent production (koebd)1
3,811 3,918
4,030 4,047 1 Gas converted to oil-equivalent at 6
million cubic feet = 1 thousand barrels.
Attachment IV Exxon Mobil Corporation
Third Quarter 2016 Third Quarter
Nine Months 2016
2015 2016 2015
Refinery throughput (kbd) United States
1,604 1,681
1,587 1,730 Canada
406 391
350 385 Europe
1,476 1,504
1,403 1,501 Asia Pacific
677 687
708 636 Other
202 194
187 192 Worldwide
4,365 4,457
4,235 4,444 Petroleum product
sales (kbd) United States
2,327 2,509
2,258 2,556
Canada
511 501
489 493 Europe
1,553 1,549
1,514 1,547 Asia Pacific
721 781
749 741 Other
473 448
463 442 Worldwide
5,585 5,788
5,473 5,779 Gasolines, naphthas
2,298 2,382
2,258 2,374 Heating oils, kerosene, diesel
1,810
1,908
1,754 1,925 Aviation fuels
421 433
403
416 Heavy fuels
358 372
370 380 Specialty products
698 693
688 684 Worldwide
5,585 5,788
5,473 5,779
Chemical prime product sales, thousand
metric tons (kt)
United States
2,320 2,377
7,167 7,099 Non-U.S.
3,813 3,705
11,449 11,130 Worldwide
6,133
6,082
18,616 18,229
Attachment V Exxon Mobil Corporation Third
Quarter 2016 (millions of dollars)
Third
Quarter Nine Months
2016 2015 2016
2015 Capital and Exploration Expenditures
Upstream United States
712 1,992
2,701 6,207 Non-U.S.
2,360 4,382
8,269 13,330 Total
3,072 6,374
10,970 19,537 Downstream United States
192 242
608 803 Non-U.S.
397 344
1,151 1,031 Total
589 586
1,759 1,834 Chemical United States
359
452
1,148 1,452 Non-U.S.
144 217
529 699 Total
503 669
1,677 2,151 Other
26 41
69 113 Worldwide
4,190 7,670
14,475
23,635
Exploration expenses charged to income
included above
Consolidated affiliates United States
35 45
178 122
Non-U.S.
291 278
946 881 Equity companies -
ExxonMobil share United States
- -
- 3 Non-U.S.
6 2
1 33 Worldwide
332 325
1,125 1,039
Attachment VI Exxon Mobil
Corporation Earnings $
Millions $ Per Common Share1
2012 First Quarter 9,450 2.00 Second
Quarter 15,910 3.41 Third Quarter 9,570 2.09 Fourth Quarter 9,950
2.20 Year 44,880 9.70
2013 First Quarter
9,500 2.12 Second Quarter 6,860 1.55 Third Quarter 7,870 1.79
Fourth Quarter 8,350 1.91 Year 32,580 7.37
2014 First Quarter 9,100 2.10 Second Quarter
8,780 2.05 Third Quarter 8,070 1.89 Fourth Quarter 6,570 1.56 Year
32,520 7.60
2015 First Quarter 4,940
1.17 Second Quarter 4,190 1.00 Third Quarter 4,240 1.01 Fourth
Quarter 2,780 0.67 Year 16,150 3.85
2016
First Quarter 1,810 0.43 Second Quarter 1,700 0.41 Third Quarter
2,650 0.63
1 Computed using the average number of shares outstanding during
each period.
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