XOM Exxon Mobil Corp

• Positive U.S. Upstream earnings of $429 million
• Highest quarterly cash flow from operations and asset sales since 2014
• Rapid response and recovery from Papua New Guinea earthquake

Exxon Mobil Corporation (NYSE:XOM):

  First   First     Fourth   Quarter Quarter Quarter 2018 2017 % 2017 % Earnings Summary (Dollars in millions, except per share data) Earnings (U.S. GAAP) 4,650 4,010 16 8,380 -45 U.S. Tax Reform Enactment - - 5,942 Asset Impairments - - (1,294 ) Earnings Excluding U.S. Tax Reform Enactment and Impairments 4,650 4,010 16 3,732 25   Earnings Per Common Share Assuming Dilution 1.09 0.95 15 1.97 -45   Capital and Exploration Expenditures 4,867 4,169 17 8,999 -46  

Exxon Mobil Corporation today announced estimated first quarter 2018 earnings of $4.7 billion, or $1.09 per share assuming dilution, compared with $4 billion a year earlier. Cash flow from operations and asset sales was $10 billion, including proceeds associated with asset sales of $1.4 billion. During the quarter, the corporation distributed $3.3 billion in dividends to shareholders. Capital and exploration expenditures were $4.9 billion, up 17 percent from the prior year.

Oil-equivalent production was 3.9 million barrels per day, down 6 percent from the first quarter of 2017. Excluding entitlement effects and divestments, oil-equivalent production was down 3 percent from the first quarter of 2017.

“Increased commodity prices, coupled with a focus on operating efficiently and strengthening our portfolio, resulted in higher earnings and the highest quarterly cash flow from operations and asset sales since 2014,” said Darren W. Woods, chairman and chief executive officer. “Through new discoveries and acquired acreage, we’ve positioned our Upstream portfolio well for future growth. We also made good progress on our plans to improve the production mix and grow premium product sales in the Downstream and Chemical businesses.”

First Quarter 2018 Business Highlights

Upstream:

• Crude and natural gas prices strengthened in the first quarter. ExxonMobil’s crude realizations were impacted by an increased discount in Western Canada, notably for heavy crudes, as Canadian supply exceeded pipeline and rail capacity. The logistics constraints in Canada supported the decision to accelerate Syncrude turnaround activities into the first quarter.
• Natural gas prices were supported by strong seasonal demand with colder weather across Europe and the U.S. and higher crude-linked LNG prices.
• As expected, higher prices reduced entitlement volumes.
• Following a severe earthquake in Papua New Guinea on February 26, operations at the PNG LNG project were temporarily shut down while the company responded with humanitarian relief for impacted communities and worked to fully restore operations. The project safely resumed LNG production ahead of schedule in mid-April. The impact of the earthquake reduced earnings by $80 million and production by 25,000 oil-equivalent barrels per day.
• The Hebron field in Canada, which started up last year, has ramped up to produce 14,000 oil-equivalent barrels per day in the first quarter with well performance exceeding expectations.
• Development of the company’s U.S. unconventional acreage is progressing with 27 operated rigs in the Permian and four operated rigs in the Bakken. Permian and Bakken unconventional production has experienced 18 percent growth year-over-year.

Downstream:

• Global refining margins remained generally strong, especially in North America. Petroleum product demand was seasonally lower.
• Overall manufacturing reliability improved from one-time fourth quarter events. A significant focus during the quarter was on returning the refinery in Joliet, Ill., back to full capacity in March, capturing attractive margins on weaker Canadian crude prices.

Chemical:

• ExxonMobil continued to make significant progress in growing the business. The integration of Jurong Aromatics Corporation into the existing Singapore business is progressing as planned, contributing 340,000 metric tons of sales during the quarter.
• The North America Growth project is also progressing well with the new polyethylene lines in Mont Belvieu, Texas, increasing sales volumes in the quarter.
• As expected, incremental activity associated with startup and commissioning of these new facilities increased expenses during the quarter.
• Within the base business, large planned turnarounds in the Middle East and the Gulf Coast were successfully completed.

Strengthening the Portfolio

• ExxonMobil announced its seventh oil discovery offshore Guyana with the completion of the Pacora-1 exploration well. The well encountered approximately 65 feet (20 meters) of high-quality, oil-bearing sandstone reservoir.
• During the quarter, the company increased its holdings in Brazil’s pre-salt basins after winning eight additional exploration blocks, six of them to be operated by ExxonMobil, during the latest bid round. The company added more than 640,000 net acres to its existing deepwater portfolio offshore Brazil, and is now one of the largest acreage holders among international oil companies in the country.
• ExxonMobil announced that its estimate of the size of the natural gas resource at the P’nyang field in Papua New Guinea (PNG) has increased to 4.36 trillion cubic feet of gas, an 84 percent increase from the previous assessment completed in 2012. This increase, based on an independent recertification study, supports a potential three-train expansion concept of the PNG LNG plant.
• ExxonMobil sold its 50 percent ownership interest in the Scarborough gas field, offshore Western Australia, to Woodside Petroleum Ltd. In the Downstream, the company closed several divestments, including distribution and marketing assets in South America, and retail sites in Europe.
• During the quarter, ExxonMobil added to its exploration portfolio offshore West Africa by signing an agreement with the government of Ghana to acquire exploration and production rights for the Deepwater Cape Three Points block. ExxonMobil also signed an agreement with a subsidiary of Galp Energia, SGPS, S.A. for a 40 percent farm-in to a deepwater license offshore Namibia. Both agreements are subject to government approvals.

Investing for Growth

• The company began commissioning its new ethane cracker in Baytown, Texas. The cracker, expected to start up mid-year 2018, will produce 1.5 million metric tons per year of ethylene feedstock for the new polyethylene lines at the company’s plastics plant in Mont Belvieu, Texas.
• The company also continued its entry into Mexico’s fuels market with the opening of new Mobil-branded service stations operated by Grupo Orsan and Grupo Combured. The new stations will be supplied with gasoline and diesel produced by ExxonMobil’s refineries in Texas.

Advancing Innovative Technologies and Products

• During the quarter, ExxonMobil and Synthetic Genomics, Inc. announced a new phase in their joint algae biofuel research program that could lead to the technical ability to produce 10,000 barrels of algae biofuel per day by 2025.

        Earnings and Volume Summary   Millions of Dollars 1Q 1Q (unless noted) 2018 2017 Change Comments   Upstream U.S. 429 (18) +447 Higher liquids prices, partially offset by higher expenses Non-U.S. 3,068 2,270 +798 Higher prices and the gain on the Scarborough sale ($366 million), partially offset by lower volumes, including the impact from PNG earthquake, and higher expenses Total 3,497 2,252 +1,245 Prices +$1,430 million, volumes / mix -$190 million, other +$10 million Production (koebd) 3,889 4,151 -262 Liquids -117 kbd: lower volumes from decline, entitlements and divestments, partially offset by growth in North America

 

Gas -870 mcfd: higher downtime, including impacts from PNG earthquake, lower entitlements and base decline

  Downstream U.S. 319 292 +27 Higher margins and lower turnaround costs, partially offset by lower throughput (mainly Joliet) Non-U.S. 621 824 -203 Higher expenses, lower divestment gains, and lower margins Total 940 1,116 -176 Margins -$30 million, volumes / mix -$60 million, other -$90 million Petroleum Product Sales (kbd) 5,432 5,395 +37   Chemical U.S. 503 529 -26 Higher growth-related expenses and lower margins, partially offset by higher volumes Non-U.S. 508 642 -134 Lower margins and higher growth-related expenses, partially offset by favorable foreign exchange impacts and higher volumes Total 1,011 1,171 -160 Margins -$270 million, volumes / mix +$120 million, other -$10 million Prime Product Sales (kt) 6,668 6,072 +596 Project growth and acquisitions   Corporate and financing (798) (529) -269 Primarily impact of lower U.S. tax rate, higher pension and financing related costs; in line with expectations           Fourth Quarter 2017 Earnings   Millions of Dollars 4Q U.S. Tax Asset 4Q 2017 2017 Reform Impairments Adjusted Upstream 8,352 7,122 (1,288 ) 2,518 Downstream 1,564 618 (6 ) 952 Chemical 1,270 335 - 935 Corporate and financing (2,806 ) (2,133 ) -   (673 ) Total 8,380 5,942 (1,294 ) 3,732           Earnings and Volume Summary   Millions of Dollars 1Q 4Q 2017 (unless noted) 2018 Adjusted Change Comments   Upstream U.S. 429 (60) +489 Higher prices and lower expenses Non-U.S. 3,068 2,578 +490 Higher prices, the gain on the Scarborough sale, and lower operating expenses, partially offset by the absence of the Norway divestment and lower volumes Total 3,497 2,518 +979 Prices +$640 million, volumes / mix -$130 million, other +$470 million Production (koebd) 3,889 3,991 -102 Liquids -35 kbd: higher downtime from Syncrude turnaround and lower volumes from entitlements and divestments, partially offset by growth

 

Gas -403 mcfd: lower entitlements and higher downtime, including impacts from PNG earthquake, partially offset by higher demand

  Downstream U.S. 319 306 +13 Higher volumes and lower expenses, partially offset by lower margins Non-U.S. 621 646 -25 Absence of the gain on sale of assets in Norway and lower volumes, partially offset by lower expenses Total 940 952 -12 Margins -$200 million, volumes / mix -$40 million, other +230 million Petroleum Product Sales (kbd) 5,432 5,624 -192   Chemical U.S. 503 442 +61 Lower expenses and favorable tax effects, partially offset by lower margins Non-U.S. 508 493 +15 Favorable foreign exchange impacts, partially offset by lower volumes and lower margins Total 1,011 935 +76 Margins -$30 million, volumes / mix -$30 million, other +$140 million Prime Product Sales (kt) 6,668 6,782 -114   Corporate and financing (798) (673) -125 Primarily lower U.S. tax rate, higher pension and financing related costs       Cash Flow from Operations and Asset Sales   Millions of Dollars 1Q   2018 Comments Net income including noncontrolling interests 4,783 Includes $133 million for noncontrolling interests Depreciation 4,470 Changes in working capital 351 Other (1,085 ) Timing of equity company dividends versus earnings Cash Flow from Operations (U.S. GAAP) 8,519 Asset sales 1,441  

Cash Flow from Operations and Asset Sales

9,960  

First Quarter 2018 Financial Updates

During the first quarter of 2018, Exxon Mobil Corporation purchased 5 million shares of its common stock for the treasury at a gross cost of $425 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.

Effective January 1, 2018, ExxonMobil adopted the Financial Accounting Standards Board’s standard, Revenue from Contracts with Customers (Topic 606), as amended, using the Modified Retrospective method. ExxonMobil also adopted the Financial Accounting Standards Board’s Update, Financial Instruments – Overall (Subtopic 825-10): Recognition and Measurement of Financial Assets and Financial Liabilities. ExxonMobil also adopted the Financial Accounting Standards Board’s Update, Compensation – Retirement Benefits (Topic 715): Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.

The adoption of these standards did not have a material impact on the corporation’s financial statements. The cumulative effect of adoption of the new standards was de minimis.

ExxonMobil will discuss financial and operating results and other matters during a webcast at 8:30 a.m. Central Time on April 27, 2018. 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. Future results, including project plans, costs, timing, and capacities; business growth; integration benefits; resource recoveries; the impact of new technologies; and share purchase levels, could differ materially due to factors including: changes in oil, gas or petrochemical prices or other market or economic conditions affecting the oil, gas or petrochemical industries, including the scope and duration of economic recessions; the outcome of exploration and development efforts; timely completion of new projects; changes in law or government regulation, including tax and environmental requirements; the impact of fiscal and commercial terms and outcome of commercial negotiations; the results of research programs; changes in technical or operating conditions; actions of competitors; 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 2017 Form 10-K. We assume no duty to update these statements as of any future date.

Frequently Used Terms and Non-GAAP Measures

This press release includes cash flow from operations and asset sales. 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 V.

This press release also includes earnings excluding impacts from U.S. tax reform enactment and asset impairments. We believe these figures are useful for investors to consider in comparing the performance of our underlying business across periods when one, or both, periods have been impacted by the U.S. tax reform or an asset impairment charge. A reconciliation of earnings excluding these items to U.S. GAAP earnings is shown in Attachment II.

This press release also includes total taxes including sales-based taxes. This is a broader indicator of the total tax burden on the corporation’s products and earnings, including certain sales and value-added taxes imposed on and concurrent with revenue-producing transactions with customers and collected on behalf of governmental authorities (“sales-based taxes”). It combines “Income taxes” and “Total other taxes and duties” with sales-based taxes, which are reported net in the income statement. We believe it is useful for the corporation and its investors to understand the total tax burden imposed on the corporation’s products and earnings. A reconciliation to total taxes is shown in Attachment I.

References to the resource base and other quantities of oil, natural gas or condensate may include amounts that are not yet classified as “proved reserves” under SEC definitions, but which we believe will likely be moved into the “proved reserves” category and produced in the future. 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. Further information on ExxonMobil’s frequently used financial and operating measures and other terms including “Cash flow from operations and asset sales”, and “Total taxes including sales-based taxes” 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.

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 First Quarter 2018 (millions of dollars, unless noted)   First First Fourth Quarter Quarter Quarter 2018 2017 2017 Earnings / Earnings Per Share Total revenues and other income1 68,211 58,671 66,515 Total costs and other deductions 60,971 52,753 63,498 Income before income taxes 7,240 5,918 3,017 Income taxes 2,457 1,828 (5,392 ) Net income including noncontrolling interests 4,783 4,090 8,409 Net income attributable to noncontrolling interests 133 80 29 Net income attributable to ExxonMobil (U.S. GAAP) 4,650 4,010 8,380   Earnings per common share (dollars) 1.09 0.95 1.97  

Earnings per common share - assuming dilution (dollars)

1.09 0.95 1.97   Exploration expenses, including dry holes 287 289 703   Other Financial Data Dividends on common stock Total 3,291 3,134 3,289 Per common share (dollars) 0.77 0.75 0.77   Millions of common shares outstanding At period end 4,234 4,237 4,239 Average - assuming dilution 4,270 4,223 4,270   ExxonMobil share of equity at period end 188,195 177,151 187,688 ExxonMobil share of capital employed at period end 231,282 223,447 232,467   Income taxes 2,457 1,828 (5,392 ) Total other taxes and duties 8,815 7,629 8,583 Total taxes 11,272 9,457 3,191 Sales-based taxes 5,281 4,616 5,245 Total taxes including sales-based taxes 16,553 14,073 8,436  

ExxonMobil share of income taxes of equity companies

740 647 500  

1 Effective December 31, 2017, the corporation revised its accounting policy election related to the reporting of sales-based taxes, which had no impact on earnings. For more information, please refer to Note 2 in the Financial Section of ExxonMobil’s 2017 Form 10-K.

      Attachment II   Exxon Mobil Corporation First Quarter 2018 (millions of dollars)   First First Fourth Quarter Quarter Quarter 2018 2017 2017 Earnings (U.S. GAAP) Upstream United States 429 (18 ) 7,061 Non-U.S. 3,068 2,270 1,291 Downstream United States 319 292 918 Non-U.S. 621 824 646 Chemical United States 503 529 777 Non-U.S. 508 642 493 Corporate and financing (798 ) (529 ) (2,806 ) Net income attributable to ExxonMobil 4,650 4,010 8,380   U.S. Tax Reform Enactment Upstream United States - - 7,602 Non-U.S. - - (480 ) Downstream United States - - 618 Chemical United States - - 335 Corporate and financing - - (2,133 ) Total U.S. Tax Reform Enactment - - 5,942   Asset Impairments Upstream United States - - (481 ) Non-U.S. - - (807 ) Downstream United States - - (6 ) Total Asset Impairments - - (1,294 )   Earnings Excluding U.S. Tax Reform Enactment and Impairments Upstream United States 429 (18 ) (60 ) Non-U.S. 3,068 2,270 2,578 Downstream United States 319 292 306 Non-U.S. 621 824 646 Chemical United States 503 529 442 Non-U.S. 508 642 493 Corporate and financing (798 ) (529 ) (673 ) Earnings excluding U.S. Tax Reform Enactment and Impairments 4,650 4,010 3,732     Attachment III     Exxon Mobil Corporation First Quarter 2018   First First Fourth Quarter Quarter Quarter 2018 2017 2017

Net production of crude oil, natural gas liquids, bitumen and synthetic oil, thousand barrels per day (kbd)

United States 523 513 525 Canada / Other Americas 427 421 426 Europe 145 205 155 Africa 376 433 403 Asia 706 711 690 Australia / Oceania 39 50 52 Worldwide 2,216 2,333 2,251  

Natural gas production available for sale, million cubic feet per day (mcfd)

United States 2,576 3,011 2,753 Canada / Other Americas 211 218 240 Europe 2,542 2,768 2,266 Africa 9 5 6 Asia 3,568 3,807 3,855 Australia / Oceania 1,132 1,099 1,321 Worldwide 10,038 10,908 10,441   Oil-equivalent production (koebd)1 3,889 4,151 3,991  

1 Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels.

      Attachment IV   Exxon Mobil Corporation First Quarter 2018   First First Fourth Quarter Quarter Quarter 2018 2017 2017 Refinery throughput (kbd) United States 1,518 1,621 1,379 Canada 408 397 391 Europe 1,495 1,453 1,509 Asia Pacific 720 652 728 Other 152 201 200 Worldwide 4,293 4,324 4,207   Petroleum product sales (kbd) United States 2,128 2,155 2,209 Canada 484 494 501 Europe 1,574 1,536 1,589 Asia Pacific 795 708 819 Other 451 502 506 Worldwide 5,432 5,395 5,624   Gasolines, naphthas 2,215 2,163 2,353 Heating oils, kerosene, diesel 1,828 1,833 1,878 Aviation fuels 396 370 393 Heavy fuels 346 380 370 Specialty products 647 649 630 Worldwide 5,432 5,395 5,624  

Chemical prime product sales, thousand metric tons (kt)

United States 2,391 2,280 2,399 Non-U.S. 4,277 3,792 4,383 Worldwide 6,668 6,072 6,782         Attachment V   Exxon Mobil Corporation First Quarter 2018 (millions of dollars)   First First Fourth Quarter Quarter Quarter 2018 2017 2017 Capital and Exploration Expenditures Upstream United States 1,248 704 1,158 Non-U.S. 2,511 2,415 6,457 Total 3,759 3,119 7,615 Downstream United States 218 205 264 Non-U.S. 396 340 518 Total 614 545 782 Chemical United States 343 388 389 Non-U.S. 122 109 167 Total 465 497 556   Other 29 8 46   Worldwide 4,867 4,169 8,999     Cash flow from operations and asset sales

Net cash provided by operating activities (U.S. GAAP)

8,519 8,173 7,411 Proceeds associated with asset sales 1,441 687 1,408 Cash flow from operations and asset sales 9,960 8,860 8,819       Attachment VI   Exxon Mobil Corporation Earnings   $ Millions $ Per Common Share1   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 Fourth Quarter 1,680 0.41 Year 7,840 1.88   2017 First Quarter 4,010 0.95 Second Quarter 3,350 0.78 Third Quarter 3,970 0.93 Fourth Quarter 8,380 1.97 Year 19,710 4.63   2018 First Quarter 4,650 1.09  

1 Computed using the average number of shares outstanding during each period.

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