Exxon Mobil Corporation Announces Estimated Third Quarter 2002 Results
Third Quarter Nine Months
2002 2001 2002 2001
Earnings Excluding
Merger Effects/Special Items
$ Millions 2,940 3,320 7,760 12,750
$ Per Common Share
Assuming Dilution 0.44 0.48 1.14 1.84
Net Income
$ Millions 2,640 3,180 7,370 12,640
$ Per Common Share
Assuming Dilution 0.39 0.46 1.08 1.82
Revenue - $ Millions 54,182 52,113 148,622 165,597
Capital & Exploration
Expenditures - $ Millions 3,563 3,098 9,930 8,448
Exxon Mobil Corporation (NYSE:XOM) today reported third quarter results.
Excluding merger effects and special items, third quarter 2002 earnings were
$2,940 million ($0.44 per share), a decrease of $380 million from the third
quarter of 2001, but an increase of $270 million from the second quarter of
2002. Including merger effects and special items, net income of $2,640 million
($0.39 per share) decreased $540 million.
Revenue for the third quarter of 2002 totaled $54,182 million compared with $52,113 million in 2001. Capital and exploration expenditures of $3,563 million in the third quarter of 2002 were up $465 million, or 15%, compared with $3,098 million last year and were 5% higher than in this year's second quarter.
ExxonMobil's Chairman Lee R. Raymond commented as follows:"Excluding merger effects and special items, ExxonMobil's third quarter 2002 earnings of $2,940 million were up $270 million from second quarter 2002 earnings of $2,670 million. This improvement followed an increase of $520 million from first to second quarter 2002. Net income was $2,640 million.
"Upstream earnings improved $264 million from the second quarter, primarily reflecting the continued upward trend in crude oil prices.
"Downstream earnings decreased $257 million from the second quarter primarily due to weak U.S. refining conditions and unfavorable foreign exchange effects. Marketing margins declined and remained weak overall.
"Chemicals earnings rose $84 million compared with the second quarter. Improved margins in the U.S. more than offset lower volumes, which were down slightly from the prior quarter's record level.
"Corporate and financing expenses of $76 million decreased $144 million mainly due to favorable foreign exchange impacts.
"Operating expenses for the first nine months of 2002 declined $1.5 billion versus the same period last year. The decline was related to lower energy prices and additional efficiencies captured in all business lines.
"Compared with last year's third quarter, ExxonMobil's third quarter 2002 earnings, excluding merger effects and special items, were $2,940 million, down $380 million. The reduction in earnings reflected significantly weaker conditions in the downstream segments, partly offset by improvements in crude oil prices and production levels in the upstream.
"Upstream earnings were $2,417 million, an increase of $286 million from the third quarter 2001 results. These upstream results reflected higher realizations on sales of crude oil. Liquids production, excluding the impact of OPEC quota restrictions, was flat as new production from fields in Malaysia, Angola and Canada was offset by natural field decline. Natural gas volumes were up 8%, reflecting resumed operations at the Arun field in Indonesia and higher production elsewhere in Asia-Pacific. On an oil-equivalent basis, excluding the effect of OPEC quota restrictions, production increased 3%. Project schedules for long-term volume increases remain on track as reflected by higher capital spending.
"Downstream earnings were $125 million, down $817 million from last year's third quarter, reflecting weak industry-wide conditions. Refining margins dropped in most areas worldwide, with the sharpest declines in the U.S., Europe and Japan. Improved refining operations have continued to provide a partial offset to the margin decline. Marketing margins remained weak in most areas worldwide, with further declines in the quarter outside of the U.S.
"Chemicals earnings of $353 million were more than double last year's third quarter due mainly to record third quarter sales volumes and a net improvement in margins.
"Earnings from other operations, including coal, minerals and power, totaled $121 million, similar to last year.
"Third quarter 2002 net income of $2,640 million included after- tax merger expenses of $85 million and a special charge of $215 million, reflecting the impact on deferred income taxes from the 10% supplementary upstream tax enacted in the U.K. in July.
"In the third quarter, ExxonMobil continued its active investment program, spending $3,563 million on capital and exploration projects, compared with $3,098 million last year, reflecting continued growth in upstream spending.
"Capital and exploration expenditures of $9,930 million for the first nine months of 2002 were up $1,482 million, or 18%, compared with $8,448 million last year. Upstream capital spending was up 22%, consistent with long term investment plans which will result in expanding profitable production.
"Cash flow from operations and asset sales for the first nine months of 2002 was $17.2 billion, below last year's $20.4 billion level due to lower earnings, but sufficiently large to exceed cash requirements to fund the corporation's growing capital expenditure program, shareholder dividends and continuing share purchases.
"During the quarter, the corporation acquired 30 million shares at a gross cost of $1,062 million to offset the dilution associated with benefit plans and to reduce common stock outstanding."
Additional comments on earnings for the major operating segments follow:
Third Quarter 2002 vs. Third Quarter 2001Excluding a special charge recorded in 2002, upstream earnings were $2,417 million, up $286 million from the third quarter 2001 reflecting higher crude oil realizations.
Liquids production of 2,448 kbd (thousands of barrels per day) decreased from 2,484 kbd in the third quarter of 2001. Higher production in Angola, Malaysia, Canada and Venezuela was offset by OPEC quota restrictions and natural field declines in mature areas. Absent OPEC quota restrictions, liquids production was flat with last year. Third quarter natural gas production increased to 9,214 mcfd (millions of cubic feet per day), compared with 8,561 mcfd last year. Improvements in Asia-Pacific natural gas volumes, mainly from the return to full production levels at the Arun field in Indonesia following last year's curtailments due to security concerns, were partly offset by natural field decline in the U.S. and North Sea. Total actual oil and natural gas production increased 2% versus the third quarter of last year, as resumption of full operations at Arun and contributions from new projects and work programs more than offset natural field declines. Excluding the impact of OPEC quota restrictions, oil-equivalent production was up 3%.
Earnings from U.S. upstream operations were $641 million, down $126 million. Excluding the special U.K. tax charge in 2002, non-U.S. upstream earnings of $1,776 million were $412 million higher than last year's third quarter.
Downstream earnings of $125 million decreased substantially from the third quarter of last year, reflecting significantly lower refining margins in the U.S. and Europe with continued weakness in Asia-Pacific. Marketing margins remained depressed. Petroleum product sales were 7,763 kbd, 188 kbd lower than last year's third quarter in large part due to reduced demand for aviation fuel and lower distillate and fuel oil sales in Europe.
U.S. downstream earnings were $42 million, down $348 million. Non-U.S. downstream earnings of $83 million were $469 million lower than last year's third quarter.
Chemicals earnings of $353 million were up $197 million from the same quarter a year ago reflecting higher volumes and improved margins. Prime product sales of 6,711 kt (thousands of metric tons) were up 254 kt, reflecting higher demand in key commodity businesses across most regions and supported by capacity additions in Singapore.
Earnings from other operations, including coal, minerals and power, totaled $121 million, similar to last year.
Corporate and financing expenses of $76 million increased $47 million, primarily due to higher pension costs.
The corporation's effective tax rate increased in the third quarter, and reflected the impact of higher U.K. taxes, including a special charge of $215 million related to the deferred income tax effect of the 10% supplementary U.K. tax on North Sea operations that was enacted during the quarter. During the period, the Company continued to benefit from the favorable resolution of other tax related issues.
Third quarter net income also included $85 million of after-tax merger expenses, including costs for rationalization of facilities and systems.
During the third quarter of 2002, Exxon Mobil Corporation purchased 30 million shares of its common stock for the treasury at a gross cost of $1,062 million. These purchases were to offset shares issued in conjunction with company benefit plans and programs and to reduce the number of shares outstanding. Shares outstanding were reduced from 6,757 million at the end of the second quarter of 2002 to 6,729 million at the end of the third quarter. Purchases may be made in both the open market and through negotiated transactions, and may be discontinued at any time.
First Nine Months 2002 vs. First Nine Months 2001Excluding merger effects and special items, earnings of $7,760 million ($1.14 per share) for the first nine months of 2002 decreased $4,990 million from the record first nine months of last year. Including merger effects and special items, net income of $7,370 million ($1.08 per share) for the first nine months of 2002 decreased $5,270 million. Included in this year's first nine months net income was $390 million in after-tax merger expenses and unfavorable special items, while last year's first nine months included net unfavorable merger effects and special items of $110 million.
Upstream earnings decreased primarily due to lower natural gas realizations, particularly in North America, where prices reached historical highs at the beginning of 2001. Crude oil realizations were also lower. Liquids production of 2,494 kbd decreased 53 kbd from the first nine months of 2001. Higher production in Angola, Malaysia, Venezuela and Canada was offset by OPEC quota restrictions and natural field declines in mature areas. Excluding the effect of OPEC quota restrictions, liquids production in 2002 was flat with the first nine months of 2001. Worldwide natural gas production of 10,039 mcfd in the first nine months of 2002 compared with 9,910 mcfd in 2001. Improvements in Asia-Pacific volumes, mainly from the return to full production levels at the Arun field in Indonesia following last year's curtailments due to security concerns, more than offset reduced weather-related demand in Europe and natural field decline in the U.S. Weather-related demand in Europe reduced total gas volumes by about 3%. Total oil and natural gas producible volumes increased 2% versus the first nine months of last year, as resumption of production at Arun and contributions from new projects and work programs more than offset natural field declines.
Earnings from U.S. upstream operations for the first nine months of 2002 were $1,759 million, a decrease of $1,747 million. Excluding a special item reported in 2002, earnings outside the U.S. were $4,820 million, $433 million lower than last year.
Downstream earnings decreased substantially from the first nine months of 2001, reflecting significantly lower refining margins in the U.S. and Europe, and further weakness in marketing margins. Improved refining operations provided a partial offset to the margin decline. Petroleum product sales of 7,670 kbd decreased 286 kbd from the first nine months of 2001, largely related to reduced refinery runs due to weak margins, and lower demand for aviation fuels and distillates.
U.S. downstream earnings were $290 million, down $1,353 million. Earnings outside the U.S. of $189 million were $1,376 million lower than last year.
Excluding special items of $175 million recorded in 2001, Chemicals earnings of $754 million for the first nine months of 2002 were $256 million higher than last year reflecting increased prime product sales volumes across all regions and higher margins. Sales volumes of 20,216 kt were 4% above last year's level.
Earnings from other operations totaled $360 million, a decrease of $29 million due primarily to the absence of Colombian coal operations which were sold in the first quarter of 2002. Corporate and financing expenses increased $308 million to $412 million, mainly reflecting higher pension expenses and lower interest income.
During the first nine months of 2002, Exxon Mobil Corporation purchased 93 million shares of its common stock for the treasury at a gross cost of $3,617 million. These purchases were to offset shares issued in conjunction with the company's benefit plans and programs and to reduce the number of shares outstanding.
Estimates of key financial and operating data follow. Financial data, except per share amounts, are expressed in millions of dollars.
ExxonMobil will discuss financial and operating results and other matters on a webcast at 12:00 p.m. (noon) central time on October 31, 2002. To listen to the event live or in archive, go to our website at www.exxonmobil.com.
Statements in this release relating to future plans, events, expectations or conditions are forward-looking statements. Actual results could differ materially due to changes in market conditions affecting the oil and gas industry, political events, changes in technical or operating conditions, and other factors including those discussed under the heading "Factors Affecting Future Results" on our website and in Item 1 of ExxonMobil's 2001 Form 10-K. We assume no duty to update these statements as of any future date.
EXXON MOBIL CORPORATION
THIRD QUARTER 2002
$ MILLIONS
Third Quarter Nine Months
2002 2001 2002 2001
FUNCTIONAL EARNINGS
Petroleum and natural gas
Upstream
United States 641 767 1,759 3,506
Non-U.S. 1,561 1,364 4,605 5,253
Downstream
United States 42 390 290 1,643
Non-U.S. 83 552 189 1,565
Total petroleum and natural gas $2,327 $3,073 $6,843 $11,967
Chemicals
United States 156 76 313 270
Non-U.S. 197 80 441 403
Other operations 121 120 360 389
Corporate and financing (76) (29) (412) (104)
Merger expenses (85) (140) (175) (325)
Regulatory divestitures 0 0 0 40
Net income $2,640 $3,180 $7,370 $12,640
Net income per common share $0.39 $0.46 $1.09 $1.84
Net income per common share
- assuming dilution $0.39 $0.46 $1.08 $1.82
OTHER FINANCIAL DATA
Total revenue $54,182 $52,113 $148,622 $165,597
Dividends on common stock
Total $1,552 $1,577 $4,672 $4,683
Per common share $0.23 $0.23 $0.69 $0.68
Millions of common shares
outstanding
At September 30 6,729 6,841
Average 6,740 6,852 6,767 6,883
Average-assuming dilution 6,787 6,924 6,824 6,957
Shareholders' equity at
September 30 $74,690 $73,825
Capital employed at
September 30 $89,432 $88,877
Income and other taxes
Income taxes 1,858 2,060 4,784 7,907
Excise taxes 5,783 5,316 16,224 15,836
All other taxes 8,942 8,924 26,369 26,382
Total taxes $16,583 $16,300 $47,377 $50,125
ExxonMobil's share of income
taxes of equity companies: $152 $128 $533 $526
EXXON MOBIL CORPORATION
THIRD QUARTER 2002
MERGER EFFECTS/SPECIAL ITEMS NOTED IN PRESS RELEASE
$ MILLIONS
Third Quarter Nine Months
2002 2001 2002 2001
Upstream
United States 0 0 0 0
Non-U.S. (215) 0 (215) 0
Chemicals
United States 0 0 0 100
Non-U.S. 0 0 0 75
Merger expenses (85) (140) (175) (325)
Regulatory divestitures 0 0 0 40
Total included in net income (300) (140) (390) (110)
EXXON MOBIL CORPORATION
THIRD QUARTER 2002
EARNINGS EXCLUDING MERGER EFFECTS/SPECIAL ITEMS
$ MILLIONS
Third Quarter Nine Months
2002 2001 2002 2001
FUNCTIONAL EARNINGS
Petroleum and natural gas
Upstream
United States 641 767 1,759 3,506
Non-U.S. 1,776 1,364 4,820 5,253
Downstream
United States 42 390 290 1,643
Non-U.S. 83 552 189 1,565
Total petroleum and natural gas $2,542 $3,073 $7,058 $11,967
Chemicals
United States 156 76 313 170
Non-U.S. 197 80 441 328
Other operations 121 120 360 389
Corporate and financing (76) (29) (412) (104)
Total $2,940 $3,320 $7,760 $12,750
Earnings per common share $0.44 $0.48 $1.15 $1.86
Earnings per common share
- assuming dilution $0.44 $0.48 $1.14 $1.84
EXXON MOBIL CORPORATION
THIRD QUARTER 2002
Third Quarter Nine Months
2002 2001 2002 2001
Net production of crude oil
and natural gas liquids,
thousands of barrels daily (kbd)
United States 650 690 689 711
Canada 348 322 340 328
Europe 552 649 588 660
Asia-Pacific 273 244 265 246
Africa 354 334 348 344
Other Non-U.S. 271 245 264 258
Worldwide 2,448 2,484 2,494 2,547
Natural gas production available
for sale, millions of cubic feet
daily (mcfd)
United States 2,351 2,427 2,405 2,605
Canada 1,020 1,044 1,036 1,000
Europe 3,079 3,188 4,023 4,343
Asia-Pacific 2,170 1,421 2,020 1,428
Other Non-U.S. 594 481 555 534
Worldwide 9,214 8,561 10,039 9,910
Petroleum product sales (kbd)
United States 2,724 2,755 2,705 2,719
Canada 596 596 583 579
Europe 2,034 2,126 2,023 2,078
Asia-Pacific 1,516 1,531 1,477 1,628
Other Non-U.S. 893 943 882 952
Worldwide 7,763 7,951 7,670 7,956
Gasolines, naphthas 3,253 3,242 3,160 3,149
Heating oils, kerosene, diesel 2,206 2,277 2,254 2,361
Aviation fuels 728 751 688 740
Heavy fuels 577 649 579 682
Specialty products 999 1,032 989 1,024
Total 7,763 7,951 7,670 7,956
EXXON MOBIL CORPORATION
THIRD QUARTER 2002
Third Quarter Nine Months
2002 2001 2002 2001
Refinery throughput (kbd)
United States 1,847 1,848 1,875 1,826
Canada 467 489 448 452
Europe 1,529 1,583 1,537 1,548
Asia-Pacific 1,433 1,412 1,356 1,456
Other Non-U.S. 242 273 230 284
Worldwide 5,518 5,605 5,446 5,566
Chemicals product revenue
($ millions)
United States $2,249 $1,798 $6,466 $6,432
Non-U.S. $3,154 $2,703 $8,496 $8,420
Worldwide $5,403 $4,501 $14,962 $14,852
Chemicals prime product sales,
thousands of metric tons (kt)
United States 2,849 2,685 8,603 8,376
Non-U.S. 3,862 3,772 11,613 11,032
Worldwide 6,711 6,457 20,216 19,408
EXXON MOBIL CORPORATION
THIRD QUARTER 2002
$ MILLIONS
Third Quarter Nine Months
2002 2001 2002 2001
Capital and Exploration Expenditures
Upstream
United States 617 655 1,770 1,752
Non-U.S. 2,045 1,625 5,693 4,378
Total 2,662 2,280 7,463 6,130
Downstream
United States 257 196 656 685
Non-U.S. 377 337 955 864
Total 634 533 1,611 1,549
Chemicals, other operations, and
administrative
United States 141 151 472 350
Non-U.S. 126 134 384 419
Total 267 285 856 769
Worldwide $3,563 $3,098 $9,930 $8,448
Exploration expenses charged to
income included above
Consolidated affiliates
United States 49 38 163 105
Non-U.S. 107 275 430 744
Equity companies - ExxonMobil share
Non-U.S. 0 4 6 8
Worldwide $156 $317 $599 $857
EXXON MOBIL CORPORATION
NET INCOME
$ Millions Per Common Share
1998 - First Quarter 2,525 0.36
- Second Quarter 2,262 0.32
- Third Quarter 1,909 0.28
- Fourth Quarter 1,378 0.19
Year $8,074 $1.15
1999 - First Quarter 1,484 0.21
- Second Quarter 1,954 0.29
- Third Quarter 2,188 0.31
- Fourth Quarter 2,284 0.33
Year $7,910 $1.14
2000 - First Quarter 3,480 0.50
- Second Quarter 4,530 0.66
- Third Quarter 4,490 0.63
- Fourth Quarter 5,220 0.76
Year $17,720 $2.55
2001 - First Quarter 5,000 0.72
- Second Quarter 4,460 0.66
- Third Quarter 3,180 0.46
- Fourth Quarter 2,680 0.39
Year $15,320 $2.23
2002 - First Quarter 2,090 0.30
- Second Quarter 2,640 0.40
- Third Quarter 2,640 0.39
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