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Exxon Mobil Corporation Announces Estimated Second Quarter 2005 Results

Posted on: Thursday, 28 July 2005, 09:00 CDT

Exxon Mobil Corporation (NYSE:XOM):

Second Quarter First Half 2005 2004 2005 2004 Net Income $ Millions 7,640 5,790 15,500 11,230 $ Per Common Share Assuming Dilution 1.20 0.88 2.42 1.71 Earnings Excluding Special Items $ Millions 7,840 5,790 15,240 11,230 $ Per Common Share Assuming Dilution 1.23 0.88 2.38 1.71 Capital and Exploration Expenditures - $ Millions 4,537 3,617 7,954 7,018

Exxon Mobil Corporation (NYSE:XOM) today reported record second quarter results. Earnings excluding special items of $7,840 million ($1.23 per share) increased $2,050 million from the second quarter of 2004. Second quarter net income included a special charge of $200 million for the Allapattah lawsuit provision. Including this charge, net income of $7,640 million ($1.20 per share) increased by $1,850 million. Record first half net income of $15,500 million ($2.42 per share) increased by 38% versus the first half of 2004.

Capital and exploration expenditures of $4,537 million in the second quarter of 2005 were up $920 million compared with last year.

ExxonMobil's Chairman Lee R. Raymond commented as follows:

"Compared with last year's second quarter, ExxonMobil's second quarter 2005 earnings excluding special items of $7,840 million increased $2,050 million and are the highest second quarter ever for the Corporation. Including the special charge for the Allapattah lawsuit provision, net income increased $1,850 million.

"Upstream earnings were $4,908 million, an increase of $1,062 million from second quarter 2004 reflecting continued strength in crude and natural gas prices.

"Downstream earnings, excluding Allapattah, were $2,221 million, an increase of $714 million from last year due to improved worldwide refining conditions and higher refinery throughput.

"Chemical earnings were $814 million, up $207 million from second quarter 2004 due to higher margins.

"ExxonMobil's net income for the first half of 2005 was a record $15,500 million, up $4,270 million from the first half of 2004. Excluding special items, earnings increased by $4,010 million reflecting improvements in all areas of the business.

"Exxon Mobil continued its active investment program in the second quarter, spending $4,537 million on capital and exploration projects, compared with $3,617 million last year, with continued strong levels of Upstream spending. Our disciplined project management systems remain a competitive advantage. ExxonMobil-operated projects that are key to future volume growth continue to be on budget and on or ahead of schedule.

"During the second quarter, the Corporation purchased $3.7 billion of shares including $3.5 billion to reduce common stock outstanding, a $1.0 billion increase from the $2.5 billion of share reduction purchases in the first quarter. As a consequence of the continued strengthening of our financial position, share purchases to reduce shares outstanding will be increased to $5.0 billion in the third quarter."

Additional comments on earnings for the major operating segments follow:

Second Quarter 2005 vs. Second Quarter 2004

Upstream earnings were $4,908 million, up $1,062 million from the second quarter 2004 reflecting strong crude and natural gas prices partly offset by lower production.

On an oil-equivalent basis, production decreased by 4.3% from the second quarter of 2004. Excluding divestment and entitlement effects, production decreased by 2%. Our mature fields continue to perform as expected and for those fields we operate, maintenance has been as anticipated.

Liquids production of 2,466 kbd (thousands of barrels per day) was 115 kbd lower than the second quarter of 2004. Higher production in West Africa was more than offset by mature field decline, maintenance activities, as well as entitlement and divestment impacts.

Second quarter natural gas production decreased to 8,686 mcfd (millions of cubic feet per day), compared with 9,061 mcfd last year. Higher volumes in Qatar were more than offset by mature field decline, maintenance activities, and the impact of divestments.

Earnings from U.S. Upstream operations were $1,389 million, $152 million higher than last year's second quarter. Non-U.S. Upstream earnings of $3,519 million were up $910 million from 2004.

Downstream earnings, excluding the $200 million Allapattah charge, were $2,221 million, up $714 million from the second quarter of 2004, reflecting improved refining margins and higher refinery throughput. Petroleum product sales were 8,259 kbd, 236 kbd higher than last year's second quarter.

U.S. Downstream earnings, excluding Allapattah, were $1,199 million, $292 million higher than last year's second quarter. Non-U.S. Downstream earnings were up $422 million at $1,022 million.

Chemical earnings were $814 million, up $207 million from the same quarter a year ago due to improved margins partly offset by lower volumes. Prime product sales of 6,592 kt (thousands of metric tons) were down 338 kt from last year's second quarter.

Corporate and financing expenses of $103 million were lower by $67 million mainly due to higher interest income.

During the second quarter of 2005, Exxon Mobil Corporation purchased 64 million shares of its common stock for the treasury at a gross cost of $3,713 million. These purchases included $3.5 billion to reduce the number of shares outstanding and the balance to offset shares issued in conjunction with company benefit plans and programs. Shares outstanding were reduced from 6,366 million at the end of the first quarter to 6,305 million at the end of the second quarter. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.

First Half 2005 vs. First Half 2004

Record net income of $15,500 million ($2.42 per share) for the first half of 2005 increased $4,270 million from the first half of 2004. Net income for the first half of 2005 included a $460 million positive impact (Downstream -- $310 million; Chemical -- $150 million) from the sale of the Corporation's stake in China Petroleum and Chemical Corporation ("Sinopec") and a special charge in the Downstream of $200 million for the Allapattah lawsuit provision. Excluding these impacts, earnings for the first half of 2005 increased by $4,010 million.

Upstream earnings of $9,962 million increased $2,103 million from the first half of 2004 due to higher liquids and natural gas realizations partly offset by lower production.

On an oil-equivalent basis, production decreased by 4.5% from the first half of last year. Excluding divestment and entitlement effects, production decreased by 3% from the first half of last year. Our mature fields continue to perform as expected and for those fields we operate, maintenance has been as anticipated.

Liquids production of 2,504 kbd decreased by 104 kbd from 2004. Higher production from new fields in West Africa and the North Sea was more than offset by mature field decline, maintenance, as well as the impact of entitlements and divestments.

First half natural gas production of 9,730 mcfd decreased 545 mcfd from 2004. Higher volumes in Qatar were more than offset by mature field decline, maintenance, and the impact of divestments.

Earnings from U.S. Upstream operations for the first half of 2005 were $2,742 million, an increase of $351 million. Earnings outside the U.S. were $7,220 million, $1,752 million higher than last year.

Downstream earnings, excluding special items, of $3,364 million increased by $853 million from the first half of 2004 reflecting stronger worldwide refining margins and higher refinery throughput partly offset by weak marketing margins. Petroleum product sales of 8,244 kbd compared with 8,074 kbd in the first half of 2004.

U.S. Downstream earnings, excluding Allapattah, were $1,844 million, up $545 million. Non-U.S. Downstream earnings, excluding Sinopec, of $1,520 million were $308 million higher than last year.

Chemical earnings, excluding Sinopec, of $2,096 million were up $925 million from the first half of 2004 due to improved margins partly offset by lower volumes. Prime product sales of 13,530 kt were down 192 kt from 2004.

Corporate and financing expenses of $182 million decreased by $129 million mainly due to higher interest income.

Gross share purchases in the first half of 2005 were $7,337 million which reduced shares outstanding by 1.5%.

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 10 a.m. central time on July 28, 2005. 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, projections, events, or conditions are forward-looking statements. Actual results, including production growth and capital spending, could differ materially due to changes in long-term oil or gas prices or other market conditions affecting the oil and gas industry; political events or disturbances; reservoir performance; changes in OPEC quotas; timely completion of development projects; 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 2004 Form 10-K. We assume no duty to update these statements as of any future date.

Consistent with previous practice, the second quarter press release includes both net income and earnings excluding special items. In 2005, there were special items reported in the first and second quarters. Earnings that exclude the aforementioned items are a non-GAAP financial measure and are included to help facilitate comparisons of base business performance across periods. A reconciliation to net income is shown in Attachment II. Further information on ExxonMobil's frequently used financial and operating measures is contained on pages 28 and 29 in the 2004 Form 10-K and is also available through the Investor Information section of our website at www.exxonmobil.com.

ATTACHMENT I EXXON MOBIL CORPORATION SECOND QUARTER 2005 (millions of dollars, except per share amounts) Second Quarter First Half 2005 2004 2005 2004 EARNINGS / EARNINGS PER SHARE Total revenues and other income 88,568 70,693 170,619 138,295 Total costs and other deductions 75,809 61,213 144,957 119,853 Income before income taxes $12,759 $9,480 $25,662 $18,442 Income taxes 5,119 3,690 10,162 7,212 Net income (U.S. GAAP) $7,640 $5,790 $15,500 $11,230 Net income per common share (dollars) $1.21 $0.89 $2.44 $1.72 Net income per common share - assuming dilution (dollars) $1.20 $0.88 $2.42 $1.71 OTHER FINANCIAL DATA Dividends on common stock Total $1,840 $1,763 $3,568 $3,405 Per common share $0.29 $0.27 $0.56 $0.52 Millions of common shares outstanding At June 30 6,305 6,506 Average - assuming dilution 6,370 6,547 6,394 6,563 Shareholders' equity at June 30 $104,596 $93,535 Capital employed at June 30 $115,711 $105,852 Income taxes 5,119 3,690 10,162 7,212 Excise taxes 7,515 6,514 14,753 12,930 All other taxes 11,212 10,542 22,156 21,395 Total taxes $23,846 $20,746 $47,071 $41,537 ExxonMobil's share of income taxes of equity companies $269 $251 $762 $640 ATTACHMENT II EXXON MOBIL CORPORATION SECOND QUARTER 2005 (millions of dollars) Second Quarter First Half 2005 2004 2005 2004 Net Income (U.S. GAAP) Upstream United States 1,389 1,237 2,742 2,391 Non-U.S. 3,519 2,609 7,220 5,468 Downstream United States 999 907 1,644 1,299 Non-U.S. 1,022 600 1,830 1,212 Chemical United States 343 148 835 266 Non-U.S. 471 459 1,411 905 Corporate and financing (103) (170) (182) (311) Net income (U.S. GAAP) $7,640 $5,790 $15,500 $11,230 Special Items Downstream United States (200) 0 (200) 0 Non-U.S. 0 0 310 0 Chemical Non-U.S. 0 0 150 0 Corporate total ($200) $0 $260 $0 Earnings Excluding Special Items Upstream United States 1,389 1,237 2,742 2,391 Non-U.S. 3,519 2,609 7,220 5,468 Downstream United States 1,199 907 1,844 1,299 Non-U.S. 1,022 600 1,520 1,212 Chemical United States 343 148 835 266 Non-U.S. 471 459 1,261 905 Corporate and financing (103) (170) (182) (311) Corporate total $7,840 $5,790 $15,240 $11,230 ATTACHMENT III EXXON MOBIL CORPORATION SECOND QUARTER 2005 Second Quarter First Half 2005 2004 2005 2004 Net production of crude oil and natural gas liquids, thousands of barrels daily (kbd) United States 500 576 520 587 Canada 355 356 356 362 Europe 554 608 565 608 Asia Pacific 173 198 173 207 Africa 583 542 590 543 Other Non-U.S. 301 301 300 301 Worldwide 2,466 2,581 2,504 2,608 Natural gas production available for sale, millions of cubic feet daily (mcfd) United States 1,809 1,987 1,853 2,032 Canada 913 974 918 992 Europe 3,790 3,756 4,773 4,895 Asia Pacific 1,333 1,590 1,322 1,590 Other Non-U.S. 841 754 864 766 Worldwide 8,686 9,061 9,730 10,275 Oil-equivalent production (koebd)(a) 3,914 4,091 4,126 4,320 (a) Gas converted to oil-equivalent at 6 million cubic feet = 1 thousand barrels ATTACHMENT III (continued) EXXON MOBIL CORPORATION SECOND QUARTER 2005 Second Quarter First Half 2005 2004 2005 2004 Petroleum product sales (kbd) United States 2,986 2,865 2,929 2,811 Canada 608 584 614 599 Europe 2,128 2,106 2,092 2,117 Asia Pacific 1,722 1,585 1,783 1,655 Other Non-U.S. 815 883 826 892 Worldwide 8,259 8,023 8,244 8,074 Gasolines, naphthas 3,343 3,302 3,244 3,229 Heating oils, kerosene, diesel 2,461 2,360 2,575 2,505 Aviation fuels 720 679 706 669 Heavy fuels 675 649 696 646 Specialty products 1,060 1,033 1,023 1,025 Total 8,259 8,023 8,244 8,074 Refinery throughput (kbd) United States 1,906 1,854 1,883 1,818 Canada 467 441 474 459 Europe 1,668 1,671 1,617 1,644 Asia Pacific 1,413 1,314 1,472 1,363 Other Non-U.S. 273 309 292 309 Worldwide 5,727 5,589 5,738 5,593 Chemical prime product sales, thousands of metric tons (kt) United States 2,664 2,925 5,502 5,728 Non-U.S. 3,928 4,005 8,028 7,994 Worldwide 6,592 6,930 13,530 13,722 ATTACHMENT IV EXXON MOBIL CORPORATION SECOND QUARTER 2005 (millions of dollars) Second Quarter First Half 2005 2004 2005 2004 Capital and Exploration Expenditures Upstream United States 531 464 972 919 Non-U.S. 3,147 2,376 5,518 4,625 Total 3,678 2,840 6,490 5,544 Downstream United States 201 196 349 398 Non-U.S. 448 428 752 736 Total 649 624 1,101 1,134 Chemical United States 73 64 128 115 Non-U.S. 102 84 195 165 Total 175 148 323 280 Other 35 5 40 60 Worldwide $4,537 $3,617 $7,954 $7,018 Exploration expenses charged to income included above Consolidated affiliates United States 53 46 74 85 Non-U.S. 155 164 302 295 Equity companies - ExxonMobil share United States 0 0 0 0 Non-U.S. 7 0 12 4 Worldwide $215 $210 $388 $384 ATTACHMENT V EXXON MOBIL CORPORATION NET INCOME $ Millions Per Common Share 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 - Fourth Quarter 4,090 0.60 Year $11,460 $1.69 2003 - First Quarter 7,040 1.05 - Second Quarter 4,170 0.63 - Third Quarter 3,650 0.55 - Fourth Quarter 6,650 1.01 Year $21,510 $3.24 2004 - First Quarter 5,440 0.83 - Second Quarter 5,790 0.89 - Third Quarter 5,680 0.88 - Fourth Quarter 8,420 1.31 Year $25,330 $3.91 2005 - First Quarter 7,860 1.23 - Second Quarter 7,640 1.21

Source: Business Wire

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