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ExxonMobil earns $23 Billion in 2021, initiates $10 billion share repurchase program

February 1, 2022 5:15 AM
Business Wire

IRVING, Texas – Exxon Mobil Corporation (NYSE:XOM):

Third
Fourth Quarter Quarter Twelve Months
2021 2020 2021 2021 2020
Results Summary
(Dollars in millions, except per share data)
Earnings/(Loss) (U.S. GAAP) 8,870 (20,070) 6,750 23,040 (22,440)
Earnings/(Loss) Per Common Share
Assuming Dilution 2.08 (4.70) 1.57 5.39 (5.25)
Identified Items Per Common Share
Assuming Dilution 0.03 (4.73) (0.01) 0.01 (4.92)
Earnings/(Loss) Excluding Identified Items
Per Common Share Assuming Dilution 2.05 0.03 1.58 5.38 (0.33)
Capital and Exploration Expenditures 5,808 4,771 3,851 16,595 21,374

Exxon Mobil Corporation today announced fourth-quarter 2021 earnings of $8.9 billion, or $2.08 per share assuming dilution, resulting in full-year earnings of $23 billion, or $5.39 per share assuming dilution. Capital and exploration expenditures were $5.8 billion in the fourth quarter and $16.6 billion for the full year 2021, in line with guidance.

“Our effective pandemic response, focused investments during the down-cycle, and structural cost savings positioned us to realize the full benefits of the market recovery in 2021,” said Darren Woods, chairman and chief executive officer. “Our new streamlined business structure is another example of the actions we are taking to further strengthen our competitive advantages and grow shareholder value. We’ve made great progress in 2021 and our forward plans position us to lead in cash flow and earnings growth, operating performance, and the energy transition.”

Fourth-Quarter and Full-Year Business Highlights

Upstream

  • Average realizations for crude oil increased 8% from the third quarter. Natural gas realizations increased 63% from the prior quarter.
  • Oil-equivalent production in the fourth quarter was 3.8 million barrels per day. Excluding entitlement effects, divestments, and government mandates, oil-equivalent production increased 2% versus the prior-year quarter, and was also up 2% versus the prior year, driven by demand recovery.
  • In 2021, production volumes in the Permian increased nearly 100,000 oil-equivalent barrels per day, with improved capital efficiency. The focus remains on continuing to grow free cash flow by increasing recovery through efficiency gains and technology applications.
  • ExxonMobil continued to progress its low cost of supply deepwater developments in Guyana, with estimated recoverable resources increasing to approximately 10 billion oil-equivalent barrels, supported by six commercial discoveries in 2021. The Liza Unity floating production, storage, and offloading vessel arrived in Guyanese waters in October 2021.
  • The sale of certain United Kingdom North Sea assets to Neo Energy was completed in December 2021.

Downstream

  • Global refining margins improved from the third quarter with increased transportation demand driven by easing mobility restrictions, partly offset by higher energy prices in Europe. Fourth-quarter margins improved to the low end of the 10-year range, although jet demand remains challenged.
  • Refining throughput in the quarter was the highest since 2013, up 2% from the third quarter, allowing the company to capture the benefit of improved industry margins.
  • Lubricants earnings were a full-year record, as strong reliability performance enabled full capture of robust basestocks margins.
  • The company acquired a 49.9% stake in BioJet AS, a Norwegian biofuels company that plans to convert forestry and wood-based construction waste into lower-emissions advanced biofuels, providing ExxonMobil the opportunity to purchase as much as 3 million barrels of lower-emission biofuel products per year.

Chemical

  • Fourth-quarter industry margins declined from historically high levels to the middle of the 10-year range due to increased industry supply and higher feed and energy costs.
  • Annual earnings of $7.8 billion were a full-year record, reflecting robust industry demand, strong reliability, structural cost reductions, and the company’s global supply and logistics advantages.
  • High-value, performance products grew 7% and the organization advanced key projects supporting future growth. The Corpus Christi Chemical Complex started up ahead of schedule and under budget, and a final investment decision was reached to proceed with a chemical complex in the Dayawan Petrochemical Industrial Park in Huizhou, Guangdong Province in China.
  • ExxonMobil announced the acquisition of Materia, Inc., a technology company that pioneered the development of a Nobel prize-winning technology for manufacturing high-performance structural polymers. The innovative materials can be used in a number of applications, including wind turbine blades, electric vehicle parts, sustainable construction, and anticorrosive coatings.
  • The company made its first commercial sale of certified circular polymer from recycled plastic, manufactured in Baytown, Texas, using proprietary advanced recycling technology. The advanced recycling operation in Baytown will be among the largest in North America with initial planned capacity to recycle 30,000 metric tons of plastic waste per year.
  • ExxonMobil completed the sale of its global Santoprene™ business to Celanese in December for a total price of $1.15 billion.

Leading the Drive to Net Zero

  • The company expects to meet its 2025 emission-reduction plans four years ahead of schedule. This includes a 15-20% reduction in greenhouse gas intensity of upstream operations; a 40-50% reduction in methane intensity; and a 35-45% reduction in flaring intensity across the corporation versus 2016.
  • In the fourth quarter, the company announced new emission-reduction plans through 2030, which include plans to achieve Scope 1 and 2 net zero greenhouse gas emissions by 2030 in the Permian Basin, and are consistent with Paris-aligned pathways, the U.S. and European Union’s Global Methane Pledge, and the U.S. Methane Emissions Reduction Action Plan. The company plans to invest $15 billion in lower-emission solutions to both reduce its Scope 1 and 2 greenhouse gas emissions and support customers in decarbonizing, with a focus on carbon capture and storage, hydrogen and biofuels.
  • In January, ExxonMobil announced its ambition to achieve net zero emissions from operated assets by 2050, backed by a comprehensive approach to develop detailed emission-reduction roadmaps for major operated assets. This ambition applies to Scope 1 and 2 greenhouse gas emissions and builds on the company’s 2030 emission-reduction plans. The Company’s roadmap approach identifies greenhouse gas emission-reduction opportunities for individual operated assets and the investment and future policy needs required to achieve net zero.
  • ExxonMobil and Scepter, Inc. agreed to work together to deploy advanced satellite technology and proprietary data processing platforms to detect methane emissions at a global scale. Initially focused on Permian Basin operations, the agreement has the potential to redefine methane detection and mitigation efforts and could contribute to broader satellite-based emission-reduction efforts across a dozen global industries, including energy, agriculture, manufacturing and transportation.
  • Since establishing the Low Carbon Solutions business in early 2021, ExxonMobil announced progress on 10 carbon capture and storage opportunities. The initiatives are in Houston, Texas; LaBarge, Wyoming; Edmonton, Canada; St. Fergus, U.K.; Southampton, U.K.; Fife, U.K.; Normandy, France; Malaysia; Indonesia; and Russia. These are in addition to previously announced projects in Qatar; Antwerp, Belgium; Rotterdam, Netherlands; and Australia.

Capital Allocation and Structural Cost Improvement

  • In the fourth quarter, the company paid down debt by an additional $9 billion, bringing the full-year reduction to $20 billion, strengthening the balance sheet and returning debt to pre-pandemic levels.
  • The company captured an additional $1.9 billion in structural savings in 2021, increasing total savings to roughly $5 billion relative to 2019. The company is on pace to exceed total annual structural cost reductions of $6 billion by 2023. Building on this work, the company recently announced additional efforts to streamline its business structure to enhance effectiveness, grow value, and reduce costs. These changes will more fully leverage global functional capabilities, improve line of site to markets, and enhance resource allocation to the highest corporate priorities.
  • During the fourth quarter, ExxonMobil’s board of directors approved the company’s corporate plan for 2022, with capital spending anticipated to be in the range of $21 billion to $24 billion.
  • Beginning in the first quarter of 2022, the company initiated share repurchases associated with the previously announced buyback program of up to $10 billion over the next 12 to 24 months.
Earnings and Volume Summary
Millions of Dollars 4Q 4Q
(unless noted) 2021 2020 Change Comments
Upstream
U.S. 1,768 (16,803) +18,571 Higher prices; identified items (+16,514; impairments)
Non-U.S. 4,317 (1,729) +6,046 Higher prices; identified items (+2,220; impairments +1,714, asset sale +459, tax items +297, contractual provisions -250)
Total 6,085 (18,532) +24,617 Price +5,880, volume/mix -170, expenses -140, other +320, identified items +18,730
Production (koebd) 3,816 3,689 +127 Liquids +60 kbd: lower government mandates and net growth, partly offset by lower entitlements and divestments

Gas +399 mcfd: less downtime and higher entitlements, partly offset by divestments
Downstream
U.S. 913 (514) +1,427 Higher margins driven by stronger industry refining conditions, favorable LIFO inventory impact, and reduced expenses, partly offset by lower volumes
Non-U.S. 554 (697) +1,251 Higher margins reflecting stronger industry refining conditions, higher volumes, and reduced expenses, partly offset by unfavorable LIFO inventory impact; identified items (+520; impairments +258, tax items +262)
Total 1,467 (1,211) +2,678 Margin +2,060, volume +60, expenses +150, other -110, identified items +520
Petroleum Product Sales (kbd) 5,391 4,833 +558
Chemical
U.S. 1,322 461 +861 Higher margins partly offset by increased expenses on higher turnaround, maintenance and project activity; identified items (+494; asset sale)
Non-U.S. 599 230 +369 Higher margins, favorable LIFO inventory impact, and lower expenses; identified items (+158; mainly asset sale)
Total 1,921 691 +1,230 Margin +580, expenses -90, volume -10, other +100, identified items +650
Prime Product Sales (kt) 6,701 6,643 +58
Corporate and financing (603) (1,018) +415 Identified items +345 (mainly prior year severance)
Earnings and Volume Summary
Millions of Dollars 4Q 3Q
(unless noted) 2021 2021 Change Comments
Upstream
U.S. 1,768 869 +899 Higher prices and favorable unsettled derivative impacts; identified items (-263; impairments)
Non-U.S. 4,317 3,082 +1,235 Higher prices, favorable unsettled derivative impacts, higher gas demand, and favorable one-time asset management items, partly offset by seasonally higher expenses; identified items (-280; impairments -489, asset sale +459, contractual provisions -250)
Total 6,085 3,951 +2,134 Price +2,230, volume +290, expenses -320, other +470, identified items -540
Production (koebd) 3,816 3,665 +151 Liquids +72 kbd: primarily lower government mandates

Gas +474 mcfd: seasonally higher demand and entitlement impacts
Downstream
U.S. 913 663 +250 Higher marketing-driven margins, higher volumes, and favorable one-time items, partly offset by seasonally higher expenses
Non-U.S. 554 592 -38 Favorable unsettled derivative impacts more than offset by unfavorable one-time items and seasonally higher expenses
Total 1,467 1,255 +212 Margin +490, volume +80, expenses -250, other -110
Petroleum Product Sales (kbd) 5,391 5,327 +64
Chemical
U.S. 1,322 1,183 +139 Lower margins and higher maintenance, turnaround and project expenses; identified items (+494; asset sale)
Non-U.S. 599 957 -358 Lower margins, seasonally higher expenses, and unfavorable foreign exchange; identified items (+136; asset sale)
Total 1,921 2,140 -219 Margin -680, expenses -110, volume -30, other -30, identified items +630
Prime Product Sales (kt) 6,701 6,672 +29
Corporate and financing (603) (596) -7
Earnings and Volume Summary
Millions of Dollars Full Year Full Year
(unless noted) 2021 2020 Change Comments
Upstream
U.S. 3,663 (19,385) +23,048 Higher prices, reduced expenses, and increased liquids volumes; identified items (+16,829; impairments)
Non-U.S. 12,112 (645) +12,757 Higher prices and favorable one-time tax items, partly offset by lower liquids volumes driven by entitlement effects; identified items (+2,322; impairments +1,755, asset sale +459, tax +297, inventory valuation +61, contractual provisions -250)
Total 15,775 (20,030) +35,805 Price +15,930, volume -340, expenses +390, other +680, identified items +19,150
Production (koebd) 3,712 3,761 -49 Liquids -60 kbd: higher demand reflecting the absence of economic curtailments, and growth, more than offset by lower entitlements, decline and divestments

Gas +66 mcfd: higher demand, partly offset by divestments and Groningen production limit
Downstream
U.S. 1,314 (852) +2,166 Higher margins driven by improved industry refining conditions and reduced expenses
Non-U.S. 791 (225) +1,016 Reduced expenses and higher volumes, partly offset by unfavorable foreign exchange and LIFO impacts; identified items (+855; impairments +593, tax items +262)
Total 2,105 (1,077) +3,182 Margin +1,920, volume +100, expenses +560, other -260, identified items +860
Petroleum Product Sales (kbd) 5,162 4,895 +267
Chemical
U.S. 4,502 1,277 +3,225 Higher margins and increased volumes; identified items (+584; mainly asset sale)
Non-U.S. 3,294 686 +2,608 Higher margins, favorable foreign exchange, and reduced expenses; identified items (+160; mainly asset sale)
Total 7,796 1,963 +5,833 Margin +4,480, volume +250, expenses +80, other +280, identified items +740
Prime Product Sales (kt) 26,332 25,449 +883
Corporate and financing (2,636) (3,296) +660 Identified items +297 (mainly prior year severance), lower financing costs +191
Cash Flow from Operations and Asset Sales excluding Working Capital
Millions of Dollars 4Q Full Year
2021 2021 Notes
Net income (loss) including noncontrolling interests 9,079 23,598 Including noncontrolling interests of $209 million in the quarter and $558 million for the full year
Depreciation 5,661 20,607
Changes in operational working capital 1,930 4,162
Other 454 (238)
Cash Flow from Operating 17,124 48,129
Activities (U.S. GAAP)
Asset sales 2,601 3,176
Cash Flow from Operations 19,725 51,305
and Asset Sales
Changes in operational working capital (1,930) (4,162)
Cash Flow from Operations 17,795 47,143
and Asset Sales excluding Working Capital

ExxonMobil will discuss financial and operating results and other matters during a webcast at 8:30 a.m. Central Time on February 1, 2022. To listen to the event or access an archived replay, please visit www.exxonmobil.com.

[expand title=”Advisories & Contact”]Cautionary Statement

Outlooks, projections, descriptions of strategic, operating, and financial plans and objectives, statements of future ambitions and goals, and other statements of future events or conditions in this release, are forward-looking statements. Similarly, the emission-reduction roadmaps are dependent on future market factors, such as continued technological progress and policy support, and represent forward-looking statements. Actual future results, including financial and operating performance; total capital expenditures and mix, including allocations of capital to low carbon solutions; cost reductions and efficiency gains, including the ability to meet or exceed announced cost and expense reduction objectives; plans to reduce future emissions and emissions intensity; timing and outcome of projects to capture and store CO2; timing and outcome of biofuel and plastic waste recycling projects; cash flow, dividends and shareholder returns, including the timing and amounts of share repurchases; future debt levels and credit ratings; business and project plans, timing, costs, capacities and returns; achievement of ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050; achievement of plans to reach Scope 1 and 2 net zero in Upstream Permian Basin operated assets by 2030; and resource recoveries and production rates could differ materially due to a number of factors. These include global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market conditions that impact prices and differentials for our products; actions of competitors and commercial counterparties; the outcome of commercial negotiations, including final agreed terms and conditions; the ability to access short- and long-term debt markets on a timely and affordable basis; the ultimate impacts of COVID-19, including the extent and nature of further outbreaks and the effects of government responses on people and economies; reservoir performance; the outcome of exploration projects; timely completion of development and other construction projects; final management approval of future projects and any changes in the scope, terms, or costs of such projects as approved; changes in law, taxes, or regulation including environmental regulations, trade sanctions, and timely granting of governmental permits and certifications; government policies and support and market demand for low carbon technologies; war, and other political or security disturbances; opportunities for potential investments or divestments and satisfaction of applicable conditions to closing, including regulatory approvals; the capture of efficiencies within and between business lines and the ability to maintain near-term cost reductions as ongoing efficiencies; unforeseen technical or operating difficulties and unplanned maintenance; the development and competitiveness of alternative energy and emission reduction technologies; the results of research programs and the ability to bring new technologies to commercial scale on a cost-competitive basis; and other factors discussed under Item 1A. Risk Factors of ExxonMobil’s 2020 Form 10-K.

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 for 2021 periods is shown on page 7 and for 2021 and 2020 periods in Attachment V.

This press release also includes cash flow from operations and asset sales excluding working capital. We believe it is useful for investors to consider these numbers in comparing the underlying performance of our business across periods when there are significant period-to-period differences in the amount of changes in working capital. A reconciliation to net cash provided by operating activities for 2021 periods is shown on page 7 and for 2021 and 2020 periods in Attachment V.

This press release also includes earnings/(loss) excluding identified items, which are earnings/(loss) excluding individually significant non-operational events with an absolute corporate total earnings impact of at least $250 million in a given quarter. The earnings/(loss) impact of an identified item for an individual segment may be less than $250 million when the item impacts several periods or several segments. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The Corporation believes this view provides investors increased transparency into business results and trends and provides investors with a view of the business as seen through the eyes of management. Earnings excluding Identified Items is not meant to be viewed in isolation or as a substitute for net income (loss) attributable to ExxonMobil as prepared in accordance with U.S. GAAP. A reconciliation to earnings is shown for 2021 and 2020 periods in Attachments II-a and II-b. Corresponding per share amounts are shown on page 1 and in Attachment II-a, including a reconciliation to earnings/(loss) per common share – assuming dilution (U.S. GAAP).

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 as part of the Estimated Key Financial and Operating Data in Attachment I.

This press release also references free cash flow. Free cash flow is the sum of net cash provided by operating activities and net cash flow used in investing activities. This measure is useful when evaluating cash available for financing activities, including shareholder distributions, after investment in the business. Free cash flow is not meant to be viewed in isolation or as a substitute for net cash provided by operating activities.

This press release also references structural cost reductions (also “structural cost savings”, “structural savings”, “structural cost improvement”). Structural cost reductions describe decreases in the below expenses as a result of operational efficiencies, workforce reductions and other cost saving measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative annual structural cost reductions totaled $4.9 billion, of which $1.9 billion was achieved in 2021.

Contacts

ExxonMobil
Media Relations, 972-940-6007[/expand]

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