- Global oversupply and COVID-related demand impacts drive second quarter loss of $1.1 billion
- On track to meet or exceed 2020 capital and cash operating spend reduction targets
- Supporting COVID-19 response by reconfiguring operations to increase production of hand sanitizer and raw materials for protective equipment for first responders
IRVING, Texas – Exxon Mobil Corporation (NYSE:XOM):
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First |
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Second Quarter |
Quarter |
First Half |
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2020 |
2019 |
2020 |
2020 |
2019 |
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Results Summary |
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(Dollars in millions, except per share data) |
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Earnings/(Loss) (U.S. GAAP) |
(1,080 |
) |
3,130 |
(610 |
) |
(1,690 |
) |
5,480 |
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Earnings/(Loss) Per Common Share |
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Assuming Dilution |
(0.26 |
) |
0.73 |
(0.14 |
) |
(0.40 |
) |
1.28 |
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Identified Items Per Common Share |
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Assuming Dilution |
0.44 |
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0.12 |
(0.67 |
) |
(0.23 |
) |
0.12 |
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Earnings/(Loss) Excluding Identified Items |
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Per Common Share Assuming Dilution |
(0.70 |
) |
0.61 |
0.53 |
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(0.17 |
) |
1.16 |
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Capital and Exploration Expenditures |
5,327 |
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8,079 |
7,143 |
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12,470 |
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14,969 |
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Exxon Mobil Corporation today announced an estimated second quarter 2020 loss of $1.1 billion, or $0.26 per share assuming dilution. Results included a positive noncash inventory valuation adjustment from rising commodity prices of $1.9 billion, or $0.44 per share assuming dilution. Capital and exploration expenditures were $5.3 billion, nearly $2 billion lower than first quarter reflecting previously announced spend reductions.
Oil-equivalent production was 3.6 million barrels per day, down 7 percent from the second quarter of 2019, including a 3 percent decrease in liquids and a 12 percent decrease in natural gas, mainly reflecting the impacts of COVID-19 on global demand including economic and government mandated curtailments.
“The global pandemic and oversupply conditions significantly impacted our second quarter financial results with lower prices, margins, and sales volumes. We responded decisively by reducing near-term spending and continuing work to improve efficiency by leveraging recent reorganizations,” said Darren W. Woods, chairman and chief executive officer. “The progress we’ve made to date gives us confidence that we will meet or exceed our cost-reduction targets for 2020 and provides a strong foundation for further efficiencies.”
“We have increased debt to a level we feel is appropriate to provide liquidity, given market uncertainties. Based on current projections, we do not plan to take on any additional debt.”
The company has identified significant potential for additional reductions and is undertaking a comprehensive evaluation across the businesses on a country-by-country basis. Additional details will be provided when plans are finalized.
During the quarter, ExxonMobil continued to support COVID-19 response efforts by increasing production of isopropyl alcohol used in sanitizers and specialized polypropylene used in medical masks and gowns. In April, the company reconfigured manufacturing operations in Baton Rouge, Louisiana, to produce and bottle medical-grade hand sanitizer for donation to frontline workers across the U.S. and to the U.S. Air Force. In addition, ExxonMobil donated equipment and contributed to relief efforts around the world, as outlined on the company’s website.
Second Quarter 2020 Business Highlights
Upstream
- Market prices for crude oil increased following the sharp decline at the end of the first quarter; however, average second quarter realizations for crude oil and natural gas were significantly lower reflecting the continued oversupply conditions in the market and the impacts of COVID-19 on global demand.
- Liquids volumes were down 7 percent from first quarter reflecting the impact of lower demand, including economic and government mandated curtailments. Excluding these curtailment impacts, liquids volumes increased 5 percent. Natural gas volumes were 15 percent lower driven by seasonal demand in Europe and scheduled maintenance.
Downstream
- Industry fuels margins were considerably lower than in the first quarter, reflecting the impacts of COVID‑19 on demand for gasoline and jet fuel. The company experienced unfavorable mark-to-market derivative impacts associated with its trading activity, compared to favorable impacts in the previous quarter, driven by significant volatility in commodity prices across the periods.
- Average refinery utilization was down significantly from first quarter on lower demand, as the company spared about 30 percent of its refining capacity. Over the course of the quarter, utilization increased in line with global fuel demand.
Chemical
- Chemical margins were largely consistent with first quarter. Chemical sales volumes however, while benefiting from resilient demand for essential products, were lower than first quarter driven by the impacts of COVID-19 on global demand.
- The company continues to support COVID-19 response efforts, further optimizing processes to increase its monthly production of specialized polypropylene, used in masks and medical gowns, and isopropyl alcohol, used in sanitizer, by more than 10 percent.
Strengthening the Portfolio
- While operations were impacted by logistical restrictions resulting from COVID-19, the company demonstrated production capacity of 120,000 gross barrels of oil per day at the Liza Phase 1 development offshore Guyana. Topsides integration is underway in Singapore on a second floating production, storage and offloading vessel, with production capacity up to 220,000 gross barrels of oil per day, to support the Liza Phase 2 development.
- During the quarter, ExxonMobil commenced operations at its new Delaware central processing and exporting facility in Eddy County, New Mexico. This new processing and stabilization facility enhances the company’s integration advantages by collecting and processing oil and natural gas from its assets in the Delaware Basin for delivery to Gulf Coast markets.
Disciplined Investing and Expense Management
- During the quarter, ExxonMobil made significant progress on its previously announced capital and cash operating spend reductions. Planned reductions to the company’s capital investment program for 2020, from $33 billion to $23 billion, are ahead of schedule, reflecting increased efficiencies, lower market prices, and slower project pace. The expected decrease in cash operating expenses of about 15 percent is also ahead of schedule, capturing savings from increased efficiencies, reduced activity, and lower energy costs and volumes.
Advancing Innovative Technologies and Products
- During the quarter, ExxonMobil launched a first-of-its-kind high-frequency network of sensors designed to monitor and detect methane emissions in the Permian Basin. Project Astra is a collaboration with the University of Texas, Gas Technology Institute, Environmental Defense Fund and Pioneer Natural Resources that could provide a more affordable, efficient solution to address methane emissions over large areas of operations.
- ExxonMobil has renewed a five-year agreement with Princeton University’s Andlinger Center for Energy and Environment to accelerate research, development and deployment of energy and environmental technologies with a focus on carbon capture and storage, carbonate fuel cells, and lower-emission technologies. The collaboration extends ExxonMobil’s participation in Princeton’s E-filliates Partnership, which began in 2015.
- Scientists from ExxonMobil, the Georgia Institute of Technology and Imperial College of London published joint research on potential breakthroughs in a new membrane technology that could reduce emissions and energy intensity associated with refining crude oil. Laboratory tests indicate the patent-pending membrane could be used to replace some heat-intensive distillation at refineries in the years ahead.
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Results and Volume Summary |
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Millions of Dollars |
2Q |
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2Q |
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(unless noted) |
2020 |
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2019 |
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Change |
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Comments |
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Upstream |
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|
U.S. |
(1,197 |
) |
|
335 |
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|
-1,532 |
|
Lower prices |
|
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Non-U.S. |
(454 |
) |
|
2,926 |
|
|
-3,380 |
|
Lower prices and volumes partly offset by reduced expenses; unfavorable identified items (noncash inventory valuation +168, prior quarter tax item -487) |
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Total |
(1,651 |
) |
|
3,261 |
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|
-4,912 |
|
Prices -4,520, volume -370, expenses +370, other -120, identified items -270 |
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Production (koebd) |
3,638 |
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|
3,909 |
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|
-271 |
|
Liquids -83 kbd: growth (+80 kbd), higher entitlements, and lower downtime/maintenance, more than offset by lower demand including economic curtailments, government mandates, and divestments Gas -1,130 mcfd: growth (+105 mcfd), more than offset by divestments, lower demand including economic curtailments, and reduced entitlements |
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Downstream |
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U.S. |
(101 |
) |
|
310 |
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|
-411 |
|
Lower industry refining margins and reduced market demand, partly offset by lower expenses and improved manufacturing on lower scheduled maintenance; favorable identified item (noncash inventory valuation +404) |
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Non-U.S. |
1,077 |
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|
141 |
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|
+936 |
|
Lower industry refining margins and reduced market demand more than offset by lower expenses, improved manufacturing, favorable foreign exchange, and favorable identified items (+1,199, mainly noncash inventory valuation) |
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Total |
976 |
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|
451 |
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|
+525 |
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Margins -1,680, market demand -380, expenses +340, manufacturing +500, forex +80, other +70, identified items +1,600 |
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Petroleum Product Sales (kbd) |
4,437 |
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|
5,408 |
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|
-971 |
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Chemical |
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U.S. |
171 |
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|
(6 |
) |
|
+177 |
|
Higher margins and lower expenses partly offset by lower volumes on weaker demand |
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Non-U.S. |
296 |
|
|
194 |
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|
+102 |
|
Lower expenses partly offset by lower volumes on weaker demand; favorable identified item (+142, noncash inventory valuation) |
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Total |
467 |
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|
188 |
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|
+279 |
|
Margins +140, expenses +240, volumes -180, other -30, identified items +110 |
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Prime Product Sales (kt) |
5,945 |
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|
6,699 |
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|
-754 |
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Corporate and financing |
(872 |
) |
|
(770 |
) |
|
-102 |
|
Higher financing costs partly offset by lower corporate expenses |
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Results and Volume Summary |
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Millions of Dollars |
2Q |
|
1Q |
|
|
|
|
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||
|
(unless noted) |
2020 |
|
2020 |
|
Change |
|
Comments |
|
||
|
Upstream |
|
|
|
|
|
|
|
|
||
|
U.S. |
(1,197 |
) |
|
(704 |
) |
|
-493 |
|
Lower prices; favorable identified items (prior quarter impairment +315, noncash inventory valuation +90) |
|
|
Non-U.S. |
(454 |
) |
|
1,240 |
|
|
-1,694 |
|
Lower prices and volumes, and unfavorable foreign exchange effects, partly offset by reduced expenses; favorable identified items (noncash inventory valuation +386, prior quarter impairment +41) |
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Total |
(1,651 |
) |
|
536 |
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|
-2,187 |
|
Prices -2,760, volume -250, expenses +350, forex -220, other -140, identified items +830 |
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Production (koebd) |
3,638 |
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|
4,046 |
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|
-408 |
|
Liquids -174 kbd: higher entitlements and lower downtime/maintenance, more than offset by lower demand including economic curtailments and government mandates Gas -1,406 mcfd: lower seasonal demand, higher downtime/maintenance, and lower entitlements |
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Downstream |
|
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|
U.S. |
(101 |
) |
|
(101 |
) |
|
– |
|
Lower margins on weaker industry refining margins and unfavorable mark-to-market derivatives, and reduced market demand, offset by lower expenses, improved manufacturing on lower downtime, and favorable identified items (noncash inventory valuation +815) |
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|
Non-U.S. |
1,077 |
|
|
(510 |
) |
|
+1,587 |
|
Lower margins on unfavorable mark-to-market derivatives and weaker industry refining margins, and lower market demand, more than offset by lower expenses, favorable foreign exchange, and favorable identified items (noncash inventory valuation +2,386, prior quarter impairment +335) |
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Total |
976 |
|
|
(611 |
) |
|
+1,587 |
|
Margins -2,340, market demand -240, expenses +220, forex +110, manufacturing +190, other +120, identified items +3,530 |
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Petroleum Product Sales (kbd) |
4,437 |
|
|
5,287 |
|
|
-850 |
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Chemical |
|
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|
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|
U.S. |
171 |
|
|
288 |
|
|
-117 |
|
Lower margins and volumes on weaker demand partly offset by reduced expenses; favorable identified items (+61, mainly prior quarter impairment) |
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|
Non-U.S. |
296 |
|
|
(144 |
) |
|
+440 |
|
Higher margins partly offset by lower volumes on weaker demand; favorable identified items (+376, mainly noncash inventory valuation) |
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Total |
467 |
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|
144 |
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|
+323 |
|
Expenses +110, volumes -170, other -50, identified items +430 |
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Prime Product Sales (kt) |
5,945 |
|
|
6,237 |
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|
-292 |
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|
Corporate and financing |
(872 |
) |
|
(679 |
) |
|
-193 |
|
Mainly higher financing costs |
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|
Results and Volume Summary |
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|
Millions of Dollars |
YTD |
|
YTD |
|
|
|
|
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||
|
(unless noted) |
2020 |
|
2019 |
|
Change |
|
Comments |
|
||
|
Upstream |
|
|
|
|
|
|
|
|
||
|
U.S. |
(1,901 |
) |
|
431 |
|
|
-2,332 |
|
Lower prices; unfavorable identified item (impairment -315) |
|
|
Non-U.S. |
786 |
|
|
5,706 |
|
|
-4,920 |
|
Lower prices and volumes, partly offset by favorable foreign exchange effects and reduced expenses; unfavorable identified items (noncash inventory valuation -50, impairment -41, prior year tax item -487) |
|
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Total |
(1,115 |
) |
|
6,137 |
|
|
-7,252 |
|
Prices -6,400, volume -280, expenses +140, forex +210, other -30, identified items -890 |
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Production (koebd) |
3,842 |
|
|
3,945 |
|
|
-103 |
|
Liquids +35 kbd: growth (+122 kbd), lower downtime/maintenance, and higher entitlements, partly offset by lower demand including economic curtailments, divestments, and government mandates Gas -827 mcfd: growth (+201 mcfd), more than offset by divestments and lower demand including economic curtailments |
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Downstream |
|
|
|
|
|
|
|
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|
U.S. |
(202 |
) |
|
149 |
|
|
-351 |
|
Lower margins on weaker industry refining margins, and lower market demand, partly offset by improved manufacturing on lower scheduled maintenance, and lower expenses |
|
|
Non-U.S. |
567 |
|
|
46 |
|
|
+521 |
|
Higher margins, with favorable mark-to-market derivatives partly offset by weaker industry refining margins, improved manufacturing, and lower expenses, partly offset by reduced market demand; unfavorable identified items (-332, mainly impairment) |
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Total |
365 |
|
|
195 |
|
|
+170 |
|
Margins -360, market demand -420, manufacturing +960, expenses +250, other +80, identified items -340 |
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Petroleum Product Sales (kbd) |
4,862 |
|
|
5,412 |
|
|
-550 |
|
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|
Chemical |
|
|
|
|
|
|
|
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|
U.S. |
459 |
|
|
155 |
|
|
+304 |
|
Higher margins and lower expenses partly offset by lower volumes on weaker demand; unfavorable identified items (-119, mainly impairment) |
|
|
Non-U.S. |
152 |
|
|
551 |
|
|
-399 |
|
Lower margins and volumes on weaker demand partly offset by lower expenses; unfavorable identified items (-90, mainly noncash inventory valuation) |
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Total |
611 |
|
|
706 |
|
|
-95 |
|
Margins +180, expenses +190, volumes -280, other +20, identified items -210 |
|
|
Prime Product Sales (kt) |
12,182 |
|
|
13,471 |
|
|
-1,289 |
|
|
|
|
Corporate and financing |
(1,551 |
) |
|
(1,558 |
) |
|
+7 |
|
Lower corporate costs offset by higher financing costs |
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Cash Flow from Operations and Asset Sales excluding Working Capital |
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Millions of Dollars |
|
|
2Q |
|
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|
2020 |
|
Comments |
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|||
|
Net income (loss) including noncontrolling interests |
|
(1,169 |
) |
|
Including ($89) million noncontrolling interests |
|
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Depreciation |
|
4,916 |
|
|
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|
|||
|
Noncash inventory adjustment |
|
(2,069 |
) |
|
Including ($147) million noncontrolling interests |
|
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|
Changes in operational working capital |
|
(1,460 |
) |
|
Mainly seasonal reduction in payables and inventory build |
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Other |
|
(218 |
) |
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Cash Flow from Operating |
|
– |
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Activities (U.S. GAAP) |
|
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|
Asset sales |
|
43 |
|
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|||
|
Cash Flow from Operations |
|
43 |
|
|
|
|
|
|
|
|
and Asset Sales |
|
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|
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||
|
Changes in operational working capital |
|
1,460 |
|
|
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|
|||
|
Cash Flow from Operations |
|
1,503 |
|
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|
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|
and Asset Sales excluding Working Capital |
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||
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|
Millions of Dollars |
|
|
YTD |
|
|
|
|
|
|
|
|
|
|
2020 |
|
Comments |
|
|||
|
Net income (loss) including noncontrolling interests |
|
(1,939 |
) |
|
Including ($249) million noncontrolling interests |
|
|||
|
Depreciation |
|
10,735 |
|
|
Including impairment impacts |
|
|||
|
Noncash inventory adjustment |
|
176 |
|
|
Including $2 million noncontrolling interests |
|
|||
|
Changes in operational working capital |
|
(2,402 |
) |
|
Mainly lower payables and inventory build |
|
|||
|
Other |
|
(296 |
) |
|
|
|
|||
|
Cash Flow from Operating |
|
6,274 |
|
|
|
|
|
|
|
|
Activities (U.S. GAAP) |
|
|
|
|
|
|
|
|
|
|
Asset sales |
|
129 |
|
|
|
|
|||
|
Cash Flow from Operations |
|
6,403 |
|
|
|
|
|
|
|
|
and Asset Sales |
|
|
|
|
|
|
|
||
|
Changes in operational working capital |
|
2,402 |
|
|
|
|
|
|
|
|
Cash Flow from Operations |
|
8,805 |
|
|
|
|
|
|
|
|
and Asset Sales excluding Working Capital |
|
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|
First Half 2020 Financial Updates
During the first six months of 2020, Exxon Mobil Corporation purchased 6 million shares of its common stock for the treasury at a gross cost of $305 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.
ExxonMobil will discuss financial and operating results and other matters during a webcast at 8:30 a.m. Central Time on July 31, 2020. To listen to the event or access an archived replay, please visit www.exxonmobil.com.