Exxon Mobil Corporation Announces Estimated Second Quarter 2005 Results
Posted: 01 August 2005
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Exxon Mobil Corporation has 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. Pr ime 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. Pr ime 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
Posted by Editor Pipeline Magazine
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