UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 20212022
or
☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number 1-2256
Exxon Mobil Corporation
(Exact name of registrant as specified in its charter)
| | | | | | | | |
New Jersey | | 13-5409005 |
(State or other jurisdiction of incorporation or organization) | | (I.R.S. Employer Identification Number) |
5959 Las Colinas Boulevard, Irving, Texas 75039-2298
(Address of principal executive offices) (Zip Code)
(972) 940-6000
(Registrant's telephone number, including area code)
_______________________
Securities registered pursuant to Section 12(b) of the Act:
| | | | | | | | | | | | | | |
Title of Each Class | | Trading Symbol | | Name of Each Exchange on Which Registered |
Common Stock, without par value | | XOM | | New York Stock Exchange |
0.142% Notes due 2024 | | XOM24B | | New York Stock Exchange |
0.524% Notes due 2028 | | XOM28 | | New York Stock Exchange |
0.835% Notes due 2032 | | XOM32 | | New York Stock Exchange |
1.408% Notes due 2039 | | XOM39A | | New York Stock Exchange |
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☑ No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files). Yes ☑ No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| | | | | | | | | | | |
Large accelerated filer | ☑ | Accelerated filer | ☐ |
| | | |
Non-accelerated filer | ☐ | Smaller reporting company | ☐ |
|
| Emerging growth company | ☐ |
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☑
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
| | | | | | | | |
Class | | Outstanding as of March 31, 20212022 |
Common stock, without par value | | 4,233,538,9174,212,543,236 |
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 20212022
TABLE OF CONTENTS
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PART I. FINANCIAL INFORMATION |
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Item 1. Financial Statements | |
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Condensed Consolidated Statement of Income Three months ended March 31, 20212022 and 20202021 | 3 | |
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Condensed Consolidated Statement of Comprehensive Income Three months ended March 31, 20212022 and 20202021 | 4 | |
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Condensed Consolidated Balance Sheet As of March 31, 20212022 and December 31, 20202021 | 5 | |
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Condensed Consolidated Statement of Cash Flows Three months ended March 31, 20212022 and 20202021 | 6 | |
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Condensed Consolidated Statement of Changes in Equity Three months ended March 31, 20212022 and 20202021 | 7 | |
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Notes to Condensed Consolidated Financial Statements | 8 | |
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Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 1716 | |
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Item 3. Quantitative and Qualitative Disclosures About Market Risk | 2426 | |
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Item 4. Controls and Procedures | 2426 | |
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PART II. OTHER INFORMATION |
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Item 1. Legal Proceedings | 2527 | |
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Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 2527 | |
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Item 6. Exhibits | 2527 | |
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Index to Exhibits | 2628 | |
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Signature | 2729 | |
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PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
| EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION |
CONDENSED CONSOLIDATED STATEMENT OF INCOME | CONDENSED CONSOLIDATED STATEMENT OF INCOME | CONDENSED CONSOLIDATED STATEMENT OF INCOME |
(millions of dollars) | (millions of dollars) | (millions of dollars) |
| | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
| | | 2021 | | 2020 | | | | | 2022 | | 2021 |
Revenues and other income | Revenues and other income | | | | | | Revenues and other income | | | |
Sales and other operating revenue | Sales and other operating revenue | | 57,552 | | | 55,134 | | | Sales and other operating revenue | | | 87,734 | | | 57,552 | |
Income from equity affiliates | Income from equity affiliates | | 1,473 | | | 775 | | | Income from equity affiliates | | | 2,538 | | | 1,473 | |
Other income | Other income | | 122 | | | 249 | | | Other income | | | 228 | | | 122 | |
Total revenues and other income | Total revenues and other income | | 59,147 | | | 56,158 | | | Total revenues and other income | | | 90,500 | | | 59,147 | |
Costs and other deductions | Costs and other deductions | | | | Costs and other deductions | | | |
Crude oil and product purchases | Crude oil and product purchases | | 32,601 | | | 32,083 | | | Crude oil and product purchases | | | 52,388 | | | 32,601 | |
Production and manufacturing expenses | Production and manufacturing expenses | | 8,062 | | | 8,297 | | | Production and manufacturing expenses | | | 10,241 | | | 8,062 | |
Selling, general and administrative expenses | Selling, general and administrative expenses | | 2,428 | | | 2,579 | | | Selling, general and administrative expenses | | | 2,409 | | | 2,428 | |
Depreciation and depletion | | 5,004 | | | 5,819 | | | |
Depreciation and depletion (including impairments) | | Depreciation and depletion (including impairments) | | | 8,883 | | | 5,004 | |
Exploration expenses, including dry holes | Exploration expenses, including dry holes | | 164 | | | 288 | | | Exploration expenses, including dry holes | | | 173 | | | 164 | |
Non-service pension and postretirement benefit expense | Non-service pension and postretirement benefit expense | | 378 | | | 269 | | | Non-service pension and postretirement benefit expense | | | 108 | | | 378 | |
Interest expense | Interest expense | | 258 | | | 249 | | | Interest expense | | | 188 | | | 258 | |
Other taxes and duties | Other taxes and duties | | 6,660 | | | 6,832 | | | Other taxes and duties | | | 7,554 | | | 6,660 | |
Total costs and other deductions | Total costs and other deductions | | 55,555 | | | 56,416 | | | Total costs and other deductions | | | 81,944 | | | 55,555 | |
Income (Loss) before income taxes | | 3,592 | | | (258) | | | |
Income (loss) before income taxes | | Income (loss) before income taxes | | | 8,556 | | | 3,592 | |
Income taxes | Income taxes | | 796 | | | 512 | | | Income taxes | | | 2,806 | | | 796 | |
Net income (loss) including noncontrolling interests | Net income (loss) including noncontrolling interests | | 2,796 | | | (770) | | | Net income (loss) including noncontrolling interests | | | 5,750 | | | 2,796 | |
Net income (loss) attributable to noncontrolling interests | Net income (loss) attributable to noncontrolling interests | | 66 | | | (160) | | | Net income (loss) attributable to noncontrolling interests | | | 270 | | | 66 | |
Net income (loss) attributable to ExxonMobil | Net income (loss) attributable to ExxonMobil | | 2,730 | | | (610) | | | Net income (loss) attributable to ExxonMobil | | | 5,480 | | | 2,730 | |
| Earnings (Loss) per common share (dollars) | | 0.64 | | | (0.14) | | | |
Earnings (loss) per common share (dollars) | | Earnings (loss) per common share (dollars) | | | 1.28 | | | 0.64 | |
| Earnings (Loss) per common share - assuming dilution (dollars) | | 0.64 | | | (0.14) | | | |
Earnings (loss) per common share - assuming dilution (dollars) | | Earnings (loss) per common share - assuming dilution (dollars) | | | 1.28 | | | 0.64 | |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
| EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION |
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME |
(millions of dollars) | (millions of dollars) | (millions of dollars) |
| | | | | | | | |
| | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
| | | 2021 | | 2020 | | | | | 2022 | | 2021 |
Net income (loss) including noncontrolling interests | Net income (loss) including noncontrolling interests | | 2,796 | | | (770) | | | Net income (loss) including noncontrolling interests | | | 5,750 | | | 2,796 | |
Other comprehensive income (loss) (net of income taxes) | Other comprehensive income (loss) (net of income taxes) | | | Other comprehensive income (loss) (net of income taxes) | | | |
Foreign exchange translation adjustment | Foreign exchange translation adjustment | | 149 | | | (5,649) | | | Foreign exchange translation adjustment | | | 741 | | | 149 | |
| Postretirement benefits reserves adjustment (excluding amortization) | Postretirement benefits reserves adjustment (excluding amortization) | | 168 | | | 87 | | | Postretirement benefits reserves adjustment (excluding amortization) | | | 105 | | | 168 | |
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | | 378 | | | 204 | | | Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | | | 93 | | | 378 | |
Total other comprehensive income (loss) | Total other comprehensive income (loss) | | 695 | | | (5,358) | | | Total other comprehensive income (loss) | | | 939 | | | 695 | |
Comprehensive income (loss) including noncontrolling interests | Comprehensive income (loss) including noncontrolling interests | | 3,491 | | | (6,128) | | | Comprehensive income (loss) including noncontrolling interests | | | 6,689 | | | 3,491 | |
Comprehensive income (loss) attributable to noncontrolling interests | Comprehensive income (loss) attributable to noncontrolling interests | | 146 | | | (672) | | | Comprehensive income (loss) attributable to noncontrolling interests | | | 359 | | | 146 | |
Comprehensive income (loss) attributable to ExxonMobil | Comprehensive income (loss) attributable to ExxonMobil | | 3,345 | | | (5,456) | | | Comprehensive income (loss) attributable to ExxonMobil | | | 6,330 | | | 3,345 | |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
| EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION |
CONDENSED CONSOLIDATED BALANCE SHEET | CONDENSED CONSOLIDATED BALANCE SHEET | CONDENSED CONSOLIDATED BALANCE SHEET |
(millions of dollars) | (millions of dollars) | (millions of dollars) |
| | March 31, 2021 | | December 31, 2020 | | March 31, 2022 | | December 31, 2021 |
Assets | Assets | | | | Assets | | | |
Current assets | Current assets | | | | Current assets | | | |
Cash and cash equivalents | Cash and cash equivalents | 3,515 | | | 4,364 | | Cash and cash equivalents | 11,074 | | | 6,802 | |
Notes and accounts receivable – net | Notes and accounts receivable – net | 24,755 | | | 20,581 | | Notes and accounts receivable – net | 42,142 | | | 32,383 | |
Inventories | Inventories | | Inventories | |
Crude oil, products and merchandise | Crude oil, products and merchandise | 13,740 | | | 14,169 | | Crude oil, products and merchandise | 18,074 | | | 14,519 | |
Materials and supplies | Materials and supplies | 4,617 | | | 4,681 | | Materials and supplies | 4,103 | | | 4,261 | |
Other current assets | Other current assets | 1,568 | | | 1,098 | | Other current assets | 1,862 | | | 1,189 | |
Total current assets | Total current assets | 48,195 | | | 44,893 | | Total current assets | 77,255 | | | 59,154 | |
Investments, advances and long-term receivables | Investments, advances and long-term receivables | 44,181 | | | 43,515 | | Investments, advances and long-term receivables | 46,329 | | | 45,195 | |
Property, plant and equipment – net | Property, plant and equipment – net | 224,641 | | | 227,553 | | Property, plant and equipment – net | 212,773 | | | 216,552 | |
Other assets, including intangibles – net | Other assets, including intangibles – net | 16,753 | | | 16,789 | | Other assets, including intangibles – net | 18,414 | | | 18,022 | |
Total assets | 333,770 | | | 332,750 | | |
Total Assets | | Total Assets | 354,771 | | | 338,923 | |
| Liabilities | Liabilities | | Liabilities | |
Current liabilities | Current liabilities | | Current liabilities | |
Notes and loans payable | Notes and loans payable | 18,185 | | | 20,458 | | Notes and loans payable | 4,886 | | | 4,276 | |
Accounts payable and accrued liabilities | Accounts payable and accrued liabilities | 41,017 | | | 35,221 | | Accounts payable and accrued liabilities | 63,501 | | | 50,766 | |
Income taxes payable | Income taxes payable | 948 | | | 684 | | Income taxes payable | 3,672 | | | 1,601 | |
Total current liabilities | Total current liabilities | 60,150 | | | 56,363 | | Total current liabilities | 72,059 | | | 56,643 | |
Long-term debt | Long-term debt | 45,137 | | | 47,182 | | Long-term debt | 42,651 | | | 43,428 | |
Postretirement benefits reserves | Postretirement benefits reserves | 21,835 | | | 22,415 | | Postretirement benefits reserves | 18,255 | | | 18,430 | |
Deferred income tax liabilities | Deferred income tax liabilities | 18,113 | | | 18,165 | | Deferred income tax liabilities | 19,533 | | | 20,165 | |
Long-term obligations to equity companies | Long-term obligations to equity companies | 3,279 | | | 3,253 | | Long-term obligations to equity companies | 2,875 | | | 2,857 | |
Other long-term obligations | Other long-term obligations | 21,155 | | | 21,242 | | Other long-term obligations | 22,872 | | | 21,717 | |
Total liabilities | 169,669 | | | 168,620 | | |
Total Liabilities | | Total Liabilities | 178,245 | | | 163,240 | |
| Commitments and contingencies (Note 3) | Commitments and contingencies (Note 3) | 0 | | 0 | Commitments and contingencies (Note 3) | 0 | | 0 |
| Equity | Equity | | Equity | |
Common stock without par value | Common stock without par value | | Common stock without par value | |
(9,000 million shares authorized, 8,019 million shares issued) | (9,000 million shares authorized, 8,019 million shares issued) | 15,884 | | | 15,688 | | (9,000 million shares authorized, 8,019 million shares issued) | 15,879 | | | 15,746 | |
Earnings reinvested | Earnings reinvested | 382,953 | | | 383,943 | | Earnings reinvested | 393,779 | | | 392,059 | |
Accumulated other comprehensive income | Accumulated other comprehensive income | (16,090) | | | (16,705) | | Accumulated other comprehensive income | (12,914) | | | (13,764) | |
Common stock held in treasury | Common stock held in treasury | | Common stock held in treasury | |
(3,785 million shares at March 31, 2021 and 3,786 million shares at December 31, 2020) | (225,773) | | | (225,776) | | |
(3,806 million shares at March 31, 2022 and 3,780 million shares at December 31, 2021) | | (3,806 million shares at March 31, 2022 and 3,780 million shares at December 31, 2021) | (227,529) | | | (225,464) | |
ExxonMobil share of equity | ExxonMobil share of equity | 156,974 | | | 157,150 | | ExxonMobil share of equity | 169,215 | | | 168,577 | |
Noncontrolling interests | Noncontrolling interests | 7,127 | | | 6,980 | | Noncontrolling interests | 7,311 | | | 7,106 | |
Total equity | 164,101 | | | 164,130 | | |
Total liabilities and equity | 333,770 | | | 332,750 | | |
Total Equity | | Total Equity | 176,526 | | | 175,683 | |
Total Liabilities and Equity | | Total Liabilities and Equity | 354,771 | | | 338,923 | |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
| | | | | | | | | | | |
EXXON MOBIL CORPORATION |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
(millions of dollars) |
| Three Months Ended March 31, |
| 2021 | | 2020 |
Cash flows from operating activities | | | |
Net income (loss) including noncontrolling interests | 2,796 | | | (770) | |
Depreciation and depletion | 5,004 | | | 5,819 | |
Noncash inventory adjustment - lower of cost or market | 0 | | | 2,245 | |
Changes in operational working capital, excluding cash and debt | 1,953 | | | (942) | |
All other items – net | (489) | | | (78) | |
Net cash provided by operating activities | 9,264 | | | 6,274 | |
| | | |
Cash flows from investing activities | | | |
Additions to property, plant and equipment | (2,400) | | | (5,945) | |
Proceeds from asset sales and returns of investments | 307 | | | 86 | |
Additional investments and advances | (349) | | | (728) | |
Other investing activities including collection of advances | 87 | | | 220 | |
Net cash used in investing activities | (2,355) | | | (6,367) | |
| | | |
Cash flows from financing activities | | | |
Additions to long-term debt | 0 | | | 8,466 | |
Reductions in long-term debt | 0 | | | (2) | |
Additions to short-term debt (1) | 5,781 | | | 13,128 | |
Reductions in short-term debt (1) | (10,849) | | | (6,500) | |
Additions/(reductions) in commercial paper and debt with three months or less maturity | 1,003 | | | (2,332) | |
| | | |
Cash dividends to ExxonMobil shareholders | (3,720) | | | (3,719) | |
Cash dividends to noncontrolling interests | (52) | | | (45) | |
Changes in noncontrolling interests | 53 | | | 94 | |
Common stock acquired | (1) | | | (305) | |
Net cash used in financing activities | (7,785) | | | 8,785 | |
Effects of exchange rate changes on cash | 27 | | | (369) | |
Increase/(decrease) in cash and cash equivalents | (849) | | | 8,323 | |
Cash and cash equivalents at beginning of period | 4,364 | | | 3,089 | |
Cash and cash equivalents at end of period | 3,515 | | | 11,412 | |
| | | |
Supplemental Disclosures | | | |
Income taxes paid | 855 | | | 1,372 | |
Cash interest paid | | | |
Included in cash flows from operating activities | 405 | | | 313 | |
Capitalized, included in cash flows from investing activities | 151 | | | 155 | |
Total cash interest paid | 556 | | | 468 | |
(1)Includes commercial paper with a maturity greater than three months. | | | | | | | | | | | |
EXXON MOBIL CORPORATION |
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS |
(millions of dollars) |
| Three Months Ended March 31, |
| 2022 | | 2021 |
Cash flows from operating activities | | | |
Net income (loss) including noncontrolling interests | 5,750 | | | 2,796 | |
Depreciation and depletion (including impairments) | 8,883 | | | 5,004 | |
| | | |
Changes in operational working capital, excluding cash and debt | 1,086 | | | 1,953 | |
All other items – net | (931) | | | (489) | |
Net cash provided by operating activities | 14,788 | | | 9,264 | |
| | | |
Cash flows from investing activities | | | |
Additions to property, plant and equipment | (3,911) | | | (2,400) | |
Proceeds from asset sales and returns of investments | 293 | | | 307 | |
Additional investments and advances | (417) | | | (349) | |
Other investing activities including collection of advances | 90 | | | 87 | |
Net cash used in investing activities | (3,945) | | | (2,355) | |
| | | |
Cash flows from financing activities | | | |
| | | |
| | | |
Additions to short-term debt | — | | | 5,781 | |
Reductions in short-term debt | (2,098) | | | (10,849) | |
Additions/(reductions) in debt with three months or less maturity | 1,366 | | | 1,003 | |
| | | |
Cash dividends to ExxonMobil shareholders | (3,760) | | | (3,720) | |
Cash dividends to noncontrolling interests | (60) | | | (52) | |
Changes in noncontrolling interests | (94) | | | 53 | |
Common stock acquired | (2,067) | | | (1) | |
Net cash used in financing activities | (6,713) | | | (7,785) | |
Effects of exchange rate changes on cash | 142 | | | 27 | |
Increase/(decrease) in cash and cash equivalents | 4,272 | | | (849) | |
Cash and cash equivalents at beginning of period | 6,802 | | | 4,364 | |
Cash and cash equivalents at end of period | 11,074 | | | 3,515 | |
| | | |
Supplemental Disclosures | | | |
Income taxes paid | 1,798 | | | 855 | |
Cash interest paid | | | |
Included in cash flows from operating activities | 319 | | | 405 | |
Capitalized, included in cash flows from investing activities | 187 | | | 151 | |
Total cash interest paid | 506 | | | 556 | |
| | | |
Noncash right of use assets recorded in exchange for lease liabilities | | | |
Operating leases | 240 | | | 265 | |
Finance leases | 656 | | | — | |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
| EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION | EXXON MOBIL CORPORATION |
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY | CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY |
(millions of dollars) | (millions of dollars) | (millions of dollars) |
| | ExxonMobil Share of Equity | | | | | | ExxonMobil Share of Equity | | | | |
| Common Stock | | Earnings Reinvested | | Accumulated Other Comprehensive Income | | Common Stock Held in Treasury | | ExxonMobil Share of Equity | | Non-controlling Interests | | Total Equity | |
Balance as of December 31, 2019 | 15,637 | | | 421,341 | | | (19,493) | | | (225,835) | | | 191,650 | | | 7,288 | | | 198,938 | | |
Amortization of stock-based awards | 181 | | | — | | | — | | | — | | | 181 | | | — | | | 181 | | |
Other | (182) | | | — | | | — | | | — | | | (182) | | | 157 | | | (25) | | |
Net income (loss) for the period | — | | | (610) | | | — | | | — | | | (610) | | | (160) | | | (770) | | |
Dividends - common shares | — | | | (3,719) | | | — | | | — | | | (3,719) | | | (45) | | | (3,764) | | |
Cumulative effect of accounting change | — | | | (93) | | | — | | | — | | | (93) | | | (1) | | | (94) | | |
Other comprehensive income (loss) | — | | | — | | | (4,846) | | | — | | | (4,846) | | | (512) | | | (5,358) | | |
Acquisitions, at cost | — | | | — | | | — | | | (305) | | | (305) | | | (63) | | | (368) | | |
Dispositions | — | | | — | | | — | | | 3 | | | 3 | | | — | | | 3 | | |
Balance as of March 31, 2020 | 15,636 | | | 416,919 | | | (24,339) | | | (226,137) | | | 182,079 | | | 6,664 | | | 188,743 | | |
| | | | Common Stock | | Earnings Reinvested | | Accumulated Other Comprehensive Income | | Common Stock Held in Treasury | | ExxonMobil Share of Equity | | Non-controlling Interests | | Total Equity |
Balance as of December 31, 2020 | Balance as of December 31, 2020 | 15,688 | | | 383,943 | | | (16,705) | | | (225,776) | | | 157,150 | | | 6,980 | | | 164,130 | | Balance as of December 31, 2020 | 15,688 | | | 383,943 | | | (16,705) | | | (225,776) | | | 157,150 | | | 6,980 | | | 164,130 | |
Amortization of stock-based awards | Amortization of stock-based awards | 202 | | | — | | | — | | | — | | | 202 | | | — | | | 202 | | Amortization of stock-based awards | 202 | | | — | | | — | | | — | | | 202 | | | — | | | 202 | |
Other | Other | (6) | | | — | | | — | | | — | | | (6) | | | 53 | | | 47 | | Other | (6) | | | — | | | — | | | — | | | (6) | | | 53 | | | 47 | |
Net income (loss) for the period | Net income (loss) for the period | — | | | 2,730 | | | — | | | — | | | 2,730 | | | 66 | | | 2,796 | | Net income (loss) for the period | — | | | 2,730 | | | — | | | — | | | 2,730 | | | 66 | | | 2,796 | |
Dividends - common shares | Dividends - common shares | — | | | (3,720) | | | — | | | — | | | (3,720) | | | (52) | | | (3,772) | | Dividends - common shares | — | | | (3,720) | | | — | | | — | | | (3,720) | | | (52) | | | (3,772) | |
| Other comprehensive income (loss) | Other comprehensive income (loss) | — | | | — | | | 615 | | | — | | | 615 | | | 80 | | | 695 | | Other comprehensive income (loss) | — | | | — | | | 615 | | | — | | | 615 | | | 80 | | | 695 | |
Acquisitions, at cost | Acquisitions, at cost | — | | | — | | | — | | | (1) | | | (1) | | | 0 | | | (1) | | Acquisitions, at cost | — | | | — | | | — | | | (1) | | | (1) | | | — | | | (1) | |
Dispositions | Dispositions | — | | | — | | | — | | | 4 | | | 4 | | | — | | | 4 | | Dispositions | — | | | — | | | — | | | 4 | | | 4 | | | — | | | 4 | |
Balance as of March 31, 2021 | Balance as of March 31, 2021 | 15,884 | | | 382,953 | | | (16,090) | | | (225,773) | | | 156,974 | | | 7,127 | | | 164,101 | | Balance as of March 31, 2021 | 15,884 | | | 382,953 | | | (16,090) | | | (225,773) | | | 156,974 | | | 7,127 | | | 164,101 | |
| Balance as of December 31, 2021 | | Balance as of December 31, 2021 | 15,746 | | | 392,059 | | | (13,764) | | | (225,464) | | | 168,577 | | | 7,106 | | | 175,683 | |
Amortization of stock-based awards | | Amortization of stock-based awards | 138 | | | — | | | — | | | — | | | 138 | | | — | | | 138 | |
Other | | Other | (5) | | | — | | | — | | | — | | | (5) | | | 14 | | | 9 | |
Net income (loss) for the period | | Net income (loss) for the period | — | | | 5,480 | | | — | | | — | | | 5,480 | | | 270 | | | 5,750 | |
Dividends - common shares | | Dividends - common shares | — | | | (3,760) | | | — | | | — | | | (3,760) | | | (60) | | | (3,820) | |
| Other comprehensive income (loss) | | Other comprehensive income (loss) | — | | | — | | | 850 | | | — | | | 850 | | | 89 | | | 939 | |
Acquisitions, at cost | | Acquisitions, at cost | — | | | — | | | — | | | (2,067) | | | (2,067) | | | (108) | | | (2,175) | |
Dispositions | | Dispositions | — | | | — | | | — | | | 2 | | | 2 | | | — | | | 2 | |
Balance as of March 31, 2022 | | Balance as of March 31, 2022 | 15,879 | | | 393,779 | | | (12,914) | | | (227,529) | | | 169,215 | | | 7,311 | | | 176,526 | |
| | | Three Months Ended March 31, 2021 | | | | Three Months Ended March 31, 2020 | | Three Months Ended March 31, 2022 | | | | Three Months Ended March 31, 2021 |
Common Stock Share Activity | Common Stock Share Activity | Issued | | Held in Treasury | | Outstanding | | | | Issued | | Held in Treasury | | Outstanding | Common Stock Share Activity | Issued | | Held in Treasury | | Outstanding | | | | Issued | | Held in Treasury | | Outstanding |
| | (millions of shares) | | | | (millions of shares) | | (millions of shares) | | | | (millions of shares) |
Balance as of December 31 | Balance as of December 31 | 8,019 | | | (3,786) | | | 4,233 | | | 8,019 | | | (3,785) | | | 4,234 | | Balance as of December 31 | 8,019 | | | (3,780) | | | 4,239 | | | 8,019 | | | (3,786) | | | 4,233 | |
Acquisitions | Acquisitions | — | | | — | | | — | | | — | | | (6) | | | (6) | | Acquisitions | — | | | (26) | | | (26) | | | — | | | — | | | — | |
Dispositions | Dispositions | — | | | 1 | | | 1 | | | — | | | — | | | — | | Dispositions | — | | | — | | | — | | | — | | | 1 | | | 1 | |
Balance as of March 31 | Balance as of March 31 | 8,019 | | | (3,785) | | | 4,234 | | | 8,019 | | | (3,791) | | | 4,228 | | Balance as of March 31 | 8,019 | | | (3,806) | | | 4,213 | | | 8,019 | | | (3,785) | | | 4,234 | |
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
EXXON MOBIL CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of Financial Statement Preparation
These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 20202021 Annual Report on Form 10-K. In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature. Prior data has been reclassified in certain cases to conform to the current presentation basis.
The Corporation's exploration and production activities are accounted for under the "successful efforts" method.
2. Miscellaneous Financial InformationRussia
Crude oil, productsIn early March, in response to Russia’s military action in Ukraine, the Corporation announced that it plans to discontinue operations on the Sakhalin-1 project (“Sakhalin”) and merchandise inventories are carried atdevelop steps to exit the lowerventure. In light of current marketthis, and given the considerable uncertainties surrounding the ongoing operation and future cash-flow generating capability of Sakhalin, an impairment assessment was required, and management determined that the carrying value or cost, generally determined underof the last-in first-out method (LIFO).asset group was not recoverable. As a result, the Corporation’s first quarter earnings include after-tax charges of $3.4 billion largely representing the impairment of its operations related to Sakhalin. On a before-tax basis, the charges amounted to $4.6 billion, substantially all of which is reflected in the line captioned “Depreciation and depletion (including impairments)” on the Condensed Consolidated Statement of Income. The Corporation's resultsexit from the project would result in quantities estimated at 150 million oil-equivalent barrels no longer qualifying as proved reserves, which represented less than 1 percent of the Corporation's 18.5 billion oil-equivalent barrels of proved reserves at year-end 2021.
The assessment of fair value required the use of Level 3 inputs and assumptions that are based on the views of a likely market participant. As of March 31, the pool of market participants for Russia-based upstream assets was assessed as extremely limited. In arriving at a fair value for its interest in Sakhalin, the Corporation considered, among other things, the current state of sanctions, the regulatory environment within Russia, the statements and actions of potential market participants, and the range and risks of future cash flows that a market participant might consider. Given these significant uncertainties, the likelihood of a third-party market participant agreeing to engage in a transaction for the first quarterCorporation’s interest in Sakhalin, as of 2020 included a before-tax charge of $2,777 million, included in "Crude oil and product purchases" on the Statement of Income, from writing down the book value of inventoriesMarch 31, was judged to their market value at the end of the period. This adjustment, together with a market adjustment to inventory for equity companies included in "Income from equity affiliates," resulted in a $2,096 million after-tax charge to earnings (excluding noncontrolling interests) in the first quarter of 2020. These charges were adjusted throughout 2020 to reflect the current market price of the inventory at the end of each reporting period.be remote.
In the first quarter of 2020, mainly as a result of declines in prices for crude oil, natural gas and petroleum products and a significant decline in the Corporation's market capitalization at the end of the first quarter, before-tax goodwill impairment charges of $611 million and other impairment charges of $299 million were recognized. The charges related to goodwill impairment were included in “Depreciation and depletion” on the Statement of Income while the charges related to other impairments were largely included in “Income from equity affiliates.”
3. Litigation and Other Contingencies
Litigation. A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters, as well as other matters which management believes should be disclosed. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a material adverse effect upon the Corporation's operations, financial condition, or financial statements taken as a whole.
Other Contingencies. The Corporation and certain of its consolidated subsidiaries were contingently liable at March 31, 2021,2022, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
| | | | | | | | | | | | | | | | | | | | | | | |
| | | As of March 31, 2021 |
| | | Equity Company Obligations (1) | | Other Third-Party Obligations | | Total |
| | | (millions of dollars) |
Guarantees | | | | | |
| | Debt-related | 1,014 | | | 126 | | | 1,140 | |
| | Other | 837 | | | 4,912 | | | 5,749 | |
| | Total | 1,851 | | | 5,038 | | | 6,889 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| | | March 31, 2022 |
| | | Equity Company Obligations (1) | | Other Third-Party Obligations | | Total |
| | | (millions of dollars) |
Guarantees | | | | | |
| | Debt-related | 1,152 | | | 145 | | | 1,297 | |
| | Other | 830 | | | 6,379 | | | 7,209 | |
| | Total | 1,982 | | | 6,524 | | | 8,506 | |
(1)ExxonMobil share
Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition.
The operations and earnings of the Corporation and its affiliates throughout the world have been, and may in the future be, affected from time to time in varying degree by political developments and laws and regulations, such as forced divestiture of assets; restrictions on production, imports and exports; price controls; tax increases and retroactive tax claims; expropriation of property; cancellation of contract rights and environmental regulations. Both the likelihood of such occurrences and their overall effect upon the Corporation vary greatly from country to country and are not predictable.
In accordance with a Venezuelan nationalization decree issued in February 2007, a subsidiary of the Venezuelan National Oil Company (PdVSA) assumed the operatorship of the Cerro Negro Heavy Oil Project. The decree also required conversion of the Cerro Negro Project into a “mixed enterprise” and an increase in PdVSA’s or one of its affiliate’s ownership interest in the Project. ExxonMobil refused to accede to the terms proffered by the government, and on June 27, 2007, the government expropriated ExxonMobil’s 41.67 percent interest in the Cerro Negro Project.
ExxonMobil collected awards of $908 million in an arbitration against PdVSA under the rules of the International Chamber of Commerce in respect of an indemnity related to the Cerro Negro Project and $260 million in an arbitration for compensation due for the La Ceiba Project and for export curtailments at the Cerro Negro Project under rules of International Centre for Settlement of Investment Disputes (ICSID). An ICSID arbitration award relating to the Cerro Negro Project’s expropriation ($1.4 billion) was annulled based on a determination that a prior Tribunal failed to adequately explain why the cap on damages in the indemnity owed by PdVSA did not affect or limit the amount owed for the expropriation of the Cerro Negro Project. ExxonMobil filed a new claim seeking to restore the original award of damages for the Cerro Negro Project with ICSID on September 26, 2018.
The net impact of this matter on the Corporation’s consolidated financial results cannot be reasonably estimated. Regardless, the Corporation does not expect the resolution to have a material effect upon the Corporation’s operations or financial condition.
An affiliate of ExxonMobil is one of the Contractors under a Production Sharing Contract (PSC) with the Nigerian National Petroleum Corporation (NNPC) covering the Erha block located in the offshore waters of Nigeria. ExxonMobil's affiliate is the operator of the block and owns a 56.25 percent interest under the PSC. The Contractors are in dispute with NNPC regarding NNPC's lifting of crude oil in excess of its entitlement under the terms of the PSC. In accordance with the terms of the PSC, the Contractors initiated arbitration in Abuja, Nigeria, under the Nigerian Arbitration and Conciliation Act. On October 24, 2011, a three-member arbitral Tribunal issued an award upholding the Contractors' position in all material respects and awarding damages to the Contractors jointly in an amount of approximately $1.8 billion plus $234 million in accrued interest. The Contractors petitioned a Nigerian federal court for enforcement of the award, and NNPC petitioned the same court to have the award set aside. On May 22, 2012, the court set aside the award. The Contractors appealed that judgment to the Court of Appeal, Abuja Judicial Division. On July 22, 2016, the Court of Appeal upheld the decision of the lower court setting aside the award. On October 21, 2016, the Contractors appealed the decision to the Supreme Court of Nigeria. In June 2013, the Contractors filed a lawsuit against NNPC in the Nigerian federal high court in order to preserve their ability to seek enforcement of the PSC in the courts if necessary. Following dismissal by this court, the Contractors appealed to the Nigerian Court of Appeal in June 2016. In October 2014, the Contractors filed suit in the United States District Court for the Southern District of New York (SDNY) to enforce, if necessary, the arbitration award against NNPC assets residing within that jurisdiction. NNPC moved to dismiss the lawsuit. On September 4, 2019, the SDNY dismissed the Contractors’ petition to recognize and enforce the Erha arbitration award. The Contractors filed a notice of appeal in the Second Circuit on October 2, 2019. At this time, the net impact of this matter on the Corporation's consolidated financial results cannot be reasonably estimated. However, regardless of the outcome of enforcement proceedings, the Corporation does not expect the proceedings to have a material effect upon the Corporation's operations or financial condition.
4. Other Comprehensive Income Information
| ExxonMobil Share of Accumulated Other Comprehensive Income | ExxonMobil Share of Accumulated Other Comprehensive Income | Cumulative Foreign Exchange Translation Adjustment | | Postretirement Benefits Reserves Adjustment | | Total | ExxonMobil Share of Accumulated Other Comprehensive Income | Cumulative Foreign Exchange Translation Adjustment | | Postretirement Benefits Reserves Adjustment | | Total |
| | (millions of dollars) | | (millions of dollars) |
| Balance as of December 31, 2019 | (12,446) | | | (7,047) | | | (19,493) | | |
Current period change excluding amounts reclassified from accumulated other comprehensive income(1) | (5,113) | | | 72 | | | (5,041) | | |
Amounts reclassified from accumulated other comprehensive income | 0 | | | 195 | | | 195 | | |
Total change in accumulated other comprehensive income | (5,113) | | | 267 | | | (4,846) | | |
Balance as of March 31, 2020 | (17,559) | | | (6,780) | | | (24,339) | | |
| Balance as of December 31, 2020 | Balance as of December 31, 2020 | (10,614) | | | (6,091) | | | (16,705) | | Balance as of December 31, 2020 | (10,614) | | | (6,091) | | | (16,705) | |
Current period change excluding amounts reclassified from accumulated other comprehensive income (1) | Current period change excluding amounts reclassified from accumulated other comprehensive income (1) | 88 | | | 158 | | | 246 | | Current period change excluding amounts reclassified from accumulated other comprehensive income(1) | 88 | | | 158 | | | 246 | |
Amounts reclassified from accumulated other comprehensive income | Amounts reclassified from accumulated other comprehensive income | 0 | | | 369 | | | 369 | | Amounts reclassified from accumulated other comprehensive income | — | | | 369 | | | 369 | |
Total change in accumulated other comprehensive income | Total change in accumulated other comprehensive income | 88 | | | 527 | | | 615 | | Total change in accumulated other comprehensive income | 88 | | | 527 | | | 615 | |
Balance as of March 31, 2021 | Balance as of March 31, 2021 | (10,526) | | | (5,564) | | | (16,090) | | Balance as of March 31, 2021 | (10,526) | | | (5,564) | | | (16,090) | |
| Balance as of December 31, 2021 | | Balance as of December 31, 2021 | (11,499) | | | (2,265) | | | (13,764) | |
Current period change excluding amounts reclassified from accumulated other comprehensive income (1) | | Current period change excluding amounts reclassified from accumulated other comprehensive income (1) | 661 | | | 102 | | | 763 | |
Amounts reclassified from accumulated other comprehensive income | | Amounts reclassified from accumulated other comprehensive income | — | | | 87 | | | 87 | |
Total change in accumulated other comprehensive income | | Total change in accumulated other comprehensive income | 661 | | | 189 | | | 850 | |
Balance as of March 31, 2022 | | Balance as of March 31, 2022 | (10,838) | | | (2,076) | | | (12,914) | |
(1)Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $79 million and $191 million net of taxes.in 2022 and 2021, respectively.
| | Three Months Ended March 31, | | |
Amounts Reclassified Out of Accumulated Other Comprehensive Income - Before-tax Income/(Expense) | | Amounts Reclassified Out of Accumulated Other Comprehensive Income - Before-tax Income/(Expense) | | | Three Months Ended March 31, |
Amounts Reclassified Out of Accumulated Other Comprehensive Income - Before-tax Income/(Expense) | | 2021 | | 2020 | | | | 2022 | | 2021 |
| | | (millions of dollars) | | | | | (millions of dollars) |
| Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | | | | | | Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | | | |
(Statement of Income line: Non-service pension and postretirement benefit expense) | (Statement of Income line: Non-service pension and postretirement benefit expense) | | (484) | | | (262) | | | (Statement of Income line: Non-service pension and postretirement benefit expense) | | | (120) | | | (484) | |
| | Three Months Ended March 31, | | |
Income Tax (Expense)/Credit For Components of Other Comprehensive Income | | Income Tax (Expense)/Credit For Components of Other Comprehensive Income | | | Three Months Ended March 31, |
Income Tax (Expense)/Credit For Components of Other Comprehensive Income | | 2021 | | 2020 | | | | 2022 | | 2021 |
| | | (millions of dollars) | | | | | (millions of dollars) |
Foreign exchange translation adjustment | Foreign exchange translation adjustment | | (53) | | | 7 | | | Foreign exchange translation adjustment | | | (22) | | | (53) | |
Postretirement benefits reserves adjustment (excluding amortization) | Postretirement benefits reserves adjustment (excluding amortization) | | (58) | | | (62) | | | Postretirement benefits reserves adjustment (excluding amortization) | | | (40) | | | (58) | |
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | | (106) | | | (58) | | | Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | | | (27) | | | (106) | |
Total | Total | | (217) | | | (113) | | | Total | | | (89) | | | (217) | |
5. Earnings Per Share
| | | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
| | | 2021 | | 2020 | | | | | 2022 | | 2021 |
Earnings per common share | Earnings per common share | | | | | | Earnings per common share | | | |
Net income (loss) attributable to ExxonMobil (millions of dollars) | Net income (loss) attributable to ExxonMobil (millions of dollars) | | 2,730 | | | (610) | | | Net income (loss) attributable to ExxonMobil (millions of dollars) | | | 5,480 | | | 2,730 | |
Weighted average number of common shares outstanding (millions of shares) | Weighted average number of common shares outstanding (millions of shares) | | 4,272 | | | 4,270 | | | Weighted average number of common shares outstanding (millions of shares) | | | 4,266 | | | 4,272 | |
Earnings (Loss) per common share (dollars) (1) | | 0.64 | | | (0.14) | | | |
Earnings (loss) per common share (dollars) (1) | | Earnings (loss) per common share (dollars) (1) | | | 1.28 | | | 0.64 | |
Dividends paid per common share (dollars) | Dividends paid per common share (dollars) | | 0.87 | | | 0.87 | | | Dividends paid per common share (dollars) | | | 0.88 | | | 0.87 | |
(1)The calculation of earnings (loss) per common share and earnings (loss) per common share – assuming dilution are the same in each period shown.
6. Pension and Other Postretirement Benefits
| | | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
| | | 2021 | | 2020 | | | | | 2022 | | 2021 |
| | | (millions of dollars) | | | | | (millions of dollars) |
Components of net benefit cost | Components of net benefit cost | | | | | | Components of net benefit cost | | | |
Pension Benefits - U.S. | Pension Benefits - U.S. | | | | | | Pension Benefits - U.S. | | | |
Service cost | Service cost | | 225 | | | 235 | | | Service cost | | | 179 | | | 225 | |
Interest cost | Interest cost | | 139 | | | 177 | | | Interest cost | | | 129 | | | 139 | |
Expected return on plan assets | Expected return on plan assets | | (180) | | | (175) | | | Expected return on plan assets | | | (140) | | | (180) | |
Amortization of actuarial loss/(gain) and prior service cost | | 55 | | | 79 | | | |
Amortization of actuarial loss/(gain) | | Amortization of actuarial loss/(gain) | | | 39 | | | 61 | |
Amortization of prior service cost | | Amortization of prior service cost | | | (7) | | | (6) | |
Net pension enhancement and curtailment/settlement cost | Net pension enhancement and curtailment/settlement cost | | 298 | | | 52 | | | Net pension enhancement and curtailment/settlement cost | | | 37 | | | 298 | |
Net benefit cost | Net benefit cost | | 537 | | | 368 | | | Net benefit cost | | | 237 | | | 537 | |
| Pension Benefits - Non-U.S. | Pension Benefits - Non-U.S. | | | Pension Benefits - Non-U.S. | | | |
Service cost | Service cost | | 195 | | | 175 | | | Service cost | | | 150 | | | 195 | |
Interest cost | Interest cost | | 130 | | | 161 | | | Interest cost | | | 160 | | | 130 | |
Expected return on plan assets | Expected return on plan assets | | (258) | | | (222) | | | Expected return on plan assets | | | (213) | | | (258) | |
Amortization of actuarial loss/(gain) and prior service cost | | 123 | | | 119 | | | |
Amortization of actuarial loss/(gain) | | Amortization of actuarial loss/(gain) | | | 47 | | | 108 | |
Amortization of prior service cost | | Amortization of prior service cost | | | 12 | | | 15 | |
Net pension enhancement and curtailment/settlement cost | Net pension enhancement and curtailment/settlement cost | | 12 | | | 0 | | | Net pension enhancement and curtailment/settlement cost | | | — | | | 12 | |
Net benefit cost | Net benefit cost | | 202 | | | 233 | | | Net benefit cost | | | 156 | | | 202 | |
| Other Postretirement Benefits | Other Postretirement Benefits | | | Other Postretirement Benefits | | | |
Service cost | Service cost | | 49 | | | 45 | | | Service cost | | | 40 | | | 49 | |
Interest cost | Interest cost | | 56 | | | 70 | | | Interest cost | | | 55 | | | 56 | |
Expected return on plan assets | Expected return on plan assets | | (5) | | | (4) | | | Expected return on plan assets | | | (3) | | | (5) | |
Amortization of actuarial loss/(gain) and prior service cost | | 8 | | | 12 | | | |
Amortization of actuarial loss/(gain) | | Amortization of actuarial loss/(gain) | | | 3 | | | 19 | |
Amortization of prior service cost | | Amortization of prior service cost | | | (11) | | | (11) | |
Net benefit cost | Net benefit cost | | 108 | | | 123 | | | Net benefit cost | | | 84 | | | 108 | |
7. Financial Instruments and Derivatives
Financial Instruments. The estimated fair value of financial instruments at March 31, 2021,2022 and December 31, 2020,2021, and the related hierarchy level for the fair value measurement iswas as follows:
| | | | At March 31, 2021 | | | March 31, 2022 |
| | | (millions of dollars) | | | (millions of dollars) |
| | | Fair Value | | | | | | | | | | | Fair Value | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total Gross Assets & Liabilities | | Effect of Counterparty Netting | | Effect of Collateral Netting | | Difference in Carrying Value and Fair Value | | Net Carrying Value | | | Level 1 | | Level 2 | | Level 3 | | Total Gross Assets & Liabilities | | Effect of Counterparty Netting | | Effect of Collateral Netting | | Difference in Carrying Value and Fair Value | | Net Carrying Value |
Assets | Assets | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | |
| | Derivative assets (1) | 1,338 | | | 264 | | | — | | | 1,602 | | | (1,332) | | | (62) | | | — | | | 208 | | | Derivative assets (1) | 6,886 | | | 2,890 | | | — | | | 9,776 | | | (7,888) | | | (60) | | | — | | | 1,828 | |
| | Advances to/receivables | | | Advances to/receivables | |
| | from equity companies (2)(6) | — | | | 3,115 | | | 6,083 | | | 9,198 | | | — | | | — | | | (233) | | | 8,965 | | | from equity companies (2)(6) | — | | | 2,631 | | | 5,491 | | | 8,122 | | | — | | | — | | | 435 | | | 8,557 | |
| | Other long-term | | | Other long-term | |
| | financial assets (3) | 1,157 | | | — | | | 1,046 | | | 2,203 | | | — | | — | | | 120 | | | 2,323 | | | financial assets (3) | 1,152 | | | — | | | 1,049 | | | 2,201 | | | — | | | — | | | 165 | | | 2,366 | |
Liabilities | Liabilities | | Liabilities | |
| | Derivative liabilities (4) | 1,389 | | | 329 | | | — | | | 1,718 | | | (1,332) | | | (113) | | | — | | | 273 | | | Derivative liabilities (4) | 7,459 | | | 3,940 | | | — | | | 11,399 | | | (7,888) | | | (632) | | | — | | | 2,879 | |
| | Long-term debt (5) | 45,594 | | | 111 | | | 4 | | | 45,709 | | | — | | | — | | | (2,236) | | | 43,473 | | | Long-term debt (5) | 40,367 | | | 76 | | | 2 | | | 40,445 | | | — | | | — | | | (140) | | | 40,305 | |
| | Long-term obligations | | | Long-term obligations | |
| | to equity companies (6) | — | | | — | | | 3,567 | | | 3,567 | | | — | | | — | | | (288) | | | 3,279 | | | to equity companies (6) | — | | | — | | | 2,969 | | | 2,969 | | | — | | | — | | | (94) | | | 2,875 | |
| | Other long-term | | | Other long-term | |
| | financial liabilities (7) | — | | | — | | | 979 | | | 979 | | | — | | | — | | | 55 | | | 1,034 | | | financial liabilities (7) | — | | | — | | | 886 | | | 886 | | | — | | | — | | | 53 | | | 939 | |
| | | | At December 31, 2020 | | | December 31, 2021 |
| | | (millions of dollars) | | | (millions of dollars) |
| | | Fair Value | | | | | | | | | | | Fair Value | | | | | | | | |
| | | Level 1 | | Level 2 | | Level 3 | | Total Gross Assets & Liabilities | | Effect of Counterparty Netting | | Effect of Collateral Netting | | Difference in Carrying Value and Fair Value | | Net Carrying Value | | | Level 1 | | Level 2 | | Level 3 | | Total Gross Assets & Liabilities | | Effect of Counterparty Netting | | Effect of Collateral Netting | | Difference in Carrying Value and Fair Value | | Net Carrying Value |
Assets | Assets | | | | | | | | | | | | | | | | | Assets | | | | | | | | | | | | | | | | |
| | Derivative assets (1) | 1,247 | | | 194 | | | — | | | 1,441 | | | (1,282) | | | (6) | | | — | | | 153 | | | Derivative assets (1) | 1,422 | | | 1,523 | | | — | | | 2,945 | | | (1,930) | | | (28) | | | — | | | 987 | |
| | Advances to/receivables | | | Advances to/receivables | |
| | from equity companies (2)(6) | — | | | 3,275 | | | 5,904 | | | 9,179 | | | — | | | — | | | (367) | | | 8,812 | | | from equity companies (2)(6) | — | | | 3,076 | | | 5,373 | | | 8,449 | | | — | | | — | | | (123) | | | 8,326 | |
| | Other long-term | | | Other long-term | |
| | financial assets (3) | 1,235 | | | — | | | 944 | | | 2,179 | | | — | | | — | | | 125 | | | 2,304 | | | financial assets (3) | 1,134 | | | — | | | 1,058 | | | 2,192 | | | — | | | — | | | 181 | | | 2,373 | |
Liabilities | Liabilities | | Liabilities | |
| | Derivative liabilities (4) | 1,443 | | | 254 | | | — | | | 1,697 | | | (1,282) | | | (202) | | | — | | | 213 | | | Derivative liabilities (4) | 1,701 | | | 2,594 | | | — | | | 4,295 | | | (1,930) | | | (306) | | | — | | | 2,059 | |
| | Long-term debt (5) | 50,263 | | | 125 | | | 4 | | | 50,392 | | | — | | | — | | | (4,890) | | | 45,502 | | | Long-term debt (5) | 44,454 | | | 88 | | | 3 | | | 44,545 | | | — | | | — | | | (2,878) | | | 41,667 | |
| | Long-term obligations | | | Long-term obligations | |
| | to equity companies (6) | — | | | — | | | 3,530 | | | 3,530 | | | — | | | — | | | (277) | | | 3,253 | | | to equity companies (6) | — | | | — | | | 3,084 | | | 3,084 | | | — | | | — | | | (227) | | | 2,857 | |
| | Other long-term | | | Other long-term | |
| | financial liabilities (7) | — | | | — | | | 964 | | | 964 | | | — | | | — | | | 44 | | | 1,008 | | | financial liabilities (7) | — | | | — | | | 902 | | | 902 | | | — | | | — | | | 58 | | | 960 | |
(1)Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles - net
(2)Included in the Balance Sheet line: Investments, advances and long-term receivables
(3)Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles - net
(4)Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations
(5)Excluding finance lease obligations
(6)Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company.
(7)Included in the Balance Sheet line: Other long-term obligations. Includes contingent consideration related to a prior year acquisition where fair value is based on expected drilling activities and discount rates.
At March 31, 2021,2022 and December 31, 2020,2021, respectively, the Corporation had $447$1,347 million and $504$641 million of collateral under master netting arrangements not offset against the derivatives on the Consolidated Balance Sheet, primarily related to initial margin requirements.
The Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to foreign exchange fluctuations is reported in accumulated other comprehensive income. As of March 31, 2021,2022, the Corporation has designated $5.3$5.0 billion of its Euro-denominated long-term debt and related accrued interest as a net investment hedge of its European business. The net investment hedge is deemed to be perfectly effective.
The Corporation had undrawn short-term committed lines of credit of $10.7 billion and undrawn long-term committed lines of credit of $0.6 billion as of first quarter 2022.
Derivative Instruments. The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of the Upstream, Downstream and Chemical businesses reduce the Corporation’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and for trading purposes.to generate returns from trading. Commodity contracts held for trading purposes are presented in the Consolidated Statement of Income on a net basis in the line “Sales and other operating revenue.” The Corporation’s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation’s financial position as of March 31, 2021,2022 and December 31, 2020,2021, or results of operations for the periods ended March 31, 2021,2022 and 2020.2021.
Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting and monitoring of derivative activity.
The net notional long/(short) position of derivative instruments at March 31, 2021,2022 and December 31, 2020,2021, was as follows:
| | | March 31, | | December 31, | | March 31, | | December 31, |
| | 2021 | | 2020 | | 2022 | | 2021 |
| | (millions) | | (millions) |
Crude oil (barrels) | Crude oil (barrels) | 71 | | | 40 | | Crude oil (barrels) | 91 | | | 82 | |
Petroleum products (barrels) | Petroleum products (barrels) | (53) | | | (46) | | Petroleum products (barrels) | (37) | | | (48) | |
Natural Gas (MMBTUs) | (532) | | | (500) | | |
Natural gas (MMBTUs) | | Natural gas (MMBTUs) | (101) | | | (115) | |
|
Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Consolidated Statement of Income are included in the following lines on a before-tax basis:
| | | | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
| | | 2021 | | 2020 | | | | | 2022 | | 2021 |
| | | (millions of dollars) | | | | | (millions of dollars) |
Sales and other operating revenue | Sales and other operating revenue | | (512) | | | 1,236 | | | Sales and other operating revenue | | | (2,535) | | | (512) | |
Crude oil and product purchases | Crude oil and product purchases | | 1 | | | (352) | | | Crude oil and product purchases | | | (26) | | | 1 | |
Total | Total | | (511) | | | 884 | | | Total | | | (2,561) | | | (511) | |
8. Disclosures about Segments and Related Information
| | | Three Months Ended March 31, | | | Three Months Ended March 31, | |
| | | 2021 | | 2020 | | | | 2022 | | 2021 | |
Earnings (Loss) After Income Tax | Earnings (Loss) After Income Tax | | (millions of dollars) | | Earnings (Loss) After Income Tax | | (millions of dollars) | |
Upstream | Upstream | | | | | | Upstream | | | | | |
United States | United States | | 363 | | | (704) | | | United States | | 2,376 | | | 363 | | |
Non-U.S. | | 2,191 | | | 1,240 | | | |
Non-U.S. (1) | | Non-U.S. (1) | | 2,112 | | | 2,191 | | |
Downstream | Downstream | | | Downstream | | |
United States | United States | | (113) | | | (101) | | | United States | | 685 | | | (113) | | |
Non-U.S. | Non-U.S. | | (277) | | | (510) | | | Non-U.S. | | (353) | | | (277) | | |
Chemical | Chemical | | | Chemical | | |
United States | United States | | 715 | | | 288 | | | United States | | 819 | | | 715 | | |
Non-U.S. | Non-U.S. | | 700 | | | (144) | | | Non-U.S. | | 535 | | | 700 | | |
Corporate and financing | | (849) | | | (679) | | | |
Corporate and Financing (1) | | Corporate and Financing (1) | | (694) | | | (849) | | |
Corporate total | Corporate total | | 2,730 | | | (610) | | | Corporate total | | 5,480 | | | 2,730 | | |
| (1) Results for 2022 include charges of $3.3 billion in non-U.S. Upstream and $0.1 billion in Corporate and Financing associated with the Corporation's interest in Sakhalin-1. (See Note 2 to Condensed Consolidated Financial Statements) | | (1) Results for 2022 include charges of $3.3 billion in non-U.S. Upstream and $0.1 billion in Corporate and Financing associated with the Corporation's interest in Sakhalin-1. (See Note 2 to Condensed Consolidated Financial Statements) | |
| | Sales and Other Operating Revenue | Sales and Other Operating Revenue | | | Sales and Other Operating Revenue | | |
Upstream | Upstream | | | Upstream | | |
United States | United States | | 1,885 | | | 1,777 | | | United States | | 2,656 | | | 1,885 | | |
Non-U.S. | Non-U.S. | | 3,094 | | | 2,567 | | | Non-U.S. | | 6,343 | | | 3,094 | | |
Downstream | Downstream | | | Downstream | | |
United States | United States | | 16,078 | | | 15,384 | | | United States | | 25,356 | | | 16,078 | | |
Non-U.S. | Non-U.S. | | 28,613 | | | 29,304 | | | Non-U.S. | | 43,609 | | | 28,613 | | |
Chemical | Chemical | | | Chemical | | |
United States | United States | | 3,091 | | | 2,296 | | | United States | | 3,982 | | | 3,091 | | |
Non-U.S. | Non-U.S. | | 4,887 | | | 3,800 | | | Non-U.S. | | 5,781 | | | 4,887 | | |
Corporate and financing | | (96) | | | 6 | | | |
Corporate and Financing | | Corporate and Financing | | 7 | | | (96) | | |
Corporate total | Corporate total | | 57,552 | | | 55,134 | | | Corporate total | | 87,734 | | | 57,552 | | |
| Intersegment Revenue | Intersegment Revenue | | | Intersegment Revenue | | |
Upstream | Upstream | | | Upstream | | |
United States | United States | | 3,323 | | | 2,273 | | | United States | | 6,191 | | | 3,323 | | |
Non-U.S. | Non-U.S. | | 6,817 | | | 6,387 | | | Non-U.S. | | 10,835 | | | 6,817 | | |
Downstream | Downstream | | | Downstream | | |
United States | United States | | 3,953 | | | 3,952 | | | United States | | 8,261 | | | 3,953 | | |
Non-U.S. | Non-U.S. | | 5,381 | | | 5,124 | | | Non-U.S. | | 9,503 | | | 5,381 | | |
Chemical | Chemical | | | Chemical | | |
United States | United States | | 1,950 | | | 1,766 | | | United States | | 2,863 | | | 1,950 | | |
Non-U.S. | Non-U.S. | | 1,231 | | | 1,263 | | | Non-U.S. | | 2,213 | | | 1,231 | | |
Corporate and financing | | 57 | | | 55 | | | |
Corporate and Financing | | Corporate and Financing | | 57 | | | 57 | | |
| Geographic | Geographic | | | | | | Geographic | | | |
| | | Three Months Ended March 31, | | | | | Three Months Ended March 31, |
Sales and Other Operating Revenue | Sales and Other Operating Revenue | | 2021 | | 2020 | | Sales and Other Operating Revenue | | | 2022 | | 2021 |
| | | (millions of dollars) | | | | | (millions of dollars) |
United States | United States | | 21,054 | | | 19,457 | | | United States | | | 31,994 | | | 21,054 | |
Non-U.S. | Non-U.S. | | 36,498 | | | 35,677 | | | Non-U.S. | | | 55,740 | | | 36,498 | |
Total | Total | | 57,552 | | | 55,134 | | | Total | | | 87,734 | | | 57,552 | |
| Significant Non-U.S. revenue sources include: (1) | Significant Non-U.S. revenue sources include: (1) | | | Significant Non-U.S. revenue sources include: (1) | | | |
United Kingdom | | United Kingdom | | | 7,548 | | | 2,943 | |
Canada | Canada | | 4,258 | | | 3,823 | | | Canada | | | 6,995 | | | 4,258 | |
France | | France | | | 4,356 | | | 2,782 | |
Singapore | Singapore | | 3,435 | | | 2,616 | | | Singapore | | | 4,322 | | | 3,435 | |
United Kingdom | | 2,943 | | | 3,691 | | | |
France | | 2,782 | | | 2,589 | | | |
Belgium | Belgium | | 1,989 | | | 1,889 | | | Belgium | | | 2,836 | | | 1,989 | |
Italy | Italy | | 1,865 | | | 1,958 | | | Italy | | | 2,836 | | | 1,865 | |
Australia | | 1,729 | | | 1,654 | | | |
(1)Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in Non-U.S. operations where attribution to a specific country is not practicable.
9. Sale of United Kingdom AssetsDivestment Activities
ExxonMobilIn February 2022, the Corporation signed an agreement with HitecVision, through its wholly-owned portfolio company NEOSeplat Energy Offshore Limited for the sale of most of its non-operated upstream assets inMobil Producing Nigeria Unlimited. The agreement is subject to certain conditions precedent and government approvals. If these are attained, the United Kingdom central and northern North Sea for more than $1 billion. The transaction iswould be expected to close nearno earlier than mid-year 2021, subject to standard conditions precedent, including regulatory and third-party approvals.2022. The agreed sales price is subject to interim period adjustments from the effective date of January 1, 2021 to the closing date, and has an additional upside potential for further adjustments based on commodity prices and production levels. Assuming a mid-2022 closing date and based on currently available information, the Corporation expects to recognize a loss of approximately $0.3 billion in contingent payments, based on production level$500 million when and commodity prices. Estimated total cash flow fromif the potential divestment will range from $0.7 billionultimately meets held-for-sale criteria under ASC 360, following the resolution of certain conditions precedent noted above.
Following the end of the first quarter, the Corporation executed an agreement for the sale of ExxonMobil Exploration and Production Romania, consisting of certain unproved Upstream assets, to $1.2 billion, of which $0.7 billionRomgaz S.A. The transaction is anticipated to $0.8 billion is expected in 2021close mid-year 2022, and the remainder in future years. The Corporation expects to recognize a gain at closing. Estimated gain and net cash flow could change due to market factors and timingon the sale of close.approximately $300 million.
10.Restructuring Activities
During 2020, ExxonMobil conducted an extensive global review of staffing levels and subsequently commenced targeted workforce reductions within a number of countries to improve efficiency and reduce costs. The programs, which are expected to be substantially completed by the end of 2021, include both voluntary and involuntary employee separations and reductions in contractors.
During the first quarter of 2021, the Corporation recorded before-tax charges of $39 million, consisting primarily of employee separation costs, from workforce reductions in Singapore and Europe associated with the global review of staffing levels. These costs are captured in “Selling, general and administrative expenses” on the Statement of Income.
For the full year, the Corporation estimates charges of up to $200 million related to planned workforce reduction programs associated with the global review of staffing levels. This does not include charges related to employee reductions associated with any portfolio changes or other projects.
The following table summarizes the reserves and charges related to the workforce reduction programs associated with the global review of staffing levels, which are recorded in “Accounts payable and accrued liabilities.”
| | | | | |
| 2021 |
| (millions of dollars) |
Balance at January 1 | 403 | |
Additions/adjustments | 39 | |
Payments made | (130) | |
Balance at March 31 | 312 | |
EXXON MOBIL CORPORATION
Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations
In early 2020,During the balance ofCOVID-19 pandemic, industry investment to maintain and increase production capacity was restrained to preserve capital, resulting in underinvestment and supply andtightness as demand for petroleum and petrochemical products experienced two significant disruptive effects. Onrecovered. Across late 2021 and early 2022, this dynamic, along with supply chain constraints, and a continuation of demand recovery led to a steady increase in oil and natural gas prices. In the demand side,first quarter of 2022, tightness in the COVID-19 pandemic spread rapidly through most areasoil and natural gas markets was further exacerbated by Russia’s invasion of Ukraine and subsequent sanctions imposed upon business and other activities in Russia. The price of Brent crude oil and certain regional natural gas indicators increased to levels not seen for several years. Additionally, by the end of the world resultingfirst quarter, refining margins improved to levels above the 10-year range, and the tight supply and demand balance is expected to persist.
In early March, in substantial reductionsresponse to Russia’s military action in consumerUkraine, the Corporation announced that it plans to discontinue operations on the Sakhalin-1 project (“Sakhalin”) and business activitydevelop steps to exit the venture. The Corporation remains focused on protecting the safety of employees, operations, and significantly reduced demandthe environment. The Corporation is complying with all applicable laws and sanctions and is currently engaged in transitioning Sakhalin-1 operating activities to another party.
The Corporation’s first quarter results include after-tax charges of $3.4 billion largely representing the impairment of its operations related to Sakhalin (see Note 2 to Condensed Consolidated Financial Statements). Efforts to transition operatorship to a third party and exit the venture is expected to result in limited hydrocarbon sales and cash flows for crudethe Corporation’s account during the second quarter of 2022, and none following that period. For reference, excluding the impact of impairments and other charges, after-tax earnings related to the Corporation’s interest in Sakhalin in the first quarter were approximately $0.2 billion, and combined oil naturaland gas and petroleum products. This reductionproduction was approximately 65 thousand oil-equivalent barrels per day. The Corporation's exit from the project would result in demand coincided with announcements of increased production in certain key oil-producing countriesquantities estimated at 150 million oil-equivalent barrels no longer qualifying as proved reserves, which led to increases in inventory levels and sharp declines in prices for crude oil, natural gas, and petroleum products.
While demand for petroleum and petrochemical products has rebounded, the lingering effectsrepresented less than one percent of the weak 2020 business environment continued to have a negative impact on financial results in 2021 when compared to periods prior to the pandemic. SignsCorporation's 18.5 billion oil-equivalent barrels of improvement are emerging with stronger prices and margins across all businesses when compared to the fourth quarter 2020. However, Downstream margins remain lower when compared to historical levels over the last decade.
proved reserves at year-end 2021.
FUNCTIONAL EARNINGS SUMMARY
| | | | | | | | | | | | | | | | | | |
| | First Three Months | | |
Earnings (Loss) (U.S. GAAP) | | 2021 | | 2020 | | | | |
| | (millions of dollars) | | |
Upstream | | | | | | | | |
United States | | 363 | | | (704) | | | | | |
Non-U.S. | | 2,191 | | | 1,240 | | | | | |
Downstream | | | | | | | | |
United States | | (113) | | | (101) | | | | | |
Non-U.S. | | (277) | | | (510) | | | | | |
Chemical | | | | | | | | |
United States | | 715 | | | 288 | | | | | |
Non-U.S. | | 700 | | | (144) | | | | | |
Corporate and financing | | (849) | | | (679) | | | | | |
Net income (loss) attributable to ExxonMobil (U.S. GAAP) | | 2,730 | | | (610) | | | | | |
| | | | | | | | |
Earnings (Loss) per common share (dollars) | | 0.64 | | | (0.14) | | | | | |
| | | | | | | | |
Earnings (Loss) per common share - assuming dilution (dollars) | | 0.64 | | | (0.14) | | | | | |
Earnings (loss) excluding Identified Items, 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 in a given quarter may be less than $250 million when the item impacts several segments or several periods. 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 (loss) 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. | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended March 31, 2022 | Upstream | | Downstream | | Chemical | | Corporate and Financing | | Total |
U.S. | Non-U.S. | | U.S. | Non-U.S. | | U.S. | Non-U.S. | | |
| (millions of dollars) |
Earnings (loss) (U.S. GAAP) | 2,376 | 2,112 | | 685 | (353) | | 819 | 535 | | (694) | | 5,480 |
Identified Items | | | | | | | | | | | | |
Impairments | — | (2,877) | | — | — | | — | — | | (98) | | (2,975) |
Other - Russia impacts | — | (378) | | — | — | | — | — | | — | | (378) |
Earnings (loss) excluding Identified Items | 2,376 | 5,367 | | 685 | (353) | | 819 | 535 | | (596) | | 8,833 |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Three Months Ended March 31, 2021 | Upstream | | Downstream | | Chemical | | Corporate and Financing | | Total |
U.S. | Non-U.S. | | U.S. | Non-U.S. | | U.S. | Non-U.S. | | |
| (millions of dollars) |
Earnings (loss) (U.S. GAAP) | 363 | 2,191 | | (113) | (277) | | 715 | 700 | | (849) | | 2,730 |
Identified Items | | | | | | | | | | | | |
Severance charges | — | — | | — | — | | — | — | | (31) | | (31) |
Earnings (loss) excluding Identified Items | 363 | 2,191 | | (113) | (277) | | 715 | 700 | | (818) | | 2,761 |
References in this discussion to Corporate earnings (loss) mean net income (loss) attributable to ExxonMobil (U.S. GAAP) from the consolidated income statement.Consolidated Statement of Income. Unless otherwise indicated, references to earnings (loss), Upstream, Downstream,
Chemical and Corporate and financingFinancing segment earnings (loss), and earnings (loss) per share are ExxonMobil's share after excluding amounts attributable to noncontrolling interests.
REVIEW OF FIRST QUARTER 20212022 RESULTS
ExxonMobil’s first quarter 20212022 earnings were $2.7$5.5 billion, or $0.64$1.28 per diluted share, compared with a lossearnings of $0.6$2.7 billion a year earlier. The increase in earnings was primarily the result of the absence of prior year unfavorable non-operational impacts, including an inventory write-down and impairments;driven by higher Upstream realizations and Chemical margins; and lower expenses. These impacts wereDownstream margins partly offset by lower Downstream margins, winter storm impacts, unfavorable foreign exchange impacts, and lower Upstream volumes.charges related to the company's Russia Sakhalin-1 operation.
Oil-equivalent production was 3.83.7 million barrels per day, down 63 percent from the prior year. Excluding entitlement effects, divestments, and government mandates, oil-equivalent production was down 2 percent from the prior year.
The Corporation distributed $3.7$3.8 billion in dividends to shareholders.
| | | | | | | | | | | | | | | | | | |
| | First Three Months | | |
| | 2021 | | 2020 | | | | |
| | (millions of dollars) | | |
Upstream results | | | | | | | | |
United States | | 363 | | | (704) | | | | | |
Non-U.S. | | 2,191 | | | 1,240 | | | | | |
Total | | 2,554 | | | 536 | | | | | |
shareholders and bought back $2.1 billion of common stock.
UPSTREAM
Upstream earnings were $2,554 million in the first quarter of 2021, compared with earnings of $536 million in the first quarter of 2020.Financial Results
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
Earnings (loss) (U.S. GAAP) | | (millions of dollars) | | | | |
United States | | 2,376 | | | 363 | | | | | |
Non-U.S. | | 2,112 | | | 2,191 | | | | | |
Total | | 4,488 | | | 2,554 | | | | | |
Identified Items (1) | | | | | | | | |
United States | | — | | | — | | | | | |
Non-U.S. | | (3,255) | | | — | | | | | |
Total | | (3,255) | | | — | | | | | |
Earnings (loss) excluding Identified Items (1) | | | | | | | | |
United States | | 2,376 | | | 363 | | | | | |
Non-U.S. | | 5,367 | | | 2,191 | | | | | |
Total | | 7,743 | | | 2,554 | | | | | |
•
Upstream Earnings Factor Analysis
(millions of dollars)
PriceRealizations– Higher realizations increased earnings by $1,310$5,930 million driven by higher liquidsas average realizations of $1,390 million.for crude oil increased 68%, while natural gas realizations increased 137%.
•Volume – Unfavorable volume and mix effects reduceddecreased earnings by $370$810 million reflecting impacts from the reduced Groningen production limit, higher downtime including the effects of weather, and lower entitlements due to lower liquids sales volumes of $390 millionprices, partly offset by gas volume mixgrowth in the Permian Basin and timing of $20 million.Guyana.
•Other – All other items increased earnings by $1,080$70 million.
Identified Items (1) –1Q 2022 $(3,255) million loss as a result of the absence of prior year unfavorable non-operational impacts associated with impairments of $360 million and an inventory write down of $260 million, and lower expenses of $700 million were partly offset by unfavorable foreign exchange impacts of $220 million.company's decision to discontinue operations at the Russia Sakhalin-1 project.
•(1)The unfavorable impact Refer to Functional Earnings Summary for definition of the winter storm on UpstreamIdentified Items and earnings included in the factors above, was $240 million.(loss) excluding Identified Items.
Upstream earnings were $363 million, up $1,067 million from the prior year quarter.Operational Results
•Non-U.S. Upstream earnings were $2,191 million, up $951 million from the prior year quarter. | | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | | | |
| | 2022 | | 2021 | | | | |
Production of crude oil, natural gas liquids, bitumen and synthetic oil | | | | | | | | |
Net production | | (thousands of barrels daily) |
United States | | 753 | | | 665 | | | | | |
Canada/Other Americas | | 474 | | | 575 | | | | | |
Europe | | 4 | | | 35 | | | | | |
Africa | | 257 | | | 253 | | | | | |
Asia | | 738 | | | 691 | | | | | |
Australia/Oceania | | 40 | | | 39 | | | | | |
Worldwide | | 2,266 | | | 2,258 | | | | | |
| | | | | | | | |
Natural gas production available for sale | | | | | | | | |
Net production | | (millions of cubic feet daily) |
United States | | 2,777 | | | 2,767 | | | | | |
Canada/Other Americas | | 182 | | | 216 | | | | | |
Europe | | 770 | | | 1,403 | | | | | |
Africa | | 58 | | | 24 | | | | | |
Asia | | 3,340 | | | 3,599 | | | | | |
Australia/Oceania | | 1,325 | | | 1,164 | | | | | |
Worldwide | | 8,452 | | | 9,173 | | | | | |
| | | | | | | | |
| | (thousands of oil-equivalent barrels daily) |
Oil-equivalent production (1) | | 3,675 | | | 3,787 | | | | | |
| | | | | | | | |
(1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. | | | | |
•On an oil-equivalent basis, production decreased 6 percent from the first quarter of 2020.1Q 2022 versus 1Q 2021
•Liquids production totaled– 2.3 million barrels per day down 222,000increased 8 thousand barrels per day from 2021, reflecting easing government mandated curtailments, growth in the impactsPermian Basin and Guyana, partly offset by higher downtime including the effects of government mandates,weather, lower entitlements due to higher prices, and the winter storm.divestment impacts.
•Natural gas production was 9.2available for sale – 8.5 billion cubic feet per day down 223decreased 721 million cubic feet per day from 2021, reflecting impacts from the impacts of decline, higher downtime, the winter storm, and thereduced Groningen production limit, partly offset by higher demanddivestments, and project growth.entitlements.
| | | | | | | | | | |
| | First Quarter | | |
Upstream additional information | | (thousands of barrels daily) | | |
Volumes reconciliation (Oil-equivalent production) (1) | | | | |
2020 | | 4,046 | | |
Entitlements - Net Interest | | (3) | | |
Entitlements - Price / Spend / Other | | (51) | | |
Government Mandates | | (124) | | |
Divestments | | (15) | | |
Growth / Other | | (66) | | |
2021 | | 3,787 | | |
Upstream Additional Information | | | | | | | | | | |
| | | | Three Months Ended March 31 |
| | | | (thousands of barrels daily) |
Volumes reconciliation (Oil-equivalent production) (1) | | | | |
2021 | | | | 3,787 |
Entitlements - Net Interest | | | | (30) |
Entitlements - Price / Spend / Other | | | | (44) |
Government Mandates | | | | 113 |
Divestments | | | | (62) |
Other | | | | (89) |
2022 | | | | 3,675 |
(1)Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.
Listed below are descriptions of ExxonMobil’s volumes reconciliation factors which are provided to facilitate understanding of the terms.
Entitlements - Net Interest are changes to ExxonMobil’s share of production volumes caused by non-operational changes to volume-determining factors. These factors consist of net interest changes specified in Production Sharing Contracts (PSCs) which typically occur when cumulative investment returns or production volumes achieve defined thresholds, changes in equity upon achieving pay-out in partner investment carry situations, equity redeterminations as specified in venture agreements, or as a result of the termination or expiry of a concession. Once a net interest change has occurred, it typically will not be reversed by subsequent events, such as lower crude oil prices.
Entitlements - Price, Spend and Other are changes to ExxonMobil’s share of production volumes resulting from temporary changes to non-operational volume-determining factors. These factors include changes in oil and gas prices or spending levels from one period to another. According to the terms of contractual arrangements or government royalty regimes, price or spending variability can increase or decrease royalty burdens and/or volumes attributable to ExxonMobil. For example, at higher prices, fewer barrels are required for ExxonMobil to recover its costs. These effects generally vary from period to period with field spending patterns or market prices for oil and natural gas. Such factors can also include other temporary changes in net interest as dictated by specific provisions in production agreements.
Government Mandates are changes to ExxonMobil's sustainable production levels due to temporary non-operational production limits imposed by governments, generally upon a sector, type or method of production.
Divestments are reductions in ExxonMobil’s production arising from commercial arrangements to fully or partially reduce equity in a field or asset in exchange for financial or other economic consideration.
Growth and Other factors comprise all other operational and non-operational factors not covered by the above definitions that may affect volumes attributable to ExxonMobil. Such factors include, but are not limited to, production enhancements from project and work program activities, acquisitions including additions from asset exchanges, downtime, market demand, natural field decline, and any fiscal or commercial terms that do not affect entitlements.
| | | | | | | | | | | | | | | | | | |
| | First Three Months | | |
| | 2021 | | 2020 | | | | |
| | (millions of dollars) | | |
Downstream results | | | | | | | | |
United States | | (113) | | | (101) | | | | | |
Non-U.S. | | (277) | | | (510) | | | | | |
Total | | (390) | | | (611) | | | | | |
DOWNSTREAM
Downstream results were a lossFinancial Results
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
Earnings (loss) (U.S. GAAP) | | (millions of dollars) | | | | |
United States | | 685 | | | (113) | | | | | |
Non-U.S. | | (353) | | | (277) | | | | | |
Total | | 332 | | | (390) | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Earnings (loss) excluding Identified Items (1) | | | | | | | | |
United States | | 685 | | | (113) | | | | | |
Non-U.S. | | (353) | | | (277) | | | | | |
Total | | 332 | | | (390) | | | | | |
(1) Refer to Functional Earnings Summary for definition of $390 million in the first quarter of 2021, a $221 million improvement from the first quarter of 2020.
•Margins decreasedIdentified Items and earnings by $1,880 million, including the net unfavorable mark to market impact on unsettled derivatives and weaker industry refining conditions.
•Volume and mix effects decreased earnings by $80 million.
•All other items increased earnings by $2,180 million, as the absence of prior year unfavorable non-operational impacts associated with an inventory write-down of $1,600 million and impairments of $340 million, and lower expenses of $410 million, were partly offset by unfavorable foreign exchange impacts of $100 million and other unfavorable earnings impacts of $70 million.
•The unfavorable impact of the winter storm on Downstream earnings, included in the factors above, was $130 million.
•U.S. Downstream results were a loss of $113 million, compared with a loss of $101 million in the prior year quarter.
•Non-U.S. Downstream results were a loss of $277 million, a $233 million improvement from the prior year quarter.
•Petroleum product sales of 4.9 million barrels per day were 406,000 barrels per day lower than the prior year quarter.(loss) excluding Identified Items.
| | | | | | | | | | | | | | | | | | |
| | First Three Months | | |
| | 2021 | | 2020 | | | | |
| | (millions of dollars) | | |
Chemical results | | | | | | | | |
United States | | 715 | | | 288 | | | | | |
Non-U.S. | | 700 | | | (144) | | | | | |
Total | | 1,415 | | | 144 | | | | | |
Downstream Earnings Factor Analysis(millions of dollars)
Chemical earnings were $1,415 million in the first quarter of 2021, up $1,271 million from the first quarter of 2020.•Margins– Higher margins increased earnings by $620$310 million. Improved refining margins were partially offset by unfavorable unsettled derivative impacts.
•Volume – Favorable volume and mix effects increased earnings by $30 million.
•All other items increased earnings by $620$180 million, mainlyprimarily due to the absence of prior year unfavorable non-operationalreliability impacts associated with an inventory write-down offrom winter storm Uri.
Other – All other items increased earnings by $230 million, and impairmentsdriven by the absence of $90 million, lower expenses of $240 million, and favorable foreign exchangeterminal conversion impacts of $60 million.
•The unfavorable impact of the winter storm on Chemical earnings, included in the factors above, was $230 million.
•U.S. Chemical earnings were $715 million, up $427 million from the prior year quarter.
•Non-U.S. Chemical earnings were $700 million, up $844 million from the prior year quarter.
•
Downstream Operational Results
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | | | |
| | 2022 | | 2021 | | | | |
Refinery throughput | | (thousands of barrels daily) |
United States | | 1,685 | | | 1,532 | | | | | |
Canada | | 399 | | | 364 | | | | | |
Europe | | 1,193 | | | 1,153 | | | | | |
Asia Pacific | | 537 | | | 545 | | | | | |
Other | | 169 | | | 157 | | | | | |
Worldwide | | 3,983 | | | 3,751 | | | | | |
| | | | | | | | |
Petroleum product sales (1) | | | | | | | | |
United States | | 2,256 | | | 2,077 | | | | | |
Canada | | 442 | | | 409 | | | | | |
Europe | | 1,345 | | | 1,272 | | | | | |
Asia Pacific | | 644 | | | 665 | | | | | |
Other | | 471 | | | 458 | | | | | |
Worldwide | | 5,158 | | | 4,881 | | | | | |
Gasoline, naphthas | | 2,114 | | | 1,996 | | | | | |
Heating oils, kerosene, diesel oils | | 1,722 | | | 1,692 | | | | | |
Aviation fuels | | 289 | | | 183 | | | | | |
Heavy fuels | | 249 | | | 257 | | | | | |
Specialty petroleum products | | 784 | | | 753 | | | | | |
Worldwide | | 5,158 | | | 4,881 | | | | | |
| | | | | | | | |
(1) Data reported net of purchases/sales contracts with the same counterparty. | | |
CHEMICAL
Chemical Financial Results
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
Earnings (loss) (U.S. GAAP) | | (millions of dollars) | | | | |
United States | | 819 | | 715 | | | | | |
Non-U.S. | | 535 | | 700 | | | | | |
Total | | 1,354 | | | 1,415 | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
Earnings (loss) excluding Identified Items (2) | | | | | | | | |
United States | | 819 | | | 715 | | | | | |
Non-U.S. | | 535 | | | 700 | | | | | |
Total | | 1,354 | | | 1,415 | | | | | |
First quarter prime product sales(2) Refer to Functional Earnings Summary for definition of 6.4 million metric tons were 209,000 metric tons higher than the prior year quarter.Identified Items and earnings (loss) excluding Identified Items.
| | | | | | | | | | | | | | | | | | |
| | First Three Months | | |
| | 2021 | | 2020 | | | | |
| | (millions of dollars) | | |
Corporate and financing results | | (849) | | | (679) | | | | | |
Chemical Earnings Factor Analysis
(millions of dollars)
Margins– Lower margins decreased earnings by $20 million.
Volume – Favorable volume and mix effects increased earnings by $70 million, primarily due to higher U.S. sales.
Other – All other items decreased earnings by $110 million, primarily driven by increased project and planned maintenance spend.
Chemical Operational Results
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | | | |
| | 2022 | | 2021 | | | | |
Chemical prime product sales (1) | | (thousands of metric tons) |
United States | | 2,704 | | | 2,190 | | | | | |
Non-U.S. | | 4,033 | | | 4,256 | | | | | |
Worldwide | | 6,737 | | | 6,446 | | | | | |
| | | | | | | | |
(1) Data reported net of purchases/sales contracts with the same counterparty.
CORPORATE AND FINANCING
Corporate and Financing Financial Results
| | | | | | | | | | | | | | | | | | |
| | Three Months Ended March 31, | | |
| | 2022 | | 2021 | | | | |
| | (millions of dollars) | | |
Earnings (loss) (U.S. GAAP) | | (694) | | | (849) | | | | | |
Identified Items (1) | | (98) | | | (31) | | | | | |
Earnings (loss) excluding Identified Items (1) | | (596) | | | (818) | | | | | |
Corporate and financingFinancing expenses were $849$694 million for the first quarter of 2021, up $1702022, down $155 million from the first quarter of 2020,2021, reflecting higher retirement-related expenses.lower pension-related corporate costs and the absence of prior year severance charges, partly offset by Russia Sakhalin impacts.
(1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items.
LIQUIDITY AND CAPITAL RESOURCES
| | | | | First Three Months | | | | Three Months Ended March 31, |
| | | | 2021 | | 2020 | | | | 2022 | | 2021 |
| | | | (millions of dollars) | | | | (millions of dollars) |
Net cash provided by/(used in) | Net cash provided by/(used in) | | | | Net cash provided by/(used in) | | | |
Operating activities | Operating activities | | | 9,264 | | | 6,274 | | Operating activities | | | 14,788 | | | 9,264 | |
Investing activities | Investing activities | | | (2,355) | | | (6,367) | | Investing activities | | | (3,945) | | | (2,355) | |
Financing activities | Financing activities | | | (7,785) | | | 8,785 | | Financing activities | | | (6,713) | | | (7,785) | |
Effect of exchange rate changes | Effect of exchange rate changes | | | 27 | | | (369) | | Effect of exchange rate changes | | | 142 | | | 27 | |
Increase/(decrease) in cash and cash equivalents | Increase/(decrease) in cash and cash equivalents | | | (849) | | | 8,323 | | Increase/(decrease) in cash and cash equivalents | | | 4,272 | | | (849) | |
| Cash and cash equivalents (at end of period) | Cash and cash equivalents (at end of period) | | | 3,515 | | | 11,412 | | Cash and cash equivalents (at end of period) | | | 11,074 | | | 3,515 | |
| Cash flow from operations and asset sales | Cash flow from operations and asset sales | | | | Cash flow from operations and asset sales | | | |
Net cash provided by operating activities (U.S. GAAP) | Net cash provided by operating activities (U.S. GAAP) | | | 9,264 | | | 6,274 | | Net cash provided by operating activities (U.S. GAAP) | | | 14,788 | | | 9,264 | |
Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments | Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments | | | 307 | | | 86 | | Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments | | | 293 | | | 307 | |
Cash flow from operations and asset sales | Cash flow from operations and asset sales | | | 9,571 | | | 6,360 | | Cash flow from operations and asset sales | | | 15,081 | | | 9,571 | |
Because of the ongoing nature of our asset management and divestment program, we believe it is useful for investors to consider proceeds associated with asset sales together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions.
Cash flow from operations and asset sales in the first quarter of 20212022 was $9.6$15.1 billion, an increase of $3.2$5.5 billion from the comparable 20202021 period primarily reflecting higher earnings.
Cash provided by operating activities totaled $9.3$14.8 billion for the first three months of 2021, $3.02022, $5.5 billion higher than 2020.2021. Net income including noncontrolling interests was $2.8$5.8 billion, an increase of $3.6$3.0 billion from the prior year period. The adjustmentsadjustment for the noncash provision of $5.0$8.9 billion for depreciation and depletion was down $0.8up $3.9 billion from 2020.2021. Changes in operational working capital were a contribution of $2.0$1.1 billion, compared to a reductioncontribution of $0.9$2.0 billion in the prior year period. All other items net decreased cash flows by $0.5$0.9 billion in 20212022 versus a reduction of $0.1$0.5 billion in 2020.2021. See the Condensed Consolidated Statement of Cash Flows for additional details.
Investing activities for the first three months of 20212022 used net cash of $2.4$3.9 billion, a decreasean increase of $4.0$1.6 billion compared to the prior year. Spending for additions to property, plant and equipment of $2.4$3.9 billion was $3.5$1.5 billion lowerhigher than 2020.2021. Proceeds from asset sales of $0.3 billion were $0.2 billion higher thanessentially flat with the prior year. Net investments and advances decreased $0.2increased $0.1 billion to $0.3 billion.
Net cash used byin financing activities was $7.8$6.7 billion in the first three months of 2021,2022, including $4.1$2.1 billion for the purchase of debt repayments.26.2 million shares of ExxonMobil stock, as the Corporation initiated its previously announced buyback program in the quarter. This compares to net cash provided byused in financing activities of $8.8$7.8 billion in the prior year, duereflecting long-term debt repayments of $4.1 billion during the first three months of 2021. On April 29, 2022, the company announced that it is increasing its share repurchase program from up to $10 billion to a long-term debt issuancetotal of up to $30 billion through 2023. The stock repurchase program does not obligate the company to acquire any particular amount of common stock, and it may be discontinued or resumed at any time. The timing and amount of shares actually repurchased in the first quarter of 2020.future will depend on market, business, and other factors.
Total debt at the end of the first quarter of 20212022 was $63.3$47.5 billion compared to $67.6$47.7 billion at year-end 2020.2021. The Corporation's debt to total capital ratio was 27.821.2 percent at the end of the first quarter of 20212022 compared to 29.221.4 percent at year-end 2020.2021. The net debt to capital ratio was 17.1 percent at the end of the first quarter, a decrease of 1.8 percentage points from year-end 2021. The Corporation's capital allocation priorities continue to be investing in advantaged projects, strengthening the balance sheet and paying a reliable dividend.
The Corporation has access to significant capacity of long-term and short-term liquidity. CommercialIn addition to cash balances, commercial paper continues to provide short-term liquidity, and is reflected in "Notes and loans payable" on the Consolidated Balance Sheet. Cash and cash equivalents was $3.5$11.1 billion at the end of the first quarter of 2021.2022. The Corporation had undrawn short-term committed lines of credit of $11.2$10.7 billion and undrawn long-term committed lines of credit of $0.6 billion as of first quarter 2021.2022.
The Corporation distributed a total of $3.7$3.8 billion to shareholders in the first three months of 20212022 through dividends.
The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in
either gains or losses. Additionally, the Corporation continues to evaluate opportunities to enhance its business portfolio through acquisitions of assets or companies, and enters into such transactions from time to time. Key criteria for evaluating acquisitions include potential for future growth and attractive current valuations. Acquisitions may be made with cash, shares of the Corporation’s common stock, or both.
The termination of certain transportation service agreements in the first quarter reduced commitments previously reported at year-end in Form 10-K under “Take-or-pay and unconditional purchase obligations” by approximately $2.3 billion. The majority of those commitments related to the years 2026 and beyond.
Litigation and other contingencies are discussed in Note 3 to the unaudited condensed consolidated financial statements.
TAXES
| | | | | | | | | | | | | | | | | | |
| | | | First Three Months |
| | | | | | 2021 | | 2020 |
| | | | (millions of dollars) |
Income taxes | | | | | | 796 | | | 512 | |
Effective income tax rate | | | | | | 33 | % | | 481 | % |
Total other taxes and duties (1) | | | | | | 7,283 | | | 7,497 | |
Total | | | | | | 8,079 | | | 8,009 | |
| | | | | | | | | | | | | | | | | | |
| | | | Three Months Ended March 31, |
| | | | | | 2022 | | 2021 |
| | | | (millions of dollars) |
Income taxes | | | | | | 2,806 | | | 796 | |
Effective income tax rate | | | | | | 40 | % | | 33 | % |
Total other taxes and duties (1) | | | | | | 8,449 | | | 7,283 | |
Total | | | | | | 11,255 | | | 8,079 | |
(1)Includes “Other taxes and duties” plus taxes that are included in “Production and manufacturing expenses” and “Selling,“Selling, general and administrative expenses.”expenses”.
Total taxes were $8.1$11.3 billion for the first quarter of 2021,2022, an increase of $0.1$3.2 billion from 2020.2021. Income tax expense was $0.8$2.8 billion compared to $0.5$0.8 billion in the prior year reflecting higher commodity prices. The effective income tax rate of 3340 percent compared to 48133 percent in the prior year period primarily due to a change in mix of results in jurisdictions with varying tax rates and the absence of prior year inventory valuation and impairment impacts.rates. Total other taxes and duties decreasedincreased by $0.2$1.2 billion to $7.3$8.4 billion.
In the United States, the Corporation has various ongoing U.S. federal income tax positions at issue with the Internal Revenue Service (IRS) for tax years beginning in 2006. The Corporation filed a refund suit for tax years 2006-2009 in U.S. federal district court (District Court) with respect to the positions at issue for those years. On February 24, 2020, the Corporation received an adverse ruling on this suit. The IRS has asserted penalties associated with several of those positions. The Corporation has not recognized the penalties as an expense because the Corporation does not expect the penalties to be sustained under applicable law. On January 13, 2021, the District Court ruled that no penalties apply to the Corporation's positions in this suit. The Corporation filed a noticeand the government have appealed the District Court's rulings to the U.S. Court of appeal regarding the substantive issues toAppeals for the Fifth Circuit Court of Appeals on April 9, 2021. The government(Fifth Circuit). Proceedings in the Fifth Circuit are continuing.
On March 4, 2022, the Corporation also filed a notice of appeal regarding the penalty issuerefund suit for tax years 2010-2011 in District Court with respect to the same court on April 19, 2021.positions at issue for those years. The Corporation has not recognized asserted penalties for 2010-2011 as an expense because the Corporation does not expect the penalties to be sustained under applicable law. Unfavorable resolution of all positions at issue with the IRS would not have a material adverse effect on the Corporation’s operations or financial condition.
RESTRUCTURING ACTIVITIES
During 2020, ExxonMobil conducted an extensive global review of staffing levels and subsequently commenced targeted workforce reductions within a number of countries to improve efficiency and reduce costs. The programs, which are expected to be substantially complete by the end of 2021, include both voluntary and involuntary employee separations and reductions in contractors.
In the first quarter of 2021, the Corporation recorded before-tax charges of $39 million ($31 million after tax), consisting primarily of employee separation costs, from workforce reduction programs in Singapore and Europe associated with the global review of staffing levels. These costs are captured in “Selling, general and administrative expenses” on the Statement of Income. Before-tax cash outflows in first quarter of 2021 associated with these activities were $130 million.
The Corporation estimates total charges of up to $200 million in 2021 related to planned workforce reduction programs with cash outflows ranging between $400 million and $600 million. This does not include charges related to employee reductions associated with any portfolio changes or other projects. Before-tax workforce reduction savings, including employees and contractors, are estimated to range between $1 billion and $2 billion per year after program completion when compared to 2019 levels.
CAPITAL AND EXPLORATION EXPENDITURES
| | | | | First Three Months | | | | Three Months Ended March 31, |
| | | | 2021 | | 2020 | | | | 2022 | | 2021 |
| | | | (millions of dollars) | | | | (millions of dollars) |
Upstream (including exploration expenses) | Upstream (including exploration expenses) | | | 2,357 | | | 5,126 | | Upstream (including exploration expenses) | | | 3,879 | | | 2,357 | |
Downstream | Downstream | | | 470 | | | 1,234 | | Downstream | | | 577 | | | 470 | |
Chemical | Chemical | | | 306 | | | 782 | | Chemical | | | 448 | | | 306 | |
Other | Other | | | — | | | 1 | | Other | | | — | | | — | |
Total | Total | | | 3,133 | | | 7,143 | | Total | | | 4,904 | | | 3,133 | |
Capital and exploration expenditures in the first quarter of 20212022 were $3.1$4.9 billion, down 56up 57 percent from the first quarter of 2020.2021. The Corporation expects 2021 capital spendingplans to beinvest in the range of $16$21 billion to $19 billion.$24 billion in 2022. Actual spending could vary depending on the progress of individual projects and property acquisitions. If market conditions continue above the Corporation's planning basis, additional cash will not be used to increase capital investment above this range, but will instead be used to accelerate deleveraging.
FORWARD-LOOKING STATEMENTS
Statements related to outlooks, projections, goals, targets,outlooks; projections; descriptions of strategic, operating, and financial plans and objectives,objectives; statements of future ambitions and plans; and other statements of future events or conditions, are forward-looking statements. Actual future results, including financial and operating performance; plannedtotal capital expenditures and cash operating expensemix, 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 intensity and the expected resulting absolute emission reductions; progressing carbon capture projects and results; total capital expenditures and mix; cash flow, dividenddividends and shareholder returns;returns, including the timing and amounts of share repurchases; future debt levels and credit ratings; business and project plans, timing, costs, capacities and capacities;returns; and resource recoveries and production rates; and accounting and financial reporting effects resulting from market developments and ExxonMobil’s responsive actions,rates could differ materially due to a number of factors. These include the continuity of our board of directors and their strategic oversight; 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; the impactdifferentials for our products; variable impacts of company actions to protect the healthtrading activities on our margins and safety of employees, vendors, customers, and communities;results each quarter; 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;markets; the severity, length and ultimate impactimpacts of COVID-19, including the extent and nature of further outbreaks and the effects of government responses on people and economies; reservoir performance;performance, including variability and timing factors applicable to unconventional resources; the outcome of exploration projects andprojects; 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;permits and certifications; government policies and support and market demand for low carbon technologies like carbon capture;technologies; war, trade agreements and patterns, shipping blockades or harassment, and other political or security disturbances; opportunities for and regulatory approval of potential investments or divestments; the actionsdivestments and satisfaction of competitors;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 while maintaining future competitive positioning;efficiencies; unforeseen technical or operating difficulties;difficulties and unplanned maintenance; the development and competitiveness of alternative energy and emission reduction technologies; the results of research programs;programs and the ability to bring new technologies to commercial scale on a cost-competitive basis; general economic conditions including the occurrence and duration of economic recessions; and other factors discussed under Item 1A. Risk Factors of ExxonMobil’s 20202021 Form 10-K. We assume no duty to update these statements as of any future date.
The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
Information about market risks for the three months ended March 31, 2021,2022, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2020.2021.
Item 4. Controls and Procedures
As indicated in the certifications in Exhibit 31 of this report, the Corporation’s Chief Executive Officer, PrincipalChief Financial Officer and Principal Accounting Officer have evaluated the Corporation’s disclosure controls and procedures as of March 31, 2021.2022. Based on that evaluation, these officers have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. There were no changes during the Corporation’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
ExxonMobil has elected to use a $1 million threshold for disclosing environmental proceedings.
On April 13, 2021,February 22, 2022, the United States filed a proposed Fourth Consent Decree Amendment (the “Proposed Amendment”) with the United States District Court for the Northern District of Illinois. The Proposed Amendment reflects an agreed settlement with the United States Environmental Protection Agency (“EPA”) and the State of Illinois to resolve alleged violations at ExxonMobil Oil Corporation’s Joliet Refinery in Illinois of (i) certain New Source Performance Standards and other requirements for refineries as further described in a 2013 Notice of Violation/Finding of Violation and (ii) certain requirements in the original Consent Decree entered into with the EPA in December 2005 (in each case, as previously reported on the Corporation’s Form 10-Q for the third quarter of 2013 and, with respect to the original 2005 Consent Decree, for the third quarter of 2005). Under the Proposed Amendment, ExxonMobil Oil Corporation has agreed to pay approximately $1.5 million in penalties, including $1,086,640 to the United States Treasury and $428,823 to the State of Illinois, and to implement various measures to reduce emissions at the Joliet Refinery including completion of approximately $10 million in capital improvements. The Proposed Amendment will also replace, supersede, and terminate the original 2005 Consent Decree as it pertains to ExxonMobil Oil Corporation’s Joliet Refinery. Once the Proposed Amendment is published in the Federal Register, it will be open to public comment for 30 days before the U.S. District Court may approve it.
As reported in the Corporation’s Form 10-Q for the third quarter of 2020, ExxonMobil appealed to the U.S. Court of Appeals for the Fifth Circuit a judgmentConservation Division of the United States District Court for the Southern DistrictNew Mexico Department of Texas entered on April 26, 2017, in a citizen suit captioned Environment Texas Citizen Lobby, Inc. et al. v. Exxon Mobil Corporation. The U.S. District Court had awarded approximately $20 million inEnergy, Minerals and Natural Resources (the “Department”) announced that it issued notices of violation and cumulative associated administrative civil penalties payableof $2,247,100 to XTO Permian Operating, LLC (“XTO”) alleging XTO failed to comply with certain operational and reporting requirements relating to four salt water disposal wells. A hearing is scheduled for May 18, 2022, but may be delayed by the United States Treasury. In the suit filedDepartment in December 2010, Environment Texas Citizen Lobby, Inc. and the Sierra Club, Lone Star Chapter, sought declaratory and injunctive relief, penalties, attorney fees and litigation costs associated with alleged violations of Title V of the Clean Air Act. Plaintiffs alleged that ExxonMobil repeatedly violated, and will continueorder to violate, its air operating permits, the Texas State Implementation Plan and the Clean Air Act by emitting air pollutants into the atmosphere from the Baytown complex in excess of applicable emission limitations or otherwise without authorization at the Baytown, Texas, refinery, chemical plant and olefins plant. On July 29, 2020, the Fifth Circuit vacated the U.S. District Court’s penalty award and remanded the case back to the District Court for further proceedings. On March 2, 2021, the U.S. District Court awarded $14.25 million in civil penalties, payable to the United States Treasury. ExxonMobil filed its appeal of the judgment in the U.S. Court of Appeals for the Fifth Circuit on April 12, 2021.
negotiate a potential resolution
.
Refer to the relevant portions of Note 3 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds
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Issuer Purchase of Equity Securities for Quarter Ended March 31, 2021 |
Period | | Total Number of Shares Purchased | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs | | Maximum Number of Shares that May Yet Be Purchased Under the Plans or Programs |
January 2021 | | — | | | $ | — | | | — | | | |
February 2021 | | — | | | $ | — | | | — | | | |
March 2021 | | — | | | $ | — | | | — | | | |
Total | | — | | | | | — | | | (See Note 1) |
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Issuer Purchase of Equity Securities for Quarter Ended March 31, 2022 |
Period | | Total Number of Shares Purchased(1) | | Average Price Paid per Share | | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (Billions of dollars) |
January 2022 | | 5,764,362 | | $70.75 | | 5,639,871 | | $29.6 |
February 2022 | | 8,320,607 | | $78.69 | | 8,320,607 | | $28.9 |
March 2022 | | 12,197,886 | | $82.32 | | 12,197,886 | | $27.9 |
Total | | 26,282,855 | | $78.63 | | 26,158,364 | | |
During the first quarter, the Corporation did not purchase any shares of its common stock for the treasury, and did not issue or sell any unregistered equity securitiesecuritiess..
(1) Includes shares withheld from participants in the company's incentive program for personal income taxes.
Note 1 -(2) In its earnings release dated February 2, 2021,April 29, 2022, the Corporation stated that it had suspendedthe company has increased its first quarter 2021 anti-dilutive share repurchase program duefrom up to market uncertainty and intends$10 billion to resume this programa total of up to $30 billion through 2023. Purchases in the future as market conditions improve.first quarter of 2022 were made under terms intended to qualify for exemption under Rules 10b-18 and 10b5-1.
Item 6. Exhibits
See Index to Exhibits of this report.
INDEX TO EXHIBITS
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Exhibit | | Description |
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| | |
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| | ExxonMobil Supplemental Savings Plan. |
| | ExxonMobil Supplemental Pension Plan. |
| | ExxonMobil Additional Payments Plan. |
| | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer. |
| | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by PrincipalChief Financial Officer. |
| | Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer. |
| | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer. |
| | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by PrincipalChief Financial Officer. |
| | Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer. |
101 | | Interactive Data Files (formatted as Inline XBRL). |
104 | | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). |
EXXON MOBIL CORPORATION
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
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| EXXON MOBIL CORPORATION |
Date: May 5, 20214, 2022 | By: | /s/ LEN M. FOX |
| | Len M. Fox |
| | Vice President, Controller and |
| | Principal Accounting Officer |