ExxonMobil Earns $19.7 Billion in 2017; $8.4 Billion in Fourth Quarter
Mobil Corporation (XOM):
Net favorable non-cash impacts in the fourth quarter total $4.6
billion, including $5.9 billion relating to U.S. tax reform, partially
offset by asset impairments of $1.3 billion
Full year cash flow from operations and asset sales exceeds dividends
and net investments(1)
Company makes sixth discovery offshore Guyana, adds acreage in Brazil,
closes acquisition in Mozambique
(Dollars in millions, except per share data)
Earnings (U.S. GAAP)
U.S. Tax Reform
Earnings Excluding U.S. Tax
Reform and Impairments
Earnings Per Common Share
Exxon Mobil Corporation announced estimated 2017 earnings of
$19.7 billion, or $4.63 per share assuming dilution, compared with
$7.8 billion in 2016. U.S. federal tax reform in the fourth quarter
resulted in a non-cash earnings gain of $5.9 billion, due to revaluation
of deferred income tax balances. Non-cash asset impairments of $1.5
billion were recorded during the year, mainly relating to assets in the
Fourth quarter 2017 earnings were $8.4 billion. Earnings excluding U.S.
tax reform and impairments were $3.7 billion, or $0.88 per share
assuming dilution, in the fourth quarter 2017, down 2 percent compared
with the prior-year quarter.
"The impact of tax reform on our earnings reflects the magnitude of our
historic investment in the U.S. and strengthens our commitment to
further grow our business here," said Darren W. Woods, chairman and
chief executive officer. "Were planning to invest over $50 billion in
the U.S. over the next five years to increase production of profitable
volumes and enhance our integrated portfolio, which is supported by the
improved business climate created by tax reform."
ExxonMobil is investing billions of dollars to increase oil production
in the Permian Basin in West Texas and New Mexico, expand existing
operations, enhance infrastructure and build new manufacturing sites.
These high-quality investments will create value for ExxonMobil
shareholders while benefiting the economy, creating thousands of jobs
and enhancing energy security.
Fourth quarter Upstream earnings were $8.4 billion, including
$7.1 billion from U.S. tax reform and asset impairments of $1.3 billion.
Fourth quarter earnings excluding U.S. tax reform and impairments
increased $1 billion, to $2.5 billion, driven by higher prices as
liquids realizations increased more than $10 per barrel.
Downstream earnings in the fourth quarter were $1.6 billion, including
$618 million from U.S. tax reform. Earnings excluding U.S. tax reform
and impairments declined $289 million, to $952 million, as the absence
of last years Canada retail divestment gain of $522 million was
partially offset by higher margins and asset management gains in the
Chemical earnings were $1.3 billion in the fourth quarter. Excluding the
$335 million impact from U.S. tax reform, Chemical earnings increased
$63 million, or 7 percent, due to higher sales. Prime product sales of
6.8 million metric tons were the highest in a decade.
(1)Includes additions to property, plant and
equipment and net investments / advances
Fourth Quarter 2017 Highlights
Earnings of $8.4 billion increased $6.7 billion from the fourth
quarter of 2016. Earnings excluding U.S. tax reform and impairments
were $3.7 billion, down 2 percent compared with the fourth quarter of
Earnings per share assuming dilution were $1.97.
Cash flow from operations and asset sales was $8.8 billion, including
proceeds associated with asset sales of $1.4 billion.
Capital and exploration expenditures were $9 billion, including
acquisitions in Mozambique and Brazil.
Oil-equivalent production was 4 million barrels per day, down 3
percent from the prior year. Excluding entitlement effects and
divestments, oil-equivalent production was down 1 percent from the
The corporation distributed $3.3 billion in dividends to shareholders.
Dividends per share of $0.77 increased 2.7 percent compared to the
fourth quarter of 2016.
The company announced the sixth oil discovery offshore Guyana with the
completion of the Ranger-1 exploration well. The well encountered 230
feet (70 meters) of oil-bearing carbonate reservoir. Previous
discoveries offshore Guyana are now estimated to total more than 3.2
billion recoverable oil-equivalent barrels, excluding Ranger.
ExxonMobil completed an agreement with Statoil ASA to acquire an
interest in the BM-S-8 block offshore Brazil, which contains part of
the discovered pre-salt Carcara oil field. ExxonMobil and its partners
were also the high bidder on the North Carcara block in round 2 of the
pre-salt tender. The Carcara field contains an estimated recoverable
resource of 2 billion barrels of high-quality oil. During the quarter,
through bid rounds and announced farm-in agreements, ExxonMobil added
14 offshore blocks in Brazil comprising more than 1.25 million net
ExxonMobil announced the completion of a transaction to acquire a 25
percent indirect interest in Mozambiques gas-rich Area 4 block from
Eni S.p.A. and assume responsibility for midstream operations.
ExxonMobil will lead the construction and operation of all future
natural gas liquefaction and related facilities. The deepwater Area 4
block contains an estimated 85 trillion cubic feet of natural gas to
support a world-class LNG development.
During the quarter, ExxonMobil announced that the Hebron field started
production safely and on schedule. The platform, located about 200
miles (350 kilometers) offshore Newfoundland and Labrador, Canada, is
expected to produce up to 150,000 barrels of oil per day at its peak.
The company started the Odoptu Stage 2 project safely and on schedule.
The project has increased the Odoptu field production capacity to
nearly 65,000 barrels per day and will help maintain Sakhalin-1
The company announced that it encountered hydrocarbons after drilling
the onshore Pnyang South-2 well, located in the Western Province of
Papua New Guinea, adding to a growing high-quality resource base that
will underpin a multi-train LNG expansion.
ExxonMobil, together with its partners Abu Dhabi National Oil Company
and INPEX Corporation, announced an agreement to increase production
capacity from the Upper Zakum oil field to 1 million barrels per day
by 2024. Under the agreement, ExxonMobil and INPEX Corporation have
also been granted a 10 year extension for the Upper Zakum concession.
During the quarter, ExxonMobil acquired a crude oil terminal in Wink,
Texas, from Genesis Energy, L.P. The terminal is located in the
rapidly growing Permian Basin and is strategically positioned to
handle crude oil and condensate for transport to Gulf Coast refineries
and marine export terminals.
ExxonMobil signed production sharing contracts with the government of
Mauritania for three deepwater offshore blocks. Together, the blocks
comprise nearly 8.4 million acres and are located an average of 125
miles (200 kilometers) offshore Mauritania.
The corporation announced that the Neuquen Province government in
Argentina has approved the investment plan for the development of a
35-year unconventional exploitation concession in the Los Toldos I
South block. The initial investment of about $200 million calls for a
pilot project of up to seven production wells, the construction of
production facilities and the development of export infrastructure.
The corporation combined its refining and marketing operations into a
single company, ExxonMobil Fuels & Lubricants Company, in the first
quarter of 2018. The further integration will help the company to
better respond to the needs of its customers and compete more
ExxonMobil opened eight service stations in Mexico during the quarter,
the first Mobil-branded service stations in the country. The new
service stations will be operated by Grupo Orsan and supplied with
gasoline and diesel produced by ExxonMobils refineries in Texas. The
corporation plans to open more than 50 Mobil stations in Mexico during
the first quarter of 2018.
During the quarter, the company started producing on-spec product from
the worlds largest hydrocarbon resin plant, located in Singapore. The
new facility will produce 90,000 metric tons per year of Escorez
adhesive resins to meet long-term demand growth in Asia Pacific and
will double the companys capacity to manufacture high-performance
Fourth Quarter 2017 vs. Fourth Quarter 2016
Upstream earnings were $8.4 billion in the fourth quarter of 2017, up
$9 billion from the fourth quarter of 2016. Higher liquids and gas
realizations increased earnings by $1.2 billion. Lower volume and mix
effects decreased earnings by $110 million. All other items increased
earnings by $7.9 billion driven by U.S. tax reform impacts of
$7.1 billion, lower asset impairments of $847 million, and gains from
asset management activity.
On an oil-equivalent basis, production was down 130,000 barrels per day,
or 3 percent, compared with the fourth quarter of 2016. Liquids
production totaled 2.3 million barrels per day, down 133,000 barrels per
day as field decline and lower entitlements were partly offset by higher
volumes from work programs and projects. Natural gas production was
10.4 billion cubic feet per day, up 17 million cubic feet per day from
2016, as project ramp-up and work programs were partly offset by field
decline and lower demand.
U.S. Upstream earnings were $7.1 billion in the fourth quarter of 2017,
including $7.6 billion for tax reform and asset impairments of
$481 million. U.S. Upstream earnings excluding U.S. tax reform and
impairments were a loss of $60 million. Non-U.S. Upstream earnings were
$1.3 billion, including asset impairments of $807 million and
unfavorable impacts of $480 million from U.S. tax reform. Non-U.S.
Upstream earnings excluding U.S. tax reform and impairments were
Downstream earnings were $1.6 billion, up $323 million from the fourth
quarter of 2016. Higher margins increased earnings by $250 million.
Volume and mix effects decreased earnings by $190 million. All other
items increased earnings by $260 million, including favorable U.S. tax
reform impacts of $618 million and gains from asset management activity,
partially offset by the absence of asset management gains of
$522 million in the prior year from the Canada retail divestment.
Petroleum product sales of 5.6 million barrels per day were
118,000 barrels per day higher than last years fourth quarter.
Earnings from the U.S. Downstream were $918 million. Excluding U.S. tax
reform impacts of $618 million and asset impairments, earnings were up
$36 million from the fourth quarter of 2016. Non-U.S. Downstream
earnings of $646 million were $325 million lower than the prior year.
Chemical earnings of $1.3 billion were $398 million higher than the
fourth quarter of 2016. Weaker margins decreased earnings by
$30 million. Volume and mix effects increased earnings by $100 million.
All other items increased earnings by $330 million, driven by U.S. tax
reform impacts of $335 million. Fourth quarter prime product sales of
6.8 million metric tons were 473,000 metric tons or 7 percent higher
than the prior year.
U.S. Chemical earnings were $777 million in the fourth quarter of 2017.
Excluding U.S. tax reform impacts of $335 million, earnings were $90
million higher than the fourth quarter of 2016. Non-U.S. Chemical
earnings of $493 million were $27 million lower than prior year.
Corporate and financing expenses were $2.8 billion for the fourth
quarter of 2017, up $3 billion from the fourth quarter of 2016 mainly
due to unfavorable impacts of $2.1 billion from U.S. tax reform and the
absence of favorable non-U.S. tax items in the prior-year quarter.
Full Year 2017 Highlights
Earnings of $19.7 billion increased 151 percent from $7.8 billion in
2016. Earnings excluding U.S. tax reform and impairments were $15.3
billion, up 52 percent from $10.1 billion in 2016. Hurricane Harvey
reduced earnings by an estimated $250 million.
Earnings per share assuming dilution were $4.63.
Cash flow from operations and asset sales was $33.2 billion, including
proceeds associated with asset sales of $3.1 billion.
Capital and exploration expenditures were $23.1 billion, up 20 percent
Oil-equivalent production was 4 million barrels per day, down 2
percent from the prior year. Excluding entitlement effects and
divestments, oil-equivalent production was flat with the prior year.
The corporation distributed $13 billion in dividends to shareholders.
Full Year 2017 vs. Full Year 2016
Upstream earnings were $13.4 billion, up $13.2 billion from 2016. Higher
realizations increased earnings by $5.3 billion. Unfavorable volume and
mix effects decreased earnings by $440 million. All other items
increased earnings by $8.3 billion, primarily due to the $7.1 billion
non-cash impact from U.S. tax reform, lower asset impairments of
$659 million, lower expenses, and gains from asset management activity.
On an oil-equivalent basis, production of 4 million barrels per day was
down 2 percent compared to 2016. Liquids production of 2.3 million
barrels per day decreased 82,000 barrels per day as field decline and
lower entitlements were partly offset by increased project volumes and
work programs. Natural gas production of 10.2 billion cubic feet per day
increased 84 million cubic feet per day from 2016 as project ramp-up,
primarily in Australia, was partly offset by field decline and
regulatory restrictions in the Netherlands.
U.S. Upstream earnings were $6.6 billion in 2017, including $7.6 billion
of tax reform benefits and asset impairments of $521 million. U.S.
Upstream earnings excluding U.S. tax reform and impairments were a loss
of $459 million. Non-U.S. Upstream earnings were $6.7 billion, including
asset impairments of $983 million and unfavorable impacts of
$480 million from U.S. tax reform. Non-U.S. Upstream earnings excluding
U.S. tax reform and impairments were $8.2 billion.
Downstream earnings of $5.6 billion increased $1.4 billion from 2016.
Stronger refining and marketing margins increased earnings by
$1.5 billion, while volume and mix effects decreased earnings by $30
million. All other items decreased earnings by $40 million, driven by
the absence of a $904 million gain from the Canadian retail assets sale,
and Hurricane Harvey related expenses, which were mostly offset by
$618 million of U.S. tax reform impacts and non-U.S. asset management
gains in the current year. Petroleum product sales of 5.5 million
barrels per day were 48,000 barrels per day higher than 2016.
Earnings from the U.S. Downstream were $1.9 billion. Excluding U.S. tax
reform impacts of $618 million and asset impairments, earnings were up
$179 million from 2016. Non-U.S. Downstream earnings were $3.6 billion,
compared to $3.1 billion in the prior year.
Chemical earnings of $4.5 billion decreased $97 million from 2016.
Weaker margins decreased earnings by $260 million. Volume and mix
effects increased earnings by $100 million. All other items increased
earnings by $60 million, primarily due to U.S. tax reform of
$335 million and improved inventory effects, partially offset by higher
expenses from increased turnaround activity and new business growth.
Prime product sales of 25.4 million metric tons were up 495,000 metric
tons from 2016.
U.S. Chemical earnings were $2.2 billion in 2017. Excluding U.S. tax
reform impacts of $335 million, 2017 earnings were down $21 million from
2016. Non-U.S. Chemical earnings of $2.3 billion were $411 million lower
than prior year.
Corporate and financing expenses were $3.8 billion in 2017 compared to
$1.2 billion in 2016, with the increase mainly due to unfavorable
impacts of $2.1 billion from U.S. tax reform and the absence of
favorable non-U.S. tax items.
During 2017, Exxon Mobil Corporation purchased 6 million shares of its
common stock for the treasury at a gross cost of $496 million. These
shares were acquired to offset dilution in conjunction with the
companys benefit plans and programs. The corporation will continue to
acquire shares to offset dilution in conjunction with its benefit plans
and programs, but does not currently plan on making purchases to reduce
shares outstanding. The company also issued a combined 96 million shares
of common stock during the first quarter to complete the acquisition of
InterOil Corporation and the acquisition of entities that own oil and
gas properties located primarily in the Permian Basin.
U.S. Tax Reform
Following the December 22, 2017, enactment of the U.S. Tax Cuts and Jobs
Act and in accordance with U.S. GAAP, the corporation has included
reasonable estimates of the income tax effects of the change in tax law
and tax rate. These include amounts for the deferred income tax impact
from the reduction in the corporate tax rate from 35 percent to
21 percent and the mandatory deemed repatriation of undistributed
foreign earnings and profits.
ExxonMobils significant historical investments in the U.S. have created
large deferred income tax liabilities that have reduced previously
reported earnings. Remeasurement of these deferred income tax
liabilities from the 35 percent rate to 21 percent results in a one-time
non-cash benefit to earnings. The corporation has paid taxes on non-U.S.
earnings at tax rates on average above the U.S. rate of 35 percent. As a
result, the deemed repatriation tax is not a significant item for
As part of its 2017 annual planning and budgeting cycle, the corporation
made a decision to cease development planning activities and further
allocation of capital to certain non-producing assets outside the U.S.
resulting in an after-tax charge in the fourth quarter of $807 million
to reduce the carrying value of those assets. In addition, and in part
due to a reduction to the corporations long-term natural gas price
outlooks, certain asset groups were subject to an impairment assessment.
As a result of that assessment, the carrying values for certain asset
groups in the U.S. were reduced to fair value, resulting in an after-tax
charge of $481 million. The asset groups subject to this impairment
charge are primarily dry gas operations with little additional
ExxonMobil will discuss financial and operating results and other
matters during a webcast at 8:30 a.m. Central Time on February 2, 2018.
To listen to the event or access an archived replay, please visit www.exxonmobil.com.
Statements relating to future plans, projections, events or
conditions are forward-looking statements. Future results, including
project plans, costs, timing, and capacities; efficiency gains; capital
and exploration expenditures; production rates; resource recoveries; the
impact of new technologies; potential impairment charges; and share
purchase levels, could differ materially due to factors including:
changes in oil, gas or petrochemical prices or other market or economic
conditions affecting the oil, gas or petrochemical industries, including
the scope and duration of economic recessions; the outcome of
exploration and development efforts; changes in law or government
regulation, including tax and environmental requirements; the impact of
fiscal and commercial terms and outcome of commercial negotiations; the
results of research programs; changes in technical or operating
conditions; actions of competitors; and other factors discussed under
the heading "Factors Affecting Future Results" in the "Investors"
section of our website and in Item 1A of ExxonMobils 2016 Form 10-K. We
assume no duty to update these statements as of any future date.
Frequently Used Terms and Non-GAAP Measures
This press release includes cash flow from operations and asset
sales. Because of the regular nature of our asset management and
divestment program, we believe it is useful for investors to consider
proceeds associated with the sales of subsidiaries, property, plant and
equipment, and sales and returns of investments together with cash
provided by operating activities when evaluating cash available for
investment in the business and financing activities. A reconciliation to
net cash provided by operating activities is shown in Attachment V.
This press release also includes earnings excluding impacts from U.S.
tax reform and asset impairments. We believe these figures are useful
for investors to consider in comparing the performance of our underlying
business across periods when one, or both, periods have been impacted by
the U.S. tax reform or an asset impairment charge. A reconciliation of
earnings excluding these items to U.S. GAAP earnings is shown in
This press release also includes total taxes including sales-based
taxes assessed on customers. This is a broader indicator of the
total tax burden on the corporations products and earnings, including
those borne by certain customers who buy our products. It
combines "Income taxes" and "Total other taxes and duties" assessed on
the corporation with sales-based taxes assessed on our customers, which
are reported net in the income statement. We believe it is useful
for the corporation and its investors to understand the total tax burden
imposed on the corporation and its customers. A reconciliation to
total taxes is shown in Attachment I.
References to the resource base and other quantities of oil, natural
gas or condensate may include amounts that we believe will ultimately be
produced, but that are not yet classified as "proved reserves" under SEC
definitions. Further information on ExxonMobils frequently used
financial and operating measures and other terms including "prime
product sales" and "Total taxes including sales-based taxes assessed on
customers" is contained under the heading "Frequently Used Terms"
available through the "Investors" section of our website at
Reference to Earnings
References to corporate earnings mean net income attributable to
ExxonMobil (U.S. GAAP) from the consolidated income statement. Unless
otherwise indicated, references to earnings, Upstream, Downstream,
Chemical and Corporate and Financing segment earnings, and earnings per
share are ExxonMobils share after excluding amounts attributable to
The term "project" as used in this release can refer to a variety of
different activities and does not necessarily have the same meaning as
in any government payment transparency reports. Escorez is a registered
trademark of Exxon Mobil Corporation.
Exxon Mobil Corporation has numerous affiliates, many with names that
include ExxonMobil, Exxon, Mobil, Esso, and XTO. For convenience and
simplicity, those terms and terms such as corporation, company, our, we,
and its are sometimes used as abbreviated references to specific
affiliates or affiliate groups. Similarly, ExxonMobil has business
relationships with thousands of customers, suppliers, governments, and
others. For convenience and simplicity, words such as venture, joint
venture, partnership, co-venturer, and partner are used to indicate
business and other relationships involving common activities and
interests, and those words may not indicate precise legal relationships.
Estimated Key Financial and Operating Data
(millions of dollars, unless noted)
Earnings / Earnings Per Share
Total revenues and other income (See Attachment VII)
Total costs and other deductions (See Attachment VII)
Income before income taxes
Net income including noncontrolling interests
Net income attributable to noncontrolling interests
Net income attributable to ExxonMobil (U.S. GAAP)
Earnings per common share (dollars)
Earnings per common share - assuming dilution (dollars)
Exploration expenses, including dry holes
Dividends on common stock
Per common share (dollars)
Millions of common shares outstanding
Average - assuming dilution
ExxonMobil share of equity at December 31
ExxonMobil share of capital employed at December 31
Total other taxes and duties (See Attachment VII)
Sales-based taxes assessed on customers
Total taxes including sales-based taxes assessed on customers
ExxonMobil share of income taxes of equity companies
Corporate and financing
Net income attributable to ExxonMobil
Corporate and financing
Total U.S. Tax Reform
Total Asset Impairments
Earnings Excluding U.S. Tax Reform and Impairments
Corporate and financing
Earnings excluding U.S. Tax Reform and Impairments
Net production of crude oil, natural gas liquids, bitumen and
synthetic oil, thousand barrels per day (kbd)
Canada / Other Americas
Australia / Oceania
Natural gas production available for sale, million cubic feet per
Canada / Other Americas
Australia / Oceania
Oil-equivalent production (koebd)(1)
(1)Gas converted to oil-equivalent at 6 million cubic feet = 1
Refinery throughput (kbd)
Petroleum product sales (kbd)
Heating oils, kerosene, diesel
Chemical prime product sales, thousand metric tons (kt)
Capital and Exploration Expenditures
Cash flow from operations and asset sales (billions of
Net cash provided by operating activities (U.S. GAAP)
Proceeds associated with asset sales
Cash flow from operations and asset sales
$ Per Common Share(1)
(1) Computed using the average number of shares
outstanding during each period.
Change in Accounting Policy Election Affecting Consolidated Statement
Effective December 31, 2017, the corporation revised its accounting
policy election for sales, excise and value-added taxes assessed on our
customers that are included in "Sales-based taxes" from gross reporting
(included in both "Total revenues and other income" and "Sales-based
taxes") to the preferable method of net reporting. This change in
accounting principle was applied retrospectively and does not affect net
income attributable to ExxonMobil. Also effective December 31, 2017, the
corporation reclassified U.S. Federal excise tax from "Sales-based
taxes" to "Other taxes and duties" that are included in "Total other
taxes and duties". This change was applied retrospectively and does not
affect net income attributable to ExxonMobil.
Below are changes reflected in the earnings news release. For
information on the Consolidated Statement of Income changes, please
refer to the Form 8-K filed by the corporation on January 19, 2018.
Fourth Quarter 2016
Twelve Months 2016
Total revenues and other income
Total other taxes and duties
Total costs and other deductions
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SOURCE: Exxon Mobil Corporation
Media Relations, 972-940-6007