10-QPeriod: Q1 FY2004

EXXON MOBIL CORP Quarterly Report for Q1 Ended Mar 31, 2004

Filed May 7, 2004For Securities:XOM

Summary

Exxon Mobil Corporation (XOM) reported its first-quarter 2004 financial results, demonstrating solid operational performance despite a year-over-year decrease in net income. The company generated $67.6 billion in total revenues and other income, an increase from the prior year's $63.8 billion, driven by higher production and favorable pricing in crude oil and natural gas. While the reported net income of $5.44 billion ($0.83 per share) was lower than the $7.04 billion ($1.05 per share) reported in the first quarter of 2003, this comparison is impacted by significant one-time items in the prior year, including a $1.7 billion gain from the transfer of Ruhrgas shares and a $550 million accounting change adjustment. Excluding these items, operational performance showed improvement, with downstream earnings reaching their highest first-quarter level since 1991 and upstream production at its highest in over 15 years. The company maintained a strong liquidity position, with cash and cash equivalents increasing to $15.9 billion. Capital expenditures remained robust, with $3.4 billion invested in capital and exploration projects. ExxonMobil continues to focus on disciplined investment and share repurchases, signaling confidence in its ongoing operations and future prospects.

Key Highlights

  • 1Total revenues and other income increased to $67.6 billion from $60.2 billion in the prior year's quarter, driven by higher production and commodity prices.
  • 2Net income for the quarter was $5.44 billion ($0.83 per share), a decrease from $7.04 billion ($1.05 per share) in Q1 2003. This decrease is primarily due to significant one-time gains and accounting adjustments in the prior year's quarter.
  • 3Upstream earnings were $4.01 billion, reflecting strong crude and natural gas prices and increased liquids production, which reached its highest level since 1988.
  • 4Downstream earnings were $1.00 billion, the highest first-quarter earnings since 1991, driven by improved refining margins.
  • 5Cash provided by operating activities increased to $10.1 billion from $8.6 billion in the prior year, demonstrating strong cash generation capabilities.
  • 6The company repurchased approximately 47 million shares of its common stock for treasury during the quarter, totaling $1.95 billion, to offset shares issued under benefit plans and reduce outstanding shares.
  • 7Capital and exploration expenditures totaled $3.4 billion, indicating continued investment in long-term growth opportunities.

Frequently Asked Questions

The reported net income decreased from $7.04 billion in Q1 2003 to $5.44 billion in Q1 2004. However, this comparison is influenced by significant one-time events in the prior year's quarter. Specifically, Q1 2003 included a $1.7 billion pre-tax gain from the transfer of Ruhrgas shares and a $550 million positive impact from adopting a new accounting standard for asset retirement obligations. Excluding these items, the operational performance in Q1 2004 showed improvement.

Upstream earnings were $4.01 billion, supported by higher production volumes and strong crude and natural gas prices. Liquids production reached its highest level since Q4 1988. Downstream earnings were $1.00 billion, marking the highest first-quarter earnings since 1991, primarily due to improved worldwide refining margins.

ExxonMobil maintained a strong liquidity position, with cash and cash equivalents increasing to $15.9 billion at the end of the quarter. Cash provided by operating activities was robust at $10.1 billion, an increase from $8.6 billion in the prior year's quarter. The company continues to invest heavily in capital projects, spending $3.4 billion on capital and exploration expenditures.

Yes, the company is actively engaging in share repurchases. During the first quarter of 2004, ExxonMobil purchased approximately 47 million shares of its common stock for treasury at a cost of $1.95 billion. These purchases are intended to offset shares issued through benefit plans and to gradually reduce the number of outstanding shares.