10-QPeriod: Q3 FY2006

EXXON MOBIL CORP Quarterly Report for Q3 Ended Sep 30, 2006

Filed November 8, 2006For Securities:XOM

Summary

ExxonMobil Corporation's third quarter and first nine months of 2006 results demonstrate robust financial performance, with record third-quarter net income of $10,490 million, a 5.7% increase year-over-year. For the first nine months, net income reached $29,250 million, up 15% from the prior year. These strong results were driven by higher crude oil and natural gas realizations, as well as improved marketing and chemical margins, which more than offset lower refining margins. Significant capital allocation was directed towards share repurchases, with the company buying back 126 million shares for approximately $8.4 billion in the third quarter alone to reduce outstanding shares and offset benefit plan issuances. The company also continued to invest heavily in capital and exploration projects, with spending at $5.1 billion in the third quarter and $14.8 billion year-to-date, signaling ongoing commitment to increasing energy supplies. Despite ongoing litigation and regulatory considerations, the company maintains a strong financial position and cash generation capabilities.

Key Highlights

  • 1Record third quarter 2006 net income of $10,490 million ($1.77 per share), a 5.7% increase from $9,920 million in Q3 2005.
  • 2First nine months 2006 net income of $29,250 million ($4.86 per share), a 15% increase from $25,420 million in the same period of 2005.
  • 3Upstream earnings increased to $6,493 million in Q3 2006, driven by higher crude oil and natural gas realizations, with production up 7% on an oil-equivalent basis.
  • 4Downstream earnings rose to $2,738 million in Q3 2006, reflecting stronger worldwide marketing margins, partially offset by weaker refining margins.
  • 5Chemical earnings significantly increased to $1,351 million in Q3 2006, driven by stronger margins and partially offset by weaker demand.
  • 6Substantial capital returns to shareholders, with $8.4 billion spent on share repurchases in Q3 2006 and $23.8 billion distributed to shareholders in the first nine months of 2006.
  • 7Increased capital and exploration expenditures, totaling $5.1 billion in Q3 2006 and $14.8 billion year-to-date, indicating continued investment in future energy production.

Frequently Asked Questions

ExxonMobil reported record net income of $10,490 million ($1.77 per share) for the third quarter of 2006, an increase from $9,920 million in the third quarter of 2005. For the first nine months of 2006, net income was $29,250 million ($4.86 per share), up from $25,420 million in the same period of 2005.

The increase in earnings was primarily driven by higher crude oil and natural gas realizations, along with improved marketing and chemical margins. These positive factors more than offset lower refining margins experienced during the quarter.

ExxonMobil made significant capital expenditures, investing $5.1 billion in the third quarter and $14.8 billion in the first nine months of 2006 on capital and exploration projects. Additionally, the company returned substantial capital to shareholders, repurchasing $8.4 billion of its common stock in the third quarter and distributing $23.8 billion in total to shareholders through dividends and share purchases in the first nine months of 2006.

ExxonMobil is involved in various legal proceedings and contingencies, including significant cases related to the Exxon Valdez grounding and royalty disputes in Alabama. While the company accrues liabilities when probable and estimable, it believes the ultimate outcome of any single pending lawsuit will not have a materially adverse effect on its operations or financial condition. The company has posted significant collateral for certain potential liabilities related to these proceedings.