10-QPeriod: Q3 FY2013

EXXON MOBIL CORP Quarterly Report for Q3 Ended Sep 30, 2013

Filed November 5, 2013For Securities:XOM

Summary

ExxonMobil Corporation (XOM) reported a decrease in net income for the third quarter and first nine months of 2013 compared to the same periods in 2012. Third quarter net income was $7.87 billion, down 18% from $9.57 billion in Q3 2012, while year-to-date net income was $24.23 billion, a 27% decrease from $34.93 billion in the first nine months of 2012. This decline was primarily driven by significantly weaker refining margins in the Downstream segment and lower earnings from non-U.S. Upstream operations. Despite the income decrease, the company saw an increase in Upstream earnings driven by higher liquids and natural gas realizations, and strategic capital and exploration expenditures were in line with plans, totaling $10.5 billion in Q3 and $32.6 billion year-to-date, including significant investment in acquisitions like Celtic Exploration Ltd. The company continued its commitment to shareholder returns, distributing $5.8 billion in the third quarter through dividends and share repurchases. However, cash and cash equivalents decreased to $5.7 billion from $13.3 billion year-over-year, and the debt-to-capital ratio increased to 10.8% from 6.3% at year-end 2012. ExxonMobil also reported a higher effective income tax rate for the first nine months of 2013 due to the absence of favorable tax impacts from divestments in the prior year. Investors should note the ongoing legal proceedings and environmental compliance matters, though management believes the outcomes will not have a material adverse effect on the company's financial condition.

Financial Highlights

40 data points
Beta

Net Income

$7.87B

EPS (Diluted)

$1.79

Total Assets

$347.56B

Cash & Equivalents

$5.31B

Free Cash Flow

$4.33B

Financial Statements
Beta
SG&A Expenses$3.15B
Operating Expenses$98.18B
Interest Expense$52.00M
Net Income$7.87B
EPS (Basic)$1.79
EPS (Diluted)$1.79
Shares Outstanding (Basic)4.39B
Shares Outstanding (Diluted)4.39B

Key Highlights

  • 1Third quarter 2013 net income was $7.87 billion, an 18% decrease compared to $9.57 billion in Q3 2012.
  • 2Nine-month 2013 net income was $24.23 billion, a 27% decrease compared to $34.93 billion in the same period of 2012.
  • 3Upstream earnings increased in Q3 2013 due to higher liquids and natural gas realizations, partially offsetting declines in other segments.
  • 4Downstream earnings significantly declined in Q3 2013, primarily due to weaker refining margins.
  • 5Capital and exploration expenditures increased by 15% to $10.5 billion in Q3 2013 and by 19% to $32.6 billion for the nine months ended September 30, 2013.
  • 6Shareholder distributions (dividends and share repurchases) totaled $5.8 billion in Q3 2013.
  • 7Cash and cash equivalents decreased to $5.7 billion at the end of Q3 2013, down from $13.3 billion at the end of Q3 2012.

Frequently Asked Questions

The decrease in net income was primarily driven by significantly weaker refining margins in the Downstream segment and lower earnings from non-U.S. Upstream operations. These factors were partially offset by higher liquids and natural gas realizations in the Upstream segment.

Capital and exploration expenditures increased by 15% to $10.5 billion in the third quarter of 2013 and by 19% to $32.6 billion for the first nine months of 2013. The majority of the spending, $29.6 billion for the nine months, was in the Upstream segment, which included investments in new projects and exploration. The acquisition of Celtic Exploration Ltd. also contributed to the increased spending.

Total cash and cash equivalents stood at $5.7 billion at the end of the third quarter of 2013, a decrease from $13.3 billion at the end of the third quarter of 2012. The company's debt to total capital ratio increased to 10.8% at the end of Q3 2013 from 6.3% at year-end 2012, indicating a shift in capital structure.

Yes, ExxonMobil is involved in several legal proceedings and environmental compliance matters, including charges related to fluid discharge in Pennsylvania, settlement with the Louisiana Department of Environmental Quality, notices of violation from the EPA for its Joliet Refinery, and ongoing investigations related to pipeline discharges in Arkansas and Louisiana. While management states it does not believe the ultimate outcome of these matters will have a material adverse effect on the Corporation's operations or financial condition, these are points of ongoing scrutiny.