10-QPeriod: Q2 FY2015

EXXON MOBIL CORP Quarterly Report for Q2 Ended Jun 30, 2015

Filed August 5, 2015For Securities:XOM

Summary

ExxonMobil Corporation reported a significant decrease in net income attributable to shareholders for the second quarter and first six months of 2015 compared to the same periods in 2014. This decline is primarily driven by lower commodity prices impacting upstream realizations, which more than offset gains in downstream and chemical segments. Despite the lower earnings, the company maintained capital discipline, with capital and exploration expenditures decreasing by 12% year-over-year for the first six months. ExxonMobil also continued to return capital to shareholders through dividends and share repurchases, although the pace of share purchases was reduced compared to the prior year. The balance sheet shows a slight decrease in total assets and equity. Notably, long-term debt increased significantly due to an $8.0 billion issuance in the first quarter of 2015, leading to a higher debt-to-capital ratio. Cash flow from operations also declined, reflecting the lower earnings. The company continues to navigate a challenging commodity price environment while focusing on operational efficiency and strategic investments.

Financial Highlights

41 data points
Beta

Net Income

$4.19B

EPS (Diluted)

$1.00

Total Assets

$348.26B

Cash & Equivalents

$4.34B

Free Cash Flow

$1.68B

Financial Statements
Beta
SG&A Expenses$2.83B
Operating Expenses$67.16B
Interest Expense$85.00M
Net Income$4.19B
EPS (Basic)$1.00
EPS (Diluted)$1.00
Shares Outstanding (Basic)4.20B

Key Highlights

  • 1Net income attributable to ExxonMobil decreased significantly by 52% for the three months ended June 30, 2015, and by 49% for the six months ended June 30, 2015, compared to the prior year periods, primarily due to lower upstream realizations.
  • 2Earnings per diluted share fell to $1.00 in Q2 2015 and $2.17 in the first six months of 2015, down from $2.05 and $4.15 respectively in the comparable 2014 periods.
  • 3Capital and exploration expenditures for the first six months of 2015 were $16.0 billion, a decrease of 12% from $18.2 billion in the same period of 2014.
  • 4The company distributed $8 billion to shareholders in the first half of 2015, comprising $6 billion in dividends and $2 billion in share repurchases, though share repurchases were lower than the prior year.
  • 5Long-term debt increased by $7.8 billion to $19.4 billion as of June 30, 2015, driven by an $8.0 billion issuance in Q1 2015, leading to an increase in the debt-to-total capital ratio to 15.9% from 13.9% at year-end 2014.
  • 6Upstream earnings experienced a substantial decline of $5.8 billion in Q2 2015 and $10.8 billion in the first six months of 2015, largely due to lower commodity prices and, in the case of natural gas, regulatory restrictions in the Netherlands.
  • 7Downstream and Chemical segments showed improved performance, with Downstream earnings up $795 million in Q2 2015 and Chemical earnings up $405 million in Q2 2015, driven by stronger margins.

Frequently Asked Questions

The primary driver is the substantial decline in commodity prices, particularly for crude oil and natural gas. This led to lower 'upstream realizations' (the prices ExxonMobil received for its oil and gas) which negatively impacted earnings, more than offsetting improvements seen in the downstream and chemical segments.

ExxonMobil demonstrated capital discipline by reducing its capital and exploration expenditures by 12% in the first six months of 2015 compared to the prior year. The company also continued to return value to shareholders through dividends and share repurchases, totaling $8 billion in the first half of 2015, although share purchase activity was reduced compared to 2014.

ExxonMobil issued $8.0 billion in long-term debt in the first quarter of 2015. This contributed to an increase in total long-term debt and consequently raised the company's debt-to-total capital ratio to 15.9% as of June 30, 2015, from 13.9% at the end of 2014. This was done to manage its capital structure and potentially fund operations and investments.

The Upstream segment experienced a significant earnings decline due to lower commodity prices. However, the Downstream segment saw improved earnings, driven by stronger margins, and the Chemical segment also reported higher earnings, benefiting from lower feedstock costs and improved margins. These gains in Downstream and Chemical helped to partially offset the weakness in the Upstream segment.