10-QPeriod: Q3 FY2016

EXXON MOBIL CORP Quarterly Report for Q3 Ended Sep 30, 2016

Filed November 3, 2016For Securities:XOM

Summary

ExxonMobil Corporation's (XOM) Q3 2016 10-Q filing reveals a challenging operating environment, with net income attributable to ExxonMobil declining to $2.65 billion for the third quarter, down from $4.24 billion in the same period of 2015. This decline was primarily driven by lower commodity prices and refining margins across its Upstream and Downstream segments, despite stable oil-equivalent production. Capital and exploration expenditures were significantly reduced year-over-year, reflecting a strategic focus on efficiency and value creation amidst prevailing market conditions. The company continued its commitment to shareholder returns by distributing $9.3 billion in dividends during the first nine months of the year. Looking ahead, ExxonMobil is navigating a complex energy landscape, with continued focus on cost efficiencies, strategic investments, and managing its asset portfolio. The company also announced a significant acquisition of InterOil Corporation for over $2.5 billion, subject to closing conditions, aimed at expanding its resource base. While the company anticipates potential impacts on reported proved reserves due to low commodity prices, it maintains that this will not affect the operational outlook or future production volumes.

Financial Highlights

40 data points
Beta

Net Income

$2.65B

EPS (Diluted)

$0.63

Total Assets

$339.39B

Cash & Equivalents

$5.09B

Free Cash Flow

$1.95B

Financial Statements
Beta
SG&A Expenses$2.74B
Operating Expenses$55.45B
Interest Expense$106.00M
Net Income$2.65B
EPS (Basic)$0.63
EPS (Diluted)$0.63
Shares Outstanding (Basic)4.18B

Key Highlights

  • 1Net income attributable to ExxonMobil for Q3 2016 was $2.65 billion, a decrease from $4.24 billion in Q3 2015, primarily due to lower commodity prices and refining margins.
  • 2Earnings per diluted share for Q3 2016 were $0.63, down from $1.01 in Q3 2015.
  • 3Capital and exploration expenditures for the first nine months of 2016 were $14.5 billion, a significant decrease of 39% from $23.6 billion in the same period of 2015, reflecting a focus on efficiency.
  • 4Oil-equivalent production remained stable year-over-year, with liquids production up 2.6% and natural gas down 4.4% for the first nine months of 2016.
  • 5The company distributed $9.3 billion in dividends to shareholders during the first nine months of 2016.
  • 6ExxonMobil announced an agreement to acquire InterOil Corporation for over $2.5 billion, subject to closing conditions, to expand its resource base.
  • 7The company's debt-to-total capital ratio increased to 20.7% at the end of Q3 2016 from 18.0% at year-end 2015, largely due to a significant issuance of long-term debt in Q1 2016.

Frequently Asked Questions

The primary drivers for the decrease in net income were lower commodity prices and reduced refining margins. These factors negatively impacted earnings across both the Upstream and Downstream segments of the business.

ExxonMobil significantly reduced its capital and exploration expenditures by 39% to $14.5 billion for the first nine months of 2016 compared to the prior year. This reflects a strategic focus on capturing efficiencies, advancing selective investments, and creating long-term shareholder value in a challenging operating environment.

The proposed acquisition of InterOil Corporation (IOC) for over $2.5 billion is a strategic move to expand ExxonMobil's resource base, particularly in exploration and production in Papua New Guinea. The transaction is subject to closing conditions, including shareholder approval and legal appeals.

ExxonMobil anticipates that persistent low commodity prices may lead to certain quantities of oil and natural gas not qualifying as proved reserves under SEC definitions at year-end 2016, particularly in North America. However, the company states that this is not expected to affect the operation of the underlying projects or its outlook for future production volumes.