10-QPeriod: Q1 FY2020

EXXON MOBIL CORP Quarterly Report for Q1 Ended Mar 31, 2020

Filed May 6, 2020For Securities:XOM

Summary

ExxonMobil Corporation reported a net loss of $610 million ($0.14 per diluted share) for the first quarter of 2020, a significant decline from the $2.4 billion in earnings ($0.55 per diluted share) recorded in the same period of the prior year. This reversal into a net loss was primarily driven by the severe impact of the COVID-19 pandemic, which led to substantial reductions in demand for petroleum products and sharp declines in industry prices. Consequently, the company experienced unfavorable non-operational impacts, including a significant inventory write-down of $2.8 billion (pre-tax) and impairment charges totaling $787 million (after-tax), impacting its Upstream, Downstream, and Chemical segments. Despite the challenging market conditions, ExxonMobil maintained its commitment to shareholders by distributing $3.7 billion in dividends. The company also took proactive steps to strengthen its liquidity by issuing $8.5 billion in long-term debt during the quarter and establishing a $7 billion short-term credit facility. Capital expenditures were significantly reduced to $23 billion for the full year 2020, down from a prior forecast of $33 billion, reflecting the company's response to the volatile economic environment.

Financial Statements
Beta
Revenue$55.13B
SG&A Expenses$2.58B
Operating Expenses$56.42B
Interest Expense$249.00M
Net Income-$610.00M
EPS (Basic)$-0.14
EPS (Diluted)$-0.14
Shares Outstanding (Basic)4.27B

Key Highlights

  • 1Reported a net loss of $610 million for Q1 2020, a stark contrast to the $2.4 billion profit in Q1 2019, largely due to the COVID-19 pandemic's impact on demand and prices.
  • 2Significant non-operational impacts included an inventory write-down of $2.8 billion (pre-tax) and $787 million in after-tax impairment charges, affecting multiple business segments.
  • 3Total revenues and other income decreased to $56.2 billion from $63.6 billion year-over-year.
  • 4Operating cash flow saw a reduction, generating $6.3 billion compared to $8.3 billion in the prior year's quarter.
  • 5The company distributed $3.7 billion in dividends to shareholders, demonstrating continued commitment to capital returns.
  • 6ExxonMobil significantly reduced its 2020 capital expenditure guidance to $23 billion from $33 billion in response to market conditions.
  • 7Total debt increased to $59.6 billion from $46.9 billion at year-end 2019, with $8.5 billion in new long-term debt issued during the quarter.

Frequently Asked Questions

The primary driver for the net loss in Q1 2020, compared to a profit in Q1 2019, was the unprecedented impact of the COVID-19 pandemic. This led to a sharp decrease in global demand for oil and gas products, causing a significant decline in commodity prices. ExxonMobil also recorded substantial inventory write-downs and impairment charges due to these deteriorating market conditions.

ExxonMobil has taken measures to strengthen its liquidity. This includes issuing $8.5 billion in long-term debt during the first quarter of 2020 and establishing an additional $7 billion short-term credit facility. The company also increased its cash and cash equivalents by $8.3 billion to $11.4 billion.

In response to the challenging market conditions, ExxonMobil significantly reduced its planned capital expenditures for 2020. The forecast has been lowered to $23 billion, down from the previously announced $33 billion. This reduction reflects the company's strategy to conserve cash and adapt to the volatile economic landscape.

Yes, ExxonMobil recognized after-tax impairment charges totaling $787 million. These charges were primarily due to the significant reduction in the company's market capitalization and deteriorating industry conditions resulting from the COVID-19 pandemic, which negatively impacted the fair value of certain assets, including goodwill in its Upstream, Downstream, and Chemical segments.