Second Quarter 2014 Earnings Call Second Quarter 2014 Earnings Call - - PowerPoint PPT Presentation
Second Quarter 2014 Earnings Call Second Quarter 2014 Earnings Call - - PowerPoint PPT Presentation
Second Quarter 2014 Earnings Call Second Quarter 2014 Earnings Call David Rosenthal Vice President Investor Relations & Secretary July 31, 2014 Cautionary Statement Forward-Looking Statements. Outlooks, expectations, forecasts,
- Forward-Looking Statements. Outlooks, expectations, forecasts, estimates, targets, business plans, and other
statements of future events or conditions in this presentation or the subsequent discussion period are forward-looking
- statements. Actual future results, including financial and operating performance; demand growth and mix;
ExxonMobil’s volume/production growth and mix; the amount and mix of capital expenditures; resource additions and recoveries; finding and development costs; project plans, timing, costs, and capacities; drilling programs; product sales and mix; dividend and share purchase levels; cash and debt balances; corporate and financing expenses; and the impact
- f technology could differ materially due to a number of factors. These include changes in oil or gas prices or other
market conditions affecting the oil, gas, and petrochemical industries; the occurrence and duration of economic recessions; reservoir performance; the outcome of exploration; timely completion of development projects; war and
- ther political or security disturbances; changes in law or government regulation, including tax and environmental
regulations; the outcome of commercial negotiations; opportunities for investments or divestments that may arise; the actions of competitors and customers; unexpected technological developments; unforeseen technical difficulties; and
- ther factors discussed here and under the heading "Factors Affecting Future Results" in the Investors section of our
Web site at exxonmobil.com. See also Item 1A of ExxonMobil’s 2013 Form 10-K. Forward-looking statements are based on management’s knowledge and reasonable expectations on the date hereof, and we assume no duty to update these statements as of any future date.
- Frequently Used Terms. References to resources, barrels of oil, volumes of gas and liquids, and similar terms include
quantities that are not yet classified as proved reserves under SEC definitions but that we believe will likely be developed and moved into the proved reserves category in the future. For definitions and more information regarding resources, reserves, return on average capital employed, cash flow from operations and asset sales, free cash flow, and other terms used in this presentation, including information required by SEC Regulation G, see the "Frequently Used Terms" posted
- n the Investors section of our Web site. The Financial and Operating Review on our Web site also shows ExxonMobil's
net interest in specific projects.
- The term ‘project’ as used in this presentation can refer to a variety of different activities and does not necessarily have
the same meaning as in any government payment transparency reports.
Cautionary Statement
2
■ U.S. economic activity recovered ■ China’s growth rate strengthened ■ Europe’s economic recovery remained moderate ■ WTI crude prices increased, narrowing spread to Brent ■ Higher WCS prices ■ Lower U.S. natural gas prices ■ Global industry refining margins strengthened ■ Strong chemical commodity margins offset by weaker specialties
Global econ Global economic gro ic growth th improve improved m modestly in the estly in the se second q cond quarter arter
Business Environment
3
Earnings Earnings 8.8 8.8 Earnings Per Earnings Per Share – Share – Diluted iluted (dollars) 2.05 2.05 Shareholder Distributi Shareholder Distributions
- ns
6.0 6.0 CAPE CAPEX 9.8 9.8 Cash Flow from Cash Flow from Operati Operations and Asset Sales ns and Asset Sales1 12.8 12.8 Cash Cash2 6.3 6.3 Debt Debt 21.8 21.8
Billions of dollars unless specified otherwise
1 Includes $2.6B associated with asset sales 2 Includes restricted cash of $0.2B
2Q14 Financial Results
4
Cash increased by $0.5B in the sh increased by $0.5B in the se second q cond quarter arter
1 Beginning and ending balances include restricted cash of $0.2B 2 Includes PP&E adds of $8.5B less return of $1.8B advance
Beginning Cash Beginning Cash1 5.8 5.8 Earnings 8.8 8.8 Depreciation 4.3 4.3 Working Capital / Other (2.9) (2.9) Proceeds Associated with Asset Sales 2.6 2.6 PP&E Adds / Investments and Advances2 (6.7) (6.7) Shareholder Distributions (6.0) (6.0) Other Financing 0.4 0.4 Ending Cash Ending Cash1 6.3 6.3
Billions of dollars unless specified otherwise
12.8 12.8
2Q14 Sources and Uses of Funds
5
Earnings Earnings increased by increased by $1.9B, primar $1.9B, primarily ily reflecting gains on asset sales and reflecting gains on asset sales and higher earnings across all higher earnings across all business segments business segments
2Q13 2Q13 U/S U/S D/S /S Chem Chem C&F C&F 2Q14 Q14
6, 6,860 860 1, 1,576 576 315 315 85 85 (56 (56) 8, 8,780 780
Millions of Dollars
Total Earnings – 2Q14 vs. 2Q13
6
Earnings Earnings decreased $320M as lower Do decreased $320M as lower Downs wnstream and Chemical earnings ream and Chemical earnings and higher corporate and financing expe and higher corporate and financing expenses were partly offset by nses were partly offset by higher higher Upstre Upstream earn am earnin ings
1Q14 1Q14 U/S U/S D/S /S Chem Chem C&F C&F 2Q14 Q14
9, 9,100 100 98 98 (102) (102) (206) (206) (110) (110) 8, 8,780 780
Millions of Dollars
Total Earnings – 2Q14 vs. 1Q14
7
Upstream
Earnings Earnings increased $1.6B due to increased $1.6B due to gain gains on asset sales in Hong Kong and s on asset sales in Hong Kong and higher realization higher realizations, partly offset by , partly offset by sales timing impacts sales timing impacts
2Q13 2Q13 Realizatio Realization Vol/Mix
- l/Mix
Other Other 2Q14 Q14
6, 6,305 305 580 580 (200 200) 1, 1,190 190 7, 7,881 881
Millions of Dollars
Earnings – 2Q14 vs. 2Q13
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2Q13 2Q14 Delta % Delta % Liquids (KBD) 2,182 2,048
- 134
- 6.1%
+8 +0.4% Gas (MCFD) 11,354 10,750
- 604
- 5.3%
- 604
- 5.3%
Total (KOEBD) 4,074 3,840
- 234
- 5.7%
- 92
- 2.3%
Ex-UAE Expiry Impact:
Volumes decreased 2.3%*: Volumes decreased 2.3%*: Liquids Liquids +8 +8 kbd, natural gas -604 kbd, natural gas -604 mcfd mcfd
2Q13 2Q13 UA UAE Expiry E Expiry Entitl Entitlements ements Divestments Divestments Net Growth Net Growth 2Q14 Q14
koebd
Upstream
4, 4,074 074 (48 (48) (27 27) (17 (17) 3, 3,840 840
Price/Spend: -43 Net Interest:
- 5
Volumes – 2Q14 vs. 2Q13
Liquids: +52
- N. Gas: -69
* Excludes the impact of the UAE onshore concession expiry
(142 142)
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Upstream
Earnings Earnings increased by increased by $98M driven by $98M driven by net gains on asset sales mostly offs net gains on asset sales mostly offset et by by se seasonal im asonal impacts o acts on v volumes lumes
1Q14 1Q14 Realizatio Realization Vol/Mix
- l/Mix
Other Other 2Q14 Q14
7, 7,783 783 (200) (200) (620) (620) 920 920 7, 7,881 881
Millions of Dollars
Earnings – 2Q14 vs. 1Q14
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1Q14 2Q14 Delta % Delta % Liquids (KBD) 2,148 2,048
- 100
- 4.7%
- 77
- 3.6%
Gas (MCFD) 12,016 10,750
- 1,266
- 10.5%
- 1,266
- 10.5%
Total (KOEBD) 4,151 3,840
- 311
- 7.5%
- 288
- 6.9%
Ex-UAE Expiry Impact: 1Q14 1Q14 UA UAE Expiry E Expiry Entitl Entitlements ements Divestments Divestments Net Growth Net Growth 2Q14 Q14
Volumes decreased 6.9%*: Volumes decreased 6.9%*: Liquid Liquids -77
- 77 kbd, natural gas -1,266
kbd, natural gas -1,266 mcfd mcfd
koebd
Upstream
4, 4,151 151 (37 (37) (8) (8) (243) (243) 3, 3,840 840
Price/Spend: -35 Net Interest:
- 2
Volumes – 2Q14 vs. 1Q14
Liquids: -49
- N. Gas: -194
* Excludes the impact of the UAE onshore concession expiry
(23 (23)
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Downstream
Earnings increased $315M due to lo Earnings increased $315M due to lower maintenance activities and the wer maintenance activities and the absence of the Dartmouth refiner absence of the Dartmouth refinery convers conversion, partly offset by
- n, partly offset by lower
lower no non-U.S. re n-U.S. refining m fining margins rgins
2Q13 2Q13 Margin Margin Vol/Mix Vol/Mix Other ther 2Q14 2Q14
Millions of Dollars
396 396 (330) (330) 280 280 370 370 711 711
Earnings – 2Q14 vs. 2Q13
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Downstream
Earnings Earnings decreased $102M reflecting decreased $102M reflecting unfavor unfavorable volume mix effects and able volume mix effects and hig higher m er maintenance, p intenance, partially o rtially offset by hig fset by higher m er margins rgins
Millions of Dollars
1Q14 1Q14 Mar Margin in Vol/Mix Vol/Mix Other ther 2Q14 2Q14
813 813 140 140 (120) (120) (120) (120) 711 711
Earnings – 2Q14 vs. 1Q14
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Chemical
Earnings Earnings increased $85M due to increased $85M due to favo favorable volume/mix and forex effects ble volume/mix and forex effects
Millions of Dollars
2Q13 2Q13 Margin Margin Vol/Mix Vol/Mix Other ther 2Q14 2Q14
756 756 60 60 25 25 841 841
Earnings – 2Q14 vs. 2Q13
14
Chemical
Earnings Earnings decreased $206M due to lowe decreased $206M due to lower specialties r specialties margins margins and higher and higher planned m anned maintenance activ intenance activities ities
Millions of Dollars
1Q14 1Q14 Margin Margin Vol/Mix Vol/Mix Other ther 2Q14 2Q14
1, 1,047 047 (100) (100) 40 40 (150) (150) 841 841
Earnings – 2Q14 vs. 1Q14
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5 10 15 20 25 30
Dividends Dividends
Free Cash Flow: $14.8 billion
Share Purchases
Strong Year-To-Date Cash Flow
$B
Cash Flow Cash Flow from Operati from Operations and Asset and Asset Sales Sales 1
1
PP&E Adds PP&E Adds / / Investmen Investments and s and Advances Advances Shareh Shareholder
- lder
Distri Distribu butions Oth Other r Finan Financin ing g
29.0 29.0 (14.2) (14.2) (11.7) (11.7) (1.7 (1.7) 1.4 1.4
Change in Cash Change in Cash Balan Balance
1 Includes $3.7B associated with asset sales
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Year-to-date free cash flow increa Year-to-date free cash flow increased by sed by $12.1B compared to 1H2013 $12.1B compared to 1H2013
Delivering Profitable Growth
LNG cargo loading at PNG
De Demonstrating wo monstrating world-class p rld-class project e
- ject execution cap
ecution capabilities abilities
Upstream
Analyst Mtg. $112 Brent Actuals at $109 Brent
■ Achieved full PNG LNG ramp-up
- Start-up months ahead of schedule
- 15 cargoes to date
- Completed below $19B estimate
■ CLOV start-up in Angola ■ Sakhalin Arkutun-Dagi topside installed
- Heaviest ever float-over installation
- Start-up later this year
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New Opportunity Growth
Progressing a Progressing a high-potential and high-potential and div diverse e rse exploration p
- ration program
- gram
Upstream
■ Completed horizontal wells in the
Vaca Muerta
- Oil discovery - Bajo Del Choique X-2
- Flow-test La Invernada X-3 in 3Q
■ Additional gas discovery in Tanzania
- 2-3 TCF gas discovery at Piri-1
- Total of 6 discoveries; 20 TCF estimated
■ Progress in the Kurdistan Region of Iraq
- Drilling Pirmam and Alqosh wells
■ Appraising Domino discovery in Romania
- Additional exploration drilling planned
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ExxonMobil Operated ExxonMobil Partner Neuquén Basin
kilometers 0 5 10
Buenos Aires
N Bajo del Choique La Invernada
Oil Pipeline
SAMREF Clean Fuels Project Downstream
Strengthening the Portfolio
■ Commissioned Clean Fuels project in
Saudi Arabia
■ Expanding Lubricants blending
capacity in China
- Meets demand growth for high-quality
finished lubricants
■ Progressing Delayed Coker project at
Antwerp Refinery in Belgium
- Converts heavy, higher sulfur residual oil
into high-value fuel products
- Start-up planned in 2017
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Increasing hig Increasing high-value p
- value product sales
- duct sales
Baytown Olefins Plant Chemical
Growing high-value chemical product sales Growing high-value chemical product sales
Strategic Investments
■ Started construction of ethane cracker
and premium polyethylene facilities in Texas
- Final regulatory approvals received
- Start-up planned in 2017
■ Approved expansions of specialty
hydrocarbon fluids in Antwerp in Belgium and Singapore
- Will serve growing demand for extended-
reach drilling and hydraulic fracturing applications
- Start-ups planned in 2015 and 2016
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ExxonMobi xonMobil’s r s robust cas bust cash fl h flow g growth r
- wth refl
flects our strong year-to-date financial ects our strong year-to-date financial and o and operational p erational performance rformance
Billions of dollars unless specified otherwise
1H14 1H14 Earnings Earnings 17.9 17.9 Upstream Production Upstream Production (MOEBD) 4.0 4.0 Upst Upstream Unit Profitability ream Unit Profitability1
($/OEB)
22.19 22.19 Free Cash Free Cash Flow Flow 14.8 14.8 Shareholder Distributions Shareholder Distributions 11.7 11.7
Highli Highlights ts
■ Production volumes on target ■ Improving production mix/profitability ■ Progressing attractive investments in
Downstream and Chemical
■ Disciplined capital allocation ■ Growing free cash flow ■ Robust shareholder distributions
Summary
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1 ExxonMobil volume excludes noncontrolling interest share