☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2024
or
☐TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number 1-2256
Exxon Mobil Corporation
(Exact name of registrant as specified in its charter)
New Jersey
13-5409005
(State or other jurisdiction of incorporation or organization)
(I.R.S. Employer Identification Number)
22777 Springwoods Village Parkway,Spring,Texas77389-1425
(Address of principal executive offices) (Zip Code)
(972)940-6000
(Registrant's telephone number, including area code)
_______________________
Securities registered pursuant to Section 12(b) of the Act:
Title of Each Class
Trading Symbol
Name of Each Exchange on Which Registered
Common Stock, without par value
XOM
New York Stock Exchange
0.142% Notes due 2024
XOM24B
New York Stock Exchange
0.524% Notes due 2028
XOM28
New York Stock Exchange
0.835% Notes due 2032
XOM32
New York Stock Exchange
1.408% Notes due 2039
XOM39A
New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.Yes ☑No ☐
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).Yes ☑No ☐
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of "large accelerated filer," "accelerated filer," "smaller reporting company," and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer
☑
Accelerated filer
☐
Non-accelerated filer
☐
Smaller reporting company
☐
Emerging growth company
☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.☐
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes☐No ☑
Indicate the number of shares outstanding of each of the issuer's classes of common stock, as of the latest practicable date.
Class
Outstanding as of March 31, 2024
Common stock, without par value
3,943,006,866
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2024
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Income - Three months ended March 31, 2024 and 2023
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs
9
6
Total other comprehensive income (loss)
(1,300)
198
Comprehensive income (loss) including noncontrolling interests
7,266
12,041
Comprehensive income (loss) attributable to noncontrolling interests
226
436
Comprehensive income (loss) attributable to ExxonMobil
7,040
11,605
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
4
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars, unless noted)
March 31, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
33,320
31,539
Cash and cash equivalents – restricted
29
29
Notes and accounts receivable – net
40,366
38,015
Inventories
Crude oil, products and merchandise
18,891
20,528
Materials and supplies
4,600
4,592
Other current assets
2,171
1,906
Total current assets
99,377
96,609
Investments, advances and long-term receivables
47,608
47,630
Property, plant and equipment – net
213,723
214,940
Other assets, including intangibles – net
17,210
17,138
Total Assets
377,918
376,317
LIABILITIES
Current liabilities
Notes and loans payable
8,227
4,090
Accounts payable and accrued liabilities
59,531
58,037
Income taxes payable
4,163
3,189
Total current liabilities
71,921
65,316
Long-term debt
32,213
37,483
Postretirement benefits reserves
10,475
10,496
Deferred income tax liabilities
24,106
24,452
Long-term obligations to equity companies
1,909
1,804
Other long-term obligations
24,242
24,228
Total Liabilities
164,866
163,779
Commitments and contingencies (Note 3)
EQUITY
Common stock without par value
(9,000 million shares authorized, 8,019 million shares issued)
17,971
17,781
Earnings reinvested
458,339
453,927
Accumulated other comprehensive income
(13,169)
(11,989)
Common stock held in treasury
(4,076 million shares at March 31, 2024 and
4,048 million shares at December 31, 2023)
(257,891)
(254,917)
ExxonMobil share of equity
205,250
204,802
Noncontrolling interests
7,802
7,736
Total Equity
213,052
212,538
Total Liabilities and Equity
377,918
376,317
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
5
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
Three Months Ended March 31,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) including noncontrolling interests
8,566
11,843
Depreciation and depletion (includes impairments)
4,812
4,244
Changes in operational working capital, excluding cash and debt
2,008
(302)
All other items – net
(722)
556
Net cash provided by operating activities
14,664
16,341
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment
(5,074)
(5,412)
Proceeds from asset sales and returns of investments
703
854
Additional investments and advances
(421)
(445)
Other investing activities including collection of advances
215
78
Net cash used in investing activities
(4,577)
(4,925)
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt
108
20
Reductions in short-term debt
(1,106)
(126)
Additions/(reductions) in debt with three months or less maturity
(5)
(192)
Cash dividends to ExxonMobil shareholders
(3,808)
(3,738)
Cash dividends to noncontrolling interests
(166)
(115)
Changes in noncontrolling interests
6
(16)
Common stock acquired
(3,011)
(4,340)
Net cash used in financing activities
(7,982)
(8,507)
Effects of exchange rate changes on cash
(324)
102
Increase/(decrease) in cash and cash equivalents
1,781
3,011
Cash and cash equivalents at beginning of period
31,568
29,665
Cash and cash equivalents at end of period
33,349
32,676
SUPPLEMENTAL DISCLOSURES
Income taxes paid
2,718
4,404
Cash interest paid
Included in cash flows from operating activities
301
256
Capitalized, included in cash flows from investing activities
297
291
Total cash interest paid
598
547
Noncash right of use assets recorded in exchange for lease liabilities
Operating leases
351
393
Finance leases
—
438
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
6
CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY
ExxonMobil Share of Equity
(millions of dollars, unless noted)
Common Stock
Earnings Reinvested
Accumulated Other Comprehensive Income
Common Stock Held in Treasury
ExxonMobil Share of Equity
Non-controlling Interests
Total Equity
Balance as of December 31, 2022
15,752
432,860
(13,270)
(240,293)
195,049
7,424
202,473
Amortization of stock-based awards
158
—
—
—
158
—
158
Other
(6)
—
—
—
(6)
(16)
(22)
Net income (loss) for the period
—
11,430
—
—
11,430
413
11,843
Dividends - common shares
—
(3,738)
—
—
(3,738)
(115)
(3,853)
Other comprehensive income (loss)
—
—
175
—
175
23
198
Share repurchases, at cost
—
—
—
(4,385)
(4,385)
—
(4,385)
Dispositions
—
—
—
2
2
—
2
Balance as of March 31, 2023
15,904
440,552
(13,095)
(244,676)
198,685
7,729
206,414
Balance as of December 31, 2023
17,781
453,927
(11,989)
(254,917)
204,802
7,736
212,538
Amortization of stock-based awards
197
—
—
—
197
—
197
Other
(7)
—
—
—
(7)
6
(1)
Net income (loss) for the period
—
8,220
—
—
8,220
346
8,566
Dividends - common shares
—
(3,808)
—
—
(3,808)
(166)
(3,974)
Other comprehensive income (loss)
—
—
(1,180)
—
(1,180)
(120)
(1,300)
Share repurchases, at cost
—
—
—
(2,978)
(2,978)
—
(2,978)
Dispositions
—
—
—
4
4
—
4
Balance as of March 31, 2024
17,971
458,339
(13,169)
(257,891)
205,250
7,802
213,052
Three Months Ended March 31, 2024
Three Months Ended March 31, 2023
Common Stock Share Activity
(millions of shares)
Issued
Held in Treasury
Outstanding
Issued
Held in Treasury
Outstanding
Balance as of December 31
8,019
(4,048)
3,971
8,019
(3,937)
4,082
Share repurchases, at cost
—
(28)
(28)
—
(39)
(39)
Dispositions
—
—
—
—
—
—
Balance as of March 31
8,019
(4,076)
3,943
8,019
(3,976)
4,043
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
7
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1. Basis of Financial Statement Preparation
These unaudited condensed consolidated financial statements should be read in the context of the consolidated financial statements and notes thereto filed with the Securities and Exchange Commission in the Corporation's 2023 Annual Report on Form 10-K. In the opinion of the Corporation, the information furnished herein reflects all known accruals and adjustments necessary for a fair statement of the results for the periods reported herein. All such adjustments are of a normal recurring nature.
The Corporation's exploration and production activities are accounted for under the "successful efforts" method.
Note 2. Pioneer Natural Resources Merger
On October 11, 2023, the Corporation entered into a merger agreement with Pioneer Natural Resources Company (Pioneer), an independent oil and gas exploration and production company, in exchange for ExxonMobil common stock. Based on the October 5 closing price for ExxonMobil shares, the fixed exchange rate of 2.3234 per Pioneer share, and Pioneer's outstanding net debt, the implied enterprise value of the transaction was approximately $65 billion. We expect that the number of shares issuable in connection with the transaction to be approximately 545 million. The transaction is expected to close in the second quarter of 2024, subject to regulatory approvals.
Pioneer holds over 850,000 net acres in the Midland Basin of West Texas, which consist of proved reserves totaling over 2.4 billion barrels of oil equivalent (as of December 31, 2023) and over 700 thousand oil-equivalent barrels per day of production for the three months ended December 31, 2023.
8
Note 3. Litigation and Other Contingencies
Litigation
A variety of claims have been made against ExxonMobil and certain of its consolidated subsidiaries in a number of pending lawsuits. Management has regular litigation reviews, including updates from corporate and outside counsel, to assess the need for accounting recognition or disclosure of these contingencies. The Corporation accrues an undiscounted liability for those contingencies where the incurrence of a loss is probable and the amount can be reasonably estimated. If a range of amounts can be reasonably estimated and no amount within the range is a better estimate than any other amount, then the minimum of the range is accrued. The Corporation does not record liabilities when the likelihood that the liability has been incurred is probable but the amount cannot be reasonably estimated or when the liability is believed to be only reasonably possible or remote. For contingencies where an unfavorable outcome is reasonably possible and which are significant, the Corporation discloses the nature of the contingency and, where feasible, an estimate of the possible loss. For purposes of our contingency disclosures, “significant” includes material matters, as well as other matters which management believes should be disclosed.
State and local governments and other entities in various jurisdictions across the United States and its territories have filed a number of legal proceedings against several oil and gas companies, including ExxonMobil, requesting unprecedented legal and equitable relief for various alleged injuries purportedly connected to climate change. These lawsuits assert a variety of novel, untested claims under statutory and common law. Additional such lawsuits may be filed. We believe the legal and factual theories set forth in these proceedings are meritless and represent an inappropriate attempt to use the court system to usurp the proper role of policymakers in addressing the societal challenges of climate change.
Local governments in Louisiana have filed unprecedented legal proceedings against a number of oil and gas companies, including ExxonMobil, requesting compensation for the restoration of coastal marsh erosion in the state. We believe the factual and legal theories set forth in these proceedings are meritless.
While the outcome of any litigation can be unpredictable, we believe the likelihood is remote that the ultimate outcomes of these lawsuits will have a material adverse effect on the Corporation’s operations, financial condition, or financial statements taken as a whole. We will continue to defend vigorously against these claims.
Other Contingencies
The Corporation and certain of its consolidated subsidiaries were contingently liable at March 31, 2024, for guarantees relating to notes, loans and performance under contracts. Where guarantees for environmental remediation and other similar matters do not include a stated cap, the amounts reflect management’s estimate of the maximum potential exposure. Where it is not possible to make a reasonable estimation of the maximum potential amount of future payments, future performance is expected to be either immaterial or have only a remote chance of occurrence.
March 31, 2024
(millions of dollars)
Equity Company
Obligations(1)
Other Third-Party Obligations
Total
Guarantees
Debt-related
1,130
146
1,276
Other
681
5,820
6,501
Total
1,811
5,966
7,777
(1) ExxonMobil share
Additionally, the Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition.
Current period change excluding amounts reclassified from accumulated other comprehensive income (1)
157
14
171
Amounts reclassified from accumulated other comprehensive income
—
4
4
Total change in accumulated other comprehensive income
157
18
175
Balance as of March 31, 2023
(14,434)
1,339
(13,095)
Balance as of December 31, 2023
(13,056)
1,067
(11,989)
Current period change excluding amounts reclassified from accumulated other comprehensive income (1)
(1,138)
(48)
(1,186)
Amounts reclassified from accumulated other comprehensive income
—
6
6
Total change in accumulated other comprehensive income
(1,138)
(42)
(1,180)
Balance as of March 31, 2024
(14,194)
1,025
(13,169)
(1) Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $84 million and $(74) million in 2024 and 2023, respectively.
Amounts Reclassified Out of Accumulated Other
Comprehensive Income - Before-tax Income/(Expense)
(millions of dollars)
Three Months Ended March 31,
2024
2023
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs
(Statement of Income line: Non-service pension and postretirement benefit expense)
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs
(3)
(2)
Total
(74)
57
10
Note 5. Earnings Per Share
Earnings per common share
Three Months Ended March 31,
2024
2023
Net income (loss) attributable to ExxonMobil (millions of dollars)
8,220
11,430
Weighted-average number of common shares outstanding (millions of shares)(1)
3,998
4,102
Earnings (loss) per common share (dollars)(2)
2.06
2.79
Dividends paid per common share (dollars)
0.95
0.91
(1) Includes restricted shares not vested.
(2) Earnings (loss) per common share and earnings (loss) per common share – assuming dilution are the same in each period shown.
Note 6. Pension and Other Postretirement Benefits
(millions of dollars)
Three Months Ended March 31,
2024
2023
Components of net benefit cost
Pension Benefits - U.S.
Service cost
113
120
Interest cost
168
166
Expected return on plan assets
(181)
(133)
Amortization of actuarial loss/(gain)
21
21
Amortization of prior service cost
(8)
(7)
Net pension enhancement and curtailment/settlement cost
3
8
Net benefit cost
116
175
Pension Benefits - Non-U.S.
Service cost
83
82
Interest cost
227
234
Expected return on plan assets
(261)
(174)
Amortization of actuarial loss/(gain)
25
14
Amortization of prior service cost
13
12
Net benefit cost
87
168
Other Postretirement Benefits
Service cost
18
20
Interest cost
63
70
Expected return on plan assets
(5)
(4)
Amortization of actuarial loss/(gain)
(26)
(30)
Amortization of prior service cost
(16)
(10)
Net benefit cost
34
46
11
Note 7. Financial Instruments and Derivatives
The estimated fair value of financial instruments and derivatives at March 31, 2024 and December 31, 2023, and the related hierarchy level for the fair value measurement was as follows:
March 31, 2024
Fair Value
(millions of dollars)
Level 1
Level 2
Level 3
Total Gross Assets & Liabilities
Effect of Counterparty Netting
Effect of Collateral Netting
Difference in Carrying Value and Fair Value
Net Carrying Value
Assets
Derivative assets (1)
5,813
1,304
—
7,117
(6,492)
(88)
—
537
Advances to/receivables from equity companies (2)(6)
—
2,458
4,657
7,115
—
—
498
7,613
Other long-term financial assets (3)
1,372
—
1,042
2,414
—
—
174
2,588
Liabilities
Derivative liabilities(4)
5,944
1,376
—
7,320
(6,492)
(218)
—
610
Long-term debt(5)
25,558
1,378
—
26,936
—
—
3,494
30,430
Long-term obligations to equity companies(6)
—
—
2,039
2,039
—
—
(130)
1,909
Other long-term financial liabilities(7)
—
—
694
694
—
—
48
742
December 31, 2023
Fair Value
(millions of dollars)
Level 1
Level 2
Level 3
Total Gross Assets & Liabilities
Effect of Counterparty Netting
Effect of Collateral Netting
Difference in Carrying Value and Fair Value
Net Carrying Value
Assets
Derivative assets (1)
4,544
1,731
—
6,275
(5,177)
(528)
—
570
Advances to/receivables from equity companies (2)(6)
—
2,517
4,491
7,008
—
—
519
7,527
Other long-term financial assets (3)
1,389
—
944
2,333
—
—
202
2,535
Liabilities
Derivative liabilities(4)
4,056
1,608
—
5,664
(5,177)
(40)
—
447
Long-term debt(5)
30,556
2,004
—
32,560
—
—
3,102
35,662
Long-term obligations to equity companies(6)
—
—
1,896
1,896
—
—
(92)
1,804
Other long-term financial liabilities (7)
—
—
697
697
—
—
45
742
(1) Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles - net.
(2) Included in the Balance Sheet line: Investments, advances and long-term receivables.
(3) Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles - net.
(4) Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations.
(5) Excluding finance lease obligations.
(6) Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company.
(7) Included in the Balance Sheet line: Other long-term obligations. Includes contingent consideration related to a prior year acquisition where fair value is based on expected drilling activities and discount rates.
At March 31, 2024 and December 31, 2023, respectively, the Corporation had $736 million and $800 million of collateral under master netting arrangements not offset against the derivatives on the Condensed Consolidated Balance Sheet, primarily related to initial margin requirements.
12
The Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to foreign exchange fluctuations is reported in accumulated other comprehensive income. As of March 31, 2024, the Corporation has designated $4.9 billion of its Euro-denominated debt and related accrued interest as a net investment hedge of its European business. The net investment hedge is deemed to be perfectly effective.
The Corporation had undrawn short-term committed lines of credit of $323 million and undrawn long-term committed lines of credit of $1,914 million as of first quarter 2024.
Derivative Instruments
The Corporation’s size, strong capital structure, geographic diversity, and the complementary nature of its business segments reduce the Corporation’s enterprise-wide risk from changes in commodity prices, currency rates and interest rates. In addition, the Corporation uses commodity-based contracts, including derivatives, to manage commodity price risk and to generate returns from trading. Commodity contracts held for trading purposes are presented in the Condensed Consolidated Statement of Income on a net basis in the line “Sales and other operating revenue" and in the Consolidated Statement of Cash Flows in “Cash Flows from Operating Activities”. The Corporation’s commodity derivatives are not accounted for under hedge accounting. At times, the Corporation also enters into currency and interest rate derivatives, none of which are material to the Corporation’s financial position as of March 31, 2024 and December 31, 2023, or results of operations for the periods ended March 31, 2024 and 2023.
Credit risk associated with the Corporation’s derivative position is mitigated by several factors, including the use of derivative clearing exchanges and the quality of and financial limits placed on derivative counterparties. The Corporation maintains a system of controls that includes the authorization, reporting, and monitoring of derivative activity.
The net notional long/(short) position of derivative instruments at March 31, 2024 and December 31, 2023, was as follows:
(millions)
March 31, 2024
December 31, 2023
Crude oil (barrels)
15
(7)
Petroleum products (barrels)
(39)
(43)
Natural gas (MMBTUs)
(577)
(560)
Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Condensed Consolidated Statement of Income are included in the following lines on a before-tax basis:
(millions of dollars)
Three Months Ended March 31,
2024
2023
Sales and other operating revenue
(792)
651
Crude oil and product purchases
3
(25)
Total
(789)
626
13
Note 8. Disclosures about Segments and Related Information
(millions of dollars)
Three Months Ended March 31,
2024
2023
Earnings (Loss) After Income Tax
Upstream
United States
1,054
1,632
Non-U.S.
4,606
4,825
Energy Products
United States
836
1,910
Non-U.S.
540
2,273
Chemical Products
United States
504
324
Non-U.S.
281
47
Specialty Products
United States
404
451
Non-U.S.
357
323
Corporate and Financing
(362)
(355)
Corporate total
8,220
11,430
Sales and Other Operating Revenue
Upstream
United States
2,190
2,770
Non-U.S.
3,526
5,387
Energy Products
United States
24,803
24,924
Non-U.S.
39,409
39,976
Chemical Products
United States
2,194
2,029
Non-U.S.
3,646
3,692
Specialty Products
United States
1,469
1,568
Non-U.S.
3,150
3,289
Corporate and Financing
24
9
Corporate total
80,411
83,644
Intersegment Revenue
Upstream
United States
5,988
4,956
Non-U.S.
9,980
9,399
Energy Products
United States
6,558
5,451
Non-U.S.
6,752
6,969
Chemical Products
United States
1,865
1,788
Non-U.S.
1,025
777
Specialty Products
United States
655
680
Non-U.S.
164
99
Corporate and Financing
79
64
14
Geographic Sales and Other Operating Revenue
(millions of dollars)
Three Months Ended March 31,
2024
2023
United States
30,656
31,291
Non-U.S.
49,755
52,353
Total
80,411
83,644
Significant Non-U.S. revenue sources include: (1)
Canada
7,055
6,721
United Kingdom
5,160
7,011
Singapore
4,018
3,731
France
3,473
3,484
Australia
2,425
2,428
Belgium
2,407
2,649
Germany
2,347
2,293
(1)Revenue is determined by primary country of operations. Excludes certain sales and other operating revenues in non-U.S. operations where attribution to a specific country is not practicable.
Revenue from Contracts with Customers
Sales and other operating revenue include both revenue within the scope of ASC 606 and outside the scope of ASC 606. Trade receivables in Notes and accounts receivable – net reported on the Balance Sheet also includes both receivables within the scope of ASC 606 and those outside the scope of ASC 606. Revenue and receivables outside the scope of ASC 606 primarily relate to physically settled commodity contracts accounted for as derivatives. Contractual terms, credit quality, and type of customer are generally similar between those revenues and receivables within the scope of ASC 606 and those outside it.
Sales and other operating revenue
(millions of dollars)
Three Months Ended March 31,
2024
2023
Revenue from contracts with customers
58,419
64,304
Revenue outside the scope of ASC 606
21,992
19,340
Total
80,411
83,644
15
Note 9. Divestment Activities
Through March 31, 2024, the Corporation realized proceeds of approximately $0.7 billion from its divestment activities with negligible impact on net after-tax earnings. This included the sale of the Santa Ynez Unit and associated facilities in California, as well as other smaller divestments.
In 2023, the Corporation realized proceeds of approximately $4.1 billion and recognized net after-tax earnings of approximately $0.6 billion from its divestment activities. This included the sale of the Aera Energy joint venture, Esso Thailand Ltd., the Billings Refinery, certain unconventional assets in the United States, as well as other smaller divestments.
In February 2022, the Corporation signed an agreement with Seplat Energy Offshore Limited for the sale of Mobil Producing Nigeria Unlimited. The agreement is subject to certain conditions precedent and government approvals. In mid-2022, a Nigerian court issued an order to halt transition activities and enter into arbitration with the Nigerian National Petroleum Company. The closing date and any loss on sale will depend on resolution of these matters.
16
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
In the first quarter of 2024 the price of crude oil remained flat relative to fourth quarter 2023 and near the middle of the pre-COVID 10-year range (2010-2019), as markets remained balanced. More recently, the market for crude has tightened driven by ongoing concerns over conflict in the Middle East. Natural gas prices decreased, moving back toward the middle of the 10-year range, on high inventory levels and lower demand. Refining margins in the quarter rose to the top of the 10-year range, as demand grew while turnarounds and global disruptions weighed on supply. Chemical margins remained relatively flat at bottom-of-cycle conditions, as new capacity additions offset demand growth.
Recent Mergers and Acquisitions
In October 2023, ExxonMobil announced that it had entered into a definitive merger agreement with Pioneer Natural Resources. The transaction represents an opportunity to deliver leading capital efficiency and cost performance as well as increase production by combining Pioneer's large scale, contiguous, high-quality undeveloped Midland acreage with ExxonMobil's Permian resource development approach. In addition to increasing production, we plan to pull forward Pioneer's Net Zero ambition by 15 years, from 2050 to 2035. See "Note 2. Pioneer Natural Resources Merger" of the Condensed Consolidated Financial Statements for additional information.
Selected Earnings Factor Definitions
The earnings factors have been updated to provide additional visibility into drivers of our business results starting this first quarter of 2024. The company evaluates these factors periodically to determine if any enhancements may provide helpful insights to the market. Listed below are descriptions of the earnings factors:
Advantaged Volume Growth. Earnings impacts from change in volume/mix from advantaged assets, strategic projects, and high-value products.
•Advantaged Assets (Advantaged growth projects). Includes Permian, Guyana, Brazil, and LNG.
•Strategic Projects. Includes (i) the following completed projects: Rotterdam Hydrocracker, Corpus Christi Chemical Complex, Baton Rouge Polypropylene, Beaumont Crude Expansion, Baytown Chemical Expansion, Permian Crude Venture, and the 2022 Baytown advanced recycling facility; and (ii) the following projects still to be completed: Fawley Hydrofiner, China Chemical Complex, Singapore Resid Upgrade, Strathcona Renewable Diesel, Proxxima VentureTM, USGC Reconfiguration, additional advanced recycling projects under evaluation worldwide, and additional projects in plan yet to be publicly announced.
•High-Value Products. Includes performance products and lower-emission fuels. Performance products (performance chemicals, performance lubricants) refers to products that provide differentiated performance for multiple applications through enhanced properties versus commodity alternatives and bring significant additional value to customers and end-users. Lower-emission fuels refers to fuels with lower life cycle emissions than conventional transportation fuels for gasoline, diesel and jet transport.
Base Volume. Includes all volume/mix factors not included in Advantaged Volume Growth defined above.
Structural Cost Savings. After-tax earnings effect of Structural Cost Savings as defined on page 19, including cash operating expenses related to divestments that were previously in the "volume/mix" factor.
Expenses. Includes all expenses otherwise not included in other earnings factors.
Timing Effects. Timing effects are primarily related to unsettled derivatives (mark-to-market) and other earnings impacts driven by timing differences between the settlement of derivatives and their offsetting physical commodity realizations (due to LIFO inventory accounting).
17
Earnings (loss) excluding Identified Items
Earnings (loss) excluding Identified Items (non-GAAP) are earnings (loss) excluding individually significant non-operational events with, typically, an absolute corporate total earnings impact of at least $250 million in a given quarter. The earnings (loss) impact of an Identified Item for an individual segment in a given quarter may be less than $250 million when the item impacts several periods or several segments. Earnings (loss) excluding identified items does include non-operational earnings events or impacts that are generally below the $250 million threshold utilized for Identified Items. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The Corporation believes this view provides investors increased transparency into business results and trends and provides investors with a view of the business as seen through the eyes of management. Earnings (loss) excluding Identified Items is not meant to be viewed in isolation or as a substitute for net income (loss) attributable to ExxonMobil as prepared in accordance with U.S. GAAP.
References in this discussion to Corporate earnings (loss) mean net income (loss) attributable to ExxonMobil (U.S. GAAP) from the Condensed Consolidated Statement of Income. Unless otherwise indicated, references to earnings (loss); Upstream, Energy Products, Chemical Products, Specialty Products, and Corporate and Financing earnings (loss); and earnings (loss) per share are ExxonMobil's share after excluding amounts attributable to noncontrolling interests.
Due to rounding, numbers presented may not add up precisely to the totals indicated.
18
Structural Cost Savings
Structural Cost Savings describes decreases in cash opex excluding energy and production taxes as a result of operational efficiencies, workforce reductions, divestment-related reductions, and other cost-savings measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative Structural Cost Savings totaled $10.1 billion, which included an additional $0.4 billion in the first three months of 2024. The total change between periods in expenses below will reflect both Structural Cost Savings and other changes in spend, including market factors, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations. Estimates of cumulative annual structural savings may be revised depending on whether cost reductions realized in prior periods are determined to be sustainable compared to 2019 levels. Structural Cost Savings are stewarded internally to support management's oversight of spending over time. This measure is useful for investors to understand the Corporation's efforts to optimize spending through disciplined expense management.
Dollars in billions (unless otherwise noted)
Twelve Months Ended December 31,
Three Months Ended March 31,
2019
2023
2023
2024
Components of Operating Costs
From ExxonMobil’s Consolidated Statement of Income (U.S. GAAP)
Production and manufacturing expenses
36.8
36.9
9.4
9.1
Selling, general and administrative expenses
11.4
9.9
2.4
2.5
Depreciation and depletion (includes impairments)
19.0
20.6
4.2
4.8
Exploration expenses, including dry holes
1.3
0.8
0.1
0.1
Non-service pension and postretirement benefit expense
1.2
0.7
0.2
—
Subtotal
69.7
68.9
16.4
16.5
ExxonMobil’s share of equity company expenses (non-GAAP)
9.1
10.5
2.7
2.4
Total Adjusted Operating Costs (non-GAAP)
78.8
79.4
19.1
18.9
Total Adjusted Operating Costs (non-GAAP)
78.8
79.4
19.1
18.9
Less:
Depreciation and depletion (includes impairments)
19.0
20.6
4.2
4.8
Non-service pension and postretirement benefit expense
1.2
0.7
0.2
—
Other adjustments (includes equity company depreciation and depletion)
3.6
3.7
0.8
0.9
Total Cash Operating Expenses (Cash Opex) (non-GAAP)
55.0
54.4
13.9
13.2
Energy and production taxes (non-GAAP)
11.0
14.9
4.3
3.4
Total Cash Operating Expenses (Cash Opex) excluding Energy and Production Taxes (non-GAAP)
44.0
39.5
9.6
9.8
Change vs 2019
Change vs 2023
Estimated Cumulative vs 2019
Total Cash Operating Expenses (Cash Opex) excluding Energy and Production Taxes (non-GAAP)
-4.5
+0.2
Market
+3.6
+0.1
Activity/Other
+1.6
+0.5
Structural Cost Savings
-9.7
-0.4
-10.1
Due to rounding, numbers presented may not add up precisely to the totals indicated.
19
REVIEW OF FIRST QUARTER 2024 RESULTS
ExxonMobil’s first-quarter 2024 earnings were $8.2 billion, or $2.06 per share assuming dilution, compared with earnings of $11.4 billion a year earlier. The decrease in earnings was mainly driven by declining industry refining margins and lower natural gas prices. Capital and exploration expenditures were $5.8 billion, down $0.5 billion from first quarter 2023.
(1) Refer to page 18 for definition of Identified Items and earnings (loss) excluding Identified Items.
20
Upstream First Quarter Earnings Factor Analysis
(millions of dollars)
Price– Price impacts decreased earnings by $820 million, driven by a 32% decrease in natural gas realizations, partially offset by a 4% increase in liquids realizations.
Advantaged Volume Growth – Higher volumes from advantaged assets increased earnings by $430 million, mainly driven by Guyana liquids growth.
Base Volume – Lower base volumes decreased earnings by $400 million, mainly driven by divestments, government-mandated curtailments, and unfavorable entitlement effects.
Structural Cost Savings – Increased earnings by $90 million.
Expenses – Higher expenses, primarily from depreciation, decreased earnings by $160 million.
Other – Other items decreased earnings by $470 million, reflecting other primarily non-cash impacts from tax and inventory adjustments as well as divestments.
Timing Effects – Less unfavorable timing effects from derivatives mark-to-market impacts increased earnings by $370 million.
Identified Items (1) –1Q2023 $(158) million loss driven by additional European taxes.
(1) Refer to page 18 for definition of Identified Items and earnings (loss) excluding Identified Items.
21
Upstream Operational Results
Three Months Ended March 31,
2024
2023
Net production of crude oil, natural gas liquids, bitumen and synthetic oil
(thousands of barrels daily)
United States
816
820
Canada/Other Americas
772
670
Europe
4
4
Africa
224
220
Asia
711
749
Australia/Oceania
30
32
Worldwide
2,557
2,495
Net natural gas production available for sale
(millions of cubic feet daily)
United States
2,241
2,367
Canada/Other Americas
94
94
Europe
377
548
Africa
150
134
Asia
3,274
3,597
Australia/Oceania
1,226
1,276
Worldwide
7,362
8,016
Oil-equivalent production (1)
(thousands of oil-equivalent barrels daily)
3,784
3,831
(1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.
(1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.
1Q 2024
versus
1Q 2023
1Q 2024 production of 3.8 million oil-equivalent barrels per day decreased 47 thousand oil-equivalent barrels per day from 1Q 2023. Excluding the impacts from entitlements, divestments, and higher government-mandated curtailments, net production grew by 77 thousand oil-equivalent barrels per day, mainly driven by Guyana.
Listed below are descriptions of ExxonMobil’s volumes reconciliation factors which are provided to facilitate understanding of the terms.
Entitlements - Net Interest are changes to ExxonMobil’s share of production volumes caused by non-operational changes to volume-determining factors. These factors consist of net interest changes specified in Production Sharing Contracts (PSCs), which typically occur when cumulative investment returns or production volumes achieve defined thresholds, changes in equity upon achieving pay-out in partner investment carry situations, equity redeterminations as specified in venture agreements, or as a result of the termination or expiry of a concession. Once a net interest change has occurred, it typically will not be reversed by subsequent events, such as lower crude oil prices.
Entitlements - Price, Spend and Other are changes to ExxonMobil’s share of production volumes resulting from temporary changes to non-operational volume-determining factors. These factors include changes in oil and gas prices or spending levels from one period to another. According to the terms of contractual arrangements or government royalty regimes, price or spending variability can increase or decrease royalty burdens and/or volumes attributable to ExxonMobil. For example, at higher prices, fewer barrels are required for ExxonMobil to recover its costs. These effects generally vary from period to period with field spending patterns or market prices for oil and natural gas. Such factors can also include other temporary changes in net interest as dictated by specific provisions in production agreements.
Government Mandates are changes to ExxonMobil's sustainable production levels as a result of production limits or sanctions imposed by governments.
Divestments are reductions in ExxonMobil’s production arising from commercial arrangements to fully or partially reduce equity in a field or asset in exchange for financial or other economic consideration.
Growth and Other comprise all other operational and non-operational factors not covered by the above definitions that may affect volumes attributable to ExxonMobil. Such factors include, but are not limited to, production enhancements from project and work program activities, acquisitions including additions from asset exchanges, downtime, market demand, natural field decline, and any fiscal or commercial terms that do not affect entitlements.
(1) Refer to page 18 for definition of Identified Items and earnings (loss) excluding Identified Items.
Chemical Products First Quarter Earnings Factor Analysis
(millions of dollars)
Margin– Increased North America feed advantage from lower natural gas prices and higher margins from performance chemicals realizations, more than offset industry margin decline, increasing earnings by $200 million.
(1) Refer to page 18 for definition of Identified Items and earnings (loss) excluding Identified Items.
Corporate and Financing expenses were $362 million for the first quarter of 2024, $7 million higher than the first quarter of 2023.
28
LIQUIDITY AND CAPITAL RESOURCES
(millions of dollars)
Three Months Ended March 31,
2024
2023
Net cash provided by/(used in)
Operating activities
14,664
16,341
Investing activities
(4,577)
(4,925)
Financing activities
(7,982)
(8,507)
Effect of exchange rate changes
(324)
102
Increase/(decrease) in cash and cash equivalents
1,781
3,011
Cash and cash equivalents (at end of period)
33,349
32,676
Cash flow from operations and asset sales
Net cash provided by operating activities (U.S. GAAP)
14,664
16,341
Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments
703
854
Cash flow from operations and asset sales (Non-GAAP)
15,367
17,195
Because of the ongoing nature of our asset management and divestment program, we believe it is useful for investors to consider proceeds associated with asset sales together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions.
Cash flow from operations and asset sales in the first quarter of 2024 was $15.4 billion, a decrease of $1.8 billion from the comparable 2023 period primarily reflectinglowerearnings.
Cash provided by operating activities totaled $14.7 billion for the first three months of 2024, $1.7 billion lower than 2023. Net income including noncontrolling interests was $8.6 billion, a decrease of $3.3 billion from the prior year period. The adjustment for the noncash provision of $4.8 billion for depreciation and depletion was up $0.6 billion from 2023. Changes in operational working capital were a contribution of $2.0 billion during the period. All other items net decreased cash flows by $0.7 billion in 2024 versus a contribution of $0.6 billion in 2023. See the Condensed Consolidated Statement of Cash Flows for additional details.
Investing activities for the first three months of 2024 used net cash of $4.6 billion, a decrease of $0.3 billion compared to the prior year. Spending for additions to property, plant and equipment of $5.1 billion was $0.3 billion lower than 2023. Proceeds from asset sales were $0.7 billion, a decrease of $0.2 billion compared to the prior year. Net investments and advances decreased $0.2 billion from $0.4 billion in 2023.
Net cash used in financing activities was $8.0 billion in the first three months of 2024, including $3.0 billion for the purchase of 27.5 million shares of ExxonMobil stock, as part of the previously announced buyback program. This compares to net cash used in financing activities of $8.5 billion in the prior year. Total debt at the end of the first quarter of 2024 was $40.4 billion compared to $41.6 billion at year-end 2023. The Corporation's debt to total capital ratio was 16.0 percent at the end of the first quarter of 2024 compared to 16.4 percent at year-end 2023. The net debt to capital ratio was 3.2 percent at the end of the first quarter, a decrease of 1.3 percentage points from year-end 2023. The Corporation's capital allocation priorities are investing in competitively advantaged, high-return projects; maintaining a strong balance sheet; and sharing our success with our shareholders through more consistent share repurchases and a growing dividend. The Corporation distributed a total of $3.8 billion to shareholders in the first three months of 2024 through dividends.
The Corporation has access to significant capacity of long-term and short-term liquidity. Internally generated funds are expected to cover the majority of financial requirements, supplemented by long-term and short-term debt. The Corporation had undrawn short-term committed lines of credit of $0.3 billion and undrawn long-term committed lines of credit of $1.9 billion as of first quarter 2024.
The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses. Additionally, the Corporation continues to evaluate opportunities to enhance its business portfolio through acquisitions of assets or companies, and enters into such transactions from time to time. Key criteria for evaluating acquisitions include strategic fit, cost synergies, potential for future growth, low cost of supply, and attractive valuations. Acquisitions may be made with cash, shares of the Corporation’s common stock, or both.
Litigation and other contingencies are discussed in Note 3 to the unaudited condensed consolidated financial statements.
29
Contractual Obligations
The Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. Through the first quarter of 2024, the Corporation entered into two long-term purchase agreements with an estimated total obligation of approximately $3.0 billion.
TAXES
(millions of dollars)
Three Months Ended March 31,
2024
2023
Income taxes
3,803
4,960
Effective income tax rate
36
%
34
%
Total other taxes and duties (1)
7,160
8,095
Total
10,963
13,055
(1) Includes “Other taxes and duties” plus taxes that are included in “Production and manufacturing expenses” and “Selling, general and administrative expenses”.
Total taxes were $11.0 billion for the first quarter of 2024, a decrease of $2.1 billion from 2023. Income tax expense was $3.8 billion compared to $5.0 billion in the prior year. The effective income tax rate, which is calculated based on consolidated company income taxes and Exxonmobil's share of equity company income taxes, was 36 percent. This increased from the 34 percent rate in the prior year period due primarily to a change in mix of results in jurisdictions with varying tax rates. Total other taxes and duties decreased by $0.9 billion to $7.2 billion.
CAPITAL AND EXPLORATION EXPENDITURES
(millions of dollars)
Three Months Ended March 31,
2024
2023
Upstream (including exploration expenses)
4,582
4,581
Energy Products
527
685
Chemical Products
433
831
Specialty Products
76
91
Other
221
192
Total
5,839
6,380
Capital and exploration expenditures in the first quarter of 2024 were $5.8 billion, down 8% from the first quarter of 2023. The Corporation plans to invest in the range of $23 billion to $25 billion in 2024. Actual spending could vary depending on the progress of individual projects and property acquisitions.
30
FORWARD-LOOKING STATEMENTS
Statements related to future events; projections; descriptions of strategic, operating, and financial plans and objectives; statements of future ambitions and plans; and other statements of future events or conditions, are forward-looking statements. Similarly, discussion of roadmaps or future plans related to carbon capture, transportation and storage, biofuel, hydrogen, direct air capture, and other future plans to reduce emissions and emission intensity of ExxonMobil, its affiliates, companies it is seeking to acquire and third parties are dependent on future market factors, such as continued technological progress, policy support and timely rule-making and permitting, and represent forward-looking statements.
Actual future results, including financial and operating performance; potential earnings, cash flow, dividends or shareholder returns, including the timing and amounts of share repurchases; total capital expenditures and mix, including allocations of capital to low carbon investments; realization and maintenance of structural cost reductions and efficiency gains, including the ability to offset inflationary pressure; plans to reduce future emissions and emissions intensity, including ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050, to reach Scope 1 and 2 net zero in Upstream Permian Basin unconventional operated assets by 2030 and in Pioneer assets by 2035, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, and to reach near-zero methane emissions from operated assets and other methane initiatives; meeting ExxonMobil’s divestment and start-up plans, and associated project plans as well as technology advances, including the timing and outcome of projects to capture, transport and store CO2, produce hydrogen, produce biofuels, produce lithium, create new advanced carbon materials, and use plastic waste as a feedstock for advanced recycling; timely granting of governmental permits and certifications; future debt levels and credit ratings; business and project plans, timing, costs, capacities and profitability; resource recoveries and production rates; and planned Denbury and Pioneer integrated benefits could differ materially due to a number of factors.
These include global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market factors, economic conditions, and seasonal fluctuations that impact prices and differentials for our products; changes in law, regulations, taxes, trade sanctions, or policies, such as government policies supporting lower carbon and new market investment opportunities such as the U.S. Inflation Reduction Act and the ability for projects to qualify for the financial incentives available thereunder, the punitive European taxes on the oil and gas sector and unequal support for different technological methods of emissions reduction or evolving, ambiguous and unharmonized standards imposed by various jurisdictions related to sustainability and GHG reporting; variable impacts of trading activities on our margins and results each quarter; actions of competitors and commercial counterparties; the outcome of commercial negotiations, including final agreed terms and conditions; the ability to access debt markets on favorable terms or at all; the occurrence, pace, rate of recovery and effects of public health crises, including the response from governments; reservoir performance, including variability and timing factors applicable to unconventional resources; the level and outcome of exploration projects and decisions to invest in future reserves; timely completion of development and other construction projects; final management approval of future projects and any changes in the scope, terms, costs or assumptions of such projects as approved; the actions of government or other actors against our core business activities and acquisitions, divestitures or financing opportunities; war, civil unrest, attacks against the company or industry, and other geopolitical or security disturbances, including disruption of land or sea transportation routes; expropriations, seizure, or capacity, insurance, shipping or export limitations imposed by governments or laws; opportunities for potential acquisitions, investments or divestments and satisfaction of applicable conditions to closing, including timely regulatory approvals; the capture of efficiencies within and between business lines and the ability to maintain near-term cost reductions as ongoing efficiencies; unforeseen technical or operating difficulties and unplanned maintenance; the development and competitiveness of alternative energy and emission reduction technologies; the results of research programs and the ability to bring new technologies to commercial scale on a cost-competitive basis; and other factors discussed under "Item 1A. Risk Factors" of ExxonMobil’s 2023 Form 10-K.
Forward-looking and other statements regarding environmental and other sustainability efforts and aspirations are not an indication that these statements are material to investors or require disclosure in our filing with the SEC. In addition, historical, current, and forward-looking environmental and other sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future, including future rule-making.
Energy demand models are forward-looking by nature and aim to replicate system dynamics of the global energy system, requiring simplifications. The reference to any scenario in this report, including any potential net-zero scenarios, does not imply ExxonMobil views any particular scenario as likely to occur. In addition, energy demand scenarios require assumptions on a variety of parameters. As such, the outcome of any given scenario using an energy demand model comes with a high degree of uncertainty. Third-party scenarios discussed in this report reflect the modeling assumptions and outputs of their respective authors, not ExxonMobil, and their use by ExxonMobil is not an endorsement by ExxonMobil of their underlying assumptions, likelihood or probability. Investment decisions are made on the basis of ExxonMobil’s separate planning process. Any use of the modeling of a third-party organization within this report does not constitute or imply an endorsement by ExxonMobil of any or all of the positions or activities of such organization.
31
Actions needed to advance ExxonMobil’s 2030 greenhouse gas emission-reductions plans are incorporated into its medium-term business plans, which are updated annually. The reference case for planning beyond 2030 is based on ExxonMobil’s Global Outlook (Outlook) research and publication. The Outlook is reflective of the existing global policy environment and an assumption of increasing policy stringency and technology improvement to 2050. However, the Outlook does not attempt to project the degree of required future policy and technology advancement and deployment for the world, or ExxonMobil, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and ExxonMobil’s business plans will be updated accordingly. References to projects or opportunities may not reflect investment decisions made by ExxonMobil or its affiliates. Individual projects or opportunities may advance based on a number of factors, including availability of supportive policy, permitting, technological advancement for cost-effective abatement, insights from the company planning process, and alignment with our partners and other stakeholders. Capital investment guidance in lower-emission investments is based on our corporate plan; however, actual investment levels will be subject to the availability of the opportunity set, public policy support, and focused on returns.
The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.
32
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information about market risks for the three months ended March 31, 2024, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2023.
ITEM 4. CONTROLS AND PROCEDURES
As indicated in the certifications in Exhibit 31 of this report, the Corporation’s Chief Executive Officer, Chief Financial Officer and Principal Accounting Officer have evaluated the Corporation’s disclosure controls and procedures as of March 31, 2024. Based on that evaluation, these officers have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. There were no changes during the Corporation’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
33
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ExxonMobil has elected to use a $1 million threshold for disclosing environmental proceedings.
Refer to the relevant portions of Note 3 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
As reported in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022, on August 4, 2022, XTO Energy, Inc. (“XTO”) received a letter from the Department of Justice (“DOJ”) notifying XTO of the United States Environmental Protection Agency’s (“EPA”) request to initiate a potential civil action against XTO regarding the Schnegg well in Powhatan Point, Ohio. The EPA alleged XTO breached its duty under the General Duty Clause of the Clean Air Act for the Schnegg well, and such breaches resulted in the 2018 well blowout. Neither a civil action has been filed nor a draft consent decree has been provided by the DOJ. In January 2024, the DOJ demanded $25 million to settle the alleged violations. XTO strongly disagrees with the DOJ’s position.
As reported in the Corporation’s Annual Report on Form 10-K for the year ended December 31, 2022, the State of Texas, acting by and through its Attorney General (“State”), filed a complaint against the Corporation (captioned State of Texas v. Exxon Mobil Corporation) in Travis County District Court, TX, Cause No. D-1-GN-22-006534, for alleged violations of the Texas Clean Air Act at the Baytown Olefins Plant located in Baytown, Texas seeking civil penalties in excess of $1 million, injunctive relief, and recovery of its fees and costs of litigation. In March 2024, the State of Texas and the Corporation agreed to settle the alleged violations upon payment of $2.2 million to the State of Texas (the “Proposed Settlement”). Once the Proposed Settlement is published in the Federal Register, it will be open to public comment for 30 days before the District Court may approve it.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities for Quarter Ended March 31, 2024
Total Number
of Shares
Purchased (1)
Average
Price Paid
per Share (2)
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the
Program
(Billions of dollars) (4)
January 2024
2,729,980
$102.69
2,704,895
$17.2
February 2024
11,040,594
$103.55
11,040,594
$16.1
March 2024
13,797,147
$110.48
13,797,137
$14.6
Total
27,567,721
$106.94
27,542,626
(1) Includes shares withheld from participants in the company's incentive program for personal income taxes.
(2) Excludes 1% U.S. excise tax on stock repurchases.
(3) Purchases were made under terms intended to qualify for exemption under Rules 10b-18 and 10b5-1. As required by securities law restrictions, no repurchases take place during proxy solicitation and voting periods for transactions involving the issuance of ExxonMobil shares. For the Pioneer transaction, this period occurred during the first quarter of 2024.
(4) In its 2022 Corporate Plan Update released December 8, 2022, the Corporation stated that the company expanded its share repurchase program to up to $50 billion through 2024, including $15 billion of repurchases in 2022 and $17.5 billion in 2023. In its 2023 Corporate Plan Update released December 6, 2023, the Corporation stated that after the Pioneer transaction closes, the go-forward share repurchase program pace is expected to increase to $20 billion annually through 2025, assuming reasonable market conditions.
During the first quarter, the Corporation did not issue or sell any unregistered equity securities.
ITEM 5. OTHER INFORMATION
During the three months ended March 31, 2024, none of the Company’s directors or officers adopted or terminated a “Rule 10b5-1 trading arrangement” or “non-Rule 10b5-1 trading arrangement,” as each term is defined in Item 408(a) of Regulation S-K.
Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer.
101
Interactive Data Files (formatted as Inline XBRL).
104
Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
35
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
