☑QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 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
0.524% 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 June 30, 2024
Common stock, without par value
4,442,826,580
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2024
TABLE OF CONTENTS
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
Condensed Consolidated Statement of Income - Three and six months ended June 30, 2024 and 2023
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs
17
7
26
13
Total other comprehensive income (loss)
(69)
538
(1,369)
736
Comprehensive income (loss) including noncontrolling interests
9,502
8,691
16,768
20,732
Comprehensive income (loss) attributable to noncontrolling interests
280
373
506
809
Comprehensive income (loss) attributable to ExxonMobil
9,222
8,318
16,262
19,923
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)
June 30, 2024
December 31, 2023
ASSETS
Current assets
Cash and cash equivalents
26,460
31,539
Cash and cash equivalents – restricted
28
29
Notes and accounts receivable – net
43,071
38,015
Inventories
Crude oil, products and merchandise
19,685
20,528
Materials and supplies
4,818
4,592
Other current assets
2,176
1,906
Total current assets
96,238
96,609
Investments, advances and long-term receivables
47,948
47,630
Property, plant and equipment – net
298,283
214,940
Other assets, including intangibles – net
18,238
17,138
Total Assets
460,707
376,317
LIABILITIES
Current liabilities
Notes and loans payable
6,621
4,090
Accounts payable and accrued liabilities
60,107
58,037
Income taxes payable
4,035
3,189
Total current liabilities
70,763
65,316
Long-term debt
36,565
37,483
Postretirement benefits reserves
10,398
10,496
Deferred income tax liabilities
40,080
24,452
Long-term obligations to equity companies
1,612
1,804
Other long-term obligations
25,023
24,228
Total Liabilities
184,441
163,779
Commitments and contingencies (Note 3)
EQUITY
Common stock without par value
(9,000 million shares authorized, 8,019 million shares issued)
46,781
17,781
Earnings reinvested
463,294
453,927
Accumulated other comprehensive income
(13,187)
(11,989)
Common stock held in treasury
(3,576 million shares at June 30, 2024 and
4,048 million shares at December 31, 2023)
(228,483)
(254,917)
ExxonMobil share of equity
268,405
204,802
Noncontrolling interests
7,861
7,736
Total Equity
276,266
212,538
Total Liabilities and Equity
460,707
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)
Six Months Ended June 30,
2024
2023
CASH FLOWS FROM OPERATING ACTIVITIES
Net income (loss) including noncontrolling interests
18,137
19,996
Depreciation and depletion (includes impairments)
10,599
8,486
Changes in operational working capital, excluding cash and debt
(2,608)
(3,885)
All other items – net
(904)
1,127
Net cash provided by operating activities
25,224
25,724
CASH FLOWS FROM INVESTING ACTIVITIES
Additions to property, plant and equipment
(11,309)
(10,771)
Proceeds from asset sales and returns of investments
1,629
2,141
Additional investments and advances
(744)
(834)
Other investing activities including collection of advances
224
183
Cash acquired from mergers and acquisitions
754
0
Net cash used in investing activities
(9,446)
(9,281)
CASH FLOWS FROM FINANCING ACTIVITIES
Additions to long-term debt
217
136
Reductions in long-term debt
(1,142)
(6)
Reductions in short-term debt
(2,771)
(172)
Additions/(reductions) in debt with three months or less maturity
(6)
(172)
Contingent consideration payments
(27)
(68)
Cash dividends to ExxonMobil shareholders
(8,093)
(7,439)
Cash dividends to noncontrolling interests
(397)
(293)
Changes in noncontrolling interests
16
11
Common stock acquired
(8,337)
(8,680)
Net cash used in financing activities
(20,540)
(16,683)
Effects of exchange rate changes on cash
(318)
132
Increase/(decrease) in cash and cash equivalents
(5,080)
(108)
Cash and cash equivalents at beginning of period
31,568
29,665
Cash and cash equivalents at end of period
26,488
29,557
SUPPLEMENTAL DISCLOSURES
Income taxes paid
6,968
8,841
Cash interest paid
Included in cash flows from operating activities
321
295
Capitalized, included in cash flows from investing activities
590
561
Total cash interest paid
911
856
Noncash right of use assets recorded in exchange for lease liabilities
Operating leases
647
1,036
Finance leases
53
438
Non-Cash Transaction: The Corporation acquired Pioneer Natural Resources in an all-stock transaction on May 3, 2024, having issued 545 million shares of ExxonMobil common stock having a fair value of $63 billion and assumed debt with a fair value of $5 billion. See Note 2 for additional information.
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
6
CONDENSED CONSOLIDATED STATEMENT OF CHANGES 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 March 31, 2023
15,904
440,552
(13,095)
(244,676)
198,685
7,729
206,414
Amortization of stock-based awards
130
—
—
—
130
—
130
Other
(5)
—
—
—
(5)
27
22
Net income (loss) for the period
—
7,880
—
—
7,880
273
8,153
Dividends - common shares
—
(3,701)
—
—
(3,701)
(178)
(3,879)
Other comprehensive income (loss)
—
—
438
—
438
100
538
Share repurchases, at cost
—
—
—
(4,383)
(4,383)
—
(4,383)
Dispositions
—
—
—
2
2
—
2
Balance as of June 30, 2023
16,029
444,731
(12,657)
(249,057)
199,046
7,951
206,997
Balance as of March 31, 2024
17,971
458,339
(13,169)
(257,891)
205,250
7,802
213,052
Amortization of stock-based awards
178
—
—
—
178
—
178
Other
(117)
—
—
—
(117)
10
(107)
Net income (loss) for the period
—
9,240
—
—
9,240
331
9,571
Dividends - common shares
—
(4,285)
—
—
(4,285)
(231)
(4,516)
Other comprehensive income (loss)
—
—
(18)
—
(18)
(51)
(69)
Share repurchases, at cost
—
—
—
(5,310)
(5,310)
—
(5,310)
Issued for acquisitions
28,749
—
—
34,603
63,352
—
63,352
Dispositions
—
—
—
115
115
—
115
Balance as of June 30, 2024
46,781
463,294
(13,187)
(228,483)
268,405
7,861
276,266
Three Months Ended June 30, 2024
Three Months Ended June 30, 2023
Common Stock Share Activity
(millions of shares)
Issued
Held in Treasury
Outstanding
Issued
Held in Treasury
Outstanding
Balance as of March 31
8,019
(4,076)
3,943
8,019
(3,976)
4,043
Share repurchases, at cost
—
(45)
(45)
—
(40)
(40)
Issued for acquisitions
—
545
545
—
—
—
Dispositions
—
—
—
—
—
—
Balance as of June 30
8,019
(3,576)
4,443
8,019
(4,016)
4,003
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
7
CONDENSED CONSOLIDATED STATEMENT OF CHANGES 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
288
—
—
—
288
—
288
Other
(11)
—
—
—
(11)
11
—
Net income (loss) for the period
—
19,310
—
—
19,310
686
19,996
Dividends - common shares
—
(7,439)
—
—
(7,439)
(293)
(7,732)
Other comprehensive income (loss)
—
—
613
—
613
123
736
Share repurchases, at cost
—
—
—
(8,768)
(8,768)
—
(8,768)
Dispositions
—
—
—
4
4
—
4
Balance as of June 30, 2023
16,029
444,731
(12,657)
(249,057)
199,046
7,951
206,997
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
375
—
—
—
375
—
375
Other
(124)
—
—
—
(124)
16
(108)
Net income (loss) for the period
—
17,460
—
—
17,460
677
18,137
Dividends - common shares
—
(8,093)
—
—
(8,093)
(397)
(8,490)
Other comprehensive income (loss)
—
—
(1,198)
—
(1,198)
(171)
(1,369)
Share repurchases, at cost
—
—
—
(8,288)
(8,288)
—
(8,288)
Issued for acquisitions
28,749
—
—
34,603
63,352
—
63,352
Dispositions
—
—
—
119
119
—
119
Balance as of June 30, 2024
46,781
463,294
(13,187)
(228,483)
268,405
7,861
276,266
Six Months Ended June 30, 2024
Six Months Ended June 30, 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
—
(73)
(73)
—
(79)
(79)
Issued for acquisitions
—
545
545
—
—
—
Dispositions
—
—
—
—
—
—
Balance as of June 30
8,019
(3,576)
4,443
8,019
(4,016)
4,003
The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.
8
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 May 3, 2024, the Corporation acquired Pioneer Natural Resources Company ("Pioneer"), an independent oil and gas exploration and production company. The acquisition included over 850 thousand net acres in the Midland Basin of West Texas and proved reserves in excess of 2 billion oil-equivalent barrels. In connection with the acquisition, we issued 545 million shares of ExxonMobil common stock having a fair value of $63 billion on the acquisition date, and assumed debt with a fair value of $5 billion.
The transaction was accounted for as a business combination in accordance with ASC 805, which requires that assets acquired and liabilities assumed be recognized at their fair values as of the acquisition date. The following table summarizes the provisional fair values of the assets acquired and liabilities assumed.
(billions of dollars)
Pioneer
Current assets (1)
3
Other non-current assets
1
Property, plant & equipment (2)
84
Total identifiable assets acquired
88
Current liabilities (1)
3
Long-term debt (3)
5
Deferred income tax liabilities (4)
16
Other non-current liabilities
2
Total liabilities assumed
26
Net identifiable assets acquired
62
Goodwill (5)
1
Net assets (6)
63
(1) Current assets and current liabilities consist primarily of accounts receivable and payable, with their respective fair values approximating historical values given their short-term duration, expectation of insignificant bad debt expense, and our credit rating.
(2) Property, plant and equipment was preliminarily valued using the income approach. Significant inputs and assumptions used in the income approach included estimates for commodity prices, future oil and gas production profiles, operating expenses, capital expenditures, and a risk-adjusted discount rate. Collectively, these inputs are Level 3 inputs.
(3) Long-term debt was valued using market prices as of the acquisition date, which reflects the use of Level 1 inputs.
(4) Deferred income taxes represent the tax effects of differences in the tax basis and acquisition date fair values of assets acquired and liabilities assumed.
(5) Goodwill was allocated to the Upstream segment.
(6) Provisional fair value measurements were made for assets acquired and liabilities assumed. Adjustments to those measurements may be made in subsequent periods, up to one year from the date of acquisition, as we continue to evaluate the information necessary to complete the analysis.
9
Debt Assumed in the Merger
The following table presents long-term debt assumed at closing:
(millions of dollars)
Par Value
Fair Value as of May 2, 2024
0.250% Convertible Senior Notes due May 2025 (1)
450
1,327
1.125% Senior Notes due January 2026
750
699
5.100% Senior Notes due March 2026
1,100
1,096
7.200% Senior Notes due January 2028
241
252
4.125% Senior Notes due February 2028
138
130
1.900% Senior Notes due August 2030
1,100
914
2.150% Senior Notes due January 2031
1,000
832
(1) In June 2024, the Corporation redeemed in full all of the Convertible Senior Notes assumed from Pioneer for an amount consistent with the acquisition date fair value.
Actual and Pro Forma Impact of Merger
The following table presents revenues and earnings for Pioneer since the acquisition date (May 3, 2024), for the periods presented:
(millions of dollars)
Three Months Ended June 30, 2024
Six Months Ended June 30, 2024
Sales and other operating revenues
4,372
4,372
Net income (loss) attributable to ExxonMobil
398
398
The following table presents unaudited pro forma information for the Corporation as if the merger with Pioneer had occurred at the beginning of January 1, 2023:
Unaudited
(millions of dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Sales and other operating revenues
92,167
86,076
178,557
175,425
Net income (loss) attributable to ExxonMobil
9,265
8,577
18,256
20,663
The historical financial information was adjusted to give effect to the pro forma events that were directly attributable to the merger and factually supportable. The unaudited pro forma consolidated results are not necessarily indicative of what the consolidated results of operations actually would have been had the merger been completed on January 1, 2023. In addition, the unaudited pro forma consolidated results reflect pro forma adjustments primarily related to conforming Pioneer's accounting policies to ExxonMobil, additional depreciation expense related to the fair value adjustment of the acquired property, plant and equipment, our capital structure, Pioneer's transaction-related costs, and applicable income tax impacts of the pro forma adjustments.
Our transaction costs to effect the acquisition were immaterial.
10
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 June 30, 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.
June 30, 2024
(millions of dollars)
Equity Company
Obligations(1)
Other Third-Party Obligations
Total
Guarantees
Debt-related
1,070
135
1,205
Other
678
5,896
6,574
Total
1,748
6,031
7,779
(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)
570
35
605
Amounts reclassified from accumulated other comprehensive income
—
8
8
Total change in accumulated other comprehensive income
570
43
613
Balance as of June 30, 2023
(14,021)
1,364
(12,657)
Balance as of December 31, 2023
(13,056)
1,067
(11,989)
Current period change excluding amounts reclassified from accumulated other comprehensive income (1)
(1,197)
(21)
(1,218)
Amounts reclassified from accumulated other comprehensive income
—
20
20
Total change in accumulated other comprehensive income
(1,197)
(1)
(1,198)
Balance as of June 30, 2024
(14,253)
1,066
(13,187)
(1) Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $123 million and $(70) million in 2024 and 2023, respectively.
Amounts Reclassified Out of Accumulated Other
Comprehensive Income - Before-tax Income/(Expense)
(millions of dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
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
(5)
1
(8)
(1)
Total
54
106
(20)
163
12
Note 5. Earnings Per Share
Earnings per common share
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Net income (loss) attributable to ExxonMobil (millions of dollars)
9,240
7,880
17,460
19,310
Weighted-average number of common shares outstanding (millions of shares)(1)
4,317
4,066
4,158
4,084
Earnings (loss) per common share (dollars)(2)
2.14
1.94
4.20
4.73
Dividends paid per common share (dollars)
0.95
0.91
1.90
1.82
(1) Includes restricted shares not vested as well as 545 million shares issued for the Pioneer merger on May 3, 2024.
(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 June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Components of net benefit cost
Pension Benefits - U.S.
Service cost
117
122
230
242
Interest cost
168
165
336
331
Expected return on plan assets
(181)
(133)
(362)
(266)
Amortization of actuarial loss/(gain)
21
21
42
42
Amortization of prior service cost
(8)
(7)
(16)
(14)
Net pension enhancement and curtailment/settlement cost
14
7
17
15
Net benefit cost
131
175
247
350
Pension Benefits - Non-U.S.
Service cost
86
81
169
163
Interest cost
198
232
425
466
Expected return on plan assets
(230)
(172)
(491)
(346)
Amortization of actuarial loss/(gain)
24
14
49
28
Amortization of prior service cost
12
13
25
25
Net benefit cost
90
168
177
336
Other Postretirement Benefits
Service cost
19
20
37
40
Interest cost
62
69
125
139
Expected return on plan assets
(5)
(3)
(10)
(7)
Amortization of actuarial loss/(gain)
(26)
(31)
(52)
(61)
Amortization of prior service cost
(15)
(11)
(31)
(21)
Net benefit cost
35
44
69
90
13
Note 7. Financial Instruments and Derivatives
The estimated fair value of financial instruments and derivatives at June 30, 2024 and December 31, 2023, and the related hierarchy level for the fair value measurement was as follows:
June 30, 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)
4,790
1,187
—
5,977
(5,510)
(24)
—
443
Advances to/receivables from equity companies (2)(6)
—
2,475
4,206
6,681
—
—
476
7,157
Other long-term financial assets (3)
1,400
—
1,515
2,915
—
—
237
3,152
Liabilities
Derivative liabilities(4)
4,996
1,457
—
6,453
(5,510)
(230)
—
713
Long-term debt(5)
28,874
1,469
—
30,343
—
—
4,063
34,406
Long-term obligations to equity companies(6)
—
—
1,680
1,680
—
—
(68)
1,612
Other long-term financial liabilities(7)
—
—
516
516
—
—
49
565
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.
14
At June 30, 2024 and December 31, 2023, respectively, the Corporation had $675 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.
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 June 30, 2024, the Corporation has designated $3.2 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 $237 million and undrawn long-term committed lines of credit of $1,795 million as of second 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 June 30, 2024 and December 31, 2023, or results of operations for the periods ended June 30, 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 June 30, 2024 and December 31, 2023, was as follows:
(millions)
June 30, 2024
December 31, 2023
Crude oil (barrels)
6
(7)
Petroleum products (barrels)
(44)
(43)
Natural gas (MMBTUs)
(568)
(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 June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Sales and other operating revenue
(103)
332
(895)
983
Crude oil and product purchases
(5)
5
(2)
(20)
Total
(108)
337
(897)
963
15
Note 8. Disclosures about Segments and Related Information
(millions of dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Earnings (Loss) After Income Tax
Upstream
United States
2,430
920
3,484
2,552
Non-U.S.
4,644
3,657
9,250
8,482
Energy Products
United States
450
1,528
1,286
3,438
Non-U.S.
496
782
1,036
3,055
Chemical Products
United States
526
486
1,030
810
Non-U.S.
253
342
534
389
Specialty Products
United States
447
373
851
824
Non-U.S.
304
298
661
621
Corporate and Financing
(310)
(506)
(672)
(861)
Corporate total
9,240
7,880
17,460
19,310
Sales and Other Operating Revenue
Upstream
United States
6,729
1,673
8,919
4,443
Non-U.S.
3,317
3,739
6,843
9,126
Energy Products
United States
26,415
26,128
51,218
51,052
Non-U.S.
43,014
38,945
82,423
78,921
Chemical Products
United States
2,213
1,992
4,407
4,021
Non-U.S.
3,620
3,678
7,266
7,370
Specialty Products
United States
1,538
1,542
3,007
3,110
Non-U.S.
3,115
3,095
6,265
6,384
Corporate and Financing
25
3
49
12
Corporate total
89,986
80,795
170,397
164,439
Intersegment Revenue
Upstream
United States
5,545
5,044
11,533
10,000
Non-U.S.
11,043
8,412
21,023
17,811
Energy Products
United States
6,537
5,074
13,095
10,525
Non-U.S.
6,395
6,988
13,147
13,957
Chemical Products
United States
1,950
2,084
3,815
3,872
Non-U.S.
998
977
2,023
1,754
Specialty Products
United States
634
684
1,289
1,364
Non-U.S.
151
169
315
268
Corporate and Financing
71
64
150
128
16
Geographic Sales and Other Operating Revenue
(millions of dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
United States
36,895
31,335
67,551
62,626
Non-U.S.
53,091
49,460
102,846
101,813
Total
89,986
80,795
170,397
164,439
Significant Non-U.S. revenue sources include: (1)
Canada
8,126
6,825
15,182
13,546
United Kingdom
5,036
5,242
10,196
12,253
Singapore
3,985
3,758
8,003
7,489
France
3,512
3,494
6,985
6,978
Australia
2,450
2,392
4,875
4,820
Germany
2,448
2,256
4,795
4,549
Belgium
2,302
2,410
4,709
5,059
(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 June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Revenue from contracts with customers
64,181
63,322
122,600
127,626
Revenue outside the scope of ASC 606
25,805
17,473
47,797
36,813
Total
89,986
80,795
170,397
164,439
17
Note 9. Divestment Activities
Through June 30, 2024, the Corporation realized proceeds of approximately $1.6 billion and net after-tax earnings of $0.4 billion from its divestment activities. This included the sale of the Santa Ynez Unit and associated facilities in California, certain conventional and unconventional assets in the United States, 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. In June 2024, the court order was lifted and arbitration suspended. The closing date and any loss on sale will depend on resolution of the conditions precedent and government approvals.
18
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Overview
Second quarter crude prices were essentially unchanged versus the first quarter, near the middle of the 10-year historical range (2010-2019), as the market remains relatively balanced. Natural gas prices declined due to lower demand from milder weather, though remained toward the middle of the 10-year range. Industry refining margins declined from the top of the 10-year range to the lower half of the range, as increased supply more than met record global demand in the second quarter. Chemical margins showed a slight improvement compared to the first quarter of 2024, although margins remained at bottom-of-cycle conditions and well below the 10-year range, as capacity additions outpaced demand growth.
Recent Mergers and Acquisitions
On May 3, 2024, ExxonMobil acquired Pioneer Natural Resources Company (Pioneer), an independent oil and gas exploration and production company. See "Note 2. Pioneer Natural Resources Merger" of the Condensed Consolidated Financial Statements for additional information.
Selected Earnings Factor Definitions
The updated earnings factors introduced in the first quarter 2024 provide additional visibility into drivers of our business results. 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 (heritage Permian (1) and Pioneer), 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, ProxximaTM Venture, 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 21, 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).
(1)Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024.
19
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.
20
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 $10.7 billion, which included an additional $1.0 billion in the first six 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, mergers and acquisitions, new business venture development, and early-stage projects. 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,
Six Months Ended June 30,
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
18.3
18.9
Selling, general and administrative expenses
11.4
9.9
4.8
5.1
Depreciation and depletion (includes impairments)
19.0
20.6
8.5
10.6
Exploration expenses, including dry holes
1.3
0.8
0.3
0.3
Non-service pension and postretirement benefit expense
1.2
0.7
0.3
0.1
Subtotal
69.7
68.9
32.2
34.9
ExxonMobil’s share of equity company expenses (non-GAAP)
9.1
10.5
5.0
4.7
Total Adjusted Operating Costs (non-GAAP)
78.8
79.4
37.2
39.6
Total Adjusted Operating Costs (non-GAAP)
78.8
79.4
37.2
39.6
Less:
Depreciation and depletion (includes impairments)
19.0
20.6
8.5
10.6
Non-service pension and postretirement benefit expense
1.2
0.7
0.3
0.1
Other adjustments (includes equity company depreciation and depletion)
3.6
3.7
1.5
1.7
Total Cash Operating Expenses (Cash Opex) (non-GAAP)
55.0
54.4
26.9
27.2
Energy and production taxes (non-GAAP)
11.0
14.9
7.5
6.8
Total Cash Operating Expenses (Cash Opex) excluding Energy and Production Taxes (non-GAAP)
44.0
39.5
19.4
20.4
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
+1.0
Market
+3.6
+0.2
Activity/Other
+1.6
+1.8
Structural Cost Savings
-9.7
-1.0
-10.7
Due to rounding, numbers presented may not add up precisely to the totals indicated.
21
REVIEW OF SECOND QUARTER 2024 RESULTS
ExxonMobil’s second quarter 2024 earnings were $9.2 billion, or $2.14 per share assuming dilution, compared with earnings of $7.9 billion a year earlier. The increase in earnings was mainly driven by improved realizations and increased volumes for advantaged Upstream investments in the Permian and Guyana, partially offset by weaker industry refining margins and higher scheduled maintenance. Capital and exploration expenditures were $7.0 billion, up $0.9 billion from second quarter 2023.
Earnings for the first six months of 2024 were $17.5 billion, or $4.20 per diluted share, compared with $19.3 billion a year earlier. Capital and exploration expenditures were $12.9 billion, up $0.3 billion from the first six months of 2023. The Corporation distributed $8.1 billion in dividends to shareholders and repurchased $8.3 billion of common stock.
(1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items.
22
Upstream Second Quarter Earnings Factor Analysis
(millions of dollars)
Price– Price impacts increased earnings by $1,370 million, driven by an increase in liquids realizations, partly offset by a decrease in natural gas realizations.
Advantaged Volume Growth – Higher volumes from advantaged assets increased earnings by $1,250 million, driven by record production from Guyana, growth in heritage Permian (2), and the Pioneer acquisition.
Base Volume – Higher base volumes increased earnings by $30 million.
Structural Cost Savings – Increased earnings by $210 million.
Expenses – Higher expenses decreased earnings by $340 million, primarily from depreciation.
Other – All other items increased earnings by $130 million, driven by favorable impacts from divestments, partly offset by Pioneer-related transaction costs.
Timing Effects – Less favorable timing effects from derivatives mark-to-market impacts decreased earnings by $170 million.
Identified Items (1) –2Q2023 $(12) million loss driven by additional European taxes.
(1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items.
(2) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024.
23
Upstream Year-to-Date Earnings Factor Analysis
(millions of dollars)
Price– Price impacts increased earnings by $570 million, driven by an increase in average realizations for crude oil, partially offset by a decrease in average natural gas realizations.
Advantaged Volume Growth – Higher volumes from advantaged assets increased earnings by $1,680 million, driven by record production from Guyana, growth in heritage Permian (2), and the Pioneer acquisition.
Base Volume – Lower base volumes decreased earnings by $400 million, mainly driven by divestments and government-mandated curtailments.
Structural Cost Savings – Increased earnings by $320 million, due to operational efficiencies and divestments.
Expenses – Higher expenses decreased earnings by $510 million, primarily from depreciation.
Other – All other items, including costs related to the Pioneer transaction, decreased earnings by $340 million.
Timing Effects – Less unfavorable timing effects from derivatives mark-to-market impacts increased earnings by $210 million.
Identified Items (1) –2023 $(170) million loss driven by additional European taxes.
(1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items.
(2) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024.
24
Upstream Operational Results
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Net production of crude oil, natural gas liquids, bitumen and synthetic oil
(thousands of barrels daily)
United States
1,261
785
1,038
802
Canada/Other Americas
760
618
767
645
Europe
4
4
4
4
Africa
215
206
220
213
Asia
714
702
712
725
Australia/Oceania
30
38
30
35
Worldwide
2,984
2,353
2,771
2,424
Net natural gas production available for sale
(millions of cubic feet daily)
United States
2,900
2,346
2,570
2,357
Canada/Other Americas
114
97
104
94
Europe
331
375
354
461
Africa
167
86
158
110
Asia
3,486
3,350
3,380
3,473
Australia/Oceania
1,245
1,275
1,236
1,276
Worldwide
8,243
7,529
7,802
7,771
Oil-equivalent production (1)
(thousands of oil-equivalent barrels daily)
4,358
3,608
4,071
3,719
(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.
2Q 2024
versus
2Q 2023
2Q 2024 production of 4.4 million oil-equivalent barrels per day increased 750 thousand oil-equivalent barrels per day from 2Q 2023, driven by the Pioneer acquisition and record production in Guyana and heritage Permian (1).
YTD 2024
versus
YTD 2023
4.1 million oil-equivalent barrels per day in 2024 increased 352 thousand oil-equivalent barrels per day from 2023, driven by the Pioneer acquisition and record production in Guyana and heritage Permian (1).
(1) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024.
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.
Energy Products Second Quarter Earnings Factor Analysis
(millions of dollars)
Margin – Margins decreased earnings by $860 million, driven by weaker industry refining margins.
Advantaged Volume Growth – Higher volumes from strategic projects increased earnings by $20 million.
Base Volume – Lower base volumes decreased earnings by $500 million, driven by higher scheduled maintenance and divestments.
Structural Cost Savings– Increased earnings by $180 million.
Expenses– Higher expenses decreased earnings by $260 million from higher planned maintenance and turnaround activity.
Other – All other items decreased earnings by $20 million.
Timing Effects – Favorable timing effects from derivatives mark-to-market impacts increased earnings by $90 million.
Identified Items (1) – 2Q 2023 $18 million gain related to European taxes.
(1)Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items.
27
Energy Products Year-to-Date Earnings Factor Analysis
(millions of dollars)
Margins– Margins decreased earnings by $2,880 million, driven by significantly weaker industry refining margins, which normalized from the historically high levels in early 2023.
Advantaged Volume Growth – Higher volumes from the Beaumont refinery expansion increased earnings by $130 million.
Base Volume – Lower base volumes from divestments and higher scheduled maintenance decreased earnings by $650 million.
Structural Cost Savings– Increased earnings by $320 million due primarily to divestments and maintenance related efficiencies.
Expenses– Higher expenses decreased earnings by $550 million, driven by increased turnaround and higher planned maintenance activity.
Other – All other items increased earnings by $20 million.
Timing Effects – Unfavorable timing effects mainly from derivatives mark-to-market impacts decreased earnings by $570 million.
Identified Items (1) – 2023 $(12) million loss from additional European taxes.
(1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items.
28
Energy Products Operational Results
(thousands of barrels daily)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Refinery throughput
United States
1,746
1,944
1,823
1,794
Canada
387
388
397
403
Europe
987
1,209
970
1,199
Asia Pacific
446
463
424
514
Other
174
169
177
176
Worldwide
3,740
4,173
3,791
4,086
Energy Products sales(1)
United States
2,639
2,743
2,607
2,601
Non-U.S.
2,681
2,916
2,669
2,867
Worldwide
5,320
5,658
5,276
5,469
Gasoline, naphthas
2,243
2,401
2,210
2,290
Heating oils, kerosene, diesel
1,718
1,842
1,730
1,806
Aviation fuels
344
344
342
328
Heavy fuels
181
228
197
221
Other energy products
834
844
797
823
(1) Data reported net of purchases/sales contracts with the same counterparty.
Due to rounding, numbers presented may not add up precisely to the totals indicated.
Structural Cost Savings– Increased earnings by $40 million.
Expenses– Higher expenses, including increased project and maintenance costs, decreased earnings by $140 million.
Other – All other items decreased earnings by $40 million.
30
Chemical Products Year-to-Date Earnings Factor Analysis
(millions of dollars)
Margins– Despite weaker global industry margins, overall margins increased earnings by $100 million, driven by North American feed advantage, lower energy costs, and stronger high-value product margins.
Advantaged Volume Growth – Growth in high-value product sales increased earnings by $260 million.
Base Volume – Higher base volumes increased earnings by $120 million, driven by modest demand growth and lower turnaround impacts.
Structural Cost Savings– Increased earnings by $50 million, primarily from operational efficiencies.
Expenses– Higher growth projects spend and maintenance decreased earnings by $150 million.
Other – All other items decreased earnings by $20 million.
Chemical Products Operational Results
(thousands of metric tons)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Chemical Products sales (1)
United States
1,802
1,725
3,649
3,286
Non-U.S.
3,071
3,124
6,278
6,212
Worldwide
4,873
4,849
9,927
9,498
(1) Data reported net of purchases/sales contracts with the same counterparty.
(1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items.
Corporate and Financing expenses were $310 million for the second quarter of 2024, $196 million lower than the second quarter of 2023, mainly due to lower financing costs.
Corporate and Financing expenses were $672 million for the first six months of 2024, $189 million lower than 2023, mainlydue to lower financing costs, partially offset by Pioneer-related costs.
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LIQUIDITY AND CAPITAL RESOURCES
(millions of dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Net cash provided by/(used in)
Operating activities
25,224
25,724
Investing activities
(9,446)
(9,281)
Financing activities
(20,540)
(16,683)
Effect of exchange rate changes
(318)
132
Increase/(decrease) in cash and cash equivalents
(5,080)
(108)
Cash and cash equivalents (at end of period)
26,488
29,557
Cash flow from operations and asset sales
Net cash provided by operating activities (U.S. GAAP)
10,560
9,383
25,224
25,724
Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments
926
1,287
1,629
2,141
Cash flow from operations and asset sales (Non-GAAP)
11,486
10,670
26,853
27,865
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 second quarter of 2024 was $11.5 billion, an increase of $0.8 billion from the comparable 2023 period primarily reflectinghigherearnings.
Cash provided by operating activities totaled $25.2 billion for the first six months of 2024, $0.5 billion lower than 2023. Net income including noncontrolling interests was $18.1 billion, a decrease of $1.9 billion from the prior year period. The adjustment for the noncash provision of $10.6 billion for depreciation and depletion was up $2.1 billion from 2023. Changes in operational working capital were a reduction of $2.6 billion during the period. All other items net decreased cash flows by $0.9 billion in 2024 versus a contribution of $1.1 billion in 2023. See the Condensed Consolidated Statement of Cash Flows for additional details.
Investing activities for the first six months of 2024 used net cash of $9.4 billion, an increase of $0.2 billion compared to the prior year. Spending for additions to property, plant and equipment of $11.3 billion was $0.5 billion higher than 2023. Proceeds from asset sales were $1.6 billion, a decrease of $0.5 billion compared to the prior year. Net investments and advances decreased $0.1 billion from $0.7 billion in 2023. Cash acquired from mergers and acquistions during the first six months of 2024 was $0.8 billion.
Net cash used in financing activities was $20.5 billion in the first six months of 2024, including $8.3 billion for the purchase of 72.1 million shares of ExxonMobil stock, as part of the previously announced buyback program, and $1.3 billion to repay Pioneer convertible debt. This compares to net cash used in financing activities of $16.7 billion in the prior year. Total debt at the end of the second quarter of 2024 was $43.2 billion compared to $41.6 billion at year-end 2023. The Corporation's debt to total capital ratio was 13.5 percent at the end of the second quarter of 2024 compared to 16.4 percent at year-end 2023. The net debt to capital ratio (1) was 5.7 percent at the end of the second quarter, an increase of 1.2 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 $8.1 billion to shareholders in the first six 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 $0.2 billion and undrawn long-term committed lines of credit of $1.8 billion as of second 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.
(1) Net debt is total debt of $43.2 billion less $26.5 billion of cash and cash equivalents excluding restricted cash . Net debt to capital ratio is net debt divided by net debt plus total equity of $276.3 billion. Total debt is the sum of notes and loans payable and long-term debt, as reported in the consolidated balance sheet.
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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 second quarter of 2024, the Corporation entered into two long-term purchase agreements with an estimated total obligation of approximately $3.0 billion. The Corporation assumed take-or-pay obligations of $4.9 billion associated with the Pioneer acquisition that include long-term purchase, gathering, processing, and transportation commitments.
TAXES
(millions of dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Income taxes
4,094
3,503
7,897
8,463
Effective income tax rate
34
%
33
%
35
%
34
%
Total other taxes and duties (1)
7,531
8,328
14,691
16,423
Total
11,625
11,831
22,588
24,886
(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 $11.6 billion for the second quarter of 2024, a decrease of $0.2 billion from 2023. Income tax expense was $4.1 billion compared to $3.5 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 34 percent. This increased from the 33 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 $0.8 billion to $7.5 billion.
Total taxes were $22.6 billion for the first six months of 2024, a decrease of $2.3 billion from 2023. Income tax expense decreased by $0.6 billion to $7.9 billion reflecting lower refining margins. The effective income tax rate of 35 percent was up compared to 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 $1.7 billion to $14.7 billion.
CAPITAL AND EXPLORATION EXPENDITURES
(millions of dollars)
Three Months Ended June 30,
Six Months Ended June 30,
2024
2023
2024
2023
Upstream (including exploration expenses)
5,747
4,609
10,329
9,190
Energy Products
552
731
1,079
1,416
Chemical Products
502
659
935
1,490
Specialty Products
94
103
170
194
Other
144
64
365
256
Total
7,039
6,166
12,878
12,546
Capital and exploration expenditures in the second quarter of 2024 were $7.0 billion, up 14% from the second quarter of 2023.
Capital and exploration expenditures in the first six months of 2024 were $12.9 billion, up 3% from the first six months of 2023. The Corporation anticipates an investment level of approximately $28 billion in 2024. Actual spending could vary depending on the progress of individual projects and property acquisitions.
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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, ammonia, direct air capture, and other future plans to reduce emissions and emission intensity of ExxonMobil, its affiliates, 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 heritage Upstream Permian Basin (1) 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 and ammonia, 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 the development or changes in 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 and the success of new unconventional technologies; 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.
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. Current trends for policy stringency and development of lower-emission solutions are not yet on a pathway to achieve net-zero by 2050. As such, the Outlook does not 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,
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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.
(1) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024.
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ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information about market risks for the six months ended June 30, 2024, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2023.
The impacts of price fluctuations on 2024 earnings have been revised to reflect the acquisition of Pioneer on an annualized basis. A $1 per barrel change in the weighted-average realized price of oil would have approximately a $650 million annual after-tax effect on Upstream consolidated plus equity company earnings, excluding the impact of derivatives. Similarly, a $0.10 per thousand cubic feet change in the worldwide average gas realization would have approximately a $155 million annual after-tax effect on Upstream consolidated plus equity company earnings, excluding the impact of derivatives.
Crude oil, natural gas, petroleum product, and chemical prices fluctuate in response to changing market forces. For any given period, the extent of actual benefit or detriment will be dependent on the price movements of individual types of crude oil, results of trading activities, taxes and other government take impacts, price adjustment lags in long-term gas contracts, and crude and gas production volumes. Accordingly, changes in benchmark prices for crude oil and natural gas only provide broad indicators of changes in the earnings experienced in any particular period.
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 June 30, 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.
In the second quarter of 2024, ExxonMobil started the process of integrating Pioneer into its operations and internal control processes, resulting in some of Pioneer's historical internal controls being superseded by ExxonMobil's internal controls. This integration is expected to continue into 2025.
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PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ExxonMobil has elected to use a $1 million threshold for disclosing environmental proceedings.
On March 9, 2022, XTO Energy, Inc. (XTO) received a Notice of Violation from the United States Environmental Protection Agency (EPA) against XTO regarding certain well pad production facility sites in Butler County, Pennsylvania. The letter did not quantify an associated civil penalty. The EPA alleged violations of certain federal New Source Performance Standards (NSPS) and Pennsylvania’s Title V operating permit regulations. The Department of Justice (DOJ) has proposed a consent decree but a civil action has not been filed. In May 2024, the DOJ demanded a penalty of approximately $5.0 million. XTO is continuing to assess the factual basis of the allegations and proposed penalty and strongly disagrees with the DOJ’s position.
As reported in the Corporation’s Quarterly Report on Form 10-Q for the three months ended March 31, 2024, the State of Texas and the Corporation agreed to settle alleged violations of the Texas Clean Air Act at the Baytown Olefins Plant located in Baytown, Texas upon payment of $2.25 million to the State of Texas. Since then, the Travis County District Court for the State of Texas has approved and entered the settlement, and the Corporation has paid the agreed upon amounts in accordance with the terms therein.
Refer to the relevant portions of Note 3 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchases of Equity Securities for Quarter Ended June 30, 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
Approximate Dollar Value of Shares that May Yet Be Purchased Under the
Program
(Billions of dollars) (3)
April 2024
13,990,682
$119.85
13,990,682
$12.9
May 2024
16,675,399
$116.52
16,008,411
$32.7
June 2024
14,580,263
$112.40
14,561,544
$31.0
Total
45,246,344
$116.26
44,560,637
(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) 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. As stated in the 2023 Corporate Plan Update released December 6, 2023, the pace of the repurchase program increased to $20 billion annually through 2025 following the Pioneer transaction close. Purchases were made under terms intended to qualify for exemption under Rules 10b-18 and 10b5-1.
During the second quarter, the Corporation did not issue or sell any unregistered equity securities.
ITEM 5. OTHER INFORMATION
During the three months ended June 30, 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).
* Management contract or compensatory plan or arrangement required to be identified pursuant to Item 15(a)(3) of the most recent Annual Report on Form 10-K.
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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.
