ExxonMobil Announces Estimated Third Quarter 2005 Results

Exxon Mobil Corporation today reported third quarter results. Earnings excluding special items were $8,300 million ($1.32 per share), an increase of $2,070 million from the third quarter of 2004. Third quarter net income also included a special gain of $1,620 million from the restructuring of the Corporation's interest in the Dutch gas transportation business ("Gasunie"). Including this gain, net income of $9,920 million ($1.58 per share) increased by $4,240 million.

ExxonMobil's Chairman Lee R. Raymond Commented:

"Third quarter results include the impacts from hurricanes Katrina and Rita, two of the most significant U.S. natural disasters in recent history. ExxonMobil's top priority is the safety of employees, contractors, and their families. Our response has been rapid and innovative, demonstrating the resilience of the global energy marketplace. Following the hurricanes, ExxonMobil maximized gasoline production from all of our refineries which were operating in the U.S., and increased imports from overseas affiliates to meet U.S. demand. We acted responsibly in pricing at our company operated service stations, and we also encouraged our independent retailers and distributors to do the same. Third quarter 2005 results were adversely impacted by the hurricanes, with U.S. production volumes down 50 thousand oil-equivalent barrels per day and additional costs of approximately $45 million before tax. Our earnings in the third quarter reflect the impact of the relatively volatile industry environment on commodity prices and industry margins. Reduced volumes and higher costs will also impact the fourth quarter.

ExxonMobil continued its active investment program in the third quarter, spending $4.4 billion on capital and exploration projects, bringing the year-to-date spending to $12.4 billion, an increase of $1.7 billion versus 2004. Our disciplined project management systems remain a competitive advantage, delivering new supplies of crude oil to the global market.

The Corporation distributed a total of $6.8 billion to shareholders in the third quarter through dividends and share purchases to reduce shares outstanding."

Third Quarter Highlights

  • Earnings excluding special items of $8,300 million ($1.32 per share) increased $2,070 million from the third quarter of 2004.
  • Net income of $9,920 million includes a special gain of $1,620 million from the restructuring of the Corporation's interest in the Dutch gas transportation business.
  • Cash flow from operations and asset sales was approximately $16.5 billion, including asset sales of $0.8 billion.
  • Share purchases to reduce shares outstanding of $5.0 billion increased $1.5 billion versus the second quarter of 2005.
  • Earnings per share excluding special items of $1.32 increased 38% reflecting strong earnings and the reduction in the number of shares outstanding.
  • Production from the $3.5 billion (gross) Kizomba B project started during the third quarter, more than five months ahead of schedule. The project is designed to develop 1 billion barrels of oil (gross) off the coast of Angola.

Third Quarter 2005 vs. Third Quarter 2004

Upstream earnings excluding the Gasunie special item were $5,729 million, up $1,800 million from the third quarter of 2004 reflecting higher crude oil and natural gas realizations.

On an oil-equivalent basis, production decreased by 4.7% from the third quarter of 2004. Excluding the impact of hurricanes Katrina and Rita, divestments, and entitlement effects, production decreased 1%.

Liquids production of 2,447 kbd (thousands of barrels per day) was 58 kbd lower. Higher production from new fields in West Africa was more than offset by the impact of mature field decline, hurricanes Katrina and Rita, maintenance activities, as well as entitlement and divestment impacts.

Third quarter natural gas production decreased to 7,724 mcfd (millions of cubic feet per day) compared with 8,488 mcfd last year. Higher volumes from projects in Qatar and the U.K. were more than offset by the impact of mature field decline, hurricanes Katrina and Rita, maintenance activities, as well as entitlement and divestment impacts.

Earnings from U.S. Upstream operations were $1,671 million, $498 million higher than last year's third quarter. Non-U.S. Upstream earnings, excluding the $1,620 million Gasunie special gain, were $4,058 million, up $1,302 million from 2004.

Downstream earnings were $2,128 million, up $727 million from the third quarter 2004, reflecting higher refining margins partly offset by weaker marketing margins. Petroleum product sales were 8,217 kbd, 25 kbd lower than last year's third quarter.

U.S. Downstream earnings were $1,109 million, up $548 million. Non-U.S. Downstream earnings of $1,019 million were $179 million higher than last year's third quarter.

Chemical earnings were $472 million, down $537 million from the same quarter a year ago with reduced margins due to increased feedstock costs. Prime product sales of 6,955 kt (thousands of metric tons) were down 162 kt from last year's third quarter.

Corporate and financing expenses of $29 million decreased by $80 million mainly due to higher interest income.

During the third quarter of 2005, Exxon Mobil Corporation purchased 91 million shares of its common stock for the treasury at a gross cost of $5,535 million. These purchases included $5.0 billion to reduce the number of shares outstanding and the balance to offset shares issued in conjunction with the company benefits plans and programs. Shares outstanding were reduced from 6,305 million at the end of the second quarter to 6,222 million at the end of the third quarter. Purchases may be made in both the open market and through negotiated transactions, and may be increased, decreased or discontinued at any time without prior notice.

First Nine Months 2005 vs. First Nine Months 2004

Net income of $25,420 million ($4.00 per share) for the first nine months of 2005 increased $8,510 million from the first nine months of 2004. Net income for the first nine months 2005 included a $1,620 million special gain related to Gasunie, a $460 million positive impact from the sale of the Corporation's stake in Sinopec, and a special charge of $200 million for the Allapattah lawsuit provision. Net income for the first nine months of 2004 included a $550 million special charge for the Allapattah lawsuit provision. Excluding these impacts, earnings for the first nine months of 2005 increased by $6,080 million.

First Nine Months Highlights

  • Earnings excluding special items of $23,540 million increased by 35%, with improvements in all segments of the business.
  • Earnings per share excluding special items increased by 39% reflecting strong earnings and the reduction in the number of shares outstanding.
  • Cash flow from operations and asset sales was approximately $42.3 billion, including $4.6 billion from asset sales.
  • The Corporation distributed a total of $16.4 billion to shareholders in the first nine months through dividends and share purchases to reduce shares outstanding.
  • Capital and exploration expenditures were $12.4 billion, an increase of $1.7 billion versus 2004.

Upstream earnings excluding special items of $15,691 million increased $3,903 million from the first nine months of 2004 due to higher liquids and natural gas realizations partly offset by lower production.

On an oil-equivalent basis, production decreased 4.5% from the first nine months of last year. Excluding the impact of hurricanes Katrina and Rita, divestments and entitlement effects, production decreased by 2% from the first nine months of last year.

Liquids production of 2,486 kbd decreased by 87 kbd from 2004. Higher production from new fields in West Africa and the North Sea was more than offset by mature field decline, the impact of hurricanes Katrina and Rita, as well as entitlement effects and divestment impacts.

Natural gas production of 9,061 mcfd, decreased 614 mcfd from 2004. Higher volumes from projects in Qatar and the U.K. were more than offset by mature field decline, the impact of hurricanes Katrina and Rita, maintenance activity, and the impact of divestments.

Earnings from U.S. Upstream operations for the first nine months of 2005 were $4,413 million, an increase of $849 million. Earnings outside the U.S., excluding Gasunie, were $11,278 million, $3,054 million higher than last year.

Downstream earnings, excluding special items, were $5,492 million, an increase of $1,580 million from the first nine months of 2004 reflecting stronger worldwide refining margins partly offset by weak marketing margins. Petroleum product sales of 8,235 kbd compared with 8,131 kbd in the first nine months of 2004.

U.S. Downstream earnings, excluding Allapattah, were $2,953 million, up $1,093 million. Non-U.S. Downstream earnings, excluding Sinopec, were $2,539 million, $487 million higher than last year.

Chemical earnings of $2,568 million were up $388 million from the first nine months of 2004 due to improved margins partly offset by lower volumes. Prime product sales were 20,485 kt, down 354 kt from 2004.

Corporate and financing expenses of $211 million decreased by $209 million mainly due to higher interest income.

Gross share purchases in the first nine months of 2005 were $12,872 million which reduced shares outstanding by 2.8%.

Estimates of key financial and operating data follow. Financial data, except per share amounts, are expressed in millions of dollars.

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