ExxonMobil Earns $23B in 2021, Initiates $10B Share Repurchase Program

Exxon Mobil Corporation announced fourth-quarter 2021 earnings of $8.9 billion, or $2.08 per share assuming dilution, resulting in full-year earnings of $23 billion, or $5.39 per share assuming dilution. Capital and exploration expenditures were $5.8 billion in the fourth quarter and $16.6 billion for the full year 2021, in line with guidance.

  • Generates $48 billion of cash flow from operating activities, the highest level since 2012, more than covering capital investments, debt reduction, and dividend
  • Reduces structural costs by an additional $1.9 billion, increasing total savings to nearly $5 billion versus 2019
  • Strengthens balance sheet to pre-pandemic levels by paying down $20 billion in debt
  • Expects to achieve 2025 emission-reduction plans four years ahead of schedule
  • Aims to achieve net zero Scope 1 and 2 greenhouse gas emissions for operated assets by 2050, with plans to achieve net zero in the Permian Basin by 2030
Fourth Quarter Third Quarter Twelve Months
2021 2020 2021 2021 2020

Results Summary

(Dollars in millions, except per share data)

Earnings/(Loss) (U.S. GAAP) 8,870 (20,070) 6,750 23,040 (22,440)
Earnings/(Loss) Per Common Share

Assuming Dilution

2.08 (4.70) 1.57 5.39 (5.25)
Identified Items Per Common Share

Assuming Dilution

0.03 (4.73) (0.01) 0.01 (4.92)
Earnings/(Loss) Excluding Identified Items

Per Common Share Assuming Dilution

2.05 0.03 1.58 5.38 (0.33)
Capital and Exploration Expenditures 5,808 4,771 3,851 16,595 21,374

“Our effective pandemic response, focused investments during the down-cycle, and structural cost savings positioned us to realize the full benefits of the market recovery in 2021,” said Darren Woods, chairman and chief executive officer. “Our new streamlined business structure is another example of the actions we are taking to further strengthen our competitive advantages and grow shareholder value.  We’ve made great progress in 2021 and our forward plans position us to lead in cash flow and earnings growth, operating performance, and the energy transition.”

 

Fourth-Quarter and Full-Year Business Highlights

Upstream

  • Average realizations for crude oil increased 8% from the third quarter. Natural gas realizations increased 63% from the prior quarter.
  • Oil-equivalent production in the fourth quarter was 3.8 million barrels per day. Excluding entitlement effects, divestments, and government mandates, oil-equivalent production increased 2% versus the prior-year quarter, and was also up 2% versus the prior year, driven by demand recovery.
  • In 2021, production volumes in the Permian increased nearly 100,000 oil-equivalent barrels per day, with improved capital efficiency. The focus remains on continuing to grow free cash flow by increasing recovery through efficiency gains and technology applications.
  • ExxonMobil continued to progress its low cost of supply deepwater developments in Guyana, with estimated recoverable resources increasing to approximately 10 billion oil-equivalent barrels, supported by six commercial discoveries in 2021. The Liza Unity floating production, storage, and offloading vessel arrived in Guyanese waters in October 2021.
  • The sale of certain United Kingdom North Sea assets to Neo Energy was completed in December 2021.

Downstream

  • Global refining margins improved from the third quarter with increased transportation demand driven by easing mobility restrictions, partly offset by higher energy prices in Europe. Fourth-quarter margins improved to the low end of the 10-year range, although jet demand remains challenged.
  • Refining throughput in the quarter was the highest since 2013, up 2% from the third quarter, allowing the company to capture the benefit of improved industry margins.
  • Lubricants earnings were a full-year record, as strong reliability performance enabled full capture of robust basestocks margins.
  • The company acquired a 49.9% stake in BioJet AS, a Norwegian biofuels company that plans to convert forestry and wood-based construction waste into lower-emissions advanced biofuels, providing ExxonMobil the opportunity to purchase as much as 3 million barrels of lower-emission biofuel products per year.

Chemical

  • Fourth-quarter industry margins declined from historically high levels to the middle of the 10-year range due to increased industry supply and higher feed and energy costs.
  • Annual earnings of $7.8 billion were a full-year record, reflecting robust industry demand, strong reliability, structural cost reductions, and the company’s global supply and logistics advantages.
  • High-value, performance products grew 7% and the organization advanced key projects supporting future growth. The Corpus Christi Chemical Complex started up ahead of schedule and under budget, and a final investment decision was reached to proceed with a chemical complex in the Dayawan Petrochemical Industrial Park in Huizhou, Guangdong Province in China.
  • ExxonMobil announced the acquisition of Materia, Inc., a technology company that pioneered the development of a Nobel prize-winning technology for manufacturing high-performance structural polymers. The innovative materials can be used in a number of applications, including wind turbine blades, electric vehicle parts, sustainable construction, and anticorrosive coatings.
  • The company made its first commercial sale of certified circular polymer from recycled plastic, manufactured in Baytown, Texas, using proprietary advanced recycling technology. The advanced recycling operation in Baytown will be among the largest in North America with initial planned capacity to recycle 30,000 metric tons of plastic waste per year.
  • ExxonMobil completed the sale of its global Santoprene™ business to Celanese in December for a total price of $1.15 billion.

Leading the Drive to Net Zero

  • The company expects to meet its 2025 emission-reduction plans four years ahead of schedule. This includes a 15-20% reduction in greenhouse gas intensity of upstream operations; a 40-50% reduction in methane intensity; and a 35-45% reduction in flaring intensity across the corporation versus 2016.
  • In the fourth quarter, the company announced new emission-reduction plans through 2030, which include plans to achieve Scope 1 and 2 net zero greenhouse gas emissions by 2030 in the Permian Basin, and are consistent with Paris-aligned pathways, the U.S. and European Union’s Global Methane Pledge, and the U.S. Methane Emissions Reduction Action Plan. The company plans to invest $15 billion in lower-emission solutions to both reduce its Scope 1 and 2 greenhouse gas emissions and support customers in decarbonizing, with a focus on carbon capture and storage, hydrogen and biofuels.
  • In January, ExxonMobil announced its ambition to achieve net zero emissions from operated assets by 2050, backed by a comprehensive approach to develop detailed emission-reduction roadmaps for major operated assets. This ambition applies to Scope 1 and 2 greenhouse gas emissions and builds on the company’s 2030 emission-reduction plans. The Company’s roadmap approach identifies greenhouse gas emission-reduction opportunities for individual operated assets and the investment and future policy needs required to achieve net zero.
  • ExxonMobil and Scepter, Inc. agreed to work together to deploy advanced satellite technology and proprietary data processing platforms to detect methane emissions at a global scale. Initially focused on Permian Basin operations, the agreement has the potential to redefine methane detection and mitigation efforts and could contribute to broader satellite-based emission-reduction efforts across a dozen global industries, including energy, agriculture, manufacturing and transportation.
  • Since establishing the Low Carbon Solutions business in early 2021, ExxonMobil announced progress on 10 carbon capture and storage opportunities. The initiatives are in Houston, Texas; LaBarge, Wyoming; Edmonton, Canada; St. Fergus, U.K.; Southampton, U.K.; Fife, U.K.; Normandy, France; Malaysia; Indonesia; and Russia. These are in addition to previously announced projects in Qatar; Antwerp, Belgium; Rotterdam, Netherlands; and Australia.

Capital Allocation and Structural Cost Improvement

  • In the fourth quarter, the company paid down debt by an additional $9 billion, bringing the full-year reduction to $20 billion, strengthening the balance sheet and returning debt to pre-pandemic levels.
  • The company captured an additional $1.9 billion in structural savings in 2021, increasing total savings to roughly $5 billion relative to 2019. The company is on pace to exceed total annual structural cost reductions of $6 billion by 2023. Building on this work, the company recently announced additional efforts to streamline its business structure to enhance effectiveness, grow value, and reduce costs. These changes will more fully leverage global functional capabilities, improve line of site to markets, and enhance resource allocation to the highest corporate priorities.
  • During the fourth quarter, ExxonMobil’s board of directors approved the company’s corporate plan for 2022, with capital spending anticipated to be in the range of $21 billion to $24 billion.
  • Beginning in the first quarter of 2022, the company initiated share repurchases associated with the previously announced buyback program of up to $10 billion over the next 12 to 24 months.

Earnings and Volume Summary

Millions of Dollars

(unless noted)

4Q 2021 4Q 2020 Change Comments
Upstream
U.S. 1,768 (16,803) +18,571 Higher prices; identified items (+16,514; impairments)
Non-U.S. 4,317 (1,729) +6,046 Higher prices; identified items (+2,220; impairments +1,714, asset sale +459, tax items +297, contractual provisions -250)
Total 6,085 (18,532) +24,617 Price +5,880, volume/mix -170, expenses-140, other +320, identified items +18,730
Production (koebd) 3,816 3,689 +127 Liquids +60 kbd: lower government mandates and net growth, partly offset by lower entitlements and divestments

Gas +399 mcfd: less downtime and higher entitlements, partly offset by divestments

Downstream

U.S. 913 (514) +1,427 Higher margins driven by stronger industry refining conditions, favorable LIFO inventory impact, and reduced expenses, partly offset by lower volumes
Non-U.S. 554 (697) +1,251 Higher margins reflecting stronger industry refining conditions, higher volumes, and reduced expenses, partly offset by unfavorable LIFO inventory impact; identified items (+520; impairments +258, tax items +262)
Total 1,467 (1,211) +2,678 Margin +2,060, volume +60, expenses +150, other -110, identified items +520
Petroleum Product Sales (kbd) 5,391 4,833 +558

Chemical

U.S. 1,322 461 +861 Higher margins partly offset by increased expenses on higher turnaround, maintenance and project activity; identified items (+494; asset sale)
Non-U.S. 599 230 +369 Higher margins, favorable LIFO inventory impact, and lower expenses; identified items (+158; mainly asset sale)
Total 1,921 691 +1,230 Margin +580, expenses -90, volume -10, other +100, identified items +650
Prime Product Sales (kt) 6,701 6,643 +58
Corporate and financing (603) (1,018) +415 Identified items +345 (mainly prior year severance)

Earnings and Volume Summary

Millions of Dollars

(unless noted)

4Q 2021 3Q 2021 Change Comments

Upstream

U.S. 1,768 869 +899 Higher prices and favorable unsettled derivative impacts; identified items (-263; impairments)
Non-U.S. 4,317 3,082 +1,235 Higher prices, favorable unsettled derivative impacts, higher gas demand, and favorable one-time asset management items, partly offset by seasonally higher expenses; identified items (-280; impairments -489, asset sale +459, contractual provisions -250)
Total 6,085 3,951 +2,134 Price +2,230, volume +290, expenses -320, other +470, identified items -540
Production (koebd) 3,816 3,665 +151 Liquids +72 kbd: primarily lower government mandates

Gas +474 mcfd: seasonally higher demand and entitlement impacts

Downstream

U.S. 913 663 +250 Higher marketing-driven margins, higher volumes, and favorable one-time items, partly offset by seasonally higher expenses
Non-U.S. 554 592 -38 Favorable unsettled derivative impacts more than offset by unfavorable one-time items and seasonally higher expenses
Total 1,467 1,255 +212 Margin +490, volume +80, expenses -250, other -110
Petroleum Product Sales (kbd) 5,391 5,327 +64

Chemical

U.S. 1,322 1,183 +139 Lower margins and higher maintenance, turnaround and project expenses; identified items (+494; asset sale)
Non-U.S. 599 957 -358 Lower margins, seasonally higher expenses, and unfavorable foreign exchange; identified items (+136; asset sale)
Total 1,921 2,140 -219 Margin -680, expenses -110, volume -30, other -30, identified items +630
Prime Product Sales (kt) 6,701 6,672 +29
Corporate and financing (603) (596) -7

Earnings and Volume Summary

Millions of Dollars

(unless noted)

Full Year 2021 Full Year 2020 Change Comments

Upstream

U.S. 3,663 (19,385) +23,048 Higher prices, reduced expenses, and increased liquids volumes; identified items (+16,829; impairments)
Non-U.S. 12,112 (645) +12,757 Higher prices and favorable one-time tax items, partly offset by lower liquids volumes driven by entitlement effects; identified items (+2,322; impairments +1,755, asset sale +459, tax +297, inventory valuation +61, contractual provisions -250)
Total 15,775 (20,030) +35,805 Price +15,930, volume -340, expenses +390, other +680, identified items +19,150
Production (koebd) 3,712 3,761 -49 Liquids -60 kbd: higher demand reflecting the absence of economic curtailments, and growth, more than offset by lower entitlements, decline and divestments

Gas +66 mcfd: higher demand, partly offset by divestments and Groningen production limit

Downstream

U.S. 1,314 (852) +2,166 Higher margins driven by improved industry refining conditions and reduced expenses
Non-U.S. 791 (225) +1,016 Reduced expenses and higher volumes, partly offset by unfavorable foreign exchange and LIFO impacts; identified items (+855; impairments +593, tax items +262)
Total 2,105 (1,077) +3,182 Margin +1,920, volume +100, expenses +560, other -260, identified items +860
Petroleum Product Sales (kbd) 5,162 4,895 +267

Chemical

U.S. 4,502 1,277 +3,225 Higher margins and increased volumes; identified items (+584; mainly asset sale)
Non-U.S. 3,294 686 +2,608 Higher margins, favorable foreign exchange, and reduced expenses; identified items (+160; mainly asset sale)
Total 7,796 1,963 +5,833 Margin +4,480, volume +250, expenses +80, other +280, identified items +740
Prime Product Sales (kt) 26,332 25,449 +883
Corporate and financing (2,636) (3,296) +660 Identified items +297 (mainly prior year severance), lower financing costs +191

Cash Flow from Operations and Asset Sales excluding Working Capital

Millions of Dollars

4Q 2021

Full Year 2021

Notes

Net income (loss) including noncontrolling interests 9,079 23,598 Including noncontrolling interests of $209 million in the quarter and $558 million for the full year
Depreciation 5,661 20,607
Changes in operational working capital 1,930 4,162
Other 454 (238)
Cash Flow from Operating

Activities (U.S. GAAP)

17,124 48,129
Asset sales 2,601 3,176
Cash Flow from Operations and Asset Sales 19,725 51,305
Changes in operational working capital (1,930) (4,162)
Cash Flow from Operations and Asset Sales excluding Working Capital 17,795 47,143

ExxonMobil will discuss financial and operating results and other matters during a webcast at 8:30 a.m. Central Time on February 1, 2022. To listen to the event or access an archived replay, please visit www.exxonmobil.com.

 

 

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