EXXON MOBIL CORP
10-Ks and 10-Qs
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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2022
or
THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from __________to__________
Commission File Number 1-2256
(Exact name of registrant as specified in its charter)
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification Number) | |||||||
(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 | ||||||||||||
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.
| ☑ | 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, 2022 | |||||||
| Common stock, without par value | ||||||||
EXXON MOBIL CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022
TABLE OF CONTENTS
| PART I. FINANCIAL INFORMATION | |||||
| Item 1. Financial Statements | |||||
Condensed Consolidated Statement of Income - Three and six months ended June 30, 2022 and 2021 | 3 | ||||
Condensed Consolidated Statement of Comprehensive Income - Three and six months ended June 30, 2022 and 2021 | 4 | ||||
Condensed Consolidated Balance Sheet - As of June 30, 2022 and December 31, 2021 | 5 | ||||
Condensed Consolidated Statement of Cash Flows - Six months ended June 30, 2022 and 2021 | 6 | ||||
Condensed Consolidated Statement of Changes in Equity - Three months ended June 30, 2022 and 2021 | 7 | ||||
Condensed Consolidated Statement of Changes in Equity - Six months ended June 30, 2022 and 2021 | 8 | ||||
| Notes to Condensed Consolidated Financial Statements | 9 | ||||
| Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations | 18 | ||||
| Item 3. Quantitative and Qualitative Disclosures About Market Risk | 33 | ||||
| Item 4. Controls and Procedures | 33 | ||||
| PART II. OTHER INFORMATION | |||||
| Item 1. Legal Proceedings | 34 | ||||
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds | 34 | ||||
Item 6. Exhibits | 34 | ||||
| Index to Exhibits | 35 | ||||
| Signature | 36 | ||||
2
PART I. FINANCIAL INFORMATION
| ITEM 1. FINANCIAL STATEMENTS | ||||||||||||||
| CONDENSED CONSOLIDATED STATEMENT OF INCOME | |||||
(millions of dollars, unless noted) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Revenues and other income | ||||||||||||||||||||
| Sales and other operating revenue | ||||||||||||||||||||
| Income from equity affiliates | ||||||||||||||||||||
| Other income | ||||||||||||||||||||
| Total revenues and other income | ||||||||||||||||||||
| Costs and other deductions | ||||||||||||||||||||
| Crude oil and product purchases | ||||||||||||||||||||
| Production and manufacturing expenses | ||||||||||||||||||||
| Selling, general and administrative expenses | ||||||||||||||||||||
| Depreciation and depletion (including impairments) | ||||||||||||||||||||
| Exploration expenses, including dry holes | ||||||||||||||||||||
| Non-service pension and postretirement benefit expense | ||||||||||||||||||||
| Interest expense | ||||||||||||||||||||
| Other taxes and duties | ||||||||||||||||||||
| Total costs and other deductions | ||||||||||||||||||||
| Income (loss) before income taxes | ||||||||||||||||||||
| Income taxes | ||||||||||||||||||||
| Net income (loss) including noncontrolling interests | ||||||||||||||||||||
| Net income (loss) attributable to noncontrolling interests | ||||||||||||||||||||
| Net income (loss) attributable to ExxonMobil | ||||||||||||||||||||
Earnings (loss) per common share (dollars) | ||||||||||||||||||||
Earnings (loss) per common share - assuming dilution (dollars) | ||||||||||||||||||||
| The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. | ||||||||||||||||||||
3
| CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME | |||||
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Net income (loss) including noncontrolling interests | ||||||||||||||||||||
| Other comprehensive income (loss) (net of income taxes) | ||||||||||||||||||||
| Foreign exchange translation adjustment | ( | ( | ||||||||||||||||||
| Postretirement benefits reserves adjustment (excluding amortization) | ( | |||||||||||||||||||
| Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | ||||||||||||||||||||
| Total other comprehensive income (loss) | ( | ( | ||||||||||||||||||
| Comprehensive income (loss) including noncontrolling interests | ||||||||||||||||||||
| Comprehensive income (loss) attributable to noncontrolling interests | ||||||||||||||||||||
| Comprehensive income (loss) attributable to ExxonMobil | ||||||||||||||||||||
| 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, 2022 | December 31, 2021 | |||||||||
| ASSETS | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | |||||||||||
| Notes and accounts receivable – net | |||||||||||
| Inventories | |||||||||||
| Crude oil, products and merchandise | |||||||||||
| Materials and supplies | |||||||||||
| Other current assets | |||||||||||
| Total current assets | |||||||||||
| Investments, advances and long-term receivables | |||||||||||
| Property, plant and equipment – net | |||||||||||
| Other assets, including intangibles – net | |||||||||||
| Total Assets | |||||||||||
| LIABILITIES | |||||||||||
| Current liabilities | |||||||||||
| Notes and loans payable | |||||||||||
| Accounts payable and accrued liabilities | |||||||||||
| Income taxes payable | |||||||||||
| Total current liabilities | |||||||||||
| Long-term debt | |||||||||||
| Postretirement benefits reserves | |||||||||||
| Deferred income tax liabilities | |||||||||||
| Long-term obligations to equity companies | |||||||||||
| Other long-term obligations | |||||||||||
| Total Liabilities | |||||||||||
| Commitments and contingencies (Note 3) | |||||||||||
| EQUITY | |||||||||||
| Common stock without par value | |||||||||||
( | |||||||||||
| Earnings reinvested | |||||||||||
| Accumulated other comprehensive income | ( | ( | |||||||||
| Common stock held in treasury | |||||||||||
( | ( | ( | |||||||||
| ExxonMobil share of equity | |||||||||||
| Noncontrolling interests | |||||||||||
| Total Equity | |||||||||||
| Total Liabilities and Equity | |||||||||||
| The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. | |||||||||||
5
| CONDENSED CONSOLIDATED STATEMENT OF CASH FLOW | |||||
| (millions of dollars) | Six Months Ended June 30, | ||||||||||
| 2022 | 2021 | ||||||||||
| CASH FLOW FROM OPERATING ACTIVITIES | |||||||||||
| Net income (loss) including noncontrolling interests | |||||||||||
| Depreciation and depletion (including impairments) | |||||||||||
| Changes in operational working capital, excluding cash and debt | ( | ||||||||||
| All other items – net | ( | ( | |||||||||
| Net cash provided by operating activities | |||||||||||
| CASH FLOW FROM INVESTING ACTIVITIES | |||||||||||
| Additions to property, plant and equipment | ( | ( | |||||||||
| Proceeds from asset sales and returns of investments | |||||||||||
| Additional investments and advances | ( | ( | |||||||||
| Other investing activities including collection of advances | |||||||||||
| Net cash used in investing activities | ( | ( | |||||||||
| CASH FLOW FROM FINANCING ACTIVITIES | |||||||||||
Additions to short-term debt | |||||||||||
Reductions in short-term debt | ( | ( | |||||||||
| Additions/(reductions) in debt with three months or less maturity | |||||||||||
| Contingent consideration payments | ( | ( | |||||||||
| Cash dividends to ExxonMobil shareholders | ( | ( | |||||||||
| Cash dividends to noncontrolling interests | ( | ( | |||||||||
| Changes in noncontrolling interests | ( | ( | |||||||||
| Common stock acquired | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effects of exchange rate changes on cash | ( | ||||||||||
| Increase/(decrease) in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents at beginning of period | |||||||||||
| Cash and cash equivalents at end of period | |||||||||||
| SUPPLEMENTAL DISCLOSURES | |||||||||||
| Income taxes paid | |||||||||||
| Cash interest paid | |||||||||||
| Included in cash flows from operating activities | |||||||||||
| Capitalized, included in cash flows from investing activities | |||||||||||
| Total cash interest paid | |||||||||||
| Noncash right of use assets recorded in exchange for lease liabilities | |||||||||||
| Operating leases | |||||||||||
| Finance leases | |||||||||||
| The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. | |||||||||||
6
| CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY | |||||
| ExxonMobil Share of Equity | ||||||||||||||||||||||||||
(millions of dollars, unless noted) | Common Stock | Earnings Reinvested | Accumulated Other Comprehensive Income | Common Stock Held in Treasury | ExxonMobil Share of Equity | Non-controlling Interests | Total Equity | |||||||||||||||||||
| Balance as of March 31, 2021 | ( | ( | ||||||||||||||||||||||||
| Amortization of stock-based awards | — | — | — | — | ||||||||||||||||||||||
| Other | ( | — | — | — | ( | |||||||||||||||||||||
| Net income (loss) for the period | — | — | — | |||||||||||||||||||||||
| Dividends - common shares | — | ( | — | — | ( | ( | ( | |||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | |||||||||||||||||||||||
| Acquisitions, at cost | — | — | — | — | — | ( | ( | |||||||||||||||||||
| Dispositions | — | — | — | — | ||||||||||||||||||||||
| Balance as of June 30, 2021 | ( | ( | ||||||||||||||||||||||||
| Balance as of March 31, 2022 | ( | ( | ||||||||||||||||||||||||
| Amortization of stock-based awards | — | — | — | — | ||||||||||||||||||||||
| Other | ( | — | — | — | ( | ( | ( | |||||||||||||||||||
| Net income (loss) for the period | — | — | — | |||||||||||||||||||||||
| Dividends - common shares | — | ( | — | — | ( | ( | ( | |||||||||||||||||||
| Other comprehensive income (loss) | — | — | ( | — | ( | ( | ( | |||||||||||||||||||
| Acquisitions, at cost | — | — | — | ( | ( | ( | ( | |||||||||||||||||||
| Dispositions | — | — | — | — | ||||||||||||||||||||||
| Balance as of June 30, 2022 | ( | ( | ||||||||||||||||||||||||
| Three Months Ended June 30, 2022 | Three Months Ended June 30, 2021 | |||||||||||||||||||||||||
Common Stock Share Activity (millions of shares) | Issued | Held in Treasury | Outstanding | Issued | Held in Treasury | Outstanding | ||||||||||||||||||||
| Balance as of March 31 | ( | ( | ||||||||||||||||||||||||
| Acquisitions | — | ( | ( | — | — | — | ||||||||||||||||||||
| Dispositions | — | — | — | — | — | — | ||||||||||||||||||||
| Balance as of June 30 | ( | ( | ||||||||||||||||||||||||
| The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements. | ||||||||||||||||||||||||||
7
| CONDENSED CONSOLIDATED STATEMENT OF CHANGE IN EQUITY | |||||
| ExxonMobil Share of Equity | ||||||||||||||||||||||||||
(millions of dollars, unless noted) | Common Stock | Earnings Reinvested | Accumulated Other Comprehensive Income | Common Stock Held in Treasury | ExxonMobil Share of Equity | Non-controlling Interests | Total Equity | |||||||||||||||||||
| Balance as of December 31, 2020 | ( | ( | ||||||||||||||||||||||||
| Amortization of stock-based awards | — | — | — | — | ||||||||||||||||||||||
| Other | ( | — | — | — | ( | |||||||||||||||||||||
| Net income (loss) for the period | — | — | — | |||||||||||||||||||||||
| Dividends - common shares | — | ( | — | — | ( | ( | ( | |||||||||||||||||||
| Other comprehensive income (loss) | — | — | — | |||||||||||||||||||||||
| Acquisitions, at cost | — | — | — | ( | ( | ( | ( | |||||||||||||||||||
| Dispositions | — | — | — | — | ||||||||||||||||||||||
| Balance as of June 30, 2021 | ( | ( | ||||||||||||||||||||||||
| Balance as of December 31, 2021 | ( | ( | ||||||||||||||||||||||||
| Amortization of stock-based awards | — | — | — | — | ||||||||||||||||||||||
| Other | ( | — | — | — | ( | ( | ( | |||||||||||||||||||
| Net income (loss) for the period | — | — | — | |||||||||||||||||||||||
| Dividends - common shares | — | ( | — | — | ( | ( | ( | |||||||||||||||||||
| Other comprehensive income (loss) | — | — | ( | — | ( | ( | ( | |||||||||||||||||||
| Acquisitions, at cost | — | — | — | ( | ( | ( | ( | |||||||||||||||||||
| Dispositions | — | — | — | — | ||||||||||||||||||||||
| Balance as of June 30, 2022 | ( | ( | ||||||||||||||||||||||||
| Six Months Ended June 30, 2022 | Six Months Ended June 30, 2021 | |||||||||||||||||||||||||
Common Stock Share Activity (millions of shares) | Issued | Held in Treasury | Outstanding | Issued | Held in Treasury | Outstanding | ||||||||||||||||||||
| Balance as of December 31 | ( | ( | ||||||||||||||||||||||||
| Acquisitions | — | ( | ( | — | — | — | ||||||||||||||||||||
| Dispositions | — | — | — | — | ||||||||||||||||||||||
| Balance as of June 30 | ( | ( | ||||||||||||||||||||||||
| 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 2021 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. Prior data has been reclassified in certain cases to conform to the current presentation basis.
The Corporation's exploration and production activities are accounted for under the "successful efforts" method.
Note 2. Russia
9
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. ExxonMobil will continue to defend itself vigorously in these matters. Based on a consideration of all relevant facts and circumstances, the Corporation does not believe the ultimate outcome of any currently pending lawsuit against ExxonMobil will have a material adverse effect upon the Corporation's operations, financial condition, or financial statements taken as a whole.
Other Contingencies
The Corporation and certain of its consolidated subsidiaries were contingently liable at June 30, 2022, 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. These guarantees are not reasonably likely to have a material effect on the Corporation’s financial condition, changes in financial condition, revenues or expenses, results of operations, liquidity, capital expenditures or capital resources.
| June 30, 2022 | |||||||||||
| (millions of dollars) | Equity Company Obligations (1) | Other Third-Party Obligations | Total | ||||||||
| Guarantees | |||||||||||
| Debt-related | |||||||||||
| Other | |||||||||||
| Total | |||||||||||
| (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.
The operations and earnings of the Corporation and its affiliates throughout the world have been, and may in the future be, affected from time to time in varying degree by political developments and laws and regulations, such as forced divestiture of assets; restrictions on production, imports and exports; price controls; tax increases and retroactive tax claims; expropriation of property; cancellation of contract rights; sanctions and environmental regulations. Both the likelihood of such occurrences and their overall effect upon the Corporation vary greatly from country to country and are not predictable.
10
Note 4. Other Comprehensive Income Information
ExxonMobil Share of Accumulated Other Comprehensive Income (millions of dollars) | Cumulative Foreign Exchange Translation Adjustment | Postretirement Benefits Reserves Adjustment | Total | ||||||||
| Balance as of December 31, 2020 | ( | ( | ( | ||||||||
Current period change excluding amounts reclassified from accumulated other comprehensive income (1) | |||||||||||
| Amounts reclassified from accumulated other comprehensive income | |||||||||||
| Total change in accumulated other comprehensive income | |||||||||||
| Balance as of June 30, 2021 | ( | ( | ( | ||||||||
| Balance as of December 31, 2021 | ( | ( | ( | ||||||||
Current period change excluding amounts reclassified from accumulated other comprehensive income (1) | ( | ( | |||||||||
| Amounts reclassified from accumulated other comprehensive income | |||||||||||
| Total change in accumulated other comprehensive income | ( | ( | |||||||||
| Balance as of June 30, 2022 | ( | ( | ( | ||||||||
(1) Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $ | |||||||||||
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, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| 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) | ( | ( | ( | ( | ||||||||||||||||
Income Tax (Expense)/Credit For Components of Other Comprehensive Income (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Foreign exchange translation adjustment | ( | ( | ( | |||||||||||||||||
| Postretirement benefits reserves adjustment (excluding amortization) | ( | ( | ( | |||||||||||||||||
| Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs | ( | ( | ( | ( | ||||||||||||||||
| Total | ( | ( | ( | ( | ||||||||||||||||
11
Note 5. Earnings Per Share
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Earnings per common share | ||||||||||||||||||||
Net income (loss) attributable to ExxonMobil (millions of dollars) | ||||||||||||||||||||
Weighted average number of common shares outstanding (millions of shares) | ||||||||||||||||||||
Earnings (loss) per common share (dollars) (1) | ||||||||||||||||||||
Dividends paid per common share (dollars) | ||||||||||||||||||||
| (1) The calculation of 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, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Components of net benefit cost | ||||||||||||||||||||
| Pension Benefits - U.S. | ||||||||||||||||||||
| Service cost | ||||||||||||||||||||
| Interest cost | ||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||
| Amortization of actuarial loss/(gain) | ||||||||||||||||||||
| Amortization of prior service cost | ( | ( | ( | ( | ||||||||||||||||
| Net pension enhancement and curtailment/settlement cost | ||||||||||||||||||||
| Net benefit cost | ||||||||||||||||||||
| Pension Benefits - Non-U.S. | ||||||||||||||||||||
| Service cost | ||||||||||||||||||||
| Interest cost | ||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||
| Amortization of actuarial loss/(gain) | ||||||||||||||||||||
| Amortization of prior service cost | ||||||||||||||||||||
| Net pension enhancement and curtailment/settlement cost | ( | ( | ||||||||||||||||||
| Net benefit cost | ||||||||||||||||||||
| Other Postretirement Benefits | ||||||||||||||||||||
| Service cost | ||||||||||||||||||||
| Interest cost | ||||||||||||||||||||
| Expected return on plan assets | ( | ( | ( | ( | ||||||||||||||||
| Amortization of actuarial loss/(gain) | ||||||||||||||||||||
| Amortization of prior service cost | ( | ( | ( | ( | ||||||||||||||||
| Net benefit cost | ||||||||||||||||||||
12
Note 7. Financial Instruments and Derivatives
The estimated fair value of financial instruments and derivatives at June 30, 2022 and December 31, 2021, and the related hierarchy level for the fair value measurement was as follows:
| June 30, 2022 | ||||||||||||||||||||||||||
| 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) | — | ( | ( | — | ||||||||||||||||||||||
Advances to/receivables from equity companies (2)(6) | — | — | — | |||||||||||||||||||||||
Other long-term financial assets (3) | — | — | — | |||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
Derivative liabilities (4) | — | ( | ( | — | ||||||||||||||||||||||
Long-term debt (5) | — | — | ||||||||||||||||||||||||
Long-term obligations to equity companies (6) | — | — | — | — | ( | |||||||||||||||||||||
Other long-term financial liabilities (7) | — | — | — | — | ||||||||||||||||||||||
| December 31, 2021 | ||||||||||||||||||||||||||
| 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) | — | ( | ( | — | ||||||||||||||||||||||
Advances to/receivables from equity companies (2)(6) | — | — | — | ( | ||||||||||||||||||||||
Other long-term financial assets (3) | — | — | — | |||||||||||||||||||||||
| Liabilities | ||||||||||||||||||||||||||
Derivative liabilities (4) | — | ( | ( | — | ||||||||||||||||||||||
Long-term debt (5) | — | — | ( | |||||||||||||||||||||||
Long-term obligations to equity companies (6) | — | — | — | — | ( | |||||||||||||||||||||
Other long-term financial liabilities (7) | — | — | — | — | ||||||||||||||||||||||
| (1) | Included in the Balance Sheet lines: Notes and accounts receivable - net and Other assets, including intangibles - net | ||||
| (2) | Included in the Balance Sheet line: Investments, advances and long-term receivables | ||||
| (3) | Included in the Balance Sheet lines: Investments, advances and long-term receivables and Other assets, including intangibles - net | ||||
| (4) | Included in the Balance Sheet lines: Accounts payable and accrued liabilities and Other long-term obligations | ||||
| (5) | Excluding finance lease obligations | ||||
| (6) | Advances to/receivables from equity companies and long-term obligations to equity companies are mainly designated as hierarchy level 3 inputs. The fair value is calculated by discounting the remaining obligations by a rate consistent with the credit quality and industry of the company. | ||||
| (7) | Included in the Balance Sheet line: Other long-term obligations. Includes contingent consideration related to a prior year acquisition where fair value is based on expected drilling activities and discount rates. | ||||
At June 30, 2022 and December 31, 2021, respectively, the Corporation had $1,403 million and $641 million of collateral under master netting arrangements not offset against the derivatives on the Consolidated Balance Sheet, primarily related to initial margin requirements.
13
Corporation has designated $4.7 billion of its Euro-denominated long-term 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 $10.6 billion, of which $10 billion will expire without renewal in the third quarter, and undrawn long-term committed lines of credit of $0.4 billion as of second quarter 2022.
Derivative Instruments
The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of our 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". 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, 2022 and December 31, 2021, or results of operations for the periods ended June 30, 2022 and 2021.
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, 2022 and December 31, 2021, was as follows:
| (millions) | June 30, 2022 | December 31, 2021 | ||||||
| Crude oil (barrels) | ||||||||
| Petroleum products (barrels) | ( | ( | ||||||
| Natural gas (MMBTUs) | ( | ( | ||||||
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, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Sales and other operating revenue | ( | ( | ( | ( | ||||||||||||||||
| Crude oil and product purchases | ( | ( | ( | |||||||||||||||||
| Total | ( | ( | ( | ( | ||||||||||||||||
Note 8. Disclosures about Segments and Related Information
Effective April 1, 2022, the Corporation streamlined its business structure by combining the Chemical and Downstream businesses into a single business, Product Solutions. Product Solutions consists of three operating segments:
•Energy Products: Fuels, aromatics, and catalysts and licensing
•Chemical Products: Olefins, polyethylene, polypropylene, and intermediates
•Specialty Products: Finished lubricants, basestocks and waxes, synthetics, and elastomers and resins
14
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Earnings (Loss) After Income Tax | ||||||||||||||||||||
| Upstream | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Energy Products | ||||||||||||||||||||
| United States | ( | ( | ||||||||||||||||||
| Non-U.S. | ( | ( | ||||||||||||||||||
| Chemical Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Specialty Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Corporate and Financing | ( | ( | ( | ( | ||||||||||||||||
| Corporate total | ||||||||||||||||||||
| Sales and Other Operating Revenue | ||||||||||||||||||||
| Upstream | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Energy Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Chemical Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Specialty Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Corporate and Financing | ( | |||||||||||||||||||
Corporate total (1) | ||||||||||||||||||||
| Intersegment Revenue | ||||||||||||||||||||
| Upstream | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Energy Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Chemical Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Specialty Products | ||||||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
| Corporate and Financing | ||||||||||||||||||||
(1) See footnote on the next page | ||||||||||||||||||||
15
| Geographic Sales and Other Operating Revenue | ||||||||||||||||||||
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| United States | ||||||||||||||||||||
| Non-U.S. | ||||||||||||||||||||
Total (1) | ||||||||||||||||||||
Significant Non-U.S. revenue sources include: (2) | ||||||||||||||||||||
| Canada | ||||||||||||||||||||
| United Kingdom | ||||||||||||||||||||
| France | ||||||||||||||||||||
| Singapore | ||||||||||||||||||||
| Italy | ||||||||||||||||||||
| Belgium | ||||||||||||||||||||
| Australia | ||||||||||||||||||||
(1) Includes approximately | ||||||||||||||||||||
(2) 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. | ||||||||||||||||||||
16
Note 9. Divestment Activities
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 early July, a Nigerian court issued an order to halt transition activities and enter into arbitration with the Nigerian National Petroleum Company. The closing date and any loss on sale will depend on resolution of these matters.
In May 2022, the Corporation signed an agreement for the sale of ExxonMobil Exploration and Production Romania, consisting of certain unproved Upstream assets, to Romgaz S.A. The transaction closed in the third quarter, and the Corporation will recognize a gain on the sale of approximately $300 million.
In June 2022, the Corporation signed an agreement with Whitecap Resources Inc. for the sale of XTO Energy Canada, consisting of Upstream unconventional assets in central Alberta. The agreed sales price is subject to interim period adjustments from May 1, 2022 to the closing date. The transaction is anticipated to close in the third quarter, and the Corporation expects to recognize a gain on the sale of approximately $300 million.
17
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
During the COVID-19 pandemic, industry investment to maintain and increase production capacity was restrained to preserve capital, resulting in underinvestment and supply tightness as demand for petroleum and petrochemical products recovered. In addition, industry rationalization of refining capacity resulted in more than 3 million barrels per day of capacity being taken offline. Across late 2021 and the first half of 2022, this dynamic, along with supply chain constraints, and a continuation of demand recovery led to a steady increase in oil and natural gas prices and refining margins. In the first half of 2022, tightness in the oil and natural gas markets was further exacerbated by Russia’s invasion of Ukraine and subsequent sanctions imposed upon business and other activities in Russia. The price of Brent crude oil and certain regional natural gas indicators increased to levels not seen for several years, and both natural gas realizations and industry refining margins improved to levels well above the 10-year range. By the end of the second quarter, high prices had led to a tempering of demand for some products. Commodity and product prices are expected to remain volatile given the current global economic uncertainty and geopolitical events affecting supply and demand.
In response to Russia’s military action in Ukraine, the Corporation announced in early 2022 that it plans to discontinue operations on the Sakhalin-1 project (“Sakhalin”) and develop steps to exit the venture. The Corporation remains focused on protecting the safety of employees, operations, and the environment. The Corporation is complying with all applicable laws and sanctions and is currently engaged in transitioning Sakhalin-1 operating activities to another party.
The Corporation’s first quarter results included after-tax charges of $3.4 billion largely representing the impairment of its operations related to Sakhalin (see Note 2 to Condensed Consolidated Financial Statements). Efforts to transition operatorship to a third party and exit the venture are expected to result in minimal hydrocarbon sales and cash flows for the Corporation’s account in future periods. For reference, excluding the impact of impairments and other charges, after-tax earnings related to the Corporation’s interest in Sakhalin during the first half of 2022 were approximately $0.3 billion, and combined oil and gas production was approximately 45 thousand oil-equivalent barrels per day. The Corporation's exit from the project would result in quantities estimated at 150 million oil-equivalent barrels no longer qualifying as proved reserves, which represented less than one percent of the Corporation's 18.5 billion oil-equivalent barrels of proved reserves at year-end 2021.
The Corporation holds a 25% interest in Tengizchevroil, LLP (TCO), which operates the Tengiz and Korolev oil fields in Kazakhstan, and holds a 16.8% working interest in the Kashagan field in Kazakhstan. Oil production from those operations is exported through the Caspian Pipeline Consortium (CPC) pipeline, in which the Corporation holds a 7.5% interest. CPC traverses parts of Kazakhstan and Russia to tanker-loading facilities on the Russian coast of the Black Sea. In the event that existing sanctions related to Russia’s military actions in Ukraine expand, new sanctions are imposed, countermeasures are employed by the Russian Federation, or other direct or indirect impacts arise, it is possible that the transportation of Kazakhstan oil through the CPC pipeline could be disrupted, curtailed, temporarily suspended, or otherwise restricted. In such a case, the Corporation could experience a loss of cash flows of uncertain duration. For reference, after-tax earnings related to the Corporation’s interests in Kazakhstan for the first half of 2022 were $1.5 billion, and its share of combined oil and gas production was approximately 250 thousand oil-equivalent barrels per day.
Effective April 1, 2022, the Corporation streamlined its business structure by combining the Chemical and Downstream businesses into a single business, Product Solutions. The new business is focused on growing high-value products, improving competitiveness and leading in sustainability. Product Solutions consists of three operating segments:
•Energy Products: Fuels, aromatics, and catalysts and licensing
•Chemical Products: Olefins, polyethylene, polypropylene, and intermediates
•Specialty Products: Finished lubricants, basestocks and waxes, synthetics, and elastomers and resins
Further information on financial performance related to the new segments are disclosed in Management's Discussion and Analysis and Note 8 to the Condensed Consolidated Financial Statements.
18
FUNCTIONAL EARNINGS SUMMARY
Earnings (loss) excluding Identified Items, are earnings (loss) excluding individually significant non-operational events with 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 segments or several periods. 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.
Three Months Ended June 30, 2022 | Upstream | Energy Products | Chemical Products | Specialty Products | Corporate and Financing | Total | ||||||||||||||||||||||||||
| (millions of dollars) | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||||||||||||
| Earnings (loss) (U.S. GAAP) | 3,749 | 7,622 | 2,655 | 2,617 | 625 | 450 | 232 | 185 | (286) | 17,850 | ||||||||||||||||||||||
| Identified Items | ||||||||||||||||||||||||||||||||
| Gain/(loss) on sale of assets | 299 | — | — | — | — | — | — | — | — | 299 | ||||||||||||||||||||||
| Earnings (loss) excluding Identified Items | 3,450 | 7,622 | 2,655 | 2,617 | 625 | 450 | 232 | 185 | (286) | 17,551 | ||||||||||||||||||||||
| Three Months Ended June 30, 2021 | Upstream | Energy Products | Chemical Products | Specialty Products | Corporate and Financing | Total | ||||||||||||||||||||||||||
| (millions of dollars) | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||||||||||||
| Earnings (loss) (U.S. GAAP) | 663 | 2,522 | (278) | (578) | 1,149 | 1,051 | 262 | 487 | (588) | 4,690 | ||||||||||||||||||||||
| Identified Items | ||||||||||||||||||||||||||||||||
| Severance charges | — | — | — | — | — | — | — | — | (12) | (12) | ||||||||||||||||||||||
| Earnings (loss) excluding Identified Items | 663 | 2,522 | (278) | (578) | 1,149 | 1,051 | 262 | 487 | (576) | 4,702 | ||||||||||||||||||||||
| Six Months Ended June 30, 2022 | Upstream | Energy Products | Chemical Products | Specialty Products | Corporate and Financing | Total | ||||||||||||||||||||||||||
| (millions of dollars) | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||||||||||||
| Earnings (loss) (U.S. GAAP) | 6,125 | 9,734 | 3,144 | 1,933 | 1,395 | 1,086 | 478 | 415 | (980) | 23,330 | ||||||||||||||||||||||
| Identified Items | ||||||||||||||||||||||||||||||||
| Impairments | — | (2,877) | — | — | — | — | — | — | (98) | (2,975) | ||||||||||||||||||||||
| Gain/(loss) on sale of assets | 299 | — | — | — | — | — | — | — | — | 299 | ||||||||||||||||||||||
| Other - Russia impacts | — | (378) | — | — | — | — | — | — | — | (378) | ||||||||||||||||||||||
| Earnings (loss) excluding Identified Items | 5,826 | 12,989 | 3,144 | 1,933 | 1,395 | 1,086 | 478 | 415 | (882) | 26,384 | ||||||||||||||||||||||
| Six Months Ended June 30, 2021 | Upstream | Energy Products | Chemical Products | Specialty Products | Corporate and Financing | Total | ||||||||||||||||||||||||||
| (millions of dollars) | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | U.S. | Non-U.S. | ||||||||||||||||||||||||
| Earnings (loss) (U.S. GAAP) | 1,026 | 4,713 | (510) | (1,267) | 1,803 | 1,788 | 442 | 862 | (1,437) | 7,420 | ||||||||||||||||||||||
| Identified Items | ||||||||||||||||||||||||||||||||
| Severance charges | — | — | — | — | — | — | — | — | (43) | (43) | ||||||||||||||||||||||
| Earnings (loss) excluding Identified Items | 1,026 | 4,713 | (510) | (1,267) | 1,803 | 1,788 | 442 | 862 | (1,394) | 7,463 | ||||||||||||||||||||||
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 segment 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.
19
REVIEW OF SECOND QUARTER 2022 RESULTS
ExxonMobil’s second quarter 2022 earnings were $17.9 billion, or $4.21 per diluted share, compared with earnings of $4.7 billion a year earlier. The increase in earnings was driven by higher Upstream realizations and Energy Products margins. Capital and exploration expenditures were $4.6 billion, up $0.8 billion from second quarter 2021.
Earnings for the first six months of 2022 were $23.3 billion, or $5.49 per diluted share, compared with $7.4 billion a year earlier. Capital and exploration expenditures were $9.5 billion, up $2.6 billion from 2021. The Corporation distributed $7.5 billion in dividends to shareholders and repurchased $6.1 billion of common stock.
UPSTREAM
| Upstream Financial Results | ||||||||||||||||||||
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Earnings (loss) (U.S. GAAP) | ||||||||||||||||||||
| United States | 3,749 | 663 | 6,125 | 1,026 | ||||||||||||||||
| Non-U.S. | 7,622 | 2,522 | 9,734 | 4,713 | ||||||||||||||||
| Total | 11,371 | 3,185 | 15,859 | 5,739 | ||||||||||||||||
Identified Items (1) | ||||||||||||||||||||
| United States | 299 | — | 299 | — | ||||||||||||||||
| Non-U.S. | — | — | (3,255) | — | ||||||||||||||||
| Total | 299 | — | (2,956) | — | ||||||||||||||||
Earnings (loss) excluding Identified Items (1) | ||||||||||||||||||||
| United States | 3,450 | 663 | 5,826 | 1,026 | ||||||||||||||||
| Non-U.S. | 7,622 | 2,522 | 12,989 | 4,713 | ||||||||||||||||
| Total | 11,072 | 3,185 | 18,815 | 5,739 | ||||||||||||||||
Upstream Second Quarter Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Price – Higher realizations increased earnings by $7,900 million as average realizations for crude oil increased 71%, while natural gas realizations increased 186%.
Volume/Mix – Higher volumes increased earnings by $440 million, reflecting growth in Guyana and Permian and eased curtailments, partly offset by downtime, lower entitlements, and decline.
Other – All other items decreased earnings by $450 million due to divestment-related impairments and absence of prior year one-time tax impacts.
Identified Items (1) – 2Q 2022 $299 million gain on the sale of U.S. Barnett Shale assets.
(1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items.
20
| Upstream Year-to-Date Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Price – Higher realizations increased earnings by $13,830 million as average realizations for crude oil increased 69% and natural gas realizations increased 161%.
Volume/Mix – Unfavorable volume and mix effects decreased earnings by $380 million, reflecting impacts from the reduced Groningen gas production limit in Netherlands, higher downtime including the effects of weather in the first quarter, and lower entitlements due to prices, partly offset by growth in Permian and Guyana.
Other – All other items decreased earnings by $370 million due to divestment-related impairments and the absence of prior year one-time tax impacts.
Identified Items (1) – 2022 $(2,956) million loss as a result of the company's plans to discontinue operations on the Russia Sakhalin-1 project, partly offset by a gain on the sale of U.S. Barnett Shale assets.
(1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items.
21
| Upstream Operational Results | ||||||||||||||||||||
| Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Net production of crude oil, natural gas liquids, bitumen and synthetic oil (thousands of barrels daily) | ||||||||||||||||||||
| United States | 777 | 687 | 765 | 676 | ||||||||||||||||
| Canada/Other Americas | 556 | 529 | 516 | 552 | ||||||||||||||||
| Europe | 4 | 16 | 4 | 25 | ||||||||||||||||
| Africa | 224 | 254 | 240 | 254 | ||||||||||||||||
| Asia | 691 | 669 | 714 | 680 | ||||||||||||||||
| Australia/Oceania | 46 | 45 | 43 | 42 | ||||||||||||||||
| Worldwide | 2,298 | 2,200 | 2,282 | 2,229 | ||||||||||||||||
Net natural gas production available for sale (millions of cubic feet daily) | ||||||||||||||||||||
| United States | 2,699 | 2,804 | 2,738 | 2,786 | ||||||||||||||||
| Canada/Other Americas | 180 | 189 | 180 | 203 | ||||||||||||||||
| Europe | 825 | 654 | 798 | 1,026 | ||||||||||||||||
| Africa | 67 | 46 | 63 | 35 | ||||||||||||||||
| Asia | 3,320 | 3,433 | 3,330 | 3,515 | ||||||||||||||||
| Australia/Oceania | 1,515 | 1,168 | 1,421 | 1,166 | ||||||||||||||||
| Worldwide | 8,606 | 8,294 | 8,530 | 8,731 | ||||||||||||||||
Oil-equivalent production (1) (thousands of oil-equivalent barrels daily) | 3,732 | 3,582 | 3,704 | 3,684 | ||||||||||||||||
| (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. | ||||||||||||||||||||
2Q 2022 versus 2Q 2021
Liquids production – 2.3 million barrels per day increased 98 thousand barrels per day from 2Q 2021, reflecting growth in Permian and Guyana and easing government-mandated curtailments, partly offset by lower entitlements due to higher prices, higher downtime, and divestments.
Natural gas production available for sale – 8.6 billion cubic feet per day increased 312 million cubic feet per day from 2Q 2021, reflecting reduced scheduled maintenance, partly offset by lower entitlements and divestments.
YTD 2022 versus YTD 2021
Liquids production – 2.3 million barrels per day increased 53 thousand barrels per day from 2021, reflecting growth in Permian and Guyana and easing government-mandated curtailments, partly offset by lower entitlements due to higher prices, higher downtime including the effects of weather in the first quarter of 2022, and divestments.
Natural gas production available for sale – 8.5 billion cubic feet per day decreased 201 million cubic feet per day from 2021, reflecting impacts from the reduced Groningen production limit, divestments, and entitlements.
22
| Upstream Additional Information | ||||||||||||||
| (thousands of barrels daily) | Three Months Ended June 30 | Six Months Ended June 30 | ||||||||||||
Volumes reconciliation (Oil-equivalent production) (1) | ||||||||||||||
| 2021 | 3,582 | 3,684 | ||||||||||||
| Entitlements - Net Interest | (27) | (29) | ||||||||||||
| Entitlements - Price / Spend / Other | (57) | (48) | ||||||||||||
| Government Mandates | 90 | 101 | ||||||||||||
| Divestments | (28) | (46) | ||||||||||||
| Other | 172 | 42 | ||||||||||||
| 2022 | 3,732 | 3,704 | ||||||||||||
(1)Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. | ||||||||||||||
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 temporary non-operational production limits or sanctions imposed by governments, generally upon a country, sector, type or method of production.
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.
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.
23
ENERGY PRODUCTS
| Energy Products Financial Results | ||||||||||||||||||||
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Earnings (loss) (U.S. GAAP) | ||||||||||||||||||||
| United States | 2,655 | (278) | 3,144 | (510) | ||||||||||||||||
| Non-U.S. | 2,617 | (578) | 1,933 | (1,267) | ||||||||||||||||
| Total | 5,273 | (856) | 5,077 | (1,777) | ||||||||||||||||
Earnings (loss) excluding Identified Items (1) | ||||||||||||||||||||
| United States | 2,655 | (278) | 3,144 | (510) | ||||||||||||||||
| Non-U.S. | 2,617 | (578) | 1,933 | (1,267) | ||||||||||||||||
| Total | 5,273 | (856) | 5,077 | (1,777) | ||||||||||||||||
| (1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items. | ||||||||||||||||||||
Energy Products Second Quarter Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Margins – Higher margins increased earnings by $5,770 million due to improved industry refining margins and favorable derivative mark-to-market effects.
Volume/Mix – Favorable volume and mix effects increased earnings by $280 million, primarily as a result of lower scheduled maintenance and turnaround activity.
Other – All other items increased earnings by $80 million.
24
| Energy Products Year-to-Date Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Margins – Higher margins increased earnings by $5,960 million driven by an increase in industry refining margins.
Volume/Mix – Favorable volume and mix effects increased earnings by $580 million, mainly as a result of lower scheduled maintenance and turnaround activity.
Other – All other items increased earnings by $310 million, primarily due to the absence of terminal conversion impacts in the prior year.
| Energy Products Operational Results | ||||||||||||||||||||
| (thousands of barrels daily) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Refinery throughput | ||||||||||||||||||||
| United States | 1,686 | 1,532 | 1,686 | 1,532 | ||||||||||||||||
| Canada | 413 | 332 | 406 | 348 | ||||||||||||||||
| Europe | 1,164 | 1,223 | 1,179 | 1,188 | ||||||||||||||||
| Asia Pacific | 532 | 607 | 534 | 576 | ||||||||||||||||
| Other | 193 | 164 | 180 | 161 | ||||||||||||||||
| Worldwide | 3,988 | 3,858 | 3,985 | 3,805 | ||||||||||||||||
Energy Products sales (1) | ||||||||||||||||||||
| United States | 2,452 | 2,230 | 2,358 | 2,153 | ||||||||||||||||
| Non-U.S. | 2,858 | 2,776 | 2,853 | 2,766 | ||||||||||||||||
| Worldwide | 5,310 | 5,006 | 5,211 | 4,920 | ||||||||||||||||
| Gasoline, naphthas | 2,208 | 2,117 | 2,161 | 2,057 | ||||||||||||||||
| Heating oils, kerosene, diesel oils | 1,755 | 1,704 | 1,739 | 1,698 | ||||||||||||||||
| Aviation fuels | 350 | 201 | 319 | 192 | ||||||||||||||||
| Heavy fuels | 228 | 275 | 238 | 266 | ||||||||||||||||
| Other energy products | 769 | 709 | 753 | 707 | ||||||||||||||||
(1) Data reported net of purchases/sales contracts with the same counterparty. | ||||||||||||||||||||
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CHEMICAL PRODUCTS
| Chemical Products Financial Results | ||||||||||||||||||||
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Earnings (loss) (U.S. GAAP) | ||||||||||||||||||||
| United States | 625 | 1,149 | 1,395 | 1,803 | ||||||||||||||||
| Non-U.S. | 450 | 1,051 | 1,086 | 1,788 | ||||||||||||||||
| Total | 1,076 | 2,200 | 2,481 | 3,591 | ||||||||||||||||
Earnings (loss) excluding Identified Items (1) | ||||||||||||||||||||
| United States | 625 | 1,149 | 1,395 | 1,803 | ||||||||||||||||
| Non-U.S. | 450 | 1,051 | 1,086 | 1,788 | ||||||||||||||||
| Total | 1,076 | 2,200 | 2,481 | 3,591 | ||||||||||||||||
| (1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items. | ||||||||||||||||||||
Chemical Products Second Quarter Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Margins – Lower margins decreased earnings by $960 million, reflecting higher feed and energy costs only partly offset by price increases.
Volume/Mix – Higher volumes increased earnings by $40 million.
Other – All other items decreased earnings by $200 million, primarily driven by unfavorable foreign exchange, higher growth-related expenses, and increased planned maintenance.
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| Chemical Products Year-to-Date Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Margins – Lower margins decreased earnings by $910 million, reflecting higher feed and energy costs, partly offset by price increases.
Volume/Mix – Higher volumes increased earnings by $130 million, primarily due to higher U.S. sales including the start-up of the chemical complex in Corpus Christi, Texas.
Other – All other items decreased earnings by $330 million, primarily driven by higher growth-related expenses, increased planned maintenance, and unfavorable foreign exchange effects.
| Chemical Products Operational Results | ||||||||||||||||||||
| (thousands of metric tons) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Chemical Products sales (1) | ||||||||||||||||||||
| United States | 1,998 | 1,782 | 4,030 | 3,403 | ||||||||||||||||
| Non-U.S. | 2,812 | 2,949 | 5,798 | 6,093 | ||||||||||||||||
| Worldwide | 4,811 | 4,731 | 9,829 | 9,496 | ||||||||||||||||
(1) Data reported net of purchases/sales contracts with the same counterparty. | ||||||||||||||||||||
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SPECIALTY PRODUCTS
| Specialty Products Financial Results | ||||||||||||||||||||
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Earnings (loss) (U.S. GAAP) | ||||||||||||||||||||
| United States | 232 | 262 | 478 | 442 | ||||||||||||||||
| Non-U.S. | 185 | 487 | 415 | 862 | ||||||||||||||||
| Total | 417 | 750 | 893 | 1,304 | ||||||||||||||||
Earnings (loss) excluding Identified Items (1) | ||||||||||||||||||||
| United States | 232 | 262 | 478 | 442 | ||||||||||||||||
| Non-U.S. | 185 | 487 | 415 | 862 | ||||||||||||||||
| Total | 417 | 750 | 893 | 1,304 | ||||||||||||||||
| (1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items. | ||||||||||||||||||||
Specialty Products Second Quarter Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Margins – Lower margins decreased earnings by $210 million, primarily related to lower industry basestock margins.
Volume/Mix – Unfavorable volume mix effects decreased earnings by $90 million, primarily driven by higher scheduled maintenance.
Other – All other items decreased earnings by $30 million.
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| Specialty Products Year-to-Date Earnings Factor Analysis | ||||||||||||||
| (millions of dollars) | ||||||||||||||
Margins – Lower margins decreased earnings by $360 million, primarily related to lower industry basestock margins as a result of increased feed costs.
Volume/Mix – Unfavorable volume mix effects decreased earnings by $60 million driven by higher scheduled maintenance.
Other – All other items increased earnings by $10 million.
| Specialty Products Operational Results | ||||||||||||||||||||
| (thousands of metric tons) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
Specialty Products sales (1) | ||||||||||||||||||||
| United States | 590 | 495 | 1,111 | 1,005 | ||||||||||||||||
| Non-U.S. | 1,511 | 1,447 | 2,995 | 2,932 | ||||||||||||||||
| Worldwide | 2,100 | 1,942 | 4,107 | 3,936 | ||||||||||||||||
| (1) Data reported net of purchases/sales contracts with the same counterparty. | ||||||||||||||||||||
CORPORATE AND FINANCING
| Corporate and Financing Financial Results | ||||||||||||||||||||
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||||||
| Earnings (loss) (U.S. GAAP) | (286) | (588) | (980) | (1,437) | ||||||||||||||||
Identified Items (1) | — | (12) | (98) | (43) | ||||||||||||||||
Earnings (loss) excluding Identified Items (1) | (286) | (576) | (882) | (1,394) | ||||||||||||||||
| (1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items. | ||||||||||||||||||||
Corporate and Financing expenses were $286 million for the second quarter of 2022, $302 million lower than the second quarter of 2021, reflecting favorable one-time tax impacts.
Corporate and Financing expenses were $980 million for the first six months of 2022, $457 million lower than 2021.
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LIQUIDITY AND CAPITAL RESOURCES
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| Net cash provided by/(used in) | ||||||||||||||
| Operating activities | 34,751 | 18,914 | ||||||||||||
| Investing activities | (7,009) | (5,071) | ||||||||||||
| Financing activities | (15,384) | (14,807) | ||||||||||||
| Effect of exchange rate changes | (299) | 65 | ||||||||||||
| Increase/(decrease) in cash and cash equivalents | 12,059 | (899) | ||||||||||||
| Cash and cash equivalents (at end of period) | 18,861 | 3,465 | ||||||||||||
| Cash flow from operations and asset sales | ||||||||||||||
| Net cash provided by operating activities (U.S. GAAP) | 19,963 | 9,650 | 34,751 | 18,914 | ||||||||||
| Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments | 939 | 250 | 1,232 | 557 | ||||||||||
| Cash flow from operations and asset sales | 20,902 | 9,900 | 35,983 | 19,471 | ||||||||||
| 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 2022 was $20.9 billion, an increase of $11.0 billion from the comparable 2021 period primarily reflecting higher earnings.
Cash provided by operating activities totaled $34.8 billion for the first six months of 2022, $15.8 billion higher than 2021. Net income including noncontrolling interests was $24.3 billion, an increase of $16.7 billion from the prior year period. The adjustment for the noncash provision of $13.3 billion for depreciation and depletion was up $3.4 billion from 2021. Changes in operational working capital were a reduction of $1.7 billion, compared to a contribution of $1.6 billion in the prior year period. All other items net decreased cash flows by $1.2 billion in 2022 versus a reduction of $0.2 billion in 2021. See the Condensed Consolidated Statement of Cash Flows for additional details.
Investing activities for the first six months of 2022 used net cash of $7.0 billion, an increase of $1.9 billion compared to the prior year. Spending for additions to property, plant and equipment of $7.7 billion was $2.6 billion higher than 2021. Proceeds from asset sales were $1.2 billion compared to $0.6 billion in the prior year period. Net investments and advances were essentially flat with prior year.
Net cash used in financing activities was $15.4 billion in the first six months of 2022, including $6.1 billion for the purchase of 71.1 million shares of ExxonMobil stock, as part of the previously announced buyback program. This compares to net cash used in financing activities of $14.8 billion in the prior year, reflecting long-term debt repayments of $7.0 billion during the first six months of 2021.
Total debt at the end of the second quarter of 2022 was $46.9 billion compared to $47.7 billion at year-end 2021. The Corporation's debt to total capital ratio was 20.3 percent at the end of the second quarter of 2022 compared to 21.4 percent at year-end 2021. The net debt to capital ratio was 13.2 percent at the end of the second quarter, a decrease of 5.7 percentage points from year-end 2021. The Corporation's capital allocation priorities continue to be investing in advantaged projects, strengthening the balance sheet and paying a reliable dividend.
The Corporation has access to significant capacity of long-term and short-term liquidity. In addition to cash balances, commercial paper continues to provide short-term liquidity, and is reflected in "Notes and loans payable" on the Consolidated Balance Sheet. Cash and cash equivalents was $18.9 billion at the end of the second quarter of 2022. The Corporation had undrawn short-term committed lines of credit of $10.6 billion, of which $10 billion will expire without renewal in the third quarter, and undrawn long-term committed lines of credit of $0.4 billion as of second quarter 2022.
The Corporation distributed a total of $7.5 billion to shareholders in the first six months of 2022 through dividends.
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 potential for future growth and attractive current 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.
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TAXES
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| Income taxes | 6,359 | 1,526 | 9,165 | 2,322 | ||||||||||
| Effective income tax rate | 31 | % | 30 | % | 34 | % | 31 | % | ||||||
Total other taxes and duties (1) | 7,779 | 8,441 | 16,228 | 15,724 | ||||||||||
| Total | 14,138 | 9,967 | 25,393 | 18,046 | ||||||||||
(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 $14.1 billion for the second quarter of 2022, an increase of $4.2 billion from 2021. Income tax expense was $6.4 billion compared to $1.5 billion in the prior year reflecting higher commodity prices. The effective income tax rate of 31 percent compared to 30 percent in the prior year period. Total other taxes and duties decreased by $0.7 billion to $7.8 billion.
Total taxes were $25.4 billion for the first six months of 2022, an increase of $7.3 billion from 2021. Income tax expense increased by $6.8 billion to $9.2 billion reflecting higher commodity prices. The effective income tax rate of 34 percent compared to 31 percent in the prior year period primarily due to a change in mix of results in jurisdictions with varying tax rates and the impact of one-time items. Total other taxes and duties increased by $0.5 billion to $16.2 billion.
In the United States, the Corporation has various ongoing U.S. federal income tax positions at issue with the Internal Revenue Service (IRS) for tax years beginning in 2006. The Corporation filed a refund suit for tax years 2006-2009 in U.S. federal district court (District Court) with respect to the positions at issue for those years. On February 24, 2020, the Corporation received an adverse ruling on this suit. The IRS has asserted penalties associated with several of those positions. The Corporation has not recognized the penalties as an expense because the Corporation does not expect the penalties to be sustained under applicable law. On January 13, 2021, the District Court ruled that no penalties apply to the Corporation's positions in this suit. The Corporation and the government have appealed the District Court's rulings to the U.S. Court of Appeals for the Fifth Circuit (Fifth Circuit). Proceedings in the Fifth Circuit are continuing.
On March 4, 2022, the Corporation also filed a refund suit for tax years 2010-2011 in District Court with respect to the positions at issue for those years. The Corporation has not recognized asserted penalties for 2010-2011 as an expense because the Corporation does not expect the penalties to be sustained under applicable law. Unfavorable resolution of all positions at issue with the IRS would not have a material adverse effect on the Corporation’s operations or financial condition.
31
CAPITAL AND EXPLORATION EXPENDITURES
| (millions of dollars) | Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||
| Upstream (including exploration expenses) | 3,627 | 2,817 | 7,506 | 5,174 | ||||||||||
| Energy Products | 506 | 429 | 1,072 | 878 | ||||||||||
| Chemical Products | 419 | 512 | 855 | 811 | ||||||||||
| Specialty Products | 56 | 44 | 79 | 72 | ||||||||||
| Other | 1 | 1 | 1 | 1 | ||||||||||
| Total | 4,609 | 3,803 | 9,513 | 6,936 | ||||||||||
Capital and exploration expenditures in the second quarter of 2022 were $4.6 billion, up 21 percent from the second quarter of 2021.
Capital and exploration expenditures in the first six months of 2022 were $9.5 billion, up 37 percent from the first six months of 2021. The Corporation plans to invest in the range of $21 billion to $24 billion in 2022. Actual spending could vary depending on the progress of individual projects and property acquisitions.
FORWARD-LOOKING STATEMENTS
Statements related to outlooks; 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. Actual future results, including financial and operating performance; total capital expenditures and mix, including allocations of capital to low carbon solutions; cost reductions and efficiency gains, including the ability to offset inflationary pressure; plans to reduce future emissions and emissions intensity; timing and outcome of projects to capture and store CO2, produced biofuels, and use of plastic waste as recycling feedstock; timing and outcome of hydrogen projects; cash flow, dividends and shareholder returns, including the timing and amounts of share repurchases; future debt levels and credit ratings; business and project plans, timing, costs, capacities and returns; and resource recoveries and production rates 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 conditions that impact prices and differentials for our products; 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; the ultimate impacts of COVID-19, including the extent and nature of further outbreaks and the effects of government responses on people and economies; reservoir performance, including variability and timing factors applicable to unconventional resources; the 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, or costs of such projects as approved; changes in law, taxes, or regulation including environmental regulations, trade sanctions, and timely granting of governmental permits and certifications; government policies and support and market demand for low carbon technologies; war, and other political or security disturbances; opportunities for potential investments or divestments and satisfaction of applicable conditions to closing, including 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 2021 Form 10-K.
Forward-looking and other statements regarding our environmental, social and other sustainability efforts and aspirations are not an indication that these statements are necessarily material to investors or requiring disclosure in our filing with the SEC. In addition, historical, current, and forward-looking environmental, social and 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.
The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports.
32
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Information about market risks for the six months ended June 30, 2022, does not differ materially from that discussed under Item 7A of the registrant's Annual Report on Form 10-K for 2021.
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, 2022. Based on that evaluation, these officers have concluded that the Corporation’s disclosure controls and procedures are effective in ensuring that information required to be disclosed by the Corporation in the reports that it files or submits under the Securities Exchange Act of 1934, as amended, is accumulated and communicated to them in a manner that allows for timely decisions regarding required disclosures and are effective in ensuring that such information is recorded, processed, summarized and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms. There were no changes during the Corporation’s last fiscal quarter that materially affected, or are reasonably likely to materially affect, the Corporation’s internal control over financial reporting.
33
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
ExxonMobil has elected to use a $1 million threshold for disclosing environmental proceedings.
Refer to the relevant portions of Note 3 of this Quarterly Report on Form 10-Q for further information on legal proceedings.
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Issuer Purchase of Equity Securities for Quarter Ended June 30, 2022 | ||||||||||||||
| Period | Total Number of Shares Purchased(1) | Average Price Paid per Share(2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (3) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Program (Billions of dollars) | ||||||||||
| April 2022 | 13,118,849 | $85.39 | 13,118,849 | $26.8 | ||||||||||
| May 2022 | 16,117,414 | $90.83 | 16,113,008 | $25.4 | ||||||||||
| June 2022 | 15,691,398 | $94.02 | 15,691,302 | $23.9 | ||||||||||
| Total | 44,927,661 | $90.36 | 44,923,159 | |||||||||||
| (1) Includes shares withheld from participants in the company's incentive program for personal income taxes. | ||||||||||||||
| (2) In the first quarter, the average price paid per share was $78.63, which brings the full-year average price paid per share to $86.03. | ||||||||||||||
| (3) In its earnings release dated April 29, 2022, the Corporation stated that the company increased its share repurchase program from up to $10 billion to a total of up to $30 billion through 2023. Purchases in the second quarter of 2022 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 6. EXHIBITS
See Index to Exhibits of this report.
34
INDEX TO EXHIBITS
| Exhibit | Description | |||||||
| Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Executive Officer. | ||||||||
| Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Chief Financial Officer. | ||||||||
| Certification (pursuant to Securities Exchange Act Rule 13a-14(a)) by Principal Accounting Officer. | ||||||||
| Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Executive Officer. | ||||||||
| Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Chief Financial Officer. | ||||||||
| Section 1350 Certification (pursuant to Sarbanes-Oxley Section 906) by Principal Accounting Officer. | ||||||||
| 101 | Interactive Data Files (formatted as Inline XBRL). | |||||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101). | |||||||
35
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
EXXON MOBIL CORPORATION | ||||||||
Date: August 3, 2022 | By: | /s/ LEN M. FOX | ||||||
| Len M. Fox | ||||||||
| Vice President, Controller and | ||||||||
| Principal Accounting Officer | ||||||||
36
TABLE OF CONTENTS
Part I. Financial InformationItem 1. Financial StatementsNote 1. Basis Of Financial Statement PreparationNote 2. RussiaNote 3. Litigation and Other ContingenciesNote 4. Other Comprehensive Income InformationNote 5. Earnings Per ShareNote 6. Pension and Other Postretirement BenefitsNote 7. Financial Instruments and DerivativesNote 8. Disclosures About Segments and Related InformationNote 9. Divestment ActivitiesItem 2. Management's Discussion and Analysis Of Financial Condition and Results Of OperationsItem 3. Quantitative and Qualitative Disclosures About Market RiskItem 4. Controls and ProceduresPart II. Other InformationItem 1. Legal ProceedingsItem 2. Unregistered Sales Of Equity Securities and Use Of ProceedsItem 6. Exhibits