Exxon Mobil Corporation · NYSE:XOM
Exxon Mobil — Investor Day (March 2005)
69 slides from Exxon Mobil's investor day presentation, Mar 15, 2005
Slide 1: Analyst Meeting
Taking on the world’s toughest energy challenges. TM Analyst Meeting New York March 9, 2005
Slide 2: Cautionary Statement
Cautionary Statement Forward-Looking Statements. Outlooks, projections, estimates, targets, and business plans in this presentation are forward-looking statements. Actual future results, including demand growth and supply mix; ExxonMobil’s own production growth and mix; resource recoveries; project
Slide 3: 2004—Record Results
2004—Record Results Record safety performance Record financial performance – Net Income $25.3 B – ROCE 23.8 % – Cash flow from Operations and Asset Sales $43.3 B Cash Returned to Shareholders $14.9 B Capex $14.9 B
Slide 4: 2004—Record Results
2004—Record Results Earnings $B 30 25 20 15 10 5 0 ‘00 ‘01 ‘02 ‘03 ‘04 Chemical Downstream Upstream Net Income Record results in all business lines Industry-leading results across the cycle Building competitive advantage
Slide 5: Consistent Long-Term Approach
Consistent Long-Term Approach Leadership, discipline, and long-term perspective Core values established in our culture Commitment to highest ethical standards Transparent and straightforward Not easily duplicated Disciplined Investment Operational Excellence Growth in Shareholder Value Industry Lead
Slide 6: Global Functional Organization
Global Functional Organization Exxon Mobil Corporation Upstream Development Exploration Gas & Power Marketing Production Upstream Research Company Downstream Fuels Marketing Lubricants & Specialties Refining & Supply Downstream Research & Engineering Company Chemical Basic Chemicals and Intermediate
Slide 7: Capitalizing on Technology
Capitalizing on Technology Expenditures* $M 700 600 500 400 300 200 100 0 XOM RDS BP CVX XOM ‘99-’03 Avg ‘04 * Based on SEC definition Business Engagement Global Implementation Competitive Advantage Focused R&D Differentiated Solutions Identification of Promising Emerging Technology Scientific Resea
Slide 8: Safety Leadership—'Nobody Gets Hurt'
Safety Leadership—‘Nobody Gets Hurt’ Safety—Lost Time Incident Rate (Incidents per 200k hours) 0.5 0.4 0.3 0.2 0.1 0.0 ‘00 ‘01 ‘02 ‘03 ‘04 U. S. Petroleum Industry Benchmark Employee Contractor
Slide 9: Cost Control and Productivity
Cost Control and Productivity Cash Operating Costs $B 40 30 20 10 0 CPI ‘00 ‘01 ‘02 ‘03 04 Cash Operating Costs at 2004 Forex & Energy price * Workforce ‘000s 105 95 85 75 65 ‘00 ‘01 ‘02 ‘03 ‘04 More than $1B in cost efficiencies in 2004 Another $1B expected in 2005 Offsetting inflation and new busi
Slide 10: Industry-Leading Cash Flow Generation
Industry-Leading Cash Flow Generation Annual Cash Flow $B ‘00 ‘01 ‘02 ‘03 ‘04 Asset Sales Operating Cash Capturing the upside Average operating cash flow of more than $27B over past five years Long-term approach appropriate in cyclical business
Slide 11: Superior Shareholder Distributions
Superior Shareholder Distributions Share Purchases* $B 2.5 2.0 1.5 1.0 0.5 0.0 1Q 2Q 3Q 4Q1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q ‘01 ‘02 ‘03 ‘04 XOM RDS BP CVX * In excess of dilution Shares Outstanding* % 100 98 96 94 92 ‘00 ‘01 ‘02 ‘03 ‘04 CVX BP RDS XOM * Average annual fully-diluted shares calculat
Slide 12: Superior Shareholder Distributions
Superior Shareholder Distributions Cumulative Distributions $B 60 50 40 30 20 10 0 ‘00 ‘01 ‘02 ‘03 ‘04 Share Purchases* Dividends * In excess of dilution Distributed $56 billion in last 5 years Paid dividends for more than 100 years Increased the dividend every year for the last 22 years Balance dis
Slide 13: Investing in Profitable Opportunities
Investing in Profitable Opportunities Capex by Business Line $B 20 15 10 5 0 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 Estimate Chemical / Other Downstream Upstream Planning Range (Total) $B 20 15 10 5 0 ‘07-’10 Average Growing GTL Investments Estimate
Slide 14: Capital Stewardship
Capital Stewardship 5-Year Cumulative Divestments* $B 7 6 5 4 3 2 1 0 ‘00 ‘01 ‘02 ‘03 ‘04 Chemical Downstream Upstream Coal & Minerals * Net book value of asset sales excluding mandated divestments Rigorous management process Maximum shareholder value Cash flow totals $9.2 billion Positive earnings
Slide 15: Capital Discipline
Capital Discipline 5-Year Cumulative Write-Offs* $B 20 15 10 5 0 Cumulative ExxonMobil write-offs BP RDS CVX ‘00 ‘01 ‘02 ‘03 ‘04 * Calculated from public information on a consistent before-tax basis ExxonMobil’s strong asset base Large portions of competitor capital employed written-off Measure of q
Slide 16: Sustained Competitive Advantage
Sustained Competitive Advantage 5-Year Cumulative Write-Offs* $B 20 15 10 5 0 ‘00 ‘01 ‘02 ‘03 ‘04 Cumulative ExxonMobil write-offs BP RDS CVX * Calculated from public information on a consistent before-tax basis 5-Year Rolling Average ROCE* % 20 18 16 14 12 10 8 6 ExxonMobil RDS BP CVX ‘00 ‘01 ‘02 ‘
Slide 17: Upstream
Upstream 2004 Highlights Record Earnings $16.7 B ROCE 33 % Production Volumes 4.2 MOEBD Major Project Start-ups 8 Resource Adds 2.9 BOEB Proved Reserve Adds (1) 2.0 BOEB Reserve Replacement (1) 125 % (1) Excluding single-day, year-end pricing and asset sales
Slide 18: Upstream
Upstream Record Results 2000-04 Net Income per Barrel* $/OEB 12.0 10.0 8.0 6.0 4.0 XOM RDS BP CVX TOT * Calculated on a consistent basis using public information CVX excluding gains on asset sales Commitment to Technology Investment Selectivity Execution Excellence Cost Efficiency
Slide 19: Upstream
Upstream Upstream Strategies Identify and pursue all attractive exploration opportunities Invest in projects that deliver superior returns Maximize profitability of existing oil and gas production Capitalize on growing natural gas and power markets
Slide 20: Upstream
Upstream Growing Resource Base Total Resource Base 73 BOEB 80 40 0 YE ‘04 Asia Pacific Middle East Caspian Africa Europe Americas ‘00-‘04 ‘04 Avg Resource Additions (BOEB) 2.9 2.4 Finding Costs ($/OEB) 0.44 0.58 Continued focus on high potential areas
Slide 21: Upstream
Upstream Pursuing and Securing Resources Norway Canada Qatar Madagascar Congo Brazil Colombia Gulf of Mexico Nigeria/Sao Tomé Principé Countries with Exploration Acreage 2004/2005 Captures: Frontier Exploration Established Exploration Discovered Undeveloped
Slide 22: Upstream
Upstream Diverse Industry Resource Opportunities Conventional Arctic Deepwater High Pressure/High Temperature Heavy Oil, Oil Sands, and Tight Gas
Slide 23: Upstream
Upstream Proved Reserves Continue to Grow Proved Reserves by Region BOEB 25 20 15 10 5 0 YE ‘04 Asia Pacific Middle East Caspian Africa Europe Americas ‘00-‘04 ‘04 Avg Reserve Additions (BOEB)* 2.0 1.8 Reserve Replacement (%)* 125 115 * Excluding single-day, year-end pricing and asset sales
Slide 24: Upstream
Upstream Global Development Portfolio Cumulative Volumes Contribution from ‘99-‘04 Major Start-ups BOEB (Net) 4 3 2 1 0 ‘99 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 Net Project Capex $B 15 10 5 0 Americas Africa Middle East Russia/Caspian Europe/Asia Pacific Current Projects in Designing and Impl
Slide 25: Upstream
Upstream Execution Excellence: Deepwater West Africa Development Cost Gross $/OEB 9 6 3 0 Angola Nigeria ExxonMobil Operated Operated by Others Well Completion Success % Success 100 50 0 West Africa Creating greater value Applying best technology Utilizing global functional capability
Slide 26: Upstream
Upstream Execution Excellence: Angola Producing Developing Future Developments Xikomba Kizomba C Kizomba B Kizomba A Kizomba Kizomba ‘A’ sets record for fastest cycle time and largest FPSO Kizomba ‘B’ start-up in 2005, 5 months faster than ‘A’ Kizomba ‘C’ progressing towards 2007 start-up Benefiting
Slide 27: Upstream
Upstream Execution Excellence: Russia Mongolia Sakhalin—1 Chayvo start-up in 2005 Arctic expertise World-class horizontal wells Increase gas sales to 1 BCFD with export Develop Odoptu and Arkutun-Dagi Fields Odoptu Chayvo and Arkutun-Dagi Fields Oil Pipeline Under Construction Gas Pipelines Existing
Slide 28: Upstream
Upstream Developing New Resources Unit Cost $/OEB Annual Project Capex $B (Net) Unit Development Cost* 4 3 2 1 0 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 6 4 2 0 *Gross, full portfolio Commitment to technology Global functional organization Broad, diverse portfolio Execution excellence
Slide 29: Upstream
Upstream Maximize Profitability of Existing Production 2004 Production by Region kOEBD 5000 4000 3000 2000 1000 0 Caspian Middle East Africa Asia Pacific Europe Americas Countries with Existing XOM Production
Slide 30: Upstream
Upstream Maximize Profitability from Existing Production Capturing Value Across the Cycle Normalized Earnings (2000-2004) $/BBL 14 12 10 8 6 4 2 0 10 20 30 40 50 R2 = 0.96 Production-Weighted Marker Price ($) 2004 Production by Region kOEBD 5000 4000 3000 2000 1000 0 Caspian Middle East Africa Asia
Slide 31: Upstream
Upstream Maximize Profitability: North Sea/Europe Downtime* % 10 8 6 4 2 ‘01 ‘02 ‘03 ‘04 Leveraging infrastructure to develop additional reserves Maximizing late-life field value Selective development and exploration * Operated Liquids North Sea Njord Kristin Ormen Lange Statfjord Late Life Fram Eas
Slide 32: Upstream
Upstream Maximize Profitability: Asset Management Major 2004 Divestments and Trades Western Canada Rockies West Texas Gulf of Mexico Delhi Divestments & Trades* $B/Yr 1.5 1.0 0.5 0.0 ‘00 ‘01 ‘02 ‘03 ‘04 Production kOEBD 1 10 5 10 55 Rigorous, disciplined process Achieve value for lower profitability
Slide 33: Upstream
Upstream Growing Gas and Power Opportunities Alaska Mackenzie North Sea Qatar Nigeria Angola Sakhalin-1 - Hong Kong Arun PNG Greater Gorgon / Jansz XOM-Existing LNG LNG Opportunities Pipeline-Gas Opportunities Power Opportunities Gas-to-Liquids XOM Active Terminal Development Countries with XOM Mark
Slide 34: Upstream
Upstream Well-Positioned: United States and Canada Estimated Supply Growth BCFD 30 25 20 15 10 5 0 ‘05 ‘10 ‘15 ‘20 Arctic Other Domestic LNG Arctic Gas Alaska North Slope Mackenzie Gas project Other Domestic Tight Gas GOM Deep Shelf LNG Progressing regas terminals Advanced trains with Qatar Petroleu
Slide 35: Upstream
Upstream Capitalize on Growing Gas Markets Large Scale LNG Projects Gross MTA 70 60 50 40 30 20 10 0 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 Gross BCFD 10 8 6 4 2 0 Gorgon/Jansz Train 2 RG Train 7 Angola LNG Train 1 Gorgon/Jansz Train 1 QG Train 5 RG Train 6 QG Train 4 RG Train 5 RG Train 4 RG Train 3 RG 1-
Slide 36: Upstream
Upstream Well-Positioned: Europe Estimated Supply Growth BCFD 60 50 40 30 20 10 0 ‘05 ‘10 ‘15 ‘20 LNG Russia/Caspian New Pipeline New Domestic Supply RasGas Grows Continental Europe Presence Italy—first offshore regas terminal Zeebrugge—leveraging third-party infrastructure Qatargas II Sets New Benc
Slide 37: Upstream
Upstream Delivering Profitable Growth MOEBD 5 4 3 2 1 0 ‘04 ‘06 ‘08 ‘10 Russia/Caspian Africa Europe Americas Middle East Asia Pacific Result of robust inventory and strong processes Geographically diverse Enabled by functional expertise, integrated and leveraged worldwide Delivering on our strategi
Slide 38: Upstream
Upstream Industry-Leading Performance 2000-04 Return on Capital Employed* % 35 30 25 20 15 10 5 0 XOM RDS BP CVX TOT *Calculated on a consistent basis with ExxonMobil, based on public information. Competitor information estimated for 2004. Industry’s largest and highest quality asset base Rigorous i
Slide 39: Downstream
Downstream 2004 Highlights Record $5.7B earnings, $7.7B cash generation ROCE 21% Refinery throughput +4% Petroleum product sales +3% Operating excellence - Best-ever safety - Best-ever reliability - Best-ever energy efficiency More than $1B “self-help” captured
Slide 40: Downstream
Downstream Business Strategies Global Scale and Integration Margin Enhancement Operating Cost Efficiency Capital Discipline Refining & Supply Fuels Marketing Lubricants & Specialties
Slide 41: Downstream
Downstream “Self-Help” Advantages $1.2B External Factors “Self-Help” Margin Enhancements Op cost Efficiencies $5.7B
Slide 42: Refining and Supply
Refining and Supply 2004 Overview Global Scale 45 refineries in 25 countries & Integration Larger, more conversion, more integration than industry average Margin Enhancement Captured additional $0.5B AT margin Technology advancements Positioned for growth in Asia Pacific Cost Efficiency Industry-lea
Slide 43: Refining and Supply
Refining and Supply Structural Advantages Configuration % vs. Industry 80 60 40 20 0 Avg. Size Conversion Integration Industry Avg. XOM RDS / BP Equity Capacity MBD 6 4 2 0 XOM RDS BP Distillation Conversion Source: Oil and Gas Journal
Slide 44: Refining and Supply
Refining and Supply Asset Utilization Utilization 1998=100 102 100 98 96 ‘98 ‘00 ‘02 ‘04 XOM Industry Maintenance Cost & Availability Cost 1998=100 120 100 80 ‘98 ‘00 ‘02 ‘04 Availability Cost Availability 1998=100 101 100 99 Source: Solomon Data ; ‘04 Company estimate Industry-leading reliability T
Slide 45: Refining and Supply
Refining and Supply Operating Efficiency Cash Operating Costs 1998=100 90 80 ‘98 ‘00 ‘02 ‘04 XOM Industry Energy & Personnel 1998=100 95 90 Personnel Energy ‘98 ‘00 ‘02 ‘04 Source: Solomon Data ; ‘04 Company estimate Lower cash opex Continued improvement Disciplined Global Energy Management System C
Slide 46: Refining and Supply
Refining and Supply Margin Enhancement Conversion Capacity Growth 1998=100 105 100 ‘98 ‘00 ‘02 ‘04 Molecule Management Prize $M/Yr 500 100 250 125 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 On track to capture ~ $500M prize per year Technology advancements Focused investments Molecular fingerprinting Process model
Slide 47: Fuels Marketing
Fuels Marketing 2004 Overview Global Scale Retail, Industrial & Wholesale, Aviation, Marine & Integration 100 countries on 6 continents Margin Enhancement Disciplined site selection and operation Non-fuels income up $30M Cost Efficiency “Self-help” opex reductions of $200M Consolidating support cent
Slide 48: Fuels Marketing
Fuels Marketing Operating Efficiency 2000=100 100 85 70 ‘00 ‘01 ‘02 ‘03 ‘04 Cumulative Opex Efficiencies Regular Employees $M 1200 600 0 Capital Discipline 2000=100 Total Retail Sites 100 85 70 ‘00 ‘01 ‘02 ‘03 ‘04 Functional organization Common systems / processes Centralized support Prioritized and
Slide 49: Fuels Marketing
Fuels Marketing Retail Competitiveness U.S. Breakeven Fuels Margin 2000=100 90 80 ‘00 ‘01 ‘02 ‘03 ‘04 Lower on-site opex Higher non-fuels income U.S. Focus Market Performance Before=100 Before After 200 100 0 Market Volume Convenience Effectiveness Sales Rigorous site selection Customer focused offe
Slide 50: Lubricants and Specialties
Lubricants and Specialties 2004 Overview Global Scale Largest basestock supplier & Integration 98% integrated with Refining Growing position with global brands Margin Enhancement Double-digit Mobil 1 growth Double-digit growth in emerging markets Strategic Global Alliances Cost Efficiency Cost-to-se
Slide 51: Lubricants and Specialties
Lubricants and Specialties Margin Enhancement Synthetic Lubes Sales Growth 2000=100 125 100 ‘00 ‘01 ‘02 ‘03 ‘04 ExxonMobil Industry* * ExxonMobil estimates Mobil 1 leadership Technology advantage OEM endorsements Finished Lubes Sales Growth Emerging Markets 2000=100 160 140 120 100 80 ‘00 ‘01 ‘02 ‘0
Slide 52: Lubricants and Specialties
Lubricants and Specialties Operating Efficiency 2000=100 100 75 50 25 Product Formulations Blend Plants ‘00 ‘01 ‘02 ‘03 ‘04 Optimizing product offer Improving blend plant efficiency Leveraging best practices Capital Employed 2000=100 100 90 80 70 ‘00 ‘01 ‘02 ‘03 ‘04 Decreasing inventory Reducing net
Slide 53: Downstream
Downstream 2004 Summary Capital Employed* $B 40 20 0 XOM RDS BP ‘00 ‘04 ‘00 ‘04* ‘00 ‘04* Reported Net Income $B 8 6 4 2 0 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 Return on Capital Employed* % 25 20 15 10 5 0 ‘00 ‘04 ‘00 ‘04* ‘00 ‘04* *Calculated on a consistent basis with ExxonMobil, based on public information. C
Slide 54: Chemical
Chemical 2004 Highlights Record earnings of $3.4B, ROCE of 23% - Global coverage - Feedstock and integration advantage - Improved industry conditions Record sales volume, up 5% versus 2003 Capex of $690M - High return efficiency projects - Low-cost expansions - Specialty business growth
Slide 55: Chemical
Chemical Industry Outlook The Industry Cycle* Polyethylene, Polypropylene, Paraxylene MT 200 150 100 50 0 Capacity Utilization Demand ‘90 ‘95 ‘00 ‘05 ‘10 % 92 88 84 80 76 * ExxonMobil Estimates Margin Trends* 2004 $/Ton 1000 500 0 PE PX ‘90 ‘95 ‘00 ‘04 * ExxonMobil Estimates
Slide 56: Chemical
Chemical Business Strategies Long-term strategy built on ExxonMobil’s core competencies Unique portfolio of global integrated businesses Strong synergies with upstream and downstream operations Technology leadership Focus on cost management, reliability and efficiencies Disciplined investment in adv
Slide 57: Chemical
Chemical Exceptional Mix Business Mix Earnings, $B 4.0 3.0 2.0 1.0 0.0 Cyclical Specialty ‘95 ‘00 ‘04 Geographic Mix Sales volume, MT 14 10 6 2 1998 2004 Americas Europe Asia / MEAF
Slide 58: Chemical
Chemical Competitive Advantages Site Integration Products From Advantaged Feedstocks Finished products from advantaged raw materials Ethylene 2001=100 120 100 ‘01 ‘02 ‘03 ‘04 Aromatics 2001=100 140 120 100 ‘01 ‘02 ‘03 ‘04 Integrated Non-Integrated
Slide 59: Chemical
Chemical Competitive Advantage Technology Lower Cost Processes LRT-2 furnaces High pressure PE Advantaged Feedstocks Heavy feeds PXMax Higher Value Products Nexxstar Santoprene
Slide 60: Chemical
Chemical Supply Advantage Reliability Gains MT vs 2001 1.5 1.0 0.5 0.0 ‘02 ‘03 ‘04 Manufacturing excellence Reliability Efficiencies Low-cost expansions Supply Optimization Intra and inter-regional supply chain optimization Advantaged supply points Global marketing and sales presence Global optimiza
Slide 61: Chemical
Chemical Maximizing Returns Premium Products Volume 2002=100 ‘02 ‘03 ‘04 Productivity Sales / Workforce 2001=100 120 110 100 ‘01 ‘02 ‘03 ‘04 Market focus and customer needs segmentation Growth of premium products Technology advantage Product application expertise Manufacturing improvements Productiv
Slide 62: Chemical
Chemical Growth Opportunities Major Projects Jose Ras Laffan Fujian Singapore Ethane Liquids Low-cost expansions - Added half of a steam cracker since 2001 Specialty Business growth Major projects strategically located - Feedstock - Integration - Market access
Slide 63: Chemical
Chemical Delivering Superior Returns Capital Employed* $B 30 20 10 0 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 XOM RDS BP CVX Dow Reported Net Income $B 4 2 0 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 Return on Capital Employed* % 30 20 10 0 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 ‘00 ‘04 *Calculated on a consi
Slide 64: Business Model
Business Model ExxonMobil Approach DisciplinedInvestment Growth in Shareholder Value Operational Excellence Industry Leading Returns Superior Cash Flow
Slide 65: Long-Term Perspective
Long-Term Perspective Industry driven by long-term trends Evolving LNG market Key levers for long-term success in refining Seeing past the cycle in Chemical
Slide 66: Structural Advantage
Structural Advantage Global Functional Organization Strongest suite of proprietary technologies Industry-leading resource base Unmatched financial flexibility Integration of refining and chemical assets Unparalleled optimization capability
Slide 67: Growing Advantage
Growing Advantage Changing nature of market plays to ExxonMobil’s strengths Consistent rapid improvement Leverage from technology Withdrawal of competitors from key markets and business lines
Slide 68: Long-Term Advantage for Shareholders
Long-Term Advantage for Shareholders 5-Year Rolling Average ROCE* % 20 18 16 14 12 10 8 6 ‘00 ‘01 ‘02 ‘03 ‘04 ExxonMobil RDS BP CVX 20-Year Annualized Total Return vs. Volatility of Returns Lower Volatility Higher Volatility % 14 18 22 26 S&P 500 10% 12% 14% 16% 18% Lower Return Higher Return *Calcu
Slide 69: Long-Term Advantage for Shareholders
Long-Term Advantage for Shareholders 20-Year Total Market Capital $B 400 350 300 250 200 150 100 50 0 ‘84 ‘86 ‘88 ‘90 ‘92 ‘94 ‘96 ‘98 ‘00 ‘02 ‘04 ExxonMobil RDS BP CVX * Total market capital at year-end. Pre-merger figures are for XON, BP, and CHV.