Exxon Mobil Corporation · NYSE:XOM
Exxon Mobil — Q4 2020 Earnings Presentation
44 slides from Exxon Mobil's earnings presentation, Feb 2, 2021
Slide 1: Fourth Quarter 2020 Results
FOURTH QUARTER 2020 RESULTS 2.2.21 STEPHEN LITTLETON VICE PRESIDENT, INVESTOR RELATIONS AND SECRETARYFOURTH QUARTER 2020 RESULTS 2.2.21 STEPHEN LITTLETON VICE PRESIDENT, INVESTOR RELATIONS AND SECRETARY
Slide 2: Cautionary Statement
CAUTIONARY STATEMENT • Statements of future events or conditions in this presentation or the subsequent discussion period are forward-looking statements. Actual future results, including financial and operating performance; demand growth and mix; planned capital and cash operating expense reductions
Slide 3: Developments Since Third Quarter 2020
DEVELOPMENTS SINCE THIRD QUARTER 2020 Increased gas realizations; liquids realizations in-line with 3Q, recovering through quarter Government-mandated curtailments increased to ~190 Koebd UPSTREAM Matched best-ever reliability performance Announced hydrocarbon discovery offshore Suriname Best-ever p
Slide 4: Results 4Q20 vs. 3Q20
RESULTS 4Q20 VS. 3Q20 • Earnings increased by $900 million U/S D/S CHEM C&F TOTAL excluding identified items 3Q20 GAAP Earnings / (Loss) (0.4) (0.2) 0.7 (0.7) (0.7) Non-cash inventory valuation - - 0.1 - 0.1 • Captured benefits of improving gas and LNG markets 3Q20 Earnings / (Loss) ex. Identified I
Slide 5: Earnings 4Q20 vs. 3Q20
EARNINGS 4Q20 VS. 3Q20 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Million USD • Upstream liquids growth and reduced economic curtailments improved earnings 110 • Timing of planned turnaround, maintenance and exploration drove higher expenses 570 150 • Leveraged Downstream and Chemical integration (5
Slide 6: Earnings 2020 vs. 2019
EARNINGS 2020 VS. 2019 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Billion USD 1 9.6 • Reduced cash Opex $8 billion versus 2019 − Includes ~$3 billion of structural reductions • Volume down primarily due to lower demand (14.1) • Improved reliability and product yields delivered ~$1 billion 1.0 (0.2)
Slide 7: Upstream Volumes 2020 vs. 2019
UPSTREAM VOLUMES 2020 VS. 2019 CONTRIBUTING FACTORS TO CHANGE IN VOLUMES Koebd • High-return liquids growth in Permian and Guyana 3,952 offset Norway divestment • Volumes in-line with production plan excluding Govt mandate curtailments and entitlements 60 Groningen Limits 3,761 (170) (150) 150 (80)
Slide 8: Exceeded Reduction Targets
EXCEEDED REDUCTION TARGETS CASH OPEX Billion USD -$8 billion • Exceeded reduction targets for full-year capital and 55 operating spend 11 47 Energy and • $8 billion decrease in cash Opex versus 2019 8 production taxes 44 39 • $10 billion decrease in Capex versus 2019 2019 2020 CAPEX Billion USD -$10
Slide 9: Fourth Quarter 2020 Cash Profile
FOURTH QUARTER 2020 CASH PROFILE 4Q20 2020 Beginning Cash 8.8 3.1 • Cash flow from operations improved $600 million from 3Q20, excluding working capital effects Earnings / (Loss) (20.1) (22.4) Identified items: impairment 19.3 20.1 1 • Gross debt reduced by $1.2 billion in quarter Depreciation 5.0 2
Slide 10: First Quarter 2021 Outlook
FIRST QUARTER 2021 OUTLOOK Announced government-mandated curtailments averaging ~150 Koebd UPSTREAM Production expected to be ~140 Koebd higher due to seasonal gas demand Demand levels consistent with 4Q DOWNSTREAM Higher planned turnarounds and maintenance offset with additional efficiencies Contin
Slide 11: Management Perspectives
MANAGEMENT PERSPECTIVES DARREN WOODS CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICERMANAGEMENT PERSPECTIVES DARREN WOODS CHAIRMAN OF THE BOARD AND CHIEF EXECUTIVE OFFICER
Slide 12: Focused on Shareholder Value
FOCUSED ON SHAREHOLDER VALUE • Delivering world class safety and reliability • Driving structural cost reductions • Advancing flexible portfolio of high-return, cost-advantaged investments • Maintaining strong dividend and fortified balance sheet • Reducing emissions while developing needed technolo
Slide 13: 2020 Perspective
2020 PERSPECTIVE Operational Operating cost Capex Met emission 2 excellence savings flexibility targets for 1 <0.02 LTIR >15% reduction >30% decrease 2020 Best ever workforce From reorganizations, Deferral costs offset by 25% reduction in flaring safety and reliability efficiencies, and workforce sa
Slide 14: Driving Structural Cost Efficiencies
DRIVING STRUCTURAL COST EFFICIENCIES Achieved ~$3 billion of structural reductions in 2020; $6 billion by 2023 1 CASH OPEX Billion USD • Delivered on cost reduction objectives, outperforming revised plan 44 3 • Leveraged prior reorganizations to deliver structural reductions of ~$3 billion in 2020 4
Slide 15: Maintaining Investment Optionality
MAINTAINING INVESTMENT OPTIONALITY Demonstrated ability to adjust capital spending and preserve value CAPEX 2021 – 2025 Billion USD • 2021-2025 capital program optimized to current $20 - $25 market outlook Guidance: $16 - $19 20 Flexible • Investment strategy prioritizes highest return opportunities
Slide 16: Capital Allocation Priorities 2021
CAPITAL ALLOCATION PRIORITIES Leverage portfolio flexibility to sustain the dividend 1,2 2021 ESTIMATED SOURCES AND USES OF CASH Billion USD • Prioritizes Guyana, Brazil, Permian, and Chemical By Brent price, with performance products 10yr low Downstream Guidance: & Chemical margins $16 - $19 $55/bb
Slide 17: Capital Allocation Priorities 2025
CAPITAL ALLOCATION PRIORITIES Leverage portfolio flexibility to sustain the dividend 1,2 2025 ESTIMATED SOURCES AND USES OF CASH Billion USD • Prioritizes Guyana, Brazil, Permian, and Chemical By Brent price, with performance products 10yr avg. Downstream & Chemical margins Guidance: $55/bbl $20 - $
Slide 18: Investments Support Cash Flow Growth
INVESTMENTS SUPPORT CASH FLOW GROWTH 1 Capital expenditures grow cash flow/value through the cycle 2 OPERATING CASH FLOW FROM 2021 – 2025 START-UPS • Cash flow growth driven by investment program, reduced operating expenses, and improved market ~40% of total • 2021 to 2025 project start-ups drive mo
Slide 19: Industry-Leading Investments
INDUSTRY-LEADING INVESTMENTS Upstream capital program prioritizing low cost-of-supply opportunities 1,2 UPSTREAM INVESTMENTS Brent $/bbl required to generate the cost-of-supply plus 10% return 45 • Industry-leading investments focus on highest- return, lowest cost-of-supply opportunities $40/bbl Bre
Slide 20: Strengthening Permian Performance
STRENGTHENING PERMIAN PERFORMANCE Significantly improving operating and development metrics 1 DRILLING RATES Lateral feet per day; indexed to 2018 150% • Permian development exceeding expectations • 2020 drilling rates 50% better than plan − >20% better than 2019 75% 2018 2019 2020 • Drilling and co
Slide 21: Flexible Permian Development Plan
FLEXIBLE PERMIAN DEVELOPMENT PLAN Options to reduce spend with market changes 1 PERMIAN PRODUCTION Koebd • Flexible short-cycle Permian development 800 ~$60/bbl • Reduced 2020 Capex ~35% below plan Production − 2020 volumes on plan, ~100 Koebd above 2019 range ~$50/bbl • Pace of investment set by: 4
Slide 22: Delivering Capital Allocation Priorities
DELIVERING CAPITAL ALLOCATION PRIORITIES • Focused capital program delivers exceptional returns and price resiliency • Restructured organization driving significant efficiencies • Advantaged projects deliver low-cost supply and near-term cash flow • Flexibility to efficiently respond to market devel
Slide 23: Delivering Lower Emissions
DELIVERING LOWER EMISSIONS Committed to addressing risk of climate change Announced Operated GHG Support Research, develop, reduction plans to emissions commercialize Paris Agreement 2 2025 -6% since 2016 >$3 Billion Absolute Upstream GHG Absolute emissions have Lower-emission solutions: Engaging in
Slide 24: Lowering Emissions
LOWERING EMISSIONS Committed to reducing emissions 1 EXXONMOBIL AND SOCIETY’S EMISSIONS Indexed to 2016; % • Achieved 6% absolute GHG reduction since Paris 3 105 Agreement in 2016 Non-OECD, +4% Global, +2% • Reducing intensity across businesses results in ~11 100 2 to 13% lower emissions OECD, -1% •
Slide 25: Reductions Consistent with Paris Agreement
REDUCTIONS CONSISTENT WITH PARIS AGREEMENT Plans provide affordable and reliable energy while minimizing environmental impacts 1,2,3 EXXONMOBIL AND SOCIETY’S EMISSIONS Percent reduction versus 2016 1 Society’s emissions Paris submissions (estimated 2016 0.9 Nationally Determined Contributions) 0% 0.
Slide 26: Carbon Capture Is Critical for a 2°C Pathway
CARBON CAPTURE IS CRITICAL FOR A 2°C PATHWAY CCS mitigates emissions at an affordable cost 1 PROJECTED CO REDUCTIONS BY TECHNOLOGY FROM 2019 - 2040 2 Billion tonnes 0 5 10 15 20 25• IEA/IPCC assessment of carbon capture: Solar 2 − Grows to 10% of energy system by 2040 Wind 3 − Mitigates 15% of globa
Slide 27: ExxonMobil Is the Global Leader in CCS
EXXONMOBIL IS THE GLOBAL LEADER IN CCS More than 30 years of CCS experience • Leveraging ExxonMobil’s strengths to significantly 1 CUMULATIVE CO CAPTURE VOLUME SINCE 1970 2 advance CCS: Million tonnes − 30+ years of operating experience − Process innovation Remaining 44 − Project execution companies
Slide 28: Focused on Shareholder Value
FOCUSED ON SHAREHOLDER VALUE • Delivering world class safety and reliability • Driving structural cost reductions • Advancing flexible portfolio of high-return, cost-advantaged investments • Maintaining strong dividend and fortified balance sheet • Reducing emissions while developing needed technolo
Slide 29: Q&A
Q&A Mark your calendars for ExxonMobil Investor Day Webcast March 3, 2021 8:00 a.m. Central TimeQ&A Mark your calendars for ExxonMobil Investor Day Webcast March 3, 2021 8:00 a.m. Central Time
Slide 30: Earnings Potential
EARNINGS POTENTIAL Improvements in price and margins generate material cash flow upside DOWNSTREAM AND CHEMICAL ANNUAL EARNINGS SENSITIVITY FROM 6 PRICES / MARGINS 4Q 2020 MARGINS 2010 - 2020 Billion USD ~10 Crude¹ Natural gas² Downstream Chemical ($/bbl) ($/mbtu) margins³ margins⁴ ($/bbl) ($/tonne)
Slide 31: Upstream 4Q20 vs. 3Q20
UPSTREAM 4Q20 VS. 3Q20 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Million USD 745 • Captured benefits of improving gas and LNG markets 400 • Strategic investment in Guyana, reduced economic (90) 160 curtailments and lower maintenance increased earnings • Higher expenses due to timing of exploration
Slide 32: Upstream Volumes 4Q20 vs. 3Q20
UPSTREAM VOLUMES 4Q20 VS. 3Q20 CONTRIBUTING FACTORS TO CHANGE IN VOLUMES Koebd • Reduced economic curtailment offset by higher government-mandated curtailments Groningen 3,689 Limits (35) 85 3,672 • Lower entitlements with higher prices (5) • Higher European seasonal gas demand (90) 60 • Increased l
Slide 33: Downstream 4Q20 vs. 3Q20
DOWNSTREAM 4Q20 VS. 3Q20 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Million USD • Lower margins include the impact of unsettled mark-to-market derivatives • Higher planned turnaround and maintenance activity (240) • Strong manufacturing product yields and mix from (430) recent investments (691) (40)
Slide 34: Chemical 4Q20 vs. 3Q20
CHEMICAL 4Q20 VS. 3Q20 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Million USD 30 • Strong operational performance and improved (80) margins from packaging strength and automotive / durable market recovery (80) 713 300 • Higher planned maintenance 546 • Unfavorable year-end LIFO impact 3Q20 ex. Margi
Slide 35: Upstream 2020 vs. 2019
UPSTREAM 2020 VS. 2019 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Million USD • Unprecedented demand destruction significantly 10,008 impacted liquids and gas realizations • High-return liquids growth in Permian and Guyana partially offset divestments, curtailments, and Groningen limits • Structural
Slide 36: Downstream 2020 vs. 2019
DOWNSTREAM 2020 VS. 2019 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Million USD • Unprecedented demand destruction significantly 2,332 impacted refining margins • Contribution from trading, optimization, and marketing helped mitigate margin loss • Significant demand loss driven by pandemic (390) 990
Slide 37: Chemical 2020 vs. 2019
CHEMICAL 2020 VS. 2019 CONTRIBUTING FACTORS TO CHANGE IN EARNINGS Million USD 2,077 • Strong reliability and lower feed costs improved margins 710 • COVID impacted sales volumes across multiple (150) businesses 930 • Delivered aggressive cost reduction through supply chain efficiencies, contractor m
Slide 38: Supplemental Information: Identified Items Reconciliation
SUPPLEMENTAL INFORMATION IDENTIFIED ITEMS RECONCILIATION FOURTH QUARTER THIRD QUARTER TWELVE MONTHS 2020 2019 2020 2020 2019 Earnings / (Loss) U.S. GAAP (20.1) 5.7 (0.7) (22.4) 14.3 Identified Items Included in Earnings / (Loss) Noncash inventory valuation - lower of cost or market - - 0.1 (0.1) - I
Slide 39: Supplemental Information: Upstream Volume Factor Analysis
SUPPLEMENTAL INFORMATION “Curtailments,” as used on slides 7 and 32, includes both (1) government mandates and (2) economic curtailments. Government mandates are shown as a separate category below. Economic curtailments are included below as part of the “Demand / Other” category. 1 UPSTREAM VOLUME F
Slide 40: Supplemental Information: Footnotes
SUPPLEMENTAL INFORMATION Slide 4 Slide 17 1) Period-to-period change in earnings as a result of fair value accounting for 1) 2025 Available Cash from Operations assumes Downstream and Chemical unsettled derivatives. at the average of the annual margins from 2010 – 2019. See definitions on page 43. 2
Slide 41: Supplemental Information: Footnotes
SUPPLEMENTAL INFORMATION Slide 20 Slide 24 1) Midland and Delaware only, including all areas, formations and lateral lengths. 1) EM GHG emissions, absolute (Operated CO -equivalent Scope 1 & 2) from 2 2016 to 2019 and preliminary estimate for 2020 compared to society’s energy-related CO based on EM
Slide 42: Supplemental Information: Footnotes
SUPPLEMENTAL INFORMATION Slide 26 Slide 30 1) IEA World Energy Outlook 2020. Comparison of IEA Sustainable Development 1) Source: S&P Global Platts. Scenario vs. IEA Stated Policies Scenario. 2) Source: ICE. Equal weighting of Henry Hub and NBP. 2) Average across IPCC’s 74 Lower 2°C scenarios in IPC
Slide 43: Supplemental Information: Definitions
SUPPLEMENTAL INFORMATION Definitions Available Cash from Operations provides an indication of cash flow available to fund shareholder distributions, capex, and debt reduction and is calculated as the sum of (1) net cash provided by operating activities and (2) net cash used in investing activities,
Slide 44: Important Additional Information Regarding Proxy Solicitation
Important Additional Information Regarding Proxy Solicitation Exxon Mobil Corporation (“ExxonMobil”) intends to file a proxy statement and associated BLUE proxy card with the U.S. Securities and Exchange Commission (the “SEC”) in connection with the solicitation of proxies for ExxonMobil’s 2021 Annu