ExxonMobil Announces Full-Year 2022 Results

• Delivered industry-leading 2022 earnings, cash flow from operations, total shareholder return, and return on capital employed ¹
• Generated earnings of $55.7 billion and $76.8 billion of cash flow from operating activities in 2022 by leveraging an advantaged portfolio and delivering strong operational performance
• Increased year-over-year Guyana and Permian production by over 30%
• Achieved best-ever annual refining throughput in North America and the highest globally since 2012 ²
• Operated Permian assets achieved zero routine flaring as of year-end 2022 ³
• Started up one of the largest advanced recycling facilities in North America, capable of processing more than 80 million pounds of plastic waste per year

IRVING, Texas--(BUSINESS WIRE)-- Exxon Mobil Corporation (NYSE:XOM):

Exxon Mobil Corporation today announced fourth-quarter 2022 earnings of $12.8 billion, or $3.09 per share assuming dilution, resulting in full-year earnings of $55.7 billion, or $13.26 per share assuming dilution. Fourth-quarter results included unfavorable identified items of $1.3 billion associated with additional European taxes on the energy sector and asset impairments, partly offset by one-time adjustments related to the Sakhalin-1 expropriation. Capital and exploration expenditures were $7.5 billion in the fourth quarter, bringing full-year 2022 investments to $22.7 billion, consistent with our guidance.

“The hard work and commitment of our people enabled us to deliver industry-leading operating and financial results and shareholder returns in 2022,” said Darren Woods, chairman and chief executive officer.

“While our results clearly benefited from a favorable market, the counter-cyclical investments we made before and during the pandemic provided the energy and products people needed as economies began recovering and supplies became tight. We leaned in when others leaned out. Our plan for 2023 calls for further progress on our strategic objectives, which include leading the industry in safety, operating, and financial performance. We will continue to invest in our advantaged projects to deliver profitable growth, help meet society’s growing needs, and reduce emissions in our operations, while providing innovative solutions that help others reduce theirs.”

Full-year Financial Highlights

• Full-year 2022 earnings were $55.7 billion compared with $23.0 billion in 2021, an increase of $32.7 billion. Identified items unfavorably impacted earnings by $3.4 billion mainly from Sakhalin-1 impairments in the first quarter. Earnings excluding these identified items were $59.1 billion, an increase of $36.1 billion from prior year.
• Other factors impacting results were price and margin improvements driven by recovering demand and tight supply, the favorable mark-to-market impact of unsettled derivatives, and volume increases on strong refining throughput and growth of advantaged assets. Structural cost savings and disciplined expense management helped to offset inflation and higher operating costs from growth projects and capacity additions. In addition, results also benefited from lower Corporate and Financing costs as well as net favorable one-time items.
• Structural cost savings now total $7 billion compared to 2019. The company achieved an additional $2 billion of savings during the year and is on track to deliver $9 billion of total annual savings in 2023 vs. 2019.
• Leading peers¹ with 87% total shareholder return for the year as well as 25% return on capital employed, the highest one-year return since 2012.
• Cash increased by $22.9 billion in 2022 with free cash flow of $62.1 billion. Shareholder distributions were $29.8 billion, including $14.9 billion in dividends and $14.9 billion of share repurchases. The company also increased and extended its share-repurchase program with up to $35 billion of cumulative share repurchases in 2023-2024.
• The Corporation declared a first-quarter dividend of $0.91 per share, payable on March 10, 2023, to shareholders of record of Common Stock at the close of business on February 14, 2023.
• Net-debt-to-capital ratio improved to about 5%, reflecting 2022 debt retirements of $7.2 billion and a period-end cash balance of $29.7 billion, further strengthening the balance sheet and providing greater financial flexibility.
• Non-core asset sales and divestments generated $5.2 billion of cash proceeds during the year.

Progress Toward Net Zero

• Permian operated assets achieved a major milestone in the fourth quarter by achieving zero routine flaring.¹ This is a key part of ongoing efforts to achieve net-zero Scope 1 and Scope 2 greenhouse gas emissions from our Permian operated unconventional assets by 2030. The company remains on track to meet its goal of achieving zero routine flaring across all its global Upstream operated assets by 2030 in support of the World Bank’s Zero Routine Flaring Initiative.
• The company reduced methane emissions intensity at all operated assets by more than 40% compared to 2016 levels.²

Biofuels and Hydrogen

• ExxonMobil announced the next step in the development of the world’s largest low-carbon hydrogen production facility with a contract award for front-end engineering and design. The integrated ExxonMobil Baytown facility is expected to produce 1 billion cubic feet of low-carbon hydrogen per day, that would make it the largest low-carbon hydrogen project in the world with an expected startup in 2027-2028. More than 98% of the associated CO2 produced by the facility, or around 7 million metric tons per year, is expected to be captured and permanently stored. The carbon capture and storage network being developed for the project will be made available for use by third-party CO2 emitters in the area in support of their decarbonization efforts.³
• ExxonMobil's majority-owned affiliate, Imperial Oil Ltd., will invest about $560 million to move forward with construction of the largest renewable diesel facility in Canada. The project at Imperial’s Strathcona Refinery is expected to produce 20,000 barrels of renewable diesel per day primarily from locally sourced feedstocks. This is expected to help reduce greenhouse gas emissions in the Canadian transportation sector by about 3 million metric tons per year.⁴

Carbon Capture and Storage

• ExxonMobil and Mitsubishi Heavy Industries (MHI) announced a joint effort to deploy MHI’s leading carbon capture technology as part of ExxonMobil’s end-to-end carbon capture and storage solution for industrial customers.
• The company advanced its evaluation of carbon capture and storage projects in the United Kingdom and Indonesia. In the United Kingdom, ExxonMobil, along with Solent Local Enterprise Partnership and the University of Southampton, announced the first major decarbonization initiative that would substantially reduce carbon emissions from industry, transportation, and households across Southern England. In Indonesia, ExxonMobil and the state-owned energy company, Pertamina, agreed to progress a previously announced regional carbon capture and storage hub offshore Java for domestic and international CO2.

• Upstream fourth-quarter 2022 earnings were $8.2 billion compared to $12.4 billion in the third quarter, a decrease of $4.2 billion. Earnings decreased mainly from lower prices with both crude and gas realizations down, 15% and 13% respectively, on higher global inventories. Positive unsettled derivatives mark-to-market effects of $1.6 billion were driven by the decline in gas prices and more than offset year-end inventory impacts and seasonally higher expenses. Identified items unfavorably impacted earnings by $1.1 billion, mainly from additional European taxes on the energy sector partly offset by net favorable divestments and adjustments related to the Sakhalin-1 expropriation. Earnings excluding these identified items decreased $3.1 billion from $11.8 billion to $8.8 billion.
• Production in the fourth quarter was 3.8 million oil-equivalent barrels per day. Growth more than offset divestment impacts, as production increased by more than 100,000 oil-equivalent barrels per day compared to the prior quarter.
• The Permian delivered record production in the quarter of more than 560,000 oil-equivalent barrels per day and the company also loaded the first LNG cargo from the Coral South LNG development in Mozambique.
• Compared to the same quarter last year, earnings increased $2.1 billion. The improvement was driven by a 46% increase in natural gas realizations and an increase of nearly 10% in crude realizations. Results benefited from $1.4 billion positive unsettled derivatives mark-to-market effects, which more than offset the impact of year-end inventory impacts and higher expenses. Excluding divestments and the Sakhalin-1 expropriation, oil-equivalent production grew by 217,000 barrels per day, driven by the company's advantaged growth projects in the Permian and Guyana. Earnings excluding identified items were $8.8 billion for the quarter, an increase of $2.1 billion compared to the same quarter last year.
• Full-year earnings were $36.5 billion, an increase of $20.7 billion versus 2021 despite a $2.4 billion unfavorable impact from identified items, most notably additional European taxes on the energy sector and the Sakhalin-1 impairment. Earnings excluding identified items were $39.4 billion, an increase of $23.1 billion.
• Other factors impacting full-year results were improved liquids and natural gas realizations, reflecting tight supply and recovering demand, and favorable unsettled derivatives mark-to-market effects of $2.8 billion resulting from lower gas prices and the absence of unfavorable 2021 impacts. In addition, structural cost savings and disciplined expense management largely offset higher expenses associated with advantaged growth projects and inflation. Excluding impacts from divestments and the Sakhalin-1 expropriation, oil-equivalent production grew by about 170,000 barrels per day from continued investment in advantaged growth projects in the Permian and Guyana. Production in the Permian grew about 90,000 oil-equivalent barrels per day and Guyana production grew about 70,000 oil-equivalent barrels per day with Liza Phase 2 starting up ahead of schedule and both Liza Phase 1 and 2 producing above the investment basis.

• Energy Products fourth-quarter 2022 earnings totaled $4.1 billion compared to $5.8 billion in the third quarter, a decrease of $1.7 billion. Continued strong industry refining margins partially offset an unfavorable derivatives mark-to-market impact of $1.0 billion, mainly due to the absence of prior quarter gains. In addition, increased maintenance spend and lower throughput, driven by French industrial actions, were offset by favorable year-end inventory impacts. Identified items associated with additional European taxes on the energy sector as well as asset impairments reduced earnings by $0.7 billion. Earnings excluding these identified items were $4.8 billion for the quarter, a decrease of $1.1 billion from the third quarter.
• Earnings increased $3.2 billion compared to the fourth quarter of 2021 due to stronger industry refining margins, increased marketing and trading contributions, and favorable foreign exchange impacts, partly offset by increased maintenance expenses and unfavorable derivatives mark-to-market impacts. In addition, earnings were unfavorably impacted by identified items of $0.7 billion, mainly additional European taxes on the energy sector and asset impairments. Earnings excluding identified items were $4.8 billion for the quarter, an increase of $3.9 billion from the same quarter last year.
• Full-year 2022 earnings were $15.0 billion compared to a loss of $0.3 billion last year. Identified items reduced earnings by $0.7 billion mainly from additional European taxes on the energy sector and asset impairments. Earnings excluding identified items were $15.7 billion, an increase of $16 billion from last year.
• Results for the year increased from improved industry refining margins, which benefited from higher demand and low inventories. Results were also helped by stronger trading and marketing margins, improved product yields, higher throughput, as well as favorable foreign exchange and year-end inventory impacts. In addition, continued disciplined cost management helped to offset higher expenses from inflation and project activity.
• Refining throughput for the year was 4 million barrels per day, up 171,000 barrels from 2021 on a current refinery circuit basis, reflecting best-ever annual refining throughput in North America and the highest globally since 2012.
• The company mechanically completed its Beaumont Refinery expansion, the largest in the United States since 2012 and expects to bring 250,000 barrels per day of crude distillation capacity to the market in first quarter 2023.
• The company announced an agreement with Par Pacific Holdings for the sale of the Billings Refinery and select midstream assets in Montana and Washington, as well as an agreement with Italiana Petroli for the sale of the Italy fuels business during the quarter. Additionally, in January an agreement was reached with Bangchak Corporation for the sale of ExxonMobil's interest in Esso Thailand, including the Sriracha Refinery, select distribution terminals, and a network of Esso-branded retail stations.

• Chemical Products fourth-quarter 2022 earnings were $0.3 billion compared to $0.8 billion in the third quarter on weaker margins as a result of continued supply additions and softening demand in North America and Europe partially offset by lower North America feed costs.
• Earnings were $1.1 billion lower compared to fourth-quarter 2021 on weaker industry margins and lower sales, reflecting softening market conditions.
• Full-year earnings of $3.5 billion were above the 10-year average, though below the record $7.0 billion earned in 2021. Earnings remained strong despite bottom-of-cycle conditions in Asia Pacific, increased supply, and the closure of the regional pricing disconnect between Asia and the Atlantic Basin during the year. In addition, earnings were unfavorably impacted by product mix effects, higher expenses from production capacity additions, and foreign exchange effects from a stronger U.S. dollar.
• The company started up its advanced recycling facility in Baytown, Texas, one of the largest advanced recycling facilities in North America, capable of processing more than 80 million pounds of plastic waste per year.
• The company also successfully started up a new polypropylene production unit in Baton Rouge, Louisiana, doubling the plant's polypropylene production to meet growing demand for high-performance, lightweight, and durable plastics.

• Specialty Products fourth-quarter 2022 earnings were $0.8 billion, in line with the third quarter. The robust quarterly performance was driven by improved margins with continued pricing actions and lower energy prices, partly offset by lower volumes on supply length and higher seasonal expenses.
• Fourth-quarter 2022 earnings were $0.8 billion compared to $1.1 billion in the same quarter last year, a decrease of $0.4 billion driven by the absence of prior year identified items associated with asset sales. Earnings excluding identified items were $0.8 billion, $0.3 billion higher than the same quarter last year.
• Quarterly results increased from improved basestock industry margins and positive year-end inventory effects, partly offset by lower sales volumes.
• Full-year earnings were $2.4 billion compared with $3.3 billion in 2021, a decrease of $0.8 billion. Identified items reduced earnings by $0.7 billion, mainly associated with the absence of an asset sale gain. Earnings excluding identified items were $2.5 billion, a decrease of $0.2 billion compared to last year.
• Full-year results were also impacted by decreased margins with higher feed costs and energy prices largely offset by continued focus on revenue management, increased expenses from higher maintenance and inflation, and unfavorable foreign exchange impacts partly offset by positive year-end inventory effects.

• Corporate and Financing reported net charges of $0.5 billion in the fourth quarter of 2022 compared to charges of $0.2 billion in the third quarter, an increase of $0.4 billion driven by the absence of prior quarter identified items related to tax and other reserve adjustments.
• Net charges of $0.5 billion in the fourth quarter of 2022 were down $0.1 billion from the same quarter of 2021.
• Full-year net charges of $1.7 billion declined $1.0 billion from last year, mainly due to decreased pension-related expenses, favorable one-time tax impacts, lower financing costs, and favorable identified item impacts of $0.4 billion associated with tax and other reserve adjustments.

This press release also references structural cost savings. Structural cost savings describe decreases in cash opex excluding energy and production taxes as a result of operational efficiencies, workforce reductions, and other cost-saving measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative structural cost savings totaled $7 billion. The total change between periods in expenses above will reflect both structural cost savings and other changes in spend, including market factors, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations. Estimates of cumulative annual structural savings may be revised depending on whether cost reductions realized in prior periods are determined to be sustainable compared to 2019 levels. Structural cost savings are stewarded internally to support management's oversight of spending over time. This measure is useful for investors to understand the Corporation's efforts to optimize spending through disciplined expense management.

ExxonMobil will discuss financial and operating results and other matters during a webcast at 7:30 a.m. Central Time on January 31, 2023. To listen to the event or access an archived replay, please visit www.exxonmobil.com.

Cautionary Statement

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 in this release, are forward-looking statements. Similarly, discussion of future carbon capture, biofuel and hydrogen plans to drive towards net zero emissions are dependent on future market factors, such as continued technological progress and policy support, and represent 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; ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050, reaching Scope 1 and 2 net zero in Upstream Permian Basin unconventional operated assets by 2030, eliminating routine flaring in-line with World Bank Zero Routine Flaring, reaching near-zero methane emissions from its operations, meeting ExxonMobil’s emission reduction goals and plans, divestment and start-up plans, and associated project plans as well as technology efforts, timing and outcome of projects to capture and store CO2, and produced biofuels; 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; government policies supporting lower carbon investment opportunities such as the U.S. Inflation Reduction Act or policies limiting the attractiveness of future investment such as the European tax on the energy sector; 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 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; expropriations, seizure, or capacity, insurance or shipping limitations by foreign governments or laws; 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.

Frequently Used Terms and Non-GAAP Measures

This press release includes cash flow from operations and asset sales (non-GAAP). Because of the regular nature of our asset management and divestment program, the company believes it is useful for investors to consider proceeds associated with the sales of subsidiaries, property, plant and equipment, and sales and returns of investments together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities. A reconciliation to net cash provided by operating activities for 2021 and 2022 periods is shown on page 8.

This press release also includes cash flow from operations and asset sales excluding working capital (non-GAAP). The company believes it is useful for investors to consider these numbers in comparing the underlying performance of the company's business across periods when there are significant period-to-period differences in the amount of changes in working capital. A reconciliation to net cash provided by operating activities for 2021 and 2022 periods is shown on page 8.

This press release also includes earnings/(loss) excluding identified items (non-GAAP), which 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 may be less than $250 million when the item impacts several periods or several segments. Earnings/(loss) excluding identified items does include non-operational earnings events or impacts that are below the $250 million threshold utilized for identified items. When the effect of these events is significant in aggregate, it is indicated in analysis of period results as part of quarterly earnings press release and teleconference materials. 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 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. A reconciliation to earnings is shown for 2022 and 2021 periods in Attachments II-a and II-b. Corresponding per share amounts are shown on page 1 and in Attachment II-a, including a reconciliation to earnings/(loss) per common share – assuming dilution (U.S. GAAP).

This press release also includes total taxes including sales-based taxes. This is a broader indicator of the total tax burden on the Corporation’s products and earnings, including certain sales and value-added taxes imposed on and concurrent with revenue-producing transactions with customers and collected on behalf of governmental authorities (“sales-based taxes”). It combines “Income taxes” and “Total other taxes and duties” with sales-based taxes, which are reported net in the income statement. The company believes it is useful for the Corporation and its investors to understand the total tax burden imposed on the Corporation’s products and earnings. A reconciliation to total taxes is shown in Attachment I-a.

This press release also references free cash flow (non-GAAP). Free cash flow is the sum of net cash provided by operating activities and net cash flow used in investing activities. This measure is useful when evaluating cash available for financing activities, including shareholder distributions, after investment in the business. Free cash flow is not meant to be viewed in isolation or as a substitute for net cash provided by operating activities. A reconciliation to net cash provided by operating activities for 2021 and 2022 periods is shown on page 8.

References to resources or resource base may include quantities of oil and natural gas classified as proved reserves, as well as quantities that are not yet classified as proved reserves, but that are expected to be ultimately recoverable. The term “resource base” or similar terms are not intended to correspond to SEC definitions such as “probable” or “possible” reserves. A reconciliation of production excluding divestments, entitlements, and government mandates to actual production is contained in the Supplement to this release included as Exhibit 99.2 to the Form 8-K filed the same day as this news release.

The term “project” as used in this release can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. Projects or plans may not reflect investment decisions made by the company. Individual opportunities may advance based on a number of factors, including availability of supportive policy, technology for cost-effective abatement, and alignment with our partners and other stakeholders. The company may refer to these opportunities as projects in external disclosures at various stages throughout their progression.

This press release also references return on capital employed (ROCE) (non-GAAP). The Corporation’s total ROCE is net income attributable to ExxonMobil, excluding the after-tax cost of financing, divided by total corporate average capital employed. The Corporation has consistently applied its ROCE definition for many years and views it as one of the best measures of historical capital productivity in our capital-intensive, long-term industry, both to evaluate management’s performance and to demonstrate to shareholders that capital has been used wisely over the long term. Additional measures, which are more cash-flow based, are used to make investment decisions. A reconciliation to net income/(loss) attributable to ExxonMobil and to Total assets for 2021 and 2022 periods are shown on page 8.

Reference to Earnings

References to corporate earnings mean net income attributable to ExxonMobil (U.S. GAAP) from the consolidated income statement. Unless otherwise indicated, references to earnings, Upstream, Energy Products, Chemical Products, Specialty Products and Corporate and Financing segment earnings, and earnings per share are ExxonMobil’s share after excluding amounts attributable to noncontrolling interests.

Exxon Mobil Corporation has numerous affiliates, many with names that include ExxonMobil, Exxon, Mobil, Esso, and XTO. For convenience and simplicity, those terms and terms such as Corporation, company, our, we, and its are sometimes used as abbreviated references to specific affiliates or affiliate groups. Similarly, ExxonMobil has business relationships with thousands of customers, suppliers, governments, and others. For convenience and simplicity, words such as venture, joint venture, partnership, co-venturer, and partner are used to indicate business and other relationships involving common activities and interests, and those words may not indicate precise legal relationships. ExxonMobil's ambitions, plans and goals do not guarantee any action or future performance by its affiliates or Exxon Mobil Corporation's responsibility for those affiliates' actions and future performance, each affiliate of which manages its own affairs.

Throughout this press release, both Exhibit 99.1 as well as Exhibit 99.2, due to rounding, numbers presented may not add up precisely to the totals indicated.

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Source: Exxon Mobil Corporation

Released January 31, 2023