xom-20220331

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☑ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF

THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________to__________

Commission File Number 1-2256

Exxon Mobil Corporation

(Exact name of registrant as specified in its charter)


New Jersey						13-5409005
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification Number)

5959 Las Colinas Boulevard, Irving, Texas 75039-2298

(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

Common Stock, without par value

XOM

New York Stock Exchange

0.142% Notes due 2024

XOM24B

New York Stock Exchange

0.524% Notes due 2028

XOM28

New York Stock Exchange

0.835% Notes due 2032

XOM32

New York Stock Exchange

1.408% Notes due 2039

XOM39A

New York Stock Exchange

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.


Large accelerated filer	☑	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 March 31, 2022
Common stock, without par value						4,212,543,236

EXXON MOBIL CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

TABLE OF CONTENTS


PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Condensed Consolidated Statement of Income Three months ended March 31, 2022 and 2021			3

Condensed Consolidated Statement of Comprehensive Income Three months ended March 31, 2022 and 2021			4

Condensed Consolidated Balance Sheet As of March 31, 2022 and December 31, 2021			5

Condensed Consolidated Statement of Cash Flows Three months ended March 31, 2022 and 2021			6

Condensed Consolidated Statement of Changes in Equity Three months ended March 31, 2022 and 2021			7





Notes to Condensed Consolidated Financial Statements			8

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations			16

Item 3. Quantitative and Qualitative Disclosures About Market Risk			26

Item 4. Controls and Procedures			26


PART II. OTHER INFORMATION

Item 1. Legal Proceedings			27



Item 2. Unregistered Sales of Equity Securities and Use of Proceeds			27

Item 6. Exhibits			27

Index to Exhibits			28

Signature			29

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements


EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(millions of dollars)
	Three Months Ended March 31,
		2022	2021
Revenues and other income
Sales and other operating revenue		87,734	57,552
Income from equity affiliates		2,538	1,473
Other income		228	122
Total revenues and other income		90,500	59,147
Costs and other deductions
Crude oil and product purchases		52,388	32,601
Production and manufacturing expenses		10,241	8,062
Selling, general and administrative expenses		2,409	2,428
Depreciation and depletion (including impairments)		8,883	5,004
Exploration expenses, including dry holes		173	164
Non-service pension and postretirement benefit expense		108	378
Interest expense		188	258
Other taxes and duties		7,554	6,660
Total costs and other deductions		81,944	55,555
Income (loss) before income taxes		8,556	3,592
Income taxes		2,806	796
Net income (loss) including noncontrolling interests		5,750	2,796
Net income (loss) attributable to noncontrolling interests		270	66
Net income (loss) attributable to ExxonMobil		5,480	2,730

Earnings (loss) per common share (dollars)		1.28	0.64

Earnings (loss) per common share - assuming dilution (dollars)		1.28	0.64

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(millions of dollars)

	Three Months Ended March 31,
		2022	2021
Net income (loss) including noncontrolling interests		5,750	2,796
Other comprehensive income (loss) (net of income taxes)
Foreign exchange translation adjustment		741	149

Postretirement benefits reserves adjustment (excluding amortization)		105	168
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs		93	378
Total other comprehensive income (loss)		939	695
Comprehensive income (loss) including noncontrolling interests		6,689	3,491
Comprehensive income (loss) attributable to noncontrolling interests		359	146
Comprehensive income (loss) attributable to ExxonMobil		6,330	3,345

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEET
(millions of dollars)
	March 31, 2022	December 31, 2021
Assets
Current assets
Cash and cash equivalents	11,074	6,802
Notes and accounts receivable – net	42,142	32,383
Inventories
Crude oil, products and merchandise	18,074	14,519
Materials and supplies	4,103	4,261
Other current assets	1,862	1,189
Total current assets	77,255	59,154
Investments, advances and long-term receivables	46,329	45,195
Property, plant and equipment – net	212,773	216,552
Other assets, including intangibles – net	18,414	18,022
Total Assets	354,771	338,923

Liabilities
Current liabilities
Notes and loans payable	4,886	4,276
Accounts payable and accrued liabilities	63,501	50,766
Income taxes payable	3,672	1,601
Total current liabilities	72,059	56,643
Long-term debt	42,651	43,428
Postretirement benefits reserves	18,255	18,430
Deferred income tax liabilities	19,533	20,165
Long-term obligations to equity companies	2,875	2,857
Other long-term obligations	22,872	21,717
Total Liabilities	178,245	163,240

Commitments and contingencies (Note 3)

Equity
Common stock without par value
(9,000 million shares authorized, 8,019 million shares issued)	15,879	15,746
Earnings reinvested	393,779	392,059
Accumulated other comprehensive income	(12,914)	(13,764)
Common stock held in treasury
(3,806 million shares at March 31, 2022 and 3,780 million shares at December 31, 2021)	(227,529)	(225,464)
ExxonMobil share of equity	169,215	168,577
Noncontrolling interests	7,311	7,106
Total Equity	176,526	175,683
Total Liabilities and Equity	354,771	338,923

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(millions of dollars)
	Three Months Ended March 31,
	2022	2021
Cash flows from operating activities
Net income (loss) including noncontrolling interests	5,750	2,796
Depreciation and depletion (including impairments)	8,883	5,004

Changes in operational working capital, excluding cash and debt	1,086	1,953
All other items – net	(931)	(489)
Net cash provided by operating activities	14,788	9,264

Cash flows from investing activities
Additions to property, plant and equipment	(3,911)	(2,400)
Proceeds from asset sales and returns of investments	293	307
Additional investments and advances	(417)	(349)
Other investing activities including collection of advances	90	87
Net cash used in investing activities	(3,945)	(2,355)

Cash flows from financing activities


Additions to short-term debt	—	5,781
Reductions in short-term debt	(2,098)	(10,849)
Additions/(reductions) in debt with three months or less maturity	1,366	1,003

Cash dividends to ExxonMobil shareholders	(3,760)	(3,720)
Cash dividends to noncontrolling interests	(60)	(52)
Changes in noncontrolling interests	(94)	53
Common stock acquired	(2,067)	(1)
Net cash used in financing activities	(6,713)	(7,785)
Effects of exchange rate changes on cash	142	27
Increase/(decrease) in cash and cash equivalents	4,272	(849)
Cash and cash equivalents at beginning of period	6,802	4,364
Cash and cash equivalents at end of period	11,074	3,515

Supplemental Disclosures
Income taxes paid	1,798	855
Cash interest paid
Included in cash flows from operating activities	319	405
Capitalized, included in cash flows from investing activities	187	151
Total cash interest paid	506	556

Noncash right of use assets recorded in exchange for lease liabilities
Operating leases	240	265
Finance leases	656	—

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.


EXXON MOBIL CORPORATION
CONDENSED CONSOLIDATED STATEMENT OF CHANGES IN EQUITY
(millions of dollars)
	ExxonMobil Share of Equity
	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	15,688	383,943	(16,705)	(225,776)	157,150	6,980	164,130
Amortization of stock-based awards	202	—	—	—	202	—	202
Other	(6)	—	—	—	(6)	53	47
Net income (loss) for the period	—	2,730	—	—	2,730	66	2,796
Dividends - common shares	—	(3,720)	—	—	(3,720)	(52)	(3,772)

Other comprehensive income (loss)	—	—	615	—	615	80	695
Acquisitions, at cost	—	—	—	(1)	(1)	—	(1)
Dispositions	—	—	—	4	4	—	4
Balance as of March 31, 2021	15,884	382,953	(16,090)	(225,773)	156,974	7,127	164,101

Balance as of December 31, 2021	15,746	392,059	(13,764)	(225,464)	168,577	7,106	175,683
Amortization of stock-based awards	138	—	—	—	138	—	138
Other	(5)	—	—	—	(5)	14	9
Net income (loss) for the period	—	5,480	—	—	5,480	270	5,750
Dividends - common shares	—	(3,760)	—	—	(3,760)	(60)	(3,820)

Other comprehensive income (loss)	—	—	850	—	850	89	939
Acquisitions, at cost	—	—	—	(2,067)	(2,067)	(108)	(2,175)
Dispositions	—	—	—	2	2	—	2
Balance as of March 31, 2022	15,879	393,779	(12,914)	(227,529)	169,215	7,311	176,526


	Three Months Ended March 31, 2022			Three Months Ended March 31, 2021
Common Stock Share Activity	Issued	Held in Treasury	Outstanding	Issued	Held in Treasury	Outstanding
	(millions of shares)			(millions of shares)
Balance as of December 31	8,019	(3,780)	4,239	8,019	(3,786)	4,233
Acquisitions	—	(26)	(26)	—	—	—
Dispositions	—	—	—	—	1	1
Balance as of March 31	8,019	(3,806)	4,213	8,019	(3,785)	4,234

The information in the Notes to Condensed Consolidated Financial Statements is an integral part of these statements.

EXXON MOBIL CORPORATION

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

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.

2. Russia

In early March, in response to Russia’s military action in Ukraine, the Corporation announced that it plans to discontinue operations on the Sakhalin-1 project (“Sakhalin”) and develop steps to exit the venture. In light of this, and given the considerable uncertainties surrounding the ongoing operation and future cash-flow generating capability of Sakhalin, an impairment assessment was required, and management determined that the carrying value of the asset group was not recoverable. As a result, the Corporation’s first quarter earnings include after-tax charges of $3.4 billion largely representing the impairment of its operations related to Sakhalin. On a before-tax basis, the charges amounted to $4.6 billion, substantially all of which is reflected in the line captioned “Depreciation and depletion (including impairments)” on the Condensed Consolidated Statement of Income. 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 assessment of fair value required the use of Level 3 inputs and assumptions that are based on the views of a likely market participant. As of March 31, the pool of market participants for Russia-based upstream assets was assessed as extremely limited. In arriving at a fair value for its interest in Sakhalin, the Corporation considered, among other things, the current state of sanctions, the regulatory environment within Russia, the statements and actions of potential market participants, and the range and risks of future cash flows that a market participant might consider. Given these significant uncertainties, the likelihood of a third-party market participant agreeing to engage in a transaction for the Corporation’s interest in Sakhalin, as of March 31, was judged to be remote.

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 March 31, 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.


		March 31, 2022
		Equity Company Obligations (1)	Other Third-Party Obligations	Total
		(millions of dollars)
Guarantees
	Debt-related	1,152	145	1,297
	Other	830	6,379	7,209
	Total	1,982	6,524	8,506

(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 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.

4. Other Comprehensive Income Information


ExxonMobil Share of Accumulated Other Comprehensive Income	Cumulative Foreign Exchange Translation Adjustment	Postretirement Benefits Reserves Adjustment	Total
	(millions of dollars)

Balance as of December 31, 2020	(10,614)	(6,091)	(16,705)
Current period change excluding amounts reclassified from accumulated other comprehensive income (1)	88	158	246
Amounts reclassified from accumulated other comprehensive income	—	369	369
Total change in accumulated other comprehensive income	88	527	615
Balance as of March 31, 2021	(10,526)	(5,564)	(16,090)

Balance as of December 31, 2021	(11,499)	(2,265)	(13,764)
Current period change excluding amounts reclassified from accumulated other comprehensive income (1)	661	102	763
Amounts reclassified from accumulated other comprehensive income	—	87	87
Total change in accumulated other comprehensive income	661	189	850
Balance as of March 31, 2022	(10,838)	(2,076)	(12,914)

(1)Cumulative Foreign Exchange Translation Adjustment includes net investment hedge gain/(loss) net of taxes of $79 million and $191 million in 2022 and 2021, respectively.


Amounts Reclassified Out of Accumulated Other Comprehensive Income - Before-tax Income/(Expense)	Three Months Ended March 31,
		2022	2021
	(millions of dollars)

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)		(120)	(484)


Income Tax (Expense)/Credit For Components of Other Comprehensive Income	Three Months Ended March 31,
		2022	2021
	(millions of dollars)
Foreign exchange translation adjustment		(22)	(53)
Postretirement benefits reserves adjustment (excluding amortization)		(40)	(58)
Amortization and settlement of postretirement benefits reserves adjustment included in net periodic benefit costs		(27)	(106)
Total		(89)	(217)

5. Earnings Per Share


	Three Months Ended March 31,
		2022	2021
Earnings per common share
Net income (loss) attributable to ExxonMobil (millions of dollars)		5,480	2,730
Weighted average number of common shares outstanding (millions of shares)		4,266	4,272
Earnings (loss) per common share (dollars) (1)		1.28	0.64
Dividends paid per common share (dollars)		0.88	0.87

(1)The calculation of earnings (loss) per common share and earnings (loss) per common share – assuming dilution are the same in each period shown.

6. Pension and Other Postretirement Benefits


	Three Months Ended March 31,
		2022	2021
	(millions of dollars)
Components of net benefit cost
Pension Benefits - U.S.
Service cost		179	225
Interest cost		129	139
Expected return on plan assets		(140)	(180)
Amortization of actuarial loss/(gain)		39	61
Amortization of prior service cost		(7)	(6)
Net pension enhancement and curtailment/settlement cost		37	298
Net benefit cost		237	537

Pension Benefits - Non-U.S.
Service cost		150	195
Interest cost		160	130
Expected return on plan assets		(213)	(258)
Amortization of actuarial loss/(gain)		47	108
Amortization of prior service cost		12	15
Net pension enhancement and curtailment/settlement cost		—	12
Net benefit cost		156	202

Other Postretirement Benefits
Service cost		40	49
Interest cost		55	56
Expected return on plan assets		(3)	(5)
Amortization of actuarial loss/(gain)		3	19
Amortization of prior service cost		(11)	(11)
Net benefit cost		84	108

7. Financial Instruments and Derivatives

Financial Instruments. The estimated fair value of financial instruments at March 31, 2022 and December 31, 2021, and the related hierarchy level for the fair value measurement was as follows:


		March 31, 2022
		(millions of dollars)
		Fair Value
		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)	6,886	2,890	—	9,776	(7,888)	(60)	—	1,828
	Advances to/receivables
	from equity companies (2)(6)	—	2,631	5,491	8,122	—	—	435	8,557
	Other long-term
	financial assets (3)	1,152	—	1,049	2,201	—	—	165	2,366
Liabilities
	Derivative liabilities (4)	7,459	3,940	—	11,399	(7,888)	(632)	—	2,879
	Long-term debt (5)	40,367	76	2	40,445	—	—	(140)	40,305
	Long-term obligations
	to equity companies (6)	—	—	2,969	2,969	—	—	(94)	2,875
	Other long-term
	financial liabilities (7)	—	—	886	886	—	—	53	939


		December 31, 2021
		(millions of dollars)
		Fair Value
		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)	1,422	1,523	—	2,945	(1,930)	(28)	—	987
	Advances to/receivables
	from equity companies (2)(6)	—	3,076	5,373	8,449	—	—	(123)	8,326
	Other long-term
	financial assets (3)	1,134	—	1,058	2,192	—	—	181	2,373
Liabilities
	Derivative liabilities (4)	1,701	2,594	—	4,295	(1,930)	(306)	—	2,059
	Long-term debt (5)	44,454	88	3	44,545	—	—	(2,878)	41,667
	Long-term obligations
	to equity companies (6)	—	—	3,084	3,084	—	—	(227)	2,857
	Other long-term
	financial liabilities (7)	—	—	902	902	—	—	58	960

(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 March 31, 2022 and December 31, 2021, respectively, the Corporation had $1,347 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.

The Corporation may use non-derivative financial instruments, such as its foreign currency-denominated debt, as hedges of its net investments in certain foreign subsidiaries. Under this method, the change in the carrying value of the financial instruments due to foreign exchange fluctuations is reported in accumulated other comprehensive income. As of March 31, 2022, the Corporation has designated $5.0 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 $10.7 billion and undrawn long-term committed lines of credit of $0.6 billion as of first quarter 2022.

Derivative Instruments. The Corporation’s size, strong capital structure, geographic diversity and the complementary nature of the Upstream, Downstream and Chemical businesses 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 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 March 31, 2022 and December 31, 2021, or results of operations for the periods ended March 31, 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 March 31, 2022 and December 31, 2021, was as follows:


	March 31,	December 31,
	2022	2021
	(millions)
Crude oil (barrels)	91	82
Petroleum products (barrels)	(37)	(48)
Natural gas (MMBTUs)	(101)	(115)

Realized and unrealized gains/(losses) on derivative instruments that were recognized in the Consolidated Statement of Income are included in the following lines on a before-tax basis:



	Three Months Ended March 31,
		2022	2021
	(millions of dollars)
Sales and other operating revenue		(2,535)	(512)
Crude oil and product purchases		(26)	1
Total		(2,561)	(511)

8. Disclosures about Segments and Related Information


	Three Months Ended March 31,
	2022	2021
Earnings (Loss) After Income Tax	(millions of dollars)
Upstream
United States	2,376	363
Non-U.S. (1)	2,112	2,191
Downstream
United States	685	(113)
Non-U.S.	(353)	(277)
Chemical
United States	819	715
Non-U.S.	535	700
Corporate and Financing (1)	(694)	(849)
Corporate total	5,480	2,730

(1) Results for 2022 include charges of $3.3 billion in non-U.S. Upstream and $0.1 billion in Corporate and Financing associated with the Corporation's interest in Sakhalin-1. (See Note 2 to Condensed Consolidated Financial Statements)


Sales and Other Operating Revenue
Upstream
United States	2,656	1,885
Non-U.S.	6,343	3,094
Downstream
United States	25,356	16,078
Non-U.S.	43,609	28,613
Chemical
United States	3,982	3,091
Non-U.S.	5,781	4,887
Corporate and Financing	7	(96)
Corporate total	87,734	57,552

Intersegment Revenue
Upstream
United States	6,191	3,323
Non-U.S.	10,835	6,817
Downstream
United States	8,261	3,953
Non-U.S.	9,503	5,381
Chemical
United States	2,863	1,950
Non-U.S.	2,213	1,231
Corporate and Financing	57	57


Geographic
	Three Months Ended March 31,
Sales and Other Operating Revenue		2022	2021
	(millions of dollars)
United States		31,994	21,054
Non-U.S.		55,740	36,498
Total		87,734	57,552

Significant Non-U.S. revenue sources include: (1)
United Kingdom		7,548	2,943
Canada		6,995	4,258
France		4,356	2,782
Singapore		4,322	3,435
Belgium		2,836	1,989
Italy		2,836	1,865

(1)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.

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. If these are attained, the transaction would be expected to close no earlier than mid-year 2022. The agreed sales price is subject to interim period adjustments from January 1, 2021 to the closing date, and has potential for further adjustments based on commodity prices and production levels. Assuming a mid-2022 closing date and based on currently available information, the Corporation expects to recognize a loss of approximately $500 million when and if the potential divestment ultimately meets held-for-sale criteria under ASC 360, following the resolution of certain conditions precedent noted above.

Following the end of the first quarter, the Corporation executed an agreement for the sale of ExxonMobil Exploration and Production Romania, consisting of certain unproved Upstream assets, to Romgaz S.A. The transaction is anticipated to close mid-year 2022, and the Corporation expects to recognize a gain on the sale of approximately $300 million.

EXXON MOBIL CORPORATION

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. Across late 2021 and early 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. In the first quarter 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. Additionally, by the end of the first quarter, refining margins improved to levels above the 10-year range, and the tight supply and demand balance is expected to persist.

In early March, in response to Russia’s military action in Ukraine, the Corporation announced 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 include 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 is expected to result in limited hydrocarbon sales and cash flows for the Corporation’s account during the second quarter of 2022, and none following that period. For reference, excluding the impact of impairments and other charges, after-tax earnings related to the Corporation’s interest in Sakhalin in the first quarter were approximately $0.2 billion, and combined oil and gas production was approximately 65 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.

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 March 31, 2022	Upstream		Downstream		Chemical		Corporate and Financing	Total
	U.S.	Non-U.S.	U.S.	Non-U.S.	U.S.	Non-U.S.
	(millions of dollars)
Earnings (loss) (U.S. GAAP)	2,376	2,112	685	(353)	819	535	(694)	5,480
Identified Items
Impairments	—	(2,877)	—	—	—	—	(98)	(2,975)
Other - Russia impacts	—	(378)	—	—	—	—	—	(378)
Earnings (loss) excluding Identified Items	2,376	5,367	685	(353)	819	535	(596)	8,833


Three Months Ended March 31, 2021	Upstream		Downstream		Chemical		Corporate and Financing	Total
	U.S.	Non-U.S.	U.S.	Non-U.S.	U.S.	Non-U.S.
	(millions of dollars)
Earnings (loss) (U.S. GAAP)	363	2,191	(113)	(277)	715	700	(849)	2,730
Identified Items
Severance charges	—	—	—	—	—	—	(31)	(31)
Earnings (loss) excluding Identified Items	363	2,191	(113)	(277)	715	700	(818)	2,761

References in this discussion to Corporate earnings (loss) mean net income (loss) attributable to ExxonMobil (U.S. GAAP) from the Consolidated Statement of Income. Unless otherwise indicated, references to earnings (loss), Upstream, Downstream,

Chemical and Corporate and Financing segment earnings (loss), and earnings (loss) per share are ExxonMobil's share after excluding amounts attributable to noncontrolling interests.

REVIEW OF FIRST QUARTER 2022 RESULTS

ExxonMobil’s first quarter 2022 earnings were $5.5 billion, or $1.28 per diluted share, compared with earnings of $2.7 billion a year earlier. The increase in earnings was driven by higher Upstream realizations and Downstream margins partly offset by charges related to the company's Russia Sakhalin-1 operation.

Oil-equivalent production was 3.7 million barrels per day, down 3 percent from the prior year. Excluding entitlement effects, divestments, and government mandates, oil-equivalent production was down 2 percent from the prior year.

The Corporation distributed $3.8 billion in dividends to shareholders and bought back $2.1 billion of common stock.

UPSTREAM

Upstream Financial Results


	Three Months Ended March 31,
	2022	2021
Earnings (loss) (U.S. GAAP)	(millions of dollars)
United States	2,376	363
Non-U.S.	2,112	2,191
Total	4,488	2,554
Identified Items (1)
United States	—	—
Non-U.S.	(3,255)	—
Total	(3,255)	—
Earnings (loss) excluding Identified Items (1)
United States	2,376	363
Non-U.S.	5,367	2,191
Total	7,743	2,554

Upstream Earnings Factor Analysis

(millions of dollars)

Price – Higher realizations increased earnings by $5,930 million as average realizations for crude oil increased 68%, while natural gas realizations increased 137%.

Volume – Unfavorable volume and mix effects decreased earnings by $810 million reflecting impacts from the reduced Groningen production limit, higher downtime including the effects of weather, and lower entitlements due to prices, partly offset by growth in the Permian Basin and Guyana.

Other – All other items increased earnings by $70 million.

Identified Items (1) – 1Q 2022 $(3,255) million loss as a result of the company's decision to discontinue operations at the Russia Sakhalin-1 project.

(1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items.

Upstream Operational Results


	Three Months Ended March 31,
	2022	2021
Production of crude oil, natural gas liquids, bitumen and synthetic oil
Net production	(thousands of barrels daily)
United States	753	665
Canada/Other Americas	474	575
Europe	4	35
Africa	257	253
Asia	738	691
Australia/Oceania	40	39
Worldwide	2,266	2,258

Natural gas production available for sale
Net production	(millions of cubic feet daily)
United States	2,777	2,767
Canada/Other Americas	182	216
Europe	770	1,403
Africa	58	24
Asia	3,340	3,599
Australia/Oceania	1,325	1,164
Worldwide	8,452	9,173

	(thousands of oil-equivalent barrels daily)
Oil-equivalent production (1)	3,675	3,787

(1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels.

1Q 2022 versus 1Q 2021

Liquids production – 2.3 million barrels per day increased 8 thousand barrels per day from 2021, reflecting easing government mandated curtailments, growth in the Permian Basin and Guyana, partly offset by higher downtime including the effects of weather, lower entitlements due to higher prices, and divestment impacts.

Natural gas production available for sale – 8.5 billion cubic feet per day decreased 721 million cubic feet per day from 2021, reflecting impacts from the reduced Groningen production limit, divestments, and entitlements.

Upstream Additional Information


												Three Months Ended March 31
												(thousands of barrels daily)
Volumes reconciliation (Oil-equivalent production) (1)
2021												3,787
Entitlements - Net Interest												(30)
Entitlements - Price / Spend / Other												(44)
Government Mandates												113
Divestments												(62)
Other												(89)
2022												3,675

(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 due to temporary non-operational production limits imposed by governments, generally upon a 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.

DOWNSTREAM

Downstream Financial Results


	Three Months Ended March 31,
	2022	2021
Earnings (loss) (U.S. GAAP)	(millions of dollars)
United States	685	(113)
Non-U.S.	(353)	(277)
Total	332	(390)




Earnings (loss) excluding Identified Items (1)
United States	685	(113)
Non-U.S.	(353)	(277)
Total	332	(390)

(1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items.

Downstream Earnings Factor Analysis

(millions of dollars)

Margins – Higher margins increased earnings by $310 million. Improved refining margins were partially offset by unfavorable unsettled derivative impacts.

Volume – Favorable volume and mix effects increased earnings by $180 million, primarily due to the absence of prior year reliability impacts from winter storm Uri.

Other – All other items increased earnings by $230 million, driven by the absence of terminal conversion impacts in the prior year quarter.

Downstream Operational Results


	Three Months Ended March 31,
	2022	2021
Refinery throughput	(thousands of barrels daily)
United States	1,685	1,532
Canada	399	364
Europe	1,193	1,153
Asia Pacific	537	545
Other	169	157
Worldwide	3,983	3,751

Petroleum product sales (1)
United States	2,256	2,077
Canada	442	409
Europe	1,345	1,272
Asia Pacific	644	665
Other	471	458
Worldwide	5,158	4,881
Gasoline, naphthas	2,114	1,996
Heating oils, kerosene, diesel oils	1,722	1,692
Aviation fuels	289	183
Heavy fuels	249	257
Specialty petroleum products	784	753
Worldwide	5,158	4,881

(1) Data reported net of purchases/sales contracts with the same counterparty.

CHEMICAL

Chemical Financial Results


	Three Months Ended March 31,
	2022	2021
Earnings (loss) (U.S. GAAP)	(millions of dollars)
United States	819	715
Non-U.S.	535	700
Total	1,354	1,415




Earnings (loss) excluding Identified Items (2)
United States	819	715
Non-U.S.	535	700
Total	1,354	1,415

(2) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items.

Chemical Earnings Factor Analysis

(millions of dollars)

Margins – Lower margins decreased earnings by $20 million.

Volume – Favorable volume and mix effects increased earnings by $70 million, primarily due to higher U.S. sales.

Other – All other items decreased earnings by $110 million, primarily driven by increased project and planned maintenance spend.

Chemical Operational Results


	Three Months Ended March 31,
	2022	2021
Chemical prime product sales (1)	(thousands of metric tons)
United States	2,704	2,190
Non-U.S.	4,033	4,256
Worldwide	6,737	6,446

(1) Data reported net of purchases/sales contracts with the same counterparty.

CORPORATE AND FINANCING

Corporate and Financing Financial Results


	Three Months Ended March 31,
	2022	2021
	(millions of dollars)
Earnings (loss) (U.S. GAAP)	(694)	(849)
Identified Items (1)	(98)	(31)
Earnings (loss) excluding Identified Items (1)	(596)	(818)

Corporate and Financing expenses were $694 million for the first quarter of 2022, down $155 million from the first quarter of 2021, reflecting lower pension-related corporate costs and the absence of prior year severance charges, partly offset by Russia Sakhalin impacts.

(1) Refer to Functional Earnings Summary for definition of Identified Items and earnings (loss) excluding Identified Items.

LIQUIDITY AND CAPITAL RESOURCES

Three Months Ended
March 31,

2022

2021