Exxon Mobil Corp., Q2 2009 Earnings Call, Jul-30-2009 - NYSE:XOM

NYSE:XOM

David Rosenthal, Vice President of Investor Relations and Secretary for ExxonMobil, provided the following information and updates during the Q2 2009 Earnings Call:

1. Opening Remarks:

   • He welcomed attendees to the ExxonMobil second quarter 2009 financial and operating results conference call.
   • Noted that despite challenging market conditions, ExxonMobil's second quarter earnings performance was solid.
   • Acknowledged the impacts of global economic weakness, reduced demand for products, and volatile commodity prices.
   • Highlighted ExxonMobil's strong operating performance and commitment to investing in its portfolio of advantageous projects.

2. Cautionary Statement:

   • Reminded listeners that estimates, plans, and expectations are forward-looking statements and actual results could differ materially.
   • Directed attention to the cautionary statement in the press release and SEC filings for factors affecting future results.

3. Second Quarter Results:

   • Reported second quarter 2009 earnings of $4 billion, a reduction of $7.7 billion from the second quarter of 2008.
   • Cited sharp reductions in commodity prices and weaker demand as reasons for the earnings decline.
   • Noted a special charge of $140 million for interest related to the Valdez punitive damages award.
   • Excluding special items, earnings were $4.1 billion, down $7.9 billion from 2008.
   • Earnings per share excluding special items were $0.84, down $1.43 from the previous year.
   • Mentioned that ExxonMobil distributed a total of $7 billion to shareholders, including $2 billion in dividends and $5 billion in share purchases to reduce shares outstanding.

4. Business Line Results and Milestones:

   • Upstream:
     • Highlighted progress on Qatargas 2 and RasGas' Ras Laffan III LNG projects, which will increase gross LNG capacity by over 30 million tons per year.
     • Described the start-up of Qatargas 2 Train 4 and the imminent start-up of Train 5.
     • Announced the inauguration of the South Hook LNG receiving terminal in the UK.
     • Discussed the mechanical completion of RasGas Ras Laffan III Train 6 and the expected start-up of Train 7 by year-end.
     • Emphasized the integration of innovative technology and the ability to deliver significant value to partners, resource owners, and shareholders.
     • Mentioned the start-up of the Piceance Phase 1 project in Colorado, with a capacity to produce 200 million cubic feet per day of natural gas.
     • Updated on the Tyrihans field start-up in the Norwegian North Sea.
     • Announced an agreement with TransCanada Corporation to study the Alaska Gas Pipeline project.
     • Discussed the progress on the Kearl oil sands project in Canada.
     • Provided updates on exploration activities, including the completion of the Guarani 1 well in Brazil and the acquisition of additional acreage in the Horn River Basin in Canada.
   • Downstream:
     • Announced the start-up of a 160,000 barrel per day crude and vacuum distillation unit in the Fujian province, China.
     • Mentioned the completion of a project to increase the capacity of the Pegasus crude pipeline.
     • Announced an alliance with Synthetic Genomics Inc. to research and develop next-generation biofuels from photosynthetic algae.
   • Chemical Business:
     • Announced the introduction of nine new premium chemical products.
     • Discussed plans to increase Butyl Rubber production capacity in Japan.

5. Corporate and Financing Segment:

   • Reported corporate and financing expenses of $601 million, an increase of $314 million from the previous year.
   • Noted the effective tax rate for the second quarter was 50%.
   • Mentioned a cash balance of $16 billion and debt of $9 billion at the end of the second quarter.
   • Announced $7 billion distributed to shareholders in the second quarter and expected share purchases of $4 billion in the third quarter.
   • Mentioned a contribution of $3 billion to pension plans.

6. Capital Expenditures and Operating Costs:

   • Noted that expenditures through the first half of the year were $12.3 billion, slightly down from the first half of 2008 due to favorable foreign exchange effects.
   • Reported that total operating costs in the first half were down 13% from the same period the previous year.

7. Summary and Outlook:

   • Summarized the results as reflecting the strength of ExxonMobil's integrated business model.
   • Expressed confidence in the company's long-term perspective, financial strength, and disciplined investment approach to continue delivering superior results and positioning the company well for the future.

8. Question-and-Answer Session:

   • Addressed questions regarding LNG projects, exploration updates, operating expenses, cash flow, pension funding, Marcellus Shale activity, and other topics.