Exxon Mobil Corporation (NYSE:XOM) Q4 2014 Earnings Conference Call - Final Transcript

Feb 02, 2015 • 09:30 am ET


Exxon Mobil Corporation (NYSE:XOM) Q4 2014 Earnings Conference Call - Final Transcript


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Good day, everyone and welcome to this ExxonMobil Corporation Fourth Quarter 2014, Earnings Conference Call. Today's call is being recorded. At this time, I would like to turn the call over to the Vice President of Investor Relations and Secretary, Mr. Jeff Woodbury. Please go ahead, sir.

Jeff Woodbury

Thank you. Ladies and gentlemen good morning, and welcome to ExxonMobil's fourth quarter earnings call. As you know the focus of this call is ExxonMobil's financial and operating results for the fourth quarter and the full year of 2014. I will refer to the slides that are available through the Investors section of our Web site. Before we go further, I'd like to draw your attention to our cautionary statement shown on Slide 2.

Turning now to Slide 3, let me begin by summarizing the key headlines from our fourth quarter and full year performance. ExxonMobil delivered earnings of $32.5 billion in 2014 and fourth quarter earnings of $6.6 billion. These results highlight the value of ExxonMobil's integrated business model which enables us to produce solid financial performance throughout the commodity price cycle. Corporation generated cash flow from operations and asset sales of over $49 billion in 2014, and free cash flow of $18 billion, an increase of $7 billion from 2013.

We completed a record of eight major upstream projects during the year and achieved our full year plan to produce 4 million oil equivalent barrels per day. Moving to Slide 4, we provide an overview of some of the external factors impacting our results, global economic growth moderated in the fourth quarter, expansion in the U.S. continued but growth slowed to the third quarter, China's economy decelerated, while Europe and Japan showed continued signs of economic weakness. As you know, energy prices declined sharply in the fourth quarter and U.S. refining margins decreased significantly, while chemical improved on lower feed and energy costs.

Turning now to the fourth quarter financial results as shown on Slide 5, ExxonMobil's fourth quarter earnings were $6.6 billion or $1.56 per share. Corporation distributed $5.9 billion to shareholders in the quarter, through dividends and share repurchase to reduce shares outstanding. Of that total, $3 billion were used to purchase shares. CapEx was $10.5 billion in the fourth quarter, whereas cash flow from operations and asset sales were 7.7 billion and at the end of the quarter cash totaled $4.7 billion and debt was $29.1 billion.The next slide provides additional detail on fourth quarter sources and uses of funds.

Over the quarter, cash decreased from $5 billion to $4.7 billion. Earnings, depreciation expense, changes in working capital and other items in our ongoing asset management program yielded $7.7 billion of cash flow from operations and asset sales. Uses included net investments in the business of $9.1 billion, and shareholder distributions of $5.9 billion, debt in other financing increased cash by $7 billion. Share purchases to reduce shares outstanding are expecting to be $1 billion in the first quarter of 2015.

Moving now to Slide 7 for a review