N O T E : S P I N E W I D T H (X ) T O B E D E T E R M I N E D B Y P R I N T E R , T E X T T O C E N T E R O N X . S P I N E T E X T M AY N O T B E P O S S I B L E I F T H I N B O O K .
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Exxon Mobil Corporation
Corporate headquarters
5959 Las Colinas Blvd.
Irving, Texas 75039-2298
exxonmobil.com
Printed in U.S.A.
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2018 SUMMARY
ANNUAL REPORT
Integration
2 To our shareholders
4 2018 results and highlights
5 Competitive advantages
6 Technology
10 Scale
14
18 Functional excellence
22 People
26 Global operations
28 Upstream highlights
30 Downstream highlights
32 Chemical highlights
34 Corporate sustainability
35 Financial information
40 Frequently used terms
42 Board of Directors, Officers, and Affiliated Companies
44
Investor information
45 General information
exxonmobil.com/annualreport
Statements of future events or conditions in this report, including projections, targets, expectations, asset profitability, estimates, and business plans, are forward-looking statements. Actual future financial
and operating results, including demand growth and energy source mix; capacity growth; the impact of new technologies; production growth; project plans, dates, costs, and capacities; resource additions,
production rates, and resource recoveries; efficiency gains; cost savings; earnings growth; integration and technology benefits; returns; and product sales could differ materially due to, for example, changes in
the supply of and demand for crude oil, natural gas, and petroleum and petrochemical products and resulting price impacts; reservoir performance; timely completion of development projects; war and other
political or security disturbances; changes in law or government regulation, including environmental regulations and political sanctions; the actions of competitors and customers; unexpected technological
developments; general economic conditions, including the occurrence and duration of economic recessions; the outcome of commercial negotiations; the impact of fiscal and commercial terms; unforeseen
technical difficulties; unanticipated operational disruptions; and other factors discussed in this report and in Item 1A of ExxonMobil’s most recent Form 10-K.
We use non-GAAP concepts and financial measures throughout this publication. These measures may not be comparable to similarly titled measures used by other companies. Definitions of certain financial
and operating measures and other terms used in this report – such as “resources” and “resource base” – are contained in the section titled “Frequently Used Terms” on pages 40 and 41. In the case of
non-GAAP financial measures, such as “Return on Average Capital Employed” and “Cash Flow from Operations and Asset Sales,” the definitions also include any reconciliation or other information required
by SEC Regulation G. “Factors Affecting Future Results” and “Frequently Used Terms” are also available on the “Investors” section of our website.
As used in this publication, the term “industry” refers to publicly traded international energy companies. The term “project” can refer to a variety of different activities and does not necessarily have the same
meaning as in any government payment transparency reports.
Unless otherwise specified, data shown is for 2018. Prior years’ data have been reclassified in certain cases to conform to the 2018 presentation basis.
Unless otherwise stated, production rates, project capacities, and acreage values are gross.
Energy enables modern life.
Energy improves standards of living. Energy drives economic growth.
Energy brings mobility. Energy promotes health and education.
ExxonMobil provides the energy and products that raise living standards. It’s a role we
take seriously. We recognize the critical importance of meeting the growing demand for
affordable and reliable energy, while at the same time reducing environmental impacts –
including the risks of climate change. It’s a dual challenge the industry must help solve,
and ExxonMobil remains committed to doing our part to provide sustainable solutions.
1
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
TO OUR SHAREHOLDERS
As we mark the 20th anniversary of the merger that brought together Exxon and Mobil, we do so with our strongest portfolio of
investments in two decades. It positions us to deliver attractive returns for you, our shareholders, far into the future.
In 2018, we laid out a growth strategy
Our growth strategy takes advantage of our scale
designed to take advantage of the unique strengths
and expertise across each of our business lines.
that have made ExxonMobil an industry leader. These
include a sharp focus on fundamentals; dedication
to innovative technology; deep integration across
our businesses; disciplined investment in advantaged
In the Upstream, we achieved many important
milestones including advancements in five key world-
class projects that will add significant new production.
projects; and industry-leading execution from our highly
In Guyana, multiple discoveries have raised our estimate
skilled workforce. Our goal is to significantly increase
of recoverable resources to more than 5 billion barrels
the earnings and cash flow generation capacity of
our business.
In last year’s volatile margin and price environment,
we generated earnings of $21 billion and cash flow from
operations and asset sales of $40 billion – the highest
of oil equivalent. We are fast-tracking development
and expect oil production to start in 2020. In another
deepwater development area, we increased our holdings
to approximately 2.3 million net acres in Brazil’s pre-salt
basins, where we plan to start drilling in 2019.
since 2014. This strong performance enabled us to
Onshore, we accelerated operations in the Permian
fund attractive investments, reduce debt, and increase
Basin in Texas and New Mexico, building on our 2017
the dividend by 6 percent – the 36th consecutive
annual increase.
acquisition of high-quality, contiguous acreage that
will enable significant low-cost production growth.
2
Our investments in this prolific region remain profitable
In our Chemical business, we moved forward on
from our operations and making products that help our
at $35 per barrel. Integration through transportation
13 new facilities to meet growing demand. Seven of
customers limit theirs. We are also leading the way in
investments linking this production to our refining and
these came online by the end of last year. The remaining
developing low-carbon technologies like carbon capture
chemical assets allows us to capture additional value –
six are on schedule. These investments, enhanced by
and storage and advanced biofuels.
from the wellhead to the consumer.
our technologies and global supply chain, are expected
And we are working to add additional low-cost
to support 30-percent sales growth by 2025.
ExxonMobil’s story spans more than 135 years. From
supplying the fuel and lubricants for the first airplane
production in Papua New Guinea and Mozambique,
Across all of our operations, we are committed to
in the early 20th century, to providing cleaner-burning
where we are progressing new liquefied natural gas
maintaining a safe work environment enriched by
natural gas to power entire cities today, it has been a
(LNG) projects.
diversity and characterized by open communications
history of meeting our customers’ changing needs and
Our successes in Upstream development were
recognized in 2018 by the World Oil and Gas Council,
and trust. We strive to continuously improve and achieve
expectations. It has been one of continual improvement
the highest standards of excellence in all that we do.
and innovation. And it has been a record of creating
when they honored ExxonMobil as “Explorer of the
This includes upholding the highest standards of
significant value for our shareholders and for society.
Year” – for the second consecutive year.
corporate citizenship. We maintain high ethical
Building on this history, I believe the chapter we are
In our Downstream business, we progressed six major
refining investments, all of which are advantaged
standards, obey all applicable laws, rules, and
writing today will be the most rewarding yet.
regulations, and respect local and national cultures.
versus industry. Three started up last year, including
We are also dedicated to reducing environmental
the Beaumont hydrofiner, the Antwerp delayed coker,
impacts and managing the risks of climate change.
and the Rotterdam advanced hydrocracker. These
Society faces a dual challenge: meeting growing energy
Downstream investments deliver higher-value products
needs while protecting the environment. ExxonMobil is
and are expected to generate 20-percent returns.
playing our part by reducing greenhouse gas emissions
Darren Woods
Chairman and CEO
3
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
2018 RESULTS AND HIGHLIGHTS
$21 BILLION
EARNINGS IN 2018
FINANCIAL HIGHLIGHTS
(millions of dollars, unless noted)
Earnings after
income taxes
Average
capital
employed(1)
Return on
average capital
employed (%)(1)
Capital and
exploration
expenditures(1)
CASH FLOW FROM
OPERATING ACTIVITIES
OF $36 BILLION, HIGHEST
SINCE 2014
FIVE ADDITIONAL
DISCOVERIES OFFSHORE
GUYANA IN 2018,
INCREASING RESOURCE
ESTIMATE TO MORE THAN
5 BILLION BARRELS
CAPTURED BENEFITS
FROM NORTH AMERICAN
CRUDE DIFFERENTIALS
WITH INTEGRATED
LOGISTICS AND
MANUFACTURING
CHEMICAL SALES GROWTH
RESULTED IN HIGHEST
ANNUAL VOLUMES IN
MORE THAN 10 YEARS
Upstream
Downstream
Chemical
Corporate and Financing
Total
14,079
6,010
3,351
(2,600)
20,840
177,874
25,740
30,420
(1,660)
232,374
7.9
23.3
11.0
N.A.
9.2
OPERATING HIGHLIGHTS
Liquids production (net, thousands of barrels per day)
Natural gas production available for sale (net, millions of cubic feet per day)
Oil-equivalent production(2) (net, thousands of oil-equivalent barrels per day)
Refinery throughput (thousands of barrels per day)
Petroleum product sales(3) (thousands of barrels per day)
Chemical prime product sales(3) (thousands of tonnes)
20,194
3,429
2,235
65
25,923
2,266
9,405
3,833
4,272
5,512
26,869
RETURN ON AVERAGE CAPITAL EMPLOYED (1)(4)
FUNCTIONAL EARNINGS AND NET INCOME
36 YEARS OF DIVIDEND GROWTH (6)
(1) See Frequently used terms on pages
(percent)
Corporate and Financing
Net income(5)
(billions of dollars)
5-year average
10-year average
Upstream Downstream Chemical
ExxonMobil
S&P 500
Consumer Price Index (7)
(dollars per share)
40 and 41.
(2) Natural gas converted to oil-equivalent
at 6 million cubic feet per 1,000 barrels.
(3) Sales data reported net of purchases/sales
contracts with the same counterparty.
(4) Competitor data estimated on a consistent
basis with ExxonMobil and based on
public information.
(5) Net income attributable to ExxonMobil.
(6) S&P 500 and CPI indexed to 1982 Exxon
dividend.
(7) CPI based on historical yearly average
from U.S. Bureau of Labor Statistics.
4
EXXONMOBIL
CHEVRON
SHELL
TOTAL
BP
40
30
20
10
0
–4
0
2
4
6
8
10
12 14
16
3.50
3.00
2.50
2.00
1.50
1.00
0.50
0
1982
1990
2000
2010
2018
2014
2015
2016
2017
2018
COMPETITIVE ADVANTAGES
TECHNOLOGY A steadfast commitment to investments in technology has led to a history of innovation and the development of
industry-advantaged assets, processes, products, and applications. Technology has allowed us to effectively respond to a dynamic and challenging
landscape with changes in sources of supply, consumer demand, and regulatory requirements. We invest in fundamental science and research,
leading to advances in existing processes and products, as well as new discoveries. This allows us to meet the evolving needs of society, lower
operating and project costs, and develop higher-value products and applications.
SCALE The size and breadth of our business provide a critical foundation for long-term success. It enables investments in the development
of advanced technologies by leveraging benefits across a large base of operations. Facilities and businesses operated consistently around the globe
accelerate experience and learning – replicating innovations, improving effectiveness, and driving down cost. Our size allows us to pursue a wide
range of value-accretive investments across the commodity price cycle – specifically taking advantage of counter-cyclical opportunities.
INTEGRATION Our business spans various hydrocarbon value chains from end-to-end, involving production of raw materials into high-
value fuels, lubricants, chemical products, and unique customer applications. We maximize value across the entire chain, ensuring the whole is greater
than the sum of the parts. As markets evolve and value shifts up or down the chain, we are positioned to capture it. The different sectors we serve and
products we make provide further diversification, helping to mitigate the impact of commodity price cycles. Our integrated business provides additional
scale, allows us to share support organizations and facility infrastructure, and capture synergies in organizational capabilities and competencies.
FUNCTIONAL EXCELLENCE An extensive history of running a complex global business with a focus on the long term has led to
a strong culture of consistently doing the right things, the right way, at a high standard. How we achieve results is as important as the results themselves.
Living this philosophy and learning from our collective experiences has resulted in deep knowledge in critical disciplines and industry-leading execution
capabilities. These strengths manifest themselves in all facets and functions of our business through a disciplined and consistently executed approach.
PEOPLE The above advantages and the synergies that exist between them have taken generations to establish and serve as the foundation
for our strategies. The benefits, though, are only realized through the commitment and hard work of our people – our most important advantage.
We strive to hire the best and develop world-class capabilities through challenging, cross-functional assignments and global experiences. Strong
retention and career-long tenures result in unmatched capabilities and knowledge, anchored in a culture of excellence.
5
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
$1 BILLION
INVESTED EACH YEAR IN RESEARCH
AND DEVELOPMENT
>10,000
PATENTS GRANTED
GLOBALLY SINCE 2009
>1,000
SCIENTIFIC PAPERS PUBLISHED
IN THE PAST 10 YEARS
PHOTO: An ExxonMobil scientist leverages an advanced
measurement apparatus to study the physical properties of
hydrocarbon fluids under a range of pressures and temperatures.
6
TECHNOLOGY
7
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
TECHNOLOGY RESULTS IN ADVANTAGED ASSETS, PROCESSES, AND PRODUCTS
Technology has led to the development of industry-
advantaged assets, processes, products, and
applications. We invest in fundamental science and
research, leading to advances in existing processes
and products, as well as new discoveries. This allows
us to meet the evolving needs of society, lower
operating and project costs, and develop higher-value
processes and products.
MANAGING SUBSURFACE UNCERTAINTY
Capabilities in subsurface definition and development
in the Upstream enable us to find more oil and natural
gas and maximize recovery from existing reservoirs.
Interpreting subsurface data and integrating multiple
geologic features is highly complex and begins with
fully leveraging the value of seismic data. Full Wavefield
Inversion technology harnesses complex algorithms and
exploits the power of high-performance computing.
As a result, we are better able to understand the rock
properties of each geologic layer.
An ExxonMobil scientist works on a recombination cell used to combine gases with liquid oil at high pressure to
produce a live oil mixture of fluid at in-situ reservoir conditions in support of calibrating advanced reservoir models.
The result of these subsurface technologies is an ability
developing catalyst and process technology result in
Additionally, a suite of proprietary, automated pattern-
to identify potential oil and natural gas deposits below
projects like the Rotterdam advanced hydrocracker,
recognition algorithms provides us with the ability
the surface and optimize investments in key growth
which started up at the end of 2018. This advantaged
to rapidly scan large 3D seismic surveys and identify
areas like Guyana, the Permian, and Brazil.
project deploys advanced catalysts within unique
direct hydrocarbon indicators. The application of
process configurations to produce Group II lube
this technology, combined with the use of integrated
UPGRADING PRODUCT PORTFOLIO
basestocks and ultra-low-sulfur fuels at a lower cost.
reservoir modeling and simulation technologies,
Technology enables us to upgrade and expand
The Rotterdam site profitability is expected to double
leads to a rich picture of the subsurface. This enables
product offerings in our Downstream and Chemical
as a result of the investment.
geoscientists and engineers to make informed
businesses, with the objective of making more of the
investment decisions by efficiently predicting reservoir
higher-performing, higher-value products the market
performance throughout the life of an asset.
and consumers demand. Decades of experience in
We will apply similar technology at our Singapore
petrochemical facility, with a planned future project to
8
DOWNSTREAM PROJECT
RETURNS AVERAGE 20%,
SUPPORTED BY OUR
ADVANTAGED TECHNOLOGY
INVESTING TO CAPTURE GROWTH IN
sugars from wood, grass, and agricultural waste into
DEMAND OF LOWER-CARBON SOLUTIONS
biodiesel. We also continued efforts to develop scalable
We are investing in research to develop scalable and
and economically viable carbon capture and storage.
affordable technologies to meet the growing demand
Research and development in this area focused on our
for lower-emission fuels, identify economic carbon
partnership with FuelCell Energy, Inc. and the potential
capture, utilization, and storage (CCUS) solutions, and
to capture carbon dioxide (CO2) while also generating
upgrade high-sulfur residual streams into Group II lube
reduce the intensity of existing manufacturing processes.
power using a fuel cell. We also progressed efforts
basestocks and low-sulfur fuels.
The company made significant progress in 2018 on
In addition, we are deploying new products, including
an algae biofuels program with partner Synthetic
to identify new materials for CO2 capture and assess
multiple new CO2 utilization and storage options.
premium transportation fuels and lubricants that
Genomics, Inc., and on cellulosic biofuels with partner
Another area of ongoing research involves developing
provide higher levels of efficiency and new performance
Renewable Energy Group. Successes included initiation
low-energy membrane and adsorption technologies
chemical products that enable low-cost, lighter-weight
of outdoor algae pond experimentation and a substantial
that could replace the energy-intensive separation
automotive parts.
improvement in the bioconversion of cellulose-derived
processes that exist today.
TECHNOLOGY: EXXONMOBIL CONTINUES A LEGACY OF TECHNOLOGY BREAKTHROUGHS
ExxonMobil has a proven track record of discovering, developing, and commercializing advantaged technology at scale. The company’s history of innovations includes
more-durable tires, 3D seismic imaging, and extended-mileage lubricants. With consistent and ongoing investments in technology, we seek to improve efficiency, promote
enhanced resource recovery and product margins, and identify next-generation opportunities.
Synthetic
rubber tires
1940s
Synthetic
catalysts
1950s
3D seismic
imaging
1960s
Synthetic
motor oil
1970s
Lithium
batteries
1980s
Ultra-deepwater
drilling
Large
LNG ships
Extended-life
lubes
1990s
2000s
2010s
9
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
SCALE
10
APPROXIMATELY
2.5 BILLION
BARRELS OF CRUDE HANDLED
ANNUALLY ACROSS OUR BUSINESSES
APPROACHING
2 BILLION
SENSOR READINGS PER DAY IN OUR
MANUFACTURING FACILITIES
MANAGING NEARLY
100,000
SUPPLIERS GLOBALLY
PHOTO: With the start-up of the 1.5-million-tonnes-per-year
ethane cracker, the ExxonMobil Baytown, Texas, complex
is one of the largest integrated refining and petrochemical
complexes in the world.
11
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
SCALE BRINGS UNIQUE SET OF ADVANTAGES
The size and breadth of our business provide a
critical foundation for long-term success. It enables
investments in the development of advanced
technologies by leveraging benefits across a large
base of operations. Facilities and businesses operated
consistently around the globe accelerate experience
and learning – replicating innovations, improving
effectiveness, and driving down cost. Our size allows us
to pursue a wide range of value-accretive investments
across the commodity price cycle – specifically taking
advantage of counter-cyclical opportunities.
INDUSTRY-LEADING
INVESTMENT PORTFOLIO
We have a high-quality portfolio of investment
opportunities across our businesses, involving a broad
range of resource types and high-value products.
The Upstream portfolio includes five key developments:
under construction and expected to be operational in early 2020.
the Permian in the United States; Guyana; Brazil;
Successful exploration offshore Guyana continued with five additional discoveries in 2018. The first FPSO vessel is
Mozambique; and Papua New Guinea (PNG). We are
and offloading (FPSO) vessels and related infrastructure
In the Downstream, we are investing to increase the
the most active operator in the Permian Basin, where an
to support the production of at least 750,000 barrels
production of higher-value products. This includes
innovative development approach will provide decades
of oil per day by 2025. In Brazil, we captured more
upgrading nearly 200,000 barrels per day of fuel oil into
of low-cost, highly profitable production, and serve
acreage than any other major international oil company
higher-quality Group II lube basestocks, chemicals, and
as an attractive feedstock for U.S. Gulf Coast
over the past year, further expanding our attractive
lower-sulfur distillates by 2025. We completed three
manufacturing plants.
deepwater portfolio.
In Guyana, we have discovered more than 5 billion
We are also developing low-cost LNG supplies in
oil-equivalent barrels from 10 exploration discoveries
the United States, PNG, and Mozambique. These
through 2018. Our extensive global experience
developments will leverage our extensive technical,
developing deepwater resources will facilitate efficient
operational, and project experience in large-scale, frontier
deployment of at least five floating production, storage,
LNG developments.
of these projects in 2018. In Beaumont, we started up
a hydrofiner to produce cleaner, lower-sulfur gasoline.
We also commenced a delayed coker in Antwerp,
Belgium, to upgrade heavy residual products and started
up the Rotterdam, Netherlands, advanced hydrocracker
to produce Group II basestocks.
12
FINANCIAL STRENGTH
MAXIMIZES INVESTMENT
FLEXIBILITY
LEARNING AND OPTIMIZATION
sites will connect to the data lake by 2020. By applying
We leverage our global footprint to optimize strategies
advanced analytics to this abundance of data, we can
for operating and maintaining essential equipment like
identify new approaches to run sites more efficiently and
heat exchangers, compressors, and pumps. For example,
potentially with fewer emissions.
we manage more than 30,000 pieces of heat transfer
Additionally, we progressed key projects in Singapore,
equipment and nearly 500 critical compressor units
Fawley, and Beaumont, where we will expand refining
across our manufacturing facilities. This scale allows us
capacity to process light Permian crudes.
to identify and deploy equipment strategies efficiently,
In the Chemical business, we have started up seven new
facilities since 2017 and are planning the completion
resulting in a significant reduction in risk and increased
reliability across our global equipment fleet.
of another six projects by 2025, supported by growing
In addition, centralizing analysis of real-time data across
demand for high-performance chemical products. The
our manufacturing sites accelerates learning and allows
Singapore butyl plant, the Newport elastomer plant
us to optimize operations. For example, we are leveraging
expansion, and the Baytown ethane cracker all started up
a globally scaled data lake platform that will further
in 2018. We are also progressing additional investments in
enable us to collect operating data from our refineries
the United States and Singapore. These new facilities will
and chemical plants. We expect to capture more than
result in a 40-percent increase in manufacturing capacity
2 billion sensor readings per day into this high-performing
in North America and Asia.
computing environment. All of our global manufacturing
SCALE: FINANCIAL STRENGTH
Our industry-leading financial strength provides us
with the capacity to invest throughout commodity
price cycles, taking particular advantage of counter-
cyclical opportunities.
As a result, we are positioned to deliver projects with
lower costs and higher returns versus industry. It also
allows us to pursue a broad portfolio of investment
opportunities, while also meeting our commitment to
pay a reliable and growing dividend.
LEVERAGE, YEAR-END 2018 (1)
Total capitalization (billions of dollars)
400
300
200
100
0
0
EXXONMOBIL
AA+/Aaa
SHELL
AA-/Aa2
CHEVRON
AA/Aa2
BP
A-/A1
TOTAL
A+/Aa3
5
10
15
20
Leverage (percent)
25
30
(1) Total capitalization defined as “net debt + market capitalization”; leverage defined as “net debt/total capitalization.”
We also have the largest inventory of operated horizontal
wells in the United States at more than 6,600, providing
our engineering and subsurface experts with one of the
most extensive databases in the industry with which to
learn and optimize development and operating plans.
To fully leverage the tremendous amount of data we
have and the scale advantage it provides, we deploy a
network of technology centers around the world, staffed
with scientists and engineers who collaborate globally
with manufacturing sites, production units, projects,
and ventures across the Upstream, Downstream, and
Chemical business lines. Enabled by access to global
data, these engineers drive manufacturing excellence
by monitoring, analyzing, and optimizing process units
and equipment fleets around the world. Our technology
centers are seamless extensions of our production
and manufacturing sites, providing valuable technical
solutions that we replicate across our global network.
Best practices across similar assets are quickly and
broadly applied, which leads to effective prioritization
and efficient execution of high-value optimization
opportunities. Equipment monitoring and process analysis
enable global manufacturing circuit optimization efforts
and are anticipated to generate more than $500 million
in cumulative earnings contribution in our Downstream
business between 2017 and 2020.
13
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
$1 BILLION
IN VALUE CAPTURE FROM
NORTH AMERICA INTEGRATION
TAKEAWAY CAPACITY FOR
>100 PERCENT
OF OUR PERMIAN CRUDE PRODUCTION
12 INTEGRATED
SITES IN NINE COUNTRIES
PHOTO: We continue to progress the integration of the Singapore
Banyan facility, acquired in 2017, with our nearby integrated
refining and petrochemical complex, realizing product and
logistical synergies.
14
INTEGRATION
15
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
INTEGRATION MAXIMIZES VALUE ACROSS THE ENTIRE VALUE CHAIN
We maximize value across the entire value chain,
ensuring the whole is greater than the sum of the
parts. The different sectors we serve and products
we make provide further diversification, helping
to mitigate the impact of commodity price cycles.
Our integrated business provides additional scale,
allows us to share support organizations and facility
infrastructure, and capture synergies in organizational
capabilities and competencies.
NORTH AMERICA INTEGRATION
An excellent example of the value of integration involves
our North American operations, where our Upstream
business produces oil and natural gas in the Permian and
other basins. Permian crude volumes are transported
via integrated midstream assets to refineries and
Leaders from the Upstream, Downstream, and Chemical organizations working together at the Houston campus to
chemical complexes along the U.S. Gulf Coast and in
the Midwest, where they are upgraded to higher-value
capture opportunities along the integrated Permian value chain.
fuels and products for global markets. We also create
our production in Western Canada and is well positioned
SYNERGIES ACROSS ALL BUSINESS LINES
value by processing high-quality Permian crudes at
to respond to market dynamics, enabling maximum value
Nearly 80 percent of our refining capacity is integrated
manufacturing locations in Europe and Asia, including
capture. In the Permian, we leveraged excess pipeline
with chemical or lubricant manufacturing plants. At
our Singapore steam cracker.
takeaway capacity and terminal assets to transport
these integrated sites, we realize significant savings by
By maximizing integration across the entire value chain,
we capture incremental value at transfer points or when
short-term market disconnects occur. For example,
when crude prices declined in the Permian and Western
Canada in 2018, mainly driven by industry pipeline
constraints, we leveraged our logistics capacity to move
the lower-cost feedstocks into our refinery network. The
Edmonton Rail Terminal provides logistics capacity for
crude efficiently – including both equity- and third-party
sharing resources, using interconnected facilities, and
crude – to the U.S. Gulf Coast. Capturing these market
coordinating operating practices. Integration increases
opportunities across the value chain resulted in an
margins by lowering the cost of feedstocks while
estimated $1 billion benefit in 2018. As Permian crude
enabling the production of the highest-value products.
production grows, we continue to expand our logistics
footprint beyond the level of equity production to retain
this advantage and create feed flexibility for our global
refining and chemical assets.
An example of this integration is found at our Singapore
manufacturing complex, where we are investing in an
integrated project that will use proprietary catalyst and
process technology to upgrade refinery residual products
16
NEARLY 80% OF OUR
REFINING AND CHEMICAL
FACILITIES ARE INTEGRATED
INTEGRATION: PERMIAN BASIN DEVELOPED AS AN INTEGRATED ASSET
Integration in the Permian Basin allows us to connect high-value light Permian crude to demand centers on
the U.S. Gulf Coast (USGC), including facilities in Baytown and Beaumont. Further development of the logistics
network will provide flexibility to move cost-advantaged feedstocks to our refineries and chemical plants in
the Americas, Asia Pacific, and Europe.
and chemical steam-cracked tar into higher-value fuels,
chemicals, and lubricants. In addition, we continue to
integrate the Singapore Banyan aromatics facility, one
of the world’s largest aromatics plants, with our existing
refining and chemical complex. Following acquisition of
the facility in 2017, we are progressing the integration of
the site with our adjacent petrochemical facility through
pipelines, enabling further optimization of site profitability
through improved feed and energy costs, enhanced
molecule management, and increased utilization of
existing logistics capabilities. We expect completion of
these activities in 2019, ahead of schedule, resulting in
accelerated value capture.
These applications of technology, coupled with scale and
integration, will position our Singapore refinery in the
top quartile of global refinery competitiveness and will
further increase the site’s competitive advantage gained
from cracking crude into chemical products.
We also applied extensive Downstream experience
to implement a multivariable control system at the
Shute Creek treating facility at the LaBarge natural gas
field, increasing production and improving product
purity. Multivariable control allows the plant to run
closer to capacity and specification limits by optimizing
operational parameters simultaneously.
N E W
M E X I C O
T E X A S
UPSTREAM
Permian
Basin
Midland
Wink
CHEMICAL
Baytown
Mont Belvieu
Beaumont
Baton Rouge
LOUISIANA
Existing
Under development
Downstream refining
Chemical manufacturing
LOGISTICS
Webster
Beaumont
Baytown
Baton Rouge
REFINING
UPSTREAM
DOWNSTREAM
CHEMICAL
Equity Permian production USGC logistics capacity
USGC refining capacity
Flexible feed options
2018
0.2 Moebd
2022
0.8 Moebd
0.3 Mbd
1 Mbd
0.4 Mbd Light crude
1.7 Mbd Total crude
0.8 Mbd Light crude
2.1 Mbd Total crude
Singapore steam cracker
Singapore steam cracker
Singapore Banyan facility
Asia liquids cracker
17
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
FUNCTIONAL
EXCELLENCE
18
AN INDUSTRY LEADER IN
SAFETY
PERFORMANCE
>25 GLOBAL
MANUFACTURING NETWORKS
30% MORE
EFFICIENT EXECUTION OF
COMPLEX UPSTREAM PROJECTS
VERSUS COMPETITION(1)
PHOTO: Thoughtful, proactive risk management actions and
safeguards are some of the most important things we do.
(1) Source: ExxonMobil and Wood Mackenzie
19
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
FUNCTIONAL EXCELLENCE MAXIMIZES VALUE OF EXISTING OPERATIONS AND NEW PROJECTS
An extensive history of running a complex global
business with a focus on the long term has led to a
strong culture of consistently doing the right things,
the right way, at a high standard. Living this philosophy
and learning from our collective experiences has
resulted in a deep knowledge in critical disciplines
and industry-leading execution capabilities. These
strengths manifest themselves in all facets and
functions of our business through a disciplined and
consistently executed approach.
OPERATIONAL EXCELLENCE
We rigorously apply management systems worldwide to
ensure consistent application of the highest operational
standards. Our Operations Integrity Management System
(OIMS) provides a systematic, structured, and disciplined
approach to manage risk and drive accountability for
safety, security, health, and environmental performance
across business lines, facilities, and projects.
Employees effectively manage the complexity of our manufacturing facilities around the world.
To meet the expectations established by OIMS, we
simulators, virtual reality, and experiential training allow
training to develop and maintain core competencies.
leverage global best practices across all of our businesses
employees to experience real-life situations in a controlled
In addition to the competency of individuals, we also
to standardize work processes that eliminate or mitigate
environment, reinforcing their understanding of risks and
evaluate the overall capability of our teams. At our
significant safety, health, or environmental risks. Examples
safeguards. Training equips our employees with the skills
manufacturing sites, when assessing the competency
of these best practices include the application of electrical
and knowledge to respond appropriately to circumstances
level of functional teams, we evaluate succession plans
isolation, confined space entry, and crane and lifting
that could lead to serious events.
for anchor positions, which are staffed by highly skilled
operations.
A process console operator, for example, will undergo up
In addition, our competency assurance systems provide
to three weeks of training on a simulator as part of his or
structured processes to ensure personnel have the
her learning curriculum to ensure the appropriate level
knowledge and skills to operate and maintain facilities in
of competency. Across our Upstream, we have identified
a safe and effective manner. To support this objective,
more than 6,000 critical positions that require rigorous
individuals who provide organizational memory and serve
as coaches, mentors, and problem solvers. These anchor
positions account for approximately 15 percent of our
manufacturing workforce.
20
FUNCTIONAL EXCELLENCE: PROJECT
MANAGEMENT – U.S. GULF COAST GROWTH
VENTURE (GCGV)
Experts from procurement, research and
development, and Chemical organizations
worked together to develop a rail and pipeline
terminal solution for a new petrochemical project
on the U.S. Gulf Coast. The cross-functional
team executed a complex commercial strategy
to reduce cycle times, meet an aggressive
project schedule, and reduce costs. A flexible
contracting strategy and unique synchronization
of construction, combined with a long-term
operational contract, allowed third-party logistics
experts to capitalize on their deep technical
expertise to shape the design. This integrated
approach resulted in a unique design, captured
efficiencies in design and operations, and will
deliver state-of-the-art terminals.
OVER $1 BILLION OF
PROJECT SAVINGS
IN MANUFACTURING
We apply project learnings and experience in the Upstream
to the Downstream and Chemical business lines as well.
For example, Upstream project development expertise is
facilitating modular development of a future petrochemical
complex in San Patricio, Texas, in the United States.
BEST PRACTICE DEVELOPMENT
Modular development – a common practice in Upstream
A series of global networks provide the platform to develop
projects – involves constructing equipment off-site at a
best practices and drive performance improvement.
lower cost, and then transporting it to the site fully built.
These networks leverage the deep knowledge base and
We also successfully utilized this practice in the construction
scale of ExxonMobil and create a collaborative problem-
of the Antwerp delayed coker and the Rotterdam advanced
solving approach. Our global manufacturing network,
hydrocracker. This process of modular development
for example, involves leaders and technical experts from
improves project execution efficiency and lowers costs by
across our businesses and covers such dimensions as safe
sourcing construction globally.
operations, operational excellence, operator training, and
environmental performance.
We aggressively identify efficiencies and cost reductions
during project design and development, such as the
We also look externally to identify and implement best
implementation of facility-related optimizations that
practices. We are implementing enhancements identified
reduce plant complexity. In Downstream and Chemical
from a recent comprehensive, multiyear review of our
projects, these efforts delivered significant value in
process safety practices compared to those employed by
2018, with more than $1 billion in savings via design
companies in the oil and gas, specialty chemicals, nuclear
and execution optimization. For example, an integrated
power generation, and aviation industries.
team with personnel from our Chemical, research and
development, and procurement organizations partnered to
SUPERIOR PROJECT EXECUTION
design a control center for a grassroots plant in Baytown.
A rigorous approach to project development, supported
Visibility into strategic supplier offerings allowed the cross-
by decades of large-scale project experience across
functional team to identify an alternative approach by
multiple geographies and resource types, is enabling key
using a modular designed control center, which resulted in
developments like Guyana, where the pace of project
a cost-competitive alternative to the traditional stick-built
execution is outperforming industry averages.
design, with savings of 50 percent. This concept establishes
a benchmark going forward, resulting in a step-change in
new control center construction design.
21
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
160 NATIONALITIES
REPRESENTED IN OUR WORKFORCE
30 YEARS
AVERAGE SERVICE OF CAREER EMPLOYEES
>2,200 PhD’s
EMPLOYED AT EXXONMOBIL
PHOTO: Employees from Guyana participate in the training
and development of our local workforce.
22
PEOPLE
23
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
PEOPLE ARE OUR MOST IMPORTANT COMPETITIVE ADVANTAGE
The benefits of our competitive advantages are only
realized through the commitment and hard work of
our people. Our long-term development approach
is built on challenging, cross-functional assignments
and global experiences. The result is a workforce with
world-class capabilities and knowledge, anchored in
a culture of excellence.
PEOPLE DEVELOPMENT PHILOSOPHY
We place a priority on maximizing the development of
each one of our employees. It begins with recruiting
exceptional talent and continues with individually
planned assignments and experiences that lead to broad
skill development and a deep understanding of our
businesses. This career-oriented, personalized approach
results in a retention rate of 96 percent and an average
length of service of 30 years for our career employees.
It also facilitates development of the next generation of
leaders from within the company.
We develop future leaders from within the company, drawing upon our diverse employee population. Employees are
developed for professional and leadership roles, both in their home countries and globally.
CROSS-FUNCTIONAL DEVELOPMENT
This approach maximizes the contribution of each
Our unique scale and integrated business model enable
employee and results in better, more-informed decisions
broad development across functions, business lines,
at all levels of the organization. It also facilitates an
We set high performance expectations, foster a
and geographies. In fact, one-third of our managerial
integrated approach to how we operate facilities, execute
work environment in which every employee has the
and professional workforce have had one or more
projects, and invest in assets. Our employees possess
opportunity to excel, and reward employees based on
assignments outside of their primary function, and
diverse experiences and knowledge that allow us to
their performance and contributions.
one-fifth of our employees have worked outside
identify and capture benefits across the value chain.
Through a combination of work assignments, on-the-job
experiences, and focused training and education,
employees acquire the necessary skills and competencies
to take on increasing levels of responsibility and job
complexity.
their home country. The result is a high level of
integrated knowledge, skills, and experiences. Cross-
functional assignments across business lines, support
organizations, and geographies provide employees with
a greater understanding of the end-to-end business and
promote diversity of thought and perspective.
An example of this is in the Permian, where an integrated
team is contributing to an innovative approach to the
development of this important asset from wellhead to
manufacturing. Each employee on the team has had
at least one cross-functional assignment in his or her
career, which provides a unique perspective on how we
create integrated value.
24
WE VALUE A DIVERSE
WORKFORCE THAT IS
REPRESENTATIVE OF
WHERE WE DO BUSINESS
The Rotterdam advanced hydrocracker project is
another example of how we leveraged a diverse set of
skills and knowledge to deliver value. Integrated teams
worked together to identify proprietary technologies,
form a business case, construct associated facilities, and
PEOPLE AND TECHNOLOGY
such as proprietary algorithms to support seismic data
We are a science and technology company, and
processing, new catalysts, high-strength steel, and
technical expertise and leadership are fundamental
advanced statistical methods.
to our long-term success. Ensuring focused career
development in the areas of research and technology
enables employees to deliver innovative solutions.
Additionally, the World Oil and Gas Council named
ExxonMobil “Large Cap Company of the Year” and
“Explorer of the Year” in 2018. These awards and many
We employ more than 16,000 engineers and 2,200
others are a reflection of the world-class capabilities
PhD’s across multiple disciplines, including petroleum
and knowledge of our employees and their commitment
engineering, manufacturing technology, behavioral
to excellence.
science, mathematics, and biology.
market high-value products. Experts from the lubricants
Such a diverse, technical workforce brings broad
value chain proved critical to the success of the project
perspectives that drive innovation and the development
by establishing a customer base and supply chain
of proprietary technologies. Over the past decade, our
and supporting knowledge transfer to the Rotterdam
employees have registered an average of more than
refinery, which had not previously manufactured
1,000 new patents each year, with a record high of 1,700
lubricants products.
in 2018. These patents cover a wide range of technology,
LONG-TERM COMMITMENT
ExxonMobil invests in our people for a long-term
career. We spend an average of $100 million per year on
training and in 2018 had more than 25,000 job rotations
in support of development plans.
PEOPLE: COMPETENCY DEVELOPMENT WITHIN RESEARCH AND DEVELOPMENT
ExxonMobil research engineers, scientists, and laboratory staff work around the world in Upstream,
Downstream, and Chemical research and development organizations.
A standard competency model is applied to all research and technology positions. The competency model sets
expectations for technical skill proficiency and behavioral effectiveness. Specific skill expectations for R&D
leadership allow us to identify and develop future technical leaders. Establishing proficiency standards and
defining key experiences and career journeys provide the context for ongoing individual-supervisor coaching
that addresses the needs of the business while also developing individuals.
Human resources and research organization leadership have collaborated to form a research and technology
talent strategy that is linked to business strategy. This approach systematically sharpens the focus of recruiting
and informs employee development plans. A strategic approach to talent management enables forward-
looking skill development and allows us to mobilize talent across the company to the area of most importance.
We aim to place the right people on the right projects, at the right time, across our global businesses.
25
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
3.8
MILLION
OIL-EQUIVALENT
BARRELS OF NET
OIL AND GAS
PRODUCTION
PER DAY(1)
26
5.5
MILLION
BARRELS OF
PETROLEUM
PRODUCT SALES
PER DAY(2)
26.9
MILLION
TONNES OF
CHEMICAL
PRIME PRODUCT
SALES(2)
Countries with ExxonMobil operations
Upstream
Downstream
Chemical
GLOBAL OPERATIONS
EARNINGS BY BUSINESS SEGMENT
(5-year average)
As the world’s largest publicly held international oil and gas company, ExxonMobil has a diverse portfolio
of high-quality assets and projects across our Upstream, Downstream, and Chemical businesses.
DOWNSTREAM
UPSTREAM
CHEMICAL
UPSTREAM: ONE OF THE LARGEST AND
MOST DIVERSE UPSTREAM COMPANIES,
WITH ACTIVE PRESENCE IN 41 COUNTRIES
With a diverse portfolio, we are active in all aspects of the Upstream, from exploring,
developing, and producing, to marketing hydrocarbon resources around the world.
RETURN ON AVERAGE CAPITAL EMPLOYED (3)
(percent)
2018
10-year average
UPSTREAM
DOWNSTREAM
CHEMICAL
0
5
10
15
20
25
DOWNSTREAM: ONE OF THE WORLD’S
LARGEST INTEGRATED REFINERS AND
MARKETERS OF FUELS AND LUBRICANTS
Our portfolio includes refining and lubricant blending facilities in 25 countries.
We are one of the largest integrated refiners and marketers of fuels and lube
basestocks, as well as a leading manufacturer of petroleum products and
finished lubricants.
(1) Natural gas converted to oil-equivalent at 6 million cubic feet
per 1,000 barrels.
(2) Sales data reported net of purchases/sales contracts with the
same counterparty.
(3) See Frequently used terms on pages 40 and 41.
CHEMICAL: ONE OF THE MOST
PROFITABLE CHEMICAL COMPANIES,
WITH OPERATIONS IN 16 COUNTRIES
A unique portfolio of world-class manufacturing facilities, advantaged technology,
and high-performance products delivers strong shareholder value.
27
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
EXXONMOBIL’S UPSTREAM IS A
GLOBAL LEADER IN THE EXPLORATION,
DEVELOPMENT, AND PRODUCTION
OF OIL AND NATURAL GAS RESOURCES
RESULTS AND HIGHLIGHTS
Strong financial and operational performance
Liquids growth of more than 3 percent, excluding impact of entitlements and divestments
Most active operator in the Permian, with 44 rigs at the end of 2018
Five additional discoveries in Guyana, bringing total discovered resources to more than 5 billion barrels gross
Brazil deepwater acreage position increased to 2.3 million net acres
Proved oil and natural gas reserves additions of 4.5 billion oil-equivalent barrels
Exploration discoveries totaling more than 700 million oil-equivalent barrels, driven by Guyana and Brazil
UPSTREAM STATISTICAL RECAP
2018
2017
2016
2015
2014
Earnings (millions of dollars)
Liquids production (net, thousands of barrels per day)
14,079
13,355
2,266
2,283
196
2,365
7,101
2,345
27,548
2,111
Natural gas production available for sale (net, millions of cubic feet per day)
9,405
10,211
10,127
10,515
11,145
Oil-equivalent production(1) (net, thousands of barrels per day)
Proved reserves replacement ratio(2)(3) (percent)
Resource additions(3) (millions of oil-equivalent barrels)
3,833
318
1,297
3,985
189
9,763
4,053
–
2,453
4,097
69
1,378
3,969
111
3,206
Average capital employed(3) (millions of dollars)
177,874
174,674
170,055
169,954
164,965
Return on average capital employed(3) (percent)
7.9
7.6
0.1
4.2
16.7
Capital and exploration expenditures(3) (millions of dollars)
20,194
16,695
14,542
25,407
32,727
PHOTO: As the most active operator in the Permian
at year-end 2018, we are focused on safe, reliable
operations to support growth.
(1) Natural gas converted to oil-equivalent at 6 million cubic feet per 1,000 barrels.
(2) Proved reserves exclude asset sales.
(3) See Frequently used terms on pages 40 and 41.
Note: Unless otherwise stated, production rates, project capacities, and acreage values are gross.
28
BUSINESS FUNDAMENTALS
Demand for oil is expected to increase approximately 20 percent from 2016 to 2040 and will remain the primary
source of energy for commercial transportation and continue to serve as a critical feedstock for chemical products.
Natural gas demand is expected to grow nearly 40 percent over the same period, largely from expanding industrial
activity and increasing use in power generation as utilities look to switch to lower-emission fuels.
To meet this demand and offset natural decline rates of approximately 5 to 7 percent per year, increased supplies,
requiring significant investment, for both oil and natural gas are needed. We also expect global liquefied natural
gas (LNG) volumes to more than double by 2040, primarily to supply Asian and European markets.
COMPETITIVE ADVANTAGES
Proprietary exploration technologies were key to the discovery of more than 5 billion barrels of resource in
Guyana across 10 discoveries through 2018. Guyana is one of the most significant play openings across the
industry in recent years. These discoveries are enabling us to rapidly build a portfolio of deepwater projects that
will leverage our leading project-development expertise.
We leveraged scale and financial capacity to aggressively bid for attractive acreage in Brazil, acquiring more
acreage than any other major international oil company in recent years. We now possess a high-quality portfolio
of deepwater development and exploration opportunities in Brazil with multibillion-barrel potential.
The combined fundamentals of low-cost development, an integrated business model, and a continued focus
on technology are allowing us to maximize value from the Permian. We are positioned to deliver decades
of low-cost, highly profitable production that will move through an efficient logistics network and serve as
advantaged feedstock for U.S. Gulf Coast refineries and chemical plants.
We demonstrate functional excellence with leading technical and commercial capabilities that are critical to
developing some of industry’s lowest-cost LNG supplies in the frontier countries of Papua New Guinea and
Mozambique. These developments will strengthen our global LNG portfolio and will leverage our technical,
operational, and project experience in frontier areas.
In 2018, the World Oil and Gas Council recognized ExxonMobil as the “Explorer of the Year” for the second
year in a row. The award is a recognition of the talented people working in our Upstream and the success they
have achieved in discovering world-class resources.
GROWING EARNINGS, CASH FLOW,
AND ROCE BY…
PROFITABLY GROWING PERMIAN
PRODUCTION TO MORE THAN
1 MILLION OIL-EQUIVALENT BARRELS
PER DAY NET BY 2024
RAPIDLY PROGRESSING DEEPWATER
EXPLORATION AND DEVELOPMENT
IN GUYANA AND BRAZIL TO DELIVER
>900 KBD PRODUCTION BY 2025
STARTING UP NEW LNG PROJECTS
IN MOZAMBIQUE AND
PAPUA NEW GUINEA, WITH
POTENTIAL TO ADD MORE THAN
25 MTA OF CAPACITY BY 2025
HIGHGRADING EXISTING PORTFOLIO
THROUGH IMPROVEMENTS IN
BASE OPERATIONS, ACQUISITIONS,
AND DIVESTMENTS
29
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
EXXONMOBIL’S DOWNSTREAM IS
ONE OF THE WORLD’S LARGEST
MANUFACTURERS AND MARKETERS
OF FUELS AND LUBRICANTS
RESULTS AND HIGHLIGHTS
Achieved strong safety performance
Completed three major refinery investments in Beaumont, Antwerp, and Rotterdam, increasing
production of higher-value fuels and lubricant products
Expanded branded retail presence with introduction of the Mobil brand in Canada, growth in Europe
and Mexico, and expansion of Synergy fuels
Increased lubricants and fuels sales volume in growing markets
Acquired PT Federal Karyatama’s lubricant business, strengthening ExxonMobil’s position in Indonesia
and building on the Mobil lubricant brand in a key growth market
Highgraded portfolio, with divestment of Germany retail assets and Augusta refinery in Italy
DOWNSTREAM STATISTICAL RECAP
2018
2017
2016
2015
2014
Earnings (millions of dollars)
Refinery throughput (thousands of barrels per day)
Petroleum product sales(1) (thousands of barrels per day)
6,010
4,272
5,512
5,597
4,291
5,530
4,201
4,269
5,482
6,557
4,432
5,754
3,045
4,476
5,875
Average capital employed(2) (millions of dollars)
25,740
22,514
21,804
23,253
23,977
Return on average capital employed(2) (percent)
Capital expenditures(2) (millions of dollars)
23.3
3,429
24.9
2,524
19.3
2,462
28.2
2,613
12.7
3,034
(1) Petroleum product sales data reported net of purchases/sales contracts with the same counterparty.
(2) See Frequently used terms on pages 40 and 41.
PHOTO: At our Antwerp, Belgium, refinery, we started
operations of a new 50,000-barrel-per-day delayed
coker in 2018 to upgrade heavy residual products
into higher-value fuels.
30
BUSINESS FUNDAMENTALS
Global demand for fuels and lubricant products is directly linked to economic activity. Fuel demand
for commercial transportation is expected to increase over the next two decades, driven by diesel and jet fuel,
while worldwide gasoline demand will likely peak and then begin declining with increasing fuel efficiency and
electric vehicle penetration.
Finished lubricant demand is expected to grow, with high-value synthetic lubricants significantly outpacing
industry growth. Demand for higher-value grades of lube basestocks will grow by approximately 30 percent by
2025, as consumer preferences for higher-performing finished lubricants products increase.
COMPETITIVE ADVANTAGES
A long-standing history of catalyst and process technology leadership underpins project returns of more than
20 percent on average and the development of high-quality products like Mobil 1, Synergy, and Diesel Efficient.
Through application of technology, we have a strong portfolio of advantaged manufacturing sites in key demand
centers globally, supported by a rich product and marketing offer, with market leadership in synthetic lubricants.
We operate some of the largest manufacturing facilities in the industry, with a total processing capacity of
4.7 million barrels per day. Leveraging our global scale and technology investments, we are now the largest
Group I and Group II basestocks producer globally, which helps ensure product integrity and reliable global
supply of consistent and innovative lube basestocks.
Integration across Upstream, Downstream, and Chemical business lines enables us to lower production costs
and ensures molecules are upgraded to their highest possible value. Leveraging our Upstream position in the
Permian, we are capturing value along the value chain through investments in light-crude capacity processing
at our U.S. Gulf Coast manufacturing facilities, and in logistics to efficiently move crude domestically and
internationally.
Combining functional excellence with scale and integration, our worldwide refining cash operating costs are
15 percent lower than the industry average. In addition, our project development and execution capabilities
enable us to invest in existing refineries at less-than-grassroots project costs and integrate new technologies into
existing plants, such as the addition of new light-crude capacity at the Beaumont refinery and the introduction
of the advanced hydrocracker in Rotterdam.
Critical anchor positions in the Downstream business are filled by highly skilled people with in-depth technical
knowledge, demonstrated leadership, and significant institutional knowledge. These 2,800 employees are
coaches and mentors to their functional teams and serve important roles in supporting safe and reliable
operations at our facilities.
GROWING EARNINGS, CASH FLOW,
AND ROCE BY…
CAPTURING FULL VALUE-CHAIN
BENEFITS, INCLUDING PERMIAN
LOGISTICS INTEGRATION WITH
U.S. GULF COAST MANUFACTURING
FACILITIES
PROGRESSING SIX KEY REFINERY
PROJECTS TO PRODUCE MORE
HIGHER-VALUE DISTILLATES, LUBES,
AND CHEMICALS BY 2025
GROWING INDUSTRY-LEADING
LUBE BASESTOCK AND SYNTHETIC
LUBRICANTS BUSINESSES
EXPANDING FUELS AND LUBRICANTS
BRAND PRESENCE IN GROWING
MARKETS SUCH AS INDONESIA
AND MEXICO
31
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
EXXONMOBIL CHEMICAL IS ONE OF
THE WORLD’S MOST PROFITABLE
CHEMICAL COMPANIES
RESULTS AND HIGHLIGHTS
Achieved strong safety performance
Started up a new 1.5-million-tonnes-per-year ethane cracker in Baytown to supply low-cost
feedstock to our U.S. Gulf Coast derivative facilities
Completed several key projects in Singapore, with the integration of the Banyan aromatics facility
and our existing Singapore chemical complex, and the completion of the butyl rubber and
adhesion resin projects
Progressed development of the Gulf Coast Growth Venture in San Patricio County, Texas,
with partner SABIC
Signed cooperation framework agreement with Guangdong Provincial People’s Government
for a new chemical complex in China
Launched new Achieve Advanced Polypropylene using proprietary product technology to expand
performance-product offer
CHEMICAL STATISTICAL RECAP
2018
2017
2016
2015
2014
Earnings (millions of dollars)
Prime product sales(1) (thousands of tonnes)
Average capital employed(2) (millions of dollars)
Return on average capital employed(2) (percent)
Capital expenditures(2) (millions of dollars)
3,351
26,869
30,420
11.0
2,235
4,518
25,420
27,516
16.4
3,771
4,615
24,925
24,844
18.6
2,207
4,418
24,713
23,750
18.6
2,843
4,315
24,235
22,197
19.4
2,741
(1) Prime product sales data reported net of purchases/sales contracts with the same counterparty.
(2) See Frequently used terms on pages 40 and 41.
PHOTO: To meet growing demand for high-performance
plastics, we are installing a new production unit at the
Beaumont polyethylene plant.
32
BUSINESS FUNDAMENTALS
Chemical industry growth is forecast to outpace growth in global GDP and energy demand for the next two
decades. Most of that growth will come from Asia and other developing markets.
GROWING EARNINGS, CASH FLOW,
AND ROCE BY…
The driving factors are increasing global population and improving standards of living. Global population is
forecast to grow from about 7.4 billion people in 2016 to about 9.2 billion people by 2040. According to research
by the Brookings Institution, the global middle class is expected to grow by about 80 percent from 2015 to 2030.
As incomes in the developing world increase, more people will have access to consumer goods, automobiles,
and appliances, which require many chemical products. ExxonMobil estimates that global demand for chemicals
will rise by approximately 45 percent over the next decade.
COMPETITIVE ADVANTAGES
Catalyst and process technology leadership, including metallocene catalyst development and commercialization,
underpins our strong market position in high-performance products. We also invest in new process technology
innovations, as demonstrated by the world’s first and only crude cracker in Singapore, which lowers cost and
enhances feed flexibility.
Building on our global scale and market presence, we have established several technology centers around
the world, enabling us to interact directly with customers, develop timely new product solutions, and nurture
long-term relationships. Leveraging our global manufacturing footprint, we are able to process the most
advantaged feedstocks and move products efficiently through a unique global supply chain.
We leveraged the acquisition of the Banyan aromatics facility to strengthen our integrated business in Singapore
across Downstream and Chemical operations by interconnecting pipelines and optimizing logistics. We are
also jointly developing the Singapore residual upgrade project between Downstream and Chemical to upgrade
residual, low-value streams from both chemical and downstream operations into Group II lube basestocks, further
improving the competitiveness of the site.
Leading project management capabilities and deep technical and commercial functional excellence have
contributed to recent sales growth. With a proven track record of delivering several major chemical projects
successfully in the past two years, we remain a partner of choice, as demonstrated by the world-scale
petrochemical complex on the U.S. Gulf Coast with partner SABIC and the agreement of cooperation signed
with the government of Guangdong Province, China, for a potential petrochemical facility.
Critical positions in the Chemical business are filled by employees we have developed through training, challenging
assignments, and broad experiences. Approximately 1,500 people fill these roles and are essential to meeting
resource demand for major growth projects.
PROGRESSING 13 NEW FACILITIES
UTILIZING GLOBAL FEEDSTOCK
FLEXIBILITY AND SUPPLY SCALE
INVESTING IN THREE MAJOR
STEAM CRACKERS, INCLUDING
ONE LIQUID CRACKER IN ASIA AND
SEVERAL DERIVATIVE PROJECTS –
POLYETHYLENE, POLYPROPYLENE,
ETHYLENE GLYCOL, VISTAMAXX,
AND LINEAR ALPHA OLEFINS
GROWING SALES OF HIGH-VALUE
PERFORMANCE PRODUCTS BY 50%
BY 2025
EXPANDING TECHNOLOGY PORTFOLIO
WITH A FOCUS ON SUSTAINABLE
SOLUTIONS
33
CORPORATE SUSTAINABILITY
ExxonMobil’s primary responsibility is to produce
and technology to lower the energy intensity of industrial
And in a more recently sanctioned project in Guyana,
the energy and products that are essential to
processes. Since 2000, we have invested more than
we have already worked with more than 500 Guyanese-
modern life and economic development. What we
$9 billion in lower-emission energy solutions.
owned companies to support capacity-building in the
do is critically important. And it is equally important
that we operate in a way that protects people, the
environment, and the well-being of communities
where we live and work.
On the policy front, ExxonMobil supports the Paris
Agreement and market-based approaches to reduce
greenhouse gas emissions, such as a revenue-neutral
carbon tax.
Our annual Sustainability Report delivers a
Our 2019 Energy & Carbon Summary provides a
comprehensive analysis of the critical dimensions
detailed overview of how the company manages risks
country ahead of first oil production in 2020. As part of
our long-term commitment to support local development
priorities, we invested $10 million in a collaboration with
Conservation International and the University of Guyana
to train Guyanese for sustainable job opportunities and
to expand community-supported conservation.
of sustainability, including environmental, social,
related to climate change, including a view of potential
and governance (ESG) performance. The following
scenarios toward a 2-degree Celsius (2°C) pathway as
GOVERNANCE
is a summary of our approach.
envisioned by the Paris Agreement.
ENVIRONMENT AND CLIMATE CHANGE
Management of environmental performance is guided
by a fundamental scientific understanding of the
impacts of energy and petrochemical production and a
commitment to develop, maintain, and operate facilities
using appropriate environmental standards.
SOCIAL
We work to ensure sustainable economic benefits for
communities where we operate. We focus on three
key areas: employing and training a local workforce;
supporting diverse, local suppliers; and improving
people’s livelihoods through direct community
One area of critical importance is climate change.
investments.
We manage the risks by reducing our emissions,
helping consumers reduce theirs, participating in
policy discussions, and advancing research to find new
low-emissions technologies.
For example, in 2018, we outlined measures to reduce
methane emissions by 15 percent and flaring by
25 percent by 2020. We also continued to advance our
research into next-generation, breakthrough energy
solutions, including biofuels, carbon capture and storage,
For example, around the world, our affiliates are locally
staffed, including in Nigeria, Chad, and Indonesia, where
we have 95 percent local hires, including 90 percent of
supervisors and managers.
In Papua New Guinea, where it has been nearly a
decade since construction started on our liquefied
natural gas project, investment in local businesses
continues to grow. In fact, we have spent about
$4 billion on local goods and services.
Our corporate governance systems and practices are
core strengths of ExxonMobil. We apply a rigorous
approach to corporate governance in all aspects of the
way we do business, everywhere we operate, and we
observe the highest standards of integrity and ethics.
ExxonMobil requires that employees, officers, directors,
and those working on our behalf comply with all applicable
laws, including U.S. anti-corruption, anti-trust, anti-
boycott, trade sanctions, and export controls laws, as well
as laws in other countries applicable to our business.
Good corporate governance creates a business
environment that supports long-term growth.
ExxonMobil’s Board of Directors – comprised of the CEO
and nine independent directors – provides a key oversight
role, including review of risk management efforts and
strategic plans. Ensuring that we have diversity of
backgrounds, experiences, and thought represented on
the board remains critical to our success.
34
EXXONMOBIL 2018 SUMMARY ANNUAL REPORT FINANCIAL INFORMATION
REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM
To the Board of Directors and Shareholders of Exxon Mobil Corporation
We have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States), the consolidated balance sheets of Exxon Mobil Corporation and its
subsidiaries (the “Corporation”) as of December 31, 2018 and 2017, and the related consolidated statements of income, comprehensive income, changes in equity and cash flows for each of the
three years in the period ended December 31, 2018 (not presented herein) appearing in the ExxonMobil 2018 Financial Statements and Supplemental Information booklet enclosed with the proxy
materials for the 2019 annual meeting of shareholders of the Corporation and have issued our report thereon dated February 27, 2019, which included an unqualified opinion on those consolidated
financial statements. In our opinion, the information set forth in the accompanying condensed consolidated financial statements (pages 37–39) is fairly stated, in all material respects, in relation to the
consolidated financial statements from which it has been derived.
Dallas, Texas
February 27, 2019
SUMMARY OF ACCOUNTING
POLICIES AND PRACTICES
The Corporation’s accounting and financial reporting fairly
reflect its integrated business model involving exploration
for, and production of, crude oil and natural gas and
manufacture, trade, transport and sale of crude oil, natural
gas, petroleum products, petrochemicals and a wide variety
of specialty products. The preparation of financial statements
in conformity with U.S. Generally Accepted Accounting
Principles (GAAP) requires management to make estimates
and judgments that affect the reported amounts of assets,
liabilities, revenues, expenses and the disclosure of contingent
assets and liabilities. Actual results could differ from these
estimates.
The summary financial statements include the accounts of
those subsidiaries the Corporation controls. They also include
the Corporation’s share of the undivided interest in certain
Upstream assets, liabilities, revenues, and expenses. Amounts
representing the Corporation’s interest in the net assets and
net income of entities that it does not control are included
in “Investments, advances, and long-term receivables” on
the Balance Sheet and “Income from equity affiliates” on the
Income Statement.
The “functional currency” for translating the accounts of the
majority of Downstream and Chemical operations outside the
United States is the local currency. The local currency is also
used for Upstream operations that are relatively self-contained
and integrated within a particular country. The U.S. dollar is
used for operations in countries with a history of high inflation
and certain other countries.
Revenue is recognized at the amount the Corporation expects
to receive when the customer has taken control, which is
typically when title transfers and the customer has assumed
the risks and rewards of ownership.
Inventories of crude oil, products, and merchandise are
carried at the lower of current market value or cost (generally
determined under the last-in, first-out method – LIFO).
Inventories of materials and supplies are valued at cost or less.
The Corporation makes use of derivative instruments. When
derivatives are used, they are recorded at fair value, and gains
and losses arising from changes in their fair value are
recognized in earnings.
The Corporation’s exploration and production activities
are accounted for under the “successful efforts” method.
Depreciation, depletion, and amortization are primarily
determined under either the unit-of-production method or
the straight-line method. Unit-of-production rates are based
on the amount of proved developed reserves of oil, natural
gas, and other minerals that are estimated to be recoverable
from existing facilities. The straight-line method is based on
estimated asset service life.
The Corporation incurs retirement obligations for certain
assets at the time they are installed. The fair values of these
obligations are recorded as liabilities on a discounted basis
and are accreted over time for the change in their present
value. The costs associated with these liabilities are capitalized
as part of the related assets and depreciated. Liabilities for
environmental costs are recorded when it is probable that
obligations have been incurred and the amounts can be
reasonably estimated.
The Corporation recognizes the underfunded or overfunded
status of defined benefit pension and other postretirement
plans as a liability or asset in the balance sheet with the offset
in equity, net of deferred taxes.
A variety of claims have been made against ExxonMobil
and certain of its consolidated subsidiaries in a number of
pending lawsuits and tax disputes. For further information
on litigation and tax contingencies, see Notes 16 and 19 to
the Consolidated Financial Statements in ExxonMobil’s 2018
Financial Statements and Supplemental Information booklet.
The Corporation awards stock-based compensation to
employees in the form of restricted stock units. Compensation
expense is measured by the price of the stock at the date
of grant and is recognized in income over the requisite
service period.
Further information on the Corporation’s accounting policies,
estimates, and practices can be found in ExxonMobil’s 2018
Financial Statements and Supplemental Information booklet
(Critical Accounting Estimates and Note 1 to the Consolidated
Financial Statements).
35
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
FINANCIAL HIGHLIGHTS
(millions of dollars, unless noted)
Net income attributable to ExxonMobil
Cash flow from operations and asset sales(1)
Capital and exploration expenditures(1)
Research and development costs
Total debt at year end
Average capital employed(1)
Market valuation at year end
Regular employees at year end (thousands)
KEY FINANCIAL RATIOS
Return on average capital employed(1) (percent)
Earnings to average ExxonMobil share of equity (percent)
Debt to capital(2) (percent)
Net debt to capital(3) (percent)
Current assets to current liabilities (times)
DIVIDEND AND SHAREHOLDER RETURN INFORMATION
Dividends per common share (dollars)
Dividends per share growth (annual percent)
Number of common shares outstanding (millions)
Average
Average – assuming dilution
Year end
Total shareholder return(1) (annual percent)
Common stock acquired (millions of dollars)
Market quotations for common stock (dollars)
High
Low
Average daily close
Year-end close
(1) See Frequently used terms on pages 40 and 41.
(2) Debt includes short-term and long-term debt. Capital includes short-term and long-term debt and total equity.
(3) Debt net of cash and cash equivalents, excluding restricted cash.
36
2018
2017
2016
20,840
40,137
25,923
1,116
37,796
232,374
288,892
71.0
19,710
33,169
23,080
1,063
42,336
222,631
354,561
69.6
7,840
26,357
19,304
1,058
42,762
212,226
374,438
71.1
2018
9.2
11.0
16.0
14.9
0.84
2018
3.23
5.6
4,270
4,270
4,237
(15.1)
626
89.30
64.65
79.96
68.19
2017
9.0
11.1
17.9
16.8
0.82
2017
3.06
2.7
4,256
4,256
4,239
(3.8)
747
91.34
76.05
81.86
83.64
2016
3.9
4.6
19.7
18.4
0.87
2016
2.98
3.5
4,177
4,177
4,148
19.8
977
95.55
71.55
86.22
90.26
SUMMARY STATEMENT OF INCOME
(millions of dollars)
Revenues and other income
Sales and other operating revenue
Income from equity affiliates
Other income
Total revenues and other income
Costs and other deductions
Crude oil and product purchases
Production and manufacturing expenses
Selling, general and administrative expenses
Depreciation and depletion
Exploration expenses, including dry holes
Non-service pension and postretirement benefit expense
Interest expense
Other taxes and duties
Total costs and other deductions
Income before income taxes
Income taxes
Net income including noncontrolling interests
Net income attributable to noncontrolling interests
Net income attributable to ExxonMobil
Earnings per common share (dollars)
Earnings per common share – assuming dilution (dollars)
2018
2017
2016
279,332
7,355
3,525
290,212
156,172
36,682
11,480
18,745
1,466
1,285
766
32,663
259,259
30,953
9,532
21,421
581
20,840
4.88
4.88
237,162
5,380
1,821
244,363
128,217
32,690
10,649
19,893
1,790
1,745
601
30,104
225,689
18,674
(1,174)
19,848
138
19,710
4.63
4.63
200,628
4,806
2,680
208,114
104,171
30,448
10,443
22,308
1,467
1,835
453
29,020
200,145
7,969
(406)
8,375
535
7,840
1.88
1.88
The information in the Summary statement of income (for 2016 to 2018), the Summary balance sheet (for 2017 and 2018), and the Summary statement of cash flows (for 2016 to 2018), shown on pages 37 through 39, corresponds to the
information in the Consolidated statement of income, the Consolidated balance sheet, and the Consolidated statement of cash flows in ExxonMobil’s 2018 Financial Statements and Supplemental Information booklet. See also Management’s
discussion and analysis of financial condition and results of operations and other information in ExxonMobil’s 2018 Financial Statements and Supplemental Information booklet.
37
SUMMARY BALANCE SHEET AT YEAR END
(millions of dollars)
Assets
Current assets
Cash and cash equivalents
Notes and accounts receivable, less estimated doubtful amounts
Inventories
Crude oil, products and merchandise
Materials and supplies
Other current assets
Total current assets
Investments, advances and long-term receivables
Property, plant and equipment, at cost, less accumulated depreciation and depletion
Other assets, including intangibles, net
Total assets
Liabilities
Current liabilities
Notes and loans payable
Accounts payable and accrued liabilities
Income taxes payable
Total current liabilities
Long-term debt
Postretirement benefits reserves
Deferred income tax liabilities
Long-term obligations to equity companies
Other long-term obligations
Total liabilities
Commitments and contingencies(1)
Equity
Common stock without par value
Earnings reinvested
Accumulated other comprehensive income
Common stock held in treasury
ExxonMobil share of equity
Noncontrolling interests
Total equity
Total liabilities and equity
2018
2017
3,042
24,701
14,803
4,155
1,272
47,973
40,790
247,101
10,332
346,196
17,258
37,268
2,612
57,138
20,538
20,272
27,244
4,382
18,094
147,668
15,258
421,653
(19,564)
(225,553)
191,794
6,734
198,528
346,196
3,177
25,597
12,871
4,121
1,368
47,134
39,160
252,630
9,767
348,691
17,930
36,796
3,045
57,771
24,406
21,132
26,893
4,774
19,215
154,191
14,656
414,540
(16,262)
(225,246)
187,688
6,812
194,500
348,691
(1) For more information, please refer to Note 16 in ExxonMobil’s 2018 Financial Statements and Supplemental Information booklet.
The information in the Summary statement of income (for 2016 to 2018), the Summary balance sheet (for 2017 and 2018), and the Summary statement of cash flows (for 2016 to 2018), shown on pages 37 through 39, corresponds to the
information in the Consolidated statement of income, the Consolidated balance sheet, and the Consolidated statement of cash flows in ExxonMobil’s 2018 Financial Statements and Supplemental Information booklet. See also Management’s
discussion and analysis of financial condition and results of operations and other information in ExxonMobil’s 2018 Financial Statements and Supplemental Information booklet.
38
EXXONMOBIL 2018 SUMMARY ANNUAL REPORT SUMMARY STATEMENT OF CASH FLOWS
(millions of dollars)
Cash flows from operating activities
Net income including noncontrolling interests
Adjustments for noncash transactions
Depreciation and depletion
Deferred income tax charges/(credits)
Postretirement benefits expense in excess of/(less than) net payments
Other long-term obligation provisions in excess of/(less than) payments
Dividends received greater than/(less than) equity in current earnings of equity companies
Changes in operational working capital, excluding cash and debt
Reduction/(increase) – Notes and accounts receivable
– Inventories
– Other current assets
Increase/(reduction) – Accounts and other payables
Net (gain) on asset sales
All other items – net
Net cash provided by operating activities
Cash flows from investing activities
Additions to property, plant and equipment
Proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments
Additional investments and advances
Other investing activities including collection of advances
Net cash used in investing activities
Cash flows from financing activities
Additions to long-term debt
Additions to short-term debt
Reductions in short-term debt
Additions/(reductions) in commercial paper, and debt with three months or less maturity
Cash dividends to ExxonMobil shareholders
Cash dividends to noncontrolling interests
Changes in noncontrolling interests
Common stock acquired
Common stock sold
Net cash used in financing activities
Effects of exchange rate changes on cash
Increase/(decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year
2018
2017
2016
21,421
18,745
(60)
1,070
(68)
(1,684)
(545)
(3,107)
(25)
2,321
(1,993)
(61)
36,014
(19,574)
4,123
(1,981)
986
(16,446)
46
–
(4,752)
(219)
(13,798)
(243)
146
(626)
–
(19,446)
(257)
(135)
3,177
3,042
19,848
19,893
(8,577)
1,135
(610)
131
(3,954)
(1,682)
(117)
5,104
(334)
(771)
30,066
(15,402)
3,103
(5,507)
2,076
(15,730)
60
1,735
(5,024)
2,181
(13,001)
(184)
(150)
(747)
–
(15,130)
314
(480)
3,657
3,177
8,375
22,308
(4,386)
(329)
(19)
(579)
(2,090)
(388)
171
915
(1,682)
(214)
22,082
(16,163)
4,275
(1,417)
902
(12,403)
12,066
–
(314)
(7,459)
(12,453)
(162)
–
(977)
6
(9,293)
(434)
(48)
3,705
3,657
The information in the Summary statement of income (for 2016 to 2018), the Summary balance sheet (for 2017 and 2018), and the Summary statement of cash flows (for 2016 to 2018), shown on pages 37 through 39, corresponds to the
information in the Consolidated statement of income, the Consolidated balance sheet, and the Consolidated statement of cash flows in ExxonMobil’s 2018 Financial Statements and Supplemental Information booklet. See also Management’s
discussion and analysis of financial condition and results of operations and other information in ExxonMobil’s 2018 Financial Statements and Supplemental Information booklet.
39
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
FREQUENTLY USED TERMS
Listed below are definitions of several of ExxonMobil’s key business and financial
performance measures and other terms. These definitions are provided to
facilitate understanding of the terms and their calculation. In the case of financial
measures that we believe constitute “non-GAAP financial measures” under
Securities and Exchange Commission Regulation G, we provide a reconciliation to
the most comparable Generally Accepted Accounting Principles (GAAP) measure
and other information required by that rule.
Total shareholder return (TSR) • Measures the change in value of an investment in stock over a
specified period of time, assuming dividend reinvestment. We calculate shareholder return over
a particular measurement period by: dividing (1) the sum of (a) the cumulative value of dividends
received during the measurement period, assuming reinvestment, plus (b) the difference
between the stock price at the end and at the beginning of the measurement period; by (2) the
stock price at the beginning of the measurement period. For this purpose, we assume dividends
are reinvested in stock at market prices at approximately the same time actual dividends are
paid. Shareholder return is usually quoted on an annualized basis.
Capital and exploration expenditures (Capex) • Represents the combined total of additions at
cost to property, plant and equipment, and exploration expenses on a before-tax basis from the
Summary statement of income. ExxonMobil’s Capex includes its share of similar costs for equity
companies. Capex excludes assets acquired in nonmonetary exchanges (effective 2013), the
value of ExxonMobil shares used to acquire assets, and depreciation on the cost of exploration
support equipment and facilities recorded to property, plant and equipment when acquired.
While ExxonMobil’s management is responsible for all investments and elements of net income,
particular focus is placed on managing the controllable aspects of this group of expenditures.
Returns, investment returns, project returns • Unless referring specifically to ROCE, references
to returns, investment returns, project returns and similar terms mean discounted cash
flow returns based on current company estimates. Future investment returns exclude prior
exploration and acquisition costs.
Proved reserves • Proved reserve figures in this publication are determined in accordance with
SEC definitions in effect at the end of each applicable year. In statements covering reserve
replacement for years prior to 2009, reserves include oil sands and equity company reserves,
which at the time were excluded from SEC reserves.
Proved reserves replacement ratio • The reserves replacement ratio is calculated for a specified
period utilizing the applicable proved oil-equivalent reserves additions divided by oil-equivalent
production. See “Proved reserves” above.
Resources, resource base, and recoverable resources • Along with similar terms used in this
report, these refer to the total remaining estimated quantities of oil and natural gas that are
expected to be ultimately recoverable. ExxonMobil refers to new discoveries and acquisitions
of discovered resources as resource additions. The resource base includes 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”
is not intended to correspond to SEC definitions such as “probable” or “possible” reserves. The
term “in-place” refers to those quantities of oil and natural gas estimated to be contained in
known accumulations and includes recoverable and unrecoverable amounts.
RETURN ON AVERAGE CAPITAL EMPLOYED (ROCE)
(millions of dollars)
Net income attributable to ExxonMobil
Financing costs (after tax)
Gross third-party debt
ExxonMobil share of equity companies
All other financing costs – net
Total financing costs
Earnings excluding financing costs
Average capital employed
Return on average capital employed – corporate total
2018
20,840
(912)
(192)
498
(606)
21,446
232,374
9.2%
2017
19,710
(709)
(204)
515
(398)
20,108
222,631
9.0%
2016
7,840
(683)
(225)
423
(485)
8,325
212,226
3.9%
2015
16,150
(362)
(170)
88
(444)
16,594
208,755
7.9%
2014
32,520
(140)
(256)
(68)
(464)
32,984
203,110
16.2%
ROCE is a performance measure ratio. From the perspective of the business segments, ROCE is annual business segment earnings divided by average business segment capital employed (average of beginning and end-of-year amounts). These segment
earnings include ExxonMobil’s share of segment earnings of equity companies, consistent with our capital employed definition, and exclude the cost of financing. 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 the best measure 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. See page 4
for segment information relevant to ROCE.
40
CAPITAL EMPLOYED AT YEAR END
(millions of dollars)
Business uses: asset and liability perspective
Total assets
Less liabilities and noncontrolling interests share of assets and liabilities
Total current liabilities excluding notes and loans payable
Total long-term liabilities excluding long-term debt
Noncontrolling interests share of assets and liabilities
Add ExxonMobil share of debt-financed equity company net assets
Total capital employed
Total corporate sources: debt and equity perspective
Notes and loans payable
Long-term debt
ExxonMobil share of equity
Less noncontrolling interests share of total debt
Add ExxonMobil share of equity company debt
Total capital employed
2018
2017
2016
2015
2014
346,196
348,691
330,314
336,758
349,493
(39,880)
(69,992)
(7,958)
3,914
232,280
17,258
20,538
191,794
(1,224)
3,914
232,280
(39,841)
(72,014)
(8,298)
3,929
232,467
17,930
24,406
187,688
(1,486)
3,929
232,467
(33,808)
(79,914)
(8,031)
4,233
212,794
13,830
28,932
167,325
(1,526)
4,233
212,794
(35,214)
(86,047)
(8,286)
4,447
211,658
18,762
19,925
170,811
(2,287)
4,447
211,658
(47,165)
(92,143)
(9,099)
4,766
205,852
17,468
11,653
174,399
(2,434)
4,766
205,852
Capital employed is a measure of net investment. When viewed from the perspective of how the capital is used by the businesses, it includes ExxonMobil’s net share of property, plant and equipment and other assets, less liabilities, excluding both
short-term and long-term debt. When viewed from the perspective of the sources of capital employed in total for the Corporation, it includes ExxonMobil’s share of total debt and equity. Both of these views include ExxonMobil’s share of amounts
applicable to equity companies, which the Corporation believes should be included to provide a more comprehensive measure of capital employed.
CASH FLOW FROM OPERATIONS AND ASSET SALES
(millions of dollars)
Net cash provided by operating activities
Proceeds associated with sales of subsidiaries, property, plant
and equipment, and sales and returns of investments
Cash flow from operations and asset sales
2018
36,014
4,123
40,137
2017
30,066
3,103
33,169
2016
22,082
4,275
26,357
2015
30,344
2,389
32,733
2014
45,116
4,035
49,151
Cash flow from operations and asset sales is the sum of the net cash provided by operating activities and proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments from the Summary statement
of cash flows. This cash flow reflects the total sources of cash from both operating the Corporation’s assets and from the divesting of assets. The Corporation employs a long-standing and regular disciplined review process to ensure that all assets are
contributing to the Corporation’s strategic objectives. Assets are divested when they are no longer meeting these objectives or are worth considerably more to others. Because of the regular nature of this activity, we believe it is useful for investors to
consider proceeds associated with asset sales together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions.
FREE CASH FLOW
(millions of dollars)
Net cash provided by operating activities
Additions to property, plant and equipment
Proceeds associated with sales of subsidiaries, property, plant
and equipment, and sales and returns of investments
Additional investments and advances
Other investing activities including collection of advances
Free cash flow
2018
2017
2016
2015
2014
36,014
(19,574)
4,123
(1,981)
986
19,568
30,066
(15,402)
3,103
(5,507)
2,076
14,336
22,082
(16,163)
4,275
(1,417)
902
9,679
30,344
(26,490)
2,389
(607)
842
6,478
45,116
(32,952)
4,035
(1,631)
3,346
17,914
Free cash flow is cash flow from operations and asset sales less additions to property, plant and equipment, and additional investments and advances, plus other investing activities, including collection of advances. This measure is useful when evaluating
cash available for financing activities, including shareholder distributions, after investment in the business.
DISTRIBUTIONS TO SHAREHOLDERS
(millions of dollars)
Dividends paid to ExxonMobil shareholders
Cost of shares acquired to reduce shares outstanding
Distributions to ExxonMobil shareholders
Memo: Gross cost of shares acquired to offset shares or units
settled in shares issued under benefit plans and programs
2018
13,798
–
13,798
626
2017
13,001
–
13,001
747
2016
12,453
–
12,453
977
2015
12,090
3,000
15,090
1,039
The Corporation distributes cash to shareholders in the form of both dividends and share purchases. Shares are acquired to reduce shares outstanding and offset shares or units settled in shares issued in conjunction with company benefit
plans and programs. For purposes of calculating distributions to shareholders, the Corporation only includes the cost of those shares acquired to reduce shares outstanding.
2014
11,568
12,000
23,568
1,183
41
BOARD OF DIRECTORS, OFFICERS, AND AFFILIATED COMPANIES
(left to right)
Angela F. Braly Former Chairman of the Board, President,
and Chief Executive Officer, WellPoint, Inc. (health care)
Kenneth C. Frazier Chairman of the Board, President, and
Chief Executive Officer, Merck & Company (pharmaceuticals)
Steven S Reinemund Presiding Director; Former Chairman of the
Board and Chief Executive Officer, PepsiCo (consumer food products)
Steven A. Kandarian Chairman of the Board, President, and
Chief Executive Officer, MetLife Inc. (insurance)
Darren W. Woods Chairman of the Board and
Chief Executive Officer
Douglas R. Oberhelman Former Chairman of the Board and
Chief Executive Officer, Caterpillar Inc. (heavy equipment)
Samuel J. Palmisano Former Chairman of the Board,
President, and Chief Executive Officer, International Business
Machines Corporation (computer hardware, software, business
consulting, and IT services)
William C. Weldon Former Chairman of the Board and
Chief Executive Officer, Johnson & Johnson (pharmaceuticals)
Susan K. Avery President Emerita, Woods Hole Oceanographic
Institution (nonprofit ocean research, exploration, and education)
Ursula M. Burns Chairman of the Board and Chief Executive
Officer, VEON, Ltd. (telecommunication services)
42
EXXONMOBIL 2018 SUMMARY ANNUAL REPORT STANDING COMMITTEES
OF THE BOARD
Audit Committee
U.M. Burns (Chair)
D.R. Oberhelman
W.C. Weldon
Board Affairs Committee
K.C. Frazier (Chair)
S.K. Avery
S.J. Palmisano
S.S Reinemund
Compensation Committee
S.J. Palmisano (Chair)
A.F. Braly
K.C. Frazier
S.A. Kandarian
Finance Committee
D.W. Woods (Chair)
U.M. Burns
D.R. Oberhelman
W.C. Weldon
Public Issues and Contributions Committee
A.F. Braly (Chair)
S.K. Avery
S.A. Kandarian
S.S Reinemund
Executive Committee
D.W. Woods (Chair)
U.M. Burns
K.C. Frazier
S.J. Palmisano
S.S Reinemund
OFFICERS
D.W. Woods
Chairman of the Board (1)
N.A. Chapman
Senior Vice President (1)
A.P. Swiger
Senior Vice President (1)
J.P. Williams, Jr.
Senior Vice President (1)
P.P. Clarke
Vice President (1)
B.W. Corson
Vice President and President –
ExxonMobil Upstream Ventures (1)
N.W. Duffin
Vice President (1)
R.M. Ebner
Vice President and General Counsel (1)
S.M. Greenlee
Vice President (1)
T.C. Gunnlaugsson Vice President – Human Resources
N.A. Hansen
Vice President – Investor Relations
and Secretary (1)
S.M. McCarron
Vice President – Public and
Government Affairs
B.W. Milton
Vice President (1)
D.S. Rosenthal
Vice President and Controller (1)
R.N. Schleckser
Vice President and Treasurer (1)
J.M. Spellings, Jr. Vice President and General Tax Counsel (1)
J.R. Verity
Vice President (1)
D.G. Wascom
Vice President – Operational Excellence
and Safety, Security, Health &
Environment
T.J. Wojnar, Jr.
Vice President – Corporate
Strategic Planning (1)
FUNCTIONAL AND SERVICE
ORGANIZATIONS
Upstream
P.P. Clarke
N.W. Duffin
President, ExxonMobil Gas & Power
Marketing Company (1)
President, ExxonMobil
Production Company (1)
S.M. Greenlee
President, ExxonMobil Exploration
Company (1)
L.M. Mallon
President, ExxonMobil Development
Company (1)
S.N. Ortwein
President, XTO Energy Inc.(1)
T.W. Schuessler
President, ExxonMobil Upstream
Research Company
Downstream
B.H. March
B.W. Milton
Chemical
J.R. Verity
Other
L.D. DuCharme
President, ExxonMobil Research
and Engineering Company
President, ExxonMobil Fuels & Lubricants
Company (1)
President, ExxonMobil Chemical
Company (1)
President, ExxonMobil Global Services
Company
(1) Required to file reports under Section 16 of the Securities Exchange Act of 1934.
As of December 31, 2018
43
E X X O N M O B I L 2 0 1 8 S U M M A R Y A N N U A L R E P O R T
INVESTOR INFORMATION
SHAREHOLDER SERVICES
DIVIDEND DIRECT DEPOSIT
Shareholder inquiries should be addressed to
ExxonMobil Shareholder Services at Computershare
Trust Company, N.A., ExxonMobil’s transfer agent:
ExxonMobil Shareholder Services
c/o Computershare
P.O. Box 505000
Louisville, KY 40233
1-800-252-1800
(Within the United States and Canada)
1-781-575-2058
(Outside the United States and Canada)
An automated voice-response system is available
24 hours a day, 7 days a week.
Service representatives are available Monday through
Friday 8 a.m. to 8 p.m. Eastern Time.
Registered shareholders can access information about
their ExxonMobil stock accounts via the Internet at
computershare.com/exxonmobil.
STOCK PURCHASE AND
DIVIDEND REINVESTMENT PLAN
Computershare Trust Company, N.A., sponsors a
stock purchase and dividend reinvestment plan, the
Computershare Investment Plan for Exxon Mobil
Corporation Common Stock. For more information and
plan materials, go to computershare.com/exxonmobil
or call or write ExxonMobil Shareholder Services.
Shareholders may have their dividends deposited
directly into their U.S. bank accounts. If you would
like to elect this option, go to computershare.com/
exxonmobil or call or write ExxonMobil Shareholder
Services for an authorization form.
CORPORATE GOVERNANCE
Our Corporate Governance Guidelines and related
materials are available by selecting “Investors” on our
website at exxonmobil.com.
ELECTRONIC DELIVERY OF DOCUMENTS
Registered shareholders can receive the following
documents online, instead of by mail, by contacting
ExxonMobil Shareholder Services:
• Annual meeting materials
• Tax documents
• Account statements
Beneficial shareholders should contact their bank or
broker for electronic receipt of proxy voting materials.
EXXONMOBIL PUBLICATIONS
The following publications are available without charge
to shareholders and can be found at exxonmobil.com.
Requests for printed copies should be directed to
ExxonMobil Shareholder Services.
• Summary Annual Report
• Annual Report on Form 10-K
• Financial & Operating Review
• Sustainability Report
• Outlook for Energy: A View to 2040
• Energy & Carbon Summary
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. Abbreviated
references describing global or regional operational
organizations, and global or regional business lines are
also sometimes used for convenience and simplicity.
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.
Included in this Summary Annual Report are financial
and operating highlights and summary financial
statements. For complete financial statements,
including notes, please refer to ExxonMobil’s 2018
Financial Statements and Supplemental Information
booklet included in the Summary Annual Report
mailing. The Financial Statements and Supplemental
Information booklet also includes “Management’s
Discussion and Analysis of Financial Condition and
Results of Operations.” The “Investors” section of
ExxonMobil’s website (exxonmobil.com) contains the
Proxy Statement and other company publications,
including ExxonMobil’s Financial & Operating Review.
These publications provide additional detail about the
company’s global operations.
The following are trademarks, service marks, or
proprietary process names of Exxon Mobil Corporation
or one of its affiliates: ExxonMobil, Esso, Exxon, Mobil,
Mobil 1, EHC, Santoprene, Synergy, Vistamaxx, and
Achieve.
The following third-party trademarks or service marks
referenced in the text of the report are owned by the
entities indicated: PWC + Design (The Trustees of the
PWC Business Trust).
44
ANNUAL SHAREHOLDER MEETING
The 2019 Annual Meeting of Shareholders
will be held at 9:30 a.m. Central Time on Wednesday,
May 29, 2019, at:
Renaissance Dallas Hotel Conference Center
2222 North Stemmons Freeway
Dallas, TX 75207
An audio webcast will be provided at exxonmobil.com.
Information about the webcast will be available one
week prior to the event.
ExxonMobil on the Internet
A quick, easy way to get information
about ExxonMobil
Important shareholder information is
available at exxonmobil.com:
• Publications
• Stock Quote
• Dividend Information
• Contact Information
• Speeches
• News Releases
• Investor Presentations
• Corporate Governance
GENERAL INFORMATION
CORPORATE HEADQUARTERS
Exxon Mobil Corporation
5959 Las Colinas Boulevard
Irving, TX 75039-2298
Additional copies may be
obtained by writing or phoning:
Phone: 972-940-6000
Fax: 972-940-6748
Email: shareholderrelations@exxonmobil.com
SHAREHOLDER RELATIONS ADDRESS
Shareholder Relations
Exxon Mobil Corporation
P.O. Box 140369
Irving, TX 75014-0369
MARKET INFORMATION
The New York Stock Exchange is the principal exchange
on which Exxon Mobil Corporation common stock
is traded.
STOCK SYMBOL: XOM
exxonmobil.com/annualreport
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002CSN9B53
Exxon Mobil Corporation
Corporate Headquarters
5959 Las Colinas Blvd.
Irving, Texas 75039-2298
exxonmobil.com
Printed in U.S.A.