CONTACT : JOHN LORD (703) 846-2500
Fairfax, VA, July 24, 1995 -- Mobil Corporation today announced
estimated second quarter 1995 operating income of $706 million, up $193
million, or 38%, from the comparable quarter last year. Second quarter
special charges of $527 million (including $505 million for the
previously announced restructuring of worldwide staff support services,
marketing and refining operations in the United States, and refining in
Europe) reduced reported net income to $179 million. Last years second
quarter reported net income was $198 million and included special
charges of $315 million for North American property writedowns and
worldwide Chemical restructuring. Estimated reported earnings per
common share for the second quarter of 1995 were $.42 compared with $.46
for the second quarter of 1994.
Commenting on second quarter operating income compared with the same
quarter last year, Chairman Lucio A. Noto said, Mobils significant
increase in operating income was primarily due to higher income in our
Chemical businesses as a result of improved industry conditions and
better operating performance, including lower costs following
restructuring. In Exploration and Producing, higher worldwide crude oil
prices, up more than $2.00/bbl. from last year's depressed levels, and
lower expenses more than offset the impact of lower natural gas prices
in North America and the United Kingdom. In Marketing and Refining,
improved worldwide operating performance, stronger lube income, and
lower expenses more than offset weaker margins overseas."
Mr. Noto continued, "This quarter, following completion of comprehensive
reviews, we announced plans for the realignment of our worldwide staff
support services, and for further restructuring of marketing and
refining in the United States. The associated work process streamlining
will both improve efficiency and provide a platform for growth. Also,
we announced major European refining initiatives, including closure of
the Woerth refinery in Germany and restructuring of our manufacturing
base in Northwest Europe. In total, these actions should result in a
worldwide workforce reduction of over 5,000 positions, lower
manufacturing costs in our key U.S. and Northwest European markets, and
pre-tax savings of over $1 billion annually. These steps are expected
to substantially improve profitability in segments of our business where
returns have been unsatisfactory. In addition, we announced the signing
of a letter of intent for the sale of our South Fort Meade phosphate
mine in Florida, consistent with Mobils long-term strategy of focusing
investments in our core business areas."
Mr. Noto added, "We are also taking advantage of attractive
opportunities for growth. For example, we have recently announced: (1)
the acquisition of deep water reserves in the Gulf of Mexico; (2) a
major discovery offshore Nigeria, where we are already the second
largest producer of oil and condensate; (3) successful bids for
exploration rights in the North Sea, both in the Danish sector and the
United Kingdom 16th Round; and (4) the acquisition of Elf Aquitanes
service station network in The Netherlands.
Mr. Noto concluded, "Market fundamentals continue to be uncertain and
volatile and are likely to remain so in the near term. Worldwide crude
oil prices showed strength through the first five months of the year,
but retreated in June. Refining margins have remained weak, and North
American natural gas prices have been depressed. Margins in Chemical,
which have been very strong this year, are showing some early signs of
weakening from the current relatively high levels. As weve said before,
were not going to depend on industry prices and margins getting better.
Therefore, throughout the company, we are striving to increase
shareholder value by getting more from our existing assets and from
investments for growth."
COMPARISON OF SECOND QUARTER 1995 WITH SECOND QUARTER 1994
The following comments address operating income of the major business
segments during the second quarter of 1995, compared with the same
quarter of 1994:
o Exploration and Producing income of $375 million was $40 million
higher. In the United States, income was $109 million, up $30
million, as higher crude oil prices and lower operating expenses
more than offset significantly lower natural gas prices.
International income was $266 million, up $10 million. Higher
crude oil and Indonesian LNG prices more than offset lower natural
gas prices in Canada and the United Kingdom and lower liquids
volumes. Crude oil production in Nigeria was lower due to a
rupture in the export pipeline, which is expected to be repaired by
the end of the month. New capacity to be streamed later this year
will help mitigate this loss in production.
o Marketing and Refining income of $240 million was $16 million
higher. Income in the United States was $87 million, up $13
million, reflecting lower operating expenses, higher sales
volumes, and increased lube income, as well as improved industry
margins. These improvements were largely offset by higher costs
this year associated with reformulated gasoline production.
International income was $153 million, up $3 million. Benefits
from ongoing business initiatives, including expense savings in
Europe, as well as the increased contribution from the Singapore
refinery upgrade, offset weaker refining margins in all enclaves.
In Europe, development of a common business system was completed,
which positions us to realize further benefits from using one
unified system.
o Chemical income of $186 million was a record quarter. This was up
$147 million, reflecting better industry fundamentals in most
businesses, particularly polyethylene resin. Income also
benefitted from the Singapore petrochemicals complex, and from
business initiatives, notably in plastics fabricating and
petrochemicals.
o Corporate and Other expense of $22 million was $9 million lower,
mainly due to timing of expenses.
o Net Financing Expense of $73 million was $19 million higher,
principally reflecting higher average effective interest rates.
COMPARISON OF SIX MONTHS 1995 WITH SIX MONTHS 1994
Mobils estimated first half 1995 reported net income was $815 million,
compared with $733 million for the same period of 1994 (excluding the
effect of last years $680 million charge for the change in accounting
principle related to inventories). First half 1995 net income included
special charges of $527 million, primarily for the realignment of
worldwide staff support services and restructuring of marketing and
refining operations in the United States and Europe. Net special
charges of $315 million for North American property writedowns and
Chemical restructuring were included in the comparable period of 1994.
Excluding special items and the accounting change, first half 1995
operating income of $1,342 million was up $294 million, or 28%, from the
comparable period of 1994. This improvement was mainly due to higher
Chemical income, up $306 million, reflecting better margins and
operating performance. In petroleum operations, income was essentially
flat, despite significantly weaker international refining margins and
North American natural gas prices, partly offset by stronger worldwide
crude oil prices. The net unfavorable impact of these industry
fundamentals was wholly offset by benefits from our business
initiatives. In particular, expenses in worldwide Marketing and
Refining and U.S. Exploration and Producing were lower, and worldwide
lube income in Marketing and Refining was stronger.
Capital and Exploration Expenditures for the second quarter of 1995 were
estimated at $960 million, an increase of $13 million from the
comparable period last year. For the first six months of 1995,
worldwide capital and exploration expenditures were estimated at $1,778
million, compared with $1,665 million for the year earlier period.
Mobil's estimated Return on Average Shareholders' Equity for the twelve
months ended June 30, 1995, was 10.7%, compared with 10.4% for 1994
(excluding the cumulative effect of the change in accounting principle).
Estimated Return on Average Capital Employed for the twelve months ended
June 30, 1995, was 8.6%, compared with 8.4% for 1994 (excluding the
cumulative effect of the change in accounting principle).
Mobil's estimated Debt to Capitalization Ratio was 30% at June 30, 1995
and 31% at December 31, 1994.
Common Stock Dividends were $.925 per share in the second quarter of
1995 and $1.775 per share for the first half of 1995, up 7.5 cents from
the comparable periods last year.
Table 1
MOBIL CORPORATION
Second Quarter Six Months
---------------------- ----------------------
1994 1995 Incr/ 1994 1995 Incr/
INCOME ($MM) Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
Petroleum Operations
E&P: United States (64) 57 121 13 139 126
International 214 241 27 472 536 64
------ ------ ------ ------ ------ ------
Total E&P 150 298 148 485 675 190
M&R: United States 39 (17) (56) 100 (17) (117)
International 150 (115) (265) 325 31 (294)
------ ------ ------ ------ ------ ------
Total M&R 189 (132) (321) 425 14 (411)
------ ------ ------ ------ ------ ------
Total Petroleum 339 166 (173) 910 689 (221)
Chemical (76) 170 246 (61) 344 405
Corporate and Other (a) (11) (84) (73) (24) (80) (56)
Net Financing Expense (54) (73) (19) (92) (138) (46)
------ ------ ------ ------ ------ ------
Income Before Change in
Accounting Principle 198 179 (19) 733 815 82
Change in Accounting
Principle (b) - - - (680) - 680
------ ------ ------ ------ ------ ------
Net Income 198 179 (19) 53 815 762
========== ====== ====== ====== ====== ====== ======
COMMON SHARES OUTSTANDING (MM)
Average 398.4 395.8 (2.6) 398.3 395.8 (2.5)
End of Period ... ... ... 398.3 395.5 (2.8)
EARNINGS PER COMMON SHARE
BASED ON ($) (c)
Before Chg in Acctng Princip 0.46 0.42 (0.04) 1.77 1.99 0.22
Net Income 0.46 0.42 (0.04) 0.06 1.99 1.93
DIVIDENDS
Common Stock
Total Paid ($MM) 339 366 27 677 703 26
Per Share ($) 0.85 0.925 0.075 1.70 1.775 0.075
Preferred Stock ($MM) 14 14 - 29 28 (1)
(a) Includes the results of Real Estate operations, Mining and Minerals,
administrative expenses, and other corporate items.
(b) Reflects the cumulative impact of the change in the method of applying
the lower of cost or market test for crude oil and product inventories,
recognized January 1, 1994.
(c) The earnings per common share calculation is based on income, less
preferred stock dividend requirements, divided by the weighted average
number of common shares outstanding.
Table 2
MOBIL CORPORATION
1994 by Quarter and Year 1995
INCOME ADJUSTED FOR ------------------------------- --------------
SPECIAL ITEMS ($MM) 1Q 2Q 3Q 4Q Year 1Q Act 2Q Est
----- ----- ----- ----- ------ ------ ------
Petroleum Operations
E&P: United States 77 79 92 58 306 82 109
International 258 256 217 287 1,018 295 266
----- ----- ----- ----- ------ ------ ------
Total E&P 335 335 309 345 1,324 377 375
M&R: United States 61 74 84 54 273 - 87
International 175 150 150 216 691 146 153
----- ----- ----- ----- ------ ------ ------
Total M&R 236 224 234 270 964 146 240
----- ----- ----- ----- ------ ------ ------
Total Petroleum 571 559 543 615 2,288 523 615
Chemical 15 39 60 110 224 174 186
Corporate and Other (a) (13) (31) (12) (16) (72) 4 (22)
Net Financing Expense (38) (54) (63) (54) (209) (65) (73)
----- ----- ----- ----- ------ ------ ------
Oper. Income Bef. Special
Items and Change in
Accounting Principle 535 513 528 655 2,231 636 706
Special Items - (315) (25) (132) (472) - (527)
Change in Accounting
Principle (b) (680) - - - (680) - -
----- ----- ----- ----- ------ ------ ------
Net Income (145) 198 503 523 1,079 636 179
========== ===== ===== ===== ===== ====== ====== ======
EARNINGS PER COMMON SHARE
BASED ON: ($) (c)
Oper. Income Bef. Special
Items and Change in
Accounting Principle 1.31 1.25 1.29 1.61 5.46 1.57 1.75
Net Income (.40) 0.46 1.23 1.28 2.57 1.57 0.42
(a) Includes the results of Real Estate operations, Mining and Minerals,
administrative expenses, and other corporate items.
(b) Reflects the cumulative impact of the change in the method of applying
the lower of cost or market test for crude oil and product inventories,
recognized January 1, 1994.
(c) The earnings per common share calculation is based on income, less
preferred stock dividend requirements, divided by the weighted
average number of common shares outstanding.
Table 3
MOBIL CORPORATION
1994 by Quarter and Year 1995
SPECIAL ITEMS ------------------------------ --------------
AFFECTING INCOME ($MM) 1Q 2Q 3Q 4Q Year 1Q Act 2Q Est
----- ----- ---- ----- ------- ------ ------
E&P United States
Asset Sales - - - (21) (21) - (22)
Property Writedowns - (143) - (17) (160) - -
Restructuring - - - - - - (30) (a)
E&P International
Property Writedowns - (42) (16) - (58) - -
Restructuring - - (9) - (9) - (25) (a)
M&R United States
Restructuring - - - (11) (11) - (104) (b)
LIFO/Oth. Inv. Adjustme - - - 14 14 - -
Property Writedowns - (35) - - (35) - -
M&R International
Restructuring - - - (44) (44) - (268) (c)
Chemical
Restructuring - (115) - - (115) - (16) (a)
Environmental Provision - - - (7) (7) - -
Corp/Other
Restructuring - 20 - - 20 - (62) (a)
Property Writedowns - - - (46) (46) - -
----- ----- ---- ----- ------- ------ ------
Total Specials - (315) (25) (132) (472) - (527)
Change in Accounting
Principle (680) - - - (680) - -
----- ----- ---- ----- ------- ------ ------
Total Special/Other Items(680) (315) (25) (132) (1,152) - (527)
===== ===== ==== ===== ======= ====== ======
(a) Staff redesign project.
(b) Includes $65 million for staff services redesign and $39 million for
further restructuring of marketing and refining operations.
(c) Includes $88 million for staff services redesign and $180 million for
European refining.
Table 4
MOBIL CORPORATION
Second Quarter Six Months
------------------------- --------------------------
CAPITAL AND EXPLORATION 1994 1995 Incr/ 1994 1995 Incr/
EXPENDITURES ($MM) Act Est (Decr) Act Est (Decr)
------- ------- ------- ------- ------- -------
Petroleum Operations
E&P: United States
Exploration Expenses 25 8 (17) 37 26 (11)
Other Expenditures 141 150 9 240 245 5
------- ------- ------- ------- ------- -------
Total E&P--U.S. 166 158 (8) 277 271 (6)
International
Exploration Expenses 83 71 (12) 153 148 (5)
Other Expenditures 280 362 82 481 660 179
------- ------- ------- ------- ------- -------
Total E&P--Int'l 363 433 70 634 808 174
------- ------- ------- ------- ------- -------
Total E&P 529 591 62 911 1,079 168
M&R: United States 124 115 (9) 241 239 (2)
International 203 181 (22) 305 324 19
------- ------- ------- ------- ------- -------
Total M&R 327 296 (31) 546 563 17
------- ------- ------- ------- ------- -------
Total Petroleum 856 887 31 1,457 1,642 185
Chemical 54 52 (2) 119 92 (27)
Other 37 21 (16) 89 44 (45)
------- ------- ------- ------- ------- -------
Total Mobil Corporation 947 960 13 1,665 1,778 113
======= ======= ======= ======= ======= =======
OTHER FINANCIAL DATA ($MM)
Total Revenues 16,215 18,849 2,634 31,333 36,476 5,143
Depreciation, Depletion,
and Amortization 1,034 868 (166) 1,702 1,537 (165)
Income Taxes 402 401 (1) 944 (a) 995 51
AVERAGE U.S. PRICES
Crude ($/BBL) 13.29 15.50 2.21 11.70 14.90 3.20
NGL ($/BBL) 9.65 9.97 0.32 9.57 9.99 0.42
Natural Gas ($/MCF) 1.94 1.59 (0.35) 2.11 1.53 (0.58)
AVERAGE INT'L. PRICES
Crude ($/BBL) 15.62 18.11 2.49 14.71 17.41 2.70
Natural Gas ($/MCF) 2.40 2.62 0.22 2.39 2.54 0.15
(a) Excludes income taxes attributable to change in accounting principle
related to foreign inventories.
Table 5
MOBIL CORPORATION
Second Quarter Six Months
---------------------- ----------------------
1994 1995 Incr/ 1994 1995 Incr/
OPERATING HIGHLIGHTS Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
NET PRODUCTION OF LIQUIDS (TBD)
United States 291 285 (6) 293 287 (6)
Canada 55 52 (3) 58 53 (5)
Indonesia 80 76 (4) 83 75 (8)
Nigeria 166 154 (12) 174 145 (29)
Norway 95 93 (2) 97 93 (4)
United Kingdom 72 71 (1) 70 75 5
Other 81 76 (5) 76 76 -
------ ------ ------ ------ ------ ------
Total International 549 522 (27) 558 517 (41)
------ ------ ------ ------ ------ ------
Worldwide 840 807 (33) 851 804 (47)
====== ====== ====== ====== ====== ======
NET PRODUCTION OF NATURAL GAS (MMCFD)
United States 1,553 1,528 (25) 1,566 1,511 (55)
Canada 440 398 (42) 452 444 (8)
Germany 332 431 99 411 453 42
Indonesia 1,575 1,487 (88) 1,655 1,569 (86)
United Kingdom 399 513 114 521 622 101
Other 139 125 (14) 157 159 2
------ ------ ------ ------ ------ ------
Total International 2,885 2,954 69 3,196 3,247 51
------ ------ ------ ------ ------ ------
Worldwide 4,438 4,482 44 4,762 4,758 (4)
====== ====== ====== ====== ====== ======
TOTAL NET
PRODUCTION (TBDOE) 1,629 1,604 (25) 1,697 1,650 (47)
====== ====== ====== ====== ====== ======
NATURAL GAS SALES (MMCFD)
United States
Equity 1,898 1,835 (63) 1,938 1,867 (71)
Resale 748 1,644 896 748 1,721 973
------ ------ ------ ------ ------ ------
Total United States 2,646 3,479 833 2,686 3,588 902
International 2,908 3,038 130 3,222 3,334 112
------ ------ ------ ------ ------ ------
Worldwide 5,554 6,517 963 5,908 6,922 1,014
====== ====== ====== ====== ====== ======
Table 6
MOBIL CORPORATION
Second Quarter Six Months
---------------------- ----------------------
1994 1995 Incr/ 1994 1995 Incr/
OPERATING HIGHLIGHTS Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
REFINERY RUNS (TBD)
Runs for and by Mobil
United States 876 884 8 851 894 43
Europe 433 432 (1) 399 426 27
Pacific Rim 627 659 32 615 669 54
All Other 165 124 (41) 165 130 (35)
------ ------ ------ ------ ------ ------
Total 2,101 2,099 (2) 2,030 2,119 89
Runs for Mobil by Others 21 9 (12) 22 9 (13)
------ ------ ------ ------ ------ ------
Worldwide Runs for Mobil 2,122 2,108 (14) 2,052 2,128 76
====== ====== ====== ====== ====== ======
PETROLEUM PRODUCT SALES (TBD)
United States
Automotive Gasoline
Sales to Trade 530 545 15 512 525 13
Supply/Other Sales 143 192 49 144 191 47
------ ------ ------ ------ ------ ------
Total Automotive Sales 673 737 64 656 716 60
Distillates/Jet Fuel 290 290 - 290 319 29
Other 201 228 27 192 220 28
------ ------ ------ ------ ------ ------
Total United States 1,164 1,255 91 1,138 1,255 117
Europe 809 787 (22) 791 773 (18)
Pacific Rim 755 772 17 753 802 49
All Other 327 271 (56) 314 287 (27)
------ ------ ------ ------ ------ ------
Worldwide 3,055 3,085 30 2,996 3,117 121
====== ====== ====== ====== ====== ======
U.S. CHEMICAL PRODUCTION (MM LBS)
Polyethylene 447 436 (11) 878 896 18
CHEMICAL SALES BY PRODUCT CATEGORY ($MM)
Petrochemicals 468 798 330 848 1,549 701
Plastics 476 546 70 882 1,025 143
Chemical Products 25 26 1 46 59 13
------ ------ ------ ------ ------ ------
Total 969 1,370 401 1,776 2,633 857
====== ====== ====== ====== ====== ======