Exxon Mobil Corporation

Good day, everyone, and welcome to this ExxonMobil Corporation third quarter 2021 earnings call. Today's call is being recorded, and at this time, I'd like to turn the call over to the Vice President of Investor Relations and Secretary, Mr. Stephen Littleton. Please go ahead, sir.

Thank you, and good morning, everyone. Welcome to our third quarter earnings call. We appreciate your participation and continued interest in ExxonMobil. I am Stephen Littleton, Vice President of Investor Relations. Joining me today are Darren Woods, Chairman and Chief Executive Officer, and Kathy Michaels, our Senior Vice President and Chief Financial Officer. The full set of presentation slides and prepared remarks were made available on the Investor Relations section of our website earlier this morning, along with our press release. During our call this morning, Darren will provide a few additional opening comments and reference a select number of slides from that presentation, leaving more time for your questions. We expect to conclude the call at 9.30 a.m. Central Time. I would also like to draw your attention to the cautionary statement on slide two and to the supplemental information at the end of the presentation slides on the website. I'll now turn the call over to Darren. Thank you, Stephen.

Good morning. It's good to be with you today to discuss our strong third quarter results and the progress we are making in growing shareholder value and, of course, to take your questions. I'd like to start by welcoming Kathy to the call. Her first in what I know will be many. I can tell you that Kathy has hit the ground running, seamlessly joined the management team, and has been broadly welcomed by the organization. While early in her tenure, we were already benefiting from her diverse experiences and wise counsel. Since we posted a full set of slides and remarks on the website, I'll keep my comments brief this morning, starting with an overview of the work we are doing to position the company to sustainably grow shareholder value. Our first priority was to significantly grow the value of our base business to achieve industry-leading earnings and cash flow growth. This is work that has been ongoing for some time. and is built on the significant changes we have made to our organization and the increased focus on fully leveraging all of our competitive advantages in technology, scale, integration, functional excellence, and most importantly, our people. This has also allowed us to improve operating performance, drive down cost, and develop a portfolio of industry-advantaged high-return investments. Our businesses are driving returns and generating cash to maintain a strong balance sheet, and fund future investments. The work we began in 2018 to develop opportunities in carbon capture and later low emission fuels plays to our competitive strengths, positions us to build a successful low carbon solutions business, and take a leading role in driving to a lower carbon future in hard to decarbonize areas. At the same time, we have to ensure our plans are robust to a wide range of future scenarios, including net zero pathways, and the continuing use of hydrocarbons. Our low-carbon solutions business draws on the same core capabilities and competitive strengths used in our established businesses. This gives us optionality and builds resiliency into our plans. As the future takes shape and demands shift across our businesses, we will maintain our advantage. Now I'll turn to our third quarter performance. The value of the organization's hard work I just highlighted is showing itself as the market recovers. In the third quarter, we delivered excellent operational and financial performance with improved earnings and cash flow. We significantly improved our cash position, reduced total debt, progressed key projects, and set a number of best-ever operational milestones. Earnings for the quarter were $6.8 billion. Year-to-date, earnings surpassed $14 billion on the strength of our upstream portfolio and industry-leading chemical and downstream businesses. Last year, during the pandemic, we worked to improve our cost structure by $3 billion versus 2019. That progress continued in the third quarter. Our structural costs are now $4.5 billion lower than 2019 on an annual basis, with a clear line of sight to continued improvements. Strong earnings and sound CapEx management resulted in cash flow after CapEx and dividends of $5.2 billion. We paid down approximately $4 billion of debt during the quarter and increased the dividend, maintaining 39 consecutive years of annual dividend growth. Good progress in improving the earnings power of our business, coupled with solid operating performance and a rapidly improving market, provides a good foundation for developing our future plans. We will finalize our plans over the course of November and will provide additional details in early December. However, I'd like to take the opportunity of this call to provide a brief overview of some key plan priorities and objectives, starting with our operations. In 2020, we delivered industry-leading performance in safety and reliability. Our go-forward plans intend to sustain that leadership position. We also established objectives to significantly reduce emissions intensity by 2025. Our focus in this effort more than paid off. We now expect to meet our objectives this year and are working to significantly raise the bar and reset our 2025 objectives. We are also ahead of schedule in our work to improve our cost structure. We expect to deliver more than the $6 billion in structural savings by 2023. We continue to find additional synergies and greater efficiency throughout our new organization. We expect to keep our capital spend within the previously communicated range of $20 to $25 billion. This represents a significant reduction versus our pre-pandemic plans. But with the changes we've made to our businesses, our new project organization, and improved use of technology, we expect to deliver the same growth in earnings and cash flow as our pre-pandemic plans, offsetting the pandemic-induced delays. In addition, we can free up funds to grow our low-carbon solutions business and further accelerate efforts to reduce emissions. From 2022 to 2027, Our cumulative capital investment in emission reduction projects is expected to be $15 billion. This year, we made substantial progress in restoring the strength of our balance sheet. By year end, we expect to be well within the debt to capital range of 20% to 25%. On Wednesday, we announced an increase in our dividend, adding to what is already a very attractive yield. In addition, given the improvements in our business and market conditions, We are expanding shareholder distributions by up to $10 billion over 12 to 24 months through a repurchase program beginning next year. Our plans are being built from the bottoms up with strong line ownership and a commitment to deliver. They are flexible and can be adjusted to adverse market conditions. They strike a strong balance across our capital allocation priorities, drive continued efficiencies, and significantly grow earnings and cash flow. while competitively positioning us for a wide range of future scenarios, including net zero pathways. We look forward to sharing more details with you later this year and into the first quarter of next year. With that, I'll now turn it back to Steven.