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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549-1004
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 23, 1995
MOBIL CORPORATION
(Exact name of registrant as specified in its charter)
DELAWARE 1-7555 13-2850309
(State or other jurisdiction of (Commission (I.R.S. Employer
incorporation or organization) File Number) Identification No.)
3225 Gallows Road
Fairfax, Virginia 22037-0001
Telephone: (703) 846-3000
(Address of principal executive offices)
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Item 5. Other Events
The Registrant hereby incorporates by reference herein the
information set forth in its News Release dated October 23, 1995,
a copy of which is annexed hereto as exhibit 99.
Item 7. Financial Statements, Pro Forma Financial Information and
Exhibits.
(c) Exhibits.
99. Mobil Corporation News Release dated October 23,
1995 reporting estimated earnings for the third
quarter of 1995.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
REGISTRANT MOBIL CORPORATION
By /S/ Gordon G. Garney
NAME AND TITLE Gordon G. Garney, Senior Assistant Secretary
DATE October 23, 1995
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EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
------- ----------------
99. Mobil Corporation, Electronic
News Release dated
October 23, 1995
<PAGE>
CONTACT: John Lord or Gail Campbell Woolley
(703) 846-2500
MOBIL CORPORATION THIRD QUARTER EARNINGS
Fairfax, VA, October 23, 1995 -- Mobil Corporation today announced estimated
third quarter operating income of $744 million, up $216 million, or 41%, from
the comparable quarter last year. Net special benefits of $42 million, the
result of a favorable litigation settlement partly offset by a charge for
writedown of certain marketing assets in Australia, increased third quarter
1995 reported net income to $786 million. Last year's third quarter reported
net income of $503 million included special charges of $25 million for asset
rationalization and restructuring in International E&P. Estimated reported
earnings per common share for the third quarter of 1995 were $1.95 compared
with $1.23 for the third quarter of 1994. For the nine months ended
September 30, 1995, Mobil's operating income was $2,086 million, up $510
million, or 32%, from the comparable period of 1994.
Commenting on third quarter operating income compared with the same quarter last
year, Chairman Lucio A. Noto said, This quarters strong improvement
resulted from significantly higher income in both the downstream petroleum
and chemical sectors. Despite somewhat weaker industry refining margins in
most enclaves, income in both the U.S. and International Marketing and
Refining increased substantially, reflecting a combination of excellent
operating performance, lower expenses, and higher lube income. In the U.S.,
seasonally high gasoline demand in the third quarter, which favors our
businesses, contributed to income.
Chemical continued to benefit from improved petrochemical industry conditions,
although we saw some slippage as the quarter progressed. Chemical income also
reflected better operating performance, including lower costs following last
year's restructuring. Exploration and Producing income held steady, as lower
exploration expenses offset lower volumes and significantly lower natural gas
prices in North America and the United Kingdom.
Mr. Noto continued, "Throughout the company, we are striving to increase
shareholder value by getting more from our existing assets and by making
investments for growth. This quarter, controllable cash operating expenses were
down more than $100 million pre-tax from last year's comparable quarter,
reflecting the benefits of ongoing restructuring and cost reduction programs.
This quarter does not include any significant benefits from the major worldwide
staff support services restructuring program announced last quarter. We expect
to begin seeing these benefits early in 1996.
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To provide for future growth, we continued to take advantage of attractive
opportunities. Since the beginning of the third quarter, we announced (1) start
of a development plan for the Zafiro area offshore Equatorial Guinea; (2) new
deep-water production from Garden Banks Block 388, and streaming of a new,
deeper reservoir in the Eugene Island 240 field, both in the Gulf of Mexico;
and (3)
development of new paraxylene manufacturing technologies which will provide
significant cost advantages, complementing our capacity expansions and
supporting our long-term objective of becoming the worlds leading paraxylene
marketer. Also, consistent with our strategy of selling businesses that are
worth more to others, we announced an agreement to sell Mobil Chemicals Plastics
Division for $1.27 billion. This sale, which is expected to be completed in the
fourth quarter, will provide cash to fund growth opportunities in our core
businesses, which could include acquisitions.
Mr. Noto concluded, "Market fundamentals in both petroleum and chemicals
continue to be uncertain and volatile and are likely to remain so in the near
term. Therefore, to better cope with these industry conditions, we continue
to take steps to improve productivity, reduce costs, and invest for growth.
COMPARISON OF THIRD QUARTER 1995 WITH THIRD QUARTER 1994
The following comments address operating income of the major business segments
during the third quarter of 1995, compared with the same quarter of 1994:
. Exploration and Producing income of $302 million was $7 million lower. In
the United States, income was $46 million, down $46 million. Significantly
lower natural gas prices and lower volumes, in part due to weather
disturbances in the Gulf of Mexico and natural field declines, were partly
offset by lower exploration expense.
International income was $256 million, up $39 million. Lower exploration
expenses and higher natural gas sales were partially offset by lower natural
gas prices in Canada and the United Kingdom and by lower crude oil prices.
. Marketing and Refining income of $377 million was $143 million higher.
Income in the United States was $148 million, up $64 million, reflecting
lower expenses, driven by ongoing business initiatives, higher fuels sales
volumes, and increased lube income. In addition, income was helped by
strong operating performance, high refinery throughput, and record gasoline
production.
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International income was $229 million, up $79 million. Income benefitted
from ongoing business initiatives, primarily expense savings in Europe and
Australia, and from the increased contribution from the Singapore refinery
upgrade. These improvements more than offset generally weaker refining
margins in most enclaves and lower marketing margins in Japan.
. Chemical income of $179 million was up $119 million, reflecting better
worldwide margins on polyethylene resin, as well as on paraxylene from the
Singapore petrochemicals complex. Ongoing business initiatives and benefits
from restructuring also contributed to the improvement.
. Corporate and Other expense of $37 million was $25 million higher, mainly
due to costs associated with the design and implementation of our worldwide
staff support services organization.
. Net Financing Expense of $77 million was $14 million higher, principally
reflecting higher average effective interest rates.
COMPARISON OF NINE MONTHS 1995 WITH NINE MONTHS 1994
Mobil's estimated 1995 year-to-date operating income was $2,086 million, up $510
million, or 32%, from the comparable period last year. Year-to-date 1995 net
income included net special charges of $485 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 in
the comparable period of 1994 were $340 million, primarily for North American
property writedowns and Chemical restructuring. Including special charges,
reported net income for the first nine months of 1995 was $1,601 million,
compared with $1,236 million for the same period of 1994 (excluding from last
year the $680 million non-cash charge for the change in accounting principle
related to inventories).
The $510 million increase in operating income reflected improvements in all
three core business segments, especially in Chemical, where income has
benefitted from significantly higher worldwide petrochemical margins, as
well as from business initiatives. In Marketing and Refining, lower
expenses, higher volumes, better refinery performance, and higher lube
income more than offset significantly lower
worldwide industry refining margins. In Exploration and Producing, higher
worldwide crude oil prices and lower exploration expenses more than offset lower
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natural gas prices. In addition, production volumes were down about 50 TBDOE,
reflecting, in part, adverse weather conditions in the Gulf of Mexico and
operational interruptions in Nigeria. Net Financing Expense increased as a
result of higher average effective interest rates and the absence of certain
favorable non-recurring items reported in last year's results.
Capital and Exploration Expenditures for the third quarter of 1995 were
estimated at $1,119 million, an increase of $118 million from the comparable
period last year. For the first nine months of 1995, worldwide capital and
exploration expenditures were estimated at $2,897 million, compared with
$2,666 million for the year-earlier period.
Mobil's estimated Return on Average Shareholders' Equity for the twelve months
ended September 30, 1995, was 12.2%, compared with 10.4% for calendar year 1994
(excluding the cumulative effect of the change in accounting principle).
Estimated Return on Average Capital Employed for the twelve months ended
September 30, 1995, was 9.6%, compared with 8.4% for calendar year 1994
(excluding the cumulative effect of the change in accounting principle).
Mobil's estimated Debt to Capitalization Ratio was 30% at September 30, 1995 and
31% at December 31, 1994.
Common Stock Dividends were $.925 per share in the third quarter of 1995 and
$2.70 per share for the first nine months of 1995, up 7.5 cents and 15 cents,
respectively, from the comparable periods last year.
<TABLE>
Table 1
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
---------------------- ----------------------
1994 1995 Incr/ 1994 1995 Incr/
INCOME ($MM) Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 92 46 (46) 105 185 80
International 192 256 64 664 792 128
------ ------ ------ ------ ------ ------
Total E&P 284 302 18 769 977 208
M&R: United States 84 148 64 184 131 (53)
International 150 200 50 475 231 (244)
------ ------ ------ ------ ------ ------
Total M&R 234 348 114 659 362 (297)
------ ------ ------ ------ ------ ------
Total Petroleum 518 650 132 1,428 1,339 (89)
Chemical 60 179 119 (1) 523 524
Corporate and Other (a) (12) 34 46 (36) (46) (10)
Net Financing Expense (63) (77) (14) (155) (215) (60)
------ ------ ------ ------ ------ ------
Income Before Change in
Accounting Principle 503 786 283 1,236 1,601 365
Change in Accounting
Principle (b) - - - (680) - 680
------ ------ ------ ------ ------ ------
Net Income 503 786 283 556 1,601 1,045
========== ====== ====== ====== ====== ====== ======
COMMON SHARES OUTSTANDING (MM)
Average 398.1 395.5 (2.6) 398.3 395.7 (2.6)
End of Period ... ... ... 397.5 395.2 (2.3)
EARNINGS PER COMMON SHARE
BASED ON ($) (c)
Before Chg in Accounting
Principle 1.23 1.95 0.72 3.00 3.94 0.94
Net Income 1.23 1.95 0.72 1.29 3.94 2.65
DIVIDENDS
Common Stock
Total Paid ($MM) 339 366 27 1,016 1,069 53
Per Share ($) 0.85 0.925 0.075 2.55 2.70 0.15
Preferred Stock ($MM) 14 14 - 43 42 (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>
<TABLE>
Table 2
MOBIL CORPORATION
<CAPTION>
1994 by Quarter and Year 1995
INCOME ADJUSTED FOR ------------------------------ ------------------
SPECIAL ITEMS ($MM) 1Q 2Q 3Q 4Q Year 1Q 2Q 3Q Est
----- ----- ----- ----- ------ ----- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 77 79 92 58 306 82 109 46
International 258 256 217 287 1,018 295 266 256
----- ----- ----- ----- ------ ----- ----- ------
Total E&P 335 335 309 345 1,324 377 375 302
M&R: United States 61 74 84 54 273 - 87 148
International 175 150 150 216 691 146 153 229
----- ----- ----- ----- ------ ----- ----- ------
Total M&R 236 224 234 270 964 146 240 377
----- ----- ----- ----- ------ ----- ----- ------
Total Petroleum 571 559 543 615 2,288 523 615 679
Chemical 15 39 60 110 224 174 186 179
Corporate and Other (a) (13) (31) (12) (16) (72) 4 (22) (37)
Net Financing Expense (38) (54) (63) (54) (209) (65) (73) (77)
----- ----- ----- ----- ------ ----- ----- ------
Oper. Income Bef. Special
Items and Change in
Accounting Principle 535 513 528 655 2,231 636 706 744
Special Items - (315) (25) (132) (472) - (527) 42
Change in Accounting
Principle (b) (680) - - - (680) - - -
----- ----- ----- ----- ------ ----- ----- ------
Net Income (145) 198 503 523 1,079 636 179 786
========== ===== ===== ===== ===== ====== ===== ===== ======
EARNINGS PER COMMON SHARE
BASED ON: ($) (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 1.85
Net Income (.40) 0.46 1.23 1.28 2.57 1.57 0.42 1.95
(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>
<TABLE>
Table 3
MOBIL CORPORATION
<CAPTION>
1994 by Quarter and Year 1995
SPECIAL ITEMS ------------------------------ ---------------------
AFFECTING INCOME ($MM) 1Q 2Q 3Q 4Q Year 1Q 2Q 3Q Est
----- ----- ---- ----- ------- ---- ----- ------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
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) -
Property Writedowns - - - - - - - (29)
Chemical
Restructuring - (115) - - (115) - (16) (a) -
Environmental Provision - - - (7) (7) - - -
Corp/Other
Restructuring - 20 - - 20 - (62) (a) -
Property Writedowns - - - (46) (46) - - -
Litigation Settlement - - - - - - - 71
----- ----- ---- ----- ------- ---- ----- ------
Total Specials - (315) (25) (132) (472) - (527) 42
Change in Accounting
Principle (680) - - - (680) - - -
----- ----- ---- ----- ------- ---- ----- ------
Total Special/Other Items(680) (315) (25) (132) (1,152) - (527) 42
===== ===== ==== ===== ======= ==== ===== ======
(a) Staff redesign project.
(b) Includes $65 million for staff services redesign and $39 million for furth
restructuring of marketing and refining operations.
(c) Includes $88 million for staff services redesign and $180 million for Euro
refining.
</TABLE>
<TABLE>
Table 4
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
------------------------- --------------------------
CAPITAL AND EXPLORATION 1994 1995 Incr/ 1994 1995 Incr/
EXPENDITURES ($MM) Act Est (Decr) Act Est (Decr)
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States
Exploration Expenses 40 27 (13) 77 53 (24)
Other Expenditures 117 279 162 357 524 167
------- ------- ------- ------- ------- -------
Total E&P--U.S. 157 306 149 434 577 143
International
Exploration Expenses 112 75 (37) 265 223 (42)
Other Expenditures 342 384 42 823 1,044 221
------- ------- ------- ------- ------- -------
Total E&P--Int'l 454 459 5 1,088 1,267 179
------- ------- ------- ------- ------- -------
Total E&P 611 765 154 1,522 1,844 322
M&R: United States 133 94 (39) 374 333 (41)
International 183 178 (5) 488 502 14
------- ------- ------- ------- ------- -------
Total M&R 316 272 (44) 862 835 (27)
------- ------- ------- ------- ------- -------
Total Petroleum 927 1,037 110 2,384 2,679 295
Chemical 40 63 23 159 155 (4)
Other 34 19 (15) 123 63 (60)
------- ------- ------- ------- ------- -------
Total Mobil Corporation 1,001 1,119 118 2,666 2,897 231
======= ======= ======= ======= ======= =======
OTHER FINANCIAL DATA ($MM)
Total Revenues 16,886 18,637 1,751 48,219 55,113 6,894
Depreciation, Depletion,
and Amortization 673 688 15 2,375 2,225 (150)
Income Taxes 561 616 55 1,505 (a) 1,611 106
AVERAGE U.S. PRICES
Crude ($/BBL) 14.38 14.34 (0.04) 12.59 14.72 2.13
NGL ($/BBL) 10.55 9.49 (1.06) 9.85 9.94 0.09
Natural Gas ($/MCF) 1.76 1.45 (0.31) 2.01 1.51 (0.50)
AVERAGE INT'L. PRICES
Crude ($/BBL) 16.78 16.25 (0.53) 15.38 17.01 1.63
Natural Gas ($/MCF) 2.59 2.44 (0.15) 2.44 2.50 0.06
(a) Excludes income taxes attributable to change in accounting principle related
to foreign inventories.
</TABLE>
<TABLE>
Table 5
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
---------------------- ----------------------
1994 1995 Incr/ 1994 1995 Incr/
OPERATING HIGHLIGHTS Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET PRODUCTION OF LIQUIDS (TBD)
United States 305 278 (27) 297 285 (12)
Canada 52 53 1 56 53 (3)
Indonesia 72 82 10 79 77 (2)
Nigeria 173 156 (17) 174 149 (25)
Norway 93 87 (6) 95 91 (4)
United Kingdom 61 72 11 68 74 6
Other 83 83 - 78 79 1
------ ------ ------ ------ ------ ------
Total International 534 533 (1) 550 523 (27)
------ ------ ------ ------ ------ ------
Worldwide 839 811 (28) 847 808 (39)
====== ====== ====== ====== ====== ======
NET PRODUCTION OF NATURAL GAS (MMCFD)
United States 1,583 1,417 (166) 1,572 1,479 (93)
Canada 454 400 (54) 453 429 (24)
Germany 269 323 54 363 409 46
Indonesia 1,600 1,538 (62) 1,637 1,559 (78)
United Kingdom 262 306 44 434 516 82
Other 136 110 (26) 149 142 (7)
------ ------ ------ ------ ------ ------
Total International 2,721 2,677 (44) 3,036 3,055 19
------ ------ ------ ------ ------ ------
Worldwide 4,304 4,094 (210) 4,608 4,534 (74)
====== ====== ====== ====== ====== ======
TOTAL NET
PRODUCTION (TBDOE) 1,604 1,539 (65) 1,666 1,614 (52)
====== ====== ====== ====== ====== ======
NATURAL GAS SALES (MMCFD)
United States
Equity 1,938 1,727 (211) 1,938 1,820 (118)
Resale 797 1,685 888 764 1,709 945
------ ------ ------ ------ ------ ------
Total United States 2,735 3,412 677 2,702 3,529 827
International 2,542 2,838 296 2,993 3,167 174
------ ------ ------ ------ ------ ------
Worldwide 5,277 6,250 973 5,695 6,696 1,001
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
Table 6
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
---------------------- ----------------------
1994 1995 Incr/ 1994 1995 Incr/
OPERATING HIGHLIGHTS Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
REFINERY RUNS (TBD)
Runs for and by Mobil
United States 852 902 50 852 897 45
Europe 457 433 (24) 419 428 9
Pacific Rim 634 625 (9) 622 654 32
All Other 165 159 (6) 165 140 (25)
------ ------ ------ ------ ------ ------
Total 2,108 2,119 11 2,058 2,119 61
Runs for Mobil by Others 16 8 (8) 21 9 (12)
------ ------ ------ ------ ------ ------
Worldwide Runs for Mobil 2,124 2,127 3 2,079 2,128 49
====== ====== ====== ====== ====== ======
PETROLEUM PRODUCT SALES (TBD)
United States
Automotive Gasoline
Sales to Trade 536 553 17 520 535 15
Supply/Other Sales 135 247 112 141 210 69
------ ------ ------ ------ ------ ------
Total Automotive Sales 671 800 129 661 745 84
Distillates/Jet Fuel 257 280 23 279 306 27
Other 198 205 7 193 215 22
------ ------ ------ ------ ------ ------
Total United States 1,126 1,285 159 1,133 1,266 133
Europe 782 793 11 788 779 (9)
Pacific Rim 776 777 1 762 794 32
All Other 318 340 22 316 312 (4)
------ ------ ------ ------ ------ ------
Worldwide 3,002 3,195 193 2,999 3,151 152
====== ====== ====== ====== ====== ======
U.S. CHEMICAL PRODUCTION (MM LBS)
Polyethylene 402 420 18 1,280 1,316 36
CHEMICAL SALES BY PRODUCT CATEGORY ($MM)
Petrochemicals 592 719 127 1,440 2,268 828
Plastics 466 524 58 1,348 1,549 201
Chemical Products 26 27 1 72 86 14
------ ------ ------ ------ ------ ------
Total 1,084 1,270 186 2,860 3,903 1,043
====== ====== ====== ====== ====== ======
</TABLE>
