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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): July 22, 1996
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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<PAGE>
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Item 5. Other Events
The Registrant hereby incorporates by reference herein the
information set forth in its News Release dated July 22, 1996, 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 July 22,
1996 reporting estimated earnings for the second quarter of 1996.
<PAGE>
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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 July 22, 1996
<PAGE>
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EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
------- ----------------
99. Mobil Corporation, Electronic
News Release dated
July 22, 1996
CONTACTS: David Dickson, Gail Campbell Woolley, EXHIBIT 99
Christopher Springham, +1 703 846 2500
Fairfax, VA, July 22, 1996 -- Mobil Corporation today announced
record estimated second quarter 1996 operating income of $814
million, up $108 million, or 15%, from the $706 million earned in
the comparable quarter last year. Special charges this year of
$31 million for implementation expenses associated with the
restructuring of staff support services result in net income of
$783 million. Special charges included last year of $527 million
were primarily for the restructuring of worldwide staff support
services and of marketing and refining operations in the United
States and Europe. After special charges, net income last year
was $179 million. Estimated operating earnings per common share
for the second quarter of 1996 were $2.03 compared with $1.75 for
the second quarter of 1995. On a reported basis, earnings per
share were $1.95 in 1996 compared to $0.42 in 1995. For the six
months ended June 30, 1996, Mobil's operating income was a record
$1,550 million, up $208 million, or 15%, from the comparable
period in 1995.
In commenting on this quarter's operating income compared with the
same quarter last year, Chairman Lucio A. Noto said, "The second
quarter was the companys most profitable quarter in its history,
reflecting not only strong industry factors but also strong
performance from our initiatives programs. Mobil's improvement
this year reflected favorable industry fundamentals in the
petroleum sector, partly offset by weaker margins in the chemical
sector. Mobil's worldwide average crude oil and U.S. natural gas
prices were up about $1.50 per barrel and $0.55 per thousand cubic
feet, respectively, contributing to higher upstream earnings.
Higher worldwide refining margins and higher product sales
benefited earnings in the downstream sector. All sectors
realized benefits from our restructuring programs. Growth
initiatives also contributed to the increased downstream earnings.
These positive factors were, however, partially offset by weaker
marketing margins in the United Kingdom, reflecting intense
competitive pressures, as well as lower worldwide polyethylene and
paraxylene margins. Additionally, income was lower due to the
absence of income from our divested Plastics and resin trading
businesses and the expiration of the tax holiday for our
petrochemicals joint venture in Saudi Arabia."
Mr. Noto added, "This quarter, pre-tax controllable cash operating
expenses were $60 million lower than the same period last year,
reflecting the impact of our ongoing restructuring programs.
These net savings were achieved after absorbing higher expenses
due to inflation and volume growth.
Mr. Noto concluded, "Business fundamentals are unpredictable in
the near term and cannot be relied upon to sustain or improve
earnings. Therefore, we continue to manage our business for the
long-term with the objectives of strengthening our asset base and
ensuring long-term, profitable growth. In support of these
objectives, we have announced two significant upstream
acquisitions and two asset sales covering non-core businesses that
are worth more to others. The acquisition of Ampolex Limited, an
Australia based global oil and gas company with significant
exploration and production potential, and the acquisition of a 25%
interest in the giant Tengiz oil field in Kazakstan have added
substantial oil and gas to our production and hydrocarbon reserves
base. Two additional transactions, the pending sale of our
community land development business and the sale of Tucker
Housewares, reflect the continued focus on our core businesses and
the upgrading of our asset base. Cash proceeds from asset sales
continue to provide significant funding for reinvestment in growth
opportunities."
COMPARISON OF SECOND QUARTER 1996 WITH SECOND QUARTER 1995
The following comments address the operating performance of the
major business segments during the second quarter of 1996, as
compared with the same quarter of 1995:
. Exploration and Producing income of $470 million was $95
million higher.
In the United States, income was $167 million, up $58 million, as
higher prices for crude oil and natural gas and lower producing
expenses were only partially offset by the effects of lower
production volumes, primarily resulting from prior asset
disposals and natural field declines. The favorable impact of
higher natural gas prices was somewhat reduced by opportunity
losses on forward sales made as part of our risk management
program. Lower capital recovery charges resulting from the 1995
adoption of FAS 121 also benefited earnings.
International income of $303 million was $37 million higher,
principally due to higher crude oil prices and lower exploration
and producing expenses. Production volumes were higher
reflecting the first recorded production from the Ampolex and
Tengiz acquisitions and additional production from new wells and
investment programs in Nigeria. These favorable factors more
than offset operating problems in the U.K. and Australia, a
strike in Norway and the impact of timing on liftings from
Indonesia.
. Marketing and Refining income of $352 million was $112
million higher.
United States income was $169 million this year versus $87
million last year. This year's results benefited from higher
margins, reflecting rising gasoline demand as we entered the
driving season following an unseasonably cold winter and a high
level of unscheduled industry refinery downtime. Lower expenses
from our restructuring programs and growth in retail automotive
gasoline sales also contributed to this years performance.
International income of $183 million was up $30 million, as
higher worldwide refining margins were partly offset by lower
marketing margins in the United Kingdom due to continuing intense
competitive pressures. Higher product sales to trade also
contributed to improved earnings, primarily reflecting strong
demand in the Asia-Pacific area.
. Chemical income of $65 million was $121 million lower than
last year's record $186 million quarter. This decline
reflected lower worldwide polyethylene resin and paraxylene margins,
the absence of income from the divested Plastics and
resin trading businesses and the expiration of the tax holiday in
Saudi Arabia.
. Net Financing Expense of $47 million was $26 million lower,
reflecting lower average debt balances as well as the
timing of certain favorable, non-recurring items.
COMPARISON OF SIX MONTHS 1996 WITH SIX MONTHS 1995
Mobil's estimated first half 1996 reported net income was $1,519
million, compared with $815 million for the same period of 1995.
First half 1995 net income included special charges of $527
million for restructuring of worldwide staff support services,
marketing and refining operations in the United States, and
refining in Europe. This year's income included special charges
of $31 million for expenses related to implementation of the staff
redesign project.
Excluding special items, first half operating income of $1,550
million was up $208 million, or 15%, from the comparable period of
1995. This improvement was in the petroleum sector, primarily due
to stronger prices, higher refining margins, higher product sales
to trade, savings from restructuring initiatives and benefits from
growth initiatives. These were partly offset by lower marketing
margins in the U.K. and Japan, as well as a decline in Chemical
income. In the Petroleum sector, higher prices and higher
refining margins reflected the effects of colder winter weather in
the northern hemisphere and strong demand. Chemical income
declined due to lower polyethylene and paraxylene margins, the
absence of income from divested businesses and the expiration of
the Saudi Arabia tax holiday.
Capital and Exploration Expenditures for the second quarter of
1996 were estimated at $1,043 million, an increase of $83 million
from the comparable period last year. For the first six months
of 1996, worldwide capital and exploration expenditures were
estimated at $1,955 million, compared with $1,778 million for the
year earlier period.
In addition to the above Capital and Exploration spending, Mobil
also completed two major upstream investments during the quarter.
Firstly, approximately $1.3 billion has been spent to date on the
acquisition of Ampolex Limited. Secondly, Mobil acquired a 25%
equity interest in the Tengiz oil field in Kazakstan for $1.1
billion, of which about half has been paid and the balance will be
settled in installments through the year 2000, contingent upon
reaching certain project milestones.
Mobil's estimated Return on Average Shareholders' Equity for the
twelve months ended June 30, 1996, based upon reported income, was
17.1%, compared with 13.5% for calendar year 1995. (On an
operating basis, excluding special items, returns were 17.0% and
16.2% for the same periods.) Estimated Return on Average Capital
Employed for the twelve months ended June 30, 1996, based upon
reported income, was 13.0% compared with 10.9% for calendar year
1995. (On an operating basis, excluding special items, returns
were 12.9 % and 12.8% for the same periods.)
Mobil's estimated Debt-to-capitalization Ratio was 31% at June 30,
1996, and 27% at December 31, 1995. The increase in debt was
primarily due to funding of the Ampolex and Tengiz acquisitions.
Common Stock Dividends were $1.00 per share in the second quarter
of 1996 and $1.925 per share for the first half of 1996, $.075 and
$.15 per share higher than the comparable periods last year.
<TABLE>
Table 1
MOBIL CORPORATION
<CAPTION>
Second Quarter Six Months
----------------------- -----------------------
1995 1996 Incr/ 1995 1996 Incr/
INCOME ($MM) Act Est (Decr) Act Est (Decr)
------ ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 57 167 110 139 322 183
International 241 303 62 536 660 124
------ ------ ------- ------ ------ -------
Total E&P 298 470 172 675 982 307
M&R: United States (17) 169 186 (17) 228 245
International (115) 183 298 31 364 333
------ ------ ------- ------ ------ -------
Total M&R (132) 352 484 14 592 578
------ ------ ------- ------ ------ -------
Total Petroleum 166 822 656 689 1,574 885
Chemical 170 65 (105) 344 135 (209)
Corporate and Other (a) (84) (57) 27 (80) (85) (5)
Net Financing Expense (73) (47) 26 (138) (105) 33
------ ------ ------- ------ ------ -------
Net Income 179 783 604 815 1,519 704
========== ====== ====== ======= ====== ====== =======
COMMON SHARES OUTSTANDING (MM)
Average 395.8 394.3 (1.5) 395.8 394.4 (1.4)
End of Period ... ... ... 395.5 394.0 (1.5)
EARNINGS PER COMMON SHARE ($)
Based on Net Income (b) 0.42 1.95 1.53 1.99 3.78 1.79
DIVIDENDS
Common Stock
Total Paid ($MM) 366 394 28 703 759 56
Per Share ($) 0.925 1.00 0.075 1.775 1.925 0.150
Preferred Stock ($MM) 14 13 (1) 28 27 (1)
(a) Includes the results of Real Estate operations, Mining and Minerals,
administrative expenses, and other corporate items.
(b) 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>
1995 by Quarter and Year 1996
INCOME ADJUSTED FOR ------------------------------- --------------
SPECIAL ITEMS ($MM) 1Q 2Q 3Q 4Q Year 1Q Act 2Q Est
----- ----- ----- ----- ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 82 109 46 95 332 155 167
International 295 266 256 248 1,065 357 303
----- ----- ----- ----- ------ ------ ------
Total E&P 377 375 302 343 1,397 512 470
M&R: United States - 87 148 95 330 59 169
International 146 153 229 277 805 181 183
----- ----- ----- ----- ------ ------ ------
Total M&R 146 240 377 372 1,135 240 352
----- ----- ----- ----- ------ ------ ------
Total Petroleum 523 615 679 715 2,532 752 822
Chemical 174 186 179 140 679 70 65
Corp and Other (a) 4 (22) (37) (15) (70) (28) (26)
Net Financing Expense (65) (73) (77) (80) (295) (58) (47)
----- ----- ----- ----- ------ ------ ------
Oper. Income Before
Special Items 636 706 744 760 2,846 736 814
Special Items - (527) 42 15 (470) - (31)
----- ----- ----- ----- ------ ------ ------
Net Income 636 179 786 775 2,376 736 783
========== ===== ===== ===== ===== ====== ====== ======
EARNINGS PER COMMON SHARE ($)
BASED ON:
Operating Income Before
Special Items (b) 1.57 1.75 1.85 1.89 7.06 1.83 2.03
Net Income (b) 1.57 0.42 1.95 1.93 5.87 1.83 1.95
(a) Includes the results of Real Estate operations, Mining and Minerals,
administrative expenses, and other corporate items.
(b) 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>
1995 by Quarter and Year 1996
SPECIAL ITEMS ------------------------------------ --------------
AFFECTING INCOME ($MM) 1Q 2Q 3Q 4Q Year 1Q Act 2Q Est
----- ----- ----- ------- ------- ------ ------
<S> <C> <C> <C> <C> <C> <C> <C>
E&P United States
Asset Sales - (22) - - (22) - -
Asset Impairment - - - (366) (366) - -
Restructuring - (30) (a) - (21) (51) - -
E&P International
Asset Sales - - - 23 23 - -
Asset Impairment - - - (121) (121) - -
Tax Adjustment - - - 26 26 - -
Restructuring - (25) (a) - (16) (41) - -
M&R United States
Restructuring - (104) (b) - - (104) - -
M&R International
LIFO/Oth. Inv. Adj. - - - (13) (13) - -
Property Writedowns - - (29) - (29) - -
Restructuring - (268) (c) - (48) (316) - -
Chemical
Asset Sales - - - 501 501 - -
Restructuring - (16) (a) - - (16) - -
Corp/Other
Asset Sales - - - 74 74 - -
Environmental - - - (24) (24) - -
Restructuring - (62) (a) - - (62) - -
Litigation Settle. - - 71 - 71 - -
SRP Implementation (a) - - - - - - (31)
----- ----- ----- ------- ------- ------ ------
Total Special Items - (527) 42 15 (470) - (31)
===== ===== ===== ======= ======= ====== ======
(a) Staff redesign project (SRP).
(b) Includes $65 million for staff redesign project and $39 million for
further restructuring of marketing and refining operations.
(c) Includes $88 million for staff redesign project and $180 million for
European refining.
</TABLE>
<TABLE>
Table 4
MOBIL CORPORATION
<CAPTION>
Second Quarter Six Months
------------------------ -------------------------
CAPITAL AND EXPLORATION 1995 1996 Incr/ 1995 1996 Incr/
EXPENDITURES ($MM) Act Est (Decr) Act Est (Decr)
------- ------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
Exploration & Producing
United States 158 154 (4) 271 272 1
International 433 435 2 808 846 38
------- ------- ------ ------- ------- ------
Total E&P 591 589 (2) 1,079 1,118 39
------- ------- ------ ------- ------- ------
Marketing & Refining
United States 115 92 (23) 239 174 (65)
International 181 260 79 324 487 163
------- ------- ------ ------- ------- ------
Total M&R 296 352 56 563 661 98
------- ------- ------ ------- ------- ------
Total Petroleum 887 941 54 1,642 1,779 137
Chemical 52 79 27 92 131 39
Other 21 23 2 44 45 1
------- ------- ------ ------- ------- ------
Total Mobil Corporation 960 1,043 83 1,778 1,955 177
======= ======= ====== ======= ======= ======
Memo:
Exploration expenses charged
to income, included above
United States 8 24 16 26 33 7
International 71 48 (23) 148 115 (33)
------- ------- ------ ------- ------- ------
Total Exploration Expenses 79 72 (7) 174 148 (26)
======= ======= ====== ======= ======= ======
=============================================================================
OTHER FINANCIAL DATA ($MM)
Total Revenues 18,849 19,548 699 36,476 38,248 1,772
Depreciation, Depletion,
and Amortization 868 603 (265) 1,537 1,258 (279)
Income Taxes 401 805 404 995 1,591 596
AVERAGE U.S. PRICES
Crude ($/BBL) 15.50 17.12 1.62 14.90 16.48 1.58
NGL ($/BBL) 9.97 12.37 2.40 9.99 12.20 2.21
Natural Gas ($/MCF) 1.59 2.16 0.57 1.53 2.25 0.72
AVERAGE INT'L. PRICES
Crude ($/BBL) 18.11 19.50 1.39 17.41 19.04 1.63
Natural Gas ($/MCF) 2.62 2.50 (0.12) 2.54 2.51 (0.03)
</TABLE>
<TABLE>
Table 5
MOBIL CORPORATION
<CAPTION>
Second Quarter Six Months
----------------------- -----------------------
1995 1996 Incr/ 1995 1996 Incr/
OPERATING HIGHLIGHTS Act Est (Decr) Act Est (Decr)
------ ------ ------- ------ ------ -------
<S> <C> <C> <C> <C> <C> <C>
NET PRODUCTION OF LIQUIDS
(TBD)
United States 285 278 (7) 287 274 (13)
Canada 52 53 1 53 53 -
Indonesia 76 69 (7) 75 75 -
Nigeria 154 201 47 145 198 53
Norway 93 83 (10) 93 83 (10)
United Kingdom 71 58 (13) 75 62 (13)
Other 76 93 17 76 84 8
------ ------ ------- ------ ------ -------
Total International 522 557 35 517 555 38
------ ------ ------- ------ ------ -------
Worldwide 807 835 28 804 829 25
====== ====== ======= ====== ====== =======
NET PRODUCTION OF NATURAL GAS (MMCFD)
United States 1,528 1,387 (141) 1,511 1,407 (104)
Canada 398 396 (2) 444 421 (23)
Germany 431 537 106 453 531 78
Indonesia 1,487 1,291 (196) 1,569 1,474 (95)
United Kingdom 513 525 12 622 717 95
Other 125 132 7 159 141 (18)
------ ------ ------- ------ ------ -------
Total International 2,954 2,881 (73) 3,247 3,284 37
------ ------ ------- ------ ------ -------
Worldwide 4,482 4,268 (214) 4,758 4,691 (67)
====== ====== ======= ====== ====== =======
TOTAL NET
PRODUCTION (TBDOE) 1,604 1,594 (10) 1,650 1,663 13
====== ====== ======= ====== ====== =======
NATURAL GAS SALES (MMCFD)
United States
Equity 1,835 1,691 (144) 1,867 1,710 (157)
Resale 1,644 802 (842) 1,721 960 (761)
------ ------ ------- ------ ------ -------
Total United States 3,479 2,493 (986) 3,588 2,670 (918)
International 3,038 2,954 (84) 3,334 3,474 140
------ ------ ------- ------ ------ -------
Worldwide 6,517 5,447 (1,070) 6,922 6,144 (778)
====== ====== ======= ====== ====== =======
</TABLE>
<TABLE>
Table 6
MOBIL CORPORATION
<CAPTION>
Second Quarter Six Months
----------------------- -----------------------
1995 1996 Incr/ 1995 1996 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 884 939 55 894 909 15
Europe 432 327 (105) 426 319 (107)
Asia Pacific 659 688 29 669 697 28
All Other 124 187 63 130 181 51
------ ------ ------- ------ ------ -------
Total 2,099 2,141 42 2,119 2,106 (13)
Runs for Mobil by Others 9 9 - 9 9 -
------ ------ ------- ------ ------ -------
Worldwide Runs for Mobil 2,108 2,150 42 2,128 2,115 (13)
====== ====== ======= ====== ====== =======
PETROLEUM PRODUCT SALES (TBD)
United States
Automotive Gasoline
Sales to Trade 545 552 7 525 544 19
Supply/Other Sales 192 222 30 191 195 4
------ ------ ------- ------ ------ -------
Total Automotive Sales 737 774 37 716 739 23
Distillates/Jet Fuel 290 289 (1) 319 326 7
Other 228 236 8 220 226 6
------ ------ ------- ------ ------ -------
Total United States 1,255 1,299 44 1,255 1,291 36
Europe 787 779 (8) 773 800 27
Asia Pacific 772 772 - 802 795 (7)
Other 283 349 66 298 364 66
------ ------ ------- ------ ------ -------
Worldwide 3,097 3,199 102 3,128 3,250 122
====== ====== ======= ====== ====== =======
CHEMICAL SALES (MM LBS)
Worldwide Polyethylene Resin 619 604 (15) 1,186 1,245 59
CHEMICAL SALES BY PRODUCT CATEGORY ($MM)
Petrochemicals 798 434 (364) 1,549 952 (597)
Films Products 208 200 (8) 397 380 (17)
Chemical Products 26 30 4 59 58 (1)
Other Plastics 338 34 (304) 628 73 (555)
------ ------ ------- ------ ------ -------
Total 1,370 698 (672) 2,633 1,463 (1,170)
====== ====== ======= ====== ====== =======
</TABLE>
