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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 22, 1997
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 October 22, 1997,
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 22,
1997 reporting estimated earnings for the third
quarter of 1997.
<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 October 22, 1997
<PAGE>
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EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
------- ----------------
99. Mobil Corporation, Electronic
News Release dated
October 22, 1997
Exhibit 99
CONTACT: Dave Dickson, +1 703 846 2378
MOBIL ANNOUNCES RECORD QUARTERLY OPERATING EARNINGS OF $907 MILLION
Fairfax, VA, October 22, 1997 -- Mobil Corporation today reported
record quarterly operating earnings of $907 million for the third
quarter of 1997, an increase of $239 million over the same quarter
last year. Operating earnings per common share were $1.14,
compared with $0.83 in third quarter 1996, an increase of 37
percent.
Net income of $892 million included net special charges of $15
million, as gains on various asset sales were more than offset by
restructuring charges, net unfavorable litigation charges and an
accrual for a one-time cash bonus to employees. Last year's net
income of $769 million included net special benefits of $101
million reflecting gains on asset sales, partly offset by a special
charge for implementation expenses for the Staff Redesign Project.
Third quarter net income per common share was $1.12 this year
compared with $0.96 in 1996, restated to reflect the two-for-one
stock split which had a record date of May 20, 1997.
In commenting on third quarter 1997 operating earnings compared
with the same period in 1996, Chairman and Chief Executive Officer
Lucio A. Noto said, "This quarter's earnings were Mobil's highest
ever, reflecting strong volume growth from initiatives and, in
general, strong performance by our business units. Overall for the
quarter, industry factors were somewhat favorable. Downstream
margins in the U.S. and Europe, worldwide aromatics margins and
U.S. natural gas prices were higher, while worldwide crude oil
prices and international gas prices were lower.
"In the upstream, despite a significant decrease in crude oil
prices, worldwide earnings were higher. Production
increased over 7 percent in the third quarter and over 5
percent so far this year, the result of Mobil's growth
initiatives in Nigeria, Equatorial Guinea, Australia/Papua
New Guinea, Kazakhstan and Qatar.
"Downstream, Mobil's U.S. marketing and refining business
achieved its second consecutive quarter of record earnings
helped by strong margins and excellent operating performance
at our refineries.
"In international downstream, Europe continues to benefit
from the alliance with BP. In Asia-Pacific, earnings were up
substantially despite the economic downturn in parts of the
region and weakness in industry refining margins. Earnings
benefited from good performance, higher sales as a result of
a strong marketing presence and the streaming of our new
lubes facility at Jurong in Singapore.
<PAGE>
"Chemical operations continued to post solid performance.
Paraxylene and other aromatics volumes increased, reflecting
capacity increases of nearly 50 percent since last year. The
higher volumes, when combined with higher margins and
improved operating performance, led to increased earnings
this year."
Mr. Noto continued, "At year-end 1996, Mobil essentially achieved
its financial goals for 1998, a full two years early. The
corporation has not only been able to sustain this level of
performance, but is improving. Recognizing that our employees are
responsible for those achievements, we are rewarding them with a
cash bonus. A reserve for $50 million after tax has been recorded
this quarter to provide for this payment. Mobil recently
established aggressive new long-term goals for the company with the
objective of achieving top quartile performance versus other major oil
companies.
"A reserve of $61 million after tax was also established to
implement a major restructuring of our Japanese marketing and
refining business. In response to the deregulated business
environment in Japan, we have established performance improvement
goals aimed at expense reduction and revenue enhancement."
Mr. Noto concluded, "Worldwide downstream margins have weakened
considerably going into the fourth quarter, particularly in the
United States, while hydrocarbon prices have strengthened somewhat.
Business fundamentals, as reflected in these recent price and margin
swings, continue to be unpredictable in the near term and cannot be
relied upon to sustain or improve earnings. Therefore, future
earnings growth will be driven by self-help programs -- volume growth,
performance improvements and expense control."
The following comments address the operating performance of the
major business segments during the third quarter and first nine
months of 1997, as compared with the same periods in 1996 (refer to
Table 2):
COMPARISON OF THIRD QUARTER 1997 WITH THIRD QUARTER 1996
- - Exploration and Producing earnings were $440 million, $18
million higher than last year's third quarter.
In the United States, earnings were $123 million, down $29
million, primarily due to lower production volumes resulting
from asset sales and natural field declines. The favorable
effect of higher natural gas prices was more than offset by
lower crude oil prices.
International earnings of $317 million were $47 million
higher. Benefits related to higher volumes and lower
exploration expenses were somewhat offset by the impact of
lower crude oil and natural gas prices and higher operating
expenses in new venture areas.
<PAGE>
- - Marketing and Refining earnings of $449 million were $218
million higher than third quarter 1996.
United States operations generated record earnings of $240
million, $157 million higher than last year. The strong
results were driven by higher industry margins, improved
refinery performance and increased trade sales volumes.
International earnings of $209 million were $61 million
higher than in 1996. Results in Europe improved due to
higher margins and the benefits of the Mobil-BP alliance.
Higher Asia-Pacific earnings reflected higher volumes, higher
margins in aromatics, lower refinery turnaround costs and
benefits from the new lube refinery at Singapore.
- - Chemical earnings of $102 million were $12 million higher
than last year's third quarter. The improvement reflected
higher volumes across all segments of the business. Other
contributing factors were improved margins in paraxylene and
strong performance in oriented polypropylene films.
- - Corporate and Financing expense was $84 million, $9 million
higher than the comparable period last year as the loss of
operating income from certain noncore businesses sold last
year was partly offset by reduced interest expense related to
lower net debt balances.
COMPARISON OF NINE MONTHS 1997 WITH NINE MONTHS 1996
Mobil's year-to-date operating earnings of $2,621 million were up
$403 million, or 18 percent, from the comparable period of 1996.
The improvement was due to the favorable impacts of worldwide
volume growth in all sectors of the business and contributions from
newly formed joint ventures, notably the Mobil-BP downstream
alliance in Europe, partly offset by higher expenses in new
business development areas. Industry fundamentals were favorable
overall. Higher integrated downstream margins in the U.S. and
Europe, increased U.S. natural gas prices and improved polyethylene
margins, more than offset lower Asia-Pacific downstream margins and
lower worldwide aromatics margins. Crude oil prices did not
significantly impact earnings in comparison with last year.
Mobil's year-to-date 1997 reported net income, including special
items, was $2,568 million, compared with $2,288 million for the
same period of 1996. This year's income included net special
charges of $53 million while last year's income included $70
million of net special benefits.
Investment Spending for the third quarter of 1997 was estimated at
$1,145 million, a decrease of $393 million from the comparable
period last year. For the first nine months of 1997, investment
spending was estimated at $3,437 million, compared with $5,222
million for nine months of 1996. Last year's spending was higher
reflecting Mobil's acquisition of Ampolex in Australia and
investment in Kazakhstan's Tengiz field.
<PAGE>
Mobil's estimated Return on Average Shareholders' Equity for the
twelve months ended September 30, 1997, based on reported net
income, was 16.8 percent, compared with 16.0 percent for calendar
year 1996. (On an operating basis, excluding special items,
returns were 18.2 percent and 16.7 percent for the same periods.)
Estimated Return on Average Capital Employed for the twelve months
ended September 30, 1997, based on reported net income, was 13.0
percent, compared with 12.7 percent for calendar year 1996. (On an
operating basis, excluding special items, returns were 13.9 percent
and 13.2 percent for the same periods.)
Mobil's estimated Debt-to-Capitalization Ratio was 27 percent at
September 30, 1997, compared with 29 percent at December 31, 1996.
Common Stock Dividends were $0.53 per share in the third quarter of
1997 and $1.59 per share for the first nine months of 1997, $.03 and
$.1275 per share higher than the comparable periods last year. These
per share amounts reflect the two-for-one stock split and prior year
amounts have been restated on a comparable basis.
Estimates of key financial and operating data are shown on the
attached tables.
<TABLE>
Table 1
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
-------------------- --------------------
1996 1997 Incr/ 1996 1997 Incr/
INCOME ($MM) Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 234 160 (74) 556 511 (45)
International 303 313 10 963 1,114 151
------ ------ ------ ------ ------ ------
Total Exploration & Producing 537 473 (64) 1,519 1,625 106
M&R: United States 83 230 147 311 382 71
International 148 116 (32) 512 496 (16)
------ ------ ------ ------ ------ ------
Total Marketing & Refining 231 346 115 823 878 55
------ ------ ------ ------ ------ ------
Total Petroleum 768 819 51 2,342 2,503 161
Chemical 90 155 65 225 331 106
Corporate and Financing (a) (89) (82) 7 (279) (266) 13
------ ------ ------ ------ ------ ------
Net Income 769 892 123 2,288 2,568 280
======= ===== ===== ===== ===== ===== =====
COMMON SHARES OUTSTANDING (MM)
Average (b) 787.9 785.8 (2.1) 788.4 787.0 (1.4)
End of Period (b) ... ... ... 787.9 784.9 (3.0)
EARNINGS PER COMMON SHARE ($)
Based on Net Income (b)(c) 0.96 1.12 0.16 2.85 3.21 0.36
DIVIDENDS
Common Stock
Total Paid ($MM) 394 416 22 1,153 1,251 98
Per Share ($) (b) 0.50 0.53 0.03 1.463 1.59 0.127
Preferred Stock ($MM) 13 13 - 40 39 (1)
(a) Includes the results of Real Estate operations and Mining and Minerals
(substantially all of these businesses were sold in 1996), corporate
administrative expenses, net financing expense and other items.
(b) Shares outstanding and per share amounts reflect the two-for-one stock
split which had a record date of May 20, 1997. Prior year shares and per
share amounts have been restated on a comparable basis.
(c) The earnings per common share calculation is based on income, less
preferred stock divident requirements, divided by the weighted average
number of common shares outstanding.
</TABLE>
<TABLE>
Table 2
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
-------------------- --------------------
INCOME ADJUSTED FOR SPECIAL 1996 1997 Incr/ 1996 1997 Incr/
ITEMS ($MM) Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 152 123 (29) 474 474 -
International 270 317 47 930 1,118 188
------ ------ ------ ------ ------ ------
Total Exploration & Producing 422 440 18 1,404 1,592 188
M&R: United States 83 240 157 311 392 81
International 148 209 61 512 627 115
------ ------ ------ ------ ------ ------
Total Marketing & Refining 231 449 218 823 1,019 196
------ ------ ------ ------ ------ ------
Total Petroleum 653 889 236 2,227 2,611 384
Chemical 90 102 12 225 278 53
Corporate and Financing (a) (75) (84) (9) (234) (268) (34)
------ ------ ------ ------ ------ ------
Operating Income Before
Special Items 668 907 239 2,218 2,621 403
Special Items 101 (15) (116) 70 (53) (123)
------ ------ ------ ------ ------ ------
Net Income 769 892 123 2,288 2,568 280
======= ===== ====== ===== ===== ====== =====
EARNINGS PER COMMON SHARE ($)
BASED ON:
Operating Income Before
Special Items (b) (c) 0.83 1.14 0.31 2.76 3.28 0.52
Net Income (b)(c) 0.96 1.12 0.16 2.85 3.21 0.36
(a) Includes the results of Real Estate operations and Mining and Minerals
substantially all of these businesses were sold in 1996), corporate
administrative expenses, net financing expense and other items.
(b) Per share amounts reflect the two-for-one stock split which had a record
date ofMay 20, 1997. Prior year per share amounts have been restated on a
comparable basis.
(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>
1996 by Quarter and Year 1997
SPECIAL ITEMS ------------------------------- ----- ----- -----
AFFECTING INCOME ($MM) 1Q 2Q 3Q 4Q Year 1Q 2Q 3Q
Act Act Est
----- ----- ----- ----- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C> <C> <C>
E&P United States
Asset Sales - - 82 37 119 - - 53
Asset Impairment - - - (69) (69) - - -
Restructuring - - - (7) (7) - - -
Litigation - - - - - - - (12)
Employee
Performance Award - - - - - - - (4)
E&P International
Asset Sales - - 33 (21) 12 - - -
Restructuring - - - (5) (5) - - -
Employee
Performance Award - - - - - - - (4)
M&R United States
LIFO/Other Inv. Adj. - - - 35 35 - - -
Employee
Performance Award - - - - - - - (10)
M&R International
LIFO/Other Inv. Adj. - - - 8 8 - - -
Restructuring
(Mobil-BP/Europe) - - - (154)(b)(154) (18) (20) (11)
Restructuring (Japan) - - - - - - - (61)
Other - - - (27) (27) - - -
Employee
Performance Award - - - - - - - (21)
Chemical
Asset Sales - - - - - - - 48
Litigation Settlement - - - - - - - 10
Employee
Performance Award - - - - - - - (5)
Corporate and Financing
Asset Sales - - 14 16 30 - - 39
SRP Implementation (a) - (31) (28) (16) (75) - - -
Litigation - - - - - - - (31)
Employee
Performance Award - - - - - - - (6)
----- ----- ----- ----- ----- ----- ----- -----
Total Special Items - (31) 101 (203) (133) (18) (20) (15)
===== ===== ===== ===== ===== ===== ===== =====
(a) Staff Redesign Project (SRP).
(b) Includes $145 million for Mobil/BP alliance.
</TABLE>
<TABLE>
Table 4
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
---------------------- ------------------------
INVESTMENT SPENDING ($MM) 1996 1997 Incr/ 1996 1997 Incr/
Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ --------
<S> <C> <C> <C> <C> <C> <C>
Capital and Exploration Expenditures
Petroleum Operations
Exploration & Producing
United States 95 117(a) 22 367 325(a) (42)
International 2,226(b) 714 (1,512) 3,072(b)1,809 (1,263)
------ ------ ------ ------ ------ --------
Total E&P 2,321 831 (1,490) 3,439 2,134 (1,305)
------ ------ ------ ------ ------ --------
Marketing & Refining
United States 87 72 (15) 261 224 (37)
International 243 107(a) (136) 730 351(a) (379)
------ ------ ------ ------ ------ --------
Total M&R 330 179 (151) 991 575 (416)
------ ------ ------ ------ ------ --------
Total Petroleum 2,651 1,010 (1,641)4,430 2,709 (1,721)
Chemical 92 86 (6) 223 210 (13)
Other 7 7 - 52 38 (14)
------ ------ ------ ------ ------ --------
Total Capital and Exploration 2,750 1,103 (1,647) 4,705 2,957 (1,748)
Cash Investments
in Equity Companies (1,212)(b) 42(a) 1,254 517(b) 480(a) (37)
------ ------ ------ ------ ------ --------
Total Investment Spending 1,538 1,145 (393) 5,222 3,437 (1,785)
===== ===== ===== ===== ===== ====
Memo:
Exploration expenses charged to income, included above
United States 6 12 6 39 28 (11)
International 137 93 (44) 252 234 (18)
------ ------ ------ ------ ------ --------
Total Exploration Expenses 143 105 (38) 291 262 (29)
====== ====== ====== ====== ====== ========
OTHER FINANCIAL DATA ($MM)
Total Revenues 20,326 16,442(a)(3,884)58,546 49,377(a) (9,169)
Depreciation, Depletion, and
Amortization 645 590(a) (55) 1,903 1,848(a) (55)
Income Taxes 836 774 (62) 2,427 2,376 (51)
AVERAGE U.S. PRICES
Crude ($/BBL)(c) 18.80 16.83 (1.97) 17.72 17.29 (0.43)
NGL ($/BBL) 12.81 11.78 (1.03) 12.00 12.27 0.27
Natural Gas ($/MCF) 1.96 2.06 0.10 2.06 2.25 0.19
AVERAGE INT'L. PRICES
Crude ($/BBL) 20.83 17.91 (2.92) 19.71 18.60 (1.11)
Natural Gas ($/MCF) 2.65 2.53 (0.12) 2.54 2.75 0.21
(a) Includes impact of equity accounting for E&P California alliance with
Shell and M&R alliance with BP in Europe.
(b) Reflects a $1,394 million reclassification of spending for the Ampolex
acquisition that was fully consolidated in the third quarter of 1996.
(c) Excludes the impact of West Coast realizations from June 1997 forward
due to implementation of the E&P California alliance with Shell. Prior
year amounts have been restated on the same basis.
</TABLE>
<TABLE>
Table 5
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
---------------------- ----------------------
1996 1997 Incr/ 1996 1997 Incr/
OPERATING HIGHLIGHTS Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
NET PRODUCTION OF LIQUIDS (TBD)
United States 257 246 (11) 268 243 (25)
Australia 48 54 6 35 38 3
Canada 50 49 (1) 52 46 (6)
Equatorial Guinea 7 39 32 2 32 30
Indonesia 60 44 (16) 70 49 (21)
Kazakhstan 23 35 12 12 37 25
Nigeria 213 253 40 203 249 46
Norway 82 75 (7) 83 78 (5)
United Kingdom 61 72 11 62 74 12
Middle East/Other 50 71 21 49 70 21
------ ------ ------ ------ ------ ------
Total International 594 692 98 568 673 105
------ ------ ------ ------ ------ ------
Worldwide 851 938 87 836 916 80
===== ===== ====== ===== ===== =====
NET PRODUCTION OF NATURAL GAS (MMCFD)
United States 1,284 1,124 (160) 1,366 1,156 (210)
Canada 425 376 (49) 423 374 (49)
Germany 455 348 (107) 506 447 (59)
Indonesia 1,429 1,568 139 1,459 1,585 126
United Kingdom 339 515 176 590 659 69
Other 136 285 149 140 299 159
------ ------ ------ ------ ------ ------
Total International 2,784 3,092 308 3,118 3,364 246
------ ------ ------ ------ ------ ------
Worldwide 4,068 4,216 148 4,484 4,520 36
===== ===== ====== ===== ===== =====
TOTAL NET
PRODUCTION (TBDOE) 1,588 1,702 114 1,648 1,735 87
===== ===== ====== ===== ===== =====
</TABLE>
<TABLE>
Table 6
MOBIL CORPORATION
<CAPTION>
Third Quarter Nine Months
-------------------- ---------------------
1996 1997 Incr/ 1996 1997 Incr/
OPERATING HIGHLIGHTS Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
REFINERY RUNS (TBD)
Runs for Mobil by Mobil
United States 926 1,009 83 914 950 36
Europe (a) 336 400 64 324 377 53
Asia-Pacific 724 704 (20) 705 658 (47)
All Other 186 190 4 185 186 1
------ ------ ------ ------ ------ ------
Total 2,172 2,303 131 2,128 2,171 43
Runs for Mobil by Others 8 - (8) 9 - (9)
------ ------ ------ ------ ------ ------
Worldwide Runs for Mobil 2,180 2,303 123 2,137 2,171 34
===== ===== ===== ===== ===== =====
PETROLEUM PRODUCT SALES (TBD)
United States
Automotive Gasoline
Sales to Trade 568 584 16 552 567 15
Supply/Other Sales 270 280 10 219 256 37
------ ------ ------ ------ ------ ------
Total Automotive Sales 838 864 26 771 823 52
Distillates/Jet Fuel 335 338 3 338 359 21
Other 241 265 24 231 242 11
------ ------ ------ ------ ------ ------
Total United States 1,414 1,467 53 1,340 1,424 84
Europe (a) 835 702 (133) 813 698 (115)
Asia-Pacific 789 806 17 786 811 25
All Other 366 458 92 364 401 37
------ ------ ------ ------ ------ ------
Total International 1,990 1,966 (24) 1,963 1,910 (53)
------ ------ ------ ------ ------ ------
Worldwide 3,404 3,433 29 3,303 3,334 31
===== ===== ===== ===== ===== =====
CHEMICAL SALES (MM LBS)
Worldwide Polyethylene Resin 648 722 74 1,962 2,098 136
Worldwide Paraxylene 254 492 238 783 1,175 392
CHEMICAL SALES BY PRODUCT CATEGORY ($MM)
Petrochemicals 469 574 105 1,421 1,625 204
Films Products 196 163 (33) 576 548 (28)
Chemical Products 33 32 (1) 91 100 9
Plastics/Other 5 - (5) 78 - (78)
------ ------ ------ ------ ------ ------
Total 703 769 66 2,166 2,273 107
===== ===== ===== ===== ===== =====
(a) Includes Mobil's share of the Downstream alliance with BP which
commenced in late 1996. Year-to-date sales reflect a restatement of
first and second quarter 1997.
</TABLE>
