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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): April 23, 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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Item 5. Other Events
The Registrant hereby incorporates by reference herein the
information set forth in its News Release dated April 23, 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 April 23,
1997 reporting estimated earnings for the first 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 April 23, 1997
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EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
------- ----------------
99. Mobil Corporation, Electronic
News Release dated
April 23, 1997
Exhibit 99
MOBIL ANNOUNCES ESTIMATED FIRST QUARTER 1997
OPERATING EARNINGS OF $844 MILLION.
Fairfax, VA, April 23, 1997 -- Mobil Corporation today reported
first quarter 1997 operating earnings of $844 million. This is an
increase of $108 million, or 15%, from the $736 million earned in
the same period last year. Operating earnings per common share
were $2.11, compared with $1.83 in the first quarter of 1996.
Including special items, net income for the quarter was $826
million, or $2.06 per common share. This year's first quarter net
income included a special charge of $18 million for restructuring
costs associated with the European downstream alliance with
British Petroleum. There were no special items in last years
first quarter.
In commenting on the comparison of this year's first quarter
operating earnings with the same quarter last year, Mobil Chairman
and CEO Lucio A. Noto said, "This quarter's earnings benefited
from higher worldwide crude oil and natural gas prices. Continued
volume growth initiatives in all segments also contributed to the
improvement. International upstream volumes increased, reflecting
successful development programs in West Africa and last year's
acquisitions of Ampolex and an interest in the Tengiz field in the
Republic of Kazakstan. Natural gas production was also higher in
Germany, primarily to meet new demand in the former East Germany.
Increased downstream product trade sales volumes reflected market
growth initiatives, primarily in the U.S. and Asia-Pacific. In
Chemical, volumes were higher for polyethylene and paraxylene.
"U.S. Marketing & Refining experienced a high concentration of
scheduled refinery turnarounds in the first quarter which
negatively impacted net results by about $65 million. The
scheduled turnarounds are essentially complete for the year and
all refineries are operating normally.
"Savings from our expense initiatives were sufficient to offset
the impacts of inflation and higher purchased energy costs. In
total, operating expenses were up as we incurred higher expenses
for increased volumes and new business development. However,
Mobil's unit operating cost, on a dollar per barrel of oil
equivalent basis, was slightly less than last year's average.
"Implementation of the downstream alliance with British Petroleum
in Europe is ahead of schedule. As of April 1, businesses have
been established in countries representing about 90% of the income
of the overall venture. Benefits from the alliance will grow as
the year progresses."
Mr. Noto concluded, "Worldwide average crude oil and U.S. natural
gas prices declined sharply throughout the quarter. However,
margins in many of the downstream markets where Mobil has a large
presence improved significantly as a result of these price
declines. Notwithstanding these trends, prices and margins are
likely to remain volatile, and Mobil continues to focus on
internal initiatives such as volume growth, expense reduction and
better operating performance to improve earnings."
<PAGE>
The following comments address the operating performance of the
major business segments during the first quarter of 1997 as
compared with the same quarter in 1996 (refer to Table 2):
COMPARISON OF FIRST QUARTER 1997 WITH FIRST QUARTER 1996
- - Exploration & Producing achieved a record high quarter with
operating earnings of $694 million, $182 million higher
than 1996.
In the United States, earnings of $224 million increased
$69 million, primarily due to higher crude oil and natural
gas prices. The benefits from higher prices were partly
offset by the effects of lower production volumes resulting
from asset sales and natural field declines.
International earnings of $470 million were $113 million
higher, as higher prices and volumes were partly offset by
increased expenses for new venture areas.
- - Marketing & Refining operating earnings of $150 million
were $90 million lower than 1996.
Operations in the United States experienced a loss of $42
million in the first quarter versus earnings of $59 million
in 1996. This year's operating loss was primarily due to
the timing of scheduled maintenance at four of Mobil's five
refineries, lower lubricant base stock margins and higher
purchased fuel costs.
International earnings of $192 million were $11 million
higher than 1996. In Europe, earnings improved primarily
due to increased retail fuels margins, mainly in the United
Kingdom, and lower scheduled refinery downtime costs. This
improvement was largely offset by a decline in Asia-Pacific
where weaker refining margins and lower aromatics income in
Singapore more than offset improved marketing margins in
several of our markets.
- - Chemical earnings of $85 million were $15 million above
last year as increased polyethylene volumes and margins,
coupled with higher paraxylene volumes, more than offset
lower paraxylene margins. Paraxylene volumes were up due
to the effects of increased capacity at the Chalmette,
Louisiana, facility.
- - Corporate and Financing expenses of $85 million were
essentially unchanged from last year. The unfavorable
effect of a higher average debt balance on interest expense
was offset by the absence of charges related to our staff
redesign project which were included in last year's
operating results.
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Investment Spending for the first quarter of 1997 was estimated at
$834 million, $211 million lower than the comparable period last
year.
Mobil's estimated Return on Average Shareholders' Equity for the
twelve months ended March 31, 1997, based on net income, was
16.4%, compared with 16.0% for calendar year 1996. (On an
operating basis, excluding special items, returns were 17.2% and
16.7% for the same periods.) Estimated Return on Average Capital
Employed for the twelve months ended March 31, 1997, based on net
income, was 12.8%, compared with 12.7% for calendar year 1996.
(On an operating basis, excluding special items, returns were
13.3% and 13.2% for the same periods.)
Mobil's estimated Debt-to-Capitalization Ratio was 30% at March
31, 1997, and 29% at December 31, 1996.
Common Stock Dividends were $1.06 per share in the first quarter
of 1997, 13 1/2 cents per share higher than first quarter 1996.
<TABLE>
Table 1
MOBIL CORPORATION
<CAPTION>
First Quarter
-----------------------
1996 1997 Incr/
INCOME ($MM) Act Est (Decr)
------ ------- ------
<S> <C> <C> <C>
Petroleum Operations
E&P: United States 155 224 69
International 357 470 113
------ ------- ------
Total Exploration & Producing 512 694 182
M&R: United States 59 (42) (101)
International 181 174 (7)
------ ------- ------
Total Marketing & Refining 240 132 (108)
------ ------- ------
Total Petroleum 752 826 74
Chemical 70 85 15
Corporate and Financing (a) (86) (85) 1
------ ------- ------
Net Income 736 826 90
========== ====== ====== ======
COMMON SHARES OUTSTANDING (MM)
Average 394.5 394.1 (0.4)
End of Period 394.6 394.0 (0.6)
EARNINGS PER COMMON SHARE ($)
Based on Net Income (b) 1.83 2.06 0.23
DIVIDENDS
Common Stock
Total Paid ($MM) 365 418 53
Per Share ($) 0.925 1.06 0.135
Preferred Stock ($MM) 14 13 (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) 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>
First Quarter
-----------------------
INCOME ADJUSTED FOR SPECIAL 1996 1997 Incr/
ITEMS ($MM) Act Est (Decr)
------ ------- ------
<S> <C> <C> <C>
Petroleum Operations
E&P: United States 155 224 69
International 357 470 113
------ ------- ------
Total Exploration & Producing 512 694 182
M&R: United States 59 (42) (101)
International 181 192 11
------ ------- ------
Total Marketing & Refining 240 150 (90)
------ ------- ------
Total Petroleum 752 844 92
Chemical 70 85 15
Corporate and Financing (a) (86) (85) 1
------ ------- ------
Operating Income Before
Special Items 736 844 108
Special Items - (18) (18)
------ ------- ------
Net Income 736 826 90
========== ====== ======= ======
EARNINGS PER COMMON SHARE ($)
BASED ON:
Operating Income Before
Special Items (b) 1.83 2.11 0.28
Net Income (b) 1.83 2.06 0.23
(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) 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
Est
----- ---- ----- ----- --- ------
<S> <C> <C> <C> <C> <C> <C>
E&P United States
Asset Sales/Write-downs - - 82 37 119 -
Asset Impairment - - - (69) (69) -
Restructuring - - - (7) (7) -
E&P International
Asset Sales/Write-downs - - 33 (21) 12 -
Restructuring - - - (5) (5) -
M&R United States
LIFO/Other Inv. Adj. - - - 35 35 -
M&R International
LIFO/Other Inv. Adj. - - - 8 8 -
Restructuring - - - (154)(b) (154) (18)
Other - - - (27) (27) -
Corporate and Financing
Asset Sales - - 14 16 30 -
SRP Implementation (a) - (31) (28) (16) (75) -
----- ---- ----- ----- ---- ------
Total Special Items - (31) 101 (203) (133) (18)
===== ==== ==== ===== ==== ======
(a) Staff redesign project (SRP).
(b) Includes $145 million for Mobil/BP alliance.
</TABLE>
<TABLE>
Table 4
MOBIL CORPORATION
<CAPTION>
First Quarter
-------------------------
INVESTMENT SPENDING ($MM) 1996 1997 Incr/
Act Est (Decr)
------- ------- -------
<S> <C> <C> <C>
Capital and Exploration Expend.
Petroleum Operations
Exploration & Producing
United States 118 72 (46)
International 417 466 49
------- ------- -------
Total E&P 535 538 3
------- ------- -------
Marketing & Refining
United States 75 75 -
International 225 94 (a) (131)
------- ------- -------
Total M&R 300 169 (131)
------- ------- -------
Total Petroleum 835 707 (128)
Chemical 52 54 2
Other 31 11 (20)
------- ------- -------
Total Capital and Exploration
Expenditures 918 772 (146)
Cash Investments in Equity
Companies 127 62 (a) (65)
------- ------- -------
Total Investment Spending 1,045 834 (211)
====== ====== ======
Memo:
Exploration expenses charged
to income, included above
United States 9 5 (4)
International 67 70 3
------- ------- -------
Total Exploration Expenses 76 75 (1)
======= ======= =======
==========================================================
OTHER FINANCIAL DATA ($MM)
Total Revenues 18,694 16,186 (a)(2,508)
Depreciation, Depletion,
and Amortization 655 643 (a) (12)
Income Taxes 786 864 78
AVERAGE U.S. PRICES
Crude ($/BBL) 15.84 18.54 2.70
NGL ($/BBL) 11.11 12.44 1.33
Natural Gas ($/MCF) 2.16 2.75 0.59
AVERAGE INT'L. PRICES
Crude ($/BBL) 18.57 20.92 2.35
Natural Gas ($/MCF) 2.51 3.06 0.55
(a) Includes the impact of equity accounting for the
Mobil/BP alliance in Europe.
</TABLE>
<TABLE>
Table 5
MOBIL CORPORATION
<CAPTION>
First Quarter
----------------------
1996 1997 Incr/
OPERATING HIGHLIGHTS Act Est (Decr)
------ ------ ------
<S> <C> <C> <C>
NET PRODUCTION OF LIQUIDS
(TBD)
United States 269 235 (34)
Australia 23 27 4
Canada 54 45 (9)
Equatorial Guinea - 25 25
Indonesia 81 57 (24)
Kazakstan - 34 34
Nigeria 196 243 47
Norway 85 78 (7)
United Kingdom 67 76 9
Middle East/Other 47 68 21
------ ------ ------
Total International 553 653 100
------ ------ ------
Worldwide 822 888 66
====== ====== ======
NET PRODUCTION OF NATURAL GAS (MMCFD)
United States 1,428 1,208 (220)
Canada 447 371 (76)
Germany 526 594 68
Indonesia 1,656 1,661 5
United Kingdom 909 822 (87)
Other 149 299 150
------ ------ ------
Total International 3,687 3,747 60
------ ------ ------
Worldwide 5,115 4,955 (160)
====== ====== ======
TOTAL NET
PRODUCTION (TBDOE) 1,749 1,786 37
====== ====== ======
</TABLE>
<TABLE>
Table 6
MOBIL CORPORATION
<CAPTION>
First Quarter
---------------------
1996 1997 Incr/
OPERATING HIGHLIGHTS Act Est (Decr)
------ ----- ------
<S> <C> <C> <C>
REFINERY RUNS (TBD)
Runs for Mobil by Mobil
United States 877 860 (17)
Europe (a) 309 352 43
Asia-Pacific 706 695 (11)
All Other 181 184 3
------ ----- ------
Total 2,073 2,091 18
Runs for Mobil by Others 9 5 (4)
------ ----- ------
Worldwide Runs for Mobil 2,082 2,096 14
===== ===== ======
PETROLEUM PRODUCT SALES (TBD)
United States
Automotive Gasoline
Sales to Trade 536 545 9
Supply/Other Sales 166 201 35
------ ----- ------
Total Automotive Sales 702 746 44
Distillates/Jet Fuel 364 408 44
Other 215 204 (11)
------ ----- ------
Total United States 1,281 1,346 77
Europe (a) 821 738 (83)(b)
Asia-Pacific 819 861 42
All Other 379 389 10
------ ----- ------
Total International 2,019 1,988 (31)
------ ----- ------
Worldwide 3,300 3,346 46
====== ===== ======
CHEMICAL SALES (MM LBS)
Worldwide Polyethylene Resin 676 697 21
Worldwide Paraxylene 287 346 59
CHEMICAL SALES BY PRODUCT CATEGORY ($MM)
Petrochemicals 518 526 8
Films Products 183 192 9
Chemical Products 28 34 6
Plastics/Other 39 - (39)
------ ----- ------
Total 768 752 (16)
====== ===== ======
(a) Includes Mobil's pro rata share for the European alliance
with BP.
(b) Unusually high seasonal supply inventory liquidations in
1996.
</TABLE>
