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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 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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<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 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 July 23,
1997 reporting estimated earnings for the second 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 July 23, 1997
<PAGE>
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EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
------- ----------------
99. Mobil Corporation, Electronic
News Release dated
July 23, 1997
Exhibit 99
MOBIL ANNOUNCES ESTIMATED SECOND QUARTER 1997 OPERATING EARNINGS
OF $870 MILLION
Fairfax, VA, July 23, 1997 -- Mobil Corporation today reported
second quarter 1997 operating earnings of $870 million, $56
million higher than last year's second quarter earnings of $814
million. Operating earnings per common share were $1.09, compared
with $1.02 in 1996, an increase of 7 percent. Including a special
charge of $20 million for start-up costs associated with the
Mobil-BP European alliance, net income for the quarter was $850
million, or $1.06 per share. Including a special charge of $31
million for implementation expenses for the Staff Redesign
Project, last year's second quarter net income was $783 million,
or $0.98 per share. These per share amounts reflect the two-for-
one stock split which had a record date of May 20, 1997. Prior
year per share amounts have been restated on a comparable basis.
In commenting on second quarter 1997 operating earnings compared
with the same period in 1996, Chairman and Chief Executive Officer
Lucio A. Noto said, "This quarter's earnings improvement resulted
from volume growth initiatives in all business sectors, strong
operating performance at our U.S. refineries and improved results
in our lubes business. We also started to see benefits from the
Mobil-BP downstream alliance in Europe. These improvements were
partly offset by increased refinery downtime in Asia-Pacific and
somewhat higher expenses related to new business development,
primarily in upstream operations. Overall, business factors were
slightly negative, as the unfavorable effects of lower crude oil
prices, and downstream margins in Asia-Pacific, were largely
offset by higher earnings related to international natural gas
prices, downstream margins in Europe and petrochemical margins.
"Worldwide upstream production increased 7 percent from the second
quarter of 1996 and was up 4 percent over the first six months of
1996. Increased production from growth programs in Nigeria and
Equatorial Guinea, coupled with the effects of last year's
acquisitions of Ampolex and an interest in the Tengiz field in
Kazakstan, more than offset production lost as a result of
substantial asset sales in North America. Downstream product
sales were up by 6 percent versus the second quarter of 1996 in
response to new business development initiatives and marketing
programs, notably in the United States. Petrochemical volumes were
substantially higher reflecting the benefits of recent aromatics
expansions.
"Savings from expense initiatives were sufficient to offset the
impact of inflation. In total, operating expenses were up as we
incurred higher expenses for increased volumes and new business
development."
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
profitable growth."
<PAGE>
The following comments address the operating performance of the
major business segments during the second quarter and first half
of 1997, as compared with the same periods in 1996 (refer to Table 2):
COMPARISON OF SECOND QUARTER 1997 WITH SECOND QUARTER 1996
- - Exploration and Producing income was $458 million, $12
million lower than last year's second quarter.
In the United States, income was $127 million, down $40
million, due to lower hydrocarbon prices and lower production
volumes. The decrease in volumes resulted from asset sales
and natural field declines. These unfavorable items were
somewhat offset by lower exploration and producing expenses.
International income of $331 million was $28 million higher.
The effects of higher volumes from growth areas and higher
prices for natural gas more than offset lower crude oil
prices, higher exploration expenses and higher operating
expenses in new venture areas.
- - Marketing and Refining income of $420 million was $68 million
higher than second quarter 1996.
United States operations generated record quarterly income of
$194 million, $25 million higher than last year, mainly due
to higher fuels and lubes trade sales volumes, excellent
refinery operating performance and lower expenses.
International income of $226 million was $43 million higher
than in 1996, primarily due to the effects of higher fuels
and lubes trade sales volumes, improved fuels margins in
Europe, mainly in the United Kingdom, and the initial
benefits from the Mobil-BP alliance. These improvements were
partially offset by a decline in Asia-Pacific due to lower
margins, decreased aromatics income and increased refinery
turnaround activity in Singapore and Australia.
- - Chemical income of $91 million was $26 million higher than
last year's second quarter. The improvement reflected higher
volumes, notably petrochemicals, and higher margins for
polyethylene resulting from higher prices and lower feedstock
costs.
- - Corporate and Financing expense was $99 million, $26 million
higher than the comparable period last year, mainly due to
higher average net debt balances and one-time favorable items
in last year's second quarter.
<PAGE>
COMPARISON OF SIX MONTHS 1997 WITH SIX MONTHS 1996
Mobil's first half 1997 reported net income was $1,676 million,
compared with $1,519 million for the same period of 1996. This
year's net income included special charges of $38 million for
implementation costs for the Mobil-BP downstream European
alliance. First half 1996 net income included special charges of
$31 million for expenses related to implementation of the Staff
Redesign Project.
Excluding special items, first half operating earnings of $1,714
million were up $164 million, or 11 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
higher worldwide average crude oil, natural gas and polyethylene
prices, and improved European downstream marketing margins. These
favorable items were partly offset by lower U.S. and Asia-Pacific
downstream margins, lower worldwide aromatics margins, a higher
level of refinery downtime and higher expenses for new business
development.
Investment Spending for the second quarter of 1997 was estimated
at $1,453 million, a decrease of $1,192 million from the
comparable period last year. For the first six months of 1997,
investment spending was estimated at $2,287 million, compared with
$3,684 million for six months of 1996. Last year's spending was
higher for investments in Ampolex and Tengiz.
Mobil's estimated Return on Average Shareholders' Equity for the
twelve months ended June 30, 1997, based on reported income, was
16.4 percent, compared with 16.0 percent for calendar year 1996.
(On an operating basis, excluding special items, returns were 17.2
percent and 16.7 percent for the same periods.) Estimated Return
on Average Capital Employed for the twelve months ended June 30,
1997, based on reported income, was 12.4 percent, compared with
12.7 percent for calendar year 1996. (On an operating basis,
excluding special items, returns were 13.0 percent and 13.2
percent for the same periods.)
Mobil's estimated Debt-to-Capitalization Ratio was 30 percent at
June 30, 1997, compared with 29 percent at December 31, 1996.
Common Stock Dividends were $0.53 per share in the second quarter
of 1997 and $1.06 per share for the first half of 1997, $.03 and
$.0975 per share higher than the comparable periods last year.
These per share amounts reflect the two-for-one stock split and
prior year amounts have been restated on a comparable basis.
Estimates of key financial and operating data are shown on the
attached tables.
<TABLE>
Table 1
MOBIL CORPORATION
<CAPTION>
Second Quarter Six Months
-------------------- --------------------
1996 1997 Incr/ 1996 1997 Incr/
INCOME ($MM) Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 167 127 (40) 322 351 29
International 303 331 28 660 801 141
------ ------ ------ ------ ------ ------
Total Exploration &
Producing 470 458 (12) 982 1,152 170
M&R: United States 169 194 25 228 152 (76)
International 183 206 23 364 380 16
------ ------ ------ ------ ------ ------
Total Marketing &
Refining 352 400 48 592 532 (60)
------ ------ ------ ------ ------ ------
Total Petroleum 822 858 36 1,574 1,684 110
Chemical 65 91 26 135 176 41
Corporate and Financing (a) (104) (99) 5 (190) (184) 6
------ ------ ------ ------ ------ ------
Net Income 783 850 67 1,519 1,676 157
======= ====== ====== ====== ====== ====== ======
COMMON SHARES OUTSTANDING (MM)
Average (b) 788.5 787.0 (1.5) 788.7 787.6 (1.1)
End of Period (b) ... ... ... 787.9 787.1 (0.8)
EARNINGS PER COMMON SHARE ($)
Based on Net Income (b)(c) 0.98 1.06 0.08 1.89 2.10 0.21
DIVIDENDS
Common Stock
Total Paid ($MM) 394 417 23 759 835 76
Per Share ($) (b) 0.50 0.53 0.03 0.963 1.06 0.098
Preferred Stock ($MM) 13 13 - 27 26 (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 dividend requirements, divided by the weighted average
number of common shares outstanding.
</TABLE>
<TABLE>
Table 2
MOBIL CORPORATION
<CAPTION>
Second Quarter Six Months
-------------------- --------------------
INCOME ADJUSTED FOR SPECIAL 1996 1997 Incr/ 1996 1997 Incr/
ITEMS ($MM) Act Est (Decr) Act Est (Decr)
------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C>
Petroleum Operations
E&P: United States 167 127 (40) 322 351 29
International 303 331 28 660 801 141
------ ------ ------ ------ ------ ------
Total Exploration & Producing 470 458 (12) 982 1,152 170
M&R: United States 169 194 25 228 152 (76)
International 183 226 43 364 418 54
------ ------ ------ ------ ------ ------
Total Marketing & Refining 352 420 68 592 570 (22)
------ ------ ------ ------ ------ ------
Total Petroleum 822 878 56 1,574 1,722 148
Chemical 65 91 26 135 176 41
Corporate and Financing (a) (73) (99) (26) (159) (184) (25)
------ ------ ------ ------ ------ ------
Operating Income
Before Special Items 814 870 56 1,550 1,714 164
Special Items (31) (20) 11 (31) (38) (7)
------ ------ ------ ------ ------ ------
Net Income 783 850 67 1,519 1,676 157
======= ====== ====== ====== ====== ====== ======
EARNINGS PER COMMON SHARE ($)
BASED ON:
Operating Income Before
Special Items (b)(c) 1.02 1.09 0.07 1.93 2.14 0.21
Net Income (b)(c) 0.98 1.06 0.08 1.89 2.10 0.21
(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 of May 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
Act Est
----- ----- ----- ----- ---- ----- -----
<S> <C> <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) (20)
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) (20)
===== ===== ===== ===== ===== ===== =====
(a) Staff Redesign Project (SRP).
(b) Includes $145 million for Mobil/BP alliance.
</TABLE>
<TABLE>
Table 4
MOBIL CORPORATION
<CAPTION>
Second Quarter Six Months
----------------------- ----------------------
INVESTMENT SPENDING ($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 154 136(a) (18) 272 208(a) (64)
International 435 629 194 846 1,095 249
------ ------ ------ ------ ------ ------
Total E&P 589 765 176 1,118 1,303 185
------ ------ ------ ------ ------ ------
Marketing & Refining
United States 92 77 (15) 174 152 (22)
International 260 150(a) (110) 487 244(a) (243)
------ ------ ------ ------ ------ ------
Total M&R 352 227 (125) 661 396 (265)
------ ------ ------ ------ ------ ------
Total Petrolem 941 992 51 1,779 1,699 (80)
Chemical 79 70 (9) 131 124 (7)
Other 23 20 (3) 45 31 (14)
----- ------ ------ ------ ------ ------
Total Capital
and Exploration 1,043 1,082 39 1,955 1,854 (101)
Cash Investments
in Equity Companies 1,602(b) 371(a) (1,231) 1,729(b) 433(a) (1,296)
----- ----- ------ ----- ------ ------
Total Investment Spending 2,645 1,453 (1,192) 3,684 2,287 (1,397)
===== ===== ====== ===== ===== ======
Memo:
Exploration expenses charged to income, included above
United States 24 11 (13) 33 16 (17)
International 48 71 23 115 141 26
------ ------ ------ ------ ------ ------
Total Exploration Expenses 72 82 10 148 157 9
====== ====== ====== ====== ====== ======
OTHER FINANCIAL DATA ($MM)
Total Revenues 19,520 16,749(a) (2,771) 38,220 32,935(a) (5,285)
Depreciation, Depletion, and Amorrtization
603 615(a) 12 1,258 1,258(a) -
Income Taxes 805 738 (67) 1,591 1,602 11
AVERAGE U.S. PRICES
Crude ($/BBL) 17.12 16.18(c)(0.94) 16.48 17.43(c) 0.95
NGL ($/BBL) 11.54 11.02 (0.52) 11.93 12.10 0.17
Natural Gas ($/MCF) 2.05 1.88 (0.17) 2.11 2.34 0.23
AVERAGE INT'L. PRICES
Crude ($/BBL) 19.50 17.34 (2.16) 19.04 18.99 (0.05)
Natural Gas ($/MCF) 2.50 2.63 0.13 2.51 2.84 0.33
(a) Includes impact of equity accounting for E&P U.S. alliance with Shell
& M&R alliance with BP in Europe.
(b) Includes spending for the Ampolex acquisition that was fully
consolidated in the third quarter of 1996.
(c) Excludes the impact of West Coast realizations for June due to
implementation of the E&P U.S. alliance with Shell.
</TABLE>
<TABLE>
Table 5
MOBIL CORPORATION
<CAPTION>
Second Quarter Six 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 278 248 (30) 274 241 (33)
Australia 36 33 (3) 29 30 1
Canada 52 46 (6) 53 45 (8)
Equatorial Guinea - 31 31 - 28 28
Indonesia 69 47 (22) 75 52 (23)
Kazakstan 12 42 30 6 38 32
Nigeria 201 251 50 198 247 49
Norway 83 82 (1) 83 80 (3)
United Kingdom 58 74 16 62 75 13
Middle East/Other 46 68 22 49 69 20
------ ------ ------ ------ ------ ------
Total International 557 674 117 555 664 109
------ ------ ------ ------ ------ ------
Worldwide 835 922 87 829 905 76
====== ====== ====== ====== ====== ======
NET PRODUCTION OF NATURAL GAS (MMCFD)
United States 1,387 1,136 (251) 1,407 1,172 (235)
Canada 396 375 (21) 421 373 (48)
Germany 537 402 (135) 531 497 (34)
Indonesia 1,291 1,527 236 1,474 1,593 119
United Kingdom 525 644 119 717 733 16
Other 132 311 179 141 306 165
------ ------ ------ ------ ------ ------
Total International 2,881 3,259 378 3,284 3,502 218
------ ------ ------ ------ ------ ------
Worldwide 4,268 4,395 127 4,691 4,674 (17)
====== ====== ====== ====== ====== ======
TOTAL NET
PRODUCTION (TBDOE) 1,608 1,718 110 1,679 1,752 73
====== ====== ====== ====== ====== ======
</TABLE>
<TABLE>
Table 6
MOBIL CORPORATION
<CAPTION>
Second Quarter Six 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 939 978 39 909 919 10
Europe (a) 327 377 50 319 365 46
Asia-Pacific 688 574 (114) 697 634 (63)
All Other 187 188 1 181 186 5
------ ------ ------ ------ ------ ------
Total 2,141 2,117 (24) 2,106 2,104 (2)
Runs for Mobil by Others 9 - (9) 9 - (9)
------ ------ ------ ------ ------ ------
Worldwide Runs for Mobil 2,150 2,117 (33) 2,115 2,104 (11)
====== ====== ====== ====== ====== ======
PETROLEUM PRODUCT SALES (TBD)
United States
Automotive Gasoline
Sales to Trade 552 573 21 544 559 15
Supply/Other Sales 222 288 66 195 245 50
------ ------ ------ ------ ------ ------
Total Automotive Sales 774 861 87 739 804 65
Distillates/Jet Fuel 289 332 43 326 369 43
Other 236 256 20 226 231 5
------ ------ ------ ------ ------ ------
Total United States 1,299 1,449 150 1,291 1,404 113
Europe (a) 779 809 30 800 773 (27)
Asia-Pacific 772 767 (5) 795 814 19
All Other 349 360 11 364 376 12
------ ------ ------ ------ ------ ------
Total International 1,900 1,936 36 1,959 1,963 4
------ ------ ------ ------ ------ ------
Worldwide 3,199 3,385 186 3,250 3,367 117
====== ====== ====== ====== ====== ======
CHEMICAL SALES (MM LBS)
Worldwide Polyethylene Resin 638 679 41 1,314 1,376 62
Worldwide Paraxylene 242 320 78 529 666 137
CHEMICAL SALES BY PRODUCT CATEGORY ($MM)
Petrochemicals 434 525 91 952 1,051 99
Films Products 200 193 (7) 380 385 5
Chemical Products 30 33 3 58 67 9
Plastics/Other 34 - (34) 73 - (73)
------ ------ ------ ------ ------ ------
Total 698 751 53 1,463 1,503 40
====== ====== ====== ====== ====== ======
(a) Includes Mobil's share for the M&R alliance with BP in Europe.
</TABLE>
