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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 22, 1998
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 22, 1998, 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 22,
1998 reporting estimated earnings for the first
quarter of 1998.
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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 22, 1998
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EXHIBIT INDEX
EXHIBIT SUBMISSION MEDIA
------- ----------------
99. Mobil Corporation, Electronic
News Release dated
April 22, 1998
Contact: Dave Dickson, +1 (703) 846-2378 or
Tom Cooney, +1 (703) 846-4476
MOBIL ANNOUNCES FIRST QUARTER 1998 OPERATING EARNINGS OF $715 MILLION
<TABLE>
<CAPTION>
First Quarter
1997 1998 Change
<S> <C> <C> <C>
Operating Earnings ($millions) 844 715 (129)
per share ($) 1.05 0.90 (0.15)
assuming dilution ($) 1.03 0.88 (0.15)
Net Income ($millions) 826 705 (121)
per share ($) 1.03 0.88 (0.15)
assuming dilution ($) 1.01 0.86 (0.15)
. Self-help initiatives, including volume growth, expense control
and less refinery downtime, plus higher M&R margins offset much
of the impact of the sharp decline in crude oil prices
. Downstream earnings more than doubled
. Asia-Pacific downstream was a major contributor with earnings up
substantially despite the economic downturn in the region
. Benefits continued to ramp up from Europe downstream alliance
with BP
. E&P volumes up 1 percent despite operating problems in Nigeria
and Australia that have now been resolved
. Dividend increased 7.5 percent on annualized basis
Fairfax, VA, April 22, 1998 - Mobil Corporation today reported first quarter
1998 estimated operating earnings of $715 million. This is a decrease of $129
million, or 15 percent, from the $844 million earned in the same period last
year. Operating earnings per common share, assuming dilution, were $0.88,
compared with $1.03 in the first quarter of 1997. Including special items,
net income for the quarter was $705 million, or $0.86 per common share,
versus $826 million, or $1.01 per share, last year. This
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year's first quarter net income included a $10 million special charge for
on-going implementation costs associated with the BP European alliance,
while last year's first quarter net income included a charge of $18 million
for these implementation costs.
"Crude oil prices weakened considerably in this year's first quarter, averaging
about $7 per barrel below the same quarter last year," said Mobil Chairman and
CEO Lucio A. Noto. "Additionally, natural gas prices in North America were
down substantially as a result of unusually warm winter weather. Despite these
difficult business conditions, Mobil's earnings held up fairly well due to
higher margins in the downstream business and self-help programs (volume
growth, performance improvements and expense control), which contributed about
$100 million in the first quarter.
"In the Upstream, Mobil's production grew by 1 percent, primarily from higher
volumes in Equatorial Guinea and the Hibernia field in Canada. In addition,
production benefited from the streaming of the Gobe development in Papua New
Guinea, the first oil shipped from Turkmenistan and a debottlenecking at the
Tengiz field in Kazakhstan. The increase in production occurred despite a
pipeline break in Nigeria, the Griffin platform in Australia being out of
service and lower natural gas production in the United States and Europe due to
warmer weather. Additionally, production was down in Indonesia and in the
United Kingdom. In the Downstream, trade sales were strong, both in the United
States and in the international area. Chemical reported higher volumes in all
businesses.
"In addition to growth, self help included benefits from the BP downstream
alliance in Europe, reduced refinery downtime in the U.S., refinery upgrading
projects in Singapore, Japan and Australia, as well as restructuring in Japan
and Australia. Asia- Pacific earnings were stronger than they have been for
any quarter since 1995, despite the economic downturn in the region."
Noto concluded, "The recent collapse of crude oil prices and the resulting
benefit to downstream margins, particularly in the international area, are
evidence of the continuing volatility in business conditions which we face.
Due to uncertainty with respect to the pace of economic recovery in Asia and
the outlook for crude oil supplies in the near term, Mobil will continue to
focus on self-help initiatives to sustain and grow earnings."
The following comments address the operating performance of the major business
segments during the first quarter of 1998 as compared with the same quarter in
1997 (refer to Table 2):
COMPARISON OF FIRST QUARTER 1998 WITH FIRST QUARTER 1997
- Exploration & Producing operating earnings of $390 million were
$304 million lower than last year's $694 million, which was a record for
a quarter.
In the United States, earnings of $80 million decreased $144 million,
almost entirely due to the fall in crude oil and natural gas prices.
International earnings of $310 million were $160 million lower, again
reflecting the significant decline in crude oil and natural gas prices.
- Marketing & Refining operating earnings of $325 million were $175
million higher than in 1997.
Operating earnings in the United States were $86 million versus
a loss of $42 million in the first quarter of 1997.
The improvement was due to higher industry margins reflecting
benefits from falling crude oil prices, lower scheduled and
unscheduled refinery downtime, and reduced operating expenses.
Lube earnings were up, primarily due to higher margins.
International earnings of $239 million were $47 million higher than in
1997. In Europe, earnings improved due to increased benefits
from the BP alliance and higher integrated margins. Earnings were
also higher in Asia-Pacific, reflecting relatively strong marketing
margins, higher trade sales and improved refinery performance.
Additionally, benefits were realized from streaming the Altona FCC,
the Japan (Kawasaki) resid upgrader, the Jurong lube hydrocracker and
favorable expense performance.
- Chemical earnings of $67 million were $18 million lower than last
year as a result of lower polyethylene and paraxylene margins.
- Corporate and Financing expenses of $67 million were $18 million
lower than in the first quarter of 1997 primarily due to the timing of
expenses and certain one-time benefits in this year's first quarter.
Estimates of key financial and operating data are shown below and on the
attached tables.
Investment Spending for the first quarter of 1998 was $855 million, $21 million
higher than in the comparable period last year.
Mobil's Return on Average Shareholders' Equity for the twelve months ended March
31, 1998, based on net income, was 16.3 percent, compared with 17.0 percent for
calendar year 1997. (On an operating basis, excluding special items, returns
were 17.1 percent and 17.8 percent for the same periods.) Return on Average
Capital Employed for the twelve months ended March 31, 1998, based on net
income, was 12.5 percent, compared with 13.4 percent for calendar year 1997.
(On an operating basis, excluding special items, returns were 13.1 percent and
14.0 percent for the same periods.)
Mobil's Debt-to-Capitalization Ratio was 27 percent at March 31, 1998, and 25
percent at December 31, 1997.
Common Stock Dividends were increased 7.5 percent in the first quarter of 1998
to $0.57 per common share, up from the prior quarterly rate of $0.53
per share.
</TABLE>
<TABLE>
Table 1
MOBIL CORPORATION
<CAPTION>
First Quarter
-----------------------
1997 1998 Incr/
INCOME ($MM) (Decr)
------ ------- ------
<S> <C> <C> <C>
Petroleum Operations
E&P: United States 224 80 (144)
International 470 310 (160)
------ ------- ------
Total Exploration & Producing 694 390 (304)
M&R: United States (42) 86 128
International 174 229 55
------ ------- ------
Total Marketing & Refining 132 315 183
------ ------- ------
Total Petroleum 826 705 (121)
Chemical 85 67 (18)
Corporate and Financing (a) (85) (67) 18
------ ------- ------
Net Income 826 705 (121)
========== ======= ======== =======
COMMON SHARES OUTSTANDING (MM)
End of Period 788.0 781.9 (6.1)
Average 788.1 782.1 (6.0)
Average -- Assuming Dilution 816.3 810.4 (5.9)
NET INCOME PER COMMON SHARE ($)(b) 1.03 0.88 (0.15)
Assuming Dilution (c) 1.01 0.86 (0.15)
DIVIDENDS
Common Stock
Total Paid ($MM) 418 445 27
Per Share ($) 0.53 0.57 0.04
Preferred Stock ($MM) 13 13 -
(a) Includes 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.
(c) Net income per common share assuming dilution includes the dilutive
effects of stock options and convertible preferred stock.
</TABLE>
<TABLE>
Table 2
MOBIL CORPORATION
<CAPTION>
First Quarter
-----------------------
INCOME ADJUSTED FOR SPECIAL 1997 1998 Incr/
ITEMS ($MM) (Decr)
------ ------- ------
<S> <C> <C> <C>
Petroleum Operations
E&P: United States 224 80 (144)
International 470 310 (160)
------ ------- ------
Total Exploration & Producing 694 390 (304)
M&R: United States (42) 86 128
International 192 239 47
------ ------- ------
Total Marketing & Refining 150 325 175
------ ------- ------
Total Petroleum 844 715 (129)
Chemical 85 67 (18)
Corporate and Financing (a) (85) (67) 18
------ ------- ------
Operating Earnings (Before
Special Items) 844 715 (129)
Special Items (18) (10) 8
------ ------- ------
Net Income 826 705 (121)
========== ====== ======= =======
EARNINGS PER COMMON SHARE ($)
BASED ON:
Operating Earnings (Before 1.05 0.90 (0.15)
Special Items)
Assuming Dilution (c) 1.03 0.88 (0.15)
Net Income (b) 1.03 0.88 (0.15)
Assuming Dilution (c) 1.01 0.86 (0.15)
(a) Includes 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.
(c) Earnings per common share assuming dilution includes the dilutive
effects of stock options and convertible preferred stock.
</TABLE>
<TABLE>
Table 3
MOBIL CORPORATION
<CAPTION>
($MM) 1997 by Quarter and Year 1998
SPECIAL ITEMS ----- ---- ----- ----- ---- ------
AFFECTING INCOME 1Q 2Q 3Q 4Q Year 1Q
----- ---- ----- ----- ---- ------
<S> <C> <C> <C> <C> <C> <C>
E&P United States
Asset Sales - - 53 - 53 -
Litigatio n - - (12) - (12) -
Employee Performance
Award - - (4) - (4) -
E&P International
Asset Sales - - - 41 41 -
Employee Performance
Award - - (4) - (4) -
M&R United States
Asset Impairment - - - (18) (18) -
LIFO/Other Inv. Adj - - 8 8 -
Employee Performance
Award - - (10) - (10) -
M&R International
LIFO/Other Inv. Adj - - - 12 12 -
Restructuring (18) (20) (72) (148) (258) (10)
Employee Performance
Award - - (21) - (21) -
Chemical
Asset Sales - - 48 - 48 -
Litigation - - 10 - 10 -
Employee Performance
Award - - (5) - (5) -
Corporate and Financing
Asset Sales - - 39 - 39 -
Litigation - - (31) - (31) -
Employee Performance
Award - - (6) - (6) -
----- ---- ----- ----- ---- ------
Total Special Items(18) (20) (15) (105) (158) (10)
===== ==== ===== ===== ===== ======
</TABLE>
<TABLE>
Table 4
MOBIL CORPORATION
<CAPTION>
First Quarter
-------------------------
INVESTMENT SPENDING ($MM) 1997 1998 Incr/
(Decr)
------- ------- -------
<S> <C> <C> <C>
Capital and Exploration
Expenditures
Petroleum Operations
Exploration & Producing
United States 72 98 26
International 466 501 35
------- ------- -------
Total E&P 538 599 61
------- ------- -------
Marketing & Refining
United States 75 60 (15)
International 94 43 (51)
------- ------- -------
Total M&R 169 103 (66)
------- ------- -------
Total Petroleum 707 702 (5)
Chemical 54 26 (28)
Other 11 28 17
------- ------- -------
Total Capital and Exploration
Expenditures 772 756 (16)
Cash Investments in Equity
Companies 62 99 37
------- ------- -------
Total Investment Spending 834 855 21
======== ================
Memo:
Exploration expenses charged
to income, included above
United States 5 17 12
International 70 57 (13)
------- ------- -------
Total Exploration Expenses 75 74 (1)
======= ======= =======
==========================================================
OTHER FINANCIAL DATA ($MM)
Total Revenues 16,186 13,630 (2,556)
Depreciation, Depletion,
and Amortization 643 599 (44)
Income Taxes 864 529 (335)
AVERAGE U.S. PRICES
Crude ($/BBL) -- Mobil 19.90 13.26 (6.64)
Crude ($/BBL) -- Mobil+Aera 18.54 11.74 (6.80)
NGL ($/BBL) 12.44 9.71 (2.73)
Natural Gas ($/MCF) 2.75 2.04 (0.71)
AVERAGE INT'L. PRICES
Crude ($/BBL) 21.55 13.44 (8.11)
Natural Gas ($/MCF) 3.06 2.42 (0.64)
</TABLE>
<TABLE>
Table 5
MOBIL CORPORATION
<CAPTION>
First Quarter
----------------------
1997 1998 Incr/
OPERATING HIGHLIGHTS (Decr)
------ ------ ------
<S> <C> <C> <C>
NET PRODUCTION OF LIQUIDS (TBD)
United States 235 240 5
Australia 27 30 3
Canada 45 63 18
Equatorial Guinea 25 46 21
Indonesia 57 44 (13)
Kazakhstan 34 42 8
Nigeria 243 243 -
Norway 78 79 1
United Kingdom 76 65 (11)
Middle East/Other 68 69 1
------ ------ ------
Total International 653 681 28
------ ------ ------
Worldwide 888 921 33
======= ======= ======
NET PRODUCTION OF NATURAL GAS (MMCFD)
United States 1,208 1,123 (85)
Canada 371 430 59
Germany 594 550 (44)
Indonesia 1,661 1,614 (47)
United Kingdom 822 747 (75)
Other 299 365 66
------ ------ ------
Total International 3,747 3,706 (41)
------ ------ ------
Worldwide 4,955 4,829 (126)
======= ======= ======
TOTAL NET
PRODUCTION (TBDOE) 1,786 1,796 10
======= ======= ======
</TABLE>
<TABLE>
Table 6
MOBIL CORPORATION
<CAPTION>
First Quarter
---------------------
1997 1998 Incr/
OPERATING HIGHLIGHTS (Decr)
------ ----- ------
<S> <C> <C> <C>
REFINERY RUNS (TBD)
United States 860 900 40
Europe (a) 352 370 18
Asia-Pacific 695 747 52
All Other 189 179 (10)
------ ------ ------
Worldwide 2,096 2,196 100
===== ===== ======
PETROLEUM PRODUCT SALES (TBD)
(Includes Trade and Supply Sales)
United States
Automotive Gasoline
Sales to Trade 545 561 16
Supply/Other Sales 201 178 (23)
------ ------ ------
Total Automotive Sales 746 739 (7)
Distillates/Jet Fuel 405 379 (26)
Other 207 241 34
------ ------ ------
Total United States 1,358 1,359 1
Europe (a) 690 664 (26)
Asia-Pacific 861 840 (21)
All Other 389 454 65
------ ------ ------
Total International 1,940 1,958 18
------ ------ ------
Worldwide 3,298 3,317 19
====== ====== =======
CHEMICAL SALES (MM LBS)
Worldwide Polyethylene Resin 697 702 5
Worldwide Paraxylene 346 456 110
CHEMICAL SALES BY PRODUCT CATEGORY ($MM)
Petrochemicals 526 472 (54)
Films Products 191 167 (24)
Chemical Products 34 38 4
------ ----- ------
Total 751 677 (74)
======= ====== =======
(a) Includes Mobil's pro rata share for the European alliance with BP.
</TABLE>
