Exxon Mobil Corp 10-Q

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Overview During the third quarter, crude prices remained in the middle of the 10-year historical range (2010-2019), though decreased slightly versus the second quarter, reflecting uncertainty in supply and demand balances. Natural gas prices strengthened during the quarter and moved toward the top half of the 10-year range, supported by summer demand in North America and supply concerns in Europe. Industry refining margins declined versus the second quarter, and moved to the low end of the 10-year range, as record global demand was more than met by additional supply. Chemical margins improved slightly compared to the second quarter due to lower North America feed costs, though remained well below the 10-year range, as industry bottom-of-cycle conditions continued driven by oversupply in Asia. Recent Mergers and Acquisitions On May 3, 2024, ExxonMobil acquired Pioneer Natural Resources Company (Pioneer), an independent oil and gas exploration and production company. See "Note 2. Pioneer Natural Resources Merger" of the Condensed Consolidated Financial Statements for additional information. Selected Earnings Factor Definitions The updated earnings factors introduced in the first quarter 2024 provide additional visibility into drivers of our business results. The company evaluates these factors periodically to determine if any enhancements may provide helpful insights to the market. Listed below are descriptions of the earnings factors: Advantaged Volume Growth. Represents earnings impacts from change in volume/mix from advantaged assets, strategic projects, and high-value products. • Advantaged Assets (Advantaged growth projects). Includes Permian (heritage Permian (1) and Pioneer), Guyana, Brazil, and LNG. • Strategic Projects. Includes (i) the following completed projects: Rotterdam Hydrocracker, Corpus Christi Chemical Complex, Baton Rouge Polypropylene, Beaumont Crude Expansion, Baytown Chemical Expansion, Permian Crude Venture, and the 2022 Baytown advanced recycling facility; and (ii) the following projects still to be completed: Fawley Hydrofiner, China Chemical Complex, Singapore Resid Upgrade, Strathcona Renewable Diesel, Proxxima TM Venture, USGC Reconfiguration, additional advanced recycling projects under evaluation worldwide, and additional projects in plan yet to be publicly announced. • High-Value Products. Includes performance products and lower-emission fuels. Performance products (performance chemicals, performance lubricants) refers to products that provide differentiated performance for multiple applications through enhanced properties versus commodity alternatives and bring significant additional value to customers and end-users. Lower-emission fuels refers to fuels with lower life cycle emissions than conventional transportation fuels for gasoline, diesel and jet transport. Base Volume. Represents all volume/mix factors not included in Advantaged Volume Growth defined above. Structural Cost Savings. Represents after-tax earnings effects of Structural Cost Savings as defined on page 21, including cash operating expenses related to divestments that were previously in the "volume/mix" factor. Expenses. Represents all expenses otherwise not included in other earnings factors. Timing Effects. Represents timing effects that are primarily related to unsettled derivatives (mark-to-market) and other earnings impacts driven by timing differences between the settlement of derivatives and their offsetting physical commodity realizations (due to LIFO inventory accounting). (1) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024. 19 Earnings (loss) excluding Identified Items Earnings (loss) excluding Identified Items (non-GAAP) are earnings (loss) excluding individually significant non-operational events with, typically, an absolute corporate total earnings impact of at least $250 million in a given quarter. The earnings (loss) impact of an Identified Item for an individual segment in a given quarter may be less than $250 million when the item impacts several periods or several segments. Earnings (loss) excluding identified items does include non-operational earnings events or impacts that are generally below the $250 million threshold utilized for Identified Items. Management uses these figures to improve comparability of the underlying business across multiple periods by isolating and removing significant non-operational events from business results. The Corporation believes this view provides investors increased transparency into business results and trends and provides investors with a view of the business as seen through the eyes of management. Earnings (loss) excluding Identified Items is not meant to be viewed in isolation or as a substitute for net income (loss) attributable to ExxonMobil as prepared in accordance with U.S. GAAP. Three Months Ended September 30, 2024 Upstream Energy Products Chemical Products Specialty Products Corporate and Financing Total (millions of dollars) U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Earnings (loss) (U.S. GAAP) 1,686 4,472 517 792 367 526 375 419 (544) 8,610 Identified Items Total Identified Items — — — — — — — — — — Earnings (loss) excluding Identified Items (Non-GAAP) 1,686 4,472 517 792 367 526 375 419 (544) 8,610 Three Months Ended September 30, 2023 Upstream Energy Products Chemical Products Specialty Products Corporate and Financing Total (millions of dollars) U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Earnings (loss) (U.S. GAAP) 1,566 4,559 1,356 1,086 338 (89) 326 293 (365) 9,070 Identified Items Tax-related items — (14) — (33) — — — — — (47) Total Identified Items — (14) — (33) — — — — — (47) Earnings (loss) excluding Identified Items (Non-GAAP) 1,566 4,573 1,356 1,119 338 (89) 326 293 (365) 9,117 Nine Months Ended September 30, 2024 Upstream Energy Products Chemical Products Specialty Products Corporate and Financing Total (millions of dollars) U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Earnings (loss) (U.S. GAAP) 5,170 13,722 1,803 1,828 1,397 1,060 1,226 1,080 (1,216) 26,070 Identified Items Total Identified Items — — — — — — — — — — Earnings (loss) excluding Identified Items (Non-GAAP) 5,170 13,722 1,803 1,828 1,397 1,060 1,226 1,080 (1,216) 26,070 Nine Months Ended September 30, 2023 Upstream Energy Products Chemical Products Specialty Products Corporate and Financing Total (millions of dollars) U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. U.S. Non-U.S. Earnings (loss) (U.S. GAAP) 4,118 13,041 4,794 4,141 1,148 300 1,150 914 (1,226) 28,380 Identified Items Tax-related items — (184) — (45) — — — — — (229) Total Identified Items — (184) — (45) — — — — — (229) Earnings (loss) excluding Identified Items (Non-GAAP) 4,118 13,225 4,794 4,186 1,148 300 1,150 914 (1,226) 28,609 References in this discussion to Corporate earnings (loss) mean net income (loss) attributable to ExxonMobil (U.S. GAAP) from the Condensed Consolidated Statement of Income. Unless otherwise indicated, references to earnings (loss); Upstream, Energy Products, Chemical Products, Specialty Products, and Corporate and Financing earnings (loss); and earnings (loss) per share are ExxonMobil's share after excluding amounts attributable to noncontrolling interests. Due to rounding, numbers presented may not add up precisely to the totals indicated. 20 Structural Cost Savings Structural Cost Savings describes decreases in cash opex excluding energy and production taxes as a result of operational efficiencies, workforce reductions, divestment-related reductions, and other cost-savings measures that are expected to be sustainable compared to 2019 levels. Relative to 2019, estimated cumulative Structural Cost Savings totaled $11.3 billion, which included an additional $1.6 billion in the first nine months of 2024. The total change between periods in expenses below will reflect both Structural Cost Savings and other changes in spend, including market factors, such as inflation and foreign exchange impacts, as well as changes in activity levels and costs associated with new operations, mergers and acquisitions, new business venture development, and early-stage projects. Estimates of cumulative annual structural savings may be revised depending on whether cost reductions realized in prior periods are determined to be sustainable compared to 2019 levels. Structural Cost Savings are stewarded internally to support management's oversight of spending over time. This measure is useful for investors to understand the Corporation's efforts to optimize spending through disciplined expense management. Dollars in billions (unless otherwise noted) Twelve Months Ended December 31, Nine Months Ended September 30, 2019 2023 2023 2024 Components of Operating Costs From ExxonMobil’s Consolidated Statement of Income (U.S. GAAP) Production and manufacturing expenses 36.8 36.9 27.0 28.8 Selling, general and administrative expenses 11.4 9.9 7.3 7.4 Depreciation and depletion (includes impairments) 19.0 20.6 12.9 16.9 Exploration expenses, including dry holes 1.3 0.8 0.6 0.6 Non-service pension and postretirement benefit expense 1.2 0.7 0.5 0.1 Subtotal 69.7 68.9 48.3 53.7 ExxonMobil’s share of equity company expenses (non-GAAP) 9.1 10.5 7.4 7.1 Total Adjusted Operating Costs (non-GAAP) 78.8 79.4 55.7 60.8 Total Adjusted Operating Costs (non-GAAP) 78.8 79.4 55.7 60.8 Less: Depreciation and depletion (includes impairments) 19.0 20.6 12.9 16.9 Non-service pension and postretirement benefit expense 1.2 0.7 0.5 0.1 Other adjustments (includes equity company depreciation and depletion) 3.6 3.7 2.3 2.5 Total Cash Operating Expenses (Cash Opex) (non-GAAP) 55.0 54.4 40.0 41.3 Energy and production taxes (non-GAAP) 11.0 14.9 11.0 10.3 Total Cash Operating Expenses (Cash Opex) excluding Energy and Production Taxes (non-GAAP) 44.0 39.5 29.0 31.0 Change vs 2019 Change vs 2023 Estimated Cumulative vs 2019 Total Cash Operating Expenses (Cash Opex) excluding Energy and Production Taxes (non-GAAP) -4.5 +2.0 Market +3.6 +0.4 Activity/Other +1.6 +3.2 Structural Cost Savings -9.7 -1.6 -11.3 Due to rounding, numbers presented may not add up precisely to the totals indicated. 21 REVIEW OF THIRD QUARTER 2024 RESULTS ExxonMobil’s third quarter 2024 earnings were $8.6 billion, compared to $9.1 billion a year earlier. The decrease in earnings was mainly driven by weaker industry refining margins and higher Upstream depreciation, partially offset by favorable timing effects from derivatives mark-to-market impacts and increased volumes from advantaged Upstream investments in the Permian and Guyana. Capital and exploration expenditures were $7.2 billion, up $1.1 billion from third quarter 2023. Earnings for the first nine months of 2024 were $26.1 billion, compared to $28.4 billion a year earlier. Capital and exploration expenditures were $20.0 billion, up $1.5 billion from the first nine months of 2023. The Corporation distributed $12.3 billion in dividends to shareholders and repurchased $13.8 billion of common stock. UPSTREAM Upstream Financial Results (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings (loss) (U.S. GAAP) United States 1,686 1,566 5,170 4,118 Non-U.S. 4,472 4,559 13,722 13,041 Total 6,158 6,125 18,892 17,159 Identified Items (1) United States — — — — Non-U.S. — (14) — (184) Total — (14) — (184) Earnings (loss) excluding Identified Items (1) (Non-GAAP) United States 1,686 1,566 5,170 4,118 Non-U.S. 4,472 4,573 13,722 13,225 Total 6,158 6,139 18,892 17,343 (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. 22 Upstream Third Quarter Earnings Factor Analysis (millions of dollars) Price – Price impacts decreased earnings by $620 million, driven by a decrease in liquids realizations, partly offset by an increase in natural gas realizations. Advantaged Volume Growth – Higher volumes from advantaged assets increased earnings by $1,070 million, driven by record Permian production, including the Pioneer acquisition and growth in heritage Permian (2) , and higher production in Guyana. . Base Volume – Base volumes increased earnings by $10 million. Structural Cost Savings – Increased earnings by $230 million. Expenses – Higher expenses decreased earnings by $500 million, primarily from depreciation. Other – All other items decreased earnings by $200 million, mainly driven by unfavorable tax impacts. Timing Effects – Less unfavorable timing effects from derivatives mark-to-market impacts increased earnings by $30 million. Identified Items (1) – 3Q 2023 $(14) million loss driven by additional European taxes. (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. (2) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024. 23 Upstream Year-to-Date Earnings Factor Analysis (millions of dollars) Price – Price impacts decreased earnings by $10 million, driven by lower natural gas realizations partially offset by higher liquids realizations. Advantaged Volume Growth – Higher volumes from advantaged assets increased earnings by $2,750 million, driven by record Permian production, including the Pioneer acquisition and growth in heritage Permian (2) , and record production in Guyana. Base Volume – Lower base volumes decreased earnings by $440 million, mainly driven by divestments and government-mandated curtailments. Structural Cost Savings – Increased earnings by $550 million, driven by operational efficiencies and divestments. Expenses – Higher expenses decreased earnings by $1,000 million, primarily from increased depreciation. Other – All other items, mainly unfavorable tax and forex impacts, and Pioneer-related transaction costs, decreased earnings by $530 million. Timing Effects – Less unfavorable timing effects from derivatives mark-to-market impacts increased earnings by $230 million. Identified Items (1) – 2023 $(184) million loss driven by additional European taxes. (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. (2) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024. 24 Upstream Operational Results Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net production of crude oil, natural gas liquids, bitumen and synthetic oil (thousands of barrels daily) United States 1,444 756 1,174 787 Canada/Other Americas 772 655 770 648 Europe 4 4 4 4 Africa 199 229 213 218 Asia 734 713 719 721 Australia/Oceania 34 40 31 37 Worldwide 3,187 2,397 2,911 2,415 Net natural gas production available for sale (millions of cubic feet daily) United States 3,140 2,271 2,762 2,328 Canada/Other Americas 103 94 103 96 Europe 350 368 353 429 Africa 140 129 152 116 Asia 3,347 3,528 3,369 3,491 Australia/Oceania 1,289 1,358 1,254 1,303 Worldwide 8,369 7,748 7,993 7,763 Oil-equivalent production (1) (thousands of oil-equivalent barrels daily) 4,582 3,688 4,243 3,709 (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. 25 Upstream Additional Information (thousands of barrels daily) Three Months Ended September 30 Nine Months Ended September 30 Volumes reconciliation (Oil-equivalent production) (1) 2023 3,688 3,709 Entitlements - Net Interest (20) (7) Entitlements - Price / Spend / Other 2 (13) Government Mandates 14 8 Divestments (55) (57) Growth / Other 952 603 2024 4,582 4,243 (1) Natural gas is converted to an oil-equivalent basis at six million cubic feet per one thousand barrels. Due to rounding, numbers presented may not add up precisely to the totals indicated. 3Q 2024 versus 3Q 2023 3Q 2024 production of 4.6 million oil-equivalent barrels per day increased 894 thousand oil-equivalent barrels per day from 3Q 2023, driven by record Permian production, including the Pioneer acquisition and growth in heritage Permian (2) , and higher production in Guyana. YTD 2024 versus YTD 2023 4.2 million oil-equivalent barrels per day in 2024 increased 534 thousand oil-equivalent barrels per day from 2023, driven by record Permian production, including the Pioneer acquisition and growth in heritage Permian (2) , and record production in Guyana. (2) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024. Listed below are descriptions of ExxonMobil’s volumes reconciliation factors which are provided to facilitate understanding of the terms. Entitlements - Net Interest are changes to ExxonMobil’s share of production volumes caused by non-operational changes to volume-determining factors. These factors consist of net interest changes specified in Production Sharing Contracts (PSCs), which typically occur when cumulative investment returns or production volumes achieve defined thresholds, changes in equity upon achieving pay-out in partner investment carry situations, equity redeterminations as specified in venture agreements, or as a result of the termination or expiry of a concession. Once a net interest change has occurred, it typically will not be reversed by subsequent events, such as lower crude oil prices. Entitlements - Price, Spend and Other are changes to ExxonMobil’s share of production volumes resulting from temporary changes to non-operational volume-determining factors. These factors include changes in oil and gas prices or spending levels from one period to another. According to the terms of contractual arrangements or government royalty regimes, price or spending variability can increase or decrease royalty burdens and/or volumes attributable to ExxonMobil. For example, at higher prices, fewer barrels are required for ExxonMobil to recover its costs. These effects generally vary from period to period with field spending patterns or market prices for oil and natural gas. Such factors can also include other temporary changes in net interest as dictated by specific provisions in production agreements. Government Mandates are changes to ExxonMobil's sustainable production levels as a result of production limits or sanctions imposed by governments. Divestments are reductions in ExxonMobil’s production arising from commercial arrangements to fully or partially reduce equity in a field or asset in exchange for financial or other economic consideration. Growth and Other comprise all other operational and non-operational factors not covered by the above definitions that may affect volumes attributable to ExxonMobil. Such factors include, but are not limited to, production enhancements from project and work program activities, acquisitions including additions from asset exchanges, downtime, market demand, natural field decline, and any fiscal or commercial terms that do not affect entitlements. 26 ENERGY PRODUCTS Energy Products Financial Results (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings (loss) (U.S. GAAP) United States 517 1,356 1,803 4,794 Non-U.S. 792 1,086 1,828 4,141 Total 1,309 2,442 3,631 8,935 Identified Items (1) United States — — — — Non-U.S. — (33) — (45) Total — (33) — (45) Earnings (loss) excluding Identified Items (1) (Non-GAAP) United States 517 1,356 1,803 4,794 Non-U.S. 792 1,119 1,828 4,186 Total 1,309 2,475 3,631 8,980 Due to rounding, numbers presented may not add up precisely to the totals indicated. Energy Products Third Quarter Earnings Factor Analysis (millions of dollars) Margin – Margins decreased earnings by $2,400 million, driven by weaker industry refining margins. Advantaged Volume Growth – Higher volumes from strategic projects increased earnings by $20 million. Base Volume – Lower base volumes decreased earnings by $200 million, driven by divestments and the Joliet refinery weather event. Structural Cost Savings – Increased earnings by $100 million. Expenses – Higher expenses decreased earnings by $100 million. Other – All other items increased earnings by $70 million. Timing Effects – Favorable timing effects from derivatives mark-to-market impacts increased earnings by $1,340 million. Identified Items (1) – 3Q 2023 $(33) million loss related to European taxes. (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. 27 Energy Products Year-to-Date Earnings Factor Analysis (millions of dollars) Margins – Margins decreased earnings by $5,150 million, driven by significantly weaker industry refining margins, down from the historically high levels in 2023. Advantaged Volume Growth – Higher volumes from the Beaumont refinery expansion increased earnings by $140 million. Base Volume – Lower base volumes from divestments and higher scheduled maintenance decreased earnings by $990 million. Structural Cost Savings – Increased earnings by $440 million due primarily to divestments and maintenance related efficiencies. Expenses – Higher expenses decreased earnings by $630 million, driven by higher planned maintenance activity. Other – All other items increased earnings by $70 million. Timing Effects – Favorable timing effects from derivatives mark-to-market impacts, increased earnings by $770 million. Identified Items (1) – 2023 $(45) million loss from additional European taxes. (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. 28 Energy Products Operational Results (thousands of barrels daily) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Refinery throughput United States 1,855 1,868 1,834 1,819 Canada 389 415 395 407 Europe 1,135 1,251 1,026 1,217 Asia Pacific 449 517 432 515 Other 157 164 169 171 Worldwide 3,985 4,215 3,856 4,129 Energy Products sales (1) United States 2,822 2,626 2,680 2,610 Non-U.S. 2,758 2,925 2,699 2,887 Worldwide 5,580 5,551 5,378 5,496 Gasoline, naphthas 2,281 2,316 2,234 2,299 Heating oils, kerosene, diesel 1,796 1,834 1,752 1,815 Aviation fuels 366 358 350 338 Heavy fuels 199 229 198 224 Other energy products 938 814 844 820 (1) Data reported net of purchases/sales contracts with the same counterparty. Due to rounding, numbers presented may not add up precisely to the totals indicated. 29 CHEMICAL PRODUCTS Chemical Products Financial Results (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings (loss) (U.S. GAAP) United States 367 338 1,397 1,148 Non-U.S. 526 (89) 1,060 300 Total 893 249 2,457 1,448 Identified Items (1) United States — — — — Non-U.S. — — — — Total — — — — Earnings (loss) excluding Identified Items (1) (Non-GAAP) United States 367 338 1,397 1,148 Non-U.S. 526 (89) 1,060 300 Total 893 249 2,457 1,448 (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. Chemical Products Third Quarter Earnings Factor Analysis (millions of dollars) Margin – Improved margins increased earnings by $770 million. Advantaged Volume Growth – High-value product sales growth increased earnings by $70 million. Base Volume – Lower base volumes from maintenance and product sales mix decreased earnings by $190 million. Structural Cost Savings – Increased earnings by $30 million. Expenses – Higher project spend and maintenance costs decreased earnings by $60 million. Other – All other items increased earnings by $20 million. 30 Chemical Products Year-to-Date Earnings Factor Analysis (millions of dollars) Margins – Improved North American feed advantage and higher performance product margins increased earnings by $930 million. Advantaged Volume Growth – Growth in high-value product sales increased earnings by $330 million. Base Volume – Mix upgrade strategy resulted in less base volumes which decreased earnings by $120 million. Structural Cost Savings – Increased earnings by $100 million, primarily from operational efficiencies. Expenses – Higher spend on planned maintenance and strategic growth projects that start-up in 2025, decreased earnings by $230 million. Chemical Products Operational Results (thousands of metric tons) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Chemical Products sales (1) United States 1,707 1,750 5,356 5,036 Non-U.S. 3,123 3,358 9,401 9,570 Worldwide 4,830 5,108 14,757 14,606 (1) Data reported net of purchases/sales contracts with the same counterparty. 31 SPECIALTY PRODUCTS Specialty Products Financial Results (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings (loss) (U.S. GAAP) United States 375 326 1,226 1,150 Non-U.S. 419 293 1,080 914 Total 794 619 2,306 2,064 Earnings (loss) excluding Identified Items (1) (Non-GAAP) United States 375 326 1,226 1,150 Non-U.S. 419 293 1,080 914 Total 794 619 2,306 2,064 (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. Specialty Products Third Quarter Earnings Factor Analysis (millions of dollars) Margin – Stronger basestocks and finished lubes margins increased earnings by $260 million. Advantaged Volume – High-value products volume growth increased earnings by $20 million. Base Volume – Base volumes were flat. Structural Cost Savings – Increased earnings by $20 million. Expenses – Higher expenses decreased earnings by $60 million. Other – All other items decreased earnings by $70 million. 32 Specialty Products Year-to-Date Earnings Factor Analysis (millions of dollars) Margins – Stronger finished lubes margins and industry basestocks margins, increased earnings by $350 million. Advantaged Volume Growth – Additional high-value product sales increased earnings by $50 million. Base Volume – Increased earnings by $40 million. Structural Cost Savings – Increased earnings by $80 million. Expenses – Higher expenses including marketing activities and new business development, decreased earnings by $150 million. Other – All other items, primarily unfavorable foreign exchange impacts, decreased earnings by $130 million. Specialty Products Operational Results (thousands of metric tons) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Specialty Products sales (1) United States 488 498 1,489 1,489 Non-U.S. 1,471 1,414 4,363 4,268 Worldwide 1,959 1,912 5,852 5,758 (1) Data reported net of purchases/sales contracts with the same counterparty. Due to rounding, numbers presented may not add up precisely to the totals indicated. 33 CORPORATE AND FINANCING Corporate and Financing Financial Results (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Earnings (loss) (U.S. GAAP) (544) (365) (1,216) (1,226) Earnings (loss) excluding Identified Items (1) (Non-GAAP) (544) (365) (1,216) (1,226) (1) Refer to page 20 for definition of Identified Items and earnings (loss) excluding Identified Items. Corporate and Financing expenses were $544 million for the third quarter of 2024, $179 million higher than the third quarter of 2023, mainly due to higher financing costs. Corporate and Financing expenses were $1,216 million for the first nine months of 2024, $10 million lower than 2023. 34 LIQUIDITY AND CAPITAL RESOURCES (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Net cash provided by/(used in) Operating activities 42,793 41,687 Investing activities (15,686) (13,560) Financing activities (31,646) (24,742) Effect of exchange rate changes (57) (77) Increase/(decrease) in cash and cash equivalents (4,596) 3,308 Cash and cash equivalents (at end of period) 26,972 32,973 Cash flow from operations and asset sales Net cash provided by operating activities (U.S. GAAP) 17,569 15,963 42,793 41,687 Proceeds associated with sales of subsidiaries, property, plant & equipment, and sales and returns of investments 127 917 1,756 3,058 Cash flow from operations and asset sales (Non-GAAP) 17,696 16,880 44,549 44,745 Because of the ongoing nature of our asset management and divestment program, we believe it is useful for investors to consider proceeds associated with asset sales together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including shareholder distributions. Cash flow from operations and asset sales in the third quarter of 2024 was $17.7 billion, an increase of $0.8 billion from the comparable 2023 period primarily due to favorable working capital. Cash provided by operating activities totaled $42.8 billion for the first nine months of 2024, $1.1 billion higher than 2023. Net income including noncontrolling interests was $27.1 billion, a decrease of $2.2 billion from the prior year period. The adjustment for the noncash provision of $16.9 billion for depreciation and depletion was up $4.0 billion from 2023. Changes in operational working capital were a reduction of $0.3 billion during the period. All other items net decreased cash flows by $0.9 billion in 2024 versus a contribution of $1.5 billion in 2023. See the Condensed Consolidated Statement of Cash Flows for additional details. Investing activities for the first nine months of 2024 used net cash of $15.7 billion, an increase of $2.1 billion compared to the prior year. Spending for additions to property, plant and equipment of $17.5 billion was $1.8 billion higher than 2023. Proceeds from asset sales were $1.8 billion, a decrease of $1.3 billion compared to the prior year. Net investments and advances decreased $0.2 billion from $0.9 billion in 2023. Cash acquired from mergers and acquisitions during the first nine months of 2024 was $0.8 billion. Net cash used in financing activities was $31.6 billion in the first nine months of 2024, including $13.8 billion for the purchase of 119.8 million shares of ExxonMobil stock, as part of the previously announced buyback program, and $1.3 billion to repay Pioneer convertible debt. This compares to net cash used in financing activities of $24.7 billion in the prior year. Total debt at the end of the third quarter of 2024 was $42.6 billion compared to $41.6 billion at year-end 2023. The Corporation's debt to total capital ratio was 13.3 percent at the end of the third quarter of 2024 compared to 16.4 percent at year-end 2023. The net debt to capital ratio (1) was 5.4 percent at the end of the third quarter, an increase of 0.9 percentage points from year-end 2023. The Corporation's capital allocation priorities are investing in competitively advantaged, high-return projects; maintaining a strong balance sheet; and sharing our success with our shareholders through more consistent share repurchases and a growing dividend. The Corporation distributed a total of $12.3 billion to shareholders in the first nine months of 2024 through dividends. The Corporation has access to significant capacity of long-term and short-term liquidity. Internally generated funds are expected to cover the majority of financial requirements, supplemented by long-term and short-term debt. The Corporation had undrawn short-term committed lines of credit of $0.2 billion and undrawn long-term committed lines of credit of $1.6 billion as of the end of third quarter 2024. The Corporation, as part of its ongoing asset management program, continues to evaluate its mix of assets for potential upgrade. Because of the ongoing nature of this program, dispositions will continue to be made from time to time which will result in either gains or losses. Additionally, the Corporation continues to evaluate opportunities to enhance its business portfolio through acquisitions of assets or companies, and enters into such transactions from time to time. Key criteria for evaluating acquisitions include strategic fit, cost synergies, potential for future growth, low cost of supply, and attractive valuations. Acquisitions may be made with cash, shares of the Corporation’s common stock, or both. Litigation and other contingencies are discussed in Note 3 to the unaudited condensed consolidated financial statements. (1) Net debt is total debt of $42.6 billion less $26.9 billion of cash and cash equivalents excluding restricted cash . Net debt to capital ratio is net debt divided by net debt plus total equity of $276.4 billion. Total debt is the sum of notes and loans payable and long-term debt, as reported in the consolidated balance sheet. 35 Contractual Obligations The Corporation and its affiliates have numerous long-term sales and purchase commitments in their various business activities, all of which are expected to be fulfilled with no adverse consequences material to the Corporation’s operations or financial condition. Through the third quarter of 2024, the Corporation entered into two long-term purchase agreements with an estimated total obligation of approximately $3.0 billion. The Corporation assumed take-or-pay obligations of $4.9 billion associated with the Pioneer acquisition that include long-term purchase, gathering, processing, and transportation commitments. TAXES (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Income taxes 4,055 4,353 11,952 12,816 Effective income tax rate 35 % 34 % 35 % 34 % Total other taxes and duties (1) 7,609 8,460 22,300 24,883 Total 11,664 12,813 34,252 37,699 (1) Includes “Other taxes and duties” plus taxes that are included in “Production and manufacturing expenses” and “Selli ng, general and administrative expenses”. Total taxes were $11.7 billion for the third quarter of 2024, a decrease of $1.1 billion from 2023. Income tax expense was $4.1 billion compared to $4.4 billion in the prior year. The effective income tax rate, which is calculated based on consolidated company income taxes and ExxonMobil's share of equity company income taxes, was 35 percent. This increased from the 34 percent rate in the prior year period due primarily to a change in mix of results in jurisdictions with varying tax rates. Total other taxes and duties decreased by $0.9 billion to $7.6 billion. Total taxes were $34.3 billion for the first nine months of 2024, a decrease of $3.4 billion from 2023. Income tax expense decreased by $0.9 billion to $12.0 billion reflecting lower commodity prices. T he effective income tax rate of 35 percent was up compared to the prior year period due primarily to a change in mix of results in jurisdictions with varying tax rates. Total other taxes and duties decreased by $2.6 billion to $22.3 billion. CAPITAL AND EXPLORATION EXPENDITURES (millions of dollars) Three Months Ended September 30, Nine Months Ended September 30, 2024 2023 2024 2023 Upstream (including exploration expenses) 5,748 4,801 16,077 13,991 Energy Products 581 647 1,660 2,063 Chemical Products 525 371 1,460 1,861 Specialty Products 93 111 263 305 Other 212 92 577 348 Total 7,159 6,022 20,037 18,568 Capital and exploration expenditures in the third quarter of 2024 were $7.2 billion, up $1.1 billion from the third quarter of 2023. Capital and exploration expenditures in the first nine months of 2024 were $20.0 billion, up $1.5 billion from the first nine months of 2023. The Corporation anticipates an investment level of approximately $28 billion in 2024. Actual spending could vary depending on the progress of individual projects and property acquisitions. 36 FORWARD-LOOKING STATEMENTS Statements related to future events; projections; descriptions of strategic, operating, and financial plans and objectives; statements of future ambitions and plans; and other statements of future events or conditions, are forward-looking statements. Similarly, discussion of future plans related to carbon capture, transportation and storage, biofuel, hydrogen, ammonia, lithium, direct air capture, and other future low carbon business plans to reduce emissions and emission intensity of ExxonMobil, its affiliates, and third parties, are dependent on future market factors, such as continued technological progress, policy support and timely rule-making and permitting, and represent forward-looking statements. Actual future results, including financial and operating performance; potential earnings, cash flow, dividends or shareholder returns, including the timing and amounts of share repurchases; total capital expenditures and mix, including allocations of capital to low carbon investments; realization and maintenance of structural cost reductions and efficiency gains, including the ability to offset inflationary pressure; plans to reduce future emissions and emissions intensity, including ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050, to reach Scope 1 and 2 net zero in heritage Upstream Permian Basin (1) unconventional operated assets by 2030 and in Pioneer assets by 2035, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, and to reach near-zero methane emissions from operated assets and other methane initiatives; meeting ExxonMobil’s emission reduction ambitions and plans, divestment and start-up plans, and associated project plans as well as technology advances, including the timing and outcome of projects to capture, transport and store CO2, produce hydrogen and ammonia, produce biofuels, produce lithium, create new advanced carbon materials, and use plastic waste as a feedstock for advanced recycling; future debt levels and credit ratings; business and project plans, timing, costs, capacities and profitability; resource recoveries and production rates; and planned Denbury and Pioneer integrated benefits could differ materially due to a number of factors. These include global or regional changes in the supply and demand for oil, natural gas, petrochemicals, and feedstocks and other market factors, economic conditions, and seasonal fluctuations that impact prices and differentials for our products; changes in law, regulations, taxes, trade sanctions, policies or timely granting of governmental permits and certifications, such as the development or changes in government policies supporting lower carbon and new market investment opportunities such as the U.S. Inflation Reduction Act and the ability for projects to qualify for the financial incentives available thereunder, the punitive European taxes on the oil and gas sector and unequal support for different technological methods of emissions reduction or evolving, ambiguous and unharmonized standards imposed by various jurisdictions related to sustainability and GHG reporting; variable impacts of trading activities on our margins and results each quarter; actions of competitors and commercial counterparties; the outcome of commercial negotiations, including final agreed terms and conditions; the ability to access debt markets on favorable terms or at all; the occurrence, pace, rate of recovery and effects of public health crises, including effects of government responses on people and economies; adoption of regulatory incentives consistent with law, such as the Inflation Reduction Act; reservoir performance, including variability and timing factors applicable to unconventional resources and the success of new unconventional technologies; the level and outcome of exploration projects and decisions to invest in future reserves; timely completion of development and other construction projects; final management approval of future projects and any changes in the scope, terms, costs or assumptions of such projects as approved; the actions of government or other actors against our core business activities and acquisitions, divestitures or financing opportunities; war, civil unrest, attacks against the company or industry, and other geopolitical or security disturbances, including disruption of land or sea transportation routes; expropriations, seizure, or capacity, insurance, shipping or export limitations imposed by governments or laws; changes in market strategy by national oil companies; opportunities for potential acquisitions, investments or divestments and satisfaction of applicable conditions to closing, including timely regulatory approvals; the capture of efficiencies within and between business lines and the ability to maintain near-term cost reductions as ongoing efficiencies; unforeseen technical or operating difficulties and unplanned maintenance; the development and competitiveness of alternative energy and emission reduction technologies; the results of research programs and the ability to bring new technologies to commercial scale on a cost-competitive basis; and other factors discussed under "Item 1A. Risk Factors" of ExxonMobil’s 2023 Form 10-K. Forward-looking and other statements regarding environmental and other sustainability efforts and aspirations are not an indication that these statements are material to investors or require disclosure in our filing with the SEC. In addition, historical, current, and forward-looking environmental and other sustainability-related statements may be based on standards for measuring progress that are still developing, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future, including future rule-making. 37 Actions needed to advance ExxonMobil’s 2030 greenhouse gas emission-reductions plans are incorporated into its medium-term business plans, which are updated annually. The reference case for planning beyond 2030 is based on ExxonMobil’s Global Outlook (Outlook) research and publication. The Outlook is reflective of the existing global policy environment and an assumption of increasing policy stringency and technology improvement to 2050. Current trends for policy stringency and development of lower-emission solutions are not yet on a pathway to achieve net-zero by 2050. As such, the Outlook does not project the degree of required future policy and technology advancement and deployment for the world, or ExxonMobil, to meet net zero by 2050. As future policies and technology advancements emerge, they will be incorporated into the Outlook, and ExxonMobil’s business plans will be updated accordingly. References to projects or opportunities may not reflect investment decisions made by ExxonMobil or its affiliates. Individual projects or opportunities may advance based on a number of factors, including availability of supportive policy, permitting, technological advancement for cost-effective abatement, insights from the company planning process, and alignment with our partners and other stakeholders. Capital investment guidance in lower-emission investments is based on our corporate plan; however, actual investment levels will be subject to the availability of the opportunity set, public policy support, and focused on returns. The term “project” as used in this report can refer to a variety of different activities and does not necessarily have the same meaning as in any government payment transparency reports. (1) Heritage Permian basin assets exclude assets acquired as part of the acquisition of Pioneer that closed May 3, 2024. 38