Exxon Announces Estimated First Quarter 1999 Results

The following was issued today by Exxon Corporation (NYSE: XON):

First Quarter

1999 1998 Net Income - $ Million 1,020 1,820 Net Income - $ Per Common Share 0.42 0.74 Net Income - $ Per Common Share Assuming Dilution 0.42 0.73 Revenue - $ Million 26,884 29,964 Capital & Exploration Expenditures - $ Million 2,104 2,023 Exxon Corporation today reported first quarter 1999 net income of $1,020 million. Net income for the first quarter of 1999 included a $120 million charge for the restructuring of Japanese operations, while the prior year's quarter included a $70 million charge relating to an accounting change. Excluding non-recurring items, first quarter 1999 net income declined 40% to $1,140 million or $0.47 per share, compared to $1,890 million or $0.76 per share last year. Revenue for the first quarter of 1999 totaled $26,884 million compared to $29,964 million in the first quarter of 1998. Capital and exploration expenditures were $2,104 million compared to $2,023 million in last year's first quarter. Exxon Chairman Lee R. Raymond commented as follows: "Exxon's first quarter net income was $1.0 billion. After excluding non- recurring charges in both years, earnings were down $750 million or 40%. The decline was driven by continued weakness in crude oil prices which on average were about $2.75 per barrel or 20% lower than last year's first quarter. Earnings were also adversely affected by lower natural gas prices, weaker downstream and chemicals margins, and depressed copper and coal prices. "Crude oil prices continued to run at near 20-year lows for most of the quarter, reflecting the worldwide surplus in crude oil supplies. Liquids production was down versus the prior year reflecting natural field declines in some producing areas and steps to curtail marginal volumes in the recent low price environment. The first quarter production levels are consistent with our plan for increased liquids volumes in 1999. Higher gas volumes and reductions in exploration and production expenses partly offset the effects of lower crude and gas prices and liquids volumes. "In the downstream, refining margins and marketing margins were significantly weaker in most geographic areas. Partly offsetting the lower margins were higher petroleum product sales, which achieved the highest first quarter level since 1979. "Chemicals earnings declined 18% from last year as a result of lower margins. Worldwide commodity prices continued at depressed levels due to excess industry capacity and the slowdown in Asian economies. Earnings from other operations increased as lower copper and coal prices were offset by higher production volumes and reduced operating expenses." Additional comments on earnings from the major operating segments follow: First Quarter 1999 vs. First Quarter 1998 Exploration and production earnings were adversely impacted by lower industry crude prices which averaged about $2.75 per barrel less than last year. Average U.S. natural gas prices were down 19% and European gas prices were down 19% versus the first quarter of 1998. Liquids production decreased to 1,564 kbd (thousand barrels per day) compared to 1,624 kbd in the first quarter 1998, primarily due to natural field declines and steps to curtail marginal volumes in the current low price environment. Partly offsetting this was production from new developments in the U.K. North Sea and Azerbaijan. Natural gas production of 7,533 mcfd (million cubic feet per day) was up 324 mcfd from 1998 due to colder European weather. Earnings from U.S. exploration and production were $136 million compared with $227 million last year. Outside the U.S., earnings from exploration and production were $425 million, versus $683 million in the first quarter of 1998. Petroleum product sales of 5,490 kbd increased 2% from last year's first quarter reflecting improvements in all geographic areas. Refining margins and marketing margins were much weaker in most markets. Total downstream results were also adversely affected by higher scheduled refinery maintenance in the U.S. and Europe. In the U.S., refining and marketing results were a loss of $28 million, down $128 million from the prior year. Earnings from refining and marketing operations outside the U.S. were $274 million after excluding the Japanese restructuring charge, compared with $496 million in the first quarter of 1998. Chemicals earnings were $305 million compared with $374 million in the first quarter of last year. Prime product sales of 4,377 kt (thousand metric tons) were 3% higher than the same period last year primarily reflecting stronger demand in Europe. Margins were lower as commodity chemical prices continued at depressed levels and were only partly offset by lower feedstock costs. Earnings from other operations totaled $97 million, up from $89 million in the first quarter of 1998 as higher copper and coal production volumes and lower operating expenses more than offset the impact of lower copper and coal prices. Corporate and financing expenses totaled $69 million compared with $79 million in the first quarter of last year. During the quarter, the company's operating segments continued to benefit from the impact of lower effective tax rates and the favorable resolution of tax related issues. During the first quarter of 1999, Exxon purchased 2.4 million shares of its common stock for the treasury at a cost of $170 million, representing a continuation of purchases to offset shares issued in conjunction with the Company's benefit plans and programs. Purchases are made in open market and negotiated transactions. As a consequence of the proposed merger of Exxon and Mobil, the repurchase program to reduce the number of Exxon shares outstanding was discontinued in December. ots Original Text Service: Exxon Corporation Internet: http://www.newsaktuell.de Contact: Ed Burwell of Exxon Corporation (USA) 972-444-1108 Web site: http://www.exxon.com


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