Exxon Announces Estimated Second Quarter 1999 Results

IRVING, Texas (PROTEXT) - The following was issued today byExxon Corporation (NYSE: XON):

Second Quarter

FirstHalf

1999

1998

19991998 Net Income - $ Million

1,205 1,620

2,2253,440 Net Income - $ Per Common Share

0.50

0.66

0.921.40 Net Income - $ Per Common Share

Assuming Dilution

0.49

0.65

0.911.38 Revenue - $ Million

29,422 29,365

56,30659,329 Capital & Exploration Expenditures - $ Million

2,516 2,503

4,6204,526 Exxon Corporation today reported second quarter 1999 netincome of $1,205 million, down from $1,620 million in the secondquarter of 1998. On a per share basis, second quarter 1999 netincome declined 25% to $0.49. Revenue for the second quarter of 1999 totaled $29,422 millioncompared to $29,365 million in the second quarter of 1998.Capital and exploration expenditures were $2,516 million in thesecond quarter 1999 compared to $2,503 million in last year'ssecond quarter. Exxon Chairman Lee R. Raymond commented as follows: "Exxon's net income of $1.2 billion was down $415 million fromthe second quarter of 1998. Depressed refining margins and weakernatural gas prices drove the decline in earnings. Weaker chemicalmargins, lower copper and coal prices, and unfavorable foreignexchange effects also lowered earnings. This year's secondquarter results benefited from higher crude oil prices, increasedchemical sales volumes and reduced operating expenses in allsegments. "Although second quarter results declined, Exxon's absolutelevel of net income has remained healthy over the last two yearsdespite very weak industry conditions. With the improvement inoil prices, second quarter net income increased 18% from thefirst quarter of 1999, in contrast to the seasonal earningsdecline that we usually see from the first to the second quarterof each year. "Second quarter crude oil prices recovered over $4 per barrelfrom the 20-year lows experienced in the first quarter and wereup about $2 per barrel from the second quarter of last year.Natural gas prices were lower in the U.S. and were much lower inEurope reflecting the impact and lag of declining petroleumproduct reference prices and weaker local currencies. Overall,gas prices outside of North America were 16% lower than the prioryear and were at their lowest level in over a decade. Liquidsproduction declined from the second quarter of 1998. "As crude prices increased, downstream earnings decreasedsubstantially versus the same period last year reflecting theinability to raise product prices as rapidly as crude pricesincreased. Refining margins in all major markets were depressedand international downstream earnings were also adverselyaffected by weaker marketing margins and a stronger U.S. dollar. "Chemicals earnings were down slightly, as lower prices andhigher feedstock costs depressed commodity margins. Chemicalsearnings benefited from record second quarter sales volumes andlower operating expenses. Earnings from other operations weredown slightly as lower copper and coal prices were largely offsetby reduced operating expenses. "During the quarter, Exxon continued its active investmentprogram, spending $2.5 billion on capital and explorationprojects." Additional comments follow comparing earnings from majoroperating segments with the second quarter of last year: Second Quarter 1999 vs. Second Quarter 1998 Exploration and production earnings benefited from risingcrude oil prices, averaging about $2 per barrel more than thesecond quarter of 1998. Natural gas prices were lower in the U.S.and were much lower in Europe. Exploration and producing expenseswere reduced versus the prior year. Liquids production decreased to 1,512 kbd (thousand barrelsper day) compared to 1,609 kbd in the second quarter of 1998,primarily due to natural field declines and lower liftings inAlaska. The decline was partly offset by production from newdevelopments in the North Sea and Azerbaijan. Natural gasproduction of 5,542 mcfd (million cubic feet per day) wasessentially unchanged from the prior year. Earnings from U.S. exploration and production were $269million compared with $187 million last year. Outside the U.S.,earnings from exploration and production were $500 million,versus $497 million in the second quarter of 1998. Petroleum product sales of 5,406 kbd were essentially evenwith last year's record second quarter. Downstream earningsdeclined due to a significant drop in worldwide refining margins.Downstream earnings outside the U.S. were also adversely affectedby higher scheduled maintenance, lower marketing margins andunfavorable foreign exchange effects. In the U.S., refining and marketing earnings were $124million, down $102 million from the prior year. Refining andmarketing operations outside the U.S. earned $34 million, adecrease of $378 million from 1998. Chemicals earnings were $274 million compared with $295million in the same quarter a year ago. Margins were compressedby lower commodity prices and higher feedstock costs. Primeproduct sales volumes of 4,455 kt (thousand metric tons)established a quarterly record. Earnings from other operations, including coal, minerals andpower, totaled $85 million, compared to $103 million in thesecond quarter 1998. Both copper and international coal priceswere lower. Corporate and financing expenses of $81 million compared with$100 million in the second quarter of last year, reflecting lowertax-related charges. During the second quarter of 1999, Exxon purchased 4.1 millionshares of its common stock for the treasury at a cost of $325million, representing a continuation of purchases to offsetshares issued in conjunction with the Company's benefit plans andprograms. Purchases are made in open market and negotiatedtransactions and may be discontinued at any time. As aconsequence of the proposed merger of Exxon and Mobil, therepurchase program to reduce the number of Exxon sharesoutstanding was discontinued in December of 1998. First Half 1999 vs. First Half 1998 Net income was $2,225 million in the first half of 1999, adecrease of 35% from the $3,440 million earned in 1998. Netincome for the first half of 1999 included a $120 million chargefor the restructuring of Japanese operations, while the prioryear period included a $70 million charge relating to anaccounting change. Excluding non-recurring items, first half 1999net income declined 33% to $2,345 million or $0.96 per share,compared to $3,510 million or $1.41 per share last year. Exploration and production earnings declined due to thesignificant drop in gas prices in the U.S. and Europe. Crude oilrealizations were up slightly versus the first half of 1998.Liquids production of 1,539 kbd compared to 1,616 kbd in thefirst half of 1998, primarily due to natural field declines andsteps to curtail marginal volumes in the low price environment ofthe first quarter. Partly offsetting this was increasedproduction from new developments in the North Sea and Azerbaijan.Worldwide natural gas production of 6,527 mcfd was up 145 mcfdfrom 1998 due to colder European weather. Exploration andproducing expenses were reduced from prior year levels. Earnings from U.S. exploration and production operations forthe first six months were $405 million, a decrease of $9 millionfrom 1998. Outside the U.S., exploration and production earningswere $925 million, down $255 million from last year, largely dueto lower gas prices. Petroleum product sales of 5,449 kbd increased 44 kbd overlast year, principally due to volume growth in North America.Earnings from U.S. refining and marketing operations were $96million, down $230 million from 1998, reflecting the significantdeterioration in industry refining margins and higher plannedmaintenance activities. Outside the U.S., first half 1999refining and marketing earnings, excluding non-recurring items,decreased $600 million to $308 million, driven by much lowerrefining margins, weaker marketing margins and higher plannedmaintenance activities. Chemicals earnings totaled $579 million in the first half of1999 compared with $669 million last year. Industry commodityprices and margins have declined from last year's levels. Primeproduct sales volumes of 8,832 kt were a first half record andincreased 3% from last year. Earnings from other operations totaled $182 million, adecrease of $10 million from the first half of 1998, reflectingdepressed copper and coal prices, offset by reduced operatingexpenses. Corporate and financing expenses decreased $29 millionto $150 million, reflecting lower tax-related charges. During theperiod, the company's operating segments continued to benefitfrom the impact of lower effective tax rates and the favorableresolution of tax-related issues. During the first half of 1999, Exxon purchased 6.4 millionshares of its common stock for the treasury at a cost of $495million, representing a continuation of purchases to offsetshares issued in conjunction with the Company's benefit plans andprograms. ots Original Text Service: Exxon Corporation Internet:http://www.newsaktuell.de Contact: Tom Cirigliano of ExxonCorporation, 972-444-1109 (in the USA) Web site:http://www.exxon.com

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