Exxon Mobil : Transcript (2024)

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Exxon Mobil Corporation 2024 Annual Meeting

Conference Title: EXXON MOBIL CORPORATION Annual Meeting

Cautionary statement:

Statements of future events, conditions, expectations, plans, ambitions, or results in this presentation or the subsequent discussion period are forward-looking statements. Similarly, discussions of future carbon capture, transportation, and storage, as well as biofuels, hydrogen, direct air capture, and other plans to reduce emissions of ExxonMobil, its affiliates, or companies it is seeking to acquire, 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, and rates of return; 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 pressures, plans to reduce future emissions intensity; ambitions to reach Scope 1 and Scope 2 net zero from operated assets by 2050, to reach Scope 1 and 2 net zero in Upstream Permian Basin unconventional operated assets by 2030 and Pioneer Permian assets by 2035, to eliminate routine flaring in-line with World Bank Zero Routine Flaring, to reach near-zero methane emissions from operated assets and other methane initiatives, to meet ExxonMobil's emission reduction plans and goals, divestment and start-up plans, and associated project plans as well as technology advances, including in the timing and outcome of projects to capture and store CO2, produce hydrogen, produce biofuels, produce lithium, create new advanced carbon materials, and use plastic waste as feedstock for advanced recycling; maintenance and turnaround activity; drilling and improvement programs; price and margin recovery; shareholder distributions; planned Pioneer or Denbury integration benefits; resource recoveries and production rates; and product sales levels and mix could differ materially due to a number of factors. These include global or regional changes in oil, gas, petrochemicals, or feedstock prices, differentials, seasonal fluctuations, or other market or economic conditions affecting the oil, gas, and petrochemical industries and the demand for our products; government policies supporting lower carbon and new market investment opportunities such as the U.S. Inflation Reduction Act or policies limiting the attractiveness of investments such as European taxes on energy and unequal support for different methods of carbon capture; policy and consumer support for emission-reduction products and technology; variable impacts of trading activities; the outcome of competitive bidding and project wins; regulatory actions targeting public companies in the oil and gas industry; changes in local, national, or international laws, regulations, and policies affecting our business including with respect to the environment; taxes, trade sanctions, and actions taken in response to pandemic concerns; the ability to realize efficiencies within and across our business lines and to maintain current cost reductions as efficiencies without impairing our competitive positioning; decisions to invest in future reserves; reservoir performance, including variability in unconventional projects; the level, outcome, and timing of exploration and development projects and decisions to invest in future resources; timely completion of construction projects; war, civil unrest, attacks against the company or industry, and other political or security disturbances;

Exxon Mobil Corporation 2024 Annual Meeting

expropriations, seizures, and capacity, insurance or shipping limitations by foreign governments or international embargoes; changes in consumer preferences; opportunities for and regulatory approval of investments or divestments that may arise such as the Pioneer acquisition; the outcome of our or competitors' research efforts and the ability to bring new technology to commercial scale on a cost- competitive basis; the development and competitiveness of alternative energy and emission reduction technologies; unforeseen technical or operating difficulties including the need for unplanned maintenance; and other factors discussed here and in Item 1A. Risk Factors of our Form 10-K and under the heading "Factors Affecting Future Results" available through the Investors page of our website at www.exxonmobil.com. All forward-looking statements are based on management's knowledge and reasonable expectations at the time of this presentation and we assume no duty to update these statements as of any future date. Neither future distribution of this material nor the continued availability of this material in archive form on our website should be deemed to constitute an update or re-affirmation of these figures as of any future date. Any future update of these figures will be provided only through a public disclosure indicating that fact.

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 the Company's Global 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. However, the Global Outlook does not attempt to 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 the Company's business plans will be updated accordingly. References to projects or opportunities may not reflect investment decisions made by the corporation 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.

Please see the following documents for definitions, footnotes, reconciliations, and supplemental materials covered in today's presentation: 2023 Corporate Plan Update, 4Q23 Earnings Call Presentation, Advancing Climate Solutions Report, and Frequently Used Terms.

140 years, that has been our role - meeting the evolving needs of society. Today, that means

reliably providing energy and products for modern life AND reducing greenhouse gas emissions.

Exxon Mobil Corporation 2024 Annual Meeting

Both are critical, and with the right strategy and execution excellence, ExxonMobil has a unique opportunity to deliver for our customers, for our shareholders, and for society.

Jim Chapman: Good morning, everyone. Welcome to the ExxonMobil 2024 annual meeting of shareholders. I'm Jim Chapman, Vice President, Treasurer and Investor Relations. As we get started, a reminder that today's meeting will be recorded and will consist of copyrighted material. You may not record or rebroadcast these materials without ExxonMobil's consent. Our meeting is being conducted virtually, which enables broader investor participation. If for some reason we have technical challenges today and are unable to proceed with the meeting virtually, please be advised that the notice of the annual meeting has been properly served. A quorum is present. All proposals will be deemed to be properly presented before the meeting. Appointed proxies have cast all votes as set forth on the individual proxy cards. Polls will be closed at 10:30 a.m. Central Time. And the meeting will be adjourned. Final votes will be posted on the ExxonMobil investor website and filed with the SEC on a form 8-K.

We will be making forward-looking statements today. They're subject to a variety of risks and uncertainties. For more information on the factors that would cause our actual results to differ materially from these statements, please refer to our cautionary statement on the slide, as well as the risk factors section of our most recent form 10-K.

Now I'll summarize the rules and the items of business to be covered. In a few minutes, I'll turn the meeting over to Darren Woods, our Chairman and Chief Executive Officer for the 2024 ExxonMobil business review. Darren will share his thoughts on the critical role we are playing in meeting society's evolving needs, how we're transforming our strategy into industry leading results, and our plans to continue growing exceptional long-term shareholder value.

The business review will be followed by seven items of business, including three Board proposals and four shareholder proposals. The Board proposals include the election of directors, ratification

Exxon Mobil Corporation 2024 Annual Meeting

of independent auditors, and an advisory vote on current year executive compensation. If you're attending the meeting as an identified shareholder and wish to vote or to change a prior vote, please follow the voting instructions displayed on your screen. Polls will then be closed, and I'll provide the preliminary voting results from the Inspectors of Election. That will conclude the formal business of the meeting.

Next, we'll answer questions from our shareholders, and then Darren will provide a few closing remarks. To ensure our meeting is conducted in an orderly and productive manner, the Board has established rules governing this event. The rules of conduct are available within the meeting materials on the virtual meeting website. As stated in the rules of conduct, the presenter is required to restrict his or her comments to the shareholder proposal being presented. Only shareholders as of the record date, April 3rd, or their properly appointed proxies, are entitled to participate during the meeting. We want to ensure we have adequate time to hear all the proposals, as well as to take shareholder questions. As such, each presenter will keep his or her remarks to three minutes or less. To help keep us on time, there will be two audible notifications to remind the presenters they're nearing the end of their allotted time. The first sound will be heard when 30 seconds remain. A second and final notification will occur when 10 seconds remain. At the end of three minutes, the operator will conclude the proponent's remarks. I'll pause now so we can demonstrate the notification. Adhering to three minutes per presenter will ensure everyone is given an equal opportunity.

Prior to today's meeting, we received a number of shareholder questions through our website. For those of you who have registered as an identified shareholder and still want to submit a question, you may do so using the Ask a Question box in the lower left of your computer screen. Questions of general interest relating to ExxonMobil business will be considered during our question-and- answer period. In the interest of time, similar questions may be combined. While we may not get to every question, we'll do our best to answer as many as we can.

Exxon Mobil Corporation 2024 Annual Meeting

A list of shareholders entitled to vote is available for your inspection. Further instructions are included in the meeting materials on the virtual meeting website. Ellie Sullivan and Lori Chamoun of Computershare have been appointed as the Inspectors of Election for this meeting and are participating remotely. They've taken an oath of office that has been delivered to the secretary for filing with the minutes. Notice of this meeting has been properly given. The Inspectors of Election have determined that a quorum is present.

Now it's my pleasure to turn the meeting over to Darren Woods.

Darren Woods: Thank you, Jim. Good morning, everyone. I'd like to bring our 2024 annual shareholder meeting to order. The polls are now open. I declare a quorum present and the meeting ready to start. I want to extend a special welcome to the shareholders, employees and new director from Pioneer Maria Jelescu Dreyfus. As you know, we successfully merged with Pioneer on May 3rd, and I couldn't be more excited about the value that the combination of our two great companies will generate.

Before we turn to the formal business, I'd like to spend a few minutes describing our recent progress and what I fully expect to be our future success. That success begins with ExxonMobil's role in the world, which for more than 140 years has been to meet society's evolving needs. Today, that means two things for our company. One, reliably providing affordable energy and products that people need every day, and two, reducing greenhouse gas emissions. Both are critical as they help maintain and raise living standards around the world. Going forward, they will be even more important as the global population grows by 2 billion and the economy doubles by 2050. No less urgent are the billions of people, largely in the global south, who currently live in profound energy poverty, with no reliable source of heat for warmth or cooking beyond burning whatever fuel they can find. Addressing this challenge must remain a global priority.

Exxon Mobil Corporation 2024 Annual Meeting

At the same time, the world must make progress in reducing emissions. We can help by using our unique combination of industry leading capabilities. Leveraging our talented people, existing businesses, and advantages in technology, scale projects and operations, we are working to reduce global emissions in our own operations and for others.

The hard to decarbonize sectors of the economy account for 80% of the world's energy related emissions. And while wind and solar have an important role to play, they are simply not sufficient. Heavy industries need carbon capture and storage, biofuels and hydrogen. Today, the solutions needed to simultaneously reduce energy poverty and emissions don't exist at scale. The world needs government, academia and the private sector to fully leverage their respective capabilities to develop more solutions. Companies that have the expertise to contribute should be encouraged and incentivized. As a hydrogen and carbon technology company, we see tremendous opportunity to transform the molecules that today are the source of the world's climate challenge into critical elements of the solution.

That's why I attended COP for the first time last fall. World leaders need to move beyond aspirations, largely dependent on renewables, and develop a serious plan - one that reflects the full range of solutions necessary to solve the emissions challenge. Our industry brings a lot to the table, and no one brings more experience in complex, world-scale technology projects than we do. There are those, like wind and solar companies, who play a role in the energy transition by moving electrons. Our scientists and engineers transform molecules. This is where we have the most value to add, developing innovative solutions that address critical needs and generate returns for our shareholders.

Our strategy reflects this opportunity. In addition to improving our established businesses, you can see this in our five strategic priorities that we have consistently focused on over the past seven years, and that serve as a critical foundation for the future.

Exxon Mobil Corporation 2024 Annual Meeting

First, leading performance. Being the undisputed industry leader in shareholder returns, earnings and cash flow growth, safety, reliability, GHG emissions intensity and cost, and capital efficiency.

Second, essential partner. Creating value through win-win solutions for our customers, partners, and broader stakeholders, including communities in which we operate.

Third, advantaged portfolio. Establishing a portfolio of assets and products that outperform competition and grow value through industry leading high return investments.

Fourth, innovative solutions. Developing new products, approaches, and technologies to improve competitiveness.

And fifth, meaningful development. Maintaining a diverse and engaged organization that provides every individual unrivaled opportunities for personal and professional growth with impactful work.

Of course, the value of a strategy is only realized when executed. This is why we put so much emphasis on excellence in execution. As I look back on our performance last year, our ability to effectively execute while significantly restructuring our businesses truly set us apart. We maintained industry leading safety performance with a record low number of processed safety incidents and continued progress in personnel safety. We delivered large capital projects at top quintile cost and schedule performance. We achieved record levels of reliability in record production levels in both upstream and refining, and we kept 45 million pounds of plastic out of landfills through advanced recycling, and cut operated methane emissions intensity by more than 60% since 2016.

This excellence in operations translated into industry leading financial results. We delivered $36 billion in earnings and $55 billion of cash flow from operations, leading peers. Since 2019, we've increased earnings at a compound annual growth rate above 40%. That's more than twice our closest competitor. And we returned more than $110 billion to shareholders through dividends and

Exxon Mobil Corporation 2024 Annual Meeting

stock repurchases. Last year alone, we distributed a total of $32.5 billion, including $15 billion in dividends. In the entire S&P 500, only Apple and Microsoft paid more in total dividends.

The right strategy, coupled with excellence in execution, is creating tremendous value for both society and our shareholders. To meet society's needs for energy and products, we increased production by a combined 18% in Guyana and the Permian. These are among the most advantaged assets in our portfolio and among the lowest cost supply in industry. We started up the Payara development offshore Guyana in November, and reached nameplate capacity of 220,000 barrels per day within two months of start up. Our Guyana development's emission intensity is among the lowest in our entire upstream portfolio, and it's contributing to the fastest GDP growth in the world for the Guyanese people.

We completed the 250,000 barrel a day expansion of a refinery in Beaumont, Texas, where we've been part of the community since 1903. Completed on time and on budget, the Beaumont expansion is the largest refinery capacity addition in the United States in more than a decade.

We started up our 750,000 tons per annum chemical expansion in Baytown, Texas. This project uses new technology to meet growing demand for high value materials. In 2023, Baytown helped drive record sales of performance chemicals and high value lubricants.

This business performance was matched by our improving emissions performance, consistent with our ambition to be the industry's most responsible operator. We reduced the emissions intensity of our operations by more than 10% since 2016. In our Low Carbon Solutions business, we've contracted to transport and store 5 million tons per annum of CO2 for a major steelmaker, a fertilizer producer, and an industrial gas company. That's equivalent to replacing about 2 million gasoline powered cars with EVs. At ExxonMobil, we're demonstrating that you can grow production and reduce emissions at the same time.

Exxon Mobil Corporation 2024 Annual Meeting

Our operations in the Permian proved the point. Even as we continue to set production records, we're making progress on our industry leading plan to achieve net zero Scope 1 and 2 emissions from our operated assets by 2030. We've stopped all routine flaring, eliminated all of our high bleed pneumatic devices, electrified 100% of our drilling fleet, and deployed our first electric fracturing unit. By consistently delivering for our customers and society, we deliver for our shareholders.

Last year, we generated an attractive 15% return on capital employed. We take our responsibility to effectively allocate the capital entrusted to us by our shareholders seriously, and we're committed to deploying it to advantaged investments that generate attractive returns. Since 2019, our investors have earned an annualized total shareholder return that is not only higher than our peers, it's higher than the market as a whole.

We know that generating strong free cash flow and sharing it with shareholders is the bedrock of value creation. 2023 marked our 41st year of consecutive dividend increases, leading peers. We've also strengthened our focus on returning cash to shareholders through more consistent share repurchases.

For all of our success, we're not satisfied. We continue to see a portfolio of opportunities to significantly grow value. We plan to continue investing in our business this year to grow our portfolio of competitively advantaged assets, further shift our product mix towards higher value performance products, and achieve additional emissions reductions.

Our already advantaged upstream portfolio is being further transformed by Pioneer. Together, we will recover more resource more efficiently with lower emissions. On the execution front, this is a pivotal year as we advance multiple major projects expected to start up next year. These include everything from crude exploration and production, to additional refining and chemicals capacity, to biofuels and advanced recycling. We expect these projects to contribute nearly $4 billion in

Exxon Mobil Corporation 2024 Annual Meeting

additional potential earnings in 2027 at $60 real Brent and constant margins, demonstrating the importance of continuing our investments in the business.

Overall, by 2027, we expect to more than double earnings potential and roughly double cash flow versus 2019 at $60 real Brent and constant margins. Between now and then, we have the potential to generate $140 billion in surplus cash at today's oil prices. That's a level of financial strength and flexibility unprecedented in the history of this great company.

All of this is without the contributions of Pioneer. With Pioneer, we're now positioned to drive earnings, cash flow, and shareholder distributions even higher. Over the long term, we have designed our business so that it can thrive at any point during an energy transition. Technology is the key. In all aspects of our business, including Low Carbon Solutions, the technology we're inventing or adopting makes us more efficient, more capable, more profitable, with less carbon intensity.

We're just beginning to realize the benefits of all the changes we've been making. Our success to date convinces us that we have the right team, the right core competencies, the right strategy, and the right structure to win in the marketplace now and long into the future. I'm convinced we're positioning ExxonMobil to outperform and lead all of industry. I feel great about that, and I hope you do too.

With that, let's turn to the business of the meeting. I'm now placing the seven items of formal business listed in the meeting notice, including the election of directors, before the meeting for a vote. The first proposal is the election of 12 directors. The Board nominates the 12 persons identified in the proxy statement. All 12 are highly qualified to serve on the Board. All the nominees are currently serving as ExxonMobil directors and are participating in this meeting remotely. They are Michael Angelakis, Angela Braly, Gregory Goff, John Harris, Kaisa Hietala, Joseph Hooley,

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