ExxonMobil 2011 Financial Statement Analysis and Assessment
ExxonMobil Corporation is one of the World’s largest companies by both gross revenue and net income. Total revenue finished at $486.4 billion for 2011 and net income was $41 billion, increases of $103.2 billion and $10.6 billion respectively. ExxonMobil continues to see solid returns in both their Upstream and Downstream business areas; while the Chemical business area after a major earnings increase in 2010 saw their earnings drop slightly in 2011. My financial assessment, review and analysis of ExxonMobil’s 2011 financial statements and 10K follows; focusing on profitability ratios as well as ...view middle of the document...
1 billion oil-equivalent barrels. Oil-equivalent barrel is defined as a unit of energy equivalent to the amount of energy found in a barrel of crude oil, approximately 1,700 kilowatt hours (kWh). Also, the Upstream business area made a significant oil discovery in the U.S. Gulf of Mexico with the Hadrian-5 exploration well, with an estimated recoverable resource of 700 million oil-equivalent barrels.
The Downstream business area includes a global portfolio of businesses that include refining and supply, lubricants and specialty marketing, fuels, and research and engineering. Highlights for the Downstream segment include; zero hydrocarbon spills from owned/operated and long-term leased marine vessels, this is especially important since Exxon made its final litigation payment for the Exxon Valdez oil spill in 2009. Also, recorded sales of industry-leading lubricants, Mobil 1, Mobil Delvac 1, and Mobil SHC, had earnings of $4.5 billion and return on average capital of 19.1 percent. The Downstream segment is responsible for the oil refining process; this process begins with a “fractional distillate column”. “The problem with crude oil is that it contains hundreds of different types of hydrocarbons all mixed together. You have to separate the different types of hydrocarbons to have anything useful. Fortunately there is an easy way to separate things, and this is what oil refining is all about. Different hydrocarbon chain lengths all have progressively higher boiling points, so they can all be separated by distillation. This is what happens in an oil refinery - in one part of the process, crude oil is heated and the different chains are pulled out by their vaporization temperatures. Each different chain length has a different property that makes it useful in a different way.” (Craig Freudenrich). For example gasoline is five to twelve carbon atoms with a vaporization temperature between 104 to 401 degrees Fahrenheit.
The Chemical business area is a petrochemical manufacturer that promotes its integration with the Upstream and Downstream businesses to allow them to consistently out perform their competition. Highlights for the Chemical segment include; earnings of $4.4 billion, which reflect the positive impact of advantaged feedstocks, a high degree of integration and feedstock flexibility, and record results in specialty businesses and return on average capital employed of 22.1 percent. As stated on the ExxonMobil Chemical website, ExxonMobil Chemical provides the building blocks for a wide range of products, from packaging materials and plastic bottles to automobile bumpers, synthetic rubber, solvents and countless consumer goods. We also make many of our technologies available for licensing (ExxonMobil Chemical).
Exxon Mobil uses a single-step income statement, only showing revenue and expense information to display net income. In 2011 ExxonMobil increased over 2010 in revenue, operating income and net...