Exxon 2014 Annual Report Download - page 46

Listed below are definitions of several of ExxonMobil’s key business and financial performance measures and other
terms. These definitions are provided to facilitate understanding of the terms and their calculation. In the case of financial
measures that we believe constitute “non-GAAP financial measures” under Securities and Exchange Commission
Regulation G, we provide a reconciliation to the most comparable Generally Accepted Accounting Principles (GAAP)
measure and other information required by that rule.
Total Shareholder Return • Measures the change in value of an investment in stock over a specified period of time, assuming dividend reinvestment.
We calculate shareholder return over a particular measurement period by: dividing (1) the sum of (a) the cumulative value of dividends received during the
measurement period, assuming reinvestment, plus (b) the difference between the stock price at the end and at the beginning of the measurement period;
by (2) the stock price at the beginning of the measurement period. For this purpose, we assume dividends are reinvested in stock at market prices at
approximately the same time actual dividends are paid. Shareholder return is usually quoted on an annualized basis.
Capital and Exploration Expenditures (Capex) • Represents the combined total of additions at cost to property, plant and equipment and exploration
expenses on a before-tax basis from the Summary Statement of Income. ExxonMobil’s Capex includes its share of similar costs for equity companies.
Capex excludes assets acquired in nonmonetary exchanges (effective 2013) and depreciation on the cost of exploration support equipment and facilities
recorded to property, plant and equipment when acquired. While ExxonMobil’s management is responsible for all investments and elements
of net income, particular focus is placed on managing the controllable aspects of this group of expenditures.
Proved Reserves • Proved reserve figures in this publication are determined in accordance with current SEC definitions. In statements covering reserve
replacement for years prior to 2009, reserves were determined using the price and cost assumptions we used in managing the business, not the historical
prices used in SEC definitions. The pre-2009 reserves also included oil sands and equity company reserves which at the time were excluded from
SEC reserves.
Proved Reserves Replacement Ratio • The reserves replacement ratio is calculated for a specific period utilizing the applicable proved oil-equivalent
reserves additions divided by oil-equivalent production. See “Proved Reserves” above.
Resources, Resource Base, and Recoverable Resources • Along with similar terms used in this report, these refer to the total remaining estimated
quantities of oil and gas that are expected to be ultimately recoverable. ExxonMobil refers to new discoveries and acquisitions of discovered resources as
resource additions. The resource base includes quantities of oil and gas that are not yet classified as proved reserves, but which ExxonMobil believes will
likely be moved into the proved reserves category and produced in the future. The term “resource base” is not intended to correspond to SEC definitions
such as “probable” or “possible” reserves.
Prime Product Sales • Prime product sales are total product sales excluding carbon black oil and sulfur. Prime product sales include ExxonMobil’s share
of equity company volumes and finished-product transfers to the Downstream.
Exploration Resource Addition Cost 2014 2013 2012 2011 2010
Exploration portion of Upstream Capex (millions of dollars) 3,689 7,155 4,740 5,464 4,121
Exploration resource additions (millions of oil-equivalent barrels) 2,942 5,703 3,734 3,906 4,725
Exploration resource addition cost per OEB (dollars) 1.25 1.25 1.27 1.40 0.87
Exploration resource addition cost per oil-equivalent barrel is a performance measure that is calculated using the Exploration portion of Upstream capital and exploration
expenditures (Capex) divided by exploration resource additions (in oil-equivalent barrels – OEB). ExxonMobil refers to new discoveries, and the non-proved portion of
discovered resources that were acquired, as exploration resource additions. Exploration resource additions include quantities of oil and gas that are not yet classified as
proved reserves, but which ExxonMobil believes will likely be moved into the proved reserves category and produced in the future. The impact of the nonmonetary portion
of asset exchanges is excluded in 2014, and the impact of the XTO Energy Inc. merger transaction is excluded in 2010.
Return on Average Capital Employed (ROCE) 2014 2013 2012 2011 2010
(millions of dollars)
Net income attributable to ExxonMobil 32,520 32,580 44,880 41,060 30,460
Financing costs (after tax)
Gross third-party debt (140)(163)(401)(153)(803)
ExxonMobil share of equity companies (256)(239)(257)(219)(333)
All other financing costs – net (68)83 100 116 35
Total financing costs (464)(319)(558)(256)(1,101)
Earnings excluding financing costs 32,984 32,899 45,438 41,316 31,561
Average capital employed 203,110 191,575 179,094 170,721 145,217
Return on average capital employed – corporate total 16.2% 17.2% 25.4% 24.2% 21.7%
ROCE is a performance measure ratio. From the perspective of the business segments, ROCE is annual business segment earnings divided by average business segment
capital employed (average of beginning and end-of-year amounts). These segment earnings include ExxonMobil’s share of segment earnings of equity companies, consistent
with our capital employed definition, and exclude the cost of financing. The Corporation’s total ROCE is net income attributable to ExxonMobil excluding the after-tax cost of
financing, divided by total corporate average capital employed. The Corporation has consistently applied its ROCE definition for many years and views it as the best measure
of historical capital productivity in our capital-intensive, long-term industry, both to evaluate management’s performance and to demonstrate to shareholders that capital has
been used wisely over the long term. Additional measures, which are more cash flow based, are used to make investment decisions.
Frequently Used Terms
EXXONMOBIL 2014 SUMMARY ANNUAL REPORT
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