Exxon 2009 Annual Report Download - page 47

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.
CASH FLOW FROM OPERATIONS AND ASSET SALES
Cash flow from operations and asset sales is the sum of the net cash provided by operating activities and proceeds from sales of subsidiaries,
investments, and property, plant and equipment from the Summary Statement of Cash Flows. This cash flow is the total sources of cash from both
operating the Corporation’s assets and from the divesting of assets. The Corporation employs a long-standing and regular disciplined review process to
ensure that all assets are contributing to the Corporation’s strategic objectives. Assets are divested when they are no longer meeting these objectives,
or are worth considerably more to others. Because of the regular nature of this activity, we believe it is useful for investors to consider sales proceeds
together with cash provided by operating activities when evaluating cash available for investment in the business and financing activities, including
shareholder distributions.
(millions of dollars) 2009 2008 2007
Net cash provided by operating activities 28,438 59,725 52,002
Sales of subsidiaries, investments and property, plant and equipment 1,545 5,985 4,204
Cash flow from operations and asset sales 29,983 65,710 56,206
CAPITAL EMPLOYED
Capital employed is a measure of net investment. When viewed from the perspective of how the capital is used by the businesses, it includes
ExxonMobil’s net share of property, plant and equipment and other assets less liabilities, excluding both short-term and long-term debt. When viewed
from the perspective of the sources of capital employed in total for the Corporation, it includes ExxonMobil’s share of total debt and equity. Both of
these views include ExxonMobil’s share of amounts applicable to equity companies, which the Corporation believes should be included to provide a
more comprehensive measure of capital employed.
(millions of dollars) 2009 2008 2007
Business Uses: Asset and Liability Perspective
Total assets 233,323 228,052 242,082
Less liabilities and noncontrolling interests share of assets and liabilities
Total current liabilities excluding notes and loans payable
(49,585) (46,700)(55,929)
Total long-term liabilities excluding long-term debt
(58,741) (54,404)(50,543)
Noncontrolling interests share of assets and liabilities
(5,642) (6,044)(5,332)
Add ExxonMobil share of debt-financed equity-company net assets
5,043 4,798 3,386
Total capital employed 124,398 125,702 133,664
Total Corporate Sources: Debt and Equity Perspective
Notes and loans payable 2,476 2,400 2,383
Long-term debt
7,129 7,025 7,183
ExxonMobil share of equity
110,569 112,965 121,762
Less noncontrolling interests share of total debt
(819) (1,486)(1,050)
Add ExxonMobil share of equity company debt
5,043 4,798 3,386
Total capital employed 124,398 125,702 133,664
CAPITAL AND EXPLORATION EXPENDITURES (Capex)
Capital and exploration expenditures are 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 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.
RETURN ON AVERAGE CAPITAL EMPLOYED (ROCE)
Return on average capital employed 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 definition of capital employed, 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
EXXON฀MOBIL฀CORPORATION฀ •฀ 2009฀SUMMARY฀ANNUAL฀REPORT
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