 |
 |
 |
 |
 |
 |
 |
|||||
|
Letter to Shareholders
ExxonMobil had an outstanding year in 2000. Three factors contributed to this impressive performance. We achieved strong financial results. We made substantial gains in building for the future. And we successfully completed the merger of two great organizations into one that is operating at higher levels of efficiency and profitability.
Earnings reached a record $17.7 billion. We achieved a new high in upstream profitability, and downstream earnings more than doubled.
Cash flow was a record $29 billion, and return on capital employed approached 21 percent.
Managing for the Long Term
This performance was a direct result of the company's consistent philosophy of managing our business for the long term. We have always applied a disciplined and selective strategy to our outstanding portfolio of investment opportunities. This, combined with our financial strength and our relentless drive to improve operational efficiency, allows us to prosper in both the peaks and valleys that characterize our industry.
This strategy has served shareholders well. ExxonMobil stock significantly outperformed the S&P 500 last year, as it has done for almost every comparison period in
at least the last 30 years. 2000 also saw an increase in annual dividend payments for the 18th consecutive year.
We have drawn on many strengths and assets to achieve these results. Among the most important are technology and the talent, creativity and determination demonstrated by the people of ExxonMobil.
Technology has played a critical role in all aspects of our business — allowing us to drill more deeply and in more challenging physical environments; enabling us to meet customer needs and make superior, more efficient and cleaner products; and bringing greater productivity to our day-to-day operations. Technological advances help us do our job better, more safely and more profitably.
For nearly 120 years, this company has held the unshakeable conviction that business success is achieved by people of intelligence, drive and high personal standards. We still believe that, and we know that the credit for last year's superior performance goes to the men and women who made it happen.
Positioned for the Future
The fundamental outlook for our industry is positive and highly encouraging. Energy is vital to economic growth and improved living standards. Sixty percent of the world's energy needs are met by oil and natural gas, and we are very well positioned to help meet those needs.
As you'll see in this report, we've had a successful year building for the future, so we can capitalize on this positive outlook. Adding to this was the successful completion of the merger, which has provided significantly greater benefits than originally projected.
In the upstream, we have leading positions in nearly all the major exploration and production areas in the world and in the newest opportunities, including the Gulf of Mexico, offshore West Africa and the Caspian Sea. The downstream seeks to build its customer base by helping meet consumer needs and desires. The Speedpass system is a good example, and we are consistently upgrading our convenience store offerings. We are also developing online e-commerce activities where attractive opportunities exist. Chemical is completing a multibillion-dollar investment program that has increased capacity of four high-volume products by more than 75 percent in the past five years.
Safety and Citizenship
There is no doubt that outstanding safety and environmental performance is critical to our success, and our results in 2000 are evidence of our commitment.
In addition to meeting our responsibilities to shareholders, we strive to be a good corporate neighbor wherever we operate. Around the world, the company and its employees have built homes and hospitals, helped feed orphaned children, and enhanced educational opportunities for millions of people.
Energy Policy
In the United States, as elsewhere, economic growth is linked to energy use. Because of the critical importance of that link, we believe it's time to focus attention on developing a fair and rational energy policy that will help ensure we have the energy supplies we need over the long term.
The efficient use of any resource is always prudent, and more efficient energy use should certainly be part of any national policy.
But improved efficiency alone will not be enough to meet rising energy demand. Access to promising areas is essential if we are to be in a position to meet future energy needs.
Access to potential sources of supply should be part of any nation's energy policy. Not only the United States, but other countries as well, should encourage companies to find new supplies where they are likely to be found. Both sides stand to benefit.
To promote access to prospective areas abroad, U.S. policymakers should take a fresh look at unilateral trade sanctions against countries in which new energy supplies can be developed. In some specific instances, sanctions may be regarded as a necessary tool of American foreign policy, but in general their effectiveness is questionable. We need to carefully gauge what is gained and what is lost when sanctions are imposed.
A successful long-term energy policy should also encourage innovation through research and technology. But this should be done without political bias or market-distorting subsidies.
Climate change continues to be a serious issue demanding attention. At this point, more and more people see that the Kyoto Protocol would accomplish little to reduce greenhouse gases and yet do substantial economic harm. It is time to move beyond Kyoto and to focus on technology research and development, fundamental gaps in climate science, economically sensible voluntary actions and an international approach that addresses all the world's people, not just the fraction covered by Kyoto. We want to be a positive part of such a better path forward.
I sincerely appreciate the efforts of our customers, contractors, suppliers and business partners — and especially our employees — in helping us achieve our objective of increasing shareholder value.
Our goal is to continue to be the world's premier petroleum and petrochemical company. Our results in 2000, and the brainpower and hard work that brought them about, give me confidence that we will meet that goal.
|
