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IEEFA: ExxonMobil 2020 results come as no surprise: still not covering dividends

February 02, 2021
Clark Williams-Derry

This morning, ExxonMobil reported its first-ever annual loss, with cash flows from operations falling by more than half year-over-year. And even though the company cut capital spending by roughly 29% from the previous year, ExxonMobil still spent $2.6 billion more cash on capital projects than it generated from operations.

Yet despite these shortfalls, the company still paid $15.2 billion to its shareholders, borrowing money and selling off assets to help fund its generous dividend and modest share buybacks.

While these results were disappointing to some, they were not actually outliers. ExxonMobil has paid more to shareholders than it generated in free cash flows for 12 of the last 15 years. And its free cash flows have generally trended downwards for more than a decade.

Exxon now faces growing challenges from frustrated investors, who are pressuring the company to shake up its board and change its strategy, arguing that the company needs to shift its business model to thrive in a rapidly evolving energy market. Today’s results could add to the urgency of their calls.

Clark Williams-Derry ([email protected]) is an IEEFA energy finance analyst.

Recent analysis:

IEEFA: ExxonMobil must change direction to thrive

IEEFA update: ExxonMobil’s financials indicate slide under CEO Darren Woods’s leadership

IEEFA: ExxonMobil financial performance slides from industry leader to laggard

IEEFA update: ExxonMobil’s asset sales strategy comes up short in 2019, company backs off ambitious plans

Clark Williams-Derry

Clark Williams-Derry focuses on the finances North America’s oil, gas, and coal industries. His areas of expertise include: the long-term financial performance of North American oil & gas companies, particularly fracking-focused enterprises; company- and basin-specific studies of oil and gas production; U.S. LNG exports in the context of global markets; and U.S. and Canadian coal export projects.

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