XOM » Topics » RETURN ON AVERAGE CAPITAL EMPLOYED (ROCE)

This excerpt taken from the XOM 8-K filed Mar 11, 2009.

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 capital employed definition, and exclude the cost of financing. The Corporation’s total ROCE is net income 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.

 

(millions of dollars)    2008     2007     2006     2005     2004  

Return on Average Capital Employed

          

Net income

   45,220     40,610     39,500     36,130     25,330  

Financing costs (after tax)

          

Gross third-party debt

   (343 )   (339 )   (264 )   (261 )   (461 )

ExxonMobil share of equity companies

   (325 )   (204 )   (156 )   (144 )   (185 )

All other financing costs – net

   1,485     268     499     (35 )   378  
                              

Total financing costs

   817     (275 )   79     (440 )   (268 )
                              

Earnings excluding financing costs

   44,403     40,885     39,421     36,570     25,598  
                              

Average capital employed

   129,683     128,760     122,573     116,961     107,339  

Return on average capital employed – corporate total

   34.2 %   31.8 %   32.2 %   31.3 %   23.8 %

 

2


This excerpt taken from the XOM 8-K filed Mar 11, 2008.

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 capital employed definition, and exclude the cost of financing. The Corporation’s total ROCE is net income 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.

 

(millions of dollars)    2007     2006     2005     2004     2003  

Return on Average Capital Employed

          

Net income

   40,610     39,500     36,130     25,330     21,510  

Financing costs (after tax)

          

Gross third-party debt

   (339 )   (264 )   (261 )   (461 )   (490 )

ExxonMobil share of equity companies

   (204 )   (156 )   (144 )   (185 )   (172 )

All other financing costs – net

   268     499     (35 )   378     2,196 (1)
                              

Total financing costs

   (275 )   79     (440 )   (268 )   1,534  
                              

Earnings excluding financing costs

   40,885     39,421     36,570     25,598     19,976  
                              

Average capital employed

   128,760     122,573     116,961     107,339     95,373  

Return on average capital employed – corporate total

   31.8 %   32.2 %   31.3 %   23.8 %   20.9 %

 

(1) “All other financing costs – net” in 2003 includes interest income (after tax) associated with the settlement of a U.S. tax dispute.

 

2


This excerpt taken from the XOM 8-K filed Mar 13, 2007.

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 the Corporation’s definition of capital employed and exclude the cost of financing. The Corporation’s total ROCE is net income 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 tend to be more cash-flow based, are used to make investment decisions.

This excerpt taken from the XOM 8-K filed Mar 14, 2006.

RETURN ON AVERAGE CAPITAL EMPLOYED (ROCE)

Return on average capital employed (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 the Corporation’s definition of capital employed and excluding the cost of financing. The Corporation’s total ROCE is net income 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 tend to be more cash-flow based, are used for future investment decisions.

This excerpt taken from the XOM 8-K filed Mar 15, 2005.

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 capital employed definition, and exclude the cost of financing. The Corporation’s total ROCE is net income 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 tend to be more cash-flow based, are used for future investment decisions.

 

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