Darren W. Woods
Chairman and Chief Executive Officer at Exxon Mobil
Thanks, Jennifer. Good morning, and thanks for joining us today. Before covering our 2022 results, I want to start by recognizing our people. Their hard work and commitment, not only to the Company, but to meeting the critical needs of society, are what drove the strong results we reported this morning. Their work is not easy. Whether it's achieving industry-leading safety, driving record levels of environmental performance, increasing production, offsetting run-away inflation, effectively responding to expropriations or quickly recovering from winter storms, to name just a few of the challenges. Our people delivered while, I'll add, continuing to manage significant, ongoing organizational changes.
As I cover our results, I think you'll see why we, and the entire management team are so proud of their efforts. Of course, our results clearly benefited from a favorable market. Take full advantage of the undersupplied market, our work began years ago, well before the pandemic. We chose
To invest counter-cyclically. We leaned in when others leaned out, bucking conventional wisdom. We continued with these investments through the pandemic and into today.
This year, our improved asset portfolio, organizational changes, and strong operating performance came together to deliver industry-leading results, industry-leading earnings, cash flows, return on capital employed, and total shareholder returns. Excluding asset sales, we had our best cash flow performance since the merger. And, despite lower revenues, we delivered higher profits than 2012, our previous record year. With a 400 basis point improvement in profit margin, reflecting upgrades to our product mix, structural cost reductions, disciplined expense management.
2022 was also a year of strong progress across our five strategic priorities. Importantly, we've continued to strengthen our industry-leading portfolio and increased production from high return, advantaged assets in Guyana and the Permian at a time when the world needed it most. We implemented a series of organizational changes to further leverage our scale and integration, improve effectiveness, and better serve our customers.
We combined our downstream and chemical companies to form Product Solutions, world's largest fuels, chemicals, and lubricants business. This new integrated business is focused on developing high value products, improving portfolio value, and leading in sustainability. We're also now supporting our businesses with corporate-wide organizations including projects, technology, engineering, operations, safety, and sustainability. We see further opportunities in supply chain, procurement, and finance.
We continued to expand our low carbon solutions business, recently signed a first of its kind customer contract to capture and permanently store up to 2 million metric tons per year of CO2. This agreement, in a hard-to-decarbonize sector, highlights how ExxonMobil can leverage our advantages to help others reduce their emissions and build an attractive business with strong returns and significant opportunities for growth.
The recent passage of the US Inflation Reduction Act, which incentivizes both hydrogen and carbon capture and storage, further reinforces this. To that end, in December, we shared our plans to invest approximately $17 billion in lower emission opportunities from 2022 through 2027, up from $15 billion in our prior plan.
We also made significant progress reducing greenhouse gas emissions in our existing operations and remain on track with our 2030 emissions reduction plans, including net-zero Scope 1 and 2 emissions for our unconventional operations in the Permian Basin by 2030. In addition to investing in industry-advantaged projects, we took advantage of the strong markets to further high-grade our asset portfolio with approximately $5 billion in divestments of non-core assets. Capex was in line with our guidance. To further increase transparency, in 2022, we introduced three new reports; The Lobbying Report, which provides additional disclosure of our lobbying activities and expenditures; The Climate Lobbying Report, which provides details on our U.S. activities at the federal and state level; and Our Investing in People supplement, an addition to our updated Sustainability Report.
Lastly, as I mentioned, the hard work of our people underpinned our success this past year, as it has done for decades. We build on this advantage every year by attracting and developing the best talent. This past year, we were once again recognized as top in industry for most attractive employer among U.S. engineering students, an honor we've received 10 years in a row.
Our 2022 financial results, which led the industry, further confirmed the strength of the strategy we developed five years ago. We grew earnings to nearly $56 billion -- $59 billion excluding identified items, significantly outpacing peers. We delivered an industry leading total shareholder return of 87% and a return on capital employed of 25%. Our highest one year ROCE since 2012.
Cash flow from operating activities was nearly $77 billion, also leading the industry. This enabled us to reduce net debt to 5%, fortifying the balance sheet and positioning us to continue our strategy of counter-cyclically investing. Our continued focus on leveraging scale and integration drove further efficiencies with nearly $6.9 billion in structural cost savings versus 2019, up from $5.3 billion at the end of 2021. We remain on plan to meet our target of $9 billion in structural cost reductions by the end of 2023.
Consistent with our capital allocation strategy, we continue to share our success with shareholders through a reliable and growing dividend. In 2022, we boosted the quarterly dividend by more than 3% and marked the 40th consecutive annual increase. Additionally, we increased our share repurchase program twice during the year. In total, we returned $30 billion to shareholders in 2022, including about $15 billion in dividends, which also led peers.
These actions reflect the confidence we have in our strategy, the performance we've seen across our businesses, and the strength of our company's future. We're proud of our people and their work to meet the evolving needs of society. As we advance our strategy and the 'and equation', we're committed to sharing their progress. Consistent with this, we continue to enhance our disclosures and increase transparency.
In December, we updated several important online publications. Our latest Sustainability Report describes the 14 focus areas where we believe our company can have the most impact. Advancing Climate Solutions 2023 progress report outlines our approach to help reduce greenhouse gas emissions, in support of a net-zero future.
It includes Updated resiliency modeling under the IEA Net Zero Emissions by 2050 Scenario, including the addition of carbon and pricing assumptions, and an audit statement from Wood Mackenzie. In addition, it includes, a discussion on the value of a life-cycle approach to measuring company-specific emissions vs Scope 3 targets.
We believe a life-cycle approach for companies is more aligned with the principles of ESG, better reflects a company's efforts to reduce society's emissions, and avoid the negative consequences of a company-specific Scope 3 target. The update also contains more information on how we're driving reductions in methane emissions and finally, it includes a look at the role of plastics in the energy transition, and how we're expanding our capacity for advanced recycling to help address the issue of plastic waste. Separately, we've updated our Outlook for Energy, which is our latest view of energy supply and demand through 2050. It forms the basis for our business planning.
In addition to assessing trends in economic development, technology advances, and consumer behavior, our outlook seeks to identify potential impacts of climate-related government policies, which often target specific sectors. We encourage you to read these publications to gain a better understanding of how we are working to be a leader in the energy transition. They're available on our website under the Sustainability tab.
Our plan for 2023 remains anchored in our existing strategy and builds on our continuing success. I'll wrap up by highlighting a few key areas. Critically, we'll continue our efforts to lead the industry in safety, operating, and financial performance. We'll continue to profitably grow the business through advantaged investments to meet the world's evolving needs and reduce emissions. We'll further leverage our new organization to fully realize our advantages in scale and integration and improve competitiveness. We expect to deliver another $2 billion in structural cost reductions, meeting our target of $9 billion in savings versus 2019.
We'll look to capture additional organizational synergies by consolidating our supply-chain activities and centralizing a majority of our finance and procurement operations. This will help us take better advantage of our scale and greatly improve our customer, vendor, and employee experience. We anticipate 2023 capital and exploration expenses of $23 billion to $25 billion. This includes investments in the next development in Guyana, and increased spending in U.S. unconventional assets. It also includes advancing our China chemical complex and numerous emission reduction opportunities.
We'll advance our work to reduce greenhouse gas emissions intensity in our operated assets and help customers reduce theirs, focusing on hard to decarbonize sectors. We'll continue to progress our blue hydrogen project in Baytown, that consists of a billion cubic foot per day blue hydrogen plant, the world's largest, and a CCS project with potential to store up to 10 million metric tons of CO2 per year.
We'll also leverage our recent success in Louisiana to grow the customer base for our Low Carbon Solutions business. As the energy system evolves, our focus on the fundamentals and investments in an integrated but diversified portfolio of advantaged businesses will play a crucial role in capturing value and outperforming competition irrespective of the pace or path of the transition.
As you've seen, we remain committed to our capital allocation priorities. Investing in advantaged projects, maintaining a strong balance sheet to manage across the commodity cycles, and sharing our success through shareholder distributions. We've demonstrated our commitment to a reliable and growing dividend and further sharing our success through the share repurchase program with up to $35 billion in cumulative repurchases in 2023 and 2024.
2022 demonstrated the importance of the ''and equation'' and the strength of our strategy. We feel good about the progress we've made and even better about the opportunities ahead. With that let me turn the call over to Jennifer.