exxon mobil xom put the large losses of 2020 in the rearview mirror by recording its highest quarterly earnings since the first quarter of 2014 fourthquarter earnings improved to 89 billion from a loss of 201 billion last year which was largely due to impairments adjusted earnings for the fourth quarter increased to 88 billion from 110 million last year largely on higher commodity prices     operating cash flow of 171 billion sufficiently covered capital spending and the dividend while combined with 26 billion in asset proceeds allowing for 9 billion in debt reduction during the quarter for the full year exxon generated 48 billion in cash flow the highest level since 2012 and repaid 20 billion in debt exxon ended the year with debt at prepandemic levels and leverage at 21 in line with management’s longterm range of 2025 but further reduction is likely in the first quarter it will proceed with its previously announced 10 billion repurchase program to be completed over 1224 months but that rate could be accelerated depending on market conditions in 2021 exxon spent 166 billion in line with its previous guidance for 2022 it plans capital spending of 21 billion24 billion including 1 billion in its loweremission investments within its longterm capital spending plans of 20 billion25 billion     our fair value estimate and narrow moat rating are unchanged we maintain a favorable outlook for exxon and expect further improvement in the coming years the initiation of repurchases is likely the beginning of an increase in shareholder returns given the outlook for strong free cash flow generation dividend growth has been tepid and repurchases lacking the last few years due to low prices followed by a focus on debt reduction however with breakeven levels falling to 35barrel oil on average by management estimates we expect exxon to have room to increase shareholder returns in the coming years