Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA Source : www.globalcompanyintelligence.com Page 1 Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA Publication Date: OCT 2010 5959 Las Colinas Boulevard Phone +1 972 4441000 Revenue 310,586 (million USD) Irving, TX Fax +1 972 4441348 Net Profit 19,280 (million USD) 75039 Website www.exxonmobil.com Employees 80,700 United States Exchange XOM [New York Stock Exchange] Industry Energy and Utilities Company Overview Exxon Mobil Corporation (ExxonMobil) is an integrated oil and gas company. The company is engaged in exploration and production of oil and gas; refining, transportation and marketing of oil and natural gas; and manufacture and sale of petroleum products. ExxonMobil is also involved in the commodity petrochemicals and holds interests in electricity generation facilities. It operates in more than 200 countries across the globe with a number of brand names including ExxonMobil, Exxon, Esso and Mobil. The company is headquartered in Irving, the US. Key Executives Name Title Rex W. Tillerson Chairman Donald D. Humphreys Treasurer Michael J. Boskin Director William W. George Director Kenneth C. Frazier Director Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData Share Data Exxon Mobil Corporation Share Price (USD) as on 06-Oct-2010 63.90 EPS (USD) 3.98 Market Cap (million USD) 325,570 Enterprise Value (million USD) 337,945 Shares Outstanding (million) 5,092 Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData SWOT Analysis Exxon Mobil Corporation, SWOT Analysis Strengths Weaknesses Integrated Refining and Chemical Operations Wide Geographic Spread Declining Market Share in Sector Low Focus on Profitability Opportunities Threats Demand for Hydrocarbons in the Long Run Expansion through Inorganic Growth Natural Disasters Downturn in the Refining Sector Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData Financial Performance Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData Recent Developments Oct 05, 2010 BAM Clough Receives Additional LoI For PNG LNG Jetty Topsides Oct 01, 2010 Bapco Receives Bids For LNG Terminal In Bahrain Sep 29, 2010 ExxonMobil Announces Odoptu Production Startup At Sakhalin-1 Project In Russia Sep 23, 2010 Leighton To Deliver Civil And Underground Works For Gorgon Project Sep 21, 2010 ExxonMobil Awards MZST License To Calfrac Well Services Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData
Transcript
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Source : www.globalcompanyintelligence.com Page 1
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review
Reference Code: GDGE1203FSA Publication Date: OCT 2010
United States Exchange XOM [New York Stock Exchange] Industry Energy and Utilities
Company Overview Exxon Mobil Corporation (ExxonMobil) is an integrated oil and gas company. The company is engaged in exploration and production of oil and gas; refining, transportation and marketing of oil and natural gas; and manufacture and sale of petroleum products. ExxonMobil is also involved in the commodity petrochemicals and holds interests in electricity generation facilities. It operates in more than 200 countries across the globe with a number of brand names including ExxonMobil, Exxon, Esso and Mobil. The company is headquartered in Irving, the US.
Key Executives
Name Title
Rex W. Tillerson Chairman
Donald D. Humphreys Treasurer
Michael J. Boskin Director
William W. George Director
Kenneth C. Frazier Director Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData
Share Data
Exxon Mobil Corporation
Share Price (USD) as on 06-Oct-2010 63.90
EPS (USD) 3.98
Market Cap (million USD) 325,570
Enterprise Value (million USD) 337,945
Shares Outstanding (million) 5,092Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData
SWOT Analysis
Exxon Mobil Corporation, SWOT Analysis Strengths Weaknesses Integrated Refining and Chemical Operations Wide Geographic Spread
Declining Market Share in Sector Low Focus on Profitability
Opportunities Threats Demand for Hydrocarbons in the Long Run Expansion through Inorganic Growth
Natural Disasters Downturn in the Refining Sector
Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData
Financial Performance
Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData
Recent Developments
Oct 05, 2010 BAM Clough Receives Additional LoI For PNG LNG Jetty Topsides
Oct 01, 2010 Bapco Receives Bids For LNG Terminal In Bahrain
Sep 29, 2010 ExxonMobil Announces Odoptu Production Startup At Sakhalin-1 Project In Russia
Sep 23, 2010 Leighton To Deliver Civil And Underground Works For Gorgon Project
Sep 21, 2010 ExxonMobil Awards MZST License To Calfrac Well Services
Source: Annual Report, Company Website, Primary and Secondary Research, GlobalData
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Table of Contents Table of Contents........................................................................................................................................................................................................... 2 List of Tables.................................................................................................................................................................................................................. 4 List of Figures................................................................................................................................................................................................................. 4 Section 1 - About the Company ..................................................................................................................................................................................... 5 Exxon Mobil Corporation - Key Facts............................................................................................................................................................................. 5 Exxon Mobil Corporation - Key Employees.................................................................................................................................................................... 6 Exxon Mobil Corporation - Key Employee Biographies ................................................................................................................................................. 7 Exxon Mobil Corporation - Major Products and Services............................................................................................................................................... 8 Exxon Mobil Corporation - History ............................................................................................................................................................................... 10 Exxon Mobil Corporation - Company Statement.......................................................................................................................................................... 13 Exxon Mobil Corporation - Locations And Subsidiaries ............................................................................................................................................... 15
Head Office............................................................................................................................................................................................................ 15 Other Locations & Subsidiaries ............................................................................................................................................................................. 15
Section 2 – Company Analysis .................................................................................................................................................................................... 23 Exxon Mobil Corporation - Business Description ......................................................................................................................................................... 23
Business Description - Chemical ........................................................................................................................................................................... 23 Chemical - Overview ....................................................................................................................................................................................... 23 Chemical - Production..................................................................................................................................................................................... 23 Chemical - Financials...................................................................................................................................................................................... 23 Chemical - Capital Expenditure....................................................................................................................................................................... 23 Chemical - Market View .................................................................................................................................................................................. 23 Chemical - Key Strategies............................................................................................................................................................................... 23
Exxon Mobil Corporation - Opportunities............................................................................................................................................................... 28 Opportunity - Demand for Hydrocarbons in the Long Run.............................................................................................................................. 28 Opportunity - Expansion through Inorganic Growth ........................................................................................................................................ 29 Opportunity - Deep Offshore- Growth Area for the Long Term ....................................................................................................................... 29 Opportunity - Opportunities in Unconventional Energy Sources..................................................................................................................... 29
Exxon Mobil Corporation - Threats ........................................................................................................................................................................ 29 Threat - Natural Disasters ............................................................................................................................................................................... 29 Threat - Downturn in the Refining Sector........................................................................................................................................................ 29 Threat - US Energy Policy............................................................................................................................................................................... 29 Threat - Threat to Oil Sand Industry................................................................................................................................................................ 30 Threat - Rising Capital Costs in the Refining Sector....................................................................................................................................... 30
Exxon Mobil Corporation - Key Competitors ................................................................................................................................................................ 31 Section 3 – Company Financial Ratios ........................................................................................................................................................................ 32
Section 4 – Company’s Recent Developments............................................................................................................................................................ 37 Oct 05, 2010: BAM Clough Receives Additional LoI For PNG LNG Jetty Topsides ....................................................................................... 37 Oct 01, 2010: Bapco Receives Bids For LNG Terminal In Bahrain ................................................................................................................ 37 Sep 29, 2010: ExxonMobil Announces Odoptu Production Startup At Sakhalin-1 Project In Russia............................................................. 37 Sep 23, 2010: Leighton To Deliver Civil And Underground Works For Gorgon Project.................................................................................. 38 Sep 21, 2010: ExxonMobil Awards MZST License To Calfrac Well Services................................................................................................. 38 Sep 20, 2010: ExxonMobil Announces Equipment For Industry Use Through MWCC .................................................................................. 39 Sep 16, 2010: ExxonMobils's Deepwater Exploration Well Commercially Not Viable .................................................................................... 39 Sep 14, 2010: MMA Secures Gorgon Fuel Transportation Contract .............................................................................................................. 39 Sep 02, 2010: CCJV Wins AUD250 Million Work Order For LNG Upstream Infrastructure In Papua New Guinea ....................................... 40 Sep 01, 2010: WorleyParsons Receives Contract From ExxonMobil For Hebron Project In Canada............................................................ 40
Section 5 – Appendix ................................................................................................................................................................................................... 41 Methodology .......................................................................................................................................................................................................... 41 Ratio Definitions..................................................................................................................................................................................................... 41 About GlobalData .................................................................................................................................................................................................. 45 Contact Us ............................................................................................................................................................................................................. 45 Disclaimer .............................................................................................................................................................................................................. 45
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List of Tables Exxon Mobil Corporation, Key Facts ............................................................................................................................................................................. 5
Exxon Mobil Corporation, Key Employees.................................................................................................................................................................... 6
Exxon Mobil Corporation, Key Employee Biographies.................................................................................................................................................. 7
Exxon Mobil Corporation, Major Products and Services............................................................................................................................................... 8
Exxon Mobil Corporation, History................................................................................................................................................................................ 10
Exxon Mobil Corporation, Other Locations ................................................................................................................................................................. 15
Exxon Mobil Corporation, Subsidiaries ....................................................................................................................................................................... 16
Exxon Mobil Corporation, Key Competitors ................................................................................................................................................................ 31
Exxon Mobil Corporation, Ratios based on current share price.................................................................................................................................. 32
Exxon Mobil Corporation, Annual Ratios..................................................................................................................................................................... 32
Exxon Mobil Corporation, Interim Ratios..................................................................................................................................................................... 35
Capital Market Ratios .................................................................................................................................................................................................. 41
List of Figures Exxon Mobil Corporation, Performance Chart (2005 - 2009)...................................................................................................................................... 34
Exxon Mobil Corporation, Ratio Charts ....................................................................................................................................................................... 36
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Section 1 - About the Company
Exxon Mobil Corporation - Key Facts
Exxon Mobil Corporation, Key Facts
Corporate Address 5959 Las Colinas Boulevard, Irving, TX, 75039, United States
Ticker Symbol, Exchange XOM [New York Stock Exchange]
Telephone +1 972 4441000 No. of Employees 80,700 Fax +1 972 4441348 Fiscal Year End December URL www.exxonmobil.com Revenue (in USD Million) 310,586 Industry Chemicals, Energy and
Utilities
Locations Australia, Austria, Belgium, Brazil, Cameroon, Canada, Chad, China, Colombia, Denmark, Egypt, Finland, France, Germany, India, Indonesia, Ireland, Italy, Japan, Kuwait, Luxembourg, Malaysia, Mexico, Netherlands, New Zealand, Norway, Poland, Portugal, Republic of Korea, Russian Federation, Singapore, Spain, Sweden, Switzerland, Thailand, Turkey, Ukraine, United Kingdom, United States
Source: Annual Report, Company Website, Primary and Secondary Research GlobalData
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Exxon Mobil Corporation - Key Employees
Exxon Mobil Corporation, Key Employees
Name Job Title Board Level Since Age
Rex W. Tillerson Chairman, Chief Executive Officer
Executive Board
2006 58
Donald D. Humphreys Treasurer, Senior Vice President
Executive Board
2006 62
Michael J. Boskin Director Non Executive Board 1996 64
William W. George Director Non Executive Board 2005 67
Kenneth C. Frazier Director Non Executive Board
Reatha Clark King Director Non Executive Board 1997 71
Marilyn Carlson Nelson Director Non Executive Board 1991 70
Samuel J. Palmisano Director Non Executive Board 2008 58
Steven S Reinemund Director Non Executive Board 2007 59
Larry R. Faulkner Director Non Executive Board 2008 65
Edward E. Whitacre Director Non Executive Board 2008 68
Walter V. Shipley Director Non Executive Board
Mark W. Albers Senior Vice President Senior Management 2007 53
H. R. Cramer Vice President Senior Management 1999 59
Stephen D. Pryor Vice President Senior Management 2004 60
Patrick T. Mulva Controller, Vice President Senior Management
2004 58
S. J. Glass, Jr. Vice President Senior Management 2008 62
Alan. J. Kelly Vice President Senior Management 2007 52
Richard Michael Kruger Vice President Senior Management 2008 50
Andrew P. Swiger Senior Vice President Senior Management 2009 53
Michael J. Dolan Senior Vice President Senior Management 2006 62
William M. Colton Vice President, Corporate Strategic Planning
Senior Management
T.M. Fariello Vice President, Washington Office
Senior Management
R.S. Franklin President, Vice President, ExxonMobil Upstream Ventures
Senior Management
David S. Rosenthal Vice President, Investor Relations and Secretary
Senior Management 2008 53
Thomas R. Walters Vice President Senior Management 2009 55
Neil W. Duffin President, ExxonMobil Development Company
Senior Management 2007 53
Suzanne M. McCarron President, ExxonMobil Foundation
Senior Management 2010
S. J. Balagia Vice President Senior Management 2010 58Source: Annual Report, Company Website, Primary and Secondary Research GlobalData
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Exxon Mobil Corporation - Key Employee Biographies
Exxon Mobil Corporation, Key Employee Biographies
Rex W. Tillerson
Job Title: Chairman, Chief Executive Officer
Board Level: Executive Board
Since: 2006
Age: 58
Mr. Tillerson has been the Chairman and the Chief Executive Officer of Exxon Mobil since 2006. He was the Senior Vice President of the company during 2001-2004. He also held many management positions in domestic and foreign operations since he joined the company in 1975, including those of the President, Exxon Yemen Inc. and Esso Exploration and Production Khorat Inc.; the Vice President, Exxon Ventures (CIS) Inc.; the President, Exxon Neftegas Limited and the Executive Vice President, Exxon Mobil Development Company.
Source: Annual Report, Company Website, Primary and Secondary Research GlobalData
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Exxon Mobil Corporation - Major Products and Services
Exxon Mobil is involved in the exploration, production, refining and marketing of oil and gas. It also operates the petrochemicals and power generation businesses.
Exxon Mobil Corporation, Major Products and Services
Products:
Crude oil
Natural gas
Electricity
Refined products:
Gasoline
Diesel
Aviation turbine fuel
Furnace oil
Bitumen
Other petroleum products
Lubricants
Petroleum specialties
Chemicals:
Aliphatic fluids
Aromatic fluids
Olefins
Synthetic fluids and lubricants
Higher alcohols
Plasticizers
Oxygenated fluids
Neo acids
Polymers:
Butyl polymers
EPDM rubber
Specialty elastomers
Santoprene TPEs
Polyethylene
Olefins
Polypropylene
Plastomers
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
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Hydrocarbon tackifier resins
Styrenic block copolymers
Functionalized polymers
Polymer films:
OPP films
Services:
Technical advisory services
Service stations
Convenience stores
Brands:
Exxon
Esso
Mobil
Source: Annual Report, Company Website, Primary and Secondary Research GlobalData
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
2009 Contracts/Agreements In dec 2009, Esso Highlands Limited (Esso Highlands), a subsidiary of Exxon Mobil Corporation, approved engineering, procurement and construction contracts for the $15 billion Papua New Guinea liquefied natural gas project (LNG).
2009 Contracts/Agreements In Nov 2009,Nigeria renewed three oil leases involving joint ventures
operated by the company. An agreement reached on the terms of new leases that will run for a further 20 years with an option to renew.
2008 Contracts/Agreements On April 14, 2008, ExxonMobil Exploration and Production Hungary
Limited, a subsidiary of ExxonMobil, and MOL Hungarian Oil and Gas Plc. (MOL) announced an agreement to start a joint exploration program in blocks 106 and 107 in the Mako Trough, Southeast Hungary. ExxonMobil will fund the work program and receive a 50% interest in the acreage upon completion. MOL will retain the remaining 50% interest. This exploration program covers 387,000 acres.
2008 Acquisitions/Mergers/Takeovers In 2008, the compay's affiliate, ExxonMobil Exploration and Production
Romania Limited, have signed an agreement with Petrom SA to help explore deepwater portions of the Neptun Block offshore Romania.
2008 New Products/Services ExxonMobil Chemical Company Introduced a new product for Packaging
and Agricultural Greenhouse Films with the Potential to Reduce Waste and Energy Consumption in 2008.
2008 Contracts/Agreements The company signed an agreement with Petrom SA to help explore
deepwater portions of the Neptun Block offshore Romania during December 2008.
2007 Other In February 2007, Exxon Mobil completed the phase one of the Sakhalin-
1 project offshore Eastern Russia with affiliates of Rosneft, RN-Astra and Sakhalinmorneftegas-Shelf, Sakhalin Oil and Gas Development Company and ONGC Videsh Limited.
2007 Other In March, Sinopec, Fujian Province, Exxon Mobil and Saudi Aramco
received the government approval for the Fujian Refining and Ethylene Joint Venture Project. The Chinese government granted the business licenses for their two joint ventures in Fujian Province, Fujian Refining & Petrochemical Company Limited and Sinopec SenMei Petroleum Company Limited.
2007 Corporate Changes/Expansions The two joint ventures, with a total investment of about $5 billion, will be
Exxon Mobil’s first fully integrated refining, petrochemicals and fuels marketing project with foreign participation in China.
2006 Corporate Changes/Expansions Exxon Mobil expanded its lubricants distribution network across Germany
and Poland during February 2006.
2006 Contracts/Agreements In 2006, the company signed agreements with Abu Dhabi National Oil
Company (ADNOC) in March 2006; through which Exxon Mobil receives a 28% undivided interest out of ADNOC's exploration and production activities in the Upper Zakum oil field. The company also entered an
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
agreement with P T Pertamina, to conduct exploration and production activities in Indonesia. In the same month, it signed an agreement with Thailand's PTT Chemical Public Company Limited, (PTTChem), for production of petrochemicals.
2006 Other In 2006, Mobil Pipe Line Company (MPLCO), an affiliated company,
commenced the delivery of Canadian crude to the U.S. Gulf Coast during April 2006 through an 858-mile crude oil pipeline that runs from Patoka, Illinois to Nederland, Texas. In May 2006, Exxon Mobil Chemical and Mitsubishi Chemical Corporation (MCC) agreed to terminate certain joint venture agreements for Mytex Polymers Asia Pacific Private Limited (Mytex AP) and Mytex Polymers Partnership (Mytex US). In Nigeria, the company started production from the Erha deepwater development, located approximately 60 miles (97 kilometers) offshore Nigeria.
2006 New Products/Services Exxon Mobil introduced new products in 2006, including polypropylene for
the automotive industry and turbine oils for Mitsubishi Heavy Industries (MHI) gas and steam turbines.
2006 Other In June 2006, India-based Reliance Petroleum Limited selected
ExxonMobil Research and Engineering Company’s (EMRE) Sulfuric Acid Alkylation technology for the construction of their export refinery in Jamnagar, India for upgrading the gasoline pool.
2006 Corporate Changes/Expansions ExxonMobil extended its technology partnership with Team McLaren
Mercedes to supply the Formula 1 racing team with Mobil 1-branded motor oils and high-performance fuels.
2006 Corporate Changes/Expansions In July 2006, ExxonMobil Middle East Gas Marketing Limited, a wholly
owned subsidiary of the company signed the development plan and the launch of the Al Khaleej Gas-Phase Two (AKG-2) project with the State of Qatar and Qatar. With this, the company completed the initial stage of the project, AKG-1, which was started in November 2005.
2005 Other The company sold its 3.7% stake in China Petroleum and Chemical
Corporation (Sinopec) in March 2005.
2005 Contracts/Agreements Qatar Petroleum, Exxon Mobil and Edison entered an agreement in May
2005 for developing a liquefied natural gas (LNG) terminal, offshore the coast of Italy in the North Adriatic Sea.
2005 Contracts/Agreements In September 2005, the company entered into a five-year supply
agreement with Caterpillar, to supply Caterpillar oils to the Caterpillar factories and dealers worldwide. Further, Exxon Mobil Chemical Company entered into a product distribution agreement with R T Vanderbilt in December 2005, to distribute Exxon Mobil’s commercial Vistalon Ethylene Propylene Diene Rubber - EP(D) M products in North America.
2005 Plans/Strategy In 2005, the company also announced its plans to convert its 71 Tiger
market convenience stores in Nashville and Memphis to its flagship On the Run convenience store brand. The company introduced many new products during 2005 including motor oils and multi-purpose greases for the food-processing industry.
2004 Contracts/Agreements Exxon Mobil Chemical entered into an agreement with BP Chemicals in
2004, to acquire sales and marketing assets of the BP European Isopropyl Alcohol (IPA) business. Also, the government of the State of Qatar and an Exxon Mobil subsidiary, Exxon Mobil Qatar GTL, entered into a heads of agreement (HOA) for a gas-to-liquid (GTL) project worth
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
2004 Corporate Changes/Expansions In 2004, the company strengthened its exploration and production
activities in Angola and Columbia. Exxon Mobil also received Euro 1.39 billion from the sale of its stake in the pipeline unit of Gasunie to the Dutch government.
2003 New Products/Services In 2003, the company launched its first synthetic blend motor oil for high-
mileage engines.
2003 Corporate Changes/Expansions In 2003, the company consolidated its U.S. East and U.S. West
production organizations to improve business performance. Towards the end of 2003, Exxon Mobil announced that its subsidiary, Mobil North Sea (MNSL), made a gas discovery in the Southern sector of the North Sea, following the successful testing of an exploration well (about 32 miles east of Bacton, U.K.).
2002 Corporate Changes/Expansions Exxon Mobil created a new business venture, EMTG in 2002, to expand
the commercial product and service line of the company's Mobil Travel Guide series. During 2002, the company disposed its coal and mineral business to focus on its core operations.
2000 Corporate Changes/Expansions In 2000, the company completed its $2 billion Sable Offshore Energy
Project, located off the coast of Nova Scotia, Canada.
1999 Incorporation/Establishment Exxon Mobil was formed in 1999 through the merger of Exxon and Mobil.
1882 Incorporation/Establishment Standard Oil of New Jersey (Jersey Standard) and Standard Oil of New
York (Socony), the chief predecessor companies of Exxon and Mobil, can be traced to the 1882, when Mr. John D. Rockefeller acquired various petroleum interests and organized them under the Standard Oil Trust.
Source: Annual Report, Company Website, Primary and Secondary Research GlobalData
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Exxon Mobil Corporation - Company Statement A statement by Mr. Rex W. Tillerson, the Chairman and the Chief Executive Officer of ExxonMobil is given below. The statement has been taken from the company’s 2009 annual report. To Our Shareholders ExxonMobil’s 2009 results demonstrated again the strength of our business model and our ability to excel under even the most challenging economic conditions. We confirmed once again that we are committed to a long-term vision of investing with discipline, improving operational efficiency, and increasing shareholder value. In the midst of the global economic downturn of the past year, all three of our businesses – Upstream, Downstream, and Chemical – continued to lead the industry worldwide in performance. Earnings were $19 billion. Return on average capital employed (ROCE) was 16 percent. Cash flow from operations and asset sales was $30 billion. For our shareholders, our leadership in 2009 has allowed us to return value to them. Through our dividends and share buybacks, our Corporation distributed a total of $26 billion to our shareholders in 2009. Over the past five years, we have distributed a total of more than $150 billion to our shareholders. Energy is the lifeblood of modern economies.For this reason, ExxonMobil continues to invest for the long term, secure in the belief that economic growth will return. In 2009, our capital and exploration expenditures were $27 billion. Over the next five years, we will continue to invest record amounts, more than $125 billion, to advance new technologies, deliver new Upstream projects, increase production of higher-value refined products, and grow our Chemical business. Another important measure of our long-term commitment to excellence is our industry-leading safety record. In 2009, we achieved best-ever lost time incident rates for our combined employee and contractor workforce. We continue to demonstrate our commitment to improving environmental performance and reducing environmental impacts. In 2009, we recorded zero spills from company owned and operated marine vessels and reduced Upstream hydrocarbon flaring by over 20 percent. For our Upstream business, 2009 was a strong year. Together with our partners, we started up eight major projects in the United States, the United Kingdom, Norway, Italy, and Qatar. These projects not only deliver new supplies of crude oil and natural gas to the world, but also provide significant value for resource owners and for our shareholders. In 2009, ExxonMobil and XTO Energy announced an all-stock transaction that will enhance ExxonMobil’s position in the development of unconventional natural gas and oil resources. We are confident that the combination of our complementary strengths will open new opportunities to meet growing global energy demand and build value for our shareholders. In our Downstream and Chemical businesses, we have maintained our long-term strategic approach during the recent economic downturn. Around the world, we continued to capture new efficiencies and benefit from our integration and operating flexibility, helping us to maximize the value of our assets and resources. In 2009, in the growing Asia Pacific market, we and our partners successfully started up China’s first integrated refining and petrochemical complex with foreign participation. We remain focused on operational excellence and the disciplined execution of our business strategies, which position us well for the future. Underpinning success across all of our businesses is our commitment to technology. We have invested more than $4 billion in research and development over the last five years. These investments have led to several technological breakthroughs that enable us to map undersea reservoirs, drill horizontally under arctic oceans, and efficiently transport cleaner-burning natural gas to markets worldwide. We have also worked with vehicle manufacturers to improve fuel economy through advanced plastics, new tire-lining technology, and synthetic lubricants. In 2009, we launched a multimillion dollar research initiative with Synthetic Genomics Inc. to explore the development and commercialization of algae-based biofuels. Through these efforts and many others, ExxonMobil is engineering integrated solutions to help meet the world’s growing energy needs while managing emissions. Of course, none of our Corporation’s technological advances – or our industry-leading operational excellence – would be possible without the talented men and women of ExxonMobil. Our success and our innovations are driven by their
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
ingenuity and dedication. Year after year, they prove they care not just about results, but how those results are achieved. Their dedication to upholding our high ethical standards for business wherever ExxonMobil operates and their unending diligence to protect people, communities, and the environment are essential to our continued success. Our National Content strategy enables us to make a positive change in the communities in which we operate, by opening doors of opportunity in host nations to promote economic development by employing and training local workforces and investing in infrastructure projects to support education and healthcare. As the world recovers from the current economic downturn, ExxonMobil will continue to look beyond the current business environment and focus on long-term business success and long-term growth in shareholder value. We will continue to pursue opportunities to enhance our portfolio to ensure our businesses remain well-positioned to deliver industry-leading performance at the top and bottom of the business cycle. We remain committed to meeting future growing energy demand through long-term planning, disciplined investment, operational excellence, and strong technological leadership. On behalf of the men and women of ExxonMobil, I am grateful to our shareholders who have placed their trust and confidence in us. We look forward to the successes to come.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Exxon Mobil Corporation - Business Description ExxonMobil, along with its subsidiaries and affiliates engages in the exploration, production and transportation of crude oil and natural gas; and manufacture and sale of refined products. The company is also a manufacturer and marketer of commodity petrochemicals, such as olefins, aromatics, polyethylene and polypropylene plastics and a range of specialty products. In addition, it has interests in electric power generation facilities. ExxonMobil has presence in six continents covering over 200 countries and operates through three reportable business segments: Upstream, Downstream and Chemical.Recently, ExxonMobil concluded the acquisition of XTO Energy, Inc., an oil and natural gas company, for a purchase consideration of USD 41,000 million.
Business Description - Chemical
Chemical - Overview
ExxonMobil, through its Chemical segment, involves in the manufacture and sale of petrochemicals and other chemical products. Its products include: paraxylene, olefins, polyethylene, polypropylene, synthetic rubber, oriented polypropylene packaging films, plasticizers, synthetic lubricant base stocks, additives for fuels and lubricants, zeolite catalysts and other petrochemical products. Its chemical activities are carried out in North America, Europe, the Middle East and Asia Pacific. As at December 31, 2009, the company chemical complex capacity stood at 8.9 millions metric tons (MT) of ethylene, 7.3 MT polyethylene, 2.2 MT polypropylene and 3.8 MT paraxylene. In 2009, the company started up a fully integrated, world-scale facility in Fujian Province, China, which comprised 800 thousand tons per year ethylene steam cracker and associated polypropylene, polyethylene and paraxylene units.
Chemical - Production
During the fiscal year 2009, the total chemical prime product sales reached 24,825 thousand metric tons, as compared to 24,982 thousand metric tons in 2008. Of which, 9,649 thousand metric tons were sold in the US and 15,176 thousand metric tons were sold in the remaining areas of the world.
Chemical - Financials
For the fiscal year 2009, the Chemical segment’s revenue accounted for USD 2,309 million, a decline of 22% over 2008.
Chemical - Capital Expenditure
For the fiscal year 2009, the company's capital expenditure for its Chemical segment totaled USD 3,148 million, as compared to USD 2,819 million in 2007.
Chemical - Market View
The worldwide demand for petrochemicals in the first half of 2009 was weak, however, the demand showed signs of recovery in the second half of 2009. ExxonMobil expects over 60% of global petrochemical demand growth to occur in Asia, with China accounting for more than one-third.
Chemical - Key Strategies
For its Chemical segment, ExxonMobil focuses on the following strategies: • Taking advantage of core competencies • Consistently delivering solid performance • Building and maintaining proprietary technology positions • Capturing the benefits of its integrated businesses
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Furthermore, to capitalize on the growth opportunities in Asia, the company started a fully integrated, world-scale facility in China. Additionally, Saudi Basic Industries Corporation (SABIC) and the company are progressing studies at its Kemya and Yanpet petrochemical joint venture sites in Saudi Arabia to supply premium products. It further aims to invest in projects which will support its specialty business, enhance energy efficiency of its operations, enhance feed flexibility and deliver breakthrough products and processes to enhance and extend its competitive advantage.
Business Description - Downstream
Downstream - Overview
The Downstream segment of the company comprises refining and supply; fuels marketing; and lubricants and specialties businesses. ExxonMobil’s refining and supply business includes a global network of refineries, manufacturing plants, transportation systems and distribution centers that provide a wide variety of fuels, lubricants, and other high-value products and feedstocks. ExxonMobil holds an ownership interests in 37 refineries across 21 countries with combined distillation capacity of 6.3 million barrels per day and lubricant basestock manufacturing capacity of about 140 thousand barrels per day. As part of its supply business, the company has interests in 11 crude oil and product tankers with individual capacity of more than one thousand deadweight tons. It also has interests in 186 major petroleum products terminals globally. Its fuels marketing business is responsible for marketing and selling of petroleum products and related services through its network of 28,000 retail service stations, under brands, Mobil, Exxon, and Esso. The company's lubricants and specialties business is involved in the marketing of finished lubricants, asphalt, and specialty products. ExxonMobil completed the commissioning of new cogeneration facilities in China and Belgium, representing a total of 375 MWs in 2009. In July 2009, the company formed an alliance with Synthetic Genomics Inc., a biotech company, to research and develop biofuels from photosynthetic algae. Recently, Mid-Atlantic Convenience Stores, LLC, acquired a majority interest in Uppy's Convenience Stores, Inc. and 170 convenience stores/fuel stations from ExxonMobil. 7-Eleven Australia Pty Ltd., a subsidiary of 7-Eleven Stores Pty Ltd., entered into an agreement to acquire 295 gasoline filling stations, from Mobil Oil Australia Pty Ltd., a subsidiary of the company. Additionally, Global Partners LP, a supplier of refined petroleum products, signed an agreement with the company to acquire 190 Mobil-branded gas stations for USD 200 million. ExxonMobil entered into a multi-year agreement, under which, ExxonMobil2 will manufacture and supply Caterpillar branded lubricants to Caterpillar factories and dealers worldwide.
Downstream - Production
During the fiscal year 2009, the total throughput at the company’s refineries stood at 5,350 thousands of barrels per day (mbpd), as compared to 5,416 mbpd in 2008. Furthermore, the petroleum product sales decreased to 6,428 mbpd in 2008 from 6,761 mbpd in 2008. The decline was primarily due to lower worldwide demand for fuel products. Of the total 6,428 mbpd, the sales volumes of gasoline and naphthas stood at 2,573 mbpd; heating oils, kerosene, diesel stood at 2,013 mbpd; aviation fuels stood at 536 mbpd; heavy fuels stood at 598 mbpd; and specialty products stood at 708 mbpd.
Downstream - Financials
For the fiscal year 2009, the Downstream segment recorded Earnings after income taxes of USD 1.78 million, a decline of 78% over 2008.
Downstream - Capital Expenditure
For the fiscal year 2009, the company's capital expenditure for its Downstream segment totaled USD 3,196 million, as compared to USD 3,529 million in 2008.
Downstream - Market View
The global refining industry is witnessing a slump following the global economic downturn after a high return period in the past few years. The company expects the refining margins to decline due to the intense competition in the refining
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
industry. Uncertain product demand due to the economic downturn, decreasing refinery margins and a surplus refining capacity are having a combined negative effect on the profitability of refining operations. These trends will continue to cast a shadow of uncertainty over the future of refinery margins thereby making the refining sector unattractive for the oil companies such as this. The decreased demand of petroleum products and low refinery margins forced many companies to cut throughput rates in their refineries or temporarily shut down the refineries. Furthermore, the prices of crude oil and petroleum products have dropped drastically from the peak of 2008 affecting the profitability of refineries. The meltdown in the financial sector has made it difficult to raise finance for the capital intensive refinery projects. These have prompted many companies to postpone or cancel their refinery investment plans.
Downstream - Key Strategies
The company’s strategies for the segment include maintaining best-in-class operations, maximizing value from leading-edge technologies, capitalizing on integration with other ExxonMobil businesses, selectively investing for resilient, advantaged returns, and providing quality, valued products and services to customers.
Business Description - Upstream
Upstream - Overview
The company, through its upstream segment, engages in the exploration and production of crude oil and natural gas. The company is also involved in power generation operations. It operates through several global companies and affiliates. These companies are responsible for the exploration, development, production, gas and power marketing, and upstream-research activities. The company has interests in various types of oil and gas assets including conventional, deepwater, heavy oil, oil sands, Arctic, acid/sour gas, LNG and tight gas assets. These assets are located in the US, Canada, South America, Europe, the Asia-Pacific, Australia, the Middle East, Russia, the Caspian and Africa. As of December 31, 2009, the company’s proved oil and gas reserves totaled 14,955 million barrels of oil equivalent (mmboe). Of the total proved reserves, the crude oil and natural gas liquid reserves totaled 6,469 million barrels and natural gas reserves reached 34,442 billion cubic feet. At the end of 2009, the company's undeveloped exploration acreage totaled gross 110.75 million (net 71.92 million). In addition, ExxonMobil has interests in electric power generation facilities. In 2009, ExxonMobil commenced eight major projects in the US, the UK, Norway, Italy, and Qatar. The Golden Pass liquefied natural gas (LNG) terminal is scheduled to open on the U.S. Gulf Coast in 2010 and is expected to have the capacity to import 2 billion cubic feet of gas per day from the new LNG projects in Qatar. Oil and Natural Gas Corporation Limited, an energy company, plans to sell its interest in Krishna Godavari basin gas block DWN-98/2, to the company.
Upstream - Production
During the fiscal year 2009, the combined oil and gas production volumes was 3,932 thousand barrels of oil equivalent (mboe), as compared to 3,921 mboe in 2008. During 2009, the company’s total liquids production was 2,387 mbpd and natural gas production was 9,273 million cubic feet per day (mmcfd). As of December 31, 2009 the company had a total of 16,556 net productive oil wells and 9,760 net productive gas wells. Furthermore, at the year-end 2009, it had 13,737 net operated wells.
Upstream - Financials
For the fiscal year 2009, the Upstream segment’s earning after income taxes accounted for USD 17,107 million, a decrease of 52% over 2008.
Upstream - Capital Expenditure
For the fiscal year 2009, the company's capital expenditure for its Upstream segment totaled USD 20,704 million, as compared to USD 19,734 million in 2008.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
The overall global energy demand is expected to grow by about 1.6% annually through 2030. With the growing transportation sector, the demand for liquid fuels is expected to rise at a rate of 1.4% per year. Driven by increasing demand for electricity, natural gas demand is expected to increase by 1.7% annually to 2030. The demand for gas in the Asia Pacific region is expected to grow faster than any other region of the world at about 3.2% per year through 2030. The company anticipates that the global LNG demand will increase rapidly by 2030, driven by the demand in North America, Europe and Asia Pacific markets. By 2030, LNG demand is expected to represent about 16% of the world’s gas demand. The company holds LNG liquefaction capacity of about 65 million tons in 2010, and it expect this to increase to more than 100 million tons annually in the coming years.
Upstream - Key Strategies
The company’s objective of the upstream segment is to create the value in that distinguishes the company from its competitors. ExxonMobil’s upstream business strategies include identifying and pursuing all attractive exploration opportunities, investing in projects that deliver superior returns, maximizing profitability of existing oil and gas production, and capitalizing on growing natural gas and power markets.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
ExxonMobil is engaged in the exploration and production of crude oil and natural gas, and marketing of petroleum products. It has integrated refining and chemical operations and cogeneration facilities. The company operates in diverse geographic locations across the world. The company can expect to benefit from the increasing demand for hydrocarbons in the long run. However, declining market share, proved oil reserves and the increasing production costs are likely to affect its profitability. Furthermore, natural disasters such as hurricanes in the Gulf of Mexico and the coastal US and stringent regulations may hamper its growth.
Exxon Mobil Corporation - Strengths
Strength - Integrated Refining and Chemical Operations
The company has its presence across the energy value chain. ExxonMobil is a leading energy company with integrated operations. The company achieves greater flexibility to optimize operations and to produce higher-value products with lower feedstock and operating cost due to its integrated large scale refining operations with chemical business. The company's refining and processing operations are closely related to the petrochemical production business due to overlapping processes and feedstocks. Over 90% of the chemical capacity that the company owns and operates is integrated with its refining complexes or natural gas processing plants. Such integrated sites are designed and operated to maximize the value of each product stream and to achieve cost savings from economies of scale. About 75% of ExxonMobil’s refining capacity is integrated with its lubricants and/or chemical businesses. On an average, the company's refineries are over 60% larger and are more integrated with chemical and lubes operations.
Strength - Wide Geographic Spread
ExxonMobil has upstream and downstream operations spread over various countries worldwide. It operates over 28,000 retail service stations in nearly 100 countries. The company operates its service stations under the brands Exxon, Mobil and Esso. In addition to its retail business, the company has three business-to-business segments, namely, retail, industrial and wholesale, aviation, and marine that sell ExxonMobil fuels to over one million customers worldwide ExxonMobil's exposure to the developed countries is highest in its peer group. North America and Europe are amongst the leading oil and gas consumers in the world. ExxonMobil has strong presence in the US, Canada, Europe, the Asia Pacific and Latin America. A major part of the company's petroleum product sales comes from North America and Europe. The company's strong retail presence in countries which are leading consumers of oil and natural gas drives revenue growth.
Strength - Extensive Research & Development Activities
ExxonMobil undertakes extensive Research & Development (R&D) activities to support its business. As of December 31, 2009 the company has held over 11,000 active patents. The company invested more than USD 4.0 billion in research and development over the last five years. The extensive R&D activities of the company provide major technological breakthroughs that enable the company to map undersea reservoirs, drill horizontally under arctic oceans, and efficiently transport cleaner-burning natural gas to markets. To improve fuel economy through advanced plastics, new tire-lining technology, and synthetic lubricants the company worked with vehicle manufacturers. To explore the development and commercialization of algae-based biofuels a multimillion dollar research initiative with Synthetic Genomics Inc. has been launched in 2009.
Strength - Cogeneration Facilities
ExxonMobil is an industry leader in the use of cogeneration process, which is a highly efficient way to generate power and steam. The substantial cogeneration facilities help the company in meeting its power and heat requirements economically while optimizing its energy resources alongwith significant environmental benefits because it produces fewer greenhouse gas emissions than conventional power generation.. Since 2004, the company invested more than USD 1.9 billion in new cogeneration capacity. has interests in a approximately 16,000 megawatts (MW) of power generation capacity worldwide.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
ExxonMobil's compounded annual growth rate (CAGR) for revenue was -4.33% during 2005-2009. This was below the Integrated Oil & Gas sector average* of 21.18%. Also, the company reported revenues of USD 310,586.00 million during the fiscal year ended December 2009, a decrease of 34.94% from 2008. A lower than sector average* revenue CAGR indicate that the company has underperformed the average sector growth and lost market share over the last four years. The company's under-performance could be attributed to a weak competitive position.
Weakness - Low Focus on Profitability
The operating margin of the company has decreased 627 bps over 2008. ExxonMobil's operating margin was 11.2% for the fiscal year 2009. This was below the Integrated Oil & Gas sector average* of 16.58%. Also, the operating profit of the company was USD 34,777.00 million during the fiscal year 2009, a decrease of 58.30% from 2008. A lower than sector average* operating margin implies inefficient cost management strategy by the company and management's low focus on profitability.
Weakness - Limited Liquidity Position
Weak liquidity position may affect the company's operational and financial conditions in short term. ExxonMobil's reported cash in hand of USD 10,693 million in 2009, a decrease of 66% over 2008. Further, its current ratio was 0.95 at the end of fiscal year 2009. Current ratio is used to indicate the company's ability to pay back its short-term liabilities with its short-term assets. This was below the S&P 500 companies average* of 1.06. This was below the Integrated Oil & Gas sector average* of 1.45. A lower than sector average* current ratio indicates that the company is in a weaker financial position than other companies in the sector.
Weakness - Declining Reserves
ExxonMobil’s declining proved oil reserves could affect its business and market share. The company's proved oil reserves have declined significantly over the past five years. As of December 31, 2008, the company's oil reserves were 6,469 million barrels, as compared to 7,576 million barrels in 2008; 7,744 million barrels in 2007; 8,194 million barrels in 2006 and 9,889 million barrels in 2003. During the 2003-2009 period, the company's proved oil reserves declined significantly by 52.87%, while the decrease during 2007-2008 was 14.61%. The oil and natural gas liquids production in 2009 was 2,387 mbpd, a decrease of 75bps over 2008. The declining trend in the company's proved oil reserves is likely to affect its oil production volumes.
Weakness - Increasing Production Costs
ExxonMobil has extensive oil and gas exploration and production operations worldwide. The production cost per barrel of production has been increasing steadily over the 2004-2009 period. In the fiscal year ended December 31, 2009, the production costs of the company increased to USD 8.72 per barrel, as compared to USD 7.14 per barrel in 2007, USD 6.04 per barrel in 2006, USD 5.36 per barrel in 2005, USD 6.04 per barrel in 2004 and USD 4.78 per barrel in 2003. The increasing upstream production costs are likely to affect its upstream profit margins.
Exxon Mobil Corporation - Opportunities
Opportunity - Demand for Hydrocarbons in the Long Run
The projected increase in demand for liquid fuels and natural gas in the coming years would help the company boost its sales and strengthen its financial base. The strong economic growth in the developing countries will drive global oil and natural gas demand. The overall global energy demand will grow about 1.6% annually to 2030. With the growing transportation sector, the demand for liquid fuels is expected to rise at a rate of 1.4% per year. Driven by increasing demand for electricity, natural gas demand is expected to increase by 1.7% annually to 2030. Furthermore, the global LNG demand is expected to grow at more than 4% per year through 2030, driven by demand in North America, Europe and Asia Pacific markets. By 2030, LNG demand is expected to represent about 16% of the world’s gas demand. ExxonMobil is currently participating in LNG operations in Qatar and Indonesia with a combined gross capacity of approximately 35 million tons per year (representing about 20% of global industry capacity), supplying LNG to markets in Asia, Europe, and North America. ExxonMobil is also constructing four additional trains in Qatar that will increase gross capacity by over 30 million tons per year. The gas demand in the Asia Pacific region is expected to grow faster than any other region of the world at about 3.2% per year through 2030. ExxonMobil is one of the largest suppliers to local markets of Australia and Malaysia, and also provides local supplies to markets in Thailand, Russia, the Far East and Qatar. The majority of hydrocarbon demand
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
is expected to be driven by the emerging Asian markets. ExxonMobil is well positioned to take advantage of emerging growth opportunities worldwide.
Opportunity - Expansion through Inorganic Growth
ExxonMobil is a large international oil and gas company and has a presence across value chain has the potential to gain market share and expand its operations through acquisitions or partnerships. The valuation of assets of companies has decreased significantly as a result of the economic crisis and volatility in the crude oil price. Valuation of many small and mid-size oil and gas companies has decreased considerably and these companies are available for acquisition by big cash rich players. In 2010, the company acquired XTO energy, an oil and gas company for a consideration of USD 41,000 million. This acquisition will provide ExxonMobil an competitive edge over its competitors in the field of unconventional sources.
Opportunity - Deep Offshore- Growth Area for the Long Term
As the company is active in deep offshore drilling, it stands to gain from the growth of this market in long run. Deep and ultra deep offshore oil and gas projects are attracting increased attention in the wake of the inevitable production decline in the conventional oil and gas resources. The decline in the oil reserves worldwide is challenging oil and gas companies to seek new fields in order to maintain their current oil production levels. Furthermore, there has been renewed interest in recent times due to the advancement in extraction and processing technologies and a significant rise in the price of oil and gas. In addition, due to the depletion of onshore reserves, exploration and production activity is moving towards deep and ultra deep offshore areas.
Opportunity - Opportunities in Unconventional Energy Sources
According to in-house research, new and emerging frontiers will increasingly add to the supply of oil and gas in 2010. ExxonMobil's Upstream segment is engaged in following unconventional energy sources: Heavy Oil/Oil Sands, Unconventional Gas and Acid/Sour Gas. Unconventional oil and gas projects are attracting increased attention with a decline in production from conventional oil and gas sources. There has been renewed interest in recent times due to the advancement in extraction and processing technologies and a significant rise in the price of oil and gas. Following this, there have been considerable investments in the production of oil and gas from unconventional sources.
Exxon Mobil Corporation - Threats
Threat - Natural Disasters
ExxonMobil has exploration and production operations in Alaska, the Gulf Coast, the Gulf of Mexico, California and the Mid-continent region. Some of the areas, in which the company operates, are prone to natural disasters. For instance, ExxonMobil’s Gulf of Mexico facilities were damaged during the hurricanes Katrina and Rita in 2005. The company’s significant operations in the Gulf of Mexico and the coastal US could be adversely affected by hurricanes in future as well. Powerful tropical storms and hurricanes are forecast to strike the Gulf Coast in coming years, threatening an area still recovering from the worst natural disaster in the US history. The company’s operations in the Gulf of Mexico are prone to disruption from hurricanes, which may significantly increase the company’s business costs, as the company might have to rebuild a part of its infrastructure repeatedly.
Threat - Downturn in the Refining Sector
The global refining industry is witnessing a slump following the global economic downturn after a rise in the past few years. Uncertain product demand due to the economic downturn, decreasing refinery margins and surplus refining capacity have a combined negative effect on profitability from refining operations. These trends will continue to cast a shadow of uncertainty over the future of refinery margins, thereby making the refining sector unattractive for the company. The decrease in the demand for petroleum products and low refinery margins forced many companies to cut throughput rates in their refineries or temporarily shut down the refineries. Furthermore, the prices of crude oil and petroleum products have dropped drastically from the peak of 2008, affecting the profitability of refineries. The meltdown in the financial sector has also made it difficult to raise finance for capital intensive refinery projects. While the situation has stabilized in 2010, these have prompted many companies to postpone or cancel their refinery investment plans.
Threat - US Energy Policy
The government’s proposed increase in taxes, and new oil and gas leasing policy may affect the earnings and growth of oil and gas companies such as this. The US energy policy highlights a considerable shift from the fossil fuel driven economy to an economy fuelled by renewable energy.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
The Obama administration has proposed various measures for increasing taxes on the US oil and gas industry. The key measures include elimination of tax breaks such as the intangible drilling and development costs, percentage depletion and manufacturing deduction. By 2019, these measures will increase the expenses of US oil and gas companies to approximately $31 billion, according to in-house forecasts. Moreover, in January 2010, the US’ interior secretary Ken Salazar announced amendments to the existing oil and gas leasing policy. The leasing policy might make domestic oil and gas explorations difficult. As per the new regulations, the leasing process will undergo internal and external scrutiny, verification of conformance to a Resource Management Plan; have greater public participation and industry participation and comprise larger environmental review procedures.
Threat - Threat to Oil Sand Industry
Low oil prices and environmental implications prove a dampener for companies active in oil sand exploration such as this. There has been much impact on the environment due to the exploration of oil sands. Exploration activities have influenced wildlife and water bodies. Oil sand operations generate toxic waste during the extraction process that comprise water, sand, clay, small amounts of bitumen, and naturally occurring organic compounds, salt and traces of metals. Furthermore, the amount of natural gas used by the Canadian oil sands industry is equivalent to the daily consumption of 3.2 million Canadian homes, which contributes to increased carbon emission. Additionally, the oil sands industry is more capital intensive than traditional oil exploration projects. The Canadian oil sands industry needs an oil price in the range of USD 50–65, depending on the location, in order to be profitable. However, the huge fall in the oil prices since the financial crisis has made many oil sands projects uneconomical. In addition, the global economic slowdown and an uncertain future demand and price outlook have decreased the attractiveness of the oil sands industry.
Threat - Rising Capital Costs in the Refining Sector
There was a significant pressure on refining margins due to the recessionary conditions. ExxonMobil operates 37 refineries in 21 countries. Refineries worldwide are becoming more complex and flexible in allowing refiners to process different qualities of crude. Even in developing countries, petroleum product quality norms are getting more stringent, which is resulting in an increase in costs for building secondary conversion units such as fluid catalytic crackers, hydro crackers and cokers. Additionally, shifting yield patterns in favor of light and middle distillates instead of fuel oil also require huge investments to upgrade simple refineries into complex ones for some companies. NOTE: * Sector average represents top companies within the specified sector The above strategic analysis is based on in-house research and reflects the publishers opinion only
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Exxon Mobil Corporation, Performance Chart (2005 - 2009)
Source: Annual Report, Company Website, Primary and Secondary Research GlobalData
Financial Performance
The company reported revenues of (U.S. Dollars) USD 310,586.00 million during the fiscal year ended December 2009, a decrease of 34.94% from 2008. The operating profit of the company was USD 34,777.00 million during the fiscal year 2009, a decrease of 58.30% from 2008. The net profit of the company was USD 19,280.00 million during the fiscal year 2009, a decrease of 57.36% from 2008.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Oct 05, 2010: BAM Clough Receives Additional LoI For PNG LNG Jetty Topsides Clough Limited (Clough) said that the BAM Clough joint venture has received an additional letter of intent (LoI) from Chiyoda JGC joint venture for the fabrication and construction of the topsides for the PNG LNG condensate offloading jetty. The second contract is valued at around $53 million, bringing the total value of contracts awarded to BAM Clough for the PNG LNG jetty project to $308 million. The topsides will be fabricated and assembled at Clough's Sattahip fabrication yard in Thailand, and will be transported and installed at the jetty site, 20km northwest of Port Moresby. John Smith, CEO of Clough, said: "Clough and our long-term partner BAM International are delighted to be given the opportunity to deliver the topsides for this EPC project, which will provide continuity of quality work for our yard in Thailand." BAM Clough JV is a 50/50 joint venture between BAM International bv and Clough Operations Pty Ltd., a wholly-owned subsidiary of Clough. The PNG LNG project is an integrated development that includes gas production and processing facilities, onshore and offshore pipelines and liquefaction facility with the capacity of 6.6 mtpa. Participating interests include affiliates of ExxonMobil (33.2%), Oil Search Limited (29%), Independent Public Business Corporation (PNG Government-16.6%), Santos Limited (13.5%), Nippon Oil Exploration (4.7%), Mineral Resources Development Company (PNG landowners-2.8%) and Petromin PNG Holding Limited (0.2%).
Oct 01, 2010: Bapco Receives Bids For LNG Terminal In Bahrain
Bahrain Petroleum Company (Bapco) has received prequalification bids from local and international firms to build an LNG import terminal that is estimated to cost over $1 billion, reported Steel Guru, citing MEED. The company is expected to unveil the tenders by the fourth of 2010 and successful bidder by the first of 2011. The project includes setting up a ship unloading system, LNG storage tanks, regasification and send out system, marine works, a jetty and other associated works. Companies bidding for prequalification for the project include: Punj Lloyd, Italian-Thai Development, Excelerate Energy, Golar LNG Energy, Vitol Bahrain, Shell, IM Skaugen, China Harbour Engineering Company, Al-Hassanain Company, GDF Suez Development, BG American & Global, Hess LNG, Samsung Construction & Trading, Tecnicas Reunidas, Exxon Mobil Corporation, Mitsubishi Corporation, Korea Gas Corporation, BP Gas Marketing, Mitsui & Co./JGC Corporation, Chevron Corporation and IHI Corporation.
Sep 29, 2010: ExxonMobil Announces Odoptu Production Startup At Sakhalin-1 Project In Russia
Exxon Mobil Corporation (ExxonMobil) has announced the startup of production from the Odoptu field at the Sakhalin-1 project offshore northeastern Russia. ExxonMobil subsidiary Exxon Neftegas Limited (ENL) is operator on behalf of the five-company international Sakhalin-1 consortium. The Odoptu field is expected to add up to 11 million barrels (1.5 million tons) to Sakhalin-1 oil production in 2011. The startup is on schedule and within development cost expectations. Neil W. Duffin, president of ExxonMobil Development Company, said: "This is yet another milestone in Sakhalin-1 project achievements. The Sakhalin-1 project is one of the largest energy investments in Russia and is a testament to international cooperation.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
"The project applies industry-leading technology to successfully operate in a safe and environmentally responsible manner in one of the most challenging sub-arctic environments in the world, while providing important economic benefits to Russia." Development of the Odoptu field has included world-class performance in the drilling and completion of seven extended-reach wells. The Sakhalin-1 project employs one of the world's most powerful land-based rigs, which drilled horizontally under the Sea of Okhotsk to the Odoptu oil reservoir over five miles (9km) offshore, said ExxonMobil. Additional activities in the development of Odoptu included the construction of a new onshore oil and gas treatment facility and flowline connection to the existing Chayvo onshore processing facility. The Sakhalin-1 project includes the phased development of the Chayvo, Odoptu and Arkutun-Dagi fields, with an estimated total resource of 2.3 billion barrels (307 million tons) of oil and 17 trillion cubic feet (485 billion cubic meters) of natural gas. The Chayvo field, which was the initial phase of the Sakhalin-1 project, began production in 2005. Future project phases call for the development of the Arkutun-Dagi field as well as expanded gas production and sales from the Chayvo field. These later project developments will sustain production well into the future. Since startup, the Sakhalin-1 project has produced over 270 million barrels (35.4 million tons) of oil for export to world markets. It also has been a key supplier of over 210 billion cubic feet (six billion cubic meters) of associated natural gas to customers in Khabarovsk Krai, in far eastern Russia, to heat homes and meet growing energy needs. The project will continue to help meet future natural gas demand in this region. The Sakhalin-1 consortium includes ENL (30% interest)Sakhalin Oil and Gas Development Co. Ltd. (SODECO, 30%)affiliates of Rosneft, RN-Astra (8.5%), Sakhalinmorneftegas-Shelf (11.5%) and ONGC Videsh Ltd. (20%).
Sep 23, 2010: Leighton To Deliver Civil And Underground Works For Gorgon Project
Leighton Contractors Pty Limited (Leighton) has been awarded a contract by Chevron Australia to deliver the civil and underground works package for the Gorgon project, valued at more than $800 million. The contract win is in addition to the company's current work in hand at the Gorgon project where the company is completing works on the 2.1km LNG jetty and marine structures in consortium with Saipem. Craig Laslett, managing director for Leighton, said: "We have a genuine commitment to deliver the project with the highest standard of safety and to provide the expertise and services required to develop Australia's energy needs in line with sustainable economic development." Ray Sputore, general manager of Leighton western region, said: "Leighton has strong experience working with oil and gas clients, and a skilled team to ensure our contribution is world-class. Being the largest single resources project in Australia, we will be drawing on our pool of skilled workers as well as new talent to meet the peak target of 1,500 employees across both Leighton contracts. "It is an exciting time for Leighton and we are proud to be involved in such an iconic West Australian project." The contract scope includes earthworks, in-situ and precast concrete and underground services--including drainage, piping and electrical and instrumentation cabling which will be installed within the LNG plant site. The team will commence work immediately are expected to be complete by mid 2013. The Gorgon Project is operated by an Australian subsidiary of Chevron and is a joint venture of the Australian subsidiaries of Chevron (around 47%), ExxonMobil (25%) and Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).
Sep 21, 2010: ExxonMobil Awards MZST License To Calfrac Well Services
ExxonMobil Corporation (ExxonMobil) has announced the licensing of its Multi-Zone Stimulation Technology (MZST) well treatment process to Calfrac Well Services Ltd. (Calfrac Well Services). The MZST process can be used to rapidly and reliably stimulate multiple reservoir zones in a single operation, yielding improved well economics.
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
The MZST process was developed by ExxonMobil Upstream Research Company in Houston, Texas. The MZST process can be particularly beneficial for fracturing operations in tight gas, shale gas, and coal bed methane wells that target multiple reservoir zones, thick reservoir sections, or long reservoir intervals where multiple stimulation treatments are required, said ExxonMobil. The MZST process will enable Calfrac Well Services to optimize its stimulation operations by combining the deployment of perforating and fracturing equipment simultaneously in the wellbore to enable single-trip, multi-zone stimulations. The technology dramatically increases the number of zones that can be fractured per day compared to conventional fracturing and stimulation operations. Sara Ortwein, president of ExxonMobil Upstream Research Company, said: "For a variety of unconventional plays ExxonMobil’s MZST process continues to be a premier technology for rapidly moving from drilled well to completed production well. The track record of the MZST process for cost effective and efficient operations is a testament to the value of the technology and the reason service companies choose to license the technology from ExxonMobil." Doug Ramsay, president and CEO of Calfrac Well Services, said: "We are pleased to add this proven stimulation technology to our portfolio and plan to promote the effectiveness and efficiency of using the ExxonMobil MZST process with our many customers throughout Canada and the US."
Sep 20, 2010: ExxonMobil Announces Equipment For Industry Use Through MWCC
Exxon Mobil Corporation (ExxonMobil), on behalf of the Marine Well Containment Company (MWCC), has announced an agreement with BP to provide its underwater well containment equipment to MWCC as part of BP's intent to join the new organization. Chevron, ConocoPhillips, ExxonMobil and Shell are establishing the MWCC to provide emergency response services in the US Gulf of Mexico. As part of the agreement, the BP equipment will be made available to all oil and gas companies operating in the US Gulf of Mexico. The equipment could be deployed to capture and contain oil from a potential underwater well blowout while the new rapid-response system announced in July is being developed. Lloyd Guillory, marine well containment system project executive, said: "We are working quickly and effectively in an unprecedented effort to improve incident preparedness. Our progress since we announced the system demonstrates the commitment of our companies to make equipment immediately available for incident response." The existing BP equipment is being assessed for use in near-term response capability. The sponsor companies' project team will utilize full time BP technical personnel with experience from the Gulf of Mexico response. Guillory said: "This and other equipment that the project expects to acquire will enable us to preserve and secure existing capability for use by the oil and gas industry in the US Gulf of Mexico while we build the new system that exceeds current response capabilities." Richard Morrison, BP vice president for Gulf of Mexico operations, said: "We are pleased to provide the experience and specialized equipment needed to respond to a deepwater well control incident and intend to join the MWCC. We believe the addition of our recently gained deepwater intervention experience and specialized equipment will be important to the marine well containment system."
Sep 16, 2010: ExxonMobils's Deepwater Exploration Well Commercially Not Viable
ExxonMobil Corporation (ExxonMobil) has drilled a deepwater exploration well, offshore Libya, which was commercially not viable, Reuters reported. The well was first announced in 2009 with the collaboration between ExxonMobil and National Oil Corporation of Libya.
Mermaid Marine Australia Ltd. (MMA) has been awarded a three-year contract by the Chevron operated Gorgon project, commencing in the second quarter of 2011. The contract involves the provision of a towing tug, a landing craft (LCT) and a barge suitably modified to transport fuel from mainland Australia to Barrow Island in support of the Gorgon project. The contract will generate revenue in excess of AUD80 million over the initial three-year term and includes an option to extend for a further 12 months. In July 2010, MMA was awarded a further two contracts related to the Gorgon project to transport cargo and water respectively from mainland Australia to Barrow Island. The contract for the transportation of cargo from MMA's Dampier supply base to Barrow Island involves the provision of one towing tug and two barges for an initial term of 15 months, commencing mid 2010. The contract for the transportation of water to Barrow Island is for a term of nine months later in 2010 and involves the provision of one towing tug and two barges. Jeff Weber, managing director of MMA, said: "All three operations represent an exciting development for MMA and we are proud to be able to support Chevron and the Gorgon project as it continues to progress. "MMA has extensive experience in conducting tug and barge operations in the region and with the company also providing stevedoring and related services to the Gorgon project on our Dampier supply base, we are able to integrate the marine supply chain and ensure security of supply to Barrow Island." The Gorgon project is operated by an Australian subsidiary of Chevron and is a joint venture of the Australian subsidiaries of Chevron (approximately 47%), ExxonMobil (25%) and Shell (25%), Osaka Gas (1.25%), Tokyo Gas (1%) and Chubu Electric Power (0.417%).
Sep 02, 2010: CCJV Wins AUD250 Million Work Order For LNG Upstream Infrastructure In Papua New Guinea
Clough Limited (Clough) said that the Clough Curtain joint venture (CCJV) has received firm work orders worth AUD250 million associated with the upstream infrastructure contract awarded on May 1, 2009. The total value of work awarded to CCJV on the upstream infrastructure project now stands at AUD560 million. The PNG LNG project is an integrated development that includes gas production and processing facilities, onshore and offshore pipelines and liquefaction facilities. Participating interests are affiliates of Exxon Mobil Corporation (including Esso Highlands Limited as operator, 33.2%), Oil Search Limited (29%), Independent Public Business Corporation (PNG Ggovernment, 16.6%), Santos Limited (13.5%), Nippon Oil Exploration (4.7%), Mineral Resources Development Company (PNG landowners, 2.8%) and Petromin PNG Holdings Limited (0.2%).
Sep 01, 2010: WorleyParsons Receives Contract From ExxonMobil For Hebron Project In Canada
WorleyParsons Limited (WorleyParsons) has been awarded a contract by ExxonMobil Canada Properties (ExxonMobil) for the topsides on the Hebron project. The contract is for front end engineering and design (FEED), with the option at ExxonMobil’s discretion to subsequently provide detailed engineering, procurement and construction (EPC) services. The Hebron field is an oil and gas development in the Atlantic Ocean located 350km offshore from St. John’s in Newfoundland and Labrador, Canada.ExxonMobil has approved $61 million for FEED to be completed through 2011. WorleyParsons estimates the services revenue under the full FEED/EPC contract to be $285 million over five years. WorleyParsons will provide overall project management of the contract with subcontracts to be awarded to multiple third parties, with a special emphasis on performing work in Newfoundland and Labrador in accordance with Hebron Project benefits commitments. WorleyParsons will work with ExxonMobil to deliver on this and other benefits commitments, including those related to procurement, supplier development, education and training, research and development, and gender equity and diversity. John Grill, CEO of WorleyParsons, said: “WorleyParsons is excited to be selected by ExxonMobil Canada Properties for the complex Hebron Project which will utilize our proven expertise in sub-Arctic floatover topsides.”
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
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Methodology
GlobalData company reports are based on a core set of research techniques which ensure the best possible level of quality and accuracy of data. The key sources used include:
Company Websites Company Annual Reports SEC Filings Press Releases Proprietary Databases
Currency Codes
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USD U.S. Dollars GlobalData
Ratio Definitions
Capital Market Ratios
Capital Market Ratios measure investor response to owning a company's stock and also the cost of issuing stock. Price/Earnings Ratio (P/E)
Price/Earnings (P/E) ratio is a measure of the price paid for a share relative to the annual income earned per share. It is a financial ratio used for valuation: a higher P/E ratio means that investors are paying more for each unit of income, so the stock is more expensive compared to one with lower P/E ratio. A high P/E suggests that investors are expecting higher earnings growth in the future compared to companies with a lower P/E. Price per share is as of previous business close, and EPS is from latest annual report.
Calculation: Price per Share / Earnings per Share Enterprise Value/Earnings before Interest, Tax, Depreciation & Amortization (EV/EBITDA)
Enterprise Value/EBITDA (EV/EBITDA) is a valuation multiple that is often used in parallel with, or as an alternative to, the P/E ratio. The main advantage of EV/EBITDA over the PE ratio is that it is unaffected by a company's capital structure. It compares the value of a business, free of debt, to earnings before interest. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.
Enterprise Value/Sales (EV/Sales) is a ratio that provides an idea of how much it costs to buy the company's sales. EV/Sales is seen as more accurate than Price/Sales because market capitalization does not take into account the amount of debt a company has, which needs to be paid back at some point. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.
Enterprise Value/Operating Profit measures the company's enterprise value to the operating profit. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.
Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Operating Income
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Enterprise Value/Total Assets measures the company's enterprise value to the total assets. Price per share is as of previous business close, and shares outstanding last reported. Other items are from latest annual report.
Calculation: (Market Cap + Debt + Preferred Stock - Cash & Cash Equivalents) / Total Assets Dividend Yield
Dividend Yield shows how much a company pays out in dividends each year relative to its share price. In the absence of any capital gains, the dividend yield is the return on investment for a stock.
Calculation: Annual Dividend per Share / Price per Share GlobalData
Equity Ratios
These ratios are based on per share value. Earnings per Share (EPS)
Earnings per share (EPS) is the portion of a company's profit allocated to each outstanding share of common stock. EPS serves as an indicator of a company's profitability. Calculation: Net Income / Weighted Average Shares
Dividend per Share
Dividend is the distribution of a portion of a company's earnings, decided by the board of directors, to a class of its shareholders.
Dividend Cover
Dividend cover is the ratio of company's earnings (net income) over the dividend paid to shareholders. Calculation: Earnings per share / Dividend per share
Book Value per Share
Book Value per Share measure used by owners of common shares in a firm to determine the level of safety associated with each individual share after all debts are paid accordingly. Calculation: (Shareholders Equity - Preferred Equity) / Outstanding Shares
Cash Value per Share
Cash Value per Share is a measure of a company's cash (cash & equivalents on the balance sheet) that is determined by dividing cash & equivalents by the total shares outstanding. Calculation: Cash & equivalents / Outstanding Shares
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Profitability Ratios
Profitability Ratios are used to assess a company's ability to generate earnings, based on revenues generated or resources used. For most of these ratios, having a higher value relative to a competitor's ratio or the same ratio from a previous period is indicative that the company is doing well. Gross Margin
Gross margin is the amount of contribution to the business enterprise, after paying for direct-fixed and direct-variable unit costs. Calculation: {(Revenue-Cost of revenue) / Revenue}*100
Operating Margin
Operating Margin is a ratio used to measure a company's pricing strategy and operating efficiency.Calculation: (Operating Income / Revenues) *100
Net Profit Margin
Net Profit Margin is the ratio of net profits to revenues for a company or business segment - that shows how much of each dollar earned by the company is translated into profits. Calculation: (Net Profit / Revenues) *100
Profit Markup
Profit Markup measures the company's gross profitability, as compared to the cost of revenue. Calculation: Gross Income / Cost of Revenue
PBIT Margin (Profit Before Interest & Tax)
Profit Before Interest & Tax Margin shows the profitability of the company before interest expense & taxation. Calculation: {(Net Profit+Interest+Tax) / Revenue} *100
PBT Margin (Profit Before Tax)
Profit Before Tax Margin measures the pre-tax income over revenues. Calculation: {Income Before Tax / Revenues} *100
Return on Equity Return on Equity measures the rate of return on the ownership interest (shareholders' equity) of the common stock owners. Calculation: (Net Income / Shareholders Equity)*100
Return on Capital Return on Capital Employed is a ratio that indicates the efficiency and profitability of a company's
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
capital investments. ROCE should always be higher than the rate at which the company borrows; otherwise any increase in borrowing will reduce shareholders' earnings. Calculation: EBIT / (Total Assets – Current Liabilities)*100
Return on Assets
Return on Assets is an indicator of how profitable a company is relative to its total assets, the ratio measures how efficient management is at using its assets to generate earnings. Calculation: (Net Income / Total Assets)*100
Return on Fixed Assets
Return on Fixed Assets measures the company's profitability to its fixed assets (property, plant & equipment). Calculation: (Net Income / Fixed Assets) *100
Return on Working Capital
Return on Working Capital measures the company's profitability to its working capital. Calculation: (Net Income / Working Capital) *100
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Cost Ratios
Cost ratios help to understand the costs the company is incurring as a percentage of sales. Operating costs (% of Sales)
Operating costs as percentage of total revenues measures the operating costs that a company incurs compared to the revenues. Calculation: (Operating Expenses / Revenues) *100
Administration costs (% of Sales)
Administration costs as percentage of total revenue measures the selling, general and administrative expenses that a company incurs compared to the revenues. Calculation: (Administrative Expenses / Revenues) *100
Interest costs (% of Sales)
Interest costs as percentage of total revenues measures the interest expense that a company incurs compared to the revenues. Calculation: (Interest Expenses / Revenues) *100
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Liquidity Ratios
Liquidity ratios are used to determine a company's ability to pay off its short-terms debts obligations. Generally, the higher the value of the ratio, the larger the margin of safety that the company possesses to cover short-term debts. A company's ability to turn short-term assets into cash to cover debts is of the utmost importance when creditors are seeking payment. Bankruptcy analysts and mortgage originators frequently use the liquidity ratios to determine whether a company will be able to continue as a going concern. Current Ratio
Current Ratio measures a company's ability to pay its short-term obligations. The ratio gives an idea of the company's ability to pay back its short-term liabilities (debt and payables) with its short-term assets (cash, inventory, receivables). The higher the current ratio, the more capable the company is of paying its obligations. A ratio under 1 suggests that the company would be unable to pay off its obligations if they came due at that point. Calculation: Current Assets / Current Liabilities
Quick Ratio
Quick ratio measures a company's ability to meet its short-term obligations with its most liquid assets. Calculation: (Current Assets - Inventories) / Current Liabilities
Cash Ratio
Cash ratio is the most stringent and conservative of the three short-term liquidity ratio. It only looks at the most liquid short-term assets of the company, which are those that can be most easily used to pay off current obligations. It also ignores inventory and receivables, as there are no assurances that these two accounts can be converted to cash in a timely matter to meet current liabilities. Calculation: {(Cash & Bank Balance + Marketable Securities) / Current Liabilities)}
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Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Leverage ratios are used to calculate the financial leverage of a company to get an idea of the company's methods of financing or to measure its ability to meet financial obligations. There are several different ratios, but the main factors looked at include debt, equity, assets and interest expenses. Debt to Equity Ratio
Debt to Equity Ratio is a measure of a company's financial leverage. The debt/equity ratio also depends on the industry in which the company operates. For example, capital-intensive industries tend to have a higher debt-equity ratio. Calculation: Total Liabilities / Shareholders Equity
Debt to Capital Ratio
Debt to capital ratio gives an idea of a company's financial structure, or how it is financing its operations, along with some insight into its financial strength. The higher the debt-to-capital ratio, the more debt the company has compared to its equity. This indicates to investors whether a company is more prone to using debt financing or equity financing. A company with high debt-to-capital ratios, compared to a general or industry average, may show weak financial strength because the cost of these debts may weigh on the company and increase its default risk. Calculation: {Total Debt / (Total assets - Current Liabilities)}
Interest Coverage Ratio
Interest Coverage Ratio is used to determine how easily a company can pay interest on outstanding debt, calculated as earnings before interest & tax by interest expense. Calculation: EBIT / Interest Expense
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Efficiency Ratios
Efficiency ratios measure a company's effectiveness in various areas of its operations, essentially looking at maximizing its use of resources. Fixed Asset Turnover
Fixed Asset Turnover ratio indicates how well the business is using its fixed assets to generate sales. A higher ratio indicates the business has less money tied up in fixed assets for each currency unit of sales revenue. A declining ratio may indicate that the business is over-invested in plant, equipment, or other fixed assets. Calculation: Net Sales / Fixed Assets
Asset Turnover
Asset turnover ratio measures the efficiency of a company's use of its assets in generating sales revenue to the company. A higher asset turnover ratio shows that the company has been more effective in using its assets to generate revenues. Calculation: Net Sales / Total Assets
Current Asset Turnover
Current Asset Turnover indicates how efficiently the business uses its current assets to generate sales. Calculation: Net Sales / Current Assets
Inventory Turnover
Inventory Turnover ratio shows how many times a company's inventory is sold and replaced over a period. A low turnover implies poor sales and, therefore, excess inventory. A high ratio implies either strong sales or ineffective buying. Calculation: Cost of Goods Sold / Inventory
Working Capital Turnover
Working Capital Turnover is a measurement to compare the depletion of working capital to the generation of sales. This provides some useful information as to how effectively a company is using its working capital to generate sales. Calculation: Net Sales / Working Capital
Capital Employed Turnover
Capital employed turnover ratio measures the efficiency of a company's use of its equity in generating sales revenue to the company. Calculation: Net Sales / Shareholders Equity
Capex to sales
Capex to Sales ratio measures the company's expenditure (investments) on fixed and related assets' effectiveness when compared to the sales generated. Calculation: (Capital Expenditure / Sales) *100
Net income per Employee
Net income per Employee looks at a company's net income in relation to the number of employees they have. Ideally, a company wants a higher profit per employee possible, as it denotes higher productivity. Calculation: Net Income / No. of Employees
Exxon Mobil Corporation (XOM) - Financial and Strategic Analysis Review Reference Code: GDGE1203FSA
Revenue per Employee measures the average revenue generated per employee of a company. This ratio is most useful when compared against other companies in the same industry. Generally, a company seeks the highest revenue per employee. Calculation: Revenue / No. of Employees
Efficiency Ratio
Efficiency Ratio is used to calculate a bank's efficiency. An increase means the company is losing a larger percentage of its income to expenses. If the efficiency ratio is getting lower, it is good for the bank and its shareholders. Calculation: Non-interest expense / Total Interest Income
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Notes
Financial information of the company is taken from the most recently published annual reports or SEC filings The financial and operational data reported for the company is as per the industry defined standards Revenue converted to USD at average annual conversion rate as of fiscal year end
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