NORTHEASTERN UNIVERSITY Energy: Integrated Oil and Gas

Corporate Finance
Professor Olubunmi Faleye
Equity Research Report
John Coogan

November 18, 2010 Ticker: NYSE:XOM Recommendation: Market Perform

Price: $70.48 (as of Nov-15, 2010) 12M Price Target: $75-$78
ExxonMobil is a major force in
Major Oils, with some 4.2 million
boed of oil & gas production, and a Price of XOM / Price of S&P 500
global downstream portfolio, with
6.2 million b/d of refining capacity,
and a world-scale petrochemicals
business. The company has an
emphasis on project scale and
lifespan, with significan in-house
research. As of December 31,
2009, it operated 16,587 gross and
13,737 net operated wells.

Neutral Outlook on ExxonMobile

 Cannot recommend XOM BUY for several reasons: All stock buy-out of Houston-based
XTO Entergy Inc. has failed to develop as anticipated and deal structure may be overstating EPS
gains to XOM. Although the 13.4x earnings paid for XTO appears accretive in the near-term,
vaguaries about cost-reduction strategies and a weak outlook in the natural gas market both call this
the future return on the acquition into question.

 Natural Gas prices do not appear to be experiencing upward pressure. We believe that while
oil prices are under structural upward pressure due to depleting high-return reserves, natural gas
prices are not. Addtionally, natural gas supply has consistently reacted to higher prices resulting in
preasure towards the marginal cost of supply. Through 2008 and 2009 oil production at Exxon has
represented 2/3rds of their total oil and gas production. Trends in both global supply and Exxon
strategy, including the XTO deal, point towards equivalent gas production as soon as 2011.

 Relative out-performance unlikely given changes within Super Major net income per barrel
rankings: XOM recently lost ground to other top producers and is now relatively cheaper than
Cheveron. Underperformance in earnings growth and expected negative impacts from the XTO
deal make sector out-performance difficult to imagine.

 Valuation and Risks, details on page 5: Our DCF-implied target is $78 and our Earnings Multiple
methodology yields $75. Downside risks to our neutral rating include political complications
abroad, falling demand, the expensive XTO acquisition and potention changes in US tax code
including renewable fuel legislation. Upside risks include surprise return on the XTO investment,
rising commodity prices and positive developments in chemical production.

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Equity Research Report - ExxonMobil November 19, 2010

Global Trends Business Description

Company History:
ExxonMobil is a direct descendent of Standard Oil, a company founded by John D. Rockefeller in 1870. In
1911, a Supreme Court ruling split Standard Oil into 34 separate companies. Two of those were the Standard
Oil Company of New Jersey and the Standard Oil Company of New York, which eventually became Exxon
and Mobil respectively. In 1999, Exxon and Mobil merged to create ExxonMobil. Currently headquartered
in Irving, Texas, ExxonMobil is a multinational oil conglomerate. With operations in 21 countries, Exxon is
the largest refiner of oil in the world. In addition to oil production, Exxon also has a large Chemical division.

Managment:
From Proxy Statement analysis, we believe XOM's corporate governance practices are sound and above
average for companies within their sector. Its board of directors is controlled by a supermajority (greater than
75%) of independent outsiders and CEO Rex Tillerson has consistently delivered on shareholder expecations.
He also serves as the Chairman of the Board of Directions and has held both positions since 2006 and
ascended to both after the retirement of longtime chairman and CEO Lee Raymond.

Primary Competition:
ExxonMobil’s main competitors based on its size, industry, and financial figures are BP, Chevron, Conoco
Phillips, Royal Dutch Shell, and Marathon Oil. ExxonMobil’s 21% ROE exceeds all of its competitors. An
analyst from Bolter and Co estimates that Exxon is currently trading at a 12% premium to its peers based on
next year EV/EBITDA multiples and a 16% premium to its peers based on next year P/E multiples (Seeking
Alpha).

Company Size:
Since 2005, ExxonMobil has been the world’s largest publically held corporation. Though Wal-Mart
recently surpassed them in revenue, ExxonMobil continues to lead the world in profits and market value. We
estimate ExxonMobil’s beta to be a stable 0.45 based on a 5 year S&P regression. The company is
geographically diversified with ownership interest in 37 refineries with 6.23 million barrels per day of
atmospheric distillation capacity across the North America, Europe and Asia.

Earnings Drivers:
ExxonMobil operates in three primary lines of business, oil and natural gas exploration and production (8%
of sales and 81% of earnings); refining and marketing (83%; 8%); and chemicals (9%; 11%). The chemicals
business represents a shift into a new segment in an attempt at diversification, similar areas of operational
expansion include electric power generation, coal and minerals. Exxon has a reported 23.0 billion barrels of
oil equivalent and a strong replacement rate, although changes in SEC reserves classification may distort
replacement data going forward.

Unlike rival, national oil companies (NOCs), ExxonMobil relies on technological innovation and advanced
exploration techniques to lower costs and drive profits. NOC’s far and away dominate the supply of proven
and probable reserves with about 80% of the world's reserves and a projected 80% of incremental production
rate going forward. The NOC’s are keeping the reserves with the lowest development costs to themselves.
Since 2000, Exxon's oil output from two of its largest regions, the United States and Europe, declined by 37%
and Exxon now obtains a quarter of its production from Africa.

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DCF Summary Data Discounted Cash Flow Analysis

Perpetual growth Assets critical to ExxonMobil total firm value:
1.50%
rate As is to be expected with the largest publically traded corporation, Exxon Mobil has a large and complex
WACC 8.41%
Discounted Free Cash Flow Valuation. The corporate valuation begins by looking at the company’s assets-
Horizon value 432,548
in-place and the financial, or non-operating, assets. The assets-in-place that Exxon owns include such assets
PV of Operations 398,373
as oil rigs and oil refineries. The balance sheet in 2009 shows $178,088,000,000 in long-term assets vs.
Adjusted TEV 402,104
$55,235,000,000 in short term assets. Those long term assets go into the DCF sheet as a part of operating
Implied Equity
392,499 capital. Changes in operating capital from year to year affect the net investment in operating capital, which
Value
Shares (Millions) 5,043 in turn lowers free cash flow. The present value of the future free cash flows is discounted at the weighted
Estimated Share average cost of capital because cash in the future is worth less than cash today. The assets are expected to
$77.84
Price
grow and generate free cash flows. In order for the share price to rise the investments that Exxon makes must
earn a higher free cash flow in the future and a higher rate of return than the cost of capital. The non-
operating assets show up on the balance sheet as well in the form of short term current assets and long term
investments. The operating and non operating assets added together give the total assets owned by Exxon.

Estimating the Cost of Capital:

Cost of Equity After cash flows are projected, an appropriate discount rate must be used to accurately consider the time
value of money. This discount rate will show what the cash flows are worth today, taking into account
CAPM 6.8%
consumption preferences and riskiness. We used a weighted average cost of capital (WACC) of 8.41% for
DGM 9.76%
our discount rate, which represents XOM’s specific blend of equity cost and after-tax cost of debt. To
BYP 8.63%
calculate the cost of equity we used three approaches, the Capital Asset Pricing Model (CAPM), the Dividend
Average 8.41%
Growth Model (DGM), and the Bond Yield + Premium Model (BYP). We then averaged these out to find the
weighted total cost of equity, 8.41%. To find the cost of debt, the current yields of all outstanding long-term
bonds are averaged to show the realisitic cost of raising funds in the debt capital markets at the time of this
analysis. Taking the weighted average of the cost of equity and cost of debt yields the WACC, 8.41%.

Future Cash Flow Projections:

Free cash flow quantifies the residual amount of money a company has after accounting for its operations,
operating costs, taxes, net investment and working capital requirements (short-term investment required to
maintain opperatons). Estimating cash flows requires projecting out all of the necessary inputs to the cash
flow statement and then calculating the net free cash flow to equity. To project revenues and costs that affect
free cash flow, we used a historical average method. First, the arithementic average growth rate of 3.29%
was found for the previous five years at Exxon and used to project sales and proceeds from opporations for
the current year and five years forward. All other inputs were projected using a sales ratio method, which
takes historical financial metrics and devides each line item by sales, yielding historical margins. We used
the average margin to projected out future data based on our top-line revenue growth expectation with the
exception of two items which we determined would require adjusted forecasting, “Total Cash and Cash
Equivalents” and “Net property, plant, and equipment (PP&E).” In both of these cases we chose to project
based on individual growth rates as opposed to sales ratios. Historical average ratios do not accurately
represent these two items, but for different reasons. Cash was a valuable commodity during the liquidity
crisis and Exxon put more than two-thirds of their cash reserves (observable from 2008-2009; $31,437 to
$10,693 dropoff). This use of cash to maintain solvency and restore stability to the company represents a
structural change in the companies finances and cannot be expected to bounce back immediately. Cash
reserves take years to build (the last time cash dipped below $11 billion was in 2003) so we used a very

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Equity Research Report - ExxonMobil November 19, 2010
conservative growth rate of 0.42%. This historical average over the past 25 years. We followed a similar
technique for PP&E, initial sales ratio analysis estimated net property, plant and equipment to fall
dramatically in correspondence with the fall from historal sales averages. This does not follow rational
capital budgeting theory and required adjusting the estimation calculation to use a historical growth rate of
5.22%. In the midst of the economic turmoil of 2008-2009, many companies were struggling to stay afloat
and needed to make dramatic changes to remain solvent. Despite a massive drop in oil prices and sales
revenue being cut in half, reducing net property, plant and equipment was not, and still is not a truly viable or
prudent descision. With interest rates at historic lows, the floating-rate bank debt used to finance many of
these expendutures is very affordable and major asset sales are likely to yield low profits and discourage
investors. As we have seen with the XTO acquisition, XOM is attempting to expand its portfolio and
increase total assets under control. We expect that PP&E will grow in line with this assumption at a rate
above sales growth for the near to medium term.

Deriving the XOM share price:

We found the present value of operations to be $398,373,000,000 which was discounted at the WACC.
Adding the value of non-operating assets raisings this estimate to $442,520,000,000. Non-operating assets are
holdings that could be liquidated at some point (either short or long term) without affecting free cash flows.
Exxon has a total of $5.175 Billion in short-term investments and $38.97 Billion total-long term. This sums
to a Total Enterprice Value of $402.1 Billion after removing non-operating liabilities. The value of common
stock net of debt is 392.5 Billion and dividing this by the 5.043 Billion shares outstanding yields an estimated
value per share of $77.84.

Market Multiples Valuation

Valuation Rationale:
Firms within a given industry have similar sales, profit and cash flow patterns and similar required returns.
Therefore, a reasonable value for a firm is its sales, earnings or cash flows times the respective industry ratio.
Using market multiples to value a stock produces an estimate of the stock price and firm value based on an
estimate of these industry multiples.

XOM Comps Selecting Comparable Frims:

Chevron Corp The first step in doing this is selecting appropriate companies to compare to the subject, in our case
Conoco Phillips ExxonMobil. The selection of companies is important because a stronger financial analysis is obtained when
Royal Dutch Shell comparison companies are highly similar. The first step in identifying comparable companies to ExxonMobil
BP Plc is to identify their Standard Industrial Classification, or SIC, code The SIC code is a United States
Hess Corp government system for classifying industries by a four-digit code. ExxonMobil was classified as part of the
Occidental Peteroleum “petroleum refining” industry and thus given the SIC code 2911. 2911 encompasses 335 companies which is
Valero Energy obviously too large and too diverse a group to use in our multiples analysis. As one of the largest
Sunoco Inc corporations in the world, Exxon is obviously a behemoth within its own industry. As such, only the largest
companies with globally diverse operations were chosen. The eight companies chosen were Chevron
Corporation, ConocoPhillips, Royal Dutch Shell, BP, Hess Corporation, Occidental Petroleum, Valero
Energy, and Sunoco Inc. These companies have the highest enterprise values in their industry as well as a
minimum of 10 oils rigs in a minimum of 2 countries.

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Selecting appropriate multiples:
The multiples used in the valuation of ExxonMobil were Sales, Gross Profit, EBITDA, EBIT, and P/E Ratio.
Industry-specific valuation multiples, though desirable, were not available for all companies analyzed. Some
industry-specific multiples that were researched were barrels of oil in reserve, square footage of rigs, and
exploration expenditures. Using publically available information found on their 10-K filings, information on
Sales, Gross Profit, EBITDA, EBIT, and were incorporated. In order to control for the variation in firm size,
a multiple was created by dividing the firm’s enterprise value by each statistic.

Deriving a per share price:

The multiples were averaged for each and multiplied by XOM’s own Sales, Gross Profit, EBITDA, EBIT,
and to create an implied firm value for each. The mean of those was taken to find the average implied firm
value. From this, cash on hand was added and interest bearing debt was subtracted to find an estimated value
of equity. For Exxon, we found an estimated value of $380.6 Billion. Dividing this by the number of shares
outstanding, 5.042 Billion, yields an estimated value per share of $75.48.

Investment Risks
Hold rating considers both moderate upside and downside risks.
The share price of ExxonMobil’s public equity shares as reported Google Finance was $70.48 at the time of
this analysis, November 15th, 2010. This represents an 8% discount to our average estimated 12 month price
target $76.50. We maintain a Hold rating due to the significant uncertainty about the XTO merger impact as
well as the stagnant natural gas market. Prinicipal upside risks stem from the possibility that XTO results in
higher than expected EPS accretion and manages to cut costs in ways previously not thought possible.
Additionally, major developments in their chemical business could lead to higher long-term profits.
Alternatively, a major upswing in global demand and oil prices could leave Exxon struggling to keep up with
other Super Majors who use an average of 35% debt and will see much higher earnings flow to equity.
Further risk stems from the recent reaction to the Deepwater Horizon oil spill from US politions as well as
the possible for expanded clean energy incentives and higher taxes on envirionmental-damaging practices.
Lastly is the simple fact that, despite being one of the largest publicly traded companies in the world, they
still face enormous competition from other producers globally and have a minimal 3% market share.

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Equity Research Report - ExxonMobil November 19, 2010
Figure 1: Income Statement
2004 2005 2006 2007 2008 2009
Revenues and other income
Sales and misc. operating revenue 291,252 358,955 365,467 390,328 459,579 301,500
Income from equity affiliates 4,961 7,583 6,985 8,901 11,081 7,143
Other income 1,822 4,142 5,183 5,323 6,699 1,943
Total Revenue 298,035 370,680 377,635 404,552 477,359 310,586

Costs and other deductions

Crude oil purchases 139,224 185,219 182,546 199,498 249,454 152,806
Production Expenses 23,225 26,819 29,528 31,885 37,905 33,027
Total Cost of Revenue 162,449 212,038 212,074 231,383 287,359 185,833
Gross Profit 135,586 158,642 165,561 173,169 190,000 124,753

Opperating Expenses
SG&A Expenses 13,849 14,402 14,273 14,890 15,873 14,735
Depreciation and depletion 9,767 10,253 11,416 12,250 12,379 11,917
Exploration expenses 1,098 964 1,181 1,469 1,451 2,021
Interest expense 638 496 654 400 673 548
Sales-based taxes 27,263 30,742 30,381 31,728 34,508 25,936
Other taxes and duties 40,954 41,554 39,203 40,953 41,719 34,819
Total Opperating Costs 93,569 98,411 97,108 101,690 106,603 89,976

Income before income taxes 41,241 59,432 67,402 71,479 83,397 34,777
Income taxes (15,911) (23,302) (27,902) (29,864) (36,530) (15,119)
Other Income (776) (799) (1,051) (1,005) (1,647) (378)
Net income to ExxonMobil 24,554 35,331 38,449 40,610 45,220 19,280

EPS (dollars) 3.91 5.76 6.68 7.31 8.70 3.99

Diluted EPS (dollars) 3.89 5.71 6.62 7.26 8.66 3.98
Source: ExxonMobile Investor Relations,SEC Edgar Filings

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Equity Research Report - ExxonMobil November 19, 2010
Figure 2: Balance Sheet
2005 2006 2007 2008 2009
Assets
Current assets
Total Cash and Cash Equivalents 28,671 28,244 34,500 32,007 10,862
Receivables 27,484 28,942 36,450 24,702 27,645
Inventories 9,321 10,714 11,089 11,646 11,553
Other current assets 7,866 7,877 3,924 3,911 5,175
Total current assets 73,342 75,777 85,963 72,266 55,235
Long-term investments
Net property, plant and equipment 107,010 113,687 120,869 121,346 139,116
Other long-term assets 27,983 29,551 35,250 34,440 38,972
Total Long-term investments 134,993 143,238 156,119 155,786 178,088

Total assets 208,335 219,015 242,082 228,052 233,323

Liabilities and Shareholders' Equity

Current liabilities
Accounts payable 44,536 47,115 55,929 46,700 49,585
Short-term debt 1,771 1,702 2,383 2,400 2,476
Total current liabilities 46,307 48,817 58,312 49,100 52,061
Non-current liabilities
Long-term debt 6,220 6,425 7,183 7,025 7,129
Deferred taxes liabilities 20,878 20,851 22,899 19,726 23,148
Minority interest 0 0 4,282 4,558 4,823
Other long-term liabilities 23,744 28,858 27,644 34,678 35,593
Total non-current liabilities 50,842 56,134 62,008 65,987 70,693

Total liabilities 97,149 105,171 120,320 115,087 122,754

Stockholders' equity
Additional paid-in capital 4,477 4,786 4,933 5,314 5,503
Retained earnings 163,335 195,207 228,518 265,680 276,937
Treasury stock (55,347) (83,387) (113,678) (148,098) (166,410)
Other Stockholder Equity (1,279) (2,762) 1,989 (9,931) (5,461)

Total Stockholders' equity 111,186 113,844 121,762 112,965 110,569

Total liabilities and stockholders'
equity 208,335 219,015 242,082 228,052 233,323

Source: ExxonMobile Investor Relations,SEC Edgar Filings

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Equity Research Report - ExxonMobil November 19, 2010
Figure 3: Cash Flow Statement
2005 2006 2007 2008 2009
Cash Flows From Operating Activities
Net income 36,130 39,500 40,610 46,867 19,658
Depreciation & amortization 10,253 11,416 12,250 12,379 11,917
Investment/asset impairment charges 0 0 0 (63) 731
Deferred income taxes (429) 1,717 124 1,399 0
Inventory (434) (1,057) 72 (1,285) 459
Other working capital 4,106 594 1,067 2,717 (1,618)
Other non-cash items (1,481) (2,884) (2,121) (2,289) (2,709)
Net earnings by operating activities 48,145 49,286 52,002 59,725 28,438

Cash Flows From Investing Activities

Investment in property, plant, and equip (13,839) (15,462) (15,387) (19,318) (22,491)
Property, plant, and equip reductions 6,036 0 0 0 0
Acquisitions, net 0 3,080 4,204 5,985 1,545
Purchases of investments 0 (2,604) (3,684) (4,608) (2,768)
Sales/Maturities of investments 0 0 144 1,868 571
Other investing activities (2,467) 756 4,995 574 724
Net cash used for investing activities (10,270) (14,230) (9,728) (15,499) (22,419)

Cash Flows From Financing Activities

Debt issued 0 0 0 1,289 1,561
Debt repayment 0 0 0 (1,816) (1,714)
Common stock issued 941 1,173 1,079 753 752
Repurchases of treasury stock (18,221) (29,558) (31,822) (35,734) (19,703)
Cash dividends paid (7,478) (7,867) (7,910) (8,433) (8,303)
Other financing activities (2,183) 42 308 (86) 124
Net cash used for financing activities (26,941) (36,210) (38,345) (44,027) (27,283)

Effect of exchange rate changes (787) 727 1,808 (2,743) 520

Net change in cash 10,147 (427) 5,737 (2,544) (20,744)

Free Cash Flow

Operating cash flow 48,138 49,286 52,002 59,725 28,438
Capital expenditure (13,839) (15,462) (15,387) (19,318) (22,491)
Free cash flow 34,299 33,824 36,615 40,407 5,947
Source: ExxonMobile Investor Relations,SEC Edgar Filings

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Equity Research Report - ExxonMobil November 19, 2010
Figure 4: DCF Analysis
2009 2010 2011 2012 2013 2014 2015
Net Sales 310,586 320,797 331,345 342,239 353,491 365,113 377,117
Cost of products sold 185,833 182,380 188,376 194,569 200,966 207,574 214,398
Gross profit 124,753 138,418 142,969 147,669 152,525 157,539 162,719
Operating expenses:
SG&A expenses 14,735 12,457 12,866 13,289 13,726 14,177 14,643
Depreciation and depletion 11,917 9,783 10,104 10,436 10,780 11,134 11,500
Exploration expenses 2,021 1,213 1,351 1,451 1,538 1,698 1,551
Interest expense 548 464 488 480 539 556 551
Sales-based taxes 25,936 25,510 26,066 26,844 27,748 29,221 29,710
Other taxes and duties 34,819 33,148 33,511 34,571 35,700 38,117 38,322
Operating income 34,777 55,844 58,582 60,598 62,495 62,636 66,442
Taxes and Other Income (15,497) (23,416) (24,565) (25,410) (26,205) (26,265) (27,861)
Net Operating Profit After Taxes 19,280 32,427 34,017 35,188 36,289 36,372 38,581

Operating current assets:

Total Cash and Cash Equivalents 10,862 10,907 10,953 10,999 11,045 11,091 11,137
Receivables 27,645 24,486 25,291 26,122 26,981 27,868 28,785
Inventories 11,553 9,144 9,445 9,755 10,076 10,407 10,749
Total Current Operating Assets 50,060 44,537 45,689 46,877 48,102 49,367 50,671

Total Current Operating Liabilities: 44,536 41,103 42,454 43,850 45,292 46,781 48,319

Net operating working capital 5,524 3,434 3,234 3,026 2,810 2,586 2,352
Net property, plant, and equipment 139,116 146,377 154,017 162,055 170,513 179,413 188,777
Operating capital 144,640 149,811 157,251 165,081 173,323 181,998 191,129
Net investment in operating capital na 5,171 7,440 7,830 8,242 8,675 9,131

Free cash flow na 27,256 26,578 27,357 28,047 27,697 29,451

Assumed perpetual growth rate 1.50%

WACC 8.41%
Horizon value 432,548

FCF + Horizon value 26,578 27,357 28,047 27,697 461,999

Present value of operations 398,373

Add non-operating assets:
Short-term investments 5,175
Long-term investments 38,972
442,520
Less non-operating liabilities
Minority interest 4,823
Other long-term liabilities 35,593
Enterprise value 402,104
Less interest-bearing debt:
Short-term debt 2,476
Long-term debt 7,129
Total value of common stock 392,499
Millions of shares outstanding 5,043
Estimated value per share $77.84

Source: SEC Edgar Filings, Adacemic Analysis and Projection

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Equity Research Report - ExxonMobil November 19, 2010
Figure 5: Multiple Analysis
Equity Debt Pref. Equity Minority Cash MVIC
Chevron Corp 170,774.70 10,608.00 - 647.00 8,822.00 171,054.70
Conoco Phillips 91,194.77 28,653.00 - 590.00 542.00 104,499.80
Royal Dutch Shell 126,971.20 35,033.00 - 1,704.00 9,719.00 239,135.40
BP Plc 84,320.64 34,627.00 21.00 500.00 8,588.00 161,537.40
Hess Corp 22,840.41 4,467.00 - 144.00 1,362.00 26,169.41
Occidental Peteroleum 71,304.41 2,796.00 - 78.00 1,230.00 71,843.41
Valero Energy 11,052.43 7,400.00 - - 825.00 16,736.43
Sunoco Inc 4,616.99 2,464.00 - 562.00 377.00 6,788.99
Sales Gross Margin Gross profit EBITDA EBIT # of Refineries
Chevron Corp 159,293 13% 20,191 26,432 14,322 15
Conoco Phillips 136,016 9% 11,745 17,606 8,311 19
Royal Dutch Shell 278,188 18% 49,812 29,079 14,621 47
BP Plc 239,272 22% 52,298 33,392 21,286 26
Hess Corp 29,614 16% 4,594 4,181 1,927 4
Occidental Peteroleum 15,403 42% 6,493 7,993 4,876 9
Valero Energy 67,271 1% 573 826 (701) 15
Sunoco Inc 28,804 3% 776 598 77 6
MVIC Sales x Gross Profit x EBITDA x EBIT x # Refineries x
Chevron Corp 171,054.70 1.1x 8.5x 6.5x 11.9x 11403.6x
Conoco Phillips 104,499.80 0.8x 8.9x 5.9x 12.6x 5500.0x
Royal Dutch Shell 239,135.40 0.9x 4.8x 8.2x 16.4x 5088.0x
BP Plc 161,537.40 0.7x 3.1x 4.8x 7.6x 6213.0x
Hess Corp 26,169.41 0.9x 5.7x 6.3x 13.6x 6542.4x
Occidental Peteroleum 71,843.41 4.7x 11.1x 9.0x 14.7x 7982.6x
Valero Energy 16,736.43 0.2x 29.2x 20.3x -23.9x 1115.8x
Sunoco Inc 6,788.99 0.2x 8.7x 11.4x 88.2x 1131.5x
Average 1.2x 10.0x 9.0x 17.6x 5,622.1x
ExxonMobil 275,564.0 42,988 38,156.0 26,239 37
Valuation 324,108 429,757 344,980 462,691 208,018
Average Implied Value 390,384
Add excess cash 169
Less interest bearing debt 9,605
Estimated value of equity 380,610
# shares outstanding 5,043
Value per share $75.48

Source: SEC Edgar Filings, Adacemic Analysis

Disclosures:
Ownership and material conflicts of interest:
The authors of this report, or their household members, do not hold a financial interest in the securities of this company.
The authors of this report, or their household members, do not know of the existence of any conflicts of interest that might bias the content or publication of
this report.
Receipt of compensation:
Compensation of the authors of this report is not based on investment banking revenue.
Position as a officer or director:
The authors, or their household members, do not serve as officers, directors or advisory board members of the subject company.
Market making:
The authors do not act as market makers in the subject company’s securities.
Ratings guide:
Banks rate companies as either a BUY, HOLD or SELL. A BUY rating is given when the security is expected to deliver absolute returns of 15% or greater
over the next twelve month period, and recommends that investors take a position above the security’s weight in the S&P 500, or any other relevant index.
A SELL rating is given when the security is expected to deliver negative returns over the next twelve months, while a HOLD rating implies flat returns over
the next twelve months.
Disclaimer:
The information set forth herein has been obtained or derived from sources generally available to the public and believed by the authors to be reliable, but
the authors do not make any representation or warranty, express or implied, as to its accuracy or completeness. The information is not intended to be used as
the basis of any investment decisions by any person or entity. This information does not constitute investment advice, nor is it an offer or a solicitation of an
offer to buy or sell any security. This report should not be considered to be a recommendation by any individual affiliated with Northeastern University with
regard to this company’s stock.

Corporate Finance 10