July 28, 2012 Exxon Mobil Corp. XOM-US USD 85.24 Industry Group: 52 Week Range: Market Cap: Integrated Oil USD 67.03 - USD 87.94 USD 398,596.00 Mil. Company numbers are TTM (trailing twelve months) or latest available. Share price data is previous day's close unless otherwise stated. Overview Data as of Last Available Filing Annual: Semi Annual: Quarterly: 2011-12-31 N/A 2012-03-31 Peer Group Royal Dutch Shell PLC (CL B) (RDSB-GB) Chevron Corp. (CVX-US) BP PLC ADS (BP-US) Total S.A. ADS (TOT-US) China Petroleum & Chemical Corp. (386-HK) Occidental Petroleum Corp. (OXY-US) ConocoPhillips (COP-US) Exxon Mobil Corp. (XOM-US) ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved • Exxon Mobil Corp. currently trades at a higher Price/Book ratio (2.5) than its peer median (1.2). • XOM-US outperforms its peers with a relatively high operating performance and the market also expects faster growth relative to its peers • XOM-US has relatively high profit margins while operating with median asset turns. • Compared with its chosen peers, changes in the company's annual earnings are better than the changes in its revenue, implying better than median cost control and/or some economies of scale. • XOM-US's return on assets currently and over the past five years suggest that its relatively high operating returns are sustainable. • The company's relatively high gross margin suggests some differentiation with pricing advantages versus peers. • While XOM-US's revenues growth has been around the peer median in recent years, the market seems to see faster growth ahead and gives its shares a higher than peer median PE ratio. • The company's level of capital investment seems appropriate to support the company's growth. • XOM-US has the financial and operating capacity to borrow quickly. Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 1 Share Price Performance Relative outperformance over the last year has faded more recently. XOM-US's change in share price of 0.8% for the last 12 months is better than its peer median. However, the 30day trend in its share price performance of 4.9% is now around the peer median suggesting that the company's recent performance has faded relative to peers. Share Price Performance Share Price % Change:1 2 months Fading XOM- US RDSB- GB 0 Leading CVX- US COP- US - 10 386- HK BP- US - 20 OXY- US TOT- US Lagging - 30 0 Rising 2.5 5 7.5 Share Price % Change:3 0 days Share Price Perform ance Peer Median 30 Day Share Price Change % Peer Median 12 Month Share Price Change % Drivers of Valuation: Operations or Expectations? Valuation (P/B) = Operating Advantage (ROE) * Growth Expectations (P/E) Price/Book or P/B valuation is a function of the observed operating performance of the company as measured by ROE multiplied by the market's current implied growth expectation as measured by the P/E. We define Valuation Premium as the difference between the Market Capitalization and Book Value of Equity, and as a proxy for the NPV of cash-flow associated to the Book Equity investment. Based on the analysis of the relative contribution to the P/B valuation of "Operations ROE" vs. "Expectations P/E", we quickly garner insight into peers comparative performance and the market's assessment of their strategies are they just "Harvesting" the current business pipeline or are investors betting on a strategic "Turnaround"? XOM-US has an Outperforming profile relative to peers. XOM-US achieved a better operating performance than the median of its chosen peers (ROE of 25.8% compared to the peer median ROE of 18.6%) and the market still expects faster growth from it than from those peers (PE of 10.3 compared to peer median of 7.1). The company currently trades at a higher Price/Book ratio of 2.5 compared to its peer median of 1.2. ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 2 Valuation Drivers Operating Advantage: ROE % Harvesting Outperforming XOM- US BP- US 25 20 CVX- US OXY- US RDSB- GB TOTCOP-US US 386- HK 15 10 Challenged 5 Turnaround 4 6 8 10 Growth Advantage: P/ E Valuation Drivers Peer Median P/ E Peer Median ROE % XOM-US has maintained its Outperforming profile from the recent year-end. XOM-US's ROE is less than (but within one standard deviation of) its five-year average ROE of 28.2%. Though its ROE decreased to 25.8% from 27.3% (in 2011), its peer median remained relatively stable during this period at 18.6%. Relative to peers, ROE fell 1.1 percentage points. XOM-US's current PE is less than its average year-end PE of 11.9 over the last five year-ends. PE increased to 10.3 from 9.8 (at recent year-end 2011) unlike its peer median, which decreased during this period to 7.1 from 7.9. Combining both ROE and PE suggests that XOM-US's current PB (price/book) of 2.5 is less than its average year-end PB of 3.1 over the last five year-ends. ROE % (On Common Equity) Price To Earnings 15 30 12.5 10 20 7.5 10 2007 2008 2009 XOM- US 2010 2011 Peer Median ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved TTM 5 2007 2008 2009 XOM- US 2010 2011 TTM Peer Median Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 3 Operations Diagnostic XOM-US has relatively high profit margins while operating with median asset turns. The company attempts to achieve high profit margins (currently 9.0% vs. peer median of 6.7%) through differentiated products. It currently operates with peer median asset turns of 1.3x. Operating Advantage Asset Efficiency: Sales/ Total Assets 2.5 Volume 386- HKDriven Dominant 2 COP- US RDSBGB BP- US XOM- US 1.5 TOT- US CVX- US 1 OXY- US 0.5 Problematic 0 Margin Driven 5 10 15 20 25 30 Net Margin %: NI/ Sales Operating Advantage Peer Median Net Margin % Peer Median Sales/ Total Assets (x ) XOM-US has maintained its relatively high net margin profile from the recent year-end. XOM-US's net margin is similar to its five-year average net margin of 9.5%. Like its asset turnover trend, net margin has remained relatively stable for both the company (9.0%) and the peer median (6.7%) relative to 2011. XOM-US's asset turnover is similar to its five-year average asset turnover of 1.4. Compared to 2011, asset turnover has remained relatively stable for both the company (1.3) and the peer median (1.3). Overall, asset turnover and net margin trends suggest that XOM-US's ROA at 12.0% is less than (but within one standard deviation of) its five-year average ROA of 13.9%. Net Margin % Sales/ Total Assets (x ) 12 2 1.5 10 1 8 0.5 6 2007 2008 2009 XOM- US 2010 2011 Peer Median ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved TTM 0 2007 2008 2009 XOM- US 2010 2011 TTM Peer Median Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 4 Earnings Leverage XOM-US has achieved relatively better changes in earnings than in revenues. Changes in the company's revenues are in-line with its peers (annual revenue changed by 26.9%) but its earnings performance has been better -- its annual earnings changed by 34.8% compared to the peer median of 28.9%, implying that it has better cost control relative to its peers. XOM-US currently converts every 1% of change in revenue into 1.3% of change in annual reported earnings. Earnings Leverage Earnings Focus RDSB- GBOXY- US CVX- US XOM- US TOT- US COP- US Earnings Growth %: YoY 50 Leader 386- HK 0 - 50 - 100 BP- US Laggard - 150 Revenue Focus 20 30 40 Revenue Growth %: YoY Earnings Leverage Peer Median Revenue Growth (% YOY) Peer Median Earnings Growth (% YOY) Sustainability of Returns XOM-US's relative returns suggest sustainable outperformance. XOM-US's return on assets is above its peer median both in the current period (12.0% vs. peer median 8.7%) and also over the past five years (13.9% vs. peer median 8.5%). This performance suggests that the company's relatively high operating returns are sustainable. ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 5 Sustainable Operating Advantage 15 Eroding Sustainable XOMUS ROA %: 5 Year Avg 12.5 OXY- US 10 CVX- US TOT- US RDSB- GB 386- HK 7.5 BP- US 5 COP- US 2.5 Questionable 0 Improving 5 7.5 10 12.5 ROA %: Latest Sustainable Operating Advantage Peer Median 5Y ROA % Peer Median 1Y ROA % Drivers of Margin Relatively high gross margin suggests some differentiation with pricing advantages. The company's comparatively high gross margin of 28.0% versus peer median of 22.2% suggests that it has a differentiated strategy with pricing advantages. However, XOM-US's pre-tax margin of 12.7% is around the peer median which, combined with the healthy gross margin, suggests higher operating costs relative to peers. Drivers of Margins Differentiation (Gross Margin%) Differentiated; High Cost Differentiated; Low OXY-Cost US 60 40 CVX- US XOM- US TOT- US 20 COP- US US GB 386- HKBPRDSB- Commodity; High Cost 0 10 Commodity; Low Cost 20 30 40 Cost Controls (Pre Tax Margin%) Margin Drivers Peer Median Pre- Tax Margin % ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Peer Median Gross Margin % Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 6 XOM-US has maintained its relatively high gross margin profile from the recent year-end. XOM-US's gross margin is its lowest relative to the last five years and compares to a high of 35.1% in 2007. While its gross margin decreased to 28.0% from 28.8% (in 2011), its peer median increased during this period to 22.2% from 17.5%. Gross margin fell 5.5 percentage points relative to peers. XOM-US's pre-tax margin is less than (but within one standard deviation of) its five-year average pre-tax margin of 14.0%. The decrease in its pre-tax margin to 12.7% from 13.4% (in 2011) was also accompanied by a decrease in its peer median during this period to 11.1% from 11.7%. Gross Margin % Pre- Tax Margin % 35 17.5 30 15 25 12.5 20 10 15 2007 2008 2009 XOM- US 2010 2011 TTM 7.5 2007 2008 Peer Median 2009 XOM- US 2010 2011 TTM Peer Median Growth Expectations The market is likely factoring in some chance for growth improvement. While XOM-US's revenues growth has been around the peer median in recent years (16.3% vs. 16.2% respectively for the past three years), the market gives its shares a higher than peer median PE ratio of 10.3. The market seems to see faster growth ahead. ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 7 Historical Growth: 3 Year Revenue Growth % Growth Ex pectations Ex pected Decline COP- US 20 Superior 386- HK RDSB- GB XOMOXYUS US TOT- US CVX- US 10 0 BP- US Substandard - 10 Strategic Play 4 6 8 10 Investor Ex pectations: P/ E Growth Ex pectations Peer Median P/ E Peer Median 3Y Revenue Growth (CAGR %) Capital Investment Strategy XOM-US's level of capital investment seems appropriate given the company's growth. XOM-US's annualized rate of change in the capital of 12.6% over the past three years is higher than its peer median of 8.2%. This investment has generated an above peer median return on capital of 20.3% over the same three years. Evidently, the relatively high capital investment was successful given the the relatively strong growth in its returns. Capital Investment Strategy XOMUS Supporting Growth Milking the Business 20 ROIC %: 3 Year Avg CVX- US BP- US 15 OXY- US TOT- US COP- US RDSB- GB 386- HK 10 5 Maintenance Mode 0 Betting on Future 0 5 10 Capital Growth % (3 Year) Capex Strategy Peer Median 3Y Capital Growth (CAGR %) Peer Median 3Y Average ROIC % ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 8 Leverage & Liquidity XOM-US has the financial and operating capacity to borrow quickly. With debt at a relatively low 2.7% of its enterprise value compared to an overall benchmark of 25% (Note: The peer median is currently 10.9%), and a well-cushioned interest coverage level of 162.1x, XOM-US can probably borrow quickly. We classify the company as Quick & Able in terms of its capacity to raise additional debt. All 7 peers for the company have an outstanding debt balance. Borrowing Capacity Liquidity: EBIT/ Interest Ex pense (x ) 750 Quick CVX- USand Able Some Capacity 500 250 XOM- US OXY- US RDSB- GBCOPBP-TOTUS US 386HK 0 Limited Flex ibility - 250 0 10 Constrained 20 30 40 50 Leverage: Debt/ Enterprise Value (%) Debt Capacity Leverage Threshold Interest Coverage Threshold XOM-US has maintained its Quick & Able profile from the recent year-end. XOM-US's interest coverage is its highest relative to the last five years and compares to a low of 27.0x in 2009. While its interest coverage increased to 162.1x from 64.4x (in 2011), its peer median decreased during this period to 29.1x from 34.0x. Interest coverage rose 102.5 points relative to peers. XOM-US's debt-EV is similar to last year's high of 3.0%, which compares to a low of 1.6% in 2007. Though its debt-EV has remained relatively stable at 2.7% compared to 2011, its peer median has increased to 10.9% from 9.9% during this period. Relative to peers, debt-EV fell 1.2 percentage points. ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 9 Interest Coverage (x ) Debt to Enterprise Value % 30 150 20 100 10 50 0 2007 2008 XOM- US 2009 2010 Peer Median 2011 TTM 0 2007 Threshold (2.5x ) 2008 XOM- US 2009 2010 Peer Median 2011 TTM Threshold (25%) Key Valuation Items Market Cap(mn) Price / Book Price / Earnings Dividend Yield (%) Royal Dutch Shell PLC (CL B) 222,812.2 1.3 7.3 4.7 Chevron Corp. 209,275.0 1.7 7.8 3.0 BP PLC ADS 126,135.0 1.2 5.3 4.3 Total S.A. ADS 95,927.5 1.0 5.8 6.0 China Petroleum & Chemical Corp. 75,649.8 1.0 6.9 4.0 Occidental Petroleum Corp. 67,740.4 1.7 10.0 2.3 ConocoPhillips 67,325.0 1.0 5.9 4.7 Exxon Mobil Corp. 398,596.0 2.5 10.3 2.3 Peer Median 111,031.3 1.2 7.1 4.2 Best In Class 398,596.0 2.5 10.3 6.0 Revenues (mn) Gross Margin (%) Pre-Tax Margin (%) Net Margin (%) Company Revenues & Margins Company Royal Dutch Shell PLC (CL B) 480,328.7 15.1 9.4 6.4 Chevron Corp. 238,878.0 34.1 18.0 11.4 BP PLC ADS 370,190.6 16.7 8.3 6.4 Total S.A. ADS 237,217.6 25.0 15.4 7.0 China Petroleum & Chemical Corp. 381,230.2 15.3 4.1 3.0 24,559.0 68.3 43.5 27.7 ConocoPhillips 244,563.0 19.4 8.0 5.0 Exxon Mobil Corp. 442,887.0 28.0 12.7 9.0 Peer Median 307,376.8 22.2 11.1 6.7 Best In Class 480,328.7 68.3 43.5 27.7 Occidental Petroleum Corp. ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 10 Key Assets (% of Revenues) Capital (%) Goodwill & Intangibles(%) Working Capital (%) Cash & Equivalents (%) Royal Dutch Shell PLC (CL B) 44.2 0.9 3.8 3.1 Chevron Corp. 56.4 1.9 8.1 8.3 BP PLC ADS 41.8 8.5 0.1 5.9 Total S.A. ADS 57.8 7.4 10.7 8.3 China Petroleum & Chemical Corp. 29.5 0.3 (3.6) 1.1 181.7 0.0 10.4 15.3 ConocoPhillips 38.8 1.7 1.4 4.2 Exxon Mobil Corp. 39.0 N/A (0.6) 4.3 Inventory DSO Receivable DSO Payable DSO Cash Conversion Cycle* Company Occidental Petroleum Corp. Key Working Capital Items Company Royal Dutch Shell PLC (CL B) 24.3 60.9 49.9 67.4 9.8 37.0 34.1 22.0 BP PLC ADS 26.7 41.8 51.1 (10.4) Total S.A. ADS 37.4 63.8 45.3 106.8 China Petroleum & Chemical Corp. 26.9 11.4 23.8 14.5 Occidental Petroleum Corp. 17.2 82.5 80.4 25.0 8.0 26.8 30.7 (8.3) Exxon Mobil Corp. 12.3 30.7 38.3 (18.4) Peer Median 20.8 39.4 41.8 18.2 Best In Class 8.0 11.4 80.4 (18.4) Chevron Corp. ConocoPhillips * Inventory DSO + Receivable DSO - Payable DSO ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 11 Cash Management Indicators Company Current Assets DSO Current Cash Float DSO* Liabilities DSO Excess Cash DSO** Royal Dutch Shell PLC (CL B) 97.1 83.3 15.7 2.8 Chevron Corp. 81.0 51.6 2.4 23.1 BP PLC ADS 83.5 83.2 (52.9) 15.4 137.7 98.6 24.1 22.6 44.9 58.1 (16.7) (3.8) 167.8 130.0 (1.7) 48.7 ConocoPhillips 54.2 49.0 (44.4) 5.1 Exxon Mobil Corp. 61.1 63.3 (66.9) 6.0 Peer Median 82.3 73.3 (9.2) 10.7 Best In Class 44.9 130.0 (66.9) (3.8) Debt/Enterprise Value (%) Current Ratio Interest Coverage (x) Cash Flow To Total Debt (%) Royal Dutch Shell PLC (CL B) 8.2 1.2 28.0 115.9 Chevron Corp. 3.5 1.6 696.5 412.9 BP PLC ADS 14.2 1.1 22.7 86.5 Total S.A. ADS 16.1 1.4 30.3 70.6 China Petroleum & Chemical Corp. 16.5 0.8 6.3 64.8 5.7 1.5 96.9 207.5 13.5 1.0 20.3 79.0 2.7 1.0 162.1 342.0 Peer Median 10.9 1.1 29.1 101.2 Best In Class 2.7 1.6 696.5 412.9 Operating Cash Flow (%) Capex (%) Interest Expense (%) Dividends (%) 8.5 6.0 0.3 1.4 16.6 11.6 0.0 2.6 4.7 4.8 0.3 0.7 11.1 8.9 0.4 3.0 6.1 5.8 0.4 0.8 52.2 35.0 0.5 5.8 8.9 6.0 0.4 1.5 13.0 7.2 0.1 2.0 Total S.A. ADS China Petroleum & Chemical Corp. Occidental Petroleum Corp. * CurrAssetsDSO - CurrLiabDSO - CashDSO ** Excess Cash = Cash & Eqvts - 2%*Revenue Key Liquidity Items Company Occidental Petroleum Corp. ConocoPhillips Exxon Mobil Corp. Key Cash Flow Items (% of Revenues) Company Royal Dutch Shell PLC (CL B) Chevron Corp. BP PLC ADS Total S.A. ADS China Petroleum & Chemical Corp. Occidental Petroleum Corp. ConocoPhillips Exxon Mobil Corp. ©Analytixinsight, Inc 2011 Patents Pending. All Rights Reserved Exxon Mobil Corp. | Fundamental Analysis | July 28, 2012 12 Company Profile Exxon Mobil Corp. engages in the exploration and production of natural gas and crude oil. Its principal business is energy, involving exploration for production of, crude oil and natural gas, manufacture of petroleum products and transportation and sale of crude oil, natural gas and petroleum products. ExxonMobil is a manufacturer and marketer of commodity petrochemicals, including olefins, aromatics, polyethylene and polypropylene plastics and a wide variety of specialty products. It also has interests in electric power generation facilities. Exxon Mobil has several divisions and hundreds of affiliates that include ExxonMobil, Exxon, Esso and Mobil. It operates through three reportable business segments: Upstream, Downstream and Chemical. The Upstream segment is organized and operates to explore for and produce crude oil and natural gas. The Downstream segment is organized and operates to manufacture and sell petroleum products. It encompasses global network of manufacturing plants, transportation systems, and distribution centers provides fuels, lubricants, and other high-value products and feedstocks to customers. The Chemical segment is organized and operates to manufacture and sell petrochemicals. It business supplies olefins, polyolefins, aromatics, and a wide variety of other petrochemicals. The company was founded by John D. Rockefeller in 1882 and is headquartered in Irving, TX. Disclaimer The information presented in this report has been obtained from sources deemed to be reliable, but AnalytixInsight does not make any representation about the accuracy, completeness, or timeliness of this information. 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