Exxon Mobil Corp.

The negative outlook reflects S&P Global Ratings' view that Exxon Mobil Corp.'s current financial leverage is high for the rating, as well as the potential for a downgrade if credit measures fail to meaningfully improve over the next year. Although we project funds from operations (FFO) to debt to improve to 65% and debt to EBITDA to improve to around 1.1x in the second half of 2018 and 2019, we estimate these measures will backtrack to 60% and 1.2x, respectively, in 2020 as oil prices decline under our price deck assumptions. Also, after significant spending in 2015 and 2016, Exxon generated positive discretionary cash flow (DCF; after capital spending and dividends) in 2017, and we expect positive DCF through 2019,

...Massive and diverse proved reserve base and production volumes, and geographically diversified chemical and refining operations limit financial, operating, environmental, and regulatory risk. ExxonMobil has outstanding competitive positions in all facets of the oil and gas industry. Its far-reaching, highly diversified global operations in the upstream, downstream, and petrochemical sectors provides a measure of cash flow stability despite the volatile nature of each industry. ExxonMobil's diverse operating base also limits the impact of a localized environmental incident, tighter regulation, or community opposition. The size of the company's operating base keeps costs low. ExxonMobil's size and scale in the upstream, downstream, and petrochemical industries affords significant economies of scale in each segment, and allows it to invest a portion of its capital in long-term projects, which may not generate positive cash flows for several years. Vertical integration also provides opportunities....

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