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 significantly improve in 2020. Although we project funds from operations (FFO) to debt to be in the 45% to 50% range and debt to EBITDA to be about 1.7x in 2019, we estimate these measures will improve to 55% to 60% and 1.2x to 1.5x, respectively, in 2020 as oil and natural production increases and refining margins improve. Also, although Exxon generated positive discretionary cash flow (DCF; cash flow after capital spending, dividends and share repurchases) in 2017 and 2018, we expect it to post negative DCF

...Massive and diverse proved reserve base and production volumes, and geographically diversified chemical and refining operations limit financial, operating, environmental, and regulatory risk. Exxon Mobil Corp. 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...

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