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Economic value added or economic profit is the difference between revenues and costs,where costs include not only expenses, but also cost of capital.

Economic Profit
Net Operating Profit after Taxes (NOPAT)
Cash Operating Taxes
Invested Capital
Cost of Capital
Economic Spread Ratio
Economic Profit Margin

Exxon Mobil Corp., economic profit calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net operating profit after taxes (NOPAT)¹	37,855)	62,749)	32,736)	(34,098)	16,404)
Cost of capital²	12.48%	12.55%	11.84%	10.62%	11.31%
Invested capital³	307,196)	297,049)	272,673)	273,920)	303,501)

Economic profit⁴	(475)	25,474)	442)	(63,193)	(17,924)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ NOPAT. See details »

² Cost of capital. See details »

³ Invested capital. See details »

⁴ 2023 Calculation
Economic profit = NOPAT – Cost of capital × Invested capital
= 37,855 – 12.48% × 307,196 = -475

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Item	Description	The company
Economic profit	Economic profit is a measure of corporate performance computed by taking the spread between the return on invested capital and the cost of capital, and multiplying by the invested capital.	Exxon Mobil Corp. economic profit increased from 2021 to 2022 but then decreased significantly from 2022 to 2023.

Exxon Mobil Corp., NOPAT calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Net income (loss) attributable to ExxonMobil	36,010)	55,740)	23,040)	(22,440)	14,340)
Deferred income tax expense (benefit)¹	944)	3,583)	(44)	(8,052)	(675)
Increase (decrease) in reserves²	(299)	30)	66)	69)	5)
Increase (decrease) in LIFO reserve³	(1,000)	900)	8,600)	(4,300)	1,500)
Increase (decrease) in restructuring reserves⁴	—)	(77)	(326)	403)	—)
Increase (decrease) in equity equivalents⁵	(355)	4,436)	8,296)	(11,880)	830)
Interest expense	849)	798)	947)	1,158)	830)
Interest expense, operating lease liability⁶	234)	134)	119)	150)	182)
Adjusted interest expense	1,083)	932)	1,066)	1,308)	1,012)
Tax benefit of interest expense⁷	(228)	(196)	(224)	(275)	(213)
Adjusted interest expense, after taxes⁸	856)	736)	842)	1,033)	800)
Net income (loss) attributable to noncontrolling interest	1,344)	1,837)	558)	(811)	434)
Net operating profit after taxes (NOPAT)	37,855)	62,749)	32,736)	(34,098)	16,404)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Elimination of deferred tax expense. See details »

² Addition of increase (decrease) in reserves.

³ Addition of increase (decrease) in LIFO reserve. See details »

⁴ Addition of increase (decrease) in restructuring reserves.

⁵ Addition of increase (decrease) in equity equivalents to net income (loss) attributable to ExxonMobil.

⁶ 2023 Calculation
Interest expense on capitalized operating leases = Operating lease liability × Discount rate
= 6,010 × 3.90% = 234

⁷ 2023 Calculation
Tax benefit of interest expense = Adjusted interest expense × Statutory income tax rate
= 1,083 × 21.00% = 228

⁸ Addition of after taxes interest expense to net income (loss) attributable to ExxonMobil.

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Item	Description	The company
NOPAT	Net operating profit after taxes is income from operations, but after removement of taxes calculated on cash basis that are relevant to operating income.	Exxon Mobil Corp. NOPAT increased from 2021 to 2022 but then slightly decreased from 2022 to 2023 not reaching 2021 level.

Exxon Mobil Corp., cash operating taxes calculation

US$ in millions

12 months ended:	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Income tax expense (benefit)	15,429)	20,176)	7,636)	(5,632)	5,282)
Less: Deferred income tax expense (benefit)	944)	3,583)	(44)	(8,052)	(675)
Add: Tax savings from interest expense	228)	196)	224)	275)	213)
Cash operating taxes	14,713)	16,789)	7,904)	2,695)	6,170)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

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Item	Description	The company
Cash operating taxes	Cash operating taxes are estimated by adjusting income tax expense for changes in deferred taxes and tax benefit from the interest deduction.	Exxon Mobil Corp. cash operating taxes increased from 2021 to 2022 but then slightly decreased from 2022 to 2023.

Exxon Mobil Corp., invested capital calculation (financing approach)

US$ in millions

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Notes and loans payable	4,090)	634)	4,276)	20,458)	20,578)
Long-term debt, excluding due within one year	37,483)	40,559)	43,428)	47,182)	26,342)
Operating lease liability¹	6,010)	5,594)	5,190)	5,162)	5,693)
Total reported debt & leases	47,583)	46,787)	52,894)	72,802)	52,613)
Total ExxonMobil share of equity	204,802)	195,049)	168,577)	157,150)	191,650)
Net deferred tax (assets) liabilities²	20,815)	19,049)	15,715)	14,006)	22,352)
Reserves³	271)	570)	540)	474)	405)
LIFO reserve⁴	14,000)	14,900)	14,000)	5,400)	9,700)
Restructuring reserves⁵	—)	—)	77)	403)	—)
Equity equivalents⁶	35,086)	34,519)	30,332)	20,283)	32,457)
Accumulated other comprehensive (income) loss, net of tax⁷	11,989)	13,270)	13,764)	16,705)	19,493)
Noncontrolling interests	7,736)	7,424)	7,106)	6,980)	7,288)
Adjusted total ExxonMobil share of equity	259,613)	250,262)	219,779)	201,118)	250,888)
Invested capital	307,196)	297,049)	272,673)	273,920)	303,501)

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Addition of capitalized operating leases.

² Elimination of deferred taxes from assets and liabilities. See details »

³ Addition of allowance for doubtful accounts receivable.

⁴ Addition of LIFO reserve. See details »

⁵ Addition of restructuring reserves.

⁶ Addition of equity equivalents to total ExxonMobil share of equity.

⁷ Removal of accumulated other comprehensive income.

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Item	Description	The company
Invested capital	Capital is an approximation of the economic book value of all cash invested in going-concern business activities.	Exxon Mobil Corp. invested capital increased from 2021 to 2022 and from 2022 to 2023.

Exxon Mobil Corp., cost of capital calculations

Dec 31, 2023

	Capital (fair value)¹	Weights					Cost of capital
Equity²	413,926)	413,926)	÷	458,326)	=	0.90	0.90	×	13.52%	=	12.21%
Debt³	38,390)	38,390)	÷	458,326)	=	0.08	0.08	×	3.44% × (1 – 21.00%)	=	0.23%
Operating lease liability⁴	6,010)	6,010)	÷	458,326)	=	0.01	0.01	×	3.90% × (1 – 21.00%)	=	0.04%
Total:	458,326)					1.00					12.48%

Based on: 10-K (reporting date: 2023-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2022

	Capital (fair value)¹	Weights					Cost of capital
Equity²	446,709)	446,709)	÷	489,324)	=	0.91	0.91	×	13.52%	=	12.34%
Debt³	37,021)	37,021)	÷	489,324)	=	0.08	0.08	×	3.10% × (1 – 21.00%)	=	0.19%
Operating lease liability⁴	5,594)	5,594)	÷	489,324)	=	0.01	0.01	×	2.40% × (1 – 21.00%)	=	0.02%
Total:	489,324)					1.00					12.55%

Based on: 10-K (reporting date: 2022-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2021

	Capital (fair value)¹	Weights					Cost of capital
Equity²	325,013)	325,013)	÷	380,785)	=	0.85	0.85	×	13.52%	=	11.54%
Debt³	50,582)	50,582)	÷	380,785)	=	0.13	0.13	×	2.67% × (1 – 21.00%)	=	0.28%
Operating lease liability⁴	5,190)	5,190)	÷	380,785)	=	0.01	0.01	×	2.30% × (1 – 21.00%)	=	0.02%
Total:	380,785)					1.00					11.84%

Based on: 10-K (reporting date: 2021-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2020

	Capital (fair value)¹	Weights					Cost of capital
Equity²	240,038)	240,038)	÷	317,730)	=	0.76	0.76	×	13.52%	=	10.21%
Debt³	72,530)	72,530)	÷	317,730)	=	0.23	0.23	×	2.06% × (1 – 21.00%)	=	0.37%
Operating lease liability⁴	5,162)	5,162)	÷	317,730)	=	0.02	0.02	×	2.90% × (1 – 21.00%)	=	0.04%
Total:	317,730)					1.00					10.62%

Based on: 10-K (reporting date: 2020-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Dec 31, 2019

	Capital (fair value)¹	Weights					Cost of capital
Equity²	224,348)	224,348)	÷	278,078)	=	0.81	0.81	×	13.52%	=	10.91%
Debt³	48,037)	48,037)	÷	278,078)	=	0.17	0.17	×	2.58% × (1 – 21.00%)	=	0.35%
Operating lease liability⁴	5,693)	5,693)	÷	278,078)	=	0.02	0.02	×	3.20% × (1 – 21.00%)	=	0.05%
Total:	278,078)					1.00					11.31%

Based on: 10-K (reporting date: 2019-12-31).

¹ US$ in millions

² Equity. See details »

³ Debt. See details »

⁴ Operating lease liability. See details »

Exxon Mobil Corp., economic spread ratio calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(475)	25,474)	442)	(63,193)	(17,924)
Invested capital²	307,196)	297,049)	272,673)	273,920)	303,501)
Performance Ratio
Economic spread ratio³	-0.15%	8.58%	0.16%	-23.07%	-5.91%
Benchmarks
Economic Spread Ratio, Competitors⁴
Chevron Corp.	-4.85%	5.64%	-3.42%	-17.57%	-12.86%
ConocoPhillips	0.71%	13.32%	-0.62%	-19.26%	-0.61%
Marathon Petroleum Corp.	3.01%	12.03%	-2.50%	-26.49%	-3.26%
Occidental Petroleum Corp.	-5.05%	7.37%	-4.70%	-33.70%	-10.78%
Valero Energy Corp.	-0.16%	11.46%	-1.28%	-17.10%	-3.43%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² Invested capital. See details »

³ 2023 Calculation
Economic spread ratio = 100 × Economic profit ÷ Invested capital
= 100 × -475 ÷ 307,196 = -0.15%

⁴ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic spread ratio	The ratio of economic profit to invested capital, also equal to the difference between return on invested capital (ROIC) and cost of capital.	Exxon Mobil Corp. economic spread ratio improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Exxon Mobil Corp., economic profit margin calculation, comparison to benchmarks

	Dec 31, 2023	Dec 31, 2022	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019
Selected Financial Data (US$ in millions)
Economic profit¹	(475)	25,474)	442)	(63,193)	(17,924)
Sales and other operating revenue	334,697)	398,675)	276,692)	178,574)	255,583)
Performance Ratio
Economic profit margin²	-0.14%	6.39%	0.16%	-35.39%	-7.01%
Benchmarks
Economic Profit Margin, Competitors³
Chevron Corp.	-5.23%	5.08%	-4.26%	-36.70%	-18.00%
ConocoPhillips	1.03%	12.82%	-1.03%	-52.15%	-1.08%
Marathon Petroleum Corp.	1.29%	4.71%	-1.32%	-26.64%	-2.16%
Occidental Petroleum Corp.	-10.15%	11.33%	-10.52%	-119.71%	-44.52%
Valero Energy Corp.	-0.06%	3.23%	-0.50%	-10.79%	-1.29%

Based on: 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31).

¹ Economic profit. See details »

² 2023 Calculation
Economic profit margin = 100 × Economic profit ÷ Sales and other operating revenue
= 100 × -475 ÷ 334,697 = -0.14%

³ Click competitor name to see calculations.

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Performance ratio	Description	The company
Economic profit margin	The ratio of economic profit to sales. It is the company profit margin covering income efficiency and asset management. Economic profit margin is not biased in favor of capital-intensive business models, because any added capital is a cost to the economic profit margin.	Exxon Mobil Corp. economic profit margin improved from 2021 to 2022 but then deteriorated significantly from 2022 to 2023.

Exxon Mobil Corp. (NYSE:XOM)

Economic Value Added (EVA)

Economic Profit

Net Operating Profit after Taxes (NOPAT)

Cash Operating Taxes

Invested Capital

Cost of Capital

Economic Spread Ratio

Economic Profit Margin