In a recent filing with the Securities and Exchange Commission, Exxon (ticker: XOM) confirmed that it will take a write-down of between $18 billion and $20 billion in the 4th quarter of their current fiscal year. This question has a number of parts - please complete in Excel and upload file. Organization, clarity and depth of presentation is critical. Please make sure everything is labeled to facilitate understanding.

Part 1 -- Assume a $20 billion dollar write off and base your computations on the 3rd quarter 10 Q and assume a $2 billion dollar operating loss excluding the write down. What would be the $ and % reduction in shareholders equity? Compute debt to equity, leverage ratio and other debt ratios -- what do the mean ? How will this impact their future?

Part 2 --- What % of their market capitalization does the $20 billion represent?

Part 3 -- The write off itself - explain what it was, why did they need to it, how did they compute it -- what are the possible underlying assumptions? Once you identified that - what is the statement telling you about where Exxon sees the future?

Part 4 --- What % of the asset category did they write off ? How much of the asset class remains? What is the risk with those remaining assets?

Part 5 === What does this mean for the future of fossil fules?

3 Months Ended 9 Months Ended Condensed Consolidated Statement of Income - USD ($) $ in Millions Sep. 30, Sep. 30, Sep. 30, Sep. 30 2020 2019 2020 2019 Revenues and other income $ 45,425 $ 63,422 $ 132,836 $ 192,559 Sales and other operating revenue Income from equity affiliates 517 1,196 1,395 4,264 Other income 257 431 731 942 Total revenues and other income 46,199 65,049 134,962 197,765 Costs and other deductions 23,950 35,290 70,102 109,033 7,103 8,848 22,295 27,340 2,444 2,753 7,432 8,350 Crude oil and product purchases Production and manufacturing expenses Selling, general and administrative expenses Depreciation and depletion Exploration expenses, including dry holes Non-service pension and postretirement benefit expense 4,983 4,873 15,718 14,075 188 299 690 912 272 357 812 1,028 Interest expense 279 232 845 629 Other taxes and duties 7,352 19,338 22,756 7,676 60,328 Total costs and other deductions 184,123 46,571 (372) 137,232 (2,270) Income (Loss) before income taxes 13,642 4,721 1,474 Income taxes 337 378 4,598 3,247 9,044 77 394 Net income (loss) including noncontrolling interests Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to Exxon Mobil Earnings (Loss) per common share (dollars) Earnings (Loss) per common share-assuming dilution (dollars) (709) (29) $ (680) $ (0.15) $ (0.15) $3,170 $ 0.75 (2,648) (278) $ (2,370) $ (0.55) $ (0.55) $ 8,650 $2.03 $ 0.75 $2.03 Condensed Consolidated Balance Sheet - USD ($) Sin Millions Sep. 30, 2020 Dec. 31, 2019 Current assets Cash and cash equivalents $ 3,089 $8,832 19,974 Notes and accounts receivable-net 26,966 Inventories Crude oil products and merchandise 13,162 14,010 Materials and supplies 4,723 4,518 Other current assets 2,002 1.469 Total current assets 48,693 43,609 Investments, advances and long-term receivables Property, plant and equipment-net Other assets, including intangibles -net 50.052 43,164 253,018 250,496 15,245 16,363 Total assets 358,043 362,597 Current liabilities 21,911 20,578 Notes and loans payable Accounts payable and accrued liabilities Income taxes payable 33,340 41,831 1,217 1,580 Total current liabilities 56,468 63,989 Long-term debt 46,888 26,342 Postretirement benefits reserves 22,097 22,304 Deferred income tax liabilities 25,620 24,467 3.486 3,988 Long-term obligations to equity companies Other long-term obligations 20,025 21,416 Total liabilities 173,431 163,659 15,997 15,637 Commitments and contingencies (Note 3) Equity Common stock without par value (9,000 million shares authorized, 8,019 million shares issued) Earnings reinvested Accumulated other comprehensive income Common stock held in treasury (3,791 million shares at Sep. 30,2020 and 3,785 million shares at Dec. 31, 2019) 407,728 421,341 (20,189) (226,136) (19.493) (225,835) 177,400 191,650 7,212 7.288 EcconMobil share of equity Noncontrolling interests Total equity Total liabilities and equity 184,612 198,938 $362,597 $ 358,043 Cash flows from operating activities 9 Months Ended Sep 30, Sep 30, 2020 2019 $9,044 14,075 0 Net Income loss) linduding noncontrolling interests Depreciation and depletion Noncash inventory adjustment - Tower of cost or market Changes in operational working capital, excluding cash and debt All other items - net Net cash provided by operating activities Cash flows from Investing activities Additions to property, plant and equipment Proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments $12.648 15,718 61 (1,539) 1929) 10,663 2,564 12.319) 23,364 (17,657) (13,653) 229 600 Additional investments and advances 2.532) 3.443) 1,710 (15,157 769 (18,820) 23,185 7,019 14) 0 (1,651) 3,836) 6,139 139 0 (21) (11,150) (137) (10,936) (157) 511 30 Other investing activities linduding collection of advances Net cash used in investing activities Cash flows from financing activities Addition to long-term debt Reductions in long term debt Reductions in short term debt Additions/reductions) in commercial paper, and debt with three months or less maturity Contingent consideration payments Cash dividends to ExonMobil shareholders Cash dividends to noncontrolling interests Changes in noncontrolling interests Common stock acquired Net cash used in financing activities Effects of exchange rate changes on cash Increase/decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental Disclosures Income taxes pald Cash interest pald Cash interest paid - Indluded in cash flows from operating activities Cash interest paid - Capitalized, Induded in cash flows from investing activities Total cash interest paid 305) 10,568 331) (421) (2,162) (73) 5,743 2,309 3,089 3,042 8,832 5,351 2,341 5.259 726 515 516 540 $ 1,242 $ 1,055 3 Months Ended 9 Months Ended Condensed Consolidated Statement of Income - USD ($) $ in Millions Sep. 30, Sep. 30, Sep. 30, Sep. 30 2020 2019 2020 2019 Revenues and other income $ 45,425 $ 63,422 $ 132,836 $ 192,559 Sales and other operating revenue Income from equity affiliates 517 1,196 1,395 4,264 Other income 257 431 731 942 Total revenues and other income 46,199 65,049 134,962 197,765 Costs and other deductions 23,950 35,290 70,102 109,033 7,103 8,848 22,295 27,340 2,444 2,753 7,432 8,350 Crude oil and product purchases Production and manufacturing expenses Selling, general and administrative expenses Depreciation and depletion Exploration expenses, including dry holes Non-service pension and postretirement benefit expense 4,983 4,873 15,718 14,075 188 299 690 912 272 357 812 1,028 Interest expense 279 232 845 629 Other taxes and duties 7,352 19,338 22,756 7,676 60,328 Total costs and other deductions 184,123 46,571 (372) 137,232 (2,270) Income (Loss) before income taxes 13,642 4,721 1,474 Income taxes 337 378 4,598 3,247 9,044 77 394 Net income (loss) including noncontrolling interests Net income (loss) attributable to noncontrolling interests Net income (loss) attributable to Exxon Mobil Earnings (Loss) per common share (dollars) Earnings (Loss) per common share-assuming dilution (dollars) (709) (29) $ (680) $ (0.15) $ (0.15) $3,170 $ 0.75 (2,648) (278) $ (2,370) $ (0.55) $ (0.55) $ 8,650 $2.03 $ 0.75 $2.03 Condensed Consolidated Balance Sheet - USD ($) Sin Millions Sep. 30, 2020 Dec. 31, 2019 Current assets Cash and cash equivalents $ 3,089 $8,832 19,974 Notes and accounts receivable-net 26,966 Inventories Crude oil products and merchandise 13,162 14,010 Materials and supplies 4,723 4,518 Other current assets 2,002 1.469 Total current assets 48,693 43,609 Investments, advances and long-term receivables Property, plant and equipment-net Other assets, including intangibles -net 50.052 43,164 253,018 250,496 15,245 16,363 Total assets 358,043 362,597 Current liabilities 21,911 20,578 Notes and loans payable Accounts payable and accrued liabilities Income taxes payable 33,340 41,831 1,217 1,580 Total current liabilities 56,468 63,989 Long-term debt 46,888 26,342 Postretirement benefits reserves 22,097 22,304 Deferred income tax liabilities 25,620 24,467 3.486 3,988 Long-term obligations to equity companies Other long-term obligations 20,025 21,416 Total liabilities 173,431 163,659 15,997 15,637 Commitments and contingencies (Note 3) Equity Common stock without par value (9,000 million shares authorized, 8,019 million shares issued) Earnings reinvested Accumulated other comprehensive income Common stock held in treasury (3,791 million shares at Sep. 30,2020 and 3,785 million shares at Dec. 31, 2019) 407,728 421,341 (20,189) (226,136) (19.493) (225,835) 177,400 191,650 7,212 7.288 EcconMobil share of equity Noncontrolling interests Total equity Total liabilities and equity 184,612 198,938 $362,597 $ 358,043 Cash flows from operating activities 9 Months Ended Sep 30, Sep 30, 2020 2019 $9,044 14,075 0 Net Income loss) linduding noncontrolling interests Depreciation and depletion Noncash inventory adjustment - Tower of cost or market Changes in operational working capital, excluding cash and debt All other items - net Net cash provided by operating activities Cash flows from Investing activities Additions to property, plant and equipment Proceeds associated with sales of subsidiaries, property, plant and equipment, and sales and returns of investments $12.648 15,718 61 (1,539) 1929) 10,663 2,564 12.319) 23,364 (17,657) (13,653) 229 600 Additional investments and advances 2.532) 3.443) 1,710 (15,157 769 (18,820) 23,185 7,019 14) 0 (1,651) 3,836) 6,139 139 0 (21) (11,150) (137) (10,936) (157) 511 30 Other investing activities linduding collection of advances Net cash used in investing activities Cash flows from financing activities Addition to long-term debt Reductions in long term debt Reductions in short term debt Additions/reductions) in commercial paper, and debt with three months or less maturity Contingent consideration payments Cash dividends to ExonMobil shareholders Cash dividends to noncontrolling interests Changes in noncontrolling interests Common stock acquired Net cash used in financing activities Effects of exchange rate changes on cash Increase/decrease) in cash and cash equivalents Cash and cash equivalents at beginning of period Cash and cash equivalents at end of period Supplemental Disclosures Income taxes pald Cash interest pald Cash interest paid - Indluded in cash flows from operating activities Cash interest paid - Capitalized, Induded in cash flows from investing activities Total cash interest paid 305) 10,568 331) (421) (2,162) (73) 5,743 2,309 3,089 3,042 8,832 5,351 2,341 5.259 726 515 516 540 $ 1,242 $ 1,055