Analysis of Debt
Total Debt (Carrying Amount)
Exxon Mobil Corp., balance sheet: debt
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
The carrying amount of total debt exhibited a fluctuating pattern over the five-year period. Initial values decreased before stabilizing and then increasing towards the end of the observed timeframe.
- Overall Trend
- Total debt began at US$47.704 billion in 2021, decreasing to US$41.193 billion in 2022. It then experienced a slight increase to US$41.573 billion in 2023 and remained relatively stable at US$41.710 billion in 2024. By 2025, total debt rose to US$43.537 billion, representing an overall increase from the 2022 low.
- Notes and Loans Payable
- Notes and loans payable demonstrated significant volatility. A substantial decrease was observed from US$4.276 billion in 2021 to US$0.634 billion in 2022. This was followed by a considerable increase to US$4.090 billion in 2023, further rising to US$4.955 billion in 2024, and reaching US$9.296 billion in 2025. This component appears to be a key driver of the overall debt trend in later years.
- Long-Term Debt
- Long-term debt, excluding amounts due within one year, generally decreased throughout the period. Starting at US$43.428 billion in 2021, it declined steadily to US$34.241 billion in 2025. The rate of decrease slowed over time, with smaller reductions observed in the later years. This suggests a consistent, though moderating, effort to reduce long-term obligations.
The interplay between the reduction in long-term debt and the fluctuating notes and loans payable ultimately determined the overall trend in total debt. While long-term debt consistently decreased, increases in notes and loans payable, particularly in the final two years, offset some of those reductions and contributed to the final increase in total debt.
Total Debt (Fair Value)
| Dec 31, 2025 | |
|---|---|
| Selected Financial Data (US$ in millions) | |
| Notes and loans payable | 9,296) |
| Long-term debt, excluding finance lease obligations | 28,587) |
| Long-term finance lease liability | 2,406) |
| Total debt (fair value) | 40,289) |
| Financial Ratio | |
| Debt, fair value to carrying amount ratio | 0.93 |
Based on: 10-K (reporting date: 2025-12-31).
Weighted-average Interest Rate on Debt
Weighted-average effective interest rate on debt: 3.51%
| Interest rate | Debt amount1 | Interest rate × Debt amount | Weighted-average interest rate2 |
|---|---|---|---|
| 3.80% | 9,296) | 353) | |
| 3.29% | 1,000) | 33) | |
| 2.44% | 1,250) | 30) | |
| 3.48% | 2,032) | 71) | |
| 2.61% | 2,016) | 53) | |
| 3.00% | 750) | 22) | |
| 4.23% | 2,043) | 86) | |
| 3.57% | 986) | 35) | |
| 4.11% | 2,497) | 103) | |
| 3.10% | 1,500) | 46) | |
| 4.33% | 2,750) | 119) | |
| 3.45% | 2,750) | 95) | |
| 0.52% | 1,175) | 6) | |
| 0.84% | 1,175) | 10) | |
| 1.41% | 1,175) | 17) | |
| 6.10% | 186) | 11) | |
| 6.75% | 282) | 19) | |
| 6.38% | 219) | 14) | |
| 7.20% | 247) | 18) | |
| 1.90% | 958) | 18) | |
| 2.15% | 869) | 19) | |
| 4.13% | 133) | 5) | |
| 2.54% | 2,005) | 51) | |
| 4.67% | 6,313) | 295) | |
| Total | 43,607) | 1,530) | |
| 3.51% | |||
Based on: 10-K (reporting date: 2025-12-31).
1 US$ in millions
2 Weighted-average interest rate = 100 × 1,530 ÷ 43,607 = 3.51%
Interest Costs Incurred
Exxon Mobil Corp., interest costs incurred
US$ in millions
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
Interest expense exhibited volatility over the five-year period. While decreasing from 2021 to 2022, it generally increased from 2022 through 2024 before declining in 2025. Interest capitalized demonstrated a consistent upward trend throughout the period, significantly increasing each year. Interest costs incurred, representing the sum of interest expense and capitalized interest, also showed an overall increasing trend, though with fluctuations.
- Interest Expense
- Interest expense decreased from US$947 million in 2021 to US$798 million in 2022, representing a decline of approximately 15.7%. It then rose to US$849 million in 2023 and further to US$996 million in 2024, an increase of roughly 17.4% over the two years. In 2025, interest expense decreased substantially to US$603 million, a decrease of approximately 39.4% from 2024.
- Interest Capitalized
- Interest capitalized increased steadily throughout the period. From US$655 million in 2021, it rose to US$838 million in 2022, US$1,152 million in 2023, US$1,276 million in 2024, and reached US$1,534 million in 2025. This represents a cumulative increase of over 134% from 2021 to 2025.
- Interest Costs Incurred
- Interest costs incurred increased from US$1,602 million in 2021 to US$1,636 million in 2022, a modest increase. The figure then rose to US$2,001 million in 2023 and peaked at US$2,272 million in 2024. A decrease was observed in 2025, with interest costs incurred falling to US$2,137 million. The overall trend indicates a growing burden of interest costs, despite the decrease in the final year.
The increasing trend in interest capitalized suggests a greater proportion of borrowing costs are being added to the value of assets under construction, potentially indicating significant investment in long-term projects. The fluctuation in interest expense, coupled with the consistent rise in capitalized interest, warrants further investigation to understand the underlying drivers of these changes and their impact on profitability.
Adjusted Interest Coverage Ratio
Based on: 10-K (reporting date: 2025-12-31), 10-K (reporting date: 2024-12-31), 10-K (reporting date: 2023-12-31), 10-K (reporting date: 2022-12-31), 10-K (reporting date: 2021-12-31).
2025 Calculations
1 Interest coverage ratio (without capitalized interest) = EBIT ÷ Interest expense
= 41,871 ÷ 603 = 69.44
2 Adjusted interest coverage ratio (with capitalized interest) = EBIT ÷ Interest costs incurred
= 41,871 ÷ 2,137 = 19.59
The observed interest coverage ratios demonstrate fluctuating performance over the five-year period. A significant disparity exists between the interest coverage ratio calculated without capitalized interest and the adjusted interest coverage ratio, which incorporates capitalized interest. Both ratios exhibit variability, though the adjusted ratio consistently presents a lower value, reflecting the impact of capitalized interest expense.
- Interest Coverage Ratio (without capitalized interest)
- This ratio experienced substantial growth from 2021 to 2022, increasing from 33.98 to 98.43. Following this peak, a decline was observed in 2023 to 63.17, continuing downward to 50.07 in 2024. A partial recovery occurred in 2025, with the ratio rising to 69.44. The overall trend suggests volatility, with a recent stabilization at a level still below the 2022 high.
- Adjusted Interest Coverage Ratio (with capitalized interest)
- The adjusted interest coverage ratio also increased notably from 2021 to 2022, moving from 20.09 to 48.01. However, this ratio experienced a more pronounced decline than its unadjusted counterpart, falling to 26.80 in 2023 and further to 21.95 in 2024. The downward trend persisted into 2025, with the ratio reaching 19.59. This indicates a consistent erosion of the company’s ability to cover its interest obligations when accounting for capitalized interest.
- Comparative Analysis
- The difference between the two ratios widens during periods of decline, suggesting that capitalized interest represents a growing portion of total interest expense. The adjusted ratio’s continued decrease throughout the period, even as the unadjusted ratio showed some recovery in 2025, highlights the increasing financial burden associated with capitalized interest. The adjusted ratio remains considerably lower than the unadjusted ratio across all observed periods.
In summary, while the company demonstrates a generally adequate ability to cover its interest expense, the inclusion of capitalized interest significantly reduces this coverage. The declining trend in the adjusted interest coverage ratio warrants continued monitoring, as it suggests a potential weakening in the company’s capacity to meet its debt obligations over time.