The Rising Influence of Rising Affluence

[DewDiligence]

Why is XOM using stock rather than cash to pay for XTO? The answer is twofold:

1. XOM’s balance sheet has taken a hit recently and the cash balance is way down from 18 months ago.

2. Most of the cash XOM still has resides in foreign subsidiaries; if XOM were to repatriate this cash for the XTO acquisition, XOM would have to pay US income tax on the foreign profits that led to the accumulation of foreign cash in the first place.