Exhibit 1: Parent Company COC (2007, 2022)

2007 Variables Re Equity Beta Re Asset Beta Rd Rf RPm/EMRP Tax Rate D/E
Spread to treasury(1.62%) +
Equation RF + Equity Beta(EMRP) RF + Asset Beta(EMRP) Premium (4.66%) NA NA Taxes/Income before taxes Net Debt/ Equity
Result 10.91% 9.25% 6.28% 4.66% 5% 38.58% 59.28%
Source Table 1, T.Bond 10 Year (Table 2) T.Bond 10 Year(Table 2) Pg. 6 in 2006 Midland used Exhibit 1 of the case Exhibit 5 of the case
5% Rpm
2020 Variables Re Equity Beta Re Asset Beta Rd Rf RPm/EMRP Tax Rate D/E
Equation RF + Equity Beta(EMRP) RF + Asset Beta(EMRP) NA NA NA Taxes/Income before taxes Net Debt/ Equity
Result 9.37% 7.78% 6.50% 1.78% 5.5% 35.90% 43.00%
Source Rd information provided in the lecturer T.Bond 10 Year, As of Feb 2nd Duff and Phelps Conoco Phillips Supplementary Conoco Phillips, Finra-Morning
Instructions Quoted: "Use COP’s 6.5%
2022 Recommended ERP Information Star, As of Feb 2nd 2022
coupon bond due 02/01/2039 yield as a
proxy for the current Rd FINRA BOND
DATA"

Consolidated Betas Breakdown 2007 Consolidated Betas Breakdown 2022

Value Source Value Source
Current D/E Consolidated 0.593 Net Debt/ Equity Current D/E Consolidated 0.430 Conoco Phillips, Finra-Morning Star, As of Feb 2nd 2022
Tax Rate 0.386 Taxes/Income before taxes (exhibit 1.) Tax Rate 0.386 Taxes/Income before taxes (exhibit 1.)
Equity Beta Consolidated 1.250 Exhibit 5. Equity Beta Consolidated 1.380 Conoco Phillips, Finra-Morning Star, As of Feb 2nd 2022
Asset Beta Consolidated 0.917 =Equity Beta Consolidated (1+(1-tax)*D/E Consolidated) Asset Beta Consolidated 1.092 =Equity Beta Consolidated (1+(1-tax)*D/E Consolidated)
Consolidated WACC 2007 with Equity Beta
Current D/E Consolidated 59.28% Equity Beta Consolidated 1.25
Current D/V Consolidated 37.22% Rpm 5%
Current E/V Consolidated 62.78% Rf 4.66% T.Bond 10 Year
Taxes 0.3858 Re Consolidated 10.91%
Rd Consolidated 6.28%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 37.22% 6.28% 0.3858 3.86% 1.44%
Equity 62.78% 10.91% 0.3858 10.91% 6.85%
8.28% =WACC Consolidated
Consolidated WACC 2007 with Asset Beta
Current D/E Consolidated 59.28% Asset Beta Consolidated 0.917
Current D/V Consolidated 37.22% Rpm 5.00%
Current E/V Consolidated 62.78% Rf 4.66% T.Bond 10 Year
Taxes 0.3858 Re Consolidated 9.25%
Rd Consolidated 6.28%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 37.22% 6.28% 0.3858 3.86% 1.44%
Equity 62.78% 9.25% 0.3858 9.25% 5.81%
7.24% =WACC Consolidated
Consolidated WACC 2022 with Equity Beta
Current D/E Consolidated 43.00% Equity Beta Consolidated 1.380
Current D/V Consolidated 30.07% Rpm 5.50%
Current E/V Consolidated 69.93% Rf 1.78% T.Bond 10 Year
Taxes 0.3590 Re Consolidated 9.37%
Rd Consolidated 6.50%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 30.07% 6.50% 0.3590 4.17% 1.25%
Equity 69.93% 9.37% 0.3590 9.37% 6.55%
7.81% =WACC Consolidated
Consolidated WACC 2022 with Asset Beta
Current D/E Consolidated 43.00% Asset Beta Consolidated 1.092
Current D/V Consolidated 30.07% Rpm 5.50%
Current E/V Consolidated 69.93% Rf 1.78% T.Bond 10 Year
Taxes 0.3590 Re Consolidated 7.78%
Rd Consolidated 6.50%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 30.07% 6.50% 0.3590 4.17% 1.25%
Equity 69.93% 7.78% 0.3590 7.78% 5.44%
6.70% =WACC Consolidated

Exhibit 2: Exploration & Production, 2007

Variables Re Equity Beta Re Asset Beta Rd Rf RPm/EMRP Tax Rate D/E
Spread to treasury(1.6%) +
Equation RF + Equity Beta(EMRP) RF + Asset Beta(EMRP) Premium(4.66%) NA NA Taxes/Income before taxes Debt/ Equity (Average Peer)
Result 10.41% 9.28% 6.26% 4.66% 5% 38.58% 39.83%
Source Table 1, T.Bond 10 Year (Table 2) T.Bond 10 Year (Table 2) Pg. 6 in 2006 Midland used 5%
Exhibit
Rpm 1. Exhibit 5.
Exploration & Production Betas Breakdown 2007
Value Source
Current D/E E&P 0.398 Debt/ Equity (Average Peer)
Tax Rate 0.386 Taxes/Income before taxes (exhibit 1.)
Equity Beta E&P 1.150 Average peer Exhibit 5.
Asset Beta E&P 0.924 =Equity Beta E&P (1+(1-tax)*D/E E&P)
Exploration & Production WACC 2007 with Equity Beta
Current D/E E&P 39.83% Equity Beta Exploration & Production 1.15
Current D/V E&P 28.48% Rpm 5%
Current E/V E&P 71.52% Rf 4.66% T.Bond 10 Year
Taxes 0.3858 Re Exploration & Production 10.41%
Rd Exploration & Production 6.26%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 28.48% 6.26% 0.3858 3.84% 1.10%
Equity 71.52% 10.41% 0.3858 10.41% 7.44%
8.54% =WACC E&P
Exploration & Production WACC 2007 with Asset Beta
Current D/E E&P 39.83% Asset Beta Exploration & Production 0.924
Current D/V E&P 28.48% Rpm 5.00%
Current E/V E&P 71.52% Rf 4.66% T.Bond 10 Year
Taxes 38.58% Re Exploration & Production 9.28%
Rd Exploration & Production 6.26%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 28.48% 6.26% 0.3858 3.84% 1.10%
Equity 71.52% 9.28% 0.3858 9.28% 6.64%
7.73% =WACC E&P

Exhibit 3: Refining and Marketing, 2007

Variables Re Equity Beta Re Asset Beta Rd Rf RPm/EMRP Tax Rate D/E
Spread to treasury(1.80) +
Equation RF + Equity Beta(EMRP) RF + Asset Beta(EMRP) Premium(4.66) NA NA Taxes/Income before taxes Debt/ Equity (Average Peer)
Result 10.64% 9.98% 6.46% 4.66% 5% 38.58% 20.25%
Pg. 6 in 2006 Midland used
Source Table 1, T.Bond 10 Year (Table 2) T.Bond 10 Year(Table 2) 5% Rpm Exhibit 1. Exhibit 5.
Refining & Marketing Betas Breakdown 2007
Value Source
Current D/E R&M 0.203 Debt/ Equity (Average Peer)
Tax Rate 0.386 Taxes/Income before taxes (exhibit 1.)
Equity Beta R&M 1.196 Average peer Exhibit 5.
Asset Beta R&M 1.063 =Equity Beta R&M (1+(1-tax)*D/E R&M)
Refining & Marketing WACC 2007 with Equity Beta
Current D/E R&M 20.25% Equity Beta Refining & Marketing 1.20
Current D/V R&M 16.84% Rpm 5%
Current E/V R&M 83.16% Rf 4.66% T.Bond 10 Year
Taxes 0.3858 Re Refining & Marketing 10.64%
Rd Refining & Marketing 6.46%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 16.84% 6.46% 0.3858 3.97% 0.67%
Equity 83.16% 10.64% 0.3858 10.64% 8.85%
9.52% =WACC R&M
Refining & Marketing WACC 2007 with Asset Beta
Current D/E R&M 20.25% Asset Beta Refining & Marketing 1.0634
Current D/V R&M 16.84% Rpm 5%
Current E/V R&M 83.16% Rf 4.66% T.Bond 10 Year
Taxes 0.3858 Re Refining & Marketing 9.98%
Rd Refining & Marketing 6.46%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 16.84% 6.46% 0.3858 3.97% 0.67%
Equity 83.16% 9.98% 0.3858 9.98% 8.30%
8.97% =WACC R&M

Exhibit 4: Petrochemicals, 2007

Variables Re Equity Beta Re Asset Beta Rd Rf RPm/EMRP Tax Rate D/E
Spread to treasury(1.35%) + =D/E Consolidated*3-(D/E E&P
Equation RF + Equity Beta(EMRP) RF + Asset Beta(EMRP) Premium(4.66%) NA NA Taxes/Income before taxes + D/E R&M )
Result 11.68% 8.73% 6.01% 4.66% 5% 38.58% 117.77%
Pg. 6 in 2006 Midland used
Source Table 1, T.Bond 10 Year (Table 2) T.Bond 10 Year (Table 2) 5% Rpm Exhibit 1. Exhibit 5.
Petrochemicals Betas Breakdown 2007
Value Source
Current D/E Petrochemicals 1.178 =D/E Consolidated*3-(D/E E&P + D/E R&M )
Tax Rate 0.386 Taxes/Income before taxes (exhibit 1.)
Equity Beta Petrochemicals 1.404 =Beta Consolidated*3-(Beta E&P + Beta R&M)
Asset Beta Petrochemicals 0.815 =Equity Beta Petro (1+(1-tax)*D/E Petro)
Petrochemicals WACC 2007 with Equity Beta
Current D/E Petrochemicals 117.77% Equity Beta Petrochemicals 1.40
Current D/V Petrochemicals 54.08% Rpm 5%
Current E/V Petrochemicals 45.92% Rf 4.66% T.Bond 10 Year
Taxes 0.3858 Re Petrochemicals 11.68%
Rd Petrochemicals 6.01%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 54.08% 6.01% 0.3858 3.69% 2.00%
Equity 45.92% 11.68% 0.3858 11.68% 5.36%
7.36% =WACC Petro
Petrochemicals WACC 2007 with Asset Beta
Current D/E Petrochemicals 117.77% Asset Beta Petrochemicals 0.81
Current D/V Petrochemicals 54.08% Rpm 5%
Current E/V Petrochemicals 45.92% Rf 4.66%
Taxes 0.3858 Re Petrochemicals 8.73% T.Bond 10 Year
Rd Petrochemicals 6.01%
Source Weights Req'd Return Tax rate After-Tax Return Weighted Cost
Debt 54.08% 6.01% 0.3858 3.69% 2.00%
Equity 45.92% 8.73% 0.3858 8.73% 4.01%
6.01% =WACC Petro