If ExxonMobil is making obscene amounts of profits, then I guess they are paying outlandish, outrageous, preposterous amounts of taxes

ExxonMobil pays about three times as much in taxes as it has in net income. So take whatever disparaging description you want to use for their profits and repeat that three times to describe their tax load.

Here is their total tax expense, from table 18 of their 2011 audited financial statements.  All amounts in millions of US dollars: 

 2011:  2010:  2009:  3 years:
 total income tax expense      31,051       21,561      15,119      67,731
 sales based tax      33,503       28,547      25,936      87,986
 other taxes and duties      39,973       36,118      34,819    110,910
 included in production        2,767         2,238        2,017        7,022
 included in SG&A           804            771           735        2,310
 total tax expense    108,098       89,235      78,626    275,959
 net income      41,060       30,460      19,280      90,800
 ratio of total taxes to profits            2.6             2.9            4.1            3.0

In 2011, ExxonMobil had revenue of $486 billion. That’s $1.3 billion per day or $55 million per hour.  In 2011 their profits were $41.1 billion. That’s $112.5 million per day, or $4.7 million per hour. That’s a lot of money. Let’s take another look at their taxes.

Let’s look at a tradition income statement. The last line is the percent of income before taxes that goes to various governments in the US and around the world.

 traditional income statement
 2011:  2010:  2009:
 Revenue    486,429     383,221    310,586
 All costs    414,318     331,200    276,187
 Income before income taxes      72,111       52,021      34,399
 Income taxes      31,051       21,561      15,119
 Profit      41,060       30,460      19,280
 percent of margin for taxes 43% 41% 44%

By that measure, ExxonMobil is transferring to various governments about 40% of their margins.

Now I’m going to restructure that income statement to pull all of the taxes on to one line. All the extraction, sale, duties, and income taxes together. Look what happens to the take of various governments.

 group all taxes together
 2011:  2010:  2009:
 Revenue    486,429     383,221    310,586
 All costs other than taxes    337,271     263,526    212,680
 Net income before ALL taxes    149,158     119,695      97,906
 All taxes    108,098       89,235      78,626
 Profit      41,060       30,460      19,280
 percent of margin for taxes 72% 75% 80%
 percent of margin kept by Exxon 28% 25% 20%
 ratio of taxes to profit            2.6             2.9            4.1

The team at ExxonMobil does the incredibly difficult work of getting energy out of the ground and delivering it to the market.  The percent of their pre-tax earnings going to various governments is in the range of mid-70s.  The percent of their after-cost earnings ExxonMobil gets to keep for stockholders is in the range of mid-20s.

Let’s look at the difference between revenue and the cost of producing that revenue. Governments get about three-fourths of that margin. ExxonMobil does all the work and gets to keep about one-fourth.

I’m not complaining. However, next time you hear someone griping about the huge amount of Exxon’s profits, remember that the government agencies are getting three times that huge amount.

Huge hat tip to Carpe Diem for the idea of looking at their financial statements. Prof Perry’s blog post title tells the story in about 15 words:  “Taxation Hero”: ExxonMobil Paid More Than $1 Trillion in Taxes Since 1999, Three Times Its Profits.

You can find the financial reports here.

The 2011 audited financials are here.  The income statement is on page F-3. Note 18, showing all taxes, is on page F-55.

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