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.