Exxon earns nearly $11 billion in first quarter

[fairlycrazy23]

Apr 29, 2011 11:58:14 GMT -5 Shirina said:

I think the legitimate question raised in this thread is why oil companies continue to make rather large profits (that's $11b for just this quarter, not the whole year) when average Americans are struggling with record gas prices?

I guess you can say that is a legitimate question , but it has a very simple answer, they sell a tremendous amount of a product that is in very high demand.

US oil companies do not set the price of there product because it is a fungible commodity of which they only control a relatively small amount on the world market.

[Shirina]

Your point is irrelevant, misleading and trivial.

It wasn't my point, it was the OP's point.

It's a matter of opinion.

Keep that in mind.

[safeharbor37]

Over the last week as earnings season has approached, the Democratic Party leadership again talked about removing what they call $4 billion in oil industry subsidies. But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy. The simple truth is that these are legitimate tax provisions to keep U.S. industry internationally competitive – to keep jobs from being exported to other countries.

Unfortunately, this false discussion about oil industry subsidies also reinforces another falsehood making the rounds: that ExxonMobil doesn’t pay its fair share of income taxes in the United States.

Let me state it unequivocally. Last year, our total taxes and duties to the U.S. government were $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.

And during the first quarter of this year, we incurred tax expenses in the United States of more than $3.1 billion on U.S. earnings of $2.6 billion.

So we have seen the predictable political positioning but no action to actually help bring down energy prices. In fact the government has chosen not to help increase supply by refusing to open up the vast energy resources in this country that are off limits to our industry.

We have seen exploration and development in the U.S. Gulf of Mexico – which accounts for 30 percent of all U.S. crude oil production – effectively banned for the past year by the Obama Administration.

In addition, legislation was enacted targeted at restricting the supply of oil from Canada – a country whose oil reserves are second only to Saudi Arabia’s.

Unfortunately, irresistible sound-bite politics rather than sound public policy is dominating the energy agenda in Washington – but there is one reason for optimism about America’s economic and energy security.

That optimism lies in America’s extraordinary natural gas endowment. This resource is providing the United States with an enormous economic advantage as a result of American ingenuity and innovation.

It’s nothing short of revolutionary that our industry has recently unlocked more than a 100 years’ worth of natural gas right here in the United States. And at some of the world’s lowest prices – last month natural gas was selling for 40 percent less in the U.S. than in Europe. www.exxonmobilperspectives.com/2011/04/28/exxonmobil-earnings-the-real-story-you-wont-hear-in-washington/

[floridayankee]

Apr 29, 2011 11:58:14 GMT -5 Shirina said:

One can try to "fog the mirror," as it were, by focusing the blame on the government and its gas tax, but did the price skyrocket lately because of increased state gas taxes?

Nobody has blamed government taxes for the increasing prices. It's just hypocritical to whine about an oil company's profits when government's take is so much larger. That's the ignorance part. Sure Exxon made a ton of money...a few pennies at a time on an extremely large volume of product. Nothing to get excited over IMHO. If people are that "angry" over profits, go 100% renewable and quit buying the product.

[AgeOfEnlightenmentSCP]

NBC was playing up Exxon's' earnings report a week before it came out. NBC has either a huge disconnect with reality or is merely a puppet of this administrations political agenda. This sensational but incomplete coverage will only push their shrinking audience to other information sources, and they will follow the large liberal newspapers into obscurity and bankruptcy.

Um, if I'm not mistaken- NBC is owned by GE. Maybe they just felt like it was time to talk about someone else as a smokescreen.

[AgeOfEnlightenmentSCP]

Apr 29, 2011 12:38:47 GMT -5 safeharbor37 said:

Over the last week as earnings season has approached, the Democratic Party leadership again talked about removing what they call $4 billion in oil industry subsidies. But what they really mean is that they want to increase our taxes by taking away long-standing deductions for our industry while leaving these same deductions in place for other sectors of the economy. The simple truth is that these are legitimate tax provisions to keep U.S. industry internationally competitive – to keep jobs from being exported to other countries.

Unfortunately, this false discussion about oil industry subsidies also reinforces another falsehood making the rounds: that ExxonMobil doesn’t pay its fair share of income taxes in the United States.

Let me state it unequivocally. Last year, our total taxes and duties to the U.S. government were $9.8 billion, which includes an income tax expense of $1.6 billion. Over the past five years, we incurred a total U.S. tax expense of almost $59 billion, which is $18 billion more than we earned in the United States during the same period.

And during the first quarter of this year, we incurred tax expenses in the United States of more than $3.1 billion on U.S. earnings of $2.6 billion.

So we have seen the predictable political positioning but no action to actually help bring down energy prices. In fact the government has chosen not to help increase supply by refusing to open up the vast energy resources in this country that are off limits to our industry.

We have seen exploration and development in the U.S. Gulf of Mexico – which accounts for 30 percent of all U.S. crude oil production – effectively banned for the past year by the Obama Administration.

In addition, legislation was enacted targeted at restricting the supply of oil from Canada – a country whose oil reserves are second only to Saudi Arabia’s.

Unfortunately, irresistible sound-bite politics rather than sound public policy is dominating the energy agenda in Washington – but there is one reason for optimism about America’s economic and energy security.

That optimism lies in America’s extraordinary natural gas endowment. This resource is providing the United States with an enormous economic advantage as a result of American ingenuity and innovation.

It’s nothing short of revolutionary that our industry has recently unlocked more than a 100 years’ worth of natural gas right here in the United States. And at some of the world’s lowest prices – last month natural gas was selling for 40 percent less in the U.S. than in Europe. www.exxonmobilperspectives.com/2011/04/28/exxonmobil-earnings-the-real-story-you-wont-hear-in-washington/

How in the hell can they owe more in taxes than they earned? It's ridiculous. I know liberals want to raise taxes to 100%, but Exxon Mobil payed 328% in taxes on its domestic income. That is outrageous.

[safeharbor37]

How in the hell can they owe more in taxes than they earned?

And during the first quarter of this year, we incurred tax expenses in the United States of more than $3.1 billion on U.S. earnings of $2.6 billion.

Take another look. That's not what they said.
To some degree, this is "creative bookkeeping." It's fairly easy to transfer profits from one business unit to another where there's less tax liability.
The problem for the US is if EXXON [or any other business] simply moves its operation out of the US and minimizes taxes that way. The end result would be higher prices and more direct taxes on the consumer [which is where we're headed currently].

[floridayankee]

Apr 29, 2011 13:25:20 GMT -5 AgeOfEnlightenmentSCP said:

How in the hell can they owe more in taxes than they earned? It's ridiculous. I know liberals want to raise taxes to 100%, but Exxon Mobil payed 328% in taxes on its domestic income. That is outrageous.

Sure it is. And it's not hard to believe either. For March, we paid $1.24 mil in state taxes and grossed a bit less than a mil.

[formerexpat]

I think the legitimate question raised in this thread is why oil companies continue to make rather large profits (that's $11b for just this quarter, not the whole year) when average Americans are struggling with record gas prices?

This is irrelevant once you understand that the margin on US gasoline sales are about 1-2%.

Even if you took the entire profit of the oil companies away, your gasoline would cost you about 3.5-7 cents less per gallon. Federal taxes alone on gasoline is 18 cents per gallon, or 2.5x - 5x the profit that XOM makes on US gasoline sales.

The profits for oil companies are made more on the upstream and downstream parts of their business. Gasoline sale margins in other countries is also much higher than here in the US - about 5-10% in most areas. The US can enjoy low margins on US gasoline sales because of the amount of gasoline we use [i.e. profit made on volume].

I'd suggest reading through cover to cover, the XOM financial statements so you can understand the business before making stupid comments.

I'll also say that last year, XOM's profit after tax was $19.7 billion. They paid just under $76 billion in taxes and duties to various governments across the world. So the profits of the governments across the world was nearly 4x the profit of Exxon; the company that did all the work to achieve the profits. If there is anyone to be pissed off at, it's the governments.

[formerexpat]

One can try to "fog the mirror," as it were, by focusing the blame on the government and its gas tax, but did the price skyrocket lately because of increased state gas taxes?

Care to explain to the board how oil companies set the price of oil. This should be good.

[Deleted]

Apr 29, 2011 14:46:37 GMT -5 Ratchets said:

Exxon earns nearly $11 billion in first quarter

Shouldn't the fact that an American company is earning profits be a good thing? I thought that we all wanted America to prosper, but now that it is again, are folks bashing the very outcome they wished for in the first place? I don't think I'll ever understand politics...

It's kind of like the fact that US oil companies sell approximately 1/3 of their refined product to oversea markets while the price of gas is high here. ( insert media outrage here) It's always reports from major media about our huge trade inbalance, but now it's a bad thing when a oil company brings the profits "home" helping to address that inbalance. Not to mention the 9 million jobs plus that the industry supplies here. (PS Ratchets, a lot of talk about distracting avatars. Your's gets my vote as the most distracting, but in a good way!)

[tyfighter3]

Safeharbor37 is right on. I couldn't have said it better. K for you.

[tyfighter3]

Here is our Energy program at work.
www.ogj.com/index/article-display/7290413077/articles/oil-gas-journal/general-interest-2/government/20100/may-2011/eia-cancels_2011_us.html