Today, we filed our annual Form 10-K with the Securities and Exchange Commission. This document provides valuable information to investors about the financial and operating strength of our company.
The report contains everything from data on production volumes and acreage to financial statements and summaries for key business segments.
Unfortunately, from time to time, individuals from media or politics use the data out of context, which can lead to distortions. For example, last year, a reporter jumped to an incorrect conclusion from our 10-K – and the resulting article led to widespread misconceptions that ExxonMobil paid no income tax in 2009.
In reality, the numbers in the 10-K reflected more than ExxonMobil’s tax expense for 2009 activities. They included the effect of adjustments to our taxes for earlier years, which exceeded the amounts related to 2009. In fact, ExxonMobil’s income tax expense related to 2009 activities was approximately $500 million.
So this year, I thought I’d talk a little bit about the numbers you’ll find in our 2010 financial statements, particularly those related to taxes.
In 2010, our total taxes and duties to the U.S. government and its subdivisions exceeded $9.8 billion, including more than $1.6 billion in income tax expense.
Over the past five years, we’ve incurred a total U.S. tax expense of almost $59 billion. To help put that in perspective, consider the fact that our five-year tax expense exceeded our U.S. operating earnings during that time by $18 billion. That means that for every $1 of earnings in the United States, we paid $1.45 in taxes to federal, state and local governments.
Despite the fact that U.S. oil and gas companies shoulder a significantly higher tax burden than other industries, lawmakers have continued to target our industry for tax hikes. The Administration’s 2012 budget, for example, calls for some $90 billion in new taxes on the industry. These proposals do nothing but increase energy costs at a time when energy security and access should be our priority.
Our 10-K also shows that ExxonMobil is investing in energy projects at home and around the world that contribute to global energy security.
For example, our capital and exploration investments totaled a record $32.2 billion in 2010, with $7.8 billion of that in the U.S. We’ve invested $126 billion in energy projects around the world over the last five years, and more than $26 billion of that amount was invested in our U.S. operations. These investments generate jobs and other economic benefits for American workers.
While our taxes and investments represent billions of dollars of U.S. economic activity, they are only a portion of what the U.S. oil and gas industry at large contributes each year. Our industry adds $1 trillion annually to the economy, supports 9.2 million U.S. jobs, and provides more than 60 percent of America’s daily energy needs.
Stable tax and regulatory policies are the means to ensure the oil and gas industry can continue making these contributions to our economic and energy security.