Here are some interesting statistics from ExxonMobil’s press release on fourth-quarter and full-year earnings:
- Earnings and revenues – ExxonMobil earned $32.5 billion worldwide, and $9.6 billion in the United States, on $412 billion in global revenues – or about 7.9 cents for every dollar of revenue we took in.
- Capital spending – We made $38.5 billion worth of capital and exploration expenditures to find and produce future supplies of energy. A significant portion of that investment – more than $12 billion, to be specific – took place in the United States, something the Progressive Policy Institute notes each year when compiling its annual U.S. “Investment Heroes” list.
- Taxes – We paid $82.9 billion around the world in income taxes, sales taxes, and other levies.
- Effective tax rate – ExxonMobil’s effective global tax rate in 2014 worked out to 41 percent.
Those are big numbers, of course, a reflection of the sheer size of the global energy industry and the billions of people it serves.
But just because the numbers are big doesn’t mean that it isn’t a fiercely competitive business.
Readers should view our performance in 2014 against the backdrop of a weak economic recovery and vast transformations within our industry.
Lower oil prices and an integrated approach
As everyone knows, the second half of 2014 saw a significant drop in global crude oil prices, which had an impact on results as well as overall industry profitability.
We also continue to face a particularly challenging environment in the part of the business we call the Downstream – which refines crude oil into products such as gasoline and diesel and then transports and markets those products to consumers.
In the most recent quarter, for instance, ExxonMobil earned just 2.2 cents on every gallon of gasoline and other products refined, shipped and sold worldwide. In the United States, we actually lost money on these operations during this period.
Despite these challenges, however, our integrated business model – which combines the Downstream with finding and producing oil and gas in the Upstream and our Chemical manufacturing operations – uniquely positions ExxonMobil to deliver strong results throughout the commodity price cycle.
That balanced portfolio has enabled us to post solid results even during difficult circumstances. And it has helped us to make significant economic contributions all the while we are helping provide the energy supplies the global economy needs to function.
ExxonMobil in the United States
In 2014, ExxonMobil’s direct contribution to the U.S. economy was $62 billion. That works out to $170 million every single day in the form of capital ($12 billion) and operating ($20 billion) expenditures, taxes ($10 billion), and returns to shareholders as dividends and share buybacks ($20 billion).
That $62 billion direct contribution to the American economy was more than five times larger than the $9.6 billion that ExxonMobil earned in the United States in 2014.
President Obama’s misguided call yesterday for $95 billion in new taxes on the oil and natural gas industry disregards the important nature of our operations and the significant contributions our industry makes to the U.S. economy.
The best guarantor of sound public policy is information and knowledge, which is why I will continue to highlight numbers such as these in this space.