Exxon/Mobile profit soars

[TCO]

Originally posted by Sten Sture
Lets play a game.

Match the XOM cost with it's catagory - from 2002 10-K SEC report. Some catagories were excluded...

All figures in Millions US$

1) Operating expenses
2) Selling, general and administrative expenses
3) Depreciation and depletion
4) Interest expense
5) Excise taxes
6) Other taxes and duties
7) Income taxes
8) Operating income



A) 8,310
B) 22,040
C) 33,572
D) 398
E) 6,499
F) 17,831
G) 11,011
H) 12,356


No fair looking up the numbers.

Just to make fertility-monster feel better, I will play. Won't look at my books either. Which means I will likely screw up the basic accounting definitions.

Thinking:




1. Opex (1) = COGS (not shown) + SGA(2) + Depreciation (3). Doesn't include interest tax or income or interest. Not sure about excise taxes.

2. income taxes should be less than income (about 33%)

So....

1) Operating expenses
C
2) Selling, general and administrative expenses
A
3) Depreciation and depletion
G
4) Interest expense
B
5) Excise taxes
B
6) Other taxes and duties
D
7) Income taxes
E
8) Operating income
F

I'm not too satisfied with my answers, but at least I started to try...

[Sten Sture]

Thanks for playing! (I think I left the answers at the office by the by... so I could make a mistake here.)


#7 = E Income Taxes $6,499MM

These numbers are from the Income Statement detail, so the formula is Revenues - COGS - (#1 thru #7) = #8

[TCO]

I thought that would be Net Income which is different from Operating Income.

[Sten Sture]

I think it was titled Net Operating Income... so you are correct. I pulled Op Inc before tax so you couldn't just do the math.

#4 = D Interest Expense = $398MM


But the real reason I posted this stuff is because of the tax lines...

#5 = B Excise Taxes = $22,040MM


That should give you a hint at what Other taxes and duties were...

[TCO]

Originally posted by Sten Sture
Thanks for playing! (I think I left the answers at the office by the by... so I could make a mistake here.)


#7 = E Income Taxes $6,499MM

These numbers are from the Income Statement detail, so the formula is Revenues - COGS - (#1 thru #7) = #8

I thought Operating Expenses were COGS + SGA + Depreciation. You have Opex as 1. And then have SGA as 2 and Depreciation as 3. So if I use your formula above, I'm subtracting SGA and Depreciation twice.

[Sten Sture]

Your formula is correct, but...

They broke out a seperate Op Ex line in total Operating Expenses along with COGS and SG&A, not sure why. I'll check the detail on their sub-Op Ex, but it read like they were using it as non-Admin, non-COGS. Maybe transport and/or maintenance and refurbishment. I thought it was a little unconventional, but I am not that familiar with Integrated Oils.

FWIW Revenues were ~200B and COGS were ~90B.

[TCO]

(working on this)

This is why it is always hard to deal with this stuff in the real world. Wish I really knew how to do this.

Rev: 200B
COGS: 90B
SGA:
(sub) Op EX:
Depr:
Interest: .3B
excise taxes: 22B
other taxes:
EBT*:
income taxes: 6.5B

Net income:


EBT calculated from income tax is ~ (1/.35) times 6.5B ~ 19.5B. Assume 35% corp tax rate.

So net income is 19.6-6.5 = 13B. Closest to that is "H".

So net income is 12.4B

[TCO]

I guess for the remaining, I would assume that SGA>Depr> transportation>other taxes>.

No real good reason. but that's I guess what the oil industry would look like. Wouldn't be surprised if depr>SGA also.

[Sten Sture]

The reason why I posted this as a question was because it was very different that what I would have guessed...

#3 = A Depreciation and Depletion = $8,310MM

But get this...

The biggest line item was C) $33,572MM and just to make Sava mad, that was #6 Other Taxes and Duties.

#1 = F Operational Expenses = $17,831MM

#2 = H SG&A = $12,356MM

#8 = G Net Profits after Tax $11,011MM


So the company made $11B, and paid $62B in direct taxes. The $30B in Op Ex and SG&A is mostly wages, so you can throw in a good $8-$10B in income and payroll taxes for those funds. A couple billion of the profit is paid out as dividends, taxed at ~30%... I'd say the govy gets a little bit of the revenues of this company.

Just goes to show you that the oil business really is a crap business, and that most of the people that rip on big oil don't understand that the reason the govt loves oil is because of the huge taxes they pay.

[Kidlicious]

Originally posted by Sten Sture
Just goes to show you that the oil business really is a crap business, and that most of the people that rip on big oil don't understand that the reason the govt loves oil is because of the huge taxes they pay.

It works both ways though. They pay high taxes, but they get a lot of benefits. So even though their profits look a little skimpy this year I wouldn't say it were too bad of a business. I wouldn't mind getting into it

[TCO]

Thanks Sten.

[JohnT]

So the company made $11B, and paid $62B in direct taxes. The $30B in Op Ex and SG&A is mostly wages, so you can throw in a good $8-$10B in income and payroll taxes for those funds. A couple billion of the profit is paid out as dividends, taxed at ~30%... I'd say the govy gets a little bit of the revenues of this company.

Wow!!!

Thanks, Sten! That train of thought alone is worth saving this thread.

Does the $62b include the dividend and payroll taxes?

[Sten Sture]

Originally posted by JohnT


Does the $62b include the dividend and payroll taxes?

No it doesn't. I looked it up and the company paid $6.7B in dividends out of net profit. For those of you counting along at home that means that about 2¢ out of every dollar stays at the company. Taxes on those dividends are difficult to track, because most of the shares are held by custodian banks for the benefit of various mutual funds, retirement plans and individuals.

The retirement funds won't pay taxes on those dividends until the retirees take the money out as regular income, so we can ignore that - even though we know past dividends are being paid out to retirees now, so the figure is greater than zero. Mutual funds pass thru the dividends to fund owners who are taxed at their personal tax rate. My best guess is that around 1/2 of the shares are held indirectly by individuals. At a 30% tax rate, the additional tax would be around-about $1 billion.

I 'guesstimated' payroll taxes and indirect income taxes too high before at $8-10 billion. It is probably more likely around $5B.

So XOM and their employees's total tax bill to the IRS is probably around US$68 Billion.

By the by, the top 17 executives at XOM make (salaries and bonuses) around $30 Million a year in total. This amounts to 0.00015 on every dollar of sales. The CEO does about $5.5MM of that. Eliminating top executive compensation would allow the company to pay each employee a couple of hundred dollars a year.

I am not arguing that XOM's management makes too much or too little, or that the company is struggling to survive. However, it would behoove reporters, who publish stories about rich companies and their fat cat execs to put the dollar figures into context instead of sensationalizing the stories.

[Kidlicious]

I don't think this reporter was doing that. Sava was just using his article as a source for the data.

[DanS]

The reason why I posted this as a question was because it was very different that what I would have guessed...

#3 = A Depreciation and Depletion = $8,310MM

You were wondering where the big, fat tax break was for depletion, no?