The Mudcat Café TM
Thread #113173   Message #2402831
Posted By: Q (Frank Staplin)
01-Aug-08 - 12:45 AM
Thread Name: BS: Exxon Mobil Corp. Record profits
Subject: RE: BS: Exxon Mobil Corp. Record profits
Return on investment? With regard to a company with over 100 years of investments? In fact two such companies, merged? My mind is boggled at the thought.
Let's see what the Annual Report shows. Some figures, in no particular order, but pertinent. 2006; last one published on the net.
One can get a figure for 'return on investment,' but I am not sure that it is meaningful.

-Net income, $39 billion
-Return on average capital employed, 32%
-Dividends paid $7.6 billion
-Purchase of stock from shareholders $25 billion
Thus $32.6 billion paid out to shareholders
-New Investment in the business, $20 billion in 2006
-Research and Development $700 million in 2006
-Seven start-up projects in 2006- In West Africa, Malaysia, Azerbaijan, Norway and Canada- each of these were researched and brought to development over several years
(personal note, I contributed to the initial Canadian project research some 30 years ago- it takes a long time to prove something out in exploration and to reach the stage where the project will provide a return, sometimes it is years before prices rise to the point that it becomes economically viable. I also did work on the Arctic, a very complex area and subject to pie in the sky guesstimates).

-Overall, some 60 major projects in various stages of development.
Purpose is to meet petroleum demands in 2030 that will be some 60% greater than in 2000.
-Proved reserves additions replaced 122% of production.

-Cash at year end- $28 billion
-Total assets at year end- $219 billion
-Total debt at year end $8.3 billion
-Shareholders equity $114 billion
-Average capital employed $122.5 billion
-Market valuation at year end $439 billion

Net income per common share $6.68
Current Assets to current liabilities 1.55

There are a few figures to play with. See the Annual Report for more and details.

Of particular interest in the Report is the section on Outlook for 2030, when demand is predicted to be 115 million barrels per day. The world's resources are adequate to meet rising demand through 2030, but huge investments will be required.

In 2030, oil, gas and coal will still be predominant!
Rising CO2 emissions pose significant risks for society and ecosystems, but the best options are yet to be picked and balanced.
[Much depends on international agreements, which may be difficult to reach- how?? this is my comment, not theirs.]

Exxon-Mobil scientists and economists predict that alternative fuels from crops, coal and natural gas will supply only a fracion of the fuel needed. Lots of talk, but oil will be at the top for decades.
In China and India, the developing economies will use coal to generate electricity, because their coal is abundant and the lowest cost option.
'Significant' growth in nuclear and renewable fuels is forseen.

Whew! Should have stopped long ago. Read their annual report, Royal Dutch Shell's, BP's, etc. Lots of data and some different viewpoints.

http://www.exxonmobil.com/corporate/files/corporate/XOM_2006_SAR.pdf

(The easiest way to find the annual reports of any company is Google the company name (in "") followed by 'annual report'.