STREAMING NOW: Watch Now

The tax cut is a $6 billion gift to Exxon

ExxonMobil scored a massive gain from the Republican tax overhaul.The tax windfall helped Exxon's net profits ...

Posted: Feb 2, 2018 3:33 PM
Updated: Feb 2, 2018 3:33 PM

ExxonMobil scored a massive gain from the Republican tax overhaul.

The tax windfall helped Exxon's net profits surge fivefold, the world's largest publicly traded oil company said on Friday.

Excluding the tax bonanza, Exxon's results left Wall Street wanting more. Adjusted earnings unexpectedly declined and revenue missed the mark by a wide margin. Exxon shares slumped about 3% premarket.

One problem: Exxon isn't pumping as much oil as it used to following years of budget cuts forced by the crash in crude prices. The company's overall production dropped 3% in 2017.

Exxon said the federal tax law enacted by President Trump in December gave the company a non-cash earnings gain of $5.9 billion. That's because the corporate tax rate has been lowered from 35% to 21%. Like other companies, the reduced rate allowed Exxon to write down the amount of money it owed Uncle Sam in the future, known as deferred income taxes.

Exxon was not hurt by the part of the tax law that forced companies to bring foreign profits back to the United States. The company said it generally paid taxes on these overseas profits at around 35% anyway, allowing it to avoid a repatriation tax hit.

Related: America does export energy. It imports a lot more

CEO Darren Woods said the tax overhaul "strengthens our commitment to further grow our business" in the United States.

Exxon promised this week to invest more than $50 billion in the U.S. over the next five years, a move that the company said will create "thousands of jobs" and boost the economy.

Specifically, Exxon said it plans to invest "billions of dollars to increase oil production in the Permian Basin" of West Texas and New Mexico, expand existing operations, enhance infrastructure and build new manufacturing sites.

Woods said the investment is "supported by the improved business climate created by tax reform."

However, Exxon did not indicate whether its $50 billion U.S. investment target represents an increase from its previous plan.

Consider that the five-year goal mirrors the roughly $50 billion Exxon spent in the United States between 2012 and 2016, according to filings.

That's because pumping oil and natural gas can be extremely expensive, forcing major companies to spend heavily just to keep their output steady.

Exxon had been expected to shift its resources back to America after the energy company was late to the U.S. shale oil boom because it focused on overseas projects instead.

Exxon said it wants to triple production in the fast-growing Permian Basin shale formation.

Mississippi Coronavirus Cases

Data is updated nightly.

Cases: 268672

Reported Deaths: 5917
CountyCasesDeaths
DeSoto17928195
Hinds17030337
Harrison14510212
Rankin11315223
Jackson11054193
Lee9109147
Madison8663171
Jones6853120
Forrest6260125
Lauderdale6161196
Lowndes5582123
Lafayette5269101
Lamar508765
Washington4965125
Bolivar4164110
Oktibbeha411585
Panola389881
Pontotoc380460
Monroe3727111
Warren3716103
Marshall360172
Union360165
Pearl River3527106
Neshoba3516158
Leflore3132110
Lincoln308389
Hancock300963
Sunflower294277
Tate281862
Alcorn274055
Pike272984
Itawamba271263
Scott264055
Yazoo258456
Prentiss255454
Coahoma252455
Copiah251549
Tippah251551
Simpson244872
Leake238967
Marion228274
Covington224873
Grenada224673
Wayne216336
Adams216271
Winston208271
George206440
Newton201447
Attala197465
Tishomingo196361
Chickasaw190245
Jasper183138
Holmes172568
Clay168637
Tallahatchie158035
Stone153625
Clarke148762
Calhoun142022
Smith131926
Yalobusha124935
Walthall115438
Greene114929
Noxubee114526
Montgomery112936
Lawrence107917
Carroll106922
Perry105931
Amite102727
Webster98024
Claiborne90125
Tunica89621
Jefferson Davis89330
Benton86923
Humphreys85625
Kemper81220
Quitman7169
Franklin71017
Choctaw64013
Wilkinson60125
Jefferson57321
Sharkey45717
Issaquena1616
Unassigned00

Alabama Coronavirus Cases

Cases: 445909

Reported Deaths: 6896
CountyCasesDeaths
Jefferson651891049
Mobile32138590
Madison28596223
Tuscaloosa21703276
Montgomery20220336
Shelby19584138
Baldwin17496216
Lee13378109
Morgan12741145
Etowah12196189
Calhoun11626228
Marshall10513126
Houston9097168
Limestone842481
Cullman8363125
Elmore8283112
Lauderdale7986112
DeKalb7935112
St. Clair7915139
Talladega6552112
Walker6068184
Jackson605649
Colbert560194
Blount551794
Autauga544065
Coffee470569
Dale415186
Franklin378150
Russell362816
Chilton348079
Covington344681
Escambia342244
Tallapoosa3184109
Dallas314197
Chambers308575
Clarke307339
Pike267735
Lawrence256958
Marion255763
Winston235243
Bibb224751
Geneva214747
Marengo212031
Pickens201831
Barbour188240
Hale187444
Fayette181230
Butler175960
Cherokee167433
Henry161325
Monroe153521
Randolph148236
Washington144027
Clay131050
Crenshaw126245
Macon124337
Cleburne123627
Lamar121324
Lowndes117636
Wilcox109422
Bullock105829
Perry100518
Conecuh98222
Sumter90828
Greene78323
Coosa64619
Choctaw52224
Out of AL00
Unassigned00
Tupelo
Cloudy
47° wxIcon
Hi: 51° Lo: 44°
Feels Like: 41°
Columbus
Cloudy
51° wxIcon
Hi: 56° Lo: 49°
Feels Like: 51°
Oxford
Cloudy
39° wxIcon
Hi: 50° Lo: 39°
Feels Like: 30°
Starkville
Cloudy
50° wxIcon
Hi: 55° Lo: 45°
Feels Like: 50°
WTVA Radar
WTVA Temperatures
WTVA Severe Weather