API co-hosted a blogger conference call with ExxonMobil yesterday to discuss the company's first quarter earnings and energy tax policies. Ken Cohen, ExxonMobil's vice president of public and government affairs, and Jaime Spellings, ExxonMobil's general tax counsel, broke down the company's profits and spoke to misperceptions about the current tax code.

"If we go back and look at the period 2005 to 2010 and look at the United States, our income before taxes was 67 billion (dollars)," Mr. Cohen explained. "And our income taxes for that same period - that includes federal and state income taxes - were $22 billion, for an effective tax rate of over 32 percent."

To provide further insight, Mr. Spellings detailed aspects of the tax code that affect the oil and natural gas industry, including th... more »

Exxon made $10.7 billion worldwide in the first quarter of 2011, which even in Washington, D.C., is a large amount of money. But then, ExxonMobil is a large company, with large, global operations. Its $10.7 billion in earnings was on $114 billion in total revenue - the remainder after about $77 billion in expenses and approximately $28 billion in taxes paid to governments. Indeed, ExxonMobil's U.S. tax bill ($3.1 billion) was more than its U.S. earnings ($2.6 billion).

Bottom line: ExxonMobil earned about 9 cents on each sales dollar - about half the return of some other industries.

So why is the administration complaining about energy company profits while calling for ending tax deductions available to a broad range of U.S. businesses? Good question.

"This is a very tough business, a low-... more »

Earnings reports generate lots of headlines, too little perspective and predictable claims from politicians that the earnings of energy companies prove they aren't giving a fair share to government. With the dust starting to settle from last week's reports, here's some analysis that puts the financials in context. In this post, ExxonMobil VP Ken Cohen explains his company's first-quarter earnings report, which showed ExxonMobil earned about 7 cents for every gallon of gasoline and other products it refined and sold in the United States.

Carpe Diem blog's Mark J. Perry gets inside the ExxonMobil numbers here, and our own post on the numbers from ConocoPhillips is here.

Meanwhile, an Investor's Business Daily editorial counters critics of energy companies' earnings - notably, by comparing th... more »

If you're a regular reader of the EnergyTomorrow blog posts, you've noticed that we've been focusing on a new study this week that quantifies the contributions of oil and natural gas industry stock to state pension plans. On Wednesday, we also hosted a blogger conference call to answer questions and explain the study's findings in more detail. Robert Shapiro, chairman of Sonecon, LLC, and one of the authors of the pension plan study, and Kyle Isakower, API's vice president of regulatory and economic affairs, said the study found that oil and natural gas industry stock substantially out-performed other pension-plan stock holdings during a recent five-year period marked by both a strong economy and the recession.

"If I were the financial manager of the teachers' pension fund in Missouri, I'd... more »

Energy companies are reporting their quarterly financials this week, which is providing fodder for those who prefer to play politics rather than enact good policies. The typical line we hear from politicians is that company earnings are proof that a fair share is not being given to government, but focusing on just the bottom line obscures the true picture. Let's take one release as an example.

We see that ConocoPhillips reported first-quarter earnings of $3.0 billion or $2.09 per share. But a look at the full release shows that this $3.0 billion comes on total revenues of $58.25 billion - a 5.18% return. In other words, ConocoPhillips works hard for their money. We also see that ConocoPhillips paid $4.36 billion in taxes other than income taxes and paid or accrued $2.75 billion in income t... more »