“Sunoco Logistics Partners L.P. had its best quarter ever and our logistics segment contributed $54 million to Sunoco’s earnings. Likewise, our retail segment also contributed strong earnings that approached a record for second quarter results,” says CEO.
Sunoco Inc. has released its second quarter 2011 financial results, reporting a net loss attributable to Sunoco shareholders of $125 million ($1.03 per share diluted) versus net income attributable to Sunoco shareholders of $145 million ($1.20 per share diluted) for the second quarter of 2010.
Excluding special items, Sunoco had income of $49 million ($0.40 per share diluted) for the second quarter of 2011 versus income of $158 million ($1.31 per share diluted) for the second quarter of 2010.
“The company’s operations excluding special items were profitable on the strength of our logistics and retail segments. Sunoco Logistics Partners L.P. had its best quarter ever and our logistics segment contributed $54 million to Sunoco’s earnings. Likewise, our retail segment also contributed strong earnings that approached a record for second quarter results. In Refining and Supply, our ability to take advantage of margin improvement was limited by low utilization that continued into April from the first quarter’s operational events. With the reliability issues addressed, Refining and Supply was profitable in May and June,” said Lynn Elsenhans, Sunoco’s chairman and CEO. “We continue to adjust our portfolio of assets to deliver value to shareholders. In our logistics segment, Sunoco Logistics Partners has announced more than $450 million in acquisitions this year, including the July announcement of the acquisition of Texon’s lease crude business.”
Commenting on the coke business, Elsenhans said, “SunCoke Energy’s successful initial public offering marks the culmination of more than a year’s worth of planning. Sunoco currently retains an 81% ownership of SunCoke and expects to distribute its common stock holdings to Sunoco shareholders within a year. We remain focused on delivering value to shareholders.”
Refining and Supply
Refining and Supply had a pretax loss of $44 million in the current quarter versus income of $138 million in the second quarter of 2010. The $182 million decrease in results was primarily due to lower realized margins and production volumes, partially offset by lower expenses. The overall crude utilization rate was 84 percent for the quarter, up from 74% in the first quarter of 2011.
Retail Marketing earned $69 million pretax in the current quarter versus $73 million in the second quarter of 2010. The decrease in earnings was primarily due to higher expenses, which were largely the result of higher credit card fees at company-operated locations as a result of increased retail prices and the absence of a favorable litigation settlement in 2010. The higher expenses were partially offset by higher average retail gasoline and distillate margins.
Logistics earned $54 million pretax in the second quarter of 2011 versus $30 million in the second quarter of 2010. The improvement in results was primarily due to expanded crude oil volumes and margins, which benefited from market-related opportunities and higher earnings attributable to recent acquisitions and organic growth projects.
In May 2011, Sunoco Logistics Partners L.P. obtained an 84% interest in Inland Corp., through a series of transactions involving Sunoco and a third party. Sunoco exercised its rights to acquire additional ownership interests and the Partnership purchased additional ownership interests from third parties for a total of $86 million.
In June 2011, the Partnership announced that it had signed a definitive agreement to purchase a refined products terminal located in East Boston, Mass., from ConocoPhillips for $56 million plus the fair value of inventory. The transaction is expected to be completed in the third quarter of 2011.
In July 2011, the Partnership issued 1.3 million deferred distribution units valued at $98 million and paid $2 million in cash to Sunoco in exchange for the tank farm and related assets located at the Eagle Point refinery.
In August 2011, the Partnership acquired a crude oil purchasing and marketing business from Texon L.P. for $205 million plus the fair value of inventory.
Sunoco is a transportation fuel provider, with operations located primarily in the East Coast and Midwest. The company sells transportation fuels through more than 4,900 branded retail locations in 24 states. Its APlus convenience stores are operated by the company or independent dealers in more than 600 retail locations.