Excluding the impact of special items, the tax benefit on the $81 million pretax loss from continuing operations attributable to Sunoco, Inc. shareholders for the first quarter of 2012 was $28 million compared to a tax benefit of $24 million on a $145 million pretax loss from continuing operations attributable to Sunoco, Inc. shareholders during the first quarter of 2011. The increase in the tax benefit was primarily attributable to the absence of $6 million of unfavorable tax adjustments in the first quarter of 2011. The first quarter of 2012 included $3 million of favorable adjustments.
During the first quarter of 2012, Sunoco recognized gains of $497 million ($302 million after tax) attributable to the reduction of crude oil and refined product LIFO inventories primarily attributable to the idling of the Marcus Hook refinery; recognized a $104 million gain ($61 million after tax) attributable to the participation payment received from PBF Energy, Inc. (“PBF”) based on PBF’s earnings of the Toledo refinery which Sunoco divested in March 2011; recorded a $35 million provision ($21 million after tax) for severance, contract terminations and idling expenses largely attributable to the Marcus Hook idling; recorded a $53 million provision ($31 million after tax) for additional environmental reserves attributable to current and prior refining operations; recorded a $21 million provision ($11 million after tax) primarily related to additional stock-based compensation expense related to the spin-off of SunCoke Energy and an insurance reserve adjustment; and recognized income from discontinued cokemaking and chemicals operations of $1 million ($1 million after tax). The total net impact of special items during the first quarter of 2012 was income of $493 million ($301 million after tax).During the first quarter of 2011, Sunoco recognized a $15 million gain ($4 million after tax) related to the divestment of the Toledo refinery and related inventory; recognized a $42 million gain ($26 million after tax) resulting from the reduction of crude oil and refined product inventories at the Toledo refinery prior to its divestment; recorded a $6 million provision ($4 million after tax) primarily for pension settlement losses in connection with business improvement initiatives carried out over the past few years; recorded a $5 million increase to deferred income taxes in part due to apportionment changes as a result of the sale of the Toledo refinery; and recognized pretax income from discontinued cokemaking and chemicals operations of $4 million ($1 million loss after tax). The total net impact of special items during the first quarter of 2011 was a pretax gain of $55 million ($20 million after tax).
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