DETAILS OF SECOND QUARTER RESULTS
Logistics earned $82 million pretax in the second quarter of 2012 versus $54 million in the second quarter of 2011. The increase in earnings was primarily due to expanded crude oil volumes and margins resulting from market related opportunities in West Texas and contributions from acquisitions completed during 2011. Higher crude oil pipeline fees and earnings attributable to refined product acquisition and marketing activities also contributed to the improved results.
Retail Marketing had pretax income of $73 million in the current quarter versus $69 million in the second quarter of 2011. Higher retail gasoline and diesel margins were partially offset by lower gasoline volumes.
Refining and Supply
Refining and Supply had pretax income of $87 million in the current quarter versus a $44 million loss in the second quarter of 2011. The improvement in results was largely due to higher realized margins, lower expenses attributable to the idling of the Marcus Hook refinery in December 2011 and lower depreciation expense resulting from significant asset write-downs during the second half of 2011. These positive factors were partially offset by lower production volumes. Average crude throughputs were down 34 percent versus the second quarter of 2011 as a result of the idling of the Marcus Hook refinery.
Corporate administrative expenses were $19 million pretax in the current quarter versus $18 million in the second quarter of 2011. Higher accruals for incentive compensation were largely offset by lower staffing costs.
Net financing expenses and other were $26 million pretax in the second quarter of 2012 compared to $19 million in the second quarter of 2011. The increase is primarily attributable to higher interest expense associated with borrowings of Sunoco Logistics Partners L.P. and the absence of interest income related to notes receivable balances resulting from the sale of the Toledo refinery.