Income Taxes

Excluding the impact of special items, the tax expense on $197 million of pretax income from continuing operations attributable to Sunoco, Inc. shareholders for the second quarter of 2012 was $68 million compared to tax expense of $22 million on $42 million of pretax income from continuing operations attributable to Sunoco, Inc. shareholders during the second quarter of 2011. The increase in tax expense was primarily attributable to the increase in pretax income from continuing operations.

Special Items

During the second quarter of 2012, Sunoco recognized a $59 million gain ($35 million after tax) related to the reversal of certain severance, contract termination and idling reserves that are not expected to be incurred as a result of the joint venture agreement with The Carlyle Group; recognized gains of $213 million ($121 million after tax) attributable to the reduction of refined product LIFO inventories primarily attributable to the idling of the Marcus Hook refinery; recorded a $15 million provision ($8 million after tax) largely related to pension settlement losses attributable to refining operations; recorded a $21 million provision ($13 million after tax) related to an insurance reserve adjustment; and recorded a $29 million provision ($20 million after tax) largely related to additional stock-based compensation expense resulting from the spin-off of SunCoke Energy, Inc. and employee termination agreements and expenses related to the proposed merger with Energy Transfer Partners, L.P. The total net impact of special items during the second quarter of 2012 was income of $207 million ($115 million after tax).

During the second quarter of 2011, Sunoco recognized a $9 million gain ($6 million after tax) from the remeasurement of its pre-acquisition equity interests in a pipeline joint venture to fair value; recorded a $7 million provision ($4 million after tax) primarily related to asset write-downs at the Eagle Point refinery and recognized pension settlement losses of $9 million ($5 million after tax) attributable to the divestment of the Toledo refinery. The total net impact of special items during the second quarter of 2011 was a pretax loss of $7 million ($3 million after tax).

If you liked this article you might like

Activision Blizzard, EPR Properties, AbbVie: 'Mad Money' Lightning Round

How Much Cash Do You Have on You?: Cramer's 'Mad Money' Recap (Monday 8/14/17)

Investors Need to Closely Watch Mario Draghi's Speech at Jackson Hole: Market Recon

Market Recon: It's Obvious the U.S. Consumer Is Far From Being OK