Sunoco 2011 Annual Report Download - page 48

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Retail Marketing
The Retail Marketing business sells gasoline and middle distillates at retail and operates convenience stores
in 23 states, primarily on the east coast and in the midwest region of the United States.
2011 2010 2009
Pretax income (millions of dollars) ........................................ $ 169 $ 176 $ 146
Retail margin* (per barrel):
Gasoline ........................................................... $ 4.19 $ 3.93 $ 3.72
Middle distillates .................................................... $ 4.02 $ 3.19 $ 6.22
Sales (thousands of barrels daily):
Gasoline ........................................................... 298.4 293.4 291.0
Middle distillates .................................................... 28.4 28.2 30.2
326.8 321.6 321.2
Retail gasoline outlets .................................................. 4,933 4,921 4,711
*Retail sales price less related wholesale price, terminalling and transportation costs and consumer excise taxes per barrel. The retail sales price is the
weighted-average price received through the various branded marketing distribution channels.
Retail Marketing pretax segment income decreased $7 million in 2011 largely attributable to higher
expenses ($44 million) resulting primarily from higher credit card fees, litigation charges and the absence of
favorable settlements recognized during 2010 and lowers gains on asset divestments ($8 million). These negative
factors were largely offset by higher retail gasoline and distillate margins ($36 million) and retail gasoline sales
volumes ($8 million).
Retail Marketing pretax segment income increased $30 million in 2010 primarily due to higher average
retail gasoline margins ($23 million) and lower expenses ($55 million). These positive factors were partially
offset by lower distillate margins ($33 million) and lower gains on asset divestments ($7 million).
In August 2011, Sunoco entered into leasehold agreements for 14 retail locations located in central
Pennsylvania. Each site will be company operated and include an APlus®convenience store.
In January 2011, Sunoco reached an agreement to begin operating the nine fuel stations at service plazas
along the Garden State Parkway and announced an extension on the two fuel stations along the Palisades
Parkway, both located in New Jersey.
In December 2010, Sunoco acquired 25 retail locations in central and northern New York and was selected
by the Ohio Turnpike Commission to operate the fuel stations at the 16 service plazas along the Ohio Turnpike.
Sunoco also entered into agreements with nine new distributors during 2010 and added more than 200 sites to its
portfolio of distributor outlets.
During 2009, Sunoco sold its retail heating oil and propane distribution business for $83 million and
recognized a $44 million net gain ($26 million after tax) in connection with the transaction. This gain is shown
separately in Corporate and Other in the Earnings Profile of Sunoco Businesses.
During the 2009-2011 period, Sunoco generated $178 million of divestment proceeds related to the sale of
229 retail sites under a Retail Portfolio Management (“RPM”) program to selectively reduce the Company’s
invested capital in Company-owned or leased sites. Most of the sites were converted to contract dealers or
distributors thereby retaining most of the gasoline sales volume attributable to the divested sites within the
Sunoco branded business. During 2011, 2010 and 2009, net gains of $9, $17 and $24 million, respectively, were
recognized in connection with the RPM program.
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