Sale of Sunoco Expected to Close in Fourth Quarter

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Sale of Sunoco Expected to Close in Fourth Quarter

08/02/2012

PHILADELPHIA -- Energy Transfer Partners’ (ETP) purchase of Sunoco Inc. is on track to close in the "early part" of the fourth quarter of this year, Sunoco President and CEO Brian P. MacDonald said during the company's 2012 fiscal second-quarter earnings conference call today. "We continue to move forward with the merger process as seen in ETP's filing on a draft Form S-4 registration statement," he said.

"We are very excited to join ETP and capture synergies through the combination."

Once ETP officially takes over Sunoco's businesses, however, it is unknown what will happen to the latter's 5,400 convenience stores and gas stations. Several media reports have stated ETP will attempt to sell the entire retail business because it is not related to its current core operations. Several c-store chains have been named as potential bidders for some or all of the stores, including Marathon Petroleum Corp., parent of Speedway LLC; Global Partners LP; and Alimentation Couche-Tard Inc., parent of Circle K stores in the United States.

MacDonald did not discuss -- nor was he asked a question about -- the future of Sunoco’s convenience stores and gas stations during today’s earnings call.

As for its Q2 earnings, the retail division earned a net profit of $73 million vs. a $69-million profit in its 2011 fiscal second quarter. Sunoco said retail gasoline and diesel margins were stronger than last year's comparable timeframe. However, those margins were partially offset by lower gasoline volumes.

"Our retail division delivered strong results [in the latest quarter]," MacDonald said during the call. "That business sees some quarter-to-quarter volatility, but it continues to deliver strong results."

Companywide, Sunoco achieved $248 million in net income for its latest quarter, compared to a loss of $125 million in 2011's second quarter. Excluding one-time special items, Sunoco earned $129 million in net income for its 2012 fiscal second quarter, compared to a $20-million profit last year.