Operating expenses of $694.0 million in 2012 were $12.7 million lower than in the prior year, due to the reduced amortization expense offset in part by restructuring costs incurred by Construction Products Distribution and higher corporate costs. The decrease in amortization expense was due to the impairment of Energy Services intangible assets, which was recorded in 2011. Restructuring costs of $6.5 million were incurred by Construction Products Distribution as part of its efforts to optimize the cost structure and $4.2 million was incurred at Energy Services. Corporate costs were higher than in the prior year due to increased long-term incentive costs, which resulted from the increase in Superior's share price and severance costs offset in part by year-end accrual adjustments. Total interest expense of $77.6 million was $7.9 million lower than in the prior year due principally to lower average debt throughout the year due to lower net working capital and higher cash flow. Unrealized gains on financial instruments were $32.1 million in 2012 compared to unrealized losses of $9.7 million in the prior year. The increase in unrealized gains from the prior year is primarily due to higher unrealized gains in the current year on natural gas forward contracts due to fluctuations in the spot prices of natural gas. Gains or losses on Superior's various financial instruments are without consideration of the fair value of the underlying customer or supplier commitment.
Total income tax expense was $9.0 million for 2012 compared to a recovery of $50.4 million for 2011. The increase in income tax expense was due to higher net earnings in 2012 as the prior year included an impairment charge recorded to intangible assets and goodwill which resulted in a net loss.
Energy ServicesEnergy Services' condensed operating results for 2012 and 2011;---------------------------------------------------------------------------- Three months ended Twelve months ended December 31, December 31,(millions of dollars) 2012 2011 2012 2011----------------------------------------------------------------------------Revenue(1) 602.2 727.6 2,301.6 2,686.1Cost of sales(1) (472.6) (597.8) (1,854.2) (2,230.9)----------------------------------------------------------------------------Gross profit 129.6 129.8 447.4 455.2Less: Cash operating and administrative costs(1) (83.5) (83.3) (313.2) (321.6)----------------------------------------------------------------------------EBITDA from operations 46.1 46.5 134.2 133.6--------------------------------------------------------------------------------------------------------------------------------------------------------(1) In order to better reflect the results of its operations, Superior has reclassified certain amounts for purposes of this Financial Discussion to present its results as if it had accounted for various transactions as accounting hedges. See "Reconciliation of Divisional Segmented Revenue, Cost of Sales and Cash Operating and Administrative Costs Included in this Financial Discussion" for detailed amounts.
Revenues for the fourth quarter of 2012 were $602.2 million, a decrease of $125.4 million from revenues of $727.6 million in 2011. The decrease in revenues is primarily due to lower commodity prices and sales volumes as compared to the prior year quarter. Total gross profit for the fourth quarter of 2012 was $129.6 million, a decrease of $0.2 million or nil% over the prior year quarter. The slight decrease in gross profit is primarily due to lower fixed-price energy services natural gross profits offset in part by higher gross margins within the Canadian propane segment. A summary and detailed review of gross profit is provided below.
Gross Profit Detail---------------------------------------------------------------------------- Three months ended Twelve months ended December 31, December 31,(millions of dollars) 2012 2011 2012 2011----------------------------------------------------------------------------Canadian propane distribution 68.1 62.3 235.7 223.0U.S. refined fuels distribution 37.3 37.9 123.1 137.7Other services 11.4 12.9 39.6 42.3Supply portfolio management 6.5 6.4 18.3 15.1Fixed-price energy services 6.3 10.3 30.7 37.1----------------------------------------------------------------------------Total gross profit 129.6 129.8 447.4 455.2--------------------------------------------------------------------------------------------------------------------------------------------------------
