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EX-99.2 - SLIDE PRESENTATION - SUNOCO INCdex992.htm
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Exhibit 99.1

LOGO

Sunoco, Inc.

1735 Market Street

Philadelphia, Pa. 19103-7583

 

For further information contact                                    For release: IMMEDIATELY   

Thomas Golembeski (media) 215-977-6298

  

Clare McGrory (investors) 215-977-6764

  

No. 6 -10

SUNOCO REPORTS FOURTH QUARTER 2009 RESULTS;

MAINTAINS FOCUS ON COST REDUCTION;

TAKES ADDITIONAL ACTIONS TO IMPROVE BALANCE SHEET AND LIQUIDITY

PHILADELPHIA, February 4, 2010 — Sunoco, Inc. (NYSE: SUN) today reported net income attributable to Sunoco shareholders of $26 million ($0.22 per share diluted) for the fourth quarter of 2009 compared to net income attributable to Sunoco shareholders of $204 million ($1.74 per share diluted) for the fourth quarter of 2008. Excluding special items, Sunoco had a loss for the 2009 fourth quarter of $31 million ($0.27 per share diluted) compared to 2008 fourth quarter income of $313 million ($2.68 per share diluted).

For the full-year 2009, Sunoco reported a net loss attributable to Sunoco shareholders of $329 million ($2.81 per share diluted) compared to net income attributable to Sunoco shareholders of $776 million ($6.63 per share diluted) in 2008. Excluding special items, Sunoco reported a loss of $37 million ($0.32 per share diluted) in 2009 compared to income of $874 million ($7.46 per share diluted) in 2008.

Year in Review

“While we entered 2009 expecting a challenging market for petroleum and chemical products, the depth and scale of the global economic downturn and its impact on our industry was even greater than anticipated,” said Lynn Elsenhans, Chairman and Chief Executive Officer. “In this difficult environment, the Company continues to take aggressive actions to address those issues within our control. While our refining and chemicals results were significantly impacted in 2009 by weak demand and rising feedstock costs, we managed to produce strong earnings in our other businesses as a result of good execution and a sharp focus on costs. We successfully executed our business improvement initiative, exceeding the targeted $300 million in cost savings on an annualized basis by the end of 2009. Despite the challenging economy, Sunoco also effectively managed working capital and maintained a relatively strong financial position.”


“In 2010, we expect to see a full year’s benefit of the lower cost structure from both the business improvement initiative and closure of the Eagle Point refinery. We will also benefit from reducing the dividend and scaling back our pension and healthcare benefits.”

As previously disclosed, the changes to pension and healthcare benefits are effective June 30, 2010. As a result of these changes, pension and retiree medical liabilities were reduced by approximately $95 million as of December 31, 2009, which will be recognized as a benefit to income through 2019.

Strategic Portfolio Changes

Elsenhans continued, “We continue to expect a challenging market for petroleum and chemical products due to ongoing economic weakness and excess global supply. However, the Company has responded to the market environment with several strategic actions to improve our competitive cost position and optimize our portfolio and operating performance. Most recently, we announced that we have shut down our previously idled Eagle Point refinery and that we have signed a definitive agreement to sell our polypropylene business, which comprises a significant portion of our Chemicals business, for approximately $350 million in cash, which we believe represents good value for our shareholders. Earlier in 2009, we sold our Tulsa refinery and Retail Home Heating Oil business. These portfolio changes addressed areas of the business that were not meeting their cost of capital and allow the company to redeploy capital to the growth of our Logistics and Coke businesses while continuing to invest in our strong retail brand.”

Sunoco expects to take a pre-tax charge in the first quarter of 2010 for the loss on the sale of the polypropylene business of approximately $185 to $195 million.

The Company’s capital spending for 2010 is expected to be approximately $840 million with approximately $280 million of growth capital allocated to the Coke business for the construction of a new coke plant at Middletown, OH and for committed Logistics opportunities.

Sunoco Takes Actions to Improve Balance Sheet and Liquidity

The Company is taking several actions to strengthen its balance sheet and liquidity in early 2010:

 

   

The Company has modified the Incentive Distribution Rights (IDRs) that entitle Sunoco to receive cash in excess of its general partner’s interest from Sunoco Logistics Partners L.P. This transaction will provide Sunoco with approximately $200 million of cash in exchange for a portion of future cash flows from the IDRs while also improving the cost of capital of Sunoco Logistics Partners L.P. and enhancing its long-term growth potential.


   

Sunoco strengthened its liquidity position through the sale of 2.2 million of its Limited Partnership (LP) units in Sunoco Logistics Partners L.P. for net cash proceeds of approximately $145 million.

 

   

The Company plans to bolster the funded status of its pension plan with a contribution of approximately $200 million, about equally split between cash and Sunoco common stock. The pension contributions will generate a cash tax benefit for the Company in the first half of 2010, with minimal dilutive impact to existing Sunoco shareholders. Furthermore, the pension contributions are expected to eliminate the need for any legally required minimum pension contributions until 2012. The combination of these large discretionary contributions and the previously announced modifications to the Company’s defined benefit pension plans and postretirement medical benefits significantly bolsters the funded status of the pension plan and reduces future funding needs for these obligations.

Commenting on these actions, Elsenhans said, “All of these initiatives, along with our continued focus on cost reduction, serve to strengthen the balance sheet and will enable us to maintain our financial flexibility and grow our non-refining businesses as we manage through this refining down cycle.”

Sunoco’s Board of Directors today declared a cash dividend for the first quarter of 2010 of $0.15 per share and the Company’s management believes that Sunoco’s current dividend level is sustainable under current conditions.

DETAILS OF FOURTH QUARTER RESULTS

REFINING AND SUPPLY- Continuing Operations

Refining and Supply had a loss from continuing operations of $135 million in the fourth quarter of 2009 versus income of $146 million in the fourth quarter of 2008. The decrease in results was due to lower realized margins and production volumes, partially offset by lower expenses. Our realized margins continued to be negatively affected by market weakness during the quarter. The overall crude utilization rate was 85 percent for the quarter, up from 74 percent in the third quarter of 2009. This increase reflects higher utilization at the Philadelphia and Marcus Hook refineries as a result of a shift of production from the Eagle Point refinery in connection with the idling of this facility in early November. First quarter production in 2010 will be impacted by planned turnarounds at both our Marcus Hook and Toledo refineries.

REFINING AND SUPPLY- Discontinued Operations

Discontinued Tulsa refining operations, which were divested on June 1, 2009, had income of $36 million in the fourth quarter of 2008.


RETAIL MARKETING

Retail Marketing earned $21 million in the current quarter versus $103 million in the fourth quarter of 2008. The decrease in earnings was primarily due to lower average retail gasoline and distillate margins, partially offset by lower expenses. Sales volumes were up slightly versus the year-ago quarter. Retail gasoline margins in the second half of 2008 benefited from the rapid decrease in wholesale prices during that period, while wholesale prices were rising during much of the second half of 2009.

CHEMICALS

Chemicals reported income of $6 million in the fourth quarter of 2009 versus a loss of $4 million in the fourth quarter of 2008. The increase in results was due primarily to lower expenses and the absence of a $12 million after-tax unfavorable lower of cost or market adjustment to Chemicals’ polypropylene inventory that was recorded in the fourth quarter of 2008. Partially offsetting these positive factors were lower margins and sales volumes.

LOGISTICS

Logistics earned $22 million in the fourth quarter of 2009 versus $29 million in the fourth quarter of 2008. The decrease in earnings was due primarily to lower results from lease crude marketing activities, partially offset by higher earnings from refined product pipeline and terminalling operations.

COKE

Coke earned $78 million in the fourth quarter of 2009 compared to $28 million in the fourth quarter of 2008. The increase in earnings was due primarily to the recognition of a one-time $41 million investment tax credit associated with the start up of the Granite City facility and $6 million of after-tax dividend income from the Brazilian cokemaking operations.

CORPORATE AND OTHER

Corporate Expenses — Corporate administrative expenses were $6 million after tax in the fourth quarter of 2009 versus $20 million after tax in the fourth quarter of 2008. Corporate expenses decreased primarily due to lower payroll and other employee-related costs.

Net Financing Expenses and Other – Net financing expenses and other were $17 million after tax in the fourth quarter of 2009 versus $5 million after tax in the fourth quarter of 2008. The increase was primarily due to higher interest expense and lower capitalized interest.

SPECIAL ITEMS

During the fourth quarter of 2009, Sunoco recorded a $21 million after-tax favorable adjustment to the gain related to the divestment of the discontinued Tulsa operations; recorded a $55 million after-tax


gain from the liquidation of LIFO inventories in connection with the shutdown of the Eagle Point refinery; and recorded a $19 million after-tax provision for costs associated with MTBE litigation as well as additional charges associated with the Eagle Point shutdown and the business improvement initiative. The total net impact of special items during the fourth quarter of 2009 is a benefit of $57 million after tax.

During the fourth quarter of 2008, Sunoco recorded an $85 million after-tax provision to write-down to estimated fair value its Tulsa refinery; recorded a $35 million after-tax provision to write down to estimated fair value its Bayport, TX polypropylene plant; and recorded a $19 million after-tax provision to write off goodwill pertaining to its polypropylene business. During the fourth quarter of 2008, Sunoco also recorded a $16 million after-tax gain related to certain income tax matters and a $14 million after-tax gain resulting from the correction of an error in the computation of a gain recorded in 2007 related to prior issuance of SXL limited partnership units to the public. The total net impact of special items during the fourth quarter of 2008 is a charge of $109 million after tax.

Sunoco, Inc., headquartered in Philadelphia, PA, is a leading manufacturer and marketer of petroleum and petrochemical products. With 675 thousand barrels per day of refining capacity, approximately 4,700 retail sites selling gasoline and convenience items, and an ownership interest in approximately 6,000 miles of crude oil and refined product pipelines and approximately 40 product terminals, Sunoco is one of the largest independent refiner-marketers in the United States. Sunoco is a significant manufacturer of petrochemicals with annual sales of approximately five billion pounds, largely chemical intermediates used to make fibers, plastics, film and resins. Utilizing a technology with several proprietary features, Sunoco’s cokemaking facilities in the United States have the nominal capacity to manufacture approximately 3.67 million tons annually of high-quality metallurgical-grade coke for use in the steel industry. Sunoco also is the operator of, and has an equity interest in, a 1.7 million tons-per-year cokemaking facility in Vitória, Brazil.

Anyone interested in obtaining further insights into the fourth quarter’s results can monitor the Company’s quarterly teleconference call, which is scheduled for 5:30 p.m. ET on February 4, 2010. It can be accessed through Sunoco’s website -www.SunocoInc.com. It is suggested that you visit the site prior to the teleconference to ensure that you have downloaded any necessary software.

Those statements made in this release that are not historical facts are forward-looking statements intended to be covered by the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements are based upon assumptions by the Company concerning future conditions, any or all of which ultimately may prove to be inaccurate, and upon the current knowledge, beliefs and expectations of Company management. These forward-looking statements are not guarantees of future performance. The reader should not place undue reliance on these forward-looking statements, which speak only as of


the date of this press release. The Company expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of the Company) that could cause actual results to differ materially from those discussed in this release. Those statements concerning future dividend declarations are subject to approval by the Company’s Board of Directors and will be based upon circumstances then existing.

Such risks and uncertainties include economic, business, competitive and/or regulatory factors affecting the Company’s business, as well as uncertainties related to the outcomes of pending or future litigation, legislation, or regulatory actions. Among such risks are: changes in crude oil or natural gas prices, refining, marketing and chemicals margins, or other market conditions affecting the oil and gas industry; higher-than-expected costs of, or delays in, planned development or completion of repair projects, capital projects, acquisitions, or dispositions; operational interruptions, unforeseen technical difficulties and/or changes in technical or operating conditions; general domestic and international economic and political conditions, wars and acts of terrorism or sabotage; the outcome of commercial negotiations; the actions of competitors or regulators; the competitiveness of alternate-energy sources or product substitutes; technological developments; liability resulting from pending or future litigation; significant investment or product changes and/or liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to the acquisition, disposition or impairment of assets; recapitalizations; access to, or significantly higher costs of, capital; the effects of changes in accounting rules applicable to the Company; and changes in tax, environmental and other laws and regulations applicable to the Company’s businesses. Unpredictable or unknown factors not discussed in this release also could have material adverse effects on forward-looking statements.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company has included in its Annual Report on Form 10-K for the year ended December 31, 2008 and in its subsequent Form 10-Q and Form 8-K filings, cautionary language identifying other important factors (though not necessarily all such factors) that could cause future outcomes to differ materially from those set forth in the forward-looking statements. For more information concerning these factors, see the Company’s Securities and Exchange Commission filings, available on the Company’s website at www.SunocoInc.com.

-END OF TEXT, CHARTS FOLLOW-


Sunoco, Inc.

2009 Fourth Quarter and Twelve-Month Financial Summary

(Unaudited)

 

      2009     2008*

Fourth Quarter

    

Revenues

   $ 8,973,000,000      $ 8,641,000,000

Net Income (Loss)

   $ 56,000,000     $ 243,000,000

Less: Net Income Attributable to Noncontrolling Interests

     30,000,000       39,000,000
              

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders

   $ 26,000,000      $ 204,000,000
              

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders Per Share of Common Stock:

    

Basic

   $ .22      $ 1.75

Diluted

   $ .22      $ 1.74

Weighted-Average Number of Shares Outstanding (In Millions):

    

Basic

     116.9        116.9

Diluted

     117.0        117.0

Twelve Months

    

Revenues

   $ 31,312,000,000      $ 51,076,000,000

Net Income (Loss)

   $ (200,000,000   $ 889,000,000

Less: Net Income Attributable to Noncontrolling Interests

     129,000,000        113,000,000
              

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders

   $ (329,000,000   $ 776,000,000
              

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders Per Share of Common Stock:

    

Basic

   $ (2.81   $ 6.63

Diluted

   $ (2.81 )**   $ 6.63

Weighted-Average Number of Shares Outstanding (In Millions):

    

Basic

     116.9        117.0

Diluted

     116.9 **      117.1

 

* Reclassified to reflect the adoption of new accounting guidance concerning the accounting and reporting of noncontrolling interests. Net income attributable to noncontrolling interests relates to income from Sunoco Logistics Partners L.P. and SunCoke Energy’s Indiana Harbor cokemaking operations.
** Since the assumed issuance of common stock under stock incentive awards would not have been dilutive, the diluted per share amounts are equal to the basic per share amounts.


Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     Three Months Ended  
     December 31     Sept. 30
2009
 
     2009     2008    

Refining and Supply:

      

Continuing operations

   $ (135   $ 146      $ (118

Discontinued Tulsa operations

     —          36        —     

Retail Marketing

     21        103        49   

Chemicals

     6        (4     (1

Logistics

     22        29        19   

Coke

     78        28        35   

Corporate and Other:

      

Corporate expenses

     (6     (20     (6

Net financing expenses and other

     (17     (5     (12
                        
     (31     313        (34

Special items

     57     (109 )**      (278 )
                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ 26      $ 204      $ (312
                        

Earnings (loss) per share of common stock (diluted):

      

Income (loss) attributable to Sunoco, Inc. shareholders before special items

   $ (.27   $ 2.68     $ (.29

Special items

     .49        (.94     (2.38
                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ .22     $ 1.74     $ (2.67 )
                        

 

* Includes a $21 million net after-tax favorable adjustment to the gain recognized in connection with the divestment of the Tulsa refining operations.
** Includes an $85 million after-tax provision for asset write-downs attributable to the Tulsa refinery.


Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     Twelve Months
Ended
December 31
 
     2009     2008  

Refining and Supply:

    

Continuing operations

   $ (316   $ 448   

Discontinued Tulsa operations

     3        67   

Retail Marketing

     86        201  

Chemicals

     1        36  

Logistics

     97        85  

Coke

     180        105  

Corporate and Other:

    

Corporate expenses

     (38     (46

Net financing expenses and other

     (50     (22
                
     (37     874  

Special items*

     (292     (98
                

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ (329   $ 776  
                

Earnings (loss) per share of common stock (diluted):

    

Income (loss) attributable to Sunoco, Inc. shareholders before special items

   $ (.32   $ 7.46  

Special items

     (2.49     (.83
                

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ (2.81   $ 6.63  
                

 

* Includes a $41 million net after-tax gain recognized in connection with the divestment of the Tulsa refining operations and a $3 million after-tax provision for asset write-downs attributable to the Tulsa refinery in 2009 and a $95 million after-tax provision for asset write-downs attributable to the Tulsa refinery in 2008.


Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

     For the Three
Months Ended
    For the Twelve
Months Ended
     December 31    Sept. 30
2009
    December 31
     2009     2008      2009     2008

REFINING AND SUPPLY*

           

Income (Loss) (Millions of Dollars)

   $ (135   $ 146    $ (118   $ (316   $ 448

Realized Wholesale Margin** (Per Barrel of Production Available for Sale)

   $ 1.96      $ 8.98    $ 2.72      $ 3.66      $ 8.60

Market Benchmark*** (Per Barrel)

   $ 4.59      $ 6.60    $ 5.57      $ 5.98      $ 8.88

Crude Inputs as Percent of Crude Unit Rated Capacity+

     85        87      74        78        86

Throughputs (Thousand Barrels Daily):

           

Crude Oil

     617.4        714.6      613.3        625.4        706.5

Other Feedstocks

     67.4        89.3      66.4        70.8        84.8
                                     

Total Throughputs

     684.8        803.9      679.7        696.2        791.3
                                     

Products Manufactured (Thousand Barrels Daily):

           

Gasoline

     365.5        391.9      346.0        357.9        382.9

Middle Distillates

     219.3        286.0      219.3        225.3        285.4

Residual Fuel

     52.2        60.4      61.5        59.2        56.4

Petrochemicals

     26.3        30.9      25.7        27.3        34.5

Other

     53.4        68.5      49.2        54.7        64.4
                                     

Total Production

     716.7        837.7      701.7        724.4        823.6

Less: Production Used as Fuel in Refinery Operations

     35.0        39.1      32.5        34.5        38.0
                                     

Total Production Available for Sale

     681.7        798.6      669.2        689.9        785.6
                                     

 

* Excludes amounts attributable to the Tulsa refinery for all periods presented. The Tulsa refinery was sold to Holly Corporation on June 1, 2009.
** Wholesale sales revenue less related cost of crude oil, other feedstocks, product purchases and terminalling and transportation divided by production available for sale.
*** Represents a weighted-average refinery benchmark margin comprised of a 6-3-2-1 Value-Added Benchmark relating to the Northeast refining operations (80% weight) and a 4-3-1 Benchmark relating to the Toledo refinery (20% weight).
+

Reflects the impact of a 150 thousand barrels-per-day reduction in crude unit capacity in November 2009 attributable to the shutdown of the Eagle Point refinery.


Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

     For the Three
Months Ended
    For the Twelve
Months Ended
 
     December 31     Sept. 30
2009
    December 31  
     2009     2008       2009     2008  

RETAIL MARKETING

          

Income (Millions of Dollars)

   $ 21      $ 103      $ 49      $ 86      $ 201   

Retail Margin* (Per Barrel):

          

Gasoline

   $ 3.70      $ 9.61      $ 5.48      $ 3.72      $ 6.30   

Middle Distillates

   $ 3.33      $ 10.86      $ 4.92      $ 6.22      $ 7.20   

Sales (Thousand Barrels Daily):

          

Gasoline

     286.8        284.2        294.9        291.0        287.4   

Middle Distillates

     24.3        38.3        29.5        30.2        37.7   
                                        
     311.1        322.5        324.4        321.2        325.1   
                                        

Total Retail Gasoline Outlets, End of Period

     4,711        4,720        4,704        4,711        4,720   

Gasoline and Diesel Throughput per Company-Owned or Leased Outlet (M Gal/Site/Month)

     153        143        156        151        147   

Convenience Stores:

          

Total Stores, End of Period

     578        703        627        578        703   

Merchandise Sales (M$/Store/Month)

   $ 91      $ 81      $ 104      $ 91      $ 83   

Merchandise Margin (Company Operated) (% of Sales)

     27     27     27     28     27
                                        

 

*       Retail sales price less related wholesale price and terminalling and transportation costs per barrel. The retail sales price is the weighted-average price received through the various branded marketing distribution channels.

 

           

CHEMICALS

          

Income (Loss) (Millions of Dollars)

   $ 6      $ (4 )   $ (1   $ 1      $ 36   

Margin* (Cents per Pound):

          

All Products**

     9.6        11.2       8.9        8.7        10.7   

Phenol and Related Products

     9.7        11.7       7.3        8.0        9.6   

Polypropylene**

     9.6        10.9       10.7        9.5        12.1   

Sales (Millions of Pounds):

          

Phenol and Related Products

     457        477       483        1,774        2,274   

Polypropylene

     487        542       432        1,925        2,204   

Other

     7        8       6        21        65   
                                        
     951        1,027       921        3,720        4,543   
                                        

 

* Wholesale sales revenue less cost of feedstocks, product purchases and related terminalling and transportation divided by sales volumes.
** The polypropylene and all products margins include the impact of a long-term supply contract with Equistar Chemicals, L.P. which is priced on a cost-based formula that includes a fixed discount. These margins exclude an unfavorable lower of cost or market inventory adjustment totaling $20 million ($12 million after tax) for the three months and twelve months ended December 31, 2008 and the reversal of this adjustment in the twelve months ended December 31, 2009.


Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

     For the Three
Months Ended
    For the Twelve
Months Ended
 
     December 31     Sept. 30
2009
    December 31  
     2009    2008       2009     2008  

LOGISTICS

           

Income (Millions of Dollars)

   $ 22    $ 29      $ 19      $ 97      $ 85   

Pipeline and Terminal Throughput (Thousand Barrels Daily)*:

           

Unaffiliated Customers

     1,378      1,269        1,378        1,436        1,221   

Affiliated Customers

     1,456      1,631        1,445        1,449        1,587   
                                       
     2,834      2,900        2,823        2,885        2,808   
                                       

 

*       Excludes joint-venture operations.

          

COKE

           

Income (Millions of Dollars)

   $ 78    $ 28      $ 35      $ 180      $ 105   

Coke Production (Thousands of Tons):

           

United States*

     778      706        715        2,868        2,626   

Brazil

     383      381        321        1,266        1,581   
                                       

 

*       Includes amounts attributable to a second 550 thousand tons-per-year cokemaking facility at SunCoke Energy’s Haverhill site which commenced operations in the third quarter of 2008 and a 650 thousand tons-per-year cokemaking facility at SunCoke Energy’s Granite City site which commenced operations in the fourth quarter of 2009.

            

CAPITAL PROGRAM (Millions of Dollars)

           

Refining and Supply:

           

Continuing Operations

   $ 54    $ 157      $ 120      $ 377      $ 629   

Discontinued Tulsa Operations

     —        3        —          3        23   

Retail Marketing

     32      55        20        80        128   

Chemicals

     12      17        8        35        49   

Logistics

     67      242     88 **      225 **      330

Coke

     41      105        50        229        312   
                                       
   $ 206    $ 579      $ 286      $ 949      $ 1,471   
                                       

 

*       Includes acquisition of a refined products pipeline system and related storage facilities totaling $185 million.

**     Includes acquisition of crude oil pipeline and refined product terminalling assets totaling $50 million.

          

        

DEPRECIATION, DEPLETION AND

AMORTIZATION* (Millions of Dollars)

           

Refining and Supply

   $ 66    $ 65      $ 64      $ 279 **    $ 251   

Retail Marketing

     24      30        21        95        110   

Chemicals

     16      17        17        65        67   

Logistics

     13      11        13        49        46   

Coke

     9      7        9        33        25   
                                       
   $ 128    $ 130      $ 124      $ 521      $ 499   
                                       

 

* Excludes amounts attributable to the Tulsa refinery for all periods presented. The Tulsa refinery was sold to Holly Corporation on June 1, 2009 and, as a result, has been classified as a discontinued operation in the Company’s consolidated statements of operations.
** Includes $19 million attributable to the write-off of certain assets at the Marcus Hook refinery as a result of a fire at this facility in May 2009.


Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     2008  
     1st     2nd     3rd     4th     Total  

Refining and Supply:

          

Continuing operations

   $ (123   $ 27      $ 398      $ 146      $ 448   

Discontinued Tulsa operations

     —          5        26        36        67   

Retail Marketing

     26       —          72       103       201  

Chemicals

     18       3       19       (4     36  

Logistics

     15       21       20       29       85  

Coke

     25       23       29       28       105  

Corporate and Other:

          

Corporate expenses

     (17     (11     2       (20     (46

Net financing expenses and other

     (3     (7     (7     (5     (22
                                        
     (59     61       559       313       874  

Special Items*

     —          21       (10     (109     (98
                                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ (59   $ 82     $ 549     $ 204     $ 776  
                                        

Earnings (loss) per share of common stock (diluted):

          

Income (loss) attributable to Sunoco, Inc. shareholders before special items

   $ (.50   $ .52     $ 4.78     $ 2.68     $ 7.46  

Special items

     —          .18       (.08     (.94     (.83
                                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ (.50   $ .70     $ 4.70     $ 1.74     $ 6.63  
                                        

 

* Includes provisions for asset write-downs attributable to the Tulsa refinery of $10 and $85 million after tax in the third quarter and fourth quarter of 2008, respectively.


Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     2009  
     1st     2nd     3rd     4th     Total  

Refining and Supply:

          

Continuing operations

   $ 14      $ (77   $ (118   $ (135   $ (316

Discontinued operations

     9        (6     —          —          3   

Retail Marketing

     6        10        49        21        86   

Chemicals

     (4     —          (1     6        1   

Logistics

     30        26        19        22        97   

Coke

     25        42        35        78        180   

Corporate and Other:

          

Corporate expenses

     (11     (15     (6     (6     (38

Net financing expenses and other

     (10     (11     (12     (17     (50
                                        
     59        (31     (34     (31     (37

Special Items*

     (47     (24     (278     57        (292
                                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ 12     $ (55   $ (312   $ 26      $ (329
                                        

Earnings (loss) per share of common stock (diluted):

          

Income (loss) attributable to Sunoco, Inc. shareholders before special items

   $ .50     $ (.27 )   $ (.29   $ (.27   $ (.32

Special items

     (.40 )     (.20 )     (2.38 )     .49        (2.49 )
                                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ .10      $ (.47   $ (2.67   $ .22      $ (2.81
                                        

 

* Includes a $3 million after-tax provision for asset write-downs attributable to the Tulsa refinery in the first quarter of 2009 and $20 and $21 million net after-tax gains recognized in connection with the divestment of the Tulsa refining operations in the second quarter and fourth quarter of 2009, respectively.


Sunoco, Inc.

Consolidated Statements of Operations

(Millions of Dollars)

(Unaudited)

 

     2008*  
     1st     2nd     3rd     4th     Total  

REVENUES

          

Sales and other operating revenue (including consumer excise taxes)

   $ 12,087     $ 15,157     $ 15,135     $ 8,604     $ 50,983  

Interest income

     9       3       4       1       17  

Gain related to issuance of Sunoco Logistics Partners L.P. limited partnership units

     —          —          —          23       23  

Other income, net

     8       19       13       13       53  
                                        
     12,104       15,179       15,152       8,641       51,076  
                                        

COSTS AND EXPENSES

          

Cost of products sold and operating expenses

     11,246        14,060       13,263        7,118       45,687  

Consumer excise taxes

     574       621       631       613       2,439  

Selling, general and administrative expenses

     178        209       207       240       834  

Depreciation, depletion and amortization

     124        120       125       130       499   

Payroll, property and other taxes

     41       33       37       33       144  

Provision for asset write-downs and other matters

     —          (18     —          86       68  

Interest cost and debt expense

     28       28       27       28       111  

Interest capitalized

     (9     (8     (9     (13     (39
                                        
     12,182       15,045       14,281       8,235       49,743   

Income (loss) from continuing operations before income tax expense (benefit)

     (78     134       871       406       1,333  

Income tax expense (benefit)

     (40     31       311       114       416  
                                        

Income (loss) from continuing operations

     (38     103        560        292        917   

Income (loss) from discontinued operations

     —          5        16        (49     (28
                                        

Net income (loss)

     (38     108       576       243       889  

Less: Net income attributable to noncontrolling interests

     21       26       27       39       113  
                                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ (59   $ 82     $ 549     $ 204     $ 776  
                                        

 

* Reclassified to treat the Tulsa refinery that was sold on June 1, 2009 as a discontinued operation and to reflect the adoption of new accounting guidance concerning the accounting and reporting of noncontrolling interests.


Sunoco, Inc.

Consolidated Statements of Operations

(Millions of Dollars)

(Unaudited)

 

     2009  
     1st*     2nd     3rd     4th     Total  

REVENUES

          

Sales and other operating revenue (including consumer excise taxes)

   $ 6,128      $ 7,482     $ 8,634      $ 8,947      $ 31,191   

Interest income

     1        3        1        —          5   

Other income, net

     6        24       60       26        116  
                                        
     6,135        7,509       8,695       8,973        31,312  
                                        

COSTS AND EXPENSES

          

Cost of products sold and operating expenses

     5,090        6,543        7,689        8,042        27,364   

Consumer excise taxes

     569        605        630        583        2,387   

Selling, general and administrative expenses

     175        165        186        173        699   

Depreciation, depletion and amortization

     125        144        124        128        521   

Payroll, property and other taxes

     41        35        34        33        143   

Provision for asset write-downs and other matters

     73        75        511        34        693   

Interest cost and debt expense

     31        39        37        38        145   

Interest capitalized

     (10     (12     (12 )     (5     (39 )
                                        
     6,094        7,594        9,199        9,026        31,913   

Income (loss) from continuing operations before income tax benefit

     41        (85     (504     (53     (601

Income tax benefit

     (4     (50     (218 )     (88     (360
                                        

Income (loss) from continuing operations

     45        (35     (286     35        (241

Income from discontinued operations

     6        14        —          21        41   
                                        

Net income (loss)

     51        (21     (286     56        (200

Less: Net income attributable to noncontrolling interests

     39       34        26       30       129   
                                        

Net income (loss) attributable to Sunoco, Inc. shareholders

   $ 12     $ (55 )   $ (312   $ 26     $ (329
                                        

 

* Reclassified to treat the Tulsa refinery that was sold on June 1, 2009 as a discontinued operation.


Sunoco, Inc.

Consolidated Balance Sheets

(Millions of Dollars)

(Unaudited)

 

     At
December 31
2009
   At
December 31
2008*

ASSETS

     

Cash and cash equivalents

   $ 377    $ 240

Accounts and notes receivable, net

     2,262      1,636

Inventories

     635      821

Income tax refund receivable

     394      —  

Deferred income taxes

     96      138
             

Total current assets

     3,764      2,835

Investments and long-term receivables

     179      173

Properties, plants and equipment, net

     7,626      7,799

Deferred charges and other assets

     326      343
             

Total assets

   $ 11,895    $ 11,150
             

LIABILITIES AND EQUITY

     

Accounts payable and accrued liabilities

   $ 3,806    $ 3,140

Short-term borrowings

     397      310

Current portion of long-term debt

     6      148

Taxes payable

     209      339
             

Total current liabilities

     4,418      3,937

Long-term debt

     2,061      1,705

Retirement benefit liabilities

     778      836

Deferred income taxes

     998      859

Other deferred credits and liabilities

     521      533
             

Total liabilities

     8,776      7,870
             

EQUITY

     

Sunoco, Inc. shareholders’ equity

     2,557      2,842

Noncontrolling interests

     562      438
             

Total equity

     3,119      3,280
             

Total liabilities and equity

   $ 11,895    $ 11,150
             

 

* Reclassified to reflect the adoption of new accounting guidance concerning the accounting and reporting of noncontrolling interests.


Sunoco, Inc.

Consolidated Statements of Cash Flows

(Millions of Dollars)

(Unaudited)

 

     For the Twelve Months
Ended December 31
 
     2009     2008*  

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net income (loss)

   $ (200   $ 889  

Adjustments to reconcile net income (loss) to net cash provided by operating activities:

    

Gain on divestment of discontinued Tulsa operations

     (70     —     

Gain on divestment of retail heating oil and propane distribution business

     (44     —     

Gain related to issuance of Sunoco Logistics Partners L.P. limited partnership units

     —          (23

Provision for asset write-downs and other matters

     699        228   

Depreciation, depletion and amortization

     521        515  

Deferred income tax expense

     54        15   

Payments less than (in excess of) expense for retirement plans

     32        (31

Changes in working capital pertaining to operating activities

     (441     (756

Other

     (3     (1
                

Net cash provided by operating activities

     548        836  
                

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Capital expenditures

     (899     (1,286

Acquisitions

     (50     (185

Proceeds from divestment of Tulsa refinery and related inventory

     157        —     

Proceeds from other divestments

     209        21  

Other

     (2     49  
                

Net cash used in investing activities

     (585     (1,401
                

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Net proceeds from short-term borrowings

     74        207  

Net proceeds from issuance of long-term debt

     1,059        343  

Repayments of long-term debt

     (835     (115

Net proceeds from issuance of Sunoco Logistics Partners L.P. limited partnership units

     110        —     

Cash distributions to investors in cokemaking operations

     (19     (31

Cash distributions to investors in Sunoco Logistics Partners L.P.

     (75     (61

Cash dividend payments

     (140     (138

Purchases of common stock for treasury

     —          (49

Other

     —          1   
                

Net cash provided by financing activities

     174        157   
                

Net increase (decrease) in cash and cash equivalents

     137        (408

Cash and cash equivalents at beginning of period

     240        648  
                

Cash and cash equivalents at end of period

   $ 377      $ 240  
                

 

* Reclassified to reflect the adoption of new accounting guidance concerning the accounting and reporting of noncontrolling interests.

-END OF SUNOCO 4Q09 EARNINGS REPORT-