EX-99.1 2 dex991.htm PRESS RELEASE Press Release

SUNOCO 3Q10 EARNINGS, PAGE 1

 

 

Exhibit 99.1

 

LOGO    News Release

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. 27 -10

SUNOCO REPORTS THIRD QUARTER 2010 RESULTS

Fuels businesses report profit on strength of retail and logistics operations

PHILADELPHIA, October 28, 2010 — Sunoco, Inc. (NYSE: SUN) today reported net income attributable to Sunoco shareholders of $65 million ($.54 per share diluted) for the third quarter of 2010 versus a net loss attributable to Sunoco shareholders of $312 million ($2.67 per share diluted) for the third quarter of 2009. Excluding special items, Sunoco had income of $27 million ($.22 per share diluted) for the third quarter of 2010 versus a 2009 third quarter loss of $34 million ($.29 per share diluted). Highlights of the third quarter include:

 

   

Retail and Logistics contributed income of $67 million

 

   

SunCoke Energy earned income of $33 million

 

   

Refining and Supply reported a loss of $44 million

 

   

Sunoco Logistics Partners L.P. (NYSE: SXL) completed acquisitions totaling $243 million

 

   

Separation of the coke business remains on track

For the first nine months of 2010, Sunoco reported net income attributable to Sunoco shareholders of $147 million ($1.22 per share diluted) versus a net loss attributable to Sunoco shareholders of $355 million ($3.04 per share diluted) for the first nine months of 2009.

“We were profitable on the strength of our retail, logistics, and coke operations – areas we have targeted for future growth,” said Lynn L. Elsenhans, Sunoco’s Chairman and Chief Executive Officer. “Despite posting a loss, our Refining and Supply segment’s year-over-year improvement in financial performance reflects our continued focus on the fundamentals: margin capture, sustainably lowering our breakeven


SUNOCO 3Q10 EARNINGS, PAGE 2

 

cost per barrel, and running our facilities safely and reliably. While transportation fuels will likely face continued weak demand, abundant supply, and pressured margins for the foreseeable future, our strong balance sheet and a brand and logistics led strategy that is focused on higher growth leave us well positioned going forward.”

Commenting on the coke business, Elsenhans said, “With $33 million in income, SunCoke Energy’s record of strong performance continues. Our plans to separate SunCoke from Sunoco in the first half of 2011 are on track and progressing well, as demonstrated by the recent hiring of Fritz Henderson to be its CEO and announced relocation of SunCoke’s headquarters to a major metropolitan area better able to support a high-growth international business.”

DETAILS OF THIRD QUARTER RESULTS

FUELS BUSINESS RESULTS

Refining and Supply – Continuing Operations

Refining and Supply had a loss from continuing operations of $44 million in the third quarter of 2010 versus a loss of $118 million in the third quarter of 2009. The improved results were primarily due to higher realized margins and lower expenses. The overall crude utilization rate was 94 percent for the quarter, well above the utilization rate of 74 percent in the third quarter of 2009. Lower expenses were largely the result of cost reductions related to the business improvement initiative carried out during the last three quarters of 2009 and the closure of the Eagle Point refinery in the fourth quarter of 2009.

Retail Marketing

Retail Marketing earned $41 million in the current quarter versus $49 million in the third quarter of 2009. The decrease in earnings was largely due to lower average retail gasoline and distillate margins partially offset by lower expenses.

Logistics

Logistics earned $26 million in the third quarter of 2010 versus $19 million in the third quarter of 2009. The increase in earnings was primarily driven by higher lease acquisition results driven largely by improved contango profits and additional earnings attributable to acquisitions and organic growth projects.

On July 1, 2010, Sunoco Logistics Partners L.P. acquired Texon’s butane blending business for $152 million including $11 million of inventory. This business consists of patented technology for sophisticated blending of butane into gasoline, contracts with several large terminal operators currently utilizing the patented technology, butane inventories, and other related assets. The Partnership also increased its ownership


SUNOCO 3Q10 EARNINGS, PAGE 3

 

 

interests in Mid-Valley Pipeline Company (“Mid-Valley”), West Texas Gulf Pipe Line Company (“West Texas Gulf”) and West Shore Pipe Line Company during the third quarter of 2010 for an aggregate purchase price of $91 million. In connection with the acquisitions, Logistics recognized a $37 million after-tax gain attributable to Sunoco shareholders from the remeasurement of its pre-acquisition equity interests in Mid-Valley and West Texas Gulf to fair value. This gain was included in special items in the third quarter of 2010.

Chemicals – Continuing Operations

Chemicals reported income from continuing operations of $3 million in the third quarter of 2010 versus a loss of $2 million in the third quarter of 2009. The improvement in results was primarily due to higher sales volumes.

Chemicals – Discontinued Operations

Discontinued polypropylene operations, which were divested on March 31, 2010, had income of $1 million in the third quarter of 2009.

COKE BUSINESS RESULTS

Coke earned $33 million in the third quarter of 2010 versus $35 million in the third quarter of 2009. The decrease in earnings was attributable to lower results from the Jewell coal and coke operations which were substantially offset by higher results from the other U.S. coke facilities. The decline at the Jewell operations was primarily due to lower coal and coke prices. The improvement at the other U.S. facilities was driven by higher margins and volumes, including results from the Granite City facility which commenced operations in the fourth quarter of 2009.

OTHER

Corporate administrative expenses were $17 million after tax in the third quarter of 2010 versus $6 million after tax in the third quarter of 2009. Corporate expenses increased primarily due to incentive compensation accruals stemming from the Company’s improved financial performance versus 2009 and the absence of a $5 million favorable income tax consolidation adjustment recognized in the third quarter of 2009.

Net Financing Expenses and Other – Net financing expenses and other were $15 million after tax in the third quarter of 2010 versus $12 million after tax in the third quarter of 2009. The increase was primarily due to lower capitalized interest and higher debt expense primarily attributable to borrowings of Sunoco Logistics associated with their growth capital.

SPECIAL ITEMS

During the third quarter of 2010, Sunoco recognized a $37 million after-tax gain attributable to Sunoco shareholders from the remeasurement of its pre-acquisition interests in Sunoco Logistics equity investments to fair value, recorded an $8 million after-tax provision for pension settlement losses and


SUNOCO 3Q10 EARNINGS, PAGE 4

 

recognized a $9 million after-tax gain on an insurance settlement related to MTBE coverage. The total net impact of special items during the third quarter of 2010 was a gain of $38 million after tax.

During the third quarter of 2009, Sunoco recorded a $278 million after-tax provision in connection with the permanent shut down of all process units at the Eagle Point refinery in the fourth quarter of 2009, of which $254 million was attributable to non-cash charges; recorded a $14 million after-tax charge in connection with the business improvement initiative attributable to a non-cash provision for pension and postretirement settlement losses; recorded a $12 million after-tax non-cash provision to write down to estimated fair value certain other assets in the Refining and Supply business; and recognized a $26 million after-tax gain on divestment of the retail heating oil and propane distribution business. The total net impact of special items during the third quarter of 2009 was a charge of $278 million after tax.

Sunoco is a leading transportation fuel provider, with operations located primarily in the East Coast and Midwest regions of the United States. The Company operates more than 4,800 branded retail locations that market transportation fuels and convenience store merchandise in 23 states. This retail network is principally supplied by Sunoco-owned refineries with a combined crude oil processing capacity of 675,000 barrels per day. Sunoco is also the General Partner and has a 31-percent interest in Sunoco Logistics Partners, L.P., a publicly traded master limited partnership which owns and operates 7,600 miles of refined product and crude oil pipelines and approximately 40 active product terminals. Many of Sunoco Logistics' pipelines and terminals and storage facilities are integrated with Sunoco's retail network and refineries. Through SunCoke Energy, Sunoco makes high-quality metallurgical-grade coke for major steel manufacturers. The company's facilities in the U.S. have the capacity to manufacture approximately 3.67 million tons of metallurgical-grade coke annually. 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 third quarter's results can monitor the Company's quarterly teleconference call, which is scheduled for 5:30 p.m. ET on October 28, 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


SUNOCO 3Q10 EARNINGS, PAGE 5

 

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.

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, 2009 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 3Q10 EARNINGS, PAGE 6

 

 

Sunoco, Inc.

2010 Third Quarter and Nine-Month Financial Summary

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

Third Quarter

   2010      2009*  

Revenues

   $ 9,479       $ 8,450   

Net Income (Loss)

   $ 172       $ (286

Less: Net Income Attributable to Noncontrolling Interests

     107         26   
                 

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

   $ 65       $ (312
                 

Net Income (Loss) Attributable to Sunoco, Inc.

     

Shareholders Per Share of Common Stock:

     

Basic

   $ .54       $ (2.67

Diluted

   $ .54       $ (2.67 )** 

Weighted-Average Number of Shares

     

Outstanding (In Millions):

     

Basic

     120.6         116.9   

Diluted

     120.8         116.9 ** 

Nine Months

     

Revenues

   $ 27,257       $ 21,700   

Net Income (Loss)

   $ 310       $ (256

Less: Net Income Attributable to Noncontrolling Interests

     163         99   
                 

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

   $ 147       $ (355
                 

Net Income (Loss) Attributable to Sunoco, Inc.

     

Shareholders Per Share of Common Stock:

     

Basic

   $ 1.23      $ (3.04

Diluted

   $ 1.22       $ (3.04 )** 

Weighted-Average Number of Shares

     

Outstanding (In Millions):

     

Basic

     120.0         116.9   

Diluted

     120.1         116.9 ** 

 

* Reclassified to treat the polypropylene chemicals business that was sold on March 31, 2010 as a discontinued operation.
** 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 3Q10 EARNINGS, PAGE 7

 

 

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     Three Months Ended  
     September 30     June 30  
     2010     2009     2010  

Refining and Supply:

      

Continuing operations

   $ (44   $ (118   $ 86   

Discontinued operations

     —          —          —     

Retail Marketing

     41        49        45   

Logistics

     26        19        20   

Chemicals:

      

Continuing operations

     3        (2     5   

Discontinued operations

     —          1        —     

Coke

     33        35        41   

Corporate and Other:

      

Corporate expenses

     (17     (6     (20

Net financing expenses and other

     (15     (12     (19
                        
     27        (34     158   

Special items

     38        (278     (13
                        

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

   $ 65      $ (312   $ 145   
                        

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

      

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

   $ .22     $ (.29   $ 1.31   

Special items

     .32        (2.38     (.11
                        

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

   $ .54      $ (2.67   $ 1.20   
                        


SUNOCO 3Q10 EARNINGS, PAGE 8

 

 

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     Nine Months
Ended
September 30
 
     2010     2009  

Refining and Supply:

    

Continuing operations

   $ —        $ (181

Discontinued operations

     —          3   

Retail Marketing

     107        65  

Logistics

     63        75   

Chemicals:

    

Continuing operations

     11        (17

Discontinued operations

     21        12   

Coke

     111        102   

Corporate and Other:

    

Corporate expenses

     (60     (32

Net financing expenses and other

     (51     (33
                
     202        (6

Special items

     (55 )*      (349 )** 
                

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

   $ 147      $ (355
                

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

    

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

   $ 1.68      $ (.05

Special items

     (.46     (2.99
                

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

   $ 1.22      $ (3.04
                

 

* Includes a $44 million net after-tax loss recognized in connection with the divestment of the polypropylene chemicals business.
** Includes a $20 million net after-tax gain recognized in connection with the divestment of the Tulsa refining operations and $3 and $4 million after-tax provisions for asset write-downs and other matters attributable to the Tulsa refining operations and polypropylene chemicals business, respectively.


SUNOCO 3Q10 EARNINGS, PAGE 9

 

 

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

     For the Three
Months Ended
     For the Nine
Months Ended
 
     September 30     June 30      September 30  
     2010     2009*     2010      2010      2009*  
REFINING AND SUPPLY             

Income (Loss) (Millions of Dollars)

   $ (44   $ (118   $ 86       $ —         $ (181

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

   $ 3.88      $ 2.72      $ 7.34       $ 5.13       $ 4.23   

Market Benchmark*** (Per Barrel)

   $ 4.87      $ 4.57      $ 6.51       $ 5.68       $ 5.44   

Crude Inputs as Percent of Crude Unit Rated
Capacity
+

     94        74        92         88         76   

Throughputs (Thousand Barrels Daily):

            

Crude Oil

     631.6        613.3        617.5         594.5         628.1   

Other Feedstocks

     52.1        66.4        50.2         53.7         71.9   
                                          

Total Throughputs

     683.7        679.7        667.7         648.2         700.0   
                                          

Products Manufactured (Thousand Barrels Daily):

            

Gasoline

     357.9        346.0        343.1         336.0         355.4   

Middle Distillates

     250.1        219.3        244.5         232.4         227.4   

Residual Fuel

     35.4        61.5        39.5         36.6         61.5   

Petrochemicals

     25.6        25.7        20.9         23.5         27.6   

Other

     45.6        49.2        48.5         48.6         55.1   
                                          

Total Production

     714.6        701.7        696.5         677.1         727.0   

Less: Production Used as Fuel in Refinery Operations

     33.1        32.5        32.3         31.3         34.3   
                                          

Total Production Available for Sale

     681.5        669.2        664.2         645.8         692.7   
                                          

 

* Excludes amounts attributable to the Tulsa refinery, which 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 3Q10 EARNINGS, PAGE 10

 

 

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

     For the Three
Months Ended
    For the Nine
Months Ended
 
     September 30     June 30     September 30  
     2010     2009     2010     2010     2009  
RETAIL MARKETING   

Income (Millions of Dollars)

   $ 41     $ 49      $ 45      $ 107      $ 65   

Retail Margin* (Per Barrel):

          

Gasoline

   $ 4.40     $ 5.48      $ 4.81      $ 4.33      $ 3.72   

Middle Distillates

   $ 3.27     $ 4.92      $ 3.79      $ 3.48      $ 6.96   

Sales (Thousand Barrels Daily):

  

Gasoline

     303.1        294.9        295.7        290.2        292.4   

Middle Distillates

     30.2        29.5        29.9        28.1        32.1   
                                        
     333.3        324.4        325.6        318.3        324.5   
                                        

Total Retail Gasoline Outlets, End of Period

     4,829        4,704        4,743        4,829        4,704   

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

     148        156        159        152        151   

Convenience Stores:

          

Total Stores, End of Period

     573        627        577        573        627   

Merchandise Sales (M$/Store/Month)

   $ 117     $ 104      $ 104      $ 103      $ 91   

Merchandise Margin (Company Operated)
(% of Sales)

     28     27     27     27     28
                                        

 

*        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.

   

LOGISTICS

  

Income (Millions of Dollars)

   $ 26     $ 19      $ 20      $ 63      $ 75   

Pipeline and Terminal Throughput (Thousand

Barrels Daily)*:

          

Unaffiliated Customers

     1,929        1,378        1,799        1,823        1,456   

Affiliated Customers

     1,268        1,445        1,267        1,258        1,448   
                                        
     3,197        2,823        3,066        3,081        2,904   
                                        

 

*        Excludes joint-venture operations which are not consolidated.

  

 

CHEMICALS*

 

  

Income (Loss) (Millions of Dollars)

   $ 3      $ (2   $ 5      $ 11      $ (17

Margin** (Cents per Pound):

     7.6        7.3        8.9        8.7        7.4   

Sales (Millions of Pounds):

     567        483        554        1,570        1,317   
                                        

 

* Consists of the phenol and related products operations but excludes amounts attributable to the polypropylene chemicals business, which was sold to Braskem S.A. on March 31, 2010.
** Wholesale sales revenue less cost of feedstocks, product purchases and related terminalling and transportation divided by sales volumes.


SUNOCO 3Q10 EARNINGS, PAGE 11

 

 

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

     For the Three
Months Ended
     For the Nine
Months Ended
 
     September 30     June 30      September 30  
     2010     2009     2010      2010     2009  

COKE

  

Income (Millions of Dollars)

   $ 33      $ 35      $ 41       $ 111      $ 102   

Coke Production (Thousands of Tons):

           

United States*

     953        715        883         2,677        2,090   

Brazil

     431        321        422         1,266        883   
                                         

 

*        Includes amounts attributable to 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

   $ 34      $ 120      $ 52       $ 195      $ 323   

Discontinued operations

     —          —          —           —          3   

Retail Marketing

     33        20        16         56        48   

Logistics

     280     88 **      50         357     158 ** 

Chemicals:

  

Continuing operations

     3        4        4         12        12   

Discontinued operations

     —          4        —           3        11   

Coke

     72        50        58         140        188   
                                         
   $ 422      $ 286      $ 180       $ 763      $ 743   
                                         

 

*        Includes acquisition of butane blending business and additional ownership interests in pipeline joint ventures totaling $243 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

   $ 69      $ 64      $ 68       $ 199      $ 213 ** 

Retail Marketing

     22        21        23         65        71   

Logistics

     15        13        13         42        36   

Chemicals

     7        7        7         21        21   

Coke

     15        9        11         37        24   
                                         
   $ 128      $ 114      $ 122       $ 364      $ 365   
                                         

 

*        Excludes amounts attributable to the polypropylene chemicals business and Tulsa refinery for all periods presented. The polypropylene chemicals business was sold to Braskem S.A. on March 31, 2010 and the Tulsa refinery was sold to Holly Corporation on June 1, 2009 and, as a result, have been classified as discontinued operations 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 3Q10 EARNINGS, PAGE 12

 

 

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   

Logistics

     30        26        19        22        97   

Chemicals:

          

Continuing operations

     (12     (3     (2     4        (13

Discontinued operations

     8        3        1        2        14   

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:

          

Continuing operations

     (40     (44     (278     36        (326

Discontinued operations*

     (7     20        —          21        34   
                                        

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
                                        

 

* Consists of $4 and $3 million after-tax provisions for asset write-downs and other matters attributable to the polypropylene chemicals operations and the Tulsa refinery, respectively, 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 3Q10 EARNINGS, PAGE 13

 

 

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     2010  
     1st     2nd     3rd  

Refining and Supply:

      

Continuing operations

   $ (42   $ 86      $ (44

Discontinued Tulsa operations

     —          —          —     

Retail Marketing

     21        45        41   

Logistics

     17        20        26   

Chemicals:

      

Continuing operations

     3        5        3   

Discontinued operations

     21        —          —     

Coke

     37        41        33   

Corporate and Other:

      

Corporate expenses

     (23     (20     (17

Net financing expenses and other

     (17     (19     (15
                        
     17        158        27   

Special Items:

      

Continuing operations

     (36     (13     38   

Discontinued operations

     (44 )*      —          —     
                        

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

   $ (63   $ 145      $ 65   
                        

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

      

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

   $ .14     $ 1.31      $ .22   

Special items

     (.67 )     (.11     .32   
                        

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

   $ (.53 )   $ 1.20      $ .54   
                        

 

* Consists of a net loss recognized in connection with the divestment of the polypropylene chemicals business.


SUNOCO 3Q10 EARNINGS, PAGE 14

 

 

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)

   $ 5,945     $ 7,271     $ 8,389     $ 8,666     $ 30,271  

Interest income

     1       3       1       —          5  

Other income, net

     6       24       60       26       116  
                                        
     5,952       7,298       8,450       8,692       30,392  
                                        

COSTS AND EXPENSES

          

Cost of products sold and operating expenses

     4,936       6,355       7,464        7,782       26,537  

Consumer excise taxes

     569       605       630       583       2,387  

Selling, general and administrative expenses

     168       158       180       165       671  

Depreciation, depletion and amortization

     116       135       114       119       484  

Payroll, property and other taxes

     39       34       32       32       137  

Provision for asset write-downs and other matters

     67       75        511       34       687  

Interest cost and debt expense

     31       39       37       38       145  

Interest capitalized

     (10     (12     (12     (5     (39
                                        
     5,916       7,389       8,956       8,748       31,009  

Income (loss) from continuing operations before income tax benefit

     36        (91     (506     (56     (617

Income tax benefit

     (5     (53 )     (219 )     (89     (366 )
                                        

Income (loss) from continuing operations

     41        (38 )     (287     33       (251

Income from discontinued operations

     10       17       1       23       51  
                                        

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 polypropylene chemicals business that was sold on March 31, 2010 and the Tulsa refinery that was sold on June 1, 2009 as discontinued operations.


SUNOCO 3Q10 EARNINGS, PAGE 15

 

 

Sunoco, Inc.

Consolidated Statements of Operations

(Millions of Dollars)

(Unaudited)

 

     2010  
     1st     2nd     3rd  

REVENUES

      

Sales and other operating revenue (including consumer excise taxes)

   $ 8,166      $ 9,572     $ 9,319   

Interest income

     —          1        3   

Gain on remeasurement of pipeline equity interests

     —          —          128   

Other income, net

     26        13       29   
                        
     8,192        9,586       9,479   
                        

COSTS AND EXPENSES

      

Cost of products sold and operating expenses

     7,311        8,350        8,300   

Consumer excise taxes

     530        608        617   

Selling, general and administrative expenses

     146        167        159   

Depreciation, depletion and amortization

     114        122        128   

Payroll, property and other taxes

     34        24        37   

Provision for asset write-downs and other matters

     45        22        (3

Interest cost and debt expense

     39        40        43   

Interest capitalized

     (3     (3     (4 )
                        
     8,216        9,330        9,277   

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

     (24     256        202   

Income tax expense (benefit)

     (9     80        30   
                        

Income (loss) from continuing operations

     (15     176        172   

Loss from discontinued operations

     (23     —          —     
                        

Net income (loss)

     (38     176        172   

Less: Net income attributable to noncontrolling interests

     25       31        107   
                        

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

   $ (63   $ 145      $ 65   
                        


SUNOCO 3Q10 EARNINGS, PAGE 16

 

 

Sunoco, Inc.

Consolidated Balance Sheets

(Millions of Dollars)

(Unaudited)

 

     At
September 30
2010
     At
December 31
2009
 

ASSETS

     

Cash and cash equivalents

   $ 1,129       $ 377   

Accounts and notes receivable, net

     2,453         2,262   

Inventories

     869         635   

Income tax refund receivable

     —           394   

Deferred income taxes

     96         96   
                 

Total current assets

     4,547         3,764   

Investments and long-term receivables

     164         179   

Properties, plants and equipment, net

     7,838         7,626   

Deferred charges and other assets

     396         326   
                 

Total assets

   $ 12,945       $ 11,895   
                 

LIABILITIES AND EQUITY

     

Accounts payable and accrued liabilities

   $ 4,177       $ 3,806   

Short-term borrowings

     115         397   

Current portion of long-term debt

     178         6   

Taxes payable

     231         209   
                 

Total current liabilities

     4,701         4,418   

Long-term debt

     2,254         2,061   

Retirement benefit liabilities

     545         778   

Deferred income taxes

     1,209         998   

Other deferred credits and liabilities

     562         521   
                 

Total liabilities

     9,271         8,776   
                 

EQUITY

     

Sunoco, Inc. shareholders’ equity

     2,920         2,557   

Noncontrolling interests

     754         562   
                 

Total equity

     3,674         3,119   
                 

Total liabilities and equity

   $ 12,945       $ 11,895   
                 


SUNOCO 3Q10 EARNINGS, PAGE 17

 

 

Sunoco, Inc.

Consolidated Statements of Cash Flows

(Millions of Dollars)

(Unaudited)

 

     For the Nine  Months
Ended September 30
 
     2010     2009  

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net income (loss)

   $ 310      $ (256 )

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

    

Loss on divestment of discontinued polypropylene operations

     169        —     

Gain on remeasurement of pipeline equity interests

     (128     —     

Gain on divestment of discontinued Tulsa operations

     —          (34

Gain on divestment of retail heating oil and propane distribution business

     —          (44

Provision for asset write-downs and other matters

     64        665   

Depreciation, depletion and amortization

     367        393   

Deferred income tax expense (benefit)

     (14     (214

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

     (124     16   

Changes in working capital pertaining to operating activities

     278        (534

Other

     (5     1   
                

Net cash provided by (used in) operating activities

     917        (7
                

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Capital expenditures

     (520     (693

Acquisitions

     (243     (50

Proceeds from divestments:

    

Polypropylene operations

     348        —     

Tulsa refinery and related inventory

     —          157   

Other

     41        164   

Other

     (21     (4
                

Net cash used in investing activities

     (395     (426
                

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Net proceeds from (repayments of) short-term borrowings

     (282     193   

Net proceeds from issuance of long-term debt

     1,107        898   

Repayments of long-term debt

     (738     (654

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

     289        110   

Cash distributions to noncontrolling interests

     (92     (69

Cash dividend payments

     (54     (105

Other

     —          (2
                

Net cash provided by financing activities

     230        371   
                

Net increase (decrease) in cash and cash equivalents

     752        (62

Cash and cash equivalents at beginning of period

     377        240   
                

Cash and cash equivalents at end of period

   $ 1,129      $ 178   
                

 

* Payments for the nine months ended September 30, 2010 exclude 3.59 million shares of Sunoco common stock valued at $90 million that were contributed to the Company’s defined benefit plans in February 2010.

-END OF SUNOCO 3Q10 EARNINGS REPORT-