Sunoco posts Q4 net loss of US$362M, versus net income of US$87M a year ago, on special items, lower realized margins and production volumes in its refining and supply business

PHILADELPHIA , February 15, 2012 (press release) – No Change to Preliminary Pretax Results; After-Tax Amounts Provided

Sunoco, Inc. (NYSE: SUN) today updated the information contained in its preliminary release on pretax earnings on February 2, 2012 to include the tax provision and after-tax results. There were no changes to the previously reported pretax amounts. Sunoco reported a net loss attributable to Sunoco shareholders of $362 million ($3.39 per share diluted) for the fourth quarter of 2011 versus net income attributable to Sunoco shareholders of $87 million ($0.72 per share diluted) for the fourth quarter of 2010. Excluding special items, Sunoco had income of $5 million ($0.05 per share diluted) for the fourth quarter of 2011 versus income of $13 million ($0.11 per share diluted) for the fourth quarter of 2010. Key fourth quarter details include:

* Logistics and Retail contributed pretax income of $106 million
* Refining and Supply reported a pretax loss of $117 million
* Completed the separation of SunCoke Energy, Inc. in January 2012
* Recognized a $630 million pretax provision ($374 million after tax) for additional asset write-downs and idling expenses at the Philadelphia and Marcus Hook refineries

The discussion of pretax business results below is unchanged from the preliminary release on February 2. The following updated information for the fourth quarter of 2011 has been provided in this release:

* Earnings per share amounts
* A description of the tax benefits recorded in the fourth quarter for income excluding special items
* After-tax amounts for the special items
* Earnings profile of Sunoco business tables to reflect the tax amounts
* Statements of operations, balance sheets and statements of cash flows

DETAILS OF FOURTH QUARTER RESULTS

Logistics

Logistics earned $66 million pretax in the fourth quarter of 2011 versus $35 million in the fourth quarter of 2010. The increase in earnings was primarily due to higher crude oil sales volumes and margins which benefitted from market-related opportunities. Pipeline earnings benefitted from continued strong demand for crude oil in West Texas. Higher earnings attributable to recent acquisitions and organic growth projects also contributed to the improved results.

Retail Marketing

Retail Marketing earned $40 million pretax in the current quarter versus $1 million in the fourth quarter of 2010. The increase in earnings was primarily attributable to higher retail gasoline and distillate margins, partially offset by lower gasoline sales volumes.

Refining and Supply

Refining and Supply had a pretax loss of $117 million in the current quarter versus $17 million in the fourth quarter of 2010. The decrease in earnings was primarily the result of lower realized margins and production volumes. These negative factors were partially offset by lower expenses. Margins deteriorated throughout the fourth quarter during which market margins for gasoline were frequently negative. Margins were also impacted by high premiums for crude oil versus the Dated Brent crude oil benchmark. Production volumes were impacted by the idling of the Marcus Hook facility during the fourth quarter. The overall crude utilization rate was 81 percent for the quarter, down from 90 percent in the third quarter of 2011.

Coke

Coke earned $9 million pretax in the fourth quarter of 2011 versus $25 million in the fourth quarter of 2010. The decrease in earnings was largely attributable to lower coke sales revenues as a result of the Jewell contract restructuring with ArcelorMittal in January 2011, higher general and administrative costs largely associated with the relocation of SunCoke Energy’s corporate offices and additional staffing costs related to becoming a public company and Sunoco’s reduced ownership interest in SunCoke Energy.

Discontinued Chemicals Operations

Discontinued chemicals operations had pretax income of $3 million in the fourth quarter of 2011 versus $6 million in the fourth quarter of 2010.

OTHER

Corporate administrative expenses were $17 million pretax in the current quarter versus $27 million in the fourth quarter of 2010. The decrease was largely driven by lower staffing and incentive compensation costs.

Net financing expenses and other were $32 million pretax in the fourth quarter of 2011 compared to $27 million in the fourth quarter of 2010. Increased interest expense attributable to new borrowings of Sunoco Logistics Partners L.P. and SunCoke Energy, Inc. was partially offset by higher interest income.

INCOME TAXES

Excluding the impact of special items, the tax benefit on the $48 million pretax loss attributable to Sunoco, Inc. shareholders for the fourth quarter of 2011 was $53 million compared to a tax benefit of $17 million on a pretax loss of $4 million during the fourth quarter of 2010. The increase in the tax benefit was largely the result of higher tax credits in the 2011 fourth quarter under the effective tax rate method as the fourth quarter represented a higher percentage of full year results in 2011 as compared to 2010. The higher pretax loss in 2011 also resulted in a higher tax benefit. Both periods included adjustments to the respective tax benefit as a result of the reconciliation of the prior year tax provisions to the tax returns filed.

SPECIAL ITEMS

During the fourth quarter of 2011, Sunoco recorded a $387 million noncash provision ($230 million after tax) to write down assets at the Philadelphia and Marcus Hook refineries to their estimated fair values and recorded provisions for severance, contract terminations and idling expenses of $243 million ($144 million after tax); recognized a $21 million gain ($12 million after tax) largely attributable to the liquidation of a portion of the refined product LIFO inventories related to the idling of the Marcus Hook refinery; recorded a $3 million net pretax loss ($1 million after tax) primarily related to prior divestments of its Toledo refinery and discontinued chemicals operations; and recorded a $4 million tax provision adjustment related to the March 2010 sale of the polypropylene chemicals business. The total net impact of special items during the fourth quarter of 2011 was a charge of $612 million ($367 million after tax).

During the fourth quarter of 2010, Sunoco recognized a $168 million gain ($100 million after tax) from the liquidation of crude oil and refined product LIFO inventories primarily resulting from the permanent shutdown of the Eagle Point Refinery in the fourth quarter of 2009; recorded a $24 million provision ($14 million after tax) primarily for additional asset write-downs attributable to a decline in the fair market value of certain assets of the Eagle Point refinery; and recorded a $21 million provision ($12 million after tax) for pension settlement losses and accruals for employee terminations and related costs in connection with ongoing business improvement initiatives. The total net impact of special items during the fourth quarter of 2010 was income of $123 million ($74 million after tax).

Sunoco is a leading logistics and retail company. The company owns the general partner interest of Sunoco Logistics Partners L.P. (NYSE: SXL), which consists of a 2-percent ownership interest and incentive distribution rights, and owns a 32 percent interest in the Partnership’s limited partner units. Sunoco Logistics Partners L.P. is an owner and operator of complementary pipeline, terminal and crude oil acquisition and marketing assets. Sunoco also has a network of approximately 4,900 retail locations in 23 states.

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.

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, 2010 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.

           
SUNOCO, INC.

2011 FOURTH QUARTER AND TWELVE-MONTH FINANCIAL SUMMARY

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

           

Fourth Quarter

  2011     2010
Revenues   $ 12,727     $ 9,931
           
Net income (loss)   $ (320)     $ 118
Less: Net income attributable to noncontrolling interests     42       31
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (362)     $ 87
           
Net income (loss) attributable to Sunoco, Inc. shareholders          
per share of common stock:          
Basic   $ (3.39)     $ 0.72
Diluted   $ (3.39) *   $ 0.72
Weighted-average number of shares outstanding (in millions):          
Basic     106.8       120.6
Diluted     106.8 *     121.0
           

Twelve Months

         
Revenues   $ 46,916     $ 36,400
           
Net income (loss)   $ (1,509)     $ 428
Less: Net income attributable to noncontrolling interests     175       194
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (1,684)     $ 234
           
Net income (loss) attributable to Sunoco, Inc. shareholders          
per share of common stock:          
Basic   $ (14.55)     $ 1.95
Diluted   $ (14.55) *   $ 1.95
Weighted-average number of shares outstanding (in millions):          
Basic     115.7       120.1
Diluted     115.7 *     120.3

 

* Since the assumed issuance of common 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

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

     
    For the Three Months Ended
    December 31,   September 30,
    2011   2010   2011
Logistics   $ 66     $ 35     $ 53  
Retail Marketing     40       1       48  
Refining and Supply     (117 )     (17 )     (17 )
Discontinued chemicals operations     3       6       1  
Coke     9       25       24  
Corporate and Other:            
Corporate expenses     (17 )     (27 )     (23 )
Net financing expenses and other     (32 )     (27 )     (29 )
Pretax income (loss) attributable to Sunoco, Inc. shareholders            
before special items     (48 )     (4 )     57  
Income tax benefit     (53 )     (17 )     (8 )
Income attributable to Sunoco, Inc. shareholders            
before special items     5       13       65  
             
Special items:            
Continuing operations     (611 )     123       (1,966 )
Discontinued operations     (1 )     -       32  
Pretax income (loss) from special items     (612 )     123       (1,934 )
Income tax expense (benefit)     (245 )     49       (773 )
Income (loss) from special items     (367 )     74       (1,161 )
             
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (362 )   $ 87     $ (1,096 )
             
Earnings (loss) per share of common stock (diluted):            
Income attributable to Sunoco, Inc.            
shareholders before special items   $ 0.05     $ 0.11     $ 0.57  
Income (loss) from special items     (3.44 )     0.61       (10.19 )
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (3.39 )   $ 0.72     $ (9.62 )
                         
     
SUNOCO, INC.
EARNINGS PROFILE OF SUNOCO BUSINESSES

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

     
    For the Twelve Months Ended
    December 31,
    2011   2010
Logistics   $ 204     $ 132  
Retail Marketing     169       176  
Refining and Supply     (316 )     (19 )
Discontinued chemicals operations     1       56  
Coke     62       176  
Corporate and Other:        
Corporate expenses     (80 )     (108 )
Net financing expenses and other     (101 )     (110 )
Pretax income (loss) attributable to Sunoco, Inc. shareholders        
before special items     (61 )     303  
Income tax expense (benefit)     (58 )     88  
Income (loss) attributable to Sunoco, Inc. shareholders        
before special items     (3 )     215  
         
Special items:        
Continuing operations     (2,533 )     118  
Discontinued operations     (256 )     (169 )
Pretax loss from special items     (2,789 )     (51 )
Income tax benefit     (1,108 )     (70 )
Income (loss) from special items     (1,681 )     19  
         
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (1,684 )   $ 234  
         
Earnings (loss) per share of common stock (diluted):        
Income (loss) attributable to Sunoco, Inc.        
shareholders before special items   $ (0.03 )   $ 1.79  
Income (loss) from special items     (14.52 )     0.16  
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (14.55 )   $ 1.95  
                 
               
SUNOCO, INC.  
FINANCIAL AND OPERATING STATISTICS  

(Unaudited)

 
               
    For the Three   For the Twelve  
    Months Ended   Months Ended  
    December 31,   September 30,   December 31,  
    2011   2010   2011   2011   2010  
LOGISTICS                      
                       
Pretax Income (Millions of Dollars)   $ 66   $ 35   $ 53   $ 204   $ 132  
Pipeline and Terminal Throughputs* (Thousands of Barrels Daily):                      
Unaffiliated Customers     2,806     2,352     3,033     2,758     2,037  
Affiliated Customer     1,075     1,342     1,058     1,041     1,296  
      3,881     3,694     4,091     3,799     3,333  
* Excludes joint-venture operations which are not consolidated.                      
                       
    For the Three   For the Twelve  
    Months Ended   Months Ended  
    December 31,   September 30,   December 31,  
    2011   2010   2011   2011   2010  
RETAIL MARKETING                      
                       
Pretax Income (Millions of Dollars)   $ 40   $ 1   $ 48   $ 169   $ 176  
Retail Margin* (Per Barrel):                      
Gasoline   $ 4.16   $ 2.79   $ 4.40   $ 4.19   $ 3.93  
Middle Distillates   $ 3.75   $ 2.37   $ 4.04   $ 4.02   $ 3.19  
Sales (Thousands of Barrels Daily):                      
Gasoline     292.7     302.9     309.6     298.4     293.4  
Middle Distillates     29.6     28.5     30.6     28.4     28.2  
      322.3     331.4     340.2     326.8     321.6  
Total Retail Gasoline Outlets, End of Period     4,933     4,921     4,933     4,933     4,921  
Gasoline and Diesel Throughput per Company-Owned                      
or Leased Outlet (MGal/Site/Month)     159     161     168     160     156  
Convenience Stores:                      
Total Stores, End of Period     630     602     608     630     602  
Merchandise Sales (M$/Store/Month)   $ 93   $ 92   $ 105   $ 92   $ 96  
Merchandise Margin (Company Operated) (% of Sales)     25%     27%     27%     26%     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.

             
SUNOCO, INC.
FINANCIAL AND OPERATING STATISTICS

(Unaudited)

             
    For the Three   For the Twelve
    Months Ended   Months Ended
    December 31,   September 30,   December 31,
      2011       2010       2011       2011       2010  
REFINING AND SUPPLY                    
                     
Pretax Loss (Millions of Dollars)   $ (117 )   $ (17 )   $ (17 )   $ (316 )   $ (19 )
Realized Wholesale Margin* (Per Barrel of Production Available for Sale)   $ 1.13     $ 4.77     $ 4.89     $ 3.39     $ 5.04  
Market Benchmark** (Per Barrel)   $ 3.57     $ 5.19     $ 5.87     $ 5.18     $ 5.11  
Crude Inputs as Percent of Crude Unit Rated Capacity***     81       85       90       82       87  
Throughputs ***(Thousands of Barrels Daily):                    
Crude Oil     407.4       571.8       452.7       436.2       588.8  
Other Feedstocks     47.8       64.5       42.5       46.9       56.4  
Total Throughputs     455.2       636.3       495.2       483.1       645.2  
Products Manufactured ***(Thousands of Barrels Daily):                    
Gasoline     234.4       339.9       249.0       245.8       337.0  
Middle Distillates     163.0       225.1       181.9       173.5       230.6  
Residual Fuel     33.0       28.7       32.1       30.0       34.6  
Petrochemicals     12.3       23.3       14.1       14.4       23.4  
Other     30.7       48.1       35.8       38.1       48.5  
Total Production     473.4       665.1       512.9       501.8       674.1  
Less: Production Used as Fuel in Refinery Operations     22.0       31.2       25.9       23.9       31.3  
Total Production Available for Sale     451.4       633.9       487.0       477.9       642.8  

 

* Wholesale sales revenue less related cost of crude oil, other feedstocks, product purchases and terminalling and transportation divided by production available for sale.

** The refinery benchmark margin represents a 6-3-2-1 Value-Added Benchmark beginning March 1, 2011 as a result of the sale of the Toledo refinery. Prior to that date, the weighted-average refinery benchmark margin was comprised of a 6-3-2-1 Value-Added benchmark related to the Northeast refining operations (80% weight) and a 4-3-1 Benchmark related to the Toledo refinery (20% weight). Beginning with the second quarter of 2011, the 6-3-2-1 Value-Added Benchmark has been adjusted to reflect market conditions more closely associated with the Company's Northeast refining system. The 6-3-2-1 benchmark component of prior period weighted-average benchmark margins has been restated for comparative purposes.

*** Includes 175 thousand barrels-per-day of capacity at the Marcus Hook refinery which has been indefinitely idled and reflects a 170 thousand barrels-per-day reduction attributable to the sale of the Toledo refinery in March 2011.

             
SUNOCO, INC.
FINANCIAL AND OPERATING STATISTICS

(Unaudited)

             
    For the Three   For the Twelve
    Months Ended   Months Ended
    December 31,   September 30,   December 31,
    2011   2010   2011   2011   2010
COKE                    
                     
Pretax Income (Millions of Dollars)   $ 9   $ 25   $ 24   $ 62   $ 176
Coke Production (Thousands of Tons):                    
United States     1,014     915     964     3,761     3,593
Brazil     293     370     373     1,442     1,636
                     
    For the Three   For the Twelve
    Months Ended   Months Ended
    December 31,   September 30,   December 31,
    2011   2010   2011   2011   2010
CAPITAL PROGRAM (Millions of Dollars)                    
                     
Logistics*   $ 89   $ 69   $ 348   $ 592   $ 426
Retail Marketing**     35     68     47     129     124
Refining and Supply     36     52     20     120     247
Discontinued chemicals operations     1     5     4     17     20
Coke***     53     83     57     284     223
    $ 214   $ 277   $ 476   $ 1,142   $ 1,040
* Includes acquisitions totaling $381 and $243 million, respectively, for the twelve months ended December 31, 2011 and 2010.
** Includes acquisition of retail sites in the fourth quarter of 2010 totaling $25 million.
*** Includes acquisition of a coal business in the first quarter of 2011 totaling $38 million.
                     
    For the Three   For the Twelve
    Months Ended   Months Ended
    December 31,   September 30,   December 31,
    2011   2010   2011   2011   2010
DEPRECIATION, DEPLETION AND                    
AMORTIZATION (Millions of Dollars)*                    
Logistics   $ 25   $ 20   $ 24   $ 86   $ 62
Retail Marketing     25     28     23     92     93
Refining and Supply     5     64     50     157     263
Coke     16     12     15     59     49
    $ 71   $ 124   $ 112   $ 394   $ 467
* Excludes amounts attributable to discontinued chemicals operations.
 
                     
SUNOCO, INC.
EARNINGS PROFILE OF SUNOCO BUSINESSES

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

                     
    2010
    1st   2nd   3rd   4th   Total
Logistics   $ 27     $ 30     $ 40     $ 35     $ 132  
Retail Marketing     34       73       68       1       176  
Refining and Supply     (70 )     138       (70 )     (17 )     (19 )
Discontinued chemicals operations     38       7       5       6       56  
Coke     51       56       44       25       176  
Corporate and Other:                    
Corporate expenses     (23 )     (30 )     (28 )     (27 )     (108 )
Net financing expenses and other     (28 )     (27 )     (28 )     (27 )     (110 )
Pretax income (loss) attributable to Sunoco, Inc.                    
shareholders before special items     29       247       31       (4 )     303  
Income tax expense (benefit)     12       89       4       (17 )     88  
Income attributable to Sunoco, Inc.                    
shareholders before special items     17       158       27       13       215  
                     
Special items:                    
Continuing operations     (45 )     (22 )     62       123       118  
Discontinued operations     (169 )     -       -       -       (169 )
Pretax income (loss) from special items     (214 )     (22 )     62       123       (51 )
Income tax expense (benefit)     (134 )     (9 )     24       49       (70 )
Income (loss) from special items     (80 )     (13 )     38       74       19  
                     
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (63 )   $ 145     $ 65     $ 87     $ 234  
                     
Earnings (loss) per share of common stock (diluted):                    
Income attributable to Sunoco, Inc.                    
shareholders before special items   $ 0.14     $ 1.31     $ 0.22     $ 0.11     $ 1.79  
Income (loss) from special items     (0.67 )     (0.11 )     0.32       0.61       0.16  
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (0.53 )   $ 1.20     $ 0.54     $ 0.72     $ 1.95  
                                         
                     
SUNOCO, INC.
EARNINGS PROFILE OF SUNOCO BUSINESSES

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

                     
    2011
    1st   2nd   3rd   4th   Total
Logistics   $ 31     $ 54     $ 53     $ 66     $ 204  
Retail Marketing     12       69       48       40       169  
Refining and Supply     (138 )     (44 )     (17 )     (117 )     (316 )
Discontinued chemicals operations     (9 )     6       1       3       1  
Coke     9       20       24       9       62  
Corporate and Other:                    
Corporate expenses     (22 )     (18 )     (23 )     (17 )     (80 )
Net financing expenses and other     (24 )     (16 )     (29 )     (32 )     (101 )
Pretax income (loss) attributable to Sunoco, Inc.                    
shareholders before special items     (141 )     71       57       (48 )     (61 )
Income tax expense (benefit)     (19 )     22       (8 )     (53 )     (58 )
Income (loss) attributable to Sunoco, Inc.                    
shareholders before special items     (122 )     49       65       5       (3 )
                     
Special items:                    
Continuing operations     51       (7 )     (1,966 )     (611 )     (2,533 )
Discontinued operations     -       (287 )     32       (1 )     (256 )
Pretax income (loss) from special items     51       (294 )     (1,934 )     (612 )     (2,789 )
Income tax expense (benefit)     30       (120 )     (773 )     (245 )     (1,108 )
Income (loss) from special items     21       (174 )     (1,161 )     (367 )     (1,681 )
                     
Net loss attributable to Sunoco, Inc. shareholders   $ (101 )   $ (125 )   $ (1,096 )   $ (362 )   $ (1,684 )
                     
Earnings (loss) per share of common stock (diluted):                    
Income (loss) attributable to Sunoco, Inc.                    
shareholders before special items   $ (1.01 )   $ 0.40     $ 0.57     $ 0.05     $ (0.03 )
Income (loss) from special items     0.17       (1.43 )     (10.19 )     (3.44 )     (14.52 )
Net loss attributable to Sunoco, Inc. shareholders   $ (0.84 )   $ (1.03 )   $ (9.62 )   $ (3.39 )   $ (14.55 )
                     
SUNOCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
(Millions of Dollars)

Unaudited

                     
    2010
    1st   2nd   3rd   4th   Total
Revenues                    
Sales and other operating revenue                    
(including consumer excise taxes)   $ 7,917     $ 9,294     $ 9,058     $ 9,906     $ 36,175  
Interest income     -       1       3       1       5  
Gain on remeasurement of pipeline equity interests     -       -       128       -       128  
Other income, net     26       13    

 

29       24       92  
      7,943       9,308       9,218       9,931       36,400  
Costs and Expenses                    
Cost of products sold and operating expenses     7,079       8,090       8,055       8,787       32,011  
Consumer excise taxes     530       608       616       594       2,348  
Selling, general and administrative expenses     142       163       157       178       640  
Depreciation, depletion and amortization     107       115       121       124       467  
Payroll, property and other taxes     33       24       36       20       113  
Provision for asset write-downs and other matters     45       22       (3 )     45       109  
Interest cost and debt expense     39       40       43       42       164  
Interest capitalized     (3 )     (3 )     (4 )     (5 )     (15 )
      7,972       9,059       9,021       9,785       35,837  
Income (loss) from continuing operations before                    
income tax expense (benefit)     (29 )     249       197       146       563  
Income tax expense (benefit)     (20 )     78       28       32       118  
Income (loss) from continuing operations     (9 )     171       169       114       445  
Income (loss) from discontinued operations, net of income taxes     (29 )     5       3       4       (17 )
Net income (loss)     (38 )     176       172       118       428  
Less: Net income attributable to noncontrolling interests     25       31       107       31       194  
Net income (loss) attributable to Sunoco, Inc. shareholders   $ (63 )   $ 145     $ 65     $ 87     $ 234  
                                         
                     
SUNOCO, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS

(Millions of Dollars)

(Unaudited)

                     
    2011
    1st   2nd   3rd   4th   Total
Revenues                    
Sales and other operating revenue                    
(including consumer excise taxes)   $ 10,308     $ 11,670     $ 12,145     $ 12,701     $ 46,824  
Interest income     4       8       5       6       23  
Gain on remeasurement of pipeline equity interests     -       9       -       -       9  
Other income, net     24       8       8       20       60  
      10,336       11,695       12,158       12,727       46,916  
Costs and Expenses                    
Cost of products sold and operating expenses     9,522       10,693       11,098       11,817       43,130  
Consumer excise taxes     547       553       583       563       2,246  
Selling, general and administrative expenses     140       166       173       166       645  
Depreciation, depletion and amortization     105       106       112       71       394  
Payroll, property and other taxes     36       23       25       20       104  
Provision for asset write-downs and other matters     6       7       1,964       652       2,629  
Interest cost and debt expense     43       39       56       60       198  
Interest capitalized     (6 )     (6 )     (8 )     (6 )     (26 )
      10,393       11,581       14,003       13,343       49,320  
Income (loss) from continuing operations before                    
income tax expense (benefit)     (57 )     114       (1,845 )     (616 )     (2,404 )
Income tax expense (benefit)     18       17       (787 )     (299 )     (1,051 )
Income (loss) from continuing operations     (75 )     97       (1,058 )     (317 )     (1,353 )
Income (loss) from discontinued operations, net of income taxes     (5 )     (168 )     20       (3 )     (156 )
Net loss     (80 )     (71 )     (1,038 )     (320 )     (1,509 )
Less: Net income attributable to noncontrolling interests     21       54       58       42       175  
Net loss attributable to Sunoco, Inc. shareholders   $ (101 )   $ (125 )   $ (1,096 )   $ (362 )   $ (1,684 )
                                         
     
SUNOCO, INC.
CONSOLIDATED BALANCE SHEETS

(Millions of Dollars)

(Unaudited)

     
    At December 31,
    2011   2010
Assets        
Cash and cash equivalents   $ 2,064   $ 1,485
Accounts and notes receivable, net     3,071     2,679
Inventories     587     404
Deferred income taxes     286     129
Assets held for sale     -     1,029
Total current assets     6,008     5,726
Investments and long-term receivables     158     160
Note receivable from sale of Toledo refinery     182     -
Properties, plants and equipment, net     4,965     7,055
Deferred income taxes     68     -
Deferred charges and other assets     601     356
Total assets   $ 11,982   $ 13,297
Liabilities and Equity        
Accounts payable   $ 4,098   $ 3,912
Accrued liabilities     741     554
Short-term borrowings     103     115
Current portion of long-term debt     282     178
Taxes payable     146     170
Total current liabilities     5,370     4,929
Long-term debt     3,159     2,136
Retirement benefit liabilities     542     481
Deferred income taxes     544     1,390
Other deferred credits and liabilities     567     562
Total liabilities     10,182     9,498
Equity        
Sunoco, Inc. shareholders' equity     893     3,046
Noncontrolling interests     907     753
Total equity     1,800     3,799
Total liabilities and equity   $ 11,982   $ 13,297
             
     
SUNOCO, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

(Millions of Dollars)

(Unaudited)

     
    For the Twelve Months Ended
    December 31,
    2011   2010
Cash Flows from Operating Activities:        
Net income (loss)   $ (1,509 )   $ 428  
Adjustments to reconcile net income (loss) to net cash provided by        
operating activities:        
(Gain) loss on divestment of discontinued chemicals operations     (13 )     169  
Gain on remeasurement of pipeline equity interests     (9 )     (128 )
Provision for asset write-downs and other matters     2,898       109  
Depreciation, depletion and amortization     410       497  
Deferred income tax expense (benefit)     (1,165 )     110  
Payments in excess of expense for retirement plans*     (8 )     (130 )
Changes in working capital pertaining to operating activities:        
Accounts and notes receivable     (392 )     (390 )
Inventories     (212 )     82  
Accounts payable and accrued liabilities     178       641  
Income tax refund receivable and taxes payable     (35 )     294  
Other     (6 )     12  
Net cash provided by operating activities     137       1,694  
Cash Flows from Investing Activities:        
Capital expenditures     (723 )     (772 )
Acquisitions     (419 )     (268 )
Proceeds from divestments:        
Discontinued chemicals operations     181       348  
Toledo refinery and related inventory     855       -  
Other divestments     21       50  
Other     (13 )     (5 )
Net cash used in investing activities     (98 )     (647 )
Cash Flows from Financing Activities:        
Net repayments of short-term borrowings     (12 )     (282 )
Net borrowings from money market notes     213       -  
Expenses related to SunCoke Energy, Inc. initial public offering     (21 )     -  
Net proceeds from issuance of long-term debt     1,834       1,144  
Repayments of long-term debt     (741 )     (894 )
Net proceeds from sale/issuance of Sunoco Logistics Partners L.P. limited partnership units     -       289  
Purchase of noncontrolling interest in Indiana Harbor cokemaking operations     (34 )     -  
Cash distributions to noncontrolling interests     (122 )     (123 )
Cash dividend payments     (71 )     (73 )
Purchase of common stock for treasury     (500 )     -  
Other     (6 )     -  
Net cash provided by financing activities     540       61  
Net increase in cash and cash equivalents     579       1,108  
Cash and cash equivalents at beginning of period     1,485       377  
Cash and cash equivalents at end of period   $ 2,064     $ 1,485  

 

       

* Payments for the year ended December 31, 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.

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