Exhibit 99.1
Sunoco, Inc.
1735 Market Street
Philadelphia, Pa. 19103-7583
| | |
For further information contact Thomas Golembeski (media) 215-977-6298 Tom Harr (investors) 215-977-6764 | | For release: IMMEDIATELY |
No. 29-08
SUNOCO REPORTS THIRD QUARTER 2008 RESULTS
PHILADELPHIA, November 5, 2008 – Sunoco, Inc. (NYSE: SUN) today reported net income of $549 million ($4.70 per share diluted) for the third quarter of 2008 versus $216 million ($1.81 per share diluted) for the third quarter of 2007. Excluding special items, Sunoco had income for the 2008 third quarter of $559 million ($4.78 per share diluted). There were no special items in the third quarter of 2007.
For the first nine months of 2008, Sunoco reported net income of $572 million ($4.88 per share diluted) versus $900 million ($7.46 per share diluted) in the first nine months of 2007. Excluding special items, income in the first nine months of 2008 was $561 million ($4.79 per share diluted) versus $810 million ($6.71 per share diluted) in the first nine months of 2007.
“After an extremely challenging market environment in the first half of 2008, very strong margins in our Refining and Supply and Retail Marketing businesses led to a record result in the third quarter,” said Lynn Elsenhans, Sunoco’s Chief Executive Officer and President. “Refining and Supply earned $424 million as falling crude oil prices and reduced industry production related to the Gulf Coast hurricane activity led to significantly improved margins. In addition, optimization actions during the quarter greatly enhanced our capture of available market opportunities. We reduced the amount of Nigerian-sourced crude oil run at our refineries by more than 200,000 barrels per day versus historical levels during a period when premiums for Nigerian grades remained high. At the same time, we continued to optimize our product yields to maximize distillate production early in the quarter when gasoline margins were weak and then increased gasoline production during September as market demand for gasoline increased.
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SUNOCO 3Q08 EARNINGS, PAGE 2
“Demonstrating the diversity of our earnings base, Sunoco’s non-refining businesses earned $140 million during the third quarter, their highest quarterly contribution ever. Retail Marketing earned $72 million despite lower year-over-year sales volumes as falling wholesale gasoline prices through most of the quarter led to expanded retail margins. Chemicals also benefited from falling feedstock costs to earn $19 million despite some hurricane-related downtime at our Houston-area facilities in September. Some assets in our Logistics business were also impacted by the September hurricanes but otherwise continued strong performance from Sunoco Logistics Partners LP (NYSE: SXL) contributed to earnings of $20 million for this business. Finally, Coke earned a record $29 million, reflecting a partial contribution from our second cokemaking facility in Haverhill, Ohio which began operations during the quarter. With an increased contribution from these assets and the benefit of higher coal prices in the fourth quarter, we continue to expect the Coke business to earn approximately $110-$115 million for the full-year 2008.”
Commenting on the Company’s strategic outlook, Elsenhans said, “While falling wholesale gasoline prices kept retail margins strong in October, Gulf Coast refining supply is largely back on line following the hurricanes and the slowing economy will likely continue to suppress demand for refined products as we enter 2009. More than ever, this market environment requires our continued focus to maintain financial discipline. As of September 30, our net-debt-to-capital ratio was 30 percent as defined by the covenant in our revolving credit agreement. We had $327 million of cash on the balance sheet and $1.8 billion of available liquidity, including funds available to SXL. In addition, we have decided not to proceed with the previously announced capital improvement project to upgrade the Tulsa refinery, which will reduce planned spending by approximately $375 million. Sunoco continues to pursue the potential sale of the facility and re-evaluate our entire portfolio of assets to be responsive to changing global market conditions and achieve enhanced shareholder value. Further updates on each of these matters as well as additional detail on our 2009 capital program will be discussed at a meeting for securities analysts and investors to be held on December 15, 2008.”
DETAILS OF THIRD QUARTER RESULTS
REFINING AND SUPPLY
Refining and Supply earned $424 million in the third quarter of 2008 versus $171 million in the third quarter of 2007. The increase in earnings was primarily due to higher realized margins, partially offset by higher expenses and lower production volumes. The higher margins primarily resulted from tighter product markets following storms in the U.S. Gulf Coast region.
RETAIL MARKETING
Retail Marketing earned $72 million in the third quarter of 2008 versus $31 million in the third quarter of 2007. The increase in earnings was primarily due to higher average retail gasoline and distillate margins, partially offset by lower retail gasoline sales volumes and lower divestment gains. Results for the quarter included a $5 million after-tax charge related to asset impairment losses and associated
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SUNOCO 3Q08 EARNINGS, PAGE 3
costs in conjunction with the Company’s Retail Portfolio Management (RPM) program. The Company anticipates that the future gains to be recognized from the divestment of sites under the RPM program will exceed the impairment losses and associated costs recognized during the quarter.
CHEMICALS
Chemicals earned $19 million in the third quarter of 2008 versus $13 million in the prior-year period. The increase in earnings was due primarily to higher margins, partially offset by lower sales volumes.
LOGISTICS
Earnings for the Logistics segment were $20 million in the third quarter of 2008 versus $14 million in the third quarter of 2007. The increase was due to continued improved results from SXL which benefited from increased pipeline fees and higher lease acquisition margins in its western pipeline system as well as higher earnings from the eastern pipeline system and terminalling operations.
COKE
The Coke business earned $29 million in the third quarter of 2008 versus $7 million in the third quarter of 2007. The increase in earnings was due primarily to increased price realizations from coal and coke production and higher coke sales volumes at Jewell.
CORPORATE AND OTHER
Corporate administrative expenses (income) were $(2) million after tax in the third quarter of 2008 versus $11 million after tax in the third quarter of 2007. The decrease in expenses was primarily due to an $11 million favorable income tax consolidation adjustment in the third quarter of 2008. This adjustment essentially reversed unfavorable adjustments recorded in the first half of the year.
Net financing expenses were $7 million after tax in the third quarter of 2008 versus $9 million after tax in the third quarter of 2007. The decrease was primarily due to higher capitalized interest and the absence of expense attributable to the preferential return of third-party investors in Sunoco’s Indiana Harbor cokemaking operations, partially offset by lower interest income.
SPECIAL ITEMS
During the third quarter of 2008, Sunoco elected not to proceed with a capital project at its Tulsa refinery and, as a result, recorded a $10 million after-tax provision to write-off the expenditures incurred to date on this project.
NINE MONTH RESULTS
Sunoco earned $572 million, or $4.88 per share of common stock on a diluted basis, for the first nine months of 2008 versus $900 million, or $7.46 per share, in the comparable 2007 period. The decrease
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SUNOCO 3Q08 EARNINGS, PAGE 4
was primarily due to lower margins in Sunoco’s Refining and Supply business. Also contributing to the decline were the absence of a $90 million after-tax gain related to the prior issuance of SXL limited partnership units, higher expenses, lower production of refined products, lower gains on asset divestments, lower retail gasoline and distillate sales volumes, and the provision for asset write-downs associated with the canceled capital project at the Tulsa refinery. Partially offsetting these negative factors were higher average retail gasoline and distillate margins, higher income attributable to Sunoco’s Coke, Logistics and Chemicals businesses, lower net financing expenses and an $11 million after-tax gain on an insurance recovery and a $10 million after-tax gain pertaining to certain income tax matters that were recognized in the second quarter of 2008.
Sunoco, Inc., headquartered in Philadelphia, PA, is a leading manufacturer and marketer of petroleum and petrochemical products. With 910 thousand barrels per day of refining capacity, approximately 4,700 retail sites selling gasoline and convenience items, approximately 5,500 miles of crude oil and refined product owned and operated pipelines and 38 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 unique, patented technology, Sunoco’s cokemaking facilities in the United States have the capacity to manufacture approximately 3.0 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 third quarter’s results can monitor the Company’s quarterly teleconference call, which is scheduled for 3:00 p.m. ET on November 6, 2008. 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. Although Sunoco believes that the assumptions underlying these statements are reasonable, investors are cautioned that such forward-looking statements are inherently uncertain and necessarily involve risks that may affect Sunoco’s business prospects and performance, causing actual results to differ materially from those discussed in this release. Such risks and uncertainties include, by way of example and not of limitation: general economic, financial and business conditions which could affect Sunoco’s financial condition and results of operations; changes in competition and competitive practices, including the impact of foreign imports; effects of weather conditions and natural disasters on the Company’s operating facilities and on product supply and demand; changes in refining, marketing and chemical margins; changes in coal and coke prices; variation in crude oil and petroleum-based commodity prices and availability of crude oil and
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feedstock supply or transportation; effects of transportation disruptions; changes in the price differentials between light-sweet and heavy-sour crude oils; changes in the marketplace which may affect supply and demand for Sunoco’s products; changes in the level of capital expenditures or operating expenses; changes in product specifications; availability and pricing of ethanol; changes in the level of environmental capital, operating or remediation expenditures; age of, and changes in the reliability, efficiency and capacity of, the Company’s operating facilities or those of third parties; effects of adverse events relating to the operation of the Company’s facilities and to the transportation and storage of hazardous materials (including equipment malfunction, explosions, fires, spills, and the effects of severe weather conditions); risks related to labor relations and workplace safety; changes in, or new, statutes and government regulations or their interpretations, including those relating to the environment and global warming; changes in accounting rules and/or tax laws or their interpretations, including the method of accounting for inventories and pensions; ability to identify acquisitions, execute them under favorable terms and integrate them into the Company’s existing businesses; ability to enter into joint ventures and other similar arrangements under favorable terms; delays and/or costs related to construction, improvements and/or repairs of facilities (including shortages of skilled labor, the issuance of applicable permits and inflation); nonperformance or force majeure by, or disputes with, major customers, suppliers, dealers, distributors or other business partners; changes in credit terms required by suppliers; changes in financial markets impacting pension expense and funding requirements; political and economic conditions in the markets in which the Company, its suppliers or customers operate, including the impact of potential terrorist acts and international hostilities; military conflicts between, or internal instability in, one or more oil producing countries, governmental actions and other disruptions in the ability to obtain crude oil; changes in the availability and cost of equity and debt financing, including amounts under the Company’s revolving credit facilities; performance of financial institutions impacting the Company’s liquidity, including those supporting the Company’s revolving credit and accounts receivable securitization facilities; changes in the credit ratings assigned to the Company’s debt securities or credit facilities; and changes in the status of, or initiation of new, litigation, arbitration or other proceedings to which the Company is a party or liability resulting from such litigation, arbitration or other proceedings, including natural resource damage claims. These and other applicable risks and uncertainties have been described more fully in Sunoco’s Second Quarter 2008 Form 10-Q filed with the Securities and Exchange Commission on August 7, 2008 and in other periodic reports filed with the Securities and Exchange Commission. Sunoco undertakes no obligation to update any forward-looking statements in this release, whether as a result of new information or future events.
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Sunoco, Inc.
2008 Third Quarter and Nine-Month Financial Summary
(Unaudited)
| | | | | | |
| | | 2008 | | 2007 |
Third Quarter | | | | | | |
| | |
Revenues | | $ | 16,109,000,000 | | $ | 11,497,000,000 |
| | |
Net Income | | $ | 549,000,000 | | $ | 216,000,000 |
| | |
Net Income Per Share of Common Stock: | | | | | | |
Basic | | $ | 4.70 | | $ | 1.82 |
Diluted | | $ | 4.70 | | $ | 1.81 |
| | |
Weighted-Average Number of Shares Outstanding (In Millions): | | | | | | |
Basic | | | 116.9 | | | 119.0 |
Diluted | | | 116.9 | | | 119.2 |
| | |
Nine Months | | | | | | |
| | |
Revenues | | $ | 45,006,000,000 | | $ | 31,566,000,000 |
| | |
Net Income | | $ | 572,000,000 | | $ | 900,000,000 |
| | |
Net Income Per Share of Common Stock: | | | | | | |
Basic | | $ | 4.89 | | $ | 7.48 |
Diluted | | $ | 4.88 | | $ | 7.46 |
| | |
Weighted-Average Number of Shares Outstanding (In Millions): | | | | | | |
Basic | | | 117.0 | | | 120.4 |
Diluted | | | 117.1 | | | 120.7 |
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SUNOCO 3Q08 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 | | | | |
| | | 2008 | | | 2007 | | | Variance | |
Refining and Supply | | $ | 424 | | | $ | 171 | | | $ | 253 | |
Retail Marketing | | | 72 | | | | 31 | | | | 41 | |
Chemicals | | | 19 | | | | 13 | | | | 6 | |
Logistics | | | 20 | | | | 14 | | | | 6 | |
Coke | | | 29 | | | | 7 | | | | 22 | |
Corporate and Other: | | | | | | | | | | | | |
Corporate expenses | | | 2 | | | | (11 | ) | | | 13 | |
Net financing expenses and other | | | (7 | ) | | | (9 | ) | | | 2 | |
| | | | | | | | | | | | |
| | | 559 | | | | 216 | | | | 343 | |
Special items | | | (10 | ) | | | — | | | | (10 | ) |
| | | | | | | | | | | | |
Consolidated net income | | $ | 549 | | | $ | 216 | | | $ | 333 | |
| | | | | | | | | | | | |
| | | |
Earnings per share of common stock (diluted): | | | | | | | | | | | | |
Income before special items | | $ | 4.78 | | | $ | 1.81 | | | $ | 2.97 | |
Special items | | | (.08 | ) | | | — | | | | (.08 | ) |
| | | | | | | | | | | | |
Net income | | $ | 4.70 | | | $ | 1.81 | | | $ | 2.89 | |
| | | | | | | | | | | | |
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SUNOCO 3Q08 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 | | | | |
| | | 2008 | | | 2007 | | | Variance | |
Refining and Supply | | $ | 333 | | | $ | 729 | | | $ | (396 | ) |
Retail Marketing | | | 98 | | | | 68 | | | | 30 | |
Chemicals | | | 40 | | | | 28 | | | | 12 | |
Logistics | | | 56 | | | | 33 | | | | 23 | |
Coke | | | 77 | | | | 31 | | | | 46 | |
Corporate and Other: | | | | | | | | | | | | |
Corporate expenses | | | (26 | ) | | | (44 | ) | | | 18 | |
Net financing expenses and other | | | (17 | ) | | | (35 | ) | | | 18 | |
| | | | | | | | | | | | |
| | | 561 | | | | 810 | | | | (249 | ) |
Special items | | | 11 | | | | 90 | | | | (79 | ) |
| | | | | | | | | | | | |
Consolidated net income | | $ | 572 | | | $ | 900 | | | $ | (328 | ) |
| | | | | | | | | | | | |
| | | |
Earnings per share of common stock (diluted): | | | | | | | | | | | | |
Income before special items | | $ | 4.79 | | | $ | 6.71 | | | $ | (1.92 | ) |
Special items | | | .09 | | | | .75 | | | | (.66 | ) |
| | | | | | | | | | | | |
Net income | | $ | 4.88 | | | $ | 7.46 | | | $ | (2.58 | ) |
| | | | | | | | | | | | |
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SUNOCO 3Q08 EARNINGS, PAGE 9
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
| | | | | | | | | | | | |
| | | For the Three
Months Ended
September 30 | | For the Nine
Months Ended
September 30 |
| | | 2008 | | 2007 | | 2008 | | 2007 |
TOTAL REFINING AND SUPPLY | | | | | | | | | | | | |
| | | | |
Income (Millions of Dollars) | | $ | 424 | | $ | 171 | | $ | 333 | | $ | 729 |
Realized Wholesale Margin* (Per Barrel of Production Available for Sale) | | $ | 14.72 | | $ | 8.06 | | $ | 8.51 | | $ | 9.94 |
Crude Inputs as Percent of Crude Unit Rated Capacity** | | | 88 | | | 96 | | | 86 | | | 91 |
Throughputs (Thousand Barrels Daily): | | | | | | | | | | | | |
Crude Oil | | | 803.6 | | | 873.1 | | | 782.5 | | | 818.3 |
Other Feedstocks | | | 89.4 | | | 79.1 | | | 83.3 | | | 79.0 |
| | | | | | | | | | | | |
Total Throughputs | | | 893.0 | | | 952.2 | | | 865.8 | | | 897.3 |
| | | | | | | | | | | | |
Products Manufactured (Thousand Barrels Daily): | | | | | | | | | | | | |
Gasoline | | | 404.8 | | | 456.9 | | | 397.3 | | | 432.3 |
Middle Distillates | | | 331.1 | | | 329.0 | | | 317.2 | | | 304.1 |
Residual Fuel | | | 58.1 | | | 73.2 | | | 55.2 | | | 66.3 |
Petrochemicals | | | 38.5 | | | 37.7 | | | 35.7 | | | 36.3 |
Lubricants | | | 11.6 | | | 11.1 | | | 11.7 | | | 11.7 |
Other | | | 81.1 | | | 80.4 | | | 80.6 | | | 79.6 |
| | | | | | | | | | | | |
Total Production | | | 925.2 | | | 988.3 | | | 897.7 | | | 930.3 |
Less: Production Used as Fuel in Refinery Operations | | | 41.3 | | | 45.5 | | | 40.2 | | | 43.2 |
| | | | | | | | | | | | |
Total Production Available for Sale | | | 883.9 | | | 942.8 | | | 857.5 | | | 887.1 |
| | | | | | | | | | | | |
| * | Wholesale sales revenue less related cost of crude oil, other feedstocks, product purchases and terminalling and transportation divided by production available for sale. |
| ** | Reflects the impact of a 10 thousand barrels-per-day increase in crude unit capacity in MidContinent Refining in July 2007 attributable to a crude unit debottleneck project at the Toledo refinery. |
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SUNOCO 3Q08 EARNINGS, PAGE 10
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
| | | | | | | | | | | | |
| | | For the Three
Months Ended
September 30 | | For the Nine
Months Ended
September 30 |
| | | 2008 | | 2007 | | 2008 | | 2007 |
Northeast Refining* | | | | | | | | | | | | |
| | | | |
Realized Wholesale Margin (Per Barrel of Production Available for Sale) | | $ | 15.20 | | $ | 6.35 | | $ | 8.70 | | $ | 8.05 |
Market Benchmark 6-3-2-1 (Value Added) (Per Barrel) | | $ | 11.98 | | $ | 8.46 | | $ | 9.51 | | $ | 10.25 |
Crude Inputs as Percent of Crude Unit Rated Capacity | | | 88 | | | 98 | | | 86 | | | 91 |
Throughputs (Thousand Barrels Daily): | | | | | | | | | | | | |
Crude Oil | | | 573.6 | | | 643.2 | | | 562.3 | | | 599.1 |
Other Feedstocks | | | 79.4 | | | 69.3 | | | 74.3 | | | 69.1 |
| | | | | | | | | | | | |
Total Throughputs | | | 653.0 | | | 712.5 | | | 636.6 | | | 668.2 |
| | | | | | | | | | | | |
Products Manufactured (Thousand Barrels Daily): | | | | | | | | | | | | |
Gasoline | | | 306.9 | | | 342.7 | | | 299.3 | | | 320.1 |
Middle Distillates | | | 236.6 | | | 249.8 | | | 231.6 | | | 230.5 |
Residual Fuel | | | 53.1 | | | 67.9 | | | 50.4 | | | 62.1 |
Petrochemicals | | | 31.0 | | | 29.3 | | | 29.1 | | | 28.0 |
Other | | | 48.8 | | | 47.7 | | | 49.0 | | | 49.3 |
| | | | | | | | | | | | |
Total Production | | | 676.4 | | | 737.4 | | | 659.4 | | | 690.0 |
Less: Production Used as Fuel in Refinery Operations | | | 30.2 | | | 34.1 | | | 29.4 | | | 31.9 |
| | | | | | | | | | | | |
Total Production Available for Sale | | | 646.2 | | | 703.3 | | | 630.0 | | | 658.1 |
| | | | | | | | | | | | |
| | | | |
MidContinent Refining** | | | | | | | | | | | | |
| | | | |
Realized Wholesale Margin (Per Barrel of Production Available for Sale) | | $ | 13.41 | | $ | 13.10 | | $ | 7.99 | | $ | 15.37 |
Market Benchmark 3-2-1 (Per Barrel) | | $ | 15.51 | | $ | 17.02 | | $ | 11.22 | | $ | 18.80 |
Crude Inputs as Percent of Crude Unit Rated Capacity*** | | | 90 | | | 90 | | | 86 | | | 88 |
Throughputs (Thousand Barrels Daily): | | | | | | | | | | | | |
Crude Oil | | | 230.0 | | | 229.9 | | | 220.2 | | | 219.2 |
Other Feedstocks | | | 10.0 | | | 9.8 | | | 9.0 | | | 9.9 |
| | | | | | | | | | | | |
Total Throughputs | | | 240.0 | | | 239.7 | | | 229.2 | | | 229.1 |
| | | | | | | | | | | | |
| * | Comprised of the Marcus Hook, Philadelphia and Eagle Point refineries. |
| ** | Comprised of the Toledo and Tulsa refineries. |
| *** | Reflects the impact of a 10 thousand barrels-per-day increase in crude unit capacity in July 2007 attributable to a crude unit debottleneck project at the Toledo refinery. |
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SUNOCO 3Q08 EARNINGS, PAGE 11
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
| | | | | | | | | | | | | | | | |
| | | For the Three
Months Ended
September 30 | | | For the Nine
Months Ended
September 30 | |
| | | 2008 | | | 2007 | | | 2008 | | | 2007 | |
MidContinent Refining (continued) | | | | | | | | | | | | | | | | |
| | | | |
Products Manufactured (Thousand Barrels Daily): | | | | | | | | | | | | | | | | |
Gasoline | | | 97.9 | | | | 114.2 | | | | 98.0 | | | | 112.2 | |
Middle Distillates | | | 94.5 | | | | 79.2 | | | | 85.6 | | | | 73.6 | |
Residual Fuel | | | 5.0 | | | | 5.3 | | | | 4.8 | | | | 4.2 | |
Petrochemicals | | | 7.5 | | | | 8.4 | | | | 6.6 | | | | 8.3 | |
Lubricants | | | 11.6 | | | | 11.1 | | | | 11.7 | | | | 11.7 | |
Other | | | 32.3 | | | | 32.7 | | | | 31.6 | | | | 30.3 | |
| | | | | | | | | | | | | | | | |
Total Production | | | 248.8 | | | | 250.9 | | | | 238.3 | | | | 240.3 | |
Less: Production Used as Fuel in Refinery Operations | | | 11.1 | | | | 11.4 | | | | 10.8 | | | | 11.3 | |
| | | | | | | | | | | | | | | | |
Total Production Available for Sale | | | 237.7 | | | | 239.5 | | | | 227.5 | | | | 229.0 | |
| | | | | | | | | | | | | | | | |
| | | | |
RETAIL MARKETING | | | | | | | | | | | | | | | | |
| | | | |
Income (Millions of Dollars) | | $ | 72 | | | $ | 31 | | | $ | 98 | | | $ | 68 | |
Retail Margin* (Per Barrel): | | | | | | | | | | | | | | | | |
Gasoline | | $ | 7.85 | | | $ | 4.68 | | | $ | 5.20 | | | $ | 4.15 | |
Middle Distillates | | $ | 5.94 | | | $ | 3.41 | | | $ | 5.95 | | | $ | 4.88 | |
Sales (Thousand Barrels Daily): | | | | | | | | | | | | | | | | |
Gasoline | | | 287.0 | | | | 302.9 | | | | 288.5 | | | | 303.2 | |
Middle Distillates | | | 37.3 | | | | 37.3 | | | | 37.4 | | | | 41.3 | |
| | | | | | | | | | | | | | | | |
| | | 324.3 | | | | 340.2 | | | | 325.9 | | | | 344.5 | |
| | | | | | | | | | | | | | | | |
Total Retail Gasoline Outlets, End of Period | | | 4,716 | | | | 4,687 | | | | 4,716 | | | | 4,687 | |
Gasoline and Diesel Throughput per Company- Owned or Leased Outlet
(M Gal/Site/Month) | | | 150 | | | | 154 | | | | 148 | | | | 149 | |
Convenience Stores: | | | | | | | | | | | | | | | | |
Total Stores, End of Period | | | 706 | | | | 730 | | | | 706 | | | | 730 | |
Merchandise Sales (M$/Store/Month) | | $ | 90 | | | $ | 91 | | | $ | 84 | | | $ | 84 | |
Merchandise Margin (Company Operated) (% of Sales) | | | 27 | % | | | 27 | % | | | 27 | % | | | 27 | % |
| * | Retail sales price less related wholesale price, terminalling and transportation costs and consumer excise taxes per barrel. The retail sales price is the weighted-average price received through the various branded marketing distribution channels. |
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SUNOCO 3Q08 EARNINGS, PAGE 12
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
| | | | | | | | | | | | | | |
| | | For the Three
Months Ended
September 30 | | For the Nine
Months Ended
September 30 |
| | | 2008 | | | 2007 | | 2008 | | | 2007 |
CHEMICALS | | | | | | | | | | | | | | |
| | | | |
Income (Millions of Dollars) | | $ | 19 | | | $ | 13 | | $ | 40 | | | $ | 28 |
Margin* (Cents per Pound): | | | | | | | | | | | | | | |
All Products** | | | 12.0 | | | | 10.0 | | | 10.6 | | | | 10.1 |
Phenol and Related Products | | | 10.6 | | | | 8.7 | | | 9.1 | | | | 8.6 |
Polypropylene** | | | 14.0 | | | | 11.7 | | | 12.5 | | | | 11.9 |
Sales (Millions of Pounds): | | | | | | | | | | | | | | |
Phenol and Related Products | | | 607 | | | | 633 | | | 1,797 | | | | 1,869 |
Polypropylene | | | 531 | | | | 623 | | | 1,662 | | | | 1,747 |
Other | | | 14 | | | | 19 | | | 57 | | | | 61 |
| | | | | | | | | | | | | | |
| | | 1,152 | | | | 1,275 | | | 3,516 | | | | 3,677 |
| | | | | | | | | | | | | | |
* 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. |
|
| | | | |
LOGISTICS | | | | | | | | | | | | | | |
| | | | |
Income (Millions of Dollars) | | $ | 20 | | | $ | 14 | | $ | 56 | | | $ | 33 |
Pipeline and Terminal Throughput (Thousand Barrels Daily)*: | | | | | | | | | | | | | | |
Unaffiliated Customers | | | 1,154 | | | | 1,127 | | | 1,195 | | | | 1,152 |
Affiliated Customers | | | 1,623 | | | | 1,710 | | | 1,582 | | | | 1,645 |
| | | | | | | | | | | | | | |
| | | 2,777 | | | | 2,837 | | | 2,777 | | | | 2,797 |
| | | | | | | | | | | | | | |
* Excludes joint-venture operations. | | | | | | | | | | | | | | |
| | | | |
COKE | | | | | | | | | | | | | | |
| | | | |
Income (Millions of Dollars) | | $ | 29 | | | $ | 7 | | $ | 77 | | | $ | 31 |
Coke Production (Thousands of Tons): | | | | | | | | | | | | | | |
United States | | | 693 | * | | | 621 | | | 1,920 | * | | | 1,852 |
Brazil** | | | 408 | | | | 403 | | | 1,200 | | | | 672 |
| * | Includes amounts attributable to a second 550 thousand tons-per-year cokemaking facility at SunCoke Energy’s Haverhill site which commenced limited operations in July 2008. |
| ** | Represents amounts attributable to the facility in Vitória, Brazil which commenced limited operations in March 2007. |
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SUNOCO 3Q08 EARNINGS, PAGE 13
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
| | | | | | | | | | | | |
| | | For the Three
Months Ended
September 30 | | For the Nine
Months��Ended
September 30 |
| | | 2008 | | 2007 | | 2008 | | 2007 |
CAPITAL EXPENDITURES (Millions of Dollars) | | | | | | | | | | | | |
| | | | |
Refining and Supply | | $ | 147 | | $ | 118 | | $ | 492 | | $ | 562 |
Retail Marketing | | | 30 | | | 27 | | | 73 | | | 65 |
Chemicals | | | 11 | | | 14 | | | 32 | | | 41 |
Logistics | | | 37 | | | 21 | | | 88 | | | 85 |
Coke | | | 106 | | | 52 | | | 207 | | | 123 |
| | | | | | | | | | | | |
| | $ | 331 | | $ | 232 | | $ | 892 | | $ | 876 |
| | | | | | | | | | | | |
| | | | |
DEPRECIATION, DEPLETION AND AMORTIZATION (Millions of Dollars) | | | | | | | | | | | | |
| | | | |
Refining and Supply | | $ | 67 | | $ | 62 | | $ | 198 | | $ | 176 |
Retail Marketing | | | 28 | | | 27 | | | 80 | | | 80 |
Chemicals | | | 17 | | | 19 | | | 50 | | | 56 |
Logistics | | | 10 | | | 10 | | | 35 | | | 28 |
Coke | | | 7 | | | 5 | | | 18 | | | 15 |
| | | | | | | | | | | | |
| | $ | 129 | | $ | 123 | | $ | 381 | | $ | 355 |
| | | | | | | | | | | | |
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SUNOCO 3Q08 EARNINGS, PAGE 14
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars, Except Per-Share Amounts)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | 2007 | |
| | | 1st | | | 2nd | | | 3rd | | | 4th | | | Total | |
Refining and Supply | | $ | 76 | | | $ | 482 | | | $ | 171 | | | $ | 43 | | | $ | 772 | |
Retail Marketing | | | 7 | | | | 30 | | | | 31 | | | | 1 | | | | 69 | |
Chemicals | | | 9 | | | | 6 | | | | 13 | | | | (2 | ) | | | 26 | |
Logistics | | | 9 | | | | 10 | | | | 14 | | | | 12 | | | | 45 | |
Coke | | | 11 | | | | 13 | | | | 7 | | | | (2 | ) | | | 29 | |
Corporate and Other: | | | | | | | | | | | | | | | | | | | | |
Corporate expenses | | | (15 | ) | | | (18 | ) | | | (11 | ) | | | (23 | ) | | | (67 | ) |
Net financing expenses and other | | | (12 | ) | | | (14 | ) | | | (9 | ) | | | (6 | ) | | | (41 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | 85 | | | | 509 | | | | 216 | | | | 23 | | | | 833 | |
Special items | | | 90 | | | | — | | | | — | | | | (32 | ) | | | 58 | |
| | | | | | | | | | | | | | | | | | | | |
Consolidated net income (loss) | | $ | 175 | | | $ | 509 | | | $ | 216 | | | $ | (9 | ) | | $ | 891 | |
| | | | | | | | | | | | | | | | | | | | |
| | | | | |
Earnings (loss) per share of common stock (diluted): | | | | | | | | | | | | | | | | | | | | |
Income before special items | | $ | .70 | | | $ | 4.20 | | | $ | 1.81 | | | $ | .20 | | | $ | 6.94 | |
Special items | | | .74 | | | | — | | | | — | | | | (.28 | ) | | | .49 | |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 1.44 | | | $ | 4.20 | | | $ | 1.81 | | | $ | (.08 | ) | | $ | 7.43 | |
| | | | | | | | | | | | | | | | | | | | |
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SUNOCO 3Q08 EARNINGS, PAGE 15
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars, Except Per-Share Amounts)
(Unaudited)
| | | | | | | | | | | | |
| | | 2008 | |
| | | 1st | | | 2nd | | | 3rd | |
Refining and Supply | | $ | (123 | ) | | $ | 32 | | | $ | 424 | |
Retail Marketing | | | 26 | | | | — | | | | 72 | |
Chemicals | | | 18 | | | | 3 | | | | 19 | |
Logistics | | | 15 | | | | 21 | | | | 20 | |
Coke | | | 25 | | | | 23 | | | | 29 | |
Corporate and Other: | | | | | | | | | | | | |
Corporate expenses | | | (17 | ) | | | (11 | ) | | | 2 | |
Net financing expenses and other | | | (3 | ) | | | (7 | ) | | | (7 | ) |
| | | | | | | | | | | | |
| | | (59 | ) | | | 61 | | | | 559 | |
Special Items | | | — | | | | 21 | | | | (10 | ) |
| | | | | | | | | | | | |
Consolidated net income (loss) | | $ | (59 | ) | | $ | 82 | | | $ | 549 | |
| | | | | | | | | | | | |
| | | |
Earnings (loss) per share of common stock (diluted): | | | | | | | | | | | | |
Income (loss) before special items | | $ | (.50 | ) | | $ | .52 | | | $ | 4.78 | |
Special items | | | — | | | | .18 | | | | (.08 | ) |
| | | | | | | | | | | | |
Net income (loss) | | $ | (.50 | ) | | $ | .70 | | | $ | 4.70 | |
| | | | | | | | | | | | |
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SUNOCO 3Q08 EARNINGS, PAGE 16
Sunoco, Inc.
Consolidated Statements of Operations
(Millions of Dollars)
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | 2007 | |
| | | 1st | | | 2nd | | | 3rd | | | 4th | | | Total | |
REVENUES | | | | | | | | | | | | | | | | | | | | |
Sales and other operating revenue (including consumer excise taxes) | | $ | 9,135 | | | $ | 10,724 | | | $ | 11,475 | | | $ | 13,136 | | | $ | 44,470 | |
Interest income | | | 5 | | | | 4 | | | | 7 | | | | 9 | | | | 25 | |
Gain related to issuance of Sunoco Logistics Partners L.P. limited partnership units | | | 151 | | | | — | | | | — | | | | — | | | | 151 | |
Other income, net | | | 14 | | | | 36 | | | | 15 | | | | 17 | | | | 82 | |
| | | | | | | | | | | | | | | | | | | | |
| | | 9,305 | | | | 10,764 | | | | 11,497 | | | | 13,162 | | | | 44,728 | |
| | | | | | | | | | | | | | | | | | | | |
COSTS AND EXPENSES | | | | | | | | | | | | | | | | | | | | |
Cost of products sold and operating expenses | | | 7,988 | | | | 8,865 | | | | 10,078 | | | | 12,040 | | | | 38,971 | |
Consumer excise taxes | | | 641 | | | | 669 | | | | 673 | | | | 644 | | | | 2,627 | |
Selling, general and administrative expenses | | | 221 | | | | 236 | | | | 221 | | | | 274 | | | | 952 | |
Depreciation, depletion and amortization | | | 115 | | | | 117 | | | | 123 | | | | 125 | | | | 480 | |
Payroll, property and other taxes | | | 37 | | | | 30 | | | | 36 | | | | 32 | | | | 135 | |
Provision for asset write-downs and other matters | | | — | | | | — | | | | — | | | | 53 | | | | 53 | |
Interest cost and debt expense | | | 35 | | | | 32 | | | | 29 | | | | 31 | | | | 127 | |
Interest capitalized | | | (9 | ) | | | (5 | ) | | | (5 | ) | | | (7 | ) | | | (26 | ) |
| | | | | | | | | | | | | | | | | | | | |
| | | 9,028 | | | | 9,944 | | | | 11,155 | | | | 13,192 | | | | 43,319 | |
Income (loss) before income tax expense (benefit) | | | 277 | | | | 820 | | | | 342 | | | | (30 | ) | | | 1,409 | |
Income tax expense (benefit) | | | 102 | | | | 311 | | | | 126 | | | | (21 | ) | | | 518 | |
| | | | | | | | | | | | | | | | | | | | |
Net income (loss) | | $ | 175 | | | $ | 509 | | | $ | 216 | | | $ | (9 | ) | | $ | 891 | |
| | | | | | | | | | | | | | | | | | | | |
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SUNOCO 3Q08 EARNINGS, PAGE 17
Sunoco, Inc.
Consolidated Statements of Operations
(Millions of Dollars)
(Unaudited)
| | | | | | | | | | | | |
| | | 2008 | |
| | | 1st | | | 2nd | | | 3rd | |
REVENUES | | | | | | | | | | | | |
Sales and other operating revenue (including consumer excise taxes) | | $ | 12,796 | | | $ | 16,061 | | | $ | 16,092 | |
Interest income | | | 9 | | | | 3 | | | | 4 | |
Other income, net | | | 8 | | | | 20 | | | | 13 | |
| | | | | | | | | | | | |
| | | 12,813 | | | | 16,084 | | | | 16,109 | |
| | | | | | | | | | | | |
COSTS AND EXPENSES | | | | | | | | | | | | |
Cost of products sold and operating expenses | | | 11,935 | | | | 14,951 | | | | 14,155 | |
Consumer excise taxes | | | 590 | | | | 635 | | | | 645 | |
Selling, general and administrative expenses | | | 198 | | | | 222 | | | | 235 | |
Depreciation, depletion and amortization | | | 128 | | | | 124 | | | | 129 | |
Payroll, property and other taxes | | | 42 | | | | 34 | | | | 39 | |
Provision for asset write-downs and other matters | | | — | | | | (18 | ) | | | 17 | |
Interest cost and debt expense | | | 28 | | | | 28 | | | | 27 | |
Interest capitalized | | | (9 | ) | | | (8 | ) | | | (9 | ) |
| | | | | | | | | | | | |
| | | 12,912 | | | | 15,968 | | | | 15,238 | |
Income (loss) before income tax expense (benefit) | | | (99 | ) | | | 116 | | | | 871 | |
Income tax expense (benefit) | | | (40 | ) | | | 34 | | | | 322 | |
| | | | | | | | | | | | |
Net income (loss) | | $ | (59 | ) | | $ | 82 | | | $ | 549 | |
| | | | | | | | | | | | |
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SUNOCO 3Q08 EARNINGS, PAGE 18
Sunoco, Inc.
Consolidated Balance Sheets
(Millions of Dollars)
(Unaudited)
| | | | | | |
| | | At
September 30
2008 | | At
December 31
2007 |
ASSETS | | | | | | |
Current Assets | | | | | | |
Cash and cash equivalents | | $ | 327 | | $ | 648 |
Accounts and notes receivable, net | | | 3,248 | | | 2,710 |
Inventories | | | 1,108 | | | 1,150 |
Deferred income taxes | | | 132 | | | 130 |
| | | | | | |
Total Current Assets | | | 4,815 | | | 4,638 |
| | |
Investments and long-term receivables | | | 171 | | | 175 |
Properties, plants and equipment, net | | | 7,539 | | | 7,039 |
Deferred charges and other assets | | | 513 | | | 574 |
| | | | | | |
Total Assets | | $ | 13,038 | | $ | 12,426 |
| | | | | | |
| | |
LIABILITIES AND SHAREHOLDERS’ EQUITY | | | | | | |
Current Liabilities | | | | | | |
Accounts payable and accrued liabilities | | $ | 5,456 | | $ | 5,443 |
Short-term borrowings | | | 103 | | | — |
Current portion of long-term debt | | | 148 | | | 4 |
Taxes payable | | | 259 | | | 193 |
| | | | | | |
Total Current Liabilities | | | 5,966 | | | 5,640 |
| | |
Long-term debt | | | 1,483 | | | 1,724 |
Retirement benefit liabilities | | | 506 | | | 525 |
Deferred income taxes | | | 1,116 | | | 1,027 |
Other deferred credits and liabilities | | | 550 | | | 538 |
Minority interests | | | 444 | | | 439 |
Shareholders’ equity | | | 2,973 | | | 2,533 |
| | | | | | |
Total Liabilities and Shareholders’ Equity | | $ | 13,038 | | $ | 12,426 |
| | | | | | |
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SUNOCO 3Q08 EARNINGS, PAGE 19
Sunoco, Inc.
Consolidated Statements of Cash Flows
(Millions of Dollars)
(Unaudited)
| | | | | | | | |
| | | For the Nine Months
Ended September 30 | |
| | | 2008 | | | 2007 | |
INCREASES (DECREASES) IN CASH AND CASH EQUIVALENTS | | | | | | | | |
| | |
CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | | | |
Net income | | $ | 572 | | | $ | 900 | |
Adjustments to reconcile net income to net cash provided by operating activities: | | | | | | | | |
Gain related to issuance of Sunoco Logistics Partners L.P. limited partnership units | | | — | | | | (151 | ) |
Provision for asset write-downs and other matters | | | (1 | ) | | | — | |
Depreciation, depletion and amortization | | | 381 | | | | 355 | |
Deferred income tax expense | | | 71 | | | | 153 | |
Minority interest share of Sunoco Logistics Partners L.P. income | | | 61 | | | | 40 | |
Payments less than (in excess of) expense for retirement plans | | | 5 | | | | (49 | ) |
Changes in working capital pertaining to operating activities | | | (388 | ) | | | 23 | |
Other | | | 37 | | | | (14 | ) |
| | | | | | | | |
Net cash provided by operating activities | | | 738 | | | | 1,257 | |
| | | | | | | | |
| | |
CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | | | |
Capital expenditures | | | (892 | ) | | | (876 | ) |
Proceeds from divestments | | | 15 | | | | 46 | |
Other | | | 36 | | | | (30 | ) |
| | | | | | | | |
Net cash used in investing activities | | | (841 | ) | | | (860 | ) |
| | | | | | | | |
CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | | | |
Net repayments of short-term borrowings | | | — | | | | (25 | ) |
Net proceeds from issuance of long-term debt | | | 121 | | | | 244 | |
Repayments of long-term debt | | | (115 | ) | | | (167 | ) |
Cash distributions to investors in cokemaking operations | | | (26 | ) | | | (19 | ) |
Cash distributions to investors in Sunoco Logistics Partners L.P. | | | (45 | ) | | | (41 | ) |
Cash dividend payments | | | (102 | ) | | | (97 | ) |
Purchases of common stock for treasury | | | (49 | ) | | | (300 | ) |
Proceeds from issuance of common stock under management incentive plans | | | — | | | | 6 | |
Other | | | (2 | ) | | | 2 | |
| | | | | | | | |
Net cash used in financing activities | | | (218 | ) | | | (397 | ) |
| | | | | | | | |
Net decrease in cash and cash equivalents | | | (321 | ) | | | — | |
Cash and cash equivalents at beginning of period | | | 648 | | | | 263 | |
| | | | | | | | |
Cash and cash equivalents at end of period | | $ | 327 | | | $ | 263 | |
| | | | | | | | |
-END OF SUNOCO 3Q08 EARNINGS REPORT-
