Exhibit 99.1
| | | | | | |
| |  | | | | News Release |
Sunoco, Inc.
1818 Market Street, Suite 1500
Philadelphia, PA 19103
| | |
| For further information contact: | | For release: IMMEDIATELY |
Thomas Golembeski (media) 215-977-6298
Clare McGrory (investors) 215-977-6764
No. 7-12
SUNOCO UPDATES PRELIMINARY FOURTH QUARTER 2011 RESULTS
No Change to Preliminary Pretax Results; After-Tax Amounts Provided
PHILADELPHIA, February 15, 2012 — 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 |
1
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.
2
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.
3
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.
4
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. |
5
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 | ) |
| | | | | | | | | | | | |
6
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 | |
| | | | | | | | |
7
SUNOCO, INC.
FINANCIAL AND OPERATING STATISTICS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Twelve
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 Months Ended | | | For the Twelve
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. |
8
SUNOCO, INC.
FINANCIAL AND OPERATING STATISTICS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Twelve
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. |
9
SUNOCO, INC.
FINANCIAL AND OPERATING STATISTICS
(Unaudited)
| | | | | | | | | | | | | | | | | | | | |
| | | For the Three Months Ended | | | For the Twelve
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 Months Ended | | | For the Twelve
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 Months Ended | | | For the Twelve
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. |
10
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 | |
| | | | | | | | | | | | | | | | | | | | |
11
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 | ) |
| | | | | | | | | | | | | | | | | | | | |
12
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 | |
| | | | | | | | | | | | | | | | | | | | |
13
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 | ) |
| | | | | | | | | | | | | | | | | | | | |
14
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 | |
| | | | | | | | |
15
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. |
16
