Sunoco 2009 Annual Report Download - page 16

Sunoco and a third party were owners of a joint venture that consisted of polymer-grade propylene
operations at the Marcus Hook, PA refinery and an adjacent polypropylene plant. In December 2007, Sunoco
purchased its partner’s interest for $18 million.
Sunoco’s Philadelphia phenol facility has the capacity to produce annually more than one billion pounds of
phenol and 700 million pounds of acetone. Under a long-term contract, the Chemicals business supplies
Honeywell International Inc. (“Honeywell”) with approximately 745 million pounds of phenol annually at a price
based on the market value of cumene feedstock plus an amount approximating other phenol production costs.
During March 2009, Sunoco permanently shut down its Bayport, TX polypropylene plant which had become
uneconomic to operate and in 2008 also determined that the goodwill related to its polypropylene business no longer
had value. In connection therewith, in 2009, the Company recorded a $4 million after-tax accrual for a take-or-pay
contract loss, employee terminations and other exit costs in connection with the shutdown of the Bayport facility
and, in 2008, recorded a $54 million after-tax provision to write down the affected Bayport assets to estimated fair
value and to write off the remaining polypropylene business goodwill. During 2007, Sunoco decided to permanently
shut down a previously idled phenol production line at its Haverhill, OH plant that had become uneconomic to
restart. In connection with this shutdown, the Company recorded an $8 million after-tax provision to write-off the
affected production line. During 2007, Sunoco also recorded a $7 million after-tax loss associated with the sale of
its Neville Island, PA terminal facility, which included an accrual for enhanced pension benefits associated with
employee terminations and for other required exit costs. These items are reported as part of the Asset Write-Downs
and Other Matters shown separately in Corporate and Other in the Earnings Profile of Sunoco Businesses.
The following table sets forth information concerning petrochemicals production by the Chemicals business
(in millions of pounds):
Capacity at
December 31, 2009
Production
2009 2008 2007
Phenol ...................................... 1,775 1,042 1,379 1,517
Acetone ..................................... 1,083 642 852 937
Bisphenol-A .................................. 240 184 219 223
Other Phenol Derivatives ........................ 120 47 62 74
Polypropylene ................................ 2,150 1,885 2,218 2,289
Cumene ..................................... — — — 1,530*
Propylene .................................... — — — 654*
Total Production ............................. 5,368 3,800 4,730 7,224
Less: Production Used as Feedstocks** ............ 207 246 2,434
Total Production Available for Sale ............. 3,593 4,484 4,790
*Reflects production from the Epsilon cumene and propylene splitter assets prior to the transfer of these assets to Refining and
Supply, effective January 1, 2008.
**Includes phenol and acetone (used in the manufacture of bisphenol-A). Prior to the transfer of the cumene and propylene splitter
assets, also included cumene (used in the manufacture of phenol and acetone) and polymer-grade propylene (used in the
manufacture of polypropylene).
Petrochemical products produced by the Chemicals business are distributed and sold on a worldwide basis
with most of the sales made to customers in the United States. The following table sets forth the sale of
petrochemicals to third parties by Chemicals (in millions of pounds):
2009 2008 2007
Phenol and Related Products (including Bisphenol-A) ................. 1,774 2,274 2,508
Polypropylene ................................................. 1,925 2,204 2,297
Other ........................................................ 21 65 80
3,720 4,543 4,885
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