Sunoco 2009 Annual Report Download - page 81

Subsequent Events
Subsequent events have been evaluated through February 24, 2010, the date the consolidated financial
statements were issued.
New Accounting Pronouncements
In June 2009, a new accounting pronouncement was issued which, among other things, clarifies when the
transfer of financial assets should result in derecognition in the financial statements. This pronouncement also
eliminates the concept of a qualifying special-purpose entity and enhances the disclosures required in connection
with a transfer of financial assets. In June 2009, another accounting pronouncement was issued which retains the
fundamental requirement that a VIE be consolidated by a company if that company is the primary beneficiary.
The new guidance clarifies when a company is to be deemed the primary beneficiary and also requires an
analysis to be performed to make this determination. In addition, this pronouncement requires ongoing
reassessments of whether an entity is the primary beneficiary of a VIE. These two accounting pronouncements
must be implemented effective January 1, 2010. Sunoco is evaluating the impact of the new guidance on its
financial statements.
2. Changes in Business and Other Matters
Acquisitions
Logistics Assets—In the third quarter of 2009, Sunoco Logistics Partners L.P. acquired Excel
Pipeline LLC, the owner of a crude oil pipeline which services Gary Williams’ Wynnewood, OK refinery and a
refined products terminal in Romulus, MI for a total of $50 million. In November 2008, the Partnership
purchased a refined products pipeline system, refined products terminal facilities and certain other related assets
located in Texas and Louisiana from affiliates of Exxon Mobil Corporation for $185 million. The purchase price
of these acquisitions has been included in properties, plants and equipment in the consolidated balance sheets
(except for $21 million allocated to a supply contract in deferred charges and other assets related to the crude oil
pipeline acquisition in 2009). No pro forma information has been presented since the acquisitions were not
material in relation to Sunoco’s consolidated results of operations.
Divestments
Discontinued Tulsa Refining Operations—In December 2008, Sunoco announced its intention to sell the
Tulsa refinery or convert it to a terminal by the end of 2009 because it did not expect to achieve an acceptable
return on investment on a capital project to comply with the new off-road diesel fuel requirements at this facility.
In connection with this decision, during 2008, Sunoco recorded a $160 million provision ($95 million after tax)
to write down the affected assets to their estimated fair values. This provision is reflected in the loss from
discontinued operations in the 2008 statement of operations. On June 1, 2009, Sunoco completed the sale of its
Tulsa refinery to Holly Corporation. The transaction also included the sale of inventory attributable to the
refinery which was valued at market prices at closing. Sunoco received a total of $157 million in cash proceeds
from this divestment, comprised of $64 million from the sale of the refinery and $93 million from the sale of the
related inventory.
As a result of the sale of the Tulsa refinery, such refinery has been classified as a discontinued operation for
all periods presented in the consolidated statements of operations and related footnotes. The following table
summarizes income (loss) from discontinued operations recognized during 2009, 2008 and 2007 (in millions of
dollars):
2009 2008 2007
Income (loss) before income tax expense (benefit) ................ $69 $(47) $167
Income tax expense (benefit) .................................. 28 (19) 68
Income (loss) from discontinued operations* ..................... $41 $(28) $ 99
*Attributable to Sunoco, Inc. shareholders.
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