Sunoco 2011 Annual Report Download - page 15

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In March 2011, Sunoco completed the sale of its Toledo refinery and related crude and refined product
inventories to a wholly owned subsidiary of PBF Holding Company LLC. The Company received $1,037 million
in net proceeds. In addition, the purchase agreement also includes a participation payment of up to $125 million
based on the future profitability of the refinery. Sunoco has not recorded any amount related to the contingent
consideration in accordance with its accounting policy election on such amounts. The Company expects to
receive a significant portion of the $125 million participation payment in 2012 based on the Toledo refinery’s
2011 estimated operating results. In connection with this transaction, the Company recognized a $2 million net
pretax gain ($4 million loss after tax) during 2011. The net loss includes a pretax gain of $535 million
attributable to the sale of crude and refined product inventories and is reported separately in Corporate and Other
in the Earnings Profile of Sunoco Businesses. The results of operations for the Toledo refinery have not been
classified as discontinued operations due to Sunoco’s expected continuing involvement with the Toledo refinery
through a three-year agreement for the purchase of gasoline and distillate to supply Sunoco retail sites in this
area.
In 2009, Sunoco permanently shut down all process units at the Eagle Point refinery. All units ceased
production in early November 2009 and in connection with this decision, Sunoco recorded a $476 million
provision ($284 million after tax) to write down the affected assets to their estimated fair values and to establish
accruals for employee terminations, pension and postretirement curtailment losses and other related costs. The
Company recorded additional provisions of $57 and $5 million ($34 and $3 million after tax) in 2010 and 2011,
respectively, primarily for additional asset write-downs and contract losses in connection with excess barge
capacity resulting from the shutdown of the Eagle Point refining operations. These charges 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.
In June 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. Sunoco recognized a $70 million net pretax
gain ($41 million after tax) on divestment of this business which is reported separately in Corporate and Other in
the Earnings Profile of Sunoco Businesses. As a result of the sale, the Tulsa refinery has been classified as a
discontinued operation for all periods presented in the Consolidated Financial Statements included in Item 8.
Sunoco had previously recognized a $160 million provision ($95 million after tax) for the write-down of the
refinery and related assets in 2008 in connection with its decision to sell the refinery or convert it to a terminal.
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