Sunoco 2011 Annual Report Download - page 18

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approximately $200 million, increased the facility’s ultra-low-sulfur diesel fuel production capability by
45 thousand barrels per day by upgrading current production of 35 thousand barrels per day of temporary
compliance order diesel fuel (TCO) and 10 thousand barrels per day of heating oil.
Sunoco also carried out an alkylation process improvement project at its Philadelphia refinery’s HF
alkylation unit. The project involved the incorporation of ReVAP™ technology which required substantial
improvements and modifications to the alkylation unit and supporting utility systems. The project was completed
during 2010 at a cost of approximately $95 million.
Discontinued Chemicals Operations
In March 2010, Sunoco completed the sale of the common stock of its polypropylene chemicals business to
Braskem. The assets sold as part of this transaction included the polypropylene manufacturing facilities in
LaPorte, TX, Neal, WV, and Marcus Hook, PA, a propylene supply agreement and related inventory. Sunoco
recognized a net loss of $169 million ($44 million after tax) in the first quarter of 2010 related to the divestment.
Cash proceeds from this divestment of $348 million were received in the second quarter of 2010. In 2011,
Sunoco recognized a $4 million additional tax provision related to the sale.
In July 2011, Sunoco completed the sale of its phenol and acetone chemicals manufacturing facility in
Philadelphia, PA (“Frankford Facility”) and related inventory to an affiliate of Honeywell International Inc.
(“Honeywell”). In connection with this agreement, Sunoco recorded a $118 million provision ($70 million after
tax) to write down Frankford Facility assets to their estimated fair values during the second quarter of 2011.
Sunoco received total cash proceeds of $88 million in the third quarter of 2011 and recognized a $7 million gain
($4 million after tax) on the divestment. Sunoco is currently party to a cumene supply agreement with the
Frankford Facility which may be terminated, upon six months prior notice, effective on or after June 30, 2012.
Based on the Company’s decision to exit its refining business, Sunoco notified Honeywell in December 2011 that
it will terminate this agreement effective June 30, 2012.
In October 2011, Sunoco completed the sale of its phenol manufacturing facility in Haverhill, OH
(“Haverhill Facility”) and related inventory to an affiliate of Goradia Capital LLC. Sunoco received total cash
proceeds of $93 million and recognized a $6 million gain ($4 million after tax) on the divestment in the fourth
quarter of 2011. Sunoco recorded a $169 million provision ($101 million after tax) to write down Haverhill
Facility assets to their estimated fair values during the second quarter of 2011.
The charges incurred in connection with these facilities, which are reported as part of Asset Write-Downs
and Other Matters, and the gains (losses) on their divestments are reported separately in Corporate and Other in
the Earnings Profile of Sunoco Businesses.
As a result of these divestments, Sunoco’s chemicals operations have been classified as discontinued
operations for all periods presented in the Consolidated Financial Statements under Item 8.
Coke
SunCoke Energy owns and operates metallurgical coke plants located in Vansant, VA (Jewell), East
Chicago, IN (Indiana Harbor), Franklin Furnace, OH (Haverhill), Granite City, IL (Gateway) and Middletown,
OH (Middletown) and metallurgical coal mines located in Virginia and West Virginia. SunCoke Energy is also
the operator of a metallurgical coke plant in Vitória, Brazil (Vitória). On July 26, 2011, an initial public offering
of 13.34 million shares of SunCoke Energy common stock was completed at an offering price of $16 per share.
Sunoco maintained an 81-percent controlling financial interest in SunCoke Energy until its remaining shares
were distributed to Sunoco shareholders by means of a spin-off on January 17, 2012. The results of operations of
the Coke business will be classified as discontinued operations in the consolidated financial statements effective
with the distribution date.
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