Sunoco 2011 Annual Report Download - page 51

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In June 2009, Sunoco acquired a 100 million gallon-per-year ethanol manufacturing facility in New York
from Northeast Biofuels, LP for $9 million. After completion of start-up capital expenditures of $26 million, the
plant successfully began operations in June 2010.
Refining and Supply—Discontinued Tulsa Operations
In June 2009, Sunoco completed the sale of its Tulsa refinery to Holly Corporation and, as a result, the
Tulsa refinery has been classified as a discontinued operation for all periods presented in the consolidated
financial statements herein (see Note 2 to the Consolidated Financial Statements under Item 8). 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 the divestment which is reported separately in Corporate and Other in
the Earnings Profile of Sunoco Businesses. Sunoco had previously recognized a $160 million provision ($95
million after tax) to write down the refinery and related assets in 2008 in connection with its decision to sell the
refinery or convert it to a terminal.
In 2011, Sunoco recorded an $18 million gain ($11 million after tax) attributable to a partial settlement of a
retained low sulfur diesel credit liability related to the discontinued Tulsa refining operations. This charge is
included in Asset Write-Downs and Other Matters in Corporate and Other in the Earnings Profile of Sunoco
Businesses.
In 2009, discontinued Tulsa refining operations had pretax earnings of $5 million prior to its sale on June 1.
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.
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