Sunoco 2011 Annual Report Download - page 54

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value certain other assets primarily in the Refining and Supply business; established $16 million of accruals ($7
million after tax) for costs associated with MTBE litigation; and recognized a $9 million net curtailment gain ($5
million after tax) related to a freeze of pension benefits for most participants in the Company’s defined benefit
pension plans and a phasedown or elimination of postretirement medical benefits effective June 30, 2010 (see
Notes 2, 9 and 13 to the Consolidated Financial Statements under Item 8).
Asset Write-Downs and Other Matters—Discontinued Operations—In 2011, Sunoco recorded a $287
million provision ($171 million after tax) to write down assets at the discontinued Frankford and Haverhill
chemicals facilities to their estimated fair values and 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 Company’s
discontinued Tulsa refining operations. In 2009, Sunoco recorded a $6 million provision ($3 million after tax) to
write down to estimated fair value certain assets at the Company’s discontinued Tulsa refining operations and
established $6 million of accruals ($4 million after tax) related to the shutdown of the discontinued chemicals
polypropylene plant in Bayport, TX (see Note 2 to the Consolidated Financial Statements under Item 8).
Sale of Toledo Refinery—During 2011, Sunoco recognized a $2 million net pretax gain ($4 million loss
after tax) related to the divestment of its Toledo refinery and related inventory (see Note 2 to the Consolidated
Financial Statements under Item 8).
Sale of Discontinued Chemicals Operations—During 2011, Sunoco recognized gains of $7 and $6 million,
respectively, ($4 and $4 million, respectively, after tax) related to the divestments of the discontinued Frankford
and Haverhill chemicals facilities. In 2010, Sunoco recognized a $169 million loss ($44 million after tax) related
to the divestment of the discontinued polypropylene operations. In 2011, Sunoco recognized a $4 million
additional tax provision related to the sale (see Note 2 to the Consolidated Financial Statements under Item 8).
LIFO Inventory Profits—During 2011, Sunoco recognized gains of $63 million ($38 million after tax)
resulting from the reduction of crude oil and refined product inventories at the Toledo refinery prior to its
divestment and the liquidation of a portion of refined product inventories related to the idling of the Marcus
Hook refinery. During 2010 and 2009, Sunoco recognized gains of $168 and $92 million, respectively, ($100 and
$55 million, respectively, after tax) from the liquidation of crude oil and refined product inventories largely
attributable to the permanent shutdown of the Eagle Point Refinery in 2009 (see Notes 2 and 6 to the
Consolidated Financial Statements under Item 8).
Gain on Remeasurement of Pipeline Equity Interests—During 2011 and 2010, Sunoco recognized gains
attributable to Sunoco shareholders of $9 and $59 million, respectively, ($6 and $37 million, respectively, after
tax) from the remeasurement of its pre-acquisition equity interests to fair value upon consolidation (see Note 2 to
the Consolidated Financial Statements under Item 8).
Sale of Retail Heating Oil and Propane Distribution Business—During 2009, Sunoco recognized a $44
million net gain ($26 million after tax) on the divestment of the retail heating oil and propane distribution
business (see Note 2 to the Consolidated Financial Statements under Item 8).
Sale of Discontinued Tulsa Operations—During 2009, Sunoco recognized a $70 million net gain ($41
million after tax) related to the divestment of the discontinued Tulsa operations (see Note 2 to the Consolidated
Financial Statements under Item 8).
Income Taxes—The income tax benefit was $1,166 million in 2011 compared to income tax expense of $18
million in 2010 and an income tax benefit of $332 million in 2009. The increase in the tax benefits in 2011 was
primarily attributable to reductions in the income before discrete items and tax benefits on provisions for asset
write-downs. The increase in income tax expense in 2010 was largely driven by the increase in pretax income
primarily attributable to the improvement in results from the Refining and Supply segment, lower provisions for
asset write-downs and higher LIFO inventory gains.
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