Sunoco 2011 Annual Report Download - page 83

Download and view the complete annual report

Please find page 83 of the 2011 Sunoco annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 136

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131
  • 132
  • 133
  • 134
  • 135
  • 136

Divestments
Discontinued Operations
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 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 (see below), 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.
In March 2010, Sunoco completed the sale of the common stock of its polypropylene chemicals business to
Braskem S.A. (“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 on 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 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. In the third quarter of 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.
The following table summarizes income (loss) from discontinued operations recognized during 2011, 2010
and 2009 (in millions of dollars):
2011* 2010 2009
Income (loss) before income tax expense (benefit) .................... $(255) $(113) $ 64
Income tax expense (benefit) ..................................... (99) (96) 26
Income (loss) from discontinued operations** ....................... $(156) $ (17) $ 38
* Includes 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.
**Attributable to Sunoco, Inc. shareholders.
75