Sunoco 2008 Annual Report Download - page 102

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The Chemicals segment manufactures phenol and related products at chemical plants in Philadelphia, PA
and Haverhill, OH; and polypropylene at facilities in LaPorte, TX, Neal, WV, Bayport, TX and Marcus Hook,
PA. This segment also distributes and markets these products. Sunoco intends to permanently shut down the
Bayport polypropylene facility no later than April 30, 2009 (Note 2).
The Logistics segment operates refined product and crude oil pipelines and terminals and conducts crude oil
acquisition and marketing activities primarily in the Northeast, Midwest and South Central regions of the United
States. In addition, the Logistics segment has ownership interests in several refined product and crude oil pipeline
joint ventures. Substantially all logistics operations are conducted through Sunoco Logistics Partners L.P. (Note
15).
The Coke segment makes high-quality, blast-furnace coke at facilities located in East Chicago, IN (Indiana
Harbor), Vansant, VA (Jewell) and Franklin Furnace, OH (Haverhill), and produces metallurgical coal from
mines in Virginia, primarily for use at the Jewell cokemaking facility. Substantially all of the coke sales during
the 2006-2008 period were made under long-term contracts with a major steel company. In addition, the Indiana
Harbor and Haverhill facilities generate energy in the form of heat, steam or electrical power. Sunoco is also the
operator of a cokemaking plant in Vitória, Brazil which commenced operations in 2007 (Note 7). An additional
cokemaking facility is currently under construction in Granite City, IL, which is expected to be completed in the
fourth quarter of 2009 and an agreement has been entered into for a cokemaking facility and associated
cogeneration power plant to be built, owned and operated by Sunoco in Middletown, OH, which is subject to
resolution of all contingencies, including necessary permits.
Income tax amounts give effect to the tax credits earned by each segment. Overhead expenses that can be
identified with a segment have been included as deductions in determining pretax and after-tax segment income.
The remainder are included in Corporate and Other. Also included in Corporate and Other are net financing
expenses and other, which consist principally of interest expense and debt and other financing expenses less
interest income and interest capitalized, and significant unusual and infrequently occurring items not allocated to
a segment for purposes of reporting to the chief operating decision maker. Net financing expenses also included
the preferential return of third-party investors in the Company’s cokemaking operations prior to the completion
of the preferential return period during the fourth quarter of 2007 (Notes 1 and 15). Intersegment revenues are
accounted for based on the prices negotiated by the segments which approximate market. Identifiable assets are
those assets that are utilized within a specific segment.
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