Sunoco 2008 Annual Report Download - page 17

Honeywell International Inc. (“Honeywell”) with approximately 745 million pounds of phenol annually at a price
based on the market value of cumene feedstock plus an amount approximating other phenol production costs.
During January 2009, Sunoco decided that it will permanently shut down its Bayport, TX polypropylene
plant which has become uneconomic to operate and in 2008 also determined that the goodwill related to its
polypropylene business no longer had value. In connection therewith, the Company recorded a $54 million
after-tax provision to write down the affected Bayport assets to estimated fair value and to write off the
remaining polypropylene business goodwill. During 2007, Sunoco decided to permanently shut down a
previously idled phenol production line at its Haverhill, OH plant that had become uneconomic to restart. In
connection with this shutdown, the Company recorded an $8 million after-tax provision to write-off the affected
production line. During 2007, Sunoco also recorded a $7 million after-tax loss associated with the sale of its
Neville Island, PA terminal facility, which included an accrual for enhanced pension benefits associated with
employee terminations and for other required exit costs. These items are reported as part of the Asset Write-
Downs and Other Matters shown separately in Corporate and Other in the Earnings Profile of Sunoco Businesses.
The following table sets forth information concerning petrochemicals production by the Chemicals business
(in millions of pounds):
Capacity at
December 31, 2008
Production
2008 2007 2006
Phenol ....................................... 1,775 1,379 1,517 1,536
Acetone ...................................... 1,083 852 937 951
Bisphenol-A .................................. 240 219 223 202
Other Phenol Derivatives ........................ 120 62 74 79
Polypropylene ................................. 2,550 2,218 2,289 2,260
Cumene ...................................... —* —* 1,530 1,556
Propylene ..................................... —* —* 654 632
Total Production ............................. 5,768 4,730 7,224 7,216
Less: Production Used as Feedstocks** ............. 246 2,434 2,417
Total Production Available for Sale .............. 4,484 4,790 4,799
*Reflects the transfer of the Epsilon cumene and propylene splitter assets to Refining and Supply, effective January 1, 2008.
**Includes phenol and acetone (used in the manufacture of bisphenol-A). Prior to the transfer of the cumene and propylene splitter
assets, also included cumene (used in the manufacture of phenol and acetone) and polymer-grade propylene (used in the
manufacture of polypropylene).
Petrochemical products produced by the Chemicals business are distributed and sold on a worldwide basis
with most of the sales made to customers in the United States. The following table sets forth the sale of
petrochemicals to third parties by Chemicals (in millions of pounds):
2008 2007 2006
Phenol and Related Products (including Bisphenol-A) ................. 2,274 2,508 2,535
Polypropylene ................................................. 2,204 2,297 2,243
Other ........................................................ 65 80 88
4,543 4,885 4,866
The tables above reflect only volumes that were manufactured and sold directly by the Chemicals business.
Chemicals also manages the third-party chemicals sales for Refining and Supply and a joint venture with Suncor
Energy Inc., bringing the total petrochemicals sold under the Sunoco®name to approximately 6.6 billion pounds
in 2008.
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