Sunoco 2008 Annual Report Download - page 42

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Results of Operations
Earnings Profile of Sunoco Businesses (millions of dollars after tax)
2008 2007 2006
Refining and Supply ...................................... $515 $772 $881
Retail Marketing .......................................... 201 69 76
Chemicals ............................................... 36 26 43
Logistics ................................................ 85 45 36
Coke ................................................... 105 29 50
Corporate and Other:
Corporate expenses .................................... (46) (67) (58)
Net financing expenses and other ......................... (22) (41) (49)
Asset write-downs and other matters ....................... (138) (32) —
Income tax matters ..................................... 26 — —
Issuance of Sunoco Logistics Partners L.P. limited
partnership units ...................................... 14 90 —
Consolidated net income ............................. $776 $891 $979
Analysis of Earnings Profile of Sunoco Businesses
In 2008, Sunoco earned $776 million, or $6.63 per share of common stock on a diluted basis, compared to
$891 million, or $7.43 per share, in 2007 and $979 million, or $7.59 per share, in 2006.
The $115 million decrease in net income in 2008 was primarily due to higher provisions for asset write-
down and other matters ($102 million), lower gains related to the prior issuance of Sunoco Logistics Partners
L.P. limited partnership units ($76 million), higher expenses ($124 million), lower production of refined products
($85 million), lower refined product margins ($21 million), lower gains on asset divestments ($18 million) and
lower gasoline and distillate sales volumes ($22 million). Partially offsetting these negative factors were higher
average retail gasoline and distillate margins ($178 million); higher income attributable to Sunoco’s Coke ($76
million), Logistics ($40 million) and Chemicals ($10 million) businesses; lower net financing expenses ($19
million); and gains recognized in 2008 related to certain income tax matters ($26 million).
The $88 million decrease in net income in 2007 was primarily due to higher expenses ($116 million), a
provision for asset write-downs and other matters recognized in 2007 ($32 million), lower margins in Sunoco’s
Refining and Supply ($44 million) and Retail Marketing ($12 million) businesses and lower income attributable
to the Coke business ($21 million) primarily due to lower tax benefits. Partially offsetting these negative factors
were the gain related to the prior issuance of Sunoco Logistics Partners L.P. limited partnership units ($90
million), higher gains on asset divestments ($11 million), higher earnings from the Logistics business ($9
million), lower net financing expenses ($8 million) and a lower effective income tax rate ($14 million).
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