Sunoco 2009 Annual Report Download - page 52

to Chemicals’ polypropylene business; and recorded an $11 million after-tax gain on an insurance recovery
related to an MTBE litigation settlement. In 2007, Sunoco recorded an $8 million after-tax provision to write off
a previously idled phenol line at Chemicals’ Haverhill, OH plant which was permanently shutdown; recorded a
$7 million after-tax loss related to the sale of the Chemicals’ Neville Island terminal facility; and recorded a $17
million after-tax accrual related to the settlement of certain MTBE litigation. (See Notes 2 and 14 to the
Consolidated Financial Statements under Item 8.)
Eagle Point LIFO Inventory Profits—During 2009, Sunoco recognized a $55 million after-tax gain from
the liquidation of refined product inventories in connection with the permanent shutdown of the Eagle Point
refinery.
Sale of Discontinued Tulsa Operations—During 2009, Sunoco recognized a $41 million net after-tax
gain related to the divestment of the discontinued Tulsa operations (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 $26
million net after-tax gain on divestment of the retail heating oil and propane distribution business (see Note 2 to
the Consolidated Financial Statements under Item 8).
Income Tax Matters—During 2008, Sunoco recognized a $16 million after-tax gain related primarily to
tax credits claimed on amended federal income tax returns filed for certain prior years and a $10 million after-tax
gain related to the settlement of economic nexus issues pertaining to certain prior-year state corporate income tax
returns (see Note 4 to the Consolidated Financial Statements under Item 8).
Issuance of Sunoco Logistics Partners L.P. Limited Partnership Units—During 2008 and 2007,
Sunoco recognized after-tax gains totaling $14 and $90 million, respectively, related to the prior issuance of
limited partnership units of the Partnership to the public. (See Note 15 to the Consolidated Financial Statements
under Item 8.)
Analysis of Consolidated Statements of Operations
Revenues—Total revenues were $31.31 billion in 2009, $51.08 billion in 2008 and $42.57 billion in 2007.
The 39 percent decrease in 2009 was primarily due to lower refined product prices and sales volumes. Also
contributing to the decline were lower crude oil prices in connection with the crude oil gathering and marketing
activities of the Company’s Logistics operations. In 2008, the 20 percent increase was primarily due to higher
refined product prices as well as higher crude oil prices in connection with the crude oil gathering and marketing
activities of the Company’s Logistics operations. Partially offsetting these positive factors were lower refined
product sales volumes.
Costs and Expenses—Total pretax costs and expenses were $31.91 billion in 2009, $49.74 billion in 2008
and $41.26 billion in 2007. The 36 percent decrease in 2009 was primarily due to lower crude oil and refined
product acquisition costs resulting from price declines and lower crude oil throughputs. Also contributing to the
decline were lower crude oil costs in connection with the crude oil gathering and marketing activities of the
Company’s Logistics operations. In 2008, the 21 percent increase was primarily due to higher crude oil and
refined product acquisition costs resulting largely from price increases and higher crude oil costs in connection
with the crude oil gathering and marketing activities of the Company’s Logistics operations.
Financial Condition
Capital Resources and Liquidity
Cash and Working Capital—At December 31, 2009, Sunoco had cash and cash equivalents of $377
million compared to $240 million at December 31, 2008 and $648 million at December 31, 2007 and had a
working capital deficit of $654 million compared to $1,102 million at December 31, 2008 and $1,002 million at
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