Sunoco 2010 Annual Report Download - page 10

resources and management focus toward growing Sunoco’s retail marketing and logistics businesses. The sale is
expected to close in the first quarter of 2011. In the fourth quarter of 2009, Sunoco permanently shut down all
process units at its refinery in Westville, NJ (also known as Eagle Point) in response to weak demand and
increased global refining capacity. In addition, in the second quarter of 2009, Sunoco sold its refinery located in
Tulsa, OK that primarily produced lubricants (see “Refining and Supply” below).
Sunoco markets gasoline and middle distillates, and offers a broad range of convenience store merchandise
through a network of 4,921 retail outlets in 23 states primarily on the East Coast and in the Midwest United
States (see “Retail Marketing” below).
Sunoco owns, principally through Sunoco Logistics Partners L.P. (a master limited partnership) (the
“Partnership”), a geographically diverse and complementary group of pipelines and terminal facilities which
transport, terminal and store refined products and crude oil. Sunoco has a 31 percent interest in the Partnership,
which includes a 2 percent general partnership interest (see “Logistics” below).
Sunoco owns and operates facilities in Philadelphia, PA and Haverhill, OH, which produce phenol and
acetone. In March 2010, Sunoco sold its polypropylene chemicals business with facilities in LaPorte, TX, Neal,
WV and Marcus Hook, PA (see “Chemicals” below).
Sunoco, through SunCoke Energy, Inc. and its affiliates (individually and collectively, “SunCoke Energy”),
makes high-quality, blast-furnace coke at its facilities in Vansant, VA (Jewell), East Chicago, IN (Indiana
Harbor), Franklin Furnace, OH (Haverhill) and Granite City, IL (Gateway) and produces metallurgical coal from
mines in Virginia and West Virginia primarily for use at the Jewell cokemaking facility. SunCoke Energy is also
the operator and has an equity interest in a facility in Vitória, Brazil (Vitória). Construction is underway for a
cokemaking facility and associated cogeneration power plant to be built, owned and operated by Sunoco in
Middletown, OH, which is expected to be completed in the second half of 2011.
The following are separate discussions of Sunoco’s business segments.
Refining and Supply
The Refining and Supply business manufactures petroleum products, including gasoline, middle distillates
(mainly jet fuel, heating oil and diesel fuel) and residual fuel oil as well as commodity petrochemicals, including
refinery-grade propylene, benzene, cumene, toluene and xylene at its Marcus Hook, Philadelphia and Toledo
refineries. The Company sells these products to other Sunoco business units and to wholesale and industrial
customers.
In December 2010, Sunoco entered into an agreement to sell its Toledo refinery and related crude and
refined product inventories. The purchase price for the refinery is $400 million consisting of $200 million in cash
and a $200 million note due two years after closing. The purchase price of the inventory will be based upon
market prices near the time of closing. The purchase agreement also includes a participation payment of up to
$125 million based on the future profitability of the refinery. The transaction is subject to customary closing
conditions, and is expected to be completed in the first quarter of 2011. The sale of the refinery is expected to
permit the Company to direct resources and management focus toward growing Sunoco’s retail marketing and
logistics businesses. Sunoco does not expect a material impact on its 2011 net income as a result of the closing of
this transaction. At December 31, 2010, the Toledo refinery and its related assets have been classified as held for
sale in the consolidated balance sheet. The results of operations for the Toledo refinery have not been classified
as discontinued operations due to Sunoco’s expected continuing involvement with the Toledo refinery through a
three-year agreement for the purchase of gasoline and distillate to supply Sunoco retail sites in this area.
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