Sunoco 2010 Annual Report Download - page 49

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production of refined products ($80 million), lower operating results attributable to discontinued Tulsa refining
operations ($64 million), lower results from continuing operations in Sunoco’s Chemicals business ($36 million)
and higher net financing expenses ($28 million). Partially offsetting these negative factors were lower expenses
($261 million), higher income attributable to the Coke business ($75 million) which included the $41 million
investment tax credit attributable to the Gateway facility, LIFO inventory profits from the liquidation of refined
products in connection with the shutdown of the Eagle Point refinery ($55 million) and the gain on the sale of the
discontinued Tulsa refining operations ($41 million).
Refining and Supply—Continuing Operations
The Refining and Supply business manufactures petroleum products and commodity petrochemicals at its
Marcus Hook, Philadelphia and Toledo refineries and sells these products to other Sunoco businesses and to
wholesale and industrial customers. Sunoco expects to complete the previously announced sale of its Toledo
refinery in the first quarter of 2011 (see below). In the fourth quarter of 2009, Refining and Supply permanently
shut down all process units at the Eagle Point refinery in response to weak demand and increased global refining
capacity and, in the second quarter of 2009, sold its discontinued Tulsa refining operations. The financial and
operating data presented in the table below excludes amounts attributable to the Tulsa refinery.
2010 2009 2008
Income (loss) (millions of dollars) ................................... $(8) $(316) $448
Wholesale margin* (per barrel) ..................................... $5.04 $3.66 $8.60
Throughputs (thousands of barrels daily):
Crude oil ..................................................... 588.8 625.4 706.5
Other feedstocks ............................................... 56.4 70.8 84.8
Total throughputs ............................................ 645.2 696.2 791.3
Products manufactured (thousands of barrels daily):
Gasoline ..................................................... 337.0 357.9 382.9
Middle distillates ............................................... 230.6 225.3 285.4
Residual fuel .................................................. 34.6 59.2 56.4
Petrochemicals ................................................ 23.4 27.3 34.5
Other ........................................................ 48.5 54.7 64.4
Total production .............................................. 674.1 724.4 823.6
Less: Production used as fuel in refinery operations .................. 31.3 34.5 38.0
Total production available for sale ............................... 642.8 689.9 785.6
Crude unit capacity** (thousands of barrels daily) at December 31 ........ 675.0 675.0 825.0
Crude unit capacity utilized ........................................ 87% 78% 86%
Conversion capacity*** (thousands of barrels daily) at December 31 ...... 343.0 343.0 398.0
Conversion capacity utilized ....................................... 87% 79% 87%
*Wholesale sales revenue less related cost of crude oil, other feedstocks, product purchases and terminalling and transportation
divided by production available for sale.
**Reflects a 150 thousand barrels-per-day reduction in November 2009 attributable to the shutdown of the Eagle Point refinery.
***Represents capacity to upgrade lower-value, heavier petroleum products into higher-value, lighter products. Reflects a 55 thousand
barrels-per-day reduction in November 2009 attributable to the shutdown of the Eagle Point refinery.
Refining and Supply’s segment results from continuing operations improved $308 million in 2010 primarily
due to higher realized margins ($213 million) and lower expenses ($135 million), partially offset by lower
production volumes ($53 million). Lower expenses were largely the result of cost reductions related to ongoing
business improvement initiatives, the permanent shutdown of the Eagle Point refinery in the fourth quarter of
2009 and lower costs for purchased fuel and utilities. Production volumes were negatively affected by significant
planned turnaround activities at the Marcus Hook and Toledo refineries in the first quarter of 2010 and unplanned
maintenance in the fourth quarter of 2010.
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