Sunoco 2010 Annual Report Download - page 90
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The following table sets forth the changes in unrecognized tax benefits (in millions of dollars):
2010 2009 2008
Balance at beginning of year ................................... $20 $45 $69
Additions (reductions) attributable to tax positions taken in
the current year ............................................ 5 — (17)
Additions attributable to tax positions taken in prior years ............ — — 7
Reductions attributable to tax positions taken in prior years .......... (5) (3) (10)
Settlements ................................................. — (22) (4)
Balance at end of year ........................................ $20* $20 $45
*Includes $13 million ($8 million after federal income tax benefits) related to tax positions which, if recognized, would impact the
Company’s effective tax rate.
Accruals for interest and penalties totaled $9 and $11 million at December 31, 2010 and 2009, respectively.
The Company’s federal income tax returns have been examined by the Internal Revenue Service for all
years through 2006. It is reasonably possible that a federal examination for the 2007 and 2008 tax years will be
completed within the next twelve months. The Company believes that appropriate accruals have been recorded
for any potential adjustments. State and other income tax returns are generally subject to examination for a period
of three to five years after the filing of the respective returns. The state impact of any amended federal returns
remains subject to examination by various states for a period of up to one year after formal notification of such
amendments to the states. The Company and its subsidiaries have various state and other income tax returns in
the process of examination or administrative appeal. Among the issues applicable to those tax years which are
under examination is the deductibility of certain intercompany expenses that were claimed in the returns as filed
and whether certain Sunoco entities have economic nexus in various jurisdictions. The Company does not expect
that any unrecognized tax benefits pertaining to income tax matters will significantly increase or decrease in the
next twelve months.
5. Earnings Per Share Data
The following table sets forth the reconciliation of the weighted-average number of common shares used to
compute basic earnings per share (“EPS”) to those used to compute diluted EPS (in millions):
2010 2009* 2008
Weighted-average number of common shares
outstanding—basic ..................................... 120.1 116.9 117.0
Add effect of dilutive stock incentive awards ................... .2 — .1
Weighted-average number of shares—diluted .............. 120.3 116.9 117.1
*Since the assumed issuance of common stock under stock incentive awards would not have been dilutive, the weighted-average
number of shares used to compute diluted EPS is equal to the weighted-average number of shares used in the basic EPS
computation.
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