Sunoco Inc. (SUN, Financial) filed Quarterly Report for the period ended 2010-06-30.
Sunoco Inc. has a market cap of $4.52 billion; its shares were traded at around $37.51 with a P/E ratio of 42.1 and P/S ratio of 0.1. The dividend yield of Sunoco Inc. stocks is 1.6%. Sunoco Inc. had an annual average earning growth of 11.3% over the past 10 years.SUN is in the portfolios of Brian Rogers of T Rowe Price Equity Income Fund, David Tepper of APPALOOSA MANAGEMENT LP, Eric Mindich of Eton Park Capital Management, L.P., Eric Mindich of Eton Park Capital Management, L.P., Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC.
positive factors were the loss on sale of the discontinued polypropylene operations ($44 million), the absence of a net gain recognized in connection with the divestment of the discontinued Tulsa operations ($20 million), lower production of refined products ($49 million), lower average retail distillate margins ($16 million), lower results attributable to Sunocos Logistics business ($19 million), higher net financing expenses ($15 million) and a charge related to income tax matters ($9 million).
In December 2008, Sunoco announced its intention to sell the Tulsa refinery or convert it to a terminal by the end of 2009 because it did not expect to achieve an acceptable return on investment on a capital project to comply with the new off-road diesel fuel requirements at this facility. On June 1, 2009, Sunoco completed the sale of its Tulsa refinery to Holly Corporation. The transaction also included the sale of inventory attributable to the refinery which was valued at market prices at closing. Sunoco recognized a $41 million net after-tax gain on divestment of this business in 2009 ($20 million in the second quarter and $21 million in the fourth quarter), which is reported separately in Corporate and Other in the Earnings Profile of Sunoco Businesses. Sunoco received a total of $157 million in cash proceeds from this divestment, comprised of $64 million from the sale of the refinery and $93 million from the sale of the related inventory. Discontinued Tulsa refining operations had income of $3 million in the first half of 2009.
Corporate Expenses Corporate administrative expenses were $43 million after tax in the first half of 2010 versus $26 million after tax in the first half of 2009. The $17 million increase was primarily due to higher unfavorable income tax consolidation adjustments and higher accruals for performance-related incentive compensation. Corporate expenses included income tax adjustments amounting to $10 and $5 million in the first six months of 2010 and 2009, respectively.
Net Financing Expenses and Other Net financing expenses and other were $36 million after tax in the first half of 2010 versus $21 million after tax in the first six months of 2009. The $15 million increase was primarily due to higher interest expense ($6 million) and lower capitalized interest ($9 million). The increased interest expense was largely driven by new borrowings of Sunoco Logistics Partners L.P.
Asset Write-Downs and Other Matters During the first six months of 2010, Sunoco recorded a $20 million after-tax provision primarily related to contract losses in connection with excess barge capacity resulting from the shutdown of the Eagle Point refining operations and recorded a $20 million after-tax provision primarily for pension settlement losses and accruals for employee terminations and related costs in connection with the business improvement initiative. In the first six months of 2009, Sunoco recorded a $78 million after-tax provision for employee terminations and related costs in connection with the business improvement initiative, of which $48 million after tax was attributable to a noncash provision for pension and postretirement settlement and curtailment losses; recorded a $9 million after-tax provision to write down to estimated fair value certain assets primarily in the Refining and Supply business, including $3 million after tax attributable to discontinued Tulsa operations; and established a $4 million after-tax accrual for a take-or-pay contract loss, employee terminations and other exit costs in connection with the shutdown of the Bayport, TX polypropylene plant, which was part of the discontinued polypropylene operations (see Note 3 to the condensed consolidated financial statements).
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Sunoco Inc. has a market cap of $4.52 billion; its shares were traded at around $37.51 with a P/E ratio of 42.1 and P/S ratio of 0.1. The dividend yield of Sunoco Inc. stocks is 1.6%. Sunoco Inc. had an annual average earning growth of 11.3% over the past 10 years.SUN is in the portfolios of Brian Rogers of T Rowe Price Equity Income Fund, David Tepper of APPALOOSA MANAGEMENT LP, Eric Mindich of Eton Park Capital Management, L.P., Eric Mindich of Eton Park Capital Management, L.P., Bruce Kovner of Caxton Associates, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, George Soros of Soros Fund Management LLC.
Highlight of Business Operations:
The $125 million increase in results attributable to Sunoco, Inc. shareholders in the first half of 2010 was primarily due to higher margins from continuing operations in Sunocos Refining and Supply business ($66 million), higher average retail gasoline margins ($47 million), lower expenses ($86 million), higher income attributable to the Chemicals businesses ($33 million) and Sunocos Coke business ($11 million) and lower provision for asset write-downs and other matters from continuing operations ($44 million). Partially offsetting thesepositive factors were the loss on sale of the discontinued polypropylene operations ($44 million), the absence of a net gain recognized in connection with the divestment of the discontinued Tulsa operations ($20 million), lower production of refined products ($49 million), lower average retail distillate margins ($16 million), lower results attributable to Sunocos Logistics business ($19 million), higher net financing expenses ($15 million) and a charge related to income tax matters ($9 million).
In December 2008, Sunoco announced its intention to sell the Tulsa refinery or convert it to a terminal by the end of 2009 because it did not expect to achieve an acceptable return on investment on a capital project to comply with the new off-road diesel fuel requirements at this facility. On June 1, 2009, Sunoco completed the sale of its Tulsa refinery to Holly Corporation. The transaction also included the sale of inventory attributable to the refinery which was valued at market prices at closing. Sunoco recognized a $41 million net after-tax gain on divestment of this business in 2009 ($20 million in the second quarter and $21 million in the fourth quarter), which is reported separately in Corporate and Other in the Earnings Profile of Sunoco Businesses. Sunoco received a total of $157 million in cash proceeds from this divestment, comprised of $64 million from the sale of the refinery and $93 million from the sale of the related inventory. Discontinued Tulsa refining operations had income of $3 million in the first half of 2009.
Corporate Expenses Corporate administrative expenses were $43 million after tax in the first half of 2010 versus $26 million after tax in the first half of 2009. The $17 million increase was primarily due to higher unfavorable income tax consolidation adjustments and higher accruals for performance-related incentive compensation. Corporate expenses included income tax adjustments amounting to $10 and $5 million in the first six months of 2010 and 2009, respectively.
Net Financing Expenses and Other Net financing expenses and other were $36 million after tax in the first half of 2010 versus $21 million after tax in the first six months of 2009. The $15 million increase was primarily due to higher interest expense ($6 million) and lower capitalized interest ($9 million). The increased interest expense was largely driven by new borrowings of Sunoco Logistics Partners L.P.
Asset Write-Downs and Other Matters During the first six months of 2010, Sunoco recorded a $20 million after-tax provision primarily related to contract losses in connection with excess barge capacity resulting from the shutdown of the Eagle Point refining operations and recorded a $20 million after-tax provision primarily for pension settlement losses and accruals for employee terminations and related costs in connection with the business improvement initiative. In the first six months of 2009, Sunoco recorded a $78 million after-tax provision for employee terminations and related costs in connection with the business improvement initiative, of which $48 million after tax was attributable to a noncash provision for pension and postretirement settlement and curtailment losses; recorded a $9 million after-tax provision to write down to estimated fair value certain assets primarily in the Refining and Supply business, including $3 million after tax attributable to discontinued Tulsa operations; and established a $4 million after-tax accrual for a take-or-pay contract loss, employee terminations and other exit costs in connection with the shutdown of the Bayport, TX polypropylene plant, which was part of the discontinued polypropylene operations (see Note 3 to the condensed consolidated financial statements).
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