Sunoco Inc. (SUN, Financial) filed Quarterly Report for the period ended 2010-03-31.
Sunoco Inc. has a market cap of $3.82 billion; its shares were traded at around $31.68 with and P/S ratio of 0.1. The dividend yield of Sunoco Inc. stocks is 1.8%. 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, Michael Price of MFP Investors LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Bruce Kovner of Caxton Associates, Richard Aster Jr of Meridian Fund.
Corporate Expenses Corporate administrative expenses were $23 million after tax in the first quarter of 2010 versus $11 million after tax in the first quarter of 2009. The $12 million increase in expense was primarily due to $8 million of unfavorable income tax adjustments in 2010 and higher accruals for performance-related incentive compensation. The income tax adjustments include a $4 million reduction to Sunocos manufacturers deduction as a result of the carryback of the Companys 2009 net operating loss to prior years.
Net Financing Expenses and Other Net financing expenses and other were $17 million after tax in the first quarter of 2010 versus $10 million after tax in the first quarter of 2009. The $7 million increase was primarily due to higher interest expense ($2 million) and lower capitalized interest ($4 million). The increased interest expense was largely driven by new borrowings of Sunoco Logistics Partners L.P.
At March 31, 2010, Sunoco had cash and cash equivalents of $812 million compared to $377 million at December 31, 2009 and had a working capital deficit of $99 million compared to a working capital deficit of $654 million at December 31, 2009. The $435 million increase in cash and cash equivalents was due to $501 million of net cash provided by operating activities (cash generation) and $87 million of net cash provided by financing activities, partially offset by a $153 million net use of cash in investing activities. Management believes that the current levels of cash and working capital are adequate to support Sunocos ongoing operations. Sunocos working capital position is considerably stronger than indicated because of the relatively low historical costs assigned under the LIFO method of accounting for most of the inventories reflected in the condensed consolidated balance sheets. The current replacement cost of all such inventories exceeded their carrying value at March 31, 2010 by $2,788 million. Inventories valued at LIFO, which consist of crude oil as well as petroleum and chemical products, are readily marketable at their current replacement values. The Company received a federal income tax refund of $394 million in March 2010 for the carryback of its 2009 net operating loss.
The Company has a $1.3 billion revolving credit facility with a syndicate of 19 participating banks (the Facility), of which $1.2245 billion matures in August 2012 with the balance to mature in August 2011. The Facility provides the Company with access to short-term financing and is intended to support the issuance of commercial paper, letters of credit and other debt. The Company also can borrow directly from the participating banks under the Facility. The Facility is subject to commitment fees, which are not material. Under the terms of the Facility, Sunoco is required to maintain tangible net worth (as defined in the Facility) in an amount greater than or equal to targeted tangible net worth (targeted tangible net worth being determined by adding $1.125 billion and 50 percent of the excess of net income attributable to Sunoco, Inc. shareholders over share repurchases (as defined in the Facility) for each quarter ended after March 31, 2004). At March 31, 2010, the Companys tangible net worth was $3.0 billion and its targeted tangible net worth was $2.1 billion. The Facility also requires that Sunocos ratio of consolidated net indebtedness, including borrowings of Sunoco Logistics Partners L.P., to consolidated capitalization (as those terms are defined in the Facility) not exceed .60 to 1. At March 31, 2010, this ratio was .34 to 1. At March 31, 2010, the Facility was being used to support $115 million of floating-rate notes due in 2034. The Company remarkets the floating-rate notes
Sunoco Logistics Partners L.P. has a $400 million revolving credit facility with a syndicate of 11 participating banks, which expires in November 2012. This facility is available to fund the Partnerships working capital requirements, to finance acquisitions, and for general partnership purposes. Amounts outstanding under this facility totaled $12 and $238 million at March 31, 2010 and December 31, 2009, respectively. In March 2009, the Partnership entered into an additional $63 million revolving credit facility with two participating banks, which expires in September 2011. At March 31, 2010, there was $31 million outstanding under this facility. The $400 million facility contains a covenant requiring the Partnership to maintain a ratio not to exceed 4.75 to 1 of its consolidated total debt (including letters of credit) to its consolidated EBITDA (each as defined in the facility). The $63 million facility contains a similar covenant, which was amended in April 2010. The ratio in this covenant may not exceed 4.5 to 1, up from 4 to 1. At March 31, 2010, the Partnerships ratio of its consolidated debt to its consolidated EBITDA was 3.5 to 1.
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Sunoco Inc. has a market cap of $3.82 billion; its shares were traded at around $31.68 with and P/S ratio of 0.1. The dividend yield of Sunoco Inc. stocks is 1.8%. 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, Michael Price of MFP Investors LLC, Steven Cohen of SAC Capital Advisors, Jeremy Grantham of GMO LLC, Bruce Kovner of Caxton Associates, Richard Aster Jr of Meridian Fund.
Highlight of Business Operations:
lower production of refined products ($20 million), lower average retail distillate margins ($14 million), lower results attributable to Sunocos Logistics business ($13 million) and a charge related to income tax matters ($9 million). Partially offsetting these negative factors were lower expenses ($47 million), higher results attributable to Sunocos Coke business ($12 million), increased income from continuing operations in the Chemicals business ($15 million), lower provisions for asset write-downs and other matters ($20 million) and higher average retail gasoline margins ($17 million).Corporate Expenses Corporate administrative expenses were $23 million after tax in the first quarter of 2010 versus $11 million after tax in the first quarter of 2009. The $12 million increase in expense was primarily due to $8 million of unfavorable income tax adjustments in 2010 and higher accruals for performance-related incentive compensation. The income tax adjustments include a $4 million reduction to Sunocos manufacturers deduction as a result of the carryback of the Companys 2009 net operating loss to prior years.
Net Financing Expenses and Other Net financing expenses and other were $17 million after tax in the first quarter of 2010 versus $10 million after tax in the first quarter of 2009. The $7 million increase was primarily due to higher interest expense ($2 million) and lower capitalized interest ($4 million). The increased interest expense was largely driven by new borrowings of Sunoco Logistics Partners L.P.
At March 31, 2010, Sunoco had cash and cash equivalents of $812 million compared to $377 million at December 31, 2009 and had a working capital deficit of $99 million compared to a working capital deficit of $654 million at December 31, 2009. The $435 million increase in cash and cash equivalents was due to $501 million of net cash provided by operating activities (cash generation) and $87 million of net cash provided by financing activities, partially offset by a $153 million net use of cash in investing activities. Management believes that the current levels of cash and working capital are adequate to support Sunocos ongoing operations. Sunocos working capital position is considerably stronger than indicated because of the relatively low historical costs assigned under the LIFO method of accounting for most of the inventories reflected in the condensed consolidated balance sheets. The current replacement cost of all such inventories exceeded their carrying value at March 31, 2010 by $2,788 million. Inventories valued at LIFO, which consist of crude oil as well as petroleum and chemical products, are readily marketable at their current replacement values. The Company received a federal income tax refund of $394 million in March 2010 for the carryback of its 2009 net operating loss.
The Company has a $1.3 billion revolving credit facility with a syndicate of 19 participating banks (the Facility), of which $1.2245 billion matures in August 2012 with the balance to mature in August 2011. The Facility provides the Company with access to short-term financing and is intended to support the issuance of commercial paper, letters of credit and other debt. The Company also can borrow directly from the participating banks under the Facility. The Facility is subject to commitment fees, which are not material. Under the terms of the Facility, Sunoco is required to maintain tangible net worth (as defined in the Facility) in an amount greater than or equal to targeted tangible net worth (targeted tangible net worth being determined by adding $1.125 billion and 50 percent of the excess of net income attributable to Sunoco, Inc. shareholders over share repurchases (as defined in the Facility) for each quarter ended after March 31, 2004). At March 31, 2010, the Companys tangible net worth was $3.0 billion and its targeted tangible net worth was $2.1 billion. The Facility also requires that Sunocos ratio of consolidated net indebtedness, including borrowings of Sunoco Logistics Partners L.P., to consolidated capitalization (as those terms are defined in the Facility) not exceed .60 to 1. At March 31, 2010, this ratio was .34 to 1. At March 31, 2010, the Facility was being used to support $115 million of floating-rate notes due in 2034. The Company remarkets the floating-rate notes
Sunoco Logistics Partners L.P. has a $400 million revolving credit facility with a syndicate of 11 participating banks, which expires in November 2012. This facility is available to fund the Partnerships working capital requirements, to finance acquisitions, and for general partnership purposes. Amounts outstanding under this facility totaled $12 and $238 million at March 31, 2010 and December 31, 2009, respectively. In March 2009, the Partnership entered into an additional $63 million revolving credit facility with two participating banks, which expires in September 2011. At March 31, 2010, there was $31 million outstanding under this facility. The $400 million facility contains a covenant requiring the Partnership to maintain a ratio not to exceed 4.75 to 1 of its consolidated total debt (including letters of credit) to its consolidated EBITDA (each as defined in the facility). The $63 million facility contains a similar covenant, which was amended in April 2010. The ratio in this covenant may not exceed 4.5 to 1, up from 4 to 1. At March 31, 2010, the Partnerships ratio of its consolidated debt to its consolidated EBITDA was 3.5 to 1.
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