EX-99.1 2 dex991.htm PRESS RELEASE DATED AUGUST 1, 2007 Press Release dated August 1, 2007

Exhibit 99.1

 

LOGO    News Release

Sunoco, Inc.

1735 Market Street

Philadelphia, Pa. 19103-7583

 

For further information contact    For release: IMMEDIATELY

Jerry Davis (media) 215-977-6298

  

Tom Harr (investors) 215-977-6764

  

No. 17-07

SUNOCO REPORTS SECOND QUARTER 2007 RESULTS

PHILADELPHIA, August 1, 2007 — Sunoco, Inc. (NYSE: SUN) today reported net income of $509 million ($4.20 per share diluted) for the second quarter of 2007 versus $426 million ($3.22 per share diluted) for the second quarter of 2006. For the first half of 2007, Sunoco reported net income of $684 million ($5.63 per share diluted) versus $505 million ($3.80 per share diluted) in the first half of 2006. Excluding special items, 2007 first half income was $594 million ($4.89 per share diluted). There were no special items in the second quarter of 2007 or the first half of 2006.

“The record quarterly result was largely driven by earnings of $482 million in Refining and Supply,” said John G. Drosdick, Sunoco Chairman and Chief Executive Officer. “Lower-than-normal refined product inventories and continued healthy demand led to very strong realized margins in both the Northeast and MidContinent systems. Non-refining business unit earnings totaled $59 million in the second quarter, with the largest contribution coming from Retail Marketing as retail gasoline margins improved in the latter half of the quarter.”

Commenting on the progress of the Refining and Supply capital program in the first half, Drosdick said, “After completing project work, the newly-expanded and modified Philadelphia fluid catalytic cracking unit was restarted in mid-April and contributed approximately $15 million of additional net income during the May/June trial and phase-in period. In the MidContinent system, final tie-in work on the Toledo refinery crude unit debottleneck project was completed in early July while the Tulsa refinery also returned to full operation after being down in June for planned maintenance.

 

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SUNOCO 2Q07 EARNINGS, PAGE 2

“The completion of these major capital projects has significantly enhanced the earnings power of our refining assets. We are currently operating at full production levels and have no further significant maintenance activity planned for the remainder of the year.

“We also continued to execute our long-standing share reduction program in the second quarter, repurchasing 1.2 million shares for approximately $100 million. In the last twelve months, Sunoco has reduced its net shares outstanding by 8 percent. The remaining share repurchase authorization is currently $849 million and we continue to view this as an integral part of our strategy to enhance shareholder value.”

DETAILS OF SECOND QUARTER RESULTS

REFINING AND SUPPLY

Refining and Supply earned $482 million in the second quarter of 2007 versus $409 million in the second quarter of 2006. The increase in earnings was due to higher realized margins, particularly in the MidContinent, partially offset by lower production volumes and higher expenses. The lower volumes were mainly the result of work early in the quarter to complete the expansion and modification of a fluid catalytic cracking unit at the Philadelphia refinery as well as turnaround work at the Tulsa refinery in June. The work at the Philadelphia refinery reduced second quarter 2007 production by approximately 1.5 million barrels, while the turnaround at the Tulsa refinery negatively impacted second quarter production by approximately 2.3 million barrels. The higher expenses were largely the result of costs associated with the turnaround and expansion work and increased operating costs to produce low-sulfur fuels.

RETAIL MARKETING

Retail Marketing earned $30 million in the second quarter of 2007 versus $10 million in the second quarter of 2006. The increase in earnings was primarily due to higher average retail gasoline margins and $12 million of after-tax divestment gains attributable to the Retail Portfolio Management program. Monthly gasoline and diesel throughput per company-owned or leased outlet increased approximately six percent versus the second quarter of 2006.

CHEMICALS

Chemicals earned $6 million in the second quarter of 2007 versus $8 million in the prior-year period. Slightly higher margins were offset by higher expenses and the absence of a $4 million deferred tax benefit recognized in the second quarter of 2006 as a result of a state tax law change.

 

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SUNOCO 2Q07 EARNINGS, PAGE 3

 

LOGISTICS

Earnings for the Logistics segment were $10 million in the second quarter of 2007 versus $12 million in the second quarter of 2006. The decrease was largely due to lower crude oil acquisition and marketing results, partially offset by higher earnings from terminalling operations.

COKE

The Coke business earned $13 million in the second quarter of 2007 versus $10 million in the second quarter of 2006. The increase in earnings was due primarily to higher tax benefits from domestic cokemaking operations. Also contributing to the increase was income from the 1.7 million tons-per-year cokemaking facility in Vitória, Brazil, which commenced start-up of operations in the first quarter of 2007. Full production is expected to occur in the third quarter of 2007.

CORPORATE AND OTHER

Corporate administrative expenses were $18 million after tax in the second quarter of 2007 versus $11 million in the second quarter of 2006. The increase was primarily due to higher expenses for performance-related incentive compensation.

Net financing expenses were $14 million after tax in the second quarter of 2007 versus $12 million after tax in the second quarter of 2006. Lower interest income was partially offset by lower expenses attributable to the preferential return of third-party investors in Sunoco’s cokemaking operations.

SIX MONTH RESULTS

Sunoco earned $684 million, or $5.63 per share of common stock on a diluted basis, for the first six months of 2007 versus $505 million, or $3.80 per share, in the comparable 2006 period. The increase was primarily due to higher margins for wholesale fuel and retail gasoline and a gain related to the prior issuance of Sunoco Logistics Partners L.P. (NYSE: SXL) limited partnership units. Partially offsetting these positive factors were lower refined product volumes and higher expenses.

SPECIAL ITEM

During the first quarter of 2007, Sunoco recognized a $90 million after-tax gain related to the prior issuance of limited partnership units of Sunoco Logistics Partners L.P. to the public. Sunoco currently has a 43 percent interest in Sunoco Logistics Partners L.P., which includes its 2 percent general partnership interest.

 

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Sunoco, Inc., headquartered in Philadelphia, PA, is a leading manufacturer and marketer of petroleum and petrochemical products. With 900,000 barrels per day of refining capacity, nearly 4,700 retail sites selling gasoline and convenience items, approximately 5,500 miles of crude oil and refined product owned and operated pipelines and 38 product terminals, Sunoco is one of the largest independent refiner-marketers in the United States. Sunoco is a significant manufacturer of petrochemicals with annual sales of approximately five billion pounds, largely chemical intermediates used to make fibers, plastics, film and resins. Utilizing a unique, patented technology, Sunoco’s cokemaking facilities in the United States also have the capacity to manufacture over 2.5 million tons annually of high-quality metallurgical-grade coke for use in the steel industry.

Anyone interested in obtaining further insights into the second quarter’s results can monitor the Company’s quarterly teleconference call, which is scheduled for 3:00 p.m. ET on August 2, 2007. It can be accessed through Sunoco’s Web site—www.SunocoInc.com. It is suggested that you visit the site prior to the teleconference to ensure that you have downloaded any necessary software.

Those statements made in this release that are not historical facts are forward-looking statements intended to be covered by the safe harbor provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. Although Sunoco believes that the assumptions underlying these statements are reasonable, investors are cautioned that such forward-looking statements are inherently uncertain and necessarily involve risks that may affect Sunoco’s business prospects and performance, causing actual results to differ materially from those discussed in this release. Such risks and uncertainties include, by way of example and not of limitation: general economic, financial and business conditions which could affect Sunoco’s financial condition and results of operations; changes in competition and competitive practices, including the impact of foreign imports; effects of weather conditions and natural disasters on the Company’s operating facilities and on product supply and demand; changes in refining, marketing and chemical margins; variation in petroleum-based commodity prices and availability of crude oil and feedstock supply or transportation; effects of transportation disruptions; changes in the price differentials between light-sweet and heavy-sour crude oils; changes in the marketplace which may affect supply and demand for Sunoco’s products; changes in the level of capital expenditures or operating expenses; changes in product specifications; availability and pricing of ethanol; changes in the expected level of environmental capital, operating or remediation expenditures; age of, and changes in the reliability, efficiency and capacity of, the Company’s operating facilities or those of third parties; effects of adverse events relating to the operation of the Company’s facilities and to the transportation and storage of hazardous materials (including equipment malfunction, explosions, fires, spills, and the effects of severe weather conditions); risks related to labor relations and workplace safety; changes in, or new, statutes and government regulations or their interpretations, including those relating to the environment and global warming; changes in tax laws or their interpretations, including pension funding requirements; ability to

 

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identify acquisitions, execute them under favorable terms and integrate them into the Company’s existing businesses; ability to enter into joint ventures and other similar arrangements under favorable terms; delays and/or costs related to construction, improvements and/or repairs of facilities (including shortages of skilled labor, the issuance of applicable permits and inflation); nonperformance or force majeure by, or disputes with, major customers, suppliers, dealers, distributors or other business partners; changes in financial markets impacting pension expense and funding requirements; political and economic conditions in the markets in which the Company, its suppliers or customers operate, including the impact of potential terrorist acts and international hostilities; military conflicts between, or internal instability in, one or more oil producing countries, governmental actions and other disruptions in the ability to obtain crude oil; and changes in the status of, or initiation of new, litigation, arbitration or other proceedings to which the Company is a party or liability resulting from such litigation, arbitration or other proceedings, including natural resource damage claims. These and other applicable risks and uncertainties have been described more fully in Sunoco’s First Quarter 2007 Form 10-Q filed with the Securities and Exchange Commission on May 3, 2007 and in other periodic reports filed with the Securities and Exchange Commission. Sunoco undertakes no obligation to update any forward-looking statements in this release, whether as a result of new information or future events.

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Sunoco, Inc.

2007 Second Quarter and Six-Month Financial Summary

(Unaudited)

 

     2007    2006

Second Quarter

     

Revenues

   $ 10,764,000,000    $ 10,590,000,000

Net Income

   $ 509,000,000    $ 426,000,000

Earnings Per Share of Common Stock:

     

Basic

   $ 4.21    $ 3.24

Diluted

   $ 4.20    $ 3.22

Weighted-Average Number of Shares

Outstanding (In Millions):

     

Basic

     120.9      131.5

Diluted

     121.2      132.2

Six Months

     

Revenues

   $ 20,069,000,000    $ 19,183,000,000

Net Income

   $ 684,000,000    $ 505,000,000

Earnings Per Share of Common Stock:

     

Basic

   $ 5.65    $ 3.82

Diluted

   $ 5.63    $ 3.80

Weighted-Average Number of Shares

Outstanding (In Millions):

     

Basic

     121.1      132.2

Diluted

     121.4      132.9

 

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Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

    

Three Months

Ended

June 30

       
     2007     2006     Variance  

Refining and Supply

   $ 482     $ 409     $ 73  

Retail Marketing

     30       10       20  

Chemicals

     6       8       (2 )

Logistics

     10       12       (2 )

Coke

     13       10       3  

Corporate and Other:

      

Corporate expenses

     (18 )     (11 )     (7 )

Net financing expenses and other

     (14 )     (12 )     (2 )
                        
     509       426       83  

Special items

     —         —         —    
                        

Consolidated net income

   $ 509     $ 426     $ 83  
                        

Earnings per share of common stock (diluted):

      

Income before special items

   $ 4.20     $ 3.22     $ .98  

Special items

     —         —         —    
                        

Net income

   $ 4.20     $ 3.22     $ .98  
                        

 

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Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

    

Six Months

Ended

June 30

       
     2007     2006     Variance  

Refining and Supply

   $ 558     $ 482     $ 76  

Retail Marketing

     37       10       27  

Chemicals

     15       22       (7 )

Logistics

     19       18       1  

Coke

     24       24       —    

Corporate and Other:

      

Corporate expenses

     (33 )     (27 )     (6 )

Net financing expenses and other

     (26 )     (24 )     (2 )
                        
     594       505       89  

Special items

     90       —         90  
                        

Consolidated net income

   $ 684     $ 505     $ 179  
                        

Earnings per share of common stock (diluted):

      

Income before special items

   $ 4.89     $ 3.80     $ 1.09  

Special items

     .74       —         .74  
                        

Net income

   $ 5.63     $ 3.80     $ 1.83  
                        

 

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SUNOCO 2Q07 EARNINGS, PAGE 9

 

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

    

For the Three

Months Ended

June 30

  

For the Six

Months Ended

June 30

     2007    2006    2007    2006

TOTAL REFINING AND SUPPLY

           

Income (Millions of Dollars)

   $ 482    $ 409    $ 558    $ 482

Realized Wholesale Margin* (Per Barrel of Production Available for Sale)

   $ 14.70    $ 12.41    $ 10.98    $ 9.35

Crude Inputs as Percent of Crude Unit Rated Capacity

     91      96      88      94

Throughputs (Thousand Barrels Daily):

           

Crude Oil

     819.0      863.8      790.4      849.7

Other Feedstocks

     78.5      76.7      79.0      72.7
                           

Total Throughputs

     897.5      940.5      869.4      922.4
                           

Products Manufactured (Thousand Barrels Daily):

           

Gasoline

     438.1      453.9      419.8      440.9

Middle Distillates

     297.3      310.1      291.4      309.1

Residual Fuel

     64.5      76.2      62.8      73.5

Petrochemicals

     36.7      34.4      35.6      35.0

Lubricants

     11.0      14.7      12.0      13.9

Other

     82.6      83.9      79.2      84.7
                           

Total Production

     930.2      973.2      900.8      957.1

Less: Production Used as Fuel in Refinery Operations

     44.2      44.9      42.0      44.6
                           

Total Production Available for Sale

     886.0      928.3      858.8      912.5
                           

 

* Wholesale sales revenue less related cost of crude oil, other feedstocks, product purchases and terminalling and transportation divided by production available for sale.

 

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Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

    

For the Three

Months Ended

June 30

  

For the Six

Months Ended

June 30

     2007    2006    2007    2006

Northeast Refining*

           

Realized Wholesale Margin (Per Barrel of Production Available for Sale)

   $ 12.32    $ 11.56    $ 9.00    $ 8.55

Market Benchmark 6-3-2-1 (Per Barrel)

   $ 11.59    $ 8.76    $ 9.37    $ 6.62

Crude Inputs as Percent of Crude Unit Rated Capacity

     94      98      88      95

Throughputs (Thousand Barrels Daily):

           

Crude Oil

     613.9      639.5      576.7      624.9

Other Feedstocks

     68.4      69.2      69.0      64.7
                           

Total Throughputs

     682.3      708.7      645.7      689.6
                           

Products Manufactured (Thousand Barrels Daily):

           

Gasoline

     327.8      342.4      308.6      330.9

Middle Distillates

     231.0      235.3      220.7      232.8

Residual Fuel

     60.8      72.3      59.1      69.4

Petrochemicals

     29.1      27.7      27.4      28.2

Other

     55.5      54.2      50.1      52.9
                           

Total Production

     704.2      731.9      665.9      714.2

Less: Production Used as Fuel in Refinery Operations

     33.5      34.1      30.9      33.3
                           

Total Production Available for Sale

     670.7      697.8      635.0      680.9
                           

 

* Comprised of the Marcus Hook, Philadelphia and Eagle Point refineries.

 

 

MidContinent Refining*

           

Realized Wholesale Margin (Per Barrel of Production Available for Sale)

   $ 22.14    $ 15.00    $ 16.60    $ 11.69

Market Benchmark 3-2-1 (Per Barrel)

   $ 28.30    $ 18.63    $ 19.68    $ 13.27

Crude Inputs as Percent of Crude Unit Rated Capacity

     84      92      87      92

Throughputs (Thousand Barrels Daily):

           

Crude Oil

     205.1      224.3      213.7      224.8

Other Feedstocks

     10.1      7.5      10.0      8.0
                           

Total Throughputs

     215.2      231.8      223.7      232.8
                           

 

* Comprised of the Toledo and Tulsa refineries.

 

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Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

    

For the Three

Months Ended

June 30

   

For the Six

Months Ended

June 30

 
     2007     2006     2007     2006  

MidContinent Refining (continued)

        

Products Manufactured (Thousand Barrels Daily):

        

Gasoline

     110.3       111.5       111.2       110.0  

Middle Distillates

     66.3       74.8       70.7       76.3  

Residual Fuel

     3.7       3.9       3.7       4.1  

Petrochemicals

     7.6       6.7       8.2       6.8  

Lubricants

     11.0       14.7       12.0       13.9  

Other

     27.1       29.7       29.1       31.8  
                                

Total Production

     226.0       241.3       234.9       242.9  

Less: Production Used as Fuel in Refinery Operations

     10.7       10.8       11.1       11.3  
                                

Total Production Available for Sale

     215.3       230.5       223.8       231.6  
                                

RETAIL MARKETING

        

Income (Millions of Dollars)

   $ 30     $ 10     $ 37     $ 10  

Retail Margin* (Per Barrel):

        

Gasoline

   $ 4.26     $ 3.53     $ 3.88     $ 3.21  

Middle Distillates

   $ 3.98     $ 3.64     $ 5.52     $ 4.37  

Sales of Petroleum Products (Thousand Barrels Daily):

        

Gasoline

     307.5       308.9       303.4       298.3  

Middle Distillates

     39.8       41.4       43.3       43.9  
                                
     347.3       350.3       346.7       342.2  
                                

Total Retail Gasoline Outlets, End of Period

     4,699       4,723       4,699       4,723  

Gasoline and Diesel Throughput per Company-Owned or Leased Outlet (M Gal/Site/Month)

     152       143       147       137  

Convenience Stores:

        

Total Stores, End of Period

     734       736       734       736  

Merchandise Sales (M$/Store/Month)

   $ 87     $ 82     $ 81     $ 76  

Merchandise Margin (Company Operated) (% of Sales)

     27 %     27 %     27 %     28 %
                                

 

* Retail sales price less related wholesale price and terminalling and transportation costs per barrel. The retail sales price is the weighted-average price received through the various branded marketing distribution channels.

 

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Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

    

For the Three

Months Ended

June 30

  

For the Six

Months Ended

June 30

     2007    2006    2007    2006

CHEMICALS

           

Income (Millions of Dollars)

   $ 6    $ 8    $ 15    $ 22

Margin* (Cents per Pound):

           

All Products**

     9.7      8.8      10.1      9.8

Phenol and Related Products

     8.5      7.1      8.6      8.1

Polypropylene**

     11.4      11.1      12.0      12.2

Sales (Millions of Pounds):

           

Phenol and Related Products

     644      663      1,236      1,296

Polypropylene

     576      569      1,124      1,131

Other

     22      21      42      42
                           
     1,242      1,253      2,402      2,469
                           

 

*       Wholesale sales revenue less cost of feedstocks, product purchases and related terminalling and transportation divided by sales volumes.

 

**     The polypropylene and all products margins include the impact of a long-term supply contract with Equistar Chemicals, L.P. which is priced on a cost-based formula that includes a fixed discount.

 

LOGISTICS

           

Income (Millions of Dollars)

   $ 10    $ 12    $ 19    $ 18

Pipeline and Terminal Throughput (Thousand Barrels Daily)*:

           

Unaffiliated Customers

     1,171      991      1,163      1,009

Affiliated Customers

     1,659      1,669      1,613      1,649
                           
     2,830      2,660      2,776      2,658
                           

 

*  Excludes joint-venture operations.

 

COKE*

           

Income (Millions of Dollars)

   $ 13    $ 10    $ 24    $ 24

Coke Production (Thousands of Tons):

           

United States

     620      627      1,231      1,258

Brazil*

     237      —        269      —  
                           

 

*  Represents amounts attributable to the facility in Vitória, Brazil which commenced limited operations in March 2007. This facility is operated by Sunoco’s Coke business, which currently has a one percent interest in the joint venture.

 

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SUNOCO 2Q07 EARNINGS, PAGE 13

 

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)

 

    

For the Three

Months Ended

June 30

   

For the Six

Months Ended

June 30

 
     2007    2006     2007    2006  

CAPITAL EXPENDITURES (Millions of Dollars)

          

Refining and Supply

   $ 174    $ 179     $ 444    $ 309  

Retail Marketing

     25      24       38      36  

Chemicals

     13      16 *     27      27 *

Logistics

     46      36       64      52 **

Coke

     54      2       71      5  
                              
   $ 312    $ 257     $ 644    $ 429  
                              

 

*       Excludes a $14 million purchase price adjustment to the 2001 Aristech Chemical Corporation acquisition attributable to an earn-out payment made in April 2006. The earn out, which relates to 2005, was due to realized margins for phenol exceeding certain agreed-upon threshold amounts.

 

**     Excludes the acquisition of two separate crude oil pipeline systems and related storage facilities located in Texas, one from Alon USA Energy, Inc. for $68 million and the other from Black Hills Energy, Inc. for $41 million.

           

        

DEPRECIATION, DEPLETION AND AMORTIZATION (Millions of Dollars)

 

Refining and Supply

   $  58    $  55     $ 114    $ 111  

Retail Marketing

     27      25       53      50  

Chemicals

     18      19       37      37  

Logistics

     9      10       18      19  

Coke

     5      5       10      9  
                              
   $ 117    $ 114     $ 232    $ 226  
                              

 

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Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     2006  
     1st     2nd     3rd     4th     Total  

Refining and Supply

   $ 73     $ 409     $ 273     $ 126     $ 881  

Retail Marketing

     —         10       77       (11 )     76  

Chemicals

     14       8       5       16       43  

Logistics

     6       12       7       11       36  

Coke

     14       10       9       17       50  

Corporate and Other:

          

Corporate expenses

     (16 )     (11 )     (11 )     (20 )     (58 )

Net financing expenses and other

     (12 )     (12 )     (9 )     (16 )     (49 )
                                        
     79       426       351       123       979  

Special items

     —         —         —         —         —    
                                        

Consolidated net income

   $ 79     $ 426     $ 351     $ 123     $ 979  
                                        

Earnings per share of common stock (diluted):

          

Income before special items

   $ .59     $ 3.22     $ 2.76     $ 1.00     $ 7.59  

Special items

     —         —         —         —         —    
                                        

Net income

   $ .59     $ 3.22     $ 2.76     $ 1.00     $ 7.59  
                                        

 

- more -


SUNOCO 2Q07 EARNINGS, PAGE 15

 

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)

 

     2007  
     1st     2nd  

Refining and Supply

   $ 76     $ 482  

Retail Marketing

     7       30  

Chemicals

     9       6  

Logistics

     9       10  

Coke

     11       13  

Corporate and Other:

    

Corporate expenses

     (15 )     (18 )

Net financing expenses and other

     (12 )     (14 )
                
     85       509  

Special Items

     90       —    
                

Consolidated net income

   $ 175     $ 509  
                

Earnings per share of common stock (diluted):

    
    

Income before special items

   $ .70     $ 4.20  

Special items

     .74       —    
                

Net income

   $ 1.44     $ 4.20  
                

 

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SUNOCO 2Q07 EARNINGS, PAGE 16

 

Sunoco, Inc.

Consolidated Statements of Income

(Millions of Dollars)

(Unaudited)

 

     2006  
     1st     2nd     3rd     4th     Total  

REVENUES

          

Sales and other operating revenue (including

consumer excise taxes)

   $ 8,569     $ 10,575     $ 10,480     $ 9,012     $ 38,636  

Interest income

     10       8       11       5       34  

Other income, net

     14       7       5       19       45  
                                        
     8,593       10,590       10,496       9,036       38,715  
                                        

COSTS AND EXPENSES

          

Cost of products sold and operating expenses

     7,454       8,858       8,867       7,768       32,947  

Consumer excise taxes

     628       663       679       664       2,634  

Selling, general and administrative expenses

     210       210       215       246       881  

Depreciation, depletion and amortization

     112       114       115       118       459  

Payroll, property and other taxes

     34       31       33       27       125  

Interest cost and debt expense

     26       27       25       27       105  

Interest capitalized

     (1 )     (4 )     (5 )     (6 )     (16 )
                                        
     8,463       9,899       9,929       8,844       37,135  

Income before income tax expense

     130       691       567       192       1,580  

Income tax expense

     51       265       216       69       601  
                                        

Net income

   $ 79     $ 426     $ 351     $ 123     $ 979  
                                        

 

- more -


SUNOCO 2Q07 EARNINGS, PAGE 17

 

Sunoco, Inc.

Consolidated Statements of Income

(Millions of Dollars)

(Unaudited)

 

     2007  
     1st     2nd  

REVENUES

    

Sales and other operating revenue (including consumer excise taxes)

   $ 9,135     $ 10,724  

Interest income

     5       4  

Other income, net

     165       36  
                
     9,305       10,764  
                

COSTS AND EXPENSES

    

Cost of products sold and operating expenses

     7,988       8,865  

Consumer excise taxes

     641       669  

Selling, general and administrative expenses

     221       236  

Depreciation, depletion and amortization

     115       117  

Payroll, property and other taxes

     37       30  

Interest cost and debt expense

     35       32  

Interest capitalized

     (9 )     (5 )
                
     9,028       9,944  

Income before income tax expense

     277       820  

Income tax expense

     102       311  
                

Net income

   $ 175     $ 509  
                

 

- more -


SUNOCO 2Q07 EARNINGS, PAGE 18

 

Sunoco, Inc.

Consolidated Balance Sheets

(Millions of Dollars)

(Unaudited)

 

    

At

June 30

2007

  

At

December 31

2006

ASSETS

     

Current Assets

     

Cash and cash equivalents

   $ 240    $ 263

Accounts and notes receivable, net

     2,507      2,440

Inventories

     1,234      1,219

Deferred income taxes

     93      93
             

Total Current Assets

     4,074      4,015

Investments and long-term receivables

     131      129

Properties, plants and equipment, net

     6,772      6,365

Deferred charges and other assets

     506      473
             

Total Assets

   $ 11,483    $ 10,982
             

LIABILITIES AND SHAREHOLDERS’ EQUITY

     

Current Liabilities

     

Accounts payable and accrued liabilities

   $ 4,051    $ 4,174

Short-term borrowings

     193      275

Current portion of long-term debt

     4      7

Taxes payable

     462      299
             

Total Current Liabilities

     4,710      4,755

Long-term debt

     1,776      1,705

Retirement benefit liabilities

     527      523

Deferred income taxes

     923      829

Other deferred credits and liabilities

     530      477

Minority interests

     441      618

Shareholders’ equity

     2,576      2,075
             

Total Liabilities and Shareholders’ Equity

   $ 11,483    $ 10,982
             

 

- more -


SUNOCO 2Q07 EARNINGS, PAGE 19

 

Sunoco, Inc.

Consolidated Statements of Cash Flows

(Millions of Dollars)

(Unaudited)

 

     For the Six Months
Ended June 30
 
     2007     2006  

INCREASES (DECREASES) IN CASH AND CASH EQUIVALENTS

    

CASH FLOWS FROM OPERATING ACTIVITIES:

    

Net income

   $ 684     $ 505  

Adjustments to reconcile net income to net cash provided by operating activities:

    

Gain related to issuance of Sunoco Logistics Partners L.P. limited partnership units

     (151 )     —    

Phenol supply contract dispute payment

     —         (95 )

Depreciation, depletion and amortization

     232       226  

Deferred income tax expense

     124       75  

Payments less than (in excess of) expense for retirement plans

     2       (26 )

Changes in working capital pertaining to operating activities, net of effect of acquisitions

     (81 )     (343 )

Other

     13       23  
                

Net cash provided by operating activities

     823       365  
                

CASH FLOWS FROM INVESTING ACTIVITIES:

    

Capital expenditures

     (644 )     (429 )

Acquisitions

     —         (123 )

Proceeds from divestments

     30       28  

Other

     (23 )     (9 )
                

Net cash used in investing activities

     (637 )     (533 )
                

CASH FLOWS FROM FINANCING ACTIVITIES:

    

Net repayments of short-term borrowings

     (82 )     —    

Net proceeds from issuance of long-term debt

     92       301  

Repayments of long-term debt

     (24 )     (275 )

Net proceeds from issuance of Sunoco Logistics Partners L.P. limited partnership units

     —         110  

Cash distributions to investors in cokemaking operations

     (12 )     (7 )

Cash distributions to investors in Sunoco Logistics Partners L.P.

     (27 )     (22 )

Cash dividend payments

     (64 )     (60 )

Purchases of common stock for treasury

     (100 )     (198 )

Proceeds from issuance of common stock under management incentive plans

     6       1  

Other

     2       (1 )
                

Net cash used in financing activities

     (209 )     (151 )
                

Net decrease in cash and cash equivalents

     (23 )     (319 )

Cash and cash equivalents at beginning of period

     263       919  
                

Cash and cash equivalents at end of period

   $ 240     $ 600  
                

-END OF SUNOCO 2Q07 EARNINGS REPORT-