Press Release

EX-99.1 2 dex991.htm PRESS RELEASE Press Release

Exhibit 99.1


		News Release

Sunoco, Inc.

1735 Market Street

Philadelphia, Pa. 19103-7583

For further information contact:

Thomas Golembeski (media) 215-977-6298

Clare McGrory (investors) 215-977-6764

For release: IMMEDIATELY

No. 20 -10

SUNOCO REPORTS SECOND QUARTER 2010 RESULTS

Refining business posts net income of $86 million; Company ends

quarter with $1.5 billion in cash

PHILADELPHIA, July 29, 2010 — Sunoco, Inc. (NYSE: SUN) today reported net income attributable to Sunoco shareholders of $145 million ($1.20 per share diluted) for the second quarter of 2010 versus a net loss attributable to Sunoco shareholders of $55 million ($.47 per share diluted) for the second quarter of 2009. Excluding special items, Sunoco had income for the 2010 second quarter of $158 million ($1.31 per share diluted) versus a 2009 second quarter loss of $31 million ($.27 per share diluted).

For the first six months of 2010, Sunoco reported net income attributable to Sunoco shareholders of $82 million ($.69 per share diluted) versus a net loss attributable to Sunoco shareholders of $43 million ($.37 per share diluted) for the first six months of 2009.

“While market conditions during the second quarter remained challenging, our refining business was profitable for the first time since the first quarter of 2009. This is a clear indication that our decisive actions are beginning to show results. By improving margin capture, reducing costs, and optimizing the performance of our refineries, we achieved solid results during a period of continued economic weakness and excess supply of petroleum and chemical products,” said Lynn L. Elsenhans, Chairman and Chief Executive Officer.

SUNOCO 2Q10 EARNINGS, PAGE 2

“Sunoco’s non-refining businesses are providing steady earnings and our balance sheet is very strong,” said Elsenhans. “We remain focused on the fundamentals: running our refineries safely and reliably at optimal capacity utilization, lowering our breakeven cost per barrel, and furthering the progress we have made in capturing available margin.”

Sunoco significantly improved its cash position, ending the quarter with $1.5 billion of cash, with the increase largely driven by strong operating cash flows and the receipt of proceeds from the sale of the polypropylene business which closed in the first quarter of 2010.

“Our recently announced intent to separate SunCoke Energy from the rest of Sunoco in the first half of 2011 is part of a strategy to unlock shareholder value and maximize the future success of both entities,” Elsenhans continued. “The fuels and coke units are distinct businesses with different models, different sets of customers and no significant integration or synergies.”

With a dedicated management team and direct access to capital markets, SunCoke Energy should be better able to achieve the scale needed to pursue domestic and international growth opportunities. Similarly, through a more focused strategic plan, Sunoco’s streamlined fuels business should be better positioned to take advantage of growth opportunities and become the premier provider of transportation fuels in its markets.

“We see potential opportunities to grow inside and outside Sunoco’s traditional footprint both in Retail and through Sunoco Logistics, as recently announced logistics acquisitions and projects demonstrate,” said Elsenhans.

DETAILS OF SECOND QUARTER RESULTS

REFINING AND SUPPLY- Continuing Operations

Refining and Supply had income from continuing operations of $86 million in the second quarter of 2010 versus a loss of $77 million in the second quarter of 2009. The increase in results was due to higher realized margins and lower expenses, partially offset by lower production volumes which were largely attributable to the closure of the Eagle Point refinery in the fourth quarter of 2009. The overall crude utilization rate was 92 percent for the quarter, up from 79 percent in the first quarter of 2010, which was impacted by significant planned turnaround activities. Lower expenses were largely the result of cost reductions related to the business improvement initiative carried out during the last three quarters of 2009 and the closure of the Eagle Point refinery in the fourth quarter of 2009. Also contributing to the lower expenses were lower costs for purchased fuel and utilities and the absence of the write-off of certain assets in connection with the shutdown of the ethylene complex at the Marcus Hook refinery in 2009.

SUNOCO 2Q10 EARNINGS, PAGE 3

REFINING AND SUPPLY- Discontinued Operations

Discontinued Tulsa refining operations, which were divested on June 1, 2009, had a loss of $6 million in the second quarter of 2009.

RETAIL MARKETING

Retail Marketing earned $45 million in the current quarter versus $10 million in the second quarter of 2009. The increase in earnings was due to higher average retail gasoline margins driven by falling wholesale prices and lower expenses.

CHEMICALS- Continuing Operations

Chemicals reported income from continuing operations of $5 million in the second quarter of 2010 versus a loss of $3 million in the second quarter of 2009. The improvement in results was primarily due to higher sales volumes and slightly better margins.

CHEMICALS- Discontinued Operations

Discontinued polypropylene operations, which were divested on March 31, 2010, had income of $3 million in the second quarter of 2009.

LOGISTICS

Logistics earned $20 million in the second quarter of 2010 versus $26 million in the second quarter of 2009. The decrease in earnings was due primarily to lower results from crude marketing activities as a result of reduced market-related profits largely attributable to the contraction of the contango market structure.

On July 1, 2010, Sunoco Logistics Partners L.P. acquired Texon’s butane blending business for $140 million plus inventory. This business consists of patented technology for sophisticated blending of butane into gasoline, contracts with several large terminal operators currently utilizing the patented technology, butane inventories, and other related assets. The Partnership also announced recently that it has exercised certain rights to increase its ownership interests in Mid-Valley Pipeline Company, West Texas Gulf Pipe Line Company and West Shore Pipe Line Company. These three transactions are expected to close within the next 30 days for an aggregate purchase price of approximately $100 million.

COKE

Coke earned $41 million in the second quarter of 2010 as compared to $42 million in the second quarter of 2009. The decrease in earnings was due to the absence of a $6 million after-tax dividend attributable to the 2008 Brazilian cokemaking operations which was recognized in the second quarter of 2009. Partially offsetting this decrease was higher coke sales volumes in the second quarter of 2010.

SUNOCO 2Q10 EARNINGS, PAGE 4

CORPORATE AND OTHER

Corporate administrative expenses were $20 million after tax in the second quarter of 2010 versus $15 million after tax in the second quarter of 2009. Corporate expenses increased primarily due to incentive compensation accruals stemming from the Company’s improved financial performance.

Net Financing Expenses and Other – Net financing expenses and other were $19 million after tax in the second quarter of 2010 versus $11 million after tax in the second quarter of 2009. The increase was primarily due to lower capitalized interest and interest income.

Sunoco also recently reached agreement with IBM (NYSE: IBM) to outsource some back office processes, including information technology, finance and accounting transaction processing, and indirect procurement. This arrangement marks another important step in Sunoco’s continued expense reduction program, which is critical to improving the Company’s competitiveness.

SPECIAL ITEMS

During the second quarter of 2010, Sunoco recorded a $13 million after-tax provision for pension settlement losses and employee terminations and related costs in connection with the business improvement initiative.

During the second quarter of 2009, Sunoco recorded a $44 million after-tax provision for employee terminations and related costs in connection with its business improvement initiative, of which $39 million after tax was attributable to a noncash provision for pension and postretirement settlement and curtailment losses. Sunoco also recognized a $20 million net after-tax gain in the second quarter of 2009 related to the divestment of the discontinued Tulsa refining operations.

Sunoco is a leading transportation fuel provider, with operations located primarily in the East Coast and Midwest regions of the United States. The Company operates more than 4,700 branded retail locations that market transportation fuels and convenience store merchandise in 23 states. This retail network is principally supplied by Sunoco-owned refineries with a combined crude oil processing capacity of 675,000 barrels per day. Sunoco is also the General Partner and has a 33-percent interest in Sunoco Logistics Partners, L.P., a publicly traded master limited partnership which owns and operates 6,000 miles of refined product and crude oil pipelines and approximately 40 product terminals. Many of Sunoco Logistics’ pipelines and terminals and storage facilities are integrated with Sunoco’s retail network and refineries. Through SunCoke Energy, Sunoco makes high-quality metallurgical-grade coke for major steel manufacturers. The company’s facilities in the U.S. have the capacity to manufacture approximately 3.67 million tons of metallurgical-grade coke annually. Sunoco also is the operator of, and has an equity interest in, a 1.7 million tons-per-year cokemaking facility in Vitória, Brazil.

SUNOCO 2Q10 EARNINGS, PAGE 5

Anyone interested in obtaining further insights into the second quarter’s results can monitor the Company’s quarterly teleconference call, which is scheduled for 5:30 p.m. ET on July 29, 2010. It can be accessed through Sunoco’s website - 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. These forward-looking statements are based upon assumptions by the Company concerning future conditions, any or all of which ultimately may prove to be inaccurate, and upon the current knowledge, beliefs and expectations of Company management. These forward-looking statements are not guarantees of future performance. The reader should not place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company expressly disclaims any obligation to update or alter its forward-looking statements, whether as a result of new information, future events or otherwise.

Forward-looking statements are inherently uncertain and involve significant known and unknown risks and uncertainties (many of which are beyond the control of the Company) that could cause actual results to differ materially from those discussed in this release.

Such risks and uncertainties include economic, business, competitive and/or regulatory factors affecting the Company’s business, as well as uncertainties related to the outcomes of pending or future litigation, legislation, or regulatory actions. Among such risks are: changes in crude oil or natural gas prices, refining, marketing and chemicals margins, or other market conditions affecting the oil and gas industry; higher-than-expected costs of, or delays in, planned development or completion of repair projects, capital projects, acquisitions, or dispositions; operational interruptions, unforeseen technical difficulties and/or changes in technical or operating conditions; general domestic and international economic and political conditions, wars and acts of terrorism or sabotage; the outcome of commercial negotiations; the actions of competitors or regulators; the competitiveness of alternate-energy sources or product substitutes; technological developments; liability resulting from pending or future litigation; significant investment or product changes and/or liability for remedial actions or assessments under existing or future environmental regulations; gains and losses related to the acquisition, disposition or impairment of assets; recapitalizations; access to, or significantly higher costs of, capital; the effects of changes in accounting rules applicable to the Company; and changes in tax, environmental and other laws and regulations applicable to the Company’s businesses. Unpredictable or unknown factors not discussed in this release also could have material adverse effects on forward-looking statements.

In accordance with the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, the Company has included in its Annual Report on Form 10-K for the year ended December 31, 2009 and in its subsequent Form 10-Q and Form 8-K filings, cautionary language identifying other important

SUNOCO 2Q10 EARNINGS, PAGE 6

factors (though not necessarily all such factors) that could cause future outcomes to differ materially from those set forth in the forward-looking statements. For more information concerning these factors, see the Company’s Securities and Exchange Commission filings, available on the Company’s website at www.SunocoInc.com.

-END OF TEXT, CHARTS FOLLOW-

SUNOCO 2Q10 EARNINGS, PAGE 7

Sunoco, Inc.

2010 Second Quarter and Six-Month Financial Summary

(Unaudited)


Second Quarter	2010		2009*
Revenues	$	9,586,000,000	$	7,298,000,000
Net Income (Loss)	$	176,000,000	$	(21,000,000	)
Less: Net Income Attributable to Noncontrolling Interests		31,000,000		34,000,000

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders	$	145,000,000	$	(55,000,000	)

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders Per Share of Common Stock:
Basic	$	1.20	$	(.47	)
Diluted	$	1.20	$	(.47	)**
Weighted-Average Number of Shares Outstanding (In Millions):
Basic		120.6		116.9
Diluted		120.7		116.9	**

Six Months
Revenues	$	17,778,000,000	$	13,250,000,000
Net Income	$	138,000,000	$	30,000,000
Less: Net Income Attributable to Noncontrolling Interests		56,000,000		73,000,000

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders	$	82,000,000	$	(43,000,000	)

Net Income (Loss) Attributable to Sunoco, Inc. Shareholders Per Share of Common Stock:
Basic	$	.69	$	(.37	)
Diluted	$	.69	$	(.37	)**
Weighted-Average Number of Shares Outstanding (In Millions):
Basic		119.7		116.9
Diluted		119.7		116.9	**

*	Reclassified to treat the polypropylene chemicals business that was sold on March 31, 2010 as a discontinued operation.

**	Since the assumed issuance of common stock under stock incentive awards would not have been dilutive, the diluted per share amounts are equal to the basic per share amounts.

SUNOCO 2Q10 EARNINGS, PAGE 8

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)


	Three Months Ended
	June 30						Mar. 31 2010
	2010			2009			Mar. 31 2010
Refining and Supply:
Continuing operations	$	86		$	(77	)	$	(42	)
Discontinued operations		—			(6	)		—
Retail Marketing		45			10			21
Chemicals:
Continuing operations		5			(3	)		3
Discontinued operations		—			3			21
Logistics		20			26			17
Coke		41			42			37
Corporate and Other:
Corporate expenses		(20	)		(15	)		(23	)
Net financing expenses and other		(19	)		(11	)		(17	)

		158			(31	)		17
Special items		(13	)		(24	)*		(80	)**

Net income (loss) attributable to Sunoco, Inc. shareholders	$	145		$	(55	)	$	(63	)

Earnings (loss) per share of common stock (diluted):
Income (loss) attributable to Sunoco, Inc. shareholders before special items	$	1.31		$	(.27	)	$	.14
Special items		(.11	)		(.20	)		(.67	)

Net income (loss) attributable to Sunoco, Inc. shareholders	$	1.20		$	(.47	)	$	(.53	)

*	Includes a $20 million net after-tax gain recognized in connection with the divestment of the Tulsa refining operations.

**	Includes a $44 million net after-tax loss recognized in connection with the divestment of the polypropylene chemicals business.

SUNOCO 2Q10 EARNINGS, PAGE 9

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)


	Six Months Ended June 30
	2010			2009
Refining and Supply:
Continuing operations	$	44		$	(63	)
Discontinued operations		—			3
Retail Marketing		66			16
Chemicals:
Continuing operations		8			(15	)
Discontinued operations		21			11
Logistics		37			56
Coke		78			67
Corporate and Other:
Corporate expenses		(43	)		(26	)
Net financing expenses and other		(36	)		(21	)

		175			28
Special items		(93	) *		(71	)**

Net income (loss) attributable to Sunoco, Inc. shareholders	$	82		$	(43	)

Earnings (loss) per share of common stock (diluted):
Income attributable to Sunoco, Inc. shareholders before special items	$	1.46		$	.24
Special items		(.77	)		(.61	)

Net income (loss) attributable to Sunoco, Inc. shareholders	$	.69		$	(.37	)

*	Includes a $44 million net after-tax loss recognized in connection with the divestment of the polypropylene chemicals business.

Includes a $20 million net after-tax gain recognized in connection with the divestment of the Tulsa refining operations and $3 and $4 million after-tax provisions for asset write-downs and other matters attributable to the Tulsa refining operations and polypropylene chemicals business, respectively.

SUNOCO 2Q10 EARNINGS, PAGE 10

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)


	For the Three Months Ended								For the Six Months Ended
	June 30					Mar. 31 2010			June 30
	2010		2009*			Mar. 31 2010			2010		2009*
REFINING AND SUPPLY
Income (Loss) (Millions of Dollars)	$	86	$	(77	)	$	(42	)	$	44	$	(63	)
Realized Wholesale Margin** (Per Barrel of Production Available for Sale)	$	7.34	$	3.65		$	4.08		$	5.82	$	4.95
Market Benchmark*** (Per Barrel)	$	6.51	$	6.05		$	5.67		$	6.09	$	5.88
Crude Inputs as Percent of Crude Unit Rated Capacity⁺		92		78			79			85		77
Throughputs (Thousand Barrels Daily):
Crude Oil		617.5		644.2			533.3			575.7		635.6
Other Feedstocks		50.2		81.7			58.9			54.5		74.7

Total Throughputs		667.7		725.9			592.2			630.2		710.3

Products Manufactured (Thousand Barrels Daily):
Gasoline		343.1		370.3			306.3			324.8		360.2
Middle Distillates		244.5		229.5			202.4			223.5		231.5
Residual Fuel		39.5		61.9			34.8			37.2		61.5
Petrochemicals		20.9		31.5			23.7			22.3		28.6
Other		48.5		61.8			51.8			50.2		58.1

Total Production		696.5		755.0			619.0			658.0		739.9
Less: Production Used as Fuel in Refinery Operations		32.3		34.8			28.5			30.4		35.2

Total Production Available for Sale		664.2		720.2			590.5			627.6		704.7

*	Excludes amounts attributable to the Tulsa refinery, which was sold to Holly Corporation on June 1, 2009.

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

***	Represents a weighted-average refinery benchmark margin comprised of a 6-3-2-1 Value-Added Benchmark relating to the Northeast refining operations (80% weight) and a 4-3-1 Benchmark relating to the Toledo refinery (20% weight).

+	Reflects the impact of a 150 thousand barrels-per-day reduction in crude unit capacity in November 2009 attributable to the shutdown of the Eagle Point refinery.

SUNOCO 2Q10 EARNINGS, PAGE 11

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)


	For the Three Months Ended									For the Six Months Ended
	June 30						Mar. 31 2010			June 30
	2010			2009			Mar. 31 2010			2010			2009
RETAIL MARKETING
Income (Millions of Dollars)	$	45		$	10		$	21		$	66		$	16
Retail Margin* (Per Barrel):
Gasoline	$	4.81		$	2.94		$	3.74		$	4.30		$	2.82
Middle Distillates	$	3.79		$	5.03		$	3.35		$	3.59		$	7.89
Sales (Thousand Barrels Daily):
Gasoline		295.7			300.0			271.4			283.7			291.1
Middle Distillates		29.9			30.4			24.2			27.0			33.5

		325.6			330.4			295.6			310.7			324.6

Total Retail Gasoline Outlets, End of Period		4,743			4,708			4,713			4,743			4,708
Gasoline and Diesel Throughput per Company-Owned or Leased Outlet (M Gal/Site/Month)		159			153			147			153			148
Convenience Stores:
Total Stores, End of Period		577			668			576			577			668
Merchandise Sales (M$/Store/Month)	$	104		$	92		$	88		$	96		$	85
Merchandise Margin (Company Operated) (% of Sales)		27	%		27	%		26	%		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. CHEMICALS*
Income (Loss) (Millions of Dollars)	$	5		$	(3	)	$	3		$	8		$	(15	)
Margin** (Cents per Pound):		8.9			8.2			9.9			9.4			7.4
Sales (Millions of Pounds):		554			427			449			1,003			834

*	Consists of the phenol and related products operations but excludes amounts attributable to the polypropylene chemicals business, which was sold to Braskem S.A. on March 31, 2010.

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

SUNOCO 2Q10 EARNINGS, PAGE 12

Sunoco, Inc.

Financial and Operating Statistics (Unaudited)


	For the Three Months Ended							For the Six Months Ended
	June 30					Mar. 31		June 30
	2010		2009			2010		2010		2009
LOGISTICS
Income (Millions of Dollars)	$	20	$	26		$	17	$	37	$	56
Pipeline and Terminal Throughput (Thousand Barrels Daily)*:
Unaffiliated Customers		1,799		1,486			1,738		1,768		1,495
Affiliated Customers		1,267		1,461			1,238		1,253		1,450

		3,066		2,947			2,976		3,021		2,945

* Excludes joint-venture operations. COKE
Income (Millions of Dollars)	$	41	$	42		$	37	$	78	$	67
Coke Production (Thousands of Tons):
United States*		883		694			841		1,724		1,375
Brazil		422		282			413		835		562

* Includes amounts attributable to a 650 thousand tons-per-year cokemaking facility at SunCoke Energy’s Granite City site which commenced operations in the fourth quarter of 2009. CAPITAL PROGRAM (Millions of Dollars)
Refining and Supply:
Continuing operations	$	52	$	96		$	109	$	161	$	203
Discontinued operations		—		1			—		—		3
Retail Marketing		16		20			7		23		28
Chemicals:
Continuing operations		4		4			5		9		8
Discontinued operations		—		3			3		3		7
Logistics		50		37			27		77		70
Coke		58		69			10		68		138

	$	180	$	230		$	161	$	341	$	457


*DEPRECIATION, DEPLETION AND AMORTIZATION (Millions of Dollars)**

Refining and Supply	$	68	$	84	**	$	62	$	130	$	149	**
Retail Marketing		23		25			20		43		50
Chemicals		7		7			7		14		14
Logistics		13		12			14		27		23
Coke		11		7			11		22		15

	$	122	$	135		$	114	$	236	$	251

Excludes amounts attributable to the polypropylene chemicals business and Tulsa refinery for all periods presented. The polypropylene chemicals business was sold to Braskem S.A. on March 31, 2010 and the Tulsa refinery was sold to Holly Corporation on June 1, 2009 and, as a result, have been classified as discontinued operations in the Company’s consolidated statements of operations.

**	Includes $19 million attributable to the write-off of certain assets at the Marcus Hook refinery as a result of a fire at this facility in May 2009.

SUNOCO 2Q10 EARNINGS, PAGE 13

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)


	2009
	1st			2nd			3rd			4th			Total
Refining and Supply:
Continuing operations	$	14		$	(77	)	$	(118	)	$	(135	)	$	(316	)
Discontinued operations		9			(6	)		—			—			3
Retail Marketing		6			10			49			21			86
Chemicals:
Continuing operations		(12	)		(3	)		(2	)		4			(13	)
Discontinued operations		8			3			1			2			14
Logistics		30			26			19			22			97
Coke		25			42			35			78			180
Corporate and Other:
Corporate expenses		(11	)		(15	)		(6	)		(6	)		(38	)
Net financing expenses and other		(10	)		(11	)		(12	)		(17	)		(50	)

		59			(31	)		(34	)		(31	)		(37	)
Special Items:
Continuing operations		(40	)		(44	)		(278	)		36			(326	)
Discontinued operations*		(7	)		20			—			21			34

Net income (loss) attributable to Sunoco, Inc. shareholders	$	12		$	(55	)	$	(312	)	$	26		$	(329	)

Earnings (loss) per share of common stock (diluted):
Income (loss) attributable to Sunoco, Inc. shareholders before special items	$	.50		$	(.27	)	$	(.29	)	$	(.27	)	$	(.32	)
Special items		(.40	)		(.20	)		(2.38	)		.49			(2.49	)

Net income (loss) attributable to Sunoco, Inc. shareholders	$	.10		$	(.47	)	$	(2.67	)	$	.22		$	(2.81	)

Consists of $4 and $3 million after-tax provisions for asset write-downs and other matters attributable to the polypropylene chemicals operations and the Tulsa refinery, respectively, in the first quarter of 2009 and $20 and $21 million net after-tax gains recognized in connection with the divestment of the Tulsa refining operations in the second quarter and fourth quarter of 2009, respectively.

SUNOCO 2Q10 EARNINGS, PAGE 14

Sunoco, Inc.

Earnings Profile of Sunoco Businesses (after tax)

(Millions of Dollars, Except Per-Share Amounts)

(Unaudited)


	2010
	1st			2nd
Refining and Supply:
Continuing operations	$	(42	)	$	86
Discontinued operations		—			—
Retail Marketing		21			45
Chemicals:
Continuing operations		3			5
Discontinued operations		21			—
Logistics		17			20
Coke		37			41
Corporate and Other:
Corporate expenses		(23	)		(20	)
Net financing expenses and other		(17	)		(19	)

		17			158
Special Items:
Continuing operations		(36	)		(13	)
Discontinued operations		(44	)*		—

Net income (loss) attributable to Sunoco, Inc. shareholders	$	(63	)	$	145

Earnings (loss) per share of common stock (diluted):
Income attributable to Sunoco, Inc. shareholders before special items	$	.14		$	1.31
Special items		(.67	)		(.11	)

Net income (loss) attributable to Sunoco, Inc. shareholders	$	(.53	)	$	1.20

*	Consists of a net loss recognized in connection with the divestment of the polypropylene chemicals business.

SUNOCO 2Q10 EARNINGS, PAGE 15

Sunoco, Inc.

Consolidated Statements of Operations

(Millions of Dollars)

(Unaudited)


	2009*
	1st			2nd			3rd			4th			Total
REVENUES
Sales and other operating revenue (including consumer excise taxes)	$	5,945		$	7,271		$	8,389		$	8,666		$	30,271
Interest income		1			3			1			—			5
Other income, net		6			24			60			26			116

		5,952			7,298			8,450			8,692			30,392

COSTS AND EXPENSES
Cost of products sold and operating expenses		4,936			6,355			7,464			7,782			26,537
Consumer excise taxes		569			605			630			583			2,387
Selling, general and administrative expenses		168			158			180			165			671
Depreciation, depletion and amortization		116			135			114			119			484
Payroll, property and other taxes		39			34			32			32			137
Provision for asset write-downs and other matters		67			75			511			34			687
Interest cost and debt expense		31			39			37			38			145
Interest capitalized		(10	)		(12	)		(12	)		(5	)		(39	)

		5,916			7,389			8,956			8,748			31,009
Income (loss) from continuing operations before income tax benefit		36			(91	)		(506	)		(56	)		(617	)
Income tax benefit		(5	)		(53	)		(219	)		(89	)		(366	)

Income (loss) from continuing operations		41			(38	)		(287	)		33			(251	)
Income from discontinued operations		10			17			1			23			51

Net income (loss)		51			(21	)		(286	)		56			(200	)
Less: Net income attributable to noncontrolling interests		39			34			26			30			129

Net income (loss) attributable to Sunoco, Inc. shareholders	$	12		$	(55	)	$	(312	)	$	26		$	(329	)

*	Reclassified to treat the polypropylene chemicals business that was sold on March 31, 2010 and the Tulsa refinery that was sold on June 1, 2009 as discontinued operations.

SUNOCO 2Q10 EARNINGS, PAGE 16

Sunoco, Inc.

Consolidated Statements of Operations

(Millions of Dollars)

(Unaudited)


	2010
	1st			2nd
REVENUES
Sales and other operating revenue (including consumer excise taxes)	$	8,166		$	9,572
Interest income		—			1
Other income, net		26			13

		8,192			9,586

COSTS AND EXPENSES
Cost of products sold and operating expenses		7,311			8,350
Consumer excise taxes		530			608
Selling, general and administrative expenses		146			167
Depreciation, depletion and amortization		114			122
Payroll, property and other taxes		34			24
Provision for asset write-downs and other matters		45			22
Interest cost and debt expense		39			40
Interest capitalized		(3	)		(3	)

		8,216			9,330
Income (loss) from continuing operations before income tax expense (benefit)		(24	)		256
Income tax expense (benefit)		(9	)		80

Income (loss) from continuing operations		(15	)		176
Loss from discontinued operations		(23	)		—

Net income (loss)		(38	)		176
Less: Net income attributable to noncontrolling interests		25			31

Net income (loss) attributable to Sunoco, Inc. shareholders	$	(63	)	$	145

SUNOCO 2Q10 EARNINGS, PAGE 17

Sunoco, Inc.

Consolidated Balance Sheets

(Millions of Dollars)

(Unaudited)


	At June 30 2010		At December 31 2009
ASSETS
Cash and cash equivalents	$	1,462	$	377
Accounts and notes receivable, net		2,287		2,262
Inventories		909		635
Income tax refund receivable		—		394
Deferred income taxes		96		96

Total current assets		4,754		3,764

Investments and long-term receivables		183		179
Properties, plants and equipment, net		7,330		7,626
Deferred charges and other assets		256		326

Total assets	$	12,523	$	11,895


LIABILITIES AND EQUITY
Accounts payable and accrued liabilities	$	4,259	$	3,806
Short-term borrowings		115		397
Current portion of long-term debt		185		6
Taxes payable		262		209

Total current liabilities		4,821		4,418

Long-term debt		2,219		2,061
Retirement benefit liabilities		594		778
Deferred income taxes		1,013		998
Other deferred credits and liabilities		561		521

Total liabilities		9,208		8,776


EQUITY
Sunoco, Inc. shareholders’ equity		2,831		2,557
Noncontrolling interests		484		562

Total equity		3,315		3,119

Total liabilities and equity	$	12,523	$	11,895

SUNOCO 2Q10 EARNINGS, PAGE 18

Sunoco, Inc.

Consolidated Statements of Cash Flows

(Millions of Dollars)

(Unaudited)


	For the Six Months Ended June 30
	2010			2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income	$	138		$	30
Adjustments to reconcile net income to net cash provided by (used in) operating activities:
Loss on divestment of discontinued polypropylene operations		169			—
Gain on divestment of discontinued Tulsa operations		—			(34	)
Provision for asset write-downs and other matters		67			154
Depreciation, depletion and amortization		239			269
Deferred income tax expense (benefit)		(10	)		20
Payments less than (in excess of) expense for retirement plans*		(126	)		12
Changes in working capital pertaining to operating activities		488			(544	)
Other		(9	)		2

Net cash provided by (used in) operating activities		956			(91	)


CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures		(341	)		(457	)
Proceeds from divestments:
Polypropylene operations		348			—
Tulsa refinery and related inventory		—			157
Other		18			29
Other		(2	)		—

Net cash provided by (used in) investing activities		23			(271	)


CASH FLOWS FROM FINANCING ACTIVITIES:
Net repayments of short-term borrowings		(282	)		(162	)
Net proceeds from issuance of long-term debt		802			778
Repayments of long-term debt		(462	)		(422	)
Net proceeds from sale/issuance of Sunoco Logistics Partners L.P. limited partnership units		145			110
Cash distributions to investors in cokemaking operations		(15	)		(8	)
Cash distributions to investors in Sunoco Logistics Partners L.P.		(46	)		(36	)
Cash dividend payments		(36	)		(70	)
Other		—			(1	)

Net cash provided by financing activities		106			189

Net increase (decrease) in cash and cash equivalents		1,085			(173	)
Cash and cash equivalents at beginning of period		377			240

Cash and cash equivalents at end of period	$	1,462		$	67

*	Payments for the six months ended June 30, 2010 exclude 3.59 million shares of Sunoco common stock valued at $90 million that were contributed to the Company’s defined benefit plans in February 2010.