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| Sunoco Reports Fourth Quarter and 2001 Full-Year Results | ||||||||||||||||||||||||||||||||||||||||
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PHILADELPHIA, Jan. 23 /PRNewswire-FirstCall/ -- Sunoco, Inc. (NYSE: SUN) today reported an operating loss of $7 million ($.09 per share diluted) for the fourth quarter of 2001 versus operating income of $135 million ($1.58 per share diluted) for the 2000 fourth quarter. (Photo: http://www.newscom.com/cgi-bin/prnh/19981105/PHTH006) Including special items, net income for the fourth quarter of 2001 was $4 million, compared to net income of $154 million in the fourth quarter of 2000. For the full year, Sunoco reported operating income of $391 million ($4.77 per share diluted) versus $438 million ($5.01 per share diluted) for the year 2000. Including special items, 2001 net income was $398 million ($4.85 per share diluted) versus net income of $422 million ($4.82 per share diluted) in 2000. "Warm temperatures and a weak economy resulted in a disappointing finish to an otherwise strong year at Sunoco," said John G. Drosdick, Chairman and Chief Executive Officer. "Average margins for our refining and chemicals businesses were below breakeven levels for the quarter. Unscheduled downtime at our northeast refineries in December also hurt results, and together with the extremely weak margin environment, resulted in a $7 million loss in the fourth quarter. "Our financial results and operating performance for the full year 2001 were much more satisfying. After-tax operating income was $391 million, or $4.77 per share. Our full-year return on capital employed was 15.2 percent. We generated EBITDA of $1.03 billion ($12.52 per share), completed acquisitions in our Chemicals and Retail Marketing businesses totalling $708 million and repurchased $393 million, or 10.7 million shares, of our stock. Retail Marketing and our mid-continent refining centers had strong earnings. Aggregate production at our refineries was 272.3 million barrels - 7.7 million barrels more than 2000 and a record level by 4 million barrels. Overall, 2001 was a very strong year following our record 2000 results." Looking ahead, Drosdick commented, "While high distillate inventories and warm winter weather continue to depress current refining margins, the outlook for the upcoming driving season is more favorable. Gasoline inventories are more normalized, crude production cuts are yet to be felt by refiners, and the challenges of supplying the many different summertime blends of gasoline are still significant for the industry. Despite a slowing economy in 2001, gasoline demand has continued to rise modestly and the supply and distribution of gasoline remains tight. Further, as the economy strengthens, we expect to see improvement in chemical product demand and margins. "We remain confident in our strategy and the future prospects of Sunoco. Our confidence in the future is based on the strategic actions we have taken to grow the earnings power of the company and our proven results over the past five years. During that time, we generated an average return on capital employed of 13.1 percent, among the leaders in our sector and well above our cost of capital. We have grown and improved our asset portfolio while reducing the outstanding shares by nearly 25 percent. We will continue to focus our efforts on extracting maximum value and efficiency from our existing assets while opportunistically and prudently utilizing our financial resources to further grow the company and enhance the value for Sunoco shareholders." DETAILS OF FOURTH QUARTER RESULTS REFINING AND SUPPLY Refining and Supply lost $16 million in the fourth quarter of 2001 versus income of $95 million in the fourth quarter of 2000. The decline in earnings was due to significantly lower realized margins, particularly in Sunoco's northeast refining system. Refined product inventory levels, particularly for distillate products in the PADD I Northeast region, built to higher-than-average levels as record warm temperatures, reduced jet fuel demand and a weakening economy had a negative impact on demand and refining margins during the quarter. Realized margins for Sunoco's northeast refining system averaged $2.79 per barrel, down $4.13 per barrel versus the very strong fourth-quarter 2000 level. Margins for Sunoco's mid-continent refineries in Toledo and Tulsa were comparatively stronger, although the Toledo refinery's realized margins were down over $2.00 per barrel versus year-ago levels. Higher margins from Sunoco's Tulsa refining system, associated largely with lubricant products, partially offset these margin declines. Fourth-quarter refining input, although curtailed by conversion unit downtime during December, averaged 681,600 barrels daily (93 percent of rated capacity), up slightly versus prior-year levels when significant scheduled maintenance was performed. RETAIL MARKETING Retail Marketing earned $12 million in the current quarter versus $29 million in the fourth quarter of 2000. The decrease in earnings was primarily due to lower retail gasoline margins, which were down 2.2 cents per gallon versus the 2000 fourth quarter. Lower margins on distillate sales, particularly retail heating oil, and higher expenses, largely associated with volume growth, also contributed to the decline. Retail gasoline sales volumes were 957 million gallons for the quarter, up 7.5 percent versus the same period in 2000. Sunoco ended 2001 with 4,151 retail gasoline outlets, up 516 from year-end 2000. CHEMICALS Chemicals had a loss of $4 million in the fourth quarter of 2001 versus income of $2 million in the prior-year quarter. The decline was due largely to losses associated with Sunoco's polypropylene business, where rising feedstock costs were not recoverable in the marketplace. Sunoco Chemicals sales volumes, although up significantly from prior year levels due to the 2001 acquisition of Aristech Chemical Corporation, continued to reflect market weakness and were at below-capacity levels. LOGISTICS Net income was $9 million in the fourth quarter of 2001 versus $11 million for the year-ago period. The decrease in earnings was due primarily to lower margins associated with crude oil acquisition and marketing activities and lower throughput at the Nederland, TX crude oil terminal. Fourth quarter 2000 activity at Nederland included volumes associated with the drawdown of the U.S. Department of Energy's Strategic Petroleum Reserve. COKE Net income for the fourth quarter of 2001 was $16 million versus $17 million for the fourth quarter of 2000. CORPORATE AND NET FINANCING Corporate administrative expenses were $5 million in both fourth quarter periods. Net financing expenses were $19 million in the fourth quarter of 2001 versus $14 million in the fourth quarter of 2000. The increase in net financing expenses is largely due to the Aristech acquisition. SPECIAL ITEMS Net income for the fourth quarter of 2001 included a $3 million after-tax loss from Value Added and Eastern Lubricants operations. Also included in fourth quarter net income are an $11 million after-tax favorable adjustment to the exit-cost accrual established in connection with the disposal of the Company's real estate business and a $3 million after-tax net gain attributable to the completion of the disposition of the Company's Value Added and Eastern Lubricants operations, including the sale of the Puerto Rico refinery. Net income for the fourth quarter of 2000 included a $38 million after-tax gain associated with the settlement of certain federal income tax issues, a $17 million after-tax charge for employee terminations and for costs associated with the shutdown of an ethylene oxide plant in Brandenburg, KY and $2 million of after-tax losses from Value Added and Eastern Lubricants operations. TWELVE MONTH RESULTS Operating income for the full year 2001 was $391 million versus $438 million for the full year 2000. The decrease is largely due to lower margins in Sunoco's northeast U.S. refining system, higher refinery fuel costs, higher volume-related marketing expenses, lower Chemicals income and higher net financing expenses as a result of financing costs attributable to the Aristech acquisition. Partially offsetting these negative factors were higher refinery production and retail gasoline sales volumes and improved margins in Sunoco's mid-continent refining centers and Retail Marketing operations. Net income for the full year 2001 included net after-tax benefits of $7 million associated with special items. In addition to the aforementioned $11 million of after-tax benefits recognized in the 2001 fourth quarter, the full year 2001 included the following: a $21 million after-tax gain from an income tax settlement; $26 million of after-tax charges associated with employee termination and exit costs related to the disposal of Sunoco's Value- Added and Eastern Lubricants operations and an environmental accrual associated with Sunoco's retail marketing and distribution operations; and $1 million of after-tax income from Value Added and Eastern Lubricants operations. Net income for the full year 2000 included a net after-tax charge of $16 million associated with special items. These items consisted of a $117 million after-tax gain from the settlement of certain federal income tax issues, a $5 million after-tax gain on settlement of insurance litigation, a $147 million after-tax charge related primarily to the write-down of the lubricants assets, a $2 million after-tax loss from Value Added and Eastern Lubricants operations and an $11 million favorable adjustment to the gain on divestment of Sunoco's international oil and gas production business which was sold in 1996. Sunoco, Inc., headquartered in Philadelphia, is a leading manufacturer and marketer of petroleum and petrochemical products. With 730,000 barrels per day of refining capacity, over 4,100 retail sites selling gasoline and convenience items, interests in over 10,000 miles of crude oil and refined product pipelines and 35 product terminals, Sunoco is one of the largest independent refiner/marketers in the United States. Sunoco is a growing force in petrochemicals with over nine billion pounds of gross annual production capacity, largely chemical intermediates used in the manufacture of fibers, plastics, film and resins. Utilizing a unique, patented technology, Sunoco also manufactures two million tons annually of high-quality metallurgical- grade coke for use in the steel industry. Anyone interested in obtaining further insights into this quarter's results can monitor the Company's quarterly teleconference call, which is scheduled for 3:00 p.m. EST today (January 23, 2002). 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.
Sunoco, Inc.
2001 Fourth Quarter and Twelve-Month Financial Summary
Fourth Quarter 2001 2000
Revenues $2,952,000,000 $3,864,000,000*
Net Income $4,000,000 $154,000,000
Net Income Per Share of Common Stock:
Basic $.05 $1.81
Diluted $.05 $1.80
Weighted Average Number of Shares
Outstanding (In Millions):
Basic 77.1 84.9
Diluted 78.3 85.4
Twelve Months
Revenues $14,143,000,000 $14,752,000,000*
Income from Continuing
Operations $398,000,000 $411,000,000
Income from Discontinued
Operations -- 11,000,000**
Net Income $398,000,000 $422,000,000
Earnings Per Share of Common Stock:
Basic:
Income from Continuing
Operations $4.92 $4.72
Income from Discontinued
Operations -- .13
Net Income $4.92 $4.85
Diluted:
Income from Continuing Operations $4.85 $4.70
Income from Discontinued Operations -- .12
Net Income $4.85 $4.82
Weighted Average Number of Shares
Outstanding (In Millions):
Basic 80.9 87.0
Diluted 82.0 87.5
** Represents a favorable adjustment to the gain on divestment of
Sunoco's international oil and gas production business which was sold
in 1996.
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars)
Three Months
Ended
December 31
2001 2000* Variance
Refining and Supply $(16) $ 95 $(111)
Retail Marketing 12 29 (17)
Chemicals (4) 2 (6)
Logistics 9 11 (2)
Coke 16 17 (1)
Corporate expenses (5) (5) --
Net financing expenses and other (19) (14) (5)
Operating income (loss) (7) 135 (142)
Special items:
Income tax settlement -- 38 (38)
Write-down of assets and
other matters 14 (17) 31
Value Added and Eastern
Lubricants** (3) (2) (1)
Consolidated net income $4 $ 154 $(150)
** In connection with the Company's decision to dispose of its Puerto Rico
refinery, lubricants blending and packaging facilities and lubricants
branded marketing assets (collectively, "Value Added and Eastern
Lubricants"), commencing with the fourth quarter of 2000, those
operations are reported as a special item.
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars)
Twelve Months Ended
December 31
2001 2000* Variance
Refining and Supply** $290 $ 317 $(27)
Retail Marketing 98 77 21
Chemicals 6 16 (10)
Logistics 42 46 (4)
Coke 61 61 --
Corporate expenses (24) (23) (1)
Net financing expenses and other (82) (56) (26)
Operating income 391 438 (47)
Special items:
Income tax settlements 21 117 (96)
Insurance litigation
settlement -- 5 (5)
Write-down of assets and
other matters (12) (147) 135
Value Added and Eastern
Lubricants** (2) (2) --
Discontinued operations*** -- 11 (11)
Consolidated net income $398 $ 422 $(24)
** In connection with the Company's decision to dispose of its Value
Added and Eastern Lubricants operations, commencing with the fourth
quarter of 2000, those operations are reported as a special item
prior to their disposition. A loss of $29 million from Value Added and
Eastern Lubricants for the nine months ended September 30,2000 is
included in Refining and Supply.
*** Represents a favorable adjustment to the gain on divestment of
Sunoco's international oil and gas production business which was sold
in 1996.
Sunoco, Inc.
Financial and Operating Statistics
For the For the Twelve
Quarter Ended Months Ended
December 31 December 31
2001 2000 2001 2000
TOTAL REFINING AND SUPPLY
Income (Loss) (Millions
of Dollars) $(16) $95 $290 $317*
Realized Wholesale
Margin (Per Barrel) $3.45 $6.71 $6.04 $6.01
Input to Crude Units (Thousand
Barrels Daily) 681.6 662.6 687.7 673.3
Input as Percent of
Rated Capacity 93 91 94 92
Sales of Refined Products (Thousand
Barrels Daily):
To Unaffiliated Customers:
Gasoline: 144.1 148.7 137.5 145.0
Middle Distillates 200.3 218.7 205.7 219.5
Residual Fuel 62.0 53.9 59.8 55.6
Petrochemicals 11.8 14.3 13.5 13.4
Lubricants** 9.5 8.1 9.3 8.5
Other (including third-party
lubes-extracted feedstocks) 58.1 50.3 52.8 52.0
485.8 494.0 478.6 494.0
To Affiliates (primarily
gasoline) 292.1 269.2 287.6 263.7
777.9 763.2 766.2 757.7
* Includes loss of $29 million attributable to Value Added and Eastern
Lubricants operations.
** Consists of base oils, specialty oils, process oils, waxes and
extracts.
Sunoco, Inc.
Financial and Operating Statistics
For the For the Twelve
Quarter Ended Months Ended
December 31 December 31
2001 2000 2001 2000
NORTHEAST REFINING SYSTEM
Realized Wholesale
Margin (Per Barrel) $2.79 $6.92 $5.20 $6.08
Market Benchmark 6-3-2-1
(Per Barrel) $1.68 $6.40 $3.52 $5.10
Input to Crude Units
(Thousand Barrels Daily) 460.5 441.3 468.5 460.5
Input as Percent of Rated
Capacity 91 87 93 91
Total Sales of Refined
Products (Thousand Barrels
Daily) 556.8 531.8 545.6 539.4
TOLEDO REFINERY
Realized Wholesale
Margin (Per Barrel) $4.56 $6.68 $8.13 $6.17
Market Benchmark 4-3-1
(Per Barrel) $2.98 $4.98 $7.11 $5.53
Input to Crude Units
(Thousand Barrels Daily) 142.3 137.7 140.6 133.6
Input as Percent of
Rated Capacity 102 98 100 95
Total Sales of Refined
Products (Thousand Barrels
Daily) 146.9 154.7 147.2 144.9
TULSA REFINERY
Realized Wholesale Margin
(Per barrel) $5.84 $4.97 $7.49 $4.87
Market Benchmark 3-1-2
(Per Barrel) $4.12 $5.20 $6.94 $5.46
Input to Crude Units
(Thousand Barrels Daily) 78.8 83.6 78.6 79.2
Input as Percent of
Rated Capacity 93 98 92 93
Total Sales of Refined
Products (Thousand Barrels
Daily) 78.5 82.2 79.6 78.3
Sunoco, Inc.
Financial and Operating Statistics
For the For the Twelve
Quarter Ended Months Ended
December 31 December 31
2001 2000 2001 2000
RETAIL MARKETING
Income (Millions of
Dollars) $12 $29 $98 $77
Retail Margin (Per Barrel):
Gasoline $3.80 $4.72 $4.27 $3.87
Middle Distillates $4.19 $5.42 $4.72 $4.97
Sales of Petroleum Products
(Thousand Barrels Daily):
Gasoline 247.6 230.4 244.1 225.3
Middle Distillates 35.8 32.8 35.0 31.7
283.4 263.2 279.1 257.0
Total Retail Gasoline
Outlets 4,151 3,635 4,151 3,635
Throughput per Company
Owned or Leased Outlet
(M Gal/Site/Month) 109 113 108 110
Convenience Stores:
Total Stores 652 541 652 541
Merchandise Sales
(M$/Store/Month) $67 $62 $64 $62
Merchandise Margin
(Company Operated)
(% of Sales) 25% 27% 26% 26%
CHEMICALS
Income (Loss) (Millions
of Dollars) $(4) $2 $6 $16
Margin (Cents per Pound)
- All Products 5.9 5.5 6.5 4.3
Sales (Millions of Pounds):
Phenol and Related
Products 655 421 2,605 1,771
Polypropylene* 336 -- 1,384 --
Plasticizers 132 -- 532 --
Propylene 155 144 715 761
Other 41 67 175 297
1,319 632 5,411 2,829
Margin for Key Products**
(Cents per Pound)
Phenol and Related
Products*** 7.9 8.8 8.0 4.5
Polypropylene* 7.5 -- 8.9 --
** Before terminalling and transportation costs. *** Consists of margin for phenol and byproducts divided by phenol sales
volumes. Excludes margin and sales volumes attributable to a long-
term, cost-based contract with Honeywell International Inc.
Sunoco, Inc.
Financial and Operating Statistics
For the For the Twelve
Quarter Ended Months Ended
December 31 December 31
2001 2000 2001 2000
COKE
Income (Millions of Dollars) $16 $17 $61 $61
Coke Production
(Thousand Tons) 509 500 2,006 2,010
Coke Sales (Thousand Tons) 510 497 2,002 2,011
CAPITAL EXPENDITURES (Millions of Dollars)
Refining and Supply $29 $ 97 $118 $257 *
Retail Marketing 44 53 114 ** 139
Chemicals 12 2 34 *** 21
Logistics 27 16 61 43
Coke 1 1 4 5
$113 $169 $331 $465
** Excludes $59 million purchase from The Coastal Corporation of 473
retail gasoline sites located in the eastern United States and related
working capital.
*** Excludes $649 million acquisition of Aristech Chemical Corporation and related working capital.
DEPRECIATION, DEPLETION AND
AMORTIZATION (Millions of Dollars)
Refining and Supply $39 $39 $151 $159
Retail Marketing 28 28 101 98
Chemicals 9 2 39 13
Logistics 5 4 18 16
Coke 3 3 12 12
$84 $76 $321 $298
At At
December 31 December 31
2001 2000
BALANCE SHEET INFORMATION
(Millions of Dollars)
Cash and Cash Equivalents $42 $239
Total Borrowings (including
Current Portion) $1,444 $935
Shareholders' Equity $1,642 $1,702
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars)
2000*
1st 2nd 3rd 4th Total
Refining and Supply** $ 44 $ 110 $ 68 $ 95 $ 317
Retail Marketing 14 9 25 29 77
Chemicals 7 4 3 2 16
Logistics 9 14 12 11 46
Coke 13 14 17 17 61
Corporate expenses (6) (6) (6) (5) (23)
Net financing expenses
and other (14) (13) (15) (14) (56)
Operating income 67 132 104 135 438
Special items:
Income tax settlement -- 79 -- 38 117
Insurance litigation
settlement -- -- 5 -- 5
Write-down of assets and other
matters -- 4 (134) (17) (147)
Value Added and Eastern
Lubricants** -- -- -- (2) (2)
Discontinued
operations*** 11 -- -- -- 11
Consolidated net
income (loss) $ 78 $215 $ (25) $154 $ 422
Earnings (loss) per share
of common
stock (diluted):
Operating income $.75 $1.50 $ 1.20 $1.58 $5.01
Special items .12 .94 (1.49) .22 (.19)
Net income (loss) $.87 $2.44 $ (.29) $1.80 $4.82
** In connection with the Company's decision to dispose of its Value
Added and Eastern Lubricants operations, effective with the fourth
quarter of 2000, those operations are being separately reported as a
special item. Prior to this quarter, they are included in Refining and
Supply.
*** Represents a favorable adjustment to the gain on divestment of
Sunoco's international oil and gas production business which was sold
in 1996.
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars)
2001
1st* 2nd* 3rd* 4th Total
Refining and Supply $ 102 $ 155 $ 49 $(16) $290
Retail Marketing 11 33 42 12 98
Chemicals (4) 14 -- (4) 6
Logistics 9 15 9 9 42
Coke 16 15 14 16 61
Corporate expenses (6) (6) (7) (5) (24)
Net financing expenses
and other (21) (22) (20) (19) (82)
Operating income(loss) 107 204 87 (7) 391
Special items:
Income tax settlement -- -- 21 -- 21
Write-down of assets and other
matters (7) (6) (13) 14 (12)
Value Added and Eastern
Lubricants** 6 (2) (3) (3) (2)
Consolidated net income $106 $196 $ 92 $4 $398
Earnings (loss) per share
of common
stock (diluted):
Operating income (loss) $1.26 $2.44 $1.07 $(.09) $4.77
Special items (.02) (.09) .07 .14 .08
Net income $1.24 $2.35 $1.14 $ .05 $4.85
** In connection with the Company's decision to dispose of its Value Added
and Eastern Lubricants operations, effective with the fourth quarter of
2000, those operations are being separately reported as a special item.
Prior to this quarter, they are included in Refining and Supply.
Sunoco, Inc.
Consolidated Statements of Operations
(Millions of Dollars)
2000*
1st 2nd 3rd 4th Total
REVENUES
Sales and other operating
revenue (including consumer
excise taxes) $3,244 $3,633 $3,819 $3,818 $14,514
Interest income 2 4 2 6 14
Other income 35 112 37 40 224
3,281 3,749 3,858 3,864 14,752
COSTS AND EXPENSES
Cost of products sold and
operating expenses 2,575 2,793 3,013 2,968 11,349
Consumer excise taxes 371 418 433 414 1,636
Selling, general and
administrative expenses 119 130 122 131 502
Depreciation, depletion and
amortization 73 74 75 76 298
Payroll, property and
other taxes 22 20 21 16 79
Provision for write-down
of assets and other
matters -- (7) 194 27 214
Interest cost and
debt expense 20 22 21 19 82
Interest capitalized (1) (1) -- (2) (4)
3,179 3,449 3,879 3,649 14,156
Income (loss) from
continuing operations
before income tax
expense 102 300 (21) 215 596
Income tax expense 35 85 4 61 185
Income (loss) from continuing
operations 67 215 (25) 154 411
Income from discontinued
operations 11 -- -- -- 11
Net Income (Loss) $78 $215 $(25) $154 $422
Sunoco, Inc.
Consolidated Statements of Operations
(Millions of Dollars)
2001
1st* 2nd* 3rd* 4th Total
REVENUES
Sales and other operating
revenue (including consumer
excise taxes) $3,627 $3,916 $3,588 $2,932 $14,063
Interest income 2 3 2 2 9
Other income 14 24 15 18 71
3,643 3,943 3,605 2,952 14,143
COSTS AND EXPENSES
Cost of products sold and
operating expenses 2,805 2,907 2,745 2,242 10,699
Consumer excise taxes 395 444 458 444 1,741
Selling, general and
administrative expenses 137 142 136 151 566
Depreciation, depletion and
amortization 77 80 80 84 321
Payroll, property and
other taxes 27 24 29 23 103
Provision for write-down
of assets and other
matters 11 9 21 (18) 23
Interest cost and
debt expense 25 27 25 26 103
Interest capitalized -- -- -- -- --
3,477 3,633 3,494 2,952 13,556
Income before income
tax expense 166 310 111 -- 587
Income tax expense
(benefit) 60 114 19 (4) 189
Net Income $106 $196 $92 $4 $398
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SOURCE Sunoco, Inc.
CONTACT: Jerry Davis (media), +1-215-977-6298, or Terry Delaney (investors), +1-215-977-6106, both of Sunoco/ |
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