PHILADELPHIA, Aug. 2 /PRNewswire-FirstCall/ -- Sunoco, Inc. (NYSE: SUN)
today reported net income of $426 million ($3.22 per share diluted) for the
second quarter of 2006 versus $242 million ($1.75 per share diluted) for
the second quarter of 2005. For the first half of 2006, Sunoco reported net
income of $505 million ($3.80 per share diluted) versus $358 million ($2.58
per share diluted) in the first half of 2005. There were no special items
in either the quarterly or year-to-date periods.
(Logo: http://www.newscom.com/cgi-bin/prnh/19981105/PHTH006 )
"Strong refining margins, particularly for ethanol-blended gasoline and
low-sulfur diesel products, led to record quarterly earnings," said John G.
Drosdick, Sunoco Chairman and Chief Executive Officer. "Margins
strengthened during the quarter as the tight supply/demand balance in
refining markets continued. Despite the higher prices associated with crude
oil and product price increases, we continued to see steady demand for
transportation fuels in the second quarter."
Drosdick continued, "In this market, our income again came largely from
Refining and Supply, which earned $409 million for the quarter. With
overall conversion unit utilization rates at approximately 98 percent,
operations were strong and enabled us to maximize supply of premium
gasoline and distillate products.
"Refining margins have remained relatively strong into the third
quarter to date. Unscheduled maintenance in our Northeast Refining system
reduced production by approximately four million barrels in July but is now
complete and no further significant maintenance is planned for the quarter.
With continued modest demand growth, the outlook for refining remains
favorable.
"Non-refining business unit earnings totaled $40 million for the
quarter. Retail Marketing earnings were up versus a year ago due to
slightly higher retail gasoline margins. In our Chemicals business, the
further increases in chemical feedstock cost, particularly propylene, led
to much lower margins for polypropylene and phenol than in the 2005 second
quarter. Market conditions for these businesses are similar at this time."
Drosdick added, "We continued our share repurchase program - $150
million during the quarter and $198 million year-to-date and have reduced
our shares outstanding by two percent so far this year. With a recently
approved increase, the remaining share repurchase authorization is
currently $609 million."
Commenting on capital expenditures, Drosdick said, "We continue to
execute our capital program in Refining and Supply and update estimates for
future projects. While we still expect capital spending of approximately
$600-$700 million annually in this business over the next several years,
tightened market conditions for engineering, procurement and construction
have raised cost estimates and lengthened anticipated completion schedules
for many projects being considered. These pressures are likely to result in
the extension of completion dates for some projects and the deferral or
cancellation of others that do not meet required investment-return
criteria. While potential economic returns for most refining upgrade or
expansion projects remain attractive, we will continue to be disciplined
when evaluating discretionary growth investments."
DETAILS OF SECOND QUARTER RESULTS
REFINING AND SUPPLY
Refining and Supply earned $409 million in the second quarter versus
$212 million in the second quarter of 2005. The increase in earnings was
due to higher realized margins in both the Northeast and MidContinent
regions, particularly for wholesale gasoline and distillate products.
Strong premiums for ethanol-blended gasoline and low-sulfur diesel fuel
supported the wholesale marketplace throughout the second quarter.
Partially offsetting these positive factors were higher expenses and lower
production volumes. The higher expenses in the quarter were mainly the
result of higher purchased fuel costs and expenses associated with
maintenance activities. Also contributing to the increase in expenses were
operating costs to produce low-sulfur fuels.
Total crude unit throughput averaged 863.8 thousand barrels daily (96
percent utilization) for the quarter, with total production available for
sale approximating 84 million barrels. MidContinent production was lower
than the prior-year quarter due to a maintenance turnaround at the Toledo
refinery that extended from the end of March into mid-April.
RETAIL MARKETING
Retail Marketing earned $10 million in the second quarter of 2006
versus $7 million in the second quarter of 2005. The increase was primarily
due to improved retail gasoline margins. Monthly gasoline and diesel
throughput per company owned or leased outlet was approximately 3 percent
higher than the second quarter of 2005.
CHEMICALS
Chemicals earned $8 million in the second quarter of 2006 versus $30
million in the prior-year period. The decrease in earnings was due
primarily to lower margins for both phenol and polypropylene, partially
offset by higher sales volumes, lower expenses and a $4 million deferred
tax benefit recognized in the second quarter of 2006 as a result of a state
law change. The average gross margin for phenol and related products was
almost 6 cents per pound lower than the second quarter of 2005 largely due
to weaker acetone and bisphenol-A markets. Polypropylene margins were
slightly over 2 cents per pound lower than the year-ago period.
LOGISTICS
Earnings for the Logistics segment were $12 million in the second
quarter versus $9 million in the second quarter of 2005. The increase was
due largely to higher earnings attributable to Eastern pipeline operations
and crude oil acquisition and marketing activities. Operating results from
the Partnership's acquisitions completed in 2006 and 2005 also contributed
to the increase. Partially offsetting these positive factors was Sunoco's
reduced ownership in the Partnership subsequent to the public equity
offerings in 2006 and 2005.
COKE
The Coke business earned $10 million in the second quarter of 2006
versus $13 million in the second quarter of 2005. The decrease was
primarily due to a $4 million partial phase-out of tax credits which
resulted from the high level of crude oil prices during the first half of
2006. Year-to-date, Sun Coke recorded only 61 percent of the benefit of the
tax credits that otherwise would have been available without regard to the
phase-out.
CORPORATE AND OTHER
Corporate administrative expenses were $11 million after tax in the
current quarter versus $16 million in the comparable quarter last year. The
decrease was largely due to lower accruals for performance-related
incentive compensation.
Net financing expenses were $12 million after tax in the second quarter
of 2006 versus $13 million in the second quarter of 2005. The decline was
primarily due to higher interest income, partially offset by an increase in
interest expense.
SIX MONTH RESULTS
Sunoco earned $505 million, or $3.80 per share of common stock on a
diluted basis, for the first six months of 2006 versus $358 million, or
$2.58 per share, in the comparable 2005 period. The increase was primarily
due to higher wholesale fuels margins. Also contributing to the improvement
in earnings were higher retail gasoline margins, a lower effective income
tax rate and higher earnings from Sunoco's Logistics business. Partially
offsetting these positive factors were higher expenses, including fuel
charges; lower chemical margins; and lower production of refined products.
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, over 4,700 retail sites
selling gasoline and convenience items, approximately 5,400 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 also has 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 3, 2006. It can be accessed
through Sunoco's Web site - http://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 from those discussed in the
foregoing 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 operation;
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
refined product 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 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 applicable 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 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 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 and
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 2006 Form 10-Q
filed with the Securities and Exchange Commission on May 4, 2006 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.
Sunoco, Inc.
2006 Second Quarter and Six-Month Financial Summary
(Unaudited)
Second Quarter 2006 2005
Revenues $10,590,000,000 $7,990,000,000
Net Income $426,000,000 $242,000,000
Net Income Per Share of
Common Stock*:
Basic $3.24 $1.77
Diluted $3.22 $1.75
Weighted-Average Number of Shares
Outstanding* (In Millions):
Basic 131.5 137.1
Diluted 132.2 138.0
Six Months
Revenues $19,183,000,000 $15,199,000,000
Net Income $505,000,000 $358,000,000
Net Income Per Share of
Common Stock*:
Basic $3.82 $2.60
Diluted $3.80 $2.58
Weighted-Average Number of Shares
Outstanding* (In Millions):
Basic 132.2 137.7
Diluted 132.9 138.5
*Share and per-share data presented for all periods reflect the effect of
a two-for-one stock split, which was effected in the form of a common
stock dividend distributed on August 1, 2005.
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars, Except Per Share Amounts)
(Unaudited)
Three Months Ended
June 30
2006 2005 Variance
Refining and Supply $409 $212 $197
Retail Marketing 10 7 3
Chemicals 8 30 (22)
Logistics 12 9 3
Coke 10 13 (3)
Corporate and Other:
Corporate expenses (11) (16) 5
Net financing expenses and other (12) (13) 1
Consolidated net income $426 $242 $184
Net income per share of
common stock (diluted) $3.22 $1.75 $1.47
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars, Except Per Share Amounts)
(Unaudited)
Six Months Ended
June 30
2006 2005 Variance
Refining and Supply $482 $320 $162
Retail Marketing 10 (1) 11
Chemicals 22 63 (41)
Logistics 18 12 6
Coke 24 23 1
Corporate and Other:
Corporate expenses (27) (32) 5
Net financing expenses and other (24) (27) 3
Consolidated net income $505 $358 $147
Net income per share of
common stock (diluted) $3.80 $2.58 $1.22
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
For the Three For the Six
Months Ended Months Ended
June 30 June 30
2006 2005 2006 2005
TOTAL REFINING AND SUPPLY
Income (Millions of
Dollars) $409 $212 $482 $320
Realized Wholesale
Margin* (Per Barrel of
Production Available
for Sale) $12.41 $7.87 $9.35 $6.92
Crude Inputs as Percent
of Crude Unit Rated
Capacity 96 99 94 98
Throughputs (Thousand
Barrels Daily):
Crude Oil 863.8 890.8 849.7 882.9
Other Feedstocks 76.7 63.3 72.7 58.0
Total Throughputs 940.5 954.1 922.4 940.9
Products Manufactured
(Thousand Barrels
Daily):
Gasoline 453.9 437.8 440.9 440.4
Middle Distillates 310.1 327.3 309.1 315.9
Residual Fuel 76.2 78.0 73.5 77.6
Petrochemicals 34.4 38.4 35.0 38.5
Lubricants 14.7 13.5 13.9 13.1
Other 83.9 95.0 84.7 92.2
Total Production 973.2 990.0 957.1 977.7
Less: Production Used
as Fuel in Refinery
Operations 44.9 48.9 44.6 47.8
Total Production
Available for Sale 928.3 941.1 912.5 929.9
*Wholesale sales revenue less related cost of crude oil, other feedstocks,
product purchases and terminalling and transportation divided by
production available for sale.
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
For the Three For the Six
Months Ended Months Ended
June 30 June 30
2006 2005 2006 2005
Northeast Refining*
Realized Wholesale Margin
(Per Barrel of Production
Available for Sale) $11.56 $7.55 $8.55 $6.84
Market Benchmark 6-3-2-1
(Per Barrel) $8.76 $6.06 $6.62 $5.29
Crude Inputs as Percent
of Crude Unit Rated
Capacity 98 100 95 99
Throughputs (Thousand
Barrels Daily):
Crude Oil 639.5 655.1 624.9 650.6
Other Feedstocks 69.2 56.5 64.7 51.7
Total Throughputs 708.7 711.6 689.6 702.3
Products Manufactured
(Thousand Barrels
Daily):
Gasoline 342.4 320.6 330.9 324.6
Middle Distillates 235.3 248.5 232.8 239.7
Residual Fuel 72.3 73.3 69.4 73.2
Petrochemicals 27.7 29.4 28.2 29.7
Other 54.2 65.4 52.9 61.6
Total Production 731.9 737.2 714.2 728.8
Less: Production Used
as Fuel in Refinery
Operations 34.1 36.8 33.3 36.1
Total Production
Available for
Sale 697.8 700.4 680.9 692.7
*Comprised of the Marcus Hook, Philadelphia and Eagle Point refineries.
MidContinent Refining*
Realized Wholesale Margin
(Per Barrel of Production
Available for Sale) $15.00 $8.80 $11.69 $7.14
Market Benchmark 3-2-1
(Per Barrel) $18.63 $9.94 $13.27 $8.09
Crude Inputs as Percent
of Crude Unit Rated
Capacity 92 96 92 95
Throughputs (Thousand
Barrels Daily):
Crude Oil 224.3 235.7 224.8 232.3
Other Feedstocks 7.5 6.8 8.0 6.3
Total Throughputs 231.8 242.5 232.8 238.6
*Comprised of the Toledo and Tulsa refineries.
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
For the Three For the Six
Months Ended Months Ended
June 30 June 30
2006 2005 2006 2005
MidContinent Refining (continued)
Products Manufactured
(Thousand Barrels
Daily):
Gasoline 111.5 117.2 110.0 115.8
Middle Distillates 74.8 78.8 76.3 76.2
Residual Fuel 3.9 4.7 4.1 4.4
Petrochemicals 6.7 9.0 6.8 8.8
Lubricants 14.7 13.5 13.9 13.1
Other 29.7 29.6 31.8 30.6
Total Production 241.3 252.8 242.9 248.9
Less: Production Used
as Fuel in Refinery
Operations 10.8 12.1 11.3 11.7
Total Production
Available for Sale 230.5 240.7 231.6 237.2
RETAIL MARKETING
Income (Loss)
(Millions of Dollars) $10 $7 $10 $(1)
Retail Margin* (Per Barrel):
Gasoline $3.53 $3.32 $3.21 $2.86
Middle Distillates $3.64 $3.34 $4.37 $4.27
Sales of Petroleum Products
(Thousand Barrels Daily):
Gasoline 308.9 305.4 298.3 297.6
Middle Distillates 41.4 42.2 43.9 45.8
350.3 347.6 342.2 343.4
Total Retail Gasoline
Outlets, End of Period 4,723 4,804 4,723 4,804
Gasoline and Diesel
Throughput per Company
Owned or Leased Outlet
(M Gal/Site/Month) 143 139 137 135
Convenience Stores:
Total Stores,
End of Period 736 742 736 742
Merchandise Sales
(M$/Store/Month) $82 $81 $76 $76
Merchandise Margin
(Company Operated)
(% of Sales) 27% 29% 28% 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.
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
For the Three For the Six
Months Ended Months Ended
June 30 June 30
2006* 2005 2006* 2005
CHEMICALS
Income
(Millions of Dollars) $8 $30 $22 $63
Margin** (Cents per Pound):
All Products*** 8.8 12.8 9.8 12.7
Phenol and Related Products 7.1 12.8 8.1 11.9
Polypropylene*** 11.1 13.2 12.2 14.3
Sales (Millions of Pounds):
Phenol and Related Products 663 617 1,296 1,298
Polypropylene 569 583 1,131 1,116
Other 21 16 42 49
1,253 1,216 2,469 2,463
*The income and margin data reflect a new pricing formula for 2006 sales
of phenol to Honeywell International Inc. based upon the outcome of
arbitration decisions in the third quarter of 2005 and first quarter of
2006.
**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) $12 $9 $18 $12
Pipeline and Terminal
Throughput (Thousand
Barrels Daily)*:
Unaffiliated Customers 1,001 820 1,019 826
Affiliated Customers 1,659 1,632 1,639 1,641
2,660 2,452 2,658 2,467
*Excludes joint-venture operations.
COKE*
Income
(Millions of Dollars) $10 $13 $24 $23
Coke Production
(Thousands of Tons) 627 625 1,258 1,128
Coke Sales
(Thousands of Tons) 632 621 1,279 1,118
*Includes amounts attributable to the Haverhill facility, which commenced
operations in March 2005.
Sunoco, Inc.
Financial and Operating Statistics (Unaudited)
For the Three For the Six
Months Ended Months Ended
June 30 June 30
2006 2005 2006 2005
CAPITAL EXPENDITURES
(Millions of Dollars)
Refining and Supply $179 $202 $309 $351
Retail Marketing 24 36 36 47
Chemicals 16 * 10 27 * 28
Logistics 36 11 52 ** 19
Coke 2 3 5 25
$257 $262 $429 $470
* 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 $55 $47 $111 $96
Retail Marketing 25 25 50 52
Chemicals 19 17 37 35
Logistics 10 8 19 16
Coke 5 5 9 8
$114 $102 $226 $207
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars, Except Per Share Amounts)
(Unaudited)
2005
1st 2nd 3rd 4th Total
Refining and Supply $108 $212 $341 $286 $947
Retail Marketing (8) 7 6 25 30
Chemicals 33 30 23 8 94
Logistics 3 9 7 3 22
Coke 10 13 15 10 48
Corporate and Other:
Corporate expenses (16) (16) (25) (27) (84)
Net financing expenses
and other (14) (13) (10) (8) (45)
116 242 357 297 1,012
Special items -- -- (28) (10) (38)
Consolidated net income $116 $242 $329 $287 $974
Earnings (loss) per share
of common stock (diluted):
Income before
special items $.83 $1.75 $2.60 $2.19 $7.36
Special items -- -- (.21) (.07) (.28)
Net income $.83 $1.75 $2.39 $2.12 $7.08
Sunoco, Inc.
Earnings Profile of Sunoco Businesses (after tax)
(Millions of Dollars, Except Per Share Amounts)
(Unaudited)
2006
1st 2nd
Refining and Supply $73 $409
Retail Marketing -- 10
Chemicals 14 8
Logistics 6 12
Coke 14 10
Corporate and Other:
Corporate expenses (16) (11)
Net financing expenses and other (12) (12)
79 426
Special items -- --
Consolidated net income $79 $426
Earnings per share of common stock (diluted):
Income before special items $.59 $3.22
Special items -- --
Net income $.59 $3.22
Sunoco, Inc.
Consolidated Statements of Income
(Millions of Dollars)
(Unaudited)
2005
1st 2nd 3rd 4th Total
REVENUES
Sales and other operating
revenue (including
consumer excise taxes) $7,191 $7,970 $9,345 $9,248 $33,754
Interest income 3 3 6 11 23
Other income (loss), net 15 17 (56) 11 (13)
7,209 7,990 9,295 9,270 33,764
COSTS AND EXPENSES
Cost of products sold
and operating expenses 6,059 6,581 7,702 7,686 28,028
Consumer excise taxes 585 640 675 688 2,588
Selling, general and
administrative expenses 209 225 242 270 946
Depreciation, depletion
and amortization 105 102 109 113 429
Payroll, property
and other taxes 36 28 33 27 124
Interest cost and debt expense 23 23 25 23 94
Interest capitalized (6) (6) (8) (5) (25)
7,011 7,593 8,778 8,802 32,184
Income before
income tax expense 198 397 517 468 1,580
Income tax expense 82 155 188 181 606
Net income $116 $242 $329 $287 $974
Sunoco, Inc.
Consolidated Statements of Income
(Millions of Dollars)
(Unaudited)
2006
1st 2nd
REVENUES
Sales and other operating revenue (including
consumer excise taxes) $8,569 $10,575
Interest income 10 8
Other income, net 14 7
8,593 10,590
COSTS AND EXPENSES
Cost of products sold and operating expenses 7,454 8,858
Consumer excise taxes 628 663
Selling, general and administrative expenses 210 210
Depreciation, depletion and amortization 112 114
Payroll, property and other taxes 34 31
Interest cost and debt expense 26 27
Interest capitalized (1) (4)
8,463 9,899
Income before income tax expense 130 691
Income tax expense 51 265
Net income $79 $426
Sunoco, Inc.
Consolidated Balance Sheets
(Millions of Dollars)
(Unaudited)
At At
June 30 December 31
2006 2005
ASSETS
Current Assets
Cash and cash equivalents $600 $919
Accounts and notes receivable, net 2,363 1,754
Inventories 1,194 799
Deferred income taxes 216 215
Total Current Assets 4,373 3,687
Investments and long-term receivables 127 143
Properties, plants and equipment, net 5,969 5,658
Prepaid retirement costs 12 12
Deferred charges and other assets 449 431
Total Assets $10,930 $9,931
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities
Accounts payable and accrued liabilities $4,186 $3,695
Current portion of long-term debt 195 177
Taxes payable 434 338
Total Current Liabilities 4,815 4,210
Long-term debt 1,243 1,234
Retirement benefit liabilities 537 563
Deferred income taxes 895 817
Other deferred credits and liabilities 400 409
Minority interests 745 647
Shareholders' equity 2,295 2,051
Total Liabilities and Shareholders' Equity $10,930 $9,931
Sunoco, Inc.
Consolidated Statements of Cash Flows
(Millions of Dollars)
(Unaudited)
For the Six Months
Ended June 30
2006 2005
INCREASES (DECREASES) IN CASH AND CASH EQUIVALENTS
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $505 $358
Adjustments to reconcile net income to net
cash provided by operating activities:
Phenol supply contract dispute payment (95) --
Proceeds from power contract restructuring -- 48
Depreciation, depletion and amortization 226 207
Deferred income tax expense 75 25
Payments in excess of expense for retirement
plans (26) (5)
Changes in working capital pertaining
to operating activities, net of effect
of acquisitions (343) (74)
Other 23 12
Net cash provided by operating activities 365 571
CASH FLOWS FROM INVESTING ACTIVITIES:
Capital expenditures (429) (470)
Acquisitions (123) --
Proceeds from divestments 28 21
Other (9) 5
Net cash used in investing activities (533) (444)
CASH FLOWS FROM FINANCING ACTIVITIES:
Net proceeds from issuance of long-term debt 301 --
Repayments of long-term debt (275) (13)
Net proceeds from issuance of Sunoco Logistics
Partners L.P. limited partnership units 110 99
Cash distributions to investors in cokemaking
operations (7) (11)
Cash distributions to investors in Sunoco
Logistics Partners L.P. (22) (12)
Cash dividend payments (60) (48)
Purchases of common stock for treasury (198) (131)
Proceeds from issuance of common stock under
management incentive and employee option plans 1 6
Other (1) (5)
Net cash used in financing activities (151) (115)
Net increase (decrease) in cash and cash
equivalents (319) 12
Cash and cash equivalents at beginning of period 919 405
Cash and cash equivalents at end of period $600 $417
SOURCE Sunoco, Inc.
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http://www.SunocoInc.com
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CONTACT:
Jerry Davis (media), +1-215-977-6298, or Tom
Harr (investors), +1-215-977-6764, both of Sunoco
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