For the full-year 2008, Sunoco reported net income of $776 million ($6.63 per share diluted) versus $891 million ($7.43 per share diluted) for the full-year 2007. Excluding [image-nocss] special items, income for 2008 was $874 million ($7.46 per share diluted) versus $833 million ($6.94 per share diluted) for the full-year 2007.
"Despite periods of very challenging market conditions and significant volatility in commodity prices, 2008 highlighted the strength of our diversified business portfolio," said Lynn Elsenhans, Sunoco's Chairman and CEO. "While the slowing U.S. economy and declining gasoline demand led to lower refining margins during 2008, a record contribution from our nonrefining businesses resulted in year-over-year operating earnings growth for Sunoco. In addition, despite the sharp decline in crude oil prices in the second half of the year that resulted in a significant increase in working capital requirements, Sunoco's financial position remains strong. We ended 2008 with $240 million of cash, approximately $1.4 billion of available committed borrowing capacity and a 37% net-debt-to-capital ratio as defined in the covenant of our revolving credit agreement."
He added, "As we enter 2009, we expect a challenging market for petroleum and chemical products that reflects continued economic weakness and additional global supply; however, our nonrefining businesses should continue to provide a solid base of earnings and operating cash flow. In addition, we will be focused on maintaining our financial flexibility through the disciplined execution of our capital program, improvement in our cost structure and the active pursuit of opportunities to create value within our portfolio of assets."
Refining & Supply earned $182 million in fourth-quarter 2008 versus $43 million in fourth-quarter 2007. The increase in earnings came as reduced industry production related to hurricane activity and falling crude oil prices led to higher realized margins early in the quarter.
Retail Marketing earned a record $103 million in fourth-quarter 2008 versus $1 million in fourth-quarter 2007. The increase in earnings was primarily due to significantly higher average retail gasoline and distillate margins that resulted from the steep decline in wholesale gasoline prices during the quarter. Partially offsetting the margin improvement was a decline in sales volumes due primarily to lower consumer demand.
Continuing its ongoing strategy to high-grade the allocation of invested capital throughout the retail network, Sunoco recently added approximately 150 company-owned or leased sites to its Retail Portfolio Management program. Over the next two years, Sunoco expects to generate an estimated $180 million of proceeds from the divestment of these and other sites remaining in this program. From 2006 to 2008, the company generated $133 million of divestment proceeds and $34 million of after-tax gains related to the sale of 181 sites.
Philadelphia-based Sunoco is a leading manufacturer and marketer of petroleum and petrochemical products. With 910 thousand barrels per day of refining capacity, approximately 4,700 retail sites selling gasoline and convenience items, approximately 6,000 miles of crude oil and refined product owned and operated pipelines and 43 product terminals, Sunoco is one of the largest independent refiner-marketers in the United States.
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