For the full-year 2009, Sunoco reported a net loss attributable to Sunoco shareholders [image-nocss] of $329 million ($2.81 per share diluted) compared to net income attributable to Sunoco shareholders of $776 million ($6.63 per share diluted) in 2008. Excluding special items, Sunoco reported a loss of $37 million (32 cents per share diluted) in 2009 compared to income of $874 million ($7.46 per share diluted) in 2008.
"While we entered 2009 expecting a challenging market for petroleum and chemical products, the depth and scale of the global economic downturn and its impact on our industry was even greater than anticipated," said Lynn Elsenhans, chairman and CEO. "In this difficult environment, the company continues to take aggressive actions to address those issues within our control. While our refining and chemicals results were significantly impacted in 2009 by weak demand and rising feedstock costs, we managed to produce strong earnings in our other businesses as a result of good execution and a sharp focus on costs. We successfully executed our business improvement initiative, exceeding the targeted $300 million in cost savings on an annualized basis by the end of 2009. Despite the challenging economy, Sunoco also effectively managed working capital and maintained a relatively strong financial position."
She added, "In 2010, we expect to see a full year's benefit of the lower cost structure from both the business improvement initiative and closure of the Eagle Point refinery. We will also benefit from reducing the dividend and scaling back our pension and healthcare benefits."
Elsenhans continued, "We continue to expect a challenging market for petroleum and chemical products due to ongoing economic weakness and excess global supply; however, the company has responded to the market environment with several strategic actions to improve our competitive cost position and optimize our portfolio and operating performance. Most recently, we announced that we have shut down our previously idled Eagle Point refinery and that we have signed a definitive agreement to sell our polypropylene business, which comprises a significant portion of our chemicals business, for approximately $350 million in cash, which we believe represents good value for our shareholders. Earlier in 2009, we sold our Tulsa refinery and retail home heating oil business. These portfolio changes addressed areas of the business that were not meeting their cost of capital and allow the company to redeploy capital to the growth of [other] businesses while continuing to invest in our strong retail brand."
Refining& Supply had a loss from continuing operations of $135 million in the fourth quarter of 2009 versus income of $146 million in the fourth quarter of 2008. The decrease in results was due to lower realized margins and production volumes, partially offset by lower expenses.Realized margins continued to be negatively affected by market weakness during the quarter. The overall crude utilization rate was 85% for the quarter, up from 74% in the third quarter of 2009. This increase reflects higher utilization at the Philadelphia and Marcus Hook refineries as a result of a shift of production from the Eagle Point refinery in connection with the idling of this facility in early November. First-quarter production in 2010 will be impacted by planned turnarounds at both our Marcus Hook and Toledo refineries.
Discontinued Tulsa refining operations, which were divested on June 1, 2009, had income of $36 million in the fourth quarter of 2008.
Retail Marketing earned $21 million in the current quarter versus $103 million in the fourth quarter of 2008. The decrease in earnings was primarily due to lower average retail gasoline and distillate margins, partially offset by lower expenses. Sales volumes were up slightly versus the year-ago quarter. Retail gasoline margins in the second half of 2008 benefited from the rapid decrease in wholesale prices during that period, while wholesale prices were rising during much of the second half of 2009.
Sunoco, headquartered in Philadelphia, is a leading manufacturer and marketer of petroleum and petrochemical products. With 675 thousand barrels per day of refining capacity, approximately 4,700 retail sites selling gasoline and convenience items, and an ownership interest in approximately 6,000 miles of crude oil and refined product pipelines and approximately 40 product terminals, Sunoco is one of the largest independent refiner-marketers in the United States.
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