Sunoco 2003 Annual Report Download - page 14

Strategic Actions
Sunoco is committed to improving its results and enhancing its shareholder value while, at
the same time, maintaining its financial strength and flexibility by continuing to:
• Deliver excellence in health and safety and environmental compliance;
• Increase reliability and realize additional efficiencies in each of the Company’s
operations;
• Prudently manage expenses and capital spending;
• Diversify, upgrade and growthe Company’s asset portfolio through strategic acquisitions
and investments;
• Divest assets that do not meet the Company’s return-on-investment criteria; and
• Return cash to the Company’s shareholders through the payment of cash dividends and
the purchase of Company common stock.
Recently, Sunoco has undertaken the following initiatives as part of this strategy:
• Effective March 31, 2003, the Company invested $198 million to secure a favorable
long-term supply of propylene for its Gulf Coast polypropylene business through the
formation of a limited partnership with Equistar Chemicals, L.P. (“Equistar”) and to
increase its polypropylene capacity through the acquisition of Equistar’s polypropylene
facility in Bayport, TX.
• During the second quarter of 2003, Sunoco completed the $162 million purchase from a
subsidiary of Marathon Ashland Petroleum LLC (“Marathon”) of 193 retail gasoline
sites located primarily in Florida and South Carolina.
• In October 2003, Sunoco entered into an agreement with International Steel Group
under which the Company will build and operate a 550,000 tons-per-year, $140 million
cokemaking facility in Haverhill, OH, which is expected to be operational in March
2005.
• During the fourth quarter of 2003, Sunoco substantially completed a program to sell its
interest in certain retail sites in Michigan and the southern Ohio markets of Columbus,
Dayton and Cincinnati, generating $46 million of cash proceeds.
• In January 2004, Sunoco completed the acquisition from El Paso Corporation of the
150 thousand barrels-per-day Eagle Point refinery located near the Company’s existing
Northeast Refining operations and related assets for $235 million, including an esti-
mated $124 million for inventory.
• In January 2004, the Company completed the sale of its plasticizer business to BASF,
generating approximately $90 million of cash proceeds.
• In January 2004, Sunoco agreed to purchase from ConocoPhillips 385 retail outlets lo-
cated primarily in Delaware, Maryland, Virginia and Washington, D.C. for $187 mil-
lion, plus related inventory. The transaction is subject to certain conditions including
regulatory approval and the completion of due diligence.
• During the fourth quarter of 2003, Sunoco increased the quarterly dividend paid on
common stock from $.25 per share ($1.00 per year) to $.275 per share ($1.10 per year).
• During 2003, the Company repurchased 2.9 million shares, or 4 percent, of its out-
standing common stock for $136 million. At December 31, 2003, the Company had a
remaining authorization from its Board of Directors to purchase up to $243 million of
Company common stock. Sunoco expects to continue to purchase Company common
stock in the open market from time to time depending on prevailing market conditions
and available cash.
For additional information regarding the above actions, see Notes 2, 3, 14 and 18 to the
consolidated financial statements.
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