Sunoco 2004 Annual Report Download - page 30

Capital Expenditures and Acquisitions
The following table sets forth Sunoco’s planned and actual capital expenditures for addi-
tions to properties, plants and equipment. Actual capital expenditures are consistent with
the presentation of the 2005 plan amounts in the table as well as with amounts presented
in Sunoco’s consolidated financial statements. The Company’s significant acquisitions are
included as footnotes to the table so that total capital outlays for each business unit can be
determined.
(Millions of Dollars) 2005 Plan 2004 2003 2002
Refining and Supply $587 $463* $245 $179
Retail Marketing 130 103** 107*** 124
Chemicals 74 56* 31†36
Logistics 30 75* 39 41††
Coke 25 135 55
Consolidated capital expenditures $846 $832 $427 $385
* Excludes $250 million acquisition from El Paso Corporation of the Eagle Point refinery and related chemical and logistics assets,
which includes inventory. The $250 million purchase price is comprised of $190, $40 and $20 million attributable to Refining and
Supply, Chemicals and Logistics, respectively.
** Excludes $181 million acquisition from ConocoPhillips of 340 retail outlets located primarily in Delaware, Maryland, Virginia and
Washington, D.C., which includes inventory.
*** Excludes $162 million purchase from a subsidiary of Marathon Ashland Petroleum LLC of 193 retail gasoline sites located primarily in
Florida and South Carolina, which includes inventory.
†Excludes $198 million associated with the formation of a propylene partnership with Equistar Chemicals, L.P. and a related supply
contract and the acquisition of Equistar’s Bayport polypropylene facility, which includes inventory.
†† Excludes $54 million purchase from an affiliate of Union Oil Company of California (“Unocal”) of interests in three Midwestern and
Western U.S. products pipeline companies and a $6 million purchase that increased the Partnership’s ownership interest in the West
Texas Gulf Pipeline from 17.3 percent to 43.8 percent.
The 2005 planned capital outlays include $383 million for base spending, $45 million for
turnarounds at the Company’s refineries, $294 million for spending associated with meet-
ing Tier II clean fuels specifications (see “Environmental Matters” below), $17 million to
complete the construction of a $146 million 550 thousand tons-per-year cokemaking fa-
cility in Haverhill, OH and $107 million for various other income improvement projects.
In addition to normal infrastructure and maintenance capital requirements, the $383 mil-
lion for base spending includes several projects to upgrade Sunoco’s existing asset base.
These projects include $24 million to complete the $33 million expansion of the sulfur
recovery unit at the Eagle Point refinery, $36 million for new processing equipment, boilers
and reinstrumentation projects at the Company’s refineries and $67 million for additional
investments to upgrade Sunoco’s existing retail network and enhance its APlus®con-
venience store presence. Base spending also includes $5 million for conversion of the Mo-
bil®sites acquired from ConocoPhillips in 2004 to Sunoco®branded outlets. With respect
to the clean fuels spending, the Company estimates that total capital outlays to comply
with Tier II gasoline and on-road diesel specifications will be approximately $550 million.
The Company expects that most of this spending will occur through 2006. Through year-
end 2004, the Company’s Tier II spending totaled $233 million. The $107 million for in-
come improvement projects includes capital for refinery projects, including expenditures to
increase hydrotreater capacity at the Toledo refinery, to restart an alkylation unit at the
Philadelphia refinery and to upgrade various catalytic cracker units. Planned spending also
includes capital for production upgrades in certain chemical facilities.
In addition to the purchase of the Eagle Point refinery and related chemical and logistics
assets and the 340 service stations from ConocoPhillips, the 2004 capital outlays included
$298 million for base infrastructure and maintenance, $122 million for refinery turn-
arounds, $208 million for spending to comply with the Tier II low-sulfur gasoline and on-
road diesel fuel requirements and $204 million for income improvement projects. Base
infrastructure spending included $9 million related to the expansion of the sulfur recovery
unit at the Eagle Point refinery. The income improvement spending consisted of $128 mil-
lion towards the construction of the Haverhill, OH cokemaking facility, $45 million for
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