Sunoco 2005 Annual Report Download - page 10

• Optimize the Company’s capital structure; and
• Return cash to the Company’s shareholders through the payment of cash dividends
and the purchase of Company common stock.
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 Speedway®
retail gasoline sites located primarily in Florida and South Carolina.
• In January 2004, Sunoco completed the acquisition from El Paso Corporation of the
150 thousand barrels-per-day Eagle Point refinery and related assets located near the
Company’s existing Northeast Refining operations for $250 million, including
inventory.
• In January 2004, the Company completed the sale of its plasticizer business to BASF,
generating approximately $90 million of cash proceeds.
• In April 2004, Sunoco completed the $181 million purchase from ConocoPhillips of
340 Mobil®retail outlets located primarily in Delaware, Maryland, Virginia and
Washington, D.C.
• During the second quarter of 2004, Sunoco sold its private label consumer and commer-
cial credit card business and related accounts receivable to Citibank, generating $100
million of cash proceeds.
• In September 2004, Sunoco completed the sale of its one-third interest in the Belvieu
Environmental Fuels MTBE production facility to Enterprise Products Operating L.P.,
generating $15 million of cash proceeds.
• In 2004, Sunoco completed a debt restructuring, which reduced its outstanding debt by
approximately $100 million and lowered its weighted-average interest rate. Pretax
interest expense declined approximately $20 million in 2005 as a result of the debt re-
structuring.
• In March 2005, Sun Coke commenced cokemaking operations at its 550 thousand
tons-per-year Haverhill facility.
• During 2005 and 2004, Sunoco Logistics Partners L.P. (the “Partnership”) issued 7.8
million limited partnership units in a series of public offerings, generating $289 million
of net proceeds. Coincident with these offerings, the Partnership redeemed 5.0 million
limited partnership units owned by Sunoco for $182 million. As a result of these trans-
actions, Sunoco’s ownership interest in this master limited partnership was reduced
from 75.3 percent to 47.9 percent.
• In August 2005, Sunoco Logistics Partners L.P. completed the $100 million purchase
from ExxonMobil of a crude oil pipeline system and related storage facilities located in
Texas and, in the fourth quarter of 2005, completed the construction of a $16 million,
20-mile crude oil pipeline connecting these assets to the West Texas Gulf Pipeline,
which is 43.8 percent owned by the Partnership.
• In March 2006, Sunoco Logistics Partners L.P. completed the purchase of two other
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 ap-
proximately $41 million.
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